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Yukon economic outlook 'tough news,' says analyst Keith Halliday

Economist Keith Halliday says the latest economic forecast for Yukon is 'tough news,' but not unexpected.

'We’ve been talking about diversifying the economy since the Gold Rush,' Halliday says

A drilling production stope at the Cantung Mine. In June, Cantung's parent company North American Tungsten announced temporary layoffs for 80 of its employees due to low resource prices. (North American Tungsten)

A Yukon economist says the territorial government will have to "get a little bit creative," in its efforts to shore up a slumping economy.

"It's definitely a period of tough sledding," said Keith Halliday, a Whitehorse-based economist and management consultant. "A long, hard winter, economically speaking."

The territorial government's most recent economic forecast paints a grim picture. It predicts that 2015 will be the third consecutive year the gross domestic product (GDP) contracts, and the second consecutive year unemployment rises.

The forecast blames the slump on low mineral prices. Two Yukon mines have closed in the last year — Yukon Zinc's Wolverine mine, and North American Tungsten's Cantung mine, which sits just inside the N.W.T. border but is accessed through Yukon.

"Although this is a body blow, it isn't a blind side," Halliday said.

The forecast predicts GDP to rise in 2016, when production increases at the Minto mine. At the same time, the territorial government is on a capital spending spree, something Halliday thinks makes sense when the economy slows.

But he also said the government must come up with a solid long-term plan to make the local economy more resilient.

"The government can't stimulate our economy forever," he said. "They simply don't have enough money to keep up the rate of spending that they're doing right now in the capital budget."

Halliday would like to see a more diversified economy, though he recognizes that "we've been talking about diversifying the economy since the Gold Rush started to slow down in 1903."

He points to some modest successes, such as a small but steadily growing technology sector, with companies focussed on web design and coding. But he says another "foundational" sector in Yukon — tourism — is not growing as fast as some might hope.

"There's going to be no magic bullet," Halliday said.

"There's going to be a whole bunch of brass rivets the government is going to have to deploy to support different sectors of the economy."

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