Fisheries Committee on June 16th, 2021

[The Chair, Liberal, Ken McDonald]

I now call this meeting to order.

Welcome to meeting number 37 of the House of Commons Standing Committee on Fisheries and Oceans. Pursuant to Standing Order 108(2) and the motion adopted on April 21, the committee is meeting for its study on corporate offshore licences.

Today’s meeting is taking place in a hybrid format pursuant to the House order of January 25, and therefore members can attend in person in the room and remotely using the Zoom application. The proceedings are made available via the House of Commons website, and the webcast will show only the person speaking, rather than the entire committee.

To ensure an orderly meeting, I would like to outline a few rules to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor or English or French. You will also notice the platform’s “raise hand” feature on the main toolbar should you wish to speak or alert the chair. Before speaking, please click on the microphone to unmute yourself. When you are not speaking, your mike should be on mute.

I would now like to welcome our witnesses for today. For the first panel, we have, from the Department of Fisheries and Oceans, Adam Burns, director general, fisheries resource management; Heather McCready, director general, conservation and protection; and David Whorley, director, national licensing operations.

Before we go to the opening remarks by Mr. Burns, I would like to welcome Mr. D'Entremont, from West Nova, back to our committee again. Also, of course, we have Mr. Kent, the member for Thornhill, with us. It's good to see you both here today.

Mr. Burns, when you're ready, you can start, for five minutes or less, please.

[Adam Burns, Director General, Fisheries Resource Management, Department of Fisheries and Oceans]

Thank you, Chair, and good afternoon to the members of the committee.

My name is Adam Burns and I'm the director general of fisheries resource management at Fisheries and Oceans Canada. As you noted, I'm joined by Heather McCready, the director general of conservation and protection, as well as David Whorley, the director of licensing operations.

We're here today in support of this committee’s study of offshore fisheries, including the processes related to licensing and quota transfers. We appreciate the opportunity to be here.

I would like to briefly touch on some of issues that may be related to this study, and I hope that we will be able to provide better and further details for you over the course of today’s discussion.

The offshore fishery in eastern Canada comprises those vessels greater than 100 feet in length. There are presently 97 offshore licences in eastern Canada and the Arctic, which account for about 37% of total landings in the area.

On the East Coast, the Department remains committed to Canadian ownership, and to the review of fishing company purchases to ensure the ownership requirement of being at least 51 per cent Canadian-owned to be eligible to receive the fishing licences is met.

Under the Commercial Fisheries Licensing Policy for Eastern Canada, if foreign interests acquire over 49 per cent of the common shares of a Canadian-owned corporation which holds fishing licences, the licences will not be reissued to that corporation upon the expiry of those licences.

In addition, regulations provide that where there is a change in the controlling interest of a corporation that holds a fishing licence, DFO must be advised of the change within 15 days afterward.

The ownership review requires that the licence-holder and all parent companies that hold a controlling interest in that licence-holder be majority-owned by Canadians. The intent here is to prevent foreign interests from establishing effective control over licence-holders in the offshore.

While on the east coast offshore licences are issued to companies, which can designate various vessels to fish the licence, on the west coast, a vessel-based licensing regime is used. In that case, when there is a change of vessel ownership, DFO requires a notice of change of ownership documentation from Transport Canada to indicate the vessel owner or owners on record and Canadian vessel registration. A similar 15-day time limit for this notification is set out in regulation.

With respect to offshore licence transfers, licences are not, strictly speaking, transferable. That is, licences are not generally considered as property, and so cannot be legally sold or bequeathed. However, the Minister does have discretion to reissue a fishing licence held by one licence holder to another harvester, upon request from the licence holder and agreement from the potential recipient.

In those cases, officials conduct a review for Canadian ownership of the transferring party, as described. As well, the minister takes into account any land claims obligations that could be relevant to the request of transfer. Finally, the minister has broad discretion to consider the broader public interest in making any decisions related to a request for a licence transfer.

With respect to quota transfers, there are two varieties: temporary and permanent. In the case of temporary quota transfers, those being in-season transfers from one harvester to another, officials ensure that the transferring party and transferee have mutually agreed on the amount to be transferred, that all licence fees have been paid to the Crown, and that the transferring party has the quota available to support the transaction. This type of transfer terminates at the end of the fishing season, at which point quotas are allocated anew in light of available catch and the fishery's sharing scheme.

With respect to requests for the permanent transfer of quota attached to offshore licences, officials conduct a review for Canadian ownership that mirrors the process for licence transfers, and ensures, among other things, that all fees and fines have been paid. Finally, if the proposed permanent transfer would alter the agreed-to quota-sharing arrangement for a given fishery, the department consults with industry on the proposed transaction.

With respect to commercial versus communal commercial licences, these two forms of licence exist under different regulations, the former under the Atlantic fishery regulations and the latter under the aboriginal communal fishing licences regulations.

Technically speaking, there is no transfer from one type of licence to another. Rather, a harvester would have to notify the department of the licence relinquishment, and then the department would have to receive a separate request for a commercial communal licence.

The request to establish a new ACFLR licence provokes a review as enabled by section 8 of the fishery (general) regulations. Communal commercial licences can only be issued to “aboriginal organizations”, as described in the regulation, rather than to an individual or a company, as in the case of commercial licences in Atlantic Canada and Quebec.

I hope the committee finds these brief overview comments useful. We look forward to the committee's questions.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Burns.

We'll now start our first round of questioning.

Before I go to Mr. Arnold for six minutes or less, I would remind members to please identify who you want to have answer the question. It will make better use of your time, so to speak.

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

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

Thank you, Mr. Chair.

Thank you, Mr. Burns, for the introduction.

My questions will first go to Ms. McCready.

Ms. McCready, some of the recent testimony this committee has heard regarding the state of offshore licences in Canada's fisheries has been troubling, to say the least.

We've heard that corporations are able to hide foreign ownership. Are you aware of this?

[Heather McCready, Director General, Conservation and Protection, Department of Fisheries and Oceans]

Thank you very much for the question. I moved to Fisheries and Oceans from Environment and Climate Change Canada about six months, so this is the first time I've been able to appear at a committee. It's a great pleasure to be here.

I've certainly heard the allegations. We discuss that sort of thing internally and determine whether action needs to be taken.

I should be clear that the offshore policy guides the department's decision-making about issuing licences. When it comes to enforcement, Canadian vessels are governed by the Fisheries Act, of course, and foreign vessels are governed by the Coastal Fisheries Protection Act.That's where the enforcement agencies concentrate their work.

When it comes to—

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

Are those enforcement activities not under your purview, your title?

[Heather McCready]

Yes, they absolutely are. Those are the two acts that are in play, that the conservation and protection program enforces.

The offshore and foreign ownership policy that you are referencing guides departmental decision-making. However, providing false and misleading information to the department is an offence under the act. That would be an angle for enforcement on this issue, if it were warranted.

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

Are you aware of any contraventions of Canada's laws and regulations that govern ownership of offshore fishing licences?

[Heather McCready]

I'm not currently aware of any where this is evidence to support pursuing the matter further.

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

Are you not aware of how corporations might hide foreign ownership?

[Heather McCready]

I'm aware of the allegations and I'm aware of how we can look at those things to determine whether there are issues.

People talk about following the money and about looking at the corporate structure. Those are the types of things taken into consideration when a department is making licensing decisions.

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

If DFO is supposed to uphold the Canadian laws and regulations that govern ownership of offshore fishing licences, and if some foreign owners of offshore licences uphold and abide by our laws and regulations, but others do not and there are cases where there are contraventions of the laws, what is DFO doing to stop them?

[Heather McCready]

As I mention again, the policy you're talking about governs departmental decision-making. The offence would be to provide false and misleading information to the department. That's under the Fisheries Act. If we have cases where there's sufficient evidence to pursue a prosecution or other enforcement action, we would take that action. I'm not currently aware of any cases where we have that sort of evidence.

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

Okay, thank you.

We know that DFO regulates fishing licences on our Atlantic and Pacific coasts in two different ways or manners. In the Pacific region, does DFO have any tools in place to stop a foreign entity from buying any Canadian corporation that owns access rights to Canada's fisheries resources?

[Adam Burns]

Mr. Arnold, I'd be happy to take that question.

You're absolutely correct. There are different policies in place on the east and west coasts. In the case of the west coast, the review by the department related to any licence transfer is linked to that vessel registration with Transport Canada, and not the particular ownership structure of the entity to which the licence would be issued.

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

So there are differences from coast to coast. Could you clarify a little further whether that's DFO—or did you say Transport Canada?

[Adam Burns]

It's a DFO policy in terms of the differences on the east and west coasts related to ownership structure. On the west coast, when a transfer request is made, it relates to a change in the ownership of the vessel. We would need to see that change in ownership of the vessel, and that paperwork would need to be submitted to Transport Canada, and then be provided to us.

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

Does DFO work closely with Transport Canada on those?

[Adam Burns]

It's not really a “DFO to Transport Canada” discussion. The particular vessel owner would need to provide the documentation to DFO demonstrating that that change in registration has occurred with Transport Canada.

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

Okay, thank you.

Are you aware of any foreign crews allowed to fish...Canadian licences?

[Adam Burns]

I actually do not have the answer to that, sir. My colleague David Whorley may have the answer. I can seek to get an answer for you, if not.

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

I can ask Mr. Whorley that question or ask that we be provided that answer as soon as possible. We only have limited time left with the House sitting, so time is certainly important.

[David Whorley, Director, National Licensing Operations, Department of Fisheries and Oceans]

On that question, I think probably the easiest thing to do is to follow up with the committee.

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

Thank you very much.

If a captain cannot find enough Canadian crew to operate a vessel under these licences, does DFO allow the captain to employ temporary foreign workers to fill that crew?

[Adam Burns]

I will have to put that in the same category in terms of the specifics. I know that temporary foreign workers are certainly used within the processing sector. On this particular issue I'm not directly aware of the answer.

Actually...I've just found the correct information, sir. I can tell you now that DFO's concern relates to the licence-holders themselves and not the crew. So if those individuals were legally entitled to work in Canada, then they could do so.