Provincial Outlook: A Housing vs. Commodities Rematch in 2024

Our core view has not changed: the Canadian provinces most exposed to housing and other interest-rate-sensitive sectors will feel the coming economic downturn most acutely, whereas commodity producers will be less vulnerable. We think this contrast will become starker in 2024.

We also still think almost all regions of Canada will experience slowdowns in 2024 in response to sharply higher borrowing costs and weaker expansions among our trading partners. Later this year, rate cuts should help the economy rebound.

Following an oil sands maintenance period last year, the strong late-2023 handoff for crude production should support economic growth in Alberta in 2024.

The fiscal environment has become more challenging in several provinces, but fiscal policy could be more stimulative than previously anticipated this year.

Amid decades-high population growth, it’s become clearer that declining GDP per capita—and by extension a lower standard of living—is a problem across the provinces. Outside Quebec, Ontario and BC, the downward trend in per-person output during the last several years is particularly striking.