How times have changed.
A few years ago FPI, Newfoundland’s largest fish company was pilloried for proposing a modernization scheme for its south coast plants that would have eliminated hundreds of jobs. Led by the governing Liberals all parties in the House of Assembly ganged up on the company forcing it to make commitments to the affected communities. It was a humbling lesson for the new management team of FPI that had taken over the previous year.
Late last year FPI announced the closure of Harbour Breton, one of its south coast chain of ground fish plants._ Over 400 direct jobs will be lost in a community that has only a stuttering aquaculture industry to fall back on. The now opposition Liberals again took up the cudgels for Harbour Breton, hammering the now governing Tories daily with a barrage of demands in the House of Assembly.
But this time the opposition was mostly sound and fury. The governing Tories refused to invoke the provisions of the legislation that would force FPI to keep the antiquated plant running. To do so would trigger a clause forcing the government to cover FPI’s losses at Harbour Breton. For Fisheries Minister Trevor Taylor this would be the abandonment of the Tory fisheries policy that refuses to subsidize the fishing industry.
This is a sea change in Newfoundland fisheries policy.
To support this new policy the fisheries minister referred to the trends that have occurred in the fishing industry in the past few years. One is the entry of China into fish processing. Using extremely low wages in modern, highly productive plants, the Chinese have been able to bid up the international price of frozen cod by 50%._ At the same time the weakening US dollar has cut the selling price of Canadian produced cod by a quarter. As Taylor says, “this changes the water on the beans.”
FPI had kept its Harbour Breton plant open by buying frozen cod from Russia and Norway, processing it in Newfoundland, and selling it in the US. When both the supply costs rose, and the selling price dropped, FPI was in the unenviable position of selling cod from Harbour Breton for less that they paid for the raw material.
For the Fisheries minister the world had changed so drastically that even a fully interventionist government willing to take risks with the taxpayers money would not force FPI to continue losing money hand over fist.
The opposition Liberals would have none of that._ For them the matter was simple._ FPI was chartered under the laws of Newfoundland, was formed by the actions of two levels of government, and was governed by an act that stated that “the company cannot make decisions that create undue disruption to the historical pattern of harvesting and processing in the province.”
Apart from the impossibility of preventing an industry from adapting and changing over time, FPI officials pointed out that buying foreign frozen fish to process in Newfoundland was hardly an “historical pattern of harvesting and processing”.
Remarkable in the two week long debate in the House of Assembly was the almost total absence of the Premier Danny Williams._ Repeatedly the opposition tried to bait him on the issue, but he left his Fisheries Minister Taylor to answer the onslaught of Liberals.
Trevor Taylor is an unusual fisheries minister._ Not only was he a former shrimp/crab boat skipper, he had been a union executive and representative._ He had been involved in community groups in his home ground on the Northern Peninsula, and he had taken part in an Oxfam delegation to Nicaragua. Prior to running for the Progressive Conservatives, he had contested a federal election for the NDP.
Given his background it is surprising to see how adamantly he has stuck to the Conservative line of no subsidy for the fishing industry.
But “no subsidy” doesn’t mean an absence of hands on intervention._ When High Liner wanted to close its large fish plant on the Avalon Peninsula last year, he helped broker a deal that transferred the High Liner quota to the provincial government which then leased it to the local company that continues to operate the plant._ The $3.5 million that the quota cost is being paid back by the new fish company. Taylor justified the intervention by claiming he was preventing the High Liner quota from being transferred to Nova Scotia plants.
Taylor, in answering his critics, is promising to use a similar approach in Harbour Breton.
But given that the Harbour Breton plant is in poor condition, it is doubtful the same approach will work._ In the meantime the debate is now focusing on the allocation of a fish quota for Harbour Breton._ Since fish quotas are a federal responsibility and federal Fisheries Minister Regan appears cool to the idea of community quotas, Taylor will have to pry some quota out of FPI if he wants to assist Harbour Breton.
To help the Harbour Breton area, Taylor has instituted a new working capital aquaculture program modeled on a similar program in New Brunswick. His government will help aquaculture operators with proven potential get over the couple of years needed to get established. And since most of Newfoundland’s tiny fin fish aquaculture industry is in the Harbour Breton area, Taylor sees it as a benefit to the region.
For years the fish processing industry has suffered from too many plants and too many workers._ At one point over 200 fishing plants were licensed by the provincial government, most built with taxpayers’ money._ A succession of fisheries ministers have promised to rationalize the industry, but have repeatedly backed down in the face of workers about to lose their jobs.
On December 9th Taylor reiterated his commitment to a more rational industry, “…if we are going to have a strong processing sector and a strong seafood industry in this province, then we need to have strong processing operations that run for a longer period of time._ The alternative, Mr. Speaker, is to accept what the previous administration did for the last twelve to fifteen years, to allow the processing workers in this province, Mr. Speaker, to try and live on less than $10,000 a year in earned income…”
So far Trevor Taylor appears to be sticking to his guns, and is following his policy of not providing loans or direct financial support to the industry, while the number of plants and workers declines.
His December 9th speech in the House of Assembly is the most definitive statement of what has been wrong with the fisheries policies of the past, and if Taylor stays the course the fishing industry may eventually evolve into the modern industry it can be.
However, it remains to be seen what will happen with Harbour Breton.