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POFO - Standing Committee

Fisheries and Oceans


Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 14 - Evidence - November 20, 2014 - Morning Meeting

MONCTON, Thursday, November 20, 2014

The Standing Senate Committee on Fisheries and Oceans met this day at 7:54 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.


The Chair: I would like to call the meeting to order. I am pleased to welcome you all to this meeting of the Standing Senate Committee on Fisheries and Oceans. My name is Fabian Manning. I am a senator for Newfoundland and Labrador and I am 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, please. Just a reminder, you need to turn on your microphone before you speak.

Senator Poirier: Senator Rose-May Poirier, New Brunswick. Hello.

Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.

Senator Meredith: Senator Don Meredith, Ontario.

Senator Hubley: Senator Elizabeth Hubley, Prince Edward Island. Good morning.

Senator Lovelace Nicholas: Senator Lovelace Nicholas from New Brunswick.

The Chair: Thank you, senators. Just to remind you that we have interpretation here. Channel one is English and channel two is French. They do not have one for ''Newfoundese'' so if you do not understand what I say sometimes just please ask me to repeat myself. I may talk a bit fast. I am sorry about that but that is in my DNA. I want to ask the witnesses if you would like to introduce yourselves first, please.

Kimberly Watson, Regional Director, Regional Development Division of St. George, New Brunswick Department of Agriculture, Aquaculture and Fisheries: My name is Kimberly Watson and I am the Regional Director for Southwest New Brunswick for the Province of New Brunswick, Department of Agriculture, Aquaculture and Fisheries.

Katherine Brewer-Dalton, Senior Advisor, Regional Development Division, New Brunswick Department of Agriculture, Aquaculture and Fisheries: Good morning. My name is Kathy Dalton. I am a senior adviser with the Department of Agriculture, Aquaculture and Fisheries here in New Brunswick.

Joseph LaBelle, Director, Policy Advocacy and Strategic Projects Branch, New Brunswick Department of Agriculture, Aquaculture and Fisheries: Good morning. My name is Joseph LaBelle. I am the Director of Policy, Advocacy and Strategic Initiatives with the Department of Agriculture, Aquaculture and Fisheries.

The Chair: I want to thank our witnesses for taking the time to join us here today as we continue with our study into the aquaculture industry in Canada. We have had a couple of great days here in your province and visits to Quebec and to Prince Edward Island. We have seen firsthand what is out in the field and we certainly are looking forward to today, to hearing from people who are involved in this industry. My understanding is that you may have opening remarks, one of you or all of you. I want to ask you to present those now and then we are going to have some questions from our senators. The floor is yours.

Ms. Watson: Good morning, everyone. Thank you very much for this opportunity on behalf of our minister, the Honourable Rick Doucet, and our Department of Agriculture, Aquaculture and Fisheries. We actually have provided a handout for the senators. I think everyone has that. I will just go through a few of the slides on behalf of our team. Basically what we would like to do is give you a quick overview of the aquaculture industry in New Brunswick and talk to you a bit about the governance and regulations as they exist now and some of our achievements as well as the challenges. We will probably spend most of the time talking about the challenges because I think that is what this committee is all about.

Looking at the aquaculture industry itself, as you can see by the first slide salmon is 97 per cent of the activity in aquaculture in the province of New Brunswick. A very important shellfish industry still exists, as well, though. We have 2,200 New Brunswickers who are employed in the aquaculture industry.

Aquaculture is very important to us. It actually started here. In fact 30 years ago New Brunswick was the birthplace of the aquaculture industry. It started here, it survived here, and it has thrived here. Here we are in 2014. It continues to be the location for the multinationals in Canada's aquaculture industry and it continues to be a very important part of our economy.

I am just whipping through these pages. If you are trying to follow along we will spend more time on the challenges pages.

Again reinforcing that this is a major employer, not only are New Brunswickers employed in the aquaculture industry. They are also employed in many of the indirect businesses that are around the aquaculture industry, things like boat building and cage manufacturing. The oyster sector in New Brunswick is one that really looks very promising and there is a lot more opportunity for growth in the oyster business in New Brunswick.

We have also included a map just for quick reference on slide 5. You can actually see in this southeastern part of New Brunswick that is where the shellfish operations are located. In the southwest of New Brunswick that is where our salmon industry is based.

On slide 6 is an overwhelming list of various acts and regulations that exist. Rather than going through these in each piece I simply want to leave you with a couple of points. The first is that in our department we do development of aquaculture. In the Department of Agriculture, Aquaculture and Fisheries we do development. Our sister department, the Department of Environment and Local Government, is responsible for the environmental protection. There is a series of governing acts and regulations. We have a very robust regulatory system and it is something where the responsibilities are shared between ourselves and our sister department inside the province of New Brunswick.

Federally we have actually included a list of the federal acts and regulations, but I am not going to spend any time talking about those. I think you are well aware of those as they exist federally.

In the next series of slides starting with slide 8 we were trying to highlight the achievements rather than listing the programs or policies that we have. Because of the existence of these policies and regulations we actually have experienced a number of achievements. I will just go through a few of those and maybe I will fast-forward on some rather than taking the time to discuss them in complete detail.

First of all in New Brunswick we have an internationally recognized Fish Health Management program. Why is that important? It is incredibly important because New Brunswick is the first salmon farming area in the world that has actually eradicated infectious salmon anemia. ISA actually has been eradicated in New Brunswick as a consequence of the efforts for detection and enhanced biosecurity protocols. There is ongoing active surveillance and passive surveillance programs that exist.

Another achievement is on slide 9. Charlotte County is a hub. It is a knowledge cluster. It is also a processing hub. On the research side the amount of success the aquaculture industry has enjoyed has been largely part of the researchers that have existed. Over 30 years ago researchers and industry people in places like the Huntsman Marine Science Centre and the St. Andrews Biological Station learned and did the research that was necessary to build this industry. That is an important part of the research cluster. Traditionally we in New Brunswick have been a location of both lobster and herring processing, but as a processing hub in St. George, New Brunswick, there is a lot of salmon that is being processed there. Salmon is coming in from other parts of Atlantic Canada and from the state of Maine. It is processed in our processing facilities in St. George, New Brunswick.

The next one is slide 10. It talks about the Bay Management Area of the production system that exists. This was the start of a three-year cycle where salmon was grown in different zones. It is through this three-year cycle that it was possible to actually identify and ensure that a biosecurity protocol was put in place. This is something that has been set up since 2006. It involved very intense oceanographic research to create these various zones within the bay management system and it involved very intensive consultation with industry. At the time there were actually 50 farms that existed, but it worked and it is very much a part of why ISA was eradicated in New Brunswick.

The next three slides touch very briefly on a number of other programs such as the bay management plan system for the east coast New Brunswick shellfish business. This basically is about farming in zones. Instead of having individual leases and requests around an individual lease it is actually around the idea of that this zone is acceptable for farming. There is a lot of activity happening on that.

There is a lot of activity happening and a lot of achievements around the robust environmental monitoring program. Annual audits are posted on the website of our sister agency. They are actually putting these results up on websites on an annual basis. The Integrated Pest Management plan is something that is working very well promoting the health and welfare of salmon and minimizing the impacts that are happening to the rest of the stakeholders and the rest of the environment.

I am moving right along quickly and now referring to slide 14 and reinforcing the knowledge cluster that exists. There has been a lot of investment in fish health not only by us but by industry and the federal government. We work very closely with the Atlantic Veterinary College and in particular around the sea lice database management system that exists.

I will take a few minutes now to talk about New Brunswick's achievements and the containment and escape legislation that exists. This is on slide 15 of the handout. The legislation basically was set up in New Brunswick in 2010. We are actually going through revisions now. There are actually revisions happening in 2014. We are looking at a joint governance document that has been developed between the federal and provincial governments. An industry code of containment is in place. It is under revision and is being looked at as the cornerstone for the document that will be used by other provinces. An important part of the containment and escape legislation is that it is critical to ensure that the reporting of this is done not only to other government agencies but also to other stakeholders and to the state of Maine.

I will now get into the nitty-gritties of our discussions this morning and that is the challenges. The focus has been that there are a lot of opportunities for aquaculture in Canada. New Brunswick has certainly benefited from having aquaculture for over 30 years but that growth had stagnated. With the next few slides I will basically bring to the fore some of those areas where we have heard from industry or have experienced ourselves, areas that may potentially have contributed to that.

First of all there are areas where there are wild shellfish closures because of water quality, et cetera. These closures can inadvertently impact aquaculture operations that may be located within a similar zone. Aquaculture is not defined or recognized under federal legislation. I just want to give you one example of that. In some of our communities there are many areas where aquaculture vessels and traditional fisheries vessels would share the same resources. It is very much a shared infrastructure such as wharves and things like this, but the Small Craft Harbours branch of the Department of Fisheries and Oceans does not have a mandate to look after servicing or infrastructure for the aquaculture industry. This has created hardship in some of our communities that actually has affected all users. Aquaculture is actually operating within a federal framework but it does not always address the needs of the market for aquaculture. The example that I will give you on this one is that in the aquaculture industry cocktail oysters are a much appreciated and a beautiful small product that the market is very interested in. There has been a lot of success in marketing those. Unfortunately it is actually against the fisheries management regulations within our Department of Fisheries and Oceans to actually harvest them of that size. This is an area where there is actually a contradiction. You could actually grow them to that size. The market wants them that size but there actually is a contradiction with how it exists for the harvesting requirements from a DFO perspective.

It is important to mention that in section 32 of the Department of Fisheries and Oceans basically you cannot kill fish. I am sorry. I am using my own words. The Department of Fisheries and Oceans would recognize sea lice as being a fish. Sea lice obviously are a huge pest and a problem for the aquaculture industry. It is something you do want to get off the flesh of our salmon.

I am now on slide 17 of the challenges. In this one the point we are making is that the federal government DFO does not have a development mandate. The mandate, as you know, supports and advocates commercial, recreational and Aboriginal fisheries, but a development mandate does not really exists. There also are some issues from what we understand around investor confidence. In the province of New Brunswick that is not so much of a problem. We actually have 20-year leases and three-year cycles that match the production cycles of our aquaculture industry. That means it is possible for the businesses that invested heavily in the aquaculture industry to have some degree of investor confidence. We understand that does not exist in all parts of Canada.

On slide 18 I just want to pull out the discussion around the Supreme Court decision wherein British Columbia aquaculture is considered a fishery. This has led to a number of different impacts. The most important is duplication so you will hear me repeat the word duplication a number of times. A lot of duplication certainly exists between the provinces and the federal government around aquaculture and the acts and regulations around aquaculture. There is also uncertainty because of the fact that DFO regulates in British Columbia and Prince Edward Island but not in other parts of Canada. Some degree of confusion or uncertainty and duplication exists around those areas.

The last statement is important enough to us from the department. It indicates that there is a valid argument that aquaculture is a form of farming rather than fishing and that growth and development of that sector could potentially reside within Agriculture and Agri-Food Canada.

That is the last slide to refer to the challenges that exist. We have actually distributed to you on slide 19 a visual image of the most profound of those challenges, the duplication of roles and responsibilities that exists. This is only one example in the fish farming business and this is fish health management. On this slide you see the various aspects that are part of the fish health program. Along the top on the green bar you can see the different agencies and the federal and provincial governments that are actually involved in the roles and responsibilities around that.

You have the provinces so basically we are involved in all of these pieces from site surveillance and field operations all the way down the list. The Department of Fisheries and Oceans is there as is the CFIA. They are involved in site surveillance as well as sampling. Environment Canada is involved in that and so too is Health Canada through the PMRA. In this visual you can see just around fish health the extent of duplication that exists.

Obviously there is an enormous amount of overlap. Whatever the future is in the world of acts and regulations for aquaculture, it is something that we certainly would not want to see add further to this regulatory duplication of roles and responsibilities as they exist on this slide.

On the last slide basically we have our wish list of what we would like to see in the future. Basically the Province of New Brunswick through our department is asking for a robust framework that recognizes the development opportunities that exist and recognizes opportunities to have that growth in a sustainable manner. It recognizes the need for appropriate checks and balances and clear roles and responsibilities between federal and provincial agencies to avoid that duplication.

Lastly, and certainly within the current environment of fiscal responsibilities and efficiencies within our governments, it is very important to address the roles and responsibilities duplications. We put a lot of resources into the aquaculture industry and it is hoped they are not duplicated.

Thank you very much for the opportunity to present these opening remarks. We now welcome any questions.

The Chair: Thank you very much for the great overview. We have certainly heard some of the things in other places, but there are a few that are unique to New Brunswick as well. I am looking forward to the question and answer period.

We are going to go to our deputy chair for the first questions, Senator Hubley, please.

Senator Hubley: Thank you for the presentation. It does give us an excellent overview as to the focus of governments on the aquaculture industry. I am really taken by the slide on the duplication of roles and responsibilities. Do you have a solution to this? Do you see having separate regulations and a department for aquaculture? Is this something that is so onerous on people who are looking to get into the industry that it becomes a deterrent rather than an encouragement to have to deal with so many departments, so many different organizations and so many regulations to be addressed? I am wondering if you would speak on that.

Ms. Brewer-Dalton: I can address your question. One of the things that we find very challenging within the slide is that we know there has to be a partnership between the federal government and the provincial government as far as these types of activities, especially on the fish health side. Fish health is of the utmost importance when you are farming. That goes for agriculture operations as well.

Some initiatives we have tried in the past have been successful and others have not. We have tried to build in an equivalency, so to speak, so that if the province is doing site sampling and surveillance we would share that information with our federal counterparts, whether it be through DFO or CFIA. Because we do have an active surveillance program we are on the site on a regular basis. If there is an emergency we can be out on the site within a very short period of time.

We have a provincial fish health lab located in St. George where we can actually do the diagnostics for those samples in a very short period of time. We feel it is a win-win situation for both the provinces and the federal government. It will address the requirements of the province through our regulatory programs and the requirements through the federal program. It would be more of an information sharing and an equivalency type of program that we would like to see.

Senator Stewart Olsen: Thank you for coming. This is an extremely good presentation especially on roles and responsibilities because, as Senator Hubley said, we have heard this from numerous people.

I just want to go through a few more things. I have a question. Does the province support start-up industries, for instance? This is important in small industries. I know we have an oyster farm just down the road from where I live. It is very hard to get started. Are there grants and loans available for something like that?

Mr. LaBelle: There is programming. For example, in the oyster sector we technical expertise within our department that is used to work with the actual industry. There are some loan programs that are available for capital spending. Again, if we come back to oyster development, the ACOA programs provide capital input. There is not a lot of operational capital available from public sectors. We strive to ensure that the conditions are there so those businesses can operate and that they have access to private capital. We have been fairly successful with that.

As was mentioned, we have tenure programs in New Brunswick where long-term leases and long-term licences allow the operators to use that as part of their financing structure or their collateral for it. In addressing the risks there are things we can do in terms of, as mentioned, the ISA. It can be an extremely expensive disease if it gets in but by making sure that we do not have I and that we have it under control provides a better economic outlook.

A number of things get in the way in terms of just the regulatory costs. For example, if you are setting up an oyster farm you have to advertise the lease for the lease and you have to advertise the lease for the navigable waters protection program. Everybody basically asks that all this stuff be done according to their regulations so you have another example of duplication.

Senator Stewart Olsen: I have one comment and then one small question.

It seems that almost the country has to commit. I know in Scotland they committed to aquaculture and so they work together provincially and federally. It is not provincially but you know what I mean. They developed something that actually would encourage growth. That is my comment. I see that that could take us quite far. We have a huge advantage in Canada for this industry and if we do it right it would be something really good for the rural areas in the country.

The question I have is on the marketing angle. You were speaking about oyster size. Is that set by the province or is that set federally? I am thinking of lobster too. I know we had an issue with the size of P.E.I. lobsters and somebody saying you had to fish this size and whatever. I am just wondering how that has worked out.

Ms. Watson: That is actually federal. It is under the fisheries management branch of Department of Fisheries and Oceans.

Senator Stewart Olsen: Is it strictly federal?

Ms. Watson: It is strictly federal, yes.

Mr. LaBelle: One of the issues is the fact that most provinces have an aquaculture act that defines what aquaculture is. On a national level we do not have a definition of aquaculture. It is not recognized as an activity. We have a 100-year-old Fisheries Act. It is not a disastrous application to aquaculture because there are huge efforts being done by our colleagues at DFO to accommodate the realities. A fishery creates property when you actually catch the fish. Until then it is not property. It is a common resource. In aquaculture you are taking fish, you are raising them, you are investing in them, you are borrowing in order to be able to do that, and you are exercising husbandry to do it. That is not recognized under the Fisheries Act.

We have regulations that say that oysters should be three inches before you harvest them which makes sense in a wild environment because it is common and you have to have some controls to prevent the tragedy of the commons. In aquaculture that does not apply. A two-and-a-half-inch cocktail oyster, a greatly sought after product, is actually illegal. We run into the same thing in terms of when you can harvest oysters. If the area is closed you are not supposed to take those oysters up. We have to go through all kinds of licensing and permit processes to take the oysters out of those leases and move them to the clean water.

Normally you do not want the general public going out and harvesting on those beds because they are contaminated and people will get sick, but in the case where you are taking your stock off of your lease and moving it to another lease that is clean water you get all kinds of impediments. From our perspective if we had some federal designation of aquaculture as agriculture for which there are all of these property rights and processes, et cetera, that would help with the clarity, ownership and tenure.

The other side of that is that in the aquaculture industry per se we do not have the development tools and the development programs that you would normally see in agriculture. In agriculture they have something called minor use and minor species program for drugs, for the cost of registering drugs and for the fast-tracking of those drugs.

There has to be some public help in that because the manufacturers do not have enough volume to make it worthwhile to spend $273,000 to register a drug in Canada. With the oyster industry or with the salmon industry we do not have enough disease, which is a good thing, to justify the regulatory costs for the people that are manufacturing the products. There is a specific example of where agriculture has a framework.

Senator Poirier: Good morning and thank you for being here.

You mentioned in your presentation, and we talked about it, whether aquaculture should be with the agriculture because it is a farming issue. We have heard that at different areas also. In your point of view what would be the advantages for them to be with the agriculture if it is more related to farming? Would it be fewer regulations? Would it be different regulations? Would there be more process put in place to help them? Is it a disadvantage or an advantage for them to be there in your opinion?

Mr. LaBelle: We have had what we consider great success in New Brunswick by having a development mandate within our department and by having the public interest in terms of environmental and space being the responsibility of our Department of Environment. Fisheries and Oceans Canada has a very important role in protecting the public common fishery stocks and protecting the habitat that supports those stocks. Unfortunately DFO no longer has a development mandate. The Sustainable Aquaculture Program that has been reauthorized for five years concentrates specifically on a regulatory science. That is their mandate and that is what was authorized for their programs.

The types of research and development we see within Agriculture Canada in terms of husbandry, development and programs such as the MUMS program for drugs that I mentioned, et cetera, have no home at the federal level. From a public policy perspective, from our experience, the assurance that everybody has is that those people who are responsible for promoting the development and the economic development of the industry are not also responsible for protecting the public interest in the environmental field and the long-term viability and sustainability of that. It has been beneficial to us in our province to have that separation. We think that DFO is very well equipped for that protection and regulatory function in aquaculture now with the new sustainable aquaculture program. Even in the commercial fisheries since 1995 the role of development and economic development and getting value and costal development or development in communities is not there. It does not appear to be there.

Senator Poirier: The number of land farms in New Brunswick and elsewhere also, but since you are representing New Brunswick I will go there for now, for somebody wanting to get into aquaculture is it easier or harder for them to be in the land farming business than it would be to be in the open pens out in ocean when it comes to environmental issues, regulatory issues and dealing with DFO?

Ms. Brewer-Dalton: Whether you are going to get into marine site farming or on land farming the cost associated is quite grand. Operationally you need quite a bit of capital to start up any one of those businesses. We have a track record in New Brunswick over the last 30 years for marine farming. We have improved over the years. The regulatory structure that is in place is a very robust one. As with any regulatory structure I think there are improvements that can be made as new science becomes available. We are constantly trying to work within that type of framework.

As far as on land closed containment there are still a lot of questions with regard to closed containment. There are some challenges with operational capital. Based on some of the reports that have been put out, the operational capital you would need to start up that type of business would be insurmountable for most people. To grow those types of systems to the same production level that we have in marine salmon farms, at this point in time I do not think you would be able to do it cost efficiently.

I think there are also a lot of questions with respect to a regulatory framework that would be in place for land base which has not really been developed. We have regulations in place for hatcheries which supply our marine salmon farms so I could see a model based similarly to that but those issues have not really been fleshed out and worked out. There would be some challenges in being able to develop an additional regulatory framework for land based or closed containment systems.

Senator Poirier: That was the third place where I was going to go. One of the things that we did hear, specifically more on the land farming, was the cost of the start-up and the access to funding to continue because a lot of the times it could take four, five or six years before you get a return on your investment. It is hard to be able to get the extra funding sometimes you need to survive until you get into a rolling profit margin year after year.

Senator Lovelace Nicholas: If I were to start up a business for farming on land, how hard is it to find a site to grow fish or to farm fish?

Mr. LaBelle: To do a complete transfer of the salmon industry in New Brunswick, for example, would require a huge amount of land. That would be an issue but it is not only getting the actual physical footprint. It is making sure that you have the water supplies that meet a very narrow criteria.

In addition to the large capital investment that you need to amortize over a relatively short period of time, another aspect is that the operating costs are extremely expensive. One of the major components is going to be electrical power which seems to be the limiting factor right now in terms of the cost operations. We have not yet really explored in any depth as to how much land would be available within New Brunswick because some of those operational issues are still outstanding.

We are obviously watching very carefully some of the experiments that are going on across North America. They do have the advantage usually of having free capital or capital that does not have to generate a return. The cycle of production in those commercial scale facilities is much different from doing it in a lab. They have not gone through enough years to see what kind of issues they are going to have with husbandry and disease.

We went through some pretty challenging times in New Brunswick with ISA when it first hit us. We went through some challenging times with winter chill when the water temperatures went way down. We worked through all of these challenges that we would not necessarily have anticipated in the past. If you change wholesale to on land you are going to have to go through that same learning process and that is going to present a lot of risk. There are some challenges to doing that with private capital.

Senator Lovelace Nicholas: I am wondering about the First Nations. I know they have access to the water and access to the lands to do farming and stuff. Are there many farming Aboriginal people?

Mr. LaBelle: We have seen so far an interest in oyster farming and some opportunity in embryonic projects. We think it would be an excellent contribution to the industry to be able to develop economic activity with the First Nations in aquaculture.

Senator Meredith: Ms. Watson, you mentioned in your presentation zoning and the process of an individual wanting to actually set up a farm. Talk to us about that process. We saw that Norway and Scotland have gone ahead and have identified zones to make it easier for individuals wanting to set up an aquaculture area in sort of a barn. Talk to us about that process and then I have a couple other questions as well.

Ms. Watson: I am going to turn it to Kathy to answer that.

Senator Meredith: You are not passing the buck, are you?

Ms. Brewer-Dalton: It is a team effort. Our aquaculture Bay Management Area system was set up generally on two basic principles. One was fish health. We wanted to be able to look at the zones.

Just to give you an idea, we used to have 24 different bay management areas. Now we are down to six approximately. We took a lot of really small areas and we took the science from our oceanographic experts down in St. Andrews to combine zones to make sure that there was a buffer between the zones. One of the main points was the fish health and any kind of water connection between the zones.

The other part of it was that we did have the industry on a two-year production cycle. We know that when we place smolt in the water it is usually 18 months generally by the time they make it to market size. With a two-year production cycle they found that there were times when they would get toward the end of their production cycle and there would have to be a fallow period. There has to be a period where there are no fish or nets on the farm to allow that site to recover. They found that they had to harvest their fish in a very short period of time toward the end of the production cycle and that was flooding the market. They did not have a lot of flexibility with respect to overloading the market at the end of their production season.

When we looked at changing the Bay Management Area structure, it was based on fish health but also being able to provide the farmers a little more flexibility in their marketing abilities and being able to put fish on the market. Now they have a three-year period when they can actually harvest their fish. We have a regulated fallow period that starts on February 15 of each year and it goes until April 15. We also have a mandatory bay-wide fallow so every site in that Bay Management Area has to be fallow for two months. We tried to incorporate those. It gives the farmer some flexibility but it also maintains the principles of fish health.

Senator Meredith: You mentioned about 2,200 employees within the agriculture industry in New Brunswick. Have you quantified in any way the economics of the numbers? If we are able to grow this industry within New Brunswick what would that look like in terms of employment and in terms of a contribution to the economy?

Ms. Watson: As far as opportunities to grow the industry certainly there are opportunities within the processing sector to continue to grow on aquaculture within finfish. There are opportunities for more value-add. There are opportunities to add to the processing capacity as it exists.

As I mentioned previously New Brunswick is a processing hub so there continues to be opportunities to pull in product from other areas and to continue to expand on those areas. There are a lot of opportunities to expand as well around shellfish.

In the shellfish business, as Joseph alluded to, there is certainly a lot of growth potential in terms of increasing the sites and looking at further opportunities not only of increased production levels but also of increased processing, different products and value-add to those as well. There could be much more employment based on the shellfish side as well as the salmon side.

Senator Meredith: What incentives has the province given to those individuals wanting to get into those sectors that you have been identifying?

Ms. Watson: There are opportunities that exist for expansion within the province but fairly limited. There are opportunities that exist through our economic development portfolio, for example, that would look at new third party certification or opportunities to expand on new technologies or innovation within the processing sector. There are opportunities that exist within the province to look at that. There are programs that would cover that but mostly loan guarantee type programs. As Joseph mentioned earlier, we actually refer to ACOA, the Atlantic Canada Opportunities Agency, as being a very important part of growing the sector.

Senator Meredith: My last question to you is with respect to your wish list. Would you not say or purport to have an aquaculture act that would eliminate all this duplication that is going on currently? Would you be supportive of such an act? As you have indicated you wanted to remain under the current agricultural act but within that space. What about a standalone aquaculture act?

Mr. LaBelle: I think our preference would be to see a piece of legislation that stands alone. We have experienced even provincially with some pieces of legislation that get unwieldy. It can stay focused. We do not propose to tell our federal colleagues how to organize their structures but we feel it is important to have a definition of aquaculture that addresses some of those property issues that we talked about and that it be an aquaculture act that is designed to promote the economic development of the aquaculture sector the way we do with agriculture, with a lot of the same themes: rural community sustainability, coastal community sustainability and those kinds of things, and programming that can help address some of the challenges we are going to be up against.

The Chair: Thank you to our witnesses for a great presentation. We have learned much here in New Brunswick in the past number of days and you have certainly clarified some of those issues for us. Thank you for your time.

Before I give the floor to our next panel of witnesses I want to remind senators that when it comes to the question time, I am going to allow a question with a short supplementary. If time allows for a second round we will go through it again but it is just in the essence of time because we have many panels to appear before us today. While you are phrasing your questions remember that.

Before we ask the witnesses to introduce themselves I would like to take this opportunity since we have a group here from Prince Edward Island to officially welcome Senator Hubley back among us after her trip overseas. She is recovering very well and we are delighted to have her here with us today. Welcome back.

I ask the witnesses to take time to introduce themselves and I then understand they have some opening remarks.

Richard Gallant, Deputy Minister, Department of Fisheries, Aquaculture and Rural Development, Government of Prince Edward Island: Richard Gallant, Deputy Minister of Fisheries, Aquaculture, Rural Development, Prince Edward Island.

Hon. Ron W. MacKinley, MLA for Cornwall—Meadowbank, Minister of Fisheries, Aquaculture and Rural Development, Government of Prince Edward Island: Ron MacKinley, Minister of Fisheries, Aquaculture, Rural Development in the Province of Prince Edward Island.

Neil MacNair, Director, Aquaculture Division, Fisheries, Aquaculture and Rural Development, Government of Prince Edward Island: I am Neil MacNair. I am the Director of Fisheries, Aquaculture and Rural Development.

The Chair: I understand you have a presentation you would like to make first, Mr. Minister. The floor is yours.

Mr. MacKinley: My department is pleased to be here today to present to the Standing Senate Committee of Fisheries and Oceans. We are pleased to provide an overview of the aquaculture industry in the province of Prince Edward Island and to open further discussions on it. I will make some opening remarks and my deputy minister, Richard Gallant, and my director, Neil MacNair, will present some additional details for your review.

Aquaculture has been a great development for P.E.I. and a true success story which I know Libbe could speak to.

The industry has emerged from a good idea in the 1980s to a major contribution to the island economy. The cultivating of shellfish such as mussels, oysters and finfish such as salmon eggs and fry, and Atlantic halibut contributed more than $75 million to our very small province. That is a lot to accommodate P.E.I. The aquaculture sector has created more than 2,000 jobs in rural P.E.I. I am sure that senators here from New Brunswick and Newfoundland know how hard it is to create jobs in rural Prince Edward Island or anywhere in Atlantic Canada. Many of the jobs particularly in the mussel sector as year-round jobs too. It is good to hear that.

Aquaculture exists in every major waterway in Prince Edward Island and supports communities from Tignish to Souris. In other words as our premier said one island or one community from tip to tip. Prince Edward Island aquaculture products are recognized around the world. I could go to my iPad and contact my friends in Georgia or my friends in Florida and they would say, ''What should we have for dinner tonight, Ronnie'' or ''Which would you pick from the menu?'' It would be P.E.I. mussels or P.E.I. Malpeque oysters for that matter but mostly the mussels. Products like our world famous mussels, Malpeque oysters and many other oyster brands are enjoyed by consumers and are a major contributor to the food service retail business. We are even working on new products like farm-raised halibut. It is probably one of the first times ever that I know of where they are actually raising halibut with success. Now they are raising them from two to three pounds and they are going up as high as eight pounds.

We do have challenges in the province of Prince Edward Island. The regulations governing oyster aquaculture under Fisheries and Oceans are cumbersome and holding back development.

We are awaiting proposed legislation to control invasive species.

We are very concerned that the federal government ensure that the oyster parasite MSX be prevented from spreading to the P.E.I. oysters. Right now we are parasite-free.

Even the changes made to Temporary Foreign Worker Program by Minister Kenney have placed a major burden on our seafood sector at a time when we should have been gearing up to expand our markets, especially in the last three years where we have been seeing great opportunities around the world.

When I first became minister three years ago everybody was looking at China and everywhere else around the world. I thought maybe we should look at Canada too so we went to Alberta. In the first year there was about a 70 per cent increase in oysters in the province of Alberta. Last year, the second year, there was a 284 per cent increase in oyster sales to that province. Those are in competition with the U.S. market, the U.S. coming in. I believe in free trade but if you have a better product Canada will always win.

As long as the federal government is cooperative with federal programs and policies and can respond on a timely basis, aquaculture has an opportunity to continue to grow in the province of Prince Edward Island.

In the mussel sector there are several potential areas like the Malpeque Bay. The oyster sector is growing and the markets are looking for more oysters, as I said. There is nothing worse, because I was in business for years, than not having enough product to supply consumers. They will look elsewhere.

P.E.I. has good reserves of fresh and saltwater groundwater to support development of finfish hatcheries and land-based facilities.

As I said the issue here is supportive policies, regulations and changes that are needed being made on a timely basis. I am not blaming the federal government or anybody. I know in my own department to get something from plan A to B, C and D takes too long. When I became minister, I eliminated moving from plan A to B, C and D and moved it all together. People are in business and they cannot be bogged down with red tape.

Prince Edward Island has a supportive climate for aquaculture. The province has worked closely with the federal government and industry associations to develop the industry over the past 30 years. We have some great support institutions such as the Atlantic Veterinary College, the Culinary Institute of Canada, Canada's Smartest Kitchen, the NRC Institution of Nutrisciences and Health, and Bio Food Tech, in the province of Prince Edward Island which really means a lot if you want time and speed. When you take, for instance, a bunch of Sysco directors from Alberta and show them what you are doing with food safety and everything in consumers' minds it makes it easier to sell the product. You take them right there and showcase it.

I will conclude by saying that the future of aquaculture in Prince Edward Island is very bright. I will now turn it over to my deputy director of aquaculture for further information. Thank you very much.

Mr. MacNair: Thank you very much for providing us with the opportunity to talk to you today about aquaculture, a very important industry on P.E.I. I hope you all have a copy of the presentation that we can just flip through page by page.

The second page is just an overview of the presentation. I am going to speak to the first two points on the provincial roles and responsibilities and give a bit of an overview of the industry on P.E.I. My deputy minister will speak to the following two points.

The next page is our departmental mission statement to contribute to the growth of sustainable and prosperous fishing, aquaculture and seafood processing enterprises and to provide leadership in developing new approaches to rural community development, service delivery and employment programs, the majority of which are rural based.

As you know, aquaculture is a very rural-based business and provides a lot of opportunities in rural P.E.I. It fits very well under the mandate or mission statement of our department.

The mandate or mission statement of the division of which I am director is to provide advice, assistance and information to our growing aquaculture industry and to the estuarine shellfish industry. Both fall under our division.

In the aquaculture division we provide technical and biological services to both the shellfish and finfish sectors and we deliver financial programs that complement our developmental work.

The aquaculture industry has a long history in P.E.I. associated with agriculture and fishing which came before it. The spirit of innovation and self-reliance of those members of the agriculture and fishing industry moved forward into aquaculture when we developed aquaculture. Part of the reason why it is so successful is that kind of innovative spirit that comes with the people that work in the business. Before that they were successful farmers and fishers.

I have just a couple of points on the industry. A really important point for the senators to know is that the aquaculture industry operates in P.E.I. with a lot of public support. The public who supports agriculture and the fishery also supports aquaculture. That is an important point.

Bivalves, mussels and oysters are well recognized world-wide as being industries that are beneficial for the environment. They are very environmentally friendly industries. Our shellfish industry has developed a shellfish aquaculture environmental code of practice which it follows. It is very important for all industry members to sign on to that code.

Our finfish operations unlike some other provinces are all land-based with no marine cage culture. I believe you were at the halibut farm yesterday. It is primarily because we cannot go out on marine sites on P.E.I. The water is too warm in summer and it is too cold with ice cover in the winter. Many of our operations are now becoming third party certified for sustainability.

The aquaculture industry overall has provided a lot of wealth and job opportunities, as we mentioned earlier, in rural P.E.I. The farm gate value or landed value of over $37 million provides economic benefits of more than $75 million to our small economy in P.E.I.

Aquaculture is diversified. The fishery and a lot of people involved in the lobster fishery or oyster fishery are also now involved in aquaculture. This has allowed for diversification. At one time when the fishing was over a lot of the wharves were very quiet. Now they are busy year-round. It is great that diversification has happened.

The next slide is just an overview of the mussel aquaculture industry. It began in 1980 with harvests around 100,000 pounds. We expanded now to an annual harvest of 45 million to 50 million pounds. Eighty per cent of the mussels produced in North America or in Canada come from P.E.I. Its landed value is up to $30 million. This has been a huge success story for P.E.I. The industry was built by local growers, their innovative spirit and thinking, and local manufacturers who developed a lot of the equipment specific to our needs in P.E.I.

The next slide shows on the map where mussel activities occur in P.E.I. You can see a majority of the island has mussel aquaculture in it. There are more than 100 growers and nearly 300 leases with about 10,000 acres of water leased out to the industry. There are eight plants to process and move the product that employ about 1,500 people. As the minister mentioned many of those jobs are year-round.

The industry is based on collecting seed from the wild that is put into socks and grown out on the leases. It takes about 18 months or a bit longer to get a product to market.

In the next slide you will see some ice harvest. We harvest year-round. We harvest 52 weeks a year. The products are mainly marketed as fresh in North America. Some frozen product now has moved out of North America to countries such as Japan and China.

When we speak of the oyster industry we usually talk of both the fishing and aquaculture sectors because they are so closely linked. Traditionally there are two seasons where oysters are fished in P.E.I. One is in spring and the other is in the fall. The landings we report are for the island or for both the fishery and aquaculture. Some 70 per cent comes from the public fishery and approximately 30 per cent from aquaculture. In 2013 we landed just over seven million pounds with a value of close to $9 million.

On the next slide you will see again a map that shows where the oysters are fished and grown on P.E.I. in the majority of the waterways. In the fishery there are about 1,300 licences of which about 700 are active. The fishery is enhanced by aquaculture techniques. The shellfish association has an enhancement program which we fund. They collect seed. They grow and hold the seed for a little over a year using aquaculture techniques, and then they enhance public beds which helps the fishery year to year.

On the aquaculture side we have a bit over 500 growers now and 817 leases with about 6,500 acres in production. About 170 of those growers are using off-bottom techniques. In other words they are growing oysters in the water column using a variety of different techniques.

If you flip to the next slide you will see the industry relies on both the aquaculture side and on the wild fisheries side. Again like the mussel industry they rely on the wild collection of seed.

The next side shows the fishery. In the picture on the left it shows people fishing. They use tongs which is a traditional way of fishing. The other two pictures are different kinds of suspended aquaculture gear where oysters are being grown.

Oysters are marketed according to their shape. Small oysters under the legal size which have to come from aquaculture operations and are less than 76 millimetres are called cocktails. Market size oysters are harvested as either standards or cocktails according to the shape.

The minister mentioned that there is a lot of excitement about oysters currently. Some new development of markets in Calgary has really boosted our sales. There seems to be a great demand for oysters right now. It takes somewhere in the range of from three to four to six years to reach market size for oysters.

One point, and we will discuss this a bit later, is that the oyster aquaculture industry is currently governed under regulations that were designed to conserve the oyster fishery. That has resulted in some operational challenges for the oyster aquaculture industry.

The next slide is on our finfish aquaculture industry. It is entirely land-based as I mentioned. There are three hatcheries, one halibut grow-out facility which I believe you toured yesterday, and one research facility in the eastern end of the island. In the finfish side of things we specialize in hatchery products that we supply to the other provinces where they are grown out to market, except for the halibut operation of course. It is an important industry to P.E.I with a landed value of about $3 million in 2013.

As I mentioned we supply disease-free. We have very high quality groundwater so it is easy to provide disease-free products to go to the other provinces for grow-out. Our industry is highly innovative and you would have seen that yesterday at the halibut operation.

The next slide is on the processing sector. Both on the oyster side and particularly on the mussel side again it is a very innovative industry. Much of the equipment, and an example is that picture of the holding systems on the right, was developed in P.E.I. A lot of the equipment was designed and developed by local manufacturers on P.E.I. It is a highly innovative part of our industry.

The next slide describes some of the research and development support agencies we have in P.E.I. The minister mentioned the Atlantic Vet College, and again I think you toured there yesterday. A very important of our aquaculture industry is from the work that is done at the Atlantic Vet College. We have our own research program in the department, the Aquaculture and Fisheries Research Initiative where we provide funding for development type research to match the priorities of industry. Of course Fisheries and Oceans Canada provides important research for us as well through ACRDP and in par to research programs that are offered by DFO. We have the NRC Institute for Nutrisciences and Health and ACOA through the Atlantic Innovation Fund. Bio Food Tech has been important for food research in Charlottetown and Canada's Smartest Kitchen at Holland College. They are all important support research and development agencies for us.

Mr. Gallant: I have a few slides to go over here related to aquaculture policy.

The leasing program in the province is delivered by Fisheries and Oceans Canada. It is under an MOU with the province that actually dates back to 1928 but was reaffirmed in 1987 with the commercial agreement on aquaculture for the province.

The policy input into the program is through an Aquaculture Leasing Management Board that provides advice to DFO and guides the program. The board is quite unique. It is tripartite and involves Fisheries and Oceans Canada, the province and industry all at the table setting policy direction for the program. All partners contribute financially to the program. The program operates on about $500,000 a year and each of the parties put in a financial contribution toward the program. Industry's contribution is through lease fees. Lease fees are through an approval with the Federal Treasury Board and go back into operating the leasing service in the province.

The leasing board provides management advice and direction to the aquaculture leasing program by assuring co-managed and co-funded mechanism existing under a framework where policy decisions are made and shared by the stakeholders. It provides direction and policy advice to the leasing division. That is the group of people that actually do the work. It provides advice relative to a shellfish spat collection policy that is administered by the gulf region over here in Moncton. It approves the priorities, the business plan, the financial plan and the work plan for the aquaculture leasing division that exists within Fisheries and Oceans.

The management board has some committees that fall under it. There is a referral committee that deals with individual applications. The management board does not deal with individual requests but a referral committee made up of federal and provincial members does.

There is an environmental adaptive management committee which looks at kind of new and emerging information that may come available in relation to aquaculture and the environment. There is an appeal process and an appeal committee set up. If an applicant feels that they were wrongly done by they have an opportunity to lodge an appeal and have it heard.

The decisions that are made on individual lease applications take into consideration the Federal Fisheries Act, the Navigable Waters Protection Act, Canadian Environmental Assessment Act, Species at Risk Act, and provincial acts and regulations that may apply to aquaculture. It needs to be stressed that DFO has the final say on all leasing matters. No aquaculture licence is issued on P.E.I. Our growers have an aquaculture lease. They do not have an aquaculture licence like some of the other provinces. Shellfish farmers are issued a lease; finfish farmers are issued a permit.

The leasing program operates under an aquaculture zoning system that was developed back in the early 1980s. The zoning system has created a balance between areas that are used for aquaculture development, areas that may be used for commercial fishing, areas that accommodate recreational boating, provincial and federal parks, and other marine-based activities.

The zoning system is critical and I was around when that was first developed. It really laid the framework and minimized any kind of conflict when it came to the marine environment. History has proven that the aquaculture sector holds a social licence.

For each of the bays and waterways the picture on that page just shows kind of a marking scheme that the growers would use to mark the navigation corridors. Within that area there is a marina in Montague on the Montague-Brudenell River. There is a small marina at Brudenell near the golf course. There is a commercial harbour at Georgetown. There is also a harbour authority now that manages the former Transport Canada wharf and a major recreational boating sector. All of that co-exists. The minister made the comment yesterday on his history as a politician and I will say in my history as a bureaucrat we get very, very, very few complaints in relation to interaction with aquaculture.

The code of practice that Neil referred to is an industry-driven code of practice. It was developed in 2002. I think you are going to hear from the Aquaculture Alliance later that owns that code of practice. The code of practice is a document that articulates how industry will deal with some of the environmental interactions with their industry. It really is a document that says an industry is prepared to do things a certain way so that government does not have to come in and develop regulations to tell an industry how to do things a certain way. The code of practice is a really important document in my mind when it comes to Prince Edward Island.

All shellfish growers with aquaculture leases are signed on to the code of practice. It includes things like site planning, introductions, transfers, site maintenance, fouling control, predator control, wildlife encounters, waste management, the kinds of things they use to anchor their lines, and how they do their business. It had considerable input from both levels of government, provincial and federal, when it was developed and it is still an active document today.

In terms of regulatory concerns on the next page under oyster aquaculture, the oysters are regulated under legislation designed to manage the wild fishery. Two sets of regulations, the Maritime Provinces Fishery Regulations and the Management of Contaminated Fisheries Regulations. I know the oyster industry is growing in the province and there are some issues there that need to get addressed. While there is a policy that a leaseholder can harvest undersized oysters from their lease they can only do that certain times of the year. There are certain conditions. They cannot hold a public fishing licence at the same time that they hold a cocktail oyster permit. Many of our oyster growers are fishermen and oyster growers trying to make a living. That kind of creates a potential conflict.

If an oyster grower wants to transfer oysters from one lease to another lease, and even if those two leases are in the same body of water, they need a permit to move their oysters between two leases. They cannot get that permit whenever they want it and that leads to concern. If an oyster grower wants to take their oysters ashore and work in a building to cull them, as we call it, or grade them they need a permit to do that. That permit often is cumbersome and open to some restriction.

The typical lease harvest season because of the regulations is from the middle of August until the following April 30, but leaseholders will say, ''I want to be able to harvest my oysters when the processor wants them and if he wants them in May, June and July I want to be able to do that,'' but the regulations are cumbersome.

Some people are working on this but I think the speed of that needs to be enhanced to try and come up with some solutions. We are all about protecting the public fishery. We do not want to see the public fishery disadvantaged, but we do want to see aquaculture given some advantages or given a fair and level playing field to be able to carry out their business and grow the oyster industry in P.E.I.

We have been dealing with invasive species at P.E.I. for over 10 years. Invasive species have had a significant impact on our aquaculture sector. Our growers have developed technology to deal with invasive species. They have done a great job to innovate and develop some technology, but the supportive regulations around that are still under development. Sometimes we joke and say in the province we can introduce regulations at any cabinet meeting on any week, but it seems to take such a long period of time in the federal system to get these regulations examined and looked at to a point where something is done. It is frustrating provincially.

We have some concerns around fish health. The federal government is implementing a National Aquatic Animal Health Program. Fisheries and Oceans are involved now in terms of fish health protection regulations. One is going to sunset. The other is going to take over. There needs to be a seamless transition and time is kind of moving on.

In summary, as the minister alluded to aquaculture is a success story in Prince Edward Island. It has created a significant number of jobs. It has created a lot of wealth. It has created a lot of activity and it is a solid business for rural P.E.I.

The regulatory environment did not hold back the sector. We still have a well-developed mussel industry. We have an oyster industry that is growing and we have a land-based finfish industry but at the same time those supportive regulations need to be addressed.

The future growth of the industry will require federal leadership to address gaps in legislation but on a time line that industry requires. That is one thing that government can do to reduce red tape, deal with regulations on a timely basis, make the climate more favourable for aquaculture development, and hopefully have the programs in place that would support that development in the longer term.

With that we will pass it back to you and throw it open to questions.

The Chair: Thank you, gentlemen, for your presentation. It was very well put.

As a couple of you touched on we did have an opportunity to visit several locations on Prince Edward Island including the Atlantic Vet College and Halibut P.E.I. We were very impressed by what we saw. Certainly there are some great lessons to be learned but also the reason we are here is to address some of the challenges that you face. Mr. Gallant certainly put some of those forward very well.

I am going to have our first questions from our deputy chair, Senator Hubley, please.

Senator Hubley: Again, a warm welcome to you. It is great to have you with us today. Certainly the aquaculture industry is important to Prince Edward Island.

My question will be fairly short. It is going to be on the code of practices, the Shellfish Aquaculture Environmental Code of Practices. This is signed on to by all of the shellfish growers, I understand. Having signed on to the code of practices does that in any way speed up the process as far as regulations go? Are they dealing with a certain portion of regulations that otherwise they would have to be dealing with other departments on?

Mr. Gallant: I will take the question.

My view is that the code of practice is designed to replace regulation. When the code of practice was developed, and I can use some very simple examples, it was a document where probably regulations did not exist but industry said, ''We will operate in certain ways under our code of practice, so government we don't need you to implement regulations and enforce those regulations for this business.'' One very simple one is that in the early days of the mussel industry a number of the growers, particularly those that were collecting mussel seed or spat, were using plastic bottles or jugs. Let's call them vinegar jugs or various plastic bottles. What would happen is that the sun would break them down and they would break off and wash ashore. In some areas you would see hundreds and hundreds of these plastic bottles. It was becoming somewhat of an issue because people would phone the industry to complain. They would phone the province. They would phone the DFO leasing program. The industry said in its code of practice, ''We are going to ban the use of these plastic bottles and to go to marine-based, good quality flotation systems that do not break free,'' and they did that. If they did not do that in their code of practice the government might have had to say, ''We are going to put a regulation in place and ban the use of these plastic jugs.'' That is an example.

Senator Hubley: The code of practices that we are looking at is specific to Prince Edward Island?

Mr. Gallant: Other sectors and other industries in Canada may have codes of practices, but that one is specific to P.E.I. shellfish aquaculture.

Senator Hubley: I have another very quick question. We are certainly delighted that the Minister of Fisheries is here today. Given that aquaculture is under your Department of Fisheries, and even in your presentation you did refer to farming, do you see a time when aquaculture will have a standalone department so that there would be a Department of Agriculture, a Department of Fisheries and a Department of Aquaculture?

Mr. MacKinley: The answer to that is no. We are a small province. Maybe I shouldn't get into politics but I will put it this way: When the PCs were in power there was a minister of agriculture and a minister of fisheries and aquaculture. If you go to Nova Scotia and New Brunswick there are Liberal governments there and there is one minister for all of those departments. We made a commitment in our campaign that we would have a minister responsible for fisheries, aquaculture and rural development.

That is why we have already done that. We have looked at what you have talked about. That is why I am here today because we devout our full attention to the fishing industry, the carapace size or anything else. That was an idea of our soon-to-be retired premier. It was one of the things he wanted to get done. He did it. When he formed the cabinet he created a new cabinet position for this and rural development because it is all tied in together.

We have good cooperation with DFO as far as working with DFO, I will say that. I just noticed in the paper—I think it was Senator Hubley—something about a complaint about aquaculture, tourists, tours and people who owned cottage along the beach and property owners in the province of P.E.I., et cetera. I have been elected going on 29 years on December 2, but as Minister of Fisheries I had one complaint in one of my ridings that they were too close with their oyster leases. It was just a matter of talking to the oyster lease people and they widened it out. I have been out in mussel boats and everything else. The mussels have this new type of buoys. Being a farmer, I took the wheel of the fishing boat and was driving around those hulls. They didn't think I could. They didn't tell me I could drive over the buoys or the lines and they wouldn't get tangled up in the boats. Anyway I went in around the hulls and I was doing great, and then they said, ''Just drive over them to see what happens,'' so we drove over them. That technology is there today. Islanders love to see fishers out in the water. We know that jobs are being created in the province of Prince Edward Island. Other provinces may have some problems like that but as far as I know, and I could have my deputy allude to that, as Minister of Fisheries I have never had one complaint in all my time being there.

Senator Hubley: I just might respond to that very quickly. The question was referring to social licence. My response is to say that the industry, as far as the evidence we have heard, takes it very seriously. They ensure that they communicate not only with the communities but that they give as much information on the operation as they can.

It wasn't that I was saying it was an issue. I was saying that it is a non-issue because the industry itself is addressing that.

Mr. MacKinley: It is nice to get that clarified because it was just one thing I picked up out of the interview. It is good that you clarified it. Thank you very much.

The Chair: As another point of clarification, it is an issue in other provinces. We heard that from several other provinces. It is part of an ongoing concern. When you look at the totality of our report you need to take that into consideration. You are very fortunate in Prince Edward Island that it hasn't been an issue but in other provinces it is a very serious issue.

Mr. MacKinley: I have talked to some people in the industry. In the province of P.E.I. we sit on a committee, as Richard alluded to earlier, and the DFO has the final decision. If you go to Nova Scotia it is the decision left for the Province of Nova Scotia. I know they have problems over there. I don't think they have them that I know about in New Brunswick. I have been talking with the minister but I cannot speak for them. I do not know about Newfoundland either but in the province of Nova Scotia they have some problems. We are a way better off having DFO make the final decision. We alluded to how the committee is set up. Some of the provinces took the power over to themselves. I think they should have left the power with the federal government and have a committee and everybody working on it to bring it forward.

Mr. Chair: I am sure that will come up in our discussions again. Thank you very much.

Senator Stewart Olsen: Thank you for your very professional summary of aquaculture on P.E.I. I have one longer question and a very short supplementary.

I am interested in that you mentioned you deliver financial programs to assist in the development of aquaculture. Can you tell me just a bit about that? It is a bit unique, I think, from the provinces. I am not sure of that.

Mr. MacKinley: In the province of P.E.I. we see jobs in rural Prince Edward Island. It is not easy to create jobs in rural areas in Atlantic Canada, as everybody knows. That is why we have these programs there. I can allude to it but I am sure my deputy could do a lot better job, so I will let him talk about it. We even so much as spread spat on the lobster grounds and we have put quite a bit of funds into helping out the industry. We have the oyster program and all of that. I will let Richard finish up.

Mr. Gallant: I would say there has been a history of support in the aquaculture sector because it is a sector that has tremendous potential. It is a sector that has been growing and developing and at the same time it is still a sector that is relatively new. We have had some support, very modest support, around development of new technologies. We have also had some support in business development primarily in the oyster sector which is a sector that is not fully developed but has great potential. We have a couple of programs there.

In Prince Edward Island there has been a long history dating back to even when we had federal-provincial cost-shared agreements on supporting aquaculture and even now with getting ACOA on side for some projects and supporting some projects provincially. There is a long history of support to the sector.

Senator Stewart Olsen: I noticed on your maps that there is a lot of aquaculture. Do you have a lot of room for growth and would you consider working with other provinces — and I am thinking of New Brunswick which is right across the strait — on regulations and everything so that we could have an industry that is supported in Atlantic Canada by Atlantic Canadians?

Mr. MacKinley: We are always interested in working with other provinces. We have problems with enough mussel water right now. I know that some of our mussel growers are doing it maybe in Nova Scotia or something. When you are a small area you can only expand so much. I will let my deputy finish that one up.

Mr. Gallant: There is opportunity for growth in the mussel sector. Neil explained there are 10,000 acres leased for mussel development. The majority of that is under full production. There is one area within Malpeque Bay where some applications have been on hold for a period of years that the leasing program is trying to get sorted out. We would like to see those moved ahead and get to some conclusion.

There is a discussion ongoing of being able to support up to 1,500 acres in that area. That would be a 15 per cent expansion of the mussel business in P.E.I. Malpeque Bay is a huge body of water but it has many users in it. There is a commercial fishery in it for lobster. A few weeks of the year there is a commercial fishery for crab. There is a First Nations community. There is an oyster industry. There are many activities in there. We need to get that sorted out. The oyster sector has tremendous opportunity for growth. While there are nearly 5,500 acres leased that is not under full development. With some of the emerging technologies, what we call the off-bottom technology systems that deal quite effectively with your pests and your predators, there are a lot of growers who are investing money to develop oyster aquaculture. The market demand right now is strong so we need to take advantage of that.

There are also opportunities to utilize, which is what Halibut P.E.I. is doing, either fresh groundwater reserves or in their case groundwater saltwater that we have an abundance of in P.E.I.

Senator Stewart Olsen: Just as a commendation, I am really happy to hear that you understand the elimination of red tape for producers is fantastic and I think your code has a lot to do with that, so congratulations on that.

Senator Poirier: Actually I am going to pass because I had two questions and both have just been addressed. The one on the code of practice was first addressed and the other one was actually on growth and it has just been answered. Due to time I will pass. Thank you.

Senator Lovelace Nicholas: Mr. Minister, you mentioned that there is a holding back of development. Would that be because of regulations?

Mr. MacKinley: I will let my deputy answer. No, we need more water, like to plan it out and everything. It is a bit of a mixture as he alluded to and I will let him talk about Malpeque Bay.

Mr. Gallant: My reference to holding back development was in relation to the oyster industry. The industry needs supportive regulation that is clear and simple. In oysters it is a bit complex because there are regulations that support the wild fishery, if you will, and at the same time speak somewhat to aquaculture. The aquaculture sector is growing and it is kind of butting heads with those regulatory statements within Fisheries and Oceans. The industry has been calling to try and get that sorted out. It is not simple to have regulations changed or amended in the federal system, whereas provincially we are fairly nimble when it comes to regulatory amendments as long as we can figure out what we need to change. Federally it seems to take a long period of time, but the industry has been calling to have that reviewed and provide better support for their sector.

Senator Meredith: Thank you so much for your presentation.

Mr. Minister, you talked about the potential for finfish growth within P.E.I. in terms of halibut and salmon. Are you concerned at all in terms of sort of a contained environment whether there are sufficient policies in place to prevent any sort of disease?

Secondly, in terms of the slice that has been developed for those individuals who are farming right now, are you concerned that there could be an outbreak at all of any sort of diseases that would affect the industry?

Mr. MacKinley: I will turn that over to Neil as he works at that all the time. I will let you handle that, Neil. You are the expert in that.

Mr. MacNair: We do not have in the hatcheries the kinds of diseases they experience in marine finfish farms. Our water is very clean and it is disease-free so we do not have the kinds of issues with sea lice that you are discussing. We are not marine farms. We are hatcheries based on land. However with the changes in CFIA taking over the National Aquatic Animal Health Program and DFO's sunsetting of the Fish Health Protection Regulations there is a potential gap there. Right now the fish health regulations look after a lot of diseases that CFIA will not. It seems to be in the transfer from province to province there is a potential gap for some of those diseases that are considered to be production diseases by CFIA that are a concern for farmers such as bacterial kidney disease, ciguatera and other things like that.

The CFIA does not see them as diseases of international importance. They see them more as farm production diseases, yet we are concerned about their induction into the province. There is a potential gap there as DFO sunsets that program which currently looks at those diseases. We see a bit of an issue there.

Senator Meredith: Regarding invasive species you have talked about legislation, Mr. Gallant, being discussed. One of the farms that we visited said that they have some processes in place to deal with these clumps on to mussels or whatever they are called. Over time they have been able to put some processes in place. What are you doing to help the industry in that regard because obviously you are producing a lot of mussels and so on and this is a concern to farmers?

Mr. Gallant: I have maybe two points on that. A tremendous amount of dollars has been invested provincially in conjunction with the federal government and the industry into doing research and developing technology to treat various tunicate species on mussel crop or deal with it in the processing plants. Industries has made some tremendous strides toward that, to a point where three to four years ago we had many, many growers that were really questioning whether or not they wanted to be involved in the future of the mussel industry and losing confidence. Over the past period of time now they are more confident that they can grow mussels and manage invasive species or tunicates that are on the mussels.

There has been a tremendous investment. It was a good example of provincial and federal governments and the industry putting their shoulder together to move that. Is more investment needed? Sure, to develop and refine technologies it would be welcome.

The Chair: Thank you, senators, and thank you to our witnesses for another great presentation. Certainly some lessons have been learned from your operation in Prince Edward Island for sure.

I would like to thank our next panel of witnesses for taking the time to join us here today. We have had the opportunity to meet some of you in the past and we are certainly looking forward to your presentations.

What I would ask you to do first, if you could, is introduce yourselves and who you represent. Then I understand that we have some opening remarks, and following that we will have some questions from our senators.

Dawn Runighan, Facility Manager, Aqua Bounty Canada, and President, Prince Edward Island Finfish Association: I am Dawn Runighan and I am representing the finfish growers in Prince Edward Island.

Ann Worth, Executive Director, Prince Edward Island Aquaculture Alliance: My name is Ann Worth. I am the Executive Director of the Prince Edward Island Aquaculture Alliance. The Finfish Growers Association is one of the three industry associations under our umbrella.

Larry Ingalls, Chair, Atlantic Canada Fish Farmers Association, and President, Northern Harvest Sea Farms: Larry Ingalls, representing the chair of the Atlantic Aquaculture Association and I am the President of Northern Harvest Sea Farms.

Murray Hill, Regional Manager, Atlantic Canada Fish Farmers Association: Good morning. I am Murray Hill. I am the Regional Manager for Nova Scotia for the Atlantic Canada Fish Farmers Association.

The Chairman: Thank you once again for taking the time to join us here today.

We understand there are some opening remarks. Who would like to go first or have you drawn straws? All right, Murray, you were first at the table so you go first.

Mr. Hill: They were having a meeting back there and that is why I am first, sir.

It is a pleasure to be here to meet you senators and to be able to present before you on behalf of my association.

What I want to talk about today what is is often used as a defence for not moving forward in aquaculture and particularly salmon farming in Canada. I am referring to the perception that our industry lacks social licence. I have distributed both a copy of my remarks and a copy of the white paper that was done on behalf of the Canadian Aquaculture Industry Alliance. CAIA has allowed us to circulate its presentation on this report to you to support my address. It is attached. It was developed based on an extensive scan of peer reviewed social science papers published on social licence.

Ongoing public opinion polling conducted throughout the country and with consumers show significant support for farmed salmon and Canadian salmon farming. Polling in Nova Scotia over the past three years tells us that over 70 per cent of citizens support salmon farming expansion. What politician wouldn't want an approval level of 70 per cent? We are wondering if there is any other economic development activity that would stagnate if it had that kind of approval rating.

According to Brian Lee Crowley of the Macdonald-Laurier Institute, those who oppose certain developments exploit the concept of social licence to get their way. It has become a catch-all concept that opponents can wield against those with whom they disagree. Opponents say we do not agree with your project so you do not have social licence, but we would contend that is a misrepresentation of what social licence actually is.

It is not as simple or as definitive as that. It is dynamic. It changes with new information, new people and new circumstances. It is also not necessarily all-encompassing. Social licence needs to be earned and then maintained by companies at the community level and it is not likely or expected to ever represent a 100 per cent consensus.

The challenge for aquaculture is the ongoing need to counter reality versus perception. The reality that salmon farmers have built and maintained their industry for decades in Canada through partnerships with local communities. However a small but vocal group of anti-salmon farm activists will have you believe the industry does not have social licence. They often go out of their way to use false information to undermine public confidence and existing relationships that have been built over the past almost four decades in the very areas where farming takes place.

All the false claims have been disproven or debunked many times so why does progress continue to be paralyzed? We would suggest that it is not up to government to grant social licence. However our government does have a role to play. They need to support industry in building social licence by establishing a sound, risk-based management system. They can do that. They can assist industry to engage communities by supporting research and development programs, supporting development and adoption of new technologies and innovative ways of doing business, ensuring employment and training programs are available, and endorsing systems of standards and publically recognized best practices.

Ensuring that a sound business and investment climate exists is critical. All these activities help companies demonstrate legitimacy. Delivering on these roles is crucial but unfortunately governments at times have fallen short.

The RIAS report that I have circulated clearly shows that aquaculture companies in our region have achieved and continue to maintain high levels of social licence within their communities. Our companies, their employees and our association continue to work with our communities to nurture and maintain these relationships. We do it through community liaison groups. We do it through conservation activities and we do it through a wide range of community-based activities. We also continue to tell our story. We are educating people about how we farm, what we do to protect the marine environment, and how we bring prosperity to coastal communities while growing one of the world's healthiest foods.

Senators, I urge you to review the material on social licence. I urge you to look both at our industry and at our opposition to our industry critically. If Canada is serious about wanting to deliver on employment and wealth generation for rural coastal communities we need to work together to make that happen. We need your support. Despite all of Canada's natural advantages that support aquaculture development our industry has been stalled for over a dozen years. You have seen the charts that show we are losing market share and that we are falling behind key competitors like Scotland and Norway. We are also losing investment to other countries, even from our own local companies. We are seeing our young people go west where other jurisdictions have said yes to resource development.

Thirty years of studies, expert opinions and committees have called for fundamental change in legislation, regulations and policies because our regulatory system is overly complex, uncertain and confusing. There is federal and provincial overlap and duplication and nationally we have a patchwork quilt of statute created within the Fisheries Act. It is a piece of legislation designed to manage a wild fishery, not support a farming industry.

You have met and heard from a wide cross-section of our industry that have pointed out we can and do produce a quality product with minimal impact to our natural ecosystem, far less than any other food producing sector in Canada. You have seen Canadian salmon farms. You have seen salmon farms in Norway and Scotland. You know that over 50 per cent of our seafood comes from farms. You know that we are running out of arable land and fresh water to produce traditional protein and plants. I urge you to take the necessary steps to work with us to grow our industry in a sustainable way for the benefit of all Canadians. Thank you.

Mr. Ingalls: Thank you and good morning. You have my presentation. I will try not to read it verbatim the whole way through.

I am starting with the fact that not many people know about the Atlantic Canada fish farming industry. The reality is two privately owned family businesses from Charlotte County, New Brunswick, have been around for approximately 30 years, one of which is my company. We produce upwards of and I will even say over 50 per cent of all the Atlantic salmon produced in North America basically here in the Maritimes. If you think about that, it is pretty impressive in regards to what goes on in the world and who our competitors really are.

The companies face stiff competition not just from companies that farm in North America but also internationally. They are mostly on the west coast. Very few of our competitors are privately owned anymore. They are listed in Marine Harvest. One of them is listed on the New York Stock Exchange and the majority of the other major players are on the Oslo and Santiago Stock Exchanges as well. It is kind of unique at the level we are at and who our competitors are internationally. With the way things happen now we are just as likely to see a Norwegian fish or a Scottish fish in a New York restaurant as New Brunswick or a Maritimes fish even though we are much closer with air freight and the transportation system today.

We are pretty proud of this industry. We know we can do more to build our region's economy. This region is facing significant debt and high unemployment. I am sure you will hear as you go around about the exodus of our youth to the west and an aging population. Despite the obvious need for homegrown jobs and a strong local tax base to support the community infrastructure and the full economic potential in New Brunswick, Nova Scotia, Newfoundland and Prince Edward Island, the industry continues to go untapped.

Our local companies want to invest in our own region. We have dedicated hardworking people that want to continue their families' century-old traditions of working on the water. In the past even our company and the other major company here have been elsewhere. We at one time farmed. We spent 20 years farming and working in Chile and our counterpart is there today as well as in Scotland. Sometimes we as an industry are forced to actually leave the area with investment because of lack of opportunity.

We can help the growing demand for seafood and by doing so create jobs at home, generate investment and renew the tax base of our rural communities where 90 per cent of the jobs in our industry are full time. We are building an industry that will help keep our young people at home by offering them challenging, full-time work and careers. We invested a lot in training with our employees because we have to and because we want to keep them.

Setting the stage for Atlantic Canada to tap into the full potential of what aquaculture has to offer is not just the responsibility of our provincial government. A strong national platform is also critical. That is why the Canadian industry is focused on the development of a national aquaculture act along with shaping regulatory and policy framework that will build the foundation for responsible industry growth.

Our industry supports a modern and coherent regulatory framework that protects the public interest, is evidence-based, efficient, predictable and accountable and encourages investor confidence. Regulations must also be free of red tape and support the implementation of innovations in a timely manner. The fact is that today over 50 per cent of the seafood consumed comes from farming the oceans. The world's population as we know is growing and so is the demand for healthy protein. Aquaculture is crucial to supplying the world's food needs. According to the 2013 analysis by the Earth Policy Institute world farmed fish production has now for the first time topped beef production in the world.

The majority of Atlantic Canadians supports the responsible and strategic growth of salmon farming industry needs and already meets high regulatory standards that cover all aspects of our operations. In fact in regard to sustainability the companies here in the east have been leaders in the world. We are the first company in the world whose sustainability programs have attained three-star best aquaculture practice certification. We will be able to announce probably next week that we will be the first company in the world to attain four-star certification. A New Brunswick maritime company was the first in the world to have a processing plant and this will be the first hatchery. We have taken upon ourselves to be leaders in the world of sustainability in salmon farming and our company is not alone.

I know you people have been to other countries such as Scotland and Norway to see what goes on and what we are up against. They have strategic plans to grow their salmon industries on an annual basis and they do so. In Norway the salmon farm industry contribution to the GNP is enough to fund 65 per cent of its nursing homes. We could generate revenue here to help our provincial economies and social programs but ultimately a bit of a lack of vision as well as inefficient regulatory and policy frameworks certainly make it more difficult for investment and discourage some innovation.

Delay in action or no action will mean loss of jobs and economic opportunities from an industry that has proven to be economically and environmentally sustainable. The Canadian government needs to act now or an already dwindling workforce will bottom out unless there are opportunities for workers to stay at home. We cannot afford to keep saying no to responsible industries that can bring jobs to our region. Salmon farmers have always been and will continue to be collaborators and innovators who are dedicated to responsible growth of the industry. We are ready to work with governments and communities to take the necessary steps to tap into the economic potential before us.

Salmon farming is a natural fit for Atlantic Canada and its coastal communities. It is one of the few bright spots of hope in our region of a challenging future. I believe it is time to embrace us and the industry.

Ms. Worth: My name is Ann Worth and I serve as the Executive Director of the Prince Edward Island Aquaculture Alliance, the voice of the P.E.I. aquaculture industry serving 200 member companies inclusive of aquaculture growers, processors, suppliers, researchers and academia.

With me today is Dawn Runighan, an active board member with the Alliance and the Finfish Growers Association and general manager with Aqua Bounty Canada, an aquaculture research in finfish production facility located in eastern Prince Edward Island.

I would like to begin by thanking the Senate committee members for their willingness to receive input from the Prince Edward Island Aquaculture Alliance. We wish to recognize the Senate committee for their proactive, consultative approach to engaging the Prince Edward Island finfish industry in this policy and regulatory review that seeks to understand the important business of aquaculture and help guide what the Canadian government can do to assist in the future growth and development of aquaculture in Canada.

I would also like to personally acknowledge and recognize Senator Elizabeth Hubley for her visit to the Alliance within the past calendar year to learn more about aquaculture in Prince Edward Island — it was a pleasure to have her — and to recognize Senator Manning who I had the pleasure of touring Halibut P.E.I. along with Minister Gail Shea. Both were really positive experiences.

To ensure capture of all important points we have submitted a formalized presentation to the Senate committee that will act as written supporting evidence for your further review. We have included a copy of a PowerPoint presentation in the information kit that we have provided today for your future reference and to follow along as we actually work through the presentation during the shellfish forum at eleven o'clock.

The alliance is proud to support the aquaculture industry in Prince Edward Island in its efforts to produce premium products by participating in industry-driven research and development on aquaculture related issues as well as facilitating discussion and problem solving of issues relevant to our industry. We also promote a cooperative spirit among all engaged in the Prince Edward Island aquaculture industry with an emphasis on improving the economics of the industry. We are growth and development oriented and we recognize the value of our sector and its importance as an economic wealth and job creator in our province. The net result is that our industry has evolved to be an effective global competitor and supplier of pristine, high quality shellfish and finfish products to multiple countries around the world.

Aquaculture is a very good business to be in on a global scale and is a massive opportunity for Canada, and Prince Edward Island is a living example of just how well it can work.

Aquaculture is the fastest growing food production sector in the world with an annual growth rate of 6 per cent. Aquaculture product demand is skyrocketing with increasing pressure on wild fish stocks.

In tangible terms and economic impact the Prince Edward Island industry contributes an estimated $200 million plus to Prince Edward Island's economy and employs over 2,000 people located in many rural communities around Prince Edward Island. When you look at the landed values of P.E.I aquaculture that number may seem out of whack but that number takes into account the direct value, the indirect value and the induced impacts that collectively combine to deliver a clear and accurate picture of what aquaculture really means in terms of economic value in the province.

We are here today to share a good news story. We will also be honest about business challenges facing our sector. Aquaculture in Prince Edward Island, by all intents and purposes, is still a pretty young business but over the course of the last 30 years we have had some tremendous success and have contributed to employment and economic development in a very meaningful way, particularly in rural Prince Edward Island.

Our natural assets are the foundation for success. We are fortunate to have an abundant supply of high quality groundwater that allows for dynamic rainbow trout, Atlantic salmon, halibut grow-out and nursery production units to thrive. Another key success factor is the innovation and environmentally conscious members of our industry that are committed to cultivating safe products and ensuring a sustainable environment.

Our industry believes and demonstrates that finfish aquaculture can be undertaken in harmony with the environment and that the sustainable use of the marine environment is a shared responsibility requiring a climate of cooperation among all resource users and regulatory authorities. I might add that we have a positive environment and cooperation in the province.

The industry is an important component to the multi-diverse Prince Edward Island economy and it is a unique success story spanning 30 years, as mentioned earlier, but I might describe it as controlled, paced, responsible aquaculture growth and development. It has not been fast in growth. It has been steady and nurturing and responsible.

The bulk of aquaculture activity in Prince Edward Island occurs in 25 plus bays and estuaries in many places in the province with the concentration in the eastern sections and northern coastline of the province. We are going to talk a little more in depth about what shellfish aquaculture looks like later. I recognize this is a finfish panel only so I will be verbatim in presenting some of my prepared remarks.

Prince Edward Island cultured species in finfish currently include land-based Atlantic salmon, rainbow trout and halibut. Due to conservation efforts the commercial Atlantic salmon fishery has been closed since 2000. Currently there is only a regulated recreational sport fishery for wild catch. The fishery has been replaced with what I might describe as a fantastic cultured Atlantic salmon industry.

Prince Edward Island has a strong history in cultured finfish hatchery production and exports much of its egg and fry production to other provinces in Atlantic Canada. The high quality stock allows other finfish aquaculture activity: smoked salmon, eggs, smolt, fingerlings and fry. We supply other business in the region with eggs and smaller fish to grow to market size. That is our niche and our expertise.

We also grow out halibut to market size. We are proud of our disease-free status and the high quality fish health care in the institutions that support our quality effort within the province. They are cornerstones to our success.

In Prince Edward Island, as was mentioned in an earlier presentation, aquaculture research is an institutional hub and key cluster of excellence with specialized expertise in fish health, genetics, climate change and technologies. Although the number of companies involved in land-based finfish production in the province is not large their impact is.

Aqua Bounty Canada, Dover Fish Hatchery/Northern Harvest, Cardigan Fish Hatchery/Northern Harvest, Ocean Trout Farms and Halibut P.E.I. are great examples of commercial operations that run excellent businesses and really care about their communities. We see that every day.

The 2013 direct value of aquaculture in Prince Edward Island combined to total almost $41 million. Cultured finfish represents just under 10 per cent of this but I might add is growing and flourishing every year.

The economic impact inclusive of collective value as mentioned earlier was $223 million, but what you may not be aware of is that we have an incredible spinoff industry as a result of our cluster of aquaculture excellence. It is important to mention that because it really has evolved to be a separate industry unto itself. It lives and breathes and succeeds around the success of aquaculture. Those supplier industries, as I referred to them, evolve around manufacturing, custom fabrication of metal, welding businesses, diving services, boat building and many other businesses that are clustered to supply aquaculture. This has evolved because of an industry that has been supported to grow.

We also possess significant institutional expertise with a specialized knowledge in research, science, food health and safety, marketing expertise, including the Atlantic Veterinary College, the University of Prince Edward Island, P.E.I. Bio Food Tech, the Culinary Institute of Canada and the Aquaculture Technologies Association of Canada. We have a small geography so we are able to come together to communicate, collaborate, develop together and learn from each other along the way.

The aquaculture sector impact is significant to the P.E.I. economy for several reasons. Most of its employment is in the rural areas of the province. The family-driven nature of the business keeps multi-generations together in business and promotes a strong sense of community. It keeps our young people at home with viable career options in their own local communities.

Healthy protein production on a local, regional, domestic and international scale is just simply a good business to be in. We are all becoming that much more nutritionally health conscious in caring for bodies and we happen to grow a very, very healthy protein. The awareness of the health benefits of seafood continue to grow.

Prince Edward Island aquaculture as an industry is dominantly export focused. All of those export revenues make their way back into our province. We build a recognition because of the high quality of the products we sell that frankly help buoy the export efforts of other industries. I like to refer to our aquaculture industry as a door opener in international business. If there is anybody here that has not experienced a high quality Prince Edward Island product then I would love to take you out for lunch maybe later.

There is a need for enhanced investment and expanded opportunities for First Nations and other stakeholders in aquaculture. We need to fully capitalize on the great opportunities for us that evolve from the Canada-EU free trade agreement. We need to invest in species diversification, operational growth and expansion. Innovation, perhaps an overused word, is extremely important. Use of technology, research and enhancing productivity continue to be an important priority for our sector. Sustainable paced growth and responsible development is how we have achieved success and how we envision the path forward. Aquaculture can be an opportunity for our young people as a viable place to stay home and build a career.

Our priorities, in review, include adopting innovative technologies that allow us to better manage and operate with improved efficiencies and facilitate environmentally sustainable harvesting practices which produce safe quality and valued products. There were was certainly some discussion about our industry code of practice earlier. I was glad to hear that. We continue to manage and protect our aquatic environment with that code of practice. I might add we regularly update that code of practice and review it to ensure that it is being followed and that it is fully supported. There may be some additional things that need to be added to it.

We champion targeted research and development activity that delivers benefits to the sector. We don't do that in isolation for sure. We work with DFO Science and with people with those kinds of expertise in our province and across the country.

The management of aquatic invasive and nuisance species has been and continues to be a key challenge for the industry. The simple business of growing a product successfully in a healthy environment and managing a crop in a cost effective fashion drives innovation. We saw that particularly in the shellfish industry over the past decade.

We need to continue to be advocates for strong promotion and marketing of our sector. It is a competitive world out there. At the end of the day demand drives strong farm gate value in our sectors. We need to facilitate needed investment in the sector. Governments are in the business of investing in industries that show promise and growth, and aquaculture should be top of the list.

We work with governments on funding initiatives and public policies in a regulatory environment that support our sector. I do not pretend that that is not complex environment. I think at one point we had taken a little list of what looked like 19 regulatory bodies that govern aquaculture. That is a lot of people to be accountable to. Certainly there is a risk of confusion, complexities, overlapping and duplication when dealing with that many levels of government on various requirements. Frankly compliance can be a bit mystifying at times.

Recruiting and retaining farm and processing plant labour is an important point that needs to be me made. You will hear about it again during the shellfish forum. We deal with labour shortages and frankly it is a restraint on growth for companies. I mention it here because governments do have a role to play in helping develop tools and programs that industry can use to address some of the labour shortages we are dealing with.

We have a regulatory system that is overly complex, uncertain and confusing. I am wrapping up now that my six minutes are up. We also see some overlapping and duplication in the rules as written for a wild fishery as was mentioned earlier. We are trying to live within a box that really does not describe our industry in an accurate way.

Policy and regulatory reform are needed. We as an advocacy group do our best to meet and speak with different levels of government about what are the real challenges around some of the language, some of the legislation, and some of the policies that restrict us and make it not much fun to go to work every day.

We need to drive the red tape out of the system and do that with a vengeance. We desire an enabling attitude within government. We recognize that various government departments have multiple mandates from compliance to science, et cetera, but an enabling attitude in government is about how we can help you grow.

We work closely with CAIA, as was mentioned earlier, to strive for improved, clear aquaculture regulation. It is true that aquaculture is more like farming than fishing and should be recognized as such. We see a continued bright future. We see new jobs, paced growth and responsible science-based management all contributing to a healthy food supply.

The Senate committee today has an opportunity to facilitate and share its growing knowledge of aquaculture. It is a great business in Prince Edward Island. I wouldn't deny we have the odd hiccup and yes, of course we have to go out after a tough winter and do an extra hard diligent job of shoreline cleanup if buoys have found their way on to shorelines. We do it; we have to walk the walk and we recognize that.

We encourage you to be bold, show leadership and champion required regulatory changes and needed investment to help the aquaculture industry thrive and grow. To Murray's point earlier, it is not always easy to do that in the face of adversity that may sometimes make us feel a little timid, but we need to look beyond that and do what we know is right based on science and good information. On that note, I will wrap up.

The Chairman: Thank you, Ann. Dawn, do you have any remarks to make?

Ms. Runighan: No, I will be happy to answer any questions.

The Chairman: Thank you all for your presentations. I fully understand that you need time to express yourself. We try to keep the senators in control but I let the witnesses have a bit of leeway. With that I would like to begin questions with our deputy chair, Senator Hubley, please.

Senator Hubley: Welcome to each one of you. Your presentations have been just wonderful. Again we are learning more about the aquaculture industry and different perspectives within the industry.

Something that we have not discussed a lot is the need for skilled workers. Certainly, Larry, you have brought that forward from your perspective because you are the CEO of a company. You probably face these issues on an ongoing basis. You, Ann as well, understand the importance of having skilled workers. I am wondering what can be done to address that issue I think of educating in our schools or having school programs especially on Prince Edward Island and in the Maritimes. We have a lot of fishing, fish-related activities and farming. A lot of information on those industries gets into the school system, but I think it is important now because of aquaculture and especially the need to revitalize our rural communities. It is a great opportunity to do that with aquaculture but to also keep young people in those communities involved in the community.

We have seen some excellent operations and I think any young person would be proud to be working there. They offer good working conditions. It is the future. They are part of the community and part of working in a very active industry.

I am wondering educational-wise what you think we should be doing to get more young people interested so that we will have a skilled workforce within the industry.

Mr. Ingalls: I will take a crack at it.

Speaking for our company I think we are approximately 350 employees. The fact of the matter is we should be about 400 but we cannot find the other 50. I would say we do a poor job in what you are suggesting about creating interest at the school levels. We really do not pick it up until sort of the university or the community college levels. I think is a good point. I think we probably have to do it. It is very difficult to recruit certainly those from outside the Maritimes to come to remote communities. It is next to impossible.

As a company we have a core base of skilled workers and they range anywhere from 18 years old to 75 years, believe it or not. We have people in our processing plants that are in their seventies and you would have to see what they do in a day. You wouldn't believe it. We are investing in training internally within the company. We need to train and bring people up through the system. It is a very good career opportunity. You do not have to be around that long in our environment to really work your way up through the ranks. We have to invest in that. We have to take the time to do it because these people are not coming from outside the Maritimes. It is rare.

I believe you are right. We have to maybe get in the future a little further back into the system, whether that would be in the high schools or even before that.

Ms. Runighan: Much of what Larry says is also true in Prince Edward Island. A lot of local folks end up being employed in our fish hatcheries and fish farming facilities. Some of them have a work base that is anywhere from the high school graduate level right up to Ph.D level graduates. It can be quite diverse. I know at our facility we have participated in co-op programs through the high schools which have worked really well. Right now I get calls from two to three students every semester wanting to get a job placement with us. I find that is a really good opportunity to have some students come out to see what working at a facility like ours would be like. They are going back and they are talking to their friends and letting them know what it is like.

There are also some other programs. We do as much OJT as we possibly can which helps, but like Larry said we have to invest a lot into training. Because each operation is specific you need to have a skill set that is specific to that operation. You invest a lot of time in training. If somebody calls me up and says, ''I have a two-week on the job training project. Can you do something with that?'' I often have to say no because within two weeks they are barely going to have an idea of what is actually happening. Six weeks and longer works a lot better for us.

Senator Hubley: I have another comment. Certainly coming from Prince Edward Island we hear of those shortages. I just wondered if there was some sort of a high school credit program so that anybody who participated in the fishery would be able to attain a certain number of credits for that endeavor. That might encourage them to take six weeks or some time to do it. Thank you for your response.

Ms. Worth: I would just add a few additional comments, if I could. I think that is an excellent idea, Senator Hubley. I am going to follow up with you on it maybe when we get back to Prince Edward Island.

I want to talk briefly about a few things. We have these institutions that have amazing facilities and knowledge within that we need to attract. We need to offer programs that our local industries are focused around. We have this excellent aquaculture industry. Do we have enough of those programs that attract people to the industry? When you have the institutional capacities then there is no reason why you wouldn't. You would be attracting young talent. They would be able to be trained whether they would be technicians or, to Dawn's point, some of the more science focused type opportunities in the sector. We need to have those training opportunities available not just within the companies but supported by the institutions in those communities. I think that is important.

Governments need to invest in helping with training funds. Training is an expensive business and that is a perfect partnership opportunity. We certainly have Skills P.E.I. in our province that just conducted a province-wide aquaculture labour market analysis. We have some interesting results from that and some strategies around how to address some of the labour market challenges in our sector.

Being in schools and telling the good story about aquaculture, we need to do more of that. We need to sell the sizzle and make people aware that there are viable work opportunities right here in our own backyards.

I might also add that workers can be local or they can come far and afield. Having access to skilled workers is important. If there are programs out there that can help facilitate that — Lord forbid I would name any one of them right now — certainly in my mind it would be part of government's role to help facilitate company access to programs that can deliver support around recruiting and retaining good people.

Finally on incentive programs that some people may refer to as labour subsidies, our industry needs to pay reasonable wages for good work. I believe we do. I think there is a bit of a misnomer out there. I see wage increases across our sector consistently. We need to tell the true story about the excellent nature of the operations in our sector. Many are state of the art.

Senator Stewart Olsen: I would like to follow up on Senator Hubley's question on education. I see a real opportunity for community colleges to participate with the industry in developing programs. Many community colleges have a year of practical work. Either there will be a cut to your program or a one-year program and then a year of a practical program where the wages would be less. You would still pay but these people would be very interested. You can interest them in the industry.

The other thing that I am suggesting is to work with the public schools and invite kids at the younger levels to come for a tour and actually take part in harvesting or in working visit. I really agree, as was said in one of the presentations, that people do not really know the breadth of the industry or what is available. Those are all things. I am not suggesting that it is up to the industry itself to do this, but it should be working in cooperation with governments. That is our role.

I am sorry to have just made kind of a statement there, but Senator Hubley stole all my thunder. One thing that I would like to ask, though, is: Would you agree that Atlantic Canada should perhaps harmonize the provincial regulations? We can work on the federal stuff but a harmonization of the provincial regulations would make it easier for industries that are smaller mom and pop industries to perhaps say, ''I am doing all I can here in Prince Edward Island. Maybe I can cross the Strait of Northumberland into New Brunswick and just open another plant there.''

I am pointing that out to you to see if you would support that kind of idea.

Mr. Hill: It is not only what we support but we promote it and we are actively involved in it. There is a number of initiatives that involve all of the industry associations from around Atlantic Canada working on codes of practice that would be Atlantic-wide and would deal with all of our sectors. It is a bit of a misnomer to concentrate too much on the differences because in order to achieve that social licence that I spoke about we constantly have to go to the highest common denominator out there to get public support, whoever is the toughest. It does not matter where you are. In order to get that public support you have to maintain that.

To answer your initial question, it is something that we at the Fish Farmers Association are actively promoting and it has been very successful to this point.

Mr. Ingalls: I wish to make further comment on that. There is kind of a two-level system, one being federal. There is common ground and we use the word pan-Atlantic when we try to do this. Some things are clearly federal but there are other things that are clearly provincial. In a lot of cases we do not have a lot of common ground. Some think there is. Some think the rules are absolutely opposite for the same thing, even interprovincially from a provincial level and probably more so than from the federal. We need to come to a point where it is a clear path for the responsibilities from a federal level. Then it is up to us through our associations, which are really maritime associations, to work with the provinces to try to get some common ground on what is acceptable. If it is acceptable in Newfoundland it should be acceptable in Nova Scotia and vice versa. There are cumbersome rules on how you lay out the buoys around a marine site in Newfoundland. They are absolutely different from what they are in New Brunswick and again in British Columbia. Those simple little things are tough for us when we are trying to standardize how we do things. Yet you are doing things different in different provinces for no good reason.

Ms. Runighan: I think synergy between the provinces for things like fish health testing and being able to do transfers of fish and material between provinces would be really helpful. Right now each province has its own set of diseases that they are looking at or are of interest. We also have DFO and CFIA regulations that were upholding to right now as well. For a small company in Prince Edward Island that exports a 100 per cent of its product it can mean a lot of testing which can be very, very expensive. It isn't just paying for the tests themselves but giving up root stock for the testing can be extremely expensive to the business.

One fish is worth a lot of money so we are constantly struggling with how can we bring this all together and work together to figure out what testing has to be done. Another issue that we run into is what methods are approved that everybody is happy with. Maybe one method is okay for DFO but that method might not be approved for CFIA requirements. We feel like it would be very beneficial to the industry if we could work together to figure out what fish health testing has to be done, how do we do it, and how can we do it in a non-lethal manner. There is some sampling that can be done by just taking a gill clip from a fish. It is non-lethal and that would be really helpful in some situations for sure.

With regard to your note on young students being able to visit farms, every year I do a grade 6 class tour. They are coming next week. They will be playing with eggs from salmon and looking at sperm underneath the microscope and stuff like that. I find that works really well too.

Senator Stewart Olsen: Another thing I would ask for our committee is. Could we have a copy of the results of your study on labour markets? That would be very helpful. Thank you.

Mr. Ingalls: I think we also have something at the level of our association that goes beyond just direct jobs. I actually forgot to mention it. I know you have heard it before but just in salmon farming direct jobs there are over 3,000 employees in the Maritimes and sales of up over $350 million last year. That number will grow.

We also have some studies done based on spinoff jobs which are significant in our industry. They are localized too so a lot of the spinoff jobs are in the absolute same communities that we are working in. They are not gone to Toronto or Halifax or whatever. Most of those support industries are localized as well. We will get you a copy of that.

Ms. Worth: Just on a point of interest around the clustering of expertise, there is an initiative happening in the province right now where aquaculture supplier expertise is being clustered to explore international business development opportunities. Companies that have not necessarily expanded beyond their provincial or regional borders are now coming together in a cluster and looking at how they can take their collective services and experience to other countries and offer it to sectors there. I guess it depends on how far you take spinoffs but other very good initiatives that drive new growth in companies can happen in other sectors.

I want to quickly add on to the business of harmonization. Hats off to the many in Atlantic Canada who work very collaboratively across the region. ACAIRDN, which is our research network in aquaculture, is often referred to in the region as sort of a standard or a model of Atlantic cooperation. All of them are full-time employees who dedicate themselves to research and development. Twice a year at formal meetings we look at what we have in common, what are the challenges, and what we can collectively come together on. It has been very effective and other industries look to it as a bit of a model for success.

NRC, the National Research Council, has really stepped up to partner with aquaculture in this area. Anyway, it is best practice and I think it should be mentioned here now.

Senator Poirier: Thank you, Mr. Chair. Thank you for being here.

In all of your presentations I heard very clearly a lot of you comment on the different successes that are happening in each one of your domains, but I also heard the words ''we need to do this'' and ''we need to do this'' and ''we need to this'' at many different times . In report stage at the end of the report we will have to make recommendations going forward on what are the best things and what we need to do.

If I were to ask each and every one of you how you would regroup or put on the top of your list the most important recommendation you would like to be seen in the report that would help the aquaculture business the best, what would they be?

Mr. Hill: I will be the first to mention farming instead of fishing. If you change that mindset a lot of our issues would be addressed. The government has put in place a number of traditional agricultural programs to support needs and to maintain farms, farming communities and local food production right across our country. Those are all at least in some way applicable to fish farming.

We have no advantage from any of it. If that one message gets put forward I think you will have done a fantastic job.

Senator Poirier: Thank you.

Mr. Ingalls: My wish list was quite simple. The biggest challenge in our industry is absolutely fish health. What we do not have as a country is a level playing field. If you look at the agribusiness in Canada I think it is on a level playing field with other countries, whether it would be the United States or Europe, in regard to health management.

In the salmon farming sector I would say the rest of the world is on a fairly level playing field with the tools and management they have to deal with things like sea lice, for instance. We do not have that in Canada and part of that is because of where we are stuck with dealing with four or five different departments. Some of them agree and some of them do not and it does not go anywhere. This has been ongoing. We have been through some crises in our industry in the last seven or eight years. That is part of it.

We are competing in a global economy and we are not on a level playing field when it comes to fish health. It is pretty clear that is number one in the salmon farming sector. That needs to be reviewed. There are tools that are out there. We cannot use them. Maybe we will but it could take three years before we get them. Meanwhile our competitors are using them next month. There are some tools coming down the road in 2015 that we will be lucky to see approved for our use in Canada by 2016 or 2017. It is quite a disadvantage and it relates directly to cost of production.

Ms. Worth: If one of the end results of this effort is that there is a new recognition that aquaculture is a key pillar for economic development in Canada and it is backed up with increased investment in the sector, a renewed spirit of enabling aquaculture to grow and prosper, and all the things that need to happen under those bold statements, I think that would be a wonderful thing to see. It takes a lot of courage to put that in a report but if you ultimately feel it in your heart then it stays there.

Right from investment to needed research in science we have had cutbacks and departments and diminished support for science and aquaculture. These are the things that need to be reinstated. Investment and aquaculture are key pillars of future opportunity. I think we can say that out loud and be proud of it.

That is a good question, yes.

Ms. Runighan: I agree with what everybody has said so far on the panel. We need to enable the use of new, innovative technologies and take research moneys and use them for industries requiring more R and D or where the industry needs are. This would allow us use new fish health products and do the trials that have to be done to say that they are safe to be used in Canada if that is the case.

Giving us the access and the ability to keep up with competitors around the world that have had a lot of support or have been putting a lot of money into genetic improvement or in breeding programs, those are things that we need to catch up on because we have been at a standstill. We definitely need government support to enable us to do that in the most efficient manner.

Senator Lovelace Nicholas: Welcome. Ann, you made an interesting comment in your presentation when you said there was a need to enhance investment and expand opportunities for First Nations. Do you find that it is not happening now? If not, why not?

Ms. Worth: We see some very positive examples in the province of aquaculture facilities managed and owned by First Nations. We see that continuing to be the case and potentially growing. We work quite closely on the ground with the aquaculture community whether it would be research or even in terms of sharing knowledge. We have a good working relationship. We see it continuing to be diverse in terms of ownership of aquaculture and taking advantage of the good opportunities aquaculture can bring. It would include First Nations.

Senator Lovelace Nicholas: Yes, thanks for that, but I just want to add that First Nations people, as you know, have been dealing with fish for hundreds of years. There must be some expertise there.

Ms. Worth: I am in total agreement.

The Chairman: Senator Meredith, you are our last questioner.

Senator Meredith: Chair, I have a little complaint this morning. I am feeling left out here. Ontario, as you know, has just been left out. Larry, my question to you is that you have a shortage of employees here. Have you been recruiting from Ontario? How can I fill that gap for you?

I believe that somehow Ontario needs to participate in this growing industry. In all seriousness, I am looking at how there is a shift in employment. I support Senator Hubley and Senator Stewart Olsen as a youth advocate with respect to engaging young people and encouraging them to get into the industry. That starts at the elementary, high school and college levels with respect to programs that can be instituted to say to young people, ''Stay on the island. It is a growing industry. Here are the benefits economically that you can derive from this.''

I encourage that, but in the absence of that have you looked at incentives that could potentially be put forward to attract individuals? If I could arrange for 50 young persons from Ontario right now to come out here and work, what incentives would you give them?

Mr. Ingalls: We would be more than happy. Certainly there are incentives for anybody who come from anywhere, even the Maritimes. I mean we as a company provide training. We provide travel. We even provide help with short-term accommodations. It is a normal thing to do. In fact we do it quite a bit in Newfoundland in particular. I think you guys were over there so you can compare some of the south coast of Newfoundland from a rural standpoint to some of the places you have been in New Brunswick and Nova Scotia. We absolutely have to provide the support from day one when they get there.

Maybe it is from a lack of trying, I will admit, but we have not really looked for people or recruited outside the Maritimes so much. We have trouble getting people to move from New Brunswick to Nova Scotia or Newfoundland. It is difficult. The people are really rooted in their communities and it is difficult to move from those communities.

Yes, we have some processing jobs in New Brunswick right now but it is hard to get families from Newfoundland to move their roots to do that. It is cyclical as well. I do not know what the answer is. I mean as a company we have never really been involved in trying to recruit with any programs outside the country for foreign workers at all. We have never certainly been involved in it.

We try to keep it within in our communities but I would say we have really come up against it. I have been doing this for 30 years. I would say the last six months would have been the biggest labour challenge in 30 years of my business experience in this industry. I am speaking particularly of both New Brunswick and Newfoundland. I do not have the answer but if you have got some names I would be more than happy to put it out to them.

Senator Meredith: I will talk to you after.

Mr. Ingalls: Absolutely.

Senator Meredith: Go ahead.

Mr. Ingalls: No, that was it.

Ms. Worth: An aquaculture labour pool on a national level that people could tap into and identify with may be a worthy idea to explore with people who are willing to move and are accessible as potential employers or employees for aquaculture companies.

Agriculture has a labour pool. Considering we are a farm-based industry it makes perfect sense to me that we would perhaps expand the existing agriculture pool to include aquaculture in terms of its recognition or maybe even establish a separate pool. Clearly it is just one idea but it is about connecting people with opportunities. There is a way to do it that the government could help facilitate.

Senator Meredith: Excellent. I thank you for the recommendations you have put forward. You have identified the challenges and where the opportunities are. We thank you for your frankness. As we put our report together and continue moving forward, we as a committee encourage this industry and governments to remove the red tape and put forward legislation that will encourage economic opportunities so all regions of the country are able to benefit from proper policies and regulations. As a business person I do not like red tape, so to see the industry being stifled in this way is quite frustrating. There is a lot of lost time and moneys. We will continue to push this forward. Thank you again for your time here today.

The Chair: I thank our witnesses for their presentations. There were very well prepared and generated a great conversation around the table. As I have told you several times before as a follow-up to Senator Olsen or any other information you may have at your fingertips that you think will be a benefit to us as a committee in the preparations for our report, feel free to forward them at any time.

To Larry, in Newfoundland we think hard moving from one community to another so going from one province to another is a big undertaking. I was born and raised and still live in the same community. Thank you for your time.

I would ask our next panel to introduce themselves and who they represent. Then I understand that some of you may have opening remarks. It is not necessary to have opening remarks but if you have them feel free to present them, and then we will open the floor for questions from our senators.

We will begin with Ms. Fortier.


Sophie Fortier, Coordinator, Table maricole du Québec: Good morning. Thank you for having us. My name is Sophie Fortier. I work for the Table maricole du Québec, a collaborative body that brings together all mariculture stakeholders throughout the sector.

I represent a board of directors that includes representatives from Fisheries and Oceans Canada and MAPAQ, producers, processors and stakeholders involved in mariculture research and development.


Martin Mallet, Chair, NB Professional Shellfish Growers Association: Good morning, senators. My name is Martin Mallet and I work in New Brunswick's largest shellfish hatchery. I am lucky to work in a family business along with my brother and father in a company that my grandfather started. I also serve as the chair for New Brunswick Professional Shellfish Growers Association.

Stephen Stewart, President, Confederation Cove Mussel Co. Ltd.: Stephen Stewart. I have been growing mussels now since I started back in 1986 out of school. I own numerous mussel farms on P.E.I. I grow mussels all over P.E.I. I also own Confederation Cove Mussel which is a processing plant that I opened in the year 2000. I have been at this for quite a while and have seen many challenges.

David Lewis, Shellfish Grower, Business Owner, Board Member, Prince Edward Island Oyster Growers Group, Prince Edward Island Aquaculture Alliance: My name is David Lewis. I am an oyster grower from P.E.I. and I have been growing oysters now since the early 1990s. I have seen many challenges and would just like to share some of them with the panel today and look forward to your comments. Thank you.

The Chair: We are delighted that you all have taken the time to join us here today. We are going to have opening remarks and we begin with Ms. Fortier.


Ms. Fortier: I would like to give you a quick overview of issues related to mariculture in Quebec. I want to point out that those issues stem from a five-year strategic plan, since the table's mission is to bring together Quebec's mariculturists as part of a strategic development plan. The objective is to create with them a business environment necessary for industry growth according to sustainable development principles.

Mariculture in Quebec creates about 165 direct jobs throughout 20 companies within three or four major growing areas. Mariculture is practiced in Quebec on the North Coast, on the Magdalen Islands, in Gaspésie and in the Lower St. Lawrence. Those are areas with high-energy sites. The cultivation occurs in the open ocean, in fairly extreme locations. The industry is considered to be very small, even though it was born in the 1990s. In 2013, the production level was only 476 tonnes, generating about $1 million in revenue. The main species we produce are mussels, scallops, but also soft-shell clams and oysters. We are also slowly starting to work with seaweed. Our seaweed production is at the experimental stage.

Quebec is experiencing duality in terms of aquaculture. The province has freshwater aquaculture, which mainly involves fish. However, I was just telling you about shellfish aquaculture, since saltwater mariculture in Quebec mainly involves shellfish species.

Some issues are slowing down the development tremendously. We have had a lot of problems with duck predation. We have also had to contend with oil spills in certain bays — such as last year in Sept-Îles, when all of the production that was supposed to be sold this year was lost. We are very proud to have a highly innovative and state-of-the-art scallop hatchery in Gaspésie. That is a key element of Quebec's mariculture.

We feel that we could get a lot of help from neighbouring provinces and the federal government in dealing with the issues I am discussing today. We are thinking of monitoring tools, research and development, and research infrastructure. We are namely thinking of the Maurice Lamontagne Institute, a research institute that has undergone many cuts. We are also thinking of programs like the ACRDP, a development program whose component dedicated to Quebec businesses was unfortunately eliminated. There are also programs like the CSSP, which basically ensures the monitoring of shellfish sanitation. However, since our region's production is very low, we want to ensure that this program's importance for our region will be taken into account, so that we can continue using it, even though we are small-scale producers.

Another issue that concerns the federal government and the other provinces is related to tax credits. Quebec has tax credits for investment in mariculture that were voted by the provincial government in 2008, but mariculture companies unfortunately do not have access to them. Those tax credits were actually accepted for the mariculture industry, but Revenue Quebec representatives say that the Federal Income Tax Act views our companies as fisheries, which are not eligible for that tax credit. Therefore, mariculture companies do not have access to the tax credit for mariculture.

As for the federal government's participation, we have noted Canada Economic Development's heavy involvement over the past few years through initiatives such as a mariculture development fund. However, that fund is currently threatened by the disappearance of regional conferences of elected officials, which carried it, and by the current withdrawal of Canada Economic Development. We also believe that the federal government should continue to contribute to the cooperative efforts. We can count on Fisheries and Oceans Canada being at Quebec's round table on mariculture, but we do not think the funding for that collaboration should come exclusively from MAPAQ, as is currently the case, since that approach weakens the collaboration.

Some aquaculture innovation funding programs were cut when the AIMAP program was eliminated in 2013. There is currently a severe lack of development support, and that worries us given the fact that this aspect made it possible to maintain and support, to a large extent, improvements related to productivity within the industry over the past few years.

Finally, another issue Quebec is dealing with in terms of mariculture is access to port infrastructure. The fact that Transport Canada has transferred wharfs and ports to small authorities is a major source of concern for us. Among others, Carleton and Gaspé wharfs present serious challenges, since their infrastructure is inadequate for mariculture, and they place a heavy financial burden on all small companies or communities.

We are certain that Quebec's mariculture industry can contribute to the development of mariculture in Canada and that this is a key sector going forward, both for Quebec and the rest of the country. Quebec holds tremendous potential in mariculture and has a great deal of expertise when it comes to mariculture on the high seas in conditions that are somewhat different from those in other maritime provinces. We believe that, with the tools I just talked about, the development of mariculture in Quebec could clearly support that industry's growth in Canada, as this is also an industry of the future for feeding the world's population.

The Chair: Mr. Mallet.


Mr. Mallet: We were lucky this morning to have a lot of really good testimony on the various regulations facing aquaculture. I would like to give an overview of the New Brunswick perspective on the New Brunswick oyster industry, a very brief history and where we are at, the current state of the industry.

Oyster aquaculture in New Brunswick started as early as the 1960s immediately after what was essentially the collapse of the wild stocks due to a disease called Malpeque Disease which killed over 90 per cent of our wild oysters. Immediately after that there were receding efforts at trying to bring disease-resistant stocks from P.E.I. and attempts at culture, primarily bottom culture. This would be where you collect wild seed, spread it on the leased bottoms and then essentially fish it using traditional methods a number of years later.

For a variety of reasons this model of aquaculture was not very successful. Very few producers managed to have viable businesses going this way. Where we really saw a shift was in the late 1990s with the introduction of floating culture gear, suspension oyster culture. This is where you would take that oyster spat and instead of just spreading it on the bottom where you could have predation problems and slower growth it was kept in essentially miniature cages floating on the surface. The handling of those oysters becomes much more like a farm-type operation where you have constant access to your stock. You can treat it for pests and manage it as you would a farm. That is where we really saw a lot of interest and a lot of expansion in the cultured oyster industry in New Brunswick.

There is a lot of support provincially and federally with moneys through the ACOA program. In New Brunswick we had the Northern Economic Development Fund as well as monies from the Agriculture, Aquaculture and Fisheries Department. We saw essentially a sort of gold rush from 2001 to about 2008 or so. That was a period marked by very rapid expansion.

In 2000 we had roughly 10,000 bags in the water province-wide and by 2008 that had gone up to about 300,000. There was quite a huge expansion, but the industry was very new so it was a learning period. There were a lot of mistakes made and a lot of things we learned as well.

The next five years were sort of a consolidation period for the industry where the production overall did not increase very much. We saw that sort of stall but at the individual company level some companies were expanding tremendously while others were dropping off as the industry matured. For example, in the bay where we produce at one point we had over twenty producers and now we are about five, but the total number of oysters produced out of that bay has been increasing as we are getting better at it. That situation is totally reversed in some other parts of the province.

Now we are at the point where we are starting to see significant growth once again. In 2011 we were still at the roughly 300,000 bag level. Now in 2014 we are already up to 400,000 bags and producing about 20 million to 25 million market size oysters per year. There are about 100 companies active now employing 300 people directly and a further 200 indirectly. The farm gate sales are roughly $7 million now for oysters. We are starting to see, as I was saying, some growth both in terms of the number of farms as some new people are entering and in terms of existing farms growing. We are seeing our first farms now producing over a million oysters each. In I believe that in Senator Poirier's backyard there are some have very successful oyster businesses in that region. I am allergic to scallops.

We have a lot of potential for growth and we expect to see further growth. There were some significant challenges and you have heard of many of them. One is the availability of labour. It is not only a big problem for us to find workers but also to retain them. We have had people leave to go out West, so just because of the seasonal nature of the oyster industry that is a challenge.

Availability of leased space and infrastructure is also a big problem. Oyster growers need to work their sock. They need to take product out of the water and back to their shops where they can grade and treat oysters. The availability of access to be able to move product out and in from land to sea is a big problem for many growers where you have very large bays with maybe one or two access points.

As you have heard the regulatory environment that we operate in is incredibly complex. Both my father and I have Ph.Ds and we still do not get it. One of the problems is that there is not necessarily one person or even one agency to go for an explanation of the various roles and often you will get contradictory advice. Some of these are ''merely'' inconveniences and others are outright dangerous for our industry especially where rules pertain to health management of our stocks.

I will just give you one brief example. The management of pest and diseases is controlled by three separate government agencies. We have CFIA which primarily to maintain our trading relationships has a specified number of diseases that they worry about, primarily MSX. DFO takes care of invasive species and transfers and then the province gets sort of saddled with everything else. There is not necessarily that much communication. I am trying to think of a polite way to say this.

CFIA controls what happens at the border. CFIA, for example, could approve oysters to come in based on a disease-free status for only the disease that they worry about. Once the oysters are in the country it is up to the importer on their own accord to get the appropriate permits from DFO, introductions and transfers. If they chose to not do that and just put oysters in the water somewhere, we have no way to track those oysters or to make sure and really monitor our stocks. That is a huge problem.

In North America historically we know that oyster populations are very vulnerable to disease. I mentioned Malpeque Disease which wiped out 90 per cent of our stocks in the mid-1950s. You have heard, no doubt, about MSX a number of times which has devastated the industry in Nova Scotia and the Bras D'or Lakes and is right on our doorstep.

Having a coherent and sensible set of regulations is very important. The current system of a network of MOUs is quite fragile. For example, in New Brunswick our industry is supposed to be managed by a central committee where the province and DFO co-chair. A number of subcommittees report to them. That committee actually has not met in several years now so every agency is independently pursuing its own agenda. There is technically a regulatory framework in place for communication but it is not being used. That is a real problem as far we see it.

Like many of the witnesses that you have heard from already, we are optimistic as far as our own growth potential but at the same time quite worried about potential threats from diseases and various regulatory barriers that we can see being real problems.

Mr. Stewart: Thanks for allowing me to be here today. I do not have a formal presentation. You have heard most of the important stuff already, so I just made some points here that I want to talk about from farming to processing in P.E.I.

P.E.I. is about 70 per cent of the Canadian production of mussels which is a lot for our little province. Most of the operations and processing plants are in rural P.E.I. As you all know, I hope, P.E.I. mussels are well-known around the world and a pretty famous brand. I have travelled a lot. Even in Canada, and especially in the United States, every menu says ''P.E.I. mussels.'' I know my mussels and they are not. I questioned servers. I questioned the chefs and they end up admitting that no, they are not. There should be some rules on their using our name which is not right because a lot of these mussels do not taste good. They are not good and it gives us a bad name which is not out there. If that was not the case we would be allowed and able to get more money for our product and hence do investments on our own and things like that. It is very important to the P.E.I. economy.

The big issue is that aquaculture is more like farming, not fishing. We have heard that. We farm the water. We are not fishing but yet we get lumped into fishing quite often. I have nothing against fishing. We farm in the water. We are not mussel fishermen. We are mussel farmers, a word that is related to agriculture.

We need to have access to agricultural programs. There are many different programs. The one I am going to get into is for foreign immigrant workers but I will say a few other things first.

The main issue, and I hear it from everybody, is staff. I have heard many good points from different senators, from executive directors and so on that for a lot of industries it addresses the points but not them all. There are many reasons why. I have heard too from federal ministers on the news and so on that we need modernization. I have been doing that. I have spent hundreds of thousands of dollars on modernizing new equipment. You cannot buy equipment off the shelf so people have to think and spend the money. There is a lot of trial and error. I have used equipment where it used to be a three-person job and now it is a zero-person job. Eventually we are going to hear from government that we are the problem there is no work on P.E.I. because we are mechanizing. We still need people.

I am going to refer now to mussel farming on the water. I hear all these points about university, training and so on. From the time I was let's say 20 years old everybody started teaching their kids to stay in school, go to university and get a job so that you don't have to do this labour work. I understand that. I taught my kids that. I have a daughter out West who is quite high up in the banking industry. I have another daughter who is in her second year of university in psychology. That is great but for mussel farming there is no training and schooling needed. I have boat captains and farm managers who work on the water. I still need people who can tie a buoy on a mussel line. To not have those people and try to promote that in a university will not going to work. These kids or people do not want to go and do that. There is nothing wrong with that but we need access to these labourers, not trained educated people unfortunately but labourers. Hence this brings us to the Foreign Worker Program.

At my processing plant I had five for the last year or year and a half. Do not quote me on this stuff because I have a great manager there who looks after that. I do know her LMO is not being extended and we cannot get anybody to even phone us looking for a job or to apply, nothing. We have to ship them back to where they came from. It is wrong for us to try and talk about how to grow. The sales of mussels are growing which is great, but if we cannot work and produce them because we do not have any staff that is a problem. That is the number one problem. There are many but in this industry the main problem is the staff.

There are some other issue obviously. We have fouling organisms such as tunicates. We have sea ducks. They love to eat mussels just like people do. They can eat a lot in a very big hurry. That is tough but we are managing. It is probably more scientific and it is not necessarily even research but the meat yields are not there. That is the way growth has been going in the last two or three years. Mussels are growing but the meat yields are not there. It is plankton-related. The weird part is that I understand oyster meats right now are great, which you will hear from David. They eat the same food but there is something going on with the mussels from nutrients in the water and all these little things that we should know. If we look at the amount of sunshine, the amount or rain and all these things, we know there is a correlation between all of them and what the meats are. We just need to put that together. Obviously that is going to take time and money for somebody to do that. The data is out there.

I do not really know what else I can say other than we need access to staff. That is the key thing. In the fall farming operations we sock the mussels, which is putting the baby mussels out. In a year to two years they are salable. I have one more day in my operation. On my farms alone I probably grow 6 million or 7 million pounds of mussels a year. My processing plant sells anywhere from 8 million to 10 million. We do fresh. We do frozen. It is all done in P.E.I. I ran this fall 20 to 25 people short. I could not get people to work in my shop where we socked the mussels. I have two boats tied up most of the time and sometimes three because I do not have enough people to go out and tie a sock or a buoy on to a mussel line. Again university people are not key to this whole situation in farming itself.

They are talking about going to the schools at a younger age. That is a great thing but still we are going to encourage them to stay in school. Last fall, for example, I had five or six kids that were in grades 11 and 12. They came every day after school at 3:30 and they worked until 6:00 when we were done for the day. Every Saturday they were there. They made good money. They loved it but they are gone. They won't come back and we know it. It is great. It is good for them to see it. I hear about these programs. It is not going to make them stay. This fall I have two and I am going to bring one young girl into this. I am not going to give her name or anything but she is 17 years old. She showed up with a bunch of her friends one day and they toured and looked at the socking operation. The rest of them kind of laughed and left.

She started. She is a great worker with a nice personality. I said to her three days ago, ''What do your friends think? Why are you here?'' She said, ''My friends think I am crazy. It is wet, it is cold and it is hard work is what they think.'' I said, ''And what do you think?'' She said, ''They are wrong. I love it. It is fun. I enjoy it.'' She never misses an hour. Every day after school she shows up because she loves it. When she graduates where is she going? It is to university, but she can say to her friends even in high school now that this is okay. Is anybody else calling? No, because they do not want to and that is fine.

I have been on the news before and people take it the wrong way when I am talking about the EI system. We need the EI system but we need people that can do the labour work and not only can do it but want to.

That is it for me. Sorry it is not a formal presentation.

The Chair: Don't worry about formal. Everything is recorded.

Mr. Lewis: Thank you, Mr. Chair. I am glad to have this opportunity to be here today. I am an oyster grower and I left work this morning. I left grading oysters to come here to be at this presentation. I do not have a formal presentation but I want to make a few points.

Much like our counterpart Martin mentioned, P.E.I. has had a success story with oysters as well. Our landed value for oysters is in excess of $7 million now and has grown rapidly since the mid to late 1990s. As with any other growing industry we have a few challenges. I would like to mention a few, but one I would really like to mention is the regulations. Martin mentioned he has a Ph.D and he does not understand the regulations. I do not have a Ph.D and I definitely do not understand the regulations. They are just very complex.

I would like to read a paragraph from a report. It says, ''Our regulations are significantly contributing to aquaculture's challenges. We have a regulatory system that is overly complex, uncertain and confusing with the net result of restricting growth and investment in aquaculture. We also see overlap and duplication and rules that are written for the wild fishery.''

On P.E.I. we have an existing wild oyster fishery. What has been allowed to happen is that the oyster aquaculture has come in and we have developed it, but there has not ever been an aquaculture licence developed. We are working inside the framework of the wild fishery regulations. They are not always enforced but if they were enforced we would be out of business because we are aquaculturists. We are farmers. We need access year-round to our product and with these regulations we couldn't do it. I would like to see an aquaculture licence developed. I would love to see in your report where there would be an aquaculture licence we could access that would allow us just to do that, to farm aquaculturally and not be seen as a threat to the wild fishery.

We need to drive the red tape out of the system and see a desire for an enabling attitude within government. We do work closely with CAIA to strive to improve clear aquaculture regulations. We are making some positive headway but at some point we are going to have to face the matter and say, ''We do exist and we need aquaculture regulations.'' At least give us an aquaculture licence so we feel that we are legitimate and deserve to exist or whatever.

We work in cooperation with ACOA and the Province of Prince Edward Island to develop our industry. There is great potential. Markets are strong and there is great opportunity. There is opportunity to expand and to grow. We just need to see some changes. We watched it from within. It seems like a slow process but we feel like there needs to be a licence of some kind. That is my number one issue so that is all I am going to stick with today.

The Chair: Thank you very much to all of you for your presentations. We are going to go to our deputy chair for our first question. Senator Hubley, please.

Senator Hubley: Welcome to you all and again thank you very much for bringing all of this information to us. It is certainly going to be helpful.

When I was listening to Sophie I was trying to take some notes. I think she said marine aquaculture and I wrote down marine agriculture. That is kind of nicer. I just sort of noted it by putting a little star beside it because it did seem to be getting closer to making a jump from what we all feel is agriculture. I think there is still a way to go to see that reflected in rules and regulations within departments and within governments.

I am going to talk to Stephen. You were very passionate about the fact that getting workers and keeping workers is a real problem. It may be difficult to engage young people within your fishery. You may be able to get one person out of a group of people, but obviously you must be doing some work recruiting or trying to get young people involved. I am wondering if you could tell us a bit more about the programs that you are running at the farm.

Mr. Stewart: There are no real programs.

Senator Hubley: There is not.

Mr. Stewart: There are no real programs because there is no way. If you came out in a boat and went harvesting or tying socks or buoying up, it is farming where we/they do their thing. We do the same, only it is on the water. I have said for years, and this is very truthful, it is either in you or it is not to work on the water every day. For a majority of the people it is not. You cannot force people to go to work because it is not for them. I have never had a student work on a boat because they do not like it. They do not know but they think they are not going to. I have given people many opportunities and said, ''Do you want to go out tomorrow and hang some socks with them?'' ''No, I am not going out there.'' They are just scared. It is probably from their parents who would never have anything to do with it. They work on land. Some of them are okay with it.

There are no real programs for me to go after people because for me to have university people they need to understand and learn farming mussels. You could learn anything you want to do in school but I have always said the day you think you know how to grow mussels is the day you start going bankrupt. It is the environment. It is nature. It is ever-changing. There are many challenges and you just can't.

Senator Hubley: You had mentioned or you highlighted a young lady who has become a very good employee. She came, I think you said with another group, and she was the only one of the group who stayed. What was the condition that they came to the plant? Were they looking for work and were they just coming to see what happens at the plant? How did that happen?

Mr. Stewart: It was not my processing plant. It was my socking farming operation. Over the years people know that I employ these students. Many people like to work and make money. The main key is that they want jobs. A few of them came down. They called and I said, ''Yes, come on down and have a look.'' One day we were socking mussels. We should have had fifteen people there and we had four. They got to stand there and look and watch. Out of the group there was that one girl who said, ''I will be here tomorrow after school.'' Like she said, they all thought she was crazy because it looked horrible. There is no way to convince them otherwise.

Senator Hubley: Yes, you just have to get right person.

Mr. Stewart: The right people. It has got to be in them to actually want to work.

Senator Hubley: You got to have it. Thank you very much.

The Chair: Ms. Fortier wanted to comment.


Ms. Fortier: I wanted to mention that Quebec has a fisheries and aquaculture school called ÉPAC, based in Gaspésie. I am surprised to learn that you are having difficulty recruiting in other provinces, as well. We thought that the issues in Quebec stemmed from the fact that companies had difficulty achieving profitability and that we were struggling to get young people interested in aquaculture. Now I am realizing that these issues are more widespread. I would still like to point out that the way we are dealing with this in Quebec is by developing a fisher-mariculturist model. In other words, we are trying to engage people who are already working with boats and are involved in fishing, so as to help them prolong their working season by combining their fishing activities with mariculture activities.


Mr. Mallet: In New Brunswick we had an aquaculture technician program. It was a French language program offered and that provided a variety of practical skills training in everything from fibreglass repair to soldering. A lot of workers were previously employed in fish processing plants. When that industry collapsed they went through the training. Unfortunately that program was cancelled. It has not been running for a number of years now. We did hire some people through that program that are still with our company. Now the only program is in the English language and is at the opposite end of the province from where aquaculture or oyster culture is.

Just to speak to the importance of training from an even earlier stage, I just had somebody apply from France to our business. I was very surprised to learn that they have aquaculture training from high school on. Right out of high school he knows he wants to be in aquaculture. He has had some experience in aquaculture industries in Europe. He is interested in the Canadian model and has applied for a job here. I think if we had similar opportunities here we would see more interest. As far as labour jobs go they tend to be better paying than your sort of typical minimum wage job.

Ms. Worth: Just to reiterate, I think we have done a pretty good job of saying there are some labour market challenges in present day aquaculture and it is very similar to agriculture. How does that equate to our having access to agricultural programs into the future and some recognition in a national way that the similarities would justify access to crop insurance programs, income stabilization programs, labour support programs and those other kinds of things that are in place for agriculture? I do not think we have to reinvent the wheel. I think we have to look at some tools that are already in place. If we really believe that aquaculture has some of those common challenges then we have to think outside the box a bit and expand potential access to those programs.

I made that suggestion to somebody at the Crop Insurance Corporation and it was interesting. I found out that there is an underspend in that program on an annual basis that would more than fund aquaculture to be able to come in under that program. I did not realize there was an annual underspend in the Crop Insurance Program. That is just one small example of an existing program already in place and built that with some simple expansion of eligibility could suddenly become a tool that aquaculture could use to help solve some of the challenges here.

Senator Poirier: Thank you all for being here.

One of the places that we went this week to visit was the mussel farm. They told us that it was a year-round business operation and so on. Do you foresee that there is any way in the future of the oyster industry that we can build it into a year-round operation, whether it be by value-added products or something else? Is that something that you could see in the foreseeable future to help build the stability of keeping our employees here so that they are not working seasonal or going out West because of not being able to have a full-time job? Is that something that we could see?

Mr. Mallet: Yes, I think for sure there is definitely room to have more full-time year-round jobs. We are moving in that direction and a number of people are as well. A lot of it has to do with the scale of the farm. Most of our oyster farms in New Brunswick are very small farmer-fisher model farms, like Sophie mentioned. Many of our oyster growers also commercially fish for a variety of species as a supplementary means of income. Larger farmers can support year-round operations. For example, we continue to harvest our product through the ice much like mussel growers do year-round. Some portion of our employees are full time, year-round. In our hatchery those are year-round jobs.

I think as the industry grows and businesses grow you will see more room for full-time jobs. I think people are realizing that it is an important way to keep people in the industry. There is always going to be times where you have peak labour demands, operations like mussel socking and for oysters it will be grading and harvesting. We need access to that mobile and temporary pool of labour as well.

Senator Poirier: Have you ever looked at a co-op operation of different industries out there sharing a pool of employees at different peak times that can be trained in labour and be able to do more than just one type of work? I know that in certain areas of the province we have done it with other businesses where certain employees will actually be able to get 40 hours of work a week by working for two different companies or will move on during a peak season. We have seen that before in the Acadian Peninsula with the Christmas tree wreaths and the people that fish. People go on to work on that or something. Is there something like that that is a possibility to help until you build to the level that you need to be to be able to be full time and keep the employees?

Mr. Mallet: Yes, it sounds like a terrific way to keep people employed on a year-round basis or at least throughout the whole season.

Senator Poirier: Has it been looked at? Is that something that is possible?

Mr. Mallet: I am not sure that it has been formally looked at. I do not think it has.

Ms. Fortier: I just want to mention that it is done in Quebec. We have four companies that are sharing the same people, the same employees. They share two different boats and they share people where they sell their mussels. If one company is not able to sell one day, the second company can sell so that mussels are always available for consumers. It works very well. I think they have been doing it at least for five years and it is working very well. Another company wants to get in so there might be five next year to share boats and employees.

Senator Poirier: That is good.

Senator Stewart Olsen: I have a couple of clarification questions, if I may. You mentioned one of the challenges you face is with lease spaces. Can you just tell me what you mean by that?

Mr. Mallet: Sure. As you heard this morning, in New Brunswick we have the bay management plan. I do not think Nova Scotia has a similar program but we have certain spaces in bays that are preapproved for aquaculture. A lot of the environmental testing is much easier within that framework, especially in the southwest part of the province. Those areas are a lot smaller because there are a lot more users and they are being filled up very rapidly.

For a lot of growers well over 50 per cent of their site is being used. They are looking to grow and they are coming up with space problems. The province in those bays is looking at expanding the areas of the bay that are available for culture. So that is where we are at.

Senator Stewart Olsen: But you do see a need there.

Mr. Mallet: Oh, yes.

Senator Stewart Olsen: Sophie, you made an interesting statement about sharing innovation. You obviously see a need for some mechanism to share the innovative ideas like the co-op and like a lot of this. Can you expand on that?


Ms. Fortier: Yes, I will answer in French. It is very clear that Quebec has fallen behind in developing its mariculture industry for various reasons. With the neighbouring provinces expanding on their activities in this field, we are realizing that it is important to share research information on the problems we are facing. We know that ducks do not cause problems only in Quebec. We know that many of the issues are shared by other provinces' mariculturists. We are trying to find a way to come together and share more information on solutions and preferred models.

Quebec should not be the only province learning from its neighbours. Here, I am thinking of the issue we just talked about in terms of space needs in bays. Quebec has developed expertise in working on the high seas, and that approach can provide various benefits when space is lacking. If we look at the expansion of mariculture around the world, it is very clear that bays will eventually no longer suffice because of the growing number of users.

What we want is basically to be able to share both knowledge and methods amongst provinces. We have oyster producers who obtain information, in New Brunswick, and share it with other provinces, and the same goes for mussels and scallops. Whether we are talking about acts, regulations, expertise, experiences or models, we would like the federal government and the other provinces to foster communication among mariculture industries.

I would like to comment on something. When mariculture is mentioned, we often feel a bit separate because new regulations — such as the Aquaculture Regulations, just proposed by the federal government — apply much more to large fish productions. We realize that those legislative texts place little focus on shellfish culture issues, even though shellfish culture makes sustainable aquaculture possible and has a very promising future in terms of producing animal protein for humans.


Senator Stewart Olsen: I agree. Thank you so much for that.

I find so interesting, Mr. Stewart and Mr. Lewis, the comments that you made. It is what you face on a daily basis and that is exactly the kind of thing we need to hear from everyone. I am very grateful that you have been able to take the time to come here. That is what makes it valuable. Thanks.

Senator Meredith: I do have your labour shortage problem solved so talk to me after. Ontario is included at this table as well.

On a serious note, Ms. Fortier, you mentioned access in your presentation. Yesterday, we visited Fermes marines du Québec. He indicated significant contributions with respect to the investment that he made into his really cutting-edge plant. In one of the plants we have seen so far he has it down to a science. However in terms of access to credit you indicated that they are not able to get the funds. Do they know that at the outset or is it something that sprung up on them once they had started their initial investment into a shellfish plant like that the one he has?

Ms. Fortier: I am not sure I understand. Do you mean when they start aquaculture plant do they know if credit is available or not?

Senator Meredith: Yes.

Ms. Fortier: In fact in 2008 the credit was allowed.

Senator Meredith: Why the change?

Ms. Fortier: Well nothing changed. In fact the credit is supposed to be allowed but no company can have it.

The thing is that mariculture is considered a fishery and a fishery is not allowed to have access to this credit. Because the term aquaculture is defined as a fishery in the federal regulation Revenu Québec is saying to the companies, ''You cannot have access to this credit because you are a fishery.'' We have a company that is waiting for $1.5 million. This company is a hatchery plant in Gaspésie and they closed the hatchery for the summer this year. It could not open because they did not have the money to run on the short-term basis.


I want to clarify that the credit was actually approved, and nothing has changed. However, since the federal government has not defined aquaculture as being separate from fisheries, this is the response from Revenue Quebec. Mariculture is considered as a fishing activity — it is a harvesting activity, and not a production and processing activity. So this is a bit absurd, but it is indeed a rejection. One of the Quebec government's suggestions to businesses is to ask the federal government to define aquaculture as an activity that is separate from fisheries.


Senator Meredith: How many companies are you aware of apart from this one that find themselves in that situation? Obviously there has to be an appeal mechanism if it was allowed in 2008 and now they are out these funds and potential jobs are at risk from closures. It is going to affect the economy. How does one go about it?


Ms. Fortier: The current problem is that 20 companies are affected. None of the existing companies have access to the credit, but there are also companies that will not be created, since the investment tax credit was implemented by the provincial government to attract private investments. As for those private investments, about $10 million has been paid out since the credit was announced, and companies are awaiting returns. So the private sector will definitely not make any further investments. However, we are still in the resource regions, where the 165 positions I mentioned are direct jobs. But this aspect does not take the rest into account.

We are in a climate where, on a provincial level, we have experienced so many job cuts over the past few weeks in sectors such as the regional conferences of elected officials, as well as many cuts to positions held by young professionals. When it comes to fisheries and aquaculture for the resource regions, 165 jobs is a huge number. So there are currently 20 companies that are not entitled to the credit, but the rug is also being pulled out from under potential investors. That much is very clear.


Senator Meredith: Thank you for that. Mr. Mallet and Mr. Lewis, you talk about the challenges that you have in terms of treating your products or treating your shellfish. At what point do you have to do that and how often through its growing season do you have to do that?

Mr. Mallet: Every business is different. We like to handle our oysters at least once per year, but since we have a large production it is throughout the year that we will do a given line of oysters. One issue, for example, is that a bay or an area might be closed due to for example rainfall. That engenders a preventative closure for potential bacterial contamination. Even though we might go take oysters that are not destined to market, we are simply going out there to grade our oysters and put them back in those same waters, we have to apply for a DFO permit and a harvest plan to take those oysters out.

Senator Meredith: How long does that take?

Mr. Mallet: It takes at least a few days but the problem is that we have to file the application every time there is a closure. There is no way for us, for example, to propose a harvest plan and say, ''This is what we are going to do in case of a closure.'' Then DFO could look at that and say, ''Okay, that is how you are going to operate.'' Every time there is a closure we have to apply through that same process. That is one example where that is a big problem.

Mr. Lewis: If I can just make a few comments on that. You asked how often we handle our oysters. My oysters are handled at least 10 times a year. They are flipped manually. The bags are flipped manually. That is my point on aquaculture regs. I would like to see a licence. I would like to be able to go in, in April and tell them my plan for my farm, not have to go and fax for a licence every second or third day and wait for a fax back saying, ''I am sorry, I am on vacation'' and my farm sits idle. I would like to be able to go in and tell them my plan for the year and I want my aquaculture licence.

Just streamline the thing and get the red tape out of there. It is set up for a wild fishery and there needs to be an aquaculture licence where we can go out and farm and feel that we are within the regulations.

Getting back to Senator Poirier's comment on year-round harvest, I could see that happening in the near future where we will be harvesting oysters year-round. Oysters right now are available year-round from the processor but mainly they are harvested after the growing season in October-November. I can see in the very near future where the processors will not be able to handle them in storage so we will be doing a winter harvest year-round. Yes, we do share a labour pool with other fisheries in between seasons. Much of my crew is in between lobster seasons or whatever. I can utilize that crew. We are using some. There have been some great ideas here today. Thank you.

The Chair: Thank you to our panellists. Despite many odds and roadblocks you are doing very well. I am going to give Mr. Stewart the last word before we close up.

Mr. Stewart: Just a last note about aquaculture in general. I hear from Sophie, and it is all true, how we fall under the Fisheries Act. David also mentioned how we work with CAIA, the Canadian Aquaculture Industry Alliance. I used to be the vice-president of that organization and for years now we have been working on an aquaculture act so that we could officially be recognized in Canada. As I said before, we are not fishing. We are not farming on the land. We are in aquaculture which is farming the sea and we are not recognized in Canada officially.

The Chair: To be honest, we have heard that many, many times across the country and it is certainly something that I am sure that our committee will take into consideration when it comes time to look at our recommendations. Trying to convince others to go along with that is always the toughest part of our job also.

Once again, I want to thank you for your presentations here today.

Ms. Worth would like to have the last word.

Ms. Worth: I have a question about the timeframe on the completion of the committee's report.

The Chair: We are scheduled to present the report by June 2015. When we go to the Senate Chamber to ask for permission to do a report we have to give an end date or a proposed end date. I would not want to lock ourselves into that even though that is what we are locked into.

We have gathered an immense amount of information. We travelled from British Columbia to Newfoundland. We are not finished travelling yet. We are hoping to make another trip to Newfoundland.

We have been, like they say, overseas. We have learned much. Many of us were not aware of the challenges that the industry faces. Certainly we have become aware of those but we have also, I think even more importantly, become aware of the opportunities that are out there if we can alleviate some of the challenges that this industry faces.

Different provinces have different issues. We heard this morning from the minister in P.E.I. who does not have any issue with setting up operations in P.E.I. That is an issue in Nova Scotia, for example. How we develop a national report that reflects the concerns of everybody is going to take some time. Our plan is June 2015, but I have talked to most of my colleagues over the past number of months and most important for us is that this is an opportunity for not only our community but for the industry. We are hoping to do this right even if that tells us that we have to take a bit more time to do it properly by getting some more witnesses to Ottawa to help us facilitate our report. We said it from day one, and I repeat, it is not going to be a rush job. We are hoping that it will be a good job.

Mr. Stewart: I have to say, Senator Manning, that Senator Meredith was wrong starting off. We did not need an interpreter for Newfoundland language.

The Chair: I am down to about 30 kilometres an hour now.

Thank you very much.

(The committee adjourned.)

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