Commodity Prices To Drive Uneven Growth Among Canadian Provinces
(CBC)--The Conference Board of Canada predicted Wednesday that a boom in commodity prices will drive uneven growth among Canadian provinces this year.
In its spring outlook for the provincial economies, the think tank concluded resource-rich provinces -- notably Newfoundland and Labrador, Saskatchewan and Alberta -- would have the strongest economic growth in Canada this year.
"With agricultural, energy and mineral prices heating up, provinces that have these resources in abundance will do well -- despite hesitation among consumers and tightening fiscal policy," said the board's Marie-Christine Bernard.
"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."
Newfoundland and Labrador would lead in growth, at 4.6 per cent, it predicted. High energy and metal prices are prompting resource companies to invest billions in iron ore projects, nickel processing and offshore oil developments.
The board expects construction output in Newfoundland and Labrador to rise by 20 per cent this year.
Growth in the potash mining and the energy sector will bolster Saskatchewan's economy, enough to spur growth of 4.2 per cent. The board projected the province's unemployment rate could fall to 4.6 per cent, the lowest in the country.
It foresees growth in Prince Edward Island of 3.3 per cent, due in large part to a second consecutive year of strong increases in wind power electricity generation.
Oil sands investment will drive growth in Alberta at a 3.1 pace, the board predicted, and a $320-million refund payment from Manitoba Public Insurance will boost personal disposable income there, helping to lift the economy by 2.4 per cent.
British Columbia's growth will be held to two per cent as the forest industry waits for a recovery in the U.S. housing market.
Supply-chain disruptions brought on by the Japanese earthquake will hold back vehicle assembly at Toyota and Honda plants in Ontario, it predicted. Still, the board forecast Ontario would create more than 125,000 jobs this year.
Fiscal restraint is expected to keep growth in Quebec, Nova Scotia and New Brunswick in a range of between 1.5 and 2.0 per cent.