Newfoundland fishing processors need to move on

Ok, so in Newfoundland there is a debate about processing fish once it's caught. The problem is once Newfoundland processors are finished with it, the fish isn't really worth much on the open market because it's so expensive to process here. Right now, because of the law, fish MUST be processed in Newfoundland, ostensibly to give certain Newfoundlanders a job. They argue that shipping the unprocessed fish products out of the province will cause their industry to fail.

The CEO of Ocean Choice International says in order to stay competitive, they have to ship the fish off to other countries to be processed. So this comes down to protectionism. One of the suggestions to keep the processors happy is to subsidize the industry with tax dollars. So if it costs them $1000 per ton to process, but the open market pays $500, the gov will subsidize them by $500 per ton.

That's what I like to call a stupid idea. You could say that for any industry. Why doesn't Newfoundland have a pencil industry? Why do we import pencils from China? Because it's cheaper to make pencils in China. They have a competitive advantage. But we could just as easily say the government of NL should subsidize pencil manufacturers. The same arguments could be made - it would save jobs, employ x number of people, stimulate our economy, etc. But we can clearly see this is an enormous fallacy.

We might as well market in fairy dust. That market could also be sustained with government funding. I say this because it's much easier to see the absurdity of this when you phrase it in a certain way.

The reason for this problem is that the interests of the few is concentrated, unlike the interests of the many which are diffuse. Think about it. If the government subsidizes this unsustainable industry, it may cost each taxpayer $50 per year. That's nothing to sneeze at, but it's not a make or break for most people and it will typically get forgotten in the grander tax-collection scheme of things. However, for the processor working at the plant, this could mean their immediate livelihood. They could lose a lucrative job.

So, when the rubber meets the road, who do you think is more motivated to express their point of view? Obviously the plant worker. This is the general problem with taxes anyway. A few people benefit a lot, but it is to the detriment, on a small scale, to countless people.

What should happen is these people move into sectors where Newfoundland has a competitive advantage. Stop whining about "slave labor" from other countries, that only hides the fact that we are uncompetitive in certain areas. We have competitive advantages in the oil and gas industry, in certain types of fishing, etc.

We must stop funding the unproductive sectors of the economy with the productive ones.