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Hope for a `have-not' province. With over 17 percent of its labor force unemployed and many others working for low or seasonal wages, Newfoundland has long been Canada's poorest province. But a new agreement to develop the Hibernia oil field 200 miles offshore could - if world oil prices cooperate - offer some of the prosperity that was promised when the field was discovered in 1979.

By David R. FrancisStaff writer of The Christian Science Monitor / September 19, 1988



St. John's, Newfoundland

``One day the sun will shine and have-not will be no more.'' That bit of rhetoric was used by Newfoundland Premier A. Brian Peckford July 18, when Canada and the province of Newfoundland and Labrador signed a framework agreement with the Hibernia oil consortium for the $8.5 billion (Canadian; US$7 billion) development of the Hibernia oil field about 200 miles southeast of here on the Grand Banks.

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With 17.7 percent of its labor force unemployed and many others working for low-cash incomes, Newfoundland has long been Canada's worst ``have-not'' province.

Newfoundland's offshore oil finds are seen by Mr. Peckford and others as, if not economic salvation, something close to it. He describes the anticipated development of Hibernia and other offshore fields as ``the addition of a whole new economic chapter to Canada's history.''

Since the announcement, however, house prices in St. John's, the capital of this province of 580,000, have risen only 5 percent or so. Office space remains relatively cheap. ``There is lots of space kicking around,'' notes Paul Bugden, executive director of the Economic Council of Newfoundland and Labrador.

One reason is that when Hibernia was first discovered in late 1979 at the time of OPEC ascendancy, many Newfoundlanders expected a big boom right away. Property prices soared. Many businessmen invested money in joint ventures with oil-industry firms from Norway, the United Kingdom, or the United States. Then oil prices declined. Nothing happened. Some ventures failed. The years rolled by.

``This time around people in the business community were more cautious,'' notes Gordon Gosse, deputy minister of the provincial department of energy.

The positive side of the lengthy delay has been that Newfoundlanders, as individuals and firms, have learned much more about the oil business during the last eight years.

``We are much more prepared now,'' says Mr. Gosse. ``We have a chance to do it right.''

More Newfoundlanders will be ready to take oil jobs. The government has sent hundreds of its ministers and civil servants to the United Kingdom and Norway to learn from their offshore oil experience.

The July agreement spells out how the consortium and two governments will share the oil revenues.

``This will have a tremendous impact on the province over time,'' says Gosse. ``I'm not sure when we will become a `have' province. But it has always been our hope to get away from receiving handouts or equalization payments.''

Newfoundlanders are highly dependent on seasonal employment, especially in the fishing industry. Only 39 percent of the population holds year-round jobs, compared with 59 percent for Canada as a whole, a Royal Commission on Employment and Unemployment has noted. After a short summer of work on the boats or in fish plants, thousands live on unemployment insurance, spending their time building their own houses, repairing their automobiles, hauling firewood, setting gardens, picking berries, and hunting, fishing, and trapping for their own consumption.

Newfoundland receives on a per capita basis larger ``equalization payments'' (money from the federal government to equalize basic government services such as education and health benefits) than any other of Canada's 10 provinces.