The Northwest Territories’ final GDP figures for 2023, made public last week, show the territory’s economy contracted by 0.4 percent that year.
The figures are an update on initial estimates released by Statistics Canada in May. At the time, the federal agency estimated a 0.1-percent decrease in the NWT’s GDP.
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.
The final figures for 2023 show Nunavut had the strongest growth in Canada at more than three percent. Most provinces posted somewhere between one-percent and three-percent growth.
Newfoundland and Labrador was the only jurisdiction beneath the NWT in 2023’s list, recording a contraction of more than two percent in its economy.
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In a news release, the NWT Bureau of Statistics said the effective stagnation of the territory’s economy was the product of two different things happening.
GDP can be split into goods and services. Goods are things like mining, construction, manufacturing and fishing. Services are things like retail, finance, healthcare and the public service – in other words, the government.
When the Covid-19 pandemic hit, the NWT’s goods sector took a big hit from which it has not really recovered.
More recently, there was a significant drop in oil and gas productivity in 2023 that single-handedly accounts for the decrease in the territory’s GDP that year. (Though the 2023 GDP figures were not tied in last week’s news release to any specific events, Imperial Oil has faced problems accessing all available oil at its Norman Wells facility since mid-2022.) Diamond mining productivity also decreased slightly.
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The services sector, by contrast, has staged a recovery since Covid-19 and is now back at pre-pandemic levels, if not a little higher.
The differing fortunes of those sectors dictate where the heart of the territory’s economic productivity lies.
The 2023 GDP figures show public administration now accounts for a larger chunk of GDP than mining, oil and gas.
Things weren’t always that way. In no pre-pandemic year this century did public administration contribute more to the economy than heavy industry.
There are other ways to look at GDP.
The NWT Bureau of Statistics said an examination of income-based GDP – which shows what workers and businesses are getting from their productivity each year – reveals overall employee compensation grew by 5.1 percent from 2022 to 2023.
“In contrast, gross operating surplus, which includes profits from the private sector, decreased by 12.9 percent between 2022 and 2023,” the bureau stated.
