Clearwater Seafoods lays off employees at 2 Nova Scotia facilities

Fishing giant Clearwater Seafoods has laid off employees at two of its Nova Scotia facilities as a result of recent changes to its inshore lobster business.

In a statement Thursday, a company spokesperson said Clearwater is changing its inshore lobster procurement, grading and live storage and processing businesses.

Its processing plant in the southern Cape Breton community of Arichat, N.S., closed Wednesday and staff were laid off. Staff at its processing facility in Lockeport in southwestern Nova Scotia were also laid off.

Christine Penney said it will no longer operate the seasonal lobster processing line at its Lockeport facility.

The Lockeport plant will remain open and will operate as a scallop-focused facility year-round, but employees working in lobster processing have been permanently laid off.

Penney said the company is in late-stage negotiations to sell its live lobster holding facility in Arichat to an "experienced local operator."

She said the live holding facility is being temporarily shut down in advance of the sale because there is currently no inventory. As a result, staff were temporarily laid off.

"Subject to the completion of a final agreement of purchase and sale, the employees in Arichat will transition to the new owner of the facility," she said.

Penney said Clearwater is refocusing its lobster business on its offshore harvesting operations.

"These changes are difficult but necessary to increase resilience and secure the long-term health of the business in challenging market conditions," said Penney. 

"They realign the business and refocus on our greatest strengths — the vertically integrated, frozen-at-sea, offshore harvest, processing and global distribution of premium wild caught shellfish."

The statement from Clearwater said it employs 1,100 people across Atlantic Canada.

'Shock and sadness'

Lockeport Mayor Derek Amalfa said about half of the 145 people employed at the Pierce Fisheries plant in the town will lose their jobs, but the plant will remain open to process scallops.

About 480 people live in Lockeport. The plant is the coastal town's largest employer, processing about four million kilograms of sea scallops and lobster annually.

"It's a lot of shock and sadness," Amalfa said in an interview. "All of the people who lost their jobs are longtime employees, and they are all our friends and neighbours and family. This is going to have a deep impact in our community."

The mayor said officials with the company told him the layoffs were necessary because economic factors made the seasonal lobster processing business unsustainable.

"Right now, we are just trying to look after one another," said Amalfa, who was elected in October. "It's a scary time. But we are a very resilient and close-knit community, so I have no doubts that our community will rally and we will continue to support one another."

'I couldn't believe it'

Nancy Wadden, who is with the Maritime Fishermen's Union, said the news came as a shock.

"Clearwater is so invested in the lobster industry that I couldn't believe it that they were selling their plants and stepping back from it," she told CBC's Mainstreet Cape Breton.

Geoff Irvine, executive director with the Lobster Council of Canada, told Mainstreet Cape Breton the company was a pioneer in opening up world markets for Canadian lobsters.

"The Clearwater lobster brand was a premium brand in the world and that is what a lot of people think about when they think of lobster from Canada," he said.

Irvine said the live lobster business is a tough one and with the state of world affairs, it's getting tougher.

Industry concerned about tariffs

"The world pays very high prices, but at certain times of the year, because of our seasonality, lobster gets very expensive," he said.

"So the risks of holding it and processing it and selling it — and the market changes — are very high. So it's very challenging to make money consistently."

Irvine said the threat of U.S. tariffs might not have been the sole cause of Clearwater's decision to change its business focus, but the industry is definitely concerned.

"If we have 25 per cent tariffs this spring, it's going to be very challenging for our sector and we will have to find ways to get through it."

Richmond County Coun. Shawn Samson, whose district includes Arichat, said the layoffs in his community are considered temporary, but they still have people feeling uneasy.

"There is a lot of fear and a lot of uncertainty and then people are hoping that this pending sale and potential buyer … does come through for them and hopefully they get back to work for the upcoming season," he said.

Operations around the globe

Clearwater's revenue for the third quarter of 2024 increased by $4.5 million to $154.1 million, mainly because of improved harvesting of scallops off Argentina, the sale of clam inventories that were carried over from prior quarters and improved turbot catch rates.

The company, however, said this good news was offset by below-average harvesting for Canadian scallops, clams and deepsea lobsters.

In January 2021, Premium Brands Holdings Inc. partnered with seven Mi'kmaw communities — led by the Membertou First Nation in Cape Breton and Miawpukek First Nation in Newfoundland and Labrador — to finalize the purchase of Clearwater for a total investment of $1 billion.

Membertou Chief Terry Paul has said the 50 per cent share purchased by the communities was the largest investment ever by Indigenous bands in the Canadian seafood industry.

Aside from scallops and lobster, Clearwater harvests other seafood in Canada, Argentina and the United Kingdom, with sales in 48 countries around the world as of 2023.