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Economic growth shifts from east to west

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The continuing resources boom has shifted economic growth from east to west. Since 2003, Alberta and British Columbia have outpaced the nation.

Alberta led the provinces in growth for a third consecutive year in 2006, rising 6.8%, adjusted for inflation. Oil prices are the main driver, but the effects are rippling throughout the province’s economy—and beyond.

British Columbia, at 3.6%, outpaced the national average for a fifth consecutive year in 2006. The construction industry benefited from demand for housing and investment for the 2010 Olympics. And Yukon’s economy continued its three-year surge, up 2.9% from 2005, as high prices for metals and minerals spurred exploration.

Machinery and equipment manufacturing for the Alberta market benefited Saskatchewan, but the province’s economic output rose just 0.4% in 2006, down from 3.1% growth in 2005. Ideal growing conditions led to strong exports of canola and wheat: thus, Manitoba outpaced the national average in 2006 for the first time since 1998.

The same factors lifting Western Canada have dampened growth east of Manitoba. High commodity prices have pushed up the loonie and fuel prices, which makes manufacturing more expensive and slows exports. Ontario and Quebec, the traditional manufacturing centres, have fallen short of the national average from 2003 to 2006.

Newfoundland and Labrador grew 2.8% in 2006, thanks to the first full year of production at a new nickel mine and oilfield. New Brunswick gained 2.6% with the re-opening of two pulp and paper mills. Prince Edward Island’s economy grew 2.0%, helped by an improved potato harvest and construction of a wind farm.