OTTAWA, Sept. 14, 2016 /CNW/ - Economic growth in Nunavut and the Northwest Territories is expected to improve in 2017. Meanwhile, the economic outlook for Yukon remains bleak. Economic growth is expected to average 1.8 per cent in the three territories between 2016 and 2020, and rise to an average of 3 per cent beyond 2020, according to The Conference Board of Canada's latest Territorial Outlook.
"As commodity markets rebalance and prices start to recover, a few new mining projects are expected to be under development and start producing before the end of the decade," said Marie-Christine Bernard, Associate Director, Provincial and Territorial Forecast, The Conference Board of Canada. "In the meantime, public sector investment in infrastructure will help the territorial economies over the near term."
- While financing conditions remain difficult in the mining sector, the outlook is expected to improve for the territories, mainly in the early 2020s.
- Following growth of 3.6 per cent this year, Yukon's economy is expected to contract by 7.7 per cent in 2017.
- Northwest Territories' economy will gain just 0.3 per cent this year after the closure of the De Beers Snap Lake mine in December 2015.
- Nunavut's economy is forecast to contract by 2.1 per cent this year, but rebound strongly in 2017.
Yukon's economy is facing the bleakest near-term outlook of all the provinces and territories, as bad news keeps piling up for the territory's mining sector. Minto, the sole remaining mine in operation, announced it will stop open-pit mining and only process the stockpile until there is no ore remaining. This will leave the territory without any large-scale mining operations by mid-2017. Yukon's real GDP is forecast to grow by a solid 3.6 per cent in 2016, but then contract by 7.7 per cent in 2017 and 3.1 per cent in 2018.The longer term outlook is expected to improve for Yukon's economy as commodity prices recover, breathing life into the mining sector. Projects on the books include gold mines such as Coffee, Eagle Gold, and the larger Casino undertaking.
While Nunavut's economy is expected to contract by 2.1 per cent this year, there are rays of sunshine in the horizon. The economy is expected to grow 4.9 per cent in 2017, as metal mining is expected to rebound strongly following a few difficult years. The public sector will be helping the economy over the near term by investing in infrastructure including the continued work on the Canadian High Arctic Research Station, upgrades to the Iqaluit airport, and work on public housing and a few new schools. Over the long term, Nunavut can expect to see solid real GDP growth for the majority of the 2020s following the start of production at Meliadine.
The economy of the Northwest Territories is expected to gain just 0.3 per cent this year after the closure of the De Beers Snap Lake mine in December 2015. Weak commodity prices are still clouding the skies, as the pickup in rough diamond prices is still fragile and in the early stages. Nevertheless, diamond production is expected to pick up in N.W.T. as Gahcho Kué, a new diamond mine that started operations in the summer, is set to produce 5.3 million carats in 2017. Non-metallic mineral mining output (which includes diamond production) is expected to increase sharply next year and cause a jump in the territory's real GDP of 15.6 per cent.
Join Marie-Christine Bernard and Pedro Antunes for a live webinar to discuss the outlook for the territories on November 1, 2016 at 03:00 PM EDT.
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