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President's Column Spring 2016

A Message From the President

I have lived through three distinct tipping points in the economy of Newfoundland and Labrador. The first was in 1992 when the cod moratorium was announced. At this tipping point we moved away from cod and other groundfish. At the time, we had no idea in which direction we were tipping. This was a very uncertain and unnerving time in our province. The second economic tipping point that I experienced occurred in 2005 when the Atlantic Accord was renegotiated to allow the people of the province to be the full beneficiaries of the oil and gas resources located in the adjacent ocean. During this tipping point, we moved fully towards an oil economy. It is interesting to note that the 2004-2005 battle for offshore royalties was the most concerted and successful adjacency battle ever waged by the provincial government.

The third tipping point for our economy that I’ve experienced was very recent and its outcome is still uncertain. Since mid-2014, oil prices have dropped quickly and consistently from $110 US per barrel to around $35 per barrel. We are no longer an oil-dominant economy and the economic buzzword of the time is diversity.  

During this tipping point, there has been a lot of energy expended searching for economic diversity. We think the answer to that question is quite clear – the province’s economic diversity lies in the sector that sustained the province for 500 years: the fishery.

While the province moved towards an oil economy, the fishery, with relatively little noise and provincial government investment, rebuilt itself to be bigger, more diversified, and more valuable than ever. In 2015, the fishery was worth $1.2 billion to the provincial economy, providing work and very good pay to thousands of residents of the province.

The value of our fishery cannot be measured by the price of a barrel on an international market. The fishery is perhaps the most diversified sector of our economy with dozens of species commercially harvested and no particular species has the capacity to collapse the entire sector.

But back to tipping points. We have argued for years that there is a strong and sustainable future in our fishery. We know now that we are right. But in order to tip our economy back towards the fishery, we need to do a lot of work and fight many battles.

Like the oil under the sea bed, we know that there are abundant fish resources in the ocean just off our coast. What we don’t know is if we will have access to it.

When our province was engaged in the fight for oil and gas in 2004 and 2005 there was a collective sense of pride and action among the general populace despite the fact that most of the battle was fought at the provincial-federal government level. That pride came from a sense of economic justice – we were fighting for our resources that were in our waters. The rallying cry was clear: the people of Newfoundland and Labrador should be the main beneficiary of the adjacent resource, not oil companies or Ottawa.

We have been putting forward that same rallying cry for the fishery for the past several years and it is essential that the people of the province perk up and listen. The fish harvesters and plant workers of the province are already mostly engaged, but we need that engagement to spread out to every nook and cranny of the province. In the Newfoundland and Labrador of 2016, fishery issues are province-wide issues; and in the Newfoundland and Labrador of 2016, we need more than just fish harvesters and plant workers to be engaged to carry the day.

Because we are fighting major battles with Ottawa and large companies, many of which are multinational.

Our fight against large corporate control of our fishery spans the entire spectrum of the sector, from the obvious fights over resource allocation to the more quiet battles over control of fishing licenses. On both issues, the fight is moving along at a brisk pace.

Through the use of controlling agreements, whereby another individual or company, usually a processer, retains ultimate control over the license held in the name of a different individual, large corporate processing companies have more control over the inshore fishery than at any point in recent history. We have fought against this corporate infiltration into the owner-operator fishery at every step and progress has been made.

Yet two recent developments have heightened our concern about the sanctity of the owner-operator. The first development has received little publicity but is of incredible importance. In 2014 a consortium of processing companies exposed one of their controlling agreements to federal oversight. DFO, pursuant to the owner-operator and fleet separation policies, revoked the license of the harvester that was controlled by the processing companies.

As expected, the companies, in the name of the harvester, have appealed the revocation of the license and the case will now be heard in Federal Court. The premise of the appeal directly challenges the validity of fleet separation. This is not a half-hearted attempt. The companies have retained very good legal counsel at a large Bay Street firm.

But even if we win, and we’re confident on that fact, we still need to eliminate controlling agreements from our fishery and that’s what makes the recent sale of Quin-Sea to Royal Greenland such a concern. It is clear that Quin-Sea has had significant control of fish harvesters in this province. The question we asked the province is what happens to such controlling agreements in the sale to Royal Greenland? Are these controlling agreements bundled together and transferred along to Royal Greenland in the same manner as long term agreements on water use and the leasing of equipment?

We don’t know. The province said that it found no evidence of controlling agreements, but these agreements are not going to be found in a filing cabinet in the office of the plant. A controlling agreement is like trying to see the ocean floor from the top of the water – you know it’s there somewhere but it is not easy to find and you have to go deep.

Our second battle with the companies also involves our battle with Ottawa. This is a much more public battle and it’s easier to be engaged in. Just a week ago we had a thousand people come out and rally in St. John’s and St. Anthony about Ottawa’s policy of giving the benefit of our northern shrimp resource to large corporations. Our collective “NO!” was heard and the current shrimp allocation approach of corporate favouritism is being reviewed. But we do not know how this is going to turn out.

Our battle for northern shrimp is the same as our battle for cod on the south coast, halibut on the south and west coast, turbot and northern cod. These battles are about keeping the control and the wealth of our fish resources with the people of NL. Our battle is for all the same reasons we fought for oil and gas in 2005 and in our current economy our battle for adjacency in the fishery is just as crucial as the battle for oil and gas.

When there is a tipping point, the final result is not predetermined. We can tip in favour and towards a strong inshore fishery and the province’s economy will come through okay with just some bumps and bruises. Or we can tip in favour of a fishery owned and operated by large corporations. That would be a nightmare for future generations in our province.