Fisheries Committee on May 23rd, 2013

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you. I'm hoping somebody on the committee will note that and ask them when they come to this committee.

Obviously the work you do as an organization has to be informed somewhat by science. As you said, you appreciate the work being done by DFO in this area, and you appreciate the information they provide. So my plea to the government is, with all the cuts that are going on, I hope that there are no planned cuts to the few scientists we have left who are doing research in these areas. I know you can't comment on that, so that's more for me.

The other thing is that I noticed in this report, in the presentation you made today—and I wasn't here for the whole presentation, but I did flip through quickly—that when you got to “How can Federal government help?” there were a number of areas there. So I'm looking to you for some ideas of how this could happen. How could the federal government support marketing and promotion?

[Geoff Irvine]

They could by continuing to fund the AAFC marketing program and continuing to fund the Canada brand program. These are important for the seafood sector.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you.

How could we support the long-term improvements in industry structure?

[Geoff Irvine]

You could by continuing to support the Lobster Council of Canada.

[Some hon. members]

Oh, oh!

[Jinny Sims, NDP, Newton—North Delta, BC]

Okay. That was an open-ended question. You could have gone on about that.

[The Chair, Conservative, Rodney Weston]

Thank you very much. Your time is up.

Mr. Kamp.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair.

To begin, let me just correct that the short-term measures program was actually a $15 million program. I'm not sure if all of it was spent, but certainly more than $5 million was spent on that.

My main question is sort of a general one to begin. You're here because some members of the committee felt that the lobster industry is in a particular “crisis” or that there were things going on that were somewhat unusual. I guess that's my question. Is what we're seeing at this point in time, with the prices and so on in recent weeks, unusual? I understand that when they're low, that's not a welcome time, but is there anything that's unexpected, given the factors at play?

[Geoff Irvine]

I think what we see today is the culmination of a year of decreasing shore prices, and it is most definitely a crisis for some fleets. When the shore prices get to these levels, fishing operations simply become unviable. So there is very definitely a crisis.

On the selling side, the lobster has to be sold. We had companies go bankrupt last year. Despite what everybody thinks, there's very low profitability in the selling sector as well as in the fishing sector. Some fleets are able to make up for lower prices by catching more, but some simply can't. So definitely some fleets are really suffering in this environment of low shore prices and that impacts hundreds of communities.

I would say that we are definitely at a point now where there are big challenges.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

I think you said earlier, though, that these will work themselves out. Is it accurate to say that although these are certainly difficult times for harvesters and other sectors of the industry, the situation is not due to collusion or anything like that. There are sort of expected factors that come into play from time to time in the marketplace. Is that right, or am I missing your point there?

[Geoff Irvine]

I can't say that this will work itself out. Generally, year over year, these things work themselves out. I don't know where this is going to go. It depends on all kinds of factors: whether we keep landing the same volumes, how the currency does.... There are all kinds of factors.

Is there collusion? Is there something strange going on right now? No. From the facts in front of us, the activity and the way the market is behaving are fairly predictable. Our challenge is that today it's working at levels that are below the levels where the harvesters can be profitable, and that's a real challenge.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

No, I understand that.

In the long-term value strategy report, the Gardner Pinfold report, I think it was really helpful, near the end of it, when it talked about six key factors:

Four market factors—demand, supply, price and quality—are helped or hindered by two factors that can be managed by industry—degree of cooperation and the nature of competition.

I think that's very insightful, actually.Those last two—the degree of cooperation and the nature of competition—obviously do affect supply and demand, and so on. Are you making any progress on these?

[Geoff Irvine]

It just warms my heart that you've actually read the report. It's a big report, and not a lot of people have done that.

Those are two key factors. Have I seen a change in cooperation in three-and-a-half years? Absolutely. Do we need more? Absolutely. We have a real failure to communicate and cooperate going on in this industry, but it's better than it was. We're absolutely making progress there.

I can attribute that to actually having a lobster council where for the first time ever we have harvesters, shippers, processors, and dealers sitting around a table like this, three or four times a year, building relationships. It never really happened before outside of your own community. So that's been really important.

What was the second one: the nature of collaboration?

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Competition.

[Geoff Irvine]

Right, the nature of competition. Well, that goes to what Mr. MacAulay said. It's a cutthroat, competitive business, and we trade away a lot of our value in the industry by competition. The report clearly says that. The structure of the industry is such that we kill each other in the market, and we leave a lot out there that we should be keeping in Canada.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you very much.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Kamp.

Mr. Weston.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

I just want to repeat the kudos to our parliamentary secretary for his hard work.

On the other hand, I have to bring a challenge to the chair. We have a meeting on lobster. There's a problem with getting lobster out in the marketplace, and what do we have for lunch? Tuna.

[Voices]

Oh, oh!

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

At any rate, I'd like to take up the really interesting comments you've made, Mr. Irvine. Thank you for being here.

We were talking earlier about Maine and the circumstances in Maine. You were on the point of explaining how the increase in supply of lobsters in Maine was coinciding with the decrease in price. The $2.68 number sticks in my head.

Can you please confirm that I have that right, that it's clearly a supply-driven issue?

[Geoff Irvine]

I don't have the exact number here, but I think Canada imported roughly 200 million dollars' worth of Maine lobster last year to process in Canada, which would be over half of Maine's supply.

Maine lobster is a key component in the processing sector in Canada, in New Brunswick specifically, and in many other provinces. They were landing so much last summer that the price absolutely collapsed. It got down below $2 at some points. Much of that product came to Canada to be processed, which helped to collapse our market.

So yes, supply is a huge factor in this. It's massive. It's the factor.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

That's highlighted in the page in your deck entitled, “Canadian and US Supply and Price trends 2007-2009”.

[Geoff Irvine]

Yes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

To me, as I look at where government can play a role, and maybe where government, even if it were to intervene, wouldn't necessarily play a role, we can't alter the supply.

I felt that your requests were quite wise and fair, in that you seem to have reflected that overriding factor in your list of things the government could do to help.

[Geoff Irvine]

Well, I hope so.

No, the Lobster Council is not asking for any intervention when it comes to supply. The harvesters have to manage supply themselves. That's up to them. What we're asking for is help to market, promote, and manage the marketability factors.