In desperate economic times — and Newfoundland had its share leading up to Confederation with Canada in 1949 — Labrador was put on the block. During one such attempted sale, in 1924, Newfoundland offered Labrador to Quebec for $30 million, although the already fire-sale price was cut in half before year’s end.
The deal had its opponents, including Dr. Wilfred Grenfell, a prominent medical missionary based on the tip of Newfoundland’s Northern Peninsula, who condemned the proposed sale as short sighted. Grenfell argued that Labrador was resource rich, and Newfoundland would be blind to its own interests if it parted with Labrador for cash.
Grenfell was dead on the money.
It was also incredibly fortuitous for Newfoundland that Quebec decided to walk away from the proposed sale. Eighty-six years later and Labrador’s incredible resource wealth helps drive the provincial economy, one of Canada’s hottest.
Newfoundland and Labrador achieved have status in the fall of 2008 (the first time since Confederation), and while offshore oil was a primary factor in the reversal of economic fortune, Labrador’s economy has been a bright spot for years.
That said, the recent worldwide recession hit Labrador’s resource-based economy hard. In 2009, the value of provincial mineral shipments (primarily from Labrador) decreased about 50 per cent to $1.9 billion, due to lower production and a severe drop in price for iron ore and nickel, according to provincial budget documents.
This year, however, the Danny Williams administration expects the value of mineral shipments to increase about 60 per cent to $3.1 billion as the result of higher production and healthier prices for iron ore, nickel and copper.
“This is Labrador’s time,” said former Newfoundland and Labrador Premier Brian Tobin, in an address earlier this summer to Expo Labrador 2010 in Happy Valley-Goose Bay. Tobin is executive chairman of Consolidated Thompson, which operates a new iron ore mine and mill at Bloom Lake, Que. near the Labrador border.
“There is nothing dreamlike in this, the potential for Labrador is unlimited,” said Tobin, who grew up in Labrador, graduating from Robert Leckie High School in Goose Bay. “This is still a land of opportunity and a place that should attract significant capital and create new jobs.”
Indeed, the Labrador West economy has run so hot in recent months that international workers have been brought in from countries such as the Philippines to fill service-industry jobs at businesses like Tim Hortons. Labrador’s economy is thriving on the mines of Labrador West (“the iron-ore capital of the world”), where the unemployment rate is practically zero
“Labrador West is going to be the Fort McMurray of the East,” says Labrador Affairs Minister John Hickey.
The economy of Lake Melville/Happy Valley-Goose Bay, a hub in terms of government, health, and transportation services, is equally as robust, he says. “One thing I don’t have to worry about as an MHA is people coming to me looking for a work. Anybody who wants a job can work.
Hickey takes the boast a step further: “The future of this province lies in the development of the resources of Labrador,” he says.
That kind of thinking began when the Williams government took power in the fall of 2003. “For far too long, the people, resources and potential of Labrador have been ignored and excluded from decision making processes of the province,” read the Progressive Conservative book of pre-election promises. “We can no longer tolerate this atmosphere of exclusion, and we must recognize that Labrador will play a pivotal role in the future success of this province.”
Seven years after taking office, the Williams administration has two Labrador cabinet ministers (there were none in 2003; Patty Pottle holds the other portfolio of Aboriginal Affairs). Further, Hickey says the current Tory government has invested $2.4 billion in Labrador since day one, “an investment never seen before in Labrador’s history.”
Often referred to as the Big Land, Labrador has a huge landmass of just over 294,000 square kilometres, large enough to fit the three Maritime provinces and the island of Newfoundland within its boundaries. But Labrador’s population stands at only 28,000, with about 10,000 people in Labrador West, another 10,000 in the Lake Melville/Happy Valley-Goose Bay area, and the other 8,000 scattered in northern Labrador and along the coast.
Hickey was born in outport Newfoundland but moved to Labrador as a boy in 1962. He worked for years with Newfoundland and Labrador Hydro, starting off as a linesman and working his way up to senior management. He earned his political stripes while serving 16 years with the Happy Valley-Goose Bay town council, including time as mayor. From his job with Hydro, the town council, and four years as minister of Labrador Affairs, he knows the Big Land like the back of his hand.
“I’ve watched Labrador unfold, I guess you could say,” Hickey says in an interview at his St. John’s office, a map of Labrador in the background. He runs through a long list of Labrador’s economic attributes with obvious passion and zeal, starting with Labrador West’s incredibly rich iron-ore trough. “There could be as many as 10 mines operating around Labrador West in the next few years,” says Hickey. “China and India have a huge demand for iron ore.”
The Iron Ore Company of Canada runs the largest iron-ore operation. In May, IOC officials relaunched an ambitious plan to expand its mine in Labrador City. The first phase of the expansion project (priced at $435-million) is expected to increase annual production from the company’s Labrador City operation to 22-million tonnes. The plan was stalled in 2008 when demand for steel, and the pellets IOC produces, nosedived in the wake of the financial crisis, which pounded markets worldwide.
The thriving economy of Labrador West has created social challenges, including a housing shortage. A recent online posting for the area, which includes Labrador City and Wabush, listed a bungalow for $4,500 a month. The vacancy rate is practically zero,” says Hickey. “There are challenges, but I call them good challenges.”
Labrador is rich in other minerals besides iron ore, including uranium (there’s a moratorium on development until March 2011), and rare earth (used in the high-tech industry). “Keep in mind we have so many treasures yet to be found,” Hickey says.
Although operating at a lower-than-normal capacity as the result of a yearlong labour dispute, Vale’s Voisey’s Bay nickel mine continues to produce. Hickey is most excited about the potential for the Voisey’s Bay mine to go underground, which would make it a much larger project, requiring an estimated 50 megawatts of electricity. “If we get power to Voisey’s Bay we could also get power to the North Coast,” says Hickey, adding such a move would end the coast’s reliance on expensive oil burning generators and create other economic opportunities.
In terms of hydro potential, Premier Danny Williams has described Labrador’s proposed Lower Churchill development as the “most attractive undeveloped hydroelectric project in North America.” The Newfoundland and Labrador government is focused on developing the $6.5-billion Lower Churchill hydroelectric megaproject, but it’s looking for a way to transmit the power into hungry markets.
There are other hurdles to overcome before the Lower Churchill can get off the ground (including financing and the securing of long-term energy customers) but that hasn’t stopped the Williams administration from releasing this summer a benefits strategy for the project’s construction phase. The benefits would be enormous — at least 21.5-million person hours of construction employment alone on the two hydroelectric developments at Gull Island and Muskrat Falls, as well as a Labrador-island transmission link.
A key to Labrador’s development is infrastructure, including completion of the Trans-Labrador Highway. It’s expected the entire 1,125 kilometres of road from the Quebec/Labrador border to Blanc Sablon, Que. will be completed as a Class A highway by September. Which should do wonders for Labrador’s tourism potential.
“Labrador has been the best kept tourism secret in Canada, without question,” Hickey says, describing the industry as “an awakening giant.” The “giant” has been awoken by tourism promotion, the highway’s completion, and the attraction of two national parks — Torngat Mountains National Park and the Mealy Mountains National Park Reserve. “Alaska of the East is what American tourists call Labrador,” Hickey says. “They come to Labrador because they say it’s a new frontier, it has a small population and a vast wilderness. It’s the lure of the Labrador wild.”
Labrador economic potential doesn’t end there.
The Big Land’s vast forests are being eyed by the wood pellet industry. At least two proponents have submitted proposals to the provincial government.
The fishery is also moving forward. The Labrador Fisherman’s Union Shrimp Company, a co-operative that manages a shrimp plant in Charlottetown and five crab plants on the southern Labrador coast, announced a new $4.5-million crab plant for Mary’s Harbour earlier this year.
Hopes are also high for the future of 5 Wing Goose, the Canadian Air Force base in Happy Valley-Goose Bay, which Hickey sees as a future centre of excellence for Unmanned Aerial Vehicle Technology.
Hickey says the story of Labrador has yet to be told. “There are so many good things happening.” There are challenges — the remote coastline, small population, and distance between communities among them — but those challenges are being overcome.
Hickey speaks with excitement about a new summer home he purchased recently in St. Lewis, the most easterly permanent community on the North American mainland and one of the best locations on the Labrador coast to see icebergs.
“It’s a little piece of heaven,” says Hickey, before quickly finding yet more potential. “Maybe we could build an iceberg water plant there someday.”