The breakneck pace of growth in Alberta has the province’s economy on track to exceed that of Quebec within as few as two years, becoming Canada’s second largest provincial economy.
That’s the conclusion of a trio of senior economists, including Statistics Canada’s chief of current analysis Philip Cross, who noted Thursday that Alberta’s double-digit growth in nominal output, or nominal GDP, is running at a rate four times faster than Quebec.
Last year, Alberta’s economy was $215 billion, while Quebec’s was $275 billion. Ontario’s was $538 billion.
“It’s closing fast on Quebec, frankly,” Cross said of Alberta’s economy.
“At current rates of growth it should take about three years and it’s conceivable in two. That’s what double-digit growth will do and growth is substantially accelerating this year.”
Cross calculated that at current rates Alberta’s economy will grow to $329 million in 2008, while Quebec’s would expand to just $309 billion.
In 2007, Alberta’s GDP would amount to $286 billion and Quebec’s $297 billion.
“Alberta is just off the scale this year. It continues to be China-like,” said Cross.
Other experts said the pace of growth in Alberta is creating significant challenges for monetary authorities and other policy-makers who are charged with trying to keep growth in Canada reasonable and even.
In contrast to Alberta, Ontario came close to satisfying the technical requirements of a recession earlier this year.
“It certainly would be a bit of milestone,” said Rick Egelton, senior vice-president and chief economist of the Bank of Montreal.
“It suggests that the Western economies, and Alberta in particular, are increasing in importance of the Canadian economy. There’s just no getting around that.
“It poses tremendous challenge for policy-makers because you have the Bank of Canada trying to find what’s the right monetary policy for this kind of bifurcated economy.”
Richard Corriveau, regional economist for Alberta for the Canada Mortgage and Housing Corp., said Thursday Alberta is expected to lead Canadian provinces in economic growth through 2008 and possibly in 2009.