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Business in Vancouver

BC expected to lead in Canada’s economic growth in 2017

Bank of Montreal expects the province’s economic growth to reach double the entire country’s this year

PUBLISHED : Friday, 07 October, 2016, 10:46am
UPDATED : Friday, 07 October, 2016, 10:49am

British Columbia is set to take top spot among the Canadian provinces for economic growth both this year and next, according to a BMO Financial Group report.

The province’s economy will grow by 3.0 per cent this year, which is more than double the 1.2 per cent growth expected nationally, BMO forecasts. In 2017, BC’s economy is forecast to grow a further 2.5 per cent, compared with 2.0 per cent nationally.

“This would continue a run of stable and solid growth averaging 2.8 per cent over the past seven years,” BMO said in the report. “The province’s resource base is much more diverse (natural gas, base metals, forestry and little direct exposure to oil), housing has been roaring, while the combination of sturdy US demand and a weaker Canadian dollar are a net positive for exports and tourism.”

The report points out that because BC is Canada’s biggest trading partner with Asia, slowing growth in China would hit this province the hardest.

The recently introduced foreign buyers tax is working to soften home sales, especially in the high-end sector, said Robert Kavcic, BMO senior economist.

“On the supply side, housing starts have broken out of the stable range led by a record number of multi-units,” Kavcic said. “Some budding signs of speculation recently, plus this coming wave of condo supply, could be a risk to watch in the year or two ahead.”

BMO forecasts further economic contraction in Alberta in 2016, with GDP shrinking 2.3 per cent this year after decreasing 4.0 per cent in 2015. Next year will see a return to growth for the province, with a 2.3 per cent increase in the cards, according to the report.