Evidence of meeting #17 for Fisheries and Oceans in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lobster.
10:35 a.m.
Bloc
Yvon Lévesque Bloc Abitibi—Baie-James—Nunavik—Eeyou, QC
Thank you.
Mr. Withers, you mentioned how difficult it was for you to obtain cash from the banks. You had to turn to the Business Development Bank and the Bank of Charlotte County, which, if I am not mistaken, lent you $500,000. I take it that is a local development agency.
Did having to do business with those organizations lead to additional costs compared to what the banks would have charged had it not been for the credit crunch?
10:35 a.m.
As an Individual
I believe somebody here might know the Charlotte County Business Development Bank. It's local. They have a flat interest rate of 10%. It's very difficult to borrow money from the local Bank of Montreal or the Bank of Nova Scotia. They want collateral for everything, and a licence isn't considered as having any value because it's basically government owned. I believe there have been some court rulings here lately that are in the process of changing that. There's a bank going after a fisherman to make him sell the licence and give the bank the money.
But in terms of whether there was more cost to go with the BDC, I don't believe there was any more cost than in having to go with a normal bank like the Bank of Montreal. We had to do a lot of paperwork and have a lawyer involved to draw up.... I don't know all the terms for all these papers I signed, actually. I just wanted to go fishing. We had an accountant involved. When I got into it, the fellow I was buying out created a company, then I created a company. Then my company bought out his company, and it saved a lot of money in taxes. It allowed him to drop his price some and just more or less run it through loopholes to save me money to get through to it.
I hope that answered your questions.
10:40 a.m.
Bloc
Yvon Lévesque Bloc Abitibi—Baie-James—Nunavik—Eeyou, QC
In the event that the Department of Fisheries and Oceans could help you buy out a company and taking into account its profitability up until then, if the department, having confirmed the sustainability and soundness of your plan, provided you with loan guarantees, would that help you? Having such loan guarantees would probably lead to lower borrowing costs.
10:40 a.m.
As an Individual
It certainly should lower the cost to get into it. DFO would have an idea of what's going on in the fishery and be able to see better into the future. If you go to a bank and there's a fellow sitting there in a suit, all he sees are numbers in front of him. If those numbers don't add up, then you don't get your money. But if you had a committee from DFO, or a loan board type of thing, they could look at the fleet as a whole and see that it is healthy and looks to be healthy. It would probably be easier to get the money that way.
10:40 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
Thank you.
Neil, it's good to see younger folks getting into the industry. The older fishermen are still going out there, but who's going to catch the lobsters in the future? It's good to see you sitting here as well.
You talked about the difficulty in accessing credit to get a loan. In Nova Scotia, the provincial minister recently announced new provisions for credit assistance through the provincial loan board for fishermen. What happens here in New Brunswick? Is there a loan board in New Brunswick that could assist fishermen in getting into the industry?
10:40 a.m.
As an Individual
I believe there's a boat loan board. I'm not sure. You can borrow money to buy a boat, but I believe it has to be a New Brunswick-built boat. As for money to get into the fishing industry, I was never pointed toward anything like that.
10:40 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
It's something we can ask the government officials down the road.
Mr. Ferris, how many buyers are in the area?
10:40 a.m.
As an Individual
In our area, the port we fish out of, we have five buyers I know of. There's a buyer on Deer Island, another on Grand Manan, and one on Campobello. There are two buyers in the Alma area.
10:40 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
Are these buyers established? Have they been in the business for a while?
10:40 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
I ask because yesterday we heard from Colin MacDonald, the CEO of Clearwater, and he used the term “Klondike”. Basically, in southwest Nova Scotia you can get in your truck, buy a bunch of lobsters from a guy, and off you go. You can sell them wherever you want. He says it's easy to do. I think he even said any of us could have done it. I'm wondering how it works here.
Neil, you've been in the industry now for a couple of years. Do you have a steady buyer you sell your lobsters and scallops to, or would you switch if a guy offered you, say, 25¢ more a pound?
10:45 a.m.
As an Individual
There's a buyer here in Alma I sell the majority of my lobsters and scallops to. But if somebody came along and offered me more money, I'd have no loyalties to this fellow.
10:45 a.m.
Some hon. members
Oh, oh!
10:45 a.m.
As an Individual
I have to make a dollar, so if somebody offered more, I'd have to take it.
10:45 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
In New Brunswick, is it that easy to get a licence to sell?
10:45 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
In Nova Scotia this year, especially around the city of Halifax, with the price of lobster at $3 or $3.25 a pound, a lot of fishermen decided that their best option was to sell the lobsters off the back of a truck. We had a fair number of vehicles, pick-up trucks—nice-looking ones, too, I may add—in the Halifax area selling lobsters. The people were lined up to get bags of lobsters at $5 a pound, and off they went. Was that happening in New Brunswick?
10:45 a.m.
As an Individual
Our fishery starts in the fall, the second Tuesday in November. I think the last time I got my buyer down was December 2. I fished for another three weeks and sold everything at $5 a pound.
As for those guys driving the nice pick-ups, they probably got them two or three years ago, and now they're trying to pay for them.
10:45 a.m.
NDP
Peter Stoffer NDP Sackville—Eastern Shore, NS
Charlotte County has a large concentration of aquaculture sites for salmon. In our other reports, we heard about the concerns that open-net aquaculture sites have on other species within the water. Do you fish anywhere near those aquaculture sites?
Mr. Ferris, when you talk to older fishermen, have they noticed a change in and around those sites? It's nice to hear that lobster stocks are up. You're catching record levels, so it would seem that the aquaculture sites had no effect on the habitat, but other people are saying it does. As a fisherman, have you noticed any changes? Mr. Ferris, in your discussion with other fishermen, have they noticed any concerns over the years around those sites?
10:45 a.m.
As an Individual
Yes, they've noticed a difference. A lot of sites have taken up a lot of bottom that the fishermen fished on, so they've lost that. They have noticed a difference, but I don't know what it would be, maybe a little more sludge. In any case, they did notice a difference fishing around those sites.
10:45 a.m.
As an Individual
Where I fish, there are no aquaculture sites. But I've talked to a lot of people who fish around them. They shove you out of areas you fish, which puts pressure on other areas, which puts pressure on other fishermen, just like a domino effect. It's the same thing off Saint John, where you get the LNG refinery. They talk about tidal power now, and that's all taking area away from us and shoving us into a smaller area to fish.
I was in a meeting a couple of weeks ago, and a fellow was talking about diving under a salmon net, and he couldn't believe the number of dead lobsters underneath it. I don't know if something was added to those holding facilities to kill the sea lice, but he said the bottom was covered in dead lobsters. So aquaculture is a great concern.
10:45 a.m.
Conservative
Blaine Calkins Conservative Wetaskiwin, AB
Thank you.
I just wanted to set the record straight. I think lobsters are best eaten in Alberta, no matter where they're caught.
Gentlemen, I'm an Albertan who's very interested in the fishery. I grew up on a farm and I see a lot of similarities between being a farmer and being a fisherman. You're a price-taker. You have no control over your input costs, and you have no control over the price that you're going to get. In Alberta right now, and particularly in western Canada, the average age of a farmer is just over 60. We joke out there that when a father hands a farm down to his son he should be charged with child abuse.
Like you, Mr. Withers, most farmers have to subsidize their income. We call it a farming habit. You seem keen on fishing, and you're subsidizing your fishing habit by working in another area, whether it's forestry or construction. Of course, in Alberta many of us flock to the energy sector when we have to do that.
So I see a lot of similarities here. I see a lot of frustrations, and I'm empathetic. I'm looking forward to an opportunity to make some recommendations that I hope will help your industry.
We keep talking about record levels and record catches. When we were talking to Colin MacDonald, chief executive officer of Clearwater Seafoods, he said there were more lobsters out there than ever before, but the quality is not great. He brought up the quality issue, Mr. Ferris, and the word “Wal-Mart” was mentioned, though I have never ever seen a lobster for sale in a Wal-Mart.
Last fall during the election campaign I stopped in at a Subway restaurant, and they had a lobster sandwich. When I was going through university twenty years ago, the only place you could get a lobster in Alberta was at a high-end restaurant, and now we're putting them in sandwiches at Subway. We talk about record catches, but I don't know if that's necessarily the best thing in the industry. Maybe we need to catch less, sell them at a higher price, and keep them in the upper echelon. That is a tough thing to say during an economic downturn, when there's less demand for the luxury items, but I'm wondering about your perspective on that. We're basically turning lobster into hamburger and serving it in restaurants, and I'm not sure that's doing your industry any favour.
Do you guys have a comment on this?
