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BMO Blue Book: Canadian economy proves resilient amidst continued challenges
  • The BMO Blue Book combines expertise of BMO's economists with information on business conditions from its bankers
  • This edition emphasizes the impacts of high inflation and the corresponding effects across the economy in Canada and six key business sectors
  • Real GDP likely to expand 3.5 per cent this year

TORONTO, April 6, 2022 /CNW/ - As Canadians are adapting to the "new normal", consumers and organizations are faced with new challenges from rising inflation and interest rates, geopolitical risks, supply chain distributions to commodity price fluctuations. According to the newly-released BMO Blue Book, despite the uncertain times, the economy has continued to show resiliency reflected by strong balance sheets, high household savings, inventory re-stocking and an interest rate environment that remains relatively low. 

The BMO Blue Book is published jointly by BMO's Economics Department and its Canadian Commercial Banking Business. It combines the expertise of BMO's economists with that of its commercial bankers to provide an outlook for the economy in Canada and each province, along with a view on key business sectors: technology & innovation, agriculture, real estate finance, automotive, hospitality and transportation. This edition specifically emphasizes the impacts of inflation given its recent increase and the corresponding effects across the economy.

"The Canadian economy is growing at a strong pace, with most industries and segments of the job market fully recovered from the pandemic, and the Bank of Canada now tightening policy," said Doug Porter, Chief Economist, BMO Financial Group. "Real GDP is likely to expand 3.5 per cent this year, cooling from the 4.6 per cent pace in 2021, but still running well above potential growth. In the meantime, with inflation proving to be persistent and meaningfully above the Bank of Canada's target, look for a further steady stream of interest rate hikes into 2023."

"Consumers and businesses, from smaller and scaling organizations to large corporations, continue to contend with one of the most challenging times in recent history," said Nadim Hirji, Co-Head, Canadian Commercial Banking, BMO Financial Group. "The BMO Blue Book represents another part of our effort to provide specialized content and resources to help our business clients navigate these uncertain times."

"Together with our industry specialization, sector expertise and innovative resources like the BMO Blue Book, we continue to develop ways to support our clients' individual needs," said Christine Cooper, Co-Head, Canadian Commercial Banking, BMO Financial Group. "We have an on the ground view of what the outlook looks like, helping our clients dig into recovery related insights across some of the largest sectors driving the Canadian economy."

The BMO Blue Book covers key sectors, as follows:

Technology and Innovation:

  • Some tech companies are embracing a return to the office. This unexpected changing of the narrative has seen businesses push for culture and collaboration—traits they feel are best established in an office setting.
  • Demand for tech employees remains high, so while offices are opening up, flexibility remains key to attracting and retaining talent.


  • While consumers are feeling the prices at the grocery store, Canadian production agriculture is feeling the pressure as costs to grow, produce and supply our food continue to escalate.
  • Supply chains are still catching up after two years of serious disruption due to the pandemic. As the world emerges from lockdown, demand for virtually everything has surged and the cost to move goods is extremely high.

Real Estate:

  • Canada's housing market has shown incredible strength through the COVID-19 pandemic, and we see a continuation of that even with the advent of higher interest rates.
  • We see strong and growing tailwinds to help offset the interest rate headwinds.


  • Successfully navigating the recovery over the last two years can be attributed to a combination of patient and knowledgeable lenders, strong government support programs and the hospitality industry adjusting how they deliver their services in a highly efficient manner to adjust to current economic realities.
  • Higher inflation, and the corresponding higher interest rates, is affecting these businesses. Decisions are being driven by this new environment, affecting both the level of debt afforded by business and decisions relating to the type and term of interest rates associated with their debt.


  • Strong demand for freight coupled with constrained global supply chains, including freight carrying capacity, provide a positive fundamental pricing backdrop for the trucking industry at the outset of 2022.
  • Skyrocketing prices for oil, nickel, aluminum, copper, wheat, etc., coupled with a likely shift in global sourcing of these commodities away from Russia/Ukraine, will be a strong incentive for increased production in those sectors.


  • One interesting factor in the industry is inflation. It's happening with both new and used cars. The mismatch between supply and demand has led to price increases in both areas—used cars are now selling at historical highs.
  • Dealers are also keeping an eye on the effect of higher interest rates on auto purchases. Even with recent increases, rates are still near historic lows, so pullbacks by consumers are really just a question of perception instead of reality.

The BMO Blue Book also provides an outlook for each Canadian province:

Western Canada:

  • The B.C. economy is expected to grow 3.8% this year, slightly ahead of the 3.5% rate estimated for all of Canada. The provincial economy has navigated some massive shocks relatively well, including the pandemic and floods.
  • The Alberta economy is expected to lead the country with 5.0% growth this year, as the surge in oil prices reinvigorates consumer and business confidence.


  • The Saskatchewan economy will likely grow a solid 3.8% this year, creeping back above the national average after underperforming in seven of the past eight years.
  • The Manitoba economy is expected to grow 3.3% this year, just behind the national increase, but only after a relatively weaker performance in 2021. It remains a stable province, with exposure to many industries but no excessive weight in any one sector.

Central Canada:

  • Ontario's economy is expected to post 3.4% growth this year, a shade below the national average and softening after a 4.4% bounce in 2021. Early-year COVID-related restrictions again disrupted the recovery, but the impacts were temporary and proved to be less significant than in prior waves.
  • The Quebec economy likely posted robust 6.2% growth last year, potentially leading the country out of the pandemic. Growth is expected to slow to a more modest 2.9% this year, but that would remain well above potential for the province.

Atlantic Canada:

  • Atlantic Canada is faring well, with growth in the region expected to run above potential this year. As travel flows resume more significantly for the summer 2022 season, the region will stand to benefit. Population flows are also a very positive story, as migration from other regions of Canada is driving consumer demand and housing.

The full BMO Blue Book can be viewed and downloaded here:

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $1.02 trillion as of January 31, 2022, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group

For further information: For Media Inquiries: Kate Simandl, Toronto,, (416) 867-3996; Peter Scott, Toronto,, (416) 867-3996