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

Wyatt's World for Oct. 28, 2020.
WYATT’S WORLD

Wyatt’s World for Oct. 28.… Continue reading

Yukon Child Care Board chair Amy Ryder says the board could be playing a bigger role in childcare policy making if they had more financial support from the Yukon government. (Submitted)
Yukon Child Care Board asks for larger role in annual report

The board is asking for a larger budget to increase outreach and advice

Yukon’s clocks will no longer change in March and November but will remain permanently on Pacific Daylight Saving Time. (Courtesy Yukon government)
Off the clock: Yukon prepares to end seasonal time changes

Starting on Nov. 1 Yukon will be one hour ahead of Vancouver and two hours ahead of Alaska

Dawson City as scene from West Dawson. Art Webster, the vice-chair of the Dawson Regional Planning Commission resigned last month over the Yukon governments unwillingness to pause speculative staking. (Joel Krahn/Yukon News file)
Vice-chair resigns from Dawson land-use planning commission

NDP warns that not pausing mining activity is the road to a second Peel decision

The opening ceremonies of the Canada Summer Games in Winnipeg on July 28, 2017. The 2021 Canada Summer Games have officially been rescheduled for Aug. 6 to 21, 2022, exactly one year from the date the national competition was originally set to take place in the Niagara region of Ontario. (Canada Summer Games/Flickr)
Canada Summer Games dates set for 2022 but uncertainty remains for Yukon athletes

Yukon athletes continue waiting to get back into schools

A proposed Official Community Plan amendment would designate a 56.3 hectare piece of land in Whistle Bend currently designated as green space, as urban residential use. Whitehorse city council passed first reading on a bylaw for the designation change at its Oct. 26 meeting, prompting an upcoming public hearing on Nov. 23 ahead of second reading on Dec. 7. (Courtesy City of Whitehorse)
Local contractors will be given an advantage on a contract for the design and construction services that will see a new reception building at Robert Service Campground decided city councillors during the Oct. 26 council meeting. (Crystal Schick/Yukon News file)
Local firms will get advantage on contract for new Robert Service Campground building

Yukon-based companies competing for contract for new reception building will receive 20 extra points

Fallen trees due to strong winds are seen leaning on to power lines which caused some power outages around the territory on Oct. 26. (Courtesy of ATCO)
Wind knocks out power around the Yukon

High winds on Oct. 26 knocked out power to Faro, parts of Whitehorse and beyond

The Yukon government is asking for all claims in a lawsuit over the Takhini elk herd be struck by the court. (Mike Thomas/Yukon News file)
Yukon government asks for Takhini elk lawsuit to be struck

The Yukon government is asking for all claims in a lawsuit over… Continue reading

The Yukon government has filed a reply to an outfitter’s petition challenging the reduction of its caribou quota to zero. (Yukon News file)
YG replies to outfitter’s legal challenge over caribou quota

The Yukon government has filed a reply to an outfitter’s petition challenging… Continue reading

The Yukon government is encouraging people to get the flu vaccine this year, saying that with COVID-19, it’s “more important than ever.” (Black Press file)
Get flu vaccine, Yukon government urges

The Yukon government is encouraging people to get the flu vaccine this… Continue reading

Benjamin Munn, 12, watches the HPV vaccine in 2013. Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available to all Yukoners up to, and including, age 26. Currently the program is only available to girls ages nine to 18 and boys ages nine to 14. (Dan Bates/Black Press file)
HPV vaccine will be available to Yukoners up to, including, age 26

Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available… Continue reading

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Most Read