Real gross domestic product (GDP) fell eight percent in the Northwest Territories last year – the largest drop endured by the territory’s GDP since 2011.
The figure comes from a new Statistics Canada report that refines earlier estimates across the country’s provinces and territories in 2019.
The new figure is a mild improvement on an initial estimate in June that found an 8.8-percent drop in the NWT’s real GDP.
Saskatchewan, with a 0.7-percent decline, was the only other jurisdiction to see its real GDP fall. (Alberta’s GDP, estimated in June to have shrunk 0.6 percent in 2019, is now considered to have grown – barely – by a tenth of a percentage point that year.)
Real GDP reflects the value of all goods and services produced by an economy, adjusted for inflation.
Declines were widespread across the territory’s sectors, Statistics Canada reported.
In 2019, investment in NWT housing fell 14 percent and exports declined 13.2 percent. The largest decrease was to business investment in non-residential structures, which fell 50.6 percent due to a “record drop in diamond mining.” (The data does not cover the current year, in which one of the territory’s three diamond mines ceased production entirely with the onset of the pandemic.)
The territory’s economy did see increases in household spending on durable goods – up 2.3 percent – as well as a 24.3-percent increase in general governments’ investment. Imports declined 2.8 percent.
Comparatively, in 2018, real GDP rose 0.8 percent in the NWT.
In September 2018, territorial finance officials projected modest growth in 2019-2020. Still, MLAs at the time raised concerns about the territory’s reliance on federal dollars and pointed out that mines could close within a decade.
In February 2019, the NWT projected 2.1-percent growth in the territory’s economy that year. That growth was anticipated from diamond production, a resumption in oil extraction, and government funding of projects like the Tłı̨chǫ all-season road.
Nationally, growth in real GDP was up a modest 1.9 percent in 2019 compared to 2.4 percent in 2018 (and slightly up on 1.7 percent initially estimated in June). This was attributed to higher household spending on semi-durable goods and services, as well as a growth in exports.
Economic growth was dampened by decreases in intellectual property, business investment in non-residential structures, machinery and equipment, and general governments’ investments.