The “deeper, more prolonged and farther reaching” impacts of the oil shock have pushed TD Economics to downgrade its quarterly forecast for Canada’s provincial economies.
But a “rip-roaring” housing market and inter-provincial migration from oil-producing provinces are poised to make B.C. and Ontario the economic leaders among the province’s this year, according to a report released Tuesday (January 26).
TD forecasts B.C. will have real GDP growth of 2.5% in 2016, while Ontario’s real GDP will grow 2.2%.
Both provinces are the only ones projected to have growth above 2% this year.
The economies in oil-producing Alberta and Newfoundland and Labrador are expected to shrink 0.3% and 1%, respectively. Saskatchewan is expecting growth of just 0.9%.
“The current woes in Alberta represent both a curse and a blessing for the B.C. and Ontario economies,” the report said.
“Cross-border goods and services trade flows are significant, so when Alberta’s economy struggles, supplier industries in both provinces feel the pinch. However, B.C. and Ontario (and notably the former) are poised to benefit over the next few years from increased provincial in-migration of workers, which will provide support to their retail, housing and employment markets.”
The report also pointed to “rip-roaring growth” in B.C.’s and Ontario’s housing markets.
In December 2015, provincial home price growth was at 11.3% year-over year in B.C. In Ontario, it was at 7.7%.
“Not surprisingly then, B.C. has continued to enjoy the edge in several other household based indicators, including retail sales and overall job creation, both of which had a record year in 2015.”
