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Fisheries and Aquaculture
June 30, 2009

Provincial Government has Demonstrated High Level of Commitment to Fishing Industry

The Provincial Government has demonstrated a high level of commitment to the province’s fishing industry through increased investment and development of strategies to address the industry’s structural issues. Meanwhile, the industry itself has failed to take the action needed to address these issues.

The budget for the Department of Fisheries and Aquaculture has been tripled by the Williams Government since 2003. As a result, at $33.7 million, the department’s budget in Newfoundland and Labrador is larger than the total budgets for fisheries and aquaculture in the Maritime Provinces combined. In addition, there is a long-term strategy in place through the Fishing Industry Renewal Strategy which was developed after a high level of consultation with industry and involves a financial commitment of up to $140 million on the part of the Provincial Government. This is far in excess of the investment in fisheries renewal in any of the Maritime Provinces.

The Fishing Industry Renewal Strategy includes a capital gains exemption valued at approximately $25 million. There are long-standing exemptions from fuel taxes for the fishing industry. As well, the Honourable Tom Hedderson, Minister of Fisheries and Aquaculture, recently offered an exemption from this year’s processing licence fees, at a cost of $1.7 million in revenue to the province. This exemption was offered in an effort to assist the industry in reaching a price agreement that would start the shrimp fishery. These are the only fees being paid to the Provincial Government by the fishing industry.

"Our government has taken a long-term approach to addressing the underlying structural issues in the industry that continually plague us every fishing season," said Minister Hedderson. "In the midst of a difficult year, the fishing industry is resorting to suggestions of quick fixes such as subsidies which do not deal with long-term structural issues and would violate international trade agreements. Furthermore, the industry has presented no financial evidence to verify the need for government intervention."

The most significant marketing challenge facing the shrimp sector is access to markets and prohibitive seafood tariffs. Today, the Honourable Danny Williams, Premier of Newfoundland and Labrador, is in Europe addressing these issues. He is also addressing the proposed European Union ban on Canadian seal products.

Since 2003, the Provincial Government has implemented the Dunne Report and announced the Fishing Industry Renewal Strategy. The strategy included a plan to address seafood marketing, a fish auction, processing policy, fisheries research and development, an enhanced loan guarantee program, a reduction in capital gains taxes and occupational health and safety in the fishing industry. As well, the province has implemented a Fish Price Setting Panel to resolve price disputes such as the one that is occurring now. There is a mechanism in place for the harvesters to appeal the price to the panel if they are dissatisfied with the current decision. They also have the option of re-entering negotiations with seafood processors.

"Our government has been working to enhance seafood marketing," said the minister. "In 2006, we offered to purchase the marketing arm of Fishery Products International Limited for approximately $100 million. We later offered up to $5.4 million for a provincial seafood marketing council. The industry turned down both of those offers, despite the demonstrated need for improved marketing, which was recommended in the Roche Report. As well, we worked with industry to establish a cod auction which the industry then refused to support. In the meantime, the industry continues to lobby the Provincial Government for additional seafood processing licences, despite their repeated calls for rationalization of the industry and despite the adverse effects that this would hold for plant workers."

The province has recognized that this is a difficult year from a financial perspective. In February, the Provincial Government suggested working groups with industry to address the problems in the coming year. There has been no industry response to this offer to date. The Provincial Government recently offered to undertake a financial analysis, with industry, of the fishery to document the financial difficulties that are being experienced and to examine and address structural issues over the long term. It has actively been lobbying the Federal Government on aid for lobster harvesters. It has offered to provide employment opportunities at the end of the season if plant workers and deck hands do not qualify for Employment Insurance benefits. The province has also offered 30 per cent of the cost of rationalizing an industry that is licensed primarily by the Federal Government.

The issues in the shrimp fishery have been well studied and well documented going back to 2002. The Provincial Government developed a plan with industry to address these issues which was abandoned by the fishing industry after one year.

"Our government is very disappointed that harvesters and processors have not been able to agree on a price for shrimp," said Minister Hedderson. "The two groups have been very far apart. The market intelligence available to my department demonstrated that there is a reasonable price for both groups between the two positions and our government does not see it as appropriate to get involved in settling industry price disputes. I call on the industry to get back to the bargaining table and resolve this dispute for the sake of all the people who are depending on the fishery throughout the province. We remain committed to engaging with the industry to deal effectively and conclusively with the industry’s long-term challenges."

- 30 -

Media contact:

Lori Lee Oates
Director of Communications
Department of Fisheries and Aquaculture
709-729-3733, 690-8403
oatesll@gov.nl.ca

BACKGROUNDER

Highlights of Provincial Government Investment in Fishing Industry

  • The Fisheries Technology and New Opportunities program was announced in the fall of 2007 as part of the provincial component of the Fishing Industry Renewal Strategy, and received $6 million in provincial funding over three years. There have been approximately 100 applications received under the program, more than 80 of which have been approved for funding. Approximately $3.5 million in total project costs have been funded by the department, with a total cost of $9.7 million being invested in the industry.
  • The Provincial Government provided funding to implement a voluntary fish auction pilot project. The pilot project was implemented by the Fish Harvesters Resource Centre. The Provincial Government provided funding for the pilot initiative through a grant of up to approximately $84,000.
  • In Budget 2009, $1.2 million is allocated towards workforce adjustment initiatives. These initiatives support workers impacted by capacity reductions in the fishing industry and for former workers of plants that have been designated as being permanently closed. Services include transitional employment counseling, short-term employment support, and intensified regional economic diversification efforts. This is part of the $2.55 million allocated for this program under the Fishing Industry Renewal Strategy.
  • Budget 2009 allocated $250,000 to establish a Fishing Industry Safety Council that includes industry and Provincial Government representation. The council’s focus will be on research, education and training, promotions and communication related to fishing industry safety. This was part of a $750,000 allocation for the program over three years as part of the Fishing Industry Renewal Strategy.
  • The Provincial Government provided funding to the Fur Institute of Canada and Marine Institute to carry out workshops with sealers. The purpose of the workshops was to engage sealers on the most current harvesting practices and inform them of changes to existing harvesting methods as the regulation of the industry continues to evolve. Approximately $83,000 was provided through the Fisheries Technology and New Opportunities Program.
  • In delivering on its commitment under the Fishing Industry Renewal Strategy, the Provincial Government announced that the province will operate under a revised seafood processing policy framework. The revised framework includes more rigorous policies in relation to the issuance of new processing licences, tighter policy guidelines for the transfer of licences and opportunities for the combining of the existing value-added (snap-and-eat) crab licences.
  • A grant of $50,000 to the Association of Seafood Producers in its pursuit of Marine Stewardship Council certification for the Canadian Northern Trawl Shrimp Fishery.
  • An investment of $89,000 to support efforts of the Association of Seafood Producers to reduce energy costs in the fish processing sector in Newfoundland and Labrador.
  • The Provincial Government has invested $100,000 in sealing industry communications for each of the last four budgets. This has funded the development of information packages on the industry, a sealing industry website and visits to Europe to address the European Union and its member states.
  • The Provincial Government continues to facilitate industry participation in seafood shows in Boston, Brussels, Moscow Spain and China.
  • Funding for Fish Food and Allied Workers Projects

  • $85,000 for a lobster enhancement pilot project that was carried out in partnership with the Fish, Food and Allied Workers (FFAW), Marine Institute, and federal Department of Fisheries and Oceans. The purpose of the pilot project was to investigate options for seeding coastal waters in Placentia Bay with larval lobster, for the purpose of lobster stock enhancement.
  • $23,000 for a project to reduce the halibut by-catch in the 4R turbot fishery, on the west coast of the island and up through the straits of Labrador. The project was carried out in partnership with the FFAW.
  • $99,000 toward a new fishing vessel energy efficiency initiative for the Newfoundland and Labrador fishing industry. The initiative was carried out in partnership with the Canadian Centre for Fisheries Innovation (CCFI) and the FFAW.
  • Allocation of a maximum contribution of $10,000 for a lobster resource assessment in area 3KLPS, located on the province’s north-east and south coasts. This funding was made available to the FFAW.
  • Financial and in-kind support to a green crab mitigation pilot project. This included $12,000 in funding from the Division of Sustainable Fisheries and Ocean Policy Division. This was a pilot project of the FFAW.
  • $15,000 to the FFAW for a lobster monitoring project in NAFO areas 3KLPs.
  • $99,475 to the FFAW for Phase II of a lobster enhancement project in Placentia Bay.
  • Aquaculture

  • The province’s aquaculture industry has experienced a high level of growth in response to the high level of investment in the industry by our government. The total value of the industry has almost doubled from $33.6 million in 2005 to $63.3 million in 2008. This creates opportunities for additional processing sector activity in addition to spin off benefits in areas such as the making of cages, nets and feed production. The number of people employed in aquaculture has almost doubled since 2005 to 1,000 people.
  • The Provincial Government is moving forward with building an aquatic animal health laboratory and aquaculture administration facility at St. Alban’s, on the province’s south coast. It is estimated that the cost of the facility will be $7.2 million. The facility is expected to house 10 staff, including development and inspection personnel, as well as aquatic health staff and veterinarians. Construction will begin in the fall of 2009.
  • The province will invest $5 million in aquaculture infrastructure projects on the province’s south coast and leverage an additional $5 million from the Federal Government, for a total investment of $10 million over the next two years.
  • In Budget 2009 $2.45 million is allocated for continued funding in the Aquaculture Capital Investment Program.
  • In Budget 2008, the provincial Department of Fisheries and Aquaculture allocated $2 million over four years to assist with the development of a cod demonstration farm. This is part of an $8.5 million cod aquaculture demonstration farm project with Cooke Aquaculture and the Federal Government.
  • In Budget 2007, $12.5 million was allocated under the Aquaculture Capital Equity Investment Program to attract investment and grow the province’s aquaculture industry. The budget also allocated $180,000 for aquaculture industry support programs.
  • The Provincial Government invested $1.9 million was invested in waste-water treatment equipment for processing facilities on the south coast of the island.
  • With a commitment of $7.8 million, the Provincial Government is supporting Gray Aqua Group Limited of New Brunswick to establish a $16-million, four-site salmon aquaculture operation in the Bay d’Espoir region. To assist the company, the province will provide a loan guarantee of $6.8 million under the Aquaculture Working Capital Loan Guarantee Initiative and an equity investment of $1 million under the Aquaculture Capital Equity Investment Program. The new operation provides for 35 permanent jobs and 40-person years in processing employment. Furthermore, it is anticipated that the operation will create additional and equivalent levels of employment in the supply and service sectors such that the total employment impact will be in the order of 150 jobs.
  • Funding for aquaculture nearly tripled in Budget 2006, largely due to allocation of $10 million for the Aquaculture Capital Investment Program and funding for a cod demonstration farm.
  • 2009 06 30                                                         4:45 p.m.
     


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