Yukon businesses are hoping that the economy will turn around in 2015.
After a few years of leading the country in growth, Yukon was the worst-performing jurisdiction in Canada in 2013, with a fall of 0.9 per cent in gross domestic product.
While numbers for 2014 are not yet available, they are not expected to be much better.
But Whitehorse retailers were generally happy with how the Christmas season went, said Rick Karp, president of the Whitehorse Chamber of Commerce.
“It looks like December is turning into something reasonable.”
That could be a sign of good things to come, he said.
The Conference Board of Canada predicted last month growth of 6.6 per cent for 2015.
But that estimate hinges largely on Victoria Gold getting its $400 million Eagle mine into construction this year.
John McConnell, the mining company’s president, told CBC radio last month that projection is “naive.”
Rich Thompson, chair of the Yukon Chamber of Commerce, said businesses are in a good position for a comeback in 2015.
“Businesses are used to the cyclical nature of things, and it’s always good for business, in a way, to have to kind of face a little bit of adversity,” he said.
“It was pretty rosy there for a couple of years, and that led to people probably doing a little too much, a little over-building. As always, people respond to great economic times and get a little too exuberant, and then you have to slow down.
“You’re always hopeful that that won’t last too long, and certainly we’re hopeful that 2015 is going to be a better year than 2014. We see some indication that things are starting to pick up a little bit.”
The dramatic fall in oil prices towards the end of 2014 could be a good thing for a lot of Yukoners and Yukon businesses, said Jamie Coles, a senior economist with the Yukon government.
Savings on gasoline and home heating frees up income to be spent elsewhere, he said.
And businesses that spend a lot on fuel for transportation, heating and energy will benefit, too, said Coles.
“It will improve their bottom line, but it could also mean lower consumer prices for some goods here in the territory, as they pass along these cost savings to consumers. In theory. We hope.”
Cheap oil plus the corresponding crash in the Canadian dollar could mean a boost for tourism, since it will likely be cheaper to get here, and American dollars will go further here now than they did a year ago.
And it could be good news for the mining sector, too, which spends a great deal on transportation and energy costs.
The cheap Canadian dollar is also a boon for producing miners, whose costs are largely in Canadian dollars, but they sell their minerals in USD.
“At least there’s a little bit of a positive, a silver lining I guess you could say, for some of the operators and the exploration guys as well,” said Coles.
But predicting the overall effect on Yukon and on Canada is a tricky proposition, he said.
“It’s really hard to know how this is all going to shake out, because any time oil prices change there’s winners and losers.”
The Yukon government’s most recent forecast, from July 2014, predicted 1.7 per cent GDP growth in 2014 and 4.5 per cent growth in 2015.
And on the whole, businesses are feeling pretty good, said Karp.
“Generally speaking the business community is looking forward to 2015 and we’re hopeful, cautiously hopeful, that we’ll have a good year.”
Contact Jacqueline Ronson at
jronson@yukon-news.com
