Analyst Patrick Brannon smiled gleefully in front of a meeting of about 150 businesspeople and government officials in St. John’s Wednesday morning.
He was presenting the results of the annual Atlantic Provinces Economic Council (APEC) major projects inventory, an accounting of projects “valued at $25 million or more, $10 million or more in P.E.I.” in various stages of development.
“I kind of feel like Dr. Evil in the Austin Powers movie,” he said with a laugh, announcing the grand total with flare. “One hundred billion dollars.”
Newfoundland and Labrador is leading the count in Atlantic Canada. Almost half of all major project spending is set to happen here — $48.1 billion. It is an 11 per cent bump over the same outlook last year.
“Right now there is a lot of momentum in terms of project activity (in the province), because of strong oil prices and other commodity prices that are driving mining developments,” Brannon told The Telegram.
The projects land anywhere from pre-construction and engineering to a breath before completion. The list for Newfoundland and Labrador includes the Hebron oil development ($8.3 billion) and Muskrat Falls (entered at $5 billion, as the Gull Island portion was considered at too early a stage). It also drills down to include a $112-million provincial recreational infrastructure program and $35-million RCMP capital program.
Oil and gas, mining growth
Increased work on Hebron is not the only big spend in the oil and gas sector.
The Hibernia Southern Extension, Hibernia platform upgrades and White Rose expansion work are included in the inventory. Maintenance work at Terra Nova and refinery upgrades at Come By Chance are also in the count.
Spending on offshore exploration between now and 2019 is expected to run a total $1.2 billion, it notes.
The mining count includes the $828 million expansion by IOC, but also the direct shipping ore development by Tata Steel and New Millenium, upgrades at Wabush Mines and costs for reactivation of the Fluorspar mine.
Topping the list, the Long Harbour nickel processing facility is expected to require $1.2 billion of investment this year ($3.6 billion total).
On all counts, businesses within the local supply and service community are poised to benefit.
Boom in St. John’s and Labrador
Actual investment in St. John’s in 2012 is expected to reach $650 million.
Outside of oil and mining projects, housing developments in the city are listed as a third “growth driver” for the provincial economy.
The residential developments run from the construction on lands formerly part of CFS St. John’s to the 900-home Clovelly Trails subdivision in the East end (83 homes are to be built in 2012).
The Glencrest Subdivision, backed by former Premier Danny Williams, has been counted in part (a $400-million first phase, running to 2017).
Outside of residential developments, St. John’s is home to commercial developments including office buildings, new hotels, an airport expansion, a new long-term care centre, expansion to the St. John’s Convention Centre and more.
Labrador is a second hot spot, Brannon said, with project investment expected to grow to as much as $3 billion by 2014, up from $100 million in 2009. “Looking ahead there are nearly $16 billion in potential projects in Labrador in this year’s inventory.”
‘There’s always risk’
The numbers for actual investment are expected to drop down in 2013, the report of the Halifax-based think-tank states. Yet, as several multi-billion dollar projects come onstream, the numbers are expected to rise again in the 2014-2017 timeframe.
However, there are points of concern.
“There’s always risk out there. For example if commodity prices were to drop off quite a bit over the next little bit that could hurt the viability of some of the projects — not so much in the oil and gas sector, but certainly the mining developments in Labrador,” Brannon said.
The economic effect of ongoing struggles in the Eurozone is another.
Labour shortages also have the potential to cause trouble. “If labour costs get too high then they can drive up the costs of the projects and make them less viable,” Brannon said.
The Council of Atlantic Premiers released its own totals Thursday for major projects in various stages of development. The collective has stated 354 major projects, with a value of $71 billion, are currently underway.