Another one bites the dust?
The future of the Freshwater Fish Marketing Corporation looks bleak
The debate on the importance of Crown corporations reached epic proportions this fall with the dismantling of the Canadian Wheat Board (CWB), which was a Crown corporation until 1998.
Another Crown corporation based in Winnipeg, the Freshwater Fish Marketing Corporation (FFMC), is mirroring the CWB’s troubles.
Discussions about the CWB and the FFMC are similar in that both involve the question of whether a marketing board provides the best price for producers.
Where they differ is the CWB was financially independent of the government and thus its existence decision was up to the farmers (or not, depending on which vote you stand by), whereas the FFMC will no longer be economically self-sustaining without a federal cash injection.
To give a little background, the FFMC is a Crown corporation that is responsible for the interprovincial and international marketing and processing of all freshwater fish legally caught in Manitoba, Saskatchewan, Alberta, the Northwest Territories and part of northwestern Ontario.
Since 1969, the FFMC has purchased fish and returned profits to licensed commercial fishers, who currently number over 2,000.
Last year, the FFMC sold $66.8 million worth of fish, 84 per cent of which was exported, and returned a combined payment of purchases and dividends of $25.1 million to fishers.
The FFMC also employs approximately 150 processing staff and 50 administration staff.
The FFMC is consistent in returning profits back to commercial fishers, but neglected to set aside funds for future expansion. They recently asked the federal government for a cash injection to upgrade the Transcona processing plant, and to retire debt.
The request for federal capital brings immediacy to the FFMC discussion.
Supporters, like the Commercial Fishers Orderly Marketers Association (CFOMA), argue that the FFMC brings price stability, upfront cash, storage capacity, processing capabilities, marketing expertise and market clout, which are essential to the survival of the freshwater commercial fishery.
Thus, they support asking for federal cash to fund the processing upgrade.
Bill Buckles, media officer for CFOMA, wrote in 2011 that “CFOMA is disappointed that the fishers themselves may need to pay for these upgrades entirely from their fish profits at a time of reduced profits. CFOMA’s goal is to sustain the fishers by standing behind FFMC.”
The reasons for the reduced purchases and returns to fishers, at a time when costs such as fuel are increasing, are a point of contention.
The FFMC points to the rise of the Canadian dollar and a glut in certain fish markets as the causes for decreased returns in 2011. Critics argue that the FFMC needs a better management structure and believe fishers could receive a better price if they were to process and market the fish themselves.
Another challenge for the FFMC is that the Northwest Territories, Saskatchewan and northern Ontario are either considering or planning to opt out, leaving only Manitoba and a sliver of Alberta under the FFMC mandate.
Therefore, both sides of the debate believe that the survival of the commercial fishery is dependent on either the demise or the strengthening of the FFMC.
However, I wonder whether, with or without the FMCC, the commercial fishery can survive in Western Canada in its current size.
James Bezan, MP Selkirk-Interlake, counters this pessimism and believes even without the FFMC, “lots of opportunities will continue to exist for commercial fishers in Manitoba,” and notes that there have been expressions of interest from the private sector and international markets.
I agree that there continues to be a robust market for fresh fish, but I see significant challenges.
The fate of the FFMC highlights the difficulty of northern economic development.
The sheer geographic size of the FFMC’s mandate and the distances between facilities make transportation and storage expensive. The transportation costs combined with other capital costs make fishers, like many farmers, work harder and harder chasing slimmer and slimmer margins.
Therefore, it is possible, though not inevitable, that neither marketing boards nor the free market can significantly mitigate a potential workforce reduction in the primary fishing industry.
Lucas Redekop is a mature student at the University of Winnipeg with an interest in civic discourse. He lives in West Broadway.
Published in Volume 66, Number 17 of The Uniter (January 25, 2012)