October 23, 2003
Outlook of Canada Fishery Products 2003
Executive Summary
* Canadian commercial landings of groundfish were lower for cod, haddock, redfish, flatfishes, turbot and hake during 2002 while pelagic species, mostly mackerel and salmon registered significant increases. The Canadian shellfish harvest continues to expand with scallop, shrimp and crab leading the way.
* For 2001, the latest year recorded, Canadian aquaculture production accounted for an estimated 40.5% of total Canadian fish product production as reported by Statistics Canada.
* Canada is the second most important market for exports of U.S. seafood, after Japan. During 2002, U.S. fish and seafood exports to Canada totaled $576 million and accounted for almost one-fifth of total U.S. exports in the sector.
* For 2003, the value of U.S. exports of seafood to Canada is forecast to decline reflecting reduced demand caused by an economic slowdown in the Canadian foodservice and tourism industries related to Sudden Acute Respiratory Syndrome (SARS), Bovine Spongiform Encephalopathy (BSE), and a widespread power blackout in Ontario.
* Canadian exports of fish and seafood advanced sharply during 2002 to 544,212 metric tons, nearly a 14% increase over the 2001 level. Most of the increase was attributable to increased exports of frozen crab and shrimp to China and Japan.
* Canadian fish and seafood exporters are eligible for the first time for funding under the Canadian Agriculture and Food International (CAFI) Program which is designed to provide federal assistance for trade promotion activities. The fish and seafood share of the promotional funding is estimated at about C$1.0 million.
Section I. Production
Canadian commercial landings of groundfish were lower for major species such as cod, haddock, redfish, flatfishes, turbot and hake during 2002 while pelagic species, mostly mackerel and salmon registered significant increases. The Canadian shellfish harvest continued to expand with scallop, shrimp and crab leading the way. For 2003, post forecasts a moderate increase in total catch.
Section II. Aquaculture Production
Statistics Canada reports that the industry reported operating revenues of C$704.5 million in 2001, down from C$722.9 million the previous year. Sales of products and services totaled C$675.2 million, a 2.5% decline. Of that, finfish, mostly salmon, accounted for $602.0 million, or almost 90% of total sales. In 2001, aquaculture production accounted for an estimated 40.5% of total Canadian fish product production as reported by Statistics Canada.
Despite an increase in production and a jump in exports, finfish sales fell 4.4% in 2001. Significantly lower prices for farmed salmon, due mainly to larger supplies in the United States, had a major impact on revenues. On the other hand, sales of mollusks reached C$65.2 million, representing 9.7% of total sales in 2001, compared to 8.0% in 2000. Prince Edward Island fish farmers generated C$28.2 million in mollusk sales in 2001, over 40% of the national total.
British Columbia remained Canada's largest aquaculture producing province, with sales of C$293.4 million. Farmers there accounted for 43% of the country's total aquaculture sales. An increase in finfish production was offset by falling prices of farmed salmon. As a result, total sales of finfish in 2001 declined 2.8%, while sales of mollusks totaled C$18 million, up 38% from 2000.
New Brunswick sales, which reached C$279.1 million in 2001, also fell as a result of lower prices. British Columbia and New Brunswick accounted for 84% of aquaculture revenues last year. Nationally, product expenses (the cost of products and services purchased from other businesses excluding capital and labor costs) totaled C$466.4 million in 2001, down 1.7% from 2000. Feed costs, which accounted for over 40% of all product expenses for finfish producers, increased slightly to C$191.8 million.
During the past decade, the export market for Canadian aquaculture has increased consistently, driven in large part by demand for salmon in the United States. In 2001, the value of aquaculture exports, which totaled C$444.3 million, increased 17% from the previous year, more than triple 1992 levels.
Section III. Trade
Total Fish and Seafood Imports
U.S. exports or fish and seafood to Canada maintained a steady share of the Canadian import market in the three years ending 2002. Along with other suppliers, U.S. sales during the first seven months of 2003 declined reflecting a general economic downturn in the first months of 2003 reflecting SARS, BSE, and a summer power blackout in Ontario.
Total Fish and Seafood Exports
Total Canadian exports of fish and seafood advanced sharply during 2002 to 544,212 metric tons, nearly a 14% increase over the 2001 level. Most of the increase was attributable to the significant increase in exports of frozen crab and shrimp to China and Japan. Other important volume increases were noted for fresh, whole salmon and halibut exports to the United States. As a result of the increase in exports to Asia, Canada's reliance on the United States for fish and seafood exports slipped to 61% of total in 2003 from 66% the previous year. For the first seven months of 2003, Canadian export increases for fish and seafood continued into the China market, but fell for the U.S. and Japanese markets.
Section V. Policy
The dominant issues concerning Canada's fishing policy include Department of Fishery's and Ocean's (DF)) action plan to enable the responsible development of the aquaculture sector and to strengthen DFO's role as the lead federal agency for aquaculture; the DFO response to the Marshall decision dealing with aboriginal fishing rights and fishing agreements with First Nations. All DFO press releases and background information on the current issues accessed on the DFO webpage at: http://www.dfo-mpo.gc.ca/home-accueil-e.htm
Canada is a member of the Northwest Atlantic Fisheries Organization (NAFO) which recently held its annual meeting. According to a DFO report, progress was made in key areas including the development of a long-term conservation and rebuilding plan for Greenland halibut (turbot), introduction of a pilot project on compliance and enhancements to NAFO's conservation and enforcement regime. As well, NAFO has agreed to examine issues related to the management and regulation of 3O Redfish. All NAFO parties agreed to a turbot conservation plan that includes an overall reduction of 60 per cent in the total allowable catch (TAC). There will be an immediate and significant reduction of TAC, with the 2004 quota being reduced to 20,000 MT, from 42,000 MT in 2003. The plan includes further annual reductions leading to a TAC of 16,000 MT in 2007. The DFO claimed it is pleased with this move away from a management regime focused on a single year TAC toward a comprehensive, long-term rebuilding strategy that includes vessel authorization, fishing effort reduction plans, vessel reporting requirements and enhanced monitoring and control of the fishery.
Section VI. Export Promotion
The Canadian Agriculture and Food International (CAFI) Program
In March 2003, federal agriculture minister Lyle Vanclief announced that fish and seafood exporters will, for the first time, be eligible under the Canadian Agriculture and Food International (CAFI) Program which is designed to provide federal assistance for trade promotion activities (see CA3013).
In April 2003, Vanclief promoted Canadian seafood on a Team Canada Trade Mission to China and in May 2003, Canadian seafood exporters participated in the European Seafood Exposition in Belgium. Twenty-four companies from seven provinces were represented in this year's Canadian Pavilion, the largest Canadian presence to date.
The Pavilion featured the cooking and presentation skills of a Vancouver based chef. The (CAFI) is a new cost-shared contribution program designed to support Canadian agri-food industry activities in areas of branding and market development, trade advocacy and technical marketing.
The objective of the CAFI program is to support industry action to deliver on a comprehensive national strategy to gain and expand international recognition and enhance market opportunities for Canadian agriculture and food products.
The new C$26 million program provides industry groups with matching funding for export marketing efforts. The fish and seafood share of the promotional funding is estimated at about C$1.0 million.
Trade Commissioner Service
Canada's Trade Commissioner Service provides Canadian companies free access to its sectoral market studies and country-specific reports prepared by its Market Research Centre and by its offices abroad in Canadian Embassies and High Commissions. The reports are intended to assist Canadian companies identity foreign business opportunities and learn more about target markets. The seafood sector reports are disseminated to Canadian companies only. For more information, go to: www.infoexport.gc.ca
Section VII. Marketing
Canada is the second most important market for exports of U.S. seafood, after Japan. During 2002, U.S. fish and seafood exports to Canada totaled $576 million and accounted for almost one-fifth of total U.S. exports in the sector. For 2003, the value of exports is forecast to dip reflecting reduced demand under an economic slowdown as the Canadian foodservice and tourism industry struggled with the adverse effects of Sudden Acute Respiratory Syndrome (SARS), Bovine Spongiform Encephalopathy (BSE), and a widespread power blackout.
Share of Exports
The Canadian market is an important one to U.S. fish and seafood exporters. With sales to Canada of $576 million in 2002, Canada was second in importance to Japan ($1.1 billion), but accounted for more than double the sales to the Republic of Korea, the third most important destination.
Summary of Regulatory Requirements
Fish and fish products are subject to the Fish Inspection Act and Regulations, which contain requirements for wholesomeness, labeling, packaging, grading, and health and safety. The Canadian importers of fish and fish products must have an Import Licence issued by the Canadian Food Inspection Agency and must notify the closest Canadian Food Inspection Agency fish inspection office in writing each time they import fish. Restrictions apply to the importation of live or raw bivalve molluscan shellfish such as mussels, clams and oysters. Import permits may be required for certain types of cultured fish. Certain provinces may have additional requirements for the importation of live fish.
Canadian regulatory requirements for imported fish and fish products are administered by the Canadian Food Inspection Agency's Fish Inspection Directorate (FID). Canadian importers are required to obtain an Import License issued by the FID prior to importing fish products. An import licence costs $C500 per year and is valid for 12 months. Importers are required to notify the FID prior to importation of a product or within 48 hours following importation, stating the type and quantity, the name of the producer, the country of origin and the storage location for each product contained within a shipment. The following inspection service fees are charged for imported products: $C50 per shipment of imported fresh fish; $C30 per shipment for any fish imported for further processing; or $C50 per lot for any other type of imported fish to a maximum of $C250 per shipment.
The following information provides a guideline to some of the important Canadian packaging and labeling requirements for fish and seafood:
- Shipping containers for fresh or frozen fish must be stamped or stenciled on one end with all code markings that identify the packer, and day, month, and year of packing.
- For canned product, each can must be embossed, or otherwise permanently marked, in a code that identifies the name of the establishment, the day, month, and year of processing, and where required in the regulations, the species of fish. FID requires the Canadian importer to provide a list indicating the establishment and the number of containers for each production code.
- General labeling requirements for fish and fish products in consumer packages include, but are not limited to: English and French for mandatory information, list of ingredients, including additives, the name and address of the packer or distributor, the common name of the product, and the weight in metric units (imperial weight units may appear in addition).
Source: USDA
