For every issue and problem that surfaces in the Atlantic Canadian fishery, there are an exponential number of possible solutions offered up — many of which never see the light of day.
There is a litany of reasons why ideas aimed at “fixing” many of the systemic problems in today’s fishery never amount to more than lip service — including a lack of trust and cooperation. So, it will be interesting to see what happens to a few high-profile observations and nuggets of wisdom that recently emerged from the much-anticipated Big Reset.
As the majority of Navigator readers will know, last September, newly-minted N.L. Premier Andrew Furey tasked the former CEO of the British Royal Mail and Canada Post, Dame Moya Greene, to chair his Premier’s Economic Recovery Team (PERT). Basically, it was her job to pull together a committee to recommend how to fix Newfoundland and Labrador’s growing financial burden — a net debt of over $14 billion, with a gross debt of over $47 billion.
Greene described the Big Reset as a transformational plan for the province that attempts to tie all aspects of the economy and society together to meet some of the biggest challenges and opportunities ever faced by the province.
With a reputation of not mincing words, avoiding the truth or tip toeing around controversial topics, the former Royal Mail boss lived up to that notoriety in this report. She did not back down from, in some cases, decades-old issues that have negatively impacted or held back specific industries — including those in the fishery.
For example and to the surprise of some, Greene and her team ventured into the contentious and often dubious realm of the processor/harvester relationship.
“The relationship between harvesters and processors is often negatively impacted by the collective bargaining structure. This is often at the expense of maximizing value from the market. The current collective bargaining model was established as part of a review in 2003. One of the key recommendations of that review was to establish a fish auction so that market and quality issues are taken into consideration in the price paid for fish. This recommendation was rejected in preference of price setting by an independent panel and a mediation process between the fish harvesters’ union and plant owners,” the PERT reported stated.
Greene’s team explained that under the current collective bargaining structure, harvesters are organized under one bargaining agent and processors are typically represented by two associations. This structure is anti-competitive by nature and requires an exemption in the federal Competition Act.
“This price-setting structure often isolates the industry from the market where quality and consistency of supply is required. The structure can also tarnish the relationships between harvesters and processors, making it difficult to collaborate on other important issues. As well, many of the decisions and policy positions brought forward harm fish processing workers, but the voice of harvesters overshadows these concerns.”
The PERT report also touched on the industry struggles with different views on structure and the future of the cod industry.
“In the 1980s, cod was harvested by both an inshore fleet and an offshore fleet. Transferable quotas assigned to the offshore fleet allowed companies to plan their business and operate year-round fish processing facilities. Many people wish to see a return to a more labour intensive traditional inshore fleet cod fishery in an effort to keep employment levels up, even though some fish processors have already engaged temporary foreign workers to address labour shortages. Focusing on a labour-intensive inshore fishery is not consistent with the approach taken by the province’s competitors, such as Norway and Iceland, who target a market-driven supply chain and high-quality product.”
As well, in a surprise to some, the Big Reset was actually quite critical of the new owner-operator and fleet separation regulations enacted in December by the Department of Fisheries and Oceans (DFO).
“At the urging of harvesters, the federal government recently instituted a legislative requirement that prohibits controlling agreements for loans by processors to harvesters. This effectively prohibits any form of vertical integration between harvesters and processors and removes any mechanism for processors to maintain security of supply. Without security of supply, it is difficult for processing companies to allocate capital or access capital from lenders to invest in new technologies. An important funding source for harvesters to invest in technology or retool for new fishing opportunities has been removed.”
The committee also addressed the long-standing issue of new processing licences. In fact, the report actually highlighted this matter of contention into one of its official recommendations.
It said that the Newfoundland and Labrador Provincial Government should reinstate resource threshold requirements before new fish processing licences are issued.
“A moratorium on new fish plant licences and new species being added to existing processing licences was instituted in 2003 to prevent the collapse of the fish processing sector. As part of the policy, no new licences would be issued until the resource reaches a minimum threshold. These thresholds were eliminated in 2019 and new licences were approved. With no new fish resources available, these new licences will only spread the resource around more plants, thereby jeopardizing the viability of those that currently exist.”
Greene pointed out that different visions for the future of the fishery are held within and outside of the industry — depending on who you are and what interests you represent.
One vision is that of a highly capitalized industry with higher incomes for fewer participants and with participants working longer periods of the year. This model can be implemented within current demographic trends.
A second view proposes a more traditional lower capitalized industry with more plants and more seasonal work supported by employment insurance (EI). This would require either in-migration to rural areas or increased use of temporary foreign workers in the fishery.
“Maximizing employment — and thus access to the EI system — is often more important to workers than maximizing value. EI is still an important source of income for harvesters and plant workers and this creates a market distortion. External investors are often viewed with distrust as workers believe it will shift the focus from employment maximization to capitalization and productivity.”
And a critique of the fishery would not be complete without delving into the issue of management or mismanagement of the resource.
“The governance structure of the fisheries is not working for this province. Newfoundland and Labrador has seen a grossly mismanaged resource by the federal government, often with provincial participation, that resulted in the collapse of the once great Northern cod stock. The federal government has often ignored the key principle of adjacency and fisheries resources are used as bargaining chips with other nations. The allocation of yellowtail flounder resources by Canada to the United States is a recent example. Canada has access to the 200-mile limit and the resources within it only because Newfoundland and Labrador brought them to Canada. Newfoundland and Labrador’s fisheries and ocean resources are too important to the province for the province not to have an equal voice in its fisheries management policy and decisions.”
Strong words indeed, but how to make it better? Look to our competitors perhaps?
“Iceland and Norway have had better success managing their fisheries than Newfoundland and Labrador. As nations, these countries can manage their own fisheries and manage stocks for maximum sustainable biological and economic output. The economic and market focus of Iceland and Norway tends to attract capital investment and drive value and incomes. Full utilization of the resource, transferable quotas, science-based decision-making, and development of technology and expertise for export are key features of their fisheries. Participants work together with a long-term view to maximize value. Adopting a similar approach is not possible under the province’s current structure. Key differences include a complex federal-provincial management regime and the regulatory and operational structure of the fishery itself,” the PERT report stated.
So, what does this all mean? Moya Green’s committee basically said that concrete decisions need to be made, once and for all.
“All partners need to decide what kind of fishery the province should have and what actions should be implemented to become a world class fishery. Leadership is required to manage the province’s adjacent marine resources effectively. Under the current structure, fisheries management is not always effective and joint management will not be effective unless substantive changes occur.”
