BMO pre­dicts steady growth for Man­i­toba’s ‘solid’ econ­omy

Winnipeg Free Press - - NEWS - MUR­RAY MCNEILL mur­ray.mcneill@freep­

OT all fore­cast­ers think the Man­i­toba econ­omy will tank next year.

Less than two weeks af­ter the Con­fer­ence Board of Canada pre­dicted the Man­i­toba econ­omy will grow by a mea­gre 0.3 per cent in 2018, the Bank of Mon­treal has is­sued a fore­cast that pre­dicts growth of more than two per cent for the prov­ince next year.

In its lat­est BMO Blue Book re­port re­leased on Mon­day, BMO Cap­i­tal Mar­kets Eco­nom­ics and BMO Com­mer­cial Bank­ing pre­dict the Man­i­toba econ­omy will fin­ish this year with real gross do­mes­tic prod­uct (GDP) growth of 2.1 per cent, fol­lowed by growth of 2.2 per cent in 2018.

It pre­dicts it will fin­ish with the fifth-strong­est growth among the prov­inces this year, and the fourth strong­est in 2018.

“I can’t re­ally com­ment on their (the Con­fer­ence Board’s) view. But for us, we just see a pretty sta­ble en­vi­ron­ment for the next year or two,” Robert Kav­cic, BMO Cap­i­tal Mar­kets’s se­nior econ­o­mist, said in an in­ter­view. “It’s con­sis­tent with what we’re see­ing for the na­tional av­er­age, and con­sis­tent with the av­er­age growth we’ve seen (in Man­i­toba) over the last five years or so.”

Kav­cic said Man­i­toba’s econ­omy is prob­a­bly the most sta­ble in the coun­try in terms of GDP growth.

“It’s solid and it’s healthy, for sure. But it’s not the kind of growth or eco­nomic mo­men­tum we’re get­ting in On­tario or Bri­tish Columbia, or even in Que­bec.”

The Con­fer­ence Board based its gloomy fore­cast on a num­ber of neg­a­tive fac­tors, in­clud­ing an an­tic­i­pated de­cline in home­build­ing and non-res­i­den­tial con­struc­tion ac­tiv­ity next year, the lat­ter be­cause two ma­jor Man­i­toba Hy­dro projects in north­ern Man­i­toba will be­gin to wind down. It also noted min­ing out­put will take a hit as two ma­jor north­ern mines reach the end of their lives.

Kav­cic agreed the wind­ing down of the Keeyask hy­dro­elec­tric gen­er­at­ing sta­tion and the Bipole III trans­mis­sion-line project will even­tu­ally im­pact the econ­omy. That’s why the bank is pre­dict­ing eco­nomic growth will slip back below two per cent in 2019.

N“But on the flip side, we have quite a bit of fed­eral fis­cal stim­u­lus too, that’s be­ing handed down pretty well across the coun­try,” he added. “So in lots of cases, that’s fill­ing the void (cre­ated by) a lot of the other pri­vate or pub­lic sec­tor projects that are wind­ing down in... the smaller economies.”

The bank re­port also notes the prov­ince’s ser­vices sec­tor re­mains sturdy and its un­em­ploy­ment rate is ex­pected to fall to 5.2 per cent in 2018. The man­u­fac­tur­ing sec­tor also has had a solid run since 2010, and should con­tinue to ben­e­fit from the lagged im­pact of a weaker Cana­dian dol­lar and still-solid U.S. de­mand, it adds.

The re­port also ranks Man­i­toba’s per­for­mance on two other fronts: its ex­po­sure to a po­ten­tial down­turn in U.S. trade and its deficit and debt re­duc­tion ef­forts.

On the trade front, the bank says Man­i­toba is less ex­posed to, and less re­liant upon, U.S. trade than some of the other prov­inces. But it has some key sec­tors that do rely quite heav­ily on the U.S. mar­ket, it adds, in­clud­ing trans­porta­tion equip­ment, medicine and agri­cul­ture.

“So I wouldn’t write it (the po­ten­tial risk) off. I think you’ve got to look at it on more of a sec­tor-by­sec­tor ba­sis,” Kav­cic said.

On the deficit and debt re­duc­tion front, he said Man­i­toba has en­joyed some solid eco­nomic growth in re­cent years, so the pro­vin­cial gov­ern­ment could be fur­ther ahead in its ef­forts to re­duce its an­nual bud­get deficit and the prov­ince’s long-term debt.

“The debt is still ris­ing year af­ter year, whereas a lot of the prov­inces at this point in the (eco­nomic) cy­cle have turned the cor­ner and started to bring their debt down, and in some cases have low­ered the tax bur­den,” he said. “The rea­son we kind of rate Man­i­toba that much lower (C+) is that they’re sim­ply not, at this point, tak­ing ad­van­tage of that (solid eco­nomic growth). It’s not a crit­i­cal fis­cal sit­u­a­tion or any­thing like that. They’re just not tak­ing ad­van­tage.”

He added the cur­rent Pro­gres­sive Con­ser­va­tive gov­ern­ment isn’t solely to blame.

“The past gov­ern­ment was equally guilty on that front.” THE prov­ince’s largest credit union — Stein­bach Credit Union (SCU) — was named the in­au­gu­ral win­ner of the Man­i­toba Cham­bers of Com­merce (MCC) Busi­ness of the Year award.

SCU, which is the first credit union in the prov­ince to sur­pass $5 bil­lion in as­sets, was among six Man­i­toba com­pa­nies or in­di­vid­u­als pre­sented with an award at a gala din­ner held Fri­day night in Win­nipeg.

“The Man­i­toba Cham­bers of Com­merce be­lieves in rec­og­niz­ing busi­ness ex­cel­lence in Man­i­toba and we were pleased to see nom­i­nees from across the prov­ince fi­nal­ists for our awards,” MCC pres­i­dent and CEO Chuck David­son said in a writ­ten state­ment is­sued on Mon­day. “The judg­ing com­mit­tee had some dif­fi­cult de­ci­sions based on the cal­i­bre and qual­ity of the busi­nesses, but we are thrilled to rec­og­nize the fol­low­ing com­pa­nies.”

SCU also won in the Out­stand­ing Large Busi­ness cat­e­gory. Other award win­ners were:

Out­stand­ing Medium Busi­ness: Norima Con­sult­ing Inc. (Win­nipeg)

Out­stand­ing Small Busi­ness: Po­lar In­dus­tries Ltd. (Spring­field)

Out­stand­ing Not-for-Profit: Siloam Mis­sion (Win­nipeg)

Long-Term Achieve­ment: Red River Col­lege (Win­nipeg)

Lieu­tenant Gover­nor Award (In­di­vid­ual): Brian Scharf­stein, pres­i­dent of Cana­dian Footwear and the FootHealth Cen­tres.

Lieu­tenant Gover­nor Award (Busi­ness): MNP, which was founded in Bran­don in 1956 and is now one of the largest pro­fes­sional ser­vices firms in Canada. Alex Reeves.

The jew­eller who bought the bar told the CBC his gold­smith knew some­thing was wrong when he tried to put the wafer through a mill and found it was much too hard and brit­tle to be gold.

The bank said in a state­ment that most of the bul­lion it sells comes from the mint, although in some cases clients may re­quest an­other sup­plier.

The bank added it is rare for a coun­ter­feit to get into its in­ven­tory.

“Upon dis­cov­er­ing these ob­jects, we im­me­di­ately in­ves­ti­gate to de­ter­mine the source of the ob­ject and en­gage the ap­pro­pri­ate au­thor­i­ties. In all in­stances, we work closely with our clients to keep them in­formed and to reach a po­ten­tial res­o­lu­tion.”

The mat­ter has been handed to the po­lice for fur­ther in­ves­ti­ga­tion.

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