Fisheries Committee on Dec. 5th, 2013

[Lawrence MacAulay, Liberal, Cardigan, PE]

Were you involved or was the Department of Fisheries and Oceans involved in...? There was much made about a trip to China and that we were going to establish seal markets in China. Then we established nothing. Were you involved in this, or was there any proposal made to China or not?

[David Bevan]

There were proposals made to China regarding seal meat. There was an arrangement made that we would have certain certification processes and health and safety processes put in place to gain access to the market. Those are still being worked out.

[Lawrence MacAulay, Liberal, Cardigan, PE]

You would have to agree that we're not gaining ground; we're losing ground fast. We've lost markets in the United States, Mexico, China, Russia, and the EU.

[David Bevan]

Certainly that's a concern we all have with respect to the market access. Having the product is no good without the market access, and that is definitely our preoccupation, to try to get those markets opened up.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Is there a more monitored seal hunt in the world than the Canadian seal hunt? I think we've been very open.

[David Bevan]

Yes, we have been open. We've allowed observers. We've had considerable monitoring. We know we have a very strong resource, etc. Is it the best in the world? It's very good. As far as a commercial hunt is concerned, it's probably up there. I'm not aware of any hunt of the scale of Canada's that is monitored to the same degree, anywhere around the world. There are small hunts elsewhere that may be well monitored, just nothing on the scale of Canada's.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Wouldn't you think it would be difficult.... I've never discussed a country-to-country trade negotiation, but it would seem to me very difficult for one country or one community of countries to say you cannot do something when in fact they're doing it themselves. I'm certainly indicating the seal hunt. They have one themselves. We have one that's monitored carefully. We have veterinarians on the ice. Perhaps we were too open. It's on TV.

[David Bevan]

We have the Charter of Rights and Freedoms—

[Lawrence MacAulay, Liberal, Cardigan, PE]

Oh, right.

[David Bevan]

—that allows people the opportunity to move, freedom to travel. That means we did not have any authority to impede their ability to travel to the ice and to observe the hunt.

[Lawrence MacAulay, Liberal, Cardigan, PE]

[Inaudible—Editor]...about it.

[David Bevan]

We definitely put in controls, but we could not do more than what we did.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. MacAulay.

Mr. Donnelly, we'll move to a five-minute round now.

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

Thank you, Mr. Chair.

Good afternoon to our witnesses.

My first question is with regard to imports. There's been a lot of talk about Canadian exports going into the European market, opening up new markets. I'm curious about the impact of European fisheries products coming into the Canadian market and what impact that might have on our existing markets.

[David Bevan]

I don't think there's a lot to be concerned about. Unfortunately, Canadians are not large consumers of fish. On a per capita basis, we're in the range of around 15 pounds per year. The Iberians—Portuguese and Spanish—would consume about 10 times more per person than that, so that's a big market. It's not just a big market in terms of 500 million people; it's a big market in terms of the fact that northern Europeans, as well as southern Europeans, have a tendency to eat a lot more fish than we eat.

Therefore, I think we're going to continue to be a country that exports 85% of our products, rather than being a big importer. We import shrimp, generally aquaculture shrimp, and we import tuna. We import products of that nature. We are not a big importer of other types of fish. I think the flow of fish will go in our favour.

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

You see it more as additional choice for consumers that won't displace any current fishery products.

[David Bevan]

No, I don't think it'll displace Canadian products from the market. I think, because of the fact that they eat so much more than we do and now we have equitable play in terms of those tariffs, the problem may be that more fish will go to Europeans and there'll be less available for Canadians. I don't think there'll be a problem with the Europeans displacing Canadians in their own market.

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

Turning to eco-certification, I have three quick questions that maybe you could answer in the remaining time that I have.

I'm curious whether DFO will be encouraging Canadian fisheries to obtain eco-certification in preparation of the ratification of this trade agreement. I'm also curious about whether you would provide support, and what kind of support, to the fisheries in this effort to move to certification. Finally, does eco-certification apply to the aquaculture industry?

[David Bevan]

Work was done by the department with the aquaculture industry on organic labelling and on the certification process. That work was done. We are already seeing that the fisheries that are of great importance to the European market have already sought, and obtained in many cases, eco-certification. The shrimp fishery and some of the lobster fishing areas are now actively engaging in getting their eco-certification.

We support it, not with money or anything of that nature, but rather with our management. We provide advice, information, and clarity to the certifying body as to how we manage the fishery. Generally, our management is such that they get certification, with some exceptions I would say.

For lobster certification, there will be a need for some of the practices in some of the LFAs to change, and they have been modified recently to make sure that at least half the females get a chance to reproduce before they are caught.

There has been work done by the department in conjunction with the industry, which has already sought certification for many of the products that are going to benefit from the dropping of the tariffs. I think we are well positioned in that regard.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Donnelly.

Mr. Kamp.

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

Thank you, Mr. Chair.

I have just one question and then I'll pass it over to Mr. Sopuck, who has a follow-up question.

If I understood your comments earlier, you were anticipating that when most of the tariffs were removed at the time of coming into force, and all of them within seven years, the primary benefit for seafood producers that export from Canada into the EU is that they wouldn't have to pay the tariffs and so they'd have more profit.

I just wonder if you think that will be the primary benefit. Will they keep their prices the same and just pocket the tariff money, or do you think that will be a mechanism for them to gain more of the market?

The follow-up question would be, if they do that, could we anticipate any sort of action from domestic retailers, for example, in the EU, and any sort of quasi-protectionist activities in order to protect their share of the market if they see the Canadians coming in with their now lower-priced products to take away their market share?

[David Bevan]

I certainly hope our products don't drop in price and that the benefit of the tariff being removed will be passed on to the European consumer. It's a 10% add-on in general terms to the bottom line of companies, so it's a possibility that the simplest way you could look at it is it's added to their profit. If the prices to consumers in Europe remain the same, that could be added to the profit of Canadian companies. I hope that is not where it stops and that we don't compete the price down, Canadian against Canadian, to lower the price in Europe as a result of the removal of the tariffs. Those would be unfortunate outcomes, because it doesn't deal with what is available. They wouldn't be taking advantage of the opportunity.

Ideally, that money would put us back in the situation where we would be as competitive as other parts of the EU or other parts of Europe, with Greenland shrimp, etc. We'd be back into a competitive position and we could have our businesses form partnerships with European retailers, with European companies, to maximize the benefits to Canada.

The worst outcome would be to take the benefit that's available and then lowball each other to remove the benefit and provide a cheaper product to the EU consumer. That would be very unfortunate. One hopes there is no way that's going to happen and that they'll use the level playing field to form a different business relationship with the retailers in Europe and take full advantage of the opportunities that will be presented by this trade deal.

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

Thank you.

[Robert Sopuck, Conservative, Dauphin—Swan River—Marquette, MB]

Thanks.

I want to go back to the Chinese market for a minute. The overall fur trade in Canada is now in the $750 million a year export range, and from 2000 to 2012 growth in fur exports increased by 300%, and prices have skyrocketed for most fur species. Why hasn't seal fur been able to “ride the coattails” of the other fur products in China and see a similar expansion in Chinese purchases?

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

Did you say “ride the coattails”?