Fishery

Fish landings appear to be headed to a higher level for the fourth consecutive year led mainly by strong gains in capelin, crab, and shrimp. Total landings in the January to September period were up by about 30 percent over the same period last year. These results are ahead of earlier expectations, however, given the early start of the crab fishery in particular, performance on a year-over-year basis should gravitate toward the Province's forecast of about 15 percent made in the Spring. Other major fisheries commenced on time in line with weather and resource conditions.

Much of the credit for smooth operations within the industry goes to the introduction of the fish arbitration process implemented this past year. The process, which is used when normal fish price bargaining processes reach an impasse, provides for an independent arbitrator's review of both harvesters' and processors' arguments with a goal of selecting the one that is supported by, and better reflects, prevailing market conditions. This new approach was used successfully six times this year which ensured, for the most part, a smooth transition from one species and season to the next without any downtime in harvesting or processing activities.

Higher fish landings were achieved and a ready market identified for most seafood products. This occurred despite deteriorating economic conditions worldwide particularly in Asian markets--regions that tend to be large consumers of seafood such as capelin and crab. In the case of capelin, not only did the Japanese market take the bulk of female production but transaction prices were higher. Capelin landings rose significantly this year to 39,878 tonnes (86% quota utilization) from 21,310 tonnes in 1997 because of an increase in the presence of suitably sized capelin. Notwithstanding the economic problems currently being experienced in Japan, prices rose because Iceland and Norway were unable to meet traditional market demands with product of sufficient size and quantity. As a result, most capelin trades this year recorded prices (in US dollars) that were substantially above those recorded last year.

Crab landings rose substantially during the period mainly because of an early start and good catches. However, since overall quotas were comparable to last year, landings by the end of 1998 should be on par with 1997. Improved demand in US markets more than made up for reduced demand around the Pacific Rim. U.S. dollar prices for most crab products were, on average, lower than last year, however, when sales were converted into Canadian dollars revenues were actually higher due to currency depreciation.

On the south coast of the Province, cod is starting to make a comeback. The quota for 1998, at 20,000 tonnes or double last year's assignment, is expected to be fully utilized. Unchanged is the fact that approximately 80% of the quota will accrue to Newfoundland interests; most of the remainder is split with France in recognition of the terms of the St. Pierre boundary decision made in 1992. Market conditions for most cod products continue to be firm. In the New England region, the main market for cod, prices are fluctuating at high levels reflecting strong demand, low inventories and a general decrease in the availability of cod from other traditional suppliers.

The single largest contributor to the improved fisheries performance this year is the northern shrimp fishery. For the first nine months of 1998, shrimp landings rose by 25,985 tonnes accounting for approximately 54% of the overall improvement in landings. Beginning in 1997, and expanding in 1998, most of the growth in northern shrimp allocations have been directed toward the inshore fishing sector. The result has been substantial investment by both the harvesting and processing sectors in a growth area that generated substantial economic benefits throughout many areas of the Province. Between 1993 and 1998, shrimp quotas in the Atlantic region have mushroomed from 51,601 to 84,960 tonnes reflecting strong growth in the resource. Shrimp landings for the year are expected to approximate 55,000 tonnes which, if realized, would make it the number one species currently prosecuted by the industry, and the Province one of the largest producers of cold water shrimp in the world.

Continued improvement in the shellfish sector has helped offset the employment losses caused mainly by the decline in the groundfish sector. Between January and November of this year, average employment gains of about 900 in both primary (from 9,900 to 10,800) and processing (from 5,500 to 6,400) activities represent improvements of approximately 9.6 and 16.8%, respectively, from the same period last year. Employment gains in fishing activity accounted for 29% of the total employment gain achieved this year. However, as apparent in the diagram, the gains in recent years have not been sufficient to fully offset the employment losses stemming from others segments of the fishery.

In regions where alternative species have not been caught or processed, income replacement programs initiated at the outset of the groundfish crisis have been the major source of income for many. Industry workers in Newfoundland and Labrador accounted for about 68% of the 16,700 people eligible to receive benefits under The Atlantic Groundfish Strategy (TAGS) when it officially expired September 1, 1998. (It should be noted, however, that not all who were eligible to receive benefits necessarily did, or depended on TAGS to the same degree.) In June 1998, the Federal Government announced its final response to the groundfish crisis. The post-TAGS program contains in excess of $500 million for the Province. Funding covers four major areas including: early retirement; licence buy-outs; lump-sum payments and mobility assistance; and economic diversification measures.

To conclude, the fishery continues to be an industry in transition. This is not unlike the experience of fisheries elsewhere. The move to an industry increasingly dominated by shellfish has resulted in increased diversification within the fisheries sector. The opportunities and challenges that have been presented by the strong growth in species like crab and shrimp are ones that continue to be met successfully by industry. This is reflected, for example, by the fact that millions of dollars were invested this year in six shrimp processing operations to acquire technology and make the changes necessary to process new products. As well, hundreds of boat owners have made significant commitments to upgrade their vessels to harvest and deliver a quality product.  

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