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December 07, 2020VALUE ADDED IN EXPORTS, 2017 Statistics Canada has updated its estimates of value added and employment embodied in Canadian exports.
Value-added represents the contribution of labour and capital to the production process. Its components are labour income, gross operating surplus (or profits and depreciation) and taxes net of subsidies on production. The sum of value-added by all industries plus taxes net of subsidies on products is equal to GDP.
Exports only generate income (GDP) within Nova Scotia when value is added to either the domestically-produced or imported outputs. However, exports are typically reported on a gross basis, including the cost of imported inputs. Statistics Canada’s supply and use tables allow for the calculation of the proportion of exports that represent value added, and therefore, income generated within the provincial economy.
Statistics Canada's estimates calculate a value added amount within each sector that generates the exports. Statistics Canada further estimates the amount of value added created by upstream sectors within a province that supply an exporting sector. Statistics Canada also estimates the number of jobs associated with exports - both within exporting sectors and upstream sectors that supply them.
These estimates allow examination of the relative significance of trade for each province and sector. As the data are constructed using supply and use tables, there is a considerable lag in their production and they have only been updated to 2017 (along with revisions to prior years).
Overall, Nova Scotia's economy generates the least amount of exports (scaled to total employment in all industries) at $14,698 per worker. This value is up 6% from 2016.
Resource-producing provinces still have the largest export values per worker, and these values have recovered from 2015 and 2016 on a partial recovery in oil prices in 2017. Outside of provinces whose export values are sensitive to oil prices, exports per worker grew faster in British Columbia (9.0%), Nova Scotia (6.0%) and Quebec (5.3%).
Of the total value added in the economy, Nova Scotia relies the least on exports to generate value added, with 10.0% of GDP accounted for by value added in exports (either directly or in upstream industries within the province). Saskatchewan generated the largest portion of its provincial value added from exports at 28.7%. The share of provincial value added created from exports sectors was similar for Alberta, Newfoundland and Labrador and Ontario. New Brunswick and Nova Scotia reported the least share of GDP accounted for by value added in exports.
Despite its relatively low export intensity, the amount of value added measured as a share of total exports in Nova Scotia (42.0%) is comparable to the national average (41.1%). Counting the value added in exports created upstream of the exporting sector, 58.6% of Nova Scotia's exports represent value added that generates income within the province. New Brunswick's value added share of exports is notably low because of the large value of imported content in its petroleum refining sector.
Nova Scotia's employment is comparatively less dependent on international exports as only 7.3% of jobs are attributable directly to exports. Including upstream jobs embodied in exports, Nova Scotia's share of employment connected to exports is 10.0%. The national average share of employment from exports is 15.5%. The highest share is in Ontario at 17.2% while the lowest is in Newfoundland and Labrador at 9.3%.
The amount of export value added per worker (directly within exporting industries) is $84,404 for Nova Scotia, well below the national average of $143,286. The national average of value added per worker (within industry) is inflated by oil-producing provinces where export values are high relative to low employment within the oil and gas industries.
Including upstream value added to exports and upstream employment, Nova Scotia's export value added per worker is slightly higher at $85,668 per worker. However, export value added per worker in oil provinces is considerably lower after including upstream workers.
Calculating the number of workers required to generate $1 million in exports offers another perspective on the relationship between exports and employment. Nova Scotia's exports are the most labour intensive in the country requiring 6.8 jobs to generate $1 million in exports.
The value added in exports data also provides the most detailed information on the value of exports from all industries, including services. Of the total value of $6.72 billion in exports from Nova Scotia in 2017, the largest values were from manufacturing, notably rubber products ($1,042.6 million), seafood products ($845.6 million, not including unprocessed) and fishing/aquaculture products ($693.4 million). Forest products ($538.3 million), transportation services ($534.8 million), wholesale ($360.1 million), aerospace products ($315.1 million) and accommodation/food services ($308.3 million) contributed the next largest exports.
From its exports, Nova Scotia generated $3.94 billion in added value, including the exporting industry as well as upstream industries within the province. The chart below illustrates the amount of value added generated within each exporting industry as well as the value added generated in upstream industries.
Statistics Canada estimates that in 2017 33,463 jobs were directly attributable to exports from all industries. Including upstream industries, 45,966 jobs in Nova Scotia depended on exports. Seafood processing exports generated 5,723 jobs in 2017 - divided fairly evenly between jobs in the industry itself and upstream industries. The next largest contributions of exports to employment were reported in accommodation/food, transportation/warehousing, rubber products manufacturing, wholesale trade, fishing/aquaculture and forest products.
Measured in percentage terms (by either value added or employment), Nova Scotia's most export-intensive industries in 2017 were largely in manufacturing: rubber products, electronics, seafood processing, textiles, forest products and aerospace. Fishing/aquaculture also reported higher export shares of value added and employment. Other manufacturing sectors including ship/boat, metals, non-metallic, and other food manufacturing generate less value-added from international exports. Among services, export value-added share are highest in private education, transportation/warehouse, wholesale and business support.
Statistics Canada's value added in exports also provides data on imports by sector as well, allowing the assessment of a trade balance by industry. Nova Scotia's imports are heavily concentrated in manufactured products, notably: automotive, electronics, chemical/pharmaceutical, machinery, metals, food and refined petroleum. With relatively little production in these industries (except food), Nova Scotia has a substantial trade deficit in these products, with imports in excess of exports. Nova Scotia's products and services with trade surplus include: agriculture, fishing/aquaculture, seafood processing, forest products, rubber products, wholesale trade, transportation/warehousing, and university education.
Statistics Canada: Table 12-10-0100-01 Value added in exports, by industry, provincial and territorial
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