Every province in Canada has succumbed to the global economic downturn, according to new report from Scotia Economics.

“Even the previously booming resource-driven economies in Western Canada have been caught in the middle of the global economic and financial storm,” says Adrienne Warren, senior economist, Scotia Economics.

“The sharp falloff in global commodity demand and prices are leading to substantial declines in retail and housing activity, in addition to deep cutbacks in capital spending plans. In Alberta alone, over $40 billion worth of capital projects have recently been postponed or cancelled.”
The economy of British Columbia is expected to contract close to 2% this year, as slowing construction and services activity reinforce continuing retrenchment in forest products and a less buoyant resource sector.

Alberta’s economy is expected to contract 2.3% this year, as the plunge in commodity prices and sharp falloff in global demand weigh on both goods- and service-producing sectors.

Saskatchewan will likely post no growth this year, a comparatively good performance for last year’s provincial growth leader.

Manitoba is expected to experience one of the smallest economic contractions among the provinces this year, at 0.7%.



Central Canada, with its large manufacturing sector, is still expected to witness the sharpest contraction in activity. Ontario’s auto industry, which accounts for 25% of the province’s manufacturing output, has implemented deep production cuts to redress slumping global demand and bloated inventories.

Ontario’s economy is expected to contract for a second straight year in 2009, posting a decline of almost 3%.

Meanwhile, Quebec’s aerospace industry, a pillar of strength in 2008, is facing order deferrals and cancellations as the demand for business jets dries up and passenger and cargo traffic stalls.

Real output for Quebec is projected to decline 2.5% this year, as the province’s large forest products, mining and manufacturing industries all face considerable challenges.

With no industry effectively insulated, the relatively diversified economies of Eastern Canada are also expected to show modest output contractions this year.

The retrenchment underway in the manufacturing, primary and construction sectors has begun to put the squeeze on a range of professional and business service industries that had been a consistent source of employment and output growth in recent years. Weak domestic and international tourism spending will also weigh on the region’s prospects.

New Brunswick is expected to outperform the national average in 2009, but will still post negative growth of 1%.

Nova Scotia’s economy is expected to contract 1.2% this year as natural gas prices remain low, shipping volumes decrease and manufacturing slows.

Prince Edward Island is expected to witness a drop in growth of 1.4% in 2009.

After torrid growth in 2007 and early 2008, the province of Newfoundland & Labrador is expected to contract 0.5% this year.

IE