Al­berta, Saskatchewan set to lead in growth

Oil and gas sec­tor re­cov­ery will be the en­gine, says the Con­fer­ence Board of Canada

The Hamilton Spectator - - BUSINESS - THE CANA­DIAN PRESS

The Con­fer­ence Board of Canada says a slow re­cov­ery in the oil and gas sec­tor will al­low Al­berta and Saskatchewan to emerge from re­ces­sion and lead the prov­inces in eco­nomic growth this year.

In its spring pro­vin­cial out­look, the board says Al­berta will have the fastest-grow­ing econ­omy this year af­ter two years of con­trac­tions. Real GDP is fore­cast to in­crease by 3.3 per cent, thanks to the startup of a new oil­sands re­fin­ery near Ed­mon­ton and ef­forts to re­build Fort McMur­ray af­ter the 2016 wild­fire.

Saskatchewan and Bri­tish Columbia are ex­pected to tie for sec­ond place at 2.5 per cent this year, based on stronger drilling numbers and labour mar­kets in Saskatchewan and slower hous­ing and forestry sec­tors in B.C.

The board says all prov­inces will grow this year ex­cept New­found­land and Labrador, which will shrink by 3.0 per cent be­fore bounc­ing back in 2018 on new oil pro­duc­tion at the He­bron off­shore project.

On­tario is fore­cast to drop to 2.3 per cent in 2017 thanks to a slow­ing hous­ing market in the south­ern part of the prov­ince. Que­bec will ad­vance by 1.8 per cent on con­sumer spend­ing boosted by tax cuts and job cre­ation. Man­i­toba is to post 2.1 per cent growth.

Nova Sco­tia’s out­look is fore­cast to ad­vance by just 0.5 per cent this year, while New Brunswick’s GDP growth is ex­pected to hit 1.0 per cent and Prince Ed­ward Is­land is to rise to 1.8 per cent on tourism and the man­u­fac­tur­ing sec­tor.

“The dif­fi­cul­ties in the re­sources sec­tor are slowly dis­si­pat­ing and help­ing Al­berta and Saskatchewan emerge out of re­ces­sion. How­ever, the turn­around is still in its early stages and a full re­cov­ery will take time,” said MarieChris­tine Bernard, as­so­ciate di­rec­tor of the pro­vin­cial fore­cast for the board.

“Eco­nomic prospects are also im­prov­ing across the coun­try, but con­tin­ued weak­ness in busi­ness in­vest­ment — both in and out of the re­sources sec­tor — could hurt eco­nomic growth in all prov­inces down the road.”

At the Al­berta leg­is­la­ture Mon­day, Fi­nance Min­is­ter Joe Ceci called the fore­cast “good news.”

“It shows that jobs are re­turn­ing, con­fi­dence is re­turn­ing to this prov­ince (and) re­cov­ery is in process,” said Ceci.

It was a sharp con­trast to last week, when the Al­berta gov­ern­ment was hit with an­other credit down­grade. S&P Global Rat­ings re­duced Al­berta’s rat­ing two notches, from AA to A-plus.

S&P cited con­cerns with pro­vin­cial debt it ex­pects will reach $94 bil­lion by 2020.

Ceci said S&P’s rec­om­men­da­tion for tax hikes or bil­lions of dol­lars in cuts would not serve Al­ber­tans well as it digs out from fi­nan­cial prob­lems caused by low oil prices.

“I like our plan,” said Ceci. “I think Al­ber­tans like our plan.”

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