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 in 2021, but a major recovery is expected for 2022. The Conference Board of Canada projects real GDP to reach 7.6% this year, driven by increases in the commodity sector, and 4.1% growth in 2023. Growth will slow in 2024 but remain high at 2.4%.

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% in 2022, 3.5% in 2023 and 2.4% in 2024. Employment has remained strong in the province in recent months, as jobs expanded 0.1% 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% in 2022. This will be followed by another good year of 2.9% growth in 2023 and 1.9% 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% in 2022, 1.9% in 2023 and 2.0% in 2024.

Ontario is feeling the impact of high inflation and rising interest rates. However, 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% in 2022, 1.7% in 2023 and 2.2% in 2024.

Despite seeing significant GDP growth of 1.7% in the first quarter of 2022, Quebec will face growing headwinds throughout the rest of 2022 and is projected to grow 2.9% and 1.2% 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% in 2022, 2.9% in 2023 and 2.2% 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 2022. 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% in 2022, 1.7% in 2023 and 1.9% 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 and is forecasted to see GDP growth of 3.2% in 2022, 1.5% in 2023 and 1.6% 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%. The move comes after the price of lumber spiked in 2020 and continued to increase until May 2021. The province is projected to have GDP growth of 2.3% in 2022, 1.3% in 2023 and 1.4% in 2024.

The full research is available by clicking here. 

Source: Conference Board of Canada