Fisheries Committee on March 24th, 2009

[Dr. Wendy Watson-Wright]

Yes. If you're speaking of NAFO, it's not in regard to lobster, I presume.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

No. No, I know that.

[Dr. Wendy Watson-Wright]

More generally on the NAFO issue, on the science side, we are collaborating heavily with other nations that fish in the NAFO area. In particular, it's with Spain at this point. Mr. Paradis has been leading an initiative whereby we have an MOU that was signed by our minister a few years ago. Under that, the science and technology collaboration was pushed. Part of that science collaboration is on the fisheries side, and specifically in the NAFO area. There's a lot happening in terms of them coming in.

More generally, we do have fora where we do collaborate with other nations. In terms of the Atlantic, it would be ICES, the International Council for the Exploration of the Sea. We have a like-minded PICES in the Pacific. We have an oceanographic forum.

So yes, generally we are collaborating with those nations we can collaborate with.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you.

[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.

Our witnesses have explained to us that there is an immediacy here related to the lobster industry. If I understood correctly, notwithstanding the fact that there's no money available for our licence retirement program, the time to be able to set one up and institute it just wouldn't solve any of the problems of 2009. I guess that kind of leads us to a very specific question.

Other than the anticipated spending of marketing resources after April 1, what exactly is it that the government has in mind to assist this billion-dollar industry to be able to sustain itself and survive the economic, fiscal, and market crises, the three combined perfect storms that the lobster industry is facing?

There is a credit crisis. Fishermen do not have access to proper credit instruments to be able to actually gear up for this fishery. They do not have access to capital investments, and they certainly are suffering from market downturns, mostly as a result of the global economic slowdown, which has reduced consumer demand or expectation for this particular product. What exactly can we see roll out, come April 1 and shortly thereafter, to solve this short-term crisis?

[David Bevan]

Well, clearly, some of the broader issues that were related to the budget in terms of access to capital, etc., are going to be available for people in this industry in terms of the buyers and the processors, etc. They can make representations to and proposals on how to get access to that. We will have the community adjustment funds and we'll see what the conditions are on those and how those could be used in this area.

Last year in the fall, when things started to unravel the way they did in terms of the economy, we did start discussions with the lobster fishing areas on how they might cut their costs and how they might slow down the fishery so they wouldn't glut the market, and how they could take advantage of the fact that the retail market seemed to be taking up a bit of the slack left by the food service market, which was very important in this particular fishery. We didn't get a good uptake on that. Notwithstanding, we're still going to try to pursue that because of the fact that, as you pointed out, in the next eight weeks or so--or perhaps even less--this problem is upon us.

One thing we don't want to do is to have too much supply come in too quickly, overload the capacity, and then have people put in the position where they can't get access to buy it and they can't move their product quickly enough to feed the need anticipated by the fishermen. So if it could be slowed down by voluntary measures, by fishermen in the area in conjunction with the processing plants, that would at least help to avoid a situation where people run out of the capital that they have. The working capital may be less than last year, and they need to be able to make better use of it and they may need to try to move product.

But I am not going to sugar-coat this, we are facing a very serious potential problem in terms of the people who buy the lobster in the United States having access to capital, the people who buy it in other markets having access to capital, and the ability of the Canadian industry to purchase, process, and then go and move it to market as they traditionally have. Those are not necessarily going to be activities that can unfold without having big impacts and we are open to discussions with the industry on how we might change some of the management as these fisheries open up in another month or so.

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

If I were to tell you that the BDC, the Business Development Bank of Canada, and the Export Development Corporation have never really been big players in the Atlantic and Quebec lobster industry and that was the number one prescription within the budget to solve the credit crunch and to free up markets and to allow better access to capital, would you feel better or worse about your prognosis of the Atlantic lobster fishing season in 2009, knowing that the very budget prescription that the government is proposing to lessen the woes of the industry are two instruments that really had next to no impact in the best of times for this particular industry?

I guess in terms of the industry uptake, slowing down the industry not only prevents market glut, but it also slows down cashflow. If you slow down the sale of your product, that means you also reduce your access to cash, which is probably one of the reasons why they may not have adopted that particular prescription so quickly.

[David Bevan]

I think your comments are fair. At the best of times, there are a lot of other bankers who are willing to provide the loans and the working capital needed by the industry. Some of those were pretty well known in terms of Glitnir, Landsbank, and others. Obviously, they are no longer in a position to do that.

Alternative sources of capital have to be found. If they can find them from Canadian banks, that's great. If they can't, then these other options are something they may have to take advantage of.

Slowing the fishery down is only.... Going with a rapid fishery is good if you can sell your product and get the cash. If that's not a business model that's going to work in 2009, then you'll have to look at what kind of market you are selling into. Do they have to buy it and then move it out to their final customer before they can pay you? All of these things are a real significant challenge for 2009, because what used to work is not going to work this year. It is of grave concern that we could see an impact that takes the price below what's necessary to allow a fisherman to go to sea.

[The Chair, Conservative, Rodney Weston]

Thank you.

Monsieur Blais.

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

Thank you very much, Mr. Chair.

I would like to look at one of the three parts of the solution that you mentioned at the start. You talked about better control over the fishing effort, better research and better governance. If I may, I would like to talk about research, about how to get better information about this subject.

Personally, I know that the situation can be completely different from region to region and from sector to sector. I imagine that makes studying animal behaviour much more complex. I was wondering what the research parameters were, what the research budget is, and for how long has it been that way.

In the lobster fishery, how are we dealing with the resource in the face of climate change? As we know, there is much less ice at certain times of the year. A number of things are occurring at the same time.

[Dr. Wendy Watson-Wright]

Thank you, Mr. Blais.

Let me start with the budget. At the moment, the department's lobster budget is about $3 million. That means 16 or 17 people in the four Atlantic regions. Another half a million dollars come from our partners for joint ventures.

As for the scientific projects and research that we conduct, they usually depend on requests from Mr. Bevan in Fisheries Management. Sometimes, opportunities arise for cooperation with partners. The partners come mainly from universities or the industry. There are differences, but there are also similarities.

I will ask Mr. Paradis to describe our research on lobsters in more detail.

[Sylvain Paradis, Director General, Ecosystem Science, Department of Fisheries and Oceans]

The interesting thing about the lobster program is that it has been developed in close cooperation with the industry. There is very significant cooperation. As there are no quotas, there is less tension over the establishment of biomass and so on. Fishing equipment and egg productivity are subjects that are often dealt with. We have also looked seriously at the toxicity of products in the environment. That program evolved through partnerships and shared priorities. It is very different.

As for integrating the four regions, most of our research projects have been largely integrated in recent years. All our researchers belong to major international organizations through which information is shared. All new discoveries are shared among the regions in detail. The same models are established, if that is what the industry wants. As the Fisheries Resource Conservation Council mentioned, in some regions, the industry is in a better position to...

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

Can we say that we know more about lobster than we did five years ago?

[Sylvain Paradis]

Yes.

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

Can we also say that this improvement in knowledge should, in principle, allow us to overcome the problems we are presently experiencing in the economy and the future of the industry?

[Sylvain Paradis]

Possibly, but as the Fisheries Resource Conservation Council brought up, and as you yourself mentioned, climate change and the effect on the ice are factors now. There are also prey-predator issues. So we are now in a time when science is being rewritten. Previously, programs were vertical. People conducted their activities isolated from one another. The program is more integrated today and it looks at questions from all angles. This is all very new, be it models for measuring effects, or climate change, or temperature change, or the effects of urban development. Things have evolved greatly in recent years and the process of bringing all the knowledge together is only just beginning. The great challenge is to move from a very restrictive approach to the fishery to a more ecosystem-based approach. To some extent, that should help us to measure the most likely impacts that we are going to have to confront.

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

Is the grey seal a predator of the lobster?

[David Gillis]

Yes, I guess.

[The Chair, Conservative, Rodney Weston]

Mr. Stoffer.

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

Mr. Chairman, I think the next time we have a discussion on lobsters, we should actually have a plate of lobster before us—

[An hon. member]

Hear, hear!

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

—and some potato salad, a lemon, and a glass of white wine.

Next week we can talk about shrimp, and the week after that, crab. I think it would make things go a little smoother here.

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

No, it should be a lobster from each province, because you'll find the Newfoundland lobster so much more tasty.

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

My son, the Nova Scotia lobsters are the best. You have to understand that.

So my first question is, which is the best lobster?