Fisheries Committee on May 29th, 2023

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Mr. Chair, I have a question for Mr. Bourgault-Faucher again.

That loan board doesn't help finance buying licences and quotas. Is that correct?

[Gabriel Bourgault-Faucher]

To my knowledge, no.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Okay.

Do you think it would help fishers maintain their independence if we had, say, a federal fisheries loan board that would be able to finance such licence transfers?

[Gabriel Bourgault-Faucher]

I don't know if a board to help purchase licences is necessarily what's needed. For instance, different regulations or mechanisms can be considered to oversee transactions or to keep the price of these licences artificially lower than their market value. Perhaps a board or direct financial support in the form of loans to fishers is also conceivable.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Thank you.

I have some questions here for Ms. Collier.

In the 2019 report “West Coast Fisheries: Sharing Risks and Benefits”, there was a recommendation to have a fisheries loan board created. To your knowledge, has there been any movement towards that?

[Melissa Collier]

To my knowledge, no.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

If you had such a loan board, would it help fishermen maintain the independence that you so seek?

[Melissa Collier]

I think there's definitely a potential for it.

Currently, there are really only three ways to access a loan to purchase licences. You finance through your family, or you finance through the very limited number of banks that will actually finance a fishing operation, or you finance through a processing facility, in which case you are linked to that processing facility/fish buyer.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

In your opinion, Ms. Collier, do you think that the lack of such an institution leads to corporate concentration in fishing licence ownership?

[Melissa Collier]

I think it's a contributing factor because it makes it so that new entrants and current fishers have a harder time getting the finances to purchase licences.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

I also read in that report—it's from 2019 and I have it right here—that money flowing into reconciliation initiatives is inflating quota prices. Do you agree with that?

[Melissa Collier]

I don't have enough knowledge to be able to agree or disagree with that comment.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Okay.

With the inflation of quotas, is it getting to the point where it's completely out of reach for new and small-sized fishing enterprises?

[Melissa Collier]

I would say, in some cases, absolutely.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Okay.

Is this one of the factors in corporate concentration, the inflation in quota prices?

[Melissa Collier]

I personally believe so. I think the cost has become so challenging for independent operators that others are coming in to purchase those licences.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

And who would these others be?

[Melissa Collier]

They are either investors—we've seen people from urban centres purchasing boats and licences and then having some local operator operate the vessel—or fish buyers and first nations groups, which have also been purchasing.

[Clifford Small, Conservative, Coast of Bays—Central—Notre Dame, NL]

Thank you.

[The Chair, Liberal, Ken McDonald]

Thank you, Mr. Small.

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

[Brendan Hanley, Liberal, Yukon, YT]

Thank you.

Thank you to all of the witnesses for appearing today.

I want to go to Mr. Bourgault-Faucher first.

Monsieur, you described the relationship between DFO policy, in terms of efficiency, and transferable quotas as determinants in this increase in concentration. Now that you have this different regulatory climate and interest, do you see a connection with corporate control, and also with foreign ownership?

[Gabriel Bourgault-Faucher]

There isn't necessarily a link with foreign ownership, as the rules are the same for everyone, whether the investor is foreign or Canadian. At the same time, there are other policies, such as owner-operator protection and fleet separation. If these regulations are enforced properly, individual transferable quotas aren't necessarily a problem. Where it creates a bit of a problem is that these quotas become transferable, which gives them a market value.

Individual transferable quotas are a measure that has been adopted in various western countries. This has led to a surge in the value of these licences, which were previously granted to just about anyone who applied for them. Individual transferable quotas have sharply increased the value of licences, creating a movement in which some wealthier fishers have acquired licences from other fishers, in a spiral of concentration that has increased in recent years.

[Brendan Hanley, Liberal, Yukon, YT]

Thank you.

Dr. German, you really have introduced a whole other area into these hearings, that of the role of money laundering and its connection to foreign ownership potentially. You did say in response to Mr. Hardie's question that money laundering can be a domestic or an international phenomenon. Are you able to describe or document a trend in foreign ownership in fisheries and a connection to money laundering?

[Dr. Peter German]

In our report, we did refer to one particular example that was in the media at the time. That was of an individual who had purchased a large number of quotas and was also a “whale” gambler in our casinos. Now, that's not to say this person was connected with organized crime. That's not a conclusion we could draw, but I would refer you to our report, if you're at all interested. It is freely available online. We talk about this particular individual, his ownership of fisheries-related companies and his involvement in the casino industry.

But, really, it's the unknown you're dealing with when you're dealing with money coming in from abroad. That's not just in fisheries; it's also in other sectors. We saw that in real estate. Where was the money coming from and what was its source?

[Brendan Hanley, Liberal, Yukon, YT]

Thank you.

I have a minute and 15 seconds. I'm going to cede that to Mr. Hardie to continue.

Thank you.