In Confederation: The First 20 Years

In June 1948 the people of Newfoundland voted by a small but comfortable margin to join the Canadian Confederation. This was the second time in 15 years that the people of Newfoundland had been forced to adapt to an entirely new system of government. In most senses, life went on as usual, but for the larger political and economic questions, such as fisheries policy and resource management, Confederation with Canada ushered in an era of changes. The man who brought Newfoundland into Confederation, Joseph Smallwood, was in general an advocate of any form of industrial advancement, though he himself had weak management skills. He was a booster of the frozen fish industry and his government during the 1950s provided significant loans to the sector to encourage its development. The salt fishery, outdated and inefficient, died a slow death in the early years of Confederation. As well, the centralized government far away in Ottawa did not always understand the particular needs of the Newfoundland fishing industry.

The Decline of the Salt Fishery

The Commission of Government recognized that the traditional saltfish industry in Newfoundland was, in technical economic terms, highly inefficient. Even so, any plans for the future economy of Canada’s newest province would have to revolve around the central fact that the fishery supported much of the rural Newfoundland economy. It was characterized by low productivity of labour as well as low market returns. Unfortunately it was also the single largest industry in the province and supported a large percentage of the population. And even though the Commission had instituted a system of co-operatives that sought to maximize the returns to exporters of the saltfish export, other events in the global economy during the 1930s and 40s conspired to strike a death blow to the old-fashioned salted-and-dried fish trade.

International currency problems continued to plague the Newfoundland and Labrador fishing industry. In the years after World War II, the British economy was on the brink of failure due to the severe challenges it had faced in financing World War II in Europe. At the same time, the American economy surged in the years after the war and the American dollar increasingly became the currency of choice for much global trade. This was a fatal problem for Newfoundland. As a British colony, it had a tradition of exporting its limited sterling-denominated trade outputs to its “exotic” colonial brethren and to European markets which by 1945 had war-weakened currencies. As consumers, however, Newfoundlanders preferred relatively expensive dollar-denominated North American imports. Newfoundland’s principal export, saltfish, was thus positioned precisely on the wrong side of global trade and currency flows. One of the benefits of a fresh/frozen fisheries industry was seen to be the fact that its exports would go primarily to the rich American markets thus helping Newfoundland to balance its trade accounts. In 1949, it made perfect sense to most observers that this was the best way forward for the provincial fishing economy. In the years after Confederation, the new Ottawa administrators gave little support to the old-fashioned saltfish industry, convinced as they were that the future lay in exporting fresh-frozen product to the rich American markets. The saltfish trade was thus orphaned.

New Challenges: The Fisheries Enter Confederation

Upon entering Confederation, a Newfoundland provincial Department of Fisheries and Co-operatives was made responsible for administering the landward aspects of the fisheries, while the Department of Fisheries in Ottawa would oversee issues related to offshore activities. The Commission had suggested the development of a system of fishing co-operatives as a way to instill a sense of ownership and entrepreneurialism into the Newfoundland fisherman and his family. The co-operatives program was continued after Confederation under the responsibility of the Minister of Fisheries and Co-operatives. As always in Newfoundland history, the particular personalities of the people who held the various bureaucratic and political positions greatly affected the progress of the plan to develop the fisheries. Premier Smallwood was a great booster of the fresh/frozen sector, promising as it did a modern industrial future for the Newfoundland economy. Though some historians have argued that Smallwood lacked a visceral understanding of the fishery, since he did not come from an outport fishing background, it seems clear that he did appreciate that the fortunes of the majority of rural Newfoundlanders were tied either directly or indirectly to the fisheries. His lack of management skills manifested themselves in the fisheries policy of the first years after Confederation. The Smallwood government, attracted by the promise of a modern frozen-fish industry, invested so much capital and resources into the sector that little energy was left for other initiatives. The number of frozen fish plants doubled during the 1950s and this lead to an unhealthy atmosphere of “technological escalation.” One firm, Fishery Products, received an inordinately large share of government loans. There seemed to be a lack of fairness in how government funds were distributed around the sector.

Bureaucrats at the Department of Fisheries in Ottawa, though sincere, did not always grasp the detailed circumstances of the Newfoundland economy and the social circumstances that often curbed wholesale industrial change there. As well, there was the inevitable Pacific-Atlantic competition for resources and attention in the Ministry. The Minister of Fisheries from 1952 until 1957 was James Sinclair from British Columbia. Some in Newfoundland complained that his true loyalties lay in the British Columbia region and that Newfoundland was somehow getting short shrift.

With Newfoundland’s entry into Confederation, the federal Department of Fisheries in Ottawa was reorganized. Formerly based on regional divisions, it was re-organized along functional lines, with clearly defined areas of concern such as environmental research, technological matters, education and even public promotion. Economic analysis and the gathering of statistics were given priority status. The idea was to encourage the development of a more efficient and productive industry on both Canada’s coasts. And as stated above, Ottawa was all in favour of a modern, industrially advanced frozen-fish industry supplying premier product to the American markets, thus contributing to a stabilization of Canada’s dollar-based trade flows. It followed that the saltfish sector would be cut adrift, regardless of the fact that large numbers of people around the province depended on it as their only economic lifeline, however historically insufficient to their needs.

The Fresh-Frozen Sector

The “industrial path” for Newfoundland that had been favoured by the Commission government before Newfoundland entered Canada was similarly embraced by the Canadian and Newfoundland governments after 1949. Many government and academic analysts, private observers and politicians, including Joseph Smallwood himself, had advocated an overall program of industrialization and modernization for Newfoundland. The development of a fresh/frozen fishing industry was seen as the way of the future. The fresh/frozen sector had certain benefits that appealed to policy-makers in Ottawa, including its centralized (and thus easily-regulated) organizational structure and its requirement for new technologies. Importantly, the sector could serve new markets in North America for frozen food that were developing in the prosperous years after World War II. But the strategy had its own problems. One observer (Henry Mayo) estimated that the transition to a fresh/frozen industry would be a slow process and would have sharply reduced employment needs when compared to the old-style saltfish economy. It would require a complete break with the past: new labour practices, processing technologies, and end-markets would all need to be embraced.

Other Investments and New Technologies

Despite the obvious benefits and attractions of a fresh/frozen fishery, it took 15 years for the value of frozen fish production in Newfoundland to surpass that of saltfish. While small-scale inshore fishing enterprises continued to produce saltfish, even the fresh/frozen industry continued to rely on them. Even Stewart Bates' original plans for fisheries modernization required the short-term survival of the small-scale fishery. Such survival would ensure overall stability in the supply of fish to processors, diversified production in other species such as shellfish, and a source of employment to moderate the impact of fisheries industrialization on coastal communities. While the newer deep-sea factory ships were efficient, their higher overhead costs and down time for maintenance meant that the fresh-frozen sector continued to require inshore fishing enterprises. Although they remained central to the fishery, modernization changed life for small-scale fishing people. Newer industrial production concentrated fish processing in a few large centres. Such centralization drew many fishing households away from small communities in which they had combined production in the salt fishery with other work for generations. As it became clear that the corporate sector would not generate enough employment to absorb the consequent surplus labour, and that larger offshore vessels could not supply enough fish to the industry as a whole, governments encouraged households to increase the scale of their investment in fishing boats and gear.

Inshore fishermen of the 1950s were still using very similar boats to those their fathers and grandfathers had used: gasoline-powered trap skiffs. Traditionally the trap skiff was supplemented with smaller punts or dories, which were towed behind the main skiff and were used for hauling and setting the cod trap, as well as transporting the day’s catch back into harbour. In the early 1950’s, a new strategy was adopted which was hoped to give the fishermen yet a further edge over the fish: the longliner. Longliners were larger boats with a covered wheelhouse and larger hold and work areas. They had bigger engines than trap skiffs and could carry more fuel. The design also called for sleeping quarters and a simple galley area for preparing meals. Policy makers in the provincial Ministry of Fisheries as well as in Ottawa hoped that the longliner would allow inshore fishers to both spend longer time periods at sea as well as facilitate access to “mid-shore” fishing banks further away from their home harbours, such as the Funk Island Banks in the case of fishermen based in Bonavista and Notre Dame bays. The strategic idea was to diversify the sector away from its concentration on the inshore regions and more toward these relatively ignored “mid-shore” banks. In the end, though longliners represented an important technological advance in terms of the scale of the potential catch, it proved difficult to integrate this “new” type of craft into the inshore fishery and in the 1950s and 60s the traditional trap skiff remained the craft of choice for the inshore fishermen. The funds required for building the longliners proved to be prohibitive for the average outport fisherman, and ultimately the net return per boat was higher with the older skiffs. Loan programs were not successful: many fishers refused to go into debt to acquire a craft that did not give them a clear advantage over their existing boats and gear.

The story of new investments and new technologies in the fisheries is one of slow adoption in some cases and over-adoption in others. For example, throughout the 1950s, the frozen fish industry grew slowly, but even so, by 1964 frozen fish production surpassed saltfish production for the first time in Newfoundland’s history. Other new technologies saw more rapid and zealous deployment: in 1964 Newfoundland’s Deputy Minister for Fisheries estimated there were 18,000 50-fathom nylon gill nets in use around the island, responsible for the harvesting of 15 million pounds of cod in that year alone. The new nets had been introduced to support the efforts of inshore fishermen. As well, the cod trap was still in active use well into the 1950s and 60s. In the war against the cod, the inshore fisherman was winning, to the long-term ecological disadvantage of the resource. And efforts to diversify into the mid-shore fisheries had a mixed record of success.

Assessment

Newfoundland and Labrador’s first attraction to Europeans was its fishery, and the particular fishery that developed there – shore-based, family-centered, and geographically scattered – has proven to be a difficult legacy for the province to escape. Ironically, some of the policies of the Commission government, such as an innovative system of regulated co-operatives and a modernized, technologically advanced frozen fish industry serving the wealthy American markets, might have served the economy and the people of the province very well had they been aggressively continued by the Ottawa and provincial governments after Newfoundland became a part of Canada. As we have seen, this was not to be the case. Bureaucrats in Ottawa often did not appreciate the particular social and environmental particularities of the Newfoundland fisheries, and the factionalized political culture in the province may have prevented local policy-makers from formulating clear, long-term goals.

Consequently, by the 1970s, the fisheries of Newfoundland and Labrador had been changed, but not necessarily improved. Although the industry had been modernized by the introduction of the fresh/frozen sector, overall dependence by rural Newfoundlanders and Labradorians on employment in the fisheries had not been reduced. Instead, the small-scale fishing enterprises persisted alongside the new deep-sea fishing vessels. Greater numbers of workers came to rely on employment in the new fish plants that produced frozen fish products. Overall fishing capacity increased in the industry, which would have disastrous ecological consequences for the fisheries of the last quarter of the 20th century.

Article by Allan Dwyer. ©2007, Newfoundland and Labrador Heritage Web Site.

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