Fisheries Committee on March 24th, 2009

[The Chair, Conservative, Rodney Weston]

Order, please.

Ladies and gentlemen, thank you very much. We're ready to begin.

Before we start, if it's the committee's wish, Mr. Stoffer would like two minutes just to raise a couple of points on something he wants to bring before the committee.

Mr. Stoffer.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chairman.

There are two things. First of all, the Embassy newspaper came out on Monday, and I suggest every committee member get a copy of it. It's not often that you see all members of the House of Commons, the critics, and the minister talk about one issue with such solidarity. It's in regard to the seal harvest. There are four great articles in there, and it would be really good for all of us to have a read of that. The unanimous support we have for the harvest is really something we can be proud of.

Secondly, I was in Washington on Thursday and Friday. I was at a store in Georgetown. On the storefront was a huge poster of a whitecoat. On the back of it, it says that Canadians are skinning alive these seals for their pelts. The chairman has a picture of the postcard, which Mr. Bevan has seen before. They come from Canada. Of course it's simply wrong what they're saying, so I went in there and I questioned the lady about her motives on that. She told me that I seemed to know a lot about seals. I told her who I was and she got all red-faced and embarrassed and admitted that this poster comes from Canada.

This poster is so deliberately misleading that it wouldn't hurt.... I've just talked to Mr. Bevan about it, and he has a couple of words he'd like to say about it as well. But if the committee agrees later on, maybe the chair of the committee, on behalf of the committee, could write that company a letter and tell them that this is very, very misleading about what happens on the ice out there.

Thank you so much.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Stoffer.

All right. We will begin.

This morning with us we have a delegation from—

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Excuse me, Mr. Chair, but I think Mr. Bevan wanted to say a word on that.

[The Chair, Conservative, Rodney Weston]

Okay. I'll introduce him and he can bring that in in his opening comments.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Okay. Sorry.

[The Chair, Conservative, Rodney Weston]

That's all right.

With us today is Mr. Bevan, the assistant deputy minister from the Department of Fisheries and Oceans.

I'll turn the floor over to you, Mr. Bevan. I appreciate you and your delegation coming here this morning. I'll let you introduce your delegation from the department.

If you want to make some comments around the comments the member just made, it would be appropriate at that time. We want to talk about the lobster fishery as well this morning.

Mr. Bevan.

[David Bevan, Assistant Deputy Minister, Fisheries and Aquaculture Management, Department of Fisheries and Oceans]

Thank you.

The delegation here today is as follows: Sylvain Paradis and David Gillis, from our science division; the ADM of science, Wendy Watson-Wright, who will be making the introductory remarks; and Robert Elliott, from our policy group, which looks after the economic statistics for the lobster fishery, among others.

On the seal hunt issue raised by Mr. Stoffer, we are writing a letter to the president of the company to correct some of the mistakes in their ads. As noted, they have a picture of a whitecoat. That's no longer permitted. As well, they talk about the skinning alive of animals. Again, there's a great deal of evidence, even from some of our critics, that this doesn't take place. We'll be correcting those mistakes in an open letter to the company.

Thank you.

I'll turn it over now to Wendy Watson-Wright for introductory comments.

[Dr. Wendy Watson-Wright, Assistant Deputy Minister, Science Sector, Department of Fisheries and Oceans]

Thank you, David.

Thank you, Mr. Chairman, for the opportunity to discuss this most important fishery with you and the standing committee.

I say “most important fishery” in the context that, as this group already realizes, I'm sure, the lobster fishery in Atlantic Canada has been the largest fishery for a single species in the country in terms of value. The landed value in 2007 was $562 million. In addition to this value, we must also recognize the spinoff businesses that the fishery supports and the added value of processed and exported products.

Unfortunately, the current economic downturn has recently hit all Canadians fisheries hard, especially those in the higher end of the market such as lobster. Nevertheless, lobster fishing remains a mainstay of Atlantic Canadian communities today, with over 10,000 licensed fishermen as well as others in the processing sector and exporting industries.

A total of 25,000 Atlantic Canadians make a living in this industry. With this context, it is essential that the lobster fishery be managed in a fashion that ensures that, in benefiting from the resource today, we do so in a sustainable manner. Simply put, we must ensure that future generations of Canadians have at least the same opportunity to take benefit of this legacy resource as we do today.

It was for this reason that Ministers of Fisheries and Oceans have twice now asked the Fisheries Resource Conservation Council to look at the Atlantic Canada lobster fishery and to advise them on approaches that government and industry can use to ensure this important goal is securely met.

The department is certainly pleased that the committee has taken this important fishery as a focal issue and that you'll soon be travelling across Atlantic Canada to discuss and consult with interested parties. We know, of course, that you've recently met with chairman Jean Guy d’Entremont of the FRCC and his executive team and that you're now quite familiar with their most recent recommendations from their report, A Sustainability Framework for Atlantic Lobster 2007.

The department has retained three principal messages out of this report and has called for regional staff to work with the industry on how best to advance these in their respective fisheries. These three objectives are improved controls on fishing effort; better information about the resource and the fishery; and improved governance. The department considers that the FRCC report is a very useful reference for departmental managers, scientists, and the industry, as it discusses revised management approaches that will take the lobster fishery in the broad directions that the council has outlined.

There are a number of new initiatives that are under way in numerous fisheries that are the direct result of the FRCC's recommendations. These initiatives are in addition to the regular program of science and management activities that we conduct related to lobster year in and year out.

The lobster fishery is a long-established one, and one where the management system has evolved in close association with the communities that the fishery has supported for generations. The effort control approach to management that is used in the inshore fisheries is to some extent unique, and for that reason so is the science program that supports this management system. The effort control approach to management that we use in all but one of the Canadian fisheries, lobster fisheries, is basically similar to that used by our American neighbours for the same species as well as that used by the closely related European lobster fisheries in the North Sea and adjacent waters. It's a style of management that lobster fishers widely support and may be, in many ways, an approach to which this species is well suited.

Other approaches to management based on output controls, such as quotas, would of course demand knowledge about abundance of populations that would be challenging to acquire and maintain in a comprehensive fashion. That said, we recognize that the world continues to evolve and adapt to emerging pressures, and the Canadian lobster fishery must do so as well. Consumers are more demanding today that fisheries be not just sustainable, but they be demonstrably sustainable.

Eco-certification and labelling for sustainability is a real and rapidly emerging requirement to access and maintain key markets, especially for higher-value products. As well, states that impose strict conservation measures on their fisheries increasingly require that measures of at least the same effect be taken by the other states that export to them.

Collectively, these pressures require that the government, the industry, and the many other interested parties work together to keep the Canadian lobster industry well managed for the times in which we live and sustainable over the long term.

In the department we have many expert and dedicated staff who work with each other and with the industry on these matters on a regular basis. The department has made lobster a priority species for new funding recently received to stabilize the collaborative science program in the wake of the Larocque decision, which this committee has heard about in the past. We are introducing new initiatives under the fisheries renewal action plan to guide decision-making in all Canadian fisheries, including lobster, toward a more ecosystem-based approach.

I would say the FRCC report complements these efforts very nicely by providing independent corroboration that these broad directions are important and appropriate and by outlining some of the tools that would be available for use in achieving them.

Again, Mr. Chairman, thank you for the opportunity to address the committee. My colleagues and I would be very pleased to entertain your questions and comments.

Merci beaucoup.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much, Mr. Chair.

Thank you to our witnesses from the department.

Your introduction spelled out some of the scientific parameters that are so essential to proper resource stewardship. We are aware that in numerous lobster fishing areas there has been a decline, and a somewhat dramatic decline. Some areas have been stabilized. That's not to minimize this particular issue, because it is very serious, but it's also something that's been around for a while.

The perfect storm that seems to be hitting the lobster industry is resource uncertainty in certain areas as well as economic uncertainty. Your presentation did not touch at all on the economic variables and the uncertainty facing fishermen in the industry. You did note that 25,000 Atlantic Canadians and Quebeckers derive their living from this particular industry.

What can you tell us about what the department is engaged in to help stabilize the economics? What specific marketing initiatives is the Department of Fisheries and Oceans pursuing or intending to pursue to bolster the economics of this particular fishery and to raise the landed values to our fishermen, who have now had lobster prices cut in half? Why is it that industry rationalization is now getting greater emphasis within the department, yet no publicly sourced funding is available for industry rationalization through lobster licence retirements or buyout packages? Why, in the most uncertain economic times the lobster fishery has faced in recent history, are fishermen themselves having to buy each other out, with no genuine or sincere access to capital to do so? Is that creating a circumstance of prescribed failure?

Could you just relate what measures you have in place in terms of bolstering the economics of this fishery?

[David Bevan]

Thank you.

We did put in place with the Department of Agriculture and Agri-Food a program under the CAFI program of $500,000 for the month of March, with a view to trying to promote lobster sales, trying to deal with existing inventories, and trying to move ahead with setting the stage for the 2009 fishery. We will be looking to work with other departments again in the coming fiscal year with a view to trying to continue the work on marketing and promotion of lobsters in markets.

We have, as you noted, been working with the various LFAs, lobster fishing areas, over the course of the last year, and we are continuing to do that with respect to looking at changes that might help with both the sustainability of the fishery in terms of some LFAs increasing carapace sizes, etc., as well as with the fishermen's groups to try to see if we can find a way to streamline and allow them to reduce their costs at this time. So licence stacking has been permitted. Combining has been permitted. Other measures have been looked at. That was done both to reduce the costs and to help respond to preserving the independence of the inshore fleet in Atlantic Canada where some fishermen had acquired another licence. We are looking at ways to change the policies to accommodate some of those factors.

With respect to this industry, though, it's clear that over the last number of years the business model that has been followed has been based on a high level of abundance. We've had record fishing landings for the last 20 years, and I think that was noted in the FRCC report, but it's not clear whether that's based on abundance or based on increases in effort. What used to happen is that lobster fishermen would put their traps out and haul them once a day. Now they're double-hauling. They're moving a lot more. They have larger boats. They can fish in worse weather. So the effort has gone up substantially. That has resulted in an increase in the landings in some areas, and there have been decreases in other areas, as you noted.

The problem is that the investment in the industry has been based on high levels of abundance and high prices. Both those had to be there if these enterprises were going to be able to break even. Now they're facing substantial changes, and we're going to have to look at how to change and how we manage this fishery.

We aren't, at this point, looking at a huge investment in a retirement program, as that's something that has been done in other fisheries in the past. We've stuck with the things like capacity creep. It comes back into the fishery. We are looking at trying to work with the fishermen to change some of the incentives to try to get better use of their investments, and to have their costs go down.

This year we are also trying to promote measures that they may wish to follow in order to ensure they're not going to glut markets, and specifically glut processing plants. As a lot of the food service has gone down--there's been a 50% drop in food service--that's been replaced by increased retail, but to get it into retail you have to have the products. If we overload the plants, we may end up with a situation in which they aren't going to be able to provide those products to the market.

We are not, at this point, going to seek large amounts of money for traditional buyback, but we are working within the whole community adjustment fund process and with LFAs to see if there's a possibility of some self-adjustment in the coming years.

I would point out that a lobster buyback or any licence buyback is not something that's going to resolve the fishing issue for this year. This year, we're going to have the crunch come upon us in April and May, and, quite frankly, any retirement program is not something we could bring to bear in that timeline.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So the committee is hearing perfectly clearly that the Department of Fisheries and Oceans is not contemplating bringing forward any licence retirement program requesting support from Treasury Board or central agencies. That's just not on the table with the department and the minister at this point in time?

[David Bevan]

If you're looking at what was traditionally done back in the nineties, that is the case. We're not looking at going in and asking for hundreds of millions of dollars to resolve the problem. We have scoped that out, and it is a very large investment. It's something that won't come online for the crisis that could be experienced by this industry in the next two months. We have to look for other solutions.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Could you describe the smaller-scale licence retirement program? You've highlighted that the large-scale investment, as has been done in the past, is not being considered. That indicates to me that the department is still open, then, to small scale or relative scale in certain lobster fishing areas themselves. Could you describe to the committee what your thoughts are on that? Is the community adjustment fund, the billion-dollar fund, being contemplated as part of that? Does the Treasury Board submission that guides that fund allow that kind of use of the funds for licence retirements?

[David Bevan]

We are looking at trying to help lobster fishing areas seek ways to do the adjustments and have enterprises come together. We are looking at that, whether it's through policy change or whether it's through other mechanisms.

You're asking about the community adjustment fund. There are still discussions under way, as I understand it, about the conditions that apply, so I can't answer that clearly at this point. It's just too early for me to say that those conditions would allow some kind of a local program to reduce the number of licences in any particular area.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

What's the total value of the lobster fishery in Atlantic Canada and Quebec in terms of landed values and export values?

[David Bevan]

It's about $1 billion. It is Canada's largest single species fishery. It is the most important fishery in Atlantic Canada and Canada in general.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

In terms of marketing efforts, that's centred around a $500,000 marketing initiative.

[David Bevan]

That was for the month of March, essentially. We couldn't go into the next fiscal year. We had to do a program that was concentrated in the one short period of time. We're now looking at what might be done in the future.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

What do you anticipate in the future? Will it be more of the same? Could you describe what that expenditure for that month of March focused in on? Where do you see it going into the new fiscal year, and to what value for that billion-dollar industry?

[David Bevan]

The month of March was focused on generic promotion of lobsters in the marketplace. They were looking at various promotions in seafood shows and so on. What we're looking at in the future would have to be worked out with the other departments involved and with the provinces. As you know, the $500,000 was a shared cost, so we have to work it out with the provinces and the industry and with the other departments involved. We are going to continue with that work, but I can't describe exactly what activities would be supported at this time or whether the funding will be secured.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, David.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Byrne.

Monsieur Blais.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Thank you, Mr. Chair.

What I am trying to find out in my first question is whether you agree, given the present situation and what might happen in the lobster fishery, that we should be thinking in terms of what we might call variable geography solutions. In a particular region, one approach might be to allow the carapace size to be increased and the number of traps to be decreased. In another area, licence buy-back could be much more appropriate, specifically given situations such as the one we find in Gaspésie where the lobster fishing zones are really different from those in the Îles-de-la-Madeleine. For example, in the Baies des Chaleurs region, lobster fishermen are only bringing in a few thousand pounds per year or per season, something like 5,000, 6,000 or 8,000 pounds.

In situations and areas like that, a licence buy-back approach could be more attractive and more helpful. So we are talking about different solutions in different places. Do you agree with that principle?