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Economic challenges not insurmountable: minister

Despite a “grim” prediction from the Conference Board of Canada, observers remain optimistic about the NWT's economic potential.

NNSL file photo
As diamond mining winds down, workers will lose their jobs and leave the NWT, predicts the Conference Board of Canada in its latest economic outlook for the territories.

“We've faced these challenges before, but we've always managed our way through them and we'll work our way through this one,” Finance Minister Robert C. McLeod said Wednesday.

The board's most recent economic outlook for the territories, released Monday, paints a bleak picture of the Northwest Territory's future.

All three operating diamond mines are set to close by 2035, states the think tank, and with waning diamond production, “almost all sectors of the territory's economy will suffer.”

(Dominion Diamonds announced in September, 2017 that a new cave mining method could extend operations at Ekati to 2042.)

“For now, the best years for the Northwest Territories are behind it,” reads the report.

“Mining is important to the NWT as a whole ... but we've got to make sure we support opportunities in regions,” said McLeod.

“Tourism, agriculture, manufacturing, the knowledge economy, we'll continue to support those in anyway possible.”

The NWT mining industry is slowing down, states the report, with diamond production having peaked last year.

Less production will result in higher unemployment and increased migration out of the territory.

By 2035, nearly 1,300 mine workers who call NWT home are expected to lose their jobs.

Two metal mines set to open in the early 2020s will not offset losses from declining diamond production, according to the outlook.

Frame Lake MLA Kevin O'Reilly said for years, he has been pushing the government to diversify the economy.

“Our minister of Industry Tourism and Investment continues to, in my opinion, spend far too much time on mining and doesn't really have a broader view of a vision of sustainability,” he said Wednesday.

But O'Reilly insisted he is “not as pessimistic” as the Conference Board of Canada, and pointed to opportunities for growth in the tourism and agriculture sectors.

“There's some really hopeful signs in our economy,” he said.

The governor of the Bank of Canada expressed similar views when he was in Yellowknife on Tuesday.

“I think the best growth business is the tourism business,” Stephen S. Poloz said during a press conference at the Explorer Hotel.

“(Tourism) doesn't get as much hard analysis as the mining sector does, but it deserves it, because those folks come and they spend money and they enjoy themselves and their friends come.”

David Connelly disagrees.

The owner of Ile Royale Enterprises, a Yellowknife consulting firm specializing in economic development opportunities related to the natural resource sector, said that to make up for losses in the mining economy, the growth that would need to happen in industries such as tourism, fishing, trapping, art, agriculture and manufacturing “is almost unimaginable.”

The board also had forecasts for the territory's real gross domestic product – the inflation-adjusted value of all the goods and services produced in NWT in a year.

It predicts the real GDP will shrink 2.9 per cent this year, and by an average of 1.1 per cent a year over the next two decades.

“That's highly unusual in any economy,” said Connelly.

He said it's time for politicians to shed their rose-coloured glasses and take a hard look at the Northwest Territories' economic prospects.

“So often politicians seem to say the center is rosy, everything's good, don't worry about it,” said Connelly.

“At some point leadership requires them to face the issue square on and come up with a strategy, even if that strategy is going to be difficult.”

Connelly believes federal, Indigenous, territorial and municipal leaders should collaborate on a bold, non-partisan strategy to “change the investment climate” in the Northwest Territories.

His suggestion: invest in a transmission line that would deliver large amounts of hydro power to the resource-rich Slave Geological Province.

When Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, saw the Conference Board report, he felt “depressed.”

“You try hard to put the flags out and say these are the things that need to be done folks,” said Hoefer.

He said opening up more land for development and settling land claims would offer potential investors more certainty.

“When we see exploration here flat-lining for over ten years, where other jurisdictions are reaping the benefits of it, you go, 'this is really disappointing,'” he said.

“The Conference Board of Canada report has really helped enunciate that.”