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« July 2008 Table of Contents

International Sourcing: Western Canada

Region expands seafood production beyond salmon

Almost 17,000 miles of Pacific coastline and thousands of freshwater lakes and streams make Western Canada one of the most vibrant and productive fishing grounds on the planet. The region is the driving force behind Canada's prosperity: Mineral wealth dominates the economy, yet seafood is a steadily growing industry employing more than 15,000 people and is the No. 1 food export. British Columbia is the country's third-largest seafood-producing province after Newfoundland and Nova Scotia. In 2006, B.C. seafood products were shipped to 70 countries and accounted for a total export value of $987 million.

Aquaculture has become one of the fastest-growing industries in Western Canada, mainly due to farmed salmon. Increased consumer demand, particularly in the United States, paired with the decline of wild fish stocks, has fueled the sector's growth. In 2006, the value of seafood products in British Columbia reached $788.8 million and the wholesale value increased 5 percent to $1.262 billion, with more than 50 percent of the value coming from farmed products.

The region's wild landings have dropped in the past few years. In 2006, landings were down 8 percent from the year before, according to the most recent data available from the Department of Fisheries and Oceans (DFO). Although landings were down, commercial fisheries still accounted for 72 percent of British Columbia's overall seafood production and 46 percent of the total value.

Groundfish, particularly hake and halibut, made up roughly half of the region's total harvest in 2006, which reached almost 150,000 metric tons, and about a quarter of both wholesale ($302 million) and landed ($155 million) values.

Five species of Pacific salmon are commercially harvested in British Columbia, with sockeye, pink, chum, chinook and coho contributing 11 percent of the wild harvest in 2006. The region's wild salmon landings dropped 14 percent to about 23,500 tons in 2006, although this is partly attributed to being an off year for pink salmon returns. Thanks to sockeye, the 2006 salmon season chalked up a wholesale value of $58.8 million, an increase of 76 percent from 2005.

Salmon's plight

Without question, Western Canada's seafood industry centers on salmon. The 100 or so farms, the majority found off the B.C. coast on the Broughton Archipelago, cannot produce fish fast enough for market demands.

While 85 percent of the region's farmed salmon is destined for the United States, the recent closure of the commercial and sport chinook salmon fisheries in California and Oregon could increase that number. Many believe salmon production could double the 73,000 metric tons produced last year.

"There is strong and increasing demand for our product," says Clare Backman, the director of environmental compliance and community relations at Marine Harvest Canada, British Columbia's largest aquaculture company, which controls approximately half of the region's salmon farms. "There's no unsold inventory. Production growth has slowed due to restricted access to new southwest farm sites."

One of the biggest challenges for the industry in British Columbia, according to Backman, is "resisting activist pressure to discredit conventional salmon farming and influence public policy to replace ocean cages with closed containment - an expensive and energy-hungry technology that has so far proven uneconomical to grow salmon."

And when there's a discussion about farmed salmon, it usually mentions sea lice. Environmentalists claim the decline of wild salmon and sea trout is especially high in areas where salmon farms are located. They say the location of salmon farms in red zones established several decades ago, areas on important migration routes of wild salmon stocks, are exposing immature fish to lice infestation and drastically declining wild stocks.

Sea lice are a naturally occurring phenomenon in salmon. While adult salmon can handle two or three of the parasites, they are deadly to juvenile fish. Much of the debate in Western Canada is over whether migrating pink salmon are being harmed by the salmon hatcheries. Salmon farmers and often the regional governments claim that's not so, and both sides have their own teams of scientists and are funding studies to support their claims.

"The answer is to get the farms away from the salmon," says Alexandra Morton, founder of the Raincoast Research Society. "Just separate the big fish from the little fish; just like nature does."

The salmon farmers disagree.

"Sea lice, measured as a health concern for our fish, are a comparatively low problem; far less of a cost than experienced in Norway, Scotland and Chile," says Backman. The money B.C. farmers spend on sea lice prevention is primarily to reduce the potential for infecting wild salmon smolts. Fish are harvested or treated with a therapeutant to control (kill) the lice from March to June when juveniles are migrating to sea.

"Sea lice have little effect on populations of wild salmon but can kill very small salmon at high infection levels," says Backman. "It is not possible to eliminate sea lice from the ocean as they are naturally carried by many resident wild fish."

Challenges ahead

Western Canada faces challenges far beyond sea lice, including the 40 percent increase of the Canadian dollar against the U.S. dollar over the last three years.

"Since the U.S. is our largest market, we find that products that were very successful when the Canadian dollar was 60 cents are less competitive now," says Christina Burridge, executive director of the B.C. Seafood Alliance. "Over time, we'll bring our costs down and find new ways to add value. But we expect the short term to be difficult although some companies are diversifying their markets, particularly to meet European demand.

"B.C. is a high-cost, low-volume producer and the costs are getting higher (fuel is up 55 percent in three years and going higher) while volumes are stable or declining as a result of sustainability initiatives," says Burridge. "So the key challenge is how to get more value from each fish. This will require changes to the way that we manage fisheries."

Some fisheries expect to add value with the Marine Stewardship Council's eco-label.

"In the next few months, we expect to see several fisheries certified under the Marine Stewardship Council," says Burridge. "B.C. sockeye, pink and chum, Pacific hake (whiting), Pacific halibut and spiny dogfish are all in full assessment with several others in pre-assessment."

Another product hitting the market is sablefish, or black cod, which is mostly being sold as high-grade sashimi.

Sablefish Canada recently began selling fish from its Vancouver Island farms, reportedly the world's first sablefish hatchery, enabling fresh fish to reach the market on a regular basis.

"Sablefish is a hearty but docile species, well suited to pens," says Bruce Morton, president of Sablefish Canada. "They are also indigenous to B.C. waters unlike the majority of B.C. Atlantic salmon production. Also, [they have] 
 considerably less interaction with wild stocks as sablefish don't mi-grate en masse the way salmon do."

"Because of its freshness, extremely low PCB and mercury levels, our sashimi-grade fish is presently receiving a 20 percent price premium over the wild Alaskan sablefish," says Morton.

The company will produce 500 metric tons of sablefish this year, 1,000 metric tons in 2009 and will increase to 5,000 metric tons in the next five years. Western Canada's expanding range of seafood products and the continued growth of niche products are only part of the strategy for global success. As pressure from cheaper imports from China and Latin America mounts, increasing the number of markets should help in attaining maximum value.

"Changes to groundfish management indicate that we might be able to increase shelf life by a week, making our products more competitive against tilapia and pangasius in the United States and opening up premium whitefish markets in Europe," says Burridge. "Similarly, reforming the salmon fishery would increase access to high-value fresh markets, reducing the number of fish that go to the can."

Maintaining traditional markets, namely the United States, in the face of higher operating costs, changing economies and increasing competition is vital to any business. Fulfilling market demand while at the same time addressing environmental concerns and long term sustainability are going to be key issues for Western Canada's seafood industry in the coming years.

Nick Gill is an author, writer and 
photographer based in New York and Lima, Peru