Monday’s announcement that Canadian GDP rose in the third quarter may have indicated an end to the recession, but a closer look at the numbers shows that Canada’s major cities are still hurting from the economic downturn, the latest CIBC Metro Monitor reports.

The Metro Monitor, which uses macroeconomic variables to develop a metropolitan index of economic activity, finds that economic momentum in Canada’s top metropolitan centres is at its lowest level since 1991. Ten of the country’s top 25 urban areas are showing negative growth, according to the report.

“While the Statistics Canada report provides us with a sense of the sectoral breakdown of the disappointing performance, it is silent on the regional distribution of the pain,” says Benjamin Tal, senior economist and author of CIBC’s Metro Monitor.

“On a year-over-year basis, our index continued to trend downward, giving us some early warnings regarding the soft GDP numbers. After all, more than two-thirds of Canadian GDP is generated in Canada’s major cities. So the tale of those cities is the tale of the economy.”

Ten cities are now in negative territory, double the number in the first quarter of the year. Nine of the ten cities are located in Ontario and Quebec, reflecting the multi-dimensional challenges facing the two provinces due to weakening manufacturing and forestry sectors, decreased demand for imports in the U.S. and the strong Canadian dollar.

For the first time, the city of Halifax took top spot in CIBC’s ranking of the economic momentum in Canadian cities.

“Halifax was able to move its way into the first spot in our third quarter ranking – a notable improvement from its fifth spot six months ago,” says Tal. “The nation’s leading ranking of Halifax was achieved despite the fact that the city did not lead the nation in any of our macro categories, reflecting its relatively diversified sources of economic growth and reduced vulnerability to economic shocks.”

Regina and Saskatoon ranked second and third respectively. They were able to maintain their high rankings based on rapidly growing populations and a continued expansion of their job markets, according to CIBC. Both cities also enjoy very low unemployment rates as well as extremely low rates of both business and consumer bankruptcies.

Growth in Alberta has lost momentum, Tal noted, reflecting softer mining and drilling activity.

“Calgary and Edmonton, which until recently were the stars of our index, (are) losing ground rapidly and currently hardly above water in terms of overall economic momentum,” he says.

Vancouver’s overall performance is also relatively weak, with the city now ranked 12th in Canada – its worst performance in years – despite the fact that the city has seen much activity in advance of the upcoming Olympic Winter Games.

Toronto has also lost significant ground in recent quarters. CIBC’s Metro Monitor now ranks the city seventh in the nation – down from a second place ranking in the first quarter of the year. The drop is attributed to poor employment performance, increased bankruptcies and a big drop in new housing starts.