Fisheries Committee on Nov. 5th, 2009

[The Chair, Conservative, Rodney Weston]

I call this meeting to order.

I'd like to take this opportunity to welcome our guests here this afternoon. Thank you very much, gentlemen, for agreeing to come and appear before our committee.

There are a couple of housekeeping items I'd like to go over before we begin.

We try to adhere to some fairly close timeframes throughout the meeting. We generally allow about 10 minutes for presentations from our guests; you'll hear a beeper go off up here to signal that the 10-minute period has expired. I'd ask you to begin to wrap up your comments or try to bring them to a conclusion when you hear the beeping noise. I generally don't cut our guests off in their remarks, but our members have certain timeframes that they need to adhere to for questions and answers, and they're well aware of that. If you hear a beeping noise up here, you'll be aware of what it is.

Once again, thank you very much for taking the time to appear.

Anytime you're ready to go, gentlemen, the floor is yours.

[David Vardy, Retired Public Servant, As an Individual]

Thanks for the opportunity to present to you on a topic of great importance--the management of the fishery outside of Canada's exclusive economic zone.

When I served as deputy minister of fisheries and aquaculture for the Province of Newfoundland and Labrador, this was a major concern of the government. The province was extensively involved in Law of the Sea discussions and in presenting evidence nationally on the heavy toll exacted by the collapse of the fishery, largely due to foreign overfishing by both NAFO member fleets and vessels fishing under flags of convenience. It was during my term as deputy minister that the concept of custodial management was advanced.

I'm trained as an economist and I hold graduate degrees from the University of Toronto and Princeton University. I've taught at three universities. My career as a policy adviser to government includes close to 30 years as a deputy minister in the Government of Newfoundland and Labrador, including clerk of the executive council, deputy minister of fisheries and aquaculture, president of the Institute of Fisheries and Marine Technology, and chair of a regulatory board, namely the Public Utilities Commission. I've worked as a non-partisan and professional public servant, having served four premiers.

While Canada does establish the TAC for northern cod, we remain only one of 12 contracting parties, and have at best only one-twelfth of the governance. Canada bears 100% of the pain when NAFO does not work, and 90% of that pain strikes directly at the heart of Newfoundland and Labrador.

Only in theory do we have one-twelfth of the governance. The objection procedure can be used and has been used to usurp the collective management decisions of NAFO. However, it has to be understood that contracting parties don't always invoke the objection procedure before ignoring national allocations and fishing well beyond their allocations. They can and have simply overfished without seeking permission in advance.

There are three major issues from the new convention, to which I will refer. The first is the provision for dispute settlement. The procedure for settlement and dealing with objections filed under the convention is protracted and does not allow for settlement during the fishing season. There's no provision to prevent re-filing the objection once an arbitration ruling has been rendered.

Once overruled, the objection may be re-filed, thereby triggering re-enactment of the laborious dispute settlement procedure. In the meantime, the objecting state continues to fish. If a contracting party does not follow this procedure and fishes in excess of its assigned quota, the dispute settlement process does not get triggered until after the damage is done. I would expect fewer objections to be filed under the new convention.

The second issue relates to the provision for NAFO management within the extended exclusive economic zone. Paragraph 10 of the proposed amendments to article VI reads as follows:

The Commission may adopt measures on matters set out in paragraphs 8 and 9 concerning an area under national jurisdiction of a Contracting Party, provided that the coastal State in question so requests and the measure receives its affirmative vote.

I can see no circumstances in which this should ever be contemplated. I have heard no convincing case in support of this amendment, nor do I think it's practical to neuter this provision by requiring that the Minister of Fisheries and Oceans seek the concurrence of affected provinces before extending the invitation to NAFO.

This provision was added without much fanfare in the dark of night, as it were. It reflects a mindset that the management regime established by NAFO and the regulatory areas should be imposed within the EEZ to ensure consistency inside the zone. NAFO should instead ensure consistency by applying management principles outside the zone similar to those adopted by Canada within the economic zone.

I turn now to the decision-making rule, which has been changed from 50% plus one to a two-thirds majority. Over two years ago, on July 26, 2007, I wrote a letter to DFO Minister Loyola Hearn. I quote in part from that letter on the subject of the voting rule. This letter was written the day after a public meeting on the NAFO convention held at the Marine Institute of Memorial University, at which Bob Applebaum was the keynote speaker. That was July 25, 2007.

What I said in the letter was that:

Those who view NAFO as a strong and effective regulator of fisheries may be comforted by the imposition of a stronger threshold for approval. Those who question the effectiveness of NAFO will be alarmed to find that the approval of stronger conservation and enforcement measures will now be more difficult. Most of the people in Applebaum's audience at the Marine Institute last night, including the undersigned, fall in the latter camp and are alarmed at what has happened, because our perception is that NAFO is far from being an exemplar of strong management, conservation and enforcement.

The Government of Canada committed in its election platform to implement custodial management, which reflects a major reform of the governance of the regulatory area and that of the regional fisheries management organization. This new convention is a move away from custodial management, not toward it. Canada's attempts to reform NAFO have been ongoing for a long time, preceding my term as deputy minister of fisheries and aquaculture for the province. Progress has been painfully slow. In the meantime, the Province of Newfoundland and Labrador has paid a big price. The damage inflicted on our groundfish resources, including cod, flatfish, turbot, and redfish, has been enormous.

There was a tendency to downplay the importance of groundfish and the effort being directed to straddling stocks. Compared with prior experience, the level of fishing effort is perceived to be relatively small. The number of ships on the Grand Banks is down sharply from what it was. Does that mean we have solved the problem? Does it mean the stage has now been set for the recovery to take place? No. It means there is nothing left to catch—and there never will be if we perpetuate the existing system of governance outside of 200 miles. Dramatic changes are essential, rather than tinkering to fix something that is beyond repair.

Canada's position is different from that of most countries who host highly migratory or straddling stocks. Our shelf extends beyond 200 miles and includes important seasonal concentrations of mature and juvenile fish. For most countries who signed the Law of the Sea Convention, the 200-mile limit fully encloses their continental shelf and the species that live on the shelf.

The other difference is that we operate in a non-reciprocal environment. What I mean by that is the 11 other contracting parties fish in our waters; we do not fish in theirs. Their fish stocks do not migrate into our waters. We do not fish in the waters of Russia, Cuba, Japan, or Iceland. Generally speaking, other regional fisheries management organizations deal with reciprocal fishing activity.

Moreover, the governance structure of NAFO does not reflect the fact that the non-reciprocal benefits and costs of the organization are not equitably distributed. The cost of management failure to Canada is disproportionately high and is not reflected in the governance structure of NAFO.

I am not convinced that the new convention is a step forward. The net benefit is ambivalent at best and outright dangerous in the worst case. Taken as a package, Canada would be well-advised not only to reject the new convention but also to lodge an objection against it.

I want to conclude by congratulating the four retired executives who have spoken out on this major public policy issue. As someone who has served as a deputy minister for close to 30 years, I understand the culture of our society is that public servants should be seen and not heard, that they should be eunuchs. However, there are times when public servants must speak truth to power when they are in active service, and sometimes even when they are retired. When they speak truth to power, they have to be prepared to put their jobs and reputations on the line.

Good fishery policy requires input from a wide spectrum of society, and not just from those who have a vested interest. In our fishery in Canada, the regulators and the regulated are closely intertwined in a complex web that mitigates transparency and discourages public input. As a former regulator in both the fishery and energy sectors, I can tell you that the best practice in contemporary public administration for regulatory agencies is for an arm's-length relationship between the regulator and the industry regulated.

My advice is that this committee carefully weigh the evidence coming before it and assign appropriate weight to the evidence heard from parties who have a direct interest, compared with evidence given from knowledgeable parties who are at arm's length and can provide a more dispassionate perspective. So-called armchair quarterbacks can offer useful and independent advice because of the fact that they have nothing to gain from it.

I thank you for your invitation to speak on this important topic. I would be happy to answer any questions you may have.

Thank you very much.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Vardy.

Mr. Dean, do you have any comments you would like to make?

[Leslie Dean, Retired Public Servant, As an Individual]

Mr. Chairman, I want to thank the standing committee for extending me an invitation to appear before this committee on a very critical public policy issue that will have major implications for many thousands of Canadians and many hundreds of coastal communities in Atlantic Canada, Quebec, and Nunavut in the decades ahead.

The proposed new NAFO convention, if ratified in its present form, will not safeguard the future interests of Canadians who depend on the fishery resources of the northwest Atlantic for their livelihood, nor will the proposed new NAFO convention provide assurances that these resources will be managed any more effectively than they are under the existing NAFO convention.

Mr. Chairman and honourable members, I have followed the NAFO issue closely in my retirement over these past several years. The public discussion and debate on the matter in recent months, including the testimonies of a number of previous witnesses who have appeared before this committee and before the Senate committee on fisheries, convinced me to accept your invitation to appear.

I would note, however, that when concerns were first raised over the proposed new NAFO convention some 18 months or more ago, I conveyed my concerns at that time in a private letter to the Honourable Loyola Hearn, then Minister of Fisheries and Oceans. More recently, I conveyed similar concerns through the media.

I have not conveyed these concerns as an armchair observer with no direct knowledge of or direct involvement with NAFO down through the years; I am presenting my candid views on the proposed new NAFO convention as a senior retired public servant and concerned citizen of this country who was directly and indirectly involved with NAFO and the very frustrating NAFO decision-making process for approximately 25 years, primarily in my capacity as assistant deputy minister of fisheries and deputy minister of fisheries and aquaculture with the Government of Newfoundland and Labrador.

In related NAFO matters, I also participated in the discussions leading to the adoption of the United Nations agreement on straddling and highly migratory fish stocks in 1995. I was an adviser to the Canadian negotiation delegation on the Canada-France boundary arbitration. I represented the province on various past international negotiations between Canada and other countries in the 1980s, particularly the Canada-Spain bilateral fisheries agreement and the Canada-EU fisheries agreement, including the discussions that led to the resolution of the infamous turbot war. I was also one of the principal coordinators of a massive national and international foreign overfishing campaign that the Government of Newfoundland and Labrador was forced to undertake beginning in the late 1980s.

I am a graduate of Memorial University of Newfoundland and the University of British Columbia. I was born in a coastal Newfoundland fishing village where extended members of my family have had an uninterrupted 260-year history in the fishing industry.

Mr. Chairman, virtually every witness who has appeared before this committee has stated that NAFO has been a dismal failure. I fully agree. I also fully agree with a statement in August 2007 by Dr. Arthur May, a former deputy minister of Fisheries and Oceans, an Officer of the Order of Canada, and the first chairman of NAFO. His statement was that “NAFO is so broken that it can't be fixed.” I also fully agree with his stated position that the current plan to amend the convention could come with some serious consequences for Canada.

The issue before us, therefore, is what it will take to give every assurance that northwest Atlantic fish stocks will be managed in a far more sustainable manner in the future and in a manner that safeguards Canada's interests in the future far more effectively than in the past.

NAFO and its 1949 and 1976 predecessor, ICNAF, both failed because there was little or no political will on the part of some of its key foreign members to make them work for the long-term sustainability of the fishery resources that were being managed and for the very sustainability of adjacent fishing communities with a critical dependence on the resources of the northwest Atlantic.

Mr. Chairman, by way of illustration, over the 1986-1994 period, the European community was assigned NAFO quotas of various NAFO-managed stocks totalling 164,000 tonnes. During this same period, the EU admitted to harvesting 851,000 tonnes of these same stocks, in addition to catches from Canadian-managed stocks to which the EU had no entitlement whatsoever, such as 2J3KL cod. To make the picture even more appalling, the Department of Fisheries and Oceans estimated that the actual catch exceeded 1.3 million tonnes, a staggering nine times the actual EU entitlement. And people wonder why the fishery resources outside 200 miles collapsed.

A recent witness before this committee and the Senate committee stated that there is nothing new or better in this convention than the existing convention that will change the behaviour of fishing captains on the water. If that were the single biggest problem, we might make progress. However, I should point out that foreign fishing captains aren't the individuals on the NAFO member delegations that lodge formal objections to NAFO decisions or reject NAFO's Scientific Council decisions in the Fisheries Commission of NAFO. Indeed, in large measure, decisions like these actually enable captains, with the full blessings of their member states, to exceed what otherwise would pass as sustainable and precautionary quota levels as required under the United Nations fisheries agreement.

We have been assured by the Minister of Fisheries and Oceans that NAFO's old ways have changed. Yet at the most recent NAFO meeting, the Fisheries Commission of NAFO did what it has excelled at best for most of its history: rejecting specific recommendations of NAFO's Scientific Council on several important stocks—and suprisingly, I might add, with Canada's full concurrence at the past September NAFO meeting. In the case of the reopened 3M cod fishery under moratoria for 10 years, the United States and Norway—Norway being the only NAFO member to have ratified the proposed NAFO convention to date—voted against this decision.

A new NAFO, if that is the route to be taken by Canada in the management of stocks straddling and immediately adjacent to a sovereign territory, must have the teeth to safeguard the interests of our coastal communities in the future; otherwise Canada's influence over the management of these stocks will leave Canada, in the words of Dr. Arthur May, with a minority of one in its own backyard, not a majority of eight on all critical NAFO management decisions. I ask rhetorically, is this the solution for our hundreds of coastal fishing communities in response to NAFO's dismal past performance?

This committee has been told the following by a number of those witnesses supporting ratification of the proposed NAFO convention.

The difference between a majority plus one and the two-thirds majority needed on future changes to quota allocation shares is neither here nor there, even though this amendment was earlier touted as a plus for Canada. Moreover, the two-thirds vote will apply to conservation measures as well, thereby making it far more difficult, I might add, for Canada to get support for effective measures in the future, given NAFO's past dismal conservation record.

Proponents of the new convention have stated that there is nothing in the new convention that will change the behaviour of fishing vessels in the NAFO regulatory area. What comfort does this give our coastal communities?

At least one NAFO commissioner has stated that we need not rush to ratify this convention.

Several witnesses, including at least one NAFO commissioner, have stated that it would be preferable not to have the obnoxious, potentially sovereignty-compromising clause in the convention.

Of course, the objection procedure remains in the new convention, and in the words of Professor McDorman, who appeared before this committee, the dispute settlement will take years; moreover, the proceedings of any ad hoc panel established to address any dispute are non-binding.

These concerns are not trivial, and it is absolutely clear that language of the new convention will not serve Canada's interests as the principal coastal state in the NAFO convention and regulatory area. These concerns must be revisited and addressed; otherwise Canada will be entering into an agreement that is terribly flawed when tested against the very reasons that made the existing NAFO convention and NAFO itself dismal failures. If the Government of Canada is not prepared to revisit these concerns, then the proposed new NAFO convention must be rejected outright.

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Dean.

Mr. Byrne.

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

Thank you, Mr. Chair.

Thank you to our witnesses. It certainly was valuable to have you here to speak to us and to provide us with your expertise and your experience on this issue. I thank you for coming before us.

What you had to say pretty well speaks for itself. You put it together quite professionally, and while at times you were passionate about it, it is obviously in balance with the evidence that's been put before you as well, so all committee members have to respect your point of view and appreciate the way you put it. That was done very well. I don't really have very many questions on any of your presentations. They speak for themselves.

I want to ask for your expertise to help resolve a bit of a new issue that's come before us. Through the work of some of the armchair quarterbacks who sit around this committee, we've been able to discover a communiqué of September 28, 2007, from NAFO, which says:

Further to the 2006 precautionary closure of four seamounts in international waters, this year NAFO decided to also close to bottom fisheries a large area on the Grand Banks for the next five years.

Testimony we were given by DFO scientists confirmed that the area that NAFO closed to bottom fisheries is indeed on the Grand Banks outside of 200 miles but on the continental shelf. It is closed to bottom fisheries. I immediately raised the concern that in closing bottom fisheries, probably for the purpose of protecting corals and sponges, NAFO has now closed the scallop fishery prosecuted exclusively by fisherman from Canada. In fact there was an arrest of two American scallop draggers and an American crabber for fishing sedentary species outside of 200 miles on the Canadian continental shelf, showing that jurisdiction is exclusively Canada's as a result of the UNCLOS convention. Canada is now banned from fishing scallop and crab on its continental shelf in the area of the closure that NAFO declared when they banned bottom fisheries.

However, the minister, in a letter today in the Telegram, disputes what I have to say. She says that--and I don't understand this--“the water column above the extended shelf is high seas and that, under UNCLOS, other states have the right to fish on the high seas.”

Mr. Dean, are scallop and crab fished in the water column or on the bottom using bottom fisheries?

[Leslie Dean]

Mr. Chairman, both of these species are bottom-dwelling species and are acknowledged as being Canadian-managed resources as per the Law of the Sea. If one is fishing for scallops or crab, one has to fish with gear that will come in contact with the bottom.

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

This is really confusing. Do you fish scallops with gill nets, or do you get divers to go down and try to pluck them out of the water column? What I'm trying to figure out is why the Minister of Fisheries and Oceans for Canada would say that my argument is irrelevant because the water column is under international jurisdiction?

My point, and NAFO's point, was that the bottom fisheries are now closed due to a NAFO decision, not a Canadian decision.

Do you fish scallop and crab using bottom fisheries?

[Leslie Dean]

Mr. Chairman, when the U.S. crab vessel was intercepted several years ago fishing crab on the continental shelf, a resource under the Law of the Sea managed by Canada, technically that American vessel was fishing in the water column, but of course it was fishing in the water column for a species that was under Canadian management, and that's what prompted the Canadian government to arrest that vessel and it was subsequently fined.

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

So in other words, by banning bottom-fishing activities, by banning bottom traps—because that's a bottom-fishing activity—banning bottom trawls, NAFO has now effectively shut down the capacity for Canada to manage exclusively and afford the right to Canadian fishermen to fish scallop and crab in the areas that NAFO has now shut down on the continental shelf.

We've now lost our jurisdiction. Is that what you're saying?

[Leslie Dean]

I'm assuming that if there were crab and scallops to be found and fished in the past in that specific area, which is now closed, then effectively it basically prevents Canadian fishermen from fishing in that area.

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

And even if there weren't, they cannot fish any more because it's under a NAFO ban. Canada had the exclusive jurisdiction over the sedentary resources on the bottom. They had the Canadian right to fish it. NAFO has now decided, with the support of Canada, obviously...but NAFO, not Canada, has now banned bottom dragging, bottom-fishing efforts in areas that have traditionally been and legally been--recognized under international law--an exclusive Canadian jurisdiction. Is that a loss of sovereignty for Canada?

[David Vardy]

In my opinion it is. NAFO has taken jurisdiction, which it doesn't have under the Law of the Sea. Under the Law of the Sea agreement these are sedentary species. It's as simple as that.

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

Thank you.

I'll pass my time over, Mr. Chair, to Mr. Simms.

[The Chair, Conservative, Rodney Weston]

You have three minutes remaining, Mr. Simms.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Thank you.

I have a very quick question. It's on the concept of reciprocal management regimes that you talked about in the early part of your presentation, Mr. Vardy--and, Mr. Dean, I invite you to weigh in on this as well.

My understanding is that in the other regimes you talked about--let's talk about the northeast Atlantic and all these areas--this is a very common practice simply because there are so many states involved over a small area of ocean. Therefore, the idea of allowing people to fish within your 200-mile limit per se is quite common, and the management regimes in those jurisdictions are set up in that way. However, we find ourselves now under the same operating principle on the northwest Atlantic, or the NAFO, high seas.

My question is, therefore, why would they request that? More importantly, why would we acquiesce to that? Is there any benefit for us, given the fact that it's not the same? You even said yourself that other jurisdictions fish in our waters; we don't go to theirs.

[David Vardy]

What we've done is adopted a cookie-cutter approach to regional fisheries management organizations. We've emulated other organizations that have no relevance to our situation here because they don't have those same reciprocal organizations. I think NAFO needs to be designed to accommodate Canadian situations, and that's what we haven't done. NAFO needs to be reformed so that it is more attuned to the situation with--

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Do you care to offer an opinion as to why we would acquiesce to this?

[David Vardy]

Why would we acquiesce to this? I don't know. I can't give you the answer to that. But in terms of the new article VI, with regard to jurisdiction and sovereignty--you're taking sovereignty within Canadian waters--I see no justification for it. There's provision under the United Nations agreement for straddling stocks, the UNFA, for the regulatory area to govern, to manage their stocks, in accordance with the management rules that are followed inside the 200-mile limit. So I see no reason why Canada has to be turning over its jurisdiction to NAFO.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

If I were to say to you, as a minister, “I need custodial management, and this is a way that it could possibly be done”, what would your response be?

[David Vardy]

This is the absolute opposite of custodial management, because custodial management basically involves Canada extending its jurisdiction while respecting the historical rights of other countries.

We have found that it is very difficult to extend custodial management. It's not an easy thing to do, and nobody suggests it is easy to extend custodial management, because you have to deal with all of those contracting parties. But it was a commitment of government to extend custodial management—and presumably they knew what they were about. Now that the commitment is there, what I see happening is that we're attempting to reform NAFO instead of dealing with custodial management. This is an attempt to prove that NAFO can work and that we can somehow emulate or reproduce the attributes of custodial management through NAFO. Everything that I have seen suggests that it has not been done. Whether it's possible is another question.

If you look at these amendments in this convention, some of them are dangerous and some are benign. When you look at the change with regard to the dispute settlement and the objection procedure, in my opinion, it makes no progress—but there is no slippage either. It's not dangerous. On the other hand, the sovereignty question is absolutely dangerous. When it comes to adopting conservation measures, the two-thirds majority instead of 50% plus one is dangerous.

On balance, what I would say is that we're moving away from custodial management big time.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Vardy.

We'll have another round, Mr. Simms.

Monsieur Blais.

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

Thank you very much.

Good afternoon, gentlemen. Thank you for making the trip to be here and especially for exercising your right to speak. I think it is important to hear your version of events.

Correct me if I am wrong, but, after listening to your remarks, I get the sense that you have lost confidence in NAFO, in terms of its track record. That is also how I feel about NAFO, given the results it has achieved, particularly with respect to Atlantic cod. You were right on the mark, in my opinion.

Consequently, is it preferable to have a weak NAFO, one that works so-so, or not to have NAFO at all? I would like to hear your opinion on that.

Am I correct in assuming that you have lost confidence in the way NAFO operates? Why or why not?

[Leslie Dean]

Mr. Chairman, I lost confidence in NAFO many years ago. The most frustrating years of my public service career were spent sitting around the NAFO table. The final indignity in the late nineties was to reach a point where even our closest ally, the Japanese, was voting against measures proposed by Canada.

The solution is not to have no effective management outside 200 miles. There must be effective management. What I'm saying is that NAFO, in its present form, won't fit the bill and that the proposed measures won't either.

So I think Canada basically needs to go back to the drawing board and take all the time it requires to construct an organization that will work. That's my view.

Thank you.

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

I assume that when you realized what was going on, you were not in a position to speak out. Why did you wait until now to do so?