Question re: Economic outlook - November 12, 2014

Mr. Silver:   I have a question for the Minister of Economic Development. Last Wednesday Statistics Canada confirmed that Yukon has the worst economic growth of any jurisdiction in Canada for 2013. Our economy shrunk by almost one percent. The report also gave some insight as to why this government’s forecast on GDP numbers for 2014 have been drastically rolled back. After initially saying that our economy would grow by 8.8 percent in 2014, the latest forecast is only 1.7 percent — again one of the lowest in the country.

One of the reasons our economy slowed for 2013 was that a number of mining projects delayed decisions on construction and production. One of the projects the government was relying on in their forecast was the reprocessing of old tailings at the former Whitehorse Copper Mine site. However, on September 22, the company behind the project said that the project was not looking good. Does the minister expect this project to proceed for 2015?

Hon. Mr. Dixon:         Mr. Speaker, I have no idea what that company plans to do with that particular project. My understanding is that with the downturn in magnetite prices, the project was looking less optimistic than it may have previously. What I do know is that the company has remained engaged with the Department of Energy, Mines and Resources on the regulatory side and with the Department of Economic Development on providing data, but I have no idea what that company plans to do with that particular project.

Mr. Silver:   The Yukon Party believes that it is growing the private sector; however, from September of 2012 to September of 2014 the number of private sector jobs in the Yukon dropped by 300.

The minister mentioned Keynesian economics in last week’s response where government spending is used to stimulate the economy, yet we had the lowest growth in Canada for 2013. We are near the bottom again for 2014. However, the government’s projecting 4.5-percent growth in 2015. Now that projection is based on, in part, the government’s belief that there will be a resumption of production at another mining project, the Keno Hill district. I hope that this does happen, yet with silver prices where they are, it is less likely.

How much of the minister’s forecast is based on this project proceeding in 2015?

Hon. Mr. Dixon:         Mr. Speaker, one of the things I should note is that what Stats Canada told us in their recent set of data was that the decline that we faced in 2013 was driven primarily by the decline and decrease in the construction industry. That industry fell by a considerable margin, especially compared to the mining industry. While the mining industry is important and it is important that we continue to take measures to improve the viability of the mining industry in Yukon, it’s also important that we recognize the value of the construction industry. That is why, earlier this year, we brought forward the largest capital budget in the history of Yukon. We have increased our overall spending considerably and the evidence is all around us when you look around Whitehorse.

You see the construction going on at F.H. Collins; you see the construction going on at the Whitehorse Rapids dam facility for the backup generators; and you see all the construction going up at the Whitehorse waterfront with regard to seniors housing being constructed there. These are all projects that provide considerable economic benefits to Yukoners and they also are all projects that the member opposite voted against.

Mr. Silver:   Mr. Speaker, it is the forecasts that are troubling for Yukoners. A year ago, the minister said that, in 2013, Yukoners continue to enjoy a growing economy. The minister, as we now know, was wrong. The economy shrunk in 2013. Growth is mostly flat for 2014 and the government is projecting growth of 4.5 percent for 2015. The problem is that many of the projects that the government relied on for those projections are sadly falling off the table.

The minister’s last forecast quoted an expectation of activity within the Eagle Gold mine as a key driver of their growth forecast for 2015. For the record, I am extremely hopeful for all of these projects and, despite the Yukon Party’s best efforts to try to convince Yukoners otherwise, I am absolutely in favour of responsible mining in the Yukon.

I have a very simple question for the minister: Does the minister see this project beginning construction in 2015?

Hon. Mr. Dixon:         Whether or not a project goes forward is a business decision that the company that owns the project has to take. I can’t make those kinds of predictions. What the Department of Economic Development does though is make forecasts for the coming years based on the best available data that the department has at a given time. We are not qualifying whether or not we think these projects go forward — we are not betting on them. We are simply saying that, based on the data available to us from these publicly traded companies, this is what the forecast looks like. It is not the Yukon government looking into a crystal ball. It is not us picking winners and losers. It is us making a forecast based on the best available data at the time of presentation.

I know that both parties have criticized the department for making these forecasts. They don’t seem to like the fact that the economists do this and try to make this data available to Yukoners, and have criticized those economists in the Department of Economic Development numerous times. But what I will continue to do is to stand up for those folks in the Department of Economic Development who do this work on behalf of Yukoners and continue to turn the criticisms of the department from the opposition back toward the opposition parties.