Thank you, Mr. Chairman.
I do recognize a little bit of a Saint John accent there. My accent has gone a little bit, but I'm originally from Saint John, so it's good to know that the chair is from the great city of Saint John.
Mr. Chairman, my name is David Ramsay. I'm the Minister of Industry, Tourism and Investment with the Government of the Northwest Territories. With me is Peter Vician, the deputy minister of the department. Also here is Mr. John Colford, our director of investment and economic analysis.
As Minister of Industry, Tourism and Investment, I'm responsible for supporting the commercial fishery in the Northwest Territories, which is largely centred on Great Slave Lake. This is obviously the topic of discussion with your committee today.
For background and context, I will note that the economy of the Northwest Territories is resource based. Mining and oil and gas dominate the economy and provide substantial contributions towards our gross domestic product. Today these sectors are robust, and the future is certainly very promising.
The mining and oil and gas sectors are dependent on a number of factors that here in the Northwest Territories we are unable to influence and control. World prices, a healthy national and international investment community, and access to international markets are only a few of these influences that greatly affect whether or not one or all of these sectors can flourish in our territory.
When any one of these influences experiences a downturn, the opportunities and benefits to northerners and our economy quickly erode, and in some cases disappear. Our economy has been witness to examples of this over the past number of decades.
The Northwest Territories also have a number of smaller economic sectors that are also resource based. These include the traditional economy, such as fur trapping, an emerging agriculture sector, and of course the fishery. These industries are small relative to the rest of Canada, but very important to our people and our economy here in the Northwest Territories.
They are largely homegrown industries involving renewable resources, and they engage northerners in all 33 of our communities in the economy by providing benefits in the form of employment or income and offering tremendous social benefits to the small communities. These industries also offer employment to those who, for whatever reason, can't or choose not to participate in the larger non-renewable resource sectors, and they provide stable, reliable sources of income for their families.
In summary, when all else fails and all other options disappear, these small sectors are relied upon to provide northerners with an option for employment and income.
Now let me speak specifically to the fishery on Great Slave Lake. I'll first point out that the fishery in the Northwest Territories is competently and professionally managed and regulated by the Department of Fisheries and Oceans, and we have an exceptionally healthy, well-managed stock. In fact, our problems today, contrary to those elsewhere, have very little to do with the stock, but more with capacity and production.
Again for context, let me provide you with a bit of history. The commercial fishery on Great Slave Lake has been in existence since the 1940s, when it was largely unregulated and controlled by buyers serving growing markets in southern Canada and the United States. In those years, fishing was good, but the resource was overexploited. In about 1950, 4,500 metric tonnes were taken from Great Slave Lake. Lake trout as a population was almost wiped out entirely, and whitefish became and remains today the dominant species.
In the 1950s and 1960s, the Government of Canada, through DFO, stepped in to bring about regulation and control. A commercial quota approximating 1,650 metric tonnes was established, as well as a restricted entry regime regulated by vessel certificates that allowed for only a limited number of fishing vessels to be on the lake. All of these certificates were fully subscribed up until the early 2000s.
These vessel certificates are reissued each year. Holders of these certificates do not own these certificates, nor can they attach themselves through the certificates to a quota of fish. These certificates have no monetary value assigned to them, so offer fishers no support in securing bank financing.
In 1969 the Government of Canada introduced the Freshwater Fish Marketing Act. This act established a federal crown corporation, the Freshwater Fish Marketing Corporation, or FFMC. The purpose of the act and the FFMC was to regulate interprovincial and export marketing of fish in western and northern Canada. The fishers of the Northwest Territories support their ongoing relationship with FFMC.
In about 1970 the Government of Canada, through the FFMC, established a fully certified fish plant in Hay River and fish collection stations strategically situated around Great Slave Lake. The lake stations allowed fishers to deliver fish to FFMC without having to transport these back to Hay River. These lake stations enabled fishers to follow the fish around Great Slave Lake.
From the 1970s through to the early 2000s, the fishery provided a reasonable income for fishers, who for the most part were made fairly secure in their circumstance largely due to a restrictive licensing regime put in place in the 1970s. Over 250 people, 90% of them aboriginal, were actively involved in the fishery.
The principal species for Great Slave Lake fishers is export-grade whitefish. This species represents 90% to 95% of the annual fish harvest. This species grade allows our whitefish to be exported from Canada to markets around the globe. Given the fat content of Great Slave Lake whitefish, it is often directed by FFMC to the smoked fish markets found in Canada, the United States, and abroad. Others species of fish harvested include trout, pickerel, cony, and northern jackfish, the latter being highly sought after in France and other countries in the European Union.
While the Government of Canada did play a significant role in the Great Slave Lake commercial fishery through the management regulation as well as initial capital investments, this has not been a one-sided effort by any means. The fishers, through their production, paid all the costs associated with the FFMC operation of the commercial fishery. The Government of the Northwest Territories has also provided for freight support to transport fish from Great Slave Lake to the FFMC plant in Winnipeg.
This support allows fishers on Great Slave Lake to deliver their fish, gutted and gilled, to the fish plant in Hay River or to the lake stations, where it is packed on ice and shipped to FFMC's Transcona plant in Winnipeg for processing and sale through their national and international marketing network. This support also ensures that the fishers on Great Slave Lake receive the same price for their fish as the fishermen from Lake Winnipeg. This cost, from the mid-1980s to date, is in the millions of dollars. In addition, the Government of the Northwest Territories has also provided capital assistance to fishers looking to upgrade and modernize their equipment.
The most significant changes to this fishery occurred between 2003 and 2008, when costs of operations exploded and revenues declined. External influences took hold. The weakening U.S. dollar and economy and the unprecedented rise in the price of fuel resulted in a dramatic drop in production and participation. Production declined from almost 1,000 metric tonnes to less than 300 metric tonnes in a span of two years or less. Only 20% of the commercial quota is being harvested today.
All equity in this fishery was lost in a very few short years. Many fishers lost hope and simply put their vessels on shore. Vessel certificates, which always were oversubscribed since they were introduced in the 1970s, were now available to anyone who made application for them.
In response, the FFMC imposed dramatic cost-cutting measures to simply survive and meet its mandate of cost neutrality. The effect of these measures, combined with rising costs of production, brought our commercial fishery to near collapse. Production over the next several years dropped dramatically. The winter fishery was closed, the lake stations disposed of, and the FFMC on-site management diminished considerably.
Now, in 2013, the commercial fishery on Great Slave Lake is slowly rebounding. Deliveries of fish to the FFMC are marginally increasing, and new markets are emerging here in the NWT. This government has supported a number of fishers, who are now developing a domestic commercial market for fish fillets here in the NWT. Volumes are approximately 90 metric tonnes per year. This is very small relative to the overall quota. While small, almost all of the production is being sold in an added-value format, meaning more employment and income for this fishery. The local market is growing annually. We will continue to make investments directed not only at building capacity but also in branding our whitefish and other species to distinguish these products from others that are being imported regularly into the NWT.
While fishers' equity remains very weak, we do have a willing partner in the FFMC. But they find themselves hampered by economic burdens. The FFMC, by virtue of its own legislation, is neither nimble enough nor capable enough to affect the status quo. The FFMC must operate on a cost-neutral basis. They receive no subsidy from Canada. The FFMC lake stations are gone, and the main FFMC fish plant, established in the early 1970s, is literally falling down and too costly to repair and operate.
We now find ourselves in the dilemma of having a healthy, viable stock of fish, willing markets both in the NWT and elsewhere, but a rapidly declining capacity to deliver. If we fail to solve this dilemma, then the future of this fishery is not very bright. Canadian markets face the prospect of losing a valuable and, without question, sustainable food source harvested from clean, cold, pristine northern waters. These are not simply marketing attributes.
The Great Slave Lake today is one of the last great water bodies in North America not impacted by industrialization or urbanization. The water is clean and safe from contaminants. But we can't be complacent. Climate change is certainly a reality. Such invasive species as Asian carp and zebra mussels have wreaked havoc on other water bodies in North America. Downstream pollutants, regardless of the source, are always a threat. We need the support of the federal government to put in place the means and protections to ensure that the integrity of Great Slave Lake is safeguarded for future generations.
In terms of the commercial fishery, a small investment of approximately $5 million over the next several years would make all the difference to this small industry. This investment would not only bring capital for a new plant but would also provide the means to reinvigorate a very tired and aged fleet. An investment of this size could very well result in attracting 200-plus northern residents back to the fishery, leading it to a new era of self-sufficiency and returning it to the status of a smarter, leaner, more nimble industry once again.
We here in the NWT would be happy to work with the federal government and look at building the business case for this type of investment. We firmly believe there is a future for this fishery and it will certainly be worth the effort in trying to save it.
Thank you very much, Mr. Chairman. I'd also like to thank your committee members for their indulgence this morning.
That's good, Mr. Chisholm.
As you probably already know, I'm the Minister of Transportation as well, so I know what it costs us, what impact climate change has on our transportation infrastructure in the NWT, and what are the repairs needed on an annual basis to our roads because of permafrost.
I think what we're seeing here with climate change is that where we put in ice roads, we're not able to maintain them as long. The season is not as long.
We've had some years.... As an example, I think it was in 2008 that the mining companies north of Yellowknife, which are dependent on the ice road for resupply, saw the season shortened by I think three or four weeks. It cost them $100 million to bring goods into the mines north of Yellowknife.
We also see some impact in the northern part of the territory, with beluga getting trapped in the Husky Lakes. We could probably attribute that to climate change as well.
I wanted to mention this specifically as well. On Great Slave Lake, we've seen the return of lake trout and inconnu into Yellowknife Bay. According to the aboriginal people, they had been in abundance in Yellowknife Bay prior to the mines coming to Yellowknife in the 1930s. The fish disappeared for basically 70 years, and those fish are coming back.
Con Mine shut down a number of years ago. For the Giant Mine, as you know, we're still looking at a significant investment by the federal government to clean up the mine site. But there's no blasting there, and there's no mining taking place near Yellowknife, and the fish are back in Yellowknife Bay. We believe that's a result of the mines closing down a number of years ago. The fish are back, so I wanted to mention that as well.