Despite little good news lately from the mining industry, the Conference Board of Canada is predicting a rebound for Yukon’s economy in 2014.
In its latest territorial outlook the board has predicted real growth of Yukon’s gross domestic product at 3.7 per cent this year.
Yukon’s GDP stagnated last year. The same report estimates -0.1 per cent growth in 2013.
That was mainly due to a slowdown in the mining sector thanks to weak mineral prices.
But today’s weak Canadian dollar is actually good for mining companies in the Yukon, since their costs are largely in Canadian dollars but minerals are priced in American dollars.
The authors of the report predict that will be a factor in getting construction on Victoria Gold’s Eagle mine started. The mine is permitted to begin work, but financing has not yet been secured.
“Market conditions have improved since the summer of 2013, when the mine was initially supposed to begin construction. Gold prices have stabilized, financing is showing signs of loosening up, and the Canadian dollar has fallen.”
Construction is expected to begin late this year, according to the report.
Intense capital spending by the Yukon government is also expected to give the construction sector a boost this year.
“Capital spending by the territorial government for fiscal 2014-15 is expected to increase by over 30 per cent. As it was last year, with the government continuing to invest in needed infrastructure, the department with the largest capital budget is Highways and Public Works.”
The F.H. Collins school rebuild, priced at $31 million for construction, is one of the major projects on the government’s horizon.
The forecasts also expects Eagle Industrial Minerals to begin producing magnetite from the tailings at the Whitehorse Copper site this year.
However, that project has hit two serious setbacks in the past year.
Last October the company said plans could be derailed because a deal could not be reached with the port authority in Skagway over expansion of the terminal for ore exports.
And in March, a Yukon court found that the Yukon government had not properly consulted a company with mineral claims that overlap the tailings area. The judge cancelled the Eagle Industrial Minerals’ permit to mine the magnetite, pending resolution of the issue.
The conference board’s forecast for Yukon in 2014 is slightly sunnier than that of Yukon’s own economists.
The government’s most recent economic outlook predicts 3.3 per cent growth this year.
In October of last year it had predicted 8.8 per cent growth, but economists downgraded that prediction in February.
Contact Jacqueline Ronson at
jronson@yukon-news.com