B-HQ-98-08E

Economic Analysis of the Seal Fishery

An analysis of the 1996 seal fishery, which is concentrated in the province of Newfoundland and Labrador, has been completed. The analysis indicates that the seal harvest is important to the economy in a number of ways:

• generating employment and economic activity,
• providing export and product development opportunities, and
• continuing the traditional way of life important to the preservation of outport and Aboriginal communities.

The seal fishery is an integral part of the fishing cycle and of the outport way of life in Newfoundland and Labrador, the Magdalen Islands, the Québec North Shore, Cape Breton and Aboriginal communities throughout Northern Canada. For Aboriginals, the seal harvest is the most significant in landed volume and represents an important component of their diet and culture. Seal meat and products provide essential opportunities for inter-community trade.

Seal licences were issued to 11,221 individuals for commercial fishing and personal consumption purposes. In 1996, seven processing plants operated in Newfoundland providing approximately 3,065 person weeks of employment in outport communities at an average wage rate for most workers of $8.50 per hour. The employment generated by a healthy commercial seal industry is significant to the province.

In total, $10.8 million is spent by all sectors - harvesting, processing and transportation - relating to the seal harvest. These expenditures represent benefits and increased economic activity in outport communities which gain employment opportunities and local business as suppliers to these sectors. For example, the processing sector spent an estimated $9 million in 1996 on purchases of seal pelts, labour costs, transportation and operating expenses. Seal harvesters spent some $1.8 million in preparing and operating their vessels and the transportation sector spent an estimated $102 thousand.

This table presents estimates of the 1996 landed value and processed value of the seal fishery, followed by comments on the markets for these products.

* Includes federal and provincial subsidies

• Seal pelts are the most highly valued product from the harvest, accounting for more than half the total processed product value. The price for seal pelts has increased in recent years, with the average price of a pelt being $25.
• Seal oil is the second most valuable product of the industry and is the most promising new product development opportunity for the industry. Seal oil capsules are marketed as a supplement offering health benefits similar to other fish oils.
• Seal organs are not of particularly significant value compared to the pelts or oil, ranking only slightly more valuable than the meat. The Asian market for seal penises no longer offers the high prices ($70-100 per organ) it once did. The price in 1997 was about $20 per unit to seal harvesters and $25 per unit on the market.
• The processed value of seal meat is less than the landed carcass value to reflect the meat subsidy provided to harvesters. Seal meat is mainly used as silage. The purpose of the subsidy is to encourage full utilization of the animal and is scheduled to be phased out as the industry continues to develop new markets and alternative meat products.

Overall, the 1996 seal industry generated $10.8 million in economic activity, including $9.1 million in processed product value. The seal harvest helped to provide over 3,000 person weeks of employment to processing plant workers and permitted 11,221 licensed sealers and Aboriginals to harvest for commercial and personal use. The seal industry is also pursuing market opportunities for alternative products, such as seal oil capsules, to further develop the industry’s potential.