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Proceedings of the Standing Senate Committee on

Issue 3 - Evidence

OTTAWA, Tuesday, April 24, 2001

The Standing Senate Committee on Fisheries met this day at 7:15 p.m. to examine matters relating to the fishing industry.

Senator Gerald J. Comeau (Chairman) in the Chair.


The Chairman: I thank our witnesses for appearing before us this evening. We look forward to your comments. We will accept and retain as part of our records any documents that you may wish to provide to the committee.

I would pass along the regrets of Senator Robertson who cannot be present this evening. She had a previous commitment as a guest speaker at the Moncton Volunteer Centre in connection with the National Volunteer Week.

I would welcome Ms Inka Milewski and Ms Janice Harvey from the Conservation Council of New Brunswick.

Ms Inka Milewski, Vice-President, Policy, Conservation Council of New Brunswick: As President of the Conservation Council of New Brunswick, I thank the committee for this opportunity to appear before your members to provide our comments on the aquaculture industry and the policies related to that industry.

Following my opening remarks, I will review or highlight some of the Auditor General's 2000 report on the effects of salmon farming. Ms Harvey will address some of the environmental assessment processes under the Canadian Environmental Protection Act, as well as public participation and access to information issues.

Included in the information package sent to the committee was some background of the conservation council and a history of our interventions before certain committees, including the House of Commons Committee on Environment and Sustainable Development. It also included our brief to the House of Commons Committee on Fisheries and Oceans, plus a copy of a publication that we prepared in 1997 called "After the Gold Rush: The Status and Future of Salmon Aquaculture in New Brunswick", and a scientific review paper that looked at the impacts of salmon aquaculture on the coastal environment.

The conservation council had its origins in 1969. We are a citizen-based organization with an office in Fredericton. For the last 30 years or so, we have provided comment, analysis and alternatives on public policy issues. We have a long history of commenting on aquaculture issues, beginning in 1990 when the industry was beginning to take off in New Brunswick. We published the first review of the potential impacts that salmon aquaculture could have on the marine environment. We made a number of predictions and, unfortunately, 10 years later, those predictions did come true.

In 1997 we published "After the Gold Rush" and, as I said, we have made a number of interventions and have provided testimony to a variety of federal government committees.

In December 2000, the federal Auditor General, Dennis Desautels, released his annual report. In Chapter 30 of the report, his conclusions on the performance of DFO with respect to its regulation of the salmon farming industry and the management of wild Pacific salmon stock, although the Auditor General did not examine the effects of salmon aquaculture on the management of wild Atlantic salmon and habitat on the Atlantic coast, echo the findings that the conservation council made two years earlier.

In February 1998 we presented a brief to the House of Commons Standing Committee on Environment and Sustainable Development that outlined the enforcement of federal environmental legislation as it pertained to salmon aquaculture in New Brunswick. We identified three issues. One issue was the lack of environmental regulations relating to the aquaculture industry in New Brunswick.

We also identified the lack of enforcement of the general pollution prevention provisions of the Fisheries Act, and issues around jurisdictional responsibility for the industry in the context of an administrative agreement, specifically the Canada and New Brunswick memorandum of understanding on aquaculture development.

At the heart of these three issues was the failure of the federal-provincial agreement on harmonizing the regulation of the aquaculture industry to protect fish habitat and prevent pollution of the marine environment. Specifically, the Auditor General in his report last year concluded, first, that the DFO is not fully carrying out its current regulatory responsibilities to enforce the Fisheries Act with respect to salmon farming operation. Second, that while DFO is engaged in research and working to develop a regulatory framework for salmon aquaculture, there are shortfalls in research and monitoring to assess the impacts of salmon farming operations. Third, DFO has not put in place a formal plan for managing risks and for assessing the potential cumulative environmental effects of proposals for new sites, should the decision be made to expand the industry.

The Auditor General also pointed out that there is a problem with how Environment Canada is carrying out its monitoring responsibility under the memorandum of understanding signed with DFO to deal with deleterious substances.

Overall, the Auditor General stated that DFO is not fully meeting its legislative obligations under the Fisheries Act to protect Pacific salmon stock and habitats from the effects of salmon farming. Fisheries and Oceans Canada has not taken any exceptions to these observations and conclusions of DFO and concurs with the contents of the Auditor General's report.

In our 1998 brief, the conservation council pointed out that the federal Fisheries Act clearly outlines the obligation of DFO to protect fish habitat and, through its agent Environment Canada, to prevent the deposits of deleterious substances. Neither department has taken any initiative to enforce these provisions with regard to the salmon aquaculture industry. No regulations have been written and no performance standards are in place to control the release of contaminants into the marine environment, other than those provided by federal and provincial pesticide regulations.

Only this year, after the industry had been operating for 20 years on this coast, has DFO developed criteria for what constitutes benthic habitat degradation due to fish farm operation. These criteria have not been vetted publicly nor do they exist in regulation.

In justifying its hands-off approach to regulating the industry, DFO stands behind the memorandum of understanding on aquaculture development it signed with New Brunswick in 1989. This administrative agreement, in essence, puts full authority for the management of aquaculture in the hands of the provincial departments of agriculture, fisheries and aquaculture, with DFO playing a science and advisory role only.

As evidence of DFO not meeting its regulatory responsibility under the Fisheries Act, the Auditor General points to the fact that no salmon operator has been prosecuted under the Fisheries Act for the release of deleterious substances which have an impact on fish habitat. Yet, as the Auditor General points out, there is a widely held view within the department that salmon farming in some instances has had highly negative effects on fish habitat. There has only been one prosecution of a salmon farm in New Brunswick, and that was in 1995, by the provincial environment department under the Pesticides Control Act. That followed a complaint made by the conservation council. That involved the illegal use of a pesticide which is highly toxic to organisms such as lobsters, crab and shrimp. The penalty was a $500 fine. The following year, 60,000 lobsters held in the lobster pound mysteriously died. Traces of the pesticide were detected in samples taken from those dead lobsters. Four companies that own the lobsters launched a legal action against several salmon farm operators, DFO and others. The matter was settled out of court and no charges were laid.

The longest study to date on the impact of waste degeneration from salmon farms on bottom diversity has been done in Letang Inlet, New Brunswick. You may have visited that area when in August. Letang Inlet is an area of approximately 86 square kilometres and has the highest number of salmon farms in Atlantic Canada. In fact, it probably has the highest density of salmon farms anywhere in the world.

Monitoring results from 1994 to 1999 show that this area has experienced significant regional loss of benthic species and diversity and a significant increase in nutrient pollution. In 1998, a portion of that inlet had to be fallowed because of an outbreak of infectious salmon anemia. Despite the fact that the area did not have any fish being grown in it, a year later, the benthic community did not recover in the area. Regardless, salmon farms were allowed to re-establish in the bay.

According to the Auditor General's report, DFO acknowledges that it does not have enough information available to assess the risk of disease transfer from farm salmon to wild, and DFO also recognizes that the use of antibiotics in the salmon farming industry is a concern.

The Auditor General also found that DFO is not monitoring sensitive coastal habitats adjacent to existing or potential salmon farms. The Auditor General's report states that DFO is not giving adequate attention to prioritizing research requirements to guide its science program and to foster cooperative research in this area.

This situation is not the result of a lack of funding. Several hundred million dollars have been spent on aquaculture research and development in Canada since 1985 by various agencies, including ACOA, Industry Canada, DFO's industry partnership program, the National Research Council, as well as through federal-provincial funding agreements.

A review done by DFO in 1998-99 on this region of Atlantic Canada confirmed this finding. The annual report lists 154 research projects, 15 to 20 of these projects could be identified as primarily research in examining the impacts of aquaculture on the marine environment. The overwhelming majority of the projects that have been funded to date are in the areas of vaccines, stock development, grow-out techniques, transgenics, disease surveillance, alternative species and so on.

In August 2000, the department announced it would be spending another $75 million over five years on its programs for sustainable aquaculture. This announcement of more funding is no guarantee that DFO will be better able to prioritize its research requirements to ensure that the science needed to support its legislative obligations under the Fisheries Act will happen.

We note that considerable emphasis is being placed by federal and provincial governments on developing alternative species for aquaculture such as haddock, halibut, cod, flounder and sturgeon. The environmental impacts of producing these species in net pens at sea are identical to those associated with salmon farming. The problems associated with salmon farming that I am sure you have heard or read about in some of our materials, problems such as disease transmission to and from wild species, escapement, pesticide and antibiotic use, and the discharge of nutrient species and uneaten food, are also problems that will be associated with any other marine fin fish species grown at sea.

Furthermore, adding more fish farms to areas already saturated with salmon farms will do little to alleviate the environmental problems currently experienced in these areas. Rather, they are more likely to exacerbate the environmental concerns.

I will now pass the microphone over to Ms Harvey.

Ms Janice Harvey, Director, Marine Conservation Program, Conservation Council of New Brunswick: I want to talk about the role of the Canadian Environmental Assessment Act and the agency with respect to aquaculture. This is a new entry in the regulatory and review scene, and we are just experiencing our first go-around with the CEAA review process. Certain issues bear highlighting.

New Brunswick is in the process of reviewing 16 applications for new aquaculture sites. These sites average approximately 400,000 fish capacity per site. There are several site expansion applications, but we are unaware of the number of those because they need not be made public. Thus, we are looking at a significant expansion of the industry in the next few months.

In December 1999, for the first time, new aquaculture operations were required to be registered for review under the Canadian Environmental Assessment Act. This development is due, we believe, to an acknowledgement that these operations are on a major industrial scale and therefore have the potential to seriously impact the marine environment in which they are located. As I say, they have never been subject to environmental assessment.

The conservation council welcomed this development, hoping that the Canadian Environmental Assessment Agency would be a neutral vehicle through which environmental and community concerns could be aired. Over the past few months we have had our first experience with the CEAA process, as at least 12 new site applications have been registered for review. Unfortunately, our experience has been disappointing and discouraging. Aquaculture applications are subject to the least rigorous of CEAA's three possible review procedures called "screening." Screenings are carried out by the lead federal agency, in this case the DFO. We have found both CEAA and DFO to be unwilling to apply the potential of CEAA to address the many public concerns with respect to industry expansion in this area.

The first issue I wish to raise is public participation, which is a key component of environmental assessment. The CEAA Web site states that public participation strengthens the quality and credibility of environmental assessment. The public is an important source of local and traditional knowledge about a project's physical site and likely environmental effects. Through the participation of interested parties, concerns that people have about a project are identified and addressed at an early stage. Public participation also helps build a consensus among different groups about a project's likely environmental effects, or the most effective mitigation measures. Their Web site also states that CEAA advocates high quality environmental assessments by, among other things, ensuring that the public has opportunities to participate effectively in the environmental assessment process.

This language suggests that CEAA, the Canadian Environmental Assessment Agency, which administers the act, has some mandate to ensure effective public participation in environmental assessment. With that assumption, the conservation council and others requested that CEAA and DFO jointly hold two public meetings in Charlotte County to explain how the CEAA process will work for aquaculture applications, and to hear what people have to say about these 12 sites.

The regional director of CEAA, Mr. Coulter, responded to say that the agency does not have the power or authority to determine the specific factors to be considered in the screening, or how the public may be involved in an environmental assessment of a project undergoing federal screening.

DFO refused our request for the meeting despite the high degree of public concern about these applications, the propensity of rural people not to put their concerns in writing and send them to relevant authorities, and the difficulty of responding separately in writing to each of the 12 site applications. In our opinion, simply placing ads in newspapers inviting written response, which is what DFO did, does not meet the spirit of CEAA with respect to public participation.

While DFO may well have the discretion to determine how the public should be involved in the process, we believe CEAA has an obligation to ensure that the lead department reflects and carries out CEAA's commitment to public participation, since their assessment is carried out under CEAA authority.

A related issue that I should like to raise is access to information. While people were invited to send written comments about individual sites to the coast guard within DFO, information about the sites, other than location and potential capacity, is, effectively, unavailable. Without access to project information, meaningful input to federal environmental assessment of aquaculture projects is nearly impossible.

The conservation council made its first request for the information filed by the applicants with CEAA in early March, shortly after the site application ads began appearing in the local newspaper. We followed up a few weeks later with a second request for the same information. In early April we were informed by DFO that all project information filed with CEAA must be vetted through the Access to Information Act and the Privacy Act to determine if it can be released publicly. To date we have received no documentation on any of the 11 sites that were then registered with CEAA, despite the fact that final decisions and announcements on the site are due any day now and the deadline for providing written comments on these sites has passed.

Ours is not the only group that has had trouble with access to information. I just mention briefly the proposal of St. Ann's Harbour and Mussel Farm in Cape Breton. The environmental impact assessment report for that project has been submitted by the company. That is the basis on which the review will proceed and copies have been placed in area libraries for public review. However, that report has been copyrighted by the proponent and photocopying of the report is prohibited. Thus, citizens who want to intervene in the environmental assessment do not have easy access to the long document in order to study it and prepare critiques and questions.

This limited access to a document required as part of a federal environmental assessment process is a fundamentally unfair constraint on public access to information and public participation. I would suggest it would be equivalent to senators having to review all of the reports that they deal with in the parliamentary library and not having the ability to have those photocopied and available at their convenience.

We have also asked for a copy of the legislative review that has been prepared by the Office of the Commissioner of Aquaculture Development within DFO. This we understand was finished last year and has never been released. We made an access-to-information request for this legislative review, and we were led to believe that we would receive it. Only recently have we been told that the Privy Council has intervened to prohibit its release to us. This is typical of the way information about this industry is treated, both at the federal and provincial levels of government.

The third issue with respect to environmental assessment is the cumulative effect of the industry. The conservation council's overriding concern with the aquaculture industry in New Brunswick is the cumulative environmental effect of growing, now, 30,000 tonnes of salmon in a limited area and the prospect of many more in the near future. To date this issue has not been addressed by regulators. The Canadian Environmental Assessment Act states that every screening of a project shall include a consideration of the environmental effects of the project, including any cumulative environmental effects that are likely to result from the project in combination with other projects or activities that have been or will be carried out.

According to the CEAA Web site, regulatory authorities, in this case DFO, must determine appropriate means to satisfy this requirement as part of the screening process. Our concern about this again comes from the Auditor General's report, which states that DFO is currently unable to assess the cumulative environmental impact of salmon farm operations as required by CEAA.

Further, the Auditor General concluded that in their opinion the potential cumulative environmental effects of multiple salmon farm proposals warrant a public review before a decision is made to lift the moratorium, in this case the B.C. moratorium. The same situation exists in New Brunswick.

To date, these concerns of the Auditor General with respect to cumulative effects have not been addressed, nor has a public review been held in either B.C. or New Brunswick.

Those are the fundamental issues that we want to raise this evening. We add this to the information that we have already provided to you in previous briefs. At this point we e have a few recommendations to suggest.

We believe there should be no expansion of the aquaculture industry until the concerns raised by the Auditor General are addressed. This is particularly pertinent with respect to the cumulative effects of multiple salmon operations and the lack of enforcement of the Fisheries Act provisions for habitat protection and wild fish conservation.

The procedures by which aquaculture applications are assessed under CEAA must be reviewed publicly in order that the process meet the dual goals of CEAA, environmental sustainability of the project and effective public participation in the process. Currently, we believe the role CEAA is playing and the approach DFO is taking to project screening is contrary to the spirit and possibly the letter of the Canadian Environmental Assessment Act and its operational policy.

Finally, public access to information with respect to the aquaculture industry must be substantially improved. This is particularly important in the context of the CEAA reviews which are mandated by federal law and should have a substantial public participation component. Without information, public participation is merely symbolic.

That concludes our prepared remarks. We would be happy to entertain any discussion or questions.

The Chairman: Before I go to questions, I have been informed that the legislative and regulatory review is now available. If you have any problems obtaining it, please let me know and we will ensure that you receive a copy. I am informed that the House of Commons committee has just been given a copy. Thus, it should be available any day.

This committee intends to look more closely at habitat protection next fall. We first have to wrap up a few things this spring. As a part of our mandate, we will look at habitat protection in the marine environment, both inland and oceans. It is a subject that is near and dear to the heart of this committee. Aquaculture is only one of the many activities that impact on habitat.

I noted that your report touches on other subjects. We might be able to discuss those further in the fall.

Having said that, I would now move to questions.

Senator Meighen: Good evening to both of our witnesses who I know. I very much enjoyed your presentation. I am certainly not unsympathetic to the concerns you have put forward. I appreciated the three suggestions for steps that can and should be taken to remedy some of the shortcomings that we face today.

It seems to me that the tone of both your presentations is that if DFO and CEAA discharge their statutory responsibilities as they exist, rather than shirking them, in your view we would be a lot further ahead. Is that a fair overgeneralization?

Ms Harvey: I think that is fair to say. Many of the problems we are now dealing with could have been prevented. Had they been prevented, we would not be operating in a crisis management mode, which is how I would characterize where we are today. The industry is in a very tight spot and public opposition to it has never been more intense.

Senator Meighen: We do have a fair number of tools at our disposal, if only they would be used or followed.

Ms Milewski: Absolutely.

Senator Meighen: Do you think there is an inherent conflict between DFO's dual responsibility, as I understand it, to promote aquaculture and to protect wild fish stocks?

Ms Milewski: Yes, we do. We have raised that issue when we first identified problems in the industry, that is, DFO is both the developer and the regulator. It is also a problem we identified at the provincial level. The Department of Agriculture, Fisheries and Aquaculture had the responsibility for monitoring, licensing and developing the industry. We expressed that view at the provincial level and, basically, it has taken us 10 years to have that responsibility separated within the province. The responsibility for monitoring the aquaculture industry is now in the hands of the Department of the Environment and local government. We were successful in achieving that separation, but it took 10 years of pressing to get to that stage.

Senator Meighen: Is site allocation for aquaculture farms the responsibility of the province?

Ms Harvey: At this point, yes. The site allocation process is driven by the provincial Department of Agriculture, Fisheries and Aquaculture. For the first time this year, in this round of approvals, the environment department has had a much more significant role in the decision-making process. I believe, in theory, the provincial environment department could veto a site. However, in practice, I do not think that will happen. Their voice has certainly been strengthened at the table.

Our argument, though, has been that DFO has been shirking its responsibility in the site approval process as it simply turned that over to the provincial government. They have played an advisory role, but we know very well that sites that DFO staff have recommended against have actually been approved by the province. We have urged DFO many times to exercise their veto prerogative with respect to site approvals because they have that fish habitat responsibility and fish conservation responsibility within the Fisheries Act.

Senator Meighen: I do not mean to be picky, but are you satisfied that, legally, they do have that authority?

Ms Milewski: Absolutely. In fact, the Auditor General has also alluded to the notwithstanding clause in the memorandum of understanding between the province and the federal government. It states that DFO has ultimate authority for the Fisheries Act.

Senator Meighen: In your opening presentation, you mentioned that a good number of site applications were being reviewed, and you said that you deplored the lack of public input into process and that you were worried that there would be a blanket approval. Is that correct?

Ms Milewski: Yes, it is. Because the public does not have access to the information that proponents are providing to the province, we cannot judge the veracity or the robustness of the scientific information that is being provided by the proponents.

Senator Meighen: When I was in New Brunswick over Easter the newspapers were full of the fact that all but one of a series of applications for sites had been turned down.

Ms Harvey: We are now somewhat concerned about blanket approvals for that very reason. Sixteen site applications were made. A decision was made on six, and nine are outstanding. Of the six, five were rejected and one was approved. We understand that a few of those rejected applications were related to sites that had been rejected in the past and should never have been applied for again.

In any case, we were heartened, I guess, to see that there seemed to be a greater degree of rigor in the approval process this time around. Again, because we have no access to the information, we do not know the basis on which the site was approved, or that the sites that were rejected were actually rejected.

We are also concerned that the outcry from the industry has been so extreme over those five rejected sites that, in fact, some of those applications are back on the table. We are worried that the same kind of rigor that we assume was in the process for the first six, may not be applied to the next nine in order to appease the industry to some extent.

We are not convinced at all that the politics have been removed from this process, and it remains to be seen, I guess, whether the province will buckle under to the pressure.

The other issue that relates to those approvals is that the province made the announcement on those six sites without receiving the conclusions of the DFO environmental assessment screening. Thus, it appears that the left hand does not know what the right hand is doing. There is a lack of communication between the two levels of government. We are generally very unhappy with the way the federal screening and the new provincial approval process have been happening. The acquaculture industry is equally upset about it. You would find us in agreement about how badly this current round of approvals and assessment screenings have been handled.

Senator Meighen: Both of you have been very active in the environmental movement for years and have a pretty wide spectrum of knowledge in this area. Could you give us some idea of the seriousness of the situation as you view it, in respect of current levels of production in the acquaculture industry vis-à-vis other forms of pollution that we are contending with, whether it is from pulp mills, power plants or whatever? Are we dealing with a very serious, large-scale problem, or are we dealing with a geographically limited problem? If regulations were properly applied, could it become a sustainable and environmentally benign industry that we could all enjoy the benefits of without suffering the consequences to which you have alluded?

Ms Harvey: That is a very good question. Worldwide - in virtually every place in the world - coastal environments are seriously degraded because they have been the recipients of well over 200 years of industrial activity.

While the Passamaquoddy Bay in the Bay of Fundy area has not seen the scale of development that you might have had in New York harbour, when you consider the impact of discharges to the marine environment, you have a sense of what the capacity is of that environment to receive those wastes. That is called the "assimilative capacity." In the case of Passamaquoddy Bay, where most of salmon aquaculture in Atlantic Canada is concentrated, we know there are two areas that are, what we call, "depositional areas." That means that whatever waste is produced will basically remain there. Passamaquoddy Bay and the Letang Inlet have also been recipients of waste from a variety of other sources, municipal sewage, pulp and paper mills and fish plants. We are seeing the cumulative effect of, perhaps, 100 to 200 years of waste discharges into these environments. Aquaculture is the latest source of wastes that is being deposited in these environments.

In my view, these environments were already in quite a precarious state of health. The addition of the aquaculture industry and its discharges - and we are viewing this from a scientific perspective - have led us to see that these environments are suffering. They are not healthy.

Letang Inlet is not healthy, and it is losing its biological diversity. Last year, for the first time in a long time, the Passamaquoddy Bay area saw massive algal blooms that killed, on two separate occasions, 13,000 salmon in one farm and 10,000 salmon in another. These algal blooms are a function of the nutrients that have been discharged into the marine environment. They exceed the tolerances of that environment.

To answer your question, worldwide salmon acquaculture is the last straw for many coastal environments. It presents problems around the world, and it is a problem that is growing. We foresee problems virtually everywhere that it is taking place.

Ms Milewski: I will just mention a comment made by one of the most active researchers in this area, with respect to the environmental impacts of acquaculture. He makes it clear in a letter that was published in The Saint John Courier that scientific evidence indicates that acquaculture is by far the greatest source of organic pollution in this area. Today it exceeds other sources by a great amount.

When the industry started we were looking at a few sites where, perhaps, 30,000 fish were raised. Today, a 300,000-fish site is a modest size. The average number of fish on the new applications was about 400,000. There are sites that will approach 1 million fish.

We are talking about industrial scale feed lots for fish. These are not equivalent to small family farms. We are looking at a scale that far exceeds our original vision of this industry. That expansion has largely been unexamined. We have to understand that there are limits to growth, that is, the marine environment has a limited capacity to absorb the waste from these operations.

The following is a statement by Dr. Gerhard Pohle of the Huntsman Marine Science Centre. He was referring specifically to an industry fact sheet from the Canadian Aquaculture Industry Alliance when he stated:

The misrepresentation and exclusion of scientific evidence demonstrates an apparent unwillingness on the part of the industry to face up and deal with issues in a responsible manner. We need an open, proactive, precautionary and cooperative approach...not a return to defense tactics remniniscent of the tobacco industry. I wish to make clear, I am not an opponent of aquaculture, but support a sustainable industry that acknowledges and respects the natural finite limits of our marine environment. The first step to reaching this goal - is admitting there is a problem.

I emphasize this idea of the natural finite limits of our marine environment. DFO has not yet, with all of its research in this area, determined how many fish can be grown in this region of the country without degrading the marine environment. Yet, we are still putting more fish in. There is that capacity problem.

This is a two-part answer to your question. Yes, if the existing regulations and policies were properly implemented, we would not be in the trouble we are in. However, we also have to acknowledge that there are limits to growth - natural finite limits to the marine environment beyond which it cannot absorb more. Therefore, we cannot assume that the industry can expand indefinitely in the future.

The Chairman: Ms Milewski, did I hear the word "algae" bloom?

Ms Milewski: Algal bloom. In the marine environment, there are two categories of plants, microalgal, which is phytoplankton, and macroalgae, which is the seaweed you see in intertidal areas, such as rockweed and kelp. The microalgal, and in short form we simply say algal blooms, are microscopic phytoplankton plants. There are two categories of these phytoplanktons. One group is called diatoms and the other is called dinoflagellates. The diatoms are the nutritious phytoplankton. The dinoflagellates are largely responsible for red tides and toxic blooms. What we saw last summer was a bloom of this dinoflagellate algae that was causing the mortality of the fish.

Senator Carney: I confess that of all the people around this table I know the least about the New Brunswick industry, coming from British Columbia. As well, for some unknown reason, I have never seen any more of New Brunswick than the Moncton airport. I know the territories, I know the other provinces, but I have never actually had the chance to visit your wonderful province so, in fact, what you are telling me is extremely important.

I would note that, even though you are on the other side of the country from British Columbia, the problems you identify are similar and parallel to the those that are identified in the British Columbia aquaculture industry. I am talking about the lack of information on the cumulative effect of aquaculture. In one place in British Columbia, we were told that the pollution from net farms equalled the sewage outlet of one medium-sized city on the coast. There are other similarities in the lack of enforcement of regulations and the lack of science as it relates to the conflict with wild species. You could be talking about British Columbia.

Can you give us a sense of the scale of the industry in New Brunswick vis-à-vis B.C.? I do not expect you to be experts on B.C., but I do not know whether your industry is comparatively large or small compared to the industry in B.C.

Ms Milewski: The B.C. aquaculture industry is much larger than the aquaculture industry in south-west New Brunswick. Our production is about 30,000 metric tonnes, and the estimated value of the industry is approximately $200 million. On the West Coast, the industry is valued at about $500 million to $600 million, and it can be scaled up from there. I would say that their industry is probably 120,000 metric tonnes, but I am guessing.

Senator Carney: Senator Meighen asked you, in a typical lawyer's fashion, whether, if the regulations and the legislative framework were enforced, it would go a long way to solving the problems. Are the tools we have sufficient? You pointed out that there are limits to growth, but are the regulatory tools and the legislative framework sufficient, or should something else be considered?

For example, in British Columbia, it has been suggested that we should go to closed, on-land systems for aquaculture. I do not know if that is similar to New Brunswick's position or not.

Ms Milewski: Closed containment systems would certainly reflect the true cost of production to the producer. Right now, the producer basically gets free rent in terms of water that is made available. The producer does not have to pump the water or deal with waste. However, if we transfer this industry to the land, then the producer would have to bear those costs and we would see a real price restructuring of the whole industry. You would not be able to buy salmon in supermarkets for $4 a pound.

The industry will tell you that the technology is not available. I believe it is a chicken-and-egg issue. If the regulations were enforced, and if better regulations were put in place, then the industry would be forced to develop technology. There is nothing like a regulatory stick to hasten technological development. It certainly happened in the pulp and paper industry. When standards for emissions and discharges were set, the industry had to figure out a way of dealing with that. The same would apply to the aquaculture industry. If the industry were required not to discharge its waste, in a couple of years I am sure the technology would be in place. They would then have to figure out a solution and that would go a long way to improving environmental conditions.

Ms Harvey: We have certainly stated that any new expansion needs to go on land in closed containment systems because the marine system simply cannot take any more. To get to the point where the existing industry is not polluting, you are looking at some sort of closed containment system, whether it is on land or a flowing system.

We have worked through a number of iterations of what needs to be done. After 10 years, we are at the point of saying that it seems the only solution is a closed containment system.

We are very interested in the project that is now going on in B.C. A new closed containment system has only recently been announced and we are anxious to see how that works. As Ms Milewski says, if the regulations are in place to drive technological improvement, it will happen.

Senator Carney: Could you give us more information on the B.C. closed containment system? I am not familiar with it.

Ms Milewski: Perhaps the best organization to provide that information would be the David Suzuki Foundation. I saw a presentation on the system. It is a closed containment system at sea. Apparently, it recycles the water that is in the system and there are no discharges from the system at all. That is all I can tell you. Unfortunately, I do not have the details.

Senator Carney: That is very helpful.

My last question concerns the conflict between wild stock and farmed fish. Probably the single biggest issue in British Columbia is the conflict between fish farms located in the migration routes of wild fish, as well as the impact of escapees from the net farms into streams that are the spawning areas for wild fish. It is a concern of First Nations on the B.C. coast as well. Naturally, First Nations settlements are located on the wild fish migration routes. Is this as big a deal on the Atlantic coast as it is for us?

Ms Milewski: Yes, it is.

Senator Carney: Do you think these two fisheries are compatible? Do you think they can both be developed in a sustainable way?

Ms Milewski: In the case of New Brunswick, of course, we are dealing with Atlantic salmon. You may not be aware of this, but in the Bay of Fundy the Atlantic salmon is virtually reduced to a handful of fish. We are counting those Atlantic salmon on our fingers and toes.

As to the interaction of farmed Atlantic salmon with wild Atlantic salmon, we know that disease transmission has taken place from farm to wild. Scientific research has looked at the ecological impacts, and that is something that needs to be considered further.

The commercial fishery for Atlantic salmon in the Bay of Fundy was closed in 1982. The salmon stocks in the Bay of Fundy have been in trouble ever since. This problem with the interaction between wild and farmed has exacerbated the already precarious state of the wild fishery.

Ms Harvey: Two other fisheries, herring and lobster, have found themselves in a conflict here. The herring fishery has been successful in having some exclusion areas identified in our coastal zones because they are important herring production areas. That was the result of extreme pressures on the industry from new salmon sites.

Currently, the lobster industry, which is the bread and butter of the fisheries in this area, is vigorously opposing these 16 new site applications. In certain areas, the lobster industry has demanded that no new sites be set up. They are threatening to take the matter to court if the government allows any new sites to open. We are talking about these sites going into important nursery and juvenile areas for lobster, as well as major lobster fishing grounds.

Apart from habitat damage that can happen, physically you cannot have both industries in the same place. If you are opening salmon sites which will get bigger and bigger, you are physically removing those grounds from the lobster fishery. You cannot put a lobster trap in the midst of a salmon farm. The trend has been the constant removal of fishing grounds. First, it was scallops; then it was herring; and now it is lobster. Basically, the fishermen are up against the wall and they are saying that they just won't take it any more.

Never has the conflict been so intense between the commercial fishery and the aquaculture industry as it is right now when we are looking at this major expansion. Essentially, it is the lifting of a moratorium, as it is in B.C.

Senator Carney: There is talk in B.C. of another 200 sites. I have to thank you for mentioning CEAA. I had never heard of CEAA while considering the B.C. sites. You mentioned something I had not thought about, that is, whether or not the B.C. sites are being subjected to review. Because there is a moratorium they probably have not been reviewed. However, it is something we should note.

To sum up your last point, would it be accurate to say that, as presently managed, it is incompatible to have a wild fishery and an aquaculture industry? They are on a collision course with the development of industrial feed sized lots, are they not?

Ms Harvey: It is a scale issue. The aquaculture industry is simply taking up too much space. It is infringing too greatly now on the existing traditional fisheries. Since they each require physical space, there is only so much you can do.

Our position is that the problems the industry faces is all a matter of scale. If it were a smaller industry and if there were fewer sites and fewer fish being grown on those sites, you would not see the problems we are seeing now. It is an expansion issue, with the sense that the industry does not acknowledge that there are limits to its growth.

Senator Carney: Because B.C. has 25,000 kilometres of coastline, people think we have endless opportunity to expand. The fact is that the best place to farm fish is where the wild fish like to hang out, too, and where the First Nations are located. If you think of it in those terms, we have definite space constraints.

Senator Mahovlich: When I visited British Columbia, it was explained to me that because Chile and Norway were doing so well in aquaculture, Canada got into the game and created more competition. Is that your understanding of the industry?

Ms Milewski: The industry began in Norway and spread to Scotland and Ireland. Canada picked it up in the late 1970s. In 1978, the first salmon farm went in near Deer Island here in southwestern New Brunswick. Basically, the industry did not take off here until 1985. The U.S. got involved in salmon aquaculture a little later than we did. B.C. followed.

The industry in Chile evolved. Part of the reason for that was that some of the bigger corporate players in the industry in southwest New Brunswick went to Chile with a view to establish farms there. They did this because their corporate strategy was to develop further and, perhaps, because the regulations were probably a lot less rigorous in Chile.

Salmon aquaculture is now taking place in New Zealand and Australia. It is also moving into Russia in a big way. The next big step for the major corporate players is to develop salmon aquaculture in Russia.

The market is saturated. You have to be a big player now to get a return on your investment because margins are so small. What is driving the push for more sites is that, somehow, DFO has this dual mandate to develop the aquaculture industry as well as to regulate it. It has emphasized development rather than regulation.

Senator Mahovlich: If we want to remain competitive, it will be difficult to control this industry. Being a free country and wanting people to invest in this industry, we will have a political problem. Do you agree with that?

Ms Milewski: My understanding of the aquaculture industry is that it is now largely concentrated in the hands of five or six big transnational companies. The original model that was conceived for Canada was to somehow give fishermen who are no longer fishing an opportunity to continue to work on the water and to have little fish farms. That worked for maybe two or three years. Rather quickly, that model was proved to be not economically viable because there was so much competition and a glut worldwide. The prediction is that in 10 years there will be 2 million metric tonnes of farmed salmon being produced worldwide. It is unreasonable for Canada to suggest that it will be a force in that market.

As I said previously, the aspect that troubles us is that this model of going to aquaculture is being applied to, say, cod or haddock. The aquaculture industry was started in Canada to take the pressure off the wild stock in Atlantic Canada. Since wild salmon and wild cod were not being caught, the decision was made to farm them. It was believed this would allow wild cod and salmon to recover. However, we have had a moratorium on Atlantic salmon since 1982 and the stocks keep dropping. Therefore, aquaculture is not a panacea, it is not a solution to what ails the traditional wild fishery. We have not had the discussion in this country about when we gave up making sure that there would be wild traditional fisheries in the future. Why are we simply dismissing them in favour of aquaculture? This needs to be addressed.

Senator Mahovlich: I believe that is a worldwide problem.

The Chairman: In response to a question asked by Senator Mahovlich the response was that Norway had been involved in aquaculture before Canada, which is partially true. In fact, Norway has received aquaculture information from Canadian research. Canada began aquaculture research in the last century but we had not applied it here.The research was applied quite extensively in Norway before Canada became involved in a big way.

Canada is a signatory to many international agreements that call on members to use the precautionary approach to dealing with such matters as aquaculture. The Rio agreement comes to mind. It seems to me, judging from what we hear, that we are not taking the precautionary approach to aquaculture. Would that be a fair assessment of how we view aquaculture?

Ms Harvey: I believe the industry is being run by crisis management. That is not good for the industry, and it is not good for the traditional fishery. It is not good for the environment or for concerned people in coastal communities who see all kinds of residual impacts of the industry.

In New Brunswick there has been an operating assumption that more is better, therefore, the priority is to simply expand as fast as possible, and the job numbers are all rolled out. That has led to several serious disease problems in New Brunswick. The figures as of last June - and I believe they have been updated but I cannot verify them so I will only speak to these - is that we have spent $40 million of taxpayers' money over two years compensating New Brunswick salmon farmers for ordered fish kill because of serious disease problems. Before that there was a serious outbreak of sea lice, which cost the industry tens of millions of dollars.

These crises that have occurred along the way are driving change, and because it is crisis driven, it is just not working well. As I mentioned, this whole CEAA screening business of this year has been a fiasco for the industry, for environmental groups trying to get involved, and for concerned citizens who just want to know what the heck is going on. Everyone is in a turmoil and it is a disaster in terms of management.

Had we been operating with a precautionary approach, much of this would have been prevented, that regulation would have been in step with the industry, that science would have been in step with industry, and that the traditional fishery would have been figured in beforehand. It is like the Keystone Cops here, with these 16 new sites coming in and everyone tearing their hair out. There is equal frustration on both sides of the table.

The Chairman: Do the 16 new sites include the expansion in order to have various age-class salmon segregated? My understanding is that some of the various age classes were too close together, so some expansion space has been requested by the industry. Am I confusing the two at this point?

Ms Harvey: That is a good question because that is part of the present confusion. Some growers had single sites and assumed that they would be given preferential treatment in this new round of approvals so that they could separate their year classes. However, the government did not restrict it to that, so anyone who wanted more sites applied. Now you have this confusion in the industry wherein company A, which has six sites, is treated the same as company B, which has one site. No one seems to know why that is so. Had the process been clearly one of allowing new sites to those farms that have one site now and allowing separate year classes, this problem would not have arisen.

All companies were allowed to apply, so you have big companies fighting for sites. They are applying for one, two, or three extra sites. The little guy is scared to death. They are all paying anywhere from $20,000 to $40,000 to file these site applications because they have to hire consultants to do a lot of work for them. The situation is a complete mess.

You asked whether you had confused the issues. No, it is all there in one big ball and no one is making any distinction. That is part of the Keystone Cops scenario.

The Chairman: Senator Mahovlich raised the issue of other countries being in competition with Canada and salmon being produced worldwide. It appears as if Canada wants to be a part of the action. What comes to mind in that regard is the fact that Alaska does not allow any kind of aquaculture. I understand that they are now marketing some kind of organic salmon. Of course they still have a commercial fishery, which we do not in Atlantic Canada.

Obviously, a closed system of raising salmon cannot compete with Chile or Norway, or any of these other countries, but could a closed-loop system of raising salmon produce a type of organic salmon? Obviously, those stocks would not require the kind of medicines and inoculations that sea-raised salmon need. Could that be considered for Atlantic salmon in Canada? You mentioned that there is no such thing as a commercial salmon fishery in Atlantic Canada now. Would this be a niche area that our aquaculture farmers could get into?

Ms Milewski: It is truly a move with foresight and prescience on the part of Alaska to declare salmon farming incompatible with its wild fishery. That is a remarkable decision to make when everyone else believes that aquaculture is the answer to declining numbers in the traditional fishery. In Alaska they claim that they will manage their traditional fisheries much better. We think that is a better approach.

The second part of your question is interesting. I was in Washington, D.C. last month at a meeting of individuals interested in discussing the salmon aquaculture and the aquaculture industry in general around the certification of salmon. The general thinking is that certification of farmed salmon, if it is to be called an "organic product, " is unlikely. Even if you could take the salmon out of the water and place the farms on land, which would probably reduce the need for some of the pesticides and antibiotics and reduce some of the stress, there is still the problem of tremendous numbers of wild forage fish, such as herring, that are ground up for meal to feed to farmed salmon. An organic label would presume that this cost of grinding up good fish into meal would really not be sustainable. There is also a cost to some other eco-systems when those wild forage fish are removed for that process just to provide someone in the Northern Hemisphere with farmed salmon. It is incompatible with the basic notions associated with organic products.

The other issue associated with that, and it was discussed, relates to concentrates, that is, the quality of fish meal and what it contains. Apparently, the FAO is undertaking a study of fish meal and fish oils, because there is concern about the high concentrations of certain organic chlorines, such as PCBs, that end up in the meal that is fed to salmon and that are accumulating in salmon. There is a consumer health issue associated with that.

The certification of salmon as being organic, or green, is a long way off. I do not know if it will be supported by environmental groups, because there are such problems associated with farming fish.

The Chairman: My understanding is that Alaska is, in fact, practising a kind of enhancement program that is not as pure as some of us would like to believe. However, the program is likely an improvement over the system of sea-raised salmon pens. Have you done an assessment of this kind of sea ranching to determine if it is organic?

Ms Milewski: I do not know enough about that to comment. However, I would like to add one more point about Alaska and its proactive fisheries policy. Two or three, perhaps even four, years ago now, there was a proposal in the Bay of Fundy area to apply for an experimental licence to harvest krill. The krill was to be used as an additive to fishmeal for the salmon aquaculture industry. Fishing communities, fishermen and many other groups decried this action. Krill is considered a forage fishery. Alaska has a forage fish policy that prohibits the harvest of forage fish species like krill because these species are so important in the food chain and the survival of traditional fisheries.

The Chairman: You did not mention shellfish. Has the Conservation Council of New Brunswick any views on shellfish to pass on to us?

Ms Milewski: Again, shellfish is a scale issue. I am involved in providing advice to some citizens who are concerned about the mussel culture operation that will be the largest in North America.

The Chairman: That operation is at St. Ann's harbour.

Ms Milewski: It is 1200 acres, and is proposed for St. Ann's harbour in Cape Breton, which is about 5,000 or 6,000 acres. A 1200-acre mussel farm will, as you can tell, occupy a considerable amount of space. On that scale, mussel shellfish farming has got to be a concern, whereas small shellfish farms are not a problem.

Again, to assess the impact of an aquaculture, whether it is finfish or shellfish, you have to look at the receiving waters and the receiving oceanographic conditions. A problem associated with shellfish farming is the bio-invaders - biological invaders. For example, spat might be collected from PEI or imported from Europe and transported in and grown in PEI or in Cape Breton. Settling into that would be very small larval stages of many different organisms. Some people believe that is how the green crab, which is such a pest now, came into Canada.Codium, which is a seaweed, is now in the Northumberland Strait. It originated in Japan, spread to Europe, to Northwest and Northeast United States, and it is making its way up into the southern area of the Gulf of St. Lawrence. This inter-regional transport of these bio-invaders could have huge ecological and economic impacts.

Senator Meighen: You certainly have a grasp of the issues. We talked about other jurisdictions which, obviously, may have other ways of dealing with the problems that we discussed tonight - Alaska being the best case in point. Are there any other jurisdictions to whom you would give reasonable marks? Other members of the committee may not be familiar with the geography of the area in which you are located. As I understand it, most of the fish farms are on the northern end of Vancouver Island.

The fish farms in the Bay of Fundy and Passamaquoddy Bay are adjacent to the State of Maine. Obviously, we have no control over what happens in the State of Maine, but the fish do not know that, and they can swim a few hundred yards and enter Canadian waters. What is the situation in the State of Maine with respect to regulations governing aquaculture or the importation and raising of exotic species - non-Atlantic salmon for example?

Ms Milewski: My understanding is that there are state regulations and there are federal regulations. At the federal level in the U.S., they are beginning to look at the effluent discharges from aquaculture operations. Recently, because of the precarious status of Atlantic salmon in the State of Maine, they listed the salmon as an endangered species.

Adjacent to us in Passamaquoddy Bay, near St. Andrews, is possibly the highest concentration of salmon farms in the United States. The concentration is probably much greater in terms of actual number of fish per metre. As well, there is salmon farming taking place on the West Coast.

The State of Maine is learning from us. The system is not as tightly regulated, as well regulated, or any better regulated than it is in Canada, although they have certain importation restrictions just as we do. I understand that the importation restrictions can be quite loose in Canada.

Ms Harvey: There is one significant difference in Maine which is that there is a public hearing for every site application. There is a permit process that requires public hearings and allows citizens to participate. We have never seen anything like that in Canada. It can be fractious and inconvenient for the proponent, but regardless, that is the way of the process in the U.S. The citizens have the right to stand up at a microphone and voice their concerns and opinions. That public process has tempered the location of certain sites and the expansion of the industry. Not too far down the coast are vacation areas, and many coastal landowners are not terribly amenable to that kind of industrial activity occurring just off their docks.

In any case, the public hearing and permitting process in Maine is far superior to what we have in place in terms of actual input to decision making.

Ms Milewski: Another recourse available in the United States - and it has been exercised recently - is taking the EPA or the farmer to court over the issue of discharges. A court case is currently pending, I believe, where the fish operator has been charged with not obtaining a permit, and the EPA is being held accountable for not issuing a permit. In Canada, that process has actually been attempted - to take a particular farmer to court - on the West Coast. However, that prosecution was stayed by the provincial and federal governments. I believe that a lawsuit would go a long way to moving people forward on this issue.

Senator Meighen: Is there another jurisdiction where they are doing a better job - Iceland, Russia, Chile, Norway?

Ms Harvey: I do not want to suggest that British Columbia is doing a better job, because I know that the same problems exist there, but I have seen some of the proposed provincial controls on the industry. They are more comprehensive than those on the East Coast. I am not sure whether those measures are in place, but certainly, the discussion in B.C. at the provincial level is much further advanced than it is on the East Coast.

Norway has experienced many of the same problems that we have experienced, but much sooner. Therefore, their policies governing aquaculture are much more advanced. They have much greater separation distances between sites, and so on.

From a policy point of view, Norway is probably the most advanced because they have the oldest industry. They experienced all of these problems 15 years ago, and they are now on firmer ground.

Ms Milewski: They are, however, constantly dealing with new issues. It seems to be an issue that is reactive and not proactive.

Senator Carney: Thank you. I should mention that the krill problem is the same in British Columbia. The harvesting of krill to feed the farm fish is interfering with the food chain for the herring and, therefore, for the wild fish.

In listening to your description, it reminded me of the megastore type of business that gobbles up the small stores and spits them out into bankruptcy. We see glut, overproduction, and then we wait to see what emerges. I think that one of the key questions that you raised tonight and that we have not heard discussed before, is: "When did we give up on the wild traditional fishery and decide that the future of the fishery lay in aquaculture?" It is useful for us to revisit that assumption.

The Chairman: Your contribution will be extremely valuable to us as we conclude our study on aquaculture. We expect to complete our report by the end of June.

I would ask that the material from the Conservation Council of New Brunswick be noted as an exhibit of this committee. Is it agreed?

Hon. Senators: Agreed.

The Chairman: The clerk will distribute a letter from the minister regarding research by the department on the intermingling of wild and farmed stocks. I would ask that this letter also be noted as an exhibit of this committee.

The committee adjourned.

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