Wholesale trade in the NWT experienced a sharp drop of 61.5 per cent between August 2019 and August 2020, the steepest drop in Canada.
That reduction came while wholesale trade Canada-wide increased by 0.7 per cent over the same period, according to a Statistics Canada report on Monday.
The wholesale trade sector refers to wholesale merchandise and its logistics, marketing and support services.
NWT’s output in August 2020 represented $19.1 million in wholesale trade, down dramatically from $49.5 million in August of last year.
Nunavut’s wholesale trade fell by 21.7 per cent, while Yukon’s increased by 13.6 per cent, the highest level in the country.
NWT Chamber of Commerce President Jenni Bruce said the statistic is discouraging. She thinks the closure of the Ekati diamond mine likely played a role in the fall of wholesale trade.
“(It’s) just another example of how important the resource sector is to our economy. I (also) believe that because of the border restrictions, most commerce has stopped flowing in and out of the territory.”
Wholesale trade activity in the NWT is very volatile due to the economy’s heavy reliance on the non-renewable resource sector, especially the three diamond mines, said Department of Finance spokesperson Todd Sasaki.
“A significant decline is not unexpected given that the Ekati diamond mine is in care and maintenance and has not been stocking up for the ice road season. The significant decline in exported diamonds, which is also a component of wholesale trade, is also a major factor in the decrease.
“We continue to assess data as it arrives and note that data is confirming what we already know: the COVID-19 pandemic has severely disrupted the territorial economy.”
A June report from the Conference Board of Canada forecasted that the NWT would perform the worst of the three territories, with its economy expected to shrink by 3.3 per cent in 2020-21.
The main factors behind the decline were Covid-related downturns in tourism, accommodations and food services and the suspension in March of Dominion Diamond Mines’ Ekati operation.