From more seismic to new training programs, Liberals betting heavily on natural resources
Budget 2019 includes $112 million for equity stake in Bay du Nord oil project
With millions budgeted for everything from equity investments to offshore seismic work to new training programs, Newfoundland and Labrador's Liberal government is continuing to bet heavily on the natural resources sector.
And making zero apologies for doing so, amid a clarion call about the dangers of climate change and the burning of fossil fuels.
Budget 2019-20 was presented Tuesday in the House of Assembly, laying out a road map for growth in oil and gas, and mining.
Both sectors employ thousands of people and contribute billions to the province's fragile economy.
But these investments won't come cheap.
A Bay du Nord partnership
One of the big costs will be government's 10 per cent equity stake in Bay du Nord, with $112 million budgeted for this year as Equinor moves through the process of sanctioning the project.
Equinor is finetuning its plan in order to bring down development costs, but Natural Resources Minister Siobhan Coady told reporters Tuesday she's "still feeling very confident" the project will go ahead.
If approved, it will become the province's fifth producing oil project, and the first in the Flemish Pass.
If Equinor decides to shelve the project, the provincial government will not have to make any payments.
Seizing on seismic
The Liberals have also committed another $20 million to continue a long-running offshore seismic program to gather data it hopes will entice oil companies to step up exploration activities.
That's in keeping with a strategy to dramatically increase oil production and employment in an industry that already sustains roughly 7,000 direct jobs, along with many more in the supply and service sector.
"We're seeing good exploration happening offshore," Natural Resources Minister Siobhan Coady told reporters Tuesday.
ExxonMobil Canada, for example, is undertaking its first substantive exploration program since the early 1990s, she said.
The seismic program is being credited with helping attract eight new companies to the province in recent years, with more than $4 billion in exploration commitments and up to 100 exploration wells being planned.
"If one in five or six turns into profitable oil-producing projects, we could have 20 additional oil producing projects out there," said Finance Minister Tom Osborne.
The provincial government is projecting oil royalties will again top $1 billion for the upcoming fiscal year, representing nearly 18 per cent of the province's revenues.
Production is expected to grow to more than 94 million barrels, with government budgeting oil at $65 US per barrel.
One industry that is often overshadowed both locally and abroad by oil is mining, and the government hopes to change that.
More than $4.6 million will be spent on a geological survey to provide mining companies with more certainty ahead of any exploration programs. It's hoped this initiative can replicate the success of the offshore seismic surveys.
Part of that geological program includes an airborne geophysical survey that will map potential mining hotspots.
A new geological technician certificate program will also be piloted this fall at the College of the North Atlantic campus in Grand Falls-Windsor, at a cost of nearly $900,000.
Mining job numbers growing
The mining sector has experienced notable growth, with employment increasing by 11 per cent last year to 6,300 direct jobs, and the provincial government forecasts exports will grow by 38 per cent this year, driven largely by increased production of minerals such as nickel and iron ore in Labrador.
But the burning of fossil fuels and its impacts on climate change is forcing government officials to repeatedly defend its eagerness to invest in oil projects.
And Osborne did just that Tuesday, saying there will long be a need for oil, and describing the light, sweet crude produced in Newfoundland's offshore as some of the cleanest in the world.
"Oil is still very much part of the future. We wouldn't have oil companies spending billions in exploration if oil wasn't going to be needed," said Osborne.