2 September 2009

Quebec's recovery beating other provinces: TD

The following is excertped from the 1 September 2009 edition of "cbc.ca".

Quebec's economy is emerging from the global recession in better shape than those of other big provinces such as Ontario, Alberta and British Columbia, a report said Tuesday.

TD Bank Financial Group said Quebec's housing market has remained relatively buoyant while the same sector has crumbled in other provinces.

As a result, consumers in Canada's main-French-speaking province had sufficient confidence to continue spending even as the national economy slide into a recession in 2008.

Measured from the economy's most recent gross domestic product growth peak to its recessionary trough, Quebec's GDP contracted by 2.3 per cent. That number — while indicating a shrinking economy — was less than half of the 5.3 per cent experienced by the national economy, TD said.

"The Quebec economy would present a picture of relative stability through the major swings in the global economy as well as financial and commodity markets," Drummond wrote in the 12-page report.

Latest month                    Que.         Ont.
Retail trade                        up 1.8%  up 0.1%
Housing starts                  up 22%   down 15%
Unemployment rate         9.0%        9.3%
Source: Statistics Canada

The province also benefited from $30 billion in new infrastructure spending that was announced in 2007, he said....

By contrast, other regions received new public works cash in the latest round of stimulus spending, a factor which likely will translate into later economic gains, economists said.

In addition, Quebec sidestepped most of the country's auto sector woes, unlike Ontario, the TD report said.

Even with the province's relatively decent economic performance, Quebec faces big challenges in the coming years, Drummond said.

He predicts Quebec will have to re-evaluate its big-ticket services, including $7-a-day childcare, low university tuition and below-market electricity rates.

The report also says Quebec will have to deal with a budget deficit, increased international competition and its aging workforce.

TD estimates that Quebec's population will begin to decline in 2014, one year later than the bank's 2007 forecast, but still a bad sign for economic growth.