Canada in 2007: Marginally slower but regionally balanced growth
John Clinkard
According to the recently released Provincial Economic Accounts, growth in Canada was regionally more balanced in 2007 than it was in 2006.
This observation is based on the fact that, during 2007, growth increased in both Central Canada and Atlantic Canada while it slowed in Western Canada.
In the East, growth in Newfoundland and Labrador accelerated from 3.3% to 9.1% in 2007, due to increased oil and gas extraction and strong world commodity prices. This was the province’s strongest showing since 2002.
While weaker shipments of forestry and related manufactured goods caused growth to slow from 3.0% to 1.6% in New Brunswick, stronger natural gas production and a rebound in forestry output strengthened growth in Nova Scotia.
Despite facing the headwind brought on by a rapid increase in the Canadian dollar versus the U.S. dollar, in 2007 Ontario grew by 2.1%.
However the growth rate of GDP for the Central Canada region as a whole increased from 1.9% to 2.3%, due to the strength of the Québec economy. Growth in Québec accelerated from 1.7% to 2.4% in 2007. A healthy 6.5% increase in business investment and a strong mining sector more than offset the province’s weakness in forestry and wood products.
In Western Canada, growth in Alberta slowed from 6.6% to 3.3%. This figure marks a four-year low for the province, largely due to weaker growth of oil and gas exploration.
However, both residential and non-residential investment in Alberta continued to expand, driven by sustained strong growth of net migration to the province.
tish Columbia showed solid growth in 2007, thanks to sustained growth of consumer spending and residential/non-residential construction. British Columbia’s economy grew by 3.2% in 2007, just slightly slower than the 3.3% recorded in 2006.
Saskatchewan grew by 2.8% in 2007, after shrinking by 0.4% in 2006. Increased demand for potash, agricultural products and uranium was behind the improvement.
Manitoba, solid 7.4% growth of labour incomes supported strong new house construction and consumer spending. Ongoing work on several large projects underpinned non-residential construction activity during the year.
