Good afternoon. Thank you, committee, for the invitation to appear before you today.
As many of you know, the Fisheries Council of Canada is the national association representing wild-capture processors across the country and all of our members' harvest as well.
FCC members are all privately owned. Most are family-owned and family-operated, some for multiple generations. Some are indigenous community-owned and operated, and many of these have specific mandates to invest back into their communities. A few members are processor companies or co-ops owned by a group of independent inshore harvesters.
All of our companies care about their employees, their partners and their communities. They are responsible stewards of our resources, and collectively we promote a healthy resource and a prosperous industry.
I should note that even our largest companies are relatively small compared to global competitors.
On the whole, I would say that we should be celebrating the successes of our entrepreneurs, who have worked hard to build their businesses and have been able to grow from owning one fish plant to two and then to three or more.
The same goes for those who have been successful enough to expand beyond one vessel. Being successful and contributing back to one's community should be celebrated and not seen as a negative outcome.
As a small open economy, Canada has always struggled with industrial policy to support growth of Canadian companies and entrepreneurs. This is very difficult, and market forces are much more dynamic than the speed at which government policy tends to move.
I should note that in fisheries the supply chain is much more integrated than what appears from government policy on paper. In many ways, the success of processors depends on the success of harvesters and vice versa.
Mr. Chair, as the committee knows, DFO is conducting a beneficial ownership survey, and earlier this week DFO reported preliminary results for Atlantic Canada: Some 98% of licences are domestically owned. I suspect the eventual result in B.C. won't be vastly different. I look forward to the full results to add more evidence to this discussion.
I would like to make some comments about foreign investment, in part to differentiate it from foreign ownership.
The seafood sector, as many of you know, is a tough business. For those outside the industry, it's difficult to understand the sector, and this also goes for financial institutions. As such, our sector can be underappreciated by lending institutions, which can lead companies to solicit funds outside of our chartered banks, possibly at higher rates.
Foreign financial institutions that understand the sector can be an attractive option for companies making large investments. An example would be Icelandic banks interested in lending to Canadian companies. I don't see this necessarily as a negative thing.
We certainly aren't the only sector in Canada that has to look outside our borders for financial capital, and we need to continue to invest, to compete and to meet customer expectations.
The other element of this study is corporate concentration. The Competition Bureau uses the four-firm concentration ratio: If the top four firms have less than 65% of the relevant market, the bureau is generally not concerned. Even beyond this threshold, other factors are considered before making a judgment on market power.
Besides the threshold number, the other key to this ratio is the definition of “relevant market”. Seafood is the most globally traded food commodity. I would argue that the relevant market is not a town, a country, a province, a region, or even Canada as a whole. It would be tough to argue perhaps that even North America is a relevant market for most Canadian fisheries. We export to upwards of 130 countries annually. Our imports for the domestic market come from as many as 150 countries.
With all due respect, and not to diminish the importance of this study, I have to admit that I am preoccupied by other challenges. I'm focusing on how DFO addresses gaps in fishery science and its implications on fisheries management decisions and broader policy work. I'm focusing on ensuring our sector is meaningfully consulted on marine conservation. I'm focusing on how to ensure indigenous reconciliation is based on voluntary relinquishment of commercial licences. These are the key issues affecting the prosperity and the future of our sector and my members.
I thank you for your attention and I look forward to your questions.