OTTAWA, ON, March 4, 2026 /CNW/ - Trade uncertainty remains a key factor shaping Canada's provincial economies, as elevated policy risks continue to suppress business confidence and consumer spending, according to new research from Signal49 Research, formerly operating as The Conference Board of Canada.

"This year will set the stage for the rest of the forecast period, as the fate of Canada's provincial economies in large part hinges on the renegotiations of the Canada-U.S-Mexico Agreement later this year," stated Richard Forbes, Principal Economist at Signal49 Research. "Additionally, demographic trends will play a central role in labour markets in the coming years. After several years of rapid population increases, sharply lower immigration targets have triggered a slowdown in population growth."

This forecast was finalized prior to the escalation of armed conflict involving Iran in late February 2026. The impact on Canada's economy becomes larger the longer the disruption brought on by the conflict goes on. Higher crude oil prices will be inflationary across the country and further pressure consumers, while oil producing provinces will see an economic boost as reliable sources of oil supply.

Strong agricultural output and elevated investments in potash and uranium mining will underpin growth in Saskatchewan, supported by large projects including the Jansen potash mine and NexGen Energy Ltd.'s Rook 1 uranium development. The province is expected to see modest population growth and employment gains, as well as a small recovery in exports. Saskatchewan's GDP is expected to increase by 2.0 per cent in 2026.

Healthy output from Alberta's resource sector, coupled with a comparatively strong demographic outlook, will drive the province's growth this year. Relatively strong population growth, fuelled by international and interprovincial migration, alongside employment growth, will support strong household spending over the near term. While export growth remains modest, non-residential investment will support investment activity between 2027 and 2030. The province's economy is projected to expand by 2.0 per cent in 2026.

Newfoundland and Labrador is projected to be one of the strongest performers among the provinces in the short term, supported by the ongoing rebound in oil production. However, an older population and low migration rate are expected to drive population declines over the next two years, weighing heavily on labour force and employment gains over the remainder of the forecast. The province's GDP is expected to rise by 1.8 per cent in 2026.

Following LNG Canada's first shipments in 2025, energy exports are expected to drive a small rebound in British Columbia's exports, while strong income growth will prop up household spending despite slower population growth and labour market conditions. Investment in energy projects will lead a recovery in non-residential investment. GDP is projected to expand by 1.7 per cent in 2026.

A potential new trade agreement with China would provide a boost to Manitoba's agri-food sector. Moderate population growth and employment gains are expected to underpin household spending, while investment will be driven by major projects such as CancerCare Manitoba's new headquarters and Deep Sky's carbon capture facility. GDP is projected to rise by 1.4 per cent in 2026.

Strong job gains are expected to support moderate household spending growth in Prince Edward Island, alongside a strong tourism sector, as Canadians continue to favour domestic travel. Private investment is also poised for growth, led by utilities and tourism projects such as the $80-million redevelopment of the Ocean View Resort. GDP is projected to grow by 1.3 per cent in 2026.

In Nova Scotia, slower population growth will constrain employment gains and cool household consumption, tempering economic activity. Weak export performance and subdued non-residential investment will further limit growth prospects. As a result, GDP growth is projected to moderate to 1.2 per cent in 2026.

New Brunswick's outlook is being held back by weak in-migration, and a projected population decline over the next two years, which will weigh on household spending. A limited pipeline of major projects will also strain the economy, although several developments in the works are set to support investment growth over the rest of the forecast period. New Brunswick's economy is projected to increase by 1.0 per cent in 2026.

Ontario faces ongoing uncertainty in the manufacturing sector, particularly in automative and steel industries, due to trade tariffs. Population declines in 2026 and 2027 are expected to temper household spending, though strong residential investment will help offset some of the weakness as builders respond to pent-up housing demand. Overall, the provincial economy is forecast to grow by 0.8 per cent in 2026.

Economic headwinds from tariffs on steel, aluminum, and forest products, as well as a restrictive migration polices, will drag on Quebec's economy. Despite these challenges, steady income growth and elevated household savings will support consumer spending. Quebec's GDP is forecast to expand by just 0.7 per cent in 2026.

About Signal49 Research (formerly operating as The Conference Board of Canada)

Signal49 Research, formerly operating as The Conference Board of Canada, is the country's leading independent research organization. For more than seven decades, Signal49 Research has been providing research that supports evidence-based decision making to solve Canada's toughest problems. Follow Signal49 Research on LinkedIn at the link here. For more information on our organization, please visit the link here.

SOURCE Signal49 Research