Ottawa, March 8, 2016–Following up on its solid performance of the last two years, B.C.’s economy is expected to grow by 2.7 per cent, outpacing all other provinces in 2016, according to The Conference Board of Canada's Provincial Outlook: Winter 2016.
"British Columbia posted the strongest economic growth last year and, thanks to widespread gains, is expected to lead the provincial growth rankings over the next two years," said Marie-Christine Bernard, Associate Director, Provincial Forecast.
- B.C.'s economy will outpace all other provinces this year, posting real GDP growth of 2.7 per cent.
- The province will experience broad-based gains in 2016.
- Aside from B.C., only Ontario, Manitoba, and Nova Scotia can expect to see their economy grow by more than 2 per cent this year.
- The slump in oil prices will continue to weigh on the economies of Alberta, Saskatchewan, and Newfoundland and Labrador.
The province's goods and service industries are forecast to grow strongly in 2016. This will encourage more Canadians—particularly those in the struggling oil-producing provinces—to move to British Columbia. Solid demand for new homes will keep housing starts elevated, while the resale market is showing no signs of slowing down. This bodes well for the province's finance, insurance, and real estate industry, which is poised to post healthy gains over the next few years. The province's manufacturing and tourism sectors are expected to benefit from the low loonie.
The Conference Board's forecast includes Petronas’ $36-billion Pacific NorthWest liquefied natural gas (LNG) terminal. However, the gap between LNG prices in North America and Asia has been closing rapidly, and there is still uncertainly as to if and when construction will begin. The project adds approximately one percentage point to our real GDP forecast for 2017.
Aside from B.C., only Ontario, Manitoba, and Nova Scotia can expect to see their economy grow by more than 2 per cent this year. Ontario’s economy is well positioned to advance by an estimated 2.4 per cent this year, just behind British Columbia. The lower Canadian dollar and stronger growth in U.S. consumer demand will help boost Ontario's exports.
Healthy growth across key sectors of Manitoba’s economy, such as agriculture, construction, manufacturing, and the service sector in general, is creating a strong base for Manitoba to become one of the top-performing provinces over the next two years. Growth in Manitoba's economy is forecast to accelerate from 1.5 per cent last year to 2.3 per cent in 2016.
Nova Scotia is expected to lead the Atlantic provinces, with real GDP set to rise 2.1 per in 2016. The province's construction and manufacturing sectors performed well last year and are expected to help continue to fuel the province’s economic growth this year and next.
Quebec’s economic growth is expected to improve as federal government stimulus and stronger exports help lift economic growth to 1.7 per cent this year.
With the exception of Nova Scotia, the provincial economies of Atlantic Canada are facing more modest growth prospects this year. Prince Edward Island should see steady economic growth of 1.7 per cent this year. Despite some setbacks, New Brunswick's real GDP is expected to inch up 0.8 per cent in 2016. The slump in commodity prices continues to weigh on the outlook for Newfoundland and Labrador. After contracting by 5.4 per cent in 2015, the province's economy is expected to post no growth this year.
Saskatchewan's economy is expected to recover from last year's oil-driven recession, but growth will be very weak in 2016. Following a contraction of 2.8 per cent in 2015, Saskatchewan is expected to eke out growth of just 0.7 per cent this year.
On the heels of an estimated 2.9 per cent contraction last year, Alberta's economy is expected to shrink by a further 1.1 per cent in 2016 as the slump in oil prices continues to weigh on the province's economy.