Saskatchewan and Manitoba will buck the global economic downturn and post strong economic growth this year and next, according to a new forecast released by the Conference Board of Canada on Thursday.

The Ottawa-based business think-tank said the two Prairie provinces will post GDP and employment growth much better than the Canadian average.

"No province will be sheltered from the storm of uncertainty hitting the global economy. However, the Prairies will remain on a strong footing next year as they largely avoid the economic turbulence," said the Conference Board in its most recent provincial economic outlook.

Commodity kings

That is true if you stop at the Saskatchewan-Alberta border.

The two former western weaklings of Confederation will be the only provinces to post growth rates in excess of the forecast by Ottawa's Export Development Canada that the developed world's economy will expand by 1.7 per cent this year.

The Conference Board now predicts that Saskatchewan will grow by an impressive 5.2 per cent in 2008 and 3.6 per cent in 2009.

Employment growth in that province will be strong as well, up 1.9 per cent in 2008 and 1.8 per cent in 2009. That compares with flat employment growth for the country as a whole in 2009.

Manitoba, while expanding at a slower clip than its western neighbour, still should post GDP growth of 2.7 per cent this year and 2.4 per cent in 2009.

By contrast, Alberta, once believed to be growing too quickly for the health of the national economy, will be hurt the most by falling oil prices. The province's economy will expand by only 1.2 per cent in 2008, but will beat out Manitoba for second place in 2009, with a growth rate of 2.6 per cent.

Oil, which had peaked at $147 US a barrel in July, is now worth less than $60 as slumping global economic growth threatens crude demand.

Manitoba and Saskatchewan will benefit from strong prices for grains and other commodities, such as potash, the Conference Board said.

By virtue of its extensive oil and gas operations, Alberta is exposed more than its two Prairie cousins to tumbling crude prices.

Canada lags

The Conference Board predicts that economic growth in Canada, at 0.7 per cent, will barely move the needle this year. The country will expand at a quicker pace next year with national GDP growing at 1.5 per cent, just beating EDC's 2009 projection of developed world growth of 1.2 per cent.

The rest of Canada will face all sorts of economic problems in 2008-09, according to the Conference Board.

Ontario, for instance, will edge dangerously close to recession territory for the next 14 months. Canada's biggest province will only expand marginally in 2008, posting a growth rate of 0.2 per cent. Next year is only slightly better, with Ontario's GDP expanding by 0.8 per cent.

British Columbia, a recipient of the past boom in commodity prices, is paying the price of falling demand for its wood and other products.

Growth in B.C. will reach 1.2 per cent in 2008 and 1.8 per cent in 2009. Only with the economic upturn associated with the 2010 Olympic Games will British Columbia see its GDP expand at a pace beyond three per cent.

The four Atlantic provinces will average a paltry growth rate of 0.6 per cent in 2009, with Newfoundland shrinking by 0.7 per cent.

Finally, Quebec, now in the midst of a provincial election, will mirror Canada's situation, growing 0.9 per cent this year and 1.5 per cent in 2009.