Fisheries Committee on Oct. 31st, 2017

[David Bevan]

Again, that's their decision. We indicated to the government that we would do our best to maintain the value in the corporation, to maintain our obligation and meet our obligation to fishers to maximize the value of return to them. That's what we said we would do, pending their decision as to what way they want to go moving forward, but that is entirely up to them.

[Stan Lazar]

Can I add to that?

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

Sure.

[Stan Lazar]

What we came here to demonstrate is that, as we said, we have addressed the deficiencies that the Auditor General addressed to Freshwater Fish, those we have full control of. I don't think we can sit here and say we're going to have a full board in two weeks or in two months, because those decisions are with the Government of Canada. The board and management are here to demonstrate that, based on what the Auditor General has told us, we are addressing those specific recommendations.

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

To finish in two minutes, in following up on Ms. Jordan's comment, you're recommending to continue with what we would look at as a broken model but you fixed it, as opposed to modernizing and maybe looking at different models. Would you say that this business model, moving forward, is working now?

[David Bevan]

It's working at this moment under these conditions. We're going to be in an open market going forward, and the question is, what's the best model under those circumstances? Even with Air Canada, it didn't last indefinitely. They were privatized over the course of a few years after things had changed. It's up to the government to decide. Our duty to government and taxpayers is to maintain the value, pending that conclusion. We'll live with whatever is determined by the Government of Canada.

We are going to have some challenges going forward if people cherry-pick value and impact on the profitability. We would hope a decision would be made as to what they're going to do while we still have a good fiscal situation, where we have high retained earnings and are making money. That's when they need to determine what they want to do going forward, while we're still in a solid position. The longer the delay, the more risk will be accruing to the corporation as a result of open market competition.

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

Thank you, Mr. Chair.

[The Chair, Liberal, Scott Simms]

Now we go to Mr. Finnigan for seven minutes, please.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

Thank you, Mr. Lazar and Mr. Bevan, for being here today.

I just want to clear up something. The board vacancies haven't happened just recently. I think we've heard the Auditor General say that there were vacancies in May 2015. How long has this been a problem?

[David Bevan]

It has been a problem for some time. There were three of us appointed in late February 2016, but even with that, there were still outstanding vacancies. Since that time, two of those appointees have resigned, and we've had one person come on board. It's a persistent problem.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

It has been an ongoing problem for some years, not just for this government.

[David Bevan]

Yes.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Being a businessperson myself—not with fish, but at the end of the day it doesn't really matter—I don't know of many organizations that could have survived an adverse report like that and still shown a profit. It's amazing that it has. Do you think that the complacency of the people on the board, just looking at the file numbers, may have had something to do with this?

I can tell you that, if this were a private corporation and you saw the lack of policies or implementation of the strategic plan, that wouldn't have happened. If the stakeholders on the board had some gain to be had from the profit, I don't think that would have happened.

Could you comment on that?

[David Bevan]

Clearly, as a crown corporation, it has fixed remuneration for board members. It's not quite a volunteer program, but almost, in terms of the remuneration. During this audit, board members were not sitting on their laurels. They were actually working very hard to bring to the attention of the government the nature of the problems that were identified in the audit and to get the government to take action, which they did.

The board members were being active, writing to the Government of Canada saying, “Here is what's going on. Will you please address these issues?” Again, they did. It's just incredible timing that the audit took place exactly at that time. There was a real problem, and we did not have maximum performance.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Would you say that perhaps the model is not right, then? If this had been a private corporation or a co-operative, or a model that could have had a turnaround much faster, would you say that this could have been avoided and the performance would have been better?

[David Bevan]

There could have been a quicker.... Under the model we operate in, we do not hire, nor can we dismiss, a president. We can't appoint board members, etc. We are constrained by the legal framework that we work within. It takes more time to bring the problem to the government, and then to get the government to come back with a solution.

It takes more time than it would if we had a situation where equipment is bought without due process and people are let go and hired without due process. There would have been action much more quickly in the private sector, because they have the authority to do so.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

I'm sure that back in 1969, when that was put in place, it was probably a good thing to have such a corporation, when it was able to find markets for all those fish and to concentrate the efforts and everything. It's had successful years.

Would you say that maybe today another model would...one that, again, can turn around a bit faster and maybe not depend on appointments from the current government?

[David Bevan]

I think there are alternatives. If you were to privatize it, the difficulty there would be access to the market for those northern indigenous communities. If there are other potential models that could be considered by the government.... Again, it is not my position to tell the government what to do in terms of policy. Our job is to keep the wheels on and keep the money coming into the corporation and out to the fishermen. That's what the job is, in the short term, and hopefully we'll be told what the longer term is in due process.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

Slowly we're seeing some of the controls that the company once had starting to be eroded. We're seeing that—I have a comment here—the Government of the Northwest Territories has expressed interest in negotiating “an agreement with the Fresh Water Fish Marketing Corporation to access markets outside...NWT [and] seek federal funding to build a new...processing plant in Hay River”.

How is that building going to affect your operation? That's directly competing with what you're doing now.

[David Bevan]

They are about 2% of our supply.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

It's not a huge.... Okay.

How many Manitoba fishers have signed contracts so far, and how much fish does it presently guarantee?

[David Bevan]

It's about 80%.

[Stan Lazar]

About 80% of Manitoba fishers have signed contracts as of today.

[Pat Finnigan, Liberal, Miramichi—Grand Lake, NB]

That's even though they're going to step out of the—

[Stan Lazar]

Yes.