N.L. leads way in provincial GDP growth
Nunavut and Northwest Territories both record double-digit increases
Last Updated: Monday, April 28, 2008 | 12:43 PM ET
CBC News
Mining and oil development in Newfoundland and Labrador was strong enough last year to end Alberta's three-year reign as the fastest-growing provincial economy, Statistics Canada said Monday.
Newfoundland's China-like growth of 9.1 per cent was more than triple the national average of 2.7 per cent. Its economy benefited from big surges in commodity prices and increases in oil development and mining.
"Oil extraction in the province leapt ahead, thanks to a virtually trouble-free year on its many oil platforms," Statistics Canada said in a release. "The second full year of production at the Voisey's Bay nickel mine was also a big contributor."
Growth in natural resources accounted for most of the above-average economic growth stories in the five provinces and three territories that surpassed the national growth average.
The economies of Nunavut and Northwest Territories both recorded double-digit increases on the strength of booming gold and diamond mining and exploration.
Nunavut's GDP jumped by a record 13 per cent.
"Construction work at the Meadowbank gold mine, as well as mineral exploration throughout the territory, benefited from world demand for natural resources."
Economic activity in N.W.T. surged by 13.1 per cent as construction work continued at De Beers' Snap Lake diamond mine.
Growth in Yukon rose from 2.9 per cent in 2006 to 3.8 per cent last year. Statistics Canada credits the increased growth to the opening of a new mine and increased infrastructure spending.
In Alberta, growth slowed down from 6.6 per cent in 2006 to 3.3 per cent last year as energy exploration cooled. In Saskatchewan, the provincial GDP grew by 2.8 per cent, reversing the previous year's 0.4 per cent drop. Record prices for grain, potash and uranium got much of the credit for the turnaround.
Growth in central Canada was below the national average as export-oriented manufacturing was hurt by the high Canadian dollar. Ontario's GDP rose by a modest 2.1 per cent last year — the same as last year — as goods production fell but the service sector grew.
"Manufacturers curtailed output for the third consecutive year, partly because of weaker U.S. demand for automotive and wood products," Statistics Canada said.
Quebec's GDP rose by 2.4 per cent in 2007, improving from the 1.7 per cent notched in 2006, as labour income surged 5.8 per cent thanks to a big pay equity settlement for provincial public servants.
Above-average GDP figures were recorded in both British Columbia (3.3 per cent) and Manitoba (3.1 per cent). Big increases in consumer spending drove both economies higher, as labour income surged by 7.4 per cent in B.C. and 6.2 per cent in Manitoba.
Growth in the three Maritime provinces was below the national average. Nova Scotia's GDP grew by 1.6 per cent last year, up from 0.9 per cent in 2006.
Statistics Canada credited the reopening of a mill, increased natural gas production from Sable Island, and higher labour income that boosted retail spending.
Economic activity slowed down in both New Brunswick and Prince Edward Island. The faltering lumber industry got much of the blame for the slowdown in New Brunswick, as GDP cooled to 1.6 per cent from 3.0 per cent in 2006. Growth in P.E.I. slowed from 2.6 per cent to 2.0 per cent.
Analysts said the current year will likely see resource-rich provinces continuing to outperform.
"Looking ahead, most provinces should lose some momentum in 2008, but record oil prices and a U.S. recession will hit central Canada particularly hard, keeping this disparity intact," said BMO Nesbitt Burns economist Robert Kavcik.
Some forecasts call for a mild recession in Ontario this year.
