According to forecasts by CIBC economists, Ontario , Quebec and BC will face the strongest economic resistance next year and 2024. High household debt, real estate recession and tight labor conditions will put the three provinces in Canada with the largest population.
CIBC believes that after the 3.1% growth in 2022, the national real GDP growth will slow to 0.6% next year. Ontario's economic growth forecast for 2023 is the weakest among all provinces, with growing by only 0.3% year-on-year. Saskatchewan is predicted to be the strongest – 1.6%. "The Canadian economy is currently facing a lot of headwinds, however, not all provinces will be affected equally," they said for Ontario, 2022 should have shown higher-average growth, as the impact of supply chain problems caused by the epidemic on key sectors, including the automotive industry, has weakened. However, the rapidly rising interest rates are now affecting the massive housing loans in Ontario, pushing up borrowing costs for high-debt households. The situation in
BC is also very similar, and economists have also noticed that while interest rates rise, home sales and prices are also "rapid adjustments". "Collections have grown over the years because of rising housing prices, and households in BC and Ontario have been burdened with higher debt levels and pay the most interest to repay their debts," wrote Grantham and Charbonneau. "As the interest rates for revolving debts are now rising, and the term debt that is about to expire must be refinancing at higher rates, families in these provinces will find their ability to spend on other projects being particularly severely squeezed," said
. The labor markets in all provinces have tightened compared to what was happening three years ago, with Quebec ranked first. The Atlantic Province is considered to have the most favorable conditions, partly because of the high proportion of seasonal work.
The bank expects the strongest real GDP growth to come from resource-rich Alberta and Saskatchewan, partly due to the rise in global oil and gas prices in Ukraine.
CIBC said the Atlantic provinces continue to benefit from large population inflows, and many people have moved to other provinces because they cannot afford housing in Ontario and British Columbia. "This trend started during the pandemic and showed no signs of slowing down," wrote Grantham and Charbonneau. "The change in working from home has provided options for many people across the country who are no longer tied to somewhere because of their work." "
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