Fisheries Committee on Feb. 5th, 2019

[The Chair, Mr. Ken McDonald (Avalon, Lib.)]

Good afternoon, everyone.

Mr. Donnelly.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Mr. Chair, before we get going, I want to ask a question of the chair.

Bill S-203 passed, on division, on Friday. What is your understanding of when it will come to committee?

[The Chair]

At this point, I haven't been told when it will come to committee. I don't know if it will be this week, next week, the week after. I'm hoping to hear soon as to what the intentions are. I believe there are a couple of different processes for the way it can go. I'm sure that if it gets referred to committee, we will have to deal with it because, as we know, that takes priority.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Absolutely. It's just that it's Tuesday, and we have a full agenda, a full schedule. If you wouldn't mind looking into it.... Hopefully, it will be this week that it comes to committee.

[The Chair]

We have asked the question already.

[Fin Donnelly, NDP, Port Moody—Coquitlam, BC]

Thank you, Mr. Chair.

[The Chair]

Mr. Doherty.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Chair, what I have to say is along the same lines as my colleague Mr. Donnelly's question. We're going to start seeing this one. I imagine there's another one that's probably going to come before us shortly thereafter as well, or in the coming weeks. We need to know as soon as possible so that we can arrange witnesses for those.

[The Chair]

As soon as we hear something, we'll inform the committee members as to when it is coming.

Thank you for raising that.

Pursuant to Standing Order 108(2), we are studying the regulation of the west coast fisheries.

Today, we have a number of witnesses by video conference and here in person.

By video conference, we have David MacKay, fisherman, and Des Nobels, fisherman. Representing the United Fishermen and Allied Workers' Union-Unifor, we have Joy Thorkelson.

Here in person, we have Mr. Dan Edwards, fisherman, and Mr. Peter de Greef, fisherman.

Welcome, everyone, to the committee. You each have seven minutes to give a statement.

We'll start with those appearing by video conference first. We like to get those done in case there's an issue with the screen or bringing it forward for everyone to hear and see.

We'll start with Mr. David MacKay.

You have seven minutes or less.

Okay, we have no....

We'll move to Des.

Des, if you could start, please.

[Modestus Nobels, Fisher, As an Individual]

My name is Modestus Nobels. I'm a retired commercial fisherman. I retired in 2007 from fishing actively.

I live in the small community of Dodge Cove just outside of Prince Rupert, which was a fishing community. We built the northern fleet out of that community. Over 1,000 vessels were launched from that community for the fishery.

I fished for almost three decades and have worked with and for commercial fishermen in a number of advisory processes, and in some of the planning structures that have taken place on the Pacific coast.

I'm also an elected official with the North Coast Regional District. I sit on the Groundfish Development Authority, and I chair the Coastal Community Network.

I would like to thank the committee for providing us this opportunity to provide you with some testimony and some of our feelings around regulatory issues and licensing on the west coast. I'm extremely grateful to the committee for finally coming to take a look at this. We've been asking for a number of years that this be reviewed. It's had significant impacts on our communities and those that are fishing in the industry at present.

The present regulatory structure that we're working under here, the ITQ, individual transferable quota structure, has in my mind been extremely detrimental to both those that are actively fishing in the region and to those communities that have been involved over the years in the fishery itself. We've seen an immense downturn in our communities' infrastructures and a lot of the people that were once fishing are no longer fishing from our communities. Yet, we have an immense resource on our doorsteps that we are not able to partake in.

Quotas in and of themselves are not a problem. They are another tool with which to manage the fishery. It's the transferability of those quotas that creates much of the issue that we're dealing with here. In that transferability piece, we've created a commodity out of the licensing itself. In many cases, it's been driven it out of the hands of working fishermen into the hands of investors and corporate interests. In the end, it doesn't benefit our communities to a great degree. In many cases, those entities are coalescing and collecting their enterprises in single centres.

Our small communities, which have always relied on these fisheries as part of their economic base, have seen significant downturns in their ability to maintain their infrastructures and populations. We've seen fishermen leaving our communities over the last few decades and not seen them return. We have young people that would like to enter the fishery, but under the present structure that exists, they are unable to do that. The cost is so prohibitive that many of them would be looking at indentureship for the rest of their lives to actually enter many of the fisheries that we presently have. That is an extreme concern for me and many people who live in the communities that I work with.

There are ways of addressing this.

[Technical difficulty—Editor]

[The Chair]

He's gone completely. We are experiencing technical difficulties. Please stand by.

[David MacKay, Fisher, As an Individual]

Is that his seven minutes?

[The Chair]

Mr. MacKay, do you want to try and see if we can hear you?

[David MacKay]

Can you hear me now?

[The Chair]

Yes. Do you want to start and go through your statement? Then I'll get back to Mr. Nobels when we get reconnected.

Go ahead when you're ready.

[David MacKay]

That sounds good, okay.

I'm David MacKay, and I'm a fifth-generation commercial fish harvester from the coastal community of Pender Harbour, where I was born and raised. I participate in the roe herring gillnet fishery and the northern salmon troll and gillnet fishery.

I have been back in the industry for about six years now, and it's been difficult. I think one of the big notes I want to hit here does touch on ITQs and I can talk about that, too, but one of the notes I want to hit here is about married licences.

Here's just a little history that you guys may know. When we went to area licensing, licences for salmon were separated into three troll licences, three areas of gillnet, and then two seine areas. Vessel owners and operators who wanted to fish all the areas had to buy those licences. Instead of owning one before, they had to buy those area licences. Our department has made it impossible to separate them, so we call them married licences. I'd like to see the married licences disappear. I think every fisherman I've talked to has said the exact same thing, and that's my key note here that I want to speak on.

When we separate licences, we allow an individual licence to be purchased by a young harvester. What's happening right now is that my father and lots of other guys are getting ready to retire from the industry, and they have two, three or more licences and they can't sell that as a package to anyone. So it ends up going through PICFI or they just hold on to it, and they're in their old age. Being able to unmarry them would help them divest in the industry; it would help somebody young get into the industry. It's a simple solution, and it's being done through PICFI. Once the licences go through PICFI, they are being broken up, so what is the problem? Why are we not doing that? That's my biggest concern.

I just heard another instance about the troll retirement program. I think I have a couple of minutes here, but I'll quickly speak on this. The Pacific Salmon Treaty is a voluntary salmon troll licence retirement program—it's a real mouthful. If I had a troll licence I'd just married to my boat and I wanted to divest in the industry and I wanted to get rid of that—just that one licence—I couldn't. However, through this program I can voluntarily retire it through basically a round process. I think we've retired more than 100 licences on our coast in the three different troll areas—106, I believe, or around there. There were 400 applications since October 31, 2016. Those 106 licences have disappeared off our coast completely; they retired. That's 106 boats, or 106 jobs times the crew. This is the problem. It seems like a really simple solution, so I just wanted to touch on that. I'm sure we'll have some questions on it later.

That's my intro. Thank you again to the committee for having us. I'll pass on the microphone.

[The Chair]

Thank you for that.

Des, we'll try again to see if you're audible, and we can cue up the rest of what you have for your testimony.

[Modestus Nobels]

Thank you, Mr. Chair.

Can you hear me?

[The Chair]

Yes.

[Modestus Nobels]

Great. I'll pick up where I left off. I was starting to discuss the individual transferable quota structure and how that's impacted communities and new entrant fishermen in attempting to get into the fishery.

The ITQ structure's transferability has created a commodity out of the licensing, and as such has created a proprietary right. That has brought in people who are not engaged in the fishery but are looking to invest and are buying up licences as investment properties, driving the prices up to the point where those who are engaged in the fisheries are finding it very hard to actually access that licensing. In many cases, once that licensing is purchased, it's held.

We've noted over the last couple of years in the groundfish development authority that we are seeing quotas transferred over to foreign interests. We are no longer seeing Canadians purchase these licences. We are seeing them being bought by interests offshore. This is really beginning to concern many of us who are engaged in the industry, because once those quotas are divested, there is little likelihood in actually getting them back. It's a tough slog. As well, it drives the prices up to the point where young fishermen who are looking to access and enter the fishery are unable to. The cost is so prohibitive. That is something that should never be the case. The licensing should not outweigh the value of the fish that you catch with that licence.

As such, I believe that the transferability should be removed from that portion of the licensing regime so that we have a licence that remains with the fisherman and remains in the communities in some fashion. As I was saying, there are a number of ways to address this, I believe. One of them would be through an owner-operator principle and fleet separation. Both of these together would enable fishermen to maintain their position within the industry and limit the access of those who are not actually engaged in the fishery. I'd very much like to see the fishery back in the hands of those active harvesters who are out there and with community involvement through a co-management [Technical difficulty—Editor].

There are several reports I would like to bring to the attention of the committee that I think would be of great value to you to review and understand. The first of these is a report put out by Ecotrust Canada called “Understanding Values in Canada's North Pacific”. This takes a very good look at the tangible and intangible values that exist in the fishery for communities and a region.

The present structure really takes it out of the hands of communities and takes the people out of the communities as well. You have a great loss there. The fabric of many of our communities is built around the fishery structure. It's the co-operative manner that exists within the fisheries that brings our communities together and builds resilient and sustainable communities. We're losing that. We're seeing our communities' fabric dissolve, break apart. We no longer see the connectivity that existed between our communities previously. That is a grave concern for me and others. The owner-operator principle would again maintain that licensing within active fishing hands. Through fleet separation we would ensure that corporate interests are not holding licences and utilizing those in various ways to maintain access or opportunity, both of which tend to be detrimental for both communities and active, working fishermen.

Another report I'd like to suggest to you is one that was just released called “Just Transactions, Just Transitions”. It takes a very close look at how the impacts of ITQs have played out over the last few years within the Pacific region and the impacts on our communities from that regime.

As well, I'd like to draw your attention to some work that was done by Dr. Evelyn Pinkerton some years back called ”Fisheries that Work”. It's a very interesting document that provides a number of opportunities outside of the ITQ structure which addressed some of the issues that the department was addressing through the ITQs, but really in the end did not in my mind.

As well, there are a number of instances already actively functioning around us. We have in Canada itself the east coast fishery, which has become a very community-based fishery, with an owner-operator principle and a very strict fleet separation regime that ensures that active fishermen are the beneficiaries of the harvested product, as well as the communities that benefit from those fishermen who live in those communities. I think that would be an extremely important piece to look at and understand.

We also have a fishery north of us here in Alaska that we've looked to for a number of years for opportunities that we could develop here. They also have a very strict owner-operator principle and fleet separation with a real mind to community-based fisheries management structures that involve communities and fishermen locally. This very strong stewardship component is driven by that, as well as by the fishers who live in those regions. They have a real feeling for the fish and for the place and they understand it. You don't see that in absentee landlords in the ITQ structures, for the most part. We have a lot of people who are not engaged in a fishery holding these quotas as their revenue generator, and that is costing many of our fishermen upwards of 70% of the actual harvested value.

If you take a look at what's happening in Alaska and on the east coast of Canada in revenue returned to fish harvesters, it outstrips what we're seeing in British Columbia where we're seeing a reduction.

[The Chair]

We've gone way over time so I have to cut you off. Hopefully anything you haven't said in your testimony will come out in the questioning as we go forward.

Next we'll go to Ms. Thorkelson with the United Fishermen and Allied Workers' Union, for seven minutes or less.

[Joy Thorkelson, President, United Fishermen and Allied Workers' Union – Unifor]

Thank you.

I'm the president of the United Fishermen and Allied Workers' Union, which is also known as UFAW-Unifor. Our union represents some, although not all, fishermen in all the wild fisheries in British Columbia.

Our membership is made up of active fishermen only. Those of you who are from Newfoundland and Labrador will know of the FFAW, the fishing union in that province. We are both Unifor and therefore the FFAW is our sister union. We both represent fishermen and plant workers at opposite ends of the country. That is where the similarities end.

Our fishermen's earnings are trending down while the FFAW fishermen's incomes are increasing. Part of that difference is the added costs our fishermen bear. Some 80% of the landed value in ITQ fisheries is taken out of B.C. fishermen's pockets; that income remains in the pockets of our brother and sister fish harvesters on the east coast. A community difference is also evident: B.C. rural coastal communities' processing capacity is diminishing, while in Atlantic Canada, significant processing capacity resides in rural areas.

I have worked for the union for 40 years and I've seen many changes in my career. I'm old. In fact, the majority of people in the B.C. fishing industry are old. The industry was very good to participants and we were able to make a great living, so that's why we all stayed. Now it's too late to leave with economic dignity.

We have a crisis. Old people want out but cannot afford to quit and young people want in but cannot afford to buy in. When I was young, most skippers owned their own licences and vessels. ln 1985, 20,000 fishermen took out personal fishing licences. By 2015, we had lost 15,000 fishermen and only 5,700 were left in British Columbia. The 2015 figure is the latest one published by DFO.

ln 1969, corporate ownership of the fleet was at 13.2%. Fifteen years later, processor and investor ownership of the seine licences, for example, had increased to 40%, and 20 years later, it was 55%. ln 1993, 39% of herring roe licences were owned by processors and investors. By 2012, processor and investor ownership increased to 51%.

ln 1993, one processor owned 27% of the processor-held herring roe seine licences. Now, due to corporate consolidation, this processor, 20 years later, holds 95% of the processor-owned landings. The influence of processors on individual active fishermen can't only be assessed by these ownership numbers. lt also has to be viewed through the lens of processor control.

The major salmon processor owns 37 licences that are attached to 20 non-fishing vessels—vessels that don't really exist, in many cases. They are called “stick boats” because they could be floating sticks. The company can and does lease these licences off their vessels to salmon vessels that need a licence to fish in an additional area.

ln a salmon ITQ fishery, this company can transfer the quota attached to these non-fishing licences to another vessel that is fishing, thereby stacking quota onto this boat. It can catch its own fish and the quota from the stick boat. This binds fishermen to the company. If they want future increased quota opportunities, thereby increasing their income, they will have to continue to fish for this processor. This not only happens on salmon, but it is worse on roe herring, with DFO rules requiring stacking of a minimum number of gillnet licences in order to fish. I can remember a couple of years when active fishermen, forced by DFO to lease licences, lost money because the lease price exceeded the value of the roe herring.

The union did a survey in 2016 of the salmon fleet. Out of 234 respondents, 84% did not think they would benefit from ITQs; 89% thought their costs would go up under an ITQ system and 86% didn't want ITQs in their fishing areas.

ln 2018, two years later, we conducted another study. We expanded it to include all fishermen and all fisheries, and we asked similar questions: “Do you think west coast licensing policy should benefit active fishermen?” Of course 94% polled yes; 91% supported owner-operator policy created to meet the needs of B.C. fishermen; 88% supported a fleet separation policy in British Columbia, and 66% thought the consequence of no change to licensing policy would be that rural coastal communities would continue to decline.

I have heard the RDG list the Pacific region's priorities: conservation, compliance, sustainability and economic viability, equitable distribution of benefits, and data collection. I heard Ken Hardie later on list the DFO's target, but he must have been mistaken, because he included sustainable livelihoods, regional economic benefits and sustainable communities. Those may be Atlantic coast targets, but they're not Pacific region targets, I can assure you.

In the Pacific region DFO separates licence-holders from fishermen. They want fishermen to self-adjust to changing times and to pay for the management of their fishery. There are no social objectives to have sustainable livelihoods for fishermen or regional economic benefits or sustainable communities. These are not in the Pacific region's lexicon.

The real truth is that DFO Pacific is consulting with fewer and fewer active fishermen. They consult with quota owners and licence-holders, who increasingly do not fish. Last spring I and our staff did a six-week coast-wide tour. We visited 21 communities. We walked onto over 800 boats asking fishermen what they wanted changed, if anything, in their fishery. Only a few were satisfied with how things are now. Everyone else wanted changes that would benefit working fishermen.

Not all agreed on the solution, but most agreed on the problem. Money is being siphoned out of working fishermen's catch and into the pockets of those who don't fish. Processors are gaining control of almost every fisherman through their control of quota movement.

Fishermen on the Pacific coast believe it is time for a change. We recommend that the minister hold an external licensing review in the Pacific region with the goal of creating viable commercial fleets and coastal communities, including first nations communities, that include as the foundation the basic principle that the fishery is a public resource and belongs to all Canadians. Licences provide privileged access to the common property resource. There should be fleet separation and owner-operator principles. The benefits of the fishery should go to fish harvesters and their communities, not to those whose involvement is in owning or controlling licences and/or quota. Licensing policies should encourage intergenerational succession, and adjacency principles should govern processing so that the value flowing from our fisheries, including processing, remains in local communities.

We support the social and economic goals in Bill C-26 for active fishermen, fish harvesters and their communities.

That is my presentation.

[The Chair]

Thank you, Ms. Thorkelson.

We'll go now to Mr. Dan Edwards, for seven minutes or less, please.

[Dan Edwards, Fisher, As an Individual]

Thank you for allowing me to be a witness at the parliamentary fisheries committee on this critically important topic. I'm appearing before you as an independent small boat owner-operator from British Columbia.

You are going to hear from a number of young harvesters in the next couple of days; I am not one of them. I am 68 years old. I have been working on the decks of small-boat fishing vessels in B.C. since I was about seven years old, although my father, if he were still alive, would probably question how much work I actually did back in those days.

I have fished groundfish every year for the last 20 years with my son. In 2018 I spent two trips fishing halibut with my brother and 10 more trips on our family longline vessel that my son has skippered for the last 20 years, and for the last 10 years fishing under the integrated groundfish regime that we helped to develop in British Columbia, focusing primarily on halibut and sablefish.

We have cameras on our vessel that monitor all our catch. We have independent validation when we land our fish that is audited against our log books and our camera coverage. If we pass all those audits, we are clear to go fishing on the next trip. These systems were designed in collaboration with the management agency and industry in order to provide confidence to the people of Canada, whose resource it is, that we are harvesting. It is important that we be able to prove that we are harvesting in a sustainable and responsible manner, particularly because, with our fishing method, longline fishing with hooks, up to 10,000 a day, we will uncover species that have been identified as being of concern, have very low total allowable catch and are what we in the industry call pinch-point species. We have to manage our fishing plans around those species in order to continue our fishing operation.

In each of the last four years, we have landed on our vessel between 240,000 and 350,000 pounds of a mix of species. When we used to fish dogfish, it was not uncommon for us to land up to 1.6 million pounds of product in a year fishing on our 91-year-old wooden vessel. Not once in all those years have the fleets fishing more than 20 different species of fish gone beyond the total allowable catch for any of those species. In fact, we have the opposite problem. In many instances, we are leaving fish in the water, because we have to be so selective in the way we harvest.

You would think that, after this explanation, I would be here to tell you that everything is just fine in the Pacific region and that we have the best managed fishery in the world, but that's not what my message will be to you.

For the last few years I have been focusing on human rights in relation to the fishing industry and the rights of the individual to make a fair livelihood, a principle that Canada has signed onto as a nation. I have been working with the salmon troll fleet, which has had its livelihood given away by ministerial edict to another sector, the recreational sector, leaving the commercial trollers bankrupted on the beach, with no recognition that it was licensing policy by our own government that destroyed their livelihoods. The government was given advice by respected policy analysts that, if you reallocate from those who have spent their entire livelihoods and all their capital on boats, gear and licences to another user, then they must morally and ethically provide a fair transfer mechanism.

You heard the RDG from the Pacific region the other day say that they do not give compensation. You are the politicians. You must give direction to the department that they have it wrong, that they are obligated by the human rights principles that we as a nation have signed onto, and they must right that wrong.

I also work with the Dungeness crab fleet, and this fleet is also very well managed from a conservation perspective. It was one of the first fleets in the world to use camera technology to oversee its catch, but it is not without its problems. There are constant attempts to reallocate space away from this fishery to other users and uses, whether they be the recreational sector, other industries such as wind farms, to further reconciliation with first nations or to satisfy the pressure from environmental organizations for more marine protected areas. There is no recognition of how damaging the loss of fishing grounds is to economic viability.

There is an urgent need to embed social and economic principles into the management structure so that fishermen are not arbitrarily losing their livelihoods when other interests want to take them away. Whether they are fisheries that are healthy and productive or fisheries that are struggling, the common denominator across virtually all fisheries in B.C. is that the active fishermen are not prospering. On the track we are on, if we don't make a change, we won't have another generation of skilled fishermen to pass the torch to. Who would enter a fishery where they work so hard, and often in very difficult conditions, but make a pauper's wages with no hope for better? It's not because the fishery is not lucrative; it's because so much of the wealth is captured by somebody onshore holding a piece of paper. This management failure is a result of ignoring the socio-economic side of the policy equation over decades.

This is not only a Canadian problem; it is a worldwide problem. I was in Turin, Italy, a few years ago for a slow food conference, and I heard the same story from Brazil to South Africa to the Mediterranean. I was invited by the Northwest Atlantic Marine Alliance to tour several fishing towns in Maine, Massachusetts and Rhode Island a few years ago, and I heard exactly the same story over and over again.

There is wealth here beside our communities and it's to be harvested, but it's leaving our communities. It is leaving our active fishermen in the communities adjacent to the resource under a failed ideology, one that says governments do not have to interfere or intervene in the market, that the market, left alone, will equitably distribute the wealth. We have seen how well that is working: 26 people in this world now have more wealth than 3.8 billion people.

I will go back to our fishing enterprise and why, despite working extremely hard on the water, bringing in any one year over $2 million in ex-vessel landed value and helping to design some of the best managed fisheries in the world, my son and I are not making enough money to re-capitalize our enterprise or pull out a living wage for either ourselves or our deckhands, and why we have over the last four years slid into debt to the point that, in one more year under this system, we will be forced to sell out of the industry. I did an analysis of the landed value of the fish that we land. We are paying 80% of the landed value to those who have either been granted the quota or have purchased those licences and quota over the last 25 years and are now renting it back to me—in other words, the exact opposite of owner-operator.

After all that work on the water, and at meetings over the last 20 years to design fisheries that truly do work from a conservation and sustainable harvesting perspective, we are being driven into bankruptcy because, despite repeated warnings, our government has not paid attention to the equitable distribution of the benefits, one of its core responsibilities.

lt was very maddening for me to hear my own Pacific region managers, and for that matter, the manager from the east coast as well, not once in their presentation to this committee last week identify this problem, even though they were told that this entire review was focused around the owner-operator policy and the reason this review was actually called. lt was only the week before their presentation that the Canadian Independent Fish Harvesters' Federation met with the RDG and the minister and I stated that in the halibut fishery, with a landed value of $66 million in 2017, most of that value was captured as rent by those who hold the paper, not participating in the fishery and simply holding an investment.

ln the last eight months, with the recognition of how important owner-operator has been to the health of the east coast fishing industry and the fabric of their communities in Atlantic Canada, many of the fleets in B.C. have recognized that this inequitable distribution of the benefits cannot be allowed to continue any longer. Active fishermen from the halibut, trawl, tuna, crab, salmon, sablefish, prawns, geoduck and sea urchin fisheries have all approached the department stating that this is a serious problem and it must be rectified. We have proposed to sit down with our fleets and those who control the quota and negotiate a fair sharing arrangement that would be embedded into the management structure through our advisory processes and through our IFMP framework and supported by the discretion of the minister.

We heard the RDG state clearly to you that it's within the mandate of the minister and the Fisheries Act to equitably distribute the benefits. Indeed, it is one of the fundamental responsibilities of government in respect to the use of the resources it manages, yet whose second-in-command, when asked directly by this committee if they are tracking leasing costs, said, no, they are not.

There are a number of mechanisms that could be used to return the benefits from the fishery back to those who are harvesting the resource and the people of Canada, everything from tax incentive changes to collective bargaining frameworks and specific owner-operator policies, as well as the fair sharing mechanism that we are proposing. lt is very obvious after listening to the department's presentation to you that they intend to ignore this problem. We therefore need you to give them political direction, to fulfill your role as elected representatives to ensure that government does what is needed to correct this outrageous market failure and support the development of a sustainable and productive fisheries sector in B.C.

Thank you for allowing me an opportunity to speak directly to you at this critical moment for our fishing industry.

[The Chair]

Thank you, Mr. Edwards.

We'll now go to Mr. de Greef for seven minutes or less, please.