Fisheries Committee on Feb. 10th, 2009

[The Chair, Conservative, Rodney Weston]

All right, we'll begin.

Ladies and gentlemen, I'm pleased to welcome this morning the Honourable Gail Shea, the Minister of Fisheries and Oceans, and her delegation from the department.

We're here to review the supplementary estimates. The minister will be with us for one hour. The officials, I believe, will be staying for the balance, until one o'clock. I'm going to ask that everyone please adhere to the timeframes allotted and try to maximize the time as best as possible.

I'm going to ask Minister Shea if she wants to begin with some opening comments.

Minister.

[Gail Shea, Conservative, Minister of Fisheries and Oceans]

Thank you, Mr. Chair, and good morning.

Good morning to the honourable members. I want to thank this committee for the opportunity to appear before you today.

I want to introduce the people with me. To my right is Deputy Minister Michelle d'Auray. We're very sad to be losing her from DFO, unfortunately, in the next couple of weeks; she's been a very good deputy minister. However, to my left is Associate Deputy Minister Claire Dansereau, and she will become the deputy minister in a couple of weeks. We congratulate Claire on that.

Also with me is the Canadian Coast Guard Commissioner, George Da Pont; the Assistant Deputy Minister for Corporate Services, Cal Hegge; and the Assistant Deputy Minister for Fisheries Aquaculture Management, David Bevan. There are several other officials in the room as well.

I will begin by saying how pleased I am to have been appointed the Minister of Fisheries and Oceans. It's certainly a very exciting and important mandate. Coming from a fishing family and community, I understand the importance of fisheries to coastal communities and to this country's economy. I know how important it is to focus on the economic viability of the fishery.

As this is my first appearance before the committee—I'm sure it won't be my last—I want you to know that I'm eager to work with all of you. The committee has been a strong advocate on behalf of the fishing industry and its stakeholders, and I want to hear your perspectives. I hope that this is the first of many productive meetings in terms of working together. I do look forward to frank discussions in the months ahead about important issues facing our fisheries and oceans industries and our stakeholders. I think together we can make a difference in the lives of Canadians all across the country.

Today I'd like to talk to you about DFO's accomplishments in the months since I was appointed and where we'll be going in the months ahead. I'd also like to touch on budget 2009 and what it means for fisheries and marine sectors as well as coastal communities across the country.

As we all know, the global economic downturn is impacting the fishing industry. Already we have started to see slowdowns and downturns in activities across Canada. For example, last month we saw the impact that the U.S. recession is having on parts of the Atlantic lobster fishery. Looking forward, it's hard to predict the state of seafood markets for this coming spring and summer, but we can expect that times will be difficult.

Fishing enterprises from the inshore owner-operator to the large integrated firms are facing a credit crunch from institutional lenders. Maritime services are slowing down. Oil and gas and mining projects are scaling back. Organizations that work with us in restoring habitat and enhancing fish stocks are finding it more difficult to raise funds.

Our government recognizes the urgency of this situation. That's why we've invested in public infrastructure, construction, businesses, and communities. As all of you know, our government is making strategic investments to strengthen Canada's financial system and to stimulate spending so that Canadians can ride out this economic storm. It's a plan focused on supporting development and growth.

In pre-budget consultations with harvesters and processors, the one issue that came up time and time again was access to credit. I travelled to the gulf, Newfoundland and Labrador, and Pacific regions to hear what people had to say about fishery issues. In my discussions, I heard deep concerns about access to capital and the need for marketing and market diversification. I listened, and our government is already taking action.

We created a business credit availability program that will help our seafood enterprises and harvesters gain access to credit so they can ride out a challenging season. Support for workers is another key component of our economic action plan. By extending EI benefits by five weeks, providing additional funds for training, and extending support for older workers, our government will help ships' crews, plant workers, and harvesters through these difficult times.

For those in the industry who are hardest hit by the decline in our markets for fish, the $1 billion community adjustment fund will help address the adjustment pressures felt in the many fishing and coastal communities. Working with regional development agencies, such as ACOA and CEDQ, my colleagues and I will be able to invest in initiatives that will help our fishing industry weather the storm and adjust to new market demands.

DFO will deliver some direct support to the fisheries and marine industries and the coastal communities that they support. Through budget 2009 the government is working to revitalize these sectors with about $400 million for vital infrastructure such as small craft harbours and the Canadian Coast Guard fleet. We are investing in these areas because they offer the most direct benefits to the Canadian economy. Our strategic investments will help our fisheries and marine sectors survive the economic crisis and be stronger as we emerge from it.

My department will boost marine safety and security through significant investments in the coast guard fleet. Funding will be used to procure 68 vessels and 30 environmental barges and to repair 40 older ships. New lifeboats will improve our search and rescue capacity, while the refurbishment of five multi-purpose vessels will enhance our fishery conservation and patrol capacity. This substantial investment will allow us to support shipbuilding across Canada. Work will be conducted in Canada and, where possible, by shipyards located within the regions of the vessels' home ports. We have vessels in every region across the country, from Victoria to Newfoundland and Labrador. Our long-term investments will renew our vital assets that save lives and support science. These investments will ensure that Canadian waters are safe, accessible, and secure.

We will continue to invest strategically in small craft harbours. As you all know, in coastal communities where fisheries are the mainstay of their existence, residents depend on these harbours to survive. Commercial fish harvesters need safe and functional harbour infrastructure to do their jobs, and coastal communities need sound harbours to survive. Our communities have been waiting a long time for this funding, and I am pleased to deliver it.

I would like to take this opportunity to thank the committee for all its efforts over the years on behalf of small craft harbours. Through your work you have focused more than one government's attention on the importance of these harbours to Canadians.

Let's not forget our government's investments in science and the north. Budget 2009 includes funding for northern research facilities in the High Arctic, and I'm pleased to report that DFO will contribute, through a special allocation of funding, to help speed up the construction of a small craft harbour in Pangnirtung. Not only will this bring vital job opportunities to northerners, but it will help expand and grow commercial fisheries in the north. Investments such as these in key areas will help minimize the impact of the economic downturn as much as possible, and that's what Canadians want.

I truly feel that the only way to achieve economic prosperity and conservation and sustainability objectives is to engage our stakeholders. No one organization should work in isolation. Constant communication and engagement is the way we work today, and we must excel at it. When communicating, we will be clear about our resource management objectives, we will make our science accessible, and we will involve our partners. I can't emphasize enough how important it is to have all the players at the table. Those voices will be heard.

Likewise, I want to hear from this committee about the issues that matter to people in your provinces. You have the pulse of this country and you know what's important to Canadians with regard to fisheries and oceans.

My department will support our goals by working with harvesters on renewing our policies, policies that will allow them greater flexibility in managing their enterprises. We will continue to work on the stability and predictability of our fisheries management. We will improve our regulatory framework, and we will work with financial institutions to provide greater certainty.

These are just some of the steps we will be taking to ensure the sustainability of the resource. Economic prosperity can't be achieved without sustained and sustainable resources.

Environmental issues increasingly have an impact on our markets. For example, we all know that certification and traceability are key to ensuring access to international markets. DFO will work with industry to help demonstrate the sustainability of Canada's fish and seafood products. Our cooperative efforts will help protect and expand access to domestic and foreign markets.

On the international stage, we will continue to work with other countries to stop overfishing and illegal fishing, and we will use our conservation and protection resources wisely while encouraging our own harvesters to be better managers of our public resources. Our efforts in working with other countries are paying off. As a testament to this, we recently ratified an agreement on changes to the Pacific Salmon Treaty with the U.S., which will help ensure long-term sustainability of the Pacific salmon stocks.

Also on the international stage, we will continue to defend the Canadian seal hunt. Senator Fabian Manning recently led a Canadian delegation to the European Union to fight a proposed ban on our country's seal products. The group laid out the facts about Canada's seal hunts to the Committee on Internal Market and Consumer Protection of the European Parliament. Our presentation was based on science, sound management practices, and actual harvesting practices. We will be watching closely as the European Union makes decisions, which could come as early as April. Under my leadership, Canada will continue to defend sealers and harvesting practices. We will dispel myths and promote the truth.

Canada's aquacultural sector will also offer new opportunities for coastal communities. DFO will continue to work with the aquacultural industry to develop a sustainable sector that encourages growth. Looking forward, DFO will focus on bolstering the economic viability of our fisheries and marine sectors. Budget 2009 and our departmental priorities will ensure that these sectors continue to provide economic benefits for Canadians. Together we will help these sectors to become even more resilient, effective, and competitive.

I look forward to guidance from this committee to build the strongest sustainable fishery as possible with jobs for Canadians from coast to coast.

Thank you very much for having me here again. I'll be happy to take your questions, and hopefully we'll have your answers.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

We will begin this morning with the Liberal Party. I believe it will be splitting its time three ways.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Chair, I'll be splitting the time with my colleagues, but I did indeed want to take a quick opportunity, as the official opposition critic on behalf of the Liberal Party of Canada, to simply to say to the minister, thank you very much for appearing before our committee in such an early tenure as minister. It's very much appreciated. There are a lot of very important, urgent questions that I think do indeed need to be asked. I'll simply say that your continued good judgment and swift action on those questions is of benefit to each and every one of our constituents. So we truly do wish you all the very best. We'll continue to hold you to account, but we think the best of you, certainly no less.

With that said, my colleagues do indeed have some very important questions they want to ask, so I'll pass my time over to Mr. MacAulay.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you very much.

Minister Shea, congratulations on your election victory and being appointed to cabinet. You have a very important portfolio for the Atlantic region and for the area that I represent. I can only echo what my colleague had to say. We certainly hope things go well.

I may as well give you the questions and then you can answer them.

I think you're fully aware that there's quite a suspected problem in the price of lobsters in Prince Edward Island this year. I think you were involved, in a previous life, in amalgamation of processing plants. How do you feel that worked? How do you feel about the consolidation of the lobster fishery?

I would like you to deal with issues such as, if fishermen have 300 traps, two of them can go together and fish 500 traps. This is one of the pilot projects. I would like you to deal with that.

Also, what is your view of the points in the 10-point plan? There are a number of things in the 10-point plan that are of great concern to fishermen.

There's a lot of money being spent. We're going into deficit in the federal government, and I believe rightly so, to assist industries across Canada, but the fisheries are also an industry, and a very important industry, where I come from. Looking at the south side, area 26A in particular, and other areas around Prince Edward Island, is there an intent to put in place a buyout for the lobster industry in Prince Edward Island? That would allow the people left in the industry to survive and would give a decent retirement to the people who leave.

In any time left you can indicate what you plan to do on the financing, looking at the situation where our processors dealt with banks in Iceland and now they can't do that. Where are they going to get their financing?

Thank you very much.

[Gail Shea, Conservative, Egmont, PE]

Thank you very much for those questions. Of course, they are all important.

Many of you know that Mr. MacAulay and I are from the same province.

I'll start by responding to your question on the stacking of lobster licences. I do believe that industry consultation is key to what happens in the industry. All of us around this table will still have a paycheque next year, or next week, or next month, no matter what changes are made to the fishery. I believe that changes that are made should come from the fishers themselves. I believe they will better take ownership of the management of the fishery.

Stacking is a policy in place available to those who fish out of Southwest Nova. One element of that policy, which has been in place for quite a while, is that two fishers can share one boat but fish 150% of the traps as opposed to 200% of the traps, so it actually takes some traps out of the water.

As a measure, I guess, to help with the viability of fleets, there were a couple of other situations proposed, which some of the fishers have taken up. One is that one person could actually own two licences and fish 150% of the traps. That's currently in place in Southwest Nova. There's a third option whereby one captain could fish on his licence and another person's licence, with 150% of the gear, but the second captain did not need to be on the boat. Those measures were put in place to help with the economic viability. At the time, fuel prices were very high. Those are options that were available in Southwest Nova, and they're currently not available anywhere else. They're not available in P.E.I. simply because they haven't been discussed with the fishermen in P.E.I.

On the 10-point plan, I will say—and this is the same thing as I said about stacking—I believe the changes and the conservation need to come from the bottom up. I believe the fishermen need to be consulted. A number of items were put on the table for consideration. I have said to the different fisheries groups that it's up to them to go through these different items that were put before them for consideration, and they would come up with what was doable for them.

The issue of rationalization has come up, particularly right in the Northumberland Strait, on both sides of the strait, in LFA 25 and LFA 26A. There are a number of different ways that rationalization can take place. Some of it has taken place on both sides, both in New Brunswick and P.E.I. out of LFA 25 in past years. I have said that I will work with the different groups. There is the community adjustment fund to help industries such as the fishery, and I hope we'll be able to take full advantage of that fund.

When it comes to the processors, difficulties in getting financing have been addressed in the budget under a measure called the business credit access program, which is basically a government guarantee that would allow private banks and private lenders some security in what they may see as otherwise a more risky venture when it comes to lending. So it should make credit more accessible to processors.

[The Chair, Conservative, Rodney Weston]

Thank you, Minister.

Mr. Andrews, you have two minutes left.

[Scott Andrews, Liberal, Avalon, NL]

Thank you, Minister.

It's a pleasure to be at one of my first committee meetings. I'm learning the ropes as we go.

Congratulations to you, Madam.

I have two questions. First is that in budget 2009 you committed $200 million for small crafts and harbours. If you look in the estimates, there is only $100 million to be spent over 2009-10 and 2010-11. Where is this other $100 million, and how will that be outlaid? With regard to small crafts and harbours, there is a challenge to the staff managing these projects and getting work started right away. How is the money going to be allocated to the different regions? We have 987-odd harbours, so is it going to be done on a per capita basis? Where exactly will it be, and how is that funding going to be allocated in the regions?

The second thing is on the coast guard vessel plan. Last year the Conservative government shelved the patrol vessel. After that, Minister MacKay said it was a cost overrun on the estimates and that we were basically going back to the drawing board. It's been eight months now. The new economic updates are all shovel-ready projects. This is a project that should be ready to go if the work has been done. What work exactly has been done since that tender was cancelled? Shouldn't we be ready to call for tenders again on that particular work?

[Gail Shea, Conservative, Egmont, PE]

I'll start with the new funding in the budget for small craft harbours. I can assure you that it is an additional $200 million over two years. The numbers you have seen in the budget apparently are accrual versus cash, so it's an accounting number. But there will be an additional $200 million spent over two years on small craft harbours, in addition to our current budget.

On how that will be rolled out, I would expect it to be in a similar fashion as our regular program, which is that the harbours most in need of repairs would be looked at first. Of course we also have to take into consideration those that are shovel-ready. On the larger jobs, it will take a period of time to have the engineering done and to be ready to go.

I don't believe there will be any problem spending the two years' budget. To answer your question on where it will be allocated, it will be similar to what has happened in the past. We'll try to get it first to the harbours that need the most upgrades.

On the coast guard issue, that is correct; there was a cost overrun. The prices that came in last year apparently were much higher than predicted. The department didn't feel they would get the best bang for their buck and decided to pull the RFP. That being said, prices are probably considerably lower now than they were last year for a number of things, so the process for the RFP is under way with Public Works and Government Services Canada. I'm not 100% sure when we can expect the RFPs to be out to the public, but the process is under way.

[The Chair, Conservative, Rodney Weston]

Thank you, Minister.

Monsieur Blais, will you take the whole time yourself?

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

That will depend on the questions and the answers.

Thank you, Mr. Chair.

Good morning, Madam Minister, ladies and gentlemen.

First of all, I want to offer you my congratulations and our complete cooperation. I have done the same with the other ministers who have come here. The cooperation will be ongoing in the various areas that I consider to be priorities for coastal communities. The future of the fishery is at stake. I see positive things in our future, but, unfortunately, I also see negative ones. I feel that we are going to be able to work together to meet all these challenges.

Let me start with a relatively easy question. In 2009-2010, what will be the budget for small craft harbours across Canada?

[Gail Shea, Conservative, Egmont, PE]

That $198 million will be the budget for this upcoming year.

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

And what will be the amount for 2010-2011?

[Gail Shea, Conservative, Egmont, PE]

And for 2010-11 it will be $202 million.

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

OK. First, why has the greater part of the budget not been spent or invested. I prefer “invested” because I see money for small craft harbours to be an investment rather than an expense.

Why is the amount more or less the same from year to year? After all, we are experiencing the economic crisis and the recession at home just as people are elsewhere. I would go so far as to say that we are experiencing it more at home because this situation has been going on for a long time. Why is the largest part of the new money, the $200 million, not being invested mostly in the first year so that it has a greater impact?

I suspect that you have probably got a whole list of requests on your desks, from us as well as from others, and perhaps they all add up to $475 million or $600 million in projects. Why spread the funds over two years when we could be spending most of the money on work in the first year?

[Gail Shea, Conservative, Egmont, PE]

I guess that's the way it was rolled out in the budget. The economic stimulus package is over two years, but I think also as important is that there will be a number of harbours that we would like to get to because of their condition, and it will take some engineering work and some planning work, so to be fair we couldn't do all the shovel-ready ones and maybe all of the ones that are not in as severe need. We're going to be able to tackle some of the bigger jobs with this additional funding. They will take some time to have the planning done.

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

Let us move on to the seal hunt. You surely must be aware that this is of great concern to me, as well as to the people I represent. The question today is this. What is the department’s action plan to address the current challenge of making up for the complete lack of action on the seal hunt in recent years?

In your opening statement, you indicated clearly that it is a critical matter for you. I assume that, by describing it as such, you also have an action plan. Would it be possible to share it with the members of the committee, because we are soon going to be working on it? Can you provide us with your action plan so that we can, at least, not just criticize it—I do recall what I said at the outset—but also improve it, make it better, so that we achieve the goal of getting rid of the rabble-rousing and misinformation that have gained the upper hand in recent years?

[Gail Shea, Conservative, Egmont, PE]

I do appreciate your willingness to help with this file.

I can say that the Department of Fisheries and Oceans, since I have been here, which is not very long, has put a lot of emphasis on the seal file, a lot of resources and a lot of time on the seal file, and certainly I feel it is unwavering in its support for the seal hunt.

What I do want to do is extend an invitation to the committee perhaps to deal with the people who are working on this file from my department, because I believe there is a role for the committee to play. I wonder if, at some point in time--sooner rather than later--you could schedule a session to talk to the people in the department who are dealing with this file particularly.

We could talk about the seal hunt, but it would probably take most of the hour.

With regard to talking about the plan, we would prefer to have an in camera session with the committee.

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

How much time do I have left?

[The Chair, Conservative, Rodney Weston]

You have less than a minute.

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

I am going to make one short comment and ask one short question, and you can answer in detail. In November 2006, if I am not mistaken, there was a very important forum in Quebec City about the future of the fishery and aquaculture. Loyola Hearns was a participant on that occasion and he committed to help the industry in Quebec to face its great challenges.

Since then, has the file appeared on that nice big list of nice big challenges that you have to deal with?

[Gail Shea, Conservative, Egmont, PE]

I'm not aware of the forum that took place back in 2006, but I have met with my provincial counterpart in the province of Quebec and we have discussed several issues around the fishery that are important to Quebec.

[The Chair, Conservative, Rodney Weston]

Thank you, Minister and Mr. Blais.

Mr. Stoffer.

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

Thank you, Mr. Chairman.

Madam Minister, congratulations not only on your election but on your selection as fisheries minister. You're now the sixth minister I get a chance to question. I see David Bevan here. It's good to have some continuity here. I have many questions to ask you, but the chair will cut me off on a lot.

First of all, congratulations. It's not an easy task that you have. It's very difficult with all the various wheels in your department.

There are several issues. If possible later on, I'd like you to set up a meeting on the Pacific Salmon Treaty. We were advised during last year that we would have a full and open debate in the House of Commons on the treaty before it was signed. Unfortunately, due to timing and the election, that wasn't possible, so I'd like to be able to do that.

Regarding the coast guard, page 10 of the estimates shows forecast spending for 2007-08 at $739.5 million. Then it increases, but in 2010-11 it goes way down to $698 million. That's a loss of $41 million to the coast guard. As my colleague the Liberal counterpart suggested, we've been asking successive governments for years for the midshore vessels, and we keep getting disappointed. Yes, we appreciate the small amount for the smaller vessels. We appreciate the fact that it will assist some of the yards. But the reality is that $22 billion was required for all of shipbuilding, not just for the coast guard but for naval vessels as well. So in the planned spending for the coast guard, shown on page 10, why is there a reduction? That's my first question.

Second, as you may be aware, the government is planning to have the British Columbia Pacific north coast integrated management area host the PNCIMA forum in March. Various groups are concerned that there may not be adequate funding to host that event and get it off the ground properly. I'm just wondering if indeed the department will fund it adequately to ensure that the process already set will carry through.

I have two other quick questions for you.

The Supreme Court of British Columbia's decision on aquaculture the other day is going to have far-reaching effects if this thing stands, not just in B.C. but across the country. I know you have to have time to study these things, so I'd like your comments on that.

Last—although there are many more, of course—the report on the Freshwater Fish Marketing Corporation of Winnipeg was supposed to be ready. I'm wondering if it's possible to have that report and what the conclusions of the department would be on that report.

Thank you, Minister. I have more, but I'll be cut off, and apparently you have to leave. Again, congratulations on your post.

[Gail Shea, Conservative, Egmont, PE]

Thank you.

I may ask George to respond to the coast guard question, if you don't mind.

George, you can go ahead.