According to The Conference Board of Canada, the medium-term outlook for Yukon is very positive, Nunavut will see mild contraction after a strong 2017 and the Northwest Territories' economy is expected to sputter after surging this year
OTTAWA—According to The Conference Board of Canada’s Territorial Outlook, the Northwest Territories and Nunavut can expect strong growth this year, while a mild contraction in the economy is forecast for Yukon.
The medium-term on the other hand looks much more promising for Yukon, while Nunavut and the N.W.T. are expected to experience contraction after 2017.
The report expects Yukon’s economy to contract by 0.7 per cent this year, followed by several years of strong growth, averaging 6.6 per cent over 2018–20.
The Conference Board says that sustained mining production will keep the economy afloat until construction begins on two new mines set to open before 2020—mines projected to boost growth in the territory’s mining sector by 20 per cent.
The mining sector’s renewed strength is expected to provide a boost to related industries, including transportation and warehousing, and commercial business services.
The construction sector is projected to be a bright spot for Yukon’s economy over the next few years as well, driven by public spending and eventually new mining projects.
Job creation is forecast to improve in the territory over the next five years, averaging 790 new jobs annually.
The Conference Board says Nunavut’s economy has stayed strong through the correction in commodity prices, and that is expected to continue in 2017, with a 6.4 per cent expansion forecast.
The report finds metal mining is the single largest contributor to economic growth, and all operating mines are planning increases in production in 2017.
However, decreased production at one mine in 2018, Agnico Eagle’s Meadowbank operation, is expected to help drive down Nunavut’s total GDP by 0.2 per cent next year.
Nunavut’s construction sector is projected to surge this year, but that is expected to be followed by three weaker years as a number of large projects are completed.
The report says service-based industries will benefit from the territory’s strong population growth, and Nunavut’s employment is forecast to grow slightly faster than the labour force, allowing for more solid increases in real wages and salaries per employee.
N.W.T.’s economy is expected to grow by 12.2 per cent in 2017.
The report attributes this to De Beer’s Gahcho Kué diamond mine undertaking its first full year of production following its opening in 2016.
However, the Conference Board says that the outlook beyond 2017 is not as encouraging.
No metal mines have been in operation in the territory since the Cantung mine closed in 2015, and its oil and gas production continues to decline.
N.W.T.’s real GDP is forecast to decline by an average of 1.7 per cent annually over 2018-20.
The territory’s construction industry is expected to continue its decline this year, mainly due to the completion of the Gahcho Kué mine and of large public infrastructure projects.
The report also says that an aging population and declining mining output will limit job creation over the next 15 years.