Clearwater Seafoods is positioned for improved profits in 2020 after a favorable ruling from Canada’s Department of Fisheries and Oceans (DFO) regarding a controversial license for the Arctic surf clam fishery, and due to a recently signed joint venture agreement with Quin-Sea Fisheries.
DFO Minister Bernadette Jordan confirmed on 15 January the company will retain all four licenses for the Arctic surf clam fishery, with a value to the company of around CAD 100 million (USD 75.2 million, EUR 68 million). In 2018, the Canadian government, under previous DFO Minister Dominique LeBlanc, moved to transfer a license for 25 percent of the fishery to a partnership of First Nations. But the deal was undone when it came to light that the partnership was not formed before a mandatory federal deadline and that its leadership had familial ties to LeBlanc.
A new process for awarding the Arctic surf clam license to a First Nations company or consortium was supposed to begin in late 2019, but Jordan said at a January 2020 meeting with provincial leaders in Halifax the effort has been delayed.
"We are taking our time to look at the whole process and if there will be a new entrant," Jordan said, according to the CBC.
For 2020, Clearwater will retain control of the license, which permits the catch of 8,900 metric tons of surf clam, she confirmed.
"At this point, it is a one-year allocation," she said.
In March 2019, Clearwater signed a 50-year agreement with 14 First Nations communities in Nova Scotia and Newfoundland and Labrador that gives them a stake in the fishery. The agreement involves revenue-sharing, training, leadership development, and additional employment opportunities for the First Nations involved in the agreement.
"It is historic and, in my opinion, a great example of reconciliation," Miawpukek First Nation Chief Misel Joe said. "Fourteen First Nations communities adjacent to this resource are working collaboratively to ensure that benefits are shared among First Nations. This agreement creates meaningful employment opportunities for our community members without displacing others who have dedicated their lives to this industry and also need the jobs."
The agreement has the backing of local leaders, including local Member of Parliament Churence Rogers and Grand Bank Mayor Rex Matthews – primarily because it retains jobs in the communities they represent.
"My emphasis has always been about protecting the people in Grand Bank and the Burin Peninsula that are employed in this industry and it will remain my focus in moving forward,” Rogers said. “I will always support partnerships that protect the existing jobs in the surf clam industry, and I look forward to working with all stakeholders within this important process."
Matthews said he will continue to fight for Clearwater to retain the license in question.
“That’s what we’re hoping and that’s what we’re expecting,” he told The Telegram, Newfoundland and Labrador’s largest newspaper. “We can’t afford to take any cuts to the quota that’s going to have a negative impact on our region.”
Clearwater, based in Bedford, Nova Scotia, is the largest license- and quota-holder for shellfish in Canada, spread across scallops, lobster, clams, coldwater shrimp, langostine, whelk, and crab. It also operates fishing operations in Argentina and the United Kingdom. It had CAD 592.3 million (USD 445.5 million, EUR 402.7 million) in sales in 2018. Its FY 2019 sales total is not yet publicly available, but it had CAD 449.2 million (USD 337.9 million, EUR 305.3 million) in sales through Q3 2019, according to its latest financial release.
The Arctic surf clam continues to be a valuable part of Clearwater’s product mix, Smith said.
“With the reversal of the Arctic surf clam decision in early August [2018], we were able to convert our restored harvest access into record sales revenue for clam at lower costs and better margins than in the prior year,” Smith said in the company’s 2018 financial report.
In a separate move designed to help its bottom line, in mid-January, Clearwater signed a joint venture agreement with Quin-Sea Fisheries in an effort to keep a processing plant in St. Anthony, Newfoundland, Canada, at full capacity in light of a decline in the northern shrimp fishery. Quin-Sea Fisheries will assume managerial responsibility over the Anthony Seafoods Limited Partnership plant, while both companies will explore efforts to diversify the species processed there, specifically into crab and groundfish.
Photo courtesy of Clearwater Seafoods
