Newfoundland's gross domestic product (GDP) grew by 13.4% last year, and analysts predict at least 5% growth this year. According to Roger Grimes, premier of Newfoundland and Labrador, the oil and gas industry has brought "unheard of" growth to what has been a depressed region of Canada for decades.
Grimes told participants at the annual Newfoundland Ocean Industries Association meeting in St. John's, Newfoundland, that the province achieved record employment in 2002. Employment numbers in January set a new record, a record that has been broken month on month through May, Grimes said. Newfoundland is no longer a province of have-nots, Grimes said. "We have a lot."
According to Grimes, the oil and gas industry is partly responsible for the upturn in the province's GDP.
Offshore development has been very profitable and has created a lot of jobs. Every cent the federal government has invested in Atlantic Canada has been recovered, Grimes said. Now, the offshore projects are turning a profit.
Looking forward, the province needs two things, Grimes said. " We need a stable political climate and a stable investment climate."
One way to create that climate is to give serious consideration to modifying the province's royalty regime, accepting that field-specific royalty regimes are possible.
This is a significant departure from tradition in Newfoundland, but Grimes believes willingness to modify relief structure is critical to attracting foreign interest. "One size does not fit all," he said.
There is global competition for E&P dollars, and there are many places in the world to invest. That fact should receive, "direct and full consideration when we make our decisions," Grimes said.
06/17/03