Fisheries Committee on Feb. 5th, 2019

[Fraser MacDonald]

Yes.

I think you nailed it there, yes. Processors have very large overheads. You heard them talk about that yesterday. I know the company I sell most of my fish to has just built a plant that looks very expensive. The way those guys make money is to buy and sell fish, and they need to have secured supply or they can't confidently spend the money to build the plants they need, to create the value we need from our fisheries. So yes, fish buyers and processors are forced by the structure of how the whole system is set up into being quota brokers because they need to ensure their own supply.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Yes, that's a complication that has developed as the system changed, as the processing systems became more consolidated, with fewer and fewer small local community processing plants and so on. It's going to be a difficult situation to go back from that, I would assume, unless there can be a trust or some sort of a relationship built between the independent harvesters and those processors.

How do you see a solution to that part of the puzzle? That, obviously, is important to the processors.

[Fraser MacDonald]

Yes, you can go for it.

[Duncan Cameron]

There are other ways to guarantee supply of product than just owning the resource. Any retailer in the world does that. You could do it through better prices, through better service, all sorts of ways other than just owning it. We see that in other fisheries like crab. We have over 40 buyers. They can do it through service or through other tools, but they're not owning it.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Okay. That's part of what we need to hear as a committee so that we can make recommendations.

I heard from you and others that we need to come up with a solution for the next generation of fishers. You are that next generation, we hope, and the others following you. That's where we need to hear solutions. We're not on the ground ourselves, so that's why I'm asking these types of questions.

There was also a comment made earlier about how some of the transferability is actually necessary or required. I don't know whether you heard it. I think it was in reference more to groundfish stocks and so on, where they have very limited catch limits or quotas that can be transferred from one vessel to another to address bycatch. Can you elaborate a little more on how that process, that transferability, is required?

I don't know who might have an answer to that part. It may be more of a problem on the north coast, I think, from my background of the issue. Do you want to give it a go, Mr. Cameron?

[Duncan Cameron]

Yes, I'll give it a go.

I think the two fellows you had earlier are quite a bit more experienced groundfish fishermen than we are. You have all these small choke species. For yelloweye, for instance, you may only have 130 pounds of it coast-wide for 15,000 pounds of halibut, and even then it's broken up into different blocks. You might only have 20 pounds or 10 pounds in one area, so you have to build it. First of all, trade your yelloweye, and trade in the area you're fishing in. But that doesn't mean the target species is something that couldn't be built around that.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Okay. The detail on that one, I guess, is more complicated than we can get into today here. But it was an interesting comment that some of that transferability is required, so a different transfer system than what's happening with other ITQs is required, I take it.

Perhaps, through the chair, we could get some more information or get the earlier guest to provide us with a bit more on what he was referring to on the transferability. Thank you.

We talked earlier about the cost of the quotas, the cost of the transfers and so on.

Mr. MacDonald, you referred to your costs, and said that you put your home up as collateral and so on. I think part of what we heard earlier was that the prices were driven up because PICFI took the low-hanging fruit that could have gone to incoming new fishermen. Would you guys reflect that same comment?

[Fraser MacDonald]

I think a combination of government money, through PICFI, coming into it would definitely raise prices. I also think as landed value went up, lease prices went up with that and investors saw a way to buy something and get a pretty significant return on their investment each year, guaranteed. That also drove it up as more speculative money came into the quota ownership.

[The Chair]

Thank you, Mr. Arnold.

We'll go now to the NDP and Mr. Donnelly, for seven minutes or less.

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

Thank you, Mr. Chair.

Again I thank you all for being here and for providing your testimony to us on this study. I would encourage each of you, if you haven't already done so, to submit your recommendations in writing to the clerk. That is definitely one thing.... We'll take the testimony, but we'll also really be probably arguing over the recommendations, or discussing them anyway.

Mr. MacDonald, perhaps I could start with you.

I think we've heard loud and clear, or this committee has over months, from some of the younger fish harvesters, which I think three of you represent, actively fishing here. You made a comment about how if we don't change the system, we won't have enough active fishermen left. Can you describe what that would look like if we don't change the system and we don't have active fishermen left, and where we're heading?

[Fraser MacDonald]

Yes, I think we all need to appreciate that we have a fantastic resource on the west coast, and a large number of good species with good value. If we don't do anything, we're not going to have enough people to pull them out of the water. You can't just go to school for three months and get a ticket and go catch fish. It takes years to learn that from the previous generation. If we don't encourage more young entrants now and try to bring back people who have left with that knowledge, we're not going to have the means to pull the fish out of the water using Canadian labour.

Then you start wondering where we go from there. Well, maybe we start bringing in foreign workers to catch the fish for us because we don't have enough qualified people, and you can see where that goes. If we change policy now, we can recruit more young entrants, and over the next decade they can learn the skills necessary to fish, and we can continue with a healthy next generation. It's at risk right now. We can't even find crew right now because there aren't enough net benefits left over to make it worth their while.

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

Excellent.

You described a system that you said has worked for you, but wouldn't necessarily work for others. You also talked about how PICFI objectives haven't quite been met. Do you want to comment on either of those?

[Fraser MacDonald]

Yes, I'll do PICFI first. I've done quite a bit of leasing through the PICFI system, leasing licences that have been allocated to first nations bands. I've also worked for a couple of years running a boat to train band members from local first nations so they can take over their fishing enterprises.

In my experience and the experience of a lot of my friends who are from coastal bands, the PICFI licences haven't actually gone to increasing access for band members. They've become revenue streams for band offices. Those licences aren't being fished by band members. They're being leased out in the free market to the highest bidder. I have personal examples of how my friends from coastal bands who bid on the licence were outbid by $5,000 on the free market and didn't get that access, so that has not achieved its objectives.

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

Dr. Silver, could you summarize your top-shelf recommendations? You gave us a lot to chew on, which I appreciate, and I think it will be good.

[Dr. Jennifer Silver]

I would say for me it's the monitoring, like a licence and quota registry. For some of the reasons I talked about, I think it will make understanding these markets easier, and if the desire is to regulate them in one way or another, then that will make it easier. I think from a transparency standpoint, again with a public resource and the capacity within DFO and within the research community to be helping to ask questions about social and economic objectives in coastal communities, that would have the double value of helping our understanding of the issues.

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

Have you researched any jurisdictions around the world that are bright, shining examples of exactly what you're talking about?

[Dr. Jennifer Silver]

You heard last week from Alaska. I think there are some interesting initiatives going on there that were discussed. Personally, most of my research has been in B.C. I'm happy to try and pull some papers that I can provide to the committee.

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

That's always helpful. If the government is looking for solutions and looking for other systems that are working, that's super helpful.

We heard the comment about too many boats chasing too many fish.

[Colin Fraser]

Too few fish.

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

Too few fish. Too many fish would be another problem, wouldn't it?

Do you have a comment on that?

[Dr. Jennifer Silver]

I think that the history of first licence implementation goes back to the late 1960s with TAC and quota. In some fisheries, it's a really important one, although it's much longer than we can go into here. When we consider that there were lots of people in vessels involved in fisheries before licence limitation happened, vessels just don't go away. People who desire to be fish harvesters don't just go away. When people use that phrase, I have a lot of empathy because the situation was one where people were fishing and then, all of a sudden, the number of licences got limited. That necessarily means restructuring. I think there's been a reliance on the idea of market principles to take care of allocation. We've heard discussion of how maybe politics plays into that as well.

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

Maybe.

[Dr. Jennifer Silver]

The social scientist in me thinks about that longer history and that people, harvesters and vessels don't just go away.

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

Thank you.

Mr. Cameron, you talked about a proper process and you mentioned a seven-year transition.

Could you briefly comment on this? That's a pretty specific and helpful suggestion.

How can we move from where we are currently to what you envision in that seven-year transition period?

[Duncan Cameron]

I guess the seven years comes out of the fact that Newfoundland did it like that. To be honest, it's born out of a little cynicism from my entire life dealing with the region. If you don't give them some pretty hard direction, they're just going to talk about doing it. That's where that's born out of and the fact that it seems like it has a legal precedent right now. It seems like it's something that can work. I'm aiming for tangible goals that I think could happen. Possibly, I think there are some loftier ways to do it.

I'd like to put forward—