Thank you, Mr. Chair. About the only concern we have relates to the price of lobster.
I appreciate the opportunity to come up to deal with this issue. I will be attending the meeting tomorrow the member just referred to, with the minister in Moncton.
Our organization represents the lobster harvesters in Newfoundland. There are about 2,900 licence holders, but that number includes some who are relatively inactive or for whom lobsters are a relatively minor part of their livelihood, because there are parts of the province where lobster is not terribly abundant. There are others for whom lobster is the number one species. I noted that the average landed value per licence in the province of Newfoundland is $32,000, but it would be relatively little for some and higher for others. For some it's really the principal thing.
There are whole communities that are significantly affected by this issue, the lobster fishery being probably the single biggest source of income for the community. For example, in Mr. Byrne's district there would be quite a few. I know there was a meeting held there last night with a couple of hundred lobster fishermen in attendance, and none of them are going on the water. We're starting a tie-up this morning, because prices have gone to levels at which you don't even cover your costs.
It's probably 25 years since the price of lobster was as low as $3 a pound, which is what the current price was after it dropped 50¢ or 60¢ earlier this week. The break-even point, if you're depreciating your assets and running your business properly, is every bit of $5 a pound, and possibly more. When you get down to a price with a “3” in front of it, there's no way in the world that you're even covering your direct costs, let alone contributing to overheads.
Crew jobs are being lost hand over fist. It's a tough situation. The landed value for lobster in our province is significantly below what it is in other provinces—roughly comparable to Quebec's, as I understand it, but well below the maritime provinces'. But as I said, for those who fish it, it's still a very important part of their livelihood, and for some of them it's really the number one part.
I apologize for not having a prepared presentation; this came together on short notice. But I appreciate the opportunity to raise these issues. We're certainly interested to follow the debate in the P.E.I. legislature in recent days and trying to understand exactly what's going on there, with an issue over some kind of joint federal-provincial initiative on lobster having been not exactly leaked, but it was prematurely made public knowledge. Our view is that what we have is an Atlantic-wide problem, and any solution should be looked at from the point of view of Atlantic-wide solutions as well, certainly insofar as the federal government's participation would be concerned.
In our judgment, there are essentially two categories of measures needed to deal with this situation. There is quite a serious short-term situation. We're being buffeted by the same forces that have caused problems in industries from automobile to aerospace to forestry, and so on. The world economic forces are making it a tough world in which to do business at the moment.
Lobster is seen as a luxury item, and in tough times, people tend to cut back on those types of purchases. Even though you can go into a supermarket and see lobster priced just as cheaply as hamburger, people buy hamburger because they can't afford lobster. That's the psychology, even though if they looked at the price tag a bit more closely they might say it's not a bad deal. We had Mother's Day specials listed this past weekend in St. John's for under $6 a pound retail, which for lobster is exceptionally cheap. It's great for consumers but an absolute disaster for primary producers, because that's not the price to the harvesters. That's the price with two or three middlemen in between.
So there are really two categories of things needed. One is short-term, for people who are in dire straits on a short-term basis, and the other is longer term. The statement issued by the Premier of P.E.I., or at least a version of it that was published in the press, certainly touched on a number of items that would be useful to pursue in dealing with the situation, including emergency inventory purchases of live lobster, an industry rationalization program, a low-interest loan program, flexibility in the EI program, and marketing and product development. So those are issues. I guess the latter ones are perhaps more provincial in scope than federal. The others have a significant federal flavour to them.
In particular, in terms of doing something quickly, the EI program probably lends itself to this fairly well because of the provision for pilot projects. I believe it will be possible through that program to do something relatively quickly to meet the need. Presumably in the meeting tomorrow we'll be getting into some of the detail around that.
It seems to me that, in terms of addressing the problem, we have to try to find solutions that don't add to the problem. In other words, right now we have a serious inventory problem. We don't have processed lobster in Newfoundland. Our lobster is pretty well all sold live. We don't have the canning and things that they have in the other value-added packs that are more prevalent in other provinces. But some of those markets, I understand, are really badly flooded with inventory. It would seem to me that something that adds to the inventory problem is probably not the best direction to go in. Something that maybe pulls back on the supply to try to get the inventory more in balance with the demand would be the direction that makes sense to me. It would happen to coincide with the conservation objectives as well, because it would give the resource a bit of a break.
In the long term, clearly, rationalization of the fleets is critical. Most of the fishing fleets in Canada are out of whack with the available resource. If we're going to compete with other countries that are selling into the same markets as we are, I think it's important for people to realize that, virtually without exception, the other countries are contributing government or public money into a rationalization program to buy out effort from the fleets. We have a rationalization program in Canada, but the entire bill is being passed to industry, which doesn't have the dollars to afford it.
I'll let it go at that and leave it to my colleagues, and I'll be glad to address any questions thereafter.