Shielded from the worst: economic outlook for Canadian Territories remains positive

Ottawa, ON, June 18, 2020 (GLOBE NEWSWIRE) — Ottawa, ON, JUNE 18, 2020 (Globe Newswire) – Canada’s Territories will weather the economic impact of COVID-19 better than most provinces, according to the latest forecast:  Shielded From the Worst: Territorial Snapshot.While Canadian provinces saw deep and sharp economic declines due to COVID-19, Nunavut and Yukon are both set to see real GDP gains this year (though not as great as initially forecasted) of 6.1 per cent and 9.0 per cent, respectively.Downturns in mining and labour markets will be more acute in the Northwest Territories with suspended operations at Ekati diamond mine and job losses in accommodation and food services sectors as a result of decreased tourism.The price of gold has increased sharply since the beginning of the pandemic; spelling additional good news for already strong mining sectors in Nunavut and Yukon, where operations remain mostly intact.“Although Canada is in the midst of its more severe contraction on record, the Territories are expected to weather the downturn relatively well.” says Richard Forbes, Senior Economist, Economic Forecasting, at The Conference Board of Canada. “A critical component of the outlook will be how well the territorial governments are able to manage the re-opening of their respective economies and the ability of mining companies to maintain or restart operations”.  Key Findings, by Territory:YukonYukon’s economy is set to expand by 9.0 per cent this year, with an additional 7.7 per cent gain forecast for 2021. While this year will mark the territory’s strongest growth in overa decade, it is a significant downgrade from the 13.7 per cent growth we forecast in our February outlook.Despite the global pandemic, Yukon will post strong economic growth in 2020 thanks to increased production in its mining sector. Two mining operations in the territory remain on track to expand production sharply this year.The COVID19 pandemic is taking its toll on Yukon’s labour markets. Employment in the territory will rise 3.7 per cent in 2020, down from our 6.2 per cent projection in February.NunavutNunavut’s economy will expand 6.1 per cent this year and 13.2 per cent in 2021, marking the territory’s fifth and sixth consecutive years of economic growth above 5.0 per cent.Employment in the territory will fall 9.1 per cent this year but rebound 4.1 per cent in 2021. A key reason for the steep reduction in employment is the expectation that, compared with businesses in other regions of Canada, many firms in the territory will be slow to reopen.Northwest TerritoriesThe Northwest Territories’ economy will contract 3.3 per cent in 2020, a downward revision from the 5.5 per cent expansion we forecast in February. Mining is hurting the outlook for the Northwest Territories this year. We expect that the territory’s diamond production has reached its peak, as indicated by mining plans issued for Gahcho Kué, Diavik, and Ekati.Employment in the territory will fall 5.5 per cent this year but rebound 4.4 per cent in 2021 as most of the jobs lost due to the crisis are recovered. About The Conference Board of CanadaThe Conference Board of Canada is Canada’s foremost independent, non-partisan, and evidenced-based applied research organization.  We equip leaders and decision-makers with the economic reports, custom research, data, networks and events they need to solve our country’s most pressing challenges. Our focus areas include Canadian Economics, Energy & Environment, Innovation & Technology, Immigration and more. We stand at the intersection of research and policy, where insights meet impact.Follow The Conference Board of Canada on Twitter @ConfBoardofCdaMedia contact:Michelle Rozonmedia@conferenceboard.ca or 1-866-242-0075Corp Comm
The Conference Board of Canada
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