Vaccines and a Recovery in Energy, Tourism, and Exports Boost Provincial Economic Activity: Provincial Outlook—March 2021
The Conference Board of Canada, 23 pages,
March 10, 2021
This quarterly economic forecast provides highlights of the Provincial Outlook report, which presents the short-term outlook for Canada's provinces.
- The decline in economic activity in Atlantic Canada last year was lessened somewhat by the region’s ability to limit the spread of COVID-19. This helped P.E.I., for example, to emerge from the pandemic in better economic shape than Central Canada even though it is heavily dependent on the hard-hit tourism sector.
- Saskatchewan and Alberta recorded large declines in real GDP last year due to a combination of a poor response to the virus (especially in Alberta) and the devastation in the energy industry caused by the collapse in global demand for oil.
- Every province will record a sharp rebound in real GDP growth this year as the rollout of vaccines leads to a gradual lifting of provincial restrictions on economic activity and travel. The recovery will also receive a boost from pent-up demand and the fact that millions of Canadians who managed to keep their jobs ramped up their savings.
- The provinces that recorded the smallest declines in economic activity last year will have weaker recoveries in 2021. Conversely, Alberta will enjoy the largest increase in real GDP in 2021 as its plunge of 7.7 per cent in economic activity last year sets the stage for a stronger rebound.
- In addition to the gradual reopening of their economies, the recovery in Alberta and Saskatchewan will receive a boost from the sharp increase in world oil prices, thanks to rising demand, production cuts in the United States, and supply restrictions by OPEC.
- Adoption of telework and other technologies have helped high wage service industries limit the impact of the pandemic in Ontario and Quebec. GM’s recent decision to ramp up investment in Ontario’s auto sector over the near term will help the recovery there.
- B.C.’s economic rebound will benefit from a return to some state of normality in the province’s key tourism industry, which recorded a sharp drop in activity last year due to restrictions on international and domestic travel.
Table of Contents
Newfoundland and Labrador
Prince Edward Island
Appendix A: Methodology