Fisheries Committee on Oct. 24th, 2006

[Victor Santos-Pedro]

Yes, it would have an impact, because first of all, one of the aspects of the Cap Rouge II is that there had been some significant modifications to the vessel. The vessel was not being operated for the purpose it was designed for. There had been a much bigger net attached to the vessel. There were some other operational issues. The master of that vessel really was not aware of exactly what the capabilities of the vessel were, and with no checks at all, unfortunately there was that very big tragedy--which could have been prevented, frankly, if there had been checks on the stability and what the capabilities of the vessel were.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

Thank you. Certainly, we want to avoid further accidents like that and the tragic loss of life at sea.

On the same footnote, we appreciate the new lifeboats that have been implemented for search and rescue in the coast guard. We certainly are glad to see those going into service. They're state of the art and able to handle tough weather to effect rescues at sea.

I'll just come back to the question about vessel replacement rules. If the effect is that it allows for larger vessels—one of my colleagues addressed this, but I'm not sure I heard it fully answered—are we not concerned that it may lead to a consolidation of smaller, more capable vessels being replaced and the exodus of more small fishermen from the industry?

That's a concern on the west coast as well as the east.

[David Bevan]

That's one reason the vessel replacement rules were in there in the first place, in Atlantic Canada at least. A lot of the fisheries in British Columbia switched to ITQ fishing. Therefore, there has been a consolidation, there's no question about that, and there has been an accumulation of quotas on some of the vessels such that they're doing very well, etc. It has had an impact on participation rates and has reduced the participation in those fisheries.

In Atlantic Canada we have the vessel replacement rules in order to try to prevent overcapitalization and the bankruptcies that lead to consolidation. We also have policies in Atlantic Canada, which have been in place for a number of years, that prevent licence holders from buying each other out and accumulating quota under one licence holder. Where we have not gone to ITQs and we have competitive fisheries, or IQ fisheries, there are policies that don't allow consolidation.

This has led us to the current situation we have, which is an economic crunch in Atlantic Canada in many of the fisheries, where people haven't been able to change how they fish because of the policies and can't make a living because they can't get enough income to cover their expenses. That's a serious concern, obviously, and has led to federal-provincial discussions in Newfoundland and around the Northumberland Strait involving Nova Scotia, P.E.I., and New Brunswick.

We haven't seen what your concern is, unless fleets have decided they wanted to go down that route by changing to individual transferable quotas.

[The Chair, Conservative, Gerald Keddy]

Thank you, Mr. Bevan.

[James Lunney, Conservative, Nanaimo—Alberni, BC]

I have one more quick question.

[The Chair, Conservative, Gerald Keddy]

We'll pick it up later. I think there's going to be time for another quick round, but I have a couple of questions that I think need to be asked.

You have some contradictory statements. On the one side you say that a small portion of inshore fishers are currently affected by the 45-feet and 65-feet barriers, mostly in Newfoundland. On the other hand, under risk factors which will require a stability test, they include modifications, changes in fishing operations, anti-roll tanks, liquid cargoes, live wells, operating in icy conditions, significant windage. Under those risk factors, I don't know of a boat, very few in eastern Canada, that would be excluded from a stability test.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Absolutely.

[The Chair, Conservative, Gerald Keddy]

I want to make a quick point.

Mr. Bevan, you said several times overcapitalization can lead to overfishing. I think we all understand that, but I think we should be clear and respectful of the industry. These people are business people. They'll not go out there and build a half-million-dollar boat that they can't afford to run, any more than a farmer is going to buy a $250,000 piece of agriculture equipment when he can do the same job with a $50,000 piece. The issue has come up because we set these arbitrary limits of 34 feet 11 inches, 44 feet 11 inches, 64 feet 11 inches. The fishermen have got around that by going wider and deeper. All of those things have led to boat safety being compromised.

On the issue of overfishing, if you have an ITQ system and the fishermen are limited to how much they can catch--and you addressed this earlier, I think--what's the difference if they catch it in a 50-footer or in a boat that's 44 feet 11 inches? That same boat may be fishing inshore for lobsters. We have people with boats that are 34 feet 11 inches fishing on Georges Bank. We're not recommending they do it, but they have a licence for inshore lobster. They can't afford to have two boats, so they're on Georges Bank with a small boat built for the inshore.

I don't envy you your job, but at the same time I think you have to spread the net a little wider, because there are some other issues here.

On overcapitalization, I'd appreciate an answer, because it's a business decision.

[David Bevan]

Clearly, if it's an ITQ fishery or an IQ fishery, you don't need to control the business decision. Where we get into a problem is that most enterprises have a lot of licences. If they're fishing actively in more than one fishery and there's a size limit--for example, the lobster fishery--of 44 feet 11 inches, and the guy has an ITQ groundfish, then that becomes an issue. Clearly, the design of most lobster boats in Nova Scotia that I've seen recently wouldn't be suitable for dragging anyway. But when you have a multiple-purpose situation, it does get a bit more complex in how to figure that out.

[The Chair, Conservative, Gerald Keddy]

In the lobster industry in particular, you have a restriction to 44 feet 11 inches. Fishermen have got around that by putting a four-foot extension—some are bolted on, and some are only a platform—on the end of it, and then they make them up to 26 feet wide, so they have a whole other stability issue.

What would be the difference in allowing that boat to be 50 feet, have a normal depth of keel, and be 22 feet wide? You may have a slight ability for more capacity, but it's not going to be extreme in the lobster industry, where you're limited by traps.

[David Bevan]

We did polling of the licence holders. Most of them want to keep the 45-foot length restriction. They're concerned about the fact that they're not able to move the traps as fast and not able to....The more capital you put in there, the bigger the boat, the faster and farther you can go, and the more fishing pressure.

They're fishing now in a completely different pattern, hauling day and night and moving their traps in season, and doing things they never did before. That's an increase of pressure on the stock. It's an increase of pressure economically as well, because they're investing so much in their licence and gear that even with big catches they're having a hard time making ends meet. That's the kind of problem we had originally hoped to avoid.

I agree with you that with a 45-foot limit, but seeing vessels that have actually gone to more than 27 feet wide, with huge engines—700 to 800 horsepower—and lots of cost, lots of expenses, they need a lot of fish to keep that thing going. If there's any downturn in price, any upturn in expenses, or any change in abundance, there are going to be lots of problems.

That was the kind of thing we were trying to avoid with these limits, but clearly we need to look at other ways of achieving the same outcome. As an individual, if you're in a competitive fishery you will invest for your own benefit more than perhaps you would collectively want to do if you had ITQs and things like that. You wouldn't want to have the same investment there as you would if you had a chance at more fish. People behave in a way that's reasonable from their own perspective.

[The Chair, Conservative, Gerald Keddy]

We have another question from Mr. Simms.Then we'll try to do a quick round, if people have individual questions.

I would like to make one more comment on that individual fisherman with that boat of 44 feet 11 inches, with a four-foot extension, or a bolt-on extension, on a keel of 44 feet 11 inches. You keep coming back to the fact that if they have to invest the capital, they're going to try to get it back out.

The restrictions are all still there, and they have basically a 50-foot boat now. The difference would be that if they make that boat 22 feet or 21 feet or 20 feet wide, they're going to use five litres an hour instead of 40 to 50 litres an hour. They're going to actually save money, and it would be more economical to build a boat that works on the water instead of one that's been compromised by some rules.

I'm taking a lot of the committee's time, so I'll go to Mr. Simms.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

You said the flexibility built into the system—back in was it 2003, Mr. Bevan?—was not taken advantage of. Could you give me more details on that? In what way was it not, and what are the precise rules that provided the flexibility?

[David Bevan]

There is a series of ten principles, and we could send the committee a copy of the documentation. Essentially, they're not allowed to increase overall capacity, they're not allowed to create more need for fish, they're not allowed to do a number of things. Some of these are in our deck. The difficulty was that this would require their going to an IQ or an ITQ or some kind of fishery of that nature.

As I mentioned earlier, we have a disincentive for doing that, because our licence fee structure is such that it's cheaper to buy a licence for a competitive fishery than it is to buy one for an IQ or an ITQ fishery.

They didn't want to make the change, and they're running those informal systems I described earlier to achieve the same outcome but without getting the cost. But that didn't allow us to move ahead with changes to the vessel replacement rules, and there's just been a lot of inertia. They didn't want to make the fundamental changes in how the fishery was managed.

I think that's now coming to an end, since we are forced, given the economic performance of the fisheries right now in light of the global macro-economics, to take a look at all of these issues.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I'm loath to do this, because I hate it when people paraphrase me, but perhaps I could paraphrase you; maybe it's retribution to a certain degree. When you talk about the issue of conservation and fleet size, would it be safe to say that instead of protecting the species here we're protecting the harvesters from themselves?

[David Bevan]

It's a bit of both. If we leave it wide open, with no vessel limit, somebody will make the big investment, the others will feel pressured to compete, and they will all end up in a situation where there's not enough legal catch to support the investments they've made, to pay the bills. Therefore people will have to do what they have to do to pay those bills.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I'm just trying to get around the mindset of it.

I don't have a lot of time, but I have a few more things. For instance, you say that for 2007 we published in the Gazette the new rules about the smaller boats. Is that correct?

[Victor Santos-Pedro]

Yes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

To what degree have you received input from the fishers and harvesters affected?

[Victor Santos-Pedro]

We have received a lot of input. I don't recall the exact number, but upwards of 2,000 fishermen have been at the meetings we've had. We have had comments on the proposals over the past two to two and a half years.

So we have had a lot of input. One of the significant aspects to come out has been this issue of the stability requirements.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Do they also tell you about costs, as in the concern that was expressed very well here by my colleague Mr. MacAulay?

[Victor Santos-Pedro]

Absolutely.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I have one final thing. You have the photo here, but I guess a lot of people, certainly in Newfoundland and Labrador, are looking for closure on the situation with the Ryan's Commander. Can you update me on that, in the time I have left?

[Victor Santos-Pedro]

The information we can give you is that the Transportation Safety Board will be releasing the final report on November 23. We will then have the final report and their recommendations.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Can you give some more details on that with regard to your involvement in that particular situation?