It doesn’t add up

It doesn’t add up
Photo: pbase.com/baron48

How is it possible that a region of only 30,000 people can contribute millions, maybe even billions, to provincial coffers annually, but doesn’t have a fully paved highway? Or reliable high speed internet access? Or affordable food?

Karen Oldford, mayor of the Town of Labrador City, doesn’t understand why no one can tell her how much Labrador contributes to Newfoundland and Labrador’s GDP. It’s a question that equally frustrates Yvonne Jones, the Member of Parliament for Labrador. Both women say the answer could be a game changer.

The list of big industrial projects in the district is massive – and massively impressive: IOC (and until it was idled last winter, Wabush Mines) has been harvesting iron ore in Labrador West for over 50 years; 5,428 MW of hydroelectricity have been flowing annually from Churchill Falls since 1971; the Voisey’s Bay nickel project has been producing ore since 2005; the Muskrat Falls hydroelectric project is speeding towards completion; and Alderon’s Kami project – which some have estimated will be as big as IOC in Labrador – is expected to begin operations in the next few years. According to the Atlantic Provinces Economic Council’s 2014 Major Projects Inventory, more than $8 billion worth of projects are currently underway or in development in Labrador (and that doesn’t include the $4.25 billion facility that Vale has built in Long Harbour to process Voisey’s Bay ore).

If Oldford’s calculations are correct, Labrador West contributes in the vicinity of $1 billion a year to Newfoundland and Labrador’s GDP. She’s the first to admit that provincial government officials have told her she’s wrong, but since no one has come forward with the correct figure (or the documentation to show she’s incorrect), she’s sticking with her best guesstimate.

For her part, Yvonne Jones says she’s only ever received provincial statistics, even after filing Access to Information requests for Labradorspecific numbers. Still, she claims she has found evidence in public reports that the “Big Land” will contribute $53 billion to provincial GDP from iron ore developments over a 20-year period and that it will produce another $1.9 billion as a result of Muskrat Falls phase one. And, she says, if production reaches “Scenario Three” as described in Dr. Wade Locke/Strategic Concepts’ report “Economic Impact Analysis of Iron Ore Mining in Labrador,” Labrador will at that point be producing 21 per cent of total provincial annual GDP. “Even at base production rates,” she says, “Labrador would produce approximately eight per cent of the province’s GDP.”

Lurking just beyond the intriguing puzzle of Labrador’s exact economic contribution to the province is an even more curious question: why has this number been impossible to obtain?

Jones believes the solution to the riddle can be found in the oftproven adage that knowledge is power – and that “government sees no advantage to relationships between Newfoundland and Labrador by empowering the people of Labrador with hard facts about their financial contributions to N.L. coffers.”

Beautifully balmy summer days of 32 degrees aren’t unusual for Labrador. Nor are wintry lows of minus 40. But while it may seem like Mayor Karen Oldford is stating the bleeding obvious when she observes that Labrador has both the highest highs and the lowest lows, she isn’t talking about the weather. Oldford, 51, has been mayor of the Town of Labrador City since 2011. It’s a volunteer position; her official employer is the Labrador-Grenfell Regional Health Authority. Oldford works as the primary healthcare nurse practitioner at the Captain William Jackman Memorial Hospital. The job is what enabled Oldford, who’s originally from Torbay on the island portion of the province, and her Labrador West born and bred husband, to settle in Labrador back in 1986. They had been on the cusp of heading to Alberta at the time, until the promise of employment lured her to Labrador. She originally thought they might be there for five or six years, but her husband warned her she would never want to leave. He was right.

Asked to describe her constituency, she says that one of the first things you see when you drive into town is the train. Though absent from the island of Newfoundland since 1988, the train is a vital link for the area’s vibrant mining industry, transporting ore from Labrador West to the port in Sept-Iles, Quebec. After the train, you can’t help but notice the mega dump trucks around the mine site. These are no ordinary earth movers: their boxes are as big as houses, their cabs as high as three stories off the ground. If you were to stand next to one of the tires, chances are that the top of your head won’t even reach the lowest lug nut.

Warning flags and amber safety lights are dominant on municipal roads while hard hats are not an uncommon accessory in the local shopping mall. Don’t be alarmed. Labrador City sits on top of an ore body, after all – it’s only a 10-minute drive to the work site.

That’s one of the pluses of living here – the fact that it’s such a concentrated community whose roughly 10,000 permanent residents can get anywhere they want to go in town with minimal traffic in a minutes-long commute.

Other pluses? How about abundant recreational facilities, like the curling club and hockey arena, the swimming pool and walking trails, the bowling alley and soccer pitch, the golf course and playgrounds and softball fields. There are innumerable opportunities for snow shoeing, snowmobiling, skiing and fishing.

Then, of course, there are the abundant jobs at the nearby mines. Even after 50-plus years of operations in Labrador, IOC continues to expand. And with Alderon’s financing in place, it appears likely that another mega-mine operation will open in the area in the near future. When that happens, Labrador City will literally be surrounded by mines. It’s already the service hub for the Labrador West region (a fact underscored by the presence of the only Tim Horton’s in the area), so its retail stores see bustling trade on a regular basis.

All of which collectively paints a pretty picture of an industrious (which it is) and prosperous (which it isn’t) community. This is an area very much in need. Many of the touted recreational facilities here and in nearby Wabush were put in place decades ago by Wabush Mines and IOC, back when the provincial government granted licenses to operate in exchange for community-building infrastructure. Mayor Oldford estimates that the aging, often asbestos-laced infrastructure will cost $30-$40 million to replace. She notes that a sister municipality is dumping raw sewage in fresh water, and two water treatment facilities aren’t up to standard. That’s another $40-$50 million worth of work. Then there are the roads: given the amount of heavy equipment travelling back and forth on a regular basis, the roads are understandably in rough shape. Oldford says her town has a capital needs list of $22 million (“needs,” she emphasizes, “not wants”) that grows bigger and bigger every year.

With so much commercial activity in Lab City, how could it possibly be lacking the funds for necessary municipal infrastructure? Can’t they just raise taxes?

“Our industrial partners are already stepping up to the plate. Our biggest revenue source is the grant in lieu of taxes from IOC, that’s anywhere from 30 to 40 per cent of our annual revenue,” says Oldford. “Most of the rest is from residences and businesses.”

“We have little control or power over our revenue,” she adds. “We are a creature of the provincial government. Our taxation schedule is restricted by the Municipalities Act. The provincial government can get extra revenue via royalties, but that doesn’t come back to us. We’ve lobbied for an infrastructure fund, but haven’t had any luck.”

“It was the companies that put the infrastructure in place to build Labrador West. The government hasn’t had to invest in us in any real way for close to 40 years.

“We’re a resilient people. Traditionally, if we saw something that needed to be done, we did it. We can’t do that anymore. The infrastructure has fallen behind to a point where we need the province to step in. We need more money for capital investment and infrastructure to remain a vibrant community, to keep current residents and attract future workers.”

Unless, of course, it were to cease as a community and simply become a flyin, fly-out work site. It would then be all take and no give to Labrador. Oldford, understandably, is against that.

Yvonne Jones is a true child of Labrador. Her mother’s family emigrated there from England in 1820, her father was a descendant of the Labrador Inuit. Yvonne was born at the Grenfell Mission Hospital in St. Anthony in 1968. After being discharged from the hospital, she and her mother boarded a de Havilland Canada DHC-2 Beaver for their return to Mary’s Harbour on Labrador’s south coast. The single engine bush plane landed on the frozen ice where Jones’ father bundled them into his Komitik (covered sled) and towed them home behind his seven horsepower Elan skidoo.

Jones grew up in Mary’s Harbour. Though she eventually left home for her post-secondary education, and worked in various places across Newfoundland, not too many years passed before she boarded the Sir Robert Bond for the ferry crossing that would return her to her beloved Labrador. She’s been advocating for her homeland ever since, first as a Member of the House of Assembly (1996 to 2013), now as a Member of Parliament (2013 to present).

Asked how she would describe Labrador to someone who has never been there, Jones offers a variety of perspectives – each more poignant than the last. For the visiting tourist, she speaks of glorious mountain peaks and vast, untouched land, of ageless rivers that both trickle and roar, of a natural world that is simultaneously relaxing and rejuvenating. For the historian, she reveals an enviable aboriginal and international cultural mosaic encompassing native peoples, Basque whalers, European settlers and military trainees from around the world. For the political visitor, she shares the passion of her people as well as the frustration and sadness and anger that comes with being held back from reaching their full potential.

“This is Labrador, whose people will stand with pride to fight for the place they love, but who have met so many road blocks and seen so little results, experienced so much outside control and been left feeling abused… and helpless to govern in their own land.”

Jones identifies the inability of Labradorians to influence their own destiny, coupled with a lack of infrastructure and isolation, as the region’s most debilitating weaknesses. She notes that its strengths, however, have the potential to turn that tide.

“God gifted Labrador with probably the largest mineral resources on land, plus the oil and gas and fish of the sea, and gifted our people with strength and perseverance.”

Industrial developments are already contributing to increased employment in Labrador, as well as higher income levels and expanded services. But much work remains to be done on affordable housing, on stabilizing employment (rather than boom and bust), and on mitigating social issues like crime and drug addiction.

Getting there, says Jones, very much depends on both the federal and provincial governments changing their relationship with Labrador. “I feel Labrador has suffered historic abuse from government… we are among the last in Canada to have roads, internet access, affordable food and aboriginal self-governance, despite our abundance of resources.”

“There is a growing sentiment among Labrador people that Labradorians are not getting their fair share from the Government of Newfoundland and Labrador.”

If there’s any institution that should understand the growing discontent in Labrador, it’s the provincial government. Not so long ago, former premier Danny Williams was on a cross-country road show in an attempt to convince fellow Canadians that his province wasn’t getting a fair share of its resource wealth. He argued, successfully, that the money was necessary for the province to break its decades-long cycle of have-not.

Labrador City’s Mayor Oldford hopes to use that same argument to her town’s advantage. “I understand that the vast majority of the population is on the island. It’s hard for provincial politicians to allocate more resources here, with our smaller population, if that means there will be fewer resources on the island. We need to develop a business plan that shows how investing in Labrador will benefit the entire province. That’s the only way I see this working.”

Asked about a movement towards a self-governing Labrador (the Labrador Independence Facebook group has 433 active members), Oldford feels it’s not so much about a desire for independence as it is a movement towards increased awareness of – and respect for – Labrador’s contribution to the province. Jones, however, admits to being envious of territorial government in the Northwest Territories and Nunavut. “I often make comparisons to Labrador for we have similar land mass, population, northern, remote, resource-driven regions with diverse cultures.”

While she doesn’t have any economic studies to back her up, Jones strongly believes that “if given the opportunity to govern ourselves, Labradorians’ lives would be so much fuller and our rewards far greater.”

Though there’s no sign of that happening any time soon, both Jones and Oldford say they won’t give up. They plan to do whatever they can to see Labrador get further ahead on the road to prosperity – whether it’s paved or not.

Dawn Chafe
About Dawn Chafe

For the past 19 years, Dawn has been editor of Atlantic Canada’s most award-winning and largest circulation business magazine: Atlantic Business Magazine. Under her editorial direction, Atlantic Business Magazine has won 14 Atlantic Journalism Awards, three TABBIE international business press awards and two KRW national business press awards.

8 Comments to “It doesn’t add up”

  1. The same observation could be projected to the entire province, you have just over half a million people in a province with massive oil wealth, hydro projects and mines, and towns are falling apart due to lack of municipal funding. People leave rural NL in droves because there’s nothing there.

  2. If you still insist on comparing the island portion of the province to Labrador, then either you didn’t read the article or you willfully chose to ignore the very valid points it makes. What other place on the island still has dirt roads? And, do they contribute billions to the provincial coffers each year? The more I hear on this issue the more I think that, unless you’ve lived in Labrador, you will never understand the frustration.

  3. AND what about the native people that all live for free , who paid that bill ?? and the next to free power bills , people have electrical heaters in their dog houses its so cheap and to keep their skidoos warm , The NL people are tried of paying for all this , Free post secondary School that most just quit . and the list goes on on on and on get a life people and learn to add !!!!

    • I’m not sorry because I live on the North Coast of Labrador and I for one AM NATIVE, WE DO NOT GET EVERYTHING FOR FREE…Like Faye said you really need to get educated, I know for a fact that you don’t go to the grocery store and pay 13-14 dollars for 3 chicken legs that is not even enough to feed my family of 5…. so don’t even start something that you do not know nothing about, everything that I have lie skidoo, truck, etc we have paid for, so you tell me how do us Natives get stuff for free because I would really like to know!!

  4. Hey Melvin, I am native and I can assure you I don’t live for free. As a matter of fact I can guarantee my grocery bill is most likely double yours, I pay hydro have a mortgage and the cost of transportation and freight can’t even compare to yours. Like the previous comment says you don’t know until you live here. You are ignorant to our frustrations. Since the maga projects started here the cost of living has sky rocketed and I don’t know how people working minimum wage jobs are surviving. Get educated.

  5. I do believe that once the useless p c gov’t is gone to dog house the new Gov’t will tell us what the big land is adding to the GDP per year.I will be glad when money is spent on big land roads and more put in and less taken out.I praise Yvonne jones and Karen Oldford for their fight for our labrador and the likes of Nick McGrath and Keith russell should take notice of these two great ladies as they stand and fight for labrador and not being Gov’t puppets and who put you both to shame.At least they will still be in office after next years election and cast my vote I will.

  6. I have lived in Labrador all my life and I share many of the frustrations that others share. I have also been witness to the governments of the past and the lack of progress that came with each and everyone. I remember clearly the liberal governments, some of which Ms Jones was part of but I can’t for the life of me recall anything great that was done while they were in power.
    I remember when the last Liberal Government was ousted from power and the PCs filled the benches. We are probably nearing a point where we will see a reverse of this and the PCs will be ousted by the Liberals.
    Can’t wait to see everything in Labrador change and everything made right by the liberals. Not very likely. There has been more development in Labrador in the past Ten years than any era in which the Liberals were in power.
    I certainly hope that I am wrong but I believe with a Liberal government it will be more of the same and most of us will remain frustrated and still wanting.

  7. Avatar Bob Mesher // March 7, 2015 at 12:35 am // Reply

    Hey John, you’re wrong. The same cannot “be said about the whole province”. Labrador is Labrador, Newfoundland is Newfoundland. But Newfoundland would be nothing without all they they take from Labrador, this abuse, neglect and colonial attitude by Newfoundland against Labrador has a long and depressing history.

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