Crab harvesters will lose out on $30M because price-setting panel sided with processors, says Efford

With the time-sensitive snow crab season set to begin in a few days, fish harvesters in Newfoundland and Labrador are once again talking about tying up their boats due to the price of crab.

One vocal critic says the new decision will cost harvesters as much as $30 million from a lucrative fishery that has become the economic mainstay in the industry since the cod collapse of the early 1990s. 

The province's price-setting panel sided with the Association of Seafood Producers on Monday evening, setting a price floor of $2.60 per pound with the ability go up as market factors change.

The panel rejected a formula proposed by the Food, Fish & Allied Workers union, which was closely tied to the formula suggested by an independent report at the end of last season.

"There was a better way to do this," said FFAW president Greg Pretty. "The work was already done by Glen Blackwood in his report. The Blackwood formula provided a way for harvesters to be paid a fair market share, but that was tossed aside for a formula that is not tied to information harvesters can trust."

Fish harvesters took to social media to express their concerns, with some saying they weren't prepared to go fishing for $2.60 a pound.

John Efford, the Port de Grave fisherman who led protests throughout March, said when he heard the price setting panel had chosen the ASP formula his first reaction was one of disbelief.

"We were just totally overlooked. We had a fair — not one sided — but a fair and good proposal in," he told CBC News.

Efford estimates that fish harvesters will lose out of $30 million this year through the adoption of the ASP formula as opposed to the FFAW recommendation. From his perspective, it's not clear why the panel decided to accept the ASPs formula.

"It seems like that it was set up to fail from the beginning. It was never a decision to pick the FFAW formula. It was to disprove it, whichever way they could and not back up why they would choose the ASP," he said.

WATCH | John Efford said he's not going to fish yet this year, and it's unclear how many others will join him:

Disbelief and defiance from fish harvester hero John Efford over price of crab

8 months ago

Duration 1:46

John Efford says the $2.60 per pound that Newfoundland and Labrador’s price-setting panel has established is a number picked out of the air. While fishermen kept their boats tied up for six weeks at the start of last season, action that was deemed illegal, Efford played coy about any action this year. He said there’s a plan in the works on how to deal with this decision.

Getting ready to fish is more than just making sure all the gear and boat maintenance, he said, it also includes making sure other factors are in order.

"The factors are not in line for me to go fishing. I am not going fishing till we get this straightened out," he said.

Last year's crab season was halted by a six-week protest, in which harvesters refused to fish for $2.20 per pound. Harvesters eventually went on the water for the same price, which rose to $2.60 per pound by the end of the season. An arbitrator later ruled the fisheries union was on the hook for damages suffered by processors resulting from the tie-up.

While Efford wouldn't say if anything was being planned in protest like a demonstration, he said discussions were happening.

"There's a plan being formulated on how to deal with this. That's all we could say," said Efford.

The ASP has not yet commented on the price-setting decision. 

Panel explains decision

The FFAW formula would have seen harvesters paid on a sliding scale, starting with 100 per cent up front in the beginning of the season, and going down to 80 per cent as the season goes on.

This was a departure from the Blackwood formula, which proposed 80 per cent up front throughout the season to ensure harvesters were paid the same whether they fished early or late in the season. 

In a written decision, the panel said it could not accept the FFAW formula because the sliding scale created potential for a situation "where the harvesters would be in a position of having to pay the processors back an overpayment at the end of the season."

While the FFAW argued the chances of that were slim, the panel said it could not select a formula where fish harvesters could be indebted to processors.

On the other hand, the panel said the ASP formula was "not a Blackwood formula," but was based on historical crab prices and tackled some of the issues raised in the Blackwood report.

"The ASP offer provides a formula that addresses the FFAW's requirement that there be no initial holdback or 'variance,' and does not predict a situation which could result in a harvester receiving an overpayment that would need to be repaid to the processor or otherwise adjusted at the end of the season," the panel's decision reads.

However, not everyone who sat on the panel was satisfied with the decision they reached.

In a Facebook post, panel member Earle McCurdy, a former FFAW president, voiced his displeasure with the decision as well as his dissent.

He said the panel was put in a difficult position because of the recent Fishing Industry Collective Bargaining Act amendment that put the panel in a "straitjacket" where they had to use final offer selection from price formula offers submitted.

McCurdy wrote, "The panel would have potentially been in a much better position to be of service to the industry in finding an acceptable basis for all concerned for the 2024 fishery, if it had been given the authority to apply interest arbitration to the price formula as well as to conditions of sale (i.e. had not been bound to accept one of the submissions in its entirety.) Unfortunately, the panel's hands were tied in this regard."

The FFAW took issue with several facets of the ASP formula, saying it had no mechanism to benefit harvesters as the market increases during the season. 

"ASP caps harvester share at 37 [per cent] once the market reaches $8.02 CAD, contrary to historic pricing shares that increases the harvester share as market prices increase," reads a release from the union on Monday evening.

The panel's decision came hours after the provincial Fisheries Minister Elvis Loveless wrote to the FFAW, formally agreeing to terms set after protests two weeks ago. The agreement allows fish harvesters to sell their catch out of province, leading some to ponder if it's better to sell in Nova Scotia this season.

Efford said outside buyers are already reaching out to him and have offered $3.25 per pound.

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