Fisheries Committee on April 30th, 2014

[Derek Butler]

As for the decline, if you look at inshore shrimp, we've gone down from 177 million pounds in 2008 and 2009. We didn't land it all in 2009, as there was a price dispute and the shrimp values had gone down too low. We're down to just under 90 million pounds this year. We have in that interval lost three or four shrimp plants. On the current trajectory for inshore shrimp, the industry will be gone in a few more years.

On the question of efficiency of offshore versus inshore, it depends on how you define efficiency. I represent the inshore sector. My members are divided on the question of the northern shrimp allocations. I have members who are on the side of maintaining the current DFO policies and members who would be on the other side. That's why I didn't address the particulars of LIFO, but if—

[Lawrence MacAulay, Liberal, Cardigan, PE]

Not to interrupt you but if you could also elaborate.... You talk about allocation, and we talk about last in and first out, but adjacent to the product is also part of the policy. Would you feel that the inshore is closer to the product than the offshore? I'd like you to address that.

[Derek Butler]

Yes, I would leave my individual members to address the issues of allocations, LIFO, and all those DFO policies, because again, I have members including, for example, as Bruce mentioned, the Labrador shrimp fishermen's union company, which is in Labrador and would be on one side of this question compared with other members of the association.

I will address one point that I think goes back to something Mr. Chisholm referred to and that I think helps to address your question. We do have to clear through the fog here a little bit. If you look at the value of shrimp landed in Newfoundland and Labrador in the inshore business—and my plants would be the recipients of the brunt of the cuts, and my members will wear this—and if you look at the value of snow crab this year, if you take the overall basket of fish that we will land in 2014 in Newfoundland and Labrador and the values returned to us from the marketplace based on the raw material prices and the market prices we get, the overall return to the Newfoundland and Labrador seafood industry this year should arguably be more. That is because the price per pound on snow crab is up so much and the price per pound for shrimp is up.

But there will be impacts. Not all harvesters have access to crab, for example, so for the harvesters who would fish principally in area 4R, which is exclusively the inshore fishery off the west coast of Newfoundland and Labrador, that fishery is down 12%, so they would fish again in area 6, principally. Area 4R west coast harvesters would have access to area 4R and area 6. So if they're just in shrimp, there will be impacts, but there will also be price increases because of increasing market returns. We have to hope for the increasing protein prices, which are unpalatable to consumers but at the end of the day will help make the industry more rentable in the long term, even as we have a declining basket of fish.

[Lawrence MacAulay, Liberal, Cardigan, PE]

The demand for protein and for fish is immense over the next 30 years, if I understand correctly.

[Derek Butler]

It's immense, and as I've said before, it's the last buffalo chase. It's the last wild protein we can eat, and we should all eat much more of it undoubtedly. That's going to drive the prices. We're seeing that with China. China is driving prices, because you have a growing middle class, and they can now afford to eat more seafood. So that's going to help.

[Bruce Chapman]

Mr. MacAulay, I might just add one other thing.

In 2010, before the shrimp cuts started happening, there was a task force in Newfoundland and Labrador on the inshore sector, which concluded that there was overcapacity in fish plants by 50%. They needed a 50% reduction to be viable. This was before the shrimp cuts started. So you had a bloated inshore infrastructure that was way out of proportion to be productive in relation to the available supply, even before these cuts started.

[Lawrence MacAulay, Liberal, Cardigan, PE]

This will handle that pretty well, Mr. Chapman, I would think.

[Bruce Chapman]

Well, I think it's unfortunate that we're going to see job loss in Newfoundland and Labrador. Wherever it's going to be, it's inevitable that it will come.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I would just like to ask about this Marine Stewardship Council. That's based out of London, England. Is that correct?

[Jay Lugar]

We're a global organization, Mr. MacAulay. Our global headquarters is in London. We have offices in 16 countries around the globe.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I just wonder if you would agree or disagree with me. Would you agree that there's going to come a time when if you don't have the certification, you do not sell the product? I think you had Loblaws or some of the large corporate sector—I had it marked here and now I can't find it—and some of the large retailers involved in this too.

[Jay Lugar]

We have a fair number of partnerships that are selling MSC-certified products.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Now, of course the fishery I understand the best, if I understand any of it, is the lobster fishery. On the south side of Prince Edward Island, in the lobster fishery, there were very low catches for four or five years. My concern is—and you can correct me if I'm wrong—if the Marine Stewardship Council saw what was going on there for the last three or four years, with people coming in with 30 and 40 pounds as compared to 800 pounds on the other side of the Island, there would be some change made in the certification of that product.

Would it be fair to say, whatever government—Liberal, Conservative, or whatever—is in power, that your organization is taking the power away from the countries and putting it in the hands of the conglomerates? Is that a wrong assessment?

Now, I understand that we have scientists—and I hope we do—who are very capable people there. My concern is—just looking at what is going on in Prince Edward Island, for a small example—what happens if they decide they can sell the fish anyhow? You won't be able to sell the fish in five years' time, if every lady is looking for that Marine Stewardship Council stamp.

But I also believe that we're not even in the fight, and I'd love to blame the government but I can't. It's something that is happening worldwide, but it's going out of the hands of governments in countries and going into the hands of people like you. No offence to you, but that's where it's going.

[Jay Lugar]

I take no offence, Mr. MacAulay, and thank you for the question.

In actual fact, with all due respect, it's 100% wrong in the sense of taking power out of the hands of government and industry. In actual fact, you're giving it to them. Basically, all certification does is ask whether you have a plan in place and whether you are living within that plan to sustain your fishery. That's it.

With regard to the lobster areas south of the Island in the Northumberland Strait, that's actually in assessment against the MSC standard. It's been brought to the MSC and is being assessed by an independent certifier, by a collection of the PEIFA, the Mi'kmaq community, and PEISPA, the seafood processors association. That effort, in itself, has also brought the rest of the Nova Scotia and New Brunswick lobster industry under assessment. I can't speak to that assessment at the current time, but it's basically going to see how well government is doing to make sure those bleak days in area 25 don't happen, so that we can sustain the resource for the people who can therefore market their products to those consumers who wish to see the MSC eco-label, and that's certainly not everybody.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I don't mean to be inconsiderate to you, sir, by any means.

[Jay Lugar]

That's understood. That's no problem. I accept that.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. MacAulay.

Mr. Butler.

[Derek Butler]

I think it's a fair question. Mr. Sopuck raised something along the same lines.

On behalf of industry, I would say, yes, we have to have our cautions. The Westphalian model of sovereign states still has standing, and that obviously matters.

[Lawrence MacAulay, Liberal, Cardigan, PE]

[Inaudible--Editor]

[Derek Butler]

It's a voluntary program that we invited MSC to participate in, and DFO volunteered to work with us as industry. It's not unlike when we say no animals were hurt in the production of this product, or when we consider buying carpets or clothes from certain countries in Asia and want to make sure no child labour was involved.

We can have sovereign states, and that's appropriate, but at some point, particularly when you're an export market, the people who we sell to want to have some assurances. If it is sufficient to say, from the sovereign state's or the resource manager's perspective, that the fishery is sustainable. That's good. If we can, on a voluntary basis, invite in others to work with us to ensure that, I think that can be good. There are risks; I appreciate the risks you're raising.

[Lawrence MacAulay, Liberal, Cardigan, PE]

But if you don't follow the rules, you're out.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. MacAulay.

[Derek Butler]

You can still sell your fish, but you're out of that program.

[The Chair, Conservative, Rodney Weston]

Thank you, Mr. MacAulay. Your time is up.

Mr. Kamp.

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

Thank you, Mr. Chair.

Thank you for coming, gentlemen. It's a very interesting topic, and I think you've enlightened us already.

Mr. Chapman, you talked about a kind of ballooning in 1997. That was the year I guess Minister Mifflin announced a 57% increase in the total allowable catch for northern shrimp. At that time he issued it by a press release, and put in the four principles. Just help me understand your view on those principles, because I think one could make the point that they're contradictory.

The first was that conservation was paramount, which of course makes some sense. The second was that the viability of the existing enterprises would not be jeopardized by this new larger allocation, and that in all cases they would retain their 1996 allocation and wouldn't go below that. The third was that there would be no permanent increase in harvesting capacity and that participation by new entrants would be temporary; they used those words. The fourth, though, is the interesting one, as I think has been referred to here: that adjacency would be respected.

I mean, how would all of those happen at the same time? Could it be argued that the way to resolve that is the way in fact I think it was resolved, and the way I think the stakeholders understood it would be—namely, to use the principle of adjacency when the allocations were going up, so that the majority of the increased allocation would go to, in this case, the inshore fleet because of that adjacency principle, and in fact to follow the same trajectory on the way down? Is it reasonable to see that this was the way it was originally intended to be understood and implemented?