Fisheries Committee on May 31st, 2021

[Christine Penney]

Again, these licences aren't being converted, so they are not transitioning into communal commercial licences. They are remaining offshore commercial licences as they were prior to the transaction. There really is no connection to the PIIFCAF regulation, formerly a policy. It's a policy that was around for many years prior to becoming a regulation.

As I said, Clearwater was prohibited from owning inshore licences prior to the transaction, and we remain prohibited from owning inshore licences post this transaction.

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

Bear with me, because these are some of the concerns that I've received from the fisheries associations. I want to be on the record of being able to say that they were asked and addressed.

How would the potential transfers and their developments interact with ongoing conversations around a moderate livelihood fishery? Can the end result even be predicted at this stage?

[Jennifer Deleskie]

The issue of the moderate livelihood is entirely separate from the Clearwater transaction and what we're discussing today. It doesn't impact owner-operator regulations as it only pertains to Clearwater.

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

To be clear, these are two completely different types of fisheries, and they don't interconnect in any other way beside the fact that Mi'kmaq are involved. Is that correct?

[Jennifer Deleskie]

That's correct.

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

A Canadian company.... One of the things that I heard a lot in the previous panel was regarding foreign ownership. We're doing a study regarding foreign ownership. By definition, what does it take to make something a Canadian company? Is there a percentage? How does that work? I'm trying to understand.

[Christine Penney]

From a DFO policy perspective, all Canadian fishing licences are required to be owned by a Canadian company. My understanding of that policy is that it means at least 51% Canadian ownership.

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

In terms of the Mi’kmaq, are they considered Canadian, the seven bands?

[Christine Penney]

I should hope so.

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

They're not foreign. We're just making sure on the record that Mi’kmaq are considered Canadians in terms of a Canadian company by definition.

[Jennifer Deleskie]

I would like to think that since this transaction the company couldn't be any more Canadian.

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

I like that answer.

In terms of Premium Brands Holdings, do they have a percentage of Canadian level that would make sure that, considering that Mi’kmaq are in Canada, it would go over that 1% threshold?

[Christine Penney]

The ownership structure of Premium Brands was considered and looked at by DFO in this transaction. Premium Brands is a publicly traded company. They're based in Vancouver, British Columbia. Their shareholdings are at least 80% Canadian owned. If you translate that, they own 50% of Clearwater; the Mi’kmaq own 50% of Clearwater. Clearwater today is at least 90% Canadian-owned.

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

That's very impressive. It's not foreign at all.

In previous studies we've heard Mi’kmaq witnesses talk about the Mi’kmaq beliefs around netukulimk. Now with chiefs like Terry Paul, who is one of the leaders in this sale, do you feel that responsibly harvesting seafood will continue to be part of what Clearwater is about? Do you think that with the new guiding principles within the Mi’kmaq that helps ensure the sustainability of the seafood industry?

[Jennifer Deleskie]

Absolutely. I don't know if any of you have heard the chief speak before, but science always comes first and conservation. Nothing has changed. That's the way Clearwater always operated anyway, and it's certainly the way we plan to operate it today.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Battiste.

We will now go to Ms. Desbiens for six minutes or less, please.

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

Thank you, Mr. Chair.

I thank the witnesses for their statement.

I'd like to talk about the resource. What happens off the estuary and Gulf of the St. Lawrence River in Quebec indirectly and directly influences the raw material, which is the marine resource basin within the St. Lawrence River.

There is a transaction that is being discussed a great deal and in fact we talked about it with the previous witnesses. My perennial concern is that overharvesting will eventually undermine the resource.

What steps is your company taking to avoid such overharvesting?

[Christine Penney]

Sustainability is a core value at Clearwater. It always has been. Jennifer has spoken to the Mi’kmaq perspective, and it's very inspiring to hear Chief Paul and the other chiefs speak about how you look at seven generations as you consider any decision. One of the really nice things about this transaction is I think it brought together three entities and groups that really share the same values around responsibility, around sustainability, and being good corporate citizens and giving back to the communities in which we operate. I would say Premium Brands, if you review their materials, that is what they talk about in their company as well.

We were really pleased in this transaction that our new ownership group is focused on long-term sustainable value. Clearwater has always been focused on responsible harvesting and sustainable value of our Canadian resources. We invest a lot in science and collaborative research with the Department of Fisheries and Oceans and support and collaborate with DFO in their mandate to understand the scientific basis for proper management of Canadian fisheries.

We're very much concerned and always guarding that we are harvesting responsibly, looking at both the impact on the target species and the impact on the broader ecosystem of our operations and making sure those resources remain available for the long term. We operate, of course, primarily in quota and rights-based quota management systems, where individual licence-holders are allocated a defined share of the resource. What that really means is it's in our interest to protect and grow the overall status of the resource and protect its long-term sustainability.

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

How would you like the department to intervene so that too much of the resource does not go overseas? We want to avoid not having enough to maintain the balance between the community economy and the protection of the resource in Canada and Quebec.

Do you want the department to intervene to prevent too much investment and too much resource from going offshore?

[Christine Penney]

My perspective on this is the department has a long-standing policy around foreign ownership, and it's clearly understood and adhered to from what I see in the resource on the east coast. A lot of what was talked about in the earlier session around foreign ownership was really on the processing plant side of things, and, as we know, that is a provincial jurisdiction when it comes to licensing provincial processing operations.

I think a lot of the concerns raised were around what's known as controlling agreements and inappropriate circumvention of the existing rules. There I agree with some of my colleagues earlier. Those rules are clear and they're in place. They've been in place for many years from a policy perspective, now from a regulatory perspective, and they should be adhered to.

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

Earlier, in talking with other witnesses, I brought up the idea of an oversight committee made up of different stakeholders who could defend the values they hold dear. Such a committee could assist the department in maintaining balance. We were talking about transparency and that delicate balance that needs to be maintained.

Is that an interesting option?

You could sit on the oversight committee with other stakeholders who want you to maintain that balance and work together.

[Christine Penney]

What I can speak to is the process that we went through in this transaction. There was extensive due diligence done by the department around the Canadian ownership provisions, and extensive information provided to the department with respect to the new owners. I would expect that this process is taking place in any transaction coming before the department.

I think the system is working, frankly, from the perspective of DFO taking the steps that they need to take to ensure the Canadian ownership provisions are adhered to and respected. I certainly have a good sense of the industry on the east coast from an offshore perspective. I don't see companies or licences that would violate that requirement here on the east coast, to my knowledge. I'm not as familiar with the situation on the west coast, but I would expect that DFO has been doing that due diligence process for any transactions.

[The Chair, Liberal, Ken McDonald]

Thank you, Madam Desbiens.

We'll now go to Mr. Johns for six minutes or less, please, to clue up.

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

Thank you to both witnesses for their important testimony.

It's my understanding that the Mi'kmaq have made a significant investment that's going to take many years before they even see a nickel of profit. That shows to me that they're dedicated, with a long-term commitment to this company and to the resource. Can you speak about how this plays into sustainability and also to conservation for the company and the region?

[Jennifer Deleskie]

I think we looked at this investment as a long-term investment and one that was going to see wealth generation for future generations, and like Christine mentioned, the seven generations. I think that does show we looked at things in a sustainable way. We knew it all made sense. We knew that this deal would bring not only profits back to the communities, at which time we saw fit to take the profits back, but also generate employment opportunities.

We were able to get into this business not just from the deckhand level, but into everything from the CEO level down to the deckhand. You probably heard some of the chief's comments on that. We are fully integrated within Clearwater. I guess that's the win-win that came out of this transaction. It is an investment, and it's one that we looked at from a long-term game plan, but it's given us benefits right from day one.