Lack of tourism, impact on mining unclear: how is northwestern Canada coping with COVID-19?

Many Whitehorse businesses have reduced their hours or shut down during the pandemic. (Karen McColl/CBC)

This story is part of The COVID Economy, a CBC News series looking at how the uncertainty of the coronavirus pandemic is affecting jobs, manufacturing and business in regions across Canada.

Tourism is everyone’s business.

A sticker with that message, produced some years back, can still be seen on the odd bumper in Yukon, invariably covered with some degree of dirt and dust, part and parcel with driving here.

While the slogan is not unique to the territory, it’s particularly meaningful during the COVID-19 pandemic, and not just to tourism operators — although they, more than some others, are uncomfortably aware of its very real implications.

“The economic spinoff of tourism is not to be underestimated,” said Kalin Pallett, president of the Wilderness Tourism Association of the Yukon, which represents about 70 adventure operators in the territory.

“Everything from from Air North [airline], to the hotels and the restaurants, the taxis, the gift shops, the tour operators themselves. The grocery stores — the list goes on and on.”

That ripple effect extends all the way to things such as quilting materials.

Ruth Headley at Bear’s Paw Quilts in Whitehorse said tourists buying northern lights-themed fabrics and other souvenir designs make up a good chunk of her summer revenue, when fewer local quilters are buying supplies.

Tourism and mining are Yukon’s two biggest private sector industries, and while industry insiders say both will feel the impacts of the pandemic, the hit to Yukon’s tourism industry is already very evident.

A 2017 business survey report by the Yukon Bureau of Statistics determined that 4.4 per cent of the territory’s 2016 GDP, about $117 million, was attributable to tourism.

If the Tourism Industry Association of the Yukon is right about how much cruise ships contribute to that amount, then roughly half of those dollars have already flown out the window for this year.

A cruise ship in Skagway, Alaska, in 2019. (Claudiane Samson/Radio-Canada)

Last week, when Holland America said it was cancelling almost all of its Alaska cruises for the summer, including all of its excursions into Yukon, Neil Hartling, the chair of the Tourism Industry Association of the Yukon, said that represents a $40 to $60 million loss to the territory’s economy. 

Hartling said it’s also foretelling of more hits coming to Yukon’s tourism industry, especially as people look to cut spending amid the economic downturn.

“Tourism is a luxury and it’s one of the first things that you can easily shed from your spending,” he said. “And that’s going to be happening around the world.”

Yukon’s summer tourism season, which starts in May, is typically the bread and butter of many tourism operators.

Kalin Pallett, president of the Wilderness Tourism Association of the Yukon, says some tour operators have already given up on this year’s tourism season. (Submitted by Kalin Pallett)

“They’ve got a 90-day window to make 365 days worth of money,” said Pallett, president of Yukon’s wilderness tourism association.

He said some operators have already decided to throw in the towel for the 2020 season and try to find work elsewhere. Others are turning their focus to shoulder season operations, in late summer and fall.

Pallett said the unknown timeline of when COVID-19 restrictions will lift adds to the uncertainty.

“Unlike a retail store or a restaurant that can simply turn on the lights and open the doors and start generating revenue right away, tourism needs longer lead times.”

These challenges come after what the Yukon government called a “banner” tourism year in 2018 (the year of the most recent tourism report), with records set for the number of visitors and total spending. According to its visitor exit survey, 62 per cent of visitors to the Yukon came from the U.S., about 28 per cent were Canadian and the remaining 10 per cent came from countries other than the U.S.

Impact on mining unknown

The Yukon Chamber of Mines says it’s too early to know what impact COVID-19 will have on the mining industry, the territory’s largest private sector employer. In 2018, mining and oil and gas development made up 5.7 per cent of Yukon’s GDP.

The Eagle Mine, near Mayo, went into production last year and has about 400 full-time employees. (Victoria Gold Corp.)

“We could expect to see some slimming of that [mining revenue],” said Samson Hartland, executive director of the chamber. “Just how much is anybody’s guess.”

Yukon has two mines in operation. Victoria Gold, which poured the first gold bar from its Eagle Gold Mine near Mayo in September, said earlier this month it is proceeding with its operational ramp-up. It said it expects gold production to increase “substantially” over the coming months.

Sara McPhee-Knowles, an instructor at Yukon College’s School of Business and Leadership who holds a PhD in public policy, said the economic downturn could have a positive impact on metal prices.

“In the last recession, in 2008 and 2009, the price of gold went up because investors view it as a safe bet,” she said.

If that happens again, she said, it could benefit Yukon.

The first gold bar poured at Yukon’s Eagle mine, on Sep. 17, 2019. (Victoria Gold Corp.)

Victoria Gold continues operations despite a plea made last month by the Na-Cho Nyak Dun First Nation in Mayo, asking the Yukon government to put a stop to mining and staking in the territory during the COVID-19 pandemic. The First Nation said the hundreds of workers rotating in and out of the nearby Eagle mine put the community at risk. 

The company responded by saying it is taking appropriate precautions and following the Yukon government’s requirement that all workers entering the territory self-isolate for 14 days at a place other than a mine or camp. Some of those workers are staying at hotels in Whitehorse.

Hartland, with the Yukon Chamber of Mines, said keeping communities safe is a priority, but noted the 14-day quarantine requirement could be challenging for the “dozens and dozens” of smaller field and exploration programs that take place in the territory every summer.

He said work delays and added costs could be a deterrent for companies coming from out of the territory, especially if they were only planning to do a couple of weeks of work.

Hartland said one thing that would help the mining sector is a relaxation of regulatory requirements in the form of extensions on permitting and consultation deadlines. He said the limited capacity of some government offices because of the pandemic could otherwise delay processes and result in a slowdown of mining and exploration activities.

Government offers up to $30,000 per month

When the Yukon government announced a business relief program earlier this month, Economic Development Minister Ranj Pillai, touted it as the “most comprehensive” business relief program in the country to date.

Yukon Economic Development Minister Ranj Pillai discusses the impact of COVID-19 at a news conference on April 1. (Wayne Vallevand/CBC)

The program is for businesses that have seen a reduction in revenue of at least 30 per cent during the pandemic. It will cover up to $30,000 per month for fixed costs including rent, water, sewage, electricity, internet, or insurance.

The program was announced after the Whitehorse Chamber of Commerce said only half of the businesses it surveyed thought they’d be able to recover from the economic impact of the pandemic.

At this time last year, Yukon boasted the highest employment rate in the country. Now, the situation in the territory is anything but rosy, though the number of jobs lost as a result of the COVID-19 crisis won’t be known for several weeks.

Because of Yukon’s small population, employment numbers are calculated based on a three-month moving average, meaning numbers that reflect the full hit of the pandemic won’t start coming out until June.

Related stories from around the North:

Arctic: Roundup of COVID-19 responses around the Arctic, Eye on the Arctic

Canada: Arctic Canada: Nunavut arts and crafts industry enduring … for now, CBC News

Finland: Visits to commercial establishments down sharply in Finnish Lapland, Google data, Yle News

Greenland: COVID-19: Arctic science expedition postpones flight campaign after trainee tests positive for virus, Eye on the Arctic

Norway: Norwegian Arctic wilderness tourism hit particularly hard by coronavirus, The Independent Barents Observer

Russia: Novatek construction site faces fastest growing coronavirus outbreak in northern Russia, The Independent Barents Observer

Sweden: Why Sweden can’t declare a state of emergency over COVID-19, Radio Sweden

United States: Arctic borough pulls out of deal with bankrupt Alaskan airline, reaffirms right to seize assets in emergency, Alaska Public Media

Karen McColl, CBC News

Karen McColl, CBC News

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