Whitehorse doesn’t have the same kind of boom-bust cycle in its economy as other cities dependent on mining, according to a report on resource development.
That could have something to do with how many government workers there are, it says.
“The Yukon’s economy is often envisioned as a ‘three-legged stool,’ with tourism, mining, and the public sector each contributing to stability, “ the Resource Development Preparedness Strategy reads.
“The reality is markedly different: the public sector, particularly over the past 10-15 years, contributes the lion’s share to the territory’s gross domestic product, with mining contributing significantly during the high end of the commodity cycle and tourism contributing comparatively little.”
A draft of the report was presented to Whitehorse City Council on Monday. It is meant to give the city an idea of how mining impacts city life.
The last major mining boom went from about 2008 to about 2012, the report says.
Before that, $90 million to $160 million was spent on mining exploration annually. That number peaked at $332 million in 2011 and dropped back to $233 million in 2012.
“After global commodity prices plummeted in 2012, exploration expenditures dropped to the $100-million level for several years and are currently forecast at just over $50 million for 2016,” the report says.
Consistent with most booms, Whitehorse’s population grew steadily from 2008-2012. But the city didn’t see its population drop off after the boom was over. “The post-2012 population remained relatively stable.
“There was a similar pattern in Yukon business activity, with a steady rise in registered businesses and payrolls occurring from 2006 through to a 2013 peak, but only a minor decrease from 2013 onwards.”
The report says $1 million in mining output added to the territory’s GDP creates approximately 1.23 jobs locally. The same amount of money in public sector output generates 5.75 jobs.
“A primary reason for the limited economic impacts of mining projects in terms of ‘dollars landing in the community’ are issues related to fly-in, fly-out workers, and the fact that the Yukon does not have many of the secondary or tertiary industries that support large resource development projects,” according to a summary of the report prepared by city staff.
Whitehorse has a bit of a “cushion” against resource slowdowns, the report says, but that doesn’t mean the city should become complacent when preparing for the next boom.
One of the major struggles during the last mining boom was the lack of housing, it says.
The average price of single-family homes more than doubled between 2005 and 2011. Rent went up and vacancy rates were as low as 1.1 per cent.
“The past 100 years of history show that Whitehorse’s population grows slowly and steadily over the long-term; the past decade illustrates how rapid, pronounced and impactful the exceptions to that rule can be.
“Ensuring an adequate land supply with a built-in margin of error to absorb periods of unexpectedly high growth is critical to avoiding future periods of soaring house prices, housing unaffordability, and the range of negative community impacts that accompany social and economic inequity.”
The report recommends the city prepare for the next mining upturn.
Proposed steps include maintaining a minimum two-year supply of residential lots, promoting affordable housing and homelessness initiatives and initiating discussions with Kwanlin Dun First Nation, Ta’an Kwach’an Council, and the Yukon government about land development.
City council will vote whether to adopt the report as a guiding strategy next week.
Contact Ashley Joannou at ashleyj@yukon-news.com