Provincial and territorial economic accounts

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Economic growth in Western Canada outpaced the national average in 2005, while activity east of the Manitoba-Ontario border waned.

Nationally, real gross domestic product (GDP) sat at 2.9% in 2005, just off its 2004 pace (+3.3%). High natural resource prices, good growing conditions and strong foreign demand bolstered output in Manitoba, Saskatchewan, Alberta and British Columbia.

Alberta led the provinces for the second consecutive year, increasing 4.6% in 2005. Strong oil prices and foreign demand triggered the growth that rippled throughout Alberta's economy. Activity in the energy sector stimulated demand for related machinery and equipment from manufacturers in Saskatchewan and Alberta. Meanwhile, the influx of workers increased demand for services.

In Atlantic Canada, Quebec and Ontario, strong labour income boosted consumer demand and kept residential construction at or near historic highs. In Quebec and Ontario, this growth was tempered by a manufacturing sector which was hit by rising fuel costs and increased foreign competition.

In Newfoundland and Labrador, production problems on the Terra Nova and Hibernia oil platforms stalled growth for the second year in a row.

Growth rates for real GDP in the provinces and territories have been revised from 2002 to 2005. Overall, the picture of economic growth remained the same, but 2005 growth rates were revised up in five jurisdictions: Prince Edward Island, Nova Scotia, Alberta, British Columbia and the Yukon. Growth in Newfoundland and Labrador, Quebec, Ontario and Manitoba remained unchanged. Rates for New Brunswick, Saskatchewan, the Northwest Territories and Nunavut were revised down.

Four-year snapshot: Growth shifts from east to west

Between 2002 and 2005, Canada's economy increased at an annual average rate of 2.7%. The shift in the source of this growth is notable. In 2002, much of the growth was driven by investment and manufacturing in the eastern half of the country.

In 2003 to 2005, as energy and other commodity prices began to increase, the stimulus for national growth shifted west. The oil-patch in Alberta, Saskatchewan's wheat fields and mines and British Columbia's forests all profited from increased export demand and provided the impetus for Canada's growth.

Commodity prices stimulate growth in Western Canada

Saskatchewan, Alberta and British Columbia all realized output increases at or above the Canadian average for the last three years.

In Alberta, the surge in oil prices of the last two years has led to heightened activity in the oil-patch. As oil prices rose in 2004 and 2005, the development of the oil sands in northern Alberta hit its stride and brought with it new workers, increased labour income, new demand for housing and increased demand for oil-patch related machinery and equipment. The influx of workers strained the infrastructure of the province, and construction of homes and other buildings soared.

Growth in Saskatchewan was broad based. Strong foreign demand contributed to higher exports of potash and fertilizer. As well, crop production recovered from a drought plagued 2002. Saskatchewan's oil-patch, albeit much smaller than Alberta's, struggled in volume terms, but the healthy prices ensured ongoing profitability and corporate profits grew apace.

British Columbia, meanwhile, rode the tide of heightened residential construction in North American markets and supplied wood products for Canadian and US home builders alike. Forestry growth was particularly acute in 2004, as the industry attempted to get timber to market ahead of a pine beetle infestation. Investment growth was strong with home building experiencing double digit growth in three of the last four years.

Manitoba has lagged behind the western provinces, almost reaching the Canadian average in 2005, when a combination of strong employment and high electricity exports lifted output.

Manufacturing heartland squeezed

The same commodity prices that benefited Western Canada hampered production in Quebec and Ontario. Their export driven economies felt the pinch of a rising Canadian dollar and the impact of higher fuel costs. Manufacturing fell in 2002 and 2003 in Quebec, and in 2003 and 2005 in Ontario.

There were bright spots with Quebec's aerospace industry partly recovering from the impact of the terrorist attacks of September 11, 2001. Demand for the cars and trucks being produced by Ontario remained strong, but overall both provinces lagged behind the national average for the last three years.

Economic activity in Eastern Canada slows

In Atlantic Canada, the oil and gas sector in Newfoundland and Labrador and Nova Scotia brought economic growth to both provinces in 2002. However, more recently, the Terra Nova and Hibernia platforms in Newfoundland and Labrador have had their share of mechanical difficulties. Overall economic growth in the province has stalled at 2003 levels.

In Nova Scotia, natural gas production gave a lift to 2002, but the economy has not managed to meet the Canada growth rate since then.

In Prince Edward Island, once an agricultural economy, food processing and aerospace have now taken an increasingly important role, adding to labour income and exports and pushing average growth over the four year period to 2.8%, just ahead of the Canada average.

New Brunswick, still heavily reliant on forestry and downstream wood and paper products, has more recently benefited from infrastructure improvements and has seen advances in petroleum refining and transportation. New Brunswick fell behind the Canada average with a four year average of 2.4%.

Territorial results mixed

Northern Canada has profited greatly from its resources over the last few years. In the Northwest Territories, diamond mining now accounts for approximately half of territorial output and has boosted its four year average growth to more than triple Canada's.

In the Yukon, government expenditures account for almost half the territorial GDP. Infrastructure investment has helped bolster the territory, and exploration of resource assets continues. Growth in Nunavut has averaged 0.9% over the last four years, but a new diamond mine augers well for 2006.

Products, services and contact information

Detailed analysis and tables

All of Statistics Canada's information and data on the System of National Economic Accounts are available through the National Economic Accounts module of our website.

More detailed analysis on today's releases from the national accounts, including additional charts and tables, can be found in the 2005 estimates issue of Provincial and Territorial Economic Accounts Review, Vol. 2, no. 2 (13-016-XIE), now available online. From the Publications page, choose Free internet publications, then National accounts.

Provincial economic accounts, 2002 to 2005

Available on CANSIM: tables 384-0001, 384-0002, 384-0004 to 384-0013 and 384-0036.

Definitions, data sources and methods: survey numbers, including related surveys, 1303, 1401, 1402 and 1902.

Revised provincial and territorial economic accounts estimates for 2002, 2003 and 2004 are included with this release. Updated estimates of the preliminary 2005 data that were released on April 26, 2006 are also included.

The provincial and territorial economic accounts includes estimates of the income and the expenditure based gross domestic product, real GDP, contributions to percent change in real GDP, implicit price indexes, sources and disposition of personal income and government detail tables. The government detail tables include revised revenue and expenditure data for 2002 and 2003 based on public accounts and new estimates for 2004.

Summaries by sub-sector of government (federal, provincial, local, Canadian Pension Plan and Quebec Pension Plan) are provided in tables 6 to 10. Revenue side details are presented in tables 11 to 13. Table 11 disaggregates direct taxes, social insurance contributions and transfers paid by persons to government. Table 12 presents the components of taxes on production and products, while Table 13 lists the sources of government investment income. On the expenditure side, the major transfers to persons are presented in Table 14 while subsidies and capital transfers, to both the personal and business sectors, can be found in Table 15. Finally, Table 16 lists the most important current transfers between levels of governments.

Provincial Economic Accounts, Tables and Analytical Document, 2005 (13-213-PPB, $54) is now available. The accounts can also be obtained on diskette (13-213-DDB, $428). The diskette can also be purchased at a lower cost seven business days after the official release date (13-213-XDB, $86). To purchase any of these products, contact the client services officer (613-951-3810; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.

For more information, or to enquire about the concepts, methods or data quality of this release, contact the information officer (613-951-3640; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.

Provincial gross domestic product by industry

Available on CANSIM: table 379-0025.

To purchase data on provincial gross domestic product by industry at basic prices, contact the client services officer (toll-free 1-800-887-4623; iad-info-dci @statcan.gc.ca), Industry Accounts Division.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Bruce Cooke (613-951-9061; cookeb@statcan.gc.ca), Industry Accounts Division.

Input-output tables

Available on CANSIM: tables 379-0023, 379-0024, 381-0009 to 381-0014 and 386-0002.

Provincial Gross Domestic Product by Industry and Sector at Basic Price (15-209-XCB, $535) and Provincial Gross Output by Industry and Sector (15-210-XCB, $535) are now available. To purchase either of these new products, contact the client services officer (toll-free 1-800-877-4623; iad-info-dci@statcan.gc.ca), Industry Accounts Division.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Ronald Rioux (613-951-3697; riouxr@statcan.gc.ca), Industry Accounts Division.

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