Good afternoon. Thanks for the opportunity to speak to you today on this issue.
My name is Bruce Turris. I'm the executive manager with the Canadian Groundfish Research and Conservation Society, which is a commercial fishing industry organization representing participants in the groundfish trawl fishery in British Columbia. It includes licence-holders, vessel owners, quota holders, crew, and processing companies.
I'm a fisheries economist by training and have been involved with the management of the commercial fishery since the early 1980s. My first activity was the implementation of an at-sea observer program in a joint venture groundfish fishery off the west coast. I was employed by the Department of Fisheries and Oceans for 14 years, leaving in 1998 and setting up a company called “Pacific Fisheries Management”, where I am president. The company offers consulting services, including fisheries management, policy certification, and strategic planning services, not only to commercial fishing organizations but to anglers, the MSC, and government agencies.
Today I'm here to talk to you about adjacency, owner-operator, and fleet separation policies in the B.C. commercial groundfish trawl fishery. To understand why these policies are not feasible, applicable, or workable in the B.C. groundfish trawl fishery, it's important to understand the evolution of the fishery itself.
There's been a groundfish trawl fishery off the west coast of Canada since the 1940s. Prior to extending its jurisdiction, there were Russian, Polish, Japanese, and Canadian trawlers fishing off the west coast with little or no regulation. In 1976, concurrent with the creation of an EEZ and extended jurisdiction, the phasing out of foreign fishing, and addressing concerns about excessive harvesting capacity, the government limited entry into the B.C. groundfish trawl fishery.
A total of 142 limited-entry T licence—or category T—groundfish trawl licences were established, based on historical performance and investment in the fishery, including many licences issued to vessels owned in part or entirely by processing companies such as J.S. McMillan, BC Packers, Ocean Fisheries, and the Canadian Fishing Company.
From the beginning, the groundfish trawl fishery has been a large-boat, high-volume, low-margin fishery, targeting many groundfish species throughout the coast for the entire year. It's a year-round fishery and is necessitated to be that to meet the market demands as required.
From the beginning, the groundfish trawl fishery has been a fishery where the costs associated with the vessel, gear, maintenance, crew, and fishing itself are extremely high, as they are for processing groundfish. This is one of the reasons why there's been this joint ownership and affiliation between the vessel skippers, vessel owners, and the processing companies.
Furthermore, the primary market served by the fishery is the U.S. west coast, mostly California, where they require fresh-processed filleted or headed, gutted, and tailed product on a weekly basis consistently throughout the year. To secure supply and maintain important markets, processors often invest in trawl vessels.
Since limited entry, B.C. processing companies have owned or co-owned approximately 25% of the licences, but these vessels are often the larger vessels and have represented upwards of 50% of the catch. Generally, their vessels are the most productive in the fleet and are generally co-owned with independent skippers.
Through the seventies, eighties and early nineties, groundfish trawl efforts continued to expand under a management regime that attempted to provide year-round access by increasingly restricting fishing access through declining species-specific and coast-wide trip limits or limits on the number of trips and the fishing time. TACs were based on the best available science and were often coast-wide on a species-specific basis.
This is a multi-species fishery, and it's not uncommon to catch more than a dozen different species in a single tow. Annually, the fishery catches more than 60 different TACs and 100 different commercially sold species.
Trip limits were on a species basis. As fishermen filled one limit and targeted another, they would discard species for which they'd already achieved their limit. As the limits declined throughout the year and in successive years, the amount of discarding increased dramatically, to the point where the industry was actually reporting to the government that their released quantity of fish was exceeding the landed quantity of fish.
By the early nineties, the discarding of fish had come to a critical level. As well, we had problems with misreporting of landed catch. It was misreported to avoid the reduction of trip limits and to hide the species of catch so that they weren't detected for being over any specific trip limit.
During this time, between 25% and 40% of the annual landed catch was actually being landed in U.S. ports, generally in Blaine, Bellingham, or Anacortes. About 20% or less was landed in Prince Rupert, with the majority of fish landed in the greater Vancouver area and some in Ucluelet, on the west coast of Vancouver Island.
Even without the unreported discards and misreported catch, we were still exceeding the TACs based on the little information we had on reported catch. In fact, the number of TAC overages was increasing on an annual basis. The situation became quite dire in 1995 when the fishery was closed for the very first time since the 1940s. It was closed because far too many TACs had been exceeded, and international obligations had been undermined.
Based on those conservation concerns, the groundfish trawl fishery was allowed to reopen under strict conditions, and those conditions were: 100% at-sea observer coverage on all bottom trawl trips; 100% dockside monitoring of all fish landed so we would get accurate species information; management on a stock-specific basis; and, individual vessels being accountable for everything they caught while fishing. That included not only directed catch but also bycatch.
In 1997, individual vessel quotas were implemented to meet these requirements. As well, each vessel was allocated a share of the approximately 60 different TACs that were identified. The accurate accountability came from at-sea monitoring and estimates of catch by both area and species, as well as any releases at sea, and that was also followed up with comprehensive and complete dockside monitoring. All of this was carried out by government-certified contracted service providers.
The at-sea and dockside data are merged to calculate total catch weight, both retained and released, on a stock-specific basis, and then that's deducted from the vessel IVQ allocation. If a vessel has insufficient quota to cover its catch, it has to transfer fish to another vessel to cover that, or else it has to remain at port and not fish for the remainder of the year until it's deducted from the following year's allocation.
It's a very complex system. It requires time and flexibility regarding the access to movement of quota. There are about 4,000 quota transfers done annually between vessels to cover bycatch and quota overages. Fleets have to work collectively with their processors, based on market concerns, and amongst other fleets from both independent and company vessels to move quota in an efficient way so that everybody continues to fish, and they do that.
Of the 60 different species IVQs or TACs that I mentioned, 15 are coast-wide stocks and only 13 are specific to the Hecate Strait and Dixon Entrance area, which is close to Prince Rupert. Of the 63 million pounds of fish that have been caught so far this year, about two and a half million pounds—or just under 4%—have been caught in Hecate Strait and Dixon Entrance, again, the area closest to Prince Rupert. About 88% of that, 2.2 million pounds, has been landed in the Prince Rupert-Port Edward-Port Simpson area. Thirty-three per cent of that 2.2 million pounds has been processed in Port Simpson.
Again, it's a high-volume, low-margin fishery. For this reason, the bulk of the processing is centred around Ucluelet and the greater Vancouver area, where the economies of scale will allow for productive value-added processing and it's close to the markets being served in the southern west coast of the U.S. Today, more than 98% of the groundfish caught in British Columbia is landed and processed in British Columbia. Less than 2% of that goes across the border.
It's a fishery that now meets all the conservation requirements for sustainability. It's a fishery that is acknowledged by eco-certification organizations such as the MSC, the Monterey Bay Aquarium, SeaChoice, and the Vancouver Aquarium's Ocean Wise program. It is also a fishery that is remaining profitable and viable because of its ability to fish coast-wide and operate at high volumes with good economies of scale.
It's a fishery where the processing companies have been involved with the co-ownership of vessels. This is by design, because you want a vessel to be operated by a skipper who has an investment in it. The co-ownership and the vertical integration that we have in the industry are essential to the economic viability of the industry, not only for the processing companies but for the vessels and the vessel operators themselves.
Thank you, Mr. Chair and members.
The BC Seafood Alliance is an umbrella organization, the 17 members of which represent about 90% of wild harvested seafood from Canada's west coast, worth about $850 million annually. Our members are mostly associations representing all or most of the licence-holders in virtually every major commercial fishery in B.C. Those include salmon and herring, once the backbone of the industry, but now dwarfed by the success of prawns, sablefish, halibut, geoduck, and other groundfish and dive fisheries. We are by far the most representative fishing organization on the west coast, and our ultimate constituents are independent fishermen.
A recently updated study from 2014 by Gordon Gislason demonstrates that wild seafood contributes more in sales value, wages, benefits, employment, and, ultimately, GDP than does either aquaculture or tidal recreational fishing in B.C. How did we get to this point?
For the last 25 years, DFO has implemented management measures that have led to progressive changes fundamentally aligning conservation and the marketplace. As a result, the relationship between industry and DFO is generally collaborative and pragmatic, based on shared stewardship of the fisheries resource with a range of small and medium market-driven enterprises guided by market-driven policies that allow us to compete in global seafood markets and provide safe, top-quality food to Canada and the world.
Wild fisheries on the Pacific coast are export-driven, selling about 80% of production into a global seafood market. We are made up mainly of independent small and medium-sized enterprises, many of which are family-owned and which operate coast-wide. We're also a small high-cost player immediately next door to Alaska, which harvests the same species, produces the same products, and sells to customers in the same markets, but which operates on a scale at least tenfold greater. When a chum salmon fillet from Hokkaido, Japan, processed in China, sells in Vancouver for less than a B.C. chum fillet, we must make ours worth more by producing a superior product.
For many years, the industry has been one of the largest employers of first nations in B.C. Aboriginal participation declined in the late 1900s and early 2000s, but so too did non-aboriginal participation, following the introduction of weak stock salmon management and subsequent DFO voluntary licence retirement programs. PICFI has had substantial achievements in reversing that trend with the following results: 42% of salmon licences, communal and reduced-fee, are now held by first nations and status Indians, and 37% of gillnet roe herring licences, 25% of all roe herring seine licences, 22% of prawn licences, and 21% of halibut licences are now communal commercial licences. Overall, 29.8% of all regular commercial fishing licences are now in first nation hands.
Your committee has given itself the task of studying “the relevance of the principle of adjacency and owner-operator and fleet separation policies in the Pacific region”. Let me be clear: those policies are not relevant here. They run counter to our export and domestic success, our ability to provide food for Canadians and the world, the conservation requirements of DFO, and, indeed, the future of the resource itself, which belongs to all Canadians. The people those policies would hurt the most are independent fishermen.
I'll tell you a bit about myself. I've worked with various fishing organizations for almost 30 years in both marketing and policy. In addition, I'm the chair of the international Association of Sustainable Fisheries. It provides advice to the Marine Stewardship Council, which is the gold standard for fisheries certification in developing international standards to measure the sustainability of wild seafood. Indeed, next week, I am invited, as a global leader in seafood sustainability and the only Canadian, to join His Royal Highness, Prince Charles, to assess progress towards seafood sustainability.
Conservation has driven our sector over the last 20 years, shaping the way it has developed and encouraging a pragmatic approach to stewardship. More than half our fisheries by volume are in the MSC program. Most of the rest are recognized by Monterey Bay Aquarium's Seafood Watch or the Vancouver Aquarium's Ocean Wise.
Integrated groundfish management, as you've heard from Mr. Turris, integrates the management of 30 different groundfish species across three gear types, making every vessel accountable for every fish it catches, whether retained or not, through a monitoring program that the MSC recognizes as “one of the most rigorous in the world”. It includes 100% at-sea observer or electronic monitoring and 100% dockside monitoring.
We continue to pioneer new approaches, instituting, with the collaboration of conservation groups, the world's first and only individual transferable quota for corals and sponges, sharply reducing the impact of the trawl fleet on benthic habitat. None of this would have happened with the policies you are studying.
In the 1990s, the decision to move to weak stock management in salmon profoundly changed the industry. Indeed, for conservation reasons, many fisheries adopted ITQs.
In 1980, under a derby-style fishery, it took 65 days to catch just under six million pounds of halibut. In 1990, it took six days to catch eight million pounds. In 1990, halibut processing was entirely dominated by the large processors, the only ones that could freeze that kind of volume in a week or so. One year later, the halibut fleet went to ITQs. Halibut is now an eight-month fishery, selling virtually every pound fresh through various small B.C. processors, with little involvement by the large ones, into the U.S. west coast at landed prices of about $8 a pound or more.
That trend is common to most other B.C. fisheries. Structural change to meet conservation needs, whether for salmon, groundfish, or specialty dive products, has meshed with increasing market demand around the Pacific Rim for live and fresh, which return far higher value than did canned or frozen two decades ago.
For another couple of examples, look at the last three big production years for sockeye: 2006, 2010, and 2014. In 2006 we produced almost 200,000 cases of canned sockeye worth about $40 million. It was the dominant product form, with more than the volume of fresh and frozen sockeye combined. By 2014 most sockeye was sold fresh, with the fishery generating more than $90 million in exports. New management measures mean production can be scheduled to meet the needs of the fresh market. That trend, for which B.C. is ideally placed, is not going away. It's what consumers demand and we can supply.
For geoduck, a dive fishery, the production before ITQs went into clam chowder on B.C. ferries or went frozen to Japan at rock-bottom prices. Now, virtually all geoduck, no matter where it is caught on the coast, comes to processors in Vancouver who ship it live 365 days a year to China, Hong Kong, and other markets for a value of more than $50 million annually. As a live product, geoduck is highly perishable. It requires extensive sampling for PSP and other toxins. The only lab facilities for this are in Vancouver, as is the CFIA office issuing health certificates. Market demands, lab facilities, ease of transportation, and cost of catch validation inevitably give the Lower Mainland a competitive advantage over the north.
Here are a couple of other points. First, wild fisheries in B.C. fund science because the management incentivizes proper stewardship of the resource. Geoduck, for instance, pays about $1.4 million annually for stock assessment, monitoring, and other science. Halibut contributes over $1 million, and groundfish about $3.5 million. Second, the management system for groundfish, for example, operates virtually year-round and provides capital investment and infrastructure on Vancouver Island and in the north for other fisheries that operate more seasonally.
Adjacency in Atlantic Canada operates in the context of DFO quota allocations to fleets that are adjacent to fish stocks. It does not dictate where in a province fish should be processed. Minimum processing requirements in Newfoundland will disappear under CETA. Requiring domestic processing in B.C. would be counter to international trade rules. The U.S. has won every trade challenge against such requirements under GATT and NAFTA.
The last export restrictions on herring roe were removed in 2012. As a result, we've developed a new market in Japan for small-sized roe from small fish that had been previously left in the water. All this has benefited independent fishermen and enterprises nimble enough to take advantage of new opportunities and increased demand for top-quality wild fish, both here in Canada and abroad.
To sum up, adjacency, owner-operator, and fleet separation are not relevant in B.C. Over the last two decades, conservation of the resource and market demands have created a flexible market-responsive industry that has developed new products and new markets, seeking always the highest value from a sustainably managed resource. Our market advantage is proximity to Pacific Rim markets in the U.S., in Japan, in China, and anywhere else where we can sell live or fresh. Good transportation links mean longer shelf life, satisfied customers, and top prices.
The structure of the industry developed over the last two decades, whether through ITQs or other means, makes fishermen responsible and accountable and good stewards of the resource for the long term. It means a diverse fishery where small and larger vessels can succeed as small business enterprises, increasingly operating year-round rather than seasonally, with little dependence on EI. It means that we pay for science, for monitoring, and for management, because we see the value and the need for it. It means we pay for MSC certification and the other third-party endorsements that markets at home and abroad require. The principles that apply to the inshore fleet in Atlantic Canada applied on the west coast would destroy the value of the fishery and all that success.
Thank you, Mr. Chair.
Good afternoon, Mr. Chair and members.
My name is Rob Morley. I am vice-president of production and corporate development with the Canadian Fishing Company.
I'm an economist by training and began my career in 1974 with the Department of Fisheries and Oceans. I left the federal government after 13 years and spent 10 years with the Fisheries Council of British Columbia, a trade association representing all the major fish processing companies in B.C. I've been employed by the Canadian Fishing Company for the past 20 years.
I have been active in various industry associations and advisory boards for many years. I'm the immediate past chairman of the Fisheries Council of Canada and currently a member of the Fraser panel of the Pacific Salmon Commission.
The Canadian Fishing Company, or Canfisco, is the largest fishing and fish-processing company in western Canada. We also own subsidiary companies in the United States: Alaska General Seafoods and Leader Creek Fisheries. We purchase fish from a fleet of 860 vessels and have eight processing facilities. We participate primarily in the wild salmon, herring, groundfish, hake, and halibut fisheries.
In our fishing and processing operations, we employ approximately 5,500 people, from Seattle, Washington, through British Columbia, to western Alaska. We market fresh, frozen, canned, smoked, and value-added seafood products domestically and in 25 export markets. Canfisco is 100% Canadian owned, and 2016 is our 110th year in the wild Pacific seafood business.
Your committee's study was initiated by a motion worded as follows:
||That the Standing Committee on Fisheries and Oceans hear from witnesses on the issue of adjacency and the policies regarding owner operator and fleet separation specifically as it relates to the impact of the Canfisco plant closure in Prince Rupert.
You may have read media reports and heard testimony regarding Canfisco's size, ownership of licences, share of industry, and our operations. Much of what you have heard is based on misinformation, hearsay or speculation. In other cases, it's simply a fabrication to support a point of view. I appreciate the opportunity to give you the facts about the company and its operations. I will also give you a perspective on the economic realities of the fish-processing business in British Columbia, which actively competes within B.C. for fish supplies from fishermen, and in the marketplace for customers, both domestic and international, with an Alaskan fishery whose production vastly exceeds B.C.'s.
Some people have claimed that Canfisco controls 80% of the herring business and 70% of the salmon business in B.C. Here are the facts.
Canfisco owns 32% of the 275 salmon seine licences. We own 3 of the 1,379 salmon gillnet licences, or 0.2% of the total. We do not own any of the 440 salmon troll licences. Overall, Canfisco owns 4% of all salmon licences in B.C.
Over the last six years, Canfisco has purchased between 29% and 48% of the total salmon catch in B.C., for an average share of about 37% of the total landings. In the B.C. herring fishery, Canfisco owns 30% of the roe herring seine licences and 12% of the roe herring gillnet licences. Canfisco buys and processes about 30% of B.C.'s total roe herring landings.
In the fisheries managed by individual shares or individual transferable quotas, Canfisco's share is much smaller. We own 21% of the groundfish quota, 15% of the Pacific hake quota, 3% of the halibut quota, and 2% of the sablefish quota. We own virtually nothing in any of the other fisheries.
Thus, contrary to misinformed reports, the licensing policies in B.C. have not resulted in increasing concentration or control by Canfisco and the companies with which we have merged.
While Canfisco may be considered a large company in B.C., we should put that in context with our competition: Alaska. Over the last decade, B.C. salmon landings have averaged about 48 million pounds per year, down from the 150 million pounds per year in the 1980s and the 1990s. Alaska's landings in the last decade have been 823 million pounds annually. B.C.'s total catch is 5% of the North American wild salmon supply. Alaska produces the same quality products and sells to the same customers in Canada, the United States, and overseas. On the world scale in which we compete, Canfisco is a very small player.
Let me turn to the issue that spawned this study: the closure of our Prince Rupert canning operations. First, let me clarify that we have not closed either of our plants in Prince Rupert. We will be operating and landing as much fish as our fleet can catch this summer and beyond. We've simply changed product forms from canned salmon to fresh and frozen salmon products. We have made this business decision for several reasons: changing market and consumer preferences, inconsistent fish supply, and high costs.
The salmon cannery in Prince Rupert was built and expanded in the 1980s with the capacity to produce 500,000 cases of salmon per year. The intent was to process a combination of salmon caught in both northern B.C. and southeast Alaska. The actual production volume achieved that 500,000-case target only three times in its history, the last time in 1995. In the past 10 years, due to declining salmon landings in B.C., less imported fish from Alaska, and changing markets for salmon products, the cannery has produced 200,000 cases only once and has averaged 116,000 cases per year in that time.
In 2015, we canned only 42,000 cases. Seventy per cent of that was Alaskan-caught salmon, mostly diverted from our cannery in Ketchikan, Alaska, just to provide some employment to the Prince Rupert plant—so much for the adjacency principle.
Maintaining a large plant with many canning lines for limited production was not viable. Worldwide consumption of canned salmon has been declining by about 1% per year for several decades. Over the last 15 years, eight other major canneries in B.C. have ceased operations. World demand for canned salmon can be satisfied from Alaskan canneries—including ours—which are more productive, with a more consistent supply of salmon available and unit labour costs per case significantly lower than those in Prince Rupert.
While Canfisco does obtain about half its salmon supplies from fishing vessels in which we have an ownership interest, we need to compete in B.C. with other buyers, none of whom are canning. They are putting salmon into higher-valued fresh and frozen markets. In order to attract independent fishermen and pay our skippers and crews a competitive price for the fish, we must do the same.
Canfisco processes 100% of the salmon and all the other species purchased in B.C. in facilities within the province. For all salmon landed in Prince Rupert, we are doing all the primary processing and processing of the roe in one of our two plants there. Fish we cannot sell fresh we are freezing at existing facilities in the Lower Mainland of British Columbia.
In terms of employment impact from this business decision, various numbers have been claimed by others and reported in the media, ranging from 300 workers losing their jobs to 500. Here are the facts. In 2015 there was a total of 411 workers employed in our Prince Rupert operations. On average, for the entire year, each worker worked 302 hours. It is a very seasonal job for a large proportion of the workforce, who work for a matter of a few weeks.
The usual turnover of workers is high. We normally hire 200 to 300 new workers each year. In fact, it's a challenge each season to find enough workers for our Prince Rupert salmon operation to run at full capacity. We cannot know for certain, because it depends on unpredictable fish landings, but we expect there to be well over 200 workers in our operations this summer. Other than about 15 specific tradespersons who have been laid off with compensation packages, we expect that all the senior workers in the operation will be provided with as much work as they have been previously.
The union has spoken about doing further value-added salmon processing in Prince Rupert. The first issue is a requirement for access to freezing and cold storage capacity. Since the closure of the J.S. McMillan cold storage facility, there is nowhere in Prince Rupert to hold the frozen salmon for further processing.
Moreover, of the bulk of the salmon landed, about 80% is pink salmon. In order to produce marketable pink salmon fillets or portions, the pin bones need to be removed. There is no machine technology available to do this effectively, and hand pin-boning can be profitably done only in very low-labour-cost jurisdictions.
It does not make economic sense to invest in new single-purpose freezing and cold storage facilities in Prince Rupert when there is significant underutilized capacity elsewhere in B.C.
In summary, Mr. Chair and members of the committee, I submit that in the absence of any application of the principle of adjacency, owner-operator, or fleet separation, the B.C. industry is a productive, competitive business that processes Pacific fishery resources in British Columbia, produces highly valued quality products, and returns good prices to fishermen.
I'd like to thank the standing committee for starting to look at these serious issues. They are important to fishermen, coastal communities, first nations, shoreworkers, processors, and other fisheries workers along our coast. We need to make sure that they're all involved and have a voice in this inquiry.
Fisheries are arguably the most sustainable food source on this planet. We don't have to water or feed them, weed or till the soil, or add fertilizers or pesticides. We just have to harvest them sustainably. Fisheries are important to our food security, our families, and our communities, and to future generations.
In short order, there are two main points I want to get across here. One is a profile of the fishermen on our coast, and the second is a profile of the communities on our coast.
Last year, an expert witness giving testimony at the Ahousaht trial, the justification trial, identified three essential components for a fishing business: a vessel, a fisherman, and legal access to the resource. Those three are essential components to any kind of fisheries business. On our coast, what the department has done is separate that last one, that legal access to fisheries, from the fisherman and the vessel.
That paper goes on to argue that the other two are useless without that legal access, but it's hard to see, though, with that legal access to a fishery, how you would catch fish without having a fisherman or gear. Anyway, it raises a critical question: should fishing licences be held by parties other than those who fish? That's the point.
A study on the issue of corporate concentration that was put out this January by Haas et al. shows the trend in the last 25 years in British Columbia moving from a more equitable state in fisheries to a less equitable state in fisheries. It shows the corporate concentration in British Columbia fisheries going up, specifically in salmon and herring, and the distribution of benefits going down. There are studies that show conclusively that corporate concentration is going up.
There's a slide I wanted to show. It's about halibut and what has gone on with halibut over the last 25 years in moving from an open fishery to an ITQ fishery, and an ITQ fishery where the quota and licence are separated from the fisherman and fishery. Those fishermen who don't have a quota are fishing for up to 80% less of the landed value on the fishery.
Without the graphic, it's very hard to describe that, but basically, on a block of halibut worth $400,000, of that, $300,000 is going to lease fees that are paid to absentee licence-holders by the fisherman who don't hold the quota. Without that connection of the licence back to the fisherman and to the vessel, you're losing that value, so the cost to the independent fishermen is going down.... A labour market study—I think it was the one Christina referred to—put out in 2013 shows that the average income for fishermen on our coast is somewhere around $19,000, which is about the poverty level. Fishing in British Columbia is not a great opportunity. Most would look at that and say there is no future in fishing. Part of the reason is this access and the tie that the department has severed from fishermen.
On the grander scale of the coast, Christina has accurately described the value of the fishery on the coast. The landed value on the coast averages somewhere around $300 million per year. The area I'm calling from right now is Haida Gwaii. In the area around Haida Gwaii, about $80-million worth of landed value is harvested each year. Less than 5% of that is connected in any way to the communities around Haida Gwaii. This means that either the licence is owned here, or the fishermen are living here, or there's processing happening here with that fish.
There's virtually no connection to the communities for the majority of the fish that's caught around here. That's an adjacency issue, and this disconnect is happening up and down the coast. One of the studies—
Time is elastic in British Columbia.
Some hon. members: Oh, oh!
Mr. Marc Allain: Mr. Chair and members of the committee, thank you very much for accommodating me on short notice and allowing me to testify. It's very much appreciated.
As was stated, I'm the executive secretary of the Canadian Independent Fish Harvesters' Federation, which is a national federation of organizations that represent independent fishermen. We have 34 different member organizations in five provinces, which in turn represent more than 7,000 independent fishermen.
Our members in B.C. are the United Fishermen and Allied Workers' Union, who you heard testimony from on Tuesday, and the BC Hook and Line Fishermen's Association, who, for the most part, fish full-time. They are working active fishermen who fish leasing quota.
I would like to make an initial opening statement on our federation's perspective on licensing policy in general. I would then like to address the three issues that are before the committee: fleet separation, owner-operator, and adjacency. I'd like to conclude with our particular perspective on licensing policy in the Pacific region.
Like my predecessors, I've written it all down, so I'm going to plow through and read.
Our federation believes that Canadian fishing licences and quotas should be held primarily by active fishermen living in coastal communities. In other words, the benefits of Canada's fisheries resources should flow first and foremost to the people who actually fish and to their fishing communities. We believe that the independent owner-operator approach to fishing provides the best socio-economic and conservation returns to Canada and, more importantly, to its fishing communities.
It is our opinion that it is in the public interest for the Government of Canada to develop and strengthen public policies in that regard. I mention the public interest because the Supreme Court of Canada has determined that it is the duty of the minister to conserve, manage, and develop Canada's fisheries resources “in the public interest”, and that should be the test. When you look at our fisheries policies, are they in the public interest?
With that in mind, our federation believes there should be consistent national commercial fishing licence policies on both coasts, and that B.C. fishermen and coastal communities should benefit from the same kind of policy protections as do their Atlantic counterparts, if that is their choice.
Now I'd like to address the three issues before you.
The first is fleet separation. Fleet separation was established in 1979. It applies only to Atlantic Canada and only to fishing vessels of less than 65 feet. The policy separates the fishing from the processing for that sector, the under-65-feet fleet sector, by prohibiting fish processors and other corporate interests from holding or controlling fishing licences in what is known now as the “independent core sector”. Later, I'll explain and give you some details on what that independent core sector is.
I'd like to quote the Honourable Roméo LeBlanc from 1977. He was the Minister of Fisheries at the time and was explaining the original intent of this policy.
Mr. LeBlanc said, “I propose that in future, we separate the fishing fleet from the processing companies in Atlantic Canada.” He said, “Fishermen should own their own boats, and be able to sell fish where they want.” Also, he said, “Creating a truly independent fleet should...raise fish prices and fishermen's incomes, increase the fishermen's bargaining power, create a healthier balance of forces in the industry” and invigorate fleet development by the fishermen. Mr. LeBlanc said that in 1977, and fleet separation was adopted two years later, in 1979.
What did he want to do? He wanted to impede or prohibit monopoly control in the fishery. He wanted to create healthy, competitive markets for fishermen's products, and he wanted to avoid, more than anything else, returning Atlantic Canada to the dark past of the company store and the fish lords who ruled over fishermen and fishing communities.
I know that some of you are from fishing communities where that was the reality. In 1977, it was in the living memory of fishermen, and he wanted to avoid that. The amazing thing is that he was successful.
Fleet separation was successful. Today, there is a very dynamic dockside market competition amongst buyers for independent fishermen's products in Atlantic Canada, and it's thanks to fleet separation.
I have some interesting data that I wasn't able to prepare for you in terms of the fishermen's share of lobster, for instance, and the lobster price compared to the retail price. I wasn't able to pull it together in time. I'll give you the big picture.
Mrs. Bernadette Jordan: Okay.
Mr. Marc Allain: I was just using those numbers to illustrate the magnitude of the Atlantic fishery. It's six times larger.
My point, though, was that of the $2.4 billion, $1.8 billion is generated by the owner-operator fleets. It's mainly crab and lobster, and about 50% of the shrimp. Of all the crab and the lobster, 80% of that is exported. It's been an amazing success story in the last four years.
Those of you who have been around will know that in 2008-09 there was a crisis in the lobster fishery, but lobster production has doubled in the last 10 years. We've gone from 45,000 metric tons to 94,000 last year. In 2008 we were pumping all of that into the American market. Eighty per cent of it was going to the American market. Then the economy went into the toilet and so did our lobster fishery.
What happened? Processors, with support from provincial governments and the federal government, started marketing. They opened up the Asian markets. Our fishery has rebounded. Now, we can sell all the lobster we can catch, and we're getting excellent prices, so the system works. We have fleet separation. Fishermen are catching and processors are processing, and they're doing their work in terms of the marketing. The system works.
My point was about the amount, the share, that comes back to owner-operators. It's 100% of what they catch and what they get at dockside. The leasing is not allowed.
I'm not sure I have those numbers immediately available. I think the main points are the ones that were raised earlier.
The difficulty with salmon in B.C. is the highly variable level of harvest. In 2006, 2010, and 2014, we caught millions of sockeye on the Fraser River. This year, we'll probably catch none. In 2014, the income to fishermen for salmon would have been pretty decent. In 2016 on the Fraser, it's going to be non-existent.
Salmon is no longer the core of this business. It was in the 1980s, which is the time that everyone, including me, looks back to. Salmon, because of the extreme variability of harvest, where we get one good year in four and then perhaps two years when we don't fish the Fraser at all, is never going to drive the kinds of incomes that it did in the past.
This fishery now actually draws its strength from other fisheries. There's salmon and, to some extent, there is herring. Again, in the 1980s, herring was a fish hugely in demand in Japan. They paid massive prices for it. They never ate it; they just gave it as gifts to one another. Now we have to compete in the market where that fish is food, so again, the value of herring has dropped dramatically.
If you look at fisheries like the dive fisheries and geoduck, you will see that those are strong and profitable fisheries, and they have no difficulty in attracting labour or new entrants into the fishery.