Provinces to see limited growth this year but protracted recession unlikely

Canada’s provinces are poised for limited economic activity and sluggish growth for the rest of the year and into 2024, but the risk of a drawn-out recession is increasingly unlikely, according to a report released Tuesday.

The latest provincial outlook from The Conference Board of Canada predicts the country will see very little improvement in the economy this year, with at least one quarter of negative economic growth expected.

But the worst-case scenarios of a protracted recession or highly destabilized labour and capital markets are becoming less likely, the Ottawa-based economic think tank said.

“The economy is hitting a wall,” the Conference Board’s chief economist Pedro Antunes said in an interview. “We’re essentially seeing economic activity flattening out.”

The findings echo the latest figures released on Tuesday (28) from Statistics Canada, which showed real gross domestic product was unchanged in the fourth quarter of 2022, a slightly deeper slowdown than anticipated.

Despite forecasting little output growth this year, the Conference Board said it ex- pects a bounceback in activity in 2024 and 2025 as finance restrictions ease.

The report said inflation has turned a corner and the country is entering a period of steady – though still restrictive – interest rates.

Indeed, borrowing costs are expected to constrain the consumer sector, hitting the Ontario, B.C., and Quebec economies the hardest, the report said.

Meanwhile, a population boom recorded in much of the Maritimes will slow slightly in the coming years, but the region’s export sector and tourism will be on the upswing, the Conference Board said.

Among the provinces, Newfoundland and Labrador will have the fastest-growing economy in 2023 as offshore oil production picks back up, the report said.

`”We forecast a strong rebound in the oil and gas sector this year, with production resuming at the Terra Nova platform after its overhaul in Spain,” the Conference Board said in its provincial outlook.

“Increasing oil production will more than offset the effects of a slowdown in the services-producing sectors.”

The Conference Board is projecting that Newfoundland and Labrador’s GDP will increase by 2.2 per cent in 2023, before tapering slightly in 2024 and 2025.

Meanwhile, the Alberta and Saskatchewan economies will also perform well in the near term, powered by the oil and gas sector and favourable outlooks in agriculture, the provincial outlook said.

“Alberta’s oil and gas sector saw a nice end to 2022, with increased drilling activity leading to higher production,” the report said. “Stable oil prices are expected to benefit the sector in 2023 and beyond.”

The Alberta economy is set to grow by 2.1 per cent this year and rise to 2.8 per cent in 2024 before edging back down to 2.6 per cent in 2025, the Conference Board predicted.

Saskatchewan’s mining and agriculture sectors are expected to be strong drivers of growth in 2023, the report said.

“The catalyst of Saskatchewan’s growth in 2023 will come from the agricultural sector as this year could be another strong one in terms of crop production,” the provincial outlook said. ”Farm receipts are expected to post a bigger increase in Saskatchewan than in any other province in Canada.”

The Conference Board forecasts Saskatchewan’s GDP to expand 1.6 per cent in 2023, followed by a 2.0 per cent gain in

2024.

On the other end of the spectrum, the economies of Quebec and New Brunswick will be nearly flat this year before returning to growth in 2024.

“Quebec will have an outsized slowdown in growth in 2023, but its medium-term fundamentals as the renewable resource capital of the country should encourage growth in later years – provided it can find enough people in its aging labour force,” the Conference Board said.

Quebec’s real GDP growth in 2023 is expected to slow to 0.2 per cent and climb to 2.0 per cent in 2024 and 2.1 per cent in 2025.

New Brunswick’s economy will also slow this year, despite a surging population and impressive finances, according to the Conference Board.

“The province’s finances continue to surprise on the upside,” the report said, noting that a recent fiscal update forecasted a surplus of $774.4 million as population growth boosts personal income tax revenues.

New Brunswick is expected to post 0.1 per cent GDP this year before growth picks up to 1.8 per cent in 2024, the report said. CP/MS

New OSTA chair: Power of trades training needs to be ‘back in the employers’ hands

Less than a month into his new role as the head of the Ontario Skilled Trades Alliance (OSTA), Steven Crombie said going forward the alliance will focus on ensuring the provincial government continues providing funding for the skilled trades and reducing barriers to entry.

“The very first issue objective that I have undertaken and identified is ensuring the provincial government continues with its funding of the Skills Development Fund (SDF),” said Crombie, adding the government has provided three rounds of the funding. “It’s empowered employers and supported their training and upskilling of their workers and allowing them the flexibility to design their own programs.”

SDF offers funding to organizations for innovative projects that address challenges to hiring, training or retaining workers, including apprentices.

Last year, Crombie led a research project, a report OSTA published about employer supports and how government can better support those who conduct training.

“Something that we have long asked the government to consider is putting the power of training back in the employers’ hands,” Crombie explained.

“We know through our own research that employers really are on the front lines of training and government providing that support and recognizing the work that employers are doing through the Skills Development Fund has been fantastic. Continuing the SDF into a fourth round I think will continue to make a huge difference.”

Crombie, who is also the manager of government relations and public affairs at the Ontario Sewer and Watermain Construction Association, was appointed chair of the OSTA in January but he has worked with the alliance for years.

“I’ve been involved in skilled trades issues and policy development for just over five years now and I’m really excited to take on a leading role,” he said.

“There is real momentum behind the work that OSTA is doing.”

The provincial government, and in particular Minister of Labour, Training and Skills Development Monte McNaughton, have been putting a lot of attention on the trades, Crombie said.

“We’re already seeing an uptick in folks not only registering for apprenticeships but starting even in the voluntary trades. We attribute that uptick to some of the work that the government has been doing around promotion,” he noted.

In addition to making sure funding continues for skills development, OSTA also wants to make sure the government remains committed to reducing barriers and pathways.

“The government has committed to build 1.5 million new homes,” said Crombie. “We understand Highway 413, the Bradford Bypass and the Ontario Line are major transit objectives. In addition to all of that we have deteriorating infrastructure, so there is going to be a sustained demand on careers in the skilled trades, especially at a time when aging demographics are going to create a tighter labour pinch.”

For OSTA, it’s important there are no new additional barriers introduced.

“What that really means is not adding to the list of compulsory certification trades in Ontario,” Crombie explained.

“We believe in a nimble and agile labour force and particularly in this economy while certain industries may be faltering we want those folks to be able to come into the skilled trades with little to no barriers.”

OSTA is taking a two-pronged approach when it comes to dealing with the labour shortages currently plaguing the industry.

“A good example is Bed, Bath and Beyond just announced that it was closing all of its big box retail stores in the GTA and there are folks working at those big box retail stores that could start a career in the skilled trades, particularly in the voluntary trades. They could be working today,” Crombie said. “We just want to make sure in an uncertain economy that we’re not introducing barriers for folks who may be laid off in one sector to actually join a sector of the economy which is flourishing.

“We really don’t know what’s going to happen over the short term with the economy, so making sure folks can shift around into in demand careers as quickly and effectively as possible is going to be a major priority for us.”

Promoting the trades is also crucial.

“OSTA traditionally has been focused on regulation and policy, but I think there is an opportunity for OSTA through its member organizations to increase its promotion effort,” he said, adding he will be speaking with local construction associations and at high schools. “It’s just a little bit more of an outward facing approach this year.”

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