Conference Board of Canada predicts little economic growth in North over coming years
'The struggles are not over' for the territories' beleaguered economies
The global downturn in mineral prices has walloped the Northern economy, and it will be years yet before the territories regain their financial footing, says a new report from the Conference Board of Canada.
The report, released Wednesday, details the outlook for all three territories and it predicts no rapid turnaround in fortunes.
The N.W.T.'s GDP is expected to be almost flat this year, growing by just 0.7 per cent. Nunavut's will be slightly higher, but still nothing to celebrate — just 1.2 per cent.
The report says Yukon could see the most growth (2.7 per cent), but Marie-Christine Bernard of the Conference Board said the analysis was done before Capstone Mining announced a possible shutdown this year at the Minto mine, Yukon's only operating mine.
"It's been a difficult three years [in Yukon], and then if Minto ceases operations, it's going to be quite weak for a prolonged period of time," Bernard said.
"It could take a few years, or more, before we see some stability, enough to bring new mines under development."
Impact of Snap Lake on N.W.T.
The N.W.T.'s economic outlook is similarly dimmed by its mining sector, at least in the short term, the report says.
The Gahcho Kué diamond project — expected to go into production later this year — will be a boon, but De Beers Canada's decision to shutter the Snap Lake mine will have a huge negative impact. The mine accounted for about 2.4 per cent of the territory's total GDP.
"When several hundred workers lose their jobs, that's not good news for a territory," Bernard said.
The territory's GDP is expected to rebound significantly in 2017, as Gahcho Kué ramps up production.
Nunavut will also struggle a bit in 2016, the report says, but exploration spending will be higher there than in Yukon, or the N.W.T.
Nunavut will also see significant GDP-boosting public infrastructure spending, with construction of the Canadian High Arctic Research Station (CHARS) and upgrades to the Iqaluit airport.
"That's helping to negate some of the difficulties in the mining sector," Bernard said.
Still, the report underscores how important mining continues to be for the entire Northern economy. When commodity markets suffer, so do the territories.
"The struggles are not over, they're going to continue facing headwinds. I think we'll have to wait a few years before we see things turn around," Bernard said.