5.0 The Fishing Industry from 1987-96

In recent years, the Newfoundland and Labrador fishing industry has shifted from an industry driven primarily by groundfish to one dominated by shellfish production. This transformation is the result of two key factors: first, the decline and subsequent fishing restrictions placed on key groundfish stocks and secondly, the growth and availability of other species such as crab and shrimp. While principal groundfish stocks have been under moratoria, the fishery nevertheless remains a significant contributor to the Province's economy. The dramatic decrease in the volume of groundfish landings and the rise in landings of shellfish is clearly demonstrated in the diagram.

In 1996 the landed value of the fish harvest was $240 million and provided jobs for an estimated 13,000 harvesting workers and 10,000 fish processing workers. Many of these workers are also clients of the TAGS program. Without the groundfish component of the industry, however, fisheries employment remains well below historical levels. As a result, a considerable number of TAGS clients are unable to work in the industry and must rely upon TAGS to replace the income lost.

In 1992, low biomass levels resulted in the closure of commercial fishing for 2J3KL cod, and in 1993, the 3Ps and 4RS3Pn cod fisheries were closed. Since that time, other stocks such as redfish, American plaice, flounder and turbot were also placed under moratoria. The result of these closures has been the displacement of many workers from the fisheries. The NCARP and TAGS programs were designed to provide income support and adjustment measures for individuals most affected by the crisis.

These developments have caused groundfish landings to drop significantly over the past ten years. In 1987, 395,000 tonnes of groundfish were landed; however, by 1996 landings had declined to 25,000 tonnes, about six percent of the earlier landings level. This decline was directly attributable to the moratoria on cod and other stocks. (For a graphical overview of the landings of various species see Appendix 6.0).

Many reasons have been suggested to account for the decline in groundfish stocks. They include: deficiencies in fisheries science; foreign overfishing of straddling stocks; inadequate enforcement of both domestic and foreign fleet sectors; changes in environmental conditions/recruitment impacts; and growth of the seal population. Nonetheless, some stocks have shown signs of recovery and after about four years under moratoria, a limited commercial cod fishery was permitted in 4RS3Pn and 3Ps this year.

COD FISHERY REOPENED ON THE SOUTH/SOUTHWEST COASTS
On May 19, 1997 a limited cod fishery opened in NAFO Divisions 4RS3Pn and 3Ps. In Division 3Ps on the south coast, the quota was 10,000 tonnes. Approximately 1,200 fixed gear groundfish licence holders with vessels less than 65 feet will be permitted to catch up to 6,608 tonnes of the quota. The balance has been allocated to mobile gear licence holders (414 tonnes) and vessels over 65 feet (1,418 tonnes) as a by-catch, and to France (1,560 tonnes). Under a 1994 Canada-France Agreement, each country agreed to share the Total Allowable Catch for some transboundary stocks. The French share of 3Ps cod is 15.6 per cent.

In Division 4RS3Pn in the northern Gulf of St. Lawrence and on the west coast, there is a quota of 6,000 tonnes. Approximately 1,600 fixed gear groundfish licence holders with vessels under 65 feet in length can harvest up to 5,128 tonnes. The remainder has been allocated to larger vessels as a by-catch, the Sentinel fishery, and for France. In this area, France has a 2.6 percent share (156 tonnes) of the quota. Although these quotas are substantially lower than historical catches, they provide fishers with an opportunity to participate in the commercial cod fishery once again.

GROWTH OF SHELLFISH HARVESTS
Moving in tandem with the reduced availability of groundfish has been an increase in the abundance of shellfish. The shellfish species have replaced groundfish as the most important fish caught since 1992 in terms of volume landed. The diagrams on the previous page illustrate that shellfish landings increased from approximately 19,000 tonnes, valued at $41 million in 1987, to 92,000 tonnes valued at $192 million in 1996. In contrast, however, shellfish production has not provided employment of the same order of magnitude as have traditional species.

Snow crab and shrimp were the principal shellfish species harvested in 1996, accounting for about 43 and 30 percent of the total landed value of shellfish respectively. Landings of snow crab increased from 6,700 tonnes in 1987 valued at $12.6 million, to over 37,000 tonnes in 1996 worth about $83 million. In 1995, an outstanding year for crab, the landed value of the species hit $182 million. Similarly, shrimp harvests have increased from around 8,500 tonnes in 1987 to 20,000 tonnes in 1996. Aside from other species and opportunities outside the fishery, fish harvesters fortunate enough to have, or qualify to have, a licence to fish crab, have had the capacity to either replace or augment the income available through TAGS (see Box "TAGS and CORE: Implications for Licensing").

OPPORTUNITIES IN THE CRAB AND SHRIMP FISHERIES
The 1997 crab quota was increased from the 1996 level by over 15 percent to 44,300 tonnes. This could provide an abundance of crab for the traditional fleets, but also enable a 42 per cent increase in the quota for temporary permit holders. Apart from the 72 full-time and 686 supplementary licence holders, 4,500 CORE fishers with vessels less than 35 feet in length were eligible to apply for a temporary permit in this year's fishery. In 1996, approximately 1,800 temporary crab permits were issued to fishing enterprises operating vessels under 35 feet by the Department of Fisheries and Oceans.

Individual fishers will receive a minimum of 1.8 tonnes (4,000 pounds) from the 5,895 tonne quota allocated for temporary permit holders. Where there are more applicants than can be accommodated by this quota, a random selection for permits will take place. Additional criteria may also be defined by local fishermen's committees. An equal allocation of the minimum amount (1.8 tonnes) would result in approximately 3,000 temporary permits.

The 1997 northern shrimp quota has been increased to 59,000 tonnes, a 57 percent increase from 1996. For the first time, fishers with vessels less than 65 feet in length have been allocated a northern shrimp quota. Approximately half, or 10,600 tonnes, of the increased quota will be allocated to owners of vessels less than 65 feet in length who have been designated CORE. This will create new jobs for both fishers and plant workers who are adjacent to the resource, some of whom are persons eligible for TAGS benefits.

The management of this increased quota for new entrants will be carried out by Local Management Boards in each area. The Boards will be represented on the Northern Shrimp Advisory Committee which is responsible for making recommendations on Total Allowable Catch (TAC) levels and management measures.

TAGS AND CORE: IMPLICATIONS FOR LICENSING
Changes have been made to licensing policy for enterprise owners with vessels less than 65 feet in length. The changes are designed to reduce capacity and limit future growth while improving the viability of fishing enterprises. Under the new structure, 5,400 enterprises have been designated as "CORE" enterprises.

These enterprises will be subject to fewer regulations and will be the only ones eligible to receive new licences in the future. For example, in 1997, these fishers will be eligible for new crab and shrimp permits and licences as well as to participate in their traditional fisheries.

Approximately 4,400 of the 9,500 fishers eligible for or exhausted TAGS are amongst the fishers designated as CORE. For a detailed overview of the geographical distribution of TAGS fishermen with CORE status, refer to Appendix 7.0. Hundreds of other fishers eligible for TAGS are employed as crew members CORE enterprises.

The number of CORE enterprises will remain fixed while entry into the CORE will only be possible by replacing an existing enterprise if the new entrant is a professional - level II fisher. Enterprises were recognized as CORE based on their historical attachment and dependence on the fishery. (See Appendix 7.0 for additional CORE Statistics).

CHANGES IN CAPELIN LANDINGS
Another species group which have historically contributed significantly to fisheries performance are the pelagics. The principal pelagic species caught in Newfoundland and Labrador are capelin, herring and mackerel. While these have not been under moratoria, quotas and catches (in particular capelin) have declined in recent years. While a decline in capelin harvests was not a determining factor in either the introduction or continuation of income support programs for the fisheries, its occurrence at the same time catches of other major stocks have collapsed has compounded problems in the industry.

In the late 1980s and early 1990s, the resource base for capelin was strong and the markets were buoyant. Difficulties with capelin fisheries in Norway and Iceland resulted in increased demand for capelin products from Newfoundland and Labrador. Most capelin harvested were destined for markets in Japan. Capelin landings declined from a high of 127,000 tonnes in 1990 to 32,000 tonnes in 1996; landings were, however, as low as 160 tonnes in 1995. Currently, quota levels are set at 45,700 tonnes. The return of the capelin fishery to the Scandinavian countries along with problems in the domestic industry, has resulted in lower landed volumes and values in recent years. The capelin fishery is expected to recover in the near term, however, and make a significant contribution to the industry again. A resurgence in the capelin fishery would help in providing jobs and income to some people who are currently displaced from the fishery, and to fishery workers in general.
MARKET CHANGES
The collapse of major groundfish stocks and a decline in traditional catches of capelin in conjunction with the rise of the shellfish sector have impacted the industry in other ways. For example, with the significant changes in the composition of output in the fishing industry over the past few years, markets have also shifted. In 1987, about 77 percent of fish exports went to the United States and about nine percent to Asian countries. Because the United States was an important market for groundfish products and Asian markets have a strong preference for shellfish, in 1996 only 39 percent of fish exports went to the US while 48 percent was exported to the far east, Japan and China in particular.

IMPROVEMENTS AND OTHER DEVELOPMENTS IN THE INDUSTRY
Other positive developments have also taken place in in the fishing industry in recent years. Fish harvesters and processors are becoming increasingly innovative in their pursuit of commercial fisheries opportunities. Also, new species are being targeted and a greater emphasis is being placed on the full utilization of existing resources. A professionalization program is now in place for fish harvesters and the industry is diversifying. Aquaculture is assuming an ever increasing role as more individuals see the activity as an alternative. Some traditional species also appear to be making a comeback, or showing good signs of growth. Many who are eligible to receive benefits under TAGS also participate in one or more of the activities referenced.

Seal harvests have increased from about 39,000 animals in 1987 to about 250,000 in 1996. Poor markets and low prices during the 1980s and early 1990s resulted in small numbers of animals being taken. In 1996, market conditions improved resulting in the first major commercial activity since 1984. Similarly, work to develop inshore shrimp harvesting is also showing positive results and the quota has been increased substantially. This year, approximately 20,000 tonnes (about 90 percent of the increase) of the new shrimp quota will go to Newfoundland and Labrador harvesters. It is noteworthy that some of the areas most dependent on northern cod are also areas that will benefit from the additional shrimp quotas. Through other development initiatives, the industry is beginning to capitalize on opportunities for whelk and sea urchin harvesting and cod growout (farming). Demand for these products has been strong and the industry is responding positively. Cod growout, an example of a traditional fishery merging with aquaculture technology, provides opportunities for most areas with access to trap cod. Trap cod can be held over and the weight increased where short term imbalances in market supply/demand conditions exist, or cod are smaller than desirable. The west and south coast areas of the Province will benefit from this technology as the 1997 fishery proceeds.

Other opportunities for aquaculture and higher production levels exist in the culture of shellfish, such as blue mussels and giant scallops, and for the raising of finfish species such as Atlantic salmon, steelhead trout and rainbow trout. Shellfish can be grown in most areas where there is clean water and no arctic or pack ice. Most blue mussel farms that are active are located in sheltered coves on the northeast and south coast areas of the Province. In the short term, most finfish aquaculture is expected to be restricted to the Bay d'Espoir area where unique growing conditions offer opportunities for steelhead and Atlantic salmon aquaculture. The potential for halibut, cod, yellowtail and other finfish are still being researched and results to date are positive. In 1996, there were 210 aquaculture licences issued throughout the Province consisting of 76 finfish and 134 shellfish licences compared to a total of 64 licences in 1994. Aquaculture developments will not only diversify the industry and provide increased alternatives for fishery workers and others in the short-term, but strengthen the industry in the long term by broadening the scope and the quantity of raw material and resources available to the industry.

The information above indicates that the industry and its workers have demonstrated considerable resilience and dynamism. This is in spite of the historic events which have challenged the industry and its workers. While, to date, changes and events in the fishery have not been sufficient to offset the loss of traditional species, successful efforts have been made in the industry to seize and develop the opportunities which have been available.

The evolution of the industry since the moratorium began is reflected in the data throughout Sections of the Report. This overview of the fishery helps explain why the statistics and information in this Report do not show those affected by the fisheries closures as a homogenous group. For some, fishing activities and traditional income patterns have been maintained. This is reflected by the large number of clients who are seen to earn income in Section 6.0 and elsewhere. Statistics also underline the reality that for a large number of clients, traditional income patterns have been severely disrupted with the absence of the full recovery of major groundfish stocks. The development and emergence of alternative fisheries has been helpful for some while offering few, if any, opportunities for others. The relative reliance on TAGS amongst clients and throughout regions of the Province is a function of the complex situation in the industry. This report would be less useful for many users without this backdrop information which outlines the forces and events from which the data are derived.