Fisheries Committee on May 31st, 2021

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Chair.

It's too bad that we lost Martin for this part. We have to be clear, and let's clarify this for the sake of the analysts. There are two issues here, and I'm asking for a clarification.

We're interchanging corporate within the inshore and the offshore. Access to offshore resources is exclusively held within corporations. The inshore fishery, as enshrined in the owner-operator policy, is exclusively for inshore fishers. Some of them hold their affairs for tax purposes within corporate identities, but since they are a bona fide fisher, this is allowed.

Perhaps you could clarify for me, Ian, and Melanie can as well. What is the issue you see that could infringe on the owner-operator policy when corporate access to offshore resources is sold, especially if it's sold to foreign interests?

[Ian MacPherson]

Melanie, why don't you take that one first?

[Melanie Sonnenberg]

I thank my esteemed colleague from Prince Edward Island.

Mr. Morrissey, the issue is in the offshore.

Before I go any further, the interpreter can only hear me so-so. I'll keep my eye on everybody, and if the sound is not good, you can cut me off and let Mr. MacPherson finish the answer.

There is a blurring of the lines between offshore and inshore. I think that might be one of our primary issues.

Am I—

[Bobby Morrissey, Liberal, Egmont, PE]

Your sound is bad, but you say there's a blurring. That's important for this committee to get clear. What is the area where the government must be on guard to protect the blurring from offshore?

Offshore has always been corporately controlled. What has triggered some discussion is the sale of a large corporation that has access to resources of the state, and how that might encroach on the inshore fishery. There was also a discussion on the ownership of processors, but this committee has no great control over who buys independent processing companies. The processing sector is licensed by provincial governments, not the Government of Canada.

I want to focus my question on the concern that inshore fishers have as it relates to the sale of corporations that have access to offshore resources through licences or through a quota allocation.

[Melanie Sonnenberg]

I'll try again really slowly, and then if it doesn't work, I'll turn it to Ian.

Back to the blurring of the lines, it starts out offshore, but there are often doors that people are coming in through controlling agreements where they're gaining access to the inshore to get more supply. I think that is the preoccupation of the industry, the fact that things are not very transparent, and it's very difficult for us to see things up front.

In the case of Royal Greenland, yes, they are a processing industry that has come to Newfoundland, but with that they've also gained—and this is on the inshore—access through controlling agreements. We have other situations and companies that may be able to and may have access to the inshore in British Columbia.

The situation in British Columbia is quite different from in the east. They have a lot of corporations owning and running things in the fishery, as you know from your study. That has shown us in the east how dangerous and what a slippery slope it is in terms of getting control and how fast it happens because of the deep pockets.

I'll stop there and let Ian add to it.

[Ian MacPherson]

The other part of that, and Keith alluded to it earlier, is that I think every harvester wants healthy competition on the wharf. If it's too minimal, that's not a healthy situation. [Technical difficulty—Editor] everybody in the supply chain has to make money. I think, when you have a scenario where a company that's seeking a resource, and they may have an offshore licence, comes into the inshore and perhaps overpays what the market can support, usually there's a price to be paid. Sometimes it won't be that year, but it will certainly be the year after, and/or several years after.

[Bobby Morrissey, Liberal, Egmont, PE]

I'll interject because I'm running out of time.

The concern primarily from inshore fishers rests on who owns the processing level and the concentration at the processing side, not so much who has the corporate control of the offshore resource.

[Ian MacPherson]

Can you repeat that, please?

[Bobby Morrissey, Liberal, Egmont, PE]

Chair, I think I'm running out of time.

[The Chair, Liberal, Ken McDonald]

You have a few seconds.

[Bobby Morrissey, Liberal, Egmont, PE]

Is the concern amongst inshore fishers the corporate ownership at the processing level versus the corporate control at the fishing level, regardless if it's offshore? Your primary concern is the corporate ownership at the processing side, not on the harvesting side. Is that where you're coming from?

[Ian MacPherson]

I'd say it would be equal on both sides, because there are two sides to the industry. If there is an unhealthy balance on one side or the other, it's going to have negative impacts. That's an interesting question, and I would have to think on that a little bit more.

Melanie or Keith, do you have a quick response there?

[Bobby Morrissey, Liberal, Egmont, PE]

Chair, we can follow it up in a later question. Thanks.

[The Chair, Liberal, Ken McDonald]

Thanks, Bobby. Time was kind of over. I did allow a little extra because of the interruptions.

We'll 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 being here. Listening to them is most interesting. Their testimony is enlightening.

I am an islander, so the insularity of Prince Edward Island resonates with me. My father spent his life on the St. Lawrence River. He did coastal trade on a schooner. He was a captain. I was just talking about that this morning. My father always said that the offshore fishery was going to break the ecosystem and take away some of the fish and seafood that we need for community balance, as may be the case for Prince Edward Island. It's the same thing in the Magdalen Islands.

Mr. MacPherson, can you speak to that further, please?

[Ian MacPherson]

The problem is that they are driven for a profit, and the resource is for offshore sale. We need a healthy balance. I guess I want to reiterate that the inshore sector is not averse to corporations. It's just that, with the rapidity and the scope of these takeovers and buy ups of small operations—Martin was going to highlight another situation in Canada—it's fairly problematic. Of course, we all look to DFO to work hard and manage the resource so that no one takes advantage of it or takes advantage of it too much. These are challenges.

I think what we're talking about are checks and balances that need to be discussed and talked about more openly.

Thank you.

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

Thank you, that's very interesting.

In Quebec, we have what is called the blue economy strategy. It's been a big trend. It's about ensuring our self-sufficiency, turning to the community and prioritizing that part of our economy over the international part. The international economy may look more lucrative on the surface, but in fact it is often catastrophic in terms of depleting marine resources.

What is the situation on your side?

Are you concerned about losing, over time, the fish resource itself?

[Ian MacPherson]

We're always worried about the resource.

I think what happens is that if a company comes in and overpays—and it could be for several years, if the long game is to take control of a market or gain a large market share—that starts to reduce the competition on the wharf, because the boats get lost to the bidder paying significantly more. It's really not a productive way for our system to work here. We need those checks and balances.

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

So the economic vitality of your sector is indeed threatened, in these circumstances, if there is overfishing.

[Ian MacPherson]

Again, we leave it up to DFO to make sure companies are following the rules, not just inshore but midshore and offshore. As organizations, we're always watching that.

Certainly some of the offshore fleets, for some of the stocks, mackerel, for example, we have big concerns that too many of the big fleets are taking the majority of the resource out.

These are things that we, as organizations, deal with on a daily basis. That's what we're here to advocate for.

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

How much time do I have left, Mr. Chair?

[The Chair, Liberal, Ken McDonald]

You have just over a minute.

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

I'd like to address Ms. Sonnenberg.

Do you believe that there is an imminent danger of a resource shortage for small operators?

[Melanie Sonnenberg]

Generally, I would say that given the way the fishery is managed through the department, there are some stocks that have serious issues. Ian referenced mackerel as an example. So, yes, there are certainly areas in which we would have concerns.

I think, more importantly, it goes back to transparency, so that we can better understand in the corporate offshore, if that's what we're talking about [Technical difficulty—Editor] what's going on, and there's an integration.

I'll go back to one of Bobby's questions, and it ties into this. The fishery is a Canadian resource, and it must be managed for Canadians by Canadians and operated by Canadians. It's not a resource that we want to see given over to other countries or other foreign interests. It's very important, as we work through our management plans, to secure our supply in a responsible and sustainable way.

I agree with you about the blue economy. It has great potential for a more stable approach to generating income and wealth for our coastal communities, but it has to be done in a way that we can see it. It has to be enforced, and we have to ensure that the benefits come back into the hands of Canadians.

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you.

That's all the time we have for that line of questioning.

We will now go to Mr. Johns for six minutes or less.