Ottawa – With mineral and metal prices still down, Yukon and the Northwest Territories are facing a decline in real gross domestic product (GDP) this year, according to The Conference Board of Canada’s Territorial Outlook released July 20, 2015. Meanwhile, Nunavut’s outlook is more promising this year, led by the construction industry.
“The economic forecast for the territories this year is bleak as a slump in mineral and metal prices and the difficulty in getting financing have led to mine shutdowns and new mining projects being put on indefinite hold,” said Marie-Christine Bernard, associate director, Provincial and Territorial Forecast. “The downturn in the mining sector is cyclical and market conditions should improve over the remainder of the decade.”
– Overall real GDP growth in the territories will contract by 0.9%, the first setback since 2011.
– Market conditions for the mining sector should improve over the remainder of the decade.
– The Northwest Territories has the weakest medium- and long-term economic outlook of all three territories.
– Yukon’s economy is set to contract by 3.4% in 2015.
– Nunavut’s economy is expected to grow by 3.8% in 2015, the highest rate of growth among the provinces and territories.
It has been a difficult three years for the Yukon economy. After posting declines in economic growth in both 2013 and 2014, the territorial economy is expected to contract by 3.4% in 2015. As commodity prices slip, all mines in the territory have faced difficulties and only the Minto mine is producing. A turnaround in the territory’s real GDP growth is forecast in 2016 as mineral production increases at Minto. The development of the Eagle Gold Project late in this decade is expected to boost the territorial economy in 2018-19.
The Northwest Territories’ mining industry is more mature and as production declines, economic growth in the Northwest Territories will be less than stellar over the next two years. In fact, real GDP is expected to decline by 2% in 2015. A new diamond mine, Gahcho Kué, has just obtained financing to begin construction. With production likely to begin as soon as 2016-17, this should help improve the outlook over the next few years.
Development of the Mary River iron ore mine and rising mineral production at Meadowbank will bolster Nunavut’s economy. Construction has been enjoying exceptional growth since 2012 and the near-term outlook remains positive. There are a number of public sector projects helping to bolster construction as well, projects such as the Canadian High Arctic Research Station and the upgrade to Iqaluit’s airport. Overall, real GDP in Nunavut is expected to grow by 3.8% in 2015, the highest rate of growth among the provinces and territories.