New Brunswick Gets it Right

Given the history of false starts, the private sector’s reluctance to invest in the face of conventional wisdom is understandable. Arthur Mackay was the exception. His background, training, and profession put him in a unique position to discount prevailing pessimism. His success resulted in four other entrepreneurs immediately entering the commercial lists, followed by a line up of many other potential salmon farmers forced to wait until the smolt production could begin to look after demand.

How Mackay got his start is a classic example of how best to transfer technology to the private sector and encourage its use.

Arthur Mackay…Marine Products Ltd.Born in St. Stephen in 1939, Arthur Mackay was familiar with Charlotte County,

the marine area of which would become the center of the salmon aquaculture industry in New Brunswick. He earned a B.Sc. degree in biology from the University of New Brunswick. His honour’s degree required a thesis, for which he chose to work with Atlantic salmon, which came from the DFO hatchery at Florenceville, about 100 km up the Saint John River from the University. He spent two post-graduate years at McGill University studying mammalian zoogeography, before deciding to come back to his native province to pursue his love of the sea. At Lord’s Cove, a small fishing village on Deer Island, he established Marine Research Associates, a company which did consulting work, mostly in the area of marine sciences, and as well operated a biological supply house which provided live marine organisms to such places as laboratories in Universities and hospitals. He had done coastal surveys for the Provincial Department of Fisheries, and for Parks Canada, which gave him valuable information on oceanographic features of the West Isles region. This experience was extended eastward to Saint John from pre-siting work he did for the Coleson Cove, coal-fired power plant, and the Point Lepreau nuclear plant. He was an accomplished diver, spending many hours, at least once a week every week, year round, collecting live specimens, a perfect way to obtain first-hand information on the physical characteristics of the currents sweeping along the coast and through the islands of the West Isles. Mackay was aware, of course, of the culture attempts ending in failure because of lethally-low, sea-water temperatures during the winter. (Such events later came to be referred to as “superchill”, although the sea water at these temperatures is as it should be, and the fish are simply responding to the temperature where its intra- and extra-cellular fluids change to a solid state.) But from his work he had good reason to believe that the West Isles was an area where year-round salmon aquaculture in the sea would work.

The epiphany for Mackay came in 1973, when he attended an aquaculture conference at the College of Cape Breton, in Sydney. Accompanying him were Bill Groom, in charge of the St. Stephen office of the provincial Department of Fisheries, Dr. Arnold Sutterlin, a fish physiologist at the Biological Station, and Dr. Dag Moeller, an Atlantic salmon scientist from the University in Bergen, Norway, in his final year of a two-year secondment to the Biological Station, who gave a paper at the conference on the status of salmon aquaculture in Norway. Groom and Mackay had often talked about the

commercial aquaculture opportunities, from shrimp to eels, which might be tried locally. For Mackay and Groom, the conference, in particular Moeller’s presentation, convinced them that the future had to be with Atlantic salmon. New-comer Sutterlin was a convert from the start, and made an important lateral move. He went to Norway in 1976 and to spend a year learning about the burgeoning salmon aquaculture industry. While there he met Susan Merrill, an exchange student, whom he persuaded to return to Canada to join his research team at the Biological Station, another key member of which was the late Gene Henderson, a technician, who later became the first general manager of the New Brunswick Salmon Growers’ Association.

Dr. Saunders at the Biological Station, whose research, particularly in the smoltification process, was vital to the salmon farmers, and who later was to play important roles in the development of the industry, did not share his colleague’s optimism at the time. It must be said, however, practically nobody else did, either.

The fours year from epiphany in 1973 to action in 1978 was because of lack of resources, not lack of resolve on the part of MacKay and his small band of supporters. The key missing ingredient was smolt, which were in federal government hatcheries. Finally, in 1977, Sutterlin’s request for smolt was approved. The Director of the Biological Station, Dr. Bob Cook, who was later to be an important player in the development of the industry, supported Sutterlin’s request, but the bureaucratic climate, particularly in Halifax, was such he was forced to make it clear that the experiment could not be a formal, DFO sanctioned one. It had to be an informal, cooperative venture with what amounted to a pick-up team…but what a winning team it turned out to be. Sutterlin and his team raided an area at the Biological Station where cast off equipment was stored, referred to as the “Moose Pasture”, for material to build cages, small square ones about the size of a card table on top, and anchors to moor them. The Biological Station also provided a food grinder, which Mackay used for making fish feed, the ingredients for which he purchased with a $5,000 grant Groom obtained from the provincial Department of Fisheries. (Not quite right here. We actually provided a large building where food making was carried out, service boats and fuel, staff for food making, repairs, and monitoring, as well as marketing dollars and office space. We actually were in several tens of thousands when all was said and done. The 5000 from the Province did not pay all the food cost either.) This was the only cash contribution, except for the extra cost to Mackay of Wanda Huber specifically hired to be the fish feeder. Nelson Adams, a businessman in Fredericton impressed with the entrepreneurial spirit of the group, contributed needed mooring poles. The experiment began in May, 1978, with the arrival in Lords Cove, Deer Island, of 2,000 smolt from the DFO Mactaquac hatchery, located a few kms north of Fredericton on the Saint John River.

The fish came through the 78/79 winter with flying colours. (Actually they were underfed and looked like arrow when we took charge. They quickly recovered however. That’s an interesting story in itself) In March, 1979, it was decided the MacKay should take complete charge. He did by establishing a new company, Marine Products Ltd. The Federal Department of Supply and Services, impressed with the successful over wintering of the fish, issued a $100,000 contract to MRA to conduct a more rigourously designed

experiment in 1979/80 than the one covering the winter just past, where the focus had been simply on whether the fish would survive or not. The wisdom of Mackay establishing MPL, and in the government’s decision to issue it a contract, were well founded when in the fall of 1979 the fish were marketed, heads on, gutted, at the astounding price of $7 a lb. For the stock going into the cages in the spring of 1979, for marketing 18 months later in the fall of 1980, Atlantic salmon smolt (number to be added) again came from Mactaquac, and added to from the Atlantic Salmon Federation, whose experimental Atlantic salmon hatchery at Chamcook, just outside St. Andrews, was now in full operation, and had some smolt to spare. In addition, Rainbow trout from a commercial source in Ontario, as well as Pink salmon from the Biological Station, were used. The cages were much larger, and more professional designed, and built entirely by MPL.

The harvest in the fall of 1980 was encouraging. (details to be added)

The Lords Cove venture stood conventional wisdom on its ear. The reason was what the optimists had suspected. For each tidal cycle, about 100 cubic kilometers of sea water flood in and ebb out of the Bay of Fundy, bringing with it in the winter relatively warm bottom water, upwelling to the surface, particularly from the Grand Manan Basin situated between Grand Manan Island and Nova Scotia. This happens twice a day. The moderating influence of the warmer deeper water is sufficient to prevent the lethal level of –0.º7C being reached, except, as was learned later, in areas with a low sea-floor slope, resulting in lengthy, shallow mud flats so cold air temperatures can more easily lower sea-surface temperatures, as the water moves slowly in and out over the flats. There is another important, positive feature of the huge amounts of tidal water. The strong currents bring in well-oxygenated water to the cages, and at the same time remove the products of metabolism, such as urine and C02.

Mackay realized he was on to something; and, furthermore, first in line. He acted aggressively. He established a separate company, Ocean Products Inc., in Maine, with sea cage operations in Cobscook Bay, near Eastport, and a hatchery at Deblois. In Canada, he built a hatchery at Oak Bay, near St. Stephen, and acquired a second one at Springhill, near Sussex. At the peak of his operations he had a staff of ____80 plus__ in two countries. Unfortunately things did not go smoothly. To start off the U.S. operations, OPI received 200,000 smolt from government hatcheries in Maine. In New Brunswick, in 1981, when the new entrants were provided smolt from federal hatcheries, Mackay was informed that MPL was no longer eligible. This put a huge crimp in his operations since none of his Canadian hatcheries were yet producing smolt. But he persevered, and with notable success. The New Brunswick Fisheries Development Board issued its first-ever aquaculture loan, in the amount of $660,000, to MPL. But serious problems soon arose. Over time, and with experience, the industry soon learned how to adapt. But Mackay was a groundbreaker, a pioneer in the true sense, leading the way, alone. Disease, particularly BKD (bacterial kidney disease), and predation from grey seals, resulted in large losses. But he had a more intractable problem dealing with ownership. A member of the OPI Board successfully launched a hostile takeover bid of the company. (The writing was on the wall and I resigned as CEO and President at this time and was turfed out of my own

offices and the business that I had built over 20 years.)The Directors of the Boards of OPI and MPL were almost the same people, and they decided to concentrate all operations in Maine, walking away from MPL and its New Brunswick assets, including the loan from the government. Mackay requested that the Province turn over MPL to him, and he would continue to operate the company and assume responsibility for repayment of the $660,000 loan. The request was denied. MPL went into receivership. The province’s loan was repaid from the sale of MPL’s not inconsiderable assets.

Arthur Mackay successfully returned to consulting. Currently he is Executive Director of a non-profit, charitable environmental-advocacy organization.