Dr. Sean Cadigan will discuss the aftermath of Newfoundland and Labrador’s oil boom, and the impact of resource extraction in other provinces, at the University of New Brunswick’s 2013 W. Stewart MacNutt Memorial Lecture series.
“Boom, Bust and Bluster: The Oil Daze of Newfoundland and Labrador, Atlantic Canada’s ‘Have’ Province”
- October 16, 5:30 p.m. in Tilley Hall, Room 102 | UNB Fredericton
- October 17, 5:30 p.m. in Oland Hall, Room 104 | UNB Saint John
The lectures are free and open to the public. Everyone is invited to attend.
Dr. Sean Cadigan is a professor of history at Memorial University of Newfoundland.
The annual W. Stewart MacNutt Memorial Lecture honours the late historian, professor and humanitarian for his many contributions to UNB and to the development of Atlantic Canadian history as a field of study.
Cadigan was interviewed by New Brunswick’s Telegraph Journal last week.
Making the most out of a boom
New Brunswick Telegraph-Journal
Mon Oct 14 2013
Byline: Adam Huras, Legislature Bureau
A historian who has studied Newfoundland’s oil boom says governments must use new natural resource development revenues to strengthen the overall economy.
Awash with oil money, Newfoundland and Labrador has used resource development to shed the title of being a “have-not” province for the first time since joining Confederation.
But Sean Cadigan, a history professor at Memorial University, questions whether Newfoundland will be any better off once offshore oil reserves are depleted – the province’s unemployment levels still amongst the highest in the country as its other sectors struggle.
Cadigan says provinces, such as New Brunswick, that are eyeing greater resource development must plan out how it will spend an infusion of royalty money, preferably to benefit the economy long after resources dry up.
“Two things are really important – one is ‘what’s the plan on how you generate revenue?’ But more importantly, ‘what are you going to do with the funds?'” Cadigan said.
“In other words, what’s the plan for using this to ensure you have secured the type of economic development you really want to see?
“I don’t see that plan here yet in Newfoundland. It’s one governments should make.”
Cadigan will present his research on the Newfoundland oil boom as part of University of New Brunswick’s W. Stewart MacNutt Memorial lecture series.
He is slated to speak Wednesday in Fredericton and Thursday in Saint John.
“It was actually the announcement of that ‘have’ status that started me to think hard about what was really happening,” Cadigan said.
“While I understood that the oil industry was having a major impact on government revenues, it was hard to really see any fundamental change in what most Newfoundlanders and Labradoreans seemed to be experiencing.”
Cadigan said that Newfoundland has a less aggressive – while still very lucrative – royalty regime in place that acts to stimulate development while also filling government coffers.
“Our basic approach has been that the best way to get benefit out of the offshore oil sector is not by a direct regime – by taxing the industry heavily through royalties – but by trying to encourage the industry through a more favourable regime that encourages indirect benefits,” he said.
“So the spinoffs, the economic linkages, that’s where we have always been told we would get the real payoff. The whole purpose of the oil industry for us would be to trigger some more sustainable form of economic benefit and that meant some economic diversification around oil.”
Cadigan then tracked employment trends to understand where the benefits of the oil boom were occurring.
“If I had to single out the one signal job that may typify the main impact of the oil boom here in terms of diversification so far, it would be the person who serves you a Tim Hortons coffee,” he said.
“It is the private service sector that has seen the greatest growth in employment here – it’s retail, wholesale, the food and beverage industry, hotels, accommodations.”
“A lot of wealth is being generated by the oil sector, but not a lot of employment. We were experiencing tremendous economic problems in both the forestry and fisheries sectors and the oil boom hasn’t really offset that at all.”
Cadigan points to current unemployment figures.
New Brunswick and Newfoundland were tied last month with the highest unemployment rate in the county – 10.7 per cent.
“We’re supposed to be the ‘have’ province in the boom,” Cadigan said.
The New Brunswick Tory government has repeatedly pointed to British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador as prosperous provinces that have benefited from natural resource development, stating that the same opportunities are available at home.
New Brunswick is putting in place a new revenue model in advance of expanded shale gas development in the province.
Energy Minister Craig Leonard said earlier this month that the government will bring forward a finalized oil and gas sector royalty regime by the end of the year.
Asked if New Brunswick should have a higher price for its resources than Newfoundland, Cadigan said he was unsure, noting that a competitive regime in New Brunswick may yield the spinoffs that he believes have not come in Newfoundland.
“There is a huge difference between the two provinces and that is to say New Brunswick has a much stronger processing sector in petrochemicals than us,” he said.
“I can’t help but to think that there is greater potential for diversification in New Brunswick that we hoped to see here.
“If you want to think about a receptive base for that kind of development, it seems to be there in New Brunswick, you look at Saint John alone.”
Regardless, Cadigan said planning is needed.
“We need to plan more and we do need to think more about what kinds of investments are needed, particularly in the rural economies of Newfoundland and Labrador,” he said.
“Do we need some kind of economic development plan for the revenue that is being generated by offshore oil? I think that would be very important.”