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METROPOLITAN OUTLOOK 1. Economic Insights Into 13 Canadian Metropolitan Economies OUTLOOK AUTUMN 2017 For the exclusive use of Tyler Markowsky, [email protected], City of Winnipeg. Metropolitan Outlook 1: Economic Insights Into 13 Canadian Metropolitan Economies—Autumn 2017 Alan Arcand, Constantinos Bougas, Henry Diaz, Jane McIntyre, and Robin Wiebe Preface Together, Metropolitan Outlook 1 and Metropolitan Outlook 2 provide economic insights into 28 census metropolitan areas in Canada. Book 1 covers 13 census metropolitan areas: Halifax, Québec City, Montréal, Ottawa–Gatineau, Toronto, Hamilton, Winnipeg, Regina, Saskatoon, Calgary, Edmonton, Vancouver, and Victoria. Book 2 deals with 15 census metropolitan areas: St. John’s, Moncton, Saint John, Saguenay, Trois-Rivières, Sherbrooke, Kingston, Oshawa, St. Catharines–Niagara, London, Windsor, Kitchener–Cambridge–Waterloo, Greater Sudbury, Thunder Bay, and Abbotsford–Mission. These publications are available at www.conferenceboard.ca/products/reports/ metro_reports. For more information about the forecast, please contact our information specialists in the Conference Board’s Centre for Municipal Studies at 613-526-3090 ext. 444 or e-mail [email protected]. To cite this report: Arcand, Alan, Constantinos Bougas, Henry Diaz, Jane McIntyre, and Robin Wiebe. Metropolitan Outlook 1: Economic Insights Into 13 Canadian Metropolitan Economies—Autumn 2017. Ottawa: The Conference Board of Canada, 2017. ©2017 The Conference Board of Canada* Published in Canada | All rights reserved | Agreement No. 40063028 | *Incorporated as AERIC Inc. An accessible version of this document for the visually impaired is available upon request. Accessibility Officer, The Conference Board of Canada Tel.: 613-526-3280 or 1-866-711-2262 E-mail: [email protected] ®The Conference Board of Canada and the torch logo are registered trademarks of The Conference Board, Inc. Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice. The findings and conclusions of this report do not necessarily reflect the views of the external reviewers, advisors, or investors. Any errors or omissions in fact or interpretation remain the sole responsibility of The Conference Board of Canada. © The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. CONTENTS i CANADA vi CANADA (FRANÇAIS) 1 Nova Scotia 6 Halifax 16 Quebec 21 Québec City 31 Montréal 41 Québec (français) 47 Ville de Québec (français) 57 Montréal (français) 68 Ontario 73 Ottawa–Gatineau 84 Toronto 94 Hamilton 104 Manitoba 109 Winnipeg 120 Saskatchewan 125 Regina 135 Saskatoon 145 Alberta 150 Calgary 160 Edmonton 170 British Columbia 175 Vancouver 186 Victoria Appendix A 196 Cross-City Comparison Appendix B 197 User’s Guide Appendix C 206 Glossary of Economic Terms Appendix D 207 Canadian Census Metropolitan Areas For the exclusive use of Tyler Markowsky, [email protected], City of Winnipeg. Acknowledgements The articles were written by: Canada—Alan Arcand, Associate Director, Centre for Municipal Studies Canada (français)—Alan Arcand, directeur, Centre d’études municipales Nova Scotia—Jane McIntyre, Senior Economist, Centre for Municipal Studies Halifax—Jane McIntyre, Senior Economist, Centre for Municipal Studies Quebec—Henry Diaz, Economist, Centre for Municipal Studies Québec City—Henry Diaz, Economist, Centre for Municipal Studies Montréal—Henry Diaz, Economist, Centre for Municipal Studies Québec (français)—Henry Diaz, économiste, Centre d’études municipales Ville de Québec (français)—Henry Diaz, économiste, Centre d’études municipales Montréal (français)—Henry Diaz, économiste, Centre d’études municipales Ontario—Constantinos Bougas, Economist, Centre for Municipal Studies Ottawa–Gatineau—Alan Arcand, Associate Director, Centre for Municipal Studies Toronto—Constantinos Bougas, Economist, Centre for Municipal Studies Hamilton—Constantinos Bougas, Economist, Centre for Municipal Studies Manitoba—Constantinos Bougas, Economist, Centre for Municipal Studies Winnipeg—Constantinos Bougas, Economist, Centre for Municipal Studies Saskatchewan—Robin Wiebe, Senior Economist, Centre for Municipal Studies Regina—Robin Wiebe, Senior Economist, Centre for Municipal Studies Saskatoon—Robin Wiebe, Senior Economist, Centre for Municipal Studies Alberta—Jane McIntyre, Senior Economist, Centre for Municipal Studies Calgary—Jane McIntyre, Senior Economist, Centre for Municipal Studies Edmonton—Jane McIntyre, Senior Economist, Centre for Municipal Studies British Columbia—Alan Arcand, Associate Director, Centre for Municipal Studies Vancouver—Robin Wiebe, Senior Economist, Centre for Municipal Studies Victoria—Alan Arcand, Associate Director, Centre for Municipal Studies © The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Canada At a Glance • Real GDP in Canada is expected to increase by a solid 2.6 per cent this year before falling back to growth of less than 2 per cent in 2018. • The economy is expected to generate about 260,000 jobs this year, a 10-year high. • Housing starts are on track to surpass 200,000 units for the first time in five years in 2017. Find Conference Board research at www.e-library.ca. For the exclusive use of Tyler Markowsky, [email protected], City of Winnipeg. METROPOLITAN OUTLOOK 1 Economic Insights Into 13 Canadian Economies—Autumn 2017 CANADA Real GDP Growth Current State (per cent) 2016 2017 2018–21 2012–21 Households remain the main driver of growth. 1.5 2.6 1.8 1.9 h Shaded area represents forecast data. Business investment, excluding residential structures, is set to decline for the third Credit Quality AAA consecutive year in 2017. i Source: Standard & Poor’s. Forecast Risk Rising protectionism could lead to much weaker growth in exports than projected in our outlook. i Economic Indicators 2014 2015 2016 2017 2018 2019 2020 2021 Real GDP at market prices 1,753,683 1,770,196 1,796,178 1,843,676 1,878,769 1,913,310 1,948,248 1,980,857 (2007 $ millions) 2.6 0.9 1.5 2.6 1.9 1.8 1.8 1.7 Total employment (000s) 17,797 17,949 18,083 18,341 18,512 18,697 18,879 19,066 0.6 0.9 0.7 1.4 0.9 1.0 1.0 1.0 Unemployment rate (per cent) 6.9 6.9 7.0 6.6 6.4 6.3 6.1 6.0 Personal income per capita ($) 43,820 45,281 46,214 47,257 48,508 49,807 51,117 52,497 Population (000s) 35,496 35,821 36,229 36,646 37,026 37,403 37,776 38,148 1.1 0.9 1.1 1.2 1.0 1.0 1.0 1.0 Single-family housing starts (000s) 75.5 68.1 74.1 82.5 76.8 73.6 73.0 72.5 Multi-family housing starts (000s) 113.8 127.4 123.8 128.7 117.6 117.2 116.4 115.8 Retail sales ($ millions) 510,478 523,922 550,793 582,604 596,405 609,550 623,236 636,188 5.1 2.6 5.1 5.8 2.4 2.2 2.2 2.1 CPI (2002 = 1.000) 1.252 1.266 1.284 1.307 1.334 1.362 1.390 1.419 1.9 1.1 1.4 1.9 2.0 2.2 2.1 2.1 Shaded area represents forecast data. For each indicator, the first line is the level and the second line is the percentage change from the previous year; italics indicate percentage change. Sources: The Conference Board of Canada; Statistics Canada; CMHC Housing Time Series Database. Find Conference Board research at www.e-library.ca. ii © The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material. Canada | The Conference Board of Canada Canadian Economy Shifts Into High Gear, but Slower Growth Looms After two disappointing years, the Canadian economy has finally shifted into high gear, posting vigorous growth in the first six months of 2017. Even with slower growth over the rest of the year, the economy is on track to expand by a solid 2.6 per cent in 2017. The economic strength will be reflected in strong job creation. In fact, about 260,000 jobs are expected to be generated this year, a 10-year high. Unfortunately, Canada’s current rate of expansion is unlikely to last. We expect economic growth to decelerate to 1.9 per cent in 2018 and to average just 1.8 per cent over the following three years, with Canada’s population aging and poor productivity performance acting as key headwinds. Job creation will also slow, with the country adding 171,000 jobs next year. Households Keep Spending Strong consumer spending and residential investment are the main factors driving the sharp uptick in Canadian economic growth this year. Consumer spending is set to grow by an impressive 2.9 per cent in 2017—the fastest increase in seven years. Next year, however, growth will slow amid weak wage gains, a tapering off in employment growth, and rising household debt. The story is similar in residential construction. After increasing by almost 5 per cent this year as housing starts hit a five-year high, residential investment is set to decline next year as starts ease to a level more in line with demographic needs. Weakening growth in house prices is another factor that will hurt consumer spending. The average homeowner saw the value of their house rise a whopping $46,700 in 2016. This has supported recent increases in consumer spending as households have spent some of their newfound wealth. Cooling growth in home prices is expected to act as a drag on household spending over the second half of this year and into 2018. There is also an increased risk of a significant correction in the housing market, which could have a major impact on consumer spending and the broader economy.