Newfoundland reviewing seafood price-setting process as fishermen, processors continue to clash

Newfoundland and Labrador Minister of Environment and Climate Change Bernard Davis announced the launch of an independent review on how the Canadian province sets prices for seafood, as conflicts between fishermen and processors in the region have continued to sharpen.

Newfoundland and Labrador sets minimum prices paid to harvesters for certain seafood species via a price-setting panel whenever fishermen, represented by the Fish Food and Allied Workers Union (FFAW), and processors, represented by the Association of Seafood Producers (ASP) can’t agree on a price. The panel was established via amendments to the Fishing Industry Collective Bargaining Act in 2006, and since that time, the panel has mediated disputes via a three-person decision-making body.

The panel, intended to forge compromise between processors and fishermen, has apparently fallen short of its intended goals this year as the FFAW and ASP have repeatedly clashed on pricing amid precipitous drops in prices for multiple species. As a result of the issues, Davis has appointed David Conway, the former chair of the province's labor relations board, to undertake a review of the panel and to determine what can be done to improve its outcomes.

“The current collective bargaining model was introduced in 2006, and it is incumbent on me, as minister responsible for labor, to ensure that we have legislation that is responsive to the needs of the industry,” Davis said. “I have asked Mr. Conway to meet with relevant stakeholders and other interested parties to seek their views and suggestions with respect to the current collective bargaining model.”

Debate between the FFAW and ASP has grown especially heated in 2022, particularly as it related to the lucrative snow crab fishery. After an extremely successful 2021, the FFAW pushed for a price of CAD 9.05 (USD 7.02, EUR 6.93) per pound, while the ASP asked for CAD 7.60 (USD 5.89 EUR 5.82) per pound – the largest gap between the two prices in the history of the price-setting panel.

What followed was a bitter fight, with FFAW workers protesting at government buildings and the ASP filing preliminary motions requesting the removal of a panel member in a move the FFAW called a “deliberate act to undermine the collective-bargaining process.”

After the intense back-and-forth, and forced to choose between just the two options presented to it, the panel ultimately settled on a price of CAD 7.60. However, that price soon became contentious as the market for snow crab collapsed to the point that the ASP released a statement saying the “market simply is not operating as usual.” Some processors hinted at potentially halting all purchases of crab.

The fight over prices, and threats of closures, had the FFAW pushing for the government to make changes to how processing licenses are handed out.

“It is a privileged position to hold a processing license in Newfoundland and Labrador. It is abundantly clear that something must be done by our government if these companies are refusing to operate while the fishery remains open,” FFAW President Keith Sullivan said in June 2022.

Another battle between the two entities began in late June over the price of shrimp. On 27 June, the price-setting panel decided to set a minimum price for shrimp of CAD 0.90 (USD 0.69, EUR 0.68) per pound – something the FFAW called an “outrage.”

“The panel’s decision yesterday is incomprehensible,” Sullivan said on 28 June, the day after the decision. “Taking into consideration the significant increase in operational costs, particularly for fuel, fish harvesters will not come close to breaking even at this insultingly low price.”

The FFAW said some companies were paying significantly more for shrimp in other provinces, even if the product is caught in the same waters. Royal Greenland is paying 60 percent more at the plant in Quebec than it is to Newfoundland harvesters, the FFAW claimed.

“These companies are sending inshore harvesters outside the province rather than buy the product in our province, to process in our province,” the FFAW said. “In a bid to drive inshore harvesters out of the fishery, companies controlling processing in the province are colluding to undermine the collective-bargaining process, leading to the continual erosion of the owner-operator fishery, and threatening the future of coastal economic sustainability.”

The FFAW said action is needed from the government to increase transparency and provide more fairness in the collective-bargaining process.

“These multimillion-dollar companies have a stranglehold on the owner-operator fishery and will stop at nothing to drive down harvesters’ share of prices,” Sullivan said. “Meanwhile, our provincial representatives are sitting on their hands while our members can’t sell their catch.”

Newfoundland Minister of Fisheries and Agriculture Derrick Bragg said the review hopes to address some of the problems with the price-setting process.

“Efficient and effective fish price-setting is key to ensuring fisheries commence in a timely manner for the maximum benefit of the province’s fishing industry,” Bragg said.  “I look forward to this review and identifying opportunities to improve the fish price setting process that better serves processors and harvesters.”

The ASP also said it welcomes the review. 

“All parties, the producers, harvesters, stakeholders and community members generally recognize that we have a broken model here, and a review of that is timely and welcome,” ASP Executive Director Derek Butler said in a release. “2022 is going to be the best year on record for harvesters in crab, for example, and the worst for producers. The model could not handle that discrepancy. We have had delayed shrimp, delayed sea cucumber, and no northeast coast capelin fishery. These are all consequences of the model.”

Butler said the model itself is flawed from the start in that it places a price on fish at the start of the season before anything has been caught and before market factors have taken effect. As this year's snow crab fishery showed, a price that was considered too low by fishermen ended up being well above what the market ended up considering crab to be worth.

Butler said the review likely won't fix all the pricing issues that have arisen between fishers and processors, but he would like the issue to be examined in the future.

“This review process is not at that level, but even for what it will cover, it is worth a look, and we will be participating in the process and ensuring our positions are communicated,” Butler said. “The next step may very well be a full-on industrial inquiry into fish price-setting in the province.”  

Photo courtesy of Dolores M. Harvey/Shutterstock