More than 27,000 Rhode Island jobs depend on trade with Canada.
Benjamin "Barry" Hinckley III, the Republican candidate challenging Democratic U.S. Sen. Sheldon Whitehouse, recently criticized Whitehouse's vote in support of President Obama's decision to delay approval of the Keystone XL pipeline between Canada and Texas. The $7.6-billion pipeline would bring crude oil from oil sand deposits in Canada to American refineries and, supporters say, create thousands of private-sector jobs. In a March 12 news release, Hinckley said the pipeline would not cost taxpayers anything and would "strengthen economic ties with our ally Canada." "According to Hinckley, the impact is not just on Mid-Western construction jobs but also on jobs right here in Rhode Island," the news release said. "More than 27,000 Rhode Island jobs depend on trade with Canada, and Rhode Island sells more to Canada than to the state’s next six largest export markets combined." The debate over the Keystone pipeline extends from Alberta to Washington, D.C. But one question hits close to home: Does Rhode Island really have 27,000 jobs that depend on trade with Canada? We asked Hinckley what he based that statement on, and his campaign’s executive director referred us to a fact sheet from the Canadian government. The document’s first sentence states that "27,600 jobs in Rhode Island depend on Canada-U.S. trade." The document also features a photo of Governor Chafee and Patrick G. Binns, Canada’s consul general to New England, and mentions two Rhode Island businesses owned by Canadian firms: Ocean State Power, in Burrillville, owned by the TransCanada Corporation, and TD Bank, a subsidiary of the Toronto-Dominion Bank, which has four Rhode Island branches. And it states, "In 2010, bilateral trade flows worth $1.4 billion and 27,600 state jobs created by that trade helped to promote strong ties between Rhode Island and Canada. The state’s largest foreign market was Canada, which purchased about 30 percent of Rhode Island’s world-wide exports, more than the state’s next six largest foreign trading partners (Mexico, Germany, Turkey, China, Singapore and the United Kingdom) combined. The tourism account added another $36 million to local economies on both sides of the border." So, Hinckley’s news release quoted the Canadian government document almost verbatim. But we wondered where the jobs number actually came from. We contacted Hani Nasser, deputy spokesman for the Canadian Embassy in Washington, D.C., who said that every couple of years the Canadian government hires economists and trade experts to produce a study of U.S.-Canada trade. He said updated figures will come out in a few weeks, but he provided the latest study, which was published in 2010 and uses 2008 data. The 22-page study reports that total U.S. trade with Canada "generated U.S. output worth $470 billion in 2008." So what about jobs? "We estimate that 8 million net U.S. jobs, or 4.4 percent of total U.S. employment in 2008, depend on trade with Canada," the study says. What about Rhode Island jobs? A table provides a state-by-state breakdown, attributing 27,648 Rhode Island jobs to trade with Canada in 2008. "These jobs include those directly involved in export to and imports from Canada, as well as supporting jobs in states with little or no direct trade with Canada," the report says. And what is the source of those state-by-state jobs figures? "Authors’ estimates," the table says. The authors -- economists Laura M. Baughman and Joseph Francois, who head a consulting firm based in Washington, D.C. -- explain in the study that they arrived at those estimates using a model "commonly used to estimate the economy-wide and the sector-specific impact of trade policy changes." They say they analyzed what would happen if U.S. trade with Canada stopped to derive "output and employment" that exists only because of the trade. Then, they break it down state by state. We wondered whether anyone in Rhode Island had an actual count of jobs that depend on trade with Canada. "We don’t have data we would need to verify this," said Laura Hart, spokeswoman for the Rhode Island Department of Labor and Training. But she referred to Bryant University’s Chafee Center for International Business. The Chafee Center’s associate director, A. Ray Thomas, said he knew of no such tally. But he said, "Since it came from consul general of Canada, that’s certainly a credible source." And he said, "That’s the way jobs are calculated. It’s no different than how the government estimates how many jobs are created by the federal stimulus. They use formulas." The estimate does not mean that 27,000 Rhode Islanders work for Canadian companies, Thomas said. Rather, those people might be working for companies that, for example make jewelry sold in Canada or businesses that benefit from Canadian tourists, he said. He provided a table showing that Canada is, by far, the leading recipient of Rhode Island exports, followed by Germany, Mexico, Turkey and China. Our ruling Hinckley’s news release cited almost verbatim a statistic from a Canadian government fact sheet, based on a study by economists. Hinckley didn’t mention that the figure is an estimate, rather than an actual tally. But local experts say they know of no such tally and economists often make these kinds of estimates in analyzing trade and employment issues. So we rate Hinckley’s claim True.
['Canada', 'Rhode_Island']