Gazing into the crystal money ball
Mike Thomas/Yukon News
A new economic report by the Conference Board of Canada serves up a fascinating mix of fact and forecast for the three northern territories.
The Territorial Outlook - Winter 2012 says economic growth in the North will far outpace the rest of Canada in the next couple of years.
The world’s insatiable hunger for gold, silver, copper and the like is expected to continue unabated despite some areas of uncertainty.
With three operating mines
- Minto, Wolverine and Bellekeno - and half a dozen more projects waiting in the wings, the report says the Yukon is “entering a period of sustained mining growth” that will carry it through the next decade or so.
By 2025 it figures about 38,700 people will call the territory home, up from 35,000 who do so today.
But the boom brings major challenges as well.
“The immediate concern for mining industry development in Canada’s North is not so much finding a market, but rather finding the skilled workers to lead these projects forward,” the report says.
The Yukon will feel the labour pinch more than Nunavut and the Northwest Territories, it says.
That’s because it has an older population than the other two, and that population is aging much more quickly than Canada as a whole. This shifting demographic will also put a major dent in government spending, especially for health care.
But not to worry, says the report. Thanks to the federal government, the Yukon can look forward to years of operating in the black.
And that’s the kicker.
Even with the huge increase in economic activity, the territorial government, not the mining industry, will continue to be the cornerstone of the economy.
Sure, it will raise more of its own money through income and corporate taxes, but it will be as addicted to transfer payments from Ottawa as it is today, the report says.
“Despite these gains in own-source revenues, the Territorial Formula Financing will remain Yukon’s largest source of income,” it says.
“In the current fiscal year, the transfer was $704.7 million or about 64 per cent of Yukon’s total revenues. In 2025-26, the TFF will increase to $1.16 billion, and will make up about 62 per cent of total revenues.”
So when all is said and done, the Yukon will still rely on Ottawa’s generosity, but will be minus a few mineral deposits.
It makes you wonder whether all the fuss and muss of the mining boom will actually be worth it.
Especially if there are huge environmental and social costs left in its wake, as has been the case in the past.
Maybe the next economic report should forecast those factors in as well if it wants to represent a true picture of what lies ahead.