Ties that Bind: Economic Interdependence between B.C. and Alberta

May 16, 2019
Ken Peacock

Just how linked are the B.C. and Alberta economies? More than you may realize – arguably, they are the most economically interdependent provinces in Canada.

Trade between the two provinces is significant and covers an array of products and services. Some of the more significant export categories include energy and refined petroleum, agriculture products, wood products, machinery, professional services, transportation services, and tourism-related activity. In total, the two-way trade of goods and services exceeds $30 billion annually and supports tens of thousands of jobs in both provinces.

The depth of the trading relationship is further underscored by the fact B.C. merchandise exports to Alberta exceed what we export to China, our second largest international export market. In Alberta’s case, the value of goods exported to B.C. is greater than all of its exports to Asia. B.C. receives much of the transportation fuel necessary to support our personal and commercial vehicles, transit buses, trucks and other vehicles used in business operations from Alberta. In fact, refined petroleum products is Alberta’s largest single export to B.C. Energy is also significant for trade in the other direction, with natural gas being B.C.’s largest export product sold to Alberta.

Alberta depends on B.C.’s Gateway infrastructure to ship its products to Asian and global markets and also to obtain the vast array of goods imported to the province. Nearly all Alberta goods destined for Asian markets are shipped through British Columbian ports. These transportation linkages enabled Alberta to export more than $5 billion in goods to China, $2 billion to Japan, and another ~$1 billion to other Asian countries in 2018. In turn, British Columbia benefits from the resulting income and jobs created by two-way trade.

The movement of people between the two provinces is substantial and also speaks to the high degree of integration. Labour is mobile between B.C. and Alberta. Workers in one province often fill jobs in the other when skill and talent shortages arise and labour market conditions differ across the two provinces. There is more interprovincial migration between B.C. and Alberta than any other two provinces.

The economies of B.C. and Alberta are highly integrated. The volume of trading activity, the functioning of labour markets, and interprovincial migration flows suggest B.C. and Alberta share the closest economic ties of any two provinces.

It should not be overlooked that B.C. and Alberta pioneered the elimination of internal trade barriers by signing the Trade, Investment and Labour Mobility Agreement (TILMA), which was subsequently expanded to include Saskatchewan and Manitoba and become the New West Partnership Agreement.

Policy-makers in both provinces would be wise to recognize and fully support the strong and long-standing economic relationship that has helped fuel prosperity in the west.


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