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BMO's Banking on Main Street: Businesses Who Innovate Are Best Positioned to Navigate Economic Uncertainty
  • Banking on Main Street combines expertise of BMO Economics with BMO bankers' insights on business conditions

TORONTO, Oct. 20, 2022 /CNW/ - Despite the Canadian economy slowing, and a possible downturn into 2023, many of Canada's businesses have put the worst of the COVID-19 pandemic period behind them and have an opportunity to bring innovation to the fore to continue their success, according to this year's Banking on Main Street from BMO Economics and BMO Business Banking.

The annual publication combines the expertise of BMO Economics with the insights of BMO's business bankers. It features a national economic report for Canada and province-by-province outlooks.

"Stubborn inflation readings will force further tightening by the Bank of Canada through the remainder of 2022, and the combination will likely dent consumer spending, housing and business confidence," said Doug Porter, Chief Economist, BMO. "Real GDP growth is expected to slow to zero next year after 3.2% growth in 2022, with risk of a downturn most acute around the turn of the year."

"As we have moved through 2022, our business clients have been navigating uncertainty, but for many businesses, the worst is behind them. We're clearly in a new way of working, and those businesses that have committed to exceptional service and quality products, along with innovation and intelligent expenditure management, tend to outperform in the market," said Mike Bonner, Head of Canadian Business Banking, BMO. "Considering the current environment, characterized by rising inflation, higher interest rates and tight labour markets, it has never been more important for business owners to actively review their operations, assess the competitive landscape and consumer trends, and take action to evolve."

Provincial forecasts at a glance:

Western Canada:

  • British Columbia is expected to grow 3.0% this year, slightly below the national average, but a dip into negative territory is likely in 2023. The weakness follows a strong outperformance coming out of the worst of the pandemic in 2021, when the province grew by more than 6%. BC businesses are moving into a new normal of higher inflation and growing borrowing costs with concern, but cautious optimism.
  • The Alberta economy is expected to outperform the country with 4.3% growth this year and hold up relatively well as the slowdown grips most of Canada into 2023. Meanwhile, businesses say that Alberta is back – confidence has returned in a broad array of sectors.


  • The Saskatchewan economy will likely grow a strong 5.5% this year, leading the country after underperforming in seven of the past eight years. The resource sector represents a vital area of good news; energy prices have risen, providing benefits for the oil and gas industry in the south of the province. Agriculture is also poised to rebound after very challenging conditions in 2021 cut output. The resource sector has regained strength alongside higher oil and potash prices.
  • Manitoba is expected to grow 4.0% this year, ahead of the national increase. Challenging crop conditions weighed heavily last year, but those look much improved for 2022. It's clear that post-pandemic demand has arrived as advertised, which benefits the province. Entrepreneurial activity is starting to pick up – on the back of a strong underlying infrastructure – and points to longer-term optimism in the province.

Central Canada:

  • Ontario's economic growth is expected to slow to 2.9% this year, below the national average as higher interest rates and a housing correction bite hard. Throughout the province, businesses are returning to pre-COVID activity levels, with some sectors experiencing the return faster than others. That said, the province faces challenges with supply chains, labour and rising costs.
  • Many GTA businesses are challenged by supply chain challenges, labour shortages, rising interest rates and inflation. Business owners are turning to their cash reserves or personal resources to fund working capital, to offset higher borrowing costs.
  • Quebec is on track for solid 3.4% growth this year, ahead of the national average. That comes in part thanks to a strong performance around the start of the year, and a less severe early decline in housing activity. Since the beginning of the year, interest rates and the looming possibility of a recession are the new areas of concerns for Quebec entrepreneurs. Combined with the shortage of qualified workers, supply chain issues and increased costs, uncertainty prevails.

Atlantic Canada:

  • The New Brunswick economy is expected to grow 1.8% this year, softer than the national average; that said, the pandemic contraction was also much milder than most other regions, so there has been less ground to make up. As one of the country's most important hubs, transportation has been an historic strength for New Brunswick. The industry continued to do well throughout the pandemic and the reopening of economies across the country will lead to even further activity. Players in this space can feel optimistic.
  • Nova Scotia is expected to grow 1.6% this year, cooling from a strong 5.8% surge last year, with the impact of Hurricane Fiona weighing, but still uncertain. Key sectors have showed strength for businesses, particularly tourism with some record passenger totals at Halifax's airport in the summer.
  • The PEI economy will likely expand 1.5% this year, weighed down by the impact of Hurricane Fiona. Rebuilding efforts should boost activity next year and, while the impact is still uncertain, 1.3% growth is expected. PEI businesses are seeing a mixed situation, with some industries affected more than others by the current broader situation with inflation, interest rates and supply chains. On the positive side, PEI is benefiting from a resurgence in tourism.
  • Newfoundland & Labrador can expect to see little real GDP growth this year given some outages in the energy sector and the impact of Hurricane Fiona. However, incomes are getting a boost from surging oil prices, and rebuilding efforts will add to activity into 2023. With the reopening of economies across the country but more Canadians choosing to stay in country for their vacations, the province is receiving more travelers from across the country.

To view the full report, visit:

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 $1.07 trillion as of July 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.

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SOURCE BMO Financial Group

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