Fisheries Committee on Nov. 15th, 2011

[Bill Taylor]

They're not ahead of us. There are big problems in Norway. There are big problems in southwest Scotland. Scotland has actually taken the action of designating their most valuable, important wild salmon areas as no-aquaculture zones, so they have aquaculture-free zones in Scotland.

There's huge concern in Norway about the impacts of aquaculture on wild salmon runs and threatening a very lucrative recreational fishing industry or sport fishing industry in Norway. Sea lice is a big, big problem. Escapes are a big problem.

Our best experience, or what I know best from a regulatory point of view, is what goes on in eastern Canada compared with what goes on in Maine. In Maine, because the few wild Atlantic salmon left in the State of Maine have been placed on the endangered species list, there are much stricter and more stringent regulatory controls that the industry has to live up to in order to do business--in Cobscook Bay, in Maine, which is not very far across.... I mean, you can see across from the St. Andrews wharf to Maine. The very same players in the industry are working under a much more rigorous regulatory framework in Maine than they are only a few miles away in the Bay of Fundy.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

The aquaculture industry in Newfoundland seems to be growing quite fast. I think they're raising cod and other species of fish. Are you alluding that that could be to the detriment of Newfoundland as well as to the Atlantic? It's one of the few places where there are still Atlantic salmon going up the rivers.

[Bill Taylor]

That's true. I want to be clear. The research we have, the information and advice we have, and our experience do not raise concerns. I'm not raising concerns today about halibut aquaculture or cod aquaculture. It's Atlantic salmon aquaculture. Again, the disease and sea lice are bad enough, but it's the escapes and the huge number of escapes. The genetic introgressions and genetic impacts are permanent. You could take every wild Atlantic salmon river. The salmon run, the salmon stock in those rivers, has evolved over thousands and thousands of years. People living in Cape Breton can tell a Margaree just by looking at it. People have to spend a lot of time in the salmon business. Salmon anglers can tell a Margaree fish from a West River Sheet Harbour fish by looking at it.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That's good. I don't have much time and I have another question.

My understanding is that most of the Atlantic salmon go to the Greenland Sea when they're smaller, and they eat a lot of shrimp in that area. Is that kind of their holdout area?

[Bill Taylor]

The large salmon, salmon that spend more than two winters at sea--multi-sea winter salmon we call them--the large spawners go to Greenland. The grilse, the salmon that spend just one winter at sea, don't have enough time to get to Greenland and back. They go out to Labrador Sea off Newfoundland. The Bay of Fundy fish stick mostly in the Bay of Fundy or the Gulf of Maine, but the large salmon do go to Greenland.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Is there anything happening in that area that could cause a problem with the fish? It was alluded to here that the seals might be causing the problem. Is it the shrimp? How much shrimp is in that area? Or could it even be the water temperatures? Back home we're having a problem with mackerel, and the fishermen are saying just a couple of degrees difference in water temperature is really mixing up our mackerel population around Cape Breton. Is there more here than the bad aquaculture salmon causing the problems? Is it anything that's happening out in the Greenland Sea? Is somebody else catching them in nets out there? Is it water temperature?

[Bill Taylor]

Those are all good questions.

There was a huge commercial fishery at Greenland. The Atlantic Salmon Federation and a partner of ours from Iceland, North Atlantic Salmon Fund, actually worked with the Greenland Home Rule Government and the Greenland fishermen to suspend. We have an agreement under which they don't fish commercially, and we're investing in alternative employment opportunities for those fishermen. They had a modest subsistence fishery, which is actually growing, because they see more fish and so on.

There are many causes for the Atlantic salmon's decline; aquaculture is one of them.

There are plenty of areas in eastern Canada where Atlantic salmon runs in the last decade have been on the rise. All those areas are where there are no aquaculture operations. There is continued decline in the Bay of Fundy and southern Newfoundland. The whole province of Newfoundland had a banner year this year except for Bay d'Espoir, Conne River, in southern Newfoundland, which is where the aquaculture operation is.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So Scotland is taking the lead on this by not having salmon aquaculture where they want....

[Bill Taylor]

They have an aquaculture-free zone.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Taylor and Mr. Carr.

On behalf of the committee, I want to thank you very much for coming and appearing before our committee today and taking the time answer our questions. The committee very much appreciates it. Thank you very much.

We'll take a short break while we change our witnesses, and we'll resume very quickly.

[The Chair, Conservative, Rodney Weston]

We will bring the meeting back to order.

I'd like to thank our second round of guests for joining us today. I appreciate your taking the time from your busy schedules to join the committee to share your thoughts on closed containment aquaculture. We look forward to the discussion.

As you probably heard in the first presentation, there are time constraints we try to keep members to so that we can get as many questions and answers in as we possibly can throughout. I'm sure the clerk has advised you that we generally allow around 10 minutes for presentations.

I assume, Mrs. Halse, that you will start. The floor is yours any time you want to proceed.

[Nell Halse, Vice-President, Communications, Cooke Aquaculture Inc.]

Good afternoon. Thank you very much for the opportunity to appear before you today.

My name is Nell Halse. I'm a spokesperson for Cooke Aquaculture, which is a family owned salmon farming company in Atlantic Canada.

I work closely with the CEO, Glenn Cooke, and I am very pleased to be here today to represent him, his family, and the 2,500 employees we have who now make a living from aquaculture in Atlantic Canada, in Maine, and now in southern Chile and southern Spain.

I wanted to also mention that my colleague, Alan Craig, who is the vice-president of sales for the company, was able to accompany me here today. He is not going to make opening remarks, but if there are questions that are specifically relevant to the marketplace, he could perhaps help out during the discussion period.

Over the past 25 years, Glenn Cooke, his father, and his brother have built a world-class Canadian company that now enjoys a prominent place as a leader in Canada and that also has taken its place as one of the top five salmon farming companies in the world. Annual sales of half a billion dollars are projected for this year.

We have been named one of Canada's 50 best managed companies, and just last spring, Glenn Cooke was awarded an honorary doctorate of science by the University of New Brunswick. Both Glenn and the company have been presented with numerous business awards in both Canada and the U.S.

Through our sales and marketing team we have built an excellent relationship with both retail and food service customers in Canada and the U.S. So if you were to go and buy fresh Atlantic salmon in your local grocery store, whether it's Loblaws, Sobeys, or Metro, or in a small fish shop, such as the one in the Halifax market, you will probably be buying one of our fresh Atlantic salmon that was swimming on the east coast just a few days earlier.

Our success and our growth has not come at the expense of our communities and our neighbours. We understand the need to earn and also to maintain our social licence to farm. The Cooke family and all of our employees, in fact, live in the communities where we operate. We have deep roots that go back many generations, so we're building on a valuable marine heritage. We rely on the long-term health of the ecosystem. Together with the fishery and conservation communities, we see ourselves as partners in a dynamic and vibrant working waterfront. We have co-existed for the past 25 years.

It's very good news for all of us that the lobster sector continues to see record landings. It's also good news that we are seeing the returns of wild Atlantic salmon improve in many areas as well.

In fact, I was interested in one of the comments in the earlier session about me being a member of the Atlantic Salmon Federation. We, as a company, collaborate with ASF on a number of critical salmon conservation projects, specifically on the south coast of New Brunswick. The company also owns a fishing lodge in Miramichi. We are avid anglers and also lifelong members of the Miramichi Salmon Club. So there are many common connections here.

Our commitment is to a healthy and sustainable seafood sector in Atlantic Canada--not just an aquaculture sector--a sector that respects the rich marine heritage that sustains us all.

Our motto is “refusing to go with the flow”. It's a clear illustration of our strategy as a company. We've built our own road to success, with year over year strong financial performances, in spite of many challenges, the kinds of challenges all farmers have to face. They include hurricanes, floods, abnormally warm water temperatures in the summer, extremely cold temperatures and super chill in the winter, fluctuations in currency and in the marketplace, and losses to disease and parasites.

In spite of these challenges, the Cooke family has successfully recruited a professional management team and in-house scientists to help build a fully integrated company that now manages our operations from egg to plate. That means that we have our own brood stock program, our own hatcheries, our own farms, and our own processing plants. We design, manufacture, and service our own equipment. We produce our own feed. We make our own packaging. We operate our own trucking division. We have our own sales and marketing division as well.

I think this background is really important as we move to your topic today and to the question of whether or not we should or could move the entire Canadian salmon farming sector out of the ocean onto land, into closed containment, into tank farms.

I'm glad you asked us to participate in this review, because we are experts in closed containment and we have a great deal of experience and expertise to bring to this discussion. Too often the debate has been about growing fish on paper and not about growing salmon in the water as a real-life business. So our answer to that question today is no.

Our salmon spend the first half of their lives in closed systems. Our company operates about a dozen hatcheries in Atlantic Canada and Maine. We are just about to open a 38,000-square-foot state-of-the art new hatchery on the south coast of Newfoundland, in St. Alban's. This will have the capacity to grow three million smolts a year and it will reuse 98% of its water.

We welcome hundreds of visitors to our freshwater headquarters in Oak Bay, New Brunswick, every year, and we would certainly welcome this committee if you could find time to come and visit and see a modern, progressive, commercial hatchery in person.

Our broodstock, or carefully selected parent fish, spend their entire life in a disease-free, closed, recirculation contained system. We know how much it costs to grow these fish. The cost is prohibitive and could not be sustained for all phases of our production. We only do this on a small scale to protect these broodstock for future generations. We know the fish health challenges. We know which stocking densities are right for maximum growth and optimal health.

Our production fish are spawned from these broodstock in our hatcheries. The eggs are incubated and hatched there and then they spend the next year or so in fresh water, just as salmon do in the wild, until they become smolts and, just as in the wild, they're ready to move to their natural saltwater habitat for another 18 to 24 months until they're ready for harvest.

We also have a DNA traceability program that's being developed by our freshwater team that tracks the fish right from egg to plate.

One of the important points we'd like to make is that the capital costs that would be required to develop land-based facilities to support Cooke Aquaculture, just our company's production capacity in Atlantic Canada and Maine, is close to $1 billion. This does not include the cost of finding and purchasing the enormous amount of land that would be required, nor does it consider the need for a consistent and abundant water supply. No coastal land is available from Nova Scotia to the Maine border that would accommodate the equivalent of 8,000-plus football field-sized plots that would be required for grow-out facilities.

Even if land were available, however, the increased pumping and heating and cooling costs for water would be cost prohibitive and would also result in a very environmentally unfriendly carbon footprint. It's often said that the industry is worried about costs, but there are so many other issues.

So rather than move our fish from the sea to the land, we believe we have demonstrated with certainty that we can grow Atlantic salmon in a natural environment with minimal impact on wild stocks or on habitat. We have many tools for minimizing the environmental impacts of our ocean farms. These include a government-audited ocean floor sampling program; a performance-based approach to the issuing of government approvals to operate, which we have to have every year before we stock fish; sophisticated feeding management regimes to prevent waste; better science-based diets and feed formulations, just to make sure we get maximum feed conversion; and careful siting of farms in areas of good tidal flow.

Also, for more than 10 years we've been exploring an ecosystem-based approach to farming called IMTA, or integrated multi-trophic aquaculture, and this is because salmon are a fed species. They generate valuable nutrients that can then be used to grow other species, such as mussels and seaweeds. This experimental work that we've had with Dr. Thierry Chopin of the University of New Brunswick and Dr. Shawn Robinson of DFO in St. Andrews has been under way for almost 10 years now. But it has moved from a biological experiment to a commercial scale with a recent partnership we have with Loblaws and their WiseSource salmon program.

Our position is that the provincial, state, and federal regulatory requirements that are already enforced on the east coast of Canada and the United States have established stringent environmental and fish health standards. Our production systems either meet or exceed these standards.

In addition, our company has been certified to the internationally accredited Seafood Trust eco-label. This eco-label, which focuses on continuous improvement, has required us to set standard operating procedures for our hatcheries, our farms, and our plants; to develop an internal auditing system; to submit regularly to external audits; and then to continually set new goals each year.

Atlantic salmon that are raised on our east coast farms are healthy native stocks that swim in their natural environment. They are contained on the farm by a system of nets, cages, and mooring systems that are specifically designed by our in-house team of experts to meet the challenging, high-energy environments of the Bay of Fundy, the Atlantic Ocean, and the Gulf of Maine. Our company's track record on containment has been exemplary in both Canada and the United States.

We know that you've already heard, and you've heard again today, a list of concerns about environmental impact, salmon escapes, and concerns over fish health. I can tell you that we certainly share those concerns. That's why we've continually invested in science partnerships and innovative technologies together with local universities and groups like Genome Atlantic and the Atlantic Veterinary College. Because of that, there is now an extensive body of science in the areas of fish health, fish biology, oceanography, secure cage and net mooring systems, and environmental impacts of salmon farming. The science is all there now because of the aquaculture industry.

So we're not working in the dark. We're no longer a biological experiment. We're a mature, sophisticated, science-driven industry with a huge potential for Canada's coastal and rural communities.

I would like to close my comments by saying that there have been enough studies conducted, enough firestorms generated by the well-financed anti-salmon-farming lobby, into diseases that don't exist, into environmental devastation that did not occur, and into doom and gloom scenarios about the displacement of a fishery that did not happen.

You are sitting here with a healthy entrepreneurial Canadian success story that needs to be encouraged and not stymied by impractical and unnecessary concepts that are not meant to succeed but are deliberately designed to orchestrate the demise of our sector. Our industry represents one of too few bright spots to grow the Canadian economy, a fact that should be regarded as especially important in our current climate, fraught with economic uncertainty.

We are asking our government to consider the facts, to accept the science from its own departments and from colleagues around the world, and to develop and then implement a very clear strategy for the healthy growth of Canada's aquaculture sector. We need federal legislation that is written and designed for aquaculture--legislation to regulate it properly but also to enable it to grow.

If we get that support from the federal government, we will stand behind you. We're a company that's going to invest, continues to invest, and continues to grow, and we will have to invest overseas--but we want to invest in our own backyard. With the right business climate, we will continue to build healthy companies and healthy communities while maintaining a healthy environment that's good for Canada and good for Canadians.

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you.

Mr. Drost, do you have some opening comments?

[J. Terry Drost, Marketing, Four Links Marketing, Gray Aqua Group Ltd.]

Thank you, Mr. Chairman and members, for your invitation to speak to the standing committee regarding closed containment salmon aquaculture. I applaud you for looking into ways to make the Canadian salmon farming industry more sustainable and successful.

My name is Terry Drost and I am speaking to you on behalf of Gray Aqua Farms Ltd., of Northampton, New Brunswick. I am a native of New Brunswick, and I began working in the salmon aquaculture industry after graduation from the University of Guelph in 1987. I have a bachelor's degree in animal science, specializing in livestock production, and until March 1987 I knew very little about salmon farming. However, I grew up in the Saint John River Valley, never more than a few hundred yards from the river. And to this day, I still look out on the river from my house.

Atlantic salmon, the Saint John River strain, in my estimation is the king of fish. The Saint John River is one of the greatest salmon rivers of North America. However, during my lifetime I have watched enormous changes in the salmon population in the Saint John River. Several hydroelectric dams have been built during the last century. The commercial salmon fishery on the Saint John River was closed. Sport fishing was slowly reduced to no fishing, and today there is no longer even a native food fishery on the Saint John River.

DFO, however, in partnership with NB Power, have invested significantly in salmon enhancement, and fortunately have maintained a modest population of the Saint John River strain of Atlantic salmon.

The first feed that I manufactured in 1987 was for a DFO contract for the Mactaquac Fish Culture Station. Preserving the Saint John River strain of Atlantic salmon has been a preoccupation of both the enhancement community and the aquaculture industry during my entire 25-year career.

In those early days of the salmon farming industry in New Brunswick, DFO was the first source of our smolts. The industry worked together with the Atlantic Salmon Federation to protect and preserve the wild stocks, and also to supply genetically compatible stocks to the entire salmon farming industry in New Brunswick. I believe that salmon farming and wild salmon can not only coexist, but can benefit each other significantly.

The salmon enhancement efforts of DFO have helped develop closed containment technology that is in use around the world for salmon restoration and also for salmon farming. We have learned, and we continue to learn, more about the fish: how to feed them and also how to maintain the most natural conditions for husbandry.

Gray Aqua Farms Ltd. operates one of the largest, most technologically advanced closed containment salmon hatcheries in the world, right on the banks of the Saint John River. With 10,000 cubic metres of tank volume and 12,000 gallons per minute of water flow, Gray Aqua Farms can produce over five million smolts annually. This is approximately 500 tonnes of salmon production.

These smolts will be transferred to salt water and will be grown in natural water conditions in cages in the ocean for the next 12 to 18 months of their life cycle. They will produce 10-pound salmon and have a total production of over 20,000 metric tonnes of market-size salmon. This is a forty-fold increase in biomass.

Could the entire production be done in closed containment? Yes, but at a great cost environmentally, economically, and socially.

Gray Aqua Farms' operation in Northampton, New Brunswick, is on 10 acres of land, with several buildings holding various sizes of tanks and 28 large outside tanks. It is a flow-through operation with water treatment on both incoming and outgoing water. Annual power costs for their hatchery are $350,000. Oxygen and other treatment costs are $250,000 per year. Maintenance for the system is over $400,000.

The total operating cost of this hatchery, excluding feed and labour, is over $1 million.

Members of the committee, if we were to take those five million smolts to grow out in a closed containment environment over another year and a half, a quick extrapolation shows a requirement for over 400 acres of land, 480,000 gallons of water, either flow-through or through recirculation technology, and at least $40 million in operating costs, not including feed and labour.

Finally, imagine the cost for the Canadian industry as a whole, with a production of over 120,000 metric tonnes, and ask yourselves where we could find the land with the ability to provide the water and the power and manage the waste to support closed containment systems of this magnitude, and then ask yourselves, how can any Canadian company survive economically with these additional costs?

Certainly it would be impossible to compete with producers from other countries. I believe the government should be asking itself, how can we support our current Canadian industry to make it more sustainable, allow it to grow and be more competitive in the marketplace, and at the same time how can we support those coastal communities that depend on the salmon industry for their economic viability?

Canada, with one of the longest coastlines in the world and a long history of seafood production, is in an ideal position to be a global power in aquaculture production.

I will leave you with one thought by the first ocean conservationist-environmentalist. I believe Jacques Cousteau was ahead of his time when he said, “We must plant the sea and herd its animals using the sea as farmers instead of hunters. That is what civilization is all about - farming replacing hunting.”

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Drost.

Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair.

I want to welcome our guests, especially Terry, who is from my riding. The same river you overlook overlooks the top of my house, too, as I recall. When we built our house, they closed the same section of that river to salmon fishing that same year, unfortunately, in the Grand Pass just below the Magaguadavic Dam.

I've had the opportunity to be at your facility in Northampton on a number of occasions, and we've had a chance to talk on a number of occasions as well. I have so many questions and so little time.

I'd like to start with some of the challenges we have of not having both witnesses here in the same group. We don't have a chance to have a dialogue back and forth, so we miss an opportunity to do that. But there was a challenge on escapes. Could you just comment, from your standpoint, on the number of escapes that you've had documented, on the accuracy of your escapes?

Can you also talk to the genetic impact on the wild species? I'd just like to understand that from the aquaculture side. Are these fish actually able to mate in the wild environment? Our last witness talked about a 0.02% survival rate and then about the ability of these fish to mate in the environment. Can you talk about those two questions?

[Nell Halse]

I'll begin, just because I represent a farming company that has been in southern New Brunswick for 25 years.

We've had a very good record of not having escapes. As Bill said, there were some incidents last year, but they were not with our company, and they were smolts, so I can't really speak to the fate of those fish.

But we did have a sabotage event on our farms in 2005. That's a very long time ago. At that time we got permits from DFO. We would not be allowed to go out fishing for the escaped fish without permits, so we went to a lot of trouble to get all of that in place. But the reality is that most of the fish disappear very quickly and many are eaten by seals.

When we quote numbers and statistics, you have to be careful that you give the whole story. So yes, there may have been more farmed salmon that were found in a river, but we're talking ten farmed salmon. So the percentage is that there are more of the wild salmon. The returns, fortunately, are very low. But the numbers of aquaculture fish that have been found in the rivers in that area have been very small. There have been a few incidents, but they're very infrequent. In the early days that would happen much more often.

A lot of that is just because we've learned how to build the equipment to suit the environment. In terms of Cooke Aquaculture Inc., we have not had an escape. However, we are required under the new regulatory requirements to report an escape. If we think we may have lost 100 fish, we have to report that.

We have had incidents in the last year where we twice had to report that our divers found a hole in the net. We felt we hadn't lost fish, but we reported it anyway. Our company voluntarily reported even before the reporting requirement was there. In fact, in regard to this incident with the sabotage that I referred to earlier, we did contact the ASF people in Maine, everyone, immediately to let them know.

Our experience is that our fish are staying in the cages. That's where we need them to be and we're doing everything we can to keep them there. Unfortunately, there have been some incidents, but they have not been with our company.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

But assuming they do escape, what are the genetic implications?

[Nell Halse]

First of all, they're the same fish. We're farming native stocks, and we are required to do that. In other parts of the world, they're allowed to farm species that are not native to the area.

They are cultivated for farming, so they're several generations away from what was in the wild. It's a bit of a complex debate. You can argue that it's a good thing that they're not fit for survival, so they won't survive, but I think most people are aware that there are many, many more reasons for the decline of wild salmon than aquaculture. It's survival at sea.

NASCO, the North Atlantic Salmon Conservation Organization, in which I have participated for many years, is clear that survival at sea is the major cause of the decline of wild salmon worldwide, and there are many other instances in our area.

Terry, you may have something you want to add.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Could you tell us if escaped farmed fish can mate with wild salmon?

[J. Terry Drost]

Yes, they can, but I believe it's highly unlikely, almost impossible, that this would happen. I don't believe they would make it up to the spawning pools to mate.

I agree with Nell. It's a requirement. Introductions and transfers are administered through DFO. We are tightly controlled on the strain of fish that we're allowed to farm in our cages. It is very much the same fish. One of my first experiences with salmon farming was with a geneticist from the Atlantic Salmon Federation while I was at the University of Guelph. He did some population genetics. We will try to have genetic improvement in our stocks, but it's going to be a very slow process. Even though we are maybe seven generations removed from wild fish, I don't believe there has been a significant change in genetics.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

You talked about the stocking densities. I know Gray Aqua has brood stock in one of the tanks I saw recently when I was there. Can you comment on the densities that it would take at a commercial level as opposed to the densities in your open net?

My second question is, given the numbers that you just talked about, a billion dollars and $40 million in annual operating costs, will the market command the price premium that would be dictated by those additional costs?

[J. Terry Drost]

The answer to the first question is that in a closed containment system you would be forced to increase your densities over what we would like to maintain in the cages, or over what we do maintain, which is between 15 kilos and 20 kilos per cubic metre. That's at maximum, just before going to market. The entire site would never get to that level, whereas in a closed containment system, I can see you being in the neighbourhood of 50 plus, just to try to make the economics work. That brings with it a whole host of other challenges. How do you maintain water quality? The amount of water that you would have to pump through those fish represents some significant challenges. It's not that we haven't tried closed containment in salmon aquaculture.

One of the earliest closed containment facilities in the world was a company down in Nova Scotia in the early 1970s called Sea Pools. They tried to grow trout and failed. There have been others tried in Cape Breton and the Gaspé peninsula. They've been tried in a variety of areas, all of them ending up with severe challenges as the biomass grew. The first year, when you're on your way to 1.4 kilos, that's the easy part. Going the next two and a half to three kilos, that's where the real challenge starts, in a closed containment system.

So it will be interesting to see how the Atlantic Salmon Federation makes out with their research down at the Freshwater Institute. I know that institute well; they're very good. But we will need to watch that closely.

On the other part of your question, which is marketability, I think there are some real sustainability issues, carbon footprint issues, with closed containment that are not going to play well in the market.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Have you done the numbers on the price premium?

[Nell Halse]

Alan is our vice-president of marketing and sales. I thought maybe he could answer that one.