New Brunswick exports up as softwood lumber, NAFTA talks loom
Provincial exports were up 10 per cent this year, with a further growth of 5 per cent expected in 2018
New Brunswick exports appear to be surging after a poor performance last year, says an economist with the Canadian export credit agency.
Peter Hall, Export Development Canada's chief economist, said 2016 was not a good year for many provinces.
"We had a terrible year in 2016," said Hall.
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"So energy-intensive provinces like New Brunswick sustained some very big drops in activity."
Luckily, that activity hasn't carried over into this year. Exports in the province have grown 10 per cent over last year and are forecast to grow an additional five per cent in 2018.
New Brunswick even beat national averages, which are eight percent for 2017 and forecast to be four per cent next year.
Oil and fish
A large chunk of the province's positive export growth is due to increased exports leaving the Irving Oil Ltd. refinery in Saint John.
The country as a whole saw energy exports increase by 31 per cent.
More traditional Maritime exports have also seen growth this year.
"Fishing has actually been doing remarkably well, particularly in the latter part of the year," Hall said.
"We're feeling pretty good about that."
Mixed softwood lumber bag
Hall said the discussion over increased softwood lumber duties comes after the industry has had a decade of sub-par performance.
"The drop in U.S. housing demand after the great recession was cataclysmic and really affected the province quite substantially," he said.
The industry is in a better position to weather the duty storm now, he said. U.S. housing starts are up, for both good and bad reasons.
"We don't want to capitalize on misfortune, but the storms that have ravaged the south of the U.S. are really boosting demand as well," said Hall.
"At the same time these duties are being imposed, prices have soared."
Hall said the softwood lumber industry has another reason to be bullish, Canada's international track record.
"Let's face it, every time we go to the softwood lumber battle Canada wins," said Hall.
"We either come to terms with the Americans and say, 'ok, this is the way we're going to play the game,' or the international courts, or judgement bodies, side on Canada's side."
One decision that would be detrimental to New Brunswick's exports would be the U.S. abandoning NAFTA.
The province sends 90 per cent of its exports south of the border, and Hall said markets in Europe and Asia aren't enough to soften the blow that the killing of NAFTA would cause.
Hall said the U.S. government can't be pressured by the negative impacts on Canada, but there will still be consequences in the U.S.
We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?—@realDonaldTrump
"Millions of jobs are actually affected by their exports to Mexico, their exports to Canada," said Hall.
"Prices would rise in the United States for the average consumer, retailers would have to pass that on."
Hall said NAFTA is still beneficial to the U.S., but the political climate in that country makes stating that fact difficult.
"Really, America benefits from this deal as well, and that's just not obvious in the rancour, and the tweets and the public statements that are being made," said Hall.
With files from Information Morning Moncton