While provincial economies have remained resilient this year, the ongoing trade war continues to suppress business confidence, slow investment and constrain economic growth, according to new research from The Conference Board of Canada.
“In addition to the uncertainty brought by U.S. trade policy, demographics will also be a key factor in shaping provincial growth prospects,” said Richard Forbes, Principal Economist at The Conference Board of Canada. “Reduced immigration targets have led to a sharp slowdown in population growth, which will restrain labour markets and moderate consumer spending.”
Richard Forbes
The report said Newfoundland and Labrador will face the steepest demographic slowdown among the provinces, but a strong rebound in oil production will support growth. The province is expected to lead the country in 2025, with GDP forecast to increase by 2.2 per cent, followed by a 1.7 per cent gain in 2026.
Alongside moderate gains in household spending, elevated investment in potash and uranium mining will support Saskatchewan’s economy over the next few years. The provincial economy is expected to grow by 2.0 per cent in 2025 and 2.1 per cent in 2026, said the report.
While business investment in Alberta is set to decline in 2025, continued activity on smaller projects will bolster investment growth into 2026. GDP is forecast to expand by 1.8 per cent in both 2025 and 2026, it said.
“Prince Edward Island is expected to post the strongest population growth of the Atlantic provinces. Tourism will remain a key economic driver as Canadians continue to favour domestic travel, while strong job gains will support household spending. Real GDP growth is projected to ease to 1.1 per cent in 2025 before strengthening to 1.5 per cent in 2026,” said the Conference Board.
“Modest population declines in Nova Scotia over the next two years are expected to slow labour force growth and temper consumer spending. Under these pressures, the province’s economy is expected to expand by 1.4 per cent in both 2025 and 2026.
“Following the completion of the Trans Mountain pipeline expansion and the transition of the LNG Canada project to operations, British Columbia is expected to post a significant decline in business investment this year. Still, strong income growth will help compensate for population declines and a stagnant labour market, supporting steady near-term growth. GDP is set to expand by 1.2 per cent in 2025 and 1.7 per cent in 2026.”
It said Manitoba’s labour market. However, U.S. trade measures and Chinese tariffs on Canadian canola oil will limit the province’s overall growth prospects. GDP is projected to increase by 0.8 per cent in 2025 and a further 1.4 per cent in 2026.
A lack of major non-residential projects is hurting growth prospects in New Brunswick. Weak consumer spending, driven by a declining population 2026 and 2027, will also weigh on the province’s economy. GDP growth is forecast to be just 0.8 per cent in 2025, before rebounding by 1.3 per cent in 2026, added the report.
“The ongoing trade tariffs are weighing heavily on Ontario’s labour market, particularly in manufacturing and construction, while slower economic growth in the U.S. will also weaken the province’s export performance. Ontario’s economy is forecast to grow by 0.7 per cent in 2025, followed 0.9 per cent in 2026,” said the Conference Board.
“Household spending in Quebec is expected to remain resilient, supported by relatively high savings accumulated in recent years. However, weak business investment, aluminum tariffs, and population declines will constrain growth. Quebec’s economy is projected to grow by 0.5 per cent in 2025 and a further 0.9 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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