Main economic activitiesThis section explores the Saint-Pierre and Miquelon economy according to its primary sector (agriculture, farming, fishery and aquaculture), secondary sector (processing of fishery products, public buildings and works, crafts, energy and environment), and tertiary sector (trade, tourism, transportation, telecommunications and services) activity sectors. Primary sectorFor a long time, the local market was supplied by the archipelago's own agricultural sector. For nearly 20 years now, the agriculture industry has come to rely more on external trade. In 2007, most of the production was carried out by six businesses and 25 employees. These farmers produced over 30 agricultural products. Lettuce took first place in production with more than 67,000 units; tomatoes were second, with more than 6 tonnes. In 2007, meat production in the archipelago consisted primarily of meat-type chicken (37,282), duck (1,420), and sheep (238). Poultry farming is mainly carried out by the Société Saint-Pierraise d'Élevage. Duck farms are operated by the Ferme de l'Ouest, foie gras being the main product of this activity. The fishing industry in Saint-Pierre and Miquelon has experienced a significant decrease in activity over the past years. The decision of the New York arbitral tribunal in 1992 and the cod moratorium imposed by Canada are the main causes of this decrease. The United Nations authorized the coastal states to develop exclusive economic zones (EEZs) extending up to 200 nautical miles. This decision led to a dispute between France and Canada concerning the French EEZ of the Saint Pierre and Miquelon archipelago. The New York arbitral tribunal decided that the EEZ would extend to approximately 21 nautical miles around the archipelago, forming a 10.5-nautical-mile-wide and 200-nautical-mile-long corridor from north to south. Thus, the total area for the archipelago was established at just over 2,500 nautical miles. The same year, in 1992, Canada implemented a five-year moratorium on the cod fishery, which is still in effect in several areas. The territorial waters of the archipelago are limited to 12 nautical miles. Canada and the islands of Saint-Pierre and Miquelon also signed an agreement in 1972, which was followed by a memorandum signed in 1994. This agreement determined the quota for the archipelago in the 3P area. The Total Allowable Catch (TAC) is set annually by the Conseil consultatif des pêches franco-canadien. In 2007, it was agreed that the cod quota would be 2,210 tonnes (1,602 tonnes for industrial fishing and 608 tonnes for traditional fishing), 306 tonnes for redfish, 73 tonnes for witch flounder and 1,155 tonnes for North Atlantic scallop.
Figure 1
Source: Northwest Atlantic Fisheries Organization (NAFO), http://www.nafo.int/fisheries/frames/fishery.html.
NAFO regulates fishing activity in the international waters between Canada and Greenland. This organization manages the fishery resources, with the exception of salmon, tuna, marlin, whales and other secondary species. In 2007, the NAFO area quotas for Saint-Pierre and Miquelon were:
Management of tuna resources is handled by the International Commission for the Conservation of Atlantic Tunas (ICCAT). The 2007 quotas were the following:
Industrial fishing in Saint-Pierre and Miquelon is handled entirely by SPM Seafood International, which employs approximately sixty full-time workers and ten seasonal workers. In 2007, this type of fishing accounted for 1,675 tonnes of cod, 160 tonnes of rock cod, 7 tonnes of flounder and 83 tonnes of other types of fish, totalling 1,925 tonnes. Canadian vessels under contract also fish a certain quota. Of the total catch (local businesses and under contract), crustaceans are in first place with 52% (especially cold water shrimp and snow crab), pelagics are in second place with 30%, groundfish with 12%, and finally shellfish, with 6%. Traditional fishing employs approximately thirty small- and medium-sized vessels. In 2007, this type of fishing harvested 521 tonnes of cod, 23 tonnes of lumpfish, 153 tons of snow crabs, and 996 tonnes of other types of fish. Recreational fishing plays an important role in Saint-Pierre and Miquelon. The archipelago has over 800 pleasure crafts, which are also used to travel from one island to another. Recreational boaters are especially interested in lobster fishing, for which there is a maximum catch of four per outing. For this reason, the local market for lobsters is somewhat limited. Finally, it is the French State that provides resource management in the territorial waters of the archipelago, with the technical support of the Institut Français de Recherche pour l'Exploitation de la Mer (IFREMER) and the Service des affaires maritimes. The snow crab quota was 286 tonnes in 2007, while no quota was set for other species, such as flounder, whelk, lumpfish, skate and lobster. Aquaculture has only been practiced in the archipelago for a short time. Two projects are currently underway: cod grow-out, initiated in 2002 by Aquafutur, and scallop farming, initiated in 1998 by the Association pour la recherche et le développement de l'aquaculture (currently managed by Exploitation Des Coquilles). Secondary sectorThe secondary sector includes the processing of fishery products, public buildings and works, crafts, energy, oil and gas, and the environment. Processing of fishery productsThe sector involved in the processing of fishery products consists of four businesses.
The territory, due to its status as an OCT, can benefit from an exemption to the rule of origin, therefore allowing foreign goods, for example, from Canada, to be considered as originating in Saint-Pierre and Miquelon, as long as sufficient processing took place locally (generally, 45% of the value of the final goods). These goods can then be exported to the European Union, duty-free. The archipelago thus benefits form an annual exemption for 250 tonnes of scallops; 105 tonnes of frozen lobster tails, claws and legs; 1,290 tonnes of fillets of hake, haddock, pollock, plaice, flounder, sole, codfish, red fish, bream, frozen turbot and Atlantic turbot; frozen meat or stuffed haddock, pollock, hake, codfish; salted cod fillets and whole salted codfish. Moreover, the archipelago has a skilled labour force and the expertise necessary for processing and exporting several of these products, mostly for the European or American markets. Public buildings and worksThe public buildings and works (BTP) sector is the third major sector in the archipelago. This sector creates 11% of the value added, while administrative services create 39% and trade 14%. In terms of employment, the BTP sector employs 10% of the Saint-Pierre and Miquelon labour force. It is important to note that this sector relies heavily on investments from France and the Collectivité territoriale, which injected several million euros in the following categories: construction, public buildings, water networks, sewage and electricity, road, port and airport infrastructure, as well as engineering works and coastal protection. What is interesting is that less than 13% of the main residences in the archipelago have been built since 1999. More than 40% were built between 1975 and 1998, while approximately 30% were constructed between 1949 and 1974. CraftsThe crafts sector includes food, building, transportation, repairs, services to individuals, textile, clothing and other crafts. Over 60 businesses are active in the archipelago's building sector, which is nearly half of the businesses involved in craft operations. Transportation, repairs and other service sectors follow with 39 businesses, services to individuals with 17 businesses and the food sector with 13 businesses. The territorial council can offer an equipment allowance to improve the facilities of these companies. The company must employ a minimum of 15 workers and conducts its activities on a continuous basis in the archipelago. This assistance may be included in the tax and customs benefits already specified in the Code local des investissements, in addition to assistance in setting up € 3,050 of working capital. (See section 3.2.4 for more details). EnergyProduction of electrical energy in Saint-Pierre and Miquelon increased to nearly 45,000 MWh in 2007. Approximately 85% of the demand comes from Saint-Pierre, while the remaining 15% comes from Miquelon. Power plants in the archipelago run on fuel oil. Power plants needed approximately 12,000 tonnes of fuel oil to operate in 2007. Miquelon has wind turbines that produce renewable energy. The energy produced by these wind turbines covers nearly a quarter of Miquelon's demand. To produce 1.7 million kWh per year, Miquelon is equipped with ten Gev 15/60 wind generators that can generate 60 kWh each. The renewable energy they produced accounted for 3% of the archipelago's total electricity production in 2007. A project by the EDF Group to build a plant is underway. The new power plant will meet environmental standards and should be in commission in 2012. It will also be possible to connect the plant to a private wind farm. Oil and gasOil and gas are another component of the energy sector. It is especially important for the archipelago, not only to run power plants and provide gasoline for vehicles but also to provide household heating. The archipelago is entirely dependent on imported oil and gas, which totalled 25,000 tonnes in 2007. Louis Hardy S.A.S. distributes it within the archipelago. It is important to note that the cost of fuel oil for heating households, as well as the cost of gasoline for cars, is set by the Préfet. In 2008, it was set at € 0.64 a litre. In 2005, the Government of Canada and the Government of the Republic of France signed a unified agreement on oil and gas. This cross-border, Franco-Canadian agreement includes the Canadian provinces of Newfoundland and Labrador as well as Nova Scotia and the archipelago of Saint-Pierre and Miquelon. The terms and conditions of the agreement focus primarily on sharing of costs and benefits associated with oil and gas development fields in contiguous waters. If the development of resources in French territory is not yet a reality, the archipelago hopes to position itself in the short term in the provision of oil and gas exploration and development services by fostering business partnerships with nearby Canadian provinces. EnvironmentWater management is based on a water treatment plant that draws water from ponds. The cost of water consumption in the archipelago is deducted from individual income taxes by the communes, hence there is no billing for water consumption to individual consumers. The archipelago's biodiversity also presents challenges, the most important of which are knowledge building and awareness raising. The economic development of Saint-Pierre and Miquelon depends, among other things, on its efforts to overcome these challenges since its rich biodiversity contributes positively to tourism in the archipelago. A biodiversity plan was adopted in 2008, in partnership with the French State and the Conseil territorial. It is an inventory of the territory's rich biodiversity and it addresses the conservation and educational activities to be undertaken. Tertiary sectorThe tertiary sector, which includes trade, tourism, transportation, telecommunications, as well as services, is responsible for approximately 85% of the archipelago's value added. The transportation sector is based on air (section 4.4.1), maritime (4.4.2) and road infrastructure (see section 4.4.3). Harbours and airports are particularly important for the archipelago, considering its isolation. TradeIn 2007, 118 businesses were active in the trade sector, representing one quarter of the businesses registered. They create 14% of the archipelago's wealth. Of the overall trade sector, just over two thirds of the businesses are in the retail trade and almost a quarter are in wholesale and intermediate trades. More than 400 workers are employed in these businesses, which is approximately 15% of the labour force of Saint-Pierre and Miquelon. TourismWith an emphasis on culture, history and nature, tourism is a pathway towards the archipelago's economic diversification. Approximately 12,000 tourists visited the archipelago in 2007, 55% of which were Canadians. Of these Canadians, almost half were from Newfoundland and Labrador, 16% from Quebec, 12% from Ontario and 11% from the maritime provinces (Prince Edward Island, New Brunswick and Nova Scotia). Americans were the second largest group of tourists and the metropolitan French made up the third. The length of stay is usually short. Nearly 60% of tourists stay for 2-4 nights and 33% stay for only one night. The archipelago of Saint-Pierre and Miquelon offers several tourist attractions. For example, there is a seafood festival, a western festival, a Basque festival, a musical festival, a 25km marathon and several guided tours. Six museums feature permanent exhibitions, special-interest tours and much more. Museums are open during the tourist period, from June to September. TransportationSaint-Pierre and Miquelon has port, airport and land infrastructure. Ports and airports are both important for the archipelago because of its insularity. TelecommunicationsSaint-Pierre and Miquelon has regular and wireless telephone networks, as well as Internet service and a videoconferencing system. For more information, please refer to the section on communications infrastructure. ServicesThe main sectors are health, education and social services. BusinessesIn 2006, approximately 500 businesses were based in Saint-Pierre and Miquelon. The following table shows the number of businesses by sector.
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