‘Unprecedented growth’ puts Yukon in the dark with $39M budget surplus

The Yukon government has said a steadily growing economy will keep the territory in the dark this year, despite ongoing costs associated with the COVID-19 pandemic.

“Yukon’s economy is experiencing phenomenal growth that really sets it apart from the rest of Canada,” Premier Sandy Silver said as he presented his government’s latest budget — and the first since taking office last spring. — Thursday afternoon at the Legislative Assembly.

“Yukon is leading the country as we witness unprecedented population and economic growth in our territory.

The $1.97 billion budget projects a surplus this year of $39.5 million, with Silver touting the figure as evidence of his government’s “responsible fiscal management.”

Further budget surpluses are projected for the next two years, estimated at $73.5 million next year and $63.3 million the following year.

Capital spending this year will again set a new record at $546.5 million – a 26% increase over last year – with funding for renewable energy and renovations, new schools, health and wellness centers and community housing.

Operations and maintenance — the day-to-day expenditures of government — will account for $1.42 billion of the budget.

Highlights of spending this year include:

  • $60 million for housing, including community housing projects in Old Crow, Carcross, Dawson City, Watson Lake, Teslin and Whitehorse.
  • $25 million for the new Whistle Bend School in Whitehorse.
  • $1 million for the planning and design of the new Kluane Lake School at Burwash Landing.
  • $13 million for a health and wellness center in Old Crow.
  • $2.6 million for a new bilingual health center in Whitehorse.
  • $17.8 for the implementation of the Our Clean Future climate change plan.
  • $5.5 million to respond to the substance use health emergency.
  • $10.8 million to complete a psychiatric unit at the Whitehorse Hospital.
  • $3.3 million for the modernization of the territory’s health information system.
  • $1.7 million for flood mitigation and recovery.
  • $595,000 to support the Yukon First Nations Graves Investigation Committee.
  • $425,000 for a Pride Center operated by Queer Yukon.

The cost of the pandemic

Silver said Yukon’s economy has weathered the COVID-19 pandemic well, thanks in part to his government’s continued assistance to local businesses. He said more than 500 businesses had received more than $85 million in aid.

“Yukon’s economic support programs have been recognized as the best and most generous in the country and have avoided the most severe economic impacts of COVID-19,” he said.

A COVID-19 vaccination clinic in Whitehorse. (Mark Evans/CBC)

Officials say Yukon’s labor market has largely recovered from the hit it took at the start of the pandemic, with unemployment rates remaining low and workers now widely in demand. The tourism sector is also recovering, although more slowly than the labor market as a whole. It is expected to take a few more years before tourism returns to pre-pandemic levels.

There will be more public spending this year for the pandemic, although it is expected to be considerably lower than in 2020 and 2021.

The government is providing $27.4 million this year for pandemic responses, including:

  • $11.6 million for public health, including vaccines.
  • $4.9 million in assistance and recovery for businesses.
  • $2 million for pandemic management, school support and health system upgrades.
  • $10 million in contingency funds, to respond to changing circumstances.

As of this year, Yukon will have spent approximately $203.7 million on its COVID-19 response, just under half of which will be covered by the territorial government. Most of the others come from Ottawa.

Mining and economic growth

By far the Yukon government’s main source of revenue remains the money it receives from Ottawa in the form of transfer payments — up 5.2% this year to $1.24 billion. These payments are population-based and the increase reflects the territory’s rapid population growth.

Tax revenues are also up, up about 17.5% from last year, or about $23.5 million. A substantial part of this sum comes from the mining industry, through corporate income tax or quartz mining rights and licenses.

Yukon’s mining sector is “thriving,” Silver said, with three mines in operation and a number more in development. Mineral production is expected to hit a record $1.1 billion this year, and the premier said it is expected to stay above $1 billion each of the next four years.

He compared that to 2015, before his government took office, when the Yukon had just one operating mine and the territory was “bogged down in division and costly legal disputes that discouraged investment.” .

“We have built strong relationships with First Nations that have fostered reconciliation, and we have worked in partnership with industry to help restore investor confidence in the Yukon,” he said.

“The strong momentum in our economy is bolstering private sector confidence in the Yukon, which will continue to move us forward on the road to recovery.

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