Recession likely for B.C. as housing and forestry hit downward slide: report

Credit: City of Vancouver

The Deloitte Canada report has mostly grim news for the province, but some silver linings nationally 

Deloitte Canada’s latest report, “Tight monetary policy to squeeze economic growth,” predicts more or less what economists and, ahem, this magazine, have been saying for awhile: a recession is coming this year. But Deloitte is a little more optimistic than it was last quarter for the country overall, and it’s predicting better growth prospects in 2024 and ‘25.  

In the coming federal budget, Deloitte expects the government to prioritize affordability measures for lower-income Canadians, additional support for provinces to fund health care, and investment incentives for reducing carbon emissions. 

Deloitte is also predicting that both the Federal Reserve in the U.S. and the Bank of Canada will move to cut interest rates by the end of the year in a process that will see them move back toward their neutral level. The key factor there is inflation, which came in at 5.9 percent in January, according to Deloitte—a fall from the 6.3 percent of December 2022 and the lowest growth since March of last year.  

For B.C., Deloitte is a little less optimistic. “British Columbia will be hard hit be the downturn in its housing market and the drop in key goods-producing sectors such as forestry and non-residential construction, as work begins to wind down on the LNG Canada facility, Coastal GasLink pipeline and the Trans Mountain expansion project,” reads the report.  

Overall, Deloitte forecasts that the country’s real GDP will fall by 0.5 percent this year and rebound with growth of 2 percent in 2024.