northwest territories opportunities strategy …

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


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


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)



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)


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


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


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, 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.


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 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.


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


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


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


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


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.


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



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


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.


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


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.


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.


Arc

tic

Air

- O

mn

i Film

Pro

du

ctio

ns

Ltd

.


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


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


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.


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.


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.


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)


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


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


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.


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.


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


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


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 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.


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



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



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


Source: Aidan Cartwright


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.


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 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.


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


Retail - SWOT Analysis

Strengths

· Rates competitive to southern cities.

· High incomes.


· 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.






· 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.


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


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


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.


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


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.


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.


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



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


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 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.


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


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.


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.


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



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



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



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



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



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


Wholesale Trade - SWOT Analysis

Strengths

· Access to substantial mineral and

government sector, plus growing retail.


· 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 .






· 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.


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.


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


Source: ITI - IEA Map

Map – North America Sedimentary Basins



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


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



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


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


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.


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.


2011 Community Electricity Generation (Total Consumption 328,939 MWh)


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)


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



Utility Electrical Generation in the NWT (MWh Utility Generation)


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


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)


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

northwest territories opportunities strategy …

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