Thank you very much, Mr. Weston and members of the committee.
I'm very pleased to be here to address the committee and hopefully add a bit of an insight into things to do with lobster. I am a licensed lobster fisherman here in Alma. My boat is over at the wharf most of the summer and all fall. I've been fishing here for about 20 years. Before that, I had a serendipitous route to get here as a lobster fisherman. I'm originally from central Canada, from Ontario. I received my education up there, both at high school and university, and found myself down in Atlantic Canada and wound up in the lobster fishery as a lobster fisherman. It's been a wonderful life, with great times, a lot of friends, a lot of adventure. Being on this bay here—which I'm sorry that you cannot be, at this time, probably—has been just a tremendous opportunity.
I've been involved in the wholesale business, the retail end, marketing. I've been to Europe on different things with lobster. I've been at the U.S. Boston show. I've been responsible at different times for getting rid of a million-dollar inventory for one of the companies I work for. But nothing beats the experience of being on the lobster boat. I hope some of you can come back in the summer to take advantage of our beautiful scenery and the enthusiasm of our people concerning lobster.
There's been quite a learning curve; the fish politics are intense. The Alma Fishermen's Association has been very supportive. It's an interesting group, a small group, and one that belies the thing that says that individuals have no part in the fishery. The individuals really make the fishery. It's based on individual enterprise, and it's very important that all these voices be heard, even though it may be very difficult. We appreciate the opportunity to speak.
The conditions for the production of lobster over the last number of years have been very ripe. The cod fishery collapsed, unfortunately, but it eliminated one of the major and top predators for small lobster. The sea urchin fishery in different places has been a big help, because it has produced more kelp—the sea urchins feed on kelp—and there have been a lot more places for hiding for lobsters. The water's warmer. Even a fraction of a degree makes a big difference in the production of lobster. There have been conservation size increases and other measures. I have gauges here for any of you who aren't familiar with this to see how some of the very small increases have made big differences in the overall production of lobster, the pounds per animal.
We have a local condition here occasioned by the Riverview Causeway, which was established in the mid-1960s. It stabilized the river from Moncton down to this area. It increased the availability of good bottom area for breeding lobsters. There's been a lot of concern over the last number of years that they're going to rip up the causeway. That's going to kill our fishery; it's going to put silt down here and cause a lot of problems with our fishery. It's been a million-dollar project, for fish passage, and we've always been totally against it.
During the last number of years here, we figure that somebody has been putting on pressure to decrease the wholesale price, beginning in 2007. We saw a decrease of about $1.15 over the previous eight years. During that eight-year period from 1999 to 2006, the demand for lobster had increased. There was a good market for lobster, and markets increased all over the place. There was no trouble getting rid of lobsters at a reasonable and good market price.
During that time, our average wholesale price was in the range of $6.10 to $6.20 a pound. In 2007 it dropped by $1.15, and in 2008, it dropped by $2.20. That left the fishermen on average in the fall with a return of approximately $3.80 or $3.90 a pound. We suggest that for somebody, this represented a $250 million windfall profit on their enterprise.
The buyers, the processors, all that—we had no control over whatsoever. That's a quarter of a billion dollars that have disappeared from this industry.
With this, there have been consistent retail prices in Toronto, central Canada, Vancouver, remaining constant at around $13, $14. Lobster, to the contrary, has not been overpriced. There has been no particular drop in demand other than the short-term promotional strategies that various retailers have had.
For us, lobster is still a very competitive product. The culture of eating lobster hasn't changed dramatically in the last year and a half. The economy is off somewhat, but as far as we can tell, lobster continues to be a very desired and very welcome product.
So when we look at the average fall shore price, it was at $6.10 over the eight years between 1999 and 2006, and in 2008 we're down to $3.90. What we're saying here is that that is not sustainable for more than a very short period of time for many of us.
We have an indicator here that a bag of salt around 1995 cost approximately $5. Today that same bag of salt costs $10. Believe me, you use a lot of salt in the fishing industry. Fuel has increased from 24¢ a litre in 1999 to 62¢ a litre in 2006 to $1.18 a litre through most of 2008.
The industry standard for markup is usually about $1 every time lobster is handled. I sell it to the buyer, the buyer sells it to somebody else. There's a dollar added, there's a dollar added, and there are maybe two or three people in the middle.
Historically buyers have been in somewhat of a competition to try to buy the product, but latterly we've found that buyers have been cooperating to set the shore price. When I first started in the lobster business and was party to a little different aspect of this—not the fishing but the retail-wholesale buying—there was definitely a lot of collusion at the beginning to establish a shore price before the season opened.
What we're suggesting here is that the competition among buyers has decreased dramatically. There's been a consolidation of the industry across the board. With virtually every other type of commodity...lobster fishing, lobster product, doesn't exist in a vacuum; it exists in the general overall economic climate. Today there is virtually no competition in the buying and marketing of lobster.
We don't see a lot of change happening soon in this part of the industry, whether there's a depression or not, because even two years before the depression or recession came—however we want to phrase it—we have seen a general pushing down of that wholesale price to the fishermen. This has been across the board. This has little and minor fluctuations; usually it's a little higher in the spring and then it fades off very quickly.
What we're saying is no matter whether a person happens to be overcapitalized or has the appropriate amount of money involved in the business, this is not going to be sustainable. For myself, I'm a little bit from the old school. I have an older boat, it's paid for, the truck's paid for, all this other stuff, and I'm at a point in life where money is interesting, but it's not the main motivator in life. Even last fall—I'm not going to be able to sustain that again.
This summer, this fall, there are a lot of us looking at a situation where we're not going to be able to pay for the boats, we're not going to be able to pay for our help, and we're not going to be able to pay for bait. What are we going to have to do? We're going to have to hold on for a little bit of time to see what goes on. There are people seriously considering not fishing this year, not because there's no lobster—we've worked pretty hard to establish conservation methods here in New Brunswick, in the Bay of Fundy—and not because there's no market, as there seems to still be a big demand for lobster, but because the price is not there.
I can hear a bell ringing, and I suppose that's the end of the discussion. Thank you very much.
