FOPO Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 6, 2001

• 0909

[English]

The Chair (Mr. Wayne Easter (Malpeque, Lib.)): I call the meeting to order and welcome this morning representatives from the Department of Fisheries and Oceans.

There was a request, especially from some of our Newfoundland colleagues, to hold a hearing into small craft harbours and marine infrastructures. So with us this morning we have, from the Department of Fisheries and Oceans, Mr. Bergeron, the director general of small craft harbours; Yolaine Maisonneuve, director of harbour policy and program planning; and Micheline Leduc, director of harbour operations and engineering.

Welcome. The floor is yours, and then we'll go to questions.

Mr. Robert Bergeron (Director General, Small Craft Harbours, Department of Fisheries and Oceans): I have a short opening statement, if you don't mind, Mr. Chairman.

• 0910

Good morning. I'm pleased to be here today to discuss DFO's small craft harbours program. As you know, this program provides vital support to Canada's fishing industry, as well as many small communities across the country.

The program is responsible for about 1,400 harbours across Canada—both recreational and fishing harbours. In all, small craft harbours' facilities house and service about 30,000 fishing vessels and 20,000 recreational vessels.

In addition to the fishing and recreational boating communities, these harbours also provide an important service to thousands of small to medium-sized marine enterprises and resident communities directly or indirectly reliant on marine commerce.

By extension, these harbours protect millions of dollars in user-business assets, while allowing safe operations, preventing coastal erosion and damage, and offering refuge for mariners in distress. Often this DFO infrastructure is also the only visible federal presence in remote communities, and in many locations, offers the only public access to waterways.

The majority of our harbours, close to 1,100, are fishing. Over 850 are active and are used almost daily by fishing communities.

[Translation]

In total, we have over 4,785 different structures, including wharves, breakwaters, launching ramps and channels all at the fishing harbours that we own. Active fishing harbours alone account for 95% (or 4,542 structures). The replacement value of these 4,542 structures at active fishing harbours is estimated at $1.9 billion.

As you can appreciate, it's an immense task for DFO to care for and maintain all these assets. It is no secret that over the years, we have faced challenges and many of our structures are presently in poor condition.

As part of overall government reductions, SCH Program spending levels have been curtailed by approximately $70 million compared to that of 10 years ago. Given this shortfall, SCH has not always been able to carry out adequate maintenance. Twenty- one per cent of our active fishing harbour assets are currently in poor or unsafe condition. These assets need immediate repairs, and many are currently barricaded or subject to various kinds of usage restrictions. An estimated $400 million is needed to bring our active fishing harbours to acceptable condition.

[English]

What I've talked about are commercial harbours. I must also stress that DFO has absolutely no budget to maintain the recreational harbours.

In 1995, through program review, the government confirmed a previous direction that recreational harbours had to be divested. Between the 1980s and 1990s, $18 million was reduced in the small craft harbours budget, with no funds set aside to pay for the cost of divesting these properties. Therefore, any divestiture had to be funded from the remaining budget.

We had to find new ways of delivering small craft harbour services. It became clear that the asset base was far too large and geographically dispersed to allow DFO to manage, operate, and maintain everything efficiently. DFO had no choice but to take a number of measures to allow the small craft harbours directorate to focus its limited resources on the maintenance of essential harbours.

First, we changed how fishing harbours were managed and operated. The harbour authority program, introduced in the late 1980s, was accelerated in the mid-1990s to become a wide-scale national program. Under the program, local communities manage the day-to-day operations of the harbours, set the level of services to the needs of the users, collect fees, and generate revenues to address operating and routine maintenance costs of the harbour.

• 0915

Because they are independent entities, harbour authorities can often raise funding from non-traditional sources to contribute to either the development or major repairs of their harbours. Good examples of such successful harbour authority management are in Port de Grave, Newfoundland, and Gibsons Landing, British Columbia.

[Translation]

The HA Program has been a great success. While our ultimate goal is to have all active fishing harbours under HA management, 605 core fishing harbours—or 70% of all active fishing harbours—are presently managed by Harbour Authorities.

Harbour users are also pleased with the new approach. A recent survey showed that they find harbour conditions—as well as the quality and quantity of services—much better under HA tenure.

For DFO, HAs have become essential partners in the provision of harbour infrastructure and services to Canadians. In recognition of the importance of the Harbour Authorities, a National Harbour Authority Advisory Committee was created last year to advise DFO on small craft harbours program policy matters.

Quite honestly, it would be unthinkable for DFO to return to the previous systems of managing harbours without local participation.

[English]

The second course of action we took to address the shortfall was to focus DFO's maintenance resources on active fishing harbours that were independently managed by harbour authorities, with priority given to safety-related repairs or repairs essential to the good functioning of a harbour. No funding is budgeted for harbours not owned by DFO.

Of course, we are aware that several fishing communities across the country where the small craft harbours directorate is not present need financial assistance for their community-owned aging and deteriorating harbour infrastructure. But again, this is an area outside the responsibility of DFO. Our focus is only the core fishing harbours we own. We define core harbours as those active fishing harbours critical to the industry, where local users and stakeholders have agreed to create a harbour authority to manage the facility.

[Translation]

The third area of effort has been to reduce the overall size of the asset base. We started with low-cost disposals without any special outside funding. Through this effort, we successfully reduced the number of harbours by over 35% from 2,137 to 1,380. To do this, we invested $32 million over the last five years, which came out of the regular maintenance budget for fishing harbours.

To dispose of the remaining recreational, derelict and inactive fishing harbours, last year DFO obtained $24 million over two years. With this funding, we reduced the inventory by nearly 60 harbours and anticipate being able to finalize reduction of the inventory by a further 110 harbours in the coming months.

Also, an additional $40 million funding was received last year to address rust-out. This is a positive first step.

[English]

At the May 2001 meeting of this committee on the department's main estimates, members asked that the minister look into providing additional funds for both harbours and harbour authorities. The department has initiated work to address such a request. Over the next year, the small craft harbours directorate will be reviewing its mandate and assessing its related financial needs and how services are delivered. This will provide the minister with the necessary information to make the appropriate decisions.

In conclusion, it is clear that the small craft harbours program is facing significant challenges to meet the present and future needs of Canada's fishing communities. However, it is also clear that the government has recognized our needs, as the recent increases in special funds have shown.

• 0920

I am confident that with everyone's support, including harbour users and the harbour authorities, the future of the program looks much better.

Thank you for your interest in the small craft harbours program.

The Chair: Thank you very much, Mr. Bergeron.

Before I go to Mr. Cummins, I wonder if you might be able to explain first how DFO operates in this regard, or the small craft harbours directorate. On the east coast we find that most small craft harbours are DFO's responsibility. On the west coast, we have difficulty figuring out what the small craft harbours directorate is responsible for and what Transport Canada is responsible for. There seems to be a different approach taken on the west coast versus the east coast, or that's the view of some of us. Can you explain? Is there a difference? Who's responsible for what on the west coast, versus who's responsible for what on the east coast?

Mr. Robert Bergeron: We have the same responsibility for small craft harbours on the west coast as we have on the east coast. Of course there are many more harbours that we own on the east coast than on the west coast. Our approach toward core harbours on both coasts is exactly the same. Core harbours are harbours that are actively used by the fishing communities and there are harbour authorities in place. We intend to maintain and keep these harbours on the east coast, as well as on the west coast.

On what Transport Canada is doing with their harbours on the west coast versus on the east coast, I can't speak to that with real knowledge. But from our perspective, the situation on the west coast is the same as it is on the east coast.

Structures are usually different. We find much lighter structures on the west coast than on the east coast, but it's largely a factor of geography and weather on the west coast. That explains why we have more floating docks on the west coast than on the east coast.

The Chair: Thank you. There's just one other question before I turn to John.

Can we obtain a list anywhere of what are considered core harbours?

Mr. Robert Bergeron: Yes, we can provide a list of what we consider to be core harbours.

There's one thing I need to explain. We now have, I think, 1,069 fishing harbours in total left. Of that 1,069, I think 861 are active harbours that are used on a regular basis by the fishing community. All of those harbours in between, which are derelict or not active, we clearly intend to divest. Of the 861, there are approximately 735 harbours that, for the time being, we consider to probably be core harbours. I say “probably” because our objective is to have all 861 of the active harbours managed by harbour authorities, but we're not sure if all the communities involved will be willing to assume the responsibilities for the management of their harbours.

Our best guess so far, based on consultations we've had with communities, is that at least 735 of those active harbours will definitely be managed one day by harbour authorities. The remaining 126 harbours are active, but we're not sure if they will end up being part of the core harbours because we haven't really had consultations with the local communities about the possibility of them assuming responsibility for the management of their harbours.

But DFO's policy is that in order for us to maintain a harbour as part of the core-harbour system, it has to be managed by a harbour authority. There are 126 harbours where the status is undetermined, from our perspective.

The Chair: Thank you very much. That's good information.

Mr. Cummins.

• 0925

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

I have a little bit of a problem with your comment that the approach is the same on both coasts. I think that quite often on the west coast these harbours are privately operated, as compared to the east coast. I've had a commercial vessel for over 25 years, and I don't think I've tied up yet in a government harbour; I've paid my own way. But that's beside the point.

The issue here is fairness. We have some concerns in some of the harbours that we have in the west coast, some in my own riding, about our inability to get funding, for example, for dredging purposes. I have before me a series of announcements, and before I get to them I want to comment on what you say on page 4 of your document, where you say that “No funding is budgeted for harbours not owned by DFO”. And in the next paragraph you say “But again, this is an area outside the responsibility of DFO”. And most importantly, you say “Our focus is only the core fishing harbours that we own”.

The press releases I'm referring to were press releases from a year ago, and they have to do with a whole bunch of money that was allocated to dredging in Ontario. I'll just give you a smattering of them. MP Limoges announces federal aid for dredging to South Port Sailing Club, and it's signed off by Mr. Lacey of the small craft harbours directorate. Another involves MP Jackson, and $100,000 given to the Meaford harbour for dredging. MP Speller announces $15,000 plus will be given to Shady Acres marine and trailer park on Lake Erie. MP St. Denis announces $3,700 to the Whitehaven Resort and marina on Lake Huron.

But we have a major fishing harbour in my constituency, and we can't seem to get any money. I'm speaking in particular of the Steveston harbour, which at one point was the largest commercial fishing harbour in Canada, and Ladner harbour, which is as well a very significant harbour, and we can't get any money for dredging. In Steveston it's to the point where vessels are going aground at low water, and yet no federal funding is available for dredging. I want to know why there is this difference. Why can we offer it to the sporties in the Great Lakes and not provide commercial operators on the west coast with some relief when your stated objective is commercial operations?

The Chair: Mr. Bergeron.

Mr. Robert Bergeron: It looks to me like all the examples you refer to are examples that are funded under the low water levels on the Great Lakes. This has nothing to do with small craft harbours; this is a separate funding. This is a special program that was authorized by the minister in order to address the low water level issues on the Great Lakes. In fact, the purpose of this was to actually do dredging in private marinas or whatever, to help them with dredging. I think the department was paying one third of the cost of the dredging of those private marinas. But this has nothing to do with small craft harbours.

This being said, in small craft harbours we'll dredge fishing harbours when it's necessary, but we dredge within the water lots that we own on our property. We don't dredge outside of our property, but we do dredging from time to time, as I say, when it's required, including on the west coast. I think in recent years we've done several thousands of dollars in dredging at Steveston. We're also aware that there is a request right now from Steveston for additional dredging in the amount of about $200,000. Providing this funding to Steveston is something we are examining very seriously right now. So this is something we are examining.

• 0930

Mr. John Cummins: The issue here, from the west coast point of view, is that maintaining the channel into some of these harbours is as important as just maintaining the facility at the harbour. You can have a nice hole at the harbour, but if you can't get into it you have a problem.

Certainly I know in the chairman's riding, in ridings in P.E.I., there's a problem with silting and there's always a fight to get dredging done, but it's accomplished. On the east coast you have the issue of ice-breaking. Those services are offered to keep harbours open. But here we have a problem with dredging: we need dredging done to keep the harbours open, and we can't seem to get it. I just don't understand the difference.

The Chair: Mr. Bergeron.

Mr. Robert Bergeron: Thank you, Mr. Chair.

I don't dispute the fact that dredging channels leading to harbours, and sometimes to several harbours, not only the harbours owned by DFO, is something important, but this is something that's outside the mandate of this program, the program of small craft harbours.

As I explained in the opening statement, the budget is limited; it's inadequate just to address what we presently have to dredge the structures, the channels, to dredge the basins within our harbours. And if we were to divert some of that funding to dredge outside the channel, we would aggravate the problem with our own structures, which is already a grave problem. So this is why the policy is that we strictly limit the investment of this program to structures we own, including the channels or the basins that we own within the program.

Mr. John Cummins: But there's a problem within government. It's not a problem of your making or your administration. What's happened in this dredging, for example, is that you've cut the dredging and allocations to these harbours, and to the Fraser River in particular, yet at the same time that funding for dredging has been cut, the Department of Environment puts an ocean disposal fee on the harbour authorities who conduct some dredging on their own. So government cuts funding and then it imposes a tariff on them. Isn't that a bit of a double hit?

Mr. Robert Bergeron: In small craft harbours, when we do dredging we have to follow exactly the same laws and pay the same fees, because we're subjected to exactly the same environmental rules as anybody is.

The Chair: John, one quick last one.

Mr. John Cummins: I have one here on the issue—and maybe we'll have to come back to it after—of abandoned or derelict vessels. The minister did provide a fund for disposing of a number of these vessels, but there are still problems with that. You may or may not be aware of this, but is there anything on the horizon that would give the harbour authorities more ability to deal with abandoned or derelict vessels?

Mr. Robert Bergeron: The minister has provided some funding to harbour authorities in B.C. to help with disposing of derelict vessels. I think it's in the order of $165,000 that was provided for this purpose. The funding was established on the basis of a survey done by the harbour authorities on the west coast as to the number of derelict vessels they wanted to get rid of. I think there were about 28 in total that they told us about.

I am told that this seems to be a success. Some 18 vessels have been disposed of as we speak. And I'm told that we may be able to do what we need to do for much less than the $165,000 that was devoted to this exercise.

I know there were was some discussion that there are some rigidities in the system and that harbour authorities need more flexibility to be able to get rid of those derelict vessels. I understand that the minister has written to his colleague in the transport ministry to try to provide more flexibility to harbour authorities with this problem.

• 0935

The Chair: Thank you, Mr. Bergeron.

Mr. Roy, if I could, I'd like to let Mr. Stoffer in for four or five minutes, then come to you, and then we'll go to the Liberals. Mr. Stoffer has to leave in five minutes.

Mr. Stoffer, you're on.

[Translation]

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Thank you, Mr. Roy. Thank you, Mr. Chairman.

[English]

I notice Micheline Leduc's here from harbour operations and engineering. I assume engineering and harbour operations requires or at least deals with dredging as well. Is that correct?

Ms. Micheline Leduc (Director, Harbour Operations and Engineering, Department of Fisheries and Oceans): Yes.

Mr. Peter Stoffer: As a follow-up to Mr. Cummins' question regarding the dredging, I have a harbour in Jeddore in Nova Scotia called Baker Point, and they've been asking for dredging for a long time. As we speak, that harbour is still under the authority of the small craft harbours directorate. They do millions of dollars worth of business out of that harbour. Lots of jobs are dependent on it. But if there is no dredging done on that area, the harbour may have to shut down, because the ships won't be able to get in and out of there.

Why is the process so difficult? Any questions that we ask on dredging and replies I've sent to the minister all come back saying you don't have the funding, it's not there. Yet it's still under your authority.

The Chair: Madam Leduc.

Ms. Micheline Leduc: Thank you.

In East Jeddore, I don't have the familiarity of the whole file here, but if I recall, I think it comes back to what Robert Bergeron was just saying: that the channel area the locals would like to see dredged is outside the jurisdictional boundaries of DFO. I think that is the main reason why there has been this situation at East Jeddore. However, I'm aware that there have been some negotiations ongoing with the locals to take over responsibility of the wharf.

Mr. Peter Stoffer: That was my next question.

Ms. Micheline Leduc: I think those negotiations are ongoing and I think a settlement is about to be reached. I could check into that when I get back.

Mr. Peter Stoffer: You're right, actually, and that was my next question.

Mr. Ed Gibney, who does a great job for you down in Nova Scotia, by the way, has indicated to the new authority that's being set up with Baker Point that there's no more funding. In order to take over that harbour or the wharf, they require approximately $40,000 worth of upgrade. This is on an engineer's report that the company and the authority have done together.

All they're asking for from DFO is to go halfway on it. We will put in $20,000 of private money if indeed small craft harbours will put in another $20,000. They indicated to me yesterday at 5 p.m. that Mr. Gibney has indicated to them that there's no more funding in the program for this. Yet Arichat in Cape Breton just announced a $750,000 project in divestiture of that particular harbour. Again, there can be $750,000 up in one particular harbour in Nova Scotia, and these people are willing to go halfway with you, so why would Mr. Gibney indicate that? If indeed there is no money, will there be an indication that there will be money coming?

Ms. Micheline Leduc: We're far into the fiscal year right now, so it's not surprising that at this time of the year there is no money. The Arichat money was approved early on when our budgets were approved, so that money is being spent, as well as that for many other projects that were approved at the time. I think $20,000 may not appear like a lot of money, but at this time of year it may be just a little bit too much, considering the budgets we have left to do our work.

I'm sure that next year we will have a very positive.... I can't say that it will be part of our program next year at this time. We're going to initiate our budgeting exercise soon. But we'll make sure that we look into it and ensure that the East Jeddore community is well served. I think they're doing their share with the $20,000 they're putting up.

I'm going to be speaking to Ed Gibney to find out what the situation is and see what the finances are for that particular region at this time of the year, and we'll see what we can do about it.

• 0940

The Chair: Thank you, Mr. Stoffer.

[Translation]

Mr. Roy.

Mr. Jean-Yves Roy (Matapédia—Matane, BQ): Thank you, Mr. Chairman.

My question is for Mr. Bergeron, whom I would like to welcome, along with the members of his group.

Mr. Bergeron, without stating it explicitly, you implied, in your presentation, that as far as you were concerned, investments made by the federal government in the past, that is, the cuts that you were subjected to, as well as present investments, are clearly insufficient to meet the needs and respond to present demand; nor is it enough to correct the situation in many small craft harbours.

Mr. Easter asked you earlier if you had a list of the small craft harbours that are still operating. This is my question. In view of the budgets that you have, you must have some type of plan in mind for the small craft harbours. No doubt you have priorities for these harbours. That is my question. I am not asking you to take into account the more than 1,000 harbours that are operational; what I would like to know is if you have any type of crisis response planned for the small craft harbours. Which ones do you think are in the greatest need of assistance and would it be possible to have a planning list, to give us an idea of your crisis response plan for the upcoming years? We have the impression at this time—and Mr. Cummins mentioned this—that announcements are being made left and right with no planning in mind.

If we look at the department's summary of expenses for small craft harbours, we see that $71 million went to Newfoundland, $8 million to British Columbia, and $645,000 to Alberta. I can understand that because they have fewer harbours. But there seems to be no long-term planning. What I would like to know is if you have undertaken any long-term planning.

There is another reason why I have some doubt as to the existence of any long-term plan; you yourself said that you would have some work to do in properly informing the minister of your needs, something that you intended to do, following the committee meeting last May, so that he might be made well aware of your crisis response priorities. Do you have a three-year plan or a five-year plan? What type of planning do you do? Could we also have that?

The Chair: Mr. Bergeron.

Mr. Robert Bergeron: Let me say that there is no easy answer to your question. Of course, we do have plans for the small craft harbours. We have a good idea of what we want to accomplish over the next few years, but it all depends on the nature of the projects.

In the case of large-scale projects, that is, anything valued at more than $1 million, that would be authorized through vote 5 and passed in Parliament, there is a capital investment plan which covers a three-year period, but which is updated annually. You must understand that there are constant unplanned occurrences that affect small craft harbours and force us to rework our planning in order to keep it current. A project that might have been on the books as a priority for a particular year might end up being delayed because of an accident or a storm. When that occurs, we have to take the money and use it for something else. So our priorities are constantly being updated. But we still have an investment plan, which is usually approved for a three-year cycle, and updated annually.

Now, with respect to projects of under $1 million, the planning is done by our regional offices. There is very little involvement from Ottawa; the regional offices are free to establish their own priorities. And of course, they have their own list of projects. When I stated a figure of about $400 million in my opening remarks, that was based on the list of repairs that we feel must either be done now or will have to be undertaken over the next five years. Therefore, we are aware of the repair work that remains to be done.

Each year, our regional employees set project priorities. Depending on available budgets, they decide which projects will go ahead that year depending on the relative urgency of each project.

• 0945

Of course, the process is reviewed the following year. Each year, they have an idea of what they wish to achieve in the coming years, but the process is nevertheless reviewed on an annual basis. It is only at the beginning of the financial year that we know with certainty which projects will go ahead, because, as I said earlier, it is only in the spring, after most facilities have been inspected, that we can pinpoint which projects are a priority for that year. It is also at that time that we find out what our budgets are.

For instance, when we spoke two years ago, we did not know at the time that we would receive $40 million in additional funding to address the problem of aging assets. That represented, in fact, additional funding. It meant we could carry out more projects and get some repair work done which we had planned on completing at some later point in time.

Therefore, apart from small craft harbours, we have a fairly good idea of what kind of condition our facilities are in, which ones desperately need to be repaired and when. Budgets are prepared each year based on that information.

Today, we only prepare an annual budget for projects, except projects costing over $1 million and which call for significant funding. For these projects, a three-year budget is prepared; it is a separate process which is carried out by the department. In other words, the department prepares a plan for significant capital expenses. Small craft harbours are only one part of it, and the plan covers three years, but it is updated annually to take into account the priorities established at the beginning of each year.

Mr. Jean-Yves Roy: I would like to get a copy of this plan.

My next question concerns harbour authorities. We hear on a regular basis from port authorities that it is very difficult for them—this is particularly true for my region—to develop a relationship with the Department of Fisheries and Oceans.

My question is as follows: do you have enough staff to ensure the issue is followed up adequately with the harbour authorities which were created for that area?

Mr. Robert Bergeron: We like to think that, indeed, we have enough staff on site to keep communication channels open with the harbour authorities, but it is clear we could use more resources. Almost every federal program could do with more resources. If we had more staff on site, we could perhaps more readily access all harbour facilities, but in our opinion we have enough people on the ground.

What may have contributed to the perception that problems have arisen recently is that we have just reorganized the Laurentian region. But I think that in time harbour authorities will become familiar with the new people on site. The perception that there is a lack of access should dissipate in time. At least that's what I think.

In fact, in Quebec, we have someone, Guy Descoteaux, who is specifically in charge of liaising with the harbour authorities. His full-time job is to stay in touch with the port authorities. In fact, he is trying to set up an association of harbour authorities for the Laurentian region.

[English]

The Chair: Thank you, Mr. Bergeron.

Mr. LeBlanc.

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

[Translation]

I would like to welcome you, Mr. Bergeron, as well as your colleagues.

I would like to add something to what Peter said. In my area, the gulf area, in the Maritimes region, your staff and colleagues have done an excellent job. Be it Maurice Girouard or Charles Gaudet or Ron Duplessis, these people have helped us greatly, despite the fact that they don't have an easy job. This is mainly because they do not have the funding they need to carry out important projects, as you so aptly describe in your brief. I believe they should be congratulated, and you yourself as well, for the work you accomplish despite your limited resources.

[English]

When I first learned about harbour authorities.... I actually succeeded my father as a director of our local harbour authority in the village where we have our house in New Brunswick. He became the Governor General and had to resign from the local harbour authority, and then I became one of the local directors. I spent a wonderful three years with local fishermen and community groups, and the challenge was always not enough money. I worry that the government can set up harbour authorities for all the right reasons, but effectively offload the lack of money onto groups of volunteers who have even fewer resources than you do.

• 0950

The one thing that kept bothering me—and correct me if I'm wrong, Monsieur Bergeron—is that, as I understand, if there's work, let's say, for under $50,000 in a small harbour in my constituency, repairing, re-decking, repairing a breakwater, or even a small dredging project, you can enter into a contribution agreement with that harbour authority, and they can administer the money and organize the work themselves under your supervision and verification, but they don't have to go through the complicated tender process of the public works department. Is that correct?

Mr. Robert Bergeron: Usually it can be done through a service contract—

Mr. Dominic LeBlanc: That's right.

Mr. Robert Bergeron: —with the harbour authority. Treasury Board has given us the authority to deal directly with harbour authorities on a sole-source contract up to $40,000.

Mr. Dominic LeBlanc: Up to $40,000.

Would it not be beneficial to raise that $40,000 to $100,000? Here's why. In a lot of the small projects in my riding, with $40,000 the harbour authority themselves can go to contractors and can beat up a local contractor for a better price; they can negotiate. It's a lot less cumbersome.

I suspect, and they tell me, that $100,000 in the hands of the public works department and a tender process with engineering work that's required, and so on, will do about the same work as $40,000 in their hands. They do a lot of the work themselves. They're wonderful examples of people who volunteer. Somebody has a backhoe and somebody else has some equipment, and the community works. That's the beauty of these harbour authorities.

I'm wondering if there's not a way to increase that amount. I recognize that it has to be responsible and supervised and that the government has to be accountable for that money, but do you not think $40,000 may be too small an amount in some cases, if they could take a larger amount and really stretch it a lot further than could a large bureaucracy from Halifax?

Mr. Robert Bergeron: It's actually possible now to give to a harbour authority more responsibility than just the projects under $40,000. This can be done with the rules of major capital, vote 5 money, where we can provide a vote 5 contribution to a harbour authority to actually take care of a major project, a $1 million project or whatever. But, of course, we want to limit this only to those harbour authorities that are capable of managing such big projects and ensure that we get value for money in the end, because, as you said, we have the responsibility of managing public funds and we have to be very careful. But that's possible.

What's interesting here is that we do recognize that this is quite a promising avenue, to let harbour authorities do a lot more of the maintenance work that we now do in small craft harbours with the help of the public works department. We feel that they are capable of doing it. They can take advantage of their local contacts or whatever. They can bypass a lot of costs that we in DFO have to incur. There are definitely some interesting avenues for us to pursue.

In this vein, we are now exploring the possibility of devolving to harbour authorities the entire responsibility for the maintenance of a harbour. We would fund the maintenance, but the work would actually be delivered by the harbour authority. Of course, it's quite an objective, if you think about this, and we want to be extremely careful. We would like to try this out on a pilot basis and just select the harbour authorities that are capable and willing to do this. We don't want to impose on harbour authorities an additional burden, but if they feel that there are some advantages for them in doing this, we're quite willing to test that possibility, see how it works out, what kind of controls we as providers of public funds have to set in place, and use those pilots.

The intent actually is that we would like to have at the start of the next fiscal year maybe a few pilots, three or four across the country, where the responsibility for the maintenance of a harbour would be given to the harbour authority and we'll see how it works out. If it works out fine, then the intent would be to make this approach available to all harbour authorities. We would not force this approach on any harbour authority, but we would make it available. Any harbour authority capable and willing would have access to this way of doing business with DFO. But I'm saying it's only something that is promising right now. We want to test it out. If it works out, maybe three years down the road this is something we will have in our tool box in the small craft harbours directorate to help harbour authorities.

• 0955

We now have 605 ports that are managed by harbour authorities—about 500 different harbour authorities managing about 600 ports. They're not all at the same level of development. Some have just been created and may be barely viable. Others are quite mature. They have been in existence for more than ten years and can assume a lot more responsibility with respect to the harbours. More than that, they are quite keen to assume more responsibility with respect to them. What we're saying is we have to make this possible, but first let's check that it's doable, that we can still protect public funds by doing it.

Mr. Dominic LeBlanc: Mr. Bergeron, I would encourage you to undertake that. It's very interesting. But when you choose three or four pilots across the country, don't only use the larger harbours. One of the frustrations in my riding—and some of them operate very well.... Now, granted, they're small harbours: they're twenty or thirty inshore fishermen—some are a dozen inshore fishermen—and that represents a different challenge from a harbour in northern New Brunswick with a much greater critical mass.

But they'll be pleased to hear what you've said—that you'll provide the funding, and they'll do the maintenance. That's the challenge. They hesitate to take over the maintenance because they worry that you guys cut and run. And it's not you guys; it's that budgets have been cut.

I personally think we need to reinvest more money in harbours. I think the government should, as an infrastructure investment, increase your budget, because it goes directly to communities of high unemployment and creates work at a time when it's going to be needed. That's something I'll be working on with other colleagues.

Let me put one final question concerning your point system. Most of the fishing harbours in my riding have harbour authorities—and you're right, some are better than others—but the idea is a good one. But along the lines of what Mr. Cummins was saying, they find it difficult to get themselves on your major capital list, your large-project list.

When your priority-setting exercise involves a point system, at some point in that system there's a subjective judgment; somebody says this harbour has a greater economic impact in a community than another one. Your staff do the best they can, but they make subjective judgments, and I worry that the smaller harbours sometimes don't have an easy time getting high enough up on your list that they get some funding that would be available.

And there's a sort of contradiction there, because the smaller harbours generally don't have the revenues the larger ones do. If you take a large harbour with a hundred mid-shore boats, they can easily raise fees and raise revenues; whereas one of these smaller harbours with twenty fishermen can't raise the revenues, and yet they don't get high enough on the list. So we end up funding the rich, and the poor harbours get left off. How can we change that in your point system, other than increasing the minister's reserve?

Mr. Robert Bergeron: First of all, you're referring to the point system that is in use in the Maritimes region. All the projects between $50,000 and $1 million are submitted directly by harbour authorities to our regional office. Then they are assessed on the basis of a point-rating system. And then, of course, the highest scoring projects get the funding in the coming year. That's the way it works in the Maritimes region.

It's true I've heard complaints in the past that because the scoring attaches importance to the economic importance of the harbour, of course the larger harbours tend to get all the points, to the detriment of the smaller ones. That's a criticism we heard several years ago. But for last year's budget, the system was changed to address specifically that concern, and I think they've addressed it correctly. But if you're saying you still hear this complaint—

Mr. Dominic LeBlanc: It's inevitable.

Mr. Robert Bergeron: —it's something I guess we will have to reassess.

Mr. Dominic LeBlanc: Thank you.

The Chair: Thank you, Mr. LeBlanc.

Mr. Cummins.

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

• 1000

I find this issue about a point system in the maritime region rather interesting. I'd like to know how these decisions are made. Going back to my first question and the issue of the $15 million that was made available for emergency dredging on the Great Lakes, I'd like to know who would have made the recommendation that this program go ahead. Where did the recommendation come from?

Mr. Robert Bergeron: It came from the department to the minister, and then the minister decided to move ahead with this.

Mr. John Cummins: If you have a harbour where boats are going aground at low water, as you do in Richmond at the Steveston harbour, and if you have a harbour such as Ladner, where there wasn't any dredging done in 10 years.... In November 2000 the Fraser River Port Authority dredged about 40,000 cubic metres from the entrance to the harbour. That was one small bar, and it cost $265,000, which was more than the money from the lease revenue for five years. That expenditure is huge, especially when you don't do regular dredging. All of a sudden you're faced with this, and it has an impact on the harbour with respect to the harbour operating to capacity. I don't understand how the priorities are set when I look at these two harbours. I just don't understand it.

Mr. Robert Bergeron: Maybe I can talk to this. We do a lot of dredging in small craft harbours. I don't have the exact figures, but I'm sure that it is in the millions of dollars that we spend each year on dredging in fishing harbours we own across the country.

Now, our priorities are determined as follows. For us to do any dredging or any other repair projects, it has to be a core fishing harbour managed by a harbour authority. That's a given. That's the start. After that, priority is given to what is related to safety. If dredging is necessary to ensure the safety of users, I would think that this will become the top priority project for that region. The same would apply to the B.C. region's small craft harbours. If there is some dredging that is absolutely necessary to ensure safety, this is something they will devote the first portion of their budget to in the coming year. The same is done in P.E.I., in Newfoundland, and everywhere else; it gets the priority if it's related to the safety of the users.

The second priority is according to whether it's absolutely essential to ensure the proper operation of the harbour. If your harbour is going to be paralyzed because no dredging is done, of course we're going to dredge, and this is going to become a priority project. In fact, we do a lot of dredging each year for those purposes.

The limitation to this is, as I said before, that we dredge within the confines of our harbours. If the channel is outside the harbour, we don't dredge. It's not that we don't recognize that the outside channel needs to be dredged, it's just that it's a choice. It's a kind of a policy choice we have to make, given the shortage of funds in the budget that address the structures, channels, basins, or whatever we own in the program. If we were to stray outside that policy, it would mean that we were aggravating the rust-out of existing assets by trying to do more.

It's exactly the same situation with the unscheduled harbours. As I said in the opening statement, there are several harbours across the country where we're not present. Those harbours are community owned. Very often they were built 25 years ago with job creation money. They don't have money any more to fix those structures. We recognize that there is some use of those aging structures. They need financial help, but this is not something we can do in small craft harbours, because we don't have enough money for our own structures. Therefore we cannot, as I said, stray outside of that policy and start doing work on structures or properties we don't own. And this applies to—

• 1005

The Chair: Thank you, Mr. Bergeron.

Mr. Farrah.

[Translation]

Mr. Georges Farrah (Bonaventure—Gaspé—îles-de-la- Madeleine—Pabok, Lib.): Thank you, Mr. Chairman. I would like to welcome our three witnesses to the committee.

In answer to Mr. Roy as regards the relationship between the Department of Fisheries and Oceans and the harbour authorities, I would say to you that three people were hired recently. Their sole job is to ensure communication with the harbour authorities in Gaspé, the Islands and Sept-Îles. These people are program and service managers, I believe. So we have three new people in charge of communicating directly with the harbour authorities.

Mr. Bergeron, let's address the issue of the transfer of quays. When a quay is deemed surplus, we know that in the current situation there are communities which, unfortunately, only have perhaps three or four fishermen left. This is due to several reasons: the exodus of people from the fishery and the decrease in fishing capacity because of various moratoria, for instance. As as consequence, these communities unfortunately have very few fishermen left. Therefore, fishing may be concentrated at a quay located perhaps a couple of kilometres from there and we try to maintain it for all the fishermen who use it.

However, do you have any clear guidelines or a clear policy to determine at what point a small craft harbour becomes surplus? If this happens, several options may apply. The quay may be transferred to the community, the price of its demolition or repair may be negotiated, as the case may be, if it is to be used subsequently by the community which can buy it outright. How do you plan for these different scenarios, or what are your guidelines to help determine whether a particular fishing harbour is surplus rather than another one?

Mr. Robert Bergeron: We have fairly general criteria. On the one hand, somewhat isolated fishing ports, which are the site of a fair amount of activity, are in a position to service groups of fishermen and help to reduce the number of port facilities. In such cases, if local citizens are willing to take on the responsibility for managing the harbour by creating a port authority, we will retain its ownership. These harbours would be deemed essential and maintained by Ports Canada for the use of small crafts.

The other quays or ports which do not fit these criteria are basically ports we wish to transfer sometime in the future, depending on available funding.

As you said, when the decision to transfer a port has been taken, it is generally offered to those who use it, to the local community or municipality. Further, we offer to make any repairs deemed essential. We do not want to transfer facilities which are in a state of disrepair, we want to make sure they are in good condition. So we are willing to make certain repairs before transferring the facilities.

However, more often than not, we have to go by the cost of demolition. In other words, if the cost of repairs exceeds the cost of demolition, our contribution is limited to paying that cost when demolition is an option. Indeed, there are circumstances which sometimes make it impossible to demolish a structure. When that occurs, we have to negotiate with the local community or municipality to determine what type of repairs must be done; this sometimes convinces the people concerned to buy the facility.

Mr. Georges Farrah: Do you have the list of the ports that were transferred during the past years, and of their distribution throughout Canada as a whole, and especially in the east?

Mr. Robert Bergeron: I think that Yolaine can give you that information.

Ms. Yolaine Maisonneuve (Director, Harbour Policy and Program Planning, Department of Fisheries and Oceans): Yes.

We divested 85 ports in all in Newfoundland; in the Maritimes, 69 recreational harbours and 108 fishing harbours; in the Laurentian region, 173 recreational harbours and 15 fishing harbours; in the Great Central and Arctic region, a total of 251; in the Pacific region, 56 in all. If I add them up, it comes to a grand total of 757 ports.

• 1010

Mr. Georges Farrah: Thank you.

On the other hand, the maintenance and repairs budget is one million dollars or less. Above a million dollars, there are special projects; it is a separate envelope, as you said. How is this specific budget of one million dollars or less allocated to all of Canada's marine regions? For instance, what is Quebec's share as compared to the Maritimes and Newfoundland?

Mr. Robert Bergeron: I'll leave aside the issue of wages because they're often allocated according to somewhat different methods.

Regarding the maintenance budget as such, namely the operational and maintenance budget, which is called O&M in English, as well as the smaller amounts under vote 1, used for maintenance, we use a budget allocation formula to allocate the funds among the regions.

This formula uses five variables and the main ones account for 75% of the allocations. This is the value of assets in each region and the distribution of the fishing fleet in each region. Thus, the more a region has valuable assets, the larger its share of the maintenance budget. Similarly, if a region has a larger fishing fleet, it will get a bigger share of funds for maintenance.

There are also other variables, such as the distribution of harbour authorities, the distribution of the total number of sites available at Small Craft Harbours, and I have forgotten one—

[English]

Ms. Micheline Leduc: Core harbours.

[Translation]

Mr. Robert Bergeron: There are critical fishing harbours that we intend to maintain on a long-term basis. The distribution of critical fishing harbours is a third variable.

Now, the three last variables I mentioned only explained 25% of the allocation.

Thus this formula helps to determine each year's regional maintenance allocation from the budget, that is for amounts of less than one million dollars. In fact, above a million dollars, it is another envelope administered by the department. The department has an investment committee that administers an envelope applied to projects above a million dollars. The calculations are a bit different in that case.

Wages, as I mentioned, are also allocated according to a formula that is slightly different from the one I just described.

There is also a divestiture fund. I mentioned that we had received $24 million from Treasury Board to promote port divestiture. These divestiture funds are allocated differently. At the beginning of the exercise, when we received the $24 million, we asked each region to put forward proposals that could answer the following questions: how many ports do you think you can divest if we give you the necessary funds? How much would each of these ports cost you? When do you expect to be able to divest them? Where do you already have binding agreements with municipalities concerning ports, agreements you must respect?

At the head office, all the proposals from the regions were studied and we made a divestiture plan optimizing the number of ports that could be divested with the $24 million. However, we granted priority to all sites for which commitments had already been made. We said that it was important to honour these commitments that had already been made with municipalities, and to have the necessary funds to honour them.

Then, we considered the less costly harbours. We started at the bottom so as to have a maximum number of ports that we could divest with the $24 million. Each region received funds equivalent to the number of harbours shown in the plan.

There may be a third factor. We also have a reserve for contingencies, that is maintained at the beginning of each year at Small Craft Harbours. This reserve is allocated to the regions for specific cases, according to priorities and opportunities that come up during the year.

Mr. Georges Farrah: One final question, Mr. Chairman.

[English]

The Chair: You may have a very short question and a very short answer.

[Translation]

Mr. Georges Farrah: Very well.

• 1015

Are you taking the geographic distribution of harbours into account? Of course, if you have a project at Blanc-Sablon, in Quebec, just for operational costs, the people from the Laurentian region stations in Quebec will have to pay between 1,000 to $2,000 for an airplane ticket to go to Blanc-Sablon. Operations can cost fortunes and, often, the construction or repair funds will be swallowed up in administrative operations or travel.

On the other hand, if you are doing work at Blanc-Sablon or even at Cap-aux-Meules in the Magdalen Islands, or elsewhere in the extreme eastern part of Quebec, material prices are much higher. It costs 1.5 or 1.7 times more than to do work elsewhere on this continent. Are you taking this very important variable into account? In Blanc-Sablon, much less work can be done with $50,000 than at Gaspé, Mont-Joli or other places.

Mr. Robert Bergeron: The answer is no. We are not taking this into account. But, we must say that the same situation also occurs in Newfoundland, when work is done in Labrador.

Mr. Georges Farrah: Wherever that should be applied, you are not taking it into account.

Mr. Robert Bergeron: No, we are not taking it into account.

[English]

The Chair: Thank you, Mr. Farrah and Mr. Bergeron.

Mr. Hearn.

Mr. Loyola Hearn (St. John's West, PC/DR): Thank you very much.

First of all, let me thank the witnesses for being here this morning, and as some of the others have done, let me take the opportunity to say they have a great staff in the Newfoundland region in the small craft harbours directorate. We work closely with them. They're a very patient staff, a very understanding group, and I would say a very frustrated group, as undoubtedly you might be yourself, according to what we have been presented with this morning, Mr. Chairman.

Before I get into that, I just want to set a bit of a scenario. In Newfoundland we probably have more facilities, more harbours, than any other province, or certainly as many as most. A lot of people think the fishery might be dead so we can get rid of half of what we have. That's not the case. In fact, the latest stats show there are approximately the same number of fisherpersons today as pre-1992. The landed value of our product is greater than it ever was.

Mr. Dominic LeBlanc: Fishermen.

Mr. Loyola Hearn: Yes, fishermen, I agree with you.

We cannot divest ourselves of any great number of harbours. We have a lot of harbours and facilities that we must maintain. Now I am completely and utterly shocked at some of the information given here. The program spending levels have been curtailed by approximately $70 million compared to that of 10 years ago. Imagine what that does to the maintenance of our facilities.

Twenty-one percent of our active fishing harbour assets are currently in poor or unsafe conditions. It's not your fault; you don't have the money to do anything with them. And therein lies the problem. We've seen it in some other areas these last few weeks in different issues that have come before us. The Department of Fisheries has been cut to the bone, yet we brag about $30 billion and $35 billion surpluses.

We have fisherpersons in this country who can't use their own facilities. I'll use the example of Aquaforte wharf, one of the most active ones in our area. There's a big sign on it: “Please do not use. Unsafe.” Luckily, it's late in the fall and we can get around it. As far as I can determine, unless somebody pulls a rabbit out of the hat, they may not have it ready for the spring. What do you tell a pile of fishermen in the fishing community when spring rolls around—your wharf is unsafe and you can't use it?

I hope safety comes in here, and that it will be a priority because of it.

These assets need immediate repairs. Many are currently barricaded—and that was an example—in various stages of restriction. An estimated $400 million is needed to bring our active fishing harbours to acceptable conditions. I sympathize with the people in small craft harbours, because they're trying to do a job that's impossible. You cannot maintain the infrastructure we have throughout this country—and I can certainly speak about Newfoundland's case—with the amount of money they have. It's impossible.

So far with the cutbacks we've been able to manage, I guess, without total and utter embarrassment. But over the next two or three years, or with some kind of fluke storm or whatever, the bottom is going to go right out of it, and you're going to have a major problem on your hands if infrastructure money is not given to you to do something about it. I know you agree, because your people in all your other offices also agree.

• 1020

On top of that, I have a couple of other remarks. One is in relation to the facilities not owned.

The Chair: I hope you'll ask some questions.

Mr. Loyola Hearn: I'll have a question at the end, Mr. Chairman.

This is the crux of what this is all about. Where small craft harbours directorate is not present, there are facilities—and we admit that some of them have been there 25 years—that need financial assistance for the community-owned aging and deteriorating harbour infrastructure, but it's outside the responsibility of DFO.

In harbour A, 25 years ago the fishermen built a wharf they've been using for x number of years. It is now to the point where it can't be used any more. This is not a designated harbour. My idea of a designated harbour is one that was picked by somebody because DFO or federal fisheries had a wharf they fully owned, even though it might not have been a good harbour. There is a good harbour up here, but the wharf was built with a mixture of money—small craft harbours material, Canada works funding—and the fishermen have used it, but now it's in a state of disrepair, but DFO's not responsible. If the Department of Fisheries and Oceans is not going to look after the fishermen, who is?

We have an example, and Mr. Bergeron knows it well. We have three communities and two of them have DFO wharfs. One you can't get into at low tide, and when it's not low tide it's probably too rough. So even his own department has said it can't be used.

There is another one that is in a state of disrepair and should come down. They're trying to divest of it, except there's a land problem. There is a third community where it makes all the sense in the world to create a wharf. There is one there that was built through a mixture of funds, but it was taken off the list a few years ago. All the fishermen in the area say “Replace this wharf at half the cost of replacing the one in the harbour we can't use”.

There will be no wharf for anybody to use unless somebody has a bit of common sense and spends half or a quarter as much money on a harbour fishermen can use, rather than spending three or four times as much on a harbour they'll demand the wharf goes to, because DFO's responsible. But they'll tell you it can't be used. Common sense has to enter here.

I'm completely frustrated, and I'd just like some guidance from the small craft harbours people. Is it a funding problem? When are we going to look after fishermen in areas where it makes the most sense, rather than wasting a pile of money in areas where, in some cases, it doesn't make any sense?

The Chair: Mr. Bergeron.

Mr. Robert Bergeron: The issue the small craft harbours' own harbour is primarily an issue of dollars. It's also an issue of the mandate of the program. But one thing I should say is we are very much aware that there is a real problem there. At the request of the minister, we are looking into this issue. This is going to be part of the reassessment of the program I mentioned in the opening statement.

We hope to be able to report to the minister on this some time in the spring, maybe early summer. Then the minister will make whatever decision has to be made on that issue. We need to assess how many such harbours there are and what it would mean, in terms of funding requirements, if we were going to use the department, or the minister decided this was something he wanted to assume responsibility for, and so on.

The Chair: Thank you, Mr. Bergeron.

So I take it there is a possibility that there might be a way of bringing some.... I hope we're not so regulated and inflexible that common sense, as Mr. Hearn says, can't enter into the equation. Is there a possibility there?

Mr. Robert Bergeron: I would not be that optimistic, but I can say we are definitely looking seriously into this problem.

• 1025

The Chair: Just before I go to further questions, I want to look at the big picture as a whole. What is the asset base, in terms of small craft harbours, that is under the authority of DFO, and what percentage are we allocating in terms of yearly maintenance to cover that? If I could put it this way, what's our total asset value, and how much of that asset value are we spending yearly, as a percentage, on depreciation and maintenance?

Mr. Robert Bergeron: If we look at the entire assets now, in replacement value, it's $2.7 billion, but this includes the recreational facilities and the inactive, derelict fishing vessels, as well as all the active fishing vessels.

If we focus only on active fishing vessels, which are the ones that we would like to maintain in the long run, because we said that we wanted to divest of recreational facilities, their replacement value is an estimated $1.9 billion.

If we go further down to the core, the harbours, if you remember the difference between the 861 harbours that are active and the 735 where we think we'll be successful at creating harbour authorities and we would probably maintain in the long run, the replacement value of those core harbours is $1.8 billion, according to experts. Micheline Leduc can confirm that, because she's an expert in that area.

We need to reinvest about 4% of the replacement value in order to be able to maintain all these structures in good condition over time. That is about $72 million that would be required, on an annual basis, to maintain the facilities.

If we look at this year's budget, if we remove the funding for divestiture, which is special funding, if we remove the rust-out funding that we have received, which is to address the accumulated problem, about $44 million is left for the ongoing maintenance of facilities. So find the difference: $72 million minus the $44 million gives you what would be required in additional ongoing funding in order to maintain those core harbours that we target to keep in the long run; it's about $28 million.

The Chair: My point, though, is that I farm, and you have in a farm operation, the same as you do in the fishing community, some assets—buildings, and so on. If you don't set aside a certain percentage of moneys every year—I figure at least 5%—for maintenance, then you're living off your assets, and you can only do that so long.

I don't know whether you have these figures. I've seen them some place in the past. But over the last 20 years or so, as I understand it, the Government of Canada, through the Department of Fisheries and Oceans, has been funding their asset base in that way by about 1.5%. I'm not sure if that figure is 100% right or not, but that's what I've been informed. If that's the case, sooner or later you're going to hit the wall.

Why I raise this point is because, if we, as the Standing Committee on Fisheries and Oceans, have to write a letter to either the finance committee or the Minister of Finance, or both, that the Government of Canada should be setting aside a certain percentage of money to look after its assets base in terms of repairs, as chair I'm certainly willing to do it.

It's embarrassing to me, as a member of the Government of Canada, to walk into a harbour and see a sign like Loyola mentioned earlier, to proceed at your own risk, or don't use this harbour, or whatever. You see those signs in too many places, and that's an accumulated problem, over 20 or 25 years. So I would like to know from you how much we have been expending to look after depreciation and repair costs on these very important harbours over the last 10 or 20 years, and how much is necessary to spend in terms of percentages, at least? If we have an asset base of $1.8 billion, and that's the core, should we be setting aside and making sure that there's there for repairs, 4%, 5%, to cover that cost? If we're not doing it then we should be saying to the Minister of Finance, it ought to be done.

• 1030

Mr. Robert Bergeron: As I said, our assessment is is that we need to set aside 4% of the replacement value. This is based on the assessments that we've done in the past. We are going to be reviewing this again as part of the review of the program that we committed to doing in the coming year, but we don't expect that the 4% is going to change very much. We've heard some experts saying that you need 4.2%, others would say it's 3.8%, but I think it's reasonable to say that it is centred around 4%. We don't invest 4% right now on an ongoing basis as regular maintenance.

Of course, if you include right now the rust-out money that we got, $40 million, of course we're exceeding this. But the rust-out money is catch-up money, so our structures, it's true, are in very bad shape. Mr. Hearn did mention that 21% of our facilities overall are in poor shape, not to mention unsafe. It's unusual. If we were capable of maintaining our structures we would not have 21% of all the structures at active fishing harbours in such poor shape. You'd have just a very small fraction that would be in poor shape, not 21%.

The reason for this is that over the last 10 years the maintenance budget was inadequate. So what happens is you cannot maintain everything as you should, therefore rust-out comes in and then you need massive inflow of money in order to be able to catch up. And after that, hopefully, if you get the proper maintenance budget then you'll be able to maintain the structures adequately in the future.

This is why we said we estimated that $400 million is required now. That's over the next five years, because if we were to get $400 million tomorrow morning, we could not spend it all in one year. But let's say $400 million over the next five years. That would allow us to catch up, bring our facilities into reasonable condition, and from there on if we want to be capable of maintaining those structures in adequate condition all the time we would need an inflow of about $28 million permanently yearly.

The Chair: Mr. Bergeron, that's good information. I might say I went to Iceland and had a look at their harbours in the country of Iceland. I'll tell you, maybe we should send some of our cabinet ministers over to have a look at what they do with harbours there, because it's fairly impressive.

I have on my list Mr. Cummins, Mr. Matthews, and Madam Tremblay. It will be this order: Mr. Cummins, Madam Tremblay, Mr. Matthews, and then Mr. Steckle and back to Mr. Hearn after that. Can we keep them down to five minutes?

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

If we've had underfunding for the last 10 years of $400 million, it seems to me that our chances of getting extra funding when we're staring a recession in the eyes is pretty bleak. So it doesn't sound too good.

What I'd like first is a clarification. You've said that your responsibility for dredging is confined to the harbour basin, yet we know that in fact you have taken some responsibility for the approaches, both in Prince Edward Island and elsewhere. What is the real policy on that? How do you define it, or can you define it, or can you provide us with some documentation to define that policy?

Mr. Robert Bergeron: The policy, as I stated before, is we will dredge channels, basins, as long as they are within our property, meaning the water lot on which the harbour is built. That's the only thing we will do. That's our policy.

• 1035

Mr. John Cummins: I think maybe if you don't mind I'd like to talk with you more about that issue after.

Do you have responsibility for the natural wood debris in the Fraser River, the trap? Is that part of your responsibility?

Mr. Robert Bergeron: I don't think so.

Mr. John Cummins: What I'd like again is a little more clarification on an issue. Last spring I wrote a letter because I'd received some correspondence from Kevin Cassidy, who is the secretary treasurer of the Burnt Church Harbour Authority. They had experienced some storm damage to the wharf there and a small amount of money was expended. According to the minister in his letter, the repairs were simply to ensure that the wharf was usable and safe prior to the start of the season, but they said that the decision regarding the future of the Burnt Church harbour was based on the merits of the circumstances and in consultation with affected parties.

Could you give me some idea of what was meant when the minister talked about the merits of the circumstances? How do you determine when a facility will be continued in operation? What are the criteria that would be used?

Mr. Robert Bergeron: When a facility is actively used and it's necessary to support the fishing community, and if there is a harbour authority in place, definitely we will maintain the structure. And if we need to reconstruct a wharf, we will reconstruct a wharf. That's the situation.

Mr. John Cummins: There is a harbour authority in place at that operation, as I indicated. It was estimated it would cost $600,000 to repair that facility after the storm damage, and yet there was only a minimum amount of money spent, just enough to make the structure usable. The suggestion is that the whole matter of the work is under consideration, and it seems to me from the tone of the letter that there may be some consideration being given to closing it. Is that the case or not?

Mr. Robert Bergeron: In the case of Burnt Church, first of all the assessment was that it would cost about $600,000 just to do some immediate repairs to the wharf, but to actually reconstruct the wharf would cost well over $1 million. We were told at the time that maybe it would be a better investment to reconstruct the wharf entirely, as opposed to just throwing in $600,000 and then having to restart again a few years down the road.

What complicates the matter is that there are a lot of wharves close by in that area. In particular, I think there is the facility of Lower Neguac that is used by a large number of commercial fishermen. My understanding is that a lot of the people of the harbour authority of Burnt Church at one point in time told us they would be quite willing to migrate to Neguac because it's very close by, or whatever. So we said, look, we need to have consultation with all the users, including the first nations, and then based on those consultations eventually decide what's best for that area and what would give best value for money. Would it be to repair Neguac, enlarge Neguac, add structures to Neguac and concentrate all of the commercial fishing activities out of Neguac, or would it be to reconstruct Burnt Church?

Also, in the picture it's important to find out what kind of agreement the Burnt Church First Nation will get with the department and so on, and it's only then that we will know what will be the likely use of the Burnt Church wharf, which happens to be just outside the reserve.

The Chair: You can ask a very short one, John.

Mr. John Cummins: I've taken some notes here, but they're probably not complete. Would you be able to provide us with a brief outline of the requirements on this dredging? You mentioned safety, proper operation of the harbour, and so on, but would you be able to provide the committee with the guidelines that are in place for that? If we had further questions on this matter of dredging, who would we direct them to? Would it be to you? Are you the guy to talk to, or one of the other people here?

• 1040

Mr. Robert Bergeron: If you're interested in dredging in British Columbia, I would suggest you speak to our director of small craft harbours in that province, Susan Steele. I can give you her coordinates if you want. She'll be able to explain how they approach the issue of dredging. I'm speaking from a national perspective.

From a national perspective, dredging is quite a legitimate thing to do for small craft harbours. In fact, we do a lot of dredging, as long as it's safety related or it is required for the good operation of a harbour. Then it becomes legitimate.

But it all depends on what other projects there are in a region. There may be other projects, non-dredging projects, that are more important in their opinion, and this would be why the dredging projects would not get done in one region. This is why I suggest if you're very interested in specific cases in B.C., you should speak to Susan Steele.

The Chair: Thank you, Mr. Bergeron.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Neigette-et-la Mitis BQ): Thank you, Mr. Chairman.

I am glad to meet you because I have questions, not so much on the maintenance of small recreational harbours, but on the demolition of harbours or on the termination of work that has already been begun.

In my riding, there is the Maurice-Lamontagne Institute. A wharf was built which cost more than $15 million, I believe. When Brian Tobin was Minister of Fisheries, he was asked for $6 million to finish the work on the harbour because it never was finished. Never has any ship been able to dock at the Institut Maurice- Lamontagne, which is the research institute of the Department of Fisheries and Oceans, because the wharf is not finished. The Institute has to tie up its ships behind trucks, take to the road and launch them in Nova Scotia or Gaspé because these ships cannot be launched at the Institut Maurice-Lamontagne. Just now, we were talking about nonsense. Now this is nonsense in the full sense of the term.

Secondly, when I arrived here as a member in 1993, the first case I had to deal with was the demolition of the wharf at Pointe- au-Père, which was dangerous. A Frost fence was put up. At the time, it cost $2 million to tear it down. Two years ago, demolition costs had gone to $6 million. Now, the town of Pointe-au-Père has merged with Rimouski. There's no doubt that we'll have to start all the negotiations for tearing down the dangerous wharf all over again with the new administration.

The wharf at Rimouski-Est was to be finished. Work had been considered, but when the cuts came along, the work was not done on the left side, the west side of the wharf, so that work was only done on the east side of the wharf. But without the millions of dollars needed to finish the work on the Rimouski-Est wharf, that would mean that we would have thrown $15 million down the drain in a few years because the east side will collapse.

We'll mention another file, namely Deschaillons. There's a wharf that must torn down. If would cost $500,000, apparently, to tear down, but we cannot give the funds for tearing it down because we do not have the funds to do a study to find out exactly how much the demolition would cost. How ridiculous can you get?

Last weekend someone sold me a tee-shirt with a slogan that says: “If ridicule were lethal, who would be left to guide us, to govern us?” I think this is a ridiculous situation—it may not be lethal, but it is a ridiculous as a situation can get.

Who, in the department, is in charge of tearing down wharfs? Who, in the department, is in charge of finishing this work that is critical for maintaining our infrastructures?

Just now, I was talking about Deschaillons and not about Deschambault.

The Chair: Mr. Bergeron.

Mr. Robert Bergeron: I wouldn't want to give the impression that I am trying to dodge my responsibilities, but with regard to the wharf at the Maurice-Lamontagne Institute, this wharf is not under the mandate of Small Craft Harbours. The real estate section of the department is responsible for the facilities at the Maurice-Lamontagne Institute . Thus, I cannot help you with that topic.

You mentioned Pointe-au-Père and you mentioned the wharf at Rimouski-Est. These facilities come under Transport Canada. In Rimouski-Est, we have, I think, only the marina sector. But the wharf as such belongs to Transport Canada.

• 1045

Now, in the Deschaillons case, since you mentioned Deschaillons, to my knowledge, it is a recreational harbour where we made substantial repairs about two years ago. In any case, if my memory is not playing tricks on me, I think that about $1.2 million were invested about two years ago for repairs, with the intention of divesting the Deschaillons wharf.

Ms. Suzanne Tremblay: Are you talking about demolition?

Mr. Robert Bergeron: Possibly, the $1.2 million were meant for demolition, but to my knowledge, it should have been done, and the remainder should have been handed over to the municipality, at least, the water lot should have been returned to the province of Quebec. Now, what I do not know... I do not know what this is. I cannot tell you right now how this work is progressing. Is it finished? Has it been handed over to the municipality or not? This will have to be verified, and perhaps then we will be able to answer you.

[English]

The Chair: Madam Tremblay, what was the name of that last one you raised?

Mme Suzanne Tremblay: Deschaillons.

The Chair: Deschaillons. I don't think the interpreters had it, so we want to get it right in the record.

[Translation]

Ms. Suzanne Tremblay: It's not Deschambault, it's Deschaillons.

[English]

The Chair: Okay. Thank you.

Mr. Matthews.

Mr. Bill Matthews (Burin—St. George's, Lib.): Thank you, Mr. Chairman. First of all, I apologize for being late, and welcome to the officials this morning.

I'm probably going to reiterate some remarks made by the chair and colleagues. We do have, as Mr. Bergeron has outlined, a very serious maintenance problem. I'm going to repeat some things I've consistently said at this committee, in that I spend more time dealing with small crafts harbours' requests and problems than I do anything else. That's quite a statement coming from a riding in rural Newfoundland, but it's the truth.

The demand for maintenance is really pronounced, and I don't know how we're going to deal with it. As my colleague from St. John's West and the chair said, it's embarrassing to drive to a wharf or a harbour and see a barricade with a Government of Canada sign saying “Use at your own risk”. But it's quite pronounced.

This committee has been consistent in supporting small craft harbours in trying to access funding. I just want to go on the record this morning as being a strong advocate once again for that, because it's a serious problem. Many of our harbours are becoming non-functional for very productive people who make a living from the sea and need a harbour to land their catch and be productive. It's getting more and more difficult for them to do that.

I don't know how we address the maintenance issue. Your stats are quite interesting, and I would say you're certainly being conservative in what you say. From looking at the riding of Burin—St. George's, it's one hell of a problem.

What I'm also finding, in addition to the need for maintenance dollars to keep the existing structures in good shape, is that because of our changing fishery—particularly in Newfoundland and Labrador and on the south coast of Newfoundland where we've gone through the cod moratorium and people have gone to multispecies licences and core licences—fishermen have been forced to move to larger vessels.

So not only do we have the problem with the existing wharf or the slipway not being kept up to scratch for them to fish off, but because they've gone to larger vessels, even that wharf that's in disrepair is not now long enough to tie up the larger vessels. So we have a complicating factor here. Because people have gone to larger vessels and are more mobile, and they go from their area to another area and have to go into port, all the harbours I go to are full of vessels, but there's no berthing space.

So we have a really serious problem as well, Mr. Chair, in that area of a changing fishery and fishermen moving to larger vessels, for now there's nowhere to tie the vessels up when they go to port.

I guess I'm just making observations. I could ask you how you plan to deal with that, or what the prospects are in the near future for some extensions to tie-up space for fishing vessels—and I'm only talking fishing vessels here; I'm not talking the recreational end of it, which is important and further complicates it.

As you comment on my observations, there's one other thing I really can't understand. Last year the decisions on small craft harbours expenditure were made earlier than in the last three or four years I've been here in Ottawa, but the tenders for the work didn't get done any sooner. For the last two or three years, most of the work you get is carryover work into the next year, because the tender call was so late and the weather gets bad and the work is not done.

• 1050

Is there anything that can be done, for the bit of work we do get, to ensure the tenders are called effectively, efficiently, and in timely fashion, so that we get the work done before the bad weather of the fall in which the money's announced?

The Chair: Thank you, Bill.

Mr. Robert Bergeron: First of all, with respect to the first part of the question and the phenomena of the fishing vessels increasing in size and requiring larger facilities and structures to be able to dock, or more berth space in harbours, it's true that's a phenomenon we've experienced. In fact, we have many harbours that are congested. In some cases the moratorium has eased the congestion a little bit, but it's still there. It's true in most regions. It's definitely true in Newfoundland. It's also true in Quebec. I'm just thinking of Grande Entrée in Quebec, where we have a serious congestion problem. We're trying to address it with investment money we get from the department, but it's not very much.

I would add there are situations where we have a harbour and structures—wharves and so on—that are in reasonable shape, but there is inadequate protection. You may have structures in top shape, but if you don't have a breakwater to protect the facility it's not very usable. We have many situations like this, especially in Newfoundland, where something has to be done. But we are confident that if we were to get the $400 million to address rusting as part of this, we would be able to address those difficulties to a great extent—with the $400 million needed for the rust-out, if it were supplemented afterward with a permanent increase to the maintenance budget.

On the second part, about the tendering, we are conscious that there are too many carry-forwards each year. This is a serious problem for us because as you can appreciate the amount of carry-forward each year is quite limited, and there is always the risk of wasting the dollar resources at year end if it is not spent. We are quite worried about this in the small craft harbours directorate. I would even say we are obsessed about it. We don't want to lapse money at year end, so we do a lot of cash management. If we realize one project is not moving as fast as it should, we put the money elsewhere and do something useful elsewhere. Then the next year we complete the work.

We're successful in managing our funding each year so that there is very little lapsing at year end—not to say that there is zero lapsing. I agree with you it would be much better if we could start the tendering process much faster. It's not always possible, but this is a real concern we have, and we're trying to work at it every year. Obviously we're not doing a perfect job at it, but it is definitely a concern we're working on.

The Chair: Thank you, Mr. Bergeron.

The health committee comes in here at eleven, and I do want to get Mr. Hearn and Mr. Steckle on.

I have a suggestion for the committee first. I think we all agree DFO is trying to do with what they have, and the problem is there isn't enough money coming out of the centre to deal with the depreciation and deterioration of the asset base. I'm wondering if, rather than just draft a letter on this particular problem, maybe we could draft a two-page report that we would table in the House basically making a request, taking in the points Mr. Bergeron has made, for the 4% required.

If the committee's agreeable to the idea, this way it gets to the House of Commons, and the Minister of Finance will certainly see it. I can't see us being in a position to do this prior to November 27 because we're travelling for a week. But if the committee's agreeable, we can have Alan and others work on it as a report to the House. Is that agreeable?

Mr. John Cummins: Do you want a motion?

• 1055

The Chair: I don't think we need a motion at this time. We'll proceed in that fashion. Is there agreement?

Some hon. members: Agreed.

The Chair: Mr. LeBlanc.

Mr. Dominic LeBlanc: On that specific suggestion, how many times have we all sat in the House—and in our own caucus—and heard the Minister of Finance say to everybody, “Be specific. Tell me exactly what you're asking. Make a specific request.”?

So to Alan and others who'll do the report, I think we should follow up on what Mr. Bergeron said and say there's a $400 million rust-out need, that $80 million over five years would catch us up on the neglect that's been—

Mr. Loyola Hearn: It's 21%.

Mr. Dominic LeBlanc: Right, I'll say 21%. We can work that up and make a specific request for an amount of money. Then there's the $28 million annual increase to allow the maintenance and dredging to be done. I think we should be very specific.

Mrs. Suzanne Tremblay: The budget is coming soon, so we want to be not only specific, but rapid.

[Translation]

Mr. Dominic LeBlanc: Rush. Absolutely.

Ms. Suzanne Tremblay: Rush.

Mr. Dominic LeBlanc: Yes.

[English]

The Chair: One of our difficulties is we're travelling that week, but we'll work on it.

Then we have agreement on that. Mr. Hearn, please ask your question quickly, and then it's Mr. Steckle.

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

I will be specific. I like what I see happening here, because I think it's time the committee took a solid stand and tried to help out the small craft harbours directorate. However, there's not much sense in putting money in there if there is going to be political manipulation, and that's a concern I have.

If you look at the amount of money spent in the last few years, especially last year, the bulk of the money spent in Newfoundland, a very high percentage—and my colleague from across the way smiles because he knows what I'm talking about—was spent in the riding of the minister in the government. That could be a coincidence, but the amount was extremely large in light of the needs in other districts.

Also, I understand the minister's discretionary funding can be used in case of emergency, but again, a study of the expenditures shows that just about all of it is a slush fund for the Liberal members, unfortunately. I think if we're looking at fair amounts of money we have to be more objective in the spending. The fishermen have to benefit, rather than political individuals, regardless of what side of the fence we're on.

The Chair: We'll note your point. It's a political statement or a complaint.

Mr. Steckle.

Mr. Paul Steckle (Huron—Bruce, Lib.): I'm the only member here this morning representing fresh water and the Great Lakes area. Those who know the Great Lakes basin know there's been a real downturn in the levels of water. Lakes Huron and Erie have been extremely low; we've therefore had a lot of problems getting into our small craft harbours.

The $15 million was certainly a great help, but because we know there's so much foolishness, I'm just wondering how foolish we really are. Do we ever spend money on the inner harbour, when there's no money for the outer area, so we can't even get into the inner harbour? Do we do things like that? Do you get the question?

Mr. Robert Bergeron: I understand the question. I cannot give you an absolute guarantee that it does not happen, because I don't have this information. I can just say the problem on the Great Lakes with water levels is a problem that affects small craft harbours as well as all marinas and private harbours on the Great Lakes.

We do dredging within our own marinas and fishing harbours, but there are two different approaches. When we're dealing with marinas or recreational harbours, we will do dredging insofar as it is part of an agreement to divest the property. So if the municipality says that before assuming ownership of the property they want dredging done, we're going to do the necessary dredging and then transfer the property.

With respect to fishing harbours—the core fishing harbours we want to keep on the Great Lakes—we do dredging when it's required to the basin and to the entrance channel, but again, as long as it's limited to our property.

I cannot give you a guarantee there could not be a situation where we're dredging the inner part of the harbour when some kind of access channel elsewhere does not make this harbour accessible. I don't think so, because we would know this: nobody would be able to get into our harbour. So I don't think so, but I cannot give you an absolute guarantee for the time being.

• 1100

The Chair: Thank you, Mr. Bergeron.

We are out of time. I certainly thank the witnesses for being fairly forthright and direct with their comments. Once again, thank you for your presentation.

The meeting is adjourned.