N.L.’s destroyed salmon tab: $33M

Daniel MacEachern
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Critics slam federal payouts for salmon anemia compensation

The federal government has paid more than $33 million in compensation for five separate outbreaks of infectious salmon anemia in Newfoundland and Labrador, according to documents obtained by The Telegram.

In response to an inquiry in August from St. Barbe Liberal MHA Jim Bennett, the Canadian Food Inspection Agency — which had previously said it wouldn’t disclose compensation amounts paid to producers ordered to destroy salmon infected with the disease — provided the amounts paid to two New Brunswick companies in each of the outbreaks, dating back to July 2012.

In all, $33.1 million has been paid to Gray Aqua for three outbreaks — in Butter Cove, Goblin Bay and Pass My Can Island — and Kelly Cove, a division of Cooke Aquaculture, for two outbreaks — in Pot Harbour and Manuel’s Arm. The amount paid per fish varies by the outbreak, as compensation is intended to reflect market value for what the company would have received for healthy stock, to a maximum of $30 per fish.

Bennett, speaking to The Telegram, said the provincial aquaculture industry isn’t sustainable if it has to depend on compensation to be viable.

“If the feds realize how much they’re paying in compensation and decide to pull the plug on this type of reimbursement, then the industry simply couldn’t survive,” said the Liberals’ fisheries critic, adding the compensation makes aquaculture farming a no-lose prospect for producers.

“They go into a pristine environment — our waters — they take no precaution measures like closed containment, which would eliminate this completely.”

The provincial industry’s largely open-pen system results in farmed salmon catching diseases from wild stock — or infecting the wild stock, said Bennett.

“This can only be resolved by going to closed containment, either on land or using tanks in the ocean. Either technology would work. It is more expensive, but it’s nowhere near as expensive as having to pay this compensation for diseased fish.”

The economic effects of diseased fish aren’t felt just by the producer, noted Bennett — destroyed fish don’t benefit the processing and grocery industries either, he said.

Provincial Fisheries and Aquaculture Minister Keith Hutchings said there have been challenges to the aquaculture industry in the province, but contends overall it’s doing well.

“We recognize some challenges. We’ve invested heavily in our biosecurity,” he said. “We’ve gone through a consultative process now with industry which has been very receptive, developed a whole lot of information and feedback — we’ll look at that in terms of growing into our next five years and what we need to do to continue to improve.”

As for the amount of compensation paid, Hutchings said reimbursement has to be enough of a motivation for producers to report salmon outbreaks so the damage can be minimized and preventive measures taken.

“If a producer — whether producing cattle, sheep, vegetables or farmed salmon — the incentive now, if they see an irregularity in their product they’re growing, is to report that, and that the disease is then recognized, and the process starts to eradicate it,” said Hutchings.

If the reimbursement wasn’t there, producers would have less incentive to report disease, he said.

That’s not good enough, says Bill Taylor.

“Two wrongs don’t make a right,” said the president of the Atlantic Salmon Federation, a New Brunswick-based group that is heavily critical of salmon-farming methods and regulation. That producers might cover up outbreaks if they’re not compensated well enough isn’t a point in the industry’s favour, he said.

“If they would be inclined to, then that tells me that there needs to be better checks and measures, more effective control and management and monitoring by both the provincial government in Newfoundland and the federal government.”

The provincial industry is unsustainable if it requires that much compensation for producers to keep going, said Taylor.

“We certainly understand that some things happen to farmers, salmon farmers included, that are beyond their control, and there’s insurance and certain avenues for compensation available for failures and things of that nature,” said Taylor.

The problem with Newfoundland’s industry, he said, is its largely open-pen system.

“There are going to be continual issues like infectious salmon anemia, diseases and sea lice outbreaks, and pollution at the bottom of the sea floor that affect other species.”

The federation has warned the provincial and federal governments about potential problems with the industry.

“We take absolutely no satisfaction in saying ‘told you so,’” said Taylor. “That Canadian, Newfoundland taxpayers have to foot the bill to the tune of in excess of $30 million is an absolute disgrace.”

Newfoundland producers have “a sweet deal,” said Taylor.

“They’re using a public resource, which is our marine environment, which you and I own just as much as they own. They are paying next to nothing for the leases to put their sites there, and they are being paid handsomely in compensation for their poor practices. So when you have a disease outbreak, it’s very little skin off their nose, because they’re compensated for poor practices.”

Miranda Pryor, executive director of the Newfoundland Aquaculture Industry Association, called the compensation a security to keep the industry going.

“It’s no different, really, from all food-producing sectors, from the agricultural sector,” she said. “If this were to happen with chicken or beef, or say it’s an off-year for any crop production, like wheat and things like that — we’ve certainly known of instances over the years where unfortunately something does happen and the federal or provincial government has stepped in to help ensure an industry can continue.”

Pryor said the cost of transferring all provincial aquaculture production to land pens would be considerable, but that’s not the only factor, she said; raising salmon in a natural environment reduces risk factors for the farmed salmon, and she disputes the claim that contained pens would eliminate disease.

“It’s not their natural environment. Production levels have to be much higher so you have much more fish in a much more contained area,” she said. “There’s a lot of considerations.”

Pryor said she understands why the public would be concerned about compensation.

“For the most part, the companies may still break even, but there’s no benefit. The financial benefit that they would have made if the product could have been grown to market size would have been considerably more.”

In 2013, said Pryor, the industry produced about $180 million in sales.

“Obviously, yes, we share the concern, but we feel we have a long future ahead.”

A request for an interview with a Canadian Food Inspection Agency official was declined. A spokeswoman for the agency provided a written response on how compensation is determined.

“Compensation is determined on a case-by-case basis, following an assessment of the particular situation,” states the response. “To determine the actual amount of compensation, an assessment team would visit the premises. The assessment team would consist of CFIA veterinarians and may also include industry representatives and/or economists.”

Calls requesting interviews with Tim Gray of Gray Aqua and Glen Cooke of Cooke Aquaculture were not returned.



­Twitter: @TelegramDaniel



Organizations: Canadian Food Inspection Agency

Geographic location: New Brunswick

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Recent comments

  • david
    January 12, 2014 - 12:12

    Farmed salmon? Interesting concept...the bluesky potential is obvious, so no need to even bother to critique that at all...no point. Just think how successful it COULD ultimately be. Someday. If everything goes right. And there are absolutely no issues or complications whatsoever along the way. Oh, and it will employ 2,500 unskilled people, full-time, forever. So there you have it...a complete Newfie Business Plan to submit to government and get your free money. Again.

  • No farmed salmon for me thanks
    January 11, 2014 - 13:17

    No more giveaways ring a bell? My question to government, who admit they are hell bent on massively expanding this welfare scheme, is who's going to pay for the environmental damage that these companies are inflicting on our wild fish and environment? Doing something properly usually costs more than the easiest way. Competing with third world countries is a race to the bottom. Either move the operations to contained pens, or require the producers to change to less damaging species. It's not rocket science.

  • david
    January 11, 2014 - 13:13

    There's more money to be made from salmon anemia than from successful salmon farming. What all this R&D has produced is corporate EI. Welcome to the bizarre world of government and Atlantic Canada.

  • saelcove
    January 11, 2014 - 12:27

    Paid to fail great concept, can,t lose

  • Corporate Psycho
    January 11, 2014 - 09:04

    Hutchings thinks this is going well? For the Merchants maybe.