With slowdown in mining, Nunavut economic growth figure slows too
Mary River construction could boost growth in 2014
A slowdown in mineral exploration will have big impact on economic growth in the three territories this year, including Nunavut.
And Nunavut is “experiencing the largest pullback” of mineral exploration of the three territories, according to the Conference Board of Canada’s fall 2013 Territorial Outlook — a report that highlights GDP, or gross domestic production expectations for the territories.
Its territorial outlook, produced twice a year, looks at the economic output of Canada’s three territories.
“Real GDP in the territories is forecast to grow by a tepid 0.5 per cent in 2013,” a press release said.
As for Nunavut, its GDP is expected to grow 1.6 per cent in 2013, the Conference Board said.
That’s down from their last forecast in March, which predicted Nunavut’s overall economic growth would be 3.4 per cent in 2013.
But Nunavut’s economy is still expected to be grow more than the Northwest Territories and Yukon’s GDP combined, forecast at 0 per cent and 0.6 per cent respectively.
“A once-thriving mining sector is now reevaluating development and exploration plans due to lower commodity prices and tight capital markets, which makes it difficult for mining companies to obtain financing,” said the chief economist and senior vice president at the Conference Board of Canada, Glen Hodgson.
One mineral development in Nunavut that has recently hit a snag is the Chidliak diamond mine, 120 kilometres outside Iqaluit.
That’s after diamond mining company De Beers Canada Inc. decided not to enter a joint venture deal with Peregrine Diamonds Ltd. to develop the mine.
Now, Peregrine, the 100 per cent owners of Chidliak, say they are going to advance the mine themselves.
Spending on mineral exploration is down for all three territories in 2013, with Nunavut showing the biggest decline the press release said.
But Hodgson hinted that things are about to look up — next year.
“The outlook beyond this year is more promising. Economic growth in the territories over the next few years is expected to easily outpace growth in most other Canadian regions,” Hodgson said.
Even one big new mining project can generate big increases in the territory’s annual GDP stats.
The Conference Board says Nunavut’s GDP could grow by 3.7 per cent in 2014 because Baffinland’s Mary River iron mine “will kick the construction and transportation industries into high gear next year.”
That’s even after Baffinland released news of the scaled-down version of the Mary River project early in 2013.
Also, “a number of federal, territorial and municipal government projects are also slated to begin construction in 2014,” the press release said.
To order the Autumn Territorial Outlook, click here.