Canada’s recovery is starting to take on the “two-economies” aspect of the pre-recession years, where resource-rich regions prosper and Central Canada struggles.
A new forecast from Scotiabank shows Canada’s manufacturing heartland in Ontario and Quebec will lag behind in economic growth next year with growth rates of 2.0 and 1.9 per cent, respectively.
Meanwhile, Alberta and Saskatchewan, as well as Newfoundland and Labrador — three provinces rich in oil, gas and other resources — will lead Canada in economic growth next year.
Scotiabank economist Alex Koustas notes that the western provinces were hit hard during the 2008-09 recession, when global demand and prices for commodities, from oil to minerals to potash, fell. But now that the global recovery has begun, those sectors are coming back strongly, while manufacturers are still facing headwinds from the high dollar and weak demand in the United States.