Canada’s  Atlantic  Fisheries A big business for small communities

$1.8 billion in landed value 2011

Lobster 34%

Crab 25%

Shrimp 17%

Groundfish 10%

Pelagics 5% Other shellfish

9%

Big three = $1.4 billion or 76 %

Distribution of landed value

Owner operators

75%

Corporate 25%

Why do owner-operators have so much of the value?

Lobster 99%

Crab 100%

Shrimp 60%

Groundfish ?

Pelagics ?

Other shellfish

?

It  wasn’t  always  this  way.

Big Three = 38% of total value in 1990

Lobster 25%

Crab 5%

Shrimp 8%

Groundfish 42%

Pelagics 10%

Other shellfish

10%

Who are the owner-operators?

Not the same everywhere

Setting day Newfoundland

Setting day Sou’West Nova

• Region  ’s  largest  private  sector  employer

• 10,000 individual enterprises

• Employing 20,000 crew

• Almost entirely rural based

• All independently owned & operated

Common policy framework

Owner-Operator: have to fish licences personally

Fleet seperation: processors  can’t  hold  o-o licences

Common policy framework

Main threats Weak policy enforcement

• Corporate predation

High investment costs for new entrants

• licences and quotas

Low return on investments

• increasing operating costs

(fuel, bait, management)

• weak markets

DFO promoting concentration

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

NS NB PEI QC NL

Ind Core

Core

Age profile 2004

0%

5%

10%

15%

20%

25%

30%

35%

40%

< 35 35 - 39 40 - 49 50 - 59 60 +

Atlantic

Pacific

New entrants face higher investment costs

1973-1983 1989-1998 2005-2011

Profits at least 25% lower for new entrants Low profitability

• Drives out fishermen • Requires  higher  efficiency….  builds pressure for concentration & vertical integration

Fleets opposed to vertical integration

Reduces dock-side competition & owner-operator bargaining power – Lower prices paid to independent harvesters

– Reduced resources to other processors / wholesalers

– Leads to concentration

Results in lower employment

– Less jobs in some communities

– Conflicts between communities

– Conflicts between provinces

Today’s  Globe  and  Mail

Productivity overrated as a key to growth “…focussing on efficiency at the expense of jobs and  hours  worked  could  lead  to  ‘greater  unemployment, income loss and reduced well-being’.”

- Andrew Sharpe, Editor International Productivity Monitor

Fleets seeking alternatives

Major fleet managed buy-backs in last 2 years

Looking at fleet managed initiatives to facilitate intergenerational transfers

Exploring marketing and branding to increase revenues/incomes

Can social finance help?