Clayoquot Green Economic Opportunities Project

Since this is an industry that requires significant capital investment for start-up, there is some danger that it could become inaccessible to local communities and that tenures could be consolidated into fewer hands over time. A conscious strategy, from the beginning of this rapid expansion period, around managing, in partnership with the province, tenure location, ownership and community benefit in relation to new applications would help to ensure the long term viability of this industry for the region's benefit.

Current status and trends in the industry

Provincially:There has always been a wild-harvest shellfish industry in British Columbia that has formed the economic foundation for coastal communities and First Nations. The shellfish farming industry in B.C. is entering a unique period of opportunity. There is every indication that it can grow and mature significantly over the next few years, contributing to both provincial and community economies like never before.

At the present time, BC ranks as the 12th largest single producer of Pacific oysters but only produces 0.12% of the global market in value. In 2000 the province accounted for only 5% of the North American landed value for shellfish. Currently there are 482 licensed shellfish tenures occupying 2114 hectares in B.C. Eighty nine percent of the farm production is concentrated on the east coast of Vancouver Island, 52% of that in Baynes Sound.[1] The three main species of shellfish cultured in the province are Pacific oysters,

The New Marine Frontier Project for Vancouver Island and Coast communities started in February 2000 and is to be completed in 2003. It is an initiative of the Vancouver Island Economic Developers Association (VIEDA), and is designed to build on and support individual community economic development efforts. The goals are to "strategically identify the high growth industries throughout the world, determine key industry sectors that could be located in the Island / Coast region and create tools to effectively communicate with these target audiences to encourage them to relocate. The first sector to be targeted for the stimulation of inbound investment is shellfish aquaculture. In addition to bringing investment in this key economic sector through its integrated marketing campaign, the 'New Marine Frontier project' will result in a regional web site and an inventory of available land and buildings for each Island / Coast community

Manila clams and Japanese weathervane scallops. Additionally, efforts are underway to commercialize culture of the Blue mussel, the Native geoduck clam and the Northern abalone.

Virtually the entire commercial harvest of oysters is farmed and the commercial culture of clams is steadily increasing. Between 1984 and 1997 (the latest year for which data on the aquaculture industry's GDP is available), the value added to the economy by BC's fish and shellfish farming industry grew from $1.6 to $68.1 million. This represented an increase that was well in excess of that seen in any other industry, including computer-related manufacturing.[2]

Without the boost provided by the aquaculture industry in the province, the overall performance of the fishing industry would have been much worse than it was during the last few years. It is likely that aquaculture activities in the province will continue to expand even if the opportunities for commercial fishing remain limited.

It is estimated that the industry will grow from its present size ($10.9 million) to $100 million by 2006 with a doubling of the tenured land base from 1,750 to 3500 hectares.

In the Clayoquot Biosphere Region: Much of the opportunity for industry expansion rests in Barkley and Clayoquot Sounds.

WCVI has always had a vibrant wild-harvest shellfish industry, the major wild species including clam, geoduck, scallops, abalone and gooseneck barnacles. The culture and farming of shellfish (primarily oysters, mussels, scallops and to a lesser extent, clams) has supplemented and more recently surpassed the economic importance of the wild harvest for the region.

Shellfish harvesting has formed a consistent component of the region's economy for generations. Wild harvest of clams and oysters has traditionally been a stable of the First Nations economy, wild harvest of geoducks, sea cucumber and urchin an important part of their food, social and ceremonial system and the farming of Pacific oysters has been growing steadily since the 1960's.

There are currently 68 shellfish tenures in Clayoquot and Barkley Sounds, held by 47 individuals or companies. Leases occupy approximately 293 hectares of the marine and foreshore area. At present, Pacific oysters (principally for the shuck market but increasingly for the 1/2 shell market) are the predominate species grown, with Manila clams a distant second.

Many of the areas offering excellent potential for new and expanded shellfish ventures lay within the traditional territory of the Nuu-chah-nulth. A shellfish corporation owned by the NTC Nations was established in February 2003 to secure investment dollars, manage the development of Nation-owned tenures and return profits to their community/owners.

Under the direction of the Nuu-chah-nulth Shellfish Development Corporation, 2003 will see pilot shellfish sites in Useless Inlet established in Toquot and Uchucklesaht as well as the first commercial enterprise in Lemmens Inlet, owned by the Tla-o-qui-aht Nation.

Lemmen's inlet, with nine active tenures, is the most concentrated production site in the region. Increasingly, farmers are considering the value of lease expansion, timely product diversification and the introduction of new growing methods to increase their access to markets.

The wild harvest of clams, goeduck and mussels continues in the region for sport and food/social/ceremonial purposes. The wild clam harvest continues as a commercial fishery although there is increasing concern about the vulnerability of the wild clam harvest with the current level of pick (there are 333 commercial licenses). The gooseneck barnacle fishery, closed in 1999 for conservation concerns, may be reopened in 2003 under a three-year experimental license on a limited basis.

In 2001, the provincial government announced its intention to increase the amount of coastal area licensed and tenured for shellfish development. Oyster, mussel and scallop farming are expected to increase rapidly under this new regime. Manila clam farming is an industry that competes with the wild clam diggers for beach access and there are significant issues to resolve before this industry can grow.

As a result of the deliberate strategy to promote growth in the industry, the Alberni-Clayoquot Region can anticipate the following pattern to emerge in the next five years:[3]

• An increase from approximately 66,000 gallons of shucked product harvested annually in Clayoquot and Barkley Sounds to 100,000 gallons/annum
• An increase in single oyster production from 225,000 dozen/year to 1.08 million dozen per year.
• An increase in Manila clam production, from 200,000 lbs in 2002 to 575,000 lbs.
• The reintroduction of scallop and goeduck farming
• The introduction (on a limited basis, most likely First Nations-based) of clam cultivation

The corresponding farm gate values for this level of growth in the sector would increase from 2.5 million in 2003 to 5.5 million dollars by 2008.

A carrying capacity study is being organized for 2003/04 through MAFF and the Clayoquot Sound Oyster Growers Association to establish benchmarks for monitoring the health of the marine environment in Lemmens Inlet as a precondition of granting further tenure development.

Activity aimed at supporting the effective expansion of the shellfish industry is being coordinated, for Lemmens growers, through the Working Sound Shellfish Committee. This Committee, comprised of representatives from the local community, the Tla-o-qui-aht First Nation, government agencies, environmental organizations and growers is currently working to achieve a no-discharge designation for Lemmens Inlet to protect the shellfish from contamination. It is also assisting growers to extend their knowledge of new technology and to work towards a more coordinated approach to market development.

Future opportunities and challenges
Global markets for shellfish products are very strong and steadily increasing. The greatest challenge for small to medium sized farms is to gain access to these markets since all products must move through a licensed processing facility.

At the present time, there is no shellfish processing capacity on the west coast, requiring farmers from both Barkley and Clayoquot to ship their product to the east side of the island or to Vancouver for processing and sales.

Because the majority of large processors have their own farms, the product from small, independent tenure-holders is often used to 'fill in' when there are periods of high demand or production slow-downs due to closures. Under these circumstances, it is difficult to establish a regular and consistent shipment of product and hence the job of cash-flow management becomes significantly more complex.

There are a number of initiatives underway in the region to try to address this issue including:

• An initiative through the Vancouver Island Economic Developers Association aimed at recruiting a processor interested in setting up a plant on the west coast
• An initiative by the Working Sound Shellfish Committee to complete a feasibility study on the viability of a small, seasonal boutique processing facility to take advantage of the tourist traffic. This project would be undertaken in partnership with the local growers in Lemmens Inlet.
• An independent entrepreneur looking at a combined residential/processing plant development in the region
• Discussions between Robert Wholey Ltd and local growers to test the viability of seasonal use of their processing facility in Ucluelet for shellfish processing
• An initiative steered by a Regional Shellfish Task Force to determine the interest in, and viability of, establishing a broker in the region that can coordinate the purchase of product from a number of growers that can fill the market requirements of a large processor in Washington.

Assessment of the sector by SCED Criteria

Environmental criteria: Shellfish, as bivalve feeders, are key indicators of water quality. They feed by filtering the water that washes over the shellfish bed. Because of their feeding mechanism, these shellfish can accumulate chemical and/or bacteriological pollutants and naturally occurring toxins from the surrounding waters even at a considerable distance from pollution sources. A single mussel, for example, may filter up to 300 times its weight in one hour. This represents a substantial amount of water.

With the objective of protecting public health, Canada signed a Bilateral Agreement with the United States in 1948 to guarantee the quality of shellfish products prior to export. The standards and protocols developed from this agreement form the basis of the Canadian Shellfish Sanitation Program. This program, jointly run by Environment Canada and the Department of Fisheries and Oceans, ensures that:

• bivalve molluscan shellfish are harvested from growing areas meeting approved federal water quality criteria;
• pollution sources to these areas are identified; and
• all shellfish sold commercially are harvested, transported and processed in an approved manner

The Canadian program also protects the recreational harvester by classifying sports or wild-harvest areas in addition to commercial beds.

Through its Shellfish Water Quality Protection Program, Environment Canada is responsible for monitoring bacterial water quality in shellfish growing areas. Water surveys are used for determining if these growing areas are approved, conditionally approved, or closed. Bacteria called fecal coliforms are used as indicators of contamination from sewage and other fecal pollution sources. High standards for water quality are demanded in areas where shellfish are harvested. Shoreline surveys are also conducted to detemine the sources of pollution and efforts are directed towards their clean-up.

More recently, the focus on shellfish expansion has raised some concerns in the academic community and in government about the long-term sustainability of the industry,

both in terms of its impact on aquatic, beach and bird life[4] as well as its compatibility with upland and recreational uses. Studies are underway to measure carrying capacity, to engage local communities in planning for marine uses and to monitor beach impacts. Research is also being conducted to better understand the levels of cadmium in shellfish and how this may affect human health.

Measuring the value of a growing shellfish industry against environmental criteria is hence a process that requires a back-to-front approach. If shellfish can only grow in healthy marine environments and if the federal and provincial governments are contributing financial and human resources to monitoring and managing marine environments where shellfish are produced, it follows that communities in shellfish production areas will be more diligent, more aware, more actively engaged and better supported in their efforts to promote marine protection and change patterns that are detrimental to the industry and hence to their environment. Nonetheless, ongoing research and open dialogue about concerns that arise must be part of the industry development process to ensure sustainability.

Economic criteria: The Alberni-Clayoquot Shellfish industry currently employs approximately 150 people or 80 full-time equivalent positions. The number of people employed on existing tenures in the region averages 1.8/tenure. New tenure owners estimate that labour will increase to an average of 3.3 people/site because of increased production estimates[5].

The single most significant challenge in terms of economics for this industry is the cost of start-up. For all but the most modest string and line technology used for shucked oysters, the capital costs of equipment are relatively high and it is difficult to borrow for this investment since there is no cash-flow until the first harvest, 12-18 months later. The federal government has also recently added a requirement for an environmental assessment (CEA) to accompany each new tenure or expansion application. The average cost of a CEA is $6000.00

Once a business has been successfully established, owner/operators can expect a 5-7 year climb to full financial viability. In spite of the best-laid plans, unforeseen events such as temporary closures due to water quality problems, slow-downs in the market or even stretches of bad weather can have a debilitating effect on cash flows until the business reaches maturity.

Social criteria: With the exception of start-up challenges noted in (b) above, the shellfish industry is one that is relatively easy to access and in which it is reasonable to expect success. Training for shellfish aquaculture is a combination of on-the-job learning, mentoring and, for some, short specialized courses in various aspects of the industry that are offered through local colleges. People with a strong work ethic, an appreciation for ecology and biology and knowledgeable about the marine environment can succeed without formal education. Like all small businesses, it is necessary to have some appreciation of investment, labour and cash flow management.

Opportunities for First Nations: In all Nuu-chah-nulth Nations, the wild harvest of clams, oysters and mussels have been a historic mainstay of their diet, culture and local economy. It is important that the growth of tenured farms be done sensitively with respect to these traditional wild harvests. The Nuu-chah-nulth First Nations have entered into an agreement with the province to hold and develop a number of shellfish tenures within their traditional territory. To improve opportunities for a collaborative approach, they have established a corporation to assist them with infrastructure development, training and marketing. A series of courses have been developed through Malaspina College focussed on training and supporting First Nations new to the shellfish aquaculture industry.

Contacts:

• Barry Seely, President, Clayoquot Oyster Growers Association
• Don Tillapaugh, Centre for Shellfish Research, Malaspina College
• Brian Kingsett, Kingsett Professional Services
• Roberta Stevenson, Nuu-chah-nulth Shellfish Development Corp.
• Scott Fraser, Working Sound Shellfish Committee
• Vancouver Island Economic Development Association (VIEDA)
  Rick Roberts, President
  tel: 250-754-0222 #382
  rick.roberts@hrdc-drhc.gc.ca

Publications:

• Ma-Mook Development Corp, 2000, Diversifying the WCVI Shellfish Aquaculture Industry
• Eco-Planning Consultants, 2003, WCVI Shellfish Development Project
• Ecotrust Canada, 2002, Nuu-chah-nulth Shellfish Marketing Plan
• Fisheries and Oceans Canada, 1997, Intertidal Clam Resources
• Kingzett Professional Services Ltd., Profile & Potential of the BC Shellfish Aquaculture Industry, 2002

Internet:

Clayoquot Sound  |  About FOCS |  Campaigns |  Newsroom
Photo Gallery  |  Get Involved  |  Become a Member |  Links

Phone: (250) 725-4218 Fax: (250) 725-2527 E-Mail: info@focs.ca
Box 489, Tofino, British Columbia, Canada, V0R 2Z0

Site by Brad Hornick Communications