Against the backdrop of a rapidly contracting economy that saw GDP drop by 5.4% quarter over quarter at annual rates, Canada’s population increased by 0.26% in Q1 2009, its strongest first quarter growth rate since 2001.

Indeed, compared to the first quarter of 2008, Canada’s population has increased by 1.23%, its fastest year-over-year rate of growth since first-quarter 1993.

Across the country, Alberta is standing head and shoulders above the rest of the provinces in terms of population growth, having grown 0.6% in the first quarter. This was almost twice as fast as its second- and third-ranked neighbours, British Columbia (+0.35%) and Saskatchewan (+0.32%).

Despite the sharp increase in Alberta’s unemployment rate from 4.2% to 5.8%, the province attracted over 7,000 migrants from other provinces and 4,200 from outside Canada. As a result, net migration was 60% higher than a year earlier.

Fourth place in terms of population growth belongs to Manitoba, which grew by 0.28% in the first-quarter, primarily on account of a 2,489-person increase in international migration.

As has been the case for the past year, Ontario’s population growth has lagged behind the national average. This is due to a steady net outflow of migrants to other provinces that started in mid-2003.

Moreover, while the province still attracts the largest proportion of new immigrants (42%), its share of total international immigration has trended steadily lower from its near term high of 63.6% achieved in second-quarter 2002.

It appears that Québec’s “baby boom,” which started in 2005, continued to account for most of that province’s population growth in the first quarter. Having said that, the “belle province” continued to attract a large number of international immigrants (8,600), which more than offset a net outflow (2,000) of its residents to other provinces.

Looking forward, the impact of strong population growth over the past year should help to underpin economic growth through the second half of 2009 and into 2010. It should also help to alleviate labour shortages over the longer term, particularly in construction.

First-quarter 2009 Population Growth: Canada and the Provinces

Data source: Statistics Canada/Chart: Reed Construction Data – CanaData.