Man. and Sask. to lead Canada in growth

Manitoba and Saskatchewan, not Alberta and British Columbia, will be the country's hottest areas economically in 2008, the Conference Board of Canada predicted on Tuesday.

The two lower-profile prairie provinces should post the highest gross domestic product growth rates in Canada this year, the Ottawa-based business think tank said.

The Conference Board released its latest economic forecast this week.

Red-hot Saskatchewan will grow at a 4.2 per cent clip, while Manitoba's economy will expand by 3.6 per cent in 2008, the Conference Board estimated. Their results are being driven by high oil and gas prices and soaring demand for those provinces' grain crops.

"Attention this year has shifted away from Alberta to Saskatchewan and Manitoba, as high prices for nearly all of their natural resources will make them the two fastest-growing economies in Canada,” said Glen Hodgson, the Conference Board of Canada's chief economist.

British Columbia's flagging forestry industry is hurting growth.(CBC)

The former kings of the Canadian economic mountain, Alberta and British Columbia, will see economic activity moderate this year, the board said.

A poor oil drilling season and labour shortages have slapped a ceiling on Alberta's growth potential. The Conference Board figured that the oil-rich region will expand its economy by 2.6 per cent in 2008.

GDP growth2008 2009British Columbia 2.2% 2.9 Alberta 2.6 3.3 Saskatchewan 4.2 2.8 Manitoba 3.6 2.7 Source: Conference Board of Canada

British Columbia is getting stung by forestry sector woes and Canada's sluggish manufacturing industries. That should lead to the western-most province growing only 2.2 per cent.

Both provinces should bounce back somewhat in 2009. The Conference Board estimates that British Columbia will grow by 2.9 per cent, while Alberta's economy will bounce even higher, at 3.3 per cent next year.

Similar to the western-most provinces, Canada's economy will expand slowly this year, by only 1.7 per cent, improving to 2.7 per cent next year.

Optimistic outlook

The Conference Board has one of the more optimistic forecasts for the Canadian economy. Its own survey of economic predictions placed the consensus at GDP growth of 1.2 per cent this year.

Nationally, the biggest millstones hobbling Canada's economy are Ontario, where the ongoing manufacturing slump is having the greatest impact, and Quebec, whose export industries have been hit by the high loonie.

Overall, the Conference Board forecast that Ontario will grow by a paltry 0.8 per cent this year before rising to the national average for economic growth in 2009.

Quebec should fare even worse in 2008, as its economy is expected to shrink by 1.4 per cent.

Further east, the economies of Nova Scotia, New Brunswick and Prince Edward Island will all post expansions in the two per cent range this year, according to the Conference Board.

Finally, Newfoundland, which grew by more than nine per cent in 2007, will barely push the economic needle into positive territory this year, with an expected growth rate of 0.2 per cent in 2008.

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