The Barter Terms of Trade between British Columbia and Eastern Canada

Extract

A study of the trade position of the province of British Columbia shows clearly that the major part of the manufactured goods consumed in the province are imported from Eastern Canada, mainly Ontario and Quebec. At the same time the major portion of British Columbia products must be sold in outside markets. Thus British Columbia citizens are directly or indirectly dependent upon the revenue arising from British Columbia exports with which to pay for imports from Eastern Canada. It is obvious, therefore, that if British Columbia export prices fall as a consequence of declining prices on world markets, British Columbia will not be able to purchase Eastern Canadian manufactures to the same extent as formerly unless a corresponding reduction takes place in Eastern Canadian prices. Should British Columbia continue to purchase at the former rate, ultimately a financial strain would be placed on the province. Further, when British Columbia producers find their export prices declining, they must sooner or later make internal adjustments to meet reduced income. As a result, employment and other factors in economic activity will ultimately be adversely affected. Our study of British Columbia's trade position has shown very clearly a definite relation between the general economic activity of the province and world trading conditions.