Question re: Economic outlook - October 28, 2015

Mr. Silver: I have a question for the Premier. For many years the Yukon Party insisted that the upturn in our economy was due to its great management of our territory. The Yukon Party was very good at taking credit during the good times, but they have been unwilling, however, to accept blame for the current economic slowdown we’re in.

A report in the spring confirmed our economic growth has stalled under this government. For a second year in a row, our economy actually shrunk. In 2014, it shrunk by 1.2 percent. The Yukon usually releases an updated economic forecast in the summer. Instead, this year, on October 20, as Yukoners were taking in the results of the federal election, the government’s own forecast was finally released. It said our GDP is expected to contract for a third year — a third consecutive year — decreasing by six percent.

Will the Premier confirm that the Yukon is the only place in Canada where the economy will shrink for a third year in a row?

Hon. Mr. Pasloski: What I will state to this House, and I have stated many times, is that the mining and the resource industry certainly is a cornerstone of our economy, an economy that comprises 37,000 people. We continue to strive at diversifying our economy, but in reality it is still growing in its infancy. We see other jurisdictions that rely on resource extraction for their revenue base experiencing the same downturn right now. I only have to look at the example of Newfoundland and Labrador, or in Alberta — what is happening there.

There are things that we can do. We focus on investing in infrastructure, we focus on looking at our permitting and regulatory processes, and we focus on training our youth and creating the training so that they are ready during the next time that the economy turns around. We are focused on what we can do because we do understand that there are things like commodity prices that unfortunately we don’t have the ability to control.

Mr. Silver: We are on our way to a third year in a row of negative economic growth, all under the leadership of the Yukon Party government. Now that is what happens when you spend several years riding on high mineral prices and failing to plan for the inevitable slowdown when mineral prices drop.

The Yukon’s own economic forecast released last week confirmed that the Yukon’s economy will shrink for a third year in a row. We are the only place in Canada where this has happened. Our economic performance is worse than both Nunavut and Northwest Territories in 2015. Yukon is the only place in Canada to record two consecutive years of negative GDP growth in both 2013 and 2014 and we had the second worst GDP numbers in all of Canada in 2014, at minus 1.2 percent. The new forecast says the decline will continue for a third year in a row and our economy will shrink by six percent.

Does the Premier take any responsibility for leading the country in shrinking the economy?

Hon. Mr. Pasloski: What the Leader of the Liberal Party doesn’t want to talk about is what those forecasts project for 2016, seeing Yukon come back to growth. Sadly there are still some significant issues to deal with in the other two territories. What I can confirm is that through this economic downturn that has gone on now for the past couple of years, what you have seen is strong financial management of taxpayers’ money.

We continue to be able to put out record capital budgets investing in infrastructure to be ready for when the economy turns, but also creating jobs and training today. We do this by managing the money. Unlike the other provinces and territories, by 2017, we will be the only jurisdiction left in this country that has no net debt — something to be loud and proud of.

As we hear today, in Alberta, Moody’s is now predicting that the Alberta credit rating will fall due to the record deficits. That means higher interest rates and even more money to pay for interest charges. We are in a very enviable position managing Yukoners’ money. They are very proud and they feel very comfortable knowing that we are at the helm looking after the money.

Mr. Silver: It’s very disappointing to watch the government duck responsibility of having the worst economic performance of any jurisdiction in the country for the last 36 months. In 2013 the government forecast — and I quote: “direction of growth and what we hope to be further prosperity for this territory”. Instead this government has delivered a staled economy.

Corporate tax revenues this year are half what they were two years ago — half. The prospects for 2015 are no better, with uncertainty hanging over the economy thanks to this government’s ongoing court battles with Yukon First Nations.

The Conference Board of Canada says that our economy will shrink once again this year. The Yukon’s own forecast says that it will shrink by six percent, leaving us at the back of the pack in Canada.

Why won’t the government take any responsibility for the fact that we currently have the worst performing economy in Canada?

Hon. Mr. Pasloski: In spite of the decreased commodity prices that we have seen for the last few years, in spite of the decrease in revenues, this government continues to post modest surpluses and record capital budgets in this territory, unlike any other jurisdiction in the country.

Sound financial management — we continue to focus on areas that we have control of during this economic downturn, focusing on things like diversifying our economy with the announcements made yesterday, with the creation of a redundant fibre line, the increased investment in the IT envelope and the investment in an independent power producing policy.

We continue to invest in infrastructure, telecommunications, transportation and education. We continue to invest in improving our regulatory processes with First Nations and industry.

As we come out of this downturn, this territory will be in the best position and we look forward to seeing how that engine will run.