Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 9 - Evidence - May 10, 2007
OTTAWA, Thursday, May 10, 2007
The Standing Senate Committee on Fisheries and Oceans met this day at 10:54 a.m. to examine and report upon issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans.
Senator Bill Rompkey (Chairman) in the chair.
[English]
The Chairman: Honourable senators, I wish to welcome our witnesses this morning. As senators know, we are pursuing our hearings into the situation in Nunavut and the fishery in Nunavut. We are also discussing who gets what from the quotas, the various species, and the distribution of the same.
Today I am pleased to welcome our witnesses from the Nunavut Wildlife Management Board, which is an important organization for the conduct of the fishery in Nunavut. I am pleased to welcome Mr. Joe Tigullaraq and Mr. Jim Noble, who is actually from the West Coast of Canada. I thought he was from Green Bay, Newfoundland and Labrador, but he is not.
Senator Meighen: He is still a good fellow, though.
The Chairman: We will also hear from Mr. Michael d'Eca, who is the Legal Adviser to the Nunavut Wildlife Management Board.
Joe Tigullaraq, Chairperson and Chief Executive Officer, Nunavut Wildlife Management Board:
[The witness spoke in his native language.]
Since there is no interpreter, I guess I will switch to English, although I would prefer to speak Inuktitut, my first language.
Thank you for the opportunity to appear before you today.
The Chairman: Before you begin, I might say that one of our colleagues has introduced a bill to permit Inuktitut, in some form, to be spoken from time to time, as the rules will allow in the Senate. We have been dealing with that issue thanks to Senator Watt and Senator Adams. Maybe the next time you come back, there may be an opportunity. For now, we will listen in English.
Mr. Tigullaraq: Mr. Noble and Mr. d'Eca will be assisting me in answering any questions that the senators may have.
The Nunavut Wildlife Management Board would like to briefly cover three topics in our opening comments. First, I will explain the jurisdiction of the NWMB with respect to Nunavut's commercial marine fisheries; second, Mr. d'Eca will briefly review the recent developments that are helping to strengthen and modernize these fisheries; and third, I will set out for you four broad recommendations that the NWMB would like the Standing Senate Committee on Fisheries and Oceans to champion in any further report it may issue on the topic of Nunavut fisheries development.
I will begin our presentation with a thumbnail sketch of the role of the Nunavut Wildlife Management Board in Nunavut's commercial marine fisheries. First, let me make it clear that the NWMB's jurisdiction is primarily with respect to wildlife and fisheries management, including the allocation of fisheries resources.
Allocation recommendations and decisions by the NWMB in Nunavut's growing marine fisheries involve considerably more than management concerns. Those decisions must necessarily take into account fundamental socioeconomic, governance, business, employment and development issues. The jurisdiction, expertise and experience with respect to those issues lie with other agencies, primarily the Department of Fisheries and Oceans, or DFO, the Department of Indian Affairs and Northern Development, the Government of Nunavut and Nunavut Tunngavik Inc., or NTI.
Accordingly, it is important to keep in mind that the NWMB must rely heavily upon those co-management partners to exercise their jurisdiction effectively in order for the board to be able to exercise its jurisdiction effectively.
The Nunavut Wildlife Management Board is a regulatory agency composed of nine members; four appointed by Inuit, three by the federal government, and one by the territorial government. The chairperson is nominated by the eight members and appointed by the federal government.
Under the terms of the Nunavut Land Claims Agreement, or NLCA, the Nunavut Wildlife Management Board acts as an independent tribunal that makes most of the decisions dealing with fisheries management within the Nunavut settlement area, known as the NSA. The NSA covers all of Nunavut's land territory, except for a few small islands in Hudson Bay, all of its inland waters and all of the marine areas up to the outer limit of its adjacent territorial sea.
Within the NSA it is Nunavut Wildlife Management Board that makes decisions related to establishing, modifying or removing limitations on harvesting. With respect to commercial fishing, for instance, the Nunavut Wildlife Management Board sets quotas, gear restrictions and seasons. If a quota, gear restrictions or season needs to be changed, the proposal must come to the Nunavut Wildlife Management Board for a decision. The NWMB is also responsible for allocating commercial quotas inside the NSA.
All of the Nunavut Wildlife Management Board harvest limitation decisions with respect to fish are subject to review by the Minister of Fisheries and Oceans. Although it rarely happens in practice the minister can reject an NWMB decision. That rejection, in turn, must meet the conditions set out in the NLCA.
Outside the NSA it is the minister who makes all fishing management decisions, including setting commercial quotas, gear restrictions and seasons. However, the NLCA does provide an important wildlife advisory role for the NWMB outside the NSA, and the minister must consider that advice.
The NWMB's advisory jurisdiction extends to the east of the NSA, throughout the waters of Davis Strait and Baffin Bay subject to Canada's jurisdiction, that are not part of another land claim settlement. This area is referred to as zone 1. The NWMB's advisory jurisdiction also extends to the south of the NSA, throughout those waters of James Bay, Hudson Bay and Hudson Strait that are not part of another land claim settlement. This area is referred to as zone II in the NLCA.
As you are all aware, the waters of zone I are where most of Nunavut's commercial marine fishery resources are located. Accordingly, decision-making authority over those resources rests with the federal Department of Fisheries and Oceans. The NWMB exercises a strong authority there, but unlike the NSA it is advisory only.
As part of the NWMB's advisory authority, once the Minister of Fisheries and Oceans has determined the territory's regional allocations of marine resources, the NWMB recommends individual commercial sub-allocations for Nunavut's fishers. This arrangement is in keeping with DFO's evolving policy that decisions which relate to the management of specific fisheries will normally be made as close to those fisheries as possible.
As I mentioned at the beginning of this topic, in order for the NWMB to make informed, responsible allocation recommendations and decisions, it must count on its relevant co-management partners, most notably DFO, the GN and NTI, to exercise their jurisdiction in an informed and responsible manner. The NWMB must then rely upon them to provide appropriate advice to it with respect to fundamental socioeconomic, governance, business, and employment and development issues.
It is the development of that focused, cooperative and coordinated approach among relevant agencies, which the NWMB has been successfully encouraging over the last few years.
Before I turn to Mr. d'Eca for his presentation, I would like to invite the committee or a representative from the committee to a public hearing in Iqaluit on June 12 to 13. The topic of discussion will be off-shore fishery allocation policy development.
Mr. d'Eca will briefly review for you the exciting developments that have recently taken place and continue to unfold with respect to Nunavut's commercial fisheries. Following his remarks, I will briefly present to you the recommendations of the NWMB urging the standing committee to make in further reports it may issue on the topic of Nunavut fisheries development.
Michael d'Eca, Legal Advisor, Nunavut Wildlife Management Board: Thank you, Mr. Chairman. It is my great pleasure to appear before the Standing Senate Committee on Fisheries and Oceans once again. I think we have appeared before you at least one, if not a couple of times before. The NWMB is concerned that there still may be confusion, perhaps not among the committee members, but out there, over fisheries issues in Nunavut. As well as a perception, at least among a few uninformed people that the developers and managers of those fisheries are perhaps misguided and are not doing a proper job. I am hoping my brief review of recent development of Nunavut's fisheries will help demonstrate that Nunavummiut have come a long way in their struggles, that the developers and managers are doing a good and dynamic job and deserve this committee's continuing support in the ongoing effort to develop Nunavut fisheries for Nunavummiut and by Nunavummiut in partnership with the Government of Canada.
The deep waters of the north Atlantic adjacent to Nunavut, to which Mr. Tigullaraq referred, Baffin and Hudson Bay contain at least two species in sufficient abundance to support viable commercial fisheries. Those are Greenland halibut, what we call turbot, and shrimp. Unfortunately, and during the early years of their development, since approximately 1990, both fisheries were largely controlled by southern interests. As a consequence, the vast majority of the employment and wealth generated by these fisheries has consistently been exported to the southern Atlantic fishing industry.
In contrast to the situation in every other commercial marine fishery in Canada, Nunavut has never had majority access to the marine resources in its adjacent waters. While the territory's access to those adjacent resources has improved dramatically in recent years, Nunavut's share of those resources when you add it up is less than 49 per cent in 2007, compared to the standard elsewhere in the country of 80 per cent to 90 per cent or higher.
With respect to the allocations it does receive, Nunavut's involvement has been traditionally been confined almost exclusively to royalty charters each year with southern interests. Those interests inevitably fished the quota with their vessels and crews and, at the end of the season, sailed away with the majority of the profits.
Important changes have recently commenced, changes that finally signal true fisheries development for the territory. I will just run through briefly the last few years. Beginning in 2001, Nunavut has been provided the entire Canadian allocation of turbot in Baffin Bay and the northern Davis Strait, known under the NAFO categories as management area division OA. In the six years since 2001 that allocation has almost doubled. It started off at 3,500 tonnes, and is currently 6,500 tonnes. Nunavut's overall allocation of its adjacent groundfish resource in 2007 is 8,500 tonnes — 68 per cent of the resource — up from a mere 11 per cent in 1993, the year that the Nunavut Land Claims Agreement came into force. Since the NWMB has been on the job, that amounts to an increase of more than 618 per cent in approximately 14 years.
In 2002, the then Minister of Fisheries and Oceans formally agreed that ``No additional access should be granted to non-Nunavut interests in waters adjacent to the territory until Nunavut has achieved access to a major share of its adjacent fishery resources.'' That was a very important ruling from the minister. That same year, the minister released his department's new access framework, which recognizes the following three principles as paramount in all new or additional access decisions: conservation, recognition of Aboriginal and treaty rights, and equity.
In 2003, the Government of Nunavut and Nunavut Tunngavik Inc. completed the Nunavut Economic Development Strategy, which identified the fishery as a key growth area in the territory's future economy. In 2004, the Standing Senate Committee on Fisheries and Oceans issued a report entitled Nunavut Fisheries: Quota Allocations and Benefits, designed to, ``help ensure that the fishery develops in a way that is compatible with northern values, culture and lifestyles.''
In 2005, the GN and NTI followed up on their Economic Development Strategy with the release of the Nunavut Fisheries Strategy, which provides clear direction for the long-term development of the territory's fishing industry.
In 2006, the Government of Nunavut released an independent report entitled Organizational and Performance Review of Nunavut's Offshore Fishing Industry. The report was intended to assist in fisheries policy and program development, strategic planning and investment decisions. The report made a number of sound recommendations that designed to move Nunavut's marine fisheries toward seven key targets or objectives. The first recommendation was that conservation and sustainability are paramount and two that gaining access to all resources off the shores of Nunavut must be achieved as soon as possible. Three, the report stressed the building of community capacity so control can be at the community level, therefore reducing dependency on outside interests. The fourth recommendation involves increasing and improving training and employment in order to reduce the leakage from the harvesting of Nunavut resources. Fifth, the report noted the objective of trying to develop a balance between offshore and inshore fisheries over time. Sixth, the report recommended using funds from access to resources to fund development of science and inshore initiatives and seventh, the viability of fishing enterprises.
The seven key elements echo elements that the Standing Senate Committee on Fisheries and Oceans championed in its report.
With respect to the NWMB's jurisdiction, a number of the recommendations were specifically related to the equitable allocation of Nunavut's marine resources. First is the creation of a Nunavut fisheries allocation advisory committee, consisting of representatives Government of Nunavut and the NTI to advise the NWMB in making objective, fair and transparent fishery allocation recommendations and decisions. Senators will recall that the chairperson mentioned that the expertise and jurisdiction lies with those agencies with respect to governance and business issues and employment training — matters that lie at the periphery of management concerns, the main jurisdiction of the NWMB. Second is the mandatory allocation of a portion of the overall turbot quota toward inshore test fishing to encourage inshore fisheries development. Third is the allocation of fisheries quota to the community rather than to private individuals or corporations. Fourth is the submission by each applicant seeking an allocation of a detailed business plan, governance plan and benefits plan. Fifth, at the end of each fishing season, is the delivery by each enterprise of a year-end report detailing the year's operations, including how the enterprise met or failed to meet its business governance and benefits plans and objectives. Sixth is the reduction or removal of allocations from those enterprises failing to comply with their plans or reporting requirements; and seventh is that fisheries allocation, advice, recommendations and decisions would be based upon those business plans, governance plans, benefits plans and year- end reports, as well as adjacency, economic need and historic-economic dependence.
In the early summer of 2006, following the release of the fisheries report, the NWMB announced:
. . . its current allocation policy for commercial marine fisheries will soon undergo substantial changes in response to recommendations contained in the independent report. Accordingly, the board is interested in the public's views regarding the report's proposed recommendations related to the equitable allocation of Nunavut's marine resources.
The offshore report covered many areas outside the board's jurisdiction but with respect to allocation of resources, the board was interested in receiving the public's, the industry's and the co-management partners' views.
Following the receipt of a number of thoughtful and helpful submissions from members of Nunavut's fishing industry, DFO and the Government of Nunavut, the NWMB issued a public notice in the fall of 2006 that it would hold a two-day public consultation in late November 2006 with the fishing industry, the NWMB's relevant co- management partners and interested members of the public.
The well-attended consultation session concentrated on consideration of four draft documents: A revised allocation policy of the NWMB for commercial marine fisheries; terms of reference for the Nunavut Fisheries Advisory Committee, composed of GN and NTI attendees; the templates for Nunavut governance, business and benefit plans; the guidelines for a Nunavut allocation policy annual report from participants in Nunavut's fisheries.
The successful consultation session was followed up by another NWMB invitation to the fishing industry and relevant co-management partners for additional written comments aimed at improving the NWMB's various draft policy documents.
NWMB staff and consultants have spent the winter and spring of 2007 improving those draft documents based upon the submissions received from the industry and co-management partners. The process is almost complete. Mr. Tigullaraq mentioned the upcoming hearing.
A final NWMB public hearing that will focus on the draft allocation policy documents is being organized for June 12 and 13, 2007, in Iqaluit. The NWMB is expected to make a decision on all of the documents shortly thereafter and anticipates it will have in place for the 2008 fishing season, a comprehensive new allocation policy for commercial marine fisheries that seeks to achieve the following objective:
To facilitate a cooperative, professional and diversified approach to ecosystem-based fisheries development, maintaining compliance with the principles of conservation, relying upon re-investment in the fishery by Nunavut fishers, and ensuring the wide distribution of tangible benefits to Nunavummiut.
As well, the NWMB hopes to have in place a functioning Nunavut fisheries advisory committee with the expertise necessary to provide timely, professional, impartial and informed allocation advice to the NWMB; and comprehensive templates for Nunavut governance, business and benefits plan from industry applicants and an annual report from industry participants.
To conclude, Nunavut now stands at the threshold of a new age in the development and management of its commercial marine fisheries. This is the age where the cycle of royalty charters will finally be broken, where Nunavummiut will own and operate the fishing vessels in their adjacent waters, and where investment in infrastructure, training, knowledge and organizational development will permit Nunavut to achieve major economic and employment gains through its fisheries.
The Nunavut Wildlife Management Board is very pleased with, indeed, proud of, Nunavut's role in the development of its commercial marine fisheries to date. Naturally, much more needs to be and will be accomplished. Nevertheless, Nunavummiut and their organizations have done and are continuing to do a good job. Nunavut's fisheries, a work in progress to be sure, is a success story of which all Nunavummiut, all Canadians, and this committee ought to be proud. This committee has played a role in trying to assist Nunavut in developing its fisheries and continues to do so.
That ends my presentation, honourable senators. My colleagues and I look forward to answering your questions after Mr. Tigullaraq takes a few minutes to provide you with those NWMB recommendations that we hope you will take under consideration.
Mr. Tigullaraq: The recommendations I will read to you were already presented by Nunavut Tunngavik Inc. However, I will repeat them because we are basically representing the same people in Nunavut.
First, the federal government should continue to support the NWMB, NTI and the GN in their ongoing efforts to develop Nunavut's fishery for Nunavummiut. Second, the federal government should increase its efforts to expand access and allocation for Nunavut fishers in their adjacent waters with the goal of achieving equity with all of the other Atlantic jurisdictions — that is, allocations of 80 per cent to 90 per cent of adjacent fishery resources. Third, the federal government should substantially increase its budget for scientific-exploratory research on the marine resources adjacent to Nunavut; a solid scientific platform is the cornerstone of the successful development of Nunavut's fisheries. Fourth, the federal government should develop and implement, in full collaboration with Nunavut a plan to build a fishery infrastructure within Nunavut comparable to that in the southern Atlantic fisheries. The federal government should also develop and maintain a licensing regime that reflects and supports the interests of Nunavut's emerging industry and that takes account of the terms of the Nunavut Land Claims Agreement.
The Chairman: You say ``. . . the cycle of royalty charters will finally be broken.'' Could you explain for us, from the fishermen up, how the boats operate? I assume that the harvesting of shrimp is part of deep-sea operations and that turbot fishing is done midshore. I know there are probably some longliners up there. Are we talking about 40- to 60- foot boats for turbot, or are they bigger than that? If that is the case, who owns the boats, and are they the boats you are talking about when you say that the charters will be a thing of the past? If they are a thing of the past, how will the Nunavummiut own and operate the boats?
Mr. d'Eca: I am not sure about the size of the boats. Mr. Noble and Mr. Tigullaraq would have more detailed information on that subject. We have entered into the age that we are talking about; Nunavut is in an ownership position with respect to several boats. Baffin Fisheries Coalition owns two boats, Qikiqtaaluk Corporation has one boat, and Qikiqtarjuaq is interested in a boat and is working towards ownership. That is starting to happen. My understanding is that we are talking about the big boats, and it costs many millions of dollars to buy these boats.
The Chairman: Am I right that the shrimp operations are deep-sea operations? These are deep sea boats where the shrimp is sold out of the water, so to speak.
Jim Noble, Chief Operating Officer, Nunavut Wildlife Management Board: That is correct, Mr. Chairman.
The Chairman: Are some of these boats owned by Nunavummiut now, or what percentage is owned by foreign interests?
Mr. d'Eca: Are you talking about shrimp boats?
The Chairman: Yes, just shrimp boats.
Mr. Noble: The Qikiqtaaluk Corporation is the corporation that has the shrimp license. They have one and one-half license. They have just purchased a new vessel, the MV Saputi. I believe they have 51 per cent ownership of that vessel.
The Chairman: They have a controlling interest in a deep-water vessel that sells the shrimp out of the water.
Mr. Noble: That is correct.
The Chairman: Can you tell us about the other owners of the vessel?
Mr. Noble: The Baffin Fisheries Coalition has a similar combination shrimp-turbot deep-sea vessel. They have a gillnetter that I believe they also own 51 per cent of.
The Chairman: Who owns the 49 per cent of that boat?
Mr. Noble: That is probably invested with foreign ownership.
The Chairman: Foreign investors own 49 per cent of the boat.
Mr. Noble: That is correct, sir.
The Chairman: Are they from the Nordic countries, Norwegian or Finnish?
Mr. Noble: Yes.
The Chairman: When we talk about breaking the cycle of royalty charters, are we talking about increasing the 51 per cent ownership of the vessels?
Mr. Noble: I believe that these boats are on a lease-to-purchase agreement. Each year, they put the revenue gained from the boats into the equity.
The Chairman: Over time, the 49 per cent will accrue to Nunavummiut.
Mr. Noble: That is correct.
Mr. d'Eca: The royalty charter situation traditionally was in 0B, the lower area. There, the Nunavut never had much of a quota and still does not. I think it is 27 per cent. It is a small allocation that is divided up among a number of communities and enterprises. The situation that faces the holders of that quota is they do not have enough to go out and even start to purchase a boat. The only thing they can do is turn to southern fishers who have a boat and crew and set up a royalty arrangement whereby, as I mentioned, it is their vessel and their crew, so they take most of the profits away. The very fact that Nunavut is on the board by getting into an ownership situation and is moving towards full ownership, the most crucial matter is that we now have enough allocations to begin to buy vessels, and sure enough, Nunavummiut are getting into these ownership situations. I believe all of them have plans to increase their ownership to 100 per cent.
Senator Robichaud: How are the royalties divided? Are they divided among the majority shareholders, 51 per cent to 49 per cent, or do those people ask for more than the share they hold in the boats?
Mr. d'Eca: I do not know that. I do not know if either of my colleagues knows the answer to that question.
Senator Robichaud: We have heard from previous witnesses that most of that money is going somewhere else.
The objective is to have as much money as we can return to the communities. This is why I am asking you how much of the revenue goes into the community and what is left for you to buy the boats.
Mr. d'Eca: We have overall figures on the revenues that Nunavut receives from the fishery but NWMB does not have access to that level of detail. We should check further into it, though.
The Chairman: Where would we get that information? Should we ask the government?
Mr. d'Eca: Under the new policy that the NWMB is likely to approve soon, business plans, governance plans — these kinds of details — will be set out. There is also the whole issue of transparency. It is a public resource; that is, a public board that wants to do things as publicly as possible, but there is also business confidentiality. I expect these kinds of measures would be captured by the plans and would be revealed. Whether or not that information would be made public is a matter that must be carefully worked out in finding that balance between business confidentiality and the need to be transparent about access to a public resource.
You could question the fishing enterprises who have the interest and ask them to provide you with the details because you want to go deeper into the details of your arrangement.
Senator Adams:
[Senator Adams spoke his native language.]
I see that the Nunavut Wildlife Management Board has nine members on the board. Are three members from the Northwest Territories? Will you break that down again for me? From where do the other members on the board come, apart from your members? There is you and the staff at DFO. You have been appointed to work for five years with the DFO and you are the chair of the Nunavut Wildlife Management Board. Apart from you, as chairman of the board, and DFO, who else is on the Nunavut Wildlife Management Board?
Mr. Tigullaraq: The federal government appoints three members and the territorial government appoints one. Different federal departments nominate federal government appointees including the Department of Environment Canada and the Department of Indian and Northern Affairs. The territorial appointee is nominated by the Department of Environment, Government of Nunavut. Inuit organizations appoint the other four appointees including the three regional Inuit associations of Kivalliq Inuit Association, Kitikmeot Inuit Association and Qikiqtani Inuit Association; the fourth Inuit organization appointee is by NTI, Nunavut Tunngavik Incorporated. The chairperson is nominated by the eight members and appointed by the federal government.
Senator Adams: Sometimes they talk about breaking down the applications for the quotas from the Minister of Fisheries and Oceans here in Ottawa. Are the voting chairs involved in that process? For example, if I were a fishermen and I put in an application for a quota — I think the quotas come out in February — from the minister to fish in Nunavut, who would look at that application? Do all the other representatives come from other areas in the North? I know there is a conflict of interest to go back to the minister, but if someone were to apply for a quota, are all of those voting chairs on that application or is it only the directors that can vote?
Mr. Tigullaraq: Based on the current policy, the board makes the decision and recommends who gets the quota. That recommendation is made to the Minister of Fisheries and Oceans, as a majority of the quotas are outside the Nunavut Settlement Area or NSA.
Mr. d'Eca: The minister decides upon the overall allocation of quotas. That is his decision. The regional allocation for Nunavut, for instance in 0A, he decides is 6,500 tons. It then goes to the NWMB to decide, through its allocation policy, what recommendation should be made for individual allocations. The full NWMB board will then vote on that. It then goes to the minister, who makes the final decision.
Senator Adams: The others from the NWMB and the wildlife manager from government do not have voting rights.
Mr. d'Eca: No. The NWMB has only nine members. They are at arm's length both from the Inuit organizations that appointed them and from the government that appointed them. They are an independent tribunal that makes the decision on their own. Government departments could provide advice, just like NTI or individual fishing enterprises could, but that small group of board members makes the decision.
Senator Adams: You referred to Indian Affairs and DFO at the beginning of your presentation. Is it mostly Indian Affairs that is likely to look at land claims agreements? That is, they have nothing to do with quotas, and so on, because that is for DFO. I want to find out more about the three members from INAC and how much control they have over the agreement with the Government of Canada on the land claims.
Mr. Tigullaraq: The Nunavut Wildlife Management Board members do not represent the bodies that appoint them. NWMB represents the Nunavut public, whether it is Inuit or non-Inuit, the board represents the public within the Nunavut settlement area.
Appointees are not considered a problem when it comes to voting on various decisions to be made by the board, whether it is pertaining to allocation of quotas, in this case, and other responsibilities, on which the board makes decisions on a regular basis.
Senator Adams: Right now, recommendations are for up to 80 per cent or 90 per if they allocate to Nunavut, and we were talking earlier about royalties. I have tried to figure out how the quota system works. If the minister agreed, how many communities are you agreeing should have a quota system imposed on them? Do you have a figure for how many communities should have quotas in the Baffin region, which is in areas 0A and 0B? Your recommendation is that up to 80 per cent to 90 per cent should be allocated for Nunavut. How is that figured out for the future?
Right now, Mr. d'Eca would say that there is a report for the fishing strategy for the future in Nunavut. That should indicate how many quotas are allocated. Do you have any idea who should get the quotas up there in the Baffin region?
Mr. d'Eca: When we get to 80 per cent or 90 per cent, there will be a lot more fish. I cannot speak for the members, but it is clear they would want that quota to be distributed as widely as possible. The mechanism will be the allocation policy; fair guidelines that the NWMB uses to ensure that the benefits are distributed as widely as possible and as efficiently as possible to Nunavummiut.
One would hope that all communities with an interest certainly along the coast of Baffin Island would participate in the fishery.
Senator Adams: That is why I have been asking the question. I am only familiar with those three communities. There is one community called Pond Inlet in Baffin Island, and in the old days, they had a contract and Clearwater Atlantic Seafood Inc. who was fishing up there in 2000. They used to have quotas. Every community could say they had over 8,000 metric tonnes and should be able to get at least 300 tonnes each. You are selling your quotas to the fishermen, who then own the quotas. It is difficult to compare the land agreement to what Mr. Kaludjak, the president from NTI, said a couple of days ago, about collecting the royalties for the mining community. With fishermen it is a different thing. The fishermen own the vessels, and if he gets 500 tonnes from one community, he gets the royalties. The guy who owned the 500 tonne quota sold it to another company, but he does not get the royalties. That is the Nunavut policy now. The only way he can own the quotas within the community is to have a partnership with the owner of the vessel. In that way, he can get a portion of the royalties.
We have land claims and you talk about foreigners. They are fishing up there, too. They get the quotas and part of the royalties too, even if they bought the quotas for $500 a tonne or something like that, from the community. That is why I am having a difficulty with the royalty system in the fisheries in the North.
To answer your question about the quota system, Mr. Chairman, and how much percentage can go to it, 51 per cent is for the company, and the other partner that owns 49 per cent and maybe gets 49 per cent royalties. I think that is how the system works. It does go by quotas and that is why I have difficulty with it.
We are talking about very expensive vessels. Even those people who own quotas for 500 tonnes are not getting the royalties. They want to go to the bank who says ``You have 500 tonnes, all right, but you are not getting the royalties and you cannot pay me back my money.''
The Chairman: Some time over the course of our hearings we will have to try to get some information as to the distribution of profits and royalties, which, as I understand it, could be two different things. The profits from the vessel would presumably be distributed along the lines of ownership, but royalties would be a different amount, it seems to me. At this point, I am not clear on that issue. We will have to keep asking those types of questions.
Senator Robichaud: This has been an issue from the first time we visited this problem quite a few years ago. Mr. d'Eca said this was not a secret, but it was business, and no one wanted to publish those numbers because it is a business agreement.
When we went there, some people argued that they could not make a proper evaluation because they did not have that information and I hear that situation has not changed.
Mr. d'Eca: Certainly, the new regime that the NWMB wants to put into place with these detailed business and governance plans, and so on, will be much more disclosure. However, I point out again that there is that tension between transparency and openness and business confidentiality. That will all be set out clearly in the NWMB policies that go forward, but there will always be that tension. Do you want the world to know what you are paying for your royalty arrangements? Is that a disadvantage to your business? These are legitimate questions that must be looked into.
I understand it is something that you want to get to the bottom of, but we all must recognize that there is that legitimate tension between being open and transparent and protecting business.
The Chairman: That is right, but on the other hand, if the businesses can protect the information, they maintain their own powerful position. It would impede our understanding of how the transition will be made from foreign ownership to local ownership. If we cannot get the information on how much is foreign owned and how much is locally owned it would impede our understanding of how the transition will be made. This is a complicated question and I do not think we will solve it overnight.
Senator Adams: Inuit are recognized as Canadians no different from any other Canadians. The land claims agreement says that Inuit are not allowed to own any of the seabed. Does that refer to islands or to the bottom of the sea? The Inuit were there for thousands of years before Europeans came, yet we are not allowed to own any marine land. Does that mean sea bottom?
In your brief, you talk about treaties. Are you referring to Aboriginal peoples? I do not think the Inuit people have treaties to settle land claims. I want to make sure that is correct.
I do not have a treaty number; I have a social insurance number so that the government can know much I owe in income tax.
Mr. d'Eca: You are right, Senator Adams. Seabed ownership is not a feature of the land claim agreement. Even though Nunavut has a number of rights and interests with respect to the land claim area, they were not able to achieve that. I do not think that any other Aboriginal peoples have that kind of ownership situation.
The Inuit have a number of very important rights and benefits under the land claims agreement. It is important for beneficiaries to be fully aware of all their rights and, as your example shows, to publicize them, to push for them and to ensure that the government lives up to all its obligations under the land claims agreement. The Inuit gave up a number of things to achieve their land claims agreement, and they deserve to get the full benefit of the various provisions.
Article 15 talks about having a fair share of the licences in the waters adjacent to Nunavut. We have not talked about the licensing regime today. There are many more steps that need to be taken to fully implement even the fisheries provisions of the land claims agreement.
Senator Hubley: You have brought a great deal of information forward and I thank you for that, even though I am even more confused.
If we follow the fish, we should be following the money, and I do not think that is happening.
My first question is about the Baffin Fisheries Coalition, which I understand has bought two freezer trawlers. Where did they get the money to buy those multi-million-dollar freezer trawlers? Did the money come from the royalties?
Mr. Noble: To give you some background, we started the turbot fishery in Nunavut in 1985. We originally got a small quota in zone 0B. The board took applications from anyone who was interested in the fishery. We divided that small quota into many little pieces, and everyone got a bit of equity and a royalty payment. However, there was no growth in the fishery and we were not recognized as a fishing entity. Then, in 2001, the minister gave us the OA quota. The board and the co-management partners, NTI and GN, went to all the fishing communities and the people who were involved in the OB fishery and asked what they wanted to do for the future. The communities decided to form this cooperative partnership of BFC.
They had one bank account into which the royalty payments were deposited. There were no benefits paid to the members or the communities; it was all banked. The royalty payments paid by the foreign investors from 2001 to today have amounted to enough for the companies to buy 51 per cent ownership.
Senator Hubley: From an organizational standpoint, you have done a commendable job. I would like to be able to relate that to the health of your communities.
Were there options to do things with the royalties other than buying freezer trawlers? Would infrastructure have been an important issue? If you had wharf facilities and processing plants, some of the wealth generated from that fishery would have come back to the community. There is always a gap between the objectives and what is happening on the ground.
Are the communities benefiting in a tangible way from the 68 per cent of the resource that is now in Nunavut's allocation, not necessarily from the royalties? How are the communities prospering from this additional allocation?
Mr. Noble: In addition to purchasing two vessels from the royalty payments BFC received on the origin 3,500 metric tonnes, they have set up a training consortium for the communities and a research fund of about $500,000 a year. With that research money we joint ventured with the federal government and the NWMB and came up with an additional 2,500 metric tonnes, which has benefited the communities.
In the last three years, the communities have been getting direct payments from the royalties. Not only have the royalty payments increased, but as a 51 per cent owner they are also receiving a portion of the revenue the boat is making. The income is increasing each year.
Senator Hubley: There are employment opportunities and training opportunities. Is that reflected in infrastructure?
Mr. Noble: I neglected to say that they are landing approximately 600 metric tonnes into Cumberland Sound, which is helping to build infrastructure there as well.
Senator Hubley: Is that the only area?
Mr. Noble: Yes, at this time. We are doing research in other communities to see what resources can be developed. In Clyde River, it may be possible to have a winter fishery. We may be able to develop freezer capacity to enable us to move fish down the coast.
Senator Meighen: I would like to pursue Senator Hubley's line of questioning regarding infrastructure, because that topic concerned this committee, back in 2003-04. Indeed, there were a number of comments made about the need for improved physical infrastructure in Nunavut. We noted that there no deepwater port facilities, no small-craft harbours and no marine centres in support of either an inshore or offshore fishing fleet. Other than what you have mentioned, has anything happened in respect to that and if not, will it?
Mr. d'Eca: Mr. Noble will correct me if I am wrong, but little has happened if anything from the federal government side. The Government of Nunavut and Nunavut Tunngavik have been working feverishly, and you may have heard from NTI, to get some action on commitments for the deep-sea port to try to get some funding from the small-craft harbour fund.
My understanding — and my colleagues may be closer to this than I am — is there has not been much movement, if any, over the last several years. It is one of the fundamental building blocks that in order to make change in the communities we must generate more wealth. In relation to employment, if you want to get an inshore small boat fishery going the problem is that there is no infrastructure. There is movement though. The NWMB and it new policies are encouraging inshore development but the infrastructure is needed. You are right in terms of focusing on that.
Nunavut has been doing what it can in terms of encouraging government. There is that MOU between the Government of Nunavut and the Government of Canada, but we have not had any success as far as I know in getting some action from the federal government, although perhaps, I am overstating it.
Mr. Noble: The Department of Economic Development and Transportation is currently looking at doing a coastal zone survey and trying to get money from the federal government to assist with that. They are also working on some bottom surveys and test areas for possible port areas; however, there has been no federal assistance coming in to this point at all.
Senator Meighen: Do you feel you have made as much noise as you can about this requirement? I would be interested in the federal government response. Do they say there is no money to built wharves or plants or to encourage infrastructure, or do they say nothing?
Senator Robichaud: It is the chicken or the egg.
Senator Meighen: I understand they have made some noise. They have made requests.
Mr. Noble: We have met with the department twice. We are told it is an interesting situation, because Canada now has gone through its development period in the fishery in the southern parts of the world. Wharves have been constructed and now they are moving back into maintenance only and trying to get the communities in southern Canada to look after their own ports. There is no new money for developing a burgeoning community in the North. There are no programs left.
Senator Meighen: They are applying a southern strategy to the North.
Mr. Noble: Yes, to get industries started we are faced with the shutdown of the support.
Senator Meighen: Back in 2005, it was acknowledged that Nunavut could not build fish plants in every community; however, there was some movement to try to establish best-bet communities, where a fish plant would be best suited. Has there been any progress on that front? Have you identified communities that would be appropriate for the building of fish plants, or does that come after infrastructure?
Mr. Noble: There were some feasibility studies done for Broughton Island. There are test fisheries occurring now to see if there is any resource in the community areas that we could use to develop these facilities. It is progressing. It is slow and it is expensive work. However, there are no facilities, even if we do.
Senator Meighen: Do you know when you will have the results of those studies?
Mr. Noble: There is a test fishery going on in Clyde River. I believe it will begin in a few days.
Senator Meighen: Mr. Tigullaraq, you were interviewed a year ago on CBC Radio about gillnets. I have a transcript here. I am interested in the whole problem of ghost fishing and these nets that drift forever. You have the additional problem of ice, which I believe in this particular instance took away some gillnets but they were still rolled up when they were found, so there was no ghost fishing going on. Do you have any regulations governing gillnetting in the North?
Mr. Noble: We have worked with DFO, and set up closed seasons. There is good communication between the Department of Fisheries and Oceans, the board and the fishing industry to monitor the ice conditions. We watch the ice charts to decide when to close the season to avoid the closing in that occurred in those years, as you heard in the CBC report. We have had no had any trouble since.
Senator Meighen: The original proposal was to ban gillnets but that was judged by the wildlife management board to be too extreme. There have not been any lost since this monitoring service has been established, and the period during which gillnets can be placed in the waters is variable according to the ice conditions, is it?
Mr. Noble: I do not think there have been any problems in the last two years.
Mr. d'Eca: The NWMB is on record since 1996, when it first wrote to the minister advocating limitations across the Atlantic on the use of gillnets. The board has been pushing for this across the whole fishery, not for Nunavut to be singled out. There has not really been any response. I think the fishing industry is resistant.
We have instituted changes within Nunavut; within zone 0A, that fishermen are required to pull their nets by a certain time as freeze-up comes. I am not sure what your reference is, but they would be consistent with the NWMB's position that gillnets are a concern and they are a concern right across the Atlantic. We need to look at the various gears and try to bring them in line with the best conservation and resource-management practices.
Senator Comeau: Mr. d'Eca, in your presentation you mentioned the government report of 2006. There were two parts to the report and one dealt with the NWMB jurisdiction. On page 3 of your presentation, at provision 3, you say ``Ideally, the allocation of fish quota to the community rather than to private individuals or corporations.'' I found the word ``ideally'' rather interesting.
Are you hedging your bet that the jury is still out on the quality of community quotas? Is it a question of having different methods of applying fishery prosecution?
Mr. d'Eca: Senator, I want to make it clear that part of my presentation was from an independent report. The government went out to consultants and asked for advice. This is what the consultants came up with. I am not sure if I am using exactly their language, but that was where they thought it should go.
NWMB has not acted on that. It has stayed away from that area, but where they and the NWMB are coming from are the instructions under the land claims agreement. The instructions under the land claims agreement govern NWMB decision making for the Nunavut settlement area. The NWMB has used that as a basis for providing its advice outside the Nunavut settlement area. The land claim gives a stated and explicit preference to hunters, trappers and regional wildlife organizations in the allocation of quotas. It talks about viable economic ventures sponsored by hunters and trappers organizations or regional wildlife organizations. Without knowing precisely what the authors meant, I think they saw the land claim preferred a community approach towards allocation rather than an individual approach.
Senator Comeau: That confirms some of the comments we heard during our last study; that there was a great deal of interest in the concept of the communities having control over the allocations, especially with the added provision of the adjacency principle, which I think most everybody in the North accepts. Without saying that it is going to be the community that fishes, provision 6 says, ``The reduction or removal of allocations from those enterprises failing to comply with their plans or reporting requirements.''
In other words, if a community were to subcontract the fishing of resources belonging to the community, and if the subcontractor did not live up to the terms and conditions of the agreed plans, the subcontractor would no longer be allowed to fish.
You get the best of both worlds. You get the community that owns the quota, because if you go with a corporate model or an ownership model, the danger is the quotas can be sold outside the community. We would not want to wind up with the situation in 0B, where outside interests own many of these quotas. We were mentioning the other day that a couple of dentists in Florida are reaping the benefits of the stocks.
Are you looking at the community quota model as a possible benefit to your communities?
Mr. d'Eca: The NWMB in its current policy, again from instructions from the land claim, favours very much the community arrangement. It favours hunters, trappers, and regional wildlife organizations. The new policy is still being developed, but I can tell you that policy reinforces that position. I think the NWMB will ensure that the dentists never get control of Nunavut's quota.
Senator Comeau: The big problem is when resources are sold off to anybody. If they are sold off it might well be to people of the region, but then when they sell it off, it is sold off. It goes somewhere else.
Mr. Tigullaraq, on page 5 of your presentation you state, ``This arrangement is in keeping with DFO's evolving policy that decisions which relate to the management of specific fisheries will normally be made as close to those fisheries as possible.''
Is this the concept of adjacency and is DFO's evolving policy heading in that direction? DFO, to my understanding, has been resisting adjacency.
Mr. d'Eca: I suppose it is actually related to adjacency, but I think we got that from this policy framework document that the Department of Fisheries and Oceans put out a couple of years ago. They state they want decisions to be made as close to the local community as possible. It reflects the importance of adjacency, not just in receiving allocations but in making decisions that affect your fishery.
Senator Comeau: It would be a good piece of news.
Senator Adams: Mr. Chairman, everybody should have a licence. At that time, the minister would allocate between the 0E and 0B for quotas. They give one licence to Nunavut; is that true?
According to the commercial fishermen, every time anyone goes up there, they have quotas. Do foreigners have to use that licence to go up there?
Mr. d'Eca: It is true and incredible that Nunavut has only one ground fish licence. If you were going to do a royalty, you have the allocation and that guy might have the licence; so together it can be fished. Sometimes that person does not have the licence. Nunavut has the one licence, and it is difficult logistically to allocate that. Another area in dire need of reform is the licensing regime for Nunavut. We are bunched in with the southern Atlantic regime and they have an overcapacity there, so the government is not interested in issuing any new licences whatsoever. Yet we have a developing fishery which requires a licensing regime that reflects that growth.
I should say that DFO has indicated a great interest and willingness to sit down with Nunavut and develop that licensing policy. I believe moves are being made, led by the Government of Nunavut, to do just that. Hopefully, there will be agreement between the federal government and the territorial government as to what that licensing regime should be.
The Chairman: We are talking about a boat licence, correct? There is one fishing licence, but you have to have a boat to fish. Do we understand that there is only one boat that has a licence that is owned by Nunavut? Is that right?
Mr. d'Eca: The other boats have licences. I think perhaps they were purchased with the boats. There is only one licence that has been issued by the federal government to Nunavut, and it goes through the NWMB, so the NWMB is faced with the difficult task of who to provide that one licence to. I understand those other boats owned by Nunavummiut all have licences.
Mr. Noble: It is confusing, but there is only one licence. It is allocated to area 0, which means both 0B and 0A. When DFO licenses for the year, they assign that licence to all three boats we use in Nunavut. Other boats coming up from southern Canada are licensed themselves in fishing areas, so they do not need a licence to fish in our zone.
There have been no foreign vessels in Nunavut waters since 2003. All boats being used now are Canadian-owned, Canadian flag ships. We share that one licence between our three boats.
Mr. d'Eca: The licence is limited, so we have the competitive fishery in 0B. If you have the right licence, you can go up there to compete and catch the fish. We do not have a licence that permits any Nunavut enterprise to be able to do that. Therefore, Nunavut is locked out of that fishery in 0B, and I think the quota adds up to 1,000 or 1,500 tonnes, a fair amount.
The Chairman: Are the three vessels that share the licence allowed to fish in 0B?
Mr. Noble: Not on a competitive quota.
The Chairman: You have 27 per cent of the quota in 0B?
Mr. Noble: That is correct. We have 1,500 metric tonnes of the quota.
The Chairman: No licensed Nunavut vessels are allowed to fish that 27 per cent quota. Is that right?
Mr. Noble: No, not outside of the 27 per cent.
The Chairman: We do not have all of the answers. We are all struggling with this. We have another meeting coming up and we will pursue it further. We have the minister coming on Tuesday.
Senator Robichaud: Could not a reallocation of the quota be done in 0B?
Mr. Noble: That is correct; however, the minister is refusing to allow us in because of the first-in historic fishery of southern Canada. They all have licences and it is all allocated. We are told that the only way we can get into that fishery is if we actually buy one of the companies out and buy their licence. That is the only way we can get in past the 27 per cent.
Senator Robichaud: We should look into this more carefully.
The Chairman: Yes, we should. It brings up the whole question of licensing. Licensing has become big business. The costs have escalated so that those who own the licence own more than a piece of paper. They own a lot of capital, and that capital is traded. This is not only a situation arising in Nunavut. It is a situation that arises throughout the Atlantic and probably all across the country as to how licences are issued. I do not know if the Minister of Fisheries and Oceans can get those licences back.
Senator Robichaud: I would think they could. We have been told that it is a privilege. We should take a closer look at that issue.
The Chairman: Yes, we should. It is not just a problem for Nunavut. This is a problem that we experience throughout Atlantic Canada. There are crab fishermen from New Brunswick who are essentially in the same position.
Senator Robichaud: With respect to the southern coast on the crab fishery, it was allocated at one time to a group from the midshore. After feeling pressure from the inshore fisheries, the minister broke up that quota and provided a certain percentage to the inshore, and that is when all hell broke lose. Recently, Minister Thibault has made that a permanent quota.
My point is that they do have the power to decide. It is not easy.
The Chairman: We have to look more closely at the whole question of licensing and quotas.
Thank you very much for appearing. Your testimony has been very helpful to us. You have provided some answers but created some questions as well. We will pursue the questions.
We have the minister coming on Tuesday. Perhaps he can provide us with an in-depth understanding of the future of the fishing industry. We want to ensure that you reap the harvest of that future and that the future is there for you.
I think we have come to understand some of your difficulties and other constituents in the Atlantic share some of them.
We will continue our observations and questions, and we will be issuing a report. Thank you very much for being here today.
The committee adjourned.