Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 3 - Evidence, February 8, 2005
OTTAWA, Tuesday, February 8, 2005
The Standing Senate Committee on Fisheries and Oceans met this day at 7:05 p.m. to examine and report on issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans.
Senator Gerald J. Comeau (Chairman) in the Chair.
[English]
The Chairman: Welcome. In October 2004, the Standing Senate Committee on Fisheries and Oceans was given an order of reference to examine and report on issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans. Earlier that year, in March, the Minister of Fisheries and Oceans, the Honourable Geoff Regan, issued ``A Policy Framework for the Management of Fisheries on Canada's Atlantic Coast,'' billed as ``the first comprehensive framework to guide fisheries management on Canada's East Coast.'' In May 2004, a Joint Task Group on Post Treaty Fisheries released their report entitled ``Treaties in Transition.'' Commissioned by the federal and provincial governments, that report proposes to fundamentally change the way in which fisheries are managed in British Columbia.
The Honourable Geoff Regan became Minister of Fisheries and Oceans in December 2003. He was reappointed minister in July 2004. Minister Reagan last appeared before the committee in April 2004. Minister Regan, although the committee's mandate relates to policy framework, please feel free to touch on other areas in respect of Canada's fisheries. I understand that a number of your colleagues are here today as well. Please proceed.
Hon. Geoff Regan, Minister of Fisheries and Oceans: It is a great pleasure to meet with you this evening. I am joined by my Parliamentary Secretary, Mr. Shawn Murphy, who will provide an update on our progress with Canada's Oceans Action Plan and by departmental officials, including Deputy Minister, Larry Murray; Assistant Deputy Minister, David Bevan; Commissioner of the Canadian Coast Guard, John Adams; Assistant Deputy Minister, Wendy Watson-Wright; and Assistant Deputy Minister, Sue Kirby. I believe that you have met them on previous occasions. I am joined by other officials as well to help me answer your questions.
When we met last April, I outlined my vision for Canada's fisheries and oceans sector to ensure sustainable development and the safe use of Canadian waters, by working with Canadians. Translating this vision into reality means changing the way in which my department conducts its business on a number of fronts. I set out an ambitious agenda for reform with a number of priorities in a number of areas. Tonight, I will give you a sense of the direction that we are headed in and some changes that Canadians can expect.
I would also like to take this opportunity to extend a word of thanks to your committee for the work it has done. I place a high value on your advice, as I do on the advice of the standing committee of the House. For example, I received your recommendations on Nunavut's fisheries. I appreciate your efforts in that regard. While official response from the department and me will come next month, I thank you now for your hard work in preparing the report. Your passion for Canada's newest territory shines through on every page. You deserve a salute for that. My officials are working hard to respond to your recommendations, and I look forward to seeing the final outcome.
It is no exaggeration to say that Canada's fisheries are at an important crossroad. In 2003, Canada's total production of fish, both wild and in aquaculture, hit $2.9 billion in value with exports worth some $4.5 billion. Yet this billion-dollar industry faces some serious challenges. I will talk to you about some of these challenges and what we are doing, as a department and as a government, to meet those challenges.
My first priority, as you will recall, is overfishing. It is a particularly high priority for me and for the Prime Minister, Paul Martin.
[Translation]
During the past year, I have visited a number of fishing countries to discuss that issue and find ways of implementing changes right now.
The Prime Minister is also interested in this issue. We have talked with a number of world leaders and we urge them to work together and with Canada to put an end immediately to that pilfering of global fish stocks.
Last year, we took a range of important steps to fight illegal offshore fishing, particularly on the Grand Bank. We invested over $45 million over five years to expand our control and monitoring programs in the regulated area of NAFO and to find ways to deal with overfishing in cooperation with our partners.
With more tools than ever before, we are sending a clear message to foreign fishing boats: ``Canada is watching you closely and overfishing will not be tolerated.''
[English]
I am happy to report that our efforts are making a difference. Clearly, expanding air surveillance, patrol presence and vessel boardings in the Northwest Atlantic Fisheries Organization, NAFO, Regulatory Area was an important and visible first step in our strategy. In 2004, we increased our presence on the water by 52 per cent from 2003. We conducted over 2500 hours of aerial surveillance. Our at-sea boardings and inspections increased by 51 per cent from 2003. Citations totalled 15 in 2004 as opposed to 22 issued in 2003. In short, we are conducting more inspections and seeing, as a result, fewer violations.
The recently created Advisory Panel on Sustainable Management of Straddling Fish Stocks in the Northwest Atlantic is another key initiative that supports Canada's strategy. Chaired by Dr. Art May from Memorial University, the panel will provide recommendations to address short-term and long-term fisheries governance issues in the NAFO regulatory area. All options are being considered and that includes custodial management. I am confident Dr. May and his team will put forward a number of concrete solutions to help protect fish stocks.
Over the coming year we will continue to build support among the fishing nations of the world to protect and rebuild international fish stocks for future generations. In fact, Canada will host an international conference on this very issue in May in St. John's. This will be an excellent opportunity for the fishing nations of the world to discuss ways to halt the pillage of our oceans and ensure a brighter future for our fish stocks.
My second priority is the Canadian Coast Guard. Comprising half my department's budget, Coast Guard issues demand much of my attention and all the attention of the commissioner, of course. With Canada's waters busier than ever the Coast Guard's capacity is stretched to its limits. In December 2003, the Prime Minister announced the Coast Guard would become a special operating agency within the Department of Fisheries and Oceans by April 1 of this year. To chart a course for the future, the Coast Guard is modernizing its operations to focus on its core activities while continuing the valuable services that Canada's marine community has come to expect.
I am committed to seeking funding for this important Canadian institution. I know that your committee and the House committee share my concerns on this. On a number of occasions, I have made the case to my cabinet colleagues that the Canadian Coast Guard needs investments. I am hopeful that my efforts will bring results. A strong Coast Guard is needed now more than ever. I am looking forward to working with Commissioner John Adams and his team to give this key Canadian institution the tools it needs to do its job.
The third priority I want to mention this evening is Canada's Oceans Action Plan. I want to turn the floor over to my colleague Mr. Murphy to outline our progress on this issue.
Hon. Shawn Murphy, Parliamentary Secretary to the Minister of Fisheries and Oceans: Good evening. It is a pleasure to join you here this evening at this meeting. As Minister Regan mentioned I would like to update you on Canada's Ocean Action Plan. The Prime Minister has asked me to deal with its development.
As you are probably aware, Canada's oceans are busier than ever. Traditional industries like the fishery and shipping are being joined by aquaculture, oil and gas development, cable and pipelines and tourism. Managing all this activity while protecting our oceans now and for the future is the challenge the Oceans Action Plan wants to address.
Quite simply, the plan represents a government-wide approach to maximize the opportunity that our oceans have to offer while increasing our efforts to manage them wisely and sustainably. It also represents a real opportunity for our coastal communities. In the Speech from the Throne, the government indicated that the plan must increase regional economic development opportunities. Using the plan's collaborative integrated management approach, we can address user conflicts, ensure a healthier environment and take full advantage of the economic opportunities our oceans offer.
When we last met in April, I outlined the plan, its vision and what Canadians can expect from it in the years to come. The plan is built around four pillars: international leadership, sovereignty and security; integrated oceans management for sustainable development; oceans health; and new ocean science and technologies. While the plan's goals are long-term, I am here tonight to tell you that we are already making significant progress in a number of these areas.
For example, we have identified five priority areas to be managed in a collaborative integrated manner: the Queen Charlotte Basin in the Pacific Coast; the Beaufort Sea in the Arctic; the Gulf of St. Lawrence; the Scotian Shelf and the Placentia Bay and Grand Banks.
These five busy areas are home to a number of different and sometimes competing interests. Each area is a prime example of how certain ocean areas demand an integrated collaborative management approach. Boundaries for each area will be established using ecosystem science, and concrete management objectives will be developed and agreed upon through a collaborative approach.
We are also moving forward on establishing a national network of marine protected areas in all three of our oceans. Our goal is to have key areas protected on all three coasts within three years, and a network of marine protected areas with effective regulation and monitoring within 10 years.
In March 2003, we took a big step forward in designating the Endeavour Hydrothermal Vents off Canada's West Coast. Also, last May Minister Regan announced the designation of the Sable Gully off Nova Scotia as a marine- protected area.
Canada is well on its way to becoming a world leader in protecting our most sensitive and biologically diverse marine areas. The plan is also proving to be useful in strengthening relationships with other levels of government and stakeholder groups. We have a memorandum of understanding with the Province of British Columbia on oceans issues and we intend to follow suit with other interested provinces and territories. We are working with Aboriginal groups, especially the Inuit, and plan to do more work in that regard. We are proposing joint work with the United States in the Gulf of Maine, which Atlantic premiers and New England governors have been promoting.
Of course, these are only modest first steps but those of us involved in the plan's implementation know how challenging it can be to build consensus among competing users of our nation's oceans. It will not happen overnight but I am confident we are on the right track.
You can rest assured, senators, that as the plan evolves, Canadians and both standing committees will be consulted as we work to identify the full potential of our oceans and find ways for present and future generations of Canadians to benefit from these oceans.
I would be pleased to take your questions following the minister's presentations.
Mr. Regan: As Mr. Murphy mentioned, one of the key pillars of the Oceans Action Plan is commitment to science. Clearly, good science is the backbone of the department's work. It is the key to stability, predictability and sustainable development of our fish stocks. Everything from aquaculture to managing our oceans in a sustainable way demand science of the highest order.
As you may already know, DFO's science program is undergoing a rigorous review process. We want to strengthen our science program by developing strategies for funding, partnering and ensuring we have the best people and equipment to do the job.
[Translation]
We also want our scientific work to be closer to the evolving needs of the Canadian fisheries and oceans sector. This is why we are taking an in-depth look at what our scientific priorities should be and whether there are better ways of achieving them. We are looking into a modern and flexible science program that meets the needs of Canadians head- on.
I trust that in carrying out this review process we can work with our partners and develop the mechanisms and processes we require to have our scientific programs closely reflect the context of the 21st century.
[English]
Changes such as science renewal need to be supported by fundamental reforms in how our fisheries are governed. The challenges are well known. On the West Coast, while most fisheries are performing very well, salmon continues to decline in both abundance and value. In Atlantic Canada, fishermen enjoy high landings of crab, lobster and shrimp. However, we are seeing signs of a decline in key fisheries, and certain cod stocks remain at historic low levels. Over the years, we have taken steps to make our fisheries stronger on both coasts and in the north, and to find cooperative solutions to a range of issues. In Atlantic Canada I released a new policy framework for the management of Atlantic fisheries. It was a result of a range of consultations with stakeholders throughout Atlantic Canada. This policy is dedicated to building a fishery with better conservation outcomes, greater industry self-reliance, increased allocation stability, and more open and transparent decision making.
On the West Coast, in response to problems in the Fraser River sockeye fisheries last summer, I appointed former British Columbia Chief Justice Brian Williams to lead an independent review of the situation. In addition to this short- term response, we are working toward broader policy reform for West Coast fisheries. I recently released the draft Wild Salmon Policy for consultation, which is conservation-based and will form a fundamental building block for reform to help ensure that future generations can benefit from strong salmon stocks.
The Wild Salmon Policy will also be informed by two other independent reports: one prepared by a joint Canada- B.C. task force and one by a First Nations panel. While we have made important strides in Atlantic Canada, I see a way ahead on the West Coast as well.
[Translation]
Canadian fisheries must also deal with the impact of the Species at Risk Act. When we decided not to place the Cultus and Sakinaw salmon of British Columbia on the list, we had a very tough decision to make and we were reminded of the impact that the listing of a species under the Species at Risk Act could have on a specific fishery.
There are also conflicts over the use of the resource every year. Although we noted a sharp decrease in those conflicts in 2004, they are still occurring in some fisheries and therefore require our immediate attention.
Also, my Department has worked closely with the industry to develop a number of most successful co-management processes for fisheries on both coasts, and this is a clear indication that the fishing industry is willing and able to assume a greater share of management responsibilities.
[English]
While these initiatives are making a positive difference, we can do more. I am more and more convinced of the need to make some fundamental reforms to the way we manage our fisheries. I know that Assistant Deputy Minister Bevan was here in November to discuss fisheries challenges. No doubt he also told you about my desire to find ways to modernize how we manage our fisheries. Indeed, it sometimes seems that the tools and mechanisms we are using to manage this industry are cumbersome and outdated. The industry has evolved, and the tools need to evolve, too.
That is the final priority I would like to discuss tonight: fisheries management renewal. At its core, fisheries management renewal is about asking ourselves one question: what kind of fishery do we want? It is only seven words but it is a big question, Mr. Chairman. Ask that question to an inshore fisherman in northeastern New Brunswick, to the captain of a big herring seiner in Nova Scotia, to a salmon fisherman in British Columbia and to the CEO of a processing plant in Newfoundland, and you will get four very different answers. Boil down what each person is looking for and you will see common threads: stability, predictability, a say in the decisions being made about their industry and, above all, a strong, healthy resource that can support their livelihoods, families and communities. That is what fisheries management renewal is all about. It is about ensuring strong, sustainable fisheries for years to come, about providing the kind of stability and predictability the industry is looking for, and about working with all levels of the fishing industry to achieve these goals.
Certainly, I am not the first fisheries minister to attempt to bring stability to this industry or to give our stakeholders a greater say in the decision-making process. However, I do think that the direction we are taking is the right one. Stabilizing access and allocation is a crucial first step. I would argue that this is what industry wants done first. A stable and predictable environment is key for this industry. I know it, my officials know it, you know it, and the industry, whose fortunes rise and fall on this very question, definitely knows it.
That is why we rolled over access and allocation arrangements in 2004 but interim steps like this need to be supported by long-term change. We need to develop stable, clear and predictable mechanisms that can meet everyone's needs, while ensuring that conservation remains paramount. It may sound simple but as you know, it is anything but. In fact, if there is one thing I have learned during my time as ministerl, it is that allocations or dividing the pie is, perhaps, the biggest challenge facing a fisheries minister. Nevertheless, I remain committed to finding new and better ways to divide Canada's fisheries among those people who want access to them.
[Translation]
I also plan to enhance our cooperation with the fishing industry. As I said earlier, we already shared a number of responsibilities with the industry in the areas of science, conservation and compliance. Again, those positive steps need to be supported by fundamental change.
I want to enshrine the principle of co-management in every fishery in Canada and to develop a range of steps and incentives to increase the industry's participation in the whole decision-making process.
I also believe there is an urgent need to set out a compliance system to support this new approach. Clearly, if we want to give the users of the resource a greater control of the industry, our approach on compliance must change accordingly.
We must develop collaborative mechanisms which will help us enforce fishing regulations without always requiring costly legal proceedings.
[English]
While we can do much with the current regime, legislative changes to the Fisheries Act, for instance, would provide important tools to assist us. Clearly, the 137-year-old act needs to be updated. A dynamic, modern, adaptable fishery should have more current legislation to back it up. The fishery today is a far cry from what it was 137 years ago, and our legislation should change accordingly. As well, we need to take into account the many differences among Canada's fisheries. As you have seen with Nunavut, the challenges in the Arctic are very different from those in Quebec, in the Atlantic Provinces and on the West Coast. Consider Individual Transferable Quotas, ITQs. I know that the Chairman, Senator Comeau, led the development of a report on ITQs. While they work well in certain fisheries, they may not work as well in others. Indeed whatever changes we make to our fisheries would have to be flexible enough to adapt to a number of very different fisheries, and we need to ensure that conservation remains paramount.
The equation is brutally simple: no conservation equals no fish. I am here tonight to tell you that our commitment to conservation will not change. Honourable senators, as you can see, we certainly have our work cut out for us in the time ahead. We are on the cusp of making some important changes in how our fisheries and oceans sector is managed because changes are certainly needed. Canada's fisheries and oceans have changed and evolved, in some cases far beyond the current tools and processes that we have in place. We need to take action now to adapt to these changes and to bring our programs and policies into line with the realities of this industry in the 21st century.
The initiatives I have outlined tonight and the countless others my department is working on represent collectively our approach to do exactly this. They represent a road map to build a strong, sustainable and flexible fisheries and oceans sector that can continue making an important contribution to Canadian life well into the future.
I look forward to your questions and comments.
The Chairman: Thank you for establishing and giving us the priorities, many of which this committee shares with you. We hope to work with you as you elaborate the further details on the road map.
Thank you also, Mr. Murphy, for the update on the Department of Fisheries and Oceans Act. This committee took a great deal of interest in the Act and has been supportive of it. I think we passed it in this committee in almost record time when it came before us. We will be there to offer whatever support we can.
We would like to start out questions with Senator St. Germain.
Senator St. Germain: I listened carefully, Minister, and I think that if anybody has a challenge in the cabinet — I have been there, but I have not been a fisheries minister — between you and the minister of Aboriginal affairs, you most likely face the toughest challenges there are in being cabinet ministers. I am sure you are up to it, sir.
You said in your presentation that the West Coast salmon population is declining and you seemed concerned about that. I am not an expert in this field but I understand that significant budget cuts have affected enforcement personnel reductions. The ability to manage and conserve marine life certainly is not enhanced when enforcement personnel are reduced.
As well, fishery officer positions — at least six in the south coast division alone in the Pacific region — have been abolished. Can you elaborate on this? This is information I have been given by concerned citizens in British Columbia. If we are concerned about conservation, and the ability to supervise the resource, how can we do this — if this information is correct?
The other thing I would like to ask you is best illustrated by the age-old story of the little town in Saskatchewan. It started off needing a street sweeper; then they hired a manager and then a super-manager for that, and when things got tough, the first person they got rid of was the street sweeper.
If these cuts are taking place in the field, are cuts being made to the staff back here in DFO in accordance? I know how tough it is to deal with departments in Ottawa.
Mr. Regan: Thank you for the questions. I will answer the last one first because it helps to frame the answer.
The answer is yes, there were reductions in Ottawa of 300 personnel over the last year or so as part of the department's assessment and alignment program, DAP. Significant numbers were reduced in the Ottawa area. I have been assured that we are down to the minimum at this point. I know they work hard and I appreciate that.
It is a priority for me to have our people out in the field, at the pointy end, so to speak. Your point is well taken about what happened in that small town in Saskatchewan, where my grandfather and mother came from. I share that concern.
We have gone in that direction of ensuring that there were major reductions here in Ottawa, not only out in the field. That is where I would look first, for reductions here rather than in the place where services are being delivered.
We have reallocated funds internally. Conservation and protection of resources has been a concern of mine and we reallocated funds internally to ensure we had extra funds across the country for that purpose.
However, there were some reductions — I think there were four in that location you spoke of — and Mr. Bevan can give us more details on the situation there.
Mr. David Bevan, Assistant Deputy Minister, Fisheries and Aquaculture Management, Fisheries and Oceans Canada: There was a small reduction in the lower mainland contingent, down by four from 33 to 29; but we have people leaving and coming all the time, so it is difficult to give a permanent snapshot. Staff leave and we have to make adjustments; as priorities shift, we have to make adjustments.
When we talk about difficulties with the salmon, we had significant problems with sea survival for a number of years in the 1990s that led to fewer fish available for harvesters. Even though some runs were quite strong, weak stocks had to be protected. That was the push that caused some of the difficulties for commercial fishermen in having to conserve those weaker stocks and, in some cases, let stronger stocks go by.
There is always a concern with respect to the enforcement of the Fisheries Act and conservation measures. It has been a constant challenge to get the people deployed to the right spots at the right time. We have been reasonably successful. In 2004, we had the same number of patrol hours, and actually increased the patrol hours on the Fraser River over 2003. Even with a smaller number of officers, we have been able to keep the presence going. Certainly, we are aware that this is a priority for the minister and the department.
Senator St. Germain: You say that there were more patrols on the Fraser River and yet, was it not this year that we had complaints from Aboriginal peoples up by Williams Lake that there was virtually no run in an area that had a traditional salmon run?
Mr. Bevan: That is why we have Bryan Williams looking at the 2004 Fraser River sockeye salmon fishery. For whatever reason, whether it was high water temperatures, calculation errors in terms of how many fish were there or illegal fishing, those issues have to be resolved before coming to terms with the cause. However, there was certainly a great disappointment in terms of the escapement that was realized in 2004 versus what was hoped for and expected.
Those are being considered at this time by Mr. Williams, who will provide an independent report to the minister on what he views the causes to have been and what the best way forward is.
Senator St. Germain: If there is a lightning rod in B.C., it is that salmon fishery. I am not telling you how to do your job, but if there are any resources available for fisheries officers, I think that it should be a priority. Did you want to say something?
Mr. Regan: I appreciate your point. I take it seriously. In terms of what I said about 300 positions, that is across the department. I want to ask the deputy to clarify where those 300 were, and what we have done across the department in terms of that realignment to ensure we have the resources where they belong, particularly in the field providing services.
Mr. Larry Murray, Deputy Minister, Fisheries and Oceans Canada: The minister has been clear since he arrived that we need to focus on the sharp end of the department. We have had a major series of reviews underway, which continue to unfold, but it is not just words. We carved $70 million out of lower priority activities — administrative costs and so on — last year to move to higher priority activities, whether they are keeping Coast Guard ships at sea or fisheries officers doing their job.
Part of this strategy has been an attrition strategy; when people leave, there is a conscious decision on whether we replace them or not in the short term. That is where the 300 reduction comes from.
We also found $30 million internally in administrative costs that stayed with the regions to ensure that they were looked after at the sharp end. If I take your question, the minister has also been clear in his direction. Part of the personnel reductions was the reduction permanently of one assistant deputy minister position in Ottawa. As we work our way through a fairly challenging period last year, we are also in the throes of reducing the number of executives in the department by 10 per cent.
We agree entirely with the thrust and that really is the sense of the department. That is not to say we are rolling in dough. There are some fiscal challenges. We do have to live within our means but in the context of that we are doing our very best to provide services to Canadians.
In relation to your concerns about enforcement, that is absolutely valid but we have tried to deal with the issues. We had a major problem in southwest Nova Scotia. We found $700,000 to try to ensure we had a greater presence in the field there, or we would have had a major problem. On the Fraser River we had a presence such that we laid more charges last year than in the previous year, but Mr. Bevan would have the details on that. I agree absolutely where the thrust. The minister has been clear that we need to do our utmost in the direction that you are telling us to go. We have a pretty good story on what we have done in the area of the possible, but we need to do more in this area and we accept that.
Senator St. Germain: The next one is a pet for B.C., the Salmon Enhancement Program. There is no question that funds are limited. However, what is viewed as quite a successful program — possibly your officials, Minister, can elaborate on its success or where it stands as far as accomplishments — but here we have huge numbers of volunteers, people that have retired and people that have just taken up the cause as volunteers. I understand that this program budget has been halved in recent years. It flies in the face that if the West Coast wild stocks populations are declining, this certainly is not the way that we would want to go, if it is working as I am being told that it has worked.
Maybe you can elaborate on that because it seems to be upsetting many people that have traditionally given of their free time to try and work with your officials and the various hatcheries. Maybe you can elaborate on that.
Mr. Regan: I am certainly aware, as I said, of the importance of salmon in B.C., both economically and culturally. I have had the pleasure, and I would say the honour, of meeting with people who are involved in those volunteer organizations because they do wonderful work. I am sure it seems a thankless task, but they deserve our thanks. They work hard and I appreciate that.
I will ask Mr. Bevan to go into the details of the program funding and how it works. This is a favourite topic on the West Coast and there is a similar topic in relation to Atlantic salmon; it is the favourite topic on the East Coast.
Mr. Bevan: Certainly, the set program in the past has been larger but it has had stable funding since 1995. That is not to say the budget has been stable, but the expenditures have been stable since that time and the department has funded it as a priority from other sources of money.
Right now, we are looking at the Wild Salmon Policy. It is being put out for public discussion before being finalized. It talks about the need to conserve conservation units and sub-components of the populations. That is an important activity relevant to fish such as sockeye. The Salmon Enhancement Program could play a more enhanced role in that regard. We are looking at the role the SEP can play in complementing the Wild Salmon Policy and conservation objectives, and dealing with things such as populations subject to particular strain and stress, and perhaps being recommended for listing under the Species at Risk Act.
The SEP provides a tool that could be used in those kinds of circumstances. Its role and how it should be configured is something we need to consider once we finalize the Wild Salmon Policy.
Mr. Regan: Can I add a final point? Further to that question, it would be useful to know that we fund the program to about $26 million a year. For instance, last year, this current fiscal year, $4.5 million of that is found from internal reallocation. We have to find money internally which is not always easy to do. It gets harder and harder all the time. I have defended the program. I think it is important and will continue to work to try to maintain it.
The Chairman: We will now go to Senator Hubley from Prince Edward Island.
Senator Hubley: Thank you Mr. Minister for being with us this evening, and also to Mr. Murphy. I cannot help thinking that any of the fishing communities listening this evening would be very pleased to hear that philosophy, especially your fisheries management renewal. Having you here this evening gives us an opportunity to get a sense of what your vision is for the fisheries.
Of course, in most of the Maritimes there is a traditional fishery that is not large. It is not large in that we have people in the lobster industry, fishermen who go out with their boats and capture their lobsters and bring them back and are able to make a living at that.
I have a concern for rural coastal communities. I would like some assurance from you and perhaps your officials this evening on how important that is to you, that the success of the fisheries is going to impact dramatically on the health of those rural coastal communities, of which we have many. I would like you to comment on that briefly.
Mr. Regan: That is why it is so important that we have economically and environmentally sustainable fisheries for the future because of the coastal communities that rely on them.
You and I know, as Atlantic Canadians and others, how much the fabric of our society and of our provinces those coastal communities are. They are not only important economically for their own sake, but also for our tourism industry. They attract tourists to our provinces. They really are a big part of who we believe we are. When they do surveys about what people think in Atlantic Canada, what proportions of the economy are what, people tend to downplay manufacturing and other aspects and they place the fishery much higher than it is these days. It remains important. It is part of our psyche. Maintaining those coastal communities is important for all those reasons, and also in terms of the importance of rural Canada and what it does for us in our society.
I think we find a lot of strong values in rural communities. We find a fabric and strength in communities that we do not always see in urban areas. I think you can relate to what I am saying, from personal experience.
It is important but at the same time, in Atlantic Canada, where the majority of the population is still rural unlike most of the country, we still see a movement from rural areas toward urban areas. I see that in Halifax where I represent, and we see it creating problems in both places. It creates real strains in rural communities when young people leave and are not there to do things and be the vibrant economic activator in the community. They go to urban areas where they create other kinds of pressures in terms of growth where there is no infrastructure to support the growth that is happening. There are challenges in both places. That is a long answer to a short question.
Senator Hubley: It was a good answer. My second question relates a bit to the ITQs. I believe that when you met with the Commons fishery committee last November, you indicated that perhaps the time was right to implement ITQs for the West Coast fishery. Has a decision been made to use ITQs?
Mr. Regan: On the West Coast, I believe that you are referring to the salmon fishery. If you look at the two reports done last year — the Pearse-McRae report, ``Treaties in Transition,'' and the First Nation Panel on Fisheries report, ``Our Place at the Table,'' you will find many similarities as well as differences. The department consulted with stakeholders across British Columbia to get their views on how to proceed, following those reports, to create an environmentally sustainable and economically viable salmon fishery in B.C. That was one of the options recommended by the Pearse-McRae report. We have not come to a decision yet because we are still analyzing the information from the consultations. The department will advise me on the recommended procedure.
An important part of this is how to deal with First Nations to provide them with commercial access and how to deal with the current commercial fishermen who might be bought out or leave the fishery. In relation to ITQs or IQs, while they are appropriate for some species and sectors, they might not be appropriate for others. We have to look at them on a case-by-case basis.
Senator Hubley: In your remarks you suggested that the ITQs worked well. Were you referring to the West Coast salmon fishery?
Mr. Regan: I do not recall —
Senator Hubley: In your presentation you mentioned that ITQs work well.
Mr. Regan: They work well in some cases. I did not refer to the B.C. salmon fishery because ITQs have not been tried there yet. If we proceed with ITQs for the salmon fishery in B.C, we will see how it works, but we want to hear what people have to say on that first.
Senator Hubley: Do you know of any jurisdictions where they are being used and if it is a good model, something that we might look at?
Mr. Regan: You could look at the halibut fishery in British Columbia, where ITQs are used. There are also some fisheries on the east coast with ITQs.
Mr. Bevan: Most of the fisheries in British Columbia are already on ITQs. The minister mentioned halibut and there is black cod as well as a number of other species subject to that kind of arrangement. For those fisheries in that jurisdiction, and in terms of the social frameworks and where people live, it has worked.
In Atlantic Canada we have a number of ITQs in place in southwest Nova Scotia. We also have enterprise allocations for the offshore, which has allowed fisheries to function efficiently and competitively in the world market. A number of those are in place in Canada on both coasts.
Mr. Regan: One of the challenges is to provide environmentally sustainable and economically viable self-reliant fisheries. In some cases we have seen that individual quotas will allow for rationalization where that is required. Sometimes in fisheries there is too much capacity and a reduction of capacity is then required. Sometimes it has worked well in terms of rationalization but will not work well in every case. We have to look at each instance in each sector to determine whether ITQs are the answer.
Senator Hubley: What species on the East Coast would be be considered for ITQs?
Mr. Bevan: There are some groundfish species in southwest Nova Scotia, and there is the enterprise allocation process for offshore groundfish. ITQs are also being used in other species such as scallops. A number of steps have been taken to rationalize efforts in that industry over the last number of years.
In the inshore fishery, there is much less appetite for ITQs in terms of a number of areas where the fishermen and the communities are concerned that there would be too much concentration of the opportunities and, therefore, the participation of fishermen and the communities would be affected. There has been a different approach for different fisheries and we need to continue that.
Senator Mahovlich: Minister, many in the Atlantic fishery are concerned about trust agreements, which are contracts between fishing licence holders and corporations or other third parties. The 2004 policy framework states that trust agreements are legally binding private contracts, sometimes used to transfer the beneficial interest associated with a licence from a licence holder to another party. What is the department's position or policy with respect to trust agreements?
Mr. Regan: First, it is notable that trust agreements are not registered with the department. Our basic policy is that we want the owners of licences to be the operators of those licences. Generally, that occurs.
The difficulty relates to what happens in financing the fishery and, particularly, intergenerational transfers. For example, a father who owns a licence worth $1 million might want to retire and transfer the licence to a son or daughter. A bank will not lend the funds on the basis of the licence because it is not considered personal property that it can seize in the event of a default in the repayment of the loan. It does not work that way.
It is difficult to secure the financing for such a licence. Our challenge, as we try to find a way to ensure that owner- operators use the licences, is to do it in such a way that it does not cause upheaval in the industry, and that it allows some mechanism for financing those transfers. That is a challenging task that the department has been working on. It is difficult but we have to come to grips with it. I certainly invite the advice of this committee in that respect.
A couple of days ago I was talking to my predecessor who is from the same area as Senator Comeau, where this issue is particularly complex. In some parts of Atlantic Canada, fishermen are opposed to trust agreements and strongly in favour of owner-operator licences. On the south shore of Nova Scotia and in the western part of the province, it is a mixed view. While people are concerned about coastal communities being protected and Senator Hubley referred to that issue, they are concerned as well about how we finance that challenge. We have to find an answer to this financial problem.
Mr. Bevan: It is clear that access to capital drives trust agreements. Without an alternative it will be difficult for us to avoid trust agreements. We have no capacity within the department to engage in any kind of internal evaluation of what happens within a fishing enterprise. For us to be able to understand what arrangements have taken place is difficult. We do not have that kind of core competency or capacity. The department will have to look for alternatives as a means of dealing with this problem of gaining access to capital. It is a significant challenge, and views are polarized on the issue of intergenerational transfer of licences in general. The issue could have been resolved some time ago if we had had greater consensus.
Senator Mahovlich: You mentioned more funding for the Canadian Coast Guard. Where do you think fisheries is on the government's list of priorities? We are interested in knowing because the Senate is having difficulties with its budget. Government has made cuts regularly to our budget over the past four years. How important is fisheries to this country? How do you feel about that?
Mr. Regan: As minister, I certainly feel it is very important. As an Atlantic Canadian, it is very important to our region. It is also important in the North, on the West Coast and in the Great Lakes region.
In fact, I hear about the importance of the freshwater fishery in the Prairies as well. I think it is very important. Let us keep in mind; what we hear in elections is the top priority of Canadians is around things like health care.
Senator Mahovlich: Defence: They are talking about defence all the time but if we do not have the fish we do not need defence.
Mr. Regan: I take your point, senator.
Clearly, there are a variety of priorities. When Senator St. Germain talked earlier about the challenging jobs of Fisheries and Oceans Canada and Indian Affairs and Northern Development Canada, for example, one he did not mention was Finance. I do not envy the job that the Minister of Finance has. We will all look forward to the results of his recent work in a couple of weeks when he presents his next budget. I am certainly anxious to see it.
The Chairman: I think Senator Mahovlich hit the bull's eye there. It is something that we need to get across to Canadians, namely, that the fisheries are about much more than fish. It is about a way of life and communities. It has been one of the challenges we faced as a committee to try to get that point across even though it is not on the radar screen of The Globe and Mail or the National Post. Unless there is violence or bloodshed, of course, the fishery seems to get short order here in Ottawa. I think from our point of view as a committee and I think the House committee, as well as you, Minister — we need to get across to Canadians what a great birthright this question of fisheries is; much more than just fish.
Mr. Regan: One thing I do appreciate very much is the priority the Prime Minister gives this issue, especially internationally. He has raised the issue of overfishing over and over the past year, whether he was at the G8 summit in Georgia last June, the UN speech last September, in Russia with President Putin, in Paris with President Chirac or at the meetings in Budapest where he raised it again. He met with the President of Spain and the President of Portugal when he was at the UN. He is constantly raising the issue internationally. I do not recall another Prime Minister who has raised this issue of overfishing as much. His attention and interest in this issue is something I appreciate. While this is not at the top of most Canadians' agenda, when it comes to the issue of overfishing on the Nose and Tail of the Grand Banks, for instance, and they are concerned about the environmental destruction of important straddling fish stocks, they do feel strongly about it. I think his interest in this reflects that.
The Chairman: It is good to hear that the Prime Minister is listening.
Senator Adams: Before I ask the minister my question, I would like to introduce a couple of people from Nunavut. The first person I would like to introduce is Koalie Kooneeliusie, Chairman of the Nattivak Hunters and Trappers Association from Nunavut. He is standing up now. With him is Sam Nuqingaq, Secretary-Treasurer of the Nattivak Hunters and Trappers Association, and Harry Earle, a chartered accountant from Newfoundland. I worked with those three people over the past three years about how to develop Nunavut in the future.
It is difficult sometimes, even when we have a signed agreement. In 1993, the Government of Canada signed the Nunavut Land Claim Agreement. Since then, we elected 19 members in 1999 to the Nunavut government. Since then, we tried to develop a Nunavut commercial fishery in the future, in Divisions 0E and 0B. We have a Nunavut government set up on how to provide commercial fishing to the people in the community in the future.
We have been living off the land and water for a few thousand years and, all of a sudden, people say, how are we able to develop fishing and teach the people in the community to do this? Those people have been living in the communities for thousands of years and they understand how to develop it themselves and how they are able to fish. However, with the land claim agreement DFO set up some of the policies with the Nunavut Wildlife Management Board and somehow, we ended up with an organization, the Baffin Fisheries Coalition, BFC. People in the community lost the right to work on those organizations. In the last three or four years they never went anywhere and did not receive any help from the government in Nunavut.
My first question is this: The Nunavut Wildlife Management Board, between it and section 5.37 of the Nunavut Land Claim Agreement, there was a clause between the DFO and the Nunavut Tunngavik Inc., NTI, that the Nunavut Wildlife Management Board should be able to control how the quotas are allocated to the community. BFC did not have any groundfishing licence. We have a DFO department in Iqaluit and we find out that the Nunavut Wildlife Management Board is part of DFO. It is the conflict between the Nunavut Wildlife Management Board and most of the Inuit who come from the community. Now, as we are transferring to the quotas of BFC, how will it be set up in the community?
We have gone through two or three ministers since the land claim agreement. To me, the Nunavut Wildlife Management Board is now run by the DFO. It is not a Nunavut department. Anything now, for example, the quotas to the community supposed to be at sections 0A and 0B, those quotas are supposed to be Nunavut quotas. Only 28 per cent of the quotas to the community were awarded to BFC.
Those three were introduced and now we have a boat and everything, about a 100-foot boat. Now it goes to the BFC, and the Nunavut Wildlife Management Board tells the people from the Nunavut organization that they cannot keep their licence. In the meantime, Mr. Nuqingaq and Mr. Kooneeliusie came from the community and set up their own businesses and were members of the Nattivak Hunters and Trappers Association in the community, but now they cannot get a licence.
Some time in 2004, the quotas were given to the Pangnirtung fish plant. Early last summer, they gave extra quotas to the community. Somehow, the Nunavut Wildlife Management Board received that quota of 4,000 metric tonnes. I would like the minister to give it to the community. The Nunavut Wildlife Management Board received that 4,000 tonnes and they took 200 away from the community at Pangnirtung. BFC received it and never fished the 200 tonnes. In the meantime, in the community at Pangnirtung, they lost another 200 tonnes. This is what is going on within the community.
You have a DFO board in Iqaluit that has licences to give out to the community and they are not giving them out to the community; they are giving them out to BFC. BFC has received quotas and they are chartered to other ships that do not come from Canada. This is difficult for us in the community; we are not being treated well. Perhaps you can answer that. My English is difficult, but I try to do what I can to solve the problems I see, and I want to make sure you have all the questions.
Also, sometime in August 2004, some of the local hunters went out hunting on the sea ice close to Arctic Bay. They found a small humpback whale killed by a killer whale. They reported it to the community, through the Iqaluit wildlife officer. DFO has a head office in Winnipeg, and they had to report this to the Winnipeg office so that DFO knew about the humpback whale killed by a killer whale.
We are only allowed to kill one humpback whale every two years in Nunavut, and that meat and muktuk has to go to every community. I think it is mismanagement. That whale that was not killed by the community or by sickness; it was killed by a killer whale and people knew that right away. However, by the time we received an answer from Winnipeg, it was a week later and the meat was too spoiled to use.
Those kinds of things happen sometimes with the department. I know that you try to do a good job and it is difficult sometimes because you have a policy that people must make decisions. Sometimes they are unable to do it the same day, but before you know it, a week goes by and it is too late. The people in the community needed that meat, but it was not available because it went bad.
I will ask some questions later.
The Chairman: Perhaps on the second round.
Mr. Regan: Thank you, Senator Adams, for those questions.
Let me go over the role of the Nunavut Wildlife Management Board and how it was created. It was established in the Nunavut Land Claims Agreement. It is a decision-making body within the Nunavut settlement area, which has advisory authority in the waters adjacent to the Nunavut settlement area.
In view of this, the board has traditionally been requested to provide us with recommendations on the allocation of fish quotas provided to Nunavut interests, both inside the Nunavut settlement area and in the waters adjacent. That is the basis of our working with them.
The fact is that we have an office in Iqaluit; we have a limited number of personnel there and we have tried to rely on people locally. In this case, the organization is set up locally by Nunavut to deal with these issues. We have tried to rely on them in terms of the allocation decisions among the many communities there rather than trying to figure those things out ourselves. Theoretically, that seems to make sense.
First, I wish to say that I was hoping to go there in the fall. In the end, my parliamentary secretary, Mr. Murphy, went to Pangnirtung. Perhaps he will add some comments after I am finished. I hope to go to Nunavut in April to see a bit of the fishery there firsthand, and meet with people in the communities, to the degree I can over a short period of time, to hear some of this firsthand. Clearly, there are concerns about this issue and I appreciate that.
We have operated on the basis of what has been created in Nunavut for us to deal with. That, I think, is a good starting point.
I know the transfer of the Nunavut groundfish licence is one of the concerns you raised. In 1997, the minister at the time authorized a groundfish privilege or licence for the Nunavut interest to harvest its turbot allocations. This licence was to be allocated by the Nunavut Wildlife Management Board at that time. The board recommended that the licence be issued to the Baffin Fisheries Coalition, BFC, for a period ending December 31, 2005. This recommendation was accepted, as I am sure you know. The decision, in that case, was supported by the Nunavut Tunngavik Inc, the Nunavut Wildlife Management Board and by the government of Nunavut. That was important in our consideration of what to do there.
In relation to the Division 0A quota that was awarded in the fall of 2004, let me talk about that in a moment. However, first, when you talk about the role of the Nunavut Wildlife Management Board, there may be the perception in Nunavut, as you say, that it is an arm of Fisheries and Oceans Canada. It is important to know that it is not an arm. We appoint one of the nine people on the board. In other words, one of the members of the nine-person board comes from DFO. Eight of the nine do not come from DFO; they come, as I understand it, from the local government and communities in Nunavut. That is very important.
Is there someone there from Indian and Northern Affairs Canada, do you know? There maybe someone from Indian and Northern Affairs Canada because they fund the organization. In fact, that is important that they are the ones that provide the funding under the Nunavut Land Claims Agreement implementation funds.
My decision this year was to allocate an additional 400 tonnes of Division 0A turbot to the Nunavut interest and not to any specific request. In providing this additional access to the Nunavut interest, I relied on the competence of the Nunavut Wildlife Management Board to represent the interest in Nunavut. I accepted their recommended split of the allocation, which is the policy we have followed in the past.
When I go there, hopefully in April, I am sure I will hear more about this and it may enlighten me further.
On the question of the whale, it says here in my notes that it was a bowhead. My understanding is that in view of the high body temperature and the nature of the body fat and so forth in bowhead whales, they tend to spoil quickly when they are dead. This one was killed by killer whales off the community of Arctic Bay. It was found at a certain point, and the local people were concerned, because it was already dead, that it might not be safe to harvest it and eat the animal. They contacted DFO but there was a delay in receiving an answer to clarify whether it was safe to consume, et cetera. The department is not clear about whether the delay was caused by weather issues or other communication challenges. Clearly, it is important that people understand that in terms of regulatory requirements they do not need approval from DFO to harvest a dead animal. If they want our help in respect of safety issues, that is fine but it may be difficult to transfer a sample of the animal for testing. I understand that the department has provided a response that permission is not needed from the department for the use of any animal that is already dead.
We have had follow-up discussions with the Nunavut Wildlife Management Board, NWMB. It was agreed that Nunavut communities need to be better informed regarding the regulatory requirements for both live and dead animals. There will be further discussions with the communities to ensure that they are better informed.
Mr. Murphy: I will add a few remarks. I visited the territory last September and although I do not fully understand, I do have a better appreciation of some of the issues facing the senator's community. Again, this goes back to what the minister said, that under the land claims agreement, the Nunavut Wildlife Management Board was set up to have general authority over some of the allocation issues. Many members of the communities are members of the Baffin Fisheries Coalition, BFC. There have been some disagreements as to the allocation decisions and this has led to difficulties in the development of the fishery in that region.
I will make one additional comment. I am sure that members of the committee are aware of this but one of the biggest issues in the territory of Nunavut is that of capacity. I know that fishermen in your area, Mr. Chairman, and my area complain about the state of the wharves but in Nunavut, they do not complain about that because they do not have wharves. I am hopeful that the Government of Nunavut and the Government of Canada will address that issue. Any fish caught in the Davis Strait now are not even landed in Canada but in Greenland. Many of the fish that Senator Adams is talking about are brokered to other southern or foreign interests. I am hopeful that the leaders of both governments develop wharves in these communities. I was in Pond Inlet, Pangnirtung and Iqaluit on Baffin Island and there should be at least one port on the Davis Strait, whether on the Clyde River or somewhere else. If that happens, then the fishery and the communities will have the capacity to exploit this resource.
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Senator Robichaud: Mr. Minister, I am sorry I missed your presentation. I was at the Foreign Affairs Committee and as many of us here wear several hats, we almost need to be everywhere at the same time. My question is quite simple. With respect to snow crab, where do you stand on the plan for the gulf?
Mr. Regan: The plan has not yet been completed for this year. I am not expecting any major change, but I am waiting for the Department's advice and I would ask Mr. Bevan to add a few words on this.
Mr. Bevan: I think we need to have the opinion of scientists. We have some clues, but we have not carried out the required analysis to make decisions on the total catch for this year. When we have done that, we will be in a position to give the minister the Department's advice regarding total catch and allocations for this year.
Senator Robichaud: Can the minister give us the assurance that there will be no transfer of quota shares from one province to another as this has happened before? That decision is not related to any scientific advice. It is a decision that comes directly from the minister. This is what happened last year and New Brunswick fishermen were not impressed with that decision.
Can the minister give us the assurance that there will be no similar transfer this year?
Mr. Regan: We had a thorough discussion on that issue when I last met with your committee, and I do not wish to repeat what I said. I said I did not expect any major changes in the plan, but I am waiting for the department's advice.
Senator Robichaud: Mr. Minister, last year, when you answered the very same question, you seemed to think that such a transfer was not a major change, although I felt it was a major change. This is why I am saying that I would not like the same thing to happen again. I think it has nothing to do with scientific advice. It was the same crab that was being fished, by different people.
Mr. Regan: Last year, the question was on lobster and I said some steps were required to alleviate the fishing effort on lobster, and that was the reason why we did it. The best thing I can tell you now is that I heard what you said, senator.
Senator Robichaud: Senator Hubley talked about coastal communities and the department's responsibility towards those communities. I heard recently that Clearwater, a company based in Nova Scotia, controlled 50 per cent of the scallop harvest. That company has decided to move its operations from Lunenberg. All its facilities are now for sale and this will certainly translate into major job losses for the Lunenberg community.
What is the department's policy on catch shares? I find 50 per cent is a lot. Can a company be allowed to pack up and move elsewhere without being in any way accountable to the community where it grew and prospered?
Mr. Regan: I understand what your are saying. It is a difficult question and we have seen similar situations elsewhere in Nova Scotia where companies had been granted licences and transferred their activities to Newfoundland. We have also seen in the past changes take place between various communities in the Atlantic provinces.
If I might, I would appreciate the committee telling me whether in their opinion this might cause other problems if the licences were granted to those communities.
For instance, we have seen in the past that in some provinces with a processing overcapacity, when the stocks started to decrease, that capacity had to be reduced also. How could we achieve that reduction if the communities themselves had the licences? How could we have a sustainable fishery in that case? And how can we deal with this issue in a better way with licences for businesses in some areas? I would certainly welcome your advice. I would also like Mr. Bevan to add something on that issue.
Mr. Bevan: Your question is on the issue of offshore scallops. It is a fishery area where we have a policy that says that the companies may have 50 per cent of the quota and they are entitled under that policy to choose the location where they want those scallops processed in a fish processing plant. We do not have the authority under the Fisheries Act to dictate the place where those catches must be processed. It is up to the companies to decide which location is best to process their fish.
When we deal with inshore fisheries, it is a different matter. In this case, fishermen, because of the boat sizes, need to bring the fish back to the coastal community. There is therefore a different policy for this kind of fishing. But for offshore fisheries, we need to have profitable companies and a sustainable fishing industry. The policy there includes provisions that allow companies to operate on a profitable basis by preserving a sustainable fish population.
Senator Robichaud: I am not denying in any way that we need to have a sustainable fishery, but I believe that regarding Senator Hubley's question, there is clearly an interest on the part of coastal communities.
Am I to understand that the answer is that in the case of an offshore fishery, a company may pack up and move elsewhere without the minister being able to defend the interests of that community — and the question was not about processing, but rather about landings? When a company lands its fish in a community and it owns all of the gear, all the supplies, all the repair operations, many people are affected.
Am I to understand that the Department of Fisheries and Oceans has no recourse? You cannot even question that company to find out why it is moving elsewhere?
Mr. Bevan: No, we do not have the authority, under the Fisheries Act, to tell a specific company where it must land its catches. It is their choice.
With regard to the policy on fishing licences, we have taken some steps to ensure that coastal communities are protected. Coastal fishermen cannot land their catches elsewhere; they need to come back to their own community because they cannot sail offshore with their boats to land their catch in a different place.
Offshore fishing companies, however, need to have large ships and require major investments, and therefore they need to have a cost-effective operation or else it would be almost impossible for them to take their quotas and have their catches processed in a fish processing plant.
For each fishing industry, there is a policy on quotas. For scallops, for instance, it is 50 per cent; for other groundfish in Newfoundland, the FPI has many quotas for halibut, such as 95 per cent, as the case happened in the 1990s.
Senator Robichaud: You are telling me that the Department of Fisheries and Oceans can do nothing and that it will not even contact the company to try and get it to reconsider its decision? It appears however that the company had been landing its catches for a long time in that port. Why is it that suddenly that port is not longer a good place to land their catch?
There are good reasons to question that company's actions, because the resource they are harvesting is the property of all Canadians. And if we care for coastal communities, we need to take steps to get those companies to understand that they are somehow accountable.
Mr. Regan: I would say that even though we have no tools with respect to that situation under the act, there have been occasions in the past, for instances regarding crab fishing, when I had discussions with fishing companies to try and make them consider the impact on communities.
However, deciding in which communities fishermen should land their catch is something I did not do. I left those decisions with the various Atlantic communities. There may be some risks if we were to dictate to every company where it should land its catch.
Senator Robichaud: That is not what I am asking for. I am not asking you to decide where landings should take place.
However, if we consider the interest of coastal communities, which rely on the resources of the sea and the fishermen who land their catches, is it not incumbent on us to make sure that we do not overlook the impact of such a change on those communities?
Mr. Regan: I would say, senator, that our prime responsibility is to ensure conservation and make sure that we have a fisheries management system that provides sustainable fishing for those communities. We need to ensure that all fishermen, especially inshore fishermen, can take care of their families.
The Chairman: I believe Senator Robichaud's question goes to the heart of the study we have embarked on. We would like to make recommendations to the minister within a few regarding a vision of quota privatization through IQTs or other means. In terms of quota concentration, a company may have up to 50 per cent of the quotas and decide to move to another community. The government and the community in question are faced with a number of specific problems such as employment insurance. Taxpayers pay employment insurance premiums and the government is then faced with the need to secure new jobs in those communities.
The goal of our study is to find out if there are other alternatives or means to allocate fish stocks so that we can avoid the Lunenburg situation happening elsewhere.
Senator Robichaud: Mr. Chairman, I hope my question will have enlightened the minister and his advisors on those important issues.
The Chairman: We will certainly try to make sure that the minister shares a little of his time with us so that we can make some suggestions that might be useful 20 years from now. Today's reality is a reflection of decisions that were made 15 or 20 years ago. Departmental officials now have to bear with those decisions. Those things are beyond their control. They have no control over the private industry anymore. The decision should have been made 20 years ago. There is nothing we can do anymore today. This being said, we hope that we will be able to offer you some recommendations, Mr. Minister, to try and make sure that such a situation will not happen again in the future.
[English]
Senator Watt: In the evolving policy framework for managing Canada's fisheries and oceans, I imagine your department is going through a learning curve on this matter. You have not actually come up with the ideas of how this will be implemented. That is my first comment, but let me go on.
Taking into account what other senators have already stated, especially Senator Robichaud, the lifestyles and culture of small communities will be heavily impacted socially and economically. This is the only way to bring bread and butter to their tables to feed and clothe their families. Along the same lines as the Innu people in the Arctic, we have a concern about the intent of the department and where you are planning to go with this department's responsibility.
In due time, we hope there will be a debate on this matter in order to inform the general public of Canada what is happening in regard to the fish and the ocean; and the fact that partnership with the private sector, or stewardship, if you want to use that word, is about to take place.
I am not entirely sure whether this will be beneficial to the country as a whole in the way you have described it in your argument, which is that you want to make sure that it becomes economically viable. I am not sure you will reach your point on that.
I am also trying to open your mind to look at it differently. As you know, quite a few of us have a certain amount of experience dealing with international fishing activities and how they take place and how they have been conducted in the ocean. I understand that licence holders are not necessarily Canadians. In other words, Canada does not necessarily benefit economically if that is the case.
In that regard, minister, in due course down the road, you probably will come up with legislation on this matter. The complexity of this responsibility is huge and I imagine you will have to come forward with legislation. Hopefully, that will allow the general public of Canada to participate, especially the coastal people and the Innu people.
As you know, the corporate identity seems to have a great deal of funds, much more than the individual people who normally held a licence in the past in the coastal communities. Those corporations are millionaires, if you want to put it that way. They have millions of dollars. At times, they also sell their catch rights in the ocean — whoever pay the highest amount is the country that gets it. In that scenario, does our country benefit from those rights?
Minister, I hope you will examine this and take a good look at it. It is also important that if you expect this committee to come up with some tangible recommendations, we need to know who the licence holders are, whether they are Canadians or non-Canadians. It is important for us to know that.
The 50 per cent of the catch that Senator Robichaud mentioned, if that is the case, how is that other 50 per cent spread into the community-based economy? Maybe none of it is. I leave that with you, minister. I think what you are taking on is an important and serious matter. I do not think this committee likes to be put in a position of not being able to come forward with tangible recommendations. We need to come up with tangible recommendations and the only way to do that is to have proper information. We do not have proper information. We do not even know exactly where you are going. We are confused to a certain extent.
I know what you said is from your heart when you spoke about what you intend to do. I believe that. I have no reason to not believe you. I think it is important to look at those different segments of the responsibility normally under Fisheries and Oceans Canada. If you plan to share those responsibilities with the private sector, we need to examine them clearly and see what it means down the road.
Mr. Regan: What we are interested in more is sharing the management with the industry — and that means inshore fishermen and everyone involved in the fishery. We need more involvement from them in decision making and more responsibility taken for the resource. That is very important.
I want to make it clear that when I talk about coastal communities and their importance, there are things that we are doing to defend those coastal communities. We have the owner-operator rule and fleet separation. Those are things that I defend strongly. We are looking for solutions to some of the problems around those, as I described earlier. However, those are positions that we hold very strongly and we have not shrunk from those.
It is important that we have economically viable fisheries, because otherwise communities do not survive. It might mean that some people have to leave the fishery in order to have an economically viable fishery for the others. We have seen that happen in the past. We have seen communities where fish plants used to exist and do not exist today. In respect of the amount of fishing that the resource can handle, obviously depending on the amount available, there is a certain amount of processing that can be done and a certain number of plants to support the processing. You have to try to measure that. The question is whether government should manage or should that be left to the fishery to work out. It is a difficult challenge.
You talked about the implementation of the renewal of our fisheries, Senator Smith, and gave some details of that. I was giving an introduction only to our thinking in that respect. The officials will be happy to come back and discuss it more at another time. Obviously, we are talking about working towards proposed legislation. Clearly, nothing prevents you from debating these issues in advance of that proposed legislation. Once it comes before the Senate I am sure you would debate and hear the views of Canadians on these subjects. I leave that to senators.
On the subject of international fisheries, it is important to know that there are no foreign countries fishing in our economic zone; we control that fishery. In other words, our licence holders are fishing in our economic zone. The exception is in the case of the Nunavut interests where outside boats conduct the fisheries for them. Mr. Murphy talks about the challenge of creating good infrastructure in that region so there can be more of a local fishery. I have been pushing for more Canadianization of the fishery in Nunavut. That has been a concern of mine, as you may be aware.
It is important to remember that we do not have the same situation that we had years ago when Russian trawlers and others were fishing inside our 200-mile limit. We have a grave concern about what happens outside the 200-mile limit on the nose and tail of the Grand Banks. We are working to confront that problem and get international will towards solving that problem and other problems throughout the world. High-seas overfishing is a global problem that relates to the food stocks worldwide. We talked earlier about the importance of this industry to our country. It is important to recognize the importance of fish stocks to our planet, and of the need for nations globally to take action to protect them. Mr. Bevan will address the other 50 per cent.
Mr. Bevan: Thank you, minister. I point out that it is a domestic fishery and, therefore, all the fish is held by Canadian companies. In the offshore scallop fishery off Nova Scotia, the policy is that only 50 per cent can be held by any one Canadian company and the other 50 per cent is held by a variety of other companies. There is an inshore fishery component in the scallop fishery whereby a large number of smaller vessels are prosecuting that fishery in the Bay of Fundy and in other areas. There is the policy of fleet separation that would apply to that component of the fleet, and in the offshore that is prosecuted in the George's Bank area and other areas of the high seas. The concentration of any one Canadian company is 50 per cent and all other quota would be held by other companies.
Mr. Regan: In terms of fisheries management renewal, I can provide a few more details. We are working toward modernizing fisheries governance through conservation frameworks, adopting a precautionary approach, and taking into account ecosystem considerations. We are working toward stable access and allocation systems. That change made last year is an important part of this new system, as are predictable and transparent processes. Part of this requires changes to the Fisheries Act so that, for instance, bodies outside of DFO can make some of these decisions at times. Since the regime created it in 1868, the Fisheries Act has not been overhauled. It is up to the minister to make many decisions that, in my view, could be handled by independent bodies that might be closer to the industry and to the fishermen. Those independent bodies would have more involvement and, perhaps, do a better job. They might have a more sensible and rational approach to the management of the modern fishery.
We are working toward shared stewardship, founded upon co-management, and a modernized compliance regime would be important. Currently when infractions of various sorts occur, we have to go through the court system rather than being able to ticket or use a variety of mechanisms in response to illegal activities that contravene the Fisheries Act. We are constrained. It is an expensive process for us to penalize people who do not follow the rules. Those are some of the ways in which we need to modernize the fishery.
Senator Watt: What is the time frame to complete this policy framework?
Mr. Regan: You are familiar with the policy framework that we developed last year. In respect of legislative reform, when I appeared before the House of Commons Standing Committee on Fisheries and Oceans in the fall, I said that I was interested in knowing their interest in pursuing this issue. We have a minority government and it is important for me to hear from parliamentarians about their readiness and willingness to proceed with these changes. If that does not exist, then the fact must be considered. I am waiting for a response from the House of Commons committee and I would be interested in knowing the views of this committee on whether the kinds of changes I have talked about to the Fisheries Act and to our management system are needed.
The Chairman: Senator Watt touched on the question of who ultimately owns the harvesting company in that region. We call it a Canadian company but who is the true owner of that company at the end of the day? Are you monitoring who owns the company? Is there any way of monitoring whether it is a shareholder-held company or a privately-held company? Is the department monitoring ownership of the harvesting company?
Minister, we could wait for the response to those questions if you do not have an answer tonight. That issue of ownership has been a concern of the committee for some time.
Mr. Regan: They are Canadian companies, Mr. Chairman. They are employing people in our country and they are based in our country. That is the first thing we look at but do not go beyond that information.
The Chairman: They could be, in fact, foreign-owned companies.
Mr. Regan: No, they cannot be.
The Chairman: I saw Mr. Bevan answering in the negative. How does the department satisfy itself that one of these privately held companies is not foreign-held?
Mr. Bevan: At times of any kind of transfer, such as a transfer of quota from one company to another, we verify that the company receiving the transfer is still 50 per cent Canadian-owned and Canadian-controlled at the time. However, I point out that if it were a private-held company, not public, then transactions could take place that the department would be unaware of that could lead to some change.
Having said that, we have not had that experience. The companies that we deal with are well-known, publicly traded Canadian companies. We have not had any kind of indication of any erosion of that process.
The Chairman: You actually go out and measure the number of shares that are held, or there is a way for you to analyze the shares that are held by these publicly owned companies, that the shareholders are in fact non-Canadians?
Mr. Bevan: We do not do that except at times to transfer quota when we have to make sure that the policy is adhered to. If a company is buying quota, we have to verify that 51 per cent of the company is still owned by Canadians. We have not encountered problems with respect to this in the past.
The Chairman: I will not push that any further. We will want to get into the details of that at a future time.
One question before we wrap it up. I know the hour and I know that you have a flu that you would like to get rid of.
There have been fisheries management regimes in New Zealand and Iceland for quite sometime. In other words, they have gone much more privatized than we have here in Canada. Have you or your officials had a chance to look at the advantages and disadvantages of the system they have there, and the impact on its communities in those two jurisdictions?
Mr. Regan: The first answer is not in detail. The second answer is in relation to Iceland. I did have a brief opportunity to visit Iceland. Believe it or not, I went there during the election.
The Chairman: A good time to go.
Mr. Regan: I went for a good reason, to the North Atlantic Fisheries Ministers Conference that was being held at that time. As you recall, we were dealing with the issue of overfishing. There had been an issue in the media that we were doing that only for the election. It was a pre-election stunt, supposedly. I felt it was important for me to go there to tell other ministers, particularly from the countries that we were concerned about in terms of overfishing, that it was not only an issue of Newfoundland and Labrador but an issue that Canadians across the country were concerned about and we would maintain our efforts.
As you heard in my opening remarks about our success last year, while we are not finished by any means and this is still a challenge there, we did see considerable improvement last year as a result of our efforts. I went there to make that point.
When I told them that, I did not have what I would call a safe seat and I had my involuntary sabbatical a few years ago when I was defeated and then re-elected. They seemed to recognize that I was taking this seriously and it was a serious matter. There seemed to be some benefit to leaving in the campaign.
One of the things I heard from the Icelandic minister was the success they have had in their economic zone and 200- mile limit of their fishery domestically and how well it is doing. I can at least say that it was clear to me that their fishery domestically has been very successful under whatever management system they are using. I did not look into the details of the management system. I will ask the deputy minister to comment further on this question of New Zealand and Iceland.
Mr. Murray: In the case of both Iceland and New Zealand, you fundamentally get into the nature of the discussion here tonight and that is: Who owns the fish? It is fundamentally ITQs so the economics of it are pretty solid in terms of an economically viable fishery. However, what does it do for communities and is it the kind of thing you want to do everywhere completely?
That is the essence of the kind of issues we are wrestling with, namely, what makes the most sense where clearly there are significant advantages to ITQs in some ways. In other ways you get into the debate of someone standing on a beach with a share of what was public property and is doing very well and not fishing any more.
Mr. Regan: Maybe sitting on the beach.
Mr. Murray: Economically viable, yes, but is it the total answer? I think probably not but is there a place for some of that within the Canadian fishery? Probably, yes, because in some areas it is working very well. It is not black and white. Most things to do with the fishery are not. I do not pretend to be a total expert but that is where I would land at this juncture.
Mr. Bevan: It is important to recognize the goals that each of those countries had. Iceland gets a tremendous amount of its gross domestic product out of the fishery and fish exports. They cannot afford to run it in any way but an economically efficient way. Their choice was to have it efficient by having rationalization and the ITQ process and then tax the revenues in order to distribute the benefits to the populace at large. That was their motivation and it worked to a large extent. There was some problem with high bidding for quotas. It turned out to be a bit optimistic. That caused some stress in the industry but generally it has worked well to create the kind of economic driver for their economy that they needed.
In New Zealand, the motivation was more along the lines of cost cutting and making the fishery run economically from the point of view of the government inputs and supports for the fishery. Again, New Zealand achieved that but at a cost in terms of other factors such as jobs, et cetera.
The choices in Canada demonstrate that we have taken different choices in different fisheries under different circumstance but any renewal of fisheries management will have to recognize that we do not have a one-size-fits-all. In terms of international, we will not adopt the Icelandic model or the New Zealand model in whole in the Canadian context. We are not looking to find the solution in other jurisdictions. We think we have to build it in Canada and it has to recognize differing values in terms of socio-economic impacts of different types of fisheries throughout the country. I do not think it will be one-size-fits-all in Canada, let alone bringing in a model from another jurisdiction because it worked well in Iceland. We would not try to fit that to coastal Canada.
The Chairman: We will certainly put that to the test over the coming months.
Mr. Minister, you have been a great sport this evening. You touched on a great number of areas with openness, candour and forthrightness. We appreciate the extra special time that you have given us tonight. We hope we can invite you again in the future.
In the meantime, if you are agreeable, twe would like to get your officials in from time to time if we do have questions that come up. I think you know where we are heading with this study that we are doing. We want to be able to suggest to you as minister to do the right decisions now. I know you want to hear it from us; that we do not say in 10 or 20 years' time from now, why did we not look at this alternative or consider this when we made those decisions.
I will say to Senator Adams, if 10, 15, 20 years ago we had looked off their shores and made slightly different decisions back then, your people might not be looking from shore at sudden interests fishing off their shore.
We try to look into the future. I know you are trying to do the same thing. We hope we can be helpful over the coming months. Thank you very much for appearing here tonight.
Mr. Regan: Thank you.
The Chairman: Do you have a comment?
Mr. Regan: Thank you very much, Mr. Chairman. I am referring back to Senator St. Germain's earlier comments — some often say this is a challenging job. There is no question I need all the help I can get.
The committee adjourned.