BUSINESS

A TROUBLED COD TRUCE

OTTAWA’S NEW ATLANTIC FISH ACCORD WITH FRANCE SAILS INTO A STORM OF PROTEST

ANN WALMSLEY April 17 1989
BUSINESS

A TROUBLED COD TRUCE

OTTAWA’S NEW ATLANTIC FISH ACCORD WITH FRANCE SAILS INTO A STORM OF PROTEST

ANN WALMSLEY April 17 1989

A TROUBLED COD TRUCE

BUSINESS

OTTAWA’S NEW ATLANTIC FISH ACCORD WITH FRANCE SAILS INTO A STORM OF PROTEST

The Prince Edward Island fishermen untangling ropes and nets on the Fortune Harbor wharf last week were clearly angry. The reason: as the ice floats out of the Gulf of St. Lawrence this month, fishermen from the French islands of St-Pierre-Miquelon—located 16 miles off Newfoundland’s south coast—will sail in. They had been prohibited from fishing in the Gulf of St. Lawrence since 1987. But now, even though there is no surplus cod in the gulf, Canada has agreed to let the French fishermen into the area as part of last week’s agreement to settle the boundary dispute between the two countries, involving the waters surrounding the two tiny islands.

Under the controversial deal, France agreed to Canada’s demand to refer the disagreement to international arbitration (page 38). But in return, Canada had to grant French fishermen from the two islands the right to catch 42,000 tons of fish in the gulf and off the east coast of Newfoundland over the next three years—an amount that Canadian fishermen say is excessive. In 1986, Canada had banned France’s large factory ships from the gulf. Declared Edwin McKie, 34, a Fortune fisherman who last week was preparing his boat, the Undaunted, for launching: “Giving the French 4,000 tons of cod in the gulf means stocks will be hurt badly.”

The new agreement puts pressure on the East Coast fishery, which is showing signs of deteriorating to the conditions of the early 1980s, when it went bankrupt and had to be rescued by the federal government. The problem is that too many fishermen and fishprocessing plants are harvesting too many fish. Canada’s proclamation of a 200-mile-limit offshore sovereignty zone in 1977 led many Newfoundland companies to expand their plants in hopes of increasing profits from a swelling annual catch. But overfishing by both the French and the Canadians has resulted in dwindling stocks, closed fish plants and laid - off plant workers. In the past three years, high fish prices have helped offset the decline in catches. But now the strong Canadian dollar and lower prices are hurting Canada’s fishing industry. Canada is the largest fish exporter in the world, with $2 billion in sales for 1988, but with the cod-fishing season just three months old, three Nova Scotia plants have closed. And last week, the province announced a moratorium on new fish plant licences. Said Colin MacDonald, chief operating officer of Clearwater Fine Foods Ltd. of Bedford, N.S.: “Everyone says it is not that bad, until it happens.”

The worst part, according to East Coast fishermen and politicians, is the boundary negotiators’ decision to allow the French to catch 15,600 tons of cod in 1989. The quotas increased the catch allowed to the French last year and involve an environmental gamble. Last February, a federal study showed that stocks of northern cod are actually dramatically lower than government fish management experts had anticipated. Federal scientists urged the government to slash the 1989 quota of the silvery cod for Canadian fishermen by 53 per cent. But federal Fisheries Minister Thomas Siddon settled for a cut of only about 12 per cent—to 235,000 tons from 266,000 tons in 1988. Some industry observers say that Siddon eventually will have to reduce that allowance by 50 per cent. The minister cut quotas for other species as well. In one Nova Scotia district, boats can fish only 4,600 tons of haddock, down from 7,800 tons in just one year.

Individual fishermen have expressed shock at the sudden decline of the Atlantic fishery. Said Gerald Briand, who has fished herring in Halifax harbor for 40 years: “This is the first year as long as I can remember when there have been no herring. And when there are no herring for the cod to eat, there are no cod.” And according to McKie, a group of P.E.I. fishermen claim that the cod they landed last year was, on average, one-third the normal size.

Fishermen blame the federal government for misleading them over the health of the fish stocks. In 1982, a major task force into the restructuring of the Atlantic fishery, headed by Senator Michael Kirby, predicted an “exciting” future for the northern cod industry. Kirby projected a catch of 380,000 tons by 1987. In fact, fishermen landed only 256,000 tons in 1987. But major fish processors had already spent millions of dollars upgrading their fleets and expanding plants. At the same time, federal policies had encouraged fishermen to re-equip with larger boats.

But many of the fishermen, who are now carrying the debt on the new vessels, are also part of the problem. They are now applying pressure for more generous quotas, even if that leads to greater depletion of stocks. Kenneth Taylor, who operates two 65-foot groundfish draggers from Shelburne, N.S., together with other local fishermen, used up his area quota in February, an allowance that was supposed to last until the end of April. The boats are now using up their quota allotments for the summer and fall. But the quotas could be fished out within a week. Many fishermen say that if they exhaust their quotas early, plants will have to close, which places pressure on federal authorities for higher quotas. Said one fisheries expert who asked not to be named: “The sad part is that 95 per cent of fishermen care only about today.”

As well, Fishery Products International Ltd. and National Sea Products Ltd., Newfoundland’s two largest processors, say that they could lose about $40 million in sales as a result of Siddon’s northern cod quota reductions alone. FPI and National Sea were created from a group of money-losing smaller companies during a federal-provincial restructuring of the bankrupt industry in 1984 and 1985. In 1987, the governments privatized FPI, and the new conglomerated company earned about $58 million in 1987.

But last year, its profits fell to $17 million, partly due to the strength of the Canadian dollar. And this year, a strike tied up 58 offshore trawlers in the prime Lenten cod season, when the quality of the fish is highest. Still, Victor Young, chairman and chief executive officer of FPI, says that he supports the government’s decisions, both in quota cuts and the boundary dispute. Said Young: “It is shortterm pain for long-term gain.”

Nova Scotia will likely experience some of the sharpest pain as the stocks dwindle. At Clearwater Fine Foods Inc., one of Nova Scotia’s recent fishery success stories, the company’s 1985-1986 expansion spree has already resulted in the closing of one plant. Last month, Clearwater president John Risley closed the Port Mouton plant on the southwest coast of Nova Scotia and left 190 workers unemployed. Risley blames the closure on tighter quotas.

Fishing experts say that the next step in aiding the Atlantic fishery will be to try to reach a multilateral agreement with the countries involved to prevent overfishing by U.S. and European boats beyond the 200-mile limit, where Canada has no jurisdiction. The Northwest Atlantic Fisheries Organization limits the amount of fish that can be caught for every fish stock in that region. But FPI president Young keeps a chart in his St. John’s office showing cod and flatfish catches in the area, and he says that European fishermen are ignoring the limit and are overfishing by as much as 50,000 tons per year. That means fewer cod make it to the inshore bays where operators of the Newfoundland inshore and offshore fleets make their living.

And the inshore fishermen may also have to contend with a continued French presence within their 200-mile limit. France’s innovative agreement to tie fish quotas to the boundary dispute could lead the tribunal to grant continued quotas for the French in the 200-mile zone, even if the tribunal’s decision—expected by

1991—comes down in Canada’s favor. It is that prospect that infuriated some Newfoundland politicians last week. Federal Liberal fisheries spokesman William Rompkey charged that “a weak-kneed, lily-livered Canadian government” had failed to negotiate firmly enough with the French. Said Rompkey: “The government turns around and gives away our fish, which is what we brought into Confederation and is our work, our pride and our dignity.”

Added Thomas Rideout, Newfoundland’s new premier: “The price is too high.” But French officials continued to criticize the quotas they received. Said Fernand Leborgne, president of the continental French fishing company La Comapêche in St-Malo: “Canada has put French fishermen up for sacrifice. There will be some cadavers.”

Still, one protection for the gulf fishermen in Prince Edward Island is that when the 270-foot factory boats flying the tricolor arrive from France later this spring, they will still be forced to remain outside the Gulf of St. Lawrence. Only smaller St-Pierre-Miquelon vessels will be allowed to fish in the area set out under the agreement. But unless the fish stocks replenish, fish prices rebound and the Canadian dollar softens, the fleets will be working with the knowledge that the East Coast fishery is once again facing bankruptcy.

ANN WALMSLEY with MALCOLM CAMPBELL in Charlottetown and CRAIG BENJAMIN and CINDY DUFFY in Halifax

ANN WALMSLEY

MALCOLM CAMPBELL

CRAIG BENJAMIN

CINDY DUFFY