Fisheries Committee on Sept. 26th, 2016

[The Chair, Liberal, Scott Simms]

Please answer briefly.

[David Lewis]

As I mentioned, the information on the capelin is relatively sparse. The survey work that is done is mostly on an inshore basis. In terms of having a good understanding of the status of the offshore capelin stocks, there is very little information known about that, from my understanding. This is where acoustic surveying—utilizing vessels that could survey in the distant waters out to the 200-mile limit—would be a big advantage.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Lewis.

We have five minutes left, with the government side questioning.

Mr. McDonald, please, for five minutes.

[Ken McDonald, Liberal, Avalon, NL]

Thank you, Mr. Chair.

I would like to go back for a quick second to Senator Wells and his response to the question about the 115,000 tonnes being more of a social type of thing for the Prime Minister to say and to put into his platform as an election promise or to be very supportive. It doesn't surprise me because of the fact that the same Conservative government that was in power—and even when they were in opposition—still felt that LIFO was the right policy for our shrimp fishery. We know where LIFO is today, and the adjacency part of it.

You talk about the federal government controlling the harvesting and the province controlling the processing, and you mentioned the C-NLOPB. Why do you think it hasn't happened? Even with the previous government—for someone who is so passionate and, even though in the Senate, still connected to that party—why do you think it hasn't happened, that we haven't seen a joint management approach to the fishery when it comes to Newfoundland and Labrador?

[David Mark Wells]

Again, it's a good question. I'll remove the politics from it; I don't have any comments on LIFO.

I think what happens generally is that groups want to hold and consolidate their authority. That authority, certainly in the fishery, is the jurisdiction. The federal government wants to hold and consolidate what is in their jurisdiction, and equally, I think, the province wants to hold and consolidate what's in their jurisdiction.

In the case of the C-NLOPB and the offshore, the courts ruled that this was federal jurisdiction. There was an agreement made—I think to the great credit to the government of the day—that this would be seen as though it were on land, as in Alberta, or as in the case of other rural resources in Saskatchewan, or wherever it is on land. To its credit, the federal government of the day saw joint management and treatment of the offshore as though it were on land as a correct benefit and the right thing to do.

Part of it is just coming together. Why hasn't it been done thus far? We had some discussions on it around 2006 or 2007 when I was working for then-minister Hearn, but the political environment wasn't there, regardless of the party, between the federal government and the provincial government of the day.

[Ken McDonald, Liberal, Avalon, NL]

Thank you.

I have another question.

Minister Crocker, you didn't have a chance before to comment on the allocation of the first 115,000 tonnes to the inshore fishers.

[Steve Crocker]

In June of 2015, the provincial House passed unanimously our support for the first 115,000 tonnes being harvested by the inshore fishers. We continue to support the first 115,000 tonnes for the inshore. The inshore will provide the most direct benefits to the province. Whether it's the harvesting or the processing on land, it's a very important part for our rural communities in the province, so we maintain our commitment to that commitment.

Let me add something about the joint management piece: it would be interesting when looking at northern cod. In a lot of our fisheries there are many adjacent provinces, and there fishing areas that straddle more than one jurisdiction, but one of the interesting things with northern cod is that there are really only two jurisdictions involved. They are Newfoundland and Labrador and Canada. Northern cod may present a unique opportunity for some type of joint management of that stock in particular.

[The Chair, Liberal, Scott Simms]

You have one minute.

[Ken McDonald, Liberal, Avalon, NL]

I'll be quick.

Mr. Efford, we've talked about biomass and everything, and you've been involved both provincially and federally as a minister responsible for the fishery. What level do you, as a former minister, believe the biomass has to be at to sustain a commercial fishery?

[John Efford]

First of all, I don't believe the scientific information telling us that we only have 300,000 tonnes in the ocean.

I've been on the Grand Banks. My son is on the Grand Banks. They're fishing, when they get some fish to catch—we're not talking about cod now—and the waters are full. I was out for a trip just this weekend, and what I saw just down in the end of Conception Bay was absolutely mind-boggling.

If they're going to tell us that we only have that amount of cod, what I would like to be assured of and what I would like to see—and this would answer my question—is the scientific written information, how it was arrived at, and who has it, because they can't tell us that we only have that amount of cod. I believe the cod stocks are greater than that.

[Ken McDonald, Liberal, Avalon, NL]

You think—

[The Chair, Liberal, Scott Simms]

I'm sorry. We're done. Thank you. The five minutes are up.

I want to thank all of our guests.

First of all, you've received the picture that came from Mr. Efford. I want to thank the Sheraton for providing it in colour, as a matter of fact. It was very nice of them. The other thing, just as a preview, Mr. Efford and the other witnesses, is that we talked about science and this afternoon at 2:30 we have a senior research scientist from DFO who will be testifying. If you'd like to stick around for that, perhaps your questions may be answered during that round.

The other thing, of course, is that we'll have the bios of our guests distributed this afternoon.

At this point, before we break for a few minutes before our next panel, I want to thank our current panellists for coming in: Deputy Minister Lewis, and Minister Steve Crocker, who is also the member of the House of Assembly for—help me fill in the blanks here—

[Steve Crocker]

—Carbonear—Trinity—Bay de Verde.

[The Chair, Liberal, Scott Simms]

Done.

As well, former minister Efford, it's nice to see you again, sir.

I neglected to mention, Senator Wells, that you are a currently a member of the Senate fisheries committee. Is that correct?

[David Mark Wells]

No, I'm not.

[The Chair, Liberal, Scott Simms]

I'm wrong.

[David Mark Wells]

I was a member of the Senate fisheries committee a couple of years ago when we did the seal study and the aquaculture study.

[The Chair, Liberal, Scott Simms]

Then you're there in spirit, I gather. We'll keep it at that.

Thank you very much.

We're going to break for a few minutes. At about 10:30 we'll have our second panel.

[The Chair, Liberal, Scott Simms]

We'll ask you to take your seats. We have speeches coming up and once again we have to seek permission because they are in English only. Just for the sake of clarification, and to point it out to our guests, we have to distribute in both languages unless we get unanimous consent to proceed with just one language.

Do I have unanimous consent to distribute the comments from our witnesses?

[Some hon. members]

Agreed.

[The Chair, Liberal, Scott Simms]

We're good to go. Let's get started. We're running a bit behind.

This is panel number two. With us we have Mr. Derek Butler, from the Association of Seafood Producers.

Mr. Butler, it's good to see you again.

We have Alberto Wareham, president and chief executive officer, who is from Icewater Seafoods Incorporated.

We have someone else who is no stranger to the committee: Mr. Keith Sullivan, president of the Fish, Food and Allied Workers, the FFAW.

You have 10 minutes each. If you're under 10 minutes, that would be appreciated as well, as we like to get to questions and comments.

Mr. Butler, I'm going to ask you to start, please. You have 10 minutes.

[Derek Butler, Executive Director, Association of Seafood Producers]

Thank you very much. I've timed it for just under nine, so hopefully I'll get there.

On behalf of the Association of Seafood Producers, I am pleased to appear before this committee, and I thank you for the invitation.

I'll give you a quick overview of the ASP, our role and work and who we represent, and then provide some brief remarks on our perspectives on northern cod going forward.

ASP is an industry association. It represents the majority of seafood producers in the province by volume and value. Our members include small, medium-sized, and large companies. Most are family owned and several are harvester owned. They are all invested uniquely in rural Newfoundland and Labrador; there are not too many fish plants here on the waterfront in the city. A few have access to their own quotas for some species, but most buy from the independent inshore fleet represented by my colleague, Mr. Keith Sullivan.

ASP's members produce a wide range of species available to the commercial fishery. Our members produce the majority of snow crab and inshore shrimp, at close to 80% or 90% of both, which represent most of the value in the fishery in the province. They also produce a vast majority of pelagic species available to us, such as capelin, herring, and mackerel. We do a fair bit of the groundfish, including cod.

All of what we produce, or most of it, is exported. Our markets are the world over, including North America, Europe, Africa, and, increasingly, Asia, year after year. As an association, we engage in the usual range of activities appropriate to a trade association, including public policy, government, media relations, and services to members. Those services include serving as the client of the first Marine Stewardship Council eco-certification in Canada, for northern shrimp. It was the largest such certified shrimp district in the world at the time, and the first on the eastern seaboard of North America.

As you will know, the MSC is a third party audited standard for fishery sustainability to assure the world—our markets—that our products come from sustainable fisheries in terms of what we harvest in terms of habitat and ecosystems and the management regime. We're now the client for four different certifications covering shrimp in the Gulf of St. Lawrence, Nova Scotia, and in Newfoundland and Labrador, and for snow crab in the province. Our members hold other certificates as well.

As somewhat of an anomaly in the industry, we also negotiate fish prices for 67 species per year, as our industry is subject to collective bargaining legislation. That takes up a fair bit of our work.

I have worked for ASP as executive director since 2004, and I have served as chair of the board since 2006. I've also served on the FRCC, the Fisheries Resource Conservation Council, and on a number of other fisheries or other related advisory bodies.

The reason why you're here, and the reason why we're here, is cod. Cod, to state the obvious, is important. As I often say, it's part of the cultural, social, political, and economic history of this province. We were but an island in the sea and essentially a platform for the seasonal prosecution of the fishery by Europeans. We were later a place of habitation, a colony, and then a country, and now are a province of Canada. Cod, to use a French expression, is our raison d'être. It was the stock market of Europe and the livelihood of our people. It's sad, but we all know the story with the word “moratorium”. Just to say it, says it all.

In recent years, the work of DFO and the Centre for Fisheries Ecosystem Research, CFER, at the marine institute, suggests an increase in biomass for northern cod, and yet—and this is my take-away point—it must be underscored that the fishery is not yet rebuilt. ASP is of the view that a general strategy of restraint is required in our approach to northern cod.

As we wrote to the Minister of Fisheries and Oceans last year, “a general strategy of restraint grounds any and all increases in science, avoids past mistakes, accelerates stock recovery, and protects the substantial investments that will be required for modernization and for market development”. That restraint includes adherence to the PA framework, the precautionary approach framework to which DFO is itself committed. DFO has said that its precautionary approach framework will guide decisions. The Association of Seafood Producers supports that adherence.

In that regard, it should be noted that stock-building has yet to occur. The biomass remains in the critical zone at just over one-third of Blim. In DFO's PA framework, this means removals must be kept to a minimum. In “Northern cod comeback”, published in the Canadian Journal of Fisheries and Aquatic Sciences last year, authors Rose and Rowe suggest that with frugal stock management and low fishing mortality, “this stock could rebuild, perhaps within less than a decade”.

Again, to underscore the point, the stock is not yet rebuilt.

ASP is also on record as supporting the position contained in the DFO's Canadian science advisory secretariat's science response from last year, which reads in part that “removals should be kept low to promote stock growth”.

We have noted before in correspondence to the minister, and in concurrence with the FRCC report on groundfish from 2011 titled “Towards recovered and sustainable groundfish fisheries in Eastern Canada: a report to the Minister of Fisheries and Oceans”, of which I have a copy here, past instances of growth in biomass have been cropped off by premature quota increases.

I was pleased to serve on the FRCC at the time of that report, and I want to reiterate its findings today. Past instances of growth have been cropped off. We want to avoid that, and I think all stakeholders want to avoid it. It remains imperative, therefore, that we follow the science and not get ahead of it. We have to avoid being led by an impressionistic sense of what's out there or by open line radio.

This fishery is being watched with increased scrutiny by our fellow Canadians and the international community, and appropriately so. It's an iconic fishery for collapse, and the world is right to watch what we do. We support erring on the side of caution, not just for the international perspective on northern cod, but because it is appropriate in reality, as per “A Harvest Strategy Compliant with the Precautionary Approach” adopted by DFO. Removals have to be kept to a minimum by necessity, and the low level of removals to date in this stock have been key to the recovery, such as we have seen to date.

Northern cod, it must be acknowledged, is not just an icon or an interesting case study for international observers or for national fisheries management and science. At the end of the day, rebuilding matters to industry participants represented here at this table. Again, the 2011 FRCC report said, “This rebuilding will require sustainable fishing practices, economically viable enterprises and the production of quality, high value products that find acceptance in global markets.”

In an era of increased whitefish supply in international markets, both wild capture and aquaculture, northern cod will be of most value when it supports a modern industry that is economically sustainable with premium quality fish. We're not there yet either. There is some concern, well placed, that we cannot “get there from here” in terms of the structure.

We also acknowledge and support the minister's commitment to ensuring the implementation of a “licence and tags regime for all recreational fish participants...expected to be introduced prior to the 2017 season”. That is an important point.

In closing, let me say that we invite, as always, DFO's continuing collaboration with the industry. We acknowledge DFO's support for our northern cod fisheries improvement project, FIP, which ASP is developing in conjunction with the Groundfish Enterprise Allocation Council, or GEAC. That project, like all FIPs, is designed to help prepare northern cod for eventual MSC certification.

MSC, I'd like to remind people, is the democracy of the marketplace, making third party attestations as to the sustainability of seafood products in the marketplace. It is telling to recall that MSC was developed on the back of the groundfish moratorium here in the early 1990s.

The world is watching. Whatever we do with groundfish, and cod in particular, we must do it right if it is to sustain us many years hence. We can be sure now, as we face the prospects of ecosystem change, that the decrease of more valuable shellfish and the resurgence of lesser value per unit groundfish will bring untold pressures to bear on industry participants and the managers. We face some difficult years of transition ahead.

Again, thank you for your time. I'm available for any questions you might have.

Thank you.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Butler.

True to your word, you were around nine minutes.

Mr. Wareham, please, for 10 minutes or less.

[Alberto Wareham, President and Chief Executive Officer, Icewater Seafoods Inc.]

Thank you, Chair.

Thank you to the committee for this opportunity this morning.

Icewater Seafoods is a family-owned business with an extensive history in the Newfoundland cod fishery. It started seven generations ago when my ancestors came to Newfoundland from Dorset, England. Icewater was formed in 2004 by my father, Bruce Wareham, from the former Newfoundland operations of High Liner Foods.

Today, Icewater is a vertically integrated groundfish company with the second-largest holdings of greater-than-100-foot enterprise allocations for various groundfish stocks across Atlantic Canada. Access to these resources allows Icewater to plan and sustain operations at our plant in Arnold's Cove. Our state-of-the-art plant is solely focused on the production of North Atlantic cod.

With a team of 210 cod experts, we have successfully built strong niche markets for premium quality individually quick-frozen cod portions, which are sold primarily in Europe. Even after the moratorium on northern cod was announced in 1992, our plant operations remained focused solely on cod. This, coupled with the help and support of our community, has made Icewater the largest buyer and the larger producer of cod in Newfoundland since the moratorium.

Prior to 1992, North Atlantic cod was king of the world's whitefish production, which Newfoundland has benefited from since the early Europeans began drying and salting fish along our shores in 1497. However, world production and consumption of whitefish have evolved significantly since the moratorium. Although North Atlantic cod continues to be the preferred whitefish for discerning consumers, it has lost its dominance of world whitefish production, primarily to Alaskan and Russian pollock. In 2016, the 1.4 million tonnes of North Atlantic cod that will be captured represents only 18% of the eight million tonnes of whitefish that will be harvested globally.

The disposition of world markets for North Atlantic cod has also changed significantly since the moratorium. From the late 1950s, when freezing technology was introduced, through to the moratorium, the majority of Newfoundland cod was produced in cod blocks and sold in North America. This market no longer exists. Today, North America represents approximately 5% of the world market for North Atlantic cod. The primary market for premium quality North Atlantic cod in fresh and frozen form is the United Kingdom and western Europe. Icewater sells 90% of its production in the European market and competes with the top producers from Iceland and Norway, where sustainability has been a focus for many years.

Actually, it was the announcement of the moratorium in 1992 that was the genesis of the Marine Stewardship Council, which has become the largest certifier of sustainable seafood in the world. To be blunt, world markets do not need or defer to the mere 4,000 tonnes of northern cod captured in 2015. However, for Icewater, this raw material complemented our existing supply and allowed us to further develop our market presence in high-end European markets.

This is not to say that there is no future for northern cod. In fact, it is quite the opposite. Provided we do this right—that is, we focus on quality and allow the stock to build—northern cod could indeed be the future of the Newfoundland fishing industry. It is with this in mind that I remind you of the following.

The latest Department of Fisheries and Oceans stock assessment for northern cod, which was released in May 2016, shows that the stock is only at 34% of the lower limit reference point, the point below which the stock is at risk of serious, long-term impairment of productivity. Under DFO's precautionary framework, removal should be kept to the lowest level possible, and the very concept of a commercial fishery is inconsistent with the reality.

There is no doubt that the stock has experienced significant growth in the last five years. It is also indisputable that much of this growth has been derived by a limited number of relatively strong year classes that have appeared as an anomaly and have not been experienced since.

Unless these year classes are allowed to grow and develop into spawning stock and contribute to future recruitment, we could easily revert to the same cycle of collapse as in our recent past. We must, as required by the department's own policy, keep removals at an absolute minimum. If catches are allowed to increase too soon, we will crop off the growth and will for the third time in 25 years lose the opportunity to realize the full potential of the northern cod stocks.

In fisheries, we often base our removals on an assessment of how the fish we catch today may impact our population next year, the year after, and even out 10 years. With northern cod, DFO has adopted a model that is unable to see beyond three years because of stochastic error associated with the model formulation. This limitation forces management decisions to be undertaken without an assessment of what the impacts may be over the medium and long-term horizon. This is clearly problematic, especially when we are only at 34% of the lower limit reference point.

To return to a previous point, prior to the moratorium, the Newfoundland processing industry was production-driven; that is, it produced primarily cod blocks and salted products, which did not require premium-quality raw material.

However, to compete in today's market for premium-quality cod, we must start with sustainably sourced, premium-quality raw material. In this new market, the Newfoundland processing industry must be market driven; that is, we must produce products demanded by the market and must focus on the products that yield the highest value for all steps in the value chain. A premium-quality raw material can only come from a balanced offshore—fall-winter—and inshore—spring-early summer—fishery. We must remember that the northern cod stock is migratory; that is, it spawns in the early spring in the offshore area and migrates to the inshore to feed during the summer months, returning to the offshore areas in the fall.

We understand that various fisheries ministers and department officials have commented that priority access will be granted to inshore for up to the first 115,000 tonnes of northern cod as the fishery recovers.

Priority, however, does not mean exclusivity. From a historical perspective, the greater-than-100-foot fishery is one of the key components to keeping plants operating year-round in Newfoundland. In a recent history of northern cod fishery prepared by a former RDG of the Newfoundland region, it was highlighted that from 1977 to 1992 the greater-than-100-foot sector landed approximately 40% of the total Canadian northern cod landings.

The minister's recent comment that his government would honour any prior commitments to the inshore regarding access as the fishery recovers has been interpreted by some to mean exclusive access. Without an offshore component to the fishery, we cannot maximize the value from our northern cod fishery as it recovers.

One lesson learned from the moratorium is that fisheries managers need the best science available to them when making multi-year management decisions. The northern cod stock covers a very large area, with more than one genetically distinct stock. Although it has been well studied, there are some key deficiencies that exist with our understanding of where it resides, how and when it moves, and its vulnerability to the fishery.

For this reason, and to ensure we are able to fish the stock sustainably and gain MSC certification in the future, the Groundfish Enterprise Allocation Council and the Association of Seafood Producers began a fisheries improvement project for northern cod in 2015. The five-year work plan has a budget of $11.7 million and will result in our having the best understanding of the stock that modern science permits. To date, the fisheries improvement project has funded the development of assessment and simulation models, genetic identification of stock components, and work towards the development of a large-scale acoustic tracking array.

In fact, a recent announcement by this government on the Ocean Frontier Institute included a partnership with our fisheries improvement project that will significantly further our efforts to achieve sustainable management of the stock. For this, I and our partners thank you.

The work on our fisheries improvement project has highlighted one key risk: if the productivity of the stock remains low, the population is likely to decline again. Any fishing will increase that risk. In a more positive vein, the stock may indeed continue to grow if capelin production improves and we truly keep levels to a minimum. If this is the case, we could achieve the limit reference point within five to ten years. At that point, the stock will be ready to support a commercial fishery that is sustainably certified and can compete in the world markets.

Thank you for your consideration and time.

[The Chair, Liberal, Scott Simms]

Thank you, Mr. Wareham.

Mr. Sullivan, please, for 10 minutes or less.