VANCOUVER (miningweekly.com) – A lack of new mining projects in the development pipeline of Canada’s Northwest Territories (NT) is threatening to derail the region’s economic growth outlook, the latest ‘Territorial Outlook’ by The Conference Board of Canada (CBoC) has found.
The independent Ottawa-headquartered think tank points out that the NT has a “more muted” outlook compared with its counterparts, as fewer developments in mining and declining diamond output are expected to weigh on economic prospects.
In contrast, the board expects the Yukon and Nunavut Territories of Canada to benefit from new mining investment in next two years, giving the respective domestic economies a much-needed kick-start.
The CBoC’s ‘Territorial Outlook’ has forecasted the NT’s real gross domestic product growth (GDP) to fall 2.9% in 2018. This development is set against a backdrop of all three currently producing NT diamond mines facing declining production profiles and complete closure by 2035, bar any new discoveries.
The board expects that the two metals mines scheduled to be completed in the NT during the early 2020s will not be enough to remedy the lack of new mine development investment announced to date.
The CBoC notes that almost 1 300 workers who make their homes in the NT are expected to lose their jobs by 2035, translating into stagnant income growth and higher outmigration as residents look for opportunities elsewhere.
The board noted that higher metals prices has – for the most part – renewed interest in Canada’s North.
Across all three territories, growth will average 2.4%/y between now and 2025, compared with 1.8% nationally. Growth is expected to average 1.9% in the three territories in 2018, and 3.1% in 2019, the board advised.
"The territories' mining sector has wind in its sails, but economic growth is uneven across the regions. With many new mining projects on the horizon in Nunavut and Yukon, growth is expected to take off over the next five years," stated CBoC Provincial and Territorial Forecasting director Marie-Christine Bernard on Monday.
According to the CBoC, Nunavut's economy is “on the cusp of an unprecedented growth spurt”. The real GDP is expected to grow by 4.4% in 2018 and 9.1% in 2019, spurred by new gold production at Agnico Eagle’s Meliadine mine, and the development of new mines.
New mine development will keep Nunavut's construction sector busy, with three active mine construction sites in 2018. This is expected to make up for a decline in government investment spending, the board noted. The construction sector is forecast to grow 8.8% in 2018 and 4% in 2019.
Rising mining production will also help create about 2 000 new jobs in the next five years. However, less than half of those will be filled by workers from the territory as a good proportion of mining and construction jobs are staffed with fly-in/fly-out workers, the CBoC advised.
The Yukon Territory is set for a marked improved economic outlook, as the life of its only remaining mine – the Minto mine – has been extended and three new mine developments are expected to progress to production over the next decade, the board said.
Construction will also be an important contributor to the Yukon's economy over the next few years, the report elaborated. With Victoria Gold's Eagle project coming on line and a slower ramp up in construction on Goldcorp's Coffee project, construction output is expected to fall in 2019, but grow by almost 40%/y in 2020/21. The Territory’s real GDP growth is predicted to reach 8.1% this year, following a 1.6% contraction in 2017, according to CBoC data.