Sometimes being a capital city can be a curse as much as a blessing as the Conference Board of Canada’s Winter Outlook publication paints a sobering picture for the economies of both Victoria and Ottawa.

According to the Outlook, reductions in public sector employment will continue to limit economic growth in cities that serve as capitals — notably Victoria and Ottawa-Gatineau.

The report suggests both economies grew by just 0.9 per cent in 2012 and the outlook is only slightly stronger for 2013.

“Victoria’s economy is forecast to expand by 1.8 per cent, as public sector employment is forecast to decline for the third consecutive year. The area’s soggy job market is trimming population growth, which, in turn, is curtailing housing demand,” said the report.

Ottawa, which has been feeling the pinch of downsizing in the federal government, is expected to see real gross domestic product growth of 1.3 per cent in 2013.

Saskatoon and Regina will be the fastest growing metropolitan economies in the country this year, while Calgary and Edmonton are forecast to have some of the strongest growth rates in the country. Saskatoon’s real GDP is expected to grow by 3.7 per cent this year to lead the country, while Regina will hit 3.5 per cent.

Calgary is forecast to grow at 3.3 per cent in 2013, though the Conference Board noted there is heightened risk of slower growth in the outlook, as a result of the unusual amount of uncertainty in the energy sector.

Edmonton, which led the country in real GDP growth in both 2011 and 2012, at 6.6 per cent and 4.4 per cent respectively, is projected to reach 3.2 per cent in 2013.

Vancouver’s economic growth is expected to accelerate slightly from 2.5 per cent last year to 2.9 per cent.

© Copyright 2013