Yukon government issues gloomy economic forecast

The Yukon government has released its fall economic forecast, and it's not very sunny. GDP is expected to contract for the third year in a row, and unemployment is expected to rise into 2016.

GDP expected to contract for third year in row, unemployment to rise

Premier Darrell Pasloski says capital spending will help shore up the sagging economy.

A dour economic outlook for Yukon has put the territory's premier on the defensive this week. The fall outlook shows the territory's productivity is in decline, and unemployment on the rise. 

Yukon's gross domestic product (GDP) contracted in 2013 and 2014, and the new outlook predicts it will be down again in 2015, by about six per cent. The government blames the global downturn in the mineral industry.

"In spite of the decreased commodity prices that we've seen for the last few years, in spite of the decrease in revenues, this government continues to post modest surpluses," premier Darrell Pasloski told the legislative assembly on Wednesday.

Pasloski also said his government is spending all it can to shore up the sagging economy.

"We continue to be able to put out record capital budgets, investing in infrastructure, to be ready for when the economy turns," Pasloski said. 

Liberal leader Sandy Silver was not impressed, saying Yukon was "the only place in Canada where the economy will shrink for the third year in a row."

The forecast does predict a modest turnaround in 2016, with GDP expected to rise as production at the Minto mine increases.  

Yukon's unemployment rate has also taken a negative turn in 2015, according to the economic outlook. After dropping in 2014, unemployment is predicted to hit 6.7 percent, up from last year's average of 4.3 per cent. It's expected to rise further in 2016, to 7.5 per cent.