Which sector will propel our economy?

The Canadian economy’s apparent resilience during the 2008-09 downturn — when many countries were suffering through the Great Recession — was supported by resources-rich provinces, as was growth in the years immediately following the global crisis.

Alberta, Saskatchewan, and Newfoundland and Labrador reaped many of the benefits from a hot oil market — such as strong growth in employment and wages. Central Canada and the other Atlantic provinces — traditionally the country’s manufacturing hubs — were not so lucky, an outcome that many analysts didn’t see coming and didn’t expect it to last. But it has.

Now, with the collapse of global oil prices that pushed Canada into another short-lived, recession in 2015, the economic pendulum has shifted away from the resources sector, accompanied by an initial pickup in manufacturing and exports. But will that be enough?

“Simply put, Canada’s national economy has relied on the resources-intensive provinces to propel economic growth in recent years,” says economics professor Livio Di Matteo, one of the authors of a study released Wednesday by the Fraser Institute, a Vancouverbased think-tank.

“The fall in commodity prices and the ensuing economic slowdown in Canada’s resource-intensive provinces laid bare the weaknesses of provinces such as Ontario and New Brunswick, prompting a crucial question: which provinces will propel Canada’s economic growth?”

The new Liberal government in Ottawa has committed the country to a string of annual multi-billiondollar deficits to pay for new social programs and infrastructure projects in a bid to fire up Canada’s economy, which grew at a lacklustre pace of 1.2 per cent in 2015.

The federal budget, tabled on March 22, predicted growth of 1.4 per cent this year, followed by 2.2 per cent in both 2017 and 2018.

Ben Eisen, co-author of study, believes many governments across Canada “are heading in the wrong direction” by adding to their already massive debts and uncompetitive tax rates.