Fisheries Committee on April 2nd, 2009

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

I do agree with your earlier statement that if there isn't some sort of local decision-making with the minister, then an ITQ may happen by default at the very end. You can see it happening.

I'll go to the other Mr. Thompson. Sir, you have a copy of the letter you sent to Gail Shea . Is it possible to get a copy of that for our committee as well?

[Richard Thompson]

Yes. I have four copies of the letter.

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

Very good. Thank you.

Also, sir, you talked about the decision-making here locally. You can't reach a 100% consensus among us, let alone fishermen. However, there have been examples of a board making decisions in lieu of the DFO minister making them. The Canada-Nova Scotia Offshore Petroleum Board once made a decision about seismic testing off the western side of Cape Breton. The assumption would be that it's a ministerial responsibility to determine whether seismic testing could damage crab or other stocks, but the decision to allow that testing came from the board. The minister supported the decision, but at least it showed a board being allowed to make a decision based on something that happened in fisheries, or in the ocean, in that regard.

I thought that was a good example of cooperation between the board and the department. Some of us may not have agreed with the board's decision, but at least a decision was made at that local level. I think you've come up with a good point, and it's something that could be looked at, not only by the committee but also by your province and by organizations as well.

How involved is the province in this regard? Would they come to the table in terms of assistance in a buyback, in scientific research, or in setting up the board?

[Greg Thompson]

Actually, I find the current minister quite supportive of the fishing industry. Our provincial minister said many times the status quo is not an option, and I think we have a good working relationship. He's also our MLA in our area. He's a go-getter.

[The Chair, Conservative, Rodney Weston]

I have a hard time with that last comment, when you said “the current minister”. My colleague from Newfoundland thinks that was a backhanded slap.

Go ahead, Mr. Allen, please.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Welcome, everybody, and the committee, to New Brunswick. It's nice to be here, even though we're still a little way from my riding, but we're probably closer to Rodney's as well. I thank all the people from the community for coming out.

I would be remiss not to mention a couple of special people who have joined us. They are two reasonably local MLAs, Wayne Steeves from Albert and Mike Olscamp from Tantramar. Thank you, gentlemen, for coming out today.

I have a few questions I'd like to ask. We talked about decision-making, Greg, a while ago. Being a member of the Fisheries Resource Conservation Council, you're probably familiar with the report. Some of the testimony we've heard was that there's been quite a bit of effort in terms of rationalizing and what they call the Quebec initiative in the report. You've talked about some LFAs saying that they aren't really fussy about a buyback, but there are other areas where we probably do need to rationalize a little bit, and I do appreciate your concern that some would like to exploit less and some would like to fish harder. That's pretty consistent across the LFAs as well.

If some of these LFAs have had success in doing self-rationalization themselves, what types of things have you talked about in order to lower the exploitation rate, especially in LFA 36?

[Greg Thompson]

When you say “lowering the exploitation rate”, are we talking in terms of buyback? To me--

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'm asking about the amount of fishing.

[Greg Thompson]

I have spoken at length to my association and to the lobster committee. I'm quite, shall we say, “green” in my group, but I, for one, feel quite strongly that we could lower our number of traps. We fish 300 traps. We could lower our trap limit. It's very unpopular with the fishermen.

I've talked to fishermen. We have been to four lobster meetings, and this is the fourth one in a week. The American fishermen fish 800 traps all year long. They say that they couldn't get by with one less. Grand Manan fishes 375 pretty nearly all year. They couldn't get by with one less. Up towards Cape Breton, there's a guy who fishes 62 days with 250 traps; he catches more than any of them, and he says he can get by with 225. I think we should lower it, but other fishermen don't agree.

You get all these views out there, and most people feel.... Anywhere they've lowered trap limits around the world, they have not lowered their catch. That would cut your carbon footprint. It would cut your whale entanglement. It cuts your expense. There are so many things, so many positives, but my fishermen don't buy it. So how do we make a decision?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Wouldn't you prefer it to be a grassroots development like that, as opposed to being forced top-down by a minister?

[Greg Thompson]

I would prefer it, and where it has happened, it has happened because people looked over the brink and didn't like what they saw.

In the Bay of Fundy we're running at a 100-year high. People feel everything is good. In Quebec, which has done well, and in Cape Breton, which has taken a lot of initiatives, they were driven to the brink. They saw what it was like to have nothing. The interesting thing is that they've done a lot of positive things, and it hasn't hurt. Their fisheries have rebounded. Now, they will say that they don't know that cutting back caused the rebound, but it didn't hurt the rebound. The rebound happened anyway.

That's the case everywhere around the world, but still we cannot convince the fishermen.

Part of it is that fishermen will not join associations and they do not keep up on the real challenges facing the industry. Part of an initiative under the province is to try to work through the provincial round table to increase awareness of what fishing in this day and age entails. It's not like when my daddy used to do it. Fishing is different, and you have a whole group of consumers out there who are demanding things from the fisheries. They want their food to come in certain ways, and we have to answer to them if we want to sell.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

The next question is what's going to happen next. We were discussing this point a little bit yesterday. We were saying that these are 100-year highs, which makes me a little bit concerned. If you're at 100-year highs, what's going to happen next? In testimony we heard in Ottawa, nobody really had a good feeling for how much biomass is out there. I find it amazing that with the R and D capabilities we have these days, it's still really hard to pin down what the biomass is.

Richard, you commented that you thought the stock was good. How do we really know, and how do you do your assessment? Is it just based on the catches? If that is the sole method, how do you really know that it's sustainable?

[Richard Thompson]

Our fishery is conducted on a seasonal basis. We have a trap limit, and there are mechanisms in our traps to let the small lobsters out. I talk to fishermen. I know fishermen. I am president of a company that deals in lobster. We handle a lot of lobsters and deal with a lot of fishermen. I hear from them that there are lots of female lobsters with lots of eggs. I hear reports of lots of small lobsters on the bottom—mixed, all different sizes. All the fishermen's reports on our stock are good. That's where I get my information.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

The PSP issue came up in Yarmouth yesterday. What was interesting about the comments was that Canada seems to have a little different export regime. The product gets inspected on the way out to Japan, then it gets inspected again on the way in. There are FDA warnings in the U.S. against PSP, but it doesn't appear that the U.S. has taken the same approach.

Are our lobster export rules different from what they have in the U.S.? Have you noticed any difference in the market in Japan because of these warnings?

[Richard Thompson]

I'm a small-scale dealer, but I mentioned Japan because I know that Japan rejected our lobster. When our lobster is rejected in one marketplace, another marketplace may be stressed. There's only so much capacity to absorb so many lobsters. If one marketplace dries up, then the product is pushed on other markets. We don't need to dump lobsters on our markets; we need to market them in a financially viable manner.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I have a question on the sustainable practice and certification. We recognize that to be able to market our lobsters in other markets—European Union or whatever—we're going to have to have these eco-certifications. Has there been any discussion on this? Does anybody have a good feeling for what this might mean to the cost of doing business for a harvester or a processor, as opposed to your present fuel and bait costs? Do we know what the impact is going to be?

[Greg Thompson]

I don't have a sense of the cost. It will cost. It costs to have this, but there has never been a certified fishery that hasn't had conditions attached. We won't have an idea of how these conditions will affect our fishery until we go through a pre-assessment. I mentioned traceability. Should you wish to use the logo, you will have to have a chain of custody traceability. That will be expensive, and it's going to come out of the lobster money somewhere along the line.

Whether it will require more information gathering is not yet known. Right now DFO's budget is such that the scientific budget for gathering information is small. Sometimes a head biologist will come, because he can hire a technician. They come with me to sample my catch once a year. They do roughly 11 trips. They do one dive in district 36 to check for juvenile lobsters. This is the type of budget that they're working under. If there's a demand from the sustainability or eco-labelling group for more information on this fishery, I am dubious that DFO will step up to the plate with a lot more money. They don't have it now, and it will fall to industry to come up with it.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you.

[The Chair, Conservative, Rodney Weston]

On behalf of the committee, I would like to take this opportunity to thank you for coming to provide us with your suggestions and advice. We appreciate your taking time out from your busy schedules.

Thank you.

We will take a short break while we wait for the next witnesses.

[The Chair, Conservative, Rodney Weston]

We're ready to resume our meeting this morning.

Today we have with us two individuals: Norman Ferris and Neil Withers. I wonder if you two gentlemen could in your presentations clarify for the record where the best lobsters come from, because there has been a lot of confusion. I appreciate you gentlemen coming in today to clarify the record.

Mr. Ferris.

[Norman Ferris, As an Individual]

My name is Norman Ferris and I'm a scallop and lobster fisherman from district 36.

Our industry is no different from potato farming or wood harvesting. We are all working with resources where consumer demand drives the price. Like them, we face the challenge of high costs for fuel, bait, gear, and equipment. We use the best technology to keep up with the times—state-of-the-art wire traps and electronics, bigger boats. We are catching more lobsters than ever and seeing more juvenile lobsters. The lobster stock is strong.

As entrepreneurs, our goal is a profitable and sustainable fishery. Measures to protect our stocks are as follows: V-notching female berry lobsters, trap limits, escape hatches, seasons, and measure control.

When there is a downturn in the economy, the first thing omitted is the luxury items such as lobsters. A drop in demand results in lower prices.

I spoke at three tourist seminars during the summer of 2008. There were usually 30 people at one sitting, and they're all Americans. They are interested in our fishing and how we catch lobsters. The most common question asked is, how do I tell if a lobster is fresh? They told stories of ordering lobsters in restaurants and finding very little meat in the shells. They said that had been their last order of lobster, either at a restaurant or fish market.

The practice of holding lobsters in a pound for four to five months and then selling them as fresh is degrading the quality of the product provided by the fishermen at the time of sale. If there was some way to mark the lobster with the date it was bought from the fisherman—even the month—this might hasten the product's going to the market and strengthen consumer confidence. The lobster is held to raise the price, sometimes to four times that paid to the fisherman, all the while deteriorating the quality and marketability of the product.

Dealing with buyers hasn't changed since the 1970s. We don't know the price we will be paid until the lobsters are piled on the wharf. It is never told until then. Back in 2006-07, some buyers had the lobsters three days before fixing a price.

We need a strong voice in tourism to promote our lobsters, both for the tourists and our fellow New Brunswickers. Let's discuss the situation we find ourselves in today. Our biggest market has been the United States, but their economy is severely depressed, with millions unemployed or living under the threat of lay-offs. It's not a good situation for lobster prices this spring.

How can our government help? Here are three suggestions.

One, if sales are so low that the EI requirement is not met, make an allowance to ensure income for the off-season.

Two, subsidize the price, and at the end of the season the fisherman applies, based on his sales slips, and the buyers have no input, claim, or control.

Three, establish a board or committee to control mark-up of fresh lobsters in the stores. For example, $3.75 is paid to the fisherman; $11.75 is charged to the consumer. Free enterprise is being abused.

The bottom line is demand. If we can increase the demand here at home, it will help stabilize the market.

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Ferris.

Mr. Withers.

[Neil Withers, As an Individual]

I'm relatively new to the fishery. I've owned my own boat and licence for only four years. I'd board a boat every chance I could since I was probably 15, and I worked as a deckhand for eight or nine years.

In the last few years, the last year especially, we've seen the price drop dramatically, but if you go to the grocery store, the price remains the same. Somebody is making a pretty good dollar in between me and that grocery store. We need to get closer to the customer. There are too many people in between the fisherman and the consumer.

I fish scallops also. I was at Sobeys one day, and I saw they were selling fresh scallops for $13 or $14 a pound. We were getting about $6.50 off the wharf from the buyers. I asked him where he was getting his scallops. He went out back and brought out a can that said fresh scallops from Bedford, Massachusetts. So here I am, catching them 20 minutes away, and he's buying fresh scallops for probably $10 a pound out of Massachusetts. The majority of my scallops will be sold to the buyer and then sent to Boston or the Massachusetts market, and it looks like they're turning around and sending them all the way back. I approached him and said I'd sell them to him for $7 a pound. I would be making more, and he would end up making more. But he said he couldn't do that; he wasn't allowed to buy them from me without a buyer's licence.

There's a lot of money being made in between. I'm sure it's probably the same way with lobster.

Our price keeps dropping, but the buyer will keep dropping the price to show the price he's getting. He's always making the same. I don't believe there's any loss for him. It's always passed down, so he always has the same margin. He's making 50¢ a pound, and if it drops $1, he drops a dollar to us, so he's still making that 50¢.

Norman was talking about the quality of lobsters being sold. Basically, around the world people will buy the lobsters and they'll impound them for five or six months, and the lobster will deteriorate as they sit in these pounds. I believe if they are chilled, they'll hold their meat a little better, but they're not always done that way. So if you go into a restaurant in Toronto or somewhere and pay $35 for a lobster, and you open it up and nothing but water runs out, are you going to go back and buy that lobster again? Probably not. That's one of the reasons we have to get closer to the customer.

I believe the government has to do more marketing for us. As individuals, we're pretty limited in terms of marketing lobsters around the world. You see the salmon being marketed quite extensively, but I believe the province has quite a bit of money invested in the salmon industry, in aquaculture.

That's basically what I have to say about the low prices. There's a lot of other stuff I'd love to get into, but I don't believe that is what the committee was formed to look at. I believe some of you have what I've written down here. If you have any questions about the other stuff, I'd be more than willing to talk about it.

There's one other thing. When I was just new and looking to get into this industry four years ago, I had an awfully hard time trying to find anybody who would lend me money to buy into the industry. I was looking for a quarter of a million dollars, which is a good chunk of change. The banks wouldn't recognize the licence as holding any value, so they couldn't hold it as collateral. I was buying an old boat worth $20,000. That's all I had for collateral. I had to put my house up and find co-signers and everything else. The banks were out of the question. I had to go to the Charlotte County Business Development Bank. They were willing to lend me the money, but the interest rate was unreal, 10% or higher.

In another year, I'll have one of my biggest loans paid off, so I'll be able to breathe a little easier, but right now I can't make my income from fishing alone. Through the winter, I'll end up going to do some scallop fishing and through the summer I'll have to do construction work. You have to fill it in.

That's about it. I can't say anything else.

[The Chair, Conservative, Rodney Weston]

Thank you, gentlemen.

Mr. Andrews.

[Scott Andrews, Liberal, Avalon, NL]

Thanks, guys, for coming in today.

I'd like to hear how you got involved in the fishery and the challenges that may have hindered you from getting in. Are you an exception to the rule? Are there many other people trying to get in? Maybe we could talk a little about your experiences with the BDC and how they helped you. They now have some extra guidance in providing funding. How far did they go in assisting you?