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.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
