Fisheries Committee on May 13th, 2019

[The Chair, Liberal, Ken McDonald]

Good afternoon, everyone.

Welcome to our regular committee meeting, pursuant to Standing Order 81(4), main estimates 2019-20, votes 1, 5, 10, 15 and 20 under Department of Fisheries and Oceans, referred to the committee on Thursday, April 11.

I'd like to start off by welcoming the Honourable Jonathan Wilkinson for making himself available today. I believe the minister's here for an hour, and then the officials will stay for the second hour to partake in questioning.

I'd like to welcome the officials: Timothy Sargent, deputy minister; Jeffery Hutchinson, commissioner of the Canadian Coast Guard; Philippe Morel, assistant deputy minister, aquatic ecosystems sector; Jen O'Donoughue, assistant deputy minister and chief financial officer; Andy Smith, deputy commissioner, strategy and shipbuilding; Adam Burns, director general, fisheries resource management; and Mark Waddell, director general, fisheries and licence policy.

Minister, we'll give the floor to you to start off with, for your opening remarks. I believe you're going to be handing off the opening remarks to one of the officials.

When you're ready, the floor is yours.

[Jonathan Wilkinson, Liberal, Minister of Fisheries]

Thank you, Mr. Chair, and thank you very much for the invitation to be here today. I will give some opening remarks, and then I think Jen will just supplement those a little bit.

As you noted, I'm accompanied by a number of members of our senior management team.

I'll give the committee a brief financial overview of the 2019-20 main estimates for the Department of Fisheries and Oceans and the Canadian Coast Guard before speaking about some of the accomplishments of my department.

Through the 2019-20 main estimates, the department is seeking $2.994 billion, which represents a $548.4-million increase when compared to the 2018-19 main estimates.

The increased spending levels represent new funding for the procurement and conversion of three icebreakers for the Coast Guard, including the newest member of the fleet, the CCGS Captain Molly Kool. The main estimates also include $155 million that is directed to the construction and engineering of a Coast Guard offshore oceanographic science vessel, as well as to the purchase of long lead items, which need to be ordered well in advance of the start of construction, which is targeted for the end of 2020.

The main estimates also include a significant amount of funding for the small craft harbours program to deliver on its regular work, which is $92 million annual A-base funding. In addition, they include $150 million to deliver on the $250-million budget 2018 funding for small craft harbours. This is important because, in 2018, the commercial fishing industry had landings valued at over $5.5 billion. Today, this sector employs more than 77,000 workers from coast to coast to coast in harvesting, aquaculture and processing jobs. Furthermore, fish and seafood continue to be among the largest single food commodities exported by Canada, valued at almost $7 billion annually.

The top three items that comprise our main estimates—commercial icebreakers, small craft harbours and the offshore oceanographic science vessel—each represent 5% of the total 2019-20 estimates, or 15% as a whole. Furthermore, on the overall change of $548.4 million between 2018-19 and 2019-20, these three initiatives correspond to $435.5 million or approximately 80% of the overall increase that the department is experiencing.

Following my remarks, my officials will be able to share more specifics on how this funding will be used over the coming months.

Mr. Chair, it has been 10 months since my appointment as Minister of Fisheries, Oceans and the Canadian Coast Guard.

I am very proud to be part of a government that has been making decisions and real investments to fight climate change and protect our environment. From coast to coast to coast, whether it is increasing the capacity of our Coast Guard or investing in small craft harbours, the decisions that are made are ensuring that we are protecting our oceans for generations to come and for our communities that depend on them.

The Canadian Coast Guard owns and operates more than 120 vessels of various sizes, strategically deployed on all coasts and major inland waterways of the country. In the past 18 months, six new small ships have joined the fleet, including search and rescue lifeboats and channel surveying vessels. We have announced the arrival of two more search and rescue lifeboats, the CCGS McIntyre Bay and the CCGS Pachena Bay, to join the west coast fleet. The first large ship under the national shipbuilding strategy, a specialized offshore fisheries science vessel named after Sir John Franklin, is expected to be delivered in June.

We are strengthening the Coast Guard's authorities to support a more proactive, rapid and effective response to ship-source and mystery-source pollution incidents. The Coast Guard responds regularly to pollution incidents, mostly small in scale. However, it also proactively intervenes when required to mitigate potential spills. This past fall, the Coast Guard and its partners successfully completed the bulk oil removal of 208.7 cubic metres from the wreck of the Manolis L near Change Islands, in Notre Dame Bay, Newfoundland and Labrador.

The government is making investments to ensure that the women and men of the Coast Guard have the tools they need to protect our marine environment and ensure the safety of mariners.

Small craft harbours provide critical support to the commercial fishing industry, which in 2017 had landings of over $3.4 billion. As part of budget 2018, we invested $250 million, over two years, to renew our network of small craft harbours and to work with municipalities to enhance local communities and economies and foster job creation. This is in addition to the $92 million that will be invested in 2019-20 for repairs, maintenance, construction and dredging at core commercial fishing harbours across this country.

Over the past year, Canada has been active and engaged internationally. One highlight was the G7 summit, where oceans and fisheries were featured as key issues. In addition, we sponsored the first-ever oceans conference at the Sustainable Blue Economy Conference, which was held in Nairobi, where we co-sponsored with Kenya and Japan. We also established the new DFO and Coast Guard region in the Arctic and signed a memorandum of understanding with the Government of Nunavut and the Qikiqtani Inuit Association to work together to explore the potential protection of areas in the High Arctic Basin, while supporting the development of a conservation economy in the region. We also established an inshore rescue boat station in Rankin Inlet.

The government has committed to providing meaningful and effective protection to Canada's land and ocean spaces. To that end, we established an advisory panel on marine-protected area standards to consult with Canadians and provide guidance to the government on our approach to marine conservation.

During the nature champions summit in Montreal last month, I announced a set of strong, clear standards for Canada's marine conservation networks, which will include two distinct forms of protection: marine-protected areas and other effective area-based conservation measures, such marine refuges.

We're well on our way to meeting the international 10% marine conservation target in 2020, as a result of real protection measures that will have biodiversity benefits for generations to come.

Other progress includes partnering with indigenous peoples to respond to marine emergencies, and in the last year we provided marine safety training to 25 members from 17 first nations in British Columbia.

We are also continuing to take action to protect Canada's endangered whales, including the southern resident killer whales on the west coast, right whales on the east coast and belugas in the St. Lawrence.

We are working to leverage new research to refine and improve our approaches to managing fisheries in this country, with the resolve to provide needed protections, while supporting indigenous groups, fish harvesters, shippers and other stakeholders.

One of my most important priorities as minister is restoring important fish stocks across Canada, including Canada's wild salmon populations. As you know, our government last year announced an additional $107 million to support the implementation of the fish stocks provisions that are proposed in Bill C-68. To contribute to better managed fisheries, these resources will increase scientific capacity to do stock assessments, including salmon stock assessments.

We also announced the B.C. salmon restoration and innovation fund and the Quebec fisheries fund, both modelled on the successful Atlantic fisheries fund, to support projects focused on supporting stock restoration and resilience through infrastructure investments, promoting science partnerships and innovation and technology adoption.

These are among many activities that will support our wild salmon policy implementation plan and management of aquaculture over the next five years.

Canada's prosperity depends on making sure the benefits of a growing economy are felt by more and more people, with good, well-paying jobs for Canada's middle class. The government also firmly believes that economic prosperity and the long-term health of our environment can and must go hand in hand. We are continuing to make smart investments that are positioning Fisheries and Oceans Canada and the Canadian Coast Guard to deliver on these priorities for the benefit of all Canadians.

Now I will turn it over to Jen to add a couple of extra comments.

[Jen O'Donoughue, Assistant Deputy Minister and Chief Financial Officer, Department of Fisheries and Oceans]

Thank you, Minister Wilkinson.

Good afternoon, Mr. Chair and committee members.

My name is Jen O'Donoughue, and I'm the chief financial officer of the Department of Fisheries and Oceans and the Canadian Coast Guard.

We're pleased to be here today to provide an overview of the 2019-20 main estimates.

I prepared brief remarks allowing time for any questions the committee may have.

We are in the second year of the new estimates reform process and its purpose is to improve the alignment between the federal budget and estimates. The President of the Treasury Board tabled interim estimates back on January 28 to ensure departments were able to start the fiscal year.

The key change for estimates reform remains the timing of main estimates, which now follow budgets. The main estimates were tabled on April 11. As with all supply bills, they were referred to committee where the contents are studied before voting takes place, thus our presence here today.

Contrary to last year, itemized budget implementation votes are now included in the departmental vote hierarchies rather than in one single consolidated vote within the Treasury Board Secretariat. Specifically for DFO, items are included under votes 15 and 20. Similar to last year, budget 2019 items will only be made available to the regular expenditure vote of the department once they have gone through the scrutiny and due diligence of the Treasury Board Secretariat and are approved by Treasury Board ministers.

The department's 2019-20 main estimates totalled $2.994 billion, including statutory authorities. This represents an increase of $548 million when compared to the 2018-19 main estimates. As indicated by the minister, the biggest increase, $151 million, is related to the procurement of icebreakers for the Canadian Coast Guard. Three icebreakers were purchased in August 2018 and due to timing this funding was not included in the 2018-19 main estimates. Funding was sought in-year via the 2018-19 supplementary estimates (A).

The next large increase in funding is for the renewal of Canada's network of small craft harbours. Budget 2018 announced $250 million, of which $150 million is included in these main estimates. Due to timing, as well, year one funding was not included in our 2018-19 main estimates.

We also have a $135-million increase in funding for the ongoing engineering work related to the Canadian Coast Guard's offshore oceanographic science vessel.

Thank you for giving me the opportunity to be here this afternoon to present our 2019-20 main estimates.

[The Chair, Liberal, Ken McDonald]

Thank you for that.

We'll go right to our questioning now to the government side. We have Mr. Fraser for seven minutes or less, please.

[Colin Fraser, Liberal, West Nova, NS]

Thank you very much, Mr. Chair, and I'll be sharing my time with Mr. Morrissey.

Minister, thank you so much for being here, and to your officials, as well, for joining us today. It's always a pleasure to have you at our committee.

I'd like to start by touching on one aspect that you mentioned in your presentation regarding small craft harbours. You're absolutely right to mention the impact that seafood exports, in particular, have on coastal communities in Atlantic Canada, where I'm from, and most particularly, the lobster landings that happen that happen in southwestern Nova Scotia, for example. Those are critical to the local economy. They're basically the backbone of the entire region's economic growth.

We know that climate change is happening, that there are severe effects that can be seen at the wharves when you've got more intense storms. We know that it means that more dredging has to happen. We know, as well, that the growth of the lobster industry is fuelling more people wanting to get into the industry and also having larger vessels, which is creating congestion at many of our small craft harbours. Catches are up, the price is high because of the trade deals that are now in effect, but there are some safety issues. Small craft harbours have to be a very important part of your department's outlook for the future.

I know investments have been made. Our committee made a recommendation that there needs to be a significant increase in the A-base portion of the funding so that planning can happen by your department.

I wonder if you can comment on the importance of small craft harbours, the investments we've made and what you see for the future?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

This issue is obviously very important on the Atlantic coast, but it's also of significance on the Pacific coast, and increasingly is emerging as an issue of importance in the Arctic.

The government has recognized the importance of ensuring we have funding to be able to address some of the issues that you talked about. Since 2016-17, we've spent almost $680 million in the small craft harbour area. That included $250 million over a two-year period that was allocated in budget 2018 in B-base funding to ensure we had sufficient resources to address some of the critical issues.

Let me say a couple of other things. On a go-forward basis, we certainly are facing new challenges in the area of small craft harbours. Climate change is certainly a variable that we must account for now, both in terms of the damage that's caused through extreme weather events and the types of construction that we're going to have to think about on a go-forward basis to ensure we're preparing new facilities for that kind of interaction. We have to address the fact that the growth in the aquaculture industry is putting a significant number of additional boats on the water, and as you said, there is a growth in the size of the average harvester boat. All of these are creating challenges.

I do think we need to continue to look at this, and certainly, our department is seized with it at the present time and looking forward to what the requirements are going to be, because the requirements going forward are certainly going to be a bit different from what they have been in the past. Significant investments have been made; significant funding is going into this critical area. But I am quite cognizant of the fact that we need to reflect on what we need to expect and what we must plan for on a go-forward basis.

[Colin Fraser, Liberal, West Nova, NS]

That's excellent. Thank you, Minister.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you.

Minister, I would suggest—and you've been the guardian of small craft harbours for the last number of months—that we're seeing the impacts of years of funding cuts. I did some of the rough numbers, and they come to over $100 million. We're approaching a crisis situation in small craft harbours that will have to be dealt with in the future. But my question is more a positive one.

You were in my riding back in March. You had a chance to look at some innovative projects we're doing through the Atlantic fisheries fund, which is extremely important to our small rural, coastal communities. They're doing a lot in innovation and creating jobs in these communities and have certainly expanded a lot on the aquaculture side.

I would ask if you could briefly give us your perspective on this particular fund. How do you see it going? Will you continue to support this in the coming years? It has led to a lot of investment in my riding, which is primarily rural and dependent on the fishery.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

The Atlantic fisheries fund, as you will all know, is a $400-million program that is jointly financed by the federal and provincial governments, 70% federal and 30% provincial. It is a tool that's allowed us to encourage and foster innovation in the fish harvesting sector and to invest in the on-the-ground science that many of the fish harvesters feel is important to get done. It has been highly successful in its early implementation. It's been so successful that we've taken that model, copied it and launched a similar fund—smaller, of course, because the size of the fishery is smaller—in British Columbia, and one in Quebec.

We believe we are seeing significant results across all four Atlantic provinces that are beneficial from an economic perspective for harvesters and coastal communities, and we are committed to that on a go-forward basis for sure.

[Bobby Morrissey, Liberal, Egmont, PE]

Minister, thank you for your comments on that. I want to go back briefly to small craft harbours. You recognize this as well, that we're seeing significant impacts from climate change in my home province of Prince Edward Island. This year, dredging has been required at small craft harbour ports that didn't require it before. How is the department going to respond to that growing challenge that is now very real and that we're seeing on a yearly basis?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

It is an important issue. I know you're speaking specifically about Malpeque Bay and some of the challenges there. There are a number of cases where the dredging issues are increasingly important, although there are also other harbours where maintenance is required simply as a result of climate change-related weather events.

As I said in my response to the earlier question, the government has brought forward significant resources to invest in small craft harbours—$250 million in budget 2018 to be spread over two years—but we are very cognizant of the fact that the requirements in small craft harbours are going to have to be assessed in light of the newer challenges we are facing. One of these is the climate issue, which is creating issues that we haven't seen before that we're going to have to be able to manage, but also some of the economic drivers we're seeing with respect to the growth in aquaculture and the growth in the size of many of the boats.

That is an active conversation within the department at the present time. We will endeavour to come forward with a view about what will be required on a go-forward basis.

[The Chair, Liberal, Ken McDonald]

Thank you.

Now we'll go to Mr. Doherty for seven minutes or less, please.

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

Thank you, Mr. Chair.

Minister, we understand that Irving is trying to sell two of its Arctic offshore patrol ships to DFO. We also understand that the Canadian Coast Guard did a study of these $800-million ships and determined that they're not suitable for Canadian Coast Guard use, neither as Arctic class icebreakers nor as buoy tenders nor for search and rescue duties. Minister, will you please provide this committee a copy of the report by close of business this Tuesday?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

First and foremost, issues around procurement are the purview of the Minister of Public Services and Procurement.

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

Minister, would you provide a copy to this committee?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

If you let me finish my answer, I'll let you finish your question.

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

It's just a flat yes or no.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I let you finish your question, if you would let me finish my answer.

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

It's my time, sorry, Minister.

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

Okay.

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

Would you provide this committee a copy of this report by close of business on Tuesday?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

The issues related to procurement are the purview of the minister of procurement.

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

All right.

Minister, it appears that the OOSV has been delayed even further, forcing the Canadian Coast Guard to do another refit of the ancient CCGS Hudson. The refit was originally contracted for $10 million, from February to July 15, 2019. We understand that the work period will be extended by several months and by several million dollars, into at least late fall of this year or beyond. Will the minister please report by the end of the day Thursday how much money has been spent on the CCGS Hudson since 2012, and how much above the current $10-million contract the Canadian Coast Guard has budgeted to repair this 57-year-old ship?

[Jonathan Wilkinson, Liberal, North Vancouver, BC]

I'm happy to ask the Coast Guard officials who are here with me today to respond specifically, but there are normal procedures for reporting these kinds of things. Certainly, we are working to ensure that the Coast Guard has the capabilities it requires, whether that's vessel life extension or new ships, and we are going to ensure that the Coast Guard has what it needs to do its job.

I can certainly ask the commissioner to respond specifically.

[Jeffery Hutchinson, Commissioner of the Canadian Coast Guard, Department of Fisheries and Oceans]

I'd certainly be happy to work with the clerk of the committee to provide a summary of Hudson expenditures. It was from 2012, Mr. Doherty, is that correct?