Q&A: John Risley, co-founder, Clearwater Seafoods

Atlantic Canada just can't seem to get it together. Clearwater Seafoods co-founder John Risley says fear of change is to blame.

John Risley of Clearwater Seafoods (Photo: Aaron McKenzie Fraser)

Whose fault is it that Atlantic Canada’s economy is so sluggish? John Risley, co-founder of Nova Scotia seafood producer Clearwater Seafoods, says Maritimers themselves must share some of the blame.

Faced with an aging population, high unemployment and an exodus of young workers, the Atlantic provinces have been slow to adapt to a changing world, falling further behind the rest of the provinces—while becoming more dependent on federal transfer payments. Risley knows the territory, and he knows the stakes: in addition to his role at Clearwater, he serves as an adviser to 4Front Atlantic, an annual conference series focusing on how to improve the Maritime economy and business climate. Risley’s own career is proof that global businesses can be built in Atlantic Canada. Not only did he co-found Clearwater, but he also grew Ocean Nutrition Canada into the world’s largest producer of Omega-3 fatty acids, selling it recently to Dutch firm Royal DSM for $540 million. Risley explained to Canadian Business senior writer Joe Castaldo that if the region is to produce more successful businesses, it needs to foster innovation, promote entrepreneurship and, hardest of all, transform its change-averse culture.

Canadian Business: Why are you worried about the future of Atlantic Canada?
John Risley: I don’t think there’s any question that we’re falling behind the rest of the country. You can’t ignore the statistics. We continue to have the country’s highest unemployment rate—we have had it for decades. What’s particularly worrying now is the demographic shift. We can’t do anything about the segment of society getting older, but we can do a lot about young people leaving the jurisdiction. That’s what’s making our demographic profile the worst in the country. At the same time, the traditional industries of Atlantic Canada are having to scale back to survive, and in doing so, are not the base employers that they once were. They’ve got to be replaced by something, and we’re doing a terrible job at replacement.

CB: You’ve said before that some of these problems can be traced back to the culture in the Maritimes. What do you mean by that?
JR: I want to be careful not to be critical of anybody’s values. Everybody has a right to their own value system. But people are afraid of change because of the uncertainty that it brings. That is exacerbated in communities that tend to be very inward looking, and if you look at the history at rural Atlantic Canada, this is absolutely the case. A significant portion of the population has a real local focus. What they’re essentially saying is, “We’re pretty happy, so please leave us alone.” That was great for a time, but you can’t allow that to develop into complacency. With the impact of globalization, you’ve got to become a part of the world. You cannot put up a wall.

CB: Where does this reluctance to change come from?
JR: It comes from geographic isolation, in one respect. Most people went through 2008 and 2009 and got a real shock. Virtually every Canadian was affected, but in Atlantic Canada, people were affected much less because the government and government institutions play a much larger role in economic life than they do anywhere else in Canada, except the north. The percentage of GDP that’s driven by government in Atlantic Canada is much, much higher than it is anywhere else in the country. So people in Atlantic Canada said, “What’s the big deal? There’s a crisis in the rest of the world, so why would we want to become more like the rest of the world?”

CB: So how do you change that attitude?
JR: People need to stop and reflect on our successes. You can take basic businesses that have been here in Atlantic Canada for 100 years and move them on to the world stage. We certainly have done that in our fish business. We do business all over the world. It’s been able to succeed in an otherwise tough industry because we’ve been willing to invest in innovation. The McCain Foods French-fry business is another great example. Why on earth is the world’s largest French-fry company based in New Brunswick? Well, it’s based in New Brunswick because it’s become the most innovative producer of French fries in the world, and built a global business around that. But people don’t get the message. We’re not good about talking up our successes.

CB: Successes like what?
JR: I was amazed at the kind of the things I’ve heard John Bragg [president of Oxford Frozen Foods] talk about what he was doing in his blueberry business. I had this vision of a whole bunch of people out in the field picking blueberries. But I had no idea there were four- or five-hundred-thousand-dollar harvesting machines that were designed right here, that are absolutely unique. No doubt one of the reasons why one of the largest blueberry companies in the world is here in Atlantic Canada is because we had an entrepreneur willing to invest in innovation. That’s the message that we need to drive home, that we can do that here in Atlantic Canada.

CB: The federal government’s reform of employment insurance has generated some controversy in the Maritimes, particularly in how seasonal workers who rely on EI could be affected. What are your thoughts?
JR: What you really want to do is say to [older seasonal workers] that you just can’t expect to continue to do this when there are ample job opportunities across the country. You can get a pretty good job in Saskatchewan or Alberta or Manitoba, and the benefits are pretty good. I’m sorry, you may not wanna pick up, maybe you don’t want to do this, but you gotta understand, it’s not the responsibility of the rest of the country to keep you in this lifestyle.

CB: That sounds a little harsh. What about the effect on communities?
JR: Talking about the culture, and how fishing was practised here 50 years ago, and how romantic it is to think about these fellows who would get out there and haul their traps in by hand—that’s an admirable quality in folks. But try to find anybody who wants to go back to that, and you won’t. My point is, the culture has to change. It doesn’t mean you have to lose it entirely.

CB: Some of the provincial politicians are concerned these EI changes will force seasonal workers to find jobs outside of their traditional industries, and then they won’t return. Is that a risk?
JR: I can tell you that many fish plants in Atlantic Canada now get special immigration permits and bring in folks from the Philippines and Vietnam to augment the seasonal workforce, because what you described is happening as we speak. I don’t think that’s a bad thing. You could say, what a shame there are no Canadians, but the Canadians who were working there are now working elsewhere in the country making a hell of a lot more money. What’s wrong with that?

CB: You’ve said that to create more opportunities for people to stay and work in the Maritimes, you have to encourage entrepreneurship. How can you do that?
JR: You need to encourage people who would never think that they could start their own business, who think they could only be an employee, to understand the huge benefits from trying to become an employer. So many Canadians are so afraid of the prospect of failure that they put out of their minds any idea that they could succeed at business. We need to be much more accepting of failure, and people need to understand that there’s no downside to failure. I would much rather hire a 28-year-old who had gone out, tried to start his own business and failed than someone who had just been an employee. The guy who failed would always get higher marks simply because he has learned so much more through that experience.

CB: So what does Atlantic Canada have going for it?
JR: Atlantic Canadians are just great workers. They’re very disciplined, and great contributors to any workplace. That cannot be underestimated. The second is the character of the people. This gets back to the history of the region, one steeped in very traditional and industrious occupations. Many rural communities were still largely independent of government as recently as the 1950s. These were communities that had very little transportation infrastructure, very little government support and, in some cases, no electricity. These people were industrious to the point where they learned to live without the support of government. When there was a problem, it was a problem they addressed as a community, and this made for an extremely independent people with a great deal of ingenuity. That ingenuity remains very much a character trait.