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NORTHWEST TERRITORIES
Forecasts of an economic surge for the Northwest Territories this year have David Ramsay, minister of Industry, Tourism and Investment, setting ambitious goals.

Robert Bouchard, MLA Hay River North; Michael Willett, CEO Tamerlane Ventures Inc.; Hon. David Ramsay, Minister of Industry, Tourism and Investment; and Kevin Menicoche, MLA Nahendeh pictured at the 2012 Prospectors and Developers Convention (PDAC) in Toronto. - photo courtesy of the Department of Industry Tourism and Investment

Last year, the territory saw a 6.5 per cent decline in real gross domestic product (GDP), but the Conference Board of Canada is projecting much brighter prospects for the next two years, with a ramp-up in diamond production, coinciding with a jump in private investment spending, resulting in a 5.9 per cent increase in real GDP growth this year.

"The future is very bright for us here in the Northwest Territories," Ramsay said, with the conference board's findings and recent evidence of a turnaround in the territory's lagging mineral investment spending, prompting the minister to set a new goal for the territory:

"Three years from now, if you look at the Yukon and Nunavut, I think we can get back to first place again when it comes to investment," Ramsay said. "We're just getting around the corner here now and I think things will really be revved up."

While the NWT maintains the largest economy of the three territories, with a GDP of $3,132 million in 2010, the territory saw mineral exploration spending of $105.4 million last year, according to Natural Resources Canada's preliminary figures, compared to a record $502.3 million in mineral exploration spending in neighbouring Nunavut.

Expenditures in the NWT have never surpassed the $500 million barrier, Natural Resources Canada officials said.

"We are sitting on top of a huge resource wealth in our territory and I think we just scratched the surface when it comes to developing its true potential," Ramsay said. "$500 million wouldn't be out of the realm of possibilities."

Robust performance of the NWT's resource sector is expected to contribute to accelerated real GDP growth for the territory over the next two years, the conference board's winter 2012 Territorial Outlook publication stated, despite declines in mining and related construction also contributing to last year's contraction of the NWT economy.

"The Northwest Territories did contract in 2011 because of weaker diamond production, and that will rebound," said Marie-Christine Bernard, associate director of the conference board. "And also we had weaker construction activity -- that is also expected to come back and rebound in 2012.

"So both industries that pulled down GDP in 2011 will perform better in 2012, 2013."

In addition to construction expected to begin at De Beers Canada's Gahcho Kue diamond project, the territory has a number of mining prospects on the horizon, Ramsay noted, listing Canadian Zinc Corp.'s Prairie Creek mine project, Avalon Rare Metals Inc.'s Nechalacho rare earth element project, and Tamerlane Ventures Inc.'s Pine Point project.

"There's a number of them that are out there that we could at some point in time hopefully see cross that goal line and get into production," Ramsay said. "Which will obviously add tremendously to the economy both with jobs and business opportunities for companies doing work here."

The conference board forecasts employment will increase in the territory by 3.6 per cent this year, and another four per cent rise in employment in 2013.

"We need to make sure that we're training people, getting them ready for the opportunities that are going to come," Ramsay said. "And they will come."

Real GDP growth for the territory is forecast to accelerate to a 7.6 per cent pace in 2013, the conference board said.

The territory's 2011 GDP is expected to be released in April.

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