Wednesday, March 2, 2011

Rural Newfoundland remains in desperate need of a champion

For all the facts and figures in the 309-page MOU report on rationalizing and restructuring the NL fishery, some key information is still missing.

Including the names of the corporate kingpins and the extent of their grip on the fishery.

There may have been 102 licensed fish plants in the province in 2010, owned by close to 60 companies, but 60 per cent of the annual seafood production was controlled by 4 companies.

The names of which weren’t released.

It’s widely believed that some of the larger fish processors also control fishermen and their catches, having guaranteed bank loans on an untold number of fishing vessels.

There aren’t many independent NL fishermen, for example, who can pry a $1-million boat loan from a bank.

Which is where a processor would step in as a co-signer.

It’s thought that most of the 3,000 fishing enterprises that make up the inshore fleet (vessels under 40-feet in length) remain financially independent, considering their average debt is $2,150.

But the independence of the 861 larger vessels that make up the nearshore fleet (vessels more than 40-feet in length) has been questioned, given the average debt is $310,000.

The MOU report did not investigate the possible links between large processors and fishing vessel ownership.

In rejecting the MOU report, provincial Fisheries and Aquaculture Minister Clyde Jackman said the province was looking for ways to restructure the fishery — not just downsize it.

A fish plant worker who makes $15,000 a year today would only make a couple of thousand dollars more after a $450-million rationalization.

But by walking away from the MOU, Jackman is essentially leaving the restructuring to the industry itself — or, more specifically, to the larger companies that control the industry.

Fishery icon Gus Etchegary compares that to oil companies being asked to develop government policy and a royalty regime for the oil industry.


Jackman seemed almost blindsided by the contents of the MOU report, which was surprising considering so many employees of his own department — Fisheries and Aquaculture — were involved in putting it together.

Six committees (steering committee, financial analysis, harvesting rationalization, processing restructuring, worked adjustment, seafood marketing) helped formulate the MOU report, with between two and four representatives of the Department of Fisheries and Aquaculture on each committee.

Jackman should have known well in advance if an i wasn’t dotted or T crossed.

Then again, the next provincial election is set for Oct. 11, meaning it’s probably not in the Dunderdale administration's best interest to slash and burn rural NL.

As former Fisheries Minister Trevor Taylor said on Tuesday’s CBC Fisheries Broadcast, government has to be seen as doing something, “but can’t be seen as doing too much."


The basic finding of the MOU report comes down to the cliché: Too many fishermen chasing too few fish.

But what both levels of government have yet to address — almost 20 years after the first moratoria was slapped on a commercial fishery — is how to rebuild groundfish stocks such as cod and flounder.

In 1989, the landed value of cod alone was $120 million — accounting for almost two-thirds of the top 5 species.

In 2009, cod didn’t even register as a top species in terms of landed value.

At $165 million, snow crab was the No. 1 species, following by shrimp at $109 million.

There are no magic solutions to the problems facing the fishing industry today that will provide an acceptable level of income to fishermen or plant workers.

Our bed has been made, in other words, and the outports must lie in it.

But there’s hope yet if fish stocks can be rebuilt.

Some industry critics say that won’t happen until there’s a full-scale judicial inquiry into the management and control of the NL fisheries.

Similar to the ongoing inquiry into the disappearance of B.C. salmon stocks.

Our clock is ticking.

Oil revenues are expected to start declining in seven years.

How will we pay the bills then if we don’t start diversifying now?

Is bankruptcy around the corner?


The cost of implementing the MOU’s recommendations has been pegged at $450 million (although processing sector officials say it would cost less than half that amount).

Still, the fishing industry is getting smaller every year through attrition, which doesn’t cost government a dime.

Not directly anyway.

According to the MOU report, 500 or more fishermen — and 50 core-fishing enterprises — are projected to leave the workforce every year between now and 2015.

As for plant workers, 600 of them are expected to leave the industry every year between now and 2015.

Of the 102 licensed processing plants in the province in 2010, in five years time the number is expected to drop by 20 per cent.

Downsizing will take place even if governments do nothing.

The choice comes down to a planned landing vs. a crash landing.


Derek Butler of the Association of Seafood Producers says the provincial government has a choice to make.

If government wants a social model for the fishery it has to step up to the plate.

If government wants a business model for the fishery it has to back away.

Which is what the province appears to be doing.

But then maybe the writing has been on the wall for the NL fishery for decades.

In 1972, Parzival Copes of Memorial University released a controversial bombshell report that predicted the demise of the province’s fishery.

He said the fishery in its current form was unsustainable, and recommended an immediate vast out-migration of people to other parts of Canada as the only realistic solution to the problem.


West coast fish processor Bill Barry was also on Tuesday’s Fisheries Broadcast, describing the MOU report as “excellent.”

But then in a Feb. 18, 2008 Globe and Mail article (The fishery is dead; long live the fishery), Barry predicted that over the next 5 years the fishery is in for change.

Plants will close, and yet more fishermen and plant workers will be forced to turn their backs on the sea.

Barry was pretty much on the mark.

Barry told The Globe that the Alberta oil sands will be the “saviour” of the Newfoundland fishery in that the drain of human capital will accelerate the end of the “old fishery” and herald in a new one with better jobs and bigger money.

The same amount of fish will be chased, but by fewer fishermen and plants.

The inshore fishery will die, but a more efficient, far less labour intensive killing machine will be birthed to replace it.

“The most important thing that could happen is for everyone to be brutally honest with each other, give each other a great big hug, and say it’s over,” Barry said of the traditional fishery.

For all that, The Globe described Barry as a “champion” of the Newfoundland and Labrador fishery.

The Globe got it wrong, of course.

Barry is a champion of the Barry Group.

Rural NL remains in desperate need of a champion.

1 comment:

Ursula said...

I have said it before and I shall say it again . In twenty years time rural NL. will just be a mecca for tourists , with a handful of younger folks staying on to run the B&Bs and act as tour guides for the quaint little fishing museums .