Standing Senate Committee on Fisheries and Oceans
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Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 18 - Evidence - February 17, 2015


OTTAWA, Tuesday, February 17, 2015

The Standing Senate Committee on Fisheries and Oceans met this day at 5:32 p.m. to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada.

[English]

Shaila Anwar, Acting Clerk of the Committee: Honourable senators, as the acting clerk of the committee, it is my duty to inform you of the unavoidable delay of the chair and deputy chair, and I'm here to preside over the election of an acting chair. I'm ready to receive nominations to that effect.

Senator Raine: I nominate Senator Wells.

Ms. Anwar: It is moved by the Honourable Senator Raine that the Honourable Senator Wells do take the chair of this committee.

Honourable senators, is it your pleasure to adopt the motion?

Hon. Senators: Agreed.

Ms. Anwar: I declare the motion carried.

Senator David M. Wells (Acting Chair) in the chair.

The Acting Chair: Welcome to the Standing Senate Committee on Fisheries and Oceans. We're continuing our study on the regulation of aquaculture, current challenges and future prospects for the industry in Canada. I am pleased to welcome Mr. William Lahey, Associate Professor of Law from the Schulich School of Law at Dalhousie.

My Lahey, I understand you have some opening statements. The floor is yours.

William Lahey, Associate Professor of Law, Dalhousie University, Schulich School of Law: Good evening, senators. I want to start by saying that I appreciate the opportunity very much to come here and speak with you this evening. I also want to start by sharing the regrets of my colleague Meinhard Doelle, who was supposed to be here with me tonight. Weather intervened, so he is in Halifax, I think watching as we proceed.

Our understanding is that you asked us to come here tonight to talk about and answer questions about a report that we wrote on the regulation of aquaculture in Nova Scotia, so I'll direct my brief opening comments to that report.

In that report we recommended a fundamental overhaul of how aquaculture is regulated in Nova Scotia. Our recommendations call for changes in practically every aspect of the current regulatory process. This reflected two fundamental conclusions. First, the current regulatory system is not adequate for ensuring the industry develops and grows in ways that are environmentally responsible and beneficial to local communities. Second, we concluded that a fundamental overhaul of the regulatory process is essential to public confidence in the regulatory process, and that public confidence, in our view, is necessary for the industry's development and growth.

At the same time, we concluded that if the industry was appropriately regulated, its growth and development could play an important role in contributing to the prosperity of Nova Scotia. In other words, we concluded that regulation can address the questions and concerns people have about the industry and that the permanent moratorium on its growth and development in Nova Scotia — and I speak specifically of marine-based salmon farming — was not something we thought was warranted.

In reaching these conclusions, we were guided by something called the Environmental Goals and Sustainable Prosperity Act, which is Nova Scotia legislation that calls for an integration of economic, social and environmental objectives as the basis for the province's future. From that legislation, we got the inspiration for the policy objective for the regulatory framework that we recommended, which we called regulation that would aid and assist in the development of a low-impact industry that had high economic value. That's the kind of aquaculture that we saw as being consistent with that model of integrated development that the Environmental Goals and Sustainable Prosperity Act called for.

We were also guided by something that in Nova Scotia we call the One Nova Scotia Commission report, a report authored by a commission chaired by Acadia University President Ray Ivany. That report generally calls for urgent and drastic action on the province's economy. It emphasizes the continuing importance of natural resources and natural resources industries to the province's future, and recognizes the importance of environmental protection to the development of those industries.

The specific regulatory changes we've recommended, it's a 125-page report. I couldn't do anything but scratch the surface in terms of opening comments, but I will simply say that we've called for statutorily guaranteed public participation in all stages of the regulatory process, beginning before there is an application for a licence. We've called for pervasive regulatory transparency, both in the licensing of aquaculture and the ongoing monitoring and enforcement of regulations on licensed facilities. We've called for statutory provisions that specify the matters to be addressed in each licence and that specify the content of certain critical terms and conditions, the main one being the maintenance of oxic conditions in the water so that the water continues to be healthy for wild species.

We have called for a new system for classifying the suitability of coastal areas for different kinds of finfish aquaculture as either being generally suitable, generally not suitable or suitable, depending on the scale and nature of the particular facility or project that's proposed. The idea of this system is that classification would inform the analysis and decision making on particular applications for licences, and this classification system would also help to ensure that the industry develops where it can develop in an environmentally sustainable and responsible manner, and that it is prevented from developing and growing in areas where biophysical conditions or socio-economic conditions can be known in advance are likely to cause problems; I'll put it that way.

We've also recommended that a formal hearing would be a necessary part of decision making on all licences. We've recommended licensing principles that would be set out in legislation that would have to be addressed by each applicant for a licence, a more independent appeal process and a strengthened emphasis on the centrality of the health of farmed fish. This is key to achieving not just the health of farmed fish and the prosperity that comes from that, but the avoidance or at least the limitation of many of the activities that cause concerns about the industry, many of which are taken to address illness, when illness occurs in farmed fish.

We've called for increased and more rigorous monitoring and enforcement, significant expansion in the capacity of Nova Scotia's regulators, strengthened measures to reduce or avoid risk to wild salmon — in particular the requirement for a comprehensive containment system to avoid escapes — and the establishment of several ongoing consultation processes. One is on the implementation of the regulatory framework we've proposed, and another focused on ongoing relationships between the regulators, the industry and the research community to help ensure that the regulation is informed by science and that research — and there is much research in Atlantic Canada and Nova Scotia on aquaculture — is informed by the issues that arise in regulation as it unfolds.

I'll stop there, and I welcome questions from the committee.

The Acting Chair: Thank you very much, Mr. Lahey.

In your study, when you looked specifically at the appeals process, if there are compliance requirements set up in an application process and those conditions are met, would they still be subject to an appeal process by those not in favour of aquaculture activities in a certain area?

Mr. Lahey: The issue at both stages of the decision making would be consistency of the licensed activity with the criteria that are used to assess applications for licence. So the appeal body — and we've recommended it could either be the minister of aquaculture or an independent appeal body — would have no authority to change those criteria or conditions. The issue on appeal will be whether the first-level decision maker — which on our model would be an official in the Department of Fisheries and Aquaculture — properly applied the criteria or conditions. So decision making at both levels would be subject to the content or the substance of the law, recognizing that there's often judgment to be exercised in how proposed activities do or do not align with statutory conditions that, of necessity, sometimes have to be stated in general terms.

The Acting Chair: Thank you.

Senator Munson: Thank you for being here, professor.

Concerning disease, I think your panel talked with the Canadian Food Inspection Agency and they seemed to indicate to you that the surveillance systems are there and are pretty good.

Mr. Lahey: Right.

Senator Munson: But they expressed less confidence in industry. Can you elaborate on that? We spent a lot of time there, and industry gave us a lot of assurances that they're ready to act if there is a disease outbreak.

Mr. Lahey: The first thing I want to say is the officials from the Canadian Food Inspection Agency were very helpful to us, and we appreciated their assistance very much. They did share with us confidence in the surveillance processes that were in place at the governmental level, not just in Nova Scotia but in our end of the country more generally, in Atlantic Canada.

I'll get directly to your question, but before I do, we recommend in our report that the legislation in Nova Scotia should be much more specific than it currently is as to the elements and processes that are part of that surveillance system. It was in part to make sure that the surveillance system continues to be good, and also that the public have confidence and knowledge of what that surveillance system consists of and how it operates.

The concern that the agency shared with us was quite specific relative to industry. It was the capacity to manage significant outbreaks of disease. The core issue that the agency shared with us is that its observation — if I can put it that way, because the people we spoke to were speaking on behalf of the organization — was that there has been less cooperation among the various companies involved in the industry in Atlantic Canada to put in place the kinds of infrastructure needed to deal with disease outbreak than the agency observes being in place in Western Canada, for example.

Senator Munson: What kind of infrastructure?

Mr. Lahey: Predetermination of what boats are available to be used for the purposes of moving diseased fish, for example, so that there isn't any delay in accessing those boats and there isn't a set of questions that has to be answered in advance of the use of a boat of what it's going to be used for afterwards, the concern being the spread of disease. Similarly, with docks or wharves, which ones have been set up to be biosecure so that they can be used for that purpose? Disposal of carcasses, where is it going to happen? These are all things that the agency emphasized need to be in place in advance so that the response to a disease outbreak can be sufficiently expeditious.

I don't think this is repeating myself. The other aspect of what the agency said to us is that if cooperation and collaboration among different companies is needed on the West Coast where the industry is larger, it's certainly required on the East Coast where the industry is smaller.

Senator Munson: Do you have a view of why there is less cooperation on the East Coast? Are the other provinces operating in silos?

Mr. Lahey: No. We didn't have the opportunity to explore this in great length or detail. We thought it was significant enough that we should mention it in our report. It may have something to do with the fact that the industry in Atlantic Canada is divided between the four relatively small jurisdictions, whereas on the West Coast it's all within the province of British Columbia, but that would be speculation on my part. We didn't have the opportunity to explore the reasons beyond what was shared with us by the CFIA.

Senator Munson: On scientific research, there is some mention here of the panel recommending that the DFA establish a network of academics and community experts in aquaculture that would facilitate the department's access to combined scientific expertise. Is there expertise here in Ottawa that could be used in that regard?

Mr. Lahey: Absolutely. We didn't intend to limit the recommendation to the expertise immediately available in the region. As part of our process, we established what we called a knowledge roster and we held three knowledge workshops. Many of the experts who participated in that process were from outside of Nova Scotia and Atlantic Canada.

What we learned in the process is that there is a lot of expertise in aquaculture right across the country, and indeed beyond the country, that would be very valuable to Nova Scotia to tap into.

Senator Stewart Olsen: I have a couple of questions on your presentation today that interested me. You talked about suitability.

Mr. Lahey: Yes.

Senator Stewart Olsen: Who would decide on suitability?

Mr. Lahey: The first thing I want to say on this is that everyone we talked to agreed that certain coastal areas are suitable for certain kinds of aquaculture and certain coastal areas are not.

Another important aspect of that is everyone agreed that licensing needs to take the suitability of the bodies of water in question seriously into account, things like depth of the water, flow of the current, proximity to other species, so on and so forth.

Our recommendation is to some extent based on the idea that that question of suitability should be separated from the consideration of a specific application so that it becomes part of the context or the lens that is applied to a particular application and avoids the danger of suitability being inappropriately assessed because there's a temptation to reach a certain conclusion with a specific application, the company has invested a lot of time and effort, so on and so forth.

So ultimately, suitability would have to be determined by the regulatory agency. We identified three different processes that could be used to assess suitability, and two of them at least would give the regulatory department the opportunity to utilize third parties. One process would be a general mapping of coastal areas. Another would be a more targeted classification or assessment of suitability in a general region. Both of those might be suitable to seek the assistance of a panel or a third party.

The third way in which classification could happen is in the context of an application for a specific licence, because we didn't want the whole licensing process to be held up by a classification process that, to be comprehensive, could take many, many years. Where classification happened at the front end of the licensing process, our expectation is it would definitely be done by the regulatory agency itself.

Senator Stewart Olsen: I know you gave three choices, three options. Are you suggesting that perhaps the ministry should sit down and map out Nova Scotia and say, "Okay, this place might be good; this place might be good; this place might be good"? In other words, what would trigger a suitability assessment?

Mr. Lahey: We certainly are not recommending all development of the industry be held in abeyance until there is a comprehensive mapping of the province.

The other important thing to emphasize is we recognize that assessments of suitability will change over time. It can't be a process that carves determinations in stone. Environmental conditions change and socio-economic conditions change. The industries and the technology and practices that the industry use change so that a site that at one period in time might not look very suitable, that might actually change as the potential for adverse impact declines with the adoption of new technology or new practices. We certainly weren't recommending a comprehensive mapping process.

On the other hand, our sense was there that is a lot of consensus at both ends of the spectrum as to areas that just won't be suitable. It's just not conceivable that they're suitable for salmon farming in particular and, conversely, strong opinions perhaps at the other end of the spectrum, although maybe fewer people holding those opinions at the other end of the spectrum.

So if we have that knowledge, our thought was it would be helpful in terms of public comfort level with the regulatory framework that we confirm the sites that we know are not going to be developed for finfish aquaculture and we concentrate the development of the industry in areas that we do think are suitable and be explicit about the basis upon which they are suitable. But that would be at either end of the spectrum.

We'll have to develop a lot of work about other coastal areas over time, and that's why we put forward these three different mechanisms that could all be operating at the same time. What they're contributing to ultimately, hopefully, is a fairly comprehensive sense of which coastal areas are and are not suitable for different kinds of finfish aquaculture.

Senator Stewart Olsen: Am I wrong in saying that you're suggesting it should mostly be science-based suitability rather than warring interest groups or warring residents? But then you say the people would be reassured. So it's good. It's great. I'm just wondering how you would get past that.

Mr. Lahey: I want to explain what I just said. I think the development of the industry suffers from the widespread view that salmon aquaculture could happen anywhere and everywhere around the coast of Nova Scotia, when the reality is there are many parts of coastal Nova Scotia that people in the industry say are just not suitable for salmon aquaculture. It may be for environmental reasons or, more often, because you can't have reasonable prospect of a successful operation in that part of the coastal area. Water temperature, for example, is a very important factor.

So it would alleviate, in our view, some of the anxiety that fuels opposition to the industry to confirm that certain parts of Nova Scotia are just not going to be developed for this kind of aquaculture. Another kind of aquaculture might come along but not this kind of aquaculture.

Senator Stewart Olsen: Thank you professor.

Senator McInnis: I want to follow along with this. If I am in the industry today and I make application, there's kind of a moratorium in Nova Scotia, correct? So nothing would happen. They're not accepting applications. Is that pretty much the case?

Mr. Lahey: The minister who appointed us said that there would be no licensing of new finfish aquaculture sites during our process. We recommended in our report that that moratorium, which is quite targeted, be maintained until the new regulatory framework was in place. Our understanding is that the current government is maintaining that targeted moratorium on finfish aquaculture until the new regulatory framework is ready to be implemented.

Senator McInnis: First of all, I want to commend you and your colleague for what you have done. As I said to you earlier, if you can bring 400 representatives of the groups — even industry, individuals, groups that are opposed — into the Lord Nelson Hotel in Halifax and there's a consensus that they agree with this report, there has to be something good in it. It is a comprehensive report.

But the government has not yet accepted it. Obviously they have to look at it, and I understand that. But what I see here, this is going to take some considerable time. For the life of me, I would find it difficult to believe that there would be legislation until the year 2016.

I also see the various components of this that have to be pulled together that you've suggested. They are all good; however, governments don't move that quickly. You and I know, living in Nova Scotia, as to what we hear regarding complaints about the Ivany commission that came out a year ago and no one is doing anything. These things take time, and that is the case here.

Let me come quickly to the classification. I take it no one has costed this?

Mr. Lahey: No.

Senator McInnis: This is going to be a costly venture, no question about that.

When I come to the classification, let's say we have a green light and I live in Spry Harbour and pulled 300 people into the community hall opposed to this. You have all the other criteria, current steps, perhaps free of salmon, no problem there, but the community is opposed to it. Then what? Where does that fit into the formula? You talked about social licence in the report. What happens in that instance?

Mr. Lahey: We did not recommend a regulatory system where the answer would depend on whether or not a majority of the people accepted it or opposed it. Instead, we emphasized that community support is vitally important, and the way that the industry needs to go to achieve community support is a rigorous regulatory process that will allow everyone, either for or against, an equal opportunity to present their arguments and evidence and to see the resulting written decision that explains how the denial or the approval reflects the licensing principles spelled out in the legislation and the issues raised in the hearing and the evidence put forward in the hearing.

Senator McInnis: But nothing to do with the rights of the private property holder living on the shoreline?

Mr. Lahey: Well, one of the criteria, in general terms, is adverse impact of the proposed operation on other users of the public resource, being the waters and the shoreline. It's less amenable to specific scientific specification than, for example, water depth or water flow, but it's nevertheless important, and it has to be taken into account. People have the opportunity to come forward and say, "We're opposed." I'm not saying that's irrelevant. It's relevant in itself. "We're opposed for these reasons: It's interfering with the conduct of the lobster fishery." This is an issue that we heard a lot. "It's bad for the tourism business here and the noise levels are not something that we're prepared to live with."

Those issues would all have to be seriously considered. If they are serious enough, they might well lead to the decision to reject an application. If they are not that serious, they might well lead to terms and conditions imposed on an approved operation that addresses those issues — noise level, location relative to lobster fishery, scale of the operation to take account of the depth of the water and the flow of the current. All of those things would have to be taken into account.

I think it's safe to say that the regulatory framework we're proposing will require accountability from everybody, because people will, yes, have the opportunity to come forward and put on the table their concerns or their support, but in an open and transparent way where a decision maker will have to weigh their concerns or issues relative to the information and the evidence put on the table from the other side.

Senator McInnis: But that right of the private property holder will be just a segment or a part of this formula. If the currents are good, if the depth is good and if there is no interference with lobster and salmon, will this be part of it? As you know, that has been the major controversy in Nova Scotia.

Mr. Lahey: Yes, it's definitely part of it, but the extent to which it is part of it depends on the nature of the adverse impact that people are concerned about. I would not sit here and say that significant opposition is irrelevant to the regulatory process, but it becomes likely more relevant when it's based upon more tangible, verifiable concerns about adverse consequences for the life of the community, other viable businesses and adverse impact on other species.

Recreation is an issue that came up a lot. It's quite legitimate that people who have waterfront property are concerned about the recreational opportunities that creates, and it shouldn't matter that they're not making money from it. It's a valid concern to wonder about the adverse impact on recreational opportunities. All of that is part of the mix.

Senator McInnis: One of the things that I think is important and I didn't see in here is a transition committee, a committee that would not just be comprised of government officials. You know the groups. There is a wide range of groups and individuals. Did your committee give any thought to that group working with government to ensure that this be done in an open but effective way? You mentioned in there a person who would be appointed. It wouldn't be a deputy minister, but they would be appointed to oversee this. Did you give any thought to that?

I think this is ice cream. This is a wonderful report, generally speaking, and that's why all these groups have agreed with it, but we've seen this before: They just sit there and nothing happens.

Mr. Lahey: Senator, we did recommend the formation of a committee that would not oversee the implementation of the framework that we recommended, because our view would be that that is legitimately the responsibility of elected officials and the officials who work with them, but we did recommend a multi-stakeholder liaison committee on the implementation of the regulatory framework.

As part of our process, we established a round table that met every month for about six months to give us advice. There were people there from the lobster industry, the tourism industry, the aquaculture industry, the Ecology Action Centre and so on. What we had in mind is that that kind of body should exist on a permanent basis as a place where the implementation of the framework can be discussed not just with government but in a forum that includes all the constituencies and government.

I can't say that the people at the round table agreed on everything, but it was impressive how much agreement they did reach in our process. It was interesting how often they learned that they had different understandings of the facts on each side of the issue. We thought that making something like that a permanent part of the regulatory framework could help to build the momentum towards less division and disagreement about the industry in Nova Scotia and more consensus on how the industry should develop for the good of the province.

The Acting Chair: Welcome back, Mr. Chair.

Senator Fabian Manning (Chair) in the chair.

The Chair: Senator Meredith.

Senator Meredith: Thank you for your presentation.

To follow up on Senator McInnis' question in respect to individuals and their property rights, talk to me about the process. The first thing you mentioned as I walked in on your presentation was about consultation with the public. That is almost like a buzz word around here. Folks are saying, "We weren't consulted." In this process, we understand it is a little different. However, it is very important in terms of having those individuals who are for the industry and those opposed for various reasons. Talk to us about how that consultation would roll out. Did you discuss that? Was that part of the recommendations?

Mr. Lahey: To be clear, senator, in the framework that we proposed, or in the process that we used to create our report?

Senator Meredith: In the process that you are proposing.

Mr. Lahey: The first thing to emphasize is we recommended that there should be public involvement from the moment someone decides, "I would like to develop this part of the coastal region for the purposes of an aquaculture operation." We proposed a mechanism that currently exists in Scotland, where someone who wants to develop an aquaculture site applies for something called an option to lease. That allows them to engage the public from the moment they start considering proposing a site without losing proprietary ownership of the opportunity to develop that site.

Public participation would start right from the very beginning. A lot of what we heard from communities was resentment and anger about how advanced projects would be before they felt that the community was given an opportunity to participate. On some occasions they would say, "There were things we could have told them that, if we had had a chance to tell them earlier in the process, it might have sent them in a direction that minimized or avoided some of the concerns that subsequently arose."

From there, there would be an obligation on a proponent to engage in an inclusive community consultation that would result in a scoping report, and the scoping report would be an essential part of the application for a licence.

There would then be a screening analysis of the application and the scoping report. One of the elements of the screening — this is by the regulator — is to determine whether or not there has been adequate, fulsome engagement with interested parties. That by itself would be a reason to send the process back to the beginning if the regulator decided that you need to do more work on community consultations. The public would have an opportunity to have input into the screening — not a hearing, but an opportunity to provide comments.

The other thing that's important to emphasize is that all of this is now happening on an open, public record that anyone can have access to. This is our recommendation.

Once an application is over the screening process stage, it goes to a hearing in all cases. Currently, the Nova Scotia legislation says there may be a hearing, but there doesn't have to be a hearing; it's discretionary on the part of the minister. In the regulatory framework that we proposed, there would have to be a hearing.

The hearing could be a paper process for shellfish aquaculture. Our finding was that although shellfish aquaculture can cause concerns with neighbours — interference with activities, boating and so on — it doesn't give rise to the same level of concerns around environmental impact.

Senator Meredith: Talk to us about the hearing process. How would that roll out, and what kind of time frame are we looking at? Because from an economic standpoint, I'm entering the industry, identified a site location, invested some monies already and I'm looking to invest more. From an economic standpoint, creating jobs on a coastline for our community will impact upon me in terms of whether I make that investment or not for a protracted time frame.

Mr. Lahey: We essentially recommend two kinds of hearings: a paper process, which we call an administrative hearing; and an in-person, face-to-face hearing, which we call an adjudicative hearing. Our expectation is that the paper process usually will be more expeditious than the adjudicative one and less expensive — not necessarily so, but usually. To some extent, that's the first fork in the road in addressing the kinds of concerns you've just indicated.

For finfish applications that are in areas previously classified as green, an administrative hearing would be an option, because the classification process will have already given communities the opportunity to participate in the process for the purposes of classification of the coastal area for suitability.

If the finfish application is in an area that has been classified as generally unsuitable or suitable only depending upon the nature of the particular project, our framework would require an adjudicative hearing, the theory being that there are more likely to be more serious issues that have to be addressed for such applications, and it's more appropriate for the highest level of process that our framework contemplates being applied to those situations.

The other thing I want to say, which is more directly responsive to the question, is that our framework would require the regulatory agency, at the scoping level, to define how long the hearing process would take so that at that stage companies are in a position where they will know that they'll have a "yes" or a "no" answer within a prescribed period of time.

One of the concerns that many people in the industry told us about under the current regulatory framework is that they are not getting decisions. It's not that they are getting negative decisions; it's just that things aren't moving. Our analysis is that the reason they are not moving is, in part at least, a manifestation of this loss of social licence. The regulatory process is not as prepared as it once was to stare community opposition in the face and make a decision one way or the other.

Requiring the regulator to say, at the beginning of the hearing process, "We will have a decision for you one way or another" provides some guarantee and assurance to applicants and puts everyone else on notice that this process is going to be completed within this time frame. Keep that in mind when you make your choices about what evidence and issues you're going to raise. It hopefully will encourage people to concentrate on what is really important.

Senator Meredith: You talked about enforcement of the licence. Talk to us a little more about that in terms of the regulatory standpoint. I'm an operator. There are certain requirements. Is it three strikes and you're out? I've met all the requirements, but now I've got to operate under strict guidelines, and what if I breach those? Talk to us about that.

Mr. Lahey: There is no question that we really emphasize the need for more oversight, more monitoring and a capacity to enforce through, for example, prosecution, where that is the warranted and just regulatory response. Our observation was that the regulatory framework in Nova Scotia — I should say historically — has been quite passive. There are a lot of contributing variables to that. One of them might be as simple as lack of resources. It's a very small department that regulates the industry in Nova Scotia. It has a very limited number of bodies and simple things like it doesn't have many boats. So immediately questions are raised about what kind of independent oversight can the regulator actually apply to the industry if it's dependent on the industry for resources as basic as boats?

So there is a heavy emphasis on the building up of regulatory capacity and the existence of the regulatory will to use the full spectrum of enforcement mechanisms where the full spectrum is necessary to achieve regulatory compliance.

Conversely, we tried hard in our report to emphasize that for companies that are appropriately licensed and that are complying with the legislation and their terms and conditions, the regulatory process should validate that. For example, when it comes time for licence extension, they should have an expectation that their renewal will be longer because they have demonstrated that they are a dependable operator and that they're operating in a site that is not just theoretically suitable for aquaculture but that they have proven it's suitable for aquaculture because of their compliance with the regulatory framework.

The last thing I'll say on this is that when we talked to other regulatory agencies, a common theme was that as the industry grows, the capacity of the regulatory agency needs to grow as well. So that's size and number of regulators and physical resources, but it's also sophistication of knowledge, access to current, state-of-the-art research and knowledge about the industry. That was a common theme that we saw when we studied the trajectory of regulatory reform in other jurisdictions. I'm talking about New Brunswick, Newfoundland, Scotland and Maine. They were the jurisdictions that most people involved in our process cited most often. Either positively or negatively, those are the jurisdictions they sited cited most often.

Senator Raine: Thank you very much. This is most interesting.

During your study, did you have a chance to look at what is happening in British Columbia and are the proposed regulations going to be similar or aligned in any way?

Mr. Lahey: We had a study commissioned for us by someone who compared the regulatory frameworks in the jurisdictions I've just mentioned and British Columbia. We also paid careful attention to British Columbia from the point of view of the jurisdictional issues. In British Columbia, our understanding, as a result of a decision by the Supreme Court of British Columbia, the Department of Fisheries and Oceans is the lead regulator of aquaculture, whereas in Eastern Canada it tends to be the reverse; the provinces are the lead regulator and DFO and other federal departments play an important role. I wouldn't want to say they're supplemental, but they're not the lead regulator of the industry. They're not the main industry regulator, is the way I would put it. We thought a lot about that in the context of whether it had any implications for Nova Scotia.

The only other thing I can say is that we saw remarkable similarity when we looked at the structure of regulation in those jurisdictions, including British Columbia, essentially with the basic elements of the regulation of aquaculture. It's done as an industry regulation model as opposed to an environmental regulation model imposed on the industry. It's done through a licensing mechanism. Other characteristics of the regulatory framework are remarkably similar.

The only other thing I'll say is the wild species at issue in British Columbia are different than in Nova Scotia, and that makes comparability at the industry level a relatively tricky business.

Senator Raine: I appreciate that. I know in B.C., for instance, the acceptability of the siting is a provincial jurisdiction.

Mr. Lahey: Right.

Senator Raine: That's where I was thinking there could be commonalties. So you're taking an approach where you call it suitability.

Mr. Lahey: Yes.

Senator Raine: I think that's kind of like zoning, coming up with a red light, yellow light, green light process for potential suitability. It's not a given, but you're already having a good look at what would work from where it's located.

Mr. Lahey: Yes. It's trying to make that assessment of suitability more proactive. It's the very front end of the process and then licensing takes place in that context, as opposed to using licensing as your vehicle for doing both: assessing suitability of the coastal area and the suitability or appropriateness of the proposed project.

In our process we had people wanting us to recommend a comprehensive coastal planning/zoning process for Nova Scotia, and we didn't feel that was part of our mandate. So we came up with a classification system specific to aquaculture that encompasses the interaction between aquaculture and other coastal economic activities like lobster fishing, angling, tourism and so on.

Senator Raine: We really have to respect the role of First Nations in British Columbia. If anything, they're the first doorway to go through. It's interesting, because they have a lot of traditional knowledge from living on the coast that is very valuable.

Mr. Lahey: Right. Chief Terry Paul from Membertou was on our advisory committee. He was remarkably helpful. We had, through his good offices, opportunities to talk with other Mi'kmaq leaders in Nova Scotia. They were very helpful to us and made it very clear that their discussions with the provincial government were not going to be through my colleague and me, but directly with the provincial government. They have an interesting perspective on this.

In Nova Scotia, at least on the shellfish side, the Mi'kmaq were involved in the very beginnings of the industry in the 1960s and early 1970s.

Senator Raine: Thank you.

Senator Meredith: What were some of the concerns that First Nations people had? I believe there is correlation with that being reflected across the country in terms of only being in B.C. I know they said they're not speaking to you, and possibly rightfully so. They have treaty rights and so forth. I just thought of this concern. What were the concerns they expressed, if any?

Mr. Lahey: I know you're not asking me to do this, but I always feel compelled to say that I would not presume to speak on behalf of First Nation communities.

Senator Meredith: We know that.

Mr. Lahey: People who spoke to us from that perspective shared many of the same concerns that other Nova Scotians shared with us, in particular the concern about the potential adverse environmental impact of marine-based finfish aquaculture. They expressed a particular concern about wild salmon. Why I say a particular concern, it was very similar to the concern raised by the Nova Scotia Salmon Association, but the Atlantic salmon has a particular spiritual importance to the Mi'kmaq community. They put their concerns about potential adverse impact on wild salmon in that context.

They had particular concerns around potential adverse impact on what they called submerged archaeology of Aboriginal significance and a particular concern about potential adverse impact on their Aboriginal fishery for ceremonial and sustenance purposes.

It's only the First Nations communities that could have those concerns. Those are interests that are particular to them, and they certainly expressed those concerns with us.

Senator Meredith: Thank you very much.

Senator McInnis: The National Aquaculture Strategic Action Planis a body that was put in place in 2010, and DFO and all of the provinces are involved. They were supposed to report. It seems like we tend to be going from one group doing one thing and we have another group doing another. It seems fragmented. Have you made a presentation of your report to DFO?

Mr. Lahey: No, we haven't.

Senator McInnis: It's not your responsibility, but will the province do that or will you urge them to do that?

Mr. Lahey: In our report we deal with intergovernmental and regional cooperation. We really emphasize that if we're right that a regulatory framework such as the one that we've proposed is necessary for moving the industry forward in Nova Scotia — that's our conclusion; it may be wrong, it may be right — then Nova Scotia needs to move forward with regional cooperation and collaboration with the federal government in the context of Nova Scotia's need for that kind of regulatory framework.

Senator McInnis: But you suggest in your report a memorandum of understanding, and you would operate that way?

Mr. Lahey: We endorse that approach because, looking at it more from an industry point of view, one of things we heard from the industry consistently was the perceived lack of coordination of regulatory activities between governments.

We're not in a position to validate these concerns, but one of the concerns that they raised frequently was the application of federal fishery regulations — designed with wild fisheries in mind — to aquaculture stocks. The only reason I mention that is not to validate that concern. It's an example of the industry saying to my colleague and I, "We want as much cohesion and alignment between the various different regulatory bodies that are involved in aquaculture as we can achieve."

In that context my colleague and I recommended that the memorandum of understanding model, that historically has been used, continue to be utilized in the future. Maybe I'm not getting to the point that I'm really trying to make. Why? Because that concentrates a considerable amount of the regulatory work at the provincial level. It means that the industry has that regulator to work with as opposed to making interaction with multiple regulators more necessary than it already is.

Senator McInnis: And it's important. Your recommendations are calling for a tremendous number of inspections, surprise inspections. You're going to have to have CFIA involved. You're going have to have Health, Environment. I will just read a sentence from the report.

It will require the development or extensive rebuilding of administrative and information systems, the reorganization of bureaucratic structures and significant changes in the relationship between the DFA and other parts of government, particularly the Department of Environment.

It goes on about new additional capacity, and we mentioned staff and so on. I'd rather this not die. I'd like for this to happen. You were a deputy minister. Why don't you go back and take that job? It's going to be very important.

Finally, you mentioned in the report about the appeal process to the minister. I don't think you mentioned the quasi-judicial aspect. You mentioned the Supreme Court, that there could be appeals, but yet you have a timeline for the approval of the application. Have you ever tried to get before the Supreme Court in a hurry?

Mr. Lahey: No.

Senator McInnis: As you know, this stuff takes time, and it's going to take the involvement of Justice and so on. This is a big deal.

Mr. Lahey: It is a judgment call as to the right balance between a suitably rigorous process, one that gives everyone the opportunity to participate and allows the decision to be made on the basis of all the evidence, and expedition. At least in some situations and contexts, too little process ends up taking too long because it invites appeals. It invites the restarting of the process. On the other hand, if you overdo it with process, that's definitely not going to be expeditious.

We have tried to develop a process that is sufficiently rigorous so that when it comes to appeals it should be the expectation that most of those appeals won't be allowed. Why? Because the process has been sufficiently rigorous to validate the conclusions that it comes to.

With time, if the process works well, it should become more efficient and more expeditious. People will learn what issues are worth raising and what issues you really shouldn't bother raising because the evidence and the arguments are to the contrary.

Senator McInnis: You're right and I agree. It was said in the report. This is the way to a sustainable aquaculture industry. The greatest challenge is going to be over the next three years in getting this implemented, getting it in there, getting the system in place, because once it's in place, then you're right, the appeals will be quite slim.

Congratulations. I think it's a wonderful report.

Senator Munson: I had specific questions at the beginning. This is a very easy question. You probably spent so much time on your panel that you didn't have much time to view our hearings, where we have been given a lot of information and we have a few months to go in our study.

There seem to be so many roadblocks to a real strong aquaculture industry in this country. We see what's happening in the rest the world, so I'm curious to know what you would like to see in our report that may come out of your report that would give added value to what we want to say to the Canadian public that would give us another guiding principle to move this whole debate ahead?

We have these discussions about Nova Scotia. I'll probably get in trouble for saying this, but people talk about the recreational fishery and the view and so on and so forth. The Halifax that we see today, which is so beautiful, looks out over all those oil refineries. That's not nice to look at, but it's about the economy and it makes sense for the economy to work. Who wants to look at it, but it's there. Fish are there too, and the industry has to find a way of being more viable. Even though it may not look good to others, it is what it is.

I'd like to get a viewpoint from you on what we could add to our report from your perspective, because this is very complex work that you folks have done.

Mr. Lahey: That's quite an opportunity you've given me. I'm realistic, though, about how much influence I may have.

It's probably not surprising, given the report that we wrote and the amount of time we put into it, that a credible regulatory framework, in our view, certainly in Nova Scotia, is an essential part in the industry having the opportunity to develop that the industry wants and, at least from a Nova Scotia perspective, Nova Scotia needs.

As the Ivany report in Nova Scotia said, Nova Scotians need to be saying yes to some industries in the natural resources sector. We can't say no to them all and still expect to have a prosperous economy.

So a credible, reasonably rigorous but proportionate regulatory framework — and when I say "proportionate," proportionate to the real risks associated with this industry — is a critically important part. It's sometimes said you can't regulate yourself to prosperity. I think that's probably true, but you can't really achieve prosperity in some of these industries without a credible, proportionate regulatory framework that people in the public can depend upon.

This has become a sector in Nova Scotia that's very polarized, but a lot of people in the public just want to know that there is dependable, realistic oversight. If they can be assured of that, they will be supportive. I think that's a critical point of it.

The theory, if I can say that — I am an academic, after all — behind our report is that some of the disagreement about the industry that currently exists, in particular the marine-based salmon industry, that is conducted at the policy level and/or the political level needs to be brought back down into the regulatory process. A core element of our framework recognizes that the concerns that people have with the industry are more or less serious depending upon the biophysical context, the socio-economic context within which the industry is locating.

If you have deep water, high flow rate, larger bays, a lot of the concerns are less serious than when you have a small bay, shallow waters, and "limited flushing," is the term that they use. Instead, we're now having the debate at the abstract level whether it is bad or it is good. That is polarizing and not conducive to moving the industry forward in the situations where it should be allowed to move forward.

Senator Meredith: Senator Munson raised the issue of economics. In a perfect world, a perfect scenario, what is your take on what the numbers would look like if we get this right economically for Canada? We see what's happening in Scotland and the growth of their industry and how jobs are being created. Have you quantified what that would look like here in Canada if we truly get it right?

Mr. Lahey: You're really now asking me to answer a question that is beyond the scope of my expertise.

Senator Meredith: You know we're going to push you to the limit.

Mr. Lahey: I'm not in a position to give a very informed opinion about that. I heard enough in the process that we were in to believe that the industry can make — well, first of all, is making a positive impact in many communities in Nova Scotia. I'm talking about the industry including the shellfish aspect of it. I also heard enough to know that the industry can make more of an impact moving forward.

Nova Scotia is a little different. We have to be realistic. We don't have the opportunity, it doesn't seem to me, to concentrate the industry as it is, for example, in New Brunswick or I believe as it is in Newfoundland, in parts of the province that are more suitable for the industry when you think of things like proximity to communities, depth of water and so forth.

If the industry develops in Nova Scotia, it's going to be dispersed geographically. That presents certain challenges from a social licence point of view. So that might limit the extent to which the industry has a bright future in Nova Scotia. It might limit the opportunity for growth in Nova Scotia, but I think we heard enough in our process to know that the growth and development of the industry could have a positive impact on the economy in Nova Scotia.

In many ways, even though we're not economists, that's one of the fundamental conclusions we arrived at in our report, that we should have a better regulatory framework precisely because the industry is worth having, and a regulatory framework that is strong and more dependable will help to make it happen.

The Chair: Those are our questions. I want to thank the witness for your expertise and being here. There is certainly some great knowledge from the work you have done, and your report is a very important part of our process here also. We thank you for your efforts in doing that and thank you for taking the time to be here this evening.

Mr. Lahey: Thank you very much, Mr. Chair.

The Chair: Colleagues, do I have agreement to go into camera?

Hon. Senators: Agreed.

(The committee continued in camera.)