Early data from Statistics Canada suggests the Northwest Territories had the country’s worst-performing economy by one key measure in 2025.
Initial GDP estimates released late last week show the NWT was the only province or territory where the economy shrank.
At basic prices in chained 2017 dollars, the NWT’s economy contracted by two percent.
By contrast, every other jurisdiction’s economy grew, though Nunavut’s growth was only fractionally above zero percent. Newfoundland and Labrador’s economy was the best performer with 3.5-percent growth.
GDP stands for gross domestic product, which is the monetary value of all goods and services produced within a certain area during a specific period.
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The kind of chained-dollar GDP figure released last week can sometimes mislead because, in the words of the NWT Bureau of Statistics, these estimates “only reflect the change in the quantities of goods and services produced, not their prices.”
But price changes in 2025 aren’t likely to bring the NWT much comfort even if they were factored in. The price of diamonds, which underpin the territory’s economy, more than halved over the course of the past year according to some estimates.
“Typically, overall GDP change in the NWT is driven by the volatility of goods-producing industries as the services-producing sector tends to increase steadily over time,” the NWT Bureau of Statistics stated.
A downward trend in the goods-producing sector – mining and the like – has been occurring in the territory since 2018.
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The bureau said diamond mining’s output fell by 9.5 percent in 2025, as did construction. Retail trade, wholesale trade, finance and insurance also fell.
Statistics Canada issues initial GDP data each spring and then produces a final set of figures in the fall. If the NWT’s economic contraction is confirmed in 2025’s final figures, it’ll be the third year in a row during which the territory’s economy shrank.
The initial estimates came out as the Ekati diamond mine went into creditor protection, capping a year in which the mine has shed hundreds of jobs as diamond prices sank.
The NWT is now pinning its hopes on billions of dollars in military spending and the construction of major infrastructure projects to prop up its economy in the years ahead.
However, most of that investment isn’t due to arrive for years. With one of the NWT’s three diamond mines now closed, another declaring insolvency and a third abandoning plans to stay open past 2028, the territory’s economic engine for the next two or three years isn’t clear.
In Yellowknife, the Giant Mine remediation project remains a major economic driver. Outside Yellowknife, with the likes of Imperial Oil’s Norman Wells oil field closing, the picture is more bleak.
