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

Issue 19 - Evidence


OTTAWA, Tuesday, March 10, 2015

The Standing Senate Committee on Fisheries and Oceans met this day at 5:05 p.m. to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada; and to consider a draft budget.

Senator Fabian Manning (Chair) in the chair.

[English]

The Chair: The first order of business is a budget item in relation to professional and other services and the hiring of a consultant to assist with the development and presentation of our aquaculture report. We have a budgeted amount of $24,625 to carry out this work. Could we have a motion to that effect?

Motion by Senator Wells, seconded by Senator Hubley. Any questions or comments? All those in favour?

Hon. Senators: Agreed.

The Chair: Contraminded?

Carried. Thank you.

Good evening everybody, and welcome to this meeting of the Standing Senate Committee on Fisheries and Oceans as we continue with our study into the aquaculture industry of Canada, its challenges and opportunities.

Before I ask our guests to introduce themselves and present opening remarks, I would ask that senators take a moment to introduce themselves.

Senator Munson: Senator Munson, Ontario.

Senator Hubley: Elizabeth Hubley, Prince Edward Island.

Senator Raine: Nancy Greene Raine from B.C.

Senator Meredith: Senator Meredith, Ontario.

Senator McInnis: Tom McInnis, Nova Scotia.

Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.

Senator Wells: David Wells, Newfoundland and Labrador.

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

The Chair: My name is Fabian Manning, senator from Newfoundland and Labrador, and I'm chair of this committee.

Please take the opportunity to introduce yourselves, and then I understand that you have some opening remarks. We have a one-hour time slot for our meeting, so I would like to get into questions from our senators as soon as we can. Please introduce yourselves first.

Michael van den Heuvel, Canada Research Chair in Watershed Ecological Integrity, Canadian Rivers Institute, Department of Biology, University of Prince Edward Island: My name is Michael van den Heuvel and I'm with the Canadian Rivers Institute. I'm located at the University of Prince Edward Island.

Robert Johnson, Sustainable Seafood Program Manager, Ecology Action Centre: I'm Robert Johnson. I'm the Sustainable Seafood Program Manager at the Ecology Action Centre in Halifax, Nova Scotia.

William Ernst, as an individual: I'm Bill Ernst. I am a recently retired Environment Canada employee and I've been involved in pesticide research for the approximately 33 years I was employed with that department.

The Chair: I understand you have opening remarks. Who would like to take to the mike first?

Mr. Ernst: I see I'm on the schedule first.

The Chair: Since you're retired, you go ahead.

Mr. Ernst: Thank you for the opportunity. The three of us are here at your request to further explain concerns that were placed in an open letter to the Prime Minister quite recently, and we're here to round out some of that letter.

I believe that the primary intent of the new regulations is to remove the oversight of section 36 of the Fisheries Act as it pertains to pesticide and drug use in aquaculture. I'm sure you're all aware that that section was recently used in a prosecution in New Brunswick against an operator who used an illegal pesticide over an extended period of time, even after warnings from Environment Canada. Undoubtedly that use resulted in large kills of lobsters at the time. They used a pesticide in that instance which was the same pesticide used in 1996 by operators, and that use resulted in a lobster kill as well. So it's my opinion that those operators knew the full risks of using this illegal pesticide.

The apparent lack of regard for the potential effects on co-users of the marine environment, as well as their disregard for directions from Environment Canada, would seem to indicate that not all of the industry participants are currently good candidates for self-regulation and reporting on which these regulations are based.

I believe that rather than be accountable to a very reasonable environmental protection law, one which every other industry in Canada is able to comply with, the industry simply requested that the government exempt them from these provisions of the law. The government in these regulations, it would seem, is willing to grant that request on the grounds that it makes an apparently confusing regulatory regime easier and more streamlined. Again, this is a landscape that all other industries in Canada are able to negotiate and operate under while still complying with this provision of the act.

In my experience, the current provisions of the Fisheries Act have never been used in a frivolous manner, especially with regard to the aquaculture industry. It's only ever been used in the recent past, to best of my knowledge, when there is a substantial risk or demonstrated impact in the environment. I'd challenge the supporters of the proposed AAR, aquaculture activities regulations, to show otherwise, and I would point out that there are many low-risk chemicals being introduced to the environment, both in aquaculture and other industries, that are not being prosecuted under this section of the act.

Popular to common misconception, this provision of the act is not administered in a zero-tolerance way. The basic tenet of the proposed regulations is that registration under legislation managed by Health Canada is adequate to ensure aquatic environmental protection. I believe that not to be true for a number of reasons.

Although registration of pesticides under the Pest Control Products Act involves an aquatic risk determination, that risk assessment is done by the Pest Management Regulatory Agency, which does not have a singular environmental protection mandate as does Environment Canada, the current administrators of the act. In my experience, the primary objective of the Pest Control Products Act is to provide effective products to users and secondarily to ensure that the environment is protected from environmental effects. That divided mandate affects the outcomes of risk assessments.

I also note that the procedures done under these risk assessments are less than a transparent process in that they use proprietary data to do the risk assessments.

The aquaculture industry has stated its need for access to a variety of pesticides that can be rotated in an attempt to address pest resistance which has already been demonstrated to be occurring. More importantly, they've indicated a need for access to cheap and effective pesticides. Unfortunately, if it's highly effective against sea lice, it's also highly effective against other organisms like lobsters.

Health Canada has recently demonstrated a willingness to register a potent class of chemicals known as pyrethroids which recent Canadian government research has shown to have risks to lobsters up to 10 kilometres from the treatment sites. That class of chemicals is the one that was the subject of the recent enforcement action in New Brunswick.

The proposed regulations also stipulate that only registered drugs will be used in aquaculture as defence for their environmental safety. To the best of my knowledge, none of the drugs currently used in aquaculture, even though they are FDA registered, have been subject to a formal and defined risk assessment by the Canadian government. Furthermore, many of the drugs in current use are primarily registered for other purposes that do not include their release to the aquatic environment and are used in aquaculture off label under the direction of a certified veterinarian whose environmental protection knowledge may be limited at best. It's not clear to me how such a practice will be prevented by the new regulations.

Health Canada currently has no capacity for research or monitoring the environmental effects of aquaculture pesticides and drugs once they are put into operational use. That activity was historically done by Environment Canada as well as Fisheries and Oceans Canada. However, coincidentally, such programs have recently been almost eliminated in those departments.

The proposed regulations make no provision for collection of environmental impact data for pesticides or drugs in the aquatic environment. This means that the regulations and current government policy will ensure that once they are in operational use, there will be no way of determining their real environmental effects. Surely this can have no other effect than to decrease our environmental security.

Finally, if the AAR is implemented it will create a very biased environmental protection policy. As an example, some of the pesticides which the industry wishes to use and which may be facilitated by these regulations are also used in agriculture. Their aquatic toxicity has been judged to be so severe by the registration process under the Pest Control Products Act as to require users to protect aquatic ecosystems by buffer zones of up to 100 metres. How will those users react to being held to comply with such restrictions in the future if the aquaculture industry is allowed to deposit those same pesticides directly into the marine environment?

It would seem at this point that the aquaculture industry has convinced the federal government that they require special treatment under the Fisheries Act. In my opinion, that is special treatment and unwarranted. Functionally exempting this industry from section 36 will increase the stress placed on still productive wild fisheries such as the lobster fishery, which remains important to the coastal communities throughout Atlantic Canada.

If passed, this regulation regresses and confounds application of their most important aquatic protection legislation in this country and will be another step in reducing environmental security in favour of economic advancement.

In my opinion the proposed regulations will reduce the environmental protection standards applied to aquaculture activities and will diminish public confidence in the oversight of the industry and increase conflicts with co-users. By my estimation, this will have the effect of reducing the possibility of a sustainable industry rather than promoting it.

The Chair: Thank you.

Mr. Johnson: Thank you, senators, for the invitation to appear here today. I consider it a privilege to speak to you. I am here to speak representing the Ecology Action Centre and its thousands of members in Nova Scotia and deliver our position and our presentation supportive of the sustainable development of aquaculture in Canada but in opposition to the proposed aquaculture activities regulations slated to be approved and in place spring 2015.

We've been involved as an active stakeholder in the process during consultations over the past few years as these regulations have been developed. I submitted earlier our public comment position. It was submitted October 22 of last year and details the key concerns that we have with these proposed regulatory changes.

We have always been against the premise of the changes. I will speak to the local situation in Nova Scotia as well as to the global process of eco certification in the seafood marketplace landscape. Starting off with Nova Scotia, as you know, open net pen finfish aquaculture has served to divide communities across Canada, as well as in others countries. In Nova Scotia this has been particularly divisive for two main reasons: our shallow coastal waters with limited flushing and the interaction with active coastal fisheries, most notably the lobster fishery. These two conditions are very different than most jurisdictions where salmon farming and open net pen finfish farming occur globally.

We have been involved in Nova Scotia in the independent regulatory review process, the Doelle-Lahey independent panel, which had delivered a world-class framework for regulatory reform to the provincial government in Nova Scotia now. It has been an instrumental process in bringing together diverse opinions and information. We know you've heard from Mr. Lahey and Mr. Doelle on this process.

Nova Scotia is about to embark on a journey of implementing regulatory excellence. This is extremely important for our economic future, social licence and the resolution of conflict in our communities.

To have these proposed federal aquaculture activities regulations undermine this process sends us back to a place of conflict. We see no reason for one industry to be exempt from section 36 of the Fisheries Act. Every other industry complies and has complied with this piece of legislation for over 100 years. This section has been used to protect the marine environment from deleterious or harmful substances in the marine environment, including the illegal use of pesticides in the open net pen finfish aquaculture industry. We are astounded that the reaction of this industry to illegal activities and fines is to lobby effectively to change the law. Where else can this be done or is this acceptable? Our environmental protection laws and regulations are there for good reason and must be upheld.

On the global trade and certification aspect, third party certification for farming, forestry and wild fisheries has been in place for many years and in some cases decades. Industry recognizes that verifying good environmental practices is not only good for their financial bottom line but also promotes responsible corporate citizenship. Aquaculture regulation and aquaculture certification are later to the sustainable seafood landscape. What we've seen, namely the high bar, the Aquaculture Stewardship Council, is not an acceptable bar in many realms for certification. What we do know is when we look at the company that has been one of the most vociferous about the need for changes and reduced regulations for increased pesticide use under section 36 is also the company that is least likely in Canada to achieve certification best practices as they were under the new Aquaculture Stewardship Council criteria for salmon farming.

Much of this lobbying has occurred through the Atlantic Canada Fish Farmers Association and the Canadian Aquaculture Industry Alliance, CAIA, as well as the companies themselves. Rather than ensuring that certifications are backed up by a strong and trusted regulatory system, the industry has chosen to advocate for a weakening of that system, which sends an unfortunate and damaging message about Canadian farmed salmon.

The significance: Bill spoke to the open letter to the Prime Minister of Canada with 120 signatories across diverse individuals, groups and organizations. We were one of the signatories of that letter sent on February 17 to the Prime Minister and to the Minister of Fisheries and Oceans. It's extremely important to highlight and underscore the diversity of those signatories: well-respected academic scientists; former federal government scientists, as those currently employed cannot speak for fear of loss of jobs or funding; fishing associations; and conservation organizations.

In the past when this diversity of stakeholders and expertise has come together around a policy issue, it would not only be significant but would also signal to government that the policy direction is wrong. We've lost our ability to consult properly on policy, and this AAR process and direction is a case in point. Our submission in the public consultation process, as well as many others, has received no response and, to the best of our knowledge, no incorporation or input.

In that public comment submission, we urged the Department of Fisheries and Oceans to considerably amend the proposed aquaculture activities regulations to bring them in line with their mandate to manage Canada's fisheries and safeguard its waters.

In closing, a couple of key elements of this submission are critical to highlight for discussion today and your focused attention in your study on the regulation of aquaculture, current challenges and future prospects for the industry in Canada.

I'd say the effect or result of these proposed regulatory changes will be to codify or otherwise normalize or standardize the now-banned use of deleterious or harmful substances in the form of toxic pesticides put directly into the marine environment by the aquaculture industry. It becomes the new normal.

Canada's largest independent aquaculture company was charged by Environment Canada and found guilty of using illegal pesticides. The response we see here proposed in front of us is regulatory changes that get rid of the law and remove the only department that has ever enforced those laws by taking Environment Canada out of the equation. We don't believe that Health Canada's mandate and expertise in health rather than environmental protection is appropriate or adequate to authorize the deposit of pesticides and drugs into the aquatic environment. In no way will that serve to protect wild fish and fish habitat.

Look at what's driving this: a concerted industry lobby and five years of process. They're not about cutting a little bit of red tape, streamlining and simplifying regulations, but rather to significantly alter and exempt an entire industry from important legislation.

There are concerns about the legality of the proposed regulatory changes. It seems there's a great degree of vulnerability of this government to legal challenges, and I would urge this committee to look into and consider that in this context.

This is a very serious matter, senators. It's no small thing. It's a big game-changer. No other industry gets special treatment to put harmful substances directly into our Canadian bays and harbours. To effectively exempt an entire industry, and just one, is unacceptable.

To close, I reiterate that the Fisheries Act is the central guiding legislation of the Department of Fisheries and Oceans and their committed mandate to the people of Canada to responsibly manage our greatest public resource — our wild fisheries and the marine environment. The Fisheries Act must be maintained intact across all industries and jurisdictions.

Thank you.

Mr. van den Heuvel: Thank you for the opportunity to speak to you. I'm an environmental scientist, so I'm going to base what I say on verifiable facts. Of course, we all have beliefs, so I don't want to preface it by saying that I believe aquaculture is essential to feed the world high-quality protein and to protect our oceans from overfishing. I think Canada should be a world leader in sustainable aquaculture, and that's quite possible. Unfortunately, we're going to have to make a 180-degree turn in the other direction if we want to do that.

I've talked in the broader sense about aquaculture with regard to section 36 changes because I think the root of the problem is the broader unsustainability of this industry. Changes to section 36 are a kind of backward bandage to try to solve some of the problems caused by this underlying unsustainability. It's unsustainable environmentally, for sure, as my colleagues have been talking about. It's unsustainable socially, as my colleagues have talked about. It's also unsustainable economically, I believe as well. It could be a great economic benefit to Canada, and I don't believe it is.

Regarding this proposed change to section 36, small detail, I'm talking largely about finfish operations because this has been the driver of these changes. However, this does not apply only to finfish operations as it will also apply to our second highest aquaculture in terms of a production operation, and that is mussels. There's been a great deal of concern over an introduced species on mussels, the tunicates, and the use of slaked lime to treat those tunicates. The Prince Edward Island Fishermen's Association has come to me a number of times to ask me to put together proposals to see what the effects on lobster in Malpeque Bay are. It's not just salmon finfish aquaculture. There are broader ramifications to this and I wanted to make you aware of them.

The proposed regulation change would functionally exempt, and I don't think "exempt" is a strong enough word but rather "decriminalize" is stronger, the aquaculture operations from the general provisions of section 36, which prohibits deleterious substances in areas frequented by fish. I say "decriminalize" because we have to remember that the Fisheries Act works hand-in-hand with the Criminal Code, like many other federal laws. You are essentially decriminalizing it.

What provincial legislations don't do, as good as they may be and as good as the monitoring regulations may be, is work hand-in-hand with the Criminal Code. This legislation has teeth. Let's face it. The provincial legislation has fewer teeth. You can be charged criminally under the Fisheries Act for doing something illegal in Canada.

Pesticides and drugs, as has been said, for deposit in the aquatic environment can be done in a manner under the Pest Control Products Act. That sets out how we can do that in Canada. But there are really no repercussions at all if the operators don't follow those guidelines for the Pest Control Products Act. Once again, this section of the Fisheries Act is our last resort backstop should something happen.

There's very little overlap in a regulatory or in a legal sense from requirements. In fact, many provinces have very few requirements at all. Those heavily into aquaculture are trying to build them and the guidelines around aquaculture. It's not cumbersome in any way because this section doesn't require the operators to put in any extra paperwork for their operations. Again, it's that backstop, that last resort, should deleterious substances harmful to fish be released. So there are a few economic disincentives to putting this regulation in. There's not a lot of truth in that.

Again, there's no closely overlapping legislation in the provinces, and it isn't really possible for them to overlap because provincial regulations don't have the Criminal Code. The provinces and federal government generally consider the marine environment to be federal jurisdiction, and I think that goes back to the Constitution Act, 1867. We need strong federal legislation.

Pesticide registration laws contain no consideration for environmental impact assessments whatsoever. They're simply not positioned. The reason is that there are two fundamental approaches for how we manage the environment. Ideally we want to say what the risk is of what we're doing and to try to prevent bad things from happening. I learned this in my second-year environmental toxicology course 30 years ago when I was an undergrad. This is fundamental.

We seek to prevent bad things from happening. We seek to reduce the risk. However, these are based on models, and models don't always follow the real world. One of my favourite sayings by George Box is that all models are wrong and some are actually useful.

We hope this pesticide regulation legislation is useful and prevents these things. However, we can't predict the real world, so monitoring and enforcement are required. They are essentially the opposite side of the coin. We cannot manage our environment by managing risk alone. We have to have enforcement to see if our risk is in balance, to validate our risk assessment, and we have to be able to enforce it before somebody breaks the law.

Canada, ironically, is a world leader in environmental effects monitoring. With our federally legislated program for pulp and paper effluents that came about around the early 1990s, we were a world leader in a federally mandated environmental effects monitoring program. No other country had done that to the extent that we do, and I'm quite proud of that, as are colleagues I know who have contributed to that. I don't want to take a backward step on that.

Section 36 of the Fisheries Act has been used as that final level of protection against environmental damage. I've heard fear mongering from various other industries as well: If you release anything into the environment, you can be charged. It never worked that way. It's been used for litigation in a responsible way, and it requires evidence that the plaintiff did not exercise due diligence. It's not just a matter of legal precedence; it's actually in section 78.6 of the act. Due diligence is enshrined in the Fisheries Act.

If you are following all the rules with a product, as you should, you cannot be found guilty. In practical law, for P.E.I., we get about two fish kills a year. Due diligence has been used for people to get off charges. Before buffer strip regulations occurred, people got off fish kills because what they were doing was the practice at the time; they were exercising due diligence, which also shows how provincial and federal laws go hand in hand. You can't have buffer strip regulations without the Fisheries Act, and you can't have the Fisheries Act without buffer strip regulations. That didn't work either. You have to have these laws, and there's case law to show that.

Irrespective of these changes, the industry has huge problems with regard to parasites and disease. The main parasite, the sea louse, is resistant to many agents that control it, and thus more and more dangerous agents and compounds are being used. To be honest, as a toxicologist, if one exercises any common sense, those compounds should never be allowed to enter any waterways. We've spent billions of dollars in research in understanding these compounds and trying to prevent them from entering waterways, and now we're talking about adding deliberately. In fact, if you had come to me and said, "What are the best compounds in the entire world to kill lobster with, Dr. van den Heuvel?", these are the compounds that I would choose that we're talking about as compounds for treating sea lice, just to emphasize how toxic they are to wild lobster.

There's significant potential for environmental and economic damage to the lobster fisheries, which is our largest private-capture fishery in Canada. That has already been clearly documented and litigated. That's not just my opinion. That has been discussed by my colleagues already.

The infectious salmon anemia virus is also here. It has been detected in a number of provinces, and losses are starting to mount. The virus caused catastrophic loss in Chile. I don't think that is likely to happen as catastrophically in Canada. It will be more a case of death by a thousand cuts, I think, just because we have better monitoring practices and further distance from our pens generally, though not in all cases. The virus is here, though. Humans have tried for a lot of years to defeat viruses, and we haven't been very successful so far.

Contaminant issues, finally, and the resultant clash of aquaculture fisheries, First Nations have coined the term "the salmon wars." I think that describes it all, for the level of social unrest and conflict and animosity this issue is causing. Again, social is an important leg of sustainability, and that's a problem.

We have a lot of problems with the industry. It's essentially unsustainable as it stands now. However, we have the solution, and the solution is being done. It's a move towards either closed containment or a land-based closed containment aquaculture where you don't have these problems. That has huge advantages: less need for antibiotics, faster growth of the product, no feces contaminating sea floor waters. In fact, the feces can even be used as a commodity, sold as a product, as fertilizer. No disease is spread to oceans, so none of the effects potentially on wild Atlantic salmon.

Of course, the industry will say that is financially unsustainable. But I can write a well-reasoned document saying why the sun wouldn't come up on March 10, today; and if you were outside, you would have seen the sun. It is being operated sustainably in almost every province in Canada right now, including three places in Canada where they're doing salmon. They're farming tilapia in Ontario in an enclosed system. So there's no point saying it's economically unsustainable. It's not just happening in Canada but all around the world. There's a huge capital cost of doing it, but we need to be moving in that direction. There are huge advantages for doing that.

As far as I can see, there's no logical rationale to help the sustainability of the industry for changing section 36 in terms of the regulations. It just makes it easier to use deleterious substances in aquaculture without our most important last-stop environmental protection. I say this is essentially a get-out-of-jail-free card. I don't say that lightly, because I think release of these illegal compounds is criminal, both in the logical and ethical sense. I don't think these compounds should see water in any way, deliberately in particular.

Changing an act that's designed to protect fisheries and to allow damage to another fishery seems to have some irony to me. We're trying to plug a sinking boat with these Band-Aids. What we need to do is start either paddling for shore or more seaworthy craft. This is a regressive proposed change. That's my submission.

The Chair: Thank you.

We have a list of senators with questions. I'm going to reiterate once again our time limitations here, because we have another panel afterwards. I'll entertain one question from each senator; and then, if there's time for follow-up, we will. We have six senators on the list now. I ask that the questions be direct and that the answers be even more direct.

Senator Hubley: Welcome to each one of you. It's not a good-news story by any stretch of the imagination.

One of your concerns seems to be that the modifications proposed in the aquaculture activity regulations in regard to deleterious substances, veterinary drugs and pest control products will lead to an increased use of these products. That, then, is going to have an impact on other fisheries. I will highlight the lobster and mussel industries, which are certainly important industries in the Maritimes. What leads you to this conclusion?

Mr. Ernst: It goes back to an issue that happened three or four years ago, where the industry was very desirous of registering a particular pesticide, AlphaMax. deltamethrin is the active ingredient product. There was a disagreement between scientists in Fisheries and Oceans, Environment Canada and the Health Canada risk assessors. Health Canada showed a willingness to register those products over the concerns of those agencies, so I believe that these regulations will take those agencies out of that discussion and in fact could lead to the registration of these chemicals in the future.

Does that answer it?

Senator Hubley: That's fine. Thank you.

Senator Munson: Thank you very much for being here.

I was curious to see the prosecution that happened in New Brunswick, what happened to that particular company. You said it was successful, but I don't know what happened to them. That's just an aside to my question.

Is there a one-size-fits-all pesticide that would be acceptable to the Ecology Action Centre or to you, as a former employee at Environment Canada? Is there something there that would work, that would not upset and kill, as you describe it here in a rather doomsday scenario, the lobster industry?

Mr. van den Heuvel: Some of the original treatments, like SLICE, were put in the food. It is actually a drug that you feed the fish and as such it doesn't get into the environment and certainly in the substantial amounts as you're treating in water. So that is preferable.

Senator Munson: I'm asking because the fisheries officials will have another point of view and there are reasonable men and women in this room who have two different feelings on the survival of the aquaculture industry and the enforcement of regulation. I'm just wondering about the pesticide aspect.

Mr. Ernst: Maybe I can add to that.

No animal husbandry activity has ever been able to devise a magic bullet. It hasn't happened in our industry of aquaculture. As I understand it, the desire on the part of the industry, and justifiably so, is to have a suite of chemicals that they can rotate, thus helping to alleviate pest resistance that develops, in particular when you use one pesticide for a long period of time. So, no, there is not one pesticide that will meet all needs. If you use a single pesticide long enough, resistance to it will develop, as was the case with the in-feed products, and you won't have an effective product anymore. So there is a need for rotational pesticides, but there is a need to recognize there is a limit to the environmental risk that you'll accept with those pesticides.

Mr. Johnson: I'll just add to that as well.

In terms of increased pesticide use, we've seen more sea lice issues. The head of Marine Harvest in Norway said if anyone can solve the sea lice problem, let me know because it's our biggest challenge. What we have is that paralleled with climate change. To simplify climate change, warmer water means more sea lice. More sea lice means more chemical use, more pesticides are needed and there is a greater risk of conflict for users in the marine environment.

Regarding the use of SLICE, the in-feed treatment, we have resistance to that. Using other pesticides is what's causing the bath treatments. The industry used to say that bath treatments were to be used as a last resort. What we're seeing now is a proposal for this to be commonplace. When your last resort becomes business as usual or normal, that's a problem.

Senator McInnis: Thank you for being here.

There was a large meeting that the Ecology Action Centre hosted at the Lord Nelson where some 400 individuals representing groups, and so on, came together. It's perhaps the first time in a long time that such a large group got together where there was a consensus on the Doelle-Lahey report and the recommendations.

I've had the opportunity to read that report through and through. It was an excellent report done by not just two lawyers but by one individual who was deputy minister of the environment and another person who was connected with the United Nations, very competent and capable individuals who took the time to go throughout the province and do research externally.

When I see these regulations here, the word that has not been mentioned is the word "trust." I see here in these proposed regulations a great deal of responsibility being given up to the owner and the operator. When I look at Nova Scotia in this report, which incidentally the minister of fisheries and aquaculture has said he is looking at positively, I see quite the opposite. I see more inspectors fully trained for aquaculture; more inspections, more unannounced inspections; more capacity to investigate complaints about compliance of a facility; more capacity to carry out aerial surveillance and access to vessels to carry out inspections; and complete transparency about violations regardless of the compliance action that's taken or whether it was taken. There's a clear link in terms of their performance and the transparency of the public to see it.

I don't see that. When you mentioned earlier that this will cut the underpinnings — not your words, mine — of what has been done here and has been proposed in Nova Scotia, comment on that, will you, please? Am I picking this up or am I missing something?

Mr. Johnson: You raised a lot of good pieces there.

I think social licence is a huge problem in the open net pen finfish aquatic industry in Atlantic Canada, globally on both coasts, but particularly I can speak to the Atlantic Canada and Nova Scotia experience. I think Lahey and Doelle outlined that clearly by having those 400 people come together at the Lord Nelson hotel in Halifax to support a regulatory framework. Groups, individuals and communities that wouldn't have talked regulation previously built some trust and some social licence and support for this to go forward.

What I speak about with these federal regulatory changes undermining that is these are giving the industry self-reporting and self-regulatory aspects where there isn't that trust or that track record. It throws out that social licence, the trust that's been built.

We've heard from the Department of Fisheries and Oceans that this increases oversight. I wish I lived in a rose-coloured-glasses world where you can get more from less, but when you're taking the expertise from people and departments who have it and moving it out to the industry and to Health Canada which doesn't, you're only going to get less oversight. You are only going to get an industry that said, "Well, we used illegal pesticides because we should have been able to," now saying, "We're using them now because they're legal, we can use them and we need to use them."

The stagnation of the industry in Canada for the past 10 years is not the result of a regulatory burden as the industry is saying. It's the result of poor industry practices that Michael spoke of. We're seeing that the regulatory climate needs to not choose one industry over another.

If you look at the economic argument as well, Norway produces six times as much farmed salmon as Canada with roughly the same workforce. Production increase in Canada of open net finfish aquaculture would likely lead to fewer jobs, not more. You get to a point of increasing efficiency and automation. That's what we've seen by the largest producer in the world that has a higher regulatory system than we do. Undercutting ours to try to catch up or get in line, or something, is simply not the way to do it.

Senator Poirier: Thank you again for being here. You've answered very well. You've explained quite well your disagreement with the proposed regulations.

If the regulations, in your point of view, are so bad and ill conceived, what would you propose to be different to have sound environmental regulation while allowing the industry to grow within its own framework? What would you propose? Anyone can answer.

Mr. Johnson: First and foremost, I think what we want in this context is section 36 and the Fisheries Act to be maintained, that is, to keep that section intact and make sure that the aquaculture industry has to abide by it.

Land-based closed containment aquaculture is the leading aspect of the industry. It's the future of the industry. You get away from the key negative environmental impacts of waste, disease, chemical use and escapes. It's the best way to ensure we're not impacting the marine environment and putting existing industries at risk.

Mr. Ernst: I would like to add something to that. Reinstating the research capacity within objective departments would be a recommendation that I would make too. If the current situation goes forward, there will be no research capacity to be able to determine what's actually happening once those products get put into operational use. So there is no feedback mechanism to be able to say whether we're having real effects on the environment without that research capacity in those departments, which Health Canada does not have.

The Chair: Senator Stewart Olsen.

Senator Stewart Olsen: My question has been very well answered.

A small one is economically unsustainable, Mr. van den Heuvel mentioned.

Mr. van den Heuvel: We're subsidizing this industry. If you lose a fish, you get paid up to $30 for that fish. I haven't done the numbers, but my colleagues from the Atlantic Salmon Federation tell me that hundreds of millions of dollars in compensation from taxpayers' money has been put into the aquaculture industry to compensate them for losses which are really due to the primitive and unsustainable way that we're doing aquaculture. We as the taxpayer are subsidizing this. I have no doubt the companies are making 50 per cent profit as they declare, although I think a half-million-dollar fine may have cut into that a little.

Economically, what is it bringing to the Government of Canada really? Yes, there are jobs, of course, but if we're paying out as much in subsidy as we are getting in revenue benefit, then it's the best revenue-neutral industry that creates jobs. No one ever does that honest economic analysis.

How can you value what the effects are on the lobster industry or the effects on the sea bottom? Those don't have a dollar value either, so somebody needs to do the whole economic equation and ask this industry is really providing when we take all the aspects into account.

Senator Stewart Olsen: Thank you very much.

Senator Meredith: With respect to my colleagues' question, you talk about models and solutions and land base. We saw how cost prohibitive that is for industry. We saw the volume of protein that will be needed, 50,000 metric tonnes or something to that effect, in terms of the next 20 years. We also see that the wild fishery is not sustaining itself. Where do we find the balance in terms of an economic opportunity, because the industry is not going away? How do we find the balance between what's required in terms of pesticides or lack of pesticides or the opportunity to grow this industry in Canada and create those necessary jobs, especially in the coastal communities? We see that happening in Europe and how productive they have been using their large bodies of water.

Mr. van den Heuvel: A small point: We've always been a resource-intensive country and selling fish is great, but it is not the only way to make money. The technology involved in cutting-edge aquaculture is a knowledge-based economy. That's the sort of innovation we should be pursuing as well as it gives you a value-added economy as opposed to just throwing fish feed in and harvesting the fish. If we could develop the technology and sell the technology, we'd be a lot further ahead economically.

Mr. Johnson: According to the most recent DFO statistics, 3,235 people were identified as working in aquaculture in all of Canada in 2012. That's counter to 14,000 to 18,000 that you've heard in previous testimony that I've read from the committee hearings. This is DFO's information, and I can send you the link to the latest 2012 data.

We've seen that the industry, under a fundamentally flawed model, has been very poor at creating jobs and at creating that economic benefit. The aspects of economic seafood sustainability have become a very big driver in terms of a market-based approach. Canada's largest retailer supports closed containment finfish aquaculture. They would buy as much as they could get, and that has been developing. It is technically viable and economically viable. In terms of shellfish aquaculture, we have a huge opportunity in Canada to grow that sustainable section of the industry.

So we have components of the industry that can be supported and advanced, and we support sustainable development of aquaculture. Open net pen finfish is a fundamentally flawed and outdated model. This is a last gasp attempt to try to fulfill its wishes to be able to move forward by using more chemicals in the marine environment. But it will not end well with our existing fisheries, which create a lot more economic benefit to this country's bottom line.

Senator Raine: It's great to have your knowledge here.

Mr. Ernst, you mentioned some of the pesticides that industry wishes to use, which may be facilitated by the proposed regulations. Could you give me the names of those pesticides?

Mr. Ernst: They're what we consider more toxic. Pyrethroid pesticides have the most promise, and the industry has expressed a desire to use them. Last I saw, Fisheries and Oceans website said that they would still considering developing these pesticides. Those are the ones that most concern me.

There are other less toxic pesticides that don't seem to exceed the risk thresholds that would trigger regulatory intervention: Salmosan and any of the in-feed treatments as well. The problem ones are the pyrethroid pesticides.

Senator Wells: We hear from you about the deleterious substances. It sounds like ecological Armageddon on lobsters and other things.

With the proposed regulatory changes and if these are such deleterious substances, why do you think they were approved in the first place? Are there other avenues that can be taken to have these pesticides banned?

Mr. van den Heuvel: Pyrethroids have not been approved yet.

Mr. Ernst: They're not currently registered, but one was registered for a short period. AlphaMax was used under registration by Health Canada. They demonstrated a willingness to register this product.

Mr. van den Heuvel: The trouble is that crustaceans, including lobsters, are so sensitive to these compounds that the U.S. pesticide industry has lobbied to remove crustaceans from being test species when estimating the risk of these compounds. If you look at the risk and don't consider that sensitivity of crustaceans, maybe they are fine. But that's the problem; you have a lot of crustaceans there.

Senator Munson: I would like to be a fly on the wall in a bureaucratic conversation between an Environment Canada person, like you who has just retired, and somebody from Fisheries and Oceans Canada.

What do you think is the driving force behind getting Environment Canada out of the oversight business? I'm trying to get a handle on the philosophy behind that.

Mr. Ernst: I believe that it's a way to reduce the oversight of the industry. Environment Canada had a well-equipped, highly motivated and experienced enforcement staff that had a very close surveillance of that industry. They were the ones that basically uncovered illegal activities, and I don't think that was very palatable to the industry. I think it's a simple attempt to remove that oversight so it doesn't happen in the future.

Mr. van den Heuvel: It's documented too in terms of P.E.I., where there was never a prosecution for a fish kill until about 2002, which is around the time Environment Canada took over enforcement. When Environment Canada took over enforcement, they started to enforce. The act wasn't actually used in P.E.I. before that at all.

Mr. Johnson: We can't say why you would move them out, except as a response to industry lobbying. In consultations which we would be part of, we can't see any other reason.

As well, the Cohen commission identified the DFO as having a conflicted mandate as both the promoter and regulator of the industry, and that its response should be to its constitutional mandate to protect wild fish and fish habitat. We can see good reason and support for that.

Senator McInnis: Many of the companies in the industry have veterinarians, either on staff or on hire. Do they have the environmental protection knowledge of putting drugs into the aquatic system? Is a veterinarian a veterinarian? Can they do it all? It seems to me that if you prescribe a drug, it's one thing to put it on land. What does it do when it's in the water? Are these people qualified?

Mr. Ernst: You have hit on a very good point that a lot of the drugs used in aquaculture are used off label; in other words, they were registered for another use. A veterinarian comes in and says, "You can use them for this purpose," and their original evaluation didn't even look at what would happen once you put them into the environment. So you're very correct. In my opinion, a veterinarian doesn't have the environmental knowledge to be able to determine whether it's safe to put that chemical in the environment.

Mr. van den Heuvel: They are trained as clinicians. Good clinicians don't necessarily make good environmental scientists; and vice versa, environmental scientists probably don't make very good clinicians. It's a different level of training entirely that is required.

Senator Raine: Dr. van den Heuvel, in your written note you say that the infectious salmon anemia virus has been detected in every province where marine pens exist and losses are starting to mount.

Mr. van den Heuvel: There's some controversy around that.

Senator Raine: In your comment, you said specifically in a number of provinces. I'm from British Columbia, and the information we're getting is that it has not been found in British Columbia.

Mr. van den Heuvel: The lab at UPEI actually did detect it, so there is a huge amount of controversy there.

Senator Raine: They have done a lot of testing.

Mr. van den Heuvel: They say it was there.

It's not a hard thing to do. I could do it in my own lab.

Senator Raine: Are you saying there is infectious anemia in British Columbia?

Mr. van den Heuvel: I find it unbelievable that it's not there somewhere. Again, there are a number of strains, and some of them are more virulent than other strains, but it's probably there somewhere.

Senator Raine: Even though the vast numbers of fish that have been tested have come up negative?

Mr. van den Heuvel: There have been fish tested positive too. Without my going through the lab and verifying those results myself, I can't give you my opinion on that. There is obviously a lot of political will to say that it's not here yet, and there's a lot of dispute on this issue, so I don't think I'm qualified to wade into who's right. Some say it's still there and swear by it, and some say it's not.

Mr. Johnson: It's certainly heavily prevalent on the Atlantic Coast.

Mr. van den Heuvel: If it's not there, it will be.

The Chair: Thank you very much for your time here this evening.

I will ask our next panellists and to introduce themselves, and then I understand there are some opening remarks to be made.

Michael Alexander, Acting Assistant Deputy Minister, Ecosystems and Fisheries Management, Fisheries and Oceans Canada: Good evening, senators. I am Michael Alexander. I am the Acting Assistant Deputy Minister of Ecosystems and Fisheries Management, Operations, at the Department of Fisheries and Oceans. I'm pleased to be here to provide additional context on the proposed aquaculture activities regulations and to update you on progress that has been made in advancing the regulatory package since Canada Gazette, Part I.

[Translation]

Joining me this evening are, on my right, Trevor Swerdfager, Assistant Deputy Minister, Ecosystems and Oceans Science, and Eric Gilbert, Director General, Aquaculture Management, Ecosystems and Fisheries Management. We are looking forward to today's discussion and would be pleased to answer any of your questions.

The increase in global demand for seafood is a golden opportunity for Canada, especially in rural, coastal and Aboriginal communities. Those communities are open to the significant and well-paid employment opportunities that aquaculture provides. Canada's great clean water resources, as well as our strict environmental and food safety regulations, provide a solid foundation for aquaculture development.

Canadian aquaculture products are world-renowned for their excellence, and that leads to strong demand for our products on a global scale.

[English]

As my colleague Kevin Stringer mentioned during his appearance in December, aquaculture is conducted in every province in Canada and in the Yukon Territory. Our country produces 45 different species of farmed fish and is one of the top producers of farmed salmon in the world.

In 2013 Canada generated over 172,000 tonnes of aquaculture product worth $962 million, driving more than $2 billion worth of total economic activity annually. The industry supports over 14,000 jobs, with a labour income of $600 million.

Budget 2013 announced $54 million over five years, from 2013 to 2018, to renew the department's Sustainable Aquaculture Program. One of the most significant initiatives under the renewed program includes an aquaculture regulatory reform agenda to ensure a robust and clear regulatory framework within which the industry can operate while protecting the marine environment. Regulatory reform activities are being carried out within the existing legislative framework under the Fisheries Act.

Further, the regulatory regime for aquaculture in Canada is, and will continue to be, founded in world-class science. Fisheries and Oceans Canada has been engaged for many years in diverse research projects aimed at ensuring that aquaculture develops in a sustainable manner.

Innovative research programs, including the Aquaculture Collaborative Research and Development Program, as well as the Program for Aquaculture Regulatory Research, provide critical insight to further improve the regulatory regime under which aquaculture Canada is managed. This includes targeted research projects that examine and assess interactions between cultured and wild fish populations; methodologies to minimize impacts from aquaculture activities on aquatic ecosystems; the management of fish pests and pathogens and their impacts on wild species; and potential effects of organic matter released from aquaculture operations on the aquatic environment.

The proposed aquaculture activities regulations are the centrepiece of the department's broader aquaculture regulatory reform agenda. The proposed regulations set out the conditions under which aquaculture operators may conduct activities to be compliant with sections 35 and 36 of the Fisheries Act. These conditions are meant to ensure that impacts from aquaculture activities on Canada's wild fisheries are kept to a minimum.

The aquaculture activities regulations are not a stand-alone piece. They are part of a regulatory regime that includes an aquaculture monitoring standard that is, by reference, part of the regulations; a guidance document for regulators and licence holders; and a mandatory annual reporting requirement for licence holders.

The proposed regulations are the first industry-specific regulations under section 35 of the Fisheries Act. Subsection 35(1), the prohibition against "serious harm to fish," applies to fish and fish habitat that are part of or support a commercial, recreational or Aboriginal fishery. Subsection 36(3) of the Fisheries Act prohibits the deposit of deleterious substances in waters frequented by fish, unless authorized by regulations.

I would like to correct a misconception that I have heard recently, namely, that the proposed regulations changed the role of the Minister of the Environment in regulating aquaculture. This is not true. The regulatory roles of the Minister of the Environment and the Minister of Fisheries and Oceans were clarified approximately a year ago by an order-in-council that was registered in Canada Gazette, Part II, on March 12, 2014. That order-in-council predates the draft aquaculture activities regulations. It specified that the Minister of the Environment is responsible for the administration of the pollution prevention provisions of the Fisheries Act, with the exception of aquaculture, aquatic invasive species and aquatic species that constitute a pest to fisheries.

Although DFO and Environment Canada may have separate mandates as they relate to pollution prevention provisions of the Fisheries Act, we will continue to work closely together and coordinate efforts where appropriate. DFO will enter into a memorandum of understanding with Environment Canada and Health Canada to better ensure coordination of enforcement and science support to environmental risk assessments for aquaculture pesticides and drugs.

Environment Canada remains the lead investigating department for deposits of deleterious substances that are not aquaculture related. During an agreed-upon transition period, Environment Canada will continue to support DFO in compliance and enforcement activities related to aquaculture.

The MOU will also stipulate that within the first three years, DFO, Environment Canada and Health Canada will undertake a science review on the monitoring methodologies for potential impacts from pesticide and drug deposits on non-target species. Should that review identify weaknesses that need to be addressed, the aquaculture activities regulations may be amended.

The proposed regulations do not represent a shift in policy in terms of what aquaculturists can put into the water. Aquaculturists will not be able to do things that they could not do previously. Rather, the proposed regulations clarify, codify and offer transparency to the rules governing how the industry operates, what they can use, and places a new reporting requirement on industry to increase public accountability and trust.

The proposed regulations will authorize the deposits of three classes of substances — drugs, pest control products and organic matter — subject to conditions that are outlined in the regulations. One, the regulations establish the conditions under which operators may use drugs or pesticides to treat their fish. Two, they put a legal onus on aquaculturists to minimize serious harm to commercial, recreational and Aboriginal fisheries and fish that support such fisheries. Three, they require aquaculture operators to consider alternatives prior to depositing a substance. Four, they require operators to notify the department and to take action in the event of a fish kill or increased morbidity. Five, they require monitoring of organic matter deposits to limit impacts to fish habitat and to define the actions required if imposed thresholds are exceeded. Finally, they require aquaculture operators to submit annual reports to the department.

As was mentioned in December by my colleague Kevin Stringer, the proposed aquaculture activities regulations have been in development for a long time, with strong provincial and territorial involvement through the Canadian Council of Fisheries and Aquaculture Ministers. We committed ourselves to maximum transparency in the development of these regulations. Following their publication in Canada Gazette, Part I, in August 2014, Fisheries and Oceans Canada hosted 49 technical sessions across the country to explain how the regulations would work, and to listen to the views and suggestions of interested parties about how we might tweak and improve the regulations prior to their finalization.

Over 400 invitations were sent out and hundreds of people attended. The discussions were well informed, and the department is now considering the stakeholder comments received, which represent approximately 1,500 letters, emails and faxes. These are being considered for potential amendments to the final regulations. As well, DFO is developing the tools and guidance that will inform and assist aquaculture operators, DFO staff and the provinces when the regulations come into effect.

To conclude, the proposed aquaculture activity regulations represent an important step forward. Implicitly, they do recognize for the first time in regulations the growing economic and strategic importance of aquaculture.

[Translation]

Likewise, the regulations do not represent a fundamental policy shift in order to exempt fish producers from environmental protection rules. The opposite is true. The proposed regulations will make it possible, for the first time, to codify and clarify how the rules apply to aquaculture. The rules will be made transparent, and aquaculture producers will be subject to new responsibilities and reporting requirements.

The regulatory regime will impose mitigation measures to minimize any potential negative effects on wild fish species and their habitat. Aquaculture operators will continue to use only the products that have been carefully assessed and authorized by Health Canada, and to report on their use.

[English]

Finally, the proposed aquaculture activity regulations will codify existing policies and practices in a transparent manner and do so for the benefit of the sector and for all Canadians in a comprehensive regulatory regime.

[Translation]

The department is looking forward to publishing the Aquaculture Activities Regulations in Part II of the Canada Gazette this spring.

And now, we look forward to answering any questions about the proposed regulations.

[English]

The Chair: Our first question goes to the Senator Hubley, deputy chair of the committee.

Senator Hubley: Thank you very much for being here this evening and for your presentation.

I believe you were here for the previous presenters. I'm wondering how you would respond to the issue of the proposed aquaculture regulations being a response to industry lobbying.

Mr. Alexander: I will let my colleagues speak as well.

In some respects they are a response to industry lobbying, to be sure. The industry has long had issues with the complex regulatory environment out there across many jurisdictions, including the federal government. They have long asked for the rules to be put in one place.

At the same time, it is clear that these proposed regulatory changes will put an increased onus on the industry to comply with the rules in a transparent way and to report on those activities on an annual basis and to report on things they had previously not reported on.

So, yes, in some sense it is due to lobbying, but the regulations do represent a balance: on the one hand, a desire to provide a clear regulatory framework for which industry can comply; and on the other hand, to protect the legitimate environmental interests of all Canadians.

Senator Hubley: If the proposed regulatory changes in some way will be detrimental to other parts of the fishery, i.e. the lobster and mussel industries, how will that be balanced when you've turned over much of the regulatory process to the industry?

Mr. Alexander: I would offer two comments on that before turning that over to my colleague, Mr. Gilbert.

The premise of your question is that the regulations will open up new opportunities to deposit more materials than were there before. That's simply not correct. It codifies in policy what they can already do. It's a different discussion all together whether it's appropriate to allow these substances, but there's no change in direction on that policy.

On the second part of your question, do you wish to respond, Eric?

Eric Gilbert, Director General, Aquaculture Management, Ecosystems and Fisheries Management, Fisheries and Oceans Canada: Yes, I can say a few words.

From the government perspective, I've been in the aquaculture business for 25 years. I can certainly testify tonight that I know the industry players pretty well. I know that social licence for them is one of the critical aspects that they have to tackle. They're conscious of the issue and want to be part of the solution.

The new regulations impose more conditions on the industry, and they know that. There will be a cost to them for that. If they know they face a transparent, coherent regulatory regime, then they will be able to say that every Canadian will have access to information that will demonstrate their actual environmental performance.

Reporting to Canadians is part of this initiative and the regulatory regime. All the information that we receive from the industry under the new regulations, which is not the case today, will be made available to all Canadians to show, first, how DFO is managing the sector, but first and foremost, the actual environmental performance of the sector.

To answer your question more directly, I don't think there's an issue right now with the lobster fishery regarding the impact of aquaculture. We have the data from Environmental Canada's monitoring system over the last few years. We know exactly what they've done and how many times they've been called by a third party, either a fisherman or a conservation organization that has witnessed any dead fish, to do an investigation. We're talking about two to four calls a year. The only case we faced that ended up in court over the last 10 years was referred to in Atlantic Canada by the previous witness. It was an obvious case of the use of an unauthorized illegal product. That's the only case over the last 10 years.

From my perspective, if you think about it, the fact that we were able to bring that to court and have a judgment on it allows me to believe that the system in place is actually pretty well built in order to deal with those kinds of exceptions that we might face in the future.

Now, in the past, DFO didn't have the tools in order to act in such a case. With the proposed regulations, we will have the tools. Section 9 of the proposed regulations contains all the provisions we will use to react to any illegal behaviour from any part of the industry. A fisheries officer will be able to be on site to start an investigation and do their job under the Fisheries Act, which is to protect the environment for the benefit of all Canadians.

Senator Wells: It was stated by our previous panel that in Justice Cohen's report there was an issue with DFO being a promoter and a regulator. I want to hear your response to that and give you a chance to explain if that is accurate and how you resolve that possible conflict.

Mr. Alexander: It's fair to say, senator, that many departments have dual roles and we have different parts of our organization to fulfill those different roles and mandates. It is the responsibility of ministers at the end of the day to balance and reconcile those different pieces. So, yes, to some extent it is an accurate comment to say that we have dual roles.

At the same time, it's also fair to say that we have been quite diligent in acting upon the Cohen recommendations and following up on many of the comments, in particular as they relate to aquaculture. You may be aware that Justice Cohen asked for a moratorium on the expansion of aquaculture sites for example in the Discovery Islands area. That has been adhered to and confirmed by the minister. As well, we have implemented our resumption plan that he requested and have been reviewing and advising on siting criteria for salmon farms. These are all consistent with the recommendations of Justice Cohen. So I think it's fair to say that we do take our dual responsibilities quite seriously.

Senator Wells: Thanks.

For the record, I wanted to say that I was with DFO during the period that the Cohen commission was being considered, and it was called as a result of disastrous returns on the Fraser River. A year after Justice Cohen delivered his report, there were record returns that had nothing to do with the publication of the report.

Senator Munson: Thank you very much, gentlemen. You were here when you heard the passionate position of Mr. Ernst who was with Environment Canada for 33 years. I believe you heard him say, "I believe that the primary intent of the proposed regulations is to remove the environmental oversight provided by section 36 of the Fisheries Act in controlling the actions . . ." and so on. He said that it ". . . was used to prosecute one of the largest growers in New Brunswick when they repeatedly used a powerful and illegal pesticide to kill sea lice. . . ." It was a successful prosecution.

Mr. Alexander, you talked about this transition period with DFO and the same Environment Canada where Mr. Ernst worked, and you said:

During an agreed-upon transition period, Environment Canada will continue to support DFO in compliance and enforcement activities related to aquaculture.

Are you able to have same prosecutorial powers that happened under Environment Canada and the same kind of oversight that he is talking about? Would you be able to take somebody to court and say, "Here's a $500,000 fine and we going to throw you in jail," under what you folks are proposing?

Mr. Alexander: Yes, it would be even clearer, I believe, because these regulations do not "exempt," as that was the term used, or do permit the deposition of an illegal substance. These are strictly only substances that are approved. Mr. Gilbert has more history on this background.

The very case you're citing would be clearly illegal under these regulations, just as they were then, just as they are now, and it would be much clearer. In fact, I would submit that the requirement to report on the deposition of an illegal substance would add a further offence if they were to deny having done that. Not only would they have deposited the deleterious substance, they would have to either admit it up front and report it publicly or they would have to misrepresent it, in which case it would be a further contravention of the law. So I would argue that the ability to enforce is as strong as it ever was.

Senator Munson: Do you have the manpower with Fisheries, without having Environment Canada there anymore, to be out there to look at all of these operators from coast to coast to coast?

Mr. Alexander: Yes.

Senator Munson: You do? Have you been affected by cutbacks or anything like that?

Mr. Alexander: Not on the conservation enforcement side. We have a fairly large enforcement contingent of fishery officers right across this country. As Mr. Gilbert was saying earlier, the number of reports we received before through Environment Canada is in the realm of two to four. Our people are out there quite regularly, as are our aquaculture officials who also play a role on the regulatory side. We actually have more face-to-face dealings with them, which I presume is one of the reasons that the government originally decided that DFO should be responsible for the regulation of the aquaculture industry.

Senator Meredith: Mr. Alexander, you mentioned the following in your presentation on page 9:

Although DFO and Environment Canada may have separate mandates as they relate to Pollution Provisions of the Fisheries Act, we will continue to work closely together and coordinate efforts where appropriate. DFO will enter into a Memorandum of Understanding with Environment Canada and Health Canada to better ensure coordination of enforcement and science support to environmental risk assessments for aquaculture, pesticides and drugs.

Can you enlighten this committee as to some of the points that would be entered into in this memorandum, seeing that you're both swimming together now, hopefully upstream?

Mr. Alexander: By all means, but I will defer to Mr. Gilbert on this one because he has been working most closely with the other departments in the negotiation of the MOU.

Mr. Gilbert: Since the beginning of the development of the aquaculture activity regulations regime, which has different pieces, the MOU was at the centre of discussion with our colleagues from Health Canada and Environment Canada. This MOU is to deal with the issue related to section 36, all of it, not only aquaculture. For instance, mining effluents are covered under the MOU and so on.

But there are two specific sections dealing with aquaculture. One is compliance and enforcement. That is the part of the MOU that set up the condition under which the three departments will cooperate in order to make sure that our regulations and their regulations are well applied in a coordinated manner.

We will have an implementation plan that delineates the roles and responsibilities of the three departments over the next three years.

The second relevant section to aquaculture deals with what we call a science review. To be honest, as experts within the three departments, we know that we don't know everything. We still have some very important questions that need answers. One is, for instance, in the past, Health Canada didn't impose in any way post-deposit monitoring of the pest control products used on the industry because they feel that the risk assessment is so robust and well done that there is no need to do that if the products are used according to the conditions that Health Canada imposed on the industry.

We, the three departments, decided that we need more work in order to make sure this was the case. Due diligence was mentioned before. It's a good example for us where we feel that there's a little bit more research and, certainly, an evaluation of what other countries are doing on that front to see if there is a need to impose post-deposit monitoring of the pest products used.

That being said, if we end up saying, "Yes, there is a need," the AAR will be amended accordingly. We're talking about a broad post-deposit monitoring system that will be imposed on the industry in all events, in all the time they treat their fish with drugs or pest control products. But over the last few years, Health Canada and in some cases the provinces have imposed very specific post-deposit monitoring actions on the industry in order to double-check the risk assessment.

The question is: To make sure that compliance is at the highest level possible, should we impose that post-deposit monitoring activity? We know that normally there should not be any problems.

We had one case, like I said, over the last 10 years. We may face others in the future, and that kind of post-deposit monitoring would help build the case if we have to charge or bring anybody in front of a judge.

Senator Meredith: Mr. Alexander, in your presentation you also said that this regulation codifies and clarifies the way the industry will operate. How does this empower the industry or does it now hamper them, seeing that they have more responsibility in terms of self-regulating? Can you elaborate on that?

Mr. Alexander: There are a couple of parts to your question, and I want to make sure I respond to the different parts.

First, how does this clarify the rules? Putting them in one place clarifies a lot of the rules for industry and specifies what they can do, making it above board and public what is and is not authorized for them to use. Right now, while these products are used by the industry, it is not at all clear to many people that they are authorized to use them; hence, much of the public debate around them.

As for empowering the industry, I appreciate the way the regulations that were drafted in Canada Gazette Part I talk about their ability to self-report. Many of the comments that were received through the consultation period focused on that very point, and that is one of the items we are looking at. Some have identified the weakness in that section of the legislation, saying they have to observe it and self-report it. We have been looking at alternatives. Maybe just any mortality of fish that is in the area must be reported, whether it's significant or — I forget the term.

Mr. Gilbert: Unusual.

Mr. Alexander: Unusual mortality or morbidity, not leave it up to them to decide. These are the sorts of changes that we are currently examining internally and will be brought to the minister for consideration.

That seems to be the section that people are focusing on when it comes to self-regulation, and that is one we are looking closely at ourselves to determine whether it should be recrafted so there is less discretion for the industry in it.

Senator Meredith: Are you saying there are still some weaknesses in it, or there's room for improvement based on the feedback you've received from industry?

Mr. Alexander: The whole purpose of the consultations was to hear the comments of the various groups out there, including industry and environmental groups. That was one in particular that was noted by a large number of people and one that we're paying close attention to.

Obviously we don't have the Canada Gazette version that is not yet ready for publication. It still requires some internal decision making, but I can tell you that is one we've received a lot of comments on and that we're paying very close attention to.

Senator Meredith: So the next version will be an empowered version, then?

Mr. Alexander: I would take it the other way if we deal with it, yes.

Senator Poirier: I just have one small question. The answer could be small, too, I guess. Compared to other countries like Sweden and Norway, how do our regulations compare?

Mr. Alexander: Oh, gosh. I've only done a cursory review of the regulations in other countries. They tend to emphasize environmental protection, as these do, and certain limits on what aquaculturists can do, but I would be way beyond my confidence to give you a detailed, country-by-country analysis of what they do and how they do it.

Eric, you've been in this business a lot longer than I have.

Mr. Gilbert: Yes, and it's not an easy answer, but I will tell you two things.

First, five years ago we established a committee of government representatives at my level from the four major salmon-producing countries: Norway, Chile, Scotland — the U.K. — and ourselves, Canada. We meet on a regular basis and exchange on all those issues. We present to each other any new regulation we're planning to do, and this is all about comparing notes and making sure that we avoid multinational — playing one country against another. We're creating a level playing field and raising the bar for environmental protection and overall regulatory management of the sector.

Through those meetings and the communication lines that have been established on a regular basis over the last five years, I can tell you that Canada compares very well to anybody, including Norway. This is based on our knowledge of their management regime.

I should add that in some cases we are dealing with multinationals. Some of them are owned by Norwegian interests, and they're operating on the west coast, not on the east coast. We have a few of them operating in Canada, as they do in Norway, Scotland and Chile.

One of the industry's roles is to lobby government for change all the time, and that's not specific to aquaculture but to all sectors. When they talk to us about any changes they want to see in Canada, they always say that we have the highest bar or level of regulatory regime or oversight compared to the other three countries. I'm just reporting their take on it here.

After exchanging a lot of information within the group, I'm starting to believe that they're right. We have the most severe and the toughest regulatory regime compared to other salmon-producing countries.

Senator McInnis: Thank you very much, gentlemen, for being here again. We're getting to know you quite well. We've been at this now for quite some time, just about over a year, and we've done a lot of research and investigation into aquaculture. I think it had to be done.

I didn't have access to the Nova Scotia report when you gentlemen were here before, and perhaps I didn't take the time to get into what these changes will do. But as I read them, it's difficult for me to believe that you haven't turned this almost entirely over to the industry. They lobbied effectively. That sounds like a grandiose statement, but it appears to me to be true because when I'm trying to understand even the annual report, something could occur in April and you wouldn't have a report, as I understand it, until almost two years later because they have one year after the year to make the report. I don't think I'm reading that incorrectly.

Mr. Alexander: A few months.

Senator McInnis: Well, it's not a few months, as I see it. You'll clarify that for me. That's what I see.

Also, when we talk about balance, I don't see that balance. There is a tremendous public outcry of concern and uncertainty with respect to aquaculture, and I don't see you having a hands-on approach. The Department of Fisheries and Oceans is a major department, and what I see is that you're turning it over.

Here in these regulations, we talked earlier — you heard it, as you were in the audience — about veterinarians. Are they qualified to do this? We hear they're not. So when we write a report, we want to try to get the essence of at least what we hope to be the truth and, actually, something that will be worthwhile.

We're not a department; you don't have to wait for us. We're a committee of the Senate, but here you are putting regulations into the Canada Gazette and reaching a terminal point in doing this.

When I read what Mr. Stringer — I hope I'm not taking this out of context, but he says, "There is a suite of regulations. There's the Pulp and Paper Effluent Regulations, the Metal Mining Effluent Regulations and a number of other regulations as well," and now aquaculture will fall under this. It's a terrible analogy, and I hope that's not what we're doing here. Do you follow me? That's a quote.

So I have concerns, as we get into the eighth or ninth inning of this study, that we're not working against one another. When I hear those that spoke eloquently in Nova Scotia about this in the report — have you read that report?

Mr. Gilbert: Yes.

Senator McInnis: Did Nova Scotia sign on to this?

Mr. Gilbert: Yes.

Senator McInnis: They signed on to this?

Mr. Gilbert: Yes.

Senator McInnis: They did? That's interesting. The minister says they haven't approved what Nova Scotia did, but they said he's quite delighted with it. That's amazing. That would go counter to what you're doing.

Mr. Gilbert: I can appreciate you have that view based on some witnesses you've heard from, and some good points have been raised before you. But the fact of the matter is that we're not touching section 36 of the Fisheries Act at all. We're not talking about legislative amendments here. We're talking about a new regulation wherein the legal authority will come from sections 35 and 36.

Section 36 is saying that nobody is authorized to deposit any deleterious substance unless authorized by regulation. So over the last few decades in Canada, we and Environment Canada have developed a few regulations — I think there are 12 in total — to authorize the deposit of deleterious substances under strict monitoring and reporting conditions in order to make sure that the risk is low and manageable. Pulp and paper is one and waste water treatment plants of municipalities are another. The last one was just approved three years ago. There is one for the chemical industry. There is one for each of the major sectors.

It is not because aquaculture regulation is developed under the same regulations that we're talking about, the same risk and the same potential impact on the environment that those big sectors have. It's partially because of a lack of clarity for the industry, but we want to tackle social licence too. We want to get the tools we need in order to assure Canadians that we're doing a good job. So there are new conditions that we're imposing through that regulation, which the industry doesn't have to face right now, like consideration of alternatives and strong mitigation measures in place in order to minimize serious harm to fisheries and fish that support those fisheries. We will know exactly what is used and we will be able to cross-reference our data with Health Canada and the provinces, because they're part of the team that authorizes the use of those products too. We will have all the tools to make sure that the information provided to us makes sense, and we'll be able to report to Canadians and, as I said, tell the story about the environmental performance of the sector, based on factual information and not rumour or worries.

I would like to say one more thing to make sure we all understand what we're talking about. In the aquaculture world, there are only two drugs that we're concerned about that are authorized right now, and only two pest control products. The two in-feed drugs are SLICE and Calicide, and those are used to treat sea lice. We all — Environment Canada, Health Canada and ourselves — consider that the risk we are facing in the use of those drugs is very low and that we have the tools we need in order to manage.

On the pest control product side, we only have two authorized. One is hydrogen peroxide, which just went through the full registration process of Health Canada. It has been officially fully registered for two or three weeks now. Here we're talking about the same product we use to clean up our kitchen counters. This is a product deemed by Health Canada to have a very low impact on the environment. It's H2O2. When you put it in water, this degrades in one molecule of water and one atom of oxygen, which are good things. Water and oxygen are good. We're not talking about dioxide here.

The second one is Salmosan. Everybody agrees that the risk is higher, but we feel the rules that are in place now ensure that it's used properly.

In terms of volume, what are we talking about here? We're talking about 99 per cent hydrogen peroxide that is used in this country. One per cent is Salmosan. That's it. We're not talking about anything else.

In terms of the group of new pest control products, which Mr. Ernst mentioned to you just before we appeared before you, none have been approved by Health Canada at this moment. There was one in the past, AlphaMax, which was approved for a few years. Through the monitoring, through the surveillance system we put in place, we discovered that the impacts were higher than we expected, and therefore the product was not reauthorized — finished, over. AlphaMax has not been authorized in Canada for three years now, if I recall well, and never will be, I'm presuming.

If any new product would be requested by the industry, they will have to go through that risk assessment again through Health Canada and show, through tons of studies that have been done here in Canada or in the U.S. or anywhere else where we feel that the regulatory system in place is at least equivalent to ours, that the impacts of this product are known, measurable and we can manage it, i.e., we can be sure that they are at a level that is as low as we deem it necessary to be comfortable with the use of that product.

When I heard witnesses saying that we're exempting the aquaculture industry out of the Fisheries Act, I cannot take that as a fact. It's the opposite. Those products can be managed. The use of those products can be managed in the right way. But again, I said that I know we don't know everything. Our colleagues from Science will help us in terms of getting those grey areas a little more clear. One is whether we should impose deposit monitoring, and maybe we will.

Senator McInnis: But what I see is an absentee landlord when I read this, and I'm worried about the quantum. Something killed the lobsters in New Brunswick. That's the difficulty I have. When I look at what I'm seeing that's going to take place in Nova Scotia, where we have access by aerial surveillance to vessels, and more inspectors, that's what's important for transparency. When you talk about building a social licence, that's how you build it. This is not going to build it. It is not a fair balance. I knew that it came from the industry, and that's fair. They have a right to lobby. But this is not quite as clean-cut as you make it, and that's the problem. I used the word "trust" earlier, and not lightly. It hasn't been built yet.

Thank you.

Senator Raine: I have a small question for clarification. There is a little discrepancy in terms of the number of employees in aquaculture. Is it 3,000-some-odd or is it 14,000? Could you explain? We've heard two numbers tonight. I think that it's important to know the economic value of aquaculture.

The other question I have for you is to explain a little bit about the subsidization of aquaculture. One of our witnesses said that if you lose a fish, you get $30 — hundreds of millions in subsidies.

If you could clarify those two points, I would appreciate it.

Mr. Gilbert: I think the discrepancy is coming from what we are talking about. The 3,200 jobs, I think that's older than 2012. We're talking here about direct jobs, full-time equivalent. In terms of people working on farms, it's more than that. As you know, for instance, on the shellfish farming side of things, they're not very active during winter. So it's a full-time equivalent, direct job on the farm. The last number we collected, with the help of Statistics Canada, I think it's higher than that. I think we're talking about 4,500 people.

Fourteen thousand are direct jobs. It's the usual economic way to present jobs created by a sector. You're talking about direct jobs, people actually working on site.

You're talking about indirect jobs, so all the jobs that are created in the service sector that provide upstream services like feed production and so on. I think it doesn't include what we call induced jobs, which are the number of jobs created in a corner store or anywhere else because of the economic activity generated by the sector.

Senator Raine: So the 14,000 jobs that are mentioned are the total number of direct and indirect jobs, not on a full-time basis?

Mr. Gilbert: Yes, full-time equivalent.

Senator Raine: I think I know the answer, but I would like clarification. Is this industry heavily subsidized?

Mr. Alexander: The subsidy that was referred to I believe is in reference to a Canadian Food Inspection Agency program available to aquaculturists and land-based farmers when they lose some of their stock. In cases of unusual mortality, they do receive a benefit from CFIA. But we're not really competent from DFO to comment on it. We have no role in the administration of that. But I do believe that's what this reference was to.

Senator Raine: So it's not really a subsidy.

Mr. Alexander: It's an insurance program, as I understand it. But I couldn't explain it competently to you, so it really is another department entirely.

Mr. Gilbert: I know for a fact that we're not talking about hundreds of millions of dollars. It's less than that.

Senator Raine: Thank you.

The Chair: Thank you very much to our panellists. Certainly you have given us a wealth of information this evening for us to ponder over the next few weeks. On both sides, it has been a very worthwhile experience. I want to thank our former panellists and the panellists we have here now, and I certainly want to thank our senators for their great questions. We're going to call it a day.

(The committee adjourned.)