Fisheries Committee on June 16th, 2021

[The Chair, Liberal, Ken McDonald]

Excuse me, Ms. Canet.

[Claire Canet]

Yes, Mr. Chair.

[The Chair, Liberal, Ken McDonald]

I'm going to have to cut you off there. We've gone over the time.

We do have the submitted copy of your statement. All members will have access to that.

I want to go on now to Mr. Sproul for five minutes or less, please.

[Colin Sproul, President, Unified Fisheries Conservation Alliance]

Good evening, Chair and honourable committee members.

Thank you for the opportunity to appear tonight.

The Unified Fisheries Conservation Alliance is a newly formed alliance of commercial fishery stakeholders calling on the Government of Canada to establish clear, lasting, responsible regulatory oversight for all fisheries: commercial, food, social and ceremonial.

Established in 2020, the UFCA represents thousands of independent, multi-species commercial fishermen and fishery associations from across the Maritimes. Our membership also includes small to medium-sized businesses that are directly or indirectly tied to the Atlantic Canadian commercial fishery. For thousands of Atlantic Canadians who work on boats, wharves, processing plants and throughout the supply chain, the commercial fishery is their livelihood. For rural communities and governments, the fisheries represent jobs, a tax base and economic impact that helps to provide vital services for all residents.

Unfortunately, regulatory uncertainty is causing anxiety and concern amongst fishers and other industry stakeholders over the long-term sustainability and prosperity of the industry. Clear rules, regulations, compliance and enforcement are needed.

We want to work with the Government of Canada and first nations to inform and understand viewpoints and ultimately establish regulatory certainty. Our members reject all forms of racism, intolerance and violence and believe that there is a path to move beyond the controversies and heated rhetoric of recent months to a positive outcome for all. The UFCA believes that indigenous and non-indigenous fishermen can work side by side, like they do today in the commercial fishery. We recognize and acknowledge the importance of co-operation with indigenous communities and that indigenous fishermen have a right to fish for commercial, food, social and ceremonial purposes.

Just as commercial fisheries operate today, there is room for diversity. There can be differences within allocation structures, administration and process; however, rules must ultimately and clearly form part of an integrated set of regulations that can serve fishery resources for generations to come and ensure a fair and respectful fishery for all.

Tonight I would like to discuss the imminent Clearwater Seafoods deal and its risks for coastal communities.

The current framework of the deal represents a tremendous missed opportunity for further integration of indigenous fishers into Atlantic fisheries and reconciliation in our communities. It picks winners and losers amongst first nations and further divides indigenous and non-indigenous fishing communities needlessly. There is a better way, and it starts with open dialogue and an end to secret deals at DFO. Communities adjacent to resources deserve a voice in decisions made in Ottawa, and when they are excluded from the conversation, they invariably lose.

We have serious concerns surrounding the proposed framework for the deal, including the lack of protection from the future potential for transfer of ownership of Canada's natural resources to a foreign entity, threats to the owner-operator policy, needless concentration of fishing efforts and others. Clearwater's monopolized lobster fishing area alone is larger than all lobster fishing areas of Nova Scotia combined. The current deal would exclude all fishers but one giant factory-style ship from this huge economic potential, including a majority of Nova Scotia's first nations and all moderate livelihood fishers.

What should be of equal importance to this committee is the fact the current deal would surely pit Mi'kmaq against Inuit in a battle for access to valuable northern shrimp and fish quotas. This fact could be a motivator for the deal and must be explored in more detail. It would be difficult not to view Clearwater's recent outreach to include indigenous partners as a response to the government's rightful decision to abide by the principles of adjacency to a resource in fisheries management and take a portion of the company's valuable quotas and deliver them to northern communities, both indigenous and non-indigenous.

It is beyond belief that the current government can ignore the potential for this fishery access to aid in the integration of moderate livelihood fishers. While it may be possible for the politicians involved on all sides of this deal to consider it a purely business transaction, it is surely not viewed that way in fishing communities across Atlantic Canada. The reality is that what's best for indigenous fishers, the people out on the water trying to make a living, is also the best for our members. What's best for a large corporation seldom is. It is high time for government to unite us along these lines instead of dividing us. All communities can benefit from these resources if their voices are allowed to be heard.

I'm anxious to give more details on a better way forward.

Honourable members, thank you. I invite your questions.

[The Chair, Liberal, Ken McDonald]

Thank you for that. You're just almost exactly on time, which I love to see.

We'll now go to the round of questioning, starting with Mr. Arnold for six minutes or less, please.

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

Thank you, Mr. Chair. I want to thank the witnesses for what I think is their fairly honest testimony here today.

Mr. Mallet, thank you for your references to how this is affecting processing, consolidation, centralization, and so on. It reminds me very much of what I've seen happen in British Columbia with our sawmill wood-processing situations out there. We've had Canadian companies with U.S. interests tire of the Canadian tax regime and the oppressive culture here and spend their investment dollars in the U.S. rather than reinvest in Canada, so we've lost out opportunities for Canadian workers, Canadian jobs and Canadian revenue.

Could you elaborate a little more on what you've seen? I believe it was you who talked about the one plant that did not reopen and how many jobs were affected there because of this centralization, which is maybe what we'll call it.

[Martin Mallet]

Again, I'll give you a few more examples, but I want to reiterate that I really don't have many solutions to the issues that are currently being raised today and have been in the last few weeks by this committee. I think this is a first step, and there needs to be a thorough study done by a group of experts to come back with some more details and potential solutions.

It seems to me, from my perspective in New Brunswick and Nova Scotia, that in some areas where the value of the licences and fishing enterprises have been increasing phenomenally in the last 10 years, such as the inshore lobster fishery in areas of New Brunswick, all of a sudden over the last five years there's been a lot more interest from “outside of province” interests and international interests. They buy into the local corporate processing sector and agglomerate these plants, which in some cases can be bought for a few million dollars.

It's still early in the game in some areas where maybe it's not too late to try to turn back the scene, but in some areas across Nova Scotia and on the west coast, particularly in B.C., there are flagrant examples of corporate international investments, and they need solutions.

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

Thank you.

Maybe I'll ask each of the three of you to give a somewhat brief answer to this next question. Does it appear to you that either the department or government would rather get rid of the inshore licences and the small processors and so on in favour of not necessarily just one, but larger organizations and corporations, because it might be easier for them to manage?

[Claire Canet]

If I may, it is difficult to speculate on the intentions of the government or of DFO. But certainly what we have been seeing on the ground and how the fisheries and the fishermen's organizations have been treated and the lack of socio-economic studies and socio-economic competence from DFO would tend to suggest that it would be a lot easier for them to deal with only one or two big corporations and get rid of inshore fishermen. But again, it is difficult to speculate on the intentions of a government or the ministry.

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

Thank you.

Mr. Sproul.

[Colin Sproul]

Like Ms. Canet, I find it difficult to speculate on the intentions of the government, particularly when we're very often excluded from them. But I will tell you that that is certainly the view of my members in Atlantic Canada.

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

Thank you.

I know that the time is very short. On that piece of it, then, one of the questions I wanted to get to is this. Do you feel there has been adequate consultation and information provided to your organizations as to the transfer of licences and in light of the Clearwater deal? Please provide a brief answer if you can.

[Colin Sproul]

I'm just going to pass it to Claire.

[Claire Canet]

From the Quebec point of view, there has been no information and no consultation at all about it. However, this is a deal that concerns first nations in other provinces—in British Columbia and Nova Scotia. Martin may be aware of consultations. I'm not aware of any.

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

Thank you.

Mr. Mallet, I see you have your hand up.

[Martin Mallet]

I'm not aware of any consultations with industry representatives. We heard from the department and the minister's office that it was in Minister Jordan's hands and that they were currently exploring the question.

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

It really seems that there's been very little consultation for Canadian processors to be able to provide Canadian products to Canadian consumers.

If you have anything further to add, please provide it to the committee, because I recognize that the chair is going to tell me that my time is up.

[The Chair, Liberal, Ken McDonald]

You're absolutely correct.

If you could provide it in writing so that the committee could have a look at it, we'd appreciate it. That's if we don't have a chance to hear it.

We'll go to Mr. Cormier for six minutes or less, please.

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

Thank you, Mr. Chair.

Good afternoon to all the witnesses, including Mr. Mallet and Mr. Sproul, from the Atlantic provinces, and my neighbour across the bay, Ms. Canet.

Mr. Mallet, I want to go back to the Clearwater situation. We have had an explanation from departmental officials. I would like to know what you are afraid of in that transaction, so we can understand the problem. I think we got a fairly full picture from the officials. They seemed to be saying that everything is done according to the standards.

What are you afraid of?

I want to get a sense of the scope of this. I know you talked about first nations. You have concerns that they may be disadvantaged.

Could you give us a summary of the situation?

[Martin Mallet]

I can answer briefly, and then I can turn it over to Ms. Canet.

The nature of the agreement is a little strange. No one is able to explain to us why the licences are to be transferred to a secondary entity owned by the first nations. We would like to have a clear and simple explanation.

Ms. Canet, you have the floor.

[Claire Canet]

A number of aspects actually seem unusual to us. The transfer of licences to first nations is one example.

Another unusual aspect is the vertical consolidation of a number of the fisheries. As I explained in my testimony, many of the commercial communal licences are held by groups that are 50% shareholders in Clearwater. Clearly there is a conflict of interest in terms of where those catches go. Vertical integration will limit access to the catch for Canadians.

The other aspect is that we will end up in a buyer's monopoly, where the more access buyers have to the landings, the more power they will have. They will therefore decide on the landing prices for the fishers. This will put the fishers in a vulnerable position.

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

Thank you.

Maybe I could go to Mr. Sproul on that, just quickly. Then I have a couple more questions.

[Colin Sproul]

I think there are a lot of questions around the ownership. One of the most important things we should examine is a comparison of the value versus the costs paid into this. We see by the $750 million-$250 million split in a fifty-fifty partnership....

In an inshore fishing business, we all recognize that the key asset in the fishery is access to the fishery. When you look at the ownership stake of Premium Seafoods owning the depreciating onshore assets, and the coalition of first nations owning the access to the fishery, we're left wondering if there's a level to the agreement that's not visible to the department. I think there's due diligence on the department's behalf to find that out.

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

Okay. Good. Thank you.

Mr. Mallet, just to go back, I know I've been quoted a lot in terms of being the one who has named this company, Royal Greenland, a lot, but look, I think I'm not the only one who faces this challenge. As you know, in this region this year I received a lot of phone calls from fishermen and producers that they were present on the wharf and were offering a lot of money to fishermen for their catch.

DFO officials seem to have said that it is maybe more of a provincial issue, but at the end of the day, as I said, the resource belongs to Canadians. I think we will have a huge problem if we let that happen with a company like Royal Greenland, which is backed by the Danish government. Everybody is thinking about it.

What do you think the department should do about that? It will be a huge problem if we lose the industry that we've built over many years in our communities. What do you think we should do about this?

[Martin Mallet]

Well, for starters, I can't think of any other country that would enable some corporate entities owned by other countries to come into their fisheries and own processing plants and quotas. I think there should be special consideration done here to these types of international interests. As I said in my statement, I think that the fisheries resources in Canada should be considered a strategic Canadian resource and should be connected with some special rules to protect this resource for Canadians.