Calgary — A healthy Alberta economy depends on our exports. From oil and gas to beef, to wheat, wood and medical instruments, Alberta has a lot to sell to other provinces and the rest of the world—and when it does, it generates money and jobs.
The latest edition of ATB Financial’s Perch takes a close look at what we export and to whom, a particularly timely topic as the province continues to wade through an economic downturn due to the slide in the price of our biggest export: oil and gas.
“It’s not a surprise that oil and gas exports fell by 31.2 per cent in 2015 compared to a drop of only 0.9 per cent for all other exports,” says Rob Roach, ATB’s director of insight. ”But despite the dip, our oil and gas sector is still the export tail that wags the provincial economic dog.”
In 2014, when prices were higher, oil and gas accounted for 75.5 per cent ($92.3 billion) of Alberta’s international merchandise exports. In 2015, oil and natural gas accounted for 69.3 per cent ($63.5 billion). As Perch outlines, Alberta’s oil and gas exports were still worth 1.7 times more than everything exported from British Columbia.
“Even though we would have other economic drivers on hand including agriculture, tourism and forestry, we would still have a gaping hole to fill if our oil and gas sector suddenly vanished,” says Roach.
In Alberta, our second largest export category is agricultural products. In 2015, agricultural exports increased by 4.4 per cent and wood and paper product exports increased by 11.3 per cent.
Other key findings in Perch:
Alberta exported over $131 billion worth of goods and services to other countries in 2014—21.0 per cent of the national total.
- In per capita terms, Alberta exported $31,811 per Albertan in 2014—almost double the national average. The only province with a higher per capita figure was Saskatchewan at $33,844.
- Crude oil accounted for 82.7 per cent of the value of Alberta’s oil and gas exports in 2015, while natural gas accounted for 15.6 per cent. Crude exports fell by 31.0 per cent between 2014 and 2015, while natural gas exports fell by 37.1 per cent.
- Alberta sent 86.6 per cent ($80.5 billion) of its exports to the United States in 2015. The $12.4 billion worth of exports that we did not sell to the US went to 196 countries all over the world.
“Between 1990 and 2015, we exported over one trillion dollars worth of oil and gas”, notes Roach. So while greater economic diversification is a worthy goal, we are not going to be able to replace our highly lucrative oil and gas sector anytime soon.”
With that, Perch raises two critical questions: How do we keep our oil and gas sector healthy? What else should we be doing to boost our non-oil and gas exports?
“It won’t be easy, but we can start by expanding our oil and gas customer base beyond the US. There are billions of other customers out there to whom we can sell both existing and new products and services. We also need those pipes to tidewater and eastern Canadian refineries,” states Roach. “And finally, whether it is fossil fuels or the many other products we sell to our American cousins, we need good relations and an open border.”
More on ATB’s research on Alberta’s exports can be found here. An extended report on Alberta’s export economy can be found on atb.com/economics