GAIN Report - CA7047 Page 11 of 26

Required Report - public distribution

Date: 9/28/2007

GAIN Report Number: CA7047

CA7047

Canada

Fishery Products

Annual

2007

Approved by:

Lisa Anderson

Office of Agricultural Affairs, U.S. Embassy

Prepared by:

George Myles

Report Highlights:

Canada’s commercial catch for all seafish and shellfish in 2005 reached 1,072,288 metric tons (MT) live weight, down 5.1 % from the revised 2004 level of 1,130,260 MT. After two years of successive decline, the total Canadian farmed-raised production of finfish and shellfish was higher during 2005. Total aquaculture production reached 153,995 MT, up more than 6% from the year earlier. For the first time in five years, the value of Canadian imports of U.S. fish and seafood during 2006 registered a year-to-year decline, slipping almost 2% to $665 million from $678 million in 2005.

Includes PSD Changes: No

Includes Trade Matrix: Yes

Annual Report

Ottawa [CA1]

[CA]


Table of Contents

Executive Summary 3

Section I. Production; Commercial Catch 4

Canada’s Commercial Catch 5

Landings, By Species, 2005 6

Section II. Aquaculture 6

Aquaculture Production By Type 8

Section III. Consumption 9

Per Capita Consumption 9

Section IV. Trade 10

The Canadian Import Market for Fish & Seafood 10

Total Imports 11

Total Imports by Quantity 12

The Composition of Canadian Imports of U.S. Fish & Seafood 13

Total Exports 14

Section VI. Marketing 15

Distribution of Retail Fish and Seafood Sales 15

Section VII. Trade Matrices 16

Groundfish 16

Groundfish Fillets 17

Flatfish 18

Roe 19

Lobster 20

Salmon, Whole / Eviscerated 21

Canned Salmon 22

Policy 23

Acts and Regulations (linked) 23

Marketing 24

Fish and Seafood 24

Canadian Importers Database 24

Executive Summary

THIS REPORT DOES NOT CONTAIN OFFICIAL USDA DATA

* Canada’s commercial catch for all seafish and shellfish in 2005 reached 1,072,288 metric tons (MT) live weight, down 5.1 % from the revised 2004 level of 1,130,260 MT. Most of the decline was attributable to a lower shellfish catch.

* After two years of successive decline, the total Canadian farmed-raised production of finfish and shellfish was higher during 2005. Total aquaculture production reached 153,995 MT, up more than 6% from the year earlier reflecting a moderate increase in total finfish output. Salmon production rose to 98,441 MT, 2% above 96,774 MT a year earlier. Farm-raised shellfish production during 2005 reached 38,195 MT, up 1% from 37,925 MT tons during 2004.

* For the first time in five years, the value of Canadian imports of U.S. fish and seafood during 2006 registered a year-to-year decline, slipping almost 2% to $665 million from $678 million in 2005. Despite the decline, Canada remained the No. 3 export market for U.S. fish and seafood exports.

* In 2006, Canadian fish and seafood importers sourced more Asian product than ever before. During that year, the volumes imported from China, Thailand, and Vietnam increased 7%, 9%, and 18% respectively from the year earlier levels.

* Competition from Asian suppliers reduced the U.S. share of the Canadian import market for fish and seafood to 31% in the January to June period of the current year from a recent historical share of about 45%.

* Total Canadian fish and seafood exports in 2006 failed to keep up the record pace established during 2005, slipping 1% to 620,912 MT during 2006 from 626,759 MT in 2005. Canadian sales to the three top export markets over that period, the U.S., China, and Japan were all lower. Much of the decline, a trend that is continuing in the current year, can be partly attributed to the sharp appreciation in the Canadian dollar over the period.

Section I. Production; Commercial Catch

Fisheries and Oceans Canada’s current data availability covers Canada’s total commercial fish and shellfish catch up to 2005. The total Canadian commercial catch for all fish and shellfish species in 2005 reached 1,072,288 MT live weight, down 5.1 % from the revised 2004 level of 1,130,260 MT. Most of the decline was attributable to a lower shellfish catch particularly for scallops, which registered a sharp decline during 2005, but the pelagic and other finfish catches were also lower.

The chart below illustrates how during the last ten years, the Canadian shellfish catch has overtaken each of the groundfish and pelagic fish catches. Despite the fact that the shellfish catch was lower in 2005, the average annual growth rate (AAGR) for the Canadian shellfish catch since 1996 is 4%. This compares to an AAGR of 1.0% for groundfish and 0.4% for pelagic over the same time period.


Canada’s Commercial Catch


Landings, By Species, 2005

Section II. Aquaculture

Canadian aquaculture statistics are available up to 2005. The Department of Fisheries and Oceans anticipates the 2006 production totals to be available during the final quarter of calendar year 2007. After two years of successive decline, the total Canadian farmed-raised production of finfish and shellfish was higher during 2005. Total production reached 153,995 MT, up more than 6% from the year earlier reflecting a moderate increase in total finfish output. Salmon output rose to 98,441 MT, 2% above 96,774 MT a year earlier. Farm-raised shellfish production during 2005 reached 38,195 MT, up 1% from 37,925 MT tons during 2004.


Aquaculture Production By Type

Canadian aquaculture production is dominated by the production of farmed-raised salmon, mussels and oysters, which combined, accounted for 87% of total farmed-raised production in 2005. On a regional basis, British Columbia, New Brunswick and Prince Edward Island accounted for 48%, 24%, and 12% respectively of total farmed-raised output.


Section III. Consumption


According to Statistics Canada, total Canadian fish and seafood per capita consumption during 2006 rose fractionally from the year earlier level to 9.36 kg. Despite the small gain, the per capita level in 2006 was 4.5% below the record level set in 2003. The StatCan figures show that per capita shellfish consumption has declined annually over the five year period ending 2006 while the consumption of fresh and frozen seafish and freshwater fish increased.

Per Capita Consumption

Section IV. Trade

For the first time in five years, the value of Canadian imports of U.S. fish and seafood during 2006 registered a year-to-year decline, slipping almost 2% to $665 million from $678 million in 2005 (see table, next page). Despite the decline, Canada remained the No. 3 market for U.S. fish and seafood exports. Using trade statistics compiled by the U.S. Bureau of Census, Canada was third after the EU25 and Japan and accounted for 17 % of all U.S. fish and seafood exports valued at $4.0 billion in 2006. Further information about the U.S. seafood trade situation with Canada and the composition of Canadian imports of U.S. fish and seafood is presented elsewhere in this Trade Section.

The Canadian Import Market for Fish & Seafood

Total Imports

On a value basis, spurred partly by increasing demand and by the stronger purchasing power of a rising Canadian dollar, total Canadian imports of fish and seafood climbed a further 8% percent during the first half of 2007 from the record level for that period set one year ago. However, the value of imports from the United States was down during 2006 for the first time in several years and continued to be lower during the first half of 2007. As shown in the table below, competition from China and other countries increased sharply and reduced the U.S. share of the Canadian import market for fish and seafood to 31% in the January to June period of the current year from a recent historical share of about 45%. For more information on Canadian fish and seafood imports from China, see last year’s report CA6047 and the section entitled China Emerges as a Major Supplier in the Canadian Seafood Market.


Total Imports by Quantity

Total Canadian imports of fish and seafood (excluding live) by volume are shown below. The table excludes imports of live imports for which only value figures are collected. While the size of the Canadian import market for fish and seafood increased during 2006, lower volumes were imported from the United States as Canadian seafood importers turned increasingly to offshore offerings. This development is partly a reflection of a strengthening Canadian dollar and partly an indication that importers in Canada are sourcing more Asian produced species to meet retail demand.


The Composition of Canadian Imports of U.S. Fish & Seafood

On a value basis, Canadian imports of lobster were the leading import of U.S. fish or seafood in 2006, followed by frozen (whole) fish and fish fillets as illustrated on the graph below. However, according to a 2002 study by L.B.C. Consulting Services, commissioned by the Office of Agricultural Affairs, only about 20% of the fresh or frozen whole fish that Canada imports from the United States is re-sold "as is" to retail or foodservice channels. The balance is imported by Canadian processors for further processing, and L.B.C. reports that a significant share is then exported as Canadian product.


Total Exports

Total Canadian fish and seafood exports in 2006 failed to keep the record pace established during 2005, slipping 1% to 620,912 MT during 2006 from 626,759 MT in 2005. Sales to the three top export markets over that period were lower: to the U.S., down 5%, to China, down 2%, and to Japan, down 33%. Much of the decline, a trend that is continuing in the current year, can be attributed to the sharp appreciation in the Canadian dollar over the period. From its level at January 2005 of US$0.816, the Canadian dollar rose 16.7% to US$0.952 by July 2007. In contrast, on a value measure, Canadian fish and seafood exports increased 3.4% to $1.9 billion in the first seven months of 2007 but the fall in volume was 6% as shown on the following table. Note: Since July 2007, the Canadian dollar appreciated further to US$0.990.


Section VI. Marketing

Distribution of Retail Fish and Seafood Sales

According to the 2002 report by L.B.C. Consulting Services of Montreal (contracted by the Office of Agricultural Affairs, see CA2078), the foodservice sector at that time accounted for an estimated 64% of total Canadian retail sales of fish and seafood. While there has been no published update since that time, there is general consensus in the industry that, over the past five years, the foodservice share has advanced to about two-thirds, by value, reflecting the popularity of more Asian and other ethnic meals served in restaurants that contain fish and seafood.


Section VII. Trade Matrices

Groundfish



Groundfish Fillets



Flatfish



Roe



Lobster



Salmon, Whole / Eviscerated



Canned Salmon



Policy

On behalf of the Government of Canada, the Department of Fisheries and Oceans (DFO) is responsible for developing and implementing policies and programs in support of Canada’s scientific, ecological, social and economic interests in oceans and fresh waters.

The Department’s guiding legislation includes the Oceans Act, which charges the Minister with leading oceans management and providing coast guard and hydrographic services on behalf of the Government of Canada, and the Fisheries Act, which confers responsibility to the Minister for the management of fisheries, habitat and aquaculture. The Department is also one of the three responsible authorities under the Species at Risk Act.

Acts and Regulations (linked)

Atlantic Fisheries Restructuring Act

Canada Shipping Act

Aids to Navigation Protection Regulations

Boating Restriction Regulations

Competency of Operators of Pleasure Craft Regulations

Eastern Canada Vessel Traffic Services Zone Regulations

Pleasure Craft Sewage Pollution Prevention Regulations

Private Buoy Regulations

Sable Island Regulations

Small Vessel Regulations

Vessel Traffic Services Zone Regulations

Canada Shipping Act, 2001

Coastal Fisheries Protection Act

Coastal Fisheries Protection Regulations

Department of Fisheries and Oceans Act

Financial Administration Act

Fisheries Act

Aboriginal Communal Fishing Licences Regulations

Alberta Fishery Regulations, 1998

Atlantic Fishery Regulations, 1985

British Columbia Sport Fishing Regulations, 1996

Fish Health Protection Regulations

Fish Toxicant Regulations

Fishery (General) Regulations

Foreign Vessel Fishing Regulations

Manitoba Fishery Regulations, 1987

Marine Mammal Regulations

Maritime Provinces Fishery Regulations

Management of Contaminated Fisheries Regulations

Metal Mining Effluent Regulations

Newfoundland and Labrador Fishery Regulations

Northwest Territories Fishery Regulations

Ontario Fishery Regulations, 1989

Pacific Fishery Management Area Regulations

Pacific Fishery Regulations, 1993

Pulp and Paper Effluent Regulations

Quebec Fishery Regulations, 1990

Saskatchewan Fishery Regulations, 1995

Yukon Territory Fishery Regulations

Fisheries Development Act

Fisheries Improvements Loan Act

Fishing and Recreational Harbours Act

Fishing and Recreational Harbours Regulations

Freshwater Fish Marketing Act

Great Lakes Fisheries Convention Act

Oceans Act

Basin Head Marine Protected Area Regulations

Eastport Marine Protected Area Regulations

Endeavour Hydrothermal Vents Marine Protected Area Regulations

Gilbert Bay Marine Protected Area Regulations

Gully Marine Protected Area Regulations

Musquash Estuary Marine Protected Area Regulations

Species at Risk Act

Marketing

Fish and Seafood

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. Enforcement is carried out by the Canadian Food Inspection Agency (CFIA). The CFIA also enforces Canada’s Food and Drugs Act and Regulations as they pertain to fish and seafood in the Canadian marketplace.

There is no requirement under current regulations for imported fish products to be accompanied by a health certificate. However, the person who imports fish into Canada must hold a fish import license, must provide written notification to the CFIA for each imported shipment of fish and must make the fish available for inspection. Product inspections are conducted at frequencies that depend on the product's risk and the exporter's history of compliance. The normal inspection frequency for fresh fish such as wild caught salmon from an exporter with a good history of compliance would be 2%. More information regarding the requirements to import fish into Canada can be found on the CFIA web site in the document titled Guide to Canadian Regulatory Requirements and Examination Procedures for Imported Fish. http://www.inspection.gc.ca/english/anima/fispoi/import/importe.shtml