A look at local economic impacts

The benefits of mega-projects such as Hibernia and the Sable Offshore Energy Project on the local economies in Newfoundland and Nova Scotia were discussed. It was argued that most of the spin-off activities of such mega-projects are realized externally because the projects are driven by external interests and external funding, and are designed for external markets. Few of the short-term activities that can be done locally provide opportunities for sustained economic growth. Studies have shown that the impact of mega-projects on smaller economies is mainly on the construction sector and related supplies industries. Another reason why mega-projects have limited real effects on the local economy is that foreign investors have traditional supply sources, often with affiliated companies. Local availability of appropriate skills is yet another potential limiting factor. Moreover, most mega-projects have social, environmental and political consequences that are often under-estimated and ignored. In this author's view, most mega-projects have limited long-term domestic spin-offs. The challenge is to maximize the net benefits, and to minimize the social and environmental costs