by David Paddon
British Columbia is on track to lead Canada's other provinces in economic growth in 2016 and 2017, according to a report released Thursday by BMO Financial Group.
It estimates BC's economy will grow by three per cent this year – more than twice the national growth of 1.2 %.
But BMO says neighboring Alberta is in a recession, with its economy expected to shrink by another 2.3 % this year – following a decline of 4% in 2015.
The banking group says the downturn in Alberta's energy sector has spilled into other parts of the economy, and the provincial unemployment rate is above 8% for the first time since the early 1990s.
“The fallout from lower oil prices has Alberta's economy still grappling with recession,” BMO senior economist Robert Kavcic writes in the 26-page report from the Canadian banking group.
“By next year, the economy should return to growth, but remain historically subdued at just above 2%, assuming a gradual upward grind in oil prices.”
Newfoundland and Labrador is also expected to see its economy shrink this year – by 2% – but Saskatchewan will eke out a small gain of half a per cent following last year's decline.
The report says Ontario, Manitoba and Quebec are expected to have growth above the national average while the three Maritime provinces will come in below the average.
“Ontario's economy is one of Canada's growth leaders, expected to outperform the national average for a third straight year in 2016. This is a noteworthy change after a decade of under-performance through 2013,” Kavic writes.
Ontario's real gross domestic product is estimated to grow at 2.6 % this year and 2.3 % in 2017, trailing only British Columbia in both years.
BC's economy is expected to grow a more subdued 2.5 % in 2017 – above BMO's estimate of national growth of 2.0 % next year.
None of the provincial economies is projected shrink next year, with Alberta matching Ontario with growth of 2.3 % and Newfoundland and Labrador eking out a 0.7 % increase in its real GDP.
‘Better-than-advertised’ manufacturing exports not lifting GDP
RBC predicts post-wildfires snapback for Canada