Canadian Lawyer

OPINION Back Page By Jim Middlemiss Resource boom changes legal landscape 50 October 2013 www.CANADIAN L a w ye r m a g . c o m cent since 2008, but it's still a small bar, with 729 practising members. The biggest change, says Stephanie Hickman of Cox & Palmer, is "clients aren't only local anymore. They are national and international." The St. John's firms servicing them are exposed to companies with deep internal legal talent and global law firms. St. Roch Seviour says resource companies are "very sophisticated and have very high expectations. It's caused the [local] bar to raise its game." Thistle adds law firms have responded and "investment into infrastructure and training is significant and far more than it would have been 20 years ago." John Baker of Ottenheimer Baker notes local firms have evolved. "Ten years ago very few people would have been practising in the oil and gas sector or the mining sector. We have grown in those areas." Lawyers say the economic activity generated by the resource boom is trickling down throughout the economy. It's not just the large corporate-commercial law firms benefitting, but smaller firms that deal in personal legal services too. "House construction is just booming," notes Baker. That means mortgages, closings, and related transactions. The boom also means people aren't leaving to find work, keeping more people spending and starting businesses locally. It's not all roses. While St. John's accounts for 40 per cent of the population and 50 per cent of the province's GDP, the provincial unemployment rate is 12.5 per cent, suggesting rural communities, largely dependant on stagnant forestry and fishery, aren't benefitting. Also, the province has surpassed peak oil production based on known reserves, which means revenues will peter out by 2049, soon after the province's hydro energy contract with Quebec expires. "We need to find more oil," says St. Roch Sevioir. Thistle notes oil companies continue to explore and new developments in drilling and extraction are bringing in some extra oil. However, Baker and Hickman believe the future lies in mining, particularly for Labrador. According to the government, it's one of the largest and oldest industries in the province, employing 6,000 people. Sixteen commodities are produced or mined. Baker predicts as oil runs out, mining "will play a more major role in the future." Natural resources are Canada's strength and they can positively change communities. Northern Ontario's Ring of Fire has been called Ontario's oil sands with 100 years of jobs at stake. Currently, Bob Rae, who is representing local Aboriginals, and former Supreme Court justice Frank Iacobucci, Ontario's negotiator, are trying to strike a deal that would open the area to mining the estimated $30to $50-billion in mineral content. Let's hope they succeed and put Ontario on a path to be the next Newfoundland and Labrador. Jim Middlemiss blogs about the legal profession at WebNewsManagement.com. Follow him on Twitter @JimMiddlemiss. Sara Tyson A s Ontario negotiates with First Nations to mine vast mineral deposits in the Ring of Fire, Saskatchewan leverages shale gas and Quebec begins developing its north, they can look to Newfoundland and Labrador to see the positive impact a natural resources boom has on a province and its legal industry. With mining soaring and offshore oil bringing in record revenues, that boom is transforming the province. The evidence is everywhere in St. John's. There are $400 million in construction projects; the St. John's Convention Centre is being renovated and expanded; condos and hotels are being built downtown; and there is a house-building boom. During a recent trip, I met with lawyers from four law firms — regional firms Stewart McKelvey, McInnes Cooper, and Cox & Palmer, and independent Ottenheimer Baker — to talk about the impact the natural resource boom is having on the legal business. "It's an expanding legal market," says Colm St. Roch Seviour, a partner in the natural resources group at Stewart McKelvey. According to St. John's Department of Economic Development, there are nine major resource-related projects underway totalling more than $30 billion, including the $14-billion Hebron offshore platform, the $6.2-billion Muskrat Falls power project, and the $4.25-billion Vale Long Harbour nickel processing facility. Newfoundland now produces 10 per cent of the country's oil through three offshore projects — Hibernia, White Rose, and Terra Nova. The fourth, Hebron, will start producing in 2017. It's a far cry from 1992, when Gulf Oil pulled out of Hibernia because of slumping prices and the federal government issued a moratorium on cod fishing. Jim Thistle, then general counsel for Hibernia, called it one of the darkest days for his home province. Fast forward 20 years and Thistle, now a partner at McInnes Cooper, is upbeat. "Lots of companies that started off locally with Hibernia did well," he says, adding many have used it to springboard into other parts of Atlantic Canada and even Alberta. But it's the presence of multinationals' offices — Norway's Statoil, Brazil's Vale, India's Tata Steel, and more — that captures my eyes. Most of them use local lawyers in some capacity. The city's employment rate in 2012 was 7.2 per cent, down from 14 per cent in 1996. The labour force participation rate is 72.3 per cent, well above the 66.7 per cent average for the country. More than 10,000, mostly full-time, jobs have been created in the past three years and 30,000 since 1996. Between 2006 and 2010, the median family income in the St. John's area rose to the highest level, 23.9 per cent, far outpacing the national average of 9.8 per cent. The economic activity has been good for the legal business. The number of lawyers practising in the province has grown by 10 per

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