Nunavut’s economy to grow this year despite pandemic: report

“The territories are expected to weather the downturn relatively well”

Baffinland Iron Mines’ port facility is seen at Milne Inlet. The company’s operations are described by the Conference Board of Canada as a “bright spot” in Nunavut’s economic outlook. (Photo courtesy of Baffinland)

By Nunatsiaq News

The Conference Board of Canada expects Nunavut’s economy to continue to grow this year, despite the effects of the COVID-19 pandemic.

That’s in contrast to Canada’s provinces, which have experienced deep economic declines due to the pandemic.

“Although Canada is in the midst of its most severe contraction on record, the territories are expected to weather the downturn relatively well,” said Richard Forbes, senior economist, economic forecasting, at the conference board, in a news release.

“A critical component of the outlook will be how well the territorial governments are able to manage the re-opening of their respective economies and the ability of mining companies to maintain or restart operations.”

The report, titled Shielded From the Worst: Territorial Snapshot, provides an economic forecast for all three territories. For Nunavut, it forecasts that Nunavut’s economy will expand 6.1 per cent this year and 13.2 per cent in 2021, marking the territory’s fifth and sixth consecutive years of economic growth above 5 per cent.

“While the outlook remains positive, the COVID-19 pandemic will hurt the territory’s economic growth this year, particularly in its mining sector, which accounts for about one-third of Nunavut’s real GDP,” the report states.

“Fortunately, the territory’s mining sector was already in terrific shape, and the pandemic impacts on the industry will be temporary.”

Employment in the territory is expected to fall 9.1 per cent this year but rebound 4.1 per cent in 2021.

“A key reason for the steep reduction in employment is the expectation that, compared with businesses in other regions of Canada, many firms in the territory will be slow to reopen,” the report states.

“Because many communities in the region do not have the full and easy access to the health care needed to deal with an outbreak, Nunavut will have to be particularly cautious about reopening its economy.”

Unfortunately, the conference board expects Nunavut to continue to see higher unemployment than elsewhere in the country. In 2019, the territory had an unemployment rate of 13.4 per cent, which is almost 2.5 times the national average.

“The high unemployment rate exists because many of the young people in Nunavut today do not have the skills needed to work in the territory’s mining industry and they end up unemployed,” the report states.

This year, Nunavut’s unemployment rate is expected to rise to 18.9 per cent as the territory loses over 1,200 jobs. That’s partly a consequence of the pandemic, and partly due to construction jobs at Agnico Eagle’s Meliadine and Amaruq mining sites wrapping up last year, resulting in fewer jobs in the construction sector.

In 2021, the conference board expects Nunavut’s labour market to partly recover, by adding about 500 jobs. That’s less than half the number of jobs expected to be lost this year. This would bring the unemployment rate to 15 per cent—an improvement on this year, but higher than the average rate for the five years leading up to 2019.

“A major reason why this will be a partial (rather than a full) recovery is that many of the workers who lost jobs in the construction sector will not able to transition into mining-related jobs,” the report states. “That is because, compared with the construction sector, a greater share of mining jobs in Nunavut go to workers from other regions of the country.”

And while employment is expected to grow 1.3 per cent annually between 2022 and 2024, the unemployment rate is expected to still rise during this period. “This is due, in part, to Nunavut’s high fertility rate, which results in quicker labour force growth than in other parts of Canada.”

The conference board says that the outlook for Nunavut’s mining industry “remains positive,” with the sector expected to grow 18.6 per cent this year. That’s down from the 32.5 per cent increase projected by the conference board in February.

“The reduced outlook for this year is due largely to scaled-back production at the territory’s gold mines. Some workers from Agnico Eagle’s Meadowbank and Meliadine operations and TMAC’s Hope Bay site were sent home as a precautionary response to the pandemic. Combined, the territory will produce about 600,000 ounces of gold this year, well below the 890,000 ounces forecast in February,” the report states.

The conference board describes Baffinland Iron’s Mary River mine as “a bright spot” in the territory’s mining outlook. While the company’s expansion plans remain up in the air, in March, Baffinland received an extension to continue shipping up to 6 million tonnes of iron ore annually, up from its original limit of 4.2 million tonnes.

“While Baffinland Iron has sent Nunavut-based workers home temporarily due to the pandemic, that will not affect its iron ore production,” the report states.

“Next year, we expect mining operations in the territory to be fully recovered from the COVID-19 crisis. As such, many of the gains for 2020 that were forecast in February will be realized next year, and output in the sector will rise 34.4 per cent.”

And further ahead, the conference board expects that Sabina Gold & Silver Corp.’s Back River property in the Kitikmeot will go into production a year later than originally expected, due to drilling being delayed by the COVID-19 crisis, in late 2023.

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(12) Comments:

  1. Posted by Missed Opportunities on

    It’s such a shame that the systems in place here in Nunavut have failed to adequately produce employable Nunavummiut. We see huge numbers of jobs going to out-of-territory workers due to “people in Nunavut… not [having] the skills needed to work in the territory’s mining industry and [ending] up unemployed”.
    .
    I will grant that there are significant challenges here to producing educated, employable young adults, but not enough has been done. I think a lot of the head honcho’s in Iqaluit don’t see it. They continue to pump more and more money into Iqaluit, hiring all sorts of people into jobs with little to no real effect, meanwhile the communities not lucky enough to be designated as a “decentralized community” see almost nothing.
    .
    We saw in Nunavut News just a couple months ago, unemployment rates of 40.2% in Clyde River, 39.7% in Taloyoak, and others very similar, while Iqaluit’s unemployment rate is 9.6%. And yet year by year, nothing is changing. This government needs to focus on investing in the today’s youth, now, because change takes time.

    • Posted by Reasonable Take on

      A very reasonable take. One can understand the necessity of the different services necessary to make a functioning territory, but you can’t help but wonder about the needless bureaucracy that plagues Iqaluit.

      How is Clyde River supported by the bloated management in Iqaluit. One only has to go to these communities to realize how disconnected they are from what goes on at “Headquarters”. Management get overworked and there solution is to hire more people in too loosely defined roles. The issues are multiplied with their inflated wages, the money doesn’t even stay in the territory it’s shuttled off down south to investments, family or mortgages.

      As you said education needs to be a major factor it should be the number one priority in Nunavut. It should be the topic everyday at question period until kids here are getting an adequate chance to succeed. If there is no foundation every other decision to improve things doesn’t matter.

      • Posted by Darek on

        Can you imagine for a moment what would happen if GN committed to placing no more than 1 our of every 3 government jobs in Iqaluit, and the remainder would be placed in other communities? Proportionately by population. That way those wages being paid, those housed being built, those services serving those high paying jobs would then be shared in all the other communities.

        To my understanding, all the communities have telephone service. Sitting at a round table coughing on each other is going out of style, so conducting a meeting by phone is just as effective.

        Just imagine if 66 out of every 100 Government of Nunavut workers lived in the communities other than Iqaluit, and faced the same issues as everyone else, and could see the issues of each community with their own eyes.

        Wonder how that would affect their priorities?

        • Posted by Catch-22 on

          Hiring for these positions in the communities is a huge issue, and will only get bigger.

          People don’t want to go to the communities to fill the positions, yet there is no one qualified locally, so positions sit empty for years.

          Either the communities need to make themselves more appealing to workers from outside the community, or else we’ll have to wait until the local population is sufficiently educated to fill the empty positions.

    • Posted by Youssef on

      One reason unemployment rates in the smaller communities is so high is because those communities are economically nonviable. There will never be full employment in a community that has no industry, that produces nothing, that lacks the capacity, geography and contentedness to the modern world. Complaining about Iqaluit is a distraction from this fact. It wouldn’t matter how much money your poured into Clyde River, for example, it would never pay off. The reality is most of Nunavut’s communities are economic deserts and prisons of despair.

  2. Posted by Miner on

    The reason why is the gn, for the past 2 decades has done nothing, for mine training is they don’t know how,and if they ignore mining it will go away , the gn cannot get high school graduates, to work in any field of employment because of their education priority’s,which are lost.

  3. Posted by Address Basic Needs First on

    Everyone goes off on the need for education and kids to go to post secondary, but are not looking at why they do not succeed. We are asking these students to live in overcrowded food insecure homes. We are asking them to excel and get good grades without providing mental health and social services to them in the community. We are asking them to focus yet there are limited recreational outlets in the communities for young adults. We are asking them to train for mine jobs while being away from the support systems they need. Nunavut needs to deal with the housing and food security crisis before we pump money into education. We are setting students up for failure if they do not have a safe supporting home to then foster higher learning.

    • Posted by Your Right on

      Your right. But why not run the majority of that through the education system? When I talk about education I’m not just talking about knowing your times tables, it’s a entire preparation for the rest of your life. Run the food program through the school. Boost funding for recreational programs through the school. Give more opportunities for kids to see other places. Damm let kids sleep at the schools if need be(I know not plausible). Make the school a safe haven and fun place to be. If I was in the education system in Nunavut I would of never made it because quite frankly it sucks to come to school for 95% of the kids up here. And if kids can’t finish high school it’s a tough road to accomplish anything else in this day and age.

    • Posted by Missed Opportunities on

      It looks like you’re jumping to conclusions about my post. If you read it again, it is not solely about education. I said that the systems (plural) fail to adequately produce employable Nunavummiut, as well as saying there are significant challenges here to producing educated, employable young adults. I ended by saying that we need to invest in our youth, and I did not solely mean in education. Understandably, there is much more to it than just throwing money at the schools.

      • Posted by Darek on

        When you read about the communities doing well with regard to things like teen suicide, you see those communities have strong youth programs, sports, ping pong, kayak building or anything else that gets the kids out of the house, gets them active so they can burn off some energy in a positive environment.

        The most memorable program I’ve seen in the North is one town, where every single night there was something going on. The school gym had Volleyball set up a couple of nights a week, then basketball for another couple nights, then badminton for a couple more evenings. But that wasn’t the amazing thing.

        On those nights when I went out, HALF those showing up to play were parents. Many played, while others and some elders just cheered the players on. Some came to the arena and cheered for the hockey games, others came to the school gymnasium to cheer for the players there.

        Whatever they were doing they did it as a community. And that’s something that doesn’t need funding!

        So I have an issue with this idea that throwing money at our kids will solve their problems. Parents can do much more for their children than cash in the hands of strangers getting paid to provide some service (though I agree that sometimes, professional medical services are necessary and that’s not what I’m referring to).

        Get involved, not just to cheer on your children, but ALL the children.

        It’s an incredible sight when a community comes together like that. Rare but truly beautiful to witness.

  4. Posted by Please – take head out of the sand on

    Now that the Conference Board of Canada has identified what we’ve already known, that most jobs exist in the mining sector.
    Nunavut is still a relatively young mining district, but we need to be prepared and create a plan to promote education and careers in the minerals industry.
    Finding local talent in the minerals industry is currently a real challenge for Nunavut’s mineral industry, they want to hire more Nunavummiut but find it difficult, due to the limited skill set.
    We have to start early and introduce Science, Technology, Engineering, and Mathematics (STEM) education programs in schools as part of the curriculum.
    It’s basically a supply and demand principle. The demand is there but Nunavut is currently supplying just the non- skilled sector, little in the semi – skilled and skilled sectors, these areas are currently filled by southerners. This needs to change.

  5. Posted by Putuguk on

    It is a crying shame. The basis of any economy today is the skills and abilities of the workforce.

    When I was going through elementary and middle school decades ago in what is now Nunavut, we had excellent attendance in our community. It was like that everywhere. Our generation therefore ended up being highly employable.

    Slowly over time, local communities and regional education boards gained more control over the education system. Then eventually all communities were gifted their own High Schools, ending the residential school era. This was all great and should have ushered in a new golden age of education in the north.

    In the 1970’s truancy was not tolerated. Slowly over time, the bureaucrats and administrators got it in their minds that somehow, because we had such a hard time in residential school, that meant the younger generation could be denied an education. After a while, parents and communities got the message that truancy was ok. Well, as the old saying goes, 2 wrongs never make a right.

    Government has the biggest influence on life up here. The problems we have are therefore rooted in governance. If people get the idea that government considers education as optional, they will live their lives accordingly, and their actions will be end up being accommodated by the system. I cannot recall any enforcement action taken against truancy in the whole 20 year history of Nunavut, even though it is a huge problem.

    A better approach to the residential school legacy could have been doubling down on the commitment to deliver for everyone on the quality and relevance of an Inuit directed, locally sourced universal education.

    Nunavut is now reaping what it has sowed. We have young people thinking they should be employed and would be competent in high paying jobs with a grade 9 education. We have up to 60% of our youth not completing their secondary education. Our College is overburdened teaching what should have been learned in grade school. Those that did not go to school K-12 are hamstrung in looking at these emerging opportunities.

    Having our own territory and taking control of our destiny here in Nunavut should have meant us doing what is right for us. Not what can be excused from a cultural or historical perspective, or is convenient and easy. That really is the path in education that we have followed to date. If we are serious about controlling our destiny, we need to really deal with truancy.

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