Fisheries Committee on Nov. 6th, 2006

[The Chair, Conservative, Gerald Keddy]

Thank you.

My job is to consider how much more time we have for questioning here. We certainly have travelled a long way, as a committee, so we want to give our members as much opportunity as we can to ask questions and hear what you gentlemen have to say, but we do have another group here. So why don't we try to do another round--I think we'd all agree--for another five minutes each, and stick to our five minutes, if we can, gentlemen.

I'm not worried about our witnesses as much as about our members. That seems to be the difficulty.

Mr. Byrne.

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

Thank you, Mr. Chair.

To the witnesses, one of the things you've done here today is you've opened up all these issues, provided testimony to the committee on opening dates, the HST issue, the hail-in system. It's now on record, so the committee has an opportunity now to further investigate. While we may not be able to be as fulsome in our presentations as you'd like, it's now on record. We can use that in terms of our committee reporting. That's why this is all valuable.

I'd like to spend a lot more time on a whole bunch of different issues, but I wanted to zero in on something that really concerns me.

John, I'll quote directly from your presentation. It says, “...the DFO 'daily hail' system is shut down.”

You go on to say:

Sealers were advised that DFO would compile catch information and advise further if the harvest would reopen. The next day was Good Friday, April 14. DFO did not operate that day, nor did they operate on Saturday, April 15, Sunday, April 16, or Monday, April 17.

That leads to catch overruns in certain instances, doesn't it?

[John Kearley]

Well, it could, if they didn't shut it down. But that was the reason they shut it down, to avoid—

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

They just didn't offer it.

[John Kearley]

Well, they advised sealers that as of noon on Thursday, the hunt was discontinued. It opened at six o'clock on Thursday morning for a six-hour period, based on the fact that the day before, the first day, between six o'clock in the morning and five o'clock in the afternoon a certain number had been taken. That night they assessed the take for that day. They opened it for six hours on Thursday and then said, “Now we're going to reassess.”

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

Now, in fact, on the front, we had 9,000 animals left in the water last year; wasn't that it?

[John Kearley]

That's my understanding, yes.

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

In other words, because of this shutdown, 9,000 animals were left in the water.

Now, on the gulf side, Jean Richard, we had a different circumstance. You described a situation in which there was a very poor hail-in and hail-out system. You couldn't actually make contact with DFO in many instances, and there were real problems there.

In fact in the gulf, if I understand correctly, there was a quota overrun. The Quebec north shore was assigned 8% of the global quota in the gulf of approximately 100,000 animals, and 20% was assigned to the Magdalen Islands. When you didn't get 7,000 animals, as you were allotted, the Quebec north shore, I understand, got about 18,000 animals or 25,000 animals; I'm not sure what it was. So there was a huge quota overrun, which I think you may ascribe to the fact that you had little ability to actually report accurately your catches.

One of the things you mentioned is that there was supposed to be a quota-sharing forum, which was to be established by DFO this summer and fall, which has not occurred. Technically speaking, if DFO were to comply with the three-year management plan they set out in 2006, given the fact that you took three times the number of animals you were allotted, technically speaking the Quebec north shore should be out of the fishery in 2007 and 2008.

Would you blame that, Jean Richard, on the hail-in and the hail-out system that's established?

[Jean Richard Joncas]

The allocation that was given last year was a temporary regional quota. Is 8% the real number for the lower north shore of Quebec? This is a case where, through the working group, we have decided that if we didn't come to an agreement, we were going to an arbitrator.

As it is now, and it's what happens in a lot of fisheries in Canada, the minister has 100% discretion over all species. This is something we're having a problem with, if the minister has decided 100% which way the quota goes. When we got into this original sharing agreement, we agreed that if in January we didn't come to an agreement, we would go to an independent arbitrator. As we've seen, the minister took the decision to define quotas per region.

And as you know, Mr. Byrne, if we use the expressions of DFO, we didn't go three times over our quota. We went maybe xnumber of seals over our quota, because DFO didn't use, as they use in other species, the percentage of the landing per year; they used the total seals. If one region overruns its seal quota, as happened in let's say 2000 in the gulf.... Newfoundland had killed 143,000 seals in the gulf in 2000. Part of that number were seals that were coming from the front, where we also had problems.

People are talking here about the front as being zones 1 to 5. Why, last year, was there a front hunt in zone 12? There are a lot of things in the sealing industry and a lot of things we have to discuss together as to which way we go.

As you know, the lower north shore wasn't pleased with the 8%. We say that 18% belongs to us. Did we make it that we got 18%, or didn't we make it? It's something between us, and it's something nobody can prove. You have 400 fishermen. Which one do you charge with overrunning the quota? And we were the last ones in the gulf to hunt.

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

Thanks, Jean Richard.

[The Chair, Conservative, Gerald Keddy]

Thank you.

Mr. Simms.

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

A quick comment. When we talk about banning the hakapik, I would urge all members to support the idea that we do not ban the hakapik. I'll give you two examples very quickly.

In the mid-1970s Brigitte Bardot came here, as we all know, and talked about banning the hunt of the seal pups. We banned the whitecoat hunt in 1987, and last year she was here again. Here's the issue.

The other issue is that when Monsieur Blais and I were over in Europe, they had a motion calling on all European nations to recognize the clubbing of seals as a cruel and inhumane practice--clubbing of seals. When we came back to Newfoundland, the issue came out that the minister would look into banning hakapiks. When we went back to Europe, they had revised the passage to include firearms. It doesn't matter; it's not going to stop. I hope the committee will take a unanimous approach on this.

Rene, I'm kind of stressed to hear about the situation you had with the protesters. What would you suggest to this committee and to the minister about how to combat that, besides banning them from the area? What do we need to do beyond that? What do we need to do over the next couple of years to make sure that what happened to you doesn't happen again?

[Rene Genge]

Well, not give them any permits to go there would be a first start. If you haven't got a permit, once they're seen out there DFO can arrest them right away, before anything starts to happen. As long as they have permits, they have just as much right to be on the ice as I have.

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

Oh, okay.

Now, you said there was a court case, is that correct? What was the resolution of that again? What happened? What was the result?

[Rene Genge]

Well, they were charged $1,000 each for coming too close.

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

Okay. But they'll return next year.

[Rene Genge]

Yes, they returned last year.

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

Okay.

Let me change topic very quickly and get back to the HST issue. John, if you could address this, how do we get around this issue of HST?

[John Kearley]

For a number of years, or subsequent to the past couple of years, HST was not a concern. I guess in excess of 95% of seal product is exported out of Canada to Europe or Asia or whatever. Of course, there is no HST on our exports.

I know as a company, a few years ago we had an exemption permit from the Canada Revenue Agency not to pay HST because we were exporting our product. Of course, when you export your product, you don't charge HST to your buyers in a foreign country. If we would have had to pay HST, we would have paid it to the sealer, the sealer would have remitted it to the government, and we would have claimed it back on our input tax credit. It's simply money going around in circles.

Right now there have been many, many audits taking place on sealers who did not claim the HST, or did not collect the HST from the companies. They're saying now you must pay the HST that you failed to collect. I mean, it's a non-issue, in my opinion. It's just paperwork.

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

So they're being fined for not paying money they would eventually get back.

[John Kearley]

They're being fined for not collecting the HST, so there are penalties and interest and things like that. The HST is not the issue, as I see it. Really, it's the interest and the penalties that is an issue for the sealers. Really, I suppose, in one way of speaking, if you look at it, I think the Canadian government is the net loser with HST because, as I mentioned to a Canada Revenue Agency person at one time, if we pay HST on seals, we would get back every penny we pay out. I mean, that's a guarantee.

I personally prepared HST claim forms. If we pay out $1,000, I will collect back $1,000. That's not to say the Government of Canada would get the $1,000 that we pay out, because not everybody is honest and not everybody would remit it on the other end. So really, I suppose, in one way I think it's the Canadian government that would be the net loser.

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

Am I done?

[The Chair, Conservative, Gerald Keddy]

You have 30 seconds left and I'm happy to give you your additional 30 seconds.

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

That's very good of you.

Very quickly, you said the situation is that some offices get around EI insurance, insurable earnings on seals, on sealing.

[Jean Richard Joncas]

Yes. The way I understand it, if I have a company and my company sells seals, then I can put my employees under the EI system. The other thing is, I think this happens in the berry-picking industry and those things. I have to have a supervisor.

Honestly, I am looking at this issue for my fishermen from the lower north shore to see which way I can match the Maggies one and the upper north shore one to qualify my fishermen.