Fisheries Committee on April 1st, 2009

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

Mr. Morrow, the indications are that the government can either do lots of things or not do lots of things. Sometimes if it's just a supply and demand system, then basically you let the marketplace decide and eventually things will clean up. But in the meantime, you did mention some things the government could do in terms of holding the insurance, when you have all of that, and of course the credit systems. The credit systems will be a lot harder to pick after that.

But in your long experience in the fishing industry.... With everything that is happening in terms of the demand cycles, you're right. In December, for a few days after dumping day, man, this place is packed with lobster. It's the same in May.

You said it could be stretched out over a longer period of time. We heard in Quebec, for example, that some of the fishermen voluntarily reduce the number of traps on their boats. In P.E.I. or the Magdalens--one of the two--we heard that they don't fish on Sunday. They've taken that day off. Would those types of relaxations on the concentration of that effort be something that LFA 34 should look into, just to ease the pressure of what's coming into the processing plants at the same time? Do you have any other recommendations you would make?

[Denny Morrow]

I think somebody from DFO at a meeting yesterday pointed out that about 50% of the lobster that's landed in LFA 34 is landed in the first 15 days in the season, so there is a big concentration. You have to remember that once the water gets cold in January, lobsters don't trap very well. The fishermen have to have a price that will enable them to fish in deep water where they can find pockets of warmer water where the lobsters will crawl. Certainly a $3.25 price doesn't do that. It doesn't even cover for a lot of fishermen the costs they had in December.

Believe me, I'm not here today to say that this is going to be the price this spring. We really hope that with supply and demand we can work it so the fishermen can survive this period, and that we can survive it. So spreading it out, yes, we're constrained by the length of our seasons, and the length of the seasons are there for good reason. We try not to fish when the lobsters are moulting.

Sure, I think there are some things that can be done. I've always wondered myself if we couldn't reorient some of that December lobster, catch it later and spend more time promoting and working on summer sales when people are vacationing all over North America. If we had good promotional campaigns and worked more on that market, and also the European market, maybe we could reorient things a bit.

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

I have two other questions. The first one is for both of you.

Denny, as you know, in the past few months there were a fair number of media articles about the fishermen talking about a lobster marketing board or marketing system. I was just wondering about your views on that--and Adrian, your views as well.

The last question for both of you, and I've been asking this question to others, is regarding Georges Bank and the possible lifting of the moratorium from oil and gas exploration and seismic testing. I'm just wondering what the fish packer association's view would be on the those issues.

[Denny Morrow]

I'll go first.

On marketing boards, we're free enterprise people. We believe that companies, if they can make a profit, will do the best job, but an industry promotional council, I think there's buy-in for that. Let's involve some harvesters and let's direct some money at generic marketing of the product. Sure, we can do that.

Georges Bank is the only place between Cape Cod and Labrador where we've had any significant recovery of a groundfish stock. We have the biggest biomass of haddock that we've had in the last 50 years on Georges Bank. We have 20% of the bank and the Americans have 80%. We don't think it should be put to additional risk through oil and gas. There's a bill in the U.S. Congress right now to protect the 80% of the American side. I've been talking with staff from Congressman Markey's office, and we expect the Americans will pass that legislation to protect their part of the bank. We manage the groundfish stocks together with the U.S., and it's been successful. We think we should be cooperating with them on protecting Georges Bank from oil and gas exploration.

As an industry, we've cooperated with the oil and gas industry. They can fill their boots on the Scotian Shelf. There are no other areas protected, and they've been drilling and doing seismic all up and down the Scotian Shelf. We haven't objected to that, even though it's sometimes interfered with the fishing we do.

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

Adrian.

[Adrian Gloade]

I agree completely with that.

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

And the lobster marketing board?

[Adrian Gloade]

Well....

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

If you don't like the idea, just say it.

[Adrian Gloade]

I don't like it.

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

In 2000 we asked that question, and the answer was no. Okay, thanks.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Mr. Kerr.

[Greg Kerr, Conservative, West Nova, NS]

Thank you, Mr. Chair.

Welcome to both of you. This is quite a learning curve for us. Sometimes you think you understand it, and then you learn a lot more.

I'll divide my questions between you, if I could. And I'll start with you, Denny

One of the things that we've heard is obviously about the issue of quality, quality control. The market is all about quality, plus price. One of the concerns--and we've got some variations, and you gave another variation today--is on what sometimes impacts the quality. Could you expand a little on the handling? Part of this was stirred up this morning with the Clearwater comments about the amount of damage that's done that way, I think 15 million pounds, or 15%, or whatever it was. But there's talk of it happening at all levels. You were talking about the handling on the boat, whereas we're thinking of handling traps after they left the boat. Can you expand on what you mean by that, please?

[Denny Morrow]

First of all, on the boat, as the season starts, it's very high. As I said, 50% I think is landed in the first 15 days, so you'll see boatloads of 3,000 and 5,000 pounds coming in. Sometimes the boats have been out for too long and the lobsters are not held properly, not handled properly. That's one issue.

You have to remember it's a competitive fishery. Fishermen view it that if they don't catch the lobster, somebody else will, so they're going to do their best to catch as many lobsters in a short period of time as they can. That's the way the fishery operates.

Can we do more on quality with the fishermen? Some fishermen do a very good job; some don't.

Holding.... For lobsters, generally, that are held in crates, in cars just in the water, for any length of time, that's not a good system for holding them.

I'm often asked, “Why don't the buyers have a two-price system or a three-price system?” We would be willing to talk to the harvesters. We need to have more organization in the industry. For example, you could do an auction, an online auction. That's one proposal that's been put forward.

There are others you could entertain, but the way our competitive buying system works is if a fisherman comes in with a lower-grade lobster, usually there's always a buyer who will buy it, and he will pay the same price as the guy who gets the good-quality lobster. Sometimes you'll find a mixture. And if you say “I don't like that lobster, it's not good quality”, then you may lose that boat to somebody else.

There are incentives in our competitive buying system that we have right now and in our competitive fishery that don't always work for quality. We have started talks with our lobster industry round table as to what we might do, what alternative there is to the current setting of shore price--one shore price--what we could do. Those are talks at this point.

[Greg Kerr, Conservative, West Nova, NS]

Okay, perhaps I could just pursue that, because if you're going to stay as an independent industry, quality and price are the bottom line, and governments can't fix that. So I'm going to lead to the next part of that, handling. Is that exacerbated at the processing end? You say at times there's way too much product arriving. Can I assume, from your perspective, that processing can add to the difficulty on quality control, particularly when there are large numbers coming in at the same time?

[Denny Morrow]

In our December fishery down here, we certainly welcome the processors, because we have a percentage of lobster that we don't want to put on the live market. It's fine for processing. The fact that the processors are here to buy, this year, six million pounds, sometimes as much as ten million pounds, takes that lobster and keeps it out of the live market, keeps it from depressing the quality that we're sending out.

Some of it, Greg, you can't control. If you have a late moult, sometimes the lobster just hasn't recovered when we start our fishery, so you get a percentage of lobster that's soft, that's not full-meated, and that damages easily. So we move that to the processing sector, and they shuck the meat and they put it into various products. The meat's still fine.

Clearwater made the point about live lobster. We have to make sure that we don't mix the poorer-quality shell product into the live tray. We want to get that out of there and send it to the processing plants. The processed product is still perfectly good.

[Greg Kerr, Conservative, West Nova, NS]

Okay. I don't know if others had questions, but I have one more on that line.

To me, it comes back to this: it's the selling; it's the market protecting it. And we do hear all those stories of trucks stopped at the border for long lengths of time and Americans being very enthusiastic when it comes to slowing down the product and so on. But if the quality's not there, that's going to really nail you at the border and at other market areas.

What do you see going forward, though? You don't want to see more inventory on the processing side. Overall, you're just saying the inventories are high there, so the more live, the more quality goes out there. What, going forward, in terms of recommendations on the cooperative activity, do you see would make sense? If this is one of those difficult times in our history economically, what should we be collectively doing together that's going to make a difference in a year, or two or three or four years down the road?

[Denny Morrow]

I'm not a good person to ask about processed lobster, as to what should be done there.

[Greg Kerr, Conservative, West Nova, NS]

Okay, I see.

[Denny Morrow]

I have had discussions with processors where they talk about the need to slow down the product moving into their plants to give them time. There are some products that are, right now, in high demand. We have some inventory buildup of products that aren't.

That's the situation that has to be corrected. I know the processors on the island and in New Brunswick are having discussions with fishermen. At least I've been told that they have been. I think one of the difficulties is that when the season is under way, it's very difficult to talk to harvesters, because it's a competitive fishery. They're going out every day they can possibly fish. It's hard to even talk to them about, look, our inventory's coming in too fast, or we're getting overloaded and we're afraid the price is going to drop, maybe we should slow things down a little bit. We can't have those kinds of discussions.

We did have one. Ian Marshall from DFO was at the meeting in early December down here because we were afraid of just that. The landings were high, and they were coming in fast, and the price was low, and we worried about a crash. We did, very quickly, pull together some of the major buyers and some of the LFA 34 fishermen, and we talked about it. We said let's have a conference call in another week or week and a half, if we see things getting worse, because we may have to take some action. That's the kind of thing, I think, that we're into now and could very well be into this spring.

How do you get the industry together and say let's make a change, while we're in the season? It's very difficult to do.

[Greg Kerr, Conservative, West Nova, NS]

Okay.

[The Chair, Conservative, Rodney Weston]

Mr. Weston, you have a minute and a half.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

If Bannister and Landy could run a mile in four minutes, then we can get four questions in a minute and a half.

Thank you both for being here. As the MP for the Olympics riding, I would ask you, have you thought of promoting lobster as the Olympics dish?

[Denny Morrow]

I haven't. It certainly is a good idea.

Nova Scotia did a promotional campaign, a first try at it, in Alberta over the Christmas season. It got a good response out there.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Can I suggest that you check with VANOC, the Vancouver organizing committee, to see if there's an avenue there?

Question number two is about the business development corporation. Our minister responsible has said in the House many times that things have been relaxed. Have you looked at that? Will the Export Development Corporation ensure receivables for overseas lobster shipments?