Our friends at the CFIB give New Brunswick a ‘F’ for barriers to internal trade despite our best efforts to buy more from other provinces than we sell to them. Between 2016 and 2021, the most recent year we have good, detailed data, interprovincial imports to New Brunswick increased by $2.6 billion while interprovincial exports increased by only $1.4 billion. Shouldn’t we get a ‘A’ for effort?
New Brunswick’s interprovincial trade deficit is not the worst in the country. NL, PE, NS and SK all import a lot more than they export. And for most it is getting worse.
A deeper look at New Brunswick and you will find the issue is mostly related to services. In fact, because of lumber, blueberries, potatoes, etc. we have a trade surplus in goods. But in services, we are importing more and more from other provinces and exports are down.
Thank the good Lord for ‘call centres’. Without business support services and office administrative services, the interprovincial services trade deficit would be much worse. People from other provinces only spend 63 cents on university tuition in NB for every dollar NBers spend going to university elsewhere. For almost every professional service from management consulting to engineering and legal services we are importing hundreds of millions of dollars worth of these services and exporting relatively little.
Even on the goods side, we are reverting somewhat to commodities. We used to have a strong surplus in wood cabinets and countertops. Not anymore. Remember this is interprovincial trade -not cheap imports from China.
We used to have a much larger trade surplus in trucking services.
The one bright spot is telecommunications. Go figure. For every dollar of imports we export $2.20. Is that Xplornet? Other?
I am a fan of free trade. If company x in Halifax can provide better public relations services or management consulting services or economic development services in New Brunswick, in general, I am ok with that.
But I think freer interprovincial trade should force provincial governments and industry groups to sharpen their pencils and look to build the value proposition for export industries where there is an existing or potential competitive advantage.
Because a widening interprovincial trade deficit might lead to more efficiencies nationally and might lead to lower costs/better services in New Brunswick but it could also weaken the economy and tax base of the province. Then, as I have said before, it could lead to J.D. Vance.
The North Star here should be strong provincial economies based on the assets and attributes of each province supported by the right tax, regulatory, infrastructure and talent pipeline policies. The free trade of goods and services between provinces would be ‘two-way’ leading to greater outcomes across the entire network.
But if freer trade just leads to far more imports of beer, wine, engineering services, legal services, IT services, accounting services, management consulting services, language translation services, construction services, etc. and less exports - I’m not sure that will be good for national unity. Further, it would likely exacerbate the need for even more federal transfers (not just equalization, think EI and OAS) - or the big successful provinces bullying the smaller, weaker ones.
Not an outcome that we should desire.
NB universities have lost market share of NB-sourced students and of Canada-sourced students over the long run. Nice to see these trade balance figures as another corroborating data point.
Why? Seems to me like we didn't expand offering in our core strengths. We were over-weight on fields that turned out not to be popular (e.g. most liberal arts fields) and likely because we didn't react to this by reinvesting in those fields that were proving popular (probably in part because the losses were creating tightness, but also because universities aren't set up to redeploy resources too readily.)
I've always thought that universities should publish more statistics about the student usage of their offerings (course and program level). We need mechanisms like this to counterbalance the inherent conservatism of university governance/structure. Maybe funding within universities to its' programs should be a little more constrained to the most productive units (which would also encourage more accurate pricing). Not saying 100%, but help departments make the connection to revenue enough and maybe they become more proactive.