Atlantic Salmon Aquaculture – From idea to Consolidation.
Originally published in “The Atlantic Canada Great Ideas Exchange” at The Georgetown Conference.
Today, the Atlantic salmon aquaculture industry stirs great emotion and opposition. But when originally conceived it was seen as a saviour for wild Atlantic salmon; an endeavour that would displace the wild salmon fishery, enhance salmon runs through supplementary stocking, and provide much needed employment to rural Maritimers. The vision saw fishermen combining small growout cages with their existing weir fishery. Working together, they would finance their own local hatcheries, produce feed from local catch surpluses and market together .. a modified co-operative approach. None of this ever happened of course because new operators assumed a competitive stance and large operators swiftly moved in and eventually seized control. Unemployment and dislocation have been the result of this consolidation although some communities continue to benefit from production and processing jobs at modest wages.
Opportunities may still exist for small family and community-owned operations through aquaponics and enclosed aquaculture facilities for alternate species, but the conflicts have caused considerable angst that clouds these developments through unrealistic restrictive regulation and local opposition. Does the future remains open for innovative ideas in aquaculture? Time will tell.
The following account of the development of the aquaculture industry in the Northeast has been modified from my draft copy of Dr. John Anderson’s book on the industry. You can see just when the industry started to move away from community control.
Art Mackay’s background, training, and profession put him in a unique position to discount prevailing pessimism and his success resulted in rapid expansion of the salmon aquaculture industry. Born in St. Stephen in 1939, He was familiar with the marine area which would become the center of the industry in NB. He earned a B.Sc. degree in biology from the University of New Brunswick doing his honour’s thesis, with Atlantic salmon. He spent two post-graduate years at McGill University studying mammalian zoogeography, before deciding to come back to his native province in 1964 to pursue his love of the sea. At Lord’s Cove, a small fishing village on Deer Island, he established Marine Research Associates (MRA), a company which did consulting work and operated a biological supply house which provided live marine organisms to laboratories in Universities and hospitals. He had carried out numerous coastal surveys which gave him valuable insight into oceanographic features of the West Isles region and
Bay of Fundy He was an accomplished diver, spending many hours, at least once a week every week, year round, collecting live specimens, a perfect way to obtain first-hand information on the physical characteristics of the currents sweeping along the coast and through the islands. Mackay was aware, of course, of the culture attempts ending in failure because of lethally-low, sea-water temperatures during the winter. But from his work he had good reason to believe that the West Isles was an area where year-round salmon aquaculture in the sea would work.
The epiphany for Mackay came in 1973, when he attended an aquaculture conference at the College of Cape Breton, in Sydney where he listened to Dr. Dag Moeller, an Atlantic salmon scientist from the University in Bergen, describe the early developments in Norway. Accompanying him was Bill Groom, in charge of the St. Stephen office of the NB Department of Fisheries. On the return trip MacKay informed Groom that, in spite of the failures, this industry would work among the islands between Deer Island and Campobello. Over the succeeding years a small group of believers gradually developed including: Groom, Dr. Arnold Sutterlin, a fish physiologist at the Biological Station, Susan Merrill, and technician Gene Henderson from the Biological Station.
Dr. Saunders at the Biological Station, whose research, particularly in the smoltification process, was vital to the salmon farmers, and who later was to play important roles in the development of the industry, did not share his colleague’s optimism at the time. It must be said, however, practically nobody else did, either. The key missing ingredient was smolt, which were in federal government hatcheries. Finally, in 1977, Sutterlin’s request for smolt was approved. The Director of the Biological Station, Dr. Bob Cook, who was later to be an important player in the development of the industry, supported Sutterlin’s request, but the bureaucratic climate, particularly in Halifax, was such he was forced to make it clear that the experiment could not be a formal, DFO sanctioned one. It had to be an informal, cooperative venture with what amounted to a pick-up team…but what a winning team it turned out to be. Sutterlin and his team provided a feed grinder and material to build cages, small square ones about the size of a card table on top, and anchors to moor them. Groom obtained a small $3,000 grant from the NB Department of Fisheries. Mackay provided a large shore building where food making was carried out, service boats and fuel, staff for food making, repairs, and monitoring, as well as marketing dollars and office space, investing several tens of thousands. This was the only cash contribution, except for the extra cost to Mackay of Wanda Huber specifically hired to be the fish feeder. Nelson Adams, a businessman in Fredericton contributed mooring poles. The experiment began in May, 1978, with the arrival in Lords Cove, Deer Island, of 2,000 smolt, discards that were to be buried from the DFO Mactaquac hatchery on the Saint John River.
The fish came through the 78/79 winter underfed because they were placed on a small “maintenance” diet dictated by the “experts”. However, they quickly recovered when feed levels were increased in March, 1979 when the project was completely turned over to MacKay through his newly established company Marine Products Ltd (MPL). The Federal Department of Supply and Services, impressed with the successful over-wintering of the fish, issued a $100,000 contract to conduct a more rigourously designed experiment in 1979/80 than the one covering the winter just past, where the focus had been simply on whether the fish would survive or not. The wisdom of Mackay establishing MPL, and in the government’s decision to issue it a contract, were well founded when in the fall of 1979 the fish were marketed, heads on, gutted, at the astounding price of $7 a lb. For the stock going into the cages in the spring of 1979, for marketing 18 months later in the fall of 1980, Atlantic salmon smolt again came from Mactaquac, and added to from the Atlantic Salmon Federation, whose experimental Atlantic salmon hatchery at Chamcook, just outside St. Andrews. The cages were much larger, and more professional designed, and built entirely by MPL.
The Lords Cove venture stood conventional wisdom on its ear as Art predicted. For each tidal cycle, about 100 cubic kilometers of sea water flood in and ebb out of the Bay of Fundy, bringing with it in the winter relatively warm bottom water, upwelling to the surface. This happens twice a day. The moderating influence of the warmer deeper water is sufficient to prevent the lethal level of –0.7ºC being reached, exceptin estuaries and shallow areas with large freshwater inflow.
Mackay realized he was on to something. He acted aggressively. He established a separate company, Ocean Products Inc, in Maine, with sea cage operations in Cobscook Bay, near Eastport, and a hatchery at Deblois. In Canada, he built a hatchery at Oak Bay, near St. Stephen, second one at Springhill, near Sussex. At the peak of his operations he had a staff of 80 plus in two countries. Unfortunately things did not go smoothly. To start off the U.S. operations, OPI received 200,000 smolt from government hatcheries in Maine. In New Brunswick, in 1981, when the new entrants were provided smolt from federal hatcheries, Mackay was informed that MPL was no longer eligible. This put a huge crimp in his operations since none of his Canadian hatcheries were yet producing smolt. But he persevered, and with notable success.
Mackay was a groundbreaker, a pioneer in the true sense, leading the way, alone. But the first ever attack from grey seals, resulted in large losses which led to an equally vicious attack by a few newly acquired investors. A member of the OPI Board successfully launched a hostile takeover bid of the company. The Directors of the Boards of OPI and MPL were almost the same people, and they decided to concentrate all operations in Maine, walking away from MPL and its New Brunswick assets, including the loan from the government. Mackay requested that the Province turn over MPL to him, and he would continue to operate the company and assume responsibility for repayment of the $660,000 loan. The request was denied. MPL went into receivership. The province’s loan was repaid from the sale of MPL’s not inconsiderable assets.
Dr. John Anderson
ENDNOTE: The takeover directors assumed management and in a few years
bankrupted the American company starting the era of consolidation.