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Loss of Eagle Gold Mine production equates to $1.5B hit to Yukon GDP

Finance Minister Sandy Silver tabled 2024-25 supplementary budget and fall economic outlook
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Yukon Finance Minister Sandy Silver addresses the supplementary budget and fall economic outlook and more with reporters in the Yukon government cabinet office on Oct. 2, 2024.

The surplus is down, net debt is up, revenues are down, expenses are up, the Yukon government is looking to increase how much it can borrow from the feds and the economy is taking a hit from the Eagle Gold Mine slide fallout, according to a financial update from Finance Minister Sandy Silver. 

On Oct. 2, the first day of the fall sitting of the Yukon Legislative Assembly, Silver tabled the 2024-25 supplementary budget (which accounts for spending unforeseen from when the main budget was tabled in the spring) and the fall economic outlook. 

“Removing Eagle Gold Mine production equates to a reduction in the Yukon’s real GDP of over $1.5 billion over the five-year forecast compared to the previous forecast,” reads the economic outlook. 

In the legislature on Oct. 3, Dixon suggested Silver had minimized the $1.5-billion hole when Silver was speaking to reporters the previous day. 

When asked by reporters about the impact of the mine slide fallout on the economic outlook on Oct. 2, Silver credited the government for diversifying the economy so it’s not solely reliant on mining. 

“Of course it's going to be a hit, but we have a diversified economy,” Silver said, noting he’s a proponent of mining. 

The economic outlook notes the $50 million advanced to the receiver of the Eagle Gold Mine for remediation efforts following the June 24 landslide at Victoria Gold Corporation’s heap leach facility. 

The supplementary estimates involve a $150.1 million increase in operations and maintenance spending, offset by $20.7 million in recoveries, as well as a $299,000 dip in capital spending which accounts for revised project timelines and cash flows. 

The expense forecast went up by $133 million, after accounting for recoveries. 

The surplus dropped from $119 million in the 2024-25 main estimates to $75.4 million. The decrease accounts for the contingency fund, the advance to the receiver, accounting adjustments and an anticipated reduction in revenues. 

Net debt is projected to go up by $41.6 million to $530.4 million by the end of the 2024-25 fiscal year. 

Silver told MLAs the territorial government is working closely with the federal government to secure an increase in the territory's borrowing limit.  

“This is not a sign that we intend to take on significant debt, but rather a step to ensure that we have the flexibility to respond to both expected and unforeseen challenges,” Silver said. 

“Strategic borrowing allows us to seize opportunities that drive growth from improving health care to protecting our environment, while also preparing us to address urgent needs such as responding to environmental events like floods and fires. By expanding our borrowing capacity, we gain the flexibility to navigate peaks and valleys and cash flow with greater ease.” 

The Yukon’s current borrowing limit is $800 million.  

Yukon Party Leader Currie Dixon told reporters in the lobby of the legislature on Oct. 2 that the budget and the economy in general are a “mess.”  

Dixon expressed concerns around the Yukon government’s wishes to borrow more from the feds, despite the Yukon recently doubling the borrowing limit. 

“The Liberal government spending is out of control,” Dixon said. 

“We also see an even more troubling indication in this that the government looks to increase the borrowing limit from federal government. That should worry all Yukoners.” 

When pressed by the Yukon Party in the legislature on Oct. 3, Silver said the Official Opposition can't have it both ways, for example, when they say spend more on health but then criticize more spending.

Silver cited S&P Global Ratings reaffirming the Yukon has a “AA Stable” credit rating.

Yukon NDP Leader Kate White, whose party is currently keeping the minority Liberals in power, noted to reporters what she called a large increase in operations and maintenance spending. 

While White understands costs associated with health, fires and floods, she said the $50 million provided to the receiver is “a lot of money for something that we were told was always going to be safe.” 

Contact Dana Hatherly at dana.hatherly@yukon-news.com 



Dana Hatherly

About the Author: Dana Hatherly

I’m the legislative reporter for the Yukon News.
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