Fisheries Committee on May 7th, 2014

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you for that.

I also want to touch on a report that was done by the Leslie Harris Centre of Regional Policy and Development, at Memorial University of Newfoundland, in September 2013. It's footnoted in a lot of the briefing notes that have been presented to the MPs on this committee, Mr. Chair.

This report centres on three particular licences. One is for Fogo Island—we didn't hear your presentation, Mr. Barnes—another is for the northern peninsula, I believe between Big Brook and Goose Cove, and the other is in southern Labrador, for the shrimp company you just mentioned. This report talks about how, in the allocations for these three particular areas of Newfoundland and Labrador, they use the shrimp allocations to help sustain local inshore or nearshore owner-operator fisheries within the regions. Basically, the royalties are used to diversify coastal regions and long-term economic and social sustainability.

Can you comment on that, Mr. McCurdy, on the need for community ownership of the resources off our shore given the principle of adjacency?

[Earle McCurdy]

Well, given that some of these quotas are in areas that are to the far north and beyond the reach of the vessels, other than with freezing technology—because you're too far to keep the shrimp fresh and get it back to a plant in the further north—the most beneficial use of the offshore licences was where it was tied back to inshore areas, such as in the coast of Labrador, where the Labrador Fishermen's Union Shrimp Company has played a role, such as in Fogo Island.

But again, it should be tied to adjacency. We can't use that to support the economy of the entire country. Nobody else is expected to do so with their resources. So yes, they can be used. Really, the question is that there's a real threat to the future survival of the economy of coastal communities in our province. That's why we're here and why we feel so strongly about the way that the brunt of their cuts got taken on the inshore sector in a way that was not at all a reflection of the way the increases went on, despite some of the evidence the committee heard.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Watkins, you talked about how you're down to one-third of the quota that you had when you initially got into this business as a boat owner. That's correct, right?

[Brad Watkins]

That is correct.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

How much longer can you continue to operate? Again, I see you as a rare breed. How many 42-year-olds are in the industry?

First, to Mr. McCurdy, what's the average age of the people in the industry, the fishermen, the boat owners?

[Earle McCurdy]

They'd be mostly baby boomers—55-plus.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Okay.

How much longer can you last with the amount of fish that you have left? You said that there were no more fish to pay the bills. That's your quote. How much longer can you last?

[Brad Watkins]

Right now, with the quota cuts that we just got again this spring in 3K, I'm going to start operating in the red in this year, and I have 1,200—that's one thousand, two hundred—other enterprises in Newfoundland in the same situation. They're going to be in the red this year because of these policies.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you very much.

Mr. McCurdy, you also mentioned the original press release that went out in 1997, when Mr. Mifflin announced that he would have quota for the inshore fleet. There was no mention then of LIFO. We've heard other witnesses explain how LIFO evolved.

Again, it wasn't mentioned in 1997, but to use a word that Mr. Barnes used earlier—he didn't present, but he did use one word that stuck with me—that is how you got “shafted”. LIFO wasn't mentioned. Has the inshore fishery of Newfoundland and Labrador been shafted?

[Earle McCurdy]

Yes, I believe so.

On the issue of the explanation, because there was a rule, a threshold brought in, in 1997, that subsequently got changed in 2003 without any transparency to that change, and then got changed again in 2007 without any transparency to that change.... In what areas of governance do we say that a rule made in 1997 is never subject to change?

I just explained about the original rule, the initial rule in 1978 that applied to the offshore sector: they had to have at least 50% of the catch processed in plants to create employment. That was one of the reasons why they got the allocation—to create jobs—and that got changed. So rules can change, and LIFO can change.

In fact, there was a case very similar to the wording of Mifflin's press release in 1978 about thresholds. In the crab fishery on the northeast coast of Newfoundland, in an area called 3K, there was a threshold there. The original licence-holders in that group had a line in the management plan for several years, which said that if the quota fell below a certain level, the level at which these other entrants came in, these later entrants, all the newer entrants would be removed and only the original fishing fleet would remain in that fishery. That's what the plan said, but several years later, about 10 years later, the quota fell below that threshold and the later entrants remained in the fishery.

Something similar happened in the gulf. The initial fleet appealed that to the Supreme Court in Newfoundland and lost the appeal. The grounds on which they lost the appeal were that the previous minister, 10 years previously, could not tie the hands of the current minister and that in fact the current minister had every right to change the policy—and did so—and the current minister or next year’s minister has every right to change LIFO and to reflect fairness in the sharing of the impact of the decline.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Mr. Kamp, go ahead.

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

Thank you, Mr. Chair.

Thank you, gentlemen, for being here.

Mr. Barnes, we didn't get a chance to hear from you, although we do have your presentation. We will be reading it.

Could I ask you a question, though, because I don't quite understand how you fit into the inshore-offshore picture. Can you tell us how you fit into that? Did the co-op fish the quota itself or was somebody else fishing for you? Could you give us a bit of a summary of that?

[Phil Barnes]

We're an inshore sector. Our fleet of boats fish for the cooperative. We have a membership of about 350 members. Most of those are fishermen. They supply the plant with inshore fish, the same as Mr. Watkins does. We also did have an offshore quota at one time, which we lost through the cuts in allocation, so we participated on both sides.

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

Would you now consider yourself part of the inshore fleet? Do you have one licence between you? How does that work?

[Phil Barnes]

No, it's all independently owned. Just like Mr. Watkins, they are all independent owners. They have a membership with the co-op. That's the only difference.

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

Let me move over to Mr. Watkins and Mr. McCurdy, if I may.

To be honest with you, I'm still confused about what your position is with respect to the LIFO policy. In 1997, when these 350-plus new temporary permits were issued to former groundfish fishermen, was it your understanding that this could only be temporary and that at some time in the future you would no longer be fishing for northern shrimp?

Mr. Watkins, were you part of that 357 in 1997? Is that when you got your licence?

[Brad Watkins]

Yes, it was my father before me. I fished with him and skippered his boat, but he got the initial licence at that time.

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

Then was it his understanding and yours—I'm sure you were part of the operation in some way—that this was only temporary and it could end?

[Brad Watkins]

No. It was a big cry.... It was basically the government of the day saying that it was the way we had to go because of the moratorium, the downfall of the Greenland halibut, the codfish, the moratorium.... We had to diversify, and this was the start of diversification.

I want to make myself clear. I don't know if these numbers are sinking in, but we had to spend hundreds of thousands of dollars to gear up to do this shrimp fishery. We did it on a temporary licence, but we were told this was the start of a new fishery, a big fishery taking the place of the groundfish. So we did that and we moved ahead, and eventually we were given permanent licences.

Today I'm being told that this permanent licence.... I just reinvested this spring. I have the only twin trawler in Newfoundland, with brand new technology that came from overseas, and here I am today: I haven't got a pound of shrimp landed yet, and I'm cut. I'm chopped. I have a $2-million vessel tied onto the wharf. I have 25% of my income in that vessel. I have nine crew members. That's nine families.

Again, I am one of 1,200 people who have invested and rationalized, which DFO forced us to do. And they did force us. We had no choice. If we wanted to survive and keep paying our bills, we had to rationalize. They took every other tool away from us.

So again, yes, we did get into the shrimp as a temporary licence, but in being told this was taking the place of the groundfish, and we did get a permanent licence, which I hold today.

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

I still want to focus on 1997, because everything I've seen, everything that Ernst & Young were able to present in their document as well, makes it pretty clear these were temporary permits. Nobody knew for sure if this balloon in the resource, as one of our other witnesses put it, would continue, or whether the ocean conditions would change and maybe the shrimp would go back to the north. It seems to me it was pretty clear that there was at least a reasonable possibility that these temporary permits could be temporary.

[Brad Watkins]

No. They were turned into permanent licences, sir, and that's what I hold today, a permanent licence. It's not a permit anymore. They were turned.... It was deemed that the shrimp stocks were strong enough, and we did get licences. We have permanent licences now, not temporary.

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

Well, I'm talking about 1997 still—

[Brad Watkins]

But this is today. This is not 1997. This is 2014 and I have a permanent licence that I'm having taken away from me.

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

Yes, the primary question for us, I think, is, did, in 2014, the minister follow the policy? I think that's the question for us and that's what we're trying to get to.

Mr. McCurdy, a number of times you have given me the impression that this policy changed, the definition changed, the wording changed, and so on; I think in a letter you wrote to the paper you used the word “surreptitiously”. But isn't it true there's a Northern Shrimp Advisory committee? For 1997, 2003, and 2007, for all of the perhaps wording changes of this policy, whether you agree with the changes or not, isn't it true that there is this committee that considers these things and DFO is not sort of surreptitiously putting wording in a policy with nobody being part of that process? Isn't that true?

[Earle McCurdy]

What is true is that there's a committee in place called the Northern Shrimp Advisory Committee. What is not true are statements that some people have made, from DFO, that the changes in the wording and in the policy definitions in that act were supported by our organization. I'll give you an example.

Here is what was in the 2003 Northern Shrimp Advisory Committee meeting. That was back in the days when they published this stuff in book form. As one of the long-term objectives for this fishery, it said: “To provide fair access to and equitable sharing of the northern shrimp resource with particular emphasis on the needs of the people and communities most adjacent to the resource, without any permanent increase in harvesting capacity.”

It said “particular emphasis to the people and communities most adjacent to the resource”. In the next iteration of this management plan four years later, that special consideration was removed, with no agreement from people on that committee. That's what I meant by “surreptitious”. I have no idea how that decision was made to remove that. They certainly can't say that the committee made a decision to do it because that was never approved by the committee.

I've traced back the various drafts they sent from the department on that integrated fisheries management plan in 2007. I went back over my files as far as draft 5, and that change wasn't in there. At some point between draft 5 and the next thing we saw, they said “here's the final document”, and it had wording in there that I would never ever agree to removing. So there was stuff that went on behind closed doors. It was not done in a transparent manner, sir.