Private investment needed in Arctic fishery


The catastrophic collapse of the northern cod was an unmitigated disaster for thousands of fishermen and fish-plant workers throughout the Atlantic provinces.

However, the disappearance of cod and other fish species gave Arctic shrimp a new lease on life — literally.

Since there are fewer cod around to eat them, northern shrimp have enjoyed a population explosion.

As we all know, this population explosion has given fishing interests a lot of valuable new quota to fight over. Between 1996 and 1998, the Department of Fisheries and Oceans boosted the total allowable catch for shrimp from 37,000 tonnes to 87,000 tonnes. The total shrimp quota is still going up. And since shrimp, depending on market demand, are worth at least $4,000 to $4,500 a tonne, all that new shrimp is worth a lot of money to those who catch, process and sell it to seafood-hungry southern customers.

At the same time, the settlement of the Nunavut land claims agreement and the creation of Nunavut has given Inuit powerful new tools that they’re now using to demand a fair share of the total allowable catch for shrimp, and other species, in Davis Strait and other offshore areas.

The “adjacency” principle, which recognizes that fishermen from a province or territory should get most of the quota for species harvested in waters right next to them, is acknowledged in Article 15 of the Nunavut land claims agreement.

Predictably, the Nunavut government is likely to use that principle in an impending lawsuit against the federal government, prompted by a recent announcement by Robert Thibault, the federal minister of fisheries and oceans, that gave only 51 per cent of the latest Davis Strait quota increase to Nunavut interests.

But is that the only action that Nunavut, and other eastern Arctic players in northern Quebec and Labrador can take to ensure that Inuit benefit fairly from shrimp and other stocks adjacent to their lands?

No, it’s not. In 1995, the Department of Fisheries and Oceans did a study on the shrimp fishery. The study found that Inuit development corporations were making less money from their quota than they could be making. Those companies are the Qikiqtaaluk Corp., Makivik Corp., and the Labrador Inuit Association. The three companies hold several shrimp fishing licences, which they operate through a variety of licence sharing arrangements between each other and some other partners.

The reason? It’s because none chose to invest in a trawler.

Instead, the development corporations have chosen to rent their licences out to southern companies like Clearwater, Farocan, and Ocean Prawn, which actually fish the areas licenced to Inuit. In exchange, the big maritime seafood processors pay flat royalty fees to the development corporations and agree to hire and train Inuit workers for their boats.

Up to 25 per cent of the crews serving on southern-owned trawlers fishing on Inuit licences have been made up of Inuit workers, who can earn more than $50,000 or more for just a few months of intensive work at sea.

But Inuit development corporations have made no real long-term investments in the shrimp fishery, and have made less money out of it than they could have. According to the study, they were “prepared to accept lower revenues in exchange for positions on vessels,” even though a licence and a half could provide enough revenue to finance a new $25-million, 65-foot trawler.

This weakens Nunavut’s case for a greater share of shrimp quota. It’s the southern interests that first made the risky investments in trawlers and processing equipment, and that actually developed the Arctic fishery. That gives them a strong argument they can use to justify getting more quota for themselves in the future.

So if the collectively owned development corporations aren’t able or willing to make risky investments in Inuit-owned vessels, then the Nunavut government should encourage private entrepreneurs to do the job instead.

One firm, Arctic Harvesters Inc. of Nova Scotia, is seeking an Inuit partner, or partners, to take a 51 per cent controlling interest in the company. Since Arctic Harvesters operates a 285-foot factory freezer trawler, this could turn out to be a way of creating an Inuit-owned fishing vessel one day.

Another firm has also stepped forward, Jencor Fisheries of Iqaluit, a private, 100-per-cent Inuit-owned fishing company. Jencor says its mission is to show that it’s viable for Nunavummiut to own and operate their own fishing vessel. Their dream is to one day see a fishing vessel that is captained and crewed entirely by Inuit.

This is the kind of enterprise that the Nunavut government should support aggressively. Private, individual investment by entrepreneurs who risk their own money may be the quickest way of buying a bigger Inuit stake in shrimp and other fisheries. JB

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