:
Thank you, Mr. Chairman. I'd like to introduce Mr. Ken Drake, who is the president of the P.E.I. Fisherman's Association.
I'll begin by saying welcome to the members of the standing committee and the ladies and gentlemen. First let me welcome you to Prince Edward Island. It's not often that a Commons committee of this stature makes the opportunity to visit our Island province. On behalf of the P.E.I. Fisherman's Association, please accept our sincere thanks for the invitation to appear here today. It's not often we have the opportunity to do so.
The topic of today's hearings is the growing concern over the 2009 lobster fishing season in Atlantic Canada. As the representative organization of 1,300 core licence holders in Prince Edward Island, for whom the lobster fishery is the primary income source, we are especially concerned about the coming season.
The global economic and financial crisis we face, the softening of some traditional markets, the growing pressures on harvesters by the processing sector, the ever-increasing costs of primary production, and many other issues are cause for worry to our members.
Perhaps some background is in order. Inshore fishing is not a particularly lucrative mode of employment. Statistics published in 2006 by the Fisheries and Oceans policy and economics branch show that fishermen in the three lobster fishing areas surrounding Prince Edward Island earned the following before-tax incomes from all fishing sources: LFA 25, $7,082; LFA 26A, $11,010; and LFA 24, $63,423.
In 2008 fishermen endured a 25% decrease in the shore price of lobster, with the price for canners as low as $4 and markets at $5, down from $5 and $6 the year previous. At the same time, cost of production for bait, fuel, gear, etc., increased by some 37% over the previous five-year average. With such an obvious cost-price squeeze, it is clear that any decline in the shore price paid to fishermen will inevitably result in the bankruptcy or elimination of a solid number of P.E.I.'s inshore fishing enterprises.
The industry around the world has heard the lament from P.E.I. processors of an exorbitant inventory on hand this winter, mostly in the form of so-called “popsicle packs” and whole cooked. Some estimates were as high as $25 million worth of inventory. The results, of course, were to be expected. Wholesalers and brokers simply stopped buying, awaiting fire-sale prices.
While the PEIFA does not have access to processors' figures, we do have solid industry intelligence that tells us that inventory on hand is much less than the $25 million mentioned in the media and is gradually being moved. Nonetheless, this winter's situation raises a number of serious questions for us with regard to the processing industry. For example, what is the standard amount of inventory on hand during the winter months in most years? Does government or an independent third party have access to regular reports on the amounts of inventory held by processors? What is the formula for valuing inventory? What is the marketing and sales strategy employed by the processing sector? What efforts are being undertaken in terms of new product development? What is the business model used by individual processors? Most importantly, why has there been a consolidation of processing facilities in both Prince Edward Island and New Brunswick?
We ask these questions because things are being asked of us. We are being asked, when we do not know what the processing sector is doing for itself. We have been asked, for example, to consider a reduction in fishing days early in the season. We have been asked to consider rotating buying days at wharves. We have been asked to limit landings in the event of a harvesting glut. We have been asked to support processors' requests for government credit guarantees. These things and more have been asked without mention of security or guarantees for harvesters themselves.
Fishing is an industry of tradition. Lobster fishing is a competitive fishery. Harvesters fish the same area year after year. Most use techniques they have developed over the course of their years on the water. Most continue to sell to a buyer with whom they have had a long-lasting relationship, a buyer who provides bait and supplies and who purchases lobster. In the past two years, these traditions have been challenged. Processing plants have been closed. Commissioned buyers are being eliminated. DFO has recommended resource management proposals that have caused concern and confusion amongst fishermen--of course, all within the continuing litany of concern over the economic and financial situation we face.
Fish harvesters are economically dependent upon the processing sector. There is no regulatory regime that establishes the price to be paid to fishermen for their catch. Traditionally, the harvesting sector relied upon the inherent competition between buyers wanting to purchase lobster. Now that competition is being eliminated with the aid of government decision-making, and fishermen are feeling the brunt as shore prices fall and input costs rise.
Lobster harvesters recognize that change in their industry may be inevitable, but to adjust to that change willingly, fishermen demand a certain level of participation and protection. For example, Island lobster harvesters have long called for a licence rationalization program that would see the permanent retirement of licences from the fishery. For two brief years in 2004 and 2005, LFA 25, using funds from the sale of a snow crab quota, was able to permanently retire nine lobster licences and shelve a number of others for one year at a time.
Unfortunately, court rulings prevented any further action along this front. Since then, Island fishers have been requesting government support and most recently have entered into discussions with federal and provincial authorities to develop a rationalization process, with contributions from the two levels of government and the industry.
If agreement is reached, we hope to see a process whereby primarily older fishermen will be able to exit the industry with dignity, those who remain will see improved access to a stable resource, and there will be specific assistance to younger entrants seeking to enter the fishery. We are also examining broader issues of eco-labelling, having gone through a Marine Stewardship Council pre-assessment, and the ocean-to-plate concept of harvesting for the market. These are long-term considerations that require time and discussion to determine.
Short-term concerns, though, face us immediately. The harvesting sector is receiving mixed messages from the processing sector. Some processors say the situation is enormously difficult, while others state that the 2009 season will be similar to previous years. Confusion and fear are rampant.
If we are to assume that shore prices will be lower this year, what will be the effects?
First, since most harvesters hire two helpers, one of them will not be hired. What does that person do to survive?
Second, given the competitive nature of the lobster fishery, harvesters will necessarily increase fishing pressure on the stock in order to earn as much as possible in the short two-month season. This could have devastating effects on future lobster stocks in the region.
Third, as the incomes referred to previously become even lower, many fishermen will be forced into bankruptcy, forfeiting not only their fishing enterprise, but also homes, property, and investments they have already borrowed against simply to make ends meet.
The only protection against possible economic disaster in the lobster fishery this year is government intervention. PEIFA submitted recommendations for inclusion in the recent federal budget, including: establishment of a stabilization fund for harvesters; financial support for rationalization; policy initiatives to ease access to credit for fish harvesters; funding support to a national agency to promote seafood marketing, eco-labelling, and ocean-to-plate initiatives; reduction in certain fees such as those for licences and observers; tax reductions for the application of green technologies to fishing enterprises; improved science, research, and enforcement of small craft harbour programs by DFO; improved training assistance for fish harvesters; and encouragement to the provinces to initiate or improve Fisheries Loan Board agencies and programs.
In all of this we have seen a short-term marketing effort introduced, funding to small craft harbours, and hopefully, easing of credit restrictions by private lenders. However, there was nothing included in the budget that would ease the effects of a serious decline in the 2009 season.
An immediate problem to be faced by captains and crews in the event of low prices will be eligibility for unemployment insurance.
An immediate problem to be faced by captains and crews in the event of low prices will be eligibility for unemployment insurance. The system, where implemented, whereby a captain could qualify for EI based upon 2008 landings, could be eased. First, with the certainty of EI the captain would not place additional pressure on the stock, thereby contributing to conservation, and helpers would be able to fish the full season being paid from landings and therefore qualify for their own EI support.
Fuel is a major input cost. In 2008 we saw the cost of fuel reach staggering prices, and there is nothing in place to prevent a recurrence. Canada's primary industries must have a mechanism in place to protect primary producers from sudden and enormous increases in fuel costs.
Another major concern is the cost of bait, primarily herring for the lobster fishery. The spring herring fishery is on the verge of being closed by DFO, this while adjustments were being made to the harvesting plans of the large purse seine fleet in the Gulf of St. Lawrence, allowing them to land smaller fish, with changes to the small fish protocol that see this fleet landing ever larger percentages of spring component in the fall purse seine fishery. Without a spring herring fishery, frozen bait must be purchased from off-Island corporations at exorbitant prices, adding to the cost of operation. Immediate steps must be taken to limit the destruction of the purse seine fleet on herring stocks in the southern gulf.
We have seen and heard much of the stimulus approach taken by governments around the world to fight the present recession. Incentives should be in place to encourage fish harvesters to purchase needed equipment from local suppliers. If fishermen stop purchasing needed equipment, not only do local economies suffer, but it also leads to a growing threat to safety at sea for vessels and fishermen alike.
The Province of Nova Scotia has recently enhanced its fishermen's loan board service to assist new entrants in the fishery. The development of a regional fisheries loan agency, supported by both provincial and federal governments, dealing only with the fishing industry, could easily be designed to ease the restrictions imposed by private lenders and to adjust to changes in the industry on a year-by-year basis.
Specific to Prince Edward Island, the harvesting community is united in its position that the so-called Ocean Choice agreement be annulled. While this is purely a provincial matter, the agreement limits competition and reduces processing capacity, with the consequent effects on the harvesting community. The moral pressure that can be applied by this committee to the province can only assist in seeing this agreement revoked.
In closing, we thank you, Mr. Chairman and members of the standing committee, for the opportunity to address you. We look forward to taking any questions you might have.
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Basically they changed because the federal government threw some money into the pot, for starters, but the money for this group from each province that is studying the market has run out. They're out of money already. They had to spend it by the end of March.
I think they did some good things. I saw some of the work they did in the short period of time they were at it, and they were on the right track. For this coming season, I don't think it's going to serve much of a purpose. For the long term, I don't know if that type of a marketing board is what we need, but we need something that is going to change the whole scope of where they're being marketed.
Obviously there's something wrong with the marketing system right now. My question is what is being done to improve it? It's easy to stay with an old way, but the old way isn't working anymore.
I'll give you an example. A group from Nova Scotia, in this marketing study, went to Alberta. They went to a supermarket that had live market lobsters in the tank. They filmed it, and it showed a housewife going by with her kid who wanted to put his hand in the water. The mother hauled the kid's hand back out of the water, but it was like they were travelling through the zoo. They were looking at these lobsters, and they were interesting and everything, but it was as though the mother was saying let's move on, because we have to go get some Kraft Dinner now. What they realized from it, after they started to interview some of these people, was that people were saying, “I hear lobsters are really good, but I have no idea how to even cook them.”
What came out of the study was simply that they needed a monitor there with a film showing how to actually cook the lobster. They needed a pot somewhere handy that the person could buy to actually cook the lobster in, and maybe a bit of salt, and it might pick up from there.
It's just as one person said--how many people here know how to cook possum?
The other thing is that out there in the world right now is this desire not to touch an animal that's alive. There are groups that are against killing cows, against killing sheep or whatever, and there always will be, but scientists have told us--and I want to make sure that this is good and clear--that they have done studies on lobster, and when you put a lobster in boiling water, it is for a fraction of a second that it actually might even feel anything because it's goes brain-dead instantly when it hits the boiling water, so therefore there is no pain involved for the lobster.
Mark Bonnell and Lorne Bonnell are here representing Mariner Seafoods. This presentation is by Olin Gregan, who is the executive director of the P.E.I. Seafood Processors Association and who is stuck in Halifax due to bad weather.
I would like to thank the committee for the opportunity to present a narrative on behalf of the P.E.I. Seafood Processors Association.
As an association, we represent 90% of the lobster processing capacity on the island, both mussel and oyster growers and crab processing.
Undeniably we have the opportunity to be operating our businesses amid some of the most beautiful and fertile lands in the world and with the view of some of the richest and most bountiful pristine waters known within the seafood industry.
I am a firm believer that the commercial fishery has three distinct partners: harvesters, processors, and both levels of government. Through this presentation my comments should in no way be interpreted as speaking for our other industry partners, except in passing reference or with respect to a direct impact on our business.
Also through this paper, do not misconstrue any thoughts or sentences as a pointing of fingers, because there is much blame to go around, so we must just accept the share and move toward trying to better the industry as seamlessly as possible.
Commercially on the Island we have every species of fish, from smelt to tuna, crossing our docks through the ice-free months of the year. When fisheries are unfolding and ongoing in our coastal communities, there is the unmistakable look and feel of community pride, involvement, and prosperity, with all the people seemingly in some type of a hurry because of the varying needs of the local catches and the noise of vessel engines at dockside that are sometimes drowned out by the squealing of tires from the new half-tons--the sounds and signs of another lobster, herring, or crab season.
This industry of more than a century has managed to spin off hundreds of millions of dollars to the coffers of the federal, provincial, and municipal governments of the day, and it has created ways of lives and livings that are interwoven into the Island fabric.
But these positive indicators are now becoming shallow looks, feels, and sounds. Our lobster industry is broken, and it certainly needs to be revived to the levels that it has known and enjoyed in previous times.
As industry partners, we must develop a vehicle to dialogue properly, establish new...and re-establish with others the trust factor that is necessary and evident in any successful partnership.
Our lobster fishery is arguably the most valuable fishery in Canada. It is a billion-dollar industry in Atlantic Canada, and in many areas and communities of P.E.I. the seafood sector is the economic engine and the community lubricant. This can't be lost sight of.
We have not paid nor given this fishery the focus and attention it has deserved, and now we are and will be paying a big price for industry complacency. This is a core industry to P.E.I. and Atlantic Canada and it is not going anywhere.
No one person nor company can pick this up and move it west. We now must bring the fishery into the new millennium. We have many new ideas on the local, national, and international front and many new demands and regulations, buzz words, and acronyms within which to operate or be shut down. The costs that are now being downloaded and attributed to our members, such as monitoring, electronic data-inputting, eco-labelling, traceability, catch certificates, and the MSC, will ultimately bankrupt our industry without proper focus, without proper implementation of such, and without a well-thought-out cost-recovery regime.
We have the Canadian dollar that tortures us steadily with its movement, making it nigh impossible to predict yet another impact on our business. This is coupled with the economic snowstorm that nobody really understands or knows how to wrestle to the ground.
We are now in the unenviable position of 30 days away from the opening of the Cadillac shellfish industry in the country with the operational moneys needed for a Lada.
The seafood industry is not the only industry that is being looked at with jaundiced eyes by the lending institutions, but we are and will be feeling the brunt of their belt-tightening decisions around the advancement of funds and credit lines.
Fishers are fearing prices at break-even levels. We hope this does not come to pass. In fact, we are telling our clients that our fishers and our businesses cannot continue under such strain, frustration, and anxiety.
As a processing sector, we have a myriad of meetings, internally as well as with both levels of government, to discuss and share ideas. But in 2009—30 days from the beginning—the fishery will begin with much uncertainty. Our employees are expecting the same employment opportunities as in previous years, and this is what we are expecting to provide. Without this continuity in our operations, our facilities are doomed to failure and closures. Unfortunately, there is a whole industry, as we know it, in peril.
Difficult times such as these can and may show us a new direction. We must design a strategy to deal with stagnant inventory and cashflow challenges. Along with our basic product forms, we must start to develop new products. We need new market research studies. We need new marketing and product promotion initiatives. Conceptually, nothing I have said here is new, but to an industry that has not had a new commercially viable product introduced since the lobster popsicle 25 years ago, these are very new ideas to be discussing and then trying to implement.
This is the time for the industry to pause, discuss, understand, and hopefully agree on the need for proper change; the need for understanding our clients' and customers' wants, needs, and wishes; the design of a fishing plan that understands and addresses those wants, needs, and wishes through new marketing and merchandising campaigns; the design of a plan that allows for product development to satisfy societal changes; and the design of a plan that allows for technological change and advancement.
As an association, we have just recently introduced to our members, as well as some select government people, a concept paper with some strategic initiatives to try to revitalize the lobster industry. At best, after discussions and rewrites, it will be at least a three-year to five-year plan. But it must be done. Change usually requires time, and most are averse to change, so there is a nurturing process to endure.
At times such as these, we must look to governments for both monetary and directional assistance with the changes that need to be introduced. There must be tough decisions made that will probably cost a vote, either land-based or water-based, but political fisheries have no place in the economy we now find ourselves playing in. The reality is that the vote is the biggest hurdle to overcome, as the fishery always has been a very valuable political tool in all levels, as the 200-mile limit has shown us time after time.
As processors, we must do a better job in our facilities. We must revisit and invest in our commitment to quality. We must have better dialogue and discussions with the harvesters who are bringing us the raw materials. It is essential that they not feel alienated from what is happening to their catches and that they feel part of the highway to market. We must have better dialogue with DFO officials. We must present our cases and points of view better through the advisory committee process. We must stop testing the tried and true method for business failure by paying the most and selling for the least. We simply must implement and adhere to good business practices. We must decide it is okay to make money.
There are other Island seafood processors, such as the mussel processors, who are operating without much fanfare, but certainly their operations are diamonds in the rough. Left to their own devices for the most part, they have developed this aquaculture fishery to levels that now represent $67 million and 80% of the mussel growers and processed mussels in North America. They have achieved these levels of growth and process in a short 30 years, levels that have not been achieved by other areas such as Europe and New Zealand in more than 100 years of operation.
Forty million pounds of mussels require a lot of support material, packaging, services, and variable spinoffs in many communities throughout the Island. These facilities provide many Islanders the opportunity to work within their home communities through the year, as well as allowing their $10 million to $12 million payroll to be injected into the communities. Young Islanders see this part of the seafood industry now as something they can identify with, as the industry is young, growing methodically, and certainly sustainable.
As of late, this part of the industry has also been taking advantage of NRC, the PEI Atlantic Shrimp Corporation and the processing association to develop projects that are vital to the industry with respect to health claims and omega-3s. All of this looks very positive for the aquaculture side of our association.
In closing, it is absolutely critical that we design a new strategy. We must develop trust so that discussions have meaning and merit, as opposed to disdain and malcontent. This may suggest a liaison of neutrality between the partners that have the wherewithal to cut through the chaff and the smoke and then suggest the path.
Again, the Prince Edward Island Seafood Processors Association and I thank you for this opportunity.
:
First, I'd just like to thank the standing committee for the opportunity to make a brief presentation here. Mrs. Lockhart called me yesterday. Last week, I was in Saint John, New Brunswick. I was in Halifax yesterday.
I was asked if I was willing to put something together to make a presentation to the standing committee on the crisis the fishery is in today. I thank you for that opportunity. I'd like to explain a little bit about our situation here.
The presentation in your agenda would be on behalf of the lobster fishing area 24. Mr. Morrissey, my friend and colleague here, is chairman of that area. I represent 250 lobster fishermen in that area in the northern end of P.E.I., and I'm just going to make a brief presentation and then pass it on to Mr. Morrissey and he can make his. Then we'll both be here to answer the questions of the committee.
Again, I'd like to start off by thanking the Standing Committee on Fisheries and Oceans for giving me an opportunity to speak on behalf of the Western Gulf Fishermen's Association. First, I'll tell you a little about our association. The Western Gulf Fishermen's Association represents 250 fishermen who fish off the northwest shores of Prince Edward Island, LFA 24. The Western Gulf Fishermen's Association represents each fisherman on marine fishery issues and provides information on new regulations and training requirements issued by Transport Canada. The Western Gulf Fishermen's Association is continually working on projects to make fishing more sustainable for our members.
I'm speaking here today on the lobster fishery. On the conservation side, our association began a study on the impact of bar clam dragging on lobster habitat. We also had in place a proposal to look at the effects of scallop dragging and moss raking on lobster habitat. We had funding in place and were working on the scallop dragging study when we had to stop because the DFO withdrew from the project with no clear reason provided. Our association has organized numerous dragging operations, which were performed by our own fishermen at their own expense to look for illegal lobster traps. Every year, our fishermen pay DFO for additional protection out of our own pockets. For conservation reasons, our fishermen chose not to fish lobster on Sunday.
On the marketing side, because of the downturn in the economy and the projected low prices, this season we have asked both the federal and provincial governments to put in place financial credit guaranteed for both brokers and processors. This will enable to them to purchase lobster and market them in an orderly fashion. With proper credit in place, hopefully this will provide better returns for our fishermen.
The Western Gulf Fishermen's Association is in the process of doing a feasibility study on the freezer and cold storage facility. We would also like to have a live lobster holding facility attached to this facility. On a final note, I would like to present to the standing committee a letter I recently sent to the federal fisheries minister, Gail Shea, requesting a lobster licence transfer freeze within the fishing area we represent.
:
Thank you. I am the lobster chairman of area 24, which represents the lobster fishing district area 24, and on behalf of the fishermen, I have a short presentation to make to you.
We have titled our presentation “A Plea”, because as fishers we cannot move forward without the support of Fisheries and Oceans Canada, the federal government, and even our provincial government. We must now take the steps necessary to protect the long-term sustainability and viability of the important lobster fishery.
I am not going to repeat the various economic statistics relevant to the lobster fishery here on P.E.I. They are well documented and readily available to your committee. I will, however, focus on our current challenges and the assistance we are seeking to navigate around these challenges. The lobster fishery is at a crossroads, facing a crisis. The solution is out of reach of fishers alone. We need your help.
This is indeed an extraordinary time, a time where the industry, as represented by fishers, has reached the planning stage for the sustainability of their own industry that is ahead of government bureaucrats and newly elected politicians.
During the recent federal election, candidates for the federal Conservative and Liberal parties all promised support for a licence buyback program, a rationalization, but the election is now over, and as usual, the government's line is now not a penny for licence buyback programs. Where do we go now? This is our plea.
The lobster fishery of P.E.I. is as important as the auto industry is to Ontario or as the oil and gas industry is to Alberta. It is one of the few natural resources we have.
Now to solutions, with a price attached. The top priority for the long-term viability and sustainability of the P.E.I. lobster fishery is the development of a funding formula that will allow for the orderly retirement of lobster fishing licences over a period of time.
As an industry, our fishers are prepared to pay our share through premiums attached to renewal of lobster licences. We are calling for the federal government to provide non-interest-bearing loans to be made available to those LFAs that want to participate. Repayments can be made from the proceeds of various stock allocations as well as from premiums attached to the renewal of lobster licences. The federal government controls both these sources of possible repayment funds.
As an example, the federal government has used the Canadian account to provide various sectors with related loans for troubled industries, with up to a 55-year repayment schedule at zero per cent interest. Given this account's maximum flexibility, it could be but one of many financial tools available to the federal government to fund the licence buyback program if the political will was there.
The lobster processing industry will not escape the current credit crisis. The lack of credit for processing plants and brokers will have a negative impact on the prices fishers receive for their catch, maritime-wide.
Government must make available credit options for our industry similar to what the government is providing other sectors of the Canadian economy.
On a long-term basis, government must allocate more funding for research and development of more consumer-appealing packaging and products and an investment in technology required to process these lobster products. In many rural communities the largest employers are our seafood processing plants.
At this time I would like to thank you for coming to P.E.I. and giving fishers an opportunity to voice their concerns. I will try to answer any questions you ask. Thank you very much.
:
Mr. Kerr was wondering about money that was put into the marketing end. I want to be clear that I'm happy to hear about any money that comes in to help market our lobster and get me a better price. I'm not condemning it. But at the end of the day, the $450,000 somebody mentioned here earlier--I think it was Mr. Bonnell, about some brochures at the Boston Seafood Show and a cassette or CD with some filming--is good, but it's the tip of the iceberg of what we need to get this thing going again.
I took the liberty of bringing the brochure. It's very pretty. I'll pass it around if everybody wants to have a look at it. There's the folder and the brochure. I haven't got the cassette with me. The money was issued a month ago, and it had to be spent by the 31st of March. It's spent. It doesn't take much to spend $450,000 today. We're looking for between $3 million and $5 million right now to try to get this thing kick-started again.
I'm going to turn it over to Mr. Morrissey in a minute, because he's speaking on behalf of fishermen on the rationalization side for our area. But on financing, I pointed out in my presentation that we support processors. The processors and brokers haven't got financing in place. They're no different from the auto industry. They're going to be shutting down. There are hardly any of them left now.
There are ways to slow down the fishery, but there are so many lobsters there. Fewer traps in the water may help to slow the catch down, but at the end of the day we're probably going to catch just as many lobster. We're quite efficient in our business. Like I said, we need financing for the processors and brokers so they can buy and move their product in an orderly fashion.
We're like anybody else. I spoke about this with the provincial government. Everybody knew last fall, when lobster was $3.25 a pound, that things were going to be tight this spring. So don't wait until next April when I'm trying to fill out my income tax return. I had a tough year last year, at $4.50 a pound. I mean, we lost $30,000 in our income. Fuel and bait and everything was up 35% to 40%.
Take a proactive approach today. Before the end of the season, put something in place so we have a share of some of this money coming down. We're as important here in Atlantic Canada as the oil and gas industry in Alberta and the auto industry in Ontario. We could use help as well.
Fishermen are people with a lot of dignity. They're probably right at the bottom of their credit lines and everything else, and they're not going to come out begging. That's what we do on their behalf. If we can put something in place before the end of our lobster season and before area 25 starts in August, it would be greatly appreciated.
Like I said, on the rationalization side, I'll pass it over to Mr. Morrissey. He's the area 24 rep, and he's working on the rationalization plan for the whole area.
Unless Lawrence has something else....
:
From the information I receive out of Florida, from talking to a few individuals down there, the price is probably on par with last year.
Actually, in our own operation at home, we're receiving more money right today for a pound of lobster meat or a pound of raw tails than what we received last year, even though the price in the marketplace is down. That's because the fishing industry lives and dies on the exchange rate. Basically, product that was selling for $16 a pound last year would be returning back to the plant, when the dollar was on par--$16 a pound. The same product would be selling right now for $14 U.S. a pound but returning to the plant about $17.25 a pound.
The important thing for the fishery, for us to get out of this crisis, is for the processors and the brokers to have a larger line of credit. I'm not a processor, but I know where Mr. Bonnell is coming from on this. If they all could have enough line of credit this year to be able to buy the product, process it, keep the people working in the plant, and sell it out in an orderly fashion, within 14 months to 16 months we'd all gradually start to get out of this mess we are in.
If they don't have a line of credit large enough to be able to operate this year, what's going to happen is that either boats will be tied to the wharves--in other words, once the plant has no more money, it can't purchase any more lobster, which means the workers have gone home, which means the crew on my vessel has gone home too--or else someone will start dumping product onto the market at an unrealistically low price. When we hit that, we're all doomed. It's a crisis then.
How are these processing plants going to get the line of credit? Provincially they can't do anything, but federally? Maybe you fellows could help. Basically, they'd be asking for someone to guarantee the line of credit they'd be getting from the bank or credit union facility.