Chapter 21 - Employment and Business

21.1.5 Existing Conditions - Other Areas of Newfoundland and Labrador

21.1.5.1 Upper Lake Melville

The Upper Lake Melville area had a population of approximately 10,240 in 1996, compared to 10,050 in 1991 (Appendix 21A, Table 9). This included 8,655 residents in Happy Valley-Goose Bay, 567 in North West River, 941 in Sheshatshiu and 77 in Mud Lake (Statistics Canada 1997).

In 1991, the total labour force of the Upper Lake Melville area was 5,450, comprising 35.9 percent of the total Labrador labour force and 2.0 percent of that of the province. The labour force of Happy Valley-Goose Bay (4,975 persons) was 91.3 percent of that for the Upper Lake Melville area and 32.8 percent of Labrador (Appendix 21A, Table 10).

Of the total Upper Lake Melville labour force in 1991, females accounted for 44 percent. The percentage of females was slightly higher in Happy Valley-Goose Bay than in the other communities of the Upper Lake Melville area and similar to that in Labrador and the province as a whole (Appendix 21A, Table 10).

There have been a number of changes in the economy of Happy Valley-Goose Bay since 1991, but few recent data are available to indicate the effects on the labour force. These changes have been prompted by the boom in mineral exploration activity, changing use of the Canadian Force Base by the allied air forces, and the privatization of some Base support functions. These have been reflected in expanded activity in, for example, transportation, hotels, restaurants, bars, private colleges, environmental services, and other services.

Labour Force Participation

The 1991 labour force participation rate for Happy Valley-Goose Bay was 79.8 percent. This rate was higher than those of the province (61.3 percent) and Labrador (68.8 percent). Sheshatshiu/Mud Lake had the lowest participation rate, at 42.9 percent (Appendix 21A, Table 10).

In each of the Upper Lake Melville communities, the 1991 participation rate was higher for males than for females. These rates are for the most part similar to those for the province, but lower than those for Labrador. Both female and male residents in Happy Valley-Goose Bay were more likely to participate in the labour force than those in the other Upper Lake Melville communities (Appendix 21A, Table 10).

Youth in Happy Valley-Goose Bay (64.3 percent) in 1991 were more likely to participate in the labour force than those in Labrador (50.6 percent) or the province (51.2 percent). Sheshatshiu/Mud Lake had by far the lowest youth participation rate (26.5 percent) in the Upper Lake Melville area (Appendix 21A, Table 10).

Approximately one-half of the employed Happy Valley-Goose Bay labour force (51.1 percent) worked for the full year on a full-time basis in 1990, compared to 43.4 percent of the employed Labrador labour force and 38.1 percent of the employed provincial labour force. Conversely, the percentage of the town's labour force employed for only part of the year or part-time in 1990 was less than that for Labrador and the province (Appendix 21A, Table 10).

Unemployment

Unemployment rates in Upper Lake Melville communities in 1991 were, for the most part, lower than those for Labrador and the province. Happy Valley-Goose Bay, for example, had a rate of 16.3 percent, which was lower than Labrador (22.7 percent) and lower than the provincial rate (27.8 percent). North West River had the lowest rate (15.1 percent) in the Upper Lake Melville area. Only Sheshatshiu/Mud Lake (28.6 percent) had a total rate higher than those for Labrador and the province (Appendix 21A, Table 10).

In 1991, the average youth unemployment rate in the Upper Lake Melville communities (23.1 percent) was lower than that for Labrador (36.0 percent) and lower than that for the province (38.2 percent). Youth in Happy Valley-Goose Bay was more likely to be employed than youth in Sheshatshiu/Mud Lake. Women in the Upper Lake Melville area were less likely to be unemployed than men. This is consistent with the pattern for the province, but contrasts with that for Labrador where the unemployment rate for women (26.9 percent) is higher than that for men (19.7 percent). Women in Upper Lake Melville, especially North West River and Happy Valley-Goose Bay, were more likely to be employed than their counterparts in Labrador and the province as a whole (Appendix 21A, Table 10).

Income

With the exception of Happy Valley-Goose Bay, incomes in the Upper Lake Melville area are low by Labrador and provincial standards; based on the 1991 Census data, incomes are particularly low in Sheshatshiu/Mud Lake.

Average household income in the Upper Lake Melville area ranged from $26,438 (Sheshatshiu/Mud Lake) to $50,614 (Happy Valley-Goose Bay) in 1990. Average household income in all three communities increased from 1985 to 1990, ranging from 17.2 percent (Sheshatshiu/Mud Lake) to 46.1 percent (Happy Valley-Goose Bay). In 1990, average household incomes in Northwest River and Sheshatshiu/Mud Lake were lower than Labrador as a whole ($50,317), while only incomes for Sheshatshiu/Mud Lake were lower than the provincial average ($39,861) (Appendix 21A, Table 11). However, it should be noted again that these figures do not include subsistence activities.

As is shown in Appendix 21A, Table 12, the average and median incomes for all communities in the Upper Lake Melville area, Labrador and the province increased between 1985 and 1990 for both men and women. However, average and median incomes for women are consistently lower than those for men. In 1990, mean incomes in individual communities in the Upper Lake Melville area for males ranged from $13,958 (Sheshatshiu/Mud Lake) to $28,860 (Happy Valley-Goose Bay). Mean female incomes during that year ranged from $9,087 (Sheshatshiu/Mud Lake) to $16,327 (Happy Valley-Goose Bay). Of individuals aged 15 years or older reporting an income in 1990 in the Upper Lake Melville area, 64.2 percent of women, but only 36.5 percent of men, had an average annual income less than $20,000. By contrast, 73.4 percent of females and 40.0 percent of males in Labrador, and 78.1 percent of females and 51.9 percent of males in the province as a whole, had average annual incomes below $20,000 (Appendix 21A, Table 12).

The majority of females in the communities of the Upper Lake Melville area had average incomes of less than $20,000 in 1990 (Appendix 21A, Table 12). A higher percentage of males in the Upper Lake Melville area had average incomes of $20,000 or greater. In Happy Valley-Goose Bay, 66.6 percent of males had average incomes of $20,000 or more compared with 50.0 percent in North West River. However, in Sheshatshiu/Mud Lake only 28.2 percent of males had average incomes of $20,000 or greater in 1990 (Appendix 21A, Table 12).

The average 1990 income for full-time, full-year employment in Happy Valley-Goose Bay ($36,445 for males and $25,247 for females) was lower than that for Labrador ($43,387 and $25,557), but higher than for the province ($36,211 and $23,346) as a whole. Average incomes for part-year or part-time employment in Happy Valley-Goose Bay in 1990 were greater than those for Labrador and the province (Appendix 21A, Table 10).

Between 1985 and 1990 the proportion of employment income increased in the communities of the Upper Lake Melville area and in Labrador as a whole, while it decreased in the province as a whole. Overall, the dependence on government transfer payments decreased while levels for the province remained approximately the same (Appendix 21A, Table 13).

Within the Upper Lake Melville area, people in Happy Valley-Goose Bay and North West River were more likely to earn the greater portion of their annual income from employment. In Happy Valley-Goose Bay, employment income accounted for 90.4 percent of the total income while government transfer payments accounted for approximately 8 percent. Government transfer payments comprised the greatest proportion of annual income in Sheshatshiu/Mud Lake (32.7 percent), which were higher than those for Happy Valley-Goose Bay (7.8 percent), Labrador (10.7 percent) and the Province (21.1 percent).

As of June 26, 1996 there were 881 active Unemployment Insurance claims in Happy Valley-Goose Bay. They accounted for approximately 31 percent of the 2,847 active claims in Labrador as a whole (O'Dell 1996 pers. comm.)

Education and Qualifications

George Rose, graduate of a drilling and blasting course: "I've already taken the small engine repair and heavy equipment operator course and I couldn't get a job. It seems everybody and their dog has small engine repair. I figure I've got to strike it with this program. I can't go back to pumping gas." (The Labradorian, July 7, 1997.)

Of the communities in the Upper Lake Melville area, Happy Valley-Goose Bay has the lowest proportion of those 15 years and over (11.1 percent) who have not completed Grade 9, while Sheshatshiu/Mud Lake show the highest percentage at 40.8. These compare to an overall Labrador value of 16.2 percent and a provincial figure of 20.4 (Appendix 21A, Table 14).

By contrast, all communities have higher than expected numbers of people who have completed trade certificates - Happy Valley-Goose Bay has 4.0 percent, North West River 4.7 percent, Sheshatshiu/Mud Lake 4.1 percent, while the provincial figure is only 2.4 percent. However, other than Happy Valley-Goose Bay (6.4 percent), the proportion of those in other communities with university degrees (6.6 percent) is significantly lower than for the Province as a whole (Appendix 21A, Table 14).

Nature of Employment

As illustrated in Appendix 21A, Table 15, the Government Services and Other Industries sectors are very important to the Upper Lake Melville area, Labrador and the Province as a whole. As of 1991, the majority of the employed labour force in the Upper Lake Melville area (65.5 percent), Happy Valley-Goose Bay (64.7 percent), North West River (73.1 percent), and Sheshatshiu/Mud Lake (76.3 percent) was employed in Government Service and Other Industries. While the percentage of the labour force in this sector remained relatively stable in Happy Valley-Goose Bay between 1986 and 1991, the percentage in the same sector in North West River and Sheshatshiu/Mud Lake increased. Overall, in the Upper Lake Melville area, the dependence on this sector has increased slightly. In 1991, the percentage employed in the sector in the Upper Lake Melville area (65.5 percent) was higher than that for Labrador (44.6 percent) and for the province (43.4 percent).

Trade, Transportation and Construction Industries provided employment for 27.6 percent of the Upper Lake Melville area's employed labour force in 1991, representing a 1.7 percent decrease from 1986. These industries were the second most common area of employment for the four communities in the Upper Lake Melville area. In Sheshatshiu/Mud Lake, a substantial proportion of the employed labour force were in Primary and Manufacturing Industries in 1991 (Appendix 21A, Table 15).

Compared to Labrador and the Province, Upper Lake Melville had a low proportion employed in Primary and Manufacturing Industries. In 1991, 23.9 percent of Labrador's labour force were involved in Primary Industries compared to 3.2 percent of that in Happy Valley-Goose Bay. This reflects the substantial employment effects generated by CFB Goose-Bay. Overall, however, the employment structure of Happy Valley-Goose Bay was less diversified than the province and (to a lesser extent) Labrador.

In 1991, 45.0 percent of Happy Valley-Goose Bay's employed labour force were employed in service and clerical occupations. Construction (9.2 percent), and Managerial, Administrative and Related (7.9 percent) occupations were the next most common. The proportion in Service and Clerical work (25 percent and 20 percent respectively) was higher than for Labrador (16.4 percent and 14.3 percent) and higher than for the province (13.2 percent and 15.5 percent). Overall, the occupational structure of Happy Valley-Goose Bay was less diversified in 1991 than that of the province and Labrador as a whole. In the Upper Lake Melville region as a whole, 43.2 percent of the employed labour force were involved in the Service and Clerical Occupations in 1991 (Appendix 21A, Table 16).

Local Employers

The high percentage of employment in Government Service and Other Industries in Happy Valley-Goose Bay reflects the town's importance as a military base and the regional administrative centre for central, northern and coastal Labrador. The largest employers in the Town and the changes that have occurred in their work force between 1986 and 1992 are illustrated in Table 21.3. The employers listed each had 20 or more employees in 1986; however, by 1992 several had less than 20. As indicated in Table 21.3, in 1992 the largest employers in the Town were the federal and provincial governments.

Federal government departments and agencies employed 826 persons, or 37.8 percent of the total number of persons working for such employers, while provincial government agencies employed 771 persons, or 35.3 percent. Between 1986 and 1992, however, the federal and provincial governments reduced their Happy Valley-Goose Bay work force by 18.8 percent and 18.2 percent, respectively. The Department of National Defence (DND), however, had a large increase in the number of employees (74.2 percent) between 1986 and 1992. Other government departments and agencies experiencing modest increases were Canada Employment and Immigration, Grenfell Regional Health Services, the Paddon Memorial Home, the Labrador Community College and the Labrador Correctional Centre.

CFB Goose Bay generates both direct and indirect employment and expenditures. Of the total 826 federal government employees in 1992, 716 (or 87 percent) were employed by DND, which was the single largest employer in Happy Valley-Goose Bay. Including both civilian and military personnel, it contributed approximately 1,060 jobs and employed approximately 21.3 percent of the town's total labour force. A substantial proportion of the remaining labour force is also dependent upon the Base. The allied forces using the Base provided an additional 381 jobs. As a result, the Base has been directly responsible for a total of 1,441 jobs or approximately 29 percent of Happy Valley-Goose Bay's total labour force (Strategic Concepts Inc. 1994). It has been estimated that between 20 and 30 businesses directly depended upon the Base for 80 to 100 percent of their revenue, and that 40 to 60 percent of the revenue of most businesses in central Labrador was derived from the expenditures by individuals associated with the Base (DND 1994b).

Table 21.3 Major Employers (with 20 or More Employees in 1986) in Happy Valley-Goose Bay 1986 & 1992

Employer	1986	1992	Percent of Total 1992 Employees
Total	2,497	2,185	100.0%
Federal Government
Department of National Defence	411	716	32.8%
Public Works Canada	310	3	0.1%
Transport Canada	143	25	1.1%
Royal Canadian Mounted Police	60	28	1.3%
Canadian Broadcasting Corporation	28	13	0.6%
Canadian Employment and Immigration	23	25	1.1%
Supply and Services Canada	22	2	0.1%
Canada Post	20	14	0.6%
Sub-total	1,017	826	37.8%
Provincial Government
Labrador East Integrated School Board	255	119	5.4%
Grenfell Regional Health Services	147	168	7.7%
Roman Catholic School Board	120	103	4.7%
Paddon Memorial Home	75	84	3.8%
Labrador Community College	52	98	4.5%
Department of Social Services	47	15	0.7%
Forestry and Agriculture	72	38	1.7%
Newfoundland and Labrador Hydro	34	31	1.4%
Labrador Correctional Centre	28	30	1.4%
Department of Works, Services and Transportation	44	23	1.1%
Culture, Recreation and Youth and Municipal Affairs	20	18	0.8%
Other Provincial Departments	49	44	2.0%
Sub-total	943	771	35.3%
Municipal Government and Private Sector
Woodward's Group of Companies	120	178	8.1%
Labrador Lumber and Plywood	75	0	0%
Canada Catering	50	53	2.4%
Newfoundland Telephone Company	45	25	1.1%
Hudson's Bay Company/Northern	42	52	2.4%
Town of Happy Valley-Goose Bay	40	42	1.9%
Labrador Airways/Aviation	69	152	7.0%
Burden's Janitorial Services	35	19	0.9%
Warr's Pharmacy	31	28	1.3%
Terrington Co-Op	30	39	1.8%
Sub-Total	537	588	26.9%
Source: DND 1994b

The Town's municipal government and private sector firms (with 20 or more employees in 1986) employed 588 persons in 1992 with the municipal government employing 42. While the majority of federal and provincial government employers (with 20 or more employees in 1986) reduced their work force in Happy Valley-Goose Bay between 1986 and 1992, the municipal government and the majority of private sector businesses increased their work force (Table 21.3).

The private sector businesses in Happy Valley-Goose Bay reflect the importance of the service industry to the town and the town's reliance on the Base for indirect employment and revenue generation. It has been estimated that the indirect and induced local economic impact of the Base results in 790 person-years of employment. The retail sector is thought to benefit most from the Base, with an estimated 343 person-years of employment (Strategic Concepts Inc. 1994).

The majority of the private sector firms in Happy Valley-Goose Bay are involved in retailing or service activity. Happy Valley-Goose Bay has approximately 132 retail and 8 wholesale companies (DND 1994b). The Woodward's Group of Companies, which provides fuel and supplies to DND and the allied countries, was the largest private sector employer in 1992. It employed approximately 178 persons or 8.1 percent of the total for employers with 20 or more employees in 1986 (Table 21.3).

Since 1995, Happy Valley-Goose Bay has experienced an increase in the level of business activity as a result of the surge in mineral exploration in Labrador. This activity has placed an increased demand on air transportation, accommodations, restaurants, and other services in the Upper Lake Melville area. In 1996, there were an estimated 500 people employed directly in mineral exploration and an estimated $76 million in exploration expenditures in Labrador (See Table 22.2).

The province's tourism industry has experienced some growth in recent years, including wilderness and adventure tourism, which have increased in Labrador (DND 1994b). One of Labrador's largest wilderness tour operators is based in the Upper Lake Melville area in North West River. Overall, there are some 46 outfitters in Labrador that offer fishing and hunting trips (E. Best pers. comm.). They employ between 300 and 500 people seasonally and create indirect business for hotels, food establishments, transportation, and the retail sector (DND 1994a).

21.1.5.2 Eastern Labrador

The total population for this region in 1996 was 2,876, which shows a small decrease since 1986 (3.8 percent). Only Charlottetown, with an increase of 44 people (15.4 percent) showed any significant increase in population between 1986 and 1996 (Appendix 21A, Table 17).

Isolation, low population and limited infrastructure place severe constraints on economic development in this region of Labrador. Like the North Coast of Labrador, it has no highway system. Except for a short gravel road between Lodge Bay and Mary's Harbour, the only roads in the district are those within the communities themselves. This leaves the region dependent on the service of coastal boats, operating roughly from June to November, and on bush planes operating year-round from Goose Bay and St. Anthony. In winter and spring, residents travel within and between their communities by snowmobile.

This area has long been almost entirely dependent on the inshore fishery for earned income. Cod catches fell dramatically in the Cartwright area in the 1960s and have never recovered. Elsewhere in the Labrador Straits, the inshore cod catch partially recovered after the introduction of the 200 mile limit reduced overfishing by foreign trawlers. However, the recovery was brief. By the mid-to-late 1980s, inshore catches were falling badly again, until the moratorium in 1992 put the entire cod fishery on hold. Atlantic salmon, the only other species for which most coastal fishers had a market, also went into a severe decline. However, a thriving crab fishery has developed in recent years, and there has been a modest expansion in alternative species, including scallop and whelk.

Labour Force Participation

With the exception of Mary's Harbour (43.3 percent) and the unincorporated areas of Subdivision B (43.6 percent), labour force participation in 1991 was significantly higher than for the province as a whole and comparable to, if not higher than, Labrador as a whole. Similar patterns are shown for the youth of the area (Appendix 21A, Table 18).

Unemployment

In 1991, the overall unemployment rate in Eastern Labrador was 63.4 percent, compared to 27.8 percent for the province as a whole. The rate was highest in the age group 15-24, where it was more than 66 percent, compared to 38.2 percent for the province as a whole (Appendix 21A, Table 18).

Income

Average household incomes in Eastern Labrador in 1990 ranged between a low of $26,732 in Cartwright to a high of $38,523 in St. Lewis, compared to an average of $39,861 for the province as a whole and $50,317 for Labrador (Appendix 21A, Table 19). Average incomes for males in Eastern Labrador ranged from $12,368 in Port Hope Simpson to $16,512 in Mary's Harbour, while the average income earned by females ranged from $8,266 in Subdivision B to $11,536 in St. Lewis (Appendix 21A, Table 20).

In 1990, the proportion of total income from employment in Eastern Labrador ranged from 50.8 percent in Port Hope Simpson to 68.7 percent in St. Lewis. The rate for the province as a whole was 72.8 percent in 1990 (Appendix 21A, Table 21).

Transfer payments made up a significant proportion of the total income of residents of the region in 1990, ranging from 30.3 percent in St. Lewis to 48.2 percent in Port Hope Simpson (Appendix 21A, Table 21).

It must be stressed, however, that any such calculation ignores the portion of livelihood which residents draw directly from the surrounding land¾ the "country food" they harvest in subsistence hunting and fishing, and the firewood they cut and burn instead of buying imported oil. There are no data on the scale of the contribution these activities make to family incomes in Eastern Labrador. However, analysis of this issue for the North Coast suggests that roughly a third of the income in that region derives from activity of this sort (Chapter 22). So, in fact, the "total income" of which transfer payments make up a significant portion is only the cash portion of income; the contribution of the informal economy does not appear in these calculations and may be considerable.

Education and Qualifications

Kirby Lethbridge: "Up till 1968...less than 10 percent of the teachers in our schools...had one year of university. The rest of them had Grade 11. They were good enough to send up here." (Submission to EIS Panel, Cartwright, May 6, 1997.)

According to 1991 census data, education levels are particularly low in this part of the Province. Of 2,185 individuals aged 15 and over, more than 40 percent had less than a Grade 9 education (Appendix 21A, Tables 22 and 23). This was nearly double the level for the Province as a whole. On the other hand, visitors to the region often remark on how versatile and resourceful many residents are. Many residents build their own houses and boats, and do their own wiring, plumbing and engine repairs. Factors such as isolation, low incomes and limited access to services have fostered personal resourcefulness; people do it themselves or do without.

A practical orientation is also reflected in the proportion of residents with technical training. In 1991, 7.8 percent of the population aged 15 years and over had a trade certificate or diploma. This was more than triple the level of trades training in the province as a whole, which was 2.4 percent. On the other hand, only three percent had a university degree, compared to 5.2 percent for the province (Appendix 21A, Tables 22 and 23).

Nature of Employment

Census data from 1991 indicate a labour force of 1,320 workers in this region. In a breakdown of the labour force by Industry Division, 485 of these were identified within the category "Fishing and Trapping". This represented 36.7 percent of the labour force that year. The fur industry has been a negligible part of the coastal economy for many years, so it may be assumed that most of these individuals were fishers. The second largest category of employment, Manufacturing, involved 155 individuals or 11.7 percent of the labour force. Apart from handicrafts, most of these workers would have been involved in processing fish. Government Services employed 9.1 percent and Education 8.3 percent. All other industry sectors combined employed fewer than 7 percent (Appendix 21A, Table 24).

Like the residents of Northern Labrador, people in this region derive a considerable part of their livelihood from their surroundings, in the form of wild game, fish, berries and firewood. None of this enters into any official calculations of family income, and no systematic study of harvest levels in this area is available. Unlike residents of Nain and Utshimassits, the people of Eastern Labrador do not have access to a large caribou population in the immediate area. There is a small caribou herd in the Mealy Mountains but no hunting is allowed. There is also a small moose population in the Port Hope Simpson and Charlottetown areas, but only a few licences are issued. Lack of access to major big game populations probably means the total harvest of wild meat is lower in this region than in northern Labrador, though some people do travel to the North Coast by snowmobile to harvest caribou. However, seals, rabbits, partridge and trout are available in season, and berries are extremely abundant on the coast. This country food is nutritionally and culturally important, and provides a measure of independence for families on low income.

Because the fishery is the dominant industry in this region, year-round jobs are limited. In 1990, for example, only 35 males and 30 females in Cartwright had year-round, full-time jobs, and this was more than in the other communities of the region. The average full-time employment incomes of these men and women were $27,065 and $22,577 respectively. Another 180 men and 110 women in Cartwright worked part of the year or part-time, and earned an average of $6,587 and $4,393 respectively. In Charlottetown, only ten men and ten women had year-round, full-time work in 1990, earning an average of $25,000 and $18,167 respectively. Another 85 men and 75 women in that community had only seasonal or part-time work that year (Statistics Canada 1994).

Since the 1991 census, the cod fishery has shut down and the salmon fishery has been in severe decline, so employment in these traditional fisheries has been sharply curtailed. However, processing crab is labour-intensive; in the three communities with crab plants, this species has more than compensated for the loss of cod, at least in terms of the jobs on shore. Communities left out of this diversification, particularly Black Tickle, have been very hard hit.

In Eastern Labrador, 460 people were eligible for The Atlantic Groundfish Strategy (TAGS) program as of 1997, out of an original total of 610. Of the 150 who were no longer in the program, 130 had exhausted their claim and 20 had left the programme. The majority (450) of those qualifying for TAGS were harvesters, while 150 were processors (Department of Finance 1997). The TAGS program is scheduled to end in 1998.

Local Employers

By far the largest employer in this area is the fishery, despite the collapse of cod and continued problems in the salmon fishery. The Labrador Fishermen's Union Shrimp Company operates crab plants in Cartwright and Mary's Harbour, and Coastal Fisheries operates a crab plant in St. Lewis. These three facilities process about six million pounds of crab, divided more or less equally between them. They employ from 100 to 140 workers each, generally from early July into September. (H. Best pers. comm.). The crab quota in this area is divided among 35 licence holders. Six crab boats are from Goose Bay, Rigolet and Makkovik, and two are from the Straits area; the remainder are based in Eastern Labrador. With 4 to 5 crew on each vessel, the crab fishery employs approximately 150 fishers, as well as 350 to 400 plant workers during the fishing season (Rumbolt, B. pers. comm.). These numbers make the crab fishery by far the biggest employer in the region, but the work is highly seasonal.

There are few jobs in resource industries other than fishing, except for small scale logging operations in Port Hope Simpson and Charlottetown. Apart from this, the service sector employs a few people in each community in schools, nursing stations, retail shops and regional offices of federal and provincial agencies. In the Mary's Harbour area, about 25 carpenters have been seasonally employed in recent years in the reconstruction of the historic Battle Harbour site, but this is largely complete (Rumbolt, B. pers. comm.).

21.1.5.3 Labrador Straits

The total population of the Labrador Straits in 1996 was 2,062, down 5.3 percent from 2,177 in 1991. Of the six individual communities and one subdivision in the region, all lost population during this period, with the exception of L'Anse au Clair (Appendix 21A, Table 25).

This area faces Newfoundland across the narrow Strait of Belle Isle. Communities in the area are connected by road, and a short ferry ride allows access to the Island road network. Six incorporated communities and one unincorporated village are dispersed along a paved highway running from the Quebec border to Red Bay, a stretch of about 80 km. The highway extends roughly an equal distance into Quebec, to communities at the eastern end of the Lower North Shore, giving Labrador residents access to services on the Quebec side. Through the ferry service, which operates in the ice-free months, people in the area are more integrated into the economy of Newfoundland, particularly the Great Northern Peninsula and the Deer Lake and Corner Brook areas, than Labrador coastal residents farther north.

The highway has also helped to integrate the region itself. With the exception of Red Bay, none of the communities is more than 12 km from its neighbors, so a paved highway has served to expand both the market and the labour shed for individual businesses. Interruption of the ferry service in winter and spring, and highway access to adjacent communities in Quebec, have encouraged residents on both sides of the border to share their resources and facilities. Residents on the Labrador side, for example, use the ferry terminal, the commercial airfield and the hospital at Blanc Sablon, Quebec. Many cod fishermen from the Labrador side have long fished in the Blanc Sablon area for part of the season, while Quebec residents traditionally harvested lumber from the valley of the Pinware River.

The region is still heavily dependent on the fishery, and has suffered during the cod moratorium. However, the diversification fostered by the highway and the closer connections to Newfoundland has given this area a more vigorous economy than the rest of the Labrador coast. Except for Red Bay, the cod fishery in this region relies on cod stocks in the Gulf of St. Lawrence, which did not collapse as disastrously as Northern cod in the area adjacent to Eastern Labrador. In 1997, a limited hook and line fishery was permitted in the Labrador Straits for the first time since 1992, and catches have been reported as good.

Despite the stronger economy, this region has suffered more population decline since 1986 than has Eastern Labrador. This may reflect both higher education levels, which enables residents to seek work elsewhere when times are tough at home, and the greater integration of this region with the provincial economy. Curiously, population decline in the Labrador Straits was more severe from 1986 to 1991, before the cod moratorium, than it was after (Appendix 21A Table 25). This can be attributed to the severity of the fisheries decline which led to the moratorium. During this period, many people moved to Goose Bay seeking jobs at the Base. The cod moratorium virtually halted fishing in the area at first, but soon prompted more attention to previously-neglected species. The compensation payments which resulted from the moratorium gave many fishers more income stability than they had before, which probably slowed the out-migration (S. Flynn pers. comm.).

Labour Force

Labour force participation rates in 1991 ranged from 53.1 percent in West St. Modeste to 75 percent in the unincorporated area of Subdivision A. In the largest communities of L'Anse au Loup (72.2 percent) and Forteau (70.3 percent), participation was higher than for Labrador (68.8 percent) or the province as a whole (61.3 percent). Participation rates among the younger members of the labour force (age group 15-24) was generally lower than the Labrador or provincial rates (Appendix 21A, Table 26).

Unemployment

In 1991, the unemployment rate was 57.5 percent, compared to 27.8 percent for the province as a whole. The rate was highest in the age group 15-24, where it was more than 59 percent, compared to 38.2 percent for the province as a whole (Appendix 21A, Table 26).

Income

Average household incomes in 1990 ranged from a low of $28,024 in Red Bay to a high of $37,910 in L'Anse au Loup, compared to an average of $39,861 for the province as a whole and $50,317 for Labrador (Appendix 21A, Table 27). Average income for males in 1990 ranged from $14,396 (Red Bay) to $19,582 (L'Anse au Loup), while average income for females ranged from $8,322 (Red Bay) to $12,119 (Forteau) (Appendix 21A, Table 28). In 1990, the proportion of total income from employment income ranged between 46.2 percent in Red Bay and 67.8 percent in L'Anse au Loup, compared to a provincial rate of 72.8 percent. (Appendix 21A, Table 21).

Education and Qualifications

According to 1991 census data, 28.6 percent of the people in this area aged 15 and over had less than a Grade 9 education, compared to 20.4 percent for the province as a whole. As in Eastern Labrador, the proportion with a university degree was lower than the provincial average (4.6 percent compared to 5.2 percent), but the proportion with a trade certificate or diploma was higher (3.0 percent compared to 2.4 percent) (Appendix 21A, Tables 22 and 23). Again, as in Eastern Labrador, isolation has encouraged self-sufficiency and versatility, particularly in the older generation. However, the economic integration resulting from the highway has fostered more specialization than is possible in a small, isolated village. Access to repair shops, a bakery, woodworking shops, dress shops and so forth removes some of the need for most people to be skilled in these areas.

Nature of Employment

Census data from 1991 indicate a labour force of 1,095 workers aged 15 and over in this region. In a breakdown of the labour force by Industry Division, 120 of these were identified within the "Fishing and Trapping" category. This represented approximately 11 percent of the labour force that year. There is now very little trapping in the Straits area, so most of these individuals were fishers. The largest category of employment, Manufacturing, involved 200 individuals or 18.3 percent of the labour force. Nearly all of these would have been involved in processing fish. Government Services employed 14.6 percent of the total labour force in 1991, and Retail Trade, 9.6 percent (Appendix 21A, Table 29).

Local Employers

The cod fishery was shut down from 1992 to 1997. However, a fish plant at L'Anse au Loup operated by the Labrador Fishermen's Union Shrimp Company has used the revenue from offshore shrimp catches to diversify the inshore fishery and maximize the processing jobs which result. The plant has processed Russian cod and (in 1997) local catches of cod, plus scallops, turbot, whelks, mackerel, grenadier, flounder, haddock, pollock and halibut. Many of these are taken chiefly as bycatch in the turbot fishery and were formerly discarded. One large, locally-owned boat and a Nova Scotia boat have been fishing for turbot off northern Labrador, bringing back from 120-200,000 pounds a trip. Small local stocks of scallop in the Strait of Belle Isle support about 12 local boats with a crew of four each. The boats have a quota of 800 lbs/week and usually fill it in two or three days. This diversification in the fishery has added greatly to employment in the area. In 1997 the plant employed two shifts of about 70 from early June through September (Hancock, R. pers. comm.). The plant is by far the single largest employer in the area.

After the fishery, the largest employer is the tourism sector, which employs an estimated 200 people between June and September (S. Flynn pers. comm). The region has been successful in marketing its cultural heritage, with an annual folk festival and international recognition of the historic importance of Basques whaling from the port of Red Bay in the 16^th century. The preservation of physical evidence of this activity, including a galleon sunk in Red Bay harbour and the remains of a whale oil factory on Saddle Island, have led to its designation as a World Heritage Site. The federal department, Heritage Canada, is constructing an interpretation centre in Red Bay, which will add to its ability to attract visitors.

The attractions of the area, and the fact that it is the only part of the Labrador coast accessible by road, currently bring about 10,000 visitors a year. Roughly 60 percent of these people arrive on tour buses and stay overnight. The tour bus business has been growing steadily, encouraging the development of food and lodging services. The Northern Light Inn at L'Anse au Clair, the largest facility in the area, has 35 units and is building 20 more (Goudie, B. pers. comm.). In addition, there are housekeeping units and bed and breakfast services in Forteau, L'Anse au Loup, West St. Modeste and Red Bay, and sport fishing lodges on the Forteau and Pinware Rivers.

The region has seen a considerable expansion in the diversity of small business in recent years. Government encouragement and assistance have fostered the creation of 35 new businesses in the last five years, 32 of which are still in operation (Hancock, R. pers. comm.). The new businesses, the majority of them launched by women, include a regional bakery, a dress and gown shop, a gift and design shop, a desktop publishing and design shop and a woodworking business.

The presence of a locally-owned fish plant and a credit union have undoubtedly helped to boost investment and job creation in the area. Freed of the need to make profits for distant shareholders, both can afford to put a higher priority on job creation and local benefits. The new gift and design shop in Red Bay, for example, recently got an order for 20,000 cotton bags for shipping scallops from the plant in L'Anse au Loup.

In The Labrador Straits, 260 people were eligible for the TAGS program as of 1997 out of an original total of 360. Of the 100 who were no longer in the program, 70 had exhausted their claim and 30 had left the programme. The majority (170) of those qualifying for TAGS were harvesters, while 150 were processors (Department of Finance, 1997).

21.1.5.4 Western Labrador

The population of Western Labrador in 1996 was 11,190, down 8.0 percent from 1986. Labrador City showed an increase in population in 1991 over 1986 (8,664 to 9,061), but overall the population of the region has declined since 1986 (Appendix 21A, Table 30).

This region, a world apart from coastal Labrador, contains three of the most affluent communities in the province. All were built as company towns to house the workers employed in large resource projects in the northern wilderness. Labrador City, incorporated in 1961, houses the employees of the Iron Ore Company of Canada (IOCC) and their families, and the businesses which serve this community. Wabush, incorporated in 1967, is the home of Wabush Mines. The towns are just six kilometres apart. Between them, these corporations annually mine about 20 million tonnes of ore, which results in half of the iron produced in Canada. Churchill Falls (the only community in census Subdivision D) is an unincorporated community housing the workers and the families of workers of the Churchill Falls (Labrador) Corporation, (CF(L) Co.), which operates the huge hydro-electric complex on the Churchill River.

A railway built to haul ore concentrate from this region to a shipping terminal at Sept Iles, Quebec, also carries incoming freight. Churchill Falls is connected to this railway by a well-maintained gravel road. Initially the railway moved most of the freight in the region, except for a small volume transported by air. In the 1980s, however, a chain of roads to mining and hydro projects in northeastern Quebec reached Fermont, just across the border from Labrador. This was gradually upgraded, and later extended to Churchill Falls and now Happy Valley-Goose Bay, so that the region is now linked by an all-weather gravel road to Baie Comeau, Quebec, and from there to the North American highway system.

Labour Force

Labour force participation rates in the region are high (70.1 percent), ranging from 83.3 percent in the unincorporated Subdivision D (Churchill Falls) to 68.9 percent in Labrador City. These rates influence the overall rate for Labrador (68.8 percent) which is higher than that for the province as a whole (61.3 percent). Participation rates among younger people (15-24), however, are lower in Labrador City and Wabush than in Labrador and the province as a whole (Appendix 21A, Table 31).

Unemployment

In 1991, the unemployment rate in Western Labrador was 13.8 percent, compared to 22.7 percent for Labrador and 27.8 percent for the province as a whole. The rate was highest in the age group 15-24, where it was more than 34 percent, compared to 38.2 percent for the province as a whole (Appendix 21A, Table 31). Most of the unemployed are students and women.

In September, 1997, there were 41 able-bodied people on social assistance, a rate described as "fairly typical" for that season (Whalen, J. pers. comm.). Some of these people have trades certificates, and came to the area looking for work.

In Western Labrador, as of 1997, 10 people were eligible for the TAGS program. These 10 recipients were processors and are scheduled to exhaust their TAGS benefits in 1998 (Department of Finance, 1997).

Income

Average household incomes in Western Labrador in 1990 ranged from a low of $61,115 in Labrador City to a high of $66,029 in Wabush, compared to an average of $39,861 for the province as a whole and $50,317 for Labrador (Appendix 21A, Table 32). Average incomes for males in Western Labrador ranged from $40,590 in Churchill Falls to $42,967 in Labrador City, while average incomes for females ranged from $14,890 in Wabush to $17,524 in Churchill Falls (Appendix 21A, Table 33).

However, these income figures, the highest in the province, obscure a disparity in both the job opportunities and the average earnings of men and women in this area. In Labrador City, for example, the average employment income of the 1,875 males who worked full-time all year was $51,627, or 94 percent higher than the employment income of the 720 females with year-round, full-time work. The disparity is even more pronounced among those who worked part of the year or part-time. Men in this group earned an average of $25,790, or 187 percent more than women in the same category (Statistics Canada, 1994).

The very low levels of unemployment in this region are apparent in the rates of total income derived from employment in 1990. The lowest proportion of employment income as a percentage of total income was in Labrador City, at 92.5 percent, compared to a provincial average of 72.8 percent (Appendix 21A, Table 21).

Education and Qualifications

According to the 1991 census, only 5 percent of the population over age 15 in Western Labrador have less than a Grade 9 education. This percentage is less than a quarter of the rate for the same group in the province as a whole. A substantially higher proportion hold a trade certificate or diploma (3.4 percent) or university degree (6.6 percent) than the provincial average (2.4 percent and 5.2 percent respectively) (Appendix 21A, Tables 22 and 23).

Nature of Employment / Local Employers

The two mining companies and the hydro corporation overwhelmingly dominate the job markets in their communities. Statistics Canada data show, for example, that in 1991 45.8 percent of the workers over age 15 in Labrador City and Wabush are employed in mining. No other category exceeds 12 percent (Appendix 21A, Table 34). Some, like construction, and Transportation and Storage, are directly involved in supporting the mine activity; others, like Education, Health and Social Services, and Communications, support it indirectly.

In Churchill Falls, a single employer dominates the local job market even more. In 1991, sixty-six percent of the labour force there were employed in the Communication and Other Utilities category. Except for a handful serving local telephone and broadcast facilities, all are employees of the Churchill Falls (Labrador) Corporation. Another six percent of workers are employed in Health and Social Services. No other individual sector employs more than five percent of the local labour force (Appendix 21A, Table 34).

21.1.5.5 Labrador

The population of Labrador as a whole was 29,190 in 1996, a decrease of 3.9 percent since the 1991 census. In 1996, the population of Labrador represented 5.3 percent of the total population of the Province (Appendix 21A, Table 9).

In 1991, the labour force of Labrador was 15,160 persons, comprising 5.7 percent of the total for the Province. Females accounted for 42.5 percent of the labour force while males accounted for 57.5 percent (Appendix 21A, Table 10).

Labour Force Participation

The labour force participation rate for Labrador in 1991 was 68.8 percent, which was higher than that of the Province as a whole (61.3 percent) (Appendix 21A, Table 10). Within Labrador, the participation rate for women and men was 60.4 percent and 76.6 percent, respectively. Of the employed labour force in Labrador, 43.4 percent worked for the full year on a full-time basis in 1990, while only 38.1 percent of the provincial labour force did so (Appendix 21A, Table 10). This represents a potentially larger surplus labour capacity in Labrador as compared to the Island.

Unemployment

In 1991, the unemployment rate in Labrador (22.7 percent) was lower than that for the province as a whole (27.8 percent). Women (26.9 percent) were more likely to be unemployed than men (19.7 percent) in Labrador (Appendix 21A, Table 10).

Income

In 1990, the average household income in Labrador ($50,317) was approximately 26 percent greater than that in the province as a whole ($39,861) (Appendix 21A, Table 11).

In 1990, the average employment income in Labrador was $30,226 for men and $14,305 for women (Appendix 21A, Table 12). In both cases these values were higher than those for the province as a whole. Of those males aged 15 years and older in Labrador reporting an income in 1990, 40 percent had an average annual income of less than $20,000 compared to 51.9 percent for the province as a whole. Of those females aged 15 years and older in Labrador reporting an income in 1990, 73.4 percent had an average annual income of less than $20,000 compared to 78.1 percent for the province (Appendix 21A, Table 12).

In Labrador, employment income accounted for 87.1 percent of the total income in 1990 while government transfer payments accounted for 10.7 percent. By contrast, government transfer payments accounted for a higher percentage of total income at the provincial level (21.1 percent) (Appendix 21A, Table 13).

Education and Qualifications

Data from the 1991 census show that, in most respects, Labradorians have higher levels of education and qualifications than the residents of the province as a whole. The proportion of the total population of Labrador aged 15 years and over with less than Grade 9 in 1991 was 16.2 percent (Newfoundland, 20.4); 3.9 percent had a trades certificate or diploma (Newfoundland 2.4 percent); and 5.0 percent had a university degree (Newfoundland 5.2 percent) (Appendix 21A, Table 22).

Nature of Employment

The importance of the tertiary (services) sector to Labrador, as well as to other areas of the Province is illustrated in Appendix 21A, Table 15. In 1991, the majority of the labour force in Labrador (67.5 percent) were in tertiary industries. In Labrador, 44.6 percent of the employed labour force was employed in the Government Service and Other Industries sectors, 12.9 percent in Trade Industries, and 1.8 percent Finance, Insurance and Real Estate Industries. In 1991, Primary Industries such as agriculture, fishing and trapping accounted for the second highest proportion of the employed labour force in Labrador (23.9 percent) (Appendix 21A, Table 15).

In terms of classification of occupation, most Labrador workers were employed in the Service Occupations category (16.4 percent) in 1991, while Clerical and Related occupations employed the most workers in the province as a whole (15.5 percent) (Appendix 21A, Table 16).

Local Employers

As previously discussed, the western portion of Labrador is home to three major employers: Iron Ore Company of Canada, Wabush Mines, and the Churchill Falls (Labrador) Corporation. IOCC is the largest mining operation in the province. As a result of the surge in mineral exploration initiated by the Voisey's Bay mineral discovery, demand for air transportation, accommodations, restaurants, and other services in Labrador as a whole has increased, resulting in the creation of new local companies.

21.1.5.6 St. John's

The population of the St. John's Census Metropolitan Area (CMA) in 1996 was 174,051, compared to 171,859 in 1991, a 1.3 percent increase. This represents 31.5 percent of the total population (551,792) of the province in 1996 (Statistics Canada 1992; 1997).

In 1991, the labour force of the St. John's CMA was 86,330 persons, comprising 33.4 percent of the total labour force for the Province (Appendix 21A, Table 35). Of the CMA's total labour force, 60.4 percent (or 52,165 persons) lived within the City of St. John's in 1991 (Appendix 21A, Table 37).

Labour Force Participation

The labour force participation rate for the St. John's CMA in 1991 was 67.4 percent (Appendix 21A, Table 35), which was higher than the provincial rate of 61.3 percent, but lower than that for Happy Valley-Goose Bay (79.8 percent) (Appendix 21A, Table 10). Within the St. John's CMA, the rate for women and men were 60.7 percent and 74.7 percent, respectively. These St. John's CMA rates were lower than those for Happy Valley-Goose Bay, but higher than those for the Upper Lake Melville area as a whole (Appendix 21A, Tables 35 and 10).

The majority of the employed labour force of the St. John's CMA (52.8 percent) worked for the full year on a full-time basis in 1990, while only 38.1 percent of the provincial labour force and 43.4 percent of that in Labrador did so (Appendix 21A, Tables 35 and 10). Only 47.2 percent of the St. John's CMA labour force worked part of the year or part-time during 1990, while 61.9 percent of the provincial labour force worked part of the year or part-time in the same year (Appendix 21A, Table 35).

Unemployment

In 1991, the unemployment rate in the St. John's CMA was 16.1 percent, comparable to the 16.3 percent rate in Happy Valley-Goose Bay but lower than that for the province (27.8 percent) and Labrador (22.7 percent) (Appendix 21A, Tables 35 and 10). Females, males and youth in St. John's were more likely to be employed than their counterparts elsewhere in the province (Appendix 21A,Table 35).

Income

In 1990, the average individual income in the St. John's CMA was $22,393, 21.1 percent higher than the average for the province ($18,494) (Appendix 21A, Table 36). Of those individuals aged 15 years and older in the St. John's CMA reporting an income in 1990, 55.2 percent had an average annual income less than $20,000 compared to 64.3 percent for the province (Appendix 21A, Table 36).

The average income for both full-time, full-year employment and part year or part-time employment was greater for the St. John's CMA than for the province as a whole in 1990 (Appendix 21A, Table 35). In the St. John's CMA, employment income accounted for 79.0 percent of the total income in 1990 while government transfer payments accounted for 13.1 percent. In contrast, government transfer payments accounted for a higher percentage of total income at the provincial level (Appendix 21A, Table 36).

Nature of Employment

The importance of the tertiary sector to the St. John's CMA, as well as to the City of St. John's and the province as a whole is illustrated in Appendix 21A, Table 37. In 1991, the majority of the labour force in the CMA (85.9 percent), City (89.0 percent) and province (71.0 percent) were involved in tertiary industries. In the CMA, 36.8 percent of the employed labour force was employed in the Government, Education, and Health and Social Services sectors. The situation was similar for the City, where 39.5 percent of the employed labour force were employed in these sectors. This high percentage reflects St. John's role as the provincial capital. In 1991, Retail Trade accounted for the second highest proportion of the employed labour force in the St. John's CMA and the City (13.6 percent for each). In contrast with the province as a whole, a substantially lower proportion of the CMA's employed labour force was involved in the primary and secondary sectors (Appendix 21A, Table 37).

In terms of classification of occupation, most workers in the St. John's CMA, the City and the Province in 1991 were employed in Clerical and Related Occupations, Service, and Managerial and Administrative Occupations (Appendix 21A, Table 38). Almost half the CMA's (46.2 percent) and City's (47.2 percent) labour force were in these three occupational categories. In comparison, the proportion of the provincial labour force in these occupations was approximately 10 percent lower than in the St. John's area. At the provincial level, a larger proportion of the labour force is involved in the primary and secondary sectors. This reflects the St. John's area's role as the province's main government, administrative, trade, financial and service centre. Overall, the provincial occupational structure is more diversified than that of the City and the St. John's CMA, but it is also more vulnerable to fluctuations in activity in the resource industries.

Local Employers

The five most common types of businesses in the St. John's area in 1993 were offices, retail stores, convenience stores, clinics and services, both in terms of the number of establishments and number of employees. In that year there were a total of 2,028 establishments with a total of 18,445 full and part-time employees. Within this group, the office category accounted for 44.6 percent (or 905) of the business offices (e.g., general business, professional, technical and financial services) and a total of 10,793 employees (Baker, G. pers. comm.).

21.1.5.7 The Province

A declining birth rate and poor economic conditions resulting in a significant increase in out-migration, resulted in a decline in the provincial population of 2.9 percent between 1991 and 1996 (Appendix 21A, Table 9).

As has been discussed previously, the labour force participation rate for the province of Newfoundland and Labrador in 1991 was lower than that for Labrador, Happy Valley-Goose Bay and the St. John's CMA. The overall unemployment rate for the province is higher than those for Labrador, Happy Valley-Goose Bay and the St. John's CMA (Appendix 21A Tables 10 and 35).

The majority of the employed labour force in the province (61.9 percent) in 1990 received income through work carried out over part of the year or on a part-time basis. Only 38.1 percent of the province's employed labour force worked the full year on a full-time basis in 1990 (Appendix 21A, Table 35).

In 1991 the majority of the provincial labour force was employed in the provision of goods and services (71.0 percent). Within this tertiary sector, the largest number (29.3 percent) was employed in the Government Services, Education, and Health and Social Services sectors. The Retail Trade sector comprised 13.5 percent of the labour force. Only a small proportion of the province's labour force was in primary and secondary industries, with most employed in Manufacturing (13.5 percent) (Appendix 21A, Table 37).

In terms of occupational categories, a significant proportion of the labour force in the province was employed in Clerical (15.5 percent) and Service occupations (13.2 percent) in 1991. Other common occupations were Managerial and Administrative (8.5 percent), Construction (7.9 percent), Processing (7.8 percent) and Sales (7.8 percent) (Appendix 21A, Table 38).

21.1.6 Likely Future Conditions

21.1.6.1 Labrador North Coast

Without the Project, the North Coast would probably experience a continuation of past trends of declining employment and business activity. While current and future projects (see Section 21.2.2.1 for a description of these projects) may slow the rate of unemployment and declining business activity, the relatively short-term nature of these (primarily construction) projects is unlikely to provide long-term stable employment or business opportunities. High birth rates and the large number of children under the age of 15 will mean a continuing increase in the labour force and demands for employment which are unlikely to be met.

21.1.6.2 Other Areas of Newfoundland and Labrador

Upper Lake Melville

Without the Project, the Upper Lake Melville area would probably experience declines in employment and business activity. Any future layoffs at CFB Goose Bay, or further cutbacks and downsizing of government services and transfers because of fiscal restraint policies would have a negative effect on employment in the area. While exploration activity and related employment and business activity in the Happy Valley-Goose Bay area has been high, this trend is not expected to continue without the Project. Offsetting these negative changes are some prospects associated with the development of the Trans-Labrador Highway, possible timber harvesting and longer term prospects such as the development of the Lower Churchill.

Eastern Labrador

The fishery in this region has suffered considerably, tempered only by growth in the crab fishery. The future of the area will depend on what income support measures are put in place when the TAGS program runs out, how quickly government proceeds with fulfilling its commitment to build the southern portion of the Trans-Labrador Highway, and what economic growth results from this development. The road will probably stem the population decline of communities with a direct connection to it (Lodge Bay, Mary's Harbour, Port Hope Simpson, Charlottetown and Cartwright), but may accelerate the decline of communities it bypasses (i.e., those on the outer edge of the coast: St. Lewis, William's Harbour, Pinsent's Arm, Norman Bay and Black Tickle).

Richard Budgell: "Labradorians have shown themselves throughout their history to be highly adaptable; one cannot survive in this kind of place without being so. We are not traditionally people who have been resistant to change." (Labrador in the 90s.)

The future of these communities depends on finding alternatives to cod and salmon, the traditional backbone of the economy in this area. Salmon is increasingly scarce and subject to price competition from aquaculture, and the cod show no sign of recovery in Eastern Labrador. On the other hand, loss of these fisheries has prompted enterprising ventures with new species. More exploratory fishing for crab might identify new sources for this species, which generates hundreds of processing jobs in the region already. Local fishermen have identified and begun to exploit localized stocks of new species, like whelks and scallop. None but crab is likely to be abundant enough to support a large fishery, but these other species may help to support a small number of fishermen and plant workers until cod recover and thereafter, providing the basis for a more diversified fishery.

The mineral potential of the area offers some hope for diversification and development of the highway will enhance access to high quality pulpwood forest in the Port Hope Simpson, Charlottetown and Paradise River areas. Paper mills in Newfoundland are increasingly in need of such wood, but the viability of pulpwood logging in Labrador will depend on shipping costs and the cost and quality of rival sources of fiber.
The road would also open up some tourist potential in the area, an industry which is almost totally undeveloped at present. However, this will require investment in infrastructure and marketing, the levels of which are difficult to forecast.

Labrador Straits

Both the major employers in this region, the tourist industry and the fish plant operated by Fishermen's Union Shrimp Company, appear poised for continued growth. By diversifying into a broad range of new species, the fish plant employs more people than were employed before the collapse of the cod fishery. There is no reason why this should not continue as cod stocks begin to recover.

This area has a history of enterprise, and has seen a recent spurt of new small business development. This will probably continue, as will growth in tourism in the area. Construction of the southern portion of the Trans-Labrador Highway will enhance both tourism and business development in this region. The highway will broaden the market for businesses based in the Labrador Straits area, by bringing more traffic past their door.

Western Labrador

The level of employment in this area rests almost entirely on the export of hydro-electric power and iron ore. Employment in Churchill Falls is likely to be stable, because most of the power produced is committed in long-term sales contracts to U.S. markets via Hydro Quebec. Markets for iron ore can be variable, but Wabush Mines and IOCC are well established, efficient producers. They weathered a severe slump in demand in the 1980s, when a global economic slowdown and a trend to smaller autos weakened the market for steel, but the mines appear to be confident of their markets for the future. Layoffs during the downturn cut the iron mining labour force almost in half, but the level of employment has been regaining steadily since then (D. Brenton pers. comm.). Planned capital investments by IOCC over the next two years should further strengthen this sector (Department of Finance, 1997).

Completing the Trans-Labrador Highway to Happy Valley-Goose Bay will help to strengthen and diversify the economy of Western Labrador (Chapter 22). The number of tour buses and private vehicles using the highway is rising every year and will undoubtedly grow more quickly when the eastern portion of the highway, from Churchill Falls to Happy Valley-Goose Bay, is upgraded over the next three years. It is difficult to translate such trends into forecasts of employment growth, but clearly any growth of the tourist and service sectors will be welcome in communities heavily dependent on a single major employer.

Labrador

Without the Project, Labrador as a whole, will likely experience a decline in employment and business, at least in the short-term. The importance of government as an employer and source of transfer payments is substantial in Labrador. With further government cutbacks and downsizing, many individuals will be forced to either find an alternative source of employment, or move, or depend on social assistance for income. Labrador is also highly dependent on resource-based activities for employment. With the fisheries moratoria and loss of sealskin markets, the opportunity for residents of Labrador to earn employment income from traditional sources is limited. While related employment and business activity in Labrador as a whole has been high, this trend is not expected to continue without the Project.

St. John's

Without the Project, the St. John's CMA will also continue to experience some negative effects of a decline in province-wide construction employment and business activity.

The area recently lost a number of jobs when construction of the Hibernia offshore platform was completed. At peak, approximately 35 percent of the workers employed at the construction site lived within the St. John's CMA. Jobs resulting from St. John's role as a supply base for the Hibernia field will only partly compensate for the loss of jobs in the platform's construction. Future employment and business opportunities may be derived from the operations of the Hibernia project, in addition to other offshore oil developments such as the Terra Nova Project, the Newfoundland Transshipment Terminal, and additional exploratory drilling for oil and gas. Without the Voisey's Bay Project, St. John's would lose employment and business benefits currently generated though VBNC head office functions. Likewise, should the Project not proceed, it is highly unlikely that the proposed smelter/refinery project would proceed, and similar employment and business activity would also be lost.

The Province

Without the Project the provincial economy is expected to continue to see significant short-term adjustments. While a significant divergence of opinion exists among forecasters concerning Newfoundland's expected economic performance in 1997, the province maintains that the economy will contract during the year. The province forecasts lower activity in the consumer and government sectors which will reduce overall output by about 2.7 percent in 1997. Employment is forecast to decline by 1.9 percent resulting in a decline in labour income of about 3.3 percent, and the decline in TAGS payments will contribute to an overall decline in personal income of about 2.3 percent. Reduced expenditures by senior levels of government will lower the size of the public sector and income erosion and declining employment opportunities are expected to result in declines in retail sales, housing starts and other consumption patterns (Department of Finance 1997).

At the same time investment is expected to remain strong and exports, particularly in the fishery and mining sector, are expected to increase. Expectations of continued growth in exports and investments provide the basis for a much improved outlook for the future. The beginning of oil production will be a significant boost to exports, and the development of the Terra Nova Project will contribute substantially to investment over the next few years (Department of Finance 1997).