Evidence of meeting #7 for Fisheries and Oceans in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was heiltsuk.
9:05 a.m.
Conservative
The Chair Conservative Gerald Keddy
I call this meeting to order. Pursuant to Standing Order 108(2), we will today study the herring spawn-on-kelp fishery.
I'd like to welcome our witnesses. They are Randy Pilfold, vice-president, and Don McNeil, as a representative of the industry.
It's my understanding that Mr. Cummins has an intervention before we hear our witnesses.
9:05 a.m.
Conservative
John Cummins Conservative Delta—Richmond East, BC
Mr. Chairman, it's a matter of some concern regarding testimony last week by DFO officials.
My colleague Mr. Lunney addressed his first question to Mr. Wild. He said in his question that perhaps remarks had been made in the media concerning the motivation of groups that were concerned about gravel extraction, that they were “motivated by other issues than biology: by racial concerns”. That was a comment by Mr. Lunney.
Mr. Wild replied as follows:
That was reported in the Chilliwack paper by a reporter whom we've actually talked to for several years in the area. I might preface my comment by.... I think Marvin also noted that occasionally reporters twist the stories a bit. In my opinion, that was the case here. In that report there were quotes from Dale Paterson, who actually happened to be on holidays for two weeks at the time.
There's a theme in there, though, that is not totally unrelated.
And it goes on from there.
I further questioned Mr. Wild on that issue. I asked him directly whether he referred in his comments to the newspaper reporter about--and I quoted these words--“local animosity”. I suggested to Mr. Wild the following about the newspaper reporter's report:
He says that you suspect that “local animosity with the Cheam First Nation fueled the sport fishermen's outrage over the gravel removed”.
Are you denying that?
Mr. Wild said, “I understand, and I responded to that question earlier.”
When I asked him again, he replied, “That the local animosity between the two groups caused the problem on this site? No.”
I said, “That it fueled local sport fishermen's outrage.”
Mr. Wild said, “I don't believe I said that, Mr. Cummins.”
I said, “That's fine”, and that was the end of the exchange.
Mr. Chairman, I checked with the reporter involved in that story, because I think there was a serious allegation made here. There were comments and denials in committee, and--
9:05 a.m.
Conservative
The Chair Conservative Gerald Keddy
I'm just going to interrupt you for a second, Mr. Cummins. We do have two witnesses here. If this is going to take quite a while--
9:05 a.m.
Conservative
John Cummins Conservative Delta—Richmond East, BC
No, I'm going to be done here in one minute. I just think it's important that this issue be on the record.
Mr. Chairman, I asked the local reporter, and I got a comment from Mr. Bill Otway on this thing. Mr. Otway said:
Be aware that on a quick glance I'm aware that Wild lied or misled the committee on a key point. He claims the comments made in the paper were not his and the reporter erred.
Well when this happened I e-mailed Sprout immediately and he responded that he had taken it up with Wild and both agreed that these were not responsible comments and that they were not acceptable and he assured it would not happen again.
At no time did he indicate that this was a misquote by the newspaper.
The reporter, Robert Freeman, said:
Mr. Wild did make the comment about “local animosity” toward the Cheam. I have it in my notes and a good recollection of it in my memory because it surprised me so when he said it. No recreational fisherman made any comment (at least not a disparaging one) about the Cheam Band running the removal operation--just about their concern for the habitat and what DFO was doing. ... Nobody from the DFO has said anything to me about any alleged misinformation or misquotes in the story since it ran in March.
Mr. Chairman, I think this committee was misled by Mr. Wild and Mr. Sprout. I think it's a matter that requires addressing by the committee at some point.
9:05 a.m.
Conservative
The Chair Conservative Gerald Keddy
Thank you, Mr. Cummins. We'll take that up during further committee business, after 10 o'clock.
We'll come back to our witnesses.
You have 10 minutes, gentlemen. Thank you for appearing, and thank you for your patience.
9:05 a.m.
Don McNeil Representative, Spawn on Kelp Operators Association
Ladies and gentlemen, we would like to thank each of you for this opportunity to bring this matter to your attention and consideration.
We represent the Spawn on Kelp Operators Association, a non-profit organization formed in 1995 to represent 35 of the 46 licence-holders. The spawn-on-kelp fishery, once the most profitable on the coast, has suffered a total financial collapse because of Fisheries and Oceans Canada's interpretation of the Gladstone decision.
We are here today from British Columbia to make sure that you are aware of what happens when government enters into the established marketplace, and to ask you for your assistance in correcting the resulting financial devastation to our industry.
Prior to the Gladstone decision, there were 28 licences issued to various individuals on the B.C. coast. Their quotas were each 16,000 pounds per year, prices were rising, and demand for the product was high. Of these 28 licence-holders, 18 were first nation bands and individuals from various villages and towns spread through the entire length of the British Columbia coastline.
It was in 1996, when spawn-on-kelp was selling for $35 to $40 a pound, that the Supreme Court decided, in the Gladstone decision, that the Heiltsuk aboriginal band on the central coast of British Columbia had a right to harvest spawn-on-kelp for commercial purposes. The DFO wrongly determined that this decision provided the Heiltsuk almost unlimited access to the quota-regulated fishery. The resulting penalties and consequences of the Gladstone decision and DFO's interpretation are, and continue to be, the responsibility of the Canadian people as a whole. Presently the cost is being borne solely by the original 38 spawn-on-kelp licence-holders.
In 1978 five communal licences were issued to first nation bands, including one to Heiltsuk. In order to be eligible to participate, sac roe licences were required to be leased or retired by each communal licence-holder. These licences were created by lowering the 28 original quotas from 10 tonnes to 8 tonnes per licence. No increase in total coast-wide quota resulted.
In 1991 DFO issued 10 new J licences to first nation bands, but none to Heiltsuk or other first nations who held an existing J licence. Those who did receive a licence were required under the AFS agreement to retire six gillnet sac roe licences or one seine sac roe licence by 1999. And DFO contributed to the cost of doing so.
In 1993 DFO issued one J licence to Heiltsuk with sac roe requirements. Heiltsuk now held two out of a total of 39 J licences.
In 1997 DFO issued five J licences, and two additional J licences in 1998, to Heiltsuk.
In allocating these seven new licences, Heiltsuk did not have to retire any more roe herring licences, nor did they have to retire three of the six gillnet licences as required under the Heiltsuk 1993 AFS agreement.
Some first nation bands spent $150,000 to lease licences for the year, while others invested their earnings of up to $800,000 to purchase sac roe licences for conversion to spawn-on-kelp licences. This to them was a good investment in their future, as spawn-on-kelp was a closed-quota fishery with a product that was in high demand. With these new additions, without sac roe licence requirements, the Heiltsuk quota rose to 144,000 pounds.
In February 2001 the Heiltsuk, DFO, and the Department of Indian and Northern Affairs Canada signed a letter of agreement for an interim measure for a one-year period. The interim measure increased the harvest from 144,000 pounds to 240,000 pounds for the 2001 season, which is equivalent to six more J licences.
In 2005 the Heiltsuk First Nation terrorized the sac roe fishing fleet with illegal acts of vandalism. No one was charged, even when personal property was damaged and livelihoods were threatened. Instead of charging the terrorists, DFO decided to appease the Heiltsuk by giving them 92,000 pounds more spawn-on-kelp in 2006 in exchange for the promise that they would not create the havoc that occurred in 2005 and previous years.
This year, 2006, the Heiltsuk produced approximately 350,000 pounds, which is equivalent to 50% of the coast's production, and the prices plummeted to $4 to $5 per pound. As Heiltsuk's production increased, the price went down by the same ratio. This was the icing on the cake for the spawn-on-kelp industry. Prices still remain below cost of production for the original 28 licence-holders and the ten bands who invested their earnings.
We feel that part of the DFO's mandate in this area should be to provide economic benefits to all aboriginal bands, including the Heiltsuk. This has not been the case, and to most bands the opposite effect has occurred.
In February 2006 secret negotiations were held with the Heiltsuk, which resulted in 92,345 pounds added to an already flooded market.
In a letter to the Minister of Fisheries dated February 20, the minister was asked why SOKOA was not asked to participate in any negotiations with Heiltsuk. A reply sent on April 7 stated that the Spawn on Kelp Operators Association elected not to participate in this process. He suggested that we contact Ms. Harpreet Gill to provide us with information regarding an invitation to be part of any negotiations with the Heiltsuk regarding roe-on-kelp.
We have done just that, and have been stonewalled with 39 pages of misinformation that mean nothing, but it strengthens our belief that it was intentional for SOKOA not to be present during these negotiations that decimated our industry and livelihood.
The Heiltsuk do not pay either the $10,000 licence fee or the $5,000 monitoring fee that the other 38 licence-holders are required to pay. Thus they start off with a dollar-a-pound advantage in cost over the rest of the spawn-on-kelp industry.
The people of Canada are not getting any taxes or royalties from the massive use and exploitation of this once clearly Canadian resource. The increasing concentration of quota allocation and earnings to Heiltsuk has devastated licence-holders, crews, and communities from the various towns and villages along the entire length of the B.C. coastline.
Many socio-economic problems from this abrupt cessation of employment and income have risen steadily since 1975. These problems were never considered by DFO as they stumbled over themselves to appease the illegal demonstrators and the Supreme Court's Gladstone decision by issuing the spawn-on-kelp quota to Heiltsuk.
In all other fisheries, DFO and government departments determined that to transfer quota out of the fisheries to first nations, the quota was first purchased out of the commercial fishing mainstream and then transferred to native interests. This principle was not adhered to in this fishery. The result has been a flooded market and prices lower than costs of production. The Japanese buyers lowered the price dramatically, not only because of the increased production but also because of their perception of open-ended quotas being handed to Heiltsuk.
Incidentally, much of the black market or illegal product comes from this area, with little or no effective enforcement. In a recent technical working group meeting with DFO, a central coast enforcement officer admitted that he had been instructed not to enforce illegal harvesting on the central coast. As a result of this type of inaction, the illegal harvest has risen to about 200,000 pounds.
The Supreme Court of Canada's Marshall decision of September 17, 1999, affirmed the treaty right to fish, hunt, and gather in pursuit of a moderate livelihood stemming from treaties signed in 1760 and 1761. Following the court's decision, DFO initiated the Marshall response initiative. Because of Marshall, increased aboriginal participation has been accommodated, in part through the voluntary retirement of fishing licences from existing commercial licence-holders. In this way, disruption of other fisheries has been minimized.
When SOKOA put this rationalization plan forward to the herring industry advisory board and the new integrated herring harvest planning committee, this plan was accepted unanimously as the best solution.
The Spawn on Kelp Operators Association respectfully requests that the Standing Committee on Fisheries and Oceans consider funding a spawn-on-kelp licence rationalization plan proposal based on Marshall. We would ask you to direct the government to treat all fishermen equally, regardless of which coast they come from.
Thank you.
9:15 a.m.
Conservative
The Chair Conservative Gerald Keddy
Thank you very much.
We'll go to our first questioner.
Mr. Matthews.
9:15 a.m.
Liberal
Bill Matthews Liberal Random—Burin—St. George's, NL
Thank you, Mr. Chairman.
Thank you for coming, witnesses.
I have a couple of questions, just for clarification. On page 3 of your presentation, fourth paragraph, you mentioned a letter to the Minister of Fisheries dated February 20, and then a reply on April 7. That's 2006, is it?
9:20 a.m.
Liberal
Bill Matthews Liberal Random—Burin—St. George's, NL
Perhaps you could explain this for me so that I understand. The spawn-on-kelp fishery is not something I'm overly familiar with, to be very honest with you. Could you just inform the committee on what it really is, spawn-on-kelp?
The other thing I'd like some clarification on is the sac roe licence. You talked about the impact of, I guess, not taking out a number of sac roe licences. Could you explain what that is for, please?
9:20 a.m.
Representative, Spawn on Kelp Operators Association
To answer your first question, I'll give you a quick history of what spawn-on-kelp is. We start off by building an enclosure with four logs. We build an aquarium, as such, out of web. We go out to the kelp beds and we pick kelp, a certain type of kelp, and we hang it just like socks on a clothesline. We hang thousands of leaves. We then catch the herring and we tow them gently towards the pond. We have a technique to put them into the pond alive.
Because the fish are at a certain ripeness in their maturity--in other words, they're anxious to spawn--they spawn on the web and on the kelp that we have suspended in the pond. After it gets to a certain thickness, we harvest that kelp from the pond, salt it down, and transport it to town, to be sold to the Japanese.
Basically, the interior is a leaf of kelp, or seaweed, and the eggs are adhering to both sides of the kelp.
9:20 a.m.
Representative, Spawn on Kelp Operators Association
Basically, there's a total allowable catch in British Columbia. The spawn-on-kelp industry is classified as a user of the product. So we're allocated 100 tonnes of herring to use in this operation. The sac roe fishery is a fishery where they actually catch the herring, pump them aboard the boats--in other words, kill them--and send them to town for processing for the sac roe, the little piece that is sold to the Japanese.
The point is that if you issue a roe-on-kelp licence to Heiltsuk, for instance, and make them retire six gillnet licences, or a seine licence, then basically the resource has not been.... You've just moved from one fishery to another.
9:20 a.m.
Liberal
Bill Matthews Liberal Random—Burin—St. George's, NL
So really, I guess, it's just to check the mortality rate on the fish, is it?
9:20 a.m.
Representative, Spawn on Kelp Operators Association
In the spawn-on-kelp business, ideally, if it's done properly, the fish are released and they come back next year. You've actually extracted the eggs and sold them without killing the fish at all.
9:20 a.m.
Liberal
Bill Matthews Liberal Random—Burin—St. George's, NL
As I determine from your presentation, there are a couple of problems. One is that there's been an oversupply, it seems, to the market, which has driven your price down from $35 or $40 to $4 or $5 a pound. That seems to be the essence; we've just made the fishery non-viable, basically.
Another problem is that in certain instances they didn't order a direct reduction in the sac roe licences when they increased the....
Is that what it is?
9:20 a.m.
Representative, Spawn on Kelp Operators Association
No. What happens is that if you have 38 licences at 16,000 pounds each, that is a certain, definite quota that's out there for the Japanese to purchase. But now what's happened is that the government has issued 342,000 pounds of quota to one Indian band on the central coast.
So without getting into the benefits or the detriments to the sac roe industry, it has basically flooded the roe-on-kelp industry and increased the coast-wide allocation, because they haven't taken it out of the other industry. But that's a separate problem from the one we're dealing with today.
9:20 a.m.
Liberal
Bill Matthews Liberal Random—Burin—St. George's, NL
Okay, thank you.
That's it for me, Mr. Chairman.
9:20 a.m.
Conservative
9:20 a.m.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
Thank you, Mr. Chairman.
Mr. McNeil, I thank you for being here. I would like to ask you a few questions for clarification, in the same vein as those asked by Mr. Matthews.
If I understood correctly, the total production is approximately 600,000 pounds. Is that correct?
9:25 a.m.
Representative, Spawn on Kelp Operators Association
The coast-wide production for 2006 would be about 500,000 pounds.
9:25 a.m.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
You said that this year, in 2006, the aboriginal band landed approximately 350,000 pounds. If I understood correctly you also talked about a black market during your presentation. That means that reality does not correspond to what you have described, because you also made reference to the black market. This fishery is obviously not monitored by the department. We therefore cannot assert that the production is truly in accordance with what you state in your document.
9:25 a.m.
Randy Pilfold Vice-President, Spawn on Kelp Operators Association
If you look at the management plan for the spawn-on-kelp industry, their quota is 240,000 pounds, from DFO, and they got to produce 325,000 pounds. That's what the problem is.
9:25 a.m.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
You say that they landed approximately 350,000 pounds. Was that registered or verified, or is it something that you presume?
9:25 a.m.
Vice-President, Spawn on Kelp Operators Association
It's been registered. It's right in their document, in the MOU they had for this year, for 2006. They were given 325,000 pounds and they produced 350,000 pounds. They had an increase of 92,000 pounds.