What Nova Scotia’s fracking decision means for the Yukon

With the Yukon's fracking review committee due to report this fall, it is interesting to watch Nova Scotia's example. 

With the Yukon’s fracking review committee due to report this fall, it is interesting to watch Nova Scotia’s example. The province’s fracking review panel came out with its recommendations last week, proposing what is effectively a ban. The local minister of energy said he would introduce legislation prohibiting onshore fracking in the coming session of the legislature.

Nova Scotia is an interesting example since, like the Yukon, it has a struggling private sector economy and is heavily reliant on transfers from Ottawa. The promise of energy-industry jobs must have been tempting.

The Nova Scotia fracking review, led by Cape Breton University president Dr. David Wheeler, took place in a rather dire long-term economic situation for the province: slow growth, aging population and high unemployment.

Nova Scotia’s average GDP per person was $7,700 below the national average in 2003, a gap which is expected to be $12,300 next year according to TD Economics. Real economic growth in 2011-13 averaged 0.4 per cent, reminiscent of the sclerotic Eurozone, compared to the Canadian average of 2.1 per cent. These seem like small differences, but over the decades sustained under-performance like this can compound into huge differences in incomes, tax revenues and opportunities for young people.

Unemployment has hovered around 9 per cent for years, double the rate in Saskatchewan and Alberta. Nova Scotia has one of the oldest populations in Canada. Median age is 44, the third highest in Canada, and the province has the nation’s highest percentage of people over 65 according to Statistics Canada. The cheery statisticians say Nova Scotia’s demographics are due to “both lower fertility and to interprovincial migratory losses for many years.” That’s wonk-speak for people moving to Fort McMurray.

Oh yeah, and the provincial government just reported a whopping $680 million deficit for the last fiscal year. The province’s debt is $15 billion and rising.

Nova Scotians are well aware of the challenges. In parallel with the fracking review, they also had another university president, Dr. Ray Ivany of Acadia, do a report on the economy. “Because of a combination of economic and demographic factors, we are teetering on the brink of long-term decline,” Dr. Ivany told the media after releasing his glossy report. He forecast that Nova Scotia would have 100,000 fewer working age adults in 2036 than it does today.

However, Dr. Ivany’s report did not issue a ringing call for fracking, and doesn’t mention the F-word until page 182 in the appendix. The report included some polling data that showed that there is a widespread belief in Nova Scotia that fracking cannot ever be done in an environmentally safe manner.

Dr. Ivany’s report also largely ignored the topic of tax rates. Nova Scotia’s top personal tax rate is the highest in Canada outside Quebec. It is 21 per cent, compared to the Yukon’s top rate of 12.76 per cent. Its corporate income tax rate is tied with P.E.I.‘s for Canada’s highest, and it has the highest retail sales tax.

I guess the politest thing can be said is that economists will take great interest if Nova Scotia manages to revive its economy by banning fracking and having one of the harshest tax regimes in the country.

Canada seems to be dividing into pro-frack and anti-frack zones. CAPP, an industry group, says that 175,000 wells have been fracked over the last 60 or so years in B.C. and Alberta. There must be thousands more in Saskatchewan. (Of course, we can’t know with absolute certainty what the long-term effects of this will be).

B.C.‘s premier is keen to use the natural gas industry to transform B.C.‘s economy.

Meanwhile, Quebec has a moratorium and fracking is a highly controversial topic in the current New Brunswick election campaign.

The Yukon’s fracking review is being done by an all-party committee of politicians, not internationally renowned university presidents with resumes packed with gigs at the World Bank, United Nations and international business schools. We’ll see what they say in a few months.

If our politicians decide to ban fracking, or put so many conditions on the practice that it amounts to the same thing, that is their prerogative. Unlike Alaskans, Yukoners aren’t allowed to vote on important topics like this. However, if our politicians do close the door on the industry, I hope they’ll do better than their Nova Scotia counterparts and come up with some convincing alternative source of high-paid jobs and tax revenues for our public services.

Hopefully the answer will be better than “sit around and commission economic studies until global mineral prices go back up.”

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Channel 9’s Yukonomist show or Twitter @hallidaykeith

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Crystal Schick/Yukon News
Calvin Delwisch poses for a photo inside his DIY sauna at Marsh Lake on Feb. 18.
Yukoners turning up the heat with unique DIY sauna builds

Do-it-yourselfers say a sauna built with salvaged materials is a great winter project

Wyatt’s World

Wyatt’s World for March 5, 2021.

Yukonomist: School competition ramps up in the Yukon

It’s common to see an upstart automaker trying to grab share from… Continue reading

The Yukon government responded to a petition calling the SCAN Act “draconian” on Feb. 19. (Yukon News file)
Yukon government accuses SCAN petitioner of mischaracterizing her eviction

A response to the Jan. 7 petition was filed to court on Feb. 19

City councillor Samson Hartland in Whitehorse on Dec. 3, 2018. Hartland has announced his plans to run for mayor in the Oct. 21 municipal election. (Crystal Schick/Yukon News file)
Councillor sets sights on mayor’s chair

Hartland declares election plans

Chief Medical Officer of Health Dr. Brendan Hanley receives his first dose of the COVID-19 vaccine from Public Health Nurse Angie Bartelen at the Yukon Convention Centre Clinic in Whitehorse on March 3. (Crystal Schick/Yukon News)
State of emergency extended for another 90 days

“Now we’re in a situation where we see the finish line.”

The Yukon government says it is working towards finding a solution for Dawson area miners who may be impacted by City of Dawson plans and regulations. (Joel Krahn/Yukon News file)
Miner expresses frustration over town plan

Designation of claims changed to future planning

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The 2022 event in Wood Buffalo, Alta., has been postponed indefinitely. (Justin Kennedy/Yukon News file)
2022 Arctic Winter Games postponed indefinitely

Wood Buffalo, Alta., Host Society committed to rescheduling at a later date

Housing construction continues in the Whistle Bend subdivision in Whitehorse on Oct. 29, 2020. (Crystal Schick/Yukon News file)
Yukon Bureau of Statistics reports rising rents for Yukoners, falling revenues for businesses

The bureau has published several reports on the rental market and businesses affected by COVID-19

Council of Yukon First Nations grand chief Peter Johnston at the Yukon Forum in Whitehorse on Feb. 14, 2019. Johnston and Highways and Public Works Minister Richard Mostyn announced changes to the implementation of the Yukon First Nations Procurement Policy on March 3. (Crystal Schick/Yukon News file)
Third phase added to procurement policy implementation

Additional time added to prep for two provisions

Crews work to clear the South Klondike Highway after an avalanche earlier this week. (Submitted)
South Klondike Highway remains closed due to avalanches

Yukon Avalanche Association recommending backcountry recreators remain vigilant

RCMP Online Crime Reporting website in Whitehorse on March 5. (Haley Ritchie/Yukon News)
Whitehorse RCMP launch online crime reporting

Both a website and Whitehorse RCMP app are now available

A man walks passed the polling place sign at city hall in Whitehorse on Oct. 18, 2018. The City of Whitehorse is preparing for a pandemic-era election this October with a number of measures proposed to address COVID-19 restrictions. (Crystal Schick/Yukon News file)
City gets set for Oct. 21 municipal election

Elections procedures bylaw comes forward

Most Read