Provincial Outlook Long-Term Economic Forecast: 2012

This annual economic forecast presents the long-term provincial outlook.

Document Highlights

• This long-term outlook extends to the year 2035, by which time the majority of the baby boomers will have exited the labour market. A consistent slowing in labour force growth means that Canada’s economic growth will ease steadily over the forecast period, slowing to an annual pace of 1.9 per cent in the final five years.
• Alberta and Saskatchewan will occupy the top two spots over the long term. Steady growth in global demand for energy and other commodities (in particular potash) will continue to stimulate investment and mining output in those two provinces.
• Ontario’s near-term challenges, especially on the fiscal side, are not indicative of its long-term economic outlook. Rising international migration will benefit the province, especially the service sector.
• Over the long term, real GDP growth will average 2 per cent in British Columbia and 1.6 per cent in Prince Edward Island, as the two provinces become preferred retirement havens for baby boomers.
• The depletion of oil reserves and fewer mega energy projects will weigh heavily on Newfoundland and Labrador, mainly from 2020 on as the population starts to decline.
• Population will peak early next decade in New Brunswick, and real GDP growth will be modest over the long term. In Nova Scotia, the $25-billion contract won by Irving Shipbuilding to build 21 combat ships for the Royal Canadian Navy will help keep the provincial economy growing over the next three decades.
• Quebec’s long-term prospects are dampened by its demography. Despite a rising trend in the number of births in the last few years, the effects of an aging population will be felt much sooner in Quebec than elsewhere.
• Solid international immigration will help population growth remain above the national average in Manitoba, where real GDP growth will remain strong by historical standards.