However, long term economic growth will be more modest for Nunavut, Northwest Territories and Yukon
Ottawa, July 9 2019—The combined economies of Nunavut, the Northwest Territories and Yukon’s real economic growth is forecast to average a solid 5.3 per cent in 2019 and 4.4 per cent in 2020. However, between 2021 and 2025, their combined economies will average only 1.5 per cent a year, in part because of the maturing of the mining industry and fewer new mine developments.
“Territorial economies are being positively impacted by new mines that are propelling growth in the next few years,” said Marie-Christine Bernard, Director, Provincial and Territorial Forecast. “However, some of the countervailing winds are the slower Canadian economy compounded by higher geopolitical risk (i.e. Brexit) and weaker growth in the global economy.”
Findings from the Territorial Outlook Economic Forecast (Summer 2019) report:
Nunavut: mining sector in good shape
- Nunavut’s economy will grow at a solid pace over the near and medium terms thanks to strength in the mining sector.
- The outlook for gold mining is optimistic, as prices remain at recent highs.
- Nunavut’s population profile is different from what we see in other parts of the country. Fertility rates are high and labour force growth will be solid, but the unemployment rate will remain sharply higher than in Yukon or the Northwest Territories.
- Most of the new jobs created in Nunavut’s mining industry will go to non-residents, as companies must bring in workers from other parts of Canada due to the shortage of specific mining skills in the resident population.
Northwest Territories: challenging times
- Economic growth will be modest in the near term, hovering in the 2.0 per cent range, but will subsequently ease sharply over the long term due primarily to weaker investment in the mining sector.
- Diamond production has reached its peak and will decline in the next decade. However, two new metal mines will open, offsetting some, but not all, of the losses in the mining sector.
- More tepid growth in mining will have repercussions on the other areas of the economy, notably construction activity.
- Weaker economic growth will encourage more workers to exit the territory, leaving a smaller working-age population to cover the costs that come with growth in the number of seniors.
- The only sector of the economy that will record employment growth is non-commercial services, which includes the health care sector.
Yukon: weaker growth this year, but rebound expected in 2020
- Economic growth in Yukon will slow this year but then rebound in 2020.
- New mines coming online will drive growth in 2020.
- The unemployment rate will remain well below 4.0 per cent over the next several years, and labour shortages will become a problem.
- Wages will grow at an average annual pace of 3.0 per cent between now and 2025, much faster than inflation.
- Yukoners are older than their Northern neighbours, and domestic migration will account for most of the population growth over the forecast.