Fisheries Committee on Nov. 6th, 2006

[The Chair, Conservative, Gerald Keddy]

I'll call the meeting back to order.

Welcome to our new witnesses on boat stability, Mr. Normand Cull, Mr. Hubert Randell, and Mr. Dwight Spence, who I'm assuming is coming. There's a name tag, but there is no one sitting behind it.

Could we move along fairly briskly here, gentlemen? I'll ask you folks to start. And if you could keep your presentations to within ten minutes, it would be helpful. If it's going to take longer than that to read, maybe I'd ask you to just paraphrase it, if that's possible. We did come here to hear what you have to say, so we want to take time to do that.

I will remind you that we have simultaneous translation. Most of us talk faster than our interpreters can translate, so we'd ask you to try to keep it at a reasonable pace.

Go ahead, gentlemen.

[Normand Cull, Fisherman, As an Individual]

Thank you, Mr. Chairman.

Mr. Chairman, honourable members of the committee, my name is Normand Cull, and I've been owner and operator of an enterprise since 1984. I first started fishing with my dad at an early age of nine years, and I can well remember.... I don't know whether some of you around the table know that we used to buy flour at that time by the 100-pound bag. I remember very clearly, when I was nine years old, my mom making a suit of oil clothes out of flour bags. It was cured with linseed oil, and the smell of the stuff is still in my nostrils now.

I won't take up too much of your time going through the details of my life as a fisherman, because that would take all day.

I've seen a lot of changes in my 50 years of being involved. I've gone from the boat to the mainland and from the mainland back again. My roots are in a fishing boat, and I guess I'll retire at that right now.

I've served on several committees. I was chair of the 3K north committee from 1997 to 2003, and I am now serving as vice-chair. I was a member of the northern shrimp advisory committee from 1997 to 2003, chair of the local fishermen's committee, and most recently a member of the Great Northern Peninsula Fisheries Task Force in the northern peninsula. I was vice-chair on the board of SABRI—that's St. Anthony Basin Resources Incorporated—and was nominated to serve another term at the 3K north shrimp committee chair but declined and took on the position of vice-chair.

Back in 1992, when a moratorium was called on cod, I and a lot of other fishermen diversified into crab, with which we did well for a few years. There were only very short seasons because of the small amount of quota. Most of us fished in boats ranging from 35 feet to 45 feet, because it wasn't necessary to have a bigger boat to fish and land the amount of crab we had to catch. Prices were very good in some years and not so good in others.

In 1997, after some lobbying by fishermen, me included, we were successful in getting a shrimp allocation known as northern shrimp. There were several meetings and seminars held throughout the province, in which some of you probably were involved, asking fishermen to gear up for what we called, or what was called then, the gold mine of the north. I can well remember—because I had no intentions, and probably a lot of other fishermen out there didn't have any intentions of ever gearing up for shrimp or anything like that—that we were approached by processors saying, “Boys, you're going to have to gear up for the shrimp because it's out there by the scores.” They said the same thing about that as they had with the cod fish, that there's hardly any way of ever catching it.

Fish allocation was harvested by boats from 34' 11'' to 64' 11'', and the ruling still stands. Since we became involved, we have seen huge increases in quotas and allocations, and this is why today we have a very nasty problem of over-supply and very low prices. As we all know, right now we're in a situation where it's hardly viable to even be at it, with the cost of fuel and everything else and the exchange in the dollar rates. Right now, I'm telling you, it's very difficult to even come out on top.

Ever since we've been involved in this industry--in shrimp, especially--processors have been telling us that our boats aren't big enough and that there are too many of us involved. We are fishing at the wrong time of year, when the markets are at their worst. This is why I think we need change, but I don't know if bigger boats are the answer.

I've talked to some fishermen, and they have said they cannot afford the boats they are in now, so how are they going to move to bigger boats and double the expenses, or sometimes triple the expenses? The most fearsome thing in the harvesters' minds on the issue of moving to bigger boats is putting the harvesting into the hands of the processors. This, gentlemen and ladies, is a very worrisome part in the harvesters' minds. I'll go into that in a little more detail as I go through.

Speaking from a personal point of view, and most of what I'm saying here now, gentlemen, is.... Although I've been involved in committees, I haven't had a chance to go around and meet with fishermen that I represent. I have only chatted with a few fishermen on the wharves and stuff like that, and this is why what I'm doing here, mostly, is from a personal point of view—

[The Chair, Conservative, Gerald Keddy]

Mr. Cull, there are a number of issues that you are discussing, all of which are important, but I would like you to focus most of your discussion, if you can, on boat stability, the test that's being requested through Transport Canada, the cost that will put on fishermen, and the stability of the boats you're using right now.

Most fishermen feel that they are running pretty good gear and that they're very stable and very seaworthy. There are some difficulties with the shrimp boats and the shape of them. If we could focus on that part of it, that would be helpful.

[Normand Cull]

Okay.

Speaking from a personal point of view, if we move into bigger boats, how do we finance them? Most of the enterprise owners are now at the age of retiring and getting out, hoping to get a good return for the money they've invested. It's going to be very difficult to get young people involved if they cannot get the financial help they need. What I mean by that is if we're going into bigger boats, it's fine to say we move from smaller boats to 65' 11" or 64' 11", and that didn't help...so although there are factors when it comes to the safety part of it and such, where do we go to get the dollars and all of this stuff?

Maybe we should look at operating the boats we have now. If we need to freeze at sea to have a better quality product, then I think we should look at something like that. We could put the fish in cold storage and produce when the time is right. This way our plant workers will still get the work needed.

Millions of dollars have been invested into the harvesting sector since 1997, when fishermen went from small boats to super 65-footers, and now we are being told we should go bigger again. The cost of operation has doubled or tripled, and we have been regulated to the point where we do not know which way to turn. If we are going to lift a freeze on the 65-foot regulations, then I think we have to make sure there are safeguards put in place so that it stays in the hands of the harvesters. Put the option in place and let the fishermen decide for themselves what they want to do.

If you're talking about the safety aspect of it, I realize that if you're going 200 miles or 150 miles offshore, then you need something that's going to be stable and you don't have worry that your boat is not capable of taking care of the storms you're going to get into. I think the boats we have now can...if we fish at the right time of the year. But if you're talking about getting into the months of December, January, or February, then you're going to have to go into a much larger boat than you are now. I doubt if a 100-footer can fish in the waters that we have to fish in, in January and February.

What I'm trying to point out is that I don't know if going bigger is going to fix the problem. The biggest problem we have right now in our industry is whether we can afford to fish for the price we get. That's our biggest problem right now. By moving from the 65-footer to an 80-footer or a 90-footer, I don't know if that's going to fix the problem or not. This is why I say, does bigger mean better? It might mean better for the safety part of it, but I don't know if it's going to be better for the economics of it. That's why I'm trying to point out what I've said here.

I don't know if you want me to touch on the sealing industry. That's already been talked about. I just have a short paragraph on that, but I think the panel did a fairly good job.

I don't know if you want me to continue.

[The Chair, Conservative, Gerald Keddy]

Could you focus on the boat stability, Mr. Cull? Transport Canada has looked at a number of the issues, of course, including overall boat length, but they're talking about stability tests for every boat length, and this would be paid for by the fishermen. In southwest Nova Scotia, where I live, we can reduce some of that by simply testing hulls. There may be 50, 60, or 70 boats made from each hull type, and some of them would have hundreds made from a particular hull type.

The issue becomes that there's going to be one factor for the gear type you use. If you're a multi-species fisherman, you may have different gear types on board in different seasons, and they're talking about a test for each of those gear types. There may be a different issue if you have ballast control, and I understand a number of 64' 11" shrimp boats do. If you're moving ballast water around, if you fish herring or capelin, which have more liquidity to them and move around on board, that's another factor. If you're fishing in icy conditions, it's another factor.

What we're trying to get is a feel from fishermen of how they look at these new rules in stability testing, because it's certainly something, I can tell you, the fishermen in my area are very concerned about.

[Normand Cull]

I talked to a fisherman last night--he was supposed to be here today--and he had talked to fishermen that have already moved from 65-footers to larger boats. They've had to tie them up because they can't afford to keep them. They can't afford the operational part of it. So I don't know if it would make economic sense.

On the safety aspect of it, yes, if you're fishing in weather where you'll be in icing conditions and all of that stuff—

But I'm trying to point out where we are now. If we continue to fish in the months that we are fishing, I don't think there's any need to go beyond the 65-foot limit. It's fine to put some fluctuation there, if I want to put 8 feet or 10 feet in the boat that I've already got, to make it better for me to fish shrimp or any other fish I'm taking. If I want to make that decision myself, then leave it to me as the business person to make that decision. I don't think it should be forced on anyone to say that they have to go into an 85-foot or a 100-foot vessel. Put the option in place and let the fishermen decide themselves what they want to do, because bigger means a bigger appetite.

What I have to remember is that if I move from a 65-footer to an 80-footer, for instance, I have to have a certified engineer, I have to have a certified mate, I must have a certified skipper. So all of those are going to cost. You're not going to get a skipper to go on that boat, probably, for the money you're paying a person on a 65-footer. If you're a certified captain with a class 1 ticket, you're going to be looking for more money than people on the 65-footers right now.

These are all the things you have to look at. You're getting into a much more costly boat than the 65-footer.

[The Chair, Conservative, Gerald Keddy]

Thank you, Mr. Cull.

Mr. Randell.

[Hubert Randell, Boat Builder, As an Individual]

Yes, sir.

[The Chair, Conservative, Gerald Keddy]

Part of the issue of the stability test, so everybody is clear here, is that all boats over 15 tonnes will require a stability test. Some of your 34' 11" class would fall into that, but the majority of them wouldn't.

Anyway, go ahead, sir.

[Hubert Randell]

Thank you.

I will read through my notes, and as you will notice, my opinion differs from that of Mr. Cull, being that I'm not a fisherman, as Mr. Cull is. I'm involved in the shipbuilding industry, and that's where my point of view is going to come from.

Newfoundland and Labrador's very existence is founded on the fishery. Everyone can picture our forefathers leaving in the dark and rowing their small dories out to the fishing grounds in order to get there before daylight. Much has changed since that time. With advanced knowledge and technology, we have seen major developments in both the fishing industry and the vessels that are used in this industry.

Over the past fifty years, fishermen have progressed from the dory, to the trap skiff, to the 35-footer, to today's most prominent vessel, the 65-footer. Gone are the days when the ordinary fisherman could fashion together some timbers in his shed to build a vessel that would meet the needs of his fishery. Thus began the development of the Newfoundland and Labrador boatyard and the shipbuilding industry in order to meet the growing demand for bigger and better fishing vessels.

Today, many boatyards have expanded into other areas of construction, such as building sailboats, yachts, and pleasure cruisers, but most shipbuilders in Newfoundland and Labrador still heavily depend on the fishing industry for the vast majority of their work. These boat builders have to abide by the rules governing that industry.

For the most part, as the vessels and the industry evolved over the years, so did the rules governing them. However, it is generally felt by most builders that over the past twelve to fifteen years, rules have remained stagnant while the industry and vessel requirements have changed dramatically. Mr. Cull mentioned that when he talked about the change in the fishery from the cod fishery to the gearing up of the shrimp fishery.

The most notable change in the fishing industry came after the cod moratorium in 1992. The fishery of Newfoundland and Labrador changed, as I said earlier, from a groundfish fishery to a shellfish fishery. This meant that boats had to go further offshore to get to the fishing grounds. Boats now required greater fuel capacity, better crew accommodations, bigger holding compartments, massive A-frames and gear-hauling equipment, and so on. In most cases, the boats were just not equipped for the new fishery. Therefore, along came a flurry of activity at the boatyards.

There was a great call for new vessels and vessel modifications of all shapes and styles, with one major limitation, of course. The vessel must not exceed 65 feet. Thus began the dangerous movement of modifying hulls and heightening vessels in order to gain volume and carrying capacity, while still remaining within the allowable cubic number as regulated by the Department of Fisheries and Oceans. This movement may have made the vessel legal, but it also made it less stable, and this instability seems to have contributed to some tragic circumstances at sea. The increasing of vessel length beyond 65 feet would solve many of these safety issues that plague the boat building industry today.

The changing of these vessels' length regulation would also have a major economic impact on the boat building industry. In the past eight to twelve months, the boatyards have experienced a major downturn. This is because of the low price for the shellfish, the strong Canadian dollar, high fuel costs, and the industry being on a downward cycle after experiencing a boom for the past decade, which saw many fishing vessel owners investing in new vessels.

This slow period causes major concerns for shipbuilders, one concern being the inability to hold on to skilled personnel, and another being the lack of young people entering the boat building trade. It is very difficult to draw new workers and keep skilled workers when you cannot provide full-time employment and cannot offer them a wage that is competitive with booming industries, such as those in Alberta.

We do know there are regulation changes coming, some of which may even adversely affect the shipbuilding industry. For example, the combining of multiple licences for use on a single fishing vessel means a reduced number of needed fishing boats and therefore a reduced number of clients. However, a change in the 65-foot rule for the shipbuilding industry in Newfoundland and Labrador overall would be a positive one. Immediately, there would be an increase in vessel modifications, refits, and repairs and an increase in new construction. For years to come, the upgrade and consequent upkeep of the larger vessels in the fleet would create much employment in the shipbuilding industry. This activity would allow us to keep a core group of skilled workers from leaving the province and entice new tradesmen to the industry.

In summary, I would recommend that the Department of Fisheries and Oceans lift the 65-foot length restriction. This would bring with it many benefits. It would mean that boat builders would be confident that the product they were creating was a safe and dependable one. It would mean that fishermen would have a much better designed boat for stability; better crew accommodations; better fish handling; and better processing and refrigeration equipment. At the same time, it would provide a much needed boost to the shipbuilding industry in Newfoundland and Labrador.

Thank you.

[The Chair, Conservative, Gerald Keddy]

Thank you.

We'll start our first round of questions with Mr. Byrne.

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

Mr. Chairman, the witnesses who provided testimony today seemed to capture what I think is the predominant issue in Newfoundland and Labrador. Our committee is charged with the responsibility of looking at Transport Canada's new rules for boat stability, but it's also in reference to DFO's vessel replacement or vessel length requirements.

One of the first questions I'd like to ask would be for Norm Cull.

Norm, how aware are you of Transport Canada's proposed regulations on vessel stability and possible modifications that they are suggesting in terms of a one-size-fits-all policy on hull design? Are you aware of that issue at all?

[Normand Cull]

I haven't had any correspondence on that, Gerry.

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

Has Transport Canada contacted you? Has the union contacted you? Has anybody contacted you about that particular issue?

[Normand Cull]

No one in any way whatsoever.

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

That is a relevant point, Mr. Chair. This is a huge issue that I don't think has really caught the fore at all.

The issue here in Newfoundland and Labrador, in terms of what people talk about, what fishermen are more interested in and what boat builders are more interested in, is on the rule that you can go to 34' 11", you can go to the 45' 11", and you can go the 64' 11", but you have to stop there.

One of the issues that has been raised in this province is a really strong concern about the fleet separation policy and the intrusion of plant owners who are, through trust arrangements, buying out fishing enterprises or effectively controlling fishing enterprises, thereby preventing independent operators of fishing enterprises and circumventing the fleet separation policy.

The issue that Mr. Randell has contended is that in order to provide safety to fishermen at sea, it's not so much of a hull requirement, it's more of vessel length or size requirement.

Hubert, am I capturing how you feel?

[Hubert Randell]

Pretty much, yes. Because DFO has a regulation in place concerning the cubic number, and that is, of course, that the boat cannot be any longer than 64' 11". So what they do, even with new construction and refit, is they take their length--64' 11"--and they are assigned the cubic number from DFO. It may be 11,000; it may be 13,000. They are limited in their length, and they go to 64' 11".

Now, they look at the width that would give them something reasonably stable. In the meantime, they keep in mind that they want a certain size of fish hold so that when they go 150 to 200 miles offshore, if they can bring back 60,000 pounds of shrimp, they'd rather do that than bring back 40,000 pounds in the one trip. Because DFO has assigned them a cubic number of 11,000 or 13,000, or whatever it might be, they know the length. Keeping in mind, again, the breadth that they're going to need, if it's 20 feet, well then, with the balance of the equation they know what the height of the fish hold is going to be.

There was one case in the boatyard where the boat was 60 feet long. He wanted to increase his carrying capacity, so he wanted 10 feet put in the midship. What we had to do, because of DFO's regulations, was cut five feet off the front of the boat so we could put that in the midship, which gave him a better carrying capacity.

I think I heard Mr. Manning mention he'd heard stupid things before he went to Ottawa, and he's heard them since he went to Ottawa, and I'm sure he's going to hear them again.

Since we're on that, I'd like to mention the 34' 11" as well. DFO has a regulation in place where they cannot go any longer than 34' 11". However, they also have a regulation in place where they can upgrade to 39' 11". They can buy a boat that's already 39' 11", and they can upgrade to that. However, they cannot build a boat to upgrade to 39' 11". And they cannot buy a boat at 39' 11" if she was modified.

Again, the regulations in place are just mind boggling.

[The Chair, Conservative, Gerald Keddy]

We're going to get a round in here.

Go ahead, Mr. Simms.

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

Thank you very much for coming in. It's nice to get the two sides--I won't say opposing sides, because I know you're all working for the common good.

We had hearings, this same committee, some time ago, and Mr. David Bevan, the deputy minister, was in. He mentioned the fact that one of the biggest obstacles to expanding the size of the boat is that it's too hard on the individual harvesters because of the economy of it. In other words, they were worried about your spending money, that you couldn't afford to upgrade your boat.

Now, listening to you leads me to believe that there's a disconnect there, because you already realize what he's saying. So in your opinion, to forego those rules, you're saying there'll be very few boats, much fewer than Ottawa realizes, that are actually going to go through with this.

[Normand Cull]

Yes.

You see, what Hubert is saying is fine from Hubert's—

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

That's understood.

[Normand Cull]

And it's fine from my perspective too. If you have someone in a 34' 11" boat who wants to move into a 65-footer, then I think he should be allowed to do that, the same as if he wants to move from a 65-footer to a 100-footer. Leave it to me to make that decision. But because you're going from a 65-footer to a 100-footer, don't come out and say you need another million pounds of fish to take care of that 100-footer.

Do you see what'll happen? If we move the regulation from 65 feet to 80 feet or 100 feet, then the cost of operation becomes higher and higher. And the higher the cost of operation, the more you want more fish, and in order to get more fish, who knows what's going to happen then. I don't think because I move from a 65-footer to a 100-footer I should have any more fish to catch than the fellow who's staying in the 65-footer.

Do you understand what I'm saying? It's when you're talking about IQs and stuff like this. If I go from 65 feet to 100 feet, then I'm going to probably say, “Well, I need another 500,000 pounds of fish or a million pounds of fish, because now my boat is much more expensive to operate and I cannot operate on the quota I have.”

The safety aspect of it is one concern, and the part about being hungry for more fish and the over-capacity.... We're talking now about being over capacity when we're talking about the fleet we're already in and needing a lot of fish to operate it and keep things going. I'm afraid if we move bigger, then the appetite will become stronger. From the few fishermen that I've talked to, I hear that this is the worrisome part of it.

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

In essence, you would say to someone like Mr. Bevan that we already realize what you're saying. Would you say that his fear is you're going to come back with this larger IQ, and there's going to be a massive influx and demand for a larger IQ?

[Normand Cull]

That's what I think, yes.

Reasoning...it doesn't add up. What we're saying now is we've got the boats that we've already got. I'm in a 65-footer and I find it tough enough as it is to make ends meet in what I got. If I jump from the 65, first of all it's going to cost me probably $2.5 million to go from where I am into something bigger. With the price of the material that we're getting, if I go into that, then how am I going to justify going from there into that? The safety aspect of it is one concern, but being able to pay for it is another.

I don't know if I'm in a position to be able to say that Hubert or anybody else can't afford that. Do you understand what I mean?

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

No, no, I said in your own position. It seems to me that the attitude I got from DFO was that they're not certain if you're certain what position you're in. Does that make sense? To me, you've just proved a point that I'd like to take back with me.