Decline and Recovery
For much of the 19th century the economy, based primarily on cod fishing and seal hunting, thrived. In the last quarter of the century, efforts were made to broaden Newfoundland's economic base, by developing agriculture and mining. Valuable minerals, including iron ore, were discovered in Labrador. A cross-island rail-road, from St. John's to Port aux Basques, was begun in 1881. Then, in the early 1890's, Newfoundland suffered several economic setbacks. A fire destroyed most of St. John's in 1892. In 1893 the market for salt cod declined, and in 1894 there was a series of bank failures.
During this period of economic troubles, Newfoundland sought aid from both Britain and Canada, but neither country would provide significant economic assistance unless Newfoundland would surrender some control over its internal affairs. The negotiations with Canada failed when Canada refused an appeal by Newfoundland to join the Confederation on its own terms. As a result, many Newfoundlanders were left with considerable bitterness toward the Dominion.
By the beginning of the 20th century economic recovery had begun. The fishing industry revived; the railroad had been completed (1898); and an important industry—the manufacture of pulp and paper—had been established.
Three significant territorial issues were resolved in Newfoundland's favor in the 20th century. In 1904 France renounced its right to cure fish on Newfoundland's western shore. In 1910 the Hague Tribunal settled, in favor of the Newfoundlanders, an old dispute with the United States over offshore fishing rights. A part of Labrador that had been the object of dispute between Quebec and Newfoundland was awarded to Newfoundland in 1927 by the Imperial Privy Council.
The worldwide economic collapse of the 1930's wiped out the export markets upon which Newfoundland's economy depended. Because of its financial difficulties, Newfoundland gave up self-government and returned to colonial status in 1934. During World War II, defense expenditures, mainly by the United States, bolstered the economy. In 1949 Newfoundland, including Labrador, became Canada's 10th province. Leading Newfoundland into the confederation was Joseph R. Smallwood, the province's first premier, 1949–72.
The new government encouraged such industries as pulp and paper manufacturing and food processing, often with financial assistance. In the early 1960's the Evacuated Communities Act provided aid for families moving from the smallest and most isolated communities to more populous areas, in order to centralize the population and ease government administration tasks. Growth of the pulp and paper industry, introduction of quick-freezing for the preservation of fish, discovery of new mineral deposits, and the development of manufacturing stimulated economic growth in the 1970's.
In 1979 oil was discovered off Newfoundland's coast. In 1990 an agreement was reached between Newfoundland, the federal government, and a group of oil companies to jointly develop the oil field. In the 1990's, there was a major decline in the fishing industry as the number of fish in coastal waters decreased. In 2003, cod fishing was banned in the Atlantic Ocean northeast of Newfoundland and Labrador, further causing tens of thousands of fishers to lose work.
Canada's Parliament officially renamed the province Newfoundland and Labrador in 2001. The province had formerly been called simply Newfoundland.
