OTTAWA, ON, Aug. 27, 2025 /CNW/ - The ongoing trade dispute between Canada and the United States is dampening both business and consumer confidence, weighing heavily on provincial economies, according to new research from The Conference Board of Canada.
"While the trade disruption with the United States is clouding Canada's near-term outlook, demographics will play a crucial role in shaping Canada's economic trajectory over the longer-term," said Richard Forbes, Principal Economist at The Conference Board of Canada. "Slowing population growth driven by the federal government's revised immigration targets, will strain labour markets, alter population dynamics, and limit growth in the coming years."
Newfoundland and Labrador is grappling with challenging population dynamics including an aging population, low international migration, and persistent negative interprovincial migration. Despite this, the province is set to be the top performer in 2025, driven by a strong rebound in oil production. GDP growth is forecast to grow 1.8 per cent in 2025 and a further 1.2 per cent in 2026.
Alberta's economy remains exposed to resource-led uncertainty, but increased diversification is expected to support GDP growth. Employment growth is expected to be above the national average, leading to GDP growth of 1.7 per cent in 2025 and 2.0 per cent in 2026.
The impacts of drought conditions and tariffs on Saskatchewan's agricultural sector are weighing on the province's economy, but the medium-term outlook is being propped up by potash and uranium mining. The provincial economy is expected to grow by 1.6 per cent in 2025 and 2.1 per cent in 2026.
The launch of LNG Canada's export facility coupled with ongoing investment in energy projects will support British Columbia's economy. Still, due to the completion of several major projects, the province's outlook for investment remains subdued this year. Real GDP is forecast to grow by 1.5 per cent in 2025 and 1.7 per cent in 2026.
In Nova Scotia, a modest population decline will constrain employment gains and dampen household spending, while a lack of upcoming major construction projects will further curb economic momentum. The province's economy is projected to expand by 1.3 per cent in 2025, followed by 1.2 per cent in 2026.
Ontario's economy is being hit hard by the tariffs on motor vehicles and steel. Job losses in the manufacturing sector have strained the province's labour market and employment growth is expected to slow amid weaker migration. Ontario's GDP is anticipated to grow by 1.2 per cent in 2025 and 1.4 per cent in 2026.
Buoyed by relatively strong interprovincial migration, Prince Edward Island is poised to lead Canada in population and job growth. In addition, as more Canadians choose domestic travel over U.S. travel, the province's tourism sector will be a bright spot. P.E.I.'s economy is expected to grow by 1.1 per cent in 2025 and a further 2.1 per cent in 2026.
Quebec's economy will face headwinds from weak business investment, aluminum tariffs, and demographic trends. The steep levies on metals and aluminum are straining key industries, while the pause in construction of EcoPro's $1.2 billion electric vehicle battery plant in Bécancour will contribute to a significant investment decline. The province's economy is projected to expand by 1.0 per cent in 2025 and 1.1 per cent in 2026.
Manitoba is struggling with the combined impacts of U.S. and Chinese tariffs and a devastating wildfire season. Moderate gains in household spending are expected, while a steep decline in international exports will be partially offset by strength in agricultural exports. The economy is set to grow by 1.0 per cent in 2025 and 1.6 per cent in 2026.
New Brunswick's population is projected to decline in the coming years due to weak in-migration, which will suppress employment growth across the province. With a broadly weak outlook for business investment, economic growth potential in the province will remain subdued. GDP growth is forecast to slow to just 0.9 per cent this year before rebounding to 1.5 per cent in 2026.
About The Conference Board of Canada
The Conference Board of Canada is the country's leading independent research organization. Since 1954, The Conference Board of Canada has been providing research that supports evidence-based decision making to solve Canada's toughest problems. Follow The Conference Board of Canada on Twitter @ConfBoardofCda.
SOURCE Conference Board of Canada
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