Backgrounder
Newfoundland and Labrador Fishing Industry Renewal
The Process

A combination of external factors and domestic structural challenges has positioned the Newfoundland and Labrador fishing industry at a crossroads. External factors such as increasing global competition from lower cost producers and unfavourable exchange rates have highlighted long-standing domestic structural challenges, which are impeding the international competitiveness of the industry. As a first step to address these serious challenges, the Honourable Danny Williams, Premier of Newfoundland and Labrador convened a meeting on the Newfoundland and Labrador Fishery on May 24, 2006 in St. John�s. The Premier, along with the Honourable Loyola Hearn, Minister of Fisheries and Oceans, the Honourable Tom Rideout, Minister of Fisheries and Aquaculture, and approximately 40 key industry stakeholders examined potential solutions to these challenges facing the fishing industry.

The objectives of the Premier�s Meeting on the Newfoundland and Labrador Fishery were two-fold:

  • To identify potential solutions to the key challenges in the harvesting, processing and marketing sectors of the fishing industry in 2006 and beyond; and
  • To identify a strategic direction for the industry, including actions for industry renewal to transform it into a more viable, self-sustaining and competitive industry.
  • The Premier�s meeting achieved general consensus on the immediate need for policy renewal and industry restructuring, as well as a specific need for capacity reduction in the harvesting and processing sectors. Based on this level of consensus, both levels of government and industry established four working committees to review in greater detail the challenges and issues facing the industry. These working committees were mandated to identify and assess potential policy renewal and restructuring options in the areas of harvesting policy renewal and self-rationalization; processing policy renewal and restructuring; collaborative marketing; and technology/new opportunities. An Industry-Government Steering Committee was also formed to provide guidance to the working committees.

    During June and July 2006, the committees held a total of 17 meetings to discuss issues and options surrounding industry renewal. A progress report was presented to Premier Williams and Ministers Hearn and Rideout in late summer. This report highlighted the agreement by all parties on the vision and objectives for industry renewal as a key outcome.

    In was envisioned that the Fishing Industry Renewal initiative should result in a sustainable, economically viable, internationally competitive, and regionally-balanced industry which is able to:

  • Adapt to changing resource and market conditions;
  • Extract optimal value from world markets;
  • Provide an economic driver for communities in vibrant rural regions;
  • Provide attractive incomes to industry participants; and
  • Attract and retain skilled workers.
  • It was further agreed that the industry renewal process should attempt to develop an integrated "Ocean to Plate" policy framework and industry restructuring strategy to support achievement of the objectives.

    Based on the work of the steering committee/working committee process, government was advised to seek the input of other industry stakeholders prior to implementing any policy changes. This included consultation directly with stakeholders, particularly plant workers and fish harvesters, through industry focused consultation meetings. The general public was invited to provide written submissions to the steering committee or alternatively to provide comment through the Fishing Industry Renewal Web-site and toll-free number.

    To facilitate the consultation component, a draft discussion document was prepared and was intended to:

  • Inform industry stakeholders and the public at large on the progress achieved under the Canada-Newfoundland and Labrador Fishing Industry Renewal Initiative since May 2006; and
  • Seek input on several key policy issues and potential options for the development of an integrated "Ocean to Plate" Fishing Industry Renewal Strategy.
  • On November 1, 2006 a federal-provincial team initiated a consultation process with fish harvesters, plant workers, processor representatives and other industry stakeholders. Through to year end, the consultation team held over 40 meetings throughout Newfoundland and Labrador with approximately 800 participants.

    Consultations were directed towards industry stakeholders. The views of those directly impacted by changes related to Fishing Industry Renewal, primarily plant workers and fish harvesters, were of particular interest. It was also recognized that the Fishing Industry Renewal process could have far reaching implications beyond plant workers and fish harvesters. The consultation team therefore consulted directly with community groups, associations, and other non-industry groups. Government representatives also attended approximately 40 consultation meetings on industry renewal organized by the Fish Food and Allied Workers (FFAW) Union.

    During the consultation process, most participants recognized that change in the fishing industry is required to improve the overall viability of all industry participants. There was general support for the voluntary rationalization of harvesting capacity and recognition that rationalization could have a significant impact on fishing communities. Reaction to the level of reduction required, and the best options for achieving the desired reduction, was mixed.

    Most plant workers recognized that change in the fishing industry is required to improve the overall viability of plants. There was a strong view that overcapacity in the processing sector is a significant challenge and, if resolved, could improve employment stability for those that remain in the industry. However, many plant workers, having been long-term participants in the industry, were mainly concerned with sustaining adequate employment stability to conclude their working careers in the industry.

    In terms of vessels, many harvesters were of the view that larger vessels are needed to improve safety and crew comfort; extend the fishing season; and accommodate the challenging environmental conditions in distant water fisheries. Others were strongly opposed to relaxing the vessel replacement rules. Concerns were expressed that greater flexibility in the vessel replacement policy would increase the likelihood of processors gaining access to fishing quotas or increased control of the harvesting sector.

    There was a view expressed by harvesting interests on the need to address trust agreements involving processors, and protect the owner-operator (eliminate rent extraction) and fleet separation policies before moving ahead with any rationalization process. A trust agreement is the transfer of the beneficial interest in a fishing licence from a harvester to a processor, or other entities.

    The majority of participants were of the view that there is a need to change the industry to recruit and retain younger workers. Many plant workers and crew members are moving out of the province because of the unpredictable employment situation in the fishing industry. Most were of the view that income levels and employment stability must be improved in order to attract and retain workers in the fishing industry.

    Most plant workers felt that governments must respond immediately to the problems in the fishery with an early retirement program for older workers until they reach 65 years of age. Other participants, mostly processing firms, cautioned that governments must first consider if plants have enough plant workers to replace those that would leave the industry under an early retirement program.

    There was no consensus from the meetings with processor associations, and in fact many of the views expressed were quite diverse. Some processors suggested vertical integration and/or a renewed effort for production caps. Other processors were strongly opposed to the production cap system and advocated other means (i.e. competitive forces or a buy-out) to achieve rationalization. Furthermore, others disagreed completely and suggested an auction system, as well as market based resource management strategies, particularly with respect to issues such as season opening dates.

    Following the province-wide consultations with industry stakeholders, and analyses of options, the Provincial Government has developed a strategy to set the industry on the right path to achieve sustainability, viability and international competitiveness.

    -30-

Media contact:
Danny Pond
Communications Specialist
Department of Fisheries and Aquaculture
709-729-6076, 685-3415
dannypond@gov.nl.ca

 


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