Looking to a changing frontier

From diamonds to airports and research stations, the North is continuing to grow. But the optimism is uneven, with the Yukon facing a decline in GDP this year

By: donalee Moulton
February 1, 2017 November 9, 2019
00:40

Two of Canada’s north ern territories can look forward to brighter economic outlooks. One territory, however, is facing a future a report from the Conference Board of Canada (CBoC) calls “bleak” – although that prognosis may improve, thanks to the recent extension of a mining permit.

“As commodity markets rebalance and prices start to recover, a few new mining projects are expected to be under development and start producing before the end of the decade,” notes Marie-Christine Bernard, the CBoC’s associate director, provincial forecast, in Ottawa. “In the meantime, public-sector investment in infrastructure will help the territorial economies over the near term.”

Nunavut and the Northwest Territories are predicted to fare well moving forward. Although Nunavut’s real gross domestic product (GDP) is expected to contract by 2.1% this year, GDP growth of 4.9% is predicted for 2017 as metals mining rebounds. Infrastructure investment also is an economic bright spot in Nunavut. Among the more noteworthy projects are continued work on the Canadian High Arctic Research Station, upgrades to Iqaluit’s airport and work on public housing and new schools. Over the long term, the CBoC’s latest report states, Nunavut can expect to see solid GDP growth for the majority of the 2020s following the start of gold ore production at the Meliadine mine.

However, the closure of De Beers Canada’s Snap Lake diamond mine at the end of 2015 will restrict GDP growth in the N.W.T. this year to just 0.3%. But there is good news on the horizon: diamond production is expected to gain important new ground. De Beers’ Gahcho Kué diamond mine, which began operations last summer, is poised to produce 5.3 million carats this year. In conjunction with other non-metallic mineral mining, the impact on the N.W.T.’s GDP is expected to be significant, leading to 15.6% growth.

The Yukon is struggling. Minto Exploration Ltd. received an unexpected extension for its open-pit quartz-mining operations in late December, forestalling closure of the Yukon’s last mine. As a result, operations should continue through 2017. While the impact of that project is not known, the CBoC report predicts that the Yukon’s GDP – which grew by about 3.6% in 2016 – will contract by 7.7% in 2017 and by 3.1% in 2018.