1. society
2. work
3. unemployment

PROVINCIAL ECONOMIC FORECAST
TD Economics
April 10, 2015
OIL-ENDOWED PROVINCES TO TRAIL IN 2015-16,
BUT WILL OUTPERFORM IN THE LONGER RUN
Highlights
• In 2015-16, the low oil price environment is expected to lead to a divergence in economic growth
performances between the oil-rich provinces of Alberta, Newfoundland and Labrador and Saskatchewan and other regions. Already, there is evidence that non-resource based economies are receiving
a lift from a lower Canadian dollar, solid demand from the United States and lower energy costs.
• Ontario is projected to top the growth charts over the next two years, with B.C. and Manitoba expected to round out the top three. The three major oil-producing regions are expected to record the
weakest economic growth profiles over the 2015-16 period.
• Beyond 2016, however, long run economic fundamentals – such as productivity and demographics
– point to a return to the top of the growth charts for Alberta and Saskatchewan. Manitoba is also
poised to outperform. Still, while the Atlantic region and Québec will be most constrained by an aging
population, no province will be fully immune.
The continuation of the low crude oil price environment is creating a growing wedge in regional economic performance as 2015 unfolds. At the one end of the spectrum, Ontario (+2.8%) and B.C. (+2.7%)
are on pace to turn in solid growth performances this year, followed closely by Manitoba (+2.4%) and
Nova Scotia (+2.3%). At the other end of the range are the oil-producing provinces. Newfoundland and
Labrador is expected to contract while Alberta’s economy is projected to essentially come to a standstill.
In Saskatchewan, where trend growth has averaged a leading 4.5% since 2009, real GDP growth is on
track to advance a tepid 1.1% this year – the weakest pace of growth since the economic downturn.
While these trends are likely to carry into 2016, a longer-term view suggests that this changing of
the guard will likely represent more of a pause than the start of a new era. Barring a long, protracted
bear market in commodity prices (which we don’t expect), the economic momentum next year is likely
to begin shifting gradually back to those regions that enjoy stronger longer-term growth dynamics –
notably the recent high-flying Prairie provinces.
News only to get worse for big oil producing regions
Trends in crude oil markets are likely to leave a growing imprint on the near-term regional landscape.
Although crude oil prices have shown some semblance of stability since February, after a six-month
free fall, we remain concerned about the near-term downside risks to oil prices resulting from continued
growth in global oil production, rising stockpiles, and dwindling unused storage capacity. As such, we
expect to see further weakness to continue into the Spring, with oil prices hitting a low of US$42 per
barrel on average in 2015Q2. Ultimately, we remain of the view that low prices will begin to put at least
a moderate dent in crude output growth and – along with continued growth in demand – help to restore
balance in the market. As this development begins to get priced into the market, West Texas Intermediate (WTI) prices are expected to recover to US$70 per barrel by the end of 2016.
Derek Burleton, VP & Deputy Chief Economist, 416-982-2514
Jonathan Bendiner, Economist 416-307-5968
www.td.com/economics
@CraigA_TD
TD Economics | www.td.com/economics
CHART 1: PROVINCIAL REAL GDP, 2014-16
Annual%Change
Ontario
2015-16F
2014F
B.C.
Manitoba
Québec
Canada
Maritime
Sask.
Alberta
Nfld.&Lab.
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
ForecastbyTDEconomicsasatApril2015.
In the meantime, all eyes will remain fixed on the mounting collateral damage on oil-producing provincial economies
this year from the sea-change in price conditions since last
July. The first shoe to drop was capital spending, with swift
announcements from the oil patch of cuts to operational
plans – which began in late 2014 – carrying over into the
first quarter of the year. Forecasters, including the Canadian
Association of Petroleum Producers (CAPP), project that
capital spending in the Western Canadian oil and gas sector
will drop by as much as one third this year. Capital spending
in conventional oil and gas in Western Canada is expected
to fall by an even steeper 40-45%. The recently-announced
delay of the West White Rose extension off the coast of
Newfoundland and Labrador adds to the growing list of
capital spending setbacks.
These cost-saving measures are consistent with the current profit environment in the oil patch. Profits in the oil
and gas extraction industry dropped by 16.7% in the fourth
quarter of last year, marking the third straight quarterly decline. And, as revealed in February’s release of the monthly
Labour Force Survey, weakness in profits and investment is
beginning to spill over to the labour market. Alberta posted
the sharpest pullback in employment across all regions in
February (-14K), albeit employment is still rising on a year
over year basis (+1.6%). Employment growth in Saskatchewan has essentially stalled, while the level of employment
in Newfoundland and Labrador is 3.6% below year ago
levels. As employment is a lagging indicator, we expect
employment in these regions to remain subdued over the
course of 2015.
April 10, 2015
Governments in oil-driven regions have also raised the
red flag surrounding their widening fiscal gaps, which has –
and will continue to – set the stage for tough measures in this
year’s budget season. While the fiscal challenge associated
with lower oil prices is proving more daunting in Alberta
and Newfoundland and Labrador, Saskatchewan has not
come away unscathed. So far, budget season has seen both
the Alberta and Saskatchewan governments commit to tight
expenditure management, with the former also leaning on
new revenue-raising initiatives. Newfoundland and Labrador has hinted at spending cuts in their upcoming budget as
well. Housing markets have not been spared either. While
recent reductions in interest rates may help to cushion some
of the blow, this positive impact is likely to fade as the year
closes on 2015. Average existing home prices in Alberta,
Saskatchewan and Newfoundland and Labrador, are likely
to decline by 3-7% over the course of 2015.
Other economies on track to gain a step
In stark contrast, other provincial economies that are not
exposed to the negatives from falling oil prices have, for
the most part, been holding up well heading in to the first
half of this year. Ongoing expansions can be chalked up in
no small part to a number of stimulative factors that have
been blowing across the landscape. In addition to the near
50% drop in crude oil prices since the summer that is saving
consumers money at the pumps, the loonie has lost some
14 U.S. cents over the past seven months, and interest rates
have fallen even further following January’s surprise rate
cut by the Bank of Canada. At the same time, while poor
weather has put a damper on real GDP growth Stateside in
early 2015, demand within the U.S. economy has remained
CHART 2: OIL PRICES TO RECOVER GRADUALLY IN
SECOND HALF OF 2015
US$/barrel
120.0
Forecast
100.0
80.0
60.0
WTI
40.0
20.0
WCS
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source:Bloomberg,HaverAnalytics.ForecastsbyTDEconomics/TDSIasatMarch2015.
*WCSQ1-2015reflectspricesasofMarch31,2015.
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TD Economics | www.td.com/economics
CHART 3: MANUFACTURING REAL GDP ON THE
RISE IN CENTRAL CANADA
manufacturingreal GDPgrowth%,yearoveryear
5.5
4.5
ON
3.5
QC
2.5
1.5
0.5
-0.5
-1.5
-2.5
-3.5
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4*
Source:OntarioEconomicAccountsandInstitutdela statistiqueduQuebec,Directiondes
statistiqueseconomiques.
*OntariomanufacturingrealGDPgrowthin2014Q4isestimatedbyTDEconomicsasatApril2015.
solid on a trend basis. A close examination of recent data
suggests that some of the boost from these forces is already
becoming evident. And, more visible signs of the benefits
are unlikely to show through until the latter part of this year
or into 2016.
Stronger provincial exports appear to be leading the
charge. Given their large manufacturing sectors, Ontario
and Québec are two provinces that are particularly well
positioned to benefit from rising U.S. demand and a lower
loonie. Indeed, as Chart 3 shows, both of these central
Canadian provinces have witnessed a higher level of manufacturing activity in recent quarters. Figures on manufacturing shipments in late 2014 and early 2015 suggest that
healthy growth momentum has continued into early 2015.
The exception being regions that have a healthy reliance on
petroleum and coal manufacturing which has been weighed
down by lower prices. Looking ahead, we expect to see
this positive momentum in the manufacturing sector continue. And, as firms increasingly bump up against capacity
constraints, we expect that producers will need to invest in
more capital.
The improving demand environment is also likely to
kick start provincial tourism sectors. Tourism real GDP has
increased steadily in 2014 with the current level of real GDP
3.6% above year ago levels in 2014Q4 – the strongest reading in four years. Tourism activity is expected to continue
to thrive as 2015 progresses. Not only do we expect to see
larger numbers of Americans visiting Canadian destinations,
but fewer Canadians are likely to travel to the U.S. to take
advantage of cross-border shopping, especially in the wake
April 10, 2015
of a lower loonie. All provinces stand to benefit, although
those with an outsized tourism sector – British Columbia and
Prince Edward Island – are likely to enjoy the largest lift.
Consumers from coast to coast are enjoying the savings from low gasoline prices – by our estimate, Canadian
households are projected to save as much as $800 on average in 2015 from falling pump prices. And while a lower
exchange rate is driving up some retail prices with highimport content, the rewards reaped from low gasoline prices
is still likely to dominate. This development, together with
low (and falling) interest rates in recent months, has been
supportive to spending growth and housing markets across
the country. British Columbia and Ontario have been leading the way in terms of gains and home sales over the past
three months, although increases have been recorded in
most non-oil producing provinces. It is the same story for
retail spending. In terms of auto sales, seven-of-ten provinces recorded year-over-year advances in auto sales over
the January-February period, led by a surge in unit sales in
B.C. as well as high single digit gains in Manitoba, Québec
and Prince Edward Island.
In light of high personal indebtedness, rising employment and income gains will be required to maintain some
of the momentum in consumer spending growth this year.
However, with the exception of Manitoba, where yearover-year employment growth is averaging around 2% on
a trend basis, little meaningful pick up has been observed in
recent months in the job markets of non-commodity based
economies. It only appears to be a matter of time before
output gains translate into stronger labour demand across
most provinces.
Near-term prospects for a moderation in nominal GDP
(i.e. income) growth will provide little support for government coffers this year. More than half the provinces still
face deficits, pointing to further spending restraint and tax
increases in this Spring round of budgets. Based on budgets released so far this year, infrastructure is one area that
is likely to remain a priority, while much of the focus of
expenditure reductions remains on operations.
2016 and beyond
We expect that the non-oil producing regions will maintain an advantage in terms of economic growth performances
vis-á-vis the oil-rich provinces in 2016. But, as a moderate
recovery in crude oil prices slowly begins to filter through,
we see renewed convergence in provincial growth rates
3
TD Economics | www.td.com/economics
taking place, from coast to coast. One exception to the rule
is likely to be Newfoundland and Labrador, which will
face a continued headwind from a winding down of major
capital projects.
In conjunction with this medium-term outlook report,
we have released a longer-term view on provincial economic growth (see From a Longer-Term Growth Perspective, West is Still Best). Based on an analysis that factors
in longer-term drivers of expansion – such as productivity
and demographics – the traditional growth stalwarts of
Alberta and Saskatchewan will reassert themselves at the
top of the provincial growth standings over the next few
decades. Manitoba is also poised to outperform. Still, while
the Atlantic region and Québec will be the most constrained
by an aging population, no province will be fully immune.
April 10, 2015
Bottom line
Our current growth tables have been flipped upside down
relative to trends that were in place earlier in the recovery.
Lower oil prices will weigh on economic growth in oilproducing regions. At the same time, a series of tailwinds
will likely lift the pace of expansion in other provinces over
the 2015-16 period. Recent data are broadly consistent with
this story. Having said that, our longer-term view suggests
that this changing of the guard will likely be relatively temporary. Assuming a gradual increase in oil prices over the
medium term, economic momentum is likely to shift back
to the Prairie region where longer-term growth dynamics
point to an outperformance vis-á-vis the rest of Canada.
4
TD Economics | www.td.com/economics
BRITISH COLUMBIA
•After clocking in at a solid 2.5% in 2014, real GDP growth in British Columbia is set to average 2.6% over the next two
years – trailing only Ontario at the top of the growth charts.
• Tourism and manufacturing industries are expected to perform well over the 2015-16 period. A lower Canadian dollar and
steady U.S. demand are likely to drive expansion in both sectors. On a trend basis, manufacturing sales are rising – partly
reflecting higher sales in the food manufacturing industry.
• Natural gas production is expected to moderate over the forecast period after rising more than 5% in 2014. Ongoing high
North American inventory levels are likely to keep natural gas prices relatively subdued, at an average of around US$3.20
per MMBtu over the next two years.
• The B.C. labour market stands to receive a boost from increased population growth over the forecast period. A rosier
outlook for the B.C. economy relative to Alberta and Saskatchewan should see net interprovincial migration continue to
stay in positive territory. In 2014, B.C.’s net interprovincial migration totalled +10K – the first positive reading in two
years and the strongest net gain since 2008.
• The housing market also stands to gain from the improved demographic backdrop. The recent cut in interest rates should
also buoy housing demand over the coming quarters. Housing demand will likely slow from its current unsustainable pace
as 2015 unfolds but will remain a bright spot this year. Higher interest rates in 2016 will likely lead to a deceleration in
housing activity.
• The recently tabled provincial budget estimates a current surplus of close to $1 billion in fiscal 2014-15 and the government expects to remain in the black throughout its medium term plan. As such, B.C. remains the envy of almost all other
regions in Canada. In order to sustain its surplus position, program spending will be held to 2.3% over the next two years.
BRITISH COLUMBIA - TD ECONOMICS' FORECASTS
B.C.: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
Job creation(000s)
2013 2014E 2015F 2016F
RealGDP
2.4
1.9
2.5
2.7
2.5
NominalGDP
2.3
3.2
4.2
3.5
4.6
Employment
1.6
0.1
0.6
1.0
1.0
Unemploymentrate(%)
6.8
6.6
6.1
6.0
6.0
1.1
-0.1
1.0
0.6
2.1
0
Retailtrade
1.9
2.4
5.8
3.6
3.8
-20
Avg.existinghomeprice
4.4
-1.5
4.6
-6.0
-2.6
-11.8
7.8
15.2
12.0
2.5
-7.9
4.8
6.1
5.0
-0.6
Forecast
40
ConsumerPriceIndex
Housingstarts
8.0
60
20
Existinghomesales
-60
5.0
4.0
JobCreation
2004
2006
2008
2010
2012
2014
2016
2.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
Housingstarts(leftscale)
B.C.: FISCAL BALANCE AND NET DEBT
2004=100
Averageresaleprice(rightscale)
250
PercentshareofNominalGDP
2.5
25
2.0
60
200
150
20
1.5
20
1.0
Forecast
40
0.5
15
0.0
0
100
-0.5
10
-1.0
-20
50
-40
-60
3.0
UnemploymentRate
BRITISH COLUMBIA: HOUSING MARKET
%Growth
7.0
6.0
-40
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
80
UnemploymentRate%
80
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2016
0
-1.5
BudgetBalance(leftscale)
-2.0
NetDebt(rightscale)
-2.5
01-02
03-04
05-06
07-08
09-10
11-12
13-14
5
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
5
TD Economics | www.td.com/economics
ALBERTA
•Economic activity in Alberta is projected to grind to a virtual standstill (+0.5%) in 2015 as the impact of a low oil price
environment ripples through the economy. Next year, we expect both a moderate bounce back in crude oil prices and
economic growth (+1.8%).
• Output in the construction sector is projected to contract sharply in 2015. A slew of downbeat operational plans coming
out of the oil patch is consistent with a drop in capital outlays in the oil sector on the order of 20-30% this year. Low
natural gas prices will also weigh on non-residential investment. That said, oil production is still on track to expand this
year. And, with the oil and gas output still accounting for around 25% of total real GDP, rising output should help Alberta
avert an outright contraction in real GDP in 2015.
• Income growth as measured by nominal GDP will take a big hit in 2015, falling by close to an estimated 7%, as low oil
prices impact firms’ bottom lines. Weaker hiring out of the oil patch is projected to translate to a sharp deceleration in
employment growth with the unemployment rate forecast to move higher and average above 5% for the first time since
2011.
• Housing activity will be adversely affected by the economic slowdown. Weaker employment and income gains are projected to translate into a downturn in the resale market where average prices are forecast to fall 7%. This is expected to
lead to a pullback in new residential construction activity.
• Government coffers will not be immune either. The March 26th budget clearly spelled out the fiscal challenge faced by
the government. Program spending will be held essentially flat through fiscal 2017-18. The government also tabled a
10-year plan that outlined a long term fiscal strategy for the government to wean itself off oil royalty revenues to cover
operational spending.
ALBERTA - TD ECONOMICS' FORECASTS
ALBERTA: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
100
RealGDP
4.5
3.8
4.0
0.5
1.8
80
NominalGDP
5.6
7.1
7.1
-6.6
6.5
60
Employment
3.5
2.5
2.2
0.5
0.8
Unemploymentrate(%)
4.6
4.6
4.7
5.6
5.9
40
ConsumerPriceIndex
1.1
1.4
2.6
0.4
2.0
20
Retailtrade
7.0
6.9
7.7
-0.9
3.4
Housingstarts
30.4
8.2
12.6
-17.4
-3.6
0
Existinghomesales
12.3
9.5
8.6
-32.8
-2.0
2.6
5.0
5.2
-7.2
-1.6
Avg.existinghomeprice
-40
6.0
5.0
4.0
UnemploymentRate
2004
Housingstarts(leftscale)
2004=100
Averageresaleprice(rightscale)
30
250
200
20
10
150
0
-10
100
-20
-30
50
-40
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril 2015.
April 10, 2015
2008
2010
2012
2014
2016
2.0
ALBERTA: FISCAL BALANCE AND NET DEBT
Forecast
2004
2006
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
40
-50
3.0
JobCreation
ALBERTA: HOUSING MARKET
%Growth
7.0
Forecast
-20
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
50
UnemploymentRate%
Job creation(000s)
2013 2014E 2015F 2016F
2016
0
PercentshareofNominalGDP
BudgetBalance(leftscale)
5.0
0
NetDebt(rightscale)
4.0
-2
3.0
-4
2.0
-6
1.0
-8
0.0
-10
-1.0
-12
-2.0
01-02
03-04
05-06
07-08
09-10
11-12
13-14
15-16f
-14
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
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TD Economics | www.td.com/economics
SASKATCHEWAN
• The drop in oil prices presents the greatest hurdle for the Saskatchewan economy this year and is expected to lead to a
contraction in oil output in 2015. Oil production in Saskatchewan is entirely conventional and therefore relatively susceptible to the low oil price environment. And, while Saskatchewan’s economy benefits from a higher degree of resource
diversity than its oil-producing counterparts, the oil and gas sector still accounts for significant 15% of real GDP. What’s
more, CAPP estimates that capital spending in the conventional oil production space will drop 40% in 2015. This will
weigh heavily on construction activity this year.
• Other primary industries are expected to record moderate gains over the forecast period. In general, crop prices are likely
to bottom by mid-year, before trending higher in the second half of 2015 and into 2016. Wheat prices are likely to remain
quite flat, as ample inventories keep a lid on prices. Barley prices have the most upside, as lower production and supply
have tightened the market. In the mining sector, potash production is projected to increase. While global potash demand
is expected to pare back in 2015, supply constraints will likely put some upward pressure on prices.
• The housing market is expected to undergo a correction over the 2015-16 period. Signs of extreme weakness in the housing market have been exhibited over the past year, reflecting weaker incomes and demand, as well as a multi-year period
of overbuilding. We expect average home prices and housing starts to move lower over the forecast period.
• The government tabled its 2015 budget in mid-March. In response to the estimated weaker non-renewable resource revenue intake, growth in program spending has been held to a meagre 1.2% in fiscal 2015-16 relative to Budget 2014. That
said, the Province has bolstered its capital spending with a four-year, $5.8 billion infrastructure plan.
SASKATCHEWAN - TD ECONOMICS' FORECASTS
SASKATCHEWAN: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
2013 2014E 2015F 2016F
Job creation(000s)
RealGDP
3.1
5.0
1.3
1.1
1.8
16
NominalGDP
5.7
5.5
1.1
-2.9
4.8
14
Employment
2.4
3.1
1.0
0.1
0.8
12
Unemploymentrate(%)
4.7
4.1
3.8
4.9
5.0
10
ConsumerPriceIndex
1.6
1.5
2.4
0.5
2.0
8
Retailtrade
7.4
5.1
4.5
0.7
3.1
6
42.6
-17.1
0.8
-11.2
-5.1
4
Existinghomesales
5.7
-2.4
2.5
-19.9
2.6
2
Avg.existinghomeprice
6.4
4.5
3.6
-2.6
-0.4
0
Housingstarts
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
5.0
4.0
3.0
2004
2006
2008
2010
2012
2014
2016
2004=100
Averageresaleprice(rightscale)
300
250
Forecast
40
20
200
150
0
100
-20
PercentshareofNominalGDP
25
4.0
3.5
20
3.0
BudgetBalance(leftscale)
2.5
NetDebt(rightscale)
15
2.0
10
1.5
1.0
50
-40
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2.0
SASKATCHEWAN: FISCAL BALANCE AND NET DEBT
60
-60
Forecast
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
Housingstarts(leftscale)
%Growth
6.0
UnemploymentRate
SASKATCHEWAN: HOUSING MARKET
80
UnemploymentRate%
JobCreation
18
2016
0
5
0.5
0.0
01-02
03-04
05-06
07-08
09-10
11-12
13-14
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
7
TD Economics | www.td.com/economics
MANITOBA
•Real GDP growth in Manitoba is forecast to decelerate in 2014 (+1.9%) as a pullback in crop production and lower output
in its oil sector weighed on activity last year. Looking ahead, real GDP growth is forecast to average 2.2% over the next
two years – outperforming the national average.
• Manufacturing activity is projected to accelerate sharply over the forecast period reflecting a lower Canadian dollar and
steady U.S. demand. Already positive momentum is building in the transportation equipment and chemical manufacturing industries. Export receipts in these industries are also trending higher. These industries are likely to exhibit further
strength over the 2015-16 period. The export intensities in both sectors are high relative to their reliance on imports. As
such, they are well positioned to capitalize on a lower exchange rate.
• Hog prices have fallen dramatically over the last few months as herd sizes in North America have begun to rise. The impact from last year’s PED virus in the U.S. was smaller than anticipated and an elevated US dollar has dampened export
demand. While we expect a modest rebound, hog prices should remain significantly lower than the highs seen last year.
In contrast, as cattle markets remain tight, prices are likely to remain lofty until supplies begin to be replenished. That
said, lower prices for competing meats will weigh on cattle prices over the near term.
• The jobs market has gained a step in recent months. Year-over-year growth on a three-month moving average basis currently sits at 2% as of February, the second fastest rate in Canada. Increased hiring in the construction and health care and
social assistance sectors have been leading the charge.
• After an extended period of robust resale activity, builders responded with starts running well ahead of estimated household formation. As such, new housing construction pulled back sharply in 2014 alongside a cooling in the resale market.
With inventory levels still elevated relative to historical trends, housing activity is forecast to moderate over the forecast
period.
MANITOBA - TD ECONOMICS' FORECASTS
MANITOBA: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
Job creation(000s)
2013 2014E 2015F 2016F
RealGDP
3.3
2.2
1.9
2.4
2.1
10
NominalGDP
6.0
3.7
4.0
3.6
4.7
8
Employment
1.6
0.7
0.1
1.2
0.7
Unemploymentrate(%)
5.3
5.4
5.4
5.3
5.4
ConsumerPriceIndex
1.6
2.2
1.8
0.7
2.1
4
Retailtrade
1.3
3.9
3.9
2.9
3.7
2
0
21.3
2.6
-17.4
-20.9
22.4
Existinghomesales
Housingstarts
0.2
-1.2
0.3
-1.9
1.7
Avg.existinghomeprice
4.9
5.7
1.5
-1.6
-1.0
-2
2004
2006
2008
2010
2012
2014
2016
Housingstarts(leftscale)
MANITOBA: FISCAL BALANCE AND NET DEBT
2004=100
Averageresaleprice(rightscale)
250
Forecast
30
20
200
150
PercentshareofNominalGDP
2.0
35
1.5
30
1.0
25
0.5
20
0.0
10
100
0
-10
50
-20
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
4.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
40
-30
Forecast
5.0
MANITOBA: HOUSING MARKET
%Growth
6.0
UnemploymentRate
6
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
50
UnemploymentRate%
JobCreation
12
2016
0
15
-0.5
-1.0
BudgetBalance(leftscale)
-1.5
NetDebt(rightscale)
-2.0
00-01
02-03
04-05
06-07
08-09
10-11
10
5
12-13
14-15f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
8
TD Economics | www.td.com/economics
ONTARIO
• Ontario is projected to be the fastest growing economy over the 2015-16 period, with real GDP growth estimated at 2.7%
on average.
• U.S. real GDP growth is forecast to run at around 3% annually over the next two years which will translate into solid
demand for Ontario’s manufacturing sector. A lower Canadian dollar will also benefit Ontario producers. Already there
is evidence of rising momentum in factory production, with manufacturing real GDP in Ontario up almost 5% Y/Y in
2014Q3. Somewhat mitigating the positive outlook for manufacturing is an expected contraction in auto production on
account of the planned 14-week shutdown for retooling at the Chrysler plant in Windsor and the gradual shutdown of
GM’s Oshawa 2 plant.
• A low interest rate environment has continued to fuel the housing market over the first few months of 2015 with both resales and average prices tracking higher. While our housing demand outlook has been nudged up since our January update,
we still expect to see a gradual moderation in the resale market on account of an expected deterioration in affordability
and elevated household debt. New construction activity is projected to decline over the next few years after a period of
overbuilding.
• The Ontario government’s fiscal outlook remains challenging, with a deficit elimination timetable still set for fiscal 201718. The upcoming spring budget should provide some additional details on how the government plans to keep program
spending essentially flat through fiscal 2017-18.
• Employment growth in Ontario has been slow out of the gate in 2015, up only 0.6% on a trend basis. Surprisingly, manufacturing employment is still tracking lower through February despite the uptick in activity. Our forecast pegs employment
growth at 1% over the 2015-16 period. Steady gains in export-based manufacturing and tourism industries are expected
to translate into increased hiring as 2015 progresses.
ONTARIO - TD ECONOMICS' FORECASTS
ONTARIO: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
UnemploymentRate%
Job creation(000s)
2013 2014E 2015F 2016F
150
RealGDP
1.7
1.3
2.4
2.8
2.5
100
NominalGDP
3.2
2.4
4.0
3.8
4.7
Employment
0.7
1.8
0.8
1.0
1.0
50
10.0
Forecast
8.0
0
Unemploymentrate(%)
7.9
7.6
7.3
6.9
6.7
ConsumerPriceIndex
1.4
1.0
2.3
0.7
2.2
-50
Retailtrade
1.6
2.3
4.8
3.6
4.0
-100
Housingstarts
14.2
-21.4
-4.0
-1.8
-0.2
JobCreation
Existinghomesales
-1.9
0.5
3.7
2.5
0.7
-150
UnemploymentRate
5.0
5.1
7.0
4.2
2.0
Avg.existinghomeprice
-200
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
7.0
6.0
2004
2004=100
Averageresaleprice(rightscale)
20
Forecast
10
-10
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2016
PercentshareofNominalGDP
40
160
0.0
35
140
-0.5
30
-1.0
25
-1.5
20
20
2012
4.0
45
40
-30
2010
2016
0.5
60
-20
2008
2014
180
80
2006
2012
1.0
100
2004
2010
200
120
0
-40
2008
ONTARIO: FISCAL BALANCE AND NET DEBT
Housingstarts(leftscale)
%Growth
2006
5.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
ONTARIO: HOUSING MARKET
30
9.0
0
-2.0
15
-2.5
BudgetBalance(leftscale)
10
-3.0
NetDebt(rightscale)
5
-3.5
01-02
03-04
05-06
07-08
09-10
11-12
13-14
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
9
TD Economics | www.td.com/economics
Québec
•Québec’s economy is estimated to have recorded a modest 1.5% increase in real GDP in 2014, marking the fourth consecutive year that economic growth came in at 2% or lower. A pull back in construction output combined with sluggish
activity across service sector industries contributed to the lacklustre performance. On the plus side, mining production
surged, while manufacturing activity expanded at a decent clip. Real economic growth is poised to accelerate to an average of 2.1% over the next two years.
• Québec’s export sector is likely to become a more important driver of growth, assisted by steadily rising U.S. demand and
a lower Canadian dollar. As such, prospects in the manufacturing sector remain upbeat. Indeed, on a trend basis, export
receipts of aerospace and processed aluminum shipments are soaring. Lower energy prices will also keep input costs
contained over the near term.
• Employment growth is expected to gain a step in line with an improving economy, albeit at a moderate pace around 0.7%.
The unemployment rate is forecast to track lower as well.
• After slowing over the past few years, the housing market is expected to return to firmer ground over the forecast period.
The January interest cut by the Bank of Canada and an improved economic outlook should support a pick-up in resale
activity. In terms of new construction, an overhang of inventory still needs to be dealt with. Weak population growth will
also limit any potential bounce back in construction and overall housing activity over the medium term.
• The recent budget provided a complete picture of how the government plans to balance the books by fiscal 2015-16. The
path to balance calls for fiscal restraint, with program spending projected to be held to under 2% over the next two years.
That said, infrastructure spending is still forecast to remain elevated over the medium term which will also support long
term growth prospects. Capital spending averaged $6.8 billion per year over the 2002-13 period. The current 10-year
capital plan projects a rise in average annual capital outlays to $9 billion.
QUéBEC - TD ECONOMICS' FORECASTS
QUéBEC: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
Job creation(000s)
2013 2014E 2015F 2016F
RealGDP
1.5
1.0
1.5
2.2
2.0
100
NominalGDP
3.4
1.5
3.6
3.2
4.2
80
Employment
0.8
1.4
0.0
0.7
0.6
60
Unemploymentrate(%)
7.7
7.6
7.7
7.6
7.5
40
ConsumerPriceIndex
2.1
0.7
1.4
0.7
2.0
Retailtrade
1.2
2.5
2.6
2.3
3.8
-2.3
-20.3
3.8
-3.5
1.2
Existinghomesales
0.3
-8.0
-0.7
1.0
2.3
-20
Avg.existinghomeprice
4.1
1.2
1.4
0.3
1.6
-40
Housingstarts
8.0
7.5
0
7.0
2004
Housingstarts(leftscale)
2004=100
180
Averageresaleprice(rightscale)
15
Forecast
10
140
120
5
0
-5
20
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2016
6.5
2016
0.0
50
-0.2
-0.6
40
2012
2014
60
80
-20
2010
2012
PercentshareofNominalGDP
100
-15
2008
2010
0.2
-0.4
60
-10
2006
2008
QUéBEC: FISCAL BALANCE AND NET DEBT
160
2004
2006
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
20
-25
Forecast
8.5
QUéBEC: HOUSING MARKET
%Growth
9.0
UnemploymentRate
20
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
25
UnemploymentRate%
JobCreation
120
0
40
30
20
-0.8
BudgetBalance(leftscale)
-1.0
-1.2
10
NetDebt(rightscale)
01-02
03-04
05-06
07-08
09-10
11-12
13-14
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
10
TD Economics | www.td.com/economics
NEW BRUNSWICK
• Economic activity is forecast to gain some momentum in New Brunswick over the 2015-16 period, with real GDP growth
averaging just under 2%.
• Prospects for the mining sector are bright despite the challenging commodity price outlook. The recently expanded Picadilly potash mine commenced production in late 2014 and is expected to boost activity in the sector after a slowdown in
2014. What’s more, Trevali’s Caribou zinc-lead-silver-copper-gold mine is set to commence operations in 2015Q2.
•Exports have been going through a soft patch. In the three months ended in February, export receipts were down 20%
Y/Y. The weak reading largely reflects a significant drop in sales in the petroleum refineries industry. Looking forward,
rising U.S. demand and a low loonie should support the export sector over the 2015-16 period.
• Employment is forecast to advance at a modest 0.2% this year and 0.6% in 2016. Demographic challenges remain a hurdle
for the region. New Brunswick has one of the oldest populations in Canada and its population has outright declined over
the past two years. On the plus side, according to Statistics Canada M1 population projection, the province can expect to
record a modest rebound in population over the next two years.
• The newly elected Liberal government tabled its first budget on March 31st, with the deficit projected to widen to $477
million (1.4% of GDP). The budget introduced a slew of new revenue-raising and spending initiatives to address a structural deficit. With input from the strategic program review panel expected to guide next year’s budget, fiscal restraint is
likely to persist over the medium term.
• Capital spending is assumed to move higher over the forecast period. The government’s recently tabled capital plan is
estimated to rise by 8% in fiscal 2015-16. What’s more, the $579 million Sisson Brook Tungsten-Molybdenum project’s
environmental assessment was completed in early March. While this is just one phase in the assessment process, the
prospect of increased investment activity tied to this project bodes well for construction activity over the medium term.
NEW BRUNSWICK - TD ECONOMICS' FORECASTS
NEW BRUNSWICK: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
RealGDP
2013 2014E 2015F 2016F
-0.4
-0.5
1.1
1.9
1.8
NominalGDP
1.1
0.5
2.6
2.8
3.9
Employment
-0.7
0.4
-0.2
0.2
0.6
Unemploymentrate(%)
10.2
10.3
9.9
9.8
9.8
1.7
0.8
1.5
0.5
1.9
ConsumerPriceIndex
Retailtrade
-0.7
0.7
3.7
2.6
3.6
Housingstarts
-0.3
-13.4
-18.7
30.7
14.2
Existinghomesales
-3.0
-1.9
-0.1
-14.6
-3.0
0.2
1.3
-0.2
0.7
0.4
Avg.existinghomeprice
8
Job creation(000s)
10.0
4
9.0
2
8.0
0
7.0
-2
-4
2004
Housingstarts(leftscale)
2004=100
Averageresaleprice(rightscale)
160
120
20
100
10
0
Forecast
-10
-20
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2008
2010
2012
2014
2016
6.0
NEW BRUNSWICK: FISCAL BALANCE AND NET DEBT
140
2004
2006
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
30
-30
Forecast
6
NEW BRUNSWICK: HOUSING MARKET
%Growth
11.0
UnemploymentRate
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
40
UnemploymentRate%
JobCreation
2016
PercentshareofNominalGDP
1.5
40
1.0
35
0.5
30
0.0
25
-0.5
20
80
-1.0
60
-1.5
40
-2.0
BudgetBalance(leftscale)
20
-2.5
NetDebt(rightscale)
0
-3.0
15
01-02
03-04
05-06
07-08
10
5
09-10
11-12
13-14
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
11
TD Economics | www.td.com/economics
nova scotia
•Nova Scotia is forecast to be the top performing Atlantic economy over the forecast period. We expect real GDP growth
of 2.3% in 2015 and 2.1% in 2016.
•Higher natural gas production provided support to the economy in 2014. Looking forward, production is forecast to move
lower alongside prices which will take some steam out of the export sector. Luckily, there are likely to be some positive
offsets. Output in the manufacturing sector is projected to move higher, bolstered by a lower Canadian dollar and rising
U.S. demand. We assume stronger momentum heading into 2016 as the commencement of the shipbuilding projected is
currently slated for late 2015.
• At 0.5% Y/Y, employment growth ran in positive territory over the first few months of 2015. This is a noticeable improvement from the consecutive 1.1% declines in employment recorded over the 2013-14 period. On an industrial basis, the
recent job market pickup has been concentrated in the resource-sector as well as service-sector industries. We expect this
positive momentum in the labour market to carry forward in 2015, with employment growth estimated at 1.1%.
• Capital spending is assumed to remain elevated over the forecast period. The development of the Halifax shipyard in
preparation of the $25 billion shipbuilding contract will prop up investment spending in 2015. Activity tied to the Macdonald Bridge and Maritime Link project will also lift non-residential construction and engineering output. That said, the
government’s 2015-16 capital plan pointed to an 8% decline in investment spending which will restrict non-residential
and engineering output.
• Residential construction is forecast to increase. After declining for three consecutive years (and being walloped by the
harsh winter weather to start 2015), housing starts are projected to rise over the 2015-16 period. Population growth has
returned to positive territory over the past half year. This trend is likely to continue over the near term in light of the rosier
near-term economic outlook.
NOVA SCOTIA - TD ECONOMICS' FORECASTS
NOVA SCOTIA: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
RealGDP
-0.3
0.3
1.6
2.3
2.1
12
Forecast
10
8
NominalGDP
-0.4
2.4
4.0
2.9
4.4
Employment
1.0
-1.1
-1.1
1.1
0.7
Unemploymentrate(%)
9.1
9.1
9.0
8.8
8.9
4
ConsumerPriceIndex
2.0
1.2
1.7
0.7
2.1
2
Retailtrade
1.0
2.9
2.2
2.1
3.9
0
-2.2
-14.4
-21.8
24.4
1.3
-2
Existinghomesales
1.3
-12.4
-3.6
-2.7
1.0
-4
Avg.existinghomeprice
2.8
-0.9
-1.2
0.1
0.8
-6
Housingstarts
10.0
9.5
9.0
6
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
8.5
8.0
7.5
7.0
JobCreation
6.5
UnemploymentRate
2004
2006
2008
2010
2012
2014
2016
6.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
NOVA SCOTIA: HOUSING MARKET
Housingstarts(leftscale)
%Growth
UnemploymentRate%
Job creation(000s)
2013 2014E 2015F 2016F
NOVA SCOTIA: FISCAL BALANCE AND NET DEBT
PercentshareofNominalGDP
2004=100
Averageresaleprice(rightscale)
160
2.0
50
140
1.5
45
120
1.0
100
0.5
30
80
0.0
25
60
-0.5
20
40
-1.0
-20
20
-1.5
-30
0
-2.0
40
30
Forecast
20
10
0
-10
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2016
40
35
15
01-02
BudgetBalance(leftscale)
10
NetDebt(rightscale)
5
03-04
05-06
07-08
09-10
11-12
13-14
15-16f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
12
TD Economics | www.td.com/economics
PRINCE EDWARD ISLAND
•Real GDP growth in Prince Edward Island is forecast to average 1.6% over the forecast period.
• A lower Canadian dollar and steady demand from the U.S. should support P.E.I’s export sector over the next few years.
Export receipts are already trending higher through the first two months of 2015, led by solid gains in food and electrical
equipment manufacturing. This economic backdrop should also support tourism activity over the forecast period.
• The jobs market has disappointed to start the year. Employment is down 0.3% Y/Y on a 3-month moving average basis.
That said, the manufacturing, accommodation and food services and business, building and support services sectors have
been fast out of the gate to start 2015. On the other side of the coin, employment in the agriculture and resource sectors
have moved lower. The level of employment in the health care and social assistance and educational services industries
is also declining. Looking forward, employment prospects in the public sector will be limited given the government’s
current deficit position.
• Business sentiment as measured by the CFIB Business Barometer Index remains elevated in P.E.I, currently sitting at 69.4
in March. Consistent with past results, index levels normally range between 65 and 70 when the economy is growing at
its potential. Indeed, only businesses in British Columbia are showing more confidence in Canada as of March. The CFIB
reports that short-term employment plans are looking upbeat in the province, with 21% of firms expecting to add full-time
staff versus only 4% projecting job cuts. However, only 37% of owners believe that their businesses are in good shape
which is more in line with a subdued economic outlook.
• Increased revenue from crown corporations and reduced expenses by government departments improved the government’s
third-quarter fiscal position by $5 million. As such, the province’s total consolidated deficit for fiscal 2014-15 narrowed
to $34.7 million from the previously budgeted $39.7 million.
PRINCE EDWARD ISLAND - TD ECONOMICS' FORECASTS
P.E.I.: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
2013 2014E 2015F 2016F
3
RealGDP
1.0
2.0
1.2
1.6
1.6
2
NominalGDP
1.9
5.0
3.0
2.3
3.4
2
Employment
1.5
1.5
-0.1
0.6
0.7
1
11.2
11.6
10.6
10.5
10.4
1
Unemploymentrate(%)
ConsumerPriceIndex
2.0
2.0
1.6
0.1
1.9
Retailtrade
3.2
0.8
3.0
2.8
3.3
Housingstarts
0.3
-33.2
-19.0
6.6
5.5
Existinghomesales
6.1
-11.7
-3.2
5.9
1.8
-1
Avg.existinghomeprice
3.7
1.6
6.4
-0.5
1.4
-2
Forecast
UnemploymentRate
12.0
11.5
11.0
10.5
10.0
-1
9.5
2004
2006
2008
2010
2012
2014
2016
9.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
P.E.I.: FISCAL BALANCE AND NET DEBT
P.E.I.: HOUSING MARKET
Housingstarts(leftscale)
%Growth
12.5
JobCreation
0
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
2004=100
Averageresaleprice(rightscale)
40
UnemploymentRate%
Job creation(000s)
160
30
140
Forecast
20
120
PercentshareofNominalGDP
1.0
40
0.5
35
0.0
30
-0.5
25
10
100
0
80
-10
60
-2.0
-20
40
-2.5
BudgetBalance(leftscale)
10
20
-3.0
NetDebt(rightscale)
5
0
-3.5
-30
-40
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
2016
-1.0
20
-1.5
15
00-01
02-03
04-05
06-07
08-09
10-11
12-13
14-15f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
13
TD Economics | www.td.com/economics
NEWFOUNDLAND AND LABRADOR
• In Newfoundland and Labrador, where economic activity is notoriously volatile, the free fall in oil prices is expected
to lead to a contraction in real GDP over the 2015-16 period. The hit to nominal GDP will be most striking. We project
nominal GDP to contract more than 7% in 2015 and recover only slightly in 2016.
• Capital spending will be negatively impacted by the lower oil price environment in 2015. In mid-December it was announced that a final investment decision on the West White Rose extension will be delayed. That said, activity tied to the
Hebron offshore oil site, South White Rose extension and Muskrat Falls will keep spending elevated this year. In 2016,
investment activity is assumed to pullback sharply, as outlays earmarked for these major projects will likely have peaked.
• Lower commodity prices are not just concentrated in the oil space. Iron ore prices are projected to move lower over the
forecast period which will weigh on production. Indeed, the Wabush mine has been shut down, while activity tied to the
Alderon Kami mine has been delayed as financing plans still need to be secured.
• The manufacturing outlook is brighter. The new Long Harbour hydromet nickel processing plant began operations in
November 2014 and should help to lift manufacturing activity over the forecast period.
• The hit to government coffers from low oil and other commodity prices will be large. The recent fiscal update pegged the
deficit for fiscal 2014-15 at $916 million. In February, Minister Wiseman warned of cuts to program spending, fee hikes
and layoffs in the public sector as the government grapples with its fiscal challenge. He also acknowledged it could take
years for the government to get back to balance, highlighting the need for a long term fiscal vision. As the public sector
(public administration, educational services and health care and social assistance) accounts for around 20% of total real
GDP, a pullback in public sector activity will weigh on economic activity over the next few years.
NFLD AND LABRADOR - TD ECONOMICS' FORECASTS
NFLD & LABRADOR: LABOUR MARKET PERFORMANCE
Annualaveragepercentchangeunlessnoted
2012
UnemploymentRate%
Job creation(000s)
2013 2014E 2015F 2016F
10
16.0
8
RealGDP
-4.5
7.2
0.4
-0.5
-1.2
NominalGDP
-3.4
10.7
0.3
-7.6
3.8
Employment
3.8
0.8
-1.7
-0.8
-0.6
4
Forecast
6
14.0
12.3
11.6
11.9
12.5
12.8
2
ConsumerPriceIndex
2.1
1.7
1.9
0.0
1.8
0
Retailtrade
4.5
5.0
3.5
-0.7
1.1
-2
JobCreation
UnemploymentRate
Unemploymentrate(%)
11.4
-26.3
-21.6
-2.0
8.0
-4
Existinghomesales
3.8
-7.5
-4.7
-7.2
-1.2
-6
Avg.existinghomeprice
7.6
5.4
0.2
-4.8
-1.9
-8
Housingstarts
E,F:Estimate,ForecastbyTDEconomicsasofApril2015.
Source:StatisticsCanada/HaverAnalytics
13.0
2004
Housingstarts(leftscale)
%Growth
2008
11.0
2010
2012
2014
2016
2004=100
Averageresaleprice(rightscale)
Forecast
250
200
10
150
PercentshareofNominalGDP
10.0
70
8.0
60
6.0
50
4.0
40
2.0
0
100
-10
50
-20
2004
2006
2008
2010
2012
2014
Source: HaverAnalytics. ForecastbyTDEconomicsasofApril2015.
April 10, 2015
10.0
NFLD & LABRADOR: FISCAL BALANCE AND NET DEBT
20
-30
2006
12.0
Source:HaverAnalytics.ForecastbyTDEconomicsasofApril2015.
NFLD & LABRADOR: HOUSING MARKET
30
15.0
2016
0
30
0.0
-2.0
-4.0
-6.0
20
BudgetBalance(leftscale)
10
NetDebt(rightscale)
00-01
02-03
04-05
06-07
08-09
10-11
12-13
14-15f
0
Source:2014FederalFiscalReferenceTablesand2014/2015GovernmentBudgets&FiscalUpdates.
14
TD Economics | www.td.com/economics
PROVINCIAL ECONOMIC FORECASTS
REAL GROSS DOMESTIC PRODUCT (GDP)
NOMINAL GROSS DOMESTIC PRODUCT (GDP)
Annualaveragepercentchange
Annualaveragepercentchange
2012
2013
2014E 2015F 2016F
2012
2013
CANADA
1.9
2.0
2.5
1.9
2.2
CANADA
3.5
3.4
2014E 2015F 2016F
4.4
1.3
5.0
N. & L.
-4.5
7.2
0.4
-0.5
-1.2
N. & L.
-3.4
10.7
0.3
-7.6
3.8
P.E.I.
1.0
2.0
1.2
1.6
1.6
P.E.I.
1.9
5.0
3.0
2.3
3.4
N.S.
-0.3
0.3
1.6
2.3
2.1
N.S.
-0.4
2.4
4.0
2.9
4.4
N.B.
-0.4
-0.5
1.1
1.9
1.8
N.B.
1.1
0.5
2.6
2.8
3.9
1.5
1.0
1.5
2.2
2.0
Québec
3.4
1.5
3.6
3.2
4.2
Québec
Ontario
1.7
1.3
2.4
2.8
2.5
Ontario
3.2
2.4
4.0
3.8
4.7
Manitoba
3.3
2.2
1.9
2.4
2.1
Manitoba
6.0
3.7
4.0
3.6
4.7
Sask.
3.1
5.0
1.3
1.1
1.8
Sask.
5.7
5.5
1.1
-2.9
4.8
Alberta
4.5
3.8
4.0
0.5
1.8
Alberta
5.6
7.1
7.1
-6.6
6.5
B.C.
2.4
1.9
2.5
2.7
2.5
B.C.
2.3
3.2
4.2
3.5
4.6
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
Source:StatisticsCanada/HaverAnalytics
Source:StatisticsCanada/HaverAnalytics
EMPLOYMENT
UNEMPLOYMENT RATE
Annualaveragepercentchange
Annual,percent
2012
2013
2014
2015F 2016F
CANADA
1.3
1.5
0.6
0.8
0.8
N. & L.
3.8
0.8
-1.7
-0.8
-0.6
2012
2013
2014
CANADA
7.3
7.1
6.9
2015F 2016F
6.8
6.8
N. & L.
12.3
11.6
11.9
12.5
12.8
10.4
P.E.I.
1.5
1.5
-0.1
0.6
0.7
P.E.I.
11.2
11.6
10.6
10.5
N.S.
1.0
-1.1
-1.1
1.1
0.7
N.S.
9.1
9.1
9.0
8.8
8.9
N.B.
-0.7
0.4
-0.2
0.2
0.6
N.B.
10.2
10.3
9.9
9.8
9.8
Québec
0.8
1.4
0.0
0.7
0.6
Québec
7.7
7.6
7.7
7.6
7.5
Ontario
0.7
1.8
0.8
1.0
1.0
Ontario
7.9
7.6
7.3
6.9
6.7
5.4
Manitoba
1.6
0.7
0.1
1.2
0.7
Manitoba
5.3
5.4
5.4
5.3
Sask.
2.4
3.1
1.0
0.1
0.8
Sask.
4.7
4.1
3.8
4.9
5.0
Alberta
3.5
2.5
2.2
0.5
0.8
Alberta
4.6
4.6
4.7
5.6
5.9
B.C.
1.6
0.1
0.6
1.0
1.0
B.C.
6.8
6.6
6.1
6.0
6.0
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
Source:StatisticsCanada/HaverAnalytics
Source:StatisticsCanada/HaverAnalytics
CONSUMER PRICE INDEX (CPI)
RETAIL TRADE
Annualaveragepercentchange
Annualaveragepercentchange
2012
2013
2014
2012
2013
CANADA
1.5
0.9
1.9
2015F 2016F
0.4
2.1
CANADA
2.5
3.2
2014 2015F 2016F
4.7
2.2
3.7
N. & L.
2.1
1.7
1.9
0.0
1.8
N. & L.
4.5
5.0
3.5
-0.7
1.1
P.E.I.
2.0
2.0
1.6
0.1
1.9
P.E.I.
3.2
0.8
3.0
2.8
3.3
N.S.
2.0
1.2
1.7
0.7
2.1
N.S.
1.0
2.9
2.2
2.1
3.9
N.B.
1.7
0.8
1.5
0.5
1.9
N.B.
-0.7
0.7
3.7
2.6
3.6
Québec
2.1
0.7
1.4
0.7
2.0
Québec
1.2
2.5
2.6
2.3
3.8
4.0
Ontario
1.4
1.0
2.3
0.7
2.2
Ontario
1.6
2.3
4.8
3.6
Manitoba
1.6
2.2
1.8
0.7
2.1
Manitoba
1.3
3.9
3.9
2.9
3.7
Sask.
1.6
1.5
2.4
0.5
2.0
Sask.
7.4
5.1
4.5
0.7
3.1
Alberta
1.1
1.4
2.6
0.4
2.0
Alberta
7.0
6.9
7.7
-0.9
3.4
B.C.
1.1
-0.1
1.0
0.6
2.1
B.C.
1.9
2.4
5.8
3.6
3.8
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
E|F:Estimate,ForecastbyTDEconomicsasatApril2015.
Source:StatisticsCanada/HaverAnalytics
Source:StatisticsCanada/HaverAnalytics
April 10, 2015
15
TD Economics | www.td.com/economics
HOUSING STARTS
HOUSING STARTS
Thousandsofunits
2012
CANADA
2013
Percentchange
2014 2015F 2016F
2014 2015F 2016F
10.8
-12.5
0.6
-6.3
2.4
N. & L.
11.4
-26.3
-21.6
-2.0
8.0
0.6
0.6
P.E.I.
0.3
-33.2
-19.0
6.6
5.5
3.8
3.9
N.S.
-2.2
-14.4
-21.8
24.4
1.3
14.2
187.9
189.0
177.0
176.9
N. & L.
3.9
2.9
2.2
2.2
P.E.I.
1.0
0.6
0.5
N.S.
4.6
3.9
3.1
-0.1
3.3
2.8
2.3
3.0
3.4
N.B.
-0.3
-13.4
-18.7
30.7
Québec
47.2
37.6
39.1
37.7
38.2
Québec
-2.3
-20.3
3.8
-3.5
1.2
Ontario
77.4
60.9
58.4
57.4
57.3
Ontario
14.2
-21.4
-4.0
-1.8
-0.2
22.4
Manitoba
7.3
7.5
6.2
4.9
6.0
Manitoba
21.3
2.6
-17.4
-20.9
Sask.
10.0
8.3
8.3
7.4
7.0
Sask.
42.6
-17.1
0.8
-11.2
-5.1
Alberta
33.3
36.1
40.6
33.5
32.3
Alberta
30.4
8.2
12.6
-17.4
-3.6
B.C.
27.5
27.1
28.3
26.6
25.9
4.4
-1.5
4.6
-6.0
-2.6
B.C.
F:ForecastbyTDEconomicsasatApril2015.
F:ForecastbyTDEconomicsasatApril2015.
Source:CMHC/HaverAnalytics
Source:CMHC/HaverAnalytics
EXISTING HOME SALES
EXISTING HOME SALES
Thousandsofunits
2012
CANADA
N. & L.
2013
Percentchange
2014 2015F 2016F
454.3
457.6
481.2
468.7
473.7
4.7
4.3
4.1
3.8
3.8
2012
2013
CANADA
-1.2
0.7
2014 2015F 2016F
5.1
-2.6
1.1
N. & L.
3.8
-7.5
-4.7
-7.2
-1.2
P.E.I.
1.6
1.4
1.4
1.5
1.5
P.E.I.
6.1
-11.7
-3.2
5.9
1.8
N.S.
10.4
9.2
8.8
8.6
8.7
N.S.
1.3
-12.4
-3.6
-2.7
1.0
N.B.
-3.0
N.B.
6.4
6.3
6.3
5.4
5.2
-3.0
-1.9
-0.1
-14.6
Québec
77.4
71.2
70.7
71.4
73.0
Québec
0.3
-8.0
-0.7
1.0
2.3
Ontario
197.6
198.5
206.0
211.1
212.6
Ontario
-1.9
0.5
3.7
2.5
0.7
Manitoba
13.9
13.7
13.8
13.5
13.8
Manitoba
0.2
-1.2
0.3
-1.9
1.7
Sask.
13.9
13.5
13.9
11.1
11.4
Sask.
Alberta
60.4
66.1
71.8
48.3
47.3
Alberta
B.C.
67.6
72.9
84.0
94.2
96.6
B.C.
5.7
-2.4
2.5
-19.9
2.6
12.3
9.5
8.6
-32.8
-2.0
-11.8
7.8
15.2
12.0
2.5
F:ForecastbyTDEconomicsasatApril2015.
F:ForecastbyTDEconomicsasatApril2015.
Source:CanadianRealEstateAssociation
Source:CanadianRealEstateAssociation
AVERAGE EXISTING HOME PRICE
AVERAGE EXISTING HOME PRICE
ThousandsofC$
2012
CANADA
April 10, 2015
2013
CANADA
214.8
N.B.
2012
361.5
2013
381.7
Percentchange
2014 2015F 2016F
407.0
422.0
425.5
CANADA
2012
2013
0.3
5.6
2014 2015F 2016F
6.6
3.7
0.8
-1.9
N. & L.
269.2
283.7
284.3
270.7
265.6
N. & L.
7.6
5.4
0.2
-4.8
P.E.I.
152.7
155.1
165.1
164.3
166.5
P.E.I.
3.7
1.6
6.4
-0.5
1.4
N.S.
218.2
216.3
213.7
213.9
215.5
N.S.
2.8
-0.9
-1.2
0.1
0.8
N.B.
159.4
161.4
161.1
162.2
162.9
N.B.
0.2
1.3
-0.2
0.7
0.4
Québec
264.6
267.7
271.4
272.2
276.5
Québec
4.1
1.2
1.4
0.3
1.6
Ontario
381.3
400.7
428.6
446.7
455.5
Ontario
5.0
5.1
7.0
4.2
2.0
Manitoba
246.6
260.7
264.7
260.6
258.0
Manitoba
4.9
5.7
1.5
-1.6
-1.0
Sask.
275.2
287.5
297.9
290.1
288.9
Sask.
6.4
4.5
3.6
-2.6
-0.4
Alberta
362.0
380.2
399.8
371.1
365.1
Alberta
2.6
5.0
5.2
-7.2
-1.6
B.C.
512.9
537.6
570.2
598.5
594.9
-7.9
4.8
6.1
5.0
-0.6
B.C.
F:ForecastbyTDEconomicsasatApril2015.
F:ForecastbyTDEconomicsasatApril2015.
Source:CanadianRealEstateAssociation
Source:CanadianRealEstateAssociation
16
TD Economics | www.td.com/economics
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April 10, 2015
17