Fisheries Committee on June 16th, 2020

[The Chair, Liberal, Ken McDonald]

I call this meeting to order.

Welcome to meeting number 10 of the House of Commons Standing Committee on Fisheries and Oceans. Pursuant to the motion adopted by the House on May 26, 2020, Standing Order 108(2) and the motion adopted on June 1, 2020, the committee is resuming its study of the impacts of COVID-19 on fishing industry stakeholders.

Today's meeting is taking place via video conference. The proceedings are public and are made available via the House of Commons website. So that you are aware, I will tell you that the webcast will show the person speaking rather than the entire committee.

We had to modify our witnesses at 1 p.m. eastern time because some were unable to connect with us. They were informed that they can send us briefs in writing. Some other witnesses have not been in touch with us to test their connection and sound as we normally ask the witnesses to do. If the connection is difficult or impossible with some of the witnesses, or if the sound is bad and interpretation cannot be done, the witnesses will have to send their statements to the clerk, who will distribute them to all members. Members could also ask that some questions be answered in writing if the witnesses accept to do so.

For the benefit of all members, but also our witnesses who participate in a House of Commons virtual committee meeting for the first time, I should remind you all of a few rules to follow.

Interpretation in this video conference will work very much like in a regular committee meeting. You have the choice at the bottom of your screen of floor, English or French. As you are speaking, if you plan to alternate from one language to the other, you will need to also switch the interpretation channel so that it aligns with the language you are speaking. You may want to allow for a short pause when switching languages. Before speaking, please wait until I recognize you by name. When you are ready to speak, you can click on the microphone icon to activate your mike.

Should members have a point of order, they should activate their mike and state that they have a point of order. If a member wishes to intervene on a point of order that has been raised by another member, I encourage him or her to use the “raise hand” function. In order to do so, you should click on “Participants” at the bottom of the screen. When the list pops up, you will see next to your name that you can click “raise hand”. This will signal to the chair your interest to speak. We will keep your names in chronological order.

When you are not speaking, your mike should be on mute. The use of headsets is strongly encouraged.

Finally, when speaking, please speak slowly and clearly. This might be especially important today. Our witnesses are not necessarily with us from offices with high-speed Internet and high-tech equipment. We will try to do our best, and this could mean talking more slowly than usual.

Should any technical challenge arise, for example, in relation to interpretation or if a problem with audio arises, please advise the chair immediately and the technical team will work to resolve it. Please note that we may need to suspend during these times as we need to ensure that all members are able to participate fully.

Before we get started, would everyone click on their screen in the top right-hand corner and ensure that they are on gallery view. With this view, you should be able to see all the participants in a grid view. It will ensure that all video participants can see one another.

I would now like to welcome our witnesses for today.

With us are Jean Lanteigne, director general, Fédération régionale acadienne des pêcheurs professionnels; and Paul Lansbergen, president of the Fisheries Council of Canada.

I know, Paul, that you've appeared before committee many times.

I'll go to Mr. Lanteigne first.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Ken McDonald]

Yes.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

I'm sorry to interrupt, Mr. Chair, but my camera isn't working. I'm wondering if it's possible to disconnect and reconnect.

I'd also like some clarification. I know there have been some changes to the list of witnesses for today. Could you explain to the committee why some witnesses weren't able to join the meeting?

So, can I disconnect and reconnect?

[The Chair, Liberal, Ken McDonald]

Yes.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Perfect. Thank you.

[The Chair, Liberal, Ken McDonald]

We'll suspend for a moment if you're doing that.

[The Clerk of the Committee, Ms. Nancy Vohl]

Mr. Chair, you don't have to suspend. You can reconnect very quickly.

[The Chair, Liberal, Ken McDonald]

Okay, I'll wait for him to reconnect, because he did have a question about some witnesses who are not appearing. I'll answer that as soon as he reconnects.

[The Clerk]

There we go.

Mr. Cormier is with us.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Mr. Chair, my camera is not working. Do you want to call IT services?

Maybe you want to continue.

[The Chair, Liberal, Ken McDonald]

Yes, we will continue.

You can listen to the audio. We don't necessarily have to see your face.

If you still want to participate or if you want to call IT, you certainly can.

I'll just answer one question that you did have, Mr. Cormier, with regard to witnesses who are on the list but are not appearing today, or who didn't have the opportunity or whatever.

The staff earlier in the day, I think around 11:30 this morning, contacted one witness in particular. The Internet connection was not stable, so they couldn't do the usual tests to get things done. They advised that the testimony can be sent in writing and that it will be distributed to all the members.

It's very difficult. I think that one of the challenges in doing the meetings the way we're doing them is the fact that people have to have a stable Internet connection to be able to participate properly, by voice only and as well by video conference.

We'll keep working on that. We will try to make sure, if we can, to include the witnesses as we move forward with this study. We'll do everything possible to make sure that the witnesses have an opportunity to testify by video conference, if at all possible. I hope that answers your question.

Now we'll go to Jean Lanteigne.

You have six minutes or less for your opening statement, please.

[Jean Lanteigne, Director General, Fédération régionale acadienne des pêcheurs professionnels]

Good afternoon, everyone.

The Fédération régionale acadienne des pêcheurs professionnels, or FRAPP, proud of its 52 years of existence, represents nearly 200 fishers grouped into three associations: the Association des pêcheurs professionnels crabiers acadiens, the Association des crevettiers acadiens du golfe and the Association des pêcheurs professionnels membres d'équipage. They are located in Shippagan, on the Acadian peninsula in New Brunswick.

To maximize the time available to us, I'm going to get right to the heart of the matter by giving you the specific context of our two midshore fisheries, namely, crab and shrimp. Our vessels range in length from 60 to 75 feet, with a crew of four to seven people. All crew members live, eat, and, with the exception of the captain, sleep in the same spaces.

You've heard of the problem with the physical distance requirement in lobster boats. Welcome to our fishing world, where trips at sea last from three to seven days, and sometimes eight days.

[The Clerk]

Mr. Lanteigne—

[Jean Lanteigne]

I can't hear you.

[The Chair, Liberal, Ken McDonald]

You're on mute, Nancy.

[The Clerk]

Mr. Lanteigne, if you speak in French, I'd ask you to choose French at the bottom of your screen. If you speak in English afterwards, please change channels at that time.

[Jean Lanteigne]

Our vessels range in length from 60 to 75 feet, with a crew of four to seven people. All crew members live, eat, and, with the exception of the captain, sleep in the same spaces.

You've heard of the problem with the physical distance requirement on lobster boats. Welcome to our fishing world, where trips at sea last from three to seven days, and sometimes eight days. It's cohabitation in its truest sense.

Surprisingly, these fishers did not show any apprehension, fear or stress, or at least very little, about the risk of being victims of this pandemic. Quite the opposite happened, as if it didn't concern them. They asked to go out to sea as quickly as possible. My member of Parliament, your colleague, Serge Cormier, can testify to that.

What hurts isn't having to comply with the public health rules that have been implemented on the maintenance sites of our ships, on our wharves and on the boats themselves. Like many other industries, it's the shrinking and, in many cases, disappearing markets that affect us. Senior management representatives of the Department of Fisheries and Oceans, or DFO, have come before you to testify to that.

As you know, the restaurant, cruise and casino buffet markets have all disappeared. In the case of snow crab, about 85% of our production is exported to the United States. However, because of its exclusivity, we are relatively fortunate and our producers are quite successful in marketing this product to some of the distributors in the food service sector and to large players in the retail sector, such as Clover Leaf. However, it's all been reduced by 50% compared with 2019. It's not the best case scenario, but unlike northern shrimp, the industry is working.

Let's talk about northern shrimp, an area where Canada became a big world player between 2010 and 2015. Unlike snow crab, competition for a share of this market on the world stage is very fierce, particularly because of the presence of aquaculture products from Asia and South America. Because this product is mainly exported to the United States, Scandinavian countries, the United Kingdom and China, our producers found themselves without any market this spring because of COVID-19.

Our fishing season, which starts in March on the Scotian Shelf and on April 1 in the gulf, has been delayed until last week. So we've lost 10 to 12 weeks of fishing. I might add that Newfoundland fishers still haven't reached an agreement with their producers to go fishing. In terms of prices, this becomes even more problematic as we are seeing declines of more than 50% compared to 2019. Is it profitable in this case? It's not. However, we'll have to wait until the end of the season to confirm this.

The fixed fee for these types of boats is in the order of $500,000 per year. Because of the shortened fishing season at this time, it will be extremely difficult, if not impossible, to be profitable under these conditions. The big unknown at the moment is related to the abundance of fishing. If the catch per unit of effort were good, that would help the situation. Our experience with late summer and early fall fishing has never been very conclusive. In fact, a trip to sea is about $42,000. Also, there are different price categories based on size. To add insult to injury, small shrimp is dominating the market in 2020. The price is about $0.80 a pound.

So, you have a very good idea of how much shrimp is needed per fishing trip so that we can avoid a deficit. In this context, as early as the end of March, we asked departmental officials to meet with us to find solutions. We didn't feel that we were heard, either by the Minister or by DFO senior management in Ottawa. After several attempts, we finally held a 30-minute conference call on June 4. To date, we have received no response to our requests. Attached to our document is a list of items that we discussed with DFO and the Government of Canada. These items relate primarily to expenditure reduction items, such as the cost of licences, and wage subsidies throughout the fishing season.

In terms of possible solutions, we believe in developing the Canadian market. For example, 80% of the shrimp consumed in Canada comes from outside the country, and our major grocery store chains promote Alaskan crab more often than Canadian snow crab. How should we proceed? We should either change the role of DFO to one of marketing or create a fish and seafood division within Agriculture and Agri-Food Canada to promote local consumption.

Existing distribution systems, which are largely focused on exports to targeted countries, also need to be reviewed with the industry. It's easier to ship 500 tonnes of shrimp or crab to China than it is to send 100,000 pounds to Loblaws in Toronto.

In terms of product diversification, while the food industry is changing and product offerings are increasingly varied, our processing plants are static in the productions offered to the market. We do volume in bulk. We're talking about boxes of cooked and frozen crab pieces weighing 11 kilograms, 15 kilograms, and sometimes even more. We're also talking about cooked and peeled shrimp, or cooked and frozen shrimp on factory ships in Newfoundland in 5-pound or 25-pound bags.

We sell to food producers and distributors. We've been talking about secondary and tertiary processing for a long time. We need a research strategy geared towards the use of our fisheries resources in order to maximize one hundred per cent of the fishing quotas.

In terms of research and development, we don't have any specialized research organizations or centres in Canada for this purpose. Some of them may do it on a particular project or idea, but overall it is very little. Look at the Icelandic model and its marine products research centre called Matis.

In closing, I think that, despite everything, we have been lucky so far—

[The Chair, Liberal, Ken McDonald]

Sorry, Monsieur Lanteigne, but we've gone over time. Anything you didn't get to say will, hopefully, come out in the line of questioning later. By all means we invite you to submit your statement as is to the committee.

We'll now go to you, Mr. Lansbergen, for six minutes or less for your opening remarks, sir.

[Paul Lansbergen, President, Fisheries Council of Canada]

Thank you very much, Mr. Chair. I apologize for the poor Internet connection and for not being able to use the video. Most of you have seen my face before anyway, so I don't think it will detract from the deliberations.

It's a pleasure to participate with you this afternoon. As some members of the committee have changed since my last appearance prior to the election, I should just indicate whom I represent.

The Fisheries Council of Canada is the national voice for the wild capture sector, representing processors on all three coasts. Practically all members also harvest. For those of you on the east coast, you know about the fleet separation rules. I represent the processors and the offshore harvesters. Most are privately held family-owned businesses.

The fisheries sector in Canada has enjoyed strong growth in recent years. The value of our exports was up 25% in the last five years to $7.5 billion, so this is good news. The sector employs nearly 80,000 people across the country, primarily in coastal communities.

Our top four export markets, by value, are the U.S. at a 61% share of our exports, China at 17%, the EU at 7% as a bloc, and Japan at 4%.

Lobster and other crustaceans are the top product grouping, representing 55% of our exports. Fresh or chilled fish is second at 14%. Molluscs are third at 7%.

Turning to the pandemic, impacts on individual companies vary, as Jean indicated, depending on species, product format, geographic market and market segment. Products that would typically go to food service or white tablecloth restaurants have been the hardest hit. Unfortunately, seafood is not top of mind for takeout.

The trade stats can be used to assess the disruption of the global trading system and its impact on our sector. March exports were down by 15% as a whole for fish and seafood. We did see some panic buying during March, which mutes some of the pandemic’s impact during that month. April exports were down by double that, at 30%.

Aside from the market disruption, there is tremendous effort to protect our workers and vessel crews. FCC has been doing everything it can to help the sector stay on top of the public health guidance. Companies are investing in PPE, modifying operational configurations to create more distancing, implementing more sanitation practices and so on. In some sectors there is a reliance on temporary foreign workers and some have been more successful than others in securing them in light of the pandemic.

We are pleased that the government has come forth with the Canadian seafood stabilization fund, in recognition of the disruption faced by the sector. The priority for the sector is the health and safety measures for workers. These are increasing costs for everyone. For example, a processing plant could spend upward of $50,000 a year or more on PPE. Costs to install physical barriers are in the tens of thousands of dollars per plant, and isolating vessel crews before voyages adds cost as well.

The program will also help shift operations to serve retail markets, and it will be administered by the regional development agencies. Regions not included will be eligible for support from the regional relief and recovery fund. We hope the stabilization fund will go live imminently. I have to say that companies are quite anxious to learn exactly what is covered and what is not.

The sector is eligible for the economy-wide measures, including the wage subsidy and the emergency response benefit. Smaller operators are eligible for the business account. Financing support from EDC, BDC and Farm Credit Canada is also helpful. In particular, we have confirmed that Farm Credit is now providing support to the factory freezer vessels, as they have integrated harvesting and processing operations.

As economies open and the food service market recovers, it will create opportunity for our sector to recover, but it will be a long and difficult voyage. We look forward to many discussions with you and other parliamentarians and governments on how to best position the fisheries sector to contribute to the recovery of Canadians in coastal communities and across the country.

I look forward to your questions. Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you.

We'll now go to our first round of questions.

Mr. Lansbergen and Mr. Lanteigne, I will remind you that when answering to put the mike as close in front of your mouth as possible so that you can be heard clearly.

We'll now go to Mr. Arnold for six minutes or less.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Thank you, Mr. Chair.

Thank you to both of the witnesses for being here today.

Mr. Lanteigne, in early May, Minister Jordan stated that it was up to each individual area to determine if the fishermen wanted to delay their season opening or to stay onshore. Were you and your members able to determine the season opening date for your harvest areas? As a group, were you able to determine those opening dates?

[Jean Lanteigne]

In the case of snow crab, we were able to work with the department. We wanted to go out as early as April 10 or 12, but the Minister and Mr. Cormier wanted to make sure that the plants were safe for the workers. So we postponed the fishing season until April 24. For a period of about two weeks, we considered that we were ready to go fishing.

In the case of shrimp fishing, there were no departures, given the closure of the market, except in the Acadian Peninsula, where we started last Friday. Quebec fishers went out a few days before we did. In short, in the case of shrimp, the market was the determining factor. It wasn't a decision made jointly with the department.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

It sounds like the season opening thing was due to delays in the processing plant availability.

Did the delays in the season opening have an effect on the harvesters and processors? Did the delays cause a surge in the harvest? What did that do to pricing and so on?

[Jean Lanteigne]

In terms of pricing, I don't think it had an impact, given the difficult market conditions. However, Mother's Day in May made it easier to sell snow crab. In fact, American wholesalers promoted snow crab for that occasion, and I think that was positive.

With respect to the late opening of the season, there is one important factor that isn't related to COVID-19: the right whale. It's really working against us today, because almost 90% of the fishing area is currently closed. Obviously, if we could have started earlier this spring, it would have helped us a lot. It's really the late opening of the season that's hurting fishers.