'Unprecedented growth' puts Yukon in the black with $39M surplus budget

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

"The Yukon's economy is seeing tremendous growth that truly sets it apart from the rest of Canada," said Premier Sandy Silver as he delivered his government's latestbudgeton Thursday afternoon in the legislative assembly.

"The Yukon is leading the nation as we witness unprecedented growth of our territory's population and economy."

The $1.97-billion budget forecasts a surplus this year of $39.5 million, with Silver touting that figure as evidence of his government's "responsible fiscal management."

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

Capital spending this year will again set a new record, with $546.5 million a 26 per cent increase over last year with money forrenewable energy and retrofits, new schools,health and wellness centres, and community housing.

Operations and maintenance the government's day-to-day expenses will account for $1.42 billion of the budget.

Some spending highlights 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 planning and design of the new Kluane Lake School in Burwash Landing.
• $13 million for ahealth and wellness centre in Old Crow.
• $2.6 million for anew bilingual health centre in Whitehorse.
• $17.8 toward implementing the Our Clean Future climate change plan.
• $5.5 million for response to the substance use health emergency.
• $10.8 million to complete a psychiatric unit at the Whitehorse hospital.
• $3.3 million for modernizing the territory's health information system.
• $1.7 million for flood mitigation and recovery.
• $595,000 to support Yukon First Nations' burial site investigation committee.
• $425,000 for a Pride Centre operated by Queer Yukon.

The cost of the pandemic

Silver said Yukon's economy has fared well through the COVID-19 pandemic in part because of his government's ongoing help for local businesses. He said that more than 500 businesses have received more than $85 million in support.

"The Yukon's economic support programs have been recognized as the best and most generous in the country and they have prevented the most severe economic impacts of COVID-19," he said.

Yukon's labour market has largely recovered from the hit it took early in the pandemic, officials say, with unemployment rates remaining low and workers now in widespread demand. The tourism sector is also recovering, though more slowly than the overall labour market. It's expected to take a few more years before tourism returns to pre-pandemic levels.

There will be more government spending this year on the pandemic though it's expected to be considerably lower than in 2020 and 2021.

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

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

As of this year, Yukonwill have spent about $203.7 million on its COVID-19 response, with a little less than half of that being covered by the territorial government. Most of the rest has come from Ottawa.

Mining and economic growth

The Yukon government's largest source of revenue, byfar, continues to be the money it receives from Ottawa in the form of transfer payments up 5.2 per cent this year to $1.24 billion. Those payments are tied to population and the increase reflects the territory's rapidly growing population.

Tax revenues are also increasing, up an estimate 17.5 per cent over last year, or about $23.5 million. A substantial portion of that comes from the mining industry, through corporate income taxes or quartz mining fees and licences.

Yukon's mining sector is "flourishing," Silver said, with three operating mines and a number of others under development. Mineral production is expected to hit a record-high $1.1 billion this year, and the premier said it's expected to stay above $1 billion each of the next four years.

He contrasted that with 2015, before his government took power, when Yukon had just one operating mine and the territory was "mired in division and expensive legal disputes that discouraged investment."

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

"The strong momentum of our economy is bolstering private sector confidence in the Yukon that will continue moving us along the path to recovery."