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POFO - Standing Committee

Fisheries and Oceans


Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 9 - Evidence - May 27, 2014 - Afternoon sitting

GANDER, Newfoundland and Labrador, Tuesday, May 27, 2014

The Standing Senate Committee on Fisheries and Oceans met this day, at 1:15 p.m., to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada.

Senator Fabian Manning (Chair) in the chair.

The Chair: Good afternoon. I'm pleased to welcome you to this meeting of the Standing Senate Committee on Fisheries and Oceans. My name is Fabian Manning, I'm a senator for Newfoundland and Labrador, and I'm the chair of this committee. Before I give the floor to our witnesses, I would like to invite the members of the committee to introduce themselves.

Senator Munson: Jim Munson from Ontario.

Senator Lovelace Nicholas: Senator Lovelace Nicholas from New Brunswick.

Senator Poirier: Senator Rose-May Poirier from New Brunswick.

Senator McInnis: Senator Tom McInnis from Nova Scotia.

Senator Raine: Nancy Greene Raine from B.C.

Senator Wells: Senator David Wells from Newfoundland and Labrador.

The Chair: The committee is continuing its special study on the regulation of aquaculture, its current challenges and future prospects for the industry in Canada

I'm pleased this afternoon to welcome Ms. Miranda Pryor, Executive Director, Newfoundland Aquaculture Industry Association; Dr. Laura Halfyard, General Manager of Sunrise Fish Farms; and Rebecca White, Project Manager of Badger Bay Mussel Farms Ltd.

On behalf of the members of our committee, I would like to thank you for taking the time this afternoon to join us. I believe we'll begin with a statement from Ms. Pryor, followed by statements from Dr. Halfyard and Ms. White. Then senators will, I'm sure, have questions for you.

The floor is yours, Ms. Pryor.

Miranda Pryor, Executive Director, Newfoundland Aquaculture Industry Association: Thank you again for the opportunity to address the committee this afternoon. I will be keeping my comments short in the interest of time because I know we're trying to make up some time and also to give an opportunity to my colleagues here as well. You've heard from me a couple of times now over the last day or so, so you may be getting enough.

Essentially I put the same graph in there and I actually ran over at lunch time to try to make it bigger just to highlight the production levels in Newfoundland. From a mussel's perspective, mussels on that graph that you see there will be the smaller of the two. You will notice there was in 2009 and 2010, during the recession in particular, we did experience some decreases in production. However from 2010 and up to particularly 2013, our greatest year to date, the mussel production in the province has certainly increased. We're hoping that trend will continue. In 2013, we produced close to 5,000 metric tons of mussels.

From a value perspective I kept the same graph in there that just shows the overall production value for aquaculture products last year was $197 million. This is based on the provincial numbers of direct product sales. Of that, we estimate about $15 million or so were directly related to shellfish production. Similar to finfish we are the second largest producer of shellfish products in Canada now, second to the Province of Prince Edward Island.

Again with some of the critical infrastructure needs that have been discussed and some more that we will discuss today, our realistic goal for growth could be up to 7,500 metric tons by the year 2020. I wanted to put this first because this is a significant achievement for our industry, for Canada as a whole but certainly for the Newfoundland industry. All NAIA members right now have achieved certification to the National Organic Aquaculture Standard. We were the first in North America to actually achieve the standard last year. That was the first year and they've all recently been recertified and re-audited, and all farms did receive the certification again. Also the first BAP, best aquaculture practices, mussels processing plant in the world was recognized this past winter, Norlantic Processors, which for those of you who are going on the tour will get an opportunity to visit tomorrow.

Those are significant achievements for the industry and demonstrate the commitment that our shellfish producers have to acquiring the certification that they need to maintain but also to gain market share.

Some key infrastructure needs: Some of these obviously are industry-wide such as roads, wharves, broadband and cellular coverage. It's the same no matter what industry you're in but certainly for our shellfish producers they're no different.

Challenges with the Marine Atlantic ferry system have also been mentioned but in particular from our mussel industry we produce 52 weeks a year at least two truckloads of fresh mussels, with Prince Edward Island being our main competitor in the marketplace. Any time our product has to sit on the dock in Port aux Basques, we run the risk of losing that market altogether but certainly the shelf life of the product is diminished.

I did want to make one comment on this just because we haven't mentioned it to date regarding Marine Atlantic. The association, we've done a lot of work with other stakeholders as well. While we obviously are advocating for priority status given to fresh seafood products, because that's obviously what we represent, we do work with the other sectors such as the agriculture sector and others such as dairy producers and poultry producers that are shipping out of the province. We do work with them. We're advocating for fresh product that's going out of the province. That would be priority given to all of us of equal status.

Waste management is similar to our mussel producers. With the province now moving to larger waste management facilities, we're not quite sure where that's going to leave us and leave some of our producers, and where our processing plants are located throughout the province, problems are arising trying to find solutions for the organic waste. With the mussel shells that are coming out of our processing plants and facilities, those types of things, what are we going to do, and the expensive tipping fees that are being required now for landfill as well. Those are certainly considerations that we're working on.

Improved winter harvesting capabilities: This past winter has been an extreme on many fronts, but certainly as Laura will no doubt attest to trying to harvest mussels through the ice that we experienced and through the winter conditions that we experienced became impossible. We had several weeks, if not months, where we were actually without supply to our market, which was something that was very difficult to deal with. We worked very hard to secure our markets. Certainly we're hoping we never experience a winter like we've just experienced but we're looking at improving the winter harvesting capabilities.

Along with that goes an increased need for live holding facilities. You'll see some tomorrow for those that do visit the Norlantic processing plant. We do have the capability of holding some mussels right now. We harvest them and we hold them in our processing facility in our live holding tanks for a certain period of time, but we've been advocating for some time now that we need to increase that. That would allow us continued supply into the marketplace if we ever ran into such extremes as we did this winter.

Research and development are always ongoing needs for any sector, particularly aquaculture and human resource needs. As we've mentioned earlier today, the shellfish sector is operating in rural areas as well and its challenges are similar.

From a regulatory requirement renewal perspective, similarly the federal Aquaculture Act that we've been discussing is of importance to our shellfish producers. There's no difference from a licensing perspective with the delays and frustrations that we've been experiencing with Transport Canada. They're equal from a shellfish and a finfish perspective. However from a site marking perspective there's extreme amount of marking requirements for shellfish farm.

Actually in this province during the wintertime a lot of the mussel farms themselves are lowered under the ice or frozen into the ice. We have some concerns as well with Transport Canada regarding the marking requirements that are required during the winter in particular that we feel actually poses more of a safety hazard than it actually does help.

The Canadian Food Inspection Agency: In a different capacity with our shellfish producers but due to further federal cutbacks in Newfoundland there's no longer any testing of shellfish now done in the province for such things as paralytic shellfish poisoning, PSP, diarrhetic shellfish poisoning, DSP and others. We lost that capability, I think, in the last year or so, so all of that right now is sent to Dartmouth, I believe, for sampling and then we have to wait on results.

Every time we harvest shipments have to be air flown out of the province for testing and obviously if we have any local markets that we supply we run the risk, from a human health perspective, of not having the sampling back and potentially something being in those samples while we wait on the results.

Environment Canada: As part of the CSSP, the Canadian Shellfish Sanitation Program that is jointly administered by DFO, CFIA, and Environment Canada, all shellfish farms are required to have regular water sampling performed on their sites for such things as fecal coliforms, et cetera, again from a human health perspective.

Limited resources in Newfoundland have meant that only certain areas at a time, which means per year, could be sampled. This has hindered expansion in the past and there currently exists no resources to examine new sites. Without companies bearing the cost of expensive sampling themselves—and even then there is no guarantee that the sampling will be completed—from an expansion perspective this has been considerably limiting.

I'll just finish on my final two slides and hand it over to Dr. Halfyard who will expand, but as with the finfish we are committed as an industry to producing a safe first and foremost, nutritious, healthy seafood for the local and for our global consumers. We equally believe in the shellfish as we do the finfish and for the opportunities they present and in what they can do for the province and for all of Canada.

Thank you.

The Chair: Go ahead, Dr. Halfyard.

Dr. Laura Halfyard, General Manager, Sunrise Fish Farms Inc.: My name is Laura Halfyard. I'm the General Manager of Sunrise Fish Farms but also we're in the development phase for a farm on the south coast, Connaigre Fish Farms and I'm also one of the shellfish reps with the NAIA Board.

From the point of view of the industry and where it is, the most frustrating thing that crosses my desk every day is the duplication of services. I have to fill out a piece of paper for one agency, another piece of paper for another agency and another piece of paper that says the same thing but in slightly different font. It's done in a different way but you get duplication of services.

Right now we're going through an issue with the province of site bonding requirements which is not required in any other fishery sector or agriculture sector. It's something coming under DFA but it's already covered under Crown lands under the province and it's already covered under remediation regulations under Transport Canada and its federal requirements for site licensing.

I've highlighted these things in my brief. I got feedback from other growers as well in some of the things in the brief that I've given you.

We express frustrations at the Fisheries Act. I attended a session last spring and it was to bring in new things and under Transport Canada changes. I go online recently and I see the same thing there again, still stuck with a five-year lease, marking requirements and things like that. There is duplication between DFA, Crown lands, Marine Water Protection and federally what's required under Transport Canada and DFO. We don't have enough people to do all these things so we need to remove some of the duplication to be more efficient in the people that we do have federally and provincially.

There are great frustrations with Transport Canada. Again after attending sessions I can tell you how many times I've sat down with our files. First of all where are my files? They might be in Moncton. They might be in Dartmouth. They could be with an officer at the time that was in Corner Brook. That has been eliminated. Now we move on and you've got someone that might call you from St. John's but usually now the files are halfway between Dartmouth and Moncton. When you ask a question about your file first of all it's simply locating it. Then it goes back through a series of people, the same messages over and over again, until you finally get a face and maybe a name, and they may call you back on an issue. It gets very frustrating with the time and the management of your files and the wasting of resource time.

Like I say, we have a five-year lease. I thought when I went into the new MPA Act that I would see something refreshing. No, all I see is the same thing again saying it will be a five-year lease versus 10, 15 or 20, which you see in the table on the website is there for all other business sectors or industry sectors but not for aquaculture.

Managing: When you've got to be renewing all these documents, when you have numerous sites and you have to be monitoring because the province licences Crown lands and none of them occur on the same date, you've got all of this to try to track.

Closures of offices in Atlantic Canada: More and more it's drifting toward the centre of Canada and that becomes again a disconnect for us who are addressing issues here in the province.

Right now Environment Canada is gearing up to be out on our sites, to be monitoring as part of CSSP program. We're organically certified. That means that we have to have very stringent guidelines for our monitoring. The quality of our water for fecal coliform, anything that we do in that environment from wildlife under organic certification means that you have to be monitoring it. Then you have a little team of people that moves a trailer to the middle of Grand Falls and runs out to try to get to our sites all over this island. You know in the last few days the travel logistics. It's not like P.E.I where you can be half an hour to any coastline. These are the logistics.

As they shrink that office it gets more and more, "Okay, if you need extra sampling now you're going to have to pay". I just forked out $1,500 for extra sampling a while ago. That wasn't including his gracious time to come out and try to get the samples for me. Then I had to send them to a lab and there was the timing of that in relation to your harvesting and processing and how it gets to the marketplace. There's a lot of logistics and when you shrink it down to a few people in Environment Canada it gets very frustrating. They're trying their best to help us but somewhere along the way their services have to be helped, especially if we're trying to grow this sector.

Tied to that is CFIA. One inspects the water. One inspects the meats. Now all of a sudden in CFIA everything is shrunk over to Halifax and you have one day a week to get those samples. If you don't hit that day then it affects the logistics of your product to the market. I'm the grower. I'm producing it to a plant but they have all the other additional logistics and it starts with the inspections of our product.

I do highlight some others in the brief there. Organic certification, first in North America, what does that mean? We're two years into the cycle. It cost us money to do this, and what are the market benefits? We're still in that growing phase. Will it be there in five years' time? I don't know, but whether it's organic or generic mussels you still have to have really stringent inspections of your farm sites for water quality. Shellfish are like vacuum cleaners. They take up whatever is in the water. It's not the same as a finfish species. You do have to really pay attention to the environment. On the other hand, they take up a lot of the good nutrients as well that are naturally in the environment. We're really proud. That was a big step making this move for an organic product and to say yes, we have a unique and a real high grand quality.

We do have concerns with aquatic invasive species. It's drifting toward us. Invasive species coming in on our south coast have gradually moved up from the U.S. coastline. There's more and more monitoring under DFO and NAIA is linked to the committee for that, but we do have to keep paying attention to it on farms. It'll hit our farms first. It seems to be wild fisheries. They can move a boat around wherever they like. There are no requirements on cleaning a boat. If a fisherman wants to buy a boat in P.E.I. or Nova Scotia, they move it on over here. There is nothing required of what needs to be cleaning of that boat or anything.

As you saw from visiting farms yesterday the pattern of visiting sites is very controlled, but we can't control what happens on the other side of recreational and wild fishing vessels.

Species diversification: I'm sure Rebecca will talk a little on that. Over the years I think we've zeroed in on a few key species because of money. If your province is focusing on a success story, and that's where it logically should, in the future it has to diversity to a few other species to reduce your risks of only one species.

The Atlantic ferry service continues to be a nightmare for us. I'm the grower. I ship it to the plant and then I get a call saying the ferry is down, not running. We have 24 hours. We actually have had at times to harvest in the night time to fit within a 24-hour period of when it comes out of the water to when it must be in Boston. That means my workers get out there on a stormy day, minus 20 degrees, with full gear on, out there in the night time with lights harvesting to get it to the plant to be processed in so many hours and then on that truck. Then all of a sudden it stops in Port aux Basques because No. 1 the ferry doesn't fit the wharf that's there and No. 2 what's the whim of the captain and the crew? Have they filled their ballast tanks already and they say, "No, we're not taking any more trucks"? The biggest frustration because you have fresh product is that you have to pay an extra fee to guarantee it, if they guarantee it. These are frustrating things that keep adding to us.

The mussel industry is border line. It's not big money. It's not a huge margin of profit out there and these bills eventually come back to us, the grower. We are 52 weeks of the year. There's no skipping of a week. Therefore, twice a week or three times a week there has to be product on that ferry. I thought the ferry was part of the trans-Canada system. Some days I wonder.

Roads and wharves and other infrastructure: Miranda has highlighted these things. We can't, as an industry, be building wharves and roads that are only ours. The wild fishery has a history of having that support provided, but all of a sudden as the aquaculture industry, the new kid on the block, we're expected to incur these things. We do to an extent have to control it for biosecurity between sites and avoiding AIS, aquatic invasive species, movement.

Under organic farming we do have to limit on who and what is happening on these wharves. We can't have people in gutting fish from a wild fishery on a wharf that's organically certified. You do have to have some dedicated infrastructure.

I was talking to Brian Meaney yesterday. He just finished a conversation with a finfish farmer who said exactly my words: "We just came through what we call the winter from hell". Never in two decades have we had to close our farm down on the northeast coast. We can break ice, keep that site open and harvest mussels, but there's just nowhere to push it. We're developing a new site on the south coast which should logically be ice free but we weren't prepared. The new landing wasn't ready. That's only one answer.

There are other areas where we need more wet holding so you can build up a reserve of so many days. That's in P.E.I. It's part of safety checks in the industry.

Yes, we have to diversity from just primary product to secondary, and hopefully some of the new federal funding coming down the pipeline will help with this. New Zealand developed its green mussels industry based on a distance criterion. Newfoundland is not that different so we're going to have to go to some more value added.

We've been to China markets and European shows. Those products coming on the market are more what some sectors of consumers want. However under organic certification you're still trying to keep this fresh product labelling, so you can't go to all of that value added or it might mean we'd have to go to something slightly different in what we call value added.

Miranda has highlighted some other things such as communications and labour needs. Those are coming down the pipeline. We're struggling at times on the south coast getting workers because we're competing against salmon growers. The northeast coast is where most of the mussel farms are. It's still pretty good, but you look at the average age. You're getting 40 and up and then your plants even more, so it will be a future issue.

In summary, for Canada, like I say, P.E.I. is maxed out. Where is the next area for mussel farming for the big push? It is Newfoundland. We have the water, the rural development and the appetite for the industry. We have a history of it, and I think it could have huge potential and certainly add to the Canadian economy.

Thank you.

The Chair: Thank you, Dr. Halfyard.

Rebecca White, Project Manager, Badger Bay Mussel Farms Ltd.: Good afternoon, ladies and gentlemen. Thank you for taking the time to meet with us today. It is much appreciated.

My name is Rebecca White and I'm Project Manager with Badger Bay Mussel Farms and I do two projects with Juan. We're doing the organic certification, a lot of the legislation with mussels, but we're also doing a lot of research and development with American oysters as well.

On the mussel side of it, Miranda and Laura have touched on many of the points that I'm sure everybody wants to talk about. We've been experiencing the same delays with the Marine Atlantic ferry and having to pay for priority booking, which also adds additional transportation costs. Of course this is supposed to be a part of the highway but it doesn't seem to be like that at times.

The lack of modern ice harvesting equipment to handle continuous stocking along with our small live holding capacity has caused a loss of sales during these past few months. New equipment will allow winter harvesting to occur if needed but also more live holding is needed as well so that we always have some products in storage when we need them when it's too harsh to ice harvest.

As well we are seeing delays with Environment Canada. We're trying to get new sites started but even to get on the list to start testing with Environment Canada can take up to a year or two. Then they need to take three years' worth of data. If you want to start a site sometimes you're looking at five years out before you even get to put some product in the water to test. These can cause many delays. That's a full production cycle gone that you could have had product in the water. I know that everybody needs regulations. It's just that if we can get on the list quicker three years would be better than five even.

Also with the mussels we're looking at value-added products. We're selling a lot of frozen product now that's cooked frozen and that opens up some markets in other parts of the United States and Asia. We're currently selling a lot of fresh product in the United States and of course throughout Canada. The additional live holding will add the ability to be able to do all these markets because if the mussels are there as well they can just produce a frozen product as well.

With the site bonds it's an issue. We're wondering why that's happening now pretty much. It's not like we've had a lot of occurrences of farms going astray and we're just wondering why are we are being affected by this and no other industries like the wild fishery. That's pretty much for the mussel side of it.

All my other points pretty much have been covered by Miranda and Laura. I just want to talk a little bit about the oysters. Over the past four or five years we have been growing, starting on the research and development side with oysters but as you know oyster is not on the list for a species of Newfoundland. The main species is fish and the only shellfish being mussels. Even though it's new to us it's actually developing quite well and we'd like to get more consideration and more knowledge out there about this species that we're trying to create.

Over the next few years we're hoping to bring it to commercial scale. It's really difficult at times to get funding, to get recognition, to get permitting or just things like that throughout government because you're not looked at as top priority when there are millions of salmon that need to be transferred and other species like that. We're just finding that even to apply for a developmental licence for a nursery site it took almost two years to get just the application. They first told me two weeks. It turned out to be two years to get actually a developmental stage licence. That becomes an issue when you're trying to get ahead but it's taking two years to even just get a site so you can test. It's just putting you behind and taking much more years to develop than it should be.

Oysters are showing great potential in Newfoundland. We have sites in Placentia Bay. Oysters are being transferred from New Brunswick and we've had much success here. We didn't think so in the past where the water temperatures were colder but the water is warming up around the province in the summertime. Even though you wouldn't say it with the harsh winter we've had this winter, the oysters are able to survive here. It's giving us great hope that there will be another species for the shellfish sector.

I guess that's about it. I don't know if you have any questions.

The Chair: Thank you very much for your presentations and we're going to go right to our questions with Senator Poirier.

Senator Poirier: Thank you.

I have a couple of questions and it could be actually any one of you that answers because I think pretty well everybody talked about it a little bit. It had to do with your certification for the Canadian Organic Aquaculture Standards. Can you explain to me what requirements must a producer or processor achieve in order to get the licence and to actually retain it once they have it?

Dr. Halfyard: Rebecca and I can speak to that because we've worked on it pretty closely. It requires monitoring of everything on the farm site, right from the environment, the water, the habitat and the wildlife around it. You have to have records going back how many years you've been on the farm site. You have to have it reflective of a history, as well as going forward with what your plans are and what your production level is from that site.

It's documenting, full documenting of everything that goes on at that farm site. Like I say, it includes even to the point of replacing starfish to the water naturally as we're processing mussels off a line for seed. It's all these natural criteria and it's the keeping of those records. Every year we go through re-inspection and recertifying that process. It's not that a regular mussel wouldn't be organic. It's that you're guaranteeing traceability and for the consumer to have confidence in the product.

Senator Poirier: Do the certified products enjoy higher market benefit price-wise premiums?

Dr. Halfyard: I'd say we're in the early stages. We're trying to develop that. Right now for the particular processors we're selling to there's test product going into the market right now. The consumer doesn't know it. It was a new label developed this year so it's almost like you got to educate consumers and then hope they're willing to pay a little more premium. Right now there's a modest edge above the regular mussel but it's not enough because it's a huge expense to us to do all this. The margin has to grow. You want between a 20 and 30 per cent margin above a regular product.

Senator Poirier: Who's buying your product? Is it the same person that would be buying the non-organic product?

Dr. Halfyard: I'm not a processor but looking at in the marketplace for organic product you get a certain kinds of consumers who walk in a grocery store and go to the organic section because they know what it says about that product, or you assume because of organic labelling they're looking for something that says everything about it. We're actually doing a project now linked to several companies through NAIA which actually will be electronic tags that we can scan it and it'll go into the computer right as it's coming out of the water. We'll be able to virtually link it to the processor, track the truck down to wherever it is in Boston, and the consumer should be able to tell exactly where that product came from.

Senator Poirier: Is there a lot of competition out there for organic fish farms?

Dr. Halfyard: We're the first in North America for mussel farming. In Europe there's a little bit in Ireland, so it's still newer on the market.

Ms. White: We're starting to get some interest from a lot of restaurants and places that just sell organic products and things like that. They want it to cook in their soups or chowders and products like that that they want to sell on their shelf. They want to have organic products.

Senator Lovelace Nicholas: Welcome.

Miranda, you mentioned something about improving winter harvesting. How could you do that if there is lots of ice?

Ms. Pryor: There were some techniques developed years ago that we used for developing through the ice. Prince Edward Island actually does regularly harvest through the ice. Ice has been something that we've been able to break through. By using harvest vessels we've been able to break through to get to it. You need obviously a certain amount of ice that's going to be safe enough to put your personnel and your equipment out on it. You would have to cut through holes in the ice to harvest the mussels through.

We use a long continuous socking technique now in Newfoundland. It's a bit hard to get into the details of all that but that makes it a bit more challenging to pull your line literally through the ice to harvest your mussels off of.

I can tell you there was a meeting last Tuesday where we brought industry participants together with an NRC, National Research Council representatives, as well as the province. We're going to be looking at maybe engaging some engineers this year to look at some new techniques and technologies. If we ever have to experience this winter again — and even if we don't we know we'll get ice — we are looking at a way to improve the technologies that we have. That's a project we're hoping to do and it'll be something then that all industry will be able to avail of.

Senator Lovelace Nicholas: You would need federal funding for this. Is that what you're saying?

Ms. Pryor: We've done a fair amount of work in the past with the NRC reps and they have a good working relationship with the Marine Institute. I'm searching for the term. I can't remember the term that they have. It's almost a standing offer with them for particularly small projects. I think there is a new engineer currently coming on staff with the Marine Institute so there would be funding. There's always funding available for new technology development, yes.

Dr. Halfyard: In the past I know we did some work on ice boom innovation through the DFO AIMAP Project, which was more geared to innovative technology on mussel farms, but that money seemed to have ended and/or the focus of it is not the same. It's directed to more pure research rather than applied. I think DFO and these other groups within federal support do need to continue to support innovation because ice conditions in P.E.I. and how they harvest is not necessarily what's going to work here. You have to always keep those new innovative methods and we're definitely going to have to look at that for winter harvesting here.

Senator Lovelace Nicholas: What makes the product organic? Is it because it's farmed?

Dr. Halfyard: Organic means that you can track anything that is done to that product and that you can certify what is going on in that environment. You're saying you know what the water quality is. You know the meat products. You know what's going on in the habitat so you're documenting. You can go out and catch a codfish or catch other species from the wild fishery, but you're not guaranteeing what's going on with that environment whereas in organic farming you are. You are saying that you can trace what is going on with that product and the environment it lives in.

Ms. White: It's even down to more with the guys in the boat as well. We have our crew and we know there is no human waste going over the side of the boat. There are no chemicals going in the water. They're not using bleach. They're using more vinegar products and things like that on the vessel so that it's just not getting in the water for the mussels to uptake from the start.

Senator Lovelace Nicholas: Thank you.

Senator Wells: Thank you Ms. Pryor, Dr. Halfyard and Ms. White for appearing today and giving us your presentations.

Dr. Halfyard, we've heard over the course of this study in Ottawa and here, and I'm sure in British Columbia, about the regulations, the duplication and the paperwork that stop or inhibit entrepreneurs from doing what they want to do instead doing what governments want them to do. We've heard it a lot and I think we'll address it in our recommendations, but I did want to say no one has said it as succinctly as you did a few minutes ago. I just wanted to make that comment. I have no questions for you.

Ms. White, in the oyster sector you're involved in now what are the challenges you find with respect to operating in an industry that focuses almost solely on salmonids and mussels?

Ms. White: We find there are a lot of delays for us versus our other fields. We can get a mussel application through pretty quickly even when it can take up to months to get an oyster application. Even with transfer permits we know we're transferring interprovincially and you need health records and that kind of thing in place. We do all our health checks. It just seems like it takes an extra amount of time on top of that. Everybody seems to have it sitting on their desk just that little bit longer. In those weeks you kind of have to be after them constantly just to get some kind of answer. It even comes down to the point where I can't even get satisfaction that Juan, the president of the company, has phoned them and said, "Look, we have animals waiting and they're going to die. What are you guys doing for us?" Eventually somebody might get back to you and tell you, "Oh, we've been waiting for an answer on this" and you think "Okay, why didn't you guys contact me?" We have been encountering little problems like that with different officials and just trying to get permits through.

We are also aware it's a new species in Newfoundland. We don't want to transfer in a disease or anything like that. We've created a targeted surveillance plan with DFO and our partners in New Brunswick, the ones that we get the oysters from. Every spring and fall now we're actually going out and taking a sample of the oysters to make sure the farm that we're getting them from continues to be disease free. It's fine to say you want a hundred samples taken from these farms every year but then you get the $10,000 bill to do these samples in the spring and in the fall when you're not making any money back on this project. It starts to become like wow, okay, we're trying to start this new industry and we want to be disease free. We're not objecting. That's the reason why we're paying this money. We all want to be disease free. We don't want to transfer anything into this province, but we kind of need a little bit of help. It would be great even if we could get a little bit of help toward the surveillance plan at least. If you're making money on the project you don't mind dishing out $10,000 when you might have a million oysters going to market.

Right now on top of all other expenses when you are trying to create a hatchery and trying to get some nursery sites and some grow-out sites it becomes difficult. It just seems like the bills keep coming from different departments wanting different things and we're just trying to push through it NRC and CCFI. The National Research Council and Canadian Centre for Fisheries Innovation have been really great with us. They helped us along the way but even with them they only pay a partial amount for contributing to the project.

We think that it can work in Newfoundland and that's the reason why we've been putting a lot of financial support in it over the last few years.

Senator Wells: Thanks for that. I have a very quick follow-up.

The growing market demand as you said in the paper that was distributed and the extended shelf life are a couple of positive aspects for oysters. Are the equipment and the techniques similar to the mussel industry or is it entirely separate?

Ms. White: No, mussels are growing on ropes in continuous socking. Oysters are actually growing in baskets so they're not kept on a rope. They're kept on a basket just swinging on a line. You have to go out and maintain that basket to keep the water flowing in it. It's a bit different. They're not so bad for processing because you don't have to declump them or anything like that. You're pretty much just cleaning them, packaging them in a pretty little box and sending them off. With mussels you might be pushing seven to ten days for your shelf life. You want to get them sold. With oysters you can keep them as long as they're well refrigerated for a couple of months even.

Senator Wells: Really.

Ms. White: And they're more than fine to eat. Actually a lot of people overwintering them will take them out of the water. We've even known farmers in New Brunswick to just put them in their shed for a couple of months just because they know that there is to be a harsh winter and the oysters are fine. They can live out of the water as long as it's fridge temperature. They can live out of the water for a few months so it expands our markets for sure. It allows us to be able to ship them pretty much around the world if we can get them up to commercial scale here.

Senator Wells: Thanks very much.

Ms. White: You are welcome.

The Chair: That's very interesting.

Senator Munson: Once again thanks for being here today.

I've been wondering what keeps you going, doctor. You talked about the margins of profitability in the sector and yet you talked about duplication of services, great frustration with Transport Canada, the closing of offices in Atlantic Canada and Environment Canada. I'm just curious. What are these closures costing you as an industry? Are you saying to the governments, "Hold on just a second, perhaps you've gone a little too far; we do need these environmental assessments done faster and quicker which involves people particularly in Newfoundland and Labrador"?

Dr. Halfyard: Yes, the margins are really tight here. Plus we've got the extra shipping across the gulf which then adds a premium charge on top of that but yes, there is a huge expense of time. It takes my time tracking all these documents and then you get lease rates.

I mean from one farm site you have a DFA lease. You have a Crown lands lease. In waters protection you have a Transport Canada lease. All of these are fees. They keep going up but the service keeps going down. Every time they increase the price and the service gets slower it means that I've got to spend more time tracking these things. It becomes very difficult.

How do we keep it operating? It's partly because my father started the business and he is doggedly determined to make it a success. It dips into their retirement saving funds at times, to be quite honest, but it has seen a lot of success in the last few years, if we could just get over these hurdles.

Senator Munson: Should Newfoundland and Labrador have its own separate testing facilities?

Dr. Halfyard: They were here.

Senator Munson: Yes, they were here and then they had to go off to Halifax or some place.

Dr. Halfyard: Now it's in Halifax.

Senator Munson: You're saying that this should be reinstated here.

Dr. Halfyard: It should be, yes. It should be here and not just one day a week. Even if your product goes to Halifax, it doesn't mean that you got to hit one day to have a sample done for mussels. You can't have a little team of three people who do their best for us. I've got to say they go out of their way, the team of Dave Curtis, and I appreciate him for it but they don't have the backup. They need a greater team. We're looking at new sites and they get bogged down with their paperwork and then answer back to us. They try their best but they're only a small team. We need more for environmental services. We need more services with CFIA.

Senator Munson: So time is money.

Dr. Halfyard: Time is money.

Senator Munson: You use a very polite term about a premier booking surcharge. Some of you call it something else but I'd probably get charged if I said what some people might think of that premium booking surcharge. You also say the priority policy for live fresh product should be re-established.

When was it taken away? Was it taken away at some point? Who would have thought of that one? Who makes the money from that? I guess Marine Atlantic is separate. Who is making the money? Somebody is making some money here.

Ms. Pryor: The Marine Atlantic Corporation. We had the priority status. The commitment was always from Marine Atlantic that they were going to bring in a commercial reservation system because they wanted to get rid of seafood being able to avail of priority status. I believe the commercial reservation system came in three years ago. I could be wrong on that. Essentially I don't know if it even lasted a year because there were so many issues with it.

They said they brought in the commercial reservation system so now the priority status is gone. The reservation system failed. They took away the reservation system,but we did not get our priority status back.

Senator Munson: There are no negotiations, nothing.

Ms. White: We have tried.

Dr. Halfyard: There is a history in the sense of priority booking. Somebody could throw a crate of lobsters on the back of a truck of lumber and therefore all of a sudden it would get on the ferry faster because it is carrying some fresh product. There's always way to beat the system.

This is a genuine truckload of salmon, mussels, oysters or blueberries. It doesn't matter what the product is. It's going to spoil and it's going to affect when it gets to market compared to a lot of lumber that's not going to be damaged with another day that it might not cross over.

Now the truckers will not agree with me because they're vocal against that, the truckers' union and group are.

Senator Munson: As an Ontario senator I have a vested interest in partridge berries getting across.

Dr. Halfyard: Also the ferry has taken on the luxury customer. This ship is going to cater more to the person walking on or driving on, but in reality it's the commercial industry that's paying that ferry service. Most of its revenues are commercially driven, not people driven.

Senator McInnis: I was listening to you and other presenters this morning. You can comment on this. Is part of the problem with the approvals the lack of acceptance by the federal government of the aquaculture industry and its potential to the economy? It just strikes me that may be one of the difficulties.

Perhaps I could just ask a couple of other questions and then you can respond. Let me show a mainlander's naivety with respect to mussels although I love them and eat them just about every week. We used to have the largest mussel farm in North America on the eastern shore of Nova Scotia. Over here you have a blue mussel. Is that the same mussel?

Dr. Halfyard: Yes, it is.

Senator Munson: It tastes better here.

Senator McInnis: I will have to try them.

The other question is that we hear of loans and grants to the finfish aquaculture industry. I don't hear much about loans or grants to the shellfish industry so you can comment on that.

The environmental management code practice is in existence in P.E.I. and B.C. It promotes responsible and sustainable development and it is run by the association. You don't have such a code here, I understand. Do you plan to have one and do you not think it would be valuable?

I have another question. We heard the minister and his staff this morning talk about bay management areas. I am wondering of the import of that in so far as your industry is concerned. It sounds very similar to me. You wouldn't be waiting all this time for your permits if you had pre-setup areas where you could carry out mussel farming. Do you do that? Do you anticipate that would be something that would be advantageous to you? Those are some of my questions.

The final point I want to make is with respect to transporting. The Lobster Council of Canada is new. The genesis of the organization is to market and brand east coast lobsters. It was announced this week that two or three flights out of the Halifax International Airport go to South Korea. Their goal is to open up Asian markets. Is that something you're anticipating you might be able to do? Are you large enough to encounter that? Could you join in with the Lobster Council? I don't know. It is called the Lobster Council. There may be an avenue there.

Dr. Halfyard: I guess in my perception of duplication and overregulation some will say you need to be regulated. The strength of the Canadian aquaculture industry is that it is very well regulated and we can document these things.

When you get duplication it's partly a trust issue because federally there's the perception that this is our law, we have an act, and therefore we are responsible. Now if Transport Canada doesn't come out on our site — and they have not seen our site — can they verify that the site is properly marked and all these things?

There has to be more of a relinquishing or a sharing of that role with the province. The province also comes out on our site and does the same inspection. It is a different form but it is actually easier to read and understand than the federal Transport Canada one.

I don't know if it's a lack of sharing or a lack of trust. One says they need this to document. The other says they also need it. I don't think they both need it. One has to say, "Yes, you've done it. We will recognize your validating of that site."

We have a provincial DFA that licences us. We have Crown lands that say you have a lease for the water and all these things. Because of the cutbacks Transport Canada has less connection to us. There are fewer officers to go around. Nor do they always have a strong communication with local people in how you mark your site because there are other fishery activities there. Sometimes what looks nice on paper is not what's nice when you're coming up in boats through a site that should be marked and there would seem to be irregularities.

It has got to be a balancing act. I agree you have to have regulating but there has to be some respect between the province and the federal levels of a trust factor and a validating of your documents rather than a duplicating.

Ms. White: I think you mentioned the bay management. I just want to make a point about that. In the mussel culture you can pretty much throw a rock from one to another of our farms and you might be transferring seed to the other site. You've just applied for a transfer permit and you're waiting for a transfer permit to move it a few feet over. It's one of those species where the water is circulating. You're transferring it from here to there. It's not a different bay. It is not a different body of water. It is not a different section of Newfoundland.

In the Triton area anyway we kind of need: "You're going to be transferring between these sites so here's a permit and let us know at the end of the year". They know on average from looking at the statistics that this site usually does 50,000 kilograms. That is what the site can hold. That's its capacity. We're not going to be doing any more than that. That's the capacity of the site.

It just becomes repetition every year that we're applying for 50,000 kilos and you're approving it. You know we're going to be doing this again next year with regulation. We'd like if we could get a permit just saying that these eight farms are within close enough vicinity that transfers can occur as long as you let us know at the end of the year you have to bring in your statistics and that you know anyway how much is actually being transferred.

This past year DFO did that with us. DFA gave us individual permits but DFO actually just gave us one permit saying that you can transfer from all your mussel sites to all your other mussel sites in that area. That's just a little bit of help. I can understand a bit more with the oysters. We were transferring interprovincially. Bay management might not be as easy at first as on the mussel side.

We are looking at the Asian markets a little bit. It is more on the frozen side product right now as we have value added a one-pound pack that is cooked frozen. We're hoping to get over and look at some of the Asian markets in the next little while. Of course if we bring the oysters on line we'd also be able to ship oysters over there as well.

Ms. Pryor: I just want to add one quick comment on loans and grants and the first question about funding to the shellfish sector. I'm sure Laura and Rebecca would agree. I don't think the mussel sector has ever got the degree of funding that the salmon and finfish industries have got from an infrastructure perspective and even from a development perspective.

If you look at the graph of production of shellfish in our province it has certainly been up and down. There have been stops and starts and things like that. Laura has already mentioned the margins from shellfish. They're a totally different animal. They're not as sexy as salmon and the finfish industries so our shellfish farmers have certainly had to fight over the years very hard to get the funding they've actually been able to get. They are still fighting as Rebecca says to expand into a new species. There certainly hasn't been the same level of support for both sides of the sector.

I was just going to add that the Lobster Council of Canada is very interesting. As I think Rebecca said, our processors would look at any marketing opportunity and certainly partnering in anything like that that would expand our markets.

We did have a company in Newfoundland. Fly Fresh Freight was the name. They actually were looking to take fresh seafood from Newfoundland and bring it to Europe. We're hoping to do that on a continuous basis. that may have been three years ago or so now but at the time they couldn't secure enough product to actually do that. Maybe with CETA and other changes that may open up a new opportunity but certainly it could be an opportunity.

The Chair: Senator McInnis, one quick question.

Senator McInnis: I was just going to get an answer on environmental management.

Ms. Pryor: We actually did years ago have some codes in the province. We have talked to our association and colleagues from other parts of the country to look at what we should have in place. From the shellfish side I guess I could speak to that more. The decision was made to go with the certification because the certification schemes themselves have such strict environmental policies within them that they have to be third party accredited. Those essentially have become what we would call our codes of practice, if that helps.

Senator Raine: Thank you very much. I can see that there's a big difference between mussels, oysters and finfish. One thing I'm very curious about is that we went and saw the Centre for Aquaculture Health and Development, the new laboratory facility down in St. Alban's. They have state-of-the-art labs there.

Could they not test for different things? Why do you have send samples somewhere else regarding health impacts on mussels?

Ms. Pryor: I think as a regulatory requirement it has to be done in a CFIA lab. Now I could be corrected on that.

Senator Raine: Why can't we get CFIA certification for that lab? I guess that is the question I'm asking because we don't need to duplicate. These labs are incredibly expensive. I mean they have a state-of-the-art lab there. It should be used by DFO, CFIA, Environment Canada and everybody. That one lab could serve this area.

Ms. Pryor: There was a CFIA lab in St. John's that they closed so CFIA actually did have the lab. It is a good point.

Senator Raine: Is it possible to have that lab certified by the CFIA?

Ms. Pryor: I couldn't answer that.

The Chair: I would think it would be but it's a process that's beyond my pay grade.

Senator Raine: Ms. White, the oysters that you're researching, do you call them American oysters?

Ms. White: Yes.

Senator Raine: Is that the same blue oysters?

Ms. White: No, it's blue mussels.

Senator Raine: Oh, blue mussels. Why do you call them American oysters?

Ms. White: That's just the name or eastern oyster. It's pretty much just the name that it's called. They're all found along the East Coast. Crassostrea virginica is the Latin name.

The Chair: Stick with American.

Senator Raine: We went through this with the lobsters. The thing is if you want to eventually market these as oysters from the pristine waters of Newfoundland it would be better not to call them American oysters because they'll get mixed up with all the east coast oysters that are being marketed in less pristine waters, unless you have to call them American oysters.

Ms. White: No, we're planning on coming out with a brand name for them. I guess that's just the name that the New Brunswick crowd we're getting them from are calling them.

Senator Raine: Why don't we just take that out of your stuff, starting right now? Anyway, good luck with that because it sounds like a very good opportunity. I certainly respect your tenacity in pushing it forward. It's not easy.

Ms. White: Thank you.

The Chair: Thank you Senator Raine and thank you to our panelists. Again it's another perspective of this industry that is very intriguing. We're certainly hearing much here today. I'm sure the senators could have many questions but our time is limited. We have another panel coming forward now and we're running late.

As usual I just want to add, if I could, sometimes when you have had an opportunity to make a presentation and you're driving home you think, "Oh, I wish I had said that or passed that on". If anything crosses your mind over the next couple of weeks, feel free to contact our clerk with that information and we can include it any time at all from a written submission as part of our study. If there's something that you think we should be aware of that we didn't get a chance to explore today, feel free to put that forward.

Once again, thank you for your time. It has been great.

We're pleased now to welcome Mayor Jamie LeRoux from the town of St. Alban's; and Mayor Roy Drake from the own of Harbour Breton. We had the opportunity to visit both towns yesterday and we certainly thank both mayors for the hospitality received in both places. We did visit Poole's Cove also, just to make sure that we're covering all our tracks here.

On behalf of the members of the committee, I thank you for being here today. My understanding is that both mayors have opening remarks and then we'll have an opportunity for senators to ask questions. So whichever one of you would like to go first, the floor is yours.

Jamie LeRoux, Mayor, Town of St. Alban's, Newfoundland and Labrador: As you all know, my name is Jamie LeRoux. I hope senators had a great visit when you were in our region and in our towns. As mayor of the town of St. Alban's, Newfoundland and Labrador, I will be your tour guide for a few minutes on the economic impact of aquaculture to the town and area.

First I will provide a background to give perspective. Then I will speak briefly to the impact of aquaculture and conclude with a personal observation on rural progress.

The town has 1,233 residents and the coast of bays region has 14 municipalities consisting of 22 communities with a total regional population of 7,219 residents.

St. Alban's and the Bay d'Espoir area was settled by those that moved inland along the deep bays from fishing communities on the outer coastline. St. Alban's became a trading centre and logging became one of the early industries until later declining. Hydro development and thereafter hydro generation became an important industry in the area.

After the development phase there were many skilled construction workers that had to look elsewhere for work. In the region there were four wild fishery plants. Today fish harvesting and fish buying activity is still very important but all the wild plants have discontinued. However there are three plants that have done significant aquaculture production in recent years, including one in St. Alban's which did not have a wild fishery plant. Many fish harvesters in the greater region now work both in the fishery and aquaculture.

There have been many ups and downs in the local economy and like many rural places across Canada people had to face economic challenges and demographic shifts. Often our biggest and most valuable exports are our people who often needed to look elsewhere for opportunity.

Now I will shift gears and talk about aquaculture in, around and near the town of St. Alban's. Aquaculture development and growth have been ongoing for 30 years. Today the industry represents much economic opportunity while diversifying and adding to the economic base.

Our town has seen the opening of a 58,000 square foot hatchery and an aquatic fish health lab and aquaculture development centre. There is a fish processing plant in the town and farm sites in the nearby coves. The town also has support sector companies from services such as scuba diving to cage and net manufacturing firms.

Hundreds of local residents are employed directly with industry or local businesses that benefit indirectly. In the greater region that number totals 600 to 800 direct jobs. These jobs are very broad ranging from labour positions to skilled trades, to professional positions in many fields including marine technology, sciences and business.

Aquaculture contributes to the tax base of the town. Commercial and residential development has been significant. Property assessment values and real market values have been rising. In the past the selling of homes and the renting of properties were very difficult. Conversely today the buying of homes and finding real rental properties are more challenging with increased demand. Housing starts have increased substantially.

There are younger folks moving to the area for new opportunity. Returning retirees and semi-retirees have confidence in building their retirement home in a more vibrant community. There are more grandparents that now have grandkids nearby. These are less tangible impacts but positive for wellbeing of a healthy and sustainable community. Everyone benefits from kids to seniors.

To conclude, I will end on a personal observation happening literally in my front yard. My wife and I and our family moved back to St. Alban's in 2002. I questioned it at first as it seemed that people were going in the other direction ever since I was old enough to remember. In 2002 I counted less than a handful of my graduating class of 1993 residing in the area. Today that number is 16 out of 37 and actually since I did these notes it's actually 19 out of 37. That's more than 50 per cent of my graduating class now living, working and raising families in rural Newfoundland and Labrador.

My wife and I purchased a 70-foot long mini-home for the price of a nice car when we moved there. We thought this was safe as you can lose in depreciation on a bigger home. It was not like Halifax where we lived previously. Six years later in 2008 we sold that mini-home for the price of two nice cars. Today it's worth the value of three nice cars. In 2008 we built a new home among 11 housing starts in town that year. Since 2008 our property assessment has increased by 40 per cent and the cost of building nearly doubled.

The subdivision where we live now is now full. Nine more homes were built and we can count 22 young children, not including our own that reside in homes visible from our front door alone.

The seafood industry in Newfoundland and Labrador historically is about $1 billion annually which is very important. Today aquaculture is now accounting for nearly 20 per cent of that. That is a statistic. Rural progress is often qualitative about what you experience when you leave your front door and take a ride through town. Thank you for taking a tour with me today in the town of St. Alban's and region to which the economic impact of aquaculture has been very significant.

Thank you.

The Chair: Mayor Drake.

Roy Drake, Mayor, Town of Harbour Breton, Newfoundland and Labrador: Good afternoon, senators. My name is Roy Drake and I'm mayor of Harbour Breton, a community that you visited yesterday. As you found out yesterday we are on the south coast in the area of the province that we all refer to as the coast of bays.

Harbour Breton traditionally was connected to the offshore fishery along with the inshore fishery and was the mainstay of year-round employment in the community. This was the case only until a few short years ago.

In the 1990s we were all impacted by the moratorium on northern Cod. The local fish plant was closed and people were thrown out of work. However in the later years of the moratorium Harbour Breton was fortunate enough to produce other species and employed people once again.

However in 2004 the provincial government brought changes to legislation that would see the end of Fishery Products International and a connection to the offshore fishery ended.

The Barry Group later acquired the facility in Harbour Breton and once again we adapted and our future in the aquaculture industry began. Harbour Breton residents work on aquaculture sites. They work at businesses that serve the industry and are involved in the production of farm salmon and trout in the value-added stage which is then shipped to market.

One does not have to look far to see how the community has benefited from these jobs created. These economic spin-offs from this industry reach much farther than my community. It benefits all communities in the province. Look no further than here in central Newfoundland and you do not have to travel far to find a business that depends on this aquaculture industry to keep their business running.

A municipality is like a business and it needs money to function. When the residents are working everyone in the community feels the benefits. I fear to think what Harbour Breton would be without the aquaculture industry today. The direct and indirect jobs are almost immeasurable. Yes, we do have other residents in town that work at other jobs in the offshore, the medical field and the inshore fishery but it all benefits local economy. A diversified economy is what rural Newfoundland needs to survive and we have it.

The challenge that Harbour Breton currently faces is the fact that the facility once used for production has outgrown its useful life. A more modern, streamlined facility has to be built and we are working on a daily basis with all parties involved to see that this new modern facility will soon become a reality.

Like Jamie said earlier and so many others I decided that I wanted to raise a family and work in my home town. I believe in the community, what we have and what we have to offer. The future is bright with the proper plan. Challenges in any industry are inevitable but there is no doubt that this region of the province can continue to grow with the aquaculture industry and be a strong part of the province's overall economy.

Thank you.

The Chair: Thank you, mayors. It's great to hear of another side of the aquaculture industry and the benefits from it.

Senator Wells: Thank you, mayors, for appearing and giving us a presentation and for the hospitality your towns offered yesterday.

You mentioned, Mayor LeRoux, that there are 13 communities in the coast of bays area.

Mr. LeRoux: There are 14 municipalities and 22 communities.

Senator Wells: Is there a good co-operation among all the communities with respect to aquaculture development? I am referring to sites, services and obviously processing in some cases. Is there a lot of co-operation or is there healthy competition?

Mr. LeRoux: In terms of co-operation our council, Mayor Drake and I are new in our roles. Our predecessors have had a joint mayor's council for the region since late 1990s and just last week or the week before we solidified that with a memorandum of understanding. We have a new Regional Economic Development Corporation attached to it and so in the future there could be an interest to support the industry in terms of aquaculture and other industries. When it comes to working together there's a strong history of working together when it comes to services and things like that.

In terms of aquaculture over the years that group meets with different stakeholders in the region. Industry is one of them and aquaculture is one so in terms of competition the industry really needs to be spread out. There are certain parts of the industry that have to be in different locations. Some could be cleaning in one location and there are inflows and outflows which the folks here in the industry know a lot better than we do as municipal leaders.

The industry really is a footprint that benefits everyone. There will be times when there will be a little bit of healthy competition when it comes to new things that get introduced and stuff like that, but that goes without saying anywhere. It is very much a co-operative environment.

Senator Wells: Does the Association of Municipalities essentially replace the Coast of Bays Corporation, the Regional Economic Development Board?

Mr. LeRoux: It doesn't replace that corporation. The municipal elections were last fall. The previous joint mayors group wanted to wind down the Economic Development Corporation. They went in this direction and our group went further when it comes to solidifying the framework with which we will work together going forward.

That corporation had a little different mandate and this was more of a municipally driven mandate. The actual benefit for municipalities with this group is that we could probably implement the Regional Economic Development Board which you referred to as the Coast of Bays Corporation which was a planning agency only.

Senator Wells: Right, so you have more flexibility.

Mayor Drake, Harbour Breton is the anchor community of the region. It's the service center for most part. During the darker times in the 1990s and the early 2000s when a lot of people were leaving and going to Alberta and elsewhere it was because they were following work. You're finding now that people are coming back, following work. I'm assuming that's correct.

What are the challenges? Do you have challenges of getting enough workers to supply the industries around Harbour Breton?

Mr. Drake: At some times we do. Like you said earlier, a lot of people left to follow the work but when the aquaculture industry opened it gave opportunity to—I won't call them older—people in their fifties that weren't so confident about going and looking for work in Alberta. This gave them the opportunity to stay home and they could live with the means they received from that. Those are some of the things that most of these people said to us.

It also gives the younger generation scientists or those types of people the opportunity to come home and do exactly what I did.

Senator Wells: I noted from looking through some of the briefing notes that other people have given us marine biologists, aquatic veterinarians and that sort of thing. I would never have thought that there would be a continuing demand for those in that area. It's a great credit to what the aquaculture sector has done for the communities in the coast of bays area. Thanks very much for your presentations.

Senator Poirier: Thank you, mayors, for being here. In listening to you and how your community have been moving forward with the number of population, the number of jobs, the number of families, and everything that is coming in, from my understanding it looks like the aquaculture industry has really been an economic driver in your region to help build. Am I right on that?

Mr. Drake: Yes.

Senator Poirier: Also being a coastal area for quite a few communities up in that end of the province, how important is the tourism as an economic driver to the region and has there been any impact on the tourism industry due to the aquaculture?

Mr. Drake: I guess you found yesterday that Harbour Breton was a long drive. Most people find it's a long drive so tourism for us has always been a challenge to get people at the end of this long road.

In Jamie's case he's not as far off the Trans-Canada as I am. You do see people with the aquaculture industry visit the area. They hear about it in the news. They hear of its success. They will visit St. Alban's, Milltown and Head of Bay. Then of course we have Conne River, our First Nations reserve, the only one on the island in our area. They will visit these locations and they'll come to Harbour Breton. Most people would love to see the operation itself, the cages, how the fish is grown and how it's produced if they can. It has done a lot of things to that point.

When it comes to the other thing for the municipality, like he said, we're new mayors. We found a challenge and it's a good challenge. Where do you develop land for new homes? Where do you get money for the new infrastructure in water, sewer, pavement and wharves? How do you accommodate for these people?

It is a great thing that most small towns in Newfoundland don't have that problem but we can honestly say we do. When people hear about success they follow it. Whether it is in the aquaculture industry or they work offshore or in my case someone who works at the local hospital, they want to be a part of a community that's growing and alive. We still have two schools in our community. When I graduated in 1991we had two schools and we still have two physical buildings. We have less population but we still have the two buildings because the population is still there for that. That makes all the difference.

Mr. LeRoux: Like Mayor Drake said when it comes to tourism there have not been any impacts. As a matter of fact, if anything, a lot of people come in and wonder what aquaculture is about and want to look through the area. Aquaculture itself actually can in our case probably add to it.

In terms of the region we have a lot to offer. For those of you that seen it there I've heard tourism consultants that worked throughout Atlantic Canada compare some of scenes you see from your vehicle when driving in our region, especially going down toward the town of Harbour Breton and those communities, to scenes you have to hike for in other jurisdictions. I won't name any but we have sometimes a best kept secret when it comes to tourism. Like I said, the drive is a challenge but there have not been any impacts from that industry on the potential opportunities in tourism.

Senator Poirier: Would you both say that aquaculture is the No. 1 employment opportunity in your region or along part of the province?

Mr. LeRoux: Yes, in terms of growth opportunity for sure. For instance, in parts of the coast, in Bay d'Espoir for instance, hydro generation is still a big employer. Much of the island's power comes from Bay d'Espoir hydro generation. At the other end of the coast inshore fish harvesting and fish buying are still very strong, but there are growth opportunities and complementary opportunities. Some of those industries go hand in hand sometimes and sometimes people are in both.

Senator Poirier: I regret that my plane wasn't able to get here in time so that I missed the visit yesterday. I looked forward to visiting you.

Senator Munson: Thanks for being here. As mayors, are you part of the Canadian Association of Municipalities? Then, of course, in Newfoundland there would be the association you alluded to.

Mr. LeRoux: As well as Newfoundland and Labrador.

Senator Munson: I think you were both here listening to testimony from operators and people who have fish farms, shellfish and so on. They did talk about a lot of red tape, a lot of duplication of services, confusion, delays, closing of offices and the issue with Marine Atlantic. As mayors, do you get together in Newfoundland and Labrador and sit down and hear these complaints firsthand and then present as a united front the positions of the constituents that you represent: Yes, it's a really good thing that this is happening but there are some still serious issues such as time is money, and all these sort of things and to get approvals and so on and so forth and present those either to a federal representative and here particularly in the province. Are you able to do that? Is that a process that you folks are doing?

Mr. LeRoux: Speaking to my time involved in terms of municipal organizations provincially, nothing comes to mind in that regard. It's not that they wouldn't do it. There are many industries in the province but going down to the local level and speaking to my prior involvement at the municipal level, over the years if there are industry concerns they are indeed concerns of the municipality. Any time there are things to advocate that benefit the industry as it would go forward, especially when it comes to our Economic Development Corporation, and if the red tape could be reduced, it would benefit the communities for that growth to continue.

Mr. Drake: Red tape is always a problem even for a municipality, but I think once we get our regional economic board as a community of councils up and running these are the things that we will be looking at.

I know that one of the sites Dr. Halfyard is speaking about is in ours. We had challenges. I know that when Cooke Aquaculture produced in Harbour Breton some of their challenges were the weather and the schedule of the ferry across. The boat and trucks would leave town every night just to catch the ferry first thing in the morning and hope it would get across. It is a problem that needs to be addressed and something we will look at with the producers.

Senator Munson: Thank you for that.

Aquaculture seems so different than some other industries that have come and gone to this province and to other provinces in Atlantic Canada. I am from New Brunswick originally but I was a reporter before and I covered enough stories of greenhouses and different places in Cape Breton where money was poured into, from call centres to you name it. Mayors and others get so excited: "My goodness, money is being poured in here and look at what we have now." No questions are asked and then all of a sudden two years later somebody would say, "He has pulled the plug and he's gone."

In this respect it seems different. There seems to be a lot more hope, a lot more sustainability in this particular environment. I think part of it is due to the fortitude of the people of Newfoundland and Labrador and also the fact that it's owned and run by the people of Newfoundland and Labrador.

I just thought I'd make that statement because we've only been here 48 hours and as a committee we're going to make a report. What we're seriously looking at is getting an aquaculture act and streamlined regulations and hoppefully adding our voice to this conversation. It's more of a statement than soliciting an answer.

Mr. Drake: Even the aquaculture industry is not brand new for most people. I mean it was in Bay d'Espoir I'd say 25 or 30 years ago. It grew slowly. They knew what they were doing and it's got to the point where we are today. Government funding sometimes is needed and help from organizations such as ACOA is a great help especially for a community like mine at this time anyway.

Mr. LeRoux: In Head of Bay d'Espoir, the neighbouring municipality of Milltown, there is a support sector business doing some construction there of a net cleaning facility and another wharf is being constructed in Milltown. Yesterday I left town to go to Clarenville and I saw the traffic there. These are all positive signs of continuing growth of the industry and support for it.

Senator McInnis: Good afternoon, Your Worships. I agree with Senator Munson. This is a very feel good story and it looks like the future is looking quite rosy because it has been said the world has to be fed and aquaculture is going to be needed. Who would have imagined in the outports of Newfoundland and Atlantic Canada and B.C. it's coming home and creating jobs.

The value-added stage was mentioned, I take it. I'm not sure what that would be, but you can mention that. What type of aquaculture do you have taking place and what are the average wages being paid?

As a final question, and I'm trying to get my head around this, I think you said that it was beneficial with respect to the tax base. How do you tax and assess? I can see onshore sites, but do you tax and assess pens? They are in fact attached to the shore and they're attached to the bottom. Is there a tax base there so that you are able to benefit your revenues?

Mr. Drake: I'll speak on the value added first. When production was taking place in Harbour Breton there were two ways of doing it. It's called H and G, head and gut for the fishery. The salmon would go out as a whole salmon and be taken to maybe New Brunswick for extra filleting to extend the life of the product or if the market demanded that's what would be done.

When we did the filleting side of things in Harbour Breton that created more jobs. This is one of the things that we really liked about that side of things, but there were challenges again with shelf life and trying to get it off the island and these things. Once we get going we'll discuss that again. That's what value added is. It's the filleting of the product itself.

On the hourly wage I know on the cages it's probably $13 or $14 an hour or so and up. In the fish plant production of it, it is around the same thing.

When it comes to the tax base in Harbour Breton we taxed with an understanding with the company that owned the building at a flat rate for the year and then they pay for the water that they would use. When it comes to the cages I don't think we tax the cages because they're not always in the boundary of the municipality, but this does cause a challenge because the roads get used, the wharves get used and everything in the town gets used in some way or form from the trucks bringing material in and the trucks bringing material out. That's something that needs to be looked at.

After speaking to different municipalities in the mining industry it's the same sort of thing. They can't tax a mine that's outside the boundary although everything inside is being used. That's a discussion for another day.

Mr. LeRoux: Mayor Drake was speaking about plant wages and the taxing on the plant side. Tthe cages are not necessarily in the vicinity of the town limits. Most times they're outside. In terms of wages, whether it be plant sites, other activities, sciences or anything else, the only impression I have is all the wages for t various skilled labour positions and science positions are competitive to the industry or else people wouldn't be in them. In some cases they will vary by the opportunity that's there.

In the case of St. Alban's there was no plant there at one point. We've got to look at that side of it. The wages are unionized and better than the minimum wage for sure. When you go on through the harvesting, working on sites and going on to other specialized positions, the wages and benefits are competitive. Otherwise people won't necessarily be working those jobs.

There's also opportunity there more in the area of job advertisements. It's kind of a different environment. At one time I guess you wouldn't advertise jobs. Maybe 10 years ago or more if someone knew there was a job opening there were lots of people to fill it. If it was a private business — and I am just thinking of the mom and pop stores and smaller businesses in the area — they only need one or two employees. They're probably advertising more because it's changing in terms of employment opportunities which is very positive.

Senator McInnis: You have the professionals, as you say that, scientists and so on and since you are so far away they move there or move back.

Mr. LeRoux: Whichever way it is.

Senator McInnis: That's right. That's good news.

Senator Raine: Thank you very much and thank you for the hospitality. Down south it was a really nice day. Is that what you call it, down south? The south coast is a beautiful area.

Do you know what the unemployment rate is in your two communities at this point?

Mr. Drake: In Harbour Breton right at the moment the unemployment rate would be quite high due to the production facility being closed down. I'm not sure if you were told yesterday when you were there, the Barry Group obtained the plant and broke the lease with Cooke. They're trying to reopen because they want to get fish produced again by November. It threw 150 people out of work right away.

On the fish farm side of things they're hiring more people this year. They're doing more sites. It's hard to put a number on it right now. This is probably not a good year to be asking me. I'm probably on the higher side of than I would like to be.

Senator Raine: About a year ago then what would it be?

Mr. Drake: A year ago I'd say it was hard to get anybody to go to work. That's one thing I could tell you. It was hard just trying to find someone to do something and go to work. I'd say it was probably down 6 to 7 per cent compared to 18 to 20 per cent 20 years ago.

Mr. LeRoux: I don't have specific figures tjat speak to our town and the other towns on some of the things you see over the years. There are programs around and initiatives for funding for projects for EI individuals or other individuals that need to get into the workforce. Organizations look to avail themselves of those programs to do work and obtain those skills. It's a little harder to get people into those programs because less people need that opportunity to get into the workforce now. We've been noticing that.

For most people who want to find suitable work the projects and activities are not fit for everyone. There's also this conversation we have with 18-year-olds when they graduate. Some people talk about trying to keep our 18-year-olds. I said you're not going to keep an 18-year-old even if you live in a bigger city. They want to get away from mom and dad and explore the world.

Going back to my personal experience side of it, I can look around and see a lot of 25- and 30-year-olds who are willing to relocate back and put roots in the area. A lot of the people are moving back. They might not even be working in aquaculture but because of that industry being one of the diversifying factors they could be working in a store or other types of businesses in town that are indirectly supported by the industry consumer or business-wise. As I look around I see semi-retirees moving back and working in other industries with incomes less than where they came from, but it is semi-retirement income and a good quality of life. They have gone back to their roots because we have strong roots.

Senator Raine: I've got one more question. We heard a few times this morning and yesterday that you need a better cell service and internet service. I'm just wondering about the regional economic development organization that you're putting together. Will you be able to work together on getting that? I know it is such a rugged country that it is not easy to put cell service in.

Mr. LeRoux: The broadband is supposed to be coming this summer. That's a recent announcement. In terms of cell service that's definitely a challenge.

Mr. Drake: Harbour Breton was fortunate enough that the fibre came ashore in Harbour Breton when they did the island a few years ago. We've had good Internet service from both providers for the past number of years.

If you noticed yesterday — I don't know if you did — there's a fibre line coming up the highway. That's going to come into St. Alban's and other communities like Conne River. That's going to help those guys out because they've had the worst kind of service. That broadband will help them out.

When it comes to cell service the country is rugged and we need to get that addressed. Once this fibreline goes in we will be after Bell Aliant to add more sites.

Mr. LeRoux: Those issues have been advocated for a long time by the former Coast of Bay Corporation and the former joint mayors. We've seen the fruition of that when it comes to broadband in our neck of the woods.

I did see that clip in there. I know Senator Wells was there when Chief Misel Joe talked about it being a couple of notches above a smoke signal. Being in Bay d'Espoir I could walk away from the computer to let a two-minute CBC news clip load and maybe 15 minutes later walk by and it still hadn't loaded. I look forward to it in our end of the woods. Different times of the day that would happen but if you wanted to get up early or late it would be okay.

The Chair: Certainly it's an issue in many parts of Newfoundland and Labrador. I know down in our own area on the Cape Shore we're still without cell service. From a business perspective it's a negative so hopefully that will come to pass too.

I want to thank you once again for your presentations. As I said earlier, it's great to see some young people taking on roles in their communities. It shows that there's a future in the communities for sure. We wish you all the best. Thank you for taking the time to come here today.

I'm pleased to welcome our next panel. I'm going to ask the panel to introduce themselves first and then I understand we have some opening remarks.

Danny Boyce, Facility and Business Manager, Ocean Sciences Centre, Memorial University of Newfoundland, as an individual: Good afternoon, pleasure to be here. My name is Danny Boyce and I represent Memorial University of Newfoundland.

Darrell Green, Research and Development Coordinator, Newfoundland Aquaculture Industry Association: My name is Darrell Green and I'm R and D co-ordinator at the Newfoundland Aquaculture Industry Association.

Dr. Jillian Westcott, Aquaculture Instructor and Researcher, School of Fisheries, Fisheries and Marine Institute of Memorial University, as an individual: I'm Jillian Westcott and I'm an aquaculture instructor and researcher at the Marine Institute at Memorial University.

Cyr Couturier, Research Scientist and Chair, Aquaculture Programs, Fisheries and Marine Institute, Memorial University, as an individual: I'm Cyr Couturier and I'm a research scientist and Chair of Aquaculture Programs at Fisheries and Marine Institute at Memorial University.

The Chair: My understanding is that we all have opening statements and that Dr. Westcott is going to begin. I'm not sure if Dr. Westcott is aware of that but she is up now.

Dr. Westcott: I want to start by saying thank you very much for the opportunity to speak to you today. This is a wonderful experience for me. I'm a new faculty member at the Marine Institute. As a native of Newfoundland I moved away for a number of years and I have come back to do some work here. I thought I'd talk a little bit about my experience with aquaculture research and give an idea of what I've done in the past and what I hope to do in the future here in Newfoundland.

I have a handout, the green one there. I'll focus today on the research I have done on sea lice, which you may have been introduced to, probably sometime this morning.

Sea lice have been the focus of my research over the past decade essentially. Sea lice are — and I have put some pictures there for you — naturally occurring parasites. They're found not only on wild fish but farmed fish as well. The thing about sea lice is they do require a constant management and control. That's not only in Newfoundland and Canada but anywhere in which they are producing Atlantic salmon commercially they have to deal with managing sea lice. They are an ongoing concern.

With respect to sea lice management the process to deal with them is based on a model for agriculture and that model is called integrated pest management. We use a lot of those principles in the aquaculture industry as well and that's really the basis of the research I've been doing over the past 10 years.

I'll tell you a little bit about the integrated pest management in a moment, but the point I wanted to really make is that it is really required to ensure the long-term sustainability of the Atlantic salmon industry. So it's an important concept.

I put in a pyramid there to show you an example of kind of the tactics for integrated pest management. It's basically drawing upon a bunch of different ways of controlling and managing sea lice. At the bottom of the pyramid we have physical kind of methods. An example I used, just to give you an idea, is fallowing. That's actually taking a sea cage site, if we're talking about Atlantic salmon, and leaving it devoid of fish for a period of time to break the sea lice lifecycle. That's one physical means of control. You will see that the pyramid moves from the bottom to the top from methods that are either prevention up to actual intervention so it's somewhere along that range.

We think about biological and mechanical means for controlling pests and we talk about sea lice. One way of doing that is through using cleaner fish. That's a species of fish that will actually pick and eat the sea lice off the outside of salmon. They have been used quite successfully in Norway, Ireland and Scotland and there's an interest in doing that in Canada now as well.

On top of the pyramid is the actual chemical intervention. We have a number of therapies, whether they be bath or medication that's coated on feed, so there are a number of ways to actually treat salmon for sea lice. I'm going to show you where my research fits in on that pyramid, where it has in the past and where I hope to go with my research in the future.

I really started off my career on the top part of the pyramid on the chemical side. The intervention side and most of my graduate research and research subsequent to that was around developing bioassays to test for sea lice sensitivity. I did this work in New Brunswick under Dr. Larry Hammell. Essentially we're taking sea lice off salmon on the sea cage sites and then testing them with the different drugs used for their control and we're doing that in the laboratory. When you do that over a series of sites over a series of years patterns start to emerge on the sensitivity of those sea lice to those chemicals that we're using to treat them. These were tools to put in the industry's toolbox for mitigating and controlling sea lice used not only in Canada but throughout the world. They originated really in Norway with some Norwegians there.

I was also involved in looking at field efficacy of some of these sea lice treatments. After the sea lice treatments that are administered in the feed or in bath treatments and we actually go out and do sea lice counts prior to the administration of the treatments and then the fish are treated for sea lice, we do a series of samplings afterward to see how efficacious those treatments are. This is something that's ongoing, something the industry does quite regularly to make sure those compounds are efficacious and are working.

I was also involved as well in developing an industry sea lice training program for the Province of New Brunswick. I was working with industry to put together a manual essentially for the workers on the sites to really teach them how to identify different species of sea lice, different stages of sea lice and the tools they could use for counting sea lice. All that was in an effort for the industry there to basically get all the counters on the same page and make sure everybody knows what they're looking for basically. That was my past sea lice research.

This is my last slide. Being a new faculty member at the Marine Institute I only started to really work on some research grants now to secure funding to do some research, but I've worked on a collaborative proposal with Danny Boyce from the Ocean Science Centre and with the Newfoundland Department of Fisheries and Aquaculture. We are hoping to look at the use of cleaner fish for sea lice control. As I've mentioned they've done this in Norway, Ireland and Scotland and we do have some candidate species here in Newfoundland that we're interested in investigating. A lot of work needs to be done. Danny will talk a little bit more about that in his talk but we want to look at things like what effects water temperature will have on the ability of cleaner fish to actually remove the sea lice, what kind of stocking densities would be good if we're actually going to use these in a sea cage site ultimately because that would be the goal, and then investigate the health and welfare of Atlantic salmon and cleaner fish in cohabitation and what kind of diseases might be present.

The whole idea is that we develop a fish health monitoring program for any cleaner fish that we use in Newfoundland. This is a project proposal that has been submitted and I'm hopeful that it will come through. That's where my sea lice career so far has taken me and where I'm headed, hopefully.

I just want to make the comment that having only been at the Marine Institute for a year I've had a lot of really positive dealings with the Newfoundland Aquaculture Industry Association, people from the Ocean Science Centre and other groups as well. I'm confident that this is a really great place to do sea lice research here in Newfoundland.

Thank you.

The Chair: Thank you, Dr. Westcott, and welcome home.

Mr. Boyce.

Mr. Boyce: My name is Danny Boyce. I mentioned earlier I work at Memorial University and this is the presentation that I put together for everybody. The theme as we know today is aquaculture research and development. I'd like to expand that into "Growing our Future Together."

I began my aquaculture career close to the House of Commons in a community called Montebello, working for CP Hotels back in the very late 1980s and early 1990s. I used to deliver fish to the House of Commons, trout in particular, way back in 1991, but when I moved back to the Ocean Science Centre halibut came a calling. We were doing halibut research back then.

The Ocean Science Centre opened in 1967. Its mandate is to carry out world-class fundamental and applied research on organisms and processes in cold oceans and to educate, nurture and train graduate students to become leaders in science and industry. The Ocean Science Centre has a long history working with the aquaculture community industry in training students. It goes back to the salmon and trout in the early 1970s into the 1980s. It also worked primarily with the shellfish sector in mussels in the 1970s and 1980s. As you know today, we have a great fledging industry in the salmonid sector and the shellfish industry.

As you've probably heard the last couple of days our industry value has risen to about $200 million today and it's touted as one of the most significant examples of successful economic development in Canada today.

I'd like to point out that Dr. Fletcher, director of the Canadian Foundation of Innovation attended an event in Ottawa last year. I wasn't there but Memorial University was recognized in helping develop back in 2012 the $100 million industry of today. Also the Ocean Science Centre has received a founder's award by Premier Dunderdale at the time in recognition again for outstanding efforts and achievements in establishing and growing the province's aquaculture industry. All this is leading into how Memorial works with industry and training students.

The building that I manage is called the Dr. Joe Brown Research Aquatic Building. It opened in 1999 and was financed in part by the Canada Newfoundland Agreement on Economic Renewal, the aquaculture component. That was a $100 million fund that was announced in 1997 by the late Minister Mifflin and our Premier Brian Tobin. Of the $20 million, $2.7 million came to Memorial University, half a million went to the Marine Institute and $1.2 million came to the aquaculture health unit on the south coast. A lot of this money came from the Canada Economic Renewal Agreement. There were three themes: IT, tourism and aquaculture. Aquaculture has certainly moved forward since 1997.

JBARB is closely affiliated with the Newfoundland Aquaculture Industry Association. We work closely with the industry. It's the industry we need to do the research for and in among that we take our students to move through industry. We are a multi-species facility. We've raised everything from Atlantic salmon right down currently to doing sea cucumbers, sea stars, flounder and as Dr. Westcott pointed out we're doing cleaner fish. This would include the raising of cunners and lumpfish as well. In Newfoundland we have four priority species: trout, salmon, blue mussel and Atlantic cod. That's where the commercial interest is right now.

We have production based workshops of bringing students and industry together as pointed out. We have workshops whereby we bring multiple groups from various universities, national and international countries to Memorial and bring the expertise together in the questions that we may have. We do multiple projects as I mentioned earlier, but one of the projects I would like to highlight is the commercialization of Atlantic cod. There has been a lot of federal, provincial and industry money put into the growing of Atlantic cod. I'd like to walk you through that particular project. This one is an industry driven collaboration. It's to enhance the establishment of a commercial Atlantic cod industry in Newfoundland. We have the infrastructure at Memorial University for commercializing of various species but in this case we were trying to move Atlantic cod forward to become a commercial product.

We had about 20 graduate students ranging from Honours to Masters to Ph.Ds that we put forward through our programs. We worked with industry in moving that project forward. We also involved the communities. A lot of our research was land based but we left the parking lot of Memorial and transferred to the communities. We grow the fish at Memorial and then we transfer them to our cage sites. We go down into the communities and in this particular case in these pictures it's Poole's Cove. I'm not sure if you visited there in the last couple of days. We had a cod farm out in front of Doug and Jennifer Caines' house in McGrath's Cove. We carried on that project and research project for about four years. In this mix we had the team, environment, fish and technology. You can see some pictures of our farms during that period of time.

That was round one of the Atlantic Innovation Fund. That was a very important fund that delivered through ACOA. It was one of the long-term funding programs which is very important to some of our research initiatives at Memorial. Some programs are one-year in duration. The one thing that this program allowed was a five-year duration of funding, which was very important to answering some of the research questions for industry.

We also had a land base cod nursery, a cod demo farm project with Cooke Aquaculture operating out of Belleoram as well.

Technology transfer: In this particular project we brought the first large-scale automatic feeder to Newfoundland in 2004. I'm not sure what sites you visited, but you saw some of the large feed barges that are being deployed today. We've gone a long way from the one-tonne feeder that we brought over from Scotland. Right now some of the feeding apparatuses are in the millions of dollars, so technology transfer is very important in a lot of these large-scale commercial projects.

I'll end with "Farmed Right Here." We had to know how to fillet Atlantic cod. We grew thousands and thousands of fish. We harvested thousands and thousands of kilograms of fish but there are still some impediments in that we just can't compete with the price in the marketplace. I'm glad to see recently that at least the price of fish is about 80 cents a pound right now. I'd like to see a better price but by the same token it's hard to compete with cod farming right now for the price and with the wild stocks coming back.

As I move forward just a couple of pages into the salmonid sector we've all realized with the commercial hatcheries and increased production we have two new hatcheries in our province in the last couple of years. You visited one in Swangers Cove by Cooke Aquaculture. There's the equivalent hatchery in Stephenville as well. With the increased production it will require R and D support. It takes a team of committed people as you've met so many people over the last number of days. You can see the team that's in place here in Newfoundland.

I think the challenge for R and D and commercialization is the competitiveness and profitability of our industry is directly related to investments in research and technology developments. Research and technology development priorities for aquaculture must be practically based, foster sustainability and be developed co-operatively with the industry.

I was in Tim Hortons in Nova Scotia and I picked up Saturday's edition of the Herald Business in 2012 in which John Risley, director and co-founder of Clearwater Fine Foods, said, "need to view Research and Development as an Opportunity rather than as an Expense." That's a very important quote for industry because we're fostering with the industry and training our students to work with them in the end, and I think there are oceans of opportunity.

Just to finish up, I put in a caption. I know everybody here is not cynical, but at the same token back in 1992 for people in this room that when Minister Crosbie announced the moratorium and it was the largest mass layoff in Canadian history. I'm from Bonavista, so that meant a lot to my area, but by the same token, we all realized there were a lot of people. There was a lot of work to do; there are a lot of programs put in place to displace fishery people and whatnot. But if you turn the page you can see aquaculture came on in the 1990s and into today and the difference of the two pages are a lot of young people in the communities as the mayors pointed out, a lot of happy faces, a lot of visitors coming from away. You mentioned tourism to the mayors. We have tourists. We have international groups come from Norway and Chile. One time we used to be always going to Norway, to the U.K. and to Chile. We're seeing everybody coming to us now, which is very important as well. We do know a lot that we can offer.

Thank you.

The Chair: Thank you Mr. Boyce. Mr. Green.

Mr. Green: Good afternoon, senators. My name is Darrell Green and I'm the Research and Development Coordinator for the Newfoundland Aquaculture Industry Association.

I'm really glad to be here to speak to you about aquaculture research particularly since it's my role at the Newfoundland Aquaculture Industry Association to help foster research into aquaculture. As RDC, Research and Development Co-ordinator, I'm part of network of RDCs across Atlantic Canada. We're called the Atlantic Canadian Aquaculture Industry Research and Development Network. Besides our involvement through NAIA, there are also RDCs in the other three Atlantic provinces. We have RDCs in the Aquaculture Association of Nova Scotia, P.E.I. Aquaculture Alliance and the Atlantic Canada Fish Farmers Association in New Brunswick. Between the four of us our goal is to stimulate industry driven or industry relevant R and D in the region.

The network has been funded for about 10 years now and we really have to thank NRC, IRAP, for their support, their kind support over the last 10 years, it's been great.

The need for research in the aquaculture sector is quite high. Aquaculture is a relatively new industry or sector here in Canada. We've been growing chickens and pigs and goats here in Newfoundland for over 500 years, but we've only been growing fish for about 40 years or less, so it is a developing industry here in Canada.

The sector across Canada consists almost entirely of small and medium size enterprises. Those SMEs have a very limited R and D capacity, so that they don't get to do a lot of research on their own, and research can help those same companies become or remain quite competitive globally.

However, as an industry, we are losing market share globally, so research is needed in such areas as production efficiencies; processing efficiencies and automation; invasive species mitigation; fish health, integrated pest management; environmental footprint and our interactions with other species in the environment; broodstock genetics; and byproduct utilization. There are industrial support systems in place in Canada for aquaculture research. All across Canada aquaculture associations help foster R and D and innovation. I've just mentioned some of the provincial associations a second ago and there are a couple of others on the west coast, but there are also two national associations as well. There's the Canadian Aquaculture Industry Alliance, which I'm sure you're all familiar with. There's also the Aquaculture Association of Canada. The AAC this year is celebrating 30 years with a mandate to promote the study of aquaculture and related science in Canada. Each year the Aquaculture Canada Conference showcases aquaculture science in Canada. As well, every two years the Aquaculture Association of Canada puts out, with DFO, they publish this Canadian Aquaculture R and D Review and in that review you will find about 200, 220, 230 research projects in aquaculture that are done across Canada and I do have a few copies if you want to touch base with me after. I do have a few copies with me.

Funding support is essential for driving research and the innovation that it fosters so our companies can remain competitive. Industry appreciates and takes advantage of funding programs through National Research Council, Industrial Research Assistance Program, NRC, IRAP; Atlantic Canada Opportunities Agency, ACOA; Natural Sciences and Engineering Research Council, NSERC; and Fisheries and Oceans Canada; as well as some provincial programs as well.

We also have tremendous infrastructure support in Newfoundland in particular. You've heard from Mr. Boyce and from Dr. Westcott about some of the things that they're doing at their facilities, but I think I'd be remiss if I didn't re- emphasize the importance of those two facilities and the Ocean Science Centre, including the Joe Brown Aquaculture Research Building that Mr. Boyce talked about, the Centre for Aquaculture and Seafood Development at the Marine Institute of Memorial University, and the Aquaculture Science branch at DFO in Newfoundland. All three of these institutions are world class. They have world-class facilities and absolutely world-class experts in research.

To close, I'd like just to recap the aquaculture industry in Canada consists of SMEs with very limited capacity for R and D themselves. Support for aquaculture research is essential in helping them become or remain competitive in the global marketplace. There's good support for aquaculture research in the form of provincial and national associations, expert government and academic researchers, world-class facilities and government funding programs but we really need to do more. We really need to continue to build upon the support for aquaculture research in Canada to improve our global competitiveness of our companies.

Thank you.

The Chair: Thank you, Mr. Green.

Mr. Couturier, you have some remarks you would like to make also.

Mr. Couturier: I'll try to make them brief, senator.

You have my biography and my brief in your package. I have a couple of degrees, undergraduate and graduate in marine biology. I've been in this business of education and training and research and development for the last 35 years, before I had grey hair. My research has focused mostly in Newfoundland and Labrador, but I've done research in Canada, as well as a whole bunch of other countries, and most of the recent research I have been conducting with my graduate students and collaborators has been related to aquaculture and environmental interactions. I have trained hundreds of graduate students as well from around the world and hundreds of farmers also from around the world. I have named a few of them here. Many of our past students at the university, Mr. Boyce's facility and as well as the Fisheries and Marine Institute are now colleagues and also sector leaders across our country. In Newfoundland and Labrador we find them in research and development and we find them on the farms; we find them leading the industry in British Columbia even. There are a lot of Newfoundlanders in B.C. running the industry there, just so you know.

At the university we've been training and highly qualified personnel as well as farmers, aquaculture farmers for at least 25 years and we've been doing applied research and development for probably 40 years. The finfish and shellfish industries are science based. You've heard that before. They really rely on performance based measures to improve their farming.

Whether finfish or shellfish, farm siting requires a significant investment in terms of biological, temporal and social characterization of the areas. You heard earlier about some farms requiring up to half a million dollars in studies before they even have a site put in place. I can tell you that it does take time to get a site licence and probably the most extensive one I know of is a clam farm in Nova Scotia. It took seven years to put a farm for farming clams in Nova Scotia because of the environmental regulations under the Fisheries Act and other acts.

With regard to interactions among wild and farmed organisms I want to mention a few areas where I've been involved in research in the last few years. On the shellfish side, a variety of shellfish studies have been conducted on interactions among shellfish arms and wild fisheries. There's been some concern in Notre Dame Bay, for example, from lobster harvesters that mussel farms may somehow be impacting lobster fisheries in that area. We basically looked at the long-term environmental parameters, harvesting of lobsters and mussel production in Notre Dame Bay in areas where there are mussel farms and in areas where there are not, and the conclusions. We have published some of this and we're about to publish some more in the peer review journals. The patterns in lobster abundance and catches related to environmental changes in temperatures are related to the temperature and natural food supply and really have nothing to do with the mussel farms. If anything lobsters are more abundant near the shellfish farms and there's also work published by Dr. McKindsey at DFO in Quebec showing the same sort of patterns.

On the salmonid side of things McLaughlin and Couturier showed that Bay of Fundy lobsters and Newfoundland lobster population landings increased in tandem with salmonid aquaculture in both of those jurisdictions over a 20- year period to record levels never seen before. We've heard this in the media in the last year or so in spite of the fact that we've had salmon aquaculture in those areas we know that lobster populations are quite high.

We know that interactions have been noted among wild and farmed salmon and the risks and impacts appear to be mitigated and may be reduced with modern farming practices. Since we know the environment more, the industry can take steps to prevent those interactions or at least reduce them. We know that farm and wild fish may breed together under laboratory conditions or even semi-artificial conditions, a number of papers have been published on that however the impacts and levels over time are still quite unclear.

A very key paper that came out in 2012 by Glover et al looking at the genetic differences in over 20 populations of wild Atlantic salmon rivers where various farm escapes have occurred over the past three decades in Norway, surprisingly in very few cases were there long-term impacts found, signaling the resilience of natural stocks to farmed salmon from invasions. Only under certain conditions will you see long-term impacts on natural stocks of wild salmon from escaped Atlantic salmon that is.

Jackson et al, 2013, is another seminal paper that showed that sea lice infestations in salmon farms in Ireland are unlikely to have a major impact on outward migrating wild salmon near salmon farms based on a decade of analysis and is actually a minor contributor to at sea mortality in wild stocks. Skilbrei et al. found that same thing in Norway, for example. This was reconfirmed by Jackson et al in another study in 2014.

I'd like to just talk a little bit about the science part. On the south coast of Newfoundland we have the Conne River showing higher than average returns over the past several years, in spite of finfish farm development over the last decade. Numbers have still not reached the 1980 values where drastic declines in salmon returns in Conne River commenced in the 1970s and 1980s. In fact it was well before salmon farming started during real times of commercial and ceremonial harvesting of Atlantic salmon, both of which has since ceased.

Many of the declines in Atlantic salmon on the East Coast of Canada came in the 1960s and 1970s. It was well before any farming activity commenced and most commercial fisheries were abandoned in 1980s and early 1990s as a result of poor stock statuses and well before salmon farming commenced. We know this and the industry is remiss if they're not mentioning this. In fact the largest declines of wild Atlantic salmon stocks in Scotland, for example, take place in eastern Scotland where 90 per cent of the wild stocks occur and there are hundreds if not thousands of kilometres away from the farms. There are no farms permitted there, whereas very similar declines occur in the mass productive rivers of the western Scotland near farmed salmon. The same sorts of declines occur in areas where there are no farmed salmon in Scotland which has highly productive wild stocks. It's really hard to explain it. Farm salmon activities cannot really be invoked to explain many of these declines throughout most of Atlantic salmon's range nor the lack of recovery in areas where populations of wild salmon are decimated.

Many of the major threats, if you read the Royal Society paper of 2012 looking at biodiversity, aquaculture and so on, are from fisheries of various types, recreational bycatch. In fact our recreational fisheries in Atlantic Canada, I'm not willing to slight and say it's a bad thing, but we kill 1000,000 reproducing adult Atlantic salmon in Atlantic Canada every year through recreational fisheries, at least that many. These are all reproductive animals. Climate shifts and change in ocean productivity according to Royal Society are major factors in habitat destruction by rivers, dams and forestry. Anyhow I'm going to stop with the salmon for now.

I want to talk a little bit about the benthic impacts. We've done some work there and Mr. Sweeney mentioned earlier some of the work that he has done. With our colleagues at DFO, Dr. Anderson and Dr. Hammoutene, we've looked at the benthic impacts of shellfish and finfish farms and tried to characterize that and published a number of papers related to that and we do see occasionally changes in diversity and sites where there may be poor current. What that's allowed us to do is basically show that on hard bottom communities in Newfoundland, which is completely different than anywhere else in the Maritimes, we're able to manage around that by looking at the bottom and so on.

Sea lice control: Dr. Westcott mentioned integrated pest management and I've done some work on this in looking at dispersal of therapeutants for Newfoundland and exposure of Newfoundland lobsters to some of these approved therapeutants. We found through blind studies with DFA and DFO and epidemiologists that it really has no impact whatsoever in the lobsters in Newfoundland. We did this on behalf of the fishermen in Newfoundland and Labrador and in consultation with them, the lobster harvesters that is.

Lastly, on diet development for those who may be concerned about diets — you'll probably about hear this when you are in Nova Scotia and visit Northeast Nutrition — Canadian farmed seafood producers have probably the best track record in terms of efficiency of diets, the least amount of marine oils and proteins, a very high FCR, and an almost a one-to-one ratio of food to flesh.

I'll just close on one thing. All of our farms here in Newfoundland and Labrador are certified to very high scientific standards, as well as social standards and food safety standards, so third party audited standards, and so they are science-based and they rely on the support of the science community to improve production all the time.

I'll leave it at that for now. Thank you.

The Chair: Thank you all for your presentations and we're going right to our questions.

Senator Raine: We had the opportunity to visit the aquaculture health facility in St. Alban's and we've been hearing about the need for testing from the industry. I'm just wondering if there isn't a way that the laboratories being used for research can also be used to do these tests. It doesn't make sense for the industry to have to send samples off to Moncton or somewhere to test for water quality when they need that answer as soon as possible and when we have laboratories at Memorial University and at St. Alban's right here on the Island. Is this jurisdictional battling? Why isn't common sense ruling here?

Mr. Couturier: There are different kinds of testing. Aquatic animal health testing should be ISO 17025 accredited for that, as Dr. Whalen mentioned. While our laboratory at the Fisheries and Marine Institute was ISO 17025 accredited we just weren't getting a lot of the work. We've done actually a lot of the mussel pathology work in terms of testing and so on. We didn't have to send the samples away and a lot of that work was done over a decade. The work is now taken within the division of aquatic health so they have the capacity to do that.

Where the capacity is lacking is in the testing for the food safety part and the water quality part that the shellfish producers mentioned, that's been farmed out to Moncton or other places. We can do the water quality here in Newfoundland and Labrador at a cost to the university, or there are private suppliers that actually are accredited to do that testing, but not on the food safety side.

On the environmental toxicity ones they would have to be shipped away anyway. That's a bit of an issue whether or not the DFA's lab could do that, if they had an extra lab where they would do the natural toxin testing. They don't have the equipment currently there so that would be adding another layer for the shellfish folks that really doesn't exist in this province at the moment, but it's possible if they were to invest in it.

Senator Raine: You lost me on some of those acronyms there because it's very complicated for somebody from the outside to understand the difference between the university research facilities, DFO's research facilities, DFA's research facilities and CFIA's research facilities. Surely to goodness we are looking at a limited number of fish farms and shellfish farms with things to be tested.

Mr. Couturier: It's not that we can't test it. It's just that under the regulatory regimes it has to be tested in a certain way and sometimes the government doesn't want to relinquish that responsibility. They also want to leave that somewhere else and maybe accredited in another province in the case of the shellfish toxin testing.

I'll just leave it at that for this moment. It is possible to do that here. We do have the capacity but whether or not we're permitted by CFIA or DFO or others to do that testing is another question.

Senator Raine: Thank you.

Senator Wells: Thank you, guests, for your presentations.

Mr. Boyce, I wanted to ask you about the projects that you're doing at your facility at the Ocean Science Centre in St. John's. You mentioned trout, salmon, mussels and cod. I understand the salmon and the mussels because they're an active commercial species now.

Can you tell me a bit about the work that you're doing on cod and trout? Is that part of a projection of what might be the good opportunities in the future?

Mr. Boyce: Sure, Senator Wells.

Yes, the salmonid and shellfish industry and the mussel industry, I guess to a degree, have moved forward. Some of the other areas of research at the Ocean Science Centre and I guess the Marine Institute are a little bit in trout. We're doing some with oysters and some with sea cucumbers. We're also doing some with the cleaner fish as well. Our portfolio is diversified.

Way back in the 1990s we were working with flatfish, halibut and flounders, as you're well aware from earlier days, and then we moved to the needs of industry. You have to realize that we move with the industry needs as well. The facility there was put to work with industry to develop a commercial entity. We take our students and put into our projects that have commercial validity. Then we move from the halibut into the cod. As we saw with our cod farms, we can't make any money. The companies, they're not investing, so our research has now moved a little bit away from the cod program into salmon.

We're still doing active salmon work with feeds and we're also developing a tool, the cleaner fish tool, using cunners and lumpfish as a non-therapeutant tool for the needs of industry as well.

On sea cucumbers we're working with Fogo Island Co-op in different holding techniques and feeds for that as well.

We're not doing it a lot right now with trout. We're doing some work with Steelhead in terms of training students in fish physiology, so those are the areas that we're in right now.

Also we have a client that is investing a lot of money into oyster culture. We think there is probably need to redress the four priority species that are currently prioritized by the province and allow some new species to come into our industry.

Senator Wells: I have a very quick follow-up. I don't know who is most suited to answer but whoever is most suited, please do so.

The students that are passing through the aquaculture program are they being snapped up fairly quickly in the Newfoundland industry or in the outside of Newfoundland industry.

Mr. Boyce: I think we can all answer that one.

We haven't really alluded to the number of program from Memorial as a whole. We do have a working document called the "Aquaculture Way Forward" for teaching education and training right now and we're offering for the first time an undergraduate course at the university. We also offer a Masters and also through the Marine Institute we deliver diploma programs and some other courses. Local, national and international students are coming. I don't think there would be a person walking around right now that has a degree or a diploma in aquaculture that can't find work, which is very exciting for us. They're also going into medicine and other fields. It's a stepping stone for some. Not everybody chooses to continue with aquaculture but they go into other fields as well.

Senator Wells: Thanks.

Mr. Couturier, you were about to answer.

Mr. Couturier: I was just going to say we have actually a lot of Newfoundland students that are on the farm, so we do train a lot of fish farms and shellfish farmers on the farm in improving fish husbandry, fish health and all those sorts of things. They obviously are in the industry and they stay in industry.

If our graduate diploma students are from Newfoundland they can get work in Newfoundland if they wish to stay in Newfoundland. Some 100 per cent get employment of interest somewhere on the planet. B.C. has been snapping a lot of those up in the last years. Our Masters of Science in Aquaculture students are all getting jobs as well in research areas. It is all positive from that perspective.

The industry really here on the farm is not in a position to hire a lot of highly qualified trained personnel. For one thing if you're coming from a region and going to Harbour Breton or St. Alban's just finding accommodations is a problem. I mean there aren't spare houses kicking around where a newly hired employee can live. The emphasis really has been on training local people and keeping those local people here although there have been people as you noted earlier this morning coming back, Newfoundlanders come back to work in the industry in those communities.

Senator Wells: Okay, thank you panel.

Senator Munson: Thanks for being here. I have a couple of questions, both different. One may be a bit off the wall.

Doctor, on the current sea lice research you didn't have much time to get into that and fish swim. There's wild fish and there's aquaculture. What's the prevalence rate between wild salmon and fish that are in these pens? Because the rate of washed out there, if you hear about sea lice there is a panic and it's immediately associated with aquaculture. I'd just like to know that number if somebody has that number.

In your research, what is your optimum goal? What are you trying to get at? These are fine lofty goals but in layperson's terms I'd like to hear about where you hope this research would lead.

Dr. Westcott: I don't have a number to be able to quantify the prevalence rate. Of course that is an area of considerable debate certainly but I guess the main thing I would say to that point is when it comes to where the sea lice come from, when we take our salmon from the hatcheries here they are actually sea lice free. There are no lice on them at that point when they leave the hatchery.

When they go in the sea cages, that's when they become infected with the sea lice once they're out into the ocean. We know sea lice can come from wild sources. It can be wild fish migrating through. It could be other reservoirs, other hosts that can harbour the sea lice as well. I wouldn't say anybody has a scientific number to actually quantify that one.

With respect to research, my goal then is to work with industry to add to the box of tools they can use to mitigate and control sea lice. We've relied quite heavily in the past on chemical means of control in conjunction with our biological means and the physical things we were able to do. There are two main issues when it comes to relying on chemicals as I see them. One of them being the fact that depending on the country you actually grow salmon in the chemo-therapeutants you actually have registered for use and you actually have access to can be quite limited. That is the case in Canada. We have a very limited number of therapeutants available that we can actually avail of. In that respect we have to develop other means to mitigate and control sea lice as well. As Mr. Boyce pointed out, cleaner fish is something that's really of interest to me. I've moved my own research from the chemical side of things down to the more environmentally friendly green types of technologies that we can work on developing to aid in the long-term sustainability of our industry.

I think cleaner fish have a real benefit here. They have been proven in other countries. They're actually growing them quite successfully in large commercial hatcheries now in other countries as well. We know that that is an option and that's where I'd like to take my research.

There's interest from the industry here to do that. There's interest from others in academia to do that. There's interest from the provincial government to do that as well, so that's where I hope my research takes me. It's a great opportunity to get some other graduate students involved as well, to train some highly qualified personnel, to get them working in industry in the area of fish health as well.

I hope I answered your question.

Senator Munson: Yes, thank you for that.

Mr. Boyce, when you brought up Mr. Risley's name I was thinking back because an old friend of mine worked with Ocean Nutrition. We've been hearing so much about salmon, and what did I do this morning? I popped my fish pill like I do every day. The fish pill I have comes from Webber because that comes from Ocean Nutrition, and Webber is not a Canadian company.

They had a difficult time at Ocean Nutrition to get certification through Health Canada. It took forever and they began to sell their pills elsewhere around the world until Health Canada said, "Oh, they must be good. Nobody else is dying from these things." It took a long time. It's what we've been hearing here with this regulation and so on. Of course you have to make sure things are safe.

Is there any association with salmon? Some 20 years ago nobody was taking a fish pills and now most of us are taking them.

Senator Raine: Seal.

Senator Munson: It's a mixture of everything but I like salmon pills.

In the aquaculture business is there some research or things going on, or is it happening that these fish are being used for our Omega 3s if we don't want to eat salmon? Is there a potential for that to be even bigger and greater through the aquaculture industry? I never thought until this moment that perhaps there is something there.

Mr. Boyce: A professor at Memorial University, Fereidoon Shahidi, has done a lot of work in this area but again seal is an area as well.

I can't comment on Mr. Risley and his business per se. I know he became quite wealthy when he sold it. He's done very well for himself. I would say I do take oil tablets every day, seal and/or cod and/or salmon. I think there's a health benefit there.

In terms of your direct question there is limited research ongoing directly toward that right now at Memorial that I am aware of. I don't know if you guys know of any.

Mr. Couturier: There are actually three or four companies on the globe now that produce Omega 3 extracts from mussels. They're mostly from New Zealand but we actually have companies in Newfoundland looking at that for undersized mussels and extracting some of the nutritional aspects, the nutraceuticals out of them. Mussels themselves also have very high levels of EPA and DHA which are essential for humans. We have a centre for marine biotech and bioprocessing at the Fisheries and Marine Institute. We are looking at value-added compounds from processing fish waste including salmon waste and extracting oils from farm salmon and wild fish and putting them into diet supplements or even medical applications.

Senator Munson: Those oils are coming from everywhere. I think there's a plant in Port Hawkesbury and plants in other places.

So you're saying that those fish pills and the oil comes from two different sources?

Mr. Couturier: Fish oils for the pills and supplements can come from a variety of sources such as seal and different sources of salmon, wild salmon and trimmings from salmon.

Senator Munson: Aquaculture salmon.

Mr. Couturier: Aquaculture salmon, wild salmon and mussels. There is a variety of natural sources of nutraceutical type pills, yes.

Senator Munson: Thank you.

Senator Lovelace Nicholas: Welcome.

I'm interested in the cod aquaculture. Did you say that you started one and it's successful?

Mr. Boyce: We started multiple farms from a research and development stage in the early 1990s. We had a project called "Egg to Plate" and then we moved into the raising of these fish at our research facility. We then moved from the research facility, fish the size of this pen, we moved them to cage sites at various locations on the south coast and in Bay Bulls.

In the course of doing research for about eight years with various industrial partners and various allotments of money from various sources, whether it be NSERC, CIHR, GNOs in Canada or ACOA, we found that we could grow the fish and sell the fish. At the end of the day the companies that were investing could not make money.

Senator Lovelace Nicholas: I see.

Mr. Boyce: I have pictures here of a gentleman holding a fish. We did the full cycle. We still have cod broodstock but at the end of the day if the companies can't make money they're not going to invest.

There's money in salmon aquaculture right now and companies are heavily investing. When they came to Newfoundland a number of years ago, we had announcements of $250 million investments. That's the type of investment that's needed to make these industries grow. If the CEOs or the presidents of these companies feel that their return on investment is better toward salmon than cod right now that's their choice. It's not that we can't grow them. We can't make money right now when we're competing globally for white flesh fish that is selling at a lower price.

Senator Lovelace Nicholas: Would this include other countries?

Mr. Boyce: Other countries, certainly. There is more money in cod skins in Iceland now than the flesh.

To go back to your point, senator, there's probably more money in some of these oils than there is actually in the flesh as well.

Senator Lovelace Nicholas: Interesting.

I have one more question. I'm not sure which one of you brought it up but aquaculture training was mentioned. Are any First Nations people taking advantage of these programs?

Mr. Couturier: We have done a fair amount of training with First Nations in Conne River here in Newfoundland and Labrador for on-the-farm harvesting as well as boat skills in fish harvesting. They have a whole bunch of crab boats. We've trained a lot of the folks in that area, both in the fishing but also in the operations of the vessels, the seamanship and all that kind of stuff. We've also done some training of First Nations in collaboration with Collège communautaire in Caraquet in the past in Gaspé and places like that. It was small scale but we've done it certainly, yes.

Senator Lovelace Nicholas: Thank you.

Senator Poirier: I'm not sure that I'm looking for feedback in the right place but I'm going to try. Maybe it should have been asked earlier to other groups.

If I'm talking to a fisherman that fishes lobster, tuna, scallops or cra he's called a fisherman. If I talk to a farmer that's raising cattle or poultry or pork, he's a farmer. We've had many different groups that have had come to us and feel that we need to really work and encourage the federal government to come up with an aquaculture act because there's no wording of aquaculture in the Fisheries Act.

My question is this: Is aquaculture the right place to be parked in fisheries? We're the Senate fisheries and we're studying it but if I ask somebody that's in aquaculture whether they are a farmer or a fisher it depends on who you speak to. Some feel that because they're dealing with water and something in water they're looking at the fishing industry but others feel that it is a farming industry. It's complicated.

I'm not 100 per cent sure, but if I remember right I think in the first years when I was a member of the legislative assembly in New Brunswick they didn't even actually become a department of agriculture and aquaculture together. If they put them together back maybe it's because there's a similarity.

Would it help or what are your thoughts on that? Is the aquaculture business in the right branch? Should we be with fisheries or should we be on the agriculture side?

Mr. Couturier: Who wants to answer that?

Mr. Boyce: I'm going to give a couple of comments.

When the moratorium came in in 1992 I was at Memorial and I left for a year and we went cod ranching. We set up 12 farms around rural Newfoundland and bought some fish from National Research or NAT Sea at the time. We had 12 farms called cod ranching. We held the fish for a period of three months and doubled their weight. We sold our fish outside the traditional trap fishery days in June and July and we got a better price.

What I'm getting at is the training of these people. We took people with a skillset, traditional fishery people I call them. I came from a historic fishing community of Bonavista and grew up in a boat, so to speak, but we do need an aquaculture act. Aquaculture is the farming most times in water and I think there is a synergy between the two groups of the fishery people and the aquaculture people.

Mr. Couturier: Aquaculture is farming and as you've heard by all the witnesses today, I mean it is the controlled production of aquatic animals or plants and all the agricultural principles that you have on land apply to the aquatic environment. Should it be based in agriculture or in fisheries? I would say you can have an Aquaculture Act that divides the responsibility for that with the developmental responsibility mandate, and so on, following within agriculture and regulatory responsibility from a federal level falling within Fisheries and Oceans. That's kind of a two- sided answer. You can have both involved in it, but you can certainly have two departments being involved in regulating the industry.

Mr. Boyce: Back in 1997, I think, in Newfoundland our premier was Brian Tobin and he announced the departmental change from the Department of Fisheries to the Department of Fisheries and Aquaculture. I think personally back then we were happy to be recognized in 1997.

Senator Poirier: Can I have one more question?

The Chair: Go ahead.

Senator Poirier: It has to do with the sea lice. We talk about the problem of sea lice once the salmon is put in the pens and it's out there. Is sea lice a problem on other fish? We don't seem to hear about it. We just seem to hear about it on salmon. Is sea lice a problem on other fish out there?

Dr. Westcott: Well sea lice can be found on salmon. They can be found on trout. They've been found on halibut. They can be found on herring. They can be found on a number of species. I guess it all depends on the species of sea lice.

In Atlantic Canada we have two species that we really look out for. One of those is a species that we call Leps; that's just the short name we use. Those are the ones that are predominantly found on Atlantic salmon on the East Coast of Canada.

If you go to the west coast you get a bit of a different picture. They have a different species of Lep but they have other species as well. They have a Caligus species, for example.

There are over 200 different species of sea lice. There are two main species, Leps and Caligus. Within those there are several hundred species of sea lice so they can certainly be found on other fish but some of those sea lice are quite host specific. Those Leps, for example, really prefer Atlantic salmon over different species of salmon.

Senator Poirier: Is there a reason why we have to work to find a way to remove it or to eliminate it that it's not on the salmon, but we don't seem to be talking about doing the same thing of removing sea lice from other fish?

Dr. Westcott: I think it's not an issue of removing. I don't think it's ever going to be a situation where we have no sea lice in the industry. I think others will probably agree with me there because it is a naturally occurring parasite. It's something that just has to be managed and mitigated. It's not that they are not found on other species. The majority of the work and the research are focused in on those commercially valuable species, I would say.

I don't know if anybody has anything to add to that.

Mr. Couturier: Sometimes when recreational fishers get a wild salmon entering the river one of the indicators of its freshness is if it is loaded with sea lice. Adult salmon can certain tolerate great numbers of sea lice. Those sea lice drop off when the salmon go up the river to spawn. A lot of times when you catch them in the river you won't see sea lice on them but when they're in the ocean they do have sea lice.

The issue of farming and sea lice is that they are in a somewhat closed containment in these cages and add up to one to two per cent of the volume. They're able to infect each other with sea lice. We do need some measure to be able to control that. That probably doesn't happen as much in nature in the wild although wild fish if all kinds, as Dr. Westcott mentioned, can be completely covered in sea lice naturally.

Senator McInnis: We've heard a lot of negative stuff today about regulations and so on, but I continue to read and hear about the dollars that the federal government is putting into research. To quote John Risley, I guess they're seeing it as an "opportunity rather than an expense."

The Sustainable Aquaculture Program is another one that was announced in February. I think it was $60 million or something like that. Comment on that, if you would. Before you do, from listening to you — and I don't doubt what you say — on Thursday we will be in Nova Scotia having hearings and I rather suspect we will hear a different story with respect to how lobsters flourish next to pens and other shellfish. They'll say that's absolutely incorrect and there will be marine biologists and scientists who will say that. So as a committee we'll go back to Ottawa and say, "Who is smoking what? What's going on here? Who is telling the truth?"

We hear about sea lice. Mr. Green you hold up the annual Aquaculture Association of Canada's research and development wherein it says that Slice, which was the drug used to control lice, is no longer effective. In fact no drug is effective. That's stated in there apparently. Pfizer is trying to develop some drug to cure it.

We've got that problem. We've got the perception if not reality of ISA that we are told by federal Health that humans can eat fish that have that virus but fish cannot as it will kill them.

So where are we? Where does the truth lie? There is no question there is a tremendous future both for the economic benefits and for the nourishment of the world in having aquacultures. What do we write down at the end of this, because we are trying to come back with reality?

Dr. Westcott: I will just make a quick statement on the chemotherapeutant piece.

I think it is incorrect to say that there is nothing available that works on sea lice right now. That is not exactly the case. You are true in your statement to say that Slice is not working, that is, in certain places of the world. To my knowledge and I am sure the veterinarians of the province could confirm this, but it is still effective in Newfoundland right now and it is still used in Newfoundland.

When it comes to talking about these chemotherapeutants in resistance development people say it just does not work anymore. We are talking about resistance development. Essentially the whole key ensuring that resistance does not occur to the limited number of chemotherapeutants that we have available for use in Canada right now and that other tools are available. It is this integrated pest management that Mr. Couturier and I spoke of. It is having a tool box ready for those farmers to be able to avail of whenever they need to.

In the case of New Brunswick, for example, back when I started doing my graduate work, Slice was used by every farm, multiple times a year, very effectively. Through the course of working in the industry in New Brunswick over 10 years and doing those bioassays that I spoke of, we saw changes in sensitivity. It is not necessarily a bad thing that occurred; it is just kind of a natural evolution of how a drug works over time.

We have the situation where we treat fish and remove the sea lice quite successfully. Over time we find, just like us taking antibiotics, that resistance develops after a while because we have those bugs that we do not kill every time we take a course of antibiotics. Of course the bugs that survive that treatment will then go on to reproduce and proliferate. Because sea lice can go through their lifecycle so quickly you can imagine how quickly that happens. It is not the case that it is all doom and gloom.

For farmers it is having access to other therapies that they can actually avail themselves of. In Canada right now there is one in-feed treatment that is registered for use. Other in-feed treatments are available out there. There are other bath treatments that are used quite successfully in Europe and other places.

This is not to say that resistance has not developed in those therapeutants over time as well because that is the case if you delve through the literature. I guess the thing here is for farmers to actually have access to those therapeutants that we know work in other countries, that have worked in the past and that chances are the sea lice here have never been exposed to. There is quite a good potential of actually being successful here but farmers and veterinarians struggle with the fact that they are very limited in what they can use right now.

That is where research like Mr. Boyce and I are proposing to do with the cunners. The Newfoundland Aquaculture Association recognizes this as well as other countries. We need to have other tools that we can use in that toolbox.

Senator McInnis: I agree. I was quoting the report that was put out by the Aquaculture Association of Canada. They also mention in there that they are attempting to use cunners and blue mussel. I was quoting the written report that people have read. It is not me making the comment, but I am trying to the reality and the truth. I am not suggesting that anyone on this panel is saying anything that is untrue. You sound quite believable to me. My point is that we are going to hear a different story.

The Chair: Anything to add?

Mr. Couturier: Yes. On the sea lice and on the therapeutants Dr. Westcott is quite right. The best approach for farmed animals is to use an integrated pest management strategy that involves a suite of therapeutants as well as access to biological and mechanical controls.

One of the controls that we have access to is not really a therapeutant. It is hydrogen peroxide. Hydrogen peroxide is a very innocuous substance in the marine environment. It lasts seconds, if not less. It knocks the lice off and then you collect the lice in a whale boat and kill them. That can be a very effective method of doing it. You need infrastructure to treat them that way but it is used quite commonly in other parts of the world.

On the lobsters I would not say it is a matter of who is telling the truth and who is not. It is like a court of law on which I am sure you are familiar with. The truth is somewhere in the middle. The reality is if you have sites that are poorly sited and you may have organic deposition that will bother some lobsters. That is true and that has been demonstrated for a long time all over the world. If you have sites that are well managed and well sited you will not see that many lobsters displaced. In fact you might actually see an increase because what you are getting from a salmon or mussel farm essentially is drop-off, feces, extra food pellets or some other organic matter. Lobsters do not eat the pellets directly. Certainly other organisms around it will start to decompose that organic matter. That is good food for lobsters.

We see increases in shrimp in B.C. They have that nice little a striped shrimp, spring prawn, or whatever they call it there in B.C. It is certainly nice anyway.

The fishery in Scotland has been using these therapeutants in shallow waters like Bay of Fundy waters for 30 years and has not seen one change in the fisheries of their spot prawns or their equivalent of lobsters in their area. They do not have big fisheries in those areas but they have not seen a change.

All I am saying is that farms can have an impact on different types of lobsters whether it is berried females or so on. We interviewed fishermen here in Poole's Cove and Belleoram. They told us they were glad to see farms because then the fish harvesters from one community would not go and poach the lobsters from another community. There was 24/7 surveillance there to see who was actually poaching them. I mean there are benefits.

The Chair: Thank you to our panelists. As usual it is another aspect of the industry that we're hearing from. We've heard a lot today and it's a lot of information and you certainly added to it. I want to thank you for your time this evening and wish you all the best.

Senators, we are now pleased to welcome Mr. Jim Bennett, Member of the Newfoundland and Labrador House of Assembly for the District of St. Barbe, and for those who haven't visited it's a beautiful part of our province on the northern peninsula. Mr. Don Hutchens is President of the Salmonid Council of Newfoundland and Labrador, and Mr. Tony Tuck is Fishing Committee Chair of the Newfoundland and Labrador Outfitters Association.

On behalf of the members of the committee, I thank you for taking the time to be with us here today. We will begin with a statement from Mr. Bennett, followed by a statement from Mr. Hutchens and Mr. Tuck. If you'd like to say a few words, senators will follow with some questions.

Mr. Bennett, the floor is yours.

Jim Bennett, member of the House of Assembly for St. Barbe, Newfoundland and Labrador House of Assembly: Thank you very much. As Senator Manning stated, I am the member of the House of Assembly for St. Barbe District, and I am currently the justice critic and Chair of the Province of Public Accounts Committee. Prior to that, I was fisheries critic for two years and also education critic and innovation business and rural development critic. We had some by- elections and we were fortunate; we were able to spread the work a little bit better.

I've had a lifelong interest in aquaculture, going on fish farms, fish-out places and so on. I've lived in four provinces: Alberta for eight years, Ontario for eleven, Nova Scotia for a year and for the rest of the time I won't tell you how many years in Newfoundland and Labrador. When I came back a dozen years ago, my career before this one — and I was elected two and a half years ago — was as a lawyer. I practised law in Newfoundland and Labrador and also Ontario for half a dozen years, so I'm a member of the bar of both provinces. I graduated from University of Windsor and also University of Detroit Mercy and Memorial University here in Newfoundland.

Finfish aquaculture or growing trout really has always been a life-long interest for me because I would go on fish out farms and you could catch them, you could put them back and you could pretty much do what you wanted. When I came back a dozen years ago, I was really keen to have a little fish farm myself.

I live in Daniel's Harbour, which is Great Northern Peninsula, 240 people, one lawyer when I'm home; no lawyers when I'm not home. In any event, I've followed up on the regulations and did quite a bit of reading on fish-to-feed ratios, how much water you needed and what size you needed. I learned quite a bit about it, and then I had some discussions with the province about the regulations in 2002, 2003. The regulations were very stringent as to what you needed to do to have a fish farm. After I studied and learned the regulations I thought that would be something to do one of these days if I ever get around to retiring. It seemed like a lot of work and a lot of regulations. After I was elected I was fisheries critic and I am also an angler.

Aquaculture is a smaller side of the fisheries, approximately 10 to 15 per cent of the value. The growing side is really an important side and finfish aquaculture. There's no doubt in my mind that finfish aquaculture is here to stay. It's not a matter of if we do it. It's a matter of how we do it best.

I won't speak on the shellfish sector because I think that that's being well done and I think we have set a standard really for the world in shellfish. In July of 2012 we had the first outbreak of infectious salmon anemia and being a lawyer that made me really hit the books. I had to learn, study up and read all of this that I possibly could.

The first thing that I read was the report of the British Columbia All-Party Committee on finfish aquaculture in British Columbia. It's quite lengthy, very well done and I thought if all three parties are working together, it's probably going to be relatively neutral and good on facts.

I also read a study from Simon Fraser University as to threshold prices and that people will pay more for finfish aquaculture that's grown in close containment and what is the premium that the consumer will pay, because that seemed to be the way we needed to go.

I've also read the Cohen report and pretty much anything else I could find. Also the reports on the finfish aquaculture in Chile and the collapse of the salmon aquaculture industry in Chile with infectious salmon anemia, having been introduced there in fish eggs from Norway; so it can be introduced from tame fish into the wild. It also exists in the wild.

Since then we've had five ISA outbreaks in this province and the CFIA has paid over $30 million in compensation. I have a real concern that if the CFIA stops providing compensation for fish diseases, the industry is finished. It is absolutely out of business; it can't possibly continue without this support.

It doesn't seem like the CFIA — the mandate isn't like mad cow's disease or bovine spongiform encephalitis because we're continually going to have ISA; it's a known risk. We will always have ISA if we have to fish in the ocean.

Another big concern is the interaction with sea lice for the young salmon that are leaving and the return rates on small salmon, when small salmon go to sea. If they come into contact with the larger farmed fish, then they're exposed to sea lice. Maybe one or two sea lice on a smolt leaving would weaken the little fish, so a predator would get the fish and the returns would tend to be lower than higher. Those are concerns that I have.

The industry right now has taken off really quickly. I believe that we need to find a way to have a sustainability on an environmental basis and sustainability on an economical basis, and maintain and grow the industry. One part of the picture that we're missing is that we don't have really good data as to the actual cost inputs to grow fish in closed containment versus in the ocean. We know that electricity costs will be higher with recirculating the water and we know that there would be higher labour costs, which is not necessarily bad if you're in a region that needs the employment. I don't agree with the argument that we will lose a competitive advantage by not being able to use the ocean because we have other competitive advantages here. I think if we could sell a pristine product Canada wide, it would really be the way to the future.

I think we need to systematically move toward a closed containment product, whether that's with tanks in the ocean whereby you would take advantage of the temperature of the water for sustaining the water temperature, or whether it's on land where the costs will be higher, but I think we don't really have the data.

At this point, with the continued ISA outbreaks and the sea lice issue, the industry is really exposed to financial difficulties and unnecessary risks and the potential for consumer boycotts that are already coming. We know about boycotts. I'm reading about the European seal regime because we know what can happen with boycotts.

I should probably give up the floor to somebody else.

The Chair: Thank you, Mr. Bennett.

Mr. Tuck?

Mr. Tuck: Thank you very much. I am very pleased to be able to address you this afternoon.

I'm here today representing the Newfoundland and Labrador Outfitter's Association. Personally I've been owner/ operator of a hunting and fishing outfitting business for the past 22 years. That is my prime method of living; that's how I earn my living and I have for quite a while.

The Newfoundland and Labrador Outfitters Association is comprised of a fairly large number of small and medium size businesses. I think currently probably 120 to 130 exist in the province, so there is a significant number. These people are hard-working entrepreneurs. They're business people and they understand the trials and the rewards of operating a successful business.

By no means are we anti-business. Certainly we support an environmentally sound and self-sustaining aquaculture industry in the province of Newfoundland. Their industry, like ours, is based on rural Newfoundland. I think that's important. That's the area where there is much need for economic activity and jobs, as this is the most challenged portion of the province.

The Newfoundland and Labrador outfitting industry does recognize that we are totally dependent on our natural resources. Without healthy sustainable fish and wildlife our businesses are totally worthless as they have nothing to offer the travelling sport's person that we seek to fill our many lodges. At the present time there exists a growing concern amongst our industry members that a real danger to the health of our wild fish stocks is pending from the practice of open sea cage aquaculture, growing Atlantic salmon and steelhead in the province, particularly the south coast of the island. In effect, the danger may already be well advanced. There has been concern raised by DFO that wild Atlantic salmon stocks are on a significant decline in Newfoundland and Labrador's south coast region. It must be noted that this is the only region of this province where such concern has been registered by DFO.

In addition, the Committee on the Status of Endangered Wildlife in Canada, otherwise known as COSEWIC, has recently recommended to the federal Minister of Fisheries that Newfoundland and Labrador's south coast wild salmon stocks be declared as endangered. One of their main reasons for this recommendation was the possible and likely negative effects of finfish aquaculture activities on the south coast with wild Atlantic salmon. If the fears of COSEWIC are realized, the south coast region will continue to have declining wild trout and salmon runs, which will eventually destroy sport fishing and the commercial lodges that vitally depend on these stocks to ensure a high quality adventure for non-resident sports.

If the COSEWIC recommendation of an endangered listing for the south coast salmon stock is accepted by the Canadian government by virtue of the Species at Risk Act, sport fishing will immediately come to an end in that region. Obviously any sport fishing activities will cease. There will be no lodges operating, whether they be commercial or corporate, there will be no individuals allowed to sport fish.

In defence of their enterprises, the aquaculture industry declares there is no proof that declining south coast wild salmon stocks are in any way fuelled by their open sea net practice. In actual fact, they are correct, but only because there has been very minimal effort to study and establish the relationship between the two.

We agree that an acceptable assessment of the relationship between the Newfoundland and Labrador south coast wild Atlantic salmon resource and the growing aquaculture industry of that region does not currently exist. However, the facts of the situation are this: aquaculture salmon escapees are being reported as showing up in increasing numbers in many of our south coast rivers, threatening the genetic strength of the wild resource due to possible interbreeding. The incidences of disease within the fish farms, such as infectious salmon anemia, or ISA, have become common occurrence, posing a deadly threat to all fish that pass near the open sea cages. There are many claims on the West Coast of North America of the high densities of sea lice near finfish grow-out cages, which have very negative effects on immature wild salmon as they migrate from the home rivers to mature in the ocean. To believe the situation to be any different on the East Coast, I think, would be extremely naive.

Representatives of huge aquaculture corporations over the world have declared finfish aquaculture cannot occur in bays where there are wild salmon rivers because the wild fish will be destroyed. Despite claims by the aquaculture industry of this province that their industry is regulated in the highest degree, protecting both the health and sustainability of farmed fish and their wild counterparts, the Auditor General of Newfoundland recently claimed many instances of neglect within regulations affecting aquaculture in Newfoundland, as well as identifying associated inaction by the provincial government.

It is a common belief among commercial fishers of the coastal regions of Atlantic Canada that the many chemicals used within the aquaculture industry are having a devastating effect on shellfish and other ocean species adjacent to the fish cages. Reports abound of continued usage of banned chemicals by fish farms, despite legal charges and fines being levied.

The coincidence of the growth of the finfish aquaculture industry in the Bay d'Espoir area of Newfoundland and the rapid decline of the Conne River wild Atlantic salmon run is much too alarming to ignore. No other major river system in this province has seen its wild salmon run decline so drastically. I think that is a very, very important point that cannot be forgotten.

Many outfitting operators of this province who originally thought farming salmon and trout would provide a great rural economic generator currently have a number of common opinions about that industry. Like other Newfoundland and Labrador residents, outfitters are amazed by the huge compensations given to fish farms to offset losses because of disease. I'm just curious. What would happen if outfitter lodges are forced to close? Where will the compensation come from then or will there be any, or is this just an acceptable cost of doing business with the aquaculture industry?

The Canadian government through DFO, the managers of our wild fish stocks, has committed gross negligence in its failure to investigate the possible effects of aquaculture operations on wild trout and salmon stocks. In our opinion, the Department of Fisheries and Oceans is in a severe situation of conflict of interest in also being assigned responsibility for the aquaculture industry.

A sincere effort must be made to clean up the finfish aquaculture industry, including serious consideration towards supporting land based aquaculture which is continuing to show that fish farming can be done in an environmentally and sustainable manner.

Thank you very much.

Mr. Chair: Thank you, Mr. Tuck.

Mr. Hutchens?

Donald L. Hutchens, President, Salmonid Council of Newfoundland and Labrador (SCNL): Thank you, senator. In a previous life I was a chief engineer who planned, designed, engineered and constructed the fibre optics and network across Newfoundland, so if you have any questions about the facilities on the south coast and how they might get there, I can answer those at a later time.

But I'm here today as President of the Salmonid Council of Newfoundland and Labrador. We consist of eight affiliate organizations that are all environmental stewardship groups of various watersheds and river areas in Newfoundland. There's SAEN in St. John's, SPAWN in Corner Brook and ERMA on the Exploits Valley. The outfitters are also a member of council. Our purpose is to protect, enhance and encourage the wide management of salmonids, so the wild Atlantic salmon and trout in Newfoundland and Labrador.

We have been in existence since 1986 and we have put considerable effort into trying to protect our wild Atlantic salmon. Newfoundland constitutes 50 per cent of what's remaining of wild Atlantic salmon in North America. We're greater than Nova Scotia, New Brunswick, P.E.I. and Quebec all put together. We have more fishermen, we have more rivers, we have more licences issued and we have more fish returning. We're the last bastion for wild Atlantic salmon.

There are just a few points that I want to bring to your attention. The first one is that wherever ocean finfish aquaculture farms have been placed in close proximity of rivers with wild salmon, the population of those rivers has been decimated. It has happened in Conne River down in Bay d'Espoir. It has happened in Nova Scotia. IOt happened in New Brunswick. It has happened in Maine. It has happened around the world, everywhere. It cannot be denied that finfish farms in the ocean, when placed in close proximity of wild salmon populations, the wild population gets decimated. It's happened in B.C. with Pacific salmon.

Recently there's been a published report by Judge Cohen who spent three years and $15 million studying the impact of fish farms on Pacific salmon. If you substituted the words "Atlantic salmon" for "Pacific salmon" in that report the whole report could be directly applicable to Eastern Canada. We don't need to do another commission, just read that one. See what he says about the impact of finfish farming and what impacts it has on wild salmon populations.

If I can't convince you of that fact, we heard Mr. Couturier earlier trying to leave you with the opinion that finfish farms have no impact. I don't know where or what he's reading. That's a fundamental issue here. You either believe it or you don't. The question is, how is it having an impact? I mean, there are other things impacting the state of salmon stocks in North America. If I combine all of the other factors together the order of magnitude difference that it has versus having finfish farms placed close to the rivers is orders of magnitude, orders of magnitude in the difference.

The Conne River went from 15,000 I think it was, down to a low of 400. Last year there was 23 apparently went through the counter. We don't know if these were wild fish, farm fish or hybrids. I mean, look at the magnitude where that river is being decimated. Our provincial government has a vision put out to vision 2018, a new five-year plan. They want to triple the number of farms to try to make it viable on the south coast. They're proposing to go from Fortune Bay to Grey River. There will be 29 more major salmon rivers, scheduled salmon rivers that will be destroyed if that's allowed to happen. Another 29, not just the two that we have but another 29 and possibly beyond that because with the number of escapes as we've seen last year, like escaped salmon can show up anywhere and we don't know what the impacts are.

The second point, I spent over 35 years studying and practising management science. There's something that I learned in those studies and that was you don't put conflicting objectives under the responsibility of one person. It doesn't work. You can't suck and blow at the same time. You can't have the responsibility for aquaculture, finfish aquaculture, in the same ministry as wild fish. There's a conflict.

As I said in point No. 1, they can't co-exist for some reason. They have got to be separated. You have to take aquaculture out of the Department of Fisheries in order to succeed. We can see it happening here; resources are being applied to the aquaculture side of DFO and being stripped out of wild salmon. Every year as somebody retires from DFO, the position is not replaced. They're cutting back, cutting back, cutting back. In fact, it's so bad that when I go to visit DFO now, if they offer me a cup of coffee, I have to say no because if I do accept it, the individual will be paying for that cup of coffee out of his own pocket. That's how tight the funds are here at the White Hills.

We had a Salmon Advisory Committee meeting in Labrador two years ago. They held it way out in the ski club because I guess they either got it for nothing or very cheap and they passed around a hat so they could collect a few dollars to buy pizzas for lunch. They actually passed around the hat, so that's how tight the funds are in DFO in the salmon branch here in Newfoundland. I mean, it's ridiculous.

Ask what science has been done to look at the interaction between farming and wild stocks. What new studies have been produced by DFO scientists? What scientific reports have been issued in the last five years or ten years? I can't think of any being issued by DFO. So they're not doing anything to try and find out what's causing the problem. Why? It was because the director general has a conflict. He's there trying to promote aquaculture and so you cannot continue this with any success.

Council is not against aquaculture. I mean we have no problem with the shellfish side of it. Things seem to be going reasonably well. As long as there are no environmental issues we seem to be perfectly happy with what's taking place there.

The only issue I know of is the fact there doesn't seem to be any mechanism in place to clean up the mess left behind when operators go bankrupt. Miller Passage on the south coast is an example. An operator went bankrupt and the mess is still there in the waters. There don't seem to be any performance bonds in place. I mean, what will happen if one of these finfish farms goes bankrupt on the south coast? Who will clean up the mess that's left behind? Are there any performance bonds in place to do that or will this be left to the public purses to clean up? We the general public will be responsible for cleaning up their mess as they pocket their profits and walk away.

Point No. 3: Two years ago the Newfoundland Auditor General's report identified numerous problems and flaws with the regulation of the ocean based finfish farming in Newfoundland south coast. Last week he issued an update to his report identifying what had been done on his recommendations. I haven't read the report, but I'm lead to understand that the worst performer was the aquaculture industry on the south coast of Newfoundland. They had the worst record of following any of the recommendations of the Auditor General. So while the industry tries to promote itself as having the best, the leading edge, the most advanced regulations and practices in the industry, how did we end up with seven outbreaks of ISA in the last couple of years? Somebody is not following the practices.

I've attached Appendix A which lists a whole bunch of observances of what's happening on the south coast. If any of these are true, let alone God be that they all be true, there is a massive amount of abuse of the regulations, practices and standards taking place down there, everything from non-compliance of reporting of losses to just blatant mispractice. This industry has serious problems.

Point No. 4: This industry purports to be viable and sustainable and yet the only way they exist is by mass infusions of government money. We have three major players on the south coast. One of those three has filed for bankruptcy protection and another one has pulled out its processing equipment saying he's not going to return it until the industry becomes more viable. Does this sound like an industry that's viable and sustainable? It doesn't to me.

I was told by a member of the South Coast Development Committee last year here in Gander—we met to go over the provincial vision—that approximately a year or year and a half ago everybody who wanted to be employed was employed on the south coast. In fact, she said there's lots of talk down there where they want to bring in foreign temporary workers to work in the plants. Now, is this something we want to do? Do we want to destroy another 29 salmon rivers in Newfoundland so that we can bring in foreign workers for low level jobs? I don't think that is a good plan. I don't think that's a viable and sustainable industry.

In summary, one, no more fish farms, finfish farms in the ocean base near rivers that have sustainable runs of wild Atlantic salmon. DFO's own scientists use the guidelines of 25 kilometres. For some reason, DFO administration, the management, ignored their science and allowed them to put them in Bay d'Espoir right at the mouth of Conne River. Other jurisdictions in Norway, for example, have even gone as far as saying they shouldn't be within 300 kilometres — but let's go with 25 and stick to that.

Let's make sure that the aquaculture is taken away from the Department of Fisheries and Oceans and let the Minister of the Department of Fisheries and Oceans live up to her responsibilities to protect and manage the wild Atlantic salmon stocks in Eastern Canada. She needs more resources, more money and particularly more science. We don't have the science.

I spent three days in the Comfort Inn in a large room with 50 scientists, mostly, trying to figure out why designated area 4, the south coast of Newfoundland, was in the condition it was. The whole objective of that meeting was to come up with recommendations as to how the stocks could rebuild on the south coast. We spent three days, scientists from Memorial, ASF, retired scientists from DFO, DFO, and other interested parties, and the only thing that they could come up with is that we don't have enough science to make any recommendations. We need more science. Without that, we're going nowhere; we're just blind in the snow storm.

Thank you ladies and gentlemen.

The Chair: Thank you, Mr. Hutchens.

Our first questions are from Senator Wells.

Senator Wells: Thank you, chair and thank you, gentlemen, for your presentations.

Mr. Hutchens and Mr. Bennett, you both referenced the Cohen report. I just have a couple of comments to make. I'm not a witness here. I'm here to question you, but I'm also here to question some of the things that you say.

You said "Oh, the Cohen inquiry said this," and this supports some of your assertions. In 2009, there were 1.3 million salmon returns to the Fraser River. That's a fact. The Cohen report was delivered after 18 months on October 31, 2012. The following year, after 2009 where they had the lowest returns, they had the highest returns in history. That wasn't a projection; that's the highest returns that they've had actually in the 100 years that they have been calculating or counting it — that's 30 million returns. Of course, that had nothing to do with the Cohen report; that doesn't bring fish back into the river. So 30 million was the highest they've had in 100 years, in 2014 they are projecting 72 million returns to the Fraser River.

I think given the circumstance in the Fraser River, anchored by the Cohen inquiry, it doesn't hold water to some of the assertions you're making about the effect of aquaculture and returns to Newfoundland and Labrador rivers. So one of my questions is this: The rivers in areas where there's no aquaculture activity at all and let's look at the Labrador rivers and perhaps the two primary rivers, Paradise River and Eagle River where there's been excellent returns, how do you square the concept of salmonid aquaculture affecting returns on the river when the facts and the science and the history don't support it?

Mr. Hutchens: I'm not sure I understand your question. You're talking about the Eagle River?

Senator Wells: Well just in general.

And you've also referenced Mr. Couturier saying earlier about the incidents on the east coast of Scotland where there are no salmon farms and they had decreases. I'm trying to find a correlation between low returns and the activity of salmon farms, and I'm not finding it. I'm not finding it in your comments and I'm not finding it in the facts of the history.

Mr. Hutchens: Generally the population of returns of salmon in Newfoundland and Labrador, while they has declined perhaps about 30 per cent from their all-time high, that's nowhere near the hundreds of percentage that decline on the Conne River where a farm exists.

One of the biggest issues we have, of course, is that in Newfoundland we have something like 286 scheduled salmon rivers and we only have 13 that are monitored. We don't have the science to determine the health of all of these rivers. A lot of them are done by projection or using index rivers or approximations or other forms.

For the most part, there's a general belief that the rivers in Newfoundland, except for Conne and Little, are in pretty good shape. Now they're not all meeting conservation requirements and egg depositions, but they're in relatively good shape.

Senator Wells: So that's good news.

Mr. Bennett: Senator, I have reviewed the Cohen report. It has only very limited application, in my view, to Atlantic Canada because we have Atlantic salmon in Atlantic Canada and we have Atlantic salmon being grown in British Columbia. They don't have Atlantic salmon in the wild in British Columbia, so you can't make the same comparisons. The Cohen report to me is like one of those cases that lawyers have you pull up a case and one lawyer says it means all this stuff and the other lawyer says it means all this other stuff; you think you read two different cases and really you didn't.

Senator Wells: That's why I was surprised by some of the assertions that were made in the Cohen report as support.

Mr. Bennett: No, I said I read the Cohen report, but I didn't draw any assertions necessarily from the Cohen report. There may be some correlation.

For better or worse it's a blessing and a curse to be a lawyer because you need to not necessarily know for sure, but you need to have a fairly high balance of probabilities that it applies. I think we would need a similar type of report here. However, if we have a report and it takes however long, I'm not sure we need to do that. That's in response to your question.

I wouldn't mind answering a question that one of the other senators asked about whether it was fishing or farming. I think if it's on land, for sure it's farming, and in the ocean, it may well be some form of the fishery. But if the federal government deemed it to be farming, then I think that it would make it more attractive to be able to fund it through federal Farm Credit because then it would be eligible for federal farm funding, which would bring into place lower cost loans for genuine farming applications that could be analyzed on their own merits. But as long as it's going to be fishery, farm credit is probably not going to look at, and I think the federal government should be the regulator for sure if it's in the ocean. If it's on land, it would be provincial authority, but the feds then would have a role to play if it's agriculture, which I think it is agriculture.

Senator Wells: Okay.

I have a question for Mr. Tuck. Most of the people that you represent in the outfitting community, are they on the south coast or are they Labrador and on the north coast of Newfoundland?

Mr. Tuck: There would be a wide cross section. I would say no, they're not mostly on the south coast, not at all. A lot of them are hunting operators, not as many in fishing.

Senator Wells: Sure.

Mr. Tuck: If I could go back to your last question and make one comment, I think it's important to remember that under the COSEWIC process, they identified that they felt aquaculture was a factor and there is a relationship. We must remember that.

The COSEWIC process right now is probably creating my greatest fear because they have the potential to close down sport fishing on the south coast.

Senator Wells: Sure, I understand, but I'll also refer back to Mr. Justice Cohen who said there was "no smoking gun." Given that salmon aquaculture requires ice free bays or ice free areas and there are no ice free areas on the north coast of Newfoundland and certainly off Labrador, is there a great concern? I refer back to the dire consequences if salmon aquaculture was to continue, the dire consequences that you mentioned. Do you think that's maybe going a little too far, because it's unlikely that there will be sea-based salmon or salmonid aquaculture on the north coast of Newfoundland, on any coast in Labrador? It's really just relegated to the south coast and there are not many outfitters on the south coast involved in angling. As you mentioned, it's mostly hunting. Do you still have that grave concern?

Mr. Tuck: I still have a concern, accepting that the amount of science out there is almost non-existent, I don't think anybody knows what effect the escapees are going to have, how far reaching that's going to be. I mean, the Atlantic salmon escapees, they're turning up in rivers much farther away than they have. Originally it started with the steelhead because they were working more with steelhead first. These steelhead were much easier to identify. They're a different species and they just looked absolutely different, and some of these were found far away.

Now the problem was they had no idea which fish farms they came from. With the Atlantic salmon, in almost all cases there is no one who can look at one of these fish and say "that's wild" or "that's fish farm."

I sat at a presentation put on by somebody from aquaculture. I forget who it was, but Don, I think you were there. He spent 15 minutes telling us how you could distinguish between the two, and after the 15 minutes I was more confused than ever.

Senator Raine: I'm from British Columbia and the debate over fish farms has become very polarized. It's so polarized and so emotional that it's difficult to understand or to sift through the rhetoric and the real science. There is science being done, but when I've been out on fish farms recently, I have to say I was quite impressed when I looked through the television cameras to see how they monitor their herd of fish, if you like, and to see them all swimming passively and docilely. I'm thinking to myself, "Wow, they don't seem to mind being penned up." They didn't look unhappy to me.

I'm just a skier, but it struck me that one of the things we're concerned with out on the West Coast is any interaction between the Atlantic salmon that we see as perfect for farming because they're more docile and the Pacific salmon. There are many different types of Pacific salmon that are voracious, and if they were penned up, they would eat each other. They are different. Can you discern the behaviour of a salmon that has been in captivity and escaped from one that's the same breed but going naturally upstream? When the salmon in Atlantic Canada go up the rivers and the fishermen go after them, do they put up a good fight, a similar kind of sport fishing as we get out west?

Mr. Hutchens: People on the south coast tell me that if you want to find out whether it's a wild salmon or a farmed salmon that's in the river, you throw out some dog feed pellets. If the fish comes mad for it, you'll know it's a farmed salmon; if it swims away from it, it's a wild salmon.

Senator Raine: That makes sense.

Mr. Hutchens: And that's the only way that he could tell.

Senator Raine: That's a behaviour that was learned because of their conditioning, obviously, but apparently there has been no evidence of any interbreeding between the Pacific and the Atlantic salmon in the west. The escapees aren't so much of an issue there because apparently they don't survive. Nobody is dropping them fed so they don't make it but here it's different. You have a different scenario.

Mr. Bennett: Yes, senator. DFO regulates in B.C. and DFA regulates here. DFO does a much better job with respect to escapes. For example, DFO publishes regularly every week or every month how many escapes there have been. If one fish falls overboard in B.C., with a transfer from a vessel to a net, to the cage, it has to be reported. In this province, if fewer than a hundred escape, it's called a trickle and they don't have to be reported. So fewer than a hundred don't have to be reported and that may result in far more wild salmon here than there would be in B.C.

Earlier this year there was a mishap with a cage and the estimates were maybe 20,000, maybe 25,000, they weren't certain how many were lost.

I response in part to Senator Wells who observed about the area being ice free on the south coast, which is true, the south coast is also very susceptible to hurricane activity. It had one reported tidal wave as long ago as 1929, but we could have one major catastrophe and wipe out literally the whole industry on the south coast. If we had a hurricane or a tidal wave hit smack on right there it would cause an awful lot of damage. That's a concern that I don't think they have in B.C. That's a risk that we haven't had to deal with yet because we haven't been hit with it, but it's an unknown risk and a big one.

Senator Raine: B.C. certainly has its share of natural hazards. A tsunami is a real potential but I understand what you're saying. Thank you.

The Chair: Thank you and maybe all the salmon in Newfoundland get along with each other, contrary to the ones in B.C. I don't know; it's an observation.

Senator Munson: You see, senator, these salmon went to different schools.

On the serious part of this are you are calling for a moratorium? Are you calling for eliminating what has been put into place over the last 30 years? We hear the word sustainable. We hear the word "growth." We hear the word "jobs," and jobs are important. We hear the phrases "feeding the world" and "feeding our country" and there's an ongoing debate about the science. I'm just curious about how far. You say "no more fish farmers." Obviously you're passionate about the way you folks feel but we've heard all day testimony to the contrary in a province that needs work, needs an industry that will last forever. I'd like to get a longer point of view from the three of you.

Mr. Tuck: What is most lacking right now is the knowledge of the relationship that exists between the fish farms and the wild fish. There is little or no science. I think that the aquaculture industry and the plan to expand threefold is throwing caution to the wind and hoping that everything is going to be all right, and I think that's the wrong approach. They should have been much more conservative 20 years ago, 30 years ago when they started. They should have put in some sort of monitoring because right now along the south coast, especially where it's so remote, DFO has absolutely no idea how healthy or unhealthy a lot of these rivers are. They have no science on the river. They do not know how many fish are there, and we just need more science before we proceed. We need to know the relationship. We need to know how the smolts are affected by the high density of sea lice along the cages. The smolts that are coming out of Conne River may not be the only smolts that are going by these sea cages. The ones that come out of White Bear River and La Poile River and Grey River, they may come in there as well. Fish are a social creature. They follow each other.

Mr. Bennett: Senator, there's no going back and I think there can be no moratorium, nor should there be. We have invested very heavily in an industry that's known worldwide and it's an outstanding industry. Consider that we have 7 billion people in the world, 1.4 billion in China and most of the fish farming is done on land. Atlantic salmon farming isn't done on land.

But this is not an issue about moratorium; it's not an issue about stopping. It's not an issue about going back, at least not in my view. It's an issue about how we proceed forward to minimize the risks and maximize the benefits over the long term. Not just because the region is heavily invested, because it is, but because all levels of government are invested. Sometimes when you're proceeding forward, it doesn't always work best at the beginning, but the more experienced you get and the more time you have into it and the more markets that you develop and the more techniques that you have, the better it becomes.

It may have to do with the pace of development if you don't improve as you go forward and you just get bigger and bigger. One of our issues is that we compete with other areas that have few if any environmental standards, cheap labour and they can pump out all kinds of salmon in different countries. We won't be able to compete with them, but we can compete with them with a better product because we're part of NAFTA. We have a federal system. Canada has one of the best records in food safety in the world. CFIA is renowned and we can be trading on our natural advantages to go forward. We just need to do it properly.

Mr. Hutchens: I'd like to separate the shellfish from the finfish part of aquaculture. As has been stated here, the shellfish industry seems to be quite successful, and we have no problem with it.

On the finfish side, yes, our council would be looking for a moratorium. No further additional farms until the science can answer a lot of those outstanding questions.

Senator McInnis: I alluded to the divergence of opinion that we were about to hear on Thursday and I have now heard it in Newfoundland. Just to put it into perspective, the fishing and hunting industry in Canada is worth $5.4 billion. The commercial fishery is worth $2 billion, just to put it in perspective. Hunting and fishing is a major industry in this country. There apparently has never been a study as to the injurious affect escaped farm salmon would have on wild salmon, to my knowledge.

Cohen alluded to it and talked about it, but you're right, he was talking about sockeye; he wasn't talking about the Atlantic salmon.

Do you know anything about the costs associated with land versus ocean based? I mean, is it a matter of cost; is that what we're talking about here?

Mr. Bennett: I think it can only be a matter of cost, but nobody has actually quantified the cost. It seems to come down to whether you prepared to accept a smaller volume with higher quality output or a larger volume of average quality output. By "average quality" I mean to compete with Chile and Norway.

Norway is part of the EU. A couple of years ago when I was reviewing these numbers, Norway was able to get around. I did a conversion between Kroner and kilos and pounds so I could get pounds per dollars, and it was somewhere between $2.90 and $2.95 a pound for salmon delivered in European markets in Germany and Paris. So they were able to get that kind of a price then, and that would make it very difficult for us to compete.

We've got 300 million Americans sitting right alongside us and we have the advantages of NAFTA. I'm not talking about British Columbia because I don't know much about British Columbia. I've fished salmon off a boat from Victoria and it was great but it's not Atlantic salmon. They don't jump and so on.

In my view, we need to make a decision and it's sort of a policy decision. Are we going to produce Perrier or are we going to produce two litres of bottled water cheap? The choice is ours. We already have the advantage of the reputation of Canada. In my view we are able to produce a higher quality product that can be marketed as such. Consumers are looking for a higher quality product. I think we really need an effective study. One-half of it would be how much more cost for land based and the other part would be how much more would a consumer pay for land based or sustainably grown, the term that is now used? When we know that figure we can proceed.

I think that we're literally moving forward in the dark without a compass and picking up speed.

Senator McInnis: Yes.

ISA, as you mentioned earlier, is a costly virus. I don't know why this happens but not all the fish, not all of the salmon are infected, but all of the salmon in the pen are destroyed.

Mr. Bennett: Yes. And there are different types of ISA, and some are compensated and some aren't. We've had five outbreaks in this province that have been compensated, but we've had more outbreaks than that and the issue with them coming from a CFIA point of view is why are you compensating something that you can still eat? If food safety isn't impaired then what are you really doing? Is this just a subsidy?

ISA is highly contagious and can be transmitted from other fish. Imagine having a hundred thousand in a cage and one of them gets sick and the others do. The period of time to do the analysis is a matter of a few weeks. Sometimes industry and government are blamed because they were slow to respond. Well, that's because we wanted to know that it was ISA. And then the CFIA mandate is to replace the cost to the producer of that fish at that time. All of their inputs or whatever they had are compensated to a maximum of $29 per fish but I'm not certain, essentially the producer breaks even because the fish got sick.

But now you've had a disruption in your production chain. You have a plant that was hoping to process a couple of hundred thousand pounds of fish, but the work isn't available because the fish aren't available because the fish had been destroyed.

With regard to provincial inputs from the provincial Minister of Fisheries, we pay roughly 10 per cent of what the feds do, not as a formula, but as a cleanup cost, and so it costs around a maximum of $30 a fish for a market fish. This, then, has to be destroyed. If they were raised in close containment, you have no ISA, no sea lice, and you have much fewer chemicals because salmon are raised initially in freshwater.

There's a hatchery in the village where I live that employs four people and it's owned by Cooke, so I sort of see the middle. I want the industry to grow and grow properly. We should have, in my view, a stellar product for the world that nobody else has because we have the pristine waters and we have the CFIA and we need to get it right. I'm afraid we're sort of debauching our own market by pumping out larger volumes too fast.

Senator McInnis: And it's not just disease. You can have cold water kills.

Mr. Chair: Thank you, senator, and thank you to our panelists. It's a different perspective for sure, but as part of our ongoing study, we want to hear from all sides on this debate and discussion. We welcome your comments here today. As I have said to other panelists before you, if there is anything that comes up after the fact that you think that we should be made aware of, please feel free to contact our clerk and provide a written submission or further information if you feel it necessary to do so. Once again, I say thank you.

(The committee adjourned.)

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