Chapter 21 - Employment and Business

21.2.3.3 Labour Force

Newfoundland and Labrador

The environmental effects of the Project on employment (labour force) in Newfoundland and Labrador and throughout the communities of Labrador are large in absolute terms. It is important to appreciate the magnitude of the environmental effects relative to the existing provincial and local labour market. For these purposes, the environmental effect on the unemployment rate and employment levels are considered for both the average and peak Project-related employment by phase of the Project. The discussion which follows considers the environmental effects on: the Province of Newfoundland; Labrador; the Labrador North Coast; Upper Lake Melville; and Western Labrador. The environmental effects on each of the communities analyzed in this study are reported in Appendix 21C. Table 21.12 below indicates the environmental effects on the Province.

Table 21.12 Selected Project Labour Force Environmental Effects, Newfoundland and Labrador

	Construction	Open Pit	Underground	Decommissioning
Working Age Population	452,015
Participation Rate	52.1
Labour Force	235,500
Unemployment Rate	19.4
People Looking for a Job	45,687
Average Effect
Project-Related Employment	1,229	2,418	3,307	36
Revised Participation Rate	52.24	52.37	52.47	52.10
Revised Labour Force	236,115	236,709	237,154	235,518
Revised People Looking for a Job	46,302	46,896	47,341	45,705
Revised Unemployment Rate	19.09	18.79	18.57	19.39
Change in Unemployment Rate	-0.31	-0.61	-0.83	-0.01
Change in Employment Level	0.65	1.27	1.74	0.02
Peak Effect
Project-Related Employment	2,814	3,688	3,604
Revised Participation Rate	52.41	52.51	52.50
Revised Labour Force	236,907	237,344	237,302
Revised People Looking for a Job	47,094	47,531	47,489
Revised Unemployment Rate	18.69	18.47	18.49
Change in Unemployment Rate	-0.71	-0.93	-0.91
Change in Employment Level	1.48	1.94	1.90

The average estimated environmental effect on employment levels in Newfoundland during construction is 1,229 person-years per annum. This will increase provincial employment levels by 0.65 percent and reduces the measured unemployment rate by 0.10 percentage points (from 19.4 percent to 19.3 percent). The peak employment effect during construction is 2,814 person-years. The implication for employment levels and measured unemployment rates are a 1.48 percent increase employment levels within Newfoundland and a corresponding fall in the measured unemployment rate of 0.23 percentage points.

Since the total employment experienced in Newfoundland during the open pit operation is larger (2,418 person-years per annum), employment levels and the unemployment rate are similarly affected. Specifically, provincial employment levels rise by 1.27 percent and the measured unemployment rate falls 0.20 percentage points. The corresponding peak employment during the open pit phase is 3,688 person-years. This implies that employment levels will rise by 1.94 percent while the unemployment rates will fall by 0.3 percentage points.

The largest employment-related environmental effect on the Newfoundland labour market occurs during the underground mining phase when average employment levels increase by 1.74 percent and the unemployment rate is estimated to fall by 0.27 percentage points, from 19.4 percent to 10.13 percent. When the employment effect reaches its peak during this phase, employment levels within Newfoundland will rise by 1.90 percent while the unemployment rate falls by 0.29 percentage points.

Labrador

Table 21.13 presents the environmental effects on employment for Labrador. The average environmental effect of construction on employment levels in Labrador, less mine-site employment, is 519 person-years per annum, representing an increase in employment levels of 4.43 percent and a reduction in the unemployment rate of 2.07 percentage points. At peak employment, again adjusted for mine-site employment, construction reaches 971 person-years. This will cause the unemployment rate in Labrador to fall by 3.81 percentage points (22.7 percent to 18.9 percent). As well, employment levels in Labrador will rise by 8.29 percent over current levels.

Under the same assumptions, employment in Labrador will, during the open pit phase, average 851 person-years per annum. This represents a 7.26 percent increase in employment levels and a reduction of 3.35 percentage points in the unemployment rate. At peak, employment levels increase by 9.86 percent while the unemployment rate falls by 3.9 percentage points.

The average employment levels in Labrador during the underground phase will be 1,216 person-years per annum. This represents an increase in employment levels of 10.38 percent and a reduction in the unemployment rate by 4.7 percentage points (from 22.7 percent to 18 percent). The peak during the underground mining phase will be 1,265 person-years.

Table 21.13 Selected Project Labour Force Environmental Effects, Labrador

	Construction	Open Pit	Underground	Decommissioning

Working Age Population	22,035
Participation Rate	68.8
Labour Force	15,160
Unemployment Rate	22.7
People Looking for a Job	3,441
Average Effect
Project-Related Employment	519	851	1,216	23
Revised Participation Rate	69.98	70.73	71.56	68.85
Revised Labour Force	15,420	15,585	15,768	15,172
Revised People Looking for a Job	3,701	3,867	4,049	3,453
Revised Unemployment Rate	20.63	19.34	17.97	22.60
Change in Unemployment Rate	-2.07	-3.35	-4.73	-0.10
Change in Employment Level	4.43	7.26	10.38	0.20
Peak Effect
Project-Related Employment	971	1,156	1,265
Revised Participation Rate	71.00	71.42	71.67
Revised Labour Force	15,646	15,738	15,792
Revised People Looking for a Job	3,927	4,019	4,074
Revised Unemployment Rate	18.89	18.19	17.78
Change in Unemployment Rate	-3.81	-4.51	-4.92
Change in Employment Level	8.29	9.86	10.79

Labrador North Coast

Table 21.14 presents the environmental effects for the Labrador North Coast. While the overall environmental effect of the Project on employment on the Labrador North Coast communities is not large in absolute terms, when it is expressed in relation to the size of the labour market from which these workers are being drawn, the relative importance of the jobs is magnified. The average employment levels on the Labrador North Coast during construction will be 156 person-years per annum. This will increase employment levels by 23 percent and will reduce the unemployment rate in the area by 3 percentage points. At peak, construction employment will reach 285 person-years. As a result, employment levels will rise by 43 percent and the unemployment rate will fall by 5 percentage points to 15 percent from 20 percent.

During Open Pit operations, Project-related employment on the Labrador North Coast will average 242 person-years per annum. This will increase provincial employment levels by 36 percent and reduce the unemployment rate in the area by 5 percentage points. When employment peaks during this phase, employment levels rise by 47 percent while the unemployment rates falls by 6 percentage points.

As in the other regions, these labour force environmental effects are even larger when underground mining activities commence. The average environmental effect on employment levels during the underground phase is 325 person-years per annum. This represents a 49 percent increase in average employment levels on the Labrador North Coast and a reduction of 6 percentage points in the unemployment rate. At peak, these environmental effects increase to 50 percent and 6 percentage points, respectively.

Table 21.14 Selected Project Labour Force Environmental Effects, Labrador North Coast

	Construction	Open Pit	Underground	Decommissioning
Working Age Population	2,034
Participation Rate	41.3
Labour Force	840
Unemployment Rate	20.6
People Looking for a Job	173

Average Effect
Project-Related Employment	156	242	325	7
Revised Participation Rate	45.13	47.24	49.28	41.46
Revised Labour Force	918	961	1,002	843
Revised People Looking for a Job	251	294	3325	176
Revised Unemployment Rate	17.38	16.00	14.86	20.44
Change in Unemployment Rate	-3.23	-4.60	-5.74	-0.16
Change in Employment Level	23.37	36.25	48.68	1.00
Peak Effect
Project-Related Employment	285	316	335
Revised Participation Rate	48.30	49.07	49.53
Revised Labour Force	982	998	1,007
Revised People Looking for a Job	315	331	340
Revised Unemployment Rate	15.39	14.97	14.73
Change in Unemployment Rate	-5.21	-5.63	-5.87
Change in Employment Level	42.67	47.36	50.17

Upper Lake Melville

Table 21.15 presents the Project-related labour force environmental effects for Upper Lake Melville. Given that Happy Valley-Goose Bay is likely to be one of the primary procurement and pick-up sites within Labrador, it should not be surprising that a larger overall employment level is felt within Upper Lake Melville. The average employment levels in the region during pre-production will be 183 person-years per annum. This represents an increase in regional employment levels of 4.21 percent and a reduction in the measured unemployment rate by 0.65 percentage points (from 20.0 percent to 19.35 percent). The peak during construction will be 347 person-years. There will be a 7.96 percent increase in employment levels and a fall in the unemployment rate of 1.20 percentage points.

During the Open Pit phase, average employment levels increase by 9.72 percent. The corresponding reduction in the regional unemployment rate is 1.44 percentage points.

An average of 453 person-years of employment per annum will be created in the Upper Lake Melville region during the underground mining operations. As a result, the unemployment rate will fall by 1.54 percentage points as employment levels increase by 10.39 percent. These changes will increase when employment environmental effects reach their peak. When this occurs, there will be a 10.86 percent increase in employment levels and a fall in the unemployment rate of 1.60 percentage points.

Table 21.15 Selected Project Labour Force Environmental Effects, Upper Lake Melville

	Construction	Open Pit	Underground	Decommissioning
Working Age Population	8,876
Participation Rate	61.4
Labour Force	5,450
Unemployment Rate	20.0
People Looking for a Job	1,090
Average Effects
Project-Related Employment	183	309	453	8
Revised Participation Rate	62.43	63.14	63.95	61.44
Revised Labour Force	5,542	5,604	5,677	5,454
Revised People Looking for a Job	1,182	1,244	1,817	1,094
Revised Unemployment Rate	19.35	18.93	18.46	19.97
Change in Unemployment Rate	-0.65	-1.07	-1.54	-0.03
Change in Employment Level	4.21	7.08	10.39	0.18
Peak Effects
Project-Related Employment	347	424	474
Revised Participation Rate	63.35	63.79	64.07
Revised Labour Force	5,624	5,662	5,687
Revised People Looking for a Job	1,264	1,302	1,327
Revised Unemployment Rate	18.80	18.56	18.40
Change in Unemployment Rate	-1.20	-1.44	-1.60
Change in Employment Level	7.96	9.72	10.86

Western Labrador

The proportion of Project-related employment expected to be created in Western Labrador, given that it is an established mining community, is relatively large. Table 21.16, shows that an average of 163 person-years of employment is estimated for the region during construction. This would lower the unemployment rate from 13.6 percent to 13.24 percent and increase employment levels by 3.17 percent. With a peak construction employment of 307 person-years, regional employment levels will rise by 5.97 percent and the associated unemployment rate will fall by 0.67 percentage points.

With Open Pit operations, employment levels will be 5.27 percent higher on average and the unemployment rate will have an average reduction of 0.59 percentage points. When the Open Pit peak employment level is reached at 369 person-years, the regional unemployment rate will be reduced by 0.80 percentage points and regional employment levels will expand by 7.97 percent.

As with each of the other regions, the biggest environmental effect on the regional labour market will occur with underground mining activity. The average reduction in the unemployment rate during this phase will be 0.84 percent, reaching a maximum reduction of 0.88 percentage point. Associated with these changes in the unemployment rate are increases in employment levels of 7.64 percent and 7.97 percent, respectively.

Table 21.16 Selected Project Labour Force Environmental Effects, Western Labrador

	Construction	Open Pit	Underground	Decommissioning

Working Age Population	8,623
Participation Rate	69
Labour Force	5,950
Unemployment Rate	13.6
People Looking for a Job	809
Average Effect
Project-Related Employment	163	271	393	7
Revised Participation Rate	69.95	70.57	71.28	69.04
Revised Labour Force	6,032	6,086	6,147	5,954
Revised People Looking for a Job	891	945	1,006	813
Revised Unemployment Rate	13.24	13.01	12.76	13.58
Change in Unemployment Rate	-0.36	-0.59	-0.84	-0.02
Change in Employment Level	3.17	5.27	7.64	0.14
Peak Effect
Project-Related Employment	307	369	410
Revised Participation Rate	70.78	71.14	71.38
Revised Labour Force	6,103	6,135	6,155
Revised People Looking for a Job	963	994	1,014
Revised Unemployment Rate	12.93	12.81	12.72
Change in Unemployment Rate	-0.67	-0.80	-0.88
Change in Employment Level	5.97	7.19	7.97

21.2.3.4 Business

Business Growth and Expansion

The Project will provide opportunities for business growth and expansion. The types of opportunities are discussed in Chapter 3. Major contracts for the construction and operation of the Project may include:

earthworks, road construction, and building foundations;

primary power distribution;

structural steel procurement and erection;

buildings (design-farbricate-erect);

port development;

marine works (shipping dock);

fuel storage tanks (fabricate-erect);

mechanical systems and piping;

electrical and instrumentation;

mine pre-production (pre-stripping and mine rock haulage);

camp support facilities;

air transport;

pipelines (tailings, reclamation);

effluent discharge;

fuel supply;

catering;

housekeeping;

marine transportation of concentrate and supplies;

explosives manufacture and supply;

underground mine development;

security; and

air transport.

Due to the lower level of business activity in Labrador North Coast communities, business growth and expansion in these areas will mainly derive from induced income effects associated with the re-spending of dollars generated through higher levels of employment income. Nain, given its proximity to the Project, is expected to be the exception, as there is an opportunity for a greater level of indirect activity.

Business-related environmental effects are expected to be felt strongly in the Upper Lake Melville area due to the relatively high number of established businesses and the high level of business interest there. Given the anticipated indirect and induced business-related environmental effects outlined earlier, it is expected that demand for certain goods and services will exceed the supply base in the Upper Lake Melville area. The result is expected to be the expansion of existing business and the formation of new businesses in the area. While business effects are likely to be strongest during the construction phase of the Project, the short-term nature of this phase will limit new business formation. The long-term nature of business expenditures during operations are likely to have a more sustained environmental effect and, as a result, business growth and expansion will likely be more prevalent during this stage. Furthermore, other new employment opportunities will be generated as a result of this business growth and expansion.

Business-related environmental effects will also be felt in Western Labrador (due to the existence of established business experienced in supply activities related to the mining industry) and the St. John's CMA (which acts as the central service centre for the Province).

Labour Force Displacement

The Project has potential to have a number of changes on employment and business activity, primarily in the Upper Lake Melville area, but potentially in Nain as well. Workers may leave existing jobs for better paying ones with the Project or related businesses and contractors. This will result in increased costs to existing employers for hiring and training new workers. The magnitude of this effect is expected to be low and is thought likely primarily to affect the Upper Lake Melville during the construction phase, and possibly into the initial years of operations.

Increased Business Competition

The substantial increase in business expenditures, which are anticipated to occur primarily in the Upper Lake Melville area and, to a lesser extent, in Western Labrador is expected to generate not only some in-migration of people, but potentially an in-migration of businesses from outside the region. This will lead to an increase in competition with existing businesses in the area. This increased competition may result in the closure of existing businesses that are not able to restructure their operations in response to the increased level of competition. Business in-migration may not be limited only to those companies engaged in the direct supply of goods and services, but may also pertain to businesses seeking to take advantage of the increased population base and higher levels of consumer spending. Increased competition will encourage businesses to become more cost-effective and competitive, thus creating more efficient operations with further expansion opportunity.

Business Disruption

VBNC and its contractors will be priority, high-volume customers for some businesses particularly in the Upper Lake Melville area. Examples would include air carriers, courier services, hotels, caterers and wholesalers. Long-time customers of these businesses may find they have lower priority than before (resulting in possible shipment/service delays) as a result of existing businesses focusing on meeting the demands of the Project. On the other hand, the volume of business generated by the Project should offer some economies of scale for local business and enable them to offer services they otherwise could not. Any adverse environmental effects are expected to be limited only to the early part of the Project as existing businesses adjust to the new levels of demand.

Decommissioning

Approaches that some mining companies have used in handling closures include retirement packages, compensation or transition funds, and transferring employees to other operations. However, one of the advantages of commute mines is that they do not result in the development of vulnerable, single-industry towns. Instead, the employment and business benefits of any commute mine are generally spread over a larger number of widely-dispersed communities, which helps diffuse the economic hardship associated with mine closure.

Decommissioning of the Project will see the termination of operations employment and business benefits, although there will be some short-term opportunities related to the decommissioning activities themselves. Given the fact that decommissioning will not take place for over 25 years, it is not possible to anticipate the decommissioning management methods that will be used.

The Labrador North Coast, Upper Lake Melville and Western Labrador areas will be most affected by the decommissioning. There will be an overall decrease in direct, indirect and induced employment and business opportunities, with a resulting decrease in the local population and business closure and/or business out-migration.

Accidental Events

In the event of equipment malfunction leading to temporary mine shut-down, businesses supplying goods and/or services will be detrimentally affected as a result of reduced income, but the effects are likely to be short-term.

Accidents affecting employment activity can occur if, for some reason, work is halted and the operation temporarily shut down. The likelihood of accidental events leading to the loss of life is low. VBNC has established occupational health and safety policies, as well as environmental health and safety policies, in order to reduce and/or eliminate work-related accidents. The company is committed to providing the safest possible workforce for its employees through the strict enforcement of these policies.

21.2.3.5 Aboriginal Peoples

As of November 1997, 37 percent of the workforce involved in exploration activities in Labrador were LIA and Innu Nation members. As discussed in Section 21.2.1.1, experience with direct employment of Aboriginal people in operations activities elsewhere in Canada varies considerably.

In all cases, however, achieving even modest levels has taken some considerable time. Most of the mines in question having been in operation since the mid-1970s or early 1980s. Assuming that most hires from North Coast communities and Sheshatshui are of Aboriginal origin, the proportion of direct employment during open pit and underground operations estimated to be filled by Aboriginal hires is approximately 20 percent. Hiring of Aboriginal people living elsewhere in Labrador, particularly Upper Lake Melville, could potentially double this level of involvement.

Most of those hired are likely to be male and relatively young (25-39), if patterns from elsewhere are repeated. Potential effects on women are discussed below. In all cases the number of Aboriginal hires will depend on the available and qualified labour force, the interest levels among that labour force and the effectiveness of strategies adopted as part of the IBAs and other VBNC initiatives.

As indicated, it is anticipated that Aboriginal participation with respect to employment with the Project will be substantial. There are a number of factors that will encourage participation and these include the following:

The Project will have pick-up points in largely Aboriginal communities on the North Coast and one in reasonable proximity to Sheshatshiu in Upper Lake Melville;

The IBAs will, amongst other things, contain specific commitments to employment, business and other opportunities based on adjacency to the Project. It is also expected that the IBAs will incorporate elements which will reduce barriers to Aboriginal employment;

Labour demand will increase with the beginning of underground operations. Work experience with open pit operations and the Utshimassits relocation will contribute to greater skill and experience levels among Aboriginal people which will increase employment opportunities during this phase;

The life expectancy of the Project will provide time for young people to follow and conclude technical or university training; and

The injection of new cash in North Coast communities, in the form of salaries of Project employees, will also create some secondary employment on the coast, chiefly by stimulating retail trade, housing, and other infrastructure improvements. This will serve to increase Aboriginal employment and income benefits from the Project.

Over the longer term, training and experience gained in mine-related work will make a large number of North Coast residents more employable than they are today. This is particularly important for young people at a time when increasing numbers are entering the labour force. Acquisition of job skills and experience gained during operations will help to cushion the effects of eventual mine closure. If current exploration leads to the development of other mines in the interim, Aboriginal people who gain experience at the Project will be in a good position to find work at them, while others may leave Labrador to find mining work elsewhere.

The IBAs between VBNC, LIA and the Innu Nation, when signed, may have a significant effect on the distribution of employment and business benefits outlined in this chapter.

21.2.3.6 Women

Direct employment in mining and mineral processing has been and continues to be male-dominated. Employment by gender on the Project to date in exploration activities has fluctuated. Between July and November 1997, for example, there were between 20 and 31 (10 to 14 percent of total employment) women working on the Project (VBNC, unpublished data). As of November 1997 females represented 12 percent of the total workforce, a figure similar to that for average operations activities at commute mines throughout Canada (see Section 21.2.1.4).

Women's employment is expected to be highest during the operations phase of this Project rather than the construction or decommissioning phases, because of the nature of the work, types of positions to be filled, and the level of total employment. The proportion of women employed at Canadian commute mines has remained unchanged over the last decade, and while there has been some increase in the number working in mine or mill-related occupations, the proportion of women in these jobs is small (see Section 21.2.1.4) and seem likely to remain so.

The level of direct female employment will be influenced by the size and location of the available labour force, skill levels, experience and interest in employment and corporate strategies. If it is assumed that female employment levels will be at least similar to Canadian operations averages, and employment is distributed, based on Table 21.6, annual average direct employment in Labrador, for example, would be in the order of 38-115 person-years in the open pit phase, 47-110 during underground operations, and negligible during decommissioning.

An employment monitoring program will allow direct employment by gender and other categories to be tracked and will provide input to corporate hiring strategies.

These projected numbers are too small to allocate meaningfully by specific community. To do so would give spuriously accurate results and imply unrealistic forecasting capabilities for labour distribution. The decision to be involved in this type of operation is very much an individual one and numbers are highly unpredictable at the community level.

The geographic distribution of direct female employment seems likely to be proportional to the distribution of total employment. Nain, as the largest and most proximate community to the Project site seems likely to provide the greatest number of women employees from the North Coast. Upper Lake Melville and Labrador West, by virtue of their populations and relative levels of education and training among the female labour force, are also likely to be major sources of labour supply.

The geographic distribution of indirect employment and income benefits will depend in large part on which firms are successful in winning these contracts. In turn the number of women hired may depend on the nature of the work done or service provided. Within Labrador much of the indirect employment would be expected to accrue to Upper Lake Melville or Western Labrador, as these are the largest manufacturing and service sectors within Labrador. Nain, by virtue of proximity to the Project site, is also likely to experience some indirect employment activity and some jobs for female members of the labour force will result.

For Labrador as a whole, induced employment is expected to average 83 person-years during construction, 135 during open pit operations, 190 during the underground phase and 4 during decommissioning (see Table 21.6). These jobs are likely to accrue to individual communities according to their ability to capture direct and indirect jobs and provide the services that these workers and businesses require. Much of the induced employment is expected to be in the form of consumer services (retail, entertainment) where women already comprise a substantial proportion of the workforce. Upper Lake Melville, Western Labrador and Nain once again appear likely to be the main beneficiaries in Labrador.

21.2.3.7 Demography

Unlike a typical resource town, workers can exercise a wide range of choices with respect to where they live, choices that increase with the number of pick-up points designated by the Company. In this case there will be several pick-up points, along the North Coast, in Upper Lake Melville and in Labrador West. Also, each phase of the Project is expected to have rather different migration-related environmental effects because of the nature of the work and the time period over which it occurs. In all cases, however, the use of the fly-in system from multiple pick-up points is likely to reduce the need for those directly employed with the Project to relocate, and to limit any migration associated with indirect or induced employment to those few centres which will serve as the principal supply/service centres to the Project.

Where employees choose to live will depend on a number of factors including individual family circumstances and preferences, and other issues such as housing costs at designated pick-up points and transportation costs from the current place of residence to the pick-up points.

Construction

The construction phase is considered unlikely to result in much permanent relocation. Construction is a comparatively short-term activity requiring a sequence of different skills and hence a number of different workers throughout this phase. The construction companies successful in bidding the work will normally have a core of supervisory and specialist workers who will come to the area, do the work, and then move on to the next project. Construction workers are inherently mobile and unlikely to relocate permanently for short-term employment. Contractor obligations will influence hiring practices.

During this phase any demographic changes are most likely to be associated with indirect employment and to occur in those communities which serve as the principal supply centres for the Project. Indirect employment demands, and any associated in-migration, are likely to increase as companies gear up both to serve the construction phase and in anticipation of supplying and servicing the long-term operations phases.

Induced employment is expected to be relatively modest, and positions would most likely be filled by local residents who are presently unemployed, or those previously not in the labour force. Should the estimated direct employment levels not be met, then the level of induced activity in particular would also be expected to be less.

Migration during this phase is expected to be relatively modest and will probably be confined to Happy Valley-Goose Bay and Nain. An average of 44 person years of indirect employment are expected to be generated in Happy Valley-Goose Bay at peak activity, 36 in Labrador City/Wabush and 12 in Nain (see Appendix B and Table 21.9). While some management personnel and additional specialist staff, such as helicopter pilots, mechanics, and geotechnical/civil engineers, may relocate, given the long-term prospects for business and employment, many of the positions that become available are likely to be filled by existing area residents. This may be especially so in Labrador City/Wabush where there is already a mining service/support sector.

Open Pit Operations

During the open pit operations, the major employment effects are expected to be in Happy Valley-Goose Bay, Labrador City/Wabush and Nain. The use of North Coast communities as multiple pick-up points for those directly employed, and the relatively small number of indirect and induced person years of employment forecast, suggests that in-migration of workers to most of these communities will be small or negligible. Employment opportunities may encourage people to stay in the communities who might otherwise have left, and there is the possibility of some return migration if those obtaining jobs choose to return to their home communities. In general, however, it is not expected that the Project will lead to any substantial demographic changes in most North Coast communities other than Nain.

In all cases it is assumed that the labour supply by community will increase as participation rates increase, and that unemployment levels will decrease, at least until the final decommissioning phase.
One unknown consideration is the proportion of the direct workforce in the construction phase who will make the transition to work in those occupations required during the open pit phase. Local residents are likely to remain to continue to work during the operations phase. For those working in indirect and induced activities the transition is assumed to be non-problematic. In these cases any migration effects will be associated with any increase in employment opportunities from the construction to the open pit phase.

The effects on the three communities may be significantly different. For example, in Nain, if local residents were not to get as many of the direct jobs as forecast, this is unlikely to result in in-migration of others to this community. Workers will be drawn from other North Coast communities or from elsewhere in Labrador or the Island. On the other hand, the indirect activity generated in Nain by virtue of its proximity to the Project site, may result in some in-migration if local or other entrepreneurs identify and act on new business opportunities. By contrast, downsizing at iron ore operations in Western Labrador has resulted in out-migration in recent years. The opportunity for work at the Project might encourage some former mine and mill workers to return to the area.

Underground Operations

Underground mining activity will require a workforce with a different, and more specialized set of skills than the open pit operations. While some working in the open pit phase will be able to transfer their skills directly or acquire the relevant skills over time, it is likely that some of the underground workforce will be drawn from outside Labrador or even beyond the province.

If patterns of activity prove to be similar to those at other commute mines, many of these workers will maintain their current places of residence. Of those who do choose to relocate to be closer to one of the pick-up points, Western Labrador and Happy Valley-Goose Bay seem to be the most likely destinations.

Migration Effects

The communities most likely to be affected by project-related in-migration are Nain, Happy Valley-Goose Bay and Labrador City/Wabush. All other Labrador communities are not likely to be affected.

As discussed above, the characteristics of each community and the roles that they are expected to play mean that the probability of in-migration is likely to be different by community, phase and type of employment (direct, indirect and induced). There is no theoretical or empirical basis for determining in-migration levels. A range of outcomes is therefore assumed for each community.
The assumptions and potential migration effects are summarized in Tables 21.17-21.19. The percentage of jobs filled by in-migrants is expressed as a zero value where all jobs are likely to go to local residents, or as a range which represents the low and high levels of in-migration to fill the jobs. The high end of the range represents a pessimistic scenario in which up to 50 percent of jobs are filled by in-migrants. The more successful local residents are in obtaining these jobs, the lower the level of project-related in-migration.

Table 21.17 Potential In-Migration by Phase, Nain

Table .17 Potential In-Migration by Phase, Nain

	Construction	Open Pit	Underground	Decommissioning
Direct	58¹	83	101	2
	0%²	0-10%	0-10%	0%
	0³	0-8	0-10	0
Indirect	12	29	53	0
	0-50%	0-50%⁴	0-50%⁴	0%
	6	0-8	0-13	0
Induced	14	21	29	0
	0%	0%	0%	0%
	0	0	0	0
Total In-Migrant Workers	0-6	0-16	0-23	0
Total In-Migrants⁵	0-19	0-50	0-71	0
¹ Average employment ² Percentage of employment filled by in-migrants ³ Estimated number of in-migrant workers ⁴ Percentage of incremental employment over previous phase ⁵ Assumes 70% of the workforce is married; average family size of married workers is 4.0

Table 21.18 Potential In-Migration, by Phase - Happy Valley-Goose Bay

	Construction	Open Pit	Underground	Decommissioning
Direct	84¹	121	147	4
	0%²	0-10%	0-20%	0%
	0³	0-12	0-30	0
Indirect	44	102	191	2
	0-10%	0-20%⁴	0-20%⁴	0%
	4	0-12	0-18	0
Induced	24	41	61	1
	0%	0%	0%	0%
	0	0	0	0
Total In-Migrant Workers	0-4	0-24	0-48	0
Total In-Migrants⁵	0-11	0-64	0-129	0
¹ Average employment ² Percentage of employment filled by in-migrants ³ Estimated number of in-migrant workers ⁴ Percentage of incremental employment over previous phase ⁵ Assumes 70% of the workforce is married; average family size of married workers is 4.0

As indicated in Table 21.20, the population of Nain has grown continuously since 1971 (assuming that the 1996 High School survey is a more accurate reflection of the current population than the census). If the same rate of increase were to occur over the 1996-2001 period as has been the case during 1991-1996, and construction-related in-migration is assumed to be incremental to this growth, the population of Nain in 2001 would be 1,386, for a 14.6 percent increase.

This is a large increase (177) relative to the size of the community. Growth may in fact be constrained by the availability of housing and other services. If the municipality of Nain elects not to encourage growth, this migration will be absorbed by other North Coast communities or by Happy Valley-Goose Bay.

Table 21.19 Potential In-Migration by Phase - Labrador City/Wabush

	Construction	Open Pit	Underground	Decommissioning
Direct	101¹	145	176	4
	0%²	0-20%	0-20%	0%
	0³	0-29	0-35	0
Indirect	36	83	156	2
	0%	0-5%⁴	0-5%⁴	0%
	0	0-2	0-4	0
Induced	26	43	61	1
	0%	0%	0%	0%
	0	0	0	0
Total In-Migrant Workers	0	0-31	0-39	0
Total In-Migrants⁵	0	0-83	0-104	0
¹ Average employment ² Percentage of employment filled by in-migrants ³ Estimated number of in-migrant workers ⁴ Percentage of incremental employment over previous phase ⁵ Assumes 70% of the workforce is married; average family size of married workers is 4.0

Table 21.20 Demographic Changes, Selected Labrador Communities 1971-2001

Community	1971	1976	1981	1986	1991	1996	2001²
Nain (% change)	708	812 (14.7)	938 (15.5)	1018 (8.5)	1069 (5.0)	1209¹(13.1)	1386 (14.6)
Happy Valley- Goose Bay (% change)	7024	8075 (15.0)	7103 (-12.0)	7248 (2.0)	8610 (18.8)	8655 (0.005)	8709 (0.006)
Labrador City (% change)	7622 -	12012 (57.6)	11508 (-4.2)	8664 (-24.7)	9061 (4.6)	8455 (-6.7)
Wabush (% change)	3387 -	3769 (11.3)	3156 (-16.2)	2637 (-16.4)	2331 (-11.6)	2018 (-13.4)	9635 (-8.0)
¹Based on a 1996 Nain High School Survey ² Estimated Source: Statistics Canada Census data.

Beyond 2001 projections become even more speculative. Project-related in-migration is estimated to range between 0 and 50 during open pit operations but changes may be moderated by the seasonal nature of the operations during start-up. During this period other components of population growth are likely to have greater effect on total population change.

Happy Valley-Goose Bay has experienced a great deal of volatility in terms of population change over the past 25 years (Table 21.20). This is largely attributable to its role as a military base and major service centre for Upper Lake Melville. If the most recent (1991-1996) intercensal rate of change is assumed to hold for the 1996-2001 period, and project-related migration is assumed to be incremental to this, the estimated population by 2001 is 8,709, a 0.006 percent increase. Given the potential role for Happy Valley-Goose Bay in Project-related activity, this is probably a conservative estimate of growth.

Both Labrador City and Wabush have lost population since 1981, a trend attributable to the downsizing of iron ore operations in the area. If the decline of the combined populations is assumed to continue at the 1991-1996 rate through 1996-2001, the projected population would be 9,635, a decrease of 8 percent. This too may be a conservative estimate given the prospect of additional capital investment by IOCC in Labrador City in the near future, and other projects, such as the further development of the Trans- Labrador Highway, that will generate new employment opportunities. Intuitively, it seems more likely that the population will stabilize closer to the 1996 level if employment opportunities encourage present residents to stay rather than move away.

21.2.4 Cumulative Environmental Effects

21.2.4.1 Proposed Projects

Utshimassits - Natuashish Relocation

Project construction will be occurring at the same time as the Innu relocation from Utshimassits to Natuashish. This will mean that Utshimassits residents will not only have to adjust to living in a new community but also to a major industrial development and the associated employment and business activity. Approximately $82 million in capital expenditures will be spent on the move. The relocation has been specifically engineered to maximize employment opportunities for the residents of Utshimassits, and it is therefore expected that, given the amount of work relative to the size of the local population, a large proportion of the local Innu work force will be engaged in the relocation project. As a result, positive cumulative environmental effects associated with the relocation project will be concentrated in this area, but will be also felt, albeit at a lesser degree, throughout other parts of Newfoundland and Labrador.

The Labrador North Coast will benefit from positive cumulative environmental effects relating to joint-venture arrangements as a result of new skills and technology transfer, especially to the Innu organizations, resulting from work performed during the relocation project and the proposed Kamistastin hydro project (see below). Furthermore, Innu workers and businesses will also benefit from an increased familiarization pertaining to employment with, and management of, large scale industrial projects. Therefore, while the relocation may create additive cumulative environmental effects during the construction phase, the mine/mill Project may receive a future benefit resulting from a skilled and experienced local work force emerging as the relocation project concludes.

Mineral Exploration

Currently, there are over 200 companies involved in mineral exploration activities, as well as 12 registered prospectors that are specific to the Province. Approximately $76 million was spent on exploratory and development drilling in Labrador and a further $15.3 million on the Island in 1996, and an anticipated $59 million in Labrador and $14.4 million on the Island will be spent in 1997. Ongoing exploration by VBNC and other companies will continue to provide employment and income benefits to the province, and in particular to Labrador.

Kamistastin Hydro Project

Kamistastin Hydro Inc. (KHI), a joint venture company of Innu Power Corporation and Genergy, has proposed the construction of a 60 megawatt hydroelectric power development on the Mistastin River in northern Labrador. KHI submitted a provincial registration document in February 1997. The proposed Project would include a control structure, canals, a site road, power house, power tunnel, diversion weir, airstrip and transmission lines. The project proposal has been developed to meet the electrical energy requirements for the new community of Natuashish in 1999 (KHI 1997).

Capital expenditures are expected to total $150 million and the construction phase would employ between 150-200 persons. The operations phase would create 15 permanent, full-time positions.

Quarrying Operations

The LIDC operates an anorthosite quarry at Ten Mile Bay, 8 km from Nain, Labrador. Quarrying operations were initiated in 1990. Twenty are employed at the Ten Mile Bay quarry and another 20 may be employed at a second site at John Hay's Harbour by 1998. A plant for processing waste materials (pieces of anorthosite which are too small to be sent away for processing) is proposed for Hopedale. The establishment of new employment opportunities at the Project may cause some quarry employees to consider employment there. This would result in the need to hire additional personnel at the quarry operations, but would result in an overall gain in the number of local jobs.

Trans-Labrador Highway

The Government of Newfoundland and Labrador has proposed a transportation construction project made up of two phases. The first involves upgrading the existing road between Churchill Falls and Happy Valley-Goose Bay, while the second involves constructing a road between coastal communities as far north as Cartwright that would connect to the highway at Red Bay. Construction has already begun and will last approximately six years, coinciding with the construction and first part of operations of the Project. An estimated 8,600 person years of employment will be created during the construction of the highway (Cleary 1997); total expenditures will amount to $190 million. The concurrent activities of both projects will result in an overall gain in regional employment and will provide employment choices for Labrador residents.

Labrador West Mining Projects

IOCC is the largest mining operation in Newfoundland and Labrador. In 1996, IOCC shipped a total of 14.7 million tonnes of iron ore pellet and concentrate, and is expected to ship 16.5 million tonnes in 1997. The wet-grinding mill system which was initiated in 1996 is scheduled for completion in 1997. In 1997 and 1998, IOCC plans to spend $75 million in capital improvements including the construction of a new flotation plant in Labrador City as one of the major components of this investment (Department of Finance 1997).

In 1996, Wabush Mines shipped approximately 5.3 million tonnes of iron ore. The Company is expected to ship an additional 600,000 tonnes in 1997 (Department of Finance 1997). In an effort to increase the quality of its product, Wabush Mines is conducting a feasibility study on a new manganese extraction plant that will reduce the level of manganese in the ore, therefore resulting in a higher quality product. The concurrent activities at IOCC, Wabush Mines and VBNC will result in an overall gain in regional employment and will provide employment choices for Labrador residents.

Melville Hospital

Construction of the new Melville Hospital is underway in Happy Valley-Goose Bay. The project design began in 1996, and construction is expected to be completed by the Fall of 1999. The facility is expected to open in January 2000. The estimated cost of the new hospital is approximately $30 million, half of which, up to a maximum of $15 million, will be financed by VBNC. Although there have been no firm estimates as to labour requirements during construction, it is anticipated that, judging by the required work force for similar construction projects of this magnitude, approximately 250-300 workers will be employed during peak periods of construction (Duggan, G. pers. comm.) The concurrent activities of hospital construction and Project construction will result in an overall gain in regional employment and will provide employment choices for Labrador residents.

Smelter/Refinery

Early in the next decade, VBNC is proposing to construct a smelter and refinery complex at Argentia, Newfoundland. The proposed smelter and refinery complex is currently undergoing an environmental assessment by both the federal and provincial governments.

Hibernia

The Hibernia construction project was completed with the tow out of the structure in May 1997. Before the end of 1997, project employment will decrease to a level of approximately 800 positions (operations), from a peak of 6,800 persons (construction) in 1995 (of which 6,100 were Newfoundlanders). A further 100 workers will be required to operate the Hibernia shuttle tankers operating between the Hibernia platform and the transshipment terminal at Whiffen Head, Placentia Bay. The construction of the Voisey's Bay Project may provide employment opportunities for some of those who have completed work with Hibernia.

Terra Nova

The Terra Nova offshore oil field was discovered in 1984 with development drilling scheduled for 1998. The field is located 35 kilometres south-east of the Hibernia field and has an estimated 400 million barrels of recoverable reserves. Capital and operating costs are estimated at $4.2 billion and will provide about 400-500 long-term jobs. The estimated life span is 15-20 years, with the construction phase spanning two to three years. An environmental assessment and review of the Terra Nova Project has recently been completed and final decisions regarding the Project by government and the corporate partners are pending. Any cumulative environmental effects of the Terra Nova project would be minimal for the province.

Newfoundland Transshipment Terminal

An oil transshipment facility is under construction at Whiffen Head, Placentia Bay. The facility will store crude oil from both the Hibernia and Terra Nova fields. Construction began in 1997 with capital and operating costs estimated at $150-200 million. The facility is expected to be completed in 1998, creating 300 jobs during the peak construction phase. During the operations phase, approximately 30 full-time positions will be required. There would be few cumulative environmental effects related to the transshipment facility since it will be completed around the same time that VBNC construction would begin. Some workers may seek employment at Voisey's Bay upon completion of the facility.

21.2.4.2 Labrador North Coast

Most cumulative effects on the Labrador North Coast will be felt during the first six years of the Project. The Utshimassits-Natuashish relocation, the proposed Kamistastin hydro project and ongoing mineral exploration will overlap with construction of the Voisey's Bay Project. These projects will each have demands for construction workers, or in the case of mineral exploration, those with similar types of skills.

Other projects generating cumulative effects on the Labrador North Coast region that will extend beyond the initial six years of the Project include the following:

Utshimassits relocation (operations phase);

Kamistastin project (operations phase);

Exploration activity; and

LIDC sponsored resource development projects

"We can live with the mining and can balance our lifestyle if it is our people doing the work." (Rigolet resident, in Williamson, 1996.)

Cumulative environmental effects associated with the projects at this time will be low, assuming the construction phase of the Project, Utshimassits relocation and Kamistastin projects will have been completed. Hiring for the operations phase of the mine/mill Project and Utshimassits relocation project will have already taken place.

Employment opportunities once the Utshimassits relocation project is completed amount to approximately 30 person-years annually. The Natuashish Economic Development Report suggests that at least 24 positions will be available to local Innu residents, with a high-end estimate of 100 positions (Mushuau Innu Renewal Committee 1995). Furthermore, the operations phase of the Kamistastin project would create 15 permanent positions with Innu employment increasing over the life of the project. During the first six years of operations, approximately eight Innu will be employed, increasing to fourteen in the following six years and 15, or 100 percent Innu employment, by Year 15 of the project.

Cumulative environmental effects on the demand for labour in the Labrador North Coast will also be influenced by the level of mineral exploration activity in the region. While it is estimated that the extent and size of the Voisey's Bay nickel discovery will be sufficient to guarantee a basic level of exploration activity in the region, it is nevertheless anticipated that the level of exploration activity in northern Labrador will fluctuate over the life of the Project, depending upon the degree of success associated with these exploration efforts. The future levels of employment and expenditures in exploration activity may increase dramatically in the event of further discoveries. Employment demands on North Coast residents will vary accordingly.

21.2.4.3 Upper Lake Melville

Project construction and operations will make a substantial contribution to employment and business in the Upper Lake Melville area. As the major pick-up point for the Project, the Town of Happy Valley-Goose Bay will experience considerable positive employment and business cumulative environmental effects. This may result in some in-migration.

In addition to employing a sizable number of Innu from the Labrador North Coast region, the specific technical skills requirements for the Utshimassits relocation and Kamistastin projects will also lead to a demand for labour and business inputs from outside the Labrador North Coast region. This demand may be accommodated by use of labour from the Upper Lake Melville area. As noted above, the projected expenditures on the Utshimassits Relocation and Kamistastin Hydro projects are $82 million and $150 million, respectively. Cumulative environmental effects on the Upper Lake Melville region associated with these projects during their operations phases are expected to be minimal.

Substantial additive employment and business effects are also likely to occur resulting from the demand for labour and business expertise in the Upper Lake Melville pertaining to ongoing mineral exploration being performed by other companies active in Labrador. Much of the $91 million spent on exploratory and development drilling in 1996 was captured by the local area in the form of payments to local businesses and employees. While over the long-term, demand for labour and related business expertise in exploration activity will depend upon markets and the likelihood of new discoveries, it is nevertheless anticipated that demand for labour for exploration activities will remain strong in the short-term. Subsequently, this will have cumulative environmental effects upon the construction phase of the Project, and potentially, the operations phase as well.

Work on the Trans-Labrador Highway is also expected to generate cumulative environmental effects in Upper Lake Melville. Given the larger proportion of skilled workers in Upper Lake Melville, and, subject to the nature of final contract awards, and the higher rate of unionized employees as compared to Labrador North Coast residents, residents in Upper Lake Melville will obtain many employment opportunities associated with the Trans-Labrador Highway project. It is estimated that a large proportion of the construction work force will come from the Upper Lake Melville region. The large scale nature of the Project will also lead to a number of business opportunities for local business in the area.

As discussed in Section 21.2.4.1, the construction of the new hospital in Happy Valley-Goose Bay is underway, and will be completed by the Fall of 1999. It is anticipated that a substantial number of the construction workers will also come from Upper Lake Melville.

It is expected that the cumulative demand of these projects in conjunction with the Project will exceed the local construction labour supply during the first few years of the Project. In-migration to the area will likely occur as a result, however this workforce will be temporary and largely accommodated in workcamps. Cumulative environmental effects beyond this period are likely to be minimal due to the fact that most of the projects having cumulative effects in the area are construction projects with a limited life span. Furthermore, much of the hiring for the operation phase of the Project will also have been completed by the end of the project's construction phase.

21.2.4.4 Labrador, St. John's and Other Areas of the Province

It is anticipated that the overall nature and scale of the industrial projects being undertaken in Labrador will have substantial positive effects upon employment and business activity in the region. Ongoing exploration activity, the large-scale construction projects that are planned, and various upgrades and expansion with respect to existing mines will all lead to increased employment opportunities and, in all likelihood, a degree of in-migration to the region, which will be largely confined to the Upper Lake Melville region and will be largely dependent upon the relocation costs, the cost of living, and the cost of housing.

In general, given the depressed nature of the Labrador economy and the surplus labour force (as demonstrated in Section 21.1), it is not expected that the increase in cumulative demand for labour will result in any substantial labour supply shortages or complications. Furthermore, the cumulative environmental effects of these projects on Labrador as a whole are not expected to extend beyond the first 5-6 years of the several concurrent projects, at which time the construction projects will have for the most part been completed, and hiring for the operations phases of the projects will have been done.

Other areas of the Province, and the St. John's CMA in particular, will also experience cumulative effects to varying degrees both from the projects listed above as well as other projects specific only to these other parts of the Province. Additive, and possibly synergistic effects are therefore likely to occur with regards to the many of the projects listed in Section 21.2.4.1.

For the province and the St. John's CMA, the Project will be occurring during the same period as the Terra Nova project is scheduled to begin. Other smaller projects such as small mining projects and the Newfoundland Transshipment Terminal will also be under construction or operating over the same period.

The cumulative demands on the Province's labour and business resources arising from these industrial projects will, however, be offset to a certain degree as a result of the increase in the labour force associated with the fisheries moratoria and the end of the Hibernia Production Platform construction. Especially as it pertains to the mine/mill Project construction phase, the conclusion of the construction phase of the Hibernia Project has led to an increase in the labour supply, primarily in the Avalon Peninsula. Additive demand on businesses and labour resulting from each of the projects listed above will therefore likely be absorbed by the current labour supply, resulting in few synergistic effects in the Avalon Peninsula.

21.2.5 Optimization of Environmental Effects

"Goose Bay did not destroy our way of life in Labrador. Mining does not mean the end of a way of life. We will keep it alive." (Members of Anglican vestry, Rigolet, in Williamson, 1996.)

The benefits commitments outlined in Chapter 3 have been established by VBNC to increase the overall economic value of the Project to the Province of Newfoundland and Labrador. The Company will use its best efforts to hire and train local people, and procure goods and services from local businesses for the Project.

21.2.5.1 Labrador North Coast

The Labrador North Coast communities will receive economic benefits from the Project. Employment for the people of the North Coast area will be enhanced through the adjacency principle adopted by VBNC (see Chapter 3).

Tshenish Pasteen, Innu elder. "When I was young we never got money from jobs or from government assistance. I have 30 grandchildren, about 20 boys and 10 girls, and also three daughters living. . . . I would like to see my grandchildren with jobs once the mining starts so they can support their families." (The Voisey's Bay News, April, 1997.)

Labrador North Coast residents of Aboriginal status will also benefit from the IBAs currently being negotiated between VBNC, LIA, and Innu Nation respectively.

During the construction and operations phases of the Project, the local economy of the North Coast area will be stimulated mainly through the introduction of additional wages/salaries and Project spending, and indirectly through the expenditure of tax revenues. The Project will contribute to the local infrastructure and services of the North Coast. Through VBNC's procurement commitment, best efforts will be made to award contracts on the basis of price, quality, and other relevant value factors.

21.2.5.2 Other Areas of Newfoundland and Labrador

The benefits outlined for the Labrador North Coast are also applicable to the other local, regional, and provincial impact areas of the province such as the Upper Lake Melville area and St. John's.