Fisheries Committee on Feb. 24th, 2014

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

Thanks very much, Mr. Chair. I'm going to be splitting my time with Mr. Weston, so maybe you can give me a nod when my half of the 10 minutes is up.

Ms. Salmon, it's so nice to see you again. It's a pleasure to have you back at our committee. I probably first met you when we were doing our two-year study on the aquaculture industry.

[Ruth Salmon]

That's right.

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

So we have done a fairly extensive study on that.

[Ruth Salmon]

You have.

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

It's a real pleasure to see you here again.

In your presentation today, and probably when you were at the agricultural committee as well, you talked about there being over 14,000 individuals employed in Canada in the aquaculture industry. I know that during that study we talked a lot about that being mainly in rural and coastal communities, and the impacts on those communities. But you're saying today it was suggested that in 15 years, with a push in production, the number could triple.

[Ruth Salmon]

Right.

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

Could you tell me a little bit about how you came to those numbers? Do you factor in the CETA impact when you're talking about those numbers?

Also, maybe you could talk a bit about how Canada's share of the world's market has fallen by 40% in the past decade. I find it interesting that we can grow that rapidly and lose that much of it. And is CETA going to have a huge impact on our world market?

[Ruth Salmon]

The projections made on growth, first of all, sound like a lot. In fact, the kind of growth we're talking about is measured growth and it's partly because of marketing. It would be unwise to grow in a huge way and try to dump a lot of product on the market. It's important that if we begin to grow again in Canada we do it in a staged and measured approach. At the same time, we based some of the jobs on the multiplier effect of having spinoff benefits for suppliers. It's based on some of the work that, I think it was Gardner Pinfold, did for DFO a few years ago. They came up with the multiplier effect that if you have one farming job this is two and a half times other jobs. We basically based our projections on some of that early work that Gardner Pinfold did. Again, I think it's important to stress that we are looking for growth in this industry because, except for Newfoundland, we have...and even with that growth in Newfoundland you still take the national average and we've been flatlined for 13 years. That's really where the 40% drop in market share comes from because all of the other countries are growing at a 6% to 7% annual increase. The graph goes like that and we're flatlined. The difference is that 40%. We did grow rapidly in the 1980s and early 1990s and since then there has been nothing. That's really where the discrepancy comes, where the other countries are continuing to grow, despite their own challenges. It's despite challenges, despite continual issues that we work on, but they're still able to see growth and we haven't.

Does that help answer? Was there something else at the end that you wanted?

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

No. I think that clarifies it.

Just to continue along that some line then, having the trade agreement in place with the EU before the U.S. is seen in a lot of areas as being a major achievement. Do you see that in the aquaculture industry?

[Ruth Salmon]

Again, It all comes back down to growth. Because of the agreement we'll see some shifting of markets because then the EU starts to look really attractive. For example, the majority of our product goes to the U.S. and Canada. North America is our major market, there's no question, because we can ship fresh product in a short period of time and that gives us that competitive advantage towards, for example, Chile.

However, no business wants to put all their eggs in one basket, so many of them are in other markets, Asia, Europe, there's some product even going to Australia, Russia, and Brazil. You'll see that there will be a shifting more to the EU because of CETA, that it just starts to look more favourable. But it still is sort of shifting rather than actually increasing growth and being able to really capitalize on that in a significant way. You'll see a bit of a shifting of the deck chairs but to actually really see the significant impact we would need to grow the industry.

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

I guess I'm done.

Thank you.

[The Chair, Conservative, Rodney Weston]

Mr. Weston.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

How much time do I have left?

[The Chair, Conservative, Rodney Weston]

Five minutes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

Thanks for coming, Ms. Salmon.

My colleague Ryan Cleary mentioned earlier that the regulations are not strict enough, but I read in a recent article by Peter O'Neil in the Vancouver Sun a quote from DFO spokeswoman Melanie Carkner who said that Canada has some of the strictest regulations in the world. I wonder if you might just want to comment on those two perspectives.

[Ruth Salmon]

I think that we do have opponents who don't feel that it would ever be strict enough. But when you look at what this industry is, the level of requirements, the level of monitoring, the level of reporting that's required, when we've done internal reviews compared to other countries we're certainly at the top. That's not to say that they don't have a good regulatory framework, but certainly, in terms of degree of requirements, we're actually at the top. I think that our opponents probably don't think it would ever be enough, but when you actually look at what the companies are being asked to do and the standards they are being held to...and I think it's reflective of the fact that so many of our companies are now third-party certified, which indicates they've met the government standards and they're going one step beyond.

[The Chair, Conservative, Rodney Weston]

All right, Ms. Salmon.

Mr. Chisholm, do you have a point of order?

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

Yes.

Mr. Chairman, I just wanted to clarify that what Mr. Cleary said about regulation—he raised a question—should not be characterized as indicating that he's an opponent or that we're opponents of the industry. It was merely a question to the witness about the fact that this issue arose in Newfoundland, and whether it was an indication, perhaps, that there was a problem with the stringency of the industry.

I wouldn't want people who are watching or who will be reading this at some later date to get the impression that the government side is for and the opposition is against. That's not the way we presented this at all, and that's not the way that question was presented.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. Chisholm.

That's actually not a point of order; that's a point of clarification or debate, I would say.

Anyhow, thank you.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Anyway, I'm glad we had the discussion.

Mr. Chair, could you give me a two-minute warning?

[The Chair, Conservative, Rodney Weston]

Yes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Ms. Salmon, you also commented on the limits of production capacity. You also made that comment before our agriculture committee. You mentioned the sturgeon eggs, for instance. I suspect that's Northern Divine, which comes from the Sunshine Coast area in the riding I represent.

[Ruth Salmon]

That's right.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

You mentioned that, for them, there's been a drastic reduction in the tariffs, from 20% to 4%.

For any of the producers you're thinking about, from where do you think this shift will occur in order to accommodate the new markets that the European Union presents through CETA?

[Ruth Salmon]

Again, it's hard to know what each company's marketing decisions are going to be. But particularly for those already in the EU market—and in this case, Northern Divine is—it would make sense for them to develop those markets to a larger degree, because then it starts to really be.... If it's beneficial now, it will be beneficial when that 20% comes down to zero.

Where they're taking that from, I'm not exactly sure, but since the North American market is our significant number one market, any diversion will probably come from that.