10 March 2006

FPI, Tom Rideout and the future of the fishery

Fishery Products International (FPI) released a statement today on its plans for operations on the Burin Peninsula.

One of the points made was that cost savings from exporting undersized yellowtail flounder to China for processing effectively subsidized FPI's processing in Newfoundland and Labrador:
A sensible solution must be found for non-commercial fish. An incorrect perception exists that the export of small and medium-sized yellowtail flounder costs sustainable jobs in Newfoundland and Labrador. In FPI's operations, the opposite is actually the case. With catching costs already incurred, exporting raw material that is too small for the Company to process on any commercially viable basis effectively reduces the unit production cost of the fish that is processed in this province. In effect, any means to generate value from non-commercial fish, including shipping it outside Canada for processing, actually reduces the losses of an operation like Marystown. As FPI has informed the other stakeholders, failure to arrive at a reasonable and responsible solution for non-commercial raw material will collapse the economic basis for pursuing this fishery. [Emphasis added]
This sort of economic reality makes one wonder why Tom Rideout said only a few weeks ago that he wouldn't sanction exports of fish for processing elsewhere.
"I'm telling them and I've told them, don't go coming banging on my door for approvals to ship 60 per cent of their groundfish quotas out of this province. It's not on," Rideout said.

"And if that means you crumble, you crumble."
Maybe Tom will have to reconsider his comments. That is, he'll have to reconsider them unless the provincial government is prepared to inject hundreds of millions of dollars into FPI.