Population growth expected to boost Canada’s GDP despite interest rate hikes

New research from the Conference Board of Canada has revealed interest rates continue to impact Canadian provinces through the rest of 2023 and into 2024. However, there is a chance for GDP to increase with some localized factors, such as population growth, international travel, and increased mining activity.

The population growth in Alberta has resulted in strong employment gains despite dry spells in the southern parts of the country that caused challenges to the agriculture sector. With this, the GDP of the province is expected to increase by 2.7% in 2023 and by 1.9% in 2024. International travel to Prince Edward Island is also expected to help the local GDP to increase by 2.6% in 2023 and 1.7% in 2024.

Meanwhile, the mining industry in Manitoba has seen an increase in production, starting at Harrowby. The manufacturing sector could also see a boost with a significant new contract awarded to New Flyer to build electric buses. With these in place, the GDP of Manitoba is expected to increase by 2.5% in 2023 and 1.2% in 2024.

Other possible boosts in local GDP could come from the increased employment and population in Saskatchewan and New Brunswick, expected activity in electric vehicle battery production in Ontario on the Stellantis–LG Energy and Volkswagen battery manufacturing plants, and increased activity in the manufacturing sector as well as increased consumer spending in some regions.