On Monday, the premiers of Alberta and Ontario signed two memorandums of understanding on interprovincial trade and infrastructure development. The two provinces are home to over 21 million people combined, representing 51% of Canada’s population. Despite being geographically separated, the two economies are more closely integrated than you may think. With this in mind, we thought it would be useful to take a quick look at the level of trade between the two provinces.

Ironically, because of a lack of customs duties and procedures at provincial/territorial borders it is harder to track internal trade than international trade. As a result, although we know the value of international goods moving in and out of Canada and the provinces each month, the latest figures for trade between specific provinces are for 2021.*

The numbers reveal that Ontario is Alberta’s largest customer within Canada and Alberta is Ontario’s second largest customer after Quebec.

Alberta exported about $26.7 billion worth of goods and services to Ontario in 2021 while Ontario sent $35.7 billion to Alberta for total two-way trade of $62.4 billion.

In percentage terms, this works out to 33% of Alberta’s total internal exports and 22% of Ontario’s.

Admittedly, these amounts are small compared to each province’s international exports with Alberta’s sales to Ontario equivalent to 18% of its international exports and Ontario’s sales to Alberta equal to 11% of its international shipments. With that said, the trade between the two provinces is significant and efforts to make it more efficient by removing barriers to trade and improving transportation infrastructure would pay economic growth dividends.

In terms of what Ontario and Alberta trade with each other, 77% of Ontario’s exports to Alberta in 2021 were services compared to 41% of Alberta’s exports to Ontario.

The range of specific goods and services is broad, but financial and insurance services stand out as a key export from Ontario to Alberta at 23% of the total. For Alberta’s exports to Ontario, the largest category is “mineral fuels” (oil, natural gas, natural gas liquids and coal) at 33% of total sales in 2021.

*The total value of interprovincial exports by province is available from Statistics Canada up to 2023, but this does not include the amount one province trades with another or what products and services are involved.

Answer to the previous trivia question: With more than 13,800 km of active pipe, Enbridge’s Mainline pipeline network has the capacity to transport 3 million barrels a day of oil from Alberta to the U.S. Midwest and Eastern Canada.

Today’s trivia question: Which province has the largest area?