The economic dynamism of Canada’s north did not go unnoticed by Business Index North researchers when they looked at economic development in the Arctic.
“Canada’s northern territories are emerging as growth leaders, with Nunavut and Yukon experiencing significant GVA gains driven by growth in mining and expanding public services. This contrasts sharply with Alaska, where GVA is declining due to weakening in its traditional economic pillars, notably oil and gas,” explains Alexandra Middleton, professor at the Oulu Business School in Finland, in High North News on January 24.
This analysis follows the publication of a comprehensive study on Arctic economic development, entitled Arctic Value Creation, Employment and Investments by Business Index North. It is based on 11 economic indicators. Nunavut (in Canada) shines in 6 of them, and remains well positioned, particularly for the indicator measuring the level of social development accompanying the economy. However, the authors point out that “none of the 22 Arctic regions analyzed possesses a high socio-economic sustainability where economic and societal developments are mutually supportive.”
129 075
Number of inhabitants in northern Canada
Between 2011 and 2023, Nunavut is one of the three regions with the highest population growth, along with Iceland and the Yukon. The same is true for the working-age population and the under-14s. Over 10%, while the trend is downward everywhere else in the Arctic, as in Arkhangelsk (Russia) and Kainuu (Finland). Most affected by this decline are young people, who establish their families outside the Arctic after leaving.
Manufacturing and tourism spearhead gross value added in Nunavut
Value creation in the Arctic is “diverse and unique”, according to the authors, strong in the mining, petroleum, education, care and service sectors. Nunavut is recording the biggest increase in gross value added, at 5.9% between 2017 and 2021, driven by growth in productive industry (+14.4%) and hotels and restaurants (+9.3%). Nunavut is also active in the service sector, but much less so than Iceland and the Scandinavian regions, while the education and health sectors are in decline.
Between 2017 and 2022, employment in Nunavut’s production sector grew by 31.2%, and by 5.2% per year for all sectors combined. This dynamic is the strongest in the Arctic, followed by the Yukon and Västerbotten, Sweden. The Covid crisis didn’t have too much of an impact on Nunavut’s labor market, which has kept the number of jobs on the rise between 2019 and 2022. The same applies to the Yukon and Sakha, unlike the Northwest Territories.
Nunavut is one of the regions where the balance between economic development and social sustainability is balanced, according to the study’s criteria. Not least because gross value creation benefits job creation, which is less the case in Chukotka, Lapland or Alaska.
Income inequality was also measured, and is lowest in Norway, followed by Scandinavia. In Canada, this criterion is moderate. Finally, Russia and Alaska are at the top of the scale.
A dynamic response to Arctic constraints
While economic indicators are encouraging in Nunavut, they reflect only a dynamic, while certain realities persist, such as isolation. “Air links are expensive and complicated,” points out geographer Frédéric Lasserre of Laval University in Quebec. He also points out that “education for young people remains a major challenge.”
The report states that education should be reformed to better adapt to the realities of these regions. “If these issues are not taken seriously, they will result in growing income inequality and, more importantly, unequal access to knowledge and technology.”
5.32 million
Number of inhabitants in the Arctic study area
The entire Arctic is heavily dependent on mining, hydrocarbons and minerals, as well as aquaculture and fishing. The authors point out that the Arctic economy does not rely sufficiently on research and development. “Our fundamental advice is to invest in the transformation from a resource-based to a knowledge-based economy within the Arctic,” Andrey Mineev, study leader and researcher at Nord University Business School, wrote to PolarJournal AG. This would promote the self-determination of indigenous populations, with “green colonialism” also highlighted as one of the challenges facing local populations and ecosystems.
Camille Lin, Polar Journal AG
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