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Yukon is predicting an $81.96 million surplus this year as the territory promises record capital investment in housing, in what is expected to be its last budget before the next territorial election.
However, it’s also forecasting a shrinking real GDP in the wake of last year’s disaster at the Eagle Gold mine.
Finance Minister Sandy Silver tabled the $2.36 billion budget on Thursday, including nearly $478 million in total planned capital spending, charting what he said is a “responsible, sustainable and compassionate path forward.”
“This budget reflects careful stewardship of public funds, responsible investment in essential services and infrastructure and a commitment to long-term financial sustainability, so people and businesses can plan for their future,” Silver told the legislature.
The government’s capital plan includes funding to finish turning a former Whitehorse hotel into 67 supportive housing units, money toward building affordable rentals with the Kwanlin Dun First Nation, and land development projects.
Silver said Yukon is spending more than $5 million to support the construction of new affordable housing, and launching a $1 million program to help Yukon residents buy their first home.
The budget includes $24.5 million for the Yukon Hospital Corporation to increase bed capacity and $1 million for a service that helps internationally educated health-care professionals have their foreign credentials recognized in the territory.
The territory’s real GDP declined 0.6 per cent in 2024 and is expected to drop again, this time by 0.3 per cent, in part thanks to last year’s failure at the Eagle Gold mine and suspension of production.
The mine’s former owner, Victoria Gold Corp., was the territory’s largest private sector employer.
Millions of tonnes of cyanide-soaked ore was released into the environment when the facility, used as part of the process to extract gold, collapsed.
The budget includes $118 million in loans to the court-appointed receiver for Victoria Gold Corp. to continue remediation efforts.
“Addressing this environmental disaster and ensuring long-term protection of the Yukon’s land and water is an absolute priority,” Silver said.
The minister said that historically the territory has aimed to minimize borrowing but that this budget includes provisions for long-term borrowing of up to $400 million.
“Our population has grown, and our climate is changing rapidly. Strategic borrowing will be a key tool in addressing our territory’s evolving needs, providing the flexibility that we need to manage cash flow, while unlocking needed opportunities for growth and resilience,” he said.
The Opposition Yukon Party called the budget “reckless” and said the territorial government’s “spending is far beyond its means.”
“Today, as we find ourselves on the precipice of a trade war and some of the most uncertain and chaotic economic times any of us have ever seen, the territorial government plans to borrow hundreds of millions in long-term debt, public finances are a mess, and the economy is in decline,” finance critic Brad Cathers said in a statement.
“Yukoners are rightfully concerned about where this is all heading and want to see a change.”
The budget also includes a $75 million contingency for emergencies including fire, flood, health care pressures or trade risks amid the ongoing conflict between Canada and the United States.
The government said in a document released with the budget that Yukon is “largely insulated from the direct effects” of U.S. President Donald Trump’s 25 per cent tariffs on Canadian goods, due to Yukon’s “limited reliance on international goods exports.”
In 2024, almost all of the $145 million that Yukon exported to the United States came from the Keno Hill Mine.
The document said tariffs will impact profitability at the silver mine but that a 50 per cent increase in silver prices since last year should help absorb the shock.
But Yukon is not immune to tariff impacts.
“The broader economic implications cannot be ignored,” the document says.
“The unprecedented uncertainty could begin to penetrate beyond export oriented sectors and affect investment decisions for businesses not directly exposed to U.S. trade.”
This report by The Canadian Press was first published March 6, 2025.
Ashley Joannou, The Canadian Press