Despite lower numbers than predicted for 2012, the economies of Canada’s three territories continue to grow, thanks to the strong, successful mining sector.
“There have been lower commodities prices and delays in some mining projects,” says Marie-Christine Bernard, associate director, provincial economic trends, with the Ottawa-based Conference Board of Canada. “But the overall economic outlook remains largely positive, particularly over the long-term forecast.”
The Conference Board expects combined real GDP growth of 3.3% for all three territories this year, with the Yukon at 6.5%, Nunavut at 5.9% and the Northwest Territories (NWT) at 0.2%. Although commodities prices have experienced declines over the past year, long-term mining projects and mining exploration projects for precious and base metals are still booming, resulting in a strong economic forecast for the territories as a whole.
Here is a closer look at the individual territories:
– The Yukon. Overall, 2012 remained a strong year for the Yukon, with the mining sector continuing to be the primary driver of economic growth, says Currie Dixon, the Yukon’s minister of economic development in Whitehorse.
The Yukon’s labour force reached an all-time record high in 2012 of 20,400; as well, the territory saw an increase in mining production. The Yukon has six new mining projects that are in the “advanced permitting” stage, and there are several projects already in “advanced exploration.”
“This is our seventh consecutive year of growth in mineral production,” Dixon says. “And we expect that number to go up over the years, as the Wolverine mine is going into full production this year.
“With the increased economic activity, as well as a growing population,” he adds, “both the housing and infrastructure sectors will experience some stresses. We have been looking at increasing our available land, and we have seen a marked increase in housing construction.”
The Yukon is starting to have more jobs available than people to fill them; and with a labour force that is growing more quickly than the unemployment rate, Dixon is preparing to deal with the labour shortage.
@page_break@ “We are trying our best to co-ordinate our activities with the private sector to recruit and retain staff here in the Yukon,” Dixon says. “The Yukon is not only a great place to work and make money, but also a great place to live and raise a family.”
– The Northwest Territories. The NWT has a mining industry that is reaching maturity, putting a cap on the strong economic growth of the recent past, the Conference Board’s Bernard says. With a strong dependence on the diamond industry, the territory is expected to see a drop in final 2012 growth numbers.
That’s due to a decline in overall diamond production. The opening of De Beers Canada Inc.’s Gahcho Kué mine, adds Bernard, will not be enough to make up for the production that will be lost with the shutdown of BHP Billiton Canada Inc.’s Ekati Diamond mine in 2019 and the Diavik Diamond mine, a joint venture between Harry Winston Diamond Corp. and Diavik Diamond Mines Inc. that will close in 2021.
However, the metals mining output will increase tenfold over the medium term, with the opening of three new metals mines over the next five years. In turn, the NWT also will see some growth within its construction industry as several of these new mines continue with their development plans. Bernard forecasts that Vancouver-based Canadian Zinc Corp.’s Prairie Creek Mine will begin construction in 2013, as well as Fortune Minerals Ltd.’s NICO project, which consists of cobalt, gold, bismuth and copper mining.
“Both of these mines are scheduled to start early construction in 2013,” Bernard says, “and they will be able to compensate a little bit for the weakness that we see in the mining industry in the NWT.”
– Nunavut. Growth in 2013 will no longer be in the double digits, Bernard says, as construction plans for the Mary River project, a proposed iron ore mine located on North Baffin Island in the Qikiqtani region, are delayed.
However, Agnico-Eagle Mines Ltd.’s Meadowbank mine, the only producing mine in Nunavut, is predicting an increase in production in 2013.
In mining exploration, says Bernard, expenditures reached an all-time high in 2011, when mining companies spent $535.7 million in Nunavut. Companies in the Yukon and NWT, by contrast, spent a combined $425.5 million. But because commodities prices dropped in 2012, spending is forecast to drop to $426.5 million in 2013.
Population: 113,147
GDP 2011 ($bil.): 9.4
GDP % change: +6.0
2012-13 surplus ($mil.): 177
Estimated net debt ($mil.): 685
Personal Disposable income/ capita: $36,629
Figures are from latest available reports/estimates
Sources: Statistics Canada; conference board of Canada
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