Evidence of meeting #12 for Fisheries and Oceans in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was decisions.
A recording is available from Parliament.
Liberal
The Chair Liberal Patrick Weiler
Thank you very much, Mr. Klassen.
That completes our first panel.
I want to thank our witnesses for their testimony and for being patient while we worked through some of our committee business. Certainly, your testimonies will be very helpful as we put together our recommendations. Thank you very much.
With that, we're going to briefly suspend while we welcome our next panel.
Liberal
The Chair Liberal Patrick Weiler
Colleagues, we're starting back up here.
I'm just going to make a few comments for the benefit of the witnesses. Please wait until I recognize you by name before speaking. For those who are participating by video conference, click on the microphone....
I'm sorry, but I'm going to have to pause here.
Liberal
The Chair Liberal Patrick Weiler
Colleagues, we're getting started again here. I know we had a great panel earlier on, but we are moving on to our next panel here. I'll say a couple of comments for the new witnesses.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking.
For interpretation, for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. Those in the room can use their earpiece and select the desired channel.
All comments should be addressed through the chair.
With that, I would like to welcome our witnesses for our second panel.
I would like welcome Professor Stewart Elgie, Jarislowsky chair in clean economy, University of Ottawa. He is participating in person.
We are hearing from Denis St‑Pierre, a chartered professional accountant. He is participating in the meeting by video conference.
We have Regional Chief Terry Teegee and James MacDonald from the Assembly of First Nations, and we have Jim McIsaac, executive director, BC Shrimp Trawlers’ Association.
We are going to start with the opening statements of the witnesses for five minutes. We'll start in person here with Professor Elgie.
Stewart Elgie Jarislowsky Chair in Clean Economy, University of Ottawa, As an Individual
Thank you, Mr. Chair.
I'll speak in English today, but I can answer questions in French, if you like.
I'm a professor at the University of Ottawa and the founder and chair of the Smart Prosperity Institute, Canada's largest sustainable economy research institute. I'm going to speak today about strengthening habitat protection and growing fish populations by moving to a policy of net gain under the Fisheries Act. This is also going to support projects of national economic interest.
We've sent in speaking notes that have more detail. They are supported by a number of other organizations, which are set out in our brief.
Needless to say, fish are very important to Canada—economically, recreationally and for indigenous nations across Canada—and we're currently not doing enough to sustain this vital natural resource. Fish numbers and habitat have been declining across Canada for decades. According to the best numbers from the federal government, there's been a 40% decline in fish populations in Canada since 1980. Habitat loss is a major cause of that decline.
What's causing this problem? What can we do about it under the Fisheries Act? Start with the policy. From 1986 to 2012, DFO implemented the Fisheries Act with a stated policy goal of achieving net gain of both fish and fish habitat. They abandoned that policy in 2012. Since 2012, the rate of decline in fish populations has accelerated.
Turning to the act, the Fisheries Act itself prohibits habitat alteration and disruption without an authorization. To get an authorization, proponents have to follow the mitigation hierarchy, but in particular, they can use offsets. I'm going to focus on that today. You probably know a bit about offsets. Essentially, it's restoring or conserving another area of habitat in order to offset damage you've done.
Since 1986, DFO's policy goal requires offsets to achieve what's called “no net loss”. That's an important term that I will come back to. To achieve that, an offset must restore more habitat than is damaged. DFO's policy recognizes that. There are a number of reasons. Basically, replacement habitat is rarely as good as natural habitat. There are often delays between a project starting and habitat being restored. There are also risks that it won't work.
There's a lot of research on how much extra habitat is needed. It's known as what ratio is needed. Research by DFO scientists consistently concludes that you normally need a replacement ratio of at least 2:1 to achieve no net loss, and normally more in the 3:1 or 4:1 range. All of the evidence shows that DFO's offsets are not achieving that no net loss goal. There have been four major studies in the last 20 years on this, two by DFO scientists. All of them show that the offsets DFO is requiring are well below that 2:1 replacement goal to achieve no net loss, and it's getting worse. The two studies since 2017 actually found that the latest offsets are all below a 1:1 ratio. In other words, we're requiring less replacement habitat than the habitat being damaged, and that habitat is generally of poorer quality.
It's worse on the ground. There have been two audits, one by the commissioner of the environment and sustainable development. They found that on the ground, the majority of offsets aren't even doing what's required on paper.
What do we do about it? Well, to fix the problem, we recommend moving from no net loss back to net gain, the policy that was abandoned in 2012, but this time implementing that policy properly. Achieving net gain will not only sustain fisheries; it will also meet our commitments under the biodiversity convention, the latest version of which was signed in Montreal, which requires us to halt and reverse biodiversity loss by 2030. It's actually in the Liberal platform, that commitment, and I know that most parties have committed to it.
Other leading countries are doing this. The U.K. passed a net gain act in 2023. Australia has a similar law, which is now at second reading before its Parliament, requiring a net gain of habitat. Many hundreds of leading businesses around the world, including Canadian resource companies and sectors, have endorsed this goal of net gain of habitat.
Our brief recommends a two-stage approach to get to net gain. First of all, revise the offset policy to require net gain, with a minimum ratio of 2:1, but 3:1 on average, consistent with DFO's own science. Second, revise the act to require net gain in law. This will result in increasing private investment in habitat restorations by community organizations and first nations across Canada. We can do it while lowering costs and delays for proponents.
I have one quick note on this. Our brief sets out two methods that you can use to lower costs and delays while achieving net gain. One is third party banking. The other is called “fees in lieu” of offsets. I'll let you read the brief, but very briefly, in a fee in lieu, instead of proponents themselves having to go out and do an offset...which they're not an expert in. They're a development company. They're not an expert in fish habitat. Instead, they can pay a fee equivalent to what that would cost. The offset will get done by a third party restoration organization that knows how to do this. It results in better offsets, lower costs and less delay.
One benefit of this is that it's consistent with these projects of national economic interest. Allowing fees in lieu will let these projects go forward more quickly with less red tape, which will result in better environmental outcomes, less costs and faster projects, which is what we all want for Canada right now.
I'll leave it for other questions.
Thank you.
Liberal
The Chair Liberal Patrick Weiler
Thank you very much, Mr. Elgie.
Mr. St-Pierre, you have the floor for five minutes or less.
Denis St-Pierre Fellow, Chartered Professional Accountant, As an Individual
Thank you, Mr. Chair.
My name is Denis St‑Pierre. I live in Bathurst, New Brunswick. I'm an accountant. I'm a partner on the tax team at MNP's offices.
A good portion of my clients are owners of an inshore fishing company. I regularly set up family organizational structures for these fishers, with the help of lawyers.
Since April 1, 2021, structures related to fishers are now regulated quite strictly with the addition of section 17.2 of the Atlantic fishery regulations, 1985, and its parallel section 29.01 of the maritime provinces fishery regulations.
I will refer to both regulations as “the regulations”.
In both regulations, there are drafting errors. I appreciate the occasion to be on the record to explain them to you.
In the French regulations, non-voting shareholders and beneficiaries of a family trust can only be a “membre de la famille”. The regulations, instead of defining what a “membre de la famille” is, invite the reader to look at the definition in the Income Tax Act—“personnes liées”—or, in English, “related persons”.
The problem under this particular provision of the Income Tax Act is that individuals are not related to themselves. As a result, fishers are not allowed to have non-voting shares in their corporations, even if the fisher is the sole shareholder, nor can they benefit from their own family trust. When I pointed this out to the DFO in 2021, everyone that I spoke to seemed to be surprised, and it appeared to be a drafting error.
However, the regulations are completely ignored by the DFO, which allows non-voting shares to be issued to the fisher and for fishers to be beneficiaries of their family trust. This is because the English version reads differently. In that version, the definition restricts ownership and beneficial interests to a specific group, “a member of that individual's family”. These regulations do not define what a member of that individual's family is; instead, they define “family member”. “Family member” is defined, but it is then never used anywhere in the regulations. Absent a definition, what is meant by “a member of that individual's family” is not clear.
The DFO has taken the approach that it believes it knows what Parliament meant, and possibly it does. The DFO allows the fisher and their parents, children, grandchildren, brothers and sisters to own non-voting shares, and the same group can be beneficiaries of the family trust. To include the fisher in that group is in complete contravention of the French regulations, but based on the drafting errors, the DFO allows it in the English version, and thank God they do.
I have it in writing that the DFO agrees that the errors are real and that the department is relying on the flaws in the English version to allow what is otherwise contrary to the act in the French version. To my knowledge, the DFO does not allow uncles, aunts, nieces and nephews to own shares, or non-voting shares, or any shares. However, it would seem that the DFO could if it wanted to, because the DFO has decided internally what is meant by “a member of that individual's family”, ignoring the French regulations. That is error number one.
The other one could be called a flaw. The regulation does not force “the” licence-holder to be the key controlling person, only “a” licence-holder. For example, to meet the definition of an inshore family fishing corporation, 100% of its voting shares must be held by “a” licence-holder, not “the” licence-holder. Nothing in the regulation stops a licence-holder from controlling multiple licences through multiple corporations. The regulations should read “the” licence-holder and not “a” licence-holder.
Improvements to the regulations should permit the introduction of nephews, nieces, uncles and aunts. This would improve estate planning and business succession. In-law relations like son-in-law, daughter-in-law, brother-in-law and sister-in-law should continue after death. Now they don't, because of the reference to the Income Tax Act.
Finally, no more than one trustee is allowed in the regulations. In Quebec, section 1275 of the Civil Code of Quebec requires an additional trustee when the fisher is also a beneficiary. Because the law in Quebec requires a second trustee and the regulations force only one, in practice it is impossible for Quebec fishers to use family trusts. This is a nightmare from a tax and estate planning perspective, and it is also a prejudice to fishers in Quebec, who are treated differently from the fishers in the rest of Canada.
Thank you for your time. I'm ready for questions.
Liberal
The Chair Liberal Patrick Weiler
Thank you very much, Monsieur St-Pierre.
Next, we are going to go to Regional Chief Terry Teegee for five minutes.
Terry Teegee Regional Chief, Assembly of First Nations
Thank you to the committee.
[Witness spoke in Dakelh]
[English]
I'm calling from the territory of the Lheidli T'enneh, the Dakelh people of central British Columbia. As the regional chief of the British Columbia Assembly of First Nations, I'm also the co-chair for the national fisheries committee.
This submission is on behalf of the Assembly of First Nations and was mandated by the AFN resolution 22 entitled “2024 Fisheries Act 5-Year Review to Ensure Alignment with the United Nations Declaration on the Rights of Indigenous Peoples”.
We “urge the Government of Canada to properly fund the engagements needed for First Nations' full engagement, collaboration and consultation in the statutory 5-year review of the Fisheries Act in alignment with [what is known as UNDA] Action Plan Measure 38.”
We “advocate that the...review...be undertaken in full cooperation and consultation with First Nations, including appropriate timelines, and with the purpose of implementing amendments to achieve the objectives of the United Nations Declaration on the Rights of Indigenous Peoples.”
Also, “engage with...Fisheries and Oceans [Canada], (DFO), and propose amendments to enable the Fisheries Act to be a legal instrument for the proper recognition and affirmation of Inherent and Treaty-protected rights-based fisheries, in addition to the protection and conservation of marine and coastal waters.”
Lastly, we “advocate to the federal government to provide adequate funding for First Nations rights and title holders in the Lower Fraser River for addressing [the issues of] major developments.”
In terms of the UN declaration framework, we have proposed preamble amendment options.
The first preamble option is as follows:
Whereas the Government of Canada has “adopted, without qualification” the United Nations Declaration on the Rights of Indigenous Peoples.
The second preamble is as follows:
Whereas the Government of Canada is committed to achieving reconciliation with Indigenous peoples through a framework that recognizes their...[inherent rights] and legal traditions consistent with universal declarations of human rights and the core international human rights instruments adopted by Canada...[which is known as the] Declaration on the Rights of Indigenous Peoples Act....
Where there is any inconsistency or conflict between the provisions of the Fisheries Act and the United Nations Declaration on the Rights of Indigenous Peoples Act, the provisions of the United Nations Declaration on the Rights of Indigenous Peoples Act shall prevail to the extent of the inconsistency or conflict.
We also propose an amendment establishing co-jurisdictional authority, a dual governance framework, and we recommend this amendment, a proposed subsection 2.4(1):
In the administration of this Act, the Minister shall exercise all powers and duties, in partnership with Indigenous Governing Bodies, ensuring that decision-making, regulation, and management of fisheries and fish habitat are consistent with co-jurisdictional authorities established under sections 4.1 and 4.2.
And also:
Consideration of priority in rebuilding fisheries stock and habitat restoration.
In terms of management, our recommendation is:
In the management of fisheries, where the Minister implements measures with respect to fish stocks or fish habitat restoration, the Minister shall give priority to measures aimed at stocks or habitat relied on by the Indigenous peoples of Canada for food, social, ceremonial, economic uses and those related to the exercise of their rights recognized and affirmed by section 35 of the Constitution Act, 1982.
Furthermore, we do have more recommendations, but the point is that we are recommending full alignment, as proposed and committed to by the national action plan and the 11 recommendations within that relate to DFO, including the full alignment with the declaration, and also observing that there are provisions for free, prior and informed consent.
I'll leave it at that. We do have a formal submission, and we'll submit it later on today.
Thank you.
Liberal
The Chair Liberal Patrick Weiler
Thank you very much, Regional Chief.
Of course, as you mentioned, if there's anything you would like to submit afterwards in writing, it would be very helpful for the committee as we look forward to putting together our recommendations.
Next we're going to go to Mr. McIsaac for five minutes or less.
Jim McIsaac Executive Director, BC Shrimp Trawlers’ Association
Thank you, Chair and members of the committee, for the invitation to speak here today.
The BC Shrimp Trawlers' Association is a member of the Canadian Independent Fish Harvesters Federation and fully supports the four recommendations that Melanie raised earlier today.
I first fished commercially when Roméo LeBlanc was minister. Canada had just claimed a 200-nautical mile exclusive economic zone, the UN Convention on the Law of the Sea had been drafted but not yet ratified, and our Oceans Act was 20 years away.
Fishing paid my way through university. When I graduated, I chose to stay in fishing. I love the people. I love the communities. I love the purpose. I love how present it is. If you don't pay attention, you can die. It is an old and honourable profession. The fish hook predates the plough.
The development and implementation of our modern Fisheries Act has been overseen by six ministers over seven years. If we really wanted to modernize the Fisheries Act, we should have started with absolute discretion. This throwback to absolute monarchy has no place in a modern act. It is not the minister who exercises absolute discretion. Few are there long enough to understand what they could be doing. It is senior staff who exercise this discretion. Some take direction from above, but most take direction from corporations, processors and investors that profit from our fishery. Few take direction from this committee, and even fewer take direction from fishermen in our coastal communities.
In 2019, this body unanimously passed recommendations on licensing reform in the Pacific. The recommendations were great if they were implemented. One of the few positive items completed out of those recommendations was the east-west comparative analysis. This report observes that DFO generally turns a blind eye to social objectives. These are the objectives that many ministers speak to and are called for—sometimes begged for—by harvesters in coastal communities. For the last 35 years, the well-being of B.C.'s remote coastal communities has been in decline. This coincides with DFO dropping the social objectives protecting harvesters. Again in 2021, this body passed recommendations on licensing reform. The first recommendation was to implement FOPO's 2019 recommendations. We are still waiting.
For fishermen and coastal communities, these social objectives are imperative for our existence. Without them, fishermen and fishing communities perish. Witness the west coast: Since 1990, we have lost some 80 fishing communities and over 16,000 fishermen. Another 800 fishermen have been lost since 2019. It is obvious that our social objectives are too easily ignored in policy and FOPO reports. We must enshrine them in the Fisheries Act.
When Minister LeBlanc was drafting the modernized act, he told us that in section 2.5(h)—preservation or promotion—the promotion was for the west coast. It has been more like assault and demolition. The department tells us that 2.5(h) is for the east coast as the west coast has no inshore fisheries. I'd say our fisheries are inshore with maybe one exception: offshore hake. DFO clearly needs this spelled out in law.
A few weeks ago, the minister told this committee our fisheries are a common property resource. This public right to fish dates to the Magna Carta of 1215. The department, the minister, the PMO and the King do not own this. We the people do. Our fisheries are to be managed for the benefit of all Canadians. Ensuring licences and quota are in the hands of harvesters in our coastal communities will ensure this.
Thank you for your attention, and I hope this has been useful.
I look forward to your questions.
Liberal
The Chair Liberal Patrick Weiler
Thank you very much, Mr. McIsaac.
With that, we're going to go into the six-minute round of questioning, starting with Mr. Small.
Conservative
Clifford Small Conservative Central Newfoundland, NL
Thank you, Mr. Chair.
I'd like to welcome the witnesses.
Mr. Elgie mentioned economics, and I have some economics here. I have the GDP of Canada's fishery in 2010, which was $3.9 billion, and in 2023 it was $3.5 billion. Norway's was $12.8 billion U.S. in 2010 and $12.8 billion last year, so Norway has had a 4.5% factor of growth since 2010 while we've shrunk.
What do you think the reason is? Do you think it's the act not managing an outcome that we want in our fishery, which is growth? Is it fisheries management? Could it be pinniped predation?
Jarislowsky Chair in Clean Economy, University of Ottawa, As an Individual
Those are good questions. I'm not necessarily the right person to answer them, but I can tell you this, since I'm here to talk about habitat: When you strengthen habitat, you grow fish populations. It's like growing the pie. Instead of talking about dividing it up or shrinking it, investing in fish habitat grows the pie, which supports the economic growth of fisheries. It supports increased recreational use of fish by fishers across the country, as well as indigenous use.
Having strong, protected fish habitat and improving it is the base of all successful fisheries.
Conservative
Clifford Small Conservative Central Newfoundland, NL
I heard you mention the degradation of habitat as a major factor in your submission. Are you talking salt water or fresh water, Mr. Elgie?
Jarislowsky Chair in Clean Economy, University of Ottawa, As an Individual
Well, they're both. The statistics mix the two together. Generally, the research shows that harvest volumes are probably the biggest threat in salt water, and that habitat is a bigger threat on fresh water, but habitat is a significant problem for both.
Conservative
Clifford Small Conservative Central Newfoundland, NL
How do you measure the destruction of habitat in the ocean? How do you quantify it?
Jarislowsky Chair in Clean Economy, University of Ottawa, As an Individual
First of all, I'm not a deep expert on that. If you want to get into the details, I have a colleague here with me, Nick Lapointe, from the Canadian Wildlife Federation.
Mr. Chair, is it okay if I bring him up to join me on that? Okay.
Nick, do you want to come up and help out on that?
Conservative
Clifford Small Conservative Central Newfoundland, NL
Mr. Lapointe, I'm looking at the open standards for conservation, otherwise known as the conservation standards. I'm sure you're aware of those standards. I have something that comes right off their page, under “Support conservation standards”. It is:
The biodiversity conservation community is tackling large, complex, and urgent environmental problems where the stakes are high. However, we don't have a fully functional system to assess the effectiveness of our actions. Without more rigorous measurement of effectiveness and disciplined recording of our efforts, we cannot know or demonstrate that we are achieving desired results.
This is what marine protected and conservation areas are based on. I discovered them when I was checking out CPAWS. If you can't measure where you are or an outcome...the statements that you're making, I have some problems with it.
Nicolas Lapointe As an Individual
I think there's a challenge across the board of a lack of investment in measuring that baseline, the condition of our habitat and the status of our fish populations, and then that doesn't set us up to measure the effectiveness of any type of management action.
Conservative
Clifford Small Conservative Central Newfoundland, NL
A habitat is something that organisms live in. Are you lumping the fish population in with the physical characteristics or whatnot of the habitat?
Conservative
Clifford Small Conservative Central Newfoundland, NL
If you're protecting habitat, how would you protect habitat on the shelf off Newfoundland and Labrador? What would you be protecting it from?
As an Individual
My expertise is in in fresh water as well, but I would say you'd be looking at protecting the actual ocean floor and water quality around that. Those would be the habitat parameters you'd be concerned about in that environment.
Conservative
Clifford Small Conservative Central Newfoundland, NL
Thank you.
Monsieur St-Pierre, was there a time when fish harvesters with corporations were allowed to form family trusts, that you know of?
Fellow, Chartered Professional Accountant, As an Individual
I've been involved in fishing for over 20 years and no, unless they were grandfathered in 1979. In the crab fleet, for example, there were 12 enterprises grandfathered out of 122. However, no, it's against the fleet separation and the owner-operator policies.