FOPO Committee Report

INTRODUCTION

On January 30, 2003, the Fisheries and Oceans Committee adopted the First Report of its subcommittee on Agenda and Procedure, which recommended, “that the Committee undertake a study into issues related to the Atlantic fishery.” The Committee agreed that the study be broad rather than narrow in scope. Further to that decision, on February 13, 2003, the Committee adopted the Second Report of its subcommittee on Agenda and Procedure, which recommended, “that, in relation to its study on the Atlantic fishery, the Committee travel to the Atlantic provinces.”

From May 5 to 9, 2003, the Standing Committee on Fisheries and Oceans travelled to Eastern Canada and held meetings in Gaspé, QC, St. John’s, NL, Halifax, NS, and Moncton, NB. A further meeting was held in Ottawa on May 14, 2003 to hear additional witnesses.

The Committee identified the following five core issues for the focus of its visit:

•	The Atlantic Fishery Policy Review (AFPR);

•	The Fleet Separation Policy, the owner-operator principle, the concentration of licenses, and the corporatization of public resources;

•	The recent ministerial decision to close the cod fishery in the Gulf of St. Lawrence and northeast of Newfoundland and Labrador;

•	The management of marine mammals and the recovery of depleted fish stocks; and,

•	The role and the state of DFO science.

Witnesses took advantage of the visit to bring a number of other issues, some new and some revisited, to the attention of the Committee. These included:

•	DFO’s consultation process in general;

•	Snow crab allocation for 2003;

•	Environmental issues including the development of a quarry and marine terminal in the Digby Neck area of Nova Scotia, the effect of the Confederation Bridge on shellfish stocks, seismic exploration, and marine dumping of munitions; and

•	Conservation of Atlantic salmon.

ISSUES

Atlantic Fisheries Policy Review

Witnesses expressed concerns about the Atlantic Fisheries Policy Review (AFPR), relating both to process and content. For example, there appears to be a contradiction between the Department’s intentions and its actions. While the draft Policy Framework Document, The Management of Fisheries on Canada’s Atlantic Coast, states “the government will continue to replace strict top-down management with co-management,” the Department continued to act in its traditional command and control mode in 2003.

Witnesses also described an “elitist” philosophy, which seemed to exclude the input of stakeholders. An example, although not directly related to the Department, is the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) process that has recently designated two cod populations respectively as “endangered” and “threatened.” This has implications for the management of these populations under the Species at Risk Act (SARA). Despite the affirmation in the draft Atlantic Fisheries Policy Framework that resource users will be allowed to play a larger role in decision making and to take greater responsibility for resource management decisions, this is not reflected in the COSEWIC/SARA process, even though it will have serious consequences for fishing communities. These processes are viewed as eroding the authority of the Minister of Fisheries and Oceans.

Another issue concerns the Fleet Separation Policy.¹ Although this policy is regarded as a cornerstone of the inshore fishery, it is not mentioned by the draft Policy Framework. Witnesses recommended that a new Atlantic Fisheries Policy Framework (AFPF) reiterate the government’s commitment both to the fleet separation policy and to the owner-operator principle and that the AFPF should identify three areas where the owner-operator principle could be made more flexible without undermining the intent of the policy:

•	Temporary arrangements to facilitate intergenerational transfers;

•	Partnering between heads of enterprises; and

•	Qualified designated operators for heads of enterprises with a long-term attachment to the industry.

Another deficiency of the proposed Atlantic Fisheries Policy Framework identified by a witness is that it addresses only the harvesting side of the fishing industry even though the processing industry is a primary stakeholder, especially in light of its involvement with the development of the shellfish industry. Most of Canada’s production is exported and the global marketplace places significant demands on the continuity of food supply, food safety and traceability. In the view of the witness, the processing sector should therefore be considered an integral part of the strategic development of the Atlantic fishery industry.

Some witnesses noted that, at the time of discussions on the Atlantic Fisheries Policy Review, they had asked that the powers of the Minister be clearly set out in the Policy in order that it be known when and how he can act. In fact, the Minister’s powers are set out in the Fisheries Act. Section 7 of the Fisheries Act gives the Minister the absolute discretion to issue fishing licences. This degree of power is unique amongst ministers of Canada’s government. Section 43 gives the Governor in Council (rather than the Minister directly) the power to make regulations affecting virtually all aspects of the management of fisheries. However, sections 34 to 42 also oblige the Minister to protect fish stocks and their habitats. It must be kept in mind, however, that the resource belongs to the people of Canada and that the government is the steward of the resource on their behalf.

A number of witnesses proposed models for the future development of the fishery. These included, on the one end of the scale, the Icelandic model, where the day-to-day management of the fishery is left in the hands of the industry and where the Ministry, the Directorate of Fisheries and the Marine Research Institute are responsible for policy, setting total allowable catches (TACs), monitoring and enforcement and science, but do not micromanage the industry. The Icelandic model, however, is based on the individual transferable quota (ITQ) system, which is not accepted in many fisheries in Canada. Other witnesses advocated community-based management or co-management as an alternative to ITQ-based management. Although community-based management has merits, it may also have drawbacks, particularly as it may diminish the ability of the direct stakeholders, the fishermen, to conduct their business as they best see fit. The Committee agrees, however, that a model or vision for the development of the fishery is a subject that deserves further serious discussion.

Finally, on this trip as on many others, we have heard from witnesses who have told us that, while DFO consults, it does not listen. The Committee urges the Department to make its discussions meaningful.

Recommendation 1

The Committee agrees that these issues require serious consideration and therefore recommends:

That before finalizing the Atlantic Fisheries Policy Framework, the Department of Fisheries and Oceans conduct a further round of direct, timely and meaningful consultations with stakeholders, including public forums with fishermen themselves. The Department should complete this round no later than May 31, 2004.

Fleet Separation Policy

In 1979, the Department of Fisheries and Oceans introduced what became known as the Fleet Separation Policy, in response to concerns in Atlantic Canada about corporate concentration of fishing rights. One of the objectives of the policy was to separate the harvesting and processing sectors of the fishing industry, particularly in the inshore fisheries (vessels less than 19.8 m (65’) LOA). Under the policy, fish processing companies would not be allowed to own fishing licences or to establish vertically integrated operations. The intent was that the benefits of the fishery should be broadly shared up and down the coast.

The Committee heard strong support for not only maintaining the Fleet Separation Policy but also for closing loopholes that have contributed to the erosion of the owner-operator and fleet separation principles. There is an overwhelming desire to maintain the fishing industry anchored to communities and not to allow concentration of the industry in the hands of a small number of corporate investors to the detriment of social and economic well-being of coastal communities.

Loopholes, such as trust agreements, undermine the intent of the fleet separation and owner-operator principles by separating ownership of the title of fishing licences from the “beneficial use” of the licence. Witnesses maintained that such loopholes could be readily closed by making the owner-operator and fleet separation policies part of the regulations under the Fisheries Act.

A somewhat related issue was raised by the Association québécoise de l’industrie de la pêche. The share of northern shrimp landed in Québec has fallen from a traditional value of 20% to 5%, and possibly as little as 2% of the total harvest. A major factor in this was Clearwater’s sale of its processing plant in Matane, QC, to a group of investors, while keeping the boats that it used to harvest shrimp in the North and its licences. Because Clearwater kept an address in Québec, it appears that there are still nominally two major shrimp permits in Québec; however, the shrimp caught under those licences is not destined for Québec but is landed elsewhere.

The Committee believes strongly that the economic and social benefits of fisheries resources should flow to adjacent and dependent coastal communities rather than to absentee investors. However, it also recognizes that in some circumstances it may be beneficial for fishermen to establish their own processing operations either individually or as cooperatives. It is essential, however, that any such “flexibility” be limited to prevent excessive corporate concentration of the resource.

Recommendation 2

The Committee recommends:

That the loopholes in the owner-operator and fleet separation policies described previously be closed by making the appropriate regulations under the Fisheries Act, so as to prevent undue corporate concentration of the resource.

Closure of Newfoundland and Labrador and Northern Gulf of St. Lawrence Cod Fisheries

On April 24, 2003, the Minister of Fisheries and Oceans closed cod stocks in the Gulf of St. Lawrence and northeast of Newfoundland and Labrador. Earlier this year, the Newfoundland and Labrador All-Party Committee on the 2J3KL and 3Pn4RS Cod Fisheries had recommended against a complete closure of these fisheries in its report Stability, Sustainability and Prosperity, Charting a Future for Northern and Gulf Cod Stocks, tabled on March 17, 2003. The Standing Committee on Fisheries and Oceans supported, in particular, the first two recommendations of the All-Party report which called on the government not to impose a moratorium on the 2J3KL and 3Pn4RS cod stocks and instead to implement a series of measures to assist with the recovery of both stocks.

In addition, the Fisheries Research Conservation Council (FRCC), the Minister’s own arm’s-length advisory body, also recommended against complete closures of these stocks, arguing that such action would likely do more harm than good. In the view of the FRCC, the modest presence of fishermen was desirable for stewardship, for responsible fishing, and to gather intelligence about what was happening on the water.

During the Committee’s hearings in Atlantic Canada, many witnesses criticized the moratorium on these fisheries and asked that the decision be revisited. They pointed to the hardship inflicted on fishing communities and to the strain placed on the relationship between the governments of Canada and Newfoundland and Labrador.

Witnesses also asked for measures to ease the impact of the closures, including extension of EI benefits, an early retirement program and special adjustment and assistance programs geared to addressing the special needs of women. Other witnesses argued for a continuation of recreational fishing opportunities.

The Committee stands by its earlier position, supporting the Newfoundland and Labrador All-Party Committee recommendations for an index and sentinel fishery only in 2J3KL and for a limited, hook and line, commercial fishery in the northern Gulf of St. Lawrence. The Committee notes that these recommendations closely parallel those of the FRCC. Both of these bodies recommended other significant conservation measures to rebuild the stocks.

A number of witnesses argued in support of a recreational cod fishery in Newfoundland. Although, the Committee supports recreational fishing in general, recognizing that there is a public right to fish and that the recreational fishery makes a valuable contribution to the economy, the Committee agrees with both the All-Party Committee and the FRCC that recreational fishing should not be allowed on the Newfoundland and Labrador and northern Gulf cod stocks until such time as they have recovered sufficiently to permit a modest commercial fishery.

Recommendation 3

The Committee recommends:

That the Minister of Fisheries and Oceans revisit his decision to impose a moratorium on the 2J3KL and 3Pn4RS cod stocks and that the Minister give serious consideration to the conservation measures recommended by the Newfoundland and Labrador All-Party Committee and the Fisheries Resource Conservation Council.

Marine Mammals

The large populations of seals, particularly harp and hooded seals and increasingly of grey seals in the Gulf of St. Lawrence, remains a major concern. The Standing Committee on Fisheries and Oceans addressed the issue of seals in June 1999 in The Seal Report.² In this report the Committee made a series of recommendations covering science, barriers to trade, regulations, public awareness, trade and promotion, management plans, and monitoring and enforcement.

The first recommendation was that the government establish an expert panel to be tasked to evaluate the state of scientific knowledge concerning seals and to develop a long-term strategic reduction and utilization plan. That panel submitted its own report³ in the fall of 2001 with a series of recommendations focused primarily on the scientific and technical aspects of seal management.

The FRCC has repeatedly raised concerns over the impact of seal predation on the recovery of cod stocks and has recommended both seal exclusion zones and the reduction of up to 50% of seal populations in specific areas.

During our meetings on the East Coast, we heard many of the same concerns raised this time that we heard four years ago. For example, some witnesses urged that the Canadian government should pressure the United States to open its markets to Canadian seal products and that the government provide support to the industry, especially with assistance on marketing and exports. There is no doubt that there are significant opportunities. For example, with the increasing interest in health food supplements, there is potential for seal oil to be promoted as a source of Omega-3 fatty acids. The U.S. Marine Mammal Protection Act ⁴(MMPA), however, creates a substantial barrier to obtaining access to the U.S. market. In fact, the Committee recommended in its 1999 report that Canada commit itself to removing the barriers within the U.S. MMPA to seal products. The Committee also recognizes that marketing seal products has to be approached carefully due to potential public concerns. Discussions with officials during the Committee’s visit to Brussels in September 2003 indicated that aggressive attempts to promote seal products in European markets would likely be counterproductive.

Witnesses also cautioned that while there should be a clear, decisive and cooperative management plan for the industry that recognizes the viability and vibrancy of the industry, the plan must also be timely and stand up to public scrutiny. The TAC should be such as to not saturate the market and depress prices for seal products.

The Committee believes that the management of seal populations has to be approached through an ecosystem management approach, as espoused by the draft Atlantic Fisheries Policy Framework. (The AFPF designates an ecosystem management approach as “one of the four policy strategies calculated to ensure that conservation is the paramount priority for resource management and that all fishing activities are conducted at sustainable levels.”) The Committee observes that Iceland and Norway are already moving actively to incorporate marine mammals into an ecosystem approach. Iceland, for example, is including the roughly 45,000 minke whales found in its waters in its modeling of the marine ecosystem. The Committee stands by the recommendations made in its 1999 report and calls on the Government of Canada to support an ecologically and economically sustainable sealing industry.

Recommendation 4

The Committee recommends:

That the Government of Canada actively promote the growth of a sustainable seal harvest by working with the sealing industry to expand markets in order to enhance economic opportunities in Atlantic Canada and Quebec.

Rebuilding the Atlantic Fisheries

A number of witnesses emphasized the need to quickly get on track to rebuild groundfish stocks. They offered a variety of proposals including:

•	Developing a multi-year recovery strategy in consultation with the industry;

•	Using more selective fishing gear that would allow juvenile cod to escape;

•	Establishing large marine protected areas on the Grand Banks;

•	Establishing a 3L eco-zone extending west from longitude 50o where, except for crab fishing, all other fishing would be confined to the territorial sea and fishing for cod would be restricted to handline;

•	Establishing closed areas that protect the migratory cycle to address “loopholes” such as cod by-catch in other fisheries;

•	Managing the capelin fishery taking into account that this is a major prey species for cod and, in particular, ending the capelin roe fishery;

•	Establishing wild cod “catch, grow-out and release” programs for the enhancement of wild cod stocks.

The Committee believes that DFO should investigate the feasibility and environmental sustainability of wild cod catch, grow-out and release as a means of enhancing wild cod stocks.

The Committee notes that the Minister of Fisheries and Oceans already has the responsibility for conserving fish stocks and their habitat under the Fisheries Act. Under the Species at Risk Act, however, when a population is listed in Schedule I of the Act, the Minister is obliged to develop a strategy for the recovery of that population.

Licence Buyout

A number of witnesses judged that there were still far too many groundfish licences for the resource to support. The Committee agrees but observes that the effectiveness of previous buyouts has been undermined by the failure to deal with inactive licences.

Recommendation 5

The Committee recommends:

That the Department of Fisheries and Oceans conduct another round of groundfish licence buyouts; and

Recommendation 6

The Committee recommends:

That the Department of Fisheries and Oceans consider the feasibility of cancelling groundfish licences that are deemed to have been inactive for two or more fishing seasons.

Foreign Overfishing on the Nose and Tail of the Grand Banks

The Committee has addressed this issue in two previous reports^5, 6 and will therefore not report on it in detail here, except to say that we found that there is still strong support for the concept of Custodial Management. Another approach that appears to be gaining some ground is the concept of using Canada’s rights over its continental shelf out to 350 nautical miles to place limits on the damage that may be caused to the seabed by dragging.

DFO Science

The Department of Fisheries and Oceans is one of 10 principal “science based” departments within the federal government. Many of the Department’s activities depend on science and there are about 1,600 science staff within its total workforce of approximately 10,000 persons (including the Canadian Coast Guard).

One of the major areas of scientific activity supports fisheries management, not only in terms of stock assessment, but also in terms of activities such as basic biology, population dynamics, oceanography and so on. While there is general agreement that sound science is fundamental to competent modern fisheries management, there are, nevertheless, continuing areas of concern with respect to DFO science. Many of the same issues have been raised during previous Committee hearings. At the same time, DFO faces the challenge of the increase in number and in complexity of issues affecting fish, fish habitat and the oceans.

Some witnesses questioned the independence of DFO science. Many witnesses believe that there is a culture of conformity where DFO scientists are reluctant to speak out or to “rock the boat” and that they are instead encouraged to “keep their heads down.”

One witness, expressed the view that the DFO Science Branch was “too beholden” to Fisheries Management and that it should be more involved with other branches of DFO such as Oceans. The witness also thought that the profile of “marine environmental science” should be elevated within DFO.

There is also a perception that there is a lack of communications, not only between DFO scientists and fishermen, but also between DFO Science and the other branches of DFO. One of the consequences is that there is a “disconnect” between the fishermen and the scientists. Consequently, fishermen do not trust what the scientists say.

Specific complaints included the fact that Newfoundland and Labrador’s share of DFO science funding is proportionately far less than the area of ocean for which the region is responsible and that snow crab fishermen, who help to finance research on the crab stocks, do not get the same information as the Minister.

Various solutions were proposed to the Committee. The most fundamental was that DFO science should have the funding necessary to carry out the research required for sound fisheries management and to ensure the survival of the fishery. Another recommendation was that DFO should use an independent body to carry out stock assessments.

Several suggestions were made to help bridge the gap between scientists and fishermen. For example, it was suggested that scientists make better use of fishermen as their “eyes and ears” out on the water. It was also suggested that DFO utilize fishermen to help monitor fish resources and environmental conditions. Indeed, during the Committee’s visit to Iceland in September 2003, we learned that scientists from the Icelandic Marine Research Institute routinely spend time on fishing boats and employ fishermen to gather data. To some extent, the sentinel fisheries, in addition to providing valuable information, are already helping to bridge the divide between fishermen and scientists.

Other proposals advocated creating positions within DFO the function of which would be to liaise between the different branches and improve communications, and understanding and allowing scientists to present ideas directly to the Committee or the public.

One tangible initiative that is already helping to bridge the gap between scientists and fishermen is the Fishermen & Scientists Research Society (FSRS), which was incorporated in January 1994 as a non-profit organization, with the primary goal of collaborative research and coeducation among fishermen and scientists. To date, the FSRS has proven an extremely effective vehicle for promoting cooperation between fishermen and scientists.

Recommendation 7

The Committee recommends:

That the Department of Fisheries and Oceans properly fund scientific research and that results be made available both to fishermen and the public as soon as they are available.

Recommendation 8

The Committee recommends:

That the Department of Fisheries and Oceans provide some financial support to the Fishermen & Scientists Research Society with a view to promoting mutual understanding between scientists and fishermen; and

That the Department of Fisheries and Oceans consider promoting similar societies in other regions of the country.

Recommendation 9

The Committee recommends:

That, where possible, the Department of Fisheries and Oceans encourage the use of sentinel fisheries and that it ensure that they are adequately funded.

Late Announcement of Fishing Plans

A number of witnesses complained about the late announcement of fishing plans, often after the anticipated start of the season. These delays cause uncertainty for both harvesters and processors. This is a perennial problem on which the Committee has commented before (for example in its 1998 Prince Edward Island Report⁷). Far from improving, the situation appears to be getting worse.

In view of the disruption caused, the Committee finds it deplorable that management decisions on fishing plans come after the fact.

Recommendation 10

The Committee therefore recommends:

That the Department of Fisheries and Oceans establish multi-year fishing plans that would be clearly understood by all the participants and which would be subject to adjustment only in the event of changing scientific information about the status of the stock.

This problem appears to be symptomatic of the overly centralized, hierarchical control structure within DFO. The Committee has previously recommended⁸ that DFO reallocate resources from Ottawa to the regional offices and that the regions be given the appropriate authority to manage resources and make decisions closer to the source.

Recommendation 11

The Committee recommends:

That there be a reallocation of human and financial resources from the Department of Fisheries and Oceans’ national headquarters in Ottawa to the five regional offices and that those five regional offices be given the appropriate managerial authority.

Snow Crab Allocations for 2003

The Gulf snow crab fishery continues to be controversial. On May 2, 2003, the Minister of Fisheries and Oceans announced a new Three-year Snow Crab Management Plan for the Southern Gulf of St. Lawrence. This plan significantly reduced the quota for snow crab in Crab Fishing Area (CFA) 12 and, at the same time, provided 15% of the total allowable catch (TAC) to core fishermen and groundfish-dependant fishermen on a permanent basis. In 2003, this amounted to 2,167t.

One of the rationales for this decision was that the new access would be used to reduce effort in the lobster and groundfish fisheries. In addition, fishing organizations would be involved in administering this new access, in the same way as in the previous year, 2002, including a rotation of access among fishermen.

The new access to the non-traditional crabbers was divided according to traditional shares (adjusted to include the amalgamation of CFA 18 into CFA 12 in 2003). The shares broke down as follows: New Brunswick, 56.5981%; Quebec, 32.2439%; Nova Scotia, 6.0836%; and in Prince Edward Island, 5.0743%.

For 2003, based on a TAC of 17,148 tonnes, the following amounts of snow crab were allocated to core fishermen and groundfish-dependant fishermen:

New Brunswick	1,227t
Quebec	699t
Nova Scotia	132t
Prince Edward Island	110t