Fisheries Committee on May 31st, 2021

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

Thank you, Mr. Chair.

Thank you, witnesses, for your testimony.

Ms. Sonnenberg, you talked about the west coast and foreign ownership and the slippery slope that the east coast is headed toward. Both you and Mr. Sullivan talked about Royal Greenland purchasing the second- and fourth-largest processing companies on the east coast. Certainly that's pretty alarming.

I have some questions in terms of operational structure and corporate structure. Can you talk about some of the concerns around the loopholes, if you want to call them that, or how they're circumnavigating appropriate reviews by Industry Canada, buying into the Canadian market, and what safeguards need to be in place?

Ms. Sonnenberg, I'll start with you.

[Melanie Sonnenberg]

Thank you, Mr. Johns.

The threshold, when corporations come to purchase fish plants and access and so on, it's a high bar. For our country I believe the number is $480 million. That catches the attention of Industry Canada. It's in that range, and a corporation coming in at $1.2 million catches their attention.

Sometimes what happens in coastal communities, and perhaps if Mr. Mallet might have been able to be on.... We've seen in New Brunswick where smaller plants are being, I won't say gobbled up, but being purchased. This is being done in a very systematic way so at the end of the day we now have a conglomeration owned by one entity, which perhaps, if they continue on, could make the threshold.

These things are concerning. It's not making the radar and that is a problem in itself. On the west coast—and you know this probably better than I—there is a lot of foreign ownership and it's not clearly understood. The committee raised it in the report in 2019, I believe, as a recommendation to have some public registry. We need to understand who is owning our resource on the west coast and we continue to advocate for that recommendation, and again, it's a public resource for [Technical difficulty—Editor] the country [Technical difficulty—Editor] I can compare to elsewhere.

I'm breaking up.

[The Chair, Liberal, Ken McDonald]

Ms. Sonnenberg, yes, you're breaking up big time.

I don't know if Mr. Sullivan has anything to add to the answer to that question.

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

I'll just add to that.

Mr. Sullivan, can you also share your thoughts? The frustration on the west coast is that there is no public registry. These recommendations came a couple of years ago and there's been no action around foreign ownership on the west coast transfers there, no public registry.

Why would the government not provide this information?

[Keith Sullivan]

I've heard the frustration from colleagues in British Columbia as well. A lot of the processing sector, that corporate side, is foreign-owned. We had examples this year where American companies were just taking the raw material and shipping it out. Even on the corporate offshore fishery here, it's frustrating because inshore adjacent harvesters have so little of the fish. It's a little bit different here. The offshore actually has the majority of the fish on the Grand Banks. Foreign entities own probably the most and then the Canadian offshore sector, which really just blew up in the 1960s and 1970s, a short period of time in their overall history, and the inshore fishermen who depended on the local stocks for years had minimal access. They had the least amount of access to fish off the Grand Banks. The fish that come from the offshore sector, most of that is shipped out.

Sorry. You wanted to get in there with something?

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

I think I'm going to go to the next question. It's around Royal Greenland again.

These controlling agreements, can you talk about the impact that has on coastal communities and these fishers and how they can control the price? Also, do other countries allow foreign ownership where they can come in and take over a public resource like this, and circumnavigate the rules and dominate like what we're seeing right here? I can't imagine [Technical difficulty—Editor] or any other country.

[Keith Sullivan]

Yes, I can't think of any country that has a fishery with a structure like this. I guess the thing is on paper in some ways Canada doesn't have this foreign ownership, but we know majorities of some fishing fleets are illegally owned by fish processing companies. It's obvious in every community. We can go around communities in Newfoundland and Labrador and say, “That's a company boat and that's company boat.” There seems to be a real hesitation on the part of the Department of Fisheries and Oceans to do anything about it. Again, we do have regulations. We do hope there's more investment in this, and follow-up with investigations into exactly where the money is, and what the agreements are that lawyers have drawn up that show it's in a fisherman's name but we know all the value of that fish is going to a processing company.

We really need to dig in and crack down on that. It's been known for some time but the will hasn't been there to crack down [Technical difficulty—Editor] with everyone knowing that it is really doing.... For parts of the coastal economy depending on the fishery, that money is just leaving there now, a lot of that value in the fishery. If you're a young person, you don't have a chance of getting in because there's going to be a company that will outbid you every single time.

That's what's happened in the last number of years.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Johns.

If anybody has a question for Ms. Sonnenberg, you probably will want to send her the question. She can respond in writing back to the clerk so that we would have the answer more suitably available when we start to clue this up. It would be great if we could co-operate there.

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

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

Thank you, Mr. Chair.

I want to thank all of the witnesses.

My question is for Ms. Sonnenberg, so she may be able to give a thumbs-up or a short answer to the question and still be able to be heard.

As you are aware, the committee undertook a study in the last Parliament that examined DFO regulations of fisheries in British Columbia—or the west coast. Recommendation six of that report called on the government to undertake a comparative analysis of the east coast and west coast fisheries.

Last June, Minister Jordan tabled the government response, in which she stated that the government had initiated the analysis that was asked for in recommendation six. Do you know whether the report of that comparative analysis has been completed or not?

[Melanie Sonnenberg]

I don't know if anybody can hear me. We're having a terrible storm here, and I did not hear the question.

[The Chair, Liberal, Ken McDonald]

We're not hearing the answer either, Ms. Sonnenberg. Mr. Arnold, please submit that to the clerk in writing, and they'll contact Ms. Sonnenberg with it.

Go ahead, sir.

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

If that report has been completed, has it been shared with anybody outside of DFO or the government? It would be interesting to see that report.

I want to move on, hopefully, to someone we can have a better connection with. I'm sorry yours isn't working, Ms. Sonnenberg.

Despite Bill C-68's efforts—the changes to the Fisheries Act in the last Parliament, and the efforts to strengthen the principles—do you think the current wording and applications are strong enough to achieve the intended outcomes of protecting fisheries and harvesters?

I'll start with you, Mr. MacPherson.

[Ian MacPherson]

As I said earlier, we are still working closely with DFO. There were a couple of areas that we were still talking about when it went to second reading. Then the final language came out.

I would stay it's still a work in progress. As everyone on this committee knows, the fisheries escalated in value quite a bit over the last few years, so we always have to be diligent to make sure that the current regulations are enforced to the letter of the law and that any areas that we can shore up with perhaps some more policy information—

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

Thank you.

Mr. Sullivan.

[Keith Sullivan]

I think the wording is probably fine. I really find that it's just the backing up with the actions, the real commitment to follow up on these major problems that are undermining our rural economy, our coastal communities, places that depend on the fishery. It's all about the intent of it and following up on that intent. That seems to be the piece that's really missing in the equation.

I don't think it's necessarily a major weakness of the wording in the regulations. We just need to dig in and do this, make sure people who are breaking those rules are paying the penalties for it, and that there's enough disincentive there for people not to be doing it. Right now there hasn't been a consequence for people breaking the rules all along. That's where I see the biggest issue.

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

[Technical difficulty—Editor] more than the actual language that's out there. Thank you.

Mr. MacPherson, and possibly if there are others who have something to add in afterwards, you mentioned the unintended consequences of some of these controlling agreements that are taking place. Could you elaborate a little bit on that? Our time is very limited. What are the unintended consequences that you see?

[Ian MacPherson]

Certainly there's the difficulty of newer and younger people getting into the fishery. A lot of times the sale of a fleet can be dictated by the company that's financing that fleet in the back scene there. That's one of the biggest ones.

As I alluded to earlier, we want to make sure there's always healthy competition out there on the wharf. Certainly corporations have their place, but it's important that the small independent businesses are able to survive too. That's one of our big concerns right now.

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

Thank you.

Perhaps Ms. Sonnenberg and Mr. Sullivan would be able to answer in writing to the committee.

I think I'm out of time, am I not, Mr. Chair?

[The Chair, Liberal, Ken McDonald]

You're right on the mark, Mr. Arnold.

We will now go to Mr. Cormier.

You have five minutes or less, please.

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

Thank you, Mr. Chair.

Thanks to all the witnesses for being here today.

I'm not sure if Ms. Sonnenberg is back on, so I will start with Mr. Sullivan. I'd like to go back to Royal Greenland. We saw this with shrimp a couple of years ago. I'm seeing this year, with lobster and crab in my riding, that this company is on the wharf and offering two dollars or three dollars or four dollars a pound more for some of the resources.

When you're a fisherman and you're offered those kinds of prices, you tend to sell to the person who is offering you more, right? On the other hand, are you also telling your fishermen what the impact of that can be? We all know that after they offer those prices, maybe in the next couple of years they will just say, “Hey, we buy everything here”, and the prices will be as low as possible.

What do you think we can do as a government to stop that? It's very, very troubling to me that it's happening. I have raised that a couple of times, and I think our government is prepared to look at it. What do you think is the solution here?

[Keith Sullivan]

First of all, you're right; it's hard to argue that when you see these big prices being offered. Obviously, that's a problem here. Sometimes it can be a sign of some healthy competition, but we know that they're aggressively trying to eliminate the competition.

As Mr. Morrissey mentioned before, it's complicated because the processing is provincial, so we're talking provincial counterparts in terms of having too much concentration and eliminating the competition. But those who are processing are usually the offshore fishing companies as well. We see Ocean Choice International, a big fish processor and big offshore operator. With Clearwater we would see some similar things there.

I think that level of concentration has to be looked at. It's why we're here talking about the concentration in the offshore sector. It's usually directly related to the processing sector. I think that's where this committee can really have an impact.

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

Okay.

I'll move to another topic. As I think you saw in the news lately, a lot of the crab licences from my area in northern New Brunswick that were being sold left the region. Those licences are worth $10 million, $12 million or $15 million now. Most of that is because of a ruling that you have to be a resident of New Brunswick for only six months, for example. A couple of years ago—I think Mr. MacPherson is online from P.E.I.—there was a licence bought from a 24-year-old from P.E.I. DFO said they checked everything and everything was according to the law, blah, blah, blah.

Do you think there's enough done by DFO officials to monitor those kinds of transactions? We're seeing that in crab right now, with those licences worth millions of dollars, but in lobster, licences here can be worth close to $1 million or $1.5 million.

Do you think there's enough done, Ms. Sonnenberg or Mr. MacPherson, about the monitoring by DFO officials? Do you think we need some change in those residency rules or other rules? Do you think a committee should be put in place to get to the bottom of this and make sure that those licences stay within the community? The spirit of the new Fisheries Act, and the regulations we put in place on owner-operator and fleet separation, is to keep those licences within the community. If we have all those licences leaving, what are we going to do?

We're talking about Royal Greenland here, but I'll bet we can talk about Champlain investments and other groups of companies who also want to buy that. Do you think we have some work to be done here by DFO officials and by our government—I'm sure they'll want to look at it—with maybe a committee put in place?

That's for Ms. Sonnenberg or Mr. MacPherson, whoever wants to go first.

[Ian MacPherson]

I certainly think that would be a good start. We want to be careful about saying that every situation is bad, because it isn't. At the other end, though, there are areas of concern. It really needs to be followed up. This is one of the primary areas we're working on with DFO on the enforcement side to make sure they go through enough steps to identify the money.

I want to make one other quick comment. Let's not forget that we're talking about food. When you have organizations that are backed by countries that [Technical difficulty—Editor] for food, they will pay a lot of money to get control of those resources. Let's not lose sight of that.

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

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Cormier.

I think you'll remember I stated that with any questions for Ms. Sonnenberg, we'll put them in writing to the clerk, and the clerk will get them to her and she can respond the same way, instead of having to interrupt and waste more time.

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