FISH Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, May 13, 1998

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[English]

The Chairman (Mr. George S. Baker (Gander—Grand Falls, Lib.)): We'll call the meeting to order for the Standing Committee on Fisheries and Oceans. Our order of the day is pursuant to Standing Order 108(2), a study of west coast fisheries.

As our witnesses, via video teleconference from Victoria, we have Keith Reid and Ruth Salmon of British Columbia Shellfish Aquaculture, Ken Mast from Unique Seafood, and Ed Helgeson.

Do we have the other witnesses as well in the room at the same time? We have Chris Day, executive director of the Deep Sea Trawlers Association of B.C., and Bob Carpenter of Pacific Packers Association.

Here's what we'll do. We'll go to our witnesses.

I wonder if before you speak you could introduce yourselves so that the media who are listening on the radio frequencies will understand who is talking.

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So we'll go to Victoria right now. We'll leave it up to Victoria to introduce themselves and start their own presentations.

Ms. Judith Reid (Vice-President, British Shellfish Growers Association): I apologize that Keith Reid isn't here to present this. My name is Judith Reid, and I'm a shellfish farmer from Vancouver Island.

I've read the west coast report, the interim report, and I certainly commend you for it. You've listened to many concerns, and I believe you've reported on them fairly. It's staggering to realize all the problems that surround DFO. It's actually more frightening to be caught up in them.

I'm a shellfish farmer, which means that my husband and I and our sons operate a farm that produces oysters and clams. We employ 90 people year-round. We have a fixed area—this is a lease—just like a land farmer has. We have to look after that water space. We have to protect it and guard it. It's our livelihood. So we make good environmental stewards.

We buy small animals, just as a land farmer buys seeds, and we plant those animals on the beach or in floating systems. After protecting them and caring for them, we harvest them. We don't add anything extra into the process. It's environmentally passive.

Shellfish farming on the west coast is different from that on the east coast. Our waters don't ice up in the winter, and shellfish grow two to three times faster. So that means we work year-round.

The shellfish industry has changed a lot in the last 20 years. The governing authority for us has also undergone many changes. We used to be at one time under National Health and Welfare. Then it was split off to the Department of the Environment. Then, with the creation of DFO, part of the responsibility for us was put there. It then left National Health and Welfare and went more into the Department of Fisheries and Oceans. It was split between Environment Canada and the Department of Fisheries and Oceans. Now it's split again with the introduction of a third player, the Canadian Food Inspection Agency.

These three agencies share these duties. I've been told that I should compare this to a three-legged stool, as the three agencies are equal and are sharing equally.

Well, I would have different adjectives to describe this three-legged stool. It might be stable, but it's also unmoving, unchanging, and unresponsive. When problems need to be resolved, a three-legged stool isn't much good.

We do have problems. I have far too many problems to discuss in any detail with you in these few minutes. Yet the shellfish aquaculture industry has proven itself. Shellfish farming is environmentally sound. It's sustainable. It protects the environment. Shellfish farming takes place in and around coastal communities. It employs people year-round. Shellfish farming is a viable alternative for displaced fishermen.

I have to ask you to stop and think about this for a minute. What more could you want from an industry? What more could anybody want from an industry? What more could the people of Canada want from an industry?

Yet we're suffering. We're suffering because we have a three-legged stool governing us. We are trying to move ahead and resolve problems. We're trying to get on the highway. We're trying to become a significant industry.

I would like to suggest a little idea for you. The next time you want to get home, I'd like to see you take a three-legged stool and sit at an on-ramp and see how far you get. That's what it's like trying to operate this industry and trying to move ahead.

Now, the people of Canada have entrusted one agency with the legislative authority over openings and closures on shellfish farms. That one agency that actually has that authority is Fisheries and Oceans. We believe that you've abandoned this privilege and responsibility, and we can't do anything about that.

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Many changes have to be made regarding shellfish farming on the west coast. I'm going to give you an example. DFO has decided to operate clam management boards. That sounds very innovative. This is the question I would like to ask: will these boards provide full-time, year-round employment? The answer is no. Will these boards protect the environment? The answer is no. Will these boards stop poaching? The answer is also no. Will these boards undercut the farmers who have to pay lease fees and taxes, who buy animals to replenish the stocks, and who make an investment? The answer there is obviously yes.

The clam management boards will undercut the farmer. The farmer has proven himself. We have proven that farming is successful. We have proven that we are year-round. We have proven that we are successful in all aspects that need to be looked at.

So it's clear that the clam management boards need to be revisited. DFO needs to stand up and take on its responsibility. Farming always takes the pressure off the wild stocks, and the clam fishery is not sustainable. In 1995, the clam fishery value was $4.5 million and the farm clam value was $5.5 million. But the farm area was much less than one-tenth of that of the wild clam fishery. They were able to be productive on far less area.

Many of those beaches that are in the wild fishery are no longer producing. Some of them are actually stripped, while others are in decline. However, all the beaches that the farmers are using are producing more than ever.

The wild clam fishery is not sustainable; it's hurting the resource. But there is an alternative. If we took the 8,000 hectares that is identified for the wild clam fishery and we made that into 8,000 one-hectare farms, that's at least 8,000 sustainable, year-round jobs.

We have the workers available. We have people coming to us all the time asking how they can get into this industry. Yet, we have policies that place a wild clam fishery ahead of shellfish farming.

I believe DFO needs to rethink its policies and its responsibilities. I would like to see DFO put a stop to sitting around being stable so as to get up and get moving. We need to see support for shellfish farmers and the shellfish farming industry. I would ask that you learn to drive a truck instead of sitting on a stool.

Thank you.

The Chairman: Thank you very much, Judith Reid.

We're going to hear from all the presenters. Is this okay with the committee members here today? Then at the end, we will have a question and answer period.

We will go then to our next presenter. Please introduce yourself and then give your presentation.

Mr. Bob Carpenter (Pacific Packers Association): I'm with the Pacific Packers Association. It's a little different talking to you on video. Last time I talked to you I was in Ottawa standing face to face. That's a little bit more formal, but this is fine.

I sent a brief that I did in 1982 for Peter Pearse.

I guess I have to say that I have been in the industry since I was 10 years old. I made my living for more than 40 years in the industry, as did my father before me. I have been involved in all aspects of it: herring, salmon, halibut, dragging, etc. I'm well familiarized with the industry.

I would like to say that I gave John Duncan a copy of a report I did for Peter Pearse in 1982. It was an indication at that time of what I thought would happen in the future. A lot of things in the report certainly came to pass.

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However, I had a meeting yesterday with a group of people I got together from the Pacific Packers Association and the tendermen fleet, and we have some very serious concerns here. I'll read them to you and then let the rest of the folks get on with it.

Attention, Standing Committee on Fisheries and Oceans. Committee representatives, I would like to express my concern in regard to Sam Toy's committee, Art May's committee, Parzival Copes's committee, all the invested committees, and the Standing Committee on Fisheries, to which you've all devoted many long hours of your time and effort.

However, I've previously sat on the Pacific Roundtable as a member of the gill-net panel. When all gear sectors summed up their final meeting, I stated there had been absolutely no consideration or concern expressed for the tendermen fleet, which are vessels that buy and transport salmon and hake from fishing grounds to fish processing plants. In some cases they are forced to create their own markets, especially during the fall chum season, when a large number of companies withdraw their services to the fishing fleet and scale down operations because of tough markets.

I asked that my comments be stated into the minutes of the round table meeting at that time. At no time since have industry representatives considered or shown concerns about issues involving tendermen sections and the loss of such jobs.

The Chairman: I'm sorry to interrupt you. Could you slow it down a bit? We have translation going, and they find it difficult to follow what you're saying. So could you slow it down to about half the speed you're going? Thank you.

Mr. Bob Carpenter: That's my Ukrainian nature. I usually talk with my hands. I'll try to slow it down.

Voices: Oh, oh!

Mr. Bob Carpenter: Would you like me to go back on it and start over, or am I okay?

The Chairman: Just go back about two sentences, Bob.

Mr. Bob Carpenter: Okay.

I asked that my comments be stated into the minutes of the round table meeting at that time. At no time since have industry representatives considered or shown concerns about issues involving tendermen sections and the loss of such jobs.

For boat owners, tendermen's boats and equipment have suffered tremendous market loss. Stacking has devalued boats to wholesale prices.

The tendermen fleet has kept statistics, such as weights and counts, for all species of salmon. This instant data supplied to the Department of Fisheries and Oceans plays a significant role in helping with control and conservation of the resource. Tendermen ensure high-quality products, which yields economic returns back to fishermen and companies.

These vessels were encouraged to be built by the federal government and by the fishing companies and have played an extremely strong part in the fishing industry. However, because of the great panic and self-interest of the other gear sectors, your committees have been totally exempted from listening to our concerns. Tendermen have waited patiently and listened to everybody else whining and crying while the other major issues have been addressed.

I want to know who's going to pay compensation to these vessels that are going to suffer heavy financial loss plus job loss to crews. Vessels that were worth $80,000 to $500,000 before the Mifflin plan are now worthless. These boats and people have put in a lifetime in this industry. Their investments have been stripped, devastated, and wiped out with the stroke of the federal pen. Many packing vessels are up for sale, because these vessels no longer have packing contracts with fish companies due to reduction of the fishing fleet, a direct effect of the Mifflin plan.

Strong rumours of a secondary fleet reduction aggravate the future of tendermen. Many vessels that sold their salmon A licence to the voluntary buy-back or other individuals for stacking are now being sold at wholesale price and are being issued D licences by the Department of Fisheries and Oceans.

In order to get a D licence, an individual has to produce a letter from a fish processor that states that a job is present with that particular vessel. This makes it attractive from a company's perspective, because they have the ability to negotiate contracts with involvement of other licences; herring, halibut, prawn, shrimp, etc.

On the other hand, qualified tendermen who have packed in this industry for years are being underbid and forced out. It is unacceptable that DFO can issue a D licence to anyone who walks into the office with a letter from a fish processor that states there is a job for that vessel. Every other gear sector has to have a licence or a history of full participation in their fishery before a quota or licence is issued. Refer to Rear Admiral Fred Mifflin's letter of June 4, 1996, which I have: “An immediate moratorium on D licences should be implemented”.

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I understand about restructuring, but I also understand when a serious issue has been completely overlooked by other sectors that only consider their own interests. It is not the fault of your committee. The pride of vessel owners and tendermen has been severely let down by industry and government because of their unwillingness to face this issue. Our problem has been brought up several times and keeps getting avoided. It is time for us to let our concerns be known and to speak for ourselves— not from people who do not understand or care about these issues.

I got out some basic problems. If you want to ask me a few questions and a few solutions, I could read that out. Or would you like me to do that now?

The Chairman: What's that again, Bob? You say you had some lists of—I lost your last sentence.

Mr. Bob Carpenter: I could read a couple of more pages and maybe the committee could think about it while you talk to the other witnesses.

The Chairman: Bob, I think we've got the general gist of what you were saying. One of the committee members is in the process of drawing up some sort of a motion that he wants to put to the committee relating to the issuance of these licenses that you were talking about, that anybody can just walk in and get. So maybe we could just move on to some of the other witnesses and then come back to you on questions and answers.

Mr. Bob Carpenter: I would like to read in the rest of this when I finish the report. So thank you, and I'll wait my turn.

The Chairman: We will go on to the next witness. If the witness could introduce himself—

Mr. Ken Mast (Unique Seafood): I'm Ken Mast and I'm with Unique Seafoods. I'm part of the depuration industry in B.C. Ed Helgeson is the president of the Shellfish Depurator Association. We've combined it all into one letter, so I'll be doing the entire presentation for both of us.

For those of you who don't know, depuration is the removal of fecal coliforms from shellfish. The coliforms are pathogenic to humans, and the depuration process is one that was started by Ed Helgeson in 1990, I believe.

Our concerns are mostly about the way we are being regulated and the cost recovery programs that are being implemented by different forms of government. The Canadian Food Inspection Agency, which was formerly a branch of the DFO, used to prepare contaminated harvest permits. Those permits are necessary for the removal of fecally contaminated shellfish from all beaches, both those given by the federal government and those that are provincial tenures, such as the farmers.

In the 1996-97 harvest season approximately 50 contaminated shellfish harvest permits were issued. Of these, 17 were for those removing product from federal leases, 8 were from provincial, 8 were for scientific purposes, which we have to do for the Department of Fisheries and Oceans, and the rest were for other companies that were removing product not necessarily for depuration.

The Canadian Food Inspection Agency no longer has time to issue these permits. On October 3, 1997, DFO called us all into a meeting and said that unless the industry was able to come up with $50,000, we would no longer be able to get these permits issued. When it was asked whether the permits would be issued to people who were not willing to participate, the answer was yes. When we first inquired about the cost of this, we were told that the shortfall of money was from the issuance of permits, and that CFIA could no longer justify giving this money out.

After we researched the numbers and found the exact amount of contaminated harvest permits for depuration, we questioned why the amount was so much. We were then told that this amount was for the managing of the depuration industry. If DFO was still giving out these permits, and if CFIA hadn't split up from the Department of Fisheries, would we still be paying this $50,000?

We were also instructed that we needed to form an association, as DFO cannot accept money from individual companies. How the money was to be accepted from the companies of the depuration association would be up to the members. Although permits would be issued to those who had leases or tenures, it would be up to the association to find a means to include these groups if the association were to be reimbursed, although there would be no repercussions if these groups were not willing to pay.

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Also, if a depuration company did not want to joint the association, DFO and the depuration association did not have the ability to stop a harvest permit from being produced, but DFO did mention that it would not be issued in a timely manner. There were no suggestions as how to provide the fee, just that DFO required the money before November 1.

The depurators met and decided that it was not possible for us to come up with this amount of money in such short notice, and we were unable to form an association in such limited time. So we had further meetings with DFO—three in October, actually—where they informed us they had found enough funding to hire a depuration manager until the end of February, thereby allowing the time for an association to form and individual companies to react to this request.

During this time the depurators tried to find a way in which we would not be required to pay this tax. However, with the possibility of businesses shutting down, many of the companies decided it was best to push the association ahead so that they could stay in business.

The depurators met with DFO in early February and told the DFO officials that we were going to set up an association but would need more time. DFO responded by giving an extension of a month until the end of March. So until November 1, 1998, the depuration association is required to pay $32,000 with this industry.

Unfortunately, the exact amount of this program for 1998-99 has not been determined, and without a breakdown of exactly what DFO is using this money for or justifications for cost, DFO is unable to predict how much it will require for the depuration association to stay in business as the years go by.

The splitting of the DFO inspection in CFIA from the rest of DFO was a goal of the federal government. This splitting, along with the merging of other agencies under the CFIA umbrella, was to allow for better services and reduced costs. These costs were to be cut by eliminating management and by inspectors in each area being responsible for more product lines, thus cutting down on travel costs and other related items.

If this was the case and the splitting and merging of these agencies had cut costs, why is it a new position that must be funded entirely by the depuration association? The money that has been saved—where has it gone? If the inspection branch is no longer able to provide these permits, should not money be transferred from one department to the other?

At the same October 3, 1997, meeting the Department of the Environment stated that they required funding in order to continue the water quality sampling program for areas that are currently under classification and contaminated. With each series of surveys, money for each contaminated closure was needed to ensure that the areas would remain harvestable.

Under the national shellfish sanitation program and the Canadian shellfish sanitation program, which are equivalent documents, each shellfish growing area must be surveyed at least every three years in order for shellfish to be harvested from that area. Because DOE had a cut in funding, they decided they would no longer continue to monitor polluted areas unless there was a cost recovery program in place, at least in the province of British Columbia. We can't get the answers to exactly what's happening on the east coast, because no one is willing to tell us exactly what the cost recovery mechanism is.

At this meeting DOE stated that they would need $6,000 for the surveys, which were started at the beginning of December, and that they needed an answer by the end of the following week—less than seven days. We were also told that if we did not want a survey done and therefore were not going to pay for it, they would declassify the growing area and it would be unharvestable until a new survey, which could not be completed until at least three years later, was completed. If the survey was missed this year, it would cost more to reclassify the beach during the next survey, if they were to sample the area during these surveys.

We then requested maps of the areas that were to be surveyed. The contaminated areas that were to be surveyed contained multiple groups which the information would benefit. Although these were areas that were to be used for the depuration of bivalves, other areas such as contaminated provincial tenures, first nation reserves, provincial parks were also included in the surveys.

We therefore requested that DOE find a means to include these individuals in the cost of the surveys. DOE replied that it was up to the depuration association to contact these individuals and try to persuade these groups that they should contribute to the cost of the surveys, although they were under no obligation to contribute.

Since the tenures are provincial, we thought we might be able to receive some funding from the Ministry of Agriculture, Food and Fisheries, now called B.C. Fish. They told us that under current legislation they were unable to collect money from the leaseholds and therefore unable to contribute to these costs.

We also believed that one of DFO's departments, the aboriginal Fishery Strategy, would be able to contribute some funds to this demand, which they did. The Ministry of Environment, Lands and Parks was also asked, but they were unwilling.

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When the areas were analysed, only 11 of 53 contaminated closures were asked to be surveyed by the depuration members. As a result, the cost of the surveys was reduced by nothing. When we asked how the small number of areas to be surveyed required the same amount of funding, we were told that the crew was hired for one week at a time, and as we had not scaled down enough of the effort, the same amount of funding was required. A total cost of $6,000 was split between three plants that had interests in the areas that were surveyed.

As previously mentioned, AFS contributed $1,500, which was distributed among the three plants that paid. Therefore, the federal ministry, the Department of the Environment, had collected money from the federal DFO Aboriginal Fisheries Strategy. Would it not make more sense for these government agencies to discuss with one another these costs that are directly relevant to the other ministries?

In previous conversations the Department of the Environment stated that the funds for these surveys were for the collection of samples, not for the analysis of the samples, so there is no way to determine the exact amount a contamination survey would cost, and the dollar amount for each survey cannot be justified. However, DOE appears to have little problem in putting a monetary amount on each water quality survey. In fact, it would be possible for DOE to increase the cost of the surveys currently being harvested such that whatever amount they desire to be paid— so that the depuration companies can continue working.

In essence, this is a form of taxing in which only certain individuals are responsible for keeping a program afloat. It is appalling that the Department of the Environment can select a group of individuals to pay for a service when multiple other groups receive direct benefit from it. It is also unjustifiable because the cost of the surveys is determined by a means that is not readily understood or known. If the cost of a survey is x amount this year and this amount is paid with no justification of the costs, the individuals determining the value of this particular survey could increase the cost to three times that of the last survey with no explanation of the increase, as there was no justification for the original amount. With no other means to stay in business, a company may have to pay these unjustified costs.

The Department of Fisheries and Oceans has also decided that the clam stocks on the west coast of Canada are not being efficiently managed, so they have decided to set up community management boards comprised of diggers, processors, communities, first nations, B.C. Fish and DFO. Although these management boards are moving in the right direction by involving the stakeholders in the industry so that resources can be better managed, once again there seems to be an ulterior motive by DFO. These boards are being required to become legal entities that can handle money. The management board will become a vehicle that will allow the DOE or any federal or provincial agency to demand money from the participants in the clam fishery to recoup costs that probably cannot be substantiated.

The amount for one board on this coast is $47,000 for area D, which is funded right now by DFO, DOE and B.C. Fish. The pilot management board is a pilot project of the federal government. When this board is fully functional in the very near future, every resource in Canada will be moulded around these management boards. The direct problem of these boards is the dumping of responsibility of the resources to the individuals without allowing stakeholders to ever have complete control of the resource.

If these management boards are able to effectively manage a resource, does that mean DFO personnel managing that particular species will be without jobs? If this management board is truly a wave involving stakeholders, why does it need to be a legal entity? Should the views of the stakeholder be conveyed without attaching a dollar value to it? If the function of this board is not stopped, every resource in Canada will have another form of government that will be supported on a user-pay basis without equal taxing of the groups that benefit from this resource.

With a possibility of five or six management boards on the west coast alone, after all the other associated costs, is it worth harvesting the product that, after all processing and packaging, is worth less than $6 million, with an unknown amount going directly to the various forms of government to run this management board? To the individuals who harvest the product it may be, but for those who must pay these various taxes it may not be.

Another problem directly affecting the depuration association is that by the year 2000 all these diggers who are harvesting on federally permitted beaches must have a species licence. We already pay a $20 fee per digger for them to dig on a contaminated beach, and those who do not qualify for a species licence will be unable to continue harvesting.

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When this was first brought up over two years ago, we tried to reason with DFO, because it is a CFIA requirement for the plant to have complete control over contaminated product. We were told that if we found this to be a problem, we would have to appeal this decision higher up. But every time we appealed higher up the food chain, we were told we were to deal with people at the regional level; yet they are powerless—or so we were told—to change the policies that have been set.

If we were unable to guarantee the personnel associated with these harvestings, and are indeed bringing the companies—

[Editor's Note: Inaudible]— plant, the plant will lose its registration and the company will go out of business. This directly relates to numerous agencies a depuration plant must deal with. Each agency requires its own specific set of regulations that may not coincide with procedures that must be followed by another agency. The agencies whose guidelines a depuration facility must follow are CFIA, DFO management, DFO enforcement, DFO conservation and protection, B.C. Fish, Department of the Environment, Ministry of Environment, Lands and Parks, USFDA, along with other agencies.

This ability of DFO to tell us which diggers we can use on the beach causes another problem for the depuration industry. Theoretically, diggers could form a monopoly and demand a price that is not able to be paid. Most bureaucrats do not understand that the B.C. shellfish industry must compete with worldwide markets. This gives farmers in Washington state a huge advantage, because they are not taxed by their government and they're already close to the market to which the product is being shipped or sold. With all of the extra taxes that are being introduced, as well as the shipping costs, the profits are small and it's much tougher for companies in British Columbia to survive.

Another issue that would be helpful to clarify would be the issuance of federal permits in which harvesting occurs. Federal government leases that were given out for only three years end on October 31, 1999, and at this time there is no decision on what will happen to these leases. Although companies in this industry have had these leases for up to eight years, it is unclear whether these companies will be able to continue harvesting on these beaches in the future, causing uncertainty about the future of these companies.

It is exceptionally hard for these companies, which have no provincial tenures and therefore no other place to harvest, to keep paying these costs that different government agencies demand, as the company may be out of business by another government agency on October 31, 1999.

It is also interesting to note that in the case of cost recovery for the DOE water quality surveys, which we're currently paying, the length of time of the company harvest may not be as long as the DOE requirements for the water quality surveys. So we may be paying for a service that once again will directly benefit another group from which we will not be able to receive financial assistance.

Although the problems are plentiful in this industry, it is pertinent to mention some of its positive aspects. Unique Seafoods Ltd. currently employs many people whose pay cheques depend on the shellfish in the ground. As manila clams are a renewable resource with a growth cycle of three to five years, most of the money associated with the sale of the product goes directly to the wages for the harvesters and employees of the company.

Unique Seafoods currently employs over 150 first nations people, 20 Vietnamese harvesters and 20 other persons in the plant, of whom 12 are first nations. I believe our company may employ more first nations people than any other company in Canada. The entire depuration industry may employ as many as 350 to 450 first nations people. With this many jobs on the line, it is a necessity that these previously stated problems be resolved, so that the industry may remain functional and hopefully grow. It is a labour-intensive industry that has the ability to employ many other people in the future, providing the industry is able to survive.

Thank you very much.

The Chairman: Thank you, Ken, and you were also speaking on behalf of Ed.

We're going now to Chris Day, the executive director of the Deep Sea Trawlers Association of B.C.

Mr. Chris Day (Executive Director, Deep Sea Trawlers Association of British Columbia): I am the executive director of the Deep Sea Trawlers Association—trawlers as in draggers, not trollers. We represent the majority of active trawl vessels and the majority of quota holders.

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Our association wishes to thank the standing committee for the opportunity to make this presentation today. We also wish to thank the standing committee for the support they showed in their interim report on the west coast regarding the groundfish trawl observer program, and their recommendations in that report. I'll get to the observers in a minute.

I want to talk to you about a real crisis that exists in our fishery right now. We've been corresponding with the minister, Mr. Anderson, and we've been copying the standing committee. So I hope you've all received copies of that correspondence.

We believe the current situation is extremely serious. It relates to DFO's management of the fishery. The fishery itself is in really good shape. There's no problem with stocks. So there's really no need for this fishery to be in crisis.

Our concern falls into three areas, and there is certainly a degree of overlap within those areas. They would be the consultation process, the hake fishery, and the at-sea observer program.

Regarding the consultation process, there exists a Groundfish Trawl Advisory Committee, known as GTAC, which is composed of representatives of fishermen, processors, the union, coastal communities, DFO and the province. Until recently the GTAC was able to provide excellent advice to DFO. It met on a timely basis, and while not all our advice or recommendations were adopted, we did at least feel that we were listened to, that we were heard, and that we were part of the process.

Unfortunately ,there's been a change of personnel. And while we acknowledge that there's a lack of resources at DFO right now, DFO management has become its own worst enemy, creating a monster that they're unable to manage.

This is what has created the current crisis. It's a crisis so bad that all the trawl fishermen's representatives on the GTAC have withdrawn their services from the GTAC. We felt we had no other choice.

Committee meetings now are no longer being held on a timely basis. The last one was in January. We were assured that subcommittee recommendations would come back to the GTAC for approval before they were implemented, but they've just gone right ahead and implemented them.

In addition, some very serious decisions relating to the hake fishery have been made without any consultation whatsoever with industry. In fact, at the last GTAC meeting in January I asked the DFO managers to discuss the situation, and I was told point-blank that they refused to discuss any issues relating to hake.

Because of this lack of consultation, fishermen have just felt that they've had no choice but to withdraw from this process.

This crisis in DFO is even worse. In April 1997 a new management scheme was introduced to the fishery, one of individual vessel quotas. At the time a portion of the total allowable catch was allocated to a groundfish development authority. It's 20% of the fishery.

This groundfish development authority is a non-elected board of community and union representatives. Within that groundfish development authority their quota has been split in half. There's a groundfish development quota, and there's a code-of-conduct quota. So there are three different quotas that are going on each individual trawl vessel.

Now, despite advice from the fishermen, DFO has adopted extremely complex rules regarding the transfers of this fish. The west coast fishery is an extremely complex fishery. There are 50 different species by areas to be fished.

Now, I might be targeting Pacific Ocean perch, and I would pick up a quantity of silver-grey rockfish. For the vessel next to me the opposite could occur. So there's a real necessity to have a flexible transfer system to allow the fishery to manage, to actually exist.

But as a result of all these complexities, at the end of the last season, the 1997-98 season, in March 1998, a massive number of transfers had to go through. At the start of the current season, April 1998, there was an equally large number of transfers to get the fish back to their original vessels. As a consequence, this transfer process— the whole thing has ground to a halt. DFO have just not been able to cope. The fishery was completely closed for six days. And today, even six weeks later, there are still transfers outstanding, and still errors to be corrected.

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On top of this, the clerk who handled the transfers at DFO herself transferred to a different department within DFO and was not replaced for four weeks. The consequence of this was that multimillion-dollar vessels have been delayed, waiting for their paperwork to catch up with them.

The groundfish unit at DFO is in such disarray that telephone calls are just not answered any more. All you ever get is voice mail. I'm a groundfish trawl adviser, and it takes me an average of 6 to 10 voice-mail messages before I get a single reply. Oftentimes the voice-mail boxes are full, and you're not even able to receive a message.

I could talk continually on this subject, but I think you get the picture.

The fishermen take this crisis very seriously, and we certainly wish to be part of the consultative process. We have requested that Ottawa get directly involved in order to get this process back on track, and we would ask the standing committee if they could give us their help on on this subject.

The second area I want to talk about is the hake fishery. The hake fishery is by far the largest fishery on the west coast. In 1997 approximately 100,000 tonnes of fish was landed, which was about 50% of all the fish that was landed on the west coast.

This stock is a cross-boundary species. We share it with the Americans. Of course, there has been a long-standing disagreement between the Americans and ourselves regarding this stock, and despite many years in negotiations, no agreement has materialized. The Americans claim that 80% of the stock is in their waters. The Canadians, we ourselves, claim that 30% is in our waters.

So what has happened is that the American and Canadian scientists have worked together to jointly assess these stocks. Traditionally the Americans have always announced their TAC first, based on 80% of the assessment. The Canadians have followed suit, claiming 30% of the combined assessment.

This year, however, as I say, without any consultation with industry, DFO decided to reduce the Canadian TAC by a full 20%, 20,000 tonnes of fish, thereby endorsing U.S. claims to Canadian fish. Clearly, the long-term implications of this are immense.

The second issue on hake revolves around the joint venture fishery. Because of a lack of shoreside processing, every year it's been necessary to have what's termed “a joint venture fishery”, where Canadian catcher vessels deliver their hake to foreign factory vessels for processing.

Normally there's an established process where the processors, the fishermen and DFO get together. We all provide input into a decision-making process, and the fish is allocated between the joint venture and the onshore processing. This is reviewed through the season.

This just didn't happen this year. One of the DFO managers made a couple of off-the-record calls, and then the DFO arbitrarily decided on a split.

Now, there is serious concern by the fishermen that the majority of the onshore processors produce one product, which is surimi. It goes to the Asian market, and we all know what problems exist in the Asian market these days. Now, if as a result of that the allocation gets left in the water, this further compounds the American claim to Canadian fish.

The third aspect of the hake is, as I mentioned, the fact that 20% of all groundfish fisheries have been allocated to this groundfish developmental authority. This is despite the fact that the onshore sector of the hake industry has always received a priority allocation.

The current prices being offered by the major shore-based processors are 6¢ to 6.5¢ a pound for the hake. The JV fishery, which have a far more flexible processing capability, are offering 12.75¢ a pound. That's twice as much.

Last year, when the surimi price was at $1.40 a pound, we were still only getting 6¢ to 6.5¢ from the onshore processors. This year the price of surimi has dropped to 50¢ a pound, but we're still getting the same price.

While the fishermen and their crews—these amount to about 300 people—certainly support the shore-based industry, we feel that we shouldn't be forced to subsidize an inefficient and inflexible sector.

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So certainly regarding hake there are many implications to DFO's decisions, both in the short and long term. I would ask the standing committee to recommend an immediate increase in the hake TAC to 100,000 tonnes, in order to match the U.S. numbers.

We would recommend a complete review of the DFO hake decision-making process and a review of this whole GDA shoreside priority allocation, given what it's costing the fishermen right now.

I briefly wanted to conclude on the at-sea observer program. As we mentioned in our previous presentations, the at-sea observer program is causing major hardship to the trawl industry. Right now the small boat sector is unable to fish because of the costs involved, and the larger vessels are paying up to $100,000 annually for this service.

As a result of pressure from industry and the recommendations of the standing committee, I'm pleased to inform the standing committee that Donna Petrachenko, the Pacific regional director general, has stated that the trawl observer program is too expensive and that it is to be reviewed. This review is to take place between now and September 30.

While that's a very general comment, the industry certainly hopes that DFO will follow the standing committee's advice in order to reduce the level of coverage from 100% down to the 10% to 15% level that exists on the east coast. And it's the industry's hope that the standing committee will keep the pressure on DFO in order to resolve this issue.

To conclude, the industry greatly appreciates the support the standing committee has given to the trawl fishery—and not just the trawl fishery; I think we all appreciate the work you've done regarding lighthouses in your interim report, and your recommendations regarding the shellfish industry as well. We ask for your continued assistance to resolve these very important issues. You're doing a great job, and keep up the good work.

Thank you.

The Chairman: Thank you, Mr. Day, executive director of the Deep Sea Trawlers Association of B.C.

And yes, Mr. Day, we did receive your correspondence. Each committee member did. In fact, two committee members put it on our list of topics to be discussed at our next steering committee meeting as a result of your letters and the same presentation you've given here today.

Now, before we go to questions concerning the witnesses, do we have one further witness? Yes. I wonder if the witness could identify herself, please.

Ms. Ruth Salmon (Executive Director, B.C. Shellfish Growers Association): I'm Ruth Salmon, executive director of the B.C. Shellfish Growers Association.

The Chairman: Yes, in fact, I mentioned you right at the very beginning. So you can go ahead, Ruth.

Ms. Ruth Salmon: Good afternoon. I'll actually be supporting some of the issues that Judith Reid, as well as Ken Mast, brought forward. I will also be bringing forward some additional issues of concern from the Shellfish Growers Association.

We represent the majority of shellfish growers and the vast majority of B.C. farmed shellfish production. The potential of this environmentally sustainable B.C. industry was summarized in a recent report by Coopers & Lybrand. The report indicated that the industry could grow from its present size, which is about $15 million wholesale, to $100 million by the year 2006 with only a doubling of the current land base.

Today only 1,700 hectares are utilized for shellfish farming in B.C., which is less than the area occupied by the new runway of the Vancouver International Airport, and equal to only 0.5% of the total tenured foreshore in the province.

The current production yield from such a minuscule percentage of B.C.'s coastal resource is a testament to the innovative application of knowledge and technology by B.C. shellfish aquaculture entrepreneurs.

The operations are located in coastal communities, and have helped to create jobs and maintain local economies at a time when other traditional employers in the resource-based industries have experienced economic downturns.

It's difficult to determine exactly what the total employment figures are, but we estimate that the B.C. shellfish industry alone directly employs 1,000 people. And if we could grow like Coopers & Lybrand are projecting, we would be employing another 100,000 people. As shellfish aquaculture is labour-intensive, the development of this industry clearly supports the federal government's agenda for jobs and economic growth.

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Now, our focus is on the B.C. shellfish farming industry, but I want to put aquaculture in a Canadian perspective just for a moment. The 1996 data indicate that finfish and shellfish aquaculture production increased to 69,000 metric tonnes for a value of $372 million. This is an increase in value of approximately 10% per year since 1991. This sounds relatively promising, but even so Canada is a small producer by world standards, and accounts for only 0.3% of world aquaculture production.

However, we have the potential to be a major player in the global aquaculture industry. We have an abundance of clean growing waters, internationally recognized technical and management expertise, and state-of-the-art facilities for the production and processing of quality cultured seafood. As well, our geographic setting gives us easy access to Pacific Rim and U.S. markets.

So we have the capabilities on which to build, and we need to do a lot of work to build a viable and competitive industry.

I'll start by talking a little about the commissioner you're all familiar with. The recent announcement that the Liberal government would be establishing a commissioner of aquaculture was welcome news. However, industry is frustrated that the appointment has been delayed for another eight weeks, when we were told the person was to be in place by the end of May or the beginning of June.

At this point it's certainly too early to make any hard-and-fast predictions as to the outcome of the commissioner's appointment. Regardless of the commissioner's efforts, it's difficult for us to see how aquaculture, which is a farming industry, not a fishing industry, will ever flourish in a department that's structured and focused on the traditional fisheries.

Current federal regulations are designed for the commercial wild fisheries and are not always suitable for aquaculture. Canada needs to accelerate its regulatory change to allow the Canadian industry to expand, and to gain the economies of scale that are enjoyed by our major competitors.

The regulatory regime in Canada must reflect the realities of aquaculture businesses and provide support, rather than constraint, to development.

When he or she is appointed, industry stakeholders will be pushing the commissioner to demonstrate some action on a number of issues, because very little has been undertaken by DFO to move the industry forward, particularly on the shellfish side.

We certainly recommend that DFO continue to participate in the second phase of the business impact test that is being coordinated by the Canadian Aquaculture Industry Alliance.

Let me spend just a minute on overlapping jurisdiction. I think it's an important issue. In 1984 the Prime Minister named DFO as lead federal agency responsible for aquaculture. In 1986 the provincial government named the now Ministry of Fisheries as lead provincial agency responsible for aquaculture.

In September 1988 the federal and provincial governments signed an MOU outlining the different federal and provincial responsibilities. As you can imagine, there are a lot of overlaps. Industry feels that much of the federal and provincial government responsibilities are overlapping and often lead to excessive regulatory requirements and regulatory uncertainty.

So we certainly recommend that all the MOUs, the protocols, the agreements between the federal and provincial governments, as they relate to farmed shellfish, should be critically reviewed to ensure that they're appropriate and effective.

Although the federal and provincial governments have implemented several formal consultation mechanisms over the years, none are currently active. As a result, we lack an avenue to bring issues directly to the attention of government for discussion and resolution. This certainly ties in with the recommendation that you made in the west coast report, again, reiterating the importance of having a west coast advocate, a senior person within DFO to whom we can bring issues.

Let me talk very briefly about cost recovery. Ken certainly outlined that in his industry. Federal downsizing is placing more of a burden on industry to support and maintain services that were once provided by the federal government.

As you know, water quality monitoring efforts have been reduced due to recent federal budget constraints. The effect has been to rely on broad shellfish harvest closures to protect public health rather than increase monitoring and micromanagement of selected areas.

Industry's needs are increasing, government's resources are decreasing, and yet there is still no fair, equitable and long-term solution for addressing federal cost recovery. In addition to determining a mechanism for dealing with cost-recovery, industry must be consulted during the process.

• 1635

As you know, last December Environment Canada asked our association for $20,000 to maintain water quality surveys on the south coast. Those funds were requested to maintain the Environment Canada program as is, without looking at cost-saving mechanisms or changes to the program. Industry certainly doesn't see this as a partnership arrangement, and of course we refused to pay. This supports what Ken Mast was saying.

You might say this is an Environment Canada issue and not a DFO issue, but in fact Environment Canada only makes recommendations to DFO for changes to growing water classification. It is DFO that has the legislative authority to open or close an area. Therefore it is DFO's responsibility.

So we recommend that the federal government must initiate and include industry in discussions to determine a mechanism for cost recovery.

Canada needs a strong, effective partnership between government and industry, and a set of clear, well-focused goals, if we are to achieve our potential and become a player in the world market. We are hoping the commissioner acts quickly to ensure that the appropriate federal departments have aquaculture action plans to deal with some of the challenges we face.

Thank you.

The Chairman: And thank you very much.

We have heard some excellent presentations.

Before we go to questions from committee members, we have some motions we must deal with. One of the motions I've received notice of concerns the testimony given by Mr. Bob Carpenter a few moments ago.

First of all, do we have any further witnesses on our videoconferencing from Victoria who have not been heard, and who wish to be heard?

A voice: Yes.

The Chairman: Could you state your name, please?

Mr. Ed Helgeson (Processor, Shellfish Depurator Association): My name is Ed Helgeson. I am with the depuration association of B.C. I am also with Cooper's Cove Oyster Farm, which is a family business.

I am not going to go over everything that has been talked about, because there are three people in this room who have already said just about everything. I'd just like to sum it up so it's back in everybody's mind.

We have an industry here that grows a product in clean, pristine waters. We are trying to make a viable living and put something back into B.C. We also have an industry that makes a living harvesting product that is now growing in polluted waters.

I have used this statement a lot of times, and I don't like it, but it's the truth: pollution is a growth industry in B.C. It's on our coast, and we've found a way to deal with it. There is lots of room for going ahead, and we'd like to go ahead, but what we find is that every time we turn around there is an obstacle.

We want to work through the obstacles with the people who are involved. Basically, we can create more jobs. We can create more tax dollars. Maybe this is one way we can start paying back, and employ more people to do the work that was done before.

That's just about all I have to say. It just summarizes everything everybody has been saying here. Thank you.

The Chairman: Great. Okay, then, Ed. Ken Mast made a presentation on your behalf as well.

Before we get to the motion concerning the evidence we heard here today, I would just ask the indulgence of the witnesses in Victoria to hang on for about five minutes while we dispose of some business that we have to dispose of at this point, before we go back to presentations.

There are a couple of notices of motions. I will call on Mr. Paul Steckle, MP for Huron—Bruce, who wished the floor to introduce a motion. I wonder, as far as procedure is concerned, if we could just get into an initial indication from members whether these motions are acceptable. If they are not acceptable, then perhaps the— I'm in your hands.

Mr. Steckle.

Mr. Paul Steckle (Huron—Bruce, Lib.): Thank you, Mr. Chairman. I would like to put the following motion before the committee. I trust this motion will be received unanimously, given our thoughts and the kind of presentations we've received over the past number of weeks.

• 1640

I move that the Standing Committee on Fisheries and Oceans strongly urge the Government of Canada, through the Department of Fisheries and Oceans, to fund the Canadian portion of the Sea Lamprey Control Program from the department's A base. The Standing Committee on Fisheries and Oceans further recommends that the Government of Canada, through the Department of Fisheries and Oceans, commits to provide a long-term minimum funding guarantee of $8 million per year to the Great Lakes Fishery Commission for the purposes of sea lamprey control.

We have concluded this motion based on the evidence we heard over the last few days of travel in Ontario.

Thank you, Mr. Chairman, and I move that motion.

The Chairman: So moved.

Mr. Steckle, I understand that on behalf of the committee, which travelled extensively in the past week concerning this issue, you are its representative in talks with the fishermen concerning a possible input they may have as far as dollars are concerned. Is that correct?

Mr. Paul Steckle: I should say, Mr. Chairman, for the benefit of the committee, that those questions were put forward to the sport fishermen, in our travels. The commitment was made that were we to commit to a long-term funding on this program, they would make their commitment to find further dollars to enhance the program as we know it now, such as the State of Michigan has already done, although of course from a different source.

Mr. John Duncan (Vancouver Island North, Ref.): When you say “they”, are you referring to the Ontario Federation of Anglers and Hunters?

Mr. Paul Steckle: Yes, I am, Mr. Duncan.

Mr. John Duncan: Thank you.

The Chairman: Mr. Lunn.

Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Mr. Chairman, I understand this motion does not need a seconder, but I would just like to indicate to Mr. Steckle that I think it's an excellent motion based on our observations on the committee when we travelled to Ontario. I support him in his efforts and would call the question. I don't know if any further discussion is necessary, but from our observations I think it's an excellent motion.

The Chairman: Thank you, Mr. Lunn.

The New Democratic Party.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Thank you. I have one slight amendment to that. Because this is with a joint commission, it should read $8 million Canadian, because the U.S. does supply its funding in U.S. dollars.

There is one thing I want to mention. I will tell Mr. Steckle that our party is in full favour of this motion. If a motion I had put on the floor of this committee a few months ago asking this committee to advise the finance minister to forgo the cuts to DFO in 1998-99 and 1999-2000 had been passed, however, and if the minister had realized that and had not continued with these cuts to the Department of Fisheries and Oceans, it is quite possible a motion such as yours may not have been needed, and that funding would have been there. I wanted to make that point clear. Thank you.

The Chairman: Mr. Easter.

Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chairman.

I just want to be sure, Paul—this is a request to the government itself to provide the additional funds to DFO to do this job? Otherwise we're into trading dollars and what we're going to draw down elsewhere in order to accommodate this. I want to be clear in the understanding that this is a request to the government as a whole to ensure that this project is funded through DFO and that the moneys are there accordingly.

Mr. Paul Steckle: Yes, indeed, Mr. Easter. I think the crux of this motion is that we are asking the Government of Canada to allow this money to be put into the department's A base, and I think that's exactly where it's at. Once it's established it's in the A base, it will remain there until further governments down the road are otherwise disposed.

The Chairman: Mr. Easter?

Mr. Wayne Easter: No problem.

The Chairman: Okay. The committee members have heard the motion. Those in favour of the motion, please signify by raising your hand.

Mr. Peter Stoffer: I have a point of order, just to add that one additional word, because it is a joint commission.

The Chairman: A point of order—the motion is amended to read $8 million Canadian dollars.

Mr. John Duncan: We don't have American dollars in our budgets anyway, Peter.

The Chairman: The motion then is being put as amended.

(Motion agreed to)

The Chairman: On the second motion, I will ask Mr. Hilstrom to put the motion. The motion as I have it, and Mr. Hilstrom can verify the actual wording, is that the Fisheries and Oceans Committee requests that the federal government reinstate funding for the Manitoba coast guard base in Selkirk to a fully operational coast guard base.

• 1645

As committee members will recall, this is the representation the committee received throughout Manitoba in our public hearings at that time.

Mr. Hilstrom, would you like to elaborate on it and so move the motion?

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Yes, I would like to move that motion. This motion certainly arises out of representations from every town we heard from on Lake Winnipeg and all of the fishermen who strongly feel the coast guard has been reduced to the point at which it is not effective. They absolutely want to see it returned to the state at which it can carry out its functions in Manitoba.

The Chairman: The New Democratic Party.

Mr. Peter Stoffer: This is just a grand day for motions.

I want to offer my second on that motion, as well as indicate that the coast guard is desperately needed for safety on those waters. There is a major recreational and commercial fishery on that lake. We've heard evidence at a number of hearings that the coast guard is severely lacking in terms of safety, and when people go out on a lake of that nature it can be very dangerous. To know that the coast guard is there would offer that cushion of comfort in a way. I do appreciate Mr. Hilstrom's bringing that motion forward.

The Chairman: Is there any further commentary?

Mr. Easter.

Mr. Wayne Easter: Mr. Chairman, I agree in principle on the need for the coast guard base at Selkirk, but I really believe we're a little premature in making the motion. I think first we should draft an all-encompassing report on the tour rather than just dealing with a series of motions.

We also have some coast guard problems in my home province and my neighbouring province of New Brunswick. If we're going to make motions on every one that closes or has changes, it puts us in a difficult position.

I really think, before we go as far as this motion is suggesting, we should call in the head of the coast guard and see how he's figuring on managing this base. We should see whether there is a way of drawing from the one in Ontario, where some staff have moved, I understand, and ensuring they stay in Selkirk.

What struck me in the hearing was the former manager of the Selkirk— well, he worked on the Selkirk base. I think there was a man who, in all honesty, was putting forward his experience and the need for the base. But I think this motion is premature at this time and would be better done in an overall recommendation of a report, after we've heard from the coast guard and put the pressure on them.

So I can't support this particular motion at this time.

The Chairman: Mr. Steckle.

Mr. Paul Steckle: I share the sentiments of my colleague, but I agree with Mr. Hilstrom. Certainly that is what we heard. I think Mr. Stoffer has already indicated that Lake Winnipeg is not always a friendly lake and the need for a coast guard presence there was certainly evidenced. I'd be more than happy in any way to support through recommendations or whatever the view that there be reinstatement of the coast guard presence there.

Mr. Wayne Easter: Just one further thing, Mr. Chairman. I could support it along these lines. I understand the kind of critical position we're in, because decisions are being made as we speak.

I could support something along the lines that the decision be put on hold until such time as we've heard from the senior coast guard personnel and can put together a more comprehensive recommendation, but to go as far as saying sufficient personnel and equipment should be returned and maintained in Selkirk— At this time I don't think we have all sides of the story. I think we need to say it should be put on hold until such time as we have heard from the senior management.

• 1650

Mr. Howard Hilstrom: Mr. Chairman, that's totally unacceptable to me. The presentations we got were sincere and honest from the people concerned. I have made extensive attempts to have DFO, including the director of the coast guard, respond to what has happened in regard to the Manitoba coast guard, and at this time I have no alternative but to insist that my motion go forward.

The Chairman: Mr. Stoffer.

Mr. Peter Stoffer: I have just one additional thing.

We also heard representation from the Royal Canadian Mounted Police that search and rescue would probably fall upon their shoulders. We heard evidence they're not qualified and they certainly don't have the equipment or the manpower to do such a job.

I understand the parliamentary secretary's concerns. In some ways I do agree with them, but we're talking about a matter of time and urgency. The weather is warm now, and a lot of boaters are out there now. We require this type of motion to happen as we speak now in order to get the personnel and the equipment there or at least maintain the base for the summer period, while we go into Mr. Easter's concerns of consultation with the head of the coast guard.

Although I understand Mr. Easter's point of view, I still have to recommend we pass this motion right now if possible.

The Chairman: Mr. Hilstrom is going to have to make a decision on whether to go ahead with the motion. As I understand the parliamentary secretary, the parliamentary secretary would be in favour of a motion that would say something in the order of: the fisheries and oceans committee requests that the federal government put on hold any decision to downgrade the Manitoba coast guard base in Selkirk and that this committee call witnesses to examine the base and to make recommendations thereon.

Mr. Howard Hilstrom: That's not acceptable, Mr. Chairman. The base has already been reduced to a manager, a clerk, and a floor sweeper.

The Chairman: Mr. Lunn.

Mr. Gary Lunn: Mr. Chairman, I listened to Mr. Easter's concerns. Perhaps I can throw this suggestion out. Time is of the essence; they are about to go into a recreational season. I would suggest that the operational coast guard base has to be a fully operational coast guard base right now.

We all know of our commitments on this committee. There is no way we can entertain anything before we come back next fall; we're in fact over-tasked now.

If the parliamentary secretary wishes to investigate that base at that time— but we need an operational coast guard base now. We could revisit it in the fall, when we have the time. It's just not acceptable to leave that base not operational over the summer period.

The Chairman: Mr. Hilstrom.

Mr. Howard Hilstrom: I have one last word.

The motion going forward obviously has the effect of bringing it to the attention of the Minister of Department of Fisheries and Oceans. I don't think it compels him, but it certainly will bring it loud and clear to him that our base has been decimated and partially moved to Ontario. There's no reason for that, and I would like it brought to his attention. I think that's the effect of the motion.

The Chairman: Mr. Hilstrom maintains his motion as it is. Is there any further comment?

(Motion agreed to)

Mr. John Duncan: Boy, George, you didn't have to break the tie.

The Chairman: I did break the tie.

The next motion before the committee calls for an immediate moratorium on the issuance of further D licences. We're back now to our witnesses in British Columbia.

Mr. Carpenter, I wonder if you could pass judgment on this motion very quickly. In other words, give us a sentence or two concerning this motion being put forward by Mr. Duncan. I have a copy of it, and it calls for an immediate moratorium on the issuance of further D licences.

• 1655

Do you mind, Mr. Duncan, if I asked Mr. Carpenter if this would be appropriate at this point?

Mr. John Duncan: It's highly appropriate. I know that Bob had some other things to say, but if we can refer to this motion you might even want to read my rationale. Bob can say whether I've got the gist of what seems appropriate. It also gives Bob a chance to talk about the last two pages of his presentation; he didn't get an opportunity to do that before.

The Chairman: Mr. Carpenter, the reason we want to put the motion now is that we have the appropriate bodies in the room to deal with the motion. So whatever motions we're going to put today, we have to deal with them now.

Mr. Duncan's motion is that the committee urge the Minister of Fisheries and Oceans to issue an immediate moratorium on the issuance of D licences.

His rationale, which was written very roughly in front of me, says that the fleet has been impacted negatively by the consequences of what we call the Mifflin plan, which was to reduce the numbers of boats in the fishing fleet; however, D licences are still being issued on demand as long as the applicant has written confirmation from a processor. This has led to boats that were licensed for fishing and lost their fishing ability in the voluntary buy-out program now being injected back into the fleet. The market value of these boats is often much less than the invested value of the packer fleet.

Mr. Carpenter, could you pass judgment on whether or not you agree with this motion and whether you agree with Mr. Duncan's rationale?

Mr. Bob Carpenter: I totally agree, and I'll just quickly say here December 14, 1983. I agree with the rationale because, as I pointed out to Fred Mifflin, Rear Admiral, I have a letter here in front of me dated June 4, 1996.

Suppose you had 20 taxi drivers and somebody paid $10,000 or $100,000 a licence, thinking he was buying a business. All of a sudden the government comes along and issues another 50 or 100 licences for nothing. I guess the guy who put his money on the table would be a little upset.

It's the same with the fleets being reduced. Here's his answer:

It would not be practical to place a restriction or moratorium on the issuance of the category “D” licence privilege. A restriction would impose undue hardship on those fishers who choose to relinquish their category “A” salmon provisions but would like to continue in the fishing industry by using their vessel as a packer.

It's ridiculous.

In 1983—and I haven't updated this. I presented this report before, so I'll just quickly read it. It says:

- Absolutely no representation for Tendermen in Ottawa.

- Total exclusion from Pearse Report after a brief was presented on behalf of Tendermen in April, 1982. Pearse acknowledged the brief and stated that he was not aware of Tendermen or their part in the fishing industry. He promised to look into and deal with thr Tendermen's problems.

- Packing is the only sector of the fishing industry that has unlimited entry.

- Fear of large charter cuts, and re-entry of “buy-back” vessels into the packing sector.

- Fear of loss of jobs because of fleet reduction.

- Any expropriation of buying back of vessels and compensation to other sectors of industry should be applied to collectors and packers.

- Federal and Provincial licencing must be questioned.

- Our intention is not to interfere with fishermen who catch and pack their own fish.

That was put on the table in 1982. From the tendermen section, I can tell you of a number of people you can ask about possible solutions.

To continue:

- Small boat fleet is our economic main stay. Reduction of small boat fleet is inevitable.

One other thing my gang mentioned is:

- We demand an immediate moratorium on “D” licences by Minister Anderson and request to implement a special packing licence for vessels that have a history in the fishing industry as a salmon packer prior to 1994.

- The issuing of “D” licences to vessels for the purpose of cheap moorage at Government docks is unacceptable.

Your committee would be shocked if it checked into how many D licences have been issued by DFO licensing.

I fully support Mr. Duncan's motion with what I'm saying here, and I'd like to fax a copy of all this to you sometime today.

The Chairman: Mr. Carpenter, you support it, the point being that more boats are being allowed into the fishery. That's your main point.

• 1700

Mr. Bob Carpenter: The main point is that if you choose to opt out on a voluntary basis, then we have people with a $300,000 to $500,000 investment in vessels that are worth nothing. If somebody wants to buy a licence or another boat that's already licensed, fine and dandy. But to sell a boat to a buy-back program— you walk back in and buy something that was worth $400,000 to $500,000. They got the buy-out. To buy it back for $30,000 to $40,000, start up a new business, and undercut everybody is not acceptable. That's exactly right.

The Chairman: Thank you very much, Mr. Carpenter.

We'll now go to Mr. Duncan, then to Mr. Stoffer, and then to Mr. Easter.

Mr. John Duncan: I guess the appropriate thing for me to do at this point, George, would be to move the motion. I think in addition to that it might be very appropriate for the committee to find out how many D licences have been issued. This is a mug's game. I don't think DFO should be in it at all.

The Chairman: Mr. Easter is next.

Mr. Wayne Easter: I have a question for John. Perhaps he could explain what he sees the impact of this motion being if it were adopted into policy.

We've heard the witness. Is your view the same?

Mr. John Duncan: Yes, I endorse what Bob Carpenter is saying, because in every aspect of the fishery except this one we're trying to buy back capacity and buy back licences. People who are voluntarily putting their licences up for sale are then taking that depreciated asset, walking in, and obtaining one of these licences, only to undercut everybody who has invested in that end of the business.

Mr. Wayne Easter: In terms of ability to fish?

Mr. John Duncan: Yes.

Mr. Wayne Easter: And on the resource?

Mr. John Duncan: Well, no, these are packers.

The Chairman: Mr. Stoffer, did you want to add anything?

Mr. Peter Stoffer: Yes, I wanted to know if we can get a copy of that as soon as possible. I'd also like to know if he has an idea of how many licences have been issued in the last 12 months.

Mr. Bob Carpenter: They go back the last three years. I can't give you that, but I think you'd be quite surprised if the numbers were put on the table.

The Chairman: We'll get the number.

I wonder if we could deal with this motion now. Is it acceptable to the committee? Let's deal with the motion now. The motion as put to the committee:

Be it resolved that the committee write to the Minister of Fisheries to urge him to issue an immediate moratorium on the issuance of further D licences.

(Motion agreed to)

The Chairman: With respect to those three motions, the chair has been instructed on the coast guard base in Selkirk and the sea lamprey program. The chair will do up the appropriate letters to the department and to the minister and send members the appropriate copies thereof.

We did pass three motions here today, and we can now go back to the witnesses. I want to call on Mr. Duncan to lead off.

Mr. John Duncan: I have basically two sets of questions, and we do have limited time. One set of questions is for Chris Day, and one is related to shellfish.

Chris, on the TAC, the total allowable catch, that was set on the hake, there was no announcement or ability to confirm readily at the time Canada announced the hake quota for this year that we had endorsed a drop to 20%. I never got confirmation of that until you spoke today. I had talked to people in your industry, and they were only speculating.

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I guess what I'm trying to do is pin down that you've actually 100% determined that that's what we did, because this is obviously a very significant event. And if they've done that, do you know why they did that, or can you only speculate?

That would be my first question to you. I have two others as well.

Mr. Chris Day: As I said, there was absolutely no consultation process with industry. The DFO managers refused to actually discuss any issues surrounding hake. We first learned of the numbers when the management plan was published on 1 April this year. So we had absolutely no input into it.

Certainly we were aware, away back in December and January, that the Americans had set their TAC based on last year's numbers. They kept the status quo with last year. The normal course of events would be that the Canadians would follow suit and keep the status quo, which had been equivalent to a Canadian TAC of 100,000 tonnes. As I say, we only learned of the TAC being set at 80,000 tonnes when the management plan was published.

Mr. John Duncan: Are you speculating this has something to do with Canada rolling over because of the salmon talks or something like that?

Mr. Chris Day: We have some major concerns, John, that we might be sacrificed, as it were, in order to get a treaty with the Americans on salmon. We have some major concerns that that's happening.

We haven't managed to find out who at DFO established that figure of 80,000 tonnes. I've spoken to some ex-DFO officials, who confirmed that the 20,000-tonne reduction in a 1.5 million-tonne biomass does not represent any kind of conservation issue. So it's a real mystery to us where that number came from. We haven't been able to find out.

Mr. John Duncan: When you talk about DFO and the loss of personnel and the loss of ability to deal with DFO, your main contact up until this year was Bruce Turris, am I correct?

Mr. Chris Day: That's correct, and Bruce handed in his letter of resignation approximately six months before he actually left the department. He left on 31 December last year. His replacement was not appointed until December, and this is a person who's new to the groundfish industry and as such has very little experience. We would have thought it more appropriate that there be some kind of sitting together for a period of time in order to get up to speed.

Mr. John Duncan: We have ongoing disagreements now between the deep-sea trawlers and the community of Ucluelet and the processors in Ucluelet. I didn't appreciate that the GTAC, the Groundfish Trawl Advisory Committee, actually included all of those groups previously. So a lot of your disputes presumably were taken care of before plans were announced, and this year is the exception. Am I correct in that assumption?

Mr. Chris Day: No, that's not correct, John. The community representatives have a seat on the board of GTAC. They were put there on 1 April last year, when the IVQ program was introduced, when they received their GDQ allocation. So they've been on there for a year now.

But if you're talking about the hake splits, there was an ongoing process where the processors, the fishermen, DFO, and the province all sat around the table and slashed out what's going to be the best, and it was reviewed through the fishery. So if the shore side was not able to take their full allocation, then that fish was put over to the JV. That whole process didn't occur this year, or hasn't to date anyway.

Mr. John Duncan: That was my point as well. It didn't happen this year, and that's contributory to the major problem.

For the benefit of the rest of the committee, when you talk about the JV, you're talking about the offshore processors, correct?

Mr. Chris Day: That's correct, John. The past few years they've been Polish processing vessels. They come in. They take the fish. The fish is caught by Canadian catcher vessels and delivered to these foreign vessels for processing.

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Mr. John Duncan: Okay. I understand your recommendations are to increase the quota to 100,000 tonnes from 80,000 tonnes, and that you have advice from ex-DFO biologists and technical people that that poses no conservation concern; that you're asking for a reinstitution of the whole consultation process; and I missed your third recommendation.

Mr. Chris Day: That was to have a review of this shoreside JV-GDA-type split. Given the fact that the shore base has priority anyway, is there a necessity to include hake in the GDA? We'd just like a review of the whole process, John, so we can establish a game plan. We don't understand what the rules are right now.

Mr. John Duncan: Okay. You had feedback from Donna Petrachenko on the recommendation that our committee made in the report. Have you had feedback from Donna Petrachenko on those other issues that we've discussed today? They've certainly been made well aware of your concerns. Have you had feedback that would indicate the department is listening?

Mr. Chris Day: No. Certainly as far as the observer program is concerned, yes, as I mentioned to you in my presentation. As regards the other issues, as I said to you, the trawl reps have withdrawn their services from GTAC, the fishermen's reps, simply because we feel we're not part of the process.

There have been some consultations regarding hake, so we have managed to have some input very recently, within the past week or so, into that hake process, but there is no real acknowledgement. There's an acknowledgement from Donna Petrachenko that she wants to get the process back on track. There are some real concerns. We'd really like Ottawa to get involved, because we have some real concerns that people within the region are maybe not capable of doing that.

Mr. John Duncan: Thank you very much, Chris.

I wanted to ask some questions about shellfish, but I think probably my colleagues are getting impatient with my hogging the mike, so I think I'll let other people talk. But I'd certainly like another kick at the cat later, George.

The Chairman: Absolutely, but you are—there's no doubt about it—taking up most of the time, as usual!

We'll go to Mr. Easter.

Mr. Wayne Easter: Thanks, Mr. Chairman.

To Judith Reid—is she still there?

Ms. Judith Reid: Yes.

Mr. Wayne Easter: In January, I believe it was, when we did the hearings out west, we had met with you separately to deal with some of these problems you raised. Just to try to determine what happened in the meantime, I think John, as well as I, had made representation to the department and some of the minister's staff. Since those discussions in January, I'm wondering if the department has followed up with you on any discussions, or were we wasting our breath?

Ms. Judith Reid: We haven't been shut down by Environment Canada, as was threatened, but as far as any other discussion to resolve this goes, there hasn't been any.

Mr. Wayne Easter: Has DFO or any of the minister's staff contacted you since January, as they told us they would?

Ms. Judith Reid: No.

Mr. Wayne Easter: That's very interesting. Thank you very much, Judith. I have no further questions on that point, just that I will say I'm a little bit peeved at DFO and the minister's staff, because you were supposed to have been got back to, and the issue was supposed to be resolved. That's pathetic on the part of DFO, let me tell you.

My second question is to Ruth Salmon. On the aquaculture issue, the cost recovery issue, costs going up, when have new costs been brought on lately?

Ms. Ruth Salmon: I'm sorry, I missed a sentence there, or a word. Can you just repeat that last sentence for me?

Mr. Wayne Easter: Yes. Several of the witnesses have raised the problem of increasing costs and cost recovery of the federal government. I'm just wondering, in B.C., have new costs and new fees been imposed by DFO or others on the aquaculture industry?

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Ms. Ruth Salmon: Our issues, in terms of cost recovery, have been mostly with Environment Canada, and I'm not sure there are additional costs. I think what they're saying is that their budget has been reduced. What they've been used to performing, they have to recover costs for. That's the issue that Judith was talking about in terms of Environment Canada. We have basically refused to pay them, so we actually haven't paid those increased costs they've been asking for.

From our side of it, Environment Canada is the one we're dealing with on cost-recovery. I think maybe Ken has some DFO cost recoveries, but for us it's Environment Canada.

Mr. Wayne Easter: I don't how this applies to Environment Canada, and in fact I'm doubtful if it does, but the Minister of Fisheries and Oceans, possibly as long ago as two months—I don't have the exact date—in a speech had announced that there would be a freeze on further cost recovery in the aquaculture industry until such time as the aquaculture commissioner was up and running and had the ability to do an economic analysis in terms of these costs. As well, the government increased its funding for that aquaculture commissioner from $2 million to $8 million.

I'm asking the question because I'm just wondering if there had been fees imposed since that time. There shouldn't have been.

Ms. Ruth Salmon: No. No, that's right. The request we've had for funds was in December, so I'm sure that's the case—that they're holding that until a review has been done by the commissioner.

Mr. Wayne Easter: One last comment, Mr. Chair. The fact of the matter is that we had to find some way of ensuring that Environment and DFO got their acts together in terms of dealing with the shellfish farming—on both coasts, actually, but I don't believe it's a problem quite to the same extent on the east coast.

I have one last quick question. I believe it was Bob—I didn't catch your name—who mentioned that a number of proposals had been put forward to DFO. You said something along these lines—that despite advice from fishermen, DFO has adopted basically an inflexible transfer system.

I'm wondering, in terms of your discussions with the Department of Fisheries and Oceans and the proposals your fishermen put forward, have any of them been adopted by DFO, or did DFO go merrily on its own way in terms of its own plans? Is the department listening to the input, to any extent, of the fishermen who do the fishing?

Mr. Chris Day: No, not at all. That's why we've withdrawn our services from GTAC. We just got fed up with not being listened to, with not being heard, and not being part of the process. We made recommendations to try to simplify the transfer process system, and DFO absolutely refused to even consider it.

Mr. Wayne Easter: Could you forward that information to us that you've asked them to adopt? We've had the same thing in my own area with lobsters, where lobster fishermen put forward a ten-point plan, and not one was adopted.

Thank you.

Mr. Chris Day: I will certainly do that.

The Chairman: That is from Mr. Chris Day, who is the executive director of the Deep Sea Trawlers Association of B.C.

Mr. Stoffer, New Democratic Party.

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Mr. Peter Stoffer: Thank you, Mr. Chairman. I have three quick questions—one for Chris Day, one for Ruth and one for Judy.

To Ken and the rest of you in Victoria, I can appreciate it when you say there's no consultation happening and there seems to be nobody listening within DFO. As you know, the Coastal Community Network, the Community Fisheries Development Corporation and the UFAWU are fearful of a plan that may be coming down from DFO regarding a licence buy-out on the west coast, but with no consultation with these concerned groups. I think I can appreciate your concern. It's similar to how DFO seems to try to run a ship without a crew.

Ken, have you discussed the hake concerns with the town of Ucluelet, and especially with Eric Tamm, because they indicated to us in a videoconference that they had anticipated a hake quota. They had just spent a fair number of dollars upgrading their plant and a water system, and then they were told at the 11th hour that they didn't get that quota. Are you aware of that? Could you elaborate briefly on that?

Mr. Chris Day: There's a difference of opinion as to the priority of the allocations regarding the offshore hake. I know that Eric Tamm's group would like to see all the hake go ashore, and from a fisherman's point of view we have no problem with all of the hake going ashore. The problem we have is the huge difference in prices being offered right now. We're offered roughly twice the price, and it's a cheaper fishery to fish for the joint venture vessels. We have no problem landing all of the fish to the shore base, as long as we get an economic price for it. That's not happening right now because the plants are only able to produce one product, surimi, which is being hit by the Asian financial crisis right now.

So in answer to your question, we love the consultation process but we just weren't part of it, as Eric has indicated to you. No one had any input, apart from a couple of off-the-record phone calls from DFO managers, until the management plan was announced by the minister on April 1.

Mr. Peter Stoffer: Thank you.

Judy, regarding your concerns about acquiring more area for the shellfish farming, have you discussed those concerns in depth with Dennis Streifel, the new fisheries minister of B.C.? Have you included aboriginal groups along those areas in your discussions?

Ms. Judith Reid: We have talked with Mr. Streifel. We do have a problem with provincial lands releasing that, but with the referral process, DFO is on that referral list. When DFO wants to keep land for the wild clam fishery, then it's not offered for clam farming, and that's where DFO plays a big part in this. They have to support the clam farming industry.

As for native groups being included, our association has also included and encouraged native group participation, and it appears there is a growing native participation in farming.

Mr. Peter Stoffer: Thank you.

The last question is for Ruth.

Ruth, what type of board would you like to see set up? Has your organization had any consultation with DFO in who the new commissioner should be for aquaculture in your industry?

Ms. Ruth Salmon: Yes, we have been consulted and we've been funnelling those suggestions in terms of personnel, qualifications and criteria through the Canadian Aquaculture Industry Alliance. I sit on that board, so the B.C. Shellfish Growers Association is represented on the Canadian board, and we've certainly been funnelling letters through in terms of the kind of person that we are looking for.

Mr. Peter Stoffer: If you could set up the board that oversees shellfish farming in B.C., what would it look like? Right now you say it falls under DFO or DOE or—there are many hands in the pot.

Ms. Ruth Salmon: Exactly, and I think that goes back to what Judith was saying, that it would be so nice to deal with one agency. It would be nice if someone could view people in our industry as farmers and not as fishermen. Right now we are very much in a grey zone. Often we don't feel the regulations support the industry.

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So I guess the best-case scenario would be to be under one ministry, one department, one agency that viewed aquaculture in a positive light. Right now we really just don't fit anywhere, and as Judith mentioned, having to work with three agencies is very time-consuming and expensive.

Mr. Peter Stoffer: Thank you.

Thank you, Mr. Chair.

The Chairman: Thank you, Mr. Stoffer.

We now go to back to Mr. Duncan.

Mr. John Duncan: I wanted to talk about shellfish as well. The recommendation by Ruth Salmon on the government initiating something on the whole cost recovery process seems to be the crux of a lot of the issues here, because the depuration concerns dealt with cost recovery.

You said, Ruth, the current system is unfair and inequitable and there's nothing long-term about it. The industry is being asked to pick up the whole cost for things that in many cases are for public access areas, and it just seems to be an offloading exercise so that the bureaucracy retains the ability to do everything they're currently doing, but the government doesn't pay for it. I think you would probably agree with that statement.

Ms. Ruth Salmon: Exactly.

The Chairman: Before Ruth answers, might I just add that we have five minutes' airtime left and that's it, so could you keep the answer short, Ruth?

Ms. Ruth Salmon: John, I agree with you 100%. That's exactly our issue. It isn't fair and equitable. There are other stakeholders out there. Because they're not organized, because they're not an association or a group that's easily attainable, they're not approached. But that's not reason enough. There needs to be an equitable solution. We're not saying we mind paying for costs that are a part of doing business, but we do mind being focused on when others aren't addressed.

So that's where there needs to be some kind of overall plan, so the businesses know what their costs are going to be from year to year, rather than being approached one year for this cost and then the next year for this cost, when you don't have any idea of what that's going to be. There needs to be a broad, overall approach.

Mr. John Duncan: The other thing you brought to our attention today was that there's no orchestrated or coordinated way to bring issues from your industry to the attention of government. So what's actually happening is our committee is being asked to do a whole bunch of things that we're really not that well situated to do. As you could see from some of the business we're doing today, we're all over the place. We'd like to be helpful, but there should be a mechanism there.

We recommended a west coast advocate for your industry, and the government initiative so far is to have an Ottawa-based advocate. I personally think he or she is going to get swallowed up by the bureaucracy here and be very unuseful.

We heard similar concerns on the east coast to what we're hearing from people like you. If there were one single thing you'd like to see, would that be it: a west coast advocate?

Ms. Ruth Salmon: To answer the broad question, if an agency or someone could actually then support our industry and make things work, allow things to be easier and smoother—if that in fact were the case with the senior person in DFO, rather than just carrying the party line— If that happened, then there's no point. It's just an extra body. But if in fact we could go there and feel that some things could get moved forward and that they could address our concerns, yes, because right now we're dealing with many agencies with no advocate.

The Chairman: Mr. Hilstrom.

Mr. Howard Hilstrom: I tend to believe we have aquaculture on the prairies also. You mentioned that it's more like farming, which it is. Would you be comfortable with this coming under Agriculture as opposed to DFO?

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Ms. Ruth Salmon: Certainly that's been discussed before, and I think a lot of people would— Again, I haven't looked at that critically, but on the first swipe, that makes a lot of sense, because there's an industry that understands how farmers have to work. There's a different way of viewing it. So from a first perspective, yes, we would think that is probably a better fit.

Mr. Howard Hilstrom: Thank you very much.

The Chairman: We want to thank our witnesses today from Victoria via video teleconference. We had witnesses Ruth Salmon from British Columbia Shellfish Aquaculture, and Judith Reid as well. We had Ken Mast representing Unique Seafood, and Ed Helgeson. And we had Chris Day, the executive director of the Deep Sea Trawlers Association of B.C., and Mr. Bob Carpenter from the Pacific Packers Association.

We want to thank these witnesses in Victoria for their time and their excellent presentations to the committee.

Thank you.

Mr. John Duncan: George, are you going to explain what we're going to do with this?

The Chairman: Yes.

The witnesses also are to be reminded that if they have any documentation, they can send the documentation to the clerk of the committee, Mr. Bill Farrell. I think you each have his telephone number and address here at the House of Commons.

In conclusion, Mr. Duncan—

Mr. John Duncan: You're probably wondering what we're going to do with the information we receive. Once we have a full transcript, it helps very often, because we get a lot of information at one time. So if we get your presentation, great; if we don't, we have a transcript.

We are preparing reports on the west coast. We've already prepared one report and we'll be doing more. In the meantime, just the fact that you've presented to committee often, there are lots of listeners— So hopefully between all of that—our recommendations and your submissions—we can get some movement from the bureaucracy and the minister.

The Chairman: This committee is on three places on the FM dial.

We're having a steering committee meeting tomorrow morning at 9 o'clock in room 306, West Block, to determine all of the future business of the committee and our direction.

The meeting is adjourned until that time.