Voisey's Bay Mine and Mill Environmental Assessment Panel Report

16.1 Effects on Communities and Families

The Project would be the first large-scale industrial development in northern Labrador. For many Aboriginal people working at the site, and for their families, this would be their first experience with an industrial work site (and, more specifically, a mining operation), a fly-in/fly-out system, 12-hour shifts and industrial wages. With the exception of Nain, VBNC does not predict that the Project would significantly change the size or demographics of various Labrador communities. Therefore, VBNC expects that the Project would affect individuals, families and communities mainly through direct employment.

During the hearings, many presenters talked about the significance of locating a large mine/mill operation on traditional Aboriginal lands and of regularly breaking through the landfast ice. They indicated that this would also profoundly affect families and communities, whether or not they chose to work at the Project.

This chapter focuses mainly on family and community effects on the North Coast, and addresses specific implications for Nain because it is the community nearest to the Project.

16.1.1 VBNC Assessment

VBNC characterized the Inuit and Innu communities of northern Labrador as having below average income, above average population growth, and above average social and health problems. According to the 1991 Census of Canada, average family income in Labrador was $50,854. Family incomes in northern Labrador ranged from a low of 40 percent of the Labrador average in Utshimassits to a high of 67 percent in Makkovik. The Panel observes that the Labrador average is significantly higher than the provincial average; however, as VBNC noted, most Innu and Inuit households are 20 to 40 percent larger than the Labrador average. Fifty-three percent of the North Coast population is under 25, compared to the Labrador average of about 40 percent.

VBNC stated that substance abuse remains one of the most significant social problems for Inuit and Innu families and communities. Substance abuse is also directly related to incidents of crime and family violence. VBNC linked other social problems, such as the higher incidence of disease, mortality and suicide in northern Labrador, to the poor socio-economic conditions in the region. The Environmental Impact Statement (EIS) notes that the suicide rate in northern Labrador between 1979 and 1983 was twice the national rate for Aboriginal people and five times the overall national rate. Cuts in transfer payments to municipalities from the Province have reduced social services and infrastructure.

VBNC observed that, despite these problems, strong family bonds continue, as do many other positive aspects of life in northern Labrador. VBNC also acknowledged that the people of northern Labrador value their culture, language and spirituality highly.

VBNC predicts that, without the Project, population and the demand for housing and municipal services will continue to grow, and that this will compound many existing family, social and health problems in the communities. Land claims settlements will have a positive effect, permitting greater autonomy and providing the means to improve living conditions. However, VBNC predicts that economic conditions will not substantially improve for some time, and therefore the incidence of substance abuse, family violence and suicide may remain high. The relocation of Utshimassits will provide employment benefits to Mushuau Innu for several years and benefit family and community life in the long term.

Project Effects

VBNC predicts that demographic change, as shown in Table 2 below, would occur mainly in Nain, because it is the closest community to the Project, and in Happy Valley-Goose Bay and Labrador West, because these two regions could be principal service centres for the mine. In-migration related to direct jobs would likely be highest during the underground phase, when the Project would need highly skilled and specialized workers.

Table 2: Demographic Predictions

City	Existing Population	Predicted In-Migrant Workers1	Predicted In-Migration²
Nain	1,209	0-45	0-140
Happy Valley-Goose Bay	8,655	0-76	0-204
Labrador West	10,473	0-70	0-187

¹ Range predicted over the life of the Project.
² Workers and families.

VBNC identified a number of potential adverse effects related to the Project, including work-related stress, income differentials, cost of living increases and social problems. For example, for many people working on the Project, it would be their first time in full-time industrial work. This would be stressful for those not used to working on a rigid schedule in an industrial or office environment. VBNC also noted that people who did not receive jobs, or who were further marginalized by environmental and cultural change, would also experience stress.

Most Project employees would work on a two-weeks-on, two-weeks-off rotating schedule. VBNC acknowledged that commuting workers and their families could experience emotional problems associated with the rotational schedule. Relatively high salaries might lead to money management problems and, combined with the intensive work schedule, might promote binge drinking or spending when workers returned home at the end of their rotation.

Mitigation

VBNC stated that the key mitigation measures would be the fly-in/fly-out basis of the operation, and impact and benefit agreements (IBAs), along with land claims settlements.

VBNC selected a fly-in/fly-out mode of operation over a permanent town because it considers that option more attractive to workers, more cost effective and consistent with current practice in northern mining operations. VBNC indicated that the higher transport costs associated with a fly-in/fly-out mode would be more than offset by reduced costs for construction, maintenance, closure and employee relocation.

VBNC predicts that the fly-in/fly-out mode of operation, and the designation of each North Coast community as a pick-up and drop-off point, would discourage migration to, from and among those communities. The adjacency principle, which would give hiring priority to members of the Labrador Inuit Association (LIA) and the Innu Nation, would be a further disincentive, as moving to a North Coast community would not give in-migrants an employment advantage. VBNC therefore predicts that most communities would continue to grow at the same rates as in the recent past, with the probable exception of Nain, where in-migration is expected to be high during the open pit and underground phases.

Since there would be no Project town site, VBNC stated that no one would be forced to relocate to obtain employment. The fly-in/fly-out operation would allow Aboriginal employees to enter the industrial workforce while remaining in their home communities, where they are supported by friends and family in a familiar environment. This should help mitigate the stress some workers could experience from being in an industrial workplace for the first time. As well, the seasonal operation during the start-up phase of the Project would serve as an adjustment period for these workers. VBNC noted that employees and their families might choose to move to other designated pick-up communities for several reasons: to be near family, to take advantage of more employment opportunities for other family members, or to get access to a greater range of health, social, recreational, educational or retail services.

While the specific content of the IBAs under negotiation are confidential, the Panel heard presentations from VBNC, the Innu Nation and LIA outlining the matters covered by the IBAs. Most of the items relate to employment, working conditions and business opportunities, and are discussed in Chapter 15, Employment and Business. However, other items relate to environmental management, social and cultural protection, access to and use of the Project area, and financial compensation. They are intended to provide benefits to Innu and Inuit who do not work at the site or supply the Project. VBNC indicated that certain elements of the employee assistance plan (EAP) would also be available to families of employees. These elements would include

• counselling and awareness programs on matters such as financial management, stress, family violence and substance abuse;
• the services of Aboriginal employment coordinators, who would work with employees and their communities; and
• off-site counselling for drug and alcohol problems.

VBNC stated that the social and cultural protection fund, contemplated in IBAs, would promote the individual and collective well-being of Innu and Inuit through social, cultural and civic activities.

VBNC also indicated that many family problems that the Project might create or aggravate could best be addressed through existing community-based services. These include the services provided by the provincial Department of Health and Community Services, which is responsible for health care facilities, community-based health services and social services. These are delivered in Labrador through a regional board, the Health Labrador Corporation. Public health nursing services in Inuit and Innu communities have been devolved to the Labrador Inuit Health Commission and Innu band councils.

Residual Effects

VBNC predicts that the construction phase would be the only period that would create significant residual effects for North Coast families and communities. Otherwise, the company predicted that residual effects, including demographic change, would be minor or negligible everywhere except Nain.

VBNC recognizes Inuit and Innu concerns that the Project might increase social problems due to demographic and economic change, but it feels that the Project would positively affect families and communities currently experiencing poverty and unemployment. VBNC suggested that the Project would raise the self-esteem of its employees by reducing or eliminating their dependency on transfer payments. Workers and their families would have good, steady incomes and extended periods of time together. This would benefit the whole community. The support measures put in place by VBNC through human resources policies and IBAs would help reduce any stress and other difficulties experienced by workers and their families. These factors and other project benefits would improve the outlook for many families, increase community pride, improve health conditions and decrease social problems.

For areas of Labrador other than the North Coast, VBNC predicts that residual effects would be minor or negligible.

Monitoring and Follow-up

VBNC regards monitoring and follow-up as the responsibility of governments and of Aboriginal and community organizations, possibly funded in part through the social and cultural protection funds in IBAs. VBNC also stated that it was prepared to cooperate with these bodies by exchanging information and expertise.

16.1.2 Public and Government Concerns

Participants at the community hearings focused their concerns on the possible adverse effects of the Project on family and community relations and on their culture and way of life. Many feared that the Project would further undermine their culture, identity, values, traditions and language. Many felt the Project would also threaten life on the land, and the values associated with it, such as sharing and mutual support. This is not merely an economic issue to the participants but also a social and cultural one, and no amount of jobs and money could compensate them for such losses. A man from Sheshatshiu, referring to the Atlantic Groundfish Strategy (TAGS), said he felt sorry for Newfoundland fishers because, as he saw it, they were being paid to lose their culture, and he did not want that to happen in Labrador.

To some Innu and Inuit, particularly elders, the Project would be, by its very nature, disrespectful and even a violation of their homeland, quite apart from any specific adverse effects it might have on places or resources they use. Harvesters, elders and many others drew the connection between the land and a sense of well-being. Many questioned whether Project employees could effectively integrate a rotational commuting schedule with the need to provide food and wood for their families regularly or with the current pattern of family weekends in the country. A woman from Nain said, "What others might believe to be simple is what we are more content with and that's providing for our families and enjoying their happiness. And when I say that, I don't mean that we would not like to move ahead in this world. I believe that we could do that and still maintain our culture and traditions and uniqueness."

Several participants cast doubt on VBNC's prediction that more employment and income would improve social conditions. Some, particularly women, were concerned that increased income would lead to more, not less, drinking. The provincial Department of Health and Community Services observed that there had already been cases of employees drinking more heavily than usual at home after a two-week work shift. This, coupled with the difficulties all family members would face in coping with a rotational schedule, could increase family violence and demands on social services.

The Department of Health and Community Services also noted that alcohol consumption in Utshimassits declined for three years after employment at the Sango Bay site began, but it has since returned to previous levels. The Department predicted that, with the current level of addiction-related social problems in Utshimassits, "employment with VBNC will not substantially affect residents' ability to maintain sobriety and increase health," although it acknowledged that employees would likely benefit from the EAP.

Some participants inquired how widely communities would share benefits from the Project, if these benefits came only in the form of employee wages. They observed that people who lacked the requisite skills or were unable to function in English would not get jobs on the site, and that they should benefit too. Some participants, including the Department of Health and Community Services, were concerned that Project employment and income would create greater inequalities in communities, and that this would adversely affect community and family relations.

Other people considered that they and their communities would benefit greatly from good jobs that provided useful experience and increased incomes, and expressed confidence that the Project would provide these benefits. Younger men, especially, looked forward to getting work at the site.

Some participants considered that IBAs might address concerns related to family and community effects, but few were aware of the details of these confidential negotiations. It was also generally noted that IBAs were, in any event, not yet in place. Some participants hoped that IBA funds would be used to support local initiatives, such as the Outpost Program of the Innu Nation, and the Life Skills and Language programs of the Inuit, which involve elders at various hunting and fishing camps. These were noted as examples of Aboriginal people's commitment to maintaining their culture and traditions, and to ensuring that experience and knowledge of the land are passed on.

Many participants acknowledged serious social and economic difficulties in the communities. It was widely agreed that lack of economic opportunity, low incomes, alcohol and substance abuse, and family violence are problems in urgent need of solution. However, some participants at both the community and technical sessions did not accept VBNC's position that increasing the income of the limited number of people who would find Project-related employment would solve the general problem of poverty and low self-esteem. Tongamiut Inuit Annait (TIA), for example, stated that self-esteem comes primarily from culture and tradition, self-reliance and generosity in community life, rather than from employment status and income.

Many Innu and Inuit attributed the continuing loss of their cultural traditions, and their social and economic difficulties, to a history of domination and restriction by government, the churches and the education system. They cited several examples of events and projects over which they had no control and which gave them no benefits, but which did create significant adverse effects. These included Churchill Falls hydro development, low-level military flying, mineral exploration, community relocation and road construction. Meanwhile, laws have increasingly restricted Inuit and Innu use of the land. Based on these experiences, many Innu and Inuit do not believe that the Project would or could differ.

An expert appearing on behalf of the Innu Nation identified what he called a "master narrative" that had arisen among Innu over the last 30 years, by which they explain their situation. They believe they have been treated unfairly, and that in order to rebuild their social order, they must be treated fairly and with respect. Justice and fair treatment are necessary to gain their consent to the Project, and this requires that land claims be settled and that VBNC be accountable to Innu. Self-esteem and dignity, he suggested, would not result from individual benefits such as jobs and money, because they result from social interaction in a collective or public setting. In the context of the "master narrative," he suggested, self-esteem arises from hunting and living competently on the land, and from work in the community rather than at a distant location.

Both LIA and the Innu Nation acknowledged that their members need more income and could therefore benefit from Project employment. But both also stated that they do not want to compromise their culture and way of life, or other economic development opportunities based on renewable resources. The Project should support, and certainly not preclude or impede, these other endeavours. The Innu Nation and LIA see the revenue from IBAs as an essential means to help them reach their goals of economic, cultural and political development, as long as those benefits are not outweighed by negative social and economic costs.

Innu Nation stated that "the social problems which you heard about...are very real to us. We are a people dispossessed of our land, and until we can gain real control over our land and our lives, things are not going to start improving." A participant in Nain said that "a lot of the problems can be attributed to Inuit losing control over their communities and their own lives." Both organizations, and many individual Inuit and Innu, said that land claims and IBAs are the best means for them to regain control over their lives and to ensure that they could, on balance, benefit from the Project. Further, they said, without these essential tools for regaining control and governance, the potential benefits of the Project would not be achieved.

Several participants indicated a need to monitor the social impacts of the Project. The Department of Health and Community Services stated that it would do so, although it did not describe how. The Labrador Inuit Health Commission (LIHS) stated that health and socio-economic impacts should be monitored, but that there is neither an adequate baseline of information nor a program in place to do this. LIHS suggested this be remedied by a partnership of agencies including itself and VBNC, in the context of IBAs. A social and health monitoring or surveillance program would require an agreed set of issues and indicators, a continuing and effective means of collecting data, staff who could maintain the system and analyze the data, and an agreed set of benchmarks that would trigger intervention even if the specific cause could not always be identified.

With one exception, the Panel did not hear concerns about the Project's effects on family and community life in other parts of Labrador. Presumably, this is so because residents in larger centres are already used to participating in large projects - and, in the case of Labrador West, in the mining industry - and because demographic changes will be small in comparison to existing populations and infrastructure capacity.

However, the Labrador Métis Nation (LMN) stated that VBNC had ignored the situation of communities south of Rigolet, which the LMN says will continue to be affected by out-migration. If no community on the South Coast were designated a pick-up point for Project workers, LMN believes that people might move to Happy Valley-Goose Bay to have better access to Project employment, since VBNC would not cover travel costs from communities to pick-up points.

Conclusions and Recommendations

The Panel observes that there is substantial uncertainty about Project effects on family and community life, and on the regional culture and way of life. Reasons include the following:

• because of the large number of factors that could influence employment outcomes, VBNC itself cannot predict employment, business and income impacts at the community level;
• it is often difficult to predict how individuals will respond to a complex initiative such as the Project, and how these responses might change over time;
• it is difficult to predict exactly how well mitigative measures would work; and
• the effects of a specific development such as the Project are inherently difficult to distinguish from larger, ongoing social, economic and demographic changes occurring independently.

The Panel also notes that while some presenters drew parallels with past developments in Labrador, the proposed Project would differ significantly, since it would be a fly-in/fly-out operation with an up-to-date environmental management system, accompanied by IBAs. Therefore, past experiences are not necessarily accurate predictors of future effects.

The Panel considers that VBNC has made considerable effort to inform people in northern Labrador about the Project, and especially about the training and employment opportunities it would provide. The environmental assessment review has also enhanced awareness of the Project. However, the Panel recognizes that, understandably, because of people's past experience, many people are skeptical about what they are hearing. There appears to be considerable fear and uncertainty among people because they do not know what is involved in the operation of the mine. The Panel believes that, in some cases, only direct experience can give people the information they need. Another significant difficulty is that the general public does not know about or understand many of the mitigative measures and benefits that IBAs would deliver, because the negotiations are confidential.

The Panel acknowledges that VBNC can only do so much ahead of time to allay such fears by informing people. In some cases, only direct experience can answer questions people may have. The Panel believes that efforts to familiarize the families of workers with the mine site and operations once the Project started would be a helpful follow-up to what has been done to date.

The Panel believes that, without the Project, it is unlikely that there would be major alternative forms of investment in the region to provide economic activity for a rapidly growing population with increasing demands. If renewable resources are carefully managed, and potentially adverse Project effects are avoided, then the resource base itself should at least remain stable. However, harvesting costs are increasing and the exploitation of new resources might require significant investments, while commodity prices are unstable. Renewable resources provide an essential but incomplete economic base for the regional population. Renewable resource harvesting, like other small-scale enterprises in the area, also tend to provide seasonal employment only.

The region already relies on high per capita levels of government expenditure, and these are unlikely to increase greatly. In the meantime, the regional population continues to grow. IBAs, if concluded, would provide important additional funding for a variety of purposes, but these funds depend entirely on Project authorization and success. Land claims agreements would also provide an economic stimulus but, again, some of the funds they generate depend on developments such as the Project. Even under the most optimistic scenario, there would still be a great need for direct employment and for the tax revenues that local economic activity would generate. All parties recognize these economic needs. The Project, if it continued for the proposed 20 to 25 years, would significantly meet these needs. The combined effect of all these factors on demographic and economic trends is impossible to predict, but it would probably be neither sudden nor dramatic.

The Panel acknowledges that some people would experience more negative than positive effects from the Project. Many of those most concerned about adverse effects to the land, to community and family life, and to their culture and traditions might be unable or disinclined to work on the Project. If the Project is to create durable and equitable social and economic benefits on the North Coast, it must do more than provide jobs for some people or prevent significant adverse effects on harvesting.

IBAs would be an important means of spreading and broadening the benefits of the Project. The Panel agrees that successfully negotiated IBAs, and settled land claims, would be important ways to mitigate the projected negative impacts of the Project. Control over financial resources and the administration of social programs would help LIA and the Innu Nation deal with the regular needs of their communities, as well as those arising from the effects of the proposed mine.

The Panel observes, however, that IBA provisions would apply only to Innu and Inuit, and could not mitigate effects on non-beneficiaries or on other entities that are not exclusively Innu or Inuit. This includes the North Coast municipalities, not all of whose residents are land claim or IBA beneficiaries. For example, LIA would not be obliged to direct IBA funds to municipalities to provide public services, and municipalities would not be justified in depending on IBAs to fund public services. As well, land claims agreements are not intended, and cannot be used by governments, as a substitute for the normal array of government services and citizenship benefits.

The Project could also provide broadly based and durable benefits through the related revenues that would accrue to governments. However, for benefits to occur, the governments that received these revenues would need to reinvest an adequate proportion of them in community infrastructure and services. The next sections discuss how this might be done.

The Panel considers that if the Project provided for all of these streams of benefits - employment, IBAs and regional reinvestment of increased government revenues - then it would achieve the fairness, justice and respect that Aboriginal people are seeking from the Project.

The Panel concludes that monitoring of socio-economic impacts would be an essential part of an effects monitoring program. While government and community agencies should take the primary responsibility for such monitoring, VBNC also has a role to play. The Panel makes recommendations on this matter in Chapter 17, Environmental Management.

The Panel is unable to draw conclusions about future trends in inter-community migration in Labrador. The Panel is aware of a tendency in other areas, such as northern Saskatchewan, for fly-in/fly-out workers from smaller communities to gravitate to larger urban centres. The Panel considers that if this tendency occurred in Labrador, it would most likely occur as migration from communities south of Rigolet, because that region would not benefit from IBAs and would face transportation barriers to employment at the Project. Designating at least one community in that area as a pick-up point would offset these disadvantages to some degree. Recommendation 79 addresses this issue.

The Panel concludes that VBNC's main responsibility with respect to minimizing the potential negative effects of demographic change would be to ensure that working conditions and employee transportation policies, to the greatest extent possible, assisted workers to remain in their home communities, if they wished. The Panel also recognizes that upgrading air transportation facilities in North Coast communities, which would not be VBNC's responsibility, might help North Coast residents move back and forth between their homes and the work site more easily (see Recommendation 91).

16.2 Services and Infrastructure

Though VBNC does not anticipate a significant increase in population in most communities due to the Project, it nevertheless predicts that there might be greater demands, especially for services, because employment may raise people's purchasing power and lifestyle expectations. The demand for improved services and infrastructure would be highest where an influx in population occurred. However, the Panel observes that Labrador coastal communities have a limited capacity to deal with demands for more and improved housing, water and sewer systems, transportation and road systems, and social services.

VBNC predicts that the Project's residual effects on services and infrastructure would be moderate (significant) during the construction phase in Nain and the Happy Valley-Goose Bay area. Elsewhere, and during other Project phases, the effects would be minor (negligible) and short term. Overall, VBNC predicts that the effects on North Coast services and infrastructure would be "overwhelmingly positive" because the Project would increase direct, indirect and induced income in those communities.

In the next section, the Panel focuses on Nain because the nature and extent of Project effects in this community would likely differ from those in any other community.

16.2.1 Town of Nain

Nain is the closest community to the site of the proposed Project and lies within fairly easy travel distance by helicopter, boat or snow machine. While no Project facilities would be located in Nain, VBNC has indicated that a significant amount of direct Project-related activity would take place in Nain during the construction phase, while the airstrip and wharf facilities were being completed.

Again, VBNC indicated that the main mitigation measures would be the fly-in/fly-out system; application of the adjacency principle; and financial participation payments to the LIA negotiated through the IBA, which could be used to provide local services and facilities. VBNC asserts that other mitigative responses would be the responsibility of various levels of government and could be financed through increased revenues generated by the Project. VBNC also suggests that the Town of Nain could influence population growth by controlling the supply of serviced land for housing.

In Nain, VBNC predicts an average of 84 person-years of Project-related employment (including direct, indirect and induced effects) during construction, 133 during the open pit phase and 184 during the underground phase. The unemployment rate would steadily decline, theoretically reaching zero during the underground phase. Some business development is expected to occur, as a result of the adjacency principle, the community's proximity to the Project site, and the increased employment income and consumer demand. Nain's economy is therefore predicted to diversify.

VBNC acknowledges that the Project might cause some wage inflation and labour force disruption in Nain, particularly at the beginning of each major phase (construction, open pit and underground) but suggests that the economy would adjust quickly. VBNC also acknowledges that housing costs would probably rise in Nain. These costs would depend partly on the Town's ability to develop new housing to meet demand.

The EIS ranks the economic impacts of Project decommissioning and post-decommissioning as moderate or major (and therefore significant) but suggests that these could be reduced if increased economic activity in Nain during the Project had encouraged economic diversification.

VBNC's position is that socio-economic monitoring would be the responsibility of other parties, but it has indicated that it would be prepared to assist by providing relevant Project information in certain instances. For example, VBNC would monitor Project expenditures and provide this information to appropriate government departments and agencies to help them with their economic planning. VBNC also proposes to continue ongoing discussions with the Innu Nation and LIA.

Public and Government Concerns

Submissions and comments from residents of Nain at the scoping sessions and public hearings addressed a wide range of socio-economic issues, many of which were also raised in other North Coast communities (and are addressed under other headings in this report). The following concerns, however, which were raised by the Town of Nain and others, relate to Nain's particular situation.

• The Project would present definite business development opportunities for Nain; however, these opportunities could be lost either through the "fly-over" phenomenon or because of back-haul connections between the Project site and other communities.
• Opportunities will also be lost if businesspeople in Nain could not get ready in time. VBNC may be discussing its specific commodity or service requirements with LIA in the IBA negotiations, but these are confidential.
• Business development and growth in Nain would be hampered by the lack of suitable serviceable land for commercial use, and also by the current state of the potable water system and other municipal services.
• Transportation infrastructure would not accommodate increased traffic. The airstrip would need to be relocated or upgraded (Section 16.3 of this report addresses this issue in more detail). Marine facilities would also need improvement, which would include constructing a breakwater and developing a marine service centre.
• The Project could seriously affect existing businesses and institutions by inflating wages, attracting skilled employees and disrupting limited local services, especially transportation in the early stages.
• The municipal infrastructure, including roads, water, waste management facilities and recreation facilities, is already inadequate for the existing population and could be seriously stressed by the predicted population growth related to the Project. The Town does not levy property taxes and does not agree with VBNC's contention that municipal revenues would increase sufficiently to provide needed services. Over three quarters of municipal funding comes from federal transfers through the Labrador Inuit Agreement.
• Education, health and social services are already inadequate for the existing population. The Town is not convinced that the Province would reinvest Project revenues in these services to meet increased demand.
• Nain's housing stock is also already deficient in terms of quantity and state of repair. The Town is not confident it could respond to increased demand resulting from the Project.
• The Project would increase the cost of living for all Nain residents, whether they benefited economically from the Project or not. Increased income disparities would exacerbate existing social tensions.
• The Town of Nain is not party to the IBA negotiations, and has no assurance that any financial payments made by VBNC would be used to provide services or facilities that are currently a municipal responsibility. The IBA is intended to benefit the members of LIA; the Town is responsible to all residents, whether they are LIA members or not.

Conclusions and Recommendations

The Panel recognizes that community government in northern Labrador may go through a transition period once land claims have been settled. The Panel did not receive information on how land claims would change current municipal structures and processes, so the following conclusions and recommendations are based solely on the existing situation.

From the information presented during the review process, the Panel concludes that the Town of Nain faces a difficult situation. The magnitude of the Project-related impacts on municipal services and responsibilities would depend largely on the amount of related demographic change. This would depend on a number of factors, identified in the EIS, that would be based largely on personal choices. The Panel acknowledges that the maximum level of in-migration predicted in the EIS might not occur. On the other hand, the EIS does not address the possibility of speculative in-migration, assuming that use of the adjacency principle would make this unlikely. However, if economic activity increased in Nain, more people, most likely ex-residents, might choose to return, whether they were directly employed by the Project or not.

However, if the Town was unable to provide the necessary services and amenities, in-migration could quickly be counterbalanced by out-migration, if Project employees and their families decided to move to Happy Valley-Goose Bay to obtain suitable housing or enjoy more recreational, consumer or educational opportunities. This would wipe out at least part of the Project's economic benefits to the community of Nain.

The Panel acknowledges that VBNC is not responsible for current infrastructure and service inadequacies. However, the Panel was not presented with any evidence to back up VBNC's assertion that "Tax revenues and user fees for new residential and commercial development will offset the costs of building and maintaining new infrastructure and providing additional services." Given the Town's existing tax structure and revenues, this seems improbable. It also appears that LIA is not obliged to spend any payments received from VBNC through IBA negotiations on municipal services, and the Panel has no way of knowing whether LIA intends to channel funds in that direction.

Usually, when a major industrial project is developed, it falls within the municipal boundaries of the adjacent community, thereby adding to the local tax base and revenues. Fly-in/fly-out operations in northern areas are less dependent on adjacent communities, draw their employees from a number of different communities and must often build much of their own infrastructure. Should VBNC therefore be required to pay something equivalent to municipal property taxes to any Labrador communities, and if so, which ones? The Panel believes that a strong case can be made for such payments to the Town of Nain for the following reasons.

• During the exploration and construction phases, VBNC would have made extensive use of Nain's facilities and services.
• During the production phase, VBNC would probably continue to benefit in various ways from the proximity of Nain. One example given by VBNC was the occasional need for overflow accommodation.
• Nain is expected to experience significant in-migration as a direct result of the Project. Because of its size and infrastructure limitations, Nain cannot be expected to absorb this increase in the same way that a larger urban area such as Happy Valley-Goose Bay could.

Recommendation 87

The Panel recommends that VBNC pay a grant-in-lieu of taxes to the Town of Nain to offset some of the increased costs incurred by the Town as a result of the construction and operation of the Project. The formula used to calculate the grant-in-lieu should be negotiated by the Newfoundland and Labrador Department of Municipal and Provincial Affairs, the Town of Nain and VBNC. It should reflect expected Project-related uses of community infrastructure and services, projected municipal costs attributable to Project-related in-migration and any Project-related revenues accruing to the community.

The Panel concludes that addressing housing problems in Nain, with respect to both adequacy and cost, would likely to be a key element in maximizing Project benefits and minimizing adverse effects in Nain. Currently, 45 percent of the housing stock needs major repairs and about 50 families need new houses. The EIS predicts that by 2001, due to natural population growth and early Project-induced in-migration, the population could increase by more than 170 people.

The Panel agrees with VBNC that people who found employment with the Project or in related businesses might well have sufficient resources to repair their houses or build new ones. However, the increased economic disparities likely to accompany the Project, coupled with a rise in the cost of living and increased competition for limited housing resources, could adversely affect a significant number of Nain residents and cause more social problems.

The provincial Department of Municipal and Provincial Affairs indicated during scoping sessions that it was gathering baseline and population information to prepare a housing needs analysis for the next 10 years, but it did not participate further in discussions during the public hearings.

Recommendation 88

The Panel recommends that the Town of Nain, LIA, the Newfoundland and Labrador Department of Municipal and Provincial Affairs, and Indian and Northern Affairs Canada jointly develop a five-year housing strategy for Nain, including funding sources, to meet the housing needs of existing and potential residents.

It was apparent to the Panel that there is considerable frustration in the Town over the issue of planning for economic development. Town business people and managers are uncertain what they should be planning for and are afraid that they could "miss the boat," especially with respect to the lead time required to make additional land available for commercial development.

The Panel acknowledges that the relationship between the Town of Nain and LIA may be a complicating factor. LIA has been negotiating with both VBNC and governments on matters of regional significance but has no apparent structural links to the Town, although most of Nain's residents are LIA members. Through LIDC, LIA has been developing business opportunities for its members and has been communicating closely with VBNC. However, LIA is not responsible for economic development planning in the Town of Nain.

The Panel also recognizes concerns about the effects of wage inflation and labour force disruption on existing businesses and organizations. While these effects might be short term, as the EIS predicts, they could nevertheless jeopardize some local businesses and work against the economic diversification that is identified as one of the Project's lasting benefits. The Panel does not see easy answers to these potential problems, but it believes that they may lie in some combination of improved and timely communications, and accessibility to appropriate training (not solely focused on Project-related occupations).

To address concerns about inadequate preparation for business opportunities and effects on existing businesses, the Panel concludes that stakeholders must develop a proactive strategy and that VBNC must enhance its communications with the Town.

Recommendation 89

The Panel recommends that VBNC and the Town of Nain develop a communications protocol to keep each party regularly informed about issues and activities of mutual interest. The protocol should include arrangements for representatives to meet when necessary to discuss concerns. The purpose of the communications protocol would be to provide opportunities to address problems at the earliest stages and to promote initiatives that might be of mutual benefit.

Recommendation 90

The Panel recommends that LIA, the Town of Nain, and the Newfoundland and Labrador Department of Development and Rural Renewal collaborate in a community economic development planning process for Nain. The overall goal should be to achieve a diverse and sustainable local economy that can maximize participation in Project-related enterprises, while strengthening existing businesses and seeking out new community-based possibilities. The process should encourage the involvement of the various interest groups, including VBNC, as appropriate.

16.2.2 Other Communities

Municipal officials in Happy Valley-Goose Bay, Labrador City and Wabush expressed confidence in their ability to cope with increased demands for services and infrastructure. However, councils and community groups in the smaller municipalities told the Panel that they do not have the funds to meet their current needs, let alone any new demands. The Town of Rigolet pointed out that the Project would place extra strain on an already stretched social services budget by creating greater social and health problems, such as increases in alcoholism and in the spread of sexually transmitted diseases. The Town also anticipates housing shortages that it would not be able to handle. It was skeptical about VBNC's claim that money would be available through IBAs.

The Panel has not seen evidence that the Project would cause significant demographic change in North Coast communities, except Nain. The Panel therefore believes that the Project would not change the level of demand for social services in coastal communities, other than Nain, to such an extent that mitigative actions beyond those contained in IBAs would be required.

16.3 Regional Reinvestment of Government Revenues

As stated in section 16.1.2, the Panel believes that federal and provincial governments would need to reinvest some of the increased revenues generated by the Project into regional infrastructure and services, if durable and equitable benefits are to occur. While LIA and the Innu Nation would receive financial participation payments through IBAs, these are equivalent to land rents and do not replace government obligations to provide services and infrastructure.

Early in the hearings, some presenters referred to heritage or diversification funds, which are used in other areas to reinvest revenues from resource development projects and to extend benefits to future generations. The four parties to the Memorandum of Understanding (MOU) might wish to explore such an option. The Panel believes, however, that it would be better if governments committed to investing in specific infrastructure and services in northern Labrador. These should increase the ability of people and communities to address fundamental social and health problems and to tackle the challenges of regional and community economic development by building on the benefits of the Project.

A number of presenters said that the level of air transportation service available to coastal communities is seriously inadequate. LIA and other groups and individuals suggested that it was fundamentally unfair for the Project to have a first-class airstrip capable of landing Dash 8 aircraft with a high percentage of completions, while community airstrips depend on visual landings, resulting in a less than reliable system. They asserted that if VBNC needed such an airstrip to protect the health and safety of some 500 workers on site, communities with equal or larger populations needed better airstrips for the same reason.

While the Panel does not conclude that the development of a Category 1 airstrip (see Recommendation 68) at Voisey's Bay automatically requires upgrading of other community airstrips, it does believe that investing in a better air transportation system for the North Coast would be a very appropriate way to use increased public revenues. The federal government would receive significant taxation revenues from the Project and would be able to reduce equalization payments to the Province as a result of increased provincial revenues. Therefore, Canada should reinvest some of these increased revenues into regional infrastructure that would improve the ability of northern Labrador residents to retain and build on the economic benefits of the Project.

Recommendation 91

The Panel recommends that the Province, in consultation with the Labrador Inuit Association, initiate discussions with Transport Canada to develop a five-year strategy to upgrade air transportation facilities on the North Coast to meet Category 1 requirements. Because of the limitations of the existing strip at Nain, and increased levels of air traffic, the Panel recommends that Nain receive top priority.

The Panel also heard from many presenters about the need for improved health care. The Panel acknowledges VBNC's generous donation to the new hospital in Happy Valley-Goose Bay. This hospital, however, only benefits people in coastal communities if they have reasonable access to it. Upgraded air transportation services should improve the success and safety of both emergency and regular travel to the hospital, and should also allow health professionals, such as doctors and dentists, to travel more easily to and from smaller communities.

The Panel also heard from health care providers and residents that more resources are needed to improve preventive and community-based health care programs. The Project might increase demands for such services beyond current capacity in Nain. But even if the Project did not affect demand, the Panel believes that investing increased provincial government revenues from the Project into preventive and community-based health care programs would

• help both individuals and communities in northern Labrador to function more effectively;
• improve quality of life; and
• decrease provincial expenditures for acute health care, social services and corrections.

In the Panel's view, such investment would contribute effectively to durable and equitable social and economic benefits.

Recommendation 92

The Panel recommends that the Province, through Health Labrador Corporation and in consultation with the Labrador Inuit Health Commission and the Innu Health Commission, assess future preventive and community-based health care needs, set priorities for new or enhanced programs and services, and establish those programs and services, as required.