Finance Committee on May 7th, 2020

[The Chair, Liberal, Wayne Easter]

I'll call this meeting to order.

Welcome to meeting number 26 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of Tuesday, March 24, the committee is meeting on the government's response to the COVID-19 pandemic.

Today's meeting is taking place by video conference and the proceedings will be made available via the House of Commons website.

In order to facilitate the work of interpreters and ensure an orderly meeting, I would like to outline the following. In order to avoid both languages being heard at the same time, it is asked that members and witnesses stay on the right channel. If you're speaking English, be on the English channel, and if you're speaking in French, stay on the French channel. This makes it a lot easier for the people interpreting in the booths. The use of the headset with the boom microphone is highly recommended, and when speaking, please speak clearly and slowly.

With that, we will go to our first witnesses.

I want to thank everyone for being here from your locations. It is certainly a new system we're operating under these days.

We'll start with the BC Seafood Alliance, with Christina Burridge, executive director.

[Christina Burridge, Executive Director, BC Seafood Alliance]

Thank you very much, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

I would ask everyone to try to hold their remarks to about five minutes, if you can. We have quite a number of witnesses, and we want to get in about three good solid rounds of questioning.

Go ahead, Christina.

[Christina Burridge]

Okay. I'll do my best to keep to that.

The BC Seafood Alliance is the largest commercial fishing organization on the west coast. Our full members are both harvester associations, representing the owners and operators of commercially licensed fishing vessels in most major fisheries in B.C., and processing companies, which process about 70% of B.C. salmon, herring, groundfish and some specialty products. We really appreciate the opportunity to give you a sense of the impact of COVID-19 on west coast fisheries.

Our experience started in the last week of January, when sales of geoduck, Dungeness crab and other live products ended when the important lunar new year markets in Asia shut down. Those products have a wholesale value of about $150 million annually. We've since seen that extend to virtually all food service sales worldwide. That matters to B.C., because many of our species, though not all, were destined for the high-end global restaurant trade.

Some species are adapting reasonably well to a market that is now predominantly domestic and retail. That means lower prices to the processor because of higher retailer margins and so too to the harvester.

Some of our species—geoduck, herring roe, sea cucumber—will never have a domestic presence, so we need to figure out the air cargo and container problems that prevent our getting them to the Asian markets that are starting to recover. These species, with a couple of others in the same predicament, amount to almost half the west coast wholesale value.

With slow markets, we reduced processing production and then reduced it again to space out the line for physical distancing in the plants. We've been working with our plants to make sure that each has a COVID-19 plan. Since these are all federally inspected plants, we do need co-operation between the CFIA and the provincial health authority to review those plans and provide some reassurance that they are sensible and careful of workers' safety.

For both vessels and plants, access to PPE is essential. The funding that has been offered is nice, but access is proving difficult, and we fear that plants could run out, with serious implications for domestic food security.

Plants of course need fish to be able to operate at all, so we need to be able to go fishing, which means keeping our harvester crews and communities—often in remote parts of the coast—safe. We've been working with other B.C. harvesting organizations to implement fleet-specific guidance covering every aspect of a commercial fishing trip: fourteen days' isolation beforehand, on-board practices, in-port procedures and offloading and end-of-voyage procedures.

For almost all species, production has dropped 50% or more, and prices to harvesters have dropped as well, by about 25% for halibut, 45% for geoduck and perhaps as much as 75% for the prawn fishery when it opens next month. Across the board, whether for harvesting or processing, we are getting less money, while our costs have significantly increased.

On the emergency support measures, we appreciate the recent announcement of the seafood stabilization fund, although realistically this will not cover much more than PPE and the emergency costs of operating. Automation technology and capital expenditures on freezing capacity start at about half a million dollars. For instance, automated equipment for vacuum packaging for retail costs about that much.

The CERB has worked well in many fisheries, but not for salmon harvesters, many of whom had a disastrous season in 2019 as a result of poor returns. Most essential for us, however, is access to the CEBA and the CEWS, especially the former. The CEBA should fit us exactly—a program to help small to medium-sized businesses continue to operate—but the employment structure in the fishery sector differs from conventional business. In most fisheries, the crew are not wage-earning employees but co-adventurers who share in the value of the catch.

While they are hired and employed by vessel owners, crew are usually paid directly by fish buyers based on direction for the remuneration formula from the vessel owner or skipper. Each individual crew member receives their T4 with earnings in box 78 or 80, rather than box 14, from the fish buyer, but they’re not actually employed by the buyer. The actual business, the fishing enterprise, therefore has no payroll according to the T4 and the current CEBA rules. We suggest that vessel owners be considered small businesses and all earned income from their crews submitted to the CRA on a T4, no matter the box and including dividends, be accepted.

Fish harvesters have many costs in gearing up for a season, including DFO licence fees, and often do not get fully paid until the product has sold, which can be months later. Normally they borrow money from processors or banks; neither source is readily available this year. For them, the CEBA would do exactly what it’s supposed to do.

I want to leave you with a last message. Canada and B.C. have both recognized that fish harvesting and seafood processors are an essential service, providing food for Canada and the world and contributing to food security. There are many things that government can do to help, but perhaps the most important one, as we struggle to get fisheries open and operating safely, is for Fisheries and Oceans Canada to be open to creative and flexible temporary management measures that do not threaten conservation but help us operate, and in some cases, help us reduce costs.

Thank you very much. I appreciate the opportunity.

[The Chair, Liberal, Wayne Easter]

Thank you very much for your presentation.

We'll turn, then, to the Canadian Independent Fish Harvester's Federation, with Melanie Sonnenberg, president; and Jim McIsaac, vice-president.

Melanie, I think you were going to give it a roll.

[Melanie Sonnenberg, President, Canadian Independent Fish Harvester's Federation]

Thank you, Mr. Chair, and thank you to the committee for having us appear today.

The Canadian Independent Fish Harvester's Federation is the national advocacy voice for over 12,000 fish harvesters and owner-operators that land most of Canada's seafood. We are the people who produce the most of Canada's crab, lobster, wild salmon, shrimp and groundfish.

Our seafood landings put Canada among the top fishing nations in the world and make us the single largest private sector employer in most coastal communities.

The seasonal nature of the Canada's fisheries sector has left it exceptionally hard hit by COVID-19 with the critical decisions forthcoming about the ability of harvesters to launch their vessels. Canada's fish harvesters may very well have to forgo critical fishing seasons due to the collapse in foreign markets and no support to pivot to local markets.

The federation has been closely following the various emergency support programs announced by the Government of Canada in response to the economic crisis caused by COVID-19. Of particular interest to our members are the Canada emergency business account, the seafood stabilization fund, Farm Credit Canada and the emergency wage subsidy. Unfortunately, due to the nature of our industry as well as the various restrictions and limitations on the programs, it is difficult if not impossible for fish harvesters to access the programs as they are presently structured.

Considering the unique nature of our industry and without having a fisheries-specific dedicated plan, we are proposing the following adjustments to the existing programs as well as some new ones for consideration.

In the short term, extend employment insurance benefits for a 12-month period for all fisheries workers, independent harvesters, crew and plant workers. That would include all B.C. salmon workers who qualify for EI based on the 2018 fishing season.

Adapt the Canada emergency response benefit and Canada emergency wage subsidy programs to the fisheries sector, so the 12-week program adopts seasonally appropriate timelines for this sector and has qualifying periods between May 9 and August 1, 2020, subject to extensions into 2021.

Wave or reimburse all 2020 federal fees related to the commercial fishery including but not limited to licensing fees, vessel registration, IQ fees, mooring fees, etc.

Introduce a program similar to the Canada emergency business account for fish harvesters, under which the maximum loan amount would be significantly increased from the current $40,000 maximum and with the deadline for the forgivable 25% portion of the loan extended by two years to December 31, 2024.

Modify programs such as Farm Credit Canada and the business credit availability elements of the COVID-19 Canada emergency response plan to meet the unique challenges facing independent harvesters.

Defer payments and freeze interest on existing bank and provincial loans related to the fishing activity for a minimum of 12 months.

In the medium and long term, work with industry to develop a Canada purchase program to get healthy protein from fishermen to Canadians, institutions, local markets and food banks. This would support food security and stabilize seafood markets.

Support critical infrastructure required by the industry, such as loading and offloading facilities, shipyards, fuel docks, ice plants, etc., also incorporating the new requirements to deal with COVID-19.

It is important to emphasize how urgently these proposed measures are needed by our industry. This pandemic came at a sensitive time in the fishing season, making recovery throughout the rest of the year extremely difficult if not impossible. Without these supports, the future livelihood of many independent fish harvesters is in doubt, as is in turn the economy of many of Canada's coastal communities.

The challenges of this pandemic have demonstrated that now more than ever it is important to protect domestic and international food supply chains, and those include seafood.

We understand that the finance department designed these programs for a broad fit and is still working to adapt them to sectoral considerations. Recognizing that adapting these programs to the fisheries sector presents unique challenges, we stand ready to assist government to ensure that fish harvesters don't fall through the cracks. Please accept our offer of ongoing support and dialogue to protect the economic well-being of our vibrant coastal communities.

Thank you for your time and attention to this matter. By working together we can ensure that our Atlantic and Pacific fisheries remain intact at the other end of this and that they are ready to support in Canada's economic recovery.

In closing, I would again like to thank the entire committee for inviting us here today and for hosting this panel on fisheries, ensuring that our vital industry is not overlooked. We're looking forward to your questions.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much for your presentation.

We'll now turn to Gulf Nova Scotia Fishermen's Coalition, Leonard LeBlanc.

Welcome, Leonard. The floor is yours.

[Leonard LeBlanc, President, Gulf Nova Scotia Fishermen's Coalition]

Thank you, Mr. Chairman. As I think everybody knows, we've known each other for quite a while.

Mr. Chairman, fellow board members and fellow industry reps, the Gulf Nova Scotia Fishermen's Coalition is thankful for the opportunity to be able to appear before you, the Standing Committee on Finance.

In the past, this industry has survived the collapse of the groundfish stock in the southern Gulf of St. Lawrence in the late 1980s and early 1990s. The worldwide financial market crash of 2008 caused some of my members to withdraw money from their RRSPs to pay their crews and boat payments. The fishery is now facing a crisis that it has never witnessed before. We have very poor market conditions, if any at all. The COVID-19 virus, which is not the common cold or flu, has taken the lives of many Canadians and unfortunately will continue to do so.

Today, I appear before you to bring to your attention issues regarding the Canada emergency business account and the Canada emergency response benefit.

First, CEBA cannot be accessed by the majority of the members I represent. They have only one crew member and their payroll is under $20,000. As was previously mentioned, some of the harvesters have the fish buyer pay their helper; therefore, they don't have a payroll number. One of my members was denied because his employee is an immediate family member. This is discrimination and probably unconstitutional.

Second, I will talk about the $40,000 tax-free loan. Most harvesters are not registered with the provincial registry of joint stock companies. If their financial institution is a credit union, they will receive the loan, but if they are a client of the Royal Bank, they will not receive it. New entrants who recently bought a commercial fishing licence will simply not qualify. We would suggest that the government require that harvesters who need assistance only show proof that they have a GST number, a personal fisher registration or PFR, or a lobster licence number to qualify.

I will also mention the suite of points presented to Minister Jordan and other ministers by the Gulf Nova Scotia Fleet Planning Board for financial aid. I am secretary-treasurer of that board.

We wish to extend employment insurance benefits for all fishing industry seasonal workers: harvesters, crews and plant workers. For example, a harvester receiving $576 a week and having his EI benefits ending soon would have his EI benefits automatically reactivated for a supplementary 12-month period until the next fishing season. Currently, harvesters are on EI before and after their fishing season. This request would add an additional 12 weeks at a cost of $6,912 per harvester.

We are asking for help in deferring payments and freezing interest on existing bank loans and provincial board loans for 12 months.

Defer mortgage payments and freeze interest for 12 months through Canada Mortgage and Housing Corporation and other mortgage insurers. I know that the government does not have power over the private banks, but I think it could probably help them in this way.

Defer 2019 income tax payments and freeze the interest rate for 18 months.

Enable RRSP withdrawals, tax free, for 2020.

Special income tax credits could be used to stir the economy, because we're not only in a mess now but we have to come out of it sometime.

We ask for interest-free loans in the form of lines of credit of up to $120,000 to fishing enterprises of which 25%, up to $30,000, would be eligible as a subsidy, tax free, if the loan is repaid within five years.

A wage subsidy of 75% for fishing enterprises that may be able to fish for other species this year could be used.

As well, eliminate the fees for fishing licences for those who aren't fishing.

I will take the opportunity to thank the following MPs who have helped us greatly: Mike Kelloway, who is my MP; Dominic LeBlanc; Serge Cormier; Wayne Easter; and Sean Fraser, to name a few.

I will leave you with the following comment, which a processor from New Brunswick told me. He said that in 2019, 10 million pounds had no home and was bought by the processors in New Brunswick. He said that in 2020, 20 million pounds plus of lobster will have no home, period. We need help, and we need financial help quickly.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thanks very much, Leonard.

We'll turn now to Groupe MDMP, with Maxime Smith, commercial director.

The floor is yours.

[Maxime Smith, Commercial Director, Group MDMP]

Good afternoon, members of the committee.

My name is Maxime Smith. I am replacing Jean-Paul Gagné, the managing director of the Association québécoise de l'industrie de la pêche. The association represents sea product processors. Unfortunately, Mr. Gagné could not be here this afternoon.

We thank you for the opportunity to present today.

COVID-19 started in Quebec just as processing plants were getting ready for the new season. The fact that—

[Sean Fraser, Liberal, Central Nova, NS]

On a point of order, Mr. Chair, I'm having an exceptionally difficult time hearing. It might be the same issue we've run into before with the speaker's language not mirroring the language that they're speaking. The issue is that I'm hearing both the translation and the speaker at identical volumes, which makes it difficult.

[The Chair, Liberal, Wayne Easter]

That's strange.

Maxime, just check at the bottom of your Zoom screen and make sure you are on French. You need the symbol on the same language as you're speaking. Then it's easier for the translators.

[Maxime Smith]

Would you like me to start from the beginning, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

Just start from where you were. That's fine.

[Maxime Smith]

Okay.

COVID-19 started in Quebec just as processing plants were getting ready for the new season. The fact that the fisheries sector was quickly recognized as an essential service allowed a number of industry players to mobilize and implement measures to limit the spread of the virus. Protocols have been created for each segment of the value chain, and to date they have proven effective. The protocols have been developed in cooperation with other companies in the agri-food sector, whose common objective was to secure the food supply chain. In times of crisis, everyone working together is very important, and still today, we are offering to share the protocols that have been developed with all Canadian companies.

When Fisheries and Oceans Canada opened area 17 for the snow crab fishery on March 25, a clear message was sent to everyone that fishing would actually take place. We must remember that, at that time, opening the fishing season was uncertain. Most snow crab processing plants in Quebec were ready to take action in early April. We had asked that the opening date be April 10 for area 12, which is the largest in the gulf in terms of volume. This area is also affected by measures to protect right whales. The decision to postpone the opening of area 12 until April 24, to allow even more time for the plants that still had not completed their COVID-19 protocols, was very disappointing.

We must mention that other industries in the agri-food sector did not have the “opportunity” to obtain days, or even weeks, to implement new measures. Let me remind you that the objective of this season was to begin fishing in area 12 as soon as possible in order to limit interactions between fishers and right whales. The ice conditions were conducive to early fishing, which could have started on April 10. A lot of fishing could have been done before the whales arrived, at least by Quebec fishers.

Today, right whales are already in the waters of the Gulf, which is about two or three weeks earlier than expected. Fishing areas are already closed not far from the Quebec coast. To keep the U.S. market open for Canadian snow crab in the years to come, it is recommended that we review our protocol for opening the fishery to ensure that as much fishing as possible is done before the right whales arrive, in the interests of all Canadians. The economic consequences of closing the U.S. market would be devastating for our industry.

The lockdown in North America and internationally has clearly changed market conditions. Major segments of consumer sea products have completely disappeared, at least temporarily, which has created a great deal of uncertainty for many companies. However, to date, market conditions remain generally acceptable for frozen products. The workforce was very fearful at the outset. Processing plant managers have provided training to employees, who were reassured once they saw the measures put in place. Today, the feedback we are receiving from employees is very positive. They want to work and are proud to fulfill their social role during this crisis.

The new Canadian seafood stabilization fund has been well received. The processors have invested significant amounts of money to protect their employees. Since the program was announced, we have heard much less about the measures in the plants. The announcement may have had the effect of reassuring workers in some regions of the country. However, the absence of foreign workers will have a major impact on plant production capacity, particularly during the lobster season. The fact that the new measures are delaying the arrival of temporary foreign workers and that we are still uncertain as to when they will arrive is in itself a major problem.

Some companies will likely emerge weakened from this crisis. Unfortunately, we may well see more acquisitions of Canadian companies by foreign firms between now and the end of the year. In the medium term, this trend will be very harmful to the Canadian economy, because we will see a drop in the price paid to fishers for the resource, which means a lower GDP from the fisheries sector. Worse yet, our food security is at risk in the medium term.

Thank you.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Irvine.

[Geoff Irvine, Executive Director, Lobster Council of Canada]

Thanks very much for having me join you today, Mr. Chair.

The Lobster Council of Canada is the only organization that includes all parts of the lobster value chain, including harvesters, shore buyers, processors, live shippers and first nations. We focus on market access issues, marketing and promotion of Canadian lobster, communication and encouraging collaboration in the most profitable seafood sector in Canada. The sector has annual landings of over 200 million pounds, representing $2.5 billion in export sales.

This pandemic has had a dramatic impact on the lobster market around the world. Our challenge, just like Christina's, is focused on the fact that 75% of processed and live lobster is consumed in the food service sector. This sector has effectively collapsed over the last three months, beginning in Asia, Europe and finally North America.

I will now provide an update on the market situation starting with live lobster, a market that represents about 45% of our total lobster export value.

The live market collapse began in China in late January. The ensuing quarantines throughout the world, shutdown of borders, significant holdover of live inventory and cancellation of air traffic further depressed the live lobster market. It caused an immediate collapse in the winter shore price, which is the price paid to harvesters, from $10 to $4.

Beginning in early April, the live lobster market in China and the Pacific Rim began to slowly return, with consumers procuring their seafood from retail and e-commerce channels. However, this demand from Asia is a fraction of where we were pre-COVID, and is based on a much lower market price than we had enjoyed in January.

It is important to understand that volumes being harvested today, on May 7, given bad weather and actual effort on the water, are a fraction of what will be landed one week from now, when every season in eastern Canada will be open. At the end of April, landings were approximately 25% of where they'll be in one week’s time, when all harvesters take to the water in all five eastern provinces.

I will focus now on the processed lobster market. The markets are quite significantly different but they're interrelated. The processed lobster sector represents about 55% of our total lobster export value.

Processed lobster buyers from the United States make up 75% by value, and include casinos, cruise lines, quick-service restaurant chains and independent restaurants. All buyers in our key markets, which include the U.S.A., European Union and Asia, are uncertain of business recovery timelines, the volumes they will require and what price level will work to bring consumers back. There's a lot of uncertainty in the food service sector, as we all know.

Due to typical seasonal buying and production patterns, processed lobster market prices began to retreat in February, a little later than the live sector. The price decrease has accelerated as the spring production periods approach and orders from customers worldwide are simply not there. With lower short-term shore prices and the expectation of further shore price drops due to expected fishing volumes that will exceed plant capacities, labour issues, which have been talked about, that affect plant capacity and a challenging market, exporters have seen a dramatic drop in the markets, resulting in writing down their high-priced inventory of lobster tails and lobster meat that they produced early in the winter.

There is some interest in Asia for in-shell whole frozen products at a price and volume that may or may not work for the harvesters and processors who produce these products. That's a bit of good news. Variables that could change the spring dynamic for both the live and processed sectors include the pace of return of key markets, harvesters' fishing decisions, bad weather and challenges with the North Atlantic right whales that Max just talked about. When all seasons are open, it is expected that experienced buyers will demand lower prices for all lobster products, which likely will cause the shore price to drop for all. In summary, the markets for both live and processed lobster are generally bleak, with some returning business but at a fraction of where we typically are in early May.

In an effort to help harvesters and the shoreside sector plan for this challenging spring season, the Lobster Council has developed what we call the “Canadian lobster model”. We did some modelling. The model takes 2019 data on lobster volumes in the U.S. and Canada, processed and live exports values, as well as estimates of when we expect the key markets to recover. This data then provides us with an estimate of what we're calling “stranded” lobster, which is lobster without a home or market. I think Leonard talked about it a minute ago. We have that estimate for the end of every month and the end of 2020.

Our latest modelling estimates for this year show that at the end of 2020, if we do exactly what we did last year, we could have upwards of 90 million pounds of lobster stranded and without a home at the end of the year. I don't think any of us want that.

I will sum it up by saying that our challenge as a sector is to balance public health concerns on boats and in plants, and lobster season openings and plant production capacity, with slow and uncertain markets around the world.

We need some lobster, but as our model shows us, we don't need anywhere near everything that we can catch.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you, Geoff.

We'll turn, then, to the Maritime Fishermen's Union, with Martin Mallet, executive director.

Go ahead, Martin.

[Martin Mallet, Executive Director, Maritime Fishermen's Union]

Thanks again, Mr. Chairman, for the opportunity to speak today, and to the whole committee for also agreeing to this.

The Maritime Fishermen's Union represents over 1,300 independent inshore owner-operators in New Brunswick and Nova Scotia. Since its creation in 1977, the MFU's mission has been to represent, promote and defend the interests of inshore fishermen and their communities in the Maritimes. The MFU is also an active member of the Canadian Independent Fish Harvester's Federation, which is at the committee today.

Since the beginning of the COVID-19 pandemic in January, fishermen's associations across Canada have been assessing its impact on the livelihood of their members, the economic sustainability of the industry as a whole and the coastal rural communities that depend on it. In Atlantic Canada and Quebec, one of the most important fisheries in Canada is about to open within a week, the lobster spring fishery, and still no specific support programs have been announced to get our fishermen and crews through the impending crisis. The wait for an industry-specific program that takes care of its seasonal nature and other particularities is further damaging the industry by creating confusion and hampering the planning process as we move ahead with this fishery.

Indeed, to move forward in the current conditions, without a financial support program for harvesters and crew members, will severely affect the sustainability of fishing enterprises and coastal communities for years to come. Fishermen are questioning their ability to fish and cover their expenses this year, all the while supporting their families and crew members. Currently, they are not eligible for most of the recently announced federal programs to support businesses through this crisis. Therefore, the MFU, in collaboration with other groups, has this past month requested financial support measures, including a list of short-, medium- and longer-term support ideas, which I have included as an appendix to this talk today.

Here are a few key short-term items on that list, which would support basic income, operating expenses and business cash flow: one, an extended EI benefits program and a Canada emergency response benefit program adapted to all seasonal workers in the industry until the 2021 fishery; two, an adapted Canada emergency wage subsidy program and a waiver of all federal fisheries-related fees for 2020; and three, an expanded interest-free loan program, currently known as the CEBA, of up to $200,000, with 25% being forgivable.

These emergency support ideas were put together rapidly and with the objective that they could also be rolled out rapidly by the federal government because they are based on existing programs. However, as mentioned earlier, the existing programs are currently not adapted to our industry and the majority of our harvesters are not eligible.

Here are a few industry particularities that need to be taken into consideration and addressed, but more details and ideas are available in another appendix that I have sent you for consideration, appendix B.

The first one is that the seasonality of the industry is extremely important to consider. For example, for the spring lobster fishery, fishermen hire their crews in mid-April for about 14 to 16 weeks. Many programs end before the end of the fishery and will not be available at all for the upcoming fisheries in August and later in the fall.

Furthermore, fishermen are not paid before they start fishing and selling product, so they cannot demonstrate any financial impacts of the crisis before they begin fishing. However, many operational costs need to be covered, including wages, several weeks before in order to get ready for the season. Finally, many fishermen have a very short, nine-week fishing window to make enough revenues to cover their fishing expenses and have enough net benefits left over for their living expenses until the next year's fishery. This year, this window has already been reduced to seven weeks for many, due to season delays, with low lobster shore prices and daily catch limits expected on top of this.

The second criterion that needs to be looked into is the fact that family enterprises are extremely common in this industry. For instance, the fisherman’s crew will many times consist of his wife, brothers and sisters, or sons and daughters. The “no family relations” criterion needs to be eliminated for all wage subsidy programs in order to help this industry.

Third, fishermen's earnings and payroll structures are sometimes pretty complex and difficult to use as a benchmark for program access for many of the existing programs. If and when this criterion is used, there will be many who fall into the gaps because there exist many business structures and strategies in the fishing industry.

For example, many fishermen are not incorporated, nor do they have a business account with their financial institutions. Also, many pay their crews with catch shares, and are not paid through a regular payroll system, which is currently used as a criterion with the CEWS program.

New entrants to commercial fishing who have bought fishing enterprises at historically high prices within the last year, who, like many, are not incorporated and do not have the fishing revenue and payroll history before the start of the 2020 spring fishery are completely left out of most assistance programs. They are the most indebted fishermen, with many commercial fishing enterprises having sold for over $1 million during the past year. They will not survive the next 12 months to 18 months before the next season without special consideration and support.

In conclusion, the MFU will continue to collaborate with the federal government, and applauds its continued efforts to ensure the health and safety of all citizens. We believe the current situation in the fisheries requires a broad and proactive approach from our federal and provincial governments, one which considers the usual fishery management considerations but also the economic impacts of this pandemic on the fishing sector as a whole. Financial support measures for the fishing industry need to be announced urgently to ensure that the sustainability of this economic pillar for coastal and rural communities in the Maritimes and across Canada can be assured.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Martin.

Before I turn to the last witness, I'll give committee members the speaking order for questions: Mr. Arnold, Mr. Fraser, Mr. Ste-Marie and Mr. Johns.

We'll turn now to the Prince Edward Island Fishermen's Association. Mitchell Jollimore is vice-president and Ian MacPherson is executive director.

I believe you're starting, Ian.

[Ian MacPherson, Executive Director, Prince Edward Island Fishermen's Association]

Yes. Thanks very much, Mr. Chairman.

The Prince Edward Island Fishermen's—

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Chair, this isn't our last witness on this panel.

[The Chair, Liberal, Wayne Easter]

Yes, it is. That's all I have anyway, Elizabeth.

Go ahead, Ian.

[Ian MacPherson]

We're the last ones in this segment, I think.

[The Chair, Liberal, Wayne Easter]

Yes.

You're thinking of the next panel, Elizabeth.

Okay, Ian, go ahead.