Region’s economy poised for boost from Canada 150

After that, board predicts sluggish growth for area

First the good news. The region’s economy is expected to put on a good show this year in keeping with the spirit of the Canada 150 celebrations.

The value of all goods and services produced in the capital this year should climb 2.3 per cent excluding inflation, putting Ottawa-Gatineau in the top tier of the country’s 13 largest cities, according to a report published Thursday by the Conference Board of Canada.

This would be a substantial improvement over last year when the region’s economy improved just 1.5 per cent. A wild card is the just-launched Quebec construction industry strike, whose duration and impact at this point are simply unknown.

The Ottawa-based research group forecasts Toronto will be the top performer this year with growth of 2.7 per cent, while Vancouver and Edmonton will each gain 2.4 per cent. The Conference Board also predicts growth of 1.9 per cent for the country as a whole.

Now the bad news. This year’s anticipated solid gain is likely to be one-year blip related to Canada 150 celebrations and building projects. The Conference Board forecasts the capital region will return to near the bottom of the pack from 2018 to 2021. The joint OttawaGatineau economy is expected to grow 1.8 per cent per year during this four-year stretch. Only Quebec City among the 13 big cities will post weaker economic numbers, the Conference Board suggests.

Nevertheless, the report’s detail makes clear we will still feel somewhat richer in the years ahead despite anemic economic growth. That’s because the region’s population is expanding at an even slower rate. The combined population of Ottawa and Gatineau last year stood at nearly 1.4 million.

The Conference Board anticipates this will expand a modest 1.5 per cent in 2017. In the years ahead, the research group expects, the population will increase little more than 1.1 per cent annually.

This means income per head will continue to rise.

The Conference Board noted in its report that much of this year’s economic surge is being driven by the federal government and its agencies.

Not only is the federal government hiring more — both directly and indirectly through its use of contractors — it is also financing a multitude of projects meant to spruce up the capital for the country’s 150th birthday celebrations. It is refurbishing Parliament Hill and the government conference centre, not to mention what it’s spending on similar improvements at the National Arts Centre, Science Museum and National Gallery.

As Ottawa and Gatineau commuters are well aware, other levels of governments are investing comparable sums in light rail transit, highway expansion and other significant infrastructure projects.

Indeed, given all the activity, the surprise is that the overall forecast doesn’t call for even stronger economic growth. Clues can be found in the report’s prediction that employment in public administration will be scaled back 2.5 per cent (down about 4,000) next year and should stay relatively flat after that. The Conference Board adds that the number of new houses being built this year — about 7,250 — will be nearly 15 per cent below the average for the previous 10 years. This, too, will increase slowly.

In short, our economy will continue to move ahead after our Canada 150 festival, just not at speeds that will keep us near the top of the pack among the nation’s biggest cities.