Newfoundland and Labrador

A

Agriculture

Farming is of minor importance in the provincial economy. Labrador is not well suited for agriculture, apart from some sheltered inland valleys in the south, and on Newfoundland the poor soil and a short growing season discourage the raising of most crops. The chief food crops include root vegetables, such as potatoes, turnips, carrots, and beets; broccoli; sui choy; and bok choy. Labrador has a vast resource of wild berries, and wild blueberries are an important agricultural export. More than 75 percent of agricultural income comes from sales of livestock and livestock products, mainly chickens, dairy products, and eggs.

B

Forestry

From 1930 through 1960 the cutting and processing of forest resources was the leading industry in Newfoundland and Labrador. By the early 1960s, when mining surpassed forestry in economic importance, about 30 percent of Newfoundland’s land area was still forested and Labrador’s extensive forests had scarcely been touched. The forests consist predominantly of such softwoods as black spruce and balsam fir, which are ideal for making pulp and paper. Newsprint is the principal use of the province’s wood products.

The pulp and paper industry began in the province in 1909, when a large mill opened at Grand Falls (now Grand Falls-Windsor). A second mill began production in 1925 at Corner Brook, and a third mill opened in Stephenville in 1981. The global market for newsprint is highly competitive, however, and low newsprint prices periodically force the province’s mills to reduce production or shut down.

Newfoundland’s forests once contained tracts of hardwoods, especially birch and maple, and in the late 19th century numerous sawmills on the island cut the hardwoods for export lumber. Today, however, the province imports lumber because hardwoods suitable for making lumber are almost completely exhausted.

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C

Fisheries

The coastal waters of Newfoundland and Labrador constitute one of the world’s best fisheries, and many excellent harbors shelter small fishing fleets. Historically, cod was the primary catch; however, in 1992 the federal government banned cod fishing because years of overfishing had depleted stocks. The ban led fishers to turn to other species, especially crab and shellfish, which became industry mainstays after 1992. Other species also grew in economic importance, including Atlantic salmon, flounder, turbot, halibut, herring, and lobster. In 1997 the government began to permit cod fishing on a limited basis. The cod stocks generally remain weak, however, and cod fishing is subject to strict quotas. Farther offshore are other rich fishing grounds, including the Grand Banks, a shallow part of the continental shelf off the southeastern coast of Newfoundland. In 2005 the catch was 357,472 metric tons of fish valued at (Canadian) $518 million.

Today, aquaculture (fish farming) is of growing economic importance in Newfoundland and Labrador, with most production devoted to salmon, steelhead trout, and mussels. Harp seals, which are commercially hunted on their breeding grounds off the province’s northern coast, support an economically significant seal fishery.

Before 1930 the province’s chief fish products were salted and sun-cured cod. The advent of quick-freezing after 1930 brought about a major shift in the industry, with declining world demand for cured cod and rising demand for fresh frozen fish products. Within a few years the province’s antiquated fishing fleet, along with increased competition from foreign fishers, led to a sharp decline in commercial fishing. After World War II the federal and provincial governments provided funds to modernize and expand the fishing fleet, and the province’s fishers prospered until the late 1960s. Then fish stocks began to decline as a result of overfishing by both the domestic fleet and foreign fleets. The creation in 1977 of an exclusive Canadian fishing zone, extending 200 nautical miles (370 km/230 mi) from the coast, helped curtail foreign competition but did not reverse the declining fish stocks or erase the heavy debts incurred by many local fishing companies.

By 1983 the province’s largest fishing companies, which rely on deep-sea trawlers, were on the verge of bankruptcy. To stave off collapse, the federal and provincial governments arranged a restructuring in which all the deep-sea fishing companies were combined in 1984 into a single company, Fishery Products International Ltd., owned mostly by the federal government. The company, which was returned to the private sector beginning in 1985, reported its first profit in 1986. The government bailout of the deep-sea fishery did not, however, ease the plight of the province’s inshore fishers, who generally operate individually in small boats. Most of these fishers also work at other jobs to supplement their income.

D

Mining

Mining is a major economic activity in Newfoundland and Labrador. The most important mineral is iron ore, which at the beginning of the 21st century accounted for more than 90 percent of the value of the province’s mineral production. The province is Canada’s leading producer of iron ore. High-grade iron ore was first shipped from the Ruth Lake area in far northwestern Labrador in 1954. Today, the main iron-mining district is Labrador’s Wabush Lake region about 160 km (about 100 mi) to the south. Shipments of concentrates from that area began in 1962. Iron mining in Newfoundland began on Bell Island in the 1890s, but ceased in that area in 1966.

Several other minerals are also mined in the province, including silver, gold, pyrophyllite, limestone, and gypsum. At times lead and zinc have been produced in Newfoundland. A major nickel deposit was discovered at Voisey’s Bay in northern Labrador in 1993, and in 2002 the provincial government announced that an agreement had been reached with Inco Ltd., a mining and metals company, to develop the deposit. Labrador also has deposits of high-quality uranium, which have yet to be mined in significant quantities because of the high costs of development.

In recent years, the exploitation of offshore deposits of oil and natural gas has expanded rapidly, spurring economic growth and helping the province to rebound from the collapse of the cod-fishing industry. In 1979 the Hibernia oil field was discovered in the Grand Banks region about 310 km (190 mi) off the coast of Newfoundland—the first major oil discovery in Canadian coastal waters. By the early 1990s a platform was under construction to tap the oil, and the facility at Hibernia began commercial production of oil in 1997. A second offshore facility, constructed at the nearby Terra Nova oil field, began operations in 2001. A third offshore facility, located at the White Rose oil field, is slated to begin production in 2005. Development of the offshore fields, which includes exploration, construction, and production, has stimulated the most significant period of capital investment in Newfoundland and Labrador since World War II.

E

Manufacturing

Newfoundland and Labrador’s three most important manufactured goods are processed fish and seafood, newsprint, and refined petroleum, which together account for more than 95 percent of all manufactured exports. Manufacturing in the province expanded rapidly in the 1990s and early 2000s, with the shipment value of manufactured goods growing by 45 percent between 1996 and 2002.

Historically, the manufacturing sector was held back by the small size of the domestic market, the great distance to other markets, and the limited quantity of skilled labor available in the province. To compensate for the economic isolation of Newfoundland and Labrador, the provincial government in the 1950s and 1960s attempted to develop numerous new industries. Most of these quickly failed, including a rubber-goods plant, a leather-products plant, and an oil refinery. Among the few that succeeded were a particleboard mill at Donovans and a phosphorus plant at Long Harbour. Rapid growth in the manufacturing sector since the mid-1990s has been driven by a variety of factors, including fisheries diversification, reduced trade barriers, and new investments in transportation, infrastructure, and education and training programs.