Evidence of meeting #78 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 product.
A recording is available from Parliament.
Executive Director, Lobster Council of Canada
Generally, when the prices get too low they stop fishing because they simply can't afford to fish. There's no coordinated effort to slow down.
Conservative
Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB
Does that reduction in fishing effort often result in a bump in the price?
Executive Director, Lobster Council of Canada
If you took a look through history you'd find it generally does because it's a supply issue; that is, if you keep supply off the market for long enough.
Conservative
Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB
How much competition is there between harvesters in terms of calling a buyer over and saying I'll sell you mine for a slightly lower price than he's asking.
Is there much competition between the harvesters?
Executive Director, Lobster Council of Canada
I think you meant sell at a higher price.
Conservative
Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB
Yes, I'm sorry.
Well, no, someone could say, “Instead of you buying from him, I'll sell you mine for a nickel a pound less”.
Do they do that?
Executive Director, Lobster Council of Canada
It's a complex relationship between the harvesters and their dealers. It's complex. Historically, you usually sell to the same guy your whole life, generally. Of course, there are guys who bounce around. There can be intense competition on the shore.
Conservative
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Thank you very much, Mr. Chair.
I appreciate the questioning. I doubt if there are many fishermen who offer them for a lower price. I don't think you'd be running into a lot of that.
Following up on what Mr. Allen had to say and your response, it would indicate to me that you don't see a big need for bringing anybody else before this committee, which is somewhat discouraging for me when looking at the price and what's going on.
Would you agree, sir, that companies undercut each other? Do you think it's a race to the bottom for price? What I mean is that whatever the company, whether it's Clearwater or anybody else, if they're going to China, Japan, or somewhere else to sell lobster and another company is going too, what I would like to find out—and I'm sure the fishermen would want to find out—is are they there to be sure they sell lobster? Do you feel there could be an undercutting of price or in fact a race to the bottom?
Executive Director, Lobster Council of Canada
In terms of your first question, I think I said it couldn't hurt to have other people come before this committee. I don't know the mandate of this committee.
Liberal
Executive Director, Lobster Council of Canada
It doesn't matter to me. I think I said they would probably say what I'm saying.
In terms of how we market and sell lobster, there is a large amount of undercutting that goes on in our industry. It's very competitive out in the industry. My board members love to call them cheap sellers. We have all kinds of cheap sellers in the industry who will work for nothing.
The challenge with the lobster, on the live side, is that you and I could start a company tomorrow and sell live lobster. If we want to work for a nickel, we can work for a nickel. We don't have the overheads of a company that's been in the business for 20 years. There are a lot of different business models out there. It's fiercely competitive and there's lots of undercutting. Do they want to race to the bottom? No. I don't think anybody wants to race to the bottom. All of these processors and shippers operate in the small communities where the fishermen are. I don't think any of them like the pricing the way it is. They work and live in these communities as well. Nobody likes it this way, but the market is this way for all the reasons that a market does what it does.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Thank you very much.
Basically, what you're saying is that there is a problem at the marketing end. There is a problem because, if you're selling the product at a lesser price, the ones that suffer the most are the people. As I said before, the people who take their coats off to go to work generally do not get the money. This is what's going on here with the fishermen, I'm afraid. I would hope that this committee would see that. I certainly appreciate your expertise and knowledge, but there are other people in the industry who we need to hear from.
Also, I would like you to comment on the Atlantic lobster sustainability measures program, the $65 million that was put in place. Could you elaborate on the federal government putting dollars in place to aid in the marketing of lobster? Do we need more of that? Do we need more dollars? Was the money spent as well as it could have been?
I'd like you to comment on that.
Executive Director, Lobster Council of Canada
The ALSM was $50 million, the short-term measures were $5 million, and the marketing money was $10 million, if I'm not mistaken.
Of the ALSM's $50 million, virtually all of that money was used, if I'm not mistaken, to buy out licences, which I think was money well spent—taking effort off the water, which I think helps everybody who is left. That was most of the $50 million, and also sustainability plans for the various fleets. Of the $5 million short term, I think about $3.5 million was paid out to harvesters directly. Of the $10 million for marketing, I think about $8.5 million was spent. I just took a look this morning on all the projects that it was spent on and half a million was on our project—our long-term value strategy—which I think was money very well spent. There was money spent on processing techniques, on P.E.I., on marketing to China, Canadian cities, U.S. cities. So I think the industry spent that $8.5 million about as best as it could.
We weren't in place when that began, so I think if we had that money again through the Lobster Council, we would spend it differently. I think we'd spend it a little more strategically and we'd spend it to work our plan. So if you handed me $10 million today, we would spend it to work our marketing and our marketability plan and put it to very good use.
NDP
Jinny Sims NDP Newton—North Delta, BC
Thank you very much.
You know, it's always a delight to pop in to a different committee and whenever we talk about fisheries it's an area that's close to my heart, coming from the west coast. Of course we don't have lobster, but we really appreciate the lobster that you provide to the rest of the country and Phil keeps promising to bring lobster, but has failed so far.
NDP
Jinny Sims NDP Newton—North Delta, BC
Really, one of the key questions I have is that whenever we're looking at industries, whether it's the salmon industry or the lobster industry, we call them industries, but they're also people's livelihoods. These are the people who go out and fish and they make a living that way. Whenever we're looking at these industries now, we know that science can inform us, that good research can inform us in the kind of decisions we make—whether it is about the way we harvest, when we harvest, or whether it's tracking the amount of lobster in this case and the impact of climate change or overfishing so to speak.
When you look at science and research, how could the federal government do more to support research and development to assist the lobster industry? Now, knowing that we have a government right now that is quite allergic to data, and has a very hard time with a lot of research as well, and we know that—
NDP
Jinny Sims NDP Newton—North Delta, BC
I'm at a committee. I'm being nice. Enjoy this.
For me the question really gets down to what we at the federal level could be doing specifically. I don't want general comments, because I could make those too. But specifically, what research and development could the federal government focus on that would assist not only the so-called global industry of lobster in Canada, but also specifically those who actually fish for lobster?
Executive Director, Lobster Council of Canada
My answer is that I really don't know. That would be a question of some of the harvester groups that may come here. They're far more involved in that day-to-day biological things than we are. I don't really know.
What I do know is that the lobster biologists who work at DFO are very important and the work that they do on all the things that they do is very important. I wouldn't want to see that ever change, but specifically I can't answer that. I don't know. You'd have to ask the harvesting group, who is on the water day to day. They're far more involved. You'd be surprised at how active the harvesting associations are with science. They're very active with science. They do a lot of projects. They're very mindful of the gift that they have been given, and that's a great question for them.
