Economic News Affecting St. John's

[PoscStudent]

Originally Posted by SignalHillHiker

Well, it's a $400 million investment by Ottawa in exchange for us giving up our minimum processing requirements, which I understand have been important for the fishery here. It's a way to prevent us from being some third world place where big players come in and extract resources with little or no benefit to us, and a way to ensure we get some of the far more lucrative secondary processing action.

We're giving up that right in exchange for a one-time payment of $400 million, of which we're actually contributing 30% ourselves. We're only getting $280 million from Ottawa.

The Maritimes don't have minimum processing requirements and fishers are able to get more money there when selling raw products than in NL. The MPRs are only eliminated for the EU and it's not believed by the government or the FFAW that they can compete with NL fish plants when it comes to processing due to costs.

[SignalHillHiker]

Well, that sounds really promising then. Fingers crossed!

[J_Murphy]

Budget day in the capital city is December 9th - and it's likely that there will be what city council is calling a small increase in the mil rate. The city is in the middle of a three-year budget plan which calls for massive spending on capital works - about $270 million over three years. Pre-budget consultations wrapped up on the weekend with input from the public on numerous aspects of operations, including taxation, spending, services, and busing.

Finance chair Danny Breen says people generally approve of the approach that council is taking in keeping expenses down as much as possible.

Councillor Breen says some people are also concerned about the cost of using public transit

http://www.vocm.com/newsarticle.asp?...40362&latest=1

[J_Murphy]

A report on salary trends for 2014 suggests salaries in Newfoundland and Labrador are now higher than in any other Atlantic Canadian province.
With salaries in Halifax, N.S., used as a base figure, the report prepared by Gerald Walsh Associates used information from Statistics Canada, surveys from various professional and industry, and its own information on placements to determine a factor figure. That figure can then be used for comparing salaries for the same jobs in other Atlantic Canadian cities.

The report apples a factor of 1.05 to St. John’s, meaning the salary for a job in Newfoundland and Labrador’s capital city is likely five per cent higher than what the salary would be for the same job in Halifax.

Other Atlantic Canadian cities were given factors ranging from 0.90 to 0.94.

“The energy sector has contributed to steady salary increases in Newfoundland and Labrador,” said Gerald Walsh in a news release. “In many cases, salaries in that province will be five to10 per cent higher than the rest of Atlantic Canada.”

The report also found the average salary in Atlantic Canada will likely increase by 2.3 per cent in 2014. That would be down from the average salary increase experienced over the past year of 2.5 per cent (the last Gerald Walsh Salary Guide predicted a 2.6 per cent salary increase for 2013).

The report suggests the average salary increase in Atlantic Canada falls below expectations for the rest of the country, which range from 2.6 per cent to 3.1 per cent in 2014.

The salary guide relied on data from the public, private and not-for-profit sectors

http://www.thetelegram.com/Business/...on%3A-report/1

[jeddy1989]

Originally Posted by J_Murphy

http://www.thetelegram.com/Business/...on%3A-report/1

awesome!

[jeddy1989]

Jim Flaherty says he is open to Hibernia sale

Federal Finance Minister Jim Flaherty says Ottawa is open to discussing a potential sale of its stake in the Hibernia offshore oilfield off Newfoundland and Labrador.

However, Flaherty says the federal government has not directly considered the possibility as it looks at other potential asset sales.

He also refused to say how much such a sale might raise for federal coffers.

Flaherty made the comments Tuesday in Edmonton during a moderated question-and-answer session following the fall economic update.

Former Newfoundland and Labrador premier Danny Williams first offered to buy Ottawa's 8.5 per cent stake in Hibernia in October, 2010.

The oilfield is located about 315 kilometres southeast of St. John's.

http://www.cbc.ca/news/canada/newfou...sale-1.2424767

[PoscStudent]

Among provinces only Alberta has higher weekly earnings than NL, though NL and SK are basically tied and rotate between second and third. (Rotate is not the right word at all)

[displacednewfie]

Originally Posted by J_Murphy

http://www.thetelegram.com/Business/...on%3A-report/1

Without sounding like a Debbie Downer, would we rank so high if it wasn't for the Offshore Oil and the Construction boom?

[kwajo]

Well to be fair, that's like doubting if Alberta would be doing as well without the oil industry.

[jeddy1989]

Originally Posted by kwajo

Well to be fair, that's like doubting if Alberta would be doing as well without the oil industry.

hahaha exactly!

[Architype]

Originally Posted by displacednewfie

Without sounding like a Debbie Downer, would we rank so high if it wasn't for the Offshore Oil and the Construction boom?

I recently read an estimate that more than 40% of Nfld's GDP is from the oil industry.

Meanwhile, here's another nice article on St. John's:

OIL BOOM: Offshore drilling brings downtrodden seaport back from near-extinction

http://www.eenews.net/stories/1059990110

[displacednewfie]

Originally Posted by kwajo

Well to be fair, that's like doubting if Alberta would be doing as well without the oil industry.

Oh don't get me wrong.......I am not doubting that at all. It's just that we hear from various economists and from various governments that our future is so bright that we have to wear shades, and it's just kinda hard to see this when we see the effect it is having on those that are not involved in the Oil industry.

Contrary to popular belief the grass is not always greener in the land of Allison Redford.

[PoscStudent]

Originally Posted by displacednewfie

Oh don't get me wrong.......I am not doubting that at all. It's just that we hear from various economists and from various governments that our future is so bright that we have to wear shades, and it's just kinda hard to see this when we see the effect it is having on those that are not involved in the Oil industry.

Contrary to popular belief the grass is not always greener in the land of Allison Redford.

Well because of oil money the government has been able to offer high raises to public service workers in recent years, which set a precedent and saw large pay increase in other areas. More money in people's pockets means more spending at businesses, which creates jobs.

[Marty_Mcfly]

I feel as if the jobs that have no connect with the oil/natural resources industry still have low wages, anything that could have some slight connect with higher industry does have a higher wage than many parts of the country. For example: wages for chemists/lab techs in the city are pushing 30 bucks an hour in attempt to keep everyone from automatically jumping into the oil industry.

Comparably, wages everywhere in Alberta are high everywhere to keep people from jumping into labour positions. Case in point, Tim Hortons locations may pay you close to 16 bucks an hour in attempt to keep pace with labour camps; both jobs require no intensive education to obtain.

[SignalHillHiker]

Originally Posted by kwajo

Well to be fair, that's like doubting if Alberta would be doing as well without the oil industry.

It's like doubting how anywhere would be doing without its main industry.

"How would Toronto be faring without legal and financial services?"
"How would Hamilton be faring without steel?"

It's just a... pointless question.

[Copes]

Originally Posted by PoscStudent

Well because of oil money the government has been able to offer high raises to public service workers in recent years, which set a precedent and saw large pay increase in other areas. More money in people's pockets means more spending at businesses, which creates jobs.

This.

The number one concern when considering that 40% number is making sure that we diversify while the oil money is here. With new off-shore finds, life will be good in this province for the foreseeable future. Definitely during my working life. However, we need to be looking at the future NOW while we have the money to invest. Having 40% of our GDP coming from a single industry is only worrying if that industry goes away. When the industry is gone, it is too late. We're laughing now, but we should also be planning.

Luckily with St. John's in an excellent position to become a hub for arctic exploration, the future is very bright. We need to start pumping R & D dollars into that now though, IMO.

[BigRedSpecial]

Originally Posted by Copes

Luckily with St. John's in an excellent position to become a hub for arctic exploration, the future is very bright. We need to start pumping R & D dollars into that now though, IMO.

One thing I want to say about this, is my company has actually shied away from contracts off Greenland's coast because even after increasing our staff 2.5x, we'll have more work than we can handle just from exploration around Newfoundland. Add to that the work Shell is doing off Nova Scotia, and we're swamped.

A lot of people think we're past our peak here in Newfoundland, but (in terms of exploration at least) we're only getting started.

That being said, I agree 110% with what you're saying. Make hay while the sun shines.

[displacednewfie]

Originally Posted by SignalHillHiker

It's like doubting how anywhere would be doing without its main industry.

"How would Toronto be faring without legal and financial services?"
"How would Hamilton be faring without steel?"

It's just a... pointless question.

How is it pointless? I know I have been gone for 3 years now, but has the province or city done anything to diversify the economy? St. John's like the MAJORITY of ALBERTA is floating on the clouds of OIL & GAS.

There are a large amount of people that do not work in that Industry, and unlike Alberta, wages in NL are not competitive. I looked at a job posting for my field last night online and they wanted 7+ years experience and are offering a pathetic 45K as a yearly salary for that position.

[PoscStudent]

^ Innovation Lives Here, don't ya know!

http://www.innovationlivesherenl.ca

[Trevor3]

Originally Posted by displacednewfie

How is it pointless? I know I have been gone for 3 years now, but has the province or city done anything to diversify the economy? St. John's like the MAJORITY of ALBERTA is floating on the clouds of OIL & GAS.

There are a large amount of people that do not work in that Industry, and unlike Alberta, wages in NL are not competitive. I looked at a job posting for my field last night online and they wanted 7+ years experience and are offering a pathetic 45K as a yearly salary for that position.

It's not a pointless question, it's just an obvious answer. St. John's is tied to the oil and gas industry. Corner Brook is tied at the hip to its mill, Port-aux-Basques to the ferries, Long Harbour and the processing plant. Take any one of those away from the communities and they will suffer.

St. John's and Alberta have been and still are floating on the profits of oil and gas, but the good news is that the future of oil and gas development looks bright. There have been several discoveries recently that bode well for the future, and Hebron is still in the construction phase. We are past peak oil on a few of the current operations but they still have several years of work ahead of them and any losses will be negated by newer projects coming along. Providing there is no crash in the price of oil, both Alberta and St. John's should be healthy for quite some time.

That said, we do need to be developing industries that are sustainable long term away from the oil and gas industry. The concept behind Innovation NL is great, nurturing small business and start-ups, but obviously it's a far cry from developing sustainable long term industry in the province.