Evidence of meeting #37 for Fisheries and Oceans in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was licence.
A video is available from Parliament.
Conservative
Liberal
The Chair Liberal Ken McDonald
Thank you, Mr. Arnold.
We'll now go to Mr. Battiste for six minutes or less, please.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
Thank you, Mr. Chair.
I'd like to start off my questions with Mr. Whorley.
The focus of this study is on the transfer of corporate offshore licences. I'd like to lay some groundwork on the topic before we move forward.
Could you describe step by step the process and level of review undertaken by your department and staff before making a recommendation on whether a transfer should be authorized?
Director, National Licensing Operations, Department of Fisheries and Oceans
Sure.
If we're looking at a licence transfer and at the question of ownership, there are a few things. Typically, licensing officers will request a set of information, as well as an information attestation from a lawyer. The kind of information that would be requested would be things like the certificate of incorporation or the articles of incorporation showing the ownership structure of a company. With respect to that attestation, there's a requirement to prove that the applicant or that the respective recipient meets the Canadian ownership rules. The kinds of materials that you could get there would be things like individuals who have beneficial ownership—say, greater than 10% of the shares in an organization—the individual shareholders, the individuals that have significant control with respect to the prospective licence holder.
That review looks at not only the narrow sense of the prospective recipient but also the complete corporate structure, so you move through the entire structure to ensure that that 51% is met. When you get to about that point and the officer or the executive that's overseeing that is satisfied with it, then you've met the ownership responsibilities, and the transaction would go ahead, assuming that all other fees and fines are paid and that all the other regulatory considerations are met. That's kind of a quick overview of the kinds of ownership reviews that you'd do.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
Okay.
I want to pivot to some of the concerns that we've heard during the testimony, specifically that there may be foreign or foreign-backed entities that are using whatever methods to inflate, manipulate or control prices at the wharf to the detriment of Canadian enterprise.
On the other hand, my understanding is that the DFO's jurisdiction in these instances largely ends once the fish reach the wharf and exit the harvesting side of the equation, at which point the buying and processing is primarily under provincial jurisdiction.
My questions would be this: Is my understanding correct that the buying and processing side is primarily provincial jurisdiction?
Director, National Licensing Operations, Department of Fisheries and Oceans
That's correct. The DFO's responsibility basically ends as the fish enter the chain of commerce.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
If that is correct and if interference were occurring, whether or not it is, in your opinion, where in the DFO's jurisdiction can the department intercede on behalf of Canadians, or is this primarily a question of provincial governments?
Director, National Licensing Operations, Department of Fisheries and Oceans
If you're looking downstream in that stream of commerce, yes, it falls into the provincial category. I think, on the upstream side of that, the ownership considerations are the things that I've set out. I think this committee is well versed on the inshore regulations and the old PIIFCAF model. In that respect, there is the search for controlling agreements as they were under PIIFCAF. That's a slightly different area from what I think you're asking about. Once you get into the processing side and the chain of commerce, that really falls under provincial jurisdiction.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
Lastly—and I'll open this up to the other witnesses—do you presently believe that interference is occurring, and if so, at what frequency and at what level of severity?
Director, National Licensing Operations, Department of Fisheries and Oceans
I'm happy to start off with that, unless, Adam, you want to field that.
Director General, Fisheries Resource Management, Department of Fisheries and Oceans
It doesn't really matter. I actually was going to suggest that that's more of an enforcement question, so it may be most appropriate to pass to Heather McCready.
Director General, Conservation and Protection, Department of Fisheries and Oceans
Thanks, Adam.
I can't comment on any ongoing cases. We don't have any concluded cases that I could speak about with you here, so it's tough for me to answer that question and give you any numbers. I am aware that there are allegations and that people believe that there are some problems.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
Mr. Whorley, do you want to chime in on that, or is it just because there are ongoing cases that you can't tell this committee?
Director, National Licensing Operations, Department of Fisheries and Oceans
I think that I'd only be speculating. With respect to the ownership question, on the downstream processing side, I'm not sure. With respect to the ownership on the licensing side, I think that we do that review, and we set a bar that's fairly stringent for transfers and recipients to get over on that side. I would only be guessing if I were to try to come up with the kind of figure you're looking for. I think I'd defer to Heather McCready.
Liberal
Jaime Battiste Liberal Sydney—Victoria, NS
I don't think I have much time, but if at all possible, I'd love to know how you communicate that with the fishermen across the Atlantic on these situations that are causing a lot of anxiety and fear. However, I know you can't get to that right now.
Liberal
The Chair Liberal Ken McDonald
Thank you, Mr. Battiste.
We'll now go to Madame Gill for six minutes or less, please.
Bloc
Marilène Gill Bloc Manicouagan, QC
Thank you, Mr. Chair.
I would like to thank all the witnesses for joining us today to answer our questions.
I share many of the concerns that Mr. Arnold mentioned earlier and at the last meeting of this committee.
Mention was made of the distinctions between the policies and regulations in effect in the east, meaning the Atlantic provinces and Quebec, and in the west. I would like to know the principles on which those distinctions are based.
Bloc
Marilène Gill Bloc Manicouagan, QC
There was a technical problem. I apologize for that, Mr. Chair.
So let me start again.
I would like to thank all the witnesses for joining us today to answer our questions.
I was saying that I had similar concerns to those expressed by Mr. Arnold, and we have shared interests. I am wondering about the distinctions between the policies and regulations in effect in the Pacific provinces, in the Atlantic provinces and in Quebec. I would like to know the principles on which those distinctions are based.
The witnesses can frame their answers in a number of ways. I do not know who can answer my question, whether it's Ms. McCready, Mr. Burns or Mr. Whorley, but I invite each of them to do so, if possible.
Director General, Fisheries Resource Management, Department of Fisheries and Oceans
Mr. Chair, I can begin in responding to those questions.
The structure of the fishery has evolved differently on the east coast than on the west coast. On the east coast, we have an offshore fleet and a separate inshore fleet, whereas that structure and approach has not been employed on the west coast.
While on the east coast we license individuals or corporations and companies under our commercial licensing regime, on the west coast it's largely, anyway, a vessel-based licensing regime. Because of that, the policy frame that backs that up is different. The focus of our review on the west coast is the ownership of a vessel and the registration of that vessel with Transport Canada; and the focus on the east coast is the corporation to whom the licence is issued directly.
As a result of that evolution of two different approaches on the two coasts over time, the policy approach has also developed differently, and necessarily differently, in the sense that it needs to be established to support a different approach to the licensing regime.
Bloc
Marilène Gill Bloc Manicouagan, QC
Thank you.
When Mr. Whorley was asked about the number of offshore licences issued in Eastern Canada, he mentioned 97 licences, I believe
Is that correct, Mr. Whorley?
Director, National Licensing Operations, Department of Fisheries and Oceans
Yes. It was in the opening comments. There are 97 licences.
Bloc
Marilène Gill Bloc Manicouagan, QC
You then mentioned, and I believe Mr. Burns did too, the whole issue around licence renewal. You talked about licences not being reissued when they expire, if a company comes under foreign control.
I would like to know the number of licences held by companies where more than 49% of the shares are under foreign control, with the result that the licences will not be renewed in the future.
Do you know that or not? Do you need more information and, if so, how are you able to get it?
Director General, Fisheries Resource Management, Department of Fisheries and Oceans
Mr. Chair, I can attempt to respond to that question.
Of the 97 offshore licences, what I was referring to is if there is a change in their corporate structure. At this moment in time, to our knowledge, all 97 licences meet the Canadian ownership requirements.
If there is a change in their ownership structure, the requirement is that they notify the department within 15 days. If they did not meet the 51% Canadian ownership requirement, a licence would not be renewed for that company.
Marilène Gill Bloc Manicouagan, QC
I would like to ask a question about that.
You are telling us that all those companies meet the requirements. But, if I go by the questions that have been asked, there seems to be some degree of uncertainty, but that no one really knows. From what I gather, there is perhaps a way to get around the requirement to communicate all the documentation required to show that the company is under Canadian control.
Despite having issued those 97 licences, do you have any reasonable concern that some companies do not currently meet the requirements?
