Although inflation has improved and monetary policy has become less restrictive, growth prospects for the provinces have been significantly weighed down by trade disruption, according to new research from The Conference Board of Canada.
“While consumers are benefiting from lower inflation and eased borrowing costs, consumer confidence has been at record lows this year,” said Richard Forbes, Principal Economist at The Conference Board of Canada. “Similarly, despite tariffs being paused or scaled back by the U.S. administration, business confidence has decreased and will take time to recover.”
Here’s a brief outlook by the Board for each of the provinces:
Alberta’s economy remains vulnerable to resource-driven uncertainty and will see a small decline in business investment this year, primarily due to lower oil prices. However, the province is expected to see strong gains in employment, helping real GDP to increase 1.4 per cent in 2025 and a further 2.2 per cent in 2026.
Saskatchewan is highly exposed to Chinese tariffs hitting the agricultural sector, though the medium-term outlook for the province is supported by potash and uranium mining. Economic growth is expected to slow to 1.4 per cent in 2025 and a further 2.4 per cent in 2026.
Newfoundland and Labrador’s export sector will contribute to growth thanks to rising oil output. However, it will be the only province to see a decline in employment, largely due to a weak demographic outlook. Real GDP is forecast to increase 1.2 per cent in 2025 and a further 1.6 per cent in 2026.
British Columbia is expected to see strong gains in consumer spending supported by strengthening interprovincial migration, which will provide a partial counterbalance to weaker international migration. Real GDP in the province is anticipated to grow by 1.1 per cent in 2025 and an additional 1.7 per cent in 2026.
Manitoba is expected to see continued population and employment growth in the coming years. This, along with a drought-free agricultural season and a healthy construction sector could offset weakness in other sectors. Real GDP is expected to increase 1.1 per cent in 2025 and a further 1.9 per cent in 2026.
Nova Scotia will be negatively impacted by slower international migration, which coupled with a limited inventory of major projects will limit real GDP growth to 1.0 per cent in 2025 before increasing a further 1.4 per cent in 2026.
Ontario’s economy is heavily exposed to tariffs on auto and steel manufacturers. It will, however, be one of the few provinces that sees growth in residential investment. Real GDP is expected to increase by 0.8 per cent in 2025 and an additional 2.1 per cent in 2026.
Prince Edward Island is anticipated to lead the country in employment growth and will see strong housing investment. Real GDP will grow by 0.7 per cent in 2025 and an additional 1.7 per cent in 2026.
Investment growth in New Brunswick is expected to remain weak in the coming years, while the province will also see a contraction in population, in large part due to cuts in permanent and temporary immigration streams. Real GDP is expected to grow just 0.6 per cent this year, before increasing an additional 1.4 per cent in 2026.
Hampered by weak business investment, aluminum tariffs and unfavourable demographics, Quebec’s economy is forecast to grow by just 0.6 per cent in 2025 and a further 1.6 per cent in 2026.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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