Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 5 - Evidence, April 21, 2005
OTTAWA, Thursday, April 21, 2005
The Standing Senate Committee on Fisheries and Oceans met this day at 10:47 a.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.
[Translation]
The Chairman: I call the meeting to order.
In October 2004, the Senate gave the committee an order of reference to examine the issues relating to the federal government's new policy framework for managing Canada's fisheries and oceans.
[English]
I would like to make a few comments for the record before we go to the witnesses. I know of no members on this committee who would serve this committee if they felt that our objectives were to fatten the pockets of investors. We are here to enrich people's lives rather than investors' pockets. We have a responsibility to the communities. Some coastal communities have existed for hundreds of years. The residents of these communities have been and are now largely dependent on the fishery. They have invested in building communities to serve the fisheries and invested in schools, restaurants, houses, and municipal services, and the list could go on.
The question is: Does government have the moral authority to redistribute the fisheries resources to enrich those who have no attachment to these dependent communities? We question the necessity of choking the livelihood of the residents of hundreds of communities, of creating a situation in which people are forced to move elsewhere and replacing that way of life with an industrial fishery with a dubious track record. We must remember that most of the northern cod was under an industrial model when it collapsed. I think we owe it to all Canadians to determine whether there are other models worth evaluating.
In fact, Canada is a signatory to international documents that require it to take into consideration the socioeconomic impact of its decisions on coastal communities. One of these documents is the International Law of the Sea.
Having said that, we wanted to meet with witnesses from coastal communities, and we are very pleased to have with us this morning His Worship, Mayor Allister H. Hann of the Town of Burgeo, Newfoundland and Labrador. Mr. Hann is accompanied by George Reid, Burgeo's deputy mayor.
As most Canadians know, in the early 1990s, the Atlantic groundfish fishery experienced a massive collapse, what was referred to by some people at the time as ``a disaster of biblical proportions.'' The committee is very interested in hearing what you have to say about your experience and how we can do things better so that these kinds of disasters do not happen again. Perhaps we can learn from your experience so that we can, as parliamentarians, do a better job and not let these kinds of things happen again.
Your Worship, we welcome you to the committee. We look forward to your presentation and to possibly entertaining a dialogue through questions and answers after your presentations.
His Worship, Allister J. Hann, Mayor, Town of Burgeo, Newfoundland and Labrador: I would like to thank the committee for giving Deputy Mayor Reid and me the opportunity to attend here today to give you some insight into what has happened in the town of Burgeo — or, as I should say, the beautiful town of Burgeo; and prior to 1992 I could have used another adjective: the prosperous and beautiful town of Burgeo; but I have had to drop one since then.
For those of you who are not familiar with Newfoundland, Burgeo is located on the south coast. It is ice-free 12 months a year; and, to put the geography in perspective a little bit, we are not that far from the islands of St. Pierre and Miquelon. It is on that same stretch of coast there.
Prior to 1941, Burgeo, like most towns, depended on salt and sun to cure the fish. However, in 1941 Burgeo started to evolve into what was called the ``fresh fish'' fishery. I want to go into this, because I think it is important to bring out the historical background that Burgeo has in the fishery. Prior to that, it was a case of schooners carrying salt fish to Madrid, Cadiz and the West Indies.
In 1941, Fishery Products brought a ship to Burgeo and they moored that vessel; that was our first fresh fish plant. Fish started to be frozen; they had what they call brine freezers. However, on November 5, 1942, Guy Fawkes night, the vessel caught on fire and burned.
In 1943, Fishery Products built a plant onshore. The company stayed in Burgeo; and along with that, during that period from 1943 to 1955, we saw the introduction of the trawlers, the otter trawlers as they are referred to. Burgeo was a pioneer in that field right back then.
However, in 1955, Fishery Products decided to consolidate. They moved out of some of the towns they were operating in, including Burgeo. The Lake Group, better known as Spencer Lake, who later went on to be the president of the Fisheries Council of Canada, operated the plant in Burgeo from 1955 to 1971. Between those dates, there was also another plant built in Burgeo, a large herring production plant built by National Sea Products and the Lake Group.
In 1971, the union moved into Burgeo. There was a very bitter strike, brother against brother and one against the other, which carried through 1971 to the point where Mr. Lake closed the plant and pulled out. National Sea Products followed up by taking over the plant; and in 1976 they built a very modern plant in Burgeo.
However, in 1990, National Sea Products started to move out of the harvesting and get more into the finished product, so they moved out of Burgeo and Seafreez Foods Incorporated took over the Burgeo plant in 1990. Then in 1992, the cod moratorium came along and the plant closed. It has remained closed ever since, except for a brief period in 1999 when we opened as a crab production plant.
Until 1992, the more than 400 fish plant workers in Burgeo worked 52 weeks per year. It was not a seasonal plant; it was a 12-month plant. At the time of the fishery closure, our community depended on the trawlers for 99 per cent of raw materials. That was because our fishermen had adapted from the old method of hook and line to the new deep-sea trawler technology. Burgeo had approximately 75 full-time trawler men.
We were so busy that usually there would be a trawler docked in Burgeo on Christmas Eve, to fill in even that period between Christmas Eve and New Year's and the time when the holiday season would be over. This just gives you some idea of how productive our town and community was back in that time.
Senator Watt: Did you say 1992?
Mr. Hann: Yes, up until then.
In the first couple of years of the moratorium, I do not think reality really settled in with the people. They felt that some morning they would wake up and the fish would be back, the plant would reopen and life would go on as it usually had.
However, on March 6, 1994, which could be referred to as Black Sunday for Burgeo, the remaining trawlers were towed out of our community, never again to return, but to be scrapped. The realization then set in that the fishing industry in Burgeo would never be the same.
We scrambled to get into different things. An industrial adjustment services program was set out; there was brainstorming; there was everything. The community pursued alternatives to the groundfish fishery. We looked at seals; our owner, Mr. Barry, was prepared to put a seal tannery in Burgeo. However, he wanted certain commitments. One was an increase in the seal quota. The other one was that no pelt should be put out of the country unless it was processed to the garment stage. The provincial government did not go along with that, and the federal government did not go along with increasing the seal quota: therefore, we did not get the seal tannery.
We also pursued redfish in NAFO area 30; there are very small redfish in that area. However, we were not able to get the quota. Fishery Products International was the holder of the quota. They had not fished it for years, but maybe some day they would use it; so they just sat there and held it and we could not get into that field.
We also tried Argentine; we tried to get into that one. Again, there was nothing we could do. There was a small body of clams there in the Burgeo area but not abundant enough to carry on processing there. Crab and aquaculture we also experimented with, but unsuccessfully.
However, September of 1998 saw our best hope since the plant had closed. We were apprised of a phenomenally large crab resource outside 200 miles. It was not being harvested and could possibly be our saviour should we be so lucky as to get DFO to listen to us. A delegation of representatives of Burgeo went to St. John's several times. We met with Minister Dhaliwal and everyone we could talk to. We lobbied and had many meetings provincially and federally.
An exploratory fishery was carried out in the fallof 1998, which was very successful. It showed a lot of crab. In 1999, DFO increased the crab quota outside 200 miles by 3,500 tonnes, which was what we needed to get our plant going. The union and DFO and the harvesters were fully aware that this increase was due to the efforts of Burgeo; it really was.
Deputy Mayor Reid was also in on this and he can verify this. I think that DFO would have preferred that that quota be assigned to Burgeo, and we wanted it assigned to Burgeo. We did not care who harvested it as long as we got it in our plant. However, on March 17, 1999, the union and the harvesters met in Gander and divided the 3500-tonne increase among themselves. Burgeo was not represented and we did not get one crab leg.
In 2000, the crab quota was reduced and with it our hopes of ever getting into the crab fishery disappeared. The owners at the plant had invested close to $10 million into getting the plant ready for what they thought was going to come through, but no luck.
Senator Watt: That was again in 1999?
Mr. Hann: In 1999, that is when they got the plant up. Except for just six weeks of production, I believe it was, that is all that was ever done with it.
I look at it this way. Under DFO's vision for sustainable development, it discusses promoting a co-management approach with stakeholders. DFO should partner with, and consult, stakeholders, stakeholders being the communities and all the people who live in these communities, not only the union, the processors and the harvesters. Processors and harvesters go wherever the grass is greener. There are certain people who are not directly attached to the fishery; however, they still depend on the fishery.
These types of partnerships as a part of the fishery of the future will give communities some leverage, a negotiating tool in which to build relationships with operators that will produce longevity in their operations. It will also build responsible ownership, stability and accountability.
The community of Burgeo has had the catch capacity of five deep-sea trawlers taken away with nothing given back to the town in return.
The operator took our groundfish quota to Canso, Nova Scotia, and to my knowledge he has now pulled out of Canso. Even if groundfish were to come back in more abundance today than ever before, we would have nothing. Mr. Barry still has his hands on that quota. Traditional plants such as the one in Burgeo should not be discarded. There has to be something for them. The fishery must be managed differently and for the good of all.
When Burgeo lost its trawlers and the harvesting capacity along with them, it spelled the end for our offshore plant and its ability to be self-sustainable.
Other communities where offshore plants were shut down experienced similar fates. What was the difference? They were provided with a generous development fund. Some had been given reasonable quotas, such as St. Anthony Resource Incorporated, that is one place. This was attempted by us but without success. Except for Burin, many of those plants were new entrants when compared to Burgeo. That is a fact. When we look at Harbour Breton, Grand Bank, Fortune, Marystown, Atlantic Fish, the premiere of the province had to bring in all the plants that were there and were sustaining and got a sugar company to build one more plant. As far as I am concerned, today that plant is producing our fish. This is what happens sometimes when too many people get into a fishery.
When Burgeo tried to get into the crab fishery in 1999, we were considered to be the last in. Therefore, we had to be the first out. However, in the groundfish fishery we were the first in, but we still were the first out. There has been an imbalance there.
I will just give you a list of what some of the towns have gotten. St. Anthony got a 3,000-metric-tonne enterprise allocation of shrimp for the region. Trepassey, which was John Crosbie's district — I can be political, too — received a $7 million diversification fund. Burin was given a $12 million development fund, plus secondary processing, plus a refit centre for trawler vessels. Grand Bank was given a $7 million diversification fund. The little town of Gaultois was given a 3,000-metric-tonne redfish quota, plus a $5 million diversification fund.
The other towns came out of this with something. I remember when I became mayor of Burgeo. One of the first things I did was lay this on to the government. I got a letter back from Mr. Pettigrew, the most ridiculous letter I would think anybody could write. Here is a town that had lost 400 jobs and he advised us that we had received so many make- work projects to build a walking trail. How can you compare 400 profitable jobs with a make-work project? It was an insult.
In the Town of Burgeo today, in 2005, our main employers are the Health Care Centre and the school. Approximately 200 people now work in the seismic and oil rigs in Alberta from November to April. Approximately 50 people work at apple picking and fish plants in Nova Scotia, New Brunswick and Prince Edward Island. Our population in 1991 was 2400. At the last census in 2001 it was 1782. I imagine we are down to probably 1600 at this time.
Our school enrolment in 1992 was 661; in 2005 itwas164. Graduates in 1992 were 56; graduates this year are fifteen; with six people entering the school in kindergarten in September.
I think I have filled you in pretty well. It is just not words when you hear that towns are locking up and moving. The proof is there to be seen.
Mr. George Reid, Deputy Mayor, Town of Burgeo, Newfoundland and Labrador: Mayor Hann basically told you Burgeo's history and the things that were done since 1992 to try to get things moving. I want to concentrate mainly on some of the policies that we saw that have been wrong in the fisheries. I am not really good at giving speeches, so I will read this.
The purpose of this committee is to study the federal government's emerging policies for managing Canada's fisheries. In order to make policies for the future, one should look at the problems of the past policies. I will use the Burgeo situation to demonstrate the grave injustice of some of your past policies in the fisheries.
In June of 1990, SeaFreez was given 36,000,390 pounds for the Burgeo plant, and 40,000,320 pounds for the Canso fish plant in Nova Scotia. In addition to that they were given 252 million pounds of underutilized species.
To make a long story short, in 1993 the federal government — I want to emphasize this — gave SeaFreez the right to transfer all Burgeo quota to Canso. That decision by the federal fisheries minister sealed the fate of Burgeo. The people of Burgeo had put their future in the hands of the federal government. The existing policy of managing fish quota is wrong. Quota should not have been given to companies to use at their whim. The federal government should not have the power to destroy towns by taking away their resources.
When quotas are allocated, strings should be attached to them, and a town should play a major role before changes can be made. The fish is a resource of the people, not of the federal fisheries minister, nor of the company. This fundamental principle is overlooked by those in control.
It always has been, and I hope you people are in a position to change this type of thing.
In 1990, when Seafreez bought the Burgeo and Canso plants, they bought the quota and not the other assets. It took them three years in Burgeo to prove them right. It took them ten years to prove them right in Nova Scotia because it is rumoured — we heard, through the grapevine — that the Nova Scotia government paid Seafreez a million dollars a year for the ten years of operating. After that ten years was up, they moved out of Canso.
If Seafreez admitted 50-cents a pound on the Burgeo deal in one year, that deal was worth $18 million. Taking the quota out of Burgeo was like robbing the bank, and this robbery would come with the blessing of the federal government. It should never have happened. I have said this time and time again: it is a case for the RCMP. In fact, over time, it will prove to be worse than the sponsorship scandal. Eighteen million-dollars in one year was just the cod, not the 250 million pounds of underutilized species.
In its own right, it deserves a full investigation to determine where the responsibilities lie here. People have lost their livelihoods, and towns have lost generations of their young people.
We are talking about a renewable resource in a community where people are not interested in becoming millionaires. We all buy lottery tickets, but we are not interested in becoming millionaires. We want to make a living. In Burgeo, I do income tax for the guys there. If you see a $20,000 person, you have yourself a fellow making a lot of money. People are making $15,000 or $12,000; two of them in a family are making $20,000, and that is what they are living on. They just want to make a living and stay in their community.
I think rural Canada does exist. It sounds like Burgeo with all its infrastructure should not be allowed to die. In Newfoundland, we are living in a fishbowl. I have always equated it to that. We cannot make a living in fisheries. We have been sitting in the Atlantic Ocean since 1492, but we are at the stage now where we cannot make a living. It is shameful.
The present policies are not right. If and when the groundfish come back, what quota will Burgeo get? There is no hope for us under current policies.
There are many federal fisheries policies of the government that are wrong. There should never have been any factory-freezer trawlers. That was mistake number one. The fishermen said that, yet the federal government allowed those trawlers to be built, thus destroying what resources were out there.
There should be no deal with foreign countries to catch within the 200-mile limit. I will give you a statistic here. In 1968, 30 years ago, approximately 3.2 billion pounds of cod were taken by foreign countries. Canada's catch was merely 0.6 billion pounds. This policy is continuing today as indicated by the fact that 15 foreign nations are given quota by Canada this year to fish on Newfoundland's Continental Shelf. I do not think we have moved ahead very far in our relationship to try to protect the 200-mile zone here.
Policies should be made with community bias. If you want to make large returns on your money, you should invest in the bank, put it in the oil companies or put it into the insurance companies. There are many places where you can put money and get 10 or 15 per cent on it. That is not what we want in the fishery. People just want to make a living. I think the fish resource in Newfoundland should be a rural thing. We seem to be looking after everyone else's poor people; yet charity begins at home.
When I was writing this up, I was talking to my wife about this quota, and she thinks that the Senate does not have any power. I had to tell you that, because that is what she told me. I sincerely hope that you prove her wrong within this coming year, as you set this in motion.
Thank you for this opportunity and I welcome any future discussions on this issue.
The Chairman: Thank you both for your most heartfelt presentations. This is exactly the line that we want to pursue: the impact of past decisions on our communities, hundreds of communities up and down the Atlantic Coast and the West Coast, as well as inland, as you will find out later on. Let us look at the mistakes of the past and see if we can at least not repeat them, and let us prepare for distributions, if there are any to be done in the future.
On the comment of whether we have power or not, that is debatable. We will see what happens, but we like to think that we can influence the decisions of the powers that be. I know that every once in a while we get frustrated with the way decisions are made, but we never give up. We would not be here if we did.
Having said that, I would like to go to my first questioner, Senator Charlie Watt, who is from the Nunavik area of Quebec.
Senator Watt: Welcome. You have painted the picture in such a way that it makes it quite clear what is happening to your community and what could be happening to other communities also. I, for one, am from an isolated community, so I can understand what your community has gone through. It is not always easy to try to remain alive and sustainable when there is a lack of economic opportunities to allow you to feed your families. I believe that is what we are dealing with here.
I can also associate with you when you say that people are not looking to become millionaires, but that they would like to make a living, stay within their communities, and continue to exercise their culture and retain their identity. That frame of mind is very important for people.
The way you have described what has been happening from 1955 to today shows that there was, I believe, success and the community was making a good stride and was making a success economically in the past. Now, however, your experience is different. It has reached the stage, if I understood correctly, that communities are almost down to the point of nonexistence. That is something I personally can associate with, coming from a community with the same kind of population as you have described. It goes up and down, depending on what is there in the community.
After what I have heard from you about the stage your community is at, if the present policy remains, things will not get any better, but will get worse; and that policy is bound to have an influence on the other communities as well. Maybe privatizations and competing with large corporations are also happening in the same capacity, and if the emphasis is continuously put on a corporation's ability to look at it from the economic standpoint rather than on one that is community-based, the policy needs to be looked at. Certainly, some committee members wonder whether that policy is going in the right direction.
However, we are questioning whether we have the power as senators to do something about it. That is one area where remains to be seen whether we will get the attention of the authorities to say this is what is happening to our communities along the coasts, and that it should not be happening.
We have to find a solution, especially when they are not putting back what they have taken out. If I understand correctly, no alternative has been put forward that would restore the past economy.
Can you tell us anything about what will become of your community? I understand that the community still exists but that the numbers are declining and school enrolment is declining every year.
If that happens to one community, it will happen to other communities as well, not only in Newfoundland but all along the coast, because that is where the people along the coast derive their livelihood. This also applies to the Inuit in the Arctic. We are in a similar situation to you. We would like the allocation to be given to the community rather than to corporate interests. As you know, one corporation, owned by one person, can own a lot of quota.
I agree that the policy must shift more toward the community base. Whether we will be able to do that remains to be seen, but I believe that the objective of this committee is to focus more on the community base.
If no opportunity arises, what would you like us to do? We could ask the Department of Fisheries and Oceans to rethink their policy. Can we save the community by doing that?
Mr. Hann: If something is not done fairly soon, our town will disappear. That is obvious. One does not have to be very smart to know that. The mistake was made in 1992 when the crisis started. When money was given to people to tide them over for a period, the fishery should have been put on the front burner. The province and the federal government should have drawn up a master plan. Everything that has happened in the fishery has been haphazard. When something has happened, the government has responded to it, but there has never been a master plan. Municipal, provincial and federal governments have to put more emphasis on the fishery, given its importance to Atlantic Canada. There has to be a plan drawn up.
We have made several suggestions. One was made to Mr. Dhaliwal, I believe. You have often heard that crab is harvested with soft shell because it is too late in the year. As I told you, Burgeo was a 12-month plant. We have no ice on our coast. We suggested to Mr. Dhaliwal that we try a winter crab fishery. He said, ``Do you mean to go to the Grand Banks in the winter?'' I said, ``We have been doing it for 50 or 60 years. It is no more to go to the Grand Banks to get crab than it would be to get groundfish.'' We wanted to experiment, but it seems like we are always talking to deaf ears. No one listens to us; no one wants to try anything.
If they had accepted that suggestion, we could probably have a winter fishery. The crab would have been harvested at its optimum for marketing. Let us get clear of the 65-foot boats. We always had 125-foot and 150-foot vessels. For those not familiar with the Grand Banks, the only problem in the winter is going down and coming back. When you get down there, it is warm. It is closer to the Gulf Stream. Coming back you sometimes run into icing, of course.
Fisheries and Oceans could have gone along with that. Some of the ports on the island may not have gone along with it, because they were not familiar with fishing in the winter. That was an opportunity for Mr. Dhaliwal to do something for our town.
I cannot understand people owning what is in the ocean. It is a common stock. Farm land is different. The farmer has to plant and harvest, but out in the ocean it is the big farmer above who does the planting, and we do the harvesting. It is not theirs. People have to understand that they do not own this. The federal government is the manager and they have to take a firm stand.
I have an article here that I will leave with you. You may have read it, because Senator Baker's daughter wrote it. It is called ``Changing the Water on the Beans,'' by Averill Baker. It is a pretty good article.
There is lots of product out there, but we have to take some stern stands.
Mr. Reid: It seems to me that most of the fishery licences and quotas have been given out on a political basis. They have never had the communities in mind. When you leave Port aux Basques and go down to the Burin Peninsula, Burgeo is just about in the middle. A highway connects us to the Trans-Canada. At one time there were 15 or 16 plants along that coast. Today, there is a small one in Port aux Basques. The one in Harbour Breton just closed down. You will want to hear from them in the future. There is nothing else in between. All those plants are gone. They are gone, of course, because of the cod moratorium, but instead of giving some of these plants crab licences, they gave all the crab licences to the East Coast. I heard the other day that on the East Coast of Newfoundland there are four crab plants within 40 kilometres. That is crazy.
The Chairman: Under Canada's oceans strategy, coastal communities are to be actively involved in the development, promotion and implementation of sustainable oceans activities. You might want to keep that in mind. The United Nations Convention on the Law of the Sea, of which Canada is a signatory, recognizes the importance of the connection of coastal people to the sea and calls upon states to consider the economic needs of coastal fishing communities. That is the second thing you might want to keep in mind. The UN Food and Agriculture Organization's code of conduct for responsible fisheries recognizes the important contribution of small-scale fisheries to employment, income and food security in fishing-dependent communities, which should receive preferential access to fisheries. Canada is a signatory of that as well.
Mr. Hann: This is the first time that we have ever been asked to have any input into the fishery. Any other time we have had to go and ask if it is possible for us to meet. Then you might get half an hour, or something like that. This is the first time that any group has ever asked us to have input.
The Chairman: The whole thrust of our study is in fact on communities.
Mr. Reid: I have one comment on these quotes. These quotes have no backbone. It is just like someone writing up someone just for the sake of writing it up. Someone else reads it and says they understand. That is the end of that. This is what we have found.
The Chairman: This is why these documents should not be signed if we are not going to look up to them.
Senator Mahovlich: I do not think I have ever been to Burgeo. You have mentioned St. Pierre and Miquelon being close to your area. Are they having difficulty, as you are? I know they are part of France. Are they more prosperous than your town?
Mr. Reid: They are, sir. We understand that they have their own quotas. They have their own boundary that was given to them back in 1993.
Senator Mahovlich: Are their quotas different from your quotas?
Mr. Reid: Yes, they have their own quotas, and they have their area around their islands. My understanding is that they are still catching Atlantic salmon at sea. This has been stopped in Newfoundland for 10 or 15 years, but they are still doing it.
Senator Mahovlich: Does our government allow that? Do we have an agreement with them?
Mr. Reid: I do not know, sir.
Mr. Hann: Where it comes in between Newfoundland and St. Pierre, they have what they call an equidistant line because you could not get the 200 miles; so there is an equidistant line there within which they are supposed to stay.
France has put a lot of money into St. Pierre and Miquelon and their tourist industry is booming like you would never believe. That has been supplemented. St. Pierre and Miquelon's dependence on fish is not what it used to be. I do know that they charter out a lot of their harvesting. The Nova Scotia fleet, out of Sambro, have been catching St. Pierre's quota of halibut and so on. How that works, I do not know. I suppose they harvest it, probably send so much of the money back to St. Pierre, and carry the fish to Nova Scotia.
To my understanding, St. Pierre and Miquelon today is very much into the tourist industry. They just had a new vessel coming on this year, and with flights out of Nova Scotia into there and tour boats and so on, everyone visiting thinks they have gone to France. It is an attraction, and I say good for them.
Senator Mahovlich: Do they still have the gendarmes there?
Mr. Hann: Yes.
Senator Mahovlich: Is there any kind of recovery on shellfish in your area?
Mr. Hann: Lobster has never been that big in our area. It is mainly just groundfish. That is in the local area. Again, when we were given a quota to steam a long distance in the last years that our plant was in production, a lot of our boats were fishing down in Labrador. They steamed down there and fished on the Hamilton Banks.
Senator Hubley: I sincerely thank you for bringing to us the perspective of the small fishing communities of Newfoundland. What is happening in your community is probably happening in many other communities in the Maritimes.
Is having a community-based licensing system, in other words having the quota identified with a community rather than with individual fishermen or larger companies, how you see the most effective way of handling the fishery for rural communities?
Mr. Reid: Yes. That is the idea that we have been tossing around. We think that if it is tied to the community, then the entrepreneur has to stay there, basically. If he does not stay, then someone else will move in and do it. That would be the hope. The way it is now, if there is something he does not like, or the bottom line is not to his liking or he knows that with modern technology he can do it better at another plant, then he can just take this from this one, that from that one and close them up.
With this Seafreez that we have been talking about, that is what has been going on. They have been buying plants all over, operating them for a year, closing them down and moving the quota out into more productive areas where they can concentrate. They do not worry about the people.
Senator Hubley: Should a quota also have a provision for the processing? In other words, if a community is given an allocation, should it then be their choice to process that before it goes anywhere else? Would that be part of the equation?
Mr. Reid: Our point is not that the community must process it. The entrepreneur can still be there. He can still run his company and be assured that he has that. But what he has to do is stay there and do it. All we are asking is that the community have some say; if this guy says he will not operate it any more, okay, fine; he does not operate it so he cannot have it any more. Right now, if he says he will not operate it any more he can take it and go on to some other place. Therefore, we are left with nothing. He just takes our livelihood. That is what it is like now. There is something wrong with that.
Senator Hubley: To prevent that from happening, the community then should be able to tell him to go, but that, unfortunately, he cannot take your quota or your processing capability with him; is that right?
Mr. Reid: Exactly.
Senator Hubley: How would you foresee the organization that would administer the quota? Would it be through your municipal government or would you have a fishing organization? If it is going to the community, would the community then have to make the decisions on how that quota will be used and which one of your local fishermen, or all of them, will share in that? Who will make those decisions?
I am not saying that it would happen, but if the decision making gets too far away from the community then it is no longer going to benefit that community. Within the municipal structures that you obviously have, how would you see handling that?
Mr. Reid: The way I would see it is that the federal government gives the control of the quota to the municipal government. They would keep their hands out of it as much as possible. An entrepreneur would come in and would have to agree to operate the facility if he got the quota to do it. We would have the quota and would tell the entrepreneur that he can operate this facility with this quota but it cannot be taken out. If he stays for 10 years or 20 years, it does not make any difference. The quota basically is until he decides that he will move and then he realizes it is not his anymore, but stays with the community.
Senator Hubley: For the fishermen themselves, do you see any of your community fishermen going out to actually get the quota to bring it back? Is that how that would work?
Mr. Reid: Up to this point we do have inshore fishermen in the Burgeo area and they have IQs. When we had our fish plant operating we did have five trawlers. Now, how the fish get caught and who catches them is really not a major concern of ours.
I am sure that if it was given to the inshore fishermen to catch, that would be fine. If the company themselves had draggers to catch it with, that would be fine. We are not really dictating who will catch it. We are dictating that you cannot move it away from there.
Senator Hubley: In your instance, it is more important that you control the processing of the fishery rather than that the people from your community are actually going out and doing the catching?
Mr. Reid: Yes.
Mr. Hann: Who catches it is not that important. For example, if the Town of Burgeo got X number of tonnes of fish to catch, and there were fishermen out there, they could make application to fish that quota, and there would be no problem.
Having said that about community quotas, I would like to add that it would have to be structured in such a way that towns could not then go around and hold this over the heads of theprocessors either. Say a processor comes in and sets up in your town in 2006 and then halfway through the year the town says, ``We don't like you now. Get out,'' and the town goes off and gets another one. That would not be right. There would have to be controls there as well, because this thing can swing the pendulum from one side too far to the other side. There is a happy medium and a structure that I am sure we could sit down and put in place whereby, in order to get rid of a processor, there are certain things he would have to do, such as not fulfilling the commitment that was there. Setting up a processing facility costs money. It would not be right for someone to come in and invest his or her money in a business only to have the municipality at the end of the year say, ``We are not going to have you back next year.'' There would have to be controls there. If the brains were to get together and work on this problem, they could solve it. These are just logistics that could be figured out, and it will work as far as I am concerned.
Senator Hubley: When you say ``the brains,'' are you referring to people from your community?
Mr. Hann: That would be part of it. It would be the processor and the federal government. This is never going to happen, I am sure, because the federal government would have to put their arms out and say, ``We are taking all of our fish back. None of you have anything. We will start off with a new sheet.'' I bet that would strike the news tomorrow, if you said that. However, as far-fetched as it might sound, that is probably what will have to be done. This bolting along, hit or miss, is not working. It will not work. There has to be some good structures put in place, in my opinion.
The Chairman: We will now turn to Senator Peterson. He is a new senator, and he is new to this committee.
Senator Peterson: Yes, I am new. This is my second day. Good morning, gentlemen. My home province is Saskatchewan, so I can relate to the agony you feel in watching communities slowly wither away. We have had that in our farming communities, where we have had frost and drought and grasshoppers — you name it — with commodity prices being low and people struggling just to survive. This morning we had a committee meeting with cattle producers, who are also facing the same problems in what they can do for better controlling the product that they have in terms of slaughter facilities and that sort of thing.
You had indicated earlier that, if the fish come back, Burgeo is still out of the picture. Were you referring to the quotas we were talking about earlier? Could you further explain what could be done to keep you in the picture or bring you back into the picture?
Mr. Hann: We do not have a quota any more. The quota for the fish that we used to produce in Burgeo is attached to Mr. Barry. He was our operator. If Mr. Barry comes back into Burgeo, he will have the quota. Deputy Mayor Reid mentioned something about 36 million-pounds of cod. No doubt there is not 36 million pounds there now, because that was all down-sized when the moratorium came in, but the quota is sitting there. If the fishery ever comes back again, as I understand it, then Mr. Barry's quota would go back to 36 million pounds. That is his, not Burgeo's. He can take that and go wherever he likes — Canso or Lunenburg, and Burgeo is still out in the cold. That is what I was referencing there. There is no mechanism now to make him bring it back. You mentioned you are from Saskatchewan. I can identify with you. I watched a program on television where they were tumbling down the grain elevators. That is the mark of a community dying in Saskatchewan. That is a big problem. Imagine putting in a few Spaniards and Faeroese and Japanese and letting them come into Saskatchewan now and take away half of your land and start doing the farming out there. Would the Saskatchewan people be happy then? That is what we have. We have all these people in our fields.
The Chairman: Thank you for the interesting questions. The analogy between the two is similar.
Senator Johnson: Good morning. I lived in Newfoundland for many years, so I am very sympathetic to you, of course.
In 2000, you gave a brief to the minister, and it listed five communities that received these grants for diversification purposes. Can you tell me how these small communities have fared? For example, Trepassey got $7 million for diversification. This was done to shore them up. Do you know how this has helped or what has it done for these communities? It has been five years now.
Mr. Hann: I will start with the ones I went down through. St. Anthony is right on the tip of the northern peninsula. They got a 3000-metric-tonne enterprise allocation of shrimp. St. Anthony is doing well, make no mistake about it, because it had that core species. What we need is a core species. If you can get one species that can get your plant going, then you can bring in what we call scrap fish and produce and still make a dollar out of it.
The town of Trepassey, as I understand it, got a $7 million diversification fund. They have a few industries, but they have not done well. I think one of the reasons for that is that Trepassey is not all that far from St. John's. The Avalon Peninsula in Newfoundland is booming. Make no mistake about it. When you go east of Grand Falls, things are completely different. They can commute.
Burin, as I stated, got $12 million. Burin has secondary processing and is coming along very well.
In Grand Bank, I believe Clearwater Fine Foods went to the surf clam there. When you have a few million dollars, you can go and talk to people about coming and starting something in your town, and they will probably come; but when I say I have no money and you have to bring all the money, you might say no.
Gaultois is not connected by road. It is an island. They are doing better than we did. They own their fish plant, and they have a quota of 3000 metric tonnes of redfish. Now, redfish is not a good fish at this time, because the Chinese, with their low labour, plug the market with redfish. When somebody is getting $25 and $30 a week, another processor who pays $12 and $15 an hour, cannot compete with that. The market in redfish is really bad at the present time.
In our last bid for a diversification fund or a development fund, we put a proposal to our MPs Bill Matthews and John Efford. We had them come in to Burgeo. We made a presentation to them. We had wanted a shrimp quota. Shrimp is fairly abundant, healthy, in good shape, and so on. We suggested that, if we could not process it, we could sell it in the ocean. We could sell it to China. It would not matter who. The money would come into Burgeo and we would then try to get some other industry, and it could have subsidized some industry. I have often said that even though we cannot make a car, perhaps we can make a spark plug, but we got nothing to work on.
Senator Johnson: Burgeo was given nothing in that diversification?
Mr. Hann: That is correct.
Senator Johnson: In The Western Star on February 22, the MHA said that the south coast has been plagued by unemployment and out-migration that has ruined many communities that once thrived. He said that if the premier were willing to look at finding a solution for Harbour Breton that includes a community quota then he must look in the direction of other communities, including Burgeo. He also said that Burgeo is the case of a traditional fishing community that should be considered for a community cod quota. Has that had any influence on your situation? Is there movement in that direction, do you think, or is it all talk?
Mr. Hann: I have not heard of anything.
Senator Johnson: This is right from the —
Mr. Hann: Yes, the MHA wrote that.
Senator Johnson: What about the fisheries institute for the North Atlantic that was unveiled recently in St. John's? Do you have any faith in their focus in terms of the fishery in Newfoundland, particularly affecting smaller communities?
Mr. Hann: I am a member of that organization and I am not too optimistic about it, although there are some good people, such as Dr. Leslie Harris and Gus Etchegary, who gave me some material to distribute that you can read later. He is a very knowledgeable man when it comes to the fishery. I do not know whether the institute will be able to swing it. They are taking a different approach by trying to put out information on the Internet to see if we cannot touch the people who have the power. Right now, a guy like me can come here and talk and get on the radio and talk. However, I am only talking to the people who are down at that level with no decision-making authority or ability to influence things. Mr. John Joy is a marine lawyer doing quite a bit of the work. It is one more forum to work through, but I am not overly optimistic.
Senator Johnson: Will you attend the big conference being held in St. John's at the beginning of May?
Mr. Hann: No, but our association will be represented there, and I have Gus's view on that. If we think for one minute that we will get all these foreign nations to come and sit down and say, ``Yes, boy, we really feel bad about Burgeo. We love Canada and we are going to stop fishing,'' then we are wrong. Do you think that will happen? It will not, will it?
Senator Johnson: At this time, Burgeo is just what you have told us. Nothing is changing and there are only five or six kids going to school.
Mr. Hann: The economy of Burgeo right now is depending on the Province of Alberta.
Senator Johnson: Will your people come back?
Mr. Hann: They are commuting back and forth now, but the time will come, sure as I am sitting here, that they will not come back.
Mr. Reid: The base population is down to 1,600 or so. I think in January and February there were about 200 who left, which means that it is down 1,300.
Senator Johnson: You really need the community cod quota.
Mr. Reid: Yes.
Mr. Hann: I will throw in this other thing about theout-migration. Right now, we have 20-plus vacant properties in Burgeo. We are estimating that in 10 years, if something does not change, there will be 120 vacant properties in Burgeo. How will you operate a town with 120 properties that no one is living in. You will not collect taxes from them. The kids have moved on and the parents have died. Those homes are just sitting there. You cannot shut off the water or collect taxes. This is staring us in the face.
As I explained to the chairman, I built a house in Burgeo in 1968. In many places across Canada, many people did the same thing. For most of them, 90 per cent across Canada, the values of those houses built it in 1968 have tripled or quadrupled, but the value of my house has gone the other way. In the rest of the country, people getting up into their 70s say they might sell their house and move to independent living because they can pick up enough when they sell to see them through. In Burgeo we do not have a chance of that. The best I can hope for is a rent-to-own, and then I have to stay alive for a long time or I will be dead before it gets paid for.
Senator Johnson: Besides the cod quota, based on what you are saying about out-migration, what kind of diversification would work? It is beautiful there. Do you get many tourists still coming from St. Pierre?
Mr. Hann: We are doing pretty fair, but not as well as we should be doing.
Senator Johnson: You need the cod quota. Is there anything else you can do in terms of diversification?
Mr. Hann: The only thing in Burgeo is that our people were used to working 12 months each year. On the northern coast they were used to six months of work and they looked forward to it. It seemed like our people wanted something tangible to work hard on. They do not adjust to another kind of activity easily. I do not know what the answer is, to be quite honest.
Senator Johnson: The problem has evolved for many years.
The Chairman: I have a couple of points and questions. Over time we have found DFO has rarely, if ever, considered communities as being stakeholders. When they talk about stakeholders, they will talk about the licence holders or about the unions as being stakeholders at times. That is about where it ends. As well, the department is actively promoting an industrial fishery, and has been for some years, not only within Canada but without Canada as well. The excuse being used now to not go with community quotas is that they are inefficient. I find that odd, because on the one hand they are saying they are inefficient but on the other hand they are agreeing that community quotas are efficient for Aboriginal groups. In other words, they are saying that it works for Aboriginal groups, but it does not work for other communities.
Senator Watt: That is not quite true.
The Chairman: We might consider those to be communal quotas. They are using that as a solution for communities. We have to develop a model for community quotas to determine whether they could be efficient.
At the present time, they seem to prefer having quota owners moving around, staying a few years, doing a fast write- off on the plant, then moving somewhere else to another community, where the government kicks in a few dollars, and they build a new plant and stay there a few years and move on again, leaving the communities hanging high and dry.
The government has to step in, put people on EI for a number of months and then try to come in with an adjustment program. At the end of the day, the taxpayer has to foot the bill anyway. This does not seem to be factored into the equation of how governments handle quotas.
That brings me to my question: Have you started looking at the mechanics of community quotas as to how would they work? Do you have the expertise in place in Burgeo, or do you know of other places where community quotas have been tried? Have you looked at their models to see the inefficiencies that they might have?
Do you know how the contracts have been done with the harvesters and processors to make sure that these people are not dealt with unfairly? Have you tried to look at a network of communities that would try to get their own quotas so that you could band together and maybe arrive at a model that could be presented to government that would be efficient in terms of marketing and distributing the product, and so on?
What I am leading up to is whether there is any kind of model that could work for Newfoundland that would take care of a number of communities?
Mr. Hann: No. Regarding the specifics, the mechanics of putting something together, we have never sat down and itemized and drawn up a plan for that. In some of our meetings in council, I suppose you would call them brainstorming sessions or whatever, it had been discussed that a board would be set up independently, representing all of the sectors.
I sometimes think that the federal government would have to maintain control. We have also felt that, if this was done in our general area, it could be sort of on a regional basis. I do not think that every community can have a quota and a plant. You have to regionalize a little bit. In our particular area — I would not like that to be publicized too much — there could be some towns that could amalgamate and get together; but if you have an economic base somewhere, some of the people would be willing to move. It would be like moving from this room to that room; it is not a drastic move for them. I think you could bring communities together. It has to be straightened out on a regional basis as far as I am concerned. There is a place for it to work.
I think one country that has been very successful in the fishing industry is Iceland. Many people from Canada go over and look at their fishery. I do not know if they go over to look at the fishery just to have a trip to Iceland. However, I sometimes wonder if we should not bring some people from Iceland over to Canada and let them look at our fishery and tell us what is wrong with it. Those people are certainly doing it right. Whatever they are doing, they are doing right. Of course, they are coming over and getting some of our fish, too.
Senator Johnson: I totally agree with you. You are absolutely right.
Senator Mahovlich: There is someone from Iceland right here.
The Chairman: There is an Icelandic ambassador sitting at the table.
Mr. Hann: I do not care where they are from.
Senator Johnson: That was suggested years ago for Newfoundland; they never did it. There are some in Harbour Grace right now in the fish plant there.
Mr. Hann: What is going on in Harbour Grace is that they are coming in and catching the fish, freezing it at sea, and then bringing it into Harbour Grace and loading it and going back to Iceland.
The Chairman: We do know the privatization model quite well. We have looked at it and it has been studied and we know the advantages and disadvantages. However, very little work that I know of has been done in Canada to really look at the community-based model and the improvements that could be made on it. Very little seems to be done on that. Whenever we talk about the distribution of fish, it seems to be going in the direction of the industrial model.
With that in mind, you have raised the question of Iceland, which obviously we should be looking at; but what about Alaska? My understanding is that Alaska has a model of community quotas. Also, there is the Aboriginal communal model whereby the quotas are attached to a community. All of these models need to be looked at more closely, to see whether they can be made efficient. That is one thing that has not been done to date.
We do look forward to working closely with you on this in the future. You may have some more ideas as we look at this community-based model to see if it could be a possible solution for the future.
Senator Watt: To continue to dwell on that further, you talked about two brains getting together to try to find a solution to the problem. That is the first point. The government also has a tendency to have a one-law-fits-all approach, knowing very well that it will not suit all. Certain areas will become a victim of that approach.
Realizing that factor, there is also a third problem that I see about individuals holding a licence, and that is having too much ability to manoeuvre to wherever they want to go, to wherever the economy is. Keeping those points in mind, you also talked about regionalization. Even in the region, there are variations in communities; the ability to flourish economically varies from community to community.
On the set of policy directions that have been given now, we seem to have a pretty clear idea of what that is doing to the coastal communities. What we have heard from the witnesses, not only from your people, is that it is not working. It is impacting the community so hard that, the way you have described it, your community is almost to the point of non-existence.
Knowing that factor, while there may be a rule for one set of policies, you have to look underneath that to look at the community base, realizing the fact that even in the regions there are variations that have to be taken into account. It is time now to do something. Maybe this is something that the committee could wrestle with, in order to try to come up with some recommendations to the department to look at it more on the community basis. In other words, put the two brains together, fisheries and oceans and the communities that are active in the fishing industry, plus the municipalities, to try to come up with a solution to one particular community problem, rather than looking at everybody.
Maybe your community is a perfect example to show that a test case should be made now. Otherwise, if this goes on, you are already a victim of it. I am sure other communities are victims of it and there will be more. There will be no end to it. I would urge your community to look at that aspect of it.
If the individual person who holds the licence has an ability to go wherever he wants to go, regardless of impacting the community's well being, that is a little too much power in the hands of one person. I think Fisheries and Oceans has to come to grips with that and realize this is what is happening with this new set of policies.
You talked about the Aboriginal answer to that problem. I would have to say that is a partial solution, what is happening now, but it is not the whole solution. As you know, when you are looking at the Aboriginal communities, you might be thinking of a community base, but it does not necessarily mean that it is community-based; you go under the corporate structure. Again, there are certain problems related to that.
We need to find a much better solution to bring back what we do with this overall policy. Do we allow the government to continue to set up one sort of a policy that fits all, knowing that that is not the case? We must move in the direction to enlighten our people who are doers in terms of formulating policies, to make them aware that, if we go on in that direction, it will not be useful to the coastal communities, let alone for the economic wellbeing and the social wellbeing of the Canadian people.
Can you elaborate on that? Would you say this is where we should be trying to find a solution, bringing the two brains together? I do not know whether they can actually make a decision, but they can begin somewhere.
Mr. Hann: For sure, the problem will not be solved by doing nothing. That is a guarantee. I do think it is time that it should really be looked at by DFO. Maybe there should be a test carried out in one area to see how regionalization works. I really do not have the answer. However, like Deputy Mayor Reid said earlier, we are sitting in a fishbowl. Canada must be about the only country that cannot do well at fishing. All other countries seem to be doing well, except Canada. Why is Canada so screwed up when it comes to the fishing industry? That is a good question.
We had the fish. We gave our fish away. That was the worst thing we could ever have done. We should never have done that. Now there are so many claims. I know this for a fact. When I was a lot younger than I am now — and Mr. Reid can attest to this as well — at night, three or four miles from land, the biggest trawlers you have ever seen would tow up and down. It was just like a city out there all winter long. That is what we saw. Eventually, there was a 200-mile limit, but it was like closing the barn door after the horse was gone.
Of course, you have this thing about the Nose and Tail of the Grand Bank. What I have always said, and I will say it again, is that it is just like having a swimming pool: you are allowed to pee in one end but not in the other. It does not make much sense. That is what we are doing out there.
Mr. Reid: I think that idea is probably one of the better ones. I do not think you can go into every community and say you have a quota. Burgeo is on the end of a 146-kilometre road. This joins onto the Trans-Canada Highway. We are sitting on the south coast. Port aux Basques is there; the Burin peninsula is here; we are here. There are five towns. One of them, in the islands, is called Ramea. They had a fish plant. They have been trying hard to get something, but they got their plant years ago and they have had trouble with it. Their population is going down.
The other communities are small isolated communities connected by ferry. We consider ourselves to be the growth area for that part of the coast, if anything was ever going to happen on that coast. If we die, then the whole coast is gone.
The northern peninsula has shrimp or crab for four plants. There are four communities that take part in the quota. I think it is shrimp. They are doing quite well. That takes care of four communities. That is a regional quota, such as you are talking about. In our case, it probably would have to be a Burgeo quota attached to that community. That community would then become the growth area for the other little communities.
One of the other little communities has about 30 people; another has 120; another has 95; and another has about 600. I can say that if we had a quota for that region and it was done in Burgeo, those people would probably shift in there, if there was employment.
The scheme would be right. You would have different approaches to different areas. Some would be a regional quota; some would be a community quota. It depends on which area of Newfoundland you are talking about. You can look at the one on the northern peninsula and see that that is working quite well. However, a community quota such as one for Burgeo I do not think is a perfect example. They will not come out and say, ``We will test this.''
Having said that, if the committee will test for a community quota, I would like you to push the Burgeo area. If you are going to hear from Harbour Breton in the next week, they are basically in the same boat we are. They were cut loose. They were told their plant is dilapidated and it will cost too much to repair; they will move away from you and they are taking the quota with them. It is the same thing. They have the power to take it and run.
I think you are right.
Senator Watt: The important thing is to find the mechanics that need to be put in place and balance it on a case-by- case basis. In some cases, it might be regions and in some cases it might be a community. A proper feasibility study needs to be done at the same time as that is taking place. Aside from the economics, the cultural activities of that community are also important. That relates to social issues.
Mr. Reid: Back in 1992, when the moratorium happened, I thought that the Newfoundland government would sit down with all the brains that they had. They had about 300 plants. They said that half of them had to close. I thought they were going to get a committee to look at the growth areas of this island, the rural areas with all these plants, and get the entrepreneurs in to say how the plants were doing; which ones would close and which ones would stay open. Then they could have developed a scheme by which they could say that the quotas have to go here, because this will be the growth area.
I mentioned that to the Minister of Fisheries. His response was, ``No, we are going to leave that all to the entrepreneurs. If the businessmen do not think they can make that plant work, then they will shut it down.'' They did not want to take any responsibility at all. They wanted to get behind the merchants and say, ``I did not close your plant; he closed your plant.''
The Chairman: Leave it to the winds of the marketplace.
You would be wise to pick Senator Watt's brain some time, because he has done quite a bit of work in that very area with the Makivik Corporation. He would be an excellent person to consult.
Senator Watt: There is one more thing I would like to say. Off and on, I have heard people talking about other countries making a success of their fishing activities, so why can we Canadians not be the same? One of the simple reasons why we cannot be the same is the size of the communities and the size of the country. Those fishing activities in those other countries, such as Iceland, Norway and so on, is their primary occupation. That is what they focus on. That is their life, their livelihood. They do not look at anything else, practically. For us, everything is scattered out there. We have to look at it slightly differently. That is one of the reasons I think that ``one size fits all'' is not the answer.
Senator Hubley: I have already had my question answered.I would like to say thank you. It was very interesting.
The Chairman: Senator Hubley is the deputy chairman of the committee and is extremely interested in this subject.
Gentlemen, it has been an instructive meeting. It has been very helpful to us as we pursue our study of the impact of these policies on communities. The experience you have brought to us this morning, both your experience and the experience of the residents of your community, has been most helpful.
You have not painted a pretty picture. We have to decide as a country whether this is the way we want to treat our coastal communities. We have to decide whether we allow the marketplace to decide whether our communities survive or not, or whether we attach some responsibility to ourselves as to whether we want to continue to have viable communities such as Burgeo and others.
Members of this committee are leaning toward having viable communities, but that is left to be seen.
Thank you for your time.
The committee adjourned.