The territories are set to outpace Canada as a whole in terms of economic growth in the coming years, with mining the primary reason for their success.
According to the Conference Board of Canada’s Territorial Outlook-Summer 2012, gross domestic product in the Yukon, the Northwest Territories and Nunavut is predicted to grow substantially over the next few years, with a 3.6 per cent jump in 2012 followed by further bumps of 5.4 per cent and 4.3 per cent in 2013 and 2014, respectively.
While those numbers seem impressive on the surface, they fall short of earlier forecasts for the territories.
“Commodity prices have declined in recent months, so the short-term economic outlook for the territories is not as robust as what we were projecting at the start of the year,” said Conference Board of Canada associate director of forecasting and analysis Marie-Christine Bernard. “Most mineral exploration plans are proceeding this year, albeit at a somewhat weaker pace than expected six months ago.”
New mine developments are expected to bolster the territories’ medium and long-term outlooks, though as the past year has demonstrated, such predictions do not always hold true.
In Nunavut, for example, expectations that the territory’s GDP would climb by 16 per cent this year were quashed due to unforeseen factors such as the closer of the Hope Bay mining site, cutbacks to exploration and development funding and lower-than-expected production at the Meadowbank gold mine.
Nonetheless, the Conference Board expects new mines – particularly the Meliadine and Mary River projects – to provide a massive boost to the territory, with a 17 per cent climb in 2013 and a further 14.2 per cent jump in 2014 after a modest increase of 0.2 per cent in 2012.
The Yukon’s real GDP is predicted to follow a 3.7 per cent increase in 2012 with further growth further out as new mines open. Between 2013 and 2020, the Conference Board expects the Yukon’s mining input to grow at a compound rate of 10.7 per cent.
The Northwest Territories, meanwhile, is on less stable ground. After an expected real GDP increase of five per cent this year, the outlook calls for a decrease in GDP over the next two years due to fluctuations at the Diavik diamond mine. That mine, plus the Ekati mine, are expected to close in the next decade, with new mines such as the Gahcho Kué mine unable to match the output of facilities that are closing.