NUNAVUT
The Conference Board of Canada has released its 2015 economic forecast for the North, including Nunavut.

An excavator works Baffinland Iron Mines Corp.'s Mary River deposit in 2014. The company has applied to increase production at the mine, which would mean more hiring if the application is approved. The 2015 Conference Board of Canada economic outlook for Nunavut paints a positive picture for what to expect, even while not including further development at Mary River in its forecast. - photo courtesy Baffinland Iron Mines Corp.

Despite the depressed capital market for junior mineral explorers -- as evidenced by the TSX Venture exchange which continues to hover just above market lows not seen since 2008 -- the board sees reason for optimism that 2015 bring with it more jobs and continued economic growth.

The board is anticipating 6.8 per cent GDP growth in Nunavut for 2015, which if holds true would be the strongest GDP growth in the North by far, and would outstrip Canada's overall expected GDP growth of approximately 2.6 per cent.

But the board anticipates this to be a single year bump in GDP with growth returning to a more modest 2.3 per cent in 2016.

The big boosts in 2015 to the Nunavut economy are expected to flow from Baffinland Iron Mines Corp.'s first full year of production at the Mary River iron ore mine, ongoing construction at the $143 million Canadian High Arctic Research Station in Cambridge Bay and at the $300 million Iqaluit airport expansion project. Work will also begin this summer on the $40 million Iqaluit aquatic centre.

Large construction projects can have a major impact on the GDP of Nunavut thanks to its relatively small population. For example, mine construction at Mary River in 2013 boosted the construction industry by 80.3 per cent. This contributed to the overall 11.5 per cent GDP growth Nunavut saw in 2013.

The authors of the report expect 2015 to be a busier construction year than 2013.

The board expects Agnico Eagle's Meadowbank gold mine to show lower gold production in 2015 thanks to the mining and processing of the lower grade Vault deposit. On the other hand, Agnico Eagle is entering 2015 with all cylinders firing on the mineral exploration front thanks to both the Meliadine and Amaruq deposits.

The Meliadine deposit is in the latter stages of permitting while Amaruq -- discovered only in 2013 -- has already seen more than $10 million in exploration dollars spent on it to produce over 30,000 metres of drilling. A maiden mineral resource for Amaruq is expected early this year.

The Amaruq deposit has been described by Agnico Eagle president and CEO Sean Boyd as a potential future driver for the companies gold mining activity in the North.

The report stated that none of its forecasting for 2015 included development of projects by Agnico Eagle as they are so dependent on market conditions for gold. This makes Meliadine an "upside risk" in the sense that even if a negative construction decision should be made in 2015 it would not affect the forecast.

Baffinland Iron Mines applied to increase production at Mary River substantially in a move that could more than double hiring at the mine and related Milne Inlet port site. The increase in production would require near year-round shipping, something which the Nunavut Planning Commission will first review which may lead to further review by the Nunavut Impact Review Board.

The final numbers were for mineral and mining exploration spending in Nunavut won't be known until March, but the Conference Board of Canada sees no reason to expect spending to not align with Natural Resources Canada's forecast the spending will drop in 2014 for the third year in a row.

At the peak of the commodity cycle in 2011, there was $535.7 million in mineral exploration spending. For 2014, the forecast was $166.5 million.

The report noted that the private sector continues to grow in terms of its contribution to the Nunavut economy as measured in terms of percentage of GDP.

In 1999, public sector spending (government, health, education and social services) accounted for 52 per cent of the territory's GDP. In 2015, the report forecasts public sector spending to only account for about a third of Nunavut's GDP.

Public spending is expected to grow by 2.8 per cent in 2015 thanks to Nunavut's rapid population growth.

With construction spending expected to increase by approximately $100 million in 2015 -- not including work related to possible expansion at both Mary River and Meliadine -- this could mean a significant bump in job openings.

But the report notes that approximately 60 per cent of all construction jobs in Nunavut are filled by out-of-territory workers.

"Only about 40 per cent of construction jobs are filled by workers from within Nunavut, as companies tend to fly in a large number of southerners, the majority of who will not take up residence in the territory," wrote Justin Cooke, Conference Board of Canada economist and joint author of the report.

"So an additional 300 to 350 workers from outside the territory will be needed in 2015."

Nunavut's population continues to be the fastest growing population in Canada thanks to a birth rate of three children per woman. Nunavut's population is expected to reach 37,300 in 2015 and 38,000 by 2016.

Despite the rapid population growth unemployment continues to drop in the territory. In 2011, unemployment was 16.5 per cent in the territory. For 2015, the board is forecasting an unemployment rate of 11.7 per cent, which would be an almost two per cent decline in unemployment over 2013.