Fisheries Committee on March 31st, 2009

[The Chair, Conservative, Rodney Weston]

Before we resume our meeting, I would like to point out a change in the agenda here today. There's been an issue with one of our presenters who's been held up in Halifax, and his substitute is on the way. We've changed the order of the agenda. These two gentlemen have very graciously agreed to go ahead of their schedule.

A point was made to me by Mr. Stoffer, a very valid point, a very good point. If any of our presenters today, or any members of the audience today, have any points they'd like to submit to the committee, you could always do so in writing following the hearings. Just because we move on to another area tomorrow...if there's a point that comes to your mind that you wish you had made or you think would be relevant to the proceedings, to the discussion that we're having here, please don't hesitate to forward your comments and concerns to the clerk. We will certainly take it all into consideration.

Mr. Kerr.

[Greg Kerr, Conservative, West Nova, NS]

Just so I'm clear, these are two organizations presenting as one?

[The Chair, Conservative, Rodney Weston]

These are the organizations, yes, that were scheduled to appear at two o'clock. There are two different presentations that we are--

[Greg Kerr, Conservative, West Nova, NS]

These are two separate presentations, then. Thank you.

[The Chair, Conservative, Rodney Weston]

Before we begin, gentlemen--I didn't notice if you were sitting through some of the earlier proceedings. You probably heard the beep that we all hear from the time clock.

I haven't forgotten about you, Mr. MacAulay. Hang tight.

You will hear a beep and that will indicate that the time has expired. We are under some time constraints, as you can appreciate, to try to get it all in.

My colleague, the Hon. Lawrence MacAulay, would like to make a few comments at this point. I will certainly thank him for his patience and offer him the opportunity now.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you, Mr. Chair.

I come from around here, and what's going to happen here at 12 o'clock is they're going to feed this committee. We have about 30 or 40 people who saw fit to show up here today, to show that this industry is important, and in support, to let this committee know that this might be important.

I have ordered lunch for you people too. Please don't leave. Stay here. We'll have lunch, coffee and sandwiches, for everybody who's here. That's the way she works here in Prince Edward Island.

[Voices]

Hear, hear!

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you. I have to admit that Ed Frenette gave me good help on this recommendation, but whatever, that's the way it works.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. MacAulay. We certainly appreciate that.

I will now turn the podium over to our presenters here and let you begin, Mr. Avery.

[Craig Avery, President, Western Gulf Fishermen's Association]

First, I'd just like to thank the standing committee for the opportunity to make a brief presentation here. Mrs. Lockhart called me yesterday. Last week, I was in Saint John, New Brunswick. I was in Halifax yesterday.

I was asked if I was willing to put something together to make a presentation to the standing committee on the crisis the fishery is in today. I thank you for that opportunity. I'd like to explain a little bit about our situation here.

The presentation in your agenda would be on behalf of the lobster fishing area 24. Mr. Morrissey, my friend and colleague here, is chairman of that area. I represent 250 lobster fishermen in that area in the northern end of P.E.I., and I'm just going to make a brief presentation and then pass it on to Mr. Morrissey and he can make his. Then we'll both be here to answer the questions of the committee.

Again, I'd like to start off by thanking the Standing Committee on Fisheries and Oceans for giving me an opportunity to speak on behalf of the Western Gulf Fishermen's Association. First, I'll tell you a little about our association. The Western Gulf Fishermen's Association represents 250 fishermen who fish off the northwest shores of Prince Edward Island, LFA 24. The Western Gulf Fishermen's Association represents each fisherman on marine fishery issues and provides information on new regulations and training requirements issued by Transport Canada. The Western Gulf Fishermen's Association is continually working on projects to make fishing more sustainable for our members.

I'm speaking here today on the lobster fishery. On the conservation side, our association began a study on the impact of bar clam dragging on lobster habitat. We also had in place a proposal to look at the effects of scallop dragging and moss raking on lobster habitat. We had funding in place and were working on the scallop dragging study when we had to stop because the DFO withdrew from the project with no clear reason provided. Our association has organized numerous dragging operations, which were performed by our own fishermen at their own expense to look for illegal lobster traps. Every year, our fishermen pay DFO for additional protection out of our own pockets. For conservation reasons, our fishermen chose not to fish lobster on Sunday.

On the marketing side, because of the downturn in the economy and the projected low prices, this season we have asked both the federal and provincial governments to put in place financial credit guaranteed for both brokers and processors. This will enable to them to purchase lobster and market them in an orderly fashion. With proper credit in place, hopefully this will provide better returns for our fishermen.

The Western Gulf Fishermen's Association is in the process of doing a feasibility study on the freezer and cold storage facility. We would also like to have a live lobster holding facility attached to this facility. On a final note, I would like to present to the standing committee a letter I recently sent to the federal fisheries minister, Gail Shea, requesting a lobster licence transfer freeze within the fishing area we represent.

[Greg Kerr, Conservative, West Nova, NS]

It is a lobster freeze?

[Craig Avery]

It's the lobster licence transfer freeze. The letter is attached to my presentation. If anyone wants a copy of it, you can get it from your clerk.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Avery.

Mr. Morrissey, please.

[Francis Morrissey, Chairman, LFA 24 Lobster Advisory Board]

Thank you. I am the lobster chairman of area 24, which represents the lobster fishing district area 24, and on behalf of the fishermen, I have a short presentation to make to you.

We have titled our presentation “A Plea”, because as fishers we cannot move forward without the support of Fisheries and Oceans Canada, the federal government, and even our provincial government. We must now take the steps necessary to protect the long-term sustainability and viability of the important lobster fishery.

I am not going to repeat the various economic statistics relevant to the lobster fishery here on P.E.I. They are well documented and readily available to your committee. I will, however, focus on our current challenges and the assistance we are seeking to navigate around these challenges. The lobster fishery is at a crossroads, facing a crisis. The solution is out of reach of fishers alone. We need your help.

This is indeed an extraordinary time, a time where the industry, as represented by fishers, has reached the planning stage for the sustainability of their own industry that is ahead of government bureaucrats and newly elected politicians.

During the recent federal election, candidates for the federal Conservative and Liberal parties all promised support for a licence buyback program, a rationalization, but the election is now over, and as usual, the government's line is now not a penny for licence buyback programs. Where do we go now? This is our plea.

The lobster fishery of P.E.I. is as important as the auto industry is to Ontario or as the oil and gas industry is to Alberta. It is one of the few natural resources we have.

Now to solutions, with a price attached. The top priority for the long-term viability and sustainability of the P.E.I. lobster fishery is the development of a funding formula that will allow for the orderly retirement of lobster fishing licences over a period of time.

As an industry, our fishers are prepared to pay our share through premiums attached to renewal of lobster licences. We are calling for the federal government to provide non-interest-bearing loans to be made available to those LFAs that want to participate. Repayments can be made from the proceeds of various stock allocations as well as from premiums attached to the renewal of lobster licences. The federal government controls both these sources of possible repayment funds.

As an example, the federal government has used the Canadian account to provide various sectors with related loans for troubled industries, with up to a 55-year repayment schedule at zero per cent interest. Given this account's maximum flexibility, it could be but one of many financial tools available to the federal government to fund the licence buyback program if the political will was there.

The lobster processing industry will not escape the current credit crisis. The lack of credit for processing plants and brokers will have a negative impact on the prices fishers receive for their catch, maritime-wide.

Government must make available credit options for our industry similar to what the government is providing other sectors of the Canadian economy.

On a long-term basis, government must allocate more funding for research and development of more consumer-appealing packaging and products and an investment in technology required to process these lobster products. In many rural communities the largest employers are our seafood processing plants.

At this time I would like to thank you for coming to P.E.I. and giving fishers an opportunity to voice their concerns. I will try to answer any questions you ask. Thank you very much.

[The Chair, Conservative, Rodney Weston]

Thank you, gentlemen.

Mr. MacAulay and Mr. Byrne, you are going to share your time, I take it. I'm not sure which one is going to go first.

[Lawrence MacAulay, Liberal, Cardigan, PE]

We might. Thank you very much.

Welcome, gentlemen. Glad to have you here.

As my good friend Mr. Kerr mentioned, there was $462,000 announced for promotion in the lobster fishery. I would like you to give your view on that and on how much impact it's had. No doubt any money is important for anything, but we have to make sure the dollars are spent, and spent right.

And perhaps you could elaborate a little. We hear all about this bridge financing for major corporations all through North America. You happen to have an industry too. Perhaps you need some financing. How do you feel that should be handled? Could dollars be put in, in the short term, in order to make sure some fishermen can survive?

I'll let you answer those two questions first.

[Craig Avery]

Mr. Kerr was wondering about money that was put into the marketing end. I want to be clear that I'm happy to hear about any money that comes in to help market our lobster and get me a better price. I'm not condemning it. But at the end of the day, the $450,000 somebody mentioned here earlier--I think it was Mr. Bonnell, about some brochures at the Boston Seafood Show and a cassette or CD with some filming--is good, but it's the tip of the iceberg of what we need to get this thing going again.

I took the liberty of bringing the brochure. It's very pretty. I'll pass it around if everybody wants to have a look at it. There's the folder and the brochure. I haven't got the cassette with me. The money was issued a month ago, and it had to be spent by the 31st of March. It's spent. It doesn't take much to spend $450,000 today. We're looking for between $3 million and $5 million right now to try to get this thing kick-started again.

I'm going to turn it over to Mr. Morrissey in a minute, because he's speaking on behalf of fishermen on the rationalization side for our area. But on financing, I pointed out in my presentation that we support processors. The processors and brokers haven't got financing in place. They're no different from the auto industry. They're going to be shutting down. There are hardly any of them left now.

There are ways to slow down the fishery, but there are so many lobsters there. Fewer traps in the water may help to slow the catch down, but at the end of the day we're probably going to catch just as many lobster. We're quite efficient in our business. Like I said, we need financing for the processors and brokers so they can buy and move their product in an orderly fashion.

We're like anybody else. I spoke about this with the provincial government. Everybody knew last fall, when lobster was $3.25 a pound, that things were going to be tight this spring. So don't wait until next April when I'm trying to fill out my income tax return. I had a tough year last year, at $4.50 a pound. I mean, we lost $30,000 in our income. Fuel and bait and everything was up 35% to 40%.

Take a proactive approach today. Before the end of the season, put something in place so we have a share of some of this money coming down. We're as important here in Atlantic Canada as the oil and gas industry in Alberta and the auto industry in Ontario. We could use help as well.

Fishermen are people with a lot of dignity. They're probably right at the bottom of their credit lines and everything else, and they're not going to come out begging. That's what we do on their behalf. If we can put something in place before the end of our lobster season and before area 25 starts in August, it would be greatly appreciated.

Like I said, on the rationalization side, I'll pass it over to Mr. Morrissey. He's the area 24 rep, and he's working on the rationalization plan for the whole area.

Unless Lawrence has something else....

[Lawrence MacAulay, Liberal, Cardigan, PE]

On the buyback program, what do you feel about it?

[Francis Morrissey]

Mr. MacAulay, we feel that a rationalization program is very important. It allows the older fishermen to retire with a bit of dignity. With the circumstances and financial situation now, there aren't many young people looking to get into the fishery. By having a licence buyout program, it leaves the remaining fishermen to become more profitable, which allows the rural communities to continue to exist and the processing plants to remain with the workers.

We're in the process of trying to draw something up. I fully expect that fishermen are prepared to help out, but we also need federal help and provincial help in coming up with funds to buy out fishermen who want to exit the fishery.

It's very important for the economic viability of the people who are left. It's one way for it to stay healthy. There are people right now who are wanting to retire, but there's nobody to take their licence. Basically, a young person today can't get financing to purchase a licence.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I'd like you to comment on the live holding facility.

What we heard here, and before too, is that the problem with marketing is that there's a glut of lobster, and when there's less lobster coming in the price goes up. You need an orderly flow of lobster in order to make sure you get the best price.

I'd like you to comment on how you feel about a live holding facility helping the industry.

[Francis Morrissey]

I can speak to that on two fronts, as a lobster fisher and as a member of the board of directors of the second-largest processing plant on Prince Edward Island. I've been there for 19 years.

We have just finished installing a $1 million holding facility with absolutely no government assistance. You can't get government assistance. Provincially, they hide behind the OCI deal; federally, ACOA won't look at it.

The reason why we installed the holding facility and the reason why anybody would want to have one is it eliminates what we call a glut situation in the fishery, where, at the start of the season, when the catches are high, instead of processing product into low-value product, you can hold your lobster and do it later in the season into high-end product. The trouble with the high-end product is it's very labour-intensive, but it's still worth your while to do it because the return is there. But by not having holding facilities to hold the product, at the start of the season you've got to push it into this product to get it through or it dies in the plant. Holding facilities are very important to the fishery.

It also extends to the area of our workers. Last year, at our plant, we were able to keep 160 plant workers working an additional three weeks by just what we had in our holding facility. The product that we were doing was very labour intensive, but it was going to a niche market in Japan and the returns were very high on it. It was worth your while, because although your labour costs were higher, your return was much higher.

That's the important thing about lobster holding facilities.

[Lawrence MacAulay, Liberal, Cardigan, PE]

We'll let Mr. Byrne or Mr. Andrews speak.

Mr. Chair, is that suitable to you?

[The Chair, Conservative, Rodney Weston]

Yes.

[Scott Andrews, Liberal, Avalon, NL]

How many holding facilities are there currently here on the Island? You just gave us one example.

[Francis Morrissey]

Most fishing plants have a small amount of holding. As for any large capacity, there'd be very little. With the existing facility we had and the new facility that we constructed, we have, roughly, right now a half a million pounds of capacity. OCI is the largest on the Island, and I suspect they have larger than that. When it comes to the other processors, they all have some, but not very much.