FISH Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 4, 1999

• 0909

[English]

The Chairman (Mr. Charles Hubbard (Miramichi, Lib.)): Order, please.

Next week we will be looking at the bill. There is a question of amendments, and some parties have asked about the amendments from the government side. I understand the official opposition will have some amendments too, Gary.

• 0910

Maybe the parliamentary secretary could comment on how he hopes this thing will work. Yvan, we could maybe have better working business if we could get the amendments prior to going home for the weekend so that we're not caught flat-footed on Monday or Tuesday.

Wayne, would you explain how you hope to proceed.

Mr. Wayne Easter (Malpeque, Lib.): Yes—

Mr. Yvan Bernier (Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, BQ): Before Wayne starts, I have a question.

[Translation]

Mr. Chairman, I'm somewhat surprised that we have decided to proceed with our consideration of Bill C-27 this early on in our schedule. When the steering committee met before the holidays, committee members identified a series of issues which they felt should be given priority consideration and, according to the parliamentary secretary, they agreed to put off consideration of Bill C-27 until later this spring. I would like us to review this list of priority issues and I would appreciate an explanation as to why consideration of this bill was moved up on the schedule.

Then, I will come to why I feel the other issues we identified are more important. I will also share with you my reservations about Bill C-27, as I did in the House during my speech on second reading.

Could someone tell me what has happened since the last meeting of the steering committee? Upon my return, my assistant informed me that you had sent us a memo, which I did not receive until much later. Perhaps the delay was due to the translation. I did not reiterate my position, because I felt that everything was clear at the last meeting of the steering committee. As I recall, Mr. Cummings was representing the Reform Party.

[English]

The Chairman: I will rely on the clerk for this because he was here more in January than I was. I believe two notices, Bill, were sent out to offices?

The Clerk of the Committee: I know the chairman sent out a letter to all members of the committee on December 17, 1998, listing the five topics the steering committee had decided on, asking all members to get back with what goals they wanted, how to achieve them, with what witnesses. By January 11, 1999, I hadn't received any replies from the members of the committee.

I sent another one out on January 12, referring to the December 17 letter, to all members to get back to me by January 19. By January 21, I had received about three replies from members of the committee.

Regarding Bill C-27, from my recollection from the steering committee, the discussion was that it would be either the second or third week of February, when we came back.

The Chairman: I think that fairly well explains it.

Mr. Wayne Easter: On that point, Yvan, I was at the steering committee meeting too and I was of the understanding that Bill C-27 would be a priority, that it wouldn't be moved down the list, that it was one of the first items to be dealt with when we reconvened as a committee after the break. That was my understanding, and I actually thought we'd be dealing with it in the first week back, not the second. In any event, we certainly saw it as a priority, and I thought that was the understanding all the way around.

[Translation]

Mr. Yvan Bernier: I'm sorry, but that wasn't the impression I had. I have to wonder what impression the other opposition members were left with. If it's not too presumptuous of me, I'd like to know if the three responses that the clerk received were all from government members and whether opposition parties made their position known.

[English]

The Chairman: From three parties.

• 0915

Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): I can't comment on this specific demand. I didn't address Bill C-27 in my response and I wasn't there at the meeting—Mr. Cummins was—so I can't offer an opinion.

The Chairman: Mr. Easter.

Mr. Wayne Easter: Yvan, what is the problem for you in dealing with it next Tuesday?

[Translation]

Mr. Yvan Bernier: If you can recall the issues that I raised at the last committee meeting, you know that I believe there are more urgent problems in the fishery that need to be addressed before we discuss ratifying the United Nations Convention on the Law of the Sea.

Among other things, I think it's a more important to discuss management models. For example, we could examine how NAFO is run. I don't think anyone wants to relive the summer of 1998, not the fishers and not the representatives of the Quebec department of agriculture, fisheries and food that I ran into a week or two ago. It is critically important for us to know whether in fact measures are in place to prevent a recurrence of last summer's events. By delaying for a while our study of Bill C-27, we can be certain that measures will be in place for this year.

Perhaps I didn't make myself clear. Basically, that is my position. I don't have here with me the list of priority issues identified at the last meeting, but perhaps the clerk has a copy. In any case, we do have some witnesses here with us this morning and perhaps they can shed some light on the subject, since we are going to be discussing management models and the licence buyback program.

Perhaps we could now turn the floor over to our witnesses and set aside 15 or 30 minutes after the meeting, if the room is still available, to review our agenda. If the consensus is that we must nevertheless press ahead with our study of Bill C-27, I will have some thoughts on the subject to share with you, particularly some ideas on how I feel we should proceed so that we can get through everything. I don't intend to systematically oppose the process, but judging from what I've read, we're not off to a good start. However, if we intend to work in the same spirit that prevailed before the holidays, then once again I'm prepared to cooperate.

[English]

The Chairman: Yvan, I think the main point I was trying to make here is just to try to circulate any amendments that were going to be brought to the table, and if they could be circulated, Wayne, with you—

Mr. Wayne Easter: Yes. I think all members of the committee have the copy of the letter from Chuck Strahl, the whip for the Reform Party, in which the Reform Party had indicated that anything that came before the committee would be made public.

I've talked to Gary over the last few days to see if we could have an exchange of amendments. Although we don't have confirmation from Chuck Strahl on that, we're certainly willing on the government side to give the amendments to committee members today. I think they deal with a lot of the concerns committee members raised from all parties. Then you'll have the weekend to review them and be better prepared for Tuesday when we deal with UNFASS.

At the close of the meeting we'll certainly give them out, and I believe Gary has given permission for the clerk to put out to committee members the amendments from the Reform Party.

Mr. Gary Lunn: Of course, they may change depending on what yours say.

Mr. Wayne Easter: That's fine.

Mr. Gary Lunn: We'll have to have a look at that; they're all pending.

The Chairman: Thank you, Wayne and Gary, and our apologies to the witnesses. We did want to clear that up before we began this morning.

So subsequent to Standing Order 108(2), we'd like to welcome this morning to our committee hearings officials from the department to offer us a briefing on fisheries management plans and licence buybacks. With that, Ms. Forand, would you be the lead on this presentation?

Ms. Liseanne Forand (Assistant Deputy Minister, Policy, Department of Fisheries and Oceans): Mr. Chairman, thank you, and I apologize, first of all, for being late this morning.

The Chairman: We were late, not you.

Ms. Liseanne Forand: I'm accompanied here by Barry Rashotte and Heather James, who will be providing you with a briefing on management plans and on other fisheries management-related issues, and by David Rideout. David Rideout and I will be providing the briefing on the licence retirement issues. So we will wait for the committee to determine in which order you'd like to address these issues.

• 0920

The Chairman: Is there a preference from committee members? We'll leave it up to you then as to how to proceed. We have until 11 a.m., so we want to make sure we save a good bit of time for whichever option you leave to the end.

Ms. Liseanne Forand: Perhaps, then, Mr. Chairman, I'd suggest that we start with the licence retirements, since that creates a bit of a context perhaps for the question of fisheries management and the plans that will be put in place this year.

What I thought I would do this morning is just provide you with a very brief opening statement on the licence retirement programs that are currently in place in Atlantic Canada as well as B.C., and then Mr. Rideout and I will be pleased to answer any questions you have.

On June 19, the government announced the Canadian fisheries adjustment and restructuring measures for the Atlantic and Pacific coasts, and a key element of that announcement included licence retirement programs that were planned for both coasts.

On the east coast, since 1992, groundfish licence retirement has taken place under the northern cod adjustment and recovery program, which removed 876 Atlantic groundfish licences, and under the Atlantic groundfish strategy, also known as TAGS, which removed 478 licences. Reducing harvesting capacity through licence retirement has been supported by a number of external commentators on the fishery, including the Cashin Task Force on Incomes and Adjustments in the Atlantic Fisheries, and the Harrigan report, which you will recall was done by Mr. Eugene Harrigan. It was a post-TAGS review that was initiated by Human Resources Development Canada. The Auditor General as well, in his report, supported capacity reduction in the Atlantic fishery.

On the west coast, there has also been support for licence retirement, in particular a report produced by the British Columbia Job Protection Commissioner in 1998. I'll just cite this report—a very brief citation—because I think it relates directly to what we're talking about:

The last three years have seen terrible financial results for the salmon fleet with low catches and low prices. However, as bad as they might seem, they would have been significantly worse in the absence of the 1996 federal fleet reduction program.

The Pacific salmon revitalization strategy, which is also often called the Mifflin plan, removed 797 salmon licences from the west coast fleet. The Job Protection Commissioner concluded by saying “the industry as we know it will not survive unless fundamental change is embraced and implemented”.

[Translation]

Licence retirement programming on both coasts is being run through a voluntary, multiple round reverse auction process using five separate industry advisory committees to assist the department in assessing bid values.

[English]

Licence retirement is being run on both coasts through a voluntary, multiple-round, reverse-auction process, and it's important to point out that industry advisory committees are in place in all of the regions in which licence retirement programs are being implemented.

I'll start with just a brief description of the east coast program and then turn to the west coast.

The Atlantic groundfish licence retirement program is an important element of the government's post-TAGS programming. There are currently about 13,000 groundfish licences in Atlantic Canada; 5,800 of those are known as “core licences”, and those 5,800 are held by people who were recipients of TAGS income support.

The purpose of the $250-million Atlantic groundfish licence retirement program is to achieve permanent reductions in the Atlantic groundfish fishery. There are three key principles to the program: it's voluntary; priority is given to TAGS recipients and core licence holders; and licence holders who retire their licences are required to leave the fishery permanently.

Bid results in the first round of the program varied from region to region. The first round was held in the late fall. We're now in the process of undergoing a second round of reverse auction throughout the Atlantic region. Bid results varied quite significantly from region to region due to the number of core fishermen, the number of TAGS recipients, and non-core and non-TAGS fishers in the four regions. As well, each region has varying fleets sizes and different fleet compositions, so you're bound to get slightly different results in terms of the bids that were provided.

• 0925

The advisory committees assess the bids in the context of the particular situation in each region. This was an important element of the program for Fisheries and Oceans in this particular instance, which was to provide within the parameters of the program the greatest amount of flexibility on a regional basis so that regional industry advisory committees and regional fisheries managers could conduct the program in a manner most appropriate to the makeup of their particular fleet. As a result, the bids that were accepted were of different patterns in different regions.

In the first round, 2,851 bids were received, and 471 of those were accepted. There were different average values of the bids, depending on the region, and that had a lot to do with the kinds of gear types and fleet sectors that submitted bids to be accepted.

As I mentioned, we are now in the second round of the Atlantic licence retirement program. We now have somewhat staggered closing dates by region, because each of the regions, because of the nature of the bids they received, may have taken more time or less time for their industry advisory committees to provide their advice to the managers.

In any event, the current round in Newfoundland closes next week, on February 12. The Scotia-Fundy portion of the Maritimes region is closed; it closed on February 1. The gulf region closed on January 15 and the Laurentian region on January 22. We don't yet have the results of the second round. The bids are being assessed by the industry advisory committees. That's the situation on the east coast.

On the west coast, the first round of salmon licence retirement was announced on October 14, and almost one-third of the fleet, 1,124 licence holders, bid to retire their licences in that first round. The results of that round were announced in December, and the results were the acceptance of 99 bids at a total cost of $23.4 million. The low number of accepted bids was the result of the industry advisory committee's assessment that, taking into account market value of a licence, many bids were too high. Oftentimes what has been found generally in terms of reverse auction processes is that the first round is used as an opportunity to set the price, to assess the market, to figure out where the acceptable range is.

As I mentioned, a total of 1,124 bids were accepted, and they were spread among the three main gear types in the salmon fishery—that is, gill net, troll, and seine. We are currently in the second round of bidding in British Columbia, and it closes next week, February 15, or the following Monday.

Those are my opening remarks.

The Chairman: I have a quick question. On the gill net in B.C., the average price, is that an error? I would suspect it must be.

Ms. Liseanne Forand: Yes. In fact, the gear types have been reversed. That should be seine. That's the average price for the seine. So if you put gill net where seine is and seine where gill net is... It doesn't change any of the totals, and I am assuming the numbers are right.

We apologize for that. There was a mix up in the numbers there.

The Chairman: For questions, then, Gary will start.

Mr. Gary Lunn: Thank you. That was an excellent presentation.

There are two concerns that have been brought to my attention. I'm not so sure if the first one is relevant to the licence buyback, but down the road it may be.

What we heard as a committee when we travelled to British Columbia, and we continue to get complaints, is that although, especially under the Mifflin plan, there is no question that they have reduced the number of licences, they then allowed licence stacking. The common complaint we heard, even as a committee in travels, was that although they may have reduced the fleet, they may not necessarily have reduced capacity. I'd like your comments on that and how that's effected.

The second concern—and this has been brought to my attention on numerous occasions with respect to this current bidding process—is that it is a voluntary licence buyback. The common complaint I'm getting is that it's squeezing out the small guy, the person who really wants it. The businesses have been family-run ones, but they're forced out and are left with no other option because they and their families are so destitute, so desperate, right now.

• 0930

The larger companies or corporations that hold numerous licences, that have deep pockets and lots of money, can afford to ride out the storm, because everybody believes at some point in time... Is there something we can do—I say this as a constructive criticism, and I'm quite pleased to see that the number of bids accepted is across all three fleets—to ensure that the end result is not that we've squeezed out all the single boat owners, all the one-owner operations, and that the only ones that are left are corporations or companies? I have nothing against them personally, but I hope we can ensure a balance of some type.

I'd just like your comments with respect to those two.

Ms. Liseanne Forand: In the first instance, on your question about whether the reduction of licences is really reducing capacity given the change in policy that permitted the stacking, my colleague Heather James may have some comments on that in terms of the management of the salmon fishery in B.C. With respect to stacking, the view was that with the reduction in licences that occurred under the Pacific salmon revitalization plan, it was in fact a permanent reduction in the amount of fishing capacity that exists in the salmon fishery. Also, it addresses the question of viability.

One of the objectives of this program is to promote an environmentally sustainable and economically viable fishery. That means emphasizing and promoting, as much as possible, multi-species licence holders. That way people have more than one option. If there is a temporary downturn in one stock or in one stock area, the licence holder has an alternative and is able to keep making a living with the resources that he or she has.

In particular, with respect to stacking, I believe there was a survey done of the fishing industry in January 1998—before I came to this job. They surveyed fishing licence holders to see whether they supported the idea of stacking, because there had been quite a bit of controversy about whether or not that was a positive element of the policy and whether or not it would achieve the kind of objectives that people were seeking. In fact, a significant majority approved the stacking policy, and it was retained in the policy partly as a result of that survey. In this instance, with this new salmon licence retirement program, it's our belief that the reduction in capacity will be even more significant now in this second program.

Your next question had to do with the idea of whether or not this program is unduly affecting the small owner-operator type of vessel. You commented that the accepted bids were spread among the gear sectors. That is something that reflects the bids that came in. We did get a wide range of bids coming in across all gear types. There were more seine licences bought back than there were troll or gill net. Again, however, that probably has more to do with the setting of the price and the value of those licences.

We do not believe this program is targeting the owner-operator. Again, we are seeking to promote multi-species licence holders as much as possible. That does not exclude gill netters and trolling and small boats. Over time, many of those licence holders have been able to expand into other fisheries, as well as salmon.

In addition, the overall objective of the program is to reduce the number of people who have a draw on this resource so that small owner-operators can in fact make a sustainable living out of this fishery. In fact, as you noted in terms of the results, we received a number of bids from the same fleet. We find there is a restructuring happening across gear types and across elements of the fleet. At this point, we're confident that this program will not result in a skewed balance between either the gear types or the elements of the fleet.

The other comment I would make is that, because of concerns that people expressed about wanting a better idea of what the future of the fishery would look like, this program was put together in such a way as to allow the first two or three rounds of licence retirement to occur while consultations were underway on new directions for the Pacific salmon fishery and the allocation framework for salmon.

• 0935

In looking at their options, the people would therefore have a good idea whether or not they saw a future for themselves in the fishery. They could then also consider other options that they might have in terms of other investments that they might want to make, or in terms of other directions in which they might want to go. We've made sure there will be further rounds of the licence retirement after those consultations are finished so that people have all the time they need to take that into account. We think that's as valid for the owner-operator as it might be for a company vessel.

The Chairman: Thank you, Gary.

Wayne.

Mr. Wayne Easter: Mine really relates to the same sort of area, Liseanne. One of the key areas we get questions in in fishing communities is what licences really have to do with the fishing capacity on the bottom line. Especially on the east coast, quite a few of the licences that are being bought back are not the ones that are putting the impact on the fishery's harvesting capacity. Is there any kind of evidence that will give us the information that there is actually a capacity reduction in and of itself? Even in your paper here, you're talking about licences, but what do you have that's concrete, that can deal with the question of capacity? That's what we get all the time. When we're talking to fishermen, they say we're buying licences, but we're not reducing where the problem is, and that's capacity. We need some evidence to deal with that.

There's also a second question that we get in fishing communities, and it's more on the west coast for this one. In terms of the retirement programs, there is a fear—I guess you could phrase it this way—of the corporate sector in terms of the corporate fishing community versus the community fishery. There is certainly a fear in a lot of the communities in western Canada that the licence buyback program is driving the fishery to the bigger corporate sector, that the community fisheries will be left without any ability or capacity to go fishing.

Those are the two key areas we get asked about.

Ms. Liseanne Forand: Thank you, Mr. Chairman.

On the first question, in terms of the paper I've presented, yes, it does talk about licences. Licences, of course, are a quantifiable, accountable measure of people who are authorized to fish. I'd deal first of all with whether or not reducing licences actually reduces capacity.

Even if you're looking at perhaps what people call back-pocket licences or licences that people haven't been using that extensively in recent years—in particular, during the downturn of the groundfish fishery—those licences represent latent capacity. Especially if they're core licences, those licences can be reactivated or activated at any time. In the context of a competitive fishery, they do represent tremendous latent and potential capacity.

As I mentioned in my comments, priority is given to core licences in terms of assessing bids and in terms of ranking the nature of the bids that come in. It's believed—and the industry advisory committees agree—that the reduction of core licences is in fact a permanent reduction in the capacity to fish in a given fishery.

There are other measures that are used to reduce capacity and to address the capacity issue in tandem with this. There are issues that you as a committee have discussed, and other committees have as well. They include measures such as individual quotas, a move away from competitive fisheries to individual, quota-based fisheries, so as to control and limit the amount of harvesting capacity that any one licence or any one vessel might represent. If you have questions on that, I'm sure Barry Rashotte would be pleased to answer in terms of how that works.

So we see the reduction of core licences in particular, and non-core licences to a slightly lesser extent, as being a genuine reduction in the potential capacity that is out there for the fishery, particularly in the case of competitive fisheries.

• 0940

With respect to the B.C. situation in particular and, as you've put it, the corporate versus community interests, we are seeing applications coming from across the range of corporately held and individually held licences, as I also mentioned in my earlier response. There is a significant geographic distribution up and down the coast, from larger centres such as Vancouver and Nanaimo and from smaller coastal communities. We have seen bids come in from all of those areas. At the end of the first round, we do not see any move towards corporate concentration as opposed to community interests. We are receiving bids from all of those areas.

The more important thing is whether or not we will have a fleet that is economically viable as a result of this licence retirement program; that is, one of a size that is well matched to the resource and that is resilient in terms of what we always expect to be temporary downturns in the individual stocks. We saw that situation last summer in the salmon fishery. There were particular stocks of coho salmon that were in very bad shape and measures needed to be taken to protect them. If a licence holder has several options, whether that involves licences in two areas instead of one or another species on which he can rely, that licence holder can perhaps use those other opportunities and those other options to remain viable during periods of downturn. That's really the emphasis, rather than a corporate versus community one.

Our analysis, and certainly the analysis that the job protection commissioner has done, has demonstrated that it's true that coastal communities are in severe difficulty in some areas, particularly in British Columbia. That's a combined effect of the fisheries downturn, very difficult situations in terms of forestry, as well as a significant reduction in public and para-public employment in those communities.

As part of the $400-million adjustment package that was announced for B.C. last June, there are measures that are attempting to address the community situation in particular through HRDC adjustment measures, as well as through programs that are being put in place by Western Economic Diversification.

As a government, we're trying to take a holistic approach to the community question. It's more than just licence retirement and it's more than just the availability of small boat owner-operator licences in those communities. It's a broader question that the whole program is attempting to address.

The Chairman: Yvan.

[Translation]

Mr. Yvan Bernier: Good morning, ladies and gentlemen.

My questions will focus more specifically on East Coast licence buybacks. I have here several documents, but I don't know for certain whether you quoted from them or not.

I note in one of these papers that DFO retired 478 licences under the Atlantic Ground Fish Strategy. I believe that was during the first phase of the retirement program. Exactly what was the cost of retiring these 478 licences?

Ms. Liseanne Forand: You're referring to the licences retired during the first phase of the program?

Mr. Yvan Bernier: Yes, to the licences retired during the Tobin era.

Ms. Liseanne Forand: I don't have that information at my fingertips, but as soon as I get it, I will pass it along to you.

Mr. Yvan Bernier: I'm curious as to the cost of retiring these licences and I'd like to compare it with the overall number of licences DFO expects to be able to buy back with $250 million.

[English]

The Chairman: Is it not on the table, in 38.7?

[Translation]

Mr. Yvan Bernier: No, that information isn't given out.

[English]

Mr. David Rideout (Director General, Economic and Policy Analysis Directorate, Department of Fisheries and Oceans): That's the first round of licence retirement, but the first licence retirement program is the question.

The Chairman: The first program.

Mr. Yvan Bernier: The first buyback.

[Translation]

Reviewing past events is always a good learning experience. If we want to know where we're going, we must always look at where we've come from. I'd like to compare our objectives and approaches during the first round of the retirement program and the actions taken, because undoubtedly some mistakes were made. In my opinion, if the government managed to buy back only 478 of the 13,000 groundfish licences available, then it wasn't very successful. That's why I'd like to know the cost of retiring these 478 licences and whether we met our objectives. I don't think these results qualify as a success.

• 0945

What are the objectives of this $250 million program and how are these different from the objectives of round one which, as we know, was a failure to some extent?

I'd like us to review the testimony that we have heard, to compare these two tables, including the objectives and the costs involved, and to look at how the second round of the program is structured. I'd like someone to explain to me whether there is in fact a difference between round one and round two. If there isn't any difference, this means that we are headed exactly in the same direction, Mr. Chairman. And if that's the case, since the closure dates haven't yet arrived, perhaps we still have time to do something if we want to save some money.

As for an action plan, does DFO have one and if so, was it drawn up in consultation with the industry?

I'd also like you to clarify the second paragraph on page 2 which states the following:

On the East Coast this is the same process which was used under TAGS, and which received favourable reviews from the Auditor General and from independent evaluators.

One issue that needs to be discussed is the voluntary buyback program using five separate advisory committees. I would be interested in finding out what the Auditor General had to say because I've been hearing different reports from people in the field. For example, as the latest phase of the buyback program was slated to kick in, Mr. McCurdy expressed some concern about the lack of a management plan and worried that once again, objectives might not be met.

I have a third question as well for the witness. I'd like to tie all of this in with what I've been hearing from the industry about catches, particularly from industry representatives in Quebec and New Brunswick who are wondering about this, from the MFU and from Mr. Reginald Comeau who, when confronted with the question as to what kind of management model is needed, talks about an integrated fisheries zone in the gulf.

I want to see your management plan. Does it take into account only reduced capacity and fewer fishers, or does it also include a plan for the recovery of the fishery? When the fishery reopens, should we expect to see more inshore fishing, or will current fleet levels be maintained? Will the proportion of mobile and stationary gear, gill nets and trawl lines stay the same? I'd like our witnesses to be accompanied by scientists when they return to testify. There is a difference when we adopt a strategy which sets out who is allowed to catch what and how in relation to existing stocks.

Everyone in the industry knows that five-year-old cod is caught with mobile gear, seven or eight-year old cod with gill nets, and nine or ten-year old cod, with trawl lines. Fishers are telling us that we must keep the large spawners. Therefore, we must give priority consideration to buying back the licences of fishers who work with trawl lines. I'd like to know if there is a connection between managing the licence buyback program and the objectives of fisheries management in the future. If we buy back the licences of fishers who use mobile gear or gill nets, then we are shooting ourselves in the foot. Let me remind you that it will cost us another $250 million to treat that kind of injury. I'm all for virtue, but could someone tell me how one gets to heaven.

In their efforts to rationalize the industry, have our witnesses considered the possibility of exchanging licences or quotas with other fishery sectors? Take, for example, a crab fisher who has a licence to fish crab in the Gulf of St. Lawrence. Suppose he wants to retire and is willing to sell his licence for $1 million. Suppose he catches 300,000 pounds of crab each and every year. There could well be 10 gill net groundfish fishers out there interested in earning a living by catching only 30,000 pounds. The crab fishing licence could be split into 10 units to satisfy 10 people. A $1 million transaction could make 11 people and even everyone in the industry happy.

• 0950

Has an alternative such as this ever been considered? Regardless of the answer, I'd like to know why. If such an option has been considered, why was it rejected? We've been told that only core players and those benefitting from TAGS are included in the negotiations. Perhaps striking a balance in the fishery in general and in the groundfish industry in particular doesn't depend solely on groundfish.

I have one final brief question on the subject. Perhaps this doesn't fall within their purview, Mr. Chairman, but it's very important nonetheless. We can call the witnesses at that time. I imagine that this is recorded. What will be the fiscal impact of the bids that are accepted?

I've been told that people are being taxed on every penny they receive under the program. Imagine Mr. X who thought he was getting a good deal when he received $100,000, $150,000 or even $200,000. He might have thought that by investing $200,000 at 10 per cent, he would have an income of $20,000 for his retirement. But surprise, both the federal and provincial departments of revenue moved in and claimed 50 or even 60 per cent of this amount. Our poor fisher is sunk. That's what I'm hearing from people in the industry.

I'd like us to take a close look at this situation. It could be one of the reasons why the retirement program is not proving to be as attractive as it could be for fishers. I'd like us to compare the tax breaks that fishers and farmers receive. I believe the latter enjoy a $500,000 tax exemption. That's not the case for fishers. I think we need to reconsider this issue if we want a rational licence retirement program that everyone understands. I don't know if they are prepared to answer these questions immediately or whether they want some time to think about it and get back to us. These are just some of the thoughts and impressions I had as I listened to their testimony.

[English]

The Chairman: Yvan, I've been very generous with the time for your comments, to the point where you probably took all the time for the answers and maybe the time for the next round.

[Translation]

Mr. Yvan Bernier: You can see why I'm not too anxious to talk about Bill C-27.

[English]

The Chairman: If somebody from the government side were to be generous, perhaps we could allow a bit of their time for a few remarks. With regard to these answers you asked for, we'll never be able to cover them this morning or this week. But could we bear with it for a few minutes and hear a reply to some of these statements?

[Translation]

Ms. Liseanne Forand: Thank you very much, Mr. Chairman. I will try to answer some of your questions. We promise to provide you with any additional information, where required.

First of all, you wanted to know whether we had compared the objectives of the first program with the results achieved and whether the lessons that we may have drawn from this helped us to set up the most recent program. I'd like to start by drawing your attention to two components of the first program.

To begin with, in 1992 or 1993, we didn't have the projections we now have with respect to stock recovery. People may have reacted differently at the time. Back then, under TAGS, the government was committed to maintaining a certain income level for fishers for a certain period of time. People genuinely believed that stocks would recover before TAGS ended. They may have weighed their options and made decisions based on this belief and the information they had. When we launched this program in 1998, we knew the facts about stock recovery. In fact, the Fisheries Resource Conservation Council estimates that it will take anywhere from five to ten years for some of the most important stocks to recover. Therefore, fishers have a different perspective on the options available to them.

• 0955

During the first phase of the program, we were also revising our licensing policy. What these figures don't show, regardless of whether 876 or 478 licenses were retired, is that we introduced the concept of core and non-core fishers. This has resulted in a permanent reduction in the fishing capacity of the Atlantic fleet. The figure quoted as to the number of licences that have been retired may not give us a totally accurate picture of the situation. Non-core licences also reflect a change in licencing policy.

As for the Auditor General's observations, he, along with provincial auditors—the latest version was posted on our WebSite last week or the week before that—support the concept of a reverse auction process. Fishers list the value of their licence, and this value is then assessed by a group of industry representatives. This is the approach they favoured and recommended we adopt for the final phase of the program.

There have, nevertheless, been some changes. When putting your last question, you stated that the program was intended solely for core fishers and TAGS participants. That's not the case with the latest program. It's open to all groundfish licence holders with boats under 65 feet in length. This is a rather substantial change from the previous program. It's open to all participants. When advisory committees assess the value of the licences, they take into account whether the licence is held by a core or non-core fisher or by a TAGS participant. This is a determining factor in assessing bid values. The program has therefore been expanded to achieve more positive results in the Atlantic fishery.

Earlier, I also talked about how flexible regional offices and regional fleets have been in terms of organizing the licence retirement program based on the fleet and the type of fishing taking place in the region. Efforts are being made to take into account the advice that we have received or the conclusions drawn by the Auditor General and by others who have examined the programs more closely.

As for the program's objectives, there are about 13,000 groundfish licences in the Atlantic. Reducing this number is a valid objective in and of itself, even if we don't try to determine what the ideal fleet size should be.

As for the comments by industry representatives about the program's potential success, some objected to the fact that a fisher selling his licence was required to leave the fishery permanently. That was an issue Cabinet considered from the very start of this program.

You also mentioned the taxation issue. This is also a concern of industry representatives. Since the payment received for a fishing licence is considered a capital gain, it is taxed like any other capital gain. This is included in the overall value of the licence up for auction. This value must be taken into consideration. Moreover, the fact that any payment received for a licence is taxable is clearly stated in the application form sent to licence holders. It is stated very clearly that these factors must be taken into consideration and that an accountant or expert should be consulted to determine the true value of the licences.

• 1000

You also mentioned a strategy for reopening the fishery. That is not exactly my area of expertise. I would simply say that the FRCC has been examining this issue for several years now. It has released a number of papers and is continuing to do studies and to consult with the department and with the public.

[English]

The Chairman: Thank you.

Yvan, we'll have to have a special meeting some time later.

Going now to Nova Scotia, we'll hear from Peter.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Thank you, Mr. Chairman. I'd like to have one of those meetings as well.

Thank you for coming, and again, thanks for the tour of DFO yesterday.

On the east coast page you say there are 13,000 groundfish licences in the Atlantic, and 5,800 are core licences held by TAGS recipients. For clarification purposes and for the record, are those 5,800 licences for those people who received TAGS by the end of August? As you know, the original TAGS program was to go to May 1999. That was the written contractual agreement these people thought they had. The government was going to cancel it in early March or May, and then they extended it until August. But in that extension period, a lot of people were taken off TAGS, prematurely, in their opinion. Is that figure for everyone who had TAGS or just the ones who had TAGS at the end of August 1998?

Ms. Liseanne Forand: To the best of my knowledge—and I'll check this when I get back to the department—those are people who were TAGS eligible whether or not they were receiving benefits. So they would have been determined at the outset of the program to be eligible to receive TAGS based on their attachment to the fishery.

Mr. Peter Stoffer: That would be regardless of the fact that they were cut off at the end of August or prematurely.

Ms. Liseanne Forand: Yes.

Mr. Peter Stoffer: Good.

Ms. Liseanne Forand: I'll check that, and if it's not right, I'll send a note to the committee.

Mr. Peter Stoffer: Unlike my colleague from the Reform Party, I do have a problem with the corporate sector when it comes to the fishery, because of my opposition to the ITQ program and EA. But I couldn't help but notice—and correct me if I'm wrong—that you said you're trying to encourage on the west coast a multi-species licence program in terms of the retirement. Is that correct?

Ms. Liseanne Forand: In terms of an overall fleet makeup, we are encouraging, where it's possible, multi-species licence holders, that is, somebody who might have a salmon licence as well as a prawn licence as well as perhaps a halibut licence, something like that.

Mr. Peter Stoffer: Are you encouraging that same policy on the east coast?

Ms. Liseanne Forand: Yes. It's also part of a viable fishery to have multi-species licences, such as for lobster. For example, in the licence retirement program one of the things the industry advisory committees look at is whether or not the applicant is groundfish dependent, that is to say, if they have no other options but groundfish in terms of making their enterprise viable.

Mr. Peter Stoffer: I have received calls from a fair number of fishermen who have been part of the bid program and who just want to get rid of their groundfish licence and not their lobster or crab licence, and they're being told—or at least they're telling me—that they have to get rid of all of it. Is this not a bit of a contradiction then?

Ms. Liseanne Forand: As I mentioned at the outset, one of the objectives of the program is a permanent reduction in the number of licences in the fishery and, again, the promotion of a multi-species, economically viable fishery wherever possible. As a result, one of the program elements is that if you make a bid to retire your licence, then payment is made for your groundfish licence, and the licence holder must undertake to leave the fishery completely, to dispose of his or her other licences in accordance with the licensing policy in a given region.

While we do not want to promote groundfish-dependent single-species licence holders, we equally do not want to promote lobster-dependent single-species licence holders or scallop-dependent single-species licence holders. The multi-species core licence holder is really the objective in terms of licensing.

Mr. Peter Stoffer: In terms of a person inquiring as to what their licences were, it is based on what information DFO would have pertaining to that particular licence.

I'll just give you one example of what happened in a meeting I had with Mr. John Hansen, who's with DFO in Nova Scotia, and a gentleman by the name of Mr. Wayne Eddy, who had fished for 20 years in the 4X and 4VsW ranges. As you leave Halifax Harbour, you're on Chebucto Head, and the line is right in the middle, so he fished both zones for over 20 years. He was thinking, well, licence retirement, time to get out. But DFO told him they only have records of him fishing in 4VsW. Even though Mr. Hansen admitted that DFO didn't do a very good job of picking up the DFO slips from the plants and wherever, they're not going to go back and look at it. Basically, the decision was final. They only have a record of him fishing in 4VsW and not 4X, even though he has the slips and all the income tax statements for over 20 years to indicate he fished in both zones and made income from both zones. If he wants to sell his licence, if he has indications from DFO that he had fished in both, his licence will be of more value. Mr. Hansen has told him no, it's 4VsW and that's it. That's just one person.

• 1005

Just for clarification, you're obviously using a negotiated amount to decide what the average price will be for the person's licence. If that's just one individual who has a problem determining what the value of their licence is, how widespread could this be throughout the industry?

Ms. Liseanne Forand: I can't, as you understand, comment on the individual case because I'm not familiar with it.

Mr. Peter Stoffer: Fair enough.

Ms. Liseanne Forand: In terms of the way in which the program is working, the licence holder has two options in terms of the value from landed catch of the licence. There are various other elements that come into play in terms of the value of the licence, as I've mentioned earlier, such as core, TAGS, length of the boat, and that sort of thing. But in terms of historical catch, the licence holder has the option to consider—I know this is true in the Newfoundland region, and I'm going to look to David to know if it's true in the other regions as well—the historical catch average for that fleet sector. There are tables that have been made up with size of boat, kind of gear, area fished, and what the historical catch would be for that boat, or if they have records they can bring forward as evidence to demonstrate that their catches were higher than the historical average, they can do so.

Mr. Peter Stoffer: He did that.

Ms. Liseanne Forand: So it's a question of reviewing the record and the evidence that's brought forward. I can't comment on whether or not the evidence that this particular licence holder brought forward was complete or sufficient. I wouldn't know why the regional office wouldn't be considering it. Those are the two options they have. So someone who doesn't have the records would go with the historical average, and somebody who has records and believes their records would support a higher value would bring those records forward.

Mr. Peter Stoffer: You also mentioned that in the coastal communities of B.C., for example, it's not just the downturn of the fishery, but there are also problems in forestry and other employment, and that's why the coastal communities are having such a hard time. You said other departments, for example, HRDC, are doing job partnership programs in order to create more economic diversity in those communities.

In the area of Marystown, Newfoundland, if you look at it as primarily a fishing area, it wasn't forestry that caused the decline and it wasn't everything else; it was fishing. HRDC, through Stats Canada, through the EI reforms, have taken $81 million per year out of that economy from—

The Chairman: Mr. Stoffer, you've had your time and I'm afraid you're getting into an area here—

Mr. Peter Stoffer: I was almost finished.

The Chairman: —that is very political rather than—

Mr. Peter Stoffer: I know. She mentioned HRDC was doing this. I just wanted to put on the record that may be so for the west coast but not for the east coast.

The Chairman: Are you using CLC statistics?

Mr. Peter Stoffer: No, these are from Stats Canada.

One last thing on the fishery, though, okay? I was just trying to get a little dig in there.

The Chairman: I know you are.

Mr. Peter Stoffer: The retirement programs are in conjunction with the provinces. Is that correct?

Ms. Liseanne Forand: Early retirement.

Mr. Peter Stoffer: It's not one program for all provinces. Each province negotiates it differently on their own. Is that correct?

Ms. Liseanne Forand: That's right.

Mr. Peter Stoffer: I've been dealing with some folks from Canso who have indicated that Newfoundland, in their opinion, negotiated a better deal for their fishermen than Nova Scotia. They wanted me to ask you why that would be, in terms of the generosity of the retirement program.

Ms. Liseanne Forand: The early retirement program is funded on a cost-shared basis between the federal government and the provincial governments. It is based on the federal-provincial agreement in each case between the Government of Canada and each of the provincial governments. The overall conditions and criteria for the program are the same in terms of who is eligible to receive it. The payments made under the terms of the program, to the best of my knowledge, are based on a percentage of the individual's employment insurance income over a preceding period.

• 1010

As far as I know, it is standard across all provinces. I'll ask Mr. Rideout, who's been a bit more involved in this than I have.

Mr. David Rideout: I think the basic principle of early retirement is the foundation of the negotiation with each province, but each province tries to assess its local situation and bring it into the negotiations. That's the basis on which HRDC makes the arrangements and agreements.

I'd like to go back to the question of Mr. Eddy for one minute. I took from what you were saying that DFO had some influence on this, but in fact they don't. The industry advisory committees are almost at arm's length, although they depend on us for information and clarification of information. But they make their recommendations based only on their advice, not the advice of DFO to them. They make those recommendations to the regional director general of DFO. In that case, I suppose if he wanted to talk to members of the industry committee he could do that, but they certainly would take a look at that kind of thing and are generally familiar with situations, although all of the bids put to them are blind; in other words, there are no names, addresses, or anything associated with them.

Mr. Peter Stoffer: I have more, but... You can't get out of EI, can you? EI gets in there again.

The Chairman: I have two quick points here. This industry advisory committee concept sounds very good, but the guidelines for establishing a committee and how its members are selected is certainly open for some debate. Could somebody inform me, as chairman of the committee in general, by letter, how these are established and the terms of reference?

The more important question I want to ask goes back to licences. With the Atlantic salmon—and hopefully, Gary, this doesn't happen with the west coast—we eventually got to the point where most commercial licences for Atlantic salmon were purchased by the department and by several levels of government. But in New Brunswick we still have about a dozen or so licences—people who hold commercial salmon fishing licences that they renew annually, but they haven't been able to fish for probably 10 to 12 years, and in between, going back further than that.

With the buyback system, I would hope the people on the west coast will never be caught with what the people in New Brunswick have been caught with, where they have licences with which they'll never be able to fish, apparently. I hope the department will look at those dozen licences—about six or eight of them are on the Miramichi River—and try to conclude...

Tied in with that, of course, is the concept that no angler in Atlantic Canada is allowed to keep a mature fish—a multi-year sea salmon. Those commercial fishermen are saying that no angler will ever be able to keep a large salmon as long as they hold those licences. So there are some dangers with that, both to our recreational fishery of the future... The only people today in Atlantic Canada who can keep a multi-year sea salmon are first nations people, for ceremonial and specific purposes—and a very limited number.

So I'll throw that out as a good New Brunswicker. I get a monthly request to look into that issue and hopefully you will go back... I'm not looking for an answer this morning.

Can we move on now to the second part of the meeting today?

Mr. Barry Rashotte (Acting Director, Resource Management, Fisheries Management, Department of Fisheries and Oceans): Thank you, Mr. Chair. With your permission, I'll make my opening statement on the change to the management cycle. Then we can discuss that before I proceed with my statement on the management plans that relate to Nunavut.

Over the past few years the consultative and decision-making process, while becoming more open, has also become more complex and time-consuming, shortening the review and approval stages of the process. This process involves some 40 major scientific and management advisory committees and 37 major fish species. These committees include scientific advisory committees, management advisory committees, federal-provincial committees, and international committees.

• 1015

In addition, in the new co-management approach to fisheries management inquiries, we attempt to reach a consensus among stakeholders. This practice is more time-consuming, but allows most controversies to be resolved at the advisory level.

It has been the practice that certain plans would be sent to the minister for approval, while others would be approved by departmental officials. Industry continues to stress the need for a stable approach to fisheries management and they argue that delays in approving plans costs them lost revenue and sales. They have suggested multi-year plans might work better for fisheries with limited annual change. They have also argued that plans should be approved at the regional level.

Given this, the department has looked at ways to streamline the process and delegate authority and accountability for plan approval as close to industry as possible, with the goal of releasing plans one month before the season opening. This is consistent with the departmental commitment on delegation and enforcement in order to provide a better service to clients.

To achieve this goal, a new approach to the approval of integrated fisheries management plans has been approved. Under the new approach most plans would be approved by senior departmental officials. Ministerial approval would be requested only for plans that are expected to be highly controversial. For example, plans establishing new policy or deviating from existing policy, plans involving the issuance of new licences, plans setting TACs above the scientifically recommended level, or plans having some international controversy.

Plans requiring ministerial approval under the new system must now be sent to headquarters in Ottawa for a review nine and a half weeks before the fishery opens and forwarded to the minister within two weeks. There are approximately 13 plans in 1999 requiring ministerial approval.

In addition, plans that have major inter-regional implications would be approved by the assistant deputy minister for fisheries management. These plans must be sent to headquarters six and a half weeks before the season opens.

However, the large majority of plans that are of a regional nature would continue to be approved by the regional directors general, or, where applicable in central and arctic regions, by wildlife management boards, subject to ministerial disallowance.

The department is also promoting the adoption of multi-year plans as a strategy to reduce controversy and increase stability in the industry. As a result of this new timing requirement, certain plans have changed from being managed on a calendar-year basis to being managed on a different cycle. The example is groundfish. For Scotia-Fundy and Newfoundland stocks, the new season will be from April 1 to March 31. However, 1999 will be a transition year, and TACs for a 15-month period have been announced. These TACs run from January 1, 1999 to March 31, 2000.

The proposal for the new season for gulf stocks was July 1 to June 30. However, following consultations at the gulf groundfish advisory two or three weeks ago, we are now looking at revising this to have the season run from May 15 in a given year to May 14. This will require that some element of the nine and a half weeks will have to be shortened to make these deadlines.

Because of the international implications, NAFO stocks and George's Bank stocks will remain under current timelines. NAFO stocks are the calendar year, and George's Bank, I believe, runs from June to the end of May.

Mr. Yvan Bernier: Could we please see this on paper, if you have it now, or after?

Mr. Barry Rashotte: I actually have a deck presentation that I could provide to the committee as a follow-up.

That's my opening statement on the cycles.

The Chairman: We have about 40 minutes. Gary, would you like to start?

Mr. Gary Lunn: Thanks. I'm pleased to see some of you recognize, looking back over the 1998 fishery, that probably the most significant problem—at least I see it as one of the most significant and I think everybody would agree—was the lack of lead time from when decisions were made to when the fishery opened, both in the recreational and the commercial sectors. It left many people really with few choices and scrambling to try to get organized. They weren't able to prepare, to hire crews. Even some of the sports fishing lodges, to get their guides in place... I think that was probably the most significant complaint.

• 1020

You said you have a goal—and I stand to be corrected. What was it? They'll release the plans a month before the season opens. Is that good enough? I'm throwing it out as a question, not trying to criticize. I appreciate that you may have to do some final adjustments, but do the people who are fishing in British Columbia know what the target openings are, and how much, and so forth? Are they going to get more lead time than one month? I appreciate that in 1998 it was only days, in some cases hours.

Ms. Heather James (Chief, Resource Management, Pacific, Department of Fisheries and Oceans): On salmon? The salmon plan hasn't been approved. But just in January, a couple of weeks ago, we issued a news release on the 1999 salmon outlook, which is a kind of preliminary statement. It's not the detail. That was released—I don't know—a couple of weeks ago. So that's a preliminary indication of where—

Mr. Gary Lunn: And does it give the specifics?

Ms. Heather James: No, because the management plan hasn't been approved. But it's giving at least a preliminary indication of what we think is going to happen. This is in advance of approval of the management plan. But that has been released as an initial indicator.

Mr. Gary Lunn: Well, I guess what I would ask that you consider doing is... And you talk about these other plans that require ministerial approval—we can get into that in a minute—the ones that have to go there, or the ones that contradict what's being recommended by the scientific branch—is that right?—ones that are—

Mr. Barry Rashotte: If the industry or the consultative committee recommends a TAC higher than the science recommendations, that would be considered by the minister.

Mr. Gary Lunn: Okay. Those have to go to the minister in 13 weeks. Obviously this stuff is going to the minister beforehand. When you release these projected numbers, dates, and openings to the government, is it possible to make it public information, so these people can prepare?

I don't think a month is good enough is what I'm saying. I appreciate that may change right up until a month or even days before, but I think they need more lead time than that. I would ask you to consider that in your future discussions. And even your goal... I think in many cases some of these people need more lead time than that.

Mr. Barry Rashotte: Well, we're getting representation on both sides of that. The month is kind of crunching everything in there and the nine-and-a-half-week lead time could cause some problems, as it is in the Gulf of St. Lawrence for groundfish. Industry is proposing that be shortened, not lengthened.

Mr. Gary Lunn: Okay.

Mr. Barry Rashotte: There are some plans that we'll probably have out three months before the opening.

Mr. Gary Lunn: All right.

Mr. Barry Rashotte: For 1999 there are some that will be the day before until we get into the new cycle. Again, this is the first year, and regions and all DFO staff responsible will remain accountable to try to meet these targets. I think we can improve the system more as we go along and see if we can adjust some of the timelines.

Mr. Gary Lunn: So the goal is to provide as much lead time as possible to all these stakeholders, if you can.

Mr. Barry Rashotte: Yes.

Now, there a lot of things that slow this down, as you know. There are the consultative meetings that take place, but then there's a lot of lobbying following the consultations, which everyone gets involved in. That kind of stretches it somewhat. These are not just timelines for the department to follow. We've talked these timelines over with provincial officials to sensitize them to, “Look, we have to meet these timelines if we want to do this for the client, the industry”. So we're hoping they don't circumvent those timelines to lengthen our process.

It's not just a timeline we have to make. Industry has to do their job when the consultations are scheduled—that's when they make their voice known—so we can get on with announcing the plan. I'd like to emphasize this. These timelines are for all the stakeholders involved in getting the plan out.

The Chairman: Wayne.

• 1025

Mr. Wayne Easter: This is certainly a major step forward in terms of getting information out there. It's somewhat along the lines that the committee has recommended. I can't imagine a system like the system was, in which you'd announce a management plan the day before. I come from a farm background and I can't imagine waiting until the day before. You have to get your equipment geared up, and so on. So it is certainly a major step forward, and, yes, there will be some bumps along the way, but at least it's going in the right direction and I think you should be congratulated for that.

The area of concern I have is that there are a number of plans that require ministerial approval. If there's one thing I don't want to see, that's the bureaucracy surpassing the political process, because the minister is obviously always accountable at the end of the day for the decisions made down through the line.

So if a decision is being made in, say, Moncton or Halifax, or wherever, in terms of fisheries and management, what procedure is there for assuring that the minister knows? Though he may not have to give approval, he certainly has to have knowledge of the decisions that are being made, because he or she could potentially have to answer for that. There may even be questions in the House; you never know.

Mr. Barry Rashotte: The process does involve prior notice to Ottawa, to the minister, prior to announcements of all plans. So there is an information note that at least goes into the system prior to the announcement.

Mr. Wayne Easter: All right. Thanks.

The Chairman: Are there any other questions?

Yvan?

Mr. Gary Lunn: You only get five minutes, Yvan.

[Translation]

Mr. Yvan Bernier: Several issues have been raised. For starters, I'm sure you're all familiar with the reports released by the Standing Committee on Fisheries over the past two years. As Wayne pointed out earlier, all of our reports, whether they concern the East Coast, the West Coast, the north or the south, mention the fact that fishery industry representatives want DFO to change the way it manages its plans and sets TAC levels.

If I understood correctly your responses this morning to the concerns expressed by industry people across Canada, you will be trying to respond at certain specific times. I asked you earlier to show me your timetable. That's not a lot to ask for, given the dissatisfaction noted.

I've given you some suggestions and I've tried to be constructive. I'd like to see DFO's timetable, as well as its 13 management plans. I would also like to see a table outlining your different fishery management plans. Why does this still seem to be so complicated? How can fishers get involved and will they ever have the impression that someone is listening to their concerns? The method used to set TACs is still a problem. People always compare themselves to fishers in other regions. Why is the TAC for cod in the area south of Newfoundland higher than the TAC for the southern portion of the 4T zone, for example? These are questions that I heard last summer, along with others about the opening date of the fishing season and about the method used to set TACs. The grumbling continues.

Could you make your timetable public? And what about the table outlining the different fishery management plans? People would like to express their views and discuss this with full knowledge of the facts. What's the problem and why aren't people being involved in the decision-making process?

• 1030

[English]

Mr. Barry Rashotte: I'm not quite sure where to start, but where people and all stakeholders, all concerned individuals or communities, input basically is in the consultative process that has been developed for each of the major species. These consultation processes still take place at the regional and local levels. So that's where all the points of view are considered.

In terms of the question on the difference in the TACs here versus others, as you know, a few years back we introduced—I'm talking groundfish here—the Fisheries Resource Conservation Council, which does provide third-party advice on TAC levels to the minister. The process also includes, as you would expect, recommendations from the science sector of the department for each of the stocks, each of the TAC sets.

In most cases, the minister accepts the TAC levels recommended by the FRCC. There have been a few examples where the minister of the day has not accepted the TAC levels. The first one I can remember is Minister Tobin when he closed Unit 1 redfish. At that time the council was recommending a TAC of 6,000 or 9,000 tonnes in the gulf. Due to the uncertainty, due to our new emphasis on a precautionary approach, the minister, in discussions with departmental officials, fisheries management, and science, decided to close that fishery.

Recently, last year, Minister Anderson did not accept the TAC level recommendation for 4S-3PN cod. The FRCC recommendation was 5,000 tonnes and the minister set it at 3,000 tonnes. That also was based on his view of the science of that stock and looking at both sides, the recommendation from the FRCC and the recommendation from science and fisheries management in the department.

If you wish, I can quickly list the 13-odd plans the minister will consider for 1999. This list contains the ones that will be going to him. As I said, if other plans come in where they're going to issue new licences for those kinds of change to policy, those plans will also have to come.

We've talked about Atlantic groundfish. That has been approved by the minister. There are also Atlantic salmon; 3PS scallop, because of the Canada-St. Pierre and Miquelon issues; seal, because of the controversy; snow crab, areas 20 to 21, 22 and 24; bluefin tuna—this is an internationally set TAC, so he deals with that; rock crab in 23 and 24, 26A and 26D—these are all one plan, so don't count them as four; Pacific salmon north; Pacific salmon south; herring in the Pacific; rockfish, hook and line; Pacific hake; and I've also got bowhead whale, which is the native... Those are the ones we expect to go to the minister this year. There could be others.

I'd like to emphasize that there are tables, a package, that show the minister, the ADM, and the regions, and there are roughly 13 that go to the minister, about the same that go to the ADM, fisheries management and—lost count—about 80 or 90 that are done in the regions.

The Chairman: Peter.

Mr. Peter Stoffer: Thank you, Mr. Chair.

Again, I echo the sentiments of my colleague from P.E.I. The fact that there is a move to initiate some sort of a plan—and we can disagree as to whether the plan is good or not—but at least to give advance notice to the people in the industry, far more than 24 hours, is a great improvement. But I do agree with my colleague from the Reform Party that you'd need more than a month; 30 days may be something. But I would say you'd need at least two months, because if you're getting loans and repairing gear, or rescheduling your own family life, whatever, I would say you need at least two months in order to get that together.

• 1035

On page 2 of your document—I want to digress very quickly. I went to a meeting based on fisheries management, and Neil Bellefontaine, the regional director, was there, Brian Giroux, representing the Scotia Fundy Mobile Gear Fishermen's Association, was there, and Dr. Jeff Hutchings was there. There were about 130 people from the fishing industry mostly—BIO was there—and the perception was that there was this incestuous relationship between the regional director and Brian Giroux. The reason I say this is because when I asked questions of Neil Bellefontaine, Brian interrupted almost every time. So I had to say, “I didn't know you were the appointed director.”

When you say “industry”, I just want to throw something up. You say industry continues to stress the need for a stable approach, and you note the fact that they also argue for better fisheries because they could lose some revenue in sales. If I could change “industry” to read “coastal communities”...if you don't have a good plan, it would not only be revenue and sales; they'd lose their jobs and their homes.

So, first, who in the industry is being consulted? When you say “industry”, I think of High Liner Foods, I think of Seafreez, I think of Fisheries Products International, and I think of the smaller core groups. The reason I say that is because in the recent shrimp allocation, the additional 28,000 metric tonnes, the 14 licence holders who hold 17 licences received all the shrimp. Towns like Mulgrave were cut out of it and Fogo Island Co-op were cut out.

The reason I'm saying this is because I suspect, and most fishermen reading this document would suspect, that there's a handful of people in the industry who are influencing the decisions at the regional level, and that's why they want approvals done at the regional level, because they would have more influence. I'm saying that because it's what they're telling me. Your turn.

Mr. Barry Rashotte: What we've entered into here is what we call an integrated fisheries management planning process. This is somewhat different from what we had a few years ago, where we just dealt basically with the major stakeholders, the fleets that are involved. Under the consultative process we've implemented, all interested parties have a voice at the consultations, whether that's directly sitting around the table or having a representative talk for them. I chair a number of Atlantic-wide committees, and there's always a chair for the observers to come to the table and speak on the issues.

I can't tell you how regions handle their advisory committee process. In most regions it's quite complicated, where they have separate consultations with all the groups. For example, in Newfoundland they're looking at the new crab plant, and the senior managers and the crab people in Newfoundland meet with each fleet sector separately. Then there's a consultative meeting on which they're going to have a seminar this year where everybody is invited. This will include representatives from Nova Scotia who have recently made application for access to some areas on the nose and tail of the Grand Banks.

So if there is a stakeholder who cannot make his views known he should make this known to us so that we can rectify the situation. But I'm not aware of that being the case. There may be people for whom, as you say, the decision doesn't reflect what they want, and therefore I always hear, “They didn't really consult with me; they just let me speak and ignored it”.

Mr. Peter Stoffer: I'm not saying they didn't have the opportunity to speak, because through your communications secretariat—which, by the way, is a great program on the east coast, and a woman there, Wendy Williams does a fabulous job—everyone has the opportunity to attend the meetings and to speak. It's the perception in most of the coastal communities I've toured and been involved with that industry—and when you say industry, those are the big players, the Henry Demones, the Bill Barrys—influence... You saw it right there. The perception was there. Neil Bellefontaine was right there with Brian Giroux of the mobile gear fleet. They were literally joined at the hip.

So the perception is there that they have a much greater influence on decision-making than the majority of coastal communities and fishermen in those areas, and that's the reason I say that.

My last point is that in the management plan, for example, on the krill fishery...the minister made the right decision in cancelling the krill fishery. But as I said in the meeting we had with DFO the other day, if it was such a great idea to cancel the krill fishery this time, why would you not have put in a three- to five-year moratorium on the krill fishery until you can get all the scientific data? Science isn't based on something they study in one afternoon. It's a long process. Why wouldn't you involve a plan that prevents the krill fishery for an extended period of time?

• 1040

Mr. Barry Rashotte: Technically there is that plan. When the minister cancelled the krill fishery on the Scotian Shelf, he also stated that he would not approve any new fisheries for Four-H species until a policy is developed on that issue. Right now there are no new exploratory, experimental fisheries for any Four-H species. The difficulty is defining what a Four-H species is, on the Atlantic at least—I won't speak for the Pacific—until this policy is developed. There will not be a krill fishery on the Scotian Shelf until there is a policy developed. I believe Scotia-Fundy is entering into some major consultations this year on the ecosystem and Four-H species, which will feed into a national review of this issue with the other regions.

The Chairman: The Nunavut member has sat here very patiently for an hour and forty-five minutes waiting for her turn. After Nancy is done, if there are some quick questions around the table, Peter, we'll get back to you. Nancy.

Mrs. Nancy Karetak-Lindell (Nunavut, Lib.): Just following up on what Peter was saying about the different levels that approved different plans, is there a process set up so that if a large majority of, let's say, those small fishermen felt the plan was very much against... Is there an appeal process to the next level? Has that been set or is a decision final? For example, take the regional director's approval of a certain plan. Is there a process to go to the next level? Let's say a large majority of those small fishermen are really upset with the decision made.

Mr. Barry Rashotte: Again, the people who do not like the announced plan or the measures within it usually do end up going to a higher level by writing the minister.

Mrs. Nancy Karetak-Lindell: But there's no set—

Mr. Barry Rashotte: There's no formal, set appeal mechanism to review plans that people don't like. All I can say is in the case you're talking about, the RDG is responsible; he's accountable for those plans. If there is a large element out there that is not accepting what has been done, I think he will realize that and in the next cycle see if those issues can be addressed in a better way. The result may be the same, but at least those sensitivities would have to be addressed in the development of the next plan.

Mrs. Nancy Karetak-Lindell: Thank you for the plan on Nunavut at the end of your statement. I have a couple of questions on that. In the middle of page 4 you say the NWMB established a 500-tonne quota for P. Montague. Who is that?

Mr. Barry Rashotte: There are two species of shrimp that are fished. There is pandalus borealis, which is the major one that's fished up and down the coast. There's another—

Mrs. Nancy Karetak-Lindell: I thought it was a person.

Mr. Barry Rashotte: No, it's a species of shrimp that traditionally is the principal shrimp in the Hudson Strait-Ungava Bay area, and there's a 1,200-tonne quota in the plan. Recently it has bloomed, and it has now gone out into some of the other shrimp areas. Around Resolution Island, inside the Nunavut Settlement Area, the board wrote to the minister and wanted to establish a 500-tonne quota in there out of the 1,200. They established it and the minister agreed, basically.

Mrs. Nancy Karetak-Lindell: This is my last question. My office could probably phone this one in, but I know there are 17 existing licences for the northern shrimp and we have one and a half. I know Peter mentioned some of the other ones, but if we could get a list of who the other 15 and a half are... I think we have it somewhere in our records.

• 1045

Mr. Barry Rashotte: I could leave you with a copy of the 1997 to 1999 management plan. There is a list in there.

Mrs. Nancy Karetak-Lindell: Okay, thank you.

The Chairman: Do these other 17 and a half licences in Nunavut area support or do anything to improve the economy of the area, or do they simply go up there and sail back to another port? This is something I would be interested in. Does Nunavut receive any economic benefits from those other licences that fish in their waters?

Mr. Barry Rashotte: The short answer is no. There are 17 licences, 14 licence holders. All 17 licence holders have quotas in all seven shrimp fishing areas, which extend from Davis Strait, far north, down to 3K, which is off the northeast coast of Newfoundland. The majority of the shrimp right now, the largest quotas, are in the southern area.

Up until a couple of years ago all 17 licence holders received an equal share of the quota that was set aside for those 17, meaning that the one and a half licence held by Nunavut or the licences held by the LIA licence holder have equal access in the south. So they have a large quantity they fish in the south for their benefit.

A couple of years ago, with the temporary allocations, the northern licence holders—I think six of them hold seven licences—were given a 6,100-tonne additional quota in area 5, which is off the coast of Labrador. Because of their collective adjacency to area 5, even though the one and half licence held by Baffin interests isn't adjacent, they all shared in this 6,100 tonnes off area 5. So those six licence holders have more quota this year and last year than some of their counterparts from the south. They have about 900 tonnes more quota.

The Chairman: Maybe Peter is going to ask the thought I have, but when Fogo Islanders were looking for licence, I think we had the number 23 before the committee—23 licences.

Peter, maybe you want to follow up on that.

Mr. Peter Stoffer: Because they're smack in the middle of zone 6, what the Fogo Island Co-op was basically looking for was if there was going to be an increased allocation of 28,000 metric tonnes, which there was, all they wanted was 3,000 tonnes of that for their co-op, and they were shut out. Mulgrave in Nova Scotia wanted 2,000 tonnes. The 14 existing licence holders who hold 17 licences have, in everyone's perception, a very generous amount of shrimp already allocated; yet the 28,000 addition tonnes were divided up among them.

For Fogo Island Co-op and Mulgrave, I guess the question is why? Why would you give people who already have generous...

I'll clarify that. Even Mr. Baker from Gander-Grand Falls, who was here before, has indicated that Newfoundland may not have the capacity to catch all the additional shrimp they received, and Mulgrave has been contacted, and so have people down in Canso and in other areas, for additional ships to go up there and catch the additional resource because they might not have the capability of catching the extra.

My question is, why would you not share the additional resources to create more economic input around?

Mr. Barry Rashotte: First of all, two or three years ago when we first made increases in the stock there were a number of consultative meetings held, which I actually chaired. There was a special meeting held in Newfoundland—in St. John's, I think—with all the applicants who had applied for quota. The overriding theme that came out of those meetings was that those adjacent to the resource should have priority access, which the ministers subsequently agreed to, and we've used that concept in the sharing in all the other stocks in the Atlantic basically to date. Those adjacent get temporary access to those increases.

• 1050

For the northeast coast of Newfoundland, the minister decided he'd address the adjacency in two ways. First, he gave a special allocation to the SABRA, the St. Anthony Basin Resource Area, where Fogo Island is located, in that 3K area. Also, in the first year, he provided 100% of the increases to adjacent inshore fishermen. The second increase took place last year, and he provided 90% of that increase to adjacent inshore fishermen. That also took in fishermen from Quebec based in 4S, in the gulf; 4R, on the west coast of Newfoundland; and 3L, to the south of 3K. Under these two allocations, he believed he addressed the local adjacency issue. The number of fishermen involved in Fogo Island were core and were eligible to get those licences.

From the numbers I just quoted, you can see that the offshore only got 10% of the increase last year, and the quota doubled. The year before that, they didn't get any in that area, so the perception that the existing licences got the large share is not right.

Secondly, as in the crab fishery in the gulf, in the shrimp fishery in the gulf, and in the Scotian shell shrimp fishery, should the TAC go down in any of these fisheries, the temporary ones will be exiting until it goes up again. Given that the development of the fishery was by these licence holders, and that they made the capital investment, etc., in this fishery in order to develop it, it was felt they should at least get something. The minister believed that 10% was the number in area 6. What that was based on in his mind, I couldn't tell you, but it was equitable.

Mr. Peter Stoffer: I do stand corrected, but the fact is that 5,200 metric tonnes—I believe that was the figure—went to the existing licence holders, while the rest were as you say. I guess my concern is that if that 5,200 metric tonnes was based on adjacency, and if 3,000 went to Fogo Island and 2,000 went to Mulgrave, you could have put a lot more people to work. But that 5,200 went to the additional, existing licence holders who, as you said, put an investment into it and everything else. Indications are that they may not have the capacity or capability to catch it all and will therefore have to get outside provinces to come in to help them with the resource. The reason I say this is that Mulgrave has the only shrimp peeling process plant in Nova Scotia, but it's completely shut out of the allocation.

You talked about adjacency. When I think adjacency, I think of where you live. Nunavut should have a right to turbot and shrimp long before anyone else, so that its people and communities can provide for their families from the resource that's right off their shores. But Fogo Island is smack in the middle of area 6, and they were shut out. That's the frustrating part to them.

Mr. Barry Rashotte: They were shut out of an allocation directly to them, but participants did benefit from the sharing. The perception that the fleet could not harvest the quantities was not with the offshore, existing licence holders. Obviously, they could. As I said, they have seventeen licences. To make those vessels economical, I believe they're only using twelve this year. They had to double up quota just to make the vessels viable.

The concern was that the existing inshore sectors that got in couldn't harvest it. They did harvest it, and I believe there are something like 300 temporary licences issued to core fishermen in a number of areas—3K, 3L, 4R, 4S—that are benefiting from that sharing.

Mr. Peter Stoffer: When is the next allocation?

Mr. Barry Rashotte: We receive the science for 1999 at the beginning of March, and we're planning a northern shrimp advisory committee meeting for St. John's the week of March 8.

Mr. Peter Stoffer: When will the final decision be made on allocations?

Mr. Barry Rashotte: It will be following that committee meeting, if there are recommended increases in the TAC, which has yet to be determined. It will have to go to the minister for approval, I would assume, because we're going to get a lot of requests for access.

Mr. Peter Stoffer: Can I put my plug in for Mulgrave right now?

• 1055

Mr. Barry Rashotte: But if there are no TAC increases, we have a plan for 1999. This kind of relates to the first issue I talked about, on the cycles.

One of the other ways of streamlining things is multi-year plans, because a lot of things don't change from one year to the next.

The Chairman: Thank you. We'd like to conclude our meeting this morning. We're five minutes ahead of schedule. It was certainly very informative. We'd like to thank the witnesses for the expertise they showed. We probably didn't all agree with the answers we got, but they were here.

It's interesting. I just couldn't help but think, when I guess Mr. Bernier brought up this question on values of licences, that some of these licences that sold for $40,000 or $50,000 or $100,000, not more than a generation ago were only worth 25¢. So there has been a rapid acceleration in the value and the intensity with which we look toward the fishery, and I know it's a big problem. There aren't too many 25¢ licences left around any more. But even with the price the Government of Canada charges for them on an annual basis, it's a pretty valuable resource we have.

Thank you for coming.

Mr. Gary Lunn: Could you leave a copy of the plan with the clerk and maybe he could make us copies?

The Chairman: Is the plan published?

Mr. Barry Rashotte: I could send you some copies.

The Chairman: Thank you for coming and have a good day.

The meeting is adjourned.