Despite a slowdown in economic growth last year because of lower commodities prices, the outlook for Canada’s territories remains largely positive for 2015, says Justin Cooke, economist with the Ottawa-based Conference Board of Canada.
“Commodities prices didn’t really rebound the way we had hoped, but there are a number of projects in the territories that have gotten off the ground and are pushing forward in 2015,” he says.
A report from the Conference Board anticipates combined real gross domestic product (GDP) growth of 1.5% for the three territories, with the Yukon at 1.4%, Nunavut at 1.9% and the Northwest Territories (N.W.T.) at 1.4%. Although mining exploration has been declining, the impact of public-sector projects will stimulate the construction industry’s growth in all three territories.
Here is a breakdown of the individual territories:
– The Yukon. Statistics Canada data estimate that the Yukon’s real GDP fell by 0.7% in 2013, marking the first year of no growth in a decade. The forecast for 2014 is for a return to growth, says Derek Hynes, director of business and economic research, with the Yukon’s government. Increases in mineral production, construction activity and an upswing in tourism all are contributing factors to growth in the Yukon.
“What we’ve seen throughout 2014, leading up to 2015,” he says, “is some significant capital investment from government, which is really helping us tread water.”
Among the projects the federal government has invested in are a new high-school building and a subdivision, Hynes notes.
The mining industry continues to be challenging for the territories, and the Yukon saw lower mineral production for all minerals except copper in 2014. Alexo Resource Corp.’s BelloKeno mine suspended operations in 2013 and is not expected to be back onstream until 2016. Yukon Zinc Corp.’s Wolverine Mine is producing at 75% and will continue to ramp up production further into 2016. Victoria Gold Corp. has yet to announce a construction start date for its $40-million Eagle Gold Mine; this decision is pending on an improved investing climate, Hynes says.
– Nunavut. Last year was positive for mining in Nunavut, with another productive year ahead expected, Cooke says. In fact, Agnico Eagle Mines Ltd.’s Meadowbank gold mine exceeded its production estimates in 2014, with a positive outlook in the coming year, he adds.
“Coming off such a good year, we expect production to be slightly down from last year, but still be at a historically high level,” Cooke says.
Baffinland Iron Mines Corp.’s Mary River iron ore facility began production in the north part of Baffin Island and is applying for permits to expand the size of the mine and bump annual production to 12 million metric tons from 4.2 million tons.
Aside from mining, construction began on the Iqaluit International Airport and the $140-million Canadian High Arctic Research Station began last summer.
– The Northwest Territories. Declines in mineral, oil and natural gas prices have had a negative impact on growth for the N.W.T. But the development of new mines, infrastructure and tourism could help boost the N.W.T. to record GDP growth this year. As well, several new projects are planned for the N.W.T. over the next decade representing more than $4.5 billion in new investment.
Construction on De Beers Group’s Gahcho Kue diamond mine began in 2014, with production to start in 2016. This will be the N.W.T.’s fourth diamond mine and it comes at a time when the other diamond mines are reducing production.
In addition, three new metal mines are expected to begin operations within the next decade, with employment expected to grow by almost 2,400 workers, according to the Conference Board report.
Aside from mining, construction of the Inuvik-Tuktoyaktuk Highway, which began in 2013, will open new access to the Beaufort Sea and Arctic Ocean’s petroleum resources.
In addition, the recently completed Deh Cho Bridge eliminated a major supply bottleneck in the North Slave region, with expected positive impact on both retail and wholesale trade.
GDP, 2013 ($bil.): 9.4
GDP % change: +1.8
2014-15 surplus ($mil.):169.7
Estimated net debt ($Mil.): 146.3
Per capita wage growth, % change, 2013-14: +5.0
Household disposable income, per capita: $38,110
Figures from latest available reports/estimates
Source: conference board of canadaie chart
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