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Edmonton's economy hottest in Canada: CIBC

Western city tops ranking for first time as Calgary slips into second spot

 

OTTAWA -- Edmonton's weather may be cold but its economy isn't, says CIBC World Markets, which reported Monday that the Alberta capital has the hottest local economy in Canada, surpassing Calgary.

 

Montreal, Toronto and Vancouver also rank high in economic activity, while there's little economic momentum in the national capital region of Ottawa-Gatineau, according to CIBC's economic activity index, which is based on nine economic variables.

 

"For the first time on record, the city of Edmonton tops our city ranking in terms of economic momentum," it said, crediting strong population growth, impressive employment gains, low unemployment rate, and below-average personal and corporate insolvency rates.

 

Calgary, meanwhile, slipped into second spot with a score of 24.5, compared with 30.1 for Edmonton. Calgary's slippage reflects what the report said was a slowdown in the pace of job creation momentum in the city -- less than that of Edmonton, Saskatoon and Victoria -- and a cooler housing market.

 

Saskatoon reached third spot with a score of 23.7, propelled by strong job and population growth, and the hottest housing market in the country.

 

"Interestingly, Montreal is currently enjoying some renewed momentum," the report said, noting that Montreal's third-place score of 22.8 -- the only other city with a ranking above 20 -- indicated improvement in labour and housing market activity. However, the report cautioned that the momentum in Montreal's industrial economy -- based on data up to September -- is not likely sustainable with a loonie at or near parity with the U.S. dollar.

Toronto, the country's largest city, had a consistently strong showing in the rankings with a score of 17.5. This reflects the growing diversity of the city, which has the fourth-fastest population growth in the country, and which boasts relatively high-quality employment. However, its labour market is softening with below-average job growth and above-average unemployment of 7%.

 

Vancouver's ranking, at 17.3, just slightly below Toronto's, is due to the fact that -- while it did not excel in any area -- the city was above average in many areas, including strong population and job growth.

 

Among the larger cities, Ottawa-Gatineau had the lowest ranking at just 4.7, reflecting what the report's author CIBC economist Benjamin Tal said was "some softening in employment growth, housing activity and non-residential building permits." There has been a cooling in the city's large high-tech sector, which was very strong over the past two years.

 

The other cities and their rankings were: Sherbrooke 16.3, Victoria 15.8, Trois-Rivieres 13.6, Regina 12.5, Saint John 11.4, Quebec City 10.2, Halifax 9.1, Kitchener 8.8, Greater Sudbury 7.9, London 7.8, Hamilton 6.0, St. John's 5.5, Kingston 3.4, Thunder Bay 3.0, St. Catharines-Niagara 2.4.

 

Two cities had negative readings -- Saguenay -2.8 and Windsor -3.3 -- highlighting the difficulties in their manufacturing sectors.

 

"The recent appreciation in the dollar and the weakening in the U.S. economy are probably adding another layer of difficulties facing those cities," the report said.

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