The Daily — Gross domestic product by industry: Provinces and territories, 2023 (2024)

Released:2024-05-01

Economic growth slows in2023

In2023, for the second consecutive year, real gross domestic product (GDP) grew in every province in Canada, except Newfoundland and Labrador, albeit at a slower pace compared with a year earlier for most.

In the territories, production slowed in Yukon and declined in the Northwest Territories, while Nunavut was the sole Canadian jurisdiction where economic growth meaningfully accelerated, with a nation-leading3.4% increase in2023.

Although record population growth helped spur economic activity, tight monetary policy, persistent inflation and several climate change-related events constrained output growth across Canada in2023.

Higher output from services-producing industries in every province and territory bolstered overall economic growth during a challenging year for goods-producing industries in most of Canada in2023.

Ontario, British Columbia and Alberta were the largest contributors to economic growth in2023

Ontario (contribution of +0.60percentage points) was the largest contributor to Canada's economic growth, accounting for almost half of the1.2% increase in national GDP in2023.

British Columbia (+0.23percentage points) was the second-largest contributor to national economic growth, surpassing Alberta (+0.22percentage points) and well ahead of Saskatchewan (+0.06percentage points) and Quebec (+0.05percentage points).

Newfoundland and Labrador (-0.04percentage points) was the largest drag on national economic output for the third time in six years.

Services steer several jurisdictions into positive territory…

Growth in the value-added of services-producing industries decelerated in every jurisdiction except Manitoba, Saskatchewan and Nunavut in2023. Nevertheless, the growth in services kept seven provincial and territorial economies in positive territory in2023.

Prince Edward Island (+3.0%) had the largest increase in services, led by real estate and rental and leasing (+4.5%) and public administration (+3.8%).

Demand for services was spurred by Canada's highest rate of population growth since1957(the peak of the baby boom). The public sector (consisting of educational services, health care and social assistance, and public administration) was a significant contributor to growth in every province and territory. However, educational services in Quebec (-0.5%) contracted because of strike action at elementary and secondary schools late in2023.

Client-facing industries that had been heavily affected at the start of the COVID-19pandemic in2020continued to recover in2023. Notably, accommodation and food services rose in every province and territory for the third consecutive year, albeit at a slower pace than in2021and2022.

In2023, Prince Edward Island (+7.7%) and Alberta (+7.8%) became the first provinces where GDP at food services and drinking places surpassed2019pre-pandemic levels.

The arts, entertainment and recreation sector also expanded in every province and territory in2023, led by Ontario (+18.6%), Prince Edward Island (+13.0%) and Manitoba (+12.3%).

Transportation and warehousing remained below2019levels (-7.7% on average) in every province and territory, although most did see increases in GDP in2023.

Air transportation rose at the fastest pace in Manitoba (+34.7%), Quebec (+34.2%) and British Columbia (+31.4%) as international travellers entering or returning to Canada grew43.8% in2023.

Population gains and the continuation of return-to-office requirements by employers were among factors that contributed to double-digit increases for urban transit systems.

…even as production in some service industries declined in2023

For the second consecutive year, offices of real estate agents felt the effect of higher interest rates in2023. On an annual basis, activity was down in all areas as potential buyers contended with higher borrowing costs. Canada's largest housing markets of Ontario (-12.7%), Quebec (-13.9%) and British Columbia (-10.5%) reported significant declines in offices of real estate agents and brokers and activities related to real estate. Activity at lessors of real estate grew in eight provinces and Yukon.

Lower activity at goods-producing industries in seven provinces and two territories

Output from goods-producing industries rose in Nunavut (+5.8%), Saskatchewan (+0.9%), New Brunswick (+0.7%) and Prince Edward Island (+0.2%) in2023and declined in all other provinces and territories. However, apart from Newfoundland and Labrador and the Northwest Territories, increased activity at services industries more than offset the declines in the goods-producing industries.

Construction sector volatile in2023

In2023, lower activity in the construction sector was the main detractor to growth in five provinces (Prince Edward Island, New Brunswick, Quebec, Ontario and Alberta), but construction was the largest contributor to growth in Nunavut, Saskatchewan, Newfoundland and Labrador, and the Northwest Territories.

In Nunavut, ongoing construction of a new gold mine helped engineering construction (+68.0%) more than offset the declines in residential and non-residential construction.

Residential construction was down in every province and territory in2023, with six of them reporting double-digit declines in output. The slower pace of home building had the greatest impact on residential building construction in Prince Edward Island (-15.5%), Quebec (-19.1%) and British Columbia (-12.7%).

Drought conditions return in2023

The agriculture, forestry, fishing and hunting sector was a net drain on most provincial economies in2023, except in Manitoba (+0.9%) and Ontario (+1.7%).

Crop production (except cannabis, greenhouse, nursery and floriculture production) was down in Saskatchewan (-7.5%) and Alberta (-14.1%), as below-average precipitation stunted production.

The dry conditions were also felt in the utilities sector, where electric power generation, transmission and distribution fell in Manitoba (-10.2%) and Quebec (-7.3%).

Volatility reigns in the mining, quarrying, and oil and gas extraction sector

In Newfoundland and Labrador, decreases in conventional oil and gas extraction (-13.3%) and metal ore mining (-11.1%) contributed to the2.5% decline in economic output in the province in2023.

Nova Scotia saw a fourth consecutive year of double-digit declines in gold and silver ore mining (-29.7%).

In Alberta, conventional oil and gas extraction (+6.7%) and oil sands extraction (+1.6%) rose for a third consecutive year. Combined, these two industries accounted for more than one-third of Alberta's total increase in GDP.

In the Northwest Territories, all components of the mining, quarrying, and oil and gas extraction sector contracted in2023, turning the territory's overall economic growth negative.

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