INDUSTRYPROFILES(AND SWOT ANALYSIS)
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY
WINTER 2012-2013
NWT Chamber of Commerce
Northern Aboriginal Business Association
NWT Association of Communities
Industry, Tourism and Investment (ITI)
Accommodation and Food · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 4
Agriculture · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 10
Arts and Fine Crafts· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 14
Construction · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 18
Film Industry· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 24
Commercial Fisheries · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 28
Fur Harvesting · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 34
Manufacturing · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 38
Retail Trade· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 42
Tourism · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 50
Transportation· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 56
Wholesale Trade· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 62
Non Renewable · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 70
Energy · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 78
TABLE OF CONTENTS
A Message from the Governance Committee
The Governance Committee of the Economic Opportunities Strategy, in partnership with industry
associations, has completed the 14 industry profi les contained in this publication. These profi les are
designed to provide a consistent and objective overview of each industry, its current contribution
to the economy, its potential, and the actions required to maximize that potential.
Although government and industry play important roles, economic development requires
the participation of us all; individuals, businesses, communities, Aboriginal organizations and
government. We all have to work towards creating an investment climate which encourages
growth. We are confi dent these profi les will contribute to this process.
Email the panel
If you have any comments or observations, please e-mail the Economic Opportunities Strategy
Advisory Panel at comments@NWT Opportunities.com.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES4
ACCOMMODATION AND FOOD
This sector is comprised of establishments
primarily engaged in providing short-term
lodging and complementary services to
travellers. In addition, this sector also includes
establishments engaged in preparing meals,
snacks and beverages for consumption on and
off the premises.
As an industry, accommodation and food
services adds $66 million to the NWT economy
and accounts for about 1,777 jobs.
Within the industry, the food, beverage and
drinking component accounts for 61 per cent
of employment. Employment growth in food,
beverage and drinking places has increased
by 62 per cent or 412 jobs, a surprisingly high
increase given that overall NWT employment
growth has decreased over the past fi ve years.
The chart below highlights the trend.
This sector is comprised of
establishments primarily
engaged in providing
short-term lodging and
complementary services
to travellers. In addition,
this sector also includes
establishments engaged in
preparing meals, snacks and
beverages for consumption
on and off the premises.
Employment in Accomodation and Food Services, 1999-2011
Source: Statistics Canada
1,0861,155
1,406
1,508
1,392 1,3941,443 1,433 1,436 1,460
1,7361,834
1,777
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 5
Accommodation Business Employment
As defi ned by Statistics Canada, the
accommodation business sector includes
businesses that provide short-term lodging to
travellers, vacationers and others. It includes
hotels, motor hotels, resorts, motels, casino
hotels, bed and breakfast accommodation,
housekeeping cottages and cabins, recreational
vehicle parks and campgrounds, hunting and
fi shing camps, and various types of recreational
and adventure camps. Industry growth is
correlated to investment and tourism volumes.
The chart refl ects the positive impact of
diamond mine investment between 2000 and
2002, as well as the negative impact of the world
economic downturn in 2008. Employment
growth has levelled off over the last decade.
Employment in Accommodation Businesses, 1999-2011
Source: Statistics Canada
418438
594
679
566599
646619
658
578
628
676696
0
100
200
300
400
500
600
700
800
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES6
44,454
67,094
81,409
68,161 66,726
72,595 73,550
82,522 84,351 82,666
87,80483,389
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Restaurant Tavern Sales
The Northwest Territories banned smoking in
public places and workplaces in May 2004. As
shown in the sales chart below this ban has had
a minimal impact as total annual restaurant and
tavern sales have steadily increased since 2004.
Industry sales are tied to incomes, population
change, tourism and business investment.
Development of a new mining property, for
example, will result in signifi cant visitation by
business people, consultants and specialized
construction workers. As investment in the NWT
increases or decreases, one can expect that
overall sales for the sector will mirror investment
activity in the territory.
Restaurant and Tavern Sales, 2000 - 2011 (In Thousands of Dollars)
Source: Statistics Canada
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 7
Accommodation Investment and Outlook
Capital ExpendituresInvestment is necessary to maintain a
business and to expand sales. Investment also
acts as a barometer of business confi dence.
New investment usually indicates growing
confi dence in the future.
Investment in “accommodation and food
services” has experienced a sharp decline over
the last few years from a high of $15 million in
2006. Projected capital investment for 2012 is
$3.4 million.
NWT Capital Expenditures (In Millions of Dollars)
Source: Statistics Canada
2010 2011 2012Total Capital Expenditures 1,247 1,142 1,378Construction 1,005 869 1,063Machinery & Equipment 241 272 316
Private 914 849 1,080Construction 712 622 813Machinery & Equipment 203 227 267
Public 333 293 299Construction 294 247 250Machinery & Equipment 39 46 49
Selected Industries:Agriculture, forestry, fishing and hunting 1 1 xMining and oil and gas extraction x 587 789Utilities 38 52 51Construction 18 17 18Manufacturing 1 x 0Wholesale trade 5 x 7Retail trade 11 10 11Transportation and warehousing 51 x 85Information and cultural industries x x 17Finance and insurance 6 x 3Real estate and rental and leasing 25 26 26Professional, scientific and technical services 8 x 13Management of companies and enterprises x x 1Administrative and support, waste management x x 5Educational services x 61 59Health care and social assistance x x xArts, entertainment and recreation x x xAccommodation and food services 5 3 3Other services (except public administration) 6 9 9Federal government public administration 10 13 14Provincial and territorial public administration 172 129 120Local public administration 34 32 46Housing 85 79 85
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES8
Accommodation - SWOT AnalysisStrengths
· Rates competitive to southern cities.
· High incomes.
· Tourism market and potential growth.
· Regional resource investments can stimulate
signifi cant market demand.
· Many businesses have a well established
reputation and loyal clientele.
Weaknesses · Limited population growth - impacts market
size and availability of staff .
· Small and seasonal markets in many
communities.
· Expensive supplies.
· Limited local produce or products.
· High operating costs and utilities.
· Land tenure in some communities.
· Limited online presence.
· Not diversifi ed.
· Technology adoption.
· Lack of support services - accounting,
trades etc.
· Aging infrastructure in most centres.
Opportunities · Increasing interest and exposure for the
Northwest Territories - increased tourism
potential.
· Increased interest in the NWT as a destination
meeting locale.
· Improving economic conditions in main
market areas.
· Increased interest in NWT oil and other
resources - increased investment.
Threats · Competition from similar destinations.
· Exchange rate fl uctuations.
· Higher oil prices (necessary for heating).
· Reduced interest in NWT resources.
Industry OutlookAccommodation and food services growth is
linked with tourism, population and investment.
The industry has likely already experienced
negative impacts from continuing problems
with the world economy. In fact, declines in
industry investment paralleled problems with
world economic development.
Industry growth will likely be limited for the near
term. Tourism and investment both provide
signifi cant spin-off benefi ts to accommodation
and food businesses. As long as both the
tourism and mineral markets are depressed,
annual growth in sales for the sector will be
limited. However, both tourism numbers and
commodity prices have been experiencing
rebounds of late, and as these markets improve,
sales in the accommodation and food services
sector are expected to also improve.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 9Industry, Tourism and Investment
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES1010
AGRICULTUREAgriculture in the Northwest Territories is a small
but emerging sector of the economy. Motivated
by high food costs, positive contributions to
lifestyles, local product diversity, and increased
awareness of nutritional values, participation
in local food production is increasing in most,
if not all, communities in the NWT. Ranging
from small community gardens to commercial
greenhouses, regulated egg production and
harvesting of “wild” edibles, the local food
production sector has grown dramatically
over the past decade. The agricultural sector
generates approximately $8-10 million in
income per annum in the NWT. The industry
can be divided into three categories:
· Small scale - community and market gardens;
· Commercial agriculture and large scale
production; and,
· Commercial harvest of game.
The agriculture sector is not
a major contributor to the
GDP in the NWT but from
a production point of view,
there is vast potential. Arable
land in the NWT remains
mostly undeveloped. The
government has been
investing signifi cantly in
the sector and local food
production can play an
important role addressing
the high costs associated
in NWT communities.
Growing Forward in Fort Liard - Industry, Tourism and Investment
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 11
Industry, Tourism and Investment
Small Scale - Community and Market Gardens
A Greenhouse in the NWTCommunity and market gardens are best
characterized as small commercial-oriented
operations. These gardens often reduce reliance
on imported foods in a community and/or
region. Gardens operate on a seasonal basis and
plot sizes range from approximately ¼ acre to 10
acres.
Garden operators or community participants
generally gain the majority of the garden
benefi ts by growing food for sustenance. Any
surplus is either sold or contributed to the
community. Community and market gardens
are a rapidly growing segment of the agricultural
industry in the North, and the majority of
NWT communities now have one or more
gardens. In some instances, where community/
market gardens have expanded to the point
where surplus production occurs, commercial
opportunities have evolved for farmers markets
or U-picks. In some instances, surplus is sold
to local retailers or businesses involved in
food service. Success in community/market
gardens is most often judged by output and not
conventional commercial measurements.
Depending upon the cost of the land
and related capital, economic return on
investment varies. Where land and related
capital equipment costs are high, a return on
investment is necessary. Conversely, where land
and related capital equipment costs are low, an
actual cash return is not necessary or minimal.
The former most often applies to commercial
greenhouse operations and the latter to land
based operations.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES12
Commercial AgricultureEggsThe marketing of eggs in Canada has been
regulated under the Federal Agricultural
Products Marketing Act since 1973. The NWT
formally entered the regulated egg marketing
industry on March 25, 1999 and currently has
a quota of 3,028,098 dozens of eggs which is
equivalent to approximately 121,000 layers. Egg
production is seen as a means to:
· Diversify local economies;
· Encourage healthy living;
· Increase income and employment
opportunities;
· Reduce reliance on imports;
· Encourage new investment; and
· Establish new markets and incomes.
NWT producers marketed just over three million
dozen eggs in 2010 from production facilities
in Hay River. Once there is a federally certifi ed
grading station in Hay River, eggs produced in
Hay River will be available on grocery shelves
throughout the NWT.
MuskoxThe commercial muskox harvest on Banks
Island has been ongoing since the 1980’s and
provides an important source of income and
employment to residents in the community of
Sachs Harbour. The annual harvest produces
several thousand pounds of meat for territorial
consumption, as well as qiviut, a highly prized
fi bre used for knitting and weaving.
Commercial Harvest of Game
Wild Harvest EdiblesThe harvesting of local resources for sustenance
in the NWT extends well beyond fi sh, caribou,
bison and muskox. Mushrooms, berries, syrup,
herbs and plants for medicinal purposes are only
a few of the many examples of food products
available in abundance throughout the NWT
for either local consumption or for commercial
trade. Other options that have potential for
local consumption or trade include:
· Firewood;
· Logs for construction;
· Diamond back willow canes;
· Birch bark; and
· Spruce root.
Small Flock Producer
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 13
Industry OutlookOpportunities exist to produce unique NWT
products like birch syrup or herbal teas and
other harvested foods.
Commercial egg production can also be
expanded and the department is working to
promote small fl ock egg production to meet
local needs.
Market gardens have proved popular. Industry,
Tourism and Investment is working with
Agriculture Canada to expand the program.
Agriculture - SWOT AnalysisStrengths
· Commissioner’s land could be used to
support local market gardens.
· Demand seems to exist in urban centres for
fresh, northern produce.
· Sustainable land mass of arable land suitable
for agriculture production.
· Past demonstrations indicate suitability and
attainable success for a variety of crops or
livestock.
· Large variety of wild edibles.
Weaknesses · Ease and convenience of importing food
products.
· Land not identifi ed or set aside for agriculture.
· Limited access to lands; restriction of long-
term tenure.
· Costly transportation costs between NWT
communities.
· Government subsidization reduced due to
trade agreements.
Opportunities · Growing niche markets for wild edibles.
Threats · Reduced growing seasons.
· Southern competitors closer to target
markets.
· Southern producers have the benefi t of
economies of scale.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES14
ARTS ANDFINE CRAFTS
Arts and fi ne crafts make an important
contribution to our economy as an export
industry as well as a cultural identifi er. This
sector provides incomes for residents who rely
on their talents and artistic design to maintain
their way of life and spiritual connection to the
land. Success for many artists is important to
their livelihood and well-being.
According to the 2008/2009 Household Survey
conducted by the NWT Bureau of Statistics,
there were more than 3,000 NWT residents over
the age of 15 who participated in producing
some form of art or craft.
The North Slave region is by far the leader when
it comes to the number of people who produce
arts and crafts in the territory. The North
Slave region is followed by the Beaufort Delta,
Dehcho, South Slave and Sahtu regions.
The survey also identifi ed people who sold arts
and crafts items in the NWT. It was reported
that 924 producers in the NWT sold items they
produced. Most artisans earned revenue of less
than $1,000.
The NWT arts and fi ne crafts sector is quite
diverse, characterized by a wide range of
traditional and modern activities. Production
is primarily cottage-based. Individuals often
produce and sell products independently,
frequently out of their homes. Products are also
sold to local retailers and cooperatives.
Artists may produce more than one type of
art or craft, however most are involved with
sewing or needle craft products.
The arts and fi ne crafts
sector, in combination with
the traditional economy
(hunting, fi shing, etc.)
are very important to the
subsistence of residents. This
is especially true in the smaller
communities in the NWT.
Dene Cultural Institute Hay River - Dan Westman
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 15
Type of BusinessThere is a strong correlation between the retail
and producer categories. This highlights the
strong presence of self-producing businesses. A
predominant number of respondents are artists
and their retail business is operated around their
own art or fi ne craft products.
Arts and fi ne crafts retailers in the NWT are well
established long term businesses. The majority
have been in business between three and 10
years. The vast majority of retailers in the NWT
(43per cent) are relatively small businesses, with
annual gross revenues of less than $50,000.
Another 22 per cent reported annual gross
revenues from $50,000 - $100,000, and there
were many that reported signifi cantly higher
sales. In fact, 35 per cent of all retail business
surveyed in 2008 reported gross revenues in
excess of $100,000.
Industry OutlookWith tourism anticipated to increase by an
average of 2.8 per cent per year over the next
fi ve years, the outlook for the arts and fi ne
crafts sector is positive, with continued modest
growth on a year over year basis.
Source: GNWT 2008 Arts Retail Survey
Type of Business
Annual Sales by Threshold>$500K $1
>$200K -
>$500K - $1 million, 9%
Below $50K,
$500K, 4%
43%>$150K -$200K, 9%
>$100K -$150K, 13%
$50K -$50K $100K, 22%
Carvings, 293
D i
Books, Plays or Music,
Other, 476
Drawings or Pain s,
384Performing
191
384Arts, 191
Jewelry, 222
Sewing or Needlecr
1,879Weaving or
Basket Making 137Making, 137
Type of Art or Craft
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES16
Arts and Fine Crafts - SWOT AnalysisStrengths
· Sector benefi ts from a long
history of traditional skills.
· Income opportunities for
under-employed sector of our
workforce (aboriginal women).
Weaknesses · Diminishing supply of
raw materials.
· Lack of a distinct brand
image for products.
· Access to e-markets limited
in many small communities
and aboriginal households.
Opportunities · Tourism demand
for locally made
goods is strong.
· E-commerce off ers
broader market.
Threats · Cheap knock-off reproductions of similar
goods produced outside the NWT.
· Traditional skill loss among younger people.
· Modern clothing, which has been
designed for the Arctic, has replaced the
traditional need for home sewn clothes.
· High paying job opportunities
in other sectors.
Mad
ison
Kaylo
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 17
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES18
1,728
2,018
1,663
1,923
2,177
1,937 1,968 1,950
0
500
1,000
1,500
2,000
2,500
2004 2005 2006 2007 2008 2009 2010 2011
CONSTRUCTIONMany companies that started out with little
more than a tool box and a pickup truck are
now relatively large businesses employing
dozens of workers throughout the NWT and,
in many cases, Nunavut. A few have even
established branch offi ces in southern Canada.
Some have even undertaken projects abroad.
ADCO North, for example, used its NWT
experience to install power stations in both
Chile and the Grand Cayman Islands.
Conversely, recent strong economic growth
here in the NWT has been attracting some
major southern Canadian construction fi rms,
such as Ledcor and SNC-Lavalin.
EmploymentThe construction industry employed an average
of 1,950 workers in 2011. This represents
approximately 6.9 per cent of the total
territorial workforce and almost 8.8 per cent of
private sector employment.
Construction Employment
Source: Statistics Canada
The vast majority of
construction fi rms are small,
with more than 90 per
cent having fewer than 20
employees. However, there is
lots of opportunity for growth.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 19
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES20
Creating Wealth and Employment in Aboriginal
Communities – Report
by the Conference Board
of Canada © 2005
By Stelios Loizides and
Wanda Wuttunee
Construction Contribution to the NWT EconomyIn 2011, the NWT construction industry
contributed $158 million to territorial GDP
(chained 2002 dollars), or 5.5 per cent of total
GDP. This is a considerable drop from the
sector’s peak in 2007 when total contribution
to the NWT’s GDP equalled $380 million or
approximately 10 per cent of total GDP.
Construction activity is directly linked to capital
investment. Based on this, it is not surprising
to see that revenues declined between 2007
and 2009, as the construction of DeBeers’ Snap
Lake mine was completed in 2007 and entered
production in 2008.
High Multiplier ImpactsThe NWT construction industry has a signifi cant
impact on the local economy. The NWT Bureau
of Statistics input-output model estimates that
every $1 million in construction investment
creates as many as 3.5 jobs in the territorial
economy, and every dollar of construction
investment contributes up to 46 cents to the
NWT’s GDP.
GDP in the Construction Sector (In Millions of Real Dollars)
Construction workers in the NWT averaged
weekly earnings of just under $1,400, one of
the highest in 2011.
Workers were paid a total of $317 million,
approximately 14 per cent of the NWT’s total
employment income.
Construction Employee Earnings
168
238
397
320
230
313
369 368380
302
161 167 158
0
50
100
150
200
250
300
350
400
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Statistics Canada
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 21
Value of Building Permits and Industry OutlookConstruction is made up of three segments:
residential, non-residential and other (ex.
building of mines). The total value of all
building permits in the NWT also experienced
a signifi cant drop in 2010, decreasing from
$165 million in 2009 to $74 million in 2010.
This represents a drop of 55 per cent for the
period. Although residential permits and
industrial permits remained relatively consistent
for the period, the value of commercial,
and institutional and government permits
experienced signifi cant declines of 51 per cent.
Industry OutlookThe industry will continue to experience
challenges over the next couple of years due to
limited investment made by the mineral sector
and by the public sector. This is directly linked to
the current economic situation. As the economic
situation improves, so will the outlook for the
industry. In the long-term, the prospects for the
construction industry are bright, especially with
the potential of having fi ve new mining projects
being developed over the next decade.
Surveying for New Construction - Digital Images
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES22
Construction - SWOT AnalysisStrengths
· History of working in the North
under extreme conditions.
· Industry has developed effi cient,
innovative and reliable practices and
designs specifi cally for the north.
· The NWT Business Credit Corporation
provides contract security fi nancing.
· The Business Incentive Policy (BIP).
· Agreements with resource companies provide
improved contract access for NWT companies.
Weaknesses · Sales are linked to investment which varies
with commodity prices, capital availability,
market perceptions and other factors.
· A shortage of skilled labour in the NWT.
· Industry must compete with mining
and government wages and benefi ts.
· A limited market creates volatility.
· Access to land for development.
Opportunities · Major resource sector expenditures translate
into signifi cant construction opportunities.
· Socio-economic agreements provide
new opportunities for contracting.
· The marketing and transferring of
technology developed in the NWT
that is specifi cally designed for Arctic
conditions to other circumpolar regions.
Threats · The construction industry is
vulnerable to lower-cost competition
from southern companies.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 23
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES24
FILM AND PRODUCTION
While statistics on the NWT fi lm industry
are limited, the growing economic force of
the NWT fi lm and media arts industry was
documented in a 2011 sector study, A Review
of Film Commission Mandates (Outcrop
Communications Ltd., 2011). The study found
that fi lm and digital media activities, including
website design, annually contribute about $9
million to the NWT economy. This includes
about $5 million in wages. More than 100
people are estimated to be employed full time
in the NWT fi lm and media arts industry.
The NWT has also enjoyed some notable
successes in attracting investment.
Documentaries and television based reality
shows make up the majority of fi lming activity
in the NWT for out-of-territory productions;
however, in recent years there has been an
increase in interest from television drama series
and feature length fi lm productions. These types
of productions have very positive impacts on
several sectors of the NWT economy, and create
employment and training opportunities for
local fi lm industry members.
The most recent production and the fi rst
ever drama series to be fi lmed in the NWT is
CBC’s newest drama series, Arctic Air (Omni
Film Productions Ltd.). The storyline is set in
Yellowknife and makes reference to multiple
communities throughout the territory. It drew
the largest audience for the premiere of a new
drama series in the last decade for CBC, with a
total viewership of 1.05 million. It is estimated
that in excess of $1 million has been spent on
goods and services while fi lming on location in
the NWT.
Film, video, and digital media
are the centre of a growing
and dynamic industry in
the NWT. Participation from
local residents in the NWT is
increasing and there are a
number of projects currently
in production. Experienced
television and fi lm professionals
are available to off er their
services and expertise to visiting
production companies.
Filming Arctic Air in Yellowknife - Black Swan Films taken by Coal Photography
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 25
Both the Native Communications Society and
the Inuvialuit Communications Society (ICS)
develop a variety of productions each year
for the national Aboriginal People’s Television
Network. They
currently
produce
four to six
documentaries
annually and
estimate costs
at $60,000 per
documentary.
It is diffi cult to
predict future
investment, but
the NWT Film
Commission
will continue to
promote and
encourage fi lming activity in the Northwest
Territories.
Ice Road Truckers (Original Productions Ltd.)
was the fi rst reality television series fi lmed in
the NWT. In 2007, 3.4 million viewers tuned
in to the series premiere, which made it the
most-watched original telecast in the History
Channel’s 12-year history. The series fi lmed
two successful seasons in the NWT and aired in
the United Kingdom, New Zealand, the United
States, Australia and the Netherlands.
Gemini Award winning Ice Pilots NWT (Omni
Film Productions Ltd.) is still going strong into its
third season. It was also credited as being one of
the History Channels highest-ever ratings for a
Canadian series.
Additionally, Discovery Channel’s Mighty Ships
and License to Drill (Exploration Production Inc.)
documentary series used various locations in
the northern NWT for fi lming.
Conservative estimates place the value to
the NWT of these types of productions at
approximately $100,000 in direct expenditures
each year, per production. This does not include
private contracts whereby a monetary sum
may be paid to an individual or business to
participate in a show under an agreement
made between the production company and
the individual or business.
Other productions include the award-winning
Tropicana commercial Brighter Mornings for
Brighter Days campaign that was fi lmed in
Inuvik. It was estimated the fi lming of the
Tropicana television spot in January 2010
contributed $350,000 to the local economy.
Arctic Air - Omni Film Productions Ltd.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES26
Ice Road Trucker Returning from a Mine Haul - Jiri Hermann
The Film Industry - SWOT AnalysisStrengths
· Unique characters, colourful history
and unique geography.
· Northern personalities (old and new).
· Northern and Aboriginal culture.
· Success and legacy of Ice Pilots NWT; Ice
Road Truckers, License to Drill and Arctic Air.
· Small, but highly skilled, resource of
professional fi lm people and performers.
· Ice roads, vintage planes, etc.
Weaknesses
· High costs but comparable with
larger southern centres.
· Shipping and transportation logistics.
· Limited support services.
· Limited resources for assisting fi lm
development - small population
and economies to scale.
· Distance and remoteness.
· Uncertain market conditions for local industry.
· Limited range of capacity and limited
opportunities for local industry.
Opportunities
· Increased interest in the North and Arctic
especially with regard to:
- Features;
- Series;
- Commercials;
- Reality shows (eg: Jesse James);
- Lifestyle media.
· Cold weather testing - Porche and Land Rover.
· North pole and sea ice interest.
· Historical connections - Franklin (traveled
the Western Arctic as well); Mad Trapper;
Canol Trail; Hudson Bay Company, etc.
Threats
· Competing locations.
· Other locations have better
incentive programs.
· Waning interest in the Arctic.
· Lack of production funding.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 27
Arc
tic
Air
- O
mn
i Film
Pro
du
ctio
ns
Ltd
.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES28
COMMERCIAL FISHERIES
There is one well-established commercial
freshwater fi shery in the NWT - the Great Slave
Lake fi shery. The chart below shows the total
harvest in the NWT (in pounds) for the time
period 2000/01 to 2010/11. NWT fi sheries
experienced a steady decline in harvest since its
peak in 2001/02. However, this trend changed
in 2010/11. In 2010/11, the total harvest of the
freshwater fi sh industry was 1,038,000 pounds,
an increase of 48 per cent in comparison to
2009/10. The most signifi cant increase, 38 per
cent, was in deliveries of lake whitefi sh from
Great Slave Lake.
Northwest Territories (NWT)
freshwater fi sheries support
subsistence domestic use,
sport fi shing and commercial
fi shing for both food and
sport. Sport fi shing is
very popular with many
residents of the NWT and
in 2010/11, fi shing tourists
comprised over 25 per cent
of overall visitor spending.
Source: Freshwater Fish Marketing Corporation
Total Fish Harvest in the NWT by Weight (in 000’s lbs)3 000
2,654 2,685
2 500
3,000
2,4152,310
1 978
2,500
1,978
1,622
2,000
1,199
1,038
1,500
783706 702
,1,000
500
0
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 29
Source: Freshwater Fish Marketing Corporation
Value of the NWT Fish Harvest (In Thousands of Dollars)
Freshwater Fishing and the NWT EconomyProduction from the commercial freshwater
fi sh industry has been steadily declining since
its peak in 2000/01 when it was valued at $1.5
million. In 2010/11, however, the industry
experienced an increase of 47 per cent and was
valued at $495,000. This decline in the value of
the fi sh harvest can be explained by a decline
in the number of participants in the industry.
The NWT supplies about 1 per cent of Canadian
freshwater fi sh. Whitefi sh is commercially
harvested from Great Slave Lake and makes up
81 per cent of the lake’s total harvest. Whitefi sh
volume has increased compared to 2010/11.
Other provinces also harvest signifi cant amounts
of perch and pickerel, which command higher
prices (up to 2-3 times the price of whitefi sh).
$1 600
$1,414$1,467
$1,400
$1,600
$1,275
$1,206$1,200
$852
$1,000
$705
$567$600
$800
$380$413
$337
$495
$400
$200
$0
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES30
Freshwater Fishing in CanadaQuality Canadian fi sh can command a premium
price. For example, one Manitoba company
ships packaged fi llets from its Minnesota
warehouse throughout North America.
These fi llets are high quality and immediately
processed and frozen to ensure freshness. They
are wrapped in plastic and shipped in dry ice.
These Manitoba fi sh are sold in 3, 6, 9 and 11
pound boxes. The price for an 11 pound box
of fi llets is $135.00 US plus shipping. Whereas
the average price paid to fi shers in the NWT is
under $1 per pound, the direct market price
for US customers is about $14.00 per pound.
The table lists the value and quantity for various
species of fi sh harvested throughout Canada.
This 2009 data is the most recent information
available from the Department of Fisheries
and Oceans. The value of NWT production was
$337,000 compared to $1.5 million in Alberta.
Select NWT Commercial Species
Lake Whitefi sh
Lake whitefi sh is the main commercial
fi sh in the NWT. It is traditionally one of
Canada’s most commercially valuable fi sh
species. Its diet consists of a wide variety
of bottom-living invertebrates and small
fi shes, with zooplankton occasionally
making up the remainder of the diet.
The Northern Pike
The northern pike is one of the NWT’s
most well-known and widely distributed
fi sh. In fact, this species has a circumpolar
distribution, with populations occurring
in nearly all parts of Canada, the northern
United States, northern Europe, and Asia. Pike
is a favorite sport fi sh for many tourists.
Lake Trout
Lake trout is a cold water species found
throughout the NWT. Because these species
do not tolerate warm water, lake trout from
southerly populations is forced to retreat
to the deep cold waters of the lakes.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 31
Source: Fisheries and Oceans Canada
2009 Freshwater Fish Harvest in Canada
Industry OutlookThe external market for NWT fi sh is dependent
largely upon market conditions in the US and
the strength of the US dollar. Markets are still
willing to take all fi sh harvested in the NWT but
a weak US dollar is having a negative impact on
sales. Augmenting market values will be a
surging interest in NWT fi sh in local, regional
and territorial markets. Capturing, serving and
sustaining these NWT markets will be critical
to the future of the fi shery. Export markets will
continue to play a role, albeit possibly to a
lesser extent.
Species NB QC ON MB SK AB NT CanadaQ(2) V(3) Q V Q V Q V Q V Q V Q V Q V
Alewife 941 207 941 207Arctic Char 0 0Burbot 1 0 1 0Carp 46 16 8 4 251 132 305 152Catfish 316 273 21 8 337 281Eel 49 279 109 762 0 0 158 1041Goldeye 0 0Inconnu 0 0Lake Trout 208 216 35 25 216 140 32 17 491 398Perch 37 190 992 8142 140 317 0 0 1170 8649Pike 21 18 1393 1166 495 383 30 23 16 11 1955 1601Rock Bass 10 19 10 19Salmon 0 0 0 0Sauger 0 0 651 2117 651 2117Shad 14 12 4 0 18 12Smelt 47 57 3538 1827 3585 1884Sturgeon 0 0 2 23 2 23Lake Sturgeon 70 253 70 253Atl.Sturgeon 38 229 38 229Sucker (Mullet 5 2 11 3 1477 559 518 175 2011 740Sunfish 14 193 14 193Trout 0 0Tomcod 0 0Tullibee (1) 223 213 66 42 19 8 2 3 311 266White Bass 1360 2322 1360 2322Whitefish 2038 5479 2231 3425 1296 1578 1015 1473 243 256 6822 12211Whitefish Roe 0 0Yellow Pickere 2280 8783 4906 14638 458 1502 1 5 14 40 7660 24967Other Fish 0 0 129 248 3297 64 30 53 1 4 0 0 13 13 3470 382Total 1004 498 797 2030 14028 27315 11182 22474 3002 3790 1049 1504 318 337 31380 57948
(1) Includes Lake Herring, Chub and Cisco.(2) Q is quantity of fish harvested in tonnes.(3) V is the value of fish harvested in thousands of dollars.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES32
Fisheries - SWOT AnalysisStrengths
· Mature fi shery with established markets.
· Known stocks.
· Experienced fi shers.
· Established management structure
and commercial quotas.
· Great tasting freshwater fi sh.
· Established and growing local markets.
Weaknesses
· Competition from fi sh farms.
· High operating costs (fuel, wages, etc.)
· Susceptible to over fi shing without careful
monitoring of stock and harvests.
· Wage off erings can not compete eff ectively
against other economic sectors.
· Freight costs to southern markets are high.
· Processing costs.
Opportunities
· While restricted, there may be opportunities
for additional value added processing.
(eg: smoked fi sh, caviar, etc.)
· Farmed fi sh are suff ering a quality crisis;
niche market for wild product is evolving.
Threats
· Diminishing interest in fi shing as a career.
· Viability of fi shing as a business;
costs versus fi sh prices.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 33
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES34
757,417818,740
968,205
1,400,605
1,308,895 1,297,939
1,124,015
830,920
1,193,656
1,511,199
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
2002 03 2003 04 2004 05 2005 06 2006 07 2007 08 2008 09 2009 10 2010 11 2011 12
FURHARVESTING
The Government of the Northwest Territories
(GNWT) has invested signifi cant eff ort in
marketing furs, and in providing a basic level of
price stability.
Both China and Russia are emerging as
major markets for NWT fur. Muskrats are in
surprisingly high demand and on average the
price per pelt has doubled since 2009. NWT
marten (sable) pelts continue to command
high prices and a signifi cant premium over
other provinces and territories.
Sales of seal pelts continued to decline this year,
with average prices in the $10-12 range. The
Genuine Mackenzie Valley Fur (GMVF) Program
is now paying harvesters above market, buying
seals at $55 per pelt. This is made possible
through a GMVF program that buys, tans and
sells fi nished hides into the traditional craft
market. The program breaks even.
Wild fur from the NWT is
considered among the best
in the world and generally
commands premium prices
at fur auctions. Fur sales have
experienced a resurgence
in recent years, increasing
by $680,279 in 2011/12
to reach $1.5 million.
Source: Industry, Tourism and Investment
Fur Sales since 2001/02 (In Dollars)
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 35
Benefi ts - Genuine Mackenzie Valley Furs (GMVF) Program
Through the GMVF Program, the GNWT works
in partnership with NWT harvesters and the fur
industry to support and promote the NWT’s
traditional fur economy.
The GMVF Program provides the following
benefi ts to trappers:
Guaranteed AdvanceTrappers who ship their fur through the
GMVF Program are eligible to receive a
guaranteed advance payment. Fur needs to
be in good condition in order to be eligible for
consideration. Advances are reconciled when
the fur is sold. If the fur sells for less than the
advance the program bears the cost. In the
event the fur sells for more than the advance,
the trapper receives the additional proceeds.
Prime Fur BonusWhere a trapper’s fur sells for an amount equal
to or greater than the advance, the trapper is
entitled to receive a Prime Fur Bonus payment.
GrubstakeTrappers who have shipped a minimum of 20
to a maximum of 400 pelts to auction through
the GMVF Program during the previous trapping
season are eligible to receive a Grubstake
Payment of fi ve dollars per pelt for up to 400
pelts.
Commissions and Handling FeesAll commissions and handling fees for all fur
sold at auction, up to a maximum of eight
percent of gross value, are paid by the GMVF
Program.
Fur Auction - Buyer Checking NWT Martin - Industry, Tourism and Investment
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES36
A Way of Life
Trapping provides a cash income and
enables Aboriginal people to continue
a lifestyle that has been a tradition in
the North for thousands of years.
Management of resources is done in
partnership with the trapper, local wildlife
management boards and government. All
harvesting is monitored and analyzed to ensure
healthy fur bearer population is sustained.
Trapping occurs in the coldest months when the
fur is prime to ensure only top quality pelts are
marketed. Prime means that the fur has reached
its maximum length, density, and texture.
Percentage Breakdown by Species’ Value of Total Harvest
Ice Fishing - Industry, Tourism and Investment
Marten and bears have the
highest fur value accounting
for 65 per cent and 12 per cent
of the total NWT fur harvest
value respectively.
Source: Industry, Tourism and Investment
12%
3%
4%
6%
65%
4%2% 2%
1%
Bears
Beaver
Fox
Lynx
Marten
Muskrat
Wolf
Wolverine
Other
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 37
As an internationally traded commodity,
pelt values fl uctuate due to supply (harvest)
and demand based on what fashion
dictates. In the past fi ve years, demand
from emerging economies such as China
and Russia have driven fur prices higher.
All fur bearing species are harvested in
compliance with the International Agreement
on Humane Trapping Standards. The NWT
has implemented these standards and
enforced the use of certifi ed humane traps.
Wildlife resources are not only an important
part of our northern ecosystems, they are
also an essential part of the cultural and
economic well-being of northern residents.
Fur Harvesting - SWOT AnalysisStrengths
· Furs - quality product.
· Knowledgable trappers.
· Genuine Mackenzie Furs branding.
· Communities provide strong
support base for fur production.
· Fur marketing and buying service.
· Take a Kid Trapping - building
the next generation.
· Established trails, cabins, equipment
and trapping infrastructure.
· Strong commitment by GNWT
and Aboriginal Governments.
Weaknesses
· Maintaining an interest in trapping.
in younger ages; (similar to farming
- attraction of city lights).
· Lack of support at the national level
(fi nancial and policy commitment).
· Aging population.
· Restricted to aboriginal participants.
Opportunities
· Gateway nations like Turkey where
signifi cant demand exists.
· China becoming the largest importer of
raw fur and exporter of fi nished goods.
· Growing interest in Aboriginal culture
and traditional clothes etc.
Threats
· Anti fur movement.
· Knowledge of the fur industry, its
participants and the North.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES38
MANUFACTURINGManufacturing can reduce the NWT’s reliance
on imports and improve the balance of trade
with the rest of Canada. This keeps jobs and
opportunities within the territory. A viable
manufacturing sector also works to diversify
the economy, and provide products suited to
the Northern environment. For example, the
Fort McPherson Tent and Canvas shop makes
custom tents, designed for exploration and
harvester needs.
Manufacturing showed
signifi cant growth between
1999 and 2005, when overall
sales reached a peak of $91
million. At that time, there
were 28 NWT businesses
engaged in manufacturing.
Since 2007, sales have
declined to $9.3 million
from $45.8 million, and the
number of manufacturers
has declined from 28 to 16.
Manufacturing Investment
Investment is necessary to maintain
a business and to expand sales. This
is particularly true of manufacturing,
which tends to be capital intensive.
Investment also acts as a barometer of business
confi dence. Increasing investment usually
indicates growing confi dence in the future.
Investment largely parallels sales declines
between 2006 and 2009. Between 2006 and
2010, capital investment by manufacturing
sector has declined by 64.7 per cent.
Source: Statistics Canada
Annual Manufacturing Sales Since 2001 (In Thousands of Dollars)
39,209
56,552
78,34380,759
90,709
64,243
45,811
39,602
16,114
9,162 9,316
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 39
Manufacturing - Revenues and Operating Costs
The chart on the following page provides
summary operating and sales data for NWT
manufacturers since 2004. Over the past
six years, this data also shows a signifi cant
decline in sales, from $87 million to just over
$17 million in 2009 - a decline of 80 per cent.
This decline was matched by a decline in
manufacturing plants, from 27 to 16, and a
drop in average manufacturing establishment
sales from $3 million to $1 million.
Energy, water and other utility costs are not, on
average, a major industry cost. The industry’s
major cost is materials and supplies, especially
over the 2004/07 period. This seems to indicate
a linkage to the cost of rough diamonds. As
the number of diamond plants has declined,
material costs have declined, on average, from
$60 million per year to under $5 million.
Source: NWT Bureau of Statistics
Capital Investment by the Manufacturing Sector (In Millions of Dollars)
1.7
0.8
0.7
0.5
0.6
0.4
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2006 2007 2008 2009 2010 2011 2012
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES40
Source: Industry Canada‘s Small and Medium-Sized Enterprise Benchmarking Tool
Manufacturing Costs and Trends - NWT
Annual Manufacturing Employment
As of 2010, the average manufacturing
business in the NWT is small, with employment
averaging around seven positions. Average
wages have remained fairly consistent over this
period, at around $47,000 per worker, per year.
2004 2005 2006 2007 2008 2009 2010
Establishments (#) 27 28 21 16 14 15 11
Revenue ($'000)Total 86,588 92,455 61,298 59,203 40,237 19,810 17,211
Revenue from goods manufactured 80,760 85,391 57,568 55,954 31,350 15,112 12,326
Expenses ($'000)Total 75,760 92,944 63,363 58,819 35,736 19,795 17,868
Total salaries and wages, direct and indirect labour 9,873 10,378 10,261 10,875 8,339 6,598 4,873Production workers wages, direct labour 7,759 8,215 8,437 9,142 6,845 4,333 2,830Non-manufacturing employees salaries, indirect labour 2,114 2,163 1,824 1,733 1,494 2,265 2,043
Total cost of energy, water utility and vehicle fuel 326 364 364 756 666 361 298Cost of energy and water utility 303 320 344 685 614 315 253Cost of vehicle fuel 23 44 20 71 52 46 45
Cost of materials and supplies 50,903 66,833 41,364 38,300 .. 6,414 4,732
Employees (#)Total number of employees, direct and indirect labour 225 241 201 207 172 136 85
Number of production workers, direct labour 176 183 173 175 146 101 60Number of non-manufacturing employees, indirect labour 49 58 28 32 26 35 25
Inventories ($'000)Total opening inventories 19,715 21,111 5,070 6,386 5,302 5,486 2,148
Opening inventories, goods or work in process 102 5,141 2,994 3,147 109 3,211 63Opening inventories, finished goods manufactured 14,376 14,268 522 389 519 520 395
Total closing inventories 22,018 22,676 5,447 9,684 5,442 3,046 2,488Closing inventories, goods or work in process 1,335 10,009 2,167 2,468 3,226 1,044 53Closing inventories, finished goods manufactured 14,257 10,846 565 420 341 368 415
Manufacturing value added ($'000) 30,631 19,640 15,056 16,250 .. 6,018 7,306
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 41
Industry OutlookManufacturing has signifi cant potential for
growth, especially if Avalon Resources moves
forward with its planned hydromet facility in the
southern NWT. The GNWT’s eff ort to revitalize
the diamond processing industry could also
have a signifi cant impact. Processing just 5 per
cent of rough diamonds in the NWT represents
$100 million in input value. Recent work to
revise the NWT Manufactured Products Policy
should create new opportunities to diversify and
expand the manufacturing sector.
Manufacturing - SWOT Analysis
Strengths
· Government of the NWT supports
manufacturers in the form of equity
assistance and job creation initiatives.
· Small scale manufacturing initiatives
meet unique northern target markets.
· Manufacturing Policy.
· Made in the NWT.
· Manufacturing has been proven successful
in small communities (ie: Fort McPherson)
and potential exists to expand elsewhere.
Weaknesses
· The NWT is not well integrated in the
supply of both raw and processed materials
for further value added products.
· High costs of labour.
· High employee turnover and loss
of associated training costs.
· High energy costs.
· Additional freight and transportation
costs to enter southern markets.
· Low product volume requirements
and limited northern markets.
· Cyclical demand and short re-supply
windows (eg: less than one month
is open for diamond re-supply.)
Opportunities
· Raw materials and resources.
· Unique or niche northern needs.
· Lack of competitors.
· Potential for small scale
manufacturing - Arts and Crafts.
Threats
· Southern competition which may
benefi ts from improved economies
to scale and lower input costs.
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES42
RETAILTRADE
Retail trade encompasses a broad range
of businesses, including local corner stores,
national chains, video rentals, automotive
dealers and service stations, and more. Most
retail businesses are small and locally owned,
but “retail” also includes some of the NWT’s
largest companies, such as Walmart and
Northern Stores.
Combined with wholesale, trade businesses are
a major employer, accounting for about 10 per
cent of total employment or about 2,500 jobs.
Retail sales are seasonal, and peak over
Christmas and summer periods. Longer term
sales are heavily impacted by population and
income changes.
Retail sales depend upon consumer
expenditures, which in turn depend upon
incomes, and consumer confi dence. If residents
are not confi dent about future employment,
they will increase savings and therefore spend
less on retail purchases.
Annual sales (below) have been little impacted,
showing fairly strong and consistent growth
since 2001.
Retail is the sale of goods and
services from individuals or
businesses to the end-user. A
retailer purchases goods or
products in large quantities
from manufacturers directly
or through a wholesaler, and
then sells smaller quantities
to the consumer for a profi t.
Source: NWT Bureau of Statistics - Quarterly Statistics Publication, June 2012
Annual Retail Sales (In Millions of Dollars)
427
505530 532
575599
678706 693
709727
0
100
200
300
400
500
600
700
800
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 43
Source: Statistics Canada
Per Capita Retail Sales - 2011 (In Dollars)
Retail Trade Performance Within Canada
Overall growth in the NWT exceeded Alberta
and British Columbia. However, the NWT lagged
behind regions with high rates of economic
growth like Saskatchewan, the Yukon and
Nunavut. The NWT also lagged behind the
Canadian average.
As both incomes and prices tend to be higher
in the NWT, per capita sales are signifi cantly
above the national average. The Yukon is slightly
higher, which likely refl ects their higher tourism
volumes - over 300,000 road travellers every
summer.
13,235
15,265
12,82713,808
14,699
12,84112,091
13,141
15,347
16,941
13,111
18,706
16,448
10,673
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
CA NF PEI NS NB PQ ON MB SK AB BC YT NT NU
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES44
Source: NWT Bureau of Statistics
Retail Sales Contribution to GDP (In Millions of Chained 2002 Dollars)
Retail Trade’s Contribution to the Economy
Since 1999, retail trade has consistently
averaged between 3-4 per cent of the NWT’s
Gross Domestic Product (GDP).
The industry was not signifi cantly impacted by
the 2008/09 economic downturn, as worker
income remained fairly consistent over this
period, despite temporary mine closures.
In response to static population growth, retail
sales have levelled off over the past three years.
8691 94
98 98103
114120
116 116 117
0
20
40
60
80
100
120
140
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 45
Source: Aidan Cartwright
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES46
Retail Employment and Outlook
On average about 2,400 people in the NWT
work in retail businesses. Employment is
seasonal, with extra people being hired over the
Christmas period and summer months.
Source: NWT Bureau of Statistics
Retail Employment, Monthly
0
500
1,000
1,500
2,000
2,500
3,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 47
Industry OutlookInvestment represents future capacity, as well as
business confi dence. If businesses see potential
growth, they will invest in new equipment or
buildings. Capital expenditures from 2009-
2011 have declined by 47.6 per cent. Growth is
expected to remain modest until new mineral
developments stimulate population growth.
Source: Statistics Canada
Capital Expenditures (In Millions of Dollars)
11.7
8.8
18.7
10.79.8
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010 2011
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES48
Retail - SWOT Analysis
Strengths
· Rates competitive to southern cities.
· High incomes.
· Tourism market and potential growth.
· Regional resource investments can
stimulate signifi cant market demand.
· Many establishments have a well
established reputation and loyal clientele.
Weaknesses
· Limited population growth - impacts
market size and availability of staff .
· Small and seasonal markets
in many communities.
· Expensive supplies.
· Limited local produce or products.
· High operating costs and utilities.
· Land tenure in some communities.
· Limited online presence.
· Not diversifi ed.
· Technology adoption.
· Lack of support services -
accounting, trades etc.
· Aging infrastructure in most centres.
Opportunities
· Increasing interest and exposure
for the Northwest Territories -
increased tourism potential.
· Increased interest in NWT as
a meeting market.
· Improving economic conditions
in main market areas.
· Increased interest in NWT oil and other
resources - increased investment.
Threats
· Competition from similar destinations.
· Exchange rate fl uctuations.
· Higher oil prices (necessary for heating).
· Reduced interest in NWT resources.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 49
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES50
TOURISMTourism is the largest renewable resource based
industry in the Northwest Territories. Within
the economy it is considered an export, as it
brings new dollars into the NWT and generates
employment for many northerners. The travel
and tourism industry is competitive and is not
immune to global situations like the recent
economic downturn or the rise in terrorism.
Through the delivery of ITI’s (Industry, Tourism
and Investment) tourism support programs,
great strides forward had been made in
developing NWT’s human resource capacity,
research capability, public and private tourism
infrastructure, new tourism products and brand
development of the NWT as a travel destination.
Travellers come to the NWT for a variety of
reasons, but typically fall into one of seven
segments (Aurora Viewing, Outdoor Adventure,
Fishing, Hunting, General Touring, Visiting
Friends and Relatives, and Business Travel). As
of May 2011, Air Canada, Canadian North, First
Air and WestJet provide regular fl ights from
Yellowknife to Edmonton. Since 2007/2008,
there has been a steady decline in visitations to
the NWT. Overall, visitations to the NWT have
decreased by 19 per cent since 2007/2008.
Tourism is the largest
renewable resource based
industry in the Northwest
Territories. Within the
economy it is considered
an export, as it brings new
dollars into the NWT and
generates employment
for many northerners.
The travel and tourism
industry is competitive and
is not immune to global
situations like the recent
economic downturn or
the rise in terrorism.
Source: Industry, Tourism & Investment
Visitation to the NWT
53,917
62,11164,251 65,340
67,803
75,89579,572
73,419
68,00465,196 64,418
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 51
Source: Industry, Tourism & Investment
Visitor Spending (In Millions of Dollars)
Tourism Contribution to the NWT Economy
Overall tourism represents over 2 per cent of the
total economy, and their share of total economic
activity has changed little over the past decade.
Tourism also provides an excellent market for
local arts and crafts, an industry utilizing many
traditional skills and supporting sustainable
development.
The economic downturn in late 2008 negatively
impacted business and leisure travel in 2009 and
2010. The highest decline was in business travel
in last two years while leisure travel remained
relatively steady between 2009 and 2010.
The most common cost cutting initiatives for
business travel were reduction of overall travel
budget, reducing air travel, and sending fewer
employees to meetings and conventions.
Canadian business travellers account for the vast
majority of the NWT’s business travel market.
Most Canadian business travellers reside in
Alberta, and notable portions of the market live
in Ontario and British Columbia.
63.1 67.6 63.8 64.4 66.1 61.6 60.5 55.949.5 44.6
48.8
40.742.3 46.1 50.2
54.7
78.8 77.474.6
58.1
49.5
48.5
0
20
40
60
80
100
120
140
160
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12
Business Spending
Leisure Spending
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES52
Main Tourism Segments in the NWT
Visitors to the NWT typically fall into one of
seven categories:
Aurora Viewing - each fall and winter,
approximately 7,000 visitors come to see the
Aurora Borealis. Majority of travellers are from
Japan, followed by visitors from southern
Canada, the United States, South Korea,
China, the United Kingdom and Australia.
The tour operators off er one-night to three-
night packages to aurora viewing visitors.
The aurora visitors spent approximately $9.4
million in 2010/2011.
Outdoor Adventure- the NWT attracts about
2,000 adventurers year-round. Visitors come
from southern Canada, the United States and
Germany to partake in guided and unguided
outdoor adventures. NWT tour operators off er
guided trips by boat, canoe, raft, snowmobile
and dogsled. Over $6 million was spent by
tourists on guided and unguided trips in
2010/2011.
Fishing - each summer around 5,000 visitors
come to the NWT solely to fi sh. Anglers can
take a multi-day guided fi shing trip or bring
up their own boat to sail and land some
amazing fi sh. Anglers purchasing guided
fi shing trips are typically from the United
States, Ontario and British Columbia. The
majority of independent anglers come from
Alberta and British Columbia. Anglers spent
almost $12 million in 2010/2011.
Hunting - when compared to 2009 the
number of hunters coming to the NWT
declined by more than 300 in 2010 due to
the elimination of caribou hunting tags and
the United States ban on importing polar
bear hides. Majority of hunters come from the
United States and southern Canada. Hunting
outfi tters are still off ering big game packages
to hunt Dall’s sheep, mountain goats, moose,
bears and wolves. Hunting contributed $4.2
million to the NWT economy in 2010/2011.
General Touring - over 70 per cent of
general tourists drive to the territory typically
in the summer months. During their stay they
enjoy sightseeing, photography, shopping
and wildlife viewing. The majority of general
touring visitors come from southern Canada,
the United States, Germany and Switzerland
and stay three to four nights. Overall they
spent $10.5 million in 2010/2011.
Visiting Friends and Relatives - while
modes of transportation are split fairly evenly
between road and air, the introduction of
West Jet in summer 2009 has lowered airfares
making fl ying to the NWT more aff ordable.
Almost 50 per cent of these visitors are from
Canada, and the majority travel here in the
summer months.
Business - Canadian business travellers
account for the vast majority of the NWT’s
business travel market. The largest number
of business travellers work in mining and
government, and most are occupied in
professional or management positions.
More and more of business travellers are
participating in guided tourism activities
during their business trip. Business travellers
spent more than $49 million in 2010/2011.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 53
Tourism is an export industry that attracts new
dollars and spreads wealth among a diverse
range of businesses. It supports and encourages
the retention of culture and language, and
it can provide a strong argument for the
preservation of pristine wilderness areas. The
tourism industry cuts across a broad swath
of sectors; coordination and cooperation
among the many businesses involved is crucial
for tourism development. The fundamental
requirements for tourism development: access,
accommodation, food services, and attractions,
must be satisfi ed to realize tourism potential. All
sectors of the industry must be fully engaged as
active partners to move forward.
The tourism industry is forecast to grow by an
annual average rate of 2.8 per cent over the next
fi ve years. However the industry is particularly
sensitive to events and factors that play out
on a global scale. We have seen in the past
decade how global events such as SARS, H1N1,
terrorist actions and the recent global economic
downturn can have very drastic impacts on
travel.
Although the NWT has a well-established
tourism sector, there is still the potential
to expand various segments of the sector,
including Aboriginal cultural tourism,
experiential tourism and outdoor adventure.
Although the NWT has a well-established
tourism sector, there is still the potential
to expand various segments of the sector,
including Aboriginal cultural tourism,
experiential tourism and outdoor adventure.
Wood Buff alo Park - Dan Westman
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES54
Tourism - SWOT Analysis
Strengths
· A remote and exotic geographic location
“on top of the world;” Arctic Circle; Arctic
Ocean and the Northwest Passage.
· Aurora Borealis, dark winters, and 24
continuous summer daylight.
· A strong and vibrant Aboriginal culture.
· Abundant wilderness with unique
and rare fl ora and fauna, ancient
rocks, karst topography, hot springs,
sinkholes, fossils and canyons.
· Abundant fresh water; scenic lakes
and beautiful waterfalls.
· A colourful history encompassing
ancient aboriginal and historic sites.
· Growing secondary diamond industry.
· Relatively modern guest facilities, as well as
adequate communications and transportation
systems, at least in the major centres.
Weaknesses
· It is expensive for tourists to travel and tour.
· Limited knowledge of the
NWT and its off erings.
· Long distance from major centres/
market and poor roads.
· Comparatively short summer season.
· Relatively low paying jobs relative to
the non-renewable resource sectors.
· Insuffi cient support or tourism
hospitality training.
· Limited product off erings.
· Lack of distinct brand image as a destination.
Opportunities
· Soft and hard adventure travel.
· Recreation Vehicle market.
· Aboriginal cultural tourism.
· European and Australian tourist markets.
· “Close to home” markets.
· Rapidly expanding Chinese travel.
Threats
· More populouse regions have access to
signfi cantly greater marketing resources.
· Competition from other jurisdictions
for the Japanese Aurora market.
· Aging North American population will
shrink the adventure tourism market.
· Continued recession in the US and
threat of collapse in the Eurozone.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 55
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES56
TRANSPORTATIONThe industry is a major employer, accounting
for up to 10 per cent of all employment in the
NWT.
The transportation and warehousing industry
has played, and continues to play, a crucial role
in the development of the NWT. Supplying
remote communities, moving workers and
materials to job sites and getting products to
market all require transportation.
The industry has met this challenge through a
combination of investment and innovation.
Many businesses within the industry are
structured as networks, with operations, sales
and workers distributed over an extensive
geographic area.
The industry’s Gross Domestic Product (GDP),
increased 80 per cent between December 1999
and December 2005. Since 2005, industry has
shown little growth.
As defi ned by Industry
Canada, the transportation
and warehousing industry
involves all transportation
of goods and people, by all
modes of transportation
(road, rail, water, air and
pipeline). The industry also
includes warehousing and
storage as well as Canada
Post and courier businesses.
Source: NWT Bureau of Statistics
Transportation GDP Since 1999 (Millions of Chained 2002 Dollars)
133 135
151 154
171
203
244230 235 233
221 220211
0
50
100
150
200
250
300
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 57
Source: NWT Bureau of Statistics
Transportation & Warehousing - Capital and Repair Expenditures (In Millions of Dollars)
NWT Transportion Industry Investment
InvestmentBusinesses invest in order to expand or maintain
sales. Investment is a measure of potential, as
well as businesses’ perceptions of the future. If
businesses see growth potential, they will invest
in new equipment or physical expansion.
Investment in transportation has been
decreasing since 2007, a period which coincides
with reduced sales. Since 2007, the
transportation and warehousing sector has
reduced investment in the NWT by $87 million.
That is a decrease of 58 per cent in the last fi ve
years.
In 2011, planned investment in the transport
and warehouse businesses was $64 million.
Investment in the industry has been declining
as a percentage of the NWT total, down to 5 per
cent from 8 per cent in 2007.
0
20
40
60
80
100
120
140
2008 2009 2010 2011 2012
2011 Data is suppressed for confi dentiality purposes
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES58
Contributions of Transportation’s Sub-sectors
The chart breaks down industry activity into
fi ve groups. Statistics Canada combines air, rail,
marine and “scenic” businesses into one group,
which represents 60 per cent of the industry.
The second largest group is trucking, accounting
for 21 per cent of the NWT industry.
Pipelines currently represent 6 per cent, but
their share has been declining. Warehousing and
other businesses account for the remaining 10
per cent.
Source: ITI Estimate
Transportation Industry GDP Distribution by Segment (2010)
Dan Westman
Truck Transport21%
Pipeline6%
Air, Rail, Marine,Scenic60%
Postal/Couriers3% Warehousing &
Other10%
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 59
Industry OutlookFuture growth will be impacted by resource
development, population and investment
trends. As such, industry employment is
expected to remain near current levels over the
next few years.
The industry is one of the NWT’s largest
employers, directly accounting for over 10 per
cent of employment. The industry showed
considerable growth over 2000-2003, which
coincided with the development of Diavik
Diamond Mines. Employment continued to
increase at a steady pace until 2008. Since 2008,
however, industry employment has declined by
more than 400 jobs.
Industry employment tends to be seasonal,
peaking during June, July and August.
Employment is lowest over winter months, with
the exception of February, a peak month for
mine and community re-supply.
Source: NWT Bureau of Statistics
Transport Employment and Outlook
Monthly Transport and Warehouse Industry Employment
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES60
Transportation and Communication - SWOT Analysis
Strengths
· Industry experience in cold weather and ice
road construction is an exportable service.
· Hay River is one of the largest
inland marine ports in Canada.
· Mackenzie River barge service can supply bulk
goods to Alaska and into the central Arctic.
Weaknesses
· Poor data on air passenger and freight fl ows.
· Rail system needs upgrading.
· Expensive to build and maintain roads
- relative poor quality of some roads.
· Less than 25 per cent of the NWT landmass
is within 100km of an all weather road.
· Half of our communities comprising
about 16 per cent of the population
either have limited seasonal access by
winter road or no road access at all.
· The movement of freight/cargo in the
NWT is largely unidirectional; northbound
full, southband empty. This negatively
impacts the cost of doing business.
· Internet connectivity is poor in many
communities, and broadband access is
not widely available across the NWT.
· Only 8 communities in the NWT have
aff ordable, public Internet access.
Opportunities
· Increased demand for services from non-
renewable resource development.
· North American tourism demand
linked to improved roads.
· Expanded European markets through
direct fl ights from Europe (requiring
expansion of the Yellowknife airport).
· E-commerce off ers an opportunity for small
Northern businesses to sell product to a
much larger market beyond the NWT.
· Large levels of resource investment
and a wealthy resource base.
· High incomes and demand for
goods and services - most of which
have to be transported North.
Threats
· Rising energy and fuel prices.
· Some provinces and states looking
at using natural gas for transport
fuel - no supply in the NWT.
· Increased demand on infrastructure from
non-renewable resource development.
· Climate change and global warming.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 61
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES62
WHOLESALETRADE
Wholesale businesses provide goods to other
businesses and government. Demand and
sales are dependent on various factors. For
example, an industrial supply company’s sales
might be tied to mineral exploration, sales of a
hotel supply company could be impacted by
a changing tourism industry, and a company
supplying restaurants might be impacted by
declining consumer spending.
Since 2004 sales have increased by $167 million,
or 38 per cent; one of Canada’s fastest growth
rates. Wholesale trade in the NWT is four times
that of the Yukon, refl ecting the NWT’s larger
economy and industrial base.
Industry sales were impacted by the 2009
downturn, declining 12 per cent in 2009, a
drop of $78 million. 2010, showed a strong
recovery, with sales approaching previous 2007
highs. However, in 2011 annual wholsale sales
dropped by $17 million from the previous year.
Wholesale businesses provide
goods to other businesses
and government. Demand
and sales are dependent
on various factors. For
example, an industrial supply
company’s sales might be
tied to mineral exploration,
sales of a hotel supply
company could be impacted
by a changing tourism
industry, and a company
supplying restaurants might
be impacted by declining
consumer spending.
Source: NWT Bureau of Statistics
Annual Wholesale Sales (In Thousands of Dollars)
439,913
526,226 515,831
647,705629,726
552,099
624,241606,788
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 63
Source: NWT Bureau of Statistics
NWT Wholesale Trade Performance Within Canada
Growth of Wholesale Sales 2006-2011
There is a close relationship between economic
growth and wholesale business. The fastest
growing economies also had the fastest
growth in wholesale trade. When compared
to the other jurisdictions nationally, the NWT
performed in the lower third of the country for
the period.
Per capita, the NWT has the fi fth highest
wholesale trade in Canada. Per capita sales
are $13,692 compared to $11,359 in BC and
$4,088 in the Yukon. The relative importance of
wholesale trade within the NWT highlights the
importance of industry and especially mining,
within the economy.
15%
54%
27%19% 21%
17%10%
25%
72%
20%
6%
22%17%
187%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
CA NFLD PEI NS NB PQ ON MB SK AB BC YT NT NU
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES64
Source: Statistics Canada
Per Capita Wholesale Sales 2011 (In Dollars)
Wholesale Contribution to the NWT Economy
In 2005, the wholesale industry contributed $73
million (chained) to the NWT GDP. In 2011, the
contribution to GDP was $68 million. This is up
$4 million, from the 2009 downturn.
While the industry represents a small share of
GDP there is signifi cant room for further growth,
likely linked to resource investment.
16,366
7,681
3,916
8,291 7,847
13,503
20,873
12,079
20,285
18,521
11,359
4,088
13,692
1,963
0
5,000
10,000
15,000
20,000
25,000
CA NFLD PEI NS NB PQ ON MB SK AB BC YT NT NU
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 65
Source: NWT Bureau of Statistics
Aidan Cartwright
Wholesale Contribution to GDP (Millions of 2002 Chained Dollars)
7376
83
76
6466
68
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009 2010 2011
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES66
Source: Statistics Canada
Wholesale Employment, Annually
Industry OutlookInvestment represents future capacity as well
as business expectations. In the NWT, wholesale
company investment declined signifi cantly
after 2008. However, since 2009 there has
been a steady increasing
trend. Future investments will likely depend
on the development of new mining
properties or progress with the Mackenzie
Gas Project. Industry growth is expected
to remain linked to mineral production.
551
487 489465
506
596
681654 641
586 585
0
100
200
300
400
500
600
700
800
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 67
Source: Statistics Canada
Wholesale Trade Industry Investment (In Millions of Dollars)
11.9
4.4 4.5
7.3
0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012
2011 Data is suppressed for confi dentiality purposes
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES68
Wholesale Trade - SWOT Analysis
Strengths
· Access to substantial mineral and
government sector, plus growing retail.
· Tourism market and potential growth.
· Impact benefi t agreements and
Economic Benefi t Agreements.
· Regional resource investments can
stimulate signifi cant market demand.
· Many establishments have a positive
reputation and loyal clientele.
Weaknesses
· Limited population growth - impacts
market size or client companies
and availability of staff .
· Small and seasonal markets in many
communities - eg: tourism.
· Expensive supplies .
· Limited local produce or products.
· High operating costs and utilities.
· Land tenure in some communities.
· Limited online presence.
· Not diversifi ed.
· Lack of support services -
accounting, trades etc.
· Aging infrastructure.
Opportunities
· Opportunities will largely develop
from outside demand for NWT
tourism or NWT resources.
· Increased interest in NWT as
a meeting market.
Threats
· Competition from southern suppliers,
who have lower operating costs.
· Reduced interest in NWT resources
resulting in reduced industrial
development and investment.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 69
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES70
NON-RENEWABLE RESOURCES
The NWT has an extremely
rich resource base and non-
renewable resources continue
to be the focus of economic
activity. The fi gure on the
next page highlights existing
and likely resource projects in
the NWT, Nunavut and along
the Yukon/NWT border.
Oil and Gas
Oil is produced in Norman Wells, one of Canada’s
richest oil fi elds. Natural gas is largely extracted
from various fi elds in the southern NWT as well
as at the Ikhil project near Inuvik, and at Norman
Wells. Volumes of oil and natural gas production
are continuing to decline. However, record oil
prices have off set the decline in oil production.
New opportunities are being explored. Currently
there are three projects proposed for exploration
in the off shore of the NWT. Two projects are
actively undergoing exploration — the Imperial
Oil Resource Venture Limited’s Ajurak project
and the British Petroleum Exploration Company
Limited’s Pokak project. The companies are
undertaking seismic surveys, gravity surveys and
fi eld data collection programs.
During the 2010/11 call for bids process, 11
parcels were granted against the exploration
expenditure bids of $534 million in the Sahtu
region of the NWT. The winning bidders intend
to explore the “tight oil” potential of
the region by undertaking seismic
and drilling activities.
The proposed Mackenzie Gas Project
(MGP) will begin in the Mackenzie
Delta and end in northwestern
Alberta. It will initially transport 0.8 to
1.2 billion cubic feet per day (bcf/day)
of natural gas, enough to heat half
of NWT homes for a whole year. The
gathering system will be expandable
to 1.9 bcf/day. A natural gas liquids
pipeline will be built in the same
right-of-way between Inuvik and
Norman Wells.
Natural gas liquids will be separated
in Inuvik and shipped down this line
to join the existing Enbridge pipeline.
The project proponents now estimate
that the MGP will cost a total of $16.2
billion: $7.8 billion for the pipeline,
$4.9 billion for the development of
the anchor fi elds, and $3.5 billion for
the gas-gathering system.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 71
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES72
37
7
1
1
3
4
5
5
8
97
1
YukonTerritory N o r t h w e s t T e r r i t o r i e s
N u n a v u t
BritishColumbia
Saskatchewan
AlbertaLiard Basin Horn
RiverBasin
CordovaEmbayment
BC Shale Gas Basins
135û140û145û150û
130û 125û
125û
120û
115û
115û 110û
105û110û120û130û
105û
100û 95û 90û 85û 80û
60û
60û
65û
65û
70û
75û
75û775û
Mineral LegendBase Metal
Diamonds
Gold
Ni - Cu - PGM
Uranium
Natural Gas Wells
Shale Oil
Oil Wells
Highway
Seasonal Winter Road
Oil/Gas Pipeline
Operating Property
Exploration Property
Hydromet
Ekati/DiamondsDiavik/Diamonds
Snap Lake/Diamonds Gahcho Kue/Diamonds
Yellowknife Gold
Pine Point/Zinc Lead
Avalon Rare Metals
Prairie Creek/Zinc Lead Silver
Cantung/Tungsten
Mactung/Tungsten
NICO Project
Hope Bay Belt
High Lake
Courageous Lake Gold
Selwyn Project
Back RiverHackett River
Lupin MIne
Jericho
Izok LakeNorman Wells
Inuvik
Hay River
Fort Smith
Fort Simpson
Behchokö
Yellowknife
Colville Gas
Norman Wells Oil
Ikhil/Gas
Niglintgak, Taglu
, Parsons
Cameron Hills/GasLiard GasPointed Mountain/Gas Gas
Source: ITI
Map - NWT Mineral Deposits
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 73
Source: ITI - IEA Map
Map – North America Sedimentary Basins
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES74
Source: NWT Bureau of Statistics
Corbis
Value of Oil and Gas Shipments from the NWT (In Thousands of Dollars)
230,925
387,358
337,619
350,583
360,979395,926
460,521501,036
491,981
621,728
378,808
454,532
396,244
11,690
96,253
207,278
120,668154,058
121,897120,01062,124 51,464 50,068 26,243 22,601 19,6970
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Crude Oil
Natural Gas
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 75
Mackenzie Gas Project (Summary)
The Resource
· The three anchor fi elds that will initially
supply the pipeline were discovered in
the early 1970s. These three gas fi elds
collectively contain an estimated 5.8
trillion cubic feet (TCF) of recoverable
natural gas and will have a production
life-span of 25 to 30 years.
Natural Gas Liquids
· Natural gas liquids (NGLs) are present
in unprocessed natural gas, and may
contain ethane, propane, butane,
isobutane, and gasoline, which are
sometimes referred to as condensate.
· These NGLs are removed and sold
separately, leaving almost pure
methane to be sold as natural gas.
Project Components
· A 1,220-km, 30-inch natural gas pipeline
from Inuvik to northwestern Alberta.
· A 480-km, 10-inch natural gas liquids
pipeline from Inuvik to Norman Wells.
· Three natural gas fi eld production facilities.
· A gathering pipeline system.
· A gas processing facility near Inuvik.
Projects Proponent
· Imperial Oil Resource Ventures Limited
· ConocoPhillips (Canada) North Limited
· ExxonMobil
· Shell Canada Limited
· Aboriginal Pipeline Group
Mining
The NWT mining industry is dominated by
diamond mining, with three operating mines,
and one under development (Gahcho Kué).
Together, the three operating mines account
for more than one-quarter of total GDP. Other
possible mines before 2020 include Prairie
Creek, Nico, Yellowknife Gold and Nechalacho.
Taken together, these fi ve projects could add
over 1,700 new jobs to the economy by 2017,
off setting declines from the planned closure of
Ekati scheduled for 2019.
Diamond MinesSince 2009, diamond exports jumped from $1.4
billion to over $2 billion in 2011; an increase
of nearly $600 million or 40 per cent. In 2011,
oil shipments were worth $396 million, while
natural gas production declined to $20 million.
Diamond production dropped in reaction to the
fall in demand that accompanied the 2008–09
recession, but demand and prices have since
recovered and are at pre-recession levels.
The Gahcho Kué project is in the permitting
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES76
Source: NWT Bureau of Statistics
Value of Mineral Shipments from the NWT (In Thousands of Dollars)
phase and is the subject of an environmental
review which is expected to be completed in
six months. Subject to successful permitting,
construction of the fi rst mine at Gahcho Kué is
expected to commence in 2013 and production
is expected to commence in 2015. Gahcho Kué
will produce an average of 4.5 million carats per
year for the fi rst eleven years of the mine life.
Other Mineral PropertiesInterest has also been shown in the Kennady
North diamond project near Gahcho Kué.
A number of promising gold projects are under
development. Fortune Minerals NICO project
contains proven and probable mineral reserves
of 21.8 million tonnes containing 760,000
ounces of gold, 61 million pounds of cobalt, and
77 million pounds of bismuth.
NICO is currently under review by the Mackenzie
Valley Environmental Impact Review Board.
Initial production at Avalon Rare Metals
Nechalacho project has been delayed until late
2016.
On June 27, 2012, Canadian Zinc reported
positive results from the preliminary feasibility
study for the Prairie Creek zinc-lead-silver mine.
289,729
540,405
605,646
553,604
594,020
533,577
608,849
634,314
609,454
738,610
463,680
492,463490,361
606,254
624,949
717,780791,821
1,587,740
2,096,718
1,762,053
1,567,019
1,764,893
2,056,656
1,447,940
2,029,4682,069,630
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Diamonds
Other
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 77
Non-Renewable Resources - SWOT Analysis (MOG)
Strengths
· Rich resource base
· History of development and strong business
support services (trucking, air, etc)
· Minerals database
· Geoscience Centre (expertise)
· Oil pipeline and right of way
· Commodity mix, diamonds, oil,
gold, rare earth elements, etc.
Weaknesses
· Infrastructure
· Shortage of skilled labour
· Distance from markets
· High operating costs
· Complicated regulatory process
· Ambiguity regarding “duty to consult”
Opportunities
· High prices for diamonds and oil; gold
still are historic highs as well
· Low interest costs reduce capital
costs and improve ROI
· Growing Chinese, Korean and Asia demand
· Low natural gas prices has created
renewed interest in LNG technology,
which could reduce NWT costs.
Threats
· Volatile markets
· Competition from other regions
· Product substitution - eg: reduced
demand for rare earth batteries
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES78
ENERGYThe abundant energy
resources of the NWT are
largely untapped and provide
the territory with a strategic
resource to support future
economic development.
Solar Array at Fort Simpson - ITI
The abundant energy resources of the NWT are
largely untapped and provide the territory with
a strategic resource to support future economic
development.
On the renewable energy side, with over
11,000 megawatts of hydroelectric potential,
our northern rivers could be a source of
clean, sustainable energy. In addition, there
is also potential for the development of
other renewable energy sources, including
wind, biomass, solar and geothermal energy.
Displacing imported diesel is a key long-term
objective in the NWT.
The high economic and environmental price
of fossil fuels points to the need to invest
in hydroelectric capacity and renewable
energy development in the NWT. Such
as Governments, the private sector and
households continue to explore alternative
energy options such as wood pellet technology.
This heating method is an alternative to diesel
and can reduce heating costs. The combined
annual consumption of pellets in the NWT is
in the range of 12,000 tonnes per year. While
biomass use is expected to grow rapidly, other
technologies are beginning to be explored,
such as geothermal power, wind power and
solar power.
The GNWT worked with the Northwest
Territories Power Corporation to launch the
60 kilowatt solar photo-voltaic installation at
Fort Simpson and its eff ects on energy use are
currently being monitored.
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 79
Natural Gas, 7%
Diesel, 15%
Hydro, 78%
In the NWT there are three main sources used
to generate electricity: natural gas, diesel fuel
and hydro. Hydroelectric generation is used in
eight communities in the Great Slave Lake area,
while natural gas-fi red power plants provide
electricity to the communities of Inuvik and
Norman Wells. The remaining 23 communities
have electricity provided by diesel-fi red power
plants.
There are three suppliers of electricity in the
Northwest Territories: NWT Power Corporation
(NTPC), Northland Utilities NWT (NUL), and
Imperial Oil Ltd (IOL). In addition, the mining
industry generates its own electricity at remote
sites using diesel as a fuel source. Community
and NWT electricity generation by source is
shown in the fi gures below.
NTPC is a GNWT Crown Corporation. It services
27 communities through the operation of 20
isolated diesel plants, a natural-gas-fi red plant,
and 6 hydro plants.
NUL consists of two companies. Northland
Utilities (Yellowknife) Ltd. distributes
hydroelectric power in Yellowknife and
Northland Utilities (NWT) Ltd. distributes
hydroelectric power in Hay River. Northland
Utilities (NWT) Ltd. also generates and
distributes diesel-electric power in four isolated
communities.
IOL sells natural gas-fi red electricity to NTPC for
distribution in Norman Wells.
Source: NWT Bureau of Statistics
2011 Community Electricity Generation (Total Consumption 328,939 MWh)
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES80
Natural Gas, 11%
Diesel, 50%
Hydro, 40%
2011 NWT Electricity Generation Including Industrial Consumers(Total Consumption 647,282 MWh)
GDP Contribution by Utility Companies (Millions of 2002 Chained Dollars)
Source: NWT Bureau of Statistics
4342
40
43
49
50
55
54
59 5959
6261
0
10
20
30
40
50
60
70
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: NWT Bureau of Statistics
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 81
Utility Electrical Generation in the NWT (MWh Utility Generation)
Source: NWT Bureau of Statistics
In 2011, utility companies contributed just
over $60 million to the total GDP of the NWT.
As shown in the chart on the previous page,
growth has been positive over the past fi ve
years.
The chart below highlights utility electrical
generation for the years 2008 through 2011.
As shown, electricity generation is cylical with
generation peaking during the winter months
and dropping in the spring and summer
months.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2008 2009 2010 2011
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES82
Source: Energy Planning Division, ITI
Overall utility generation, as shown in the
fi gure on the bottom of the previous page, in
the NWT has been relatively fl at, aside from
seasonal variations. With utility customers,
winter consumption is signifi cantly higher than
summer.
In 2010, the GNWT completed a two year
process to review electricity regulations, rates
and subsidy programs in the NWT. Through
this process, seven electricity rate zones were
established, as shown in the fi gure below. The
revised electricity rates came into eff ect on
December 1, 2010. As a result, the price of
electricity in some smaller communities was
reduced.
Electricity Service Provider by Community and Electricity Source
NTPC Inuvik, Norman Wells Natural Gas (2 communities)
SERVICE PROVIDER COMMUNITY SOURCE
NTPC Dettah, Fort Resolution, Fort Smith, Behchokö (Generation and Distribution)
Hydro (8 communities)NUL Hay River, Hay River Dene Reserve, Enterprise, Yellowknife
(Distribution)
NTPC
Aklavik, Colville Lake, Deline, Fort Good Hope, Fort Liard, Fort McPherson, Fort Simpson, Jean Marie River, Lútselk’é, Nahanni Butte, Paulatuk, Gameti, Sachs Harbour, Tsiigehtchic, Tuktoyaktuk, Tulita, Ulukhaktok, Whati, Wrigley (Generation and Distribution)
Diesel (23 communities)
NUL Kakisa, Fort Providence, Trout Lake, Wekweètì (Generation and Distribution)
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 83
NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY | INDUSTRY PROFILES84
Diavik Wind Farm
By the winter of 2012, the Diavik Diamond Mine
is planning to have the fi rst large-scale wind
farm in Canada’s Northwest Territories. The mine
is one of the world’s major diamond producers.
It is located off the hydro grid, in a remote
location, close to the treeline and the border
with Nunavut.
The wind farm will employ four 2.3 megawatt
wind turbines (total installed capacity 9.2 MW).
These turbines have an innovative, gearbox free,
direct drive, low temperature design. This will
be the fi rst large scale wind-diesel installation at
a remote ‘off the grid’ mine site. It will also break
new ground for similar installations in remote
communities.
Once operational the wind farm is expected to
generate 9 per cent of the mine site’s electricity.
This will translate into a saving of four million
litres in diesel fuel per year (projected). This
reduction in diesel will reduce carbon emissions
by 12,000 tonnes per year.
Estimated project economics are very robust,
including a positive Net Present Value Payback
period of less than eight years.
Source: www.diavik.ca
Wind Farm - Environment Canada
Energy - SWOT Analysis (Energy Planning)
Strengths
· Vast Potential - largely known locations
· Mining and oil/gas growth - potential
population growth and increased demand.
· Quantity of biomass
· Number of abandoned gas wells
and low natural gas prices
· Number of know, and signifi cant,
natural gas deposits
Weaknesses
· Limited Grid
· High diesel operating costs
· High operating costs
· Relatively small, scattered market
· High labour costs
· Limited transportation network
· Limited scientifi c research
· Limited technology
· Limited access to timber
Opportunities
· Potential export sale (southern
Canada and US)
Threats
· Low natural gas prices could
reduce export markets
· Exports also impacted by
economic conditions
INDUSTRY PROFILES | NORTHWEST TERRITORIES OPPORTUNITIES STRATEGY 85