Good morning to you, Mr. Chairman, and members of the international trade committee. My name is Ian MacPherson and I'm the executive director of the Prince Edward Island Fishermen's Association. Today I'm joined by our association president, Mr. Craig Avery, who has over 40 years of experience in the commercial lobster fishery.
Traditionally, the lobster harvesting sector may not be directly involved in international trade. However, our intent today is to give the committee an overview of the Prince Edward Island lobster industry from a harvester perspective and the importance of expanding markets over the past several years.
The P.E.I. Fishermen's Association, PEIFA, represents close to 1,300 harvesters on Prince Edward Island. Although our primary species is lobster, our members also harvest herring, mackerel, halibut, bluefin tuna, snow crab, and scallops. The fishery, along with agriculture and tourism, is one of the top three economic drivers of the Prince Edward Island economy.
One of the primary reasons that our organization wanted to present today was to comment on the significant change that has taken place in the lobster industry over the past five years, and how our organization is working diligently to prevent a return to wild price swings of the past. We see market diversification as a key component to an overall strategy that will provide suitable returns to all components of the supply chain. For today's discussion we will focus on export and trade in lobster, although many of our discussion points can be transferred to other species.
As recently as 2012, the price paid to harvesters for lobster was at levels that were significantly lower than prices paid in the previous 10 years. With escalating operating costs, this rendered many fleets in Atlantic Canada unsustainable at prices that were in the range of three dollars per pound. As a result of a gulf-wide tie-up, harvesters made a strong commitment to change their industry. Although a number of programs were in place, such as reducing and retiring licences and increased sustainability measures, the harvesters realized that we were too dependent on several traditional export markets.
Historically, Prince Edward Island has produced much more processed lobster versus live lobster. Past ratios of 80% processed lobster versus 20% live lobster were the norm. We are seeing this ratio lessen due to the addition of more live storage on P.E.I. However, processed product is still the primary market for most of our lobster.
Although there are co-operatives where fishers are involved in both harvesting and production, most harvesters deal with commission buyers who sell to plants on and off the island. In the past two years we are also seeing more harvesters become directly involved in live lobster export.
Many parts of the supply chain have worked hard over the past three years to improve the financial return to harvesters; however, continued work needs to be done. The traditional markets of the United States and Europe continue to be important. However, with the doubling of catches over a recent six-year period, the development of alternative markets is critical. To put this increase in perspective, the lobster catches in P.E.I. increased from 16 million pounds to 30 million pounds during this period. That's an annual number.
This recent expansion of Asian markets over the past five years has been a contributing factor in increasing financial returns to the harvesters. Much of this increase in sales has been attributed to the emerging middle classes in countries such as Korea and China, where items such as lobster were not affordable in the past.
The PEIFA has invested in our own brand that is owned and controlled by the harvesters. Although we are still early in the stages of market development, we are seeing a keen interest from international buyers and consumers who are seeking a more direct connection with the harvesters. From a harvester perspective, it is critical that any trade agreements include clauses that address factors such as resource sustainability, fair labour practices, fair pay components, and conducting fisheries that are not harmful to the surrounding environment.
The PEIFA and Fisheries and Oceans Canada are working on a number of regional initiatives that will contribute to more efficiency in our fishery. The owner-operator model that works in many countries around the world is strong and effective in Canada. Organizations such as the PEIFA strongly support the continuation of these independent businesses. Each of our captains has a significant financial investment in their fleets, which translates into a direct connection with our fishery. It is important that the focus of any pending trade agreements not be solely based on increasing trade volumes. The lowering of the current tariffs are projected to have a positive effect on the Canadian lobster industry; however, the focus of market expansion should be increasing the value of existing exports versus increasing exports at all costs. This will require a slight change in focus from both federal and provincial governments.
In the past, Canada has held a higher global position in exporting seafood than our current ranking. It is important that this be kept in proper perspective so we are not seeking export growth at the expense of resource sustainability.
The PEIFA and our Master Lobster brand are seeking strategic partnerships that will develop into long-term relationships that will benefit Canada and our trading partners. We understand that this does not happen overnight. However, having these goals in mind will greatly benefit Canada in the long term.
Our Canadian oceans are extremely valuable resources that we are privileged to harvest on behalf of the people of Canada. The harvesters of the Prince Edward Island Fishermen's Association take this responsibility very seriously and advocate that the factors of resource sustainability, fair labour, fair payer practices, protection of the environment, and the continuation of the owner-operator fleet be cornerstones of any agreements before they are ratified.