What’s next for BC salmon farmers? - I needed to get this off my chest.
Good looking fish.
In September this year, the Canadian government unveiled its overdue plan to have the BC salmon farming industry transition from open net pens to closed containment solutions by 2029. I’ve had questions from clients on how the next few years will play out and whether this plan creates any meaningful economic opportunity for suppliers of closed-containment systems.
For those new to this blog, I’ll provide a trigger warning, I am a salmon farming zealot and make no promises of journalistic impartiality. I am deeply cynical of the motives of Justin Trudeau and the Liberal Party of Canada in striving to eliminate one of British Columbia’s most sustainable industries and do not believe they will put serious effort into salvaging the jobs and economic activity that will be lost. The transition plan, from inception, was a political move designed to help the Liberals cling to power.
Also note that this is an opinion piece and some of my knowledge may be flawed or imperfect or both.
Some background
BC has always been a political minefield for salmon farmers. When I was a technician on a salmon farm on Vancouver Island 25 years ago, it was not uncommon to deal with hostility and aggression from neighbors and other members of the community. I’ve worked and lived in several other production regions, and everyone thinks they have it bad, but nothing can touch BC for political toxicity as it relates to salmon farming.
Being a relatively new industry, compared to established industries like mining, forestry and fishing, salmon farming has been subjected to significant cultural shifts in the BC political landscape and is forced to contend with realities other industries avoided.
Anti-farmed salmon campaigns – US groups linked to Alaska salmon pumped millions into campaigns to discredit BC farmed salmon after the early days of salmon farming led to historically low prices for Alaskan salmon. These campaigns focused on creating fears around disease and sea lice, feed ingredients and various contaminants, and the perceived risk of Atlantic salmon colonizing coastal rivers. As time went on and the market for salmon grew, most of the US salmon companies dropped out of these efforts, and the focus shifted to environmental advocacy and the willful misrepresentation of facts. 100% of their claims were eventually disproven but disinformation held the day.
The Nature of Things – Canadians of my vintage grew up watching a CBC weekly environmental documentary series. The Nature of Things. The show had a massive impact on our generation. For many, it implanted a love of the natural world and led, in my view, to BC becoming a magnet for people with an environmental bent. The host, David Suzuki, a UBC professor, had a soothing low-key presentation style and told a good story. I studied aquaculture and started working in the salmon industry in the mid-1990s and had an “aha” moment when I realized that the Nature of Things was lying, distorting facts, and misrepresenting evidence about the salmon industry to support Suzuki’s environmentalist agenda. Most Canadians never questioned the things the CBC was telling them and still carry these lies today. Particularly among urbanites who rarely visit the coast and even fewer who have visited a salmon farm. My moment of clarity came as a result of working in the industry, if I had relied solely on media, I never would have questioned what I was told.
Salmon as an icon – migrating wild salmon are foundational to the cultural fabric of the province. They were a critical food source for First Nations even deep into the interior of the province and remain an important cultural symbol to this day. While prepared to ignore many of the demonstrated impacts on wild salmon – sport fishing, logging, urban development, hydroelectricity, climate change, the suggestion that salmon farming was having an impact on wild salmon, though untrue, gave voters an opportunity to greenwash their endorsement of real impacts by putting a target on salmon farming.
The tragedy of the commons – not my term, but it captures the challenges of operating in an environment where user-conflicts can imperil operating licenses for the flimsiest of reasons. Being the newest arrival on the block, salmon farming was often the last in line when conflicts were adjudicated and were subjected to levels of scrutiny other industries had avoided. Opponents of the industry realized they could, at a minimum, greatly extend permitting processes and at worst, completely stymie the process with lies and exaggerations. The Canadian system generally lacks any clear organizing principles or mechanisms for assessing and resolving user-conflicts in areas where title is unknown or disputed, or where evidence of previous use is unknown. As a country, we have never made coastal employment nor food security any kind of political priority.
First Nations – prior to colonization, BC was home to more than 100 First Nations with distinct languages, cultures and traditions. It is an area roughly 4 times the size of the UK with an incredibly rugged geography. As Nations, they were not and are not homogenous in their approach to self-government, sovereignty and, more specifically, on the topic of this article, in their views of salmon farming.
The British government, and then the Canadian Government, subjected Canadian First Nations to wave after wave of injustice. This is not ancient history – the last federally run residential school for First Nations children was not closed until the 1990s. This is just one example from a long list. For generations, First Nations children were taken from their parents and transported to residential schools with the explicit intention of wiping out their culture. When I first started salmon farming, I worked with a member of the Kyuquot First Nation, John Vincent. As a child, he was taken from his parents to a school in September and returned the following June with no visits home and no communication from his parents for 10 months each year. Parents who refused to hand over their children were subject to criminal prosecution.
In addition to years of systemic racism and discrimination, the British Crown and Canadian government had stolen land from BC First Nations without signing treaties or reaching agreement with the Nations impacted. The first major land claim settlement was settled with the Nisga’a Nation in 1998 after almost 100 years of advocacy. Salmon farming arrived on the scene around the time BC First Nations began successfully asserting their sovereign rights in the Canadian judicial system. Most salmon farming permits in BC were issued in the 1970s and 1980s without the consent or consultation of First Nations. As respect for First Nations sovereignty grew, salmon farming became a hot issue in treaty settlements. It was, by no means, the only issue but was straight in the cross hairs.
The industry, to its credit, recognized the new order of things and set about negotiating partnership agreements with First Nations, pursuing environmental certification schemes to demonstrate sustainability and building commercial relationships with First Nations owned businesses.
They also participated in scientific studies and panels, culminating in the Cohen judicial enquiry which spanned several years and reached the conclusion that salmon farming posed a very minor risk to migrating wild salmon. A key theme in those days was that good science and transparency would rule the day.
A deeply cynical and purely political act.
In 2010, the Department of Fisheries and Oceans became the lead agency for aquaculture in BC. The prevailing belief was that dealing with a single agency would reduce bureaucracy, decrease the influence of provincial politics on regulatory decisions, and lead to more science-based decisions on aquaculture policy. In fact, since then, the opposite has occurred. Despite a mountain of scientific evidence to demonstrate sustainability and a commitment to operating with the highest degree of transparency, the federal government has used its discretion to eliminate 40% of BC salmon farming permits and hundreds of jobs.
The political geography of British Columbia is dominated by lower mainland and southern Vancouver Island ridings – 28 of 42 federal ridings are concentrated in 3.9% of the province. Thanks to decades of disinformation by environmental groups and our nations public broadcaster, these ridings represent a fertile concentration of urban voters who are disconnected from the challenges of life on the coast, have been misled about the facts of the industry, and are wealthy enough to not worry about how far their food must travel.
Cut to 9 years later, the Liberal Party of Canada is in a dog fight to win a very close election. Justin Trudeau, a wealthy Vancouverite and son of a highly respected former Prime Minister, desperately needs the support of the 28 federal ridings in the lower mainland and southern Vancouver Island regions of BC to hold onto a minority government. In a move of political genius and naked cynicism, he and his team crafted a 5 – year plan to transition the industry to a closed-containment system. It was a purely populist move which ignored the science and economic needs of towns like Campbell River and Port Hardy to allow Justin Trudeau to cling to power.
By virtue of operating 100% in the commons, the federal government had broad discretion over permits and regulations, and they were free to use that discretion for political gain. The fact that the plan was mandating a transition to an unproven technology on an unrealistic timeframe didn’t matter in the least. It was a campaign promise designed to solidify votes in key ridings, and it did its job. They will continue to use this lever if it continues to work. It likely will, as there just aren’t enough voters in the impacted ridings to sway the political calculations.
What happens after 2029?
Successive legal victories for the salmon industry have not changed the Liberal Party of Canada position on BC aquaculture but it has bought them some time. The 2029 timeline is no more realistic now than the 2024 promise was in 2019. Floating closed containment systems have advanced since then but are nowhere near ready to supply millions of kilos of salmon and replace an industry that creates thousands of coastal jobs. The land-based industry has advanced but a lot remains to be proven.
Even if proven, the investment required to make the transition happen is staggering, likely on the order of $1.5b CAD just to maintain today’s production. If the alternative is land-based, it will almost certainly not be built in areas of the province where salmon farms operate as they are too remote and the power grids too weak to support industrial scale recirculation systems. If floating closed containment is the answer, they will presumably float in the commons and be subject to federal government discretion in permit renewals etc. Given history, who would make an investment of that magnitude subject to the whims of political hacks like Justin Trudeau?
In theory, salmon farmers could operate in areas where they have the support and engagement of First Nations but, to date, the Federal Government has on one hand expressed commitment to reconciliation and on the other, ignored the voices of First Nations who want to engage in salmon farming. When it comes back to a political calculation, if eliminating salmon farming keeps them in power, they will do it and then look for other means to reconcile the injustice with impacted Nations.
There must always be hope.
Justin Trudeau and the Liberal Party of Canada are enormously unpopular now and are facing almost daily confidence votes in the House of Parliament. Thus far their coalitions with the NDP and the Bloc Quebecois (Canadian minority parties) are holding but could crumble any day. If an election happens and the Conservative Party wins, a change in policy may happen but it really depends on how badly the ruling party needs the support of key ridings in British Columbia. The promise to eliminate the industry has taken on a life of its own and if the conservatives need those same seats, they could easily make the same cynical calculation.
What to do?
Fortunately, I’m not a BC salmon farmer but, if I were, I would sweat the equity on my farming assets and then have a look at my balance sheet. If the costs of complying with a cynical transition plan were even close to the book value of my assets in BC, I would pack my bags and leave. By 2029, with investment frozen and another 5 years of depreciation on the books, the value in BC operations will be small enough to write off. All but one of the BC salmon farming companies are owned by multinationals and BC operations represent a small fraction of their operating base. From their quarterly reports, Greig BC, looks to have an asset base (including livestock) of $250m - $300m Euros, (13.90 Euro per kilo of production). If off-the-cuff estimates on the cost of a transition to closed containment are correct (16.00 euro per kilo of production), it would make no sense to double the investment in the business for no additional production. BC has not been an enormously profitably place to farm in recent years and doubling the cost base would almost certainly push the region permanently into the red. Maybe I’m just a miserable person.
The takeaway.
This transition plan is a political act, pure and simple. The science supports the industry, but the voters do not, and Justin Trudeau and the Liberal Party of Canada will choose votes every time. If the industry is to survive, it will need to find a solution that gives them greater operating certainty in the long term and I’m not convinced floating closed-containment systems or land-based salmon farming, as currently conceived, will provide that security.
Whew… Glad I got that off my chest. If you are still reading, I salute you. Especially for finishing this bitter screed. Comments/feedback welcomed at info@AlanWCook.com or via LinkedIn.