Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 12 - Evidence - November 29, 2012 (afternoon meeting)

MONCTON, Thursday, November 29, 2012

The Standing Senate Committee on Fisheries and Oceans met this day at 2:05 p.m. to study the lobster fishery in Atlantic Canada and Quebec.

Senator Fabian Manning (Chair) in the chair.


The Chair: I welcome you all here. This is a meeting of the Standing Senate Committee on Fisheries and Oceans. My name is Fabian Manning. I am a senator from Newfoundland and Labrador and I am the chair of this committee.

Before I ask our witnesses to say a few words, I would like our senators to introduce themselves.

Senator McInnis: Senator Tom McInnis, Nova Scotia.

Senator Unger: Senator Betty Unger, Edmonton, Alberta.

Senator Hubley: Senator Elizabeth Hubley, Prince Edward Island.

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

The Chair: We will be joined shortly by Senator Mac Harb from Ontario.

The committee is continuing its study of lobster fishing in Atlantic Canada and Québec and is pleased to be here in Moncton this afternoon to hear from lobster harvesters. The committee is interested in learning more on the work and the initiatives as well as the concerns of harvesters, and we are very pleased to hear from various provincial and regional organizations this afternoon.

On behalf of the members of the committee I thank you for taking the time to join us here today.

Whoever would like to begin, please state your name and who you represent.

Ian MacPherson, Executive Director, Prince Edward Island Fishermen's Association: My name is Ian MacPherson. I am the Executive Director of the Prince Edward Island Fishermen's Association.

Thank you, Chairman Manning, for the opportunity to speak this afternoon.

Unfortunately I was not able to catch all of the session this morning, but some very good information was exchanged. I think if I had an opening comment it is that most of us in the industry realize that there are no silver bullets. It would be nice if there were one or two solutions but it is a fairly complex industry and that is why we appreciate the opportunity to speak to the senators about various bits and pieces about what makes our industry so interesting and challenging.

Without further ado, I have put together a brief summary of what we in P.E.I. call the canner lobster and why it is important to our fishery and our economy.

I will begin with a bit of background on the PEIFA. We were originally formed in the early 1950s to enable Island fishers to discuss the effects of a proposed trap limit. While holding community meetings across the Island to discuss the issue, we soon realized that we needed a representative group to express our concerns to government on a host of industry issues. Many years later it does not seem like things have changed in that regard. The fishers recognize the benefit of having an organization such as ours where we can communicate amongst ourselves to our communities and also, importantly, other fishing organizations in our area.

The primary objective of the FA when it was formed is to speak with a unified voice to government and it appears today is a perfect opportunity. We currently represent 1,260 core fishers on P.E.I.

Just a brief history on the canner: I believe you heard this morning from our provincial counterparts that we are in the process of going from 71 millimetres up to 72 millimetres in 2013. It is a fully developed mature lobster. A lot of people are under the impression that we are taking immature lobsters out of the ocean and harvesting them prematurely but that is not the case. I am certainly not a scientist, but I know one of the mitigating factors or significant factors is the colder ocean temperatures. Although the lobster is older, the colder temperatures do slow down that growth, hence the smaller lobster.

The name "canner" has a historic meaning that because they were smaller lobsters generally they were allocated to canning. It has been a number of years since there has been canning in the old style, but certainly a lot of new and innovative ways to have lobster have come forward. Actually, on P.E.I. we are looking at developing a new name for this one. It is not term that is used too much in the trade. Mainly the lobsters are referred to by their weight, but it can have somewhat of a negative connotation although that certainly is not the case. When our president, Mike McGeoghegan, was over in China, the term came up through an interpreter. There was an immediate impression from the buyers that it was a very substandard product because some of the products over in that area of the world certainly are not noted or felt to be the quality products. That is one of the challenges we are trying to address.

In terms of statistics on how it relates to our industry on P.E.I. canner lobster constitutes 60 per cent to 65 per cent of our fall catch. Today, 89 per cent of our export value comes from our canning market, so this is a pretty significant impact to P.E.I. With the smaller lobsters generally the three things that are focused on in P.E.I. are whole cooked lobsters and tails — they are in around 53 per cent of what we export — then the popsicles in the frozen packs and then broken down for meat, that is about 20 per cent.

Tomorrow people from the processing industry will be speaking to the committee. As Barry MacPhee, from the province mentioned this morning, there are different business models out there between Prince Edward Island and New Brunswick, the two provinces that do the bulk of the processing. Again, our focus is mainly on the whole cooked lobster or processed product, and New Brunswick has developed some strong markets in the predominantly meat and lobster tail market.

We have had good success in developing niche markets. There are definite markets that are seeking a smaller size product; the cruise ship lines, the casino business and also the buffet business. Perhaps the best way to explain this in straightforward terms is that if someone is advertising a special on a whole lobster, it provides some uniformity in that everyone gets a lobster of the same size or very close. From there it translates down into packing. The smaller weights do produce a package that is easy to ship and that the end-user customers are happy with.

Referring to some of the things I mentioned earlier, this is a high-quality lobster. It offers a high-quality lobster experience for a lesser price. There is no comparable or alternative product available in the marketplace. Our smaller lobster is unique to Canada and they are not seeing it Maine and other parts of the world even if it is a warm water lobster product or a crayfish or whatever similar product is caught. This certainly gives the customers, the end users, a wider range of product sizes.

One of the most positive things is with the biomass. The stock is resilient so it is a strong recommendation for DFO to go up to 72. There was a lot of discussion around that over the last number of years and that is where we would like to stay. If we do increase the carapace size above 72 millimetres that is going to weaken the two primary markets on P.E.I., the whole cooked market and the popsicle packs, which would definitely have an economic impact.

Like anything, size diversity is good in the marketplace. You do not want to have a market that is two stratified and too many options out there. Consumers and end users just get confused. However, I do not think it would help any of our local economies to have us all competing, five provinces, over one carapace size or one range of size. We have economic challenges in many areas and we do not want to add to that. Quite frankly, we feel that increases above this size for Prince Edward Island would result in some missed economic opportunity.

There are a couple of things that we felt would be of interest to the committee. We had a very challenging fall season. I know that there has been discussion and will be further discussion about some of the challenges that this year presented. One Island processor could not use 0.6 per cent of their catch, which was a very low percentage, so we did see some very significant changes. With regard to water temperature changes and ambient temperature, everyone was up against high temperatures. Harvesters used a number of methods, coming in twice a day if required, making sure they had sufficient ice. It took extraordinary efforts all along the supply chain to make sure losses were minimized.

One of the things that is certainly becoming more and more prevalent in the marketplace is the request from consumers that products be certified by some sort of third party organization. P.E.I. is participating in a pilot project with the Fisheries Council of Canada, and it is based on an FAO global trust model. We are trying to develop a Canadian standard that would be hopefully as well respected and as high profile as the Marine Stewardship Council, MSC, certification. Certainly Alaska has done a good job on this. They have both a mix of MSC products and their own Alaska certification. Once they got the recommendation and established in the marketplace that was a good way to go and it has certainly worked out well for them. We have had our Marine Stewardship Council pre-assessment done.

It is not that we are saying we are going one direction or the other but certainly we are seeing more demand. We are hearing from some of our processors that big volume chain stores are asking for this type of thing, so we are seriously looking at it.

Whether it be the live market or processed one of the challenges, of course, has been supply. Again if down the road everyone was at a similar sized lobster or within a certain range we could see that market over supplied. Historically when we get into those situations unfortunately the price does not go up, it tends to go down and can stay down if catches are significant.

On a positive note in terms of the pricing structure, certainly we have seen a narrowing of the gap. Historically the difference between the smaller lobster and the market sized lobster on Prince Edward Island has been anywhere from 50 cents to 75 cents a pound. There have been times in the last year or so when we have seen very little difference in price or, in fact, the same price. We feel this is a unique product with a lot of value, and it would be a great day when we can get a better price for that unique product.

The last comment I want to leave the committee with is from John Sackton. He is a well-respected editor of Although it is a U.S. based organization and publication it certainly covers the Canadian market in great detail five days a week. John had made a presentation to us in 2010, and I would like to leave you with a direct quote. "Any further increase in size beyond 72 millimetres would be a disaster for P.E.I." We feel that quite clearly states it. Mr. MacPhee this morning alluded to two unique business models in LFA25. We are not saying that one is better or one is more important but there are unique markets with different customer bases, and we would like to see that maintained.

The Chair: Thank you, Mr. MacPherson.

I would like to welcome Senator Mac Harb from Ontario who has just arrived. I notice in the audience Senator Carl Stewart Olsen from here in New Brunswick. Welcome to Senator Olsen also.

We will hear from everybody before we open it up to questions. That would be the best thing because there is no doubt that there is a variety of opinions here.

Keith Sullivan, Market Analyst, Fish, Food and Allied Workers: I am Keith Sullivan, a staff representative and market analyst with the Fish, Food and Allied Workers Union out of Newfoundland. The organization represents about 17,000 workers in the province primarily in the fishing industry. Nearly half would be from the harvesting sector and certainly a large number in the plant sector, as well.

I would like to thank the committee for allowing me to speak today. I am quite pleased to see that this committee has been quite active. Lobster is certainly an important fishery to us all and like Mr. MacPherson said it is complex and therefore important to get a diversity of views from different areas in the industry.

I will quickly go through my points and try to hit on most of the important ones. I certainly look forward to follow- up questions.

In Newfoundland there are approximately 2,700 lobster harvesting licence holders. In recent years the landed value from that industry has been in the vicinity of $20 million per year. That is down from around $30 million in previous years just a short while ago. It has been a significant drop in return to harvesters. It is important to note that there is a lot of additional value that comes from this resource, as is often seen in export figures from other Atlantic Canadian provinces where the lobster is either processed further or shipped live, which is primarily the case in the Maritimes.

In lobster fishing areas 11 to 14 on the south and west coasts of Newfoundland are almost 1,000 lobster enterprises, and lobster would be the main fishery for most of those enterprises. Sometimes the numbers or the landed value does not necessarily speak to the importance of the fishery in Newfoundland. Sometimes we see higher landed values in shrimp, for example, but every dollar that is earned in the lobster fishery is spent in those communities and these are rural regions of the province. The lobster fishery occurs in other regions of the province — the northeast coast, for example — but it is usually not the primary fishery. For example, in Senator Manning's neck of the woods or where I am from, on the same coast as St. John's; it is a relatively minor fishery.

The lobster fishery is managed with input controls and conservation measures such as limited entry, licensing, trap limits and seasons. In Newfoundland lobsters are only harvested in the early spring and summer, from mid-April to early July, and no individual LFAs have seasons longer than 10 weeks. Lobster that is harvested is typically robust, hard shelled and all are market size considering the legal size is 82.5 millimetres. Other conservation tools include maximum size limits, v-notching programs and closed areas.

The Canadian lobster fishery has been shown to be one of the most sustainable fisheries over the long term with these management tools, the input controls in effect. There are no options for wheeling and dealing in quotas or ITQs or similar schemes and nor should there be. Input controls have proved that they have worked for this fishery. We cannot really listen to advocates of ITQs as conservation tools. For example, every groundfish stock that was placed under moratorium was managed either completely or in part by ITQs. We often hear of that as an option but I do not think you will hear it coming from the lobster fishing industry. It is often advocated by a very small few. We are not sure what the motives are but it certainly does not come from the harvesting sector.

It is important for DFO and the Government of Canada to work with harvesters to continue successful programs that were initiated by harvesters and supported by DFO. The Atlantic Lobster Sustainability Measures program announced by DFO in 2009 with albeit modest but very important investment saw Newfoundland harvesters in LFAs 11 to 14B, the major lobster fishing areas in Newfoundland, voluntarily reduce traps by 47,000 or around 17 per cent of their overall efforts. It is also important here to recognize the contribution the Newfoundland government to that program as well. They matched the federal contribution that was given in that ALSM program.

Both levels of government partnered with the fish harvesters to support a program that is a good first step in looking toward long-term stability and increased incomes for harvesters, who remain committed and continue to invest in the fishery and contribute to the local economies primarily in rural regions. To date, 134 licences have been offered to be bought in this lobster enterprise retirement program, which continues to 2014. I did mention that as a first step but that program will pay dividends in the future for us. However, it is really imperative that we look for ways to continue this rationalization in areas where it is needed. I do not necessarily advocate that for all areas but in areas where it is needed government should be certainly willing to discuss options with harvesters and look for solutions to the problems. Like I said, that was definitely a good first step.

We also believe that DFO must do meaningful consultation with legitimate harvester organizations when seeking input on public policy and all issues related to the management of our fisheries. DFO stressed the importance of a more inclusive approach to policy planning in the Atlantic fish policy review. DFO deviated from this approach in the future of Canada's commercial fisheries exercise. The process did not focus enough on the resource users who are most affected in the industry and the consultation was perhaps misguided. It certainly was not transparent and it caused a lot of headaches for people in every aspect of the industry.

That approach, which I said deviated from the DFO policy, and what would probably be a logical format to create positive change actually forced harvesters from 36 independent core commercial inshore and midshore fishing fleets to unite on common concerns. The independent fish harvesters movement represents almost all the harvesters in Atlantic Canada, including lobster harvesters. The organization will be a very strong voice for lobster harvesters and will be a huge asset for the industry and managers in the years to come.

Out of a lot of negatives in the air, that was one positive, and hopefully it will be an important voice in the fishery for years to come. We are often criticized of being fragmented and things like that so it was good to see one voice emerge from this process.

The industry gave a collective sigh of relief when Minister Ashfield announced the fleet separation and owner/ operator policies in Atlantic Canada would remain intact. Harvesters are still quite concerned that the independent core lobster harvesters' voices are still not going to be given full consideration and policy changes that could destabilize our industry in communities could still result from this what is called modernization process.

The minister's announcement will be totally hollow unless the federal government sticks to the April 2014 deadline for getting out controlling agreements, which are basically contracts by which someone other than the licence holder has control over the disposition of a fishing licence. We firmly oppose any extension of that deadline or grandfathering of any licences which are under controlling agreements. People were given seven years to comply and in no way, shape or form should they be rewarded for not complying or failing to do so. Seven years is a long time to adjust in this industry. We certainly wish sometimes we were given that long to deal with some decisions that stem from DFO.

For example, this year some monumental decisions came from DFO. Basically we were shocked by harvesters having to supply their own trap tags, changes to the observer programs, licensing programs and logbook programs. This was late in the year and there was insufficient time to allow harvesters to develop alternatives to the programs that DFO would have done in the past. For example, last year DFO administered trap tag programs. Harvesters are willing to take on these challenges but the short time frame certainly could cause problems, confusion and perhaps costly mistakes this year.

The changes are exerting extreme pressure on industry due to the significantly increased costs. In 2009 the federal government responded to this crisis in industry with support in the form of the ALSM program. This year when it is certainly an equally big crisis a lot of the factors have not changed. Things like increased landings, an uncertain world economy, exchange rates and the whole host of things I am sure you have heard a lot about have put us in a similar position, and this year more costs were piled on the harvesting industry, which is certainly problematic.

Perhaps the most significant challenge in recent years for the lobster industry has been creating new higher valued markets to match the increased lobster availability. As an industry we have not capitalized on a luxury product and collectively concentrated on increasing demand for safe, quality and sustainable proteins. We have a great selling point in promoting the independent harvester image supplying this seafood to the world as technology and traceability programs improve. For the past couple of years the FFAW harvesters have been involved in a traceability project which kind of promotes that image and food security issues. It is called Thisfish. I will not go into the details here but that is certainly one good option to increase value for the lobster business.

It has to be multifaceted. There are a lot of different things we can do to increase the value and the concentration should be on increasing the value for everybody in the industry, and not just playing tug-of-war and fighting over our share of it. This is where the Lobster Council of Canada can contribute. I am on the board of directors for Newfoundland. It has made some good strides in the first few years that it has been here in building trust, getting all sectors of the industry around the table and focused on some of these challenges. Right now it may not be easy to see the dividends paying off. Like I said, we are in crisis due to a lot of external factors, in particular. Some of the priorities set out in the realm that it is operating, such as increasing quality and branding initiatives, are important. The Lobster Council of Canada has brought support of industry and governments. Now we need to enhance that support, if at all possible, to get us to the next step where all can work on the past year's building blocks and turn that goodwill and hard work into dividends for all of our industry.

The Chair: Thank you, Mr. Sullivan.


O'Neil Cloutier, Vice-President, Alliance des pêcheurs professionnels du Québec: Mr. Chair, I will be making two presentations this afternoon, one concerning our Quebec provincial organization, which includes the Magdalen Islands and Gaspe, and another, on behalf of my organization: a regional organization that I represent as director general.

My name is O'Neil Cloutier. I am a professional fisherman, and also work all year round as a fishermen's representative, paid to work for them. Today, I would like to tell you about several problems in the lobster fishery, as well as about three problems we foresee and which are in my opinion, major issues that present certain dangers, the full force of which we will feel over the coming years.

The first problem is the huge distortion caused by the Department of Fisheries and Oceans of Canada with respect to each province that exports lobster; there are totally different regulations from one province to another, and this creates a glut in the market. We will come back to that in a little while.

The second problem is the new reform of the employment insurance program which, once again, hits coastal fishing activities very hard, including lobster fishing, and therefore sustainability.

And the third problem is the monitoring being done by Fisheries and Oceans, which is linked to its wish to modernize fishing in Canada by abolishing the two underlying principles of fishing over the last 30 years: the owner- operator and fleet separation, which are closely related to a lack of monitoring by the Department of Fisheries and Oceans or to a lack of willingness to apply the same regulations in each province. We will be able to provide you with an example of this.

As to the lobster crisis, to return to the initial issue, you will understand that currently, the lobster crisis is essentially due to a problem of oversupply in the market, which itself is due to Fisheries and Oceans' inability to enact the same conservation rules in each of the provinces. Here is an example. In Baie-des-Chaleurs in Gaspe and in the Magdalen Islands, we adopted a new approach as requested. We adopted a sustainable approach at a time when the FRCC had developed toolkits, in 1997 and in 2007, which it asked us to look at, to have a sustainable development vision for the lobster fishery because they felt there were enormous pressures on the lobster fisheries across Atlantic Canada. Fishers in the province of Quebec adopted this new approach, made it into a work plan using elements contained in that document in order to change our own fishing behaviour and our vision of the future of the fishery. So, over several years, we worked very hard to ensure that the lobster fishery would last and be practised in a sustainable manner.

At the same time, certain provinces — and please understand I am not trying to inflame passions — either completely or almost completely ignored the will expressed at that time by FRCC to move forward together across all the Atlantic, which means that today, all this has led directly to the current glut in the market in which two kinds of products are being offered. Unlike my friend Ian who thinks very highly of small lobsters and thinks consumers love them so much, it is my opinion that small lobsters are currently driving lobster prices down, whereas in many regions, including ours and in the Magdalen Islands in Quebec, we are working hard to increase the price of lobster, to drive the price of lobster upwards with high-quality lobster.

It is quite simple to see how the market perceives all of this. When small lobsters are being sold by large distributors, and big-box stores, it destroys all the efforts we have made to obtain a decent price for quality lobster. We see that in the Montreal market, which, by the way, is also the second largest market after Boston. It is Montreal after all, and that is our market. While our wholesalers are trying to sell good quality lobster of over 82 millimetres to the Montreal market, the Metros and IGAs and Sobeys, who buy their product in the Maritimes, are offering up lobster at $4.88. One sees clearly that there is a game afoot, and the game is drawing people into the stores, it is "I will give you more lobster, you will have more lobster. They are smaller, but you can have two instead of one." When you are a consumer, that is what you look at, especially if you do not have a lot of money or if you have less money. How can I offer lobster to my family and make sure everyone gets to eat at least one? Those practices really hurt us.

In Baie-des-Chaleurs, we worked very hard with our New Brunswick colleagues to help them understand this vision of things: you must understand that only 20 or 30 kilometres separate the north shore and the south shore, and we wanted them to understand that our lobster was 82 millimetres long whereas theirs was 70 millimetres. Luckily, they went up to 76. They understood. I think those fishermen today, in this Baie-des-Chaleurs on the New Brunswick side, in my opinion, and I am speaking as a fisherman, are very happy about having made the move. So, if people could just understand that reducing the supply in the market would give us a few years to stabilize supply and demand, it could greatly help us across the entire Maritimes. It is not such a great sacrifice, given the high volumes we catch in those regions.

The second problem is employment insurance. As you know, the Senate adopted an amendment, a new employment insurance act which will have terrible consequences on lobster fishing in the whole Atlantic region because of the seasonal nature of that fishery, and because of the parallel fact that the Canadian government is requiring longer periods of work for each sector of activity. The Canadian government has forgotten that 20 years ago, 15 years ago, 25 years ago, it took away the only tool we had to guarantee that we could spend more time out working on the water during the year, which is the tool of versatility. They took away our versatility and created specialized fishermen for certain fisheries, and now we are being told "you don't work long enough."

What we want to tell this government, and we have begun to, and you have seen some protests on that issue, is: "if you want us to work longer, let's go back to the model we used to use in fisheries in the past, to a greater period of activity over periods of at least six months a year." The government is going to have to think about it, otherwise, it is going to strip all of our know-how from the fisheries. We were told that owner-operators would not be affected, that fishers would not be affected. We were not told that fisher helpers would not be affected for example, and fisher helpers are the know-how of our industry. They are the future of our industry. Right now, those fisher helpers are forced to find an employer who is willing to sign a little piece of paper, three times a week, and charge them $15, because they will not do it for free anymore. Regional employers are sick of signing these papers, given our high numbers, to demonstrate that workers are searching for employment. These fisher helpers are becoming increasingly annoyed with the system, and they will go elsewhere to find jobs after being treated that way, they may even go up north, to work in large-scale projects because there is no lack of those as you know, in Quebec and in Alberta, and those people will disappear, and with them, our future will disappear and our know-how will vanish.

I think the Canadian government is making a huge mistake. I am counting on you, the senators, because you are also legislators, to try to call a certain MP or minister to order, because they are really making a mistake in burdening all the Maritime provinces with this problem in addition to the ones we already have. I think they should take a look at what they are doing because right now they do not know what they are doing.

The third problem I would like to discuss is this attempt by the federal government, by the Minister of Fisheries once again a few years ago, to modernize the fishery by sacrificing two principles, that is owner-operator and fleet separation. That is a war, a battle in which we won the first round, which meant that the federal government backed down on those two principles and decided to suspend its decision to abolish them.

I would like to raise a problem that underlies this desire by the government and that is the controlling agreements. In Quebec — and do not be surprized by this — the Minister of Fisheries and Mr. Ashfield, the federal Minister of Fisheries, have in their hands the controlling agreements. In Quebec, these agreements are controlled. It is not our fault if they are not controlled by the Minister of Fisheries and Oceans in the other provinces. In Quebec, the law removed three permits from a fisherman who controlled them. He was fined $145,000 last September and the controlling agreement was dismantled. So if this can be done in Quebec, why can it not be done in the Maritimes? Do not give us this baloney. The problem is not the owner-operator and fleet separation: the problem is the lax attitude of Fisheries and Oceans that does not know how to manage the fishery in Canada. That is the problem. Quebec demonstrated that there was a lax attitude because it recognized that Mr. Hearne's 2007 legislation did exist, had teeth and could be used. Let them use it to solve problems in the Maritimes, in Nova Scotia among others, these controlling agreement problems that are undermining fisheries in Atlantic Canada. That is something extremely serious.

If I am here today, it is to tell you this. What is being done is very serious. The government is destroying the image of Canadian fisheries while bragging all around the world that they are good managers. I find that cheap. I am sorry, really cheap. That is what I have to say for now.


The Chair: Thank you, Mr. Cloutier.

Mr. Brun?


Mr. Christian Brun, Executive Secretary, Maritime Fishermen's Union: My name is Christian Brun, and I am the Executive Secretary of the Maritime Fishermen's Union. Just to put things in perspective, I would like to point out that the Maritime Fishermen's Union has a membership of about 1,300 in New Brunswick and Nova Scotia. Our members are involved mainly in a multispecies fishery, and therefore mainly harvest lobster and also fish for herring, scallops, halibut, et cetera. It is often said that the lobster-harvesting industry is fragmented. In the past few years, we have made a great effort to try to find ways to rally. We did so recently and for the past few years we worked with the Canadian Lobster Council. Mr. Sullivan mentioned that. So we are also part of this organization which seeks mainly to bring together fishermen's associations as well as buyers and processing plants in Atlantic Canada so that they can work on quality and promoting lobster.

There is also another movement, one which Mr. Sullivan referred to earlier, and that is the Canadian Independent Fish Harvesters' Movement, which oversees 36 fishing associations in the Atlantic in order to lead the reforms in conjunction with, as Mr. Cloutier was saying, the independence of fishing and harvesting businesses.

I could perhaps begin by adding to what Mr. Sullivan and Mr. Cloutier had to say about the issue of the owner- operator policy, namely, the independence of the harvesting sector in the Atlantic region. I could talk to you about this subject to great length. I think that we are here today primarily to discuss the lobster sector, but this policy is so crucial for the lobster fishery, which is the main fishery in the Atlantic. I would like to mention that I caught wind that discussions were held earlier this week between Mr. Gardner and one of the senators who was part of your committee.

In a nutshell, I would simply like to say that this owner-operator policy, fleet separation, has surfaced three times already in the past 10 years and has been debated to great length. We have already spent too much energy discussing this topic. Now we need to focus on reforms to ensure that the fundamentals of this policy move ahead. In other words, what we are saying, and what the 36 organizations that are part of this movement are saying, is that enough is enough. We want to build on this foundation and we have already talked about this. We have had this debate. There are things that we can do, building on this, which will improve the situation for all of the players in our industry, including the people in the industrial sector.

We also feel that our approach could lead to tremendous opportunities, but we are not looking for them. We are too busy, being at loggerheads amongst ourselves. We have marketing opportunities for these smaller fleets that have a story to tell which consumers like. So, in our opinion, we have to find ways to tell this story, convey it to the consumer to improve our situation, and also look at ways to streamline the process so that we can all help improve profitability for everyone. I am in complete agreement with the deadline of 2014, and with this policy being implemented. It is essential that we respect this deadline.

As for the lobster fishery, we have 10,000 fishermen in Atlantic Canada, who create 30,000 jobs. The fishery creates the largest number of private sector jobs in Atlantic Canada and, for many of our communities, it is the primary economic driver. And when I tell you this, I am not making this all up. I am telling you that, for the residents in these towns — some of them are here today — Petit-Rocher, Inkerman, Miscou, Néguac, Pointe-Sapin, Richibouctou, Cormier-Ville, Cap-Pelé, Shemogue, Murray Corner, Pictou, Debec, Pointe-à-l'Église, Meteghan, they are just like the people who live in the large economic centres, they just want to earn a living. They simply want to enable their children to fulfil their potential. This is the same thing that everybody wants, but the economic drivers for these people are limited, and the fishery is the main economic driver. So I would suggest that you keep this aspect in mind. This is very important for everything else, particularly with respect to the lobster fishery, which is the most important for most of these people.

With respect to lobster, at the outset it is important to understand — because that can create some immediate confusion — that there are two equally important but interdependent sectors targeting different markets. There is the frozen lobster market and the live lobster market, and these are very different from each other. The two sectors offer quality products to meet a varying demand. The frozen food sector accounts for 50 per cent of the Canadian lobster market and, in the opinion of some people, this will grow in the future because the culinary habits of new generations are changing. The frozen sector will grow significantly in importance if we listen to the experts who are looking at future trends. More and more of the lobster caught by our members in New Brunswick, primarily in the United States, account for more than 80 per cent, and this lobster is destined primarily for the restaurants, buffets, large tourism centres, et cetera. Sixty per cent of processed lobster sales, primarily in New Brunswick, are sold as lobster tails and the rest as lobster meat and whole lobsters.

You have no doubt heard that there have been many recent problems in the lobster fishery, including the latest problem that occurred this summer in the south-east region of New Brunswick. In our opinion, the following factors are without question the reason why we are experiencing these problems now. Since the 1970s, lobster landings have tripled in Canada, and since 1985, lobster landings in the United States have quadrupled, the result being that more than 250 million pounds were caught in 2011, divided more or less equally between the United States and Canada, with each country catching approximately 125 million pounds, which was truly a record level. As others have mentioned, this explains a large part of the problem. It should be noted that in 2011, of these 125 million pounds of lobster processed or produced in Canada, more than half, more than 70 million pounds, were processed in New Brunswick. The Canadian business model is now based on a currency exchange rate that is standing at parity. We all know this. We know that the business plan, particularly for the lobster fishery and others as well, has changed over the past few years.

On the marketing side, one of the largest American buyers of frozen products, Darden Restaurants, which owns Red Lobster, recently made a major change with respect to its procurements. It no longer purchases lobster tails under four ounces, which, according to the processing plants, means a lobster the size of about 77 millimetres. The minimum size of lobster harvested in most of the Gulf regions will be, in 2013, about 72 millimetres, which would give a lobster tail of about two to three ounces. In my opinion, this decision is one of the main reasons for the crisis we experienced this fall, and it is important to bear this in mind. In our opinion, this change is what really upset things.

On the processing side, we have a serious problem because the Canadian processing sector is too fragmented. It does not have the same weight as the American markets and those that bring the lobster product to the American market. Our local processing sector is not strong enough to be able to negotiate prices that reflect the markets.

On the biological side of things, although there may be an abundance of lobster elsewhere, there is one region, in the centre of the Northumberland Strait, which has huge recruitment problems and that is evident from the landings that are significantly lower than what we see throughout the Atlantic region. So although things may appear to be going well in the Atlantic, there are still regions where the situation is not very good. The problem is that we cannot explain why. This problem is becoming serious, and in our opinion, we should be making more investments to understand what is going on in this particular region. We do not know if this situation will spread to the rest of the Atlantic, we do not know if this is something temporary, which will disappear. We have no answers to these questions. In our opinion, this is very dangerous.

It should also be noted that, according to the biologists, according to the FRCC reports published in 1987 and 2007, a significant increase in minimum size means that it would be wise, in order to improve the biological chances of lobster recruitment, particularly in these regions, to increase the minimum size of the lobster significantly.

I would like to say something about harvesting. For the Gulf region in particular, which is experiencing these problems, particularly in the centre of the Strait, since the entire Gulf has a smaller minimum size, and therefore a smaller lobster, this whole issue of increasing the size is an excellent investment for the lobster fisherman. This is what we have gleaned from certain studies, and several fishermen have been saying this as well. For a small group of fishermen, the efforts have led to an improvement in size. This provides threefold benefits to the harvester. Not just an advantage for a few fishermen, and their outlooks. They are saying that the small-sized lobsters that are thrown back into the water will be harvested the next year and weigh 40 per cent more: they will grow after they moult, when they change their lobster shell, up to 15 millimetres in size. The percentage of large lobsters will rise, leading to better sales opportunities.

Secondly, a greater knowledge of the biology of the lobster leads to better catch stability, and therefore we will have a better chance of having high quality, more resistant eggs which in turn leads to a greater chance of the lobster improving its biology.

The third point, the third benefit, is that this change also complies with the wishes of the markets in general. For the past few years, the markets have been saying, because of the change made at Red Lobster and elsewhere, that the minimum size must be increased to meet their needs. The market is asking for this. In addition, New Brunswick and Prince Edward Island, with its smaller-sized lobsters, are not really able to compete with the lobster from other provinces, such as Nova Scotia, and from Maine. So we have to come up with a way to be competitive in order to have a similar product. Unfortunately, efforts made over the past 10 years to increase this minimum size, to try to improve the situation of the fishermen and the biology and to meet the needs of the market, have been curtailed by the fishing fleets from other provinces and by a succession of federal fisheries ministers who, over the years, have elected to protect these interests, interests in keeping niche markets, instead of taking the overall view, instead of keeping in mind all of the fishermen, and this situation makes it very difficult for us to adapt to the market as well.

In our opinion, now more than ever is the time to act so that the Gulf region will not see a repeat of the crisis we went through in the summer of 2012, because we find ourselves in a situation where we can meet the needs of the market, improve market biology, improve the biology for the regions that are in a critical state and then improve profitability for fishermen at the same time. That is our theory and we know that there is no magic solution, but it is a factor for change in our opinion, one of the only ones that we control, one of the only ones where the harvest can make a difference and that is the one that we recommend.


The Chair: Thank you. That is a large amount of information. We will go right to questions, beginning with Senator Hubley.

Senator Hubley: I welcome you all today. It is nice to see the room full.

I am going to speak about the carapace size because that has come up a number of times and in a number of ways. In speaking about 71 millimetres to 72 millimetres how much is that in weight generally?

Audience Member: Point seven-five of one pound.

Senator Hubley: Three quarters of a pound.

In my knowledge of lobster, there are canners and there are markets and that depended on the carapace size, but when I see it broken down into a different measurement then I am a little bit confused. If I knew what I was speaking about as far as the size of a canner it might help and the minimum weight of a market.


Mr. Cloutier: In fact, madam, a 76-millimetre lobster corresponds to a three-quarter pounder. An 82-millimetre lobster corresponds to 0.95 lb., almost a pound, and a 72-millimetre lobster corresponds to 0.60 lb., so almost a half-pound.

Senator Poirier: Could you repeat the last one, please?

Mr. Cloutier: The size?

Senator Poirier: No, the 76-millimetre one.

Mr. Cloutier: 76 millimetres, three quarters of a pound, 0.75.

Senator Poirier: Yes, but what was it in millimetres?

Mr. Cloutier: Seventy-six millimetres.

Senator Poirier: Seventy-six.

Mr. Cloutier: Yes, 82 millimetres is 0.95 of a pound, and 72 millimetres is close to 0.60, a half-pound. These lobsters, when they moult, gain 40 per cent of their weight, so if we allow this category of lobsters to change their carapace, that is to say if we leave them for an extra year in the water, they will gain 40 per cent in weight, therefore they will fall into the category of lobsters over three quarters of a pound.


Senator Hubley: Which one? Three quarters of a pound, yes.


Mr. Cloutier: I do not want to be drawn into a war of words, but we know the Quebec market well. We come from Quebec, so it does not really bother me when the other provinces want to fish lobster of one size or another, but what I am saying is that if they want to do so, keep it at home. Do not come and hamper my market when I am making efforts, I am obliged to make efforts because the government requires my doing so, so do not come and clog my market, and compete with the price of our good lobster, our quality lobster on our market. Keep it at home. I have no problem with that. But that is not how things happen in real life, because there are no borders at the market level in Canada. You know that. There is no big boundary. The market is open. It is free trade. But this lobster ends up in Montreal on our spring markets just at the time that we are starting to fish. It is competing with, it offers — and I would even go a step further — it offers the big retailers the possibility of reducing the price of lobster in general with the help of the small live lobster.

If they want to can them, they should go ahead and do so, but do not allow them to come onto the market in Quebec for example, because if that happens, Quebeckers will be obliged to ask our province to adopt stricter measures, market protection measures because we are going bankrupt as a result of this.

There is one thing you have to understand. In Quebec, in my region, our fishermen land 12,000 lbs. per year on average. So 12,000 lbs. per year fished at $6 a pound as it used to be, we could get by on. But at $4.50, that just prevents us from being viable and the big distributors use the small lobster to reach their objective of reducing the market price. If you want to know if that is true or not, look at the value chain committee. There was a report in November 2011 where the members of this committee were saying that the price of all commodities in Canada absolutely had to be reduced, therefore, I am sorry, but lobster is also a commodity. That is where it hurt us, and that is what we do not agree with. We should have a single vision, that of ensuring that they do not toy with us, and the way in which the large stores toy with us is by using the small lobster. I am sorry, but that is the truth.


Senator Hubley: Thank you. My question has to do with the different sizes in lobsters, market demands, what the consumer wants, at a time when we are looking at changing eating habits, certainly different styles of cooking, and the aggressive or non-aggressive market that goes behind your product.

The first problem that I have is that I am not sure that a canner describes that particular type of animal, that small lobster, nor am I sure that market is going to be well known in the public as being that larger one. Certainly it is here in the Maritimes. There have been many species of fish where they have enhanced its marketability by identifying perhaps a more favourable name to them. That is going to be important to marketing.

There are very few commodities out there that you cannot get in many different sizes and shapes and prepared in many different ways. It is incumbent upon the industry to try to address those, not one, maybe not two, but maybe look at all the possibilities within the marketing framework to decide where your size and shape of lobster is going to find the best market niche.

Is the present carapace size the same throughout 24, 25 and 26?

Mr. Sullivan: Yes, in Prince Edward Island.

Senator Hubley: Yes, and on Prince Edward Island we would like to maintain that smaller lobster to fulfill the markets that we have identified over the years. Although you are using a different size lobster — you may be using it for a different reason or for a different product — is it not possible for both of you to be successful?

Mike McGeoghegan, Prince Edward Island Fishermen's Association: Absolutely.

Of course, there is market diversification. Our market model in Prince Edward Island is totally different than the mainland and the Maggies in Quebec. We have no problem selling this fish at this size we have right now. That is the market model that we are working with. It is sustainable. The fishery is sustainable on Prince Edward Island. Why would we jump into the same marketplace as them? The competition is going to be a whole lot tougher. Right now we have our own diversification within the lobsters.

Talking about sizes it all depends on what area you fish in. Our 71 millimetre canner lobsters in the Northumberland Strait actually way three-quarters of a pound to a pound. It all depends on the area when you are talking about millimetres because the meat content inside is totally different. Every district is different when you are dealing with meat content.

Senator Hubley: Would you like to comment as well?


Mr. Cloutier: Today, given that the American market has changed over the last four or five years because of the depreciation of the American dollar, 90 per cent of our lobsters, perhaps 100 per cent of our lobsters are consumed by the Quebec market. There is perhaps a group that buys some, a New Brunswick group called Pier 99, a company that buys Prince Edward Island lobster from an anglophone group, and I am not sure where they ship them, but I know that a portion of their lobsters go to the Montreal market as well. But I would say that 90 per cent of Quebec lobster is bought on the Quebec market, and we land approximately 8 million pounds per year, the Magdalen Islands and Gaspe combined, with approximately 600 fishermen.


The Chair: As a point of clarification, I understand your frustration. How much lobster is caught in Quebec and shipped elsewhere, percentage-wise?


Mr. Brun: If I may, Mr. Chairman, I would like to make a comment.

We have a region where I would say we have the majority, a high percentage of the difficulties and problems, and that is the centre of the Strait, area 25, which is in fact the area where there was a recent crisis last summer. This area has a small span of water, and so the space available for the fishery is not very big. Therefore, there is a tradition which developed over the years where fishermen from that particular area would fish throughout the area and therefore along the shores of both provinces, both New Brunswick and Prince Edward Island.

There are also a few Nova Scotia fishermen, a very small number. Therefore, for a group in this area that has a different market or that is operating with a different business plan, if one province decides to increase the minimum size, the lobsters that are left in the water are obviously fished by the fishermen of the neighbouring province or of the other area, who will land those lobsters, and that is of no benefit to the environment or to conservation, to lobster biology. In other words, these lobsters will be left by one group of fishermen and will be recuperated by the other during the same season. That is what is happening, and that is what often creates an impasse between the two groups. It has happened over the past few years that fishermen did not accept to make changes that would have benefited the other group, and so they did not benefit from the change themselves, you see.

I would like to mention another point that is also important. Regarding New Brunswick processors, that is the New Brunswick processing sector, when people say that the two sectors are separate in Prince Edward Island and in New Brunswick, that is not quite true because 50 per cent of the lobster from Prince Edward Island is in fact processed in New Brunswick processing plants. Therefore, for fishermen to say that the minimum size for lobster will be increased and then, to have them be impacted by allowing other fishermen to land them is unfair. Some fishermen said "no, we did not want to follow, we did not want to increase the size, but we are going to send lobster to be processed in the province where the fishermen made the effort to make that change", and that is unfair. It is unacceptable for the fishermen to bow to that and manage to make a change that seems to be necessary. In any case, for the New Brunswick business plan, it is necessary because the markets have changed.


The Chair: Do you want to answer?


Reginald Comeau, Regional coordinator, Maritime Fishermen's Union: I think that it is difficult for fishermen from outside the area, whether it be New Brunswick or Nova Scotia, to force other fishermen to adopt different fishing practices, for example increasing the size of the catch. From the moment that fishermen and myself in area 24, for example, in Prince Edward Island, who are the only ones to engage in fishing in management area 24, fish for lobster that in their opinion is worth a given price and for which there is a market that does not affect markets for others, provided that the lobster be processed by island processors and marketed by island industries, personally I find it difficult to see how one could oppose the request of the island fishermen. On the other hand, when a territory is shared such as area 25, that is altogether another story.

We saw last summer, and I believe this is perhaps one of the reasons why you are here this afternoon, that there was a crisis that might have been the last straw and become really serious, with great consequences for our trade with the United States. The fact that we were fishing a small lobster that was not commanding the same prices, and was more difficult to process than a Maine lobster, at ridiculously low prices or under $2, there is a word for that but I will not say it. Everyone knows what it is. There were huge shipments from Maine for almost nothing, and the New Brunswick industries wanted at all costs to process this lobster because it cost them almost nothing, and we were obliged to compete with that. We were fishing for ridiculously low prices, and we will fish for laughable prices again next summer if nothing is done to try and change that. How can we change that? Perhaps by being as competitive as the Maine fishermen, but I strongly doubt that we can manage it. I think it may be something that the Senate committee could look at, given that you made the effort to come down and see us in the Maritimes; perhaps you could look at how trade happens between Maine and New Brunswick, for example, Maine and the Maritimes and Quebec.

Are supply and demand working properly, is there healthy competition? You would be kidding yourself if you thought we could be competitive with our small lobster in New Brunswick's Northumberland Straight, given what is currently going on in the large scale landings in Maine, the huge landings. New Brunswick may have processed some 70 million pounds of lobster in 2011, and maybe more in 2012, and half of that came from Maine, half of the landings. That is the competition we are stuck with. Harvesters in Maine may have been paid $1.80 per pound or $2 per pound, we do not know. Apparently, those were the prices.

That may be the main problem. There is no end in sight, but we are going to get together and tell harvesters in New Brunswick and in Prince Edward Island, who fish in the Northumberland Straight, that they have a much bigger challenge than harvesters in area 24 or area 26 of Prince Edward Island.

In the Northumberland Straight, we can anticipate some other problems if this one isn't solved. People in New Brunswick are saying that the thing to do is to increase the carapace to give conversion a chance and to be able to compete on an equal footing with people in Maine. People in PEI do not agree, but I am told that 50 per cent of the lobster processed from PEI catches goes to New Brunswick, so I do not know. I do not really have the numbers.

Is it true? One thing is for sure. In the Northumberland Straight, the status quo cannot be maintained, so changes are going to have to be made, progressive changes, otherwise, I think the game is not over.


The Chair: Mr. MacPherson, do you want to comment? We want to hear from you but we have two other panels so I ask that we try to keep our questions and answers as succinct as possible.

Mr. MacPherson: I will be brief. Mr. Brun touched on the challenge certainly in North America of record catches and that is a whole different discussion and a very complex one. One thing that has not been mentioned today that is really critical is that we are too dependent on one market in Atlantic Canada. Certainly a lot of our problems started when the U.S. economy slowed significantly. It is a very important market to us. However, I was out in Western Canada when the mad cow disease hit, and the beef industry there went through a very similar point of turmoil. The thinking was that market will never go away; it probably will not slow down very much; the sky is the limit. Then one day it was gone at the snap of a finger. That is part of it. We have to be very cautious in putting more lobster of a similar size into one marketplace that we are probably overexposed in.

Some of our people have had success in developing their markets in other emerging markets in other locations. I just thought I would mention that.

The Chair: That was a good point. Not only with our fishing industry do we have that problem but with oil and many other industries in Canada. We are very dependent on the U.S. market and hopefully through the efforts of everybody we can find those emerging markets.


Senator Poirier: There were some questions about the numbers you gave us on lobster size. I think that some of you did a really good job of summarizing part of the problem. None of us wants to go through another crisis. That is for sure. So I am positive that the harvesters are more interested than anyone else in avoiding another crisis. So we have to look at how we can go about finding solutions to the existing problems.

I think Mr. Comeau talked about that a little bit. First, everyone is going to have to sit down at the table and reach a consensus as Atlantic provinces, all helping one another. Right away, we hear presentations like the ones we just heard this morning. We have already heard that apparently in PEI there is quite a substantial market for canner lobster. And in New Brunswick, they apparently want to increase size to meet the demand here in New Brunswick. My first question is: why is the demand different when we are so close? I do not know who can give me an answer.

Mr. Brun: I can try to answer that. The processing industry has evolved differently in PEI and New Brunswick. About 10 years ago, the industry in New Brunswick got rid of certain products and focused on lobster tails, which restaurants like Red Lobster are interested in, as I said before. They produce more lobster meat. They also produce other products, but less of them. Instead, they have diversified their various types of products, whereas in New Brunswick, they have instead focused on what are called whole cooks, i.e. cooked lobster, sold in a can, or popsicles, which are lobsters in a block of ice that are exported like that. So each province seems to have a different marketing strategy, but harvesters in both provinces share the same waterways, and to suggest a division of those waterways is practically impossible because there is not enough room in the straight. When you look at a map, you can see that the space between New Brunswick and PEI is quite small. We have wound up with two different marketing strategies in our industry, and our harvesters are caught in the middle.

Senator Poirier: Knowing that we have this problem, are any discussions being held with the industry to see whether we can diversify our market a bit more in both provinces or should we be trying to achieve more of a consensus on lobster size?

Mr. Brun: I would say we are doing a decent job of it. I think our colleagues from P.E.I., Quebec and Newfoundland have all managed to work together to improve the promotion of lobster. We belong to an organization. We are all at the table. We work together a lot on issues we can agree on. There are always some points we cannot agree on, and size is one of them, but we are making a big effort with emerging countries, like China, where sales have been almost doubling every year over the past few years. Huge efforts have been made over the past four to five years to develop the market in China. I believe governments have also been working to reduce tariffs in Europe. These are all things that will help, but in the longer term. What happens is that we find ourselves currently in a short-term crisis with no solution within our control as harvesters or as a harvesting industry other than what we have proposed, and there is a deadlock over that, and there are two groups or various groups that appear to see things differently.


The Chair: Mr. MacPherson wanted to make a comment.

Mr. MacPherson: Senator Poirier, two weeks ago we had a meeting with all stakeholders to discuss the LFA 25 situation from last fall — fishing groups, processors, harvesters and the provinces. We had a one-day brainstorming session to get ideas out. A lot of information was exchanged, which is good because typically we do not have a format for those groups to sit down.

I am disappointed to report that at the end of the meeting both the Province of New Brunswick and the New Brunswick processors did not feel that there was a sufficient value from that exchange to hold another meeting. We just got the documents for that session and we are going through them. I just think that as an industry with significant problems we need to deal with to expect that we could solve them in one day is incredibly arrogant and very disappointing. I just wanted to update you on that.


Mr. Cloutier: You mentioned that there were two markets, why there are two markets — I do not necessarily believe that theory — and you said it is because there are two types of supply. That does not necessarily mean there are two types of demand. In Quebec, in the Gaspe region, I head up a group with a three-year budget to find markets for live lobster abroad, so for the past two years, we have been working on France, Spain, Italy and China. We are going to add Brazil next year, for industrial harvesters and marketing. What people are asking us for in those markets, and I have done a number of trips, is just high-quality lobster. We are talking about 84-millimetre lobster. In general, there is no demand for small lobster, they want 84-millimetre lobster. The supplier or company with the most expertise, if you will, in the Atlantic, in the Gulf, outside the Gulf, is Clearwater, and Clearwater, in my opinion, is not in a small lobster producing area. In Southwestern Nova Scotia, and we are talking about 84-millimetre size here, they are the ones with the greatest expertise. They say so in China and elsewhere. Clearwater sells a lot of live lobster if it sells any at all. And it does not sell any lobster under 84 millimetres. And that is the problem. And when you look at top quality — there is always a top quality for better factory yield — they are not going to use a big lobster, a two- or three-pound lobster, to produce meat. It is not profitable because the carapace is too heavy, so it is not economically advantageous to process a big, heavy lobster. You use a standard size lobster, and the standard size lobster I am familiar with, and the one that is most often used, is the one pound or one-and-a-quarter-pound lobster. It is the same for small lobster. Some think processing small lobster is extremely profitable, but it is just the same price-quality ratio. There is a distortion there too, and I am no expert in the industry, but I am an observer. I have been working in this field for 34 years. I think there may be a false problem: the problem is that we are not all after the same size. We understand that there are reasons for wanting to harvest lobster because it is available in large quantities, but that creates problems for the other regions.

Senator Poirier: In the presentation by Mr. Keith Sullivan, he referred to the Independent Fish Harvesters' Movement, and Mr. Brun referred to the Canadian Fish Harvesters' Movement, which is made up of 36 organizations.

How long has this group been in existence? Is it something new, and if so, has the process begun? What kind of results can the group produce? Are there harvester representatives or any actual harvesters in the group, at the table?

The provincial minister from New Brunswick mentioned that if there was one positive thing that came out of this summer's crisis, it was that, at least, everyone came to the table and tried to find solutions, perhaps more than ever, including governments, harvesters and so on. I would just like to have your opinion on that. Is there any movement? Are people working cooperatively to find solutions and where do things stand with that and do we belong to the group you just mentioned?


The Chair: We can queue up that particular question. We need to move on.

Go ahead, Mr. Sullivan.

Mr. Sullivan: I mentioned this group earlier and it came together I guess more officially in 2012. Many of these groups worked together in the past so there is a long history of cooperation. This time there was a particularly big threat to the industry or at least perceived threat, which I think most people would think was real. The most important thing came from this modernization document produced by DFO and how there was so little consultation. People believed that the owner/operators and the fleet separation policies in particular were in jeopardy, and the harvesters did not seem to have much opportunity for real consultation. These legitimate organizations that represent many independent core fish harvesters were not getting fair and proper consultation in their view and there seemed to be a serious threat to that. They were forced to unite to show their solidarity on this issue, but from that there came an opportunity. It is a very effective way to communicate to people to show that you have got most of the independent harvesters in Canada, Atlantic Canada in particular, on one side.

I would say the first result would probably be the announcement that Minister Ashfield made saying that those two policies are not in jeopardy. That is one tangible result to date. I would hope that there are many more. Like I mentioned, that group will be working hard, I am sure, to ensure that there is no change to the date or any moving around of the rules that were associated with Minister Hearn's announcement back in 2007 when he gave the deadline for the ending of controlling agreements.

There will be many other issues that we can work together on. Hopefully that vehicle can be used a lot in the next little while.

The Chair: I am going to allow one more person to answer.


Mr. Comeau: I do not believe, Senator Poirier, that these movements, which may improve the atmosphere for the lobster fishery and perhaps even improve the fishery itself in the future, can do anything about this summer's crisis. This summer's crisis was due to the fact that there were several harvesters on the east coast of New Brunswick, in your part of the country, who were told by processors that they could not buy their lobster this summer. They could not buy it because there was no market for small tails, but there were extraordinary landings coming in from Maine. The plants were working at full capacity, and this was happening in the month of July, and the harvesting could not start until the month of August. They simply said "we have too much lobster. We cannot take your lobster." That was what the problem was. There is nobody who wants to talk about it. I know that it is not that easy to control. We cannot prevent free trade. We cannot stop trucks from coming here from Maine. We sell 80 to 85 to 90 per cent of the lobster we process to Maine. We sell it to the United States. We know all that. But, as long as we cannot get our acts together, as long as we keep squabbling in the Northumberland Strait, I think we run the risk of having other problems. The problem is not going to change overnight if attitudes do not change, if the government does not understand that attitudes need to change; but in order to change attitudes, steps have to be taken. We are talking about lobster size, about promoting quality. Until we do that, we are going to have the same problems, because there is no way harvesters in Maine are going to stop harvesting just to make us happy.


Senator McInnis: This is a good segue into the comment I was going to make because sometimes when there is not compromise there is regulation.

We heard this morning from the ministers from P.E.I. and New Brunswick on the size of the lobster and there was no agreement. This committee, at the end of the day, will write a report and quite often Fisheries and Oceans Canada will listen to us. This is an opportunity for you to make some reasonable compromises and reasonable recommendations. Today we have heard debate, discussion on the size of the lobster, particularly in LFA 25. We have heard problems with the possibility of certification. We hear the Lobster Council of Canada talking about a branding with the three pillars of quality, price and, of course, the brand. We hear problems of markets, problems with price, problems with exploitation, market interference vis-à-vis perhaps with the U.S., over capacity, and DFO involvement.

This is a suggestion: If it were me, I would be putting together a critical path as to what your most important challenges are in the lobster industry. Then this committee will do the best we can to put the recommendations forth to those in the decision making role. Not all the time do solutions have to emanate from government. They can emanate from compromise amongst you.

Your presentations here this afternoon have been compelling. I listened with attention but not once on one particular issue did I hear a whimper of any form of compromise. I heard that there were meetings and then there was the suggestion that the meetings should not go any further because it was felt fruitless.

This is not a lecture; it is just a suggestion. I come from rural Nova Scotia and I can tell you when the ground fishery fell off and almost died, but for the lobster industry I do not know where we would be in the small towns throughout Atlantic Canada, and so it is important. It is a very important product and it is a very important industry so all of us have to work together for solutions. We will make a report to the Senate and then to the Department of Fisheries hopefully, and this is your golden opportunity.

Finally, I simply want to ask you this question because I think one of the panaceas with respect to marketing might be the Lobster Council of Canada. It is my understanding when we had them before us a week or so ago that not all of the lobster fishing areas belong to that organization. It strikes me that if you really want to get into the Asia market, which apparently is quite important, it would be important to harness your wagon to that horse to get into those markets, and you will be working in tandem with a group that hopefully will have all of you together on one team marketing your product. That is just a suggestion. You do not have to respond.

I know time is of restraint here, but please understand this business in which you are engaged. The Senate as a body is not adversarial. It is one that can bring about solutions, and we work very well — and there are all kinds of precedents — in bringing about recommendations to those who make the decisions. We can only do that predicated on evidence we get from you, so please understand that.

Mr. MacPherson: I just wanted to touch on two points very briefly.

Since the Senate committee has met with the Lobster Council of Canada there was a small working group put together to kind of clarify that path and it was unanimous in that group that we should focus on quality first. That is, I think, the direction you will see the council going, focus on quality and then branding and price will naturally follow suit. However, until we have clear guidelines that resonate with all sectors, and that is going to be a real challenge, that is going to be the focus.

The other thing was in reference to the meetings several weeks ago with the provinces and the other stakeholder groups, I did suggest that we would like to see third party facilitation. Take DFO, have them as a resource around the table, but we did not feel that was an appropriate venue. The other groups that were there did agree, and I remain optimistic that there will be another meeting and that it will be facilitated by a third party. I think that is the direction of the future.

The Chair: We need quick responses now because we are way over time.


Mr. Brun: Perhaps I could just quickly respond with respect to the meeting and what Senator McInnis said. I think it is important to point out that we have already been talking about these issues in the lobster fishery for around 15 years, and constantly. There has been a lot of effort and discussion and debate over these issues, to try to find compromises, to try to find ways of working together. And we did succeed, after all, with the Canadian Council of Fish Harvesters. We are all working together even if today, we take different positions on size or something else. I would also like to point out that at the meeting that took place a few weeks ago, it was not because we did not want to continue the discussion, it was because in fact, there were no other options available, in my opinion, to improve the situation.

In our opinion, we discussed existing options that can really ensure a change with regard to the situation facing area 25 in particular, and for New Brunswick. Given our situation, if it is not an option, we have been talking about it for 15 years now, We have not been able to find any others in that time, so that is why it is difficult to continue the discussions and to try to find other compromises, when we have already had that discussion for an extremely long time. With regard to the issue of quality, everyone is in agreement. We can improve the quality, and that is a way to improve things in other areas.

Mr. Cloutier: In actual fact, senator, there are different tools by which to control the market. The current problem is an issue with supply and demand. Supply is increasing, volumes in Atlantic Canada are increasing astronomically. They have doubled over the past 12 or 13 years. You were told earlier that the increase in carapace size is a means by which to control supply to some extent, in order to reduce supply so as to stabilize prices. I am not saying that it is a very long-term option; however, it is something we have used in Quebec thinking that everyone in the Maritimes would use it since it was also recommended by the FRCC, and unfortunately, some groups are not doing that. Market demand is such that small lobsters are being pitted against large lobsters, and prices are dropping. That is the problem. People have to confront the issue since they are wondering what they can do to help resolve the problem. We will not resolve this problem with the market, but perhaps, one day, the Americans will come out of this crisis too. We have to get there.


Mr. Sullivan: In response to Senator McInnis' comments, like I said, we could probably touch on a lot of them. I already referenced the Lobster Council of Canada in my opening remarks so I am going to concentrate on one thing. You mentioned that over capacity is a persistent problem, particularly when I talk about the lobster fishery in Newfoundland. There is a program ongoing now but there will be need to transition to continue that in those areas.

I think harvesters have already presented some solutions, but we still need government to listen to those solutions and ensure that there are grassroots workable rather than top down approaches. We also need government to work closely if there is need for regulatory changes and things of this nature, so it is really important. We still need the support of government even though industry promotes solutions. The lobster enterprise retirement program, for example, that is ongoing right now is a good example but we have to transition into that. I still think there is a need for that rationalization and that investment is certainly beneficial for people in the industry and all Canadians, as well.

Mr. McGeoghegan: I agree with Mr. Sullivan on the rationalization that needs to continue.

On the south side of Prince Edward Island we took 33,000 traps off the water through that program, and if we had the money we could do that again, so we can do rationalization to affect the industry.

Fifty per cent of Maine's catch is being processed in Atlantic Canada. That is one of the big problems that we have too coming into the marketplace, which puts huge pressure on Canadian fishermen. Right now, and we probably have to have discussions with Americans on this, but if we had a 15 per cent reduction straight across the board that would take a lot of the pressure off. It would start a war within the fishing community, but we are going to have to come up with some kind of solution, and putting the carapace size up is not one of them.

Everybody needs to just back off realizing that if you are not going to get paid for these fish why bring them in and give them away? That is what we are doing right now. I mean the price is so low for some harvesters in some areas it is just not profitable for them to be fishing. Now they are trying to bring in huge amounts of lobsters in order to try to pay the bills. It would have to be a discussion around the table, more of a shouting match than anything else, but a 15 per cent reduction for all fishermen would be good, and we would have to have Americans online with this too. That would definitely take this so-called crisis out of the area that it is in right now.

Every fisherman would take a 15 per cent reduction in his catch right now. That would stop these huge catches from coming in and the price would go up.

The Chair: Just to make sure we are clear here because it is an important point you are making. —

Mr. McGeoghegan: Absolutely.

The Chair: — we do not operate on ITQs?

Mr. McGeoghegan: No, we are not talking ITQs.

The Chair: No. So you are talking?

Mr. McGeoghegan: Not mandatory but voluntary.

The Chair: If we are not operating on ITQs, how would you base that number?

Mr. McGeoghegan: Well, usually the catches are pretty standard in every area that you are in so 15 per cent of that catch would be down.

The Chair: Are you talking about the area or per fisherman?

Mr. McGeoghegan: Per fisherman. It would be a hot topic.

The Chair: I do not think we are going to get that one straightened out here today.

Mr. McGeoghegan: You asked for solutions; I gave you one.

The Chair: We are open to suggestions.

Mr. McGeoghegan: I did not say they were going to be easy, I just said that was one.

The Chair: Certainly that is why we are here.

I want to thank you all for your presentations today.

We are hoping to present to the Senate sometime in February or March, if all goes well. It may be a bit later than that.

Do not close yourself off today to what you have presented to us here. If you have ideas or suggestions feel free to get them to us in writing. We have competent people around our table who are assisting us in putting this together, but you may have something in the next month or two, meetings that you may be having and there is something that our committee would be able to take forward.

Following up on Senator McInnis' comments, we did a lighthouse study back a little while ago. The government had pretty well made a decision to shut down a lot of lighthouses throughout Canada, mostly in Newfoundland and British Columbia, and we changed the tide on that a little bit. We are not saying we will change the tide on any of those issues but there is no doubt in my mind that our report will be read and listened to. Whether they act upon it, that is somebody else's decision to make, but I certainly welcome the opportunity for any feedback that you think will be positive for the industry.

I would like to now welcome our second panel. We would ask you to speak your piece and then we will have questions for you.

Mr. Knox, lead the way.

Lee Knox, President, Prince County Fisherman's Association (LFA 25 Advisory Board): My name is Lee Knox. I am President of the Prince County Fisherman's Association. I represent the fishermen on P.E.I. on district 25. The crisis in district 25 this year is mainly the reason why we are here. This panel was put in place to look at this problem, and the problem we have right now would not be here if U.S. lobsters did not come in in such abundance as they did in July and August. That is the problem.

We are here trying to change carapace sizes to reflect the price of lobster. If we were all selling market lobsters this summer, price would have been the same because of the U.S. lobster coming in. New Brunswick is pushing a larger canner lobster to accommodate the processors. The processors are asking for it. Lobster stocks in LFA 25 are in real good shape. We met with Science, and they told us when we signed the agreement with them on our rationalization that 72 millimeters would be high enough to take care of the fishing industry. There would be enough recruitment to take care of all our fishery. Catches have gone from 9,000 to 10,000 per boat say six years ago today are 20,000 to 25,000 per boat. So I do not know where Mr. Brun was coming from saying that LFA 25 catches have been dropping because catches have gone from 8,000 to 9,000 per boat to 20,000 to 25,000. So the industry itself is in real good shape.

LFA 25 had a rational plan put in place in 2010 and we borrowed $3 million from provincial government, and the federal government gave us $3 million. Right now, like Mr. Brun said, on their rationalization in New Brunswick, that they are paying their loan off with crab allocation money. P.E.I. fishermen are paying it out of their pocket. Every year we collect $1,000 from each fisherman to pay a $200,000 loan.

The canner lobster is a very important product in P.E.I. As you heard earlier, 60 to 65 per cent comes in. We have plants that thrive on canner lobster. We had one plant that did lobsters this year. For the fall season in P.E.I., for example, one processor did 1 million pounds of lobsters and he only had 0.6 per cent of the catch that could not be used in the processing plant, which is real good.

P.E.I. fishermen work with the processing plants to take care of their lobsters and other parts of LFA 25 did not see the same results, like the plants in New Brunswick, because lack of communication or lack of information that the fishermen bring in quality product. You hear rumours all the time. We heard one rumour that boats were going out in this heat in the summer with three pans of ice at the start of the season, going to fish lobster with one tank aboard, with a tarp at the back of the boat, bringing in lobsters that are hardly fit to be processed. That is where we have got to work with our fishermen to get quality to the plants.

Traditional catch trends. The first three days of the catch is high, and this is upwards of 30 per cent of the start of the season's catch, so it is important for P.E.I. plants that we start the season from Wednesday or Thursday so that a back load of lobsters can be done on a Sunday. We do not fish lobsters on Sunday so the plants can catch up on their product. This year started at the start of the week.

As far as weather and stuff, on the Northumberland Strait we are talking about extending the season. In the past four years fishermen have only been able to fish three days out of the six days of the last week because of high wind storms. As a matter of fact, in 2011 we had to land one week early because of high wind storms that were clocked at 50 knots. Fishermen who left their traps out had them smashed or badly damaged. Probably 30 fishermen out of 215 left their traps out. In 2010, fishermen's lives were put at risk because of another four-day storm at the end of the season. We approached DFO for a one-day extension when the storm was over to land our gear and they would not give it to us. We landed gear in 35 to 40 knot winds, which was dangerous. This wind storm was from the West, so it did not bother the New Brunswick fishermen. The west wind comes off the land over there.

An early August start is better weather, better lobster quality, calmer weather and longer fishing days. We would like to suggest a pilot project for P.E.I. documenting catches and gathering other specific data, such as the number of egg-bearing females. We see a significant increase on the egg-bearing females. The lobsters at the start of the season are in real good shape and we would like Science to see that. We have two co-op plants and they do probably 70 per cent of P.E.I.'s lobster They have been telling us that the last four years the first two weeks of the season produced the best quality lobster. You are getting the lobster before they go into molt and you are getting a lobster with more meat. SCIENCE also agreed with us when we talked this year about going as late as September 1. The plants in New Brunswick wanted to go as late as September. They said that by September 1 probably all the lobsters will have molted, and that the quality of lobster will be significantly worse, and Science agreed with the plants.

An earlier season would work due to the frequent storms in P.E.I. and the lobsters would be caught before their molt and that would give processing plants a better quality lobster. That is why I do not understand the New Brunswick processors wanting a later season when our processors are saying the lobsters are better quality at the start — more meat yield, more profit in the processor's pocket. People always say "Why can you not fish in Northumberland Strait like they do in Southwest Nova?" In Northumberland Strait we have depths, water of 100 feet and major storms can wreck your gear and in Southwest Nova they are fishing in 300 feet of water. It is altogether different. Quality also has been seen to drop at the end of the season.

Another reason against a later start is lobsters, and Nova Scotia people here will probably agree with me on this, start to move out of the Northumberland Strait mid-October, such as they have this year in the central straits. In the last two weeks the catches had dropped significantly and fishermen started landing traps earlier.

Our biggest problem at district 25 this year was quality. The lobster is in good quality when it comes out of the trap. It is what happens to the condition of the lobster from the trap to the processing plant. We need to work at keeping the lobster in good condition until it gets into the plant. We need to keep educating our fishermen and buyers at the wharf for proper handling and storage of lobsters. We need proper tanks on our boats and lots of ice in them to keep them in good condition. If we can get lobsters to the plant in good condition, the biggest part of our problem will be solved.

Marketing and quality recommendations: Something the industry needs to change is its perception of fall lobster from a shredder, soft-shell image. We need to promote our lobster, whole lobster and lobster tails, as being very flavourful and tender. This will reflect in no discount in the marketplace for processed fall product. People say there is a big difference between fall and spring, but the only difference between spring and fall is meat yield, not quality. Quality is just as good in the fall as it is in the spring. Quality measures such as insulated tanks are required. Funding requests are currently being developed to submit to various levels of government. It is critical to establish an industry wide protocol for the proper handling of lobsters.

Peter Boertien, President, Eastern Kings Fisherman's Association (LFA 24 Lobster Advisory Board): Thank you for the opportunity and honour to speak, Mr. Chairman, honourable senators.

I live in Surrey, P.E.I. and I fish from North Lake Harbour. I am speaking today as chairman of Lobster Fish area 24. Our fishing area encompasses the entire north shore of P.E.I. from North Lake Harbour to the east and to west point's closest harbour, Seacow Pond. We represent slightly over 600 fish harvesters. Also amongst us is a number of First Nations fishers who have their own spokesperson, but we regularly work together on issues.

I will now ask my colleague to introduce himself.

Norman Peters, President, North Shore Fisherman's Association (LFA 24 Lobster Advisory Board): I fish on the north shore of Prince Edward Island, about four miles from Cavendish. I am also known as the "Bearded Skipper." I have been fishing for 50 years and I have seen many things. I have attended meetings here in the 1980s and 1990s and the same thing was on the table, carapace size and P.E.I. had to go up.

I would like to say thank you to the committee for being able present.

I am President of North Shore Fisherman's Association representing roughly the 600 fishers of LFA 24. We meet often throughout the year to discuss important issues, both in the area and within the southern gulf. LFA 24 advisory group works closely with other LFA advisories on related issues including promotion and marketing of our product. I would like to review some of the initiatives we have taken in LFA 24 and Mr. Boertien will give you the challenges when I am done.

We have undertaken many management changes which reflect a healthy lobster resource, not only for ourselves but also for our children and grandchildren. Recent changes include two more increases in carapace size. The two I mean is 71, which would go to 72 in 2013 season. This was recommended by the FRCC report to give 50 per cent of the female lobsters another chance to reproduce. We are also using larger escape mechanisms and we are using biodegradable twine to eliminate ghost fishing. We have ongoing certification efforts and continued science and data collection each year.

The LFA lobster quality program through the Atlantic Sustainability Measures Program provides assistance to fishers to enhance quality equipment. Initiatives under this program include insulated tanks, live well systems, Logtek boxes and other quality enhancing equipment for lobster vessels which assist in maintaining cool temperatures and shelter from harsh weather and which will ensure top quality products. Within this program we, area 24, took it upon ourselves, got a little group together and we got some money, federal government money I assume, and we put it out there that we could pay a third back if fishers wanted to buy insulated tanks or whatever. Quite a number took the initiative to do that. Lee Knox's group is going to have to do that, too, to make sure that you have a real top quality product.

P.E.I. LFA 24 representatives participated in lobster promotions to develop markets in China and Japan through trade missions and seafood shows. As a representative of PEIFA, I recently was part of a trade mission to China and Japan to help promote lobster. Our delegation successfully participated in a world seafood show in China. PEIFA assisted with the production of a P.E.I. lobster brochure and developed a video on the story of lobster fishermen on P.E.I. Through initiatives taken by the fishers of P.E.I., the status of our stocks is very good, and we will hear more of the same from different ones, but we have to do that because we have to say what we feel.

Considering my comments and with the comments of other fisher representatives of P.E.I. in general and LFA 24 in particular, I feel confident you will come to realize that we have certainly done our part and you will respect our request that the lobster carapace size remain at 72 millimetres. We have markets for the 72 millimetre lobster. The 72 millimetre lobster keeps our small processing plants open, creates jobs and leaves money in the small communities.

There is not a whole lot to take down because we are repeating a lot of the same things. It is the only industry we have got left and we have to look after it. I know New Brunswick wants to go up and over the years we have always said when I got back from the meetings in Rustico "Oh, why again do they want to go up?" We are at a place where we have a niche market and we will lose that. We will all be on the big lobster, the whole thing. In China I saw a few lobsters. I did not see a whole lot, but what I saw in a glass cage, and I think they were from either New Brunswick or Nova Scotia, were lobsters about that long. They were not a big lobster. They might have been three-quarters of a pound. People were looking at them and pointing at them, and there were 127 top of the line chefs. It was a show with 900 exhibitions, everybody from all over the world with their food. The chefs, at a certain time of day, did up the tails, and you could not tell them from frozen or fresh lobster. I met a lot of people and a lot of processors as well as individuals. About 15,000 people went through the show and there was the odd picture taken. It was an eye opener for me to be there, and it is hard to explain what you saw by just words. I think it is something like heaven — you would never be able to explain what it is like if you came back.

I have one more little thing. This summer I met two fishermen on the wharf in Rustico from the Magdalen Islands. We chatted, as fishermen do. They asked what our size was and I said "Well, we are going up to 72 millimetres." They both started to speak at once. I asked, "What is the trouble?" They said "If you are going to 72 millimetres, for God's sake try and stay there. We are quite a ways above that. We have got stuff in crates now and we cannot get rid of it." I have the names and phone numbers of these two fishermen, and they said "We just went too big." That is what they said and that is gospel.

Mr. Boertien: In addition to the initiatives that Mr. Peters just presented to your panel, we fishers still face many new challenges in the near future. If I may, I will briefly make you aware of them.

Price is first and foremost in the minds of all fishermen. I have fished my own enterprise now for 22 years, have done well in providing for my family and raising three children who are now out of high school and attending post- secondary schools. For the last four or five years it has been quite a struggle. Area 24 and P.E.I. as a whole must be diligent to keep pressing for more marketing and promotion. Either on our own or in partnership with the Lobster Council of Canada this should be possible, whether it be by obtaining certification or some other means. Funds have to be acquired to do this through partnerships with federal, provincial and harvester contributions.

Our U.S. neighbours to the south, especially Maine, are miles ahead of us on this initiative. The Department of Fisheries and Oceans seems to be in a spiral of wholesale budget downsizing. The Science budget is all but gone. They are discarding the issuance of tags for lobster traps which we as fishers see as a major step backwards on conservation. We even offered to pay more for our yearly fees this year to offset costs of tags. If it is too late for DFO to do it themselves, then they must act more quickly to award the PEIFA the contract to issue tags to our own fishermen. Time is of the essence in meeting this challenge.

We feel that one issue of utmost importance also to fishers has been set on the back burner because of these other issues that we are hearing about today. That is DFO's decision to switch all licensing and other services to be done online instead of by mail or in person at a DFO office. Our organization took a poll at our last annual general meeting and it was discovered that over 25 per cent of fishers are not computer literate enough to renew licences or meet other functions required if DFO goes ahead with this plan. It is widely known that the age demographic of most fishers on P.E.I. is well over 55 years of age and are just not schooled on computers, myself included, and I am not even 50 yet.

It is too quick of a transition that DFO is trying to impose. They say all services must be done online by March 31, 2013, next spring. Area 24 believes that through other budget cuts, they are eliminating licensing and other front counter staff at just the time it will be most needed in our offices, whether it be on P.E.I. or New Brunswick or Nova Scotia. We feel if positions must go, why not from the top instead of the front line workers who will be needed when we need them the most next spring.

To change licensing we feel that a major compromise would be to grant the ability to do business over the phone. The EI system has a program that allows people to file and report. Why would DFO not be able to create a phone program to renew licences from year to year? They already now have a phone number toll-free to call for help. We are suggesting they expand it, make it user friendly.

In conclusion, I feel as a representative of many rural fishers, it is our constitutional right to be offered these other services, not just online with a computer. Furthermore, we fishers are doing our best to be good stewards of the natural resource we are given the right to use, and we will continue these efforts so that the lobster resource will be available to future generations. It is important to note and remember that we need government institutions like DFO to recognize that we sometimes need extra help and understanding to help conquer these challenges presented to us.

The Chair: Mr. Cloutier?


Mr. Cloutier: Mr. Chair, if I may distribute to you a copy of the conservation plan we tabled, as did our colleagues from the maritime provinces, New Brunswick, Newfoundland, Prince Edward Island and Nova Scotia; it is a plan that we had to table in 2010 in order to have access to the second part of Ms. Shea's package which required us to make major efforts to respect a development vision or a sustainable lobster fishery. I apologize that it is in French, but I have been promised a translation of the last two or three pages on the different measures taken by Quebec in order to respect the federal Fisheries and Oceans' sustainable development vision.

Today, I find it unfortunate, given that there is this sustainable development project which has cost our fishermen greatly in terms of measures and efforts, to see that my colleagues on the right do not want to understand what we have done and what we must do to ensure sustainable development, both in terms of economic sustainability and conservation.

Prior to this program, the fisheries capacity in the Gaspé had been cut by 17 per cent. Once this program was established, we received some help. The federal government helped us to cut the fishing effort by 12 per cent. So, we cut the fishing effort by 29 per cent. These compromises were made in the hope that we would be able to maintain lower volumes on the market. That was the goal also in terms of sustainability, but with consequential pricing; however, unfortunately, the lack of efforts from our colleagues meant that we got caught out and we did not get more for our lobsters.

We talked to the fishermen, both in the Gaspe and the Magdalen Islands, and we had asked a great deal of them, we had asked them to make significant efforts to reduce the number of traps and the number of fishing days, increase the size from 76 millimetres to 82 millimetres for the Gaspé, and 83 millimetres in the Magdalen Islands, all that to wind up 10 years later in such a major impasse when it comes to the weak market price.

I do not want to leave things unspoken, because I will not be able to continue the debate much longer, but the niche markets are dangerous for my friends and my colleagues on Prince Edward Island, because the niche markets in Quebec are major stores like Loblaws, IGA and Metro, and they are the ones now dictating the price of lobster in Quebec. They are using small lobsters from Prince Edward Island and New Brunswick to set the price. We cannot accept that anymore in Quebec. Now you have been told.

In the Gaspé, there are lobster fishermen taking in 12,000 pounds of lobster. If the price paid is $4.50 a pound in 2012, that means $52,000 or $53,000 in gross revenues per fishing company. I understand that, in Prince Edward Island, they are more interested in doing nothing because they can harvest 30,000 or 35,000 pounds of lobster, particularly in the north, so at $4.50 a pound, it is a really different type of problem, you know. We have a much bigger problem because we are not viable. We need to get $6 a pound for our catch, but we cannot do that. At the same time as we are working on conservation, we need to address the issue that smaller lobsters on our own markets mean that prices are dropping. They are dropping, and we are taking steps in our province, and that is not fair.

After I leave here today, I am going to see my provincial fisheries minister, and I am going to ask him for something, because I am certain that this work is not being done. I am going to ask him to close the Quebec markets to lobster under the legal size in Quebec. If that is what they want, we will do it, and if he responds, we will see just how far we can push him, because we are really fed up in our industry, we are really fed up with having to deal with this, so I am going to ask him — I am seeing him next week — and officially I am going to ask him, and I am sending a copy of that letter to Ms. Shea.


The Chair: I just want to let you know that your minister was invited, as all ministers in Atlantic Canada were invited, to attend either here or in Ottawa, and he is not attending.

Be aware that we are open to listening and hearing from everybody. We understand everybody is not going to agree. I live in a community of less than 400 people in Newfoundland and we do not agree all the time either when it comes to the fishery. There is no doubt I am used to it, but the fact is that we have an open opportunity here to hear from everybody. The committee understands frustrations exist, but only by talking and working together can we find hopefully some solutions. So I just wanted to let you know that your minister was invited and he refused to attend, or she refused to attend.


Mr. Cloutier: Thank you for that information. We will continue our efforts elsewhere, but thank you very much.


The Chair: Thank you.

Next is Mr. Carl Allen.

Carl Allen, Fisherman, Maritime Fishermen's Union: I have been asked to speak for the fishermen in LFA 25, the contested area. Although there is a major sticking point that myself and Mr. Knox cannot agree on, there are some points that we do agree very much on, and that is the season start date. The majority of the fishermen in New Brunswick in LFA 25 would like to see that remain in early August. There is not too many who have much of an appetite to fish in the latter part of October. We also agree that there are a lot of things that we can do to improve the condition of lobsters when they reach the wharf. There are many things that we can do on that front to make them better.

The area that is most contested obviously is the carapace size, and I find myself somewhere between Mr. Cloutier and Mr. Knox. Whereas Mr. Cloutier would like to see us go to somewhere in the 82, 83 millimetre range, myself, I like the 76, 77 range. We are not talking about doing away with canners. We are talking about going to a canner select. In reality, the lobster that I myself or Mr. Knox or these other two gentlemen want to keep to take home to eat are the bigger ones. We do not take the less than 76. We take the choice canners.

Being 32 years old, I am the youngest fisherman here and in theory, God willing, I have to look the furthest ahead of anybody. The reason I would like to go to a larger size is to increase egg production. The bigger the size, the more females have a chance to spawn at least one time. Although, right now, things look great as far as catches go, because we are on an upswing, there are peaks and valleys in lobster catches. Right now we are heading for a peak, and that peak will come. At some point in time the catches will drop. It has been proven in areas that have raised their measure the further you raise your measure, the more you stabilize the lows, the higher the lows are. So instead of having high, high peaks and low lows, you kind of get this effect where you go up and you do real good, but when you do come down, you do not drop drastically, because the stock has been given the opportunity to take care of those measures.

I cannot really speak to LFA 24, but as far as LFA 25 on the Island wanting to keep the canner for a niche market, I would like to point out that Mr. Knox received less for his lobsters this year than I did. If the market for canners was so great and there was such a demand for this niche market, you would think that he would have got a price accordingly. In reality, the Island fishermen got a lower price than the New Brunswick fishermen. Maybe that was because we processed it so much that we forced our buyers to give us a higher price, I am not really sure.

Mr. Knox talked about the last ten years and how catches have been on the rise in LFA 25. They have, and if you look at some of the things that we have done in the last ten years, one is that we raised our measure. We were at 68 millimetres, and we have slowly raised our measure. That has paid off in dividends. Also, areas such as the northern part of LFA 25 and the north side of Prince Edward Island have benefited in recruitment from areas that have gone up in measure. Just because a lobster lays her eggs here does not mean that those lobster grow up here. When those larvae hatch, they go up in the water column float along and settle somewhere else. So the lobsters that they are catching on the north side could have actually been hatched in the Magdalen Islands, whereas the lobsters that I catch in Cap Pelé could have been hatched in Richibucto or Bouctouche. There is no set guarantee that where they hatch is where they land. So they are reaping the benefits of the measures that others have taken such as Mr. Cloutier and the northern part of the Bay of Chaleur.

There was a reference earlier to the crash in the beef market, and one thing that was not said is that the beef farmers in Alberta all made drastic changes. Being there has been a crash in this industry, I think that there has to be major changes. Personally, I think that carapace size is one of the good changes. There can be some common ground or there can be a happy medium struck. We do not have to go straight from here to here. We can find a middle ground or happy medium and get there in a reasonably timely fashion.

The Chair: Go ahead, Mr. Comeau.


Réjean Comeau, Vice-President, Maritime Fishermen's Union: Thank you, senators, for the opportunity to speak here today. My name is Réjean Comeau, I am vice-president of the MFU, but I am speaking today as a fisherman. I want to tell you about my experience.

Where to start and how to keep it short? We are here to talk about lobster, the lobster fishery crisis. The lobster fishery crisis has been going on for perhaps 10 or 12 years, maybe longer. When we started talking about increasing the size, Carl said it was 68. In 2008 or 2009, we were hit with the lobster fishery crisis, and the exchange rate of the Canadian dollar hit parity. All that was part of the lobster fishery crisis. As a fisherman on a boat, I cannot do much about the markets. When I am home, on my boat, when I am on the wharf, I try to think about what I could do. There is no big solution. I have been fishing for 32 years. I am still fairly young. I have sat around a number of roundtables on the ground fishery, the cod fishery, the scallop fishery and all that. The big problem with all these roundtables is that no one is realistic about the goals. No one is honest about the reality and there is a lack of a long-term vision. We are now in the midst of another crisis, the lobster fishery, and again today, we are sitting around tables and no one wants to find a long-term solution. We are looking at the short term, we are looking at protecting ourselves, our own little markets, our own little corners, and if we do that, we will do the same thing we did with the cod fishery and all the other species and we are going to wind up with another crisis. There are no more crises in the cod fishery; there is no more cod. It is quite simple. We no longer need to talk about cod and I do not get any more calls to come sit around any tables, because there are none anymore. I hope that I will not see the same thing come to pass with the lobster fishery. We absolutely need a long-term vision. I think that this is what our politicians and decision-makers need to look at, long-term goals.

My main concern as a fisherman is my viability. That is what I am interested in. I do not have a shop and I am not a broker. How can I ensure that my company is viable? We looked at this from every possible angle and in terms of whatever we could do. We started to talk about the sustainability of the resource 10 years ago. It was extremely important. We started to get down to work. We increased the size to 72, because the biologists told us that at 72 millimetres, the island would get there next year only. It would be 49.2 per cent of our eggs. They told us that with that, our resource was more or less safe, but not economically speaking for me. We did not want to go further than that. Why go to 76? It is simple: in any company, I want stability, so going to 76, I am going to bring my eggs to 75 per cent. If I were there today, because in New Brunswick, there are areas. In Baie-des-Chaleurs, the guy fishing next to me has gone up to 76. He used to catch 8,000 pounds of lobster, now he takes some that are 25 and 28. In my region, they do not want that. They say "Réjean, you are crazy. We are going to lose it all: our market, our little lobster". In his area next door, it is even worse than in ours. They did not want to have that long-term vision. They played it safe. No, they did not change a thing. Then, the economic crisis hit with the dollar and all that, and some people paid more than others. Those who did not want to move forward paid more dearly. Today, that is where we are. The biologists are recommending a precautionary approach. That is why we went to 76, like they said, because that is how lobsters are, it will go back down again, but perhaps there will be big waves, so a little less.

I will be brief. We need to have a long-term vision. Each time we talk, we talk about canners and the market. It is not just the 72 and the 76, they come in all sizes. When I fish, I catch 72, 76, 80, 82, 85, 86. I have even had some 100s. People buy everything I get for the same price. They get different prices for the tails. They sort my lobster, they sell it on different markets. I tell the shop: "Why are you not paying me?". "Ah, well, you are selling little ones and that is what we are paying you for." I am just a small businessman, I tell myself why not get more for a lobster with a five- ounce, four-ounce or six-ounce tail, why do I not take that lobster if it is worth more? So, as a fisherman, you have to provide what the market wants. If you want a big steak, the producer will get you the steak you want for the price you are prepared to pay. As fishermen, we do not think like businessmen. We are wanting to sell lobster on the market that is paying less. We want to sell the lobster to the people who pay the least. Is that logical? It is not logical. Canners command the lowest prices, and that is what I fish, that is what I push. As a business decision, it is not logical.

I understand that Prince Edward Island has a niche market. I asked the plants about that. We had a two- or three- day meeting at the plants, because New Brunswick also does popsicle packs, not just Prince Edward Island. All plants do some, but New Brunswick is more diversified, because there is more money to be made with tails, meat, and other things. I said "will it create a problem for you if we go up to 76? Will you lose that niche market?" All of the plants told me they would adapt. It is simple, and I understand. I said to them: "Explain it to me." If consumers no longer want to buy small lobster at 72, they will buy the smallest one. If it is 76, they will buy lobster at 76. Prince Edward Island is a province where, like New Brunswick, they fish the smallest lobster. It will still be the smallest lobster. They will not lose that niche market. If the smallest lobster is 76, people will continue to buy the smallest lobster. Those who want small lobster will keep buying it. They will still have their niche market. We will protect ourselves in terms of sustainability and stability. We will be able to compete in a market, because you saw what happened in the summer with the Americans from Maine. We have no choice. We must compete with what the others bring us.

In a crisis like the one in the summer, we cannot stop Maine from bringing lobster in here, nor can we stop producing it. We must find a solution and adapt. I think that by adapting, the island will not lose its niche market. We may put lobster on the market and have a chance to get a little bit more money for it; then perhaps we will be able to weather the crisis. The only thing we control is the resource. We do not control the market. As a fisher, I have no control over the Canadian dollar going from $1.10 to $1.12 or $1.15. As for the rest, I would just be repeating what has been said around the table.


The Chair: Thank you all of you. Once again, it is great to hear from the people that make a living on the ocean. It is always productive.

Senator Poirier: One of the gentlemen here mentioned that getting the lobster from the water to the plant in good quality was 50 per cent of the problem. Can you give me some recommendations you feel you would need to be implemented in order to fix that problem?

Mr. Knox: P.E.I. government has had a protocol in place since our last meeting — neither New Brunswick or Nova Scotia has it — whereby people go down to the wharves to check to make sure that the guy at the wharf is handling his lobster properly, has the proper ice, has the proper storage for the lobsters and that the lobsters are in good quality. One thing that should be mandatory is fishermen should have enough Logteks or insulated tanks and ice to hold the lobster they bring in. They should not be allowed to come ashore with lobsters underneath a tarp, for instance, and that happens in different places. Lobsters should be taken care of and there should be laws. The processors should not be buying them from fishermen who are bringing them in underneath tarps. The next time they go out, they would not do it. We have got to put things in place to bring in top quality lobsters to the plant and insulating the tanks and ice is the way to go.

Senator Poirier: Has that suggestion ever been brought to DFO?

Mr. Knox: We are meeting with DFO now. We are putting in recommendations, quality measures. We are putting in a funding request now, this year. This year was an abnormal year because of the heat. We keep saying, and it was stated at that last meeting, that the only reason we are here is because of the glut of lobsters coming from Maine. Right now we want to change our carapace size because of six processors in New Brunswick. They do lobsters in the spring, May and June. Then they go to the Maine lobsters in July and August. They want us to move our fall season to September so they can do the Maine lobsters for the two months and do us in September and October and move over and do Southwest Nova. I mean, they are doing this for their pocket. They are not making all these changes to help fishermen's pockets. You have got to see both sides of it. These guys want change to help their bottom line. The guy that is buying the biggest majority of lobsters in the U.S. is a broker. He also sells the majority of lobsters processed in New Brunswick plants. He is buying these lobsters in the States and he needs a place to process them. He sells the lobsters to these fishermen and he is telling them to make the changes. This is stuff that is done behind closed doors and we are taking the brunt of it, which is not right.

Senator Poirier: Mr. Allen I understood that you said that one of the things that you agreed on was the start date of the lobster with New Brunswick and P.E.I.

Mr. Allen: Yes.

Senator Poirier: That is kind of different than what he just told me.

Mr. Allen: We both agree that we want to stay with an early start. We want to stay with an August start. Even though I am from New Brunswick, I have a sneaking suspicion that one of the main reasons, like Mr. Knox says, that New Brunswick lobster plants would like to see us start September 1 — originally we were asked to start September 17 — can be found if you look at the statistics of the lobsters that come from Maine and when they do the majority of their fishing. The lobster fishery in Maine begins to slow down around the first to the middle of September, so he is absolutely right when he says that they want us to start late so they can process all the Maine lobster, then deal with whatever we may bring in after that.

Senator Poirier: The fishermen agree.

Mr. Allen: We agree on that. The carapace size is the main sticking point.


Senator Poirier: I know that you told me that the lobster crisis did not begin a couple of months ago. It has been ongoing for 10 or 12 years.

You also talked about the importance, to your mind, of increasing from 72 to 76. It is for the quantity of eggs that will remain. You also mentioned that in the past, the size was 68. It went up to 72. At that time, when you succeeded in changing from 68 to 72, how did you get all of the provinces to cooperate and agree to the same approach? Or was it something determined by the Fisheries Department, who put regulations in place that gave no one any choice?

Mr. Comeau: That came from the FRCC recommendations. The department kind of imposed it for conservation reasons. Let us just say that people more or less agreed, but there were always places that did not want the increase. It was kind of imposed, yes.

Senator Poirier: But at the end of the day, there was some collaboration among the regions?

Mr. Comeau: Not necessarily, because there are regions in New Brunswick where it went up much more quickly. We are at 72 in the Miramichi region; in and around Néguac, they are still at 71. They will only hit 72 in 2012. We have already been at 72 for almost four years.

Senator Poirier: I am not sure if one of you knows the answer to my next question, because in reality Mr. Cloutier raised the matter and he has left; but perhaps one of you knows the answer.

Earlier, he mentioned the Quebec region: they went from 82 to 83; the Magdalen Islands were at 83; and the others at 82. I was wondering if that had been decided in conjunction with the fishers, or if it was a size quota established by the Department of Fisheries and Oceans that had to be complied with?

Mr. Comeau: I think that O'Neil Cloutier answered that. They received the FRCC recommendations at the same time we did. They followed them almost to the letter, especially on the market issue. There was some conservation, but they really wanted to target a market, so they went farther than we did. If we had done the same thing, the crisis may have had less of an effect on us.


Senator Poirier: Somebody else wanted to answer.

Mr. Boertien: When the FRCC report was done about five, six, seven years ago, their recommendation for 50 per cent chance of having eggs before the lobster were caught and sold basically was 70 millimetre, and P.E.I. went along with that. In the interim, new science was developed, new methods, and that was changed from a 70 to a 72. The only reason we are going from 70 to a 72 is that we were forced by DFO through the Lobster Sustainability Measures program. We did not go from 70 to 72 willingly. We were forced to go. I would like to make that point.


Senator Poirier: If I am not mistaken, I think it was perhaps Mr. Comeau who made this comment. Earlier, he talked about why lobster tails could not be priced the way beef is. So there are different qualities and different prices. Why can you not do that with the different sizes to get a better price for the lobster tail or something like that? In your view, where do we start with those ideas, with whom and how? Who can resolve that?

Mr. Comeau: We have to start by getting industry and fishers to sit down together. That is the first thing. We have to start a dialogue. We have always been like cats and dogs. The fishers always say that industry is stealing from them and vice versa, but reality has caught up to us in the market, our American market, which represents 90 per cent. Before that, there was a big difference between the tails, but increasingly, the market appears to be evening out. Tails weighing four or five ounces are coming in at the same price as tails weighing six or seven ounces. That is why we must urgently look at what the consumers want so that we can give them quality lobster. And getting what they want may be the only way consumers will be prepared to pay a little more during a crisis for our products. In the end, the consumer is the one who decides, as with everything else.

Senator Poirier: Thank you. It will not be easy, as we can see, to come up with a recommendation that will satisfy everyone 100 per cent. Of course we will continue to listen, but there certainly are some difficulties. Thank you.

Mr. Comeau: One final comment: if we could convince everyone to look at the long term and not just the short term, we would already be a big step ahead.


Senator McInnis: You mentioned registration by phone versus online, a very practical point. In rural Nova Scotia you have older fishermen who sometimes do not have access. Is it staffing? What do you perceive is the problem?

Mr. Boertien: I perceive the problem to be that DFO is downsizing, trying to cut their budget because they have been told to. People in the offices are being either laid off or given their walking papers. The problem is what that creates for 25, 30 per cent of our fishermen. There are over 1,200 fishermen on P.E.I., and if 300 or 400 of them do not know what they are doing, the one person left in that licensing office is going to be bombarded with requests to help?

Senator McInnis: In the scheme of things as and what we are talking about here today, it seems small, but it is a practical thing and it can be a problem in rural areas. I just want you know that I hear you. Times are a changing, as you know, and we all have to face them, but for some of the older fishers it is a little more challenging when they do not have access. I just wanted to acknowledge that.

Lobster landings currently are very high, and I have read that it is not really well understood as to why that is. Tomorrow afternoon I understand we have researchers and scientists coming before the committee and we will pose that question. However, the former Fisheries Conversation Council said that there is a need to reduce exploitation and establish better controls over fishing effort. Are your organizations concerned about this, and if you are concerned, is this more of a problem in specific LFAs as opposed to others? What would your recommendation be?

Mr. Knox: Are you speaking to me?

Senator McInnis: Well, any of you.

Mr. Boertien: If I may, because of the carapace size increases that we have already done — from 68 to 70, three years later from 70 to 71 — we skipped a year — next spring we are going from 71 to 72 — more lobsters are being left on the bottom. More lobsters are reproducing. They are bigger. They are coming ashore. They are a bigger animal, so they weigh more. If the science is done and if we go from a 72 to a 76 and the lobsters are going to gain weight by 40 per cent, it creates a bigger problem. P.E.I. caught almost 30 million pounds last year; add 40 per cent to that. How are we going to sell them? It is just more of a problem.

What can I give you as a recommendation? I do not know. Not this spring, the spring before, nature looked after it. Our catches were way down because we had storms. About once a week we had northeast or southeast winds. With drastic temperatures, water temperatures, those winds were making our catch stop on their own.

Senator McInnis: I did not intend to get specifically into that. I was talking about lobster industry generally. It would be a catastrophic event if we lost the lobster if there was such a downturn. I am not envisioning that there is a cliff here anywhere soon, but what if? How can we preserve? We hear about leaving the smaller lobsters to grow larger. We hear all about those conservation measures, but how can we get to a point that we will not have to worry about that eventuality?

Mr. Knox: Science will tell you that. Science will tell you that when you meet with them. We have been meeting with Science. In going from 70 to 72, we met with MFU the fishermen on P.E.I. and district 25, and decided we are going to 72 because of our rationalization plan. We went to 71, then skipped a year and went to 72. We did that. The industry is in great shape. With regard to the recruitment on the bottom and the studies that we are doing on P.E.I. on recruitment for the upcoming years, a fellow from Science told me, "If anyone is going to buy gear, now is the time to buy it." The recruitment in LFA 25 is significantly strong.

Yes, it is lower in the central strait. You guys would not have sat in, but we had a meeting in Moncton here a number of weeks ago. DFO Science sat down with us. They have been doing studies from 2007 to the last year on the water of the Northumberland Strait, how it is moving, water temperature, silt, iron and it is not good. The central strait is dying because of the heat. One professor from New Brunswick, I think he was from Fredericton, predicts that by 2030, 2035, there will be no fishery in the central straits because the water will be so warm that there will be no oxygen in it and fish will not be able to live. What can we do to help out the central straits? Science cannot even answer that. It is global warming. The rest of the strait is thriving because the water temperature is good, the water is clear, the lobsters are in real good shape.

I understand the New Brunswick fishermen wanting to increase. They wanted to stay at 72, but they are being forced to go higher because their plants are saying they are not going to buy their lobster at 72. The processors want to go to a bigger lobster because they are doing meat and tail. The bigger the lobster, the lower the labour cost, and it comes back to the dollar.

Senator McInnis: Mr. Chairman, I think I would like to have these hearings, not in a court of law, but at least in a hearing where I could cross-examine and then hopefully have someone adjudicate who is a little more intelligent than I in respect to the fishery. I did not intend to get into that. In Newfoundland there was never going to be an end to the cod. It came quickly. Look where the ground fishery is today. The young fisherman said he will be in the field for a long time and it is the future that we all have to think about. It can be global warming and there are things that we can do to combat that, as well. However, the point is that we have to think of the future and that, I am sure, will be an important segment in our report. What can we do to ensure that the future of this fishery will be there and intact for those who follow all of us here in the room today?

Mr. Knox: That is why we went to 72, to secure that.

Senator McInnis: I know.

Mr. Knox: That was Science telling us to do that.

Senator McInnis: Yes, I appreciate that.


Mr. Comeau: We do not really have a problem with conservation. The lobster crisis is caused by a problem with the market. For me as a fisher, it is a market issue. We go to China, and there is market demand for a certain size of lobster. The Americans demand a certain size of lobster, and we must provide what the market is demanding. We cannot force the market. The market is doing the dictating.

We have done a great deal on conservation and that is where we are at, but in reality, it is a market issue. The Americans bring lobster into our shops, the shops dump them, and we must compete with that. So if we have to go with a slightly bigger lobster because the market wants a slightly bigger lobster, and if we supply our plants with the lobster they need, and tell them "Whoa, down there in the United States, slack off a bit because our fishers are bringing us what we want." — that is the only solution.


Senator Harb: How much is the price of the tag?

Mr. Boertien: Thirteen cents.

Senator Harb: Why is it you want to have an extension?

Mr. Boertien: We are told by the suppliers who make the tags it takes so long to take the orders, get them manufactured, ship them. Our season starts May 1, but our fishermen start putting traps out and tagging April 1, about a month before.

Senator Harb: Size seems to really matter when it comes to the sector that you are in. We have heard different sizes, 70, 72, 76, 83, and so on. What size is the Maine lobster that is sold to the Canadian processor?

Mr. Boertien: The lobster that goes to Maine?

Senator Harb: No, the ones that come here.

Mr. Boertien: Comes from Maine. It is a market and it is 83.

Senator Harb: Your fishermen's association was doing a study in order to find out what can be done so the price will move up. What happened to that study? Where is it now? Do you know much about that?

Mr. Boertien: I do not know what study you are talking about.

Senator Harb: The P.E.I. Fishermen's Association is doing a study.

Mr. Knox: There is a study in place right now, what is going on in the industry and how can we improve it, but that study has not been finished yet.

Senator Harb: You raised the issue about the Science budget at DFO being cut. Is there anything in the alternative that the industry is looking at, perhaps as a means of resolving the problem, pooling together some funding to hire some scientists to look at the various issues of disagreement? I do not think you agree on anything, honestly. You agree on one thing, that the price should be more.

Mr. Knox: No, we agree on the season. We agree that the season should be left as is, not moved to accommodate six processing plants in New Brunswick. We do not agree on carapace size because we have no problem selling our canners. New Brunswick does meat and tail, and they have to catch an abundance of lobsters because their yield is so low. Their profit is so low that they have to do a lot of lobsters to make money. P.E.I. does not do that. We work in the spring and the fall, and most of our plants are closed the rest of the year. This year, the plant that did that 1 million pounds had a zero mortality rate that he did not have to process. He could pay more on his canner lobsters than his markets.

Senator Harb The market is limited, and everybody seems to agree on that. We have the product, which is finite. I think Mr. Allen pointed out that if we do not conserve properly, at some point in time we may run out of product. The price is low, so the industry does have a crisis.

Back in 2007, the Fishery Resource Council brought up a lot of points. One of their concerns was the sustainability of the product itself. They also raised concerns about the overall management of the stock and productivity, as well as the issue of enforcement. I am sorry to say this, but somebody is taking a shortcut. All the points are very important. Personally, as a consumer of your product and loves it, I think the price is low. Is there no cool head in the industry to say that the government is not going to resolve my problem so I have to figure it out myself? Then you decide what you are going to do. We are going to have a summit, a meeting or a convention where we are going to sit together and we are going to take these concerns and give them to a third party in order to make some sort of a reasonable recommendation that we can agree to collectively. Mr. Allen said it. He said that we need some sort of a compromise, that there has got to be some sort of a mechanism. Government is not going to do it for you. In 2007, one massive report was done by the FRCC and in 2009 a parliamentary committee reported on the same thing, and here we are in 2012 doing the same thing all over again. I am not confident that government can do anything for you. So the solution has to come from within. How do you feel about that?

Mr. Boertien: Can government do it? I have no idea. Will putting the carapace size up do it? I do not know that either, because Southwest Nova is bringing in market size lobsters now, and they are getting $2.75 a pound.

Where is the fix? We do not know. If you go up to 76 and the market starts to demand a smaller size, there is no way we are coming back down. DFO will never put it back down, even if we all wanted it together.

Mr. Knox: The reason we are here is the glut. There is such a glut. The Eastern Seaboard has increased their catches by 30 per cent over the last number of years. Just last year alone the Eastern Seaboard went up 25 per cent or 30 per cent from the year before. It is increasing and increasing and supply and demand are there. If we went to a market lobster next year, it will not help us out, as far as I can see, because there is so much lobster out there that if you have a market to sell something, sell it. If we would have been selling market lobsters this fall, the price would have been the same because the price was dictated by the U.S. lobster coming in, and it is all markets. Nova Scotia is the same. The problem is too much lobster. Nothing is wrong with the industry, just too much lobster.


Mr. Comeau: I want to set the record straight. We are talking about market lobster. The 76 millimetre lobster is not a market lobster. A one-pound lobster is an 82 millimetre lobster. So at 76, we are still talking about canners, about the canner market. We seem to be forgetting that there was a crisis in the summer. There will probably be another one. We have had discussions, we have had conferences, we have done everything. There seems to be a desire on the part of the government to not want to resolve the matters. They are letting us fight amongst ourselves. Even if we come very close to solutions, they don't make the decision. I apologize, but someone somewhere is not playing his role. We are clearly not the ones who are not doing our jobs.


Senator Hubley: Mr. Chair, Mr. Comeau had written out an answer to a question that I asked on the carapace size, the poundage, the number of eggs on that particular female and the number of females sexually mature. I just want to let you know that I have received that, and I will turn it over to our researcher.

My question is on marketing and the price of lobster. The lobster industry, has established the lobster as a luxury product and the pricing has followed along that line. In most restaurants, the lobster would probably be the most expensive item on the menu. I would like your comments on pricing going from there to a place where most families might be able to afford a lobster dinner. I think now on Prince Edward Island we look at Mother's Day, and if people are home for the summer we try to take them to a lobster supper. Certainly our specialty meal during the summer is lobster. That means we do not eat it on what I would call a regular basis. I am wondering what you think would have to happen, price wise and marketing wise, to change that so that it would be more accessible to more people.

Mr. Allen: To adjust the price for an everyday meal, you would almost have to see the price go down even more.

Senator Hubley: That is what I am afraid of.

Mr. Allen: We do not want that, do we, boys? At the same time, I think that you will see, from the most recent couple of years with the price crisis, that lobster is being eaten maybe not an everyday basis, but more commonly. When we were fishing this fall, there were lots of specials on lobsters and everybody was out buying them. I think the price has done that. Obviously supply is outstretching demand. The resource took off and the markets are not catching up. From our end more effort needs to be done to create more markets. We cannot ignore Asia in trying to open up more markets where we get more lobsters flowing at a better price. To get it where it is an everyday item is not going to help fishermen. You will have to drop the prices so low on the boats that it might not be worth going out.

Mr. Knox: On the price of lobsters, you can buy bologna cheaper than you can buy lobsters this fall. If you want a few lobsters, no problem going to the wharves. With the lobsters if the end price drops a tiny bit, it comes right back to the fishermen. The middle men do not drop any. I belonged to the Tignish Fisheries Co-op a number of years ago on the board and the brokers would all make 3 to 5 per cent. Now they are making 10 to 12 per cent, 20 per cent. It is all the middle steps that are making more money and the fishermen are paying for it. The end user is paying a relatively high price right now, but it is the fishermen getting the low price. My son is in Korea. He took a picture this fall of a price sign on the wall, one lobster, $29 for a pound and a quarter. I was getting $2.50 a pound at the boat. Somebody is making money. Not me.

Senator Hubley: I have a further comment on the large box stores, the large supermarkets that uses lobsters as a loss leader. Are they buying those at the market price or are they getting them at a reduced price? Are they losing a little bit by allowing those lobsters to be sold at $5 apiece or whatever? Is that affecting your bottom line? I think someone had an argument about it affecting the lobster fishery in Quebec.


Mr. Comeau: Yes. Clearly, superstores and companies like that are affecting us. They are holding fire sales. They buy lobster and they sell it. They buy it perhaps at $5, and then sell it for $5 or $4 dollars. There are also companies that liquidate lobster. That plays a big role. For us to get a good price, we need good quality lobster. We need a brand and we need to turn to markets other than the United States. We have started going to China, but we must provide the size of lobster consumers are asking for. I am a lobster fisher, and 50 per cent of the time I fish market lobster, but not U.S. market lobster. I fish lobster at 72 millimetres and 81 millimetres. Why do they give me 504 a pound more for my lobster at 81? Why am I so bent on fishing lobster at 72, to receive 504 less? If they give me 504 more for lobster at 81, it is probably because they have a better price. It is easier to sell. It is easier to market. That is what the consumers want. But do I stop? No, I continue to fish.


Mr. Peters: When the lobster comes in Sobeys or Superstore mark it up 100 per cent from what they bought it. Whatever they got it for, Lord knows, it is marked up 100 per cent.

Senator Hubley: I will leave that question because I am not sure what it is.

The Chair: We will leave that one hanging.

Senator Poirier: Just a clarification to make sure that I understood, if the market was at 76 millimetres, we are still talking canner?

Mr. Peters: Yes.


Mr. Comeau: A canner is under 81 millimetres.


The Chair: I would like to thank our panelists for the great information they have provided.

We now welcome our final panel for today. We will start with Mr. Connors.

Peter Connors, President, Eastern Shore Fishermen's Protective Association: I am from the Eastern Shore Fishermen's Protective Association. That is the eastern shore, east of Halifax. I represent harvesters for the most part. We do have some buyers who are associate members of our association for advice but we are not into the marketing end of it at all, more or less harvesters. I am going to address the things that are of concern to the harvesters, and the independent harvesters in particular.

I would like to thank the committee for this opportunity to express our views on the state of the lobster industry in Atlantic Canada and Quebec. I would also compliment the committee on their pertinent questions and the previous presenters on their presentations and their competent responses to your questions. As most of the subject matter and concepts we are dealing with here are predicated on or flow from the Gardner Pinfold report, I will be referring to Mr. Gardner's earlier testimony before this committee and the assertions in his report. I would concur with most of the testimony submitted to your committee thus far, and I believe Mr. Gardner has very astutely identified the various considerations with regard to our industry. However, I would qualify my support with the following remarks and recommendations.

I would like to respond to Mr. Gardner's depiction of the challenges posed by the fairest competition in the industry. The lack of trust among participants and the assertion that the owner-operator and fleet separation policies and lack of a quota system stand in the way of structural change that would provide more predictability and better coordination in the industry. I would suggest there are other ways to achieve that structural change. I ask you to appreciate that we are descended from one-industry communities where the community was perpetually indebted to the merchants, to whom they were obliged to sell their fish and also buy their supplies. Monopolization for us is not an option. That is one thing the removal of owner-operator and fleet separation would cause.

Overcapitalization is another. Competition has advantages and disadvantages but we are prepared to support a managed coordinated approach in order to gain the benefits accruing from that approach. To establish such a collaborative coordinated approach as distinguished from a monopolized corporate approach requires a great deal of maturity from the participants. Enforceable rules and sharing must govern it and securing transparent monitoring mechanisms must be developed in order to instill trust and confidence.

We discount the whole concept of quota management as a tool for either conservation or flow controls. It has been proven by experience that quotas are neither enforceable nor accurately reported, and are totally rejected by harvesters in our area, even as a consolidation method.

Effort controls such as seasons and gear limits are endorsed by harvesters because it leaves us with accurate information. We must not confuse theoretical solutions with the applicable solutions that have real effect in practice. The owner-operator and fleet separation policies have just been dealt with recently, and members of government have assured us that they support them, period. I will not recount the whole debate here other than to say that they serve to protect the whole socio-economic fabric of rural coastal communities in Atlantic Canada and Quebec, and have the support of the public and their representatives. The removal of them would cause polarization and a multitude of other problems in the communities and industry.

In thanking Minister Ashfield for his announcement of support for these policies, we pledge to reciprocate by developing an alternative model that will have an even superior effect in modernizing our industry because it would have more support in industry and the public. It would be more universal and would not increase capitalization as with other corporate concentration models. Consistent with our commitment, we have endorsed the concept of the Lobster Council of Canada and have entered into discussions with the various competing participants, harvesters, buyers, shippers and processors and government, to serve the objective of reconciling the various invests and ambitions.

Supplementary to Mr. Gardner's observations concerning competition and mistrust, industry is making great strides in relationships with each other and recognizing the importance of working together. Trust agreements constitute a circumvention of the owner-operator and fleet separation policies, and everything they are intended to affect. They are a major obstacle to the collaborative approach and potential price-setting mechanisms which will be integral to the operational success of this initiative.

There are alternative solutions to the processors requirements through a collaborative approach. That possibly should be at the forefront of negotiations towards a new structure to correct the structural deficiencies cited by Mr. Gardner. Harvesters accept the evolving circumstances and will respond accordingly.

We have also entered into a parallel process to address organizational, administrative and management policy issues, which is outside the purview of the Lobster Council as the council has no mandate to deal with management issues, although several changes may be required. These are the same harvesters and potentially include buyers who strive to complement the Lobster Council of Canada mandate of promoting quality, brand and markets.

I was most impressed with Nadia Bouffard's assessment of the state of organization of harvesters, and it is important. Harvesters recognize the need to make improvements, and I would suggest that her department could promote our efforts by requiring better standards, especially in the decision-making process, and by giving their recommendations more consideration, thereby making them more relevant in the management of their fishery. The new initiative referenced earlier is intended to make these improvements and progress is being made.

Rationalization or viability is a concern yet in some areas, especially along the eastern shore with the collapse of the ground fishery. Even at this time of peak performance, some sections are marginal and a 25 per cent reduction in licences and a better distribution of them should be a consideration. Putting a figure on the reduction is difficult because of the subjective nature of abundance given the considerable impact environmental conditions have on it. Short-term funding for these improvements is a challenge, especially at this time of depressed value, and long-term funding for generational change is also of the upmost importance in order to sustain the inshore fishery and the regions it supports.

Finally, I must express our concern with the proliferation of open pen finfish aquaculture. The prospect of our area losing its image as pristine waters could affect marketing, and we fear the use of pesticides in these operations could also be to the detriment of the lobster stocks.

Bobby Jenkins, President, Southern Kings and Queens Fisherman's Association (LFA 26A Lobster Advisory Board): Ladies and gentleman of the Senate, I appreciate the chance to come over here today and present something on behalf of the 375 fishermen I represent in LFA 26A. I am not going to take up much of your time. I have a small brief here. I will go through it quickly and welcome any questions later.

The P.E.I. LFA 26A Lobster Advisory Board includes members from three local fishermen's associations on P.E.I. including the Eastern Kings Fishermen's Association, Southern Kings and Queens Fishermen's Association and Central Northumberland Fishermen's Association. This includes at least one representative lobster fisher from every port beginning in Surrey around the Northumberland Strait as far as Victoria, P.E.I. The advisory board meets frequently to discuss issues of concern for 26A P.E.I. lobster fishers. The LFA lobster fishing area is shared with Nova Scotia fishers as well as Island harvesters.

Initiatives — Atlantic Lobster Sustainability Measures Program and LFA 26A. The P.E.I. LFA 26A Lobster Advisory Board has worked tirelessly to ensure the success of the ALSM program and reducing fishing effort in the 26A area. Advisory members have had countless meetings and discussions with their fishers, working on a plan that could truly benefit their fishery. Lobster fishers have contributed significantly to this program through two carapace sizing increases, skate mechanisms increase, as well as major trap reduction efforts. Most importantly, the ALSM program has allowed for 33 lobster licences to be bought out thus significantly decreasing the fishing effort in LFA 26A. We are proud of such efforts and proud of our fishers for having worked so hard to get to this point.

Challenges: A major challenge for LFA 26A is ensuring that the success and efforts resulting from the ALSM remain intact and not be compromised by the downloading of services and financial cutbacks of DFO. Currently, the DFO tag service and delivery will cease to exist by the end of 2012. Without a lobster tags program, our entire efforts spent on trap reduction and fishing effort control will have been for nothing. DFO needs to recognize the importance of this program to lobster fishers and reinstate this most valuable service.

Maintaining our unique lobster size on P.E.I. is also an important focus for the Advisory. Fishers have had to compromise over the years with many increases in carapace size to a final 72 millimetre science-recommended milestone which will be reached next spring. Each size increase directly impacts on the economic bottom line for our Island fishers. P.E.I. businesses have developed niche markets for this unique size, and recent trade missions have assisted in expanding the demand for this quality size.

Craig Avery, President, Western Gulf Fishermen's Association: I would like to thank everyone before I read my presentation. I passed out a presentation to follow along with. I think everybody received it.

I was a little late coming in but I would like to thank Mr. Chairman and especially Senator Hubley who I had the pleasure of meeting in person here a few minutes ago. We only live about five minutes apart and it was nice to have a little chat before the presentation. Thank you for allowing us the opportunity to speak with you today as part of your study on the lobster fishery in Canada.

I am President of the Western Gulf Fishermen's Association. I am a third generation fisherman who has been fishing lobster in Lobster Fishing Area 24 for over 35 years. I am here today to speak on behalf of lobster fishermen whom I represent within the Western Gulf Fishermen's Association.

Our group is a localized association within the P.E.I. Fishermen's Association framework and holds two seats in the PEIFA board of directors. We represent 242 core fish harvesters with home ports in Sea Cow Pond, Tignish, Alberton and Hardy's Channel, Prince Edward Island. We have attached a map to our handout illustrating what areas we encompass. Within our local and western Prince Edward Island, there are three major fishing cooperatives, including the Tignish Co-op, Alberton Fisheries and Hardy's Channel Co-op. Over 80 per cent of local fish harvesters belong to these co-ops. These well established entities have been buying, processing and selling their quality seafood products for 70 plus years. The lobster fishery is the main driver for these co-operative owned businesses. Other species, including snow crab, rock crab, bluefin tuna, groundfish, herring, mackerel, also play an important role in the diversity of the products the co-ops are able to handle. There are many challenges facing the lobster fishery in Canada, as I am sure you are hearing today. I would like to focus on some of the key points today which are of significant importance to the fish harvesters which we represent on Prince Edward Island.

First, the importance of conservation and lobster habitat protection: The Western Gulf Fishermen's Association has participated in a wide range of projects over the years with the goal of broadening our knowledge of the lobster in our fishery as well as ensuring the protection of our most valuable resource. For example, we initiated the project looking into the potential impacts of the bar clam dragging fishery on the local lobster habitat. We participated in a voluntary scallop fishing buffer zone leading to increased protection of prime lobster grounds.

In terms of lost gear, the Western Gulf Fishermen's Association takes part in an annual lost trap retrieval grappling program, as well as the introduction of new measures to eliminate ghost fishing through effective biodegradable mechanisms on all of our lobster traps. We have also partnered with the Prince Edward Island Fishermen's Association and the Provincial Fisheries Department on important data collection programs, namely the Lobster Resource Monitoring Program which includes the voluntary Logbook Program and At Sea Sampling Program.

In 2009, the Western Gulf Fishermen's Association also began an annual collection of information on post-larvae settlement using lobster collector cages strategically placed on the site off Alberton, Prince Edward Island. LFA 24 has strict management measures in place including a strict two month fisheries and a voluntary no Sunday fishing practice. Over the years, this group has added additional management measures including significant increases in carapace size, increased escape mechanism heights allowing for natural release of sub-legals, in the addition to the release of all female optimal window size, which allows us to maintain a healthy lobster resource in our area.

This leads me to another key component of our fishery which is the importance of the canner lobster to the local and to P.E.I. There has been pressure from other groups to conform to a larger market size lobster. The pressure does not come from science as the positive trends continue in LFA 24 with increased lobster landings recorded each year, encourage and recruitment trends, as well as some of the highest number of post-larvae lobster settlement in Atlantic via our lobster collector site in Alberton.

As stated previously, we have three longstanding co-operatives in our area. We have developed specific markets for the unique size range with recent investments in development of new market, particularly in Asia and Europe. The potential for this prime quality product continues to thrive. We find no reason to increase further in carapace size considering the healthy resource we are protecting to establish niche markets created for this product size and the new opportunities obtained through recent trade missions and promotions.

Lastly, I want to discuss the importance of fish harvester input in management decisions. Fishers do want what is best for their industry and their resource and often have effective ideas to improve. Western Gulf Fishermen's Association successfully participated in a port freeze in order to control overcapacity within the concentrated area and sustain a viable fishery in western Prince Edward Island. We want to recognize the need to maintain and respect local management decisions such as the port freeze which assists in enhanced protection of our fishery.

If you have any questions on my presentation, I will be happy to answer them to the best of my ability.

Leonard Leblanc, President, Gulf of Nova Scotia Fishermen's Coalition: On behalf of the industry, we are very appreciative for the time that the Senate Standing Committee and Fisheries and Oceans is giving to this resource. I think it demonstrates the value of the industry to Canada as a whole.

I will talk on behalf of the Lobster Council, and then I will move on to my local association and describe what we have done to help ourselves basically without government help.

There is much talk about the Gardner Pinfold report and I know he presented before you. The Gardner Pinfold report was an independent review, arm's length of the Lobster Council, although we paid for it. Unlike other reports that are involved and weaved and twisted to reflect who is paying the costs, this one was not. We told him to go have a review, come back with a report. We respect his opinion, but we do not necessarily agree with everything that is put forth, just to clarify where the Lobster Council stands on that report. Sometimes people will quote the Gardner Pinfold report and state it as representative of the Lobster Council and it is not.

I will move on to my presentation which I have given you copies of. It is kind of a site report of what we have done in 26B North in our lobster fishery post 2005. At the time, I was fishing cod long-line when the minister of the day, Mr. Crosbie, announced the closure of the groundfish fishery, so we knew that that form of income was gone probably forever. We had to look at what we had left which was basically lobster, which was our basic bread and butter, and snow crab.

In 2005, I assembled my executive in a room, and it was kind of an interesting concept. The hall where we hold our meetings is next to what we call the "green door" and that is where the mentally challenged work, where they go every day to do their work. I figured it was an ideal place to hold our meeting because if we could not do it in our room, we would probably get some very good advice in the next room. It kind of brought everybody to a focus, that we needed to fix our problem.

We took our fishery and we dissected every part of it, and the end result was twofold: to increase our income, reduce our effort and make sure that, at the end of the day, we actually had something left in our wallet. It does not matter how much money you make, it is how much is left at the end of the day that counts.

What did we do? We increased our size from 70 millimetres, and then last year we were up to 81 millimetres. After we get the results from our consultant that we have hired, and we will probably provide you with a copy of that, we are going to decide if it is feasible to go to 82, 83 millimetres.

When we first started our sexual maturity was in the 35 per cent range, we are up to 94 per cent as of last spring. The last at-sea sampling in our area was done in 2003 by Michel Comeau and his staff. Actually, I participated in it as one of the boats. At the time, they found 1,007 males. After all of the changes we have done, we found 5,756. When I got the number, my pen dropped also on that day. I said, holy cow, what have we accomplished?

What did we do? We also reduced from 300 traps to 150. We bought nine licences through the buy-back program which, as I stated in Ottawa, was greatly appreciated. Locally in the Moncton and Antigonish areas, three individuals from DFO staff need to be identified for working so diligently on this file, and they are Régean Hébert, Isabelle Frenette and Leroy MacEachern. I remember specifically calling them on weekends and they were picking up the phone. We needed answers to the questions. I do not think you get that from all civil servants, but they were really dedicated to this program.

We also closed Cheticamp Harbour because we noticed there were big females going in there so we needed to use that as a reduction effort also. We tied our traps to a minimum of five per line, we used to have singles. So what are the actual results that we noticed instantly? First, our fuel costs were reduced. Mine went down by about 30 to 40 litres a day, and I saved about one to three hours per day on the water; it was great for my back. We reduced our bait expenses. Overall, our carbon footprint has gone down.

Even though we cut all of these things, our landings went up. My landings went up by 5,000 pounds last spring, and we were paid an average of $4.50 to $5.00 a pound last spring. As I said, last year after we reached our goal of 81 millimetres we did a scientific exercise to see what we had gained. We hired a PhD student and a master's student to do some at-sea research for us. The report is being tabulated, as I mentioned, and we will forward it to you when it is finished. So far, the preliminary figures are very interesting.

On sustainability, as you know, all harvesters have to generate enough financial revenue to be feasible in this industry, and it is not easy. We are now becoming more dependent on the lobster industry. There is probably one year out of the last four when I actually made money. Most of the years, a helper made more money than I did. Because I managed my business as an enterprise, I managed to survive. I did not spend it all on trucks and skidoos and everything when I made money; I actually banked a little bit for the rainy day which I knew would come.

The entire lobster industry, from harvesters to processors to shippers, is feeling outside pressure that they have never seen before. The era of simply landing our catch and going home has drastically changed. We have MSC certification hovering over u, and I think we are going to have to deal with it probably sooner than we think. We have a problem with animal husbandry overseas, which is popping up in Germany and other places. Traceability and government cutbacks to programs and services will impact harvesters at a time when market forces are widely unpredictable.

Harvesters understand that their catches cannot be certified as coming from a sustainable and well-managed fishery. If this does not happen they risk losing traditional markets and probably losing new markets. The costs of what I am describing, are expensive. However, it is a bullet I think industry is going to have to bite. It is a devil we are going to have to deal with, no choice.

I am also concerned, as Mr. Connors mentioned, about the changes in the demographic of our industry. The average age of harvesters now is probably 50, 55 and more. The cost of acquiring our enterprise, even though the catches are low, is extremely high. They do not actually reflect the actual income that is generated, which is good if you are selling but not very good if you are buying, if you can add or subtract.

We have yet to have a detailed discussion on the future generation, who is going to be buying our enterprise. Our association believes that we have taken the steps on the biological side. We have done everything we could thus far short of quitting fishing.

The next step that we are willing to entertain, provided our request for a subzone restriction and mobility are approved by the minister in Ottawa, we are willing to move on licensing policy reform and review under the banner of owner-operator and fleet separation. We want to tear that one apart too and see what tools are in there that we can actually change to make us more viable for those in the fishery and those coming into the fishery. We are willing to entertain everything from quotas to stacking, everything should be discussed. Most of it is going to be thrown out but hopefully we are left with enough to make ourselves more viable than what we are presently.

In regards to community and sustainability, the lobster fishery industry, in my opinion, is the backbone of our coastal communities. It is the economic engine in most, if not all, coastal communities attached to lobster fishery. My community has not been spared from the downturn in the fishery. We used to have three hardware stores, we now have one. We used to have nine garages, we now have three, and there are a lot fewer people going to church because they are all out west. It is simple. Collections are getting smaller and they have to go for donations if a repair is needed. Collection does not do it anymore. As I said, our youth is migrating more and more out west. Even my son-in-law has gone out there; he had no choice. So every spring we scramble for crews and it is getting worse every year. Plant owners now are hiring migrant workers and I foresee, in the very near future, that I am going to be doing it too. I see that coming. So every community is faced with the problem of maintaining its economic, social and cultural identity. It is a struggle.

In conclusion, as people know, I am rather optimistic. I said it in Ottawa and I will say it here again, I think we can get over this hurdle. I like to use the phrase which is used quite often when they talk about Canada, "There is no `cannot' in Canada. There is C-A-N in Canada." We have to use that philosophy everyday when we talk about the lobster fishery, and make positive changes that put us in a better place than we were yesterday. I think we can bring our communities back to prosperity by committing ourselves to ensuring that the lobster fisheries are on the path of biological, because you need a healthy resource, and economical sustainability.

In my mind here are the players that need to be at the table. Most of the members of the Lobster Council, I would say, are there already. Harvester organizations are there, and some of them spoke up in support of the Lobster Council today and I greatly appreciate that. We need DFO science and management, management in the sense that the Lobster Council can go to the gate on suggesting things but after the gate, it is up to the different LFAs to carry the ball. We do not get involved in management, but there might be something that we can bring forth to industry to suggest where a change could be. You need the Atlantic Veterinary College because I think the health of the resource is based on not only DFO Science but also veterinarian science. We need provincial governments and federal governments. We need corporate Canada. When I talk about corporate Canada, I am talking about the Sobeys, the Loblaws, the Carrefours. You need all these supermarkets that are dealing with their clients, our clients on a daily basis.

When we start on the path of quality and working on the three pillars, we have to start on the right path. We do not want to work for a whole year only to find out we started the wrong way. Everybody has to be at the table.

We need Agriculture and Agri-food also because they deal with quality standards. It was interesting when we met with Agriculture and Agri-Food in Ottawa. Loblaws, I think was across the street. We went to see what they were doing with lobster. There was a holding tank and there were ten lobsters; two were dead and eight were alive. They had a special on tails in the frozen part, $1.99, and they looked like they were freezer burned since quite a while. Something has to change at the consumer level to derive a better price. If I was a consumer and I saw two dead lobsters, I would not be impressed to buy the eight remaining in that tank. I would simply walk away and buy something else. That is why I am saying we need all the players at the table at the same time.

Collectively, we have no choice; we have to bring this thing to a better position. You have 10,000 harvesters, you have a pile of plant workers, you have truck drivers, and you are talking about a massive industry that we need to protect and make sure it stays. I am not minimizing the effect of the groundfish collapse. However, next to this one in some areas, it was very sensitive but it might be this high, and the lobster collapse would be up here, if we measure it in what it represents to individual communities.

I am chair of the Lobster Council, and I still think we can fix this somehow. Somewhere there is a fix to bring it back. It is going to take some time. There are variables over which we have no control. We cannot control the European economy or the American economy. They are going to have to come back on their own. We need to do our homework to be ready for the recovery of those economies. The Americans are getting ready and we need to do the same.

Hopefully I have given you a snapshot of what we have done on our own as an association.

The Chair: Mr. Sullivan, do you have a few comments you would like to make?

Mr. Sullivan: First of all, I say jokingly that everyone has to re-examine their position on the Lobster Council of Canada; if you cannot solve the problems in the economies of Europe, well, I do not know. You are in tough with the lobster business.

We all have unique problems. In Newfoundland, for example, carapace size would not be an issue on the forefront really at all. We have a market size lobster that kind of suits our fishery, there is not much debate. I am not saying it is better for some areas than others, but it is kind of a localized issue that has an effect for the rest of us in the business, but it is certainly not the major issue all over.

On the issue of government support, I got into it briefly earlier, and I just want to bring up a couple of things again that I may not have got into in as much detail. It does not necessarily need to be tons of money, but we do need governments to listen to us and facilitate some of the changes that come from industry. For example, there will probably be regulation changes and management changes that are needed. They really have to be willing to consult with the industry and take the approaches that will work, that people will work with. We have seen too many kind of top down agendas pushed. Like Mr. Connors said, some of them are theoretical and they seem good and might have applied to another industry somewhere else but not necessarily in other locations. They need to work more closely with the fleets and their proposals.

One of the key things is ensuring that the people who harvest the fish get the benefits from the resource. As a solution people sometimes talk about things like ITQs and they just throw that out. For example, in another lobster fishery, I was just reading last week on — someone mentioned the John Saxton site earlier — the lobster fishery, crayfish fishery in New Zealand are having problems. They were getting $80 per kilo for their product and the price had dropped to $60 per kilo. We would like to have a problem of that magnitude. The thing was the harvester in the ITQ system they have was paying $50 per kilo just to get access to catch that fish. Even though he is getting that increased price he is probably no better off than what our harvesters would be. In that same country, which is famous for ITQs, we heard all kinds of things about having Korean-based vessels with slave labour on them and things like that. We have to wonder where the profits are, and is it a good policy for a country to get foreign vessels with foreign labour in order to have the cheapest labour possible? I do not know how that benefits the people of Cheticamp or fish harvesters in Newfoundland. We have to be careful of where some of these proposals for rationalization come from. I think rationalization is still needed, but I think it has to come from the fleets and people have to work with the fleets to find those solutions.

Another change this year was to the Employment Insurance Program which a colleague mentioned earlier as well. These changes were done with very little consultation from what I can see, and it is certainly a problem for seasonal industries, be it tourism, the mining sector, the fisheries or forestry. We work in harsh environments which by nature are seasonal. For example, we do not see tourists going around L'Anse Meadows or out in Cape St. Mary's, Newfoundland and other remote tourist sites in February. It is just not a hospitable climate, the same as fishing is not in February either. You cannot deliver a good product. The recent changes will make it hard for the small business people, the enterprise owners to maintain these professional crew members. These skills are not easily replaced. You do not just pick up good crew members on the street, pay them low wages and have a successful enterprise. That stuff does not happen.

Going back to a Senate report in 2009 by this same committee, I see so many recommendations that would probably still apply. The third one there is still applicable. I talked about recommending a comprehensive plan for the lobster fishery including voluntary fleet rationalization to reduce capacity where needed. The federal government should contribute to the costs for removing lobster licences from fishery. I probably could not write a better one.

There was also reference to Employment Insurance considerations at the time. I still think they are very applicable and even more so considering some of the rather regressive changes that are being applied this season and next season.

I also wanted to touch on the DFO cuts. The cuts are challenging everybody in the industry. Cutbacks to science do not leave us in a better place to get sustainability, certifications, and prove we are sustainable. It makes it hard to manage our fisheries. There is less environmental monitoring when observer programs are cut. Costs are being downloaded. That is very difficult. I talked about the tags as well. It is not necessarily the huge costs with tags. They are both major problems but it is probably more so the timing. You have to find a manufacturer to make sure they can deliver a reliable product that DFO can enforce. Fishermen lose tags and how do we replace them? There are a lot of complications. On the surface, it would not seem to be a very complicated process, but there are issues of privacy, of how people get these.

There is the short timing, and you do not want to get into a short season. People catch their lobsters probably in five, six weeks in a lot of places, particularly in Newfoundland, a relatively short season but it is when the lobster is at the highest quality and potentially has the most value. So we cannot afford to have complications and that kind of chaos to start the season.

We do not need setbacks when we are talking about making sure we have got sustainable resources. We talked about the input controls which are most important in managing lobster fisheries, the number of traps. If we do not know how many traps are out there because we do not have tags, we do not have a reliable system, and the whole basis for how we manage the fishery is in jeopardy. That is why the tags are an extremely important thing. In some other fisheries where they happen to get good biological estimates and have quotas, the tags are probably not as important an issue. In lobster, the short timing is a major problem. We are still not out of the woods, and we are not sure how that will turn out. Hopefully, DFO would reconsider and continue the service that they had in the past and, if not, we will certainly do our best to meet the challenge.

The Chair: Mr. MacPherson, you want to make a comment?

Mr. MacPherson: Yes, it is just a little more on tags. Senator Harb had asked earlier about the cost and I just wanted to clarify. Apparently the current cost to DFO right now is 13 cents per tag, but what is going to change is that it is going to be outsourced. We are going to have to put more information on the tags so it will not be millions in a run or hundreds of thousands. Every 270 to 300 fishers you are going to have to generate a new tag. One of the issues that we have the most problem with is that tag manufacturers are actually in the list of people that can distribute those tags if they qualify. We could have a situation there. It is more than one manufacturer in Canada but we could have a situation where you are a distributor and you are competing against a company that is manufacturing them. There are lots of areas of concern.

I want to reiterate that the industry's first choice was for DFO to hold onto this function with a user fee, if that is what it needed to be. That looks like that may not be the option but that is still our preferred option. Certainly there are lots of concerns about how this program is being rolled out.

Mr. Leblanc: I have a supplementary comment to what I said, and I think it reflects what Mr. Sullivan was saying about DFO's financial cutbacks. We have lost two enforcement officers in Gulf Nova Scotia which we find totally unacceptable. These guys are going to be placed about two, two and a half miles from where they were stationed before. If I get a call or an officer gets a call about something happening, by the time he gets there the lobster would be cooked, shelled and gone. We find this totally unacceptable.

DFO says that lobster tags are a conservation measure. As an industry representative, why would I accept DFO getting out of conservation? To me, it does not make any sense. They are asking us to make conservation measures, to help our stock being sustainable and they were actually taking steps to get out of conservation.

One other thing, I met with science in Ottawa and they asked me, Leonard, what is your big beef with science? I said global warming and water temperature. He said, why? I said that the stock is very healthy, the reproductive cycle is very healthy but we might actually be catching more lobster than we should on a yearly basis because of warmer water. He said, "Well, what is the side effect of that?" I said that the steep curve on the other end will not be gradual, it is going to be dramatic, a big cut on the other side. I asked them and they agreed that they would study water temperature very closely and monitor it. It is a big item that is coming upon us in the lobster fishery.

Mr. Jenkins: I have a further comment on the tags issue, Mr. Chairman.

When we met with Minister Ashfield at the Delta in Charlottetown in July, I do not think we could have stressed any more seriously than we did that day the importance of the tags issue to the fishermen we represent. We offered to pay for the tags; we did the whole nine yards. We waited all summer long for consultations with DFO and his department, and it was late September before they got back to us. The tags are a very important conservation issue. If we are not tagging, forget it. Do not worry about carapace size.

The Chair: What is the reason for not tagging?

Mr. Jenkins: We were told five or six different things that day we met with them in July. One thing is they are downloading the costs of the tags to the industry. That was the number one thing. We offered that our preference is DFO to keep this program, but if you do not keep it, we will take it over. PEIFA will take the traps. Like Ian MacPherson mentioned, there are a whole lot of submissions in there now, there are a whole lot of proposals on who is going to tag, we will not know until December 7 who gets what. We were told it was downloading of costs.

The Chair: It seems like something that all you people involved in the industry want. I see a positive side and a benefit to it, and it just boggles my mind. That is something we should check out.

Senator Hubley: Mr. Leblanc, as the President of the Lobster Council of Canada, with regard to sustainability of the resource, you have outlined a number of things that have happened in your district that have had a major impact on your operation. I am just wondering is that information getting out to other organizations? Do other fishing groups look at the different things that you have done? I am just wondering how that information disseminates through the industry?

Mr. Leblanc: Thank you for that good question. First, when I spoke about the changes, I spoke on behalf of our local association, not as President of the Lobster Council, because you guys tend to write everything that is say, just to be clear. I have made this similar presentation at other scientific meetings. I have also presented on our e-logging program that we did, pilot project with science, and we had instant data right after the fishery. Last year DFO decided to cancel that program, go back to paper. When we were done with our science at the end of June, we asked for the numbers and they told us they would be ready in 2014. In previous years we had them instantly under our pilot project. Sustainability is all within LFAs. All I can do, and I am not bragging and I am not preaching, I am just telling you — and I am willing to talk to anybody that wants to hear — what we have done. I have spoken at national conferences and at science meetings here in Moncton, and most people are aware of what we have done. That is about all I can do as a representative, just tell them what we have done.

Mr. Connors: What Mr. Leblanc is saying I think is having a kindling effect already. In southwest Nova Scotia, I know, this fall they had votes up there. They suggested that they shorten their season and reduce the number of traps. It did not pass but there was a pretty good buy in. Just a couple of weeks ago, we voted to set our season back to improve the quality of our lobster and the marketing situation. Three years ago, the guy who brought it up was booed out of the hall. We had 58.3 per cent acceptance of that measure, and I have had calls since where fishermen called to say they made that move in area of 31B, and now they are seeing that they are ahead of us. They are calling me saying they want to revote, so it will have a kindling effect. If the organizations that are making these changes can be seen to be benefiting from them, then that is where the government can play a role, by recognizing these things.

If the Lobster Council of Canada promotes these fishermen who are making these changes and improving quality, everybody else eventually will have to follow along. It is a work in progress. We have accepted the responsibility, and it is a lot about organization. Mr. Leblanc is saying that they have a good organization, and we have a good organization and there are lots of others in Nova Scotia, but there are some gaps as well. We could certainly use some help from the government, by giving the organizations standards to live up to so that their decision-making process is transparent and acceptable to DFO, and then they can accept those recommendations and act on them. That will help organize the fishermen.

Senator Hubley: How do you balance the retirement of licences with the new entrants program?

Mr. Sullivan: I think you may have been talking to Mr. Leblanc directly but we have similar programs too. We have to deal with the overcapacity first because right now it is not a very attractive industry, particularly where there is overcapacity. The incomes are too low. In areas where the fishery is good and people are doing well, we have been able to attract young people into the industry. That applies to most of the things in life, if there is good pay, it will not be too hard to find people to do that. It kind of takes care of itself. We have got to make sure we can make things like intergenerational transfers and make sure that we facilitate that. It happens naturally in some places where incomes are good. Before it is an attractive industry we really have to make sure that we have got good incomes for the people who are fishing and on the water.

Mr. Leblanc: To build on what Mr. Sullivan said, when we did our buyback we wanted to share equally amongst every harbour. Everybody was paying the same so they had to gain the same. The first effect was that there was less gear in the bottom, less competition in certain areas, you could actually find certain rocks where you could stay for a couple of days and not be overwhelmed. Another point is that the catches actually went up because there was less taken away from the pie. That automatically makes it more attractive for new entrants. I think we had two, three new entrants last spring that bought into our fishery, and they were buying into what we are doing. They are seeing a future.

Mr. Connors: The new entrants are where I was coming from, and I am going back to the owner-operator and the fleet separation policies. It is very important that the licence be connected to the operator, because that is the connection, if you will, to the fish. When the fishermen are being paid for fishing the fish, without getting the value of the fish in the water, it is not going to sustain the industry. New entrants are not going to come in for minimum wage jobs, running about for somebody else. You have to look at the industry in British Columbia, the amount of rent that they pay for fish to catch. It is the ownership of the fish that is going to sustain these communities, which is why it is so important. We have a whole package of policies — adjacency policies, owner-operator, fleet separation — and they are all designed to distribute the benefit of the fishery adjacent to the province or to the shore where these communities are. They are historic communities. They are a tourist attraction and it is important that we maintain them. If we do away with the owner-operator and fleet separation policies, recognizing that the lobster fisher right now is the mainstay of those communities, it would in effect be like a relocation program. They would just dwindle away within a generation.

I want to make another point I made earlier. For the Aboriginal community, the government bought licences and bought quota so that they could build and sustain a better economy. These rural communities have the same situation. In the Aboriginal community, the individuals cannot sell the licences so that they will stays in the community. We need that same kind of support, and we keep working at this owner-operator, fleet separation and adjacency policies to make sure that these communities maintain the benefit. We have already lost so much. Our members only have 1.5 per cent of the groundfish quota down the eastern shore, and that was through corporate concentration. When I was a kid, I saw big flood lights out there just off my door. There are little hard lumps where we used to catch codfish, levelled them, mud now, no fish there. Now, if the fish ever come back, they have access to it because they historically caught it. However, they destroyed it at the same time.

We are down to the lobster fishery now and some snow crab, and the snow crab is not as protected from an owner- operator point of view because it is a quota fishery. I can give you the example of where that is going, it is half way there now. Those small communities eventually are going to be paying rent to catch that snow crab. When I started, I had 18 fishermen who wanted to catch that snow crab. I am down to two now because they do not make enough money after we pay the owner of the resource. That is why it is important that the fishermen own the resource, because it takes that to make a viable operation of catching it.

Mr. Jenkins: In response to Senator Hubley's question, in our case, in 26A, with the 33 licences we bought up in the buyback, we took 9,900 traps out of the water. The in-kind contribution from the existing fishers was another 10,000 traps, pretty near a total of 20,000 traps out of the water. It is actually more attractive to our new entrants and our young fishers now to get in than it was before we started.

The Chair: That is a good point.

Senator McInnis: Perhaps I could just ask my questions all at once and you can respond.

What vehicle would you recommend be put in place that would bring an end to the top-down policy announcements? What consultative vehicle would you put in place? The Lobster Council of Canada, I heard Mr. Leblanc say.

How will the free trade agreement with the U.K., now in the EU, help your markets and pricing? The quality of lobsters, I keep coming back to this, how well-equipped are the fishers and their vessels currently? Is it a predominantly good thing? I heard earlier today that it was a problem, particularly in certain parts of P.E.I.

There is a matter, Mr. Connors, you raised in the last paragraph of your brief. I simply want to say that it has been raised here many times in the committee, and the Chairman has asked me not to mention it again for a period of time, so I am not going to get into that but suffice it to say, and you do not have to respond, in fact, you are not to respond, but it is an issue that has been brought before us.

I finally want to say this, Mr. Chairman and members of the committee. Mr. Connors is a neighbour of mine from Sober Island. Ladies and gentlemen, the Senate was put in place for a sober second thought. It might be a good idea that we have a meeting in Sober Island at some point.

Those are just some questions and I think the most important one is how, on a consistent basis, there can be a vehicle put in place so that you will not read about the policy in the newspaper?

The Chair: Senator McInnis is a rookie. He has only been here for a few weeks, so he is still in training. The only reason I tell him not to bring up something is because there is only so much you can deal with at a time and, even today, we have crossed a few lines here. What he is talking about, we were hoping to get to next year, please God.

Mr. Leblanc: I have mentioned it to Ottawa in Moncton many times. When we have discussions with DFO, industry meets with DFO up to a certain level, and then when it gets to the ivory tower, which is 200 Kent, the doors are shut. They come back and they tell us after going through many levels and many desks, the outcome. I mean it takes off from Antigonish, one desk, goes to Moncton, five or six desks, goes to Ottawa, probably 50 or 100 desks, and then we get the decision. There are actually too many hands in the pot for the decision to be made, which to us is mind boggling. Three or four guys sitting at the table in my house with a cup of coffee can come up with something. It takes many people to come out with a decision which is simply a yes or a no, which to me is mind boggling. You have got to open the doors to 200 Kent.

When Minister Shea was there, to her credit, she was accessible. We could talk to her when necessary. When I went to Ottawa, I spent an hour and a half with her, talking about our issues in our local area. We do not get that from all ministers. So open the doors to 200 Kent, and when the decision is made, bring the industry from step one to the decision at the end, and you will do away with the top-down approach. Industry would be in at all levels. In my opinion, that is what needs to change.

You talked about the free trade agreement. I was at the airport with Peter MacKay when he made the announcement. To me, for the fishery it is all positive. When you talk about 10 per cent to 20 per cent tariffs in Europe, if you eliminate that, that is a big thing for the lobster industry or the shrimp industry. It is a big ticket item.

As far as quality practices, in our area, we went from a fishery where people would take the lobster and fire it in the pan, measure it at 15 knots and throw them overboard. Now, they take them, put them in separate pipes and measure them individually. We have also demanded that the fishery officer charge people who do not do it according to the law, because you are supposed to measure it as soon as it comes out of the trap. Putting it in a pan was illegal. We told the fishery officers to go and charge them. The whole thing has been wiped out. We are bringing A1 lobsters to the wharf.

Mr. Sullivan: I still think that ideally they are the people who would be doing the consultation. I would not want to remove them from the equation and have somebody else and another interface for it to get lost in translation. They already have the policy. I referred earlier to the Atlantic fish policy review stuff. They always put an emphasis on the consultation and grass roots stuff so I think it is written. I think they should know how to do it. I am not sure if it is budgetary cuts or if it is just that it is really micro-managed from Ottawa more now. I think there should be more decision-making power and policy setting in the regions. It has to be consistent with the overarching DFO policy, but I think the regions could have more influence because some of the policy discussions that we are getting from DFO seem to be kind of foreign. It is like we are talking different languages. Newfoundland might get fed something that may work in a fishery in B.C. or something or a model here. If the regions had more influence, that would be helpful. We definitely want to be discussing things with DFO and have science, management policy, and all the people in DFO in the room when we are discussing these things.

As to the recent CIDA talks, not a lot of details have been released, at least to the general public. The simplest answer is we will be able to compete better on a lot of our fish products in Europe. There are powerful economies and it is a huge market so it should make us more competitive and be able to increase value. There are some positives there but all the details remain to be seen.

Senator McInnis: I am not suggesting there be another level of bureaucracy or anything like that, but it seems what occurred here today in a couple of instances, is that there have been councils, there have been groups that have been abandoned. What kind of permanency can we put in place so that the fishers have a constant voice, a constant monitoring? Ministers will come and go. Governments will come and go. So what can you put in place that will be consistent and continuous in terms of that? You do not have to think about it tonight but it would be important, I think, for the committee, in the interest of all of you, to be able to recommend something. That is why I raise it. I think it is important because we hear it and I have heard it in my past on numerous occasions. As I said earlier, you have not been consulted but you will open up The Globe and Mail or you will open up the newspaper and there it will be.

Mr. Avery: I am going to answer all three questions as well because everybody else has had the privilege.

On policy announcements, the Prince Edward Island Fishermen's Association is the sole representative of fishermen in P.E.I., all 1,300. We are one organization. We have not got 40 like in some provinces and, basically, we have a hard time getting information. I am going to give you a quick example. Canfish, is your online licensing system. I made a trip to Moncton to a meeting to find out information about Canfish. It is all new to us. I can use computers as well as anybody. I should not say as well as anybody, but I can get by with them, and I got some information at that particular meeting. I have been asking the people that are carrying this around to bring it to P.E.I. and I have had no luck.

A week ago, I made another trip to Dartmouth to see an online demonstration. I do not think I should have to drive to Dartmouth. We have 1,300 fishermen in P.E.I. and I am trying to learn about it, our manager is trying to learn about it. I figure there is a real breakdown there. We have an organization and we should be the one that gets the information from the top. We will be sending you something on that to make sure you have it in your report.

Getting on to free trade, I am not a marketer of lobster. I am a fisherman but I did dabble in it a bit, I spent about five years operating my own fish mart and sending lobster all over Canada and some to the United States. Any time you are lifting tariffs, you are definitely going to enhance your prices. Hopefully, that reflects back to the fishermen. I find every time you hear something like this, it sounds like it is going to be wonderful, same as the U.S. dollar, but the price does not reflect us. What happens with the processors is they will come up with something different. They will have another excuse where they are not making any money, oil is up, the dollar is down. If the Canadian dollar went down to 80 cents, it would be a wonderful world but then they would find something else. I hope it is positive.

I spent four days in your lovely province of Newfoundland with the Fishery Council of Canada meetings. John Saxton was highly respected and people know him from, and he talked about the tariffs being taken off and their dues taken off. That is definitely really positive and I hope that helps their price because it is a challenge.

Quality is another real big issue where I fish. Starting around May 1, April 30, we set our gear, very cold. In southwest Nova, Senator McInnis knows what it is like down there, I am sure. I do not know if you have ever been taken aboard fishing boats but I have had ice in the "oar spores" of the boat. I did not have worry about that coming on the end of June, the last couple of weeks, but it has been warming up the last few years and we are addressing those. We have got a couple of hundred thousand dollars from government, and we are sharing it around to all our fishermen on the insulated tanks, some are putting in water circulating pumps.

Those are my answers to those three questions and I hope it is helpful.

Mr. Leblanc: We have been asking DFO locally to hold Southern Gulf Lobster Advisory Committee meetings more often. We did our pre-assessment on MSC and one question was how often do you consult as the Southern Gulf Lobster Advisory Committee and, I think at the time, it was five years when the last meeting was held. So you have an industry that is worth billions of dollars and you are meeting only every five years. To us, that is unacceptable. Now they want to go to a plan where we would meet every three years or so. I am assuming within these three years you are going to have bush fires that are going to turn into forest fires because they are not addressed in a timely fashion. One suggestion to make to the minister would be that the lobster advisory committee meet at least once a year. It is vital to our industry.

On accessing information from DFO, I asked to get John Hannah's report, it was an independent report on enforcement. We were being cut back and I was wondering where it was coming from. I was told it was going to be kept private and confidential. They were not going to release it to industry. So how can we talk about enforcement if we cannot have access to that study and see on what basis they made their recommendation. As you see, many changes have to happen within the department to apply openness and transparency. In some cases, it is working, in most cases it is not.

Senator Unger: Thank you, panelists. It has been very interesting listening to your comments. I have certainly learned a lot. Someone from the last panel mentioned toward the end of their presentation that the middleman is doubling and tripling what he makes on the backs of the harvesters. I am just wondering, why that is, why it is accepted and what can be done about it if it is true? I assume it is.

Mr. Sullivan: There have been comments recently by very prominent processors and shippers saying the volumes are good. Most people in the industry, the harvesters, seem to be the worst off now. There is a lot of product moving, a lot of people in the value chain, their margins stay the same or similar. If they have got a little bit of extra volume to make up on a slightly lower margin, they are still doing okay. For example, people on the shore often work on a set commission. If that is 50 cents, it may be decreased a little bit but it does not fluctuate in proportion to the overall market. Proportionately, the harvester seems to get it the worst.

I am not in the business and I do not have detailed reports but often people who are brokering are able to maintain the same amount of money and similar margins as they would on cheap product or more expensive product. Even retailers, a lot of the times, are willing to sell slightly less product. For example, it has been famous in the lobster industry in recent years for retailers to get lower price product, maintain their prices higher, and just sell a little bit less but the margins will be better. All that leads to similar profits for a lot of people in the value chain, but the harvester is still really coming out on the bottom end of it.

As an industry talking about price setting, we would like to look into fair sharing of the profits. Hopefully the lobster council can do something that can address some of that stuff. We would probably be here a couple of weeks if we wanted to get into all of it, but that is, very briefly, what I can see that happens sometimes.

Mr. Connors: If I remember Michael Gardner right, he blamed a lot on competition. There are so many competing shippers that it left that industry, the buyers, the international markets and the retailers, in a place where they can be picked off and get reduced prices. I suggest that the answer to that is organization. We really have to get our processors, buyers and fishermen to solve our own problem. We simply have to sit around the table and decide how we can get the best price, how we can create a Canada brand, a Canada industry. Right now you have American companies setting right up in the harbours and buying directly from the boat. That product is not going to China. You know where that product is going to go.

If we want to get the most out of our industry and exploit opportunities by diversifying international markets, we have to have a Canada brand, we have to have a Canada industry, and we have to organize ourselves. The government can help by recognizing us, helping us organize and getting that message out to industry that we are going to benefit from that.

In Southwest Nova, when they were asked to make those changes to improve their quality, they asked can you guarantee me I am going to make more? Well, if we make the right moves, next year or the year after, we can say, yes, we can. This is what happened here, this is what is happening there, this is the progress we are making.

Drawing things to a conclusion, we can command the market, if you will. That is where I see it going. I am an idealist, I grant you that. That is what I am working towards and I think that is the answer, if we can achieve it. I know there are a lot of other people in the industry, I talk to them everyday, who understand that and are working towards that too. At a certain point, everybody is going to have to come on board. I am convinced that that will not only solve our problem, it will solve the government's problem as well. If they can help us solve our problem, it will solve their problem. When the government was in a spot, the way we got out of it was by creating a circumstance where everybody got the most of what they wanted, and we recommended that to government and they simply enforced it when it came right down to it. Nobody got everything they wanted. That is the kind of solution I see and that is what I am working toward.

Mr. Leblanc: I can tell you as Chairman of the Lobster Council of Canada, I thought I knew how lobsters were being sold until I became chairman. I knew the harvesting part quite well, conservation and what have you, dealing with DFO, but I found out very quickly that I knew very little about marketing. I made assumptions that, after talking to buyers, were not quite accurate. To say that the middleman is making three times, I think there are many middlemen making 50, 60, 70 cents each, and that is why every time it changes hands, the price escalates before it gets to China. I think that is what is happening.

What I would suggest is that maybe the Senate or standing committee can do an actual study of how the marketing is done when it leaves the fishermen and how many hands it actually goes through. It would be an interesting exercise, and it would be helpful for harvesters because then you could circulate it back to us and educate us. I think there is some misconception as to what is actually happening. I am not defending buyers; they are quite qualified to do that by themselves. I am, first of all, a harvester, but I think the exercise would be very useful to establish exactly what is happening and when it is happening because I think a great deal of things are being said that are not quite accurate. Some are but not all.

Mr. Avery: I would just like to touch a little bit on the carapace size before this session is over.

I know a gentleman from Quebec earlier was quite upset because he felt everybody should go up in carapace size. Well, in my area, we have done lots of measures. We went from 68 to 72 millimetres and we put escape mechanisms on our traps. Every time we turn around it is costing money.

I was doing the math here a minute ago, and I fished 47 days last year. In southwest Nova Scotia, they fish six months of the year. They talked a little bit about trying to cut down the catch this year and they are getting rave reviews for it, but they have not actually done anything to hurt their bottom line. We have already taken a lot of measures that cost money. My catch in 2012 was the biggest in my history. I have been fishing with my own licence for 30 years and I ran the gear with my father for five years before that, and that was the highest historical catch I have had in 30 years. So when I go back to my fishermen they are going to tell me, if it ain't broke, why fix it.

If you look at different Quebec areas, your backyard fishermen, they had subsidies to help them in their fishery. We have never gotten anything like that. We have got a little bit of money for quality stuff like I talked about a little while ago. Maybe that is right, maybe it is wrong, I do not know, I do not fish in Quebec. Different areas have different structures and I just wanted to touch on it a little bit. The reason I am going back to that now, I do not know how much longer we are going to be here, is that I wanted to make sure that it was in the transcripts that I defended my fishermen on the carapace size.

I know there are lots of good points and people want to go up, but in the area I fish in, area 24, that is who I am speaking for today, and I think I can speak for all of Prince Edward Island, that we do not want to change things when it comes to carapace. We will do other measures, we have taken other measures, trap reductions, we have done all kinds of different measures over P.E.I. and we would like to stick to the carapace 72 millimetres.

The Chair: I want to thank you for your patience, as we are running a bit late. It certainly has been a very interesting day. We have heard lots and look forward to hearing more tomorrow.

(The committee adjourned.)