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AN UPDATE ON PROVINC IAL ECONOMIC & F ISCAL MATTERSAN UPDATE ON PROVINC IAL ECONOMIC & F ISCAL MATTERSMONITORP R O V I N C I A LP R O V I N C I A L
The Canadian econ-
omy is gathering
steam, and all provinces are
participating in the recovery
this year. Real GDP will likely
expand across the country in
2010, with the strongest growth
rates seen in Western Canada
as commodity-sector activity
recovers from a depressed year
in 2009. Indeed, the theme of
the “West Outperforming the
Rest” should persist into 2011 as global commodity demand remains fi rm, while a strong
Canadian dollar tempers growth in Central Canada and capital investment activity begins
to wane in Atlantic Canada.
Western Canada is poised to benefi t from a rebound in commodity prices, fi rming global demand
for raw materials and a lower overall cost environment in the energy sector. Oil prices have
more than doubled from their recession low, and investment activity in Western Canada has
started to pick up as a result. At the same time, reduced royalty rates in Alberta and various
incentives in B.C. and Saskatchewan have helped improve the energy economics in the region,
and have removed some of the political uncertainty surrounding the Alberta royalty regime.
Meantime, Western Canada’s post-recession fi scal hole is much shallower than in Central
Canada, and as a result, the impact on growth of budget-balancing measures will be milder
in the coming years, allowing real GDP growth of about 4% per year through 2011.
The recovery is also well underway in Central Canada, as auto production has rebounded
from the depths of recession, and Ontario’s housing market just recently slipped from re-
cord sales and price levels. While housing is expected to cool through the rest 2010, and
June 2010
Michael Gregory, CFASenior Economist
Robert KavcicEconomist
1•800•613•0205www.bmocm.com/economics
Population: 33,930,800
Area: 9,984,670 km²
GDP/Capita: $46,960
National Capital:Ottawa
Party in Power:Conservatives
Prime Minister:Rt. Hon. Stephen Harper
Finance Minister:Hon. Jim Flaherty
Legislative Seats:Conservatives 144Liberals 77Bloc Quebecois 48New Democrats 36Independent 2Vacant 1
Minority Government Since:October 2008
Source: BMO Capital Markets
Provincial GDPReal GDP Growth Rates—Forecast (percent)
NB200920102011
-0.82.52.6
NS200920102011
-0.52.42.7
PEI200920102011
0.62.62.3
Que200920102011
-1.02.92.8
Ont200920102011
-3.13.42.9
Alta200920102011
-5.13.63.9
Sask200920102011
-6.34.23.8
BC200920102011
-2.33.93.9
Man200920102011
-0.23.03.1
NL200920102011
-10.24.03.0
Canada200920102011
-2.53.43.1
The West Will Rise Again
MONITORP R O V I N C I A LP R O V I N C I A L
2 Provincial Monitor June 2010
the manufacturing sectors in Ontario and Quebec will continue to bear the weight of a
strong Canadian dollar, domestic demand will pick up the slack. Indeed, retail sales have
rebounded to record levels in both provinces, as have the number of service-sector jobs.
However, longer-term growth in the region will be challenged by fi scal restraint—Ontario
faces the largest budget defi cit in the country and Quebec has already begun to implement
tax increases and spending restraint. Taken together, these factors all point to below-aver-
age economic growth of slightly less than 3% per year through 2011.
Atlantic Canada’s outlook remains stable. Aside from Newfoundland & Labrador (which was
hit by some one-time factors), the region saw very modest real GDP declines in 2009. One
supporter of growth during the recession was capital investment in both the public and
private sectors. While government stimulus remains strong in the region, some major pri-
vate-sector projects will wind down in the next few years. This, combined with an ongoing
challenge in the manufacturing sector, will lead to below-average growth of about 2.5% per
year through 2011 in Atlantic Canada.
Budget Roundup
The 10-province combined budget defi cit is estimated at $34.2 billion for the fi scal year ended
March 2010, or 2.2% of Canadian GDP1. This contrasts sharply with a $2.6 billion shortfall in
FY2008/09 (-0.2% of GDP) and a surplus of $11.8 billion in 2007/08 (+0.8%). The deterioration
mostly refl ects the impact of recession-ravaged revenues and fi scal stimulus efforts. With the
latter continuing into FY2010/11, the combined budget defi cit is forecast to only fall to $32.6
billion this fi scal year (2.0%). However, as the stimulus efforts end next year (following Ottawa’s
lead) and decent economic growth pumps revenues, the combined defi cit falls to $23.9 billion,
or 1.4% of GDP. On aggregate, defi cit reduction efforts continue in subsequent years.
The fi scal year ended March 2010 also marks the projected defi cit highs for most individual
provinces. Alberta, Saskatchewan (pre-GFSF) and Quebec are projecting larger shortfalls
this fi scal year than last year (New Brunswick is just marginally higher). However, nearly
all jurisdictions are showing smaller defi cits in 2011/12 (except Nova Scotia). Also, most of
the eight provinces with balanced budget legislation are showing a zero or positive total
within the required time (New Brunswick and Nova Scotia are the exceptions). In some
cases, these laws were modifi ed to permit larger defi cits for longer, owing to the severity
of the economic downturn.
Alberta and Saskatchewan (pre-GFSF) are scheduled to return to surplus by FY2012/13
(their unaltered legislations require a balanced budget each year unless it can be covered by
banked, prior surpluses). British Columbia is projected to record a surplus the following year,
but this could easily happen a year ahead of schedule given that embedded contingencies
and allowances overwhelm the small shortfall in 2012/13. Thus, as the three western prov-
1 Excludes funds shifted from Saskatchewan’s Growth and Financial Security Fund.
MONITORP R O V I N C I A LP R O V I N C I A L
3 Provincial Monitor June 2010
inces lead economic growth in
the coming years, they will also
lead the fi scal turnaround. This
refl ects the region’s exposure to
commodities, which is also a key
risk to these three province’s
fi scal outlooks.
Quebec and Nova Scotia are
projecting zero balances by
FY2013/14. Interestingly, both
provinces resorted to raising
their Harmonized Sales Tax (HST)
to pare their fi scal shortfalls (we
suspect that other HST provinces might eventually follow suit). Embedded in Quebec’s fi gures
are $1.1 billion in unidentifi ed defi cit reduction measures. As a rule, we are sceptical of un-
identifi ed measures, but Quebec has already shown a commitment to “fi lling in the details”.
A year ago, the province had a $5.1 billion pool of unidentifi ed measures by FY2013/14. PEI
is also projecting a zero balance by FY2013/14, but has yet to provide revenue and expense
details beyond FY2011/12.
Manitoba and New Brunswick are scheduled to return to surplus by FY2014/15, and we have
to wait another three years (FY2017/18) before Ontario hits it projected zero balance. As a rule,
we are also sceptical of long fi scal adjustment periods, given the overlay of multiple election
cycles and the rising demographic pressure on public fi nances. However, Ontario was saddled
with the largest defi cit as a share of GDP, requiring the largest fi scal adjustment. Ontario is
also the province most levered to U.S. economic growth, and with U.S. prospects still quite
uncertain, the government opted for only a very gradual defi cit-reduction path. We anticipate
90/91 92/93 94/95 96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11-4
-3
-2
-1
0
1
2
Combined Provincial Budget Balance (% of GDP)
Sea of Red
estimate
forecast
Red Tide SubsidesBudget Balance ($ mlns)
07/08 08/09 09/10 e 10/11 f 11/12 f 12/13 f 13/14 f 14/15 f 15/16 f 16/17 f 17/18 fBC 2,837 78 (2,775) (1,715) (945) (145) * 410Alberta (ex. SF) 4,581 (852) (3,624) (4,748) (1,135) 505Saskatchewan 641 2,389 425 20 50 75 ex. GFSF 1,282 1,970 (86) (174) (121) 102Manitoba 558 470 (555) (545) (448) (345) (146) 185
Ontario 600 (6,409) (21,330) (19,690) (17,300) (15,900) (13,300) (10,700) (7,800) (4,200) 0Quebec 0 0 (4,257) (4,506) (2,900) (1,200) 0 **New Brunswick 97 (192) (743) (749) (681) (553) (262) 42Nova Scotia 419 20 (488) (222) (370) (187) 0
PEI (4) (33) (84) (55) (36) (30) 0Nfld & Labrador 1,421 2,350 (295) (194) (157) (192)
( ) = deficit e = estimate f = forecast SF = Sustainability Fund ($2,808 mln in 12/13) GFSF = Growth and Financial Security Fund ($340 mln in 11/12)* By 12/13, $850 mln of contingencies and allowances ** By 13/14, $1,054 mln of measures to be named later
MONITORP R O V I N C I A LP R O V I N C I A L
4 Provincial Monitor June 2010
that as U.S. economic prospects improve (and become less uncertain), Ontario will eventually
embark on a more aggressive defi cit-reduction path.
PEI and Newfoundland & Labrador do not have balanced budget legislation. After narrowing
in FY2011/12, Newfoundland & Labrador’s defi cit is projected to widen a tad in 2012/13,
despite rebounding offshore oil revenues. Although a culprit is an aggressive, possible GDP-
growth-enhancing infrastructure program, we view any budget plan that fails to display
sustained defi cit reduction over the medium term with some skepticism.
Fortunately, nearly all provinces are likely to get some extra fi scal lift from better-than-ex-
pected growth. Among this year’s provincial budgets, the various forecasts for real GDP
Focus on HSTs
In the coming year, consumption tax changes will take effect in four provinces. B.C. and Ontario will harmonize their provincial sales tax with the Federal Goods and Services Tax on July 1st. The new Harmonized Sales Tax rates of 12% in B.C. and 13 % in Ontario, will leave the overall tax rate unchanged, but apply to a wider range of goods and services. In Nova Scotia, the already-harmonized sales tax will rise 2 ppts on July 1st to 15%. In Quebec, the QST will rise by 1 ppt on January 1st, 2011 and again on January 1st, 2012, ultimately lifting the combined QST/GST to 14.5%.
These changes will have an impact on provincial infl ation rates. The Province of Ontario estimates that 17% of consumer expenditures will now become subject to the 8% provincial portion of the HST, which would imply a 1.4% jump in consumer prices (the annual infl ation rate will be lifted by half that amount in 2010 given that it takes place mid year). Assuming that the B.C. HST impacts a broadly similar share of spending, the annual infl ation rate would jump 1.2% (or about 0.6% in 2010). However, sales tax harmonization also lowers business input costs, which would apply longer-term downward pressure to some prices. This will offset some of the impact of the tax increase, but the amount is uncertain and will occur over a longer time period. In Nova Scotia and Quebec, where the tax rates are already harmonized, the increases will be fully refl ected in consumer prices.
Overall, harmonization in B.C. and Ontario could have a small negative impact on consumer spending. The impact will be moderated by offsetting income tax cuts, tax rebates and pre-sumed cost savings pass-through (at least partially) by businesses. In Nova Scotia and Quebec, the impact on consumer spending will be more severe given that there are no cost savings to pass through, and no substantial offsetting tax cuts or rebates.
British Columbia Ontario Quebec Nova ScotiaCurrent Tax 7% PST + 5% GST 8% PST + 5% GST 12.5% HST * 13% HSTFuture Tax 12% HST 13% HST 14.5% HST 15% HST
Change Date July 1, 2010 July 1, 2010Jan. 1, 2011 (1 ppt)Jan. 1, 2012 (1 ppt)
July 1, 2010
Est. CPI Impact
2010 +0.6% +0.7% none +0.6%2011 +0.6% +0.7% +0.6% +0.6%2012 slightly negative slightly negative +0.6% none
yes yes no no
Consumer Impact slightly negative slightly negative negative negative
* Quebec administers its own HST (7.5% QST + 5% GST)Note: QC and NS assumes 60% passthrough
Cost SavingsPass-Through?
MONITORP R O V I N C I A LP R O V I N C I A L
5 Provincial Monitor June 2010
growth in 2010 are nearly all
below our own projections (9
out of 10), ranging from more
than 1.5 percentage points for
B.C. and Saskatchewan to 0.5
points for Manitoba and Nova
Scotia. Among the provinces
that publish their 2011 GDP
growth forecasts, six of eight are
again below our projections.
Although there was signifi cant
deterioration in provincial fi-
nances during the past couple years, aggregate and individual defi cits remain manageable;
the consolidation required to return to balanced budgets should not be too onerous and, in
consequence, is more likely to be sustained.
British Columbia was hit hard during the recession, but the province is now fi rmly in recov-
ery mode. After contracting 2.3% in 2009, real GDP should rebound a solid 3.9% this year,
placing it among the strongest in Canada.
While the temporary boost from the 2010 Olympic Games has faded, strong domestic demand
is driving a sustainable recovery. The province’s housing market has seen a furious rebound,
with average prices rising 30% from the recession low, to a record level. However, this bounce
refl ects a signifi cant amount of pulled-forward demand, as buyers moved to beat stricter
mortgage rules, higher mortgage rates and the July 1st HST. As a result, softer demand and
more supply have already begun to hint at a cooler housing market in the second half of the
year. Still, the spill-over effect to construction activity has been signifi cant, with housing starts
more than doubling from their recession low.
Higher commodity prices will keep investment activity in the mining, and oil and gas sectors
humming. The current 2% incentive royalty rate for natural gas wells is in place through
June-2010, while the Province has increased its Infrastructure Royalty Credit Program, which
provides rebates for exploration-related construction costs, by $50 mln. Exports should also
fi rm as global demand recovers. While a strong C$ will limit growth, the forestry sector will
benefi t from a modest recovery in U.S. housing starts, and sales to Asia (now more than a
Population: 4,494,200
Percent of Canada: 13.3
Rank by Population: 3rd
Area: 944,735 km²
GDP/Capita: $45,550
Provincial Capital:Victoria
Party in Power:Liberals
Premier:Hon. Gordon Campbell
Finance Minister:Hon. Colin Hansen
Legislative Seats:Liberals 49New Democrats 35Independent 1
Next Election:May 2013
BritishColumbia
Housing market has stoked economic recovery
Balanced budget by FY2013/14; upside potential
Fiscal Ships Likely Lifted FurtherReal GDP (% chng)
2009
-2.3-5.1-6.3-0.2-3.1-1.0-0.8-0.50.6
-10.2
BCAlbertaSaskatchewanManitobaOntarioQuebecNew BrunswickNova ScotiaPEINfld & Labrador
BMO3.93.64.23.03.42.92.52.42.64.0
2010Gov’t2.22.62.62.52.72.31.71.92.04.0
Gap1.71.01.60.50.70.60.80.50.60.0
BMO3.93.93.83.12.92.82.62.72.33.0
2011Gov’t2.32.93.33.03.22.6n/a1.2n/a3.1
Gap1.61.00.50.1-0.30.2n/a1.5n/a-0.1
MONITORP R O V I N C I A LP R O V I N C I A L
6 Provincial Monitor June 2010
quarter of international goods
exports) will benefi t from strong
growth in that region.
Employment has rebounded
2.2% from the recession low
and the jobless rate has fallen
almost a percentage point to
7.5%. Job growth of about 2%
through 2011 should help pull
the unemployment rate down
to 6.6% next year, still above the
very lean days of 2007.
The Province of British Columbia
is forecasting a $1.7 bln defi cit for FY2010/11, a $1.1 bln improvement over the $2.8 bln shortfall
estimated for FY2009/10. Total revenue will grow 5.8% to $39.2 bln in FY2010/11, fuelled by
natural resources and contributions by the federal government (mostly transition payments for
the HST). Total expenses are projected to grow 2.3% to $40.6 bln, with heath care garnering
more than 80% of the modest gain. The commitment to eliminate the defi cit by FY2013/14
remains in place, and with contingencies of $450 mln embedded in each year and forecast
allowances that move up from $300 mln to $400 mln, the defi cit could easily be eliminated a
year or two earlier. The return to balance hinges on a sturdy rebound in revenue—4.6% annu-
ally in the four years through FY2013/14—combined with a moderate slowdown in spending
growth to 2.3% annually. On a real per-capita basis, total spending will contract 1.2% annually
over the next four years, similar to the restraint seen in the mid-1990s and mid-2000s.
The Province’s borrowing requirements are pegged at $8.9 bln in FY2010/11, with 30%
completed by mid-June.
The Alberta economy is starting to bounce back from a deep commodity price-induced re-
cession. After contracting 5.1% in 2009, the sharpest decline since at least 1982, real GDP
is expected to grow 3.6% this year and a further 3.9% in 2011, led by the energy sector.
The combination of falling energy prices and a more taxing royalty regime cut investment
activity in the sector by about half in 2009, and in the wake of the downturn, the province
Population: 3,711,850
Percent of Canada: 11.0
Rank by Population: 4th
Area: 661,848 km²
GDP/Capita: $78,450
Provincial Capital:Edmonton
Party in Power:Progressive Conservatives
Premier:Hon. Ed Stelmach
Finance Minister:Hon. Ted Morton
Legislative Seats:PC 68Liberals 8Wild Rose 3New Democrats 2Independent 1
Majority Government Since:March 2008
Alberta
Energy sector to fuel recovery; lower royalties help
Balanced budget by FY2012/13
Average Home Price (y/y % chng)
00 01 02 03 04 05 06 07 08 09 10-15
-10
-5
0
5
10
15
20
25
British Columbia:Hot Housing Market Set to Cool
MONITORP R O V I N C I A LP R O V I N C I A L
7 Provincial Monitor June 2010
has seen net out-migration for
the fi rst time in 15 years. One
positive impact of the recession
has been cooling cost pressures
in the province (i.e., labour and
raw materials), which ran out of
control late in the boom. Now,
lower costs, a rebound in oil
prices and a reversal of past roy-
alty increases by the Province
have improved the economics in
the energy sector. Indeed, activ-
ity is already beginning to pick up, with recent investment announcements including $2.5
bln for the BP/Husky Sunrise Project, a $1.5 bln expansion of Surmont and an expansion
of Canadian Natural Resources’ Horzion Mine. The Province is expecting oil sands output
to reach 2.1 mln barrels/day by FY2012/13, or 40% more than last year’s level. Strength in
unconventional oil will help to offset a sluggish natural gas sector, in which the Province is
expecting an 8.5% decline in production in FY2010/11.
Larger excesses built up late in the commodity boom should keep growth in Alberta slightly
below its Western neighbours in the coming year. For example, Calgary’s offi ce vacancy rate
hit 14.9% in 2010Q1, according to CB Richard Ellis, up from 7.9% a year ago, and ample new
supply like Eighth Avenue Place and the Bow will be coming on the market in the next 18
months. Employment also remains 2.4% below peak levels, while the unemployment rate
has yet to make a decisive move lower. As the recovery matures, Alberta’s job market should
pick up steam, and a renewal of inward migration trends is likely by 2011. Longer term, this
should help to support housing, which is still working off the excesses of 2007—average
prices are unchanged from those prevailing three years ago, while sales are running at just
60% of the peak levels seen during the height of the boom.
The Province of Alberta is projecting a $4.7 bln defi cit for FY2010/11, after an estimated $3.6 bln
shortfall in FY2009/10. The budget is expected to return to a $505 mln surplus in FY2012/13. Note
that royalty reductions, announced after the budget, are expected to cost $700 mln per year by
FY2012/13, which would more than negate the small surplus. The Province will draw from its
Sustainability Fund to cover its defi cits, which will shrink from $15 bln to $2.8 bln by FY2012/13.
Total revenue will inch up 1.3% to $34.0 bln in FY2010/11, led by higher non-renewable resource
revenues, while total expenses will grow 4.2% to $38.7 bln. The Province’s return to surplus
hinges on a combination of solid revenue growth of 6.3% annually through FY2012/13, with oil
and natural gas prices projected to average US$89.50 and C$5.50, respectively, by FY2012/13.
Program spending is projected to slow signifi cantly, rising 2.1% per year through FY2012/13.
Oil Sands Investment ($ blns)
03 04 05 06 07 08 09 10 11 12 130
5
10
15
20
25
Alberta: Break Time is Over
Source: Province of Alberta
forecast
estimate
MONITORP R O V I N C I A LP R O V I N C I A L
8 Provincial Monitor June 2010
Alberta plans to borrow $4.1 bln in FY2010/11, mostly on behalf of ACFA and ATB Financial.
About 35% has been completed through mid-June.
Saskatchewan’s economy contracted sharply in 2009 amid a steep decline in potash production.
However, a rebound in that sector, combined with strength in energy and still-strong population
trends, are poised to fuel 4.2% real GDP growth this year, the strongest in Canada.
Potash production wilted in 2009 as sales to China, the European Union and the U.S. fell
sharply. As a result, Canadian potash output fell 58%, the vast majority of which is in Sas-
katchewan. However, sales have bounced back and output was up 75% y/y in 2010Q1, while
Canpotex said it was exporting at maximum capacity in the quarter. Meantime, the oil and
gas sector, particularly the Bakken play, continues to attract investment dollars. The Province
banked $190 mln in land sales in April, well above the $11.7 mln fetched in the prior year,
when commodity prices were much lower. The Province has also moved to lower royalties,
including a three-year break on horizontal natural gas drilling. However, Saskatchewan was
a benefi ciary of royalty uncertainty in Alberta, but with that uncertainty now mostly gone,
any spill-over activity could moderate in the coming year.
Saskatchewan continues to see positive interprovincial migration fl ows, including almost 3,000
people in the latest four quarters. This trend is likely to continue thanks to relatively low living
costs and bright economic prospects. With population growth still near a multi-decade high,
retail sales (up 4.8% y/y in 2010Q1) and construction activity will continue to be primary ben-
efi ciaries. At the same time, the job market is absorbing the new migrants with the unemploy-
ment rate rising only modestly
during the recession and, at 5%,
is the lowest in Canada. Private
sector job growth of 1.3% y/y in
May has offset a 2.9% decline in
public-sector employment.
As we go to print, record spring
rainfall has much of the prov-
ince’s farmland too wet for
planting. Crop insurance seed-
ing deadlines were extended
to June 20th, but about 25% of
cropland has yet to be seeded.
Population: 1,038,000
Percent of Canada: 3.1
Rank by Population: 6th
Area: 651,036 km²
GDP/Capita: $61,442
Provincial Capital:Regina
Party in Power:Saskatchewan Party
Premier:Hon. Brad Wall
Finance Minister:Hon. Rod Gantefoer
Legislative Seats: Saskatchewan Party 37New Democrats 20Independent 1
Next Election:November 2012
Saskatchewan
Diverse commodity mix to drive economic growth
Spending restraint to steer balance to surplus
GDP – Canada – Potash (blns of chained 2002 dollars)
05 06 07 08 09 100.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Saskatchewan: Fertilized Recovery
MONITORP R O V I N C I A LP R O V I N C I A L
9 Provincial Monitor June 2010
At this point, it looks like the agriculture sector will be a drag on growth in 2010. Propor-
tionally, Saskatchewan’s agriculture sector is by far the largest in Canada, with crop and
animal production making up more than 12% of real GDP in 2009 compared to less than
2% nationally.
The Province of Saskatchewan is projecting a $174 mln defi cit in FY2010/11 (a modest
0.3% of GDP) before transfers from the Growth and Financial Security Fund totalling $194
mln. The Province is projecting a return to pre-GFSF surpluses by FY2012/13. Revenue is
expected to fall 0.8% to $10.0 bln in FY2010/11, owing largely to lower dividend payments
from Crown Entities. Non-renewable resource revenues will rise 19.5% with potash prices
expected to average a conservative US$308, but production is assumed to bounce back.
Resource revenues will make up 21% of total in FY2010/11, below the 26% average of the
last fi ve years, but still the primary risk to the fi scal outlook. Total spending will rise 0.1% to
$10.1 bln in FY2010/11, and growth will be held to 1.3% annually through FY2013/14, or a
2.7%-per year contraction on a real per-capita basis.
Total borrowing requirements are expected to be $1.1 bln in FY2010/11, with 16% completed
by mid-June.
Manitoba’s diverse economy experienced a softer-than-average recession, with real GDP
contracting just 0.2% in 2009. The province’s broad industry base is also well-positioned for
the emerging recovery, with real GDP expected to advance 3.0% this year and 3.1% in 2011.
Nonresidential construction activity has been a pillar of strength in Manitoba in recent years,
but is expected to fade slightly in
2010. After growing at a double-
digit pace for the past four years,
non-housing capital spending is
expected to dip 1.5% in 2010 as
a number of infrastructure proj-
ects wind down. Still, large-scale
investments by Manitoba Hydro,
including the $1.3 bln Wuskwatim
generating station, will continue
to provide economic support over
the medium term.
Population: 1,229,000
Percent of Canada: 3.6
Rank by Population: 5th
Area: 647,797 km²
GDP/Capita: $43,500
Provincial Capital:Winnipeg
Party in Power:New Democrats
Premier:Hon. Greg Selinger
Finance Minister:Hon. Rosann Wowchuk
Legislative Seats:New Democrats 36PC 19Liberals 2
Next Election:May 2011
ManitobaDiverse economy and strong population growth
Return to surplus by FY2014/15
Population (y/y % chng)
83 85 87 89 91 93 95 97 99 01 03 05 07 090.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Manitoba: The People Are Coming
Manitoba
Canada
MONITORP R O V I N C I A LP R O V I N C I A L
10 Provincial Monitor June 2010
While manufacturing and trade have stabilized, they should feel the pinch of a strong C$,
but mining and agriculture provide good growth prospects—HudBay’s Lalor Lake mine holds
about three million ounces of gold, and the company plans to spend $500 mln on the project
in the next few years. Meantime, population growth has picked up and is running ahead
of the national rate for the fi rst time since the early-1980s, which will continue to support
retail sales and housing demand.
The Province of Manitoba is projecting a $545 mln summary defi cit in FY2010/11, and the Prov-
ince is anticipating four years of defi cits before returning to a $185 mln surplus in FY2014/15.
Starting at 1% of GDP, Manitoba’s defi cit will remain relatively small, and a moderation in
spending growth and the economic recovery should let the province to grow its way back
into the black. Total revenues are projected to rise 1.7% to $12.7 bln in FY2010/11. Some very
modest tax changes will add $8.6 mln to revenue, the largest being an increase in the tobacco
tax. Meantime, total spending is projected to rise 1.6% to $13.3 bln in FY2010/11. This refl ects
a marked slowdown from the 6% annualized growth seen over the prior four years. While the
Province will continue to spend on education and health, cuts elsewhere (e.g. a public-sector
wage freeze) will slow overall spending growth to 1.8% per year over the forecast horizon.
This represents a contraction of about 0.7% per year on a real per-capita basis.
Total borrowing requirements are expected to be $3.4 bln in FY2010/11, with 39% completed
by mid-June.
The Ontario economy has pulled out of recession as the auto sector is rebounding and
domestic demand, led by housing, is gaining strength. Still, the recession left a deep dent
in Ontario’s economy, and a
number of factors will likely
temper growth in the coming
years—a strong loonie, sluggish
U.S. consumer demand and fi s-
cal restraint. Real GDP will likely
advance 3.4% this year before
slowing to a below-average
2.9% in 2011.
The auto sector did the most
damage to the Ontario economy
in 2009, with production falling
Population: 13,134,500
Percent of Canada: 38.8
Rank by Population: 1st
Area: 1,076,395 km²
GDP/Capita: $46,135
Provincial Capital:Toronto
Party in Power:Liberals
Premier:Hon. Dalton McGuinty
Finance Minister:Hon. Dwight Duncan
Legislative Seats:Liberals 72 PC 25New Democrats 10
Next Election:October 2011
Ontario
Auto sector on the mend; domestic demand strong
A long, tough road back to balance in FY2017/18
Real Net Exports (% of GDP)
85 87 89 91 93 95 97 99 01 03 05 07 09-2
0
2
4
6
8
10
12
Ontario: Stiff Trade Winds
MONITORP R O V I N C I A LP R O V I N C I A L
11 Provincial Monitor June 2010
as much as 60% below prior-year levels. However, production has since bounced back, and
recent announcements—a $245 mln investment by GM in St. Catharines, a third shift at
GM in Oshawa and a second shift at Honda in Alliston—are encouraging. Still, the recovery
in the broad manufacturing and export sectors will remain tepid as the loonie hovers at
high levels—real net exports were negative in the last two quarters of 2009. The trouble in
manufacturing lifted Ontario’s unemployment rate to 8.9% in May, above the national rate
and also above those in Quebec, New Brunswick and Nova Scotia. Still, while the goods
sector remains depressed, service-sector employment has recovered to record levels and
will remain a key support, particularly in the professional, scientifi c and technical sector.
Overall services now make up nearly 80% of Ontario jobs, up from 72% just 10 years ago.
The private sector, which has added 120,000 jobs in the past year, will have to make up for
a coming slowdown in public-sector hiring as the Province embarks on a defi cit reduction
campaign (starting in FY2011/12).
Domestic demand in Ontario has fi rmed and will drive growth in 2010. Retail sales have
bounced more than 10% from their recession low, while the housing market caught fi re amid
record low mortgage rates and pre-HST buying, pushing average prices to a record level. The
surge, however, refl ects a signifi cant amount of pulled-forward demand, and slower activity
is likely in the second half of 2010 and into 2011—the most recent data already show softer
sales and more ample supply.
The Province of Ontario is projecting a $19.7 bln defi cit in FY2010/11 versus a $21.3 bln
shortfall in the prior fi scal year, and has begun to plant the seeds of future spending restraint.
The defi cit clocks in at 3.3% of GDP, and will be followed by another six years of red ink
before returning to balance in FY2017/18, by far the longest and deepest stretch of defi cits
among the Canadian provinces. Revenue is expected to rise 10.8% to $106.9 bln in FY2010/11
as the economic recovery drives personal and corporate income tax receipts and Federal
transfers receive a temporary boost. There were no major new tax measures in this year’s
budget, but the HST (July 1st) and other measures outlined last year will go ahead as planned,
including modest personal and corporate tax relief and HST rebate cheques, which have
already begun to be paid out. Meantime, program spending will rise 6.5% to $115.9 bln in
FY2010/11. The real work to rein in spending will begin next year, and starting in FY2012/13,
program spending growth will slow to 1.9% annually through FY2017/18—this includes a
challenging target of 3% annual growth in health spending. On a real per-capita basis, pro-
gram spending will shrink 1.3% per year through FY2017/18, a level of restraint not seen
in the province since the mid-1990s. If the discipline to hit these targets is maintained, and
the economic recovery proceeds as forecast, Ontario could be nursed back to fi scal health
without any major tax increases.
Borrowing requirements in FY2010/11 are pegged at $39.7 bln, of which a third has been
completed by mid-June.
MONITORP R O V I N C I A LP R O V I N C I A L
12 Provincial Monitor June 2010
The Quebec economy is in recovery mode after faring relatively well during the recession.
Real GDP fell a much smaller-than-average 1.0% in 2009, and should post 2.9% and 2.8%
growth in 2010 and 2011, respectively—below the national rate.
Manufacturing activity in the province held up relatively well during the recession thanks
to the province’s lack of exposure to autos and a stable performance in aerospace, though
challenges remain. As a result of the relatively mild recession, Quebec’s unemployment
rate, with the exception of one month, stayed below 9% and is now consistently below the
national rate for the fi rst time on record back to 1976. Granted, public-sector hiring rose
signifi cantly in 2009, but the private sector has recently started to participate in the recov-
ery. Private-sector employment is just shy of pre-recession levels, with trade, fi nance and
professional services seeing ramped-up hiring.
The goods sector, however, continues to languish, particularly in manufacturing which saw
the lowest level of employment on record in April. With little help from the loonie or U.S.
demand, the manufacturing sector will continue to carve out a sluggish recovery, and com-
bined with softer-than-average, though improving, population growth, points to a relatively
weak trend growth rate in Quebec. Capital investment has been a major support in recent
years, particularly public spending on infrastructure including investments by Hydro-Quebec.
While non-housing capex is expected to grow about 5% this year, public-sector investment
will likely peak in 2010, leading to slower growth in 2011 and beyond. A strong recovery in
the housing market has also lifted residential construction activity.
The Province of Quebec is pro-
jecting a $4.5 bln deficit in
FY2010/11 and has taken big
steps toward returning to bal-
ance in fi ve years. At 1.4% of
GDP, the defi cit remains mod-
est compared to those of the
mid-1990s. Substantial progress
has been made in “measures
to be identifi ed”, or $5.1 bln of
previously unidentifi ed savings
or revenue increases from last
year’s budget. This unidentifi ed
Capital spending to peak in 2010
Budget-balancing challenge slowly being met
Population: 7,870,000
Percent of Canada: 23.3
Rank by Population: 2nd
Area: 1,543,056 km²
GDP/Capita: $40,040
Provincial Capital:Quebec City
Party in Power:Liberals
Premier:Hon. Jean Charest
Finance Minister:Hon. Raymond Bachand
Legislative Seats:Liberals 66Parti Quebecois 50Action Democratique 4Independent 3Quebec Solidaire 1
Majority Government Since:December 2008
Quebec
Unemployment Rate (percent : s.a.)
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 104
6
8
10
12
14
16
Quebec: Closing the Gap
Quebec
Canada
MONITORP R O V I N C I A LP R O V I N C I A L
13 Provincial Monitor June 2010
source of funds now totals just $1.1 bln by FY2013/14. Total revenue will rise 4.5% to $65.5
bln in FY2010/11. Chief among revenue-raising measures is an additional 1 ppt increase in
the QST in January-2012, to 9.5% (on top of the 1 ppt increase in January-2011). The combined
2 ppt increase will ultimately add $2.7 bln to revenues, with a $400 mln boost this fi scal
year. The Province is also introducing a health contribution fund on July 1, 2010, an annual
tax that will that will cost $25 per adult in 2010, rising to $200 by 2012. Total spending will
rise 3.9% to $69.5 bln in FY2010/11, and the Province is targeting 2.7% annualized program
spending growth through FY2014/15, or fl at in real per-capita terms. All told, Quebec’s efforts
to re-balance the budget should begin to weigh on growth in 2011 as tax increases kick in
and spending begins to get restrained.
Borrowing requirements are $12.9 bln in FY2010/11 (including the fi nancing fund and Fi-
nancement-Quebec), with 63% completed by mid-June.
After a relatively mild recession, the New Brunswick economy is poised to grow 2.5% in
2010 and 2.6% in 2011. Government infrastructure spending will be tempered by slowing
private-sector construction and sluggish U.S. exports, leading to below-average growth.
Major capital projects like the Point Lepreau nuclear plant upgrade and Canaport LNG ter-
minal were key supports during the recession, but those projects have wound down. This
will partly offset the boost provided by the two-year, $1.6 bln capital investment program
currently being undertaken by the provincial government, of which about half will be de-
ployed in FY2010/11.
Meantime, despite a recent bounce back, the strong loonie and sluggish U.S. demand will
weigh on exports and manufacturing activity. However, a sturdy job market, which effec-
tively saw no net job losses during the recession, and the positive impact of income tax
reductions should help support consumer activity—retail sales were up a solid 8.9% y/y in
the fi rst quarter.
The Province of New Brunswick is projecting a $749 mln budget defi cit in FY2010/11 (2.8% of
GDP) as it increases spending and capital investment, and continues to implement its tax-re-
duction program. The Province plans to return to a small surplus by FY2014/15. Total revenues
will rise 1.8% to $7.2 bln in FY2010/11, with higher corporate and sales tax revenues offsetting
lower personal income tax receipts. An overhaul of the Province’s tax system continues to
go forward as planned. All personal tax rates will fall again in 2010, ultimately bottoming out
in 2012. By then, two tax brackets will have rates of 9% and 12%, down from a range of tax
Fiscal stimulus to offset softer private-sector activity
Tax-system overhaul continues as planned
Population: 750,660
Percent of Canada: 2.2
Rank by Population: 8th
Area: 72,908 km²
GDP/Capita: $37,980
Provincial Capital:Fredericton
Party in Power:Liberals
Premier:Hon. Shawn Graham
Finance Minister:Hon. Greg Byrne
Legislative Seats: Liberals 39PC 25Vacant 2
Next Election:September 2010
New Brunswick
MONITORP R O V I N C I A LP R O V I N C I A L
14 Provincial Monitor June 2010
rates between 10.1% and 18% in 2008. In total, the tax cuts will cost $258 mln in FY2010/11,
rising to $380 mln by FY2012/13. Corporate income taxes will also continue to be trimmed
with a relatively small revenue impact—the general corporate rate (11% as of July 1st) will fall
1 point to 8% by 2012 (that would be the lowest in Canada at current rates).
New Brunswick plans to borrow $3.0 bln in FY2010/11, with 54% completed by mid-June.
The Nova Scotia economy will return to growth this year after a modest contraction in 2009.
Real GDP will likely expand 2.4% in 2010 and 2.7% in 2011, below the national rate as the
trade sector acts as a drag.
Manufacturing remains sluggish, with sales well below the peak levels seen in 2008 and
exports, particularly of natural gas, still depressed. The recovery in demand south of the
border, however modest, will help these sectors return to growth, even though the pace
will be moderated by a strong Canadian dollar. The labour market has begun to improve in
recent months, with total employment now just shy of 2008’s peak level—a 3.7% jump in
private-sector jobs has offset a 5.6% decline in the public sector over the past year. While
this will help consumer spending, the 2 ppt increase in the HST on July 1st will act as a drag.
Indeed, strong retail sales activity in recent months likely refl ects some pulled-forward
purchases, setting the stage for softer sales in the second half of the year.
Non-residential construction has been a key economic support, but some large-scale projects
like Deep Panuke will start to fade this year. The fi rst natural gas output from that project is
expected in 2011, which should provide a small boost to growth. Government infrastructure
spending will pick up some of the slack from softer private investment in 2010, before a
longer period of restraint kicks in.
The Province of Nova Scotia is projecting a $222 mln budget defi cit in FY2010/11, taking a
balanced approach to eliminating the defi cit in four years that includes spending restraint
and tax increases. At about 0.6% of GDP, the defi cit is at the low end of the provincial pack,
but it will rise to $370 mln (1% of GDP) next year. Revenue is expected to rise 3.7% to $8.4
bln in FY2010/11, as income tax receipts rise. The biggest revenue-raising measure in this
year’s budget was a 2 ppt increase in the HST, to 15%, taking effect on July 1st. This will
generate $215 mln in revenue this fi scal year. Other measures include a new tax bracket
on incomes above $150,000 until the budget is balanced. Meantime, petroleum royalties
are projected to rise 57% from very depressed levels, adding $174 mln to the Province’s
Manufacturing and trade still sluggish
HST hike and fi scal restraint in the pipeline
Population: 940,740
Percent of Canada: 2.8
Rank by Population: 7th
Area: 55,284 km²
GDP/Capita: $37,950
Provincial Capital:Halifax
Party in Power:New Democrats
Premier:Hon. Darrell Dexter
Finance Minister:Hon. Graham Steele
Legislative Seats:New Democrats 31Liberals 10PC 8Vacant 2Independent 1
Majority Government Since:June 2009
Nova Scotia
MONITORP R O V I N C I A LP R O V I N C I A L
15 Provincial Monitor June 2010
coffers, though still a modest 3% of total revenue. Total spending will rise 0.4% to $9.0 bln
in FY2010/11, and the Province is beginning a four-year period of restraint that will include
a 10% reduction in the civil service by 2013. The overall expenditure management program
will target 0.4% annualized spending growth through FY2013/14, a stark change from growth
of more than 6% seen during the past fi ve years.
Borrowing requirements are expected to be $2.5 bln in FY2010/11, with 36% completed
by mid-June.
As with most of Atlantic Canada, economic growth in PEI will be relatively soft in 2010, largely
because of the trade sector. While PEI was the only province to see positive real GDP growth
in 2009, the economy will likely expand a relatively modest 2.6% this year.
Employment hit a record level in April, and was 4.6% above year-ago levels through May.
This has pulled the unemployment rate down to just over 10% so far in 2010. While this will
support retail sales, tourism and exports will continue to be strained by a strong Canadian
dollar—manufacturing sales were down almost 12% y/y in the fi rst quarter on weakness in
both durables and non-durables.
However, a fi ve-year, $500 mln capital investment plan should keep non-residential construc-
tion activity fi rm in the coming years, with public and private investment intentions pointing
to a 6.3% increase in 2010.
The Province of Prince Edward Island is projecting a fourth consecutive budget defi cit in
FY2010/11, at $54.9 mln (1.1% of GDP), compared to the prior period’s $84.2 mln shortfall. The
Province is anticipating a return to balance in four years, though it has not laid out a detailed
plan to get there. Total revenue is projected to grow 2.9% to $1.5 bln in FY2010/11, lifted by
4.6% growth in own source revenues, to $800 mln, while Federal transfers will dip slightly.
Total spending is projected to grow a very modest 0.8% in FY2010/11, to $1.5 bln, as interest
charges will jump more than 8% to $110 mln, or 7.5% of revenue. This year’s budget contained
no signifi cant new tax or spending measures, and the province will likely lean on a combination
of economic recovery and modest spending growth to return to balance in four years.
Borrowing requirements are expected to be $242 mln in FY2010/11, with 63% completed
by mid-June.
Population: 141,270
Percent of Canada: 0.4
Rank by Population: 10th
Area: 5,660 km²
GDP/Capita: $34,435
Provincial Capital:Charlottetown
Party in Power:Liberals
Premier:Hon. Robert Ghiz
Finance Minister:Hon. Wes Sheridan
Legislative Seats:Liberals 24Conservatives 3
Next Election:October 2011
Prince EdwardIsland
Only province with real GDP growth in 2009
Balanced budget in four years
MONITORP R O V I N C I A LP R O V I N C I A L
16 Provincial Monitor June 2010
Newfoundland & Labrador saw a sharp 10.2% real GDP contraction in 2009, the worst per-
formance in Canada. However, improvement in the mining sector and a reversal of some
temporary factors will drive 4% growth in 2010 and solid 2.8% growth in 2011.
Offshore oil output is in secular decline, and production fell 12.3% y/y in the fi rst quarter with
a like-sized decline expected for all of 2010. Despite the uncertainty surrounding the Gulf
oil spill, there’s no sign that the Province will back down on its stance to maintain offshore
drilling activity. This includes Chevron’s now somewhat controversial deep water exploration
well in the Orphan Basin, which is actually deeper than the Horizon well in the Gulf.
Mineral output (ie: iron ore and nickel) is expected to bounce this year, partly because last
year’s production was hampered by a strike at the Voisey’s Bay mine. However, the biggest
economic driver in the province in the next two years will be construction activity. Gov-
ernment infrastructure spending will total about $1 bln in FY2010/11, helping boost total
capital spending an expected 23% in 2010. Provincial government infrastructure spending
will amount to more than $5 bln over the next several years, keeping the economic fuel
burning into 2011. At more than 3% of GDP, the Province’s infrastructure program is among
the largest in Canada relative to the size of the economy.
Other underlying economic trends remain solid in the province. Employment reached a
record level in May on strength in both private- and public-sector hiring, while retail sales
and housing activity—both sales and construction—are well above year-ago levels, helped
by the fastest rate of population growth since the early-1990s.
The Province of Newfoundland
and Labrador is forecasting an
improved $194.3 mln deficit
(0.8% of GDP) for FY2010/11, as
rebounding offshore oil reve-
nues offset still-strong spending
growth. The Province expects
deficits averaging $175 mln
in each of the next two fi scal
years, as revenues and program
spending both post strong in-
creases. Revenue is expected 00 01 02 03 04 05 06 07 08 09 10 11 12
0
1
2
3
4
5
6
7
8
Capital Investment ($ blns)
Newfoundland and Labrador: Stimulating
forecast
Population: 510,890
Percent of Canada: 1.5
Rank by Population: 9th
Area: 405,720 km²
GDP/Capita: $58,620
Provincial Capital:St. John’s
Party in Power:Progressive Conservatives
Premier:Hon. Danny Williams
Finance Minister:Hon. Tom Marshall
Legislative Seats:PC 43 Liberals 4New Democrats 1
Next Election:October 2011
Newfoundland& Labrador
Capital investment program drives economic growth
Still-strong spending growth keeps budget in the red
MONITORP R O V I N C I A LP R O V I N C I A L
17 Provincial Monitor June 2010
to rise 3.0% to $6.6 bln in FY2010/11, refl ecting a $277 mln (14.7%) increase in oil royalties
resulting from higher prices. The Province is assuming that oil will average US$83.5/bbl
this fi scal year, up from last fi scal year’s average of just over $70. Offshore oil royalties will
make up almost 33% of total revenue, and the volatility of oil prices is the biggest risk to
the fi scal outlook. Program spending will grow 3.5% to $6.2 bln in FY2010/11, down from
the aggressive 8% pace seen during the past fi ve fi scal years. The Province is forecasting
1.9% annual program spending growth through FY2012/13, which will mark a 0.9%-per year
contraction on a real per-capita basis (though all of the restraint takes place in the last year
of the forecast horizon).
The Province expects no new borrowing in FY2010/11.
MONITORP R O V I N C I A LP R O V I N C I A L
18 Provincial Monitor June 2010
Provincial Fiscal Summary
BudgetBalance($ mlns) % of GDP
Gross Financing Requirements*
($ blns) S&P Moody’s DBRSBritish Columbia (1,715) (0.8) 8.9 AAA Aaa AA (high)Alberta (4,748) (1.6) 4.1 AAA Aaa AAASaskatchewan 20 0.0 1.1 AA+ Aa1 AAManitoba (545) (1.0) 3.4 AA Aa1 A (high)Ontario (19,690) (3.3) 39.7 AA- Aa1 AA (low)Quebec (4,506) (1.4) 15.2 A+ Aa2 A (high)New Brunswick (749) (2.6) 3.0 AA- Aa2 A (high)Nova Scotia (222) (0.6) 2.5 A+ Aa2 A*PEI (55) (1.1) 0.2 A* Aa2 A (low)Nfld & Labrador (194) (0.6) 0.0 A* Aa2 A
Total Provincial (32,404) (2.0) 78.1 *positive outlook **negative outlook
Source: Provinces and BMO Capital Markets ( ) = deficit* includes provincial crown corporations
FY10/11 (as of June 21, 2010)
Provincial Economic SummaryBC Alberta Sask. Man. Ontario Quebec NB NS PEI NL Canada
Real GDP Growth (chain-weighted : y/y % chng)2009 -2.3 -5.1 -6.3 -0.2 -3.1 -1.0 -0.8 -0.5 0.6 -10.2 -2.52010 f 3.9 3.6 4.2 3.0 3.4 2.9 2.5 2.4 2.6 4.0 3.42011 f 3.9 3.9 3.8 3.1 2.9 2.8 2.6 2.7 2.3 3.0 3.1
Employment Growth (y/y % chng)2009 -2.3 -1.2 1.5 0.0 -2.4 -0.9 0.1 0.0 -1.1 -2.4 -1.62010 f 1.9 1.0 1.4 1.3 1.6 1.3 0.6 0.5 2.6 2.7 1.52011 f 2.0 2.2 2.0 1.4 1.5 1.3 1.2 1.1 0.3 1.2 1.6
Unemployment Rate (%)2009 7.6 6.6 4.8 5.2 9.0 8.5 8.8 9.2 12.0 15.5 8.32010 f 7.2 6.9 4.9 5.3 8.9 8.1 8.7 8.6 10.9 14.4 8.12011 f 6.6 6.5 4.8 5.2 8.3 7.7 8.6 8.5 10.6 13.5 7.6
Housing Starts (000s)2009 16.0 20.0 3.8 4.1 50.1 44.0 3.5 3.4 0.9 3.2 148.92010 f 26.0 27.0 4.5 4.2 59.0 47.0 3.7 3.8 0.6 4.2 180.12011 f 24.5 25.0 4.0 4.6 66.0 44.5 3.8 3.8 0.6 3.2 180.0
Consumer Prices (y/y % chng)2009 0.0 -0.1 1.1 0.6 0.4 0.6 0.3 -0.1 -0.1 0.3 0.32010 f 1.9 1.8 1.8 1.7 2.5 1.7 2.1 2.6 2.0 2.2 2.12011 f 2.3 2.1 2.3 1.6 2.1 2.2 1.8 2.1 1.5 1.9 1.9
Provincial Economic Indicators(3-mnth m.a. : y/y % chng)
Retail SalesJan 10 7.2 0.2 3.5 5.8 5.4 6.3 7.2 8.0 5.5 6.1 3.6Feb 10 9.2 4.0 5.2 7.5 5.7 8.1 8.6 8.8 8.0 8.1 5.0Mar 10 9.4 6.8 4.8 8.6 6.0 9.5 8.9 9.5 9.1 9.6 6.0
Manufacturing ShipmentsFeb 10 -0.5 0.2 1.9 -10.6 8.7 0.5 31.5 1.6 -10.3 -12.6 4.4Mar 10 6.7 5.1 4.7 -9.0 13.5 3.8 27.6 1.8 -15.3 -25.5 8.4Apr 10 8.7 9.5 8.6 -7.9 13.0 3.9 29.6 4.5 -11.9 2.1 9.4
ExportsFeb 10 -6.2 2.3 8.0 -17.0 0.0 -8.5 46.0 -19.6 -26.2 -4.0 1.1Mar 10 -0.7 12.7 10.4 -11.2 7.6 -5.9 43.8 -18.3 -22.7 -7.1 4.0Apr 10 3.6 20.2 8.7 -11.2 8.8 -4.7 34.4 -6.6 -20.7 -7.2 4.7
Employment GrowthMar 10 1.4 -1.1 0.6 1.1 0.3 0.9 -0.1 -0.8 5.0 1.8 0.4Apr 10 1.9 -0.7 1.2 1.6 0.8 1.3 0.4 0.0 5.1 2.1 0.9May 10 2.0 -0.3 1.4 2.1 1.5 1.4 0.4 0.5 4.3 3.4 1.3
MONITORP R O V I N C I A LP R O V I N C I A L
19 Provincial Monitor June 2010
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History of Canadian Fiscal Balances($ mlns)
99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10e 10/11fBC 148 1,503 (1,184) (2,737) (1,191) 2,696 3,090 4,079 2,837 78 (2,775) (1,715)Alberta 2,791 6,571 1,081 2,133 4,136 5,175 8,551 8,510 4,581 (852) (3,624) (4,748)Sask. * 83 58 1 1 1 383 400 293 641 2,389 425 20Manitoba 11 40 63 4 (577) 562 394 430 558 470 (555) (545)
Ontario 668 1,902 375 117 (5,483) (1,555) 298 2,269 600 (6,409) (21,330) (19,690)Quebec 7 427 22 (728) (358) (664) 37 109 0 0 (4,257) (4,506)NB (30) 43 79 1 (182) 236 235 236 97 (192) (743) (749)NS (797) 147 113 28 38 170 239 182 419 20 (488) (222)
PEI 13 (35) (37) (55) (125) (34) 1 24 (4) (33) (84) (55)NL (269) (350) (468) (644) (914) (489) 77 154 1,421 2,350 (295) (194)
Provinces 2,625 10,306 45 (1,881) (4,654) 6,480 13,322 16,286 11,150 (2,180) (33,726) (32,404)
Federal 14,258 19,891 8,048 6,621 9,145 1,463 13,218 13,752 9,600 (2,200) (47,000) (49,200)
Total 16,883 30,197 8,093 4,740 4,491 7,943 26,540 30,038 20,750 (4,380) (80,726) (81,604)
* includes GSFS
History of Canadian Fiscal Balances(% of GDP)
99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10e 10/11fBC 0.1 1.1 (0.9) (2.0) (0.8) 1.7 1.8 2.2 1.5 0.0 (1.4) (0.8)Alberta 2.4 4.5 0.7 1.4 2.4 2.7 3.9 3.6 1.8 (0.3) (1.3) (1.6)Sask. * 0.3 0.2 0.0 0.0 0.0 0.9 0.9 0.6 1.3 3.8 0.7 0.0Manitoba 0.0 0.1 0.2 0.0 (1.5) 1.4 0.9 1.0 1.1 0.9 (1.1) (1.0)
Ontario 0.2 0.4 0.1 0.0 (1.1) (0.3) 0.1 0.4 0.1 (1.1) (3.7) (3.2)Quebec 0.0 0.2 0.0 (0.3) (0.1) (0.3) 0.0 0.0 0.0 0.0 (1.4) (1.4)NB (0.2) 0.2 0.4 0.0 (0.8) 1.0 1.0 0.9 0.4 (0.7) (2.7) (2.6)NS (3.5) 0.6 0.4 0.1 0.1 0.6 0.8 0.6 1.3 0.1 (1.4) (0.6)
PEI 0.4 (1.0) (1.1) (1.5) (3.3) (0.9) 0.0 0.6 (0.1) (0.7) (1.8) (1.1)NL (2.2) (2.5) (3.3) (3.9) (5.0) (2.5) 0.3 0.6 4.9 7.5 (1.0) (0.6)
Provinces 0.3 1.0 0.0 (0.2) (0.4) 0.5 1.0 1.1 0.7 (0.1) (2.2) (2.0)
Federal 1.5 1.8 0.7 0.6 0.8 0.1 1.0 0.9 0.6 (0.1) (3.1) (3.1)
Total 1.7 2.8 0.7 0.4 0.4 0.6 1.9 2.1 1.4 (0.3) (5.3) (5.1)
* includes GSFS
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