Provincial Government Releases Report of Independent Chair of the
Steering Committee for Fishing Industry Memorandum of Understanding

The Honourable Clyde Jackman, Minister of Fisheries and Aquaculture, today released the Report of the Independent Chair: MOU Steering Committee. The report was prepared by Professor Tom Clift of Memorial University’s Faculty of Business Administration, who has served as the independent chair since the creation of the steering committee in August 2009. The report provides one of the most comprehensive financial analyses of the province’s fishing industry and presents an overview of the current state of both the harvesting and processing sectors. It also provides proposals for change from the industry participants.

“Our government will have to determine the merits of the proposals and develop an appropriate provincial response,” said Minister Jackman. “The response will reflect the interests of all stakeholders to the industry, including harvesters, processors, plantworkers, deckhands, communities and the supply and service sectors. We also committed to taking the report to the Federal Government for their consideration.

“I would like to thank the chair for his work, as well as the various industry representatives for their extensive participation over a period of a year and a half. I understand over 80 meetings were held throughout the process. As well, I would like to thank Fisheries and Oceans Canada for its dedicated participation in this initiative.”

The Provincial Government signed the Memorandum of Understanding (MOU) at the request of the Fish, Food and Allied Workers (FFAW) and the Association of Seafood Producers (ASP) on July 11, 2009. Members of the steering committee included Earl McCurdy and Dave Decker of the FFAW; and Greg Viscount, Karl Sullivan and Derek Butler of the ASP. The steering committee also appointed working groups to address the financial analysis of the industry, harvesting rationalization, processing restructuring and seafood marketing. Fisheries and Oceans Canada also participated in an ex-officio capacity.

“The findings in the report represent a thorough analysis of proposals from industry stakeholders, including members of the MOU steering committee,” said Professor Clift. “The report suggests that in order to fully restructure the province’s fishing industry, in a timely and orderly fashion, the industry may have to continue through a rationalization phase before it can contemplate the kind of restructuring that may be required to be truly competitive in the global seafood marketplace.”

The report shows that the province’s fishing industry is undergoing a transition in both the harvesting and processing sectors. Participation in both sectors is declining and this trend will continue as a result of market forces and demographic challenges. The report indicates that since 1998 the number of fish harvesters in the province dropped 35 per cent and the number of plantworkers declined 43 per cent. The number of primary plants dropped 36 per cent during the same period. The report also shows that in some areas of the province, the fishing industry is actually doing quite well, while in other areas this is not the case. There are significant differences among the various fleet sectors across the province. The report also demonstrates that there are modest levels of profit in the seafood processing sector.

The total cost of the proposals presented by the MOU partners is approximately $450 million. This does not include potential workforce adjustment costs for displaced workers as the proposals to rationalize the industry only account for the cost of buying out harvesting and processing licences.

“Our government is committed to the pursuit of a viable and sustainable fishing industry in coastal areas of the province and we understand the vital contribution it makes to rural Newfoundland and Labrador,” said Minister Jackman. “I have read the report and a full review and analysis are now taking place within government. It is apparent that the total financial ask of the Provincial Government is not possible to achieve. I have always held that I would not be able to ask our government to support proposals that would cost the taxpayers hundreds of millions of dollars. As well, the focus of the report is primarily on rationalization rather than reshaping the industry for the future through restructuring. However, there are elements of what is being presented that may warrant further consideration with industry and the Federal Government.”

The MOU process was initiated to address the difficult economic circumstances in the province’s fishing industry that were created by the global economic crisis in 2008 and 2009. The crisis highlighted long-standing structural challenges facing the province’s fishing industry and the MOU was instrumental in the settlement of a protracted shrimp price dispute in 2009. The process was designed to build on the work of the Fishing Industry Renewal Strategy. The final report was delivered to the minister on February 16.

For a copy of the complete report please visit - www.gov.nl.ca/fishaq/publications/mou.pdf 

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2011 02 25             10:00 a.m.