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Newfoundlanders and Labradorians find their happy place
It was the summer that wasn’t, with temperatures regularly dipping below 10 degrees Celsius throughout July — and one unforgettable day where St. John’s scored colder than the North Pole. But neither the month which locals dubbed “Juleuary”, nor cooling global petroleum prices, nor an economic slowdown that Newfoundland and Labrador Premier Paul Davis predicts will be in place until 2018, could cool the enthusiasm of the province’s business community. Yes, N.L. entrepreneurs are among the most optimistic in the country (behind P.E.I., B.C. and N.S.). Better yet, that confidence is growing, according to the Canadian Federation of Independent Business’ July 2015 Business Barometer survey. It’s worth noting that survey findings were collected before the July 28 approval of the offshore oil White Rose Extension Project. Goodbye, low pressure system; hello, warm front.
High-Low There’s a curious disconnect between the province’s biggest employers and its most valuable revenue generators: some of the biggest GDP contributors are on the lower end of the spectrum when it comes to employment numbers.
“If we stay the course we’re on right now, then five years from now, we will be a province in fiscal surplus, on the cusp of revenue windfalls unlike anything Newfoundland and Labrador has ever witnessed… Frankly, we are at a pivotal point in our history as we look toward 2020.”Premier Paul Davis, Government of Newfoundland and Labrador
The way the wind blows
According to The Economy 2015, published by the Government of Newfoundland and Labrador, the next five years will bring increases in GDP, household income and retail sales as well as unemployment (slightly) and the consumer price index (11 per cent — yikes).
“We have just come o of several years of strong growth, both in terms of prices and sales volume. As the economy has cooled we’ve seen a return to a more balanced market, with prices stabilized in most regions of the province and sales volumes, particularly new home sales returning to a more traditional level. …A few new resource project announcements (more oil development, a Gull Island deal with Ontario, etc…) could spur another round of activity in the local market.”Bill Stirling CEO, Newfoundland and Labrador Association of Realtors
Resourceful future
The oil industry — N.L.’s biggest revenue generator (responsible for 28.4 per cent of GDP) — took a significant hit in recent years as oil production declined 5.7 per cent in 2014 and the price of Brent crude dropped 8.8 per cent over 2013. However, The Economy 2015 reports that a rebound is on the near horizon: “Beyond 2018, the economy is forecast to grow again. Production from Hebron, Muskrat Falls and the Voisey’s Bay underground mine, as well as development of other offshore resources, such as Statoil’s Bay du Nord discovery, are expected to provide a boost to the province’s economy.”
“The current issues of vital importance to Newfoundland and Labrador’s oil and gas industry, include: becoming more competitive and attracting investment (industry growth will only be possible if N.L. continues to be an attractive place to invest); managing increasing costs (rising costs mean less revenues – for both the industry and the province); and, being more ecient and e ective from a regulatory perspective.” Paul Barnes Manager, Atlantic Canada & Arctic Canadian Association of Petroleum Producers
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