First, I want to thank all of you for doing this study. Many, including me, are hopeful that this will result in positive change in B.C. fisheries.
I've been here before, but for those who don't know me, I lead the fisheries program at Ecotrust Canada. I care deeply about the issues being discussed here, and not just because it is my job. I have worked in fisheries for the past 30 years, beginning with deckhanding on my father's boat.
I want to start by addressing questions from earlier proceedings about corporate control and concentration in licence ownership.
First and foremost, this is extremely difficult to track, even for government, due to the lack of transparency in the licensing system. However, through an information request to DFO for 2017 data, we can see that of the 345 licence and quota holders in the groundfish trawl, halibut and sablefish fisheries, the top 26, or 7.4%, hold 50% of the quota value, and the top four, or 1.2%, hold 50% of all the quota pounds. We can also see that the majority of groundfish quota pounds are not fished by owner-operators. They are held by processors, overseas companies and even fishing family companies that for the most part no longer fish the majority of their quota.
As for overseas investment, besides a few large companies, this is very hard to trace, but there are examples. For instance, you may have heard of the recent scandal with money laundering through gambling and real estate in B.C. We traced one company that has been investing in groundfish and now owns 5.9 million pounds of quota. The director of this company is the same overseas investor named in newspaper articles on money laundering through casinos and real estate in Vancouver.
The key point here is that this is a Canadian public resource, and yet it is extremely difficult to confirm who owns the licences and the quota, never mind the level of control and benefit that is left flowing to fishermen, first nations and adjacent communities.
These patterns are occurring across many fisheries, and we know this is just the tip of the iceberg. We can't determine the full level of concentration and who is really making the money, because there are back-end trust agreements and other mechanisms that hide the true beneficial ownership. There are multiple subsidiaries of listed companies that are nearly impossible to link up, and there are fishermen attached to licences and quota who have no real ownership and certainly are not getting the value of those assets. Because we have no owner-operator or fleet separation policy, there is no guarantee that the vessel owner and the quota owner are the same, or even that either of them is a fisherman.
Further, in a previous session, someone asked if you had to have a licence to hold quota. You do have to attach quota to a licence for species—for example, a halibut L tab—but you do not need to be a licensed, registered fisherman to buy those licences. Any investor from anywhere can set up a B.C. business, buy a halibut licence and quota, and attach them to someone else's vessel.
Another question raised is whether vertical integration affects landed value. Landed value used to be a proxy for income going into fishermen's pockets. Now, with increased leasing and B.C. buyer control over prices, this is far from being the case. In B.C., there are numerous examples of fishermen getting less than a fair share of their product's value. They are price-takers. In some cases, this is because so much of the would-be landed value goes out to leases, and in other cases it's because they are not paid landed value but rather a lower price per pound or, in effect, a wage set by the owners of the licences and the quota.
Here's an example, for sea cucumber, of how current policy allows landed value manipulation. Sea cucumber is landed for $18 a kilogram and is then sold dried wholesale for as much as $1,000 a kilogram. The vessel and crew get $5 of that after leasing and monitoring costs, and they still have to cover expenses such as fuel. Even with the weight conversion, only a small fraction of the value—as low as 1% to 2%—goes to harvesters or stays in adjacent B.C. communities.
To be clear, processors are a critical part of the fishery. They add value to fish. They get it to market and create good local jobs, but as can be seen in Atlantic Canada, processors do not need to own all the licences and quota to be successful businesses and for the industry to thrive. In fact, a number of processors in B.C. are also being adversely affected by this system. To access supply, many processors have to purchase or lease quota at high prices and make it available to the vessels that fish for them. They are forced, too, to compete to maintain their supply, which can increase their costs and contribute to lease price inflation.
I want to take a minute to touch on the way forward. There needs to be a set of guiding principles for the process and objectives for the outcomes, such as PIIFCAF has for Atlantic Canada. For example, principles should include that it must be a collaborative and transparent process, and it mustn't adversely affect conservation objectives, as others have said.
The tools and practices from the current system, such as monitoring and leasing bycatch species, are all still doable under a policy framework that puts licences and quota in the hands of fishermen and their communities. It does not have to be at the cost of conservation outcomes. It needs to avoid harm to active fishermen and those entangled in the current system. A 70-year-old harvester who has fished for 50 years but can't afford a boat or a licence before he retires must not be pushed out of the fishery. There also needs to be consideration for those who, to secure their fishing livelihoods, become over-leveraged in the current system. It also needs to support first nations' reconciliation objectives in fisheries.
Ecotrust will submit more detailed recommendations for policy and program options to improve outcomes, but I'll say here that key elements to consider include the following: made-in-B.C. owner-operator and fleet separation policies that, by definition and terms, meet the unique needs of each fishery; a fish harvester loan board to help provide affordable access to capital that does not hinder independence; locally designed community and/or harvester-led licence banks that may act as a transition support, help new entrants or those who can't afford to buy in, or provide an alternative means of community access where needed; a finite timeline with clear, stated outcomes, one long enough for people to get out but not so long that we lose more capacity and community assets; an easily accessible and complete public registry of all licence and quota holders that identifies the true beneficial ownership; and an environment where fishermen have real representation, as they do in other provinces, and where speaking out for change does not compromise one's livelihood.
The system is complex, and change must be thoughtfully made, but this is not an excuse not to meet that challenge. The current licensing policy is not working, and time is of the essence. Policy must be developed that ensures that the benefits of our seafood resources stay in our communities. The cost is too high not to.
My written brief, which I'll submit, includes further evidence to support what I've presented here, and I hope that it supports the change, much needed in our Pacific coast.
Thank you for your time.