Northern Economic Development Agency
Currently the Yukon government (YG) administers 98% of the territories, economic development dollars with Indian and Northern Affairs Canada (INAC) administering the remaining 2%. Since devolution in 2003 the Yukon has seen significant growth in commercial construction, wholesale trade, and housing appreciation along with health cost, social assistance, and public administration. The majority of this private sector growth appears to be attributed to the 2007 Canada Winter Games.
Final economic numbers for 2008 have yet to be released by Stats Canada. Observations of the data currently available on the Yukon economy indicate private sector growth is moving toward 2003 output numbers. This decrease in the economy started occurring even prior to the start of the world recession. After billions of dollars for Yukon public administration and hundreds of millions of dollars for Yukon economic development were spent by Ottawa, our economy has only seen resilience in health costs, social assistance and public administration spending. Since 2003 the areas of health cost, social assistance and public administration have grown by 23% – none of which are tax revenue generating industries.
With the need for greater tax revenue generation from the territories, on October 16th, 2007 the Prime Minister announced the creation of a new northern economic development agency to lead economic development for the North. The terms of this agency have not been clearly defined, with the exception that it will report to the Minister of INAC. Location of the agency has yet to be determined, but a central office will be in the North with regional satellite offices in the remaining two territories.
The current federal budget allocates $50 million to hire 66 additional staff members, cover operational costs and office space. In addition to this $50 million, $90 million is being allocated to renewing strategic investments in northern economic development. These dollars will be allocated evenly among the territories at $30 million a piece over five years. Out of the $30 million allocated to the Yukon, INAC allocates 10% or $3 million for administrative costs of the program.
