International Trade Committee on May 17th, 2016

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Christian, you mentioned owner-operator policies. Working with your group of fishers, is there any strategy for success in planning in fishing, such as passing that business along to a family member, or protecting it within the Canadian market?

[Christian Brun]

If you will allow me, I would like to speak on this subject. It's a very good question, and I share the concerns that were just voiced.

We have been working for five years now to try to find better solutions that suit fishers, those who wish to leave the industry, and above all those who wish to join it.

There is always a significant turnover. It's strange because, four or five years ago, we were very concerned about fishers leaving, especially fishers' helpers. They went out west to rebuild their lives. Some of them stayed in that region for about 10 years.

Currently, because of economic shocks, there is a return to the Atlantic. There is therefore more interest in renewal in the fisheries, but we can't depend on this good news, which is often sporadic. It depends on economic circumstances. We are working very hard to find solutions that allow families to keep the permits but also, first and foremost, to follow and be mindful of the owner-operator policy and the separation of the Atlantic fleet. This policy is extremely important and crucial to our fishers.

[The Chair, Liberal, Mark Eyking]

Thank you.

Ms. Ramsey for five minutes. Go ahead.

[Tracey Ramsey, NDP, Essex, ON]

Good morning. Thank you for your presentations, both of you. It's fascinating to someone from southwestern Ontario to talk about the east coast and fishing and the importance that has to our economy as well as to the economies of those communities you mentioned.

I think part of the general concern is that people who are working and living in the coastal communities...we know they are working hard to ensure sustainability and fairness around the quotas when we're talking about Canadian waters versus international waters.

Part of the TPP, chapter 20, actually says that we prevent overfishing and overcapacity. Overfishing, we know, is a huge problem globally, not just in Canada, and it has social, economic and environmental implications.

According to Fisheries and Oceans Canada:

While there is much more to be learned about the long-term effects of overfishing, there is ample evidence to support taking a precautionary approach and to ensuring that entire ecosystems, and not just individual fish stocks, are considered when it comes to fisheries management.

Considering that the TPP will include eight of the top 20 fishing nations, what impact will the TPP have on efforts to combat overfishing globally, in our Canadian waters and international waters?

[Christine Penney]

Thank you, Tracey, for the question. It's a very important issue when it comes to fisheries.

Clearwater, as a company, is dedicated to sustainability. We have made multi-million dollar investments in ensuring that we have appropriate science to underpin the management of our fish stocks.

We work quite collaboratively with the Department of Fisheries and Oceans to help ensure that there are specific scientific research studies to look at what sustainable removal levels are in each of our fisheries.

We've also made a significant investment in eco-labelling our products. There is an organization called the Marine Stewardship Council, which is the leading global eco-label. This puts fisheries through a rigorous process of assessment by an independent audit company.

[Tracey Ramsey, NDP, Essex, ON]

Those are all things we're doing now, but what would happen with the signing of the TPP to ensure that those same measures would be protected in our Canadian international waters? We know they butt up against one another. You can't really divide.... There's no division between those waters.

Did you want to weigh in, Monsieur Brun?

[Christian Brun]

I admit that the international waters concern the inshore fishery a bit less. The simple answer to your question is that each sector must do its part to protect the sustainability of our resources.

Concerning shellfish and lobster, which are the most important products in the Atlantic, we really succeeded. The evidence is there. There are historic fishing levels. The fishers themselves made a large number of these sacrifices by leaving lobster in the water in a variety of ways. I will not go through the list of measures that they took, but it's quite remarkable compared to other fisheries both at the international level and in other regions in Canada.

We also respect the precautionary approaches, which we have been using for a number of years now. Shellfish, obviously, are recognized by the Marine Stewardship Council, which is a very important indicator of the sustainability of species.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

Someone by the name of Wilf Swartz from the Nereus program at the University of B.C. has said:

Japan’s seafood market is already fairly accessible, with tariffs for most seafood products at less than 5%....Tariffs for lobster, for example, are currently at 5 percent in Japan....

He says:

Removing that 5 percent barrier won’t change much and it’s doubtful that the TPP will greatly reshape the global lobster market, given that these tariffs are already so low.

Do you think that's correct? If that is the case, what other markets are you looking to get into where we have high tariffs currently around lobster specifically? We'll just focus on lobster.

[Christine Penney]

I believe there remains room for growth and development of the Japanese market. We talked about innovation a little bit earlier. The Canadian seafood industry is constantly innovating. That's a very important element of us being competitive globally.

We talked a little bit about innovation in frozen lobster products. While our business in Japan is primarily in live lobster right now, we do have innovative technologies for frozen lobster that are allowing us to access new and different markets and to expand our business there.

Certainly I think there is continued room for growth, and removal of tariffs is an important component, no matter what level they are at.

[Tracey Ramsey, NDP, Essex, ON]

What would be the next country —

[The Chair, Liberal, Mark Eyking]

Ms. Ramsey, sorry, but we're way over five minutes.

I'll just remind MPs to watch their time. Try to not put questions at the end of your five minutes, because it makes it awkward for the witnesses to switch over.

We'll move over to Mr. Peterson for five minutes.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair. I'll stick to my strict time limit, I can assure you.

Thank you to both of the presenters for being here today.

Mr. Brun, I have a quick question for you, to start off.

You mentioned that in any free trade agreement, something that's non-negotiable to you is to make sure that what I think you called the “unique” regulatory regime in Atlantic Canada is preserved. You referred to it as the owner-operator model.

Can you elaborate on that and on what sort of business model that is?

[Christian Brun]

Absolutely.

There is the owner-operator policy and the fleet separation policy. These seem to be very complicated terms, but in fact, the term “owner-operator” means that the fisher is the owner of his or her own business. Obviously, their family members can work in the business, but the fisher is the owner. Their name is on the boat, and they are the ones who operate it. It remains a property, and it's very close to our communities. There is also an advantage for these communities, because many fishers live there and spend their money there, whether they are spending their money on fishing or on other things. They live in areas that, otherwise, would have very little economic activity. It is therefore extremely important.

The fleet separation means that only the harvesting sector, therefore the fishers themselves, can hold these permits. A company, a dentist in Toronto or someone from the outside who doesn't have a direct link to the fishery cannot hold fishing privileges. Fishing rights do not exist; they are fishing privileges. Don't forget that the fishing industry is not like other industries that exist in Canada. It is an industry where people are owners and where there are shared interests.

Under the law, all Canadians have the right to receive the benefits of these fisheries. That is why it is a sharing of this common property. A fishery is not private property.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that. I appreciate that elaboration.

Is there any component of the TPP agreement that you think would threaten that model, or do you see that model being able to thrive under the TPP if it becomes law?

[Christian Brun]

Based on what we've read and what Fisheries and Oceans Canada told us in answer to our questions, nothing would put those policies at risk. However, we would still like to inject a note of caution, since this issue is so crucial for Atlantic Canada.

Our fears are mostly based on the fact that some of the countries that are part of this agreement, such as New Zealand, have systems that are very privatized and very different. Yet we are hearing that throughout the world those who have opted for greater corporatization, or more privatization, are now thinking of coming back to larger fleets and smaller vessels. That's actually much more profitable for citizens. Big vessels and all that goes with them is all very well and good, but you need a lot of capital and high revenues to make it work. So it's not always the most effective way to conduct the fishery.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Madam Penney, I've spent some time in Halifax, and every time I flew back I stopped at the Clearwater booth at the airport and got the nice carry-on size lobster. It's perfect.

I have just a couple of questions, now that I've made everybody hungry.

You elaborated that you see the Japanese market as still having great potential, even though the tariffs may not be that high now. You also alluded in your opening statements that you're keen to try to tap into the Vietnamese market. Can you elaborate on how you see that happening, and is there more than just the tariffs in the way of tapping into that market now?

[Christine Penney]

I do believe there is significant growth in Asia-Pacific markets generally. The Vietnamese market is actually a fairly small component of our business at the moment, so any removal of barriers would certainly help us to expand our business there.

We do have a sales force on the ground in Asia-Pacific. The growth in the middle class generally in Asia-Pacific is really driving demand for high-value seafood. Canadian seafood has a very good reputation. It's known to be high quality and food safe. This is driving demand in those marketplaces and allowing us to expand our business.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you.

[Christian Brun]

Can I make another observation?

[The Chair, Liberal, Mark Eyking]

Go ahead, sir.

[Christian Brun]

Tariffs for frozen lobster and shellfish are much higher than for live lobster. Eliminating tariffs would be very important, especially for countries like Vietnam, where a high volume of shellfish passes through on the way to China. There are also the Japanese markets. In the east and the west, be it in emerging or developed countries, habits are changing, especially among young people, who usually want to be able to prepare their meals much more quickly. Live products, which take a relatively long time to prepare, and which are not easy to prepare, are often being replaced by frozen products. So there's a lot of potential for all countries that are part of the partnership.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

We're going to move over to the second round and start off with Madam Lapointe.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

Hello and welcome to our witnesses. Thank you for being here today. It's very interesting to talk about seafood, especially seafood from Atlantic Canada. These are excellent products.

Some countries subsidize their fishery. But I've noticed that we still have not addressed the issue of subsidized markets. Would the Trans-Pacific Partnership help to fight against subsidies and overfishing?

Mr. Brun or Ms. Penney, I would like to know what you think about this.

[Christian Brun]

I have a brief comment to make.

The fact that gigantic fleets have been heavily subsidized is a world-wide concern. I have witnessed that myself in certain European regions, where the fleets are made up of huge vessels that look more like war ships.

Obviously, according to us, this has harmful consequences on the environment and the preservation of species across the planet. If we look at the situation as a whole, we can see that it is difficult to maintain and preserve many of our species sustainably.

In my opinion, this is causing countries that have abused or are currently abusing the system to think things over. These countries are trying too hard for bigger is better. And that should also lead to reflection. Have these strategies really worked? Are we dealing with the same problems when we have a small number of fleets made up of gigantic vessels as we had 50 years ago or a generation ago, when there were many more smaller ships and where more people were able to benefit? In addition, these profits remained within countries and were shared among many more people.

Scotland is in the process of considering returning to fleets that are made up of a larger number of smaller ships, in order to distribute the benefits more equally in the fisheries sector.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

Ms. Penney, do you have something to add on the topic of subsidies?