Ottawa, August 24, 2022 – New research from The Conference Board of Canada forecasts Canada’s provinces to continue seeing gross domestic product (GDP) growth in 2022 through 2024, despite the overhanging risks of a recession. Saskatchewan and Alberta are projected to lead growth among the provinces.
“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.”
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.
British Columbia has a diverse economy, but global and national currents will continue to influence its course over the coming years. Commodity prices and interest rates are beyond the direct control of B.C.’s households and businesses and will have outsized influence in the province. Growth will slow over the coming quarters, but The Conference Board of Canada does not expect that it will slip negative. The province’s real GDP will grow by 2.6 per cent this year, 1.9 per cent in 2023 and 2.0 per cent in 2024.
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.
Despite seeing significant GDP growth of 1.7 per cent in the first quarter of 2022, Quebec will face growing headwinds throughout the rest of the year and is projected to grow 2.9 per cent this year and 1.2 per cent in 2023. Amid weakening consumer confidence, growth in household discretionary spending, especially on durables, is expected to slow. Meanwhile, demand for services will continue to be supported by the tailwinds of the pandemic reopening.
Newfoundland and Labrador will see the smallest expansion in Canada this year, with GDP growth of 0.5 per cent in 2022, 2.9 per cent in 2023 and 2.2 per cent in 2024. The province is benefiting from the Voisey’s Bay mine expansion and the Come By Chance refinery conversion, with both expecting to start production by the end of the year. Over the medium term, the province will see massive capital spending in its oil and gas sector.
The Conference Board of Canada forecasts Prince Edward Island’s GDP to grow 3.7 per cent in 2022, 1.7 per cent in 2023 and 1.9 per cent in 2024. Despite having the highest inflation levels in the country, the region saw employment levels hit an all-time record in June, with the biggest gains in construction and manufacturing.
Nova Scotia continues to rebound from the economic slowdown and is forecasted to see GDP growth of 3.2 per cent in 2022, 1.5 per cent in 2023 and 1.6 per cent in 2024. There is certainly reason for optimism in the province, as the Nova Scotia government announced a $5.7-billion investment in healthcare and has also continued investments in road upgrades as part of the provincial government’s Five-Year Highway Plan.
Driven by interprovincial and international migration, New Brunswick has seen its population grow at the highest rate since 1976. The provincial government is increasing the fee forestry companies pay to harvest timber on Crown lands by 30 per cent. The move comes after the price of lumber spiked in 2020 and continued to increase until May 2021, leading to record profits for forestry companies in the province. The province is projected to have GDP growth of 2.3 per cent in 2022, 1.3 per cent in 2023 and 1.4 per cent in 2024.
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