Oil, power and Olympics expected to boost construction in 2006
An economic report by BMO Financial Group suggests that growth in Canada will continue to be "tilted to the west" i...
An economic report by BMO Financial Group suggests that growth in Canada will continue to be “tilted to the west” in 2006. However, Newfoundland and Labrador will be the exception to this geographic trend.
Saskatchewan, Alberta and B.C. have all exceeded the national growth rate since 2004, and in Alberta and British Columbia growth will be even stronger in 2006, says the report. In other regions of the country growth has been at or below the national average over the same period.
The report says that national growth in 2006 will rise to 3.5 per cent.
Rick Egleton, senior vice-president and chief economist with BMO Financial Group, commented: “Alberta’s growth will be boosted by rising oil production and the ramping up of construction on oil sands mega-projects, while in British Columbia, a construction boom — in part due to preparations for the 2010 Winter Olympics — will increase growth.”
Newfoundland’s growth is expected to be 5.2% in 2006 thanks to nickel production under way at Voisey’s Bay and offshore oil developments. However, its continued economic expansion depends on whether further mega-projects proceed, said the report. For instance, high oil prices have renewed interest in developing the Hebron-Ben Nevis oil field, which was cancelled in 2002.
In New Brunswick construction of a $750 million liquid natural gas terminal in Saint John and the $1.4-billion refurbishment of the Point Lapreau nuclear station are expected to create growth of about 3% in 2006. Work has begun on the terminal and the nuclear plant refurbishment has been approved by the government and is to take place between 2006 and 2009.
Ontario’s economy is expected to grow at about the same level, around 3%. The report stresses the importance of the power generation industry, where projects such as the $4.25-billion retrofit of two nuclear units by Bruce Power have been announced. There is also a $1-billion construction expansion being carried out at the Sir Adam Beck hydro-electric station at Niagara Falls.
The BMO report on Quebec says economic growth was 2.9% in 2005, below the national average. However, non-residential construction was strong at 4.2% in the second quarter. Major construction works include the $800 million extension of the Montreal metro to Laval, and the pending construction of two new superhospitals in Montreal, each costing $1.1 billion. There are also four large hydroelectric developments under way, together valued at $5 billion. They will add 1,500 megawatts to the province’s electricity grid.
Quebec and Ontario’s forest products industry is ailing, but the federal and provincial governments have announced financial support, including for electricity co-generation projects.
To see the full report and details about other provinces, visit www.bmo.com/economic/regular/regional122005.pdf