Alberta and British Columbia will lead all Canadian provinces in growth this year as energy strength helps the west and a strong loonie hurts central Canada, according to a forecast from CIBC World Markets.

"Robust domestic demand and a vibrant energy sector continue to trigger heady GDP growth in Alberta," the report said. CIBC World Markets forecasts 2005 growth of 3.8 per cent in Alberta, far exceeding the national average of 2.6 per cent.

British Columbia's GDP is forecast to rise by 3.5 per cent, helped by a solid resource sector and a growing housing market that the report's authors see remaining "brisk" through 2006.

Ontario's GDP is forecast to grow by only 2.2 per cent. "Ontario's manufacturing sector...faces the lingering drag from earlier currency appreciation," the report said.

"Like Ontario, Quebec is forced to import the oil and gas needed to keep its economy running," as the investment dealer forecast growth for Quebec of 2.4 per cent for 2005.

The province of Newfoundland and Labrador has the lowest growth forecast for the year, up just 1.5 per cent. A slowdown in megaproject construction gets the blame.

But the forecast for 2006 is for a nation-leading five per cent growth in GDP, as production from the Voisey's Bay mine and the White Rose offshore oil play picks up steam.