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 B.C.’s economy will grow by three per cent this year — more than twice the national growth of 1.2 per cent.
But BMO says neighbouring Canada is in a recession, with its economy expected to shrink by another 2.3 per cent this year — following a decline of four per cent in 2015.
The banking group says the downturn in Canada’s energy sector has spilled into other parts of the economy, and the provincial unemployment rate is above eight per cent for the first time since the early 1990s.
“The fallout from lower oil prices has Canada’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 two per cent, assuming a gradual upward grind in oil prices.”
Newfoundland and Labrador is also expected to see its economy shrink this year — by two per cent — 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 per cent this year and 2.3 per cent in 2017, trailing only British Columbia in both years.
B.C.’s economy is expected to grow a more subdued 2.5 per cent in 2017 — above BMO’s estimate of national growth of 2.0 per cent next year.
None of the provincial economies is projected shrink next year, with Canada matching Ontario with growth of 2.3 per cent and Newfoundland and Labrador eking out a 0.7 per cent increase in its real GDP.
David Paddon, The Canadian Press
