SERVICES, TRADE, AND REGIONAL STRUCTURAL CHANGE IN CANADA 1974 - 1984

Interest in the extent to which services are traded interregionally and internationally, as well as the role of services as a basic industry, has heightened over the past decade. Analysis of these questions has been hampered, however, by the fact that conventional data sources such as income and product accounts or employment records do not identify transactions between sectors or patterns of trade on a commodity basis. This study uses a series of commodity-by-industry input-output models for the Canadian provinces which do permit an analysis of interregional and international trade on a commodity basis. We are also able to identify the importance of commodity exports on a direct-plus-embodied basis as well as the more conventional direct basis. Our analysis indicates that service exports to the Rest of the World was the fastest growing demand category between 1974 and 1984, followed by exports to Other Provinces. We also conclude that the conventional method of identifying exports, on a direct basis only, understates the amount of services exported as well as the contribution of services to the regional growth process.