April 23, 2007
B.C. Exports

R. Lee: Today I rise to speak about an important and growing part of our economy, and that is B.C. exports and trade with our Asia-Pacific partners.

British Columbia is a trading province. First, let's look at our export numbers. Our total international exports, valued at $25.7 billion in 1996, increased to $31.7 billion in 2001 and $33.3 billion in 2006, according to B.C. Stats.

Our largest export market is still the United States. However, exports to the U.S. remain flat at $22.1 billion in 2001 and $20.4 billion in 2006. Our second-largest export market is Japan. However, exports to Japan have declined substantially, from $6.4 billion in 1996 to $4.1 billion in 2001, and only recovered to $4.7 billion in 2006.

Our third export market is China now. Exports to China increased slightly from $508 million in 1996 to $727 million in 2001 and jumped to $1.5 billion in 2006. Our other important markets are South Korea, Taiwan, Germany, the United Kingdom, India, Hong Kong, Mexico and Australia.

Overall, B.C. exports to the Pacific Rim, including Japan, have steadily increased from $6.6 billion in 2001 to $9 billion in 2006, which represents an increased market share from 20.8 percent to 27.1 percent of our exports. Last year the top exports from B.C. to these regions were coal, copper ores and concentrates, lumber and pulp — mostly from the natural resource sector.

British Columbia has an unprecedented opportunity to reap enormous benefits from Asia's current economic transformation. The Asia-Pacific Initiative is the province's long-term strategy to diversify B.C.'s economic ties with the Asia-Pacific. B.C. is uniquely positioned to be Canada's Pacific gateway because of geography. Our major airports are closer to Asia than airports in the United States.

The Asia-Pacific Initiative identifies five priority areas that must be aggressively pursued in Asia. First,

B.C.'s Asia-Pacific identity. Second, world-class transportation and infrastructure gateway. Third, trade and investment relationships. Fourth, Asia-Pacific destination for our industry — for example, tourism, cultural exchange, and demand for business and financial services. Fifth, Pacific century skills: develop and attract a labour force that has Pacific century skills for B.C. Those are our five priority areas.

Underpinning our initiative is the ability to attract the expanding volume of trade with the Asia-Pacific. British Columbia's Pacific gateway is a national strategic asset that, properly utilized, will ensure national economic prosperity for decades. We cannot overestimate the strategic importance of our transportation assets in western Canada. Revitalizing the infrastructure of our transportation gateway is important not only to B.C.'s economy but to all of Canada.

The ports of Vancouver and Prince Rupert are also closer to Asia than anywhere on the west coast of North America. Increased trade with Asia has spurred port expansion in both Vancouver and Prince Rupert. Without a world-class port, airport, road and rail network, B.C. cannot promote itself as a Pacific gateway. B.C. and the private sector understand that in order to compete successfully on the world stage as an international gateway, B.C. requires a reliable cost-competitive supply chain.

Our initiative also stresses the need to leverage our major strength: our people and our gateway. The gateway is more than just transportation infrastructure. It's about communications, financial services, education, cultural exchanges, training projects and so much more.

The Asia-Pacific Initiative reflects a more coordinated approach to facilitating trade and investment. It demonstrates how we intend to realign our priorities and prepare British Columbia's economy for the unprecedented opportunities in Asia. Asian container trade to North America is expected to increase 300 percent over the next 15 years. Our strategic gateway location and transportation infrastructure provide a competitive edge in capturing a share.

Asia's need for abundant, reliable energy and natural resources presents expanding export opportunities for British Columbia's traditional resource industry. The urbanization in Asia is creating the demand for new infrastructure — the equivalent of building a city the size of Victoria every day for the next 20 years. This presents a tremendous opportunity for pine beetle–impacted communities and provides an alternative market for B.C.'s wood products.

Asia-Pacific is expected to remain the fastest-growing economy from 2006 to 2020. The average growth rate of Asia is projected to be 4.9 percent, compared to 2.9 percent for the U.S. and 3.5 percent for the world. In 2006 the U.S. had 61 percent of B.C.'s export market share….

Deputy Speaker: Thank you, Member.

B. Ralston: The challenges of British Columbia in the world economy as a relatively small subnational economy on the Pacific located in Canada — from the perspective of eastern Canada, at least, described by one British Columbia historian as the west beyond the west — are immense.

Traditionally, British Columbia has exported natural resources to the Pacific Rim and to the Asia-Pacific. It has only become clear with the rise of, particularly, the Chinese economy but also the emerging Indian economy that the potential for growth is huge in the Pacific and Asia-Pacific region. The challenge for British Columbia is how to capture that in a way that is beneficial not only for some parts of the economy but for all the people of British Columbia and of Canada.

The example of Japan, which has historically been one of British Columbia's largest trading partners, is instructive. In the early 1990s, 25 percent of British Columbia's exports went to Japan. With the decline in the 1990s of the Japanese economy and particularly after the collapse of the Thai currency in 1998, we saw a 24.4-percent plunge in Japanese exports from British Columbia. By 2005 Japan formed only 12.2 percent of the destination of British Columbia exports. It increased in 2006 to 14.1 percent.

The composition of our exports to Japan is again instructive — wood products, 27 percent; metallic ores and concentrates, 24 percent; coal, 18 percent; aluminum and aluminum products, 10 percent. So it's one of our strongest trading partners historically, but with the decline in the 1990s the world economy, particularly in the Asia-Pacific — and in Japan, where they endured a prolonged recession — our dependence to some degree on Japanese trade was a problem which has only become remedied lately.

The bilateral trade, particularly the volume of tourists to British Columbia, has declined over the last decade as well. So one would look to strategies in economic development that would see the increase in trade and export of services such as engineering services, financial services, education, health care and health care professionals who are adept at public health in particular. Those opportunities exist in the Asia-Pacific in a way they haven't existed in the past as the economies of the Asia-Pacific expand and diversify.

Other countries in the Asia-Pacific that have gone relatively unnoticed by British Columbia, although there are strong bilateral ties, have a great deal of potential. Particularly, South Korea, which similarly restructured with the difficulties in the 1990s globally, is a very vibrant economy, represented in Vancouver by a consul general and a trade office. Those opportunities have been relatively unexplored by the British Columbia government.

In addition, much of the discussion of Asia-Pacific trade is understandably captured by people's fascination with China. Given its population and the over 10-percent annual growth of its economy over the last few years, it's an understandable focus.

There are other opportunities which British Columbia may be uniquely fitted to serve, and with huge potential. In particular, I'm speaking of the potential of the Indian economy. The Indian economy is projected by the Department of Foreign Affairs and International Trade, the Canadian federal ministry, at an annual growth that is forecasted at 8.2 percent over the next 20 years and will make India into one of the most powerful economies in the world. Uniquely, British Columbia is represented….

Deputy Speaker: Thank you, Member.

          
R. Lee: I would like to thank the member for Surrey-Whalley for his comments. Not only China and India but also South Korea and Japan are important partners.

I would also like to mention that it's not only for hardware or port exports; it's also important to develop our human resource as well. The human dimensions with our Asia-Pacific partners can lead to more trade relationships.

The conference in Ontario addressed the human dimensions of gateway — education, tourism, arts and culture. We know that the Royal Conservatory of Music has developed a China strategy and is engaging in cultural diplomacy efforts through the Hong Kong Economic and Trade Office and the Hong Kong Trade Development Council.

The English-as-a-second-language book market presents a huge opportunity for foreign firms that can develop good contents for the Asian market. From the tourism point of view, Asian tourists are among the highest spenders in the world. Art also builds human relationships. The challenge is finding ways to integrate art, science, engineering and now our natural resources.

Ethnic diversity, awareness and tolerance give Canada a special attraction to many Asians. Surveys show that Canada's lifestyle and openness are the greatest attributes of this country in the eyes of many Asians. There is a solid foundation on which to strengthen transpacific cultural exchanges. B.C. has already recognized culture as one of the components of its ambitious Asia-Pacific initiatives. Cross-cultural learning and exchanges are vital to the development of the people-to-people contacts that underpin the Asia-Pacific gateway.

Sister cities or sister province relationships are also valuable if the ties are maintained on an ongoing basis. British Columbia has the privilege of having many ties to cities in China and Japan. Vancouver, Burnaby, Richmond, Victoria, North Vancouver, Kelowna and Campbell River all have sister cities in Japan or China.

Many of our advanced education institutes already have a strong presence in the Asia-Pacific region. B.C. also has the largest English-as-a-second-language market in Canada with approximately 100 organizations operating in Vancouver.