Final GDP figures for 2022 suggest the Northwest Territories had a middle-of-the-pack year compared to other provinces and territories, rather than being second-worst in Canada as May’s initial estimates reported.
Six months ago, preliminary figures from Statistics Canada gave the NWT 1.5-percent growth last year, better only than Newfoundland and Labrador, where the economy shrank.
This week’s finalized data improves the picture for the NWT, asserting 2.9-percent growth that’s more in line with the likes of Québec, Prince Edward Island and Nova Scotia, all of whom produced similar figures.
Yukon experienced growth of almost six percent, the second-highest in Canada behind Saskatchewan. Nunavut’s updated figure is barely above zero, relegating it to 12th place.
GDP, or gross domestic product, measures the size and growth of the economy in each region of the country. It counts the market value of all goods and services produced within each region during a specific year.
Normally, GDP is reported twice each year – a preliminary estimate for the past year comes out in the spring, followed by a final figure in the fall.
This year, the reporting is complicated by underlying updates that change the “reference year” from 2012 to 2017.
Reference years allow you to strip out inflation. That means you’re comparing the territory’s output from year to year without price fluctuations obscuring whether production increased or things simply got more expensive.
As a result of various changes, the NWT’s final GDP figure of $4.25 billion, reported this week, is actually smaller than the $4.4 billion reported in May.
However, because 2021’s figures have been updated, too – from $4.3 billion down to $4.1 billion – $4.25 billion now represents a bigger increase on 2021 than was previously the case.
If all of that leaves you hopelessly adrift, the basic takeaway is:
- The NWT’s 2022 GDP isn’t quite at the level initially reported in May…
- but it turns out previous years weren’t as strong as initially reported, either…
- so the territory actually made a bigger year-on-year improvement than first thought.
Under the hood, one reason the final 2022 GDP figure is less than the initial estimate is that the value of diamond mining to the territory’s gross domestic product has been revised sharply downward. That revision follows the change in reference year from 2012 to 2017.
The May estimate put diamond mining’s GDP contribution at $1.2 billion. The November final figure reports it as $599 million.
“Diamond mining GDP was revised downward in part to reflect the decline in diamond prices between 2012 and 2017,” said the NWT Bureau of Statistics in a news release. “In contrast, many other industries were revised upward to reflect the increase in their respective prices.”
For example, in the May preliminary data, educational services were reported to contribute about $216 million to the territory’s GDP. That figure is now $309 million.
Agriculture, forestry, fishing and hunting have gone from an $8.5-million contribution in the May figures to $24 million in the final figure – three times the size of the initial estimate, now that the reference year has changed.
Public administration, in other words the act of governing, is the NWT’s largest industry. It contributed $830 million to the territory’s GDP in the latest figures. That sum includes federal, territorial, municipal and Indigenous governments.
