Newfoundland Has Wealth of Ideas to Improve Lagging Fortunes

This was Canada’s poorest province even before its major industry, the cod fishery, was wiped out. But Newfoundland isn’t seeking sympathy.

Saddled with 19% unemployment, the province is tackling its epic problems with potentially epic solutions, including world-class mining and offshore oil projects. Not to mention sea-urchin farming, and marketing vodka made from melted icebergs.

Not everyone will emerge a winner. Jobs for university graduates are scarce, forcing many to head elsewhere, and life will never be quite the same again in the hundreds of fishing villages that relied on cod.

But those pushing for change say this is no time for nostalgia.

“This is war--that’s the attitude of businessmen here,” said Roderick White, vice president of a fast-growing high-tech firm, NewEast Wireless Telecom. “We have some serious handicaps when it comes to competing in the global economy, and maybe you grow up with a little bit of an inferiority complex. So we’re pretty motivated here.”

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Ever since it reluctantly joined Canada in 1949, Newfoundland has been one of the “have-not” provinces, receiving much more in federal aid than it contributes in taxes. The collapse of cod stocks in 1992, and a continuing moratorium on cod fishing, has worsened the imbalance, yet officials believe Newfoundland can become a “have” province within 10 years.

The optimism focuses on two mega-projects--a nickel deposit at Voisey’s Bay in Labrador, heralded as one of the biggest mineral finds of the century, and the start of offshore oil drilling in the Grand Banks.

The first oil project, Hibernia, is scheduled to begin operations next year. The Voisey’s Bay mine may open by 1998, potentially supplying 13% of the world’s nickel. Together, the projects are likely to generate several thousand jobs and hundreds of millions of dollars for the debt-ridden provincial government, which had been laying off hundreds of civil servants.

Newfoundland authorities have been bargaining hard to ensure the province gets maximum benefits from the projects. It still smarts from a 1966 hydroelectric deal that enabled Quebec to sell power to the northeastern United States for huge profits, while Newfoundland--site of the project--got only token payments.

“Whenever you talk about megaprojects, there’s always been disappointment in the aftermath,” said Chuck Furey, the province’s industry minister. “Our expectations have always been on the moon, and we’ve always crashed down to earth.”

To boost the chances for broad economic progress, the government also has selected three other non-mineral areas to target for development.

One is tourism, a challenging sector because of Newfoundland’s geographic isolation. There is hope for a miniboom next year, the 500th anniversary of the island’s discovery by navigator John Cabot.

The second targeted sector is information technology, particularly in fields related to marine communications. One company, Nautical Data International, is wooing customers worldwide with digital navigation charts.

The third sector is aquaculture, using Newfoundland’s cold, unpolluted waters to raise seafood products such as scallops, salmon, mussels, whelk, sea cucumbers and sea urchins.

While revenue from cod fishing have fallen from $136 million in 1988 to $1 million last year, revenue for other seafood has surged to offset that loss.

But the encouraging financial results have not translated into jobs. Of the 42,000 people who worked in Newfoundland’s fishing industry before the cod collapse, 25,000 are unemployed.

The experience has been wrenching for Newfoundland’s coastal towns, where the fishermen’s entire lives revolved around cod.

“The numbers understate the human impact,” said Alistair O’Reilly, assistant deputy fisheries minister. “Most communities on the coast are without the resource that was such a big part of their social and economic fabric. It’s who they are and what they do.”

But some former fisheries workers are shifting gears successfully through retraining. At Nautical Data International, which deals in cutting-edge computer technology, 32 of the 52 employees formerly were fishermen or fish-plant workers.

In the harbor town of Arnold’s Cove, an entrepreneurial, can-do spirit is evident. Instead of closing down when the cod stocks collapsed, managers at the National Sea Products fish plant decided to persevere even if they had to import cod from abroad.

Using Russian cod from the Bering Sea, the processing plant has managed to survive, keeping about half its pre-moratorium 450 workers on the payroll.

“To keep going. we had to become world class, we had to compete on the world market,” said the plant’s chief executive, Bruce Wareham. “We had to make drastic changes in the way we operate.”

Though laying off half the workers was tough, Wareham said employees’ morale is high because of improvements to the now-sparkling-clean plant and new emphasis on worker-management cooperation.

“I had a dream--to make working in a fish plant something to be proud of,” said Wareham, who grew up in a nearby harbor town.

“We can compete with the best in the world. And we can do all this in Newfoundland, where people supposedly just drink beer and don’t want to work.”

More so than other Canadians, Newfoundlanders admit to having a chip on their shoulder and believe their compatriots in other provinces look down on them.

The Department of Industry, Trade and Tourism has placed ads in major Canadian papers trying to dispel misconceptions about Newfoundland.

“We’re perceived by a lot of investors as an economic backwater,” said Geoff Tooten, who heads the marketing division.

Earle McCurdy, president of the Fish, Food and Allied Workers union, said he finds himself frequently combating negative images of Newfoundland.

“There’s an argument that people here are not prepared to work, but if you advertise jobs, hundreds line up,” he said.

Along with the cod crisis, the province’s biggest problem is finding jobs for its young people. Newfoundlanders comment cynically that their biggest export is university graduates.

Last year, the province had a net loss of 8,400 people--a big chunk out of a population of 570,000. Three-quarters of those departing were between 15 and 34.

Duane Rolls, 21, is among the young people looking far afield. He has applied to join the Royal Canadian Mounted Police, and would be away at least five years if he is accepted.

“Most of my friends at university are thinking of leaving. There’s just no jobs,” he said. “But I’ll probably come back. . . . There’s always something pulling you back.”