FOPO Committee Meeting

     I ask the members to take their seats, please, so we can begin.

    Today we have with us Monsieur Poirier. I appreciate you coming today, Monsieur Poirier, to meet with the committee to talk about issues related to the crisis in the fishing industry. We have set aside the first hour for Monsieur Poirier.

    We allow a ten-minute interval for you to make your opening presentation to the committee, and the members are constrained by certain timeframes they need to stay within for questions and answers.

    Having said that, Monsieur Poirier, welcome today to the Standing Committee on Fisheries and Oceans. I'll turn the floor over to you at this time to make your opening comments.

    Thank you, Mr. Chair. If ever I do go over my allotted time and do not hear the bell, please feel free to interrupt me. I'm not accustomed to procedure.

    As you well know, the lobster industry is a $1 billion industry for Atlantic Canada. It is also a fact that 50,000 tons of lobster are landed each year. A total of 10,000 small fishing businesses are involved, along with 25,000 people who work on the boats. An additional 25,000 people work on the docks, in the plants and elsewhere. Therefore, it is a very important industry, as you well know, for all of Atlantic Canada and for Quebec.

    The current crisis is one of major proportions. In my opinion, there are two sides to this crisis. It is a structural in nature, but it also is tied to current economic conditions. Twenty-five per cent of lobster fishing is done in Quebec's Gaspé region. Gaspé's lobster fishers are experiencing both types of crises. In the case of the Magdalen Islands, a situation that I'm more familiar with, I would say that right now, the crisis there is tied more to economic circumstances.

    In structural terms—I believe I'm the last provincial representative of fishers—one possible solution to the problem is likely the rationalization of the industry, as a number of you have surely suggested. However, I would caution both my colleagues and committee members not to think that rationalization is going to completely solve the crisis in the lobster industry.

    I concur with the view expressed by certain provincial representatives. I believe the report of the FRCC, the Fisheries Resource Conservation Council, needs to be fully examined. A number of important recommendations in the report must be carried out. As you know, we in the Magdalen Islands have taken the FRCC's report to heart. That is why I said earlier that the crisis we're facing is tied more to economic circumstances, than to the way the industry is structured.

    Having said that, during the current crisis, considerable emphasis is being placed on international trade rules, which are primarily political responsibilities. Government has a responsibility to ensure our economic security at a time when our industry has been globalized, and not at our behest.

    You may recall that between 1985 and 1990, all existing programs that provided support to the lobster industry were abolished. I'm speaking about the situation in Quebec. There may be a few adjustments to make for the other provinces, but as I recall, the federal government had in place programs to insure fishing boats and these have disappeared. There were programs in place to guarantee maximum prices for gear in provinces other than Newfoundland, and these are no more. A range of industry support programs have disappeared.

    The years from 1990 to 1995 were a time when costs were off-loaded, so to speak, on to the industry. The federal government introduced licence fees for the Magdalen Islands' lobster fishers. Even though this is a very small industry, a lobster fishing licence can cost as much as $800. So then, licensing costs were off-loaded. In related areas of the fishery, costs were transferred in the case of marine observers, dockside weighing, and so forth. As I said, a significant number of costs were transferred in the early 1990s.

    I also lament the fact that the federal and provincial governments have failed to initiate talks with the industry about possibly adding a second component to the safety net which, since the 1950s, has been compromised of employment insurance.

    As you know, the federal government responds on two levels to agricultural crises. At the provincial level, there is a third intervention level, at least in Quebec's case. The situation in the fishery is nowhere near the same as it is in the agricultural sector. With respect to the income security program, or the safety net—you can call it whatever you like—depending on the scope of the crisis, the government may intervene at either the first, the second, or the third level. It could intervene at the first level, or, if the crisis is a little more serious, at the second level, or, if the situation is really bad, at the third level. One important thing to remember is that these programs apply for a set period of time, whether three years or five years, for instance. According to Patrick Pichette, Google's Chief Financial Officer, in order to discourage inertia, it is important to feed the winners, and starve the losers. I wouldn't go so far as Mr. Pichette, but I do think that it is important to support productive efforts, otherwise, in my opinion, the industry is condemned to self-destruct.

    One principle is especially important for the lobster fishers of the Magdalen Islands, and that is equity, which is not necessarily the same thing at all as equality. We in Quebec have a hard time understanding why crab quotas were used for 15 years to support fixed gear groundfish fishing fleets when some were not profitable. This is not the kind of support that we are requesting for the lobster fishing industry. We feel that fleets that are performing well and that trying to overcome current economic circumstances should be helped. While everyone should be supported, it is important first and foremost to help those who help themselves. In that respect, I have to say that the lack of a support program at this point in time is unfortunate.

    Getting back to international trade, it is invoked to justify the lack of support to the industry. It bothers me tremendously that this argument is used. It is hard for us to understand why the industrial component, that is the plants, or the large buyers, would deny lobsters fishers in crisis the support they need. Integration is all well and good, but we've already had a taste of it in the case of other resources, such as goldfish. We saw how disastrous that experience turned out to be when the skipper-owner rule in the case of vessels 65 feet or longer in length was modified to favour large plants. We believe that businesses should remain family-type or cottage operations. That is the best way to protect the resource and ensure its sustainability.

    If fishers are abandoned and not given any support, we will be heading toward the type of system that some are demanding. That would prove to be a cost-effective, albeit short-term, solution. I'm not trying to be pessimistic, but in the medium term, we could end up destroying the resource in Canada. We have seen this happen with other resources around the world.

    Thank you, Monsieur Poirier.

    Mr. MacAulay.

    Thank you very much, Mr. Chair.

    Mr. Poirier, it's good to see you. Thank you for coming. I think you and I agree: it's a disastrous situation where I come from, and a major problem, I guess, where you come from.

    You would think that some people involved in large industry would say “starve the losers”. Well, there's no problem starving the losers in the fishing industry: they are starving, and there's going to be a major problem if we don't do something.

    I also agree that these are family operations, where you come from and where I come from in Prince Edward Island. If something is not done, the family operation is gone and the community is gone. That's exactly where we are.

    You were talking about levels of support. I would like you to elaborate, though without making it too long, on what measures could be put in place. It's okay, I believe, to put funding into exploring markets, and it's needed to make sure we get a better market for lobster. But with the major problem in financing that we have right now, we have to do something immediately. I think you indicated that this would be level one of your three support programs. I'd like you to elaborate a bit more on that.

    Also, I would like your recommendation concerning low catches. Where I come from in particular, there's a great need for a buy-out program. Some are indicating that fishermen need to be part of the buy-out program. Well, in our area it's a major expense to get into the fishery and a major job to survive at this time, so I have great difficulty accepting that type of proposal.

    I'd like you to elaborate on that, starting with the level of support to deal with the family operation and what will happen, and then what needs to be done, if you get time, with support for more exporting and that type of thing.

    With respect to the safety net, the federal and provincial governments and the industry must get down to work. However, this is more of a medium and long-term solution, because it takes time to develop security programs. Witness what is happening with the talks on the agricultural industry.

    Excuse me, but the problem we have is right today. In my area, fishermen are receiving close to half of what they received previously. It's not long term but next week that they have the problem.

    You are quite right. We blame the provinces and the federal government for not heeding past recommendations. We would not be in the mess we are in today, as far as medium- and long-term support programs are concerned.

    As I was saying earlier, the employment insurance program has been around for 55 years. Over the years, I don't think many people have stopped and wondered about the advisability of putting in place other programs.

    Having said that, we are now in the midst of a full-blown crisis. We are asking for a multi-level support program, one to which the federal government should contribute $100 million. A federal-provincial commission should be set up and the provinces that want to contribute in some way should be able to do so. This federal-provincial commission would be made up of representatives of the federal Department of Fisheries and Oceans and of each provincial fishery department.

    You're not talking about loans, though; you're talking about a federal input. Is that correct?

    I'm talking about a one-shot $100 million aid program. That would mean about $7 million for Quebec. Each provincial commission should have the flexibility to attend to their respective priorities, since the reasons favouring rationalization vary from one province to another. In terms of spending the $100 million, we should have a certain amount of flexibility when it comes to spending the money, which should help us cover part of our costs. In my view, we would be penalized by the rules of international trade if we decided to provide one-shot assistance to the industry and to the lobster fishers.

    Talks were initiated in the agricultural sector and the subject of the fishery was also on the agenda. However, no agreement was reached and the country is not likely to agree on cuts to agricultural subsidies any time soon. International trade rules are cited as one reason for not helping out the lobster industry at a time when the industry is threatened with extinction. This obstacle must be overcome. This is a $1 billion industry that requires a direct injection of $100 million in federal funds.

    I can appreciate that investing in economic development is not a bad move. Tens of millions have been allocated to the provinces for that purpose, but it isn't enough. That is not going to save our industry. Quite often, the money does not reach its intended target. Marketing is handled by agencies. Despite my very pessimistic projections, if you really want to make sure that the resource is not seriously threatened in the medium and long term, as we are seeing with other species, then we need $100 million to be divided up among the federal-provincial commissions. That is what we really need in the short term.

     Do you have an intervention, Mr. Andrews?

     How much time do I have?

    You'll have three minutes.

    On this $100 million investment that you're talking about, you seem to say you don't think it should go towards a buy-out as such. Would it just be an infusion to allow the fishermen to get through this year? What investment, other than to subsidize the fishermen for this particular one year, would that $100 million cover? I'd like you to talk a little bit more about the rationalization, because we've been hearing many times that it's important to get some people out of the industry so that those who are left in the industry can make a reasonable living in the years to come.

    The rationalization process has come a long way in all of the provinces, including in Quebec's Gaspé region. While I can appreciate that this is an important solution, it is not the only solution. Of course, people who want to rationalize their operations need to be helped. I support that recommendation. However, we must not forget those who have made an effort to overcome their problems. We need to look at what works, not just at what doesn't work.

    If we want to please those who advocate rationalization as well as those who favour stabilization, the people who are grappling with a crisis that is tied to economic conditions, not one that is structural in nature, then the federal-provincial commission that I suggested be struck—you can call it whatever you like—in each province must be flexible when it comes to allocating funds solely for rationalization purposes. If a province decides to divide up the funds into equal shares because its fleets are in a better position, from a structural standpoint, have made some efforts and have followed the FRCC's plan, then these people should not be penalized. It is important for that reason that the funds not be used solely for rationalization. The federal-provincial commissions must have some flexibility when deciding how the funds will be used.

     Thank you.

    Monsieur Blais.

    Thank you very much, Mr. Chair.

    Good morning, Mr. Poirier.

    I want to begin by asking you to share with committee members your impression of last Friday's meeting in Moncton. It was my understanding that the meeting was supposed to be a kind of summit where participants would examine solutions. How would you say the meeting went?

    To be honest, and I think I've always been honest in the past 25 years in this business, I would have to say that I was disappointed with the meeting. First of all, let me talk about the organization. I have attended many committee meetings, a number of which were organized by the federal government, specifically by DFO. Eventually, I stopped attending these meetings, quite simply because there was no opportunity for us to speak at these gatherings. By us, I mean Quebec.

    We in Quebec are always required to attend meetings in certain Maritime provinces. We're happy to go, even if it isn't easy to get there and it can be quite costly. However, meetings should be run in a respectful manner. Here, that is the case. Everyone has a place at the table and witnesses feel that they command the committee's respect. However, at the meeting held in the Maritimes, the room was full and we were left wondering what some people were doing there. Three of us attended the meeting on behalf of the Quebec industry, and there was no place for us to sit at the main table. We had to find seats at the back of the room. I was not able to get a word in. I'm not someone who tries to grab the microphone. The three of us were representing the Quebec industry and there was no proper place for us at the table.

    I feel there was considerable room for improvement, from an organization standpoint. The number of speakers should be limited. When the meeting is close to a city like Moncton, the room fills up with people and Quebeckers have no room to sit.

    The meeting organizers said they were there to listen to us and in that respect, they did make an effort. However, the experience was less than satisfactory. As you surely must have heard, toward the very end of the meeting, representatives of the various organizations got up and left because they were disappointed to hear the minister invoke international trade to justify her actions and refer primarily to the representations of the industry that wanted no assistance to be provided to lobster fishers. That is what we found most disappointing of all.

    As I recall, there have been things said in the past about free trade and international trade. Unfortunately, this is not the first crisis that the industry has faced. There is some history here.

    Can you refresh our collective memories and talk to us about some of the other times that international trade has come into the picture?

    The industry faced a somewhat less serious crisis in 1990, but received help, that is the Quebec lobster fishers received some help. Yet, the issues of international trade and free trade were front and centre at the time. The industry finally did get some help and there were never any penalties.

    I'm having a lot of trouble wrapping my head around this issue. As you well know, every other country helps its industries. In the United States, the industries benefit to the tune of billions of dollars. That goes for the banks as well. They need to come up with a different argument than this one.

    Mr. Poirier, what kind of assistance was provided to your industry during the 1990s?

    I know that assistance was forthcoming from Quebec. I'm most familiar with that. Direct assistance was provided to cover some costs associated with running a business. For instance, fishing boat insurance premiums were partially paid. One-time operational assistance was provided.

    We are in the midst of a crisis, and I am not asking the government to prop up fleets that are not operational or are not making any kind of effort to be profitable.

    Will you concede, as I am prepared to do, that unlike a free trade enterprise, it's not a matter here of selling lobster for a cheaper price? The price has already been set and it is not high enough to ensure businesses' viability. In that respect, the free trade agreement should not be a consideration.

    No, and let me tell you something that you probably know as well as I do. Even though the lobster industry is comprised of 10,000 small fishing operations, buyer concentration is a major issue. In the United States, two or three Boston families control everything. In Quebec, the industry is controlled by two or three large chains. That is a fact. So then, buyer concentration is a major issue.

    You can rationalize all you like, you still have to deal with these people, whereas that was not the case in 1990, when we were in the midst of a crisis. My fishers were seeing a 7% shortfall in production costs. I am talking about operating costs, not including wages. However, they did not have to contend, post crisis, with buyer concentration.

    This difference in this case is that a 15% shortfall in operating costs is transferred directly to the fishers. Once the crisis abates and rationalization has occurred, the industry will still need to contend with buyer concentration, which was not the case in 1990. That is the difference. That is why I maintain the industry needs one of two things: either money or regulatory measures.

     Thank you, Monsieur Poirier.

    Mr. Harris.

    Thank you, Mr. Chairman.

    Mr. Poirier, thank you for your remarks.

    I'm interested in the fact that in the Îles de la Madeleine we're dealing with a short-term crisis, obviously a price crisis. There are really only two ways to deal with that. You've got to get money into the hands of fishermen either by price support or income support, or through another mechanism like EI.

    These are my two questions. Number one, do you see any way of doing something through the EI program, by modifications or changes? And number two, looking at the agriculture industry and the occasional price supports that exist there, what aspects of that model would you see potentially being applicable to lobster prices? And three, while you are making notes there, do you know if in Maine, where they have a big lobster industry as well, the Americans are doing anything to support their lobster fishermen? Obviously they must be affected by the prices too.

    Fishers in the Magdalen Islands or in Quebec may not have the same concerns about employment insurance. Obviously, measures aimed at supporting fishing activity would alleviate the costs associated with the wages of fisher helpers. These wages represent a major expense. Consequently, any measure that would help fishing business owners to cover the wages of their fishing boat crew would be appreciated in Quebec and the Magdalen Islands.

    With respect to income and price security, the fishers of the Magdalen Islands have made an effort, in so far as the FRCC is concerned. In our minds, it is clear that this crisis is tied to economic circumstances that are specific to the Magdalen Islands. We hope that new intervention measures will be applied in the future. First and foremost, we want to emerge from this crisis situation in the short term, but any new measures should address the situation in the industry in the short, medium and long term. Parallel action is required. For that reason, I would like to see a wide-ranging study undertaken. I'm not necessarily calling for a commission of inquiry, but rather for a commission that would have a mandate to examine the whole issue of income security in the industry. We have seen similar commissions in the past. It is truly unfair that our fishers are being treated differently, even though they are entitled to employment insurance.

    This could, in my opinion, be one way of dealing with the situation By no means am I calling into question employment insurance.That program is greatly appreciated. Nevertheless, I believe additional measures can be considered to further take into account the plight of fishing operations. Employment insurance is a comprehensive income security measure that is not directly tied to business profitability. For that reason, additional programs or measures are needed. They may not be of the same magnitude as those introduced in the agricultural sector, but we are not asking that they be.

    While some have always believed that we were asking for similar consideration, that is not true. In any case, we do not compare ourselves to the agricultural industry, where programs have been affected by major inflation and have had to be reviewed, and rightly so in my opinion, because of overproduction. Farmers started to produce too much. The situation is very different in the fishing industry where a resource is harvested. The “pie“ is clearly defined. Overproduction is impossible. It's different for people who grow products and who may over-produce, and for financial aid programs that are subject to inflation. We are not in this kind of situation, and that is an advantage for us.

    These programs are not free. They must rely on the contribution of fishers. Our ability to invest in these programs is more limited than is the case for farmers. So then, any programs targeting our industry would not be costly, compared to ones designed to help the agricultural industry.

    Finally, as far as the Americans are concerned, unfortunately I cannot give you a specific answer to your question. My knowledge of what transpired is fairly limited. I do know that funds were allocated to certain parties, but from what I understand, the money was provided by oil companies that were helping communities as part of certain programs.

     Thank you, Monsieur Poirier.

    Mr. Weston.

    Thank you, Mr. Chair.

    Mr. Poirier, I am an MP from beautiful BC. I am also a great fan of the other “belle province“ and I am delighted to welcome you here today.

    After listening to the testimony of several individuals who have dealings with the government, I get the sense that lobster fishers are pretty much the same as other fishers. They are not necessarily advocating one across-the-board solution. One woman who testified before the committee said she was opposed to any solution that would involve a slew of new regulations. When a group deals with the government, it is natural for it to seek out a solution that will affect all of its members.

    I also noticed that there was no broad marketing plan in place for lobster fishers. When questions were asked about how the Chinese or Asian market was being handled, I was not clear to me whether all project participants were getting the best possible results for their members. There seems to be a conflict between the individual, and the group.

    In your opinion, how could problems like this be resolved?

    You are right on the money with your comment about individuality. Obviously, fishing is a very individualistic industry and that is one of my greatest regrets. If the 10,000 lobster fishers from villages that are dependent on lobster fishing presented a united front, then they would be a force to be reckoned with. Just look at the Fédération des producteurs de lait du Québec and at other powerful federations. I lament this state of affairs.

    You spoke about the marketing efforts targeting other countries. There are, however, problems other than the fishery per se. Our region does not have any air transportation infrastructure. We do not have the proper infrastructure to bring a quality live product to market quickly. Add to this the glaring problem I spoke of earlier, namely that Boston is the trading hub of the lobster industry. Until now, very little effort has been made to get around the fact that everything is concentrated in Boston. Regardless of its provenance, the product is shipped from Boston to Europe. So then, the product is always American, even though it may come from Canada, from the Magdalen Islands. It is difficult to avoid this trading hub. I am not saying that it is impossible, but a very broad commission could be mandated to examine these important issues.

    As for regional differences and the search for a common solution...We have made a collective effort and there are some positives to report. On examining the report of the FRCC, it becomes clear that the state of the fleet and the lobster fishery of each province are similar in many respects. While a minimum amount of latitude is required, particularly in terms of a federal-provincial program, the industry shares many common characteristics. People who attend the different gatherings or meetings like the one held recently in Moncton may hold different views. Obviously, representatives of organizations do not have absolute control over their members. Our associations, at least the ones in Quebec, are staffed by volunteers. People are free to express their views in committee.

    I have heard answers like this before. With respect to marketing, I'm not sure what the solution is. Is it up to each fisher, to associations like yours, or to the government to find the solution? I have yet to have that question answered clearly.

    Let me give you an example. The agricultural industry in Quebec is very powerful and very well organized. The government has shown its willingness to support the industry, going back all the way back to the 1940s and 1950s. More recently, in 1972, the industry has become unionized.

    Agricultural producers speak with one voice. However, in 1972, the government granted them the power to speak with one voice. From that moment forward, they developed programs and joint plans with marketing options. The Fédération des producteurs de lait du Québec therefore can afford the luxury of marketing its products on television and elsewhere, because it has the capability to raise funds and take action.

    Between you and me, what we have managed to accomplish with volunteers is nothing short of miraculous. Everything we have accomplished, we have done with volunteers. Any advances that the government and DFO have made have come through their work with our representatives. The problem is that we are not a powerful lobby, even though our representatives do have an opportunity to address this forum. In fact, our representatives are not officially recognized.

    Let's take Quebec as an example. What if we were to go ahead with marketing boards or whatever. We face a problem that the agricultural industry doesn't have, since it is a provincial responsibility, first and foremost, even though the federal government is involved to some extent. Marketing boards operate at the provincial level. However, because the fishery is a federal responsibility, marketing boards wouldn't work.

    That is why I say that we could focus on developing aid and income security programs for the medium and long term, and on harmonizing our operations. We could also work at harmonizing provincial and federal regulations.

    At some point, we need to look at what we can do, and we need to try and sort out who is responsible for what exactly. We also need to try and understand why, if one party can do something that is good for the industry, the other party doesn't let it. We need to make an effort in that regard, because there are some serious shortcomings. Even if the will did exist...We have a plan.

    Agricultural producers can limit production and decide, for instance, that they will produce no more than X litres of maple syrup this season. They can do that, because agriculture is a provincial area of responsibility.

    Marketing boards can do what they like, such as negotiating prices. However, I cannot tell my fishers to fish four or five days a week, because the fishery falls within federal jurisdiction.

    There is no agreement in place. We tried to negotiate a federal-provincial training agreement. In Quebec, we have the Bureau d'accréditation des pêcheurs et des aides-pêcheurs, but we do not have an agreement with the federal government. We would need to—

    Do you agree with—

    Mr. Weston, I'm sorry, your time has expired.

    Could I have a yes or no answer?

    Without this solution, do you think the crisis will continue?

    I think it will be terribly difficult for us. As I said earlier, this crisis is more serious than the one we faced in 1990.

    Thank you.

    Thank you.

    Monsieur Poirier, thank you very much for coming today to meet with our committee. We appreciate you taking time out of your busy schedule to travel to Ottawa and to meet with us.

    The committee will take a short recess while we go in camera for the next portion of our meeting.

    [Proceedings continue in camera]