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Ottawa, September 8, 2011— With minerals in high demand in global markets, the mining sector is bolstering economic growth in Canada’s three northern territories, according to The Conference Board of Canada’s Summer 2011 edition of Territorial Outlook.
“Both Yukon and Nunavut are entering a period of sustained growth in their mining industries. New mines opened in both territories last year and more are scheduled to start up over the next decade,” said Marie-Christine Bernard, Associate Director. “In the Northwest Territories, however, the diamond extraction industry has reached maturity and production is expected to wane over the next four years, limiting economic growth.”
“The economies of Canada’s territories are prone to sharp rise-and-falls as mining projects move through the assessment, construction, production, and closure phases,” said Bernard. “All three territories face the cyclical nature of growth based on resources.”
Following growth of 14.8 per cent in 2010, Nunavut will post another huge gain in gross domestic product (GDP) of 15.7 per cent this year. Rising production at the Meadowbank gold mine, the development of the Hope Bay mine and record levels of mineral exploration spending will drive economic growth in the territory. The public sector will continue to play a major role in Nunavut’s economy, but it will account for a smaller share of overall territorial output over the next 10 years.
After nearly a decade of mine development, Yukon’s mining industry is entering a new boom cycle. The mining industry is expected to more than double over the next two years, expanding an incredible 135 per cent. Three mines—Bellekeno, Wolverine and Minto—will be extracting and processing minerals this year. Furthermore, the White Gold, Whitehorse and Mayo mining districts continue to see massive amounts of exploration spending. The resource boom is also driving growth in the territory’s service industry. The retail and wholesale trade, and financial industries are all experiencing a period of rapid expansion. Overall, real GDP in Yukon is forecast to grow 5.9 per cent in 2011.
The Northwest Territories’ economy is forecast to contract by 2.3 per cent this year, due to a significant downturn in the construction sector and minimal growth in the mining industry. Construction output will fall by close to 30 per cent this year as public and private non-residential investment eases. The construction industry is expected to bounce back next year, thanks to spending at Ekati’s Misery open-pit project. However, the N.W.T’s economic performance over the medium term will be restrained by sluggish diamond production as output at Ekati declines.
This forecast is produced as part of the Conference Board’s Centre for the North. Its main purpose is to work with Aboriginal leaders, businesses, governments, communities, educational institutions, and other organizations to provide insights into how sustainable prosperity can be achieved in the North. Over its five-year mandate, the Centre for the North will help to establish and implement strategies, policies and practices to transform that vision into reality.
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