Newfoundland and Labrador will lead all Canadian provinces in economic growth in 2007 with an expansion of 5%, according to the Conference Board’s Provincial Outlook – Winter 2007.

“The economy in Newfoundland and Labrador is being fuelled in 2007 by increased mineral output. Voisey’s Bay mine and the Terra Nova offshore oil field are now operational, and oil output from White Rose should increase this year,” said Marie-Christine Bernard, associate director, Provincial Outlook, in a news release. “However, dwindling oil production in 2008 means that economic growth will all but dry up next year.’

“Along with Newfoundland and Labrador, Western Canada will continue to outperform the rest of the country in 2007, but the tide will turn in favour of Central Canada next year.”

Alberta’s economy will continue its impressive growth. After posting growth in real gross domestic product (GDP) of 6.3% last year, Alberta is forecast to grow by more than 4% in each of the next two years. Strong global demand will keep oil prices high, which has spin-off effects throughout province’s economy.

British Columbia is expected to grow by more than 3% each in 2007 and 2008, thanks to major construction projects and a stronger outlook for some commodities.

Manitoba is forecast to achieve real GDP growth of 2.9% in 2007. The construction, mining and services sectors are all expected to perform well. In Saskatchewan, a rebound in the province’s mining and agriculture sectors will allow economic growth to rise to 2.7% in 2007.

With the exception of Prince Edward Island-where a downturn in the construction industry is limiting real GDP growth to 1.7% in 2007-the outlook for the Atlantic provinces is brighter this year. Major capital projects in New Brunswick will lead to real GDP growth of 2.7% this year. Mining output in Nova Scotia is expected to post double-digit gains, thanks to the Sable offshore energy project and new production by Acadian Gold Corporation, bolstering growth of 2.3% in the overall economy.

Central Canada’s manufacturing sector showed a modest improvement at the end of 2006, but it is not expected to fully recover until 2008. After-tax income is forecast to increase in Quebec because of solid wage gains and pay-equity legislation that comes into effect this year, leading to stronger retail sales. As a result, Quebec is forecast to post real GDP growth of 2.4% in 2007.

Ontario’s economy remains among the weakest in the country this year, with real GDP growth of 1.9% expected. Ontario is coping with the restructuring in the auto industry, and retail sales are modest compared to the national average.