OP/ED: B.C.’s export troubles began well before the recent U.S. tariffs

The following piece, by ICBA Chief Economist Jock Finlayson and consulting economist Ken Peacock, first ran in Business in Vancouver on September 25, 2026.

Much of the current discussion about B.C. exports understandably focuses on tariffs and the evolving trade relationship with the United States. But it is worth stepping back from those immediate concerns to consider a more basic question: what does B.C. actually export to the world?

A complete picture of what the province sells to earn its way in the world must include services. They generate roughly 40 per cent of the province’s international export earnings and have become an increasingly important part of our export economy.

B.C.’s international exports can be broadly grouped into 13 clusters. The biggest, in descending order, are energy; gateway transportation; technology services; professional, finance, insurance and real estate services; mining; forestry; and tourism. Annual export earnings across these clusters range from roughly $12 billion in the energy cluster to $7.5 billion in tourism.

Of interest, four of the seven are service industries. Gateway transportation differs from other export-oriented service industries because it is closely tied to the physical movement of goods and interfaces extensively with the land base. As a result, it shares many of the infrastructure, regulatory and land-use complexities faced by the province’s resource industries.

Coal, agriculture and related products, and non-resource manufacturing make up the province’s mid-sized export clusters. Coal—overwhelmingly metallurgical coal used in steelmaking—is substantial enough to stand on its own and generates more export earnings than many other clusters. Depending on the classification system, coal can instead be grouped with either energy or mining. Regardless, coal makes an outsized contribution to B.C.’s export earnings.

Film, television, music and other copyright materials; technology manufacturing, biotech, medical equipment and aerospace; and education comprise the three smaller export clusters.

Deriving roughly 40 per cent of international export earnings from services underscores the diversity and resilience of the B.C. economy. The shift toward services has been underway for decades, supported by steady growth in gateway transportation and the rapid expansion in technology and professional services. Film and television and, until recently, international education, have also contributed.

But there is another side to the story.

The rising service share of B.C.’s exports does not simply reflect booming service exports. Since 2017, service exports have continued to expand at a pace slightly above their longer-term trend. At the same time, however, the real value of B.C.’s international goods exports has fallen by several billion dollars, or roughly eight per cent.

In other words, B.C.’s export mix has become more diversified partly because services have performed well, but also because merchandise exports have struggled.

These figures extend through 2024 and therefore predate the current Canada-U.S. tariff dispute. The largest contributor to the decline in B.C.’s real merchandise exports is softwood lumber and other forestry-related exports, which have plunged since 2017. That decline reflects a shrinking timber harvest mainly attributable to provincial policy changes, a dwindling fibre supply, rising costs and other pressures that have reduced the competitiveness of the B.C. forest sector. The real volume of mining exports was also essentially flat over that period.

This matters when assessing the changing structure of B.C.’s export economy. If merchandise exports had expanded roughly in line with their historical trend, rather than declining, the shift toward services would have been much less pronounced. Instead of today's roughly 60-40 split between goods and services, the export mix would have stayed closer to the 70-30 split that prevailed pre-2017.

B.C. unquestionably has a more service-oriented economy than in earlier decades. There is a positive aspect to that evolution. But we should be careful about interpreting the change as evidence of successful and purposeful diversification. Some of it represents the growth of new export capabilities. But some of it reflects the policy-influenced erosion of historical competitive strengths.

Recent efforts by both the provincial and federal governments to advance new mines and LNG projects could begin to rebalance the picture summarized above, lifting goods exports and restoring growth in the mining and energy clusters. The challenge is timing. Even if several large energy and mining projects soon begin to advance through the regulatory and permitting process, it will take several years before new industrial facilities are operating and generating significant export revenues. In the meantime, we expect the B.C. economy will continue to struggle.