Canada's poorest province gets its day

Despite newcomers like nickel, oil remains the main driver of prosperity in Newfoundland and Labrador. The White Rose oil field is about 220 miles offshore in the North Atlantic. The first crude started flowing in November 2005 and White Rose now produces 70,000 barrels of oil a day. Two other offshore fields started production in 1997 and 2002. Husky Energy of Calgary, which operates the project, says the White Rose field has a life span of 10 years. Husky continues to search for more oil.

The latest plans for a new energy project are for a second oil refinery in Newfoundland. Newfoundland and Labrador Refining Corp. is lobbying provincial leaders for the rights to launch a $7-million feasibility study.

"There's a lack of refining capacity globally and we would see a natural market for refined product in the northeastern United States," says Brian Dalton, director of Labrador Refining, from his office in St. John's, the provincial capital. Whereas the current refinery has a capacity of 105,000 barrels a day, a potential new facility would be capable of refining three times as much petroleum.

The economy of the province is growing - it has doubled in size since 1997- but the population has shrunk about 10 percent in the past 15 years, and the unemployment rate is still Canada's highest, at 15.2 percent. Many Newfoundlanders have left to find work.

"The population shrinks due to fewer children being born and a continuing rate of out-migration," says Doug May, an economist at Memorial University in St. John's. "The oil industry, especially offshore, needs lots of capital but it doesn't need a lot of workers."

Dr. May credits the high unemployment rate with the fact that many of the fishing industry's seasonal workers are listed as unemployed during the off-season while they wait for fish processing plants to reopen.

In spite of the mineral and oil wealth in Labrador, the business hub of the province is the capital of St. John's. One sign of its newfound riches is the price of residential real estate. Though the compact city is still affordable - the average house is just $177,500 - housing values have jumped by 35 percent since 2002, according to broker Royal LePage, as the city becomes the administrative center for oil and mineral development.

For most of its history, the area's stark beauty was isolated and accessible only by air or one railroad line built in the late 1940s to the iron-ore mines. Now, Labrador is connected to the rest of North America by the Trans-Labrador Highway, a wide two-lane gravel road that opened in the mid-1990s.

The rustic roadway links what were once a series of mining and logging roads from Quebec to Goose Bay. But even with the newfound interest in this mineral-rich no-man's land, travelers on the 325 miles between Labrador City and Goose Bay will only see one gasoline station.

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