Fisheries Committee on April 30th, 2014

[Bruce Chapman]

Very much so; in fact the press release refers to adjacency in the context of allocating the increase. Within that the priority would be to aboriginals and less-than-65-foot licence holders who were adjacent to the resource. So even those offshore vessels that were adjacent to the resource weren't part of the priority. They were covered off by the other provision that they were to be protected in terms of their existing status, but they were not going to enjoy much, if any, of the increase.

So adjacency was not contradictory toward the existing viability at the time; it was couched in terms of the access to the increase. Increases were not going to go to British Columbia Canadians or Quebec Canadians. They were going to go to those who were adjacent to the resource who were aboriginals and less-than-65-foot licence holders.

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

To my understanding—correct me if I'm wrong—the term that became known as “last in, first out” wasn't used in 1997. It wasn't part of the press release. Is it your understanding that this was understood? In fact did the FFAW understand it that way, or was there any misunderstanding, to your knowledge?

[Bruce Chapman]

In 2012, a report from Ernst and Young, an independent review that was commissioned a year before by Minister Ashfield, gave a very good history of this. A page and a half in the report deals with this question.

It was well known, without the term “LIFO” being used, that the Mifflin announcement was going to be that priority would be given to the new entrants on the way up, but they would have to shoulder the responsibility on the way down. In fact, we have correspondence from ministers throughout this period that confirm that. The Ernst and Young report talked about it first being discussed at the Northern Shrimp Advisory Committee in 2000, and it first appeared in the 2003 management plan.

I also have a copy here of a letter from the FFAW, the Fish, Food and Allied Workers union, to the Government of Canada in October 10, 1997, which acknowledged, precisely, the LIFO, not as a term but in essence of what it means. So, it was well known and nobody objected. It was a bonanza at the time for the new entrants, and deservedly so, because they had suffered from the collapse of the cod resource, but it was intended as a temporary situation.

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

What are we to make of Minister Hearn's initiative—I worked with him at the time as well—to change in 2007 the temporary licences of the inshore fleet to regular licences?

[Bruce Chapman]

If I had a moment I could find the quote, but Minister Hearn specifically announced that it was the purpose of.... First of all, it was the fishermen's union that requested the term “temporary” be regularized into the regular licence. Minister Hearn announced that the purpose of that was to facilitate rationalization, to allow combining of licences, to deal with the overcapacity that had already emerged in the inshore shrimp sector. Minister Hearn further went on to announce that this was in no way going to change the allocation policy announced by the previous minister and in the plan.

In fact, this step to make the LIFO term appear, very crisply, subject only to land claims agreements appeared in 2007. That was under Minister Hearn's tutelage, and he did that because of the confusion being created over the changing of the temporary designation into a regular licence.

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

I think that's helpful.

I would assume your organization made a submission in the Ernst and Young review.

[Bruce Chapman]

Yes, we did.

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

I've seen that as well, and I think it would be helpful for the committee to become more familiar with it.

I have a question on the side. We've heard throughout of the offshore fleet, the traditional fishers, the inshore fleet. We've also heard of what are called “special allocation holders.”

Who are they and how do they fit into this last in, first out policy?

[Bruce Chapman]

I will try, but just before I answer the question directly I should state that in 1997 when this decision was made and this arrangement was discussed throughout the industry, I was representing the inshore processors in Newfoundland and Labrador. I was advocating for the new entrants.

It was made absolutely abundantly clear to me and to others by the government at the time that was advocating for the new entrants that this was temporary. It might take two years, five years, 10 years, but nobody should have had any illusions about what was going to happen when the time came. I own up to that.

There were a number of the special allocations. During the increases, various ministers made the decision not to give quotas to either the inshore sector or the offshore sector, but to give them to communities to raise money. Communities included, for example, the Fogo co-op. They received an allocation that the offshore sector would fish on their behalf, and they paid them money for the rights to fish their allocations.

That also happened for the Mi'kmaq community on the south coast of Newfoundland. It happened for some of the St. Anthony development area. Another organization there receives special allocations and so on. There are various others. They would also have to life with LIFO, so as they got their chunk on the way up and they received the benefits in the form of cash from selling their quotas to the harvesters that fish, they would have to lose it on the way down.

There was a lot of interest in this because it had great economic value and was an injection of funds to these community groups. The good part about those allocations is that there was no permanent increase in harvesting capacity because they had to either contract with the inshore sector or the offshore sector of the fishery.

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

May I have one final comment?

I'm sorry for having to ignore it, I did happen to see, Mr. Chapman—and I would love to ask you questions as well—a presentation deck that I think you made to the all-party committee of Newfoundland and Labrador, which I found very helpful in summarizing some of the information. If possible, I think the committee would benefit. I leave that to the chair to request, but I think it would help if we were able to get a copy of that as well.

[Bruce Chapman]

We can forward that.

[The Chair, Conservative, Rodney Weston]

Thank you very much. Thank you, Mr. Kamp.

Mr. Chapman, if you don't mind forwarding that to the clerk we certainly would appreciate it.

Gentlemen, on behalf of the committee I want to thank you very much for your time here today. Thank you for making presentations and taking the questions from committee members. It certainly has been appreciated.

This committee will stand adjourned, and the subcommittee will reconvene shortly.