Thank you very much.

Good day, esteemed members.

It's a pleasure to be here today to represent North American Fur Auctions and to talk about the importance of licensed hunting and trapping in Canada and to Canadians.

There remain aspects of the fur trade that many believe have disappeared into the history books, decades or even centuries ago. Your review is timely and important to the tens of thousands of Canadians who continue to support their families from the fur trade.

You know me from my 11 years with the Fur Institute of Canada as executive director—and I'm pleased to see they're here today—or my two years with the International Fur Federation. I'm also pleased to see they're represented here today.

In 2014, I moved back to the trade side of the business, which is perhaps a little more natural for me, as I grew up in a small fur family business in Peterborough, Ontario, where, along with my brothers. we learned the craft of making fur coats from our father, who is a master furrier from England. From a young age I was grading raw fur pelts in the basement of our family business in Peterborough, where my father would buy skins from local trappers and learned that craft. My brother continues that family tradition today in Peterborough.

Now as senior vice-president of marketing for North American Fur Auctions, I have the pleasure of travelling around the world to visit the fur centres of people who are using our wonderful furs in Europe, Asia, the United States and, of course, across Canada. I draw from my substantial experience of servicing the trade over the past 12 years, where I know well the professionalism of Canadian trappers, fur farmers, and the government controls and monitoring measures that ensure compliance with humane trapping standards and the health of our precious wildlife populations. I see the interest and demands of the world's fashion community in using these beautiful and abundant furs to make extraordinary garments and fashion accessories.

For those of you who are not aware, North American Fur Auctions traces its roots directly to the company of adventurers trading into Hudson's Bay, more commonly known as the Hudson's Bay Company. The Hudson's Bay Company sold off their fur trading division in 1987 and focused more, for cost-cutting measures, on their retail activities, while our senior management of the time bought that division from The Bay, and renamed the fur division North American Fur Auctions. On our website and business cards we have, “Since 1670”. The building that we operate in today was built by the Hudson's Bay Company in the early 1970s, and the senior management and many of our grading and administrative staff grew up cutting their teeth in the Hudson's Bay in London, New York, Montreal, and, of course, Toronto.

As we have done for 345 years, NAFA collects wild fur pelts from hunters and trappers throughout North America for sorting and promoting and ultimately selling of the furs via live auction to the world's fur and fashion community. The collecting of the furs is done by individuals who have collection routes that web throughout North American, much like the Hudson's Bay has been doing since 1670, although now we use trucks and planes at certain times rather than birchbark canoes.

The furs are given to us on consignment by these trappers that web across North America and we collect them, we keep their ownership on it, and we sort them for the world fur trade to utilize. The sorting of the furs requires a unique skill that is done by long-term grading teams in Toronto, Winnipeg, and our American office in Stoughton, Wisconsin. Their goal is to sort the furs in a way that furriers can actually use them, so we're looking at obviously lotting common species together and then at certain things like quality of the fur, how well it's primed up for winter. So when trappers are trapping in late fall and wintertime, it is that prime time of fur. We would certainly like to see that, rather than trappers who would have to trap in the spring or summertime when the fur is weak and has virtually no value. Also, it's things like the colour, the texture of the fur. In different parts of North America where the animals live, their hair takes on very different characteristics, and this is what the buyers are looking for.

Today NAFA employs some 650 people around the world, with 250 to 300 being in Canada on a full-time or a full/part-time, seasonal basis. We hold three to four auctions per year that attract 350 to 700 buyers from around the world, along with supporting trade members in the trapping, fur farming, and service sectors.

Our auctions typically have five to seven days of an inspection period, where the buyers come and physically inspect the auction lots of fur, and then six to seven days of full selling at live auction. We fill Toronto airport hotels and restaurants for six to eight weeks per year, driving an significant economic spinoff to that local economy.

NAFA is by far the largest seller of wild fur in the world, with approximately 65% to 70% market share of North American furs. NAFA's wild fur collection comes from all corners of Canada and the United States, with all of the fur bearers harvested legally within the regulations set out by provincial and territorial governments.

It can be said that there are trappers in every federal riding in Canada, including populated urban centres where human-wildlife conflict is increasingly an issue that requires professional trappers.

Approximately 50% of Canadian trappers are aboriginals, for whom fur continues to play a more important role in family income, as the value of the meat often exceeds the value of the pelts they're selling.

The auction buyers compete for NAFA's world-renowned collection of furs, and these are professional auction brokers that just travel the world—today there is an auction finishing up in Copenhagen after seven days. They are professional buyers who understand the quality and value of fur, and travel around to the four to five world auctions that exist. These buyers are from England, Canada, United States, Germany, Italy, France, Spain, Greece, Russia, Turkey, Denmark, Japan, Korea, and there are a significant number today from China and Hong Kong, with China and Hong Kong buying approximately 70% of the furs and then using them either domestically or for export as garments.

NAFA's role is not only to sort the fur but to also promote it around the world, so we are identifying who these companies are that are working with our fur and are actively promoting to them.

In every way the fur is sold as a commodity. It will change depending on the levels of the market today, driving the demand and supply. The prices will fluctuate, and they have for hundreds of years.

We know the following from looking back at our sales figures over the past five years—and these are just NAFA numbers, as there are other wild fur distribution centres in Canada as well, though we carry about 70% to 75% of Canadian furs. But in 2010, there were just under 800,000 wild fur pelts sold, at a value of $13,500,000. In 2011, 700,000 were sold at over $15 million. In 2012 just under 900,000 pelts were sold at $25 million. In 2013 there were 850,000 pelts sold at $39 million; in 2014, 863,000 at $22 million; and so far this year in 2015, we've sold 485,000 pelts at approximately $11 million. Clearly, there are substantial fluctuations that impact the value of the furs and the money that goes directly into the pockets of trappers across Canada.

In addition to those figures, we sell approximately 10 million ranch mink skins from Canada, the United States, and Europe, which makes us the second-largest fur auction house in the world.

I'd just like to touch on a couple of factors that really do impact demand and supply now. In terms of demand, it's affected in many ways. The price difference between 2013, at $39 million, and 2014, at $22 million for a very similar quantity of pelts is absolutely, one hundred per cent related to the conflict in Russia and the Ukraine. Russia has been a significant buyer of Canadian furs, and world furs for that matter, for many years, as it's a big fur user, and that conflict has stopped the movement of their people. It has impacted the ruble price—and, obviously, the oil price as well is having an impact on that economy. It's having a significant impact not only on their buying directly from us, but also on their buying through other countries and producers that would produce garments and sell wholesale into Russia. Those would be Greece, Turkey, China and, of course, Canada. Today the purchases from Russia are minimal.

And we've seen this impact in the past. We've seen Asian economic crises that have significant and immediate impacts on the price of the furs and the quantity that would be sold in a given year. Right now we're selling virtually 100% of our mink collection, but not enough of our wild fur collection.

Looking at things like supply and demand, fashion is driving demand. If a company like Canada Goose starts to put coyote trim on its coats it has a significant beneficial effect on the value of coyote and also drives fashion trends around the world.

Looking at supply, more commonly looked at as production, there are biological factors like weather and reproductive rates that will impact it. But also the price will impact the supply that's being sold on the market, as when the prices are strong the trappers will make a greater more effort to trap and provide more fur.

With that I'd like to thank you for your time. I think this review of what the fur trade is about today is extremely important, and I certainly look forward to any questions you may have.

Thank you very much.

Transcript

Discussions (0)