TRANS LABRADOR HIGHWAY TRANSPORTATION IMPACTS AND BUSINESS OPPORTUNITIES PROJECT. Final Report

Transcription

1 TRANS LABRADOR HIGHWAY TRANSPORTATION IMPACTS AND BUSINESS OPPORTUNITIES PROJECT Submitted to: Transportation Working Group Central Labrador Economic Development Board (Zone 3) Southeastern Aurora Development Corporation (Zone 4) Labrador Straits Development Corporation (Zone 5) Nordic Economic Development Corporation (Zone 6) and Red Ochre Regional Board Inc (Zone 7) 3 Penney s Lane Port Hope Simpson, NL A0K 4E0 Submitted by: AMEC Earth & Environmental A Division of AMEC Americas Limited 133 Crosbie Road St. John s, NL A1B-4A5 In Association With: Opus International Consultants (Canada) Limited Otber January 8, 2010

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4 January 8, 2010 EXECUTIVE SUMMARY The 2009 connection of the Trans Labrador Highway between eastern and central Labrador is anticipated to bring changes to eastern Canada s regional transportation and distribution network. However, most of the major direct effects will occur in central and southeastern Labrador including the Straits as well as the Great Northern Peninsula on the Island of Newfoundland. To help facilitate addressing the potential impacts and opportunities of this road connection, the Regional Economic Development Boards for Zones 3, 4, 5, 6 and 7 (representing the geographic area from Happy Valley-Goose Bay to L Anse au Clair in Labrador as well as the Great Northern Peninsula from the St. Anthony to the Roddickton area and along the west side of the Peninsula to the south side of Bonne Bay) established the Transportation Working Group (TWG). This group wished to gain a comprehensive understanding of anticipated changes including effects on movement of vehicles and freight along with related business development opportunities. Recommendations from this analysis will provide business development guidance to Regional Economic Development Boards, the provincial government and local entrepreneurs for the next five years. Over the past ten years more than six transportation studies have examined various aspects of transportation in Labrador. While it may seem sufficient, transportation systems are fluid in that if one component changes, it affects all others thus altering distribution projections. A recent Newfoundland Labrador case illustrates this point. The reversal of the changes to the Labrador ferry system in 2003 had a profound and long term effect on travel transportation and set back businesses in southeastern Labrador for several years. In light of the current connection of highways in Labrador and their ability to affect passenger traffic and freight distribution in central, eastern and southern Labrador as well as northern and western Newfoundland, the system requires additional examination. Therefore, this study presents new information on the subject. The objective of this study is five-fold: To compile data on historical traffic patterns, traffic numbers and make informed consultations on future patterns To identify business opportunities associated with increased traffic flow upon connection of linkage of Route 500 / 510 of the Trans Labrador Highway To complete a current and future cost analysis of the various freight transportation modes and routes for Zones 4 and 5 To identify the most cost effective terminal to service northern Labrador To identify potential risks, threats and challenges to business. Page (i)

5 January 8, 2010 Traffic Projections Connection of the last link of the Trans Labrador Highway between Happy Valley Goose Bay and Cartwright will generate additional traffic along the Trans Labrador Highway and Route 430 in the Northern Peninsula. Traffic increases will arise from several sources including increased intercommunity travel, tourism, and a modal shift from the Labrador Marine Service to the highway. Another potential source of additional traffic is the extension of the ferry service across the Labrador Straits from 9 to 12 months of the year. The estimated increase from all of these sources ranges from 65 to 120 vehicles per day on average over the year. Most of this traffic will be the result of new trips rather than the diversion of traffic from the existing marine services. As with completion of Phase II of the highway, the increase will likely occur over a fairly short time period and then traffic volumes will plateau. Average daily volumes during the summer months will be higher than during the winter due to a number of factors such as tourist travel, seasonal ferry services, and weather. It is estimated that traffic volumes during the summer will be twice as high as the annual averages. Traffic volumes on the Straits Ferry are expected to increase by 65 vehicles per day on average for the year and 130 vehicles per day during the summer. Considering that the MV Apollo makes five crossings per day, 130 vehicles would result in approximately another 25 vehicles per crossing. Future growth rates are difficult to estimate. Insufficient traffic volume data are available to determine historical growth rates on the Trans Labrador Highway. Traffic on the MV Apollo Vehicle has levelled off since 2003 after Phase II of the Trans Labrador Highway opened (see Figure 7-1 and Table 7-2). Visitation at national historic sites has decreased as is the trend throughout Canada, but interest in Gros Morne National Park continues to increase. Generally, passenger traffic (both persons and vehicles) on the Marine Atlantic service between Newfoundland and Nova Scotia declined between 2000 and 2006 at an average annual rate of 4 percent per year while commercial traffic grew at an average rate of 2 percent per year (Source: Marine Atlantic). The population of the study area is forecasted to decline from 31,200 to 30,400 between 2009 and This represents an average annual growth rate of negative 0.2 percent. Growth rates of 0 and 3 percent were selected for the forecast. Zero percent represents the status quo and 3 percent represents the higher range of potential traffic growth. Table ES-1 presents forecasted traffic volumes (existing plus new traffic) for the next 10 years on the Trans Labrador Highway for the two growth rates. 1 Population Projections for Newfoundland and Labrador. Economics and Statistics Branch, Department of Finance. April Page (i)

6 January 8, 2010 Table ES-1: Forecasted Annual Average Daily Traffic Volumes on the TLH Highway Segment Average Daily Volumes in 2010 and 2020 under 0% Growth Scenario Average Daily Volumes in 2020 under 3% Growth Scenario New highway between HVGB and Cartwright Junction Rte 510 between Cartwright Junction and Port Hope Simpson Rte 510 between Port Hope Simpson and Red Bay Rte 510 between Red Bay and Blanc Sablon Straits Ferry Rte 430 between Port au Choix and St. Barbe Source: Opus International 1,270 1,700 Future Costs for Zones 4 and 5 The third phase of the highway will decrease freight transportation costs between Central Canada and Labrador for much of Zone 4 but not for Zone 5. Freight transportation costs between Port Hope Simpson and Montreal will be similar regardless of whether the Trans Canada Highway through Atlantic Canada or the Trans Labrador Highway is used. However, travel times on the Trans Canada Highway will be approximately four hours longer. Travel costs and times between Montreal and points north of Port Hope Simpson will be lower on the Trans Labrador Highway compared to the existing route through Atlantic Canada. The new highway will also decrease the costs of shipping goods between Happy Valley Goose Bay and the Island of Newfoundland. It will cost approximately 50 percent less ($330 versus $723) to ship 1.5 tons of freight from St. John s to Happy Valley Goose Bay via the Labrador Straits and Trans Labrador Highway compared to the existing Labrador Marine service. Travel times will also be reduced to 22 hours as opposed to the current 32 to 45 hours. Terminal for Northern Labrador Transportation costs to provide marine service to Northern Labrador and Nunavut from Happy Valley-Goose Bay versus Cartwright are similar because the distance from either to north coast communities is almost the same. Any distance advantage of sailing from Cartwright rather than Happy Valley-Goose Bay is offset by the requirement to travel to Rigolet. The study team did not made a recommendation on the location of the transhipment facility, as this decision will ultimately be made by government. Since northern Labrador does not have Page (ii)

7 January 8, 2010 the benefit of a linked road system, marine transportation will likely continue to be subsidized by the provincial government. Given this likelihood and the preference of the northern agents to be serviced by the Island, some place on the Island will probably act as the port for northern Labrador. Case Studies The study team reviewed several transportation initiatives and studies to better understand potential impacts (opportunities and challenges) that might arise from connecting Highway 500 to 510. Unfortunately, most highways are studied prior to major road construction to identify potential impacts (both positive and negative), but few have been monitored or studied afterwards to determine the accuracy of those predictions. In general, post construction impact studies indicate that improved roads and linkages: reduce or eliminate many previous weather and seasonal delays; reduce operating vehicle costs leading to lower prices for freight and passenger services; increase traffic flow at rates higher than before the improvement, particularly among larger, more efficient trucks; increase substantially the supply of road services, especially road passenger and shareride vehicles offering frequent service, bussing services, freight delivery and courier companies; increase ownership of motorized vehicles, both of cars and trucks; decrease drastically the access time by the rural population to regional centres for community services (e.g. health, education, social services); Increase rapidly the rate of modernization including increased technological capacity, delivery of fresh produce, delivery of large items by tractor trailer that previously came by boat, accessibility to specialized health care at regional centres, employment opportunities with the Department of Transport, regular mail delivery, contracts to local business; and Improve the overall quality of life of citizens in communities linked directly to the roads. The overall improvement noted above was a result of both better roads and new facilities, whose construction was made possible in part by the roads. Further, road networks in many rural remote areas are inextricably linked with communications. In one case (NWT), communication services (i.e. cell phone coverage) were instituted shortly after construction for reasons of safety, policing, maintenance and tourism. Another jurisdiction (Yukon) found that well distributed communications about road conditions, services and expectations were essential elements for the travelling public for safety reasons. In another case (China), it was argued that simply building highway networks without considering other aspects of transport organization (e.g. communications) made little sense because the simultaneous development of highways and rural telecommunications enables historically disadvantaged populations to better interact with distant markets, determines the demand for Page (iii)

8 January 8, 2010 rural goods and skills and permits more efficient and more effective organization of existing transport services. These impact studies also found that regional economic benefits could best be achieved if the road linked sparsely populated regions of current or future economic potential with large population bases (e.g. North West Territories, Peru). Opportunities The new highway will provide a year-round alternate connection between southern Labrador and points west and between Happy Valley-Goose Bay and points east. The new highway will provide shorter travel times compared to existing surface options but at a higher cost per vehicle (i.e. air fares are lower than vehicle cost per person, but if a vehicle contains more than one passenger, the cost decreases). In order to identify opportunities as a result of the Trans Labrador High connection, an understanding of how the Labrador economy might play out over the next few years is necessary because the highway and the economy are inextricably linked. Much of Labrador is rich in natural resources (minerals, hydro power, forestry and fishing) and like many other similar rural regions, its economy is dependent on, and reflects, current economic conditions and political situations. As the current recessionary climate improves, opportunities, particularly for central and western Labrador, will also improve, and this, in turn, will positively affect other regions of Labrador. Because of the uncertainly regarding the rate at which the economy will improve, several economic scenarios are explored in this study. The most optimistic long term scenario for development in the three southern Labrador zones is development of a major resource (e.g. Lower Churchill Hydroelectric project and/or additional mineral developments), ancillary supporting businesses (e.g. smelter), development of some smaller natural resource industries and, as a result of the new Trans Labrador Highway, stronger regional and sub-regional service centres and supporting businesses. A more likely midterm scenario, which would also provide a stimulus for Cartwright, would be the development of a combination of smaller resource industries (e.g. Mealy Mountains National Park, cruise ship, pellet plant), along with regional and sub-regional service centres and supporting businesses. The most likely immediate scenario is the expansion and development of a number of smaller businesses, which would probably be based on transportation (e.g. maintenance and repair, mechanical, gas, rental, bussing, courier); food (e.g. farm products, greenhouses, bakeries, restaurants); service (e.g. technology); contracting (e.g. plumbing, plastering, electrical, heavy equipment, cleaning). With more people travelling, more road services will be required including service stations, restaurants and accommodations as well as a greater variety of activities for road travellers. When connected in December 2009, the highway link between Happy Valley-Goose Bay and Cartwright Junction will change the provincial transportation system as it is known today, particularly regarding freight service. Truckers are paid by the kilometres they travel, not by the Page (iv)

9 January 8, 2010 delays they experience. If they can transport goods to the Island quicker and in better condition at least nine months of the year, some freight companies have said they will consider using the Trans Labrador Highway rather than the Trans Canada Highway through the Maritimes and Eastern Canada. If freight companies can take seafood products out of the province quicker and in better condition through Labrador than through Port aux Basques, they may also consider using the Trans Labrador Highway. While the lack of pavement is an irritant at best and a deterrent at worst for passenger travel, lack of pavement is not as much a deterrent for truckers. Cost factors freight companies will have to consider in making the final decision include the Trans Labrador Highway s longer length, lower speed limit, higher level of damage and limited services versus the seasonal ferry and long wait times at Port aux Basques. In the short-term, the volume of freight being carried on the MV Bond will shift to the highway as soon as marine service from Lewisporte to Cartwright is discontinued. Further freight growth will depend on an increase in demand for freight volume as a result of new businesses or expansions. In the long term central and western Labrador could benefit from the existing road because of greater interest in the eastern Arctic, the possibility of significantly reducing shipping times to places such as Iqaluit by trucking from Montréal to Happy Valley-Goose Bay and then shipping northward, improved marine technologies to address sea ice challenges, increasing interest in the mineral potential of central and western Labrador, and the possibility of the development of the Lower Churchill Project. In the long-term, the highway link between central and eastern Labrador could be important if interest continues to grow in exploration for natural gas offshore Labrador. The Great Northern Peninsula will also benefit from changes in the transportation system. With approximately $20 million expected to be expended for a three well oil exploration program near Parsons Pond, with Gros Morne National Park benefiting from an outstanding national and international advertising campaign and an infusion of funding in the Roddickton forest resource industry, the regional economy should improve. However, a key to future development is improving the existing transportation infrastructure including the ferry system from St. Barbe to Blanc Sablon, Quebec along with communications infrastructure. Professional and effective packaging of the Greater Northern Peninsula s many well established tourism attributes with the newly emerging ones of Labrador should provide a compelling reason for tourists to travel northward on Route 430 across the Strait of Belle Isle, and northward on Route 510 and 500, especially if the transportation services are in place. To take advantage of these opportunities, increased marketing efforts, improved infrastructure (e.g. community landscaping, public facilities, parking, lay-bys and look offs, coordinated signage and signage plazas), greater range of accommodation and food offerings, and increased natural and cultural products are needed Challenges While residents of rural Newfoundland and Labrador enjoy a fairly high quality of life, each economic zone of the study area is experiencing population loss (as has the province as a whole until recently). This can be attributed to out-migration of young adults from the province combined with a low birth rate. Since 1996 population decline in the study area has been most Page (v)

10 January 8, 2010 significant in the Labrador Straits and on the Great Northern Peninsula. Population loss has two potentially negative effects on local businesses: decline in local customer base and challenges to find people of employable age that are willing to work in the service industry. Many businesses in the study area have current capacity to provide increased services. This is due to loss of population as well as expansions that occurred in anticipation of increased business due to 2003 changes to the Labrador coastal ferry system. Tourism industry data shows that accommodations in all regions of the study area have capacity, although each of these areas experiences different seasonal capacities, occupancy rates and types of accommodations required. Because of the challenge of finding meaningful well paying employment twelve months of the year, some critical services have been lost in both southern Labrador and on the Great Northern Peninsula, especially in the auto mechanical and hospitality field. In business sectors and niches where capacity exists, developing new ones at this point would diminish the economic return of existing businesses. Summary Based on data research; the previous experience of Route 510 and the Dempster Highway and other similar highways, a sufficient number of travellers are expected to use the new road in the short term (one to five years) to warrant strengthening and expanding existing road services and communications as well as starting some new businesses based on transportation, food and accommodations, service and contracting. This should be followed by planning for larger regional and sub regional service centres, expanded routings and opportunities linked to some of the large industrial projects, should they occur. Page (vi)

11 January 8, 2010 TABLE OF CONTENTS PAGE 1.0 INTRODUCTION STUDY AREA PROFILE Economic Zone 03 - Central Labrador Development Board Economic Zone 04 - Southeastern Aurora Development Corporation Economic Zone 05 - Straits Area Development Corporation Economic Zone 06 - Nordic Economic Development Corporation Economic Zone 07 - Red Ochre Regional Board Inc EXISTING TRANSPORTATION SYSTEM Road Trans Canada Highway (Route 1) Route Route Routes 510 and Route Trans Labrador Highway Phase III Air Marine MV Sir Robert Bond MV Northern Ranger MV Apollo MV Marine Eagle MV Astron Existing Freight Distribution System TRANSPORTATION COSTS AND RATES Transportation Costs Truck Costs Marine Costs Passenger Vehicle Costs Current Subsidy Programs Air Foodlift Subsidy (AFS) Program Food Mail Program Labrador Transportation Initiative Fund Labrador Travel Subsidy...25 i

12 January 8, Transportation Rates Current Traffic Patterns and Challenges SERVICE INDUSTRY PROFILE - CAPACITY Economic Zones Economic Zone 03 - Central Labrador Development Board Economic Zone 04 - Southeastern Aurora Development Corporation Economic Zone 05 - Straits Area Development Corporation Economic Zone 06 - Nordic Economic Development Corporation Economic Zone 07 - Red Ochre Regional Board Inc Planned Projects POTENTIAL FUTURE ROUTING OPTIONS Passenger Travel Freight Transportation Freight Transportation Rate and Cost Comparison TRANSPORTATION SYSTEM IMPACTS Demand for Existing Services...57 Demand for Existing Services Highway Impacts from Linking of Trans Labrador Highway between Happy Valley-Goose Bay and Cartwright Junction IMPACTS, TRENDS AND OPPORTUNITIES Case Studies...70 Dempster Highway: Yukon North West Territories...71 Northern Transportation Network Yukon, Northwest Territories and Nunavut Opportunities Background Opportunities By Zone ESTABLISHING A TRANSHIPMENT TERMINAL FOR NORTHERN LABRADOR ACTION PLAN CONCLUSION ii

13 January 8, 2010 LIST OF TABLES Table 2-1: Central Labrador (Economic Zone 3) Population, Table 2-2: Central Labrador (Economic Zone 3) Indicators...4 Table 2-3: Southeastern Labrador (Economic Zone 4) Population, Table 2-4: Southeastern Labrador (Economic Zone 4) Indicators...5 Table 2-5: Labrador Straits (Economic Zone 05) Population, Table 2-6: Labrador Straits (Economic Zone 05) Indicators...7 Table 2-7: Great Northern Peninsula (Economic Zone 06) Population, Table 2-8: Great Northern Peninsula (Economic Zone 06) Indicators...8 Table 2-9: Great Northern Peninsula (Economic Zone 7) Population, Table 2-10: Great Northern Peninsula (Economic Zone 7) Indicators...9 Table 3-1: Overview of Airline Destinations...15 Table 4-1: Truck Operating Costs Per Km...21 Table 4-2: Estimated Marine Costs...21 Table 4-3: Comparisons of Marine Rates and Costs...22 Table 4-4: Annual Driving Costs for a Dodge Grand Caravan...23 Table 4-5: Current Freight Transportation Rates...26 Table 4-6: Existing Traffic Patterns - Labrador Central (Zone 3)...28 Table 4-7: Existing Traffic Patterns Southeastern Labrador (Zone 4)...30 Table 4-8: Existing Traffic Patterns - Cartwright...33 Table 4-9: Existing Traffic Patterns Labrador Straits (Zone 5)...35 Table 4-10: Existing Traffic Patterns Great Northern Peninsula (Zone 6)...38 Table 4-11: Existing Traffic Patterns Great Northern Peninsula (Zone 7)...40 Table 5-1: Annual available room capacity all zones ( )...43 Table 5-2: Fixed Roof Occupancy Rates, Economic Zone 3 ( )...43 Table 5-3: Fixed Roof Occupancy Rates, Economic Zone 4 ( )...45 Table 5-4: Fixed Roof Occupancy Rates, Economic Zone 5 ( )...46 Table 5-5: Fixed Roof Occupancy Rates, Economic Zone 6 ( )...47 Table 5-6: Fixed Roof Occupancy Rates, Economic Zone 7 ( )...48 Table 6-1: Passenger Travel Times, Distances and Costs...51 Table 6-2: Freight Route Analysis...54 Table 6-3: Marine Distance Comparison...55 Table 6-4: Impact of the Newly Connected TLH...56 Table 6-5: Comparison of Existing Rates and Costs...56 Table 7-1: Study Area Traffic Volumes...57 Table 7-2: Visitor Statistics to Parks Canada National Historic Sites...60 Table 7-3: Demand for Labrador Marine Services (Traffic in Both Directions)...62 Table 7-4: Highway Distances and Number of Dwellings by Economic Zone...64 Table 7-5: Estimated Traffic on the TLH from Intercommunity Travel...64 Table 7-6: Estimated Traffic Increases on the TLH from Straits Ferry Operating Year Round...65 Table 7-7: Vehicles and Freight Shipped by the Labrador Marine Service ( )...66 Table 7-8: Estimated Traffic Impacts on the TLH from Changes to the Labrador Marine Service...67 Table 7-9: Summary of Estimated Traffic Impacts on the TLH (annual average vehicles per day)...68 Table 7-10: Summary of Estimated Traffic Impacts on the TLH...69 Table 8-1: Future Traffic Patterns Central Labrador (Zone 3)...78 i

14 January 8, 2010 Table 8-2: Future Traffic Patterns Southeastern Labrador (Zone 4)...82 Table 8-3: Future Traffic Patterns Cartwright...87 Table 8-4: Future Traffic Patterns Labrador Straits (Zone 5)...90 Table 8-5: Future Traffic Patterns Great Northern Peninsula (Zone 6)...93 Table 8-6: Future Traffic Patterns Great Northern Peninsula (Zone 7)...96 Table 9-1: Selected Strengths and Weaknesses of Establishing a Transhipment Terminal in Cartwright and Happy Valley-Goose Bay...99 Table 10-1: Action Plan LIST OF FIGURES Figure 3-1: Map of Road Components...11 Figure 3-2: Airports of Newfoundland and Labrador...13 Figure 3-3: Map of Marine Routes...17 Figure 7-1: Labrador Straits Ferry Service: 10-Year Trend in Vehicular Traffic...58 Figure 7-2: Seasonal Distribution of Traffic on Labrador Straits Ferry Service...61 LIST OF APPENDICES Appendix A References Appendix B Consultation Participants Appendix C Consultation Results Appendix D Impact of TLH Connection on Freight Services and Costs Appendix E Additional Case Studies ii

15 January 8, INTRODUCTION The 2009 connection of the Trans Labrador Highway link from eastern to central Labrador is anticipated to bring changes to eastern Canada s regional transportation and distribution network. However, most of the major direct effects will occur in central and southern Labrador including the Straits as well as the Great Northern Peninsula of the Island of Newfoundland. To help facilitate addressing the potential impacts and opportunities of this road connection, the Regional Economic Development Boards for Zones 3, 4, 5, 6 and 7 (representing the geographic area from Happy Valley-Goose Bay to L Anse au Clair in Labrador as well as the Great Northern Peninsula from the St. Anthony to the Roddickton area and along the west side of the Peninsula to the south side of Bonne Bay) established the Transportation Working Group (TWG). The TWG wished to understand how the new transportation link to the rest of Canada and North America would change, enhance and create business development opportunities on the Great Northern Peninsula and central / southern Labrador. In February 2009, the Economic Development Boards jointly issued terms of reference (TOR) seeking proposals for consulting services. The selected consultants, AMEC Earth & Environmental along with Opus International and PF Collins, were asked to address the following objectives: Compile data on historical traffic patterns and volume for the regions discussed above, as well as other selected indicator routes, to make informed projections for the future; Complete a current and future cost analysis of the various freight transportation modes (air, road, marine) and routes for Zones 4 and 5 (Labrador Straits and Labrador Coast); Identify the most cost effective transportation terminal to service northern Labrador; Identify and evaluate realistic business opportunities associated with increased traffic flow upon connection of Route 500 to 510 of the Trans Labrador Highway; and Identify potential risks, threats and challenges to businesses within the five Economic Zones. Recommendations from this analysis will provide guidance to the Zonal Boards, government and the public at large in potential business development activities during the next five years. Section One of this report provides an introduction and background of this transportation impacts and business opportunities study. Section Two provides an overview of the study area, complete with a socio-economic profile of each of the five Zones, including population projections and well-being indicators. Section Three describes the existing transportation system in the study area with specific analysis of the following routes: Goose Bay to North Coast Goose Bay to Nunavut Cartwright to North Coast Cartwright to Nunavut 1

16 January 8, 2010 Avalon Peninsula to Goose Bay Avalon Peninsula to Cartwright Montréal to Goose Bay Montréal to Cartwright Montréal to L Anse au Loup Natisquan to Goose Bay Natisquan to Cartwright Section Four describes transportation costs for all modes of transit as well as analysis of current subsidy programs and an overview of the existing traffic patterns in the study area. Section Five describes the service industry capacity profile using fixed roof occupancy data broken down by Zone. Section Six presents potential future routing options featuring a cost breakdown analysis of transportation in the study area. Section Seven discusses the demand for existing Labrador transportation systems and a projection of future demand. Section Eight discusses transportation system impacts, trends and opportunities based on appropriate case studies in Canada and elsewhere. Based on this information as well as the information presented in the previous sections, a detailed analysis of changing traffic patterns and resulting opportunities by zone is provided. Section Nine discusses two possible locations of a transhipment terminal for Northern Labrador. Section Ten presents an action plan, with short and long term objectives broken down by Zone. 2.0 STUDY AREA PROFILE Data presented in the following sections was gathered from Community Accounts and is based on Statistics Canada s 2006 Census. Indicators used include economic self-reliance ratio, income support assistance incidence, personal income, average couple family income, employment insurance incidence and employment rate. Information about various zones was gathered from their individual web sites and strategic plans as well as regional tourism publications. The results are presented by the regional economic zones of the study area. Demographic data is useful to identify trends in any geographic area. Population change (e.g. birth, death and migration) and labour force statistics are useful for determining economic opportunity as investors may require sufficient employees within a specific catchment area and / or a critical mass of a local population as a market. Other indicators, such as income and age, affect the propensity to travel or purchase consumer goods. 2

17 January 8, Economic Zone 03 - Central Labrador Development Board This zone includes four communities, each with its own distinct identity and history. The community of Happy Valley began in 1943 as an area to house workers who came to construct the American Base known as Goose Bay. The settlements of Happy Valley and Goose Bay amalgamated into a single town in Today, the town is considered the service centre for central Labrador and the north coast, and several government departments serve much of Labrador. Sheshatshiu s origins began as a trading post where the Innu met to trade furs for supplies from the Hudson Bay Post. Today it is a fast growing community of more than 1,100 members of the Innu Nation. Current infrastructure includes a school, church, clinic, youth treatment centre, Band infrastructure, recreation facilities and several businesses. North West River was established in 1743 by Louis Fornel, a fur trader and merchant. The Hudson Bay Company established a trading post in 1839 and in 1914 Sir Wilfred Grenfell developed community services including a school, hospital and orphanage. In 1980 a modern bridge was constructed across the river and today many residents who are not working in the community commute to Happy Valley-Goose Bay for employment. Mud Lake was settled around 1850 as a trapping and fishing community and experienced growth in the early 1900s when the Dickie Lumber Company from Nova Scotia established lumber operations there. Today, Mud Lake has fewer than 60 people year round and is only accessible by boat in the summer and fall, snowmobile in the winter and spring and helicopter for emergencies. This zone is currently experiencing negative population growth. Table 2-1 shows population data from 1996 to Table 2-1: Central Labrador (Economic Zone 3) Population, Year Percentage Change Percentage Change Percentage Change (Labrador) Percentage Change (Province) Total 10,240 9, , Population Source: Community Accounts, 2009 (Based on Statistics Canada Census Data 1996, 2001, 2006) The population decreased by 5.9 per cent between 1996 and 2001 and by 4.8 per cent between 2001 and This can potentially be attributed to out-migration of young adults as well as a low birth rate among the non-aboriginal population. Increasingly residents have been attracted to high-paying jobs (for unskilled and highly educated individuals) in other parts of Canada, especially Alberta. This continues to pose challenges for local economies and employers. Residents of central Labrador enjoy a high quality of life which is due to a diversified economy with high-paying long-term employment and access to a variety of social and recreation

18 January 8, 2010 opportunities. The Department of Finance has projected (April 2009) that the population of Economic Zone 3 will increase to 9,270 in 2010 and to 9,441 by 2015, based on medium scenario assumptions. 2 Table 2-2 presents indicators for central Labrador. Table 2-2: Central Labrador (Economic Zone 3) Indicators Indicator Value Economic Self-Reliance Ratio (2006) 88.8% Income Support Assistance Incidence (2007) 9.2% Personal Income Per Capita (2006) $26,100 Average Couple Family Income (2006) $89,900 Employment Insurance Incidence (2007) 20.5% Employment Rate - (pop 18 to 64) (2005) 83.3% Source: Community Accounts, 2009 Strong points include economic self-reliance ratio, personal income, average couple family income and employment rate. This data indicates that the economy of the area is diversified and employment is high paying compared to the rest of the province. Compared to the rest of Labrador, Zone 3 has a high employment rate. The largest employers in the region are the Labrador-Grenfell Regional Health Authority, Sheshatshiu Innu First Nation and Social Services, Labrador School Board including its six public schools and the College of the North Atlantic respectively. The largest private sector employers are Serco, Woodwards and Northmart (CLEDB), 2006). Four large hotels and numerous restaurants are located in Happy Valley-Goose Bay. Economic focus for Zone 3 includes investor recruitment and attraction, tourism and culture, youth and operations. The economy of central Labrador has changed in the past five years from supply and service of military training to supply and service to mining and exploration, as well as government agencies and services. Additionally, Aboriginal self-government is developing in the region and a number of Aboriginal companies and joint ventures have been evolving (CLEDB, 2009). There is an optimistic economic atmosphere in the region. This is evidenced in an increase in new housing starts and expansion of many businesses. This can be attributed to speculation related to the Lower Churchill Hydroelectric Project and associated developments. Curbing this optimism has been the moratorium on uranium mining in Nunatsiavut, the global financial recession and the planned movement of Nunatsiavut offices out of the Zone (CLEDB, 2009). 2 Population Projects for the five economic zones are based on Medium Scenario Assumptions Fertility - The total fertility rate remains stable near 1.35 over the entire projection period. Mortality - Life expectancies continue to increase in line with recent trends in age-specific mortality rates. Male life expectancy increases by 2.7 years between 2008 and Female life expectancy increases by 2.5 years over the same period. Migration - After turning positive in 2008, net in-migration is assumed to continue through to 2016 due to increased levels of employment and construction activity related to the Hydromet facility in Long Harbour and the Hebron project. Net out-migration is assumed to return in 2017 as construction activity related to the Hebron project ends, but it trends to zero by Net in-migration is expected to return in 2020 and gradually increase thereafter to fill new jobs that are expected to be created as well as to replace baby boomers as they retire. 4

19 January 8, Economic Zone 04 - Southeastern Aurora Development Corporation The southeastern coast has a mixed history of Aboriginal, European and Newfoundland settlements based primarily on fishing and forestry. Many of the residents fished from the coastal islands (e.g. Battle Harbour) during the summer and fall and moved to inland bays (e.g. Port Hope Simpson, Lodge Bay) during the winter to harvest lumber. Many of the coastal islands and areas are now primarily vacant with the exception of Black Tickle, Williams Harbour and Norman Bay (which are the only communities in the region not connected by road). Battle Harbour is home to a tourist attraction that is used during the summer. Today, eight communities are located in the zone. Table 2-3 shows population change. Table 2-3: Southeastern Labrador (Economic Zone 4) Population, Year Percentage Change Percentage Change Percentage Change (Labrador) Percentage Change (Province) Total 2,875 2, , Population Source: Community Accounts, 2009 (Based on Statistics Canada Census Data 1996, 2001, 2006) The population of southeastern Labrador declined by 5.4 per cent between 1996 and 2001 and by 3.9 per cent from The population change in Zone 4 from was low compared to Labrador s other economic zones and to those of the rest of the province. Based on the Department of Finance population projections (April 2009), the population is expected to decrease to 2,582 in 2010 and increase to 2,598 by 2015, based on medium scenario assumptions. 3 Table 2-4 displays indicators for southeastern Labrador. Table 2-4: Southeastern Labrador (Economic Zone 4) Indicators Indicator Value Economic Self-Reliance Ratio (2006) 64.1% Income Support Assistance Incidence (2007) 10.2% Personal Income Per Capita (2006) $16,200 Average Couple Family Income (2006) $50,500 Employment Insurance Incidence (2007) 64.4% Employment Rate - (pop 18 to 64) (2005) 86.6% Source: Community Accounts, 2009 Zone 4 ranks high in employment rate, at 86.6 per cent. Employment rate is the number of individuals from ages 18 to 64 years who worked at least one week in 2005 divided by the population of that group. Coupled with a high employment insurance incidence, this indicates 3 See footnote 1. 5

20 January 8, 2010 that various short-term employment opportunities are available within the Zone. However, insufficient work exists to sustain long-term employment. This is typical in small coastal communities that are reliant on the fishing industry and its inherent seasonality. Current economic focus for Zone 4 includes energy / natural resources, human resources, local investment and tourism. Approximately 100 seasonal and year round businesses operate in the region. The majority of these are retail. The fishery employs the greatest number of people. The Labrador Fishermen s Union Shrimp Company, headquartered in L'anse au Loup, has plants in Cartwright, Charlottetown and Mary s Harbour. A snow crab processing facility is located in St. Lewis. Cartwright, Charlottetown, St. Lewis, Mary s Harbour, Port Hope Simpson and Lodge Bay have gas stations. Accommodations and eating establishments are found in each community connected by road with the exception of Pinsent s Arm (Lodge Bay has an eating establishment only). Battle Harbour is an internationally known heritage resort accessible by boat from Mary s Harbour or elsewhere by private boat. 2.3 Economic Zone 05 - Straits Area Development Corporation Aboriginal people are known to have inhabited the Straits area for thousands of years because 7,500 year old human remains were found near L Anse Amour. During the 1500s Basques whalers came to the region and built a large whaling station at Red Bay to process whale oil from the Strait of Belle Isle. L Anse au Clair was settled by the French in the early 1700s. Today, the Straits consists of eight communities which are experiencing population decline. Table 2-5 shows population change for Zone 4, the Straits area. Table 2-5: Labrador Straits (Economic Zone 05) Population, Year Percentage Change Percentage Change Percentage Change (Labrador) Percentage Change (Province) Total 2,060 2, , Population Source: Community Accounts, 2009 (Based on Statistics Canada Census Data 1996, 2001, 2006) The population decline from was the highest among the Labrador zones and among the highest of those in the province as a whole. Population projections developed by Department of Finance (April 2009) predict that the population of Economic Zone 5 will decrease to 1,804 in 2010 and to 1,731 by 2015, based on medium scenario assumptions. 4 Table 2-6 shows indicators for the Labrador Straits area. 4 See footnote 1. 6

21 January 8, 2010 Table 2-6: Labrador Straits (Economic Zone 05) Indicators Indicator Value Economic Self-Reliance Ratio (2006) 70.4% Income Support Assistance Incidence (2007) NA Personal Income Per Capita (2006) $19,200 Average Couple Family Income (2006) $57,300 Employment Insurance Incidence (2007) 52.7% Population Change ( ) -9.6% Employment Rate - (pop 18 to 64) (2005) 82.1% Life Expectancy (1996) 78.0 Source: Community Accounts, 2009 Economic Zone 5 ranks low in employment insurance incidence and high in employment rate at 82.1 per cent which results from strong entrepreneurial activity in the region. When compared with the rest of Labrador, it ranks high in employment rate and personal income. The fishery dominates the economy with 256 people employed in The most significant issues facing this industry are the aging workforce and transportation costs associated with getting product to market. Economic focus for Zone 5 includes the wild berry industry, craft industry, tourism, energy, transportation, infrastructure, human resources and regional cooperation (LSDC, 2008). The Straits has always been known as an entrepreneurial region. Several large distribution businesses serve not only the Straits, but also Quebec s Lower North Shore and the southeastern coast of Labrador with a variety of products including dry goods, recreational vehicles, hardware and furniture. A number of products are manufactured in and exported from the region including furniture, crafts and berry products. Local transport companies (trucking and airlines) distribute goods throughout the three regions. At least six service stations are located in the Straits. Accommodations and restaurants are found in all communities except the very smallest. 2.4 Economic Zone 06 - Nordic Economic Development Corporation This zone consists of 36 communities on the Great Northern Peninsula from Anchor Point north to St. Anthony and east to Englee. The area has a mixed history of European descendants and boasts the first European settlement in the New World at L Anse aux Meadows, on Newfoundland s northern tip. Traditionally, most of the settlements in this Zone were primarily based on the fishery, with the exception of Roddickton, which focused on the forestry sector. The area has a distinct connection with Sir Wilfred Grenfell and the International Grenfell Association. The Grenfell Historic Properties are located in St. Anthony, celebrating his legacy and St. Anthony as the headquarters for the Grenfell Mission. The population of the Great Northern Peninsula has experienced significant losses since

22 January 8, 2010 Table 2-7 shows population change for Zone 6, the northern part of the Great Northern Peninsula. Table 2-7: Great Northern Peninsula (Economic Zone 06) Population, Year Percentage Change Percentage Change Percentage Change (Province) Total 11,490 10, , Population Source: Community Accounts, 2009 (Based on Statistics Canada Census Data 1996, 2001, 2006) The population of Economic Zone 6 decreased by 12.3 per cent between 1996 and 2001 and 12.2 per cent between 2001 and This represents the greatest population decrease among all economic zones of the province. Based on Department of Finance population projections (April 2009), the population is expected to decrease to 8,479 in 2010 and to 8,264 by 2015, using on medium scenario assumptions. 5 The decline is a result of out migration and a low birth rate. Table 2-8 shows indicators for Zone 6. Table 2-8: Great Northern Peninsula (Economic Zone 06) Indicators Indicator Value Economic Self-Reliance Ratio (2006) 67.1% Income Support Assistance Incidence (2007) 7.0% Personal Income Per Capita (2006) $18,500 Average Couple Family Income (2006) $53,900 Employment Insurance Incidence (2007) 56.7% Employment Rate - (pop 18 to 64) (2005) 79.4% Source: Community Accounts, 2009 The high employment rate and high rate of employment insurance incidence indicate that much seasonal, short-term work occurs in the area. This would typically be found in areas dependent on fish harvesting and processing as well as tourism, all of which are inheritably seasonal. Economic focus for Zone 6 includes transportation, natural resources, tourism, education and entrepreneurship, the fishery and value-added forestry initiatives. St. Anthony continues to be the service centre for the Zone with Roddickton serving as a sub-regional centre. There are seven gas stations located throughout the Zone as well as 15 fish harvesting and processing related businesses (NEDC, 2009). There have been many challenges to the region over the past 10 years. However, recently some positive changes have occurred in out-migration patterns, as more people decide to 5 See footnote 1. 8

23 January 8, 2010 commute to work in other areas and maintain residences in the area. The global economy has created opportunities for local businesses seeking new markets for products. As the region looks forward, its goal is to maintain stability for residents of the Zone (NEDC Web Site, 2008). 2.5 Economic Zone 07 - Red Ochre Regional Board Inc. This Zone consists of 34 communities, encompassing the southern half of the Great Northern Peninsula from Trout River on the south side of Bonne Bay north to St. Barbe. The communities throughout the Zone are mostly located on coastal lowlands, with the Long Range Mountains as a backdrop. The communities located in the southern quarter of the Zone are surrounded by Gros Morne National Park. Like most rural areas of the province, Zone 7 is experiencing significant population loss. Table 2-9 displays population for the Economic Zone in 1996, 2001 and Table 2-9: Great Northern Peninsula (Economic Zone 7) Population, Year Percentage Change Percentage Change Percentage Change (Province) Total 11,165 9, , Population Source: Community Accounts, 2009 (Based on Statistics Canada Census Data 1996, 2001, 2006) The population declined by 12.0 per cent from and again by 7.7 per cent between 2001 and 2006, is high among the province s zones in population decrease. Based on the Department of Finance population projections (April 2009), the population of Economic Zone 7 is expected to decrease to 8,967 in 2010 and to 8,950 by 2015, based on medium scenario assumptions. 6 Table 2-10 displays indicators of for Economic Zone 7. Table 2-10: Great Northern Peninsula (Economic Zone 7) Indicators Indicator Value Economic Self-Reliance Ratio (2006) 61.8% Income Support Assistance Incidence (2007) 8.3% Personal Income Per Capita (2006) $17,300 Average Couple Family Income (2006) $51,100 Employment Insurance Incidence (2007) 66.6% Employment Rate - (pop 18 to 64) (2005) 78.4% Source: Community Accounts, See footnote 1. 9

24 January 8, 2010 Being a UNESCO World Heritage site, Gros Morne National Park is visited by approximately 160,000 visitors per year, stimulating major economic activity throughout the Zone. North of Gros Morne, in Parson s Pond, Nalcor Energy recently announced a major investment in onshore oil and gas exploration, which will provide some economic activity in the near future. Communities in the northern section of the Zone focus on the fishery, with a large fish plant located in Port au Choix, as well as tourism (Port au Choix Natural Historic Site). The Labrador Straits ferry terminal is also located on the northern section of the Zone (St. Barbe). Today, nineteen gas stations are located throughout the Zone as well as eight fish processing facilities. The scenic fishing communities have developed into tourist attractions, while maintaining some reliability on the fishery (RORB, 2009). Economic focus for Zone 7 includes tourism (community enhancements/developments, packaging); information technology (high speed Internet); agrifoods (wild berries/ secondary processing); small business; energy projects (oil and gas/mineral exploration); fisheries (lobster development); forestry (non timber/ value added products) and integrated coastal zone management. The Zone s economy has traditionally been based on fishing and forestry. However, over the past 20 years, tourism has become a major economic driver (RORB, 2009). 3.0 EXISTING TRANSPORTATION SYSTEM Section 3 describes the existing Newfoundland and Labrador transportation system and infrastructure that affects the study area. The following transportation descriptions are grouped according to the three major transportation modes present in the region: road, air, and marine. This section contains analysis for the following transportation routes: Goose Bay to North Coast Montréal to Goose Bay Goose Bay to Nunavut Montréal to Cartwright Cartwright to North Coast Montréal to L Anse au Loup Cartwright to Nunavut Natisquan to Goose Bay Avalon Peninsula to Goose Bay Natisquan to Cartwright Avalon Peninsula to Cartwright 10

25 January 8, Road The routings described are shown in Figure 3-1. Figure 3-1: Map of Road Components 11

26 January 8, Trans Canada Highway (Route 1) The Trans Canada Highway (Route 1) extends approximately 905 kilometres east to west across Newfoundland between St. John s and Port aux Basques. It generally consists of two lanes, with four lane sections from St John s to Whitbourne and through Gander, Grand Falls, Deer Lake, and Corner Brook. Average annual daily traffic volumes on Route 1 range from approximately 1,400 vehicles per day (Port aux Basques) to 16,600 vehicles per day (St. John s) (Transport Canada, 2008) Route 340 Route 340 connects the Trans Canada Highway with the provincial ferry service between Lewisporte and Cartwright, a distance of approximately 11 km. It is designated as part of Canada s National Highway System, making it eligible for federal funding. Average annual daily traffic volumes for this road are not available Route 430 Route 430 extends a total of 445 kilometres from Deer Lake to St. Anthony along Newfoundland s Great Northern Peninsula, connecting the Trans Canada Highway with the provincial ferry service to Labrador (St. Barbe to Blanc Sablon). It is a two-lane, arterial highway that bi-sects Gros Morne National Park. Annual average daily traffic volumes along Route 430 range from approximately 1,100 to 1,700 vehicles per day between the Park and the Straits ferry, and reach as high as 7,900 per day between the Park and the Trans Canada Highway. Commercial vehicles represent about 10 per cent of this total. Route 430 is designated as part of Canada s National Highway System and is eligible for federal funding Routes 510 and 515 Routes 510 and 515 represent the eastern portion of the Trans Labrador Highway, extending approximately 410 kilometres from Blanc Sablon at the Quebec border to Cartwright. Route 510 starts at the Quebec border and ends 40 km south of Cartwright. The 40 km segment south of Cartwright is Route 515. The highway is primarily a two-lane gravel roadway with the exception of the southernmost 80 km between Blanc Sablon and Red Bay which is paved. The paved section has a speed limit of 80 km/h and the gravel sections are posted at 70 km/h Route 500 Route 500 represents the western portion of the Trans Labrador Highway, extending approximately 550 kilometres from Wabush to Happy Valley-Goose Bay. By 2006, a total of 36 km of this two-lane roadway was paved and the remainder was gravel. The speed limit is 70 km/h on the gravel sections of the highway and 80 km/h on the paved sections. It is anticipated that by 2013 the Trans Labrador Highway from Labrador West to Happy Valley-Goose Bay will be paved. Designed to carry 1,000 vehicles per hour, it currently averages approximately 200 per day (Pers. Comm. Tee, 2008). 12

27 January 8, Trans Labrador Highway Phase III The third phase of the Trans Labrador Highway between Happy Valley-Goose Bay and Route 510 will be connected by the fall of It will be a two-lane, gravel roadway approximately 277 km in length. The intersection between the new road and Route 510 will be at Cartwright Junction, approximately 92 km south of Cartwright. 3.2 Air Air transportation is a vital component of the transportation system in Labrador and Newfoundland s Great Northern Peninsula. During the winter months, when provincial ferry services are unable to operate due to restrictive ice conditions, air provides the only access to communities along Labrador s North Coast. Figure 3-2 illustrates airports in Labrador and the Great Northern Peninsula. Figure 3-2: Airports of Newfoundland and Labrador 13

28 January 8, 2010 A total of 16 airports operate in Labrador, 13 of which are coastal community airstrips. The Goose Bay Airport serves as the primary air hub for passengers and freight moving to and from the region. The Great Northern Peninsula is serviced by airports in St. Anthony and Deer Lake. Currently three airlines provide regularly scheduled air service in the region: Air Labrador, Provincial / Innu Mikun Airlines, and Air Canada Jazz. Charter helicopter service is provided by Universal Helicopters and CHC. Table 3-1 provides an overview of the destinations served by each airline. 14

29 January 8, 2010 Table 3-1: Overview of Airline Destinations Airline Key Destinations Map Air Labrador Central Labrador Wabush, Happy Valley-Goose Bay Labrador - South Coast Cartwright, Black Tickle, Charolottetown, Port Hope Simpson, Williams Harbour, Fox Harbour, Mary s Harbour Labrador - North Coast Nain, Natuashish, Hopedale, Postville, Makkovik, Rigolet Newfoundland St. Anthony Quebec Blanc Sablon, Sept Isles (Source: Provincal / Innu Mikun Airlines Central/Western Labrador Wabush, Happy Valley-Goose Bay, Churchill Falls Labrador - North Coast Nain, Natuashish, Hopedale, Postville, Makkovik, Rigolet Newfoundland St. John s, Deer Lake, St. Anthony, Stephenville Quebec Blanc Sablon, Sept Isles, Montréal (Source: Air Jazz Canada Central/Western Labrador Wabush, Happy Valley-Goose Bay (Map not available) Quebec Montréal Nova Scotia Halifax 15

30 January 8, Marine The following sections describe the marine vessels operating within the study area. The Sir Robert Bond, Northern Ranger, Apollo, and Astron are all owned by Labrador Marine Inc. (Woodward Group of Companies) and charted to the Province. The Marine Eagle is owned by Puddister Trading Company Limited and charted to the Province. All vessels require reservations except the MV Marine Eagle. Figure 3-3 is a map showing the various marine routes. 16

31 January 8, 2010 Figure 3-3: Map of Marine Routes 17