Fisheries Committee on Oct. 24th, 2006

[Victor Santos-Pedro]

We have in fact been engaged in a very extensive and comprehensive review of a number of regulations, in particular the fishing vessel regulations that are part of the Canada Shipping Act regulatory reform process. Not only have we engaged in the regular process, which is through a consultative body in which we meet twice a year, both in the capital and in all of the regions, but we recognized that although some of the fishermen organizations attend those meetings—this is an open forum meeting that is our regular meeting, every six months—there are certain areas where we would have to go to the fishermen in order to have the consultations.

We have had meetings from one end of the country to the other. Altogether nearly 2,000 fishermen have attended those meetings in various places, from Campbell River, to Charlottetown, to a number of smaller communities like Prince Rupert, and on the east coast as well, there are several communities where we've had town hall meetings. Part of the issue is that there is a tremendous awareness of the consultation, I believe, across the country.

The schedule we are now on continues to allow us to do the further risk analysis that we're doing on the stability aspects, to further consult and make proposals, and to again gain feedback before what is now scheduled to be the first official publication, which would be by the end of 2007, by the end of next year.

[Fabian Manning, Conservative, Avalon, NL]

A lot of our fisheries now are under the ITQ system.

In my riding in Newfoundland, there's always the question of the fact that a fisherman is fully aware of his quota for his vessel, but he's concerned about the fact of safety. I'll just give you an example that happened to me about a year ago in my riding, where a fisherman lost his boat due to a storm, and he picked up another boat that was two feet longer than what the regulation called for under his licence. He went to DFO and asked whether he could use that. It wasn't the middle of the summer, it was September, but he had a fair bit of fishing left, and he asked DFO whether he could use this boat to finish out his season. They refused to do it because she was two feet longer than what she was supposed to be. Instead of 34 feet 11 inches, she was 37 feet. So he had to take her out of the water—he had bought her from somebody else—saw two feet off, and put her back in the water for an extra three weeks of fishing.

Now, down there they call that stupidity. I don't know what you call it up this way. Those kinds of regulations frustrate fishermen, number one, but also in a lot of cases they play around with the safety issue.

So I'm wondering, in the consultation process that's ongoing, if there is some thought process that's been given to the fact that a fisherman has a quota, regardless of size. I'm not talking about adding on 20 feet to a 30-foot vessel; I'm talking about adding on four or five feet to make that vessel safe on the water. Again, I'm not an expert--I'm far from it--but it seems to me that the fishery has changed so much over the past decade, and certainly two decades, but the regulations haven't. There seems to be a conflict here, and in a lot of cases the conflict is causing the safety issue.

[David Bevan]

There are informal ITQ systems in place in Newfoundland, so they're not formal. The reason they've done that is that they want to share the quota amongst themselves, but they don't want to pay the extra licence fee that is required if you have an ITQ fishery. That's something we'd have to consider in any review of licence fees in the future: why would we create a disincentive to having what works out for us to be an easier to manage fishery? In general, there are an awful lot of those arrangements in place, in Newfoundland, in particular, where it's not a formal ITQ, and therefore the vessel length requirements still persist.

We did, as I said, offer in 2003 the flexibility to move to that, but I guess what's happened there is the informal arrangements are better for the fleet in general because they can avoid the current extra licence fees that would be encumbered if they were to go there.

We also have some exercise of flexibility or judgment in the case of vessel replacements on a temporary basis, but I'm not quite sure about the specifics of this one that you mention.

[Fabian Manning, Conservative, Avalon, NL]

Can you elaborate a bit on the informal and the formal IQ system?

[David Bevan]

What you have is the total allowable catch set by the department; and perhaps the FFAW, in conjunction with local fleets, have made arrangements whereby each individual gets a share. That's an informal IQ; it's not in-licence conditions and things like that. So it—

[Fabian Manning, Conservative, Avalon, NL]

It's not individual for the boat, it's overall, you're saying.

[David Bevan]

Officially it's overall, but what happens is the FFAW, working with the individual vessel, says, you have x tonnes, and you have y tonnes. But it's not on the licence conditions, so we aren't involved in enforcing it.

[Fabian Manning, Conservative, Avalon, NL]

On the stability issue, you mentioned there's some testing being done now on stability. You might be fully aware that the Melina & Keith II, which capsized in Newfoundland last year, was one of four vessels in the province that had the same design and had sunk in the last nine years. My understanding was that at Memorial University there was an engineering professor by the name of Don Bass, who was testing the stability of fishing vessels for two decades, and he was preparing a proposal for Transport Canada when the Melina & Keith II sank.

Was his work sanctioned by your department? Vessel stability has been ongoing over the past while. Why are we still at the point today of discussing vessel stability?

[Victor Santos-Pedro]

It's a never-ending topic, I'm afraid. We have done quite a lot of work at the National Research Council facilities in St. John's, Newfoundland, at the oceans technology institute, but the particular study you mentioned that the professor was working on was not sanctioned by Transport Canada.

We have done several studies. Our latest one, in fact, was on the vessels in the Great Lakes, which are a quite different type of vessel, and we've done some analysis there for consideration under the proposed regulations. However, the work that is done there is available to us and it's part of what we have used to make proposals.

[Fabian Manning, Conservative, Avalon, NL]

In regard to the vessel replacement rules, is there concern within the department about consolidation of quotas in regard to vessel replacement, and about fewer boats catching just as many fish or more fish? Is there a concern in the department in regard to vessel replacement?

[David Bevan]

We're looking at vessel replacement in particular as a result of the initiative that was launched in May between the province of Newfoundland and the Minister of Fisheries and Oceans. The premier was involved directly in that.

It's clear that this overcapacity in harvesting and overcapacity in processing in that area, along with the existing resources and how they're being used, are not going to be adequate to provide people with a reasonable living and to attract workers and prevent the out-migration of crews and other workers to other parts of Canada. So there needs to be some process to rationalize a number of vessels and to reduce the capacity, as well as to make better use of labour and better use of capital and to make jobs that attract people instead of convincing them to leave.

So we aren't concerned about looking at vessel replacement rules or about the possibility of consolidation of quotas on fewer enterprises. What we are concerned about--and that's being expressed by the fishers themselves--is the desire to maintain the independence of the inshore fleet. They don't want to become vertically integrated, through backdoor arrangements or through change of policy, with the processing companies. They want to remain independent businesses and not be employees of a processing operation.

So that's a concern we have to keep in mind when we go about any examination of how to change policies, how to change the way we deal with vessel replacement rules, and how to put the fishery on a stable basis in conjunction with the provinces, in that area and throughout Atlantic Canada.

[Fabian Manning, Conservative, Avalon, NL]

I know over the past couple of years there were several accidents. If I can go back to Newfoundland and Labrador, there's been a concern about the length of the boat versus the height, because of the strict rules about the length they're allowed to be.

To address some of the concerns that the owners have had with capacity, they've made them a little bit wider and much higher. And they say that in a couple of the instances we had, Ryan's Commander as an example, there was some thought given to the fact that the restrictions on the length of the boat created a safety issue because the fishermen believed they had to build the boat higher.

I'm sure this isn't the first time this issue has been raised in your discussions. Has a concern been raised in your consultations in regard to looking at the length of the vessel to make it more stable on the water?

[Victor Santos-Pedro]

If I could put it this way, the only concern is with a vessel that has, as Mr. Nash said, high windage, that has been perhaps made higher than a traditional type of vessel or that has been made wider. In fact, being wider gives it more stability, but then because the vessel becomes very stiff, they will put on an anti-roll tank. You have to then know exactly how to operate that anti-roll tank. Sometimes as a misnomer they call it a stability tank. It's not a stability tank; it's a convenience so that the vessel will roll more smoothly. That creates the need to operate the vessel more carefully and know exactly what is happening.

So that becomes a risk factor. What I would simply say is that that kind of vessel requires an inclining test to be done and requires a stability booklet. The master must have on hand information on the capability of the vessel. It's as simple as that.

[The Chair, Conservative, Gerald Keddy]

Thank you, Mr. Manning.

Mr. MacAulay, go ahead, please.

[Lawrence MacAulay, Liberal, Cardigan, PE]

There's talk about consistency in inspection, and there's the request from the community builders and the operators of the boats. In that context I'm not only concerned, but concerned about the boats under 45 feet long. And you talk about the costs of $3,000 to $6,000 and what costs could be put in place when these boats are built.

Will any of this apply to the boats under 45 feet long? And if so, will the requirements come back to this committee before they're put in place? I was just thinking about when the large male lobsters were thrown back. I wasn't on the committee, but I can tell you it created quite a furor, not in my district but in other areas of Prince Edward Island, as you're well aware. And what I don't want to see happen is for these regulations to be put in place before we hear about them then.

And that's the end of my questions.

[Victor Santos-Pedro]

I'm nodding yes, because we certainly can provide them, and they will not be put in place before the information is provided.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Do you expect an increase in cost?

[Victor Santos-Pedro]

There is likely to be a cost.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I am very concerned about the cost, because I can assure you that my fishermen are going to be very concerned about the cost.

Thank you.

[The Chair, Conservative, Gerald Keddy]

Thank you, Mr. MacAulay.

Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

David, you've mentioned the cornerstone of controlling capacity. Control of economic overcapacity and overcapitalization in the industry has been maintaining the rigid standards in terms of vessel length and volume. There has not really been a substantial change in the policy other than the revisions in 2003, which have been adapted by some.

There have been instances in which there have been significant capacity increases in the industry. Could you describe, for example, the consequence of the decision to allow a very large segment of the fishing fleet in northern Quebec and on the northeast coast of Newfoundland to convert from basically a fixed-gear fleet to a mobile-gear fleet? How many vessels? Given the fact that there was no change whatsoever in the DFO requirements for adjustments to vessel size or to volume, there have been very significant capitalization issues in that particular fishery. Could you describe for this committee exactly how many vessels underwent dramatic changes in capacity? What do you think was the net investment into that capacity, to create that situation?

[David Bevan]

First, limited entry was obviously our first attempt at controlling capacity. That took place thirty years ago. The second thing that was observed was that the vessels started to grow, so there were limitations placed on vessel length and volume.

Have those worked really well in terms of controlling capital investment? No, because people have invested more and more. There are bigger engines. There is more equipment. They are pushing the limits of vessel design to fit within the rules that exist, so that they're getting the biggest possible vessels within the rules that exist. We 've seen horsepower go up dramatically. In P.E.I., there is one vessel with a 1,000-horsepower engine in it when 125 horsepower might be a more sensible choice. But that's what people have been doing in order to keep ahead and get the maximum opportunity.

So we've seen investment, notwithstanding the rules. We've certainly seen a huge investment in the Atlantic—many millions of dollars, and probably hundreds of millions—in terms of capitalizing the shrimp fleets and those fleets that are mobile-gear, to drag for shrimp and to deal with some of those opportunities. We've seen a lot of investment, and we're now seeing the consequences. People are having a hard time making ends meet with the higher dollar, lower prices, and higher costs. Those things are a big concern, which is why we're reviewing policies and looking at the way we manage both harvesting and, with the provinces, the processing.

I'm not sure of the specific fishery that you were questioning.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

It was the northern shrimp fishery.

[David Bevan]

It's been many millions in that one. I'd have to come back with a clearer estimate, and that's all we could give you because we don't track that. It would probably be in the vicinity of or over $100 million.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I think it's of interest to this particular committee.