The Conference Board of Canada says Sask. and Alta. to lead Cdn. economic growth in the future
by CM Staff
Ontario’s economy started the year strong as public health restrictions subsided helping to propel the economy forward, however it has slowed in the second half of the year.
OTTAWA — Canadian provinces will be seeing constrained economic performance throughout the remainder of 2022 and through to 2024, although at varying rates, according to new research from The Conference Board of Canada. As highlighted in previous forecasts, Saskatchewan and Alberta are projected to lead real GDP growth among the provinces.
“Rising interest rates are applying pressure across the country, but other more specific factors are affecting provincial outlooks unevenly,” stated Ted Mallett, Director, Economic Forecasting for The Conference Board of Canada. “Although the country as a whole is in for a few quarters of effectively zero growth, prospects for the provinces vary considerably—broadly in keeping with our previous forecasts.”
Driven by a global reorganization of the potash and uranium markets, as well as significantly improved crop production compared to 2021, Saskatchewan’s real GDP growth is forecast to reach 6.8 per cent in 2022. Production of both potash and uranium in the province is expected to grow over the next few years. The Conference Board of Canada projects the province’s economy will expand an additional 3.6 per cent in 2023 and 2.6 per cent in 2024.
Alberta’s oil and gas sector had a challenging start to the year, but production rebounded significantly during the second quarter, and The Conference Board of Canada expects the industry’s output has continued to increase during the second half of the year, thanks in part to increased drilling activity. The sector is also responsible for Alberta’s fiscal turnaround this year, with the province now expecting a massive surplus thanks to higher-than-expected energy prices.
British Columbia’s housing sector stalled significantly under the weight of higher borrowing costs, with sales and prices falling significantly since the beginning of 2022.
After a challenging 2021, Manitoba’s economy is projected to grow 3.7 per cent in 2022 driven by a recovery in the agriculture sector as crop production is estimated to have fully recovered.
Prince Edward Island continues to face the highest inflation in the county, but that hasn’t impacted population growth which increased 3.5 per cent as of July 1, 2022. International migration has been a strong driver of population growth, followed by interprovincial migration.
The lifting of public health restrictions in Nova Scotia led to resurgence in tourism, which, combined with a healthy export market, have contributed to growth.
New Brunswick continues to see strong population growth from both international and interprovincial migration, which increased 2.7 per cent as of July 1, 2022.
Ontario’s economy started the year strong as public health restrictions subsided helping to propel the economy forward, however it has slowed in the second half of the year. The silver lining in the province is the historic opportunity for investments, particularly in auto manufacturing. This optimism isn’t enough to boost the economy, as real GDP growth in 2023 is forecast to be 1.1 per cent, growing to 2.9 per cent in 2024.
The combination of elevated inflation, waning consumer confidence, and higher borrowing costs is weighing down consumer spending, particularly on durable and semi-durable goods in Quebec. Spending on services is also softening, although demand for travel and recreation services has so far benefited from the tailwinds of the economic reopening.
Newfoundland and Labrador’s growth has slowed, in part due to mixed results from the oil and gas sector. Higher-than-expected oil prices are boosting government revenues, while weaker production from depleting reserves and the Terra Nova platform maintenance, will weigh on the provincial economy’s ongoing recovery from the pandemic.
