Kirsten Plester

• Consistent with our national forecast, we’ve embedded upgrades to 2026 real GDP growth across most provinces. That said, the drivers of these boosts vary, with a solid Q2 boosting Ontario, oil production lifting regions like Alberta, and investment supporting B.C. 
• Regional growth divergences are set to widen into 2027 as tariffs, export bans, and higher energy prices create a clear divide between commodity-producing and manufacturing-oriented provinces. Alberta, Saskatchewan, and Newfoundland & Labrador are benefiting from stronger oil prices through higher incomes, profits, and government revenues. In addition, they’re relatively insulated from trade disruptions thanks to commodity exemptions and more diversified export markets. In contrast, Ontario, Quebec, Nova Scotia, and New Brunswick face a double headwind from disproportionate tariff exposure and higher energy costs, with few offsetting benefits from the commodity price upswing.
• Federal and provincial governments have rolled out new waves of support in response to escalated trade frictions, including loan programs, wage subsidies, grants and EI enhancements. These measures should provide some offset to new external shocks.
• Recent better-than-expected employment gains have pushed unemployment rates lower across most provinces, though softer hiring next year is expected to slow further improvement. At the same time, sharply weaker population growth – including outright declines in Ontario, Quebec, B.C., Manitoba, and Newfoundland & Labrador – will restrain both labour force gains and upward pressure on jobless rates.
• Renewed conflict in the Middle East has pushed WTI oil back to the $100/bbl mark and reinforced a source of uncertainty for the economic outlook. Alberta, Saskatchewan, and Newfoundland & Labrador are benefiting through sizable revenue windfalls, energy-sector incomes and profits. Elsewhere, higher prices are a net drag.
• The combination of rising yields and downgraded economic activity underpins broad-based downgrades to growth in home sales and average home prices. On the latter, B.C. and Ontario are an exception, where compositional forces (i.e. stronger sales growth in more expensive properties) are supporting average prices. This trend is likely to persist in the near term. 

https://economics.td.com/provincial-economic-forecast