Evidence of meeting #129 for Fisheries and Oceans in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was quota.
A recording is available from Parliament.
4:20 p.m.
General Manager, Grand Hale Marine Products Co., Ltd
Correct.
In most cases we don't require them to fish for us. It's really up to them who they want to fish for. If we don't pay what they think they're worth, they may move. That's fine.
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Ms. Burridge, none of your members help fishers get quota?
4:25 p.m.
Executive Director, BC Seafood Alliance
I'm sure they do, but I don't. That's not part of my job.
4:25 p.m.
Liberal
4:25 p.m.
Executive Director, BC Seafood Alliance
There are brokers who help. Everyone talks to everyone, particularly in integrated groundfish. I think there's a very decent sense of what's available and what it costs.
Chris, did you want to fill in on that?
4:25 p.m.
Chris Sporer Executive Manager, Pacific Halibut Management Association, BC Seafood Alliance
I think on groundfish integration there are some fishermen who are trading among themselves. Some fishermen have set up their own groups to trade, so there is lots of word of mouth within the industry.
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Then how is it that quota owners are demanding 70% or 80% of the value? If there was true competition among the quota owners wanting to rent out their quota, you would think that would get bargained down. Why is that not the case?
4:25 p.m.
Executive Manager, Pacific Halibut Management Association, BC Seafood Alliance
I think that in terms of the quota holders bargaining down, it's basically two parties going into a transaction. People have different expectations on prices.
One thing I would note is there has been recognition in the industry that things have reached an imbalance. I know for our fishery we have discussed it. We've taken it to our advisory body and we've set up a process to start looking at how those benefits are being shared in the industry.
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
I'd be interested, subsequent to these hearings, if you could provide us with any further background on the things you're thinking about because that may help inform us as we come up with recommendations.
4:25 p.m.
Executive Director, BC Seafood Alliance
Definitely. I think you'll probably hear more of those ideas, perhaps tomorrow, but a number of fisheries are looking quite hard at the kinds of arrangements that are in place, which are very varied. Some certainly seem unfair. I've seen others that look very straightforward and are clearly mutually beneficial.
The problem is—
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Ms. Burridge, if I could, I have lots of questions and little time here.
You mentioned something that has also been part of our offline discussions in the meetings that we've had prior to this, and that is the sharing of risks and benefits. It would appear that the person with the least risk is the quota owner and the person with the most risk is the man or woman fishing out on the water. They have all the risk, both on price and on the physical activity of catching the fish, whereas the quota owner is sitting back and sopping it up.
4:25 p.m.
Executive Director, BC Seafood Alliance
I don't think that's entirely true, but clearly there is a risk from being a fisherman. It's a dangerous occupation—
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
All right. And there's no risk for the guy who's getting 70% of the value—
4:25 p.m.
Executive Director, BC Seafood Alliance
There's no question of that. But there's also risk in providing the capital that the operator needs. Lease values go up and down.
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Yes, but the quota owner's not providing the capital. Maybe some of the processors are.
Phil, I'll direct this to you. Canfisco, as you say, is often singled out because it is a really big player. What is the arrangement that you have? Do you have a lot of co-owned boats and licences fishing for Canfisco?
4:25 p.m.
Vice-President, Fisheries and Corporate Affairs, Canadian Fishing Company
Yes, we do. In a year like this for salmon, we had 46 boats fishing for us. Nineteen were 100% independent. They could go anywhere they wanted. We had 13 joint venture boats. Pretty well all of them were fifty-fifty boats; I think there was one that was less. And we had 14 company boats. So, yes, we have a diverse fleet.
4:25 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Canfisco is a good example of an organization that is a dominant player in the market. Is there any economic analysis that gets to the point that once somebody reaches a certain scale...? At what point do you become the price setters in terms of what the fishers get at the dock?
4:25 p.m.
Vice-President, Fisheries and Corporate Affairs, Canadian Fishing Company
We're not even close to the price setter. You just have to look. We compete directly against Alaska. In the last four years, with B.C.'s share of Alaska salmon—this is just salmon—we've been at 2%, 6%, 1% and 4%. That's the amount of fish that we land versus Alaska, so they're setting the price. It doesn't matter how you shake it; they are setting the price. We are price followers.
What we've always done is sell as much as we can of our salmon fresh because that's the highest value market.
4:30 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
What's the spread between what you're paying at the dockside to the fisher and what you're getting for this processed fish that's hitting the white linen somewhere?
4:30 p.m.
Vice-President, Fisheries and Corporate Affairs, Canadian Fishing Company
There isn't one easy answer for that. It changes dramatically. First of all, if we're doing filets, we're only getting 40% of the usable quantity out of the fish. If we take that down and start thinking of what we actually sell versus that, we could be paying $2.20 to a fisherman and selling it for anywhere in the $3.20 to $3.60 range. But every pound of number two fish you get comes off that, so 5% of number two drops it dramatically. That's why it matters. Chum fisheries... we get the roe. That adds a good portion to it. It's not a set formula.
4:30 p.m.
Mr. Ken McDonald (Avalon, Lib.)
Thank you.
We will now go to the Conservative side for seven minutes or less.
Mr. Arnold.
4:30 p.m.
Conservative
Mel Arnold Conservative North Okanagan—Shuswap, BC
Thank you, Mr. Chair, and thanks to all of you for being here today.
I'd like to take a minute to recognize the passing of our Auditor General, Michael Ferguson. His department has offered some good assessments of this department in the past. We'll miss his input.
A few things have come up, both in our first meeting and again today. One word that twigs my attention is “overcapacity”. I have to ask why. Can I get one of you from each sector to describe the key things that have resulted in overcapacity?
Phil, would you like to start?
4:30 p.m.
Vice-President, Fisheries and Corporate Affairs, Canadian Fishing Company
Sure. I think that initially, as soon as you went to limited licensing, there were too many people asking for those licences. You heard Ms. Burridge talk about it. They just issued too many licences right off the bat. Also, then, we've seen conservation measures put in place that reduced our harvest. When you start reducing the harvest, you end up with overcapacity.
I understand that it's a tough thing for everybody to look at, but it has happened, and we rationalized on the west coast. Governments made us do it to ourselves. We ate our young.
4:30 p.m.
Conservative
Mel Arnold Conservative North Okanagan—Shuswap, BC
Could I ask each of you to put it into two or three key words, into bullet points? Is it declining stock, oversubscription or efficiencies in the fleet? Have I named all of them?