The Conference Board of Canada has taken a good look at the numbers and following Canada's North Summit 2013 in Whitehorse, YT, issued a press release stating the obvious: "Slowdown in mining sector holds back economies of Canada's territories in 2013."
No one familiar with this year's falling metals prices doubts that the economies of all regions reliant on the mining industry are stunted this year. Gold that started the year at almost $1,700 an ounce has dropped below $1,300 and appears to be staying there. Silver plummeted from a little more than $30 an ounce to below $20, but has recently climbed cautiously to $21. Copper is down from about $3.50 a pound early this year, flirting with $3.00 and now sitting at about $3.20. Nickel, too, is on the skids – from about $8.00 a pound to a bit above $6.00.
This widespread price fizzle is affected not only the territories but all major mining regions. A look at Timmins and Sudbury, Trail and Fording River, north (for uranium) and south (for potash) Saskatchewan would certainly reveal a similarly depressed economic condition.
And it is not just regions with producing mines that are feeling the effects of low metals prices. The junior industry, the backbone of mining's future success, is having increasing difficulty raising money for grassroots exploration. Unless they can find new economic deposits, we will have no mining industry someday. Even when promising deposits are outlined, investors are reluctant to promise the hundreds of millions of dollars needed to develop them no thanks to today's soft prices.
But all is not lost, said Conference Board VP and chief economist Glen Hodgson. "The outlook beyond this year is more promising. Economic growth in the territories over the next few years is expected to easily outpace growth in most other Canadian regions."
The Board estimates the real GDP in the territories will grow by 3.2% in 2014 and 4.2% in 2015, and those numbers rely heavily on a bright outlook for mining over the next decade.
We would like to see our industry as the greatest creator of wealth in the North and for all its peoples. Can the mining industry provide the wealth to sustain the predicted growth? Maybe. Mining does generate several secondary jobs for every direct job at a mine site.
Or all CMJ readers and mining observers could run out and buy something made or gold – or silver or copper or nickel …
The Conference Board's "Territorial Outlook for Autumn 2013" is available to annual subscribers or it may be purchased individually at ConferenceBoard.ca.