Saskatchewan, Manitoba, Prince Edward Island and New Brunswick are the only four Canadian provinces set to experience growth this year, according to the Conference Board of Canada’s most recent provincial outlook.

“No province is immune to the effects of the global recession, but the momentum in the domestic economies of Saskatchewan and Manitoba will cushion the blow from the downturn in the resource sector,” said Pedro Antunes, director of national and provincial forecast with the Conference Board.

The outlook for the second half of the year is more optimistic for all provinces, Antunes added. “All provinces are expected to bounce back in 2010, as the U.S. economy hits bottom and begins to recover.”

Saskatchewan is set to post the strongest growth among the provinces, at 1.6%. In the short-term, the province’s mining sector will feel the collapse in commodity prices, but strong potash prices and infrastructure spending will bolster construction activity.

In addition, labour markets will expand and provincial income tax cuts will keep retail sales growing at a healthy pace this year.

Manitoba is also in a good position to ride out the global recession, according to the Conference Board. Large public and private capital projects, a resilient labour market and personal income tax cuts will lift Manitoba’s economic growth by a projected 1% in 2009.

Prince Edward Island’s real GDP is expected to grow by 0.6% in 2009, and stronger growth is forecast next year, as the province gears up for the massive development of wind power energy on the Island.

In New Brunswick, a significant provincial fiscal stimulus package that includes $100 million in tax cuts and $1.2 billion in infrastructure spending over the next two years will help the province expand by 0.2% in 2009.

Alberta is facing its first contraction since 1986, as energy companies slash capital investment in the oil and gas industries. Between sliding output in manufacturing, construction, and mining, the Conference Board expects Alberta’s economy to decline by 0.5% this year.

British Columbia’s trade-dependent sectors such as forestry, manufacturing and mining are being hit hard by the economic downturn. In addition, Olympics-related infrastructure projects are beginning to wind up, hampering the domestic economy. Real GDP is expected to decline by 0.1% this year, but an improved global outlook and the Olympics will help B.C. join Alberta in leading the recovery in 2010, the forecast says.

The Ontario economy is expected to contract by 1.2% this year, as the malaise in the manufacturing industry spreads quickly to other sectors of the province’s economy. Ontario faces the weakest consumer spending outlook of all provinces for 2009.

Quebec’s overall real GDP will fall by 0.4% in 2009 and 33,000 jobs will be lost, according to the Conference Board. It notes that the Quebec aerospace industry is beginning to feel the effects of the global downturn and consumers are becoming more cautious.

With industrial production and the job market faltering, Nova Scotia’s overall economic growth is projected to fall by 0.3% in 2009.

Newfoundland and Labrador is set to be the worst-performing province this year, with a 2.6% drop in real GDP. This is despite a positive outlook for consumer spending and the construction sector. The forecast notes that oil production continues to fall off at mature sites and the closure of the newsprint mill in Grand Falls will hurt manufacturing output.

IE