Detailed Balance of Trade

Topic Box from the 2006 Sixth Annual Benchmark Report

Trade in goods and services, (international and interprovincial) is an important part of British Columbia's economy. Interprovincial exports of goods and services totalled close to $26 billion in 2005, with services representing slightly more than 50 percent of the total ($12.9 billion versus $12.7 billion for goods). International exports in 2005 accounted for more than $48 billion, of which the majority (79%) was trade in goods. In total, exports were equal to 43.9 percent of BC's GDP in 2005.

The balance of trade for BC – representing exports minus imports – was consistently negative in interprovincial trade and consistently positive in international trade for 1981 through 2005. Interprovincially, the deficit in terms of goods has been shrinking since 1995, while the deficit in interprovincial service trade has more than doubled from $1.5 billion in 1995 to $3.2 billion in 2005. Internationally, BC has a stable surplus in terms of services for the entire 1981-2005 period, growing from a low of $26 million in 1990 to more than $3.3 billion in 2005; international goods were in surplus for every year except 1998 and 2002. BC's overall trade balance for 1981 to 2005 is depicted in the figure above, highlighting a stable balance in services trade (with a low of -$933 million and a high of $1.3 billion), and a trade deficit driven by a deficit in the balance of trade for goods starting in the late 1980s.

A trade deficit is not problematic for an economy unless it becomes very large relative to what is being produced; in BC the overall trade deficit represented just 2.5 percent of GDP in 2005. Although BC's interprovincial trade deficit has been the largest in Canada for the entire period 1981 to 2005, (in 2005 the interprovincial deficit was $8.4 billion) as a share of GDP, BC's interprovicial deficit is smaller than all provinces with an interprovincial deficit except Quebec and Newfoundland and Labrador. The Overall Trade Balance in the table below is a combination of the "International" and "Interprovincial" total trade balances.