Interprovincial migration gains almost as large as in Nova Scotia. New Brunswick has seen a significant jump in net migration from other provinces during the pandemic, the vast majority of which is sourced from Ontario. Again, we suspect that this effect will ebb as COVID-19 is brought under more control, though affordability advantages and greater acceptance of remote work will likely support New Brunswick’s draw beyond pre-pandemic levels.
Housing activity still strong. Gains in MLS unit sales, purchase prices, and residential building construction outlays were all some the strongest of any province last year. That no doubt partly reflects the effects of interprovincial migration and should ease as these flows cool alongside housing conditions across Canada.
Backdrop still supportive of staple New Brunswick commodities. We expect the major lumber price benchmarks to remain historically elevated in 2022–23—though softer than last year’s record highs—in part because of post-GFC high housing starts in the US—New Brunswick’s primary export destination. Demand for refined petroleum may take a hit from omicron-related mobility restrictions as in earlier lockdown periods, but we think this effect will fade as the year progresses.
New Brunswick’s finances resilient to COVID-19. NB maintained a budget surplus during FY21 and expects to do it again in FY22—in part because of increased federal transfer payments. With the benefit of more fiscal room, it increased FY23–24 infrastructure spending plans by more than $250 mn (about 0.4% of 2020 nominal GDP) (chart 1).
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