Fisheries Committee on May 31st, 2021

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Thank you, Mr. Chair.

I would love to be a permanent member of this committee. Our very interesting discussions make me hungry for more.

I'll address Mr. Sullivan.

We've been thinking a lot and I've been taking notes. Transparency, community economy and market economy are important. The market economy is a resource and we need to maintain the market.

What are your proposals?

Could we set up an oversight committee that some of you could serve on? Could that be a way to brainstorm and monitor the situation more closely?

[Keith Sullivan]

The short answer is yes. I think it's just a matter of some more resources here, and it's not....

The inshore fishery can operate very well on its own. It's a very healthy environment. Young people can get in and pay a fair market value and get a fair return on investment. It's just that the proposition for fish companies to go in there and get access to the supply is a bit of a different value proposition, and that's all leaving.

We really need DFO to follow up on what they say they're going to do, the investigations. When they find these people who are in violation, sometimes there are significant licences and there can be penalties associated with this. With what we've seen in the past, when they were outside the regulation and basically in violation of the owner-operator and the fleet separation policy, they were given a chance to fix it. The policy was there because they wanted people to come into compliance.

That wasn't what it was supposed to be. In the past, DFO got very lenient and I think were very sympathetic to some of the larger companies, but now we need them to really dig in. There have to be consequences. I think that's the biggest thing that we see. If people are fined or lose access to licences that are worth millions of dollars, soon that will become too risky of a proposition for any company to take. Just make sure that we're doing what we can to keep those licences in generally the local areas, with the harvesters in those communities.

[The Chair, Liberal, Ken McDonald]

Thank you, Ms. Desbiens.

We'll now go to Mr. Johns for two and a half minutes or less, please.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you.

We've seen the comparative analysis, and I think that DFO clearly needs to get a backbone when it comes to protecting harvesters from foreign ownership. In B.C., we saw that U.S.-based Pacific Seafood Group bought up a bunch of processing and fishing licences, and then they basically shut down the processing and exports— live or fresh or frozen—for processing in the U.S. Now they get half of what U.S. fishermen get for the same product.

Can you talk about how this could happen on the east coast in terms of the purchases that are happening? What does DFO need to do to stop foreign ownership and the impact that's having on independent fish harvesters?

I will leave it with you, Mr. Sullivan and Mr. MacPherson. You can both take a stab at this.

[Ian MacPherson]

Sure. I'll go first.

I just want to loop back to a point that Melanie made earlier. I believe she said $1.2 million but meant to say $1.2 billion, which is the threshold before the purchase of some of these [Technical difficulty—Editor] the full breadth of the federal government analysis. We need to lower that threshold, because you can buy a lot of operations that are $2 million, $10 million or $20 million and still be under that threshold. That's a real problem.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. MacPherson, could you also speak about how they're even able to circumnavigate that? They're buying chunks at a time.

[Ian MacPherson]

Yes. Currently they would be in compliance. That's the concern.

You get that total sum—and Keith can speak to this better than I can—and sometimes they're big purchases, or you hear quietly that five or six independents have been bought up, and all of a sudden you're dealing with a pretty big concentration in the marketplace.

[Keith Sullivan]

Yes, if you want to follow up on that, I think that makes all the sense in the world. Ian said it very well.

When you're talking about local fisheries, food security issues and food supply, buying something that's $500 million and then buying something that's $100 million next week and then $200 million, these are big companies in fish processing. Maybe if you're talking about international banking or something, a billion-dollar price tag may not be extremely big and you can't concentrate very quickly, but I think there are different considerations here. More and more, we have to be looking at the security of our food supply and, more importantly, the security of our economy for our local people who've always depended on our fisheries resources.

I think there's some other scrutiny and, very specifically, looking at that threshold or a different way of looking at the sale of things around the fishery is one way we can do it.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Johns.

We'll now go to Mr. Calkins for five minutes or less, please.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Thank you, Chair.

Whoever wants to take my first question can. It's a general question. I know it's been spoken to quite a bit here.

We don't know who owns what on the west coast, really. Is there enough transparency about who owns what on the east coast when it comes to fisheries and to processing? Can you find out who owns what? Does the department publish appropriately? Can you dig in and find out who has the licences, the quota, the processing and who has what?

[Ian MacPherson]

I'd say the short answer to that is no, we don't. Our colleague, Jim McIsaac, on the west coast, can speak to very specific situations in terms of ownership being basically traced back to foreign ownership of the Canadian resource and controlling that resource.

We really need to protect our food source on behalf of Canadians.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Mr. Sullivan, do you want to weigh in on it?

[Keith Sullivan]

Yes, I'll be very quick.

Too often, it's kind of cloudy. We don't know who the true owners are, particularly when we're talking about them illegally holding controlling agreements. You really have no idea and you have to dig in more on that.

Another one that's related to the sustainability of the resource is that the Department of Fisheries and Oceans won't let you know how much fish was caught by offshore companies unless there are five there. For a lot of the species that the offshore in particular are catching, there are less than five of them. They call it the “rule of five” and you can't even tell how much fish is caught out of a public resource.

I'm not talking about how much they caught or how much they sold it for and to who, so I mean—

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Are we talking about inside the exclusive economic zone?

[Keith Sullivan]

Yes, absolutely. For some species, we look and the Department of Fisheries and Oceans can't tell you how much fish was caught out of that zone last year because there was a company that got such a large share of it, so they won't make it transparent.

It's outrageous and ridiculous. It's hidden behind to cloud things continuously. It doesn't help you manage the resource either. Another recommendation is to get rid of this rule of five when we're talking about a public fish resource.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Ms. Sonnenberg, I see you nodding your approval. I would imagine we'll get a written response. We now know what lightning sounds like on a Zoom meeting. It is a different sound. It's the first time I've heard that type of feedback and static. Anyway, I hope you're safe where you are.

Mr. Sullivan, it's interesting that you should say that. The other night, I was out fishing here on a local lake and there were some guys who came in from shore who likely weren't going to be able to tell you how many fish they caught either, but for quite different reasons. We'll make sure we look into this rule of five. It's the first time I've heard of it.

It's 2021. We're two years away from 30 years since the cod moratorium, more or less, depending on what year, 1992 or 1993. The life cycle says four to seven years for [Technical difficulty—Editor]. How come the Atlantic cod haven't recovered?

[Keith Sullivan]

In a short answer, there has been a significant amount of recovery. It's gone from 10,000 to 20,000 metric tons to over 500,000 metric tons. Many harvesters I talk to are seeing more cod now than they ever did in the 1980s, so I wouldn't say that it hasn't recovered.

It's probably been stalled. I think in early years, the natural environment wasn't really conducive to the growth of the stock. More and more, we're seeing a massive amount of predation, particularly by seals. That stock of seals has really exploded. In other places, it would be called an invasion of sorts. As far as predation goes, that's probably been the biggest issue in limiting the growth of that stock.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

I don't know if you can address this, but is there anything in any of our international trade commitments or our international trade agreements that would affect any of the policy proposals that we're discussing today insofar as retaining exclusive Canadian ownership throughout the value chain of our fish stocks is concerned?

[Keith Sullivan]

I'll just say quickly that I don't think there will be anything contrary to international trade agreements. Right now, with regard to our inshore fisheries licence, the rules and regulations around that are supposed to say that you have to be a resident of a specific area, not only of Canada, for example, and to my knowledge, that hasn't been challenged at all. I can't think of anything offhand, but I can't say this is the definitive answer.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Calkins.

We'll now go to Mr. Morrissey for five minutes or less please.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Mr. Chair.

First, I have a question for Melanie.

Melanie, would you explain in writing to the committee how predatory pricing practices work on the wharf to the detriment of those fisheries involved? It's important that the committee hear exactly.... The price goes up for a short period of time. They get control of the market, I understand. Then they drop it. If you could submit to the committee in detail how this works in the long term to the detriment of the industry, I would like to see that.

My question then goes back to Mr. MacPherson and to you, Melanie, as well. This committee received letters requesting that the committee review the sale of Clearwater, but nobody's addressed it in this committee to date and not in your opening comments. What was the issue there that upset the inshore fishery so much? Could you explain that, Ian? Melanie, can you speak to that issue as well?

[Ian MacPherson]

I think we know it's a historic arrangement. Our question for the minister was really quite simple: With the new partnership, would there be any changes that would be outside of a share purchase? Those are the kinds of questions that we're wondering about, and we have not received responses to a number of them. We did get some responses from Minister Jordan in mid-May.

[Bobby Morrissey, Liberal, Egmont, PE]

Could you be more specific?

I can understand your concern about what would happen to these licences or this quota in the event that a corporation goes bankrupt and about what criteria would be in place when the licences and access to quota are transferred to different identities. However, quite frankly, I haven't heard anything specific, and that goes back to my earlier question on the corporate because both Clearwater and Ocean Choice have access to offshore resources that the inshore fishery does not have. Also, they have been historically owned by corporate identities.

Where are we now? I'm not following the thread here.

[Ian MacPherson]

I think it goes back to.... It was a significant deal. It involved a partner from the west coast, too, so it was a significant consolidation of east coast and west coast companies. There have been pretty basic questions, and I guess where our frustration has been is that maybe they all have simple answers, but we can't seem to get answers to some of these questions.

[Bobby Morrissey, Liberal, Egmont, PE]

Could you give this committee those basic questions? We will be following up with officials from the department, and that's what I want to know, what direction, because I haven't heard it so far.