Jobs Provided By Our Natural Resources Are Crucial
Posted May 6, 2016
Many of the most successful parts of our economy are resource based. They are not dependent on handouts from government, but they do need effective and credible regulation.
Wild fisheries have been vital to Nova Scotia for generations. Shellfish make up 90% or more of the value harvested—led by lobster, whose value is well over $600 million, followed by scallops and crab. The lobster business has been particularly good in recent years, with record catches accompanied by lower fuel prices and improving prices.
Regulations to limit licences and return egg-bearing and small lobsters to the ocean have helped, but the greatly increased catches are nevertheless surprising.
Lobster harvesters are reinvesting in their businesses. Provincial boat builders are booked solid, welcoming welders and other skilled tradespeople back from Alberta.
Aquaculture has tremendous potential in a province gifted with so much shoreline. Some of it is shellfish, and oysters show considerable potential for growth. But the big opportunity is with salmon.
An inadequate regulatory regime led to a two year moratorium on new applications beginning in 2011. It is now five years later, and producers still do not have a framework for proposing new projects.
The one case of a handout in this area, by the NDP government, came to naught when Cooke Aquaculture failed to build a promised plant and was told to repay the money. The recent budget provided $2.8 million in new research funding.
Echoing the Ivany report, Fisheries and Aquaculture Minister Keith Colwell says he wants the aquaculture industry to grow in a responsible and environmentally sound way. That is fine, but progress has been very slow.
The other great virtue of our seacoast is its attractiveness for visitors. The most promising current example is the Cabot Links development. Its presence has revitalized the dying town of Inverness, providing hundreds of seasonal jobs as well as construction work for the resort and for nearby housing. The only government support has been a loan interest subsidy worth a little over $1 million.
With both the Sable and Panuke offshore gas projects beginning to wind down, it is easy to forget that they have contributed over $4 billion in revenue to the province over the last 15 years.
At a time of low oil prices, it is encouraging that Shell and BP are in the process of fulfilling their commitments to spend $1 billion each on exploration on the Scotian slope. Other, smaller commitments have followed, and more will happen. The provincial seed money for this was a single $15 million investment in sharable data—more than a decade ago.
Unfortunately, there continues to be a moratorium on most onshore oil and gas activity, with no apparent plan to move forward with a renewed regulatory regime.
More helpfully, the Donkin mine looks set to open later this year. It will not increase coal consumption, but rather will replace imported coal from Columbia. Although governments spent a lot on this project many years ago, the current activity is funded entirely by private money.
Other areas, such as blueberries and wine, are doing well. Gold mining is reviving on the Eastern Shore.
Common to all of these is the small amount of government money involved. What is being spent is mostly on research for the lasting benefit of the whole industry.
Contrast that with the Yarmouth Ferry, which is set to cost well over $100 million over the next decade, or the screen industry’s annual demand for tens of millions—neither of which are building an economic engine that will someday stand on its own.
A cautionary note is also in order. Resource jobs can be cyclical. The oil industry is the most prominent current example. Mink prices have plunged due to recession in Russia and crackdowns on gift giving to officials in China.
Resources can collapse, as happened with the cod in the eighties. Lobster populations could shrink again to levels that yielded catches in past decades that were less than half of the catch in 2015. The business of making paper, historically the backbone of our forest industry, is unlikely to ever grow back to its previous size.
Any plan for the future should anticipate this volatility. But a viable future for Nova Scotia, particularly in rural areas, must include resource industries, within the bounds of effective and predictable regulation.
They will certainly not be the whole economy, nor should they be. Michelin tires, aerospace, information and communications technologies, and many more will always be important.
But they are less firmly attached to our location. Resource jobs are here because of the things that are to be found in or on the ground, or in the ocean. There is no risk of our lobster industry being moved to China.
Let’s make the most of our distinctive opportunities.