Economic growth this year will be strongest in Canada's western and easternmost provinces, according to a new provincial forecast prepared by BMO Financial Group.
The boom in prices for natural resources, which is benefiting Alberta and Newfoundland in particular, is weighing on the other provinces.
Western Canada will continue to lead the Canadian economic parade in 2006, maintaining the trend of the last few years, the forecast said.
"Most of the strength found in the West, as well as in Newfoundland and Labrador, can be attributed to high resource prices," said BMO chief economist Rick Egelton.
"At the same time, these prices are creating a drag on growth in both Ontario and Quebec.
" Also weighing on Canada's export-oriented industrial heartland will be an even stronger currency, which it forecast will average 89 cents US this year, up from 82.
5 cents US in 2005, then rise to 91 cents US in 2007, before easing off to 90 cents US in 2008.
BMO is forecasting Alberta's economy will surge ahead by 5.
2 per cent, followed by a spectacular five per cent rebound in Newfoundland from last year's stagnant 0.
4 per cent.
There will also be robust economic expansions of about four per cent in British Columbia, and more than three per cent in Saskatchewan and Manitoba, it added.
Ontario and Quebec will struggle with below potential growth for the fourth consecutive year, with Ontario expanding by just 2.
7 per cent and Quebec by only 2.
2 per cent.
New Brunswick will post growth in the mid two per cent range, and the other two Maritime provinces growth of about two per cent each.
A separate forecast for Ontario's economy by the University of Toronto's Institute for Policy Analysis is even more pessimistic.
The institute predicts growth for the province of just 1.
8 per cent, and warned it will be even less if the U.
S.
economy weakens more than expected or energy prices don't ease.
Another bank dismissed recent concerns that a forecast slowdown in U.
S.
growth will drag Canada's economy with it.
Canada's economy will continue to operate nearly flat out, despite the weakness in exports, and will surpass the growth in the U.
S.
economy, National Bank of Canada said.
"It is U.
S.
recessions, not slowdowns, which cause real pain to Canada's trade," said National Bank of Canada economist Yanick Desnoyers.
"Despite an expected less favorable international trade picture, the Canadian economy as a whole should be able to produce at near full capacity, despite the U.
S.
slowdown.
" To read more articles please visit http://www.
tomwhitfield.
ca
The boom in prices for natural resources, which is benefiting Alberta and Newfoundland in particular, is weighing on the other provinces.
Western Canada will continue to lead the Canadian economic parade in 2006, maintaining the trend of the last few years, the forecast said.
"Most of the strength found in the West, as well as in Newfoundland and Labrador, can be attributed to high resource prices," said BMO chief economist Rick Egelton.
"At the same time, these prices are creating a drag on growth in both Ontario and Quebec.
" Also weighing on Canada's export-oriented industrial heartland will be an even stronger currency, which it forecast will average 89 cents US this year, up from 82.
5 cents US in 2005, then rise to 91 cents US in 2007, before easing off to 90 cents US in 2008.
BMO is forecasting Alberta's economy will surge ahead by 5.
2 per cent, followed by a spectacular five per cent rebound in Newfoundland from last year's stagnant 0.
4 per cent.
There will also be robust economic expansions of about four per cent in British Columbia, and more than three per cent in Saskatchewan and Manitoba, it added.
Ontario and Quebec will struggle with below potential growth for the fourth consecutive year, with Ontario expanding by just 2.
7 per cent and Quebec by only 2.
2 per cent.
New Brunswick will post growth in the mid two per cent range, and the other two Maritime provinces growth of about two per cent each.
A separate forecast for Ontario's economy by the University of Toronto's Institute for Policy Analysis is even more pessimistic.
The institute predicts growth for the province of just 1.
8 per cent, and warned it will be even less if the U.
S.
economy weakens more than expected or energy prices don't ease.
Another bank dismissed recent concerns that a forecast slowdown in U.
S.
growth will drag Canada's economy with it.
Canada's economy will continue to operate nearly flat out, despite the weakness in exports, and will surpass the growth in the U.
S.
economy, National Bank of Canada said.
"It is U.
S.
recessions, not slowdowns, which cause real pain to Canada's trade," said National Bank of Canada economist Yanick Desnoyers.
"Despite an expected less favorable international trade picture, the Canadian economy as a whole should be able to produce at near full capacity, despite the U.
S.
slowdown.
" To read more articles please visit http://www.
tomwhitfield.
ca
Source...