Yukon’s economy is expected to shrink for the third year in a row in 2015, the only Canadian jurisdiction with that dubious distinction.
The territorial government quietly released its most recent economic outlook just after the federal election last week. It estimates that Yukon’s gross domestic product will decrease by six per cent this year.
The economy began to shrink in 2013, after nine years of growth. But a six per cent drop in GDP would be much larger than the declines seen in 2013 and 2014, which range in at 0.9 per cent and 1.2 per cent, respectively.
In the legislative assembly this week, Premier Darrell Pasloski blamed the downturn in the mining industry for the territory’s poor performance.
“We do understand that there are things like commodity prices that unfortunately we don’t have the ability to control,” he said.
Liberal Leader Sandy Silver fired back. “It’s very disappointing to watch the government duck responsibility of having the worst economic performance of any jurisdiction in the country for the last 36 months,” he said.
The government’s outlook found that the value of mineral production is expected to plummet to $200 million this year, down from $500 million in 2014. That’s the lowest it’s been since 2007. The report indicated that the closure of Yukon Zinc’s Wolverine mine and the continued closure of the Bellekeno silver mine were the largest contributors to that decline.
The report also showed that the economic importance of Yukon’s mining and oil and gas industries has grown substantially in the past decade. In 2014, extractive industries accounted for 18 per cent of the territory’s GDP, up from just five per cent in 2004.
Employment numbers are also underwhelming. The Yukon’s unemployment rate is expected to rise to 6.7 per cent this year, up from its record low of 4.3 per cent in 2014.
The outlook isn’t all bad, however. Yukon’s economy is expected to grow by 3.5 per cent in 2016, largely because of mineral production from the Minto North pit.
And the Department of Energy, Mines and Resources expects spending on mineral exploration to rise to nearly $100 million this year, up from $80 million in 2014 and $45 million in 2013. This year’s growth is primarily due to Selwyn-Chihong’s exploration in eastern Yukon.
Still, unemployment is expected to rise to 7.5 per cent in 2016. The report explains that even though GDP is predicted to grow, that will likely be due to increased production from the already existing Minto mine, which will probably not create many new jobs.
The government report follows a territorial outlook released this summer by the Conference Board of Canada. That report predicted that the Yukon’s economy would shrink, but only by 3.4 per cent. It also anticipated that job creation would pick up in 2016, contrary to what the government now expects.
Pasloski defended his government’s economic record in the legislative assembly on Wednesday.
“In spite of the decreased commodity prices that we have seen for the last few years, in spite of the decrease in revenues, this government continues to post modest surpluses and record capital budgets in this territory,” he said.
But Silver pointed out that the timing of the report’s release is suspect. It was published on Oct. 20, “as Yukoners were taking in the results of the federal election.”
Apparently, no news release or public announcement accompanied it.
The Yukon is not alone this year. The economies of Alberta, Newfoundland and Labrador, Saskatchewan and the Northwest Territories are also expected to shrink.
But Newfoundland and Labrador was the only other jurisdiction to contract in 2014, as was New Brunswick the year before.
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