Subdued Growth Across Canada in 2024

Ottawa, March 20, 2024 — With inflation easing, The Bank of Canada is expected to begin rate cuts mid-year, however, until then, high interest rates will continue to dampen consumer and business spending across the provinces, according to new research from The Conference Board of Canada. Canada’s real GDP growth is forecast to be just 0.6 per cent in 2024, followed by a stronger 2.3 per cent in 2025.

“Expansion plans within the business sector have stalled, evident by weak growth in investment spending and a cessation in private sector hiring,” stated Ted Mallett, Director, Economic Forecasting at The Conference Board of Canada. “Amid these conditions, recent employment gains have relied heavily on public sector hiring. However, what’s more concerning about Canada’s labour market is the collapse of the bottom end of the job market, which saw net zero employment gains in the 15-24 age group over the past year.”

Following two years of economic contraction, and despite muted employment gains this year, Newfoundland and Labrador will finally see some real output growth. The Terra Nova offshore oil platform is back online, and the fishing industry is set to rebound from its slowdown in 2023. The province’s GDP is forecast to rise by 1.5 per cent in 2024 and a further 1.1 per cent in 2025.

Prince Edward Island’s net interprovincial migration gains are declining, as islanders move out at historically high rates. However, unlike many other provinces, the influx of young people from international migration is enough to maintain P.E.I.’s labour force participation rate. The province’s economy is anticipated to increase by 1.2 per cent in 2024 and 2.1 per cent in 2025. 

This year brings signs of a partial recovery for Saskatchewan’s resource sectors. The anticipated rise in global demand for potash will help stabilize prices and improve production volumes. Meanwhile, the arrival of snow in January and February offered farms some relief following recent drought conditions. Saskatchewan’s economy is forecast to grow by 1.1 per cent in 2024 and an additional 2.7 per cent in 2025.

High migration levels continue to boost Alberta’s economy, with the robust population growth facilitating strong job gains. However, amid the economic slowdown, some employers may encounter challenges in fully integrating this labour influx into the workforce, resulting in an increase in unemployment. Alberta’s economy will expand by 1.0 per cent in 2024 before increasing a further 2.8 per cent in 2025.

Housing starts in British Columbia are expected to drop 15.0 per cent this year, a particularly concerning figure given that the province’s housing market is already the most expensive in Canada. With the supply of new homes continuing to decline, affordability challenges will persist. B.C.’s tourism outlook is strong, with indications of a full recovery from the pandemic. The province’s economy is forecast to grow by 0.8 per cent in 2024 and 2.3 per cent in 2025.

Ontario’s net international migration remains strong, fueling the province’s robust population growth and driving enough demand to avoid a steep economic downturn. However, growth in Ontario’s finance and real estate sectors will slow, and manufacturing output will shrink. The province’s GDP growth is anticipated to be a modest 0.6 per cent in 2024, followed by 2.3 per cent in 2025.

While consumer finances in Nova Scotia are being buoyed by the province’s wage growth, most sectors will experience slower output growth this year, with some key industries expected to contract. In addition to weaker activity in wholesale and retail trade, the goods-producing sectors will be vulnerable due to lower global and domestic demand for goods. Nova Scotia’s GDP is expected to rise by just 0.5 per cent in 2024 before bouncing back to 2.0 per cent growth in 2025.

Manitoba’s agricultural sector has taken a hit due to the rising frequency of drought. Still, with the CentrePort Canada rail park project supporting international trade and the manufacturing sector, the province’s economy is poised for upcoming success. Manitoba’s economic growth is forecast to slow to 0.3 per cent in 2024 but will rise by 2.7 per cent in 2025. 

For the third consecutive year, private investment in Quebec is expected to decrease, largely due to reduced activity in residential construction caused by high borrowing costs. However, with demand for aluminum and aerospace exports projected to grow, opportunities exist for the province to fortify its position in the electric vehicle and critical minerals supply chain. Quebec’s GDP growth is expected to be just 0.3 per cent in 2024 but will rise by 1.7 per cent in 2025.

Over the coming years, activity in New Brunswick’s construction sector will slow, due to the completion of several large-scale projects and an absence of any major new projects on the horizon. New Brunswick’s economy is forecast to expand a mere 0.2 per cent in 2024 before rebounding to 1.7 per growth cent in 2025.