Canada’s economy is expected to grow by just 1.9% in 2015 as the collapse in oil prices takes its toll on business investment and corporate profits, according to The Conference Board of Canada’s Canadian Outlook-Winter 2015. This rate of growth represents a substantial downgrade from the outlook of 2.4% released in November 2014.

Business investment will be the weakest part of the Canadian economy in 2015, according to the outlook. Real business investment on energy structures and exploration is forecast to drop by 23% in 2015.

Many firms in the oil patch have already announced steep cuts to their capital budgets, and significant layoffs are expected both in the oil industry and among businesses involved in its supply chain, according to the Conference Board of Canada. The pain will be particularly severe in Alberta and Newfoundland and Labrador, and, to a lesser degree, in Saskatchewan.

“Even before the drop in oil prices, we were projecting a small dip in overall business investment due to soft growth in domestic consumer demand,” said Matthew Stewart, associate director of the National Forecast. “Now, the sharp decline in energy-related profits will force oil companies to pull back their capital budgets.”