The issue: NWT economy
We say: all hands on deck
It’s reached a stage where it’s hard to tell whether the crunching beneath our feet is compressed snow or eggshells.
Yellowknifers are anxiously hoping that another wave of Covid doesn’t wash over us, forcing a lockdown that suffocates social interaction and puts another nail in the coffins of local businesses.
News broke earlier this week that Dominion Diamond Mines would recall approximately 60 furloughed Ekati diamond mine employees in anticipation of a future restart. It brought a glimmer of hope in what has been an extremely gloomy 2020.
Ekati represented the NWT’s most critical private-sector economic engine since 1998. At its peak, the mine employed more than 1,600 people, with a fair number of those workers being residents of our city. The Diavik diamond mine, another juggernaut, went into production five years after Ekati. The short-lived Snap Lake project was replaced by a De Beers/Mountain Province Diamonds’ Gahcho Kue diamond mine, which has been operational since 2016.
That triumvirate has dominated the NWT’s industrial landscape ever since.
But there were worrisome signs well before the coronavirus appeared in its first headline. The territorial gross domestic product retracted 8.1 per cent between 2018 and 2019, to $4.4 billion. Over that same period, mining, which accounts for more than one-quarter of territorial GDP, tumbled by approximately 25 per cent – and that was before Ekati moved to care and maintenance status in March.
Next year’s statistics are bound to be downright dreadful.
Couple that with declining mineral exploration investment in the NWT – down 54 per cent, to $36.6 million during the first nine months of 2020 from a total of $79.8 million in 2019 – and the prospects for the future appear rather bleak.
But, just as the winter grows darker before the winter solstice brings brighter days, there will eventually be a turnaround in our economic woes. Much hope lies in the promising vaccines being produced by Pfizer and Moderna. Those inoculations are expected to find their way into the arms of Canadians in 2021.
That will, at least, allow our decimated workforce to pick up the pieces and a return to normalcy for many small businesses.
But questions remain over how we can make the economy more robust. Tom Hoefer, president of the NWT and Nunavut Chamber of Mines, proposes an enhanced mineral exploration tax credit for the North. He says it would help offset the higher costs of working here and provide an additional incentive for investors.
Finance Minister Caroline Wawzonek has signalled that the GNWT is prepared to do its part to promote the NWT as an attractive jurisdiction for minerals and metals mining.
The countdown is on. Diavik will close in five years. Gahcho Kue is projected to remain active until 2030. Ekati production could stretch into the 2030s, if it can even get back off the ground.
New mines typically take decades to commission.
The GNWT, in consultation with Indigenous and community governments, has started examining the potential to diversify the NWT economy through sectors such as agriculture, fisheries, forestry, the knowledge economy, manufacturing, arts, fostering entrepreneurs and a heavy dose of tourism. The latter is dead in the water until the pandemic passes, of course.
The alarm has been sounding for years about the need to grease the wheels for future growth. Covid has further bogged down an already struggling economy.
It’s imperative that we emerge from this dismal period with a clear vision for the coming years and explicit steps on how to execute. That’s going to take some brilliant ideas and broad consensus. We have to be equal to the task, our welfare is riding on it.