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.