Evidence of meeting #71 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 investors.
A recording is available from Parliament.
3:55 p.m.
Conservative
3:55 p.m.
Liberal
The Chair Liberal Ken McDonald
Yes, you just ran out, Mr. Arnold.
We'll now go to Mr. Hardie for six minutes or less, please.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Thank you, Mr. Chair, and thank you to everybody here today.
Mr. Cameron, it's good to see you again. You've been kind of a frequent flyer at these hearings.
You mentioned that there should be steps to restrict the sale of licences and quota to, basically, Canadians. Is that correct?
3:55 p.m.
Director, British Columbia Crab Fishermen's Association
It's more to actual individual fishermen or to first nations.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Are you saying that if somebody were to sell a licence or quota to another entity or individual who simply leased it out, it should not be allowed?
3:55 p.m.
Director, British Columbia Crab Fishermen's Association
You'd have to decide at that point, because in different first nations' fishery initiatives, they want the ability to lease to different members, so I think it would be a little different in that scenario, but as an independent harvester, I would say no.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
You attended some sessions in Victoria earlier this year, and almost as a side comment you mentioned that you, in fact, had sold a licence. Is that correct?
3:55 p.m.
Director, British Columbia Crab Fishermen's Association
I've bought and sold licences in my fishing career.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
It's only human and only natural, and certainly the free market would suggest that you'd want to get the best price you could, especially when you're selling, and the lowest price you could when you're buying. Is that right?
3:55 p.m.
Director, British Columbia Crab Fishermen's Association
You'd want at least the best price when you're selling, yes.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Especially given our sense that so many licences and so much quota are in the hands of people who.... If we were to make a transition to an owner-operator fleet separation regime, how could we get through that process and not unduly harm people who up until now have been playing by the rules but who have a considerable amount of wealth at least tied up in the licences and quota that they own but don't fish?
3:55 p.m.
Director, British Columbia Crab Fishermen's Association
I would say the demand is so strong that you almost would not have to worry about it.
This government has given hundreds of millions of dollars to CFN specifically. There's a lot of capital that would make that process fairly seamless. I imagine prices will drop a little bit, potentially, but I don't think there's going to be this big cliff.
I think Paul Kariya was pretty straightforward when he testified here. They've been given a lot of money to buy licences, and if they don't have the ability and supply to buy those licences, the access will be expropriated straight towards them, so that's a much bigger concern with respect to licence valuations than restricting who could purchase them.
3:55 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
On the acquisition or provision of licences and quota to first nations communities, I've raised the issue that if that happens and the community actually gets its hands on licences or quota, that represents an opportunity for somebody in that community to actually be engaged in the fishing activities and the usual flow of economic and other benefits back to the community, but we also know that some of the communities—and you mentioned this just now—would prefer to lease it out, and that wouldn't necessarily be to a band member; it could be to anybody.
Do you think that something needs to change there?
4 p.m.
Director, British Columbia Crab Fishermen's Association
To be honest, I don't think it's our place to speak to how they exercise those rights. We certainly feel for harvesters who want to be on the water, but we're not in a place at this time to determine self-determination for different nations. You can speak more to independent harvesters on that.
4 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
I appreciate that, Mr. Cameron.
Mr. Callaghan, vertical integration has become a reality and an economic necessity, I guess, in the industry out on the coast. You've spent a lot of money on a processing facility and obviously you want the material that goes into it.
Add to that the fact that many harvesters get access to quota or licences through a processor and they're then indentured to that processor to sell to them. The price is set before the season starts, and the fisher gets paid whatever the market or whatever the processor's willing to pay them after the fact.
Does that scenario not concern the Competition Bureau?
4 p.m.
Associate Deputy Commissioner, Policy, Planning and Advocacy Directorate, Competition Bureau
My colleague Mr. Durocher may have something to add on this point, just from the perspective of potential merger review, but I would say that vertical integration is not something that in and of itself would cause concern. There certainly are cases in which vertical integration can bring efficiencies and can lead to pro-competitive outcomes, but that said, we would look at every case on its own merits.
My colleague Mr. Durocher has mentioned notification thresholds whereby the bureau would be made aware of mergers transactions in the space, but I'll just mention that the bureau can review merger transactions of any size.
In and of themselves, they wouldn't necessarily raise competition concerns, and we would evaluate each one on its own facts to see if there is an effect on competition.
4 p.m.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
In fact, has your agency, the Competition Bureau, ever been asked to look into a merger such as, for instance, the acquisition of the Canadian Fishing Company by Jim Pattison Group?
I'll use that as an example. You don't have to confirm whether or not that was one, but have you ever actually had to look into a transaction out of the west coast?
4 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Yes, we have. We've looked at probably half a dozen mergers in this space, mostly on the processing side, over the last four years, none of which we've taken action on, but all of which have undergone a thorough competition review.
4 p.m.
Liberal
The Chair Liberal Ken McDonald
Thank you, Mr. Hardie. Your time is up. You're right on the mark.
We'll now go to Ms. Desbiens for six minutes or less, please.
June 1st, 2023 / 4 p.m.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
Thank you, Mr. Chair.
Witnesses, thank you so much for being with us. We've been looking forward to seeing you.
I'd like you to tell us how the Competition Bureau gets involved when an outside company wants to make an acquisition in Canada or Quebec. What are the first steps involved?
4 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Thank you for the question.
I'd like to start by saying that a company's nationality really has no bearing on our work. What's important to us is really the competition.
When a transaction or merger is proposed, the first thing to check usually is whether the financial thresholds are exceeded. I touched on this earlier. If the financial thresholds are exceeded, companies must give notice to the Competition Bureau. On the one hand, this gives us the information we need to conduct a review to make sure there are no competition problems. On the other hand, it gives us some time to review the facts before the parties can close the transaction.
That said, the bureau can review transactions even if they don't exceed the financial thresholds, and this is to ensure that there are no competition issues. We have a team that obtains information from the market so that we are aware of any mergers that may be problematic. In addition, we often receive complaints from third parties, whether consumers or suppliers, notifying us of a transaction they feel is problematic. In such cases, we review the facts and determine whether we wish to initiate a review of the transaction.
Transaction review involves interviews and document review. Occasionally, we hire experts as needed. Once this process is complete, in order to act, we need to determine whether there is an impediment to competition or a marked lessening of it. This is what constitutes the threshold.
4:05 p.m.
Bloc
4:05 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Yes, somewhat. Actually, it's really a legal threshold. It's included in our law.
It's relatively rare that, as part of our reviews, we determine that there are competition issues, but, when there are, it can be very serious and have a significant impact on an industry. We can then take our case to the Competition Tribunal, either to block the transaction or to seek divestiture of assets to correct the competition problem.
We can also enter into negotiations with companies and come to an amicable agreement, which we call a consent agreement. We then file this agreement with the Competition Tribunal. It's really an amicable agreement, but the—
4:05 p.m.
Bloc
Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île dOrléans—Charlevoix, QC
This way, your thresholds would be respected.
4:05 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau
Yes. This approach can also be aimed at ensuring that remedial measures are taken to counter the anti-competitive effects of a transaction. For example, this often involves divesting one of the parties involved of some of its assets to ensure that competition is respected.
