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National Aboriginal Fisheries Forum II October 2 – 4, 2012 Nanaimo, British Columbia Building a Commercial Offshore Fishery in Nunavut An Industry Perspective Presented by: Jerry Ward, CEO Baffin Fisheries Coalition 1


Nunavut Demographics • • • •

Territory status 1999 2,000,000 square kilometers 40% of Canada’s coast line Population of 30,000. 85% Inuit • 25 communities, only one inland • No road system connecting communities • Lack of Marne infrastructure, no offloading and docking facilities

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NAFO Area 0A & 0B

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Baffin Fisheries Coalition

Background – August 2000: The Minister of Fisheries and Oceans announced that Nunavut fishers would receive the entire Canadian share of the recommended Total Allowable Catch (TAC) of 3,500 tonnes (t) in the new Division 0A+1A turbot fishery - BFC formed as a coalition to gain critical mass to: own and operate harvesting vessels; implement training programs; implement research and exploratory fisheries; lobbying effort; 4


BFC Initial Objectives

• Lobbying efforts to increase Nunavut’s share of the fish allocations in its adjacent waters • Development of Offshore Fishery • Vessel acquisition • Exploratory and Survey work in the fishery • Supply of fish to onshore plant for processing • Organizing and implementation of fisheries training plans • Revenue sharing with participating members • Lobbying for Infrastructure development • Remainder to Operations.

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Baffin Fisheries Coalition & Niqitaq Fisheries Ltd. Ownership Structure (current)

Baffin Fisheries Coalition (BFC) Members (5) All Inuit owned organizations Hunters and Trappers Organizations (community based) (Incorporated 2001)

Niqitaq Fisheries Ltd. (NFL) Members (5) All Inuit Firm Status (Incorporated 2003)

Inuksuk Fisheries Ltd. (IFL) Inuit Firm Status Joint Venture 51% NFL (Incorporated 2004)

Oujukoaq Fisheries Ltd. (OFL) Inuit Firm Status 100% Inuit owned & Operated (Incorporated 2005)

Arluk Fisheries Ltd. (AFL) Inuit Firm Status 100% Inuit owned & operated (Incorporated 2010)

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Issues & Challenges • • • • • • • • • •

Lack of Marine Infrastructure (slide) Availability of financing Increasing share of its adjacent resources Training and worker retention Short harvesting season Lack of adequate science $ Crewing costs Distance from offloading facilities Distance from market Workers Compensation

• • • •

Strength of the Canadian $ (slide) Increasing oil costs (slide) Shrimp harvesting in north versus south Competing sectors :Offshore versus inshore; mobile versus fixed gear; small vessels versus large vessels


Planned Growth to Increased Ownership Position • 2001 - year 1 harvesting turbot in 0A • 2001 - 2004, harvesting via 100% royalty arrangements

• 2005 - first joint venture, vessel 1, 25% Inuit ownership • 2006 - second joint venture vessel 2, 51 % Inuit ownership • 2006 - increased ownership from 25% to 51 % Inuit ownership on vessel 1

• 2010 - purchased third vessel, 100% Inuit ownership • 2012 - increased ownership from 51% to 100% on vessel 2.

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Ownership Time Frame

• • • •

Lack of qualified staff Uncertainty of resource sustainability Need to fine tune membership Lack of financing for Inuit owned fishing companies. Needed to build positive history • Need to build strategic alliances, need for fish supply year round • Need to gain knowledge in all aspects of the fishing industry

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Nunavut’s Share of Adjacent Shrimp and Turbot Allocations

2011 Nunavut's Share of Adjacent Shrimp & Turbot Allocations

48%

52%

Nunavut (Adjacent) % Non Adjacent Users %

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0B Offshore Turbot Allocations

OB Turbot Allocations 2011

45% 55%

Nunavut (Adjacent) % Non Adjacent Users %

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Nunavut’s Share of Adjacent 2010Turbot Resources Nunavut's Share of Adjacent OA Turbot Resource 2011

Nunavut’s Share of Adjacent OB Turbot Allocations 2011

0% 45%

Nunavut (Adjacent) % Non Adjacent Users %

55%

Nunavut (Adjacent) % Non Adjacent Users %

100%

Nunavut's Share of Adjacent OA & OB Turbot Resource 2011 24%

Nunavut/Adjacent % 76%

Non Adjacent Users %

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Shrimp Allocations

SFA 0-3 Shrimp Allocations 2001

SFA 0-3 Shrimp Allocations 2011

18%

31% Nunavut /Adjacent %

82%

Non Adjacent Users %

69%

Nunavut (Adjacent) % Non Adjacent Users %

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The One That Got Away

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BFC Investment Summary 2001-2011 000’s

Description

BFC Cost

Leveraged

Total

Cash investment in vessels

4,000

10,000

14,000

Royalty sharing with members

5,485

0

5,485

Turbot for onshore processing

3,918

5,608

9,526

Training programs

1,659

10,689

12,351

Exploratory Fisheries

1,030

7,000

8,030

Salaries staff and Board

5,544

0

5,544

Travel & Accomodations

1,687

0

1,687

Rent

791

0

791

Total

24,414

33,297

57,414 15


Distribution of Revenue Sharing Investment in Owned Fishing Vessels

NFL now has majority ownership in three large factory freezer vessels: Inuksuk (trawler), Sikuvut (fixed gear vessel), & the Arluk (fixed gear vessel) –

Inuksuk: 62 m factory freezer trawler

Sikuvut: 43 m factory freezer fixed gear vessel

Arluk: 30 m factory freezer fixed gear vessel

Equity investment of over $4 million in vessel ownership


Training results Training for the fishery is provided through Nunavut Fisheries Training Consortium, which was established in 2005, as a not for profit training organization To March 31, 2012 funding for NFTC has been provided by various sources Government of Canada (HRSDC) Nunavut Offshore Quota Holders Inuit Training Organizations Government of Nunavut Nunavut Arctic College Nunavut Hunters and Trappers Organizations

$6.2 million $1.9 million $1.6 million $1.7 million $400,000 $ 80,000

Total Funding to March 31, 2012

$11.9 million

New funding for 2012-2014 – Government of Canada $2.2 million Other Partners - $2.2 million 17


Training Results Training Results - Successful Completions by course – 2005 – August, 2012 Pre-Sea MED/A1 – 24 offerings – 229 completions Fisheries Observer – 3 offerings – 23 completions Bridge Watch - 4 offerings – 31 completions Longline Technology - 1 offering – 8 completions Net-Making – 6 offerings – 57 completions HACCP/QMP /Processing Plant Training - 5 offerings – 57 completions Navigation – 2 offerings – 17 completions Advanced MED – 2 offerings – 17 completions Offshore Shrimp Processing – 1 offering – 6 completions Small Engine Repair – 3 offerings – 25 completions Fishing Masters IV – 1 offering – 7 completions Vessel Maintenance – 2 offerings – 23 completions Marine Diesel Mechanic – 1 offering – 3 completions Small Vessel Operator Proficiency – 28 offerings – 215 completions Total – 83 course offerings – 718 course completions Successful Completion Rate – 91%

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Distribution of Revenue Sharing –Exploratory/Research Fisheries

Since 2002, BFC has contributed over $1,030,000 in project funding , funds from other sources another $6 + million –

• •

• • • • •

Cumberland Sound Assessment and Fisheries Training Project – Improving Kite Technology for the inshore turbot fishery in Cumberland Sound – Char Surveys Cumberland Sound. – 0A turbot survey 2004, 2006, 2008, & 2010; shrimp survey in 2007 & 2009 Qikiqtarjuaq benthic stock assessment – clams As a result of turbot survey the 0A turbot allocation increased by 2,500t in 2006 to 6,5000t in 2010 South Baffin Arctic char project Role of women in decision making in the North Marine Stewardship Council application for turbot in Cumberland Sound Technology transfer mission to Atlantic Canada by Cumberland Sound fishermen Multiple Projects - Transfer of Winter Longline technology to Clyde River & Pond Inlet


Distribution of Revenue Sharing Supply of Turbot to onshore plant for further processing – From 2001 – 2007 supplied with 1418t (1,985t of harvest weight) from BFCs 0A turbot allocations. Also supplied 316t of CSFL 0A and 0B allocations – As a result plant was able to lengthen its production season substantially, and provide more employment at the plant – Over this period turbot supplied to the plant cost BFC more than $3.9 million directly., plus cost to the harvesters of another $4.8 million.


Distribution of Revenue Sharing with Members • From 2004 to 2011 $5,485,000,000 has been shared with members ($600,000 per year to $735,000 in 2010 to $900,000 in 2011)


Currency variations $ USD versus $ CAD 2001 – 2012 (Sept)


Fuel Pricing 2001-2010

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Infrastructure

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Infrastructure

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315pm -A- Panel - Industrial Case Study - JERRY WARD