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Monday, September 17, 2007

Newfoundland and Labrador Politicians Ignore Golden Economic Opportunity

With an election getting underway in Newfoundland and Labrador the political parties will soon begin promoting their platforms in earnest and talking up their vision of the future. Most of their talking points will revolve around saving rural areas, economic development, outmigration and natural resources.

While the election goes ahead there is an opportunity already on our doorstep that can help revitalize some rural areas, drastically improve economic activity in the province, reverse outmigration and allow us to leverage our natural resources. Unfortunately all the mainstream parties are giving it very little attention.

As sad as the reality of the situation is, decades of government and industry inaction on global warming has opened up a major economic opportunity for Newfoundland and Labrador. One that could dramatically reshape our reality, put us front and center on the international stage and drive massive growth. The opportunity is real but it will never be realized unless someone acts soon.

The latest satellite images show that polar ice is melting at a staggering rate, far faster than anyone previously projected. As a result, it was announced this week that the much dreamed of Northwest Passage is, as I write this article, ice-free and navigable. It’s a reality that will become more common place and last for longer and longer periods of time in the coming years.

While governments around the world spend their time disputing ownership of the passage shipping companies, oil and gas enterprises and manufacturing giants are wasting no time preparing to fully utilize the route as a cost effective means of transporting goods and materials worldwide. While those two camps are busily planning for this reality Newfoundland and Labrador's political leaders are all but ignoring it.

The ability to use the North West Passage as a shipping route will allow commercial vessels to cut thousands of miles off their journeys around the world, save billions of dollars in costs and increase transportation efficiency by allowing the use of so called Post Panamax vessels, ships far too large to navigate the Panama Canal.

Already B.C. is touting the passage as an “express trade corridor” to Asia. The developers of a new shipping terminal that opened in Prince Rupert this week are banking on a largely ice free passage to cut more than two days and nine thousand kilometers off shipment times between Europe and Asia. This will result in huge savings for industry and open up unheard of opportunities for northern ports.

Considering that B.C. sits on Canada’s west coast approaches to the North West Passage it makes perfect sense that the province should position itself as a preferred port of call. The question then becomes, why is Newfoundland and Labrador not doing more to ensure its full participation in this new world reality?

Just as BC sits on Canada’s Western approaches to the North West Passage, Newfoundland and Labrador, not Nova Scotia, sits on its eastern approaches. Why then have talks been underway for years regarding an Atlantic Gateway concept that would see Nova Scotia take full advantage of the situation instead of the true Atlantic Gateway province Newfoundland and Labrador?

A quick look at any map of North America clearly indicates that Newfoundland and Labrador is in a perfect location to act as a port of call for ships traversing the passage on their way to and from Europe or up the St. Lawrence Seaway.

The province sits on the most easterly edge of North America, is closer to Europe than any other North American port and, in the case of large Post Panamax vessels, needing to offload to smaller ships that can navigate the St. Lawrence Seaway, the straits between Labrador and Newfoundland provide much easier access than does Nova Scotia.

So why are no major plans being touted for the province?

Newfoundland and Labrador has many available ports that could serve as trans-shipment points. Some have very deep water and remain ice free all year round. While others, especially in Labrador, ice over in winter, the fact that shipping activity will only take place in the North during times when the North West Passage is ice free means this would does not pose a problem.

In addition to the province’s ideal geographical position between North America and Europe, it is also in a unique economic position because of its distinct relationship with France.

Just off the Newfoundland coast sit the French islands of St. Pierre and Miquelon. Due to the historical ties and physical proximity of these two French islands, special trade and co-operation agreements already exist that can be built upon to take full advantage of Canada’s NAFTA and France’s EU trade regulations in conjunction with new shipping opportunities.

Taking full advantage of this situation could bring new life and much needed employment to dying rural areas. It would allow Newfoundland and Labrador to once again adopt its historical position as a key international port of call. In addition to direct shipping activity, the influx of products and raw materials from around the world would also open up growth opportunities in manufacturing and help reduce the cost of importing consumer goods to the province.

So why is Newfoundland and Labrador so slow in getting out of the starting gate? This is not a new idea so why is nobody acting on it? There are individuals like, local entrepeneur David Rudofsky, who have been promoting this opportunity to government for years. Nobody seems to care.

With Nova Scotia already touting itself as the new Atlantic Gateway some people believe it’s already be too late for Newfoundland and Labrador to make its mark. I don’t believe that for a minute. Our neighbors in the Maritimes may be promoting themselves for this role but as I said in my opening, wanting something doesn’t make it so.

Business and industry operate under some pretty basic principles when you get right down to it. While Ottawa, for political reasons, may support one province over another when it comes to development funding and assistance the companies involved couldn’t care less about the politics of the situation. Their only interest is in finding the most cost effective means to produce and market their products. No matter what anyone says, if utilizing facilities in Newfoundland and Labrador can save them time and money over going somewhere else, that’s exactly what they’ll do.

The problem is, unless someone listens and acts soon the international business community will never get to make that choice.

The reality of today is not what it was a few years ago. New challenges and new opportunities abound, so why isn't this opportunity even a matter of discussion during the current election?


Anonymous said...

I'm not sure exactly how BC would benefit. My first impression is that Northwest Passage traffic would circumnavigate Alaska and head directly to Europe or vice versa to Asia. Isn't the Northwest Passage only important as a quicker link between Asia and Europe?.

I'm not cynical and I know of and support Dave Rudofsky's proposal. At the same time I'd like to know how NL could position itself as a port of call on this trade route. I can certainly see it being better positioned than BC for example. NL is pretty much on the route where BC would require a little bit of a detour down the Alaskan peninsula for traffic between Asia and Europe.

Glenn said...

"so why isn't this opportunity even a matter of discussion during the current election?"

Because, as your map shows, it would benefit the West Coast and Labrador. The seats are on the Avalon. Sound familiar? Forgive me if I sound cynical.

Also the message is about Ottawa holding us back and look, 75% appoval rating. A significant % is because of that message perception. Therefore we don't have to debate opportunities and ideas like yours, or debt reduction, fishery co-management or lower Churchill development. It's all about no more giveaways.

We need a shift. Hopefully the PC's will adapt since they are most likely to form government for the next 4 years.

I like your idea much better.

When will NLDL run provincially? ;)

BTW, what's up with the NLDL site?

Patriot said...

Hi, to the question of NLDL running provincially. NLDL is not a political party. It's an advocacy group intended to help the average Joe (or Jane) find a voice not always found in politicians of any stripe or political level. It's sort of like a union for citizens, power in numbers and all that.

As for the web site, there was some problem with the company hosting it and it is currently down while being updated, given a new look and moved to a new service provider. It's hoped it will be back online soon.

Hope this answers your questions.

rant said...

well Patriot,sometimes you have it and sometimes you dont.

And ,Im sorry but ,i couldnt disagree with you anymore on any such topic.

WHY,in the name of GOOD GOD would we want all that traffic coming from Central Ontario Manufacturers going thru our clean shores I dont know.

Sorry,make them go around, sounds pretty good to me.

Jack Layton said...

Hey - check this out:

The federal NDP and yet another "Coast to coast" campaign from "Halifax to Vancouver"

malone said...

i enjoy youre blog very much. this article is quite interesting. do you have information on what nova scotia's done for their bid?

Patriot said...

Hi Malone,

I don't have any specific documentation to point you towards regarding NS but they have been lobbying federally for assistance to grow the opportunity and have been promoting themselves as the logical choice for quite some time. I also belive there are plans in the works for new port facilities with this in mind.

I'm sure you can find a fair bit on this by searching the web.

In NL some people have been pushing the idea with government but are getting little positive feedback.