Province forecast to see economic slowdown in 2020

Hey there, time traveller!
This article was published 11/12/2018 (1962 days ago), so information in it may no longer be current.

According to the latest forecast from the Conference Board of Canada, Manitoba’s economic growth will track alongside the national average for this year and next, but fall back sharply in 2020.

The Ottawa-based think tank’s fall provincial outlook pegs Manitoba’s economic growth for 2018 and 2019 at 1.9 per cent with Canada’s at two per cent for both years.

But for 2020, it predicts a more substantial pullback in Manitoba to 0.9 per cent growth, compared to 1.9 per cent for the whole of the country.

Conference Board economists say Manitoba’s dwindling mineral production and weaker investment, as Manitoba Hydro’s major construction projects wind down, will cause the slower growth rate in a couple of years.

There is always the potential for new conditions or new investments to change that, but one thing that’s not likely to have a positive effect is the introduction of new mineral production.

As the Conference Board reported, “Existing (mineral) reserves are being depleted, no new metal mines are planned in the next 10 years and investment in exploration remains low.”

Late last month, Hudbay Minerals let it be known that it will likely close its Flin Flon mine and mill in 2021. That news was in addition to the fact that Vale closed its nickel smelter in Thompson in the summer after having closed a smaller mine the previous year.

In May, the province suspended its long-standing and popular Mineral Exploration Assistance Program and Manitoba Prospectors Assistance Program. And as if the industry is throwing up its hands in Manitoba, the Mining Association of Manitoba laid off its executive director the week after the annual provincial mining conference, ostensibly because membership dues as a percentage of revenue were not enough to fund the position.

The Conference Board said that while Hydro mega-projects will continue through this year and next, significant completion will cause a slowdown in growth in 2020.

“Construction will continue to drive the economy, although precipitous declines in base metal production will keep real GDP growth at 1.9 per cent in 2019. In 2020, real GDP growth will slow to 0.9 per cent as major construction projects in the energy, manufacturing and housing sectors come to an end. However, the manufacturing and transportation industries will help to offset these negative impacts,” the report said.

Although mineral exploration intentions for 2018 in the province total $54.7 million, according to Natural Resources Canada — up 42 per cent from 2017 — much of that is coming from senior mining companies. Hudbay, for instance, has budgeted $19 million for exploration in Manitoba in 2018.

Junior mining companies and prospectors, who relied on the exploration and prospecting grants to subsidize expenses, are up in arms.

An online petition (change.org/p/blaine-pedersen-re-open-meap-and-mpap-programs-in-manitoba) launched by Nikolay Bashaev, a veteran Manitoba prospector, is asking for the province to reinstate the programs.

The petition says, “We all realized that our provincial government wants to balance financial situation in Manitoba. On the other end it’s important to attract investments in order to keep exploration projects going. We know that most of Manitoban exploration and mining projects are located within the Northern part of the province. And exploration and mining companies always were substantial contributors in creating jobs in Northern communities.”

martin.cash@freepress.mb.ca