The Canadian Press graphic
OTTAWA — The commodities boom is driving uneven economic growth across Canada, with resource-rich provinces like Newfoundland and Labrador, Saskatchewan and Alberta benefiting the most, the Conference Board of Canada said Wednesday.
“With agricultural, energy and mineral prices heating up, provinces that have these” will enjoy the biggest boost, said Marie-Christine Bernard, associate director of provincial outlook for the board.
“As a result, economic growth will be much stronger in parts of Atlantic Canada and in the Prairie provinces than in Central and Eastern Canada,” Bernard said.
Newfoundland and Labrador is expected to generate the largest growth at 4.6 per cent in real gross domestic product this year.
The conference board study noted that high energy and metal prices are prompting resource companies to invest billions in iron ore projects, nickel processing and offshore oil developments in that province.
Prince Edward Island's economy will expand by 3.3 per cent this year, due in large part to a second consecutive year of strong demand for wind power.
In 2011, Nova Scotia will generate real GDP growth of two per cent and New Brunswick's economy is forecast to expand by just 1.5 per cent, with both provincial governments reigning in public spending to improve their fiscal positions.
Out West, real GDP in Saskatchewan is forecast to grow by 4.2 per cent both this year and next, helped by demand for potash and energy. By the end of 2012, Saskatchewan's unemployment rate could fall to 4.6 per cent, the lowest in the country.
Oil sands investment will drive real GDP growth of 3.1 per cent in Alberta this year, helping job creation and consumer spending, while Manitoba's real GDP growth is forecast to accelerate to 2.4 per cent in 2011.
Unlike the rest of the West, British Columbia's economy is in a lull. The 2010 Winter Olympics and stimulus spending drove real GDP growth of more than four per cent last year, but in 2011 the economy is forecast to expand by just two per cent, the study said.
B.C.'s forestry sector is also waiting for a recovery in the U.S. housing market, the study said.
While Ontario's auto sector has been helped by a recovery in vehicle sales in the United States, it faces supply-chain disruptions due to the Japanese earthquake with vehicle assembly at Toyota and Honda plants being held back in the second quarter.
Real GDP growth in Ontario is forecast to be 2.1 per cent this year. But Ontario's domestic economy will benefit from strong income growth and the creation of more than 125,000 jobs this year, the study said.
The conference board also said Quebec can expect slow economic growth over the next two years with real GDP forecast to increase by just 1.8 per cent in 2011.