Fisheries Committee on May 26th, 2010

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

Would you be able to table with the committee some of the actual documentation of your work as it's been prepared to date?

[Clyde Jackman]

If you mean from the MOU process, I can certainly do that. When we go back, we'll forward a document to the committee. We will consolidate some of those points.

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

I have one last question. It's on collateral.

Do you have any fears of unintended consequences of industry concentration? You mentioned a desire to be able to use fishing licences as collateral. We know that in the fishing industry there are significant amounts of debt load held between individual harvesters and processing companies. If fishing licences become collateral, isn't that actually an inducement to force a calling of the loans, which would end up with fishing licences in the hands of processors?

[Clyde Jackman]

I don't think so. I think right now there's a court ruling in the Saulnier case saying that a licence can be used as collateral. Therefore...well, let's just take the example of something I heard recently. A gentleman purchased another licence; I won't name the agency, but he paid 11% interest on it. People are being forced into those situations because they're either going to have to get out of the industry or they're going to have to pick up another quota. Going that route places an unfair burden on some harvesters.

Through the court ruling, it's been indicated that licences can be used for collateral. Officials from my department have been in touch with Mr. Baird and the deputy minister, and all we are waiting and hoping for is to have the minister sign off on that. That will allow harvesters to use their licences as collateral. Right now, if you're willing to go out and put up everything—your house, your truck, and everything you own—against it, given the uncertainty over fish prices and fish stocks, you have a chance of losing all of that. People aren't willing to take that chance.

If there's anything this committee can do, it's to forward that cause and have that signed off. We'd certainly appreciate it. I have made the case to Minister Shea's office and I will continue to do that. Hopefully in the next short while I'll be visiting Ottawa and making the point to her again.

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

Thank you very much.

[Scott Andrews, Liberal, Avalon, NL]

Thank you, Mr. Jackman and Mr. Lewis, for coming here today.

I've got three questions. We just talked about the MOU, but prior to that you talked about the fishing renewal strategy. You listed a number of items that the federal government offered up that they were going to do. One of them was on the collateral issue. Have the rest of those items been addressed to your satisfaction?

My second question is with regard to a fisheries loan board, or a structure similar to a fisheries loan board. Here the federal government could also play a role in trying to get a little more harvester and processor separation. Is that something your department would encourage, and would you be able to bring some money to the table?

[Clyde Jackman]

In terms of what?

[Scott Andrews, Liberal, Avalon, NL]

I mean in terms of getting control away from the processor and back to the fish harvester.

You mentioned marketing, and my third question is on the marketing end of things. What marketing plan do you see going forward, in particular for snow crab, and is there a proposal whereby the provincial and federal governments could work together? We heard this morning about a crab marketing council. Is that something that would appeal?

Those are the three questions.

[Clyde Jackman]

If you look at whether the parties have lived up to it, I think we have lived up to it as a government. We've been very stringent in our licensing policy: as I said, we have a licensing board that's independent, and recommendations are brought to the minister. We've only had one case in which our ruling was different from what the licensing board had committed.

I think, though, that in living up to the commitment at both levels of government, the first thing that's got to happen is that we've got to recognize that there is an issue here. I emphasize again to you the importance of having all of you read this, because you may not be as familiar with the history of it as the people in the back here, who live in this province. They will know most of what happens here. I think it's really important that politicians at the federal level understand the history of it and where we need to go. Then hard decisions have to be made, and if we need financial support along the way, it has to be a shared responsibility.

In terms of marketing and moving control from the processors to the harvesters, I have to say that this is no different from other business ventures in some ways. We have a commodity that's for sale, and over the past number of years, crab and shrimp—shrimp in particular—have driven many processors and harvesters to enter into arrangements whereby some processors have control of the people who operate the boats.

We've got a loan program in our government that hasn't been subscribed to much yet, but we have to get that control back to the harvesting sector. I do believe that, but again I go back to the overall picture: the big picture needs to be understood before we can move on some of these things.

In terms of marketing, I was very pleased to hear the FFAW this year in the MOU process. The FFAW, by the way, have agreed with the marketing from the outset. We offered to buy a marketing arm under the FPI renewal program a number of years back, but that offer was refused by the processors. Last year we offered a substantial amount of money through the MOU to do some marketing; again it wasn't taken up by some of the processors and didn't get ahead, but I was very pleased to hear this year that they are interested in moving ahead with some marketing strategy. I'm hoping that will come through and that we can see some positive results.

There are other sectors of the industry renewal strategy that we have worked on. Safety is one example. We know the dangers of taking part in this industry, and through a combined effort of a sector of the FFAW, government, and the Marine Institute we launched a safety video this past week.

Many things have been worked on cooperatively, but the biggest thing is going be some hard decisions around rationalizing of the harvesting sector and the processing sector. You're definitely not going to get everyone to agree, but I think the majority of people in the province feel that the rationalization has to take place first on the harvesting side. That's going to take a commitment from both levels of government and, I think, a recognition by the FFAW as well.

[The Chair, Conservative, Rodney Weston]

Thank you, Minister.

Go ahead, Monsieur Blais.

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

Thank you very much.

First of all, when I asked you to wrap up your presentation, I would like to make it clear that I did not mean to be rude or inconsiderate to you. It was a question of fairness.

When the federal minister appears before us, she sticks to those darned 10 minutes too. Possibly, it is not enough in some circumstances. I also understand that the chair in his wisdom may sometimes allow the rule to be bent.

So it was just in the spirit of fairness that I asked if you could shorten your presentation. I am sure that it is very interesting and I am going to read it with great care.

At hearings, I can tell you that—up to now, anyway—I have only been rude once. And that was on purpose. It was to Rebecca Aldworth. I do not know if you know her. We were discussing seals and she was representing the abolitionists. I called her a liar. I did so more than once, because what she was saying made no sense. I was rude then. Today, I am going to try to be the kind of person I am, very patient.

With that out of the way, I would like to know your opinion about the possible solution to the current problem I heard about this morning. Unfortunately, given your history, and Quebec's, we well know that decisions can be made that hurt us very badly, in the present and in the future.

We heard about the cooperative model. This would possibly allow more fishermen to be hired and would mean that owners—who would be fishermen too—could negotiate things like better prices.

Do you feel that the cooperative model is the model of the future?

[Clyde Jackman]

Thank you. We recognize when people are polite and impolite. I didn't sense that with you at all, not at all.

I suppose that in one way the solution is a simple one. It's simply to say that what we need is a downsizing of the number of harvesters and the number of processing facilities. In this province we've seen that some of the cooperatives have worked, but if you're thinking of a total cooperative as a fishing entity within the province, I think we're a long way from that.

Speaking specifically of the harvesting sector, my take on it is that whether you're in a 35-foot-11 or one of the larger ones, you have to have enough quota both to provide you with a reasonable standard of living and at the same time to maintain your operation and the expense that's incurred there. I think it comes down to good science in ensuring that the stock remains vibrant, and secondly to ensuring that the boats that remain in this fishery have sufficient quota.

There's a group here that we haven't talked much about, although I mentioned them briefly, and that's our plant workers. We're talking about a sector in this industry in which the average income, on an annual basis, is probably about $15,000 a year. If you tell me that somebody can survive and live reasonably on that, it just totally amazes me that people are able to do that. Again, it's going to require a strong commitment on the part of the people who are involved in this MOU that we have on the go, and it's going to require commitment by both levels of government.

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

You mentioned overfishing and you mentioned excess production capacity. That leads me to ask you this question. You mentioned it briefly, it has to do with sharing responsibilities.

If there is overfishing, it is because decisions made in the past have caused it. If there is excess production capacity, it is for the same reasons. As for sharing responsibility, let me give you the example of Quebec, New Brunswick and other places this year: a 63% cut in quota. The federal government, whether through Fisheries and Oceans Canada or through any other departments, made no investments and implemented no measures to soften the blow.

You mentioned the plant workers. You might also have mentioned the deckhands, the crew and so on. If you include them, there are hundreds, maybe thousands of people who are pretty much stuck in all this. I would like to hear you tell us more about shared responsibility.

[Clyde Jackman]

You mentioned the 63% quota reduction. The way our fishery is structured right now, if we were to have something of that size of a quota cut in our crab sector in this province, I can tell you we would be in serious trouble; as I alluded to, the crab has become the major species by which income is generated.

In terms of overfishing, we go back to the responsibility of science. We have DFO, who we hope would do the science. I don't know if anybody else has spoken about it here this morning, but certainly in this province we are questioning DFO around the amount of research capacity they have and the research they're currently carrying out. If there's an area where we do need more investment, it's on the research side.

People will fish within the quota that's allocated, but we want the decisions that are made to be made on good science. People in this room will tell you that some of the people who were harvesting turbot, for example, feel there's more room for increased quota of turbot. I spoke to people up on the northeast coast who were quite adamant about that. But it has to be based on science. Fishermen are saying, yes, it's there. But we need the science to confirm that, and then an increased quota means better revenue for some of the people who are here.

I'm glad to hear you mention the deckhands, because sometimes this is a group that is not heard about so much in the fishing industry. They and the plant workers have to be protected.

But I go back to the fact that there has to be shared responsibility in this province about where we're going to go with the structure of this industry in the future. We say we need fewer plants and we need fewer harvesters, and how we get there will unfold, I hope, through this MOU process.

Whether it's better to have the federal government, at the political level, involved at this juncture, I'm not certain, but I know one thing: from the province's perspective, we have got to come forward with our proposal, and by that I mean the FFAW, the ASP, and the provincial government. Then the ask that we bring forward would be that the federal government, we would expect, would be part of what we're bringing forward.

[The Chair, Conservative, Rodney Weston]

Thank you.

Mr. Donnelly.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Thank you, Mr. Chair.

Minister and Mr. Lewis, I appreciate both of you appearing before the committee and providing your remarks. They are very helpful.

Building on my colleagues' questions, I wanted to pick up where you basically left off there, on the management structure, because the two questions that I asked earlier to a different panel had to do with, again, the management and the marketing side of things.

You've presented the situation, and we hear clearly that it's too many harvesters going after too few resources, essentially. You've presented the Alaskan model. We've also talked a little bit about the cooperative model. So there have been a number of suggestions or, I guess, possible management structures that have been proposed. I'm just wondering about how you see the interaction among your level of government, the industry, the community, and the federal government in terms of getting to that ideal situation or a possible way forward.

You left off with talking about the MOU and the process that's unfolding now, and then it seemed like there would be a coming forward at some point in time, where there would be an ask. Is there a way in which we could look at involving the federal government now rather than later? Could you comment on that? Then I'll come back to....

And, sorry, there's one other thing I wanted to talk about and emphasize on the management side of things, and that is moving toward value added or looking at increasing the value for what is harvested now. I think there was an acknowledgement earlier this morning that we need to move in that direction. Could you provide a comment on how you think that could happen?

[Clyde Jackman]

Through the MOU process, DFO officials have been at the table. I've been in politics since 2003, and I know that if I want to find out what information is on the go, it usually gets back to me, so I'm assuming that this is getting back to the federal level.

Also, I met on February 15 in Halifax with Minister Shea and her officials and indicated to her that the MOU is under way, and that we would be coming forward to the federal government. As I said earlier, I intend to be going to Ottawa within the next short order. I will again point out the progress we've made and the expectation as to where we need to be and where the federal government needs to be in terms of support for this.

The best ones to lay out a path forward are the people who are directly involved in it. The FFAW, the ASP, the provincial government...we are into this up to our ears. We know what it's about and we know where we need to go.

The federal government has certainly been engaged along the way over the years, and the history of this points to where they've been with it. The point that we will be at if we can find a successful resolution and agreement amongst the parties at the table in the MOU will be what we will eventually present to the federal government, and the expectation would be that they would be there to support it.

What we have to do on the ground right now is work out the details as to what it is that we want from them. As the minister for this department, I certainly will be updating Minister Shea on that progress, and officials in our department are in contact with Minister Shea's deputies and assistant deputies and so on and so forth.

Around the issue of value added, it's certainly something that we always need to look at, but I think it's critical, though, that we get further along in our marketing. As was pointed out in this presentation, we bring to the market 65% of the snow crab that enters the market from Atlantic Canada. As such, that is something we have to strongly look at.

As I said before, the unions have always supported it, but I'm pleased to see that the Association of Seafood Producers has come a long ways in it. Hopefully before the next season starts we will have something that has progressed to a stage where we can finally get something out there in the market, something that will show a strategy that has been developed between the parties involved at the table.

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

I wonder if the minister can comment on when that will be coming forward.

[Clyde Jackman]

This MOU was signed last year. I believe it was on July 11. They've been in meetings. For the last little while they've been involved in price negotiations, but they did meet last week. My intention is to ask for an update on that in short order.

I can't give you a precise timeline, but I'll tell you one thing: this industry and the people of this province cannot suffer through another two or three years of the kind of stuff they've suffered through this year and the previous year. It's not morally correct. It's incumbent upon the parties who sit around the table to make some tough decisions, and those decisions are in the best interest of the people who are involved in the industry. By that I'm talking about the people in the boats, the people who work in the plants, and to a large extent the processors who make their living from this as well.

[The Chair, Conservative, Rodney Weston]

Thank you.

Mr. Kamp.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair.

Thank you, Minister and your deputy, for appearing.

I'll start with a few questions, and my colleagues might have some as well.

I appreciate the information you've given us so far. I'm still a little confused about the relationship between the fisheries renewal process and the subsequent MOU. It's my understanding that the federal government is sort of intimately involved in the fisheries renewal process, and within the fisheries renewal policy framework an effort will be made to address the issue of rationalization. That's being developed as part of fisheries renewal.

Is that still ongoing? Did the MOU sort of develop out of that? You say that DFO has some people sitting there, but they're not involved and not signatories to this MOU. Perhaps you can clarify for me a little better how the two things work.

[Clyde Jackman]

The federal government has been involved in the industry renewal strategy. They've worked around some of the capital gains issues.

I think the MOU resulted from a dispute that happened around the pricing of shrimp. The season didn't get under way last July, and as a result parties agreed that.... I don't know if passive is the correct word; I used it a number of times in this presentation. But it's got to a point where we cannot allow discussions to just continue and continue.

I've said a number of times that an evolution is taking place in the fishing industry in this province. We can either engage in that evolution and try to offset some of the suffering that people are going to encounter along the way, or we can just let it naturally evolve and let people suffer for the next 10 or 15 years. So this MOU came about as a means to be more aggressive in trying to move the issues along that we know are pertinent to restructuring.

An R and D program for the fishing industry was part of the industry renewal strategy, as well as funding to provide occupational health and safety to address a workforce adjustment program. These were the goals of the program. But if we're going to get into a workforce adjustment program, that means there have to be more aggressive moves on how we're going to restructure this industry. I think this MOU process has evolved as a means to attempt to move the process along faster.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Does the MOU contain the expectation that the federal government would fund, say, 70% of the restructuring of the industry in Newfoundland and Labrador?

[Clyde Jackman]

The numbers were put out there that we as a government were willing to put in 30% of the cost of restructuring that industry. The word we've heard is that we don't see this huge amount of money we would require to buy out licences and commit to downsizing the processing sector forthcoming.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Do you have an idea of what the 100% would be in terms of a number?