HALIFAX—Canada’s services sector is expected to play an increasingly important role in the growth of the country’s exports, a deputy governor of the Bank of Canada says.
“Canada’s resource sector is shrinking in economic importance as investment and employment shift toward the non-resource sector,” deputy governor Lawrence Schembri says in the text of a speech prepared for delivery in Halifax.
An advance copy of the speech was released in Ottawa.
The central bank’s estimates suggest commodity exports could fall from 50 per cent of the total in 2014 to roughly 40 per cent of total exports by 2020.
However, Schembri sees significant prospects for increased exports by the services sector.
“In particular, firms in the information technology service sector, which sells business solutions, software and entertainment services, are benefiting from strong foreign demand,” Schembri said.
He noted the service sector has been rising since 2000 while the share of manufactured goods in Canada’s exports has fallen.
The comments on trade follow a decision by the Bank of Canada to revise its growth projections, particularly for goods exports, lower in its recent monetary policy report.
The central bank said it expected business and residential investment in the United States to grow more slowly than it projected earlier in the year.
Schembri noted that the lower loonie has helped less than expected because the currencies of competitors for U.S. market share have also fallen and in some cases more than that of the Canadian dollar.