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November 7, 1997
(Executive Council)

Premier responds to Statistics Canada Labour Force Survey

Premier Brian Tobin expressed guarded optimism this morning concerning the early signs of a marked turnaround in the Provincial economy.

"The 3.3 per cent increase in employment in October was certainly good news," said the Premier, "as was the resulting 2.5 per cent decline in the provincial unemployment rate, the largest drop of any province in the country." Employment increased by about 6,300 and employment gains were broadly based across a number of important sectors in both urban and rural parts of the province.

"A gain of more than 2,000 jobs in the fish processing sector provided a much needed boost to parts of rural Newfoundland, especially in the Notre Dame-Central-Bonavista Bay region where employment has risen by more than 12 per cent on average over the last three months," said the Premier. "Improvements in the fishing sector reflect a reopening of the codfishery in certain parts of the province, as well as increased crab and shrimp quotas, and the allocation of a shrimp quota to the inshore fishing fleet for the first time ever. Despite this improvement, rural Newfoundland and Labrador still has a long way to go before it recoups the employment lost when the fishery collapsed in 1992."

The retail trade industry also showed a significant improvement, with an employment gain of 2,600 in October, bringing the year-to-date gain to 3.4 per cent for this industry. The Premier said the success of the Cabot 500 Celebrations and the 1997 tourist year no doubt contributed to improvements in the retail trade sector which recorded employment gains in all but two of the first ten months of 1997. He said the Harmonized Sales Tax, which reduced the tax on retail goods by 5 per cent, also provided a boost to this sector, especially in automobile sales.

"Gains in other parts of the service sector are related to the successful Tourism trade this year, but they were also driven by increased demand for business services related to major projects such as the Voisey's Bay and Hibernia developments."

Despite many favourable reports, the unemployment rate at 15.8 per cent is still very high compared to the other provinces. Employment in construction continued to decline reflecting the Hibernia-related job losses, and the effects of restraint measures by all levels of government continued to show up in the Public Administration employment numbers.

Premier Tobin noted that year-over-year employment gains have been recorded in seven of the first ten months of 1997. "Government is cautiously optimistic that we have turned the corner. However, we are not out of the woods yet. The turnaround in the provincial economy and labour markets means that we are on the right track. Our economic policies and our efforts to restore fiscal stability are working. This only serves to underscore the importance of continuing our efforts to restore fiscal stability and stay the course, and to create a positive economic climate in which businesses can flourish and the people of the Province can prosper. It will take careful fiscal and economic planning to make sure we stay on the right track over the long haul."

Contact: Heidi Bonnell, Office of the Premier, (709) 729-3564