Statistics Canada revealed today that the provinces of Alberta and Saskatchewan led the country in economic growth in 2011, buoyed by the extraction and exploration of their natural resources.
As a whole, the country’s economy grew 2.6% in 2011, slightly less than the 3.4% expansion experienced in 2010.
In the Western provinces, however, the economy picked up speed.
Alberta led the way with a 5.2% growth last year, after a less spectacular 3.3% in 2010, thanks to high energy prices that led to gains in oil and gas extraction and exploration activity. Construction of oil and gas engineering projects also contributed to the growth, said Stats Canada.
In Saskatchewan, the GDP grew 4.8% compared to the previous year, driven by a strong export demand for its natural resources, particularly non-metallic mineral mining, including potash.
Ontario didn’t do great last year, still growing 2% thanks to its mining and exploration sector.
Yukon also saw its economy highly benefited by mining, growing 5.6%. Exploration for gold and silver hit record levels. Output at metal ore mines increased with the opening of a new silver mine: Bellekeno. The silver-lead-zinc mine, owned by Vancouver-based Alexco Resources Corp, is located 330 kilometres north of Whitehorse in central Yukon, its Keno Hill historic silver district.
In Nunavut, GDP increased 7.7% in 2011, led by gold and silver production, which increased for the second consecutive year. The high price of gold spurred exploration activity and construction as work on a new mine got underway.
A general decline in diamond mining affected negatively Canada’s Northwest Territories, where economic output dropped 5.5%. Last month, Rio Tinto (LON:RIO) announced that it was reviewing its diamond business, potentially selling it all off. The world’s third largest miner's decision followed BHP Billiton's, which in November 2011 launched a review of its diamond operations with an eye to selling assets including Ekati, Canada’s oldest diamond mine and neighbour of Diavik.
BHP Billiton’s Ekati diamond mine produced only 481,000 carats in the last quarter of 2011, a 29% drop compared to a year ago, as the mine enters its twilight years.