the surprising size of whitehorses knowledge economy

It turns out there is an almost invisible economic sector in Whitehorse, employing over 300 people and contributing an estimated $35 million to the city's economy. A large proportion of the sector's workers earn six-figure incomes.

It turns out there is an almost invisible economic sector in Whitehorse, employing over 300 people and contributing an estimated $35 million to the city’s economy. A large proportion of the sector’s workers earn six-figure incomes.

No, I’m not talking about drug dealers or the burgeoning population of assistant deputy ministers. I mean knowledge workers. They are all around us. I even met one on the plane last week. He’s a Yukoner I have known for years, and I knew he was good at his job. But I had no idea that governments in Southeast Asia have taken to hiring him for his advice on how to manage their resource industries.

Local management consultant Stefan Voswinkel published a well-researched study on the sector last week, with the support of the Yukon Research Centre and the Yukon and federal governments.

Mr. Voswinkel interviewed 60 Yukon knowledge workers, and a fascinating picture emerges of an industry that is totally at odds with Outside visions of the Yukon being full of trappers, miners and dance-hall girls.

Some of the 60 work alone, while others employ almost 300 Yukoners. Plus, Voswinkel identified over 100 other knowledge workers in the course of the study. Their expertise spans an impressive range, from law, writing and visual arts to geology, software development and management consulting.

The 60 earn more than half of their income from clients outside the Yukon, on average. The most common client locations were B.C., Ontario, New York and California, with a substantial number of European and Asian client lists too.

Fifty-nine of the 60 live in Whitehorse, which seems to be their hub, and they have been in the Yukon an average of 20 years. Masters degrees are most common in the group, although their formal education ranges from high school to PhDs. Interestingly, over 40 per cent earn no revenue from government contracts. Only 12 per cent depended on government contracts for more than half their revenue.

Essentially, these folks generate a lot of economic activity with a minimum of fuss. Compare them to any other $35-million activity in the Yukon. Other than the jet fuel for their travel, pollution is minimal. They don’t need a lot of new infrastructure. YESAB doesn’t need to evaluate their socio-economic impact. And there aren’t many government programs for knowledge workers involving tax-free this or investment tax credits for that (if you exclude the original government investment in their education a decade or two ago).

It’s interesting that they seem to be so successful despite the fact they don’t have a government department looking after them. But now that Mr. Voswinkel has identified how big and active the knowledge sector is, it raises the question of what government could do to lure more of them to Whitehorse.

Many of the knowledge workers are in Whitehorse for lifestyle reasons, with many giving our territory top marks in the survey on quality-of-life measures like outdoors lifestyles, safety, family-friendliness, a clean environment and active cultural life. This is promising because we know lots of other Outside knowledge workers would enjoy it here. But what are the other reasons a knowledge worker might decide to move to Whitehorse instead of, say, Canmore or Nelson? Downtown Whitehorse already has enough trendy wifi coffee shops to impress a Seattleite, so what else could they be looking for?

Internet connectivity is critical, it turns out. Three-quarters use the Internet as their primary means of serving their clients. While Whitehorse remains on a spur fibre line vulnerable to the unpredictable backhoes of Fort Nelson, this is a worry. Good cellphone coverage is also important.

So is convenient and cheap air travel to reach clients. Whitehorse will always be a two-hour flight from connecting hubs in Vancouver and Calgary, but Air North has at least ensured air travel is reasonably priced.

Taxes are also relevant. The study doesn’t compare tax regimes in detail, but the Yukon Department of Finance reports indicate our income tax rate for high earners, which include a lot of knowledge workers, is in between Alberta’s and B.C.‘s. Some of the knowledge workers pointed out the impact of the high-income surtax on them, and the increasing property taxes in Whitehorse.

Interestingly, almost two-thirds viewed the relative cost of doing business in Whitehorse as competitive or better. Houses are relatively cheaper than in big cities, or at least they used to be, and the big box stores and Air North have driven down retail prices and airfares respectively. Electricity and fuel costs are higher than in the south, but not outrageously so.

The view on Whitehorse schools was more mixed. Fifteen per cent rated them “excellent,” but “satisfactory” was the most common answer.

The fact that we have lots of knowledge workers already suggests Whitehorse is doing relatively well on these factors and, as Mr. Voswinkel suggests, could do more marketing to lure some more north.

But what about the idea of taking Whitehorse’s knowledge worker strategy to the next level and trying to become a major knowledge worker hub? It’s possible to imagine having 1,000 or more knowledge workers in town in five years, and that would be great for our economy.

However, it is not easy to co-ordinate a strategy like this. The factors above involve a lot of different decision makers. For Internet and smartphone coverage, it’s the phone company. For taxes, it’s the City of Whitehorse and the Yukon Department of Finance. The Department of Education runs the schools. On housing, judging from the last few years, it’s not clear who is in charge of ensuring a steady supply of low-cost building lots get to market. And so on.

So don’t expect a big influx of knowledge workers right away. But the good news is that if all of the organizations above work a bit harder on communications, taxes, schools and housing to attract more knowledge workers, it will be good for those of us already here, too.

Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.