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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

National Aboriginal Fisheries Forum II

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;

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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)

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. 8

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

48%

52%

2011 Nunavut's Share of Adjacent Shrimp & Turbot Allocations

Nunavut (Adjacent) %

Non Adjacent Users %

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0B Offshore Turbot Allocations

45%

55%

OB Turbot Allocations 2011

Nunavut (Adjacent) %

Non Adjacent Users %

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Nunavut’s Share of

Adjacent 2010Turbot Resources

76%

24%

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

Nunavut/Adjacent %

Non Adjacent Users %

100%

0%

Nunavut's Share of Adjacent OA Turbot Resource 2011

Nunavut (Adjacent) %

Non Adjacent Users %

45%

55%

Nunavut’s Share of Adjacent OB Turbot Allocations 2011

Nunavut (Adjacent) %

Non Adjacent Users %

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Shrimp Allocations

18%

82%

SFA 0-3 Shrimp Allocations 2001

Nunavut /Adjacent %

Non Adjacent Users %

31%

69%

SFA 0-3 Shrimp Allocations 2011

Nunavut (Adjacent) %

Non Adjacent Users %

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

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) $6.2 million Nunavut Offshore Quota Holders $1.9 million Inuit Training Organizations $1.6 million Government of Nunavut $1.7 million Nunavut Arctic College $400,000 Nunavut Hunters and Trappers Organizations $ 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

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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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