Evidence of meeting #11 for Fisheries and Oceans in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was terms.
A recording is available from Parliament.
President, Fisheries Council of Canada
No. Basically, in P.E.I. some of the mussel companies would be members of the Fisheries Council of Canada, but not involved in aquaculture, really.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Conventional wisdom says that it's good for Canada that we have negotiated this European agreement before the U.S., which is actively involved in doing so as we speak. Is that your perspective as well?
President, Fisheries Council of Canada
Oh, most definitely. We already have a situation, and you may recall that we entered a free trade agreement with South Korea, but it has floundered. The Americans came behind us and actually now have a free trade agreement with South Korea. Already the tariffs with respect to South Korea toward the United States are going down, and already we're starting to see a loss of live lobster sales to South Korea, because the Americans are able to veto us.
There's no question that having this agreement in place before the Americans come on board is absolutely fantastic.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Another witness, in answer to a question, told us that he couldn't see any way that this free trade agreement, which, of course, is bilateral, could negatively affect our seafood producers in terms of their domestic market access, market share, and so on. Is that your view?
President, Fisheries Council of Canada
Yes. If you look across the industrial sector of Canada, the fish and seafood industry is probably the biggest winner, even, say for example, in terms of Unifor, the union of the auto workers, of which the FFAW is a member. He has basically said that. There are winners and losers, but one of the big winners is the fish and seafood industry.
Conservative
Randy Kamp Conservative Pitt Meadows—Maple Ridge—Mission, BC
Presumably, for a Canadian seafood producer that markets its product to benefit from this, it is going to be exporting more into the EU in addition to the U.S. and China and the other Asian markets. It will be more inclined to do so because it doesn't have to absorb the 20% tariffs that are currently in place. If I'm understanding correctly, that's the mechanism.
Do you or your members have any concerns that European domestic producers who sell into their own market will somehow find a way to react and maybe take a more protectionist role, rather mitigating some of the benefits of this free trade agreement?
President, Fisheries Council of Canada
Right now we're quite a small player in the EU; I think we represent 2% of their imports. The capacity of both our wild fisheries and our aquaculture fisheries to expand is quite limited, in that we're dependent upon the quotas and dependent upon the health of the stocks. We focus more on the prosperity side of it in the sense that, as you mentioned, we're selling frozen lobster claws and tails in the EU. Right now it is jumping more than 16%. That will increase, but even if it couldn't increase because of the limitations in the expansion of the stock, they wouldn't get all of the 16%. I'm sure it would be somehow negotiated and shared between the exporter and the buyer.
It's prosperity. It's the same thing with respect to the freshwater fish, walleye and pickerel. They have good markets in Geneva and elsewhere, but they're going in at 8%. The first day that the agreement comes into place, they'll go in at 0%. It doesn't mean that Lake Winnipeg is going to be producing more walleye; it won't be. But there will be an almost immediate return in terms of the prosperity of the people involved in that fishery.
Conservative
Ryan Leef Conservative Yukon, YT
Thank you for your testimony so far. I am going to keep following the vein that Mr. Kamp started on and that you were touching on here.
You're really saying that your return on investment won't improve from more than an increase in the volume of exports.
Have you done an economic impact assessment? What I'm driving at here is this. That ROI improvement in most industries is going to mean the ability to spend the money that you wouldn't have otherwise had on jobs locally, on indirect industries that support the main industry and improve the community. It's that proverbial bouncing buck.
Do you have a handle on what your members would do with the improved ROI and who would indirectly or directly be enhanced because of it?
President, Fisheries Council of Canada
I will use as an example cooked and peeled shrimp. Right now they cook and peel the shrimp and send it into the EU for further processing. I see them now going directly to retail. That means they'll start investing in modified atmosphere packaging, basically starting to go directly to retail and to food services. It's a maturation, if you will, of the way they do business.
The real issue for the fish and seafood industry of Canada is the labour force. It is aging and is not being replaced, so we are going to have to innovate. This is where we would be seeing the opportunity. This gives us the money to think positively, in the sense that labour that is withdrawing from the industry can be replaced through automation and innovation and by increasing research with respect to expanding, as you say, the supply of our products.
If we are limited in the wild fisheries by the conditions of the stock.... They're generally well managed now. There will be some ups and downs, but the envelope we have now is going to be relatively within 10% to 15%, either up or down. What we need to do is look at our waste. There is a lot of potential to expand our business by moving further into these types of secondary products.
Once you get some sort of half-decent returns behind you, you have the liberty to think in those terms. Right now, if you look at any statistics with respect to Canada's fish and seafood industry, other than, for example, High Liner Foods, which has basically gotten out of the harvesting side, profitability is not really that great.
Conservative
Ryan Leef Conservative Yukon, YT
There's improved prosperity with that because of the reduced tariffs.
You mentioned the aging labour force. Would it not be a fair assessment then that if there's some enhanced prosperity, it becomes a lot more attractive market for youth and people looking at new careers or new lines of business to actually start moving into, because a huge market, now a more prosperous one, is going to be available?
Are you planning on marketing that angle of it? Maybe you could give me your insights into that angle of it.
February 12th, 2014 / 4:15 p.m.
Conservative
President, Fisheries Council of Canada
Basically, we're looking at two things. We really have to start having these plant operations 12 months a year. People don't want to work seven months a year.
Also, we have to start paying higher wages. One example is refrigeration engineers. Our industry in Newfoundland and Labrador is paying more money for those types of people than they are for a similar job in Halifax. The problem is we have to pay a premium for those types of talented people for living in rural communities. Some people love rural communities, but some people really.... It's hard to attract the young people sometimes.
Conservative
The Chair Conservative Rodney Weston
Thank you very much, Mr. McGuinness and Mr. Leef.
Mr. MacAulay.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
Welcome, Mr. McGuinness.
I'd like to follow Mr. Cleary's questioning on the jobs. I would have to expect that if there's $400 million paid, it would be for the loss of something, but....
First of all, I want to ask you, on the cooked and peeled shrimp, will that be processed now in the EU or partially processed here? What will happen?
President, Fisheries Council of Canada
Well, it's really up to options. It gives the opportunity to have it processed here. What we do see is that some of the plants will be going further into processing here in Canada and delivering direct to retail, particularly in the EU. We do see more processing here in Canada for cooked and peeled.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
You mentioned the mussel industry, which is of interest to me. We do sell a lot of blue mussels to Europe now. What's the tariff on that at the moment?
President, Fisheries Council of Canada
On prepared mussels, it will be removed over a seven-year period. It will go from 8% to 0% over seven years.
Liberal
Lawrence MacAulay Liberal Cardigan, PE
You also mentioned consolidation in the fishery. Consolidation is always something of interest to me when I hear it.
With respect to the lobster fishery, I'd like your analysis on what has taken place on the east coast on the inshore fishery. Do you think of it as an efficient way of handling the industry totally, or do you see that there should be some changes in the industry?
President, Fisheries Council of Canada
As you know, the P.E.I. government did the study of the loss of fisheries. The three maritime provinces did it and they did see a lot of opportunities for improvement.
I don't think consolidation was a big item. When you look at consolidation, you're looking more at the processing side. In P.E.I. you've already had significant reduction in processing with the closure of the OCI plant.
When I talk about consolidation, I'm talking primarily about New Brunswick, primarily about P.E.I. in terms of the processing plants—