• 2024 is playing out largely as expected across Canada’s regional landscape, with most of the Prairie and Atlantic provinces leading economic growth while Ontario, B.C., and Quebec lag.
• A number of regions are capping off this year displaying moderately stronger momentum in economic growth and job creation than we had envisaged in September. However, any upgrades to 2025 provincial growth forecasts reflecting this positive hand-off have been neutralized by downside growth risks on Canada owing to the imposition of tariffs by the new U.S. administration.
• The president-elect has threatened to impose a 25% across-the-board tariff on Canadian exports. We assume that Canada will manage to avert this outcome, partly reflecting the energy-heavy nature of its exports to the U.S. Still, this regional forecast incorporates some chill to investment and hiring due to the tariff threat that is likely to linger.
• Importantly, no province would escape the fallout from a Canada/U.S. trade skirmish, with U.S. export exposure ranging from about 80-90% in Alberta, New Brunswick, and Ontario to a still-lofty 50-60% in B.C and Saskatchewan. Beyond the first-order effects from tariffs on exports, provinces would also feel the hit through damage to other trading partners. PEI, Saskatchewan, and Manitoba source a comparatively large share of their imports from the U.S., potentially leaving them exposed to inflation pressures should Canada impose tariffs of its own.
• The country’s population growth is set to stall over the next two years through planned reductions in both the pool of non-permanent residents (NPRs) and a scaling back in its annual permanent immigration targets. Ontario, B.C. and Quebec will likely see population growth pull back the fastest. Meanwhile, ongoing affordability advantages in the Prairies and some Maritime provinces will remain a lure for interprovincial migrants.
• A wave of federal government stimulus is set to reach Canadian consumers in the coming months, with Ontario set to roll out its own measure in the new year. Combined with ongoing interest rate reductions, we expect consumer spending growth to pick up across the provinces despite slower population growth. Provinces with the highest debt burdens, namely B.C., Ontario, and Alberta, should disproportionately benefit from easing conditions. Housing markets across the country are also poised to benefit from supportive federal measures, and gradually falling short-term interest rates.

https://economics.td.com/provincial-economic-forecast