Canada’s economy is navigating a precarious path as 2024 unfolds, with a backdrop of higher interest rates and a global commodity environment that could cushion some regions while exposing others to sharper slowdowns. Recent forecasts from Desjardins economists underscore a bifurcated landscape: a broad national backdrop of cooling activity, tempered by pockets of resilience tied to commodity production, energy infrastructure, and mining. The Bank of Canada’s rate increases have been instrumental in braking activity, and many forecasters expect continued softness through the year as households adjust to higher borrowing costs and businesses recalibrate investment plans. Yet within this framework, certain provinces appear better positioned than others to weather the coming months, thanks to unique asset strengths, ongoing projects, and recovery trajectories in key sectors. This article synthesizes the latest outlook, highlights provincial variances, and examines the implications for households, investors, and policymakers as Canada moves through 2024.
Canada’s national outlook for 2024: growth, risks, and key drivers
Canada’s real GDP growth is projected to stall near minimal levels in 2024, with a baseline forecast of roughly 0.1 percent growth, down from 1.1 percent this year. This projection reflects a combination of lingering demand restraint and ongoing adjustments in investment and household spending in the wake of tighter monetary policy. The sharp rise in the Bank of Canada’s policy rate has continued to restrain borrowing costs and cool overheated sectors, reinforcing a macro environment characterized by cautious consumption, selective investment, and modest export gains in certain resource-heavy industries. Economists anticipate that the economy will experience a delicate balance of gradual improvement in some commodity sectors against continued drag from others, as firms and households adapt to the new borrowing-cost environment.
On the inflation-adjusted front, the broad narrative remains that price pressures have cooled sufficiently to support policy stability, yet inflation trends continue to influence rate expectations and business planning. The evolving global energy market—shaped by oil prices, Middle East dynamics, and pipeline capacity in Canada—will influence overall activity, investment decisions, and net export performance. The Canadian data stream continues to show mixed signals: growth in some sectors is being offset by weakness in others, particularly those tied to housing, consumer debt servicing, and non-energy business investment. Against this backdrop, the Desjardins forecast emphasizes a divergence: regions with abundant energy resources and export-oriented infrastructure are more likely to experience a steadier trajectory, while highly indebted households and regions dependent on cyclical sectors face sharper near-term pressure.
From a policy perspective, market participants will be watching central bank communications for hints about the path of interest rates and the timing of rate adjustments. While a number of forecasters argue that the Bank of Canada should pause or hold steady given the cooling economy, the risk landscape remains sensitive to global financial conditions, the trajectory of inflation, and external demand for Canadian goods. In this context, the economy’s fate will be shaped not just by domestic demand, but by a combination of supply-side developments in energy, mining, and infrastructure that can mitigate downturn risks and support growth in specific corridors. The balance of risks is nuanced: a recessionary impulse could intensify if rates remain high for longer than expected or if global demand softens further, while a rebound or stabilization could be accelerated by the timely completion of major export-oriented projects and an uptick in commodity prices that raises national income and investment incentives.
Within this national framework, several macro indicators warrant close attention. The evolution of gross domestic product, sectoral contributions, and regional variances will continue to inform forecasts. The pace of employment growth, wage dynamics, and consumer confidence will interact with housing-market fundamentals and debt servicing costs to define the household sector’s resilience. Additionally, the performance of the manufacturing sector, as measured by indicators like the PMI, will offer clues about the underlying momentum in production and new orders. The coming months will test the degree to which Canada’s economy can weather a cooling trajectory while preserving employment and protecting household purchasing power amid elevated debt service obligations.
Provincial spotlight: Alberta, Saskatchewan, and Newfoundland and Labrador lead the way
As Desjardins’ study of regional dynamics shows, three provinces stand out for their relative capacity to weather the storm: Alberta, Saskatchewan, and Newfoundland and Labrador. Each province benefits from a distinctive mix of resource fundamentals, export dynamics, and infrastructure investments that collectively bolster resilience and support a brighter near-term growth path than other regions. While the national picture remains constrained, these provinces offer a more favorable structural balance once the headwinds of higher interest rates are accounted for.
Alberta: Energy strength, export capacity, and a rebound in production
Alberta is forecast to lead Canada’s growth in 2024 with an estimated 1 percent expansion in real GDP, underscoring the province’s relatively robust energy sector and its capacity to attract investment even in a higher-rate environment. The persistence of strong oil prices and a commitment to incremental production increases signal a rebound in Alberta’s energy output next year. The forecast foresees a favorable price environment for Western Canadian crude, which helps to sustain provincial revenue, support employment, and encourage activity in related supply chains.
Several structural catalysts support Alberta’s outlook. First, there is an expectation of higher oil output as existing fields resume or expand operations in the coming years. Second, new export capacity from the Trans Mountain Pipeline expansion is anticipated to come online later in the year, which should narrow the discount between Canadian and U.S. oil prices and improve the competitiveness of Alberta’s crude in key markets. This capacity expansion is especially important for maintaining export volumes and price realizations in an environment where marginal supply and global demand dynamics influence pricing. Third, Alberta’s broader energy ecosystem benefits from a growing sense of certainty around project approvals and investment timelines, which can translate into job creation and increased activity in related sectors such as manufacturing, trucking, and service industries that support energy production and logistics.
Beyond crude oil, Alberta’s energy mix includes ongoing developments in natural gas and related infrastructure, as well as a resilient services sector that benefits from regional population growth and the province’s role as a manufacturing and industrial hub. The combination of rising exports, a projected rebound in production, and strategic infrastructure investments positions Alberta as a regional anchor for Canada’s economic performance in 2024. The province’s economic complexity is increasingly supported by a broader, integrated approach to energy development, value-added processing, and trade relationships, which helps insulate Alberta from more pronounced downturn pressures that affect resource-dependent regions with less diversified income streams.
Saskatchewan: Uranium, potash, and mineral diversification
Saskatchewan presents a complementary resilience story through its advanced mining sector, including uranium production and potash development. The Desjardins forecast highlights uranium as a key growth driver for the province, particularly given the restart of the McArthur River and Cigar Lake mines. This restart signals not only direct employment gains but also a broader uplift in the province’s mineral processing capabilities and export potential. Saskatchewan’s mining sector is deeply embedded in global supply chains for nuclear energy and agricultural inputs, reinforcing the province’s exposure to higher demand for critical minerals in a world increasingly focused on clean energy and agricultural productivity.
In addition to uranium, Saskatchewan is seeing activity around potash—an essential fertilizer component—accentuated by announcements such as BHP Group’s plan to invest significantly in potash projects near Saskatoon. The second stage of the Jansen potash development, which is a flagship project for Saskatchewan’s mining sector, illustrates the potential for substantial capital expenditure that can underpin mining jobs, ancillary industries, and regional infrastructure development over multiple years. This mining momentum supports not only direct employment in mining operations but also provides spillover benefits to manufacturing, logistics, and service sectors that serve the broader resource economy.
The province also benefits from a supportive export framework and potential improvements in transportation and logistics that facilitate the movement of minerals to international markets. The synergy between higher commodity prices, investment in mine expansion, and a favorable global demand environment for minerals translates into a more resilient growth path for Saskatchewan in 2024, even as other parts of the country slow. Saskatchewan’s diversified mineral base—coupled with infrastructure projects and improvements in export capacity—helps cushion the province against broader Canada-wide GDP softness and positions it for continued, though measured, growth.
Newfoundland and Labrador: Activity revival on oil fields and new offshore projects
Newfoundland and Labrador has faced years of slower output, but the Desjardins forecast points to a clearer recovery trajectory for 2024. The province’s ongoing adjustments center on oil production dynamics and the potential reactivation or expansion of offshore fields. White Rose development is ramping up activity as operations ramp in the near term, while Terra Nova has been offline since 2020, with prospects for its restart under consideration as part of the broader offshore program. The offshore oil sector remains a significant driver for the provincial economy, given its high-value exports and strong multiplier effects on local services, manufacturing, and supply chains that support offshore operations.
Beyond the current fields, major projects such as the West White Rose offshore extension and the Voisey’s Bay underground mine (which promises to extend mineral extraction activity underground) are also highlighted as catalysts for growth. These initiatives offer prospects for sustained employment, capital investment, and improved regional income prospects across Newfoundland and Labrador. The forecast for the province reflects a balance between the recovery in offshore oil activity, potential project commencements, and the broader energy-services ecosystem that supports exploration, extraction, and infrastructure development. As a result, Newfoundland and Labrador is positioned to contribute meaningfully to Canada’s subdued national growth pace while offering relatively stronger performance relative to regions reliant on other, more cyclical sectors.
Ontario and British Columbia: Housing, debt, and the risk of contraction
Ontario and British Columbia, two of Canada’s largest provinces by population and economic output, present a contrasting picture within Desjardins’ outlook. While Ontario’s performance in 2023 benefited from population growth, housing market momentum, and a recovery in production, the province’s near-term outlook is clouded by the debt-intensive profile of households and the sensitivity of housing markets to higher borrowing costs. The housing market—historically a central engine of Ontario’s growth—faces heightened vulnerability as mortgage rates rise and households adjust to tighter credit conditions. In 2024, Ontario’s real GDP is projected to contract to -0.1 percent, down from 1.2 percent in 2023. This implies a delicate balancing act where a potential rebound in net exports or selective investment could be offset by a deteriorating housing market and consumer spending constraints.
British Columbia’s trajectory mirrors a similar vulnerability pattern, with a forecast for real GDP to pull back to -0.1 percent in 2024 from 0.7 percent in 2023. The underlying challenge for British Columbia lies in its housing market dynamics and household indebtedness, which heighten sensitivity to rate hikes. As the Bank of Canada maintains a restrictive stance on policy rates to combat inflation, households in these provinces bear the brunt of higher debt-service costs, which constrains discretionary spending and dampens consumer demand. The housing market represents a critical risk channel in both Ontario and British Columbia: affordability pressures, tighter mortgage underwriting standards, and the need for households to manage debt levels all contribute to a slower growth path relative to the national average.
In Ontario and British Columbia, the housing market remains a central determinant of economic momentum. The combination of higher mortgage costs, debt loads, and a cautious consumer posture reduces the probability of a robust reacceleration in these provinces over the near term. Compounding these factors is the vulnerability of households to interest-rate fluctuations, which dampens consumer confidence, reduces large-ticket purchases, and can curtail investment by small and mid-sized businesses reliant on local demand. Nevertheless, both provinces maintain structural strengths—large urban economies, diversified services sectors, and significant infrastructure opportunities—that can support a stabilization or gradual improvement if housing tensions ease and credit conditions become more favorable over time. The interplay between housing affordability, debt servicing capacity, and policy guidance will continue to shape Ontario’s and British Columbia’s growth trajectories as 2024 progresses.
Aggregate data trends and market signals: what the numbers are telling us
The national data flow in 2024 has painted a picture of an economy transitioning from a growth phase to a more restrained period. The latest Statistics Canada releases indicated that gross domestic product remained flat in August, with early estimates for September confirming no growth, intensifying concerns that Canada has entered a modest technical recession. Economists interpreted this as a signal that the Bank of Canada should pause or pause its rate hikes, allowing policy rate stability to work through the economy’s balance sheet and demand channels. The data underscore that the economy’s momentum has shifted from expansion to stagnation, reinforcing the narrative that higher borrowing costs are constraining household consumption and business investment.
Market observers highlighted the alignment between the macro data and the regional forecasts: provinces with resource-driven growth, improved export capacity, and infrastructure developments could outperform, even when the national aggregate remains subdued. Analysts suggested that if the macro environment remains anchored by higher rates and slower growth, the next phase of policy discussions would likely emphasize the duration of rate stabilization and the risks of any policy missteps that could tilt the economy into sharper contraction. In this environment, the behavior of financial markets—particularly on fixed-income and commodity-related assets—will reflect evolving expectations about inflation, growth, and policy trajectories, with investors seeking to balance yield, risk, and resilience in commodity-linked sectors.
Despite the broad softness in GDP, several forward-looking indicators point to pockets of increase in supply chain activity and production in the resource sector. For example, continued interest in mining and energy infrastructure projects suggests that investment could re-accelerate, particularly if commodity prices hold firm and if pipeline capacity comes online as planned. The broader macro story remains that Canada’s economy is pivoting toward a more selective growth model, emphasizing strategic sectors such as energy, mining, and related services, alongside ongoing adjustments in consumer demand and credit markets. As data evolve, policymakers and business leaders will need to monitor indicators of housing-market dynamics, consumer debt levels, and export performance to gauge the path of Canada’s recovery and the potential for a more durable stabilization in 2024 and beyond.
Household finances in a rising-rate environment: debt, budgets, and practical steps
A central thread in the national narrative is the cost of living crisis and the pressure on Canadian households to manage debt amid higher interest rates. Debt counselors and financial advisors have highlighted practical steps households can take to break cycles of high debt and constrained budgets. The core advice focuses on building sustainable spending plans, prioritizing essential expenditures, and creating emergency buffers to weather interest-rate volatility and potential income shocks. The conversation around personal finance is increasingly shaped by the knowledge that rate hikes have heightened monthly debt-service costs for millions of Canadians, thereby reducing discretionary spending and limiting the ability to save for large purchases or unexpected needs.
Key strategies recommended by experts include conducting a comprehensive review of monthly expenses, identifying nonessential subscriptions, renegotiating terms with lenders where possible, and consolidating high-interest debt where feasible to reduce overall interest costs. Additionally, households are encouraged to build and maintain an emergency fund to cover several months of essential living expenses, which can help mitigate the risk of financial distress during downturns or periods of unemployment. Financial education and proactive planning are essential to resilience, as is seeking professional advice when navigating complex financial products, such as variable-rate loans, credit lines, and mortgages tied to fluctuating rates.
Beyond individual actions, macro-level policy signals—such as targeted support programs, credit-market regulation, and macroprudential measures—play a role in shaping household resilience. The outlook for household finances in Canada remains contingent on a combination of wage growth, job security, and the ability to manage debt under a higher-rate regime. As the economy adjusts, households that adopt prudent financial behaviors, diversify income sources, and plan for risk will be better positioned to weather the economic environment, even as the broader economy experiences slower growth.
Commodity cycles, mining, and energy: the engine rooms of regional resilience
The Desjardins outlook emphasizes the centrality of commodities and related sectors to Canada’s regional resilience. Oil, uranium, and potash—together with broader mining and energy developments—are poised to influence national performance more than other sectors in the near term. Alberta’s oil sector, Saskatchewan’s uranium and potash industries, and Newfoundland and Labrador’s offshore oil activities form a triad of regional strengths that can buffer Canada from sharper national downturns. The drivers are clear: sustained demand for energy and minerals, ongoing capacity expansions, and the potential for price stability or modest appreciation that improves export values and investment incentives.
Oil markets will continue to shape the trajectory of Western Canada’s economy. High oil prices support investment, production, and employment in Alberta, while any supply constraints or geopolitical tensions can magnify price swings, thereby affecting provincial budgets, household incomes, and business budgets dependent on energy revenues. Saskatchewan’s uranium industry has the potential to benefit from broader global demand for clean energy, where nuclear power remains a key component of low-carbon electricity generation. The restart of major mines like McArthur River and Cigar Lake provides a clear growth signal, adding high-wage jobs and generating regional economic activity through services and manufacturing that support mining operations.
Nova Scotia? Not applicable here. Newfoundland and Labrador’s offshore sector remains a critical generator of economic activity, with near-term potential tied to White Rose’s ramp-up and the possibility of Terra Nova’s restart. The West White Rose offshore extension and Voisey’s Bay’s underground development are additional catalysts, signaling sustained investment, job creation, and regional development. Taken together, these commodity-driven engines create a foundation for provincial resilience that complements ongoing export-oriented growth in pipelines and infrastructure expansions.
The potential impact of these sectors on national GDP hinges on several factors, including commodity price trajectories, operational efficiency, regulatory approvals, and access to financing for large-scale projects. If commodity prices stay favorable and major projects progress as planned, these sectors can provide a stabilizing effect on Canada’s overall growth rate, offsetting some of the weakness seen in more consumer-focused domains. In addition, the expansion of export capacity, such as the Trans Mountain Pipeline expansion, can improve the competitiveness of Canadian crude and related products, supporting provincial revenues and job creation in both upstream and downstream industries. As a result, the commodity complex remains a central pillar of Canada’s regional resilience and its capacity to mitigate broader macroeconomic headwinds in 2024.
Data signals, policy context, and the road ahead
The nexus of data, policy, and market sentiment will continue to shape Canada’s economic path through 2024 and into the following year. With GDP showing a flat or stagnant trajectory in recent months, the policy outlook remains cautious, with markets closely watching central-bank communications for signals about rate trajectories and inflation management. The Bank of Canada’s policy stance and the timing of any further rate movements will depend on the evolving inflation picture, labor-market dynamics, and the degree to which external demand evolves in a slower-growth environment. The conversation around rate policy emphasizes balancing the need to contain inflation against the risks of suppressing growth and job creation.
Global market conditions, including the stance of the U.S. Federal Reserve, also matter. The Fed’s policy stance and its communications about future rate decisions can influence Canadian financial conditions through exchange rates, capital flows, and investment expectations. While Canada’s domestic outlook centers on the interplay between housing affordability, consumer debt, and export performance, it remains vulnerable to global risk factors that could affect commodity prices and demand for Canadian products. The timing and sequencing of policy moves—whether the BoC pauses, holds, or moderates its pace of rate changes—will be guided by evolving data and the economy’s ability to absorb a higher-rate regime without tipping into deeper recessionary pressures.
Within this policy data landscape, corporate earnings and sectoral performance will be important barometers. Earnings releases from energy, mining, and related sectors provide signals about investment activity, productivity, and margins in an environment of higher rates and uncertain demand. Financial markets will also respond to forward-looking indicators, such as manufacturing and services sector activity, consumer confidence metrics, and housing-market indicators. As these signals consolidate, forecasters will refine projections for provincial growth differentials, national GDP outcomes, and the pace at which the economy rebalances toward sustainable, low-volatility expansion.
Practical implications and takeaways for stakeholders
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For policy makers: The regional disparities underscore the importance of targeted support that leverages resource-sector strengths while addressing vulnerabilities in housing markets and household balance sheets. Policy emphasis on infrastructure investment, export capacity, and energy transition-related projects can bolster growth where it is most viable.
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For businesses: Resource-based industries—oil, uranium, potash, and related services—remain central to Canada’s growth narrative. Firms should plan for slower but more resilient demand in 2024, with an eye on efficiency gains, supply-chain diversification, and capital expenditure that aligns with commodity-price expectations and export-market dynamics.
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For households: Given the higher debt-service burden and slower income growth envisioned in the near term, prudent budgeting and debt management are essential. Consumers should focus on building emergency reserves, evaluating refinancing opportunities, and avoiding high-cost credit products that could magnify financial risk in a lower-growth environment.
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For investors: A nuanced approach to portfolio allocation is warranted, with a tilt toward commodity-linked assets, infrastructure investments, and select mining opportunities in regions with favorable project pipelines. Risk management strategies should account for potential volatility in energy prices and regulatory developments, while maintaining exposure to regions with structural growth drivers.
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For regions and communities: Local government and industry stakeholders should coordinate on leveraging energy and mineral development to create durable employment and diversification. Infrastructure upgrades, training programs, and community support for evolving sectors can help maximize the positive spillovers from resource-driven growth.
Conclusion
Canada’s economic outlook for 2024 presents a mixed but navigable landscape. The anticipated 0.1 percent real GDP growth signals a national economy that remains unusually sensitive to monetary policy, housing-market dynamics, and global commodity cycles. Yet within this environment, Alberta, Saskatchewan, and Newfoundland and Labrador demonstrate notable resilience due to energy, mining, and offshore resource activity, supported by infrastructure expansions and export-readiness. Ontario and British Columbia face more pronounced near-term risks tied to housing affordability and household debt, presenting a cautionary note for the broader national trajectory. The data underscore a need for careful policy calibration, targeted provincial strategies, and a focus on balance-sheet resilience for households. As Canada moves through 2024, the path forward will hinge on the ability to sustain investment in resource sectors, advance key infrastructure projects, and manage debt pressures in a way that supports steady growth, employment, and long-term economic health.