Fisheries Committee on April 23rd, 2015

[The Chair, Conservative, Rodney Weston]

I call this meeting to order.

Minister, I'd like to welcome you to the fisheries committee, and the officials that are accompanying you today. I think you're quite familiar with the practices here at our committee. We generally allow a 10-minute presentation before moving to questions and answers. Maybe, during your presentation, you could take a few moments to introduce the officials with you as well.

Minister, the floor is yours.

[The Honourable Gail Shea, Conservative, Gail Shea]

Thank you very much. It's a pleasure to be here today.

With me are members of the DFO senior management team, which includes: Matthew King, deputy minister; Jody Thomas, Canadian Coast Guard commissioner; Kevin Stringer, senior assistant deputy minister of ecosystems and fisheries management; Tom Rosser, senior assistant deputy minister of strategic policy; and Trevor Swerdfager, assistant deputy minister of ecosystems and oceans, science sector. Our chief financial officer, Marty Muldoon, is with us again.

I want to begin by reiterating the point I've made at past committee appearances that our government has demonstrated an unwavering commitment to protecting mariners, managing Canada's fisheries, and safeguarding our waters.

Today I'll provide members with a brief overview of DFO's 2015-16 main estimates before speaking to the recently tabled budget and what it means for my department.

I'm also here to speak to Bill S-3, amendments to the Coastal Fisheries Protection Act. Illegal, unreported, unregulated fishing is a scourge that threatens our oceans and takes money away from fishermen. I hope that the committee will see fit to pass this important bill.

In regard to the main estimates, my department's request for this fiscal year amounts to $1.9 billion. This figure represents a net increase of $283.9 million over last year. This increase is mainly due to funding for the renewal of the Canadian Coast Guard fleet, including both vessels and helicopters, funding to renew the Atlantic and Pacific integrated commercial fisheries initiatives, and additional investments in small craft harbours across the country.

As you are aware, budget 2015 was recently tabled. We committed to getting real results for Canadians and these investments will protect our environment, ensure the sustainability of our fisheries, and support our government's priorities of creating jobs and promoting economic growth.

Under economic action plan 2015, I'm pleased to report that both the Department of Fisheries and Oceans and the Canadian Coast Guard will be delivering a number of important investments to Canadians.

These include $5.7 million over five years to help secure new market access for Canadian seal products, and $30.8 million over five years to enhance marine transportation safety in the Arctic and further strengthen incident prevention preparedness and response south of 60°. Over the next five years, $34 million will be used to continue to support year-round meteorological and navigational warning services that will support northern communities and safe marine navigation in the Arctic.

Budget 2015 also includes $75 million over three years to continue to support the implementation of the Species At Risk Act to protect Canada's diverse species and secure the necessary actions for their recovery. In addition, $2 million is earmarked for the Pacific Salmon Foundation to support the Salish Sea marine survival project.

I'm also pleased to report than an additional $10 million annually, over the next three years, will be used to extend the recreational fisheries conservation partnership program, which will help support an already robust and successful initiative.

More good news for Canadian fishermen comes from increasing the lifetime capital gains exemption to $1 million for owners of a fishing business, which will allow owners to maintain more of their capital upon disposition of their fishing property. This will make a real difference for our hard-working fishermen by allowing them to keep more of their hard-earned money.

Finally, recognizing the important role of small businesses in Canada as job creators, the government is further encouraging small business growth by reducing the small business tax rate to 9% by 2019.

As you can see, these investments continue to demonstrate our government's ongoing commitment to marine safety, to supporting responsible resource development, to protecting Canada's marine environment, and creating jobs and economic growth.

We're committed to ensuring that our fishermen are able to get delicious Canadian seafood on plates around the world. We have embarked on the most ambitious trade agenda in Canadian history and those in the seafood industry stand to benefit greatly. For example, Canada embarked on a historic trade agreement with the European Union. This was not only a game changer for Canadian businesses but a watershed moment for our fish and seafood industry in particular.

Canada is the world's seventh-largest exporter of fish and seafood products. The European Union is the world's largest importer and the demand from this market will only continue to grow. By opening up new markets in the EU and improving access for fish and seafood, CETA, as well as our trade agreement with South Korea, will result in job creation, higher wages, and greater long-term prosperity for our fishing industry.

As the government we're continuing to look to the future on how we can unlock even more international markets for Canadian businesses. Of course, unprecedented access to global markets is a moot point if we're not making significant and strategic investments here at home. As you know, this past November, Prime Minister Harper announced significant federal funding for DFO and coast guard infrastructure projects. Over the next two years, we will invest an additional $288 million in a vast network of more than 1,000 small craft harbours across the country.

With respect to the Canadian Coast Guard, over the next two years an additional $183 million will be authorized for repair, life extension, and procurement of vessels and small craft. This funding is in addition to our unprecedented investment in the coast guard's fleet renewal program. The coast guard vessels and small craft benefiting from these new funds will support activities linked to search and rescue, gathering scientific data, responding to maritime incidents, and assisting conservation and protection officers.

In addition to this work, Fisheries and Oceans is also responsible for the stewardship of a number of laboratories and other federally owned assets. Over the next two years we will allocate an additional $80 million in 195 projects to upgrade science facilities, Atlantic salmon fishways, lighthouses, search and rescue stations, and federally owned buildings across the country. These infrastructure investments will help support the continued delivery of quality services and support the science and research that represents the foundation of our work.

In Canada we take pride in knowing that our fisheries and aquaculture operations are sustainably managed. This is the case for all species, but I'd like to note in particular our commitment to the conservation and protection of wild salmon. Our scientists are actively monitoring salmon populations in key indexed rivers to better inform our management decisions. We've also implemented more stringent measures for recreational salmon fishing in some locations in support with this rigorous enforcement effort. On the west coast we're seeing the benefits of this work with improved returns of some important salmon stocks. With Atlantic salmon on the east coast however there are still concerns, particularly in the southern region.

I'm personally committed to this issue, which is why last December I announced the establishment of a new ministerial advisory committee on Atlantic salmon. The committee is made up of key stakeholders, who will provide me with recommendations on the future direction of conservation. Last month I attended the committee's inaugural meeting in Halifax, along with experts from across the Maritimes and Quebec. Together they will examine conservation and enforcement measures, as well as predation issues. They will also develop a strategy that addresses international fishing in areas for advancing science. I'm pleased to report that this work is already coming to fruition. After just two meetings I asked the advisory committee to submit a set of interim recommendations that could be acted upon immediately. Based on these recommendations, I recently announced new conservation measures for Atlantic salmon recreational angling throughout the gulf region. All of these management measures were supported by key stakeholders and further demonstrate how we are listening to the concerns of local fishing and conservation groups.

Illegal, unreported, and unregulated fishing is another area where we're taking decisive action. Canada, of course, has been a leader in global efforts to deter this type of fishing. We know that strong governance of the high seas through regional management fisheries organizations is integral to reducing illegal fishing and protecting the interests of legitimate fishing. Bill S-3, which is before you for consideration, proposes some amendments to the Coastal Fisheries Protection Act in order to fully implement the international port state measures agreement. As you're aware, this bill proposes amendments that, if accepted, will broaden enforcement authorities and strengthen prohibitions against the importation of illegally acquired fish and marine plants.

Canada already has a robust regime in place to control access of foreign fishing vessels to Canadian waters, but we know that more needs to be done on a global scale, and that's why passage of Bill S-3 is important to our government.

I urge the committee members to improve the amendments proposed in Bill S-3. Again, the sustainability of our fisheries is a top priority for us. Together with our partners we're committed to improving the way fisheries and aquaculture are managed through science-based reforms, stakeholder and aboriginal engagement, and better access to export markets for Canadian fish and seafood. We're also committed to renewing Canadian Coast Guard assets and its services to Canadians to ensure a safe and efficient navigation and bolster our already robust response to maritime incidents. Going forward we'll continue to ensure Canada's natural resources are developed sustainably and responsibly through strong regulatory frameworks, sound science, and strategic investment.

Over the last year you've discussed and considered many important policies and issues facing our fish and seafood industry at this committee. As we look ahead, I want to thank the committee for your hard work and your assured commitment to Canadians.

I will now ask Mr. Muldoon to explain the estimates.

[The Chair, Conservative, Rodney Weston]

Mr. Muldoon, I believe you're going to do that at the beginning of the second hour. It was my understanding that you were going to do your presentation at the beginning.

[Marty Muldoon, Assistant Deputy Minister and Chief Financial Officer, Department of Fisheries and Oceans]

That's fine.

[The Chair, Conservative, Rodney Weston]

Thank you.

We'll go into questions at this point in time. We'll start off with a 10-minute round, with Mr. Chisholm.

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

Thank you very much, Mr. Chairman.

Minister, it's good to see you. I hope you will appreciate that we in this caucus have 10 minutes to ask you questions. We have many questions we would like to ask, so we're going to try to use our time quite judiciously, and with all respect I'd ask you to do the same, if you wouldn't mind.

I'm going to share my time, Mr. Chairman, with Mr. Cleary.

Minister, as you know there has been some considerable concern over proposed changes to the aquaculture regulations that deal with the release of toxic substances into the aquatic ecosystem. I'd like to ask you what your department has done to respond to these concerns and when can we expect these regulations to come into force.

[Gail Shea, Conservative, Egmont, PE]

Thank you for that question.

The aquaculture activities regulations provide more clarity and more consistency and transparency to aquaculture. They bring greater oversight, which includes the obligation to report all drug and pesticide use at aquaculture facilities. They also require immediate notification if there is any wild fish mortality.

They do not allow aquaculture operators to use any drugs they are currently not using; they do not approve any types of new drugs. These drugs are regulated by Health Canada. They do not allow for any new substance to be added to treatment regimes.

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

I take from this that the concerns of the 120 signatories to a letter who made representation to you last month didn't have any impact.

The second part of my question was about when those new regulations will come into force. I'm going to ask that somebody take note of that. I'm going to ask you another question, again trying to use my time wisely.

The second question I want to ask you has to do with DFO deciding to open the herring fishery both last year and this year in the territories of the Nuu-chah-nulth, Haida Gwaii, and the Heiltsuk first nations. In the face of and as a result of their opposition to the decision to open that fishery, there was some real conflict pending and much concern on the west coast over the way this was being handled. I wonder whether you could, please, give us some assurance that your department is working with those first nations—as we speak, in effect—to make sure this doesn't happen again next year.

[Gail Shea, Conservative, Egmont, PE]

I can assure you we are working with first nations.

DFO consults widely, not just with first nations but with all fishermen, when it comes to species management and developing fishing plans. At the end of the day our decision is guided mostly by science, so we share that science with the different groups. It's not just for herring; it's for every species. We do a tremendous amount of consultation, and obviously we don't always agree at the end of the day.

In this particular case, the science showed that we could open the fishery, and they gave us a number for the quota we could safely fish without hurting the growth of the stock. We actually took a more conservative approach and went to only half that amount of quota.

As I said, we don't always agree, but our decisions are based on science.

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

My concern, Minister, is that, for two years in a row, there either weren't the fish there or there ended up being a very serious potential of conflict. It was almost as if the first nations' recommendations were completely ignored. I urge you to please ensure that it doesn't happen again.

Mr. Chairman, I'll turn it over to Mr. Cleary.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you, Mr. Chisholm and Mr. Chair, and thank you to the minister.

I have two sets of questions and I'm going to get both sets of questions out before I ask you to answer, Ms. Minister.

I will reiterate, though, what Mr. Chisholm said about our having 10 minutes on this side to ask questions; that barely skims the surface in terms of the budget and the Coastal Fisheries Protection Act.

My first question has to do with northern shrimp and the science around the setting of this year's quota. In October 2014, at the 36th annual meeting of NAFO in Spain, it was recommended to place a moratorium on northern shrimp in the NAFO regulatory area of the Grand Banks, so everybody in my province, Newfoundland and Labrador, expected a huge cut in the quota for 2015. But what happened at the end of the day, as you know, Ms. Minister, is that the 2015 quota is left pretty much unchanged from 2014. What we heard in Newfoundland and Labrador was that there was new science. The reason the quota is static for 2015 is due to new science.

Can you comment on the new science and can you release that new science? What exactly is that science?

The second question has to do with northern shrimp, but with the LIFO policy, the last in, first out policy. I know that for the second year in a row a delegation was up in Newfoundland and Labrador—I believe they met with you yesterday, Ms. Minister—and the headlines back home in Newfoundland and Labrador have the minister apparently softening her stance on the LIFO policy, considering its economic impact on rural communities in Newfoundland and Labrador. Are you softening your stance?

So there are two questions there, Ms. Minister.

[Gail Shea, Conservative, Egmont, PE]

Thank you.

What I can tell you is that the science for 2015 was presented to the northern shrimp advisory committee on March 4, and consultations were held with them. The science was better than was originally expected.

What is really good news is that the price of shrimp is predicted to be up again, to as much as $1.40 a pound. I remember not that long ago, in my early days in this portfolio, when they were negotiating from 35 cents a pound, so it's quite significant.

On the LIFO policy—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

I'm sorry to interrupt, Ms. Minister, but most of your comment had to do with the price of shrimp. Can you release the science? Will your department release this new science that the decision to keep the quota static was based on?

[Gail Shea, Conservative, Egmont, PE]

I'll ask Trevor to respond to that.

[Trevor Swerdfager, Assistant Deputy Minister, Ecosystems and Oceans Science, Department of Fisheries and Oceans]

Thank you, Minister.

As the minister has indicated, at the northern shrimp advisory committee meeting we tabled all the science we have. All of the findings of our stock assessment and stock surveys were tabled at that time, and essentially what we presented was new data in the sense of a new year's worth of survey information. I suppose that's new information, as we just collected it, but other than that there's no new science that has generated this year's quota.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Can you table that science here, sir?

[Trevor Swerdfager]

Well, we've tabled already the northern...but we certainly could table that which we tabled at the advisory committee. I don't see a problem with that.

[Gail Shea, Conservative, Egmont, PE]

On the last part of the question, I did meet with the all-party committee yesterday on the northern shrimp. They had requested a meeting with me so that they could present a report on the economic impact of the LIFO policy. I've said nothing to them about the LIFO policy. I listened to them, asked some questions, received the report, and will be reviewing the report.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you.

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

Let me go back, Madam Minister, and ask you about the oil spill response. We just had an incident, of course, in English Bay. But I take you back to what a federal panel noted in 2013, that there are gaps in the government's oil spill response. It stated that a “timely response to a spill is a key factor in mitigating its effects”. Then in October 2014, it took 20 hours for a coast guard vessel to arrive on the scene off Haida Gwaii, and we've had this recent incident in English Bay. This affects not just the west coast but the east coast.

I wonder whether you would assure members of this committee that, in spite of the fact that there has been a reduction in the budget as it relates to this issue, your department is going to make sure work is being done to provide better and the actual world-class response time that you proclaim.

[Gail Shea, Conservative, Egmont, PE]

Well, I just have to correct you. There is no reduction in the budget. The reduction that you see in the budget is the result of a project that was completed, and that was the removal of the fuel from the Zalinski off the coast of British Columbia. That project was completed.

What we have done over the last three years is add $183 million to that budget to build our world-class system.

But I will ask the commissioner of the coast guard to respond to that.

[Jody Thomas, Commissioner, Canadian Coast Guard, Department of Fisheries and Oceans]

Thank you for the question.

As the minister noted, there has been no reduction to the coast guard environmental response budget, and there has been no reduction in our on-water response capacity in terms of response specialists.

With regard to the Simushir incident, in fact that was a very well-executed response. A freighter off Haida Gwaii, not in Canadian waters, not in the 12-mile zone, was adrift, and we kept it off the rocks. We kept it safe until an ocean-going tug—we're not tow operators—could arrive to tow it into Prince Rupert. The coast guard did exactly what it was expected to do. It arrived, assessed the situation, and saved that vessel from the rocks through some quite brilliant seamanship, in fact in very difficult weather conditions.

With regard to the Marathassa, the coast guard was on the scene within 20 minutes of a notification of sheen on the water. It worked from five o'clock on Wednesday evening Pacific Time, well into the day, 24-hours straight, to get that vessel identified, to have the master admit that it was his vessel, to skim the pollutant off the water, and then to boom the ship, and it continued that work. Today we expect the Marathassa to leave Vancouver harbour. I have been quite vocal that it was quite an extraordinary response by the Canadian Coast Guard, and I still believe that it was.

[The Chair, Conservative, Rodney Weston]

Thank you very much.

Ms. Davidson.

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

Thanks very much, Mr. Chair.

Welcome Minister and officials. It's nice to see you again.

I have a couple of questions—and, oh, before I start, I'm going to be sharing my time with Mr. Weston. I'm going to ask both questions, and then we'll turn it over to Mr. Weston after the answers.

I see in your brief that we have an increase of $283.9 million in these estimates, and that one of the reasons is the funding for the renewal of the Canadian Coast Guard fleet, both vessels and helicopters. I'm interested in that. Could someone please talk about the significant funding increase, and tell us what the vessels are, what we may have delivered, what we're going to have delivered, and where they may be built?

My second question is related to species at risk. When I look at the main estimates, it looks as though there is a decrease in funding, but I'm wondering if that's due to a sunsetting of a program. Could somebody address that, and also whether there are other species being examined that would be added to the list, or what is the process to do that?

Thank you.

[Gail Shea, Conservative, Egmont, PE]

The difference that you see for the species at risk is because it was a sunsetter, but that has been renewed in the budget. It will be $75 million over three years to carry out the species at risk program, and most of that of course is with Environment Canada.

On the fleet renewal, in the past while we have accepted nine new midshore patrol vessels. We have accepted two hovercrafts. We have five new lifeboats; these are 47-foot lifeboats. There are three other specialty vessels, three nearshore vessels, and of course many small boats and barges.

As you're aware, the Prime Minister made an announcement of more than $5 billion in federal government assets, so part of that funding goes to procuring more vessels for the Canadian Coast Guard.