Economic growth remains on an uneven footing across the country, according to a new report from CIBC World Markets. Western provinces are faring well, while Central Canada is suffering from the one-two punch of high oil prices and a strong Canadian dollar.

“The national economy was limping badly come the end of 2004, and the sheer economic weight of Central Canada indicates it was participating in that slowdown,” says CIBC World Markets senior economist Warren Lovely. “But that obscures sturdy growth in the West.”

According to CIBC WM energy prices and the Canadian dollar, both of which are trading at elevated levels, help explain 2005’s mismatched provincial forecast.

In the West, capital outlays on oil and gas projects continue to soar, with a 12% advance on tap for this year. Fully 75% of those investment dollars will be spent in Alberta, where work is increasingly focused on vast, non- conventional reserves. CIBC WM says neighboring provinces will enjoy brisk energy sector activity as well.

As for Ontario and Quebec, CIBC WM notes the two provinces are net importers of oil and gas. As well, the main customer for their manufactured goods, the United States, is the world’s largest energy consumer.

CIBC WM also observes that the two provinces are absorbing the brunt of the Canadian dollar’s earlier surge.

As for the other provinces, CIBC WM says a rejuvenated interest in nuclear power bodes well for Saskatchewan’s uranium industry , while encouraging expanded hydro-electric generating capacity elsewhere. Last year’s bull market for metals and minerals has spurred mining activity across the country, although Canada will face cooler global industrial demand ahead.

Having locked up royalties accruing from future offshore energy production in a deal with Ottawa,

Newfoundland & Labrador and Nova Scotia are on a firmer fiscal footing having arranged with Ottawa to accrue royalties for future offshore energy production.