Manitoba: Golden boy or laggard?

The province hasn’t gone bust, but it also never really boomed

Manitoba: Golden boy or laggard?

Forget everything you thought you knew about the Western Tigers: booming B.C., Alberta and Saskatchewan. Quiet, humble Manitoba, which boasts one of the country’s lowest unemployment rates, is the new envy of the West, according to a report by the Canada West Foundation. Its highly diversified economy and slow-and-steady fiscal gait have, by and large, helped the province avoid the Great Recession, says report author Jacques Marcil. Others would “love to be” in its position, adds Marcil, noting that the province’s economy hasn’t contracted as much as other provincial economies.

Not so fast, says Niels Veldhuis, senior economist at the Vancouver-based Fraser Institute. Manitoba is “anything but the envy of the West—or most other provinces,” he says. Manitoba isn’t seeing the same degree of fiscal contraction as the rest of the West because it never expanded in the first place: that is, no boom, no bust. In a downturn, says Veldhuis, more successful economies like B.C. or Alberta simply feel the pain more deeply than unsuccessful ones.

Like Manitoba, Atlantic Canada has fared well over the course of the recession, adds Charles Cirtwill, president of the Atlantic Institute for Market Studies. They were cushioned by an outsized public sector—“the only truly recession-proof industry.” (So far, the public sector has been spared deep cutbacks.) If you consider purely private sector forecasts, Manitoba, says Veldhuis, is expected to be near the bottom of the rankings for real GDP growth for 2010. And of the four western provinces, Manitoba is the only province seeing net out-migration, adds Veldhuis. Manitobans—whose disposable incomes are still $10,000 lower than Albertans’ and $2,400 lower than in neighbouring Saskatchewan—“continue to vote with their feet.”