Following the 1992 cod moratorium, Newfoundland and Labrador's fishing industry shifted from a groundfishery to a shellfishery. Shrimp and snow crab became the two most important harvested species and replaced cod as the economic engine of the fishery. Profits rose rapidly, and in 2002 (just one decade after the moratorium), the province's total seafood catch was worth almost double what it had been in 1990, when codfish still dominated the industry. Aquaculture also grew in importance and in 2009 was worth $92 million. This sector focuses on farming Atlantic salmon, steelhead trout, and blue mussels, but it is exploring ways to commercialize cod aquaculture.
Although the economic value of landings has increased since the moratorium, the total volume harvested has decreased by about 40 per cent over the last 20 years. As a result, fewer people work in processing plants and on fishing vessels than before the moratorium. The fishing industry employed approximately 37,665 seasonal workers in 1989, but only about 21,140 in 2010.
Several problems impede the continued development and profitability of the industry. The rising price of fuel and a strong Canadian dollar have decreased industry profits in recent years, as have the tariffs which some countries place on shrimp and other seafood imports. Then there is overcapacity. The fishery uses more vessels, processing plants, workers, and other resources than are needed. Overcapacity increases expenses, and encourages resource depletion and low incomes. As a result, it is difficult to attract young workers to the industry.
From Groundfishery to Shellfishery
Cod was the most important fish harvested in Newfoundland and Labrador before the 1992 moratorium. It accounted for the bulk of the province's annual seafood catch and earned more money in export revenues than any other fish or shellfish species. In 1990, for example, the total landed value of fish in the province was $277 million, of which cod accounted for $134 million, or 48 per cent. The second-most valuable species was shrimp, with a landed value of $46 million. Snow crab earned only $13 million that year.
The situation reversed after the 1992 moratorium, as industry and government officials promoted the shellfishery as a means to create jobs and generate export revenues. Groundfish landings decreased dramatically, while snow crab and shrimp grew in importance. The change was profitable, due to high prices for shellfish on international markets. In 2002, snow crab and shrimp landings were worth $229 million and $172 million respectively. All groundfish species that year (mostly cod, turbot, and flatfish) were worth a combined $62 million – roughly one-sixth the value of crab and shrimp. The total landed value in 2002 was $517 million, which was almost double what the industry had earned two years before the moratorium.
The federal government lowered crab quotas between 2003 and 2005 in response to concerns that stocks were being overfished. Nevertheless, snow crab continues to dominate the industry alongside shrimp. In 2009, the provincial Department of Fisheries and Aquaculture (DFA) reported $420 million in total fish landings, of which crab and shrimp accounted for 63 per cent, with landed values of $165 million and $109 million, respectively. Other shellfish harvested in provincial waters include lobster, clam, whelk, and scallops.
The groundfishery is the second-most valuable capture fishery in Newfoundland and Labrador, followed by the pelagic fishery and seal hunt. Capture fisheries target wild fish and other marine animals; they do not involve the harvesting of farmed species. Both the groundfishery and pelagic fishery are capture fisheries. The groundfishery harvests fish species that live on or near the ocean floor, such as cod, while the pelagic fishery relies on mackerel, herring and other species that live in open water, away from coastal areas and the seafloor.
Although the moratorium closed the northern cod fisheries in 1992, they were reopened during the second half of the 1990s on a greatly reduced scale. In May 1997, the federal government permitted the first such limited commercial cod fishery to take place on the island's south and west coasts. It set quotas of 10,000 and 6,000 tonnes in NAFO Divisions 3Ps and 4RS3Pn respectively. Since then, cod and turbot (also known as Greenland halibut) have been the most profitable groundfish species. Other important species are yellowtail flounder, redfish, and hake. The groundfishery reported a landed value of $48 million in 2009, with cod valued at $15.2 million and turbot at $20.2 million.
The pelagic fishery and seal hunt generally account for lower profits than the groundfishey. Pelagics had a combined landed value of $21 million in 2009, down from $28 million in 2007. Capelin, mackerel, and herring are the most significant pelagics fished in Newfoundland and Labrador waters. The seal hunt reported a record landed value of $30.2 million in 2006, but has experienced falling profits since then, due in large part to international controversy. Unfavorable pack ice conditions have also contributed to falling revenues. The industry's landed value dropped to $11.4 million in 2007 and then to $829,000 in 2009.
Processing and Aquaculture Sectors
Before the 1992 moratorium, fish plants in Newfoundland and Labrador focused on the processing of cod and other groundfish species for export to North American markets. Thereafter, many plants began to process crab, shrimp, and other shellfish. The Unites States remained a major market, while Asia (particularly China and Japan) and Europe grew in importance. In 2009, 118 processing plants operated in the province and employed approximately 10,705 seasonal workers. Pelagics dominated the industry and accounted for 44 per cent of total production. Shellfish comprised 35 per cent and groundfish 15.
The aquaculture sector has grown in importance since the moratorium. Key species being farmed in Newfoundland and Labrador are Atlantic salmon, steelhead trout, and blue mussels. Production of salmon and trout is concentrated on Newfoundland's south coast, in the Bay d'Espoir and Fortune Bay regions, while mussels are farmed primarily in Notre Dame Bay. Other aquaculture sites are scattered throughout the province.
This sector in 2006 employed 370 workers, which increased to 655 in 2008 and remained the same in 2009. The industry farmed a record 13,625 tonnes of fish in 2009 and had an export value of $92 million – a significant rise over $63 million in 2008. Cod aquaculture is under active investigation.
Problems Facing the Industry
Although the fishing industry has expanded in terms of value since 1992, it faces some serious problems. Overcapacity in both the harvesting and processing sectors is a major concern. For years, the fishery has used more vessels, processing plants, workers, and other resources than are needed. This inflates expenses and increases the risk that marine resources will become depleted.
Low wages and the seasonal nature of work also create problems within the fishery. Although the industry employed between 23,000 and 24,000 people in 2008, many did not work for the entire year and only about 12,000 fishers and plant workers were employed at any one time. The seasonal nature of work forces many fishing people to supplement their earnings with Employment Insurance (EI). In 2001, fishers reported an average income of $25,400, while plant workers earned $19,701. Both figures include about $10,000 in EI payments, and both figures were considerably lower than the provincial average annual income of approximately $32,000. Relatively small earnings and temporary employment make it difficult to attract young workers, which may become a greater problem in the coming years as members of an aging workforce retire.
External problems have also hurt the fishery. The rising price of fuel, for example, has increased operating costs and cut into profits, while competition from China and other seafood-producing nations has reduced revenues. The changing value of global currencies also affects the price of Newfoundland and Labrador fish on the international market. If the Canadian dollar rises in value, then exports may become more expensive and cause sales to drop. This happened in 2008 when a high Canadian dollar and a low British pound hurt exports to the United Kingdom.
Some important consumers of the province's seafood products impose tariffs on imports entering their borders. China and Russia have both imposed tariffs on seafood imports in recent years, and in 2009, the EU approved a ban on the import of seal products into all of its 27 countries.