The fishery: Critical questions need answers

The Economic Outlook says Nunavut’s fishery is possibly capable, in the long-term, of producing “modest economic growth,” but the report writers appear skeptical about that happening soon.

“A lot of work will be needed before the fishery turns into an $80 million industry, as some proponents have suggested,” the report says.

For that to happen, Nunavummiut must reach agreement among themselves on how the fishery should be developed and how much public money should be spent on subsidizing it, they say.

“There is a real shortage of analysis addressing the critical questions of profitability, subsidization, opportunity costs, and individual Nunavummiut interests. This has to be a concern.”

For example, they say that Nunavut’s fisheries strategy doesn’t set priorities. And with no direction on priorities, disagreements like the dispute between Qikiqtarjuaq and the Baffin Fisheries Coalition will go unresolved.

The also say that Nunavut will have to make tough decisions on how much to subisidize money-losing operations like the fish plant run by Pangnirtung Fisheries Ltd.

In 2003-04, the Pang fish plant lost a whopping $655,000, even after getting $260,000 in direct government subsidies and $180,000 in other contributions, although it did create 42 jobs.

The Pang fish plant also gets free fish from the BFC, a situation that puts both organizations in a bind, the report writers say.

“For the trawler to turn a profit, it can’t be providing its catch to customers at no cost. However, paying market value for off-shore turbot would cripple the processing plant,” the report says.

Another problem, the report writers say, is that they can’t include the value of the fishery in their economic forecast.

That’s because they have no information about profits, such as the profit that the BFC is realizing from the operations of the Inuksuk I, an Icelandic fishing trawler they’ve acquired in a lease-purchase deal.

“Profits would certainly impact the forecast, however a lack of information precludes any assumptions in this area.”

The also point out that the biggest economic value is created by processing – something that can’t happen until Nunavut gets a real port.