What If St. John's Diversified Beyond Fishing and Oil Earlier?

The Actual History

St. John's, the capital city of Newfoundland and Labrador, has historically been defined by its relationship with two primary industries: fishing and, more recently, offshore oil. For centuries after its settlement in the early 1500s, St. John's served as the commercial and administrative hub for Newfoundland's cod fishery—one of the richest fishing grounds in the world. The city's harbor provided a natural port for fishing vessels, and its economy revolved almost entirely around harvesting, processing, and exporting cod.

When Newfoundland joined Canada in 1949, the province remained heavily dependent on the fishery. Throughout the 1950s-1980s, the provincial government under Joey Smallwood and subsequent premiers attempted to modernize and industrialize the economy with limited success. Many of these efforts focused on resource-based megaprojects that often failed to deliver sustainable economic benefits.

By the late 1980s, northern cod stocks were in severe decline due to overfishing, changing ocean conditions, and poor management practices. This culminated in the catastrophic cod moratorium of July 2, 1992, when the Canadian government announced an immediate shutdown of the northern cod fishery. This sudden closure eliminated approximately 30,000 jobs across Newfoundland and Labrador, with profound effects on St. John's as the provincial capital and economic center.

The moratorium represented the largest industrial closure in Canadian history and triggered a period of significant economic hardship and population decline. Between 1991 and 2001, Newfoundland and Labrador's population decreased by approximately 10%, with many residents moving to other provinces in search of employment.

Fortunately for St. John's, the discovery of offshore oil provided a new economic lifeline. The Hibernia oil field was discovered in 1979, but development proceeded slowly due to technical challenges, regulatory hurdles, and the Ocean Ranger disaster of 1982, when an offshore drilling rig sank during a storm, killing all 84 crew members. Commercial oil production finally began in 1997, followed by additional developments at Terra Nova (2002), White Rose (2005), and Hebron (2017).

The oil industry created a boom in St. John's, transforming it into what some called "the Aberdeen of North America" with reference to Scotland's oil capital. Real estate prices surged, new office buildings and hotels appeared downtown, and high-paying jobs in the energy sector attracted both returning Newfoundlanders and newcomers to the city. By the 2010s, St. John's had one of the strongest economies in Canada, with lower unemployment and higher average incomes than it had experienced historically.

However, this newfound prosperity came with vulnerabilities. When global oil prices collapsed in 2014-2015, the provincial economy suffered significantly. The government, which had become heavily dependent on oil royalties, faced serious fiscal challenges. This pattern repeated with the oil price crash of 2020, compounded by the COVID-19 pandemic.

While St. John's has diversified somewhat in recent years—with growth in technology, ocean sciences, tourism, and creative industries—these sectors remain relatively small compared to the oil industry's dominance. The city's economy continues to experience boom-and-bust cycles tied to global commodity prices, and discussions about the need for economic diversification have intensified as concerns about climate change and the long-term viability of fossil fuel industries have grown.

As of 2025, St. John's remains significantly dependent on the offshore oil sector, though efforts to build a more diverse and resilient economy have gained momentum as the energy transition accelerates globally.

The Point of Divergence

What if St. John's had diversified its economy much earlier, long before the 1992 cod moratorium and the oil boom of the late 1990s and 2000s? In this alternate timeline, we explore a scenario where provincial and municipal leaders implemented a more successful economic diversification strategy beginning in the 1970s, setting the city on a profoundly different economic trajectory.

Several plausible divergence points could have initiated this alternate path:

First, the 1969 discovery of the Come By Chance oil deposit could have sparked different thinking among provincial leadership. Rather than focusing solely on resource extraction, Premier Frank Moores (elected in 1972) might have recognized earlier signs of the fishery's vulnerability and implemented a comprehensive economic diversification strategy for St. John's and the province more broadly.

Alternatively, the divergence could have occurred through federal intervention. In our timeline, the Department of Regional Economic Expansion (DREE) established in 1969 provided funding for various development projects in Atlantic Canada, but many of these reinforced existing resource dependencies rather than fostering new economic sectors. In an alternate timeline, DREE might have implemented a different approach in Newfoundland, providing targeted support for emerging industries in St. John's with greater emphasis on service, technology, and knowledge-based sectors.

A third possibility involves different outcomes from the Atlantic Development Board's research in the late 1960s. The Board could have identified more promising opportunities for economic diversification in St. John's, leading to early investments in sectors like marine technology, cold ocean research, and specialized manufacturing. With Memorial University already established as a significant institution in the city, academic-industry partnerships could have emerged decades earlier than they did in our timeline.

The most realistic scenario combines elements of all three: provincial leadership that recognized the risks of resource dependency earlier, more strategic federal investment through programs like DREE, and research-driven identification of promising new economic sectors. In this alternate timeline, St. John's began a deliberate economic transformation in the mid-1970s—nearly two decades before the cod moratorium forced such changes out of desperation rather than strategic foresight.

Immediate Aftermath

Economic Policy Shifts (1975-1980)

In this alternate timeline, the provincial government under Premier Frank Moores established the St. John's Economic Diversification Commission (SJEDC) in 1975, a joint provincial-municipal body tasked with developing and implementing a 25-year economic transformation plan for the capital city. The Commission included representatives from Memorial University, the St. John's Board of Trade, labor unions, and various industry experts.

The SJEDC's first five-year plan (1975-1980) identified four strategic sectors for development:

Marine Technology and Ocean Sciences: Leveraging Newfoundland's geographic position and Memorial University's existing marine research capacity
Information Technology and Communications: Establishing St. John's as an Atlantic telecommunications hub
Specialized Manufacturing: Focusing on cold-weather equipment, marine supplies, and specialized fishing technology
Cultural Industries and Tourism: Developing year-round tourism and supporting growth in film, music, and arts

Federal support proved crucial in this alternate timeline. Instead of focusing primarily on traditional resource sectors, the Department of Regional Economic Expansion (DREE) partnered with the provincial government to fund the St. John's Innovation District—a 120-acre research and business development area adjacent to Memorial University—in 1976. This development included tax incentives for new businesses, subsidized office space for startups, and funding for applied research facilities.

The early results were modest but promising. By 1980, approximately 45 new businesses employing around 1,200 people had established operations in the Innovation District. The Ocean Sciences Centre at Memorial University received expanded funding, allowing it to attract leading international researchers and establish industry partnerships years earlier than in our timeline.

Early Successes and Challenges (1980-1985)

The second phase of diversification efforts began during the early 1980s recession, which hit Newfoundland's traditional sectors hard. In our timeline, this period saw increased unemployment and outmigration. In the alternate timeline, while St. John's still experienced economic challenges, the nascent diversification efforts provided some insulation from the worst effects.

Several key developments emerged during this period:

TechNL (originally called NewTech) was established in 1981 as an industry association supporting the growing technology sector. By 1985, St. John's had over 75 technology companies employing approximately 2,500 people—modest by national standards but significant for a city of approximately 100,000 residents.
The Atlantic Communications Corporation (ACC) chose St. John's for its regional headquarters in 1982, citing the Innovation District incentives and the growing pool of technical talent. This brought 350 high-paying jobs to the city and established crucial telecommunications infrastructure that would later support further growth.
The Marine Institute, which in our timeline became part of Memorial University in 1992, was established as an independent degree-granting institution with expanded mandate in 1983 in this alternate timeline. With enhanced federal and provincial funding, it developed world-leading programs in marine engineering, oceanography, nautical science, and fisheries management.
The St. John's Cultural Plan of 1984 led to the establishment of the Arts Council of Newfoundland and expanded support for cultural industries. The historic downtown underwent an earlier revitalization, with heritage buildings preserved and repurposed for creative businesses, restaurants, and boutique accommodations.

These developments faced opposition from traditional economic interests. The powerful fishing industry initially viewed diversification efforts as a threat to their political influence and access to government support. Some community leaders worried about cultural changes associated with economic modernization. The provincial bureaucracy, accustomed to focusing on resource management, struggled to adapt to supporting knowledge-based industries.

Despite these challenges, by 1985, approximately 15% of St. John's economy came from the new strategic sectors—still a minority but representing significant progress compared to the almost complete resource dependency that characterized the city in our timeline.

Preparing for Transition (1985-1992)

The period from 1985 to 1992 was particularly crucial in this alternate history. In our timeline, these years saw growing evidence of the cod stock collapse but little practical preparation for the eventual moratorium. In the alternate timeline, St. John's continued building economic resilience that would prove vital when the fishery crisis hit.

Key developments during this period included:

The North Atlantic Technology Fund was established in 1986 with $75 million in combined federal, provincial, and private capital. This venture fund provided early-stage investment for promising technology companies in St. John's, addressing the capital gap that often forced Newfoundland entrepreneurs to relocate to Toronto or Boston in our timeline.
The Cold Ocean Research Partnership (CORP) formed in 1987 as a collaboration between Memorial University, industry partners, and government agencies. CORP focused on developing technologies for Arctic and harsh marine environments, positioning St. John's as a global leader in this specialized field well before similar initiatives emerged in our timeline in the 2000s.
International air connections expanded significantly earlier than in our timeline. In 1988, direct flights began between St. John's and London, followed by seasonal service to Dublin in 1990. These connections supported both business travel and tourism growth, with visitor numbers increasing 45% between 1985 and 1992.
The Creative Business Incubator opened in 1990 in a renovated factory building in downtown St. John's, providing affordable workspace and business support for entrepreneurs in design, digital media, film, and other creative fields. By 1992, it housed over 30 small businesses employing approximately 120 people.

While these initiatives were building momentum, signs of the impending fisheries collapse became increasingly evident. In this alternate timeline, the diversified economy did not prevent the cod moratorium—the ecological factors leading to the stock collapse remained the same. However, St. John's entered this crisis with a significantly more diverse economic base than in our timeline, with approximately 25% of its economy now tied to the strategic growth sectors established since 1975.

Long-term Impact

Weathering the Cod Moratorium (1992-1997)

When the cod moratorium was announced on July 2, 1992, it still represented a severe economic shock for Newfoundland and Labrador. However, in this alternate timeline, St. John's experienced significantly different outcomes compared to our timeline.

The unemployment rate in St. John's peaked at 14% in 1993, compared to nearly 20% in our timeline. While many smaller coastal communities still suffered devastating economic impacts, St. John's ability to absorb displaced workers from the fishery was markedly improved. The technology, marine science, and creative sectors continued growing despite the provincial recession, providing employment options that simply didn't exist in our timeline.

The federal Atlantic Groundfish Strategy (TAGS) program, which provided income support and retraining for displaced fishery workers, was implemented differently in this alternate timeline. Rather than primarily funding temporary make-work projects and basic retraining, TAGS resources in St. John's were channeled through the established innovation ecosystem:

Approximately 1,200 former fishery workers completed specialized retraining programs at the Marine Institute and Memorial University between 1992-1996
The Innovation District established a "Second Career" incubator specifically supporting former fishery workers interested in entrepreneurship
Technology companies received wage subsidies for hiring and training former fishery employees for technical and administrative roles

By 1997, when TAGS funding ended, St. John's had avoided the population decline experienced in our timeline. In fact, the city's population had grown modestly as people relocated from smaller communities. The economic diversification that began in the 1970s had created sufficient resilience to absorb much of the shock from the fishery collapse.

A Different Oil Boom (1997-2008)

In both timelines, commercial production at the Hibernia oil field began in 1997, injecting new economic activity into St. John's. However, the nature and impact of the oil boom differed significantly in the alternate timeline.

Balanced Economic Development

In our timeline, offshore oil quickly dominated the St. John's economy, creating a new form of resource dependency. In the alternate timeline, oil became an important sector but not the overwhelming economic force it was in our reality. By 1997, the strategic sectors identified in the 1970s had matured considerably:

The technology sector employed approximately 7,500 people in St. John's
Ocean sciences and marine technology companies employed another 3,000
Cultural industries, including tourism, supported roughly 4,500 jobs
Specialized manufacturing employed approximately 2,800 people

These sectors provided economic ballast that prevented oil from creating the same boom-and-bust dynamics experienced in our timeline. When Hibernia came online, it contributed to growth rather than fundamentally reshaping the city's economic character.

Enhanced Local Capacity

The diversification efforts of the previous decades meant that St. John's had built significant local capacity in engineering, project management, environmental services, and technical fields. This allowed local companies to capture a larger share of the oil industry supply chain than in our timeline.

The North Atlantic Technology Fund had supported the growth of several companies specializing in harsh environment technologies, remote monitoring systems, and marine safety equipment. These firms were well-positioned to serve the offshore oil industry, but importantly, they had diversified customer bases beyond Newfoundland, selling solutions globally to marine and Arctic industries.

Strategic Investment of Oil Revenues

Perhaps the most significant difference concerned the management of oil revenues. In this alternate timeline, the province established the Newfoundland and Labrador Future Fund in 1998, modeled after the Norwegian sovereign wealth fund. This fund captured approximately 30% of provincial oil royalties for long-term investment.

Additionally, a portion of oil revenues was directed to the Strategic Innovation Fund, which provided:

Expanded research funding for Memorial University
Matching grants for private R&D in the province's strategic sectors
Seed capital for new ventures in non-resource industries
Infrastructure improvements to support the knowledge economy

By 2008, when the global financial crisis hit, St. John's had a fundamentally different economic structure than in our timeline. Oil was important but existed alongside other sophisticated economic sectors with international connections.

Resilience Through Economic Cycles (2008-2025)

The divergence between the two timelines became even more pronounced during the economic turbulence of the 2008-2025 period. In our timeline, St. John's experienced dramatic boom-and-bust cycles tied to oil prices, with severe provincial budget challenges when oil revenues declined. In the alternate timeline, the city demonstrated remarkable resilience through multiple economic shocks.

The 2008 Financial Crisis

When global markets collapsed in 2008, St. John's diversified economy proved advantageous. While the oil sector experienced investment delays and some projects were postponed, the technology and ocean science sectors remained relatively stable. The Newfoundland and Labrador Future Fund, which had accumulated approximately $3.2 billion by 2008, provided fiscal capacity for the province to maintain critical services and even make counter-cyclical investments in infrastructure.

The 2014-2015 Oil Price Collapse

The oil price collapse of 2014-2015 demonstrated even more clearly the benefits of early diversification. In our timeline, this period triggered a significant provincial recession and fiscal crisis. In the alternate timeline, while the oil sector contracted, other sectors continued growing:

The technology sector, now matured with several companies having global reach, expanded by 8% between 2014-2016
Tourism reached record levels, with St. John's having established itself as a year-round destination with strong cultural attractions
The ocean sciences cluster secured major international research partnerships and commercial contracts
The creative industries, building on decades of development, contributed significantly to both export earnings and quality of life factors that supported talent retention

The COVID-19 Pandemic and Beyond

When the COVID-19 pandemic struck in 2020, coinciding with another oil price collapse, St. John's alternate timeline demonstrated the ultimate test of its economic resilience. The city's technology sector quickly adapted to remote work, and its diversified economic base prevented the severe fiscal challenges experienced in our timeline.

By 2025, this alternate version of St. John's looks markedly different from our reality:

A population of approximately 135,000 (compared to roughly 110,000 in our timeline), having avoided the outmigration cycles that characterized reality
A balanced economy where no single sector accounts for more than 20% of economic activity
The Newfoundland and Labrador Future Fund with assets exceeding $18 billion, providing long-term fiscal stability
A vibrant innovation ecosystem anchored by Memorial University and over 250 technology companies
International recognition as a center of excellence in ocean technology, cold ocean research, and harsh environment innovation
A thriving creative sector with global connections in film, music, and digital media
A more compact, walkable urban form with excellent public amenities and cultural venues
Significantly higher labor force participation rates and household incomes compared to our timeline

Perhaps most importantly, this alternate St. John's has developed the institutional capacity, entrepreneurial culture, and economic diversity to adapt to future challenges, including the ongoing energy transition. Rather than facing the energy transition with anxiety about potential loss of oil revenues, the city is actively engaged in developing clean energy technologies, carbon capture solutions, and other opportunities aligned with global sustainability trends.

Expert Opinions

Dr. James Feehan, Professor Emeritus of Economics at Memorial University, offers this perspective: "The history of Newfoundland and Labrador has been characterized by cycles of resource dependency—from cod to pulp and paper to minerals to oil. Each cycle brought temporary prosperity followed by painful adjustments. In an alternate timeline where St. John's diversified earlier, the fundamental pattern of our economic history would have been altered. The cod moratorium would still have been traumatic, but the social and economic consequences would have been significantly moderated. Most importantly, the province would have developed the institutional capacity and human capital to continuously adapt rather than lurching from one resource boom to the next. The difference wouldn't just be economic—it would transform Newfoundland's cultural self-perception from a place defined by resource extraction to one characterized by innovation and adaptability."

Dr. Sarah Thompson, Director of the Atlantic Canadian Studies Program at Dalhousie University, provides this analysis: "What's fascinating about this alternate scenario is how it might have changed Atlantic Canada's regional dynamics. In our timeline, Halifax emerged as the undisputed economic center of Atlantic Canada, while St. John's experienced more volatile boom-and-bust cycles. In a timeline where St. John's diversified earlier, we might have seen a more balanced regional development pattern with two strong urban centers driving growth. This could have increased Atlantic Canada's overall political influence within Confederation and potentially altered federal regional development policies. It might also have reduced outmigration from the region as a whole, as both cities could have retained and attracted young talent with diverse career opportunities. The ripple effects would extend throughout the Atlantic provinces, potentially creating a more economically integrated and prosperous regional economy."

Dr. Michael Collins, Senior Fellow at the Canadian Institute for Resource Economies, concludes: "The St. John's alternate timeline illustrates a crucial lesson about resource-dependent economies—early diversification during resource booms creates resilience during inevitable busts. In our actual history, Newfoundland repeatedly failed to transform resource windfalls into sustainable economic advantages. The benefits of early diversification compound over time through knowledge spillovers, institutional development, and human capital accumulation. By the 2020s, the differences between the two timelines would be profound, not just in economic statistics but in population patterns, urban development, and even cultural confidence. The alternate St. John's would be not just more prosperous but more sustainable in facing 21st-century challenges like climate change, technological disruption, and demographic shifts. The counterfactual reminds us that path dependency in economic development is powerful, but deliberate policy choices can create new paths with transformative long-term consequences."