Mining boom offers potential for ongoing economic growth
OTTAWA, May 15, 2014 /CNW/ - Canada's territories are outperforming most of their provincial counterparts economically, according to The Conference Board of Canada's "How Canada Performs: Economy" report card. Released today, and building on previous "How Canada Performs" analyses, the Economy report card is the first of six to be produced over the next year on Canadian and provincial socio-economic performance.
This year's "How Canada Performs" has two new elements. It is the first to compare the 10 provinces with 16 advanced countries. It is also the first time that the territories are graded on indicators of economic performance where territorial data is available: income per capita; gross domestic product (GDP) growth; employment growth; unemployment rate; inflation; and labour productivity growth.
"The economic outlook remains positive for the territories over the next few years. Yukon and Nunavut, in particular, have benefited from the development of mining industries in their territories," said Glen Hodgson, Senior Vice-President and Chief Economist. "Mining will be one of the most important economic drivers in Northern Canada in the years to come."
"The fact that the territories consistently score high on economic performance indicators is not surprising," said Anja Jeffrey, Director, Centre for the North. "Despite a downturn in global commodity markets, natural resource development activities continue to bolster these economies with growth rates well above the national average."
Mining, however, is a volatile sector. Mineral demand and prices fluctuate sharply as a result of changing conditions in the global economy, which can affect the financing available for mine development. In this sense, the territories share with many emerging markets and other resource-dependent regions an economic vulnerability to swings in commodity prices. As a result, there has been substantial volatility in the grades earned by the three territories on GDP growth over the past few decades.
Territorial data on income and employment are influenced by the fact that jobs are often filled by workers from Southern Canada who do not take up residency in the territory. Therefore, they are not counted in territorial employment and income statistics.
Yukon gets three "A+" grades and three "A" grades. Yukon scores an "A+" on GDP growth, employment growth, and per capita income. Yukon's per capita income is higher than that of Norway, the top-ranking peer country, and second only to Alberta within Canada. Like Alberta, Yukon's economy is also largely resource based. Per capita income in Yukon has been above that of all provinces except Alberta since the mid-1980s.
Nunavut scores two "A+" grades for performing better than the top-ranked country on both employment growth and labour productivity growth (ahead of Ireland in both cases). Nunavut's per capita income is below levels in either the Northwest Territories or Yukon, but is still high by Canadian standards, surpassing the Canadian average in 2010, 2011, and 2012.
However, Nunavut scores low grades for income per capita ("C") and unemployment ("D"). At 13.5 percent, Nunavut's unemployment rate is above that of all provinces and territories, and higher than all international peers except Ireland. The high unemployment rate is largely due to the fact that many of those employed in the territory are not residents.
The Northwest Territories scores an "A+" grade on income per capita, which has been well above that of every Canadian province and territory since the beginning of the 2000s, when data on N.W.T. as separate from Nunavut became available. N.W.T. scores its lowest grades on employment growth ("C") and labour productivity growth ("D-"). Despite the decline in labour productivity growth, the level of labour productivity in the N.W.T. is the highest among the provinces and territories, and is second only to Norway among international peers.
The territories are not included in the overall provincial and international benchmarking ranking because data are not available for all eight indicators in the Economy report Card. The Conference Board is, however, committed to including the territories in the How Canada Performs report card, so each territory gets grades on the indicators where data were available.
The Conference Board of Canada produces a biannual Territorial Outlook that provides a long-term economic and fiscal outlook for each of the territories.
How Canada Performs is an ongoing research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada's socio-economic performance. The How Canada Performs website presents data and analysis on Canada's performance compared to peer countries in six performance categories: Economy, Innovation, Environment, Education and Skills, Health, and Society.
This is the first year that provincial and territorial rankings are included in the analysis.
The Education and Skills report card will be released in June.
SOURCE: Conference Board of Canada
For further information:
Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221