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This article was published 21/1/2015 (2068 days ago), so information in it may no longer be current.

Manitoba is in line to enjoy a net gain from dramatically dropping oil prices, even while Alberta could slide into a recession in 2015.

A new report released Tuesday by the Conference Board of Canada forecasts Manitoba will lead the country with three per cent growth in 2015, with Alberta's economy experiencing close to a 1.5 per cent decline.

With oil prices forecast to be on average about 40 per cent lower this year compared with 2014 -- that's about $36 per barrel less -- Pedro Antunes, one of the authors of the report, said he did not think the Ottawa-based think-tank was going too far out on a limb in its impact analysis.

"That's $50 billion coming out of the economy in terms of revenue for oil producers," Antunes said.

And with 77 per cent of Canada's oil production in Alberta, there will definitely be a decline in economic activity, especially a decline from the recent peak levels.

"At this point, it seems pretty unlikely Alberta will not see some decline in economic activity this year," Antunes said.

"But it's also good to see an economy (Manitoba's) that is such a stable performer... to be so diversified to take advantage of varying opportunities. It is very positive."

The study predicts the slide in crude prices will chop $4.5 billion from provincial royalties in 2015, with the bulk of the losses expected to strike the oil-producing regions Alberta, Saskatchewan and Newfoundland and Labrador.

Due to cheaper oil, the board also predicts provincial tax revenues will drop another $5.2 billion this year.

The trickle down through the oil-industry supply chain will mean the effect will be felt across the country. But it will be more than offset in some provinces by the increase in consumer purchasing power from lower gas prices as well as increasing export opportunities with a slumping Canadian dollar that is now down to 82.6 cents US.

The report, titled Regional Shakeup: The Impact of Lower Oil Prices on Canada's Economy, suggests Manitoba and New Brunswick could see as much as 0.5 per cent added to real GDP from the 40 per cent reduction in crude oil prices, with the potential of a boost from export-led manufacturing.

Manitoba is such a small oil producer -- about 50,000 barrels per day compared with 3.7 million barrels per day in all of Canada -- there's little direct negative impact from a production point of view.

Narendra Budhia, director of the province's economic and fiscal analysis branch, said the average of the nine forecasting agencies have Manitoba at 2.6 per cent growth for 2015, but all them are likely to be revised.

The lower exchange rate bodes well for Manitoba manufacturers, and since large countries such as the U.S., China, Japan and India -- all net importers of oil -- will get a break in their oil expenditures, that could increase demands for imports from Canada.

"The IMF just came out with a report (on Tuesday) with the U.S. as one of the bright lights, so we are looking at a potential impact in export shipments," Budhia said.

Even though Manitoba's GDP growth rate in 2014 is at about 2.3 per cent, exports this year are up 8.1 per cent and manufacturing shipments are up 2.6 per cent.

Budhia said there is the potential for even stronger growth next year.

But even though the Conference Board suggests the oil price slump could generate 0.5 per cent growth in Manitoba in 2015, it has not increased its forecast for Manitoba since its last report in the fall of 2014 when the decline in oil was just starting. That means other assumptions in the Manitoba economy have not progressed as strongly since then.

Last week, federal Finance Minister Joe Oliver announced the government would take the unusual step of postponing the budget until at least April, so it could assess the fallout of tumbling crude and the sudden reduction in capital expenditures in the Alberta oilpatch.

The Conference Board report predicted crude prices to start rising again and reach US$60 per barrel by the end of 2015. It projected prices to average about US$56 for the year.

-- with files from The Canadian Press

martin.cash@freepress.mb.ca