The Canadian economy will grow at an above-potential pace for the remainder of this year, according to the RBC Economic Outlook quarterly report. Real GDP is expected to grow by 2.6% in 2017 and 2.1% in 2018.

Continuing an eight-year trend, consumers are expected to provide a large lift to the economy in 2017. With business investment on the rise and government spending on infrastructure ramping up, RBC Economics projects the economy will grow at nearly double the average pace of the prior two years.

“Canada’s economy is on track to post its strongest gain in three years,” said Craig Wright, senior VP and chief economist at RBC. “While we don’t discount the risk of a slowdown resulting from the pending renegotiation of NAFTA or the expected cooling of the housing market, we remain confident the economy will continue to grow at an above-potential pace for the remainder of this year.”

Nearly all of the provincial economies are forecast to grow, at least modestly, in 2017. British Columbia is projected to once again lead all provinces with 3.0% growth in 2017, showing few signs of a slowdown despite a 40% correction in the Vancouver housing market.          

Alberta’s economy is on the path to recovery led by an improved outlook for oil prices, which will also contribute to positive growth for Saskatchewan in 2017. However, the upturn in the energy sector will not be enough for Newfoundland and Labrador to mask deep economic contraction in other sectors, leading the provincial economy to contract a projected 2.2% in 2017.