Fiscal Austerity in Ontario and Slump in Alberta’s Energy Sector Clouding Provincial Outlook
The Conference Board of Canada Report: Provincial Outlook, Spring 2019
Ottawa, May 28, 2019 – According to the newest provincial outlook from The Conference Board of Canada, with Alberta facing a mild recession, investment in the province’s oil sector will be low as concerns about Canada’s carbon tax and a lack of pipeline capacity will likely drive many investors south to the United States. Another blow to Western Canada’s economy is China’s sudden refusal to accept shipments of Canadian canola and, more recently, other agricultural products, such as pork and other crops. Economic growth will be modest in Ontario and the three Prairie provinces this year.
“While the outlook is generally sound for most provinces, there are challenges and risks. A slump in oil sector investment and fiscal austerity in Ontario are expected to be part of the economic landscape for some time to come while elevated household debt levels and moderate household income growth are weighing on consumer spending across the country.” Said Marie-Christine Bernard, Director of Provincial Forecast, The Conference Board of Canada.
The Provincial Outlook, Spring 2019 report at a glance:
- With optimism in the oil sector low, Alberta is facing a mild recession.
- Economic growth will weaken in Ontario, Manitoba, Saskatchewan and Alberta.
- China’s move to block imports of Canadian canola, peas and soybeans, as well as pork from some Quebec producers, will hurt the agriculture sector across the country.
- The outlook for Ontario has been dampened by fiscal austerity in the most recent provincial budget.
- Quebec’s economic prospects, however, remain sound.
- Trade tensions between Canada and China continue to mount, and that’s a major risk to the trade outlook, as British Columbia’s exports rely more on China’s market than do exports from any other Canadian province.
- Benefiting from strong net international migration, the tides are turning in New Brunswick, Nova Scotia and Prince Edward Island. The region will buck the national trend and see stronger economic growth in 2019.
- Canada’s real GDP growth will slip to just 1.4 per cent in 2019 but is expected to rise back up to 2 per cent in 2020.
Media availability for Marie-Christine Bernard and Chief Economist Pedro Antunes.
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