Fisheries Committee on May 8th, 2023

[Mark Waddell]

As an attempt to get to the beneficial ownership of the licence, the requests and the surveys were directed to the licence owner.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Do we see any issues with that? Could you please share with us, through the chair, any issues with our only asking the licence-holders for this information? Does that affect our capacity to understand what's really happening?

[Mark Waddell]

Once again, the challenge for us in determining beneficial ownership is going to the licensed owner, per se. With regard to licence leasing as a practice in Pacific fisheries, we understand that is a prevalent use and those are methods by which harvesters avail themselves of access and quota.

However, when we were developing the survey and consulting with stakeholders collectively, stakeholders felt that this aspect of the survey design was going to prove too challenging and could be better addressed subsequently. The keen interest from all parties was in deriving a better baseline understanding of foreign ownership, and that meant targeting beneficial ownership structures within Canada's fisheries.

I'm not sure if my colleague from the Pacific region, Neil Davis, has anything to supplement—

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

I think I'm going to move on to the next question. Thank you so much, though, Mr. Waddell.

Perhaps you could clarify your point around how it can be “addressed subsequently”. What would that look like?

[Mark Waddell]

That would be in discussion and dialogue with harvesters and through consultation with them.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Okay.

Mr. Waddell, you also said in a previous question that less than 2%—correct me if I'm wrong—of the licensing is held by corporate entities. Is that accurate?

[Mark Waddell]

The figure was that less than 2% is held by foreign entities.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

They're foreign. That is what I meant to write down. Thank you.

Can you clarify how we have that information around that number?

[Mark Waddell]

We have that information through the information that's been provided to the department from licence-holders, through the beneficial ownership survey and in conjunction with the analysis undertaken by the forensic accounting management group over at Public Services and Procurement. They are the forensic auditors for the Government of Canada who have conducted the analysis on our behalf, and they have done that in two tranches of work.

Unfortunately, due to the timing of this meeting, I have only high-level results for Atlantic Canada. I do not yet have them for the Pacific.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Thank you.

Again, Mr. Waddell, can you clarify recommendation 4 in the 2019 report, which came out through FOPO? It is a recommendation “to increase the transparency of quota licence ownership and transactions...in an easily accessible and readable format, a public online database that includes....” It goes on to talk about the importance of having adequate public information around the ownership.

I wonder if you can clarify whether this has been done, and how information like this would help us understand foreign ownership of our licenses.

[Mark Waddell]

On this one, I would turn to my regional colleague, who has invested time in this effort.

[Neil Davis, Regional Director, Fisheries Management Branch, Pacific Region, Department of Fisheries and Oceans]

Thank you. I'm happy to offer a bit of information on that.

We have done some work to respond to that particular recommendation. Specifically, in the last year, we contracted somebody with the technical expertise to do an assessment of the information we currently hold and the systems that information will live in, to identify what the requirements would be to set up a public registry that would have licensing and quota transactions available and accessible in an easy way. They will also assess the feasibility, given the requirements of setting up that kind of registry.

That work was completed last year, and we're now shifting to creating the necessary work and contracting to construct a database that would allow us to generate a public registry in which those kinds of licensing and quota transactions could be accessed by the public.

[The Chair, Liberal, Ken McDonald]

Thank you, Ms. Barron.

We'll now go to Mr. Perkins for five minutes or less.

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

Thank you, Mr. Chair, and thank you, witnesses.

Mr. Waddell, as the DG.... DFO has a policy that no licence-holder can have a majority or monopoly on a fishery. Is that correct?

[Mark Waddell]

From a corporate concentration policy...? Is that the thrust of your argument?

Corporate concentration is addressed on a fishery-by-fishery basis, often through the integrated fisheries management plan, within which there will be details on how much any given licence-holder can hold in terms of quota. Specific to the inshore fisheries, though, the requirements are that no inshore fisher can hold more than one licence per species.

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

With regard to the offshore, lobster fishing area 41, which is about three times the size of Nova Scotia, has eight licences, as I understand it. Many years ago, all the licences were allowed to be acquired by Clearwater—long before its recent ownership change—against government policy. My understanding is that government policy was rewritten. The former manager had to rewrite the policy because of all that.

Why does DFO allow Clearwater to have a 100% monopoly in lobster fishing area 41?

[Mark Waddell]

I'm not able to speculate on past decision-making with regard to that.

Specific to that fishery—my colleague might be able to supplement, as well—my understanding is that the product in question is not itself a monopoly. There are plenty of lobster fished throughout Atlantic Canada and Quebec. Ergo, this is not necessarily a true monopoly.

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

It's a true monopoly because they're the only one allowed in that one area, which is three times the size of Nova Scotia. No other licence-holder is allowed in there, so that is a monopoly.

You mentioned the percentage of companies that participated in the beneficial ownership survey that were either Canadian owned or Canadian headquartered. What's the number you got in British Columbia from that survey? Do you have an equivalent number?

[Mark Waddell]

Unfortunately, at this point in time I do not have results for the Pacific.

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

When you say Canadian owned.... They're a Canadian corporation, but it doesn't mean they're Canadian owned. A Canadian corporation doesn't necessarily.... That's the beneficial ownership issue.

[Mark Waddell]

Exactly. We worked through the beneficial ownership survey and the information licence-holders had to provide to the department. Then, in conjunction with the forensic accountants at PSPC, we reviewed that information through the full extent of the corporate chain and determined that 98% of Atlantic licences are held by Canadian entities.

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

Thank you.

I'll pass the rest of my time to Mr. Arnold.

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

Thank you to the witnesses for this.

Mr. Waddell, in the legislation and regulations developed and implemented on the east coast, are there any gaps in assessing, monitoring and enforcing to make sure the intent of the legislation and regulation to identify beneficial ownership is actually honoured. Are there any gaps?

[Mark Waddell]

I would turn that one over to my operational colleague.

[Jennifer Mooney]

I'm sorry. Could you clarify the question, please? I apologize.