Fisheries Committee on Dec. 1st, 2011

[The Chair, Conservative, Rodney Weston]

I call this meeting to order.

I'd like to take a moment to thank our guests for joining us today, Mr. Walker by video conference and Ms. Walling here in person.

I really appreciate you taking time out of your busy schedules to join the committee today and to share with us your thoughts on the study we're undertaking at this point in time on closed containment salmon aquaculture.

If you're not familiar with the procedures of the committee, we generally allow about 10 minutes for opening comments from our guests. Then we have certain time constraints on members for questions and answers to try to allow as many questions and answers as possible here within the timeframe. So if I interrupt you, please don't be offended. It's just in the interest of trying to make sure everyone gets their opportunity to ask questions of you.

I'm not sure if we had an agreement about who's going to go first.

Ms. Walling, why don't you start first with your opening comments?

[Mary Ellen Walling, Executive Director, British Columbia Salmon Farmers Association]

Thank you very much for the opportunity to speak with you. I live in Black Creek, just south of Campbell River. I work in Campbell River. My office is located there, but I was here in Ottawa for the seafood value chain round table meetings earlier this week, so I have taken advantage of the lovely weather in Ottawa and stayed an extra day or two.

Thank you very much for giving me the time to speak with you today. I am the executive director of the B.C. Salmon Farmers Association. The BCSFA represents salmon farming companies operating in British Columbia as well as the service and supply sector that supports them.

Together, our sector provides 6,000 direct and indirect jobs, the majority of which are in remote or rural Vancouver Island communities, such as Port Hardy, Port McNeill, Klemtu, Gold River, Ahousaht, Ucluelet, Tofino, Sechelt, and others.

B.C. has, on average, 75 farms in operation at any given time, producing around 75,000 metric tonnes of salmon each year. This is significant economic activity in our province, representing about $800 million in provincial revenue each year, but the B.C. industry produces only about 3.5% of the world's farmed salmon. We're a big player in the province of British Columbia but a very small player on the world stage.

As you likely know, because of your work here at this committee, we are about to mark the first year anniversary of having the Department of Fisheries and Oceans as our primary regulator. The regulatory transfer that happened in mid-December last year has meant a significant amount of work for DFO and our companies as all of us navigate this new environment. There have been some challenges along the way, but we remain confident that as the regulation settles into place, there will be opportunity for streamlining operations in British Columbia.

Movement in this area will be important in the coming years as efficiencies in our operations become ever more important. With the price of salmon dropping significantly in the last six months and forecasts that this downturn will be somewhat sustained, our farm companies are being stretched to the max. But I know you have not asked me here so you can listen to an economic update. You have questions about closed containment, and we're glad you offered us the time to provide some answers.

Salmon farmers, particularly those in British Columbia, are actually on the leading edge of land-based recirculation technologies. With state-of-the-art facilities, we raise our fish in closed containment tanks for the first year of their lives.

I know that my colleague Clare Backman from Marine Harvest Canada came and spoke with you a couple of weeks ago about the innovative work being done with his company and the lessons being learned through research and further investigation both by our members and by other aquaculturalists.

However, there are still questions—those at a practical level about the technology and those at a philosophical level about why this is such a focus and how we as protein producers can continue with the lowest impact on the environment.

All calculations and the development-scale projects currently under way require the fish to be held at a significantly higher density than they are found in the ocean. That condition is not good for fish health and fish welfare. The cost of energy to run such facilities would be significant, both financially and environmentally, and the locations where these facilities could be operated are limited by the requirements for each facility.

All of these considerations would mean this technology, if it's developed to a commercial fish farm scale, would likely not operate in the areas where our companies work now. That is important to note for the rural Vancouver Island communities that look to us for stability in their resource-dependent economies, and that could have a significant effect on our many first nations agreements.

Taking a step back too, we have to consider the reasons we're having this discussion in the first place. Opponents to the aquaculture industry are insisting that salmon farming should be done on land, on the premise that our business harms the environment. That's based on presumptions that are simply false.

Our activity in the water, like any other activity in water or on land, has an impact. The goals of good management are to assess any risks of that impact and to manage them in the best way possible. We believe we're doing that well.

As we saw at the Cohen commission, despite significant propaganda to the contrary from farming opponents, the experts retained by Cohen looking at salmon farming could not find any statistical connection between salmon farm production and the returns of Fraser River sockeye, low or high.

Moreover, recent allegations about a connection between salmon farming and ISA have been proven completely false. I raise these points because they provide important context for the present discussion. Closed containment is being touted as a replacement for open-net aquaculture, not a supplement to it. Make no mistake, there are activists who seek to end our industry, and the false allegations that have been put forward to the Cohen commission and through the news media continue to be proven false.

We have a tremendous opportunity in this country—and I will speak for British Columbia in particular—to become a world leader in the raising of salmon as a healthy, nutritious, and affordable protein. Canada has all the natural assets to be leading the world in salmon farming, and we have so much potential to grow.

Producing for global demand of B.C. salmon using closed containment as the method is simply not an option. It is far too energy-intensive. The density means that the product is less healthy, therefore requiring far more treatment with antibiotics, and the capacity is simply not realistic. Closed containment could not even touch the current capacity of open-net farming, let alone be able to increase current farming levels dramatically to meet the world demand for Canadian salmon.

Our companies and my members have proven themselves time and again to be proactive, productive, responsible and innovative. They have always quickly adapted to engage new technologies where it can improve the management of their farms. The adoption of full recirculation systems in our hatchery stages is one very good example of that. That's the appropriate role of closed containment in our aquaculture industry. It does that well. We encourage additional research and development to make it even better, but it's certainly not a replacement for the industry as a whole, from hatching to harvest.

I encourage this committee to support the overall salmon farming industry in British Columbia and in Canada, and to recommend policy that favours its growth and careful expansion. We have a top-notch product, we should be further developing it, and along with researching opportunities for our future, we do have to ensure that our present is strong and successful.

Thank you very much for the opportunity to be here. When we get to the question period, I will be happy to answer any questions you may have.

[The Chair, Conservative, Rodney Weston]

Thank you, Ms. Walling.

Mr. Walker, you'd like to make some opening comments?

[Robert Walker, President, AgriMarine Industries Inc.]

There's just a point I'd like to make.

Peter McKenzie is here from Mainstream as well. I just noticed that his name tag is sitting beside Mary Ellen, so I wanted to make sure you know he's present.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

[Robert Walker]

Thank you very much.

It's my honour to address the Standing Committee on Fisheries and Oceans. My name is Robert Walker, and I am president of AgriMarine Industries. We're a publicly listed B.C.-based company in the business of developing and commercializing non-polluting salmon farming technology and salmon farm systems, as well as producing salmon on our own.

I was pleased to host members of the committee last November at our demonstration farm in Campbell River. A year ago we were in the process of assembling the world's first commercial-scale, marine-based, solid-wall enclosed system. Since then we've met a number of milestones. We successfully launched the tank in Middle Bay in January of this year, and we stocked it with 56,000 chinook smolts. They are currently at 1.34 kilograms and were entered at 35 grams less than a year ago.

We are pleased to report that the fish are not infected with sea lice, which is a key area of interest for our industry, of course. There have been no predator interactions. We're collecting and removing solid waste using our proprietary waste system. Because of our innovative clean technology and sustainable rearing practices, we have a signed a four-year agreement with a major U.S. grocer for the supply of chinook salmon. Finally, our demonstration facility is garnering media and industry attention from all over the world. I would like to take this opportunity to invite the current members of the committee to visit our site in Campbell River as well so you can see what we're doing.

The issues associated with salmon farming in Canada and other nations around the world have been well documented, and the industry is under pressure from both consumers and environmental groups to take action against the consequences of things such as lice infections, fish escapes, nutrient enrichment, etc. Net cage operations are often blamed for fostering disease and sea lice infestations. Retailers have responded by announcing sustainable sourcing policies so they're forcing us to relook at what we're doing.

We're calling on the B.C. and federal governments to support further innovation for clean technologies that will allow sustainable growth in the salmon farming industry and protect the environment. AgriMarine believes that its technology provides a solution to the issues that are plaguing the industry and can assist in creating a smooth transition into closed containment in a marine environment.

During a four-year, land-based closed containment trial, we successfully reared and harvested Atlantics, chinooks, and coho salmon and proved the viability of raising healthy salmon in a solid-wall containment system. The Cedar Project also demonstrated that land-based flow-through systems are not economically viable. Energy costs, land costs, costs of construction of land-based tanks, and the difficulty of building tanks large enough to hold an economically viable amount of fish all combine to make the systems too expensive.

AgriMarine took the positives that we learned from Cedar, went back to the drawing board, and tested various designs and materials for a marine-based tank. We concluded that a composite of reinforced fibre and foam construction, somewhat akin to windmill blades or yacht construction, provide the best specifications for materials. We now have a floating, solid-wall containment tank system that can be deployed in fresh or marine environments, warm or cold climates. We believe that AgriMarine's design solution offers a superior alternative to land-based systems and is a great transition for open nets. By floating solid-wall tanks in natural water bodies, AgriMarine provides an optimal rearing environment for fish husbandry through four primary means. We regulate water flow and temperatures, we monitor and supplement dissolved oxygen levels, we remove the threat of predation, and we remove waste that can be disease vectors and toxins.

Our technology provides what net cage farms cannot. These features allow us to farm in adverse conditions year round and operate well above density levels practical for net cages without causing undue stress to the fish.

The solid-wall system also contributes to a healthier surrounding ecosystem. AgriMarine's proprietary waste removal system channels settleable fish waste into a separator where we de-water it for eventual composting. The waste removal process eliminates the undesirable addition of nutrients to local marine ecosystems. With solid-wall containment there's no possibility of interaction between farmed and wild, no fish escapes, no predator interactions.

Another competitive advantage of the company's technology is in its control of feed. In solid-wall containment, discharge of uneaten pellets to the environment is prevented. Aside from the economic implications, the loss of even 1% of uneaten feed can cause significant and disruptive introduction of nutrients into the marine environment as well as attracting unwanted wildlife.

AgriMarine's system offers superior food conversion as well as isolation of the farmed fish. On-farm energy consumption is only a small part of the total energy and greenhouse gas footprint incurred to deliver cultured fish to market.

We estimate that AgriMarine's energy usage is about one-tenth of a comparably sized, land-based containment system, and this energy impact is further offset by our feed utilization efficiency, reduced benthic impacts, and proximity of the farms to market.

AgriMarine's operating costs are comparable to the present net cage industry and offer a sustainable and economical solution to the present challenges of farming. With over 10 years of development experience, we know that salmon thrive in a controlled environment such as the system we offer. The constant flow of new water at a comfortable temperature with constant supplementation of oxygen, combined with the lack of external stressors such as poor quality water and predators, ensures that the rearing environment is excellent for our stocks. This, in turn, reduces or eliminates the need for antibiotic treatments. We've not treated any of our fish to date at Middle Bay.

While the culture of each species presents a unique set of challenges, neither the Atlantic nor Pacific salmon species we've grown have had lice infections. The solid-wall tanks and separation of species from effluent water help the farmer to ensure that disease organisms are not spread between fish groups on the same farm or between wild and farmed fish.

Some studies have shown that sea lice that affect salmon do not occur or have very low incidents in deep water. There's also evidence that moving oxygenated water repels sea lice. The AgriMarine system has the capability of drawing water from a depth, thus avoiding the upper trophic regions in which sea lice thrive. The in-tank water is oxygenated and constantly refreshed.

The company entered a commercial and technology agreement with the not-for-profit Middle Bay Sustainable Aquaculture Institute for the construction and operation of a four-tank, commercial-scale marine farm utilizing our technology. We then subsequently signed a consortium agreement with the Gordon and Betty Moore Foundation and Sustainable Development Technology Canada for grants in support of the project. As a result, the first marine-based, commercial-scale tank was launched this past January. Three additional tanks will be launched in 2012—prior to June 2012.

AgriMarine has a fully operating farm in China as well using the same technology, but we're in freshwater there, growing Pacific salmon and rainbow trout. We've proven the technology there, with two harvests and sales of those harvests, and we're now in negotiations for additional sites.

Regarding economic benefits to British Columbia, we believe that AgriMarine is providing real economic and social benefits to British Columbia through job creation, investment in clean technology, and ocean stewardship. Farmed salmon has been B.C.'s largest agricultural export for over six years. Favourable water conditions on the west coast of B.C. create the potential for significant growth in the salmon industry.

However, with growing pressure to move the industry into closed containment systems on land, and with reduced output due to a lack of new or expanded licences, industry growth has been stifled. With government support in areas such as licensing or tax incentives, AgriMarine could aid in the growth of aquaculture in this province and assist in job creation, while addressing the environmental issues of such an economically important industry.

Most of the direct employment comes from work in the processing of farmed fish. So when you farm it could produce perhaps six or eight jobs, but also produce jobs in processing of up to twenty, and then multipliers beyond that for supplies and services. Communities that have long opposed traditional net cage farming due to its negative impact, or perceived negative impact, on the environment may deem AgriMarine's technology as a solution to the issues facing this industry and as a vehicle for economic development in their territories.

Because of reduced demands on the environment, floating containment farms can be located in a greater variety of locations, perhaps adjacent to towns where farm workers live. By offering a sustainable alternative to current salmon farming practices, AgriMarine can bring vital jobs and economic development to coastal regions and isolated communities that, because of environmental concerns, simply will not entertain conventional net cage farms.

Transitioning to marine-based, solid-wall containment is currently the only acceptable, environmentally sustainable economic model for the industry. Net cage farms currently in place could be converted easily to the AgriMarine systems. We believe that the AgriMarine system for aquaculture will contribute to a future environment of sustainability and economic well-being for the industry, both in B.C. and in Canada.

Thank you for your time.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Walker.

Mr. McKenzie, you have some opening comments.

[Dr. Peter McKenzie, Veterinarian and Fish Health Manager, Mainstream Canada]

Thank you, Mr. Chairman, and thank you for the opportunity to speak to the committee today on closed containment.

My name is Peter McKenzie. I'm a veterinarian. I've been working in the aquaculture industry for over 10 years and I've worked with multiple different versions of closed containment systems through that time. I've also spent a few years with the Canadian Food Inspection Agency as a national manager for import-export for the aquatic animal health division.

Today I'd like to speak to the committee on behalf of Mainstream Canada as their veterinarian and fish health manager.

Mainstream is one of the largest aquaculture companies in British Columbia and is a part of the global Cermaq Group, whose business is responsible for fish feed and farming in operations in Norway, Chile, Scotland, and Canada.

Cermaq and Mainstream's corporate mission statement is for sustainable aquaculture, and our corporate vision is to be the global leader in sustainable aquaculture.

Today I am here to convey Mainstream Canada's views on the existing closed containment technologies for the purposes of commercial finfish production. However, considering my knowledge base and my expertise in the area of fish health, I would like to touch on the biological limitations that are in place with closed containment technologies, particularly in the area of fish health, disease transmission, and animal welfare.

Mainstream Canada strongly believes that the existing open-net pen technology and our production practices allow for sustainable aquaculture, and we aim at demonstrating this through our daily operations and monitoring activities.

We'd like to start by saying that we recognize that the only true closed containment technology is the fully land-based recirculating aquaculture system, or RAS technology, where there is complete physical separation of water and animals from the surrounding environment. Mainstream believes this technology can be very effective in early life stages of fish culture, and as a result has invested in this technology in our land-based facility in Duncan, British Columbia.

In our opinion, the use of closed containment technology for the purposes of production of salmon to market size is not sustainable. Aquaculture sustainability by definition is a mixture of social, environmental, and economic sustainability for long-term survival of the industry.

True, RAS technology, as I mentioned, can address the environmental sustainability issues that have been mentioned previously by eliminating those interactions with the surrounding environment and controlling inputs and outputs from the system. However, concerns remain regarding energy use and fish health and welfare implications that I will touch on in a minute.

Closed containment systems like the RAS system also do not support principles of social sustainability, as we understand them. The main social impact of open-net pen systems is the benefit for rural and coastal communities in British Columbia, the majority of those being first nations with limited access to other sources of jobs. Closed containment, if it is used on a massive scale, would need to be strategically located in the proximity of urban zones or markets where they have access to energy and land.

Closed containment, such as the RAS system, is also not economically sustainable, in our view. The models are highly dependent on massive capital expenditures for start-up, availability of large parcels of land near the ocean, and consistent high prices from customers for the product, all of which are not easily accessible in Canada today.

The reality is that our fish are sold on a commodity basis, and current commodity prices will make all existing models unprofitable, subsequently making it impossible to access the necessary capital to start up these endeavours. Customers are not willing to pay a premium price for a product produced in a closed containment system in a commodity market. Premier prices will only be realized in limited niche markets.

Worldwide production of Atlantic salmon is estimated at 1.5 million tonnes in 2011 and an additional 200,000 tonnes for 2012. This will just put increasing pressure on the commodities market. Therefore, it is our view, as a global commodity, that closed containment will never be a viable alternative for the production of Atlantic salmon on a commercial scale.

In addition to the shortcomings in social and economic sustainability, all closed containment models that have been reviewed through DFO's SEP process were highly dependent on biological performance of the fish that comes very close to, if not surpassing, the physiological limitations of fish.

As of now, much of the debate on closed containment systems has revolved around engineering theory, theoretical profitabilities, and financial models; however, the one thing that every model culture system is solely dependent on is the biological performance to be successful. For this reason, the fish health and welfare considerations need to be considered.

These physiological limitations need to be considered. Closed containment technologies rely heavily on the manipulation of water temperatures, chemistries, densities, and the surrounding environment in order to hit theoretical values for maximum survival and production. There has been little consideration for the biological limitations of animals and conditions necessary for allowing a natural swimming behaviour and low-stress environments. As a result, I would like to just briefly touch on the implications of closed containment systems on animal welfare and disease transmission.

Fish welfare has been recognized globally as a critical aquaculture consideration. The World Organisation for Animal Health, or OIE, the Royal Society for the Prevention of Cruelty to Animals, the Canadian Council on Animal Care, and the Compassion in World Farming associations are examples of welfare experts who have taken the time to go through the science and develop standards for fish culture. All of these groups have come to the same conclusion, that water quality and fish density are critical parameters for maintaining fish health and welfare.

In summary of their standards, increasing densities result in elevated stress levels on fish, increased competitive interactions, restrictions to natural behaviours, and reduced water quality. Therefore, they've come up with maximum recommended levels of 17 to 22 kilos per cubic metre. Open-net pen systems currently operate with maximums of 15 to 17 kilos per cubic metre. However, the RAS technologies that have been discussed previously rely on densities of 55 to 65 kilos per cubic metre in order to be viable.

Natural swimming behaviour is also limited in these situations, as constant water flows are required in order to remove organics and to preserve water quality levels. Fish rely on transitions in water currents, slack tides, and salinity changes in order to perform their natural behaviours.

In the area of disease, with increasing densities and other stressors such as water quality compromises, fish will produce elevated levels of the stress protein known as cortisol. Elevated cortisol levels will react directly on the immune system of the fish, reducing the immune system and making these fish even more susceptible to disease.

Closed containment systems need to rely on water reuse and elevated temperatures to evaluate production goals. However, the manipulation of these temperatures also creates the perfect environment that enhances pathogen culture. As a result, with increasing densities and water quality compromises, there is a high risk of disease occurrence and outbreaks. Disease transmission can occur in any production system and is directly dependent on the frequency of animal interactions and water replacement rates. The number of fish interactions is a direct result of fish density. Therefore, increasing densities increase the speed and risk of disease spread within a population. Increasing water reuse and densities will also result in higher pathogen concentrations, leading to more severe outbreaks of disease.

In summary, Mainstream Canada recognizes the only true closed containment technology is the RAS technology. However, we do believe that it is not a sustainable solution for the commercial production of salmon to market size. We recognize that this technology can be utilized effectively for the production of Atlantic salmon during early life stages, and possibly for commercial production of salmon for the purposes of small niche markets.

Mainstream Canada is also committed to utilizing production systems and practices that optimize fish health and welfare standards, allowing our fish to perform and our operations to remain sustainable and to produce a healthy, affordable product.

My hope, in speaking to the committee today, is that you will realize that there are biological limitations to the systems we are working with and that it is not simply an engineering or economic discussion.

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. McKenzie.

We'll move right into questions now.

Ms. Davidson.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thanks very much, Mr. Chair, and thanks very much to each of our presenters here, both in person and by video conference. We've certainly heard some very interesting information this afternoon, and it's going to be very helpful to this committee.

I'd like to start my questions with Ms. Walling, please. You certainly belong to an interesting organization, and it sounds as though it's extremely busy and productive, so you've got a good organization going there, by the sounds of it.

I was interested in your comment regarding the likelihood that closed containment operations would operate in quite a different geographic area than the fish farming areas are in right now. I think we've heard from other people that they could be located anywhere. Right now we're looking at rural, coastal areas, and as you have pointed out, it's at mainly a lot of first nations communities where that's certainly one of the only—in some cases the only—economic boosts they may have.

We've heard from other people that the land-based area is not a concern, that they could go anywhere, and when you're saying that you think they probably would be located in other areas, I think you're maybe saying the same thing. Would we be looking at economic devastation to our local coastal fishing communities, for one thing?

If they are in different areas, how does that impact the land supply issue and the price of land? How does that get balanced?

Another thing we've heard quite a bit about is the cost of energy.

[Mary Ellen Walling]

Those are lots of questions in one question.

It's certainly a concern for me. I started my career in salmon farming. I came from a community development background and was working with North Island College as the director of training and community development. I got involved with the Kitasoo/Xai'xais First Nation and their protocol agreement with Marine Harvest Canada, where we were providing training in that remote community of Klemtu.

In Klemtu, I started to visualize what closed containment would look like in a community that size, where you don't have access to power. You have diesel power there to run your electricity. They have a small hydro station, but power supply is a big issue. They don't have a large, flat land base; it's quite mountainous. Swindle Island is quite mountainous and very treed, so it would be very difficult to build a large facility there, and you'd be running into extreme difficulties with your energy use.

When you think about Klemtu, they've gone from an 85% unemployment rate to one person in every family working in the industry. They run their own processing facility there. It's revitalized that entire community. Think about the capital cost to put a closed facility into that location. I think the very hard answer would be that the companies would need to offset that increased capital cost, even if you could find the land there, which you can't. You would move closer to market. You would have to offset that cost somehow, and that would be by reducing your transportation costs, for example.

It creates a number of challenges. We do see that there are opportunities with the technology, as Rob has described, and his technology is not what we would consider a true closed containment system because the facilities do have some exchange of seawater in and out, but I'm not going to speak to his facility. We look at a closed system as a completely closed system.

To be able to transition the industry to that, the large companies in British Columbia would simply move their investment elsewhere. That would be the reality of that kind of a situation.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

One of the comments that I thought you made—I'd like you to elaborate on it and correct me if I misunderstood what you were saying. You were talking about the environmental concerns and harms that some of the other people that we've heard from have talked about, and you also went on to say that you felt they were presumptions only, and that there wasn't science to back them up.

Could you speak a bit further on that, please?

[Mary Ellen Walling]

It's been a very interesting experience participating in the Cohen commission. We were named in the terms of reference for Cohen, so we're one of only two groups that are funding our own participation in that committee, and it's been a very expensive and very time-consuming experience. But it's also allowed us the opportunity to review a great deal of the science that's been put toward the commission. We had three weeks of aquaculture hearings.

The Cohen commission contracted with four scientists, and we provided them with all of our fish health and sea lice data, dating back to 2002 on a farm-by-farm basis for 120 farms on the coast. The four researchers who reviewed that data concluded that the data were very robust and complete, there were no gaps in the data, and based on the data they reviewed, they could see no linkage between salmon farming, disease and sea lice, and the sockeye returns, either the low return or the high return. There was simply no basis to draw that linkage.

So when you look at environmental effects on wild salmon runs, there are a couple of areas you'd look at. You would look at disease interactions. You would look at sea lice interactions. You could look at escapes and interbreeding. I think the waste question is largely understood not to be an issue if farms are well situated and if feeding is well controlled, which it is.

So if you look at those three things, we're not seeing that we're having an effect with escapes. We keep the fish escapes down. We don't want the fish to escape. Atlantic salmon cannot interbreed with Pacific salmon. They're completely different species, so you're not going to see genetic dilution. On the coast of British Columbia, we've been trying to introduce Atlantic salmon since 1874. Millions of fish have been released through the 1930s, 1940s, 1950s. Most recently, in Oregon, there was a release of Atlantic salmon in 2010. They simply do not colonize. I think it was quite frustrating for those sports fishermen back in the 1930s who thought this would be a prized recreational fish. So escapes are really off the table.

Then you look at sea lice and disease. These are the kinds of things our veterinarians have complete control over. We make sure that the fish are going into the sea pens in very good health. We can document that, and it's audited. They don't have sea lice on them when they go into the sea pens. We monitor the fish very carefully. We don't see large, unexplained losses. We have a very good record of disease management, with a very low use of antibiotics. Less than 3% of the feed in British Columbia is medicated at any stage of a growth cycle. The issue of sea lice has been so overstated in the public domain that people fail to recognize that we have very low numbers of lice on our fish. We have a different species of louse than in the Atlantic Ocean; they're much less aggressive, and we're monitoring them very carefully throughout their life cycle.

Those are the kinds of things we do to protect the environment.

[Patricia Davidson, Conservative, Sarnia—Lambton, ON]

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Ms. Davidson. Your time has expired.

Mr. Donnelly.

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

Thank you, Mr. Chair. I would like to thank our presenters as well for coming and providing testimony to the committee.

Mr. Walker, if I could start with you, I'll ask a couple of questions. Can you tell the committee why your company decided to make the move to closed containment?

[Robert Walker]

Sure. We actually were net cage farmers—we grew chinook salmon on the northwest coast of Vancouver Island for quite a few years—and ended up losing our farms because of several significant losses of fish due to uncontrolled plankton blooms in the area.

We wanted to stay in the salmon farming business, but we didn't want to keep losing fish, so we were looking around. At the same time, the B.C. government had a program that invited salmon farming companies to look at ways of.... There was a moratorium on new licences at the time, so the B.C. government said, “Okay, if you guys can show us some new methods to grow salmon that don't involve net cages, we'll give you some licences.”

So of course we jumped on that. We got involved with the Cedar facility, which was a pre-existing, land-based, flow-through system. It had eight tanks of 750 cubic metres apiece that we grew salmon in. We learned an awful lot from it, but we recognized that the economics were silly. It didn't make any sense—there were 175-horsepower engines to push water 40 feet ahead. It was just kind of an absurd situation, even though the fish did very, very well in the closed system.

We took what we learned from there and thought that maybe we could reduce the energy costs by putting it in water. So on paper we designed a system large enough to be commercially viable, with an energy footprint that was really limited. Once you're at the same level in the water, you're just moving water laterally, so your energy costs are really low. We went from a system that had eight tanks of 750 cubic metres to our current system now of one tank that's 3,000 cubic metres. We move water through there once an hour using two 15-horsepower motors, and we're running at about a third of their capacity—so we're using roughly 10- or 12-horsepower to move that much water through that system. That demonstrated to us that there were a lot of possibilities in closed systems in the water.

Mary Ellen pointed out that our system is a flow-through system, and that's true. We pump water from depth to go through the system. We take the solids out and put the rest of the water back into the ocean. It's not a true closed system, certainly not a RAS system—a recirculating aquaculture system—but I think it addresses so many of the current issues in farming that it's well worth looking at.

What's interesting, too, is that we also got involved in this industry from an environmental perspective. We wanted to protect our fish from external environmental issues, but it's also a farm management issue. We felt we could really reduce our overall costs if we kept our fish healthy and grew them at higher densities at a lower footprint. Certainly, on a modelling basis, we're equivalent to the current net cage industry costs. I think that's an important factor to think about.

Certainly, upfront capital costs are somewhat higher. We've moved in a very good direction regarding that: we've reduced our capital costs down—by about a third since we started this process—and we'll continue to do that as well. I think we have a very good system that will continue to improve—one I hope the industry considers.

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

I just have a brief follow-up question.

How soon do you think you could move from pilot to commercial? Or do you plan to become competitive with your competitors on the west coast at the scale they operate on?

[Robert Walker]

Our licence right now at Middle Bay is for 1,200 tonnes a year; a typical salmon farm would be 2,500 tonnes or 3,000 tonnes a year.

The site has some limitations. We could put possibly as many as four more tanks on that one site, so I guess we'll be getting up into the commercial scale at that point—we're pretty much ready to jump into that. Because we're still fairly new at this, we are innovating on a daily basis, as it were. We're looking at all kinds of ways to improve the way we operate the system, but generally I think we are very close to commercialization. We've certainly had a lot of interest from the industry around the world, and we're in negotiations right now with a number of people to install trial systems as well.

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

Thank you.

Mr. McKenzie, I just have a quick question for you.

You mentioned biological limitations to closed containment. I'm wondering if you feel there are biological limitations for open net systems as well. To be more specific, do you think we've reached those limitations on the west coast?

[Dr. Peter McKenzie]

The biological limitations that I was speaking to were the control systems that we put in and the research systems where we maximize temperature in order to maximize growth. There is a limitation in temperature profiles. Obviously, in open-net pen systems you don't have control over that, so you have a natural temperature control.

The other limitation was in the density issue, and open-net pen systems, again through stress mapping activities and research, have demonstrated that the densities that fish best survive in and best grow in are below the numbers I mentioned, 17 to 22 being the maximum, the optimum being around 10 kilos per cubic metre. That again is a density that we're not pushing the fish beyond. Again, in open-net pen systems that's a very feasible system. So as far as the parameters that I was speaking to, open-net pen systems are very sustainable.

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

Thank you very much.

For the remaining time, I will ask my colleague to ask a quick last question.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you, Mr. Chair. I have a quick question for Ms. Walling.

Concerns have been raised on the east coast of Canada that cuts to the federal Department of Fisheries and Oceans and to Environment Canada will hinder the ability of regulators to manage and enforce existing regulations for open net aquaculture.

Cooke Aquaculture on the east coast was charged recently for alleged use of illegal pesticides. I'm looking for your opinion on that, Ms. Walling. Is there any truth to that, that cuts to DFO, cuts to Environment Canada, will take away from the ability to manage and enforce regulations?

[Mary Ellen Walling]

It's a good question, because of course we're now under a new regulatory regime. A fishing licence, actually, is what we have in British Columbia.

I think my colleague who grew salmon probably talked about the need for an aquaculture act. Aquaculture is mentioned once in federal legislation, and it's in the bank act. We are a bit challenged on the west coast because we're now regulated by the Department of Fisheries and Oceans and we have fishing licences. This is a bit challenging for the farm companies, to kind of wrap their heads around the idea of common property and property that we control from the egg to the plate.

The issue on the east coast, as I understand it from my discussions with colleagues there, is quite different. There's a mix of federal and provincial regulations, with the provinces taking the lead on much of the regulation of the industry, which was the scenario we had in British Columbia some time back.

I would say that the Department of Fisheries and Oceans is quite well-resourced for the west coast. I think they have 60 staff to manage our industry, which is a large number of staff, and then of course there are 13 or 14 fisheries officers specifically for aquaculture, both finfish and shellfish.

I would say that I'd like to see more money for research. Certainly, I think some directed money toward research would be wise, but I also would like to see an aquaculture act, because I think we could streamline and harmonize our regulations right across Canada and have a much better understanding of the business from a regulatory point of view.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Cleary.

Mr. Kamp.