Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 4 - Evidence, April 1, 2003
OTTAWA, Tuesday, April 1, 2003
The Standing Senate Committee on Fisheries and Oceans met this day at 7:03
p.m. to examine and report from time to time upon the matters relating to
straddling stocks and to fish habitat.
Senator Gerald J. Comeau (Chairman) in the Chair.
The Chairman: Good evening, and welcome. Tonight, we will be
concentrating more on straddling stocks, but please, gentlemen, do not let that
limit what you might want to say to us. I am sure you will want to stray into
other areas, and I will not be the one to stop you.
Our panel tonight consists of Mr. Siegel, who is no stranger to this
committee, Mr. McLellan and Mr. Broderick.
Please proceed, Mr. Siegel.
Mr. Sandy Siegel, Executive Secretary, Maritime Fishermen's Union: Tonight,
we wish to focus on a key element within the Atlantic fisheries policy review,
AFPR, that is ongoing at the Department of Fisheries and Oceans. The element we
wish to focus on is the separation of fleet and owner-operator policies that
have been in place since the mid- 1970s in the Atlantic fishery. It actually
became an Atlantic policy in 1989. Before that, there were regional policies in
Owner-operator and fleet separation policies are crucial to the future of our
fishermen, our organizations and, we believe, the future of coastal fishing
communities in Atlantic Canada. We were here to discuss this issue several years
ago. The Atlantic fisheries policy review has been ongoing for a number of
years. We presented to you previously. We have attended various external
advisory board meetings of this policy review. You have received documents from
us on this.
In the time we have to present, I should like to present the policy itself,
including its background, its definition and some of the problems that have
arisen from the mid- to late 1970s until now with its implementation.
Mr. McLellan will deal with the specific policy review process — where it
started and where it sits currently. Our understanding is that the department
has sent the policy to the minister and that we are looking at possible
implementation in fairly short order.
Following that, Mr. Broderick will discuss the implications of the
owner-operator and fleet separation policies being eroded or undermined as a
result of the implementation of a new Atlantic fisheries policy. There will be
serious consequences for our fishermen and our communities in coastal Atlantic
Canada if these twin policies are not maintained and strengthened.
Senator Cochrane: Are you dealing with the inshore people?
Mr. Siegel: The fleet separation and owner-operator policies apply to
vessels under 65 feet.
In terms of giving you a background definition and defining the problems we
are facing, I will refer to a well-written and concise document from the
Canadian Council of Professional Fish Harvesters. All our organizations belong
to the council, and on May 31 they presented an analysis on their
recommendations concerning the Atlantic fisheries policy review.
This document maintains that the issue of owner-operator and fleet separation
is a central policy issue in the future of the Atlantic fishery. It is not
How does one construct an economically, ecologically and socially sustainable
fishery? The Canadian Council of Professional Fish Harvesters believes that the
best way of ensuring a sustainable fishery is by building access rights around
owner-operator fleets. There is a very sound policy foundation for the
owner-operator approach in our current policy and the erosion of this foundation
is, in the council's opinion, the key public policy issue facing the Atlantic
The owner-operator and fleet separation policies are the two main pillars of
our existing Atlantic fisheries policy. They were established by policy-makers
to ensure the sustainable use of fisheries resources before sustainability
became part of the management vocabulary.
Under the fleet separation policy, the first aspect is that the government
guaranteed that, in fisheries restricted to boats less than 65 feet, the fishing
fleet would be kept separate from fish processing operations. In other words,
fish processors would not be allowed to own fishing licences or establish
vertically integrated operations by acquiring vessels and licences in these
These policies came in over 25 years ago. However, we will give a little bit
of flavour of the history. In the late 1970s, policies and policy changes were
often announced by press release. We have here a press release from February 10,
1978, for immediate release.
Would-be purchasers of fishing vessels given warning
Ottawa — Fisheries Minister Roméo LeBlanc today warned prospective
buyers of fishing vessels to check first with his Department as to whether or
not a licence would be issued for any vessel they propose to purchase,
irrespective of whether it is presently licensed to another owner.
``I have made it clear in recent statements that the policy of my
Department is to encourage the ownership of fishing boats by individuals or
fishing enterprises rather than by processing companies'' Mr. LeBlanc added.
``In view of this, any attempt by a company to increase the size of its
existing fleet would certainly be resisted.''
The news releases continues:
In a speech at Yarmouth, N.S. recently, Mr. LeBlanc proposed that in
future, efforts should be made to separate the fishing fleet from the
processing companies in Atlantic Canada. He added that there was clear
evidence, from Canadian experience and elsewhere, that creating a truly
independent fleet should improve the efficiency of vessel operations, make it
easier to match overall catching and processing capacity, raise fish prices
and fishermen's incomes, increase the fishermen's bargaining power, create a
healthier balance of forces in the industry and invigorate fleet development
by the fishermen.
The movement of vessels from fishermen ownership to company ownership would
not be in keeping with these objectives of an independently owned fleet.
That news release was dated February 10, 1978.
The fleet separation policy was intended to keep traditional inshore and
midshore fleets firmly in the hands of independent owner-operators and ensure
that the benefits of their fisheries, lobster, crab, scallops, groundfish,
herring, et cetera, would be shared broadly up and down the coast.
Over the years, harvester organizations in Atlantic Canada also lobbied
successfully for additional protection for independent fish harvesters by having
``owner-operator'' clauses added to licensing policy — that is, that fishing
licences could only be owned by individuals who owned and operated fishing
vessels for their livelihood. In other words, the Atlantic fisheries policy for
the under-65-foot fleet sectors determined that fishing licences would only be
issued to fishermen.
With these two policy instruments, policy-makers put clear limits on the
movement of corporate capital into traditional inshore and midshore fisheries.
They did this so that the fishing industry would contribute optimally to the
regional economy and to the economic viability and self-reliance of fishery
The framers of our existing policy were both wise and prescient.
Through the fleet separation policy, they guaranteed that the economic and
social benefits of the fishery would be as widely distributed as possible in
fishing communities all along the coast. By giving priority access to
owner-operators, policy-makers also made, as we will argue below, a strong
commitment to conservation. The most obvious benefit of the owner-operator
approach is its efficiency in distributing the economic benefits of the fishery
amongst participants and across the Atlantic region.
Chart 1 in my presentation material shows how the fleet separation policy has
led to a roughly 75/25 split of the landed value between the owner-operator
fleets under 65 feet and the licences held by corporations, over 65 feet. The
fleet separation policy was meant to ensure that the more than $900 million, as
of 1998 I believe, in landed value harvested by the under-65-foot fleet is kept
in the hands of owner-operators and the coastal communities where they live and
maintain their fishing enterprises.
The fleet separation and owner-operator policies are first and foremost
allocation policies to ensure the distribution of fisheries wealth and to avoid
corporate and geographic concentration. By allocating resource access to
thousands of individually owned and operated fishing enterprises, the policies
generate a multiplier effect in job creation and localized investment that would
be the envy of any regional economic development planner.
The next point in the presentation is the erosion of the Atlantic
owner-operator and fleet separation policies through legal loopholes. This is
where the problem begins to be identified.
However, all is not well with the fleet separation and owner-operator
policies. It is common knowledge in fishing communities throughout Atlantic
Canada that fish processors and other investors are brazenly circumventing the
fleet separation and owner-operator policies through legal loopholes in the
These legal loopholes allow speculators, including companies and
non-harvesters, to buy up licences and quotas through legal arrangements that
circumvent the owner-operator policy. Through a series of decisions, these
arrangements have been upheld by the courts, opening the door to these
speculators gaining effective control over owner-operator licences. The legal
aspects of licence transfer are quite complex.
Section 16 of the general regulations explicitly states that fishing
licences, referred to as documents, are non- transferable, and that licence
renewal is not guaranteed:
16.(1) A document is the property of the Crown and is not transferable.
(2) The issuance of a document of any type to any person does not imply or
confer any future right or privilege for that person to be issued a document
of the same type or any other type.
Although the general regulations are explicit that fishing licences are not
transferable, the Commercial Fisheries Licensing Policy for Eastern Canada,
1996, allows for transfers to occur for ``replacement licences,'' as spelled out
in the following excerpt from the policy:
16. Change of Licence Holder.
(1) Current legislation provides that licences are not transferable.
However, the Minister in ``his absolute discretion'' may for administrative
efficiency prescribe in policy those conditions or requirements under which
he will issue a licence to a new licence holder as a ``replacement'' for an
existing licence being relinquished. These prescribed conditions or
requirements are specified in this document.
(2) Subject to subsection (5), a replacement licence may be issued upon
request by the current licence holder to an eligible fisher recommended by
the current licence holder.
Although transferring a fishing licence is illegal according to the
legislation, it happens all the time through the ``replacement licence''
provisions of the licensing policy. This has been a common practice within the
industry and is accepted as a given by the DFO and fish harvesters. Over the
years, the courts have validated these transfers for replacement licences by
interpreting them as replacements, in line with fisheries policy.
Normally, this would not be a problem because the policy states that the
replacement licence can only be issued to an ``eligible fisher.'' However, the
courts have gone a step further and upheld the legality of contracts between
fish harvesters and corporations that give the corporation control over the
licences. This is done by contracts that separate the ``legal title'' from what
is known as the ``beneficial use of a licence.''
A typical transfer transaction occurs as follows. An eligible fish harvester
wishes to acquire a licence and approaches a fish processor for the financing.
The processor agrees to finance the purchase on the condition that a trust
agreement is drawn up between the two parties whereby they agree that the fish
harvester will legally transfer to the processor the ``beneficial interest'' in
the fishing licence.
What is this ``beneficial interest''?
The person in whose name the licence is issued has legal title to the
privilege of holding the licence, even though the person does not own it. That
person also has the right to use the licence. The ``beneficial interest'' is
essentially this right to use the licence — that is, to fish under it.
Ownership of the licence lies with the federal Crown at all times. These trust
agreements are essentially contracts that allow the use and the title of the
licence to be separated. The beneficial interest transfers to the processor, or
any other investor, but legal title remains with the fish harvester. In this
way, the trust agreement transaction is not illegal, in strict legal terms,
because the legal title has not been transferred, only the use. However, in
reality, the use is everything. Whoever controls the use of the licence controls
the money that can be made from the licence through fishing.
Under such trust agreements — that is, that legal title in the licence
remains with the fish harvester — the fish harvester can be legally bound, at
the request of the processor, to ask DFO to issue a replacement licence to an
eligible person designated by the processor.
With the trust agreements validated by the courts in a long line of case law
— and we have a separate document that outlines that — transferring the
beneficial interest of a licence has become a very simple procedure. The ease
with which such transfers occur between and among individuals and corporations
without any restrictions effectively undermines the intent of the owner-operator
and fleet separation policies, because de facto control over fishing licences
can end up under the legal control of vertically integrated corporate interests.
According to a legal opinion received by the council, this loophole could be
eliminated quite easily by including in the general regulations of the Fisheries
Act provisions specifically stating that the legal interest of the holder of a
fishing licence and the related beneficial interest of the fishing licence are
inseparable. The legal loophole would be eliminated if these provisions stated
explicitly that when licence financing transactions occur between fish
harvesters and corporations, control over the beneficial interest remains with
the licence holder.
The council's concerns about the erosion of the owner-operator and fleet
separation policies should not be a surprise to the Department of Fisheries.
Since its founding, the council has called on the federal government to firmly
establish owner-operator and fleet separation policies on both coasts as the
cornerstone for the long-term social and economic development of Canadian
Again, we refer to our 1996 policy document, ``Creating New Wealth from the
Sea.'' The second principle stated:
The fishing must be left to independent professional fish harvesters.
Ownership of fishing licences and vessels must be kept separate from
ownership of processing plants to ensure that wealth from the sea is shared
as broadly as possible. Access to licenses, quotas and fisheries support
programs must be reserved for independent owner-operators who meet
professional standards developed and agreed upon by fellow fish harvesters.
The current loopholes which encourage companies to buy up licences through
under-the-table deals and the policies which allow fishing licences to be
owned and traded by non-fishers must be eliminated.
The council is deeply disturbed that there is no mention of either the fleet
separation or owner-operator policies in the department's discussion document,
in the Atlantic fisheries policy review, despite the fact that the department
has been aware of our concerns for several years. Indeed, when we talk about the
finished draft that we saw in November, the same was the case. No mention of
fleet separation was in the document.
The council's concerns about the erosion of the owner-operator and fleet
separation policies were explicitly raised with the AFPR by the president of the
council at the external advisory board meeting in June 2000 and again in
November 2002. Moreover, these issues were the main subjects of discussion at
the council's February 2000 general assembly, which was attended by senior DFO
officials responsible for the Atlantic fisheries policy review. The council's
concerns were also made known in a written brief to the Standing Senate
Committee on Fisheries and Oceans on April 11, 2000. This cannot have gone
unnoticed by the Department of Fisheries.
The total absence of any reference to either the fleet separation or
owner-operator policies in the completed draft of the Atlantic fisheries policy
review is especially disturbing given the department's policy in the Pacific
fisheries, which has just completed a policy review. It is not clear how the
department intends to bring the two policy processes together as the basis for a
broad national fisheries management policy.
It is clear, however, that the Atlantic and Pacific fisheries have gone in
opposite directions when it comes to allowing corporate capital and,
particularly, processor capital to control fishing licences. Fishermen in
Atlantic Canada have seen what the department has allowed to happen to the
owner-operator fishery in B.C, and they do not like it.
Our message for the Atlantic fisheries policy review is clear and
categorical: The fleet separation and owner- operator policies are cornerstones
of Canadian public policy for the Atlantic fisheries and the key building blocks
for the economically diversified and socially sustainable future of our coastal
communities. The new Atlantic fisheries policy that emerges from the AFPR
process must be free of any ambiguity in this regard.
Mr. Rory McLellan, General Manager, P.E.I. Fishermen's Association:
Our organizations are all members of the external advisory board of the Atlantic
fisheries policy review. We represent the interests of fish-harvester controlled
fleets in both the inshore and midshore sectors in all five Atlantic provinces.
On November 27-28, 2002, the external advisory board met in Halifax. We were
presented with a draft of the new policy framework. This has profoundly shaken
our confidence in this process.
That is not to say that it is all bad. There is much in the AFPR document
that is innovative and challenging in terms of the industry assuming more
responsibility for fisheries management and decision making. This is the basis
of professionalization. It is the reason that we have all joined together in the
Canadian council to promote this novel idea.
For the most part, this general direction was clearly articulated in the
initial AFPR discussion document that framed the consultation process. There
were no surprises there. However, the treatment of the owner-operator and fleet
separation policies in the draft policy framework in large part contradicted the
dominant emphasis of industry input to the AFPR process.
I want to point out there were many organizations besides ours that were
members of this external advisory board. Even people who disagreed with us all
said that they wanted the fabric of Atlantic Canada in terms of fishermen owning
their boats to remain the same.
Despite the overwhelming weight of stakeholder concern about the erosion of
the fleet separation policy and a need to plug the legal loopholes that allow
the processors and other investors to circumvent the policy, the draft framework
document was completely silent on this question. Equally disturbing was the fact
that, under the guise of responding to legitimate owner-operator requests for
some flexibility in how the owner-operator policy is applied, the document
proposes only an opting-out mechanism that would allow for entire fleets to
remove themselves from the fleet separation policy. This is already happening in
the Gulf of the St. Lawrence, where the herring fleet and some crab fleets are
now changing hands through trust agreements under the table.
The mechanism put forward on page 25 shaping the owner-operator policy and
commercial fisheries, and that is available in the Atlantic fisheries policy
review document, which is available to you, is tailored to the needs of
processor interests who, over the years, have used legal loopholes to gain
control over the fishing licences in the fleets of less than 65 feet. This is
particularly so in Scotia Fundy where some key fleets in the 45-to-65 class are
now largely under processor control. The captains in these fleets are licence
holders in name only, as processors and other investors have used trust
agreements to gain legal control over their licences. The phenomenon is now
spreading rapidly throughout Atlantic Canada.
Instead of strengthening the owner-operator and fleet separation policies,
the text in the draft policy framework would seriously weaken it by providing a
quick-exit mechanism for those interests that have already been using loopholes
to undermine the policies. It would also open the door and encourage others to
follow the same process.
Processors and other investors would continue to build a parallel system of
licence ownership in a fleet or portion of a fleet once they have the majority
control. The nominal licence holders, now their de facto employees, could vote
to remove themselves from the policy.
It is not important, I might add, to control a particular fishery; it is not
necessary to own all of the licences. You only need to own a small portion of
them to have effective control over the fleet, control the price, conditions of
landing, and so on.
In the November draft policy framework, the failure to mention the fleet
separation policy at all and the particular wording of the owner-operator
provisions run directly counter to most stakeholder input in the public
consultation process. The great majority of industry participants from fleet
sectors in all regions and in all provinces call for the strengthening of
owner-operator and fleet separation policies. The counterarguments were from a
limited number of processor lobbies and some academics.
The other issues, besides fleet separation and the Atlantic fisheries policy
review's proposed policy framework, are the concerns of our organizations and
members. For example, under the new proposed policy framework, a multitude of
new resource users and interests are recognized and given a role in the policy
process. Nowhere in the document are commercial fisheries or commercial fish
harvesters recognized as having a priority claim to the fishery.
Moreover, the document introduces the principle of best use of resources to
guide the minister's discretion over allocation of quotas between sectors,
meaning recreational, commercial, and so on. We do not need to look far. If you
look at what used to be the Atlantic Canada commercial salmon fishery, there is
no commercial aspect to it whatsoever. The fishermen are kicked out.
The issues were clearly raised in the external advisory board meeting and we
expected the changes would be made in the next draft framework document. We
learned today there is no next draft framework. The policy is complete; the next
thing we will get is the policy announcement from the minister. This is serious
and it is supposed to happen before Easter, which is soon.
The fleet separation issue, however, is of immediate concern to our
organizations and to all independent fish harvesters. The November text of the
draft framework undermined a major element of public policy designed to keep the
fishery in Canadian hands and maintain an owner-operator controlled harvesting
sector, without the undue concentration of controls in the hands of corporations
and outside investors. If the minister follows this direction, he will be seen
by our organizations and the fish harvesters we represent as catering to a small
minority of investor interests in the fishery, who are going against the clearly
expressed will of the vast majority of fish harvesters of the Atlantic region
and across the country.
The minister would be acting against the public interest in having the
benefits of the fishery widely shared across communities and individuals
throughout the Atlantic region. By allowing fleets to opt out of the fleet
separation policy, the minister will surrender his responsibility for
allocations to the market. These consequences could be far- reaching. Under
current international trade agreements, the principle of national treatment for
foreign investors is well entrenched. Once the Government of Canada allows the
fishing licenses and the quotas to be owned and traded by Canadian corporations,
it must allow foreign corporations the same privilege. The recent American
position regarding the public auctioning of timber rights in the softwood lumber
dispute with Canada is an indication of where we could end up with the fishery
without solid policy instruments like the fleet separation policy.
What is at stake is different from the early days; it is now shellfish, which
are the most valuable resource in Atlantic Canada. Vessels under 65 feet, which
are subject to the fleet separation and owner-operator policy, currently harvest
the vast majority of shellfish. Given the trends in groundfish, it is no
surprise that processors and other investors would want to control these
shellfish licences and their quotas.
Mr. Bill Broderick, President, Inshore Council, Fish, Food and Allied
Workers Union/CAW (Newfoundland): Our union made a presentation to the
Atlantic Fisheries Policy Review. I will read a couple of paragraphs from that
before I go on.
On the issue of owner-operator fleet separation, we said at the time:
We believe the Canadian Council of Professional Fish Harvesters has rightly
put its finger on the owner/ operator issue and the related fleet separation
policy as being critical to the future of fisheries policy in Atlantic Canada.
We support the recommendations made in this regard by the Canadian Council and
lament the deterioration of the independent fish harvesting operation in
British Columbia where non-fishing investors lease licences and quotas to
working fishermen who have been marginalized by the lack of proper legislative
and regulatory protection for the individual fishing enterprise.
A fishing licence is a licence to fish and should not be handed out to
people who have no intention of fishing and no background in fishing.
Fish harvesters in Atlantic Canada are not prepared to sit back and see the
people who do the hard work on the fishing boats displaced and marginalized by
wheeler-dealers. Fishing rights are a heritage of coastal communities, not a
commodity to be peddled on Bay Street like Nortel shares.
The peddling of fishing quotas that is presently taking place in areas such
as 3Ps and 4RS3Pn makes a mockery of fisheries management. It is repugnant
that a brand new entrant to 4RS3Pn (the Northern Gulf of St. Lawrence) picked
up quotas totalling 700,000 pounds while traditional fixed gear licence
holders who have fished the area for a lifetime have to scrape by on a scant
fraction of this amount. As long as one new entrant gets as much fish as 100
long-established resident enterprises, fisheries management in this country
will be in disrepute.
I wanted to read that little section.
In Newfoundland, we probably escaped this scourge for longer than most. We
are farthest away and poorest off, we say. Since the groundfish moratorium in
1992, this issue of more and more company control of quotas and licenses has
been creeping up on us.
How that happened was simply the economics of the day. Our fisheries and
inshore boats under 65 feet were basically in groundfish prior to 1992. We had a
little bit of crab close to shore. Since 1992, we have expanded our area of
fishing and moved more and more vessels into crab and shrimp. Those are the main
ones today. Groundfish is still at very low levels.
With these new fisheries and the move further offshore came the need for
larger and more modern vessels. Where could the money come from to purchase
these vessels? There had been, prior to 1992, a fisheries loan board, which,
when the groundfish crashed in 1992, sent the provincial fisheries department
into a tailspin as a result of outstanding loans. Since that time, there has
been little money given out by the provincial department. There is some money
under the guaranteed loan program through the chartered banks; however, that has
not worked out well. It has been easier for fishermen to turn to fish companies
Some of the companies have not required people to sign trust agreements. They
have signed regular lending agreements. As well, if someone wanted to get out of
an agreement — if they could get financing from someone else — they could
easily get out of it. With some of the companies, people signed agreements not
realizing what they had signed: They had unknowingly agreed not to make a change
in who they would sell their crab or shrimp to the following year.
This has developed more and more. At first, it was just the purchase of
vessels. Now, as the age of our fishing population increases, people want to
retire from the industry and are selling their enterprises. Those are now being
purchased. Prior to 1992, licences had no value. You could pick up a groundfish
licence for $20 from the department, and that could get you some other species
licence. Now, licenses are being sold for hundreds of thousands of dollars.
The money to finance these is also coming from the companies, which creates
all kinds of problems in that it erodes the bargaining power of the fishermen.
If a number of the fishing population are tied to buyers, they have no ability
to negotiate. As a result, the price stays lower than it normally would, and the
money stays in the hands of the processors as opposed to the fishermen, crew
members and families in small communities. There is such a concentration of
ownership with some of the companies in Newfoundland, and this is now extending
throughout the Maritimes.
Mr. McLellan just talked about the possibility of the ownership of those
licences moving out of Canada. Two years ago, some of you may recall, there was
a major effort with Fishery Products International, a large publicly traded
company in Newfoundland, because of share restrictions. There is legislation in
place to prevent that from happening with FPI; however, with respect to any of
our other companies that could become publicly traded should they choose to,
many of our boat licenses could become controlled by outside interests very
There is a movement, so to speak, in Newfoundland away from the local
communities. There are groups of large vessels in certain communities. More and
more, licences that were held by fishers in outlying and coastal communities are
being bought up by large companies and moved to larger centres. Even though the
skipper on the boat may come from one of the smaller communities, the
crewmembers are drawn from the larger centres; they are not being selected from
the outlying areas, where they would have come from before. This adds further to
the erosion of those small communities. Much of that has happened during the
last number of years.
Senator Cook: My questions will be directed to Mr. Siegel. If I
understand you, correctly, you talked about a policy review that is underway and
said that the loopholes are under the regulations in section 15. Is that
correct? They are not in the act.
Mr. Siegel: The loopholes are in the policy, and I read the policy to
Senator Cook: The policy under review is silent on the things that you
addressed as loopholes. Is that correct? Are the loopholes still there?
Mr. Siegel: Yes, and not only are the loopholes still there and not
addressed in the policy, but also there are specific attempts to write in the
new policy areas of flexibility where fleets can actually opt right out of the
policy altogether. It is a building-block process. There are now specific
fleets, such the under-65-feet groundfish fleet in Southwest Nova Scotia, that
have been concentrated with the buying and selling of individual quota. About
350 licences entered that program in the late 1980s and now six people control
That fleet is part of the lobby group, which now has the licences, through
the loopholes, which would like to opt out entirely. They want the option to be
able to opt out entirely from the owner-operator policy. They could then be free
to own the licences outright. There is a loophole, and if the loophole is closed
there is something to lose. It is a legal loophole, not secure in legal
interpretation. The Atlantic fisheries policy is proposing that such fleets
could come before DFO and say that there are a majority of them in this fleet
who no longer want to be bound by owner-operator and fleet separation, that,
just like the processors, they want to own the licences outright, as companies.
Senator Cook: If I understand you correctly, what started out as a
legal loophole is now being given legitimacy with an opting-out clause under the
Mr. Siegel: Yes.
Senator Cook: What is the solution?
Mr. Siegel: We have been tackling this on different levels, and I can
mention some. We are pressuring very hard to change the regulations. We want
them to close the policy loophole in the regulation. In other words, an item in
policy that is allowing this separation in the courts over dividing the licence
between title and use should be closed. In regulation, it clearly states that
you cannot do that. Therefore, regulatory change would be required.
We have been asking DFO, as part of this Atlantic policy review, to enter
into a review process with us to figure out the best way to do that in
regulations. That is one option, and we call it ``strengthening the policy.'' We
do not want flexibility for people opting out, but we want to figure out how to
close the loophole legally in the regulations. That is our political direction
with the department.
Another option would include the courts. A number of court cases are
underway. As a result of transfers that were taking place, involving trust
agreements, the Province of New Brunswick urged DFO to get involved in the gulf.
The province asked DFO to enforce its fleet separation owner-operator policy.
These people should be on the boats; the trust agreements are getting around the
owner-operator. The gulf DFO actually enforced the policy, which caused a
problem in the trust agreement between the buyer and the seller. The seller
wanted to back out because DFO said that the seller had to be on the boat. The
buyer became upset with the seller because the seller would not sell. Into court
they went. Eventually it was settled.
My point is that there is one case in court currently. We have decided, as a
fishing organization, to ask for standing with the court in this case. We have
applied for legal counsel on this. We are not interested in who wins or loses,
in this particular case, because we do not care. However, we are interested in
going before the court to argue, on behalf of fishing communities, why these two
policies are so important to the future of thousands of people.
The court can basically see the importance of the policy and on that basis
have it on the court record as part of the proceedings. Hopefully, that will be
important for the case. More generally, it will be important for the legal
process that is happening around these trust agreements.
There is a legal option that we are taking as well as the political one to
pressure the department, to strengthen the policy, not make it more flexible.
Mr. McLellan: This is a recent phenomenon, one that has taken place
over the past 10 years or so, but it has become more pronounced in the last five
years. We did not see this in 1978 or through the 1980s because the then
Minister of Fisheries, Roméo LeBlanc said, ``It is policy to support Atlantic
Canada. It is my policy to promote the owner- operator policy. It is my policy
to keep these communities going. This is my vision, and my officials will stop
you.'' If a minister were to say that now, you might see this thing slow down or
stop as quickly as it started.
Senator Cook: One way or another, we will make sure that every last
fisherman disappears. That is what I am hearing.
Suppose that I am an owner-operator and fish harvester, and I have saved
enough money to buy a plant. Can I buy a plant?
Mr. McLellan: The argument is always made that fishermen should catch
fish and plants should process fish; in other words, plants should not fish and
fishermen should not process. Those who believe this with argue it with fervour
and conviction. They are to be admired, I suppose.
It would come down to the beneficial use of both. On Prince Edward Island, as
Senator Hubley will know, about half of the fish sold are sold to co-ops that
exist for the benefit of the community. That could be interpreted as fishermen
processors. They are processors, because no one could go to those communities.
They used to be poor without a place to sell the fish. It became part of the
culture to own a co-op.
There is a difference between something that is done for community benefit
and an individual who would control licences for a multinational corporation or
a foreign investor. There is at least an ethical, if not a legal, difference
between the two.
The distinction becomes vague in many cases, particularly in Southwest Nova
where there are family operations. Whether there is mutual benefit is not always
clear. It is tough to determine, at times.
Senator Cook: It depends on circumstance. I am from a Newfoundland
outport, so I know about fishing and about the life of a fisherman.
How do you see this committee helping you with this, given that it is a
time-sensitive issues? I believe you said April, and our report is scheduled for
June. How do you see us helping you with this particular problem?
Mr. Siegel: In a sense, I could ask you that. You know better the
powers and prerogatives of this committee. We put our case in front of you. We
certainly need some kind of support.
Do you have the power to call the department before you on this? Do you have
the power to call the minister before you on this? We are not sure.
It is not Easter yet. There has not been an adequate public review of this
policy, outside of the department. The process for that has not existed. We went
before House committee on fisheries. We slipped in regarding other issues. We
were there before Christmas. That was the only time, I believe, that this issue
was raised. We are waiting to return. The policy may be in place before we get
If you can apply pressure, even in terms of public discussion, opening up for
discussion the issues we are putting before you in any further way, we would
welcome it. That is why we are here.
Senator Cochrane: I want to follow up on what you said Mr. Siegel. How
involved are your members in the management process?
Mr. Siegel: In what sense do you mean?
Senator Cochrane: DFO is doing everything. It seems, from what I
understand, that you have very little involvement in any decision making as to
what might come out of all this.
Mr. Siegel: In terms of the policy review, I have to agree with you.
We have not controlled it. We have not been involved in it any more than we are
telling you. However, we are very much involved in other areas of the fishery.
There was broad consultation with inshore fishermen and their organizations
across Atlantic Canada. They just did not pay attention to what we said. They
consulted us, but ignored us.
In terms of this policy, you are right. We cannot seem to get their attention
in terms of the importance of these issues.
Regarding the management of the fishery, which the policy actually requires,
we find that our organizations are more and more involved in taking this kind of
role, whether it is in developing new species of scallops or dealing with the
problems in lobster habitat. We are involved in the future of the fishery with
our fishermen, including the decline of lobster resources and using crab quotas
to build funds to be able to buy licenses so we can have a decent living for the
fishermen that are left.
Our organizations are more drawn in to having a role in the future of our
fishermen, as the department would like. At the same time, they are undermining
the policies that allow for the continuing existence of our fishing communities
and our fishermen. It does not make sense. There are contradictions in the
Senator Cochrane: How many fishermen are on these 65-footers?
Mr. Siegel: In Atlantic Canada, there is something like 8,000
individual fishing enterprises of boats under 65 feet..
Mr. Broderick: In Newfoundland, we have 4,000. Overall, it is 8,000.
Mr. Siegel: In the maritime provinces, there are only a few hundred
family farms left. That is where to talk about primary production and the
increase in corporate concentration. In Atlantic Canada and in the Maritimes,
the independent fishing family enterprise is the backbone of hundreds of
communities. It is real.
Independent fishers can be wiped out. If you look to the Pacific coast, it
can be wiped out. We are not talking in the abstract. Pay attention to what
happened in Pacific Canada, because it did not have fleet separation. Their
fishery is for the most part corporate controlled today with the lease system in
operation there. Anyone can invest in fishing leases.
You ask what the fishermen will do if this happens? They will work for
companies. They will still be around. They may not be in those hundreds of
communities. They may be in 20 of them.
When we were speaking with Senator Comeau before Christmas, we mentioned that
this concentration means that companies hire people and put the boats where it
makes sense from a company perspective. If you are too far away, too bloody bad.
When I worked with the MFU in southwest Nova Scotia, there was a thriving
groundfish, under 45-, under 65-foot fleet, in Clare and Digby. With the
concentration that has taken place in the last 10 years, as Senator Comeau has
said, no groundfish fleet exists in Clare today. It is concentrated down in
Pubnico or it is up in the Digby Neck, because that is where the people who own
the quota and have the licences want it. It is extremely dangerous what is going
on, and it is going on at a level that most people are missing. We are not
Senator Cochrane: One would think that DFO and the people who are
making all these decisions would look at the Pacific coast and learn from what
has gone wrong. You learn from experiences. You learn from doing the wrong
Mr. Siegel: You would think so. They seem to be having some urge to
recreate it. It is frustrating.
The Chairman: I might suggest you start reading the writings of Leslie
Burke, to see where we are all going.
Senator Hubley: It is great to have an islander onboard tonight. It
does not happen very often. It gets lonely up here sometimes. It is nice to see
you all, but a special welcome to Rory McLellan.
We are talking about 8,000 fishermen. What percentage of those already have
been affected by the loophole that we were discussing this evening, in your
Mr. McLellan: Most trust agreements are secretive by their nature. I
am told there is a harbour on Prince Edward Island that has 40 vessels and five
owners. I will not identify it now because it will go in Hansard, but I will
identify it to you later. I would say the virus is alive and well and is
spreading. No one could answer the question because nobody knows who is holding
trust agreements. By their nature, they are quiet.
Senator Hubley: Is there is a breakdown in communication between the
fishermen and your organization, or do the fishermen want to be independent?
Mr. Siegel: That is a good question, and you are right. There are two
social forces — or probably more — operating that drive this process. With
the fishermen, one of them is that the cost of fishing assets is increasing
The second thing is that fishermen are getting older. In the Maritimes, more
than half of them are older than 45. In 1987-88, there were more under 24 than
there were over 45. In 2000, there were three times more over 45 than under 24.
The baby boomers are getting older, and it is costing more and more to get in.
Those kinds of forces drive a need for money. The processors are more than
willing, because they need access to the resource. In particular, they need
access to the shellfish resource because that is what is making the money, not
It is a meeting of interests that are not helping our communities because we
are not, as yet, responding. As organizations, we need to find ways that young
people can get into the fishery without having to go to the processor. We need
to find ways to help the fishermen who are retiring to get out with retirement
funds. We need to facilitate the renewal of our communities. If not, we will not
renew them; they will be bought out by other interests.
Government is not helping us here. By opening these loopholes, it is opening
the door to undermining whatever continuity we need that keeps the control
within the communities over the next generation. That is a whole other issue.
Senator Hubley: When you are talking about 40 vessels, it is the
beneficial interest in the licence. The fishermen still owns it but the company
has acquired the beneficial interest in that licence. What happens to the
fisherman if he wants to pass on his licence or sell it?
Mr. McLellan: The saddest thing of all — and I have seen it in my
own community — is that we are cutting out a generation of young people who
might have, in another age, aspired to become fishermen. There is no place for
them when the price of licences gets high. When very rich people, through their
access to crab or access to money, can come into the small communities and
compete against an older fisherman's son — the older fisherman wants to retire
and he is faced with selling his licence to his son for $25,000 or $30,000 or to
a corporation or rich person for $250,000 — it becomes a real problem.
One of the things we did not mention tonight is that we are — the three of
us, and our colleagues across the country — involved in a professionalization
and certification program. Through that program, we are promoting the fishing
industry as a profession, promoting it as a career young people would aspire to
and one that offers a good income. Fishing is the basis of Atlantic Canada.
There is a future in fishing, and it can go ahead. With your help, if we can
solve this owner-operator thing, we can have a great future. We are all
confident that it is not over yet.
Senator Hubley: I have a more specific question about the mussel
industry in Prince Edward Island. Just to backtrack for a minute, did you do a
commercial where a young man talked about being a professional, not necessarily
Mr. McLellan: Now we know one person who saw it. Yes, we did. We ran
them during the Stanley Cup playoffs, and thank you for mentioning that. It is
something that we all believe in very strongly. The fishing industry has
contributed to this country since the time of Jacques Cartier. We cannot forget
that. We have to help it through the rough spots and make it a place for our
young people into 2050.
Senator Hubley: Going back to the mussel industry, it seemed to me
there was an opportunity, and it appeared to attract a lot of new young
fishermen. I do not know if that is right or wrong, but is the same situation
applying there? It looks as if we have young men involved in fishing, but they
may not have total control of the benefits of their licence.
Mr. McLellan: The mussel industry is about 50/50. On Prince Edward
Island, about 50 per cent of the people who harvest mussels are entrepreneurs,
owner-operators, if you will, and about 50 per cent are companies established
for that purpose. It has always been that way. We do not see a big shift there.
We do not see a problem there because it was created that way and has been
maintained that way, so it is different from the traditional fishery.
Mr. Siegel: In terms of what happens to the person holding the title,
the fisherman that is holding title, he is bought, basically. It is like Esau
and the mess of pottage. Once he has sold it, he is finished. The fisherman has
only a titular role. The company does not even have to use that person on the
boat. Through the contract, the company can force the titular head to go to DFO
and have someone else named that the company wants to run the boat. Basically,
for money, they are eliminated from real involvement.
In Atlantic Canada, there are approximately 35,000 fishermen. Over 95 per
cent of those fishermen are in vessels under 65 feet.
Senator Adams: We have a new Nunavut government, since the land claim
in Nunavut Territory. I am trying to help set up some of the future for turbot
fishing in the Arctic. How would you create it?
We want to coordinate with an organization. Since beginning land claims,
people have organizations set up in the community. To me, instead of
organizations, a person who gets into the business of fishing can have more
control. Some of the organizations are funded by CCRA, for example. Some people
now want to get into some kind of commercial fishing organization. My answer to
that is, ``Not you guys; it should be people from the community.'' If you are
with an organization, at least you have a salary coming in 12 months a year, but
you do not care if you catch a fish or not. If you are the owner of a 65-footer,
at least you have to pay your loan and catch your fish. That is how it is with
the people around the Baffin area, between the turbot and the shrimp fishing.
I should like to know a little more background as to which way is the best.
DFO said over 8,000 metric tons are caught up there for every year in Baffin
Strait and the surrounding area. They call it OA and OB, that area up in the
Arctic. Maybe my question might be kind of wrong related to what you guys are
doing. Right now, we have a new MLA, but he does not have much background. He
has only been in for five years. Politics makes him work for the people's
There are 30,000 fishermen. Every community has a little bit of benefit, just
like you guys are saying. I call it a coalition that is set up now, with an
organization collecting royalties from the government. They gave out quotas in
the community. The community had a little bit of money from the corporation to
cover those quotas.
What I am looking now are those 8,000 metric tons. Maybe someone owns
60-footers or 45-footers and, from there, they can use it to set up the
In the beginning, how did you set up your organizations?
Mr. Siegel: The organization I belong to, the MFU, started 26 years
ago. It took about three years to set up and it was set up around specific
problems that were occurring in the fishery. We work in New Brunswick now with
First Nations people who are coming into the fishery under Marshall,
including Big Cove, which is the second-biggest First Nation in Atlantic Canada,
and Burnt Church, which is also quite large.\
When you were speaking, there was something that struck me about the snow
crab fishery in Big Cove. They have over 50 lobster inshore licences so far
through Marshall, which is a fairly big fleet. They are fishing out of
Richibucto, New Brunswick. Up until then, they had a larger midshore boat and
they were fishing their snow crab quota, which is like the fisheries are you
talking about. The community would put people on the boat and the revenue would
come back to the community, so that it would be spread around. The chief and
council would do what they needed to do with it, which is a good thing.
However, the 40 boats of inshore fishermen in the band that were fishing
lobster came to the chief and council and said, ``We want to be able to have a
fishery that will sustain us and our families all year, so we need you to give
some of the snow crab to each of us, so we can go out and fish it to add to our
yearly income as commercial fishermen''. What the Big Cove chief and council did
was keep some for the community boat, so that they would have the revenue. They
then divided it up, giving five tons each to the small boats. We put mentors
from our organizations on the back of their boats, to help them learn to fish
snow crab. They went out last year and they fished their snow crab. They had
their five tons and that helped them earn enough income to get them through the
That was an example, where Big Cove chief and council had to deal with the
community interest in the fish and the fishermen's new interest. There are all
these fishermen saying, ``I can go out and make a living, so I want it.'' The
chief and council are trying to balance the community and the new fishing
sector. They needed help. They got it from our organization and, in the end, it
Today, they are back negotiating with government for more snow crab for this
year. There are ways in your communities and traditions and history in ours that
we can share and there is a way to sort those problems out in a positive way.
Mr. Broderick: Similarly, in Newfoundland, our organization has been
around 32 years or something like that. It was started on the west coast, over
in Senator Cochrane's neck of the woods. Again, it was started over specific
issues in the fishery there. It evolved over time. Ninety-five per cent of the
people we represent are fishermen and plant workers; however, the fishermen are
supposedly independent harvesters. Forget the discussion we are having about the
owner-operator for the moment.
To get back to your question, the area where there is involvement similar to
yours is in Labrador. Around the same time that our union was formed, we had the
first moratorium, although it was not called that, in Labrador. Traditionally,
all the northeast coast of Newfoundland fished the coast of Labrador for cod. In
the late 1960s and early 1970s, that pretty much disappeared from that area. The
people there were having a real struggle.
It was probably 1978 when the first shrimp were given out to the offshore
companies. I am not sure of your area, but I know there was some given to some
in the North. However, I know that on the south coast of Labrador, two of those
shrimp licences were given to what is called the Labrador Fishermen's Union
Shrimp Company and one or one-and-a- half to another group up in northern
Labrador, the Torngat Co-op. Those licences allow fishing by offshore boats that
are manned by people from that region. That way, they have local fishermen on
the boats. The shrimp is not landed and processed, because it is industrial
shrimp, I guess we call it. It allowed the Labrador Fishermen's Union Shrimp
Company to use the royalties from that to build an infrastructure on the coast.
They have, I think, three or maybe four plants in the south that are processing
snow crab and other species.
There is the problem we talked about earlier with the licences that would not
be happening in that area. Most of those fishermen would be able to go to the
shrimp company because it is, basically, their own company. The fishermen are
the shareholders of the company. They may have been able to do good work on that
coast, but now I would suggest that it could be a ghost area if it were not for
the formation of that company. They have done everything there, including
setting up a bank. The Eagle River Credit Union is the only banking institution
up there. That was initiated by the Labrador Fishermen's Union Shrimp Company.
That has been a shining light in what would have been a difficult area to
It is a pity that we have not been able to do more of that. We see private
companies coming in that have no interest in the communities. Their interest is
in becoming millionaires off the resource that we have. There are so many areas
in the Northern Peninsula that are desperate.
Their efforts have set an example. They have been able to help people obtain
experimental licences and to even subsidize the prices when they are trying to
bring them into market. It has been helpful, and I suggest that some of that is
happening in your area, as well.
Senator Adams: They are only looking at the bottom line. The fishermen
cannot be the plant owner at the same time. They would prefer to go to sea and
catch the fish to sell to a plant owner. I am looking for that kind of
information. It has been more than 10 years of DFO issuing experimental licences
for Nunavut in the Arctic.
They are realizing that the fishing is better up there around Baffin Island
near the tip of the mouth, where we had about three or four communities. There
are people right along the coast and they have no boats. They could get into the
business if they had the equipment.
I talked to a large corporation down east. I have been telling the government
for the last five years in writing but I never received a response. The people
of Nunavut want a partnership — and the same for seal hunting. They are going
north to look for more seals.
The government wonders where the money will come from. Last year, I asked the
Minister of Fisheries when he came North whether DFO had any money to help the
people get equipment. I hope one day in the future it will be better for the
people up there. There are 13-and 14-year olds up there with families and no
income. Right now, we are losing between $15 million to $20 million per year for
the turbot because we do not have the equipment.
Thank you for your information. We have a little something in common right
now in that people buy the quotas and they are selling them to large
corporations. That is the only way to make money.
The Chairman: In the last comment of Senator Adams, there is the issue
of buying licences, let us say. You made a point, Mr. Broderick, that if we were
to keep this up, eventually the fishery would no longer be in Canadian hands. I
listened carefully to that comment.
Would it be possible, if enough licences were bought by companies, for them
to go on the stock exchange, as you suggested. Would it follow, then, that
foreigners could buy the majority of those stocks? In effect, under this
concentration of licences, foreigners could buy up our Canadian quotas. In other
words, the fishery would be in foreign hands. Is that possible?
Mr. Broderick: The case with Fishery Products International, FPI,
which has major quotas from the Government of Canada, mainly in the offshore, is
that an Icelandic company is now owner of 15 per cent of its shares. According
to the provincial legislation, the quotas cannot be transferred out but that is
because that company was set up under provincial legislation.
The Chairman: Let us take Clearwater, for example.
Mr. Broderick: If you look at all of the other companies in
Newfoundland today, you will see that FPI is not one of the major buyers of the
inshore quotas because they have been mainly into groundfish. They are more into
it now but some of the companies that focus on crab and shrimp have major
ownership. One of those could become publicly traded tomorrow, if they so
desired. Someone outside Canada could very well invest in them and, bingo, the
company would be gone.
The Chairman: Technically, that could be done. For example, Portugal
and Spain could get together, buy out a large number of Canadian companies, or
create some kind of a major company, meld the stocks, and we would have a double
whammy hitting us in the face. Could that conceivably happen?
Mr. Broderick: Once there is such a concentration of ownership,
anything is possible.
The Chairman: This committee has been on the record in the past in
respect of the issue of concentration. We have been forceful on the matter but
it is still there. I do not think we have ever had a proper response from the
department or from the minister on this. If I recall, we had wanted a public
discussion to be held prior to the de facto implementation of corporate
I was listening to some of the members' questions tonight and it reminded me
so much of recent criticisms of how the government has handled another
controversy — gun registration. Many were concerned not about the benefits of
what was being proposed under the gun registration but about the fact that
things have happened without parliamentarians knowing about them. In other
words, this was being done without parliamentarians being aware.
Concerning the matter of a fleet separation policy, parliamentarians were
told that it was on the books. As far as I know, we were told that it was on the
books as a policy. You are telling us that for quite some time now, there has
been no fleet separation policy because of a loophole that was allowed to be
established under the policy. Therefore, we are in the situation where
parliamentarians are again being kept in the dark. We are being told that what
is on the books is fine, but in practice it is irrelevant. In other words, fleet
separation is not there. Am I right?
Mr. Siegel: Yes.
Mr. McLellan: Yes.
The Chairman: Given that this is a policy, it can change at almost at
any moment, I assume. The minister could implement a change of this policy
tonight. Should there not be a regulation, or, even better, a law that says
there is separation of fleet?
Mr. McLellan: It is a great idea. What can we do to support this?
The Chairman: I am glad that I thought of it.
I heard you when you said that there must be flexibility in how it is
applied. However, to be consistent, if there is to be a fleet separation policy,
it has to work both ways.
I also heard what you said about cooperatives and so forth. However, if you
would deny processing plants from owning fishing licenses, and you would limit
processors from owning licenses, you must consider the other way around. You
would have to limit fishermen from owning or establishing processing plants. It
has to work both ways. That is important.
I have not heard this group venture too far on that subject, other than to
say that there must be flexibility.
Mr. McLellan: We all want the same thing. We all want the overall good
for Canadians. When we look at problems like this, we must look at an individual
case and say, ``What is the overall good of this community and of these
fishermen?'' Sometimes, it is collective action among a group of fishermen that
get together for the purposes of marketing their product, because there is no
alternative. Sometimes, it is an individual who became rich through the fishery
who buys out a plant and uses it to expand for his own good. It is not good for
If there had to be an absolute, and we had to pick one absolute, the absolute
that we would want to see is that fishermen would fish and processors would
process. There is a grey area on the processing side. It has become necessary
for fishermen to do that in some instances.
Mr. Siegel: As an inshore organization, I am not sure that the MFU
would have difficulty with what you are saying. When you get deeper into the
issue, it is not so simple. Some would say that there is a difference, over and
above this, if one cannot do it then the other can.
Co-ops exist for that reason. Certain community efforts are there for a
reason. They usually have to do with increasing a price, getting a market and
keeping control in the community, whereas corporations are interested in
depressing the price to get the product as cheaply as possible and taking
control out of the community.
You do not have a strong argument if it comes down to the importance of
owner-operator and separation of fleet over and against what you are asking. It
is not so simple an issue in terms of the history of the coastal communities.
The Chairman: I understand that there are ramifications. However, to
make things simple, it is hard to propose an argument whereby it would be fine
for a fisherman to establish a processing plant and buy licences. On the other
hand, it is not acceptable for a processor to start fishing vessels.
Mr. Siegel: I would agree with the way you have phrased it. In terms
of the history and realities of communities and what they are facing, under
certain conditions and in certain contexts for the communal good, banding
together to be able to sell a product becomes essential to the survival of the
community. The history of the co-op movement in the fishery is an example of
The Chairman: I have an Internet discussion paper in which there are
examples of possible rule changes regarding the size of vessels. Item 5 says the
government would propose the removal of any restrictions on vessel size in a
fleet provided that any new vessel is only used in IQ fisheries. Remember, the
department calls them IQ, rather than ITQ . It sounds better.
Beyond fleet separation, what is the position of your group on opening the
rules on size of vessels?
Mr. McLellan: I am not sure that we have a position as a group because
we have never really discussed it. Individually, we have all looked at the issue
of this restriction. We feel on Prince Edward Island that fishermen should be
free to 45 feet, given that some consideration is given to limit effort in other
We would not want to see a groundfishery opening, for example, and the
harvesting capability double. That would be irresponsible. There would have to
be other measures. However, we believe that there are a myriad of other measures
that could be taken to restrict vessel size. That could increase danger. People
are fishing far from shore. If they have to do it for some bonehead legal
requirement, it would put a 16-foot boat in a 60-foot sea. That is not a good
The Chairman: You are talking about those not in an ITQ fleet.
However, the government is proposing an ITQ fleet whereby you could keep buying
up the licences. The government is saying that as you amass the licences you
must get rid of the old vessels and buy a 125-foot vessel.
Mr. McLellan: Buy yourself an ITQ at the same time, which is a
Mr. Siegel: We would not agree with that. This vessel replacement
policy seems to be the complement document to the AFPR document, because they
coincide in terms of their intent. Make everything smaller by concentration and
then basically you can do what you want.
We are no more enamoured with that concept than we are with the Atlantic
fishery policy. That would be my organization's position because it is the same
old dog-and-pony show. It is dangerous.
Senator Cook: I have been preoccupied as with this all-party committee
that the Newfoundland legislature set up in December to look at the possible
closure of the cod stocks. I realize that I am talking about another issue that
is not your agenda for tonight; however, it is part and parcel of the bigger
When the groundfish and cod industries collapsed in the 1990s in
Newfoundland, our entire culture fell with it. Ten years later, we are faced
with the possible closure by the DFO within the next several weeks of the last
lot of groundfish.
I am looking here and I do not like what is coming together in my head.
Fishermen of 10 years ago who made a decent living on groundfish and cod needed
to turn to another species to make a living. They were not given an opportunity
before, say, a corporation came in and made a living instead of him. There is a
dollar to be made on lobster, shrimp, crab and other species, where we see a
complete collapse of cod. How do you react to that?
Maybe I am not making myself clear. Here is a fisherman who has fished cod
all his life. It collapses. In order to survive, he needs to change to other
species. It costs money. Someone sees an opportunity, a good chance to make good
on the back of that man before he can get going. That is the thing that bothers
With this all-party thing and our possible closure, what do you see as the
next step? Or am I out in left field?
Mr. Broderick: Just a quick point: Cod, for 500 years, was our
history. However, it was not lucrative. No one really wanted it; but crab and
shrimp — that is money, that is gold. Therefore, everyone wants in on the
Senator Cook: Before that, the professional fisherman could look to
see where he could make a decent living. Having fished traditionally for cod,
now he does not have an opportunity. That is what bothers me about the whole
thing. I understand that if there are no fish we cannot catch them. I am not
that foolish. However, it seems that the fisherman is being denied an
opportunity to turn to other species while we look at what is no more, and that
is the collapse of the cod fishery.
Mr. Siegel: I should like to respond to that. When I hear you
speaking, I think of intergenerational transfer. More and more, we are talking
about young people who cannot fish the cod, who need to fish something else, so
there are no more fishermen. It raises a couple of things. One is an alternative
to corporations, who are sitting there with the money ready to get control. We
need alternatives to ensure that fishing and fishing licenses stay in our
As organizations, we are beginning to turn in that direction. In other
countries, there are other options. There are loan boards that are able to lend
money for licenses. They cannot now in Canada — or they do not. There are
venture capital funds. There are licence banks. There are retirement funds for
fishermen. In the world, there are all kinds of different ways to provide
alternatives, rather than corporate investment, to be able to renew your
We are telling you that if we go with corporate investment, with the
loopholes in the policy, we are dead meat. It will be owned by people in Boston
eventually. Where are we? As organizations, as government, we need to generate
alternatives. We need to say, ``It is being done in Norway, France, Iceland and
the Shetland Islands, so where is Canada?'' Where is our government helping us
with the issue of intergenerational transfer, with the future of our fishery and
communities to build on Roméo LeBlanc?
We have respect for what he did. Rather than dismantling it, we need
alternatives. We are beginning to look for those. We are pushing DFO to set up
its own intergenerational transfer committee. We can see it coming. It is like a
train coming down the tunnel. Where are they?
These are the areas we all need to go in. We need to take hold of our future
and we need to recreate it. That is on our shoulders. We cannot just blame the
minister and the Department of Fisheries. We can blame them, but we will have to
move them and we intend to.
Senator Cook: Access to the resource and the ability to harvest the
resource — there is no infrastructure there from the fishermen's point of
view. It costs money to change and fish something else — change costs money. I
do not want to hold on to something like the cod fishery that has been there for
500 years. If it is gone, give it a decent burial. There must be something more
if we are going to maintain the dignity of the fisherman who wants nothing more
than to make a decent living for his family.
It seems to me that, before you can move to that point, there is someone, a
corporation with a pocket of money, ready to grab the next step — and that is
the opportunity for the fisherman to be flexible. That is my preoccupation here.
How do you get around it? I am grateful you said what you did about
Mr. Siegel: Special investigative committees are part of what I know
the Senate to be about since I have grown up in this country. Perhaps the
Fisheries Committee might be interested in a special committee or investigation
into this very issue, and into intergenerational transfer in the Atlantic
fishery. It is not a small issue.
Senator Cook: There were 19 recommendations in the all-party report.
One of them was the creation of a prime minister's task force to look at the
whole issue. Perhaps that mandate could be broadened to take in more than the
cod. How would you react to that?
Mr. Siegel: It is a great idea. Now it is crab and shrimp and lobster
that are there to replace the cod.
The Chairman: I will be making a speech tomorrow on the all-party
recommendations and I will raise this question of the intergenerational
transfer. I think it is an excellent point and I will do it.
Senator Cochrane: Should we go back to the fisher's loan board?
Mr. McLellan: The loan boards in each provincial jurisdiction were
different. I am not sure if the Newfoundland fishermen should go back to the
Newfoundland fishermen's loan board. I can tell you that on Prince Edward
Island, there is a provincial loan board that has been largely ineffective. It
will only loan in very exceptional circumstances.
That being said, there needs to be some institution, which fishermen can go
to and have faith in, that will invest in the enterprise of a young man —
without fear of having his licences and his income owned by somebody else —
giving him the freedom to conduct his affairs as he sees fit. Such an
institution needs to exist. It might be a provincial loan board, or a national
loan organization, or a fishermen-run loan organization generated through the
capital of resources that could be allocated to that fund. Mr. Siegel is looking
at a very dynamic system like that right now, which would allow for that. These
are exciting ideas.
Should we go back to the old way of doing things? I do not think the old way
served us that well. We should think of a new way.
Senator Cook: There should be a national infrastructure.
Mr. Broderick: With the provincial loan board, except for small loans,
the money was coming from the chartered banks. Prior to 1992, that was, again,
really small loans. Since 1992, however, there have been major loans. What is
happening here is that the corporations also controlled the banks.
I have to tell you a little story about a friend of mine who basically owed
some money to his company. He was doing fairly well and he decided to get the
money from the bank and pay it off.
My friend went to the bank he had been dealing with for 20 years. Six weeks
later, they told him that they would not give him the money. They decided that
he could not swing it. My friend thought that he could or he would not have
gone. He went across the street to the bank he had not been dealing with for 20
years. He got the money and he paid off his company. He did not get the money
from his bank because it was dealing with the company. That is why we he did not
get the money. That is why people now go to the provincial loans board. They
first go to the bank where they are asked if someone from the company will
co-sign. If the answer is, yes, then they will have the money. Basically, the
money is coming from the company. That is happening.
Senator Cochrane: My concern is about cod. We know that it was in
abundance years ago, so much so that the boats were coming in loaded with
codfish. I have been on the Northern Peninsula and I have seen the shrimp boats
coming in absolutely loaded with shrimp. Are we going to be hit down the road
with the same kind of situation that happened with our cod? I am worried about
the shrimp and crab resource. Could you respond to that?
Mr. Broderick: I do not know what will happen with the crab. All
stocks are different and they are managed differently. There is an argument
widely made that crab and shrimp are now thriving in our waters because cod are
not. The environmental conditions are such that they exist in large numbers.
Perhaps if the conditions were to revert, then they may not be there. I cannot
talk about the shrimp because I have not been in that fishery so I do not know.
The crab is there, and if you do not take it, it will die. If you manage it
properly then you will not destroy it — for example, if you do not take the
females. There are many things you do not in the crab fishery that you do with
the cod. Therefore, you do not have the chance to destroy it; but you can
overfish it. We manage it differently than other countries. Some countries pulse
fish. When it is there, they fish it and then they wait for it to come back and
fish it again. We do not do that. We manage it on a yearly basis.
Could we possibly foresee a time when the crab will be gone? I think we could
see that time. We have seen crab go down before when we did not have the same
amount of effort that we have today. We have expanded our area tremendously
since 1992. We are fishing five or six times the area for crab now than we were
back in the early 1990s. That is why we are fishing much more of it. The
potential exists, even if we never fished one pound of crab or shrimp, for it to
go down still, as was the case with cod. I am not suggesting that we did not
overfish cod because we did. However, it could happen with environmental changes
and with predators. We could find ourselves in difficulty.
The Chairman: Thank you, gentlemen, for your excellent presentations.
We have heard your message; it came across loud and clear. The owner-operator
is a common sense phrase that, when looked at closely, makes sense in our
Atlantic communities. It would have made sense to the West Coast communities and
inland waters, as well.
I know that you have made this request to us and to the House of Commons
before. After discussing this with my colleagues on the Steering Committee, we
may take a closer look at the issue. We share a great number of your concerns,
such as intergenerational transfers and corporate concentration. We want to help
you cope with the necessary changes for our coastal communities.
The committee adjourned.