[Newfoundland and Labrador] A BOOM GOES BUST – by Rachelle Younglai (Globe and Mail – March 19, 2016)

http://www.theglobeandmail.com/

After riding the oil boom for more than a decade, Newfoundland and Labrador has fallen on hard times. Multibillion-dollar projects have dried up, iron ore mines have shuttered and the fallout of crude’s price plunge has pushed the deficit to a record $2-billion. How the province is grappling with a return to ‘have-not’ status

ST. JOHN’S – Rick Farrell was among hundreds who lost their jobs in December when the shipyard where they worked finished making a gigantic module for Newfoundland and Labrador’s fourth offshore oil field – Hebron.

Unlike previous years when unemployed tradespeople could easily find work in Alberta, that was no longer an option with oil prices plunging.

The layoffs hit Mr. Farrell’s hometown of Marystown hard and rippled across Newfoundland’s Burin peninsula, hurting the local businesses and small communities that dot the province’s southern coast.

“It was the biggest layoff we had in many years,” said the 52-year-old Mr. Farrell. “We could be a year without work in sight.”

After riding the oil boom for more than a decade, Newfoundland and Labrador is facing a dire economy and a return to the days when it was the archetypal “have-not” province.

It’s getting hit on all sides. Multibillion-dollar projects such as Hebron are either completed or close to completion. Iron ore mines have shuttered and the weak oil price has pushed the province’s deficit to a staggering $2-billion – a record amount.

And more pain is on the way. Tax hikes and job cuts are expected when the province unveils its coming budget. A fifth of the energy sector has been laid off and the misery has spread to other parts of the economy, from cabbies to waitresses. The unemployment rate is 14.1 per cent, the highest among the provinces.

For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/economy/newfoundlands-economic-woes/article29297377/

Comments are closed.