GDP growth forecast bright enough to blind territorial politicians

On EDGE: Opinion

Pass out the party hats, strike up the band, Happy Days are Here Again, according the annual Conference Board of Canada report on what to expect from the economy across the North this year.

Released in time for the festive season, and Premier Bob McLeod’s junket to China, the not-for-profit economic think tank’s annual forecast said the Gross Domestic Product of the three northern territories will grow by 5.3 per cent next year, outpacing this year’s 1.5-per-cent increase, then fall to a modest 2.4 per cent in 2016.

Marie-Christine Bernard, the board’s Associate Director for Provincial and Territorial Forecasts, based that sunny vision on “stronger investment” in mining, and public sector projects over the next few years.

“While the current financing environment is not conducive to rapid expansion of mining projects in the territories, prospects for the medium to long term are generally positive,” Bernard said in a press release.

“The business case for many of the mining projects in the North in the medium to long term remains good; demand for minerals will grow as the world economy continues to claw its way back from the 2008-09 financial crisis and recession.”

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Bernard’s greatest expectations are for Nunavut where she predicted the economy will grow by 6.8 per cent, driven by the Baffin Island Mary River iron-ore project and other mines advancing to production or construction.

Yukon will not be far behind. Bernard said that construction at Victoria Gold’s Eagle mine would boost the territory’s GDP by 6.6 per cent, a giant step ahead of this year’s 1.4 per cent growth.

NWT growth from mine construction

Bernard was more cautious about the Northwest Territories, and predicted growth of 3.6 per cent from “construction work on several new mines, (and) growth in wholesale and retail trade and financial services.”

“But prospects for more work on the Canol shale oil play have dimmed due to an exploration hiatus this winter,” said Bernard.

The Conference Board announcement did not specify which mining projects will boost the NWT economy, but only one – DeBeer’s Gahacho Kue –  is a sure thing. Canadian Zinc’s Prairie Creek Mine, Avalon Resources rare earth project, and Fortune Minerals NICO mine need significant investment before they proceed.

The forecast may be off the mark, but it stirs the imaginations of northern politicians, and it could come in handy on McLeod’s China junket – his second since becoming premier just over three years ago.

Industry, Tourism and Investment Minister Dave Ramsay, ever-brimming with optimism, is predicting the NWT’s GDP growth will outshine the Conference Board’s forecast, and might even double it.

The territorial government is continuing its investment in the road to Tuktoyaktuk, the fibre optic link to Inuvik and the Mackenzie Valley highway. And this being an election year, Ramsay expects a northward flow of more federal money.

The new cash won’t arrive in time to boost the GDP this year, but the promise is enough to brighten Ramsay’s outlook. It might even entice the Chinese investor-immigrants McLeod is courting.


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