July 30, 2009, Ottawa – The Maritime
provinces and Manitoba are the only Canadian provinces that will post economic
growth this year despite the expected return to growth for Canada in the second
half of 2009, according to the Conference Board of Canada’s Provincial Outlook.
"The economies of Manitoba and the
Maritime provinces are not prone to boom-bust cycles, so they have been
sheltered from the downturn. Economic conditions deteriorated over the past few
months in other provinces, especially in Ontario and Saskatchewan," said
Marie-Christine Bernard, associate director of the provincial outlook.
"All provinces will recover slowly over the next year. Saskatchewan,
British Columbia, Alberta and Ontario are expected to post the strongest growth
in 2010."
Fuelled by new infrastructure investment
and lower income taxes, New Brunswick is expected to lead all provinces in 2009
with a 0.9 per cent increase in real gross domestic product (GDP). The recent
cancellation of a new gasoline refinery, which was announced after the
Conference Board completed its forecast, is not expected to negatively affect
New Brunswick's outlook this year, but the announcement poses a downside risk
to the province's performance in 2010.
Prince Edward Island is largely immune from
the broader global downturn in trade, and public spending will help the
island's economy to grow by 0.8 per cent in 2009. Nova Scotia will skirt
recession in 2009. Real GDP is forecast to advance by 0.3 per cent this year,
thanks to increased government spending and non-residential investment, notably
the $700 million Deep Panuke offshore natural gas project.
A construction boom that began four years
ago in Manitoba will remain a pillar of strength, leading to growth of 0.8 per
cent this year. The province's mining and manufacturing sectors are, however,
feeling the effects of the downturn.
Central Canada's trade sector remains mired
in recession, but the weakness is located mainly in the auto, primary metal and
forestry industries. Quebec's exports will decline for the second straight
year. The province's job market, however, has held up compared to other
provinces, and consumer spending is expected to show small growth this year.
Real GDP is forecast to fall by 0.9 per cent in 2009.
The Ontario economy is not out of the woods
yet, but there are signs that a floor is forming. Real GDP is expected to fall
by 3.1 per cent this year. A gradual recovery is expected in the last half of
2009, with consumer demand, private investment and housing demand expected to
rebound next year.
After a stellar performance in 2008,
Saskatchewan's economy is forecast to decline by 2.7 per cent in 2009 – a
significant downward revision from growth of 0.2 per cent in the Spring 2009
outlook. The major reasons for the decline are a massive reduction in potash
extraction levels, combined with drought-like conditions in certain parts of
the province. Despite the downturn in the primary sector, most other sectors
are performing well and are continuing to add to payroll – Saskatchewan's
unemployment rate is still the lowest among all the provinces. Next year, a
rebound in the primary sector is expected to support real GDP growth of 3.5 per
cent, the strongest performance of any province.
Alberta and British Columbia have been on
downward trends since early 2008, but there are signs that the worst is over in
both provinces. In 2009, B.C.'s economy is expected to post its largest
contraction in 27 years – a decline of 2.5 per cent. But real GDP is forecast
to grow by 3.4 per cent next year, thanks to a comeback in energy and
residential construction, combined with a modest recovery in forestry and
manufacturing and the stimulus effects of the 2010 Olympic Winter Games.
After falling 0.2 per cent in 2008,
Alberta's economy will contract another 2.7 per cent this year. But the
province's struggles will be short-lived, as growth of 3.3 per cent is forecast
in 2010. Higher energy prices and lower construction costs should spur oil and
gas activity, which will support a rebound in the domestic economy.
Newfoundland and Labrador faces more job
losses and deeper production cuts than any other province, leading to a steep
3.4 per cent decline in real GDP this year. Oil and gas production is expected
to fall by 18 per cent this year, and manufacturing output is also forecast to
decline by almost 10 per cent. Newfoundland and Labrador will also experience
the slowest recovery of all the provinces in 2010.
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