Fisheries Committee on May 29th, 2023

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

Thank you, Mr. Chair.

Welcome, Mr. Williams. We're happy to see you here.

I'm wondering if you can clarify some of your thoughts. You were talking about the B.C. halibut example. You were talking about approximately 85% of quota being owned by non-fish harvesters and about the price to be able to pay that back. I have heard the thought from some that this is a public resource that's already overinflated and that huge profits have already been made.

Do you think there are other alternatives that could be looked at that don't just include “this is the exact amount that needs to be paid back”, considering those factors?

[Richard Williams]

I don't think there could be any approach that didn't involve fair compensation. I mean, people who have built up their fishing enterprises have invested a great deal and are probably carrying a lot of debt, in British Columbia particularly. I can't imagine a transition process that wouldn't follow a kind of PIIFCAF model, where you allow investors to get a return and be kept whole through the process. If you're thinking of some idea of expropriation or.... No, I can't imagine another model that would be acceptable at the industry level or at the community level.

I'll stop there.

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

Thank you for your thoughts on that. It is something that comes up quite frequently, so I was curious to know what you thought.

So, you do feel that it is quite affordable to have a repayment plan that does take into account the full amount, despite those profits.

[Richard Williams]

Yes. I'll just emphasize that when I raise the idea of a $600-million or a $700-million investment to take public control of the halibut quota, that's not an expenditure. That's setting up an asset that will then generate revenues to pay back the cost of the initial investment. I think it's a transition strategy for how to move it either into permanent community ownership of licences and quota or a government-operated approach, like an arm's-length corporation or a Crown corporation that could provide access to the fishery for people at the community level and so on.

It's not just an expenditure. It's an investment at the front end that gets paid back over time.

I did a similar analysis on the Atlantic lobster fishery. There, you'd be looking at $7 billion to take ownership of the current licences at current average prices. It's a different scale of enterprise altogether.

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

Thank you.

I have a copy of your slides here. I notice that on the last slide you go into details about the unintended consequences of a broken licence policy delivering poor socio-economic outcomes. Can you expand on that a little bit? I do think this is a key piece of this discussion.

[Richard Williams]

Yes. With the new Fisheries Act, the minister now has responsibility for socio-economic outcomes, or at least a power to consider those.

When you look at the west coast fishery, I describe it as a broken model from a socio-economic benefits perspective. We have continuing employment decline, and weak and insecure incomes in the industry. We have poor career prospects and a serious problem with intergenerational succession and labour supply in the future. We have coastal communities and first nations that are losing population and economic viability.

I describe the fishery as a growth sector everywhere, globally. The fact that it's failing in British Columbia is a policy problem, not a problem inherent in the fishery or the fisheries economy. I think we should see the same kind of contribution to developing middle-class incomes in fishing communities that we are now seeing in the Atlantic region in a proper policy model.

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

Thank you.

What are your thoughts on the current steps, or lack of steps, that have been taken since the 2019 report came out?

[Richard Williams]

I'm going to speak very bluntly. It's my opinion.

I've worked very closely with DFO in the Atlantic region. There are all kinds of issues. There are ups and downs. There are times when people get along. Overall, DFO regional offices in the Atlantic region support the policy model they're working under and they work constructively and respectfully with fish harvester organizations.

I do not see that happening in British Columbia. I see the Pacific region DFO as aligned with the investor interests. I see them as having not acted on the directions of this committee and its 2019 report. We've seen some delay and token efforts to consider some of the questions that were raised in your very powerful report. I think a major barrier to moving forward on this issue is that you don't have a working regional office that supports the policy direction of your government.

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

What are your thoughts on the survey that's gone out as a point to increase transparency?

[Richard Williams]

I agree with the observation that the question doesn't generate the answer that people were trying to get as to who actually controls licences and quota in British Columbia.

As I mentioned, we just completed some pretty intensive research at the enterprise level into how licences and quotas are owned and controlled. It's chaos in British Columbia. It's an unregulated system in which every possible kind of arrangement is made by people trying to stay in the industry and trying to find a way to keep fishing, despite lower incomes. All kinds of external influences and investors are able to get involved and have deleterious impacts and so on.

Compared to the Atlantic region, where every harvester with a core licence knows they have a career, in British Columbia every guy with a boat and maybe a little bit of a licence doesn't know whether they have a job this year.

[The Chair, Liberal, Ken McDonald]

Thank you, Ms. Barron.

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

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

Thank you, Mr. Chair.

I'm glad we have the other witnesses here. I would like to turn to Melissa Collier.

During this study, we have heard that in Atlantic Canada the harvesters often don't get a choice of where they can land their product, so they are bound to a certain processor. Do you know of any cases on the west coast where independent harvesters have had difficulty either obtaining services or offloading their catch as a result of the concentration of service providers or processing?

[Melissa Collier]

No, I'm not personally aware of fishers having a hard time landing their catch, but that's just me personally.

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

Okay, thank you.

Mr. Williams, will any form of management, control or restriction of licences and ownership of quota be effective if there's no control over the ownership of the processing and market access and no transparency in that?

[Richard Williams]

I'm sorry. I didn't—

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

If we were able to put measures in place to control the ownership of licences and quota, would that be effective if there was no management or no transparency around the concentration of processing and market access?

[Richard Williams]

I would have to say yes, because in the Atlantic region we are seeing dramatic concentration in the processing sector. That, in and of itself, in my view, hasn't resulted in greater concentration or change in ownership structure in the harvesting sector, because of, again, an effective fleet separation policy.

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

Do you believe that fleet separation is retaining freedom, if you want to call it that, within the independent harvesters? That's different from what we have heard anecdotally here.

[Richard Williams]

Yes, I think there are situations where bigger companies are more aggressive in trying to find ways to influence or control how licences are used to fish, or where fish is sold and to whom, etc. There are those relationships, but I don't think corporate concentration at the processing level at this point in the Maritimes—I think Newfoundland is somewhat different—is a major factor in changing what happens at the harvester enterprise level.

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

Mr. German, you mentioned in your report from 2019 that there would be a vetting of individuals and the source of funds. Can you explain how that might work? Is that even possible? How elaborate would the system have to be in order to vet who the beneficial owner or buyer is?

[Dr. Peter German]

It doesn't have to be overly complex. Due diligence is performed by companies everywhere all the time in terms of whom they deal with. There are firms that do due diligence in determining who owns a company and what their source of wealth is.

It doesn't have to be a complicated process, but I do see it as an essential process, particularly when we're talking about the investor group that Mr. Williams has referred to.

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

Thank you.

I will go back to Mr. Williams.

You referred just a moment ago to differences in Newfoundland around concentration. Can you explain a little bit what you were referring to there?

[Richard Williams]

It seems anecdotal, and some of the witnesses you have heard here have said that some companies there are much more aggressive in terms of penetrating control over licences and quota, particularly in the snow crab fishery and so on. Largely it seems that's happening.

Again, I'm saying it's anecdotal; I haven't researched this. It seems to be happening through the kind of financing arrangements in which harvesters are able to maintain their operations and so on, but I can't speak with real confidence on that.

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

I have just one comment, and I think Mr. Steinley would agree with this one. If this type of foreign ownership concern was happening within our agriculture sector, I think we would have possibly a lot bigger alarm bells going off, and it's concerning that it's happening here.

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Arnold.

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