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37th PARLIAMENT, 2nd SESSION

Standing Committee on Fisheries and Oceans

EVIDENCE

CONTENTS

Tuesday, December 10, 2002

0930

The Chair (Mr. Tom Wappel (Scarborough Southwest, Lib.))

The Hon. Gerry Reid (Minister of Fisheries and Aquaculture, Government of Newfoundland and Labrador)

0935

The Chair

The Hon. Gerry Reid

0940

The Chair

Mr. John Cummins (Delta—South Richmond, Canadian Alliance)

The Hon. Gerry Reid

0945

The Chair

Mr. John Cummins

The Hon. Gerry Reid

The Chair

Mr. John Cummins

The Hon. Gerry Reid

0950

Mr. John Cummins

The Hon. Gerry Reid

The Chair

Mr. John Cummins

The Chair

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.)

The Hon. Gerry Reid

Mr. Rodger Cuzner

The Hon. Gerry Reid

Mr. Rodger Cuzner

0955

The Hon. Gerry Reid

The Chair

The Hon. Gerry Reid

The Chair

The Hon. Gerry Reid

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP)

The Hon. Gerry Reid

Mr. Peter Stoffer

The Hon. Gerry Reid

Mr. Peter Stoffer

The Hon. Gerry Reid

Mr. Peter Stoffer

The Hon. Gerry Reid

1000

Mr. Peter Stoffer

The Hon. Gerry Reid

Mr. Peter Stoffer

The Hon. Gerry Reid

1005

The Chair

Mr. Andy Burton (Skeena, Canadian Alliance)

The Hon. Gerry Reid

The Chair

Mr. Andy Burton

The Hon. Gerry Reid

Mr. Andy Burton

The Hon. Gerry Reid

1010

The Chair

Mr. R. John Efford (Bonavista—Trinity—Conception, Lib.)

The Hon. Gerry Reid

Mr. R. John Efford

The Hon. Gerry Reid

Mr. R. John Efford

The Hon. Gerry Reid

1015

Mr. R. John Efford

The Hon. Gerry Reid

1020

The Chair

Mr. Loyola Hearn (St. John's West, PC)

The Hon. Gerry Reid

Mr. Loyola Hearn

The Hon. Gerry Reid

1025

The Chair

Mr. John Cummins

The Hon. Gerry Reid

The Chair

1030

Mr. Peter Stoffer

The Chair

The Hon. Gerry Reid

The Chair

The Hon. Gerry Reid

The Chair

The Hon. Gerry Reid

The Chair

Mr. Earle McCurdy (President, Fish, Food and Allied Workers Union)

1035

1040

The Chair

Mr. Earle McCurdy

The Chair

Mr. R. John Efford

The Chair

Mr. John Cummins

Mr. Earle McCurdy

Mr. John Cummins

Mr. Earle McCurdy

The Chair

Mr. Jean-Yves Roy (Matapédia—Matane, BQ)

1045

Mr. Earle McCurdy

Mr. Jean-Yves Roy

Mr. Earle McCurdy

The Chair

Mr. Rodger Cuzner

Mr. Bill Matthews (Burin—St. George's, Lib.)

The Chair

Mr. Rodger Cuzner

The Chair

Mr. Rodger Cuzner

Mr. Earle McCurdy

1050

The Chair

Mr. Rodger Cuzner

Mr. Earle McCurdy

The Chair

Mr. Peter Stoffer

Mr. Earle McCurdy

Mr. Peter Stoffer

Mr. Earle McCurdy

Mr. Peter Stoffer

Mr. Earle McCurdy

1055

Mr. Peter Stoffer

Mr. Earle McCurdy

Mr. Peter Stoffer

Mr. Earle McCurdy

Mr. Peter Stoffer

Mr. Earle McCurdy

The Chair

Mr. R. John Efford

Mr. Earle McCurdy

The Chair

Mr. R. John Efford

1100

Mr. Earle McCurdy

The Chair

Mr. Georges Farrah (Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, Lib.)

Mr. Earle McCurdy

Mr. Georges Farrah

Mr. Earle McCurdy

The Chair

Mr. Georges Farrah

1105

Mr. Earle McCurdy

The Chair

Mr. Earle McCurdy

The Chair

Mr. Earle McCurdy

1110

1115

The Chair

Mr. John Cummins

Mr. Earle McCurdy

1120

Mr. Sandy Siegel (Executive Secretary, Maritime Fishermen's Union)

The Chair

Mr. John Cummins

Mr. Sandy Siegel

Mr. John Cummins

Mr. Earle McCurdy

Mr. John Cummins

Mr. Sandy Siegel

The Chair

Mr. John Cummins

The Chair

Mr. Jean-Yves Roy

1125

Mr. François Poulin (Advisor, "Alliance des pêcheurs professionnels du Québec")

Mr. Jean-Yves Roy

Mr. François Poulin

The Chair

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.)

1130

The Chair

1135

Mr. Jean Saint-Cyr

The Chair

Mr. Peter Stoffer

The Chair

Mr. Earle McCurdy

The Chair

Mr. R. John Efford

1140

Mr. Loyola Hearn

Mr. R. John Efford

Mr. Earle McCurdy

The Chair

Mr. Loyola Hearn

The Chair

Mr. Loyola Hearn

Mr. Earle McCurdy

The Chair

Mr. Rodger Cuzner

Mr. Leonard Leblanc (President, Gulf Nova Scotia Fleet Planning Board)

1145

The Chair

Mr. Leonard Leblanc

The Chair

Mr. John Cummins

The Chair

Mr. Earle McCurdy

The Chair

Mr. Earle McCurdy

The Chair

CANADA

Standing Committee on Fisheries and Oceans

NUMBER 008

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, December 10, 2002

[Recorded by Electronic Apparatus]

¿ (0930)

[English]

The Chair (Mr. Tom Wappel (Scarborough Southwest, Lib.)): Good morning, colleagues. I'd like to get started because we have a very full agenda this morning.

Pursuant to Standing Order 108(2) and its motion of November 7, 2002, the committee is resuming its study of the government's response to its tenth report in the last session, concerning the implications of extending Canada's exclusive economic zone to include the nose and tail of the Grand Banks and the Flemish Cap.

Our witnesses today are, on video conference, the Honourable Gerry Reid, Minister of Fisheries and Aquaculture for the Province of Newfoundland and Labrador, and Mr. Earle McCurdy, president of the Fish, Food and Allied Workers Union, who is here with us in person. Committee members will remember that we heard from both of these gentlemen when we were in Newfoundland during our preparatory work for the report we did in fact issue in June.

Welcome, gentlemen. Welcome, Minister. Thank you very much for giving us a few minutes of your time.

The committee requested that we hear from you this morning because as part of our continuation of our study following upon the government's response to our tenth report we asked departmental officials, specifically Mr. Pat Chamut, to come in and give us a briefing on what he saw as happening at the most recent NAFO meeting in Spain in September. Since we know that both gentlemen were there, we wanted to get an opportunity to hear from you your version of events, what you saw, what you didn't see, and what concerns, if any, you have with respect to the process and with respect to NAFO.

With that little bit of background, what we'd like to do, Minister Reid, is just have you make some opening remarks and then take some questions. We're going to go with you first because we know you have other things to do. Once the committee members have finished, then we can turn to Mr. McCurdy, who's here.

Welcome, and if you're ready, please give us your opening remarks.

The Hon. Gerry Reid (Minister of Fisheries and Aquaculture, Government of Newfoundland and Labrador): I appreciate the opportunity to do this by video conference this morning. We have a fisheries bill in the legislature I have to speak to this afternoon, so I apologize that I couldn't be there in person.

First of all, let me begin by saying that I was very pleased with the report your committee presented to Mr. Thibeault. It was very gratifying to see a group of individuals from across the country who understood and supported the position of Newfoundland and Labrador with regard to foreign overfishing and to custodial management.

We think that we've developed a rational approach to custodial management, and we've garnered a great deal of support, not only here in the province but across Canada, as well as with a number of individuals and groups from outside our country we've met with in the past six or seven months. Earlier in the spring I had the opportunity to address 23 German parliamentarians, and we put forward our proposal for custodial management and explained to them what was happening outside our 200-mile limit. They were very sympathetic and thought that the proposal on custodial management was a good one.

I was somewhat disappointed in the swiftness with which the minister reacted to the report. In a matter of hours or days of his having received a report from your standing committee, the idea of custodial management was rejected. Later in the fall, just prior to the NAFO meeting, the words were raised again by the federal minister, and we were given some comfort that it might be on the table again. But then just recently he gave his official report, where he said that custodial management wasn't in the cards for Newfoundland and Labrador and that Canada for the most part wouldn't be pursuing that.

The words “custodial management” were mentioned at the NAFO meeting we had in Spain in September, which gave us some comfort, even though they were just briefly mentioned and mentioned in light of the fact that your committee had recommended it to the federal minister. But any comfort we got from those words were dashed a couple of weeks ago when the minister gave his official response to your report.

That's about all I have to say right now. If you have some questions for me or if you want me to go into something in more detail, I would be more than happy to do so.

¿ (0935)

The Chair: What we were really looking for would be your reflections on your observations when you were an observer at the NAFO meetings. If you could, maybe just give us five minutes on what your perception was of how those meetings went, how Canada was viewed when we made our recommendations or took our positions, and what the other countries said or did--that kind of thing.

The Hon. Gerry Reid: First of all, I'd like to say it was a great opportunity for me to witness NAFO meetings first-hand; it was the first one I had attended. We had some difficulty getting there originally. I don't think that the federal Department of Fisheries and Oceans and DFAIT wanted us to attend because they thought that maybe I would create some kind of international incident, but we certainly guaranteed them that we weren't of that sort and we ended up going to the meeting.

First, I'd like to commend Pat Chamut and his delegation, because they did yeoman service for us and the country at the meetings. But the outcome of the meeting, to put it bluntly, was somewhat less than desirable. I'm more convinced than ever that NAFO as it's currently structured cannot work for us.

When you walk into a room and there are a couple of hundred people sitting around that room representing some seventeen different contracting parties, you begin to wonder. All these people are in this room to try to divvy up the little bit of fish that exist outside the 200-mile limit off our coast there, and it becomes rather frightening. Sometimes you're left to wonder about the cost of all those people going to those meetings and participating in NAFO. Is it worth the amount of fish and the profits they're making from the amount of fish they're catching out there? It was certainly an eye-opener for me, coming from a small community here in the province, to see so many people interested in that little bit of fish that exist beyond our 200-mile limit.

I had an opportunity while I was there to have a few discussions with some of the other member countries. The most interesting one was with the chair of the EU fisheries committee. I guess they're your counterpart in the EU. Prior to him going to the meeting in Spain, Allister O'Reilly of the Fisheries Association of Newfoundland and Labrador, along with Bruce Wareham, a processor in this province, went to Brussels, I believe it was, and gave a presentation to the EU fisheries committee on what infractions were occurring outside our 200-mile limit.

At that time the head of the delegation to NAFO, Mr. Spencer, told Mr. O'Reilly as well as the chair of the EU fisheries committee, Mr. Stevenson, that what Allister and Bruce Wareham were saying was completely incorrect and that in fact the EU wasn't breaking any of the rules outside the 200-mile limit and that they weren't committing the infractions they presented to him.

As a result of the meeting they had in Brussels, the chair of the EU fisheries committee decided that he was going to go to the NAFO meetings in Spain and see first-hand what happened there. I was happy that he did so because when Pat Chamut gave the presentation--and it was a good one--on the infractions these contracting parties were committing outside the 200-mile limit, the other countries seemed to be somewhat embarrassed. You could tell that by looking around the table.

When I spoke to Mr. Stevenson afterwards, he told me he was completely astounded by what he had heard in the meeting because he had always been told--he being the chair of the fisheries committee, Mr. Wappel, like yourself--by the delegation that goes to NAFO on behalf of the EU that all of this was lies and that they were in fact living by the rule book out there. He told me afterwards that he felt betrayed for the most part and that he had been lied to. He had always been given the impression that the EU was squeaky clean in all this foreign overfishing that's going on outside our 200-mile limit.

In fact, he was here last spring. We met at a reception and I told him about this, and he told me that when he went back after we were in Spain, he wrote up a report about the hostility he sensed in Canada or in Newfoundland towards the EU. He couldn't understand this because he had always been led to believe that they were doing the right thing outside the 200. When he saw the presentation by Pat Chamut, he could understand our frustration and why we felt this hostility.

¿ (0940)

The whole process has never worked. That was confirmed for me when I attended the meeting in Santiago. We talk about the great strides we made coming out of it, but the only thing I see we gained was that we kept the 100% observer coverage. For a period of time during those meetings, which lasted for four or five days, I was almost convinced we were going to lose that. At the end of the day, we only kept it because we went along with the turbot quota being reduced to 42,000 tonnes rather than the 36,000 tonnes the NAFO Scientific Council was advising the members to do.

My fear is that next year that will gone, because a couple of proposals were being discussed on what they should do with that observer program. So I think we again traded fish this year, to try to hold on to something we had in NAFO. I think we've been doing that since its inception back in 1979.

The Chair: Thank you very much, Minister.

We'll go to questions now, starting with Mr. Cummins.

Mr. John Cummins (Delta—South Richmond, Canadian Alliance): Thank you very much, Mr. Chairman.

Thank you, Minister, for appearing this morning.

Every organization has an objective, and just in general terms, what is your impression of the objective of the collective at these NAFO meetings? Is it strictly to divvy up the spoils, or is there some overriding concern about the resource?

The Hon. Gerry Reid: I didn't get any indication that they had any concern about the state of the resource out there. It was strictly to sit around the table, in my estimation, and divvy up the spoils.

The United States was always our ally at NAFO in previous years, but this year even the U.S. was asking for fish, because they had none out there. Their complaint at the NAFO meeting was “Listen, we pay our dues, we are a member of NAFO, yet we don't have fish. You're all into looking for fish, so where's our share?” That was rather frightening, when you consider that the U.S. has always been on our side.

On the state of the resource, I don't think they give a damn what happens to it. That was quite evident when they set the TAC for turbot at 42,000 tonnes, even though their own scientific advice told them it should have been reduced to 36,000 tonnes. They did the same thing last year. In fact, it's even worse this year because the spread between what the scientific advice said last year, what it said this year, and the actual quota has widened. This year they're going to catch in the area of 6,000 metric tonnes more than what the scientists say, whereas last year they only did 4,000.

¿ (0945)

The Chair: Mr. Cummins.

Mr. John Cummins: If there is no concern about the state of the resource now, it leads me to question Canada's contribution to the meeting. You suggested that Pat Chamut made a good presentation on behalf of Canada. I presume that in his presentation he was emphatic that there was a concern in Canada about the state of the resource.

You suggested that after Mr. Chamut's presentation there was a commitment to at least keep observer coverage going for another year. But that in itself isn't enough, as you've already suggested. They're exceeding scientists' suggested levels of fishing for turbot, and so on.

Although Mr. Chamut may have made a reasonable presentation, the effect we want is not really there--an overriding concern for the state of the resource, and the fact that there is resolve in this country to protect that resource. Essentially the committee's report intended to show that we were prepared to back up our concern for the resource.

Could you comment on that?

The Hon. Gerry Reid: As I said, Pat Chamut put the facts on the table with a slide presentation. He gave evidence of misreporting of catches; directing on moratorium species; use of illegal troll liners, which was shown right on the slide; exceeding quotas; and failing to submit observer reports. All of those infractions were outlined graphically at the meeting, but there was very little discussion about them.

The only comment came from the EU. They hammered us with the fact that we were fishing in 2J3KL for stock that was supposed to be on the moratorium. That's what they came back to us with. The fact that we kept the observer coverage is certainly of no great comfort to us here, because even with observers on these vessels, we still have all these infractions.

Sometimes we give away turbot or other species of fish to keep certain things in NAFO, but I'm not so sure they're worth keeping. In fact, if Canada were serious, they would talk to NAFO and say we were going to put our own observers aboard these vessels and pay for it. That's one thing that would be beneficial to Canada, and indeed to Newfoundland and Labrador.

The Chair: Mr. Cummins.

Mr. John Cummins: I guess you're telling me we took the opportunity, Mr. Chamut made a good presentation explaining Canada's concerns, but a strong position from Canada is lacking at this point. Given that NAFO doesn't have a concern about the state of the stocks, Canada should be prepared to take consortium management, to ensure the survival of the stocks.

It's one thing to say we made a good presentation, but what did we get out of it? It seems to me we really didn't get a whole lot. Canada should have said “If you guys aren't prepared to shape up, then we're prepared to take control”. Isn't that really what should have come out of the meeting?

The Hon. Gerry Reid: That's certainly what we would have preferred to see, but I didn't have that expectation when we went there, and certainly didn't come away with it.

You asked me if they had concern for the state of the resource, and as I said, absolutely not. We're only one of 17 members who sit around that table. The EU is the largest member, and then you have countries like Lithuania, Latvia, and Estonia. They sit around the table, and whatever the commissioner from the EU says, as soon as he's finished speaking up goes the hand of one of those four countries' representatives, supporting him 100%.

It's my understanding they do that because they want membership in the EU. So whatever way they can sock themselves in with the EU, they're going to do it. It's rather disheartening. We're standing there alone. We were there alone at that table in February with 16 other contracting members in NAFO. It seemed to me that nobody was worried about the state of that resource. On the contrary, they paid very little lip service to it....

You can ask Mr. Chamut yourself. And I'm sure Mr. McCurdy, who has attended these meetings for quite some time, would have similar views. It's just very frustrating that we talk about continuing to work in NAFO, when every year it seems we come away from NAFO having lost something, or at the most having kept the status quo.

The Chair: Mr. Cummins.

¿ (0950)

Mr. John Cummins: Essentially, you haven't given me any reason for the committee to back away from the suggestion it made that the best route for Canada and for the fish stock is custodial management. Nothing you've said takes away from that position.

The Hon. Gerry Reid: Exactly. What I saw at NAFO just reinforced in my mind the need to do something else outside of NAFO. Our proposal has always been custodial management, so I agree with you 100%.

The Chair: Mr. Cummins, you have two minutes left, but that was a great ending, if you want to stop there.

Mr. John Cummins: I think the point has been made.

The Chair: Mr. Cuzner.

Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): Minister, again thanks for being with us today.

So the feeling you got from the meeting was that whatever position we tried to advance on conservation and the overall health of the stock was compromised by Canadian activity in 2J3KL.

The Hon. Gerry Reid: Well, no, I don't think it was actually compromised. I think the fact we have an index and a sentinel fishery in 2J3KL.... This year the total allowable catch was only 5,600 tonnes. I think back in 1988 the total allowable catch for that stock in Canadian waters was 266,000 tonnes. So we have an index and a sentinel fishery of 5,600 tonnes. I think they only use this as an excuse to hammer us over the head when we're talking conservation. I think this is the only reason they raise it.

As Earle said, at the point when we were at the meeting, the amount of fish we had caught in the past ten years in that index fishery wouldn't have been equivalent to what they had overfished in the year prior to the moratorium.

Mr. Rodger Cuzner: Okay.

The other question was with regard to custodial management. At the meetings, I assume it was Mr. Chamut who had made it known that the standing committee's recommendation was to proceed with custodial management. Just how was this received at the meetings?

The Hon. Gerry Reid: Just as if he didn't say it. It was mentioned, and there was no reaction whatsoever that I' m aware of. I was sitting just behind him. I didn't see any reaction. There was no reaction whatsoever. It seems like they hear what they want to. But they certainly turn a deaf ear when they don't want to hear something. There wasn't any reaction.

Mr. Rodger Cuzner: Okay, I have just two quick ones.

I liked your comments about Canada looking after the observer program. I think it is one that has been talked about around this table as well.

Just to depart from this, what is the official ministerial position of your department on the seal population off the coast?

¿ (0955)

The Hon. Gerry Reid: The position of the department?

The Chair: I presume you're going to be relevant.

The Hon. Gerry Reid: My view on this would be the same as one of your colleagues who's sitting around the table here, Mr. John Efford.

Let's face it, ladies and gentlemen, we have a declining fish resource out there and an exploding seal population. Something has to be done about it. You're talking about, or the federal minister is talking about, closure of two fish stocks, one on the northeast coast and one in the Gulf of St. Lawrence. In my estimation, all we're going to do here is just provide extra feed for the seals for a few more years if we do this.

The fact of the matter is we have six million or seven million seals. Nobody knows for sure how many are out there. We know they are somewhere in that range. Last year we had a successful seal hunt. We took in the area of 300,000. We could have taken a lot more. We certainly had the market for it last year, and the prices probably were the best in the history of the province.

I was listening to the fisheries broadcast, which has been on here for 50 years and deals with fisheries-related issues. Just yesterday they talked to a fisherman on the south coast of our province. Growing up there, he had seen probably one or two seals. Now he said there's a herd of them down there on the south coast of our province—in an area where seals were never seen before. So the population is exploding, and they're going for food. They will hunt down the last fish, if it comes to that.

When I first went to work with the Department of Fisheries in 1989, I went to a sealers association meeting in my own district of Twillingate. At that meeting, a DFO scientist stood on the stage and told a group of sealers, who obviously didn't want to hear it, there was no scientific evidence to suggest that seals ate cod. That was in 1989. Now they've changed on that, and say yes, we have some evidence to suggest that seals eat cod. But the latest word I heard from the scientists was that we have no evidence to suggest that seals are hindering the rebuilding of the cod stock. It's easy to say you have no evidence to suggest they're preventing the cod stocks from recovering, but they have no evidence to suggest this is a reason for it as well. In other words, they have no evidence. So to make statements like that is somewhat misleading. But we obviously need something done with the seal problem we have off our coast.

The Chair: Thank you.

Minister, just before I go to Mr. Stoffer, I have two points to make. Just so you know, I've been to Twillingate with my family, and we were treated very well there and actually saw some whales. It's a very nice little community with a nice little restaurant overlooking the bay. It was good food, too.

Having said that, I just want to follow up on Mr. Cuzner's question. When you said it was mentioned and then ignored, can we presume that at no time was any copy of our report distributed to anybody, as far as you know?

The Hon. Gerry Reid: Not that I know.

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Thank you, Minister, for appearing with your officials today.

Sir, have you personally spoken to Mr. Pat Chamut about custodial management? If you have, are you able to tell us the details of that conversation? Basically what I'm looking for is whether Pat Chamut, one of the senior people in DFO, is supportive of your efforts for custodial management.

The Hon. Gerry Reid: I guess I've talked to Pat in passing. We shared a plane together on the way back from Spain.

But, no, I haven't sat down and officially talked to Pat Chamut about our custodial management.

Mr. Peter Stoffer: May I ask why not, sir?

The Hon. Gerry Reid: Well, I have talked to the federal minister about it.

Mr. Peter Stoffer: I think Mr. Chamut has been in the DFO for close to 30 years, sir. He's a very well known and very well respected person nationally and internationally. I'm wondering why you haven't had the opportunity to sit down and formally speak to him on this very important topic.

The Hon. Gerry Reid: I've made representation to the federal minister, when I think Pat was in the room at the time. We certainly had lengthy discussions. But I guess you can blame me for not calling up Pat Chamut and saying that I want to meet with him personally to discuss custodial management.

Until you mentioned it, I wouldn't have thought it would have been appropriate for me to go and sit with an official. I would have thought it would be more appropriate for me to discuss the issue with his minister.

Mr. Peter Stoffer: Sir, have you ever seen an international observer report from NAFO?

The Hon. Gerry Reid: No, I haven't actually seen one myself.

À (1000)

Mr. Peter Stoffer: We had one a couple of years ago, when Mr. Baker was our chair. It was completely edited, whitened out, and blacked out. There was very little information in it to help us ascertain what, if any, infractions had taken place.

We talked about our obtaining observer status on board the foreign vessels. But the reality is that it's very difficult for us, as an impartial committee, to get a copy of an unedited report or several reports—or, I assume, for yourself as well.

The purpose of the question is.... We talk up that we have retained our observer status, which is good for Canada, but the reality is, who is really seeing the observer reports?

The Hon. Gerry Reid: That's a good question. I guess DFO has had copies of these. But it's my understanding that not all of these vessels are reporting. If they are, sometimes it takes as long as two years for DFO here in Canada to get copies of these reports.

But, as you said, you haven't seen them, except for the one George Baker showed you. I haven't seen any.

Mr. Peter Stoffer: Minister, because this is being televised and widely broadcast throughout the universe, I'd like to give you the opportunity to tell people in Newfoundland and Labrador and the rest of Canada what exactly custodial management means in your mind.

The Hon. Gerry Reid: We've been a member of NAFO since its inception. Obviously NAFO doesn't work for the best interests of this province and indeed the country of Canada. I've said it repeatedly, and the individuals who occupied my chair before me have said it: NAFO doesn't work. We've been talking and dealing with the federal government about what to do about this for the last twenty-odd years. What we're talking about is basically improving the coastal states' rights and duties to act to protect the fish stocks, not only for ourselves but for the people who have historically fished stocks that are adjacent to our coast.

I think there is some confusion in Ottawa, and maybe even with the minister, over what we consider to be custodial management and what they consider to be extended jurisdiction, because when I talk about custodial management, often the response comes back that we can't extend jurisdiction.

I look at extended jurisdiction as taking the nose and tail of the Grand Banks and the Flemish Cap into the jurisdiction of Canada, which would mean that we would own it, like we own out to the 200-mile limit, and that we would use it for our benefit and our benefit only.

What we mean by custodial management is that we would take custody of the three areas outside the 200-mile limit, and we would allow other countries that have an historical presence in that area to continue to fish, but they fish by rules and regulations that we would establish, even in conjunction with the NAFO Scientific Council, if need be.

At the end of the day, we need to ensure that we have a conservation-minded and scientifically based management regime, because none of it exists out there right now. I'm still firmly convinced, in my mind, that any rational individual, whether he be on this side of the Atlantic or the other side, when presented with the facts and the observer reports, and the presentation that Pat Chamut gave to NAFO about what's happening to a resource that could feed a large number of people in this world, when one sees what's happening to that, I think one would agree with what we're proposing.

We're proposing to get out there and base the total allowable catches on science and allow those who have historically fished to continue to do so. I think the impression that even our own government is giving to the rest of the NAFO members is that what we're proposing would be a grab for Canada and that we would exclude these people in some way. The answer out of Ottawa keeps coming back that none of these countries would agree. They would view this as an extension of jurisdiction, and they are very skeptical that we are trying to make the big grab for ourselves.

We've never said that. Spain and Portugal have been fishing off our coast for some 200 or 300 years. I met with my counterpart in Spain, the fisheries minister from the northwestern region, and I told him that. I said “Look, we're not intending to drive you off the Grand Banks of Canada, and we would respect your historical share, but we're not going to permit you to overfish.” He seemed to be in agreement with that.

He was supposed to be here this week, but because of that tanker problem that they have right off his coast, he hasn't been able to come. But he's expected to come early in the new year. He was somewhat pleased to hear that we certainly didn't have this hate over here for the Spanish people, an idea that seems to be prevalent in some areas of Spain. But he was also pleased to hear that we weren't, even under custodial management, willing to throw the Spanish and the Portuguese off the Grand Banks.

All we're saying is look, fellows, there's a stock of fish out there that can be used for many generations to come, if we look after that stock and put a sensible management system in place that we don't have today, and we'll allow you to share in that resource if you'll follow our lead.

À (1005)

The Chair: Thank you, Minister.

Mr. Stoffer, you're out of time now for round one.

Mr. Burton.

Mr. Andy Burton (Skeena, Canadian Alliance): Thank you, Mr. Chairman, and thank you, Minister, for appearing today.

In our fisheries minister's reply to the committee's report that was tabled some time ago, he said:

“Despite the inadequacies of NAFO, it is far better to have an internationally agreed regime than no regime at all. The practical challenge is to find ways to make NAFO work more effectively.”

In your opinion, is that possible, and if so, how?

The Hon. Gerry Reid: In my opinion, no, it's not possible. How long have they been there--23, 25 years? They haven't made it work yet. There's no evidence in the last meeting to suggest that they've repented and that they're going to be good little boys and girls. There's no evidence to suggest that they have any conservation measures in mind, so I can't see NAFO working for our benefit, or anybody's benefit.

Do we pull out of that before we have the system in place? That's a good question. Obviously, if we pull out before we tell them what we're going to do, as the minister said, you're going to have unrestricted fishing. And that's a possibility. If we're going to pull out of NAFO, then we'd better be in a position to act, and act quickly.

The Chair: Thank you.

Mr. Burton.

Mr. Andy Burton: I guess what we're hearing is that there really isn't a solution in terms of fixing NAFO. If we can't fix it, and the government appears to be somewhat reluctant to proceed with custodial management, the challenge is, what do we do?

One of the things that has happened is that some of the ports have been closed to foreign vessels. Is that helping at all? Is that an interim solution of some sort? What else can we do in the interim?

The Hon. Gerry Reid: I supported the minister in the policy reports to the Faroese and the Estonians because we can't be giving them ports to land their product in while they rape our resource, give them ports to land their product and transship it home because they can make more money as a result of transshipping it out of our province rather than going home directly. I supported the minister, and I still do, in closing the ports. But will it have an effect? I guess only time will tell.

I know one effect it has had, and that is the employment in those areas where the offloading used to be done is down this year. You have John Efford with you here, and one of the towns in which he lived, or pretty close to it, is suffering as a result of the port being barred to the Faroese and the Estonians. It has had that effect. I hope the Faroese and the Estonians will see the light and play by the rules.

Mr. Andy Burton: What I'm hearing is that there are so many problems out there but we don't really seem to have a solution. Again, I want the minister to reiterate how strongly he feels that our report was the possible solution. I think that's the key to the whole thing. We made a report. This committee spent a lot of time on it and heard a lot of witnesses. It was a very, very good report. It was unanimous. I'd like to hear once again how you feel about that report and how strongly you feel we should push it.

The Hon. Gerry Reid: I think you made a great report, and I particularly liked your recommendations. I think you were spot-on. With regard to number four, that the Government of Canada conduct a targeted public information campaign, it's a great suggestion and I think it would work. But there's no real need for us to do it in Canada because you're preaching to the converted. I honestly believe that if we had a targeted public relations information campaign in the EU, we'd convince people that what we're saying is right, especially in Germany and Britain, where there are strong green parties and environmentalists.

Since you brought this report down and made your recommendations, we've talked to the WWF, the World Wildlife Fund people, and they're very sympathetic to what we're saying and doing.They realize there is a need to do something before all the fish stocks on our east coast are gone.

Yes, I agree with the recommendations you made in your report, and I commend each and every one of you for presenting those to the federal minister.

À (1010)

The Chair: Thank you.

Mr. Efford.

Mr. R. John Efford (Bonavista—Trinity—Conception, Lib.): Thank you, Mr. Chair.

Minister, I'll start with my last question first because you brought up the matter of the closure of the ports in my own area and the impact that has had on the people. It is an issue, but the greater issue here and the question I want to put to you is whether there is any evidence you're aware of that since the closure of the ports to the Faroese and the Estonians there has been any less fishing effort outside the 200-mile limit.

The Hon. Gerry Reid: I don't know, John, the answer to that. No, I have no evidence, though I've had some discussions with some of the DFO officials. They tell me that Estonia seems to want to play by the rules, but they're not getting any feedback from the Faeroese to the effect that they're willing to play by the rules, and that's the reason they haven't discussed the possibility of allowing them to re-enter our ports.

Last summer I was under the impression that we were going to open the doors to the Faeroese and allow them to go back into Bay Roberts and that they were going to behave themselves. But that seems to be off the table again now, and apparently there's no move by the Faeroese to look at the problem we have with them.

Mr. R. John Efford: Let's go back to the observer coverage today on foreign vessels outside the 200-mile limit. Are you aware, do you have any evidence, did you hear anything when you were at the NAFO meetings, or have you heard anything since then that some of them actually participate as crew members, one as an engineer on the boat, and that they are not really doing the job? Well, that goes without saying if it's supposed to be observer coverage. Have you heard any evidence, any discussions, or any talks around that issue?

The Hon. Gerry Reid: I've heard that. Nobody has really presented it to me with hard, concrete evidence, but I've certainly heard it. I've also heard that these observers act the same as crew members, in that they get a percentage of what is caught, just as owners of vessels in our province give crew members a percentage of the total catch. They give them a percentage of what they've made on a particular trip, and it is my understanding that some of the observers are paid that way. It's certainly to the observer's benefit to see as much fish come aboard that vessel as possible.

Mr. R. John Efford: You mentioned that you talked to some German parliamentarians and to some people from Spain, I believe; you said the minister, and there were probably other parliamentarians from other countries. If I understood you correctly, you feel confident there is a genuine concern. Or did you say there was a genuine concern, and if Canada was willing to take some steps, there'd be some sort of cooperation--if you count some groups over there--on conservation measures to be put in place outside the 200-mile limit?

The Hon. Gerry Reid: Certainly when I spoke to the German parliamentarians--we had, I think, 23 of them here in June or July--we did the foreign overfishing presentation to them and showed them what has been happening out there since NAFO's inception. We ran down through what has happened over the years, the collapse of the stocks in 1992 and the moratorium. We put our proposal on the table to them, custodial management, and they were shocked, first of all, to see what was actually happening and the fact that the EU was part of this. They were shocked, and we certainly got the impression from them that they would support custodial management.

With regard to the Spanish minister I spoke to, once he found out that we weren't hell-bent on driving him off our coast and that we would allow them their historical rights to fish, he seemed to soften and was quite congenial. In fact, after our first meeting he came by the next day and invited me out again to go visit some aquaculture sites. I spent two afternoons with him, and he is very interested in coming over here, because the message he's getting back home is that we're determined to drive the Spanish off the coast of Canada.

À (1015)

Mr. R. John Efford: Minister, all of us who live in Newfoundland and Labrador are aware of the fish of the day. I'd like your comments on the only thing left that's keeping the fishery going today, the shellfish stocks, on which some of the fishermen, plant workers, and cultural communities depend for their living ten years after the moratorium. Would you comment on what you would see happening to the communities of Newfoundland and Labrador if some immediate action.... Because we don't have another 25 years; in fact, I don't think we have another 25 months on the groundfish stocks without making some major decisions. If the crab stocks failed--in some areas they've already started to get depleted--given that there's not been anything done to put any conservation measures in place for the migratory stocks outside the 200-mile limit, how would you see the communities in Newfoundland, and what would happen to them?

The Hon. Gerry Reid: We wouldn't have any communities left in rural Newfoundland. They would be absolutely wiped out overnight. You know that as well as I do, and I'm sure that every other member from our province who is sitting around the table knows it.

We closed the groundfish fishery in 1992, and from 1992 until last year Twillingate in my own district processed absolutely nothing. Twillingate was built on the fishery. It used to employ 400 to 600 people in a plant that worked year-round up until the late 1980s, and from 1992 to 2001 there was no processing whatsoever in that town.

I've seen the result of that, what that means. Since 1992 we've lost somewhere in the area of 30,000 people out of our province, and that's a direct result of the closure of the fishery and the impact it's had. The numbers that were there prior to the moratorium in 1992 have not gone back in there.

That has a number of problems associated with it. When you talk about the Romanow report last week and you're talking about putting money into health care, normally when the federal government comes up with a plan to do something like that, they fund us on a per capita basis. The fact of the matter is, we've lost 30,000 to 40,000 people since the moratorium was called in 1992. As a result, if there are any transfers made to the province on a per capita basis, we're going to lose as a result of that out-migration.

So we're getting it both ways. The fact that the federal government mismanaged that stock.... Not only are we paying for it as a result of out-migration, people losing their province, we're also paying for it in terms of transfers to the province for health and social programs.

But John, if the crab stocks were to collapse today--and believe me, they're not looking very good.... I visited the coast of Labrador this summer, and it was frightening to talk to fishermen in that area. In fact, the latest information I have is that there are two million pounds of crab left in the water off the coast of Labrador, and believe me, that's not a result of people staying ashore. The reason the two million pounds was left in the water is that the fishermen couldn't find it to catch, and that frightens me. It doesn't just frighten me, it terrifies me, because without crab right now in our province we wouldn't have a fishery.

Crab makes up, for the most part, half the industry, $500 million of a billion-dollar industry. There's no doubt about it, the money that's made in crab certainly helps subsidize the shrimp fishery. If fishermen had to rely solely on shrimp, they wouldn't be out there.

À (1020)

The Chair: Thank you, Minister. Thank you, Mr. Efford.

Mr. Hearn.

Mr. Loyola Hearn (St. John's West, PC): Thank you very much, Mr. Chairman. Let me also thank the minister and his staff for being available. I apologize for my cold; I'm battling the flu and the flu is winning.

Gerry, your stand on custodial management is word for word exactly the same as our own, and I think I speak for all the committee on that one. That's the message we have to get out, that we're talking about managing resources, not only for our good but for the good of others who have participated in harvesting that resource for centuries, as you mentioned, particularly in relation to the Spanish and Portuguese.

In relation to that and following up on your own meeting with the Spanish and the feeling you got from them, don't you think that if this message were properly carried, we would get more cooperation in what we're trying to do? Wouldn't we get more cooperation if the publicity campaign we talked about were directed to those directly involved in NAFO so they understood what we're talking about, that somebody has to be responsible for managing this resource and enforcing those management measures, not only for our good but for the good of all who participate?

The Hon. Gerry Reid: I agree with you 100%, Loyola. I happen to believe that most people are rational in their thinking and when presented with the fact they will come to the same conclusion as you or I will.

When we met with the World Wildlife Fund they told us that the same problem exists off the coast of Africa with underdeveloped countries. The same countries that are overfishing off our coast are overfishing off the coasts of these third world countries, and they're raping the stock there. Yet nothing seems to be done about it.

The WWF is taking up the fight for these people because they're not able to fight for themselves. They don't have the finances and the wherewithal to do it. They showed us a video presentation of some of the ads they will be carrying with regard to the overfishing that's going on off the coast of this particular African country.

If we were to start a campaign to show the people in Europe the impacts of what's happened here in this province, and tell them about the impact it will have on them as well....

I was completely astounded at how much fish a country like Spain consumes. Everywhere you go, it's fish. Let's face it, fish is a way of life in Spain. It means something more than it does anywhere else I've ever visited. Every single store and restaurant, that's it, that's all you see. People eat fish, they look at fish, and they talk about fish. It's like it is here in our province.

I think we could convince even them that it's to their benefit to come onside with us to try to keep a sustainable resource of which they could partake in harvesting.

Mr. Loyola Hearn: There's no doubt about that.

It's funny that we have to rely on the international funds for animal welfare, the WWF, Greenpeace, and agencies like this, to sell our message. Usually these were the ones that were on our backs about the seal hunt, and that was another battle.

Shouldn't this be what our government should be doing? We shouldn't be sitting back waiting for outside agencies. We are a province of Canada. We have a major resource. We have a resource that could be protected for our good and for the good of the world, not to say the country. We're doing a piss-poor job of selling our image to the rest of the world and managing our resource. In fact, we have no control over managing that part of the resource outside the 200-mile limit. With a proper sales pitch and proper public relations I've always maintained that we can get a lot more cooperation in trying to preserve the resource.

Let me ask you another question. At the NAFO meetings, was there a lot of talk about the science, or perhaps I should say the lack of science in relation to what is really going on in the ocean? When we met with many of the ministers from these countries in Russia last yea, all of them raised the concern about the complete and utter lack of knowledge of what's happening in the ocean generally. If that is the case, that's another good reason why an approach like ours should be more acceptable to all of them.

The Hon. Gerry Reid: At the meetings I attended, one presentation was given on the science of what's happening out there, and it had more to do with the environmental problems that were occurring than anything else.

The Scientific Council of NAFO met the week prior to that. The Scientific Council of NAFO is probably doing its job, but their recommendations that go forward are completely rejected. Last year they asked for a 40,000 metric tonne quota for turbot, and they accepted 44,000. This year they said it should be 36,000, and they went to 42,000. So they disregard the scientific advice that's presented to them not only from their own scientific council, but also from Canada.

I'd like to go back to what you were saying, Loyola, about this advertising campaign, if you don't mind. Here we are, a province, as all of you sitting around the table know, that is not in great financial shape. Last spring we were very proud that we put $100,000 into the budget to fight foreign overfishing. You wonder what $100,000 can do in this fight internationally. It's absolutely insignificant. But we thought we were doing a good job on that. You attend a meeting in Halifax, and because you said you're going to bring up the idea of custodial management, a federal minister shows up at the head of the table, and you look at one of the boys who went there with you and you say, how many people does he have up there with him? The answer is a busload. Simply because I was going to raise the issue of custodial management at a provincial ministers meeting, a busload of bureaucrats travelled from Ottawa to Halifax to take me on. The money that was spent on that was probably the $100,000 we have in our budget to fight this campaign.

À (1025)

The Chair: Thank you, Minister.

Colleagues, we've done a full first round. In view of the minister's schedule and the fact that we still have to hear from Mr. McCurdy and we have another report to consider, does anyone have a truly urgent question that hasn't been asked yet of the minister?

Mr. Cummins.

Mr. John Cummins: I'd like to follow up on what Mr. Efford was saying about the observers. This committee heard testimony a number of years ago about the observers. The conditions on the foreign vessels are not great. The observers on the foreign vessels were not paid well. Our Canadian observers, who in those days operated on foreign vessels in Canadian waters, were not happy with their conditions.

To me the whole issue of these observers is a questionable one. I wonder about their impartiality. They should leave their nationality behind. They should be seen as being impartial. My belief is that the observers are only as good as the backup--in other words, as good as the oversight we can have on them with the Canadian presence on the water in the areas they're fishing. Otherwise, I hesitate to put much faith in their reports.

If the only thing we got out of this last NAFO meeting was the continuation of the observers, did we really get much?

The Chair: Minister.

The Hon. Gerry Reid: I don't think we got much at all.

Some of these countries are very poor. Bulgaria showed up at the meeting and asked if they could sit and vote at the meeting. The reason they asked that is because they hadn't paid their fees for the last ten years. They were wondering if they could do it on the easy instalment plan. Allow them back in and they would try to pay off their fees. Their total fees for ten years were $170,000, which means that their fee to be a member of NAFO is $17,000 a year. That country had to send an individual to a table in the international community and say they couldn't afford to pay $17,000 a year to be part of NAFO, but they'd like to be able to vote. Can you imagine the observer on a vessel in that country? They're more interested in getting something to eat than they are in conservation or the Scientific Council of NAFO.

The Chair: Thank you very much, Minister. We all appreciate your time, your candour, and your directness.

Mr. Stoffer, did you have a final question? This will be it, folks.

À (1030)

Mr. Peter Stoffer: I just wanted to say, I wish you and everybody in Newfoundland and Labrador a Merry Christmas. I notice that you—

The Chair: We do appreciate the sentiments, but let's move on.

Merry Christmas to you, sir, and thank you very much for giving us your time.

The Hon. Gerry Reid: Could I make one comment before leaving? It concerns the question that John asked about the crab stocks. It sort of relates to this.

It's my understanding that we only have two crab scientists from DFO in this province--just two crab sicientists. These scientists are supposed to know what's happening with a stock that means half a billion dollars to this province. It is my understanding, as well, that DFO is undergoing what is called a program review. We all know what a program review means.

The Chair: How many crab scientists do you think you should have on the island?

The Hon. Gerry Reid: Enough to tell us what the state of the stock is.

The Chair: Do you have any idea of what that would be?

The Hon. Gerry Reid: Far more than two.

Anyway, I thank you for the opportunity. Likewise, I wish you all a very Merry Christmas.

The Chair: Thank you, sir.

We'll hear from Mr. Earle McCurdy. He is the president of the Fish, Food and Allied Workers Union. You will remember, colleagues, we also heard from him when we were in Newfoundland on this issue.

You've sat here, Mr. McCurdy, and heard what the minister had to say. I understand you would like to bring to our attention something besides our main focus. That is fine. But our main focus, initially, is if you could give us your impressions of what you saw and heard at the latest NAFO meetings. You were an observer there. We are particularly interested in your comments, however brief or long you want to make them, about what you saw and heard, particularly in view of what you've heard the minister say today.

The floor is yours.

Mr. Earle McCurdy (President, Fish, Food and Allied Workers Union): Thank you, Mr. Chairman.

I'll assume, because I did appear before the committee a few months ago, that the statements I made at that time on the impact of the foreign overfishing and so on are well known to the committee, so I won't dwell on those unless somebody wants me to. It's clearly had a devastating impact on thousands of jobs and hundreds of communities in our province. That is the part of the country in which, by far, the overwhelming impact of this problem is felt, since it is where the fishing activity takes place.

Concerning the committee report, I certainly compliment the committee on the early report. Like Mr. Reid, I was extremely...well, disappointed doesn't capture it at all. I was as mad as hell, to tell the truth, at the minister pooh-poohing the report 24 hours later. That was inexcusable.

I met with him two weeks previously, along with Mr. Reid and the president of the processors' association in my province, and we addressed custodial management in particular. We tried to explain to him what we felt it meant, and I think Mr. Reid's comments are a pretty accurate description of what I view custodial management is. He responded with a litany of reasons why we couldn't, and we said, “Look, Minister, whatever you do, don't pooh-pooh it in public. We're about to go to a NAFO meeting. We're going to be dealing with other countries, and all we need is for the chief of police to say 'Don't worry about the speed limits'.”

In fact, that's what we got. He made a statement within 24 hours that I think was quite damaging to our ability to function as a delegation in NAFO. It certainly cut the legs out from under Mr. Chamut, who was the head of the delegation. And while he did make a reference to custodial management, it was to the effect that this had been something that was being talked about here and had been the subject of recommendations from the parliamentary...I think he referred to the committee and perhaps to the province--but it was only in that context. And of course the head of the delegation acts on orders from the minister.

That was a very much more than disappointing response on two counts: a substantive issue, not even willing to look at it and explore it; secondly, the strategic issue of saying to the other countries, “Don't worry about us. What happened in 1995 was an aberration.”

There were some issues at the NAFO meeting on which we made progress, but nonetheless the meeting... I've circulated a press release I issued at the time, simply to sort of reflect my views immediately following the meeting. It was the day the meeting concluded, I think, that I issued that release. There were a number of areas of progress and I believe an excellent presentation by the Canadian officials. It was presented by Mr. Chamut but prepared by the enforcement officers, documenting offences. However, in the context of the minister's pronouncements, that certainly put us in a very weak context in terms of making that presentation. You know, there really was no stick behind it.

On the observer issue, we're clearly going to face a further attack on the observer coverage in future meetings. And while I share some of the concerns that have been expressed on the inadequacy of this observer situation, at least with respect to some of the contracting priorities, the NAFO countries, nonetheless the information that Canada tabled, documenting in considerable detail and naming names as to offending vessels and countries, came from observer reports.

In fact, the observer reports, as I understand them from the EU, are made by genuine observers from a different flag state from the fishing country. That's been their practice to date. Some countries are better than others, but from some they are thinly disguised crew members. So there's a mix.

I do believe--and I've said this to Mr. Chamut and others--that Canada should be looking at putting Canadian observers on board. And if there's a cost to that, there is some price tag associated with sovereignty. I don't think it's an insurmountable cost, by any stretch of the imagination.

The two issues that gave me the most heartburn at this meeting...the biggest of all was the turbot quota, and Greenland halibut. That was inexcusable. NAFO has been fishing that above the scientific advice. That's been reflected in significantly reduced catch rates by medium-sized and small fishing vessels in our province. A lot of them gave up the turbot fishery because it was uneconomic to prosecute. That meant less income for the fish harvesters and it meant less work in the fish plants, badly needed work.

À (1035)

We had a golden opportunity on that turbot in the 1990s; there was a promising stock. I think that the inadequacies of NAFO have really put a big question mark on where that stock is going in the future. I believe the meeting in Spain clearly justified the recommendation of this committee with regard to custodial management. I don't think there's anything happening in Spain that should lead you to reconsider that view whatsoever.

As to custodial management and how it was presented, that's a political decision. That's not a poor bureaucrat's decision. The minister either gives direction to do it or direction not to do it, and then the head of the delegation is essentially bound to follow those instructions.

Port closures are, I believe, a necessary step. My understanding from talking to the DFO enforcement people is that Estonia in particular has agreed to a number of things. This year, with respect to fishing activities of both our countries in the offending area, what I was told by DFO is that the Faeroese only have one day's fishing of shrimp and krill this year, compared to way more than that last year. Estonia has likewise indicated very clearly a desire to clean up its act, including a willingness to place Canadian observers on boats. There are discussions on that. I think it's an effective tool. It's not sufficient. I think it's one we clearly have to use as much as we can.

The only area where I'd have significant disagreement with Mr. Reid's comments.... I'm not personally convinced that if we go and just sort of pitch custodial management, the other countries will say they see what we mean, and that's fine. I'm not sure I share his view that most people are rational, to tell you the truth. I get more cynical on that as I get older. And in fact I think logic has gone out of fashion.

Nonetheless, I think it still should be our goal, but it has to be a top priority of the House and the Canadian government for it to have any chance whatsoever, and it's got to be clear to the other countries that it is that kind of priority.

I overheard Mr. Stoffer mention something about Newfoundland joining the EU. We actually have a plan. Our plan is to invade St. Pierre and surrender immediately, and I think that will be how we address it.

On a final point, I would hope, Mr. Chairman, that we do have a.... You mentioned up front that I did have another issue. I believe in a different way it could in the long run pose as big a threat to our coastal communities as what we're talking about here today, which is the erosion of the independent owner-operator in our fishery. I have some colleagues here from other fish harvester organizations in the five eastern provinces. I think the P.E.I. representative couldn't make it because of another commitment. We have Quebec, New Brunswick, and Nova Scotia people here, and we're very concerned that the direction the department is headed on its Atlantic fisheries policy review is allowing....

We hope to get a few minutes to just make an initial raising of that issue here today with a view to perhaps having a better opportunity in the future. We will be having a press conference in little over an hour's time on that subject because we think that the whole shape of the future fishery in our country is in jeopardy. We believe that's an issue this committee should take very serious custody of.

À (1040)

The Chair: I'll give you an opportunity now to make your pitch on that point so we can ask questions on both topics.

Mr. Earle McCurdy: Yes, if the other guys come up. Perhaps I could just briefly introduce our colleagues: François Poulin from the Quebec Alliance de....

The Chair: Just a second, Mr. McCurdy.

Do you have a point of order, Mr. Efford?

Mr. R. John Efford: Yes. I'm a bit confused with NAFO and the Atlantic policy review. Can't we keep the two separate, do each separately, quickly doing NAFO and then going on to custodial management? Mr. McCurdy's right. The Atlantic policy review is a very serious issue, and I don't want to confuse the two.

The Chair: All right, if you want to do it that way, just as long as we give these gentlemen an opportunity. I'm going to be very strict on the time.

We'll start then with Mr. Cummins.

Mr. John Cummins: Thank you very much for your presentation, Mr. McCurdy. I think what you did was confirm many of our feelings.

There's one issue, though, I want to get your comments on, and that is the decision-making process at NAFO and how it relates to custodial management. To make my point, I'll just give you a very brief instance of the bureaucratic management on Canada's west coast.

Last summer there was a discussion on whether or not to allow a gillnet fishery on the Fraser River, and there were 41 people sitting around the table to make that decision. When consensus couldn't be reached, they had a vote, yet there were people who were voting on this who really didn't have a substantive knowledge base.

It seems to me that with NAFO you're in much the same position. You have 17 groups sitting around the table, each one, as the minister said, wanting a piece of the pie, each one with its own objectives. It seems to me that the last concern they're going to have is good, science-based management decisions for the fishery. Isn't that in itself another reason custodial management is almost a must?

Mr. Earle McCurdy: Yes, I agree with that. I have a kind of old-fashioned view that the nature of fisheries is such that people need to know that there's a cop there, that he's a tough cop, and that he's not going to put up with any guff. If you don't have that, then you don't have any kind of control.

I would suggest that in our domestic fisheries, if the way we set quotas was by sitting around a table where people who were about to go out fishing could vote on those quotas, we'd have a mess there too. The present structure of NAFO is frustrating and unworkable on a good day, and on a bad day it's disastrous. It's not a format that can really work, in my view. A lot of the things that were cited as sort of Canadian gains or accomplishments at the meeting were in fact just our hanging onto the share we'd always had. There were no great breakthroughs or successes in getting scientific advice followed on stocks. Whenever there's any amount of fish at stake, boy, I tell you, conservation takes second place to appetite.

Mr. John Cummins: In other words, somebody has to be in charge, and that someone should essentially be Canada because we have the biggest stake in it. We control the largest area on the banks, and we're in the best position to make good decisions for the stocks.

Mr. Earle McCurdy: Yes, it's our continental shelf. It's only an accident of geology that our continental shelf happens to run beyond 200 miles, which in virtually the entire world is sufficient to cover the full shelf. There are a half a dozen places in the world where it's not, and we're unfortunate enough to be on one of them.

The Chair: Nothing else, Mr. Cummins?

Monsieur Roy, s'il vous plaît.

[Translation]

Mr. Jean-Yves Roy (Matapédia—Matane, BQ): Thank you, Mr. Chair. I would like you to tell me if my analysis of your intervention is correct. You felt helpless at the last meeting of the NAFO because the minister reacted too quickly to the report of the fisheries and oceans committee. You consider NAFO to be an inefficient organization, that will only become efficient when there are no resources left.

Do you agree with all the recommendations that the committee made in May about overfishing?

À (1045)

[English]

Mr. Earle McCurdy: To tell the truth, of the ones I focused on, the key one was custodial management and the consequent getting out of NAFO. Clearly, to me, they had to be done in that order. To get out of NAFO first when there wasn't an alternative regime would be absolutely ludicrous, as aggravating as NAFO is.

I wouldn't say we were unprepared going in. As a matter of fact, I would say that the Canadian authorities--the officials, the enforcement people and so on--were quite well prepared. We had a lot of strategy sessions going in, but the minister's comments cut the legs out from under the delegation by his coming out in public. Really, what that did was undermine the preparation that had been made by him really saying to the other countries, you needn't worry too much, there's no real threat here. That was my concern.

[Translation]

Mr. Jean-Yves Roy: You think an alternative solution is required. Do you have any suggestions? If the minister had passed a resolution as requested and if we withdraw from NAFO within a year in case nothing happens, would you have an alternate pan to suggest?

[English]

Mr. Earle McCurdy: Obviously, there is nobody in Newfoundland--I don't know if you'd find a soul there who would disagree, other than maybe a few people associated with off-loading foreign boats--who would disagree with extension of jurisdiction. I think the general consensus around custodial management was that it might be a more achievable goal, and that still should be the goal. It's just unfortunate that we got the response we did from the most important Canadian speaking on the issue, namely the minister. I think it has to be put back on the table.

My point was just that I'm quite convinced it doesn't make sense to say, without a backup plan, we're getting out of NAFO and we're leaving you to it. There is no regime in place and there are no rules whatsoever. Unless and until Canada says we are willing to go out and arrest vessels that fish on our slope, well, NAFO is the best we have. I don't accept the comments the minister made that the only solution is to do the best we can negotiating within NAFO. I went to my first NAFO meeting in 1983; I've been to most of them since, and I have to tell you, if there's anything more aggravating than that, I can't imagine what it would be, sitting through that tedious process and knowing full well that the best interests of conservation are not being looked after.

The Chair: Mr. Cuzner.

Mr. Rodger Cuzner: I have two quick questions.

You did identify through your press release, Earle, the fact that there were some advances made at the meetings, some technical measures being adopted you thought would have an impact. If you could, just expand on that a little bit.

The second thing is, the minister has stated that he is going to Newfoundland, I believe, some time in February to host round tables, specifically on custodial management. How's that going to be received on the ground...? Oh, is that not true?

Mr. Bill Matthews (Burin—St. George's, Lib.): I don't think so. It's on the table, but I don't think it's on custodial management. At least no one has clarified or verified that.

The Chair: Mr. Matthews, excuse me. On page 1 of the response, it is stated that “the Minister of Fisheries and Oceans has announced a roundtable forum to discuss ways of improving the conservation and management of straddling fish stocks on the East Coast of Canada”, and we questioned Mr. Chamut about that. That is an announcement in the response, so I think you are right. Whether it's actually been set up yet, or a date or place has been set, I'm not sure.

But let's let Mr. Cuzner finish his question.

Go ahead.

Mr. Rodger Cuzner: Let's put it that way. We think there's an announcement there for him to come to St. John's with a round table. Do you see some significance in this? I would appreciate your comments on that, as you're fairly pragmatic and you see that these things move slowly. Will it be viewed somewhat cynically by the people in the industry that here we go again, another dog and pony show that isn't going to warrant anything?

The Chair: Mr. Cuzner, that is a leading question. We'll see how much lead he takes.

Mr. Rodger Cuzner: I don't think Mr. McCurdy is going to be led anywhere.

Mr. Earle McCurdy: If I don't want to be led, I won't be.

I'll put it this way. I wish he had said.... It would have been a really good answer, I think, to this committee's report to have said our next step is going to be a forum.

In my understanding, they're inviting people in. They call them experts. We call an expert a fool 50 miles from home. In any event, they're inviting people in who are knowledgeable on the area to address the international law issue surrounding custodial management and generally the management of offshore fisheries. That would have been a really good response right up front to say “Look, this activity is unacceptable. As a next step we're going to have this kind of a review of the situation.” The intervening comments he made pooh-poohing the thing will certainly water down any impact and it will, I think, create a cynicism that otherwise mightn't have been as prevalent.

Having said that, I don't object to the exercise at all.

If the lawyers had been asked in 1995 whether Canada should have fired on the Estai, the answer would have been no. Most international law happens because countries assert it. At one time we only had a three-mile limit, and gradually countries took assertive action to defend their sovereignty and that expanded the reach of international law.

À (1050)

The Chair: Is there anything else, Mr. Cuzner?

Mr. Rodger Cuzner: On the technical aspects--

Mr. Earle McCurdy: It's a little like the old cliché about the successful operation in which a patient dies.

There were things on compliance and things that should have been done a long time ago on NAFO. NAFO moved at glacial speed on some of these technical measures on how bycatch was recorded and so on. They were positive steps, by and of themselves, but when you saw that in the context of, first of all, the decision on the turbot quota, which was really unconscionable in relation to scientific advice, and secondly, in the context of that tremendous number of violations that Canada had documented, then that has put those decisions and those improvements in the context that they were not going to solve the problem.

They're important steps, and there's a lot of work done to pave the way for them. If that is in the context of a good record of compliance with the rules and we're setting quotas on the basis of scientific advice, then you'd say they'd be very significant steps. That certainly waters down or dilutes the impact of those developments.

The Chair: Thank you, Mr. Cuzner.

Are there any questions from the Canadian Alliance? From the NDP?

Mr. Stoffer.

Mr. Peter Stoffer: Earle, I asked the minister if he'd had a chance to speak to Mr. Chamut. The reason I asked that was I didn't think he'd made up these things in his head. He had to get that advice, I assume, from people within his department.

You know Mr. Chamut probably as well as anybody else. You two have been involved in the fishery from different sides for a long time. Have you then had the opportunity to speak to Mr. Chamut or to officials of that nature to discuss your serious concerns when it comes to custodial management?

Mr. Earle McCurdy: Yes. As a matter of fact, the most recent opportunity was a meeting with myself, Mr. Reid, Mr. O'Reilly, the president of the Fisheries Association of Newfoundland and Labrador, the minister, and Mr. Chamut. I think there might have been one or two others there, I don't recall, on June 3 or 4, about two weeks prior to his ill-fated dismissal of your report.

That's just one of a number of times when we've had an opportunity to discuss the whole issue of the frustration with NAFO and what the alternatives are and so on.

Mr. Peter Stoffer: Do you think Mr. Chamut and those officials are at least favourable to working with groups such as yourselves in custodial management, or are they saying, as the minister said, just forget about it?

Mr. Earle McCurdy: That's a political decision, and they take their marching orders from the minister. When he responded instantly on that, I think that clearly threw cold water on it. Once the minister has made that kind of pronouncement, it dictates the approach of his staff.

I don't know what advice he gave in private. I don't think I would be stepping out of turn to say he certainly shares a lot of the frustration others have with NAFO. On an issue like that, the officials have to take their direction from the minister. That's a political issue. The minister has to say, “We have to seriously explore this. What's happening out there is not good enough.” He has to tell his officials to give him alternatives; to look at custodial management and not just give reasons why we can't do it, but approaches by which we could try it. When that's not there, what the officials can do is quite limited.

Mr. Peter Stoffer: In your press release you mentioned concerns about the Greenland turbot. We know the cod stocks are in trouble. We know that wild salmon stocks are in serious trouble. Are you indicating that if things don't turn around on the Greenland turbot quotas, they will be in peril of extinction as well?

Mr. Earle McCurdy: Extinction is not a word I would use yet.

À (1055)

Mr. Peter Stoffer: Endangered.

Mr. Earle McCurdy: But the stocks are being undermined. We had good year classes in the mid-nineties, according to the scientific advice, that provided promise for the future on not only the amount of fish, but the rejection of proposals by Canada for depth restrictions that would limit bycatch, and so on. This is technical stuff, but there were sound recommendations that fell on deaf ears at NAFO for technical measures that would minimize unwanted bycatch, catching of juveniles, and so on.

We're seeing that in the gillnet fishing in our province. The turbot this year was a major disappointment to inshore fishermen, in terms of catch rates and so on. I believe quite clearly that the setting of quotas above the scientific advice is the major factor in that.

Mr. Peter Stoffer: If the minister does come to Newfoundland to hold these round-table hearings on custodial management and other aspects of the fishery, what advice would you give him prior to his entry into Newfoundland and Labrador?

Mr. Earle McCurdy: That's a good question. I would certainly suggest he reread your report.

Mr. Peter Stoffer: I throw that out to you--and Merry Christmas.

Mr. Earle McCurdy: The same to you. I don't answer rhetorical questions.

The Chair: Thank you, Mr. McCurdy.

Mr. Efford.

Mr. R. John Efford: Thank you, Mr. Chair. I'm going to make a couple of comments, and out of those comments maybe someone like Rodger will answer.

First of all, Earle, as I've said many times in the past, NAFO has never worked and is not going to work. It's like the fox guarding the chicken house. The fox will agree to do something, but when you turn your back you know what he's going to do. The political will has to be there.

What I've learned over the years in my term as minister in Newfoundland, and now since I've been in Ottawa, is the bureaucracy of DFO and External Affairs is a major impediment. The right minister, with a strong political rule, might be able to overcome it, but that's one of the major problems.

Next, I know you agree with some of the things that were accomplished at the NAFO meetings this year, but that's a long way from saying they were okay. You've already said that.

You've been over to those countries, so what is the greatest block we have to face--convincing the Canadian government, the minister of the day, to extend custodial management, or the foreign countries? My belief is that the biggest problem we have is right here at home.

Mr. Earle McCurdy: Well, I guess we can't even get to the foreign countries, who don't convince their own government. I believe these countries respect firm conduct. The behaviour in NAFO, and by the NAFO member countries, in the 1980s and early 1990s was absolutely scandalous and disgraceful. I brought a net, just to illustrate the point made at the previous meeting, which caught these little tiny fish.

That's the stuff we should be fishing today. We have stocks now of not just cod, but American plaice, which is a type of flounder. It used to be 55,000...which is 120 million pounds a year into Canadian plants. It's gone. It was a zero quota this year. They were caught when they were that size, instead of being allowed to grow to this size.

The conduct of some NAFO member countries, particularly the Europeans, was disgraceful. From 1995 until about 1998 or 1999, it was much better, because it took them aback when there was the confrontation in the so-called turbot wars. But gradually there was a little bit of slippage. Instead of stepping in to stop the slippage, the slippage was allowed to continue. Of course, the developments this year had to be music to their ears, when they heard the minister say, “Don't worry about custodial management”.

As for the Department of Foreign Affairs, the difference in 1995 was apparently that the Minister of Fisheries at the time had a bit more clout than the Minister of Foreign Affairs, because the Minister of Foreign Affairs adamantly opposed the action that was ultimately taken. Normally the Department of Foreign Affairs is a very significant stumbling block to the....They're so concerned about our relationships, but what about the interests of Canadians?

The Chair: Mr. Efford, one more.

Mr. R. John Efford: Yes, I just have two quick points or questions.

Earle, do you feel there's been enough emphasis placed on the fact that these fish stocks, both inside and outside the 200-mile limit, are...? We've talked about the loss of jobs and the loss to the economy and communities in Newfoundland and Labrador, which is absolutely necessary to do. But are we, as parliamentarians, government officials, or yourself and others in the industry, placing enough emphasis on this as part of the world food chain?

And finally, if something is not done quickly.... I presented this in a different way to the minister, but how much longer do we have in Newfoundland before there's a major catastrophe, another catastrophe even greater than the one in 1992, before the federal government, the federal minister, and the appropriate officials take the right action?

Á (1100)

Mr. Earle McCurdy: On the first one, I think it's always important to emphasize this isn't just another industry, but is involved in the production of food, to feed a hungry world. I think this is always something.... All of us who are involved probably need to do more in this realm. It is something we should always be reminding ourselves about and the public about.

On the other one, we're very vulnerable and very exposed at the moment. Even if NAFO cleaned up its act overnight, and agreed to custodial management, or any of these things, it's a long process until we get to a point where it will really produce fish for us. There are no overnight results. All it does is stop the bleeding and give us a chance that stocks will recover some time down in the future—if stocks aren't depleted beyond salvation. But there's no instant fix for this. A couple of stocks we already depend on, and particularly the crab, are highly vulnerable to the kinds of fluctuations that are pretty normal with this type of a resource.

The Chair: The only person I have left on my list on NAFO issues is Monsieur Farrah. Is this all right?

Monsieur Farrah.

[Translation]

Mr. Georges Farrah (Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, Lib.): Thank you, Mr. Chair.

Mr. McCurdy, welcome to the committee. I have two questions.

First, given the present conditions of some cod stocks, the minister is considering a moratorium. Do you see a connection between decreasing stocks and overfishing in international waters beyond the 200-mile limit?

[English]

Mr. Earle McCurdy: The only stock where that link appears to be is the northern cod stock. There's no question. In 1990 or 1991, or I think it was in one of those years, European catches of northern cod outside 200 miles probably more than tripled the entire catch of that stock by Canadians since. That stock was pounded mercilessly by foreign fleets from the mid-1950s right up until 1992. Clearly the devastation of that stock, which was once the biggest cod stock, I believe, in the world, is directly related. There are other factors as well, but the dominant factor was that relentless foreign effort.

In the case of the other ones, the gulf stocks, and so on, any link would be pretty tenuous or pretty minimal. It's really the northern cod.

[Translation]

Mr. Georges Farrah: In case the minister has to declare a moratorium, would you agree with his decision?

[English]

Mr. Earle McCurdy: That's certainly an issue on which I'd like to have an opportunity at some point to talk to the committee.

No, I don't agree with a moratorium on it. I think there are things that can be done. We're developing a plan in the northern gulf, for example, for a very restrictive fishery, which we believe is consistent with conservation objectives. The problem with a moratorium is that I wouldn't expect to ever live to see those fisheries reopen.

I think there are a lot of issues. It's hard to do justice in answering that question without taking quite some time at it. It's a complex thing. But I would hope that would be something the committee would take an interest in, perhaps in the new year when you resume.

[Translation]

The Chair: Mr. Farrah, one last question.

Mr. Georges Farrah: My last question concerns the NAFO.

You said that in the event the minister has to declare a moratorium based on scientific advice, you would not necessarily agree. However, you also said about turbot stocks that people should have listened to scientific advice but that they didn't and that quotas were increased. So, if a moratorium is declared, it isn't important that the minister heed scientific advice, even though at the level of the NAFO, scientific advice relating to turbot was not taken into account and quotas were increased. You said you did not agree with that. To me, there is some inconsistency between the two positions, that I would like you to clarify. We're not in a courtroom. I'm not trying to set you up. I just want an explanation. In the case of the NAFO, scientific advice is important, but it doesn't seem to be so with respect to the minister and gulf cod. Can you please clarify that?

Á (1105)

[English]

Mr. Earle McCurdy: I'm certainly not suggesting that scientific advice is not important, but there are some aspects of it that I think are important for people to know. That's why I'd like an opportunity to hash this out.

I'll give you an example of two questions that were recently posed by our representatives to the scientists who manage the gulf. The first question was had we not fished the northern gulf cod stock in the past five years, based on the scientists evaluation of the natural mortality, what difference would that make in the current level of stock? The answer: Very little, maybe a couple of thousand tonnes.

The second question was if we stopped fishing entirely in the northern gulf and the present level of natural mortality continues, driven primarily by John Efford's buddies the seals, is there any hope of recovery of that stock? The answer: No.

To just simply take a recommendation from the scientists that says the stock is at an alarming level, so stop fishing, and take it out of that context is ludicrous, in my view.

To be blunt about it, I think that a lot of the science in the northern gulf is political science. I believe there are a number of weaknesses in how that science is done. There are a whole bunch of other factors that shouldn't come into play that do. It would take a fair bit of time to get into that, but I think that's an issue that does warrant....

Yes, you have to listen to scientific advice, but I think that the scientists have to come under scrutiny, too. We had scientific advice back in the eighties that disregarded some pretty strong evidence from people who were on the water catching fish. There's a lot of revisionist history going on now about what caused all that. People blame it on politicians and say that the politicians overruled the science. That's an interesting argument, but the facts are, for example with northern cod, that no minister ever set a quota above the scientific advice until 1989, when the damage was effectively done.

So while it's convenient to blame the politicians.... I was there and listened to them dismiss fixed-gear fishermen who said we need more nets to catch less fish, and what we're catching is smaller. That was widespread. They said no, we have these mathematical formulas, and this is right. That's true for NAFO too. You always have to scrutinize the science.

Personally, I don't give much credence to the exact numbers they spit out of these mathematical formulas because they are absolutely dependent on numbers you put in. For example, if you assume a natural mortality rate of 30% instead of 40%, it would result in completely different scientific advice. Yet they have no means of accurately determining what the natural mortality is.

So it's a very complex area, and I'd certainly like an opportunity to explore it at another time.

The Chair: That's it on NAFO.

What time is your press conference, Mr. McCurdy?

Mr. Earle McCurdy: It's at twelve.

The Chair: Then I don't think we're going to be able to take a break, Mr. Cummins, because we have to give them an opportunity to speak on the additional topic.

We're now going to shift gears and give Mr. McCurdy and his team a few minutes for a nice tight presentation, please, on the issue you wanted to talk to us about, the Atlantic fisheries policy review.

Mr. Earle McCurdy: I appreciate that, Mr. Chairman.

I'd like to introduce my colleagues: Sandy Siegel from the Maritime Fishermen's Union; Léonard LeBlanc from the Gulf Nova Scotia Fleet Planning Board; François Poulin from the Alliance des Pêcheurs Professionnels du Québec--and we're not a bilingual province, you might have noticed; and Jean Saint-Cyr from FRAPP, the mid-shore organization in New Brunswick.

We all attended--well, I think there was a different person from François' organization--a meeting that was called the External Advisory Board to the Atlantic Fisheries Policy Review being conducted by DFO. It's an extensive review of all their policies and recommendations for change and so on. This has been going on for a couple of years.

There have been several drafts, and there are some elements of it that greatly concern us. I'll touch briefly, if I can, on the main ones and the others may want to add to that or get into an exchange. I would hope that there would be an opportunity for a more detailed look, as I think some should be of great interest to this committee, but we're really anxious to get it at least brought to your attention prior to the Christmas break, because we believe it's very important.

The guts of our fishery, the under-65-foot fishery in Atlantic Canada in particular, the inshore and mid-shore fisheries, has been subject to what's called fleet separation, which is a separation of the harvesting from the processing.

For example, in the offshore fishery the processing plants have owned offshore vessels and they've been entitled to for a number of years. But in the inshore and mid-shore, the fishing has been.... What you've had is essentially like the fishing equivalent of the family farm. You have essentially family enterprises or small and medium-sized enterprises where a fisherman owns a vessel and they fish and they sell to a plant and there's an arm's-length relationship between them and the plant.

That policy was implemented by the other Mr. LeBlanc, if I can put it that way, in 1976. It was confirmed as a policy of DFO in a major policy statement at that time called the Atlantic fishing licensing policy, and the combination of the owner-operator principle and the fleet separation has kept that independent sector alive.

We have brought to the attention of DFO on several occasions in the past two or three years a loophole in the regulations that you can drive a truck through that has effectively undermined the intent of the policy. Without getting into undue technical details, because I could get lost myself if I tried, it involves separating the beneficial use of a licence from the legal title. The policy says that the title must rest with the fisherman, but processors have devised what they call trust agreements that have been, in some cases, endorsed by the courts, although there has been a recent development in New Brunswick somewhat different from that. But it really allows them to dictate the use of the licence.

A fishing licence has no intrinsic value. It's simply a piece of paper. The value in it lies in the right to use the licence to go out and catch fish. But if the processor controls the use, that use includes directing somebody as to where he sells in the event he defaults on his agreement. So these are all tied to financing agreements.

Financing arrangements between processors and fishermen are.... Well, I suppose they happen. It's probably not possible to stop them, and it may not even be desirable. That's a business arrangement people can choose to go into.

We think that provincial authorities should be making other alternatives available to fishermen. In any event, what we object to is the use of a kind of technical loophole to get around the clearly stated intent of the policy. Unfortunately, the Atlantic policy review, after months and months of studying it and preparing, the latest draft we saw two weeks ago had no mention whatsoever of fleet separation and no acknowledgement of a loophole, let alone any measures to address it.

Á (1110)

A number of our organizations have received legal advice, through the Canadian Council of Professional Fish Harvesters, that the loophole could be plugged by making the legal title and the beneficial use inseparable. I'm no expert on law, but we hired someone to look into it, and there is an interesting court case underway in New Brunswick that might shed some light on all this.

We believe if the Government of Canada is going to have a policy, then to state a policy and knowingly allow it to be systematically undermined by a loophole and not address that loophole is pretty disingenuous. If that's the way it's going to be, why not change the policy? We're not advocating that, but there's no point in having a policy that is being seriously eroded, which we believe it is. We believe it jeopardizes the whole shape of the fishery as we know it. There are people from all five provinces who share that view, including groups that from time to time are at odds over other issues, such as allocation and so on. But this is the widely held view of midshore and inshore groups in Atlantic Canada.

There are a couple of other elements in this that we want to speak to. That's probably the most significant one, but the document repeats over and over again what they call the increasing importance of other users of the fishery resources. They point to aquaculture, and in particular, recreational fisheries. If there are no more fish, and those users are going to increasingly use the resources, that only tells me that the people we represent are less important in the eyes of the department.

At different points in the policy document there's the usual cliché about too many fishermen chasing too few fish, or words to that effect. They say the fleets are too big for the amount of resource. Yet the same document clearly opens the door wide to other users to come in and get a bigger share than they now have. Quite frankly, the two don't seem to jive.

There's also something in there about shared stewardship, co-management, and all that kind of stuff. But it's interesting that while the rhetoric of the document talks about the department sharing responsibility with people in industry, they never let go of the pen for one minute in the preparation of these several drafts. We suggested they sit down with a few people from the different interest groups in industry to see if they could agree on some principles and actually pick up the pen and write stuff and say “Here's another way of phrasing it”, but they never let go. They had a firm grip on that pen throughout.

At the public consultations they held, I was told by DFO people who attended all of them that the single most commonly raised issue was the owner-operator fleet separation combination. Despite very strong representations--not unanimous--to strengthen it, their report puts forward the weakening of it by talking about flexibility, which can mean anything from slight fine-tuning to creating holes you could drive a bus through.

We tabled a document at these discussions two weeks ago. We're fine with the idea of sensible flexibility, and we tabled what we thought were sensible parameters for flexibility, so it would read genuine flexibility, not an undermining of the policy.

We think these are issues of great concern, and we would appreciate an opportunity to make an initial presentation here. We're going to get them in the public domain at our press conference this morning. We believe it's something that would really lend itself to the scrutiny of this committee. I appreciate the opportunity to raise it on short notice.

Á (1115)

The Chair: We'll undoubtedly be studying these issues, and will give you an opportunity to have a more in-depth discussion with us. Recognizing that this was not on the agenda but that you've brought it to our attention, we'll ask a few questions, if we may. But I also hope you recognize that we have other things on our agenda that we have to complete, hopefully before Parliament adjourns this week.

So thank you for your presentation. I'll ask our questioners to be brief and succinct in their questions.

Mr. Cummins.

Mr. John Cummins: Thank you, Mr. Chairman.

Mr. McCurdy, I'm sympathetic to the issue you raise on this vertical integration. My question, though, has to do with the issue of pricing for product. I'm wondering how much it drives the smaller operators to want to establish their own processing. From conversations I've had, it seems to me there's a crisis in pricing, in a sense. These large vertically integrated companies have dealt with such a large chunk of the product—in the past, at least—there's not much flexibility in the price. The volume of product produced by the smaller operators may be of better quality, but the price they receive is no different from the price that would be received for product coming off a larger vessel, which is not handled as carefully. One of the reasons some of these smaller operators vertically integrate themselves is to achieve a better price. Is there any truth to this? How do you respond to this notion?

Mr. Earle McCurdy: Some of my colleagues may wish to jump in on this one. But from my perspective, it's certainly pretty competitive on the wharf these days in our province. In fact, what the buyers are trying to do, or what they want to do, is to secure supply. If they own the vessel as well as the plant, then in fact you won't get competition on the wharf, because they'll control the total situation. The people who are actually fishing will essentially have to take what they can get.

I think the objectives of the processing sector, who spoke up very....When I spoke on this issue and we tabled the one-page document outlining what we saw as the limits that should be placed on flexibility around the owner-operator principle, the next five speakers were members of major processor organizations in different provinces, including two national organizations. That's what they wanted. They want to limit that competition, so they're in the driver's seat.

Á (1120)

Mr. Sandy Siegel (Executive Secretary, Maritime Fishermen's Union): Just briefly, to speak to that comment, in the inshore fishery, where I represent lobster fishermen and those fishing scallops, herring, and mackerel, if we take the example of southwest Nova Scotia, this loophole is what thousands of fishermen in the lobster fishery are quite scared about. Through these indirect trust agreements, which have been going on for years, there are processors right now who own fleets of vessels. They are building new 50-footers and putting crews on them to run them. We can name them. How many of these fleets of processor-owned lobster vessels is it going to take to have an impact on lobster price? That's what fishermen are worrying about.

It's going on. The department seems to throw a blind eye at it, even in this very fundamental policy review process, where they ask the fishermen and the fishermen respond. Yet when you look at the document, they don't even mention fleet separation. The word isn't even in there.

So there's something wrong here. Something smells. There's a watchdog committee. It's up to you to do your part, because we're doing ours, to make sure the Department of Fisheries moves to close this loophole. If they don't close the loophole, believe me, the very question the gentleman is asking about price is in the minds of thousands of inshore lobster fishermen. It's said, “don't tamper with that”, yet it's already being tampered with right now.

The Chair: Mr. Cummins.

Mr. John Cummins: I'm beginning to get a clearer picture of where you're coming from. What you're talking about are the large corporations that own the vessels—above a 65-footer, say—and are in fact trying to control even the small fleet by loaning money to purchase licences, and these sorts of arrangements.

Mr. Sandy Siegel: They're on their way.

Mr. John Cummins: That's one problem. We have that problem on the west coast, too, where these arrangements are made. It seems to be the only source of money for the small operator who wants to buy a licence or vessel. He needs that guarantee from somebody, otherwise he's out. So that's a widespread problem.

The other issue I guess I was referencing is where the small operator, the under-65-footer, says “Well, because of the market operation, I can't get the kind of price I want from these large international operations”. So he takes it upon himself to vertically integrate within his community, or something. Is this a concern as well to you or not? I want to know how much of a problem this is.

Mr. Earle McCurdy: On that one, I can only speak for our province, where it's not an issue. There's so little there, it's just not an issue. People sell to plants.

The real issue with them is having the independence to have the option to sell to this plant, or that plant, or that plant, which gives them leverage on price.

So for our province, that's not a problem. I can't speak for the others, but it's certainly not an issue for us.

Mr. John Cummins: What about the inshore—

Mr. Sandy Siegel: In the inshore fishery we represent, whether it's primarily New Brunswick, and somewhat in Nova Scotia, it's not a particular issue at this point with inshore fishermen—lobster, or whatever. It is in other sectors, particularly in Nova Scotia.

The Chair: Anything else, Mr. Cummins?

Mr. John Cummins: No. But just to comment on that, I certainly recognize this is a very real problem for all the reasons given. So it's a good issue, and I'm glad you brought it forward.

[Translation]

The Chair: Mr. Roy, please. Then, Mr. LeBlanc.

Mr. Jean-Yves Roy: Mr. Chair, my question is to Mr. Poulin.

Does the situation Mr. McCurdy is talking about also apply to Quebec? Is property shifting increasingly from small owners to processing plants? As a matter of fact, these people need money and this is the only way they can get some to repair their boats. Is the situation the same in Quebec?

Á (1125)

Mr. François Poulin (Advisor, "Alliance des pêcheurs professionnels du Québec"): Conditions are somewhat different in Quebec because all fishermen and particularly lobster, crab and shrimp fishermen want to stay independent from the fish processing plants. This being the case, fishermen have full ownership of the boats and negotiate prices with processing plants.

In Quebec, marketing boards were created and fishermen collectively negotiate prices with processing plants. However, plants have always wanted a secure supply because they're not totally satisfied with prices paid to fishermen. They would like to pay less, which is quite legitimate but we can understand that our fishermen want to get the market price. When the price of lobster is negotiated at Îles de la Madeleine, for example, the basis of the negotiation is the current price in Boston or another place where the lobster market is well established. This gives us reference prices that are used as the basis for the price at Îles de la Madeleine, in the Gaspé Peninsula or on the North Shore.

In some cases, fishermen acquired a fish processing plant, most often when it was going bankrupt. This was the case at Sept-Îles, in particular, where inshore crab fishermen bought the plant but it was taken over by people from Newfoundland, which raises another problem.

Generally speaking, processing plants want a secure supply but we think they don't need it because it would destroy the socioeconomic balance of our regions. At Îles de la Madeleine, 325 lobster licenses are distributed very fairly among the fishermen from different communities. This way, our own people are getting the highest possible income from lobster fishing. There are no outlays to pay back capital to banks and so on. All the money stays in the islands. We think this is an ideal formula.

I just read a report on the situation in Europe. Everyone knows Europeans have destroyed most of the fish stocks not only on our Atlantic coast but also at home. They're studying a proposal that would create a system similar to ours with fishermen owning the boats and selling their catch instead of having industrial fleets and processing plants controlling the boats.

Mr. Jean-Yves Roy: Is it the same with groundfish? You're talking mostly of crab and lobster.

Mr. François Poulin: For all practical purposes, there is no groundfish left.

The Chair: Thank you.

Mr. LeBlanc.

[English]

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Thank you, Mr. Chairman.

Thank you, Earle, and your colleagues, for bringing up this issue. Thank you, Mr. Chairman, for finding a way to accommodate it.

Earle, certainly from my perspective, when I read the Atlantic fisheries policy review document, I had many of the same reactions you did. In the area I represent, the owner-operator principle and principle of fleet separation have become, over the last two or two and a half decades, the basis on which many little coastal communities and many families have been able to earn a living and to develop an economy, which traditionally had been in the hands of a few processors. Thirty years ago, in the area I represent, a few processors—probably in violation of the Competition Act—would decide the price. Fishermen were very much handicapped in terms of their options. For me these are very fundamental principles.

Earle, I agree with everything you've said. The MFU in my area, which represents inshore fishermen, has been doing a lot of work on this issue. The beneficial use and the legal title is a classic trust document. I know because I have fish plants in my riding who call me to say, “Well, we've financed some guy who is a fisherman and who has no other income and no other assets”. Suddenly, he pays a million dollars for a mid-shore crab licence, and then gets caught in some DFO look at this problem. It's absolutely plain and simple, they have financed.... And some of it is that the government has driven the price of these licences up.

Over the years, a piece of paper giving a fisherman the right to catch fish belonging to the public or to the Canadian people has become very valuable. Therefore, the only way to finance the purchase of one of these pieces of paper is to have the local fish plant put up some money to get around what I would argue is not even a loophole, but just a glaring omission allowing these fish plants to effectively tie the hands of the fishermen.

So you guys are on to something very important.

Á (1130)

[Translation]

As you said, François, there is a very delicate socioeconomic balance.

[English]

It's a very delicate balance. But in our area, these are very important principles.

Mr. Chairman, I think as a committee we should take up the offer in the new year, as part of a look at the fisheries policy review—which is something we wanted to do anyway—to spend some time on the specific issue and draw attention to what I think is the DFO officials' willful blindness to this problem.

The whole document talks about a “more economic fishery”. That's a code word. The opposite of an economic fishery is a social fishery, which is a polite word for a welfare fishery. So there's a whole disparaging tone, which smells to me like some of those great employment insurance changes we undertook in 1995 and 1996. The same buzzwords were circling around that debacle.

You're on to something here, and I would encourage you to continue. Sorry for that speech, but this is an important issue, and I think you're on the right track.

I have one question. If, however, we say that individual fishermen or fishers should be the legal and beneficial owners of their licences, on which I think you're right, are there not examples where fishermen turn around and buy plants? These would be mid-shore fishermen in some cases, and maybe inshore fishermen in other areas. If this principle is as important as we think it is, I would think we should apply it in both directions. Fishermen should not be allowed to own fish plants. Some of them will have co-op arrangements, and so on, but if we're going to take a tough position on this, I think we should let fishermen own licences and fish, and we should let the processing industry own fish plants. Then the free market sets a price,

[Translation]

in Boston and elsewhere.

[English]

Would there be an agreement that we apply this in both directions?

The Chair: That's an interesting and perhaps large question. If you want to answer it now, fine. If you want to think about that question and then come back later, we can do that.

Who wants to take it?

Á (1135)

[Translation]

Mr. Jean Saint-Cyr (director general, Fédération régionale acadienne des pêcheurs professionnels): I represent mid-shore fishermen, who are probably those most concerned by your question, Mr. LeBlanc. I simply want to say that I don't find your comments very surprising. You surely have a genetic preference for fleet separation since your father -- and we still thank him for it -- introduced in Canada's fisheries the owner-operator policy that we want to maintain.

As for your question, Mr. LeBlanc, in the crab fishery -- which is probably the sector you're thinking about, although it's not the only one, even if it's common in our area -- there are at least four or five processing plants that are owned fully or partly by crab fishermen.

How did we get there? This is the question to be considered. Our crab fishermen were faced with a situation where there were only two buyers. They couldn't even pay their costs. At that time, you could not make money fishing crab. Later on, the market improved. In particular, in the early '80s, the provincial government started to issue crab processing licenses because it was becoming a lucrative business with the arrival of the Japanese on the market. Fishermen then began to take advantage of the situation to make their business more profitable.

In 1989, the stocks collapsed and most processors who sold their businesses at that time were convinced the crab fishery in the southern gulf was over. They simply wanted to take their money out and to stop taking any chances in the fishery. As for the fishermen, they did recognize that the stocks were in trouble but they were sure that with the help of departmental scientists, very tight control measures and a lot of discipline, the stocks could be saved. This is exactly what happened.

Between 1989 and 1994, there were many poor years but in 1994, fishermen were able to see the results of a good management plan. In the Acadian peninsula, crab fishermen found $18 million to buy these plants and protect market diversity. They did not wish to return to a monopoly or quasi-monopoly situation. This is what motivated their investment at that time.

Today, you're asking us whether we should have this. If you ask crab fishermen to maintain the diversity of the processing sector and offer them to get back to fishing and to stop managing the plants, they would be very happy to do it because they did not become fish processors. They have hired managers who sit on the boards. So, if you give them a choice between being fishermen or plant owners, they will choose fishing. It's only by necessity that they acquired these plants. Contrary to what you see in the processing sector, this is not a strategy to become richer or to increase concentration. The two groups have very different attitudes.

Can you regulate fishermen's wish for survival? This is what it amounts to in our case. They acquired the plants to protect market diversity. Last week, the processors attended the meeting in Halifax to review the Atlantic fishery policy. They say: "Well, that's the way the business goes." It is part of a strategy for expansion, concentration and market control. But not in our case.

So, before considering regulation of ownership in the fish processing sector, you have to see under what circumstances fishermen do it. In this regard, I think we should have special provisions for some regions or some sector profiles.

[English]

The Chair: We have four questioners left. We're running out of time. I'm going to give each person one question. Please keep the question and answer short.

Mr. Stoffer, Mr. Efford, Mr. Hearn, and Mr. Cuzner.

Mr. Stoffer.

Mr. Peter Stoffer: Thanks, Mr. Chair.

Folks, I sympathize with the concerns on the east coast with the oil and gas, or with the Province of Nova Scotia initiating changes to the lobster pound holding tanks, getting rid of the small buyers...to the larger buyers, to the possible merger of FPI and the Clearwater group and the cornering of the market on that one.

I don't believe the DFO, Mr. LeBlanc. I don't believe DFO has a wilful.... I think their eyes are wide open. They did this on the west coast with the Miffin plan. They forced those people on the west coast to buy their stack licences from the buyers...like Jimmy Pattison now controls the west coast.

I think now we're going to have the Thibault plan here very quickly. I honestly believe that DFO believes there are too many fishermen chasing too few fish, and if you get rid of the fishermen and corporatize the fishery, it's much easier to manage. Instead of ten boats, you have one boat.

Would you agree with those comments or not?

The Chair: Mr. McCurdy.

Mr. Earle McCurdy: Yes, I think there's a lot of substance to that. Clearly, the smaller the fleet, the easier it is to manage.

We do not want to see in Atlantic Canada a repeat of what happened in British Columbia, where investor licence holders are now dominating. We believe a fishing licence is a licence to fish. It's not a licence to peddle the right to fish.

An hon. member: Hear, hear!

Mr. Earle McCurdy: The fisheries in B.C., where over 50% of the landed value is gone, is dissipated in payments to people who hold only a piece of paper, who've never had their hands dirty, in some cases, from hauling a fishing net.... They are people who hold either quotas or license their boat, and it dissipates the value of the resource. We don't want to see a recurrence of that. That's why we're so adamant. We've talked with our colleagues from British Columbia, we've realized what a mess that's created, and we're damned if we want to see that happen in Atlantic Canada as well.

An hon. member: Hear, hear!

The Chair: Mr. Efford.

Mr. R. John Efford: Peter, you're spot on. I've been concerned about what is happening for quite a number of years.

I have another concern, and I'll ask for your comments on this. I'll give you an example in my riding. Fewer's Funeral Home owns seven boats. The new president of the Atlantic Chamber of Commerce, Siobhan Coady, owns four boats, and on and on the list goes.

Á (1140)

Mr. Loyola Hearn: They're ghost fishing, John.

Mr. R. John Efford: Earle, I'd like your comments on this. What's happening now is it's moving rapidly toward company control if this loophole does not close. So in the next decade it's rapidly going to fall right into the hands of the companies. Because of the cost of the licences, $1 million, $2 million for a licence, young fisherpeople will not be able to get into the fishery. Do you agree?

Mr. Earle McCurdy: Yes. The real question here is what kind of fishery do we want to pass on to our sons and daughters?

An hon. member: Hear, hear!

Mr. Earle McCurdy: Right now, I think that what happens in the next few months in relation to this issue, in particular, will have a great relevance in terms of answering that question.

It's one thing for Fewer's Funeral Home to finance a vessel and make an investment in the vessel. I suppose that's something nobody can stop. It's another thing if the policy allows them to gradually hold the title completely, and then to start combining the vessels into one. They start getting rid of jobs, and phasing out the people who actually do the dirty work on the vessel, who do the hard work of fishing, who take the health and safety risks and all that goes with it, and the dollars are dissipated into basically rent to brokers.

The Chair: Mr. Hearn.

Mr. Loyola Hearn: Thank you, Mr. Chairman.

Again, what my colleagues say is so true. When we moved some time ago that we would deal with licensing issues and in fact talked about going to the province to have hearings, this is exactly what we were talking about.

Fishermen as we know them are almost non-existent. If you have a 45-footer, a 65-footer now, and you want to buy a licence or you want to improve your boat, you go to the merchant. You sell your soul in most cases. It's not the major plants, the FPIs or the National Sea Products we're talking about here; we're talking about the Daleys, the Quinlans, the Barrys, and those operators that are buying up licence after licence. They don't have it in trust or the right to use--they really own the licence. That's the problem with it. They have it in somebody's name, and the poor old fellow fishes and sells his soul for years and years, even beyond the time that he pays off his debt to them.

What's going to happen is a handful of operators will be controlling the fishery and of course controlling the price and everything else. Perhaps, and we've drawn this out before, we should get back to the day when you go in and you get your fishing licence for your 50 bucks. You use it as long as you can. When you give up fishing, it returns to the crown. The next fisherman in line pays his 50 bucks to pick it up. That will eliminate this problem entirely.

The Chair: Is there a question there, Mr. Hearn?

Mr. Loyola Hearn: I made a comment.

The Chair: Do you agree, Mr. McCurdy?

Mr. Earle McCurdy: I think that essentially captures the situation, yes. There really needs to be that separation. The person who actually goes out on the boat and catches the fish should be the one who has the ownership and control. Albeit the fact that it's owned by the crown, it should be the one who has control of the title.

We've raised this issue of that so-called loophole very clearly, and haven't gotten any.... It's not as though the department was unaware of it. They've very clearly been made aware of it, and there was no response whatsoever in the document. That's why we're alarmed and why we asked for this opportunity on short notice to get the committee's ear and hopefully the committee's cooperation in terms of tackling this issue before decisions that can't be turned around are made.

The Chair: Mr. Cuzner.

Mr. Rodger Cuzner: I feel that with all the speeches going on down both sides of the table here, Mr. Chairman, I missed out on my roast beef dinner.

To my friend Leonard LeBlanc here, if you could, just give a Cape Breton perspective of what it means on the ground in Cape Breton. What's the extent of the problem thus far? What negative impacts has it had, and what is the potential of it worsening if something isn't done? He's a poor independent fisherman himself.

Mr. Leonard Leblanc (President, Gulf Nova Scotia Fleet Planning Board): Thank you.

First of all, I feel as if I'm an endangered species, because I'm a fisherman representing fishermen, and that makes me kind of unique in a lot of circles.

I'd like to go back a little in history. My father was a fisherman and his father was a fisherman. I can remember my father saying that when his father was fishing from April to December, it took all that time to pay the bills he had accumulated over the winter. Therefore, he was basically known by the people we knew in Chéticamp as being les Jerseys. That's something I never want to go back to.

I'm an independent fisherman, and I'm proud to be a fisherman. I work hard for a living, and I earn the money I happen to put in my pocket at the end of the day after I pay my taxes. And I do pay taxes, by the way.

Á (1145)

The Chair: Mr. LeBlanc, could we focus? I'm sorry, I know you haven't had an opportunity, but you have to leave because you have a press conference. I'm mindful of the time, so could you just focus on--

Mr. Leonard Leblanc: I'll tell you exactly how it could impact on fishermen such as me. We have approximately 35 lobster fishermen in Chéticamp. Technically, you could raise the trap size, cut the number of boats to 10 boats, fish that lobster fishery, and cover the grounds I fish. Therefore, you'd eliminate 25 boats, and at roughly two guys a boat, 50 guys would be out of work.

That's only one port, and Roger knows how many ports are in his riding, because he gets requests for repairs all the time. It doesn't take a mathematician to figure out that you could eliminate thousands and thousands of fishermen from the fishery, put them out of work, just by changing this policy. That's why owner-operator and fleet separation are very important. This document could put a lot of people out of work, and you must spend more time to deliberate before you act on this.

Thank you.

The Chair: Thank you, Mr. LeBlanc.

Mr. Cummins wants a very quick question, and this is it.

Mr. John Cummins: Dominic LeBlanc mentioned the issue of the government driving prices up. In response to the Marshall decision, the government got into the business of buying lobster licences, and lobster licence values pretty much doubled. We've received testimony that the guys working on the back deck can no longer afford to buy.

How much has that impacted on this problem we're talking about here, this vertical integration? How much has that required some of these companies or allowed them the “in”, if you will, to back people who wanted to buy a boat whose value has now been inflated?

The Chair: Mr. McCurdy, do you want to tackle that?

Mr. Earle McCurdy: My view is that this has been an issue, and people in the Maritimes could speak more to that than I can. The impact of that decision is much less in our province than it is in the other Atlantic provinces. However, we've still had a terrific escalation in the price of licences, which has been almost entirely driven by the desire of the fish processing plant owners to get their hands on the control of the supply of fish.

Even irrespective of the Marshall issue and the buying up of licences under that program, there's been a real drive by the processing companies to become vertically integrated. That may have been a factor in some areas in driving up the price, but the whole thrust of the companies buying them up was underway prior to that Marshall decision and is continuing sort of parallel to it. By and of itself it's got tremendous momentum at the moment because of the loophole.

The Chair: Thank you very much, Mr. McCurdy, for your presentation on NAFO and also on this very important presentation.

Gentlemen, I just want to let you know that you probably have both our ears, not just one, on this issue.

Mr. Earle McCurdy: Thanks very much. We appreciate the opportunity on short notice.

The Chair: As a final point on NAFO, gentlemen, we did receive a response from Pat Chamut to our request for statistics on days at sea and boardings of foreign vessels. So that has been distributed.

We're going to suspend for five to ten minutes, and then we're going to go in camera to do our MCTS report.

[Proceedings continue in camera]