Surf Clam Decision Wipes Out 25% of Clearwater’s Quota
The federal government giveth, and the federal government taketh away. On February 22 the Department of Fisheries and Oceans Canada announced that Five Nations Clam Company is the recipient of a license to harvest one-fourth of the total allowable catch (TAC) for Arctic surf clams, effective January 1, 2018.
Five Nations is a new business partnership consisting of Premium Seafoods of Isle Madame, Cape Breton and a group of five First Nations from Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Labrador. It must now procure a vessel and make it capable of harvesting surf clams from Canada’s North Atlantic waters and freezing them at sea.
Halifax, Nova Scotia-headquartered Clearwater Seafoods, which previously enjoyed a monopoly on the resource, is not happy with the action and is pursuing legal options to address what it calls “this failure in public policy and abuse of power by the Minister [Dominic Le Blanc].”
A press release issued by the company stated: “The Minister’s decision will mean that middle class jobs are lost and valuable full time jobs are converted to temporary seasonal work in the Canadian fishery.”
Clearwater, which purchased licenses and quota to participate in the fishery, has sunk hundreds of millions of dollars to develop the fishery and the market, including $156 million of investments in the last three years.
“In this decision to expropriate investment value and undermine the good faith capital investment decisions of the private sector, the Minister has destabilized the investment climate in the Canadian fisheries and the Canadian natural resource sector,” claimed the company.
It continued: “Prior to the Minister’s announcement in September 2017 of his intent to expand participation in this fishery, Clearwater and the Nova Scotia Mi’kmaq communities had proposed a commercial arrangement to expand indigenous participation consistent with government goals. With his decision today, the Minister has disregarded the Nova Scotia Mi’kmaq led initiative to independently participate in this fishery.”
The company added, regrettably, that it will now “be required to move expeditiously to make adjustments to our business in order to maintain shareholder value, reduce the overcapacity that has been created by this decision, and protect the value of the hundreds of remaining jobs related to this fishery in coastal communities of Atlantic Canada.
Clearwater has previously held three licenses covering 100% of the TAC for arctic surf clams. In 2016, the company’s revenue from Arctic surf clam sales was $91.9 million, which represented approximately 15% its total revenue in 2016 ($74.2 million and 16.6% for the 39 weeks ended September 30, 2017). While the loss of direct access to 25% of the TAC for this species is expected to impact Clearwater’s operations and financial performance, the extent of that impact is not ascertainable at this time.
Founded in 1976, Clearwater is one of North America’s largest vertically integrated seafood companies and the largest holder of shellfish licenses and quotas in Canada. It has built a lucrative market for frozen Arctic Surf Clams in East Asia, and is recognized globally as a high quality supplier of a diversity of eco-certified species including scallops, lobster, langoustine, clams, whelk, coldwater shrimp and crabs.