N.B. lobster processors living with uncertainty as clock ticks on U.S. tariffs reprieve

Lobster processors in New Brunswick are relieved that U.S. tariffs on Canadian imports have been postponed, but there is still a possibility they will be implemented in March, creating anxiety in the industry.

"That's the frustrating bit," Nat Richard, executive director of the Lobster Processors Association in the region, said.

"It just extends the uncertainty, which is not great for business for sure."

The United States is by far the largest consumer of Canadian lobster.

A Fisheries and Oceans Canada report from 2021 pegged the value of Canadian lobster exports to the United States at $2.2 billion. The next nearest country is China, at $483 million.

Richard said New Brunswick sends about 75 per cent of its frozen lobster products to the U.S., and the province makes up 50 per cent of the global supply of frozen lobster.

If tariffs were implemented, it would likely mean U.S. importers would pay less for Canadian lobster.

"While it's true that … tariffs are effectively an import tax paid by the importer, there's no question that we're likely to see a lot of it being pushed back on us," said Richard. 

"They're probably going to push back and there's going to be downward pressure on prices, on market prices."

Integrated industries

The concern for the lobster industry extends into the United States, as well.

Chellie Pingree, the Democratic congresswoman for Maine's 1st district, said lobster often goes back and forth between the two countries for processing.

"There are often times when our lobsters go to your processing facilities, and there are times when yours come down to ours," said Pingree.

Kristin Vekasi, a political scientist at the University of Maine in Orono, said the two industries work in tandem.

"The lobster industry is very complimentary in a lot of ways with Canada, in terms of having different fishing seasons and having different production facilities and being able to access different markets right through that co-operation," said Vekasi.

Richard said New Brunswick buys a lot of Maine lobster to process into frozen lobster meat, making any tariffs bad news for all involved.

"Inevitably there would likely be pain on both sides of the border for an integrated industry such as ours," said Richard.

Diversification difficult

While diversification of markets is something Richard supports, he said it won't be simple.

There is an already heavily integrated supply chain between Canada and the United States to deal with.

And while other countries like China buy more lobster, they prefer live lobster, while New Brunswick largely deals in frozen lobster meat, Richard said.

It may be possible to sell more Canadian lobster to Canadians, but "our market is inherently smaller than the United States."

"We're not going to absorb everything we produce here, even if every Canadian ate lobster for breakfast, lunch and dinner," said Richard.

Tariffs would put New Brunswick in the position where the province would essentially have to grin and bear any U.S. action.

"We're not going to walk away from the U.S. market, whether this is a tariff or not," said Richard. 

"It's just too large, and frankly, often it's the most attractive one as well."