Fisheries Committee on April 26th, 2018

[The Chair, Mrs. Bernadette Jordan (South Shore—St. Margarets, Lib.)]

Good morning, everyone. Welcome to meeting number 97 of the Standing Committee on Fisheries and Oceans. Pursuant to the order of reference of Monday, April 16, 2018, we are dealing with Bill C-68, an act to amend the Fisheries Act and other Acts in consequence.

Before we get started I would like to welcome today, from Burnaby South, Kennedy Stewart.

Mr. Stewart, welcome.

Elizabeth May, from Saanich—Gulf Islands, thank you for joining us this morning.

And we have Colin Fraser, from West Nova, so we have a whole bunch of new people here today.

We're going to get right into our testimony. We have, from Save Our BC Fisheries, Duncan Cameron, and also from Ecotrust Canada, Tasha Sutcliffe, for the first hour of testimony.

We're going to start with Mr. Cameron, for 10 minutes please, with his opening statement.

[Duncan Cameron, Skipper, Save Our BC Fisheries]

Thank you, Madam Chair, for having me here today to share the story from the Pacific coast.

My name is Duncan Cameron. I'm a fourth-generation fisherman from Pender Harbour, British Columbia. I grew up fishing with my dad for salmon, halibut, and herring spawn on kelp. At 18 I started running my own fishing boat while studying at marine school for my 60-tonne, and a few years later my 150-tonne, ticket.

Although I really enjoyed fishing it was hard for me to see a future in it and entry to fisheries beyond salmon were too rich for my blood, and the price at the dock was very poor compared to the price at the fish counter. I started working in other parts of the marine industry and found myself a good union job with a tugboat company at 20 years old. It paid well, had good benefits, lots of time off, and I got to be on the water.

Unfortunately, it wasn't fishing. I returned to fishing at 22 and am 30 now, and in any given year I may fish halibut, salmon, spot prawns, and Dungeness crab. In the last 10 years licences have only become more unaffordable. I own two boats and have to lease all the licences I fish with. I am lucky enough to come from a family that has fishing licences and it is really the only way I've made it this far in fishing. My father leases me his halibut at a more generous rate than the industry standard, and has let me use his boat as collateral while I have taken loans out over the last 10 years.

There is no real succession plan here that could take place for halibut ITQs to me. He could set up a lease-to-own framework where he would give me a very attractive lease rate, but this is a gift, not a succession plan. A lot of the stories you hear from the west coast are just that. Very few young people are left, and almost every one comes from a fishing family with licences. There is a saying on the Pacific that if you want to make a million dollars in fishing you should start with $2 million.

That does not have to be the future we choose, though, and that is why I am here today to thank you for working on a bill that supports independent fish harvesters, including economic and social and cultural factors.

Let me tell you a little more about Pender Harbour, where I grew up. Pender Harbour used to be primarily a fishing and logging community. Sustainable primary industries funnelled money through the community, creating all sorts of secondary economies. At one point there were seven boat-building companies operating out of Pender Harbour. Many of the hulls you see on the B.C. coast and in Alaska originated from Pender Harbour. Within this vibrant economy there was a great sense of community, tradition, and respect for the ocean.

Now if you cruise around the harbour, it's mostly mansions with blinded up windows. Please do not confuse us with a failed industry asking for a bailout. This is an industry with a failed policy and we are suffocating underneath. With the correction of this policy we can bring life back to coastal communities.

After hearing this, it probably sounds like another story you've heard too many times, so let's get down to the facts. Under this current policy the value is no longer in the catch, but in licences or quota. Catching fish is simply a marginal cost to licence-holders and quota holders. Even fishermen who invested in quota just to lease out can no longer see the point when they are competing with a seafood company that has revenue streams other than just leasing. If this is not stopped, it is only the beginning of consolidation. I don't think I need to tell you where a consolidation cycle will end up when we are already seeing corporations abroad settle for lower returns on investment in our industry. On that I am referring to the recent sale of ITQs for over $50 million in one sale abroad.

Now I would like to refer you to an example of a new entrant, or someone who already has halibut quota, trying to buy more halibut. The prices I am citing here are the current prices for this week, roughly. It can be hard to gauge the actual price of buying quota because this time of year it doesn't move very often, so I've put it between $100 and $115 and chosen the low end for my example. The lease price this year has come down because the dock price has come down and the difference between the two is basically the bare minimum. The dock price here is $7, the lease price is between $5 to $5.50.

In my scenario here, a fisherman or a new entrant takes a loan out to purchase 10,000 pounds of halibut quota. Let's assume that the person can make a 20% down payment and that he will get the low end of the price at $100 per pound. To give this scenario a fighting chance, let's also assume that the person also has a boat with a video monitoring system and all the required gear. Please note that only a few banks will actually make this loan on any fishing privileges or halibut quota and the collateral would likely be set at 60% of the actual market value due to conditions with licensing. There would need to be significant collateral put up in addition. Let's assume that, being at $100 per pound, the interest rate is 5% for ease of math, and the payback period is 10 years, which, in my opinion, is quite a long period in what is a very dangerous industry.

So this person heads out on a trip to catch their new 10,000 pounds, and it's a great success. They avoid incidental bycatch, and have no gear loss or unexpected costs. The landed value is $70,000. Now let's remove expenses: bait, $1,000; monitoring, $1,500; fuel, $1,500; and food, $300. Once again, these are just estimates. Here comes the big expense—$50,000 to the quota holder.

Because of the high cost of buying halibut quota, it is pretty standard that the owner will take the market lease off the top before dividing up crew and boat shares if that quota has recently been purchased. People who outright own their quota already may do the same, or may give the crew a bigger share off the top. So we'll set the boat share at a relatively small share of 25%, the skipper share at 35%, and the two deckhands at 20% each.

Now that the trip is over we have to make a boat payment. On this loan for $1 million, with $200,000 down, and $800,000 remaining at 5%, there is a $40,000 interest payment to be made the first year, and an $80,000 principal payment.

The only problem is that even with the $50,000 taken off the top, and if the skipper takes all his income and the boat's income and puts it towards this payment, it adds up to $59,420, which is half of the required payment for the first year.

These prices are based on estimates on April 24, 2018, and the sharing landed value left over after expenses can differ from boat to boat.

I've heard several times that this bill will be permissible, and that it will be up to the fishermen to put this legislation to work. But how can we do that if licence-holders decide how the fisheries will be managed? You'll be giving us a vehicle to get where we want to go by giving the keys to the people who already have control over us.

I would like to ask if you could please change the wording in the act to support active fishermen, not just licence-holders. Can you please define what is an inshore fleet for B.C.? And can you please give clear direction when this bill passes, and I hope it does, to the Pacific region that we are going in a new direction and away from the toxic policy that we already have?

I think I have a couple of minutes left and I know you've heard a lot about owner-operator policy, and I'll just quickly touch on another change to the act here because I know it's a very broad act.

I'd like to talk now about something you're putting forward that I do not agree with whatsoever and I think it will cause further disconnect between the DFO and coastal communities. The change to give more power to enforcement officers will not help our coast. I understand the idea of giving them a big stick if it's used cautiously, but that is not what happens here. They have been irresponsible with their power time and time again.

Where I fish in the central and north coast of B.C. they are often only in a field office for one or two years after transferring. When they first arrive they often do not understand the conditions of licences properly for the local fisheries, and intimidate people, not understanding any of the science. Most of our fisheries are already fiercely monitored. I am engaged in an Area B Dungeness crab fishery. We are monitored any time we are on deck, by video, RFID scanner, hydraulic sensor, GPS, and speed indicators. All the data is uploaded to a cellular modem and audited to our service provider, who we pay heavy fees to already. The people who audit the footage have a very clear understanding of both the management plan and conditions of licence. Infractions are reported to the operator of the boat and the manager. Giving more power to fisheries officers is only going to create tension on the water and we already have monitoring in place.

I truly beg you to consider properly funding the charter patrolman program instead. It has been gutted down to nothing. I cannot think of a more important job on our coast than charter patrolman. I would encourage you to research more about this program. People from other countries are even doing documentaries on them now as they see what an important role they play in our ecosystem, even though there are only a few left. I have grown up watching them being replaced by people with handguns and bulletproof vests who bully people around with conditions of licence they don't even understand.

Thank you so much for your time. I realize this was short, so if you have any questions on other topics or changes to the act, I would gladly answer them in question period. Thank you.

[The Chair]

Thank you very much, Mr. Duncan. You still had 30 seconds left, so you did well.

Ms. Sutcliffe, for 10 minutes, please.

[Tasha Sutcliffe, Vice-President, Programs, Ecotrust Canada]

Good morning.

Thank you, Madam Chair, for having me here today.

My name is Tasha Sutcliffe. I'm the Vice-President of Ecotrust Canada. I also grew up in a fishing family. I spent my first birthday on a salmon troller, and I have spent my working life in fisheries and with the people and communities reliant on them.

Twenty-four years ago Ecotrust Canada came together, powered by the vision of people and nature thriving together. We believe that Canada's rural and remote communities can create vibrant and prosperous livelihoods and greater well-being through the use, stewardship, and co-management of local natural resources.

Much of our work has been focused on fisheries in rural communities on the Pacific coast, where we have worked to co-create sustainable fisheries solutions, such as licence banks, traceability, small fishing loan funds, and first nations-led monitoring.

Today I'm here to speak in favour of Bill C-68 as legislation that stands to improve the Fisheries Act, and to affirm that fisheries and fish harvesters must have the same opportunities on all coasts.

First, I have some general comments on the bill.

At Ecotrust Canada we applaud the recognition of indigenous traditional knowledge for consideration in decision-making, the new ability of indigenous governing bodies to enter into an agreement with the minister, and the commitment to consider any adverse effects that a decision by the minister may have on the rights of indigenous peoples. We also applaud that traditional knowledge, in a more general sense, can include the knowledge of harvesters who have been working the coast for generations.

We are heartened by the new definitions of “fish habitat” and of “fishery”, which return protective measures to all fish and their habitat, not just those that are of commercial interest. This will help maintain the health of the ecosystem and, in turn, the many tangible and intangible benefits a healthy ecosystem provides.

Additionally, Bill C-68 introduces important new considerations for decision-making by the minister, all of which are important to viable fisheries, ecosystems, and coastal communities, and all of which are inextricably linked.

On the addition of social, cultural, and economic considerations, we emphatically endorse the inclusion of social, economic, and cultural factors for consideration by the minister in the management of fisheries, and our hope is that this will lead to greater parity between the Atlantic and Pacific regions. Our experience tells us that these considerations in the management of fisheries in coastal B.C. are necessary to help rebuild sustainable economies, local jobs, and thriving coastal communities that will help current and future generations of harvesters on the west coast.

To protect access for fish harvesters and communities, we recommend that the language in the bill not limit such considerations to “inshore fisheries” only. Though inclusion of this term is applicable in Atlantic Canada, we must ensure that the language does not exclude fish harvesters in the Arctic or the Pacific. For instance, it will be necessary to consult independent fish harvesters in the Pacific region to determine appropriate terminology and parallel policy if this is a prerequisite to the inclusion of social, economic, and cultural considerations in the management of the fishery.

On the independence of fish harvesters, the openly transferable, unregulated, and non-transparent market for licences and quota in B.C. has invited speculative investors and corporate consolidation of licences and quota, including by offshore interests. This has seriously impeded the independence and viability of our skippers and crew, as you have heard from others.

We applaud the insertion, in subsection 43(1), of a new scope of regulation under the Fisheries Act to address circumstances that would tie the licence to fish with a requirement to personally carry out any activity authorized by the licence. This, combined with a new ability to make regulations that would prohibit the transfer of licences except under prescribed conditions, can strengthen owner-operator and fleet separation policies, preserving the independence of those with fishing licences and enabling them to enjoy the full economic benefits from their labour.

The key term needing clarity to ensure that this clause would achieve its intended benefit is “licence holders”. We assume here that this is meant to refer to fish harvesters. This, however, is not a given, especially in B.C., where licence-holders are increasingly not fish harvesters. We recommend that this term be replaced with “fish harvesters”. Furthermore, as these clauses refer to where these restrictions already exist, this emphasizes the need to review current policy in the Pacific region and to understand how policy reform can occur on a fishery-by-fishery basis.

On the need for a stronger and more inclusive future for B.C.'s future, at Ecotrust we have observed, through our research and our close ties to coastal communities and fish harvesters, that unrestricted transferable quotas and licences have not worked for them. We have seen increasing and untenable debt loads, an aging industry, and a dramatic loss of jobs and incomes. Recent analysis of Statistics Canada tax filer data reveals that in 2015 the average fishing income for B.C. fish harvesters was $19,100, which is less than half the average fishing income earned by Atlantic Canada's fish harvesters of $42,795.

Over the period of 2000 to 2015, average income from fishing employment in B.C. dropped 28% in constant dollars, while the Atlantic provinces combined saw an increase of 45% after inflation in fishing incomes. It might be suggested that this drop in income for B.C. must be due to a collapse of the fishery or an equivalent loss in landed value. However, B.C. landings did not decline over that period. In fact, they slightly increased. They did lose 25% in market value, but the loss in total employment income for the industry was over 40%. There was also an 18% decline in that period in fish harvester jobs, which is nothing compared to the drop that we've seen over a longer period of time. Clearly, by the numbers and facts, the objective to increase incomes and improve enterprise viability through ITQs and fleet rationalization is not being achieved.

We know that sustainable small-scale fisheries can provide multiple benefits to their communities. Fish harvesters are small businesses. They run operations, employ crew, buy local supplies, and give back to community, ensuring that their family members, community members, and country members have healthy and high-quality foods, and they risk their lives to do so. There are many layers of value, from the landed value all the way through to a host of impactful, intangible values such as intergenerational knowledge transfer, gift and trade of food, and local stewardship.

These are all compromised under the current policy framework in the Pacific. In B.C., fish harvesters are struggling, as landed value is increasingly going to the non-fishing licence owner rather than active harvesters. Wholesale value and local employment are lost as processing leaves adjacent communities, and the less tangible benefits of the fishery that have formed the fabric of the coast for generations, and for first nations since time immemorial, are being eroded.

As you've heard already from others, change is needed. We need to transition respectfully and responsibly to an industry that young people can get into and thrive in for generations to come. In February of this year, we convened, along with our partners, a large and diverse gathering of food harvesters, organizations, and community groups. Among the over 120 participants were young and old fishermen, coastal community mayors, first nations leaders, academics, and environmental organizations. Despite the diverse perspectives and interests in the room, the gathering came to agreement on the need for fisheries policy reform in the Pacific region, and drafted the following consensus request:

That the Minister of Fisheries, Oceans and the Canadian Coast Guard, perform an independent review of BC commercial fisheries licensing policy, built on a transparent & inclusive process, to:

a) Ensure fisheries licensing policy in the Pacific region supports independent fish harvesters, First Nations, and the revival of rural fishing communities, and

b) Determine how “social, economic, and cultural” objectives are to be achieved in Pacific region fisheries.

It is our hope that this committee will support and actively engage in such a review.

The gathering also came to agreement on a list of principles for policy reform that can easily be translated into a vision for the future of Pacific coast fisheries. These can be found in the proceedings report I have provided to the committee clerk, and I hope you'll read these.

I want to express that although the language of the bill is permissive for B.C. to push for change, there's a need for leadership by government to explore options, help bring people together, and develop consensus across the industry on ways to address these challenges and move forward.

In conclusion, we believe that Bill C-68 represents a unique and powerful opportunity to achieve positive change for first nations, active fish harvesters, and fishing communities in British Columbia. To enable this, we hope you will consider these simple language changes that can create opportunities for better implementation. We urge you to remember the voices of the young B.C. harvesters you've heard—Chelsey, Cailyn, James, and Duncan—as they represent a positive future for our fisheries.

Finally, we will continue to offer our expertise, research, and analysis in any way we can to support our community partners and the government in working hard on the common goal of creating a fair, prosperous and sustainable Canadian fishery from coast to coast to coast.

Thank you again for the opportunity to appear here before you today.

[The Chair]

Thank you, Ms. Sutcliffe.

We will now go to the government side for questions.

For the first seven minutes we have Mr. Hardie, please.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, Madam Chair.

Thank you to the two of you. Your testimony, along with what we heard on Tuesday, has introduced a very clear west coast perspective to this conversation, something that has been missing in many of our conversations so far.

While I do want to go into the owner-operator thing, but as you suggest, Ms. Sutcliffe, that's worth a study on its own. I want to go back, then, to the purpose of these hearings, which is to study the bill itself.

My first question is for you, Duncan. You mentioned that the only thing that gives you cause for concern is allowing more power to enforcement officers. Is this an issue of training, orientation, sensitivity, knowledge building, or just oversight?

[Duncan Cameron]

I don't think it's oversight. The issue begins with capacity on the lower end and data collection and science. To have proper management plans that the enforcement officer is enforcing, we have to have proper science and data to create those management plans. When we don't even have that part and are limited in capacity in the actual management plan, then people are going to enforce a management plan that barely gets put out in time for the fishery. The manager has no capacity to bring in enforcement officers and say, “These are a few conditions of licence we'd like to enforce this year and why”, and so they pull from this large list of conditions. Maybe it's that your bait cup screws should be on rather than the clips on, and they find that in the condition of licence.

I'm a northern crab fisherman. A condition of licence that we have is that our traps can only soak for 18 days. There is no biological reason for that, but the reason is to prevent people from having their gear for too long. There is a possibility if there is very heavy crab they may cannibalize themselves, but the main issue is littering. Last year a partner of mine was caught in bad weather and he let his gear soak for an additional eight days and then got the gear when the weather calmed down, and he was charged more than $40,000, I believe, for that offence.

They want to do their job, and it's nothing against enforcement. I don't know where the disconnect truly lies, but I believe it's in communication and building better data and science to steer that management plan in a better direction to communicate with enforcement.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Talk to me about the charter patrolmen you mentioned.

[Duncan Cameron]

When I was younger, there were more charter patrolmen. Basically a charter patrolman had some mild enforcement capabilities, but they would go around and walk in salmon streams, or if the herring were spawning, they'd go out and sound for herring. They would usually live in the area they monitored the whole year, or a better part of the year, and they would spend a good part of their career there, so they had true continuity in their view of the ecosystem. Say one year there are no prawns in an inlet for some reason and no one can understand why. Maybe the charter patrolman was there when three humpback whales were rearing and they were eating shrimp, right—

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

What was the interaction between the fishers and these—

[Duncan Cameron]

They would also work for monitoring companies, say JO Thomas and Associates. They would monitor our roe on kelp or spawn on kelp fishery so they'd be there watching how many plants we put in the water, which we had to report. They'd be sounding the herring and delivering that to DFO and the monitoring company.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

What was the relationship, though? You mentioned they had mild enforcement powers. What would they do, and what was the nature of the relationship between these patrolmen and the fishers? Was it helpful? Was it consultative, or was it just enforcement?

[Duncan Cameron]

It was a much more positive relationship. If you were violating a condition of licence, they were going to tell you about it, but it was positive. They would come on the boat for coffee in the morning and talk about maybe where they'd seen herring or how there weren't enough coho in a stream. It was a very positive relationship and they had a good relationship with the community.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Okay, in the time I have left I have a quick question for you, Ms. Sutcliffe. How do we go about unwinding the current system, if, in the fullness of time, we want to transition more toward the east coast model on the west coast?

[Tasha Sutcliffe]

That's a big question. Thank you for asking it.

I would preface my remarks by saying that engaging in conversation with the communities and the harvesters who really have answers to all the complexities within their fisheries is critical, but I would say there are real, tangible examples out there for how to transition industries not just in fisheries but elsewhere. Of course, we have our PIIFCAF example. There are examples in the meat industry. There are examples around the world, and thinking about different mechanisms to transition ownership from the current licence-holder up to active fishermen is a doable proposition.

There are mechanisms through [Inaudible--Editor] that have been used. There are popular mechanisms around gradually reducing allocation over time. If you're leasing, that can go into a pool that can be reallocated to owner-operators. There are tax mechanisms.

What really has to happen in addition to the review that we're asking for is that we need the government to start helping to lead and engage in doing the research to try to figure out what those alternatives are. But really, they're going to have to be informed by harvesters, because it will be different fishery by fishery in B.C. There are different conditions and it's quite a tangled mess right now.

We will be providing a brief with more details from Ecotrust Canada's perspective. We will include some of that information in the brief as well.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Very good. I wish I had more time. I have lots more questions.

[The Chair]

You have another minute.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Do I?

Okay, let's turn this on its head. Who, on the water, likes the current system and why?

[Tasha Sutcliffe]

On the water? Not a lot of people on the water like the current system. There are fish harvesters who are quite invested in the fishery right now and there are a lot of fisheries that are not very viable, so people are relying on the opportunity to sell their assets, and the value of those assets for retirement. That's why we talk about a respectful, responsible transition. Most of the people who are concerned are worried about transition. They're worried about the only value they can see that they can get out of the fishery any more, being from the sale of assets.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Could I just ask Duncan for a quick response?

[Duncan Cameron]

Sure, I'll just do a quick, two-part response.

First, the one answer that you get a lot of the time that's incorrect is that corporations have to own ITQs and that that's needed in the groundfish fishery. People can own ITQs. We can trade yelloweye to operate in the groundfish fishery.

Second, a lot of people are worried because they bought into a system where their return on investment from simply fishing isn't good enough, and have had to buy into these ITQs for their retirement. They're reliant on this is as a retirement tool, for their family and education and everything, so you have to unwind that in a way where their retirement isn't—

[The Chair]

I'm sorry, Mr. Cameron, I'm going to have to stop you there. Maybe somebody else can let you finish that thought.

Up next, we're going to Mr. Doherty for seven minutes, please.

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

Thank you, Madam Chair.

I want to start by confirming something for the committee. Ms. Sutcliffe mentioned a report that had been done previously and said that we had received it. Are we are in receipt of that and will it be circulated to all members of the committee?

[The Chair]

That's correct.

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

Thank you.

I'd be very interested in looking at that report.

To both of our guests today, is it your testimony today that government policy has not been applied equally on east coast versus west coast?