fisheries envoy final report - manitobathe freshwater fish marketing corporation was established...

Fisheries Envoy

Final Report Reporting Period: October 17th, 2016 – March 31st, 2017

Presented by Signature Mediation Gerry Friesen & Perry Mohr

Table of Contents

I. Executive Summary ............................................................................................... 2

Foundation of the Envoy

Background

II. Meeting Summary ................................................................................................. 5

Meeting Locations

Meeting Agenda

Meeting Presentation

General Meeting Observations

Meeting Observations - Fishers

Meeting Observations – Private Sector Investors

III. Research & Development .................................................................................... 13

Identification of new fisheries regulations, policies and systems

Sources

Engagement

Government Meetings

IV. Recommendations ............................................................................................... 23

V. Appendices .......................................................................................................... 27

FISHERIES ENVOY FINAL REPORT – MARCH 2017 2

Executive Summary

The commercial fishing industry in Manitoba is made up of over 1,400 licensed fishers, fishing 300 lakes

across Manitoba that harvest a total quota of 13 million kilograms. A further 900 people are employed by

these fishers and rely on the income these fisheries generate. For the year ending April 30th, 2016, the

industry generated $73,000,000 in sales.

Since 1969, the fishers in Manitoba have been marketing their harvest to the Freshwater Fish Marketing

Corporation (FFMC) in Winnipeg under a single desk selling system as authorized by the Freshwater Fish

Marketing Act (FFMA).

Throughout its history, FFMC has been highly scrutinized through various studies, task forces, and Auditors’

reports. Additionally, fishers have often questioned the viability of the single desk selling system and the

returns they realize through FFMC. For example; in 2016 fishers were paid 45% of gross sales of $73M. As

late as 2000 the fishers received as much as 70% of gross sales.

On August 16th, 2016, the Provincial Government, acting on a campaign promise, announced it had

instructed the Federal Department of Fisheries and Ocean that Manitoba would be withdrawing from the

FFMA.

On October 17th, 2016, the Province engaged the services of a Fisheries Envoy to usher in a smooth

transition to opening marketing. The Envoy was given the mandate of:

Consulting with industry stakeholders to identify important transitional issues and opportunities,

meeting with private sector investors (processing facilities / Co-ops),

identifying new fisheries regulations, policies and systems,

engaging federal government on withdrawal from the Freshwater Fish Marketing Act and FFMC,

meeting provincial government departments,

and, establishing an Eco - Certification / Sustainability strategy.

The Envoy held 23 fisher meetings/consultation sessions throughout the Province and met with over 425

commercial fishers. The Envoy also met with or held teleconferences with various stakeholders including

Processors, prospective fish buyers, Government departmental staff, the Marine Stewardship Council,

SeaChoice, Distributors, Financial institutions and transportation companies. Over the last six months

hundreds of telephone conversations with fishers, industry stakeholders, politicians and consultants have

been recorded.

The Commercial fishing industry in Manitoba is unique in that it covers a significant geographical area,

encompasses numerous lakes, and many communities. Many of these communities rely heavily on the income

the fishers derive from fishing as there is little other economic activity in their areas. A commercial fisher

works hard, at times in less than ideal conditions, and averages less than $20,000 income per license per year.

Throughout the Envoy’s travels, various meetings, and numerous phone calls, it has identified many

opportunities that exist within the industry. For example, many of the fishers in various communities have

organized themselves into Associations or Cooperatives. Through these groups, significant volumes are

available to interested buyers. Further economic spinoffs will occur in these communities as they seek out and

develop business plans. There has been keen interest from various buyers to establish processing

infrastructure in the Province which will contribute further economic spinoffs.


The move to open marketing comes with some inherent risks if not addressed in the initial stages. The

industry is underdeveloped due to its reliance on FFMC for almost 48 years. FFMC either owns or controls

much of the infrastructure. Many fishers have little to no marketing experience and simply want to fish,

harvest their catch, deliver it to a packing shed, get paid and go home. It will be imperative that the province

provide programs and access to capital to help fishers and communities to pursue new markets, processing

facilities, further processing, and niche marketing opportunities

In total, this report includes 19 recommendations to the Government. It is the opinion of the Envoy that the

transition be handled collaboratively by the Federal and Provincial Governments. The industry will need an

adjustment period to adapt to the open market realities.

Foundation of the Envoy

As stated previously, the Provincial Government confirmed its election campaign promise to give

Commercial fishers in the Province the freedom to make their own individual marketing choice by

withdrawing from the Freshwater Fish Marketing Act (FFMA). To facilitate a smooth transition, the Pallister

government assigned a Fisheries Envoy to oversee the process of opting out of the FFMA. On March 15th,

2017, the Government introduced legislation (Bill 23, The Fisheries Amendment Act) that will provide for

flexibility in marketing of fish by commercial fishers in Manitoba through licensed fish dealers, not just the

Freshwater Fish Marketing Corporation (FFMC). The target date for this new flexible marketing regime is

July 1st, 2017.

Signature Mediation, (Gerry Friesen and Perry Mohr) was contracted as the Envoy to usher in a smooth

transition from single desk selling to an open market in the commercial fishing industry. Friesen, the

Chairman of Manitoba Pork Marketing and Mohr, the General Manager of said organization, successfully

transitioned Manitoba Pork Marketing Co-op from a single desk seller to the open market 20 years earlier and

brought knowledge in working with governments and other industry stakeholders from that experience.

Friesen, now a conflict management specialist and Mohr, the recently retired General Manager of a marketing

Co-op, brought a unique mix of experience and skill to the Envoy.

Background

The commercial fishing industry in Manitoba has been under single desk selling (monopoly) since 1969 when

the Freshwater Fish Marketing Corporation was established under the authority of the Freshwater Fish

Marketing Act. Historically, single desks were created during times of market crisis. FFMC was formed as

result of the McIvor Commission to bring some standardization and control to the fish-marketing process,

under federal legislation. The Corporation’s purpose was to stabilize the freshwater fish market and to

rationalize the fishing industry. Its mandate was to market fish in an orderly manner, to increase returns to

fishers, and to promote markets and export trade in fish.

The Act gave FFMC the exclusive right to interprovincial and export trade of designated freshwater fish

products supplied from Manitoba, Alberta, Saskatchewan, Northern Ontario, and the Northwest Territories.


The Act required FFMC to purchase all legally caught fish offered for sale by licensed commercial fishers,

subject to price, terms and conditions of purchase and conduct its operations on a break-even financial basis.

FFMC also set prices for all fish caught under commercial license within its mandated regions.

In 1974, following a task force study to examine the roles, objectives, and activities of the participating

Provinces, the Federal Government, and FFMC, recommendations were made to improve the fish-pricing

mechanism used by the FFMC. It was recommended that FFMC be more transparent in defining the criteria

for establishing pool accounts, initial prices and final payments for fishermen. FFMC was also instructed to

assume full and direct responsibility for providing short-term credit to fishers and establish guidelines to help

its agents to administer credit.

FFMC faced opposition to its centralized processing operations in a Transcona plant because it increased

transportation costs and unemployment in northern communities. The Corporation maintained that

reductions in the through-put at Transcona would increase costs and reduce fishermen’s cash receipts. While

pressured to increase returns to fishermen, FFMC also faced the problem of having to accept all fish

delivered to its plants. Often there was no market for the large quantities of fish which resulted in them

having to be frozen and put in storage, thus, lowering the market value.

A 1989 study of the effectiveness of the FFMC examined how it’s financial management and efficiency were

meeting its goals and the level of satisfaction of its suppliers. The study found that since FFMC returned

most of its earnings to the fishermen, it suffered a working capital deficit, leading to a heavy reliance on debt

financing. This was not because of poor financial management, but rather due to management’s decision to

keep its goal of increasing fishers’ returns.

As stated earlier, FFMC has fallen under constant scrutiny over the years. Many fishermen believe that the

Corporation’s investment in efficient processing technology and good command of markets has improved

fisher’s profitability, while others are dissatisfied and feel they have little control over what the Corporation

does. Furthermore, there is belief that its Board of Directors does not adequately represent fishermen.

Currently, fishers wishing to market outside of the FFMC can apply for Export Development Licenses

(EDLS) and Special Dealers Licenses (SDLS).

One of the major criticisms of the Corporation is that the percentage of the sales value of the fish has eroded

over the years. As early as the year 2000, fishers of pickerel and whitefish received 70% of the value of the

fish. In 2016 that percentage had decreased to 45%.

A 2007 Probe Research fisher profile survey concluded that a solid 66%, but diminishing majority of

respondents, felt that FFMC was doing a good job but only 37% expressed strong satisfaction. Fishers were

more critical of the FFMC’s efforts to develop new export markets and lack of innovation. The most

common criticisms were insufficient investment in product and market development and lack of eco-labelling.

The 2007 fisher profile survey concluded that a solid majority of the fishers continued to support single-desk

marketing, but a growing number felt they would like to sell outside of the single desk model to private fish


buyers in order to reap higher financial returns. A growing number of fishers believed that their returns

would increase if the Corporation were to completely disappear.

A 2007 report by George Morris Center, Larry Martin and Kate Stiefelmeyer concluded that the situation in

the freshwater fish industry was difficult. Moving to a dual market would also be difficult since there were

currently no buyers or alternative facilities other than FFMC.

It was also pointed out that FFMC has a large and high cost processing facility that was located at the edge of

its supply territory, therefore increasing assembly costs. Its margins were low and if substantial market share

was lost in a dual system its efficiencies would erode further leading to extremely poor financial performance

and lower returns to its fisher-suppliers. Also noted was that FFMC didn’t have reserves or the financial

performance to attract outside debt or equity to make investments in order to improve its performance.

“Under the best of circumstances, inviting start-ups into a situation where they have no experience would

result in some failures along with some successes. But by no means would the simple entry of new players be

a short-term panacea; learning will need to occur and the cost of learning is often high. The market

circumstances in this industry are not the best because it has been treated as a commodity and harmed by

exchange rate and energy costs of transportation.” (George Morris Center Report)

FFMC is currently enduring another round of scrutiny. Fishers, seeing their percentage of the sales value of

their fish continue to erode, have lobbied government for change. They want freedom to market their harvest

wherever they want. Former FFMC President Donald Salkeld has also suggested there is widespread

corruption in the Corporation and the industry is anxiously awaiting an Auditor General’s report. Since

Alberta closed its commercial fisheries and Saskatchewan and Northern Ontario withdrew from the Act, the

provincial government’s decision to withdraw as well is bound to put further strains on its existence, as this

leaves the North West Territories as the only participant.

Despite all its challenges, the Envoy has found that there is still strong grassroots support for FFMC.

However, the clear majority of the fishers encountered in the consultations facilitated by the Envoy are aware

there are operational inefficiencies and other issues with the Corporation, that if not addressed could lead to

its demise in an open competitive market.

Meeting Summary

The first stage of the Envoy’s mandate was consultation sessions with industry stakeholders to

identify important transitional issues and opportunities.

From the onset, the Envoy wanted to ensure that every commercial fisher had an opportunity to participate

in a meeting. After initially planning and budgeting for 8 meetings it was decided to expand the number to 23

as the need to reach out and communicate information into the communities, many in remote areas, was

identified.

At the 23 fisher meetings throughout the Province, the Envoy met with over 420 fishers and stakeholders.


Meeting Locations

Meetings were held in the following locations;

November 14th - Thompson

November 15th - Leaf Rapids

November 16th - Norway House

November 17th - Grand Rapids

November 18th - Gypsumville

November 28th - The Pas

November 28th - Swan River

November 29th - Eddystone

November 30 - Matheson Island

November 30th - St. Laurent

December 1st - Gimli

December 2nd - Fisher River

December 5th - Berens River

December 6th - Lake St. Martin evacuees (Canad Inn Polo Park)

December 7th - Lake Winnipeg Co-Management Board Meeting

January 17th - Hollow Water

February 9th - Poplar River

February 13th - Wabowden

February 14th - Brochet

February 14th - South Indian Lake

February 15th - Cross Lake

February 16th - Pukatawagan

February 23rd - Island Lake (including the communities of Red Sucker Lake, St. Theresa Point, and Garden Hill)

Meeting Agenda

The agenda that was utilized at each of the fisher meetings included:

Envoy Mandate

Flexible Marketing – what is it?

Roles of Stakeholders o Federal Government o Provincial Government o Processor/Buyers/Agents/Sheds o Fishers

Issues Identified o Quotas o Export Permits o Freight Subsidy

Opportunities Identified o More Buyers o Potential revenue Increase o Economic Development o Niche Markets


o Eco – Certification

Adjournment

Meeting Presentation

Please refer to Appendix 3 for the presentation slides utilized in the meetings referenced above.

General Meeting Observations

The meetings were interactive, encouraging dialogue between the stakeholders and the Envoy. In most First

Nations communities, the Envoy was informed that the meetings were not considered consultation sessions

as the decision to withdraw from the FFMA had already been made. Their position was, that their Treaty

rights state that they need to be consulted in advance of any decisions the Government makes that could

impact their income. The Government’s response was that they did not institute Crown-Aboriginal

consultation under s. 35 of the Constitution Act, 1982 (regarding FFMC marketing changes) because it does

not consider the changes in marketing to affect the Aboriginal or treaty rights to hunt, trap and fish “for

food”.

Meeting Observations - Fishers

What was learned from meeting with fishers and other industry stakeholders?

Strong Grassroots Support for FFMC

Fishers have very little to compare FFMC to. Most want to put their nets in the lake, harvest

their catch and get paid. They don’t want to or do not have the ability to market their harvest. In

absence of any options other than FFMC for 48 years it is difficult for them to imagine anything

but.

o The Envoy estimates that in roughly 67% of the areas in which meetings took place

include fishers that supported the FFMC.

“Fixed” FFMC would be best

Most fishers are aware of the challenges that FFMC is facing related to management,

inefficiencies, etc., but feel strongly that the best system for them would be a “fixed” FFMC.

Complaints about FFMC pricing/costs

Erosion of the fishers’ share of the price of fish over the years has many fishers disillusioned and

frustrated.

Export Permits (FFMC issued)

EDL’s or Export Dealers Licenses are cumbersome to apply for and very one-sided in FFMC’s

favor. FFMC issues these permits to anyone wanting to sell outside the Corporation. Those

applying for a permit must sell the fish to a market outside of Manitoba where FFMC sales will

not be jeopardized. Fishers applying for the EDL’s over the years have had varying degrees of

success and have often been turned down. Those that were successful in obtaining EDL’s have

had them terminated. Fishers have become jaded of the process and no longer bother.

Fear that FFMC will not continue to exist


There is concern amongst fishers that FFMC, based on past operational challenges, will not be

able to compete in an open market and will be forced out of business. Additionally, the open

market will result in a further erosion of supply leading to further inefficiencies and therefore

lower payments to those that support it.

Offering contracts to fishers and shed owners

FFMC, anticipating competition and erosion of supply, has held numerous meetings with fishers

and shed owners and has talked about contracting in the open market. While to the knowledge

of the Envoy no actual contracts have been signed, their aggressiveness could stifle or delay any

new processing facilities and buyers from coming to the province.

Fear of change

As with any change there is also fear of the unknown. The Envoy heard stories from fishers

regarding selling fish and not getting paid in the past. They fear the open market could result in

history repeating itself.

Open market will only benefit a select few

Most, but not all fishers, feel the Government’s decision will positively affect a select few fishers,

most of them in the south basin of Lake Winnipeg. The Envoy tried to impress upon all fishers

the need to use their new-found leverage to negotiate and that they need to learn how to market

themselves by identifying differentiating characteristics.

Very few fishers have been contacted by prospective buyers

Fish buyers have kept a low profile since the Province’s announcement. This is particularly

evident in the northern fisheries. The Envoy believes this may continue once the market opens

as the northern fisheries face some significant disadvantages, many related to their proximity to

the market, which may be difficult to overcome. The Envoy has advised fishers to get organized

by forming Associations or Cooperatives, and start contacting prospective buyers. In other

words, to not wait for the buyers to come to them.

Interest in market development ahead of open market

Some fishers have asked for the ability to send sample size shipments (25kgs) to prospective

buyers for market development purposes. In the Envoys first report this request was made and

to our knowledge has been passed on to Federal Fisheries Minister, Dominic LeBlanc.

Licensing and bonding importance

Critical to the protection of the fishers and validation of the buyers, the Envoy has

recommended to the Province that a fish buyer licensing and bonding process be implemented.

The Envoy has advised fishers to not sell fish to a buyer that can’t provide proof of these.

Concern there may not be a market for all species

There is legitimate concern that in an open market buyers may only want to purchase certain,

higher valued species. Over time this may correct itself as other buyers see opportunity to buy

the lower valued species.

Eco-Certification will devalue quota value and revenue

Eco-Certification is a contentious issue for fishers in Manitoba. Their sensitivities are somewhat

triggered by a damning SeaChoice report in November of 2015 that identified Manitoba’s lakes

as some of the worst managed in the world. First Nations fishers say they have been fishing for

centuries in a sustainable manner and others claim that the lakes have been fished sustainably for


years and that there are more fish than ever. The Envoy believes that the fishers biggest fear is

the negative impact eco-certification could have on their revenues and a decrease in value of

Individual Quota Entitlements. The Envoy has been advised that there are fisheries on 18 Lakes

in Northern Manitoba that would like to become eco-certified as soon as possible. These lakes

involve 181 licensed fishers with a total annual quota of 1,008,800 kgs. (See appendix 2)

Freight Subsidy

Established in 1976, the freight subsidy is paid by the province to assist those fishers in the more

remote regions of the province get their harvest to market. The subsidy is capped at $410,000

and applies only to Lake Whitefish, Northern Pike, Lake Trout, Yellow Perch, Goldeye and

Cisco. While not totaling a significant amount, the fishers in the areas that qualify need all the

help they can get. Unfortunately, in an open market, any kind of subsidy is not trade friendly.

The Envoy believes, if kept, the program should be restructured to be trade friendly and that any

changes be phased in over a period of time.

Insurance programs

Many fishers expressed a desire to participate in insurance and income stabilization programs like

those available to grain and livestock producers in the province.

Manitoba Hydro

Many communities are frustrated from the negative impact Manitoba Hydro dams have had on

their fisheries. The fisheries in South Indian Lake area are a prime example of this. Their annual

harvest has dropped from 550,000 kgs in 1995 to less than 100,000 kgs in 2013 allegedly due to

Hydro operations changing lake levels and impacting spawning. (see Appendix 4)

Follow up meetings to review new regulations and policies

At many of the meetings it was suggested that once the new legislation and regulations are

changed that “follow up” meetings be held by the Province to inform fishers of the new rules.

CEDF Loan Payments

The Communities Economic Development Fund (CEDF) provides financing to the fishing

industry. Loans are typically granted to assist with the cost of equipment for fishers, however,

they do also provide financing for business loans. It is estimated that approximately 70% of the

commercial fishers in Manitoba are clients of CEDF. At the moment CEDF has an assignment

from FFMC, and FFMC deducts loan payments from fisher’s deliveries. Fishers have expressed

concern that CEDF loans may not be as readily available in an open market and that other

buyers may not deduct loan payments and remit them to CEDF. With the move to open

marketing CEDF will not have the same surety of payment with buyers other than FFMC.

Although the buyers that the Envoy has talked to understand the importance of CEDF financing

for fishers and are prepared to work with CEDF and fishers regarding loan payments, CEDF is

considering changes to the loan criteria currently in place. They will rely more on credit checks,

credit repayment histories and direct payments from fishers as the security provided by the

monopoly of FFMC will no longer be available. The Envoy has held discussions with CEDF and

they have assured it of their willingness to work with fishers and credible buyers when the

market opens to ensure their services will continue to provide valuable capital to the fishers.

Furthermore, CEDF is cognizant of the value-added opportunities that communities may have

in the open market, such as catch site processing, and are prepared to work with communities,

coops, associations, businesses and others that need financing.

EI Premiums


The EI program that fishers pay into is unique to the fishing industry in Canada. FFMC has

provided a valuable service to fishers of deducting and remitting EI premiums on their behalf.

Fishers have expressed a concern that the EI program will not be available in an open market.

The Envoy has assured them that the program will continue to be available and that the new

buyers the Envoy has spoken to are aware of its importance and will work with those fishers that

wish to have premiums deducted and remitted on their behalf.

Quota Entitlements

Lake quota has no value however individual quota does. Most northern lakes have lake quota

(QE) and Lake Winnipeg and Winnipegosis have individual quota entitlements (IQE). These

IQEs are determined and assigned by the province as the owner of the resource and the fishers’

use of it is based on assumed continued access to the resource. A fisher holding an IQE can

borrow money against the quota based on its implied value. There are differences in how the

quotas can be transferred to another individual. Fishers with IQE on Lake Winnipeg and

Winnipegosis can buy and sell quota. On the northern lakes, quotas entitlements (QE) are based

on traditional harvests adjusted by maximum sustainable yields. On these lakes, fishers are

considered to own access rights. The Province is the final authority on whether or not a transfer

of access rights is approved. On those lakes, the Province issues a set number of licenses to

fishers who fish until the lake quota is filled for the season.

o Fishers with quota that has a value are extremely concerned of the Government doing

anything that will impact the value of said quota. The Envoy was advised at more than

one meeting that fishers would challenge any decisions made that may impact their

quota values.

o It is the understanding of the Envoy that there are lakes, with established lake quotas,

that are not being commercially fished as no licenses have been issued. Consideration

should be given to make licenses available where demand exists, thereby increasing

fishers’ revenues and provide more fish to the market.

Niche Markets

Fishers, particularly those in the more remote areas, may have to be creative in developing and

satisfying niche markets. Niche markets are markets that are served by product features aimed at

satisfying specific market needs, as well as a price range, production quality and the demographic

that it is intended to impact. They are also typically a smaller market segment. The Envoy talked

to the Northern fishers about thinking outside the box and finding ways in how they could

differentiate their harvest and create more value. Marketing buzz words like “First Nations”,

“Cold Country”, “Organic”, “Sustainably Harvested” were used to stimulate their thought

process.

Co-ops/Associations

Most fishing communities are somewhat organized in the sense that they have a fishing Co-op or

Association. The Envoy feels this bodes well for the open market as fishers will find that

individually they have little market clout but by combining quota’s and working collectively they

will have more appeal to a prospective buyer as well as more market leverage.


Meeting Observations – Private Sector Investors

What was learned from private sector investors (processing facilities / Co-ops) etc.?

Prospective Processors/Buyers

The Envoy has found there is significant interest from out of Province fisher buyers. At least four

organizations/companies have been identified and have a genuine interest in pursuing relationships with

fishers once the market opens. Two of the organizations/companies are interested in buying fish and would

consider utilizing existing processing facilities and two are interested in new infrastructure opportunities. It

was the intention of the Envoy to bring these buyers to Manitoba in January of 2017 to tour the Province, get

a first- hand look at some Fisheries, and meet prospective fishers/suppliers. The buyers were reluctant and

instead decided to wait for an official open market date, the new legislation, and regulations before they

proceed. This could hurt their prospects as FFMC has been much more aggressive and may tie up supplies

and the packing sheds before others start pursuing opportunities in Manitoba.

The buyers identified above interested in buying fish and utilizing existing processing facilities are:

John O’s Foods Inc.

JOF is an Ontario based fish processor operating out of Wheatley, Ontario. JOF is currently

buying processed fish from FFMC as well as doing some custom processing for FFMC and are

looking at buying fish in Manitoba in the long term. They recognize the current benefits that

FFMC provides the industry and want to build on that as FFMC adapts to the open market

environment.

Presteve Foods

Presteve Foods is an Ontario company involved in harvesting, processing, and distributing

seafood from the Great Lakes, and other Canadian, U.S. and European freshwater fisheries to

customers in Canada and the U.S. They are owned by Tricor Founders, an organization actively

involved in food processing across Canada. They have expressed interest in sourcing fish out of

Manitoba and currently source processed fish from FFMC.

The buyers identified above interested in building processing facilities are:

Northern Walleye

Northern Walleye, owned by former FFMC President Donald Salkeld and Mike Schafer of

Schafer Fisheries from Thomson, Illinois, announced their intensions to build a fish processing

plant in Gimli on December 15th of 2016. They will purchase and process all species of fish from

Manitoba fishers and assure that fishers will have the same benefits afforded to them now, such

as EI Benefits, CEDF Loans, etc. The plant will be built in three phases with a total investment

of 5 to 10 million dollars. Northern Walleye will create economic growth and jobs in the area.

Their intension is to purchase fish as soon as fishers are free to sell to them. Processing will be

done at Schafer Fisheries in Illinois until the new facility in Gimli is operational. The plant will

service customers in both the domestic and international marketplace. Northern Walleye Inc.

suggested they would be coordinating local meetings in early 2017 to ensure the development of

a favorable working relationship with fishers who have an interest in supporting the new venture.

The three phases of the plant building process will include:


Phase 1 will essentially be a packing shed used to assemble loads for Thomson,

Illinois. It is expected to be operational in August, 2017.

Phase 2 of the plant will include a gutting and heading process to supply a fish

fertilizer plant and is expected to be operational for the winter fishing season

(November of 2017).

Phase 3 will be a fully operational fish processing facility expected to be ready by

September of 2018.

The plant will have a 250,000 lb. per week capacity when fully operational. Distribution will be

either done from an extended Gimli air strip or from Centerport.

Community Development First (CDF)

CDF was organized in October 2013. Their primary business is to provide management and

administrative services to international investment banking/ financial institutions and facilitate

the creation of credit facilities.

CDF also provides consulting services to private individuals, communities, organizations and

corporations in the creation of structured credit facilities for funding of development projects.

CDF has plans to announce an $180,000,000 project that includes a $87,000,000 fish processing

plant in St. Laurent. The project is also expected to include a Fresh Water Fish Hatchery, a

Fertilizer Plant and Fish Scale Processing.

Phase 1 – Fish Processing Plant and Storage Facilities

Phase 2 – Truck Stop, Gas Bar, C-Store, Motel/Hotel

Phase 3 – Sustainability Centre, Housing Development, Livelihood Programs

The plant will have the capacity to process 100 million pounds of quota and non-quota fish annually;

an amount more than Manitoba’s total estimated current fish supply. Their markets are expected to

include domestic markets, like Vancouver and Toronto, as well as export markets like China, Japan,

Eastern Europe, the Middle East and Australia.

Additional Information:

CDF believes they can increase fisher’s incomes and intend to provide fishers with important

services such as EI deductions, CEDF payments, microloans for equipment, and others that are

important to fishers.

The project is in partnership with the local Fishers Co-op and CDF expects to turn the ownership

and management of the plant over to the Co-op after 5 years.

The project, once announced, is expected to take up to 24 months to complete.

The plant is expected to employ 109 people and have an annual total payroll just under $5,000,000.

The funding for the project is to come from two primary sources, Barclays (U.K) and J.P. Morgan.

(U.S.)

The Envoy has met with CDF numerous times. The plan has a great deal of merit to it and

represents a tremendous opportunity for the fishers, and economic development for the town of St.

Laurent and the Province. The plan is also very aggressive and some of the assumptions made in the

business plan will require further due diligence.


The Envoy believes other processors may come forward as the open market evolves.

Research & Development

Identification of new fisheries regulations, policies and systems

The Envoy reviewed Legislation and Regulations related to the fishing industry to identify changes that would

be necessary, both prior to and after open marketing. The equivalent of four days was spent reviewing the

documents before initiating a meeting with Dr. Brian Parker, Senior Fisheries Manager for Sustainable

Development and Blaire Barta, a Legislative Specialist, to review the recommendations. Most of the changes

that the Envoy recommended, had already been identified by Provincial staff and were being aggressively

worked on to ensure those needing legislative and regulatory approval were presented prior to the

Government breaking for summer.

The Envoy is comfortable that all the legislative and regulatory changes that are necessary to transition as

smoothly as possible to an open marketing environment have been identified.

In addition to changes to the existing legislation and regulations, the Envoy has recommended the additions

of licensing and surety bonds be made as a layer of protection for the fishers. Many fishers have been told of

experiences where fishers were not getting paid prior to 1969. While we live in a different world today there

will undoubtedly be “opportunists” that will attempt to take advantage of fishers in the open market. A

proper vetting process, including the license and bond, will discourage the “fly by nighters” and other

opportunists. The Envoy’s suggestions are below, however the exact wording for the licensing and bonding

process will be developed by the Province.

Licensing buyers, agents and processors to protect the fishers

o Any person who is buying fish must possess a valid Fish Dealer or Agent License issued by

the Province.

o Sellers should be assured of payment when negotiating transactions. All licensed dealers and

their agents must carry a valid pocket license and produce it upon request. If an unknown

buyer approaches you, demand to see their license before continuing with the sale.

o The purpose of the license is to protect sellers from payment defaults by the buyers.

Licensed dealers are also required to be bonded. The level of coverage is determined by the

volume of fish they purchase on an annual basis. If a default occurs, sellers can make a claim

against the dealer’s bond to recover full or partial value of the fish.

o At the time of sale, the buyer will be obligated to provide the seller with a copy of the

transaction including the names and addresses of both the seller, the weight and species of

the fish purchased, the unit price, and total purchase price.

o The licensing regulation will require that payment be made between one and seven days

following price determination. (negotiated between the parties)

o If payment is made by cheque, the seller must deposit or cash the cheque within eight

business days of price determination. If there are insufficient funds to cover the payment,

the seller then has seven business days to bring the issue to the attention of the Province and

initiate a claim against the dealer's bond.

o These time requirements are not intended to protect dealers from having claims filed against

their bond. Rather, they are designed to ensure that the regulations can be applied in a fair

and timely fashion.


A Surety Bond for fish buyers, agents and processors to protect fishers

o If the fish buyer or agent fails to carry on business under the terms and conditions of his

license, then the Surety Bond shall be liable for and shall pay all claims arising under this

Bond after such claims are submitted to the Province.

o The amount of the surety bond required for an applicant who has not previously held a

license is to be based on the estimated dollar value of business the applicant expects to do in

the province over the next 12-month period.

In addition to the above changes, the Envoy has recommended that the Province develop a system for

accurately monitoring and quantifying the harvest. The licensing and reporting requirements for commercial

fishers and fish dealers should be able to collectively support efforts to monitor and quantify harvest.

One of the biggest criticisms of SeaChoice was accuracy of the harvest data currently being recorded and

quantifying the harvest of by-catch and target species. Proper development of the harvest tracking system is

an opportunity to address those issues.

Sources

Today Commercial fish harvest is monitored by compiling information from the following sources:

FFMC

o EDL (Export dealers license) sales reported to FFMC

Commercial Fisherman’s Trade Records are required to accompany all commercial freshwater fish

sales from a commercial fisher to a domestic Manitoba buyer other than FFMC through a Special

Dealer’s license to ensure that the harvest and associated transactions are documented.

A Commercial Fisherman’s Trade Record Receipt is required for every sale from a commercial

licensed fisherman who:

o Sells fish directly to a consumer,

o sells fish to a holder of a Special Dealer’s License,

o sells fish under the authority of their own Special Dealer’s License,

o and/or, consigns fish for sale to an individual under a Director’s Authorization must at the

time of sale or consignment issue a fully completed Trade Record Receipt to the purchaser

or fisher’s representative.

Commercial fishers must issue trade records to ensure only legal sales of fish occur and to protect their

markets and the fishery resource from illegal harvest and marketing. Commercial Fisherman’s Trade Records

must be fully completed showing the following information:

o the date,

o the fisher’s name and, if applicable, the fisher’s license number;

o the originating body of water;

o the form and quantity by weight of each species of fish;

o and, the name and address of the purchaser for fish not sold to a final consumer.

Every fish marketer (including fisher’s representatives with Director’s Authorization or holders of a FFMC

Special Dealer's License) must provide the purchaser with an itemized receipt (or combination of package

label and receipt), that specifies:


o the name and address of the seller,

o the date of transaction, the species,

o and, the form and weight of fish sold to any person to whom he or she sells fish.

This allows for verification of the source of fish and protects the purchaser when transporting and possessing

fish from being in violation of Manitoba possession limits.

Today most of the harvest is recorded by FFMC (due to the monopoly) and submitted to the Provincial

Government along with the data reported by fishers on their sales outside of FFMC. In an open market

environment, multiple buyers are anticipated and that less of the harvest will be recorded by FFMC. As such,

the Envoy feels it is imperative that the Province develop a tracking and monitoring system that will be able

to amass information from multiple sources in a timely manner.

Engagement

Engage Federal Government on withdrawal from the Freshwater Fish Marketing Act and FFMC

The Envoy is continually trying to set up a meeting with Federal Minister Dominic Leblanc. However, over

200 hours have been spent with Katerina Daniel, the Director of Strategic Partnerships for DFO, who was

assigned to this file when Manitoba announced its intentions to pull out of the Act. Ms. Daniel accompanied

the Envoy to 19 of the 23 fisher meetings. During the travels discussions surrounding the Provinces

withdrawal from the FFMA and a vast number of potential outcomes for FFMC once the market opens took

place. From those discussions, the Envoy believes the Federal Government is looking at all options, including

divesting itself of FFMC. Since Manitoba is supplying approximately 85% of the fish processed by the facility,

and that supply is now uncertain, coupled with the fact that the Northwest Territories is now the only

remaining signatory to the Act, continued ownership by the Federal Government of FFMC becomes difficult

to rationalize. The Envoy also does not believe the Federal Government has an appetite to compete with

privately owned entities in an open market environment. As such we believe the federal government’s options

for FFMC after Manitoba officially pulls out of the Act are:

restructure into a Fishers Co-op,

sell to private entity,

sell to First Nations,

sell to MMF,

remain a Crown Corporation,

or, cease operation and liquidate assets.

Government Meetings

Government departments and private sector investors (processing facilities/Co-ops)

The Envoy met regularly with Bruce Gray, ADM of Sustainable Development, and continually provided him

with updates from the fisher meetings and discussed issues encountered as well as possible solutions. Matters

that needed to be addressed immediately, like the dealer’s licenses, bonds and the harvest recording system to

ensure they were ready when the market opened was also identified.


Additionally, meetings with Bruce Gray’s staff, including Dr. Brian Parker, Senior Fisheries Manager and Bill

Galbraith, Manager, Sustainable Fisheries Unit & Commercial Fishing Program Manager took place, allowing

the Envoy to utilize their expertise. Both individuals proved to be extremely knowledgeable, and they could

answer any questions asked and embraced and helped flesh out many of the ideas and suggestions.

After concluding the fisher consultation sessions, meetings were held with Bruce Gray, ADM, Tony Romeo,

Director of Manitoba Growth, Enterprise and Trade, Karen Mackintosh, Senior Policy Analyst for

Sustainable Development, Jim Duncan, Director, Wildlife and Fisheries Branch and Kristine Seier, Senior

Project Manager, Jobs and the Economy. These meetings focused on identifying government programs that

would be helpful for the transition and opportunities that may be created because of the open market. The

Envoy worked with this group and contributed to the development of a communication strategy that

included a letter announcing an open market date for fishers and industry participants, a Commercial

Fisheries Profile, and ideas for use in the Look North Strategy.

Lastly, meetings with Minister of Sustainable Development Cathy Cox, Deputy Minister Fred Meier and

Special Assistant to the Minister Bruce Verry took place two times during the project to provide updates and

answer questions related to the work the Envoy was completing.

In summary, below is a list of individuals the Envoy met with or held teleconferences with while working on

this project:

Government

Jonathan Scarth – Principal Secretary to the Premier & Secretary to Priorities & Planning Secretariat

Rick Wowchuk, Jeff Warton, Derek Johnson – MLA’s

Tom Rosser – Senior ADM Federal Department of Fisheries and Oceans

Chris Dunn – Saskatchewan Fisheries Unit Manager

Bruce Gray – ADM Sustainable Development

Dr. Brian Parker – Senior Fisheries Manager

Bill Galbraith – Manager, Sustainable Fisheries

Kevin Casper – Central Regional Fisheries Manager

Tony Romeo – Director of Manitoba Growth, Enterprise and Trade

Karen Mackintosh – Senior Policy Analyst for Sustainable Development

Jim Duncan – Director, Wildlife and Fisheries Branch

Kristine Seier – Senior Project Manager, Jobs and the Economy

Eco-Certification

Jay Lugar – Program Director Marine Stewardship Council

Kurtis Hayne, Scott Wallace – staff members, SeaChoice

Dr. Brian Parker – Senior Fisheries Manager

Bill Galbraith, Manager, Sustainable Fisheries Unit & Commercial Fishing Program Manager

Scott Forbes – Professor, U of W

Processors/Buyers

FFMC

John Wood – acting President of FFMC


John Binding – Director of Field Operations FFMC

John Thorkelson – Manager of FFMC Selkirk

Northern Walleye

Mike Schafer – President of Schafer Fisheries

Donald Salkeld – former President of FFMC

Community Development First – CDF

Carolina Buquing – Executive Director

Doug Bowen – CEO

Fidel Araneta – President

Terry Szydlik – CAO

Presteve Foods Limited

Richard Harris – Executive Chairman

Bonnie Staples – Lyon – Director of Public Affairs for Changemakers

Johnny O Foods

Johnny Olmstead – Owner

Fishers

Mary Hildebrandt – Head of Saskatchewan Commercial Fisheries

Robert and Kris Kristjanson, Bill Buckels, Gimli area Fishers

Frank Kenyon and Amanda Stevenson, WMM Co-op

Distributors

Evan Page, Julie Tuk – Neptune Mariner

Phil Crossland – Independent Fish

Transportation

Jim Sceviour and George Krasulja – TransX

MMF

John Parenteau and Alfred Anderson, MMF

First Nations Consultant

David Mackay – President of Powerful Public Relations – representing 9 First Nations Communities

CEDF

Oswald Sawh – CEO

Rheal Buors – Fisheries Loan Officer

Eco-Certification/Sustainability

In 2015, SeaChoice, an organization based in California operating within the David Suzuki Foundation,

released a report that did not reflect favorably on the sustainability of Lake Winnipeg, Lake Manitoba, and

Lake Winnipegosis. As a result of the report, these lakes received an “avoid” recommendation, advising

consumers not to buy fish from these fisheries. As quoted in their report, SeaChoice “scored these lake

fisheries at a level comparable to some of the most poorly managed fisheries in the world. The fisheries fell


short in areas such as understanding of stock sizes and catch rates, lack of catch limits for some species,

inadequate data, poorly regulated bycatch, non-enforceable multi-species quotas and absence of harvest

control rules. Thus, many fish stocks have collapsed or are severely depleted”. SeaChoice admitted they were

not expecting this result.

Many fishers were concerned by the Seachoice report as they felt it did not accurately reflect the reality of fish

stocks. The fishers strongly suggested that had they been consulted the results of the study would have been

materially different. The fishers were also disappointed that the government and media were not more

supportive of the Lake Winnipeg fishery.

Because of the Seachoice report the government, in November of 2015, announced its intention to take

comprehensive action on the sustainability of Manitoba’s fisheries. They commissioned Harold Westdal to

complete a study of Lake Winnipeg to define the parameters of a revised management plan, identify fishers’

concerns, seek solutions, and create a negotiating table to find resolution for any points of disagreement. That

report, released in June of 2016, identified three consensus issues. They were, respect for the fishers, that

regulations should not cause a reduction in income or quota values, and improvement in government’s ability

to estimate stocks with emphasis on utilizing fishers’ local knowledge.

The fishing industry must also consider other expert opinions, such as Dr. Scott Forbes from the University

of Winnipeg. When meeting with him he told the Envoy that “If we continue down our current path, a large-

scale stock collapse of walleye is possible on Lake Winnipeg: the rapid decline of the catch in the last four

years is a strong signal; and a commercial fishery now targeting large spawning females is the quickest route to

a collapse. Stock collapses are never pretty - the time scale for a recovery is not years but decades. Without

better biological data, it is impossible to say exactly how close we are, but it's pretty clear we are not too far

from the edge of the cliff right now”.

When Cathy Cox became Minister of Sustainable Development her mandate from the Premier was to

“develop and implement a credible strategy to secure certification of Manitoba’s commercial fisheries”. Along

with the election promise to withdraw from the Freshwater Fish Marketing Act, the government was keenly

interested in certification as they felt it would enhance fishers’ returns through increased market accessibility.

Fishers’ response to eco-certification has been mixed. At the Envoy’s consultation meetings, fishers in some

areas welcomed the idea of certification. In fact, some fisheries have requested that their lakes be assessed and

certified. In other areas, however, particularly those around Lake Winnipeg, fishers did not like the idea of

certification, as they felt that it would have a significant negative impact by lowering harvest levels, quota

values, and incomes. They also felt that fishers are most capable of fishing sustainably. Many First Nation

fisheries felt that they have the knowledge passed on through generations to determine and monitor fish

stocks.

Certification comes at a significant cost. The upfront expense to become certified can be as high as $250,000

per lake, as well as some annual assessment costs. Additionally, lakes must be recertified every five years.

This creates significant concern as fishers and government have limited resources to contribute to the process.


SeaChoice works with major retailers such as Federated Cooperatives Limited and Safeway, buyers that are,

and have been, implementing sustainability and traceability criteria. As such, they look at SeaChoice and their

lake rankings to ensure that the products they sell meet the standards of sustainability. After the assessment

of Manitoba lakes, they issued an “avoid” status meaning the retailers under their umbrella should not buy

Manitoba fish. When the Provincial Government announced it was moving towards a strategy for eco-

certification they notified their retail partners to “wait and see”.

Lisa Sparrow-Moellenbeck of Federated Cooperatives Limited (FCL), was quoted as saying; “FCL is

committed to sourcing walleye and northern pike from sustainable fresh water fisheries. FCL encourages the

Manitoba lake fisheries to make a commitment to improve fishery management”. Her statement underlines

the importance of eco-certification.

In planning and implementing a certification strategy it is important to note SeaChoice’s findings:

Manitoba Fisheries (Sustainable Development) have resource capacity challenges which could be the

reason for the lack of data related to harvest vs. stocking density, harvest relative to stock

sustainability, quantifying the actual catch, by-catch species and target species. Concerns about the

accuracy of the data being reported, as it related to what is being caught and what is being recorded

were also noted.

Manitoba Fisheries do not meet Canada’s basic sustainability policies for fisheries.

3-species quota is not practical because:

o the volume is fixed and not adjusted annually based on stock densities.

o it encourages high grading, and subsequently bushing.

To fulfill the mandate for eco-certification, enforcement is necessary and every vessel must accurately

report their catch.

To discourage misreporting, implementing a $50,000 fine if found to be non-compliant.

To execute an Eco certification strategy, the Province needs to implement a co-operative regime that

involves the fishers in the process. The industry needs to “buy in” and a 5-10-year transition period is

likely.

SeaChoice is telling retailers to take a “wait and see “attitude with regards to buying Manitoba

sourced fish.

It must also be noted that SeaChoice ranks lakes but does not have a certifying process. That process is done

through an organization such as the Marine Stewardship Council (MSC).

MSC is an international non-profit organization established to address the problem of unsustainable fishing

and safeguard seafood supplies for the future. Their blue MSC label and fishery certification program has

contributed to the health of the world’s lakes and oceans. The MSC standard is based on three fundamental

principles. Sustainable fish stocks, minimal environmental impact, and effective fishery management. MSC

does not do the testing rather the testing is done by a 3rd party certifier which may take 12 to 24 months. The

process includes five steps. Pre-assessment, full assessment, certification, annual audit, and reassessment.

The benefits of eco-certification are:

Sustainability

Financial protection


Access to new markets

Current market security

Potential price premiums

Promotional opportunities

Manitoba is currently home to one lake that is eco-certified, Lake Waterhen. In fact, it was the first lake in

North America to be certified. Since then another lake located in Minnesota has been certified. It is the

opinion of the Envoy that a lot has been learned through the process of certifying Lake Waterhen and that

information would be useful as other fisheries follow suit.

As outlined in the Westdal report and confirmed with the consultations by the Envoy, there is significant fear

of the perceived negative impacts of eco-certification. Fishers will need to have some assurance that their

livelihoods will not be negatively impacted. The certification strategy should be done in such a way that there

is “buy in” from all stakeholders. SeaChoice mentioned a Fisheries Improvement Project (FIP) which brings

together industry, government, academia, angler associations, conservation groups, processors, distributers,

and retailers to improve sustainability and offer a path to reform. Under the MSC umbrella a FIP is based on

four steps.

1. Undertake the MSC pre-assessment

A gap analysis against the MSC Fisheries Standard

Tools; MSC Pre-assessment Template

2. Develop an action plan for improvement

An action plan linked to MSC performance indicators and designed to close gaps in the

performance of the fishery,

Tools; MSC Action Plan Tool

3. Implement actions and track progress

Implement the actions as set out in action plan and track progress consistently and

transparently

Tools; Benchmarking and Tracking Tools.

4. Enter full MSC assessment

The comprehensive, transparent and independent MSC assessment process validates the

sustainability of the industry.

Tools; Get Certified

The implementation of eco-certification must be done collaboratively between the government and fishers.

Upon completion of the transition to flexible marketing it is important that the government initiate

collaboration with fishers. The Envoy believes that utilizing the Fisheries Improvement Project guidelines is a

good first step for all industry stakeholders to understand the process, the need for sustainability, and to gain

a level of comfort with the process. If the process is started with those fisheries that have expressed the desire

to be certified other fisheries will naturally follow suit.

Funding eco-certification will be a challenge as government’s resources are stretched. As outlined in the

SeaChoice report, Sustainable Development has resource capacity challenges which has led to a lack of

credible data, particularly as it concerns harvest versus stocking density, harvest versus sustainability,

quantifying actual catch, by-catch species, and target species. This initiative will require new and improved

resources to ensure data collection is accurate, test netting is done consistently, and enforcement measures are

in place.

The strategy must involve stakeholder “buy in” and consider provisions for temporary losses of income and

potential quota devaluation for fishers. It must also be cost effective and cannot put undue financial stress on


fishers. Manitoba is in a unique position in that a great deal of the expertise required to reach minimum

standards of sustainability exists within the province. By enhancing resources within the department of

Sustainable Development, partnering with the University of Winnipeg for data collection, and working with

MSC, much of the groundwork for eco-certification can be accomplished at a modest cost.

Fishers and governments alike need to be innovative in their approach to eco-certification.

Implementing better harvest controls would have beneficial results for improved resource

management. Although this may come at some cost for fishers initially it should result in financial

gain in the long term. The government could, if resources are available, find ways to mitigate the cost

to fishers.

In fisheries that have IQEs the government may wish to consider a gradual buy-out of quota from

those fishers wishing to sell or creating a fund based on resource user contributions in order to do

so. Experts have suggested that a 20% reduction in the quota would take harvest levels down to a

sustainable level. As stocks increase this quota could be sold back or leased back to remaining or

new fishers. There would be an upfront cost, but these costs could be recovered in the future.

In areas with lake quotas, if quotas are reduced to allow for stocks to increase, there may be the

ability to implement an EI program in such a way that fishers maintain income until a time that full

quotas can again be harvested.

As suggested earlier there are some fisheries that have and are requesting eco-certification. For

example; there is a group of 18 lakes in northwestern Manitoba that are ready to pursue eco-

certification. Branch and Regional staff, along with input from MSC, have explored options of

proceeding through the certification assessment process using “indictor lakes”. Implementing an

“index lake” based assessment approach is intended to significantly reduce overall fishery

certification assessment costs. In addition to these efforts, Branch and Regional staff are preparing

management plans necessary to proceed towards full certification based on a staged process. This

means that lakes are prioritized based on meeting sustainability management criteria and work will

proceed accordingly. This approach will ensure that if not all 18 lakes can be ready when Waterhen

Lake must go for re-assessment, at least the most ready and significant commercial fisheries can

proceed towards full certification at that time. Should this process work for those lakes it could be

used for other fisheries as well.

Organizing communities, cooperatives, or fisher associations to begin Fisher Improvement Projects

will provide for the collaboration of all stakeholders. That assessment is confidential but allows for a

determination of future steps and what would ultimately be involved in a full assessment. Pre-

assessments would be beneficial as they provide the fisheries with an idea of what would be required

to become fully certified. Upon completion of the pre-assessment, programs could be developed

based on the requirements, including costs, for full assessment and certification.

Due to their experience with Lake Waterhen, the University of Winnipeg feels that for a very

reasonable cost students could be used to collect data on the Lakes as a summer project and for work

experience. Once the program is established, Dr. Forbes believes it could be used as a recruitment

tool for the University. As a secondary objective, the University has a desire to attract First Nation

students to their programs. A program of this nature could provide training expertise and

employment for these students and give them an opportunity to contribute to the fisheries in their

communities during and upon the completion of the studies.


The Envoy endorses the implementation of a 5-10 year eco-certification strategy that will not only ensure the

sustainability of the fisheries but the spinoff related economic benefits created by the fisheries.


Recommendations

The Envoy makes the following recommendations. Please note, the first six recommendations are

of utmost importance for a smooth transition.

1. Licensing/Bonding - The Envoy recommends that the Province needs to have a system in place

for licensing and bonding processors and buyers to provide fishers with some assurance that the

buyers/agents/processors wishing to purchase their harvest have met minimum criteria and have

some financial protection. The buyers going through this process would then also know what their

requirements are in terms of reporting sales etc.

2. Price reporting – Buyers need to report prices to the Province and the Province needs to record

and report prices as often as it is practical. The Envoy recommends that the Province report prices

on their website and/or be accessible via a phone recording. Prices would be amassed from the

different sources. An average price, plus the high and the low price of each species and form would

be reported in order to give fishers a sense of whether the prices they are getting are comparable to

current averages.

3. Harvest tracking – the Province currently tracks harvest, but most of the data comes from FFMC.

With multiple buyers anticipated the Envoy recommends that the Province enhance their data

collection capabilities to capture data from multiple sources in a timely manner to ensure fish harvest

is accurately recorded. Quota species, non-quota species and by-catch harvest need to be accurately

recorded to implement an eco-certification strategy.

4. Legislation and Regulation changes in place prior to opening the market – the Envoy

recommends to the Province that all regulation and legislation changes be in place prior to the

opening of the market. Opening the market prior to these changes may send the wrong message with

regards to non-enforcement of the existing regulations and laws.

5. FFMC stability - Through our consultations with fishers and other stakeholders it is clear to the

Envoy that FFMC and its infrastructure are key components to the commercial fisheries in

Manitoba. From the lakeside dock to the loading dock in Transcona, fishers benefit from the current

assembly and transportation system. Additionally, FFMC provides many important services to many

communities, particularly those in Northern Manitoba that have logistical disadvantages.

The Envoy has met with interested and prospective buyers/processors, however, to date, no one has

started construction of new infrastructure and it’s doubtful any will be in place as the province moves

towards open marketing. This makes it difficult to envision new buyers being ready to purchase

significant volumes of fish as of July 1st, 2017. As such, the Envoy believes that it is imperative for

FFMC to continue operations until such a time that there are other viable options available to fishers.

The Envoy is aware that some fishers are ready to transition immediately into the open market,

however, it is also the opinion of the Envoy that the majority are not.

6. Federal and Provincial Government Collaboration – the Envoy recommends that the Federal

and Provincial Governments work collaboratively throughout the transition to ensure continuity and

a smooth transition for the fishers in Manitoba. Because of the current structure of the industry in

Manitoba, the transition to open marketing will encounter some challenges. The provincial

government’s decision to withdraw from the FFMA, leaves the NWT as the remaining signatory to


the Act. That has significant implications for FFMC as it is already operating below capacity and any

further loss of volume will only add to their challenges. With that in mind the Federal and Provincial

governments need to align their agendas to maintain the operation of FFMC in some capacity, until

more viable options exist, which will allow for a smooth transition and ensure the social and

economic stability in many of Manitoba’s fishing communities.

As such, the Envoy urges the Province to be proactive and initiate immediate discussion

with the Federal Government to mitigate any potential disruption of FFMC’s business

operations which, in the opinion of the Envoy, would negatively impact a smooth transition

to open marketing.

7. Eco-certification – the Envoy recommends that the Province implement a 5-10-year eco-

certification strategy that will not only ensure the sustainability of the fisheries but the spinoff related

economic benefits created by the fisheries. The strategy must involve stakeholder “buy in” and

consider provisions for temporary losses of income by fishers and quota devaluation. The strategy

must also be cost effective and cannot put undue financial stress on fishers. Fishers may initially

receive a premium for fish harvested from a sustainable lake, but eventually, the Envoy believes fish

harvested from a non-certified lake may be discounted.

8. Quota buyout/retirement – The Envoy recommends that the Province consider a quota buyout

and or retirement program to limit the commercial fish harvest while implementing an eco-

certification strategy. Without a mechanism to control fishing pressure on Lake Winnipeg, there is no

possibility of sustainable management. The logical solution is to reduce quota’s. If there was a quota

buyback program, there will need to be legislation to ensure it is not just given away when stock

densities recover. Experts the Envoy has spoken to feel a 20% reduction in quota on the lake would

reduce harvests to sustainable levels.

9. 3-Species quota - the Envoy recommends that the Province revisit the 3-species quota (walleye,

sauger, lake whitefish) system. The current system encourages overfishing of the most valuable

species, the walleye, and encourages bushing of the lesser value species. The quota system,

introduced in the early 1970’s, is obsolete and does not meet the precautionary principles for fisheries

management of these three species and likely would be changed as part of an eco-certification

strategy. It also lacks flexibility, which does not allow for sound biological management of the

harvested species. There is no capacity to reduce harvests when stocks are in trouble. An option

would be to partition the quota into relative annual harvest per species that is flexible and adjusted

based on stock status ratings. To account for price differentials, fishers could be allowed to catch

more kilograms of the lower valued species, if stock status ratings dictate, to make up for lost

revenue. All of this would be predicated on better monitoring and management data.

10. Penalty for not accurately reporting harvest – SeaChoice was particularly critical of the lack of

data available, particularly related to by-catch. The Envoy recommends implementing a penalty

system with fines large enough to discourage this practice.

11. Interim export permits – the Envoy recommends that the Province again ask DFO to grant interim

export permits in advance of the opening of the market for sample of 25kgs. for market development

purposes.

12. Freight subsidy – in an open market the word subsidy is not “trade friendly”. The Envoy

recommends that the Province not be hasty getting rid of the freight program. Capped at $410,000,

the program does provide much needed assistance to some of Manitoba’s more remote fisheries. It is


recommended that the program be reviewed in the context of trade rules and that any changes be

phased in over time as the industry adjusts to the open market.

13. Transition assistance - the Envoy has identified that industry participants, particularly the fishers

may need transition assistance. The monopoly has been in place for 48 years and many fishers have

been heavily reliant on the existing system. The open market will require fishers to utilize a different

set of skills, such as business development and marketing skills, if they choose to pursue other

marketing options. Additionally, access to capital is more difficult for some. Representatives from the

Department of Growth, Enterprise and Trade have provided the Envoy with a quick reference list of

programs available and has assured the Envoy that they will be reaching out to fishers and

communities to provide assistance. The Envoy recommends that the Province take a proactive

approach to disseminating this information and work with industry participants to pursue new

opportunities created by the open market (Appendix 1).

14. Welcome letter – the Envoy recommends that the Province provide the industry with a welcome

letter that would state July 1, 2017 as the targeted date for open marketing. Fishers and other industry

stakeholders have been reluctant to plan too far ahead in absence of an “official date”. There are

fears that the transition period may be extended or that the Government may even revoke its

decision to pull out of the Act.

15. Fisher meetings after regulation, legislation and policies are changed – the Envoy

recommends to the Province that they hold follow-up meetings with fishers and industry

stakeholders to update them on the new rules of participating in the Commercial fishing industry.

16. Industry trade show – the Envoy recommends that the Province host an industry trade show to

“kick off” open marketing and give fishers and buyers an opportunity to meet and interact.

Additionally, other stakeholders like equipment suppliers could be invited to participate to generate

more interest.

17. Fish Council/Industry Arm – the Envoy recommends that the Province help fishers organize and

set up an industry arm made up of fishers, like the Manitoba Pork Council, Manitoba Canola

Council, Manitoba Corn Growers, Manitoba Beef Producers etc. Once organized the Fish Council

would be responsible for:

Industry promotion and awareness

Traceability

Sustainability and Eco-certification

Environment

Fisheries Improvement Projects

Lobbying – an industry voice

Research

Other

This organization could be funded by a checkoff or royalty program.

18. Income stabilization programs – the Envoy is recommending to the Province that they review the

feasibility of providing the commercial fishing industry with an income stabilization program similar

to those available to agricultural commodities in the Province.

19. Insurance - the Envoy recommends that the Province look at the feasibility of providing a “crop

insurance” type of insurance program for fishers.


Notable

Equity Position in FFMC – in the discussions with prospective fish buyers/processors at least two entities

have told the Envoy that they would consider taking an equity position in FFMC if the Federal Government

wishes to divest itself of the Crown Corporation and its assets. Because this document will become public

and due to proprietary commercial information not being releasable under the province’s Freedom of

Information and Protection of Privacy Act, both have asked to not have their names divulged.


Appendices

Appendix 1 - Manitoba Freshwater Fisher Quick Reference Guide

Program Name Description of product or service Contact Information

Small Business Development

(Entrepreneurship

Manitoba)

Access to capital, business information, &

counselling, business plan coaching, market

research, advisory services and business

training and skills development.

Entrepreneurship Manitoba T: (204) 945-8200 TF: 1-855-836-7250 (Wpg) TF: 1-855-542-5113 (Brandon) http://www.entrepreneurshipmanitoba.ca/

Cooperative

Development Services

(Growth Enterprise and

Trade)

Cooperative Development Services (CDS) is a

branch of Growth, Enterprise & Trade that

provides support and guidance to

entrepreneurs who choose the cooperative

model.

Dena Hunter T: (204)-726-7003 Jamila Bachiri T: (204)-239-3883 http://www.gov.mb.ca/jec/coop/

Manitoba Trade &

Investment


Trade)

Manitoba Trade and Investment's mission is

to help build the Manitoba economy through

increased exports

Alfred Durhack T: (204) 945-1722 TF:1-800 529-9981 https://www.gov.mb.ca/trade/aboutus.html

Workforce

Development

(Education and

Training)

The Workforce Development Division's lead

responsibility is to enhance Manitoba's

economic stability and prosperity. Through a

holistic approach, WD considers individuals,

employer and organizational barriers and

overall needs of our Province, while fostering

and strengthening partnerships in the

community to respond to labor market needs.

Lynette Plett T: (204) 945-1722 http://www.gov.mb.ca/wd/index.html

Communities

Economic

Development Fund


Trade)

The Communities Economic Development

Fund (CEDF) is designed to provide

Aboriginal people with financial assistance to

start or expand small to medium-sized

businesses in northern Manitoba

Oswald Sawh T: (204) 945-1722 TF:1-800 561-4315 http://www.gov.mb.ca/cgi-bin/exit.cgi?http://www.cedf.mb.ca

http://www.entrepreneurshipmanitoba.ca/

http://www.gov.mb.ca/jec/coop/

https://www.gov.mb.ca/trade/aboutus.html

http://www.gov.mb.ca/wd/index.html

http://www.gov.mb.ca/cgi-bin/exit.cgi?http://www.cedf.mb.ca

http://www.gov.mb.ca/cgi-bin/exit.cgi?http://www.cedf.mb.ca


Program Name Description of product or service Contact Information

Business Development and Growing Forward 2

(Manitoba Agriculture)

Manitoba Agriculture creates the environment that accelerates growth in the agriculture, agri-food and agri-product sector.

Growing Forward 2 is a five-year agricultural policy framework agreement among federal-provincial-territorial governments. It is the foundation for coordinated government action to help the agriculture and agri-food sectors become more profitable, competitive and innovative.

Laurie Crowe T: (204) 945-1230 http://www.gov.mb.ca/agriculture/

Manitoba Marketing

Network Inc.

The Manitoba Marketing Network delivers

marketing workshops as well as business

counselling and business mentoring services to

Manitoba’s small business community.

Brad Franck T: (204) 945-1230 TF:1-855-836-7250 http://www.manitobamarketingnetwork.ca

http://www.gov.mb.ca/agriculture/

http://www.manitobamarketingnetwork.ca/


Appendix 2

Lake

(Commercial Fishery)

Region Number of Fishers (including hired men)

Total Annual Lake Quota

(kg)

10 Yr Average of

Annual Walleye Harvest

10 Yr Average of Annual Harvest

(All Species)

Chitek Interlake

21

unlimited 52,313 82,597

Inland Interlake 11,713

Cedar Northwestern 46 496,600 183,643 514,987

Swan Western 20 25,000 7,793 50,589

Moose Northwestern 45 215,700 26,023 192,790

Talbot Northwestern 2 12,500 4,007 23,469

Little Limestone Northwestern 2 9,100 2,375 5,032

William Northwestern 7 45,400 0 28,928

Braken Northwestern 2 9,100 175 1 ,414

Kipahigan Northwestern 6 13,700 7,871 26,596

Burntwood Northwestern 6 19,600 9,521 46,281

Sisipuk Northwestern 5 45,500 17,480 25,633

Guthrie Northwestern 5 10,000 1,779 14,210

Kisseynew Northwestern 6 1 1 ,ooo 1 ,932 22,479

Limestone Point Northwestern 3 9,600 2,063 7,480

Batty Northwestern 3 4,800 1 ,590 4,170

Naosap Northwestern 1 100 12 4,210

Wekusko Northwestern 1 81,100 6,343 31 ,805

Total

181 336,633


Appendix 3 – Meeting Presentation Slides


Appendix 4

fisheries envoy final report - manitobathe freshwater fish marketing corporation was established...

Documents