Yukon's economy to keep growing: forecast

Yukon's economy is expected to grow for the eighth year in a row, due in part to the territory's mining boom, according to the government's latest economic forecast.

The 2011 Yukon Economic Outlook forecasts growth in almost all sectors, including mineral production and exploration.

"We have some new mineral production coming onstream this year, with two new producing mines that will certainly power growth in the economy," Scott Milton, director of business and economic research with the Economic Development Department, told CBC News on Tuesday.

"As well, we've got a record level this year … of mineral exploration, spending which in itself is quite a major economic activity," he added.

2 new producing mines

The Yukon Economic Outlook forecasts mineral exploration spending to exceed $250 million, setting a record high.

Mineral production is expected to exceed $560 million this year — up from a forecasted value of $284 million in 2010 — due to strong gold, silver and copper prices and the recent launch of Alexco Resources Corp.'s Bellekeno silver-lead-zinc mine and Yukon Zinc Corp.'s Wolverine zinc mine.

The Bellekeno mine officially started commercial mining operations in January, while Yukon Zinc is expected to reach commercial production at the Wolverine mine in the third quarter of this year, according to the government's outlook.

"Current estimates have the total value of production from Wolverine and Bellekeno at almost $300 million for 2011," the outlook report states in part.

The value of production at Capstone Mining Corp.'s Minto copper mine, which was built in 2007, is forecast to exceed $200 million, thanks to strong copper prices.

Tourism, retail sales to go up

Meanwhile, Milton said Yukon's tourism sector can expect to see 320,000 border crossings this year, which would be up slightly from last year.

Visitors coming to Yukon from the United States accounted for about 70 per cent of all border crossings into Yukon last year, prompting government officials to warn that a strong Canadian dollar could affect the number of American visitors to the territory.

Retail sales are forecast to reach $630 million this year, an increase of almost nine per cent over last year, according to the forecast.

The only sector that may not experience growth this year could be construction, but Milton said that industry is not likely to see much of a decline.

"I think we're anticipating $120 million of new permitted building construction in 2011. And on a longer-term trend, that's still a relatively high level," he said.

The value of building permits in 2010 was almost $132 million, according to the forecast.

Yukon's population could grow by two per cent to top 35,000 people this year, which Milton said would set a modern-day record and mark the eight consecutive year of population growth.