Yukon North Of Ordinary

News archive for October 17, 2013

New mines will end economic slump: forecast

The most recent economic outlook by the Conference Board of Canada recognizes that the slump in the mineral sector has meant an overall economic slowdown throughout all three territories this year, but things are expected to pick up in 2014.

By Stephanie Waddell on October 17, 2013 at 3:07 pm

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Photo by Vince Fedoroff

STRENGTH TO FOLLOW WEAKNESS – Glen Hodgson (left), the senior vice-president and chief economist of the Conference Board of Canada, and Economic Development Minister Currie Dixon are seen at Wednesdaysʼ news conference held to release the boardsʼ outlook for the three territoriesʼ economies.

The most recent economic outlook by the Conference Board of Canada recognizes that the slump in the mineral sector has meant an overall economic slowdown throughout all three territories this year, but things are expected to pick up in 2014.

That’s according to the latest territorial economic outlook the board released Wednesday at the Canada’s North Summit 2013, which took place this week 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,” Glen Hodgson, the board’s senior vice-president and chief economist, told reporters.

“However, the outlook beyond this year is more promising. Economic growth in the territories over the next few years is more promising.

“Economic growth in the territories over the next few years is expected to easily outpace growth in most other Canadian regions.”

As Hodgson explained, the conference board does an economic outlook on the territories twice a year.

While Hodgson acknowledged that the last report projected more economic growth than came to fruition, he noted that’s why it’s important to do updates.

The three territories have very different types of economies.

The Northwest Territories is very resource-dependent.

Nunavut has a very young economy, while the Yukon’s economy is very service-focused in addition to the resource sector.

While the mining slowdown has seen staffing cuts in the territory and it’s expected to mean GDP growth of just 0.6 per cent, things are forecast to pick up in 2014.

This year, the Yukon’s mining industry saw production and staffing cutbacks. Victoria Gold delayed construction of its Eagle mine by a year.

Yukon Zinc and Alexco Resource announced they were cutting production and laying off workers during the summer.

“With stronger growth in the global economy and an improvement in metal mining prices, economic prospects for the territory are much more positive going forward,” reads the 49-page report.

“Two new mines are expected to be under construction next year as Victoria Gold and Copper North are forecast to begin development on their mines.

“In addition, Eagle Industrial Minerals will begin processing the tailings from the former Whitehorse Copper site. And construction on the new F.H. Collins Secondary School should ensure that construction workers are busy in 2014.

“Real GDP growth is forecast to rise to 5.7 per cent next year.”

Looking even further down the road, it’s noted that while mining production is expected to boost the economy for the next few years, after 2020, growth is again anticipated to slow because that’s when the current producing mines are expected to close.

As Economic Development Minister Currie Dixon said, the economic outlook from the conference board shows similiar findings to the economic outlook the territory released recently.

“We benefit tremendously,” Dixon said of the independent report from the conference board.

The Yukon’s economy is driven largely by mineral resources, he acknowledged.

However, his government is doing all it can to diversify the economy and thus “flatten” out the curves that come with fluctuations in the resource sector, Dixon said.

The economic forecasts give industry and government a view as to what the next two years might look like and how they might want to conduct business.

“These are never set in stone,” Dixon said, with Hodgson echoing that sentiment.

Better information leads to better decision-making, he said.

The conference board is an independent, non-profit think tank that conducts research on a wide range of economic and public policy issues.

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