TORONTO - Fourth-quarter results released by the Ontario Finance Ministry on Thursday showed the province's economy was still growing at the end of 2007, but at such a slow rate that one of Canada's top economists is warning a minor recession is a possibility this year.

The figures show Ontario's economy grew at 0.1 per cent between October and December, compared with growth of 0.2 per cent for all of Canada over the same period. By comparison, the United States economy grow at the same rate as Ontario's in the fourth quarter.

Finance Minister Dwight Duncan said he was "cautiously optimistic'' Ontario's economy would keep growing in 2008 and would not fall into negative territory, noting the province has done well considering the challenges of a high dollar and faltering U.S. economy.

"This is a North America-wide phenomenon,'' Duncan said. "We feel it, but we're also seeing that the diversity of our economy, the kinds of investments that we're making as well as the private sector, are helping to keep us in positive territory.''

Don Drummond, senior vice-president and chief economist at TD Bank Financial Group, said Ontario could slide into negative growth before things start picking up again in 2009, noting he is forecasting growth of just 0.5 per cent for the year.

"My guess is if we're right on our annual forecasts of 0.5 (per cent), there will certainly be a negative quarter somewhere, could quite possibly even be two consecutive negative quarters, which would be our traditional definition of a recession,'' Drummond said.

"The Ontario economy at the moment is going sideways. Whether it's on a sight negative tilt or a slight positive tilt, I think is pretty irrelevant. It's going sideways, and in our forecast it will continue to go sideways until well into 2009.''

Drummond called the outlook "pretty bleak,'' but said any downturn would not be like the deep recessions of 1981 and '91, "but it's still very weak, and that will drive up the unemployment rate.''

Progressive Conservative Leader John Tory said the province is teetering on the edge of negative growth, and complained that the Liberal government's high tax policies are to blame for the loss of 200,000 manufacturing jobs.

"(Premier Dalton) McGuinty will continue to point to the economy as a healthy specimen, whereas I think it's a poor, anemic specimen compared to what we've been used to in the past,'' Tory said.

"It's really no growth at all and it's heading towards negative growth.''

The New Democrats are also worried about job losses in manufacturing and forestry, but instead of tax cuts, they want more direct investments to help struggling companies.

"At 0.1 per cent (growth), it seems to me that we are skirting with a recession,'' said NDP finance critic Michael Prue. "For us to go down one point and be in recession is eminently possible, and I think government saying it's all business as usual is the wrong attitude.''

Prue said the government's budgetary estimates are off the mark, and warned the Liberals would be hard-pressed to keep their promise to tackle poverty if revenues turn out to be far less than anticipated.

The figures from the Finance Ministry showed that consumer spending remained strong in Ontario, growing at 2.4 per cent in the fourth quarter, its strongest quarterly gain in 23 years.

Non-residential construction was up 3.3 per cent in the fourth quarter, while residential construction investment grew 1.6 per cent, the fifth consecutive quarterly increase.

But overall, imports outpaced exports in the fourth quarter, slowing Ontario's growth, with exports down 0.6 per cent in the final quarter.

Finance Ministry economists still predict modest growth for Ontario this year, with early results showing manufacturing exports were up in the first quarter of 2008, Duncan said.

However, he cautioned there are still pressures from the high dollar and the slowing U.S. economy -- the primary market for most of Ontario's manufactured goods.