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Free trade payoff for Alberta
Gary Park For Petroleum News
In almost 20 years of free trade between Canada and the United States, exports from the province of Alberta have grown 674 percent, compared with a 166 percent increase to other non-free-trade countries, according to a report by the University of Alberta’s Western Center for Economic Research.
The report focused on Alberta’s export performance since the inception of various free trade agreements, starting with the Canada-U.S. pact in 1989, the North American Free Trade Agreement which added Mexico in 1994 and separate deals with Chile, Israel and Costa Rica.
Not surprisingly, energy has accounted for 69 percent of the growth in all of Alberta’s exports since 1993, generating revenues of C$56.5 billion in 2007.
Non-energy exports to free-trade partners rose to C$16.5 billion in 2007 from C$2.9 billion in 1988 while non-energy exports to non-free-trade countries climbed 196 percent.
Crude oil value rockets The value of crude oil shipped to the U.S. rocketed to C$28.1 billion in 2007 from C$3.1 billion in 1988, while, over the same period, natural gas and natural gas liquids increased to C$26.6 billion from C$3.2 billion.
The value of exports per employee in Alberta currently stands at C$42,344 against the Canada-wide average of C$26,707. In 1988, the Alberta and national averages were both about C$10,900.
Over the study period, Alberta’s share of all Canadian exports has grown to 18.4 percent from 9.6 percent.
The importance of NAFTA to Alberta and the resource-based economies of Western Canada (including British Columbia, Saskatchewan and Manitoba) has grown steadily over the past two decades.
In 1988, 52.4 percent of all exports from the region were destined for the U.S. and Mexico. By 2007 that figure had grown to 76.6 percent, periodically topping 80 percent when the Canadian dollar was at its weakest point against the U.S. currency.
Exports of resource-related machinery and parts have made strong gains to almost C$250 million last year from C$16 million in 1995.
Although energy has been the engine of Alberta’s growth, non-energy sales to NAFTA partners has climbed by 468 percent over the past 20 years, with machinery, plastics and organic chemicals all playing a part.
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