Stronger growth expected in 2014 and beyond
WHITEHORSE, Oct. 16, 2013 /CNW/ - Lower commodity prices will hold back
mineral exploration in Canada's territories, cooling previously-robust
economic growth in the territories this year.
Real gross domestic product (GDP) in the territories is forecast to grow
by a tepid 0.5 per cent in 2013, according to The Conference Board of
Canada's Territorial Outlook: Autumn 2013, released today at Canada's North Summit 2013 in Whitehorse.
"A once-thriving mining sector is now re-evaluating development and
exploration plans due to lower commodity prices and tight capital
markets, which makes it difficult for mining companies to obtain
financing," said Glen Hodgson, Senior Vice-President and Chief Economist, The Conference Board of
Canada. "However, the outlook beyond this year is more promising.
Economic growth in the territories over the next few years is expected
to easily outpace growth in most other Canadian regions."
Spending on mineral exploration is expected to be down in all three
territories this year, with Nunavut experiencing the largest decline.
Real GDP in the territories will increase by 0.5 per cent in 2013, below
recent economic performances.
The medium term is promising; economic growth in the territories over
the next few years is expected to easily outpace growth in most other
regions of Canada.
Real GDP in the territories as a whole is expected to expand by a more
robust 3.2 per cent in 2014 and 4.2 per cent in 2015. While a given
mining project is never guaranteed to proceed, favourable global demand
for metals suggest that Canada's mining potential is bright over the
next decade—particularly in the North.
This year, Yukon's mining industry saw production and staffing cutbacks.
Victoria Gold delayed construction of its Eagle mine by a year, and
Yukon Zinc and Alexco Resource announced they were cutting production
and laying off workers in the summer. Economic growth in the territory
will be limited to 0.6 per cent this year. With two new mines expected
to begin construction, Yukon's economic prospects will be more positive
next year, with real GDP expected to rise by 5.7 per cent.
The Northwest Territories will have the weakest regional economy in
Canada this year — no real GDP growth is forecast. However, the subpar
economic conditions are expected to be short-lived. The next five years
offer better prospects for mining and the economy, as new mines begin
production, and Ekati and Diavik remain in operation. Real GDP growth
is expected to rise by 1.3 per cent in 2014 and 2.5 per cent in 2015.
Lower production at Agnico Eagle's Meadowbank mine and a slowdown in
mineral exploration will limit Nunavut's economic growth to 1.6 per
cent in 2013. Next year, economic growth is forecast to reach 3.7 per
cent. Development of Baffinland's Mary River iron ore project will kick
the construction and transportation industries into high gear next
year. A number of federal, territorial and municipal government
projects are also slated to begin construction in 2014.
The Territorial Outlook, published twice yearly, examines the economic
and fiscal outlook for each of the territories, including output by
industry, labour market conditions, and the demographic make-up. This
forecast is funded through the Conference Board's Centre for the North. The Centre's main purpose is to work with Aboriginal leaders,
businesses, governments, communities, educational institutions, and
other organizations to provide insights into how sustainable prosperity
can be achieved in the North. Over its five-year mandate, the Centre
for the North will help to establish and implement strategies, policies
and practices to transform that vision into reality.
SOURCE: Conference Board of Canada
For further information:
Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221