Oil, ore and inquiries: 10 things to watch for in 2016

A new year is upon us, and what will it bring? There's never a shortage of news in Newfoundland and Labrador, so let's look into the future and list 10 things to watch for in 2016.
Hibernia is one of three producing oil platforms in Newfoundland's offshore. (Hibernia Management Development Company)

The 12 months of 2015 brought us plenty of newsworthy events. There was hardship in the oil sector, pain in the Labrador trough and a tragic shooting involving a member of the premier's protective security unit.

The political landscape was transformed by two elections, the court system featured some high-profile cases and the province's economy teetered on the brink of crisis.

It was hardly a red-letter year for the province.

Will things turn around in 2016?

Here's a list of what we expect will command our attention over the next 12 months.

1. Price of oil

It's been topic No. 1 since prices began to plummet in mid-2014, and that's not expected to change in 2016.

Newfoundland and Labrador's economy is heavily dependent on royalties from natural resources, most notably offshore oil.

Thousands of workers commute to jobs in western Canada's oilpatch, and the drop in prices has delivered a double blow to this province's economy, with many of them now staying home.

The price for a barrel of Brent crude fell to a seven-year low in December, and that collapse in prices has resulted in record deficits. The resulting erosion in confidence has slammed the brakes on just about every facet of the economy.

No one is prepared to forecast a rebound any time soon, ensuring that struggles in the oil industry will be making plenty of headlines in 2016.

2. Province's fiscal frailty

Premier Dwight Ball has clearly stated that the economy is the No. 1 priority of his new government.

After a decade of record growth and prosperity, the Liberals take over at a time of economic uncertainty.

Premier Dwight Ball says the province's economy will be priority No. 1 in 2016. (CBC)

Their first budget will be brought forward in the spring, and it will be one to watch.

Ball has promised to avoid widespread cuts to the public sector, committing instead to reducing job numbers through attrition and looking for other opportunities to reduce government spending.

3. A trio of inquiries

It could be a year of public inquiries in the province.

Premier Dwight Ball has promised inquiries into the controversial cancelling of a Labrador paving contract with Humber Valley Paving, search and rescue services and the shooting death of Don Dunphy last spring by RNC Const. Joe Smyth, who was a member of the protective services unit that worked with former premier Paul Davis.

The RCMP investigation into Dunphy's shooting is expected to submit its report by the end of January.

4. Mining in Western Labrador

Good news has been hard to come by in this one-industry region of the province.

The neighbouring communities of Labrador City and Wabush have been hammered by a collapse in iron ore prices. 

The main entrance to the Iron Ore Company of Canada mine in Labrador City. IOC is majority owned by Rio Tinto, one of the world's largest mining companies. (John Gaudi/CBC)

Wabush Mines closed in late 2014, displacing hundreds of workers. The mine had been in operation for nearly a half-century, with several generations of workers digging ore from the site.

The Iron Ore Company of Canada operation in Labrador City continues to employ roughly 2,500 people throughout the entire operation.

But company officials admitted late in 2015 that despite extensive improvements to productivity and cost reductions, the operation is losing money because of low prices.

The entire region is hoping for a rebound in the market, but is also bracing for more hardship.

5. Fate of the CETA deal

The fate of a controversial agreement between Ottawa and a former Newfoundland and Labrador government  — Conservative cousins, no less — over a trade deal with Europe could once again be in the spotlight.

With Liberal governments now in power at both levels, there's hope for a settlement.

Newfoundland and Labrador's new Liberal government signalled immediately after it took office in December that it wants an agreement finalized on the CETA Fisheries Investment Fund. And during last fall's federal election campaign, then Liberal leader Justin Trudeau also offered his support.

The $400-million fund was announced in 2013, with Ottawa expected to pay 70 per cent. The money was to be used to offset losses incurred by the province's fishing industry for surrendering minimum processing requirements for products destined for the EU market.

But disagreements erupted after the former federal Conservative government said the fund will only cover "demonstrated losses," igniting a tense back-and-forth. 

Premier Dwight Ball has directed Steve Crocker, his new fisheries and aquaculture minister, to make the issue a priority. 

6. A faltering job market

The size of the province's workforce is expected to continue shrinking in 2016 as major construction projects begin to wind down and the affects of an overall downturn continue to buffet the economy.

A labour market outlook published by the provincial government in August projected the workforce will shrink by eight per cent by 2018. That's roughly 24,000 positions.

As of November, the unemployment rate in Newfoundland and Labrador stood at 13 per cent.

7. Integrating the Hebron topsides

Some milestones are expected for the Hebron project in the coming months.

The concrete gravity structure is under construction at Bull Arm, and the crucial integrating of the topside modules is expected to begin in earnest in 2016.

A Hebron topside module known as the drilling equipment set arrived at Bull Arm from Korea in November. It was the first complete Hebron module, and will be integrated with other components in 2016. (ExxonMobil)

The partners behind the massive project remain committed to first oil in late 2017, bringing to four the number of producing oil fields in the province's offshore.

8. Closer to power for Muskrat Falls

Construction of the Lower Churchill hydroelectric project is expected to pass the mid-way point in 2016.

Among the milestones expected to be met are the completion of the Strait of Belle Isle subsea cable, and the Muskrat Falls to Churchill Falls transmission line.

The nearly $8 billion project is scheduled to be completed by early 2018. It features an 824 megawatt hydroelectric dam on the lower Churchill River in Labrador, and more than 1,500 kilometres of transmission lines across Labrador and Newfoundland.

A 480 kilometre transmission line called the Maritime Link is also being built between the island of Newfoundland and Nova Scotia by Emera Inc.

The project has been dogged by controversy over its viability, and escalating costs.

The new Liberal government announced in late December it was commencing a review of the project.

9. Earle McCurdy: will he stay or go?

Questions about the political fate of unelected NDP Leader Earle McCurdy will likely be answered in the coming weeks.

McCurdy won a three-way race for the party's leadership in March, but failed in his bid to win a seat in the House of Assembly in the November provincial election.

McCurdy lost to Liberal Siobhan Coady in the district of St. John's West, and the NDP was reduced to just two MHAs.

In his concession speech, McCurdy said he had no regrets about the campaign or his decision to enter politics following a long career as a labour leader.

NDP Leader Earle McCurdy's uncertain political future should become clear in the coming weeks.

As for his own future, McCurdy put it this way on election night:

"It was quite some time ago, well before Sesame Street, that I learned to count to 10. And count to 10 is what I'm going to do now," he said on Nov. 30.

10. Awaiting justice for Captain's Quarters shooting death

The tragic shooting death of Larry Wellman during a robbery attempt at the Captain's Quarters in St. John's on Oct. 3 is expected to continue through the judicial system.

Brandon Phillips, 27, is facing a charge of first-degree murder in connection with Wellman's death.

The incident captivated the entire province after it was revealed that Wellman was fatally shot while trying to intervene in the robbery.

The case also took a political twist after Phillips was arrested following a week-long manhunt.

His girlfriend, Jade Ball, is the daughter of Premier Dwight Ball. She was present at the time of Phillips's arrest.

Brandon Phillips is charged with first-degree murder in relation to the shooting death of Larry Wellman in St. John's on Oct. 3. (CBC)

About the Author

Terry Roberts

CBC News

Terry Roberts is a journalist with CBC's bureau in St. John's.


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