|Subject: Alta. poised to overtake Que. as No. 2 economy
|Alta. poised to overtake Que. as No. 2 economy
CanWest News Service; Calgary Herald
Friday, October 20, 2006
CALGARY - The breakneck pace of growth in Alberta has the province´s economy on track to exceed that of Quebec within as few as two years, becoming Canada´s second largest provincial economy.
That´s the conclusion of a trio of senior economists, including Statistics Canada´s chief of current analysis Philip Cross, who noted Thursday that Alberta´s double-digit growth in nominal output, or nominal GDP, is running at a rate four times faster than Quebec.
Last year, Alberta´s economy was $215 billion, while Quebec´s was $275 billion. Ontario´s was $538 billion.
´´It´s closing fast on Quebec, frankly,´´ Cross said of Alberta´s economy.
´´At current rates of growth it should take about three years Eand it´s conceivable in two. That´s what double-digit growth will do and growth is substantially accelerating this year.´´
Cross calculated that at current rates Alberta´s economy will grow to $329 million in 2008, while Quebec´s would expand to just $309 billion. In 2007, Alberta´s GDP would amount to $286 billion and Quebec´s $297 billion.
´´Alberta is just off the scale this year. It continues to be China-like,´´ said Cross.
Other experts said the pace of growth in Alberta is creating significant challenges for monetary authorities and other policy-makers who are charged with trying to keep growth in Canada reasonable and even.
In contrast to Alberta, Ontario came close to satisfying the technical requirements of a recession earlier this year.
´´It certainly would be a bit of milestone,´´ said Rick Egelton, senior vice-president and chief economist of the Bank of Montreal
´´It suggests that the Western economies, and Alberta in particular, are increasing in importance of the Canadian economy. There´s just no getting around that.
´´It poses tremendous challenge for policy-makers because you have the Bank of Canada trying to find what´s the right monetary policy for this kind of bifurcated economy.´´
Richard Corriveau, regional economist for Alberta for the Canada Mortgage and Housing Corp., said Thursday Alberta is expected to lead Canadian provinces in economic growth through 2008 and possibly in 2009.
´´We expect Alberta to lead Canadian provinces GDP growth through 2008, and with that that we´re forecasting for GDP growth in Quebec that´s comparatively weak, among the lowest of the provinces,´´ said Corriveau, based in Calgary.
´´If we maintain that No. 1 spot as economic growth leader across the country, it´s only a matter of time before we do catch and surpass Quebec.´´
Cross noted with growth rates of nominal GDP of 14 per cent in 2003, 10 per cent in 2004, 15 per cent in 2005, and a higher rate expected for 2006, Alberta is simply in a league of its own when it comes to economic expansion.
He also calculated Alberta´s share of the Prairie economy of Alberta, Manitoba and Saskatchewan has risen to 72 per cent of the total from 68 per cent in just three years.
A major driver of Alberta´s expansion has been the province´s population growth, which continues to surprise analysts and fuel growth.
´´Alberta remained a magnet for migrants from every province,´´ Cross noted.
´´Nearly 27,000 people moved there in the second quarter, matching its average for the past year, up from an average of 20,000 the year before and nearly double the number in 2003.´´
| (in reply to: Alta. poised to overtake Que. as No. 2 economy)
Alberta´s economy is supposed to tank soon due to stable and lowering oil prices. They don´t expect it to be a big recession but it´s going to hurt provincial coffers.
I thought Alberta was already ahead of Quebec. But then I looked at the population figures for the provinces - 3.1 million Alberta vs 7.5 million Quebec - and see Alberta actually is far ahead.
Quebecers like to say they have a rich province but they actually draw the most equalization payments:
Ottawa´s Equalization Estimates (figures dated October, 2003)
Province Payment per Fiscal Year ($million)
Quebec 5,412 4,525
Nova Scotia 1,328 1,190
Manitoba 1,239 1,339
New Brunswick 1,207 1,187
Newfoundland 1,101 798
Saskatchewan 237 267
British Columbia - 557
P.E.I. 256 235
Total 10,780 10,097
Source: Finance Canada