Evidence of meeting #130 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 licence.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Chair  Mr. Ken McDonald (Avalon, Lib.)
Modestus Nobels  Fisher, As an Individual
David MacKay  Fisher, As an Individual
Joy Thorkelson  President, United Fishermen and Allied Workers' Union – Unifor
Dan Edwards  Fisher, As an Individual
Peter de Greef  Fisher, As an Individual
Colin Fraser  West Nova, Lib.
Duncan Cameron  Fisher, As an Individual
Fraser MacDonald  Fisher, As an Individual
Ross Antilla  Fisher, As an Individual
Jennifer Silver  Associate Professor, University of Guelph, As an Individual

4:20 p.m.

Peter de Greef Fisher, As an Individual

Good afternoon, honourable members of the standing committee. Thank you for this opportunity to speak about west coast fisheries. Anyone who knows my family will be shocked if I can fit this into seven minutes.

My name is Peter de Greef. I am an active commercial fisherman. I am a partner with my uncle in an independent fishing vessel, the Optimist No. 1, which annually harvests halibut, sablefish and albacore tuna and is also licensed for salmon and rockfish. Our operation has three generations of family involved. Over the past 35 years, I have trolled for salmon and tuna, longlined for halibut and sablefish, gillnetted for roe herring and packed sea urchins and sea cucumber.

For the past 12 years since becoming a vessel owner and licence owner, I have volunteered my time on various boards, committees and associations. Currently, I am the vice-president of the B.C. Tuna Fishermen's Association and a director of the Pacific Halibut Management Association. I sit on the Tuna Advisory Board and on the offshore Pacific region area of interest advisory committee. Most recently, I was appointed as a Canadian commissioner to the International Pacific Halibut Commission.

I speak of these only to show my experience. I am not here representing any entity other than myself as an active independent fisherman.

What my family's independent fishing enterprise requires to be successful is stable access to fish, access to fishing grounds, access to capital, access to competitive markets and access to a fair share of profits. My crew and I also need a safe working environment.

To me, stable access to fish means a stable and sustainable stock and the ability to harvest that stock in a predictable manner. With this in mind, ITQs perform well, especially in combination with our world-renowned and sophisticated integrated groundfish management system, which allows for very little waste of bycatch. Fishers are excellent at targeting species they are after, but not so great at avoiding bycatch. This system holds them accountable and changes behaviour. Transferability is essential for this to work properly.

Access to fishing grounds is simple: the ability to harvest fish where the fish are or could be. Marine protected areas, if not properly implemented, threaten this access.

Access to capital is an issue as well. Licences and quota are extremely expensive. Presently, most fishers make arrangements with processors, large quota holders, family or lending institutions. Processor loans generally come at the cost of independence. Lending institutions will loan on vessels, but very few lend on licences and quota. Those that do need a minimum 50% down payment. A family connection to quota and capital has been invaluable to me, but not everyone has that opportunity.

Access to competitive markets that buy and pay well is also critical. As far as I can see, buyers have done an excellent job in developing new markets in some fisheries and are challenged in others. However, I must note that with so many fishers tied to companies it can be a challenge for independent fishers to get a competitive price.

In order to keep an experienced and dedicated crew and to ensure a vessel is safely maintained, it is important to have a fair share of the profits. Our present family operation has a fair share arrangement. This evolved from my uncle wanting me to continue running his boat and fish his quotas and from my needing some security if I were to continue to fish. In the past, I had crewed in a herring roe lease operation. It never went very well, so I was skeptical about getting into the leasing aspect of fisheries.

The arrangement with my uncle went well, and we decided to form a partnership, buy out my father's boat and gain access to his quotas. It has worked well over the years for crew, vessel and quota holders, as everyone is pulling in the same direction. There are challenges, but mostly due to outside pressures.

The little bit of quota I bought was bought a number of years ago before the values had spiked in groundfish. For me to buy groundfish quota now and maintain the fair share structure would be next to impossible. First, the prices are so high for quota that the returns would not be enough to cover the interest rates.

The truth is there are still a lot of fair share arrangements out there, but for how long?

Another aspect to consider is safety. I was appalled to read that commercial fishing is the deadliest industry, as per a recent analysis in The Globe and Mail. The idea that being a fisher is 14 times more dangerous than being a police officer was shocking. I would attribute a considerable amount of this to socio-economic factors. When there is no money to attract long-term quality crew or to invest in vessel maintenance and new boats, any issues that arise are compounded. Inexperienced crew and vessel breakdown incidents lead to increased deaths, in my opinion.

The ITQ system has done an excellent job delivering on its conservation objectives, but unfortunately, no socio-economic objectives were ever stated, so it has failed to deliver. That does not mean it cannot deliver. Similar to groundfish integration, if objectives are stated, B.C. fishers will deliver. A made-in-B.C. solution developed by the industry stakeholders through our advisory processes with specific socio-economic objectives is the best way forward.

Each fishery has its own challenges so it is best to keep consulting on a fishery-by-fishery basis. One grassroots initiative is the shared benefit and risk proposal. It has gained support from a large number of skippers, crew, vessel owners and licensing quota owners. It could be weighed against other proposals to determine which works best for each fishery.

In summary, the west coast is unique, and although the fishing industry currently lacks in supporting specific socio-economic goals, good things are happening. To foster change properly, a process with the stated conservation and socio-economic objectives should be developed for engagement at the DFO advisory board level for a number of fisheries on the west coast.

4:25 p.m.

Mr. Ken McDonald (Avalon, Lib.)

The Chair

Thank you. That was perfect. You were barely over the seven minutes, so you were the best of everyone.

We'll now go to questions. I will remind members that I'll have to be strict on the time. If I say your time is up, your time is up.

For the first seven minutes, we'll go to the government side.

Mr. Hardie.

4:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Thank you very much, Mr. Chair.

Thank you, everybody, for being here either in person or by video conference.

Mr. de Greef, you say you have this fair sharing agreement due to the family compact, if you will. What is the share quota owner versus processor versus fisher?

4:25 p.m.

Fisher, As an Individual

Peter de Greef

We started at 50% for quota, 50% for vessel and crew. Market conditions influenced that a few years ago because the lease prices were so high, so we are now 60% to quota and 40% to crew. The vessel took a smaller share so the crew would remain whole.

4:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

We've heard the process of getting your hands on quota involves paying for the quota up front. In other words, before you go out to fish, you have to locate and pay for quota.

Mr. MacKay, is that your experience?

4:25 p.m.

Fisher, As an Individual

David MacKay

Yes, it's a bit of halibut quota and usually as soon as the handshake's done, the cheque's in the hands of the person who owns the licence to the quota. Sometimes that cheque's written by a company, sometimes by the independent fishermen themselves, but yes, the risk is right up front.

4:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

The risk is not to the quota owner; they get their money up front.

4:25 p.m.

Fisher, As an Individual

David MacKay

Exactly, they get 75%.

4:25 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Okay.

Dan, if you're looking for quota, how do you find it?

4:30 p.m.

Fisher, As an Individual

Dan Edwards

There is no transparent quota transfer mechanism available. There have been a number of attempts to try to build one privately. It hasn't worked.

Quite often either people know somebody who knows somebody who has quota. That's how it works, or fishing processing companies would actively search it out and bid against each other to make sure they get enough quota for the year.

A lot of it's done for our vessel through the processing company because we don't have those kinds of connections and access. We don't have the deep pockets to lease that quota up front either. There's a real need to have a transparent quota registry in this process.

4:30 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

I'll go to you, Mr. Nobels. I was going to ask you that question.

How do you know who has quota for sale, and how do you actually get your hands on it? What's the process?

4:30 p.m.

Fisher, As an Individual

Modestus Nobels

It's been my experience that it's usually carried out by the company you're fishing with unless you've made some prior arrangement with an individual. It's very hard to know who has quota available unless you're operating through a processing company.

4:30 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

When you think of the processing company and where they're positioned on this, they help you get the quota, but of course then you're obliged to fish for them and you get paid what they're prepared to pay when you land the fish. It almost sounds like that old Tennessee Ernie Ford song, Sixteen Tons; you're sold to the company store kind of thing.

The upfront payment of the amount to the quota owner, regardless of what the final value of the fish you land is going to be, seems to really imbalance the risk-reward equation here.

Ms. Thorkelson, maybe you could speak to that.

4:30 p.m.

President, United Fishermen and Allied Workers' Union – Unifor

Joy Thorkelson

Well, the process of control is key, and that's why processors like this system.

When I talked to one of the smaller processors, the manager said that he personally hates it but it's good for the company. That's how they guarantee that they get deliveries for the company. They will take quota and release it, and that assures they will get cash for whatever their needs are.

4:30 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

The processor would have interest in getting quota, because then they're assured that they're going to get product into their processing plant.

Is it a situation, though, where the person doing the fishing basically gets the word from the processor, “Okay, we've got you a quota and this is what it's going to cost you”? Or is there any kind of transparency, so that the fisher at least knows what the quota owner has asked for that quota?

4:30 p.m.

President, United Fishermen and Allied Workers' Union – Unifor

Joy Thorkelson

Oh, I don't think so. The fishermen I've spoken with go to the processing company. They don't really know whose quota they have; they just get it through the processing company.

We are dealing with a company on salmon quotas right now, and they treat their quotas as though they were an enterprise allocation. They take all of their quotas, put them in a big pot and then just shuffle them out as the fishery goes on.

Fishermen are indentured to the company. They also pay a promised amount up front that comes off their settlement. These guys are indentured to the company, so they're not going to just run off. But a company will take their quota and just deal it out.

4:30 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

Mr. Edwards, when you look at a fair share agreement, would you be looking at basically a regulated percentage of who gets what, or would you be also factoring in the final cost of the fish as charged by the fisher either when they land it or by the processor when they sell it?

Lead us through what a fair share would look like.

4:30 p.m.

Fisher, As an Individual

Dan Edwards

I've spent a lot of years in British Columbia dealing with interest-based negotiation frameworks with several fleets.

Basically I would say that you would use a process like that, and that kind of process is based on interest-based negotiations and it has to be transparent. You have to know the cost of the vessel. You have to know what the investor has in its investment around the cost to lend money, or to use money to get quota. You put it all on the table and say, “Okay, what do we need as a vessel?”

We negotiate what's needed out of what we think.... It's a percentage.

4:35 p.m.

Liberal

Ken Hardie Liberal Fleetwood—Port Kells, BC

But how do you know until you land the fish?

4:35 p.m.

Fisher, As an Individual

Dan Edwards

Well, you don't. You do it on a percentage basis.

What's happening right now is that people are paying up front—$5 or $6 a pound—and the processor is going to get caught in a bind just as much as the fishermen can, because the market can fluctuate. They have no real knowledge of that.

We're trying to deal with it as a negotiated sharing arrangement, as a percentage of landed value, prior to the season, which won't require that kind of arrangement. As the fish is sold, then the situation is worked through.

They do that in Newfoundland. I spoke to Dave Decker of the FFAW. This year, using that kind of process and more of a collective bargaining process, the halibut fishermen at the dock got $12.75 a pound through the enterprise. I get about $1.50.

4:35 p.m.

Mr. Ken McDonald (Avalon, Lib.)

The Chair

Thank you for that.

We'll go now to the Conservative side. Mr. Doherty, you have seven minutes or less, please.

4:35 p.m.

Conservative

Todd Doherty Conservative Cariboo—Prince George, BC

Thank you, Mr. Chair.

I want to thank our guests for being here today. Mr. Edwards and all of our guests, thank you for your heartfelt testimony. This is one we've had a lot of discussion about around the table. I appreciate those who have travelled a great distance to be here today.

I'll just throw this out, and feel free, for any of our guests, because it's all relevant to you personally.... In your view—I mean “your” collectively—who benefits the most from the ITQ system?

Go ahead, Mr. de Greef.

4:35 p.m.

Fisher, As an Individual

Peter de Greef

I would say the stock of fish.

4:35 p.m.

Conservative

Todd Doherty Conservative Cariboo—Prince George, BC

The stock of fish, right, so it's a fisheries management plan—really, that's what it is.

4:35 p.m.

Fisher, As an Individual

Peter de Greef

It's a management tool.