Fisheries Committee on May 31st, 2007

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

I think it is about a million dollars a year.

[Gervais Bouchard]

On average, the figure is $1.5 million a year for dredging. In the operations and maintenance budget, which varies slightly, the figure is approximately $3.5 million.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

It gets increasingly difficult to follow, and I'm not referring to you in particular. We hear about the capital budget, the operations budget. People use terms that are completely different from one time to the next, and in every case, we are talking about different budget envelopes. It becomes incredibly difficult to follow. And I'm not even referring to the table we received on Tuesday about the divestiture program, salaries, port activities and program administration. These are all different budgets established for each region. However, that is a different matter. We can come back to that later.

I'm going to carry on along the same lines as Mr. MacAulay. I assume that small craft harbours are like a leaky roof. The leak is getting worse and worse, and there could be a collapse. In other words, the repair costs are getting higher and higher, and since they cannot be paid, the solution has been to put up fences. These places are not safe. I would like to hear from the three of you on this.

My impression is that while the problem was initially one involving money, it has become much more serious over time. Even with the funding you received, the facilities did not last until the end of their useful lifespan. I would like to know how the problem of a lack of funding has evolved over time, and to what extent it is responsible for the deterioration of the infrastructure.

[Gervais Bouchard]

I could begin, and then allow my colleagues to talk about the problems in their regions.

In Quebec, the facilities have deteriorated quite substantially. As I said earlier, the average age of the facilities is between 25 and 35 years. The problem is that we are at a stage where a great deal money would have to be invested to bring the facilities up to standard. When there is an inadequate rate of recapitalization—and that is what we were saying in different words—obviously each year there is an accumulated maintenance or recapitalization deficit. It becomes very difficult to get on top of things later. Mr. Hegge said that a substantial amount of money would be involved. This week, Mr. Bergeron talked about a figure of between $400 million and $500 million, taking inflation into account.

At the same time, all the construction costs have increased. In most cases, weather problems have hastened the deterioration, because these facilities are now very old. Our main concern is to make sure that fishers are safe. Every year, engineers inspect the sites. When we are told that a wharf is not safe, we have no choice but to take steps to limit access to it. We always try to minimize the impact of these measures and to offer the fishers temporary solutions. As managers of these facilities, it is always a challenge for us to invest in a project at the right time. Because of a shortage of funding, we are often out of step.

[The Chair, Conservative, Gerald Keddy]

You're out of time. Six seconds is not enough time for another question. It really isn't.

Mr. Stoffer.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chairman.

Sir, $6 million doesn't seem to be all that much for central and Arctic region. You have responsibility for the Great Lakes region, I believe, as well. Are most of the harbours there that are for commercial fishing harbour authorities now? Or do they still fall under your jurisdiction in terms of your responsibility to maintain them?

[Al Kathan]

Even harbour authorities fall under our jurisdiction to do the major works and so on. There are three harbour authorities on the Great Lakes at this time. There are a few other harbours that could potentially be harbour authorities, and we should look into that in the near future.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

In terms of the $40,000 that is discussed that harbour authorities have to use for maintenance workers who work on it, when they do that, who oversees that the work actually gets done? Is there a peer review system that says here's $35,000, now let's see the work that you've done, and somebody from small craft harbours directorate actually goes down there to make sure that the taxpayers' money was spent in accordance with your guidelines?

[Al Kathan]

I would like to make maybe a bit of a preamble.

Because our budget is rather small, Public Works and Government Services Canada doesn't have perhaps we'd say the economies of scale to have a good network of marine engineers on staff. So this is posing a particular problem to our region. Of course, if our budget were increased, that would help.

So that gives us an incentive to work more with the harbour authorities. In all cases of course we make sure we have good plans and specifications and contract documents in advance, and we enter into a contract and we treat them as a contractor. So if you do the job, then we pay you. And we'll help them, using whatever means appropriate, in-house staff, if we have to hire a consultant or even Public Works to go out and make sure they're doing the job right. We do not pay them until the job is done to the plans and specs.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you.

[The Chair, Conservative, Gerald Keddy]

Thank you, Mr. Stoffer.

Mr. Kamp.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair.

Thank you, gentlemen, for coming. I appreciate the good information we're receiving.

Let me just start with a clarification, because I know this committee wants to be well informed. The concurrence motion that was passed in the House of Commons was a report from this committee in May of last year. Just so it's on the record, because we may have forgotten what that actually said, and it's been referred to a couple of times this morning, it said: “that the government consider the advisability of raising the current budget of $86.6 M contained in the 2006-2007 budget by $15 M for the fiscal year 2007-2008.” You can find that in Dr. Côté's recent briefing note.

Later in that document it reminds us that the small craft harbours budget now stands at $109.2 million for this year. So it looks like we actually did better than $15 million if you do the math. But my question isn't related to that.

The small craft harbours vision statement says:

The existence of a critical national network of harbours, in good working condition, capable of meeting the principal needs of the commercial fishing industry. These harbours will be operated and managed by strong professional and independent Harbour Authorities (HAs).These HAs, representing users and local communities, will assume full responsibility for all activities at their harbours, including the management and conduct of minor maintenance activities, and provide significant financial contributions to funding their harbours.

I want to start there with that last clause. In terms of the revenue sources for doing what needs to be done at small craft harbours, what does this mean, “providing significant financial contributions to funding their harbours”? Is that referring only to these minor maintenance activities they take responsibility for?

Related to that, in terms of the model that we're using, have there been any discussions, or should there be any discussions in your opinion, about industry--let's call it that for now--or other fishing stakeholders and users having a greater responsibility for funding the small craft harbours?

[The Vice-Chair, Bloc, Raynald Blais]

It is your turn, Mr. Goulding. You can take advantage of your time to answer the question I asked earlier. You might as well!

[Bill Goulding]

I'll use my time carefully.

I think it wasn't in your question, but maybe there needs to be a separate discussion relating to the numbers. I don't think it's accurate to say that the motion has been respected. I think one issue is the program enablers, which is the corporate services of the department. When you can say $109 million, you're including $12 million basically for the overhead of the department. We've got to be careful when we're making comparisons there that they're accurate.

With respect to revenue sources, harbour authorities are making a significant contribution in revenue. I think the last time I looked, in the Newfoundland region, harbour authorities were generating something like $4 million from non-Fisheries and Oceans sources, and putting that right back into the harbours. They're generating this from user fees, from charging for offloading services, collecting revenues for rentals of property and that sort of thing. So for harbour authorities there are significant revenue sources that are coming into the program. We're seeing these revenues going into operations, and to an extent it's going into maintenance, and we'd like to see the amount that's going into maintenance increase, because it obviously would allow the maintenance resources that the department has to go a little further.

Certainly when it comes to industry and other stakeholders contributing, it goes back to harbour authorities being given guidance and direction from small craft harbours directorate to make those properties work for them, to generate the revenues, whether it means charging market-based rents to anyone who's using the property, or charging licence fees, charging off-loading services, or whatever other revenue sources are available to them, plus berthage, of course, and harbour authority membership fees, anything of that nature to generate revenue.

The real strength of the harbour authority has been that harbours have been able to tap into revenue sources that would otherwise not be there for the Department of Fisheries and Oceans. We all know about other public revenue sources in terms of ACOA in Atlantic Canada, and HRSDC, Service Canada, making contributions. So it's enabled the harbours to play on a number of fronts when it comes to revenue collection.

[The Vice-Chair, Bloc, Raynald Blais]

Thank you, Mr. Goulding. Thank you, Mr. Kamp.

Before giving the floor to Mr. Cuzner, I would like to take advantage of the fact that I am sitting in this chair to ask you whether you could answer the question I asked earlier, Mr. Goulding, because I have to leave at 12:45 p.m.

My question was this: given that a leaky roof eventually leaks more and could collapse, what is your view of the situation in your region over the years, regarding small craft harbours and the budget shortfall?

[Bill Goulding]

I think important progress has been made and continues to be made. When you have in excess of $2 billion in an asset base that is exposed to harsh conditions in a marine environment, from depreciation and wear and tear alone, the money we're putting in is just to try to keep that asset base whole and safe and usable for our clients. When Mr. Hegge and Mr. Bergeron were here on Tuesday, they gave you the figures related to a life cycle management study, and said we really should be spending $114 million a year on projects directing the infrastructure. Now we're spending $82 million, I think it is, this year. So there's this gap, the $32-million gap, and that's there even with the $20 million of the IRP that's just been reinstated. So there is a significant gap, and this means we're not really keeping up with keeping the asset base whole and spending what some would argue a good custodian of these properties should be spending.

[The Vice-Chair, Bloc, Raynald Blais]

Would you like to add something, Mr. Kathan?

You have the floor, Mr. Cuzner.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

I recall one of the first projects that went on when I was first elected in 2001. It had been delayed for a period of time because a significant breakwater was part of the project. There had to be some kind of restorative initiative for the habitat that was being disturbed, or they were taking over. That project had been tied up almost a year because of that.

It seems now that the people on the ground are almost banking those habitat credits. Is that a nationwide practice now? Is that a national move?

[Al Kathan]

I don't want to speak for another region, but I believe a bit of that happens in Pacific. We are having some challenges in our area to find a project to restore the habitat when we build harbours in our more remote areas. So at this point, we're meeting with our habitat colleagues to see if there's a way we can. It's a little bit innovative, in that we want to find a way to get other partners, i.e., the Manitoba government or hydro or whatever, and collectively pool our resources and find a project we could do that might be a little farther away.

Along with that might be, along the line of banking, we'll pool our resources and we can either build a project or restore a project in advance for future credit or vice versa.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

So that's more and more an accepted practice now?

[Bill Goulding]

That's correct, pretty much. In the Newfoundland region, we're more or less just starting. We've worked with habitats over the years, but most of our projects have not resulted in a harmful alteration or destruction of fish habitat. However, on closer look, perhaps it has happened in some cases, so now we're moving with developing monitoring plans and getting the necessary authorizations if fish habitat is going to be destroyed or altered with one of our projects.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Are you finding it more and more of a challenge too? In some of the dredging projects, is the disposal of the dredgings driving up the cost of harbour projects? Can you comment on that? Is it tougher to get rid of? At one time, you used to be able to dredge and dump it in the ocean. You're not allowed to do that any more.

[Bill Goulding]

I think our colleagues at Environment Canada don't say you're not allowed to do it, but you have to do it by the provisions of the Canadian Environmental Protection Act and the ocean dumping regulations.

Certainly in a lot of the dredging we've been doing in most cases in Atlantic Canada now, very little is being ocean-dumped any longer because of the regulatory regime, and a lot of it's being land-filled. I know in the Newfoundland and Labrador region, for example, we get permission from the provincial authority to bring our dredged spoils, if they're not contaminated, to municipal landfills. And it's working out pretty effectively, because the provinces are trying to consolidate their landfills, so ground cover is welcome in many respects. But the trucking costs as they consolidate their landfills--and there are few of them--and the cost of dredging are going up, and it's likely to be the case in the future, I would think.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Is that the same in the other regions as well? Is that similar, municipal landfills?

[Bill Goulding]

Yes.