Fisheries Committee on May 8th, 2023

[Mark Waddell]

I can take an attempt, although I am bordering on speculation here.

I would hazard that Royal Greenland is one entity of many across the country, and the Province of Newfoundland has its own responsibilities and authorities with regard to processing capacity and the legislative requirements for foreign investment in that domain. To my understanding, there are no legislated requirements in any province with regard to foreign ownership in the fish processing sector.

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

My next questions focus more on the local side.

In my area, we have crabbing and lobstering, both of which are very lucrative. However, in recent years, we have seen crab licences slip out of the region. By region, I mean the administrative area of the Acadian Peninsula, rather than the fishing area, Area 12. Licences are being sold at huge prices, in the order of $12, $15 or $20 million. New Brunswick is losing these fishing licences to other provinces or regions such as Quebec, Nova Scotia, Prince Edward Island or the Magdalen Islands. What makes this easier is that the residency requirement in New Brunswick is set at only six months, compared to Quebec's requirement, for example, of two years.

Could one of you explain to me what process would need to be followed to get the residency requirement in New Brunswick changed so that it is similar to other provinces, for example, Quebec or Prince Edward Island, and so that New Brunswick stops losing these licences?

[Mark Waddell]

Again, Monsieur Cormier, I'm happy to take an attempt at this one, recognizing that I'm not a local expert or versed in the specific issue.

The residency requirements with regard to the inshore regulations run into certain challenges with regard to the Charter of Rights and the freedom of mobility. As such, we have certain limitations within the department regarding how religiously or forcefully we can enforce that capacity, that residency requirement. There are means by which we can make changes, and I guess we could entertain changes in specific regions or administrative areas of the department. We could pursue that in greater detail with you, along with additional details.

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

I would really like to know how...

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Cormier. There are only eight seconds left, so there's not time to get in a question or an answer.

I see Madame Desbiens has joined us online. I don't know if she'll be asking the questions or if her temporary substitute, Madame Bérubé, will be asking questions.

Madame Desbiens, I'll leave it up to you.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Good morning, Mr. Chair. I hope you can hear me well. I was not able to do a sound check in a timely manner. For that reason, I will turn my time over to Ms. Bérubé. I will tell you after the meeting what happened.

[The Chair, Liberal, Ken McDonald]

When you're ready, you have six minutes or less.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Thank you, Mr. Chair.

I am very honoured to fill in for my colleague.

Between April 2021 and March 2022, Fisheries and Oceans Canada sent 1,174 questionnaires to fishermen about compliance with inshore fishery regulations and invited them to provide supporting documentation.

How are questionnaire recipients selected? What is the response rate?

[Mark Waddell]

I might require further clarification as to the exact survey you're identifying, but we did send out a beneficial ownership survey, which was directed to Atlantic offshore, midshore and exempted fleet licence-holders, as well as Pacific licence-holders. We had scoped out inshore licence-holders in Atlantic Canada, as well as commercial communal licence-holder entities—aboriginal entities.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

This is what it's all about, indeed.

[Mark Waddell]

Basically, those individuals were identified then by determining who held those licences within our databases. We contacted those licence-holders to ensure they were providing information to supplement their ownership information to DFO.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

It is well known, Mr. Waddell, that additional information was requested from 342 respondents, which is 29% of the total number, and no arrangement revisions were required.

Between April and September 2022, you sent out 550 surveys.

How do you account for the higher percentage of requests for additional information or arrangement revisions during the April to September 2022 period, compared to the April 2021 to March 2022 period?

[Mark Waddell]

I think we are mixing our discussions in terms of the beneficial ownership survey and the work my colleagues have been doing on inshore regulations.

[Jennifer Mooney]

Exactly. Under the inshore regulations, we publish on our website the number of questionnaires, as you have referred to, that have been sent out to licence-holders to determine whether they are.... It's an examination to ensure they are eligible to hold an inshore licence.

These questionnaires are sent out at every issuance. When there is a request for a transfer from one licence-holder to another, we are looking at the eligibility of both licence-holders under the inshore regulations and making a determination. The statistics you see on that website are the representation of the questionnaires that have been sent out.

Depending on the responses received from the department to those questionnaires, we ask for additional information or clarification. In some cases, licence-holders, as you have mentioned, make modifications to loan agreements or supply agreements in order to be eligible. The inshore regulations were designed in such a way to bring licence-holders into compliance with the regulations.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

What are the reasons why 37 arrangement revisions were needed after the revisions made between April and September 2022?

[Jennifer Mooney]

The revisions to the agreements were done for a variety of reasons. For those 37, some were related to needing to adjust loan agreements, for example by having exit clauses. That goes back to the point that we do not want licence-holders to be beholden over a long period of time under those loan agreements. That's one example.

Another example could be if we're looking for lease agreements to be modified or changed. The whole intent here is to ensure that licence-holders.... Yes, there are ways for them to access financing, but it's being done in such a way that they are in control of their business and they have a way to pay down those loan agreements over a reasonable amount of time.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Since October 2022, how many surveys have been sent out and how many requests for additional information or revisions have been made?

[Jennifer Mooney]

In 2022-23, we sent out 507 questionnaires. In 238 cases, DFO staff asked for additional information, and in 55 of those cases, one or more existing agreements were changed or modified to bring licence-holders into compliance with the regulations.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

In what ways did fishermen's compliance and Fisheries and Oceans Canada's ability to enforce the rules differ between the requirements of the Policy for Preserving the Independence of the Inshore Fleet in Canada's Atlantic Fisheries and the regulatory changes to the inshore fishery regulations resulting from amendments to the Fisheries Act?

[Jennifer Mooney]

In terms of the reasons for licence-holders to need to make modifications.... Those 55, for example...I don't have the full breakdown of the reasons. We could provide that if there's an interest. I would suspect it would be similar to what we saw the previous year, which was that loan agreements needed to be adjusted or changed, for example, or to have exit clauses in agreements, or to ensure that there was a reasonable amount of time for those loans to be paid down.

We are paying attention to ensuring that those loan agreements are in fact being paid down. That's a big message I would leave you with as well. We don't just receive this information from the licence-holders. We are looking to see that those loan agreements are being paid down and that they are being implemented over time.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Did the...

[The Chair, Liberal, Ken McDonald]

Thank you. You have gone a bit over your six minutes.

We'll now go to Ms. Barron for six minutes or less.

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

Thank you, Mr. Chair, and thank you to the witnesses for being here today.

First, I'd like to give my condolences to the loved ones of the harvesters lost in New Brunswick. It was tragic news to hear.

I'm going to move on to my questions, as there is not a lot of time. My first question is for Mr. Waddell.

Can you clarify? I'm building on the questions Madame Bérubé started with, around the beneficial ownership survey. In an ideal world, can you share with us who should be included in completing that survey in order for us to receive a comprehensive data set and information, and to be able to move forward around the beneficial ownership on the west coast?

[Mark Waddell]

Absolutely. The survey was mandatory for all commercial licence-holders, with—as I indicated previously—the exemption of inshore licence-holders in Atlantic Canada and communal commercial licence-holders. Both of these, as entities, have their corporate structures regulated pursuant to either the inshore regulations or the aboriginal communal fishing licences regulations.

For Pacific licence-holders, it would have been all party-based and all vessel-based licence-holders in Pacific waters.

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

What about those who are working on the boats, or those who are not licence-holders? Are we able to hear from them at all through this survey?