Doug Ashbury
Northern News Services

NNSL (Mar 10/99) - Capital expenditures in the NWT are expected to drop a whopping 25 per cent this year, according to Statistics Canada.

The decline, by percentage, will be the largest of any province or territory in Canada this year.

It is estimated capital expenditures will be $571.8 million this year, down from $759.9 million (1998 preliminary actual).

"The intended 24.8 per cent decrease in territorial capital expenditures for 1999 is largely a result of a significant decrease in private capital expenditure intentions," Statistics Canada said. The figures include the western NWT and Nunavut.

Capital expenditures are money spent on capital assets such as buildings and machinery.

Public expenditure intentions are set to increase 2.8 per cent this year, to $183.5 million from $178.5 million, but private intentions are expected to drop 33.2 per cent, to $388.3 million from $581.4 million.

"This decline in private intentions is almost exclusively attributable to the mining industry, which accounts for a $224 million reduction in investment for 1999."

Completion of BHP's Ekati diamond mine was cited as the primary reason for the investment decline in the mining sector.

"To a lesser extent, the sharp decline in base metal prices, particularly gold prices, has also impacted investment in the mining sector."

The 24.8 per cent decline is well below the Canadian average increase of .2 per cent.

Despite the huge drop, NWT projected 1999 capital expenditures remains well ahead of the territorial average in the 1990s. For 1991 through 1996, expenditures fluctuated between $400 million and $450 million while 1997 and 1998 figures were around $650 million and $750 million respectively.