Evidence of meeting #14 for Fisheries and Oceans in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was systems.
A recording is available from Parliament.
4:40 p.m.
Conservative
The Chair Conservative Rodney Weston
Thank you very much.
On behalf of the committee, I'd like to say, once again, thank you very much for taking the time out of your busy schedules to come and meet with us today and answer our questions. We really appreciate your efforts.
We're going to take a short break while we prepare for our next witnesses.
4:40 p.m.
Voices
Thank you.
4:45 p.m.
Conservative
The Chair Conservative Rodney Weston
Gentlemen, on behalf of the committee, I'd like to begin by thanking you for taking the time to appear before our committee today and provide us with some answers to the various questions we have. I would ask your indulgence here, as well. We're running close on time, as you can probably appreciate.
What I would ask, Mr. Walker, Mr. Backman, and Mr. Erenst, is that you try to make your opening comments as brief as possible, and then we could get right to the questions. I know members have a lot of questions.
Mr. Walker, you may proceed with your opening comments. Could you try to restrict your opening comments to around five minutes? The same would apply to the other gentlemen here with us in our committee room as well.
Mr. Walker, please proceed.
4:45 p.m.
Director of Canadian Operations, AgriMarine Industries Inc.
Thank you. I'll edit my prepared statement as I go.
Thank you again for allowing me to speak to the committee. My name is Rob Walker, and I am representing AgriMarine Industries, based in Campbell River, B.C. We have an office in Vancouver as well.
I am going to give you a quick history of AgriMarine, because I feel it's pertinent.
AgriMarine Industries started as a net cage farm in Kyuquot Sound on northwest Vancouver Island. We grew chinook salmon in nets, had lots of experience with algae blooms, and ended up losing our farms because we couldn't keep up with the mortality. That pushed us into looking at new ways of farming back then. We wanted to be farmers, but we were tired of losing money.
In 1999 or 2000, the B.C. government came up with its green technologies initiative, which provided us with an opportunity to have a look at the pre-existing land-based system at Cedar, just south of Nanaimo. It had failed a number of times prior to our getting in there, but they allowed us to crank it up again, test the systems, and examine the costs and husbandry as well.
We quickly learned that the energy consumption at the farm made it very difficult to be profitable. The farm required a flow-through of 10,000 U.S. gallons a minute, and that required a 200-horsepower pump to move that water. There was a substantial head there. For those who don't know, this farm is constructed of above-ground concrete tanks, a series of eight of them, and the pumping head was about 40 feet at times. We also discovered that levels of dissolved oxygen in the local water were really variable. We spent a lot of money on liquid oxygen. From a fish husbandry perspective, we were able to learn plenty.
Salmon actually thrive in closed environments provided the basics are there, such as the right level of oxygen, flowing water, waste removal, feed, etc. We were able to develop a lot of real-time monitoring systems, which helped us keep that environment stable.
It became apparent very quickly that cost-wise, the flow-through model was not efficient. We looked at what we could do and ended up with a marine concept. We used the flow-through model again, but we put it at sea level, which allowed us to essentially get rid of the cost of pumping. We just moved water side to side, as someone else mentioned earlier.
We looked at the structural innovation from a couple of perspectives. The first one, of course, is environmental. Our reasoning was that solid wall containers prevented escapes and marine mammal interactions. Avian interactions could be limited easily with bird nets. Waste capture was enabled by the collection of feces and feed in the bottom and limited interaction with finfish, and the containment of feces from the farm would reduce pathogen transfer and eutrophication and also eliminate any buildup of waste on the sea floor under the pens.
The second perspective was just general farm management. Fish require just the right amount of water and quality of feed and oxygen and so on, just like any other animal. You manage inputs and get the right outputs. Obviously you can't manage what you can't control, and when we looked at our net-cage experience, we realized we were subject to the whims of nature, such as algae blooms. We never had the jellyfish swarms that the southern Pacific has had; those are pretty horrible. Low-dissolved-oxygen events were another one we knew we could avoid. Solid wall systems obviously help us control all those external systems.
As another alternative, the land-based systems can be either freshwater or sea water. It's our belief that the sea water systems need to be parked next to the sea, but the B.C. coast isn't generally amenable to providing hectares of waterfront, particularly to a public that is antipathetic, I think, to the industry as it is, and there are certainly lots of NIMBY--not in my backyard--folks. The freshwater land-based systems could be located almost anywhere, and we felt that if the industry wanted to grow using that system, the industry would likely move to the larger markets such as New York and Los Angeles, and move away from B.C.
We're trying to keep an industry here in B.C.
We feel that the ocean is a very solid resource that we must work with respectfully, so the intentional design of a system that uses the sea without abusing it would provide us with technology that would allow our industry to flourish. We designed our system--a solid-wall closed containment system and marine-based, as I mentioned--with commercial scalability in mind. That's really key, comparing it to other systems that we've seen.
We looked at a number of materials, dimensions of tanks, pumping oxygenation, and the various technologies that help this system run, and while mooring remains site-specific generally, we determined that a vacuum-infused fibreglass structure, fabricated in sections for ease of transport, would provide us with the asset life we were after. We found high-efficiency pumps and oxygen-generation systems as well, so we've reduced our energy consumption in our modelling.
I'll make a quick mention of some of the financial support, because I'm obligated to. The Gordon and Betty Moore Foundation of San Francisco and the Sustainable Development Technology Canada group worked with us, and our associated company, the Middle Bay Sustainable Aquaculture Institute, helped us move from our concept to implementation.
You have some pictures in front of you, and I've already discussed Cedar. You can have a look at those. We've also launched our first tank in a reservoir in Benxi in China. That tank design is designed for the reservoir environment. It's not as rigorous a tank as we'll be installing in Middle Bay later this year, but you can see from the pictures that the concept is there. It's solid. It sits nicely within the walkway framework and so on.
We're rearing rainbow trout there currently, and we'll also rear chinook salmon. The second tank should be operational by the end of this week, and by the end of the year we'll likely have another six tanks in the water there. You folks were talking about regulatory environments earlier. It took us about three months from setting foot in China to the time we had full permission and a site available to us in China. It's about three years for the same process in British Columbia, so that's an important point to mention.
I believe one of your members mentioned the weather characteristics of our country, and that's one of the nice things. We have lots of cold water in the winter. Our tanks are designed to draw water from the depths, so we stabilize water temperatures. Particularly in freshwater systems, of course, we can draw from the thermocline and have a rearing environment that is available to fish all year round.
4:55 p.m.
Conservative
The Chair Conservative Rodney Weston
Mr. Walker, perhaps I could interrupt to ask you to bring your comments to a conclusion.
4:55 p.m.
Director of Canadian Operations, AgriMarine Industries Inc.
Okay, sure.
I imagine you'll ask lots of questions later, but I want to mention that a number of parties around the world are interested in our systems. We have a memorandum of understanding with the Lax Kw'alaams on the north coast. We're working with other parties in China and other parts of Asia, and in Europe as well. I feel strongly that we're on the right track.
I'll leave it there. You can ask questions for more specifics.
4:55 p.m.
Conservative
The Chair Conservative Rodney Weston
Thank you.
Mr. Backman or Mr. Erenst, I'm not sure how you want to proceed, but please go ahead.
May 10th, 2010 / 4:55 p.m.
Vincent Erenst Managing Director, Marine Harvest Canada
Thank you, Mr. Chair, and members of the committee. Thank you for your invitation to testify before you today.
My name is Vincent Erenst and I am Dutch. I am accompanied by my colleague Mr. Clare Backman, who is the director of sustainability.
As to my background, I hold a master's degree in science from the University of Wageningen in the Netherlands. I've worked in aquaculture since 1984, in various countries and with a variety of species. I would also like to say that in the first 10 years I worked in closed land-based systems.
Before I let Clare speak to the environmental practices of our company, I'd like to give you some background on our company and make some comments on the testimony that has been presented to you in earlier sessions of this committee.
Marine Harvest is the largest salmon farming company in B.C. It produces around 50% of the salmon grown in the province. We have 550 employees, and together we grow 40,000 tonnes of salmon per year. Our sales this year will be around $250 million Canadian; 30% of that is sold in Canada and 70% is sold in the U.S. We operate 41 farms; each holds between 400,000 and 500,000 fish, but there are never more than 30 to 32 farms stocked. The others will be lying fallow for a period of two to six months.
We also operate six hatcheries. Three are recirculating land-based closed-system hatcheries, where we grow our smolts. All our eggs come from our own brood stock, which is here in B.C. We do not import eggs, and we haven't done that for many years. We have two processing plants where all the fish that we produce are packed and processed.
Our business is profitable. Over the last five years we've had very strong cashflows. We reinvest a lot into our business here in B.C. to make it more robust and more sustainable; however, we have not been investing in growth for the last seven years, basically, as this has not been a possibility.
Our company is part of the Marine Harvest group. This company had its origin in Scotland in the 1960s; it became part of a Dutch group in the 1990s, and since 2007 we have been a publicly traded company listed on the Oslo Stock Exchange. We are listed on the Oslo Stock Exchange because that's the best stock exchange for fish-farming companies. In the same way that mining companies are often listed on the Toronto Stock Exchange, fish-farming companies are typically listed on the Norwegian stock exchange.
We have 16,000 shareholders and, believe it or not, the majority of the shares are owned by institutions and individuals who are not Norwegian. Interestingly enough, some of our shares are in fact owned by Canadian NGOs, and they can look forward to a healthy dividend this year.
Contrary to what you've heard in earlier testimony, in B.C. we are really a Canadian company. Our staff is 98% Canadian. With the exception of myself--I'm Dutch--and three Chileans, we're all Canadian. The management of the company, again apart from myself, is fully Canadian. About 90% of everything we buy comes from Canada, and a very large part of that comes from B.C.
It has also been said that we don't hire people locally and that we pay low wages. I can tell you that the large majority of our employees are from the northern half of Vancouver Island, where we are today the largest private employer. The remainder of our people are from the first nations community in Klemtu, and in that area, where we operate five farms and a processing plant, virtually all our employees are from the local community.
As to wages, our hourly employees, after one year of employment, make between $18 and $30 an hour. They have extended health care and all the benefits, including a pension and an annual bonus.
It has been said that we are very secretive about our practices. This is definitely not true. We regularly report to our regulators with a great amount of detail. The corporation publishes an annual sustainability report that discloses a lot of information to the public. Marine Harvest Canada, this year, will publish its own sustainability report in August or September. It will have a lot of detailed information on our operations here in B.C.
I'd also recommend that you have a look at our website, marineharvestcanada.com, where there's a tremendous amount of information on how we grow salmon, where we grow them, their numbers, and so on.
Last but not least, in fact Mrs. Morton regularly writes us emails and regularly calls us. We always answer her and we always give her full information.
Before turning it over to Clare, I would like to invite all of you to come to B.C. and have a look at our operations. You can see a closed-containment freshwater land-based operation. Mr. Donnelly has already done so, and I would be glad to welcome a few more of you.
5 p.m.
Clare Backman Director, Sustainability, Marine Harvest Canada
Good afternoon, Mr. Chairman and committee members.
Clare Backman is my name. I'm a registered professional biologist. I have a bachelor's degree from the University of British Columbia. I've worked for both levels of government over the last almost 30 years, mainly in the field of salmon restoration, salmon conservation, and most recently, for the last 10 years, as the sustainability director for Marine Harvest Canada.
I want to go over a few points about our existing business and some of the ways that we are involved in environmental management, but before I do, I just wanted to straighten out a couple of points from earlier testimony.
I think on April 12 it was suggested that wild sockeye moving past farms in the early part of the decade, farms where the fish had an IHN virus, could have been negatively affected. The IHN virus is actually called the sockeye virus or the sockeye disease. Most sockeye salmon carry it in British Columbia, so it's not possible that they could have been exposed simply by passing by a salmon farm that was unfortunately experiencing that disease. That's just basic biology, which I think was left out at the time.
The second point is that it was suggested that sea lice on our fish are showing signs of Slice resistance. We have a chemical that we apply to the salmon, and I'll speak about that in a moment. Our company has seen absolutely no evidence of sea lice resistance to the Slice product. I'll cover that in a moment in a little more detail.
On April 14 the provincial veterinarian mentioned a couple of important things about sea lice and about the differences between Atlantic and Pacific sea lice. I'll just touch on those briefly. I think he mentioned that the Atlantic and Pacific lepeophtheirus salmonis, the sea louse of concern, is quite different in the Pacific from what it is in the Atlantic, as much so as chimpanzees and human beings are different genetically. He pointed out that this is likely the result of the experience that we've had in the Pacific area. The experience has been that the sea louse has not been the major concern on our Atlantic salmon here that it has been on Atlantic salmon in Europe.
Second, much of the research that has been done in the last few years has determined that Pacific salmon have the ability to mount an immune response to sea lice infection. They can actually shed the sea lice that are attached to them. The Atlantic salmon doesn't have that ability, so the Pacific salmon is actually less subject to damage than the Atlantic salmon is. Taken together, this information has led a lot of the researchers who are working on this area to now begin to see that sea lice are perhaps not as strong a problem as was originally felt.
It was also mentioned that the origin of sea lice is from the wild fish returning from the Pacific Ocean back to spawn. That's how they originally get onto the farms.
Having made those points, I don't want to suggest that we're not doing anything about the sea lice on our fish. We are in fact taking great measures to control and manage the sea lice. I brought along some information, and that information is contained in some papers that you can look at. They show clearly how our pattern of controlling sea lice ensures that the level of sea lice on our farmed salmon is very low when the wild fish are out-migrating as small juveniles. We're asked to meet a threshold of no more three sea lice per fish; we actually go much lower than that. You can see on the graph that during the spring season over the last number of years, the oviparous--that is, egg-bearing female--sea lice count on our fish has been maybe one or less than one.
The point I'm trying to make here is that we're paying close attention to managing our sea lice, and we're doing a good job of keeping the sea lice off our fish. Therefore, they can't transmit sea lice to the wild fish when they're out-migrating in the spring.
We're also participating with the researchers who are doing the work to look at the wild fish as well. I've provided information on those graphs to show you that the wild fish monitoring of the little guys when they're leaving in the Broughton Archipelago, which has been going on year over year, has also shown a precipitous decline in the infestation of sea lice on the wild fish. In 2008-2009, the DFO basically reported that there was pretty much zero effect, zero impact, from sea lice on the pink salmon in the Broughton area.
The point here is that the sea lice management is ongoing and it's effective.
I'll move a little bit now towards the issue of--
5:05 p.m.
Conservative
The Chair Conservative Rodney Weston
Mr. Backman, I have to interrupt you. We're running very close in time. If we could move into questioning now, possibly we could cover some of your points through the questions.
5:05 p.m.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Thank you very much, Mr. Chair.
I want to welcome all the participants.
Mr. Walker, are you involved in closed containment, or is it net fishery? Which are you involved in? If I understood correctly, you've shifted to closed containment for grow-out.
5:05 p.m.
Director of Canadian Operations, AgriMarine Industries Inc.
That's correct. We've developed a solid-wall marine-based system, which we call a closed system. It is a flow-through. It's not a completely closed-loop system.
5:05 p.m.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Okay, thank you very much.
Can you tell me this, then? We've heard a lot of conflicting information on this committee. We have heard, of course, that the lice come from the wild; they carry the lice in. We've heard that the biggest problem with sea lice is the fish that are farmed. How would you respond to that?
5:05 p.m.
Director of Canadian Operations, AgriMarine Industries Inc.
We don't have a lot of experience with Atlantic salmon. We've been primarily chinook salmon growers. As Mr. Backman mentioned earlier, the chinook salmon, the Pacific salmon, don't typically have issues with sea lice.
We've grown in a Future SEA bag at the Middle Bay site for about three years using chinook salmon. We found a total of three lice in about 150,000 fish there, so we know they're in the water, but they just don't seem to stick with the fish. It's a species issue, certainly, but it may be also a geographic location issue. It could also be the impact of the pumped sea water, which has higher oxygen levels than a typical net cage. There is certainly a lot of ground for research there.
5:10 p.m.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Mr. Backman, how would you respond to that situation that we've been hearing of here at this committee for a lot of months? We've seen demonstrations and pictures of fish that have been pretty well eaten by sea lice, and we were told that it's three per fish. It's hard to get a handle on just exactly where it is and whether it's much of a problem. Some experts would indicate to us that it's a major problem.
5:10 p.m.
Director, Sustainability, Marine Harvest Canada
The context I was trying to point out was that in Europe, with the differences in the sea louse and in the kind of salmon--not the Pacific, but the Atlantic salmon--there is strong concern about the effect of the sea louse on the Atlantic salmon. In the Pacific, where we have the Atlantic salmon being grown in the cages, we see less of a concern over damage to the fish by sea lice. The greater concern is the potential for an effect on Pacific salmon that might receive the sea louse from farmed fish.
What I was pointing out there is that, as the research has gone on, we've seen that the effect on the population of the Pacific salmon is not as great from the sea lice as was originally the concern.
5:10 p.m.
Managing Director, Marine Harvest Canada
May I make one additional comment?
5:10 p.m.
Managing Director, Marine Harvest Canada
You've heard from Dr. Krkosek that in the Broughton Archipelago over the last couple of years, management of sea lice by the farms has been such that the percentage of sea lice on wild salmon is extremely low. What I'd like to extend is that what we do in the Broughton, we do exactly the same anywhere else, so at this point in time, although we have lots of data only about the Broughton, we do believe that the effect of sea lice from farmed salmon, given the way we manage our business today, is very small.
5:10 p.m.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Thank you very much.
Mr. Erenst, you indicated that your sales were $250 million this year. Is that correct?
5:10 p.m.
Managing Director, Marine Harvest Canada
It's all produced in British Columbia, but 70% of it is exported to the United States.