Alberta’s economy is expected to grow by a spectacular 6.6% in 2006, and high energy prices mean that the torrid pace is unlikely to subside any time soon, according to the Conference Board of Canada’s Provincial Outlook – Summer 2006.

“Among Canadian provinces, Alberta is in a league of its own,” said Marie-Christine Bernard, associate director, Provincial Outlook. “With oil prices expected to remain high over the next five years, Alberta’s boom is not just a temporary phenomenon. It is a more permanent structural change, which is acting as a magnet for workers from other provinces.”

Alberta can expect another strong year in 2007, with real gross domestic product forecast to grow by 4%. The province’s tight labour market, however, is a concern. Despite rapid population growth, labour shortages are affecting key industries and runaway construction costs could delay capital projects.

Other Western Canadian provinces will also post strong economic growth. Manitoba is experiencing a construction boom, which will boost real GDP growth to 3.7%, third among provinces in 2006 behind Alberta and Newfoundland and Labrador.

High prices for British Columbia’s natural resources are creating spin-off benefits throughout the province’s construction and services sectors, leading to real GDP growth of 3.6% in 2006. Weak results in the mining sector, however, will limit Saskatchewan’s real GDP growth to 2.5% this year.

In Central and Atlantic Canada, the manufacturing sector has not yet completed its adjustment to the strong dollar, and several provinces are dealing with recent plant or mill closures. Consumer spending will remain strong in both Ontario and Quebec, but sluggish export growth will limit real GDP growth in 2006 to 2.5% and 2.1%, respectively.

Thanks to strong mining output at Voisey’s Bay and White Rose, the economy of Newfoundland and Labrador is expected grow by 4.6% in both 2006 and 2007. But this rate of growth will not be sustained beyond 2007, as strong short-term performance is masking a weak underlying economy. The province is suffering from a declining population, high unemployment and weak consumer spending.

Consumers in Nova Scotia are bolstering the provincial economy in 2006, with real GDP growth of 2.7% expected this year. New Brunswick is expected to rebound from last year’s weak growth of 0.5%. Thanks to rebounding industrial production and a stronger service industry, the province’s economy will expand by 2.2% this year. Prince Edward Island’s economy is expected to grow by 2.1%, due to strong construction activity and modest gains in primary industries such as agriculture and fisheries.