Evidence of meeting #70 for Fisheries and Oceans in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fishers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Gabriel Bourgault-Faucher  Researcher, Institut de recherche en économie contemporaine
Melissa Collier  Fish Harvester, West Coast Wild Scallops
Peter German  Chair of the Advisory Committee, Vancouver Anti-Corruption Institute
Richard Williams  Research Director, Canadian Council of Professional Fish Harvesters

The Chair Liberal Ken McDonald

I now call this meeting to order.

Welcome to meeting number 70 of the House of Commons Standing Committee on Fisheries and Oceans. This meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022.

Before we proceed, I would like to remind everyone to address all comments through the chair.

In accordance with the committee's routine motion concerning connection tests for witnesses, and for members participating virtually as well, I am informing the committee that all tests have been completed and everyone is good to go.

Pursuant to Standing Order 108(2) and the motion adopted on January 20, 2022, the committee is resuming its study of foreign ownership and corporate concentration of fishing licences and quota.

I would like to welcome our first panel of witnesses.

Representing Institut de recherche en économie contemporaine, we have Gabriel Bourgault-Faucher, researcher, by video conference. Representing West Coast Wild Scallops, we have Melissa Collier, commercial fisherman, by video conference. Representing the Vancouver Anti-Corruption Institute, we have Dr. Peter German, chair of the advisory committee.

Thank you for taking the time to appear today. You will each have up to five minutes for an opening statement.

We'll start with Mr. Bourgault-Faucher.

Gabriel Bourgault-Faucher Researcher, Institut de recherche en économie contemporaine

Good morning, Mr. Chair and committee members.

As a researcher with the Institut de recherche en économie contemporaine, the IREC, I have been interested for over three years in the commercial fisheries and aquaculture sector in maritime Quebec from a regional development perspective.

This sector is facing many issues, and I would like to thank you for inviting me to appear this morning as an expert to give my opinion on the matter of foreign ownership and corporate concentration of fishing licences and quotas.

In Quebec, the presence of foreign firms and funds in aquatic product processing is very real but poorly documented. This is a topic we would also like to study in greater depth at IREC. However, this is an issue that falls under provincial jurisdiction, and I do not think the Department of Fisheries and Oceans, or DFO, should be involved in this segment of the industry.

That being said, I think DFO's efforts in recent years to enshrine the Owner-Operator and Fleet Separation Policies in regulations are commendable, even if, based on the testimonies heard in recent sessions, it seems that there is still a lot of work to be done to enforce these regulations fully.

In fact, it is the concentration of fishing companies, a phenomenon that has been observable in Quebec for some years now, that I would like to focus on today.

I have looked at the official DFO data and, for a period of about 10 years, between 2012 and 2021, there have been 465 fewer fishing licences in Quebec, representing a decrease of 8%, while the number of fishers has increased by 34, or 3%. In other words, there are now more fishers sharing fewer licences, which means that we are seeing a significant concentration of fishing licences.

At the same time, landed values have increased sharply in recent years, primarily as a result of higher prices for the main crustaceans on global markets. The result is that each fisher today earns, on average, almost two and a half times what a fisher earned 10 years ago, and that is in constant dollars, which account for inflation. These data are certainly very general and mask an infinitely more complex reality.

Recently, I had the opportunity to produce a fisheries portrait for the regional county municipalities, or RCMs, of the Gaspé Peninsula. In the course of this research, we toured the Gaspé region to gather qualitative data, namely through interviews with fisheries stakeholders. These interviews complement the statistical data and provide a better understanding of the dynamics at work in the Gaspé Peninsula, and possibly elsewhere in maritime Quebec and Atlantic Canada.

The concentration of fishing licences, which has been under way for a number of years, is creating two major challenges for coastal communities with regard to the redistribution of wealth and the establishment of the new generation of fishers. To put it another way, the concentration of fishing licences and quotas in recent years has resulted in a concentration of wealth and an increase in socio-economic inequalities among fishers from different fleets, especially between snow crab and American lobster fishers and other fishers.

This concentration of fishing licences and quotas has also had the effect of accentuating barriers to establishing a new generation of fishers, because it is now more difficult to acquire a first fishing business than it used to be, which in turn reinforces the socio-economic inequalities.

To conclude, I would like to note that in addition to protecting and conserving marine ecosystems, the aim of DFO's regulations and policies is to promote the economic prosperity of fishers and their communities. However, it appears that the department is failing to fulfill that role adequately. That is why it is necessary to consider other regulatory mechanisms to prevent too great a concentration of fishing licences, especially for the main species, and to facilitate access to these licences for the next generation.

The Chair Liberal Ken McDonald

Thank you for that.

We'll now go to Ms. Collier for five minutes or less, please.

Melissa Collier Fish Harvester, West Coast Wild Scallops

Good morning, everybody, and thank you very much for having me here today.

My name is Melissa Collier, and I am a commercial fisherman based out of Courtenay, B.C. I am here today to represent my fishing family, and, more specifically, my husband Joel Collier, who is a fourth-generation fisherman. Joel is actively harvesting prawns as we speak, as was I until a few days ago.

Prawn season is the busiest time of year for my family, especially because we earn the majority of our annual income from this fishery, so the fact that I am speaking here today is a testament to how important I find this issue to be. I have spent the last several days trying to prepare for this meeting, listening to the past sessions as much as I could, while balancing the demands of our business and, more importantly, my little ones, who missed their mom while she was gone. From what I have seen, you have heard, and will continue to hear, from individuals significantly more knowledgeable on this topic than I am, but I would like to take the opportunity to share some of our story and speak to what we see and hear out on the water.

My husband and I fish for spot prawns, salmon by troll, and swimming scallops on our 42-foot vessel, the Lisa Jess. We are owner-operators. Even though we own our licence and quota, much like what Ms. Strobel said in a previous session, we also lease additional quota or licences when needed to make specific fisheries economically viable.

Being owner-operators allows us to decide what to fish and whom to sell to, and to negotiate a fair price. Through many years of effort and developing relationships, most of our catch stays here in Canada. We have worked very hard to maintain full autonomy, even when it has made our path significantly more challenging. It's hard, and in many cases impossible, for our little family business to compete with bigger enterprises. Our expenses are higher to operate. The work is massive for only two people, and we just can't match prices.

We do it because it means a lot to us, knowing that each person or business in our community that supports us gets direct value from our seafood, whether that be all the businesses that supported us to get out on the water in the first place, the two young men we employ, or all those who help us get our seafood to its final destination. It's everything from the local freight company to the fishmonger to the chef.

We also take a lot of pride in producing the highest-quality seafood we can. We love to be able to share it with our friends, family, communities, and fellow Canadians. Feeding people the amazing, sustainably caught seafood from our pristine B.C. waters is what it's all about.

Every year, it gets harder to be a fish harvester, especially in the last four to five years. It seems as if there has been a big shift in the fishing industry, and barriers like never before are constantly being thrown in our path. Every year, we have to work harder than the last just to make this life work. With the current trends in our coastal communities, it will likely only get worse.

I've complied a list of observations in the hope that they frame the issue, and I can elaborate on any of these during the question period, if there is interest.

We are seeing fewer and fewer owner-operators participating in the industry. We are seeing fewer boats tied up at the dock. We are watching multi-generational fishing families unable to pass their business down to their children. We have watched the fleet grey, which should be an opportunity for new fishers to enter and existing fishers to build their fishing businesses. Yet, due to overinflated prices, the fact that the licences are married, or being outbid by larger entities and corporations, it's nearly impossible for independent harvesters to purchase these licences.

We have personally witnessed vessels and licences being used as physical assets and investments, being bought by individuals who, themselves, have no plans to fish. We see fishers our own age leaving the industry at an alarming rate, many of whom are multi-generational fishers. We have watched lease prices driven up so high that there is a financial incentive for owners to lease instead of fish. We are watching as the food security of our country is being put at risk, as the access to our fishing resources is being taken away from local fishers. We have seen drastic changes to our coastal communities and a reduction of services available to fishers.

If you had asked us five years ago what we felt about the future of the fishing industry, we would have been optimistic. Fishing is a very hard life, but it is worth it, and we saw a future. Our future is now uncertain. We honestly don't know whether we can remain in this industry long enough to pass it down to our children the way it was passed down to us. If fishers like us who are so heavily invested in the fishing industry are already having such a hard time, how are new entrants supposed to make it work? What is an industry without a next generation to continue it?

The fishing industry is struggling for so many reasons. I will not say that all of these observations are a direct result of the current licensing system, but a system that allows anyone to own licences and quota exacerbates the problem. Access to and the income generated from fishing continue to be concentrated in the hands of a few, instead of flowing to the men and women actually doing the work, and the coastal communities in which they live and work. For those of us who do own and operate, we can't possibly keep up. We will be slowly squeezed out as fishing becomes less economically viable.

Thank you very much.

The Chair Liberal Ken McDonald

Thank you for that.

We'll now go to Dr. Peter German for five minutes or less, please.

Dr. Peter German Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Good morning, members of the committee. Thank you for the invitation to appear here today.

By way of a brief introduction, the Vancouver Anti-Corruption Institute, VACI, was established in 2021, in the wake of money laundering and other disclosures within British Columbia. It's an integral part of the International Centre for Criminal Law Reform and is located at the University of British Columbia. We have a distinguished board of advisers, many of whom would be known to you. We are non-profit and do project work internationally, as well as research and writing, and host conferences and workshops.

On a personal note, I'm a former deputy commissioner of the RCMP and of Corrections Canada. I also authored two reports for the Attorney General of British Columbia, who is now its premier, entitled “Dirty Money” and “Dirty Money—Part 2”.

I do not profess to have any experience in fishing or the fisheries. Mine lies in the areas of money laundering, organized crime and corruption.

The work of this committee is vitally important to Canada's fisheries, to coastal communities and to individual fishers. As an addendum to the terms of reference that I received from B.C.'s Attorney General in 2017, I was asked to review the issue of money laundering in the context of the purchase and sale of fishing licences and quotas. We spoke to several individuals, reviewed documents and included our findings in “Dirty Money—Part 2” at chapter 5-1.

It is worth noting that the linkage between fisheries, organized crime and money laundering is a subject that has been studied internationally, including by the UN Office on Drugs and Crime. When you do not have a transparent ownership system in which the public is able to see who are the ultimate beneficial owners of fishing licences and quotas, you are vulnerable to the involvement of state actors, organized crime and money launderers.

In our research, the high degree of concentration of ownership of fisheries licences and quotas on the west coast was alarming. Equally alarming was the high degree of ownership by foreign entities and non-citizens. We were advised that the top four visible owners of groundfish trawl, halibut and sablefish quotas were foreign entities or individuals, amounting to 50% of B.C.'s quotas for those species.

The move to a beneficial ownership registry in B.C. for land ownership and the federal government's recent commitment to a beneficial ownership registry for corporations reflect the importance of transparency. The same should apply to the fisheries. We cannot simply allow our fishery to be sold to unknown persons using unsourced funds.

This brings me to the money. Money laundering is the back office of organized crime and walks in tandem with it: how much, from where and why are critical questions. We refer to three stages in a money-laundering cycle: placement, layering and integration. The intent is to obfuscate the paper trail. Virtually all countries have anti-money-laundering laws. Few actively enforce them. In Canada, our record has been spotty, although budget 2023 and initiatives in B.C. do offer hope, as does civil forfeiture in the provinces.

Determining the source of funds or wealth used to purchase licences and quotas is incredibly important. Is the source of funds legitimate or are the fisheries being used as part of a broader attempt to invest money obtained through crime, or money avoiding overseas capital controls or money evading taxes? Inadequate vetting of the source of funds entering our casinos led to the casino debacle in B.C. With much stricter rules and thresholds now in play, the issue within our casinos has been reduced dramatically. However, dirty money must be laundered, and it will inevitably move to areas of less resistance.

We must also be alive to the fact that fish quotas and boat sales are not reportable to FINTRAC, Canada's financial intelligence unit. This is regrettable, as it eliminates an important source of intelligence for investigators seeking to ensure that the fisheries are not being used by organized crime.

I will end by noting that solutions require strong legislation and cross-agency co-operation. However, there is no point in creating regulations if they are not enforced, or if those tasked with enforcement do not have the necessary skills and resources.

Members of the committee, yours is a particularly important task. I thank you for your work, and I'm happy to answer any questions you may have.

The Chair Liberal Ken McDonald

Thank you for that.

We'll now go to our first round of questions, starting with Mr. Arnold for six minutes or less, please.

I remind members to identify whom their question is for in order to make it a little easier and smoother.

11:15 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Thank you.

Thank you to all the witnesses today.

I'll start out with Mr. German, if I can. Thank you for appearing.

You mentioned that there's a lack of accountability and spotty performance in Canada in terms of enforcement. Where are the gaps in the enforcement, and where are the gaps in identifying? Can you help us identify that?

11:15 a.m.

Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Dr. Peter German

Thank you.

It's a good question with a huge answer. It's really a cross-party issue, and this is something that we've seen for years despite governments.... Money laundering is not one of those topics that tend to rise to the top of agendas. It does from time to time, when there is some sort of an issue, but it has increasingly been receiving attention, certainly in British Columbia as a result of our casinos, but also nationally. We do not have a lot of systems that other countries do.

For example, and I'll pick on one, we do not have what's referred to as universal cash reporting, which means that all suspicious transactions from all industries have to be reported. Fisheries are an example. Boat sales, auto sales and auction houses are not reportable to FINTRAC. FINTRAC, our financial intelligence unit in Canada, receives a lot of intelligence, but not from certain segments of the economy where it should, and this is one of them. That's one example.

11:20 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Thank you.

Can you tell us how it might be possible to tie the foreign investment or money laundering to the purchase of vessels, licences or other operations that would have control over the actual harvesters who may not own the licences or own the quotas?

11:20 a.m.

Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Dr. Peter German

Really, it boils down to transparency, knowing whom you're dealing with and knowing where the money is coming from. That's really what I was trying to say in my opening remarks. That requires doing due diligence. This is no different than financial institutions doing due diligence on who their customers are. We should be doing the same thing in terms of who's buying licences and quotas.

11:20 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Thank you.

I'm going to switch to Ms. Collier online.

Thank you for appearing today. It was great to visit your boat with your husband and see your operation a few weeks back.

I think you explained a lot of frustration in what you're seeing with the harvesters in your area and so on. Have you seen any change, whether a positive change or a more concerning trend, with the ownership of quotas and licences on the west coast?

11:20 a.m.

Fish Harvester, West Coast Wild Scallops

Melissa Collier

Yes, I think that in general, we've seen a lot fewer owner-operators operating on the coast, and a lot more people relying on leasing to be able to access licences. We've seen a lot of boats changing hands, and we're not sure who is purchasing those boats and licences. I think a lot of it—as I said in my opening remarks with the greying of the fleet—is seeing a lot of fishermen retire unable to pass it down to an active fisherman, so those boats and licences either get purchased by an investor of some sort or go into a bit of a pool with some processors so fishers can still access them, but as a roundabout way through leasing.

11:20 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Roughly four years ago, this same committee completed the report on sharing the risks and benefits on the west coast. I think the indication that that study was done and that it was completed four years ago explains to me that this issue has been ongoing for longer than that time. It was obviously there before we started the committee. Have you seen any actions out of that report from 2019 that have improved the situation for harvesters in your area?

11:20 a.m.

Fish Harvester, West Coast Wild Scallops

Melissa Collier

No, the only action I've personally seen is the beneficial survey that came out, which, as you've heard from previous speakers, seemed flawed. My husband and I had to fill it out twice because we have both vessel-based and party-based licences. Actually, it was three times, due to technical glitches.

That's the only action I've seen. Otherwise, it seems like some more studies or potentially research has been launched by DFO, but nothing tangible that is actually translating to anything on the fishing grounds.

11:20 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Thank you.

Mr. Bourgault-Faucher, you mentioned that you've been providing data for over 10 years. How long has this been an apparent issue, and have you seen any positive change in the last number of years?

11:20 a.m.

Researcher, Institut de recherche en économie contemporaine

Gabriel Bourgault-Faucher

Just to clarify, the data I looked at are the data provided online by the Department of Fisheries and Oceans. The reason I picked data from the last 10 years is that I didn't want to go back too far. There are also challenges in compiling data, which sometimes change at certain times. Since I've only looked at the data from Quebec, I can't confirm that the phenomenon is similar in the rest of Canada, but that is most likely the case. We can't go back more than 10 years because the data aren't necessarily comparable.

11:20 a.m.

Conservative

Mel Arnold Conservative North Okanagan—Shuswap, BC

Thank you.

The Chair Liberal Ken McDonald

Thank you, Mr. Arnold.

We'll now go to Mr. Hardie for six minutes or less, please.

Ken Hardie Liberal Fleetwood—Port Kells, BC

Thank you very much, Mr. Chair.

I could use double the time, because there are so many questions.

Dr. German, I'll start with you.

Does money laundering almost exclusively involve foreign actors?

11:20 a.m.

Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Dr. Peter German

No. Most crime gives rise to proceeds of crime, and that's why people commit crime. That's sort of why organized crime commits crime; it's to make money. We have domestic money laundering, and we have foreign money laundering. It really depends on where the organized crime groups come from.

Ken Hardie Liberal Fleetwood—Port Kells, BC

Is there a problem with the fact that FINTRAC doesn't really apply to transactions with lawyers and particularly between lawyers' trust accounts?

11:25 a.m.

Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Dr. Peter German

It has been an issue for quite some time, and I've been somewhat outspoken about it. Other countries—in fact, many countries in the European Union—require that lawyers report suspicious transactions. In Canada, we have not gone in that direction. There's a reliance on law societies to regulate and also to provide that component.

The recent Cullen commission sort of endorsed that approach. It's not necessarily what I agree with, but that is the Canadian approach.

Ken Hardie Liberal Fleetwood—Port Kells, BC

There is some work being done by Fisheries and Oceans, DFO, on beneficial ownership, but we understand, and I don't know if you've picked this up, that the question they asked isn't going to produce the information. They just asked if people had a licence, as opposed to who owned the licence that they had.

Have you had that reflection yourself, sir?

11:25 a.m.

Chair of the Advisory Committee, Vancouver Anti-Corruption Institute

Dr. Peter German

First of all, my involvement in fisheries is somewhat dated, in that it relates to the work that I did on the “Dirty Money” reports. It's funny how fast time moves along.

However, the issue of transparency and beneficial ownership is that you have to know not the name of the company but who the beneficial owner is of the company that holds the licence. Having the name of the lawyer who registered the company is simply not sufficient. You have to go back to the individual who is what we refer to as the beneficial owner.