Anne Jackson could always count on springtime to bring guests to her bed and breakfast in Fort Good Hope, N.W.T.
That’s the time every year when the territorial government always seemed to send up officials to the fly-in community on the Mackenzie River, about 800 kilometres from Yellowknife. Lawyers, health officials, housing workers, accountants — they’d arrive in Fort Good Hope like clockwork.
Usually, they’d stay at Jackson’s Bed and Breakfast, where Anne’s dad, Wilfred, is quick with a story, a joke or piece of wisdom learned out in the bush, shared over tea or bacon and eggs. Those springtime guests helped sustain the business through the lean seasons.
But no one is coming this spring.
With all but the most essential travel and gatherings banned to prevent the spread of COVID-19, the Northwest Territories is very nearly locked down. It’s starving an already lean economy even further and it’s left many worried about how bad things can get.
“It’s been slow, and when I say slow, there’s nothing, no guests,” Jackson said. “We weren’t prepared for this.”
Anne Jackson runs Jackson’s Bed and Breakfast with her mom and dad. They’re not getting any guests as COVID-19 continues. They’ve applied for relief, but it’s yet to arrive. (Submitted by Anne Jackson)
Like business owners across Canada, Jackson is poring over her accounts. She’s at the kitchen table, figuring, adding, subtracting, doing the mathematical gymnastics it requires to keep paying the bills without any money coming in. They’ve applied for relief, but nothing’s reached them yet.
On top of that, she’s watching as the first cases of COVID-19 appear in the North, hoping her community isn’t next.
“It’s like watching a movie,” Jackson said. “We’re isolated, but we have to talk about what happens if it does get here. The fear is that if it does, it will affect everybody. That’s what’s on everybody’s mind.”
COVID-19 and the N.W.T. economy
So far, COVID-19 has yet to gain a strong foothold in the Northwest Territories. There have been five confirmed cases and all have been isolated. There is no evidence of community spread at this time.
But officials have been aggressive, issuing strict orders that have forced most businesses to close and banned nearly all gatherings of people.
“It’s going to hurt a lot of people,” said Dave Ramsay, a business consultant in Yellowknife who was the Northwest Territories’ minister of industry from 2011 to 2015. He estimates up to 50 per cent of businesses won’t survive without adequate relief.
“These are small, medium-sized businesses that can’t weather the storm,” Ramsay said.
Its $5-billion GDP is driven by its three diamond mines and government. Its budding tourism industry, which relies heavily on tourists from Asia, has been shut down. Its tax base is small — about 75 per cent of the government’s revenue comes from Ottawa.
“We’re a ward of the state,” Ramsay said. “We have been for some time.”
Teetering mining industry
The mining industry, which already had problems, continues but not at full steam.
One mine, Ekati, has shut down and sent its workers home. The other two remain operational but at a limited capacity. They’ve sent some workers home with pay to protect their remote northern communitiesfrom the virus, and are taking on extra costs, such as chartered flights, to bring employees in from southern Canada. It remains unclear whether they are eligible for federal aid.
If we don’t have mining here in the N.W.T., we don’t have much of an economy.– Dave Ramsay, former N.W.T. industry minister
If those mines close, either because of health concerns or because of the global economic downturn following the pandemic, Ramsay and others say the results could be catastrophic.
“If we don’t have mining here in the N.W.T., we don’t have much of an economy,” Ramsay said.
The Gahcho Kué mine, pictured here in 2017, continues running during the pandemic. If the territory’s three mines shut down for an extended period, the economic fallout could be catastrophic. (Garrett Hinchey/CBC)
Ramsay also serves on the board of directors for Fortune Minerals, a company developing a mine project near Whati, N.W.T., and is already seeing investors shy away.
“It’s almost impossible to raise money out there in the markets,” he said. “It was tough before, and you throw a global pandemic in the mix, it becomes really tough.”
Ramsay’s hopeful the territory will convene an economic task force made up of business leaders and former politicians to come up with creative solutions.
‘Orders of magnitude worse’ than 2008-09 crisis
Though the Conference Board of Canada does not yet have an outlook on how COVID-19 will affect the northern economy, it predicts Canada’s GDP will contract by 4.3 per cent in 2020. If that number is applied to the Northwest Territories’ $5-billion GDP, that translates to a loss of about $250 million.
It’s not just the diamond mines facing an uncertain future. Northern airlines, which are lifelines to remote communities such as Fort Good Hope, all face questions about their long-term viability.
Prime Minister Justin Trudeau spoke with reporters on Tuesday. 1:24
The federal government has announced $8.7 million to help those airlines hire back employees, but it doesn’t replace the revenue that will be lost if flights are still grounded during the summer exploration and tourist season.
Michael Miltenberger, a former Northwest Territories finance minister, now runs a consulting business and works with airlines such as Air Tindi, which operates medevac, resupply and commercial passenger flights between Yellowknife and the territory’s smaller communities.
He says what he’s seeing now is much worse than the 2008-09 financial crisis.
“It was one thing in 2008 when money became an issue and credit became an issue,” he said. “This is many, many orders of magnitude worse. You’ve lost your customer base literally overnight.”
In Fort Smith, N.W.T., where Miltenberger lives, nearly all businesses are shuttered: restaurants, hair salons, anything in the service industry.
He’s concerned about how long-term economic hardships and anxiety will affect families, possibly making the territory’s well-documented social problems worse as time goes on.
Government triaging relief
So far, the Northwest Territories has offered businesses an aid package worth $21.5 million, mostly in waived fees, deferred payments and low-interest loans. That’s in addition to existing federal programs and a $130-million northern aid package Prime Minister Justin Trudeau announced last week.
For the most part, the $21.5 million represents money the territory is not taking in, and it’s unlikely to have much room to borrow more for future relief. That’s because of the federally imposed debt cap. The territory is only able to borrow $30 million before it hits its $1.3-billion limit.
N.W.T. Industry Minister Katrina Nokleby recognizes that if left too long, the territory’s economy may not recover from the coma it’s in now. She describes her work as triage, as she balances health and safety with the territory’s grim economic reality.
“Triage unfortunately is probably the best word for it,” Nokleby said. “Where are the priorities? What are the critical pieces? Where are we going?
“If we pack up shop right now and bunker everybody down under lock and key, we won’t have an economy to come back to.”
N.W.T. Industry, Tourism and Investment Minister Katrina Nokleby speaks at a news conference March 20 announcing the first wave of COVID-19 relief for the territory. (Alex Brockman/CBC)
In the short term, Nokleby is looking at what businesses can be leveraged to help in the pandemic relief, delivering medical supplies, equipment or personnel. Long-term, she’s looking at approved government construction projects to see if they’re still safe to go ahead.
Amid these dire predictions, Nokleby does hope whatever the new normal is, will leave the territory more self-sufficient, with a stronger economy than before.
But to do that, the Northwest Territories’ economy needs to survive first.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
