Fishing For EI; How The Fishing Industry Paralyses Rural Newfoundland

In Newfoundland each summer fish plant workers race to put in the 420 hours needed to qualify for Employment Insurance.

Some plants are lucky and have no trouble, but for many smaller plants it is a cause for celebration when all hands are stamped up for the winter. For getting all hands to qualify is no mean feat.

Newfoundland has almost 140 fish plants, and up to 20,000 fish plant workers. Although some of the plants are highly automated, highly efficient operations that produce year-round. (National Sea’s Arnold’s Cove plant and Beothuck Fisheries’ Valleyfield plant are examples of a modern year round fish processing industry.) Many of the rest were put there for political reasons, often paid for by tax dollars, an often barely able to give their workers the 420hours needed to qualify for 34 weeks of employment insurance.

Most are known as “stamp factories”, a place one qualifies for EI.(Historically weeks worked for unemployment insurance purposes were recorded by pasting stamps in a record book.)

This drive to qualify all hands reveals the naked truth of much of the Newfoundland fishing industry: it is there to provide access to EI benefits.

But the stamp fishery is a rather recent phenomena. Prior to 1972 there were only 50 fishing plants in Newfoundland, with about 4,700 full time equivalent workers. Prior to 1972 unemployment insurance was difficult to get. Most workers were full time, there were many fewer seasonal workers.

In the 1970s, all that changed.

With the expansion of Canada’s maritime economic zone to 200 miles, unbounded optimism gripped the fishing industry. Spurred on by generous government grants and easy loans, the number of plants quadrupled, nudging past 200 in the late eighties. At the same time the federal government under Bryce Mackasey vastly expanded the unemployment insurance program allowing people to qualify for UI, as it was then known, in a short eight weeks, rather than the many months it used to take. By the late eighties the number of fish plant workers doubled to over11,000.

But that number was a vast underestimate of the actual number of people working in fish plants each year. Since only 12 to14 weeks were required to qualify for EI, double or triple the average were actually working as fish plant workers.

The excess capacity made fishing companies vulnerable to any dips in fishstocks or the market. In the early eighties all the large companies went broke, necessitating a bailout by the federal and provincial governments. That was when FPI and National Sea were formed from the debris of the industry.

Alone among primary industries in Canada, the number of employees and primary producers in the fishing industry continues to climb. Increased labour productivity has decimated the workforces in agriculture, pulp and paper and mining. Not so the Newfoundland fishery.

The pulp and paper industry in Newfoundland has only 60% of its 1972workforce, while the fishplants employ twice as many as they did in 1972. Even the number of loggers is down by almost50%, while the number of fishermen continues to climb. In 1972 the Newfoundland unemployment rate was eight per cent. Since the advent of the “stamp fishery” and easier EI it has averaged between 15 and 20 per cent. A good quarter of that unemployment is directly attributable to the “stamp fishery.”

And yet the excess fish plants are still with us. Without substantial debts, and with no reason to rationalize, many plants stayed idle through the worst of the cod moratorium, and then sprang back to life when the shellfish industry blossomed in the absence of their biggest predator, the cod. According to the provincial government’s statistics there are still139 active processing licences in the province, 95 of which are licenced to process groundfish.

In the last two years employment in the shellfish processing industry shot up, with many thousands now qualifying for EI in plants that now have enough precious crab or shrimp to eke out the basic 14 weeks to qualify. In 1999 there ere over 16,000 fish plant workers at peak season.

But the seafood stocks are limited. There is barely enough product to go around if all hands are to qualify for EI. hen the catch drops, as is the case this year with crab; or when the price drops, as is the case this year with shrimp, there is a clamour for make-work projects to make up the difference. The province moves in as the employer of last resort when the federal government cannot be moved.

Yet there is no concrete plan to reduce the 140 fish plants down to the 30to 50 that could stay active all year long. he province is counting on the fish plant workers to age and retire in the next ten to fifteen years. Having created the problem in the 1970s and 80s they refuse to take any responsibility for solving it. Indeed they appear to take credit for increased employment when the number of fish plant workers increases as it did in the shellfish boom ofthe late nineties.

In the last decade most young people chose to stay in school rather than go into a highly seasonal fishery even if it ad up to 34 weeks of EI attached to each job. But that lack of young workers will result in a local labour shortage when the older workers retire. Then the fish plant operators will have to consolidate their operations. Although it is not much of a plan, it appears to be what the province is counting on.

To get to this state of affairs the province is willing to step in and stamp up the fish plant workers every year there is not enough work, until they reach retirement age. Unfortunately that practice will ensure the plant workers a minimum pension from CPP since their earned income will be small. Worse still it will ensure there is no work force that can start on the rebuilding that is necessary if there is to be a future for rural Newfoundland.

Nominally the laid off fish plant workers should be able to work at whatever is on the go in rural Newfoundland, but there is a strong moral code that inhibits unemployed workers from working while they are eligible for EI. They violate local mores by taking a job from someone that needs it more.

The provincial government defends its “stamp them up program,” arguing that the alternative is an exodus from rural areas that will spell its death. What they do not seem to see is the ultimate bankruptcy of the path they are following. If rural Newfoundland is to make the transition back to the fishery that was sustainable and productive, one hundred plants will have to close. To allow that to happen gradually as plant workers retire will ensure the workforce is not available to start any new endeavours in rural Newfoundland that will lead to a more promising future.

Shutting the surplus plants is harsh medicine, but it at least allows the people in the province to rebuild. Allowing rural Newfoundland to creep towards a dismal end is to give up completely.

The celebration at the stamp factories when a worker qualifies for EI is apathetic reminder of how destructive government investment, badly designed income support programs, and a government without the will to tell people the truth, is hastening the destruction of rural Newfoundland.

It deserves better.