|
|
Monica Haynes
With Canada opening its border to vaccinated Americans, a new report by the Border Research Institute found that the one-and-a-half-year slowdown of goods and people across the border between Minnesota and Canada rattled the border states’ economies.
“The impacts of COVID-19 affected nearly every aspect of Minnesota’s relationship with Canada,” said Monica Haynes, director of the Bureau of Business and Economic Research.
Haynes said eight different bureaus and Universities in Canada and the U.S. collaborated on the Border Research Institute report.
In Ranier, the busiest rail port of entry in the United States, rail traffic between the two countries was severely curtailed in imports and exports. Rail cars shipped $11.7 billion imports and exports across the border in 2019. Imports from Canada accounted for 75 percent of that total ($8.7 billion).
The following year rail shipments across the International Falls port of entry fell to $8.4 billion (USD), a drop of 28 percent from the 2019 value.
Shipments via rail began lagging in April 202 compared to the previous year and didn’t reach normal until October.
Meanwhile, in 2020 the Duluth-Superior port saw approximately 30 fewer Canadian vessels than in 2019. However, the report showed a slowdown in shipments was not because of border restrictions but because of supply chain issues, shifts in consumer demands, and global demand for a change of food products.
A significant reason for the shipping decline was a drop in demand for iron ore shipped to Canada. That demand for less iron ore was because of reductions in the auto industry producing vehicles, supply chain issues, and a concern for the safety of workers.
When the borders closed, passenger vehicle traffic fell 96 percent per month in 2020 compared to 2019. Resorts and vacation homeowners were the most hurt by closing the borders.
One example cited in the report is the Northwest Angle, which is part of Minnesota but can only be reached by Canada or across Lake of the Woods. When the border closed, fishing resorts were severely impacted by the lack of tourism. As a result, hospitality and the resort industry in northern Minnesota will take some time to return to regular numbers, said Haynes.
Like many products, the cost of building supplies has gone way up. But Haynes said lumber prices are slowly falling, and a price drop is causing a slow ripple in the housing market.
But she added, during this long pandemic, supply chain issues coupled with increasing demand and a lack of supplies have led to slow recoveries in some industries. She is worried about the Delta variant and what it could do to the local economies of both countries if the border is closed again. Until such time, Haynes said the economy is recovering, albeit slowly as supply chains are built back up.
“Based on our research, it seems that most of the decline was not due to the border closure but rather the result of the overall economic downturn that the country experienced due to COVID-19,” said Haynes.
“Because the border closure did not directly impact trade and commercial transportation, our region was spared some of the worst impacts of the closure,” noted Haynes.
Leave a Reply