Ottawa Update March, 2005 Edition

Building a Fishery That Works

What's Happening at the FCC

Cooked & Peeled Shrimp: European Union

With the 7,000 mt 6% cooked and peeled shrimp tariff quota being fully utilized by mid- July in 2004 and mid-January in 2005, expansion of the quota is a high priority for the FCC. Work began in July 2004 to form a coalition of like-minded European associations to pressure their governments and subsequently the European Commission to expand the quota for 2005 and 2006. The coalition of like-minded associations was formed to include the UK association, two Danish associations and the Swedish association.

The FCC met with the associations in Brussels on February 21. The group subsequently met with the European Commission (EC) later in the day. The group presented the Commission with a detailed supply/demand prospectus calling for a quota of 22,000mt for 2005 and 2006. The EC indicated they would be guided by the letters they have received from the Danish government which calls for a 14,000mt quota in 2005 and 2006.

Following the meeting, the UK and Swedish associations and one of the Danish associations undertook to meet with their governments to encourage them to push for a 22,000mt quota.

The EC will be presenting an expanded quota package to its Management Committee on March 16 for a decision.

Endangered Species: Cod/Cusk

In early February, FCC’s Oceans Use/Endangered Species Committee along with Earl McCurdy, representing the Canadian Council of Professional Fish Harvesters (CCPFH), met with Environment Minister Dion and Fisheries Minister Regan to outline our joint concerns regarding the endangered species legislation, COSEWIC, and the proposed listing of Atlantic cod and cusk.
Main talking points were:

· Commercial fish species are managed and protected under the Fisheries Act. COSEWIC should concern itself with aquatic species not managed by DFO.

· COSEWIC needs to develop endangered species criteria that are right for marine species.

· COSEWIC needs to develop operational guidelines and procedures that are comparable to a federal science department.

· FCC and CCPFH are concerned regarding the impact on DFO science resources and the time commitments of industry responding to COSEWIC’s aggressive investigation campaign.

· Presentations demonstrating that there is no need to list the Atlantic cod and cusk populations proposed by COSEWIC.

Employment Insurance

With the “banking of hours” charges filed against 9 plants in SE New Brunswick, the FCC has been working with HRSD Canada to see if changes could be made to the EI regime that would reduce the disincentive for plant workers to work in the plants when the plants cannot provide a full work week because of shortages of raw material. An early response to our interventions was an amendment of the “small weeks” threshold from $150 to $225.

However, a continuing problem is the EI benefit calculation formula that is calculated on workers average weekly earnings over the last 26 weeks of work prior to claiming EI benefits. Often workers would receive high weekly earnings in the early part of the production season in April, May, and June. However, the worker jeopardized losing those high value work weeks as production extended into the months of October, November, and December replaced in the benefit calculation by low value part week earnings. As such, there is considerable pressure to “bank hours” by both workers and plant operators. To address these circumstances, The FCC argued that the calculation period should be for the past 52 weeks or the full production season of the plant.

Minister Robillard recently introduced changes to address the above problem. The government has established a 3-year pilot project in areas where the unemployment rate is 10% or more. For these regions, the EI benefits will be calculated on the workers best 14 weeks of earnings during the previous 52 weeks preceding the claim or since the beginning of the last claim which ever is shorter. In addition, a worker in the pilot project regions can now come into work while receiving EI benefits and earn the greater of $75 or 40% of their weekly EI benefit.

In other regions, the limit remains the greater of $50 or 25% of their EI benefit. It would appear these changes should alleviate some of the difficulties plants have been experiencing regarding the “short week” problem.

R&D Tax Credits

The 2005 Federal Budget extends the research and experimental development incentives to include expenditures for R & D work throughout Canada’s Exclusive Economic Zone (EEZ) effective February 23. Previously, the R &D incentives were available only for work done within Canada’s 12-mile territorial sea.

The FCC has been requesting this change for a number of years.

Membership/ By-laws

An FCC working group met in Ottawa in early February to (i) develop a recommended approach regarding membership fees and governance participation for the sector/special purpose membership category; and (ii) review the by-laws and recommend up-dating changes where warranted.

The Board of Directors at its meeting on March 22 will consider the report of the working group.

March – Key Meetings

NAFO consultation meeting, Halifax. DFO, industry, provincial governments meeting to continue preparations for the September NAFO meeting.

FAO, Committee on Fisheries, Rome, Italy. FCC will be head of the delegation representing the International Coalition of Fisheries Association (ICFA).

Boston Seafood Show, Boston. FCC will co-moderate the Industry Roundtable Breakfast.

United Nations, New York. FCC will be part of an ICFA delegation tabling concerns regarding the biased, unbalanced approach in 2004 of the UN’s Biodiversity Conference and the Law of the Sea Office regarding bottom trawling.

Board of Directors meeting, Ottawa. Includes a reception and dinner with the Fisheries Minister and senior DFO officials.

Market Reports

Traceability: UK Retailer Tesco Faces RFID Boycott

UK – based retail chain Tesco could become a target of a worldwide boycott if a US consumer group gets it way. Tesco is undergoing limited trials of its radio frequency identification chip (RFID) traceability technology on high value items. RFID helps retailers trace products back to their source of origin through the use of microchip tags.

However, Consumers Against Supermarket Privacy Invasion and Numbering have dubbed them “spy chips” because they fear the chips will be used after the product leaves the supermarket to invade public privacy.

Wal-Mart, the world’s largest retailer, insists that its suppliers provide them only with RFID-traceable products.

Organic Seafood: USA

The US is slowly inching its way towards establishing federal standards for organic seafood. An aquatic animal task force is being formed to develop proposed production, handling, and labelling standards for both wild and farmed seafood. The aim is the task force to complete its work in the fall of 2005.

Bering Sea Crab

Japanese trade reports that this year's opilio from the Bering Sea fishery is generally large, and most of the crab is "clean" (no barnacles, etc). As a result, about 90% of the crab is reportedly No.1 product. Virtually none of the opilio was frozen fresh, with most of the bulk crab boil/frozen. Some early sampling by the Japanese buyers, however, indicates that the meat fill in as much as 60% of the crab is about 1.5% lower than last year. The Japanese buyers paid about $4.60 US/lb for opilio packed in 40 to 45 lb cartons, and a slightly lower $4.55 US/lb for 60 lb packs.

Japanese Fisheries Imports

SPECIES20032004
mtU$ / lbmtU$ / lb
Frozen
   Pacific Sockeye47,546$2.0851525$2.17
   Pacific Coho57,863$1.8777102$1.49
   Herring47,913$0.5439536$0.54
   Mackerel128,269$0.65101011$0.87
   Capelin19,809$0.9718.495$1.12
   Herring Roe5,326$2.623830$2.42
Salted
   Herring Roe8,573$6.128168$5.55
Frozen Shellfish
   Lobster861$10.111215$10.20
   Shrimp/Prawns233,251$4.07241445$3.92
   Scallops406$4.26493$3.85
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