One of the most surprising features of the global recession is the degree to which it has afflicted major markets throughout the world at the same time.

That same phenomenon is emerging within Canada: it looks like all the provinces are likely to suffer their first-ever simultaneous downturn this year. At the same time, however, all are poised for a synchronized rebound in the year ahead.

No matter what the national growth rate is, the underlying provincial results are often very different. It may be that a handful of provinces are booming while the rest are stagnant or slumping. For instance, the resources cycle dominates certain regions; agricultural prices are critical to others; while manufacturing and financials are the vital factors in other provinces.

So, it is conceivable that certain provinces could hope for a narrow escape from the global downturn that has spread further and deeper than most analysts expected. Indeed, some economists are still forecasting the possibility that at least one province will manage to post positive growth this year.

Bank of Montreal, for example, is calling for Saskatchewan to avoid negative gross domestic product growth this year — barely, at just 0.2% growth. This compares with a forecast for a national 2.4% downturn, led by a 3.5% contraction in Ontario. Canadian Imperial Bank of Commerce also sees Saskatchewan faring best this year but posting zero growth, whereas Toronto-Dominion Bank predicts that every province will suffer a GDP contraction this year, with Manitoba holding up best, slumping by just 0.5%.

Royal Bank of Canada agrees that Manitoba will lead the pack, but foresees the province eking out a 0.1% gain for the year.

The TD forecast notes that if its forecast turns out to be correct, it will be the first time on record that every province has been sucked into a simultaneous downturn. In previous recessions, the report says, there was always a region bucking the trend: in the recession of the early 1980s, the Atlantic provinces all managed to post positive growth; in the recession of the early 1990s, it was the West that resisted the downturn.

But the global economy has changed a great deal since then, according to the TD forecast: “The world, including within Canada, was nowhere near as integrated as it is these days. Moreover, few if any markets are as tightly and deeply integrated globally as are financial markets. Because of [the] origins in the U.S. and worldwide financial crisis, the ensuing recession was bound to have this globally synchronized imprint all over it.”

The flip side of this unprecedented, synchronized downturn is expected to be a co-ordinated rebound in 2010. “Like the recession, next year’s recovery is expected to be widespread,” offers a research report by RBC’s economics department.

RBC predicts that all 10 provinces will return to growth in 2010, led by at least 3% growth throughout Western Canada (highlighted by a 3.6% jump in Saskatchewan).

CIBC foresees a more muted recovery, also led by the Western provinces (topped by 2.5% growth in British Columbia). BMO expects the West to lead the way, too.

“Our forecast of stronger performance in the western part of the country in 2010 will reflect, in large measure, the rebound in commodities and related increase in spending on major capital projects,” the RBC report explains, adding that B.C.’s economy is also likely to receive a boost from hosting the Olympic and Paralympic Games next year.

TD has a slightly different view. It predicts that the provinces that were hardest hit this year — Ontario and Newfoundland and Labrador — are likely to lead the way out of the recession: “There is reason to expect that those with the most ground lost will rebound more sharply next year. Simple as it sounds, the natural state of economies is to grow. When held down by extraneous forces, they tend to bounce back in proportion to the forces that initially held them back.”

That said, the TD report concedes that some of the damage may not be easily undone in certain sectors: “A multi-year restructuring process in the automobile assembly and parts industry and the forestry, pulp and paper industries are major roadblocks that we think will hinder the overall recovery of provincial economies with a significant footprint in these sectors.”

@page_break@Moreover, the TD report notes, global and U.S. growth probably won’t recover quickly, and so, neither will any of the provinces; and the trajectory of the dollar will also have a significant impact.

Ultimately, TD also expects the West to lead the way, but not until 2011. This acute recession may result in the first-ever comprehensive provincial decline; the good news is that it should be followed by a unanimous recovery as well. IE