With Lower Oil Prices, U.S. Recovery a Bright Spot for Canadian Economy — Glen Hodgson’s Economic Outlook for ’15

Glen Hodgson, chief economist with the Conference Board of Canada

Growth in the U.S. economy and the export opportunities that come with it are expected to offset some of the impact of low oil prices on the Canadian economy. The coinciding weaker Canadian dollar won’t hurt exports either, notes the chief economist with the Conference Board of Canada.

Real GDP by Province, 2015

B.C., Manitoba and Ontario are expected to be economic growth leaders, while Alberta, Newfoundland and Saskatchewan will be hurt by the correction in oil values (source: Conference Board of Canada)

“This is a good time if you’re exporting. You’re going to get more earnings out of it and have a more competitive product. That ideally will be the locomotive that pulls Canada along this year,” said Glen Hodgson at the CropConnect conference in Winnipeg last week.

With lower oil values, the Conference Board is projecting national economic growth of 1.9 per cent in 2015, down from 2.4 per cent in 2014. Trade with the U.S. is expected to be a bright spot, as the board sees the U.S. economy gaining momentum in 2015.

Of course, in light of the grain transportation challenges of the last few years, a farmer in the audience in Winnipeg inquired whether Canada has the appropriate infrastructure in place to capture export opportunities in the U.S., and — in the longer-term — in Asia.

“We have to find a way to really focus a lot more and go through a catch-up where we actually build our ports, our rail systems, our cross-border gateways, and find a way to ensure we have adequate infrastructure to take advantage of the export opportunities,” noted Hodgson.

Hodgson shared his outlook for the main factors impacting the Canadian economy in 2015, what they mean for Canadian farmers, and why he thinks now would be a good time for the federal government to begin winding down the supply management system in dairy:

More from CropConnect ’15:

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