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New Mines to Breathe New Life Into Nunavut and Yukon Economies

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New Mines to Breathe New Life Into Nunavut and Yukon Economies

 

 

 

 

 

Strong economic growth is expected in Nunavut and Yukon this year, while the economic outlook for the Northwest Territories is more muted. Growth is expected to average 1.9 per cent in the three territories in 2018 and 3.1 per cent in 2019, according to The Conference Board of Canada’s latest Territorial Outlook.

 

 

“The territories’ mining sector has wind in its sails, but economic growth is uneven across the regions. With many new mining projects on the horizon in Nunavut and Yukon, growth is expected to take off over the next five years,” said Marie-Christine Bernard, Director, Provincial and Territorial Forecasting, The Conference Board of Canada. “In the Northwest Territories, fewer developments in mining and declining diamond production are expected to weigh on economic prospects.”

 

 

Highlights

 

  • Yukon’s real GDP growth is expected to reach 8.1 per cent this year.
  • Economic growth in Nunavut is expected to hit 4.4 per cent in 2018.
  • As diamond production begins to fall, Northwest Territories’ economy is forecast to contract by 2.9 per cent this year.

 

 

Yukon

 

 

The last few years have been difficult for the Yukon economy, as depressed markets for metal mining discouraged any major mining developments and led to mines shutting down. Economic prospects in the territory should begin to improve this year, as the life of its only remaining mine has been extended and three new mines are scheduled to open over the next 10 years. Construction will also be an important contributor to Yukon’s economy over the next few years. With Victoria Gold’s Eagle project coming online and a slower ramp up in construction on Goldcorp’s Coffee project, construction output is expected to fall in 2019, but grow by almost 40 per cent per year in 2020-21. All told, Yukon’s real GDP growth is forecast to reach 8.1 per cent this year, following a 1.6 per cent contraction in 2017.

 

 

Nunavut

 

 

Nunavut’s economy is on the cusp of an unprecedented growth spurt. Real GDP is expected to grow by 4.4 per cent in 2018 and 9.1 per cent in 2019, spurred by new gold production at Meliadine and the development of new mines. New mine development will keep Nunavut’s construction sector busy, with three active mine construction sites in 2018. This should make up for a decline in government investment spending. The construction sector is forecast to grow 8.8 per cent in 2018 and 4.0 per cent in 2019. Rising mining production will also help create 2,000 new jobs in the next five years. However, less than half of those will be filled by workers from the territory as a good proportion of mining and construction jobs are staffed with fly-in/fly-out workers.

 

 

Northwest Territories

 

 

Diamond production will begin to fall in the Northwest Territories this year and all three operating mines are set to shut down operations by 2035. There are two metal mines scheduled to open in the early 2020s, but they will not be enough to compensate for the maturing diamond industry. Almost 1,300 workers who live in the Northwest Territories are expected to lose their jobs by 2035, translating into stagnant income growth and higher outmigration as residents look for opportunities elsewhere. In all, real GDP in the Northwest Territories’ economy is expected to fall 2.9 per cent in 2018.

 

Posted April 30, 2018

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