Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 7 - Evidence - May 26, 2009
OTTAWA, Tuesday, May 26, 2009
The Standing Senate Committee on Fisheries and Oceans met this day at 5:06 p.m. to study issues relating to the federal government's current and evolving policy framework for managing Canada's fisheries and oceans.
Senator Ethel M. Cochrane (Deputy Chair) in the chair.
[English]
The Deputy Chair: Good evening everyone. It is my pleasure to welcome you to the Standing Senate Committee on Fisheries and Oceans. My name is Ethel Cochrane, I am a senator from Newfoundland and Labrador, and I am the deputy chair of this committee.
Before we begin, I would briefly like to have all the senators introduce themselves. That is the best way to proceed.
Senator Raine: Senator Greene Raine, from British Columbia.
Senator Manning: Senator Fabian Manning, from Newfoundland and Labrador.
Senator Cook: Joan Cook, from Newfoundland and Labrador.
Senator Adams: Senator Adams, from Nunavut.
Senator MacDonald: Michael MacDonald, from Nova Scotia.
Senator Robichaud: Fernand Robichaud, from New Brunswick.
Senator Eggleton: I am Art Eggleton, from Toronto. Everyone looks shocked that I am here. I am here subbing for Senator Hubley, who cannot be here.
Senator Watt: Senator Watt, from Nunavik.
The Deputy Chair: That is northern Quebec. Thank you, senators.
Before us today we have two witnesses: Mr. Poirier, President of Alliance des pêcheurs professionnels du Québec, and Mr. Frenette, Executive Director of the Prince Edward Island Fishermen's Association, PEIFA.
We welcome you here and, on behalf of the committee, I thank you for taking the time to appear before us. We would appreciate if each representative could make just short opening remarks. The senators will ask questions after you give your address.
We will begin with Mr. Poirier.
[Translation]
Léonard Poirier, President, Alliance des pêcheurs professionnels du Québec: Madam Chair, thank you very much for having me. We are experiencing a crisis of major proportions in the lobster industry. We therefore much appreciate this opportunity to appear before you.
As you well know, the lobster industry is a one billion dollar industry. Approximately 50,000 tons of lobster are landed each year. Some 10,000 small fishing businesses are involved, along with 25,000 people who work on the boats and an additional 25,000 people who work on the docks and elsewhere. It is a very important industry for all of the Atlantic provinces, including the coastal regions of Quebec, the Magdalen Islands and the Gaspé region.
As for the specific case of our region, Quebec, the Magdalen Islands account for 75 per cent of the lobster industry and the Gaspé region 25 per cent . There are two sides to the crisis. It is structural in nature, but it also is tied to current economic conditions. Dealing specifically with Quebec, the people in the Gaspé region are faced with both of these challenges. In the case of the Magdalen Islands, the crisis is tied more to economic circumstances.
In structural terms, what could be done? Clearly, there are a lot of companies. My colleagues will talk to you about that later on. It is often said that one possible solution might be the rationalization of the industry. I wish to mention the report of the FRCC, the Fisheries Resource Conservation Council, that advises the minister of Fisheries and Oceans. This report is very valuable to us in Quebec, especially in the Magdalen Islands.
We were the first to ask that that council study the lobster industry. When the council was established in 1993, it was to study groundfish. There are recommendations contained in this report and possible solutions to the structural problems.
However, those who have, like us, done their homework, especially in the Magdalen Islands, are nevertheless experiencing the same price crisis. The situation in the United States is having an impact on our exports and our lobster prices.
I denounce the statements according to which there can in the short term be no monetary assistance for the lobster industry because of the rules of international trade. In my opinion, these rules are not an obstacle that would prevent the government from coming to the aid of fishers.
First and foremost, you know full well that the rules of international trade are essentially political responsibilities. It is the government's duty to ensure our economic security, given the globalization that has occurred without our having asked for this. Between 1985 and 1990, all of the existing programs that provided support in this globalization context were abolished, particularly at the federal level. Let us recall fishing boat insurance. There was a program. There were maximum prices for bait. All of that has disappeared.
In the same context, there was a major transfer of costs from the federal government to fishers, namely in the area of the cost of licenses. Licensing costs were off-loaded onto fishers for reasons of cost recovery. As for our other fisheries, complementing that of lobster, we had to cover the costs of marine observers, dockside weighing and so forth. There were therefore a transfer of costs as well as the removal of the programs.
The federal and provincial governments never undertook discussions with the industry regarding the establishment of a second tier safety net to be added on to employment insurance which, as you probably know, dates back to the mid 1950s in the fisheries sector.
You probably also know that in the area of agriculture, the federal government responds with assistance on two levels. At the provincial level, there is a third intervention level, at least in Quebec's case, in situations such as that we are facing at present. Such is not the case with the fisheries.
What I have been promoting for several years is the undertaking of a study on the situation of lobster fishers, in order to find medium and long-term solutions. It could be a three-year program, because we must not remain dependent. Efforts must be made and I support the idea that help must be provided to those who are making an effort to overcome their difficulties.
An important principle is that of fairness. It is not necessarily a principle of equality. In the short term, we need financial assistance and, once again, my colleagues from the other provinces will be discussing this with you. We have determined that for our industry, in the short term, a one or two-year program might cost some 100 million dollars. This is the investment that is required from the federal government to help us withstand the present crisis. I am suggesting that this cost be shared between the federal and provincial levels of government. There would be the creation of a commission, financial assistance for the lobster fishery and bipartite federal-provincial commissions in each of the provinces that would seek appropriate solutions, because even if we know some of the issues, the specifics vary from province to province. Rationalization of the industry would be facilitated in certain provinces, whereas in others, the solution might reside elsewhere, depending on the situation of the given province. A commission could be established and charged with finding solutions to the present crisis.
This 100 million dollar budget would be shared between the provinces, with a base amount and additional funding proportionate to the size of the industry. In Quebec, our industry being smaller, we might be provided with 8 million dollars.
I would be pleased to answer your questions.
[English]
Ed Frenette, Executive Director, Prince Edward Island Fishermen's Association: I have submitted my presentation in writing to the clerk although, unfortunately, it is not translated. I have also submitted a brief on employment insurance for fish harvesters. Perhaps, when it is translated, you will be able to review that.
Members of the committee, first, let me say that our organization has been remiss in not utilizing the expertise and influence of the upper chamber to its fullest in our struggle to improve the Atlantic fishery. On behalf the Prince Edward Island Fishermen's Association, please accept our sincere thanks for the invitation to appear before you today.
The topic of today's hearing is the growing concern over the 2009 lobster fishing season in Atlantic Canada. As the representative organization of some 1,300 core licence holders in Prince Edward Island for whom the lobster fishery is the primary income source, we are especially concerned about the present season, as well as the upcoming fall season in the Northumberland Strait.
Low prices, imposed quotas, the global economic and financial crisis, the softening of some traditional markets, growing pressures on harvesters by the processing sector, the ever-increasing costs of primary production — these and many more issues are cause for serious concern to our members.
Perhaps some background is in order. Inshore fishing is not a particularly lucrative mode of employment. Statistics published in 2006 by the Department of Fisheries and Oceans policy and economic branch show that fishermen in the three lobster fishing areas, LFAs, surrounding Prince Edward Island earned the following before-tax incomes from all fishing sources: In LFA 25 — lobster fishing area 25 — $7,082; LFA 26A was $11,010; and it was $63,423 in LFA 24. A lot of that depends on the resource that is there.
In 2008, fishermen endured a 20-per-cent decrease in the shore price of lobster. The price for canners, the smaller- sized lobster, was as low as $4 and markets at $5. That was down from $5 and $6 per pound the year previous. At the same time, costs of production — bait, fuel, gear, et cetera — increased by some 37 per cent in 2008 over the previous five-year average. This year in Prince Edward Island, ex-vessel prices have dropped to a staggering $2.75 per pound for canners and $3.50 per pound for markets.
Over the past two years, the overall economic loss to fishermen in P.E.I. is as much or greater than the cumulative revenue earned by the hog and beef industries at their peak in our so-called ``million-acre farm.''
With such an obvious cost-price squeeze, it is clear to see that this 55-per-cent decline in the shore price paid to fishermen will inevitably result in the bankruptcy or elimination of a solid number of Prince Edward Island's inshore fishing enterprises.
Fishing is an industry steeped in tradition. Lobster fishing is a competitive fishery. Harvesters fish the same area year after year. Most use techniques they have developed over the course of decades on the water. Most continue to sell to a buyer with whom they have had a long-lasting relationship and who provides bait and supplies as well as purchasing lobster. In the past two years, these traditions have been challenged.
Processing plants have been closed, independent commission buyers are being eliminated, and resource management proposals have been recommended by DFO that have caused confusion and angst among fishermen, all within the continuing litany of concern over the economic and financial situation we face. Fish harvesters are economically dependent upon the processing sector. There is no regulatory regime that establishes the price to be paid to fishermen for their catch in P.E.I. Traditionally, the harvesting sector relied upon the inherent competition between buyers wanting to purchase lobster. Now, that competition is being eliminated — with the aid of government decision-making — and fishermen are feeling the brunt as shore prices fall and input costs rise.
Lobster harvesters recognize that change in their industry may be inevitable, but to adjust to that change willingly, fishermen demand a certain level of participation and protection. For example, Island lobster harvesters have long called for a licence rationalization program that would see the permanent retirement of licences from the fishery. For two brief years, in 2004 and 2005, using funds from the sale of a snow crab quota, LFA 25 was able to permanently retire nine lobster licences and shelve a number of others for one year. Since then, Island fishers have been requesting government support and, most recently, have entered into discussions with federal and provincial authorities to develop a rationalization process with contributions from the two levels of government and the industry. I would point out that the crab quota was eliminated because of court decisions.
If agreement is reached, we hope to see a process whereby primarily older fishermen will be able to exit the industry with dignity and those who remain will see improved access to a stable resource. Also, specific assistance to younger, new entrants seeking to enter the fishery would be made available. We are also examining broader issues of eco- labelling, having gone through a marine stewardship council pre-assessment and the Ocean to Plate concept of harvesting for the market. These are long-term considerations that require time and discussion to determine. Short- term concerns face us immediately.
The harvesting sector in Prince Edward Island is frustrated with the price differentials being paid in other areas. Nova Scotia fishermen who are fishing the same waters for the same size of lobster have been receiving 75 cents more per pound for canners and 50 cents more for markets than their colleagues receive in P.E.I. Unbelievably, some P.E.I. processors are paying that price in Nova Scotia — plus shipping costs to plants on the Island — where they pay local harvesters 20 per cent less. When asked, processors simply provide no rationale for this apparent contradiction.
What will be the effects of such low prices on the harvesting sector this year? First, since most harvesters hire two helpers, one of them will be eliminated. What does that person do to survive? Where does he or she go to find work? Second, given the competitive nature of the lobster fishery, harvesters will necessarily increase fishing pressure on the stock in order to earn as much as possible in their short two-month season. This could have damaging effects on future lobster stocks in the region. Third, as the incomes referred to previously become even less, many fishermen will be forced into bankruptcy, forfeiting not only their fishing enterprises but also their homes, property and investments that they already borrowed against simply to make ends meet.
The only protection against economic disaster in the lobster fishery this year is government intervention. The PEIFA submitted recommendations for inclusion in the recent federal budget, including the establishment of a stabilization fund for harvesters; financial support to rationalization; policy initiatives to ease access to credit for fish harvesters and processers alike; funding support to a national agency to promote seafood marketing, eco-labelling and ocean-to-plate initiatives; reduction to certain fees, such as licences and observers; tax reductions for the application of green technologies to fishing enterprises; improved science, research, enforcement and small craft harbour programs by DFO; improved training assistance for fish harvesters; and encouragement to the provinces to initiate and improve fisheries loan board agencies and programs.
In all of this, we have seen a short-term marketing effort introduced and an announcement for longer-term marketing and development, funding to small craft harbours, and contracting of a consultant by DFO to examine lobster licence rationalization in the Northumberland Strait. However, there was nothing included in the budget that would ease the effects of a serious decline in the 2009 season.
An immediate problem to be faced by captains and crews with the event of low prices is eligibility for employment insurance. If a system was implemented whereby a captain and crew members on a share-of-the-catch basis could qualify for EI based upon 2008 landings, then the situation could be eased. First, with the certainty of EI, the captain would not place additional pressure on the stock, thereby contributing to conservation. Waged helpers would be able to fish the full season, being paid from landings and, therefore, qualifying for their own EI support.
Fuel is a major input cost. In 2008, we saw the cost of fuel reach staggering prices, and there is nothing in place to prevent a reoccurrence. Today, we see the price of both crude oil and fuel at the pump rising quickly. Canada's primary industries must have a mechanism in place to protect primary producers from sudden and enormous increases in fuel costs.
Another major concern is the cost of bait, primarily herring, for the lobster fishery. The spring herring fishery is on the verge of being closed by DFO, this while adjustments were made to the harvesting plans of the large purse seine fleet in the Gulf of St Lawrence, which allowed them to land smaller fish, and changes were made to the small fish protocol that see this fleet landing ever larger percentages of spring component in the fall purse seine fishery. Without a spring herring fishery, bait must be purchased from off-Island corporations at exorbitant prices that add to the cost of operation. Immediate steps must be taken to limit the destruction by the purse seine fleet on herring stocks in the southern Gulf of St. Lawrence.
We have seen and heard much of the stimulus approach taken by governments around the world to fight the present recession. Incentives should be in place to encourage fish harvesters to purchase needed equipment from local suppliers. If fishermen stop purchasing needed equipment, not only do local economies suffer, but it also leads to a growing threat to safety at sea for vessels and fishermen alike.
Specific to P.E.I., the harvesting community is united in its position that the so-called ``ocean choice agreement'' be annulled. While this is purely a provincial matter, the agreement limits competition and reduces processing capacity with the consequent effects on the harvesting community. The moral pressure that can be applied by this committee to the province can only assist in seeing this agreement revoked.
In closing, we thank you, Madam Deputy Chair and members of the Senate fisheries committee, for this opportunity to address you. We look forward to taking any questions you may have for us.
The Deputy Chair: Thank you, Mr. Frenette.
I am sorry what we did not have our other two witnesses here as well here because their testimony could make it more cohesive.
[Translation]
Senator Robichaud: I wish to thank the witnesses for appearing before us this evening.
Mr. Poirier, you talked about a second level safety net and you then stated: we now need a short-term program. Could you give us a broad outline of this short-term program that you have in mind?
Mr. Poirier: Obviously, in the short term, we will be needing a program to put the lobster industry back on the rails. We therefore require a somewhat considerable amount of money in order to restructure the industry. The possibility of a rationalization of the industry has been mentioned in several cases. In some cases, such as that of the Magdalen Islands, we would rather lean towards stabilization of the industry because tremendous efforts have already been made there with regard to the resource. In the short term, we will certainly be needing money because none of our businesses are covering their production costs. We need money if we want to avoid bankruptcy and seeing our family or cottage- type businesses taken over by conglomerates or other such structures, which would be very harmful to the resource.
Vertical integration is all fine and dandy, but history has shown that the best defenders of the resource are the inshore fishers. When a resource is shared among many, and we in the Magdalen Islands are proof of this, and are recognized throughout the Atlantic as being people who take care of the resource, it can be well managed, whereas when the resource is concentrated within a few hands at the industrial level, the risk is that the resource disappear, as has been the case with cod, with redfish, and many other species. What is required is a short-term program, given that we are not earning enough to cover our operational costs. When I talk about a second or a third level program, it is because for 55 years now, since the establishment of employment insurance, a form of minimum income, this has had nothing to do with fisheries as businesses. There is no direct link with the direct income and expenses of a business. There should be a second tier, for the medium and long term. Fishers should be granted a second level safety net, along the lines of what exists for agriculture.
In agriculture, there are first and second level programs in place. When a difficulty arises, according to its seriousness, one can call upon a first level of assistance. If the crisis is worse, then you are entitled to the first level as well as to the second level, given the gravity of the situation.
Some provinces have added a third level. They have safety net measures that are better designed than those available to fisheries. This should be looked into.
I however know that some people are fearful, given that the way the program has been devised for agriculture is being challenged. I can but approve of some of the reforms being made in agriculture. The major difference between the fishing industry and agriculture is that in the latter, given that it is based on production, farmers have produced and are producing more and more, such that the programs have been very costly because they were based on production.
That is not the situation for the fisheries. In our industry, we harvest one species and there is a set quantity. Even if there were safety nets for fishers, which do not exist at present, it would be very easily quantifiable. There is no risk of inflation, because in the fisheries, one cannot overproduce. There is a given harvest size.
We have to think about getting through this crisis. We also have to think about never reliving the same thing. I would however like to underscore the fact that there is a difference between the 1990 crisis and the one we are now experiencing, and it is the following. The crisis at the time was difficult. Back then, prices were about 7 per cent below fishers' costs of production. Today, they are 15 per cent below costs of production. Economically speaking, the crisis is worse, but the major difference with the situation in 1990 is that we must not look solely for a short-term solution as we did then. In 1990, we climbed out gradually, with the help of certain provinces, among other things, but we were not faced with the same market organization as we are seeing in 2009. This is a major difference.
No matter what solutions are put forward, along the lines of rationalization or whatever, we must consider that today, those who are the closest to the consumer are fewer and they are waiting for us, as we say back home, on the other side of the fence, which was not the case in 1990.
You are aware that everything goes through Boston in order to reach Europe, Asia or elsewhere. It is but two or three families that control the market from there onwards. In Quebec, only two or three food chains control all of Quebec.
That is the difference compared with 1990 that we must not lose sight of. We have to work towards solutions while keeping in mind financial solutions, but we should perhaps not exclude, in an extreme scenario, certain regulatory measures within provincial borders, in case the market does not regulate itself on its own.
Senator Robichaud: You talk about long-term programs. If I understand correctly, you have in mind a catch insurance program similar to crop insurance. This is something that usually takes a long time to put in place.
Would fishers be prepared to contribute to such a plan? I believe that crop insurance does require that growers contribute and pay premiums.
Mr. Poirier: You are right, it is always preferable to introduce this type of program when things are going well in the industry. Which is why I am so disappointed, because we promoted the idea for several years. As a fisher told me, ``It is not when your house is on fire that you should be thinking about paying your insurance''. But that is what I am saying, as far as the short term is concerned. I am here because of the short-term crisis, to which we must find a solution, and that is what the 100 million dollars are about. We are in agreement at a certain level. Some people will prefer rationalization and others will prefer support measures in the short term to cover operational costs.
With regard to operational costs, there is an alternative. It would be to reduce the taxes on fuel. It would be to reduce the cost of licenses, with a freeze over several years; those measures and other things would be a help to start with. I believe that there are possible solutions to cover these costs. There could be funding to help with the hiring of assistant fishers. There are therefore various possible solutions that would not be in contradiction with any free-trade agreements or international trade.
In agriculture, there has been talk about this for years. For years now, countries have been attempting to reach agreements. The fisheries were kept on the fringes of these discussions on international trade of agricultural products. There has been no agreement, and in my view an agreement between the various countries to reduce their assistance for agriculture will not come overnight.
In this context, the argument pertaining to international trade rules being invoked so as to not provide support to the lobster fishery in Atlantic Canada and in Quebec is to my mind unjustified. All the more so because in 1990, I was there, I witnessed what took place, and we received assistance. We were never reprimanded for it by other countries or for reasons of international trade. It is important that this help be provided to us quickly.
Senator Robichaud: Mr. Poirier, would you be in agreement with Mr. Frenette's suggestion that in order to assist fishers during this crisis, employment insurance rules be relaxed in order that fishers be able to qualify depending on their catch numbers from the previous year, let us say 2008?
Mr. Poirier: This is why I am asking or pleading for some flexibility. As a representative from Quebec, we do not necessarily all face the same exact problems. And this is why I am pleading for a budget that would offer some flexibly and that would be shared by the federal and provincial governments. I am not opposed to the idea, on the contrary, because that would certainly be helpful. But we must visualize the fact that the problem is not necessarily the same everywhere. We are not all at the same level, not of development, but of fleet restructuring. In the present context, I am in agreement with the provision of assistance for the most disadvantaged fleets, the less structured fleets, but this whole rescue plan for the industry much provide encouragement to those who are making an effort. The principle at play must be that of fairness. Those who have made an effort and who are going through a rough patch today need help, because whether your head is 20 feet under water or three feet under water, you are going to drown.
What I am saying, is that I have less of an effort to make, but I must nevertheless be provided with assistance. I see no problem with regard to the idea of revising the rules governing employment insurance.
[English]
The Deputy Chair: We now have two other guests: Earle McCurdy, President of the Fish, Food & Allied Workers Union, FFAW, and Christian Brun, Executive Secretary of the Maritime Fishermen's Union, MFU.
The other two guests have already made their introduction. Would you like to make yours now so that the four of you can be together? We know you have not heard the speeches of the other two, but it might be best if we have you in here now so we can all be one panel.
Earle McCurdy, President, Fish, Food & Allied Workers Union: I will be brief. I apologize to the committee for being late. We wanted to take advantage of being in Ottawa to squeeze in as many meeting as we could. We were delayed with Minister MacKay. Having said that, I have all the confidence in the world that my colleagues here kept you busy and well informed with all sorts of creative ideas in the meantime.
The situation facing us and our province in the fishery this year is horrendous, even by our standards. I take a guess now that our landed value — in other words, the amount of money paid to fishermen this year for their landings in Newfoundland and Labrador alone — will probably be down by $100 million compared to last year. That is $100 million right out of the economy of the small communities on the coastline — it is gone, disappeared. The impact that has on families and communities is very great.
For a lot of our communities, our landings for lobster are not as high as they are in some other provinces and our number one species would be snow crab. However, having said that, I would estimate that for 1,500 or more of our fishing enterprises, lobster would be the number one species. For those people and for certain communities, especially on the west and south coasts in Newfoundland, lobster is as important as it is anywhere else.
It is a grim situation. Prices are down for everything. Cod prices are way down. We do have a cod fishery, you will be surprised to hear; it is a small one, but we do have one. They have magnificent product and are not being paid as much as they should be. However, in terms of the lobster fishery, it is really below break-even.
There are longer-term issues, one of which was addressed by the Minister of Fisheries and Oceans recently, although I am not clear on the details of marketing initiatives. However, you have to survive the short term to participate in the long term. Nonetheless, it is important to address how we market. We are getting reports that some of these lower prices we are receiving are not being reflected in consumer prices in the United States but, in fact, the middlemen and the retailers are taking advantage of favourable circumstances.
The other longer-term piece that is badly needed is fleet rationalization: The amount of sheer number of licences we have for the amount of available resource is out of whack; it puts pressure on the resource and it puts pressure on the economics of the individual enterprises. Our members are certainly prepared to pay some of the costs of a rationalization program. The Newfoundland and Labrador government is on record as saying they will cost-share with the federal government. The missing piece at the moment is having the federal government come to the table in a three- way plan to ``rightsize'' our fishery for the next generation as we — the baby boomers — move out of the fishery.
Again, that is a longer-term one. In the immediate term for this year, it is a grim situation. Regarding the EI program as a mechanism for addressing this, it just so happens that economic market and resource considerations dovetail into this one. Let me say what will happen if nothing is done. Other than a year ago, a solution would have been fairly easy — people would have gone to Alberta or Saskatchewan for work and taken the year off fishing. That option certainly is not what it used to be. People are coming back the other way; coming home because the jobs they had out there have disappeared.
If there is no other option, people will put extra stress on the resource to get what they can out of it. Even if you are not making money on an operational basis, at least you are establishing the basis of having an income for the winter. That is not doing anything for the individual harvesters or bottom-line economics; it is continuing to draw from the fund. Every expectation would have been that the fund would have had the same payout in fishing claims this year as last year. That puts more pressure on the resource and it adds to an over-supplied market; we already have too much inventory. Therefore, it is kind of a worst-case outcome.
A pilot project mechanism in the EI Act would make it relatively easy to work with compared to some of the other options for getting funding for different initiatives. If there was a pilot project allowing people to define the circumstances under which they could have the option of using their 2008 earnings as the basis for their 2009 claim, it would greatly lessen the pressure for what I call ``desperation fishing,'' which I just described.
It would have resource benefits, in terms of lessening the pressure on the resource, and it would also tend to cut back on the building up of inventory. If that should happen, the building up of inventory just guarantees that next year will be a disaster, too.
In my mind, what we want is to find ways to get through this year and cut back on production. That is preferable to getting through this year by building up more and more inventory. People talk about holding facilities. That is okay but, if you hold a pile of lobster, at some point have you to sell it. You have to find someone to eat it and pay for it. I can just see the probability of having a huge inventory build up going into 2010 and just compounding our dilemma.
In my mind, this is the same set of global circumstances that has caused so much chaos in so many other sectors of our economy. It is just a perfect storm of negative economic forces that has driven so many sectors into serious trouble. We are swept up in that. It is pretty tough stuff in those small communities when you take 40 per cent of the pretty modest amounts of money that were there in the first place and say, ``That just disappeared. Make the best of it.''
That would be it in a nutshell. It might be too late for that now.
The Deputy Chair: One of your solutions was the same as Mr. Frenette has suggested. We will go to Mr. Brun. We also have at the table, Ms. Wallace.
[Translation]
Christian Brun, Executive Secretary, Maritime Fishermen's Union: Madam Chair, I believe we have certainly covered the issue with regard to the details pertaining to this crisis and with regard to certain solutions that could be implemented to try to limit the impact on the fisheries. Without necessarily repeating what others have said, I would like to remind you that we are talking about an industry that does generate close to a billion dollars for Atlantic Canada. It is an industry involving some 10,000 fishers who are captains, owner operators, and to them you have to add another 10,000 people if you include the helpers who work alongside them, and then you have the plant workers who depend on the catch. We are talking about some 30,000 individuals affected in Atlantic Canada.
This industry is very important for the communities. To illustrate the impact this crisis might eventually have, if we continue to be subjected to this crisis without any intervention, without government support, in our region, Eastern New Brunswick, we have some 60 communities that, for the most part, have no other economic engine.
Therefore, when it is suggested that these people find themselves other jobs, other means of providing for themselves and their families, this is not a realistic proposition. If you take communities such as Pigeon Hill, Baie Ste-Anne, the region extending from Four Roads to Val-Comeau or, further to the south, Murray Corner, New Mills or the Cap-Pele region, these are remote communities situated far from urban centres and offering very few other options for work.
I would like to mention here a fundamental issue: the responsibility for the fisheries is a responsibility that is obviously shared with the industry, but its management is also a responsibility of governments. This is an important fact, especially today, when we see the private sector — whether you are talking about the automobile sector or agriculture, with, for example, its tobacco growers — recently getting considerable support from governments. The fisheries do not seem to be getting this kind of support, despite the fact that they are experiencing a crisis of extreme proportions.
In Atlantic Canada, this industry is a cornerstone of local economies, all along the shores of the four provinces, and I would also include Quebec, obviously.
The witnesses who preceded me talked about various short-term solutions, such as greater employment insurance flexibility. We are not asking for changes to the employment insurance system nor to investments in this program; what we are suggesting is that the system be made accessible to fishers. As things now stand, a fisher must have a certain income level to be eligible for the program, but this year, if the trend we are seeing maintains itself — which is quite likely —, if things worsen, as we can easily predict will be the case in regions such as that of Senator Robichaud, for example, fishery workers risk no longer being standing come the fall. The situation is all the more serious for those regions.
All we are asking is to have access to employment insurance; we are not necessarily asking for changes. We want fishers to be able, very simply, to apply this year on the basis of the numbers from last year. Therefore, a change to the eligibility rules but not to the benefits fishers would be receiving.
Secondly, we talk about trying to find a solution, a mechanism that would lead us to a minimum level of profitability for fishers. We have a few ideas to submit to you, but I believe that the long-term aspect, especially, must not be neglected. The issue of industry rationalization must not be overloooked. I believe that this is not only a solution, but also an inevitability. We cannot imagine a well managed resource — though some would debate the issue —, which has perhaps reached its peak, without a reduction in the number of fishers. Three advantages would flow from a move in this direction. First, this would improve the income of the remaining fishers, once a certain number have left the fishery; second, this would reduce the effort and the pressure on the resource, which is the government's responsibility in this industry; and, lastly, this would provide optimism for new entrants. We must not forget that in New Brunswick, 55 per cent of the fishers have reached the age of early retirement. We must therefore plan for new blood over the next few years, in order to ensure there is a next generation of fishers. Obviously, in order for people to invest heavily in this industry, there must be a certain degree of optimism.
I am at your disposal to answer your questions.
[English]
The Deputy Chair: Ms. Wallace, please proceed.
Katherine Wallace, Executive Director, Gulf Nova Scotia Bonafide Fishermen's Association: Thank you for having me here and I apologize for being late. I will tell you a bit about the Province of Nova Scotia, which has two regions — the Maritime region and the Gulf region. We have many organizations representing the fishermen. We are constantly in discussions so we know what the fishermen are feeling in different parts of the province.
There are different size requirements in the different LFAs within Nova Scotia. Unfortunately, they all seem to be getting paid the same price. In the central portion of the Northumberland Strait, fishermen have had landings between 3,000 and 7,000 pounds. Where the price is down to $3 and $3.50, it is not viable for them to fish. Coupled with the scarcity of the bait and the high cost of fuel, it is difficult for these fishermen to continue fishing. As my previous colleagues have stated, if EI were to roll over, it would give them some comfort. There would not be other demands on other fisheries, such as the scallop fishery or the ground fishery, that also have high costs associated with them.
In saying that, I would like to echo what has already been said. There is a responsibility by the Department of Fisheries and Oceans to look after the resources. The current structure of the fisheries is not looking after it, and they are not being responsible. Yes, the fishermen have a responsibility toward this as well.
There is a willingness, it seems, by the fishermen and the fishing industry Atlantic-wide for some type of change. It is recognized that there has to be a change, and the government has to start investing money in the fishery so that we can have the ability to change it. There are very different challenges facing the fishing industry today, such as certification, eco-labelling, the Marine Stewardship Council, MSC, which are all big responsibilities. The consumer and the public are putting the demands and the pressure on them and, in some cases, rightly so, but we do need help to change.
The public perception, unfortunately, toward Atlantic Canada's fishery is not the most enlightening. We need to educate the people in Canada to have a better outlook toward the fishing industry.
The Deputy Chair: Senator MacDonald has been waiting patiently to ask questions.
Senator MacDonald: Mr. Frenette, I was intrigued by the difference in the price of landed lobster in Nova Scotia and Prince Edward Island with 50 cents to 75 cents in the price of the shack lobster and even more in the price of American lobster.
Mr. Frenette: That was not percentages, senator.
Senator MacDonald: I understand. I want to believe that these prices are dictated by American forces, in particular in the U.S. It is a high-end product and in an economic downturn, the price of lobster is directly affected. You have told us, and I certainly believe it, that there is a market difference in the price of lobster landed in Nova Scotia and Prince Edward Island. When you asked the processors for an answer to this, they had no answer. What do you say the answer is?
Mr. Frenette: I can only assume that there is more competition on the Nova Scotia side than there is on the Prince Edward Island side. There has been a contraction in processing in Prince Edward Island over the last number of years. Beyond that, I cannot explain it, other than perhaps some profit taking.
Senator MacDonald: Ms. Wallace, you suggested that the federal government has to take the lead in addressing some of the problems with the lobster fishery in Nova Scotia. However, you did not really give any specifics. Could you lay out some specifics that you would like us to address?
Ms. Wallace: Yes, it would be certification, MSC, the restructuring of the fishing industry, which could include buying out fishermen. I do not think the federal government should take the lead on this. They should be sitting at the table working with the provincial governments and industry representatives.
Senator MacDonald: I have one more question for both witnesses because they both mentioned it, and I refer to the discussion about the price of bait and its availability. You mentioned it was mostly herring. While growing up in Louisbourg, it was mostly mackerel. In fact, as a young fellow I used to dip net gaspereau when the gaspereau were running. The lobster industry is much more sophisticated now than it was then. Is there a lack of bait because of the type of bait they are using in the market, or is there just a lack of any type of bait now?
Ms. Wallace: I will begin and speak for our area. It appears that the migratory patterns of different species have changed. There is an abundance of seals and they seem to be chasing the different species further out into the water. Where fishermen would routinely have their bait nets, they are not catching any fish.
We have asked for the Department of Fisheries and Oceans to become more lenient with some of their regulations. We have been trying for a number of years to have access for the fish trap, which is sight specific and could catch different species such as black backs. Most of them are mackerel traps. However, it seems that they will not allow them to be put in the water. They did have an early opening on May 25, but if they could put it in on the first of May, it would be a better opportunity for them to get access. We do have a request in to DFO to try experimentally with a few fishermen, a tangle net fishery, to which they have agreed, and another request has gone in for the dip nets. I find it interesting that you made that comment.
Senator MacDonald: Obviously, the huge explosion of seals on the East Coast is also affecting the price of bait for the lobster fishery.
Mr. Frenette: I will agree that seals are certainly an issue on the East Coast, not only in terms of bait but also in terms of damage to equipment and gear.
I suggest also, senator, that there is another issue in terms of the large vessel purse seine fleet in the southern Gulf. We have had issues in Prince Edward Island, on our north shore, with the purse seine fleet taking simply too much fish. As you may know from your background, there is a spring component involved in the fall fishery when those large vessels are operating. Their catch of that spring component is increased thanks to changes to regulations that DFO has applied to their fleet. Now we are seeing a drastic decline in the spring herring fishery. That means there is no fresh herring available to the lobster fishermen. Therefore, they have to buy it essentially from Newfoundland or from Scotia-Fundy.
Senator MacDonald: Is that frozen?
Mr. Frenette: Some is frozen, and some of it comes over so-called ``fresh'', but mostly rotten. It is very expensive and really can add to their input costs.
Senator MacDonald: When it comes to bait and seal, is it the herring that is a source of bait that they are damaging or are they damaging the mackerel just as badly?
Mr. Frenette: Everything, sir — groundfish, herring, mackerel, even the lobsters.
Senator Cook: Welcome, everyone. I just got a mass of information and I will confess right out that I lived in a simpler time in an outport where there was a lobster season, and it was very simple. Perhaps one of you can answer my questions.
The principles of fleet rationalization that you have in here, how far along the continuum are you with those principles? Have they moved? Has anything been done? I am looking at a quote here from the FFAW dated 2006. Are any of those principles moving through DFO, or where are you with that?
Mr. McCurdy: We are about where we were when we started. Within the DFO bureaucracy, there is an ideological mindset that the only way to deal with fleet rationalization is through what they euphemistically call self- rationalization, which is kind of a form of cannibalization. The problem is that it sort of presupposes that someone is economically better off to buy out a second enterprise. First of all, that only works in quota fisheries, and lobster is not a quota fishery. There are snow crab fisheries based on individual quotas, so one individual can buy out the quota of another. The problem is that is only a good move depending on what you pay for it. The cliché here is too many fishermen chasing too few fish, and we have a bigger problem of too much debt chasing too few fish.
We have the baby boomers moving through the population. There is a high level of interest in licence holders. We did a survey a couple of years ago and got 1,500 responses, which is a considerable response to a fairly detailed mail survey. There was a high level of interest in selling licences if the price was right. A lot of that has to do with demographics and some with economics.
We really need a three-way participation — industry, provincial government and the federal government. If all three were at the table, I think we could have a good rationalization program that will give the next generation of licence holders a better chance of a decent economic situation.
The Newfoundland government has said they are prepared to contribute 30 per cent of the cost of a rationalization program if the federal government will come up with 70 per cent. Bearing in mind it is a federal resource, that is not a bad offer.
I want to stress I am talking about voluntary. People would leave only if they chose to do so. We believe that would have the potential. It will not fix the urgent problem we have this year, but it would have the potential over time of rightsizing our industry, particularly as we move into that new generation and the baby boomers move out of the fisheries.
Unfortunately to date, even as recently as two or three days ago, I heard the minister talking about self- rationalization. First, I have no idea how one would achieve that in the lobster fishery. The fishery's resource conservation council, which is a creature of DFO, came out with this absolutely cockamamie notion that you concert the lobster fishery into individual transferable quotas. I do not know what they were smoking the day they wrote that, but there is probably a better dollar in that than there is in the lobster fishery I would think. Unfortunately, any progress will be measured in glacial terms.
Senator Cook: That was my first concern when I saw the principles and wondered where you were with them. Now, let us go to where we are today. I want to talk about the lobster fishermen. What will happen to them?
Mr. McCurdy: People are getting increasingly desperate. The lobster harvesters in our province were tied up for four days in a protest over the price. It was a bit of a call for help. Is there anyone out there paying attention? We have an urgent problem. I think there were some disruptions in New Brunswick today. People are getting increasingly desperate when they see the year passing them by. We do not have the ability to lose $100 million of landed value for fish products in our province without severe hardship on many people. How that will manifest itself and play out, God only knows.
Senator Cook: Are you saying that all the ideas and processes you have put forward over the years have not seen much action?
Mr. McCurdy: That would be a fair statement.
Senator Cook: I know what is happening now. I am living there; I am part of it. I know about gas prices and I know about lobster prices. I do not understand why you pay so much here in A and so much at B. On a moral issue, one of my daughters said, ``Mom, we will get lobster for cheap.'' I said, ``I am not eating them.'' It is that personal with me. Where do our people go next?
You are their leaders; you are there to see what can be done or must be done. This is an off-the-wall question: Have you looked at the stimulus package? I suspect you have looked at everything.
Mr. McCurdy: We have looked hard at it. I sort of wish someone would stimulate us. To date, the magnitude of that problem has not been grasped. In terms of part of this marketing, I think the buyers are taking advantage of the situation. I am not really a gadget or technology guy, but I was forced to have one of these things. This is from seafood.com, a respected industry daily newsletter that is circulated electronically. One of the headlines today was ``Retailers using low seafood prices to pad margins — not passing lower costs to customers.''
Part of the problem is that we have no strategy whatsoever as a country. Anyone at all with a buyer's or protester's licence is completely free to go out and ruin export markets in whatever manner they see fit — to dump cheap product on the market, engage in distress selling, et cetera. There is no such thing as a strategy to say: How do we make the best of the natural resource we have to try to get a return to the people to make a living on? It seems basic.
Senator Cook: The fishermen are completely vulnerable, with all kinds of stresses around. However, if the buyers can get the edge on this in the market, they make a few extra bucks.
Mr. McCurdy: We are not organized in how we approach the market. We go in almost begging the market to take advantage of us; that is the way we conduct ourselves. That is certainly true in our province and I do not think it is that much different in the others, but they can speak for themselves.
In our province, we have no strategy on any of our species as to how we extract the most we can, how we try to avoid undercutting one another and cutting the legs out from under our own position. In fact, there was a vote if you can believe this: The Government of Newfoundland and Labrador offered to put $5 million over three years into a Newfoundland and Labrador seafood marketing council to at least start looking at some of those things — namely, how we promote, brand and market our products.
The processors turned them down at a vote. I am not sure why they were given an opportunity to vote but they voted against it. ``We do not want your money. We would rather continue giving away cheap product because we have a solution for all those problems: We will get cheaper raw material off the fish harvesters.'' That is their solution. I do not know how that will manifest itself but I am looking forward to December 31, 2009, I can assure you that, just to get the year over with.
Senator MacDonald: We are price-takers not price-makers. That is the key issue. That has to change.
Senator Cook: Capitalist greed killed the codfish in my province and it looks like we are on the same pattern again.
Senator MacDonald: That may very well be.
Senator Cook: I am sure when I read this I will understand it a bit better but the only thing that I could get from your learned people in this industry is the EI solution. Could we work toward that?
Mr. McCurdy: For the short term?
Senator Cook: What will you do now? There is nothing to catch, no money for gas; there is nothing, except they are at the mercy of whomever. We have to do something for people now.
Mr. McCurdy: There is a need now. The EI benefit in the fall, based on last year's problem, while it will be very helpful for some of the reasons I expressed earlier, does not put any money in anyone's pocket this minute.
My own view of a way to address that, which would be consistent with what has already been done with most EI claimants, would be to retroactively apply to fishing claims the five-week extension that was applied recently to all regular EI claim amounts in recognition of the economic difficulties that we are facing in these days.
That would be a quick fix that might help people at least get —
Senator Cook: Did that not apply?
Mr. McCurdy: It did not apply to fishing claims for reasons that escape me. That would be something that could immediately put a little help forward.
However, the first thing that needs to happen is that someone in a position of authority has to say, ``We realize this is a very serious problem that needs the intervention of the federal government. We will proceed to work to it.'' We had a meeting a week-and-a-half ago in Moncton and, to be blunt, it was a bust; nothing came out of it. It was a waste of time.
Senator Cook: Someone will need to help me understand why there is an open market for fish for the lobster buyers. It seems they can set their own market and name their own prices and pick up whatever they can get from the fishermen. Is that what I am hearing?
Mr. McCurdy: It depends on the level of competition in a particular area, but once you get into inventory problems, there is this peculiar mindset. I mean, lobsters are as cheap as, or cheaper than, baloney at the moment, but people buy baloney because they cannot afford lobster. That is the kind of mindset we are dealing with.
They say, ``We are not interested in those shellfish products,'' perhaps because they tend to be consumed more in restaurants and the restaurant trade is way down. People are eating at home more because they cannot afford to go out. If they go to a restaurant, instead of going to a white tablecloth place where they might buy a main meal of lobster, they are going to a fast food joint because they have less money in their pockets.
Senator Cook: What can we do to help?
Mr. McCurdy: I guess the real authority to help us is the Government of Canada, but any influence you can bring to bear on them would be greatly appreciated.
Senator Manning: I want to comment about early remarks a few moments ago before asking questions. One major stumbling block is educating the people in this town on what is happening with the fishery, not only in Newfoundland and Labrador, but in Atlantic Canada. We hear the concerns in the auto industry in Ontario, which are real. We hear concerns in the farming industry out west, which are real.
However, it seems for some reason that the same impact or same feeling of that does not reach the right ears here. Hopefully, your efforts here today are in that vein that we will have some people who will listen to what is happening.
As a follow-up, we touched on the five-week extension. Can you give us a couple of options that we could try to push forward? I listened intently as you talked about the long-term issues but the short-term concerns.
Mr. McCurdy is familiar with my hometown of 500 or 600 people who depend 100 per cent on the fishery. I was on the wharf on Sunday for the blessing of the boats and I talked to a several fishermen there. I will give you a couple of examples of what I heard: Crab prices down somewhat this year. Cod, the small amount that was reduced in our area, is down from $1.05 last year to 50 cents a pound this year. It is a zero-lump fishery in our area this year.
Lobster is not my particular area. I am interested in the numbers for Newfoundland and Labrador. However, it seems that, while the lobster is making the headlines, there is a major concern in the fishery, overall. When Mr. McCurdy touched on a $100-million loss, I think our industry is over a billion dollars, give or take, in Newfoundland and Labrador. A $100-million loss is a major amount of money.
From a short-term point of view, is EI the answer or is there anything else that government can do to address that immediate concern?
Mr. McCurdy: I would like to clarify a bit on the $100 million. One billion dollars is roughly the export value; the $100 million is the loss in landed value. Last year's landed value might have been $300 million or $400 million, so it is a big chunk of what we had in actual landed value. That is an estimate; it might be worse than that.
I suppose the simplest thing is putting the price up to underwrite or subsidize the price. Statements have already been made about problems with trade agreements and stuff like that, although it seems to me that the rule book has kind of been tossed out in the last eight or nine months in the world. Governments all over the world have put phenomenal amounts of money into shoring up private industries in various ways that, normally, you would not get to first base with; they just would not even be entertained. The first and foremost is the financial services sector.
Therefore, I am not sure that the old rule book is really all that applicable now. Certainly, that would be one way.
We suggested EI as one idea because the funds are there and the expectation all along has been that the money would be spent anyway, with the exception of the additional five weeks. The pilot project provision of the act makes it readily accessible for quick fixes or solutions in a hurry to urgent problems. It seemed to make sense as one vehicle that could be used to address this problem. I agree fully with your remarks about the cod and the Portuguese shellfish market that have totally collapsed. We cannot give our stock away. As many negative factors as you can possibly imagine are coming to bear in one year, and it is pretty grim. When people get desperate, who knows what will happen?
Senator Manning: Under rationalization, I will ask a question about Newfoundland and Labrador again. Can you give us the figures we will be looking at if that 70 per cent ever came into play? What would be the financial request from the federal government?
Mr. McCurdy: It is probably in the paper but I cannot remember exactly.
Senator Cook: It is on page 19.
Senator Manning: I want the figures on the record.
Senator Cook: If I am reading the right one, it is page 19.
Mr. McCurdy: In this paper, we are proposing voluntary removal over time and funding for a cost-shared program of removal to eliminate one-third of the licences over a relatively short period of time. The estimated cost for our province of Newfoundland and Labrador is $169 million.
Senator Manning: Is that the total estimated cost?
Mr. McCurdy: Yes. I suppose you do what you have the resources to do at the moment, and we have nothing to work with — absolutely zero. Therefore, we are doing nothing in terms of rationalization. In the long run, it would be a good investment, apart from everything else over time it would lessen substantially the take-up on the EI fund.
Senator Manning: For the record, when you talk about three levels — industry, federal government and provincial government — what would the role of industry be?
Mr. McCurdy: At the moment, rationalization is taking place in some fisheries, although not lobster or crab, but the shrimp fishery is 100-per-cent industry funded. It is creating an excessive debt load on whoever is buying that quota, in relation to the value of it. Some people are already regretting having done so.
Senator Manning: On fuel prices this year, after talking to fishermen on the wharf last Sunday, I know they are happy in one sense that it is not where it was last year due to everything else that is happening now. However, are there any efforts being put forward with regard to addressing the concern of fuel prices and fishermen?
Mr. McCurdy: Certainly, that issue was high on our shopping list over the last couple of years, in particular in 2008 when the prices were completely haywire. We did not have much luck, even though we tried group buying and other suggestions. They have the province divided up among them and the price is basically the price. We have had some projects in terms of how we can lessen fuel consumption. There are little things you can do to reduce consumption to a point, but you still have to burn fuel. You might be able to save in the order of 20 per cent or so with certain technological innovations.
Senator Manning: You have to pay up front for some of those.
Mr. McCurdy: Yes. It is the same old problem.
The Deputy Chair: What about the $10 million that was allocated last Friday by the federal government? I know that it is for promotion and marketing of lobster. When will the money be available? Do you know how it will be used and how it will benefit the lobster fishermen?
Mr. Frenette: We are not aware yet of how it will be used. We understand that the use of that development fund will come from and be administered by a newly created body known as the Atlantic lobster development council. It recently had its inaugural meeting one week ago. It is my understanding that it is the body the minister and the provincial governments would like to have oversee the application of the $10-million fund over time. Everything is so new at this time that we do not have any specific answers.
Senator Robichaud: What are the chances that the $10 million will help those who are in crisis?
Mr. Frenette: We all agree, senator, that the answer is nil.
Senator Robichaud: Is this a long-term effort?
Mr. Frenette: Yes.
Senator Robichaud: We were talking about bait. I asked Ms. Wallace what the price of bait was and she answered — from 40 cents to $1 per pound. The price of bait has not followed the price of lobster, has it?
Ms. Wallace: No, definitely not. It is so scarce that some fishermen are having a hard time finding bait. They are not able to get their preferred choice but they still have an extremely high bait bill. One fishermen showed me three days of slips for his bait purchases that totalled $800 and change.
Senator Robichaud: The fishermen at home tell me that it is quite expensive to have the right bait and it is hard to find.
[Translation]
Right now, in Northeastern New Brunswick, the lobster season is in full swing. I heard on the radio that there was some kind of a demonstration because of the simple fact that the fishers realized that they were not covering their costs. We know that in order to qualify for employment insurance, fishers must land their catches. Their eligibility in fact is dependent upon the value of what they land.
Mr. Brun: That is correct.
Senator Robichaud: In Northeastern New Brunswick are there any fishers who would not be able to qualify given that the prices are so low?
Mr. Brun: The minimum requirement will not be met in certain areas. You are right. The calculation of the level required to qualify for employment insurance is based not only on the landings, but also on the price. It is the gross income one earns during the season that determines one's eligibility for a certain level of employment insurance. Some people will be eligible for the minimum amount, but others will not even be eligible for the same level of employment insurance as last year.
For your information, even if the fishers of Northeastern New Brunswick managed to be eligible for employment insurance, these monies will most probably be immediately used up to compensate for the tremendous losses they have taken during the season, and they will not cover all of their losses. What are they going to do to make up for this loss and continue to live during the rest of the year: that is a question we have not yet been able to answer. The income of these people over the last three or four years — and these are the numbers of the Department of Fisheries and Oceans — has been extremely low.
On average, on the East Coast of New Brunswick, we are talking about 10,000 $ before you are really in crisis mode. We therefore imagine that this is being experienced right now, because the prices have dropped markedly since the beginning of the season.
Senator Robichaud: The fishers in my region, who fish in the Northumberland Strait, have reason to be worried, if the inventory remains high and the prices remain at their present level, am I right?
Mr. Brun: They have reason to be worried about their very near future, this coming fall. People are already fearing an even worse drop than the one we are seeing now. This would not allow for fishing; it would be a ridiculous amount of money; it would mean losses that are impossible to imagine. These people would not necessarily have any other options.
You mentioned that people have taken to the street; this was in fact the second demonstration, two weeks ago, following on the heels of the demonstration in Newfoundland. They wished, firstly, to give their support to the fishers of Newfoundland. It is important to show solidarity with your colleagues, and, because they are panicking, they wanted to at least voice their frustrations to the public and the government in an organized manner. I think there were 500 fishers today in the Tracadie region, in other words close to half our membership in New Brunswick were present today.
[English]
The Deputy Chair: How does the lobster situation in Canada compare with that in the United States, like Maine, for instance? That is a big fishing state as well.
Mr. McCurdy: They are struggling with a lot of the same things we are, such as depressed prices, and I believe their circumstances are quite similar.
The Deputy Chair: Do they not have a solution either?
Mr. McCurdy: No. Essentially their prices are way below where they were and they are scrambling for survival the same as our people are.
Mr. Brun: Some fleets in New England and elsewhere are actually suggesting some of the same solutions we have been since the beginning of this meeting. I would venture to say that the reactions we have been reading about from governments in the United States included a stimulus package for the short term and long term in some of the areas.
The Deputy Chair: Has anything been already announced?
Mr. Brun: There has been.
Mr. McCurdy: In a couple of the New England states, I do not remember all of the particulars, but there has been significant fisheries restructuring money in New Hampshire.
Mr. Brun: There is a New England rationalization program that is to be implemented shortly, and they are talking about short-term options right now similar to being able to create some form of subsidy for fish harvesters to get through the year.
Mr. McCurdy: The rhetoric is we have to be able to compete. That is what these people tell you these days. Virtually every country that we are supposed to be competing with in the world fisheries markets has put significant amounts of money into fleet rationalization. The Government of Canada talked about self-rationalization, meaning industry take the bill, put it in your pocket and figure out a way to pay for it. That means right off the top we are behind the eight ball in terms of trying to compete with countries like Norway, Iceland, the European Union, various states in the United States and so on, where they said we recognize this problem, which is universal, with the combination of the technology to catch fish and the condition of fish stocks and so on, we have oversubscription of these fleets. There are more people fishing than the resource can provide a decent return for and they say, we have to fix this and the public sector has a role to play in addressing it, except in Canada. We are told to go out and compete with them anyway.
It reminds me of the guy in the movie who was a baseball pitcher with the bases loaded, and he was told to throw only strikes but give them nothing to hit. Go out and compete but, by the way, you have both hands tied behind your back when you are trying to do so.
Senator Raine: I am from British Columbia so I am unfamiliar with the subject and I am finding this fascinating and heart-wrenching, too, because I can see it is a serious problem for so many families.
I am a little confused. Mr. Poirier said there were 25,000 fishers on board and another 25,000 on shore. The other number I am seeing is 10,000. In regard to the 25,000, does he mean the 10,000 plus one-and-a-half helpers per licence holder to get to the 25,000 number?
Mr. Brun: That would be 10,000 fish harvester captains, owner-operators, I would say, and then usually an average of two helpers. That would approximately give you 25,000 to 30,000.
Senator Raine: If we are looking at rationalization, do we know what shrinkage makes sense, what per cent of those boats? I realize it varies from area to area, and it seems to me that some of the licence areas are perhaps too small for the number of people fishing them. Has the optimum number that we should be looking at been defined?
Mr. McCurdy: I think ourselves, the MFU, Ms. Wallace's group, and some others who sat down and went through this feel that you would not force the issue, but you could set a realistic target in a well-designed voluntary plan to reduce the fleet by roughly one-third in perhaps five years or some time frame like that — if you had a real strategy to try and set this up right for the next generation. It would be something in that order of magnitude. The survey we did with our members was consistent with that, in terms of people who would be interested and would want to see the details. That was done several years ago when the economics were certainly better than they are today.
Senator Raine: It is distressing when DFO is proposing a solution that does not work for area licencing and only works for quota licencing.
Mr. McCurdy: It is not a solution at all for that problem and it is discouraging.
Senator Raine: I can see that. I am sure interested in trying to find a rationalization that would work for everyone.
I have another question. Again, I am naive here, but this would be for Ms. Wallace. You talk about the seals having an impact on the lack of bait. There are many people from the west coast of Newfoundland who are looking at proposing a seal cull. We are not talking baby seals here; we are talking about culling the mothers. Would that help?
Ms. Wallace: It would definitely be a step in the right direction. The activists out there making strong statements against the sealing industry are having a major effect on the fishing industry in all of Atlantic Canada. They are using outdated propaganda and, unfortunately, the general public is listening. I do suspect that it is having an impact on the markets as well. Yes, a cull would definitely be the answer, although we are not supposed to be using that word.
Senator Raine: Why is that?
Ms. Wallace: The public does not like the word ``cull.''
Senator Raine: Regardless, it is out of whack right now and it does not make sense to not do something like this.
Ms. Wallace: No, in fact the scientists are now stating that at least the seals are eating the cod and they are having an effect. That was something we had to work many years to get them to state. There are a high number of seals and, if we took out hundreds of thousands of them, we would not see the reduction in that for five years. It is staggering.
Senator Raine: We need to have some photographs in our media that show the masses of seals that have overpopulated.
Ms. Wallace: Yes, I agree with you, education is one of the tools we have to use. I am part of a committee. One of the strong recommendations that come from industry is that we have to educate the people. It did not help when the EU proposed that ban on sealing products. It is hurting the fishing industry.
I know we are here speaking directly about the lobster, but all species are being hit as far as price is concerned. The snow crab is down this year and so is cod, as Mr. McCurdy stated. It is discouraging to the fishermen.
Mr. Frenette: Particularly in the southern Gulf of St. Lawrence and Scotia-Fundy region, it is the grey seal population that is doing the most devastation to fish stocks. That population has increased sevenfold since the 1970s. It is now estimated to be somewhere between 350,000 to 400,000 animals. An adult grey seal will eat well in excess of a tonne of fish in the run of a year. You can do the calculation from there to see what is happening to the resource.
Their major rookery is Sable Island, which is an environmentally protected area, with no access to it. I believe this year the estimate would be that there would be something like 52,000 seal pups born there alone. The effects on all species in those areas by the grey seal population are really pronounced. It is a very destructive force and, in the terms of a cull and a commercial hunt combined, I think is appropriate.
It is so difficult to do, though, because the pups are born in the winter. A lot of our inshore ports are iced in; people cannot get out to harvest the pups. In terms of harvesting the larger seals, you can shoot them but one shot and they disappear, so it is a difficult process. There have been discussions about sterilizing females but there are a lot of technical and other issues to be worked out with that. Who wants to get close in the first place?
Senator Raine: If you do not mind, what were the seal's natural predators?
Mr. Frenette: Whales and sharks.
Senator Raine: Therefore, the loss of the whales and sharks have created this imbalance; is that right?
An Hon. Senator: And polar bears.
Mr. McCurdy: There are some things that really aggravate me and others. Mr. Frenette mentioned the EU ban. I have been to countless meetings where I have heard representatives of the EU talk about the need to have an ecosystem approach to fisheries management. Which one is it?
When we look at the seals, do we say we look at that in the context of herring stocks, cod stocks, et cetera, and how it all fits in, or will we ride around on our high horse and say we do not care about the ecosystem, that we will pass judgment on people living off the resources of the sea?
It is extremely annoying when you hear that coming from the European Union. I would be inclined to say to them, ``Let he who is without sin amongst us, cast the first stone.''
The Deputy Chair: Back in the 1980s and 1990s, Senator Marshall, who was chair of the fisheries committee then, really had an issue about the seals and how much they were taking from the cod. I think Senator Marshall mentioned it was more than 1 million tonnes that they were taking at that time. That was in the 1980s. Now, they have grown more and more, so you can imagine what things are like.
I sincerely thank you for coming today. Many of us around here are from Eastern Canada and, of course, we go home every weekend and we hear about the problems you have talked about: The seriousness of the lobster fishery and the state that the economy is in back there because of the fishing industry. Therefore, we know the situation firsthand.
We were pleased to have you here today to enlighten us a bit more, and I want to thank you for coming. I want to remind the committee that we are hearing from Mr. Sullivan on the seals on Thursday.
(The committee adjourned.)