Fisheries Committee on Dec. 4th, 2012

[The Chair, Conservative, Rodney Weston]

I call this meeting to order. I want to thank our officials for being here with us this morning as the committee takes into consideration supplementary estimates (B).

Mr. MacAulay.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you, Mr. Chair.

I'd like to move a motion that we ask the minister to come on Thursday instead of today, because we know we will not be able to question her today due to the bells, which will ring shortly after 10 o'clock.

[The Chair, Conservative, Rodney Weston]

It has been moved by Mr. MacAulay that the minister appear before this committee on Thursday of this week.

You don't have a written motion?

[Lawrence MacAulay, Liberal, Cardigan, PE]

No.

[The Chair, Conservative, Rodney Weston]

Mr. MacAulay submitted his motion verbally.

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

Could you repeat it for us?

[The Chair, Conservative, Rodney Weston]

He's asking that the minister appear on Thursday of this week in light of the fact that the proceedings could be interrupted today.

Is that correct, Mr. MacAulay?

[Lawrence MacAulay, Liberal, Cardigan, PE]

That is correct, Mr. Chair.

[The Chair, Conservative, Rodney Weston]

Mr. Kamp.

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

Well, I think the committee could make the request, but I do know the minister has some travel plans on Thursday and will be unavailable.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Kamp.

Is there anything further on the motion?

Mr. MacAulay.

[Lawrence MacAulay, Liberal, Cardigan, PE]

It's obvious, then, Mr. Chair, that this committee cannot talk to the minister.

[The Chair, Conservative, Rodney Weston]

Thank you very much. Is there anything further on the motion?

Are we ready for the question?

Those in favour of Mr. MacAulay's motion that the minister appear on Thursday in light of the fact that the proceedings could be interrupted today?

(Motion negatived)

Thank you, Mr. MacAulay.

As I was saying, I want to welcome you to our committee this morning. I know you have some opening comments, Mr. Grégoire. I'll ask you to proceed with your opening comments at this time. If possible, could you introduce your colleagues with you here this morning as well?

The floor is yours, sir.

[Marc Grégoire, Commissioner, Canadian Coast Guard, Department of Fisheries and Oceans]

Good morning, and thank you very much for the invitation to appear in front of you today to discuss our department's supplementary estimates (B) for the fiscal year 2012-13.

We'll be joined shortly by our acting minister, the Honourable Gail Shea, but before she arrives, we will give you some detail about the estimates.

I have asked our chief financial officer, Roch Huppé, to provide you with an overview of our spending plans and to describe changes to the estimated expenditures for our department.

My name is Marc Grégoire, and I am the commissioner of the Canadian Coast Guard. I'm also appearing today on behalf of our acting deputy minister, David Bevan, who is ill and unable to attend today.

With us today are three assistant deputy ministers from Fisheries and Oceans. They are: David Balfour, ecosystems and fisheries management sector, whom you see on a regular basis; Kevin Stringer, ecosystems and oceans science sector, whom you also see on a regular basis; and Trevor Swerdfager, transformation and program policy sector.

The budgetary figures Mr. Huppé will present were, or course, part of the supplementary estimates (B) tabled in Parliament last month.

Mr. Chair, our departmental focus continues to be on three strategic outcomes—economically prosperous maritime sectors and fisheries, sustainable aquatic ecosystems, and safe and secure waters.

Our targeted spending on key programs will support these strategic outcomes and ensure that we continue to create the conditions for our fishing and other maritime industries to generate value for Canadians.

The department, including the coast guard, is implementing modernization initiatives, as defined in recent budgetary review processes, while streamlining and increasing our efficiency in all areas.

Mr. Chair, our department has made important contributions to Canadians from coast to coast to coast. We will continue to build on achievements of the past as we look into the future.

Thank you, Mr. Chair, and now let me turn the microphone over to our chief financial officer, after whose presentation we'll be able and pleased to take your questions.

[Roch Huppé, Chief Financial Officer, Department of Fisheries and Oceans]

Thank you, Mr. Chair.

I am pleased to be able to give the committee an overview of the department's supplementary estimates (B) for 2012-13.

I have prepared a small deck presentation, which you received a copy of, so I will take you to page 2. Today's goal is to provide you with details of the key changes to our spending authorities for the year 2012-13.

Page 3 gives you an overall picture of where the funding authorities for the department would stand following supplementary estimates (B) approval. As you can see, under the main estimates, the department was allocated just below $1.7 billion. Then we have carry-forward amounts for funding we were entitled to bring from one year to the following year. So within our authorities we've moved $123 million from the previous year to the year 2012-13.

Under supplementary estimates (A), the department was allocated an additional amount of close to $6 million.

Under supplementary estimates (B), we're seeking approval for an increase to our budget of over $82.6 million.

The total spending authorities of the Department of Fisheries and Oceans will be brought to slightly under $1.9 billion for year 2012-13.

I'll move to page 4. The gross increase to the appropriations we are seeking through this estimates exercise is just under $88 million, and I'll cover the key items of that amount a little later. That amount is offset with a decrease to our appropriations of $3.6 million. This $3.6 million that appears in supplementary estimates is in relation to the strategic and operating review reductions as announced in Budget 2012. In Budget 2012 it was announced that the department would sustain a reduction of $79.3 million in three years. The $3.6 million that you see in these estimates is actually the first-year reduction, so the reduction for the year 2012-13.

In addition, in the supplementary estimates you have a section called “Transfers”, which covers two types of transfers. One is transfers within the department, so between our votes. As you know, when we obtain our funding, it is in what I will call different “buckets” of money. We have our vote 1, which represents our operating expenditures, including salary expenditures; our vote 5, which is our capital expenditures; and our vote 10, which is our grants and contributions. The department and the minister, by the same token, do not have the authority to move funding from one bucket to the other, from one vote to the other, so as we need to move funding, we need to get the parliamentary authority through the estimates process. That's what's included in the transfers.

Transfers also include transfers between government departments. As we join forces to deliver on certain activities, we may need to transfer funding from Department A to Department B, or we may receive funding from another department. The net amount of these transfers equals a decrease to our funding of just over $1.6 million.

I'll go through the key items on page 5 of the document.

The first item is just over $21.6 million, relating to the Pacific integrated commercial fisheries initiative. In the main estimates...we had a considerable decrease from the main estimates of the previous year. When I was at this committee earlier on, in late May or early June, I indicated that one of the main reasons for these reductions was that a lot of our programs were sunsetting in March 2012. Budget 2012 actually gave us some renewed funding for a considerable number of these sunsetting programs. The Pacific integrated commercial fisheries initiative is one of them, so the funding was sunsetting in March 2012, but Budget 2012 gave us a one-year funding renewal of $21.7 million.

The next item is close to $18 million for the acquisition of offshore science vessels: three science vessels and one offshore oceanographic science vessel. Basically, $13.2 million of that close to $18 million is dedicated to the procurement of these ships. Also included in that amount is $4.8 million that was given to us through Budget 2012 for the effective management and oversight of the fleet procurement in relation to the fleet renewal.

The $11.8 million you see next is in relation to Budget 2012 and the fleet renewal we received, so that's the $5.2 billion announced in Budget 2012. That $11.8 million is particularly related to the vessel life extension and mid-life modernization of certain of our ships.

There is $10.8 million for the renewal of the Atlantic integrated commercial fisheries initiative. Again, this is the same as for the Pacific integrated commercial fisheries initiative. This program was sunsetting in March 2012, and Budget 2012 gave us a one-year renewal of $10.8 million for this program.

The following $10 million is to support science and sustainable fisheries—what we refer to as the Larocque program. This is a program with a portion that sunsetted in March 2012 and for which Budget 2012 gave us a one-year renewal.

The following item is the $7.5 million related to the implementation of the Species at Risk Act. Again, part of that funding was sunsetting in March 2012. In this case, Budget 2012 gave us a three-year funding renewal for just over $21 million.

The next item relates to the health of the oceans. We received close to $4 million relating to that. Again, this program was sunsetting in March 2012, and Budget 2012 provided us with a one-year renewal on that item.

On the following item, Budget 2012 provided the department with $7.4 million as it relates to the Digby Harbour repairs. The $2.4 million is the funding the department requires for this fiscal year. The remaining $5 million has been brought over to years 2013 and 2014.

The last three items are recurring items in our estimates. Basically, the next one represents royalties we receive from intellectual property, mainly through publication items such as navigational charts and so on. The department is receiving $1.5 million from these revenues, which it can re-spend. The $66,000 relating to oil pollution, where the CCG is sometimes called in to deal with oil pollution, is a recovery of the costs they incur, which we are entitled to recover and re-spend. The $32,000 is related to real property. The department actually disposes of certain property over the year, and we have access to these revenues.

I'll close with the items on page 6. As you can see, we've just covered the voted appropriations section at the top of the page. We have the decrease of $3.6 million, which represents our first year of the strategic and operating review. In the last section, as I mentioned before, are transfers, either within the department to move money, in this case mainly from vote 1 to vote 10, grants and contributions, or money we either receive or send to other government departments. As an example, the first item is $902,000, which we receive from Environment Canada to access our scientific expertise and facilities in connection with the Canada-U.S. Great Lakes water quality agreement.

I'll leave it at that for now. If you have any questions on any of these transfers, obviously we're ready to take your questions.

Thank you.

[The Chair, Conservative, Rodney Weston]

Thank you very much, gentlemen.

We'll go into the question period at this point.

Mr. Kamp

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

Thank you, Mr. Chair.

Thank you, gentlemen, for appearing to answer our questions. We appreciate that.

I'd like to go back to the comments you made about the funds for PICFI, the Pacific integrated commercial fisheries initiative, and I guess for the Atlantic version as well. I think your explanation was that the program was sunsetting, but there was an additional year.

Do you have any way of telling us whether you think this is the last year of this program or whether there could be an additional program or additional years on this? And on a more technical question, could you tell me why the appropriations for PICFI, for example, show up in both vote 1 and vote 10?

[David Balfour, Senior Assistant Deputy Minister, Ecosystems and Fisheries Management Sector, Department of Fisheries and Oceans]

The PICFI and the AICFI programs were initially conceived as five-year programs. As Mr. Huppé has laid out, they sunset at the end of the previous fiscal year. The government decided to extend those programs for one additional year to continue the work that is provided by those programs. It remains for us to see if there is any decision about further continuance of those programs into the future. That would be a decision of the government as to whether or not to extend those programs further into the future as a budget item. If that were the case, those decisions would be reflected in estimates for next year.

Both programs involve vote 1, operating costs for the department for the delivery of the programs and to carry out—by the department—projects under the programs. They also involve a grants and contribution, or vote 10, component. For example, under the AICFI, there are contribution arrangements that are set in place with participating Mi'kmaq and Maliseet first nations in order for them to strengthen their capacity to operate their business enterprises within the fishery, to strengthen their governance of their fishery enterprises within their communities, and to also participate in the decision-making governance processes with other commercial fish harvesters for the management of the fishery.

It's a somewhat similar situation with regard to PICFI, although PICFI also has a component for the acquisition of commercial fishing licences from commercial harvesters and the transfer of those licences to fishing enterprises that are established by aggregates of first nations—that's through a process of a willing buyer and a willing seller to do that—in order that first nations can increase their level of participation in specific fisheries. It also involves contributions for first nations to be more effective in the overall governance and management of the fisheries.

As well, this supports efforts by the department, working with all three sectors of the fishery in B.C.—aboriginal, recreational, and commercial—to strengthen governance in the fishery and to improve accountability measures, such as improvements to catch reporting and things of that nature. Also, there are investments to move to the possibility of new management approaches for the management of Pacific salmon through a more share-based fishery and things of that sort.

The vote structure of votes 1 and 10 reflects the design of the program and the activities that would be carried out by the department under vote 1 and contributions for others to carry out activities under vote 10.

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

Thank you very much. That's helpful.

Mr. Grégoire, it's good to have you here as the acting deputy, but also as the commissioner of the coast guard.

On the appropriation for vessel life extensions and mid-life modernizations, as I think it was called, can you tell us why they show up in the supplementary (B)s? Is it not part of a more well-planned program that you have?

Can you just tell us a bit about the program to do vessel life extensions? Is this a normal thing that you do? Is this instead of purchasing new ships? Do all vessels come to a place where they do their mid-life extension or modernization? Could you just tell us a little more about this?

[Marc Grégoire]

First of all, the reason it's there is that this was part of the last budget, Budget 2012. We get the money once the specific announcement has gone through the approval process through a Treasury Board submission. Once the Treasury Board ministers have approved a component of the budget, then the money is released through one of the supplementary estimates.

In this case the money shown for VLE is specifically for the life extension of the Amundsen. Amundsen is a medium icebreaker used in the central and Arctic region. It's based in Quebec. We had to replace five of its engines.

In our regular capital program we don't have funds for major investments of that size. We have a limited capital program. For huge investments, like the acquisition of a new ship, or for major work on ships, like a vessel life extension, we seek money at the government level.

In its last budget the government was extremely generous in committing $5.2 billion to the coast guard over the next 11 years. A portion of that is designated to vessel life extension.

Vessel life extension is a good investment in that we can extend the theoretical life of a vessel. Whereas in some cases we had said the life of a vessel might be 30 or 40 years, in fact when we get to that stage, and given the good maintenance we do on our ships, we're able to extend its life by 10 or 15 more years of good service for the coast guard.

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

Thank you very much.

[The Chair, Conservative, Rodney Weston]

Thank you very much, Mr. Kamp.

Mr. Chisholm.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Thank you very much, Mr. Chairman.

Gentlemen, I'm pleased that you were able to come and speak with us today. What you do with the services your department provides for Canadians and for Canada is very important. I think we could all benefit from having more opportunities to sit and ask you questions and have a dialogue.

Let me start with a couple of questions. What I'll do, because our time is somewhat constrained, is ask you probably three questions together, and then maybe the appropriate person will provide me with the answer.

In your initial presentation, you talked about streamlining of services. You talked about modernization. It's all around the cuts of $79 million over three years to the department. A number of us are very concerned about the impact of those cuts and the impact of the changes.

There's a lot going on right now. We heard from Justice Cohen, of course, on matters as they affect the Fraser River sockeye. Of course the issues he raised relate to fisheries on all coasts and in the interior.

I want to ask you about aquaculture. In Nova Scotia in particular, as you know, the Government of Nova Scotia is introducing a strategy, and a number of communities are extremely concerned about the impact of open pen fish farms on the traditional fishery, in particular lobsters. Your department has a very important role in ensuring that proper assessment and monitoring enforcement are done.

I raise that also in connection with what Justice Cohen said about aquaculture on the west coast, in his recommendation 3, when he said:

The Government of Canada should remove from the Department of Fisheries and Oceans’ mandate the promotion of salmon farming as an industry and farmed salmon as a product.

He also said there was a conflict between the mandate to protect fish and fish habitat and the promotion of salmon farming as an industry and farmed salmon as a product.

In that context, I'd like you to provide for me some answer on how it is your department will provide any comfort to the people who are concerned about the impact of farming salmon in Nova Scotia.

The second question I want to ask you about is with respect to lobster trap tags. There have been ongoing negotiations with the industry in the maritime and Atlantic regions and in Quebec around tags and the responsibility for them. It's an important conservation method, I think we all agree.

The government has proposed to no longer issue tags themselves, which had provided a certain level of control, but to turn that over to the private sector. The industry is extraordinarily concerned about that for fear of losing control over the ability to conserve and to control effort.

The industry has asked the department to allow for a year's transition into who will issue them—in other words, for the department to continue to issue them this year. They have even reluctantly said that during that year they will pay the costs, but they want the DFO to continue to have responsibility for issuing the tags; give them a year to figure out how it is they can best do it, and in a way that controls the whole question of effort.

So I'd like you to answer for me why it is, given the problems facing the lobster fleet right now, you are continuing to try to impose this change against the overwhelming will of the fishermen.

My last question at this point is on the issue of controlling agreements. Controlling agreements, as you know, have an impact on the policy of preserving the independence of the inshore fleet in Atlantic Canada, known commonly as the owner-operator fleet separation policy. Those controlling agreements are to end in 2014. I understand that a couple of Nova Scotia Conservative MPs have appealed to your department and to the minister to allow for this time limit to go by and for the particular processes to not have those agreements ended.

As somebody within DFO has said to the minister, these controlling agreements compromise the integrity of the owner-operator fleet separation policy. If they're not ended in 2014, as they said they were going to be ended seven years ago, then that may very well jeopardize the integrity of preserving the owner-operator fleet separation policy, flying in the face of Minister Ashfield's commitment to that policy as declared in September.

I wonder if you would please take a moment and respond to those questions.

[The Chair, Conservative, Rodney Weston]

Mr. Chisholm, you used up pretty nearly your whole seven minutes in asking those three questions. You have 12 seconds left, sir.

I would ask, in all fairness to others and to the timeframe, if you could answer one of the questions—the first question if you want.

We have some further time here, and then we can get back to it.

[Marc Grégoire]

Which one do you want?