Edmonton will lead Canada’s largest metropolitan economies in gross domestic product growth in 2002, according to the latest Metropolitan Outlook from The Conference Board of Canada.

“Edmonton’s GDP growth will hit 3.2%, driven by strong energy investments and continuing diversification in the service sector,” said Louis Thériault, associate director of the Metropolitan Outlook Service. “Over the next five years, Edmonton’s economic prospects will continue to be among the brightest in the country.”

Calgary’s economic growth is expected to slow to 2.4% due to more caution in the energy sector, but continued imigration will boost the service sector and housing starts, preventing any further slowdown.

After contracting by 3.9% in 2001, economic growth in St. Catharines-Niagara will be boosted in 2002 by the massive casino project in Niagara Falls, leading to economic growth of 3.9%, the fastest rate of the top 25 economies in the country.

Other cities at the top of the list include Sudbury, which will post modest GDP growth thanks to a recovery in mining production and a rebound in the service-producing industries, and Quebec City, which will post good output and employment growth.

Of the largest metropolitan economies in the country, Montreal, Toronto and Ottawa-Hull will suffer the most in 2002.

Ottawa’s economy, hit hard by the meltdown in telecom equipment manufacturing, is in recession. Economic growth, which was a sluggish 1.3% in 2001, is forecast to fall to 0.6% in 2002. Still, while the telecom sector sputters, the government sector continues to roll along. After years of downsizing, the federal government has returned to the labour market in a big way, somewhat muting the negative effects of the “tech wreck”.

A slowdown in Montreal’s manufacturing sector, illustrated by the closure of General Motors’ plant in Sainte-Thérèse, will cause the city’s economy to slow. Montreal’s real GDP growth is expected to average 0.9% in 2002.

After four years of sustained growth, Toronto’s economy has been unable to shake off the effects of the weak U.S. economy. Toronto’s real GDP growth is expected to remain sluggish through the first half of 2002, averaging just 0.4% over the entire year. However, Toronto has one of the most diversified economies in Canada, which shelters the city from slowdowns in any one sector. As the economy recovers fully, Toronto is expected to become the
fastest growing metropolitan economy in 2003.

Previous editions of the Metropolitan Outlook examined the economies of 11 Canadian cities. For 2002, the report has been expanded, and now examines issues such as recent trends in manufacturing, job creation and housing construction for 25 Canadian cities. As well, it provides insights on the medium-term prospects (five-year forecast) for the cities, their related provinces and Canada.