Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 11 - Evidence
OTTAWA, Thursday, June 5, 2014
The Standing Senate Committee on Fisheries and Oceans met this day, at 8:34 a.m., to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada.
Senator Fabian Manning (Chair) in the chair.
[English]
The Chair: I am pleased to welcome you this morning to this meeting of the Standing Senate Committee on Fisheries and Oceans. My name is Fabian Manning, a senator from Newfoundland and Labrador, and I am chair of this committee. Before I give the floor to our witness this morning, I would invite the members of the committee here to introduce themselves.
Senator Raine: Nancy Greene Raine from B.C.
Senator McInnis: Tom McInnis from Nova Scotia.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
If I may, chair, I know this isn't committee business, but I would like to express my sincere sympathy to the citizens of Moncton, and just know that we in Ottawa are so shocked about the events that happened and the murder of the three RCMP officers and wounding of two others. Thank you, chair.
The Chair: I can assure you that your comments are appreciated and our thoughts and prayers are with all people affected by this tragedy.
Senator Enverga: Tobias Enverga from Ontario.
Senator Poirier: Rose-May Poirier from New Brunswick.
[Translation]
I too would like to express my condolences to the people of the Moncton region, to tell them that they are in our thoughts this morning and that we are praying for them.
[English]
The Chair: Thank you, senator, and I echo your comments. I'm sure, as I said, we are all thinking of the many people who were involved in the tragic event in Moncton last night.
The committee is continuing its special study on the regulation of aquaculture, its current challenges and future prospects for the industry in Canada, and we're pleased this morning to welcome Inger Elisabeth Meyer, First Secretary of the Royal Norwegian Embassy. On behalf of the members of the committee, I thank you for being here today. I understand you have some opening remarks that you would like to make, and then we'll have some questions from our senators. The floor is yours.
Inger Elisabeth Meyer, First Secretary, Royal Norwegian Embassy: Thank you so much. Honourable members of the committee, I am indeed honoured to meet with the Standing Senate Committee on Fisheries and Oceans to talk about Norwegian aquaculture.
Historically, fisheries have always been one of Norway's most important industries. Norway is today the second largest seafood exporter in the world, supplying more than 130 countries with Norwegian seafood. Seafood is our largest export after oil and gas.
Today, Norway is probably best known for its expertise within fish farming, which will be my focus in this presentation. I think you all have received some slides and I will be following these, first saying something about the aquaculture industry, the regulation and organization, and finally the potential and challenges for the industry.
The Norwegian aquaculture industry started in the 1970s and has grown to become an industry of major importance for Norway, especially for many coastal communities, which provides new economic opportunities where economic growth can be limited.
Today, farming of salmon and rainbow trout is taking place in close to 160 municipalities all along the Norwegian coast, from the very south to the very north. There are approximately 180 companies in the aquaculture industry. Most of these are SMEs, but there are also some large companies. Some of these large companies are also operating internationally, including in Canada.
Approximately 5,900 people are directly employed in aquaculture production. In addition, thousands of jobs are created in transportation and the supply industry. All in all, it's estimated that 21,000 people are employed in aquaculture-related activities.
In 2013, Norwegian aquaculture production amounted to approximately 1.32 million tonnes, 99 per cent of which was Atlantic salmon and trout. In addition to salmon and trout, Norwegian fish farms produce cod, shellfish, as well as smaller amounts of other main species. The export value in 2013 was 43.3 billion Norwegian krone, or $7.8 billion Canadian, representing approximately 70 per cent of the total Norwegian seafood export value. In addition to exporting seafood, Norway is also an exporter of fisheries and aquaculture management and technology to countries worldwide.
Let me go to the next slide and say something about the main species. Atlantic salmon is the dominant species, and 1,232,095 tonnes of Atlantic salmon were produced in Norway in 2012. Almost all salmon sold in Norway today is farmed salmon. Fresh and frozen farmed salmon is sold 12 months a year. Fillet can be prepared in many ways, and the farmed salmon is also used for sushi and sashimi, which has become very popular. The farmed salmon is ready for slaughter when it has reached a weight of three to six kilos.
Today, all salmon are vaccinated for a variety of diseases. The use of vaccines has resulted in a sustainable drop in the use of antibiotics in salmon farming. However, good vaccines for the various types which can infect salmon have not yet been developed, and other measures in infection prevention are, therefore, important.
In 2012, 74,583 tonnes of farmed rainbow trout were produced in Norway. We also have cod production. In 2012, that production was 10,033 tonnes. Farmed cod is also sold year round, fresh and frozen.
Farmed cod in Norway descends from wild local stocks. After a few generations of development, it's now feasible to control the quality of the broad stock. One of the biggest challenges in intensive cod farming is the feeding. The cod larvae are dependent on live feed. If the larvae and fry don't get sufficient nutrition, they are at risk for developing deformation. The farmed cod is ready for selection when it has reached a weight of three to four kilos and is two to three years old.
We also have some farming of blue mussels, but the numbers are not very big, as you can see.
On the next slide you will see the figures for the aquaculture production. As you can see, it has increased over the years. There was a decrease last year, and the salmon is dominating.
Let me say something about the key factors for the development of Norwegian aquaculture. We believe it is essential that the government, research institutions and the industry work together in order to develop the aquaculture industry to ensure an innovative, profitable and environmentally sustainable industry.
As our Minister of Fisheries Elisabeth Aspaker said recently:
The modern seafood sector is indeed a sector built on research, innovation and technological solutions. Research gives us the ideas and the knowledge we need for the days to come, and the suppliers of technology contribute to innovation and profitability.
Technology is also vital to ensure sustainability. Better science, process innovation and development of equipment and gear are all elements that contribute to improved fishing practices, smarter utilization of the raw material and better management. This is essential in order to enable the seafood sector to become an even stronger force in global food production.
All three parties collaborate closely and both government and companies fund research.
I will speak about the framework. In Norway, we have a tradition of strong regulation of this industry. The main purpose of regulation is to promote the profitability and competitiveness of the aquaculture industry within the framework of sustainable development.
A number of laws regulate the aquaculture and fisheries sector. However, I will concentrate on the Aquaculture Act. The Aquaculture Act establishes the framework for the aquaculture industry's future, for responsible development with due regard for the environment, and effective use of the coastal zone. The act has a strong environmental profile. At the same time, the relationship between the use of the coastal zones and different views or interests is taken into account.
Engaging in the aquaculture industry in Norway requires a licence and an aquaculture site. This means that aquaculture activity with no licence would be illegal. An aquaculture licence is a set of rights and obligations for the holder of the licence. The companies have the right to transfer or mortgage licences. The right to transfer and mortgage licences has made the industry more adaptable to meet future challenges.
Anyone can apply for a licence. A licence is an administrative decision and is offered to applicants who meet the requirements specified in the rules and regulations governing aquaculture activities. Aquaculture licences for salmon, trout and rainbow trout are allocated in allocation rounds as decided by the Ministry of Trade, Industry and Fisheries. These licences are limited in number and are subject to payment of a licence fee. Other licences are free and can, in principle, be applied for at all times.
The maximum allowable biomass per licence is 780 tonnes, except in the northern counties. The production capacity of the site is set based on assessments of the site's carrying capacity.
This next slide will show the case handling of aquaculture applications. The application for allocating a site goes through an extensive application process, with the county acting as the coordinating authority. In Norway, we have 19 counties, and there is aquaculture activity in almost all counties.
Upon receiving a completed application, the county municipality forwards it to the local authorities and other relevant sector authorities for evaluation. These are listed in this slide, and they have all different kinds of responsibility. The case handling must not take longer than 22 weeks in total.
I will say something about the potential and the challenges. In Norway, we have a group of scientists that recently assessed the potential for wealth creation in the Norwegian seafood industry, and their report illustrates that the outlook is very promising. They have estimated that, by 2050, the industry will increase by six times the present value, meaning the fish farming industry will have a production of 5 million tonnes in 2050.
We have achieved a lot within the development of the aquaculture industry in Norway. However, the continued growth of the Norwegian aquaculture production has presented the industry with challenges. Although significant progress is being made, environmental concerns related to sea lice and escaped fish remain. Other challenges that have grown more apparent in recent years are those related to food and area shortage.
There are five key areas where aquaculture may potentially have a negative impact on the environment: diseases and parasites, escaped fish/genetic interaction, pollution and discharges, use of coastal areas, fodder and fodder resources.
It is an objective that parasites shall not have a regulating effect on stocks or wild fish in Norwegian waters. Salmon lice are the most common parasite in salmon farming. The current regulations require compulsory treatment of salmon lice before the number of lice exceeds a certain limit. An increasing number of fish farmers are using wrasse, which eats lice, to control the level of salmon lice in the cages. Other methods, such as mechanical removal or the use of veterinary medical products, are also in use. New methods continue to be developed, and the aim is to gradually replace and reduce chemical treatment through the introduction of alternative methods of action.
One of the key environmental challenges is considered to be escaped fish. The challenge concerns issues of genetics, ecology and the risk of spreading disease. For the industry, escape means economic loss in addition to the negative impact on public perception. Efforts to prevent fish from escaping are given high priority, and both the industry and the authorities are working on a broad front to minimize losses caused by escapes.
Let me also mention that measures are put in place in order to protect wild salmon. Parliament has decided that 52 national salmon rivers and 29 national salmon fjords are protected.
Summing up, salmon farming is an important industry for Norway. The new Norwegian government that came into office in October 2013 and consists of a coalition of the Conservative Party and the Progress Party announced in April this year that they will present a white paper to Parliament on the economic growth potential within aquaculture. Prime Minister Erna Solberg has stated that the predicted growth in the sector would further strengthen our competitive position and create new jobs along the coast in a sustainable manner. There's a great future for the aquaculture industry and an increasing demand for seafood on the international market. This white paper will also discuss several options for how increased growth in the sector can be achieved, including a more predictable framework for licence allocation.
Thank you.
The Chair: Thank you, Ms. Meyer. Shortly after the initial introductions, Senator David Wells from Newfoundland and Labrador joined us, and we'll allow him to have the first questions here this morning.
Senator Wells: Thank you, chair. I will show up late to every meeting if I can get first questions.
Thank you for your presentation, Ms. Meyer. I have two questions, if I may. On your page regarding the handling of aquaculture applications, you have the County Governor, the Norwegian Coastal Association, the Norwegian Food Safety Authority and the Norwegian Water Resources and Energy Directorate. Is the county governor the organization that deals with the actual space allowance or availability? How does that work?
Ms. Meyer: In Norway, we have 460 municipalities and 19 county municipalities, and they have different kinds of responsibilities. If you see the one with the municipality, they will clarify the regulations top area plans. They will be responsible for area planning, and they will give their comments to the county, which is also here because they have responsibility within the pollution part, but the county makes the decision.
Senator Wells: Okay, and with the decision making, as a supplementary to that, on four of these boxes, the lower boxes, in parentheses it says ``time limit.'' Can you explain what that means? It is the first four boxes.
Ms. Meyer: Yes. I think that means there's a time for when they have to give their answer.
Senator Wells: Their response.
Ms. Meyer: In Norway, it is quite regulated in these processes on how long a time you can use for all kinds of applications. I think it would be that and not that you have the approval for a limited time and that you have to renew it. I am not sure, but I think it's the first thing. I could come back to that.
Senator Wells: Sure. Mostly the reference, chair, is to our committee to look at in our study not just time limits for how long an aquaculture operator might have that space but time limits for response from government authorities on the application process.
My second question, and thank you for the answer to the first one, is on the Saami, the indigenous people of Norway. Do they have any special rights with respect to land access? I know there was the Native Land Act of 1913 which allocated the best and most useful lands to Norwegian settlers. Would the Saami have any special consideration?
Ms. Meyer: Well, they are consulted in these processes, but it's more like an ordinary consulting process. The situation is different from what you will see in Canada when it comes to Aboriginal regulation.
Senator Wells: Thank you.
Senator Stewart Olsen: Welcome. I have just a couple of questions on your wild salmon. You mentioned that you have 52 protected areas. What does that mean exactly? There are no fish farms in those areas?
Ms. Meyer: Yes. They are protected, and they are for wild salmon, to protect the wild salmon, so 52 rivers and 29 fjords.
Senator Stewart Olsen: But you did say that most of your salmon production is farmed salmon.
Ms. Meyer: Yeah.
Senator Stewart Olsen: Is it a sports industry for your wild salmon? Has there been a diminishment of the available wild salmon? You don't market so much of the wild salmon and market mostly farmed salmon. Why is that?
Ms. Meyer: That is more on the technical side, and they mark the salmon so they can follow it, monitor it. They have different kinds of monitoring systems.
Senator Stewart Olsen: No, I meant market, sell. You produce and sell mostly farmed salmon.
Ms. Meyer: Yes.
Senator Stewart Olsen: What about the wild salmon?
Ms. Meyer: We sell the wild salmon as well, but for most people when they buy salmon it is a discussion whether it's wild or farmed salmon. There's a lot of research, and different kinds of organizations and institutions look into what the challenges could be. It is more a discussion about the feeding and how it can be done in a better way, and not that much on fish farming.
For the consumer, some think that they will prefer the wild salmon, but for most people I would say it's not that much of an issue. You don't see it marked in the same way as you can see here, whether it's wild or not.
Senator Stewart Olsen: You license all of your fish farms. How long do those licences last for and when would they have to be renewed?
Ms. Meyer: That was some of the same thing and I have to go back and provide you with those answers. I don't know how long they last, but today we have about 1,100 licences in Norway.
Senator Stewart Olsen: Thank you very much.
Senator Poirier: Thank you for your presentation and for being here. I have a couple of questions. The first one is that in Canadian aquaculture, depending on what area and community you're looking at, in some places it is a polarizing subject and harder to be received. It's not in all communities, but in some. Is that something you dealt with when the aquaculture business began in Norway? Historically, what was the public opinion and how has that evolved over the years?
Ms. Meyer: I think much of the driving force in aquaculture in Norway is that this is a possibility for small communities where there are not many other economic possibilities to do business. That has been very much a driving force. The discussion is not that polarized and whether it was in the beginning in the 1970s, I can't say. But what you can see when you look into all the material produced is that researchers and the government side work very closely. The government funds about 66 per cent of the research and it's done for the budget for Parliament every year. It has put a lot into information and telling people what this means.
There have also been campaigns about people needing to eat more fish. You can go to any web page and see that FAO has also suggested that people need to be healthier, eat more fish. They will say that people in Norway, every household, should have two or three meals of fish every week, and this is healthy for you.
It's a lot of information, but of course it is a discussion, and that is also open. From time to time, researchers will also go to the newspapers and speak about their concerns, but it's not that polarized, I would say. For average consumers, it's not something you will discuss often.
Senator Poirier: The committee has been told by industry that access to capital is difficult for new businesses that want to start aquaculture. How would you classify the access to financial capital in Norway for new aquaculture? Is there anything for businesses that want to start new businesses or financial access for that activity?
Ms. Meyer: What we have what's called Innovation Norway. That is a public agency within the Ministry of Trade, Industry and Fisheries. They are also abroad, like the Trade Commissioner for Canada, but they have a lot of offices and a presence in Norway. They have different programs where you can apply for funding, but also loans, within different sectors.
I am not sure whether they are within this industry, but I would think so. I would think they have been for some time. I'm not aware of specific programs, but I could look into it and give you that information.
Senator Poirier: Thank you, I would appreciate it.
Senator Enverga: Thank you for your presentation. The current aquaculture act is from 1996. Can you give us a brief history of the Norwegian legislation so we could understand how to do it here in Canada? What has driven the changes to it? For example, is it industry-led, government-led or interest organizations that have led it?
Ms. Meyer: I would think it is in close collaboration. What we usually do in Norway when you have a new law — I don't know what work was done before this specific law — is put together a committee with some government representatives and experts. They will work for one or two years and then give suggestions for how this act can be put into force and how it can be written.
Usually, you will have different concerns and they all have to be taken into account. In this act, both the economic and the environmental aspects are important. It is always kind of an evaluation. Prime Minister Erna Solberg said she will have a new white paper and something she will look into is these processes, because the criteria for who can be given a licence are not absolutely clear. Some will meet the criteria, but that should be more predictable for this industry, so you will know more clearly whether you will have a licence or not.
This act very much regulates the licence and also has a chapter about the environmental aspects. All the environmental aspects have to be taken into account before you approve an application.
Of course, it's also who has the control, and the inspection authorities are also a part of this. It is monitored but the authorities also inspect the sites for health security, diseases, food security and for different kinds of reasons.
Senator Enverga: When it comes to promoting Norwegian exports of aquaculture, could you explain what the action between the government and the industry is?
Ms. Meyer: We have a seafood council, so they have offices abroad and work very closely with different ministries, the foreign service, the Ministry of Industry, Trade and Fisheries, and these organizations for the aquaculture industry have their own association. The research institutions work very closely to promote the industry, to do networking, to have events and to take part in trade shows.
I don't know if that answered your question.
Senator McInnis: You have a national aquaculture act, and I see the 19 municipalities. In Canada, there have been discussions of a national act, and we have the 10 provinces and a number of territories. Are the 19 municipalities tied into the act? I suspect they are.
Ms. Meyer: It's a national act, but all acts will be —
Senator McInnis: It's not concurrent, though, is it? Your national government brought it in.
Ms. Meyer: Yes, the Parliament.
Senator McInnis: I'm asking because, throughout the procedure here, there is a great deal that appears to be left to the municipalities.
Ms. Meyer: Yes.
Senator McInnis: The counties, yes, and the municipalities to some degree.
We were discussing the potential of having concurrent legislation in Canada, but you don't know if this would be concurrent — that they had a tie-in to it, and if they had the jurisdiction to tie into it?
Ms. Meyer: It is very different, so you can't actually compare, in a way, a county to a province, because a province has jurisdiction in many areas. The county will not have that in a way. They can be given authority from a national act in some areas. They can have some kind of framework, but that will always be in accordance with an act given by our parliament. A county will not have a legislative assembly, for example.
Senator McInnis: I'll go back and study the historical aspects of the development of your country, which I understand emanated out of religion, as I recall.
Anyway, let me just go on. It says here ``that receives invited comments.'' What would be the protocol for the approval of a licence? It seems pretty clear-cut here, and I think I understood you to say it's 22 weeks.
Ms. Meyer: Altogether.
Senator McInnis: Which is amazing — from start to finish.
Ms. Meyer: Yes.
Senator McInnis: Of course, you've had considerable experience at it. These ``invited comments'' would be from respective agencies or departments of government but not the public? What public engagement is there?
Ms. Meyer: These are authorities that, according to an act or some kind of regulation, have a responsibility.
Senator McInnis: Yes.
Ms. Meyer: The public is not here, but you can always appeal a decision. It's very much regulated who can appeal, so then you have to show that you have an interest.
Senator McInnis: In order to appeal?
Ms. Meyer: Yes.
Senator McInnis: A vested interest?
Ms. Meyer: Some kind of interest; it can be of different kinds.
Senator McInnis: Environmental?
Ms. Meyer: Yes. But it's quite clearly regulated who can appeal a decision.
Senator McInnis: There are protected areas; you mentioned that. Are the sites predetermined in any way in Norway; is there zoning of some sort?
Ms. Meyer: I am not sure.
Senator McInnis: These farms are marine-based. Are they open-pen farms as opposed to closed containment?
Ms. Meyer: Mostly open.
Senator McInnis: Are there closed-containment farms?
Ms. Meyer: Those are more on land, and they are doing research now whether there could be more closed, but we don't have that offshore; there, it is more open.
One of the things they are discussing now is to go farther off shore, to use the technology also from oil and gas to go farther off shore with the sites.
Senator McInnis: Interesting. I don't want to get into the technical details too much, but you mentioned sea lice being a problem, as are certain other infections. You mentioned the fish are injected with vaccines or whatever to prevent this, probably at an early stage. Are there rules with respect to fallowing, such that if you are to transfer a site, that you take the pen out and clean it?
Ms. Meyer: I'm sure there are, because it's very regulated. I am sure there are regulations in accordance with the aquaculture act or other regulations that will say something about that. I have not read that myself, but I would think it is so.
Senator McInnis: From what you've told us this morning, Norway certainly has an amazing industry and employs an awful lot of people in areas that we surely could use in Canada — in outport areas. Thank you very much.
Senator Raine: This is very interesting.
I have a couple of questions. First, do you have the information, or could you get it for us, as to how many of your existing 1,100 licences are owned by municipalities, maybe community groups or small- or medium-sized industries, and how many are larger companies, particularly the major ones that are investing worldwide in aquaculture?
We can see that the Norwegians are at the forefront of the technology of aquaculture, which, as you mentioned, is kind of an export product for Norway. I would like to understand how it is set up.
Second, if you are predicting a lot of growth in the industry — did you say it was going to increase six-fold?
Ms. Meyer: Five times.
Senator Raine: Five-fold. So how would you decide where new licences would be allocated? Would the first consideration be the siting and the capacity of the site? Who identifies the capacity, and then has that knowledge and decides who to accept? Are you looking for specific kinds of businesses? Should there be perhaps a more direct relationship with the local communities, or are you looking for well-financed, well-capitalized major firms?
Those are all part my first question. You probably don't have the answers to them all.
Ms. Meyer: Actually, of all the statistics I have seen, I have actually not seen a statistic for who are the owners. I will take that back and see whether it is possible to find that information and send it to you.
When it comes to the development of the industry, one thing they are looking at is to go farther off shore. Whether it's a strategy in place — the main thing with this white paper is to see how we can have more growth. I expect that white paper will also say something about sites and localization. But I'm not aware of a strategy saying at this point what ownership and the growth should be. I think that will come with this white paper.
Senator Raine: We have coastal communities in Canada as well that are transitioning, if you like, from wild fisheries to aquaculture. The people who live in those areas have a desire to be involved in the decision making process for siting of aquaculture. Is there a similar situation in Norway? Do the local communities have a say in whether or not there will be an expansion of aquaculture in their immediate area?
Ms. Meyer: When you have a process, everyone can raise their voice and speak about their concerns, but to my knowledge they do not have a formalized role in these processes.
Senator Raine: Thank you very much. My other question is with regard to the protection of the wild stock. You mentioned that they are marked and tracked. Can you go a little further in regard to how that is done? Are all the salmon-producing rivers in Norway identified as such, and does each specific river have a management plan? You mentioned a number of the rivers and fjords are protected. Do you know the percentage of the Norwegian coastal waters that are protected? Is it that some are zoned specifically for aquaculture and some are protected?
Ms. Meyer: There are not zones for aquaculture, but there are rivers that are protected for the wild salmon. The motivation has been to protect the wild salmon, and that is actually the issue.
When it comes to marking, I'm not sure how they actually do that and the percentage. Sorry, I do not know. If you have a chance to meet with the Norwegian authorities and researchers, they will give you more detailed answers.
Senator Raine: We do intend to do that. The big question for all of us is: Can we be assured that aquaculture can coexist in a sustainable, responsible way without impacting the wild fish? That's the experience we'd like to find in Norway. Thank you.
Senator Wells: Is there a move, Ms. Meyer, towards closed containment versus open cage?
Ms. Meyer: No, I do think so. There are closed on land, but I do not think there is a movement to it. There is discussion and research done on whether you can have more closed, and there are many reports and articles about that. I have no background to say whether they will go in that direction. The research institutes have also done research on that. To my knowledge, they are not going into that direction.
The Chair: Thank you to our witness this morning. As a follow-up to your comments, if there is any information that you think you could pass on to us after the fact and some questions that the senators asked that you may not have had the answers for, if you would forward them to our clerk, we would appreciate it.
Just a couple of housekeeping items, senators, before we leave: Next Tuesday evening, we have scheduled the Georgian Bay Association concerned with the fresh water aquaculture, and next Thursday morning we have confirmation of the availability of two officials from Marine Scotland. The technology of the video conferencing hasn't been worked out yet, but that will be worked on in short order. We are hoping to hear from them through video conference.
Yesterday, we appeared before budgets in relation to the Norway-Scotland visit. We are waiting word on that. We will be in touch to see what we will do in relation to who will travel and who will not.
With that, we again thank our witness for this morning. Thank you, senators. The meeting is adjourned.
(The committee adjourned.)