Ontario's economy turning in its best performance since the late 1980's

• Ontario exporters are benefiting from very strong demand from the United States
• Robust employment growth, combined with income-tax cuts, will boost incomes
• A sharp rise in living standards will keep Ontario consumers on a spending spree

Quebec will enjoy healthy job creation this year

• Consumers will enjoy strong job creation as well as income-tax cuts
• Quebec's manufacturing sector will enjoy another prosperous year
• Quebec's economy benefiting from the rally in world commodity prices

TORONTO - Following two years of uneven growth across Canada's regions, all of Canada's provincial economies are expected to fare well over the 2000-01 period, say TD economists in their latest report, TD Quarterly Economic Forecast. "The standard of living of Canadians, which suffered a setback during the 1990s, is now on a steady climb," says Derek Burleton, Senior Economist at TD Bank Financial Group. "Canadians can look forward to healthy job creation, stronger wage increases and further cuts to personal income-tax rates by the federal and provincial governments this year."

After-tax incomes across the provinces should rise by more than 5 per cent per year on average in the 2000-01 period, note TD economists. "This translates into a gain of 2 per cent per year on a real per-capita basis - the strongest advance in Canadians' living standards since the late 1980s," adds Burleton. "Although all provinces are expected to share in these gains, Newfoundland, Ontario and Alberta will boast the largest increases in living standards both this year and next."

Ontario's economy still prospering
"Ontario's economy is enjoying boom times, as consumers remain on a spending spree, housing markets are still hot, and exports to the United States are thriving," says Burleton. Although there are few signs as yet that Ontario's economy has begun to slow down, the expected moderation in U.S. growth in the second half of 2000 will lead to a cooling off in Ontario's powerhouse manufacturing sector. In contrast, "rapid growth in Ontario's service industries this year and next will continue to be fuelled by consumer spending, which in turn will be supported by strong job growth, rising wages and further reductions in personal income-tax rates by the provincial government," he adds.

Quebec's economy in good shape
"Economic growth in Quebec surpassed the national rate for the first time in 12 years in 1999, and the provincial economy should continue to perform well in 2000 and 2001," notes Burleton. In spite of an expected slowdown in U.S. growth this year, the province's manufacturing sector will continue to power ahead, led by a rapid expansion in the aerospace, biotechnology and telecommunications industries. In addition, the resource-based industries, such as forestry and metal mining, will have a better year in 2000, bolstered by the ongoing recovery in world commodity prices. "Supported by the steady rise in employment, and the first significant dose of tax relief, which will be implemented at mid-year, Quebec's consumers can look forward to a marked improvement in living standards this year and next," adds Burleton.

Real gross domestic product in 1992 dollars
Estimate and forecast by TD Economics as at January 2000
Source: Statistics Canada, TD Economics

For more information, please contact:

Derek Burleton
Senior Economist
(416) 982-2514