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The West should continue to ride high, growth in Atlantic Canada will remain sturdy, while Central Canada faces a challenging year, according to a provincial economics report released today by BMO Financial Group.

“Most provinces will see slower growth this year, but Ontario and Quebec will face the brunt of the weakness as higher energy costs, a strong Canadian dollar and a likely U.S. recession drag GDP growth in these provinces below 1 per cent,” said Douglas Porter, Deputy Chief Economist, BMO Capital Markets.

Highlights of the report include:

• The West should continue to ride high alongside strong commodity prices, with all provinces west of Ontario likely posting GDP growth of at least 3 per cent in 2007, and much of the strength carrying over into this year.
• With higher royalties in the energy sector and a cooling housing market, the fireworks of the past few years seen in Alberta are fading. Picking up the slack is Saskatchewan, where growth likely hit 4.9 per cent in 2007 amid surging potash and uranium sectors and a white-hot housing market.
• Newfoundland and Labrador likely unseated Alberta as the country's growth leader in 2007 as output at the province's three major offshore oil projects rebounded.
• All provinces are projecting zero balances or surpluses for fiscal 2007/2008, except PEI. All told, the combined 10-province surplus is now pegged at $7.7 billion for fiscal 2007/2008, down from $16.1 billion in the prior year.

The complete report can be found at www.bmocm.com/economics.

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