Fisheries Committee on June 16th, 2021

[Adam Burns]

The nature of offshore licences is such that the operations often occur throughout Atlantic Canada and Quebec. That's why our focus is on the Canadian ownership status of the company to whom that licence is issued, as opposed to the specific community. This is unlike inshore licences, which do have residency requirements because they are more directly linked to a specific community.

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

That's basically around the ownership. Are there any other factors to consider in that?

[Adam Burns]

The inshore fishery is 100% Canadian-owned because of the requirements in the inshore regulations that I described. In the offshore sector, each of those licences is issued to a company that is at least 51% Canadian-owned. I should note that requirement and that corporate structure aren't just related to the entity to whom the licence is being issued, but it's throughout the entire corporate structure, all the way to the top, if you will, and all elements of that corporate structure need to meet that 51% Canadian ownership requirement.

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

How do you prove that 51%? Who does all of that work? Is that DFO? Explain that process a little bit to me.

[Adam Burns]

The ownership of these companies is a matter of public record, so that would be the means by which...and the requirement around that 15-day notification if that structure is changed.

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

When the report is done, how do you prove that it's at 51%. Is it because it's public? Does DFO sign off at the end of the day and say, yes, that's 51? Do they look at the public [Technical difficulty—Editor] of everybody to prove that this is actually factual at the end of the day?

[Adam Burns]

We would look at the public registry information related to the ownership of the company. Obviously there are legal requirements around the truthfulness of those reportings.

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

Does DFO monitor the economic benefits flowing to coastal communities from offshore commercial fishing activities? If so, how?

[Adam Burns]

Certainly socio-economic considerations do play into the minister's decision-making. It's prescribed right in the Fisheries Act legislation that that's a legitimate consideration for the minister. We have economic analysts who work on those sorts of things. When the minister is making any type of decision, she would seek, amongst other things, an analysis of the impacts on coastal communities.

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

Is that information shared with the communities?

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Mazier.

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

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you, Chair. There may be an issue with my Internet connection. If there is, you can just move to somebody else.

My first question, Mr. Burns, is about one of the issues that has caused a lot of concern within the east coast inshore fishery, namely the the recent sale of Clearwater. Could you advise this committee if there is any way that Clearwater corporation, as currently structured, could acquire any inshore fishing licences that are now issued under the owner-operator policy?

[Adam Burns]

Your question is if they could acquire new inshore licences. The answer would be that any inshore licence subject to the inshore regulations that is currently in the hands of an independent core harvester could not be reissued to Clearwater or to any other—

[Bobby Morrissey, Liberal, Egmont, PE]

Corporate identity.

[Adam Burns]

—corporate entity. That's correct.

[Bobby Morrissey, Liberal, Egmont, PE]

That's clear for the record then. Any corporation that is licensed to fish in the offshore would not be able to acquire inshore licences that are governed under the owner-operator regulation and policy.

[Adam Burns]

That would be under the inshore regulations, so it would be a regulatory requirement that would prescribe the eligibility.

[Bobby Morrissey, Liberal, Egmont, PE]

Another question that concerned the inshore fleet was, could these offshore licences be changed to any other categories? Could they be broken down and reissued as inshore ones? For instance, if we take the offshore lobster, could those licences be changed from offshore to inshore lobster licences?

[Adam Burns]

In a technical sense, I don't believe so.

First of all, we have our fleet separation policies. Secondly, the location of the fishery is such that I don't think an inshore vessel would be able to safely navigate and undertake fishing in those offshore areas.

[Bobby Morrissey, Liberal, Egmont, PE]

No, Mr. Burns, that was not my question.

My question was on access to offshore lobsters through licences or quotas. Could the status of those licences, which are held corporately, be changed to inshore lobster fishing licences?

[Adam Burns]

The answer, generally, is no. That would partly be because those offshore licences are specifically attributed to the offshore fishing area, which would be reasonably inaccessible to 65-foot or less vessels.

[Bobby Morrissey, Liberal, Egmont, PE]

I'm not talking about the vessel. Don't use the vessel.

I'm strictly speaking about access to the species and the resource. Obviously, if you came inshore, you would use a different vessel. We all know inshore fleets cannot fish offshore. That's why they're not offshore.

My question was about access to these lucrative offshore licences, primarily lobster. Could any corporation that has access to offshore lobster fishing rights through quotas or licences convert those licences to inshore licences, and then pursue an inshore lobster fishery under the same terms as those currently licenced?

[Adam Burns]

No, because those licences only afford access to that offshore area.

[Bobby Morrissey, Liberal, Egmont, PE]

That's important.

Could you also clarify the following as well? In an earlier question, I believe you alluded to the fact that when a licence is transferred from one corporate identity to another, there's still some due diligence done by the department when it's transferred at that stage. However, you said that at a certain stage, you you could not interfere again until the licence is permanently transferred.

When a licence is transferred to a corporation, is there a timeline on it? What may trigger a review of that licence?

[Adam Burns]

What I was referring to there is that if we were to be notified by a corporate licence holder that its corporate structure had changed and that it was no longer 51% Canadian, the licence holder would become ineligible to have a licence reissued. At the time its current licence expired, a new one would need to be reissued; however, the licence holder wouldn't be eligible to receive it, so it wouldn't be issued.