Fisheries Committee on May 15th, 2023

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

How could the committee intervene? What are the most important recommendations that the committee could make to the Department of Fisheries and Oceans to try to reverse the trend?

[Claudio Bernatchez]

As in any area of activity, when you put regulations in place, you have to make sure you can enforce them. There's no point in creating a series of measures if there's no one on the ground to enforce the regulations.

Before new laws or regulations are passed, care must be taken to ensure that existing regulations are enforced.

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

Is the Gaspé fishing community concerned?

[Claudio Bernatchez]

There is a lot of concern. All the moratoriums announced over the past three years have left the majority of fleet owners wondering what will happen to them.

We know that the harvesting industry is cyclical, but there is cause for concern. At least five moratoriums have been announced recently. Above all, we need to start thinking, together with Fisheries and Oceans Canada scientists, about adopting an ecosystem approach. We can no longer manage one resource at a time. We have to consider all the impacts that all resources have on other fisheries resources.

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

Thank you very much, Mr. Bernatchez.

[The Chair, Liberal, Ken McDonald]

Thank you, Madame Desbiens.

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

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

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

My first question is for Mr. Sproul.

Mr. Sproul, UFAWU-Unifor put out a petition asking for the end of foreign ownership in quotas. I'm wondering whether you can provide some of your general thoughts on this petition, please.

[Colin Sproul]

Thank you for the question.

Royal Greenland is a corporation wholly owned by the government of Denmark. They have made acquisitions in Nova Scotia of A&L Seafoods and of Quin-Sea in Newfoundland. It's one of Newfoundland's largest processors.

None of these actions are in keeping with federal law. Royal Greenland is taking from the people of Newfoundland and Nova Scotia and creating profit for a foreign government. It seems beyond reason that regulators wouldn't have taken issue with it by this point.

We see the same thing with domestic companies as well. In Nova Scotia, we've seen Champlain—which is an equity firm designed to generate profits for shareholders—acquire Lobsters ‘R’ Us Seafood, Premium Seafoods, Captain Dan’s Seafood, Chéticamp Fisheries, Riverside Lobster International, Downeast Cape Bald Packers and Petit De Grat Packers. There are even more subsidiaries, including Cape Bald, as well as Boston Lobster Company and Boston Wholesale Lobster in the United States.

Most ominously, we see Champlain and others operating along the same lines. They're starting to move into the acquisition of bait dealers and bait freezers and packers in Atlantic Canada. It's very ominous for us.

Some of these acquisitions are a bit of a paper tiger, in the sense that fishermen in Nova Scotia still have free will to sell their catch to whomever they choose. Some of these lobster buyers that are being acquired are being acquired because of their access to product, but at any time, fishermen could leave those buyers and move to another one, so we've seen their intent move into trying to control the bait supply to ensnare fishermen in the future. It's very concerning to the industry.

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

Thank you, Mr. Sproul. Thank you for that answer.

My next question is for Mr. Bonnell.

What are your thoughts? If there were to be a move to end foreign ownership and quotas, what would be the impacts on Ocean Choice International? What would be the impacts that you would foresee on local communities?

[Carey Bonnell]

From our standpoint, we operate as a 100% Canadian-owned and operated business.

I'll note that last week Mark Waddell appeared before the committee on the beneficial ownership survey and verified that in Atlantic Canada, at least 98% of all licences were in compliance in terms of domestic ownership.

From our standpoint, if there are foreign companies investing in the region, as long as the rules are being followed and aren't being broken, there's really nothing more for us to add on that front. We operate our business. We focus on running our own business as a company and we'll continue to do so.

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

Thank you, Mr. Bonnell.

Has there been any discussion around what steps Ocean Choice International would be taking if an end to foreign ownership and quotas were put into place?

[Carey Bonnell]

That's not something we've discussed. Again, from our standpoint on the quotas side, there's full compliance in Atlantic Canada. Again, a forensic audit conducted by the Government of Canada over the past several months verified that 98% of all licences are in compliance in terms of Canadian ownership.

From our standpoint, it's a non-issue. If it were to become an issue at some point down the road, obviously that's something we would consider commenting on. As it stands today, we just don't see it as an issue. That was verified by the Government of Canada last week.

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

Thank you for your answer.

My next question is again for Mr. Bonnell.

The public registry—which is, of course, a recommendation that came out in the 2019 study on west coast beneficial ownership—talks about information. What are your thoughts on this public registry and any implications that it might have on fisheries on the east coast?

[Carey Bonnell]

I'm not fully up to speed on the west coast occurrence.

On the east coast, what I'll say, as I indicated in my opening comments, is that we are fully compliant with owner-operator and fleet separation policies and the preservation of the inshore fleet in Atlantic Canada.

Jennifer Mooney made an appearance—I believe it was last week—and said they've pretty well audited about a quarter of all inshore licences in Atlantic Canada. They saw a high level of compliance with those policies. I'll take that from the Government of Canada as a real positive that the changes that have occurred are being followed and respected overall.

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

Thank you.

I believe this is my last question, Mr. Bonnell, because I'll run out of time.

I would like to get your overall thoughts around the differences. I know that you're very much immersed on the east coast, but are there any thoughts you can provide to us as a committee around the differences in what's happening on the east coast versus the west coast, or some of the benefits or disadvantages?

[Carey Bonnell]

The only thing I can add on that topic.... I'm not immersed on the west coast, but I am on the Fisheries Council of Canada and I deal with a lot of colleagues on the west coast, a lot of family-run businesses, a lot of companies that have priorities similar to ours and similar objectives of providing meaningful value and creating meaningful employment for their members and their companies, as well as providing fair market value for harvesters. It's my understanding and my evidence that we all have a common goal here: to grow the Canadian seafood industry.

Ian is on this session. Ian and I have spent a lot of time over the years talking about this, about how we need more co-operation, more alignment to create more value in the global marketplace, and I think that's where our resources and energy should best be focused.

[The Chair, Liberal, Ken McDonald]

Thank you, Ms. Barron.

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

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

Thank you, Mr. Chair. I'll be sharing a little bit of my time with Mr. Perkins.

I'll start out with Mr. Bonnell.

Mr. Bonnell, how high on the priority list does a constant supply of products factor into your company's operations in order to meet your market, your sales?

[Carey Bonnell]

I would say it's critical on both the inshore and offshore portion of our business.

Stable quota shares are critical to us in our offshore business. We employ several hundred people in our offshore boats. Some of that product is a land-based process in processing facilities and the service supports that are provided for that.

On the harvesting side, we source raw material from about 1,900 independent fish harvesters in Newfoundland and Labrador, and that raw material is absolutely critical for the five land-based processing operations we have in the province, which employ about 1,000 people. It's something that's critically important to our business. A stable quota share in our offshore business and a stable quota supply for our land-based operations are very important to us.

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

I take it that a company like yours would do everything they could to make sure they had a reliable source of product.

[Carey Bonnell]

We do what we can within the rules that are provided. It's important to have relationships to ensure we have raw material for those operations, but I would also say, Mr. Arnold, that it's critically important as part of that relationship to provide the best market value we can for harvesters in terms of shore price. We have a global marketing sales and distribution network that puts a lot of time and energy annually into trying to maximize market opportunities for that product so that everybody wins, both the harvesting sector and the processing sector.

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

Thank you.

I'll switch to Mr. Sproul and Mr. MacPherson.

What we've been talking about is a lot of the foreign ownership of licences and quotas and the foreign control or centralized control of those licences and quotas. Are there other factors that would determine where a harvester may take their product, such as the supply chain for their operations—ice, fuel and gear and so on? Would control over the licences and quotas be the only piece that would need to be looked at, or are there other pieces as well?

[Colin Sproul]

Most fish harvesters in Atlantic Canada have long-standing relationships with the people who buy their seafood from them. Frequently they're provided with other services at the dock as an incentive to continue to sell. The concerns that are being raised by the industry are about consolidation of bait supply and the potential for price control from corporate consolidation as the bigger packers become aggregated, but there are also these larger corporations moving down the chain. They are on-the-dock buyers who are purchasing without even the knowledge of the fishermen who are selling to them at that point.

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

Mr. MacPherson, do you have anything to add before I have to switch to Mr. Perkins?

[Ian MacPherson]

I wanted to add, as Colin mentioned, that there are companies that are getting a pretty substantial foothold in the marketplace and controlling all those costs he mentioned. We share that concern for sure.