Over the next five years, a steep decline in forestry export values can be expected, while energy exports can be expected to increase as much as 30 per cent, the study forecasts.
In 2022, B.C.'s international exports hit $83 billion – a $19 billion gain over a five-year period from 2017 to 2022.
Going forward, the export value of B.C.’s forestry sector could shrink by $3.9 billion – 29 per cent -- over the next five years, while the energy sector, notably LNG exports, is expected to account for up to 30 per cent of the growth in international exports over the next five years, adding at least $11.8 billion in value.
“LNG is going to be so huge,” said Ken Peacock, BCBC’s chief economist and co-author of the report, The Foundations of Provincial Prosperity. “Energy provides such a big lift.”
“The significance of the B.C. energy sector is inescapable,” the report notes. “Energy exports have risen by billions and are poised to rise by billions more when LNG production begins later in the decade. The energy sector is set to provide by far the biggest lift to B.C.’s exports in the 2020s.”
Tourism values virtually vanished during pandemic.
The study takes a deep dive on B.C.’s economy, analyzing how much each sector is worth to the provincial economy in terms of export values. It illustrates just how diversified B.C.’s economy has become, but also underscores just how important legacy resources industries still are to the B.C. economy.
“The intent is to provide a sense for policymakers that resources are still 45 per cent of the base,” Peacock said. “It’s important to grow the emerging (sectors), but let’s also pay attention to what we currently export and grow those. Do not forget what our existing strengths are.”
The resources sectors accounted for 60 per cent of the total increase in exports between 2017 and 2022, adding $11.6 billion in value.
“This finding belies the often heard claim that natural resources are not a growth sector for an advanced economy jurisdiction like B.C. or Canada,” the report states.
“The energy sector stands out, owing to its massive $7 billion export gain. Record-high prices turbocharged exports of both coal and natural gas.
“Note that strong advances in electricity, oil, biofuels, natural gas pipeline transportation services, and oil pipeline services also factored into the remarkable surge in provincial energy exports. Collectively, these latter industries rival the export revenues of the coal industry or the natural gas industry, underscoring the importance of energy-related transportation services and other smaller elements of the broad energy sector.”
Report forecasts declines in forestry export values and increase in energy.
Services account for 45 per cent of B.C. international exports, which is “a notably higher proportion than in other provinces.
“This mainly reflects B.C.’s larger transportation services, film and TV, tourism and education export sectors.”
Services include tourism, education, professional services, film and TV and “gateway” industries (ports, railways, shipping, etc.)