Challenges and Opportunities

In previous recent columns, I suggested Canada’s capture fishing industry is facing a very serious crisis, due to decreasing landings and a shrinking workforce and we need to be thinking about how to deal with it.

The industry in Newfoundland and Labrador is also likely to see a big increase in the cost of electricity, due to the behind-schedule and over-budget Muskrat Falls hydro-electric power development.

Faced with this situation, there are four directions we need to pursue, including:

  1. Diversifying the resources the industry depends on,
  2. Obtaining more value from what we catch,
  3. Increasing the productivity (output per unit of input) of labour, capital, energy and
  4. Improving operational efficiency.

Doing these things could be the difference between industry collapse and survival. But survival is not really enough. We need to have an industry that is sustainable, viable and prosperous.

Resources are the foundation of the industry. Without them, all the free trade agreements in the world offer little opportunity to people who depend on fish for a living.

For most of our history, we have depended on large, abundant resources — notably cod on the Atlantic coast and salmon on the Pacific coast. More recently, we have depended on a few less abundant, but valuable shellfish species to support our industry in the Atlantic region.

Lobster has increased substantially in abundance, but the other shellfish species have been decreasing. We need new opportunities to replace them.

In our search for those new opportunities, we need to recognize that we have a large and diverse ocean ecosystem that includes many different marine animals. No single species is likely to be able to replace the loss of cod or shrimp or crab. But smaller-scale fisheries focused on less abundant species may be possible.

For example, we already have small-scale fisheries focused on sea cucumbers, whelks, hagfish and Icelandic scallops that support jobs in the harvesting and processing sectors.

The problem with such presently underutilized species is we don’t know much about them, because the larger opportunities in more abundant species took all our attention. We don’t know their habitats, lifecycles or abundance. And we don’t know how to harvest, process or market them.

When such species have been developed, the work to figure out how to do it was undertaken largely through the Canadian Centre for Fisheries Innovation (CCFI). Development of the inshore shrimp fishery off the northeast coast of Newfoundland is a notable example of how a previously underutilized resource developed into a substantial fishery, because of work done by CCFI.

We now need to be looking for new opportunities in underutilized species.

A few years ago, I downloaded all of the reported catch data available through the website of the Northwest Atlantic Fisheries Organization (NAFO). The data covered the period from 1960 to 2011. As I analyzed the data, I discovered that NAFO division 3L had reported catches for 87 different fish species, of which cod represented only about 50 per cent over the 52 years included in the data.

In division 3K, catches included 67 different fish species and cod again represented only about 50 per cent. Surely, that is an indication we can find some new opportunities.

With less fish to catch, it is essential that we get more value from the fish we do catch.

Again, there is plenty of opportunity. More attention to quality can help us sell to markets for products that offer higher prices. We can process the by-products, now generally treated as waste, to obtain more value. The Icelanders are already doing very well using this approach and we can follow their lead. Some work has already been done here in that direction, but more is needed.

Because population demographics show we will have fewer people working in the industry in the future, we need to find ways to attract new people to the industry and increase output value per person. That means we need to change the way we do things. Specifically, it means we need to use more technology and less human effort to carry out harvesting and processing activities.

For several years now, CCFI has had a focus on doing exactly that, with some success. In the past three years, we have obtained two new patents and have another patent application in progress for new processing technologies we have developed.

As the resources we have depended on have declined, the value of the assets used to catch and process those resources have diminished, as well. To make a transition from those species to others and to increase use of technology, the industry will need to make new investments. Capital to make those investments will not be available unless there is a reasonable return on investment. That is only possible by obtaining higher value for our products and improving our operational efficiency.

Fish harvesting and processing are very energy-intensive activities.

In the harvesting sector, most of the energy used comes from petroleum-based fuels. However, the processing sector uses a lot of electricity. If prices paid for electricity double — which seems likely in Newfoundland and Labrador — it will substantially increase processing costs and erode the sector’s competitiveness.

To avoid that, CCFI has been investigating some new technologies that offer potential for substantial savings on energy costs. Some of these technologies can be used in harvesting and others in processing.

Improving the productivity of labour, capital and energy will require improvements in operational efficiency. That won’t come from simply getting people to work harder. Indeed, our aging workforce is likely not as productive as it was when people were younger. To compensate, we need to work smarter — using more technology and different work methods to obtain similar — or even better — results.

Meeting the challenges we face will not be easy. But there are opportunities that can help us meet them.

Over the past couple of years, three new federally-funded initiatives have provided funding that can be used to support the work that needs to be done.

The Ocean Frontier Institute (OFI) is a collaborative research initiative among universities in Atlantic Canada, also working with others elsewhere, “to harness the vast potential” of the ocean.

According to the Institute’s website, “The Ocean Frontier Institute is focused on understanding key aspects of ocean and ecosystem change and developing strategic and effective solutions that can be applied both locally and globally. OFI’s aim is to conduct research that advances policy decisions and advances the development of a blue — and sustainable — economy.” Among the work to be undertaken are projects aimed at sustainable capture fisheries and their ecosystems.

Another important initiative that is just getting started is the new Ocean Supercluster (OSC).

The OSC is an industry-led initiative that includes substantial investments by companies in different marine sectors, including fishing and aquaculture, with matching funds coming from the federal government. The objective is to develop, deploy and export innovative technology platforms applicable to multiple ocean industries. Work done through the OSC should provide better ways of understanding the ocean ecosystem, including fish resources, that can be useful for fisheries science and fishing operations.

The third funding program is the Atlantic Fisheries Fund (AFF), administered by the Department of Fisheries and Oceans, with components focused on three areas:

  1. Innovation — development of new products and technologies in the harvesting, aquaculture and processing sectors;
  2. Infrastructure — encouragement of the use of new technologies or processes to improve sustainability and
  3. Science partnerships — industry-based collaborations with academia and other research institutions to improve our knowledge and understanding.

The Canadian Centre for Fisheries Innovation expects to obtain funds from AFF to carry out projects in each of the four directions outlined above. In doing so, we also expect to work collaboratively with both the OFI and OSC to undertake projects and help industry take advantage of work those organizations are doing.

Unfortunately, there are no quick and easy answers to our present predicament. But through the work that will be done over the next few years, we can build a base for the future to be better than the present.

Along with the challenges, there are opportunities.

 

Robert Verge

Managing Director of the Canadian Centre for Fisheries Innovation — Newfoundland

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