Fisheries Committee on May 27th, 2010

[The Chair, Conservative, Rodney Weston]

I call this meeting to order.

Ladies and gentlemen, thank you very much for joining us here this morning. It's great to be in Cape Breton. Thank you on behalf of the Standing Committee on Fisheries and Oceans for taking time out of your busy schedules to come to meet with us today, share with us your thoughts, and hopefully answer some questions that members will have. I'm sure you're all anticipating the questions, and the members of the committee never disappoint in that respect.

Ladies and gentlemen, we do have some time constraints we work within, in the interest of fairness to all and to try to ensure we are able to hear as many as possible and the different points of view when we meet with guests. So if you hear a beeping noise up front, it is a little timer that the clerk has. That alarm will sound and your time will have come to a close. I won't cut you off, but I ask that you please respect our timeframes and try to bring your remarks or your thoughts to a conclusion shortly after. We allow four minutes for opening comments, and the members also have certain time constraints, which they are fully apprised of.

We will begin. I'm not sure who we have first.

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

May I interject just for a quick second? On a point of order, there was a request that two witnesses appear before the committee and I don't see them on the witness list. One was a Mr. Tim Rhyno, and there was a Ms. Joan Reid, who is a Department of Fisheries and Oceans employee. Would you be able to report to the committee on the status of that? Was the request made for them to appear? What was the response?

[The Chair, Conservative, Rodney Weston]

Mr. Byrne, the Ms. Reid you are referring to is a DFO official. She will be appearing tomorrow in Moncton. Mr. Rhyno is not on any list that was submitted to the clerk or myself or the analyst of people to ask to appear. On any list that was submitted by all members, Mr. Rhyno's name did not appear, so he was not asked to appear as an official guest of the committee.

All members were asked repeatedly to submit names, and Mr. Rhyno's name did not appear on any of those lists that were sent in.

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

There appears to be an error then, Mr. Chair, if that is the case. It's unfortunate. I will check my records. I'm pretty sure, pretty confident that Mr. Rhyno's name was indeed submitted. In actual fact, the list was submitted at the committee itself, so the committee records will actually indicate that Mr. Rhyno was to be invited as part of the testimony. It is part of the record, the transcript of the committee itself. If that is an issue—

[The Chair, Conservative, Rodney Weston]

We will check the record, but that is what the clerk has advised me at this point. I will ask the clerk to go back and check and find out.

Concerning your inquiry, that's the reason neither of those two people appear on today's list.

Today we will proceed with the meeting. We have guests with us here today. We will begin. I'm sure you are all aware that the committee is studying the snow crab industry in Atlantic Canada and Quebec, and we're looking at the various issues throughout the region that face the snow crab industry. Interest in this topic was brought forward by the members of our committee because of concerns that were raised by the sector.

As we open it up for opening comments, I'd ask again that you hear the signal at the four-minute mark.

We will proceed. Ms. Richardson, do you want to begin with your opening comments?

[Norma Richardson, President, Eastern Shore Fishermen's Protective Association]

Thank you very much.

Good morning, honourable members. We would like to discuss today the 2009–2010 snow crab sharing arrangements for crab fishing areas 24 and 23. My name is Norma Richardson, and I'm president of the Eastern Shore Fishermen's Protective Association. With me is Nellie Baker Stevens, our coordinator and snow crab representative on the snow crab advisory board, along with two other members for CFA 24.

As I said, we represent the Eastern Shore Fishermen's Protective Association, and we're located along the eastern shore of Nova Scotia. Our membership consists of 230 fishermen from Canso and Guysborough County to Halifax Harbour. This area's considered region 3, and we are accredited under provincial legislation with the Fisheries Organizations Support Act. We also have local fish plants and buyers as associate members.

We are here today to speak on behalf of over 300 fishermen, who include us, Halifax West Commercial Fishermen's Association, Guysborough County Inshore Fishermen's Association, and Richmond County Inshore Fishermen's Association. These fishermen come from communities from Sambro, west of Halifax, to Cape Breton. There are over 300 more fishermen affected in Cape Breton, so basically it is 600 fishermen from all of eastern Nova Scotia.

With reference to past negotiations, for years we, the quota holders, and the traditional fleet could not agree on how to share the quota. DFO finally came up with thresholds to determine how to divide the quota. For example, for this year's total allowable catch we, the quota holders, would have had 269 tonnes per core company, or approximately $45,000 per fisherman. The traditional fleet would have had 55 tonnes each, not the 115 tonnes that they got this year. The threshold model gave us equal shares per fleet, 50:50, when the quota was 3,000 tonnes. At anything over that, we got 90%.

At this time we were considered temporary entrants. DFO did not expect the quota to remain at levels to support both the quota holders' fleet and the traditional fleet. As you are aware, because landings and science had proved continuing strength and sustainability of the stock, a permanent arrangement bringing all of the licence holders under one regime was sought through the establishment of an independent panel to adjudicate the settlement. Everything in place today is a result of those recommendations.

One recommendation made by the panel the minister deferred to a later date; that was the recommendation for 50:50 sharing between these two groups. A commitment was made at that time by the minister that when science supported a 9,700-tonne total allowable catch, then the permanent 50:50 sharing would be triggered, removing the last obstacle to becoming fully integrated. The 50:50 sharing arrangement would see the traditional fleet having 50% of the TAC and the quota holders the other 50%. This would bring the traditional fleet to their 2004 levels, or even above that amount, as recommended by the independent panel.

In 2006 DFO made the quota holders permanent, with a licence made up of the amount of individual quota per quota holder needed to meet or exceed the traditional fleet licence. In 2006 that meant 20 quota holders in CFA 24; therefore, we only made up 16 licences, not the 31 licences that the panel showed in their appendix B fishery statistics table for the future.

Today, this is the second year that the fishermen have been denied their rightful share of the snow crab quota. For just one year, 2009, we're talking about at least $6 million that has been handed to the traditional fleet to be divided among 74 traditional licence holders. Those are $80,000 bonuses, in our mind. This was on top of the $228,178 that they were supposed to get, so in 2009 the approximate gross revenue was $310,852 each, with an allocation of 94 tonnes for the traditional licence holder in the singular form. This same amount was divided among 20 individual core fishermen and a snow crab company, meaning $15,543 gross each, which is 4.7 tonnes.

The DFO management plan states on page 42, table 4, that the quota holders' core companies would each get 6.234 tonnes when the quota reached 9,700 tonnes. With the change that the minister made to the sharing arrangements, we now have less of the quota--30% versus 32%. This clearly was not the intent of the panel.

The independent panel had recognized the discrepancy between the two fleets and acknowledged that 40 to 60 tonnes is indeed viable and sustainable. That would mean $140,000 to $200,000 for one licence holder.

We are here today to try to figure out what happened. We clearly see lack of consultation and communication on the part of DFO.

This was not an agenda item at our snow crab advisory meeting, but after that meeting everything went backwards for the 600 fishermen and their communities that were affected. We have asked repeatedly to meet with the Minister of Fisheries, to no avail. Like a thief in the night, Minister Shea stole millions from the pockets of small inshore fishermen and their communities in eastern Nova Scotia. She announced on Friday, June 12, 2009, at 4:33 p.m. the change to the sharing arrangement, with the fisheries set to begin the next Monday morning. Does this sound like someone who is interested in consultation? There was no consultation with the quota holders before this announcement. We were not aware that DFO had even considered discounting the independent panel's recommendation. After all, we had many DFO correspondents just stating the opposite.

We have seen very low and unstable lobster prices due to the economic downturn in the last two years. Our lobster fishermen could have used the extra money from the snow crab to get by, but it was unfairly taken from them. The minister with this decision and others has hurt small inshore fishermen and their communities in many ways, not just in the snow crab fishery. If we have more time later we would like to identify some of these, such as scallop and so on. Just last year most of our fishermen were not eligible for the package on lobster that was announced, since the minister would not take advice from industry on the criteria.

We recommend that the minister consult directly with the quota holders to mitigate any further injustice due to her unfair and arbitrary decision made in 2009 negatively affecting over 600 inshore fishermen of eastern Nova Scotia. We would like to see you, the standing committee, speak directly with Minister Shea and DFO personnel who give her advice. We cannot understand her rationale for such a decision. In the past number of years we had a very good working relationship with DFO, but in the past two years communication and consultation have been lacking. They seem to have reverted to telling us what they will do, not asking for input and taking all views into consideration.

Again we ask, what happened?

Thank you for your time.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Ms. Kennedy.

[Josephine Kennedy, Representative, Eastern Nova Scotia Crab Fishing Area 23, Multi-species Crab License Holders]

Good morning. My name is Josephine Kennedy, and I represent multi-species licence holders in eastern Cape Breton.

I'm also speaking on behalf today of fishermen from Gabarus to Cape North, part of the quota holders, which we are now known as.

First off the rail, I want the panel to know that I am a Liberal. I've run under the Liberal ticket, so I don't want any partisan politics to play a role in this, because several times I have contacted the minister's office and that's what I've been asked: “Are you Josephine Kennedy, the Liberal?” We have got that out of the way.

Norma filled in the gaps from 1999 up until 2005. In 2005 Geoff Regan had convened an independent panel that was to bring stability and sharing into the snow crab fishery in eastern Nova Scotia. We had a lot of disharmony. There were a lot of separate groups. We were all sharing different quotas, and the time was right for this to be put to bed, to bring harmony back into the fishery. So an independent panel consisting of three individuals heard testimony from everybody who was affected by the snow crab fishery.

The panel came back with nine recommendations. The minister accepted all nine recommendations, but with one recommendation he chose to put a timeframe in for when it would be implemented. That was the most contentious recommendation, the sharing formula. The panel had recommended a 50-50 split from day one. It was 50-50, and that is where the problems lie. The 50% meant the pre-existing fleet, prior to 2005, would receive 50% of the total allowable catch. That meant that if there were a 5,000 tonne allotment for area 23, the pre-existing fleet would take 2,500 tonnes and the remaining 2,500 tonnes would be divided up among the quota holders who came into place.

In 2005 there was a little unrest. As a matter of fact, I led some protests, because we had heard rumours that the licensed fleet, the pre-existing fleet, would never allow it to go over 9,700 tonnes, thereby ensuring that they would enjoy a 60%-40% split forever and a day. We protested and we protested, and we were given assurances that, yes, at 9,700 tonnes the split would happen. So from 2005 to 2008 the fishery continued on. There was harmony. People started talking to each other—at one point even brothers hadn't been talking to brothers. It had got that bad within the snow crab fishery.

In 2009 the minister announced that we were going to have the 9,700 tonnes. We thought finally our prayers had been answered. Joan Reid, the acting area manager at DFO in 2009, sent out a letter in February to all licence holders giving them a heads-up that science was looking at approving the 9,700 tonnes. Therefore, and in her words, which I will repeat,

It is expected that due to the strong recruitment of TAC, exceeding 9,700 metric tonnes may be approved in 2009 thus triggering the permanent 50%:50% sharing arrangement recommended by the Advisory Panel on Access and Allocation in 2005.

We thought that was great; it was happening and nothing was going to be said. On March 25, 2005, we attended our advisory meeting, which normally dealt with traps, season opening and closing, and soft shell. With that we went on and the sharing formula was put on that agenda and we just automatically assumed, because we weren't consulted on anything—we had no idea what was taking place behind the scenes—that this was just going to be reiterated that the 9,700 tonnes was going to be surpassed and the permanent sharing would kick in.

Mr. Gordon MacDonald stood up at that meeting and in his statement he confirmed what we all knew, that this permanent arrangement would take place—you have the documents I passed out for the file—that they were aware of it. Claire MacDonald also stipulated that an exploitation rate of 20% would trigger the permanent sharing of 9,700 tonnes, 50-50.

So when we went to pick up our conditions, as we did the numbers we said we were shortchanged. So this is where it started.

We've tried and tried and tried to speak to the minister. We've requested: 350 fishermen first, then the guys in Guysborough requested also. To this day, over a year later, we have not received a response from the minister other than she is sticking with her decision.

But she has made a decision based on erroneous information. What we found out was that Gus van Helvoort, who was the area manager during this whole independent panel process, and who was involved in writing the management plan that was to be our bible, put his own personal briefing note into it, which should never have happened.

We want to know where this went off the rails, why we lost the 50%-50%. It's not equal; it's 50%-50%. This side of the table would take 50% of the quota and this side would take the remaining. There are no discrepancies in what's in these DFO documents. How it went off the rails, what took place behind the scenes, what the minister said in the House of Commons.... The minister said at standing committee that she was advised by stakeholders, through consultations and that; but we're a case in point. We weren't consulted and we didn't know until after the fact and then we had to start the fight. We had Andy Mooney, who was sent in from the minister's office. We were dragged around. He called us in December 2009 and told us that we were getting our crab back and to be expecting a letter. The next we found out he was pulled off the case.

Then they sent David Wells and we travelled off to Antigonish. That was a waste of time. We got another letter stating we weren't getting our crab back and the minister was sticking by her position.

Then when everybody basically thought we were going to give up the ghost that's when we contacted the standing committee and I got hold of Mr. Byrne, and this is the end result.

What we want the panel to know today is that we are not giving up on this. This is a contract no matter which way. Whether it's verbal, written, there was an offer and there was an acceptance. We abided by it for four full seasons. The fifth season, when we were supposed to benefit, it went off the rails, and we want to know how it went off the rails. Who got to who? Who was consulted?

I've tried through freedom of information, and they sent me out a couple of e-mail correspondences between Gordon MacDonald, the president of Area 23 Snow Crab Fishermen's Association; Mike Eagles, who was the senior advisor on snow crab; and Gus. I have some of those e-mails here. When they got wind of what I was up to, the freedom of information stuff was cut off. But those e-mails confirm that there was no misrepresentation, as Gus Van Helvoort tried to tell us, and that DFO misinterpreted their own documents for four full seasons and in the fifth season they decided to dust it off and go through it. We want to know how it went off the rails, why it went off the rails, and in the end we want our 50%-50%.

[The Chair, Conservative, Rodney Weston]

Thank you, Ms. Kennedy.

Mr. MacDonald.

[Bernie MacDonald, President, Port Morien, False Bay Fishermen's Association]

Hi. I'm Bernie MacDonald and I'm the president of the Port Morien, False Bay Fishermen's Association and I'm also a member of the Area 23 Snow Crab Advisory Board.

First, I'd like to thank the committee for coming. It's a good opportunity for us to be able to talk. But I also want you to know that I'd much rather be out fishing today. I don't like being in here doing this in a short season, but it's very important to us.

My colleagues have pretty well taken care of the sharing arrangement. I want to talk about DFO's much talked about and touted co-management of resources.

There is no co-management as long as the minister can change a plan that's been in effect for four years without consulting the full fleet; as long as a bureaucrat in Halifax can write a briefing note that the advisory board is not allowed to see--no matter how much we ask for it; and as long as an advisory board for a fishery requests the minister to come down and meet with them and for a year she never even dignified it with a response. She never even said no; she just never came. The same minister got on the media two or three times saying everybody was happy with the sharing formula except a small minority of the fleet, 600 core fishermen. I don't know how anybody can call that a small minority.

So until there are some changes in DFO and the way they work with fishermen, the way they communicate, this is what we're going to have, and it's just getting worse.

That's pretty well everything I've got to say.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. MacDonald.

Mr. Byrne.

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

Thank you very much, Mr. Chair.

I want to follow up, Josephine, something you referred to, and you referred to it as well, Norma.

You understood that there was an actual management plan, a “contract”, as you referred to it, from 2005 to 2009. Is that correct? I specifically want to zero in on Ms. Joan Reid's letter, dated February 18, 2009. It was addressed to all snow crab licence holders in crab fishing area 23. It reads much like a newsletter. It talks about different officials with the Department of Fisheries and Oceans being reassigned to different tasks. It talks about Tim Rhyno's licence, for example, and the minister's decision there. But it also specifically states—and you quoted this, Ms. Kennedy—that “It is expected that due to the strong recruitment, a TAC exceeding 9,700 tonnes may be approved in 2009”. Just as an aside, I understand that 9,700 tonnes was a trigger point under the management plan to go to a revised share structure. The letter continued: “thus triggering the permanent 50:50% sharing arrangement recommended by the Advisory Panel on Access and Allocation in 2005”.

I really think this is relevant, because the senior area director for eastern Nova Scotia was informing the industry that a change was afoot, and that for the last four years when the management plan was put in place—not in 2009 but in 2005—there was a broad and general understanding, if not a specific one, as to exactly what that management plan was. It was a change--not the status quo, but a change to a 50-50 sharing split.

Ms. Kennedy, would you be able to explain whether there was an interpretation or understanding on anyone's part that the share structures would basically stay the same, or was Joan Reid seriously wrong in her judgment? Or was she correct in her judgment that for the last four years a management plan was in place, understood by all to be in place, and that a change would occur in 2009? From the date of this letter, February 18, 2009, when was the actual management plan announced for that particular year, indicating a change, if indeed it did occur?

[Josephine Kennedy]

From what time?

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

From February 18, 2009, to the date the actual management plan was announced by the minister, how long a period was that exactly?

[Josephine Kennedy]

Well, on February 18, 2009, this letter came out from Joan Reid informing everybody with a heads-up, and that triggering number was going to come into effect. On March 25 we had our advisory meeting and we spoke, and the last statement was concerning this 50-50 split. We did not know. We received a letter and it just had a TAC written on it for the different areas. It just said that licences were to be divided equally. So we automatically assumed, because the letter was so obscure—and I shouldn't even call it a letter, because it was just a little thing they sent out—and there was no mention of 50-50 and no mention of 60-40, which was throughout all the documents.... We had lived with the 60-40 split until 2009 and it was supposed to go to a 50-50 split.

So in reality, to this day we really haven't been notified that the document has been shredded. In trying to get that information and explanation, this has been the end result.

As far as Joan Reid is concerned, I can honestly say that she is the only lady—and excuse the language I'm going to use—who has the balls in DFO. She stood up. She knew what the management plan meant and what we were supposed to get and she notified everybody. But apparently, behind the scenes, there had been discussions to change it without telling us.

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

If I could interrupt you there just to ask, if you were to categorize the current management plan, is it basically the status quo? Is the current management plan as amended by the minister or as currently in place by the minister basically the same as what was there before? The numbers are different, but is it the same, or is there an amendment here? How do you rationalize this?

[Josephine Kennedy]

The body of it is basically the same. The only thing—

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

So is there no change? That is what I'm getting to.

[Josephine Kennedy]

The only thing that has changed is what they've done to the sharing, which is the most important issue in this whole document.

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

Forgive me, though, for interrupting, Ms. Kennedy, but what I want to get to is the point that the newsletter from Ms. Reid indicated that a change was about to take place, that there would be a difference. She clearly outlined that a change was going to occur in the sharing structures as per the agreed management plan.

Bernie, you might be able to jump in here, but it seems to me that if there's the status quo, there's a contradiction here.

[Bernie MacDonald]

There's no status quo. It went from our part of the fleet. We were getting 40% of the overall TAC, the total allowable catch. It would have changed to where we would share 50%, and in reality it went down to 38%. So we went from 50% to 38%.

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

For practical purposes, that's status quo, in other words.

[Bernie MacDonald]

Yes, except we lost.

When we found out about this change our season had already started. We'd been fishing a month. We'd started fishing a month earlier under an interim quota. So when I got the fax stating we weren't getting our 50%, the boats were in the water. Just then the fax came and said the TAC went up to 10,800 tonnes, and we weren't getting what we thought we were going to get.

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

I see. Okay.

I think one of the principles we're dealing with here is stability. We're always recognizing the importance of stability. Could I ask your opinion? If someone has a plan in place for you, a management plan, a contract, for four consecutive years, and then at the last minute, before the season starts, as soon as the TAC goes over 9,700 tonnes they change it without notice, is that stability? Does that add stability to your industry?

[Nellie Baker Stevens, Coordinator, Eastern Shore Fishermen's Protective Association]

I can answer that for you.

I was totally flabbergasted when at 4:33 on a Friday afternoon—I work from home, and what saves the day for me is I get it late when DFO comes out with announcements—I read this, and it said “equal”. That's okay, 50-50. The quota went up over the 9,700, so it's 50-50. As I was telling Peter MacKay, I did the lotto dance. I thought, finally we got it. I was so excited. I even sent an e-mail to the snow crab fishermen saying we got it.

Then I kept reading it, and I said to Norma.... Norma said she didn't think that's what it meant. I read it again, because it wasn't very straightforward, not really. And I said I needed to talk to somebody. I couldn't wait till Monday morning.

So I started making phone calls to DFO. Nobody's there. Nobody's there. I had to look up Mike Eagles's home number and torture that poor man at home on a Friday afternoon and ask Mike to please explain it to me because I didn't understand.

He said there was new information, and this was the first I understood anything was even going to be changed. I asked what he meant, because this plan's been in place for four years. The new information was appendix B. It's supposed to be equal licences.

I was in total shock. I had to send out e-mails: I was wrong. It was a terrible evening.

Another representative from Halifax West called me and asked if I understood what that meant. I said I didn't know. The two of us read it together because this is the way it was worded: it was supposed to say 50-50 shares, but it said “equal”. So does equal mean 50-50? We said we didn't think this meant 50-50. It said equal licences, which is a totally different interpretation.

So this is how we found out. It was on a Friday afternoon, and they started fishing Monday. I'm quite upset with that, because if you're going to take a plan, and it's been in place for four years, and stability was wonderful.... We were sitting down with the traditional, permanent fleet, discussing science, discussing the best ways to look after the resources, discussing how many traps, the season. It was a very good working relationship because we were in it together. We were integrated.