FOPO Committee Meeting

     I call this meeting to order.

    I'd like to thank our guests for taking time out of their busy schedules to meet with us today.

    We're studying closed containment salmon aquaculture, and we look forward to your thoughts and your views. The committee members, I know, have many questions and look forward to your presentations. Following that, we'll move to committee members' questions.

    I'm not sure if the clerk has advised you, but we allot approximately 10 minutes for presentations. It's my understanding we have two presentations here this afternoon, and whenever you are ready we'll move directly to your presentations.

    Mr. Scott is going to go first, I believe.

    Mr. Scott, whenever you're ready, please proceed.

    Good afternoon.

    I am here representing the Overwaitea Food Group. We're a chain of grocery supermarkets that do business in British Columbia and Alberta. We have 124 stores. We believe in sustainability. It's the right thing to do, as far as we're concerned, and our customers, we believe, believe in sustainability.

    We have three green goals, which are to sell eco-friendly products, to have zero waste, and to have 100% renewable energy.

    Some of our goals are as follows. We work with BC Hydro in British Columbia on energy-related matters, and today our stores use about 25% less power than they did in the past. We compost in 41 of our stores. We recycle cardboard and have been doing that since the nineties.

    For us, seafood was the next thing that we believed we had to work on. So in 2009 we entered into a partnership with SeaChoice to help us develop our seafood policy. One of our guidelines states that we offer sustainable seafood options and reduced procurement of unsustainable seafood. We want to offer our customers more sustainable salmon choices.

    When we went looking for more sustainable salmon choices, there were very few options available to us. But in 2010 we found a partner to provide us with closed contained salmon; that partner happened to be AquaSeed, and the product they sell is called SweetSpring salmon. It is a U.S. company, so a Canadian company now has to import U.S. fish to provide sustainable seafood for our consumers.

    On the economics of it, the first thing we have to realize is that seafood is one of the most expensive proteins on the market, especially fresh salmon. We currently sell a significant amount of closed contained salmon. While today it is not quite as profitable as farmed penned salmon, it certainly is a viable alternative.

    Our cost for farmed salmon is slightly more than for the net penned salmon that we've sold in the past, but supply and demand play a big role in the costing, the pricing. Closed containment farms now are very small. The two we looked at in British Columbia were too small to even provide part of our needs.

    As the enterprise gets larger, certainly we believe that our cost price for contained salmon, farmed salmon, land-based, will be near the cost that we currently pay for Atlantic salmon. Actually, when we made the deal for the closed contained salmon, it cost exactly the same as Atlantic salmon, but of course it's on the commodities market and supply and demand affect Atlantic penned salmon as well.

    Today we sell more salmon than we did a year ago, and that includes fresh salmon, it includes frozen wild salmon from mostly British Columbia and Alaska, and also closed containment salmon.

    From a customer's perspective, I think they understand the concept of sustainability. They want a grocery store they can trust and they want to be able to trust us around the store, and that would include our sustainable policy around seafood. Do they specifically understand what sustainability means? I think a few do. They understand that we have to acquire products that are sustainable in the long term.

    Customers want salmon. They want it now. They will want it 10 years from now and 15 years from now. They also do not want a season around salmon. Most of the purchases, or 70% of the purchases, are fresh. It's a premium product that's a treat for dinner. If you look at salmon, it's a very expensive protein. This week, as an example, we're selling it for about $18 a kilogram for a fillet, and we're selling New York strip for $11 a kilogram.

     Salmon is a relatively expensive protein, but they want it year round, and they want it fresh.

    As we've moved down the road of selling fresh, frozen, and closed containment salmon, we've actually had no negative feedback from our customers because of the fact that we have less Atlantic penned salmon available for them. They choose the product by quality. They choose it, to some extent, by price. We've had very positive outcomes from our choice to sell sustainable seafood.

    That's pretty much all I have.

    Thank you very much.

    I'm not sure who's next, Ms. Roebuck or Ms. Beukema.

    We'll go to Ms. Roebuck, please.

     Good afternoon.

    I want to thank the chairman and committee members for undertaking this important study and for the invitation to present to you today on closed containment from a market's perspective.

     I'm Kelly Roebuck, the sustainable seafood campaign manager at Living Oceans Society. I'm a representative for both SeaChoice and the Coastal Alliance for Aquaculture Reform programs.

     I'll start with some background on my organization and SeaChoice. Living Oceans Society is a non-profit formed in 1998 and is based in the small fishing community of Sointula on north Vancouver Island. We are the largest organization in Canada focusing exclusively on marine conservation issues. SeaChoice is a natural, sustainable seafood program formed in 2006 by Canadian Parks and Wilderness Service B.C., the Sierra Club B.C., the David Suzuki Foundation, the Ecology Action Centre, and the Living Oceans Society.

    SeaChoice was formed to help Canadian consumers and businesses take an active role in supporting sustainable fisheries and aquaculture at all levels of the supply chain. Working in collaboration with the Monterey Bay Aquarium seafood watch program, SeaChoice undertakes purely science-based seafood assessments. Our business work includes helping food service suppliers such as Albion Fisheries, who will be presenting later today, I believe, and major retailers such as Safeway, Federated Co-op, and Overwaitea Food Group here today.

    I will be presenting to the committee an overview of the market's change that has occurred in North America in the last five-plus years for sustainable seafood, with particular reference to closed containment farmed salmon. Understanding the North American major buyer's sustainability commitments, shifting needs, and seafood buying policies can be challenging, and I aim to bring some clarity on this today. Hopefully available to the committee is the PowerPoint entitled “The Sustainable Seafood Policy Era”, provided beforehand.

    The North American marketplace has seen a recent influx of seafood sustainability messaging from branding, certifications, and eco logos. For farmed salmon in particular, there are a number of certifications in place or in draft from Global Trust, Global Aquaculture Alliance, Aquaculture Stewardship Council, and various organic standards. These are just a few examples of the many. Overall, presently, there are approximately around 70-plus sustainable seafood logos and certifications worldwide.

     I'd like to speak to how we got here today. In 2002, only two major retailers in North America had a sustainable seafood policy of some sort. We fast forward to 2011 and now nearly all but a few do. Within three short years, we now have about 25 major North American retailers with sustainable seafood policies. It is obviously now common practice and part of a retailer's corporate social responsibility ethics. Why is this important to listen to? The large buyer is holding a unique position of economic, social, and political influence. Ultimately, they determine the seafood choices available to consumers. If you refer to the tables in my PowerPoint, you can see that most retailers' sustainable seafood policies are in partnership with the conservation organization, or they at least refer to NGOs for input or rankings for guidance.

    In any case, there is one theme that all of these sustainable seafood policies and NGO partnerships have in common, and that is the common vision. Let me explain what the common vision is. Sixteen conservation organizations from the United Sates and Canada partnered in 2008 to pursue a common vision for sustainable seafood and worked together as the Conservation Alliance for Seafood Solutions. We have heard from companies that there was a lot of competing information on sustainable seafood. They needed consistent advice on how to move forward.

    The common vision for environmentally sustainable seafood outlines six realistic steps that companies can take to develop and implement a sustainable seafood policy. The ultimate goal is to preserve the health of ocean or freshwater eco-systems and ensure a long-term seafood supply for these major buyers. The common vision provides a path businesses can take to move towards that goal, and the organizations in the Conservation Alliance are committed to working with companies as they take steps to achieve it.

     Here is just a quick overview of what the six common vision steps are. In groups such as Overwaitea, this is part of the sustainable seafood policy, as well as those 25-plus North American major buyers I referred to earlier.

    The six steps are: make a commitment to have a corporate sustainable seafood policy; collect data on seafood products; buy environmentally responsible seafood; make product information publicly available; educate customers, suppliers, employees; and support reform to improve fisheries and aquaculture management.

    There are 16 conservation organizations from the United States and Canada, partnered to pursue a common vision for companies. Many of these retailers, as part of the sustainable seafood policies, have also committed to a 100% sustainable buy timeline. For example, what is being publicly announced includes timelines from Safeway, Target, and Overwaitea of 2015. Loblaws has announced 2013.

    Phasing out of unsustainable seafood is a challenge, but retailers are committed to tackling this. The largest challenge is finding a sustainable alternative for red-listed seafood such as farmed shrimp and open-net farmed salmon.

    Open-net farmed salmon remains red, or unsustainable, by the environmental community in North America. Retailers need a sustainable alternative to switch their procurement to. Demand for sustainably farmed salmon, such as closed containment, is high. In fact, demand outweighs the supply right now.

    We are seeing that major buyers in North America are now the driving force behind sustainable seafood. In relation to farmed salmon, we have seen Target and Compass Group Canada, for example, completely remove farmed salmon from all of their locations. Other retailers are changing their procurement over to closed containment farmed salmon, including Overwaitea. The supply for sustainably farmed salmon still does not meet the demand, in which retailers committing to 100% sustainable buy timelines provide a unique opportunity for Canada to become a leader in our closed containment technology.

    Thank you again for this opportunity to speak on this important issue.

    Thank you very much. Now we'll move right into questions.

    Mr. Kamp, let's start off.

    Thank you, Mr. Chair.

    Thank you for appearing before us. We appreciate your information and the opportunity to ask you a few questions.

    At Overwaitea Food Group, it wasn't clear to me whether your salmon choices in your store are completely closed containment or whether you still sell open-net pen Atlantic salmon.

    We sell very little open-net pen salmon product today. We took a marketing and merchandising approach that we would promote wild, frozen, and closed containment salmon. We do have a small amount of Atlantic salmon available today.

    Okay. Is there a reason that you haven't, if it's a matter of principle, given up on that?

    There are a few products that were left in our inventory—mostly smoked—that we currently carry today. It will not be available probably within the next two or three weeks.

    Do you receive complaints from your customers about the fact that you sell farmed salmon that's not coming from closed containment facilities?

    Do we receive complaints? I'm not sure I understand your question.

    You've made this decision, you say, to sell closed containment products, but you still sell some of the others. Was that decision driven by complaints from your customers or from some philosophical position coming from head office? What was the process for arriving at this decision?

    When we partnered with our NGO, SeaChoice, we were advised of a list of products. We made a promise that we would not increase our procurement of those products. In a lot of cases, we completely discontinued them as we found alternatives that were acceptable to our customers. Of the products that we no longer carry, we've attempted to find alternatives. In the case of salmon, we were able to supplement our salmon availability to our customers with fresh, wild salmon, frozen wild salmon, and closed containment salmon. In fact, we've never sold more salmon.

     You also sell Pacific salmon. In fact, maybe it's likely that much of your Pacific salmon comes from Alaska. Is that true?

    It would be part of the supply chain—Alaska, British Columbia.

    Is there any concern that much of that salmon comes from hatchery-raised facilities and is then ocean-ranched and set out into the wild? Is there any concern from you or your SeaChoice partners on that issue?

     I can speak to the methodology that is used when it comes to the wild assessments. Currently the Monterey Bay Aquarium is having a look at their methodology and is currently upgrading and will be putting out a new version soon.

     As part of that new version, there will be updated assessments, including possibly looking at stock-by-stock cases for wild B.C. and wild Alaskan salmon. That would be a consideration in that criteria.

    Okay. Maybe I can ask you a few questions as well, Kelly.

    We've heard the word “sustainability” throughout this study, but certainly today as well. You look for sustainable products. This is what puzzles me a little bit: when it comes to Atlantic salmon, “farmed” equals “unsustainable”, in your view—at least, it ends up on your list of products to avoid. So I guess—

    Can I just clarify?

    Mr. Randy Kamp: Well, let me just—

    Ms. Kelly Roebuck: That would be open-net farmed salmon, not all farmed salmon.

    I think we understand that.

    Let me ask you this question, then. Your decision about sustainability and farmed salmon is based on what facts? I don't want to know just that environmentalists think it's unsustainable. Surely you must base this on some coherent scientific facts, and we would probably like to hear those.

    The follow-up question would be this, if I can leave you with these: how transparent is your process? Your SeaChoice, or you seafood choice, whatever it's called there—sorry—is the guide. It basically says that every Atlantic farmed salmon in the world is unsustainable. So how transparent...? When you make those decisions, are the fisheries involved in this? Do they get to make a case? Do you think there might be one fish farm somewhere, nicely located or something, that might actually meet your sustainability requirements?

     It just surprises me that there would be this sort of blanket decision that every farmed salmon everywhere in the world is now on your unsustainable list. I would just like to know if that process of arriving at that decision is transparent in any way. I mean, is it available to the public, or do we just see the thing we carry in our wallet or purse?

    If you go to seachoice.org, you can download the full assessment with all of the scientific references to do with this particular open-net farmed salmon report that was done by the Monterey Bay Aquarium.

    As I said earlier, the Monterey Bay Aquarium, which has the same methodology that SeaChoice uses for Canadian fisheries and farms, is currently being upgraded to a second version. On an ongoing basis, we do take a look at the list of assessments we have and update them on a regular basis as new information comes in, as new data comes in, etc.

    Now whether it comes with a new methodology.... Currently with the methodology, we have it peer-reviewed. That can include industry and that can include independent scientists, academic scientists, etc. With the new methodology, we are looking at greater stakeholder engagement; that will include from the beginning when we're actually collecting the data, and that will be up until the end when it's peer-reviewed. So there will be greater stakeholder engagement coming, and we do currently have that in place, where we reach out to industry, etc.

    In reference to open-net farmed salmon science in particular, I would refer you to the Coastal Alliance for Aquaculture Reform, which has literature and 50-plus science-reviewed reports that you can download. That's at farmedanddangerous.org.

     Yes, we've seen all those.

    Thank you for your testimony.

    Thank you very much, Mr. Kamp.

    Mr. Donnelly.

    Thank you, Mr. Chair.

     I'd like to thank our guests for appearing today for what I think is an important study of closed containment and its feasibility.

    Mr. Scott, I think you made it pretty clear that your organization is trying to achieve certain goals, and I would say you've done some analysis of why you've chosen to provide closed containment versus open-net farming in your stores. In your analysis, have you decided why you wouldn't choose wild-caught salmon entirely versus including some closed containment as an option? How did you come to that conclusion?

    Is your question why would we need to supplement our wild-caught salmon with closed containment salmon?

     Customers want fresh product year round. They don't accept discontinuous supply as they used to. We sell these year round now, but there used to be a season.

    So we sell as much fresh, wild product for as long as we possibly can. Then we supplement that with frozen, wild-caught product, and then the next choice, when customers want exclusively fresh out of season, is to have closed containment salmon. That's the niche that penned salmon filled when it started in the eighties, the off-season fresh product. Consumers want product year round, so we have to find a method that we believe is sustainable to look after our customers.

    Thanks.

    On the seasonality versus year round, are you noticing any trends whereby more or fewer people are going back to seasonality, or is the trend increasing for year-round products all the time?

    We have never sold more salmon than we're selling today, and customers expect it year round. The season obviously is a big part of that, but customers want all fresh product year round.

    Is the rate of green products in general increasing, whether it's eco-certified or organic? Do you notice a trend over the years?

    Yes. We've been selling organic and natural foods. We went fairly heavily into it at the end of the nineties and in early 2000, and it certainly outpaces the growth of the more conventional supermarket products. And in lots of categories the organic fair trade natural products are in the top ten. Coffee and cereal are examples.

    Do you have a percentage? Do you notice a growth rate? Is it 10%, in terms of a market shift or customers who are purchasing 5% more green or eco-certified products?

    In the last 10 years there has been double-digit growth on the natural, organic products, and low single-digit growth on conventional grocery products.

    All right. Thank you.

    Ms. Roebuck, does your organization endorse closed containment systems?

     With the Monterey Bay Aquarium and SeaChoice, because we need to have peer-reviewed assessments, the one closed containment assessment that has turned out to be a supergreen best choice is the AquaSeed closed containment coho, farmed in Washington State.

    Then when it comes to the Coastal Alliance for Aquaculture Reform, we fully support a transition to closed containment facilities.

     And Living Oceans?

    Living Oceans as well, yes.

    Does that extend to any type of closed containment? Does that extend to, for instance, the AgriMarine system at Middle Bay?

    Living Oceans and CAAR have been closely working with AgriMarine and have had constant dialogue over the last 10 years, and we fully support the improvements they are working towards.

    As for SeaChoice, we hope to see an assessment for AgriMarine in the future.

    Great. Thanks.

    I have a similar question about wild caught versus closed containment. Do you have a stand there, in terms of what you feel is a more sustainable position, or alternative, or option? I think it's pretty clear where you are on closed containment versus open net, but what about wild caught versus closed containment?

    Wild caught is quite complex, for sure. We can't blanket wild caught. It has to go down to stock by stock, species by species, and also to the seasonality of that run. At the moment, based on the assessment of closed containment farmed coho salmon in Washington State, it is the best choice. When it comes to the wild B.C. and Alaskan Pacific salmon, we would be looking at a stock-by-stock analysis in the future, because it varies greatly.

    Okay, thanks.

    In terms of other certification programs that are out there, like the Marine Stewardship Council—MSC certification—can you comment about how that certification process differs from, say, SeaChoice, if you look at salmon?

    That's a good question.

    There's a differing methodology in place, for sure, and it's based on zero to 100, when it comes to the Marine Stewardship Council. You can have a pass at 80 and over, but you can also have a conditional pass with the Marine Stewardship Council of 60 and over. That is a very general difference between us, because we don't have that zero to 100 methodology in place. We are looking at a more consultative methodology in the future, but it would still be based on the green-yellow-red system.

    For the finer details, I would definitely refer to our science team to get into the nitty-gritty of the methodology differences.

    Thank you.

    Thank you very much.

    Mr. Sopuck, please go ahead.

    Thank you very much.

    A quick question for both Mr. Scott and Ms. Roebuck.

    Do you both believe that open-net pen aquaculture negatively affects wild salmon stocks?

    That is a good question, indeed, and I would like to refer to—

    It's the only question.

    Currently, independent science-based assessments do have environmental concerns on the impacts of wild stocks from open-net pen farmed salmon.

    Mr. Scott.

    We follow the advice of our science partner, and they indicate to us that there is concern with open pen farmed salmon. So we have followed that advice, and we continue to find alternate sources for our consumers.

    I didn't ask about the general effects. I wanted specific evidence related to wild salmon stocks.

    Ms. Roebuck, your very general answer did not address my question.

    I'd like to point out that in B.C., net pen aquaculture has been going since 1985, and in 2010 the Fraser River sockeye salmon returns were 30 million, the best returns since 1913. In the report that I have in front of me here, river by river, salmon stocks are either above expectations or where they're supposed to be, and 2011 was considered the best recreational salmon fishery on the west coast.

    I would recommend, to follow up on my colleague Mr. Kamp's point, that general comments about general environmental degradation without evidence to back it up is simply not helpful.

    In terms of the effect of closed containment aquaculture on rural coastal communities, which currently depend on net pen aquaculture, John Holder, who some of you have heard of, made the point to us very clearly that closed containment aquaculture facilities can be moved anywhere close to markets, whereas coastal net pen aquaculture has to be close to, obviously, coastal rural communities.

    Do you have any concern that rural jobs will be lost if and when your wish comes true and net pen aquaculture is banned, and then subsequently closed containment aquaculture moves inland towards markets, where land is cheaper and electricity costs are cheaper?

     First I would like to just touch on the impacts on wild salmon and—

    I don't have that much time, but go ahead.

    Okay. You referred to the good runs for the Fraser River in the last couple of years, but really we can't just look at one particular stock and one particular aspect. As we know, the IUCN has some populations that are on their red list, so there are a number of threatened and endangered species. Just highlighting the fact that the last couple of years have been good for the Fraser River doesn't show the full picture.

    Just to interject, the report in front of me talks about the Skeena, Barkley Sound, and Smith's Inlet as well. So it's not just the Fraser.

     Anyway, continue.

    Okay. But still, that is just a snapshot of different stocks. We have to look at the big picture. There are also some endangered and threatened stocks there.

    As for jobs, a report independently commissioned by the Province of B.C. quoted the net pen industry as having 2,945 direct jobs.

    When it comes to closed containment, those would equate to new jobs, whether in rural areas or in coastal communities. For example, the AgriMarine project, as well as the 'Namgis project, is still on Vancouver Island, so that would keep those coastal communities intact in terms of those jobs.

    I'm very well aware of that, and I simply do not agree with that. John Holder and his company have developed inland aquaculture, closed containment coho salmon aquaculture facilities, in Montana right now. And as I said, there are plenty of places outside the coastal area where land is much cheaper, as is hydro.

    In terms of sustainability of closed containment, it was pointed out to us that land-based closed containment aquaculture involves fairly large cement facilities, so once a facility like that is built, that land use is irrevocably changed to an artificial environment, whereas for net pen aquaculture, the bottom may be affected for a few years, but once the net pen is removed, the bottom recovers. So how do you look at the permanent land use change because of inland closed containment and the moving around of net pen aquaculture and the subsequent recovery of the ocean floor?

    I'd say there's a lot of independent science that would dispute that there is necessarily 100% recovery when it comes to the impacts on the sea floor.

    Secondly, when it comes to...you said Montana, for example. There are also in the lower mainland, in the Fraser Valley, a number of closed containment projects that are starting to come up and be ready as well. So that's still providing a waterway in coastal—

    I don't doubt that given the preponderance of net pen aquaculture in coastal areas right now, the initial closed containment facilities will be built close to those areas, but I will predict that if your wish comes true, there will be a migration of these facilities away from coastal areas.

    Ms. Roebuck, one thing I'd like to ask you about as well is your funding source, the Moore Foundation. That is an American-based foundation, isn't it?

    Yes, it is, and that's not exclusively what is funding SeaChoice.

    I understand that, but as an MP from a rural community, where many of my communities have been victimized by foreign-funded environmental groups, I take a somewhat dim view of foreign dollars trying to influence our resource management decisions. Would you share my concerns?

    I would say that Canada needs to be investing in conservation efforts. Unfortunately, if that investment is lacking, then those conservation efforts could come from a variety of sources.

    One day we'll have a discussion, Ms. Roebuck, about environmental indicators, and we will see where Canada's environmental indicators are going. They're primarily going in a positive direction.

    I think my time is up, Mr. Chairman.

    Thank you very much, Mr. Sopuck.

    Mr. MacAulay.

    Thank you very much, Mr. Chair.

     I want to welcome our guests.

    This is an interesting subject.

    Ms. Roebuck, do you see any place for open net salmon farming?

    I'd also like you to explain the methodology behind your ranking system between the “best choice” and “avoid”. I would have to think “avoid” would not do very much to promote the product. I think Mr. Scott might be the man to answer that, but I would like you to explain the methodology behind this ranking system you have in place.

     Our methodology for all aquaculture is based on five criteria: the amount of wild fish needed for feed, so the fish in, fish out ratio, for example; the risk and impact of escapes from that facility; the risk impact of disease and parasite transfer to wild fish; control of waste and pollution; and the management regime.

    So you're basically telling the committee that you see no place for open-net salmon farming; it should be closed containment or wild.

    The environmental way to farm salmon is through closed containment.

    Okay.

    You also stated in your presentation that you did not have enough supply to meet the demand for closed containment salmon. Perhaps Mr. Scott could respond to some of this.

     I'd also like to know if he has numbers on how this affects when you put a void and best choice.... I would think that in your business overall a lot of open-net salmon is sold in British Columbia. Is this ranking having a negative effect on open-net salmon farming? I understand it's much like organic versus non-organic. Do you find that more people are coming in to your store and saying they want best choice, and they do not want fish from the open-net concept? Do you find much of that, or do you find that it's shifting more to that?

    The customers are coming in looking for salmon. Part of our program is to educate the consumer on what might be a better choice to purchase. We saw a decline in sales when we carried Atlantic salmon, but it was replaced by the sale of more wild salmon and closed containment salmon. We've never sold more salmon.

    I understand, but are the supermarkets you deal with promoting this labelling? Do you find that it has an effect? Is the promotion that's taking place in your operation with SeaChoice changing the attitude of some of your customers? Are you educating your customers that they should not eat salmon from open-net farming? Am I understanding correctly? Is that what you're promoting in your business?

    We promote the SeaChoice ranking of products, and we promote the products that we believe are better. Obviously over time it alters consumers' perception of the various products available to us.

    I expect you feel that the open-net concept for salmon farming is gradually coming to an end. Is that what you expect to see?

    I would say it is a science question. We have chosen to educate our consumers—

    I'm sorry, sir, but I think it's more of a market question. If people are convinced they should not eat something that's produced in a certain climate, they will not. I'm just trying to understand what effect you're having with this labelling.

    We're altering the choices of consumers.

    Thank you very much.

    Thank you, Mr. MacAulay.

    In a follow-up to Mr. MacAulay's question, Mr. Scott, I understand you made a clean shift from open-net pen aquaculture to closed containment aquaculture salmon. There was never a time in that shift that you offered both products.

    That's not true.

    Well, that's what I'm asking.

    We started with education of our consumers. We felt we should let the consumer make the choice. They could buy wild, penned, or closed containment salmon.

    Over the last year and a half, we've seen a decline in Atlantic farmed salmon and an increase in wild and closed containment salmon. We let our consumers make the choice over time, but the amount of Atlantic salmon being sold in our stores got to be insignificant to our total salmon business. When a customer doesn't want a product, then we take it off the shelf; that's just natural in the grocery business.

    Over the last 18 months we've reduced our dependence to the point that when we finish with the bit of smoked product in inventory, we will no longer have any products that will be Atlantic pen farmed salmon. We let the customer make the choice. If they had continued to purchase the product, we would have continued the educational process. But ultimately they vote with their dollars, and in business that's what we chase, right?

    That's what I was asking.

    How much product, in pounds, would you sell on an annual basis? I'm trying to get an idea of what sort of magnitude we're talking about here.

    We are a privately held company, so we don't disclose financial information, but our share of salmon sales within the grocery/supermarket business, as measured by ACNielsen, would be at the appropriate share. In other words, if we have a 10% share of the market, we have a 10% share of the salmon market. We're not disadvantaged, if that's what you're asking, because we've chosen to educate our customers on different choices. We sell our share of salmon, and our salmon sales are up, at a higher rate than the market growth today.

    Thank you very much.

    I'd like to take this opportunity to thank you for taking the time out of your busy schedules to meet with us today and answer our questions. We really do appreciate the information you've brought forward to the committee. It will certainly be very helpful as we go forward with our study.

    On behalf of the committee, thank you once again.

    We'll take a short break while we set up for our next presentation.

    We'll start then. I apologize for the technical problems we've had here this afternoon.

    Welcome to our committee. Thank you for taking time out of your busy schedule.

    I'll let you proceed right into your presentation, Mr. Dean, and we'll follow up with questions after that. Please start any time you're ready.

    Certainly.

    I don't really have much of a presentation prepared. I'll just outline who I am and who we represent.

    My name is Guy Dean. I'm the vice-president and CSO for Albion Fisheries. CSO is the chief sustainability officer. Albion Fisheries is the largest seafood distributor in western Canada, with a head office in Vancouver as well as an office in Victoria, and we have distribution centres in Victoria and Calgary. We basically service all of western Canada, both in retail and food service.

     We mentioned our focus on sustainability. Sustainability has become extremely key and core to our business. We've been involved in and focused on sustainability for over 10 years now. Over the last five years we've certainly noticed a tremendous increase and interest in offering sustainable products within our marketplace.

    Thank you very much, Mr. Dean.

    We'll move right into questions with Mr. Hayes.

    Thank you, Mr. Chair.

    Hi, Mr. Dean. Welcome.

    Just to get an understanding, it states that you work with Vancouver Aquarium's Ocean Wise program. I read up on that, and it indicates that this program was created to educate and empower consumers about the issues surrounding sustainable seafood, i.e., it helps buyers make ocean-friendly buying decisions.

    Can you elaborate a little about what the Ocean Wise program says about open-net salmon technology and its sustainability?

    Certainly, I can provide some insight.

    It's important to note that we are a founding supply partner with the Ocean Wise program, but we're also involved in a number of NGOs: the Marine Stewardship Council; ASC; and SeaChoice. Ocean Wise is just one of the partners we have.

    With regard to the Ocean Wise program, they have established criteria on how they assess fisheries and aquaculture and how they assess the sustainability of those fisheries and aquaculture initiatives. As long as their assessment criteria fall under specific guidelines and meet specific criteria, then, from their perspective, it can be deemed sustainable. They have taken an open-net pen farmed product and deemed it sustainable. There are a whole bunch of criteria that they look at to make those assessments. They're not opposed to it in any way. Some of the criteria they look at are the protein to feed ratio, the impact on benthic environment, the environmental environment, and management of the aquaculture and farming initiative.

    Does your company actually sell and distribute salmon raised in the open-net technology?

    Yes, we do. It is the number one item that we sell.

    You hold a Bachelor of Science in marine zoology. Are you familiar with the open-net technology, and do you have any issues with environmental concerns?

    Yes, you're correct, I have a degree in marine zoology. In fact, my first job within the industry was to help run a salmon farm back in the infancy stage when salmon farming first started. There are well-run companies out there, and managed properly, I believe that open-net and aquaculture are extremely viable food sources.

     When you were actually working in the industry, what was your experience?

    As I pointed out, I started during its infancy, over 20 years ago. We were a bunch of dreamers who thought we were going to feed the masses and change the world by offering farmed seafood. At the time, there was a strong learning curve. We learned a lot about the rights and wrongs and what was correct and wasn't correct.

    Again, that was 20 years ago. For example, what would you do with fish that had naturally died within the pens? Nobody really knew what to do with them at the time. It wasn't until afterwards that permits and actual regulations started and there were specifics on how to discard that product.

    The industry has changed dramatically over the last 20 years. It has become more international in scope. We've gained a lot of knowledge on farming practices from Norway, Chile, and other countries.

    My concerns way back when were predation—how to deal with seals—and the impact on the benthic environment. If you're in a site that doesn't have heavy flush, you could get a buildup of feed and fecal matter underneath the pens, and that is not healthy for fish in general. It's not healthy for the marine ecosystem.

    Obviously, there was the issue of escape. I don't think there has been any clear science-based research to prove that alternate species of Atlantic salmon have been able to interact and reproduce with our natural wild stock. There is the issue of predation and certain river systems being taken over if it got out of hand. At this point in time, it never has, so it's never become an issue.

    Certainly there are other issues that are of concern now. There are biohazard issues, food safety issues, and the debate about sea lice, of course. Really, I'm not a scientist. At this point in time, it's not for me to say. I don't have enough research to gain an opinion or to make a comment on that.

    Thank you, Mr. Chair.

    Thank you, Mr. Hayes.

    We'll go to Mr. Donnelly.

    Thanks, Mr. Chair.

    Mr. Dean, thank you for taking the time to come to the committee to provide information and to answer some questions.

    My first question is whether Albion Fisheries has a position on closed containment.

    Certainly we have. We believe that closed containment is a more viable option and provides far better food safety. By managing the water temperature, the water quality, and the outside environment, we can produce seafood at a far greater rate, at an economical level, versus open-net pens. That is based on the research we have seen over the last two years. In some cases, we can probably produce product 75% faster than in open-net pen aquaculture, depending upon whose data you look at.

    We think it is a more viable option, from an environmental perspective, so we are strongly putting our support behind closed recirculated aquaculture systems.

     Okay, thanks.

    But you mentioned you still carry some open-net products. Is there a reason you are offering closed containment—I think you just outlined that—but why you still continue with open pen salmon products?

    It's important to note that Albion carries over 2,000 different items, and at this point in time, 500 of those items are actually certified as sustainable by the various NGO groups. It's our goal to consistently improve on that number and continue to offer more and more sustainable options to our customers, but it's really our customers who are driving that initiative.

    In the case of farmed salmon, it's really the retail marketplace that is still requesting that product at their counters and on their shelves. Some of the retailers have certainly changed from that.

    With regard to closed containment systems, at this point in time I certainly believe that the industry is in its infancy, and we haven't found any viable options that have been able to offer product consistently to the marketplace.

    Our goal would be to support those initiatives that are focused on improvement and change, and we'll put our strong support behind them. But until that takes place, we'll continue to offer open-net pen product.

    Okay.

    My final question is a two-parter. In terms of consumer habits, could you comment about whether different regions in western Canada are different, or are there different demands for green products versus other regions in western Canada?

    In terms of Ocean Wise versus SeaChoice, for instance, why did you choose Ocean Wise? Why that certification program?

    Those are good questions. With regard to the first question, there is a noticeable difference in the marketplace for sustainable products. We're finding people on the west coast, particularly in British Columbia and on the coast, are far more focused on sustainable options.

    We personally, from a company perspective, believe in that. We think for our long-term livelihood that makes the most sense and we want to make a difference. But as I mentioned before, we also offer throughout western Canada...and at this point in time there is nowhere near the focus in Alberta and Saskatchewan that we're seeing in British Columbia. We see that it's a growing trend, and there is becoming more and more interest nationally. Basically, as we move off the coast there becomes less and less of an interest, but it is growing.

    With regard to Ocean Wise versus SeaChoice, we actually haven't chosen one over the other. Ocean Wise has recently signed on with SeaChoice. There is a group of NGO groups—about 20 in total and many of them in the United States—that have all signed on for a common vision. The goal was that they would all be able to use the same assessment criteria to assess whether a fishery is sustainable or not.

    Ocean Wise and SeaChoice have committed to using the same assessment criteria. So it's not that we've really chosen one over the other. There is a value in dealing with both. We are partners with SeaChoice. They hold us accountable for many of the nationwide programs that we offer.

    OceanWise has gained tremendous momentum here on the food service level, but have gained very little ground on retail, whereas SeaChoice has a very strong presence nationwide, mostly within retail.

    Again, we also are partners with the Marine Stewardship Council. We've had chain of custody for over nine years now, offering certified fish from the Marine Stewardship Council. So again, we're not just focused on OceanWise. They're not our preferred NGO group. They're just one of many NGO groups that we work with.

    Thank you.

     Thank you very much, Mr. Donnelly.

    Go ahead, Mr. Leef.

    Thank you very much.

    We continue to hear that word “sustainable” today. From your perspective, do you think the average consumers fully understand what sustainable means when they're purchasing things off the shelf?

    At this point in time, I don't think they do. There's a lot of confusion there. As I pointed out earlier about that common vision, I think the goal is that they will come to some common agreement, so that when I see something that's rated good or green, it means the same thing.

    At the same time, current research from a number of universities has shown that sustainability is still not a primary focus for the average consumer. Cost, quality, and food safety have ranked above sustainability. If you ask me from a marketing perspective what is the strongest growing trend over the last 10 years, I would say it has been about offering sustainable seafood items within the marketplace.

    Then if that's the case—our seeing that growing trend—would that be because of a better educated base, or would that have more to do with branding and labelling, which can obviously be highly influential in consumer choice, or is it a blend of both?

    I think the recognition of brands with regard to sustainable seafood is still at its infancy stage, so I don't believe it's a big factor in consumer decision-making. It's more an education base, and there's been a stronger commitment by the average consumers to understand where their food in general comes from and what impact the food they consume has on the environment.

    Just so I understand, when you have Ocean Wise or SeaChoice, is there actually a label on a package that says it's an Ocean Wise product or a SeaChoice product? How does it get labelled to show a consumer this product is different from, let's say, an open-net product?

    It's important to note, though, that open-net products are not necessarily deemed non-sustainable, as long as they follow the criteria. It would be the difference between what is deemed sustainable and non-sustainable.

    Ocean Wise is a program that was focused on educating the consumer at the food service level, at the restaurant level. What happened was that the restaurants would make a commitment to Ocean Wise—to the Vancouver aquarium—that they would delist many of their non-sustainable items or switch the non-sustainable items on their menu over to sustainable items. In return for doing that and making that commitment, they got to use the Ocean Wise logo beside that particular product on their menu. In many cases, particularly in Vancouver where it's a strong focus, the entire menu of many of the restaurants now is Ocean Wise. From that perspective, the consumer can go in, look at the menu, and know that all those products are Ocean Wise.

    SeaChoice, on the other hand, really hasn't labelled particular products as much as developed partnerships with people like Overwaitea Food Group and Safeway. Its branding has been at the store level, primarily offering education-based handouts, pullouts, flyers, and posters outlining what particular seafoods in the counter are deemed sustainable. So there's really no brand or logo, so to speak, from the retail perspective.

    Okay. We see nowadays the zero trans fat logo or a low-carb logo, and trends shift based on that branding and marketing. I suppose if I were to walk into a store and look at something that said it's Ocean Wise or SeaChoice, with a sticker on it, I would probably naturally be drawn to that sort of label. It's just a foregone conclusion that it's a better choice. I was wondering if that was playing a role.

    Right now—

    Sorry. I don't mean to interrupt, but there are those programs out there; they're just strictly not particularly well developed in Canada at this point in time. The Marine Stewardship Council, based on the World Wildlife Fund and Unilever, started in the U.K. and is very strong internationally. It has a very strong following in Europe and now has a growing interest within North America. It has that MSC brand logoing. It's a fish with a check mark on it, outlining that this is a sustainable option, and that actual brand or logo appears on the seafood item at the store.

     When I was listening to you speak about the viability of closed containment, you said it's probably economical, and it might be more viable. We've all heard about some of the closed containment projects under way with the N'amgis. We're interested in seeing the results.

    If they turn out not to be economically viable, are you preparing for that? Industry is shying away because they can't fit into that niche market, or because it just doesn't translate into the success story they're looking for. You'd have to have a shift in thinking if they turned out not to be viable on open net. I know that's a bit hypothetical, but have you contemplated that possibility?

     I don't think we ever believed that closed containment would take over from open-net pen aquaculture 100%. I believe that closed contained aquaculture will have a niche, will have a marketplace. A market will demand a premium for that product. As production develops and more research allows us to reduce our costs even further, that might become more of a viable option. It could compete with open-net pen aquaculture and become more of a commodity, the way open-net pen has. Albion's perspective—not mine—is that it will completely replace it.

    Thank you.

    Thank you, Mr. Leef.

    Mr. MacAulay.

    Thank you, Mr. Chairman.

    Welcome, Mr. Dean.

    Do you deal with SeaChoice?

    Yes, we do.

    They put “best choice” and “avoid” on their products. They put “avoid”, if I understood correctly, on all open-net fish. I guess they do not have open-net products to sell. Is that correct?

    They haven't certified any open-net pen aquaculture. The five organizations that they're part of are vehemently opposed to open-net pen aquaculture. Various scientists within their organization, the David Suzuki Foundation, are well-respected and have helped to establish criteria for what are deemed sustainable farm salmon. They may be opposed to open-net pen, but they have contributed to developing criteria on what would be deemed sustainable.

    I would also suspect they're a bit opposed to open-net production with ocean-wide certification. And we talk about eco-certification. It's just a different brand, I expect.

    You also talk about the sustainability of some open-net fish. Some would be certified as sustainable and some would not. How could any of it not be classified as sustainable? They would be restocking. I'd just like you to explain that to me. It's hard for me to understand that the open-net concept would not be sustainable. They have the fish to put in, and they farm them.

     That's sustainable business versus environmentally sustainable. Again, I'm not a scientist in any way, so I'm probably the wrong person to ask. There are certain criteria that have been established that deem what is environmentally sustainable.

     A lot of it is management of resources. We have to remember that, like any farm initiative, the product we feed our fish has to come from sustainable sources as well. When we're taking non-sustainable fish, grinding it down, and feeding that at a higher ratio than the actual weight of product that we're getting out of the product, that certainly is not sustainable.

     Those are some of the criteria that have been established to deem whether that is sustainable.

    There are going to be open-net pens that are going to be able to produce one pound of fish by using less fish protein than the one pound they're gaining. Those would be sustainable alternatives to the other groups that are going to use a lot more fish protein in their feed.

     Those are just some of the criteria that would establish whether it's sustainable or not.

    Again, it's also management of resources and your ability to manage well, whether it's escapement, predation, or your impact on benthic environment. There are going to be groups out there that are highly focused on producing a product that has very little impact on the environment; that's really going to be the difference between whether it's well managed and focused on environmental impact and a group that's not necessarily focused on that at all.

    Basically what you're saying, then, is that if you wish to sell the product, there need to be more rules for the open-net concept, or regulations. We're hearing everything here at this committee, but the truth is that I can see eco-certification making decisions in the fishery around the world, and that's not going to involve governments. They can get involved if they like, but if it's not certified, then it will not be sold.

    Down the road, it looks like that's where we're heading. It looks like this certification is going to rule the day, not what governments decide. You're going to decide on sustainability of the stock, whether it's in fish farming, the lobster industry, where I come from, or anything else. It looks to me anyhow that certification and eco-certification are going to make the decisions even on where people can and cannot fish and that type of thing, which I'm not overly big on, but it looks like that's where we're heading.

    I would like to ask you if you think there should be more.... I know that obviously there will have to be more regulations if you're going to have the product certified, but do you think there's a need for more rules, more laws, or more regulations within fish farming? There are some presentations—and people—that give the open-net concept a pretty big black eye. It's obvious that you know it's valuable and will continue.

    But in order to have a better face on it, do you think there need to be more rules in place as to what they do with the waste and what happens to the property underneath the net? They talk about the land being dead underneath the net and all that. Do you think there should be more rules put in place in order to have a better public view, if I could say that, of the open-net concept?

    Well, I'm always opposed to more rules and regulations.

    So am I.

    I think we do a fairly decent job on environmental protection and regulation. The problem to date is that the information has not necessarily become public. There is a tremendous amount of speculation out there that gives the industry as a whole a black eye. If environmental protection and impact on the environment...if those were clearly followed and all of that information were made public, I would hope that it would help the industry. I would also hope that there would be support from industry and consumers on supporting those companies and groups that are focused on providing a better managed fishery.

     But you'll rule yourselves. It will rule itself, actually. If you're going to be certified, you have to rule yourself and rule yourself properly. Basically that's what you're saying.

    I don't think sustainable certification has anything to do with government involvement. I'll put it that way.

    Thank you very much.

    Thank you very much, Mr. Dean.

    On behalf of the committee, I want to say thank you for taking the time out of your busy schedule.

    Once again, I want to apologize for the technical problems we had at the beginning. We certainly appreciate the information you've shared with this committee today. Thank you once again for taking the time to answer our questions.

    Thank you. I appreciate that.

    There being no further business, this meeting is adjourned.