Chapter 21 - Employment and Business

21. Employment and Business

Changes in the level of employment and business activity directly affect the demand for services and infrastructure (Chapter 23) and the standard of living of individuals, families and communities (Chapter 24).

This chapter provides an analysis of the effect of the Project on employment and business in Labrador's North Coast communities and other areas of Newfoundland and Labrador.

21.1 Existing Environment

21.1.1.1 Labrador North Coast

"Fishing and hunting alone cannot sustain people. If there are no new jobs, we will all be on welfare." (Inuit group in Makkovik, in Williamson, 1996.)

With the fisheries moratorium, decreased salmon and Arctic charr catches, and loss of sealskin markets, the opportunity for residents of Labrador's North Coast to earn income from renewable resources has decreased substantially in the last decade. While some residents still rely on subsistence hunting and fishing for their livelihood (see Chapter 20), most traditional sources of earned income have been lost. Employment opportunities in non-traditional sectors have also been low and limited to industries such as government service and fish processing. While the North Coast was undergoing structural economic changes, communities were experiencing extremely high birth rates. This led to high unemployment and excess labour supply. For example, in Nain (1991), an estimated 60 percent of the population was under the age of 25 (Statistics Canada 1992), and of those participating in the labour force (those aged 15 and over, working or actively seeking work), more than 26 per cent were unemployed (Appendix 21A, Table 2).

21.1.1.2 Other Areas of Labrador and Newfoundland

The depressed state of the economy makes employment and business opportunities two of the most important socio-economic issues in Newfoundland and Labrador. Provincial unemployment levels have been historically high in comparison with Canada. Contributing to high unemployment are the fisheries closure and declines in construction activity as a result of the recent completion of the Hibernia oilfield production platform. While there has been increased activity in some sectors, including harvesting non-traditional fish species, aquaculture, mineral exploration and oil and gas development and exploration, the overall provincial economy remains depressed.

While Labrador generally, and the Upper Lake Melville area in particular, currently experiences a better employment and business situation than the province as a whole, there is still a considerable concern regarding the long-term economic situation of the region. Labrador is highly dependent on resource-based activities, which makes it vulnerable to fluctuations in the price of these commodities. Also, Labrador is dependent on both the federal and provincial governments either as an employer or a source of transfer payments, and both roles are uncertain in times of fiscal restraint.

Voisey's Bay Nickel Company (VBNC) will provide Aboriginal benefits from the Project in separate Impact and Benefits Agreements (IBAs) being negotiated with LIA and the Innu Nation (see Chapter 4). The IBAs should, amongst other things, result in significant employment and business opportunities for members of LIA and the Innu Nation. VBNC has indicated that certain communities in Labrador will be pick-up points for workers flying to the Project site. For these reasons, residents of adjacent communities, particularly Aboriginal residents, will have the best chance of being hired for the jobs for which they are qualified or can be readily trained.

Although VBNC is committed to hiring residents of adjacent communities, it is unlikely that all positions at the site can be filled from the labour and talent pool of northern and central Labrador. Particularly after the mining operation goes underground and the work force increases, skilled people from other regions, and Labradorians capable of being trained for project-related work, will be in a position to seek these new jobs.

21.1.2 Environmental Assessment Boundaries

Capitalized terms (such as Landscape Region and VBNC Claim Block) may be defined in other chapters, depending upon the context in which they are used; for example, Assessment Area.

Project employment and spending will affect people and communities within the Labrador North Coast and in other areas of Newfoundland and Labrador. Separate effects predictions will be made for i) the Labrador North Coast and ii) other areas of Newfoundland and Labrador.

21.1.2.1 Labrador North Coast

The Labrador North Coast area, as defined for the employment and business assessment, includes the Town of Nain, and the communities of Utshimassits, Hopedale, Makkovik, Postville, Rigolet and Sheshatshiu (Figure 21.1). While geographically Sheshatshiu is in the Upper Lake Melville area and, as such, is discussed together with Happy Valley-Goose Bay, North West River and Mud Lake, it is also considered in the discussion of the North Coast area. This is because the community has an almost entirely Innu population and its members will benefit from the IBA.

Figure 21.1 Labrador Regions and Communities

21.1.2.2 Other Areas of Newfoundland and Labrador

The Upper Lake Melville area includes the Towns of Happy Valley-Goose Bay and North West River, and the unincorporated communities of Sheshatshiu and Mud Lake (Figure 21.1).

Eastern Labrador includes the area between Groswater Bay and Cape Charles. It includes the incorporated communities of Cartwright, Charlottetown, Port Hope Simpson, St. Lewis and Mary's Harbour, and the unincorporated communities of Paradise River, Black Tickle, Norman Bay, Pinsent's Arm, Williams Harbour and Lodge Bay.

The Labrador Straits is the region across the Strait of Belle Isle from Newfoundland. It includes the incorporated communities of Red Bay, Pinware, West St. Modeste, L'Anse au Loup, Forteau and L'Anse au Clair, and the unincorporated villages of Capstan Island, L'Anse Amour and Point Amour. This is the only portion of the Labrador coast which has a highway.

Western Labrador includes the iron mining towns of Labrador City and Wabush, and the unincoporated community of Churchill Falls.

The St. John's Census Metropolitan Area (CMA) will also experience employment and business effects from the Project, since VBNC's headquarters is located in St. John's.

The construction and operation of the Project will draw workers from other areas of the Province of Newfoundland and Labrador, (the "Province") and, potentially, other areas of Canada.

21.1.2.3 Administrative Boundaries

Labrador North Coast

The North Coast and Sheshatshiu are subject to federal and provincial programs related to training, hiring, employment, and economic development. In addition, there are a number of specific programs directed towards Aboriginal employment and economic development. These include the Canadian Aboriginal Economic Development Strategy, the Human Resources Canada Native Employment Strategy, and the Pathways to Success job training and enrichment program. The Labrador Inuit Development Corporation (LIDC) and Innu Nation Economic Development Corporation are also active in economic development with the assistance of some federal financial support.

Other Areas of Newfoundland and Labrador

There are no regional administrative boundaries relevant to the employment and business issues discussed here. The Province is subject to a wide range of provincial and federal employment and business legislation, regulation and programmes.

21.1.2.4 Technical Boundaries

Labrador North Coast

This section uses a range of Statistics Canada information and other data to describe existing conditions related to employment and business. Census and other government administrative data concentrate almost entirely on the market economy and contain little information about subsistence activities, which are discussed in Chapter 20. Furthermore, the information being assembled is mostly from the 1991 Census. Data from the 1996 Census are available for selected demographic characteristics only. However, it should be noted that the accuracy of these data respecting North Coast communities are questionable. For these reasons considerable reliance has been placed on information from academic literature, the Innu Nation, LIA, band councils and other Aboriginal sources. Weaknesses in the Census data are noted in the text.

Other Areas of Newfoundland and Labrador

As described above, the analysis primarily uses Statistics Canada data, most of which are from the 1991 Census. More recent secondary sources are used where available.

21.1.3 Methods

The sources of information and data used in conducting the assessment for employment and business include:

literature and data from Statistics Canada, Department of National Defence (DND) and other government budget and economic reports;

information gathered during issues scoping and public consultation;

information from key informants, including government officials; and

LIA and Innu Nation data sources including Inuit community surveys.

This chapter addresses the information requested pursuant to Section 9.2 of the Guidelines. The assumptions used are described throughout this chapter.

21.1.4 Existing Conditions - Labrador North Coast

The 1996 Census of Canada indicated that the Labrador North Coast, excluding the community of Sheshatshiu, had a total population of 2,822, compared to 2,984 in 1991, and that Nain was the largest community in the area with a population of 996 in 1996, compared to 1,069 in 1991 (Appendix 21A, Table 1). A large minority (36 percent) of this population is under the age of 14. (For further discussion of the implications of the age distribution of the population see Chapter 24.)

The validity of the 1996 data for the North Coast of Labrador is questionable. For example, a high school geography class conducted a house to house survey in 1996 on behalf of the Nain Town Council (Town Council of Nain 1997). This survey puts the population at 1,209, a gain of 140. The census estimate gives a population of 996, a loss of 73 since 1991. Given that Nain is thought to have one of the highest birth rates in Canada, and also given the increase in economic activity associated with mineral exploration activity in the area, the accuracy of the 1996 Census information is questionable. The Nain Town Council and other local authorities place more confidence in the local survey than in the 1996 Census results.

VBNC addressed the shortcomings of the Statistics Canada census data by having censuses undertaken in North Coast communities. Consultations with LIA led to these being conducted in all LIA coastal communities (Community Resource Services 1997); however the return rates, while high, were insufficient for use in demographic modeling.

Census Division 10 Subdivision C, SUN, is comprised of the two unincorporated communities of Sheshatshiu and Mud Lake. No desegregated data by individual community are available from the 1991 census. The population of Sheshatshiu/Mud Lake increased over the 1986-1996 period from 716 to 1,018, a 42.2 percent increase (Appendix 21A, Table 9). The 1996 census, which does give the Sheshatshiu population, indicates that there were 941 people in the community, 92.4 percent of the total for the Subdivision (Statistics Canada 1997). It should be noted, however, that this figure has been disputed on the grounds that some people may have been in the country when the census was taken. A recent community study reports 1,017 permanent residents in the community (Sheshashui Community Health Office 1997).

Labour Force Participation

The 1991 census indicated that the total labour force in the Labrador North Coast area was 840 (Appendix 21A, Table 2), accounting for 5.5 percent of the total Labrador labour force (15,160) (Appendix 21A, Table 10). Nain had a total labour force of 395. Rigolet and Hopedale were the next largest communities in labour force terms, with 110 and 100 workers, respectively.

"Twenty three of the Grade 8 to 12 students [about half of those attending a meeting of students in Rigolet] expressed a desire to work at Voisey's Bay or at the smelter, wherever it is located." (Williamson, 1996.)

The average labour force participation rate (the proportion of the population aged 15 years and over working or actively seeking employment) for the North Coast communities in 1991 was 41.3 percent. Labour force participation rates were highest in Nain (59.8 percent) and Rigolet (48.9 percent) in 1991 and lowest in Makkovik (27.5 percent) and Hopedale (31.7 percent). Youths (15-24 years) in Nain and Rigolet were also more likely to participate in the labour force than those in the other North Coast communities (Appendix 21A, Table 2).

Participation rates in Nain, Utshimassits and Postville increased between 1986 and 1991, while those in Hopedale, Rigolet and Makkovik decreased. Participation data must be viewed with some caution, however. For example, in Makkovik the participation rate for the population 25 years or over fell from 78.8 percent to 30.8 percent and the rate for 15 to 24 years fell from 75.0 percent to 16.7 percent (Appendix 21A, Table 2). Barring statistical error, it is not clear what could have caused such a dramatic decline. In any event, it seems clear that the current situation is quite different. In a survey of North Coast communities (Community Resource Services 1997), interviewers in Makkovik reported that it was difficult to contact both men and women as so many were at work in the fish plant at the time of the survey.

Participation rates for Sheshatshiu/Mud Lake were similar at 42.9 percent overall in 1991, though the combined figure may not reflect differences between the two communities. Participation appears to have increased since 1986 (37.0 percent), but among the younger age group (15-24) the increase has been less significant and the overall rate for this age group remains low at 26.5 percent (Appendix 21A, Table 10).

Unemployment

In 1991, the highest unemployment rate (the proportion of the labour force that is not employed but is actively seeking employment) for the North Coast was in Rigolet (40.9 percent) and the lowest was in Hopedale (10 percent). Again, these statistics must be interpreted with caution. According to Census data, the unemployment rate for Makkovik fell from 54.1 percent in 1986 to 14.3 percent in 1991 (Appendix 21A, Table 2). A decrease in unemployment of this magnitude is difficult to account for by any known increase in real economic activity in this community and it may have more to do with the apparent fall in the participation rate discussed above.

Unemployment rates in Sheshatshiu/Mud Lake were estimated at 28.6 percent in 1991, up from 20.0 percent in 1986. The increase was most marked among the 15-24 age category where unemployment rose from 25.0 to 44.4 percent over the period (Appendix 21A, Table 10). It is likely that current unemployment rates are actually much higher. A Sheshatshiu community study in 1994 reported that 155 males and females were working full or part-time and 321 individuals over the age of 18 were unemployed (Sheshatshui Community Health Office 1997). While some of the latter may not have been seeking employment, real unemployment may be substantially greater than census data would suggest.

Income

Individual cash incomes (which do not reflect subsistence-based economic activity) in the North Coast communities are much lower than those for Labrador and the Province as a whole, and there is a lower level of reliance on employment as an income source. This low level of cash income does not take into account subsistence activity, which will increase the level of "real" income earned by residents of these communities (see Section 20.1.4.3). Many residents of North Coast communities also receive government transfer payments.

Average household incomes for the five North Coast communities for which data were available for 1990 ranged from $24,627 (Hopedale) to $35,691 (Makkovik). In all cases, average household incomes in 1990 were less than that for Labrador ($50,317) and the province as a whole ($39,861) (Appendix 21A, Tables 3 and 11).

In 1990, average and median incomes for males and females in each of the North Coast communities were lower than those for Labrador and the province (Appendix 21A, Tables 4 and 12). Median incomes in 1990 in individual North Coast communities for males ranged from $7,353 (Hopedale) to $13,024 (Makkovik). Median 1990 incomes for females ranged from $7,344 (Rigolet) to $9,568 (Makkovik) (Appendix 21A, Table 4).

The median income for Sheshatshiu/Mud Lake males in 1990 was $19,760 and for females $6,384. However, between 1985 and 1990 the median income for males apparently increased from $7,166 to $19,760; this remains unexplained (Appendix 21A, Table 12).

In 1990, employment income in the North Coast communities ranged from 57.5 percent in Rigolet to 76.6 percent in Nain. Residents of Rigolet and Utshimassits received a higher proportion of their annual income from government transfer payments in 1990: 39.9 percent for Rigolet and 33.6 percent for Utshimassits (Appendix 21A, Table 5).

A study of the Nain economy, completed for the Royal Commission on Aboriginal Peoples, suggested a contribution to household income from the harvest of wild food in the range of $4,258 (Higgins et al. 1993:38). This was calculated from a projection of Usher's 1979 figure (Usher 1982), which was based on the available contemporary harvest records and estimates of the edible weight of harvested foods. Usher's imputed value was adjusted upwards to take account of the higher protein content of wild food. The Royal Commission study assumed that country food harvest remained at the level Usher had reported, while household incomes had risen. If this was so, country food contributed only 13 percent of total income, compared to 38 percent in 1979. Country food should not, however, be judged only in terms of its related contribution to household income. Subsistence plays a central cultural role which cannot be measured in cash. This is discussed further in Chapter 20.

Education and Qualifications

The 1991 census data for the North Coast communities show that formal education levels were relatively low in 1991. In total, 42.1 percent of the adult (15 years and older) population had less than grade 9 education, compared with 16.2 percent for Labrador as a whole and 20.4 percent for the province (Appendix 21A, Tables 6 and 14). Only 35 individuals (1.9 percent of the North Coast adult population) were recorded as having a trades certificate or diploma in 1991 (Appendix 21A, Table 6).
In 1991, more than 40 percent of the total population of Nain, Utshimassits, and Hopedale had less than a Grade 9 education; 11 percent had acquired a secondary diploma; 5.5 percent had completed a non-university education; and 5 percent had acquired a university degree. This overall low level of education was most pronounced in Utshimassits, where almost 60 percent of the population had less than a Grade 9 education and only 15 percent had some form of post-secondary education. This is possibly because schooling in the community did not go beyond Grade 8 and in the 1980s students had to �board' at Sheshashui or St. John's if they wanted to continue their schooling.

In 1991, in the six north coast communities as a whole, 42 percent of the population had less than a Grade 9 education, and less than 5 percent had acquired a University degree (Appendix 21A, Table 6). This trend was also evident in Sheshatshiu/Mud Lake in 1991, where 41 percent of the population had less than a Grade 9 education (Appendix 21A, Table 14). By comparison, in 1991, in Happy Valley/Goose Bay only 11 percent of the population had less than a Grade 9 education, and about 60 percent of the population had some form of post-secondary education (Appendix 21A, Table 14).

In 1991, about 33 percent of the population of Nain, Utshimassits and Hopedale age 15 to 24 years were attending school, ranging from 21 percent in Utshimassits, to 40 percent in Nain. The percentages of the population 15-24 years of age attending school were mostly within this range in Postville and Makkovik in 1991, while, in contrast, nearly 70 percent of this population were reported to be in school in Rigolet (Appendix 21A, Table 7).

More current information is available from training needs assessments undertaken by Innu Nation and LIA in early 1997 and funded by VBNC (Innu Nation and LIA 1997). The assessments were based only on those who completed the survey and are by no means a complete account of the entire population. These data indicate that formal education levels of survey respondents are highest in Nain and Hopedale and lowest in Sheshatshiu and Postville (Table 21.1). In Nain, 19.8 percent of the respondents held a high school certificate, compared with 24.7 percent in Hopedale. In Sheshatshiu, only 10.7 percent of the respondents had a high school certificate. Only 0.8 percent of those responding in the six North Coast communities and Sheshatshiu held a trades certificate or diploma, and only 0.5 percent held a university degree.

Table 21.1 Education Levels of Respondents to Training Needs Assessment Survey, North Coast Communities, 1997

Education	Hopedale	Makkovik	Nain	Postville	Rigolet	Sheshatshiu	Utshimassits	Total
Less than Grade 7	15	1	16	3	4	4	15	58
Grade 7	14	3	25	0	4	7	6	59
Grade 8	16	7	20	6	14	10	18	91
Grade 9	25	9	24	7	6	22	12	105
Grade 10	20	3	25	4	10	7	18	87
Grade 11	17	4	8	4	5	6	4	48
High School	53	30	48	24	23	7	9	194
Non-University (w/Cert.)	25	14	43	23	8	0	0	113
Non-University (w/o Cert.)	22	8	20	5	7	1	0	65
Trade Cert./Diploma	1	0	0	0	0	0	6	7
University (w/Degree)	0	1	2	1	0	0	0	4
University (w/ Diploma/Cert.)	3	4	4	0	0	0	0	11
University (w/o Degree)	1	3	1	0	0	1	0	6
University (w/o Diploma/Cert.)	3	0	6	1	0	0	0	10
Total:	215	87	242	78	81	65	88	856
Source: Innu Nation and LIA 1997

Nature of Employment

Joachim Nui, Innu elder: "I feel supportive of the project because of employment needs of our young people . . . . There are three things that I think about. I respect wildlife, I respect the Innu and I respect the land that is being destroyed. . . . Some things I do not like, but the people need employment, people need money, we all need money." (Presentation to EIS Panel, Davis Inlet, April 19, 1997.)

Since 1990, the employment situation in the Labrador North Coast has been affected by the collapse of the markets for seal pelts and furs and the collapse of the inshore fishery and, since 1995, the growth in mineral exploration. The fishery is a particularly important source of income because it has been the principal means by which coastal residents qualified for Employment Insurance in winter. In recent years, declines in the fishery and tightening of the qualifying rules have reduced this source of income and increased dependence on social assistance. In Nain, however, labour force participation has increased due to the substantial rise in mineral exploration activity in the area. Increased activity is reflected in the number of claims staked. As Table 21.2 illustrates, from 1990 to 1993 the annual average was 1,708. However, in 1994 20,788 claims were staked and in 1995 the number rose to 230,842. Claims staked have since declined to about 5,633 in 1996 and are forecast at 5,000 in 1997. Estimated employment in mineral exploration has similarly increased from a provincial average of 65 in the 1991-1994 period to 415 in 1995 and 530 in 1996. The additional employment generated on the Labrador North Coast has helped to increase the contribution of wage employment to the overall income base of the area.

Table 21.2 Exploration Activity and Employment Newfoundland and Labrador 1990-1997

	Claims Staked			Estimated Exploration Employment
	Labrador	Newfoundland	Newfoundland and Labrador
1990	1,453	8,968	300
1991	1,985	5,426	75
1992	1,615	3,503	60
1993	1,778	5,177	50
1994	20,788	1,468	75
1995	230,842	17,864	415
1996	5,633	9,666	530
1997^f	5,000	10,000	425
^fforecast Source: Department of Mines and Energy, Government of Newfoundland and Labrador September, 1997

Most North Coast residents assemble a livelihood from a variety of sources, and full-time wage employment is the exception, rather than the rule. There is a high degree of subsistence activity within these North Coast communities. North Coast residents look at work differently than do southern, and especially urban, Canadians. Work does not simply mean having a job. People consider themselves gainfully employed whether they are hunting, fishing, cutting firewood or working for wages. A more complete discussion of subsistence patterns and associated lifestyle is provided in Chapter 20.

One striking feature of northern life is that for most families, subsistence hunting, trapping and fishing activities are a more stable source of income than wage employment. However, it costs money to buy and maintain the boats and snowmobiles required for these activities (see Chapter 20), especially now that people are concentrated in relatively large settlements that cannot be supported by the fish and game in the immediate area. They must live in these settlements to have easy access to services such as schools and clinics as well as to have access to sources of wage employment. This is in strong contrast to the past, when families were either nomadic or isolated and able to follow the food to where it was likely to be abundant.

The people need employment. Our young people are moving away. The fishery is gone and our communities are in a hard spot. (Fishermen's Committee of Postville, quoted in Williamson 1996).

In earlier years, earnings from fur, commercial fishing, and the sale of seal pelts and oil provided the cash required for supporting the subsistence economy. Today, however, trapping is barely viable, the fishery is in severe decline and animal rights protests have largely eliminated the market for seal pelts. As a result, many cannot afford to hunt and are effectively excluded from both the subsistence and wage economies.

In 1991, most North Coast residents who were employed (67.1 percent) worked in jobs classified as Government Services and Other Industries (Appendix 21A, Table 8). Employment in Government Services and Other Industries was highest in Utshimassits (78.9 percent), Makkovik (78.6 percent) and Hopedale (73.7 percent), and lowest in Postville (50.0 percent).

In Sheshatshiu/Mud Lake 76.3 percent of the labour force was employed in the Government and Other Industries Category (Appendix 21A, Table 15). Both here and on the North Coast the proportion was much higher than that for Labrador and the province generally.

In the North Coast communities, the next most common categories of employment were Transportation (12.2 percent), Trade (8.5 percent) and Manufacturing (7.9 percent) industries. In 1991, no residents of Postville, Makkovik or Rigolet were employed in Primary, Construction, Finance, Insurance, or Real Estate Industries. Only Nain and Hopedale had residents employed in Primary Industries and only Nain had residents employed in Finance, Insurance, and Real Estate Industries (Appendix 21A, Table 8).

In Sheshatshiu in 1991, the most common categories of employment, after Government Services and Other Industries, were the Primary and Construction Industries Categories (7.9 percent each) (Appendix 21A, Table 15).

Local Employers

". . . the Labrador Inuit Development Corporation is finally making money. The economic development arm of the Labrador Inuit Association has just come off two successful years, with a surplus of about $2 million." (The Labradorian, May 31, 1997.)

Nain is the largest and busiest North Coast community. LIA has its headquarters in Nain along with a number of its component divisions. These include the Torngasok Cultural Centre, the Mineral Resource office and the Eco-Research office (each of which employs three people). Also based in Nain are the LIDC and the Labrador Inuit Health Commission (LIHC) field office. The LIDC operates an anorthosite (dimension stone) quarry at Ten Mile Bay on Paul Island, east of Nain, which employs 22 people when operating (Luther, G. pers. comm.). Nain has a fish plant which employed about 15 people during the summer of 1996.

Business in Northern Labrador is constrained by the size of the local market. In Nain, there are three retail stores, a bank, a post office, several boarding houses, two snack bars, one bakery, a video store, a skidoo shop, a sportsplex, a hotel, bar, and a gift shop. The mineral exploration boom of the past few years has stimulated some commercial expansion.

Other North Coast communities have fewer business operations. The commercial infrastructure of Sheshatshiu is likewise limited. Of the 155 residents of the community who were employed either on a full or part-time basis in May 1997, 44 percent were employed by the Sheshatshiu Band Council. The other main sources of employment in the community are Peenamin McKenzie School, the Innu Nation, the Shushepishanpin Group Home and the Provincial Department of Human Resources and Development (Sheshatshiu Community Health Office 1997).