How intertwined are the US and Canadian economies? How valuable is this trading relationship to BC's various sectors? The Business Council of BC takes a look at some key economic connections between the two countries, and with the province of British Columbia.

1. S O M E K E Y E C O N O M I C T I E S B E T W E E N
B R I T I S H C O L U M B I A , C A N A D A A N D
T H E U N I T E D S TAT E S
FEBRUARY 9, 2017
JOCK FINLAYSON
Executive Vice President and Chief Policy Officer

2. AMERICA’S HUGE ECONOMY MATTERS! 2
• Equivalent to $23 trillion (CDN) of nominal GDP (~22% of global total), versus $2 trillion for Canada,
based on market exchange rates
• American consumer spending = more than one-fifth of world total
• Consider the size of these US metro areas, compared to the paired countries (annual GDP):
Metro New York > Australia Greater Atlanta > Malaysia
LA/Long Beach/Anaheim > Netherlands Seattle/Tacoma/Bellevue > Singapore
Metro Chicago > Nigeria Miami/Fort Lauderdale > Israel
Greater Houston* > Taiwan Greater Detroit > Greece
Dallas-Fort Worth > Norway Metro Minneapolis > Portugal
Washington/Arlington > Austria Denver/Aurora > Vietnam
San Francisco/Oakland > Ireland Portland/Vancouver WA > Hungary
Boston/Cambridge > Colombia
(* Also 2.5x bigger than the BC economy!)
Source: American Enterprise Institute.

3. SOME ECONOMIC IMPLICATIONS OF THE TRUMP
(AND REPUBLICAN) VICTORY…FOR CANADA
3
Positive
• Faster US economic growth due to stepped-up infrastructure and defense spending, plus big tax cuts, should
increase the demand for Canadian exports and boost our tourism sector
• More skilled immigrants may be attracted to Canada if the US becomes less welcoming
• Revival of the Keystone pipeline = improved access to the US for Canadian oil; plus, under President Trump,
America may come to favour oil imports from ‘friendly’ nations
Negative
• Renegotiation of NAFTA – downside risks for Canada
• Prospect of protectionist wave if US slaps tariffs on China and others – who then retaliate
• Potential US ‘border tax adjustment’ would hurt Canada (unless exempted)
• Sharp decline in Canadian tax competitiveness under Trump/Republican plan (federal corporate tax rate drops
from 35% to 15-20%, top personal tax rate goes from 39.6% to 33%)
• US rejection of Paris accord and national carbon pricing will put Canada at an ever growing disadvantage in
energy costs

4. WIDESPREAD LONG-TERM DECLINE IN
MANUFACTURING JOBS, 1990-2014 (%)
4
Source: The Economist, December 10, 2016.
UK -49%
Japan -34%
Sweden -33%
France -33%
US -31%
Germany -26%
Italy -24%
S. Korea -1%
Taiwan +10%

5. PRESIDENT TRUMP, WE SHARE YOUR PAIN!
CUMULATIVE CHANGE IN MANUFACTURING
EMPLOYMENT SINCE 2000 (% DECREASE)
5
Source: Conference Board of Canada.
-26%
-24%
-22%
-20%
-18%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
US Canada

6. 6
Source: National Bank Financial Markets, “Canada’s Trade Prospects Amidst Changing US Trade Policy,” January 30, 2017.
SHARE OF US GOODS TRADE DEFICIT ATTRIBUTED TO
INDIVIDUAL TRADING PARTNERS
( % O F T O TA L T R AD E D E F I C I T, 2 0 1 6 )
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Canada
Indonesia
Taiwan
Switzerland
France
Thailand
Malaysia
India
Italy
S. Korea
Vietnam
Ireland
Mexico
Germany
Japan
China

7. CANADA FAR MORE RELIANT ON BOTH BILATERAL AND
TOTAL TRADE THAN THE UNITED STATES
7
Source: TD Economics, January 2017.
0%
10%
20%
30%
40%
50%
60%
70%
United States Canada
Exports plus Imports as % of GDP, 2015
Total trade ex-bilateral Bilateral trade

8. SOURCES OF AMERICAN OIL AND
NATURAL GAS IMPORTS, 2015 8
Source: Credit Suisse.
Oil
(millions of barrels per day)
Canada
3.169
Mexico
0.688
Saudi
Arabia
1.052
Iraq
0.229
Kuwait
0.204
Venezuela
0.776
Colombia
0.373
Ecuador
0.225
Brazil
0.190
Angola
0.124
Natural Gas
(bcf/day)
Canada
7.193
Trinidad
0.196
Norway (LNG)
0.033
Yemen (LNG)
0.020
Mexico
(pipeline)
0.003

9. 9
Source: Deutsch Bank Market Research.
GLOBAL ECONOMIC IMPACT OF 20% US BORDER TAX
( D E C L I N E I N N AT I O N A L G D P D U E T O I M PAC T O N N E T T R AD E F L O W S )
-7% -6% -5% -4% -3% -2% -1% 0%
Eurozone
UK
Japan
Philippines
China
Chile
S. Korea
Switzerland
Colombia
Singapore
Taiwan
Thailand
Israel
Malaysia
Canada
Vietnam
Mexico

10. BC EXPORTS* BY DESTINATION (2015) 10
* Goods exports only
US
52%Pacific Rim
(includes
Japan)
38%
Rest of the
world
10%

11. BC’S MAIN TRADED INDUSTRIES –
VALUE OF EXPORTS 2015
11
Source: BC Stats * merchandise exports
Forestry Others (cont’d)
Wood products $8.5 billion Natural gas $1.4 billion
Pulp and paper $4.4 billion Agrifood products $2.7 billion
Total forestry $12.9 billion Fabricated metals $1.1 billion
Forestry as % of total exports* 36% Fish products $1.1 billion
Others Chemical products $1.1 billion
Metallic minerals $4.4 billion Plastics $426 million
Machinery and equipment $4.8 billion Apparel etc. $124 million
Coal $3.1 billion Total BC goods
exports:
$35.8 billion
BC also has service industry clusters that engage in international trade, of which the most important are
tourism (~$4 billion of exports), transportation, communications (incl. software), education, engineering, and
technical/scientific/environmental services

12. BC EXPORTS REBOUNDED LAST YEAR 12
Latest: November 2016
Source: BC Stats.
900
1100
1300
1500
1700
1900
2100
2010 2011 2012 2013 2014 2015 2016
Thousands
BC int. merchandise exports, millions $
US
rest of world
0 5 10 15
China
Japan
South Korea
US
India
Total
Export growth (Jan-Nov) by country, annual
% chng

13. TOP 20 BC-ORIGIN MERCHANDISE EXPORTS TO THE
UNITED STATES (BY VALUE)
13
Source: BC Stats.
5
Electrical
and electronic
communication products
1 Lumber 2 Natural
gas 3 Zinc 4 Chemical
products
6
Selected
value
added wood
products
7 Paper and
paperboard 8 Electricity 9 Whole
salmon 10 Pulp
11 Plastics 12
Motor
vehicles
and parts
13
Scientific
and
measuring
equipment
14
Other
panel
products
15 Plywood
and veneer
16 Fruit
and nuts 17 Vegetables 18
Bread,
pastry,
cereals,
pasta, etc.
19
Aircraft
and
parts
20 Lead

14. THE BUSINESS COUNCIL OF BRITISH COLUMBIA
BCBC.COM
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w hi c h s uppor t hundr e ds of t hous a nds of j obs a c r os s t he pr ovi nc e .
The c ounc i l pr ovi de s t i m e l y a nd e x c e pt i ona l publ i c - pol i c y r e s e a r c h
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F a e b o o k . c o m / B u s i n e s s C o u n c i l B C
Tw i t t e r. c o m / B i z C o u n c i l B C
L i n k e d I n . c o m / c o m p a n y / B u s i n e s s - C o u n c i l - o f - B r i t i s h - C o l u m b i a
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