The immediate future does not look bright for Yukon, according to a new economic analysis from the Conference Board of Canada.
"Of all the provinces and territories, Yukon's economy is facing the bleakest near-term outlook," the report says, pointing to the fact that Yukon may soon have no working mines after Capstone Mining closes the Minto mine.
"Bad news keeps piling up for the territory's mining sector," according to the report.
The board expects Yukon's GDP to show growth of about 3.6 per cent in 2016, but then contract significantly — dropping by about 10 per cent over the next two years (7.7 per cent in 2017, then a further 3.1 per cent in 2018).
"The [Yukon] economy up until 2013/14 was doing quite well — there were mines that had just started producing. But we are looking in the next two years [at] very big declines in the economy," said Marie-Christine Bernard, an associate director with the Conference Board.
"It's going to be difficult for Yukon," she said.
Cause for optimism
The report is not all doom-and-gloom, however, citing "cause for optimism" in Yukon's more distant future, as commodity prices recover and new mines open.
It points to Kaminak's Coffee Gold project (recently purchased by industry heavyweight GoldCorp), Victoria Gold's Eagle project, and Western Copper and Gold's massive Casino project as bright spots on the horizon. The report also suggests that Alexco could further develop its Keno Hills project, if silver prices rise.
By 2024, the territorial economy is expected to be significantly on the rise again, with growth forecasted at about 10 per cent per year between 2024 and 2028.
"At that time, commodity prices should be better, the global economy should have recovered, and it should be a little bit easier to obtain financing," Bernard said.
Growth in Nunavut, N.W.T.
The near-term outlook is much better in the other territories, according to the Conference Board, with both Nunavut and the N.W.T. expecting growth by next year.
In Nunavut, the economy is expected to contract this year, but then grow by 4.9 per cent next year as metal mining is expected to rise. The report says public spending on projects such as the Canadian High Arctic Research Station, the Iqaluit airport, and new schools will also contribute to growth.
The 2020s are also looking bright for Nunavut. The territory should see "solid" GDP growth through the decade, after Agnico-Eagle's Meliadine project goes into production.
N.W.T. should also see significant growth by next year, though the territory's economy is currently at a "standstill", due in part to the recent closures of De Beers' Snap Lake mine and North American Tungsten's Cantung mine and weak commodity prices "clouding the skies," the report says.
Things will turnaround quickly, though, once the Gahcho Kué diamond mine ramps up production. The N.W.T.'s GDP is expected to jump by more than 15 per cent next year.
"This will bring the economy into higher gear," the report says.