PROVINCIAL OUTLOOK UPDATE February 6, 2015

PROVINCIAL OUTLOOK UPDATE February 6, 2015 Real GDP growth 2015 Annual % change CANADA B.C. 2.4 2.7 2.9 3.1 Several developments have occurred since the publication of our most recent Provincial Outlook report in December 2014, which prompted us to revise our provincial forecasts for 2015 and 2016. These developments include: further weakness in oil prices and downgrade to our oil price assumptions for 2015 and 2016 we now assume WTI to average US$53 per barrel in 2015 (down from US$70 in December) and US$77 in 2016 (versus US$80 previously); ALTA. 2.7 0.6 SASK. 2.8 MAN. 2.9 3.1 ONT. 3.1 3.3 QUE. 2.0 N.B. 1.8 1.9 N.S. Dec-14 P.E.I 1.2 1.3 Feb-15 N.& L. 1.1 0.6 0 1 2 3 4 Source : RBC Economics Research announcements by the oil industry of additional/upsized capital expenditure reductions and project delays/postponements; the surprise interest rate cut by the Bank of Canada and resulting downward revision to our interest rate forecasts this year and next; and substantial depreciation in the Canadian dollar (versus the US dollar) and resulting downward revision to our Canadian dollar forecast now projected to end 2015 at US$0.75/C$ (compared to US$0.85 in December) and 2016 at US$0.78 (versus US$0.82 assumed previously). The effects of this combination of factors are: a dimmed outlook for oil-producing provinces, particularly Alberta but also Newfoundland and Labrador, and Saskatchewan; and slightly brighter outlook for all other provinces relative to our December forecasts. Consequently, we now expect Alberta s economy to show substantial deceleration from an estimated real GDP growth of 4.1% in 2014 to a rate of just 0.6% in 2015 (down from 2.7% in our December outlook). The risk of a recession in Alberta cannot be dismissed; however, we believe that it will be averted under our assumption of rising oil prices starting by the middle of this year, which would help rebuild confidence in the province and prevent activity from entering a full-blown contractionary spiral. Similarly, we have lowered our projections for real GDP growth in Newfoundland and Labrador to 0.6% (from 1.1% previously) and to % in Saskatchewan (from 2.8%). We also marked down our 2016 forecasts for Alberta (to 0.9% from 2.3% previously) and Saskatchewan (to 2.1% from 2.8%). The main basis for these downward revisions is the significantly greater scope and magnitude of capital expenditure cutbacks than we anticipated in December. On the other hand, we see the weaker expected value in the Canadian dollar in the face of solid US growth and lower expected interest rates adding more upside to real GDP growth across net oil-consuming provinces in both 2015 and 2016. Our updated forecasted growth rates for these provinces are generally 0.1 to 0.2 percentage points higher than they were in December, with Ontario leading all provinces in 2015 with a rate of 3.3%. Robert Hogue Senior Economist 416-974-6192 robert.hogue@rbc.com As we argued in December, it is our view that the oil price shock will result principally in a re-allocation of growth across the country albeit with a modest net negative impact of 0.2 percentage points for 2015 growth. The dominant factor driving growth in oil consuming provinces will be strengthening demand from the United States although improvement in the outlook for consumer spending and non-energy capital

PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 Export destinations by province As % of provincial GDP, 2007-2011 average 40 Exports to Alberta Exports to US 35 30 25 20 15 10 5 0 N&L PEI NS NB QC ON MB SK AB BC Source: Statistics Canada, RBC Economics Research investment arising from lower fuel prices and interest rates also will contribute to some extent. Generally speaking, provincial economies are much more exposed to the US than they are to Alberta. Provincial exports to the US measure up between 11% and 37% of nominal GDP (based on data between 2007 and 2011), whereas exports to Alberta range only between 1% and 8%. We believe, therefore, that solid US real GDP growth of 3.4% this year (as we project) and the lower dollar will produce gains in provincial exports that will easily surpass any loss in exports to Alberta. This is particularly true for Ontario and Quebec, where non-energy exports to the US are roughly seven times the size of their exports to Alberta (in terms of share of provincial GDP). Improved prospects for provincial exports to the US market will go along way toward containing the oil price shock to oil producing provinces (Alberta in particular), and thereby preventing a contagion effect from developing across Canada. Drop in oil prices to deliver a tough blow to Alberta s economy The most immediate effect of the slide in oil prices in Alberta is a significant drop in capital expenditure plans by oil companies. In January, the Canadian Association of Petroleum Producers forecasted that member companies would cut investments by 33% in Western Canada in 2015, including a 24% reduction in the oil sands. We expect that such actions would significantly drive down drilling activity and oil & gas engineering construction in Alberta. Lower drilling activity, in turn, is expected to lead to a decline in conventional oil production. We assume that non-conventional oil output will continue to increase, however, because of the ramping up of production at new and expanded projects. We estimate that the direct impact of lower capital spending in the energy sector will reduce Alberta s real GDP growth rate by more than 1.5 percentage points in 2015. Export destinations by province As % of provincial GDP, 2007-2011 average 40 Exports to Alberta 35 30 Non-energy exports to US Indirectly, the effect will spread to employment, net migration, the housing sector, consumer spending and, possibly, public sector spending. Our updated forecasts assume a decline in employment during the first half of 2015 in Alberta. Job losses could be as much as half the jobs created in 2014. Our forecasts also assume some partial reversal during the second half of this year amid rising oil prices and rebuilding confidence. Deteriorating job prospects in the near term likely will moderate net in-migration into the province, which has been very strong in recent years. We expect weaker in-migration to slow down population growth from 2.8% in 2014 to something closer to 1.5% within the next year or so (or slightly higher than the recession trough of 1.4% in 2010). 25 20 15 10 5 0 N&L PEI NS NB QC ON MB SK AB BC Source: Statistics Canada, RBC Economics Research Softening demographic fundamentals likely will weigh on Alberta s housing sector. Already there are signs of impending housing market downturns in Calgary and Edmonton, although these so far primarily reflect a loss of confidence caused by the sharp drop in oil prices rather than weaker population growth. We project home resales to decline by nearly 16% in 2015 in Alberta and housing starts to moderate from 40.6K units last year to 27.5K units this year. That being said, we expect home prices to stay relatively flat (down just 0.5% overall in the province) in 2015 reflecting the fact that the market was initially in a position of strength to withstand much of the hit. More significant price declines may occur in 2016, however. but not a knock-out punch Nonetheless, not all is bleak in Alberta. A population growth rate of 1.5% would still be stronger than the Canadian average. After a likely flurry of layoffs in the first half of the year, we would expect that businesses will start hiring again later this year. Such factors would support further growth in consumer spending in the province, albeit at a much more subdued pace than seen in the past few years. Assuming that governments refrain from slashing expenditures, we believe that there will be sufficient offsets to the negative developments to keep Alberta s economy afloat this year and next. Downside risks will remain significant, however, at a time when any substantial loss of confidence could trigger a more damaging set of dynamics. 2

Tables PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 Forecast detail Average annual % change unless otherwise indicated Nominal Real GDP Employment Unemployment rate Housing starts Retail sales CPI GDP % Thousands 13 14F 15F 16F 13 14F 15F 16F 13 14 15F 16F 13 14 15F 16F 13 14 15F 16F 13 14F 15F 16F 13 14F 15F 16F N.& L. 7.2-1.6 0.6 0.7 10.7-1.8-5.4 9.3 0.8-1.7 0.3-0.7 11.6 11.9 12.1 12.8 2.9 2.1 2.0 2.0 5.0 3.5 1.2 1.7 1.7 1.9 0.5 3.1 P.E.I 2.0 1.4 1.3 1.7 5.0 3.1 2.4 3.3 1.4-0.1 1.0 0.9 11.5 10.6 10.3 9.9 0.6 0.5 0.6 0.6 0.8 3.5 3.8 3.5 2.0 1.6 0.2 3.2 N.S. 0.3 1.9 2.4 4.0 3.2 3.9-1.1-1.1 1.7 0.6 9.1 8.9 8.5 8.4 3.9 3.1 3.6 3.9 2.9 2.4 3.5 3.2 1.2 1.7 0.6 3.2 N.B. -0.5 1.0 1.9 1.5 0.5 2.4 2.5 3.6 0.4-0.2 0.3 0.3 10.3 10.0 9.6 9.6 2.8 2.3 2.9 3.1 0.7 3.9 3.5 3.0 0.8 1.5 0.8 3.2 QUE. 1.0 1.6 2.0 1.5 3.2 3.4 3.7 1.4 0.0 0.8 1.0 7.6 7.7 7.3 7.1 37.8 38.8 37.4 35.0 2.5 2.7 3.9 3.7 0.8 1.4 1.0 3.0 ONT. 1.3 2.3 3.3 2.7 2.4 4.1 5.3 4.5 1.8 0.8 1.5 1.3 7.6 7.3 6.4 6.1 61.1 59.1 64.9 59.5 2.3 4.9 4.8 4.4 1.1 1.0 2.9 MAN. 1.8 3.1 2.8 3.7 3.3 2.9 5.5 0.7 0.1 1.6 1.1 5.4 5.4 5.0 4.9 7.5 6.2 6.9 5.9 3.9 4.1 4.6 4.3 2.3 1.8 0.7 3.0 SASK. 5.0 1.1 2.1 5.5 0.3-1.1 7.7 3.1 1.0 0.9 1.3 4.1 3.8 4.5 4.3 8.3 8.3 6.3 6.9 5.1 4.9 3.3 3.6 1.4 2.4 1.4 3.5 ALTA. 3.8 4.1 0.6 0.9 7.1 7.1-10.3 10.6 2.5 0.4 0.8 4.6 4.7 5.7 5.3 36.0 40.6 27.5 30.8 6.9 7.9 1.5 3.1 1.4 2.6 0.8 2.7 B.C. 1.9 2.8 3.1 2.8 3.2 4.5 3.1 5.9 0.1 0.6 1.2 1.0 6.6 6.1 5.6 5.5 27.1 28.4 32.9 32.0 2.4 6.0 5.5 4.9-0.1 1.0 0.4 2.7 CANADA 2.0 2.4 2.4 2.3 3.4 4.3 1.2 5.7 1.5 0.6 1.0 1.0 7.1 6.9 6.4 6.3 188 189 185 180 3.2 4.9 4.0 3.9 0.9 2.0 0.8 2.9 Key provincial comparisons 2013 unless otherwise indicated N. & L. P.E.I. N.S. N.B. QUE ONT MAN SASK ALTA B.C. Population (000s) 528 146 943 756 8,154 13,551 1,265 1,106 4,007 4,583 Gross domestic product ($ billions) 32.4 5.5 38.2 31.8 357.4 679.6 59.1 78.9 315.8 222.6 Real GDP ($2007 billions) 29.6 5.0 36.0 28.3 331.2 632.4 56.5 62.7 303.0 215.2 Share of provincial GDP of Canadian GDP (%) 1.9 0.3 2.1 1.7 19.2 36.7 3.2 4.4 17.9 12.1 Real GDP growth (CAGR, 2008-13, %) 0.1 1.5 0.8 0.1 1.2 1.2 2.0 2.6 2.8 1.6 Real GDP per capita ($ 2007) 56,017 34,404 38,223 37,415 40,622 46,666 44,639 56,693 75,605 46,964 Real GDP growth rate per capita (CAGR, 2008-13, %) -0.5 0.5 0.7-0.1 0.2 0.1 0.9 0.9 0.6 0.5 Personal disposable income per capita ($) 31,579 26,439 27,604 27,431 26,774 30,401 27,900 33,050 40,303 31,647 Employment growth (CAGR, 2008-13, %) 1.9 1.5 0.0-0.3 0.9 0.6 0.8 1.8 1.6 0.2 Employment rate (Nov. 2014, %) 54.1 61.6 57.6 56.5 59.6 61.0 64.6 67.0 69.2 59.4 Discomfort index (inflation + unemp. rate, Oct. 2014) 13.8 10.5 10.8 11.5 9.9 9.5 6.3 6.1 7.4 7.2 Manufacturing industry output (% of GDP) 2.7 8.4 7.5 10.1 13.4 11.9 11.3 6.4 7.3 6.8 Personal expenditures on goods & services (% of GDP) 42.6 68.4 70.1 64.4 58.6 56.5 57.1 40.2 40.0 63.1 International exports (% of GDP) 43.0 20.2 20.0 47.3 25.7 32.6 25.7 41.6 32.5 21.7 3

PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 British Columbia Tables Real GDP Chained $2007 millions 199,270 194,214 200,628 206,225 211,124 215,218 221,340 228,290 234,773 % change 1.1-2.5 3.3 2.8 2.4 1.9 2.8 3.1 2.8 Nominal GDP $ millions 203,951 195,966 205,996 217,460 222,565 229,685 239,948 247,482 262,146 % change 3.5-3.9 5.1 5.6 2.3 3.2 4.5 3.1 5.9 Employment thousands 2,242 2,192 2,223 2,228 2,262 2,266 2,278 2,305 2,328 % change 1.6-1.4 0.2 1.6 0.1 0.6 1.2 1.0 Unemployment rate % 4.6 7.7 7.6 7.5 6.8 6.6 6.1 5.6 5.5 Retail sales $ millions 57,794 55,288 58,251 60,090 61,255 62,734 66,522 70,170 73,629 % change 1.5-4.3 5.4 3.2 1.9 2.4 6.0 5.5 4.9 Housing starts units 34,321 16,077 26,479 26,400 27,465 27,054 28,356 32,900 32,000 % change -12.4-53.2 64.7-0.3 4.0-1.5 4.8 16.0-2.7 Consumer price index 2002=100 112.3 112.3 113.8 116.5 117.8 117.7 118.9 119.3 122.6 % change 2.1 0.0 1.4 2.3 1.1-0.1 1.0 0.4 2.7 Alberta Real GDP Chained $2007 millions 263,515 252,811 264,164 279,277 291,855 302,966 315,521 317,414 320,398 % change 1.7-4.1 4.5 5.7 4.5 3.8 4.1 0.6 0.9 Nominal GDP $ millions 295,126 246,717 270,100 299,142 315,803 338,166 362,333 325,140 359,703 % change 13.9-16.4 9.5 10.8 5.6 7.1 7.1-10.3 10.6 Employment thousands 2,054 2,030 2,024 2,100 2,172 2,226 2,275 2,283 2,300 % change 3.2-1.2-0.3 3.7 3.5 2.5 0.4 0.8 Unemployment rate % 3.6 6.5 6.6 5.4 4.6 4.6 4.7 5.7 5.3 Retail sales $ millions 61,620 56,489 59,849 63,945 68,408 73,109 78,878 80,032 82,478 % change 0.2-8.3 5.9 6.8 7.0 6.9 7.9 1.5 3.1 Housing starts units 29,164 20,298 27,088 25,704 33,396 36,011 40,590 27,500 30,800 % change -39.7-30.4 33.5-5.1 29.9 7.8 12.7-3 12.0 Consumer price index 2002=100 121.6 121.5 122.7 125.7 127.1 128.9 13 133.2 136.9 % change 3.2-0.1 1.0 2.4 1.1 1.4 2.6 0.8 2.7 Saskatchewan Real GDP Chained $2007 millions 55,183 52,553 54,756 57,938 59,737 62,716 63,431 64,826 66,214 % change 5.6-4.8 4.2 5.8 3.1 5.0 1.1 2.1 Nominal GDP $ millions 67,695 60,326 63,379 74,605 78,873 83,222 83,500 82,606 88,930 % change 29.6-10.9 5.1 17.7 5.7 5.5 0.3-1.1 7.7 Employment thousands 517 526 531 536 548 565 571 576 584 % change 2.5 1.6 1.0 0.9 2.4 3.1 1.0 0.9 1.3 Unemployment rate % 4.0 4.9 5.3 4.9 4.7 4.1 3.8 4.5 4.3 Retail sales $ millions 14,676 14,605 15,103 16,199 17,405 18,301 19,202 19,827 20,535 % change 11.8-0.5 3.4 7.3 7.4 5.1 4.9 3.3 3.6 Housing starts units 6,828 3,866 5,907 7,031 9,968 8,290 8,257 6,300 6,900 % change 13.7-43.4 52.8 19.0 41.8-16.8-0.4-23.7 9.5 Consumer price index 2002=100 115.9 117.1 118.7 122.0 123.9 125.7 128.7 130.6 135.1 % change 3.2 1.1 1.3 2.8 1.6 1.4 2.4 1.4 3.5 4

Tables PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 Manitoba Real GDP Chained $2007 millions 51,157 51,048 52,379 53,487 55,252 56,486 57,528 59,334 61,019 % change 3.8-0.2 2.6 2.1 3.3 1.8 3.1 2.8 Nominal GDP $ millions 51,920 50,636 52,896 55,758 59,126 61,323 63,350 65,208 68,804 % change 5.4-2.5 4.5 5.4 6.0 3.7 3.3 2.9 5.5 Employment thousands 602 601 609 612 622 626 626 636 644 % change 1.5-0.2 1.4 0.4 1.6 0.7 0.1 1.6 1.1 Unemployment rate % 4.2 5.2 5.4 5.5 5.3 5.4 5.4 5.0 4.9 Retail sales $ millions 14,983 14,920 15,770 16,443 16,652 17,297 18,013 18,836 19,654 % change 6.9-0.4 5.7 4.3 1.3 3.9 4.1 4.6 4.3 Housing starts units 5,537 4,174 5,888 6,083 7,242 7,465 6,220 6,900 5,900 % change -3.5-24.6 41.1 3.3 19.1 3.1-16.7 10.9-14.5 Consumer price index 2002=100 113.4 114.1 115.0 118.4 120.3 123.0 125.3 126.2 130.0 % change 0.6 0.8 2.9 1.6 2.3 1.8 0.7 3.0 Ontario Real GDP Chained $2007 millions 596,921 578,510 598,174 613,803 624,369 632,368 647,193 668,809 687,135 % change -0.1-3.1 3.4 2.6 1.7 1.3 2.3 3.3 2.7 Nominal GDP $ millions 604,282 595,433 629,500 658,635 679,616 695,705 724,300 762,713 796,933 % change 1.1-1.5 5.7 4.6 3.2 2.4 4.1 5.3 4.5 Employment thousands 6,610 6,433 6,538 6,658 6,703 6,823 6,878 6,980 7,069 % change 1.0-2.7 1.6 1.8 0.7 1.8 0.8 1.5 1.3 Unemployment rate % 6.6 9.1 8.7 7.9 7.9 7.6 7.3 6.4 6.1 Retail sales $ millions 151,697 148,109 156,276 161,859 164,503 168,253 176,430 184,935 192,988 % change 3.9-2.4 5.5 3.6 1.6 2.3 4.9 4.8 4.4 Housing starts units 75,076 50,370 60,433 67,821 76,742 61,085 59,134 64,900 59,500 % change 10.2-32.9 20.0 1 13.2-20.4-3.2 9.8-8.3 Consumer price index 2002=100 113.3 113.7 116.5 120.1 121.8 123.0 125.8 127.0 130.7 % change 2.3 0.4 2.4 3.1 1.4 1.1 1.0 2.9 Quebec Real GDP Chained $2007 millions 311,626 309,683 316,886 323,210 328,082 331,231 336,676 344,218 351,240 % change 1.9-0.6 2.3 2.0 1.5 1.0 1.6 2.0 Nominal GDP $ millions 313,595 315,531 329,670 345,732 357,431 362,846 374,338 386,933 401,341 % change 2.5 0.6 4.5 4.9 3.4 1.5 3.2 3.4 3.7 Employment thousands 3,883 3,854 3,938 3,976 4,006 4,061 4,060 4,093 4,133 % change 1.1-0.7 1.0 0.8 1.4 0.0 0.8 1.0 Unemployment rate % 7.2 8.6 8.0 7.9 7.7 7.6 7.7 7.3 7.1 Retail sales $ millions 94,816 93,759 99,590 102,556 103,753 106,301 109,183 113,493 117,655 % change 4.9-1.1 6.2 3.0 1.2 2.5 2.7 3.9 3.7 Housing starts units 47,901 43,403 51,363 48,387 47,367 37,758 38,810 37,400 35,000 % change -1.3-9.4 18.3-5.8-2.1-20.3 2.8-3.6-6.4 Consumer price index 2002=100 112.7 113.4 114.8 118.3 120.8 121.7 123.4 124.6 128.3 % change 2.1 0.6 1.3 3.0 2.1 0.8 1.4 1.0 3.0 5

PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 Tables New Brunswick Real GDP Chained $2007 millions 28,125 27,811 28,381 28,543 28,426 28,272 28,567 29,110 29,558 % change 0.9-1.1 2.0 0.6-0.4-0.5 1.0 1.9 1.5 Nominal GDP $ millions 28,422 28,825 30,082 31,409 31,751 31,900 32,675 33,496 34,692 % change 2.0 1.4 4.4 4.4 1.1 0.5 2.4 2.5 3.6 Employment thousands 361 360 358 356 353 355 354 355 356 % change 0.9-0.2-0.5-0.7-0.7 0.4-0.2 0.3 0.3 Unemployment rate % 8.5 8.7 9.2 9.5 10.2 10.3 10.0 9.6 9.6 Retail sales $ millions 10,018 10,094 10,595 11,103 11,028 11,107 11,543 11,946 12,310 % change 6.5 0.8 5.0 4.8-0.7 0.7 3.9 3.5 3.0 Housing starts units 4,274 3,521 4,101 3,452 3,299 2,843 2,276 2,900 3,100 % change 0.8-17.6 16.5-15.8-4.4-13.8-19.9 27.4 6.9 Consumer price index 2002=100 113.2 113.5 115.9 120.0 122.0 123.0 124.8 125.8 129.8 % change 1.7 0.3 2.1 3.5 1.7 0.8 1.5 0.8 3.2 Nova Scotia Real GDP Chained $2007 millions 34,625 34,753 35,806 36,073 35,950 36,042 36,851 37,662 38,392 % change 2.1 0.4 3.0 0.7-0.3 0.3 1.9 Nominal GDP $ millions 35,467 35,254 37,073 38,349 38,214 39,145 40,700 42,012 43,641 % change 4.6-0.6 5.2 3.4-0.4 2.4 4.0 3.2 3.9 Employment thousands 452 450 451 453 458 453 448 455 458 % change 1.0-0.5 0.4 0.4 1.0-1.1-1.1 1.7 0.6 Unemployment rate % 7.6 9.2 9.6 9.0 9.1 9.1 8.9 8.5 8.4 Retail sales $ millions 12,091 12,105 12,651 13,098 13,223 13,605 13,933 14,418 14,880 % change 4.1 0.1 4.5 3.5 1.0 2.9 2.4 3.5 3.2 Housing starts units 3,982 3,438 4,309 4,644 4,522 3,919 3,056 3,600 3,900 % change -16.2-13.7 25.3 7.8-2.6-13.3-22.0 17.8 8.3 Consumer price index 2002=100 115.9 115.7 118.2 122.7 125.1 126.6 128.8 129.5 133.7 % change 3.0-0.1 3.8 1.9 1.2 1.7 0.6 3.2 Prince Edward Island Real GDP Chained $2007 millions 4,658 4,678 4,783 4,861 4,908 5,006 5,076 5,142 5,232 % change 0.8 0.4 1.6 1.0 2.0 1.4 1.3 1.7 Nominal GDP $ millions 4,767 4,947 5,202 5,409 5,514 5,788 5,968 6,112 6,311 % change 3.2 3.8 5.2 4.0 1.9 5.0 3.1 2.4 3.3 Employment thousands 69 68 70 72 73 74 74 75 75 % change 0.8-1.3 2.3 3.1 1.7 1.4-0.1 1.0 0.9 Unemployment rate % 10.8 11.9 11.4 11.1 11.1 11.5 10.6 10.3 9.9 Retail sales $ millions 1,703 1,682 1,770 1,866 1,925 1,940 2,008 2,083 2,157 % change 5.1-1.3 5.3 5.4 3.2 0.8 3.5 3.8 3.5 Housing starts units 712 877 756 940 941 636 511 610 600 % change -5.1 23.2-13.8 24.3 0.1-32.4-19.7 19.4-1.6 Consumer price index 2002=100 117.5 117.3 119.5 123.0 125.5 128.0 130.1 130.4 134.5 % change 3.4-0.1 1.8 2.9 2.0 2.0 1.6 0.2 3.2 6

Tables PROVINCIAL OUTLOOK UPDATE FEBRUARY 2015 Newfoundland & Labrador Real GDP Chained $2007 millions 29,369 26,464 28,033 28,904 27,592 29,588 29,115 29,289 29,494 % change -1.2-9.9 5.9 3.1-4.5 7.2-1.6 0.6 0.7 Nominal GDP $ millions 31,434 24,972 29,063 33,497 32,365 35,832 35,187 33,274 36,356 % change 5.8-20.6 16.4 15.3-3.4 10.7-1.8-5.4 9.3 Employment thousands 221 215 223 232 241 243 239 239 238 % change 1.9-2.7 3.6 4.1 3.8 0.8-1.7 0.3-0.7 Unemployment rate % 13.3 15.5 14.7 12.6 12.3 11.6 11.9 12.1 12.8 Retail sales $ millions 7,009 7,121 7,453 7,833 8,182 8,589 8,893 9,001 9,158 % change 7.4 1.6 4.7 5.1 4.5 5.0 3.5 1.2 1.7 Housing starts units 3,261 3,057 3,606 3,488 3,885 2,862 2,119 2,000 2,000 % change 23.1-6.3 18.0-3.3 11.4-26.3-26.0-5.6 0.0 Consumer price index 2002=100 114.3 114.6 117.4 121.4 123.9 126.0 128.4 129.0 133.0 % change 2.9 0.3 2.4 3.4 2.1 1.7 1.9 0.5 3.1 The material contained in this report is the property of Royal Bank of Canada and may not be reproduced in any way, in whole or in part, without express authorization of the copyright holder in writing. The statements and statistics contained herein have been prepared by RBC Economics Research based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This publication is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities. Registered trademark of Royal Bank of Canada. Royal Bank of Canada. 7