For nearly two decades, the Newfoundland and Labrador fishery has contended with the influence of the Standing Fish Price Setting Panel.
For the last two years, the Panel’s inability to avoid protests, delays and a general sense of unrest amongst the fishery has brought the institution’s validity into question.
The “need” for a panel was highlighted by Richard Cashin, one of the founders of what became the Fish, Food and Allied Workers Union (FFAW), in the 2005 Cashin Report. At the time, the fishery was experimenting with the Raw Material Shares (RMS) model, which saw a cap placed on the level of production in each plant based on the proportion of available snow crab.
This system, according to the provincial government, was “expected to provide for an orderly fishery, with timely opening dates and ultimately result in better market prices than would occur in an uncontrolled situation.”
Orderly, it was not. Amid the RMS pilot project, angry harvesters formed a blockade in the St. John’s narrows in an attempt to block entrance or exit for any shipping vessels in an effort to get the government’s attention at their displeasure on their imposed production caps.
The 2005 season wasn’t timely, either.
While the snow crab fishery was set to begin on April 9 of that year, harvesters voted to begin fishing in earnest on May 20 — 41 days later.
In his report, Cashin spelled out numerous flaws in the RMS system that he described as “seriously flawed and damaged as a possible instrument of fisheries policy.” As such, Cashin recommended a method for establishing fish prices, especially for crab and shrimp, be established immediately to ensure a timely start to the 2006 season. Sure enough, by February 26, 2006, the Fishing Industry Collective Bargaining Act was passed in the House of Assembly, bringing N.L.’s fishery into the current epoch it finds itself in.
Under this current system, if the processors and harvesters can’t achieve a deal on their own through collective bargaining, which they normally can’t, the role of arbitration falls to the Standing Fish Price Setting Panel, comprised of three independent members — currently comprised of longtime lawyer Sheilagh Murphy as chairperson, former FFAW President Earle McCurdy and local restauranteur and chartered professional accountant Brian Vallis, alongside alternates for each position.
Anyone paying attention in the last two years can see that the current system simply doesn’t work. In 2023 and 2024, the Association of Seafood Producers (ASP) and the FFAW couldn’t come to an agreement on snow crab prices. In both years, these disagreements spun out of control, resulting in tie-ups, protests and tension between harvesters and processors.
In 2022, harvesters were selling their catch for an average price of $6.87 per pound. By the next year, when the markets readjusted post-Covid and demand sharply fell, the Panel accepted the ASP submission of $2.20 per pound — a price that most, if not all, harvesters said they simply couldn’t fish for. The resulting tie-up lasted for nearly two months before harvesters gritted their teeth, held their nose and chose to go fishing for a minimum price that adjusted with the market instead.
2024 was much of the same. Again, the Panel accepted ASP’s offer of a $2.60 per pound floor price. Again, harvesters outright refused the Panel’s decision. And, again, the system caved, giving way to a $3 minimum price that got the season started.
Between these two cyclical events, the government commissioned a team to review the price-setting process in the province in late 2023.
The team, chaired by former Marine Institute Vice President Glenn Blackwood, penned the so-called Blackwood Report. The report highlighted, in no uncertain terms, that the panel is ill-equipped to make market predictions before the beginning of a given season.
“The Panel was challenged to deal with the ‘next to impossible’ task of predicting the future and establishing a price to start the snow crab fishery in April. The Panel set the price based on the best indicators of market realities at that point in time and which also reflected the prices paid for snow crab throughout the remainder of Atlantic Canada,” said the Blackwood Report. “Unfortunately, there was no acceptance of the market reality in the industry. The high degree of mistrust and the dramatic rise and fall of prices resulted in chaos and economic fallout that will affect the industry for years to come.”
If the Panel members are not fortune tellers, tasking them with picking a price based on incomplete data leaves their choices ineffective and often wrong. If their decisions, as seen in 2023 and 2024, can be overturned at the drop of a hat, that leaves their arbitration toothless. If the task they’ve been given, as highlighted in the Blackwood Report, is next to impossible, what’s the point of it existing in its current state?
Ultimately, the Standing Fish Price Setting Panel is a Band-Aid on the gaping wound that is the state of the Newfoundland and Labrador snow crab fishery. Try as one might, it will always be ineffective at closing the wound, or even slowing the bleeding.
As highlighted in the Blackwood Report, the Panel needs to be given the power to be much more than a Band-Aid. It needs to be medical gauze — stitches, even.
“The legislation, regulations and roles of the Panel should be expanded where necessary to enable it to hold regulatory hearings whereby it can determine independently through arbitration, under a process of final offer selection, any one aspect of formula-based pricing,” recommended the report.
Beyond granting more power to the Panel, the report recommended both the Union and the ASP get to work immediately in adopting formula-based pricing driven by market data, quality and products produced for all species months prior to the start of their respective fisheries.
For example, it was recommended that a framework for snow crab be adopted no later than January 31, 2024. As we know now, this did not happen. As we also know, the lack of a proper formula led to the turmoil we saw prior to the season opening.
Another issue emphasized in the Blackwood Report in 2023, the Cashin Report in 2005 and the Vardy and Dunne Report in 2003 is the need for the provincial and federal governments to coalesce their decision-making powers in a single management authority; an authority that has just that — authority. Barring a sudden miracle wherein the union and the processors come to terms, let go of their animosity and provide a united front for the fishery, checks and balances need to be put into place to ensure an orderly, timely fishery that maximizes the value of the ocean’s resources for everyone involved.
In hindsight, FFAW President Greg Pretty may well have been right when he said, “The importance of the Blackwood Report is that it shone a light on what we were missing…”
