The Economy

Since its first settlement, Newfoundland and Labrador has been highly dependent on its resource sector. The province was initially settled because of its rich fishing grounds on the Grand Banks. The mainstay of the province's fishing industry has been groundfish (primarily cod); however, other important catches are flounder, redfish, capelin, shrimp and crab.

Protection of the rich fishery resources off the coast of Newfoundland has been an ongoing concern which has intensified in recent years. In 1977, the Canadian government extended its fishery jurisdiction to 322 kilometres around the coast of the province in an attempt to gain better control of fishing activity. This move produced positive results in the 1980s, but in 1989 scientific studies revealed that, due to a number of factors, some of the Atlantic's key groundfish stocks were in severe decline. Since that period, there have been successive reductions in quotas and fishing moratoria.

The second prominent aspect of the provincial economy is the mining industry. This industry ships mineral products valued at approximately $800 million a year, mostly iron ore from Labrador. Other minerals mined in the province are gold, asbestos, limestone and gypsum. In 1994, a major discovery of nickel, copper and cobalt was made at Voisey Bay and a significant development project is now under way.

The third significant traditional goods-producing industry is the newsprint industry. This industry consists primarily of three pulp and paper mills located in Corner Brook, Grand Falls and Stephenville, which have undergone extensive rationalization and modernization over the past decade.

Recently, the discovery of offshore oil and gas reserves has added a new dimension to the marine resources of the

province. In 1999, offshore-related activity and associated spin-offs accounted for over 10 percent of the provincial gross domestic product and 2.6 percent of employment. The Hibernia discovery in 1979 was Newfoundland's first significant oil find; reserves are estimated at 884 million barrels, making it the fifth largest oil field in Canada. Production began in November 1997 and cumulative oil production to December 1999 totalled about 57 million barrels.

The province's largest utility industry is electric power. The largest hydroelectric facility is located in Churchill Falls, Labrador, with a total installed capacity of 5 403 megawatts.

In addition to fish products and pulp and paper products, about half of the province's manufacturing gross domestic product comes from other resource- and non-resource-based manufacturing. Numerous companies are engaged in the manufacture of items such as boats, lumber, chemical and oil-based products, food and beverages, clothing and footwear. In total, the province shipped about $1.76 billion in manufactured products in 1998.

Newfoundland's agriculture industry is small compared with other Canadian provinces. The output of the agriculture industry is mainly for domestic consumption, although some agricultural products such as blueberries and furs are sold to markets outside the province.

Newfoundland's service sector has experienced substantial growth over the years. In recent years, Newfoundland's efforts to develop a solid tourism industry have intensified. The province's rich cultural and historical heritage, rugged geography and unique character are considered to be major selling features to other Canadians and travellers from around the world. It is estimated that 393 000 people visit the province each year, spending an estimated $260 million annually.