Cost-Benefit Analysis of Confederation: Part 3 | $76 B loss


The Independent puts a dollar figure on impact of collapsed groundfish stocks such as cod.

Originally published Oct. 31, 2004

Between 1992 and 2010, the collapse of the Newfoundland and Labrador groundfish fishery will have an overall $76 billion negative economic impact on the global fishing industry.

The estimate is based on research conducted by The Independent as part of its six-part series investigating the costs and benefits of Confederation.

Had the groundfish stocks off the East Coast of Canada been properly managed, the waters off this province could be providing a healthy, sustainable annual catch — and revenue — today.

But, as the people of this province are all too aware, that didn’t happen, and the industry will be worth an estimated $62.5 billion less (cumulative,  between 1992 and 2010). The benefits of additional employment would have been worth another $13.5 billion over that same time frame.

In 2003, the East Coast fishery — crab and shrimp mainly — was worth about $1 billion, according to numbers provided by the provincial Fisheries Department, a quarter of what it could have been.

Cod, once considered Newfoundland currency, had a landed value of just $16 million last year.

The people of this province won’t see anywhere near $76 billion from the resource that was the foundation of our culture, history and economy; that was our “lifeblood.” That level of return from the fishery won’t come for years, if ever.

“There’s a lot of problems in the fishery,” federal Natural Resources Minister John Efford tells The Independent. “We had one of the largest codfish biomasses in the world on the Grand Banks, today we’re worrying if it’s going to be placed on the endangered species list. That should never be. That’s nothing, only total mismanagement in the past.”

The managers of the fish?

The Government of Canada.

When Newfoundland joined Confederation in 1949, the new province turned total control of its fisheries over to Ottawa, one of the conditions of the Terms of Union. Quotas, science budgets, regulations and surveillance have all been determined by the feds for 55 years.

Jim Morgan, provincial Fisheries minister for six years during the 1980s, says “fisheries was the most frustrating thing I ever did in my political life. Not that I didn’t enjoy it — I came from a fishing community in Bonavista Bay, I fished with my father — but it was frustrating because you got no say whatsoever. No consultation whatsoever.”

Morgan remembers getting reports from that time of fishermen “using big brooms” to sweep cod roe off the decks before their ship came into port. No regard was given for how that might affect the reproduction of the species.

Even when he was first elected to the House of Assembly, in the early 1970s, he already heard rumblings about the depletion of the cod stocks. It was years before they were addressed.

In spite of regular calls for provincial-federal joint management, for Canada to take custodial management of the nose and tail of the Grand Banks as a way to halt foreign overfishing, for more science, more communication, for more heed to be paid to the early signs of stocks in trouble … nothing has been done.

“Our fishery was literally squandered,” says former federal Fisheries minister James McGrath.

“It was an absolutely remarkable environmental resource. It was the greatest fishery in the world and we destroyed it,” echoes Memorial University historian Robert Sweeny.

In the years after Confederation, the focus switched from the community-based inshore fishery rural Newfoundland was built on, to a larger-scale offshore industry. Salt cod fell out of fashion, fresh and frozen seafood drove the market.

Technology changed rapidly, allowing larger boats to fish relentlessly, offshore, cleaning and freezing their catch as they went. Regulations did not keep pace with the rapidly expanding capacity, draggers scraped over spawning grounds year-round.

“It was an enormous resource that we probably weren’t catching at a sustainable rate … but it wasn’t until the technology to catch the fish all the time, wherever they were, came along, that the effects were felt quickly,” Sweeny says.

In other words,  the fish didn’t stand a chance.

There are currently 10 groundfish stocks under moratoria in the waters off Newfoundland and Labrador, including three cod stocks, American plaice, redfish and witch flounder. The crab fishery, which has proven lucrative in recent years, is showing signs of trouble. As are t caplin stocks.

“It’s a terrible thing that we’re doing in the fishery now because we’re fishing everything right down to extinction and we’re not going to stop till it’s done,” says Wilfred Bartlett, a retired fisherman from Triton, Notre Dame Bay.

While the feds, in their capacity as guardians of the fisheries, may be responsible for great losses to the province, they have also invested here.

Ottawa has spent billions in fisheries research, science and surveillance since the 1950s. DFO budget numbers for this province, before last year (the 2003 budget was $148 million) weren’t available by press deadline. The feds have  paid billions more in subsidies, compensation and training programs to men and women involved in fish harvesting and processing, particularly post-moratorium.

The Independent calculates the total to be about $5.5 billion.

Although the Canadian government bears the weight of responsibility for the fate of the fishery, it doesn’t shoulder all the blame. There is some talk environmental conditions — changes in climate, water temperature  or current — or oil exploration efforts may have some effect.

Foreign trawlers have long fished, overfished, off the Grand Banks, ignoring suggested quotas.

“Those people, the people who overfished, those people at DFO who allowed it to happen, and those of us, including you and I, who stood back and never done anything to stop it, we all have to wear it,” says Efford.

“I’m not blaming the minister of the day. I’m telling you John Efford watched the draggers out on the Grand Banks. Newfoundlanders and Labradorians looked out the window and … looked at the boats out there overfishing and we  did not stop it. We didn’t do anything to stop it.”

Maddox Cove fisherman Sam Lee says fishermen were part of the destruction. He openly talks of tossing away smaller fish in favour of big ones, of the practice of targeting specific “bycatch” stocks, of pulling in hundreds of pounds of cod while engaged in a blackback fishery — with the blessing of DFO.

Says Bartlett, “the cod is never coming back and it’s never going to come back in my day ’cause we won’t let it come back. Every time there’s a few fish out there everybody’s crying and want to get it open and go out fishing.”

Though it’s not what it was, or what it could be, there is still a fishing industry in this province: there are still boats, fishermen and women, and functional fish plants. New markets for new species, whether they be sea cucumber or lumpfish, are still being found. The crab fishery provides a good standard of life for thousands in the province.

Provincial Fisheries Minister Trevor Taylor says some stocks, including cod in the Gulf of St. Lawrence, herring and mackerel, are showing “some evidence of recovery, not to the extent that we want to see it …

“Nobody can really put their finger on it and nobody can say for sure if what we think is happening is happening but there is evidence of it and … it’s cause for some level of optimism.”

As provincial Liberal leader Roger Grimes says, the fishery “has to” be the future of this province.

“Ore comes and goes, oil comes and goes, but the fishery is the renewable, sustainable backbone of the province,” the former premier says.

He, and “every premier, certainly back to Joey’s days” maintains joint federal-provincial management   is key to the future health of the stocks.

“It’s an issue that makes total sense to us, a common sense issue, but we can’t get it done until the government of Canada decides to do it for us,” he says.

Changes to the Terms of Union to award joint management, like custodial management of the nose and tail of the Grand Banks, been asked for, voted on — and never received.

Back in Petty Harbour, when asked if he sees a future for the fishery, inshore fisherman Sam Lee falls silent, shrugs, and holds up both hands, fingers crossed.

“You don’t know with the fishery. You never know. You just go day for day.”

Each Thursday and Friday leading up to July 1st — both Canada’s birthday celebration and Newfoundland’s remembrance of its darkest hour — will be re-issuing all 6 parts of “FINDING THE BALANCE: A Cost Benefit Analysis of Confederation.”

Previous posts: An Introduction > Part 1 > Part 2

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