Economic growth slides
MLA calls on cabinet to increase spending to boost economy; territory projects 13.7 increase in gross domestic product this year
Shane Magee
Northern News Services
Monday, May 8, 2017
NORTHWEST TERRITORIES
The Northwest Territories economy shrank slightly last year compared to positive growth in the other territories, Statistics Canada data shows.
Statistics Canada released data on gross domestic product, a measure of economic activity, that shows shifts in the territory's economy between 2006 and 2016. - graphic courtesy of the NWT Bureau of Statistics |
On May 1, the national statistics agency released estimates of 2016 gross domestic product (GDP), which is a measure of the health of an economy. It tracks the total dollar value of goods and services produced.
The territory's GDP shrank 0.1 per cent between 2015 and 2016 after rising 1.3 per cent between 2014 and 2015.
Yukon's GDP grew 8.2 per cent while Nunavut grew 3.9 per cent. Overall Canadian GDP grew 1.3 per cent.
"We are sliding backwards out of the three territories, which is an unenviable position to be in," said Kam Lake MLA Kieron Testart, who has repeatedly said the government needs to increase spending to aid the economy.
"Unfortunately, the course of cabinet has largely been to focus on debt reduction rather than investing more strongly in our economy," he said.
Industry, Tourism and Investment Minister Wally Schumann said in a statement the results shouldn't come as a surprise due to the Snap Lake diamond mine and Cantung Mine closures late in 2015.
"The Northwest Territories economy is highly reliant on resource exploration and development and the direct and indirect economic opportunities that our resource sectors create," Schumann stated.
"We are working to attract exploration, investment and mines to the territory in order to bolster our economy, create jobs, and enable us to invest further in diversity."
In dollar terms, Statistics Canada estimated the territory's GDP was $3.7 billion last year, down $4.6 million from 2015.
The anemic Northwest Territories results fell bellow a GNWT projection of 0.2 per cent growth.
The GNWT's 2017 budget estimated 2016 GDP would be $3.86 billion. The same budget projects a major turnaround this year, with GDP increasing 13.7 per cent to $4.389 billion.
The forecast is based on the start of production at the Gahcho Kue diamond mine.
The end of construction at the mine contributed to an 8.3 per cent decline in the construction sector last year, according to an NWT Bureau of Statistics report.
The decline in the construction sector would have been more severe had there not been a 203.7 per cent increase in the non-residential construction. That growth is attributed to work starting on the new Stanton Territorial Hospital in Yellowknife.
Other sectors that shrank compared to 2015 were: the arts; entertainment and recreation; natural resources; manufacturing; wholesale and retail trade; professional services; management of companies; accommodation and food services.
Sectors that grew include: agriculture; forestry; fishing and hunting; utilities; transportation and warehousing; finance and insurance; real estate and rental and leasing; health care and social assistance; and public administration.
Government - federal, territorial, municipal and aboriginal - together grew 2.6 per cent over 2015, representing 16.4 per cent of GDP. The natural resources sector represented 24.4 per cent of GDP, the largest sector.
Overall, the economy remains below where it was before the 2008 financial crisis.
Testart said he thinks reinforce a need to put pressure on the territorial cabinet to come up with ways to address economic growth.
"We can't just wait for a new mine to open," he said. "There's potential out there, but we can't hold our breath and be idle."
