Ontario Construction News staff writer
The Conference Board of Canada says the Prairie provinces will likely be the top economic performers this year, even as the Bank of Canada’s inflation-fighting measures quell the country’s overall economic output.
In a new report looking at factors that will drive Canada’s provincial economies between 2022 and 2024, the not-for-profit think tank says Saskatchewan will lead the country with real growth of 7.6 per cent this year and Alberta will see a 4.9 per cent gain.
It says the oil and gas sector will propel the Saskatchewan and Alberta economies through 2024.
“Continuing high inflation will likely cause households to tighten their purse strings in the latter part of 2022, with spending habits tapering once consumers have exercised their repressed travel urges,” said Ted Mallet, director of economic forecasting at The Conference Board of Canada.
“While there is the possibility of a recession, our view is that a ‘growth plateau’ is a better description of the economy slowing in response to the Bank of Canada’s inflation battle, before picking up again in 2023.”
Although it’s the country’s largest provincial economy, Ontario is feeling the impact of high inflation and rising interest rates. There is, however, reason for optimism as investments from governments and businesses continue to be made in the province, which will help boost the economy during the slowdown.
The province’s economy is slated to grow 3.9 per cent in 2022, 1.7 per cent in 2023 and 2.2 per cent in 2024.
A drought in Saskatchewan pulled down GDP in the region last year, but a major recovery is expected for 2022. The Conference Board of Canada projects real GDP to reach 7.6 per cent this year, driven by increases in the commodity sector, and 4.1 per cent growth in 2023. Growth will slow in 2024 but remain high at 2.4 per cent.
Similar to Saskatchewan, the commodity price increase is having a positive impact on Alberta overall. GDP in the province is projected to reach 4.9 per cent in 2022, 3.5 per cent in 2023 and 2.4 per cent in 2024. Employment has remained strong in the province in recent months, as jobs expanded 0.1 per cent while contracting nationally.
Spearheaded by significant increases in agriculture and manufacturing, the goods-producing sectors and steady growth on the service side will see Manitoba’s GDP grow by 4.2 per cent in 2022. This will be followed by another good year of 2.9 per cent growth in 2023 and 1.9 per cent in 2024.
The report also says Newfoundland and Labrador will see stronger economic growth when offline oil production restarts in 2023.
An aging population could hold back growth for Quebec, the report adds, while a reversal in the remote work trend will limit gains in Atlantic Canada as some workers move away, particularly in Nova Scotia and New Brunswick.
The report says a pickup in the manufacturing, hospitality and recreation sectors will likely provide an economic boost in Ontario and British Columbia.