[Recorded by Electronic Apparatus]

Thursday, May 9, 1996

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[English]

The Chairman: Order, please. Good morning, everyone.

This morning, in our continuing hearings on the Pacific coast fishery and the revitalization plan of the minister, I'd like to welcome Mr. Don Cruickshank, who has written two in-depth reports on the Pacific coast fishery, and Mr. Peter Pearse, who has also written a report on the Pacific coast fishery.

What we'd like to do, gentlemen, is ask each of you to give a short presentation on what your reaction is to the revitalization plan, and then we'll open the floor to questions.

Committee members had exposure to a number of groups last week. They gave us their reactions to the plan, and of course there is more than one side to the question, as always happens.

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We're looking specifically at the concern for the fishery itself and the concern for the people who have participated in the fishery over the years. As politicians, we're concerned with the people and the communities, as well as with the resource. Without the resource, of course, there is nobody participating.

Mr. Cruickshank, would you begin? Then we'll go to Mr. Pearse for his presentation, and then open the floor to questions.

Mr. Don Cruickshank (Individual Presentation): Thank you, Mr. Chairman.

Please accept my apologies for being late, committee members, but my biological clock is still telling me it's six o'clock, not nine o'clock, so if I'm a bit obstreperous or argumentative today.... I don't even speak civilly to my wife at that hour of the morning.

I'd like to emphasize that I'm here because I was invited to be here. This certainly isn't my choice of locations for today. I'd rather be out on the golf course. But I thought this committee might be the one venue, the one organization or group, that could offer the minister some non-partisan guidance. I believe he needs some guidance on his plan. I believe he's received some bad advice from his staff. Included in that bad advice is that in the concept of fleet rationalization and fleet reduction put forward to the minister, the basic criteria for any fleet reduction program have been ignored in the proposal.

For the last couple of decades I've dealt extensively with this topic with DFO and there were always at least two items that had to be taken into consideration when we were talking fleet reduction. One of them was the target fleet: we know what we've got now, but what are we aiming for? The plan now under consideration in no way discloses what the target fleet should be. Second, it does not disclose the mix of that fleet. We're talking about the B.C. salmon fleet. We don't know how many seiners we're going to have at the end of this, we don't know how many trollers, and we don't know how many gillnetters.

The third item that must now be taken into consideration is what the geographic distribution of that fleet is going to be. What's going to happen to those coastal communities if we permit too many of the boats to come out of any one community?

The buy-back proposal can be controlled, and that should be continued in the plan, but the area licence stacking is uncontrollable. Close to where I live, there is one small fishing community with a resident fleet of sixteen salmon seiners. Twelve of those boats have been offered for sale already. Is this going to happen in any of the other small communities? Or are we going to clean them out completely? I think that type of thing has to be controlled and regulated through the fleet reduction process.

I think if we're going to make recommendations on how this plan can be fine-tuned or how the mistakes in it can be corrected we have to look at what motivated the recommendations the minister is working on. His planners and economists have talked about overcapitalization in the fleet. They've talked about overcapacity in the fleet. Nobody identifies what the proper capacity would be. I submit that the numbers they're using are badly flawed. When they talk about overcapitalization, part of the way they arrive at the capitalization is to send out a questionnaire to the fishermen where they get possibly a 10% response. They extrapolate from that and say the fleet is capitalized at$1.2 billion.

Fishermen responding to the Department of Fisheries and Oceans are thinking that this is a forerunner to a buy-back, and of course they're going to add on to this thing. I think that when you talk about capitalization you could take two values. You could either take the fair market value of the fleet and their licences and their gear or you could take it on a depreciated cost basis, but not on what these small-businessmen estimate their businesses might be worth if they were selling it only one item at a time. If we're going to determine overcapitalization, I think it should be done on an accepted accounting basis.

As for overcapacity, what is capacity? One noted economist said a few years ago that we could catch all of the salmon on the B.C. coast with five seine boats. Now, is that what we want? Do we want the smallest fleet required to harvest the resource, or do we want as many boats and as many fishermen employed as that resource can reasonably support? That has to be addressed before we go into any fleet reduction program. Are we aiming for this five-boat fleet that's going to harvest the fish? If that's the case, why have any boats? Why don't we just put traps in?

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We have to determine, philosophically and politically, what type of fleet we are going to have. Are we going to have a fleet that can be reasonably supported by the resource we're projecting?

Some fine-tuning should be done with this program. The May 24 deadline for area choices has to be extended to give fishermen some time to really have some input into this. There should be an opportunity for fishermen to opt out of the 1996 fishery without it being too costly to them. We have to take a hard look at the stackable area licensing component of this plan and come up with something else.

It was not my intention to come here and make a speech to a bunch of politicians. That would be like sending coal to Newcastle. I was invited here to respond to questions coming out of the two reports I've written - the fleet rationalization committee report, which I did at the request of the Hon. Roméo LeBlanc in 1982, and one I did in 1991 at the request of a group of fishermen's organizations.

If, by answering your questions or in any other way, I can contribute to solving or defusing the current explosive situation on the west coast, if I can be of any help, I am certainly willing and prepared to do so, Mr. Chairman.

The Chairman: Thank you very much.

Mr. Pearse.

Mr. Peter Pearse (Individual Presentation): Thank you, Mr. Chairman. I want to thank you and your colleagues for this opportunity to share with you my concerns about the direction of fisheries policy on the west coast.

I'm aware that you have been entertaining presentations from a wide variety of people involved in the fishing industry. I want to point out to you that I'm not directly involved in the fishing industry myself. I'm very much an external, interested observer.

The context of my remarks - and I want to keep emphasizing this - is we are facing a crisis in the west coast fishery. This crisis has been building for quite some time, for at least fifteen years and even more. Over the years there have been repeated calls on the federal government to come to grips with the problem that's given rise to our present crisis. But the government, over the last fifteen years, has done very little about it. During the last fifteen years the effort the federal government has directed toward restructuring on the Atlantic coast has not been matched by any significant policy effort on the Pacific coast.

The crisis we're facing is an economic one. It's one of overcapacity. It's not one of continuing declining stocks, although that is a problem. The crisis we're having is the ever-increasing catching power of the fleet and the cost associated with it, which is affecting the economics of the industry.

In the last year or so this crisis has been precipitated through a series of events: the continuing growth and overcapacity of the fleet, a couple of years of low catches and depressed prices for fish. All of this has given rise to our present crisis.

The current trends in this industry are simply not sustainable. We have to do something. I'm sure the members of this committee are sufficiently aware of what's going on, so I don't have to bring you up to date on recent events, but it is important to bear in mind what has been happening.

In recognition of the impending crisis and in the wake of Ambassador Fraser's report a couple of years ago, Mr. Tobin, then minister, announced he was going to do something about fleet rationalization and set up an industry round table to give him advice about how to do it. That group laboured long and hard and came up with some recommendations, and the present minister has since announced a plan he says is based on the round table's recommendations.

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Indeed, the Mifflin plan does incorporate some of the core recommendations of the round table. There is a substantial commitment to fleet reduction, which was a central point of the round table's recommendations. It proposes action before the 1996 fishing season, which was also emphasized by the round table. It involves a buy-back of fishing licences. That buy-back is based on voluntary willingness to sell to the government and it's based on substantial funding support from the federal government. The allocation problem has been referred to an independent adjudicator. That's also part of the round table's view of how it should be done. It also involves more -

Mr. Wells (South Shore): Repeat that fifth one, please.

Mr. Pearse: The allocation problem, which involves the allocation of the catch among sectors of the fleet, has been referred to an independent adviser.

It is also announced to foresee more industry participation in managing the fleet. It also involves a commitment to a shift from raising revenues from the fishery from licence fees to raising revenues from landings fees.

The Mifflin plan also incorporated some ideas that were not part of the round table consensus but were advocated by one or more of the sectoral groups, whose reports were appended to the round table's report. These include single-gear licensing and area licensing and stacking, which are probably the most controversial parts of it and which I'd like to comment on in a moment.

Thirdly, the Mifflin plan did not include some things that were advocated by the round table. These include certain tax incentives to facilitate the buy-back, ideas about loan guarantees to facilitate the stacking of licences, and funding assistance for adjustment for displaced workers.

Every group in the fishery, as I'm sure you're finding out, can find something in this scheme to object to. I think the danger is that in our concerns about particular aspects of it we'll lose sight of the broader picture, on which I think we all agree. That may be a reckless statement, but certainly overwhelmingly the fishing community agrees there is a pressing need for a substantial reduction of the salmon fleet on the west coast.

In my view, we have to make this thing work. I want to emphasize that there is broad agreement on a number of fundamentals in this plan. There is broad agreement on the need for substantial fleet reduction, on action before this current season, on a buy-back, on a voluntary buy-back, on federal funding for a buy-back, on the proposed solution to the allocation problem, on more industry participation, and on landings fees. There is some substantial but not unanimous agreement on things such as single-gear licensing, area licensing, and stacking of licences.

Mr. Chairman, I think it's helpful to narrow down where the concerns about this are, because we're getting to the point now where we need some hard political decisions about aspects of this plan that are disputatious.

There are three kinds of objections to the plan. One is opposition to certain of the plan's features. I think the most controversial is the area licensing and stacking provisions and the implied costs that will impose on vessel owners.

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A second set of objections to this plan is that there are certain things it doesn't deal with. One is adjustments for displaced workers. There is concern that this reflects a neglect of these kinds of social problems on the Pacific coast. There are all kinds of comparisons made with attention of this kind to these kinds of problems on the Atlantic coast. Those concerns and objections will not go away as long as there is no provision in this plan for displaced workers.

Other matters that are not dealt with include incentives to support the buy-back that were advocated by the round table, including the tax exemptions and loan guarantees I mentioned a moment ago. There is no support for local communities in this plan. There is no protection against concentration of control of the fleet, a matter of considerable concern within the fishing industry.

The third set of objections to this plan has to do with timing and scheduling of events. This plan is kind of a cold shower. Everything happens at once. We're going to have to force vessel owners to make very difficult choices about where they will choose to have their licence identified in terms of the area of the coast. They will lose certain privileges in terms of their coast-wide freedom to fish. They will have to make decisions about which gear to choose in some cases. They will have to make decisions about whether to enter into the buy-back operation. And they will have to do all of that quickly.

On top of that, we will have an escalation of licences because vessel owners are encouraged by this plan to buy additional licences from each other in order to retain their coast-wide opportunities to fish. That will drive up the price of licences. On top of that, the federal government is coming out with $80 million to buy licences, which of course will inevitably drive up the price of licences yet further, making it more difficult for vessel owners to stack their licences and threatening to dissipate the value of the funds available to retire licences.

All of this is going to take place and force fishermen to make these decisions in the face of great uncertainty - uncertainty about the allocation question, which won't be resolved in time, uncertainty about the runs of fish, and the usual uncertainties about prices and so on.

I think this last concern is very serious, so I'd like to offer you my suggestions and comments on what I think should be done differently from what is now proposed.

The first point is that I believe strongly, looking at this as an external observer, that fleet rationalization must proceed. We must not let this opportunity go by. We have to come to grips with this problem. The longer we let it fester, the more expensive and more difficult it will become. We now have an opportunity. There is widespread agreement within the fishery that we need to come to grips with it and that it is a matter of urgency. We mustn't lose this opportunity.

If we do lose the opportunity, I foresee great difficulty in the fishery. It's going to be difficult in any event, but it's going to be especially difficult. It will be very difficult for the Department of Fisheries and Oceans to protect and conserve the stocks of fish in the face of such vast overcapacity in fishing power. The fishery at its present size is unmanageable.

So while there is plenty of criticism of particular aspects of this plan and of its inadequacies, and I think we might be able to make it better, we mustn't lose sight of the fact that first and foremost we have to proceed with some kind of fleet reduction.

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My second point is that the biggest obstacle to this plan proceeding efficiently is the divided support it's getting from within the fishing community itself. I'm sure everybody here knows there is a great deal of conflicting criticism of the plan. That's not surprising. There's a great deal at stake for fishermen in this program and the interests of different groups within the fishery conflict. There are long traditions of conflict within this fishery. It's not surprising that the criticisms are not all of the same kind.

The difficult task for the government, in my opinion, is not to design the perfect plan, or to modify this plan to make it technically better, but the big challenge is to make changes to this plan that will broaden the support for it. You can't proceed with a plan of this kind if it's meeting a wall of opposition from those it will affect most directly. It needs more support.

In my opinion - and I hope this committee might be able to help with this - the government should very carefully weigh all of the concerns you're hearing from fishing organizations and coastal communities. You should consider their suggestions for making this plan better and try to find any modification to this plan that would allay apprehensions, provide more certainty, facilitate adjustment or generally broaden the support for it within the fishing community.

I think there are some aspects of this plan that could be improved. But let me preface my remarks by saying that I don't think you should take my advice about what should be done to improve it unless you're sure this would broaden support for the plan. I think it will, but I haven't done a poll of the fishery. But you'll be hearing from others on these matters.

One change I think should be made is that there must be some provision for adjustment assistance for displaced crews. I emphasize that it's not vessel owners, but crews. Under this plan, crews will be the ones who will be involuntarily displaced by this program.

This is through no fault of their own. It is a result of a federal initiative, and the federal government should therefore take responsibility for the implications of its plan. It's a reasonable and fair thing to do something for those the federal plan affects adversely.

I might add that without some provisions for assistance for displaced workers, Ottawa will never escape the invidious comparisons about attention to the Atlantic coast versus the Pacific coast. This kind of adjustment assistance could take the form of retraining programs or other work in the fisheries, such as habitat stream restoration, alternative fisheries and so on.

My second suggestion is that I believe strongly that we should remove the deadline of the end of June to spend all of this $80 million. This almighty rush to spend $80 million is aggravating the uncertainties and anxieties that are now associated with the fishery, and it also threatens to dissipate the extent to which you get your full bang for the buck. I think it's making it very difficult for fishermen to acquire licences to retain their existing rights, and it's threatening to dilute the extent to which we can reduce the fleet with the available taxpayers' money.

In my opinion, the best modification that would be made in this respect would be to allow the buy-back advisory committee to decide on an upper limit for the prices they're prepared to pay for licences in the course of the buy-back by the end of June and buy out the extent to which you can buy licences within that price limit. But then don't spend all of the money, don't even commit to spending all of the money. Take the balance of the money left over and put it into a trust fund to be used over time for continuing fleet reduction and fleet rationalization.

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I suggest as well that this money be allocated to be used dollar for dollar with matching money provided by the fishing industry itself and generated through royalties on landings. The fishing industry, if not unanimous, is widely supportive of a shift to landing fees for this purpose. Within the fishing industry, the funds are believed to be funds that they have paid - I'm speaking of much of the $80 million - for that purpose, so those funds should be held for that purpose.

My third suggestion would be to offer all licence holders a third alternative. Instead of forcing all licensees now to make so many decisions about their future in such a rush, in the face of all this uncertainty, I suggest that all licence holders be offered the right to hold their licence in abeyance for the current fishing year. That is, they would not have to pay their licence fees providing they did not fish, but they would not lose their licences if they did so. This would give fishermen another option, and I cannot see how this would in any way weaken the rationalization program. I'm not sure how many would take up that option, but at least it would provide an additional opportunity that might offer some assurance.

My fourth suggestion is that we need more long-term structural changes. I would very much like to see this rationalization portrayed not as a once-and-for-all effort, like our past buy-backs have been, but as the first step in an ongoing, continuing effort to bring this fleet under control, to adjust it to the available catch of fish on the coast, and to rationalize its structure as well as its size. This is going to take a long time and I would like to see it in the hands of the fishing industry itself.

I would like in the long term to see the round table's recommendation for an industry board to take many of the responsibilities for managing the fleet. I'd like to see that idea developed. It was also an idea referred to in the minister's announcement of this plan. The sooner we get onto it, to the point where the industry itself is engaged in this challenge of rationalizing the fleet, the better.

The other structural change that I think needs desperate attention is the need for a long-term strategy for coastal communities. I emphasize that this is not solely a problem for the Department of Fisheries and Oceans. Indeed, it's not solely a problem for the federal government. There are lots of agencies of governments involved in this - the Department of Indian Affairs and Northern Development, HRD, the Department of Fisheries and Oceans, the Government of British Columbia and so on.

There's no question that fleet rationalization and downsizing of the fleet will have an impact on coastal communities. There's no escaping that. We do not have anything in hand at the moment to alleviate that pain. It's serious, and we need some kind of strategic program for easing the pain of coastal communities as we grapple with the fleet.

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However, I do want to emphasize that it does have direct relevance to the Department of Fisheries and Oceans licensing policy. It relates to some ideas that are beginning to develop within the department and outside the department about how to manage salmon. The general trend is that there is growing feeling that we have to pull in the fleet. We have to move gradually toward more locally based salmon management regimes.

I don't want to elaborate on that, because I don't have any particular, specific ideas to propose to you today, and it's very controversial, but I don't think there's any doubt that fifty years from now we're not going to be chasing salmon up and down the high seas. We're going to be drawing in, like other countries manage their salmon. We have to start moving in that direction.

While we have these other problems, which I'm sure you're hearing a great deal about - the problems of coastal communities and so on - I want to emphasize that we must not let these other problems delay getting on with fleet reduction.

Thank you.

The Chairman: Thank you both very much.

We'll go first with a ten-minute round. Mr. Bernier, please begin.

[Translation]

M. Bernier (Gaspé): I thank the witnesses for being here this morning. I must confess my ignorance about the management of the salmon fishery in the Vancouver area. I have not yet had the opportunity to go there. I certainly do intend to go at some point in order to see things in person.

In order to prove to you that I do not intend to be guided by partisan concerns in my work in this committee, I will not use all of my time this morning. I will be offering a lot of time to the Reform members, who are mostly from out West. I also know that there are at least two Liberal members who are from the West Coast. I would be glad if they had more time this morning.

I'm not sure I understood everything, and I'm not certain that the two gentlemen said the same thing. What I do know about salmon is that it has quite a short lifespan. We're looking at a four-year period. I spoke with some fishermen, last week, and with ecologists. The people we heard last week formed a good coalition. I heard no divergent opinions there. There were aboriginal, high volume fishermen, small fishermen, community representatives and ecologists. They all said that a four-year period was needed to restore stability. They don't understand why the minister seems to want to implement his rationalization plan so hastily.

I believe the first person to express opposition to that was Mr. Cruickshank. I would like to hear further explanations from him.

The other gentleman seemed to say that that approach was inevitable. Perhaps I did not quite understand this morning, but I wonder if you could clarify your thoughts on that matter in one or two sentences. Afterward, I will yield the floor to my colleagues from that province so that they can ask further questions, which will allow me to get a better grasp of the situation.

[English]

Mr. Cruickshank: Thank you, Mr. Bernier. I'm sure we'll welcome you to the west coast and you'll find it's as beautiful as the Gaspé, or almost as beautiful.

Your comment on the four-year cycle of the salmon basically is correct. The question on why the rush to rationalize the fleet is certainly a valid question. We've taken 100 years to create this bloody mess; why do we have to cure it before the end of June?

As Dr. Pearse said, there's effectively universal support for the concept of reducing the size of the fleet somewhat. There must be some fleet rationalization.

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From that point on, it's a matter of how we approach the rationalization or reduction of the fleet and how long a period of time we take to do it. I would certainly like to see some reduction before the 1996 fishery, but I would like to see the reduction process be ongoing and I would like to see it include some financial commitment from the people who are harvesting the resource.

Always we have to remember when we're talking about our fishing resource that those fish don't belong to the relatively few people we license to harvest them. We all are Canadians, and that's a common property resource. I feel I own as much of it as any fisherman on that coast, even in retirement. As a member from Gaspé, you also own a share of our fish, and you should have a say in how it's done. But so should those coastal communities.

I don't think it's good enough now to wander into a program when we have no idea what impact it's going to have on those communities, try to rush it through in a matter of days and then find, two years from now or ten years from now, that we have made one colossal blunder. We've done it before, through DFO. We need only look to other provinces in this country to see the mess that's been made by bad planning on the part of the Department of Fisheries and Oceans. Let's not let that happen in B.C. because we're in a hurry.

The salmon are very resourceful as long as we don't over harvest. The key thing here is we must reduce the harvest rate and start working on reducing that fleet until we bring the two into some sync, some rationalization. My idea of rationalization isn't necessarily to cut out fishermen and destroy their jobs. It's to bring the size of the fleet and the resource into balance. That's what rationalization really is.

It's going to take two things to do that. It's going to take some fleet reduction and it's also going to take some resource enhancement. And the cost of that enhancement and fleet reduction should be contributed to by the participants.

Thank you.

[Translation]

Mr. Bernier: If I understand you correctly, Mr. Cruickshank, you are also in favour of rationalization, but you think it should be done gradually, together with sustainable development or a sustainable use of that resource. I want to make sure that I am correct in my understanding that both witnesses are commending that rationalization go ahead, even though they do advise that we take more time for its implementation.

You say that as a Canadian from Gaspé, I must feel that I own part of the rivers' resources. I must say that I prefer to listen to people who are themselves grappling with the problem. I have always felt that local solutions could be found for local problems. When I hear about this problem and I see that a minister in Ottawa, in the central part of the country, wants to tell people how to behave, that gives me goosebumps. I am willing to let them handle the salmon matter because they are the ones who are experiencing the problem, but since I am a member of this Parliament, I want to make sure that the right solution is chosen. That is why I want to ascertain that I understand both perspectives correctly and I want to make sure I am correct in saying that both of you favour rationalization. I must, however, understand exactly how we're going to proceed.

[English]

Mr. Cruickshank: Yes, Mr. Bernier, you're quite correct that we are both in favour of fleet rationalization. We both want to see some fleet reduction.

I'm not sure Dr. Pearse and I are in total agreement as to how extensive that should be. We look at this problem from two totally different perspectives. Dr. Pearse is an academic, and I'm not.Dr. Pearse lives in Vancouver. I live in one of the coastal communities that's going to be damaged. It's obvious we're going to see this from two different points of view. It's for this reason that I say let's be cautious.

There's need for fleet reduction. I don't think any thinking person associated with the B.C. fishing industry will accept the fleet as it now stands and its killing power. It's too great. But I don't think there's anybody in the Department of Fisheries or anywhere else who can say explicitly that this is the size of the fleet we must have in the future, because that has never been determined. To say we must cut it in half and do so before the end of June is an irresponsible position to take. To do so and not know what impact it will have on those coastal communities is equally irresponsible.

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When I said you are an owner of the resource as I am an owner of the resource, it wasn't so that you should necessarily have a say in how we're going to develop this. Remember that you are going to have a bill to pay if we do it wrong, and it's going to be a bill that all Canadians are going to have to foot, a social bill if not an economic one. As owners of the resource we should all have some say. Certainly those coastal communities should have some say, and they have not been listened to in this process. They were eliminated from the process.

Mr. Pearse: Very briefly, Mr. Chairman, I'd just like to add to Don Cruickshank's remarks by saying that I think the extent of our agreement on what needs to be done is even greater than he suggests. I think both of us agree not only on the need for substantial fleet reduction, but also that it ought not to proceed with this buy-back and this almighty rush to spend the money by the end of June.

We do agree on that, don't we?

Mr. Cruickshank: We agree on that aspect of it, but I think where we disagree is on the stackable area licensing.

The buy-back is not the problem. That can be slowed down; it can be tuned and tailored to do the job. The problem is with the other half of the fleet reduction where we're going to reduce the fleet without any control and we're going to do it through cannibalization. That's the piece that has to be shelved. We simply don't have any control over where we're going with stackable area licensing as a means of fleet reduction.

Mr. Pearse: Could I just complete my response to Mr. Bernier?

It has to do with the urgency of getting on with this thing. There is a great deal of urgency, which is the result of economic conditions within the fishery. The commercial fishery has been on a bit of a roller coaster during the last few years on the west coast, and last year was a very bad year. Catches were down, prices were down, and it put many fishermen in very serious circumstances.

This year is expected to be equally bad, and if we don't do something, then many fishermen and in fact probably most vessel owners will lose money, substantial amounts of money. This potentially very profitable fishery will be characterized by economic distress. It is a very urgent problem. Thank you.

The Chairman: Thank you.

I have a point of clarification. You both agree that a rationalization has to take place, but you disagree on the extent. You both agree that the resource is okay, relatively speaking. It's not like Newfoundland, where there was no resource and extreme measures had to be taken. I thinkMr. Cruickshank said that, maybe with the exception of this year, the resource is still there. Is that correct?

Mr. Cruickshank: Yes, the resource is still there. As long as we control the harvest rate, it will always be there.

The Chairman: With the reduction, Mr. Cruickshank doesn't see the destruction of all these communities. It can be done in such a way that the impact would be softened up the coast. But then Mr. Pearse is saying we should be involved in a revitalization of these communities once the crews are out of work.

I think you're looking for a much deeper cut than Mr. Cruickshank is. Can I say that?

Mr. Pearse: I'm a little bit uncomfortable with trying to identify differences betweenDon Cruickshank and me. As he says, inevitably we don't agree on everything, but on the basic fundamentals here, I don't think our differences are so great that they should preoccupy this committee, if I may say so, although he did identify some specific matters about the structure of the program having to do with stacking that clearly are of some importance. Apart from that issue, I think we don't have any substantive disagreement that should be preoccupying this committee.

I'm sorry; I've forgotten the other point I was going to make in response to your question.

The Chairman: The state of the resource.

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Mr. Pearse: The state of the resource, yes.

Don Cruickshank is quite right. Thankfully, the salmon are very resilient fish. If you let them reach the spawning beds in sufficient numbers they will rejuvenate. It's true as well that the major problem we're facing on the Pacific coast is different from on the Atlantic coast. On the Atlantic coast it's a problem that's a result of a stock collapse. It's going to be years before you get those fish back. In the case of the Pacific coast, our main resource base, the salmon, is not in that kind of condition. Indeed, over the last decades, when the northern cod were being overfished and depleted, our salmon catches were increasing.

It's true that in the last year or so we've had some very low catches. Salmon are notoriously volatile in their abundance. Some serious long-term oceanographic changes are affecting the abundance of salmon. It's also true we also have some serious problems of conservation and management of our salmon. So while in the general picture our salmon are not in bad shape, we certainly have a lot of problems with minor stocks and certain species such as chinook salmon, which you're going to hear a lot more about and which are in very serious condition.

The point I want to emphasize is that this crisis is not a crisis of declining stocks in the same sense as it is in the Atlantic.

The Chairman: John.

Mr. Cummins (Delta): I want to thank the two presenters here this morning. I must say I'm not surprised I agree with many of the concerns Mr. Cruickshank has expressed, but I'm delighted this morning to be in agreement with much of what Dr. Pearse has said. I think his summary of the difficulties posed by this plan is quite accurate.

There are a few omissions, and if I don't get to them, I think my colleague Mr. Scott will and we'll ask you about those later. But I think you really hit the nail on the head.

I would like to go first to a recent comment you made in one of the five points you addressed early on. You suggested the plan was a kind of cold shower. Everything happens at once. Then you talked, Dr. Pearse, about the urgency. You say it's a result of economic conditions last year and we have to do something.

I think we all recognize we have to do something. But is pushing this plan forward and requiring that everything be accomplished by the end of June a wise response to the situation that's facing the industry this year, or could we proceed with the buy-back as Mr. Cruickshank has suggested? Let's deal with this buy-back, but let's hold the balance of this plan in abeyance for a year until we examine it and we address the real concerns that are being expressed not only within the fishing industry but across the wide community in British Columbia.

There's widespread opposition to it now. If we push it ahead, it's going to be very difficult to achieve the goals. But if we stopped, took a second look, and allowed industry to reject some parts or whatever, it might be more helpful.

So the question then is do we need to rush ahead? Could we not approach this thing in stages and push off implementation of a large part of this plan until next year, but maybe address the problem by continuing with the buy-back, by allowing for fee holidays and what not for those people who don't participate in the fishery this year, that sort of thing?

The Chairman: Mr. Bernier has to leave and he just wants to say something before he leaves.

[Translation]

Mr. Bernier: I must unfortunately leave you. There are two others issues I have to deal with this morning. I will make sure I follow the rest of the proceedings by reading the minutes. I want to make sure that my departure is not perceived as due to a lack of interest. I leave you in good hands with my colleagues from British Columbia. Thank you.

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[English]

Mr. Cummins: I should say before Mr. Bernier goes that he has always been a very positive contributor to the discussion of the problems we've had in British Columbia. He has a real understanding for it. Coming from a coastal community in Quebec, he does contribute in a very positive way to it. I know that we in British Columbia have sure appreciated his contributions over the last couple of years.

Mr. Pearse: Mr. Cummins, your point about the need for the rush is certainly something that concerns me. I think that part of the rush, trying to do everything in a short period of time, is adding to the uncertainty and anxiety of those in the fishery. To the extent that we can mitigate that, or offset it, we should.

I must say that this concern is what was at the root of my suggestion to remove the deadline for spending all of the money by the end of June and also my suggestion for giving a fisherman the opportunity to hold their licence in abeyance without penalty for a year.

Now with respect to the proceeding of the buy-back, it seems to me that there's nothing wrong with proceeding with that now, providing we don't announce that we're going to do it all in a great rush and drive up the price of licences in such a way that it forces vessel owners to compete with the government, in effect, in purchasing licences to retain their coast-wide fishing rights.

With respect to the licensing provisions of the plan, there's something to be said for doing these two parts of the fleet reduction in sequence, rather than both at once. In other words, you could have gone ahead with new licensing arrangements this year and then do the buy-back next year, or vice versa.

If I understand the circumstances correctly now, it's almost too late to reverse the commitment to the licensing arrangements. I could be wrong about that, but my understanding is that formal offers have been made to all the holders of salmon licences on the Pacific coast, those are legally binding documents, and if the government did not proceed with those there would be litigation all over the place. Moreover, fishermen have bought licences for the purposes of stacking them on the basis of the announcement of this plan. If the plan did not now proceed, I would expect that the minister would now be liable for creating their legal problems.

My point is simply that to turn this back at this point would be quite difficult. So what I've been suggesting, in effect, is doing the alternative, which is letting that proceed but cranking down the buy-back so it will take place more gradually over a longer period.

Mr. Cummins: Maybe you might want to jump in on this too, Mr. Cruickshank. As for the problems that you suggest may result by holding this thing off at this point, it seems to me that you may be getting into bigger problems by rushing with it. There's no doubt that there's a problem here, but rushing ahead might create more problems than holding the thing back.

Mr. Cruickshank: I don't know how you could guess that I would want to respond to that,Mr. Cummins.

Yes, sure there are problems. Any time you blunder into a program without having given it enough thought, you're going to create problems. I don't know what the hell else you can expect when you go into something like this.

We have licences that have been bought for the purpose of stacking. We know that. That's going on actively right now. But I think that if you take the exactly opposite approach to what Mr. Pearse is suggesting, which is that we put the buy-back in place and keep that going, there will be two factors.

We'll address those licences that have already been bought for stacking. With one of them, you could give them the opportunity and preferential treatment in offering them the buy-back. But I think even more important is that you have to look at what has motivated not the buyer, but the seller of those licences, because in every transaction there were two people involved.

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The guy who sold it did so because he didn't have the money to go out and compete with the processing companies or the wealthier fishermen to buy a licence. He can't buy one, so he has no choice. He can't make a living now with one licence, if there's going to be area licensing, so he sells. If there is not going to be area licensing, then many of those people want to continue fishing. So the licence could be sold back to him at the same price he paid for it.

So when you address the litigation issue, we can't ever forget that the licence isn't a commodity; it's a privilege that is granted annually at the discretion of the minister. When we get into this type of a program that permits people to think of it as a document that you can wheel and deal and trade and make money by speculating in, then maybe there is going to be litigation. But the department has invited it.

Will we drive up the prices of licences by delaying the buy-back? I don't think so, because if you operated the buy-back properly, what you would do is not buy, but take options on every licence that was offered to the buy-back committee. You'd trigger the buying all at one time so that you're not driving up your own prices.

In many respects, we are approaching this whole thing, when you take a look at the total package, almost completely in reverse order. We're going ahead first with fleet reduction. Then after that we're going to determine what the allocation is going to be between the user groups.

I'm not talking about the seiners, gillnetters or trollers; I'm talking about the aboriginal, commercial and recreational ones. We're going to do that after we've designed the fleet, without knowing what size of catch they're going to have available to them. Then, as a last thing, the minister says he is going to improve the consultative process.

We should have had the consultative process in place to tell him what to do properly. There should have been the allocation then so the fleet would know what size resource they're going to have available to them, and then design the fleet to suit that.

The Chairman: This is reporting after the fact about the size of the fleet.

As for your point about the permission from the minister to fish versus a property, has that ever been resolved? Is that still your opinion? Has it ever been tested in court as to whether a licence is a permission to fish, or whether it is a property that can be bought and sold?

Mr. Cruickshank: I think there is an SCC precedent determining that it is at the minister's discretion.

The Chairman: Anna.

Mrs. Terrana (Vancouver East): Thank you, Mr. Chairman.

First of all, let me welcome Mr. Cruickshank, who has become the name of the month. I'm glad to leave Mr. Cruickshank to the last because I heard his name so many times in the last two years.

I think you both expressed the concerns we heard last week from the delegation that came. As you were told, there was a delegation made up of several different people with different interests. I also heard it at the town hall meeting I had last Friday with officials in my riding of Vancouver East.

There are a few questions I have for you. First, I would like to say that we heard many times last week that the fish come first. This is the feeling and the opinion of everybody involved. We know that we have to save the industry.

Mr. Cruickshank, the money that has been offered for the buy-back, is it enough? Do you agree with putting the licences in abeyance for a year or two, as I have heard from some of the fishers who would be prepared to do so? Do you agree with paying royalties on the catch? I think that's what I would like to broach with you, then I have a few questions for Mr. Pearse.

Mr. Cruickshank: The first question is whether the $80 million is enough. I think so. If that was all we were going to do, I would say no, it isn't enough. It's time the fishermen took some responsibility for the proliferation that has taken place, but not all of it, as a lot of it has been mismanagement.

You asked about royalties. I've advocated royalties since 1982 at least, and probably before that. In 1982 I went so far as to design a system and work with the Department of Fisheries and Oceans in the development of a computerized economic model to show what impact it would have on the fleet if you imposed royalties at various levels. I'm 100% committed to the concept of the commercial industry paying its way through royalties.

.1015

Tying those two together, then, yes, the $80 million is enough, if we take some of the fleet out with that money now, hold some of it off, if necessary. I would like to see just what impact the$80 million would have before the 1996 season starts. But if we spent only half of it this year, it would not be serious. We'll spend the rest of it, I can assure you, and supplement that with royalties.

The royalties should be imposed now, this year. For the life of me I just can't understand why the department has not moved on royalty collection. It is universally accepted in the industry. The last bastion of defence against it was the fishermen's union, and in the report of 1991, where I recommended again that royalties be collected, the report was accepted at their annual convention without amendment. So they accepted royalties as part of the game. The comment I heard was that they didn't like royalties, but if they knew it was in the pipeline, they were going to get stuck with it, then they'd better have a system that was designed on the west coast rather than one imposed from Ottawa.

The third one was your second question, this idea of holding licences in abeyance for the year. Sure, there's nothing wrong with that. If we could convince enough fishermen not to bother fishing salmon this year it would be wonderful. We would solve the problem.

Maybe all that's required there is a token fee to be paid for the paperwork. In presenting a licence fee schedule I have said what there should be is something along the lines of a $50 minimum to look after the paperwork, and then a landing tax representative of the value of the resource. So if they paid $50 to keep the licence alive and didn't fish this year, I just can't think of a nicer solution. When there's more money to be made, then they'll get back into the industry.

But we're going into a bad year. I'm a little hesitant to say publicly just how many years I've been around this industry, but I'm not prematurely bald. I've seen lots of bad years before, and I've seen fishermen survive them. I can recall, when I did this commission of inquiry, one young fellow talking about ``the good old days''. I stopped him and I said 1960 was the worst year I've ever seen in my life and I don't want to hear any more about those good old days; the good days are right now. The potential for earnings in the fishing industry is great.

They're not going to happen in 1996. So what? People who run their businesses and their fishing operations properly will survive it. Those who don't probably shouldn't survive anyway. Everybody should have the right to go broke.

The Chairman: I still have Mr. McWhinney, who would like to ask some questions before he leaves. Do you want to share your time with him?

Mrs. Terrana: I have just a couple of things for Dr. Pearse.

The Chairman: Okay, you finish up, then.

Mrs. Terrana: I'll be brief.

One thing is the area licensing concept, which is not liked. I would like some comments from you on area licensing.

Secondly, you talked about the deadline of June 30. What about the deadline of May 24, which has to do with the area licensing? It's going to have a big impact.

The last thing I would like you to comment on is the ecological problem, because we are talking about the resource being there in cycles of four years, but things have changed. Global warming is there. El Nino is there. We have all kinds of sewage problems. We have to deal with those in a different way, I know, but these are other problems that are coming into the picture.

Mr. Pearse: First of all, on the question of area licensing, I'd like to divide that into two parts, in terms of the concern about it. One is about area licensing itself. The other, when we have gone to area licensing, is the question of stacking.

.1020

It is really the latter, the stacking, that generates the most concern. There is certainly some opposition to area licensing, but it is not nearly as vigorous as the opposition to the stacking aspect of it. I don't know what I can add beyond that.

With respect to the deadline, if you're going to do it at all this year, you're going to have to select your areas by about May 24, I should think, because we're into the fishing season. It's really a question of whether we do it this year or not, and if we do it at all this year it has to be done by about that time.

With respect to your last question, I think that's a very important issue. One of the difficulties with this whole Mifflin plan on the west coast has been that its rationale has not been adequately explained to the public of British Columbia. People involved in the fishing industry understand that we have too big a fleet, but the rest of the people of British Columbia, who care a lot about salmon, incidentally, don't see the connection between this and the fish. The constant question one is asked by people who are not in the fishing industry is what this is going to do for the fish.

The minister, incidentally, keeps saying that his first responsibility is conservation. Then we get on to talk about this rationalization plan, but the connection isn't really well explained. With respect to my earlier comments about the need to garner support for something like this, I think that has to be explained. Indeed, I would say this is the biggest obstacle to generating support.

The public of British Columbia, well beyond those involved in the fishing industry, want these fish properly managed, and they are convinced that they're not being properly managed at the moment. They want to see the government get tough and insist that those stocks get proper attention.

Of course, the connection to conservation is that the biggest threat to the health of our fish stocks is a commercial fleet that's too big. There are some fish stocks that are being overfished by sport fishermen too, I hasten to say, but overwhelmingly, in terms of the broad scheme of things, the general problem is that we're catching too many of these in many cases. It's becoming very difficult to manage with respect to protecting small stocks that mix in with the big stocks and things like that.

I'm associated with one of the major environmental groups in this country, but I must say I'm frustrated by some environmental groups that have been criticizing and opposing fleet reduction, not on grounds of environmental protection or indeed of protecting the stocks, but on some ideas about the distribution, the structure of the fishing industry, or the impacts on local communities. Those who are concerned about protecting the fish stocks should all support a reduction of this excessive fleet.

Of course, there are a number of other problems with respect to managing salmon. Habitat destruction is a major one. In British Columbia, with all the logging and mining and road building that's going on, especially in places like the Strait of Georgia, there is this constant erosion of habitat, which we have to reduce at least, if not offset. Indeed there are lots of opportunities for expanding fish habitat in British Columbia, which we should be working on, in my opinion.

Of course there are other problems, problems with the Americans and problems with high seas fishing. There are all kinds of problems here, but in the context of all those other problems, this problem we're talking about here this morning figures very importantly. It needs to be resolved regardless of how well we deal with the other problems.

Thank you.

The Chairman: When you say there should be a fleet reduction, do you mean an across-the-board reduction or a reduction in the seine fleet or a reduction in the trawler fleet? How do you see the fleet being reduced? What part of the fleet do you want to reduce, or do you want to reduce all of the fleet?

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Mr. Pearse: The fleet is now so big and the redundant fishing capacity is so great that any reduction will be helpful.

As for the buy-back, there maybe a little disagreement between Mr. Cruickshank and me about this. In my opinion, the buy-back should be the first cut - and I emphasize that it should be a first cut on a continuing program of fleet reduction - and should be aimed solely at the objective of getting the biggest bang for the buck. In other words, purchase licences for the lowest possible cost so that you get as much fleet capacity out for the $80 million.

The Chairman: Mr. McWhinney.

Mr. McWhinney (Vancouver Quadra): Thank you, Mr. Chairman.

I have to leave to perform the same role as Dr. Pearse and Mr. Cruickshank. It sounds anomalous, but I'm going to another parliamentary committee as an invited expert witness, not as a parliamentarian, so I'll have to leave. It's no discourtesy to you.

Thank you very much for coming and for giving us a synoptic overview of the problem. I think this is what we particularly seek from expert witnesses.

I'll ask you only about the issues you touched on about long-range strategy. Both of you, in somewhat different ways, spoke about involving the communities, and about almost self-government for industry, whether on a mixed basis with government - the proper federal and provincial ones - or within the industry itself, self-regulation. These are ideas that are very much the trend in government today under the title of co-partnership and getting government out.

I notice from my own researches that the government of France has been very much involved in this in its own salmon industry on the Brittany coast. I wonder if you would explain what you discussed in relation to the coastal communities as an area geographic concept. Are there links to John Fraser's plan? I think he spoke of a fifteen-member industry council. His original thrust was scientific. It was to have direct evidence of scientific data given to them directly, and they were to review and advise on it. Do you go beyond this? Would it be issues? Could I ask each of you about this point?

Mr. Pearse: First of all, the recommendations of Ambassador Fraser had to do with the creation of a conservation council that was intended to be a council that would provide a kind of credible audit of the state of the stocks on the Pacific coast. In other words, it would function like an Auditor General functions with respect to public finances. But in this case, that council would give independent assessment of the state of the stocks, not only of salmon stocks, but of all fish species on the Pacific coast.

Incidentally, while Mr. Tobin was minister he committed the minister to accept all of the recommendations of the Fraser report, the Fraser panel. That is the one recommendation that has not been acted on. I must say that in my opinion it should be acted on. There is some subsequent pressure to get moving on it.

With respect to the broader point about partnerships and so on, it's my strong feeling that there is a great opportunity here in our fisheries to engage the fishing industry in managing their own affairs. We have developed a system in which we are dealing with an industry that is one of the most highly regulated industries you could imagine. Every aspect of a fishing boat, of the gear used, and of the time and the activities is very closely regulated by this line agency, the Department of Fisheries and Oceans.

The Department of Fisheries and Oceans now finds itself in the position of trying to regulate every detail of an industry that is really working against the government. It creates an atmosphere in which everybody is dipping competitively into the same pool of fish, trying to catch as many fish as they can individually, and of course the Department of Fisheries and Oceans is trying to hold them back. It's interfering with technical development and certainly causes disputatious relations within the industry itself.

.1030

I think we're now at the point where the Department of Fisheries and Oceans is trying to do far too much. It can't continue this way. It's in the centre of continuing conflict and it doesn't work very well.

So the answer is to do what we can see in some other fishing nations, as you have mentioned, where the industry is given opportunities to try to manage some of its own affairs. It takes a fair bit of institutional change, but certainly in the Pacific fisheries, especially the salmon fisheries, there are great opportunities to turn some of these responsibilities over to the industry itself to pay for. It will work with much greater harmony than we now see.

Mr. McWhinney: Would you view macro-decisions, such as the decision to reduce the size of the fleet or the percentage of reduction, as issues appropriate for such an industry self-governing body?

Mr. Pearse: Yes, indeed I do. There have been a number of proposals, some from the government and some from outside the government, about how to reorganize the administration of fisheries. Many of these have involved responsibilities of that kind assigned to the industry.

Mr. McWhinney: Thank you.

Mr. Cruickshank?

Mr. Cruickshank: You're discussing the idea of a consultative process, Mr. McWhinney.

A factor has to be brought into it before you can decide whether Mr. Fraser's conservation council is adequate or whether we should be going beyond that. I'm sure if you had some of the senior managers from DFO in here right now they'd say ``The last thing we need is more fishermen getting involved in this damn thing. They're already eating up all of our time in meetings.''

We can go to the Pacific Regional Council. I served on that council for a period of time. It is theoretically the minister's senior advisory body. We have the Commercial Fishing Industry Council. There's a group for virtually every fishery. But the key to this thing is if you're going to have a consultative process, DFO has to start listening. It's not a matter of just attending meetings and allowing these fishermen to come and say their piece. Some process has to be put in place where they are listened to.

We're here today because they were not listened to. The round-table process in many ways was driven only by DFO, and the results that came out of it were predictable, because those were the results that the DFO managers wanted to come out of the round-table process. This happens repeatedly.

Mr. McWhinney: The comments, though, were addressed to a step beyond consultation, to decision-making. That was the part I thought was most interesting, and the suggestions. The industry council, which presumably would include the fisher industry itself and possibly would include governments, would have the decision-making rule on even these macro-issues. That's the issue.

Mr. Cruickshank: I don't see that as a function of it.

Mr. McWhinney: You don't?

Mr. Cruickshank: No. To deal with this properly, if policy is to come from the grassroots and be presented to government through our elected officials and if the civil servants are to carry out that policy, then they must have the responsibility and the right to manage. That should remain in the fishing industry with the Department of Fisheries and Oceans.

Mr. McWhinney: Thank you very much.

The Chairman: Thank you. Mike.

Mr. Scott (Skeena): Thank you, Mr. Chairman.

First of all, let me thank you very much for coming here today. Some of us seem to be travelling around in the same circles recently as a result of the crisis on the west coast.

There was some discussion here earlier this morning about this being a local issue. That's a phrase that always gets my back up when we're talking about the B.C. fishery. It seems when the401 doesn't get resurfaced between here and Toronto, that becomes a national issue, but when we're talking about a resource that is so important not just to British Columbia but to all Canadians, it's relegated to a local issue for British Columbia. I would certainly hope the people in this committee room here today would not consider it on that basis.

As some people pointed out, the B.C. salmon fishery is a positive contributor, or has been in the past, to the GDP. It is a substantial employer of people in British Columbia and has the potential to cost the Canadian taxpayers a great deal of money if it's not handled properly in terms of the displacement, the loss of revenues and so on.

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There's one issue here we have not addressed. It was just touched on very briefly this morning, so far. It has to do with the reallocation of the resource.

For the benefit of the people on the committee who may not be aware of it, in the past the resource was basically broken down...and it wasn't done by any hard-and-fast rule, but this is the way the resource was harvested. The aboriginal food fishery traditionally took 3.5% or 4% of the total catch. You can argue with the numbers, I guess, and it goes up and down, but that's pretty much the number most people agree on. The sports fishermen took 3.5% or 4% of the total cash. Commercial fishermen took the balance, which would be about 92% to 93% of the resource. That's of the total fish caught, and of course it allows for escapement.

It seems to me - it doesn't seem to me; it's an absolute fact - we now have not three groups that are vying for the allocation of the resource but five. Over the last fifteen years, since Mr. Cruickshank has written his report, we have the aboriginal food fishery, we have the sport fishery, we have the commercial fishery; but we now have a commercial sport fishery, which is new to British Columbia, and we have a commercial aboriginal fishery, which is a new concept that was started in 1992. This is without even talking about the treaty entitlements that are coming down the pipe.

It seems to me when you're asking the industry to reduce its capacity by 50%, and the minister and others, including the witnesses here today, are making statements that the fleet is far too large, the capacity of the fleet is far too large, it's overcapitalized, there's far too much fish-catching power out there, on the one hand, and on the other side the government is implementing policies such as the aboriginal fishing strategy, and more to the point, when we see the Nisga'a agreement in principle, which is going to allocate 25% of the Nass River fish to the Nisga'a people - as a British Columbian, I become very cynical. I ask whether the whole purpose of rushing through this plan for fleet reduction may not be a means of accommodating the fish that are intended to be reallocated away from the commercial fishery.

While I appreciate - and it was brought up here this morning - that the people who are currently licence-holders do not per se have a property right, by tradition, by practice, the established general allocation for the past fifty or sixty years in British Columbia is changing.

I would quote Mr. Fraser from several weeks ago when he attended a conference. I think you were there, Dr. Pearse. As a matter of fact I'm sure you were there, because we spoke at that conference. Mr. Fraser said it is not right to talk about this fishing plan and it's not right to talk about what's going on in British Columbia right now without saying right up front that the federal government is reallocating the resource.

I'd just like to have your views on that. I appreciate we're dealing with the Mifflin plan right now and the proposed changes to it, or the changes you are suggesting and advocating, but I don't see how you can de-link those two issues. I'd certainly like to have your views on them.

Mr. Pearse: Thank you, Mr. Scott. You're touching on a very sensitive issue and a very important one, this question of reallocation.

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The question of the allocation of the catch is always the most contentious issue in the fishery. We should work hard to find ways of trying to overcome that problem, in order to get on with the rest of the business of managing the fishery. In my opinion, one of the greatest accomplishments in the last few months has been an agreement by everybody in the fishing community, including the minister, to refer that question to an independent arbitrator to get it off the table so we can get on with the other difficult problems of managing the fishery.

About the allocation implications of the Mifflin plan, I'm afraid I can't say very much about that, because nothing inherently in the plan would alter that allocation. The implications are there. It could change, depending on how we use the buy-back funding. If you changed the fleet composition, the balance between the sectoral groups, for example, it might have implications for the allocation.

The other thing is that the plan, of course, refers this to the independent arbitrator, and that's going to be dealt with out there.

Mr. Cummins: It refers the sectoral allocation to the department, to an independent arbitrator, but it doesn't address the allocation issue my colleague raised.

Mr. Pearse: About the recreational and native fisheries, yes. I was just going to come to that.

About the whole business of native entitlement, as far as I'm concerned that's a legal question, apart from the native involvement in the regular commercial fishery, which is not really at issue. But how we deal with the Indian right to fish, the aboriginal right to fish, as far as I'm concerned is a legal question. We have to come to grips with it, because if we don't, we end up with this open-ended, administratively difficult thing to deal with, where we have open-ended, undefined entitlements.

About the Nisga'a agreement, and to leave aside the extent of that entitlement, it seems to me the good part about it is that it defines precisely how many fish the Nisga'a people are going to be permitted to take out of the Nass River. It also commits the Nisga'a people to recognize the Canadian Minister of Fisheries as the final authority on the management of those stocks. Those two aspects of it seem to me to be important benefits.

About the extent to which the Indian catch is permitted to increase, I really don't have a view on that. It seems to me what we have to do is to drive the hardest bargain we can. Whether they did or not, I just don't know.

Mr. Scott: Mr. Pearse, with all respect, the Supreme Court of Canada two weeks ago actually handed down a decision in the Nikal and Lewis cases, and there are three more fishing appeals. The Supreme Court of Canada has said the federal government is the final authority on fish management. So why do you have to give up 25% of the Nass River fishery to get the agreement of the Nisga'a people on what exactly the Supreme Court of Canada has said? I don't understand that.

I don't want to be argumentative with you, but I couldn't let that go unchallenged. If what you're saying is the allocation for aboriginals is purely a legal question, then I would suggest to you - and again, I don't want to get into an argument with you over this, because I realize this is not your forte, but I'm asking for your opinion - if it's a legal question, the jurisprudence on the books right now, in the Delgamuukw, Lewis, Nikal, and Calder cases, is very clear. The aboriginal people of Canada have a right to fish for food and ceremonial purposes. There has never been in Canada one instance that I'm aware of - and certainly these are all the leading cases - where a court has said there is an aboriginal right to harvest fish for commercial sale.

What is happening, I would suggest to you, is not a legal requirement of the federal government, it's a political deal. That's what is going on in British Columbia right now. It has happened without public debate. It has happened without public discussion. We know the public of British Columbia, by scientific polls, is opposed to the idea of including fish in aboriginal treaties. But it goes on as we speak and it is a reallocation of the resource away from the people who have traditionally had the benefit of that resource.

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I'd suggest to you that you cannot divorce the Mifflin plan from that. That is a reality. It is going on right now.

As you can tell, I feel fairly passionately about it, because I think the government has an obligation to deal with people fairly, to deal with people in an upfront manner and to be open and honest about what it's doing. We're talking about a fishing plan and a restructuring of the industry on the one hand, and nobody is even talking about this other side.

There are two other aboriginal groups that have traditional claims in the Nass River area. There's no reason to expect that they would want any less than what the Nisga'a have received, or are proposed to receive, under their final agreement. If that's the case, you're looking at more than50% of the Nass River fishery taken off the table for all time.

The Nass River fishery, for the benefit of some of the committee members here, is one of the most productive rivers in British Columbia. It's not the Fraser River and it's not the Skeena River, but it's probably number four or number five. My colleague here probably could give details. It's a very productive river.

This is the very first agreement. We haven't even started talking about what's going to happen in the Skeena and what's going to happen in the Fraser, but there's no reason to believe thatErnie Crey -

The Chairman: Does anybody want to tackle that?

Mr. Cruickshank: I'd certainly like to make some comment on that.

I don't think you're alone as a cynic on this topic, Mr. Scott. The B.C. coast is rampant with cynicism, and it's being fed and fueled by DFO. As you've acknowledged, we've gone well beyond the legal requirement for food, social and ceremonial purposes. This is a policy that I think has been put in place by DFO personnel.

I heard the comment that an independent arbitrator is going to look at this. Independent, hell. People who know who Dr. Art May is know he is not independent from DFO; he is the former deputy minister. This is a scam, and the people on the west coast know it. The commercial fishermen aren't expecting a fair break from this independent arbitrator.

I may be speaking far more bluntly than you're used to, but you take me with my warts or don't take me at all. This business is not fair. It's not equitable in any way, shape or form. It's a product of DFO. It's not a political policy decision, I don't think. I think it's a decision that's been made by the minister's staff, and they're going to ram this down the throats of the people in B.C. just as they're trying to ram down parts of the Mifflin plan.

One of the reasons I say the Mifflin plan must be slowed down and we must take out that stacking of area licences is so we have time to consider thoroughly all of these other ramifications, because they must be taken at the same time. You can't isolate them totally. But today we must address the Mifflin plan, so let's address it in a way that leaves it open for the other factors to be taken in.

The Chairman: We're running out of time. Mr. Wells, do you want to go?

Mr. Wells: Yes. Thank you, Mr. Chairman.

Mr. Cummins: Could Dr. Pearse answer that question?

The question is basically quite simple. The Mifflin plan wants to downsize the fleet by half, but we're facing a downsizing of catch in the industry by half due to the treaties and AFS arrangements. So if you downsize by half and reduce catch capacity by half, all that's happened is the fleet's incurred additional debt but has gotten nowhere. I would like Dr. Pearse's comment on that.

The Chairman: He just looked relieved when I went to Mr. Wells.

Do you want to tackle that, Mr. Pearse?

Mr. Pearse: Perhaps I'll make a brief comment.

First of all, please don't misunderstand me. My point was mainly with respect to your question about native claims. It's very important that we negotiate settlements with natives in British Columbia. It's terribly important; it's an urgent matter. I think the people of British Columbia generally want us to do that. In my opinion, it would be dangerous not to do so, from the point of view of the commercial fishing industry.

You probably know this, but in the state of Washington they negotiated a settlement of I think 28% for the native tribes of Washington. The fishing industry objected to that and it went to court. The court gave them 50% because they couldn't think of any reason not to divide it equally. That could happen here.

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Mr. Cummins: No, that is fundamentally wrong. Here the situation is exactly the opposite. Here the government is prepared to negotiate away 50%, and I'll bet you a dollar to a doughnut or any other bet you want to make that the courts say that nothing is required. That's what the courts have said up to the appeal court level in British Columbia - no fish required, no separate native commercial fishery. It's the exact opposite. In the state of Washington the Boldt decision was based on a treaty and a treaty obligation. We're not dealing with that in B.C.

Mr. Pearse: I'm not an expert on this, so I'd better not challenge that comment.

I would like to add that if there were any question that the Mifflin plan would have the effect that you're fearing, that it would involve a reallocation, then I would advocate that everything be done to prevent that. It would be in effect unacceptable. If the fishing industry thought this was going to be the result of this thing, then I'm sure there would be total opposition to it. I thought we had some assurance that this was not going to be the case, and therefore we could proceed with fleet reduction without the threat that this was somehow going to adversely affect their share of the catch.

Mr. Wells: I want to get away from the AFS for a minute, but I would ask the clerk if he would supply the committee with the copy of the Supreme Court of Canada decision that Mr. Scott refers to. If that was decided two weeks ago, then this committee should have a copy of it. Also, when the other three cases are decided by the Supreme Court I would ask if we could have those cases right away so we could be informed immediately. It's an issue that we shouldn't have to wait two weeks to get information on as far as the decisions are concerned. We should have them immediately, andMr. Scott, I think you'd agree with that. As a committee this is an issue we've discussed at length.

Mr. Cruickshank, your bluntness is not out of line in this committee. We deal with fishermen and fishermen's organizations on a regular basis, so bluntness is the order of the day. We appreciate that.

I want to ask you some questions on the displaced crews, and I want to get into the issue that was discussed by one of you at least. First, who can tell me how many displaced crew members we are talking about with this Mifflin plan? Has anyone quantified that?

Mr. Cruickshank: It's not possible. We don't know how many boats are going to be retired, we don't know what the target fleet is going to be, and we don't know what the mix is going to be. If you tell me how many boats are going, how many of them are seine boats, how many are gillnetters and trollers, then we can target the number of displaced crews. But the plan is -

Mr. Wells: What is the total crew complement right now in B.C.?

Mr. Pearse: The department has made some estimates, but as Don points out they're difficult to estimate. I believe their estimates are between 2,500 and 3,500.

Mr. Wells: So that would be displaced?

Mr. Pearse: Yes.

Mr. Wells: What you seem to be proposing, which I thought was a good proposal, is adjustment assistance, in other words some human resources funding to help them. Are you talking about retraining or green projects? I know you talked about habitat, stream rehabilitation and things of that nature. Can you expand on the sorts of things you feel we should be including there?

Mr. Pearse: I wasn't very specific, but I would have thought it would involve retraining to help people move out of the fishing industry. It might be training to help them move into other aspects of the fisheries, other fishing activities, possibility things like salmon habitat and stream rehabilitation and related activities like that.

Mr. Wells: This would be funding in excess of the $80 million, I'm assuming.

Mr. Pearse: Yes, my suggestion was additional funding for that purpose. However, I think it's so important that if additional funding could not be found, some of the $80 million could be used for that purpose.

Mr. Wells: On the question of allowing the fishers to bank their licence for a year with a$50 administration fee, which seems to be something you both agree on, on the face of it, it's a good idea. My only concern initially is whether this would then discourage some of those who might otherwise sell their licences and help in the rationalization and downsizing. Is there a downside to the banking of licences that could affect this whole plan?

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Mr. Pearse: It almost certainly would remove their feeling on the part of some licensees that they should sell, because they wouldn't then have to, as they could postpone that decision. To that extent, it would slow down the buy-back, but it wouldn't affect the reduction in active catching power out there in the interim period. As long as those who chose the option would not fish - they'd keep their vessel tied up - that doesn't seem to me to in any way weaken the rationalization program by postponing it.

Mr. Wells: So even though there may be a negative component, on balance, you think it would be the best thing to do for the people themselves? It would give them that extra opportunity to decide their future, because this is a huge decision they'd be forced to make.

Do you agree with that, Mr. Cruickshank? Obviously, in your statement you were -

Mr. Cruickshank: Not totally, because I don't think the licence fee the fishermen are facing is what's driving the sale of boats or licences right now. That's small potatoes.

To stay in the fishery in a way they can continue to earn a living, they're going to have to put up $70,000 or $80,000 as a small-boat operator. If they're one of the independent salmon seiners, it's $400,000 or $500,000.

Compared to that, the licence fee is really nickels and dimes. I don't think that's driving the.... It's not going to interfere with the number of boats that might be offered to the buy-back. Those people who want to retire are going to offer their boats and get out of the industry, but it shouldn't be done with a gun at their head, because you can no longer earn a living the way we're designing the system.

Mr. Wells: Dr. Pearse, you talked about getting the best bang for the buck. You talked about the type of buy-out. What's the average value of the licences? I know it would vary compared to the type of fishery they're involved with. Can you give me a range of the values of the fishery and where you would recommend the buy-out came from to get your best bang for the buck?

We've had these same problems on the east coast. It's almost a mirror except....

Mr. Pearse: You'll be hearing later today from people who know much more about the market for licences than I, but my understanding is that you can put them into two categories. One is the so-called small boats, which are gillnetters and trollers. A typical licence for them might range between $50,000 and $75,000, or something to that effect. The big boats are the seine boats. Their licences are much more expensive, ranging into the hundreds of thousands of dollars. It could be $200,000 to possibly $400,000, something like that.

Incidentally, it's difficult to be very clear about this because the price is based, in the case of the seine boat licences, on the number of tonnes the licence authorizes. In the case of the smaller boats, it's based on the number of feet in the length of the boat. They speak about prices in terms of so much per foot in the case of the small boats and so much per tonne in the case of the bigger boats. We're talking about hefty amounts of money if they're going to stack them, as Don says.

Mr. Wells: I think Mr. Verran had a question, so I'd share my time with him if we have another minute or two to give him an opportunity.

The Chairman: Mr. Verran.

Mr. Verran (South West Nova): Thank you, Derek.

Mr. Chairman, I want to make a comment. I thought I was going to wind this up and be on after Derek Wells, the member for South Shore in Nova Scotia. I want to say how pleased I am, as are other members, I'm sure, that these witnesses could be here today. I know that in our previous hearings on the west coast salmon fishery we heard from so many people about Mr. Cruickshank especially. There were requests for his involvement over many years, going way back to the Roméo LeBlanc days.

You mentioned not to rush. We should stand back and take a look at dates. I want to say that the dates and the time limits that have been put on you and your people in the coastal communities in British Columbia - this is a statement, not a question - are certainly nothing new.

As for us from Nova Scotia - I represent southwest Nova Scotia, and Derek is my next-door neighbour - there have been occasions when we read in the paper on a Monday morning that DFO was telling us that as of last night, at midnight, this particular facet came into play. Yet we didn't have any notice for it. So that certainly isn't anything new to us.

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I wonder if you would be kind enough just to relate to the committee and to those present, going back some years, what your involvement in the fishery has been. Have you been a bureaucrat in the Department of Fisheries? Have you ever worked with the Department of Fisheries? This is interesting. I would just like to know where you started out really actively in the fishery.

Mr. Cruickshank: My history is as a processor, not exclusively, but I started off as a gear supplier. I spent certainly most of my working life as a processor.

I wound up owning a company called Seafood Products. I had processing plants in Vancouver and Port Hardy. Compared with the companies you'll hear represented later today, ours was a relatively smaller, moderate company with 350 or 400 employees.

My involvement certainly was not as a bureaucrat. I have never been an employee of the government at any time. In 1982, at the request of Roméo LeBlanc, I left my company in the hands of my employees and colleagues and moved into the Pacific regional offices to chair this fleet rationalization committee.

So I take all the credit, and everybody calls it the Cruickshank report. In response to the member for Vancouver East, every one of us is going to have 15 minutes of infamy; this is mine.

There were five people. When we came back to Ottawa together to discuss the report, the experience on that committee was such that I was the only one who didn't qualify for a senior citizen's air rate. I think there were 240 working years of experience in the committee.

Through that involvement, I did spend eight or nine months occupying an office at DFO because I knew I couldn't do this out of my own business. I would always be a fishmonger if I was there taking the phone calls and running the business. So I moved into the department's offices and worked out of there.

Mr. Verran: Thank you.

I just want to say in closing up and turning it back to my colleague, to Dr. Pearse andMr. Cruickshank, I'm very impressed with your knowledge and your seemingly unbiased ideas and recommendations. The message you brought to us today is certainly nothing new to anyone around the table. You could believe that it was transplanted from the east coast to B.C., not necessarily Newfoundland, but certainly Nova Scotia.

We've been through it before. We understand your problems as you have stated them. We will certainly be well aware of the stacking process and all the other things you have mentioned. We'll certainly be taking them into consideration in the committee.

Having said that much, I just want to thank you again for a very interesting presentation.

The Chairman: Mr. Culbert would like to have a moment here to finish up.

Mr. Culbert (Carleton - Charlotte): Thank you very much, Mr. Chair.

Again, as my colleagues have capably said, thank you very much for being here this morning. I have three very quick questions. You have answered one, but you might want to just quickly touch on it.

Last week, as many people from the industry made presentations to this committee here in Ottawa, there was certainly a great deal of encouragement and support that was requested to be given to a licence freeze this year, with no consequences. I heard your opinions on it, and I think you concur with that.

I was very interested in Mr. Pearse's comments to allow an industry board to work within certain criteria in order to manage the rationalization of the fleet as it equates to the available resource. I was just wondering who or what body, or whether there is a body, you were thinking of specifically that has the capabilities of doing that and touching all the components of the industry to provide that representation.

The other question I had was are either of you aware of any types of socio-economic studies carried out in any of the coastal communities in regard to alternatives to the current fishing industry as it goes on there? Are they looking at other areas that would fill the gaps any decline would leave?

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Mr. Pearse: With respect to your last question, over the years there have been studies of coastal fishing communities, and I believe the Department of Fisheries and Oceans has also done some surveys, if not studies, of the circumstances of coastal communities and their dependence on fishing. Apart from that general comment, I can't answer your question more specifically, but I'm sure there is literature on that subject.

With respect to your point about the licence freeze for one year, I'm pleased that other people have brought the idea to the committee, because although it may not end up being a major option that will be taken up, it nevertheless gives fishermen an alternative to having to make very difficult choices in a very short period of uncertainty.

With respect to your comment about the fishing industry board, yes, there are examples - not here, but in other fishing nations - where the fishing industry does take on wide-ranging responsibilities for managing the industry itself. You can find examples in Australia, New Zealand and Iceland, and almost certainly others I'm not familiar with, where organizations exist that enable the industry to regulate itself to a large extent.

I am aware of no example in Canada that does the kind of active involvement I was speaking about. We have a long and varied history in consultative structures, which Mr. Cruickshank referred to. That's not really what I'm talking about, however.

Sometimes I agree with Don that the Department of Fisheries and Oceans has almost paralysed itself with excessive therapeutic consultation mechanisms. We don't need any more of that, in my opinion. What we do need is ways of engaging the industry, not only in catching fish, but in managing fish and in managing the fleet's affairs.

The Chairman: It's really a corporate fishery. They don't have the type of inshore fishery we have in eastern Canada or western Canada. It's much easier for them to regulate their own industry because there are so few of them. Their capacity is so large that for their own survival they have to do it.

But with ours - with the small-boat fishery, with so many different seasons, with so many people and with the different types of fishery - it's the very opposite. I don't see how you can compare Canada to Iceland, for example. Do you think it's fair to compare Canada's fishery to Iceland's?

Mr. Pearse: I think comparisons of that kind are actually very helpful. They show you how bad our own administration really is. We have a very costly bureaucracy in the Department of Fisheries and Oceans, and we have a catch that's not all that different from Iceland's. To me it's a good illustration of the inefficiency of our management in this country.

Mind you, I hasten to agree that there are substantial differences between the two countries and we have to be careful about making comparisons.

Mr. Culbert: Thank you, Mr. Pearse, but I would like to hear Mr. Cruickshank's comment on those three points I made, perhaps to give some balance, if that's the case, or maybe not. We'll see.

Mr. Cruickshank: You're quite correct. We do agree on this concept of freezing the licences. I can't see any negative there.

On the consultative process, I would be reluctant to suggest we do this by economic theories. We've had our fill of economic theories. It's time now for some hands-on, pragmatic approaches to this. We've had enough experience on the west coast to devise the consultative process we want, as long as they will listen to the participants.

You're going to hear from some very eloquent speakers here later today, people who are truly experts in this field, who spend half their time at meetings. If they don't know how to build that process now, I don't think anybody in New Zealand or Iceland can help us. You have to take DFO out of the equation, because if they're driving it, it's no longer a consultation. They're looking for people to nod their heads in agreement.

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The third question was on whether there have been socio-economic studies on coastal communities to try to help fill this gap. There's been very little work done by DFO to identify the fleet locations, but even that is not current. For many of the licences, DFO doesn't even know who fishes them because of the leasing arrangements that are made. For example, they can't tell you who is fishing roe herring licences.

There are about 1300 gillnets and 250 seines. Because the licences are not being operated by the licence-holder of record, they can't even tell you what coastal communities those licences are in. That's the case with many of the fleets. That's something that definitely is needed. It should have been done long before we went into this type of process to strip the fleets out of those communities.

What's going to be the impact? I know what it's going to be in my town. I know what it's going to be in some of those other towns. I know what it would be in parts of Nova Scotia because I'm familiar with the South Shore. I can just imagine if the same thing were to happen in Shelburne as is going to be happening in Alert Bay or in Port Hardy: they would hang the fisheries officers.

Mr. Verran: And the member.

Mr. Cruickshank: Yes. I think that among other things, the department is downplaying just what kind of summer they're headed for. I think there's going to be a long hot summer in B.C.

The Chairman: Thank you very much. Our time is up. I tend to agree with you that it is an explosive situation.

On the early news this morning the CBC carried a story from the Pacific coast fishery. I hear that some major movements on the B.C. fishery are going to be announced sometime today. I'm not sure what's going on, but something major is going to happen there today.

I think you're right: it's very explosive. You have been very helpful to the committee in helping us to make up our minds about our suggestions to the department and to the minister, and for that I thank you very much.

Mr. Cruickshank: Thank you for the opportunity.

Mr. Pearse: Thank you very much for hearing us.

The Chairman: I'd like to call Mr. Taylor, Mr. Murray and Mr. Hunter to the table.

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Gentlemen, could you identify yourselves and who you represent? We have another group we would like to reserve at least half an hour for, so perhaps we could begin.

Mr. Mike Hunter (President, Fisheries Council of British Columbia): I am president of the Fisheries Council of British Columbia, representing major processing companies in B.C. I have been asked by the group to introduce them to you, and then I'm going to ask Mr. Rombough to speak first on our presentation.

With me today is Greg Taylor, who is leading the delegation of fishermen who are here before the committee to present you with some positive views on what's become known as the Mifflin plan. Also here is Les Rombough, an independent fisherman representing the coastal community of Campbell River.

Before we start, I have to say on behalf of all the people who have been here over the last couple of days that we're somewhat disappointed that you have had a lot of time hearing from people expressing opposition to this plan, and you're only giving us an hour or so to indicate some of the positive elements we feel this plan represents for the future of our business. I want to put on record that I feel that's a little unbalanced. You should not be swayed by the loud voices, but you should be giving equal time to people who we think are in majority, who support what the minister is planning to do.

I wanted to say that for the record, sir. With no more ado I'd like to ask Les to make his presentation to you.

Mr. Les Rombough (Head, Campbell River Gillnet Committee): I would like to thank you for having us here to speak today. It's a great honour to talk to you and present our views on this plan.

I'm a small-boat operator from a coastal community in British Columbia. I come from Campbell River.

I would like to make the point very clear at the beginning that as a commercial fisherman I am broke. We had a disastrous fishing season last year and we're looking at another disastrous fishing season this year.

In discussing this plan, we've had the term ``cold shower'' mentioned a couple of times. I'd like to say to all of you, and I'm sure you would agree with me, that to wake up one morning and have a negative income in a given year is a cold shower, and it's an eye-opener. And to realize that the exact same situation is going to happen again this year is very, very realistic. The situation I find myself in as a small boat operator in a coastal community is very real and it's a very difficult situation for all fishermen on this coast right now.

I've been involved in this plan, realizing that we had a problem in this industry, basically from the beginning of it. We've worked hard in our area to come to grips with what had to be done to maintain economic viability in this industry for us. As such, I was involved in the Pacific round table. I want you to understand that in working towards this plan and coming now to the point where I support this plan and urge its implementation, I have not spent this year working on this plan to create a situation that was going to make my disastrous situation any worse, or the situation for the people in my community and my fellow fishermen. We've put a lot of work into this, and we think that what's on the table now and what has come forward is something that is going to help this fishery.

I'd like to commend Dr. Pearse for his presentation. For a person who has just indicated that he is no longer a member of the west coast fishery, and is looking at it from the outside, his perspective of the situation was very perceptive. I commend him for his insight into the situation with our fishery.

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As a member of the Pacific policy round table, we were a part of the group brought together to make the recommendations that would be the meat of the rationalization plan we're talking about here. This policy group was made up of 70 people who came from every possible aspect of theBritish Columbia coast. Every fishing sector was represented. The Native Brotherhood was represented. The processing group was represented. Coastal communities were represented. There were 70 people involved in it. Very many different ideas were put forward as to what could be done to revitalize this industry.

It was very obvious at the very beginning that achieving consensus among all of the groups of this round table was not going to occur. The ideas were too diverse, the groups were too diverse, and the ideas were too difficult for some people to compromise.

We had panels for each group that met independently for months. It was an exhausting process. These panels would report back to their constituents for input and feedback. This process did go on for months. We tried very hard to bring the groups together to come up with one idea everyone could support and get behind.

It was made very clear by Mr. Tobin when he initiated this plan, and subsequently byMr. Mifflin, that were we unable to reach a consensus as a group, the government would take the action necessary to accomplish what everybody in that process realized had to occur, that the fleet size had to be reduced.

In the end, we did not reach consensus. Our recommendations were put forward, and the government developed the Mifflin plan, as it's now called. This was a compromise of everyone's position, between industry and the DFO, to come up with a plan that best suited everyone's needs. Our plan was not accepted in its entirety. Certain elements of it were. Nobody's plan was accepted in its entirety.

The plan has been presented to us. We feel very strongly that we have to go ahead with this plan. It's the best plan we could come up with, with that group of people, representing that many people. This was what we accomplished.

There's been some talk that perhaps we could delay the plan, but we can't, unfortunately. The resource won't let us. Our backs are to the wall. We've gone too far. We have a situation this year on the coast where there's only going to be fishing in the northern half of the coast. The stocks of the Fraser River are not fishable this year. There's no surplus to harvest.

If we were to keep the system in place as we have it right now and every boat went to the north coast to fish, we would create a situation DFO could not manage. They have stated very clearly, with new risk-aversion policies, that if a situation occurs they cannot manage, there will be no fishery.

So it's not an alternative to do nothing this year, because quite realistically, half the fleet cannot fish this year. There isn't room and there isn't the fish to accommodate this.

As independent operators, realizing that we have to cut this fleet in half, we have two choices to do it. Regardless of those choices, one ingredient is very common. That is, each one of us is going to have to buy out, one way or another, another fisherman to reduce the fleet by half.

Initially, we were told there would be no money coming from the government and we would be funding this ourselves. We had the opportunity to come up with an industry-funded buy-back, by which we levied on ourselves an adequate amount of money to buy out half of the fleet over time. The other alternative was to go to area licensing and encourage area stacking, which forced people to buy another licence in order to fish the entire coast.

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We looked at both scenarios very carefully and realized it was the same cost to us regardless of which route we took. One was quicker than the other one, but which was the best alternative to take? We felt as a group - although there was not total consensus, there was a small majority - that the area licensing scenario was a better way to go. It accomplished what we need immediately. We reduced the pressure on the stocks immediately. We gave the DFO the opportunity to manage the resource in a manner that gave the opportunity for economic viability to the fishermen in that area. It reduced the pressure on the stocks and allowed more reasonable fishing opportunities.

When it was decided that the area licensing and stacking scheme was a more reasonable way to go, very serious consideration was given to the alternative of this industry-funded buy-back, but it was over time, it did not reduce the pressure on the stocks, and it did not give us the immediate relief that the resource needed.

I think they went in the right direction by selecting the area licensing and stacking alternative. We were very surprised when we got the $80 million as part of a buy-back. We did not expect to get this. This was something that people had demanded. It was some groups' suggestion. It was their plan. It was a part of the plan. It was incorporated. It wasn't $200 million, but it was $80 million.

When they announced the buy-back and area licensing as the package, there was an immediate interest in buying up licences so that you could stack, so that you could fish the remainder of the coast. It was quite surprising the interest in buying up these licences. There was a little rush, which brought the price of the licences up. Some people think that was a bad direction to take and a bad idea, but I don't think a better thing could have happened.

The prices then came up to a level at which people now could seriously consider selling their licences. You have to understand that there were a great many people in this industry who did want to leave. Last year, if your life depended on it, you could not get out of the industry. There was no option. You couldn't sell. If you did sell, it was at a price that was so unreasonable no one would consider it. We were stagnant. People were under severe economic stress and pressure.

With the announcement of the area licensing and a little movement in the price of licences, there was activity. The price of the buy-back value for people wanting to retire has gone up. People who want out of this industry have the opportunity to leave with some dignity, and this was a very, very important part of our thoughts on this plan from the beginning. It was important that those people have an opportunity when they left this industry.

When Mr. Mifflin came to Vancouver last Thursday to meet with industry because of a lot of negative input on the coast - it's incredible, you can get it from any newspaper - he wanted some assurances from industry that he was going in the right direction and that if there were such big problems what some recommendations were and what directions he could go in that would alleviate some of the concerns.

There were some flaws with this plan. Although we felt that there was no alternative to area licensing and stacking, that it had to go ahead, there were some flaws. The main flaw in this program was that the social conditions that evolved from it were not given enough consideration. I think it was a flaw.

We have recommended very strongly to the minister that he sincerely look at the situation being caused by fishermen who actually are being forced out of this industry.

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As a boat owner, I have choices. I could actually sell my licence, make some money, and move into another opportunity, or I can buy a second licence. Right now that would be a very healthy investment, because you're going to be fishing in an area where there are fewer boats. It's a very good investment. I have choices.

A person who did not own a boat, worked on another boat, did not have a choice. If his boat was going to be doubled up and out of the fleet, his job was gone. In hindsight this was very serious, and we felt that it had to be very seriously addressed and that some very clear and real perspectives of what the government could offer in the way of adjustment income, retraining, etc., were very important.

We also realized that this $80 million could very possibly not be spent by June 30, and I agree with what Dr. Pearse said. I don't believe there is a necessity to have that money spent by June 30. That was a pressure put on that money by Treasury Board, and I feel the government should very seriously consider how important that money is to this industry and that there are some areas that need consideration.

First and foremost is habitat management and salmon enhancement. The reason we have no fish to a large degree is that civilization is encroaching on very important rearing grounds, spawning grounds. It's a natural evolution, but it has caused incredible damage and is causing incredible problems to the salmon stocks. We feel that some very serious money has to be looked at over time and that possibly if this $80 million is not spent on the buy-back, we should keep it inBritish Columbia and use it in a manner in which it can help this industry, rather than just sending it back because we weren't able to use it in the buy-back.

We came to Ottawa to support Mr. Mifflin's plan, because we have to go ahead with something. This is what we came up with, this is our plan. We have to do it by the 1996 season, there is no alternative. We are supporting him very strongly on this.

There is a lot of support on the coast for this plan, although, as you're well aware, if you're supporting this plan you're not demonstrating, you're not protesting. We're not in the news, we don't make good news. We're buying licences. We're going on about the business of being fishermen, and I can guarantee you that a very large percentage of the people on the coast of British Columbia fall into what we call the silent majority.

There is support for this plan, but there is one overriding issue that has to be clarified to give the fishermen in this industry the assurance they need to stay in this industry, to invest and look at the future, and that is guaranteed access to the resource. Guaranteed access to the resource comes through guaranteed allocations, and allocation is the key ingredient at this particular moment.

We don't know where we stand with regard to inter-sectoral allocations between natives and sport fishermen, and we don't know where we stand on inter-gear allocations and inter-area allocations.

We have assurances from the minister, and actually from both Tobin and Mifflin, that they are giving this serious consideration and that with the appointments of Dr. May and Mr. Kelleher they will be dealt with. But the fleet is sitting out there right now in a very uncertain and very fearful mode, and that's why a lot of people really are afraid and this timeframe is a problem.

I again support Dr. Pearse's recommendation that to people who do not have the confidence to go ahead with their choice this year, be it gear or area, a one-year holiday be given, so that they can wait and see exactly what the allocations are going to be and where they're going to stay. I don't think it will have any impact on our fishery this year, and quite frankly we have a situation in which half the boats can't fish this year. I think you should seriously consider that as a very realistic opportunity.

There is one other area on the allocation issue, Mr. Chairman, and I'd like to ask your permission to have one of my colleagues come to the table for a couple of minutes to address the issue of the chinook allocation on the west coast. It's a very important issue. He is better versed in it than I am.

The Chairman: Go ahead.

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Mr. Rombough: This is Mike Griswold, a troller from the Gulf Trollers' Association.

The Chairman: Welcome, Mike.

Mr. Rombough, you're a gillnetter, are you not?

Mr. Rombough: Yes, I'm a gillnetter.

Mr. Mike Griswold (Gulf Trollers' Association): I'd like to thank you for the opportunity to appear before you.

I would like to reiterate that the industry's most common concern and gravest concern in this exercise, without fail, has been the security of access to the resource.

My credentials in this operation are that I was a participant at the Pacific round table. I've been involved in the advisory process for a while. I have a seat on the Fraser panel on the Pacific Salmon Commission, so I'm intimately aware of the resource, specifically the chinook resource on the west coast of Vancouver Island.

We as a fishing community, as industrial users of the resource, need to have an assurance that what benefits accrue from this Mifflin plan will be deposited back into the industry. It is the viability that we hinge our decisions on right now.

Specifically, there is a chinook crisis on the west coast of Vancouver Island. It looks as if, according to the department and the biologists and the best advice DFO has to offer, there should be no available harvest of the chinook on the west coast of Vancouver Island. Accordingly, the commercial fleet has been told that there will be no available harvest, there is no harvest. The native community on the west coast of Vancouver Island has told the world that they are not planning to make a harvest.

We are concerned right now that there are plans afoot to conduct a recreational fishery on those stocks. This unfortunately would be the wrong indication to the commercial community right now. It would indicate that there is no need for conservation of those stocks, and that the benefits from downsizing the fleet would accrue to a different user. Thus it makes Dr. May's job a little harder.

Canada has taken a position in the courts in the United States as an intervener to close down the Alaskan fisheries, and as part of our credibility we're talking about closing our own commercial fisheries. We lose face and we lose credibility in the court if we do allow a fishery.

Once again, I'd like to reiterate that the commercial side is looking for some indication from the government that there is some good faith in how the benefits from this plan accrue. We are looking to see that the government makes the right move and announces appropriate management action with regard to west coast chinook stocks. That would put to rest a lot of fears within the commercial community, and you would get a lot more commercial users coming onside for this plan. Thank you very much.

Mr. Rombough: Thank you, Mr. Chairman. That concludes my report.

The Chairman: Mr. Hunter.

Mr. Hunter: Thank you, Mr. Chairman and members, for the invitation to speak to you on this.

I'd like to go back to first principles here and remind ourselves of what the objectives were when former Minister Tobin established the round table and established the rules under which we all struggled and operated and worked hard for a twelve-month period. To say that there has been no consultation on this issue is frankly an insult to those of us who spent many, many hours - and I spent fewer than a lot of other people - trying to come up with some advice to the Government of Canada on how to deal with the issues that Dr. Pearse described this morning, I think correctly, as a crisis.

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The rules were that any plan has to meet the twin targets of conservation and providing for economic sustainability. Well, what are the economics of the fishery? The organization I represent, the Fisheries Council of B.C., is an organization of processing companies that, through their operations, add about 100% to the value of the fish landed at the dock by the fishermen.

We must never forget that the processing of fish in Canada is part of the fishing industry and part of the economic benefits we gain from our marine resources. I am proud to represent that particular sector in B.C. It's a sector that has been going through some very difficult times for a lot of reasons I will not bore you with. Suffice it to say, salmon, in an average year, accounts for about 60% of the revenue of the commercial fishing industry of B.C., which totals about $1 billion a year.

The vast bulk of that production is exported to the U.S., Japan and Europe. We are bringing in new dollars to Canada through our activities. But circumstances are difficult in the world of salmon, if only because we have seen an explosion in worldwide production of the animals. Chile, Norway, Scotland, Canada - we're all producing farmed fish, which is having an impact on markets and on prices. The economics of the processing business are not dissimilar to those Mr. Rombough, as a smaller business operator, just described.

Fleet reduction is important to us as processors and as holders of licences, because in order to be, and to remain, competitive in the world of fishing, where we are producing products that are competing with Chile and Norway, and also competing with other protein sources such as chicken and pork, we have to keep our costs down.

The current size of the fleet is creating more costs in the business than we can sustain, so from a purely economic point of view, from our perspective, fleet reduction is extremely important to the future, not just to the processing business but also to the entire industry. Without a healthy processing sector, the services our sector provides to fishermen, the markets for products, will not be here. The companies I represent will simply not be able to sustain the investment in capital and labour they have made over a period of 120 years.

In terms of the conservation situation, Mr. Chairman, I think I can claim to speak with some authority on this, too. As a servant of the Government of Canada and as an independent person working for the fishing industry in B.C., I've been around now for almost a quarter of a century in this business. I've been exposed to a lot of issues, including the issue of Canada-U.S. and the Pacific Salmon Treaty. I almost hate to say it, but I appear to be making a career out of it.

From a purely conservation view, looking at it from the narrow Fraser River sockeye situation, where we have one of our major arguments with the United States, we have a situation where the number of boats in the water has made the job of the Department of Fisheries and Oceans' managers just about impossible.

We've had fisheries over the last few years where the job of estimating the catch of those fisheries - for example, the troll fishery off the west coast of the Queen Charlotte Islands - has been by guess or by golly. I think credit should go to Mr. Tobin and to the departmental officials that they are not going to tolerate that any more. That is not acceptable. The Fraser public review board made that quite clear, and we agreed with that recommendation.

There are times when the Fraser panel, which consists of U.S. and Canadian appointees, makes decisions on a Friday afternoon about the forthcoming week's fishing pattern. They are operating almost blind, partly, although not entirely, because of the unknowns in the Canadian fishery. How many boats are going to show up if we open Johnstone Strait on Sunday night? Is it going to be 400? Is it going to be 1,400?

We think the Mifflin plan addresses that kind of issue square, head on. We will know the number of boats that are going to be there. It will improve manageability. Those who came to tell you last week that this plan does not address conservation are, frankly, misleading you. How can you say conservation is not served by creating an easier-to-manage fishery? To me, that is illogical. It doesn't make sense.

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From a conservation point of view - and I focused on one small area to make the point - we believe this plan is extremely important for the future of our fishery. It goes without saying that without sensible conservation and manageability of the fish we are going nowhere.

I would add that we have to do this conscious of the fact that the Department of Fisheries and Oceans is getting smaller. There are fewer people left to do the job that needs to be done. We simply owe it to them and ourselves to make their job easier and not more difficult.

I heard a lot this morning, Mr. Chairman, about our rushing into things. Don Cruickshank himself referred to a study he did in 1982. We've studied this problem to death, not least of all through the last 12 months when the round table process started.

I would borrow a phrase from my good friend Bob Wright, who represents so forcefully the recreational fishing industry, at least its commercial component in British Columbia. He has a phrase: to delay is to deny. That's what we're faced with here. We have no more time to get on with the job of getting this fleet reduced and to provide the basis for an industry that can once again make the kind of positive contribution to our country that it has in the past.

We recognize as a player our involvement in the process. Of course, there are difficulties with the plan. There will always be difficulties when you sit down with 70 people and try to come up with a consensus, but I listened carefully to Dr. Pearse's presentation this morning and I think he got it right.

The plan does involve much of what the round table report contained. It involves much of the opinions that were not consensus opinions but were widely shared. It contains other parts that were not part of the round table process.

How would we change it? Our advice to the minister is consistent with what you heard this morning about a licence holiday. We think that makes sense; it provides people with a year to make decisions they are saying are lifetime decisions based on imperfect information.

The revenue cost to the Department of Fisheries and Oceans if 2,000 boats decided to take a licence holiday would be something like $2 million. We think that's a relatively small price the Treasury Board should be prepared to pay in order to make this plan a little easier to swallow for those who are finding it difficult.

We also believe the buy-back fund of $80 million will probably not be spent for a variety of reasons on its intended purpose, and we are at a loss to understand why there are bureaucratic rules that say the money vaporizes on the 30th of June. We believe this money should be spent inBritish Columbia. If it is not spent on buy-back, we would like to see money that has been provided and allocated already go to address the issue of human resource transition assistance.

I won't go into details. Others have done that already this morning. Suffice it to say that we support that. We think it was a terrible misfortune that the issue was not addressed in the original ministerial announcement. It has created problems that needn't have occurred.

Secondly, we think the $80 million fund should be looked at and some money taken out of it to go to what we call ``Fish Renewal B.C.'' That would address the kind of habitat issues thatMr. Rombough pointed to, and I think we could well take some instruction from Forest Renewal B.C. in the way we look at habitat, the way we spend money on habitat.

One other thing I would like to address is the issue of corporate concentration, which has been one of the targets for opponents of this plan. It has been an attack focused on the people I represent.

I'd like to point out first of all that we believe the corporations I represent are important and the strength of an internationally competitive processing sector is important to the health of the entire fishing industry and to the coastal communities. As processors we need a security of supply if shore-based investments are to survive and continue to employ large numbers of union and non-union workers at decent rates of pay.

A number of the companies I represent do own harvesting licences for these kinds of valid reasons, but the level of ownership of licences by processors is in my view simply not an issue. The figures available to the round table from the department showed that approximately 170 seine licences either were owned by or were in joint-venture operations of processing companies and independent fishermen - 170 vessels out of a seine fleet of 549. Any kind of ownership interest in the small boat, gillnet and troll fleet is as close to zero as you can get. I think there may be two or three vessels that are in ``corporate'' hands.

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We fail to understand how this could be seen as corporate concentration under the legal term as we understand it under the Competition Act in Canada. We would also note that many fishermen, fishermen corporations, own multiple licences through their corporate structures or their personal business operations. I don't think there is any legal or ethical basis to treat corporations that process fish any different from corporations that do not.

I can tell you that the member companies I represent told Mr. Mifflin last Thursday in Vancouver it was not their intention to purchase licences, nor had they purchased licences, as a result of the announcement of this plan. There is no interest in doing so, and all I can do is report to you is what they assured the minister less than a week ago on that issue.

Lastly, Mr. Chairman, with respect to coastal communities, I'm from a coastal community too. It happens to be a large one. Vancouver, Ucluelet, Prince Rupert, Alert Bay - all have to derive their basic economic well-being from businesses that make profits and are able to pay taxes. We think this plan is going to result in a better industry, a more profitable industry. Coastal communities will suffer change, there is no question about that, but that change need not be the kind of negative change you've heard so far.

There's one coastal community that has been quite at the forefront in talking about this issue, and that is Ucluelet. With respect to the commercial fishing industry in Ucluelet, and there is a large recreational presence there too, the commercial fishing industry in Ucluelet is dominated not by salmon but by prawns, by hake, and by ground fish. In Ucluelet 90% of the employment comes from those three non-salmonic species. So one has to ask what the Mifflin plan has to do with that.

We have other ideas we would share with you at some other time on how those major species in that community could help sustain that town.

Mr. Chairman, I've probably gone on too long. I think I've made it very clear that my organization is supportive of the plan and the points Mr. Rombough has made this morning. I'd now like to turn the floor over to Mr. Taylor. Thank you very much.

Mr. Greg Taylor (Member of Skeena Watershed Committee): Thank you, Mr. Chairman.

Before I start, I'd like to reiterate what Mike said. I'm leading the delegation from the west coast, and they are supporting the plan. The people with me are Larry Wick, a seiner and a member of the Fishing Vessel Owners Association; Mike Griswold, who you heard speak, a troller and a member of the Gulf Trollers' Association; John Murray, gillnetter and president of the Pacific Gillnetters' Association; Claude MacDonald, gillnetter and a member of the union; Lenny Carr, an independent gillnetter; and Les Rombough, from the Campbell River Gillnet Committee.

I am a processor who lives in Prince Rupert, one of those coastal communities. The other member who couldn't be with us because he's in Alaska on a joint project, investigating ocean enhancement with a goal to incorporating it in the north coast planning, is Bruce Hill, president of the Steelhead Society of British Columbia. It's one of the oldest environmental organizations in B.C. dealing with salmon and steelhead. He and his organization are fully behind the fleet revitalization program.

We thank you for having us here. We're a little bit disappointed with the hour we have, considering that the opponents had time last week and seemed to be having time again today. Having said that, the members of this delegation have asked me to speak on behalf of conservation and what this plan means to conservation. I think in many ways that is what has been lost in the fracas that has developed over the fleet revitalization plan. The fundamental part of the fleet revitalization plan revolves around the conservation of the resource. It is the absolute foundation of why this was incorporated in the first place.

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The two goals this delegation and the many fishers they represent back home have had all along are ecological sustainability and economic viability. They understand and they know that those two go hand in hand, and those will go hand in hand more in the future as we revise our management strategies, which I'll go into in a minute.

Many people have been saying that somehow the fleet revitalization plan does not deal with conservation, does not deal with harvesting capacity. They're dead wrong. They're misleading you. As I said, it's the very foundation of this plan.

Contrary to what Dr. Pearse said, many of our stocks are in trouble. It's not a benign situation on the west coast in regard to salmon stocks. Yes, there are some very strong salmon stocks on the north coast and on the Fraser River. But the British Columbia salmon fisheries is comprised of literally thousands of independent, genetically distinct salmon stocks, some much weaker than others.

You'll soon be faced as a committee with a report coming out from the American Fisheries Society, which examines just this. They'll report, just as I have, that there are many strong stocks on the west coast, but they'll also report that a great many stocks are nearing either biological or economic extinction. Those weak stocks are the ones this plan seeks to protect, to enhance and to rebuild. Without this plan we simply won't be able to achieve it.

This plan addresses those conservation needs in five primary ways. One is what's called risk-aversion management, that is, taking a precautionary approach to management. Les spoke about it when he was talking. That means if there is uncertainty as to run size, if there's uncertainty as to stock composition, if there's uncertainty and risk that could be involved in harvesting that stock, there will not be a fishery, or the fishery will be very much reduced.

The second one is that there will be a reduction in the interception fisheries. In the past, as now, fisheries have taken place in a gauntlet. That is, the fish enter in the Queen Charlotte Islands and travel down through the west coast. The fish are subsequently harvested in sequential fisheries as they move down the coast.

This led to overharvesting of many non-target species, but it also gave managers fits, as Mike was saying, when trying to determine what was actually coming back to these rivers. How do you manage with all these interception fisheries?

So a key part of the plan is to move those fisheries closer to the terminal areas, closer to where you can actually establish what the run size is, closer to where you can have some security in what that run is so that you can protect that run of salmon and make sure that run gets onto the gravel.

There's going to be a move to more selective stock fishing. That means we're going to be moving to, again, more terminal areas where we can determine where the fish are and how strong they are. That means in terms of fisheries, they're going to be very prescribed, in time. Instead of having fisheries that occur over weeks or even months in some cases, they'll now occur over literally days and weeks.

To give you one example, on the Skeena River we've already started this approach. Traditionally the fisheries used to start in mid-June and end the first of September. Now the primary fishing takes place in three weeks, to harvest those stocks, to make sure we're harvesting properly, protecting wild, non-target stocks.

Finally, as people have spoken to here, we're creating a more manageable fishery, one that's smaller, one that's more discrete, one we can control better. In other words, what we're trying to design for the future is to enable the managers to use a scalpel instead of the broadax we use now in terms of harvesting.

The final key point that addresses conservation in this plan is area licensing. It's fundamental. Area licensing attaches fishers to the area in which they're harvesting. Therefore, they are responsible and accountable for the decisions they make there. They will share both the benefits and the problems that occur with their harvesting practices. They'll also take a real interest in terms of their area, in terms of what's happening upriver, in terms of habitat and habitat destruction. They can become involved in enhancement projects.

It's very key, extremely fundamental, to the program that we have area licensing, and I'm really discouraged to see that some people are saying we don't need it. One of our problems is that we don't have it.

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Those five primary ways this program addresses conservation are absolutely fundamental. But what does this mean in terms of where DFO is going? What DFO is actually saying is that it's fundamentally changing its mandate. They're putting conservation as number one. This is going to alter the management of the west coast fishery. It's going to change it forever. It's going to turn the west coast fishery into one of the most conservatively and, I would argue, one of the best-managed fisheries in the world.

The problem as it lies is that we're changing the direction of the fishery, our strategy and our practices. We have a fleet that's out of tune with that new management strategy. We have a fleet that developed through the late 1800s through to the early 1900s that was targeted and designed basically to harvest salmon as an industrial good. Salmon was perceived as an industrial good that we harvested and put into our processing facilities.

Society is taking a different view of salmon now. There are many people who take much more of an interest in salmon, ranging from commercial fishers through to recreational fishers and aboriginal people. There's a very different view of the salmon.

We have to alter that fleet too. It's totally out of sync. This fleet, as it is now composed, will not survive under the new management regime. That is why the fleet revitalization program is so key and why it's so key to do it now.

We can't wait until 1997 or 1998. That's way too late. This new management regime that we have to have if we truly believe in the conservation of our stocks, starts this year. That is why we have to do the changes this year. That's why we have to move ahead with it. Failure to move ahead on fleet revitalization will not allow us to achieve our goals of conservation.

There's one thing I've noticed of the people who opposed the plan and haven't read the history of the east coast. I would say that many of the same arguments you're hearing on the west coast are what you heard in the 1980s on the east coast when people were fighting the reality of the decline of the east coast cod stocks. There were arguments about short-term jobs and coastal communities. Those arguments prevailed there, and the resource lost.

I say that we can't afford to do that on the west coast. We must put the resource first. We must put the fish first. We must make these hard decisions now.

In conclusion and in preparation for questions, we are urging the minister to move ahead and make his announcement very soon to provide stability to the fleet and allow us to move ahead with the job of saving the salmon stocks on the west coast.

The Chairman: Thank you all very much. I'd like to go to Mrs. Terrana first, as she has to leave, I believe.

Mrs. Terrana: Do you mind? I have to go to the House to speak. Thank you.

Welcome to Ottawa.

I don't know, but listening to the delegation this week, listening to Mr. Pearse, Mr. Cruickshank and to you, I think we are getting to a consensus.

There are many areas in which you seem to agree. For instance, conservation is one of them. We know that is the first and most important one.

The extension of deadlines or the money in trust - that's what I heard, right? - leave licences in abeyance, and the fishers seem to want to do that too. There's the impact study - environmental, social and socio-economic - of an adjustment package that would in fact address the problems of those people who are losing their jobs, which is not because of them. This would include the rehabilitation of streams. They have been asking for a rehabilitation of the streams. There's also the reallocation. I heard that this morning, and I think that's a valid point.

I have a few questions of you. I think these are points on which we all seem to agree. The point on which you don't agree at all is the area licensing. I would like to hear what the alternatives are. Could the deadline be extended from May 24 to maybe give more time to people to get adjusted to area licensing? If not, is there an alternative? This is a question for you.

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I want to ask you too whether the $80 million is enough to buy the boats and the licences.

I have two other questions. One has to do with catch. We are reducing the fleet, but we are not reducing the catch.

My last question has to do with dealing with licences as commodities and being able to sell it to other fishers for a large amount of money. Is that fair? Should it be done? If not, why?

Thank you, Mr. Chair.

Mr. Rombough: I'll take a stab at a couple of them.

The area licensing situation is, as we have described.... We have a situation on the coast this year that's a disaster. We do not have returning stocks to the Fraser River that are going to warrant a harvest.

If we maintain the present licensing situation we have now in which every boat can fish the entire coast and you can go to whatever area you want, we would all go to Prince Rupert. That's because there are no fish forecast for rivers in Smith Inlet, which is another July fishery that produces sockeye for us. Barkley Sound, the other one, is not looking very good as well.

We've had problems with mackerel eating the young fry as they come out of the streams. We have a lot of natural problems that occur. We have logging problems in Rivers Inlet.

The bottom line is that there are hardly any sockeye to be harvested on this coast this year. If we stayed under the same mandate, we would all go to Prince Rupert. I am talking about2,500 gillnetters, seine boats, trollers, everybody. That's the only fish we have.

That's an intolerable situation. We would put so much pressure on the Skeena River and Nass River stocks that we would be putting them in exactly the same position we put the Fraser River stocks in, and we'd be one step closer to not having a resource, not having an industry and not having any jobs.

There's a lot of concern. I am being asked to fish one-third of the coast this year. I'm very concerned, but I can't see the alternative. I really can't see the alternative.

Is the $80 million enough to deal with the buy-back? Say $200 million had been tossed into the fund and we could have bought out half the fleet and had an immediate instant reduction of 50% of the fleet so that everybody remaining could have fished the whole coast. That was a serious alternative we looked at, but we don't have $200 million. Also, under that scenario, it would be a process that would be slow, And again, this year, 1996, we would have too many boats in the Skeena River watershed to warrant any kind of commercial fishery, so nobody would make any money this year.

What is the area licensing going to accomplish? Basically, half the boats are going to make a living this year.

It's a tough nut to grind. I know I'm not going to make any money this year. I'm not going to pick that area because that's not my area. I'm going to tough it out and hope that I get the opportunity in the years to come with this cutback in the harvesting such that I will be able to make a living where I catch my fish. Most people who are picking an area are going to pick the area where they make the most money and where they know how to fish. That's going to be their primary choice. It's tough to realize that I've only got a third of the coast, but I can't see any alternative.

You say the fleet is going to be reduced but the catch will not be reduced. The catch will be reduced, as Greg stated very well, in the areas where it really needs to be reduced. By reducing the number of boats that are actually fishing in a given area on a given stock, we will give management the opportunity, in partnership with industry, to develop fishing plans that are going to allow fisheries on the major stocks.

We can be innovative. We are being asked to be innovative. We can develop corridors. We can develop different gear if we are having a steelhead problem or a coho problem.

We are going to have the opportunity in these areas because we're going to know exactly how many boats are there. We can design the fisheries in such a manner that we will not impact stocks that are in trouble and have a harvest on the stocks that are not in trouble. Through allocation to the gear types, we will be given a number that we can catch of say the Fraser River stock. So once conservation issues are taken care of, like how many fish we want on the ground, bang, that's the number.

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Next, how many fish will the native element get? How many fish will the sport element get? What is going to be left is a number that is called the total allowable catch that the commercial fishing fleet can take. That will be broken down into x percentage for the seine fleet, a percentage for the gillnet fleet, and a percentage for the troller fleet.

We will go out and attempt to harvest those stocks. As soon as a gear type has caught their number, they're done. It could be one day or three days a week for four weeks, but there's no way they're going to just stay out there and fish.

So it's a mistake to think that the capacity of the fleet is going to remain as it is; it simply isn't. We're reducing the number of boats by 50%. We're cutting a real big hole. And not everybody is going to be able to fish in every area.

So we're going to catch every fish we can catch out of our total allowable catch. We're not trying to reduce that number. We need to make a living, and that's where we make our living. But we want to be able to protect the stocks that need rebuilding while we're doing it.

I'm sorry I wasn't quick enough to write down your fourth question.

Mrs. Terrana: The last question had to do with the selling of the licences as a commodity and the high prices they go for, as you know.

Mr. Rombough: Yes. It's expensive. It's a problem. There are a lot of people I know who simply cannot afford to buy a second licence right now, and they would love to. They can't afford it.

I know natives in our area, for example, who have really addressed a serious concern, which is that they don't have the borrowing abilities other people have. They live on reserves. They can't mortgage their homes and their land. They feel that they're seriously hindered by this. It's going to have to be dealt with. I don't think that's a DFO issue or an HRD issue; it's an NFA issue, and it's going to be addressed. These people are going to have the opportunity to purchase that second licence.

Right now it's a pile of money, but everybody in the area that I live who's a serious fisherman has bought a second licence. For other gillnet representatives, it's the same thing. I think something like 400 have changed hands already. It's been much brisker than we assumed. It's $50,000 to $70,000, maybe $80,000, depending on the situation.

It's a lot of money, but we've just had the ten best years in the salmon industry that we've ever had leading up to this. We made money. People weren't in bad positions. Now it's finished. We're down. It is a lot of money. A lot of people can afford it, but some can't.

We are looking at the development over time - I'm not talking about by June 30 - of an industry-driven fund or bank in which we get some seed money from somewhere. Maybe it will even be left over from the buy-back or something that we impose on ourselves through royalties to start a fund through which young people trying to get into the industry, such as displaced seine boat skippers who want to buy a gillnetter, will have the opportunity to borrow money.

There's no borrowing available here. It's tough to borrow money to do any of this stuff. It's a problem. We're going to address it. We want to see a fund in place that's going to be a sustainable fund. It's going to keep this rationalization process going over time because we don't really believe that it's going to be accomplished with this $80-million buy-back right now with the stacking. We're going to have to keep going. We're going to have to set up something, but we can do that as industry by starting a fund whereby people borrow, pay back, then somebody else can borrow, and on we go.

So we're hoping. It's a big sum and it's tough for some people, but again, I don't think we have any alternatives.

The Chairman: Thank you.

As for the Fraser River sockeye, we're told that it wasn't DFO's or the fishermen's fault; it was El Niño and the mackerel.

Mr. Rombough: That's a serious problem.

The Chairman: Yes, but it's a one-year thing, not a perpetual thing.

Mr. Rombough: Well, no, it comes and goes, depending on El Niño and the currents. It's something we have no control over. We're at the mercy of nature on that one.

Mr. Cummins: I just have a correction here. The problem we're facing this year is a DFO problem. It was mismanagement in 1992. Dr. Pearse in fact wrote a report on that and gave an evaluation. That was the year the AFS was introduced, and the management was just a disaster. Anyway, there's an issue to which I want to come back.

I want to thank Les for his very perceptive and articulate presentation this morning. The concern I have, and have had from the beginning, is one Dr. Pearse addressed. That is, everything seems to be happening at once on this thing, and I wonder at the need for it.

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You addressed the idea that there will not be any fish returned to the Fraser River this year, or any harvestable catch. I don't think anybody is going to argue with that. That's the fact of the matter. But in the small-boat fleet you have three areas to choose from, seines have two. Everybody I know is in tough shape after last year.

So the question then becomes, what are you going to do this year? Even those people - and I know a good number of them - whose first choice would be, say, the southern area...and in that small-boat fleet they'd choose the Fraser River. In choosing even the central area, many of the stocks you're going to harvest there are Fraser River stocks. So those two areas largely are dependent on Fraser River stocks. That leaves the one area, the northern area.

So if we go ahead with this plan, those guys who are desperate - and I don't know anybody who isn't - are going to say they have to take that northern area because they have to address their cashflow problems now. They can't afford to sit out and wait a year. The issue then becomes, why the haste?

The point then is that pushing this program ahead for this year, it seems to me, is not addressing that concern. Even if there wasn't area licensing, people are going to flock to the north.

The other problem with the haste, of course, is that you have the competition for licences between the buy-back program and those who want to buy an extra licence for area licensing. So if the program were pushed ahead a year to allow for legitimate concerns to be met, including the tax incentive for those people who want to sell.... Let's face it, if you sell for $75,000, about $35,000 or $40,000 is going right back to the government via the taxman, so what's the incentive?

But if you pushed this program back for a year, allowed the buy-back to continue, and implemented this licence holiday business, tried to assist people who agreed to leave the boats tied up over the year, gave them some help maybe with moorage and boat payments, but pushed it off for a year to allow this thing to shake down rather than doing it all at once, wouldn't that in fact have a better chance of reducing the pressure than forging ahead now?

Mr. Rombough: That's a very good point. It's one that's been given a lot of consideration. For an individual such as myself, who's trying to make a selection with my one licence, it certainly is....

I think we've realized that the bite is on. We're in the bite. Realistically speaking, fishermen have three choices. They can sell out because they're in trouble and they have to, they can purchase a second licence, or they can select their one area, realizing they have to have a second job - you aren't going to support yourself.

We thought about what would happen with people picking the north area this year. Because we've made the selections permanent - and that was done on purpose - people are going to have to think twice this year as to whether they need to make a few bucks, and they're going to go up to the Skeena, but they know the more boats that go, the less money they're going to make. They're going to have to weigh that against trying to come up with another job. Maybe they can't, and they'll be desperate, as you say, and they'll just have to, and hope that something will happen in their lives that's going to allow them to buy a second licence down the road and get back into their Fraser River or Johnstone Strait area.

A lot of people are not going to gamble. The south coast makes a lot of money. That's where the money.... Well, the north coast does too, but the Fraser River stocks, as you well know, are where we've been making our money the last few years. In my area, as an example, people aren't going to take that gamble and give that up. They have to wait it out, and they're prepared to do it. We'll take the central, or the Fraser, and you'll get a few chums in the fall, but you might get a better fishery on them. Maybe you're going to get one opening on the sockeye, maybe there'll be a dribble in Barkley Sound. But I honestly don't believe delaying this any more is going to accomplish what we want.

I think we're going to accomplish something with the buy-back, I think we're accomplishing something with licence stacking, and I think on June 30 we're going to be done. The process is going to be basically finished. It's not going to be perfect, and we're going to have to go further, but that section will be done.

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We believe the prices of licences will stabilize. They have stabilized. They took a jump. They went from $1,000 a foot to $1,600 a foot. But they've stabilized right now. Everybody's waiting on the buy-back now to see if they can get more money for their boat from the buy-back. Things have kind of stalled.

I really hope the buy-back does put a reasonable limit - gives people a decent opportunity but creates a limit - that's not unreasonable and doesn't create a golden egg for somebody, but something realistic. Then possibly we can use this money in better ways.

Mr. Cummins: What you're saying is that given the situation and the desperate straits some people are in, you feel that some of them are going to sit out one year and wait rather than jump in.

Mr. Rombough: I know they are. I am.

Mr. Cummins: Mike, could you answer that?

Mr. Hunter: On why the haste? I'm going to take you back to 1969, to Jack Davis, who went through what Brian Tobin and Fred Mifflin are now going through: protests up and down, you can't do this, you can't do that. He made the decision over all the protests that for the first time there was going to be licence limitation in the salmon fisheries, and it was phased in. There were A licences and B licences, and B licences were going to be gone in ten years. They're still there.

Ask me why the haste, put it off, give it a year: who knows? There may be an election. There may be a new minister. The political will will be gone and we'll still have the problems in the salmon fishery. We won't have addressed them. I'm not prepared to trust you guys as politicians that you're going to maintain your will to do a year from now what you say you're going to do today. You haven't proven to me in the past that you'll do that in the salmon fishery and in licence limitation. The evidence is there.

Mr. Cummins: If you're talking about reducing pressure on the stocks in the north, which was addressed here this morning by Les, by moving ahead now is that going to reduce pressure and reduce the size of the fleet that's going to be targeting Skeena River stocks and north coast stocks and so on this summer?

Mr. Taylor: Let me address that. I'm on the steering committee of what's called the Skeena Watershed Committee, comprised of recreational, commercial and aboriginal fishers who work with the management of the Skeena River. I can assure you that this plan is absolutely essential to the management of the Skeena River this year. If we don't have this plan, we're in big trouble. Even if it doesn't reduce the fleet by 50%, if it reduces it by one-third - which is likely, if not a given - it's going to make a huge difference.

The fishing plan in the north coast right now is founded on...that there are to be 700 boats in area 4 in July and 300 boats in August. We know it's going to be somewhat higher than that. But if it went up to 2,000 boats, which it would if this plan wasn't in place, we'd be looking at a fishery that would be reduced from the planned nineteen days now to something in the order of nine.

Mr. Cummins: I think what you're saying is that this would be the case if there wasn't some kind of a tie-up program introduced by the government, which has been suggested. Some kind of relief is going to be required anyway for those guys who choose the south coast areas.

Mr. Taylor: I disagree. If fishers have the opportunity to go fishing in the north and there's no area licensing in place, they will go north, and we'll have the whole fleet up. Les has spoken to that himself. This will make the north coast totally unmanageable.

Another thing about area licensing that is so important, and why it has to be brought in this year, incorporated with this plan, is that it does provide fishermen choice. They can either remove themselves through the buy-back and retire with dignity from the industry or - and this is an important point for many of the northern fishermen - they can fish their traditional areas, what they've always done. The key is, there's going to be much less competition in there, so it's going to significantly raise their incomes. The third thing is that people can make their choice and invest in the future.

The really worrisome thing from our perspective is that the alternative seems to be this buy-back royalty concept. Well, the royalty concept would just be devastating to the northern fishermen, those marginal fishermen. They'd have this $10,000 tax on them that would remove any profit they might earn. It's involuntary. They'd be stuck with this tax. I tell you, within the fleet it would be about as popular as the GST.

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So I think area licensing is absolutely critical, beyond the conservation reasons I gave. In terms of practicality and achieving our goals, it's absolutely essential to bring it in this year.

Mr. Cummins: Larry Wick is at the back of the room there, and he's a seiner.

I wonder if you'd care to comment on moving this ahead, Larry.

Mr. Larry Wick (Individual Presentation): Thanks, John.

I think it's critical that we go ahead at this time. We need it for viability of the fleet and we need it for the resource. We need it for manageability. There's no way we can stop the program at this point. It does need some tuning, there's no doubt, with retraining of crews and what have you, but the fleet is in process. They're making their moves, they're getting ready for their season. There's no way it should be delayed at this point.

Mr. Cummins: Will the fact that there will be reduced or maybe no opportunities for the seine fleet in that south coast area this year going to influence people to any great extent, or do you think people would be prepared to sit out a season just so that in future they'd be able to benefit from the south coast?

Mr. Wick: People are making plans at this point. A lot of them have bought licences and made negotiations to get licensing, looking for allocation. They are looking for these types of programs. We hear tuna talk, things of that nature, but I think the seine fleet is ready to go. Let's do it.

The Chairman: Mr. Wells.

Mr. Wells: Thank you, Mr. Chairman.

I'll start off by thanking you for your presentations and to concur with what Mr. Hunter said, that it's perhaps unfortunate that we're pressed for time here. This is certainly a different story from what we've been hearing over the last couple of weeks. We have had a lot of opposition. The impression we were left with by the Reform MPs from British Columbia was that this was totally unacceptable on the west coast. We have a letter from the premier saying it's unacceptable.

I am just wondering, why all the opposition from the premier, from the members of Parliament representing your districts from the Reform Party? There must be something bad in this if all these people are against it.

Mr. Hunter: I might take a stab at that question first. I think Les said it earlier, that when you're in favour of something and have tried to build a consensus and some intelligent advice, you don't go out on the hustings and rent buses and picket signs and all that kind of stuff.

Frankly, I think those who organized the Rainbow Coalition that came back here last week...strange alliances of bedfellows, if I ever saw any, in this business. These people have very strongly held views, but so do we. They have more of a habit of doing this kind of thing than we do, and I guess we're a little late getting into gear. That's one point I would make.

With respect to Mr. Clark, you're a politician and I am not. You know he's on the campaign trail. I think you should take what he says with that very much in mind.

The Chairman: I don't think it's just Mr. Clark.

Mr. Hunter: You can include all the leaders out there.

Mr. Wells: Coming right from the.... I'm not sure what the opposition leader's position was. I understand he was against it as well, although I don't have a letter from him. I just have it from the premier.

I'd like to get comments from perhaps the others - unless you concur totally with what Mike has said.

Mr. Rombough: I would like, Mr. Wells, to give you a response to that.

I live in Campbell River. Every day in the press there are negative opinions. We read in the paper where two opponents, who are both friends of mine - or acquaintances maybe, as we're opponents at the moment - made reference to the fact that they were going to go to the Campbell River city council and ask the city council to write to the minister denouncing this plan and having it canned because it was totally intolerable to them. The council listened to them and did exactly that. What else would you do? All the press they'd gotten....

We heard about this and asked whether we could go and represent ourselves to the city council and the mayor. We gave them our report, which we've just given you, and they all sat there with their mouths open. They'd never heard this, from anybody. They sat there and listened to what we had to say, and to the fact that I represent 100 gillnetters in that area and we've been involved in it for six months.

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They had just written a letter to Mr. Mifflin denouncing the plan. We told them thanks a lot, that we had been working very hard on it. They realized that they had acted hastily. They said that when the UFAWU came into their council meeting, they had thought it represented all commercial fisherman.

When you see some of the press releases...well, there are some antics and they love it. When the camera flashes on somebody jumping up and down during a press conference and that's the person they see representing the British Columbia fishing fleet, when the rest of us have been in a meeting all morning with the minister trying to hash out these details.... They won't talk to us. We're not news.

I think the press has been really.... I don't want to use the word ``irresponsible'', but they are the press. This seems to be what they like. This is how it goes.

Anyway, we presented ourselves to the Campbell River council and they immediately wrote a letter to Mr. Mifflin saying that they were sorry, they hadn't gotten the full picture. Everybody we'd made representations to in the last week.... We finally said we had to do something because all of you were sitting here and getting just one opinion, that we were going to have to do something because these guys might be able to can this.

Every person we've made representations to has reacted exactly the same way: who are you? We are the silent majority.

Mr. Wells: We caught flack last week because we wouldn't endorse a resolution at this committee. Some of us felt we needed to hear the whole story before we endorsed a resolution. It certainly reinforces the position we took, that we shouldn't be endorsing resolutions without having the whole story.

It was suggested earlier, Mike - and I'll address this to you first because you are part of the round table - that the round table was a bit of a sham, that decisions had already been made by DFO and this was just used as a method to reach the conclusions DFO wanted to reach anyway. You were part of the consultations. Do you feel they were a sham?

Mr. Hunter: No, I don't, Derek. As I said earlier, I've been around DFO a long time and I've been on both sides. I have to say that the conditions the round table was operating under were conditions set by the minister of the day. To the extent that the round table's freedom of action was constrained, it was constrained by its being set up to address issues under the conditions thatMr. Tobin made very clear.

Outside that, a lot of effort and thought went into how to create a system of receiving advice that was reasonably representative, in a room in which you could do some work as opposed to renting General Motors Place in Vancouver for a meeting of all stakeholders, where you won't get any kind of work done.

I would have to say that it was not perfect. There were people who would have liked to have been there who couldn't be. But all in all I don't think anybody who was there could say in honesty that issues were not thrashed out. They may not have won their points, but I would not describe it as a sham. I think it was as open as we could make it. There were people who were invited who didn't go.

I don't buy this idea that coastal communities weren't represented, because there were people there. Just about all of us were from coastal communities. That's my view.

Mr. Wells: Okay, I don't want to get into the AFS, but it's been suggested that the major cause of the problems in the B.C. fishery from 1992 is the AFS. I've heard other people say other issues had a part in this.

I know there were problems with the AFS at the beginning, and I believe we all recognize that, but can you give me a short comment on it? Was that the root of the problems you're having in the B.C. fishery right now?

Mr. Hunter: No, but there is no doubt that the 1992 cycle of sockeye salmon was affected. Its abundance and the amount of fish that ended on the spawning grounds was affected by a new AFS-generated fishery, which was clearly out of control.

Derek, I am concerned that the review of the AFS program, including the pilot sales projects, is going ahead on the departmental examination. There's no outside advice. The people who manage the program are doing the review. I think that's bad, because it has been a problem and it needs sorting out.

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Mr. Wells: On the AFS, I think Mr. Scott would agree that over the next number of months we may need to take another look at that, based on the decisions we've been waiting for from the Supreme Court of Canada. I think it would be important, and that's why I wanted to lead into it,Mr. Chairman.

Mr. Scott: Following up on what Mr. Wells has said, I think the department is getting ready to start signing AFS agreements for the season, and I would hope we wouldn't be waiting months. I would hope the Supreme Court's decisions would have an influence on what the government's doing now.

Just so that none of the people here today are under any misconceptions about a resolution that was passed at committee last week, there were four components to it.

The resolution asked the committee to recommend to the minister a re-commitment to salmonid enhancement, which has now happened or is in the process of happening, so we're glad that the minister at least heard that. I'm sure that's a result of a lot of lobbying on the part of people from British Columbia.

The second recommendation was that the 1996 licence fees be waived for people who wanted to sit out this year. I don't think any of the people here would have any problem with that.

The third recommendation was a socio-economic impact analysis on B.C.'s coastal communities, to find out what the impact of this was going to be.

A fourth one was...and it's an issue I raised earlier this morning. I think - and I would like these gentlemen to comment on it - that we are wasting our time talking about Mifflin plans and other plans, when the government is in the process of reallocating the resource away from the commercial fleet, away from sports fishing, and into the aboriginal treaties. Now, it may be at the end of the day that's what we as a society decide to do, but we had better be honest about it, we had better say it out loud, and we had better have full and open public discussion on it, and that has not happened.

So I submit to these gentlemen here and to anybody else that my personal, very deeply held conviction is that we can talk about this plan and we can talk about all kinds of other wonderful things, but until those allocation rules are set, until security of access is guaranteed - and if that access is going to be denied, there's got to be some mechanism for compensation - the rest of this is a moot point. If the treaty-making in British Columbia continues, with subsequent treaties in the same vein as the Nisga'as', you can kiss the commercial fishing fleet in British Columbia goodbye.

Now, I'd like any one of these people here to deny that's not the case.

Mr. Hunter: Mike, you're absolutely right on the last point, on the allocations. The proof of the pudding is coming very quickly, and let's refer to it. Mike Griswold came to the table and referred to it, the issue of chinook salmon allocation.

The commercial fishery is being asked not to fish chinook salmon. They're in fact being told and indeed they're telling the government they don't want to fish chinook salmon. They are in trouble in 1996 on the west coast of Vancouver Island. The commercial recreational industry is lobbying hard for access to the same chinook stocks we are being asked to conserve.

If that request is acceded to by this government, it will be a clear signal to me and others that the allocation ball is firmly in the air. If the answer is, as I hope it will be, that everybody's got to bear the conservation burden, I think that will be a sign to everybody that the allocation question can and will be dealt with in good faith.

Frankly, Art May is a gentlemen I respect, obviously a lot more than Don Cruickshank does. Art May is not going to solve the problem of allocation to aboriginal people. Ron Irwin can do that today if he wants to do it. It shouldn't be a problem, as far as I'm concerned.

Mr. Rombough: I couldn't agree with you more, and I want you to understand very clearly that the one issue in this entire situation that is terrifying us is where do we stand on this allocation with regard to the native treaties? I mean, we might be dead in the water.

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We are being put in an intolerable situation here. We are being asked to make a choice on an area, to spend $70,000 to buy a new licence, to sell out of the industry or...? Whew! Horrendous choices when we have absolutely no idea what the allocation to our fishery is going to be. It's terrifying.

Mr. Scott: Wouldn't you think it would follow, then, before you ask people to make decisions about whether they're going to stay in the industry and buy more licences so that they can compete -

Mr. Rombough: That it would be done.

Mr. Scott: - on a financially sustainable basis -

Mr. Rombough: Absolutely.

Mr. Scott: I hear what Greg is saying, about proceeding with the plan this year in aid of conservation. I do hear that. But I also see the other side of it, where you're asking people to make decisions about making major investments, in some cases buying as many as, as I understand it, five more licences, so they can stay in this bloody business in British Columbia - and you don't tell them what they're going to be able to catch?

Mr. Rombough: I know; it's intolerable. It's intolerable. Please understand that the commercial fleet is reeling from this. There is no question about it. It is our absolute primary concern.

If 50% of the resource is allocated to the natives through land claims and treaties, and we've just reduced a fleet by 50%, then we have been duped big time. You want to see some protests then: we're going to be on those buses with these other guys.

That being said, however, we have established, with the government, levels of commitment on this that have never been achieved before, in writing, with Mr. Tobin in particular. Mr. Mifflin is lagging a little bit on it. We've made very strong reference to him in the last few days. We want ``Today'' from Mr. Mifflin. We want something. He's not going to give us a number. We understand that. But we want some assurance that we do have guaranteed access to this resource. We need something better than we have, before May 24. We have made that point very clear to him. It is on the top of the priority list, and it is the only thing in this entire process that has consensus among every single person in this industry: where is the allocation at? You're right; it's an intolerable situation. But we're going ahead.

Mr. Scott: Would you not agree with me that if that issue was resolved, if the minister came out and said the commercial fishing fleet has a guaranteed access to the resource, and at least philosophically - if you don't want to put a number to it - said it's going to be on long historical lines or something to that effect, or reasonable compensation would be paid if we encroached beyond that, the whole rest of this plan would be a lot easier to sell in British Columbia?

Mr. Rombough: Absolutely. There's no question about it. It is the biggest problem we're dealing with. That's why we've taken this time to make the points to you as to why this is a good plan, why it's a good idea, but it's nothing, and we do not support this plan for a second, if we do not get a reasonable, long-term allocation out of this. So we are qualified, every one of us.

Mr. Scott: Just one more question. I would like you to just answer this - all three of you, please - as concisely as you can.

Would you not agree, then, for the benefit of the people on this committee, and I guess we from British Columbia - and I know there are other members from the Liberal Party here who are from British Columbia as well - that in the final analysis, the real issue facing us right now in British Columbia is not the Mifflin plan but is in fact allocation first. Yes, we have to get on with talking about how the commercial fishing fleet is going to be restructured, but would you not agree that this is the real issue and has been the issue since 1992, when the AFS was first introduced?

Mr. Rombough: I would still have to reiterate that the main issue on the table is the preservation of the resource, because without the resource we have no jobs, and we have to conserve the resource. What's going on with the AFS and what's going on in the Fraser River is a big part of our conservation problem and a big part of our resource concerns. It does have to be dealt with. It's on the top of everybody's plate. We've asked Mr. Mifflin to make a statement.

Mr. Taylor: We've made several representations to Mr. Mifflin about allocation. We have verbal commitments from him that we will be getting a letter very shortly dealing with our allocation concerns. It is with that promised letter that we support the fleet revitalization plan. However, I would like to say that we cannot wait for ten or twenty years while all the native land claims are dealt with before we get on with fleet revitalization. The fishery and the fish will be long gone.

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That is why we have to move ahead now. That is why in all our discussions with Mr. Mifflin and all his staff that we've said it's a two-punch thing. One, we'll have faith in your program. We'll work with you. But you also have to provide us with that commitment of allocation and access to the resource for the future. He has done that verbally, and he has promised that we will have the letter very shortly. We do anticipate getting it.

The other thing I would like to say is on chinook, which is an allocation problem, as Mike says. The people I'm speaking for have faith in Mr. Mifflin that when he says conservation is number one, he means it. Well, PSARC, a senior scientific advisory body to DFO, says there is no harvestable surplus of chinook this year. Therefore, if DFO were to allow a harvest of those chinook this year, breaking with their scientific advice, it would break that trust we have. It would somewhat shatter our faith in Mr. Mifflin and his commitments on allocation.

Mr. Scott: That's a harvest of any kind.

Mr. Taylor: A directed harvest of any kind.

Mr. Hunter: My answer is, you're right; those issues are extremely important, economically and socially, to British Columbia. I think we are at the point where this issue of revitalization planning should be behind us. Let's get on with it. Let's address the other issues you have identified.

As I said earlier, we've had two decades of talk about this. To delay it any more is to deny the problem and avoid getting on with it. I'd love to talk to you about AFS for the rest of the day, but let's get this....

The Chairman: Mr. Byrne.

Mr. Byrne (Humber - St. Barbe - Baie Verte): I'd just like to comment that if the Titanic could do a reversal of position as fast as this when it saw the iceberg coming, it never would have gone down. We've spent the last probably two months hearing from the Reform Party on how terrible this plan is. I think you've just ruined question period for today, because I don't thinkMr. Mifflin will have to respond quite so -

Mr. Scott: [Inaudible - Editor].

Mr. Byrne: I think I have the microphone, thank you.

I'd just like to say that we did have the Coastal Communities Network appear before the committee last week, and this issue did not come up about allocation. At that point in time it was too important to keep the coalition together so they could scuttle the plan. I think that was probably the intent. It's just interesting to hear that the allocation for the native fishery now has suddenly become important to the Reform Party.

I guess I'd just like to get a sense of.... I'm probably continuing on with the same line of questioning the other committee had. First off, to put it on the record - I wasn't here for the initial part - how many people do you individually or collectively represent in terms of your sectors?

Mr. Hunter: The companies I represent here employ in the order of 9,000 people, peak employment season, in processing plants, and own and operate vessels that would account for another - I'm guessing - 500.

Mr. Byrne: Basically you support the plan.

Mr. Hunter: Yes, sir.

Mr. Taylor: I would answer that by deferring to the colleagues I represent. When we've gone over how many people we represent in all of the different organizations, plus the people who have showed their support by stacking their licences, and already have their license applications in to DFO, it's in the hundreds. I think it's also evidenced by the tens of millions of dollars that have been spent in licence acquisitions, licence tradings and people preparing to move ahead with this plan on the basis of the minister's commitment to fleet revitalization.

All those people are that silent majority we're talking about, people who aren't heard in the newspapers but are just getting ready to get on with the fishing, get on with their lives, get on with their jobs. There's a large constituency, a large proportion, of the fleet out there that just wants this behind them. Let's get on with it. Let's get the minister to announce the plan and let's get on with life so we can deal with our fishery and deal with the fish.

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Mr. Rombough: We have to look as well, as Greg said, with the group.... I'm a gillnetter from the Campbell River area, and back in September we devised a plan, which we submitted to the round table as a recommendation for the structure of the fleet rationalization. Our plan wasn't accepted. We got little areas of it, but it wasn't accepted.

We had a meeting of a group of 100 gillnetters in the Campbell River area; that included people from other areas and other groups. We came together and worked on this plan. When we submitted it, we had consensus.

John Murray, who's here, is the president of the Pacific Gillnetters' Association. I think he's representing hundreds of gillnetters. Mike Griswold is with the Gulf Trollers' Association, which again has hundreds of people. I'm not sure whether Larry Wick is officially associated with the vessel owners, but he represents a very significant number of seine boats as well.

Mr. Byrne: On a point of order, my colleagues basically objected to our having conversations with the witnesses as opposed to asking questions, and I would support that. So I guess we should consistently stick with questioning the witnesses as opposed to badgering particular answers or having conversations.

Would you agree, Mr. Chairman?

The Chairman: I'm not sure if I follow you, Mr. Byrne.

Mr. Byrne: Well, I think they suggested that I wasn't asking a question, that I was conducting a discussion with the witnesses as opposed to asking a question when I said -

The Chairman: I don't recall their saying that. I'm sorry, but perhaps I missed -

Mr. Byrne: Correct me if I'm wrong.

Mr. Cummins: I don't know what he's talking about.

Mr. Byrne: It probably didn't register on the microphone. My apologies.

Mr. Scott: It's okay, Gerry.

Mr. Culbert: As soon as this debate is over, Mr. Chair, I have a couple of very quick questions.

Gentlemen, I thank you for being here and for your very informative presentation, although I had to miss a part of it because I had to sneak out to another commitment.

I heard you say that from your perspective at least there was good industry consultation and there was input from the majority of people who wished to participate in it. So I wanted to follow up on it.

One of the points made by previous presenters was the effects on not the boat owners, but the crews from the boats and on communities. For example, in the Campbell River area, are any socio-economic studies being done or have any been done over the years of the fisheries, the effects of the decline in the fisheries, and so on?

Mr. Rombough: To my knowledge a study hasn't actually been done, but it's the most major concern in Campbell River right now. That's the position of the city council and the mayor of Campbell River. These people are constituents; they have to take care of those people.

These people have been given a raw deal, and we support their position 100%. Adding insult to injury, the HRD office has just been closed in Campbell River, exactly when this is happening.

We have a very serious concern in Campbell River, and we definitely are very urgent in our demands to Mr. Mifflin that there be some assurances and some clarity on the direction these people can expect to go in, on what is available to these people, and on what funding opportunities exist through HRD or whatever. They need a clear objective as to what alternatives they're going to have.

But no, I don't think there actually has been a socio-economic study in Campbell River.

Mr. Taylor: I believe the only socio-economic study that has been done on the coast in regard to these kinds of questions has been done for Prince Rupert. I believe it was completed two years ago. It pointed out that many of us in the fish industry think the world revolves around us.

When you take a more global vision of what our community is composed of and the economic impacts on our community, you find out that while the fishing industry is very important and is an important contributor, it's by no means the most important contributor to the community. The community will not be devastated by this plan and by the displacement of workers.

Certainly it's a problem that has to be addressed, but in taking a more global vision of communities, of what comprises a community and what makes up the vitality of a community.... I think the report points out that you have to take a larger perspective than just what the commercial fishing industry means to it.

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The other thing I want to point out is that everybody talks about the workers who might be displaced, but let's have a little more vision. Let's think about the people who are going to be left. They're going to be much more successful people, financially. They're going to be much more vital contributors to the community. They're going to be very successful and pay more taxes. The industry that is there after the fleet revitalization program is concluded is going to be a very successful fleet, not nearly so dependent upon government subsidies and others to maintain it. We will, at the end of this program, enhance coastal communities, certainly not devastate them.

The Chairman: A last word to Mr. Hunter.

Mr. Hunter: I would like to say that I don't want to see in my home province what happened to my sister province of Newfoundland, where fisheries policy was, if not dictated, moved quite importantly by concerns over coastal communities. Let's keep the last 5,000 tonnes of fish in the plant.

I think we ought to have learned that is not the answer. We don't want to see that. We're very concerned about what happened in Newfoundland and the impact it had on the people. We think we have to avoid it by being bold, by looking after the fish. There will be impacts on coastal communities, but they're going to come anyway because of things Les has talked about - fishing fish more closely to the rivers.

It sounds hard. There's no question that you can't escape the fundamental fact that decommissioning capital and labour in an industry as large as the B.C. salmon fishing industry is going to hurt people. I think the key to this is to get Human Resources Development Canada fully engaged. I think it was a sad mistake that it wasn't done at the outset.

Thank you.

The Chairman: Thank you very much for coming here and for your contributions.

The committee finds itself as usual in a place of having to draw on wisdom of biblical proportions to figure out which side is being the most up front. That's our problem to figure out and to make recommendations to the minister based on the witnesses' testimony. Thank you all very much for coming.

We have two more people, Mr. Newton and Mr. Sutcliffe. We can give you only half an hour. Could you approach the table, please, and make your presentations. Please identify yourselves by telling us who you are and who you represent, and we'll hear your presentations.

Mr. John Sutcliffe (United Fishermen and Allied Workers Union): Thank you.

Mr. Chairman and members of the committee, my name is John Sutcliffe. I was asked to come here by the Pacific Salmon Alliance, which is the current formation of groups that are opposed to this plan for fleet revitalization. In addition, I work for the United Fishermen and Allied Workers Union as a small boat organizer. I myself have a licence, although I haven't fished salmon for a few years because they don't allow me to while I'm in this job. I have trolled salmon for 25 years and served on many industry committees.

There's a lot that I would like to respond to, but I think I'll return to the points that people wanted me to come here and make. I'm sure there's no question in the committee's mind that there should not be fleet reduction. Nobody is taking that position. One of the great opportunities the round table produced was widespread agreement on significant fleet reductions. It's probably the first time in history we've had that kind of agreement. Quite strikingly, in addition to that opportunity, there was a commitment from the industry for some form of cost recovery to make it work.

My feeling is that great opportunity has been blown. I don't even know whether we can get back to serving the resource as we should be through a fleet reduction plan, given the crisis that is unfolding around what I and so many others consider to be such an ill-conceived response to fleet reduction.

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The problem is not whether to reduce but how, and last week I think you heard from a large number of people, from different organizations. As Mike Hunter said, they were some strange bedfellows for sure. But what you heard about were the anticipated impacts, serious impacts, of this plan.

This plan is extreme in many ways. That's visible to the majority of people in the industry. Impact studies have not been done, and the expectations of those people who are going to be impacted by it and the concerns that were expressed for the resource I think are real and at least beg some further study and caution before we proceed with what is going to be an irreversible process for fleet reduction, the rearranging of the fishing privileges, and so on.

What I want to talk about more than those impacts is a fairly significant issue that I think has not gotten much attention, and that is that the plan will not and cannot do what it purports to do. It will not, nor does it make much mention to this other than a vague reference, address the conservation issue and it is not addressing the fishing capacity issue either.

I won't go into great detail, but I want to suggest an outline of why that is so. It's actually often been a flaw of licensing policy in the past that we reduce boats but end up with much more capitalization and much more fishing power. Peter Pearse in particular and others as well have identified the problem. I think we're on the verge of unleashing a whole new round of over-capitalization and significant increases to the capacity of the fleet that remains...and probably total increases in capacity as well, with serious consequences for the resource.

Area licensing and stacking are key elements in this program. They are proposed as a conservation fleet management tool, but with the way the areas are drawn.... And the pressures you've heard speakers just before me so eloquently describe are caused by unsustainable areas being designed and by very little concern about fishing opportunities for licence holders or sustainability of fishing activity in those areas. They are driven by the fleet stacking to fleet reduction function of area licensing. It is not in this plan a fleet management tool. It's a fleet reduction tool, clear and simple, and if you're familiar with the coast and the fishing patterns there, you would know why it is that fishermen cannot survive with the reduced fishing opportunity this plan leaves them with and why they are forced to stack or forced to leave.

When John Fraser made his report responding to the crisis in the fishery in 1994, he clearly identified a capacity problem that struck a chord right across the country with the expression that we were twelve hours from disaster. Fishing for twelve hours more could have ruined the resource. He was referring to a particular fishery, the seine fishery, where at present there are 520 boats participating, not the 4,400 boats the salmon fleet consists of.

That capacity issue is not addressed in this plan. There is a floor, except for what could be taken out by buy-back. My understanding - and DFO staff here today may be able to confirm with some numbers - is that buy-back is not going to reduce an awful lot in that fleet, and there is a floor on reductions because of the area configuration of 50%. That's it.

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As you've probably heard described, the overcapacity in that fleet is significantly more than 50%. Even if the fleet were to reduce the maximum possible here, you would still have line-ups of people waiting to fish. The difference will be that every time a net goes in the water, it will be a net driven by thousands of horsepower. The vessel will have bow thrusters, tilt ramps, and will be the most efficient possible fishing operation available in the west coast fleet. There will be no rest as an older vessel sets its net and goes more slowly about making a set.

The point is, in terms of impacts on the resource and fishing power, fishing capacity, there is no serious address, no quantitative reduction in the fishing power. Given the problem John Fraser identified, that will happen.

Curiously, in the small-boat fleet, where there is not a capacity problem - sometimes there is, sometimes there isn't - you should know that in two or four years, the small-boat fleet, the troll and gillnet fleet, will have difficulty achieving its allocation. There is not a capacity problem there. There are fleet management concerns, but there is not a capacity problem.

Strange, then, that this plan will have an impact far in excess of the 50% reduction guaranteed, probably before 1997, on that fleet. That fleet is the independent owner-operator fleet. That fleet is a fleet that lives in the coastal communities. That fleet by and large is where the aboriginal fishers participate as owner-operators as well.

There is no floor in this plan on the reduction that can take place in that fleet. Their fishing opportunity has been reduced - we're down to one-sixth of what it was - if they fish both gears, both troll and gillnet, which is a fishing opportunity they have. It's true that sections of the fleet take advantage of the fishing opportunity in different ways, but overall, and for the mathematics of fleet reduction, potential fishing opportunity has been reduced to one-sixth, and the potential stacking opportunity produces an incredible fleet reduction that will be so far below 50% by 1997 it raises in my mind serious questions about what is the intent of this plan.

Some have argued, in addition to that, that there can be transfers of the fishing privileges in the troll and gillnet sector to the larger seine sector, which has this 50% floor on the amount of reduction. This doesn't address the capacity in the first place.

I don't think that's significant. There are some limitations on how much transfer can go on there. But what will happen is that by 1997, given average survival rates - we had, for example, in 1993 the largest escapement of the Fraser River sockeye since 1909 - average survival rates will produce significant runs, in the order of those we've had in the cycle year in which the small-boat fleet had great difficulty catching its allocation.

In 1997, instead of having 2,500 gillnetters, given the most conservative assumptions about what can take place with fleet reductions through stacking, we will be lucky to have 1,200 gillnetters. The same goes for the troll fleet. They will not possibly be able to harvest their shares. What is going on here?

If they can't harvest their shares, I suppose reallocations are possible, one way or another. But it raises serious questions about the purpose of the plan. If all the plan is doing is addressing the simple public perception that there are too many boats chasing too few fish, we whack half the boats and then we've made a major contribution to the conservations problem on the west coast resource, then I think you have a problem.

Dr. Pearse mentioned earlier that the linkage between fleet reduction and conservation is not clear in this plan. I would suggest that not only is it not clear, it's also not there. I would suggest that the public, increasingly, on the west coast - and the more familiar you are with the fishery, the more likely it is - thinks there is no link, no link at all.

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We're addressing certain people's agendas. Some of it's DFO's agenda, to do with their fleet management concerns, but there are other ways to do it.

I was on the round table and on the troll panel. I would like you to know that DFO, in that panel - I don't know about the others - made it quite clear, when we were discussing fleet reduction and ways of doing it that would make sense in terms of the needs of the fishing community and addressing resource concerns like by-catch and so on, and more selective fisheries, that those items were not on the table until there was an agreement on 50% quantum for reduction and that a stackable area licensing option was the only way that could be done. After that, they said, they would address effort controls.

The curious thing about effort controls is that it's probably one of the most effective ways to address fishing power. In fact, there are very simple things you can do in all sectors to have dramatic, 50% impacts on catching power through input controls.

The Chairman: We have only 15 more minutes. If you want to take some questions, that's fine. If you want to use it all up with your presentation, that's fine too.

Mr. Sutcliffe: All right. I'd prefer to take questions, so I'll stop.

The Chairman: Okay. Mr. Scott.

Mr. Scott: My questions would be related to the questions I've been asking the witnesses all morning. It comes back to the issue of allocation, to the issue of how people can be expected to make decisions about licensing when there's no assurance of access to the resource, and how you view the instability that's been created as a result of the aboriginal fishing strategy and the government's stated objective...maybe not stated objective, but very clear intention to convey salmon in aboriginal treaties.

Mr. Sutcliffe: There is no doubt these issues are critical in the minds of fishermen, and critical, absolutely, in terms of public policy and all of that. The uncertainty fishermen are faced with, which was described very well by a previous speaker, is acute and is not, in my mind, a reason for proceeding with this sort of fleet restructuring. Rather, it is a reason to pull back and to solve some of those other issues.

I think judgments made in the face of the uncertainty and insecurity fishermen face today are very problematic, particularly when the results are so irreversible in terms of people's participation in the fishery.

Mr. Scott: Have you taken a position with respect to the allocation issue, or is that something you're not...? Because I hear you saying yes, it's something we have to resolve, but what are your views on the allocation issue? What are your views on what's been happening with the aboriginal fishing strategy and the Nisga'a agreement in principle, which is setting the precedent for how fish may be conveyed in land claim settlements in British Columbia?

Mr. Sutcliffe: As you may know, we have fairly developed positions on that. I haven't been a spokesperson on those issues, but we've been quite clear, I think, about the use of fish as currency, that the fishing industry should not be burdened with those costs in settlement, that there are costs to the country, that there has not been fairness.

This is a very general response, but I'm not in a position to get into it in great detail. There is no doubt the allocation issue, both the inter- and intra-sectoral allocation issues, should be resolved before individuals are forced to make the kind of commitments they're being forced to make in this plan today.

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There's one brief point I would like to add with respect to the conservation issue, and whether or not it's being addressed by this plan and the whole business about hurrying up because we have a problem this year. This plan actually provides an opportunity for fishermen to fish in the north this year and to increase pressure in the Skeena, contrary to a former witness's claim, than even a status quo situation would allow. Fishermen can opt for the north this year and stack their licences for the south next year. There will be more boats in the Skeena this year than a status quo situation, particularly if licence fees had been forgiven. Southern fishermen would have stayed south, and people who've bought second boats and may have left them in the south, and so on.

People are being forced by some of the terms of this plan to actually take the second or third vessels they've bought to position themselves in this new fishery, should it come to pass. They're being forced to take them north to fish. Then they get to restack in the south next year.

I think that's a reasonable opportunity for fishermen to have, but it does raise serious questions about whether conservation has anything to do with this plan - I think.

The Chairman: Mr. Culbert.

Mr. Culbert: Good morning, John. It's good to have you here.

First of all, I just want to touch on a couple of things, the effects of the crews and the workers in the communities with the downsizing...of the effort of the resource with, quite obviously, conservation as the priority issue. Obviously, as a UFAWU worker yourself you would have some sympathy in some of those areas. I wondered what your position was there.

Second, I think I heard you say that the industry consultation process was satisfactory. You might want to touch on that for this particular issue, and I think would be good for subsequent issues that come up with regard to fisheries and the forms of consultation that should be used.

Mr. Sutcliffe: On the first point, there is no doubt, and it's certainly our position, that people displaced from the fishery - as there will be, no matter how we go about doing it - should be given retraining opportunities and first opportunities for much-needed habitat. Protection work is something we have to get on with. Unfortunately, it's something not addressed by the plan. It's only inferred, I suppose.

I think there are major opportunities. From works projects HRD was involved with this winter, I know participation by fishermen was at first wary, but by the end of those projects - and they were mainly habitat-related with a large training component - it was an extremely successful program. I think people in HRD would confirm that for you. It was an extraordinarily successful program, both in the minds of the participants and in terms of the results of the projects.

I think the consultation process was flawed. I remember the second question asked. I asked the second question at the initial meeting of the full round table. I said I thought it might be worthwhile. paid by fishermen; 876 licence-holders pay me to work for them. I heard all summer long that people were very concerned about the composition of that round table. There was a perception out there that many, if not most, of the people participating had a particular stake. They were multi-licence-holders.

So I thought it might be a good idea, just to legitimize that process in the beginning, for people to lay out their licence holdings on the table. That's not to say that multiple licence holders shouldn't be participating, but just to address the concern in the fleet that they were not being represented in a balanced way in that process.

The round table would not do that. The overwhelming majority of people, for whatever reasons, didn't agree to that. I think that process continues to be plagued by that problem, that people feel there was not adequate representation of the different interests - multiple licence holders, single licence holders, by area and so on - but it was not bad. We've certainly done worse, and it can be fixed and improved.

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More process is absolutely necessary to address some of what in my mind are extraordinarily serious shortcomings in this plan, both from the point of view of conservation and from the point of view of addressing the overcapacity and certainly the overcapitalization problems with it.

Mr. Culbert: Thank you, Mr. Chair.

The Chairman: Are there any further questions?

Since there are no further questions, I thank you very much for coming in. We've heard quite a bit of your position previously, but we'd like to hear you again.

I'd like to also thank Mr. Cruickshank, who's still here with us, for his contribution. We'll have to rely on him and Mr. Pearse, as independent observers, quite a bit in the future.

I want to remind you too that Mr. Fraser may be coming, but I'm not sure when. It may be the week of May 27.

Members, we start the estimates on Tuesday. The minister will be appearing at 3:30 on Tuesday afternoon. He'll probably get some questions on the Mifflin plan at that time too.

Mr. Wells.

Mr. Wells: On the question of the inspection fees for plants, which we discussed last week, we'd asked for information to be given to us. We have a thirty-day period in which we're operating.

I checked with the department today. The information is not available and we're not going to have it until probably the end of the thirty-day period. That is not acceptable, but that's what they told me this morning.

I would request that we ask the minister to extend that thirty-day period until we can be supplied with the material this committee requested of DFO, which has not been provided within the thirty-day period, so that we can be given an opportunity to review and make recommendations before the implementation of that fee. It's not acceptable that the material has not been delivered to us within the thirty-day consultation period.

The Chairman: I'll make that request.

Mr. Wells: Thank you.

The Chairman: Is there any other business?

The meeting is adjourned.

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