the need for Canadians to supply at least 

 some of the United States demand. Canadians 

 would not be in a position to furnish such 

 supplies were not the American market large 

 enough and free enough to justify their in- 

 vestment in vessels and processing plants. 

 Thus the growth in United States consumer 

 demand for frozen groundfish fillets has 

 made a vigorous Canadian industry possible 

 and has enabled it to become a source of 

 strength to the economies of the Atlantic 

 Provinces. 



In looking to the future it appears 

 that the trend in the diversion of ground- 

 fish landings from saltfish processing to 

 quick-freezing will continue. Mediterranean 

 and Caribbean countries will supply more 

 and more of their saltfish requirements 

 through the further development of their 

 own fleets. Moreover, higher incomes and 

 living standards in these countries may 

 also mean less consumer demand for such low 

 income staples . 



Canadians expect that their groundfish 

 market will be more arid more based on the 

 United States and on their own domestic 

 consuiT^jtion. They believe that New England 

 production will continue to decline rela- 

 tive to American demand and that there will 

 be a corresponding need for increased im- 

 ports. The Royal Commission on Canada's 

 Economic Prospects postulated a h3 percent 

 increase in the United States market for 

 Canadian groundfish fillets by I98O. 61/ 

 Therefore, they reason, production can be 

 expanded and sold, and governmental aid 

 has a rational basis. 



1. The Primary Market And Price 



In an earlier section certain hypoth- 

 eses were made concerning the bargaining 

 position of Canadian fishermen and the 

 effect of this on price and the determina- 

 tion of "the lay. It is well to focus 

 attention explicitly on the subject of 

 Canadian primary market prices, as here is 

 an area in which there are significant con- 

 trasts with the price mechanisms found in 

 New England. 



In all the major New England ground- 

 fish ports with the exception of so..a9 in 

 Maine, there exists an auction system 



whereby the daily ex-vessel price of fish 

 is set by the interplay of free competition 

 or the semi-free forces of supply and de- 

 mand. This is most evident in Boston where 

 the existence of a vigorous fresh fish mar- 

 ket keeps daily prices sensitive to changes 

 in supply and demand and especially vola- 

 tile in periods of short supply. Daily 

 prices fluctuate less in ports such as 

 Gloucester where ocean perch landings axe 

 destined primarily for frozen fillet con- 

 sumption. In 1958, the United States De- 

 partment of Justice attempted, although 

 unsuccessfully, to secure indictments 

 alleging price-fixing in Gloucester. 



In the principal Canadian ports, there 

 are no auctions or exchanges and no fluctu- 

 ations in daily prices. One reason, of 

 course, is the absence of a fresh fish mar- 

 ket similar to the Boston market. Daily 

 prices to the fishermen remain unchanged 

 for months in Canada and are usually ex- 

 pressed in quarter-cent multiples. In New 

 England ports, it is a rare occasion when 

 the day's prices are the same as yesterday's 

 prices. Moreover, because of the vitality 

 of the auction system, prices are often ex- 

 pressed in such odd multiples as 11 35/100 

 cents per pound. 



Table 11-19 contrasts monthly prices 

 of cod, haddock, and ocean perch at major 

 Canadian and New England ports. It is seen 

 that in both areas there is a tendency for 

 the price to rise in the winter months when 

 supplies tighten. While in New England 

 there is considerable month-to-month price 

 variation, there is little such variation 

 in Canada. The Canadian fresh fish trade 

 establishes a winter and a summer price. 

 The difference is from one-half to three- 

 quarters of a cent per pound and is intend- 

 ed to encourage winter production. This 

 differential is larger, or as large, as any 

 changes which have appeared in the secular 

 trend in prices since World War II. 



A number of factors ultimately set 

 Canadian primary prices. It is important 

 to note the following factors: Canadian 

 groundfish fishermen are not organized as 

 bargaining units; they have more lijtiited 

 knowledge of their market than do the 

 buyers J there is no fresh fish market of 

 any significance where independent 



61/ Ibid., p. 76. 



31 



