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Fortune Tellers - Yukon...

Fortune Tellers - Yukon...

...with Darrell Pasloski, Joe Sparling and Stefan Voswinkel
By Herb Mathisen
Feb 03
2016
From the February 2016 Issue

Darrell Pasloski, Yukon premier

Let's pay our way

If Premier Darrell Pasloski’s dream comes true, by 2026 the Yukon would be sending millions—maybe even tens or hundreds of millions—of dollars to Ottawa in the form of transfer payments. Yes, he wants the Yukon to be so prosperous and self-sufficient in 10 years that it becomes a “have” territory—or in his words, a “net contributor to Canada.”

But as it stands today, that’s an ambitious goal. In last year’s budget estimates, the Yukon was slated to receive an estimated $1.06 billion in federal transfers, compared to the roughly $240 million it would bring in through its own revenues. That was before the Wolverine mine closed down, leaving the territory with just one operating mine. (And the owner of Capstone’s Minto copper mine, late in 2015, was considering a temporary closure—though not likely before 2017—due to low copper prices.)

Yet, of the three territories, the Yukon has the least logistical and infrastructure challenges. All but one community—Old Crow—is accessible by road. And nearly two-thirds of its population lives in its capital, Whitehorse. This gives it the ability to spend its money more efficiently and, theoretically, more strategically.

“We’ll have the first university north of 60 with the creation of Yukon University."

With an election coming up, Yukoners will soon be hearing promises being spouted by politicians from all territorial parties. But with this exercise in future-gazing, Pasloski played along and listed some initiatives he can see in the Yukon over the next decade—starting with education. “We’ll have the first university north of 60 with the creation of Yukon University,” he says. “It will be a bit of a hybrid [with the existing Yukon College] because we want to ensure that this university also continues to provide technical education as well, like for plumbing and electrical—the trades.” This, he says, will follow on the heels of the institution of a revamped, Yukon-made Grade 1 to 12 curriculum to replace the current B.C. program in use.

That’s his safe, practical pitch. Now for some of his splashier ideas: direct flights from Asia to bring in aurora tourists; the construction of a new hydro dam to power Whitehorse and surrounding areas; more locally trained athletes and coaches participating at the national and international level; the creation of resource access roads to open up select areas for easier exploration; and the Yukon becoming “carbon neutral.”

The government is also working on reconciliation agreements with the three First Nations that aren’t signatories of the territory’s Umbrella Final Agreement, which provides a framework for land claims settlements. “To be successful, they need to be a big partner in the overall growth and development of the territory.”

And to promote local entrepreneurship, Pasloski touts the business incubators Yukonstruct—a community “makerspace”—and a collective pay-per-month office space (with desk and Internet included) as things that are being done to support small business in the territory.

There are some large-scale projects in the pipeline—particularly the Selwyn lead-zinc, Kaminak gold and Casino copper and gold projects—that if realized, have the potential to each draw north hundreds of workers each.

A bigger population brings with it a bigger tax base, and that’s more money to invest in diversifying its economy—through tourism, the knowledge and IT sectors, and education. Will it be enough to make the Yukon the self-sufficient, carbon-neutral territory its premier dreams of? Pick up the January 2026 issue of Up Here to find out.

Joe Sparling, president of Air North

"You kind of have to look after yourself first"

When you live in a place where you import most of your goods, you need to support local businesses whenever you can. That should be an obvious key to the Yukon’s economic future, says Joe Sparling, president of one of the territory’s largest private employers.

But here’s the irony: Sparling’s attended many a Whitehorse roundtable—sponsored by a federal government department or agency—focused on making the North stronger and integrating First Nations businesses into the mainstream of the economy, only to find out that every federal government employee (due to their procurement policies) travelled North on a southern carrier. “We would have been better off if they would have stayed home—and I’ve told them that. ‘You’re threatening jobs that we’ve already created and undermining our own competitive strategy, because not only are you travelling with our competitor, you’re buying really expensive tickets from them.’”(The Yukon Government doesn’t have a formal policy to fly with Air North or other local airlines, but Sparling says they do a good job of it.)

“If you’re trying to make the North stronger and more self-sufficient, you’ve got to practice what you preach ... If you’re travelling to the North, spend your money in the North.” 

“If you’re trying to make the North stronger and more self-sufficient, you’ve got to practice what you preach,” he says. “Words are not enough. If you’re travelling to the North, spend your money in the North.” What’s needed is something akin to U.S.’s Buy America policy in such situations. “They’ve got rules to make sure that they look after their own economy first. And I think as Northerners, we’ve got to do the same thing.”

That extends to other government spending. During tough times, governments often spend on infrastructure to create work and jumpstart the economy. “But as a small territorial government in a small jurisdiction, it would be a mistake to do all of your capital spending in one year,” he says. That’s because you quickly exceed the capacity of your local contractors and wind up bringing in workers from Outside—that’s Yukoners’ preferred term for, well, the world outside the Yukon—instead of metering it out over a few years to keep local firms busy. “You have to think of the local capacity if you’re a public spender and you always have to be thinking of the maximum benefit to the local economy.”

Where else can the Yukon turn its attention closer to home? Focus on promoting the territory to weekend getaway tourists from cities with direct flights to Whitehorse, rather than overseas junkets to Asia, says Sparling. That includes marketing the Yukon as a convention and conference destination. “These people tend to put a lot of money on Main Street, just because they’re staying in hotels, eating in restaurants and buying gifts,” he says. This provides a good payback on relatively few marketing dollars. It comes down to one simple maxim: “If you spend your money locally, it remains in the local economy.” 

Stefan Voswinkel, management consultant

Bring the Yukon closer to the world

It truly is a global economy. And it matters less and less where you actually, physically, do your work. Stefan Voswinkel, a Whitehorse consultant, thinks this presents an opportunity for the Yukon.

The government already spends millions trying to lure vacationers north to explore the Yukon, to hike its mountains and paddle its rivers. Voswinkel wants the territory to think bigger. His dream? A dedicated, two-year marketing campaign in reputable international publications, targeted at self-employed professionals living on the West Coast of North America, in major Eastern Canadian and American cities, and English- and (notoriously Yukon-obsessed) German-speaking Europe, that showcase the Yukon lifestyle.

There’s already a large and growing group of what he calls “lone eagles,” independent professionals who derive a part—or most—of their revenue from outside the Yukon, and whose networks are also outside the territory. Like a French-Russian-German-English translator he knows. “He set up camp in Atlin and had high-speed Internet and served his corporate clients in Ontario from there,” he says.

The immediate benefits of courting this professional class are obvious: a larger population base, which means more tax revenue and money flowing through the local economy. “Diversification is the main topic. There is no environmental impact. And it’s not cyclical,” he says. “Tourism is seasonal and mining is cyclical.”

“Wolverine mine was owned by a state-owned Chinese company and they left local small businesses in the lurch ... If the Yukon government wants to permit the next Chinese-owned project, the mega-project at Selwyn, they need to tell them, ‘Clean up your old act, Chinese government, before you get the permit.’”

Not only will it have financial payoffs, he argues, but these new knowledge workers will suck expertise from their networks outside the Yukon, which will then be available in the territory. “We can only sell so much to each other in the Yukon, but these people sell to people elsewhere, so there’s growth,” says Voswinkel.

This can’t be some bureaucratic marketing exercise, though. “It needs to be done by entrepreneurial people who have an understanding of how to attract people like that to the Yukon.” It’s about making the case that the Yukon—and Whitehorse, in particular—is a modern, highly educated and laidback place to live and raise a family. “Often we meet people that shroud the North in a myth, and people in Vancouver don’t know how the lifestyle really is here,” he says. There’s obviously the breathtaking scenery, short commutes and the Great Outdoors literally outside your door. But there’s much more. “We have five flights non-stop to Vancouver every day,” notes Voswinkel. Add to that a vibrant arts scene and cosmopolitan restaurants. And compared to many major centres, it’s actually cheaper.

One thing on his wish list is a second fibre line to provide redundancy to the territory’s lone connection. Whenever there’s a cut, he says, businesses are hurt. But if the Yukon is able to succeed in this area—and continues to promote entrepreneurship locally—the efforts will only snowball as the word gets out. “I’m not saying this could grow to 3,000 knowledge employees in the next 10 years,” he says, “but let’s say we get 300 knowledge workers here over the next five to seven years. That would be a huge success in my mind.”

Are these real economies?

For all the talk about self-determination, the territories really do rely on federal grants and transfer dollars to keep the lights on. Here’s a breakdown of each territorial government’s “revenues”: what they get from the feds, and what they generate on their own through taxes and other means.

Yukon

Total revenues: $1.303 billion

Grants & transfers from Canada: $1.06 billion

Own-source revenues: $242 million (18.5%)

NWT

Total revenues: $1.826 billion
Grants & transfers from Canada: $1.4 billion

Own-source revenues: $425 million (23.2%)

Nunavut

Total revenues: $1.722 billion

Grants & transfers from Canada: $1.53 billion

Own-source revenues: $186 million (10.8%)

(Source: Yukon, NWT and Nunavut 2015-16 main estimates)