Economic growth in Canada’s territories will be strong in 2014, led by both public and private sector investment in mining and transportation infrastructure, the Conference Board of Canada reported May 27 in highlighting the latest edition “Territorial Outlook”.
“Uncertainty in the global economy has hurt commodity prices and clouded the outlook for the mining industry in the territories,” said Marie-Christine Bernard, associate director, provincial and territorial forecast. “However, with long-term global demand for minerals and metals expected to remain positive, there is still a solid business case for many of the mining projects in the North.”
In 2014, real gross domestic product in the three territories combined is expected to grow by three percent, for the second year in a row.
Among highlights of the report:
• Mining companies in Nunavut and the Northwest Territories are budgeting for lower spending on mineral exploration this year, due to lower commodity prices and difficulty in obtaining financing;
• Demand for base metals and gold is expected to be strong in the long term; and
• Following a drop of 40 percent last year, mining exploration and deposit appraisal in Nunavut is expected to fall another seven percent in 2014.
Economic growth in Nunavut is nonetheless forecast to expand by 4.4 percent this year. Stronger gold production at the Meadowbank mine, a ramp-up in construction activity at the Mary River iron ore project, and a number of public infrastructure projects will contribute to overall growth.
Yukon Territory experienced modest economic growth in 2013. Hit hard by the slowdown in mining exploration activities and in the construction industry, the economy grew by only 1.3 percent last year.
Yukon’s prospects will improve this year, as production is expected to increase at the Minto and Wolverine mines. In addition, a number of mining companies are investing in mine structures, exploration, and equipment in an effort to start or resume operations. Overall, Yukon’s real GDP will rise by 3.7 percent in 2014.
Real GDP in the Northwest Territories is expected to advance by 1.7 percent in 2014, after growing by 1.9 percent in 2013. NWT’s existing mining operations have long passed their peak production, thus, mining output is expected to contract in 2014. However, high public sector investment, together with the anticipated development of a new diamond mine and three new metal mines this decade, will help the NWT economy grow and generate new jobs between 2016 and 2019.
The “Territorial Outlook,” published twice yearly, examines the economic and fiscal outlook for each of the territories, including output by industry, labor market conditions, and the demographic make-up. This forecast is funded through the Conference Board’s Centre for the North.
