The recession slowed down the Yukon’s growth, but it’s about time something put the brakes on the economy, said Bank of Canada economist Farid Novin,
This time last year, the Yukon was struggling to keep up with “breakneck” growth, said Novin – the senior economics representative for the BC/Yukon branch of the Bank of Canada.
“We had a problem with labour shortages, we had a problem with input costs going higher – and now it’s much more manageable,” said Novin.
The new, slower economy is much more “sustainable,” said Novin.
“You have a very calm and beautiful economy,” he told a meeting of the Whitehorse Chamber of Commerce last week.
Novin was the only speaker who requested a cordless microphone.
“I feel more comfortable … it’s easier for me to walk around,” he explained.
As he paced across the stage in a jet-black suit, the Iranian-born economist resembled a Persian Tony Bennett.
Whirlwind growth had brought a crippling labour shortage to the Yukon.
Two years ago, the Yukon government fast-tracked a new immigration program allowing faster entry of foreign workers into the territory.
More than 200 workers have entered the Yukon on the program – many of them Filipino.
A housing shortage compounded the problem.
In August of last year, the Yukon government sent fliers to Yukon residents imploring them to “open their home” to out-of-territory summer labourers.
While “there was no recession” in the Yukon, “some activities slowed down,” said Novin.
The Yukon’s mining and tourism industry took the largest hit.
The Cantung mine – located just across the NWT border – was forced to close due to plummeting world demand for tungsten.
Raven Recycling generated much of its revenue on sales of scrap metals.
When those prices plummeted, the centre was forced to solicit government backing.
By 2011, industry should start to rebound as world growth returns to pre-recession levels, said Novin.
Growth has already started to bounce back across other regions of Canada – although it will still be a while until residents will feel the social effects of a rebound, he said.
Nowhere in Canada was pre-recession growth more breakneck than in the Alberta tar sands – located just a few hundred kilometres to the Yukon’s southwest.
“That was too fast,” said Novin.
As global oil prices spiralled to an all-time high of $140 per barrel, investors scrambled to expand tarsands development.
Gold, corn, soy and other commodities followed oil’s lead – reaching all-time highs by early 2008.
“It was really an indication that things were far too hot,” said Novin.
Alberta employers had been so desperate to recruit labourers before the recession that they were reluctant to dump them once the recession hit, said Edmonton Chamber of Commerce president Martin Salloum, who was in Whitehorse for the Northern Forum.
Many tarsands workers were kept on as “floor sweepers” as their employers waited for the economy to rebound, he said.
As the economy fills with air – industries will have much more time to eliminate the “bottlenecks” that they faced before, said Novin.
The Yukon’s rush economy just needed a quick sedative.
Contact Tristin Hopper at