Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 9 - Evidence - May 15, 2007
OTTAWA, Tuesday, May 15, 2007
The Standing Senate Committee on Fisheries and Oceans met this day at 7:40 p.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 Elizabeth Hubley (Acting Chairman) in the chair.
[English]
The Acting Chairman: I call this meeting of the Standing Senate Committee on Fisheries and Oceans to order. I am Senator Elizabeth Hubley, from Prince Edward Island, and I will be the Acting Chair of the Committee for today's meeting. I will introduce the senators on the Committee: Senator Adams, Senator Watt and Senator Gill.
We are studying the evolving framework for managing Canada's fisheries and oceans. Senators will recall that in the fall of 2003, the Senate committee undertook a study on matters relating to quota allocations and benefits to Nunavut fishers. Selected witnesses were invited to appear between mid-September and early November 2003 and in February 2004. The committee's report, released on April 2, 2004, focused on the benefits generated in the turbot fishery.
Recently, the Committee heard from the President of Nunavut Tunngavik Incorporated and his officials as well as the Chairman and Chief Executive Officer of the Nunavut Wildlife Management Board and his officials.
This evening it is my pleasure to welcome the Honourable David Simailak, MLA and Minister of Economic Development and Transportation and the Minister of Finance of Nunavut. He has appeared before the committee to update us on the Nunavut Fisheries Strategy.
Minister Simailak was elected to Nunavut's second Assembly on February 16, 2004, to represent the community of Baker Lake. He has a long history in community politics and holds several positions representing the interests of both Nunavut and the Northwest Territories. Accompanying Minister Simailak is Ms. Wayne Lynch, Director of Fisheries and Sealing.
Committee members have been provided with a copy of the executive summary of the Nunavut Fisheries Strategy. Due to the voluminous nature of the entire strategy, the minister has offered to provide each Committee member with a ``memory stick'' containing the documents in English, French and Inuktitut. Senators, is it agreed that this material be distributed to you in this form?
Hon. Senators: Agreed.
The Acting Chairman: Minister, we look forward to your presentation followed by a question and answer period. Please proceed.
Honourable David Simailak, M.L.A., Minister of Economic Development and Transportation, Nunavut: Thank you, Madam Chairman. Before I begin my presentation, I have a couple of quick points. You have a very hot city. I have been sweating ever since I came off that airplane. I was talking to my wife earlier and she said that it is -11 degrees Celsius in Baker Lake and snowing with winds of 50-70 kilometres per hour. In Ottawa, I am walking in the rain. Mr. Lynch will probably be answering many questions this evening because the fisheries file is new to me, which is a bit ironic because I come from the only Atlantic community in Nunavut.
The Government of Nunavut appreciates the opportunity to provide this committee with an update on activities and progress since your Committee's report of April 2004 and the publishing of the Nunavut Fisheries Strategy in March 2005. It is especially encouraging to see that your committee recognizes the Nunavut Fisheries Strategy as an important document for fisheries development in Nunavut, which we have been trying to accomplish with the Department of Fisheries and Oceans since its completion.
Over the next few minutes, I will cover several topics: First, I will provide a brief overview of the roles and responsibilities of the Government of Nunavut's Fisheries and Sealing Division in supporting the development of our fledgling fishing industry. Second, I will update you on the progress made, and in some cases not made, on the recommendations of your committee's 2004 report. Third, I will provide a similar update with respect to the progress on implementation of the Nunavut Fisheries Strategy. Fourth, I will leave your committee with a series of recommendations for your consideration, which could serve to further progress the development of Nunavut's fishing industry.
Before proceeding with the above comments, I wish to say that the Government of Nunavut is proud of the progress that has been made in the development of the Nunavut fishery and of the role our government has played in this development, given our limited resource capacity.
The role of the Fisheries and Sealing Division of my department is threefold: to encourage and support the development of viable and sustainable fisheries, sealing and fur sectors; to promote an understanding of fisheries development potential within Nunavut; and to represent Nunavut's interests at major federal, provincial and territorial meetings to ensure fair and equitable treatment with the rest of Canada.
Responsibilities of this division primarily relate to development of strategy and the implementation of funding programs. The division provides management and leadership in outlining and promoting government's interest in the fishing industry. It is also highly supportive of research and development initiatives aimed at furthering the developmental potential of our industry. We are proud of the success that we have achieved with our limited resources.
In April 2004, this committee published an important report entitled, Nunavut Fisheries: Quota Allocations and Benefits. This report outlined a series of 14 recommendations for Nunavut interests and the Department of Fisheries and Oceans. I am pleased to report that Nunavut interests have moved forward on those recommendations over which they have control. However, unfortunately, the same cannot be said for many of the recommendations that were under the control of the Department of Fisheries and Oceans.
The following relates the progress on some of the more important recommendations from the committee's report. In its first recommendation, the committee recommended that Nunavut continue to receive 100 per cent of the 0A turbot allocation. This has been achieved but not without an extensive and coordinated effort by all Nunavut interests, industry and government alike. The committee's second recommendation addressed the implementation of small-vessel community fisheries. To evaluate the potential, government and industry have been working in partnership on research studies in inshore waters. In addition, the Nunavut Wildlife Management Board's new allocation policy will address specifically and support the development of inshore, small-boat fisheries through the allocation of quotas specifically for this purpose. The committee's third recommendation was for the Government of Canada, through DFO, to move forward on its 2000 MOU with the Government of Nunavut on emerging fisheries through a cost-shared fisheries development agreement, including a commitment to fund a multi-year research program and an investment in at least two harbour developments.
I am sorry to report that no progress has been made by the federal government on this important recommendation. Resource surveys in Nunavut waters have only been completed with funding to upwards of 50 per cent of the costs coming from Nunavut interests. Although our proposal on small craft harbour development has been submitted for some time, no action has been taken and we continue to be the only jurisdiction with no port facilities.
The committee recommended, in its fifth recommendation, to place restrictions on the use of foreign vessels, to increase the use of Inuit crew landing on Canadian ports, and labels identifying the product as coming from Nunavut. Significant progress has been made. There have been no foreign vessels used since 2003; all vessels are fully Canadianized.
Through the efforts of the Nunavut Fisheries Training Consortium, in which our government participates as a board member and funding agent, increasing numbers of Inuit are finding work on offshore vessels and with more training, we look forward to seeing Inuit move up the ranks on these vessels. On Nunavut-owned vessels, packaging reflects the fact that it is a Nunavut product.
Landing in Canadian ports is an issue and will remain so, as long as Nunavut does not have its own ports. For those fishing in northern waters, including many southern vessels, the decision to offload in Greenland is simply a matter of economics.
Recommendations 6 to 8 relate directly to the Baffin Fisheries Coalition. As matters related to the BFC, questions should be asked directly to the company. I will point out however, that last February members of the BFC signed on to a new MOU. In addition, the NWMB's new allocation will ensure that the BFC and all other groups seeking quotas will live up to stringent guidelines with respect to transparency and accountability.
Recommendations 10 and 11 relate to 0B turbot and Nunavut's minority share of this resource. Although no new access has been provided in 0B, by the same account nothing has been done to help Nunavut achieve a greater share of this resource. All future increases should be allocated to Nunavut interests until Nunavut achieves its fair share of the resource. No action has been taken on the recommendation that DFO make funding available to Nunavut so that it can obtain quota in the company and/or competitive fisheries. Nunavut's minority position in 0B remains unchanged at 27 per cent.
As outlined above, the federal government has implemented none of your committee's recommendations for funding to enable the Nunavut fishery to development. This continues to constrain our industry's ability to grow and achieve its fair share of adjacent resources.
The Nunavut Fisheries Strategy was published and passed by the Nunavut cabinet in March 2005, to provide a guide for development of Nunavut's fishing industry. Implementation of the strategy continues to be a high priority for our government. The strategy outlined a series of core objectives in six areas as follows: Science and conservation; organizational capacity and governance; access and allocation; labour market development and training; infrastructure; and funding and revenue generation.
We have made a great deal of progress in our first objective, science and conservation, through a number of key developments. Nunavut interests have been strong supporters of ongoing scientific surveys in Nunavut waters. The Nunavut government industry and other partners have invested in exploratory research efforts in inshore waters and the new allocation policy being adopted by the NWMB includes the proposed collection of levies for an exploratory fisheries fund to be used to fund scientific research in Nunavut waters. This new policy establishes responsible stewardship as a mandatory requirement for quota applicants requiring them to demonstrate a history of conservation and responsible stewardship and to detail their plans in this area.
Industry and government sponsored a workshop on sustainable development of the Nunavut fishery in February 2007 bringing together stakeholders to discuss the impacts of commercial fishing on the seabed and measures that can be taken to reduce this impact. A proactive approach is continuing in this area.
There is still considerable work to be done, including receiving a commitment from DFO to undertake multi-year scientific surveys in Nunavut waters and a willingness for the federal government to partner on development, funding and implementation of a Nunavut fisheries science agenda, as recommended in the strategy.
Significant progress has also been made under our objective of organizational capacity and governance with the completion of several initiatives. Most important is the completion of the government of Nunavut and NTI sponsored independent review of the offshore fishing industry. This document has laid the groundwork for development of NWMB's new allocation policy. This groundbreaking and progressive policy will ensure that all quota holders in Nunavut will operate in a transparent and accountable manner.
Although progress has been made in recent years, at 42 per cent of its adjacent turbot and shrimp resources, Nunavut remains far below a fair share of its resources. Areas where progress has been made include the retention of 100 per cent of the 0A turbot resource, despite significant pressure from southern interests. It includes the development of a separate management zone and quota for Cumberland Sound. It includes investment by Nunavut interests in exploratory research, and under the NWMB's new allocation policy, the establishment of quotas specifically for inshore small-boat fisheries and the requirement for quota applicants to develop and institute a Nunavut benefits plan. It includes a continued advocacy for Nunavut interests by the government of Nunavut including our position papers on turbot and shrimp and our ongoing lobbing for resource parity. Obviously, there is still much work to be done in this area.
In Division 0B, nothing has been done to provide Nunavut with access to current company and competitive allocations. Nunavut needs a special allocation transfer program to address this issue.
The Government of Canada continues to accept a 50-50 split with Greenland on 0A plus 1A turbot when our share should be closer to 60 per cent based on resource surveys. Although southern interests have not fished their shrimp allocations in Nunavut waters, they continue to maintain these allocations.
No progress has been made in implementing and funding the 2000 MOU with DFO on emerging fisheries development and Nunavut continues to operate without a licensing policy designed for its emerging fishing industry.
Labour market development and training is a key objective of our government and indeed the strategy. Nunavut interests have secured multi-year funding and implemented the Nunavut Fisheries Training Consortium. Since its inception, the NFTC has completed several training initiatives and is implementing higher-level programs such as bridgewatch and observer programs. The NFTC is spending considerable time in the communities, conducting educational and recruitment sessions to let Inuit know of the career opportunities in the fishery. The goal is to recruit Inuit into longer-term certificate and degree programs to enable access to higher-level positions in the fishery.
The issue of infrastructure is a major sticking point for the government of Nunavut, and for the future progress and development of a well-rounded industry with both inshore and offshore components. Studies and proposals have been prepared for both small craft harbours and the deepwater port facility. We continue to see no action on this issue while millions of dollars are spent in other jurisdictions to maintain and upgrade their harbours.
How can we land in Canadian ports when the nearest one is several days away from the closest port in Greenland? How can we be expected to develop a small-boat inshore fishery with no small craft harbours or marine centres?
Not only are we being left behind and ignored in terms of our infrastructure needs, but it is now becoming even more difficult to access funding for fisheries initiatives from agencies such as Indian and Northern Affairs Canada, where we have had a good partnership relationship in the past.
As one of the four pillars of economic development in Nunavut, the Government of Nunavut was anticipating the fisheries sector would receive its fair share of the multi-million-dollar investments made under the northern strategy. Unfortunately, this does not seem to be the case. On a positive note, the new allocation policy being implemented by the NWMB will ensure that our fishing companies maximize the benefits to Nunavummiut from our resources.
The Government of Nunavut is proud of the steps it and other Nunavut stakeholders have taken to move our fishing industry forward and implement the Nunavut fisheries strategy. We recognize that there is still a long way to go, but in order to achieve our objectives we need a willing and cooperative partner on the federal side.
I have a number of recommendations for your consideration on your future reporting on the Nunavut fishery. First, the federal government should support the Government of Nunavut, NTI and the NWMB in their efforts to develop the Nunavut fishery. The government should implement the Nunavut Fisheries Strategy and the new allocation policy for Nunavut's fisheries resources. The federal government should increase its efforts to expand access and allocations for Nunavut fishers in their adjacent waters toward the equitable position of 80 per cent to 90 per cent of adjacent resources. This should start with implementation of the recommendations of the 2004 Standing Senate Committee on Fisheries and Oceans report on access and allocations.
The federal government should commit to a multi-year program of scientific- exploratory research in Nunavut waters. It should also look to move forward on the 2000 MOU on emerging fisheries development, as recommended in the committee's 2004 report.
The federal government should make the necessary commitments to infrastructure support for Nunavut, as well as insure that the fishing sector receives its fair share of federal funding opportunities as one of the four pillars of economic development in Nunavut. The federal government also should work with the government of Nunavut and the NWMB to develop a licensing regime reflective of the needs of this northern territory.
Thank you again for the opportunity to speak. We are here to answer any questions you may have.
Senator Gill: Thank you for your presentation. You signed an agreement some years ago with the federal government about Nunavut land claims. Is there something provided in this agreement concerning fishing resources and control on the quotas?
Mr. Lynch: The land claims set up the Nunavut Wildlife Management Board, which is a co-management partner with DFO, which allocates the quotas to Nunavut interests. At the time of the land claims, the fishery resource was unknown so there was no defined agreement put in place for Nunavut's resource. However, there are sections of the agreement that say how the federal government should interact with the Inuit and new quotas and allocations. The minister must consult and work with the NWMB, but there is no concrete information written down as per quotas.
Senator Gill: Is there some provision to review this agreement from time to time?
Mr. Lynch: I am not quite sure about the land claims review, but Mr. Simailak said there is a periodic review. I know that NTI did an update on where we are with the land claims' implementation and there were a few issues that were raised in those areas.
Senator Gill: I imagine that you have been negotiating all the time since then with the federal government in order to have more control on what you have to do, and the money and boats you need for economic development. I imagine that you have always been negotiating with them.
Mr. Simailak: We always have been, yes.
Senator Gill: Has it been without too much success? According to what you said, many aspects need to be improved.
Mr. Simailak: Yes, there has not been a lot of progress or success so far, but we are a patient people.
Senator Gill: I know that; I know Senator Watt and Senator Adams.
Senator Watt: It is nice to have you here, Mr. Simailak. We have known each other for a long time. Mr. Simailak was in my dorm when I was a supervisor when he was 12 years of age.
I would like to cover the Nunavut Fisheries Strategy and I would like to know if we are going to be of some use to your government at some point, to try to engage the Department of Fisheries and Ocean to set up a permanent table. I know your government is quite young and you are still going through the organizational stages, but do you have some kind of a memorandum of understanding between the Department of Fisheries and Oceans and the Nunavut government?
Is there something that we can actually pin down, to say that if things are not happening according to your liking, there is some formal mechanism in place in order to hook the DFO, so that you could have periodic meetings with them and go through your strategy to try to come up with some conclusion? Have you looked into that?
Mr. Lynch: We signed a MOU in 2000 on emerging species. Of course, all species in Nunavut would be emerging. No resources have been tied to that. We have had some bilateral discussions but things seem to run out when it gets down to actual implementation, running forward with those initiatives. DFO has not really pushed it forward as a priority.
Senator Watt: What do you think is the reason behind the unwillingness to cooperate with the Nunavut government to implement the Nunavut Fisheries Strategy?
Mr. Lynch: I will let my minister answer that question.
Mr. Simailak: I am not sure what the problem is. We have not been able to get an answer to that kind of a question from the DFO. There is the MOU on the emerging fisheries, but there is also the paper that they have had for some time now on small-craft harbours' development in Nunavut.
Senator Watt: Even in that alone, they have not identified that there is an interest on the part of the Department of Fisheries and Oceans to help you move that forward.
Mr. Simailak: We spent over a year working closely with DFO developing the harbours paper. We coauthored it. They travelled with us to every Nunavut community. It became a $40 million proposal over five years and it has been sitting there for quite some time now.
Mr. Lynch: The answer we received is the program is ending and the DFO is devolving themselves of small craft harbours and they are not doing any new building. Nunavut is new and they do not know how to deal with us. New building is in their Small Craft Harbours Program but they are only maintaining existing harbours and have no capital to build new harbours. It is a ``too late, so sorry'' which is difficult for us in that we have a new emerging industry and need that investment. That type of building and funding happened in Atlantic Canada and British Columbia in the last hundred years.
Senator Watt: Have you approached other departments, such as the INAC and Industry Canada to see if they could participate?
Mr. Lynch: The proposal has been given to Transport Canada and DFO. They have responded by telling us our requested is mixed; we want both deep-sea ports and small craft harbours. How do we choose? We need both to move our fishery forward so it is difficult. They do not know how to deal with us. We are new and do not know how to move forward. Infrastructure is a big issue. They have to find the resources. We were expecting something in the last budget and did not get anything. We did not get anything in oceans. From the Oceans Action Plan, Phase II, we were expecting investment in science. We did not get it. We were expecting an increase in science overall and did not get it. Many things we hoped to get were left off the table and did not come to fruition for Nunavut. It has been difficult, as the minister said, especially in science where we are paying over 50 per cent of the science. That is unheard of in Atlantic Canada. I challenge any jurisdiction to produce the same numbers. It is difficult for a small jurisdiction like Nunavut to provide the money. You must build a foundation on science and that is what we are doing.
Senator Watt: Are you sharing the scientific information with DFO even though you are paying 100 per cent of the cost.
Mr. Lynch: We are paying over 50 per cent of the cost for the studies along with industry, the government of Nunavut, NTI and the NWMB. The studies are done by DFO scientists.
Senator Watt: In other words, the Nunavut government kicks in a certain percentage but the big part of the money is from the private sector. You need money. It is land claims beneficiary money.
Mr. Lynch: Yes.
Mr. Simailak: Yes, we provide a little over 50 per cent of the money that is required to do all those studies.
Senator Watt: And at the same time you have no control over the allocation of the quotas. That is another point the president of Tunngavik Inc. stresses over and over again. He needs to have that in the hand of the government of Nunavut. That allows him to get the financing from the financial institutions. They have you over the barrel on both ends.
Senator Adams: Thank you, Madam Chairman. I have known Dave for a long time also. I always call him neighbour. He mentioned the mainland. Vessels still go up there. These lakes are not small and even the rivers are not that small. I remember one time quite a few years ago, when a cargo ship froze over, right in front of the community. We could not get it out until the next spring. That is what it is like up there and why David is sweating today, saying Ottawa is too hot.
I would like to continue with small harbours, as I am familiar with that subject. I was on the Standing Senate Committee on Transport and Communications when David Collenette was minister in the Chrétien days. We got delayed. Transport Canada had responsibility for the harbours and the airports in the territory. The harbours and airports were privatized. Southern interests purchased them and the money was gone. The ministry did not have funds to build harbours. There was upgrading of the harbours on the East and West coasts at the time with a cost of $125 million. I asked Minister Collenette what is the future for Nunavut. He said, ``We are going to keep the funding for the harbours in the Coast Guard in the future.'' We asked the Coast Guard, if they had the funding for the harbours. The Coast Guard only had departmental money for breakwaters. They had no other money for harbours. We were determined to find out everything we could about funding for harbours. I mentioned this to the Department of Indian Affairs to see if they were able to find funding. The Department of Indian Affairs had $30 million for Indian reserves in the south and in Nunavut. We did not get $1 million from them either. Those are the kind of battles we are fighting with the government for the harbours and communities.
The NTI usually buys boats up at Clyde River. Do you know how much Peterhead boats cost? NTI bought one for a little over $200,000 to make sure the community members could go to Pond Inlet and hunt caribou in the summer. When you do not have a harbour, the wind come along and sweeps you to shore. That happened twice. That is the problem.
How do we approach the government? To have a harbour you have to do an environmental study first. Anything is an excuse. Now you have to go through five departments: PWGSC, DFO, Health Canada and others to build a harbour. Now, they are doing a study in Broughton Island.
That is the history of Nunavut's harbours. We have been up there for thousands of years. Canada was developed and they left it out. They put in the TransCanada pipeline, railways and other things. They did that. Now that we settled a land claim we have to come up with money. This is very typical in the history for Nunavut. Fishery strategy is being discussed now. In 2002, the Nunavut Wildlife Management Board and BFC started out with the allocation of quotas. After a few years we started off with, what I would like to say is Clearwater. Someone came up from the south, had a contractor who had the quotas, other people than those in the community. With the BFC starting off at Nunavut the fishing strategy did not work out very well. The BFC representative did not explain the future of the fishing community. The biggest quota was 330 tonnes and the other two communities received only 45 tonnes each. That is not much because in 2002 it was up to about 6,000 metric tonnes and now it is up to 8,000 metric tonnes between 0A and 0B. I have difficulty with the fishing strategy for some communities that have applied for quotas but have not received a reply. How will we start? Right now we have recommendations to the Baffin Fisheries Coalition and the Nunavut Wildlife Management Board and our committee recommendation of 80 per cent to 90 per cent. Who will control and allocate the quotas?
If it is set at 80 per cent to 100 per cent, will that provide for the whole community or only the NWMB and BFC? How will they be allocated?
Right now, the people in the community are not getting any extra quotas for their people in the community. Maybe Mr. Lynch might know. The fisheries file is new to Mr. Simailak so it is difficult for him to answer some of these questions. He has been in his portfolio for less than one year as Minister of Economic Development and Transportation. Mr. Lynch has done a lot of travelling in his position as Director of Fisheries and Sealing so maybe he knows more about the fisheries file. Can you explain further how it looks for the future with 80 per cent to 90 per cent and how they will be able to work?
Mr. Lynch: Senator, thank you for the question. The way the quota allocations will work in the future is that the Nunavut Wildlife Management Board has set down a new quota allocation policy. Each Nunavut interest that applies for a quota will have to produce a business plan and a governance model, which they must live up to or they will lose the quota. The quotas will be allocated to any interest that comes forward with an application. The Baffin Fisheries Coalition holds the majority of our quota in 0A but the BFC is comprised of 10 Nunavut stakeholders, which are Inuit organizations. Five of them were hunters and trappers organizations from the Baffin region. Only one HTO held quotas before and it is their own. That is fine because under the strategy, we talk about the need for diversity, so it is okay to be different and okay for them to approach the fishery in a different way. The other guys have signed on to new MOUs, as Minister Simailak said, to move forward in a cooperative model with the BFC. If we said that the model was perfect, we would be wrong, but the new allocation policy will hold our industry to a higher standard of accountability — much higher than it is in Atlantic Canada.
Senator, in terms of quotas being an issue, one thing of big interest to us is the Seafreez quota in area 0B of 1,900 tonnes for which there is no accountability. You tell me who at DFO is asking them about any benefits to Canada. That quota was given to them for the people of Burgeo and Canso. I would encourage this committee to ask the people of those communities to ask how much of that quota has gone to them: the answer is, none. I would encourage the committee to ask the company how much it has invested in vessels: the answer is, none. This fishing is off Nunavut's waters so it belongs to Nunavut because those waters are our adjacent resource. No one else is adjacent to that resource and that is the problem.
Nunavut is moving forward by holding our industry accountable but Atlantic Canada is not accountable. We hold ourselves to a higher standard because we have limited resources and we want to be accountable for those resources and hold our industry accountable for those resources so that the maximum benefit goes back to Nunavummiut. That is our goal and we are doing a good job right now but we want to do a better job. This is why a new allocation policy will come in by NWMB.
Some of the problems include access to more resources because there are not enough resources to go around for all of our communities. Communities are reaping benefits but we might argue about how much they are getting. They receive payment from the Baffin Fisheries Coalition but it might not be enough so they also get employment insurance. The inshore fishery will benefit those communities directly. It is a balancing effort of knowing how to retain enough of the offshore fishery to make an impact because if we split it into too many pieces, then we cannot move forward as we have done before.
The BFC does not own the entire quota. Qikiqtaaluk Corporation has quota in 0A, Cumberland Sound has quota in 0A and Qikiqtarjuaq Development Group and BFC have quotas in 0A. We have a diverse industry, although BFC holds more of the quota but it is representative of 10 Inuit organizations. How we move forward in the future will reflect highly upon this new allocation policy and how it rolls out; how accountable it is; and how the new allocation policy committee will make recommendations to the NWMB, who makes recommendations to the Ministry of Fisheries and Oceans.
It is important that we watch the whole industry and hold all accountable, regardless of whom they are, because these are public resources and must be used for the maximum benefit of those who are adjacent to the resources.
Senator Adams: Good answer. In the meantime, I have difficulty with a system of royalties. Other owners of companies, like the Delta Corporation, receive a percentage in royalties, but I do not know how much. Nunavut receives 27 per cent in royalties so he has done a good job for the community. Right now, we give 500 tonnes to each community and those royalties automatically go to the company with the quota and not to the people in the community. That is why I have a little difficulty with the royalty system. The BFC has a turbot quota of 6,000 metric tonnes, which is about $3,600,000 in royalties each year. I do not know what the percentage is. The fish are caught and the BFC is making money up North. I asked about NTI last week but I did not really get an answer to my question. Right now we are dealing with mining company start-ups and NTI gets most of the royalties. We cannot do that in the fishery. About one year ago, Minister Hearn said that much money was being paid out in royalties but that they did not know where it was all going.
I want to see them set up the royalty system and divide it each year with the fishermen so that they can afford the down payment for the 60-foot vessel they need to stay in the fishing industry. That is what they do now at Broughton Island. In the meantime, they will not use the royalties but will put them in trust so that every household can have a share each year. It belongs to those fishermen in the community and that is why I would like to see a recommendation of 80 per cent to 90 per cent for those fishers. They have the boats and the quotas but how much can they get for their quotas?
Fishing companies buy a quota of 500 tonnes and get the royalties. The people who own the resources do not get any royalties.
Money from a settled land claim will help develop the community. That is why I have a problem with that because the money and the royalties should work for the people in the community. Quotas holders keep the quotas within the community and sell it to the other fishermen. Do you agree with that or is there another way around this issue? I do not know. I think that is the way the royalties work. When a company goes up there it gets the royalties.
Mr. Simailak: In terms of the royalties going to the communities, it would be best to ask the Baffin Fisheries Coalition directly because I do not have the numbers from them. It is my understanding a portion of their profits go to the communities. The answer we do not have is how much of the royalties go directly to the community, but a portion of it does go to the communities.
Senator Adams: That is the problem with the fishers and trappers organizations, they have a lot of overhead with the office, heating system and power. You have to have a meeting place and the money will not last too long. Jack at NTI has a percentage, I do not know how much, but NTI gave out a number of outboard motors and boats just for the hunting, not the commercial fishing. With that system in the future, with the fishing, every FTO community — and I do not know if it is the FTO organization or people in the community who own the quotas — gets more money coming in from the quotas plus they get more money from NTI for the operation. Where they are right now, we hear some people have skidoos, some people have the four wheelers and some have outboard motors. I do not think it is working. It should work with more people having enough money to operate.
Mr. Lynch: Three or four revenue streams come in from the fishery. The royalties, which come right off the top, are charged — I am not sure how much they charge, anywhere from 500 tonnes to 600 tonnes — and that goes directly to Nunavut interests. There is also profit-sharing so the more of the vessel you own or more ownership you have, the more profits you will share. Qikiqtaaluk Corporation and BFC own 51 per cent of certain vessels so they share in those profits after expenses.
There are also crews on those boats. We are increasing the crew. At one point, about three years ago, we had one or two Inuit on a boat, now we are up to 15 Inuit working on the boats. There are significant wages going back to communities.
Directors from those HTOs are paid to be members of the Baffin Fisheries Coalition along with other organizations, I will assume. There are many other revenue streams coming into communities as well as direct payments. It is not just royalties. Royalties are just a fee off the top. Most of the companies that get royalties, like BFC, have put some of that money away for science and for buying boats and so forth. As the minister said, you are better off asking the businesses about how they distribute the funds. They tell us they have set aside amounts of money for buying a boat, for community hunts, and for scientific research. There are several revenue streams that go back to the community and, of course, we want 100 per cent of that. My minister stated that in his papers and we want to capture all of that. That is the direction we are going.
Senator Adams: The only problems are the scientists. DFO scientists have $200 million a year to do research and nothing comes to Nunavut. That is where we have problems. They give us quotas of 8,000 metric tonnes, but when we ask them about the future of fishing up there, and DFO does not know. That is where we have a problem with the operator, with the DFO.
Give us that water and everything up there, and the adjacent strait; give it to Nunavut. We can operate. If a company wants to come there fishing, either we sell them quotas or do a partnership with them. That is the only way to make money with the system. With this system, we are not going anywhere.
The Acting Chairman: My question relates to your presentation under the heading of ``Access and Allocations.'' It is on page 9 of your brief. On the second bullet it reads, ``The Government of Canada continues to accept a 50-50 split with Greenland on 0A plus 1A turbot when our share should be closer to 60 per cent based on resource surveys.
Would the minister please comment?
Mr. Lynch: The science that on 0A indicates that 59.7 per cent of the biomass of turbot is in Canadian waters, so we expect the Government of Canada to take the 59.9 per cent for Canada and Nunavut, as we would expect in any fishery. If the percentage that is in our waters is at that level, we would expect them to do that. Right now Canada splits it 50-50, which is not equitable, given that the majority of resources are in Canadian waters. That is what DFO in Winnipeg says, which we co-fund.
Senator Watt: I am not sure I have any more questions after Senator Adam's questioning on that point of quota. I am happy that you explained how the system works. You do not have the funds that you need, to be able to execute some of the projects that you like to do. At times you have to move slowly whether you like it or not.
Various people have explained what they do with the revenue streams when they come in, whether it is a bonus or other kinds of revenues. It was explained to us some years ago that they are trying to raise a pool of money to be able to participate fully, at a certain level, even if it is necessary to lease the trawlers and go into partnership, if it can be done, on the basis of the availability of funds. Often, you would like to do more, but cannot due to lack of funds. I think I understand that.
The issue that keeps coming back to me and that Senator Adams keeps raising, is maybe we have to put that question directly to those people who are actually managing it. We have to ask the Minister of Finance to keep that in mind and look into it.
If outsiders are taking more benefits from the people who should be getting them — because it is their resources — then I do believe Senator Adams has a case and if he does, we need to hear that. That would also be beneficial to your government.
Coming back to the point raised by the president of Nunavut Tunngavik Incorporated, Mr. Paul Kaludjak said, if possible, that he would like to have from 85 per cent up to 100 per cent of the allowable quota. Let the Nunavut government handle that, and from there, you would be able to go to financial institutions with it, which you cannot do right now. At the same time, you are having difficulties getting meaningful money from the Government of Canada to build up the infrastructure you need.
What would you recommend? Some people hold on to a certain percentage of the shrimp quota, for example. There is the person we heard so much about, the doctor that has a big stake in that. I do not think he would turn around and donate it to you because it costs money. How will that be dealt with? This is privately owned and I understand he is not only a doctor but he is also active in some other areas. This is something that you might have to take a good look at and see how you can buy him out.
Mr. Lynch: That is a very good point, senator. There is funding that has been put in place for Aboriginal programs in Atlantic Canada. They bought back quotas and boats but Nunavut has not been able to access that funding.
Senator Watt: Why?
Mr. Lynch: We put the question forward, but the answer was vague. I do not think we have really received a solid reason. In the recent budget, $25 million was announced for Aboriginal programming to buy boats and allocations in Atlantic Canada. We feel there is a great opportunity for that type of program to be implemented in Nunavut.
Right now, with very little cost to the minister, we could be given access to the competitive quota in 0B; it is 1,500 tonnes, which would help us. I also would suggest that the Minister of Fisheries and Oceans — if the will was there, as in Atlantic Canada — could help us buy back the company quotas I talked about from Clearwater and Seafreez; 1,800 tonnes of fish is a significant amount of fish.
I would ask the Senate to research those quotas and see how much of the profit is going to Canada. I would say that it is fairly minimal. I do not think any fish is processed in Canso and Burgeo, as promised by Seafreez. Seafreez has not purchased any new vessels. We are hammered in Nunavut, where we have been moving forward with limited resources and we have purchased, with limited dollars, 51 per cent of shares in certain vessels; yet those companies have not. It is almost like a double standard.
We encourage the scrutiny because we are moving forward with no resources. It is challenging, senator. Our department is going forward and asking for assistance, but DFO has not put any money on the table to buy back resources. DFO has not even entertained the idea. I would ask you how we go about getting Canada to listen.
Senator Gill: Do you have any plan to do that?
Mr. Lynch: We have the Nunavut Fisheries Strategy, which says here is the approach to go forward. It was sent to the government in 2005, but DFO has not adopted it. They attended the working meetings when we developed it, and the government of Nunavut co-authored it with industry input, but DFO has never stepped up to the plate. Other than a letter from the minister acknowledging it, the department has never helped us move forward with the strategy. That is our guiding document of how we move from where we are to where we need to be.
Senator Watt: How many vessels are we talking about in the operation, aside from the one that you consider working according to the guideline that you have set up?
Mr. Lynch: We have three vessels that are 51 per cent owned by another interest. Qikiqtarjuaq has two vessels that they are approaching to purchase. Our fisheries strategy talks about a balanced fishery, so we have to move forward to an inshore fishery, which will include more small boats, more ownership by the communities and more social and economic development, creating more employment and wealth in the communities. We have no infrastructure to move that forward, and we have to do more research to see if we can do that.
Only four or five years ago, no one thought we could land the fish we are catching now. If they did, we would not have these fish. I can guarantee you that other big companies would be catching it. We proved that we could catch it.
There are many little glitches and we know it, but we are here and we have done it. Now we have to evolve. We need a mixed fishery — an offshore and an inshore; we need to have both.
How do we do that? We need help from DFO to do what they have done in the south, buy back more quota in 0B, buy possible enterprises, perhaps a 65-foot fleet and help us institute that slowly but surely. We also need infrastructure, small-craft harbours, because you cannot buy these vessels without that. As Senator Adams said, they bought a vessel in Clyde River and it went ashore twice and broke up. It was a significant investment by the HTO and the vessel was destroyed. What do you tell the community — so sorry? That is a lot of money for a community with a significant unemployment rate; that would have a huge impact on that community.
Those are some of the issues. The fishery strategy is a guide to move forward, as is our strategy for small-craft harbours. We produced the documents; we are producing that information and working but the other part is not connecting.
Mr. Simailak: The frustrating part is that what we are asking for is not new. The Government of Canada is doing it in the rest of Canada, so why not in Nunavut?
Another core area we have not touched, which is of great interest to Canada, is Arctic sovereignty. We are there; we are 26 communities stretched across the North with no infrastructure of any kind when it comes to docks, highways or whatever any community needs. We are there. Arctic sovereignty is becoming more and more of an issue and we are right there.
Senator Gill: You do not receive anything from the government for that.
Mr. Simailak: No, but we have great rangers that patrol all over the country.
Senator Watt: If the Canadian government does not start taking this seriously and start making some investment, somebody else will do it from another country — like the United States, for example. Have you tried that avenue? Maybe you should be negotiating with the United States, if you cannot give your government to give you sufficient funds.
Mr. Simailak: The Americans keep saying that the Northwest Passage is international waters.
Senator Watt: They will be passing right by your window. You will see the dollars going by and you will not have any control over it.
The Acting Chairman: I found it interesting when you noted that you had to access five departments to get your work accomplished. Establishing our sovereignty in the North is an important issue.
I understand that Nunavut has one licence and several boats are fishing that licence. How does the licensing system work?
Mr. Lynch: That is a good question. As my minister said in his speech, we want a licensing policy that is reflective of the North. Right now, we have allocations of quota. We have one groundfish licence, which is allocated by the Nunavut Wildlife Management Board, and QC has one and one-half offshore licence for shrimp. The licensing regime is not in place and we need one for Nunavut, which is reflective of the North and how we move forward. However, we do not have one right now.
Senator Adams: With respect to Arctic sovereignty, when the people moved up there, I was on the same ship, 1953. I got off in Churchill Manitoba. Seven of us were hired to build the Resolute base. We could not get in until the ice broke up so we got off at Churchill, Manitoba. When I left, Charlie was a little kid and went to school in Churchill. We have a lot of background history about Arctic sovereignty.
At that time, I asked the minister about developing the Nunavut strategy for the fisheries. His response was to give 27 per cent royalties to go to the fishermen. I do not know how the people in the East got that $25 million while the Government of Canada only gives us 27 per cent.
I know how the FTO started with 10 members. The director got one share for each community. The directors did not have any voting shares or experience. Those people, hired as directors, were skewered. According to the land claim agreement, the strategy for the fishery was to be developed by the DFO and the NTI. It should have been set up for the organization to go to every community and explain how the future quotas would work. They never did. That is why we have too many problems right now. The people are not from those communities. The Qikiqtaaluk Corporation did not have a fisheries background. They had a partnership with the foreigners. In the meantime it was the NTI Corporation.
I thought NTI set up the corporation at that time. If the corporation worked well, made a profit then I thought it was supposed to be turned over to a company owned by Nunavut. It is not working that way.
Right now, the Broughton Island community has a competition with Inuit people only. That is why I want to find out more to set up the fishing strategy in the future for Nunavut. Bill C-45 is coming out dealing with fisheries and it does not say anything about the future for Nunavut.
There is the example from Broughton Island. Presently there are two people travelling up to the community to ask them how they feel about the future of fishing. From that, we will be able to find out more from people who live in that community.
BFC is not looking for a partner. They are looking for somebody to work on the ships. We found out last week that of the $5.5 million for education of the people working in the fishery none went to Mr.Simailak but rather to Memorial University. It went there from the Northwest Territories government. That is why I have a difficulty with this. Why did that $5.5 which was to go to Nunavut end up at Memorial University in Newfoundland? They got the money and the ship owners, who are not Canadian, get help from the government to the Inuit jobs on their ships.
Senator Gill: I imagine you know about the budget and the allocation of money that you have for Nunavut and the allocation that DFO has for Nunavut. I imagine DFO has scientific employees in the North.
Mr. Lynch: They have 15 employees in the North. Some are in Iqaluit, one or two based in Rankin but most are in Iqaluit. These are enforcement officers, managers and a biologist or two.
Senator Gill: Are there possibilities for those employees to work for you and have the money with them? It seems that there are many people working in the same field. It is confusing. I imagine it is very difficult to work for you over there. You have responsibilities. You would like to do something but you do not have the tools.
Have you ever asked the DFO if they would do that?
Mr. Simailak: To my knowledge, we have not asked them.
Senator Gill: Do you want to try?
Mr. Simailak: They are there to enforce federal, not territorial, laws and regulations. They have other work to do.
Senator Gill: They can proceed by delegation of authority to you. It is possible. There are many places where the government does that.
Senator Watt: They are only interested in dealing with the regulations.
Mr. Simailak: I would like to make a couple of points, regarding the $5.5 million training money going to Memorial University that Senator Adams mentioned.
Back in 2005 we were successful in getting HRSDC to contribute to the funding of the Nunavut Fisheries Training Consortium, based in Nunavut. In addition to the HDRSC, our government, INAC, Kakivak and the industry made commits to this new initiative. The goal is to train Inuit for involvement in the fishing industry, from entry-level to higher-level jobs.
The training that is needed to get the papers and certificates required to work in the industry must be provided through an accredited institution. Therefore, a partnership was reached between Nunavut Arctic College and the Marine Institute of Memorial University of Newfoundland to develop and provide the training. A majority of the training is being provided in Nunavut through Nunavut Arctic College, where they are developing capacity in this field and have benefited from investments in gear and the new Smart Classroom. Overall, a very small portion of the budget actually goes to Memorial University. Most of it is spent in Nunavut.
The Nunavut Fisheries Training Consortium is actively going out into the communities and looking for Inuit for careers in the fishing industry. The consortium visits high schools to show students the career opportunities and the potential to take longer training for certificates.
The NFTC is for the whole of the Nunavut fishing industry. All interests are welcome and have been asked to join and participate and they are participating. Most of the money is spent in Nunavut with a small portion going to Memorial University itself.
Senator Adams: How many years will that last? Is it finished at the end of the term? Is there more grant funding? Will HRSDC put money in again? Is that only for five or 10 years?
Mr. Lynch: It was a five-year agreement but we did not spend all of the money because it took time to get it rolling so they extended it by one year. In the beginning, there were issues with getting classes going, the infrastructure in place and the glitches out of the system. There are two more years of funding but that is not to say that we will not go forward with a request for more funds because we have inshore fishery development happening and there will be training in that area. As well, there is more money in the budget for Aboriginal programs at HRSDC. We hope that we will be able to access that funding. The funding that we receive has been positive as a training component.
The Acting Chairman: For clarification, you left the committee with a number of recommendations that you would like us to consider. You recommend:
The federal government should support the Government of Nunavut, Nunavut Tunngavik Incorporated and the Nunavut Wildlife Management Board in their efforts to develop the Nunavut fishery, implement the Nunavut Fisheries Strategy and the new allocation policy for Nunavut's fisheries resources;
My question is on the new allocation policy for Nunavut's fishery resources. Has this been established? Do we have an allocation policy? Is a committee in place to look after this?
Mr. Lynch: The Nunavut Wildlife Management Board has begun a process of community consultations. I believe that on June 11, 2007, they will roll out the next version of the policy. They have been tasked with the development of the policy, and we have submitted our input. The NWMB is independent of government. Other agencies, DFO and NTI, have submitted their input on how they want the policies to go forward. As a guideline, they are using the Nunavut Fisheries Strategy, which was approved by the cabinet and by NTI. It will be compatible with the strategy while reflecting the input received. We are waiting to see what the policy will look like. There will be consultation with industry and stakeholders on June 11 and 12 and further comments will be welcome. The NWNB is in charge of that policy development.
The Acting Chairman: Mr. Simailak and Mr. Lynch, thank you for appearing before the committee this evening to provide us with an update on the state of fishing in Nunavut and the Nunavut Fisheries Strategy.
The committee adjourned.