Nova Scotia MP questions Chinese 'control' over lobster industry

A Nova Scotia member of Parliament is raising concerns about growing Chinese "influence and control" on the province's lobster industry supply chain, especially at Halifax Stanfield International Airport.

The Halifax International Airport Authority denied the claim. And a major Chinese seafood exporter — whose influence is being questioned — called it "kind of racist."

"My concern overall is the growing influence of China and the control of our lobster industry itself and that's throughout the supply chain," said Rick Perkins, the Conservative MP for South Shore-St. Margarets, where lobster fishing is a cornerstone of the economy.

"They're doing it through the back door what they couldn't do through the front door, which was basically [to] own the actual fishing licences. They can't do that, so they're trying to control the buying and the export at the airport," said Perkins.

Perkins raised the issue recently at a parliamentary committee looking into foreign ownership and corporate concentration of commercial fishing in Canada.

"What about China? I know, for example, on the South Shore, I'm seeing China buy our buyers. What's the impact of that? I also understand they control the freight forwarder at the Halifax airport," Perkins asked Colin Sproul, an inshore fishermen's representative appearing before the committee.

"I'm really happy to hear you raise that issue. I think that's one of the most important things that the government can do is ensure national Canadian control of our logistics chain within the country," Sproul responded.

Perkins said "non-China owned lobster buyers" in southwest Nova Scotia are forced to truck lobster to airports in Moncton and New York "because of foreign control of the live seafood terminal at Halifax."

Perkins is referring to First Catch, the Chinese export company that spent $9 million on its own lobster handling facilities at Halifax airport's new Air Cargo Logistics Park, where it is an anchor tenant with a 25-year lease.

Under federal law, only Canadian independent owner-operator fishermen are allowed to harvest lobster. But there are no foreign ownership restrictions on the sale of existing onshore plants, although there is a moratorium issuing new shellfish buyer and processing licences.

Lister Li, president of First Catch, told CBC News she understands "people will be nervous," but says fears of Chinese control are unfair, saying no one questions U.S. ownership of lobster businesses.

"I think because, recently, there's a lot of Chinese people buying plants and then trying to get into this industry," she said. "But by Chinese, I think those people are just Asian. Then maybe Canadian. Maybe they have a Canadian passport. Maybe they grew up here. It's kind of racist."

'We don't control all the lobster handling in Halifax'

First Catch also charters flights to China and has an interest in a cargo-handling company, Summit Ground Services.

"It's not a fact. We don't control all the lobster handling in Halifax. We only do what we are shipping out," said Li.

Li lives in Canada and says shares in the enterprise are being transferred to her, making First Catch a "Canadian company."

Both Li and the Halifax International Airport Authority say live lobster shippers have other options for freight forwarding, planes and ground handling in Halifax.

Live lobster is being trucked to Moncton — which is on pace for a record year of lobster cargo exports in 2023 — mostly because rates are cheaper for flights connecting to China, says Li.

First Catch has subleased the old Purolator building at the Halifax airport to 2025 and it's not available for use by other shippers and freight forwarders.

Long-term strategy

That is not to shut them out, says First Catch general manager Yuchen Ji, but part of a long-term strategy.

"The idea is we have this new building for our lobster export [in the logistics park], but that building in future will be used ... for imports from China, from Korea, for other countries, to Halifax, which we are planning to make Halifax airport as a hub for that purpose," said Ji, a Dalhousie University graduate.

In the meantime, First Catch has rented out space there to others.

Perkins alleges the company favours Chinese-connected buyers for movement out of Halifax. It's another charge First Catch denies.

"This statement is not true. We are not in a position to control the air freight because we're not a freight forwarder. We are just a seafood exporter," said Ji.

"When we do run our own charter and when our charter is not full, we do have a freight forwarder we go to, then they can share this space to the markets, basically to anyone in Nova Scotia."

High demand for lobster in China

The Chinese appetite for lobster has exploded over the past decade, making it the second-largest export destination for Canadian lobster after the United States. 

It's the result of a growing Chinese middle class, provincial trade missions and an industry pivot to supply the new market, which was further boosted by a Trump-era trade war with China that resulted in huge tariffs on U.S. seafood.

Canadian shipments of live lobster to China, mostly from Nova Scotia, were worth over $450 million in 2022.

Nearly 16,000 tonnes of lobster — valued at $293 million — moved through Halifax Stanfield in 2022, according to the airport. First Catch represented about 14 per cent of the exports.

Chinese demand has been a boon for lobster fishermen in Atlantic Canada, keeping prices up even as landings rose.

Chinese-owned or connected companies have moved to get closer to the resource, buying existing lobster plants in Nova Scotia, starting in 2014 when Chinese giant Zoneco purchased a lobster pound in Eastern Passage near Halifax.

Other options for shipments

Veteran lobster buyer Stewart Lamont of Tangier Lobster says First Catch does not control lobster shipments to China, since there are many other options available at the Halifax airport.

"My answer is no. A foreign-owned entity which has invested a substantial investment here in Nova Scotia is a part of the overall puzzle. There's no denying that First Catch is a dominant player, but to suggest they control things I think is inappropriate."

Lamont says his company submits prices it's willing to pay to First Catch for lobster it sends to China. Both parties can accept, negotiate or reject those.

"Our company, we call ourselves travel agents for lobster. We decide to whom we sell, at what price we sell. And what logistic options we provide to get the goods to the international market," he told CBC News.