During the early 1870s, gold discoveries on tributaries of the Yukon River attracted prospectors to the area. Only small amounts of gold had been mined before Aug. 17, 1896, when three prospectors—George Washington Carmack and his two Tagish partners, Skookum Jim Mason and his nephew, known as “Tagish Charlie”—found rich deposits in Bonanza Creek, a small tributary of the Klondike River near its confluence with the Yukon. The discovery led to the great gold rush of the late 1890s, at the peak of which the nearby settlement of Dawson grew into a city of some 25,000 people. Access to the area was quickly improved by construction of a 110-mile (177-km) narrow-gauge railway, the White Pass and Yukon Route (WP&YR), extending from the port of Skagway, Alaska, to Whitehorse, on the upper reaches of the Yukon River. In 1898 the Canadian Parliament separated the rapidly growing area from the Northwest Territories and gave it separate territorial status.

The Klondike boom lasted only a few years. By 1900 many of the individual miners (called “stampeders”) had given up and were leaving Yukon. The gold-mining industry was subsequently reorganized by companies that brought in large-scale mechanical mining techniques. The population fell from 27,219 in 1901 to 8,512 in 1911 and finally to a low of 4,157 in 1921. Although no new gold deposits were located, other minerals were discovered. Copper ore was mined near Whitehorse during World War I, and during the 1920s and ’30s ores containing silver and lead were mined in the Mayo district in the central plateau. Development of those and other resources, however, was hindered by high operating and transportation costs, and in 1941 only 4,914 persons were counted in the census.

Economic and political development of contemporary Yukon

During World War II such military projects as the Alaska Highway, a part of the Pan-American Highway system, brought a second boom to the territory. Some 10,000 workers, both military and civilian, arrived from the United States to construct the highway, a project that took less than a year (1942–43) to complete. Improvements in transportation and communications helped open the territory to greater exploration and development, while increased public interest in the area prompted a great expansion of government services and an increased influx of tourists. Most of this activity centred on Whitehorse, which replaced Dawson as the territorial capital in 1953.

Over the years, Yukon’s political status underwent significant changes. From its creation in 1898, the territory was governed by a commissioner and a six-member legislative council, all appointed by and responsible to the federal government in Ottawa. Eventually council members came to be elected rather than appointed, although the commissioner retained ultimate administrative authority. As political parties became active in the territory, demands for increased local control over governmental decision making became more insistent. In 1979 the federal minister responsible for Yukon instructed the commissioner to withdraw from executive decision making in favour of the elected leader of the majority in the legislature (which was by then called the Legislative Assembly). The commissioner thus became the head of state, and the day-to-day running of the territorial government became the responsibility of the elected premier. In 2003 Yukon was granted control over its natural resources, although public (“Crown”) land in the territory is still deemed to be owned by the federal government.

A seemingly small mineral discovery in the central Faro region in the 1960s eventually became one of the world’s largest lead-zinc mining operations. At the time of their peak production in the 1970s, the Faro open-pit mines accounted for more than one-third of Yukon’s total economic output and together constituted the largest producer of those metals in Canada. Eventually, however, falling metal prices, internal management problems, and declining yields led to the closure of the Faro mining complex in 1998.

In the late 20th and early 21st centuries, ongoing discussions between both the federal and territorial governments and First Nations people regarding native land claims and self-government occupied much of the territory’s political agenda. Beginning in 1973, First Nations leaders negotiated a number of agreements on those issues, at first with the federal government alone; the Yukon government joined the process in 1979. In 1990 a general model agreement for native self-government was reached, followed by detailed negotiations with individual First Nations groups to allocate settlement lands and funding along with other specific matters. Two decades later most of the 14 agreements between the groups had been implemented, creating self-government for 11 First Nations groups.