Fisheries Committee on May 23rd, 2013

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

How far is that predicted into the future? We did a big report on snow crab, for instance, and we know the biomass cycles over, let's say, decades. There are highs and lows, and that obviously affects pricing.

[Geoff Irvine]

Snow crab is about a seven-year cycle. With lobster, I don't think we've seen that type of cycle. If you look at the numbers they're just all going up.

Are we worried about it? Sure. If we saw a collapse in this fishery it would be traumatic.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

And you don't see that.

[Geoff Irvine]

Not today.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

You mentioned the warming waters, climate change affecting the oceans. Does that have any influence on the U.S. or Canadian side and on areas within the Canadian fishery?

[Geoff Irvine]

I'm not a biologist and I don't spend a lot of time on this, but anecdotally, what we've seen is the fishery in the very southern part of the range, which would be Cape Cod, Rhode Island, that southern part of the range, has basically dried up. The lobsters are moving north to cooler water. What does that mean? I don't exactly know, but in the Canadian zone we've seen massive catches in the Bay of Fundy. We've seen massive catches on the north side of P.E.I. We've seen huge catches around Guysborough county in Nova Scotia.

You'd really have to talk to the DFO biology folks about that. All I can tell you is that it's given us a bountiful harvest to market, and it's been good on one hand, but a challenge on the other.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Right, in terms of pricing....

[Geoff Irvine]

That's right.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

I'll switch gears for a second on the certification. I know it did come up earlier, but Maine has been given the Marine Stewardship Council certification, and other areas in Canada are looking at that closely. How much do you think that certification does affect lobster price specifically, say, percentage-wise of landed product? You had mentioned that quality is key.

[Geoff Irvine]

It's a tough question. I don't know the answer.

Eco-certification in general in seafood products has not been shown to dramatically increase prices. It has been shown to keep prices steady. As I said earlier, it has basically become a cost of doing business, which is challenging for the industry to accept. It's a big investment, but it's really something we can't ignore. We know that we have a sustainable fishery. Unfortunately, we just have to have someone else tell us. Also, having that MSC logo will help us with our branding strategy; there's no doubt about that. Maine is already using it in their promotional strategy.

I didn't mention it earlier, but another big factor here is that Maine is about to pass a bill in their legislature—I'm not sure whether it has been talked about here—which will implement that levy. They have been wrangling over how to share the levy. Maine, of course, is in America, so the state regulates both the buyers and the fishermen. It's a hell of a lot easier than here, in our system.

They're about to pass it. It has gone through the committee in Maine, so I'm convinced it will be passed. It will produce $1 million next year, $2 million the following year, and $3 million the year thereafter, providing $6 million for promoting Maine lobster. This is another reason that we have to get at this.

I'm sorry, I digressed there.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair, and thank you, Mr. Irvine, for being here today.

Thank you for the information with respect to why these landings are going up. Obviously, they have a supply and demand situation. More supply means that the pricing, especially if you can't level it out....

I have a question on that, though. Are there optimum holding times for the stock if, for example, they are put in live pens, or if they are processed and put in vacuum packs, or whatever it happens to be? Is there a time beyond which it has gone past the best time to still be marketed, past optimum holding times?

[Geoff Irvine]

In the case of live lobster, it depends on how you hold it. If you do what they call holding it in tubes, whereby they have plastic tubes in crates, floating in water, that's one way to hold it. The experts on that would know. But there is definitely a shelf life. If you're holding them in crates, there's a time by which you want to move them. If you're holding them in above-ground storage, there's a time by which you want to move them. The folks who do that are very good at it.

In terms of processed products, there are best before dates on all products, and that system is closely regulated by CFIA and by our customers and shippers. With some of the newer products.... There's a pasteurized lobster product being developed, which is really fascinating. It has a much longer shelf life for retail and for food service. There's some neat stuff happening there.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Is that an example of some of these companies' looking at technology options to build, to possibly stretch this time out a little further?

[Geoff Irvine]

Absolutely. Look at that UHP product. It's a fantastic, high-end food service product that I think is going to grow.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'd like to ask you a couple of questions about the interprovincial committee that has recently been struck by the provinces. You indicated that you're not directly involved, but I'm assuming that some of the folks who are part of your council would be in that working group. Is that true?

[Geoff Irvine]

We don't know yet. What I know about that interprovincial panel is that it's going to consist of three people, one nominated from each of the maritime provinces. I'm assuming they will be experts in the field of understanding how markets build up and where the value is in the value chains. Of course, we will likely be an adviser to the panel. We have reams of data and research.

The terms of reference are just being written for that group. P.E.I. has its own panel or individual doing a similar thing. It's rather early days yet.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

In your recommendations, you talk about supporting long-term improvements in industry structure. There have been many recommendations made in previous reports, even by this committee. Can you specifically say what you mean?

You mentioned in passing that these folks might talk a little about restructuring the fishing seasons. That's obviously one way to do it. Have there been any discussions on quotas, or other types of things as well?

[Geoff Irvine]

I really don't know what they're going to be talking about, exactly. From what I've seen in the media and heard from various provincial people, it's mostly about structural questions: how the prices are set.... That's a big one, I think. Nobody likes the way the shore prices are set today; it's a mess. We've done a lot of work on that, and there are lots of options.

It's mainly a question of how prices build up, how the value is shared, how the prices are set. I think they're going to focus on things such as those. I don't know that they're going to be focusing on resource management issues, such as changing seasons. I don't think that's part of this, and I don't think quotas or any supply management question is part of this.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Judging from some of the information you've given us and I'm hearing from you today, but as well respecting Mr. MacAulay's comments, there has been a tremendous amount of work done in the last three years. It just seems to me that, if we keep holding hearings and just keep hauling people in.... Are we not better off to start looking at some of the stuff you're producing and look at areas in which government should or shouldn't be involved?

You've laid these recommendations out. You have talked about the levy system, about marketing promotion—all things that we can consider—but I'm wondering what the value of going through a big exercise is, when you have done a lot of this work.

[Geoff Irvine]

I don't know, but we have done all this work. We have a plan, which we're working on. It takes time. I can't speak to going through this again and again, but we have gone through it again and again.

Of course, one thing that's very practical in this issue is getting buy-in. We have a huge industry. I sit with my group; they're the most involved harvesters and most involved companies. But there are hundreds and thousands of people who aren't engaged. I guess any focus we can put on this is good. That's why I'm delighted that this panel is going to come together and that it has a high-level political focus. We need that. We need the industry to have that high-level focus to finally realize what we have to do.

So I don't think it can hurt.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Monsieur Larose.

[Jean-François Larose, NDP, Repentigny, QC]

Thank you, Mr. Chair.

Thank you to our guests. Being a fan of lobster, I'm happy to see you here. This is all very instructive to me.

You mentioned branding. I thought that was interesting. It's very “in” right now. I think it's a direction many people are looking in. You spoke about live lobster and the market in China. Do you believe that this strategy of branding is going to have an impact there or on various other markets that you're looking at? How can you stabilize the live market, which you seem to say is difficult, or say that sometimes there are shortages because the quality is really important?

[Geoff Irvine]

For China, we absolutely have to brand Canada. We haven't done a great job of it.

Some companies have done a great job of it. As I said, Homarus americanus, our lobster, is known in China as “Boston lobster”. Like “Kleenex”, it's a generic term: Boston lobster. We need to do something about that, because most of the lobster sold in China is Canadian lobster. Whether it's sold by us or by Americans, it's our product. So that is a place in which we absolutely have to develop and establish a strong brand.

The challenge with branding is fascinating, because every one of the various provinces involved in this industry has its own parochial feeling about its own lobster. Quebec has developed recently a very nice lobster brand, and they're promoting it very actively around the world. Nova Scotia is talking about establishing a lobster brand. P.E.I. would like to establish a lobster brand.

My challenge on a daily basis is to remind people that we're stronger as Canada than we are as provinces. We know this from all the work of Agriculture and Agri-Food Canada. The Canada Brand program knows that. I'm a bit of a broken record, but the Chinese know Canada. They don't know Quebec or Nova Scotia.

That's another thing that I need help to focus on: Canada, and not Cape Breton or P.E.I.

[Jean-François Larose, NDP, Repentigny, QC]

I believe that a couple of years back Pêches et Océans put in place a tagging system under which the fishermen do the tagging. But there's not really any control, and the fees are placed on them. Is there anything that we at our level could do to make it perhaps more...? “Unisync” may be the word I'm looking for.