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