Evidence of meeting #17 for Fisheries and Oceans in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was project.
A recording is available from Parliament.
4:50 p.m.
President, JLH Consulting Inc.
With recirculation systems, because we're using the water over and over, there are two compounds--geosmin and MIB--which give the fish an off flavour, like a muddy taste, so we have to purge the fish in fresh water for at least five to seven days before we sell them.
For example, we're bringing 250 gallons of water into the 1,000-tonne farm. That would go to the purge system first and then on to the rest of the fish. That takes the geosmin and MIB out of the fish.
4:50 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Thank you for that. I was unaware of that being necessary, so I appreciate it.
Did you develop the technology for the farm at Agassiz and will you also be doing the one that's going to be built in Pitt Meadows?
4:50 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
For the one at Pitt Meadows--which of course is in my riding, so I have some interest in that--is that going to be on the Aquilinis' current agricultural property, as far as you know?
4:50 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Okay. Maybe the costing is in your presentation here. I'm not sure if it was included in your depreciation line, but how does the return on investment look if you don't own the property and you have to buy it somewhere? For 1,000 tonnes, what's the footprint size of the one in Pitt Meadows?
4:50 p.m.
President, JLH Consulting Inc.
It is 75,000 square feet, so it's roughly two acres.
4:50 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Have you run the numbers or are you simply on the technology side in terms of costing in the purchase of land in order to build a fish farm?
4:50 p.m.
President, JLH Consulting Inc.
No, we haven't done the purchasing of the land, because it's so variable. What we have done with the return on investment is your cost of borrowing the full amount of money, your capital to operate, and your selling price at $4 a pound in the round, so then we have to take 10% off that for head-on, gutted.
4:50 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Right.
Now, we may need to ask somebody else this, but if you have it on land in a place like Pitt Polder in Pitt Meadows, for example, the land use authority would then be the City of Pitt Meadows and the actual operation would be regulated, I assume, by the Department of Fisheries and Oceans. But would the land use decisions then be made by the city? Also, does this trigger any kind of environmental assessment at all, like it would if it were a floating one, for example?
4:55 p.m.
President, JLH Consulting Inc.
Yes, the Department of Fisheries and Oceans is the lead agency. The land is already designated as agricultural, so aquaculture comes under that.
But because we're extracting and discharging water, we have to go through the Ministry of Environment and also the Ministry of Agriculture and the Ministry of Fisheries. They still have to do their assessment.
To get the permit, we have to do a management plan and it has to be given to the various government agencies, so it's not a rubber stamp.
4:55 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Does that trigger an environmental assessment under the federal environmental assessment? No...?
4:55 p.m.
President, JLH Consulting Inc.
No, it hasn't in the past. Now, I'm not sure if that's going to change with DFO being the lead agency, but it hasn't in the past.
4:55 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Okay.
What are the densities in these tanks with coho salmon as compared to Atlantic salmon?
4:55 p.m.
President, JLH Consulting Inc.
The final density is 65 kilos per cubic metre. With Atlantic salmon, it's roughly the same.
4:55 p.m.
Conservative
4:55 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
We've had other witnesses say they could push it up maybe 50% above that. Have you had experience with greater than 65 kilos?
4:55 p.m.
President, JLH Consulting Inc.
Yes. We design it for 65 kilos, but we have a 20% buffer, so if you add another 13 kilos you're looking at 78 kilos to 80 kilos.
But the problem with that is that as soon as you start pushing things like that.... The fish are disease free, but you also have to give them an environment that is low in stress. Disease-free means that the pathogens are probably still there, but as long as the fish are there in low numbers and as long as you keep the densities and stress low, the fish will not express that disease.
We design it so that at 65 kilos the fish are not stressed and everybody is happy, but yes, you can go up to 80 kilos.
4:55 p.m.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Maybe we'll see you in Pitt Meadows some time. Thank you very much.
4:55 p.m.
Conservative
The Chair Conservative Rodney Weston
Thank you, Mr. Kamp.
Mr. Toone and Mr. Cleary, I believe you're going to share your time.
4:55 p.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
Thank you, Mr. Holder. Your presentation was really very interesting.
I am especially interested in the opportunities for small and medium-sized businesses. They are growing rapidly. But, just like my colleague Mr. Kamp was wondering about production density, I am concerned about the barriers that might be encountered by small and medium-sized businesses trying to get into the market. I believe that it is interesting to consider this as a generator of jobs. Your statistics on employment are very interesting. The market seems to be nicely open for jobs. It is also clear that it could result in benefits for our coastal communities, since it would relieve the pressure on the wild stocks in the world's oceans.
But I still think that there are obstacles in creating new companies, especially small ones, as opposed to medium-sized ones. You briefly mentioned access to capital. To what extent are government and financial institutions, like banks, for example, receptive to this industry? To what extent do those businesses need federal government support? And finally, on the subject of small businesses, what kind of specific support do they need to start up in the aquaculture industry?
4:55 p.m.
President, JLH Consulting Inc.
That's a very good question and a very good point.
On the 1,000 tonnes, that's what the Aquilinis want to do, because they're big players. They have the dollars. They don't have to go to the banks.
I just designed a 100-tonne farm. The price of capital for the equipment came in at $620,000. The operating cost is slightly more than that $1.97, but getting the banks to lend private individuals money is next to impossible. Also, the process of applying for grants is onerous and the success rate is not that high.
For us to expand this business to the mom-and-pop shops--that's a name I give it--they need provincial or federal help--loan guarantees or whatever--because the banks do not lend money for aquaculture ventures. Community Futures has lent money in the past, but when they start paying it back it ends up that the interest rates are very onerous. It's tough for the small entrepreneur to get into this market.
The 1,000 tonnes is not a requirement. The farms in Montana are 160 tonnes and are still profitable. That came in at about a million dollars in capital. Still, a million dollars is a lot of money. That employs I think five people. The 100-tonne farm would employ four people as well. They're not huge employers, but still they're profitable, and they will take pressure off the wild fishery.