Fisheries Committee on May 31st, 2021

[Ian MacPherson]

Yes, we'd be glad to do that, Mr. Morrissey.

[Bobby Morrissey, Liberal, Egmont, PE]

Okay, we'll need specifics, because if it was just a transfer and who bought them, then that's not a road I'm prepared to go down. We should not [Technical difficulty—Editor] if it's within Canada. My concern, and I assume the fishermen's, would be what controls the sale of these corporations to offshore interests. That's what I would like to focus on and be clear on, these corporate identities, because they're granted access to, as was pointed out, a resource that's owned by the people of Canada. My concern would focus on what steps we as a government.... I thought that's what I was going to hear from the fishing industry. What steps are we going to take to ensure that, in the sale of these corporations, not so much who is buying it, but if they go outside the country, then do we maintain that ownership here in Canada.

Then I would want you, whoever wants to, in my time left to focus on the consolidation around big corporations. They refer to the corporatization of the fishery. What should we, as parliamentarians, be on the lookout for from that side?

Melanie, you could respond on paper.

It's fine for Ian or Keith Sullivan to respond here.

[Keith Sullivan]

Okay, I'll start.

I think as a rule that should be strictly adhered to, any access, certainly, to fishing privileges in Canada must be Canadian owned. The consideration is whether it should be fully Canadian owned. Right now basically a foreign company with a Canadian subsidiary can own these corporate licences. That structure could be revisited. We know we've had major companies that have outwardly been 49% foreign owned. Is that an acceptable threshold? Really you wonder when you get complex structures how much of the money may be staying in Canada. We know that a lot of our fishing enterprises have significant foreign investment. I think that's something worth reconsidering as well.

With regard to maintaining our strong fishing communities, we've seen generally significant growth in the value of our enterprises on the east coast. They are sizable businesses and they are really capable of harvesting fish. New opportunities exist. We're seeing a changing ecosystem. The species we're fishing and concentrating on now are not the same ones as 30 or 40 years ago. I expect one thing about that—that it's always going to change. The marine ecosystem is going to be conducive to some other species coming along. Giving that fish to inshore owner-operators, to people who live along that area of coastline, is a very good economic policy for Canada to adopt. That is one way to ensure that the value of our species stays here.

When we see them going to offshore companies, generally following and really understanding how that money stays in our economy and even in Canada gets an awful lot blurrier.

I'll leave it there.

[The Chair, Liberal, Ken McDonald]

That's great.

Thank you, Mr. Morrissey. That clears up our questioning for the first portion of our meeting.

I want to say thank you of course to Ms. Sonnenberg, Mr. MacPherson and Mr. Sullivan from my neck of the woods here in Newfoundland. It's great to see all of you again. I know you've been before committee before.

I wish everybody a safe and happy evening.

We're going to suspend now for a moment so we can change over to the next portion of our meeting.

[The Chair, Liberal, Ken McDonald]

I have some reminders for the benefit of our next witnesses.

When you are ready to speak, click on the microphone icon to activate your mike. When you are not speaking, your mike should be on mute. When speaking, please speak slowly and clearly.

I would now like to welcome our second panel of witnesses. From Clearwater Seafoods Limited Partnership, we have Jennifer Deleskie, vice-president, business development and public affairs Membertou Corporate and Christine Penney, vice-president, sustainability and public affairs.

You have an opening statement of five minutes or less. I don't know if you're both speaking or if one is doing it, but you can arrange that yourselves.

I will ask you, members of the committee, when we get to questions, to identify yourself and who you would like to answer the question. Doing that makes things a little bit easier and a little bit less time-consuming. We'll get more information that way.

When you're ready, you're good to go, Ms. Deleskie.

[Jennifer Deleskie, Vice-President, Business Development and Public Affairs, Membertou Corporate, Clearwater Seafoods Limited Partnership]

Thank you, Chair.

It's an honour to be invited today to appear before the Standing Committee on Fisheries and Oceans. My name is Jennifer Deleskie, and I'm the vice-president of business development and public affairs at Membertou Corporate. I am joined by my colleague, Christine Penney, who is the vice-president of sustainability and public affairs at Clearwater Seafoods.

We are pleased to provide comments on the committee's study examining the process and structure for corporate offshore licences and quota transfers. We're also eager for the opportunity to address some of the concerns and issues raised in previous fisheries and oceans committee sessions on the topic of inshore fishing licences.

Founded in 1976, Clearwater is one of North America's largest vertically integrated seafood companies and one of Canada's leading seafood exporters. It is recognized globally for its superior quality, food safety, diversity of species and reliable worldwide delivery. Over the years, Clearwater has become an integral part of the community in Atlantic Canada, with a focus on responsibly harvesting seafood of the highest quality, all while investing in communities and innovation in the sector and working toward indigenous reconciliation.

Clearwater has a long history of working collaboratively with Mi'kmaq first nations, helping to foster meaningful participation in the commercial fishery and working toward economic outcomes that benefit everyone. There have been significant agreements over the last few years that have strengthened Clearwater's decades-long relationship with indigenous communities. These agreements have contributed to establishing and advancing avenues for more indigenous participation in Canada's seafood industry.

Most notably, in January 2021, Premium Brands Holdings Corp. and Mi'kmaq first nations reached a historic agreement in acquiring ownership of Clearwater Seafoods. The collective investment of seven Mi'kmaq nations in Clearwater represents the single largest investment in the seafood industry by any indigenous group in Canada. This is truly a generational investment that will secure and create new jobs, advance meaningful reconciliation and will continue Clearwater's international reputation for excellence in sustainable seafood. With this partnership, Mi'kmaq are now 50% owners in the company, and it has become a new way in how we do business in this industry.

Over the last few years, it's been a pleasure to work in close collaboration with Christine Penney. We are all committed to building the world's most extraordinary wild seafood company, dedicated to sustainable seafood excellence.

With that, I want to hand it over to Christine.

[Christine Penney, Vice-President, Sustainability and Public Affairs, Clearwater Seafoods Limited Partnership]

Thank you, Jennifer.

Thank you, Chair and members of the committee.

I too would like to emphasize how proud we all are to have built and to be continuing to build a relationship with the Mi'kmaq of Nova Scotia and the Miawpukek in Newfoundland and Labrador. It's tangible proof of both the community and the business benefits of indigenous reconciliation and the benefits to rural fishing communities. It is truly a win-win-win.

We are pleased to have new owners who are focused on creating sustainable value over the long term, which allows Clearwater to continue to invest in maintaining resources, opening markets and building the reputation and value of Canadian seafood.

Recently there have been some questions raised regarding the ownership structure of inshore fishing licences. I want to make it clear today that historically under the owner-operator and fleet separation policies and now under the current DFO policy for preserving the independence of the inshore fleet in Canada's Atlantic fisheries, which has been turned into regulation, Clearwater is prohibited from owning inshore fishing licences or entering into controlling agreements.

The change in ownership of Clearwater does not impact the application of these policies and regulations or change the application of the policies and regulations to our business. Clearwater does not own and has no intention of owning licences that fall under the PIIFCAF regulations, and Clearwater does not enter into controlling agreements for licences.

Our new ownership structure puts the Mi'kmaq at the boardroom table as owners of our company, but it does not alter or impact the day-to-day operations of the company. This provides stability for 1,500 good middle-class jobs across the 276 communities in Atlantic Canada that continue to help drive the economy in the region.

The whole Clearwater team is excited to embark on this next chapter of the company's journey. We're proud of the partnership between Premium Brands and the Mi'kmaq and this monumental step toward reconciliation and greater indigenous participation. We will continue to work collaboratively to build a sustainable and diverse Canadian seafood industry that supports thousands of jobs, generates significant economic activity in coastal communities and provides seafood products of the highest quality to consumers all over the world.

We look forward to your questions and thank all of you for your continued leadership and commitment to fisheries excellence in Canada.

[The Chair, Liberal, Ken McDonald]

Thank you for that.

We'll get right to our round of questions for six minutes or less.

We'll go to Mr. Bragdon, please.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Mr. Chair, we're going to pick up with Mr. Mazier. He didn't get a chance in the first round.

Mr. Mazier, I'll go over to you, sir.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Vice-Chair and Chair.

Good afternoon, witnesses, and thank you for coming out today.

Does Clearwater's ownership transition change Clearwater's ability to hold inshore licences and fish?

[Christine Penney]

No, the change in ownership doesn't affect our ability to hold inshore licences.

We are prohibited from doing that under what was policy in DFO and is now regulation. That regulation continues to apply today in the same way that it did prior to the transaction.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Okay.

How much of Clearwater's corporate profits stay within the coastal communities?

[Christine Penney]

Clearwater is a major employer across Atlantic Canada. As I said, we have 1,500 employees. Those employees live in 276 communities across the province. We have major processing operations in small coastal communities, and we also have a significant number of our employees who are fleet employees who travel to work on offshore vessels and typically work trip on, trip off and go back into their home communities.

Of course, that generates a significant amount of economic activity from employment income, and there are significant procurement activities that happen with small, local businesses in each of those communities, and, of course, Clearwater is a Canadian-owned company.

You have certainly heard some of the testimony earlier in terms of concern around foreign ownership. Prior to this transaction, Clearwater was a Canadian company and it continues to be a Canadian-owned company.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Do you have a percentage of profits that stays in the communities? Do you have a plan around that?

[Christine Penney]

I don't have our economic activity broken down by community at hand here, Mr. Mazier.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

It is my understanding that Clearwater was convicted of violating the Marine Stewardship Council certification. Does Clearwater plan to renew this certification, yes or no?

[Christine Penney]

I would clarify that we were not convicted of violating our Marine Stewardship Council certification. We chose not to renew what is a voluntary five-year certification with the Marine Stewardship Council. That was a business decision, really, based on the fact that there is a significant cost and effort to maintain that voluntary eco-label on our products.

Those products weren't carrying the logo into the marketplace, so we weren't getting the value of that back from the marketplace for that particular product. At the end of our five-year certificate, we chose not to voluntarily go into a recertification for the next five-year period.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Do you think that not having the certification creates risk for a devalued perception of Canadian seafood products?

[Christine Penney]

No, and we maintain the MSC certification on many of our other products, in fact. In each case it's really a decision that is based on the value that the eco-label brings in the marketplace.

I think Canadian seafood does have a very good reputation internationally. That's on the basis of our strong regulatory regime, led by DFO, and that MSC certification is really a third party verification of the responsible management of our fisheries.

In this particular case, as a small-volume fishery, it didn't make sense for us at the time to go into the recertification process, but I don't think that is impacting the reputation of the product internationally.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you.

We've heard a lot of concern around corporate concentration and the importance of keeping the profits inside Canada in Canadian coastal communities.

How is Clearwater ensuring that the profits are staying in Canada's coastal communities [Technical difficulty—Editor] goal to trying to get that done?

[Christine Penney]

Our operations generate significant economic activity in small coastal communities. In many cases, we are the major employer. I would use Grand Bank in Newfoundland as an example. Our plant in that community is the significant employer. We have a great working relationship with the town. We have long-standing employees who have good, solid, reliable, full-time jobs in that facility.

Beyond that, again, we are a Canadian-owned company. With this transaction, the Mi'kmaq now own 50% of the company. That represents all aspects of the company, from governance and operations to economic activities that are generated from the company.

In addition to the coastal communities where we operate, the economic benefits that Clearwater generates are now flowing through to the Mi'kmaq communities.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Mazier.

We'll now go to Mr. Battiste for six minutes or less, please.

[Jaime Battiste, Liberal, Sydney—Victoria, NS]

I want to thank the witnesses for joining us today. I want to get into some of the concerns that were raised in the previous panel.

I really couldn't understand some of the concerns raised around Clearwater. I do understand it is a big deal, but it's also a proud deal for Cape Breton when we see leadership taking on billion-dollar deals.

I want to come in with some of the questions around the offshore licences. Here is one of the questions I received in my correspondence: If the conversion of the offshore licence into some other category is allowed, i.e., regulated under communal indigenous regulations, could this, in the future, also be done to owner-operator licences and enable corporations to use indigenous bands or consortiums to circumvent the owner-operator provisions of the new Fisheries Act aimed at protecting owner-operator principals?

[Christine Penney]

In this transaction, there is no change in the status of these licences. These are offshore commercial licences, and they remain offshore commercial licences. What has changed in this transaction is the ownership of those licences and the company.

[Jaime Battiste, Liberal, Sydney—Victoria, NS]

Could this transaction circumvent PIIFCAF owner-operator policy for inshore owner-operator fishing fleets if offshore licences are converted to communal licences?