Exports, primarily in natural resources, are how we pay for needed imports: economist Patricia Mohr
By Don Hauka
When it comes to the bottom line on pipelines, Patricia Mohr says the figures speak for themselves.
"When you see the trade numbers you'll see it's obvious that we have to make sure that we have adequate infrastructure and pipeline capability for our oil industry -- it's self-evident," said Mohr, a noted economist and commodity markets specialist.
"It's quite important to ensure the industry has sufficient pipeline capability to continue to grow exports."
Mohr will be speaking at the Resource Works Advisory Council meeting on March 16 in Vancouver. Her presentation will focus on the critical need to build more pipelines in Canada -- particularly to the west coast -- and the rally in commodity prices which promises good news for the British Columbia economy.
Mohr said she'll make the case for why it's crucial for the recently-approved Kinder Morgan Trans Mountain Pipeline Expansion Project and other pipeline expansions to proceed. It's a pretty simple equation: the better the job Canada does getting its energy resources to market, the better the price Canadians will get for them. That's especially true of crude oil.
"Crude oil exports remain the biggest trade category yielding a positive trade surplus," said Mohr. "If you look at exports less imports, crude oil remains by far the biggest trade contributor to Canada's merchandise trade and there's just nothing else that even comes close."
That surplus helps to offset deficits in other areas like consumer goods, electronics and auto parts. And by increasing pipeline capacity, Canadian producers would have access to more markets.
"If we had a much greater capability to export overseas, particularly to Asia Pacific, we would likely get a much higher price for our crude oil that we currently do into the American market," she said.
"The reason for this is there'd be more international competition for the crude, including for heavier crude."
Mohr said it's important for the public to remember that, as a trading nation, Canada owes its standard of living and the good wages that pay for consumer goods to its positive exports in sectors like oil and gas.
"In order to pay for all of these imports, we've got to have some exports which yield positive results for us and the biggest one by far is crude oil, followed by metals and minerals, then forest products, then agriculture and agrifood," she said. "We've got some huge deficits in other parts of our trade."
Mohr will also be speaking about a subject close to her heart -- a turnaround in overall commodity prices that's a good for the B.C. economy in general and the mining sector in particular.
"This rally will come as a real relief to particularly junior mining companies in the Vancouver area who really had quite a difficult time in recent years accessing capital," Mohr said.
"The junior mining companies were just barely surviving even a year ago, but the sentiment has picked up. I love mining and I'm quite a passionate observer of it and it remains a very important industry all across Canada and in Vancouver.
Mohr was Vice-President, Economics and commodity market specialist at the Scotiabank Group until retiring from that post in 2016. She is currently a director of the Greater Vancouver Board of Trade.