Yukon’s economy is set to grow this year, but the possible closure of the Minto mine in 2017 means the territory’s economic future is still unclear.
Those are the findings of the Conference Board of Canada’s latest territorial outlook.
The report predicts that Yukon’s economy will grow by 2.6 per cent in 2016, after three consecutive years of declining GDP. The growth is largely the result of activity at the Minto mine, where output is expected to increase by 5.4 per cent in 2016. Higher-grade ore is supposed to be mined from the Minto North deposit starting partway through this year.
The report estimates that Yukon’s economy will continue to grow for the foreseeable future. But those projections were completed before Minto’s announcement last month that it will likely go into temporary closure in April 2017.
That closure could mean the economy will shrink instead of grow in 2017, said Elise Martin, an economist with the Conference Board of Canada’s forecasting and analysis division.
“It’s going to be a really big impact, but I cannot quantify it at the moment,” she said.
Martin said it’s especially difficult to make accurate predictions about the territories, because a single mine opening or closing can have a huge impact on the economy.
“It makes it difficult to forecast because it’s really volatile, and it’s linked to commodity prices,” she said.
Though the numbers may change, the report predicts that Yukon’s economy will grow by 5.8 per cent per year from 2020 to 2025, thanks to the development of the Coffee, Selwyn and Eagle projects.
“Those three projects are the ones that are advancing despite a difficult financing environment,” Martin said. “It’s not something that happens to every company in the current financing environment.”
However, she cautioned that Selwyn Chihong’s recent decision to delay plans to develop its mine by at least a year came too late to be considered in this analysis.
Western Copper and Gold’s Casino project and Alexco’s Keno Hill properties were not included in the forecast, because they “were not gaining traction with investors,” Martin said.
The report also finds that there will be little growth in the construction industry for the next few years, though mine development should create a spike in construction jobs between 2019 and 2022.
However, the report notes that Yukon’s record $312-million capital budget in 2015-16 is helping to offset the current slowdown in the mining industry.
It refers specifically to the new F. H. Collins school, the new MRI unit and emergency room expansion at the Whitehorse General Hospital and the planned 150-bed continuing care facility in Whistle Bend as important projects for Yukon’s economy.
Martin also said that tourism is a bright spot for the Yukon, thanks to the weak Canadian dollar and lower gasoline prices.
“We forecast overnight visits to the Yukon to increase by 2.5 per cent in 2016,” she said.
The territory is also expected to gain 100 jobs in 2016, though it lost 500 last year.
The report predicts that Yukon’s population will grow steadily, to about 42,300 people in 2030. But the population will also age rapidly, with people aged 65 and older increasing to 20.7 per cent of the population in 2030 from 10.9 per cent today.
Despite the mining slowdown, Yukon’s outlook is brighter than that of the other territories this year. GDP in 2016 is expected to grow by just 0.7 and 1.2 per cent in the Northwest Territories and Nunavut, respectively.
Contact Maura Forrest at
maura.forrest@yukon-news.com