Fisheries Committee on May 8th, 2023

[Jennifer Mooney]

Yes, and there are instances in which licence-holders enter into agreements with processors, for example, for the financing. That was done as a way to ensure that licence-holders have access to capital, and that's one of the reasons—for example, when we're looking at those loan agreements—that we're not just looking at what's on paper. We're looking to see that those loans, for example, are in fact being paid down.

[Mark Waddell]

Those provisions were specifically introduced at the request of the federation and members of the Atlantic inshore fishery, in order to ensure they had access to capital and were not limited in that regard.

[Bobby Morrissey, Liberal, Egmont, PE]

Okay. Could you provide the committee with the written policy as it relates to who can hold security on a licence that is issued by DFO to an inshore fisher? I was not aware that a processor has the same right to extend credit and hold the licence as security as do chartered banks, credit unions and other institutions.

My second question in the time I have left, Mr. Chair, is on one of the concerns coming out of the east coast, but it's one that I just want clarified and that I don't believe DFO has any control over. It's the growing concentration at the buyer level, the fish processing level. DFO has no control over the licensing of who is processing seafood on the east coast. Am I correct?

[Mark Waddell]

You are correct.

[Bobby Morrissey, Liberal, Egmont, PE]

That's exclusively a provincial jurisdiction, the monitoring of who is gaining control and who has ownership of all the processing capacity in the east coast....

[Mark Waddell]

That is correct: Fish and seafood processing facilities are licensed by the provinces, and each province has its own legislation in that regard.

[Bobby Morrissey, Liberal, Egmont, PE]

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Morrissey.

That concludes our first hour of committee business today.

I want to thank the witnesses from the department for coming today and for answering such valuable questions and providing such wonderful answers. I'm sure this will make a great part of our study at the end of the day.

We'll suspend for a moment while we switch out for the next panel.

[The Chair, Liberal, Ken McDonald]

I would like to welcome our second panel of witnesses.

Representing the BC Seafood Alliance is Christina Burridge, executive director, by video conference. Representing the Fish, Food and Allied Workers union of Newfoundland and Labrador, we have Mr. Greg Pretty, president, also by video conference. Representing the Coastal First Nations Great Bear Initiative is Paul Kariya, senior policy adviser. Christine Martin is not here, so we have Paul Kariya.

There used to be a hockey player by that name at one time. Wasn't he in the NHL?

[A voice]

Yes.

[The Chair, Liberal, Ken McDonald]

Thank you for taking the time to appear today. You will each have up to five minutes for an opening statement.

We'll start off with Ms. Burridge, please, for five minutes or less.

[Christina Burridge, Executive Director, BC Seafood Alliance]

Good morning from Vancouver, everyone.

I'm here for the BC Seafood Alliance. That's an umbrella organization whose 30 members represent fisheries accounting for about 90% of the value of wild seafood from Canada's Pacific coast. Our members are commercial harvester associations and most major seafood processors.

I want to make four points.

First, foreign investment and corporate concentration are not challenging the success of west coast fisheries. Reduced access is the main impediment.

Second, DFO's beneficial ownership study should tell us if there is an issue with foreign investment in B.C. fisheries. Really, I don't expect that there will be much of one.

Third, most fish harvesters in B.C. are incorporated for the same reason as other businesses are.

Lastly, quota reallocations under the Canadian integrated groundfish program happen daily and are necessary for the efficient, sustainable use of the resource.

To go to those points on access, the northern shelf bioregion MPA network will reduce access for key species by 25% to 45%, despite the fact that 25% of B.C.'s waters are already protected. That percentage should rise to 35% by the end of 2023. It's this that is driving harvesters out of business; it's not licensing policy.

On ownership, we want to see a discouraging of speculation, not of investment. We have proposed ways to do this, such as a licence and quota registry, as well as a shared risks and benefits policy to ensure predetermined percentage returns to quota holders, vessels and crews, so that the lessor is not saddled with the risk.

On foreign investment, two of my processing members have foreign owners. They are solid Canadian operations that have invested in communities such as Ucluelet and Port Edward when no other domestic operator was prepared to do so. Where they own licences, those Canadian companies do so to ensure the plant has access to fish, which provides jobs for Canadians and revenue to local communities.

On corporate concentration, the oft-asserted view that B.C. is a corporate fleet misses the point. Most fishermen are incorporated for the same reasons that other business people are; that is, for liability protection and business planning, and to provide for essential capital investment. Most vessel-based licences are owned by two or more parties that operate as a joint venture. There are dozens of variations on these arrangements, often between a processor and an operator or operators. These arrangements encourage the kind of co-operation that a report for Agriculture Canada says is essential to improving prosperity in Atlantic fisheries.

We benefit from a diverse fleet and a diverse range of processing companies. For instance, before the halibut fleet went to ITQs in 1991, only large corporations had the capacity to process the volume, and they purchased approximately three-quarters of the landed catch. Now that harvesting takes place over nine months rather than six days, processing is dominated by small, specialist processors who deliver a high-quality, high-value product.

Furthermore, the Canadian Fishing Company does not own everything. It owns 30% of roe herring seine licences, 12% of roe herring gillnet licences, 4% of salmon licences, 21% of groundfish trawl quota, 15% of Pacific hake quota, 3% of halibut, 2% of sablefish and no shellfish quota at all.

On quota reallocation in groundfish, the integrated program integrates the management of some 66 different stocks, seven fisheries and three gear types. It accounts for about two-thirds of all B.C. landings. This program requires full accountability for every fish caught, whether retained or discarded. Temporary reallocations cover bycatch and allow for full utilization within science-informed catch limits. These reallocations require DFO approvals and various checks and balances, such as a 1% cap on halibut quota, or species caps and holdings caps for trawl.

I would just leave you with the message that good policy comes from good data. I urge you to base your recommendations on facts, analysis and evidence rather than anecdotal information.

Thank you very much.

[The Chair, Liberal, Ken McDonald]

Thank you, Ms. Burridge.

Just as a reminder to witnesses, if you're giving a statement, don't put your hand over the mike. It makes it a bit muffled, and the translators can't get it fully.

[Christina Burridge]

I apologize.

[The Chair, Liberal, Ken McDonald]

I just wanted to make note of that.

We'll now go to Mr. Kariya for five minutes or less, please.

[Paul Kariya, Senior Policy Advisor, Coastal First Nations Great Bear Initiative]

Thank you, Mr. Chair.

You got the lesser Paul Kariya, though we're proud and thrilled for him as a hockey player and for what he accomplished. I'm only slightly less well known than he is.

Thank you to the committee, and thank you to the other witnesses, including my good friend Christina. I know that we're probably going to disagree on more things than we agree on this time around, but she is a good friend and colleague.

I also want to say that my friend, colleague and boss, Christine Smith-Martin, is ill this morning. She is here in Ottawa, in her hotel room, and has asked me to give these remarks, which are hers, to the committee.

I want to acknowledge the first nations of the Algonquin and the Anishinabe, the local peoples whose traditional territories we're meeting on, and, as was mentioned earlier, the loss of life of fishermen on the east coast but also the loss of life among west coast fishermen. Two Haida fishermen passed away fishing in Skidegate Inlet three days ago. I wanted to mention that.

I'm Paul Kariya. I work as a senior policy adviser for the Great Bear Initiative Society, also known as Coastal First Nations. Our organization has been together for about 20 years and has had great success in working together with federal and provincial governments on key land and marine policy issues.

The Haida Nation, Metlakatla First Nation, Gitxaała Nation, Gitga’at First Nation, Kitasoo/Xai’xais First Nation, Heiltsuk first nation, Nuxalk Nation, and Wuikinuxv Nation, whose territories include over 40% of marine waters and coastline in British Columbia, are the member nations of the Coastal First Nations Great Bear Initiative organization. While of vast geography, the region has a relatively sparse population. Approximately 23,000 people live here, with close to 50% being first nations peoples, yet we currently hold less than 6% of the commercial fishing access in the region.

For all our communities, fishing has been integral to our economies. However, licensing regimes have led to the conglomeration of licences into investor and corporate hands without regard for the coastal people. Most of our Coastal First Nations members and communities have limited economic opportunities other than fisheries. This coastal region does not have the advantage of the diversity of economic opportunities, services or amenities enjoyed in urban settings. Given the remoteness of the communities, fish are fundamental to first nations as a source of economic, cultural and social well-being. As such, meaningful economic development for first nations in this region must include restoring our access to fisheries as a foundation of our local economies.

Coastal First Nations members have a long history of success in the commercial fishing sector. However, the participation of first nations fishers was significantly reduced in recent decades due to fleet rationalization initiatives that disproportionately affected indigenous fish harvesters, as well as the ongoing corporate concentration of licences and the depletion of marine resources. In general, coastal communities have become increasingly disenfranchised from the resources that originally built them.

Our nations, together with the Great Bear Initiative Society, signed the transformative Fisheries Resources Reconciliation Agreement, or FRRA, in July 2021. It commits Canada and our nations to the collaborative governance and management of fish, fish habitat and fisheries, including financial support for increased access to commercial fishing licences and quota for the nations.

One of the key objectives of the FRRA is to create conditions whereby first nations members can participate fully in the fisheries economy that is foundational to their past and future. Significant funds were provided by Canada to the nations through the agreement to support increased commercial fishing opportunities.

However, this access is based on a willing-seller and willing-buyer transaction, whereby we must buy all the licences and quota from the marketplace and compete with every other interested party. It is well documented that for many commercial fishing licences and quota categories, long-standing corporate and investor concentration, combined with growing offshore ownership and investment of B.C. licences and quota, have driven up prices and continue to do so. Many species fished in B.C. have licence and quota values that far exceed any reasonable return on investment for an independent fisher or a small fishing company.

A direct example is from one of our commercial fishing enterprises, which was recently pursuing the purchase of a high-value dive fishing licence in B.C. for a high-value product sold in Asia. A broker had a licence available for sale, and a reasonable offer was made by the CFE, based on fair market valuation at the time. The broker mentioned not to bother making another offer, as they had a blank cheque from an offshore buyer who was already offering 25% more than the current market value—

[The Chair, Liberal, Ken McDonald]

I have to interrupt you there, Mr. Kariya. We've gone over time. I will note that the members will be circulated a copy of your statement.

We'll go to questions from the members now. We'll go to Mr. Arnold for six minutes or....

Wait. I forgot Mr. Pretty, who's with us all the way from Newfoundland by camera. What technology we have today.

Mr. Pretty, you have five minutes or less, please.

You're on mute, Mr. Pretty.

[Greg Pretty, President, Fish, Food and Allied Workers Union]

I hope I didn't lose my time for that.

[The Chair, Liberal, Ken McDonald]

No. That forgives me for not getting to you.

[Greg Pretty]

I'll take an extra minute. Thank you, Mr. Chair.

On behalf of the 13,000 members of our union, thanks for the opportunity to address the honourable members today.

We, the FFAW, represent every single harvester in this province, encompassing about 3,000 owner-operator enterprises and their over 7,000 crew members. Our scope of membership also includes thousands of workers in the fish processing plants, aquaculture, marine transportation, hospitality and other sectors.

In this province, the value of the inshore fishery cannot be underestimated. It is our oldest industry, is closely connected to our culture, and continues to give economic stability and opportunity to coastal communities. Throughout our rich history, hard-working Newfoundlanders and Labradorians have devoted their lives and livelihoods to the ocean around us. This dedication continues to be a backbone of the province, supporting a $1-billion industry each year, which continues to grow and present new opportunities.

Today our collective success depends on keeping the value of this industry in capable hands, not just for Newfoundland and Labrador, but for all of Canada. It's been acknowledged time and again that preserving our foundation, the foundation of an owner-operator fishery, is crucial to the economic sustainability of coastal communities.

However, we have experienced increasing foreign control of the processing and corporation sectors. Major control of our fishery being given to foreign governments not only has negative impacts on fishing licences and quotas; it also creates significant barriers to new entrants, thereby suppressing succession planning for the industry.

Increasing corporate control has very negative repercussions. It has depressed wharf competition, stifled the ability for harvesters to seek new buyers and forced labour relations into a binding arbitration system tilted severely in favour of the processors. For years our members have had to fight and act against companies that attempt to dictate the terms of the inshore fishery and actually coordinate efforts not to buy landings. Can you believe that in 2023 we're still fighting that battle?

I've heard references to Royal Greenland. I won't go into great detail—hopefully I'll just get through what I have to say—but the interests of harvesters and plant workers in Greenland compete with the interests of harvesters and plant workers in Newfoundland. That doesn't make any sense, but it happens. Who do you think gets the smallest share? Royal Greenland will purchase seafood from wherever has the greatest benefit for Greenland.

In 2020, it showed no interest in buying Newfoundland and Labrador shrimp, thumbed its nose at collective bargaining and then locked out harvesters for most of the shrimp season. They deliberately avoid competition by agreeing to serve only certain territories or customers and knowingly restricting production and supply. That's considered cartel-like behaviour, as some people have referenced already today. It's cartel-like behaviour by the Competition Bureau's own definition.

Royal Greenland secures conditions to control all aspects of the fishery, including ensuring subsidiaries have privileged access to quotas or landings, despite such practices not being permitted in the inshore fishery. To circumvent Canadian federal regulations, Royal Greenland has created its own form of vertical integration through the acquisition of contracts that place it illegally in control of harvester licences. I think that's the key in my messaging today. Corporate concentration has inflated the cost of licences, and in many cases an inshore harvester does not have access to that level of capital. That was already discussed earlier today.

A processor needs to secure a supply of raw material, so that processor pays for a licence in the name of the inshore harvester, thereby owning the licence and hiding behind the name of that harvester. The processor then controls when the licence is fished, who fishes it, which boat is used and how much the harvester is paid.

I want to jump on to the next aspect, because the federal government has made progress to strengthen owner-operator and fleet separation policies. That's been done. Enshrining the owner-operator policy into law in 2021 was celebrated right across this industry, as it set out to protect the value of the fishery by ensuring that it remains in local communities.

However, as a regulatory body, DFO has proven to be unequipped to enforce this policy. DFO has yet to move forward with any penalty in the over 30 files it has investigated since the policy became enshrined in 2021. Instead, the reaction has been to gently guide corporations back to compliance. That's not working.

If you're watching what's going on in Newfoundland and Labrador today, we've had three fisheries come to a complete halt because of the markets, but also because of corporate concentration, which is out of control.

Much to the significant disappointment of independent harvesters across Canada, the owner-operator policy has proved to be nothing more than a workshopping exercise for DFO, without any deterrents or consequences for violations. A message from the department expressing a commitment to protect the owner-operator fisheries is now critical to restore confidence in this legislation.

As Canadians and as Newfoundlanders and Labradorians, we ask this: Will the future of our fishery be vibrant and sustainable—composed of thousands of small businesses in the water that continue to contribute to the rich fabric of culture and our country's economy—or will it be controlled by a small handful of companies, processed offshore or internationally, removing the wealth of our sustainable resources from the adjacent communities that depend on them, in order to serve another country's bottom line?

It is incumbent upon every member here, and all Canadians who value our oceans, to protect this public resource and ensure it is the people of Canada who enjoy the economic and societal benefits that come from our waters.

I appreciate the attention given to the gravity of this situation by the committee members, and I look forward to answering any questions to the best of my ability.

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Pretty.

We'll now go to the rounds of questioning I tried to go to by accident, before you spoke.

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

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

Thank you, Mr. Chair.

Again, let's recognize the harvesters and fishermen who were lost on both coasts over recent days. It's a tragic...and sometimes very dangerous profession. I want to recognize the efforts they put in, and the first responders and search and rescue people who put efforts in, as well.

I'll start off with a couple of quick questions for Ms. Burridge, if I could.

Ms. Burridge, in your opening remarks you said that, under corporate concentration, “Most vessel-based licences are owned by two or more parties that operate as a joint venture. There are dozens of variations on these agreements, often between a processor and an operator or operators. These arrangements encourage the kind of co-operation that a report for Agriculture Canada says is essential to improving prosperity in Atlantic fisheries.”

Would you be able to forward that report to the committee? I don't believe I've seen it, and I'm not sure whether other FOPO members have.

[Christina Burridge]

Yes, I can certainly do that, Mr. Arnold.

[The Chair, Liberal, Ken McDonald]

Ms. Burridge, could I ask you to lower the boom on your mike, please? It's up way too high.

There you go. We'll hear you that much better.

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

Thank you.

Also, in your opening statement, you talked about ownership and discouraging speculation over investment. Briefly, could you provide what a beneficial ownership policy would look like, if that's not what we have now?