Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 3 - Evidence, October 3, 2006

OTTAWA, Tuesday, October 3, 2006

The Standing Senate Committee on Fisheries and Oceans met this day at 7:05 p.m. to examine and report on issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans.

Senator Bill Rompkey (Chairman) in the chair.


The Chairman: I call the meeting to order. Welcome, honourable senators. Before we begin I would, on your behalf, welcome some students from the University of Ottawa, who are with us from the seminar on the Law of the Sea. I gather they have been with us before and we welcome them here again. I would also particularly extend our welcome to the minister once again.

Sir, you were with us when we dealt with the crab fishery, and tonight we will be talking about everything else.

We will hear the minister's opening statement and then we will take questions. Our topic is fisheries management outside the 200-mile limit. That is a good description of the issue that we want to get at tonight.

Minister, over to you.

Hon. Loyola Hearn, P.C., M.P., Minister of Fisheries and Oceans, Fisheries and Oceans Canada: Thank you, Mr. Chairman and senators. Let me also recognize the students. It is great to see young people show an interest in what we do. We often think few are interested, but when we see young people express an interest, it gladdens us because it is very important. One of these days we will be looking to them to fill our shoes. I am not sure if seeing us in action will encourage that or not; hopefully, it will.

I am pleased to join you again. With me this evening are my Deputy Minister, Mr. Larry Murray, Ms. Michaela Huard, the Assistant Deputy Minister for policy, and Mr. Paul Steele, the Director General of conservation and protection. Mr. Steele was present at the NAFO meetings. If we get into in-house technicalities as we go through the evening, he can certainly give us some first-hand observations.

Tonight's meeting and the current focus of the committee are timely. As you know, the Northwest Atlantic Fisheries Organization, or NAFO, recently held its first annual general meeting since I became minister. I am happy to report that Canada made real and unprecedented progress at that historic meeting.

We went to the NAFO meeting focussed on a number of important goals. We set the bar high going in and we went to work with the other NAFO parties on real reform. We were not prepared to accept anything less, and I am pleased to tell you that the other parties did not let us down.

Our immediate and overarching objective was, and is, to ensure that the conservation, management and enforcement measures outside Canada's 200-mile exclusive economic zone, or EEZ, are just as effective as those inside. We need to catch offenders and see that they are deterred from repeat offences. Canada sees this as critical in order to curb overfishing and to support the rebuilding of stocks under moratoria. We are finally leading the international community toward a consistent, high-seas fisheries regime.

Since I came to Ottawa six years ago, overfishing, as many of you know — and certainly the people here who were on the other side of the table for most of our meetings are well aware of this — overfishing on the Nose, Tail and Flemish Cap, or what we call the continental shelf outside the 200-mile limit, was an issue that we pressed for all the time we were here. The standing committee, of which I was a member then, did a couple of major reports on that issue. Here, around the table, you have also been very supportive and involved in that issue. I have spent a lot of time talking with many of you individually about that issue.

We had always said that things could be done, and other countries felt the same as we did, but someone had to try to focus attention on bringing them together. We have been doing that this past six months, spending a lot of time dealing with our international partners, basically laying out what we call the common-sense approach.

The world is changing. No longer will countries accept the blatant abuse of a resource or the destruction of habitat. Pressures are coming from all sides, right around the world. We had the choice, as NAFO partners, either to clean up our own act or to have someone force us to do so. It is a lot better when you take the lead and do it yourself.

That was the message we carried to the partners, particularly to the EU, on a couple of occasions where we had direct meetings with the commissioner. In last week's meetings at NAFO, our partners, and in particular the EU, did not let us down at all but came strongly onside in supporting us in what we wanted to do.

I can say with confidence that we have made progress. At the NAFO meeting, we succeeded in placing elements of the UN Fish Stocks Agreement, or UNFA, into both a new NAFO convention and the strengthened monitoring control and surveillance measures.

This, perhaps, is what has been lost in the media reports coming out of the NAFO meeting. Most reports concentrated on the two hot topics: The objection procedure and dealing with the foreign countries in relation to punishing the offenders.

What has been overlooked, but will come out, is the fact that NAFO has incorporated a tremendous number of the UNFA principles in terms of science in setting quotas, the ecosystem approach and precautionary measures in relation to fishing, et cetera. That, in the long term, will set us apart from a lot of other regional organizations around the world.

Decision making has been modernized. For example, if a member country now objects to the way NAFO has allocated the catch quota, they can no longer just ignore it, which they used to do before. Instead, they will have to prove their grievance to an independent panel. Without a legitimate grievance concerning their quota, it will remain the same.

Also, boat captains who misreport their catch will be ordered back to port for a full inspection immediately. That is a substantial disincentive to unscrupulous boat owners, because it hits them where it hurts — right in the pocket book. It is estimated that spending several days heading into port for inspection could cost anywhere between $60,000 and $210,000. Boat owners should think twice now before cooking their books.

NAFO members also agreed to guidelines for tougher sanctions against rule breakers, requiring flag states — including individual members of the EU — to fine or suspend the licenses of violators, or even to seize the illegal catch or equipment. No longer will there be a ``total ignorance'' of any offences. No more will there be a slap on the wrist. Once we put the legislative framework around the agreements there will be teeth in the sanctions and the sanctions will be commensurate with the crimes. That, for all of us, is extremely important.

Members also agreed to stricter bycatch rules and decision making based on science, ecosystem and precautionary considerations, as I mentioned. Fishing activity will be curtailed in four seamount areas in the NAFO regulatory area.

We are getting tremendous pressure from all around the world on such techniques as bottom trawling and the destruction of habitat by using different types of gear. We must be cognizant of that and we must start taking some leadership in dealing with it. Certainly the preservation of seamounts is a start, but we must improve on that.

Last, but not least, the new convention includes a review clause so we will not have to wait 30 years again to bring up the issues, if the need arises.

I think our progress was remarkable and the way forward looks much brighter than it did in the past. Canada is prepared to continue its work with the international community in improving NAFO. The majority of Canadians prefer to work in cooperation with the international community to stop overfishing, but only if they see it producing results.

Some of the ``teeth'' that were previously missing from NAFO appear to be growing in. The next step is to see how well they bite. These new measures mean nothing if nations are not willing to hold their fleets accountable for infractions. Time is very much of the essence, as far as Canada is concerned, and we will maintain our vigilance and Canadian presence on the water and at the table. We said we would do it. We did it; and we will follow it through.

We have already begun some work in holding high seas fleets accountable. Earlier this year, Canada and the EU began joint patrols of the NAFO regulatory area. That resulted in adding five new names to our list of vessels caught performing illegal, unregulated or unreported fishing activity. Being on this list means that NAFO members will refuse port access, refuelling and supplies to these ships, effectively slamming the door to them, except during emergencies.

Recently, there was a story in the press about a certain Portuguese pirate who bragged about being able to catch whatever he wanted whenever he wanted. Once he hits the black list he might be able to catch what he wants, but he will not be able to land it anywhere. This will put him, and people like him, in his place.

We are also pursuing deeper bilateral cooperation with EU members such as Spain and Portugal to make sure we have systematic follow-up on infractions that our patrols discover. If a renewed NAFO can keep moving ahead quickly on sustainable management of high seas fisheries and curbing overfishing, then we would be very pleased to continue working with it. We pledge to lead the charge for change.

As the minister responsible for all of Canada's fisheries and oceans, my responsibility extends not only to the Northwest Atlantic. My department has a responsibility to protect fish stocks on the North Pacific high seas too. In fact, a recent covert operation in the North Pacific, named Operation Driftnet, spotted 27 vessels rigged with illegal driftnets, 12 of which were actively fishing using this outlawed equipment. This was a joint effort by DFO, National Defence and the U.S. National Marine Fisheries Service.

Our recent success with NAFO and with the Operation Driftnet coalition are but two examples of the progress we are making to combat overfishing on the high seas and to better manage our fisheries and oceans. I am very much looking forward to building on those.

Thank you very much. We have already tabled a copy of the report so it will be available to you. We would be pleased to take your questions.

The Chairman: First, I should introduce the senators who are here: Senator Cowan from Nova Scotia; Senator Comeau, Deputy Leader of the Government in the Senate, also from Nova Scotia; Senator Adams from Nunavut, my northern neighbour; Senator Cochrane from Newfoundland, my southern neighbour; Senator Campbell from the West Coast of Canada, my extreme western neighbour; and Senator Hubley from Prince Edward Island. There are a lot of people from islands here tonight and a lot of people with knowledge of the sea.

Senator Comeau: In 2003, our committee recommended, at one point, that Canada should place a high priority on the study of oceanic ecosystems. You mentioned that as well during your presentation in reference to both Canada and the EU.

The EU recently, I have heard, has brought up the question of possibly causing problems for us in the sealing industry. One would think if the EU is looking at ecosystems, it would naturally want to look at the impact of seals on the environment as part of the ecosystem; if you have too many seals, and obviously we do not need to expand on that, it is a problem.

Are you aware that the EU is possibly voting to ask Canada not to control the seal population but to stop the harvest? It would impact very negatively on our fish stocks if they were to use that approach or if they tried to cause problems for the export of our sea products.

Mr. Hearn: Yes, I am very much aware of that. In fact, about a month ago I visited Brussels to meet with Commissioner Borg in preparation for the NAFO meetings. When I was there, I was asked by three different groups, or individuals of groups, to meet with them about the fishery in general, but mainly about the seal hunt. The first person I met in Belgium was a member of the Belgian Parliament. He was planning to introduce a resolution based on the banning of seal products into Europe from Canada and asked for the meeting because he felt a bit guilty about it. He had inherited the bill from another minister and was introducing it because he was expected to do so; but wanted to know more about the seal hunt. I asked him where he had received the information that he used in the bill. In reply he said that the only information they had was what they had obtained from the protest groups.

It was an interesting conversation, at the end of which he indicated that he would not be in any rush to push the bill through and suggested that we should have a greater discussion at the political level. Obviously it is good for us to have our bureaucrats around the world talking to European or American bureaucrats, but the people who vote on these things are the people you need to reach so that they understand why they are voting.

I know that some senators present today have been involved in this, in particular Senator Hubley. We have talked about it and she has taken it up on the international stage. At that conference in Belgium we told them that we would be willing to encourage our standing committees to go there. As well, we invited any politicians from other countries not only to come to Canada but also to come right to where the hunt is taking place. I am not necessarily talking about the Gulf, where the protesters take pictures of the bit of clubbing that is left in the seal hunt, but rather about coming out to the front and visiting the families who depend on the hunt for their livelihood.

Some people say that fishermen make only 5 per cent from the hunt and perhaps they should not bother. However, if you take a look at the figures for this year, and for many other years, you will see that it is much more than 5 per cent. The income from sealing allows a number of families to remain in their communities.

This year, the price of pelts was quite good because the market was excellent. The income to Newfoundland alone was over $13 million, which is a lot of money. In the future, it will mean a lot more for areas in the North, such as Senator Adams' region, given what has been happening there.

I met with two other groups, one of which was supportive of our work. A number of politicians in the last group, Scotland, Ireland and Spain, voiced their support. The representative from Spain said that the veterinarian society and others who have been involved independently are saying that this is a sustainable hunt.

Senator Comeau: It is an ecosystem issue. If we do not have the hunt, the seals continue to be a part of the overall problem.

Mr. Hearn: Yes.

Senator Comeau: Even EU Commissioner Borg should be interested in this as well, because it is not only for the economic benefit of Canada but is also for the benefit of the ecosystem.

Mr. Hearn: When I talked to that minister of the Belgium Parliament, what convinced him most was our discussion about Canada having the largest wild stock of northern cod in the world. Before that stock declined, when the cod was at its peak, we had about two million seals. We now have about 1 per cent of that cod stock left and the seal herd is at six, or more, million. The ecosystem is completely out of whack. Today, we are seeing seals go up river to hunt trout and salmon. Seals used to be found only at the mouths of rivers to hunt cod or herring. This is happening not only in Newfoundland, Prince Edward Island, Quebec or Nunavut, but also on the West Coast. Unless we develop a balance, we will have major problems with all our wild fish stocks.

Senator Comeau: On a slightly different topic, back in 2003 this committee suggested that, given that Canada is the major beneficiary of the fish stocks beyond our 200-mile limit and that we likely contribute the most to the management of the stocks, Canada should have more of a say that than just one vote amongst all the other countries. The committee suggested that Canada should have an enhanced role or responsibility in the management and administration of these stocks. Has this been discussed with your counterparts in Europe and other areas that fish these waters? Has any empathy been expressed to the idea of Canada having an enhanced role?

Mr. Hearn: We have not talked yet about Canada having a larger say[ we do have a large say now. Canada is well respected and most of what we want, we get. When I met with some people, including the premier of our province, before we went to NAFO and outlined what we were hoping to get, everyone said that this was great stuff, but they doubted that anyone would bet $1 that we could achieve half of what we set out to do. But we did it because of the high esteem in which Canada is held and the level of control we have over the fish stocks, and so on. We have done our job by taking the lead over the years to protect these stocks.

Whether Canada should be in control outside the 200-mile limit is a difficult question. We are trying to change NAFO to bring it to the point where it is managed outside as well or better than now inside the 200-mile limit. That was of prime importance, and to try to exert ourselves to have a greater say or more influence would, we felt, be met with negativity up front and would destroy what we were trying to do. We showed that we were doing it for everyone. Our message was that it was not only for Newfoundland or for Canada, but also for fishing generally and for the countries that depend on the industry, for NAFO, and for the leadership it will send to other parts of the world as we deal with people in the High Seas Task Force, for instance. If we set the example, then others will buy in. If we are seen to be doing it for our own benefit only, then we will not get the cooperation and nothing will get done.

We are on the right track and the signs internationally are positive. We will continue in this direction while ensuring that we look after ourselves.

Senator Comeau: Do I still have a couple of minutes?

The Chairman: Yes.

Senator Comeau: You mentioned in your presentation that you have been having bilateral discussions with Spain and Portugal. That surprised me, because the EU is the contact for Canada for the fishing industry in the EU. Are you still able, then, to subdivide the EU in order to have bilateral discussions?

Mr. Hearn: Yes. We are not doing it to get around the EU or to try to circumvent authority, however; in fact we are doing it with the encouragement of the EU. One of the challenges for the EU executive group, Commissioner Borg and his officials, is to keep the member states in order. Spain and Portugal — but Spain in particular — have huge fishing fleets all around the world. Some of the Spanish fleets operate in smaller fishing towns where the fishing company controls the community. We are seeing that more and more with today's fishing companies. They are more powerful than local governments. That is why we are getting this cavalier attitude from the representative from Portugal, such that he knows the rules and he knows how to break them; and he did that. These are the kinds of people that we need to bring under control; but the local governments could not do that. That is where the government of the respective member state, coupled with the authority of the EU, must step in. They could curb that kind of attitude.

We have built up a good relationship, in particular with Spain, which certainly has played the game in recent months. They have shown a lot of leadership. When we have boarded vessels and found infringements, Spain has recalled them and invited our people to go over to monitor the offloading. Any trouble we had was at the local level with the skippers, but certainly not with the government.

As I mentioned, one of the members on the fisheries committee from Spain went out of her way to be able to stay around and have a chat. A couple of days ago I had a meeting with our Ambassador to Spain, who speaks highly of how Spain looks upon the way Canada is moving toward handling the fish stocks. During the first week that I was the minister, the Department of External Affairs had a call from their counterparts in Spain, asking what this ``new guy'' was up to, because they had no idea what we were going to do when we talked about having more control over the fishery.

We are presently negotiating a cooperative agreement with Spain in relation to science. One thing we have talked about is the fact that there are 13 countries in NAFO and a lot of them are doing independent work in areas where we all benefit. Why waste money? We cannot afford it. We have almost a complete lack of science; we all know that; so we are trying to focus on what needs to be done and then do it as well as we can and work together where we can.

I am relatively pleased with how things are going.

Senator Cowan: Minister, we are pleased to have you back. We are encouraged by your enthusiasm as a result of the meeting in Halifax recently and hope that it is justified.

The panel that was appointed by your predecessor reported a year ago. It was very negative about NAFO and its ability to reform itself or be reformed, and recommended that it be replaced by another mechanism. When you came to see us in the spring, you were of a different view, as I recall, and felt that there was something worth working with there. Can you tell us why you continue to be encouraged by a reformed NAFO and feel that it is a better option than a replaced NAFO?

Mr. Hearn: Basically, I am a sucker for punishment, I guess. Over the years, we have made it clear that we had to clean up the overfishing and the misreporting and the abuse on our continental shelf, as we called it. Well, it is our continental shelf, even though it is in international waters. We made it clear to countries like Spain, Portugal, England and France that, although they had every right to fish there because they were there before we were a country, nevertheless, they had no right to overfish or destroy a resource that belongs to all of us.

From that premise, in our discussions when I was on the standing committee dealing with other countries — Norway stands out, and the EU to some degree, individual members showed concern because they were having in their own areas the same problems as we were having. If you talk with the people in Scotland, they will say, ``We had a great resource until the Spanish and Portuguese came.'' England will tell you the same thing. Norway and Iceland have had their own battles. In Iceland's case, they sent out gunboats to get people out of their waters.

I have always felt, and I have said this publicly many times, that we had support internationally to do the right thing, but it had to be focussed and somebody had to bring the countries together. That is what we set out to do. The other option was to get out of NAFO and go on our own, and we have been encouraged by a lot of people to do that. However, if you get out of NAFO, that means you are no longer a member of the agency that sets the quotas in international waters. We are the major beneficiary, and we certainly pay the major portion of the cost also; but in yellowtail, for instance, I believe it is 97 per cent of the yellowtail resource that Canada gets.

We have to work with others on these problems. If we are outside the 200-mile limit, what do we do? Do we go out there with gunboats? First of all, what gunboats? Secondly, if we did that, we would get international attention and I could go on television and look like a hero; but the courts would tell us that we did not have a leg to stand on and that we had to give back anything we had taken. It has happened before. That is not the way to do it.

The recommendations that were made by the other panel were probably made out of frustration. I have said, and I guess we all have, that NAFO was not doing the job, that it did not have the tools or the teeth to do the job, and that it was trying to appease everybody. That is what it ended up as, and to some degree still is, except that this year, we sent in a team that was well coached. We had been at it for a long time and we knew what we wanted. We were not thinking about just going there and fighting for fish.

Many countries come to NAFO to fight for fish: ``I want to get my share; what kind of a deal can we do so I can get more?'' We went there to get reform and we had built up a fair amount of support there. So NAFO today is very different from the way it was three weeks ago.

If we had not been able to do anything with NAFO, we might be here saying, ``The boys were right; this cannot work.'' However, having others tell you it cannot work is one thing, but proving to yourself that it can is another. We thought it could, and I think we have shown that it can. Therein lies the difference.

Perhaps, up until this last-ditch effort, a lot of people thought that it would not be possible to reform NAFO. As I say, a lot of other people were thinking what we were thinking, but nobody was starting to bring it all together. It was not just Canada. I am not saying we went in and did everything. A lot of things were happening internationally, and certainly within the NAFO areas themselves, that were tightening the screws on people to make sounder judgments and to use better science to do it right. You either do it right or, in this kind of world, you will be made to do it right, and that is not so appetizing.

Senator Cowan: Tell me about the new rules that have been brought in with respect to sanctions. All of us have heard stories about nations and companies thumbing their noses at NAFO and international pressure and getting away with it. Give us a flavour of what the new rules are and how we can have confidence that, when the rules are made, they will be enforced. How do you see that evolving?

Mr. Hearn: I will give you the gist of it and then somebody may want to jump in here and fill you in on the details.

As an example, we have three boats consistently on the Nose, Tail and Flemish cap. Two weeks ago, there were five boats present on the Nose and Tail of the Grand Banks. Two of them were ours; another one was the EU patrol boat; and only two were fishing trawlers.

The amount of boats out there at any one time varies from a low of two or three to a maximum, this year, of somewhere around 23 or 24. We may have hit 30 at one time; I am not sure; but generally speaking the average on any day is between 6 and 15.

How do we know that? One of the things we have done is that within all the NAFO boats that fish in this area now there are monitoring systems — sort of black boxes, as we call them locally. I can make one phone call now to our Coast Guard or to my own regional office and within five minutes I can tell you how many boats are on the Nose, Tail and Flemish cap, which country they are from, the name of the boat, what they are fishing, et cetera. We have that kind of monitoring down that fine.

We also have fairly regular overflights in case somebody decides to shut off the black box or whatever, which we can also pick up very quickly. We have three boats that are constantly monitoring that area. The EU also has one in the area.

Senator Cowan: Are these Coast Guard vessels?

Mr. Hearn: Yes, they are fishery patrol Coast Guard boats. I will give you one example. The last major infringement we had was back in March, just before Easter. On our monitor, we noticed a Spanish vessel moving into an area where there was American plaice, which is a species under moratorium. We intercepted, caught the vessel fishing illegally, and contacted Spain. Actually we contacted the EU vessel first and they came along and verified what we had done. When we contacted Spain, they recalled the boat, and also invited us to send our monitors with the boat to make sure nothing happened on the way.

When, with full cooperation, we went to Spain, the captain of the boat — and again it gets back to these little towns and the powerful companies — refused to offload. Our observer stayed there; they waited a week and they still would not offload. We waited. They said Easter was approaching and they did not want to offload during Easter, thinking we would go home. We waited. Into the third week they still would not offload, knowing that sooner or later our people would leave. They did; we brought them home, but not before we had replaced them and left the message that, ``Whether it is three weeks, three months or three years, we will be sitting on this wharf when you unload this boat.'' They unloaded the boat. They had illegal fish and Spain took action.

These kinds of things opened up the door; we showed we were serious. We have a pretty good handle on what is happening. Previously, we would issue a citation. A citation is like a warning ticket on the highway. If you are speeding to work every day and all the Mounties can give you is a warning ticket, you can speed all you like. Certain countries, like Spain, started to take some action, and some did not. We could not do a thing about it. The boat stayed there and fished, went home, offloaded and came back and fished again.

Now, the minute we find a boat misreporting, which includes a lot of these major infringements, the boat has to be immediately sent to port. Now it can be recalled home, and some people complain about that because it is still going back to its own port; but if you are out there with a boat half full and suddenly you are recalled home, that hits you in the pocket book, as you well know. With the cost of fuel, the price of fish, the competition and everything else these days, there is not a lot of money in the fishery and you cannot afford to be going home with half a load or less.

Not only is the boat recalled home, it can be sent to any NAFO port, or any port, actually.

Senator Cowan: At whose option, Minister?

Mr. Hearn: That is the option of the country involved. Really, if the boat has to go to port and if our people, whether it be us or the EU, whoever makes the, shall we say, arrest or boards the boat and finds discrepancies, we have the right to either stay on the boat and secure the evidence by putting seals on the holds, for example, or we have the option to be there to make sure the evidence is not tampered with.

Once the boat is brought to land, the fish has to be offloaded and checked. If it is found that a person has misreported, or that the species is under moratorium, which is misreporting, then the country involved has no option. They are obliged to take action. The action has to be commensurate, because they are not going to get away with taking action that is not commensurate. We had none of that before.

Senator Cowan: These are improvements to the sanctions that you speak about.

Mr. Hearn: Absolutely. I think the deputy might add a little more.

Larry Murray, Deputy Minister, Fisheries and Oceans Canada: I might add a little detail to make it clear that it is significant. The minister mentioned misreporting. There are two serious offences: Misreporting and targeting moratorium species. In the case of either of those two serious infractions, the vessel must be ordered to port. It might be more cost-effective to send it to St. Pierre, but it must go to port.

Another concern of ours is ``bad actors'' that we catch doing a bunch of bad things, although it might not be misreporting or targeting moratorium species.

A repeat offender is a third variety of serious offender that can be ordered to port. Just to give you a sense of the detail, a repeat offender is a vessel that has committed the same serious infringement more than once in a 100-day period or within a fishing trip. Other serious infringements, beyond the two that automatically take you to port, include: Fishing someone else's quota without notification; fishing in a closed area; fishing on a stock once a fishery has been closed; mesh size violations; fishing without authorization; interference with satellite monitoring systems; catch communications violations, or preventing inspectors or observers from carrying out their duties. If you do two of those in any 100-day trip, you must go to port and have the entire cargo inspected.

That part of the convention, as the minister mentioned, must have some changes. The new measures come into effect on January 1, and that is the way it is. It is significant, it is real, and it is a major step forward.

The minister mentioned observers and electronic reporting. You have to have 100 per cent observer coverage. If you want to have less, and most do because of the cost, then captains are going to have to make a daily report electronically on what their catch is. Our fishery officers love that, because it will be very difficult if they have to keep three sets of books while reporting the catch everyday and having to go with stowage plans and so on. So this is real stuff; it is significant and it is detailed.

Senator Cowan: May I ask one more question about the dispute resolution mechanisms that are in place? As I understand it, there will be a panel that will deal with disputes. How will we ensure it is an impartial panel? Who appoints the panel? How will the system work?

Mr. Hearn: I will leave that to the officials who are there, but let me tell you what it has been like up until now. Coming out of the NAFO meetings, where quotas are assigned, some countries are unhappy. The most recent case is the Faro Islands; a couple of years ago they were unhappy that they did not get anywhere near to what they thought they should get in relation to shrimp quota. They objected. All they had to do was object within 30 days and then they could fish more. In this case, the quota they set for themselves was 10 times what they had been given, and they actually fished about seven times the quota they had been given before pressure caused them to stop. Nothing could be done.

Now, if you object, you cannot object to yourself. You have to object to an independent panel that will make a ruling. You have to prove your case to them. If you do not agree with the panel decision, then your only other option is to go to court. It is not now a matter of somebody else taking you to court, which was the only way you could stop somebody in the past; you would have to take somebody else to court to try to prove they were doing something wrong. Now you have to take your own case to court and prove that you were ill done by.

Senator Cowan: I assume you cannot keep the appeals going and fish the quotas while you are appealing.

Mr. Hearn: There is a time frame, and at this stage fishing can occur, but it is a short time frame and most people believe that the legitimate quota that you have would not be caught during that period; you would not be into the extra fishing. That is the hope, and that is one thing that we seriously talked about; it has come up several times.

I want to add that some people asked us to get rid of the objection procedure entirely. That sounds good, but we might be the ones who get shafted. It would be nice to know that we could object if we thought we were ill done by.

Jeff MacDonald, Director, Atlantic Fisheries and International Governance, International Affairs Directorate, Fisheries and Oceans Canada: In terms of the changes to the decision-making process and the introduction of a dispute- settlement procedure into the NAFO convention, the burden of proof has now been shifted onto the objecting party to prove its case before an independent panel. The panel is drawn from a list submitted to NAFO of fisheries management experts from each contracting party.

In the case of a panel struck to hear an objection, the objecting party and the commission will choose the three members of the panel. They will choose one each and then mutually decide upon the person who will chair it. That panel has 90 days to hear the case and to render their recommendations to the commission. The commission is then asked to meet one month later to re-examine its decision, based on the findings of the panel, and either to maintain the existing measure or to amend it or revoke it and replace it with a new measure.

Pending the outcome of that process, if there is still dissatisfaction, then contracting parties may enter into a dispute- settlement procedure either through a process of their choice or, failing agreement on that, either party or any party has the ability now to take another contracting party to the Law of the Sea tribunal under the United Nations Fish Stocks Agreement. This is new text that has been introduced into the convention, based on language that was negotiated over several years among NAFO parties, leading up to this reform of the convention.

The last question related to timelines. It is our anticipation that this entire process would take place within the first six months of the fishing season. That would include getting to the point where, if necessary, there was a need for a binding international court ruling. In the interim period, sovereign states have the right to set their measures. They are subject to panel recommendations and, finally, to the weight of international law. There is that balance in terms of respecting the sovereignty of countries while, at the same time, making sure that they follow the rules under the Law of the Sea and under the United Nations Fish Stocks Agreement.

Senator Cowan: Are there sanctions? We all know how long these processes take. I am concerned that a nation determined to take advantage of every loophole of the system would pursue these things and drag out these procedures while fish merrily away during the time this was going on. They would say they are entitled to fish in a particular area until the final ruling is in. In that case, if they have already caught there, what do you do? Is there a procedure, such as taking the surplus off the next year's quota, or how do you handle that?

I think the minister was suggesting that perhaps the time frame would be short enough that you would not be able to catch enough to get yourself over what might be awarded.

Mr. MacDonald: The unique feature of the panel process is that the recommendations of the panel, should the proposal not be acceptable to the objecting party, not only apply to the proposal of the commission, but also to the alternative measures that the objecting party has put forward. If there is a continuing dispute on the measure, the recommendations of the panel become a binding measure on the parties to the dispute, if they pursue it through the international court while that process is being heard.

In the Law of the Sea convention and in the fish stocks agreement, there is also the opportunity to seek interim measures from the international tribunal. The ruling of the panel will be the binding measure in the meantime. If the tribunal does decide upon interim measures to impose upon the objecting party, then those interim measures are binding as well. There is a binding aspect to this process at the point it enters a dispute-settlement procedure coming out of the panel process within the NAFO convention.

The Chairman: To be clear, after the ruling of the tribunal and before the appeal to the World Court, or whatever court it is appealed to, there is a binding mechanism, is that right?

Mr. MacDonald: Yes, that is correct, Mr. Chairman.

Senator Cochrane: Before I begin my questioning, Mr. Chairman, I have a supplementary arising from Senator Cowan's second to last question.

In regard to boats that have been caught overfishing or catching a species on which there is a moratorium, or whatever offence they are guilty of, we have heard in the past about such ships being sent to their home ports in countries like Sweden and Portugal. They have been addressed by their countries, but their countries have been very lenient in regard to the penalties that have been given these boats for overfishing. Where do they stand today?

Mr. Hearn: That is entirely different. First, let me just go back to the objection procedure, because sometimes we can get caught up in that.

I can only remember one or two objections that have been raised during the last five or six years. It is not something that you see very often. When you had the ability to do it without any worry about follow-up, that happened very few times. With these new stringent rules, unless somebody feels really ill done by, you probably would not see any objections.

In relation to your question, senator, beforehand, when we boarded a boat and issued a citation, usually nothing happened. The boat very seldom was called back; it was just in recent months that we saw some countries take it seriously and start to call their boats home. Even then, we had no idea what was done with them.

Now, whether it is the Coast Guard, the EU or whatever, the minute we board a boat and find infringements, if they are in this serious category, the boat has to be ordered to port immediately. That port could be Saint-Pierre and Miquelon, St. John's or wherever, depending on time and cost. When it goes to port, it must be off-loaded and the total cargo checked against the evidence we have of abuse.

Mr. MacDonald can correct me on this, but if it is found that the captain or the company is guilty, then the country has a number of options. It can fine; it can reduce quota; it can, as far as that goes, take away the cargo and the boat — they can seize both the boat and the catch; or it can withdraw the licence. I believe that is also one of the options.

The agreement generally is that the punishment has to fit the crime. Any less than that is not going to be accepted by the member states. Where you got away before with a slap on the wrist, or maybe nothing in a lot of cases, there is no choice now except for the member state to deal with the offender.

Senator Cochrane: Are we are sure of that now?

Paul Steele, Director General, Conservation and Protection Directorate, Fisheries and Oceans Canada: The biggest gain that we got from the latest NAFO meeting is the fact that vessels will be brought to port when there are cases of serious misreporting. In the past, there were provisions similar to that, but it was often left to the discretion of the flag state or the contracting party, the European Union, as to whether the vessel would or would not be brought to port. With the new measures, the discretion is no longer there; ordering the vessel to port is mandatory.

In addition to that, the provisions that describe the sanction procedures in the NAFO measures have been strengthened. Time will tell how effectively those measures are applied, but the wording of the measures has been beefed up considerably. Currently, the measures talk about application of sanctions that would be adequate in severity, that would secure compliance and, probably the most important part, would deprive those responsible of the economic benefit of the infringement. As I said, time will tell as to how flag states and contracting parties actually put that into practice, given that the framework is there.

Senator Cochrane: What about vessels flagged from other countries? If they are not allowed by their own country, they may use a flag from another country.

Mr. Hearn: The only ships that can fish in the NAFO regulated zone are from countries that belong to NAFO. Just last week, a number of ships from Georgia, a country known to have rogue vessels, were added to the black list that we talked about. They are banned not only from our ports but also from all the ports of NAFO countries. This shows that we are coming together — the Northwest Atlantic Fisheries Organization, the Northeast Atlantic Fisheries Association, including England and Scotland. These countries likely have many more problems than we have with respect to rogue vessels. They have developed a black list, too, because piracy on the seas is not being accepted anywhere. The world has come together to deal with these rogue vessels. The Northeast Atlantic Fisheries Association and NAFO have come together to develop a list such that, if someone offends in one area, another area will not offer support. That tightens the screws on flags of convenient states.

Senator Cochrane: On a practical level, how do you see these reforms being achieved? For instance, when a vessel violates fishing regulations, who ensures that the vessel goes to the nearest port? How will this be enforced? Does Canada provide the human and financial resources to enforce this or is the regulation on paper only?

Mr. Hearn: Certainly, it is not on paper only. The offending vessel will be sent to port or recalled to port, although it is not always the nearest port. Undoubtedly, the vessel's owners will want it to be a port that they can get to fairly quickly to save money. There is no advantage to bringing the vessel home because the enforcement officers that catch them can either stay on the boat or be there when the vessel arrives; the choice is theirs to be made. So the vessel must get to port immediately. Canadian or EU officials do the surveillance and they enforce the regulations.

We have three boats available to do surveillance of the Nose and Tail of the Grand Banks and the Flemish Cap. Usually, we have two at sea at any one time and the EU has a boat as well. All of them police all fishing activity. All the citations you have heard about in the past were issued by the Canadian Coast Guard, some with the cooperation of the EU and many on their own. It was just a warning to take them in and did not mean anything. The crew of the vessel could throw the fish overboard and then continue fishing, and nothing could be done about it until we had cooperation from more countries. Currently, if the CCG boards the vessels, which we can do at any time, and finds that the crew is breaking the rules and committing one of the major infractions, the vessel must be sent to port immediately, not when it finishes its voyage. From that point, it is up to Canada. We keep logs on all the vessels and we will be there to determine whether the charges are legitimate. These rogue vessels will not be able to hide the evidence, if we think it necessary to search. Should a vessel be guilty of an infraction, it is up to the offending country to issue the punishment. The punishments are severe: States will be obliged to impose a fine, or to suspend or withdraw a licence or a catch quota, or to seize fishing gear or the illegal catch. These are pretty heavy punishments. We will accept only that the punishment be commensurate with the crime.

Whether we have obtained perfection in the objection procedure or in dealing with these matters, we truly do not know; but time will tell. If we have not reached perfection in this area yet, at least the rules are in place to give us perfection, provided there are no loopholes or ways around the rules. Next year's NAFO meeting will be just as interesting as this year's was. This is a building block to do what must be done. I have no doubt that we can get to where we want to go.

Senator Cochrane: Are you saying that these reforms will work rather quickly?

Mr. Hearn: On January 1, 2007, the sanctioning on the water comes into effect.

Senator Cochrane: Like many Canadians, I am very concerned about illegal fishing and the impact that it will have on our fish stocks. DFO has a website called ``Operation Driftnet.'' Could you give the committee a bit of background on that and tell us what steps Canada is taking to address the issues of illegal fishing and enforcement?

Mr. Hearn: This is not just Canada. Some of us in our parochial domain will say, ``If I were home in my little fishing community looking at it from my perspective and hearing stories on the open line shows about the 150 Russian trawlers that are fishing inside our 200-mile limit and the 300 Portuguese vessels on the Nose and Tail, I would be concerned.'' The fact is that there is not one foreign vessel fishing inside our limit, and they have not done so for years. The only way any foreign vessel could fish inside our limit is if we were doing an experimental fishery and did not have the kind of boat we needed and arranged with some other country to provide the boat. That boat would then have to be flagged Canadian and meet certain requirements to do the experiment. Foreign fishing inside Canada's 200-mile limit does not happen. The most boats we have ever seen at one given time on the Nose and Tail over the last two or three years would be between 25 and 35. This occurs during peak times, when some are fishing turbot, shrimp or groundfish. At any one time on the Nose and Tail, in particular, fishing groundfish, which we are trying to build up, the vessels are few and far between. That can be verified simply by going to any of our fisheries offices and asking the Canadian Coast Guard, or you can ask them to fly you over so you can see for yourself.

We do the same thing on the West Coast. We have a number of Coast Guard vessels on the West Coast and East coast and on the Great Lakes doing surveillance to monitor constantly. As we build support to do what we wanted to in NAFO, we are also building support to deal with fishing generally inside and outside Canada's 200-mile limit. We have to be part of it. I cannot be responsible only for the fish in our area, because fish swim; and I cannot be parochial either. What we try to do inside, we have to try to do outside to help others, who help us, and to preserve the stocks. As well, I cannot say what we should do outside the limit. I cannot suggest banning anything outside the limit if I am not prepared to do the same inside the limit. There must be an overall balanced picture.

We have had major support from countries like Australia, New Zealand, Chile, Namibia and others, who have much greater problems than we have because many are surrounded by nations that send out rogue vessels that rape their fish stocks inside and outside their economic zones. We are working with people on the West Coast, in the United States and in any other country where they want to work with us to do surveillance. When we catch people at it, then they are brought to the international court or whatever court happens to fit the area concerned.

Mr. Murray: The specific operation you are referring to unfolded a few weeks ago, but the arrangements are under a UN general assembly resolution that led to the convention for the conservation of anadromous stocks in the North Pacific Ocean. In this operation, as the minister said, we worked very closely with the United States. In fact, the Department of National Defence plays a major role in this. In the recent operation, there was 168 hours of Aurora time, plus the U.S. Coast Guard was involved. Our people were involved and found 27 violations. Over the years, this has been effective in reducing dramatically this driftnet fishing. The driftnets we are talking about range in size from two kilometres to 40 kilometres in length and do horrendous damage.

The countries involved in this are Canada, the United States, Russia and Japan initially. South Korea has joined. China, although they have not officially joined, does enforce it and does ride in U.S. Coast Guard vessels. It is having a real impact. If it is vessels related to any of those countries, cargos and vessels have been seized since this went into effect. If it is other countries, then diplomatic pressure is brought to bear on them.

This driftnet scourge in the North Pacific has been effectively attacked. In fact, for this most recent operation in driftnet, we changed the time of year that we did it, which is probably why they nailed 27 vessels. DND deserves a lot of credit for it as well, because their long-range craft are required, given the vastness involved.

The Chairman: The onus is still on the flag state to penalize; is that right? The ship is taken to port, the cargo is unloaded, it is inspected, and there is then a penalty. However, it is up to the flag state to impose the penalty. Is there any sanction on the flag state if it does not do so?

Mr. Hearn: Yes. The agreement is that the flag state is responsible for the boat. The flag state is obliged — that is the word used, not ``might,'' ``can'' or ``should,'' but ``obliged'' — to deal with the crime, and the punishment must fit the crime. If not, then the other partners in NAFO will be taking action against them. I can say that, because we will immediately object to countries that will not play the game. They have signed on to this. This is not something a few of us are enforcing on someone else. Every single country belonging to NAFO has signed on to this.

The Chairman: How much must be approved by their individual legislatures? Is this subject to approval by state legislatures in the EU?

Mr. Murray: Perhaps Mr. MacDonald can elaborate on the process that must be followed on the NAFO convention side of that. There is a process there in terms of the monitoring, control and surveillance. That comes into effect on January 1.

In relation to the flag state scenario, I would emphasize that these are flag states, like Canada. Certainly Russia has yanked vessels back, as has Spain. The problem in many cases has been the legal underpinnings. In Spain's case, when the government takes someone to court, they must ensure that they have the evidence. Otherwise, they are liable to the owners if they cannot make it stick. We believe these provisions have put in place the tools for flag states to be very comfortable. We are not talking about flags of convenience here; we are talking about flag states. Many of the flag states are part of the EU contracting party. I suspect that if an EU flag state decided to thumb their nose at this, it would probably have consequences within the EU, which is the contracting party in this. This concern has played out a bit. Certainly, Canada respects the obligations that we sign up for, and we must assume the other 12 nations, as part of this agreement, will do the same thing. It is a fairly public scenario if they do not.

Mr. MacDonald: In relation to the ratification of the new convention, it was agreed among contracting parties that this process — not the monitoring and control and surveillance aspects, which are updated annually, but the reform of the convention in the NAFO convention — requires the approval of three-quarters of the members. It is the intent that we achieve consensus on these issues in order to avoid any possible objections to something as fundamental as the convention.

In terms of its ratification, the members agreed to the idea of interim application of the measures once the legal text has been finalized; then, pending that, it must be ratified by contracting parties through their respective government processes, including here in Canada.

The Chairman: The convention must be ratified, but what about the new rules with regard to recall to port, and penalties and so on? Must that be ratified? Is that part of the convention?

Mr. MacDonald: The new penalties with regard to monitoring, control and surveillance are part of NAFO's conservation and enforcement measures, which are updated annually. Those have been approved at the NAFO annual meeting.

The Chairman: They do not have to be ratified by legislatures?

Mr. MacDonald: No. They will come into effect at the beginning of the new year.

Mr. Hearn: The NAFO meeting occurred just last week, and we had agreement on the principles. It is now a matter of getting it into legal text and then the convention being ratified. We have not absorbed all of it yet, but we know where we are in principle and we have every confidence that what we agreed to in principle will be delivered upon. We are sure it will.

The Chairman: Neither the quoted dispute settlement nor the recall to port are part of the convention. That is a matter that is updated annually.

Mr. Hearn: That comes in on January 1.

The Chairman: That is fine. I wanted to be clear on that.

Mr. Hearn: The dispute resolution, the objection procedure, is part of the convention; but the monitoring, control and surveillance aspect, the arresting of the boats, the fines, taking them to port, and all that kind of stuff, kicks in on January 1.

The Chairman: The dispute over the quotas is part of the convention and therefore must be ratified?

Mr. Hearn: That is right.

Senator Hubley: Thank you for your presentation. A news release from DFO in September stated that NAFO's fisheries management process must now take into account the precautionary approach and the ecosystem approach, and that means basing its decisions on science and considering fish habitat and marine sensitive areas closer in line with Canada's practices.

In your presentation, you said that it was your objective to ensure that the conservation, management and enforcement measures outside Canada's 200-mile exclusive economic zone are just as effective as those inside. My question is around the scientific information that is underlying many of the decisions we are able to make and why we can have NAFTA become a much stronger body for the fishing communities.

Does Canada have sufficient scientific research capacity to provide the type of information that you would require to be able to put in many of the regulations that you are now enabled to do? How important is that scientific information in the process of dispute resolution? Are we able to base much of our ability to make decisions on overfishing, and on who is not compliant with our standards, on this information?

Mr. Hearn: Allow me to give you the general outline again, and we can add more to it technically. With respect to setting quotas, not only does Canada have a scientific base, but so does NAFO have a scientific base. You asked whether I am satisfied with the amount of science that we have. The best answer to that is as follows: A couple of years ago, I attended a meeting of NAFO ministers with then DFO Minister Thibault. Without exception, all of them — Portugal, Spain, Russia — said that they were not satisfied with the amount of science. It is a big ocean out there that is a rapidly changing environment, some of which we cannot explain.

We have increased scientific funding this year and we intend to continue doing that. If we are to make sound decisions, we must have some basis for making them. The UNFA principles that have been incorporated into NAFO oblige us to use the precautionary approach and to look at the ecosystem. That is why seals and all other factors must be considered. Those principles oblige us to set our quotas based on science, and not on pressures from certain countries, so that no one fishes any species to the point of extinction. We are obliged to set quotas based on science; so we need to have the appropriate science.

Collectively, we have a fair amount of scientific data and we have to work together in common with that information. We cannot all go off and do our own thing. We have had many meetings this past summer in our own area. I spent more time in Prince Edward Island than in Newfoundland and I was so busy that I did not even have a chance to golf. That will give you an idea of how many meetings we had, not only with the minister from Prince Edward Island but also with the ministers from New Brunswick and Nova Scotia. Collectively, we met and became a pretty good unit. We have looked at what we can do collectively in places like the strait, where the fish are in common areas, instead of wasting our time and effort with each province going off and doing its own thing.

We have been meeting in many areas of the country to collectively discuss the issues. In British Columbia, we brought together many of the players around one table to eliminate the duplication and infighting. This year, for a change, we had peace on the Fraser River and elsewhere across the country. Is everybody completely happy? Of course not, but they are part of it now and they are starting to buy in. They all realize that we must have greater input — ours with that of other countries — coordinated with NAFO to make the best use of our resources. We might not reach utopia but we will be much better off than we are now. Does anyone want to add to that?

Michaela Huard, Assistant Deputy Minister, Policy Sector, Fisheries and Oceans Canada: The minister mentioned that extra money has been put into science. That amount is roughly $10.5 million. I happened to bring with me a list of the projects underway that might be relevant to some of your questions, Senator Hubley. For instance, $7.6 million is in support of 14 research projects in Newfoundland. Some of them enhance understanding of the distribution of the biodiversity of deep sea corals in the Newfoundland and Labrador region; there are projects on biogeography, life history, biogeochemistry, critical habitat, improving population models, improving the knowledge of reproductive potential of straddling Greenland halibut stocks and native stock assessment fisheries management. There is a long list of projects aimed at understanding the ecosystem better, the impacts to habitat and, generally, the ecosystem of changes. Extra work is being done to address that question.

Mr. Hearn: There is a long list but they are not all in Newfoundland, Ms. Huard. We are doing a great deal in the strait, in particular, where for some reason the stocks are disappearing. We are spending a lot of money to do a lot of work in British Columbia.

Senator Adams: Minister, the last time we met was in the early spring. However, not much has been resolved with respect to the commercial fishery in the North. Today, we have been talking mostly about NAFO. Nunavut's neighbour, Greenland, is within the 200-mile limit, but they still want the fish from Nunavut waters. The Government of Canada initiated turbot quotas in the North about 15 years ago. In 2003, we expected the fishermen of Nunavut to become involved in that, especially those from the five communities in the Baffin region. The minister set quotas for Nunavut but the community fishermen are not getting them, perhaps because of the policy under the Fisheries Act. We are Canadians. Newfoundlanders began fishing commercially over 500 years ago. About five or six years ago, people began commercial fishing in the rest of Canada, and now we have no control over it. DFO states that 27 per cent belongs to Nunavut but that 27 per cent does not come from fish caught within the community. Mostly it comes from royalties given to those companies. They are the ones that get the royalties, not the community. I have difficulty with that.

You said that the seal industry in Newfoundland is worth about $30 million, which was about 8,000 tonnes. Greenland turbot quotas in the Arctic are worth over $35 million. Over the last five years, they have tried to help the local people in one community, which finally received 1.03 tonnes this year, for which they were paid. We are beginning to learn how to work better with northern communities. We asked about the status of the new people who are fishing and setting up their partners from Newfoundland. They received $680,000 in royalties. That is good. Right now, we do not have any idea what it will be for the fish caught this year, but we estimate that it will be around $2 million.

There is competition there now. The foreigners are coming up there. I have a statement that for this year so far, they have taken close to 7,000 metric tonnes and the royalties those guys received was $2,800,000. Why would a part of that not go toward the community?

We do not know where the money that was allocated went to. Was it paid to people working on the ship for labour or for the cost of fuel? There is no explanation of where that money goes. According to the Government of Canada, there is a policy that the royalties are supposed to go to the people in the community. That is not happening.

The quota is 8,000 metric tonnes. If we allocate it to every community in the Baffin region, the money will stay in the communities; it will not go to the fishermen directly, but every community will be a quota holder for the Nunavut quotas.

Do you have any reports from the people who allocate quotas every year, which were expected sometime in February?

In 2003, we did not have any policies concerning who would benefit from that $35 million a year for the Nunavut turbot. The people up there in the community are not receiving it. It is only one community now. You mentioned the seal hunt. Now the same organization will benefit from the seal hunt up there too.

The Chairman: Maybe we should give the minister a chance to reply.

Senator Adams: Perhaps my question was too long.

Mr. Hearn: I understand where you are coming from, Senator Adams. It is a pretty frustrating issue for you and for a lot of people in Nunavut. It is a frustrating issue for us, as well. It is probably an issue that your Senate committee might want to put on your agenda to have a look at.

The Chairman: I should just intervene and say that we have agreed to study that particular issue. We will be calling witnesses from Nunavut to come to Ottawa. We hope that the whole thing will be televised so the people in Nunavut can see it. We do intend to get to that as soon as we finish our NAFO hearings.

Mr. Hearn: That is good, because it has been a contentious issue for some time. What the senator is basically outlining is something that many of us have complained about for a long time — that we are not the ones getting the benefit from our resources. For the chairman and for Senator Cochrane that is a very familiar tune.

We have rich fisheries off Nunavut; and, of course, when Nunavut gained self-government, it was given control over a tremendous amount of the fishery. In fact, last year when we increased the total allowable catch in turbot in the area, all of it went to Nunavut.

What happens is that the quotas in shrimp and turbot are given to Nunavut; the Nunavut government then basically turns it over to the Nunavut Wildlife Management Board, which, in turn, divides the quotas to different groups. One of the groups, the Baffin Fisheries Coalition, gets by far the lion's share of the quota; in fact, it gets almost all of it.

The problem in Nunavut is that we have little or no infrastructure. They have a tremendous resource offshore; but except for a couple of small communities where you can land very near shore, for the fishing that goes on for the larger operations — the lucrative ones in turbot and shrimp — there is absolutely no place to land. The only way Nunavut gets any benefit is if they sell the fish in the water to an outside interest that will pay them royalties. As it happens, the major beneficiaries of that are from Greenland. Even though you might say they are Canadian boats because they are Canadian flagged, that is not overly difficult to do. We have some Icelandic, Danish and Canadians involved as well, I guess, but the off-loading principally takes place in Greenland, where the work is created. In some cases, it is just off- loading, repacking and then shipping to Europe.

A couple of things concern us here. One is the lost opportunity for Canadians, primarily the people in Nunavut who are adjacent to the resource. Another is that, because of geography, it is extremely difficult to land it in Canadian ports, although other people say it can be done. So we need more people coming in to see us, and to see the Nunavut government, to show us that we can handle that resource in a way that gives greater benefits primarily to the people of Nunavut, but also to Canadians generally. We do not want to see most of the benefits going to Denmark, Iceland or Greenland, or to see the shrimp, in particular, transshipped into a European market by Greenland, thus circumventing the tariff. Our shrimp are beating us in our own markets and we are paying the 20 per cent tariff.

The whole thing is a bit of a mess, primarily caused by the lack of infrastructure in Nunavut. It could be remedied somewhat, I think, by a whole realignment of how the quotas are issued, caught and landed, et cetera. We are certainly going to be doing what we can to clean up the whole situation. However, geography beats us, a lack of infrastructure beats us and some of the loose rules that we have certainly are not helping either. I am fully aware of the situation and I sympathize with the plight that Senator Adams finds himself in.

The Chairman: Senator Adams, could I ask you to hold your questions for now? We will be devoting a whole session to Nunavut, but if we start exploring it tonight with 20 minutes left, we will get off track. We need to stick to our agenda, which is the management outside 200 miles. That is our topic, so if I could ask you to hold your questions until we get to Nunavut, is that agreeable?

Senator Adams: I do not know when the minister will appear again before the committee.

The Chairman: We will call the minister again.

Senator Adams: I know we are concerned about the 200-mile limit, but it seems unfair that, while we have been operating for over five years, we will not be able do that anymore. It is the foreigners who are getting the benefits, not the Inuit people. That is why I tell the minister that we must stop flagging foreigners to allow them to come into Canada.

We can get Canadian partners for the people, Canadian companies, to do that. Right now, we are getting nothing from foreigners coming in to catch our fish. We need some way in the future to stop letting them operate under the Canadian flag in Nunavut. It should be a matter of policy.

The Chairman: I just say again that, for tonight, I would like the committee to focus on the management outside of 200 miles.

Senator Adams, we are going to go into that in some depth later; I am sure the minister will be glad to come back and speak to us again about it and we will be having officials from Nunavut. I would prefer to keep that topic for a special session and, with the time that we have left, to deal now with management outside the jurisdiction.

Mr. Hearn: If I could add to that, Mr. Chairman. I appreciate that, but I also understand where Senator Adams is coming from. Rather than take a chance on somewhere down the road having a chat, let me just say to him that on this issue, or on any issue from his area, I would be only too willing to chat with him at any time at all. We do not have to wait for a Senate meeting to discuss this issue.

Senator Cowan: I just wanted to talk for a moment about bottom trawling. I understand that at the September meeting, which took place last week, the delegates decided in favour of a ban on bottom trawling. I understand from you, Mr. Chairman, that the U.S. president indicated today that he supports that ban. What is the position of the Canadian government on this issue?

Mr. Hearn: I heard the same story today. I heard that the President of the U.S. has called for an all-out ban on bottom trawling. I was hoping that was true; however, I have been told that is not the case. I stand to be corrected because I am, like yourselves, only getting bits and pieces, but apparently the President is expressing concern about bottom trawling as a technology and about the effect it has on sensitive areas of the ocean.

The American stand is one where they, like everybody else, realize a lot of damage is being done to our habitat — and it is not just the habitat. When you use a troller you catch everything that is in its way. It is like a vacuum cleaner. If you are trawling for yellowtail and there happens to be cod or American plaice in the area, both of which are under moratoria, a significant amount will be caught. Fortunately, our bycatches on the Grand Banks, for example, are reasonable; but are they reasonable because we do a good job in trying to avoid areas of concentration or are they reasonable because there is so little left that we catch only a small amount anyway.

Cut it how you like, bottom trawling has to do damage if you look at those heavy doors being dragged over the ocean floor. In certain areas, and that is the key wording that we have to remember, if we are using technology that does not damage the habitat, there are many other areas on the Grand Banks and certainly many areas in the high seas, I am sure, where bottom trawling would not do damage to the habitat. However, the argument might be made there that that might be true, but what about the other incidental species that you catch? That in itself is a good argument.

Our major concern is sensitive areas, such as seamounts, sensitive corals and spawning grounds. At NAFO we agreed to outline four different seamounts in the NAFO zone where we will avoid dragging. Sensitive corals, of course, would be destroyed by dragging, and also one of my major concerns for some time has been spawning grounds.

When we did our inquiry on what happened to the northern cod, we were told of indiscriminate dragging, not only by foreigners, but by ourselves. We contributed heavily to the loss, a lot of people will say, when we got into the big boat dragging technologies. In the spring or during the winter when the fish congregated to spawn, that was a great time to go and load up. Load and go, as fast as you could, and we wiped out stocks in a matter of a few years.

The phrase being used is ``freeze the footprint,'' which means that, yes, we probably have done a lot of damage, and in some areas we have done irreparable damage. Let us make sure that, if we move into any new areas, if there is any new movement on dragging, we go there only after we have had a full assessment of the area, when we have the proper signs that tell us whether or not there will be damage. Let us avoid dragging on seamounts. Let us avoid areas where sensitive corals exist. Let us avoid spawning grounds. Let us take steps that make sense. Then let us determine, as we move forward, where this technology can be used successfully and where it cannot, and start moving forward in the correct way.

When I was putting forth my arguments on overfishing, I asked some of the lawyers if we actually owned the sea bed or had control of the sea bed outside the 200-mile zone. No other country can fish crab, for instance, outside the 200- mile limit on our continental shelf, because Canada owns the crab. My argument was that, although we cannot stop people from fishing in our waters, because we do not control the water that flows over the continental shelf, nevertheless, if we own or control the sea bed, why then are we letting people drag heavy doors over it, destroying our habitat? I was told that we would probably have a very good argument if we used this destruction of habitat in order to stop the dragging. I was warned, however, that if we stop the dragging outside — and you know what I am going to say — if we stop it outside, because dragging technology is destroying the habitat, it is also destroying it inside.

Right now 28 per cent of our landings are done by draggers, by trawling. The shrimp fishery depends entirely on trawling. There are two things to do. Number one: try to avoid destroying habitat where we can; number two, which not a lot of people talk about but some people are doing something about, develop technology that is less damaging.

We may be able to troll bottom-feeding fish with the right technology. Two things can be done. Number one: develop technology that does less damage to the habitat. Number two: develop technology that has a separating or sorting system that can cut down the bycatch. That is happening. In fact there is an experiment going ahead right now on Prince Edward Island where we are trying to identify some product for Canso, and areas like that. Part of it will depend on the ability to sort out other species.

We have not concentrated enough, perhaps, on doing things the right way. We have to realize that people live by the sea. Certainly in my province, and in a lot of areas of the world, fish is the heaviest traded food commodity; it is the heaviest traded food commodity in the world. Even countries like Spain import as much again as they catch. It is a great market for our country.

However, we can not destroy everything in our catch; conservation has to be number one in the protection of habitat. Maybe we can have the best of both worlds if we are sensible. However, we have concerns that an outright ban would take people away when there is not a need for a ban. The minute we say it is bad outside, we had better be prepared to say it is damaging inside; whatever we do out there, as I mentioned with NAFO, we have to do inside.

We will proceed with caution and go the limit in trying to protect and preserve, but we must also try to be sensible in our approach.

The Chairman: Minister, you have been very generous with your time, but I wonder if I could ask you to address one more issue, and that is the rebuilding of the stock outside 200 miles. Was there any discussion of that at NAFO? Are there any plans to have a policy for stock rebuilding? What we have talked about up to now is managing what is there, which has been depleted. The question is, where do we go from here in stock rebuilding, and is NAFO going to have a plan for that?

Mr. Hearn: I believe that rebuilding is what this is all about. We have so little left. The northern cod, for instance, is maybe only one or two per cent of what we had several years ago. Hopefully our little experiment this year will prove that the in-shore stocks have grown tremendously these last few years; it is only a small amount of fish, but they have grown very rapidly. If they can grow inside, then surely they can grow outside, because the base stocks were always supplemented with the Hamilton Bank northern cod stock and the Grand Banks stock, all of which came together during the summer and followed the capelin to the shore. Summer after summer you could almost walk on the water because it was so full of fish. That stock disappeared because we were indiscriminate in the way that we fished and perhaps because of environmental and other factors.

The stock diminishes more quickly as the pressure continues, but I would not say that we learned too late, because as long as there are fish we can rebuild the stocks. If we have the proper scientific information on the stocks, if we can cut down on or eliminate bycatch, if we can avoid overfishing, or inappropriate, illegal or unregulated fishing, then these stocks have a chance. It will take a while but they have a chance to come back. Our yellow tail stock rebuilt very quickly once the pressure was taken off. We will obtain some technical advice on this, but, essentially, as we are doing with the Greenland halibut, we want to set a certain tack so that we can see the stock rebuilt. When we and other countries live by that tack set, then we will see the stocks rebuild. If we see countries blatantly overfishing their quotas, two things have to happen: The overall tack set has to be dropped and the amount lost should not be taken away from the good guys. In the case of the Greenland halibut, Canada, Japan, Norway and others have lived by the quota to the pound. If people overfish and we see diminishing stocks as a result, that price has to be paid by those who damage the stock. These are things in the mill that will lead to rebuilding.

Mr. Murray: As the minister mentioned, the yellowtail stocks have been successfully rebuilt and there is a plan under NAFO for the rebuilding of the Greenland halibut. NAFO took a significant reduction from a 43,000-tonne tack in 2003 down to 16,000 tonnes. We have some concerns about elements of that. There is some scientific advice about a further reduction this year that was deferred until next year. The reality is that the Greenland halibut rebuilding plan aims to get the biomass that is current at 70,000 to 80,000 tonnes back up to 150,000 tonnes by 2015. That is part of the NAFO plan to rebuild the Greenland halibut stocks.

There are some edges, as the minister said, around who is catching how much and whether we are on track with that, but at least there are rebuilding plans for the stock. The plan for yellowtail was successful and certainly Canada will continue to press on Greenland halibut. Whether we succeed is open to some debate, but, certainly, the provisions coming out of this meeting will help, I believe.

The Chairman: If there are no further questions, I thank you, minister, and your officials for coming today and being so generous with your time and answers.

The committee adjourned.