OECD Observer
Fisheries: The lessons of the Grand Banks

After environmental and economic turbulence, Canada’s fisheries are being reformed. The sector is now undergoing a renaissance, though challenges remain.

The Grand Banks of Newfoundland provided a stable livelihood to island residents for five centuries, making Canada one of the world’s leading fishing economies. By the end of the 20th century, however, the great shoals of cod, which had enriched fishers from round the world, all but vanished from the Grand Banks. As stocks dwindled across the North Atlantic, there were fears that overfishing might drive cod to extinction.

On 2 July 1992, the Canadian federal government took action by imposing a moratorium on cod fishing. This led to the singlelargest mass layoff in Canadian history, affecting not only fishers, but employees in processing plants, the wholesale and retail trades and boat construction. Over the next decade, some Newfoundland communities shrank considerably as residents left to seek work in other provinces.

Atlantic Canada’s fishing industry was shaken, as were the fishing sectors in other OECD countries. But overfishing of cod had to be stopped. And although a recreational and artisanal fishery now exists on the Grand Banks, with stocks of about 5,500 tonnes, the moratorium on commercial cod fishing remains.

But as the cod declined, shrimp and crab flourished, and cod fishers have turned to exploit these species. The OECD estimated that, between 1989 and 1992, the total value of fish landings, including cod, in Newfoundland was about CAN$275 million per year. Fifteen years later, it climbed to CAN$470 million. After adjusting for changes in Canada’s consumer price index, which rose about 40% from 1990 to 2006, the value of fish landings was 20% higher than when cod was king.

Atlantic shrimp, crab and lobster belong to the “luxury” category of seafood, the main buyers of which are restaurants, hotels, vacation resorts and casinos around the world. Shellfish alone accounted for over 63% of the value of the Canadian commercial fishery in 2009.

Unfortunately, the latest economic crisis did not spare shellfish. From 2007 to 2009, the retail price for lobster fell 50% and snow crab 20%. Prices for other species fared no better; for example, cod harvests lost 47% of their value. The situation was aggravated by the stronger Canadian dollar which lowered margins of exports priced in US dollars (the US is the largest importer of Canadian seafood). The low cost of production from competitors, notably in Asia, helped to keep prices flat.

As part of a broader economic stimulus package, the federal government responded with CAN$75 million worth of direct measures, of which CAN$50 million went to developing means to assure the sustainability of lobster production, Canada’s highest value fishery. Provincial governments also came to the rescue, injecting over CAN$4 million in sustainability and aquaculture projects. Yet even before the crisis, the government was intent on rejuvenating the industry. In 2006, Canada’s Department of Fisheries and Oceans (DFO) began updating its Fisheries Act, which first came into force over a century ago. Renewal initiatives are now in place to update fisheries management policies, and to give fishers greater freedom and management responsibilities.

Along with the updated law, the government created the Sustainable Fisheries Framework, a body of precautionary measures to protect ecosystems in the management of Canadian fisheries. The framework comprises reference points and stock status zones (“healthy”, “cautious” and “critical”), harvest strategies and procedures for decision making, while taking uncertainty and risk into account.

“Canada’s Sustainable Fisheries Framework provides the basis for ensuring Canadian fisheries are conducted in a manner that supports conservation and sustainable use,” says Nadia Bouffard, Director General for Fisheries and Aboriginal Policy in the DFO. “Combined with reforms to socio-economic policies and initiatives, the Sustainable Fisheries Framework is a key instrument in developing environmentally sustainable fisheries that also support economic prosperity in the industry and fishing communities.”

The awareness that marine habitats and biodiversity are critical to sustainable fisheries prompted the federal government to designate seven Marine Protected Areas (MPAs), including the Bowie Seamount, an undersea volcano in the northwest Pacific described by the DFO as an “oasis” of biological diversity. Under the recent Health of the Oceans agenda, a battery of 22 environmental and scientific initiatives will add nine more MPAs by 2015, and strengthen international cooperation in the Gulf of Maine and the Arctic.

Fisheries and Oceans Canada is also developing a national policy on the management of fish caught unintentionally while trawling other species, known as bycatch, and discards, which include bycatch and targeted species caught in excess of quotas. This policy is in line with the codes of conduct and guidelines set down by the Food and Agriculture Organization, and builds on practices already established under the National Plan of Action for Reducing Incidental Catch of Seabirds in Longline Fisheries (NPOA-Seabirds) and the NPOA-Sharks.

International co-operation through organisations such as the OECD is becoming crucial. Seafood products are highly traded, with some 40% worldwide entering international markets. In 2010 Canada exported more than CAN$3.4 billion worth of fish and seafood products, and imported CAN$2.2 billion. Canada has also signed memorandums of understanding with China, Greenland, Norway, Portugal, the Russian Federation and Spain to forge stronger ties in research and economic development, and in the monitoring, control and surveillance of fishing activities.

Canada’s aquaculture industry is also thriving. “Aquaculture production in Canada has more than doubled since 1996,” says Guy Beaupré, Director General for Aquaculture at DFO, “and its value has almost tripled to close to CAN$1 billion a year.” The industry supports some 14,000 jobs. “It is an increasingly important part of the Canadian economy, providing valuable employment opportunities in coastal and rural communities, and contributing to the world’s food supply.”

What about climate change? According to the OECD Fisheries Review, warmer waters in the Arctic are likely to result in a decline of northerly species such as capelin and Greenland halibut. The loss of Arctic cold water species would be a blow to Canadian and global biodiversity, and to the communities that rely on those species. Warmer temperatures, less sea ice cover and more sunlight as a result could boost stocks of cod, pollock, herring and flatfish. Such regime shifts have occurred in the past and can be long-lasting. With foresight, ecofriendly management policies and international co-operation, Canada has cause to be optimistic. The lessons of the Grand Banks will not be forgotten.


See Fisheries and Oceans Canada website at www.dfo-mpo.gc.ca/index-eng.htm

Ma, Paul (2009), “Canada’s Fishing Communities: An Overview of Current Challenges and Opportunities”, presentation made at the OECD Rural Policy Conference, Quebec City, Canada, 13-15 October 2009.

See Newfoundland and Labrador Heritage website at www.heritage.nf.ca/home.html

OECD (2010), Review of Fisheries in OECD Countries 2009: Polices and Summary Statistics.

OECD (2010), “Net losses”, in OECD Observer No. 279, May 2010.

©OECD Observer No 284, Q1 2011