GRAPH: Natural Resource Exports Help Canadians “Pay the Bills” for Our Imports

Regarding international trade, Canada's abundant natural resources play a critical role in maintaining our economic balance. While Canadians regularly import consumer goods, technology, and manufactured products from around the world, our natural resource exports - from oil and natural gas to minerals and metals to food and timber - help offset these costs.

Think of it as our national trade "piggy bank," where resource exports generate the cash earnings that allow us to purchase imported goods and services - machinery, vehicles, computers, etc. - contributing to our high living standard.

Canadians often forget that natural resource exports also support the value of our dollar. Many economists consider the Loonie a ‘commodity dollar’ due to our country’s high reliance on resource exports. Recently, falling CAD value combined with a weak economy is hurting the average Canadian, sending food prices skyrocketing and making us all poorer.

This graph below, originally created by Richard Dias with IceCap Asset Management, shows how natural resources “pay the bills” for Canadians.

Graph Highlights:

• Natural resource sectors are highlighted in red, while other industries are in blue.
• Anything to the right of zero means that the respective sector, categorized on the left Y-axis, exported more goods by value over the prior 12 months than imported, meaning Canadians made money on those exports.
• Anything to the left of zero is the goods and services that Canadians paid for to import.
• Canada exported $139.8 billion in energy products
• Canada exported $40.4 billion in mining products
• We exported $27.4 billion in agricultural products
• Again, $16.7 billion in forestry and paper products
• In total, Canada exported $224.3 billion in natural resources and an additional $8.5 billion in other unrelated sectors
• In total, Canada imported $237.4 billion of goods and services in other sectors, such as consumer goods, electronics, machinery, and chemicals and plastics.

Natural Resources Form the Bedrock of Canada’s Trade

The graphs above make it abundantly clear that our natural resource exports help “pay the bills” for our imports.

Natural resources accounted for nearly 50% of our nation’s total merchandise exports in 2023, up from 58% the year before, valued at $422 billion. These are no small numbers.

Another stat for you. Canada's cumulative trade deficit has been $130 billion over the past decade. If it weren’t for the energy sector (mainly oil and natural gas), our country’s trade deficit would have been about $1 trillion ^[1].

It is without a doubt that the energy sector plays a critical role in paying Canada’s bills, and to a lesser extent, so do the other resource industries.

Supporting Natural Resources = A Stronger Economy

The weak dollar means many of the things we buy, like imported fruits & vegetables during the winter, are going to go up in price

Just as we were recovering from rampant inflation driving up prices, now we get the weaker Canadian dollar driving up priceshttps://t.co/M4RhtbgCbP

— Canada Action (@CanadaAction) November 17, 2024

Canada's vast natural resources have historically been, and continue to be, the bedrock of our economic prosperity. From the early days of fur trading to today's modern energy, mining, forestry, and agriculture industries, they have provided a strong foundation for Canada's economic development and international trade relationships.

Resources play a critical role in maintaining healthy trade balances, paying for our imports while supporting the value of the Canadian dollar ^[2]. They also play an irreplaceable role in the economy, accounting for 21% of the national GDP and 15% of total employment in 2023 ^[3] while generating tens of billions of dollars in tax revenues that fund essential public services like healthcare, education, and infrastructure development.

Supporting these invaluable industries is crucial for several reasons.

First, they provide economic stability and prosperity for many Canadian communities, particularly in rural and remote areas where resource development is often the primary economic driver.

Second, global demand for natural resources continues to grow, especially in developing economies, presenting ongoing opportunities for Canadian exports.

Finally, Canada's resource industries operate under one of the world’s most transparent and regulated regimes, meaning support for domestic production often results in better global outcomes than shifting production to jurisdictions with lower standards.

Join Us Today!

As long as the world needs oil, natural gas, wood, food, minerals, energy products, and metals, they should be produced by Canada – supporting Canadian families through a stronger economy and creating a more prosperous future for our children.

Join us today to learn more about the positive impacts natural resources have on the economy and why it's time we work together for a brighter economic future.

Do we really want to make Canadians poorer?

"Is there any rational reason for Canada to voluntarily cede the economic benefits of meeting this global (#OilAndGas) demand to other jurisdictions?" #CdnPoli https://t.co/BQnUNb6bAq

— Oil Sands Action (@OilsandsAction) November 16, 2024

SOURCES:

_{1 - https://static1.squarespace.com/static/63dbf842797d5000eb7ede22/t/65f5ce48389daf7bdff08689/1710607949270/Fragile+Growth+Report+-+For+web.pdf}

_{2 - https://www.oanda.com/us-en/trade-tap-blog/trading-knowledge/canadian-dollar-key-drivers-cad/}

_{3 - https://chamber.ca/news/investing-in-natural-resources-sector-a-solution-to-canadas-productivity-problem-report-says/}