Fisheries Committee on May 23rd, 2024

[The Chair, Liberal, Ken McDonald]

I call this meeting to order.

Welcome to meeting number 111 of the House of Commons Standing Committee on Fisheries and Oceans.

This meeting is taking place in a hybrid format, pursuant to the Standing Orders.

Before we proceed, I would like to make a few comments for the benefit of our witnesses and members.

Please wait until I recognize you by name before speaking, and please address all comments through the chair.

Before we begin, I would like to ask all members and other in-person participants to consult the cards on the table for guidelines to prevent audio feedback incidents. Please take note of the following preventative measures in place to protect the health and safety of all participants, including our wonderful interpreters. Only use a black, approved earpiece. The former, grey earpieces must no longer be used. Keep your earpiece away from all microphones at all times. When you are not using your earpiece, place it face down on the sticker placed on the table for that purpose. Thank you all for your co-operation.

Pursuant to Standing Order 108(2) and the motion adopted on February 15, 2024, the committee is resuming its study of scales used by the Department of Fisheries and Oceans to set redfish quotas.

Today we have with us Sylvie Lapointe, president of the Atlantic Groundfish Council. Welcome. Thank you for taking the time to appear today.

You will have five minutes or less for your opening statement. You have the floor.

[Sylvie Lapointe, President, Atlantic Groundfish Council]

Thank you, Chair.

Good afternoon, everyone. I appreciate your inviting me to be here today.

I would like to first introduce the Atlantic Groundfish Council to you. We represent year-round groundfish harvesters in Atlantic Canada. We are committed to a balanced, sustainable groundfish industry that puts the responsible management of the resource first and foremost. Whether they are based in Lunenburg, Nova Scotia, or Arnold's Cove, Newfoundland, our members believe the future of tomorrow is based on the decisions made today.

Our members have been part of the groundfish fishery for generations and are deeply passionate about its future. These are family-owned and indigenous-owned local companies. Collectively, AGC members employ thousands of Atlantic Canadians in primarily year-round jobs, with an annual payroll for local employees exceeding $200 million. They spend another $400 million on goods and services from local businesses annually and donate millions to community organizations and charities every year. They provide quality employment opportunities, and those employees are often the heart of rural communities, serving as volunteer firefighters, coaches of youth sports teams, breakfast program volunteers and the lifeline of many clubs and organizations. AGC members provide economic stability in coastal communities, which often have limited alternative access to economic opportunities.

In terms of the redfish history, the unit 1 redfish fishery is not a new fishery, neither in policy nor in practice. An ongoing fishery has been conducted at a reduced level, according to DFO-defined proportionate quota shares, for many years. The offshore sector, which owns and fishes from small, medium and large boats and operates coastal production plants, developed the commercial redfish fishery. Its historical quota share of gulf redfish was 78.7%.

Stability of quota shares is a key piece for us. Long-established quota-sharing arrangements are the foundation of responsible, transparent fisheries management in Canada and are firmly entrenched in current public policy, including for reopening closed fisheries: “Where closed fisheries are reopened, the Minister...will generally respect historic fleet shares, reflecting past participation in and dependency on a particular fishery as the basis for allocations.”

Stable quota shares enable right-sizing harvesting capacity to the resource; help fishers make long-term plans with confidence; promote a conservation ethic to harvest for tomorrow; promote self-reliance; protect investments made in good faith, including by indigenous groups; facilitate better-quality products and economic efficiencies; and provide transparent decision-making. I would note that at the international negotiating table, Canada's position on reopening closed fisheries is clear: to respect existing quota shares.

In terms of the decision made by the minister earlier this year, although AGC members have been painted by some as a winner in the decision, these local companies lost 20% of their share and feel that loss deeply. That includes indigenous licence-holders from seven Mi'kmaq communities in Nova Scotia and Newfoundland and Labrador through their 50% ownership of Clearwater Seafoods. These businesses have reinvested tens of millions of dollars in the redfish fishery. They have continuously participated in good faith in the commercial, index and experimental fisheries since their development, going back to the 1950s, based on government's sharing arrangement policy.

Looking forward, we respect the government's goals of increased indigenous participation in fisheries and continually express our willingness to help reach those goals. We've also chosen to accept that an almost doubling of quotas for inshore harvesters in Newfoundland, Nova Scotia and Quebec comes at our expense.

The rebounded redfish stock in the gulf presents a real opportunity for people and communities throughout Atlantic Canada and Quebec, but in a highly competitive global market, industry needs to be equal parts realistic about the opportunity and focused on achieving it together. The task for industry is to harvest, process and market the right-sized redfish to the right markets, in the right product form, at the right time of year. The more successful industry is at achieving that, the better news for everyone.

We have a lot to offer the industry as we move closer to the opening of a commercial redfish fishery. We are familiar with existing and developing markets. We are continuously willing to invest in marketing and sustainability requirements. We have experience harvesting quality redfish in a fleet of vessels that vary in size from 61 feet to 245 feet. Our processing experience is held by local employees, and we already hold MSC sustainability certifications for five groundfish species in Atlantic Canada, with another five under fishery improvement projects that secure access to many markets.

Those efforts borne by the AGC and its members benefit harvesters from all fleet sectors who fish those species.

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you for that.

We'll now begin with our first round of questions.

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

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

Thank you for attending, especially after the technical challenges last time. We appreciate your coming back, and we appreciate MP Barron's invitation to try to make sure that you got to a point to present on this important issue.

I represent South Shore, Nova Scotia, where some of your members have facilities: Mersey Seafoods and Clearwater.

There's been a lot of controversy in the discussions about this, and we're still, I believe, waiting for the minister to set the TAC. We haven't actually seen the TAC yet, but I'd like to start by asking for a little info on the idea of the historical allocation. There's been controversy there, with people saying that it depends on which part of history you look at for the offshore fleet having the percentages you spoke of, versus different allocations.

Can you provide the committee just a little history, from your members' perspective, about how they got that percentage and why it's important?

[Sylvie Lapointe]

We acquired much of our harvesting access in redfish when others were not interested in participating in the redfish fishery because either it was not profitable or it had very little openness, access, in terms of a commercial fishery. Other industry participants took shrimp and crab licences instead of continuing or fishing for redfish. That is where our participation comes from.

It's been over 30 or 40 years that we've been involved in this fishery. We have invested heavily in the reopening of a redfish fishery in unit 1, in terms of processing plants as well as vessels. We have continually, as I indicated, participated in this fishery, whether that was when it was under a moratorium and there was only a test fishery or when there was an experimental fishery, and now we look forward to participating in a commercial redfish fishery.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Your members actually acquired access and paid the open market commercial rates at the time for that access in a willing buyer, willing seller sort of terminology. It wasn't obtained in some surreptitious way or allocation. They paid money for it. They kept the fishery going and continued to try to develop it when others weren't. Do you think it is fair, after all that investment, that those who sold now ask for it back for nothing?

[Sylvie Lapointe]

We are very much believers in a willing buyer, willing seller model, whether it be for access by inshore harvesters or indigenous participants. We feel that it is best left to the industry, once the government can state certain objectives for the fishery.

We feel that it's best handled by industry-to-industry or industry-to-indigenous discussions and negotiations, where everybody is a winner, as opposed to creating an environment where we're creating winners and losers. We feel that government really has no place in these types of discussions.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

There has been a lot of discussion and sort of confusing testimony—at least to me—around the capacity or the size of the TAC that should be set. The minister has said that it's going to be at least 25,000 tonnes. There's the science that says that it looks like 80,000 to over 200,000 metric tons could be consumed—or should be, because it's having an impact on other species.

If the minister were to set the TAC at the lower end, at 25,000, could anyone, whether you're in the inshore or the offshore, actually make a living at it at the current price that redfish is fetching, which I think is about 35¢ a pound?

[Sylvie Lapointe]

Markets are very challenging. We've been trying to develop markets for redfish in Europe, Asia and parts of Africa since about 2020 in anticipation of the reopening of the unit 1 redfish fishery. We face a lot of stiff competition from countries like Norway, Iceland and Russia, which are really selling the larger fish, and I think members know that the fish we have in unit 1 are smaller than what the market is looking for.

In terms of the total allowable catch, we are comfortable with the floor that the minister has set. Having said that, we understand that other participants in the fishery would like to increase the total allowable catch beyond that 25,000 tonnes, and we would be comfortable with that, just recognizing that the higher you go, at least in year one, there are no markets to extract the maximum value out of this fishery.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I understand from my lobster fishermen that they were paying $1.40 a pound for heads and tails of redfish for bait, but the fish itself is.... In at least one instance in my community, there were over a million pounds of the fillets, through the experimental fishery that's been going on, that are still in storage and unable to be sold.

If the minister does increase the TAC, how are we going to sell 25,000 tonnes, let alone 50,000 or whatever number, no matter who catches it? Where's the market for it?

[Sylvie Lapointe]

Well, it's probably not in Europe, because that is where they're looking at a fish that is much larger in terms of fillets. What we have been exploring are markets in China and Korea, where there is consumer interest in eating a whole small fish. We are trying. We've been investing quite a bit to try to develop a market there for the whole small redfish. We've been trying to market it not as a small redfish, but as something that is an alternative to a fish that they would already be familiar with in their own country.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Perkins.

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

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, Mr. Chair.

Really, the question that has been raised has to do with equity in the total allowable catch: Who gets what share of it? Traditionally, Nova Scotia has had the largest share, but it's also—according to a chart that I have in front of me—due to see a substantial drop in that share. Is that really the core of the issue that the committee is supposed to be looking at here?

[Sylvie Lapointe]

As I said, we've come to accept the decision that's been made by Minister Lebouthillier in terms of reducing our historical share. We strongly believe that those aren't the right decisions to make. People invest based on the shares they have. Banks lend money to companies based on the shares they have. When access and allocation are destabilized, there are no winners, and it's not a good way to proceed.

As I've said, we've accepted that decision. We hope that, going forward, other participants in this fishery will work with us to develop the markets to extract the maximum value out of this fishery.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

We were given information that suggested there had not been a substantial redfish fishery for about 30 years. Obviously, if catches were available, they would be very constrained. Would this then explain and speak to Mr. Perkins' point that there doesn't seem to be a very robust market for this? It's the market infrastructure that also has to be re-established, if you like, to the degree that people will actually make money from this fishery.

[Sylvie Lapointe]

The challenge with the fish in unit 1 is that they've stopped growing. They're very small. They're about 25 centimetres, whereas the average size of redfish in the market is 40 centimetres. That really makes it more challenging to continue to service a traditional European market, let's say, or an American market. We really need to find a home for these smaller fish.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

On the one hand, the stock seems to be growing to the point that a larger fishery is possible, yet, as you've noted, the fish themselves are smaller. What explains that? Does science tell us anything about what's going on? Why is the number of fish increasing, yet the size seems to be shrinking? What's happening there? Do you know?

[Sylvie Lapointe]

My understanding is that there are too many redfish and that's what's stunting their growth.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Okay.

Now, is there a correlation between the growth in the population of redfish and perhaps challenges with the shrimp fishery?

[Sylvie Lapointe]

It's clear that the redfish were eating a lot of shrimp and, certainly, changes in the ecosystem, as I understand it, have contributed to the decline in shrimp in the Gulf of St. Lawrence.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

The processing infrastructure is in place. Is that correct? A fish-processing plant can handle redfish as easily as it could handle cod or any other species.

[Sylvie Lapointe]

We have members who focus solely on redfish as their primary business, so they already have the plants set up to be able to process more redfish. One example is Alain d'Entremont's plant in Digby, which is a relatively new plant, state-of-the-art and fully environmentally friendly, and that plant, as an example, is capable of processing fish. We also have members in Cape Breton, at Louisbourg Seafoods, who have the processing capacity, as well as Ocean Choice International in Newfoundland.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

If in fact we're trying to look for a market for smaller fish, is there a danger that if we go into that population and catch too many, those smaller fish won't have a chance to grow to be bigger fish, or will they actually grow to be bigger fish given the presence of food, the changes in the water conditions due to climate change, etc.? Are we stuck with smaller fish into the foreseeable future?

[Sylvie Lapointe]

It certainly sounds like it in unit 1, and we're starting to see a lot of small fish in unit 2 as well. The advice we got this year from science is that we probably have only about eight or 10 years to harvest these redfish, because they will eventually decline back to their normal levels. We're being told the fish are not going to grow any larger.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, Mr. Chair. That's all I have.