Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 9 - Evidence - May 27, 2014 - Morning sitting


GANDER, Newfoundland and Labrador, Tuesday, May 27, 2014

The Standing Senate Committee on Fisheries and Oceans met this day at 7:53 a.m. to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada; and to consider a draft budget.

Senator Fabian Manning (Chair) in the chair.

The Chair: We discussed the budget in relation to the proposed trip to Scotland and Norway in September. Are there any questions before we move the motion? Maybe we should move the motion first. Do we have a motion with respect to the budget?

Senator Wells: So moved.

The Chair: Do we have any questions on the budget for the proposed trip? Is everybody fine with the dates of September 21 to 27 and the budgeted amount of $162,488? We will be making a presentation in short order to the committee.

All those in favour? Contraminded?

Motion carried.

We also have some requests from the media to film some of our discussions here today. I have advised, as we discussed earlier, that they can do that as long as they are not too intrusive and that they be allowed. Can we have a motion to that effect?

Senator Wells: So moved.

The Chair: All those in favour? Contraminded?

Motion carried.

We will recess for a moment to prepare for presentations by our first panel.

(The committee recessed.)

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(The committee resumed.)

The Chair: I am pleased to welcome you to the meeting of the Standing Senate Committee on Fisheries and Oceans. My name is Fabian Manning, a senator from Newfoundland and Labrador, and I am chair of this committee. Before I give the floor to our witnesses I would like to invite members of the committee to introduce themselves, starting with the senator to my right.

Senator Munson: Jim Munson, senator from Ontario.

Senator Lovelace Nicholas: Senator Sandra Lovelace Nicholas from New Brunswick.

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

Senator McInnis: Senator Tom McInnis from Nova Scotia.

Senator Raine: Senator Nancy Greene Raine from B.C.

Senator Wells: David Wells from Newfoundland and Labrador.

The Chair: Thank you, senators.

The committee is continuing its special study on the regulation of aquaculture, current challenges and future prospects for the industry in Canada. We are pleased this morning to start our day here in Gander with the Honourable Keith Hutchings, Minister of Fisheries and Aquaculture for Newfoundland and Labrador; Mr. Brian Meaney, the Assistant Deputy Minister, Aquaculture; and Dr. Darryl Whelan, Director of Provincial Aquaculture Veterinarian. On behalf of the members of the committee I thank you for being here today.

We spent yesterday in St. Alban's, Poole's Cove, and Harbour Breton and have seen first-hand the activity that aquaculture is bringing to our province. We certainly look forward to hearing from you this morning.

My understanding is that Minister Hutchings has some opening remarks, which will be followed by Mr. Meaney and Dr. Whelan, and then our senators will have the opportunity to ask some questions.

Mr. Hutchings, it is good to see you again. It was only a couple of weeks ago we had you before us in Ottawa. It is good to be home in Newfoundland and Labrador. The floor is yours, sir.

Hon. Keith Hutchings, Member of the House of Assembly for Ferryland, Minister of Fisheries and Aquaculture, Government of Newfoundland and Labrador: Thank you, Senator Manning. It is certainly a pleasure to present before the standing committee. For those not from our province, you are certainly welcome and I hope you enjoyed your past couple of days in our wonderful province.

As Senator Manning indicated, I'm joined this morning by Brian Meaney, Assistant Deputy Minister of Aquaculture, and Dr. Daryl Whelan, Director of Aquatic Animal Health Division and Chief Aquatic Veterinarian. We're here today to provide some information about the provincial aquaculture industry, specifically with respect to the economic activity it generates and its growth in recent years, and the provincial government's efforts to promote sustainable aquaculture by working with industry to achieve best practices in respect to governance.

I will begin the presentation today by providing an overview of the industry in terms of employment and economic activity, and certainly discuss ways the provincial government has partnered with the industry to promote growth. Then Mr. Meaney and Dr. Whelan will proceed with a discussion on our approach to good governance, initiatives for both fish and sustainable aquaculture, and expectations of the industry in the future.

Aquaculture has become, as you've probably seen yesterday, a powerful driver of the provincial economy in recent years and it has created meaningful employment in many rural areas of our province. Many of those areas were devastated by the closure of the ground fishery some years ago. The provincial government saw the potential that aquaculture held with respect to economic gains in rural regions, and that is why we invested more than $25 million since 2006 to support the growth and development of the aquaculture industry. This investment of $25 million leveraged approximately another $400 million of private investment and resulted in significant economic gains for many communities. Since 2006 the number of finfish sites in the province has doubled, mussel production has reached a record high, and the production value of the industry in 2013 set a record at $197 million.

This growth was chiefly supported by two provincial government programs: the Aquaculture Capital Equity Program and the Aquaculture Working Capital Loan Guarantee Program. The Aquaculture Working Capital Loan Program is designed to facilitate improved access to financing for aquaculture operators and is available to companies that can demonstrate strength in all aspects of their business from technical and marketing to the management capabilities. The Aquaculture Capital Equity Program provides a minimum investment of $250,000 for finfish operations and $100,000 for shellfish to support increase in capacity, provided the company can match provincial funds with private sector cash investment.

Slide 2 shows that both the production and value generated by aquaculture operations in the province has increased steadily, certainly due to close collaboration with government and the industry.

Slide 3 looks at the economic activities of aquaculture in Newfoundland and Labrador today. Today there are more than 1,000 jobs within the province supported by aquaculture activity and most of these are in rural areas of our province. Specifically there are approximately 467 people directly employed in hatchery activities.

With respect to the processing employment side in 2012 there were 268 plant workers who were employed at processing plants that held licences to process only aquaculture products. As well, there were 932 plant workers employed at processing plants that held multi-species licences. These plants produced aquaculture productions in addition to raw material from the wild harvest. For some of these plants aquaculture activity comprises one-quarter to one-third of all production activity.

Additionally, and just as important, it should be noted that aquaculture also creates significant spin-off employment, as you can imagine, like any industry in terms of supplies in the service sector. It certainly supports SMEs. Businesses that supply equipment, transportation, packaging, nets, engines, boats and repairs and so on have all experienced increased activity as a result of the aquaculture industry.

Specific examples include companies like Newfoundland Styro Inc. in Bishop Falls that produces packaging, Fab Tech Industries which manufactures boats and equipment, and Newfoundland Aqua Service in St. Alban's which builds nets and cages.

The province's aquaculture industry is primarily composed of mussel and salmon aquaculture and, as you will see, the numbers produced by both sides of the industry have been impressive.

Slide 4, as you can see from the information, shows 2013 was a record year setting for salmon farming in our province. More than 22,000 metric tons of salmon were produced for market, and that was a 32 per cent increase over the previous year. This generated a production value of approximately $180 million.

Slide 5 demonstrates economic activity as being a tremendous boon for communities on the south coast of the island, some of which I understand members of the committee visited yesterday and saw first-hand. I certainly want to note that there are six aquaculture companies operating in the Coast of bays region. These companies maintain 87 licensed sites, in addition to hatcheries in St. Alban's, Stephenville and Daniel's Harbour.

For Slide 6 we will look at the mussel sector. In regard to mussel aquaculture the industry set a production record in 2012 as well and it remains at the level of 2013 having produced more than 4,300 metric tons of the product. This was certainly due to a rebound in the global market and the production activity generated about $15 million in production value, which is a 7 per cent increase over 2012.

Slide 7 shows the production value was achieved by supplying North American markets with fresh products and providing vacuum-packed products for European and Asian markets. In total most of the production was generated by a core group of eight to ten growers and we certainly see some amalgamation and consolidation of prior grow outs related to mussel farms.

Provincial aquaculture producers in the finfish and shellfish sectors carefully follow established security measures to ensure the product they bring to market is of the highest quality and raised and harvested certainly in a sustainable manner. This has resulted in some notable achievements. Most notably, provincial mussels recently became the first in North America to be certified to the Canadian Organic Aquaculture Standard, which assures consumers that their seafood is organic and farmed in an environmentally sound manner.

In addition, over the course of 2013 the provincial government and the salmon farming sector finalized a bay management regime that will identify ideal locations for new sites, prescribe best practices and set fallowing periods.

The provincial government has been very supportive of industry efforts to pursue national and international best practices, and evidence of that support would include our $9 million investment in the Centre for Aquaculture Health and Development, which I believe you saw in St. Alban's.

Our leadership in the area of industry governance was recognized in 2010. In that particular year the Centre of Aquatic Health Sciences of the Atlantic Veterinarian College at UPEI completed a study that found Newfoundland had the most comprehensive aquaculture biosecurity program of any government organization studied in Canada.

To further discuss the governance I will now turn it over to Mr. Meaney and to Dr. Whelan.

Brian Meaney, Assistant Deputy Minister, Newfoundland and Labrador Department of Fisheries and Aquaculture: Good morning.

Aquaculture governance in Canada is an issue of duality. There is a federal and provincial responsibility. From the Newfoundland perspective in 1986 we were one of the first provinces in the country that introduced an Aquaculture Act. This was based on a co-operative approach looking at the constitutional split between the federal and provincial governments in order to put an orderly development mode and aquaculture regulations in place.

In 1986 the Aquaculture Act was introduced and by the nature of the act it was called an act to encourage and regulate the aquaculture industry in Newfoundland and Labrador. The act was put in place in order to ensure that we see orderly development, encourage regulation but ensure that we have the optimum regulatory and policy framework in place for aquaculture to develop.

In order to work with our federal counterparts a memorandum of understanding in 1986 was signed between the federal and provincial governments which outlined the nature and responsibilities of each order of government to develop aquaculture in the province. That has been the backbone of our process to provide regulatory control and support to the industry.

The act has been reviewed and amended on two different occasions, most recently in 2012 when there was a complete review of the Aquaculture Act and regulations that were provided. This provides the legal authority for provincial management of the aquaculture industry and orderly development, secures property rights, minimizes user conflicts and assists in co-operative decision-making activities that rely on aquaculture.

Hand in hand with aquaculture regulation we believe strongly in terms of developing a strategic approach to aquaculture development. Beginning in 1990, working together with industry and stakeholders around the province, we introduced the first provincial aquaculture strategy. It was reviewed again and a new strategy introduced in 2000, which was updated in 2005.

In the fall of 2013 our minister announced it was time to have another review of the aquaculture strategy and we began consultations with all stakeholders, with industry, and with federal and provincial agencies to look at where we're heading in the next 10-year timeframe.

As a result of those consultations we published a document entitled "What We Heard." It is available on our website and we have copies for the committee as well. It is a summary of all the stakeholders and the citizens of the province and their positions and their aspirations for aquaculture in the province. That will result in a new aquaculture strategy which will be published in 2014. Again our focus will remain on a sustainable aquaculture industry and its development throughout rural and coastal Newfoundland.

As part of the process to provide good governance we believe in a process of one-stop shopping. It has been unique in Canada in that at any given time there could be up to 30 to 35 different federal and provincial agencies, departments and municipal governments involved in accessing an aquaculture licence.

An approach to streamlining this and to ensuring that all aquaculturists, all communities and all agencies are involved, we provide a one-stop shopping service through our Department of Fisheries and Aquaculture. Instead of providing 20 or 30 different applications for different processes in order to get an aquaculture licence in this province, we provide a single window of opportunity where all the information is gathered. It disseminated to all departments, all agencies and all stakeholders. We provide input, a decision-making process and work closely with them.

The process of management of aquaculture comes underneath the Aquaculture Act but also through the policies. We've been providing supporting policy framework based on species management plans. We have management plans in place for our salmonid sector and for various mussel sectors as well. These management plans allow industry to identify what their responsibilities are, what are the responsibilities of both levels of government and the development mode in which we can move forward as we develop the industry.

Concurrent with that, there were a number of specific initiatives. The minister mentioned today management agreements that were put in place in terms of how we manage the salmonid sectors in the province in terms of optimizing fish health and location of sites. Also, for example, the code of containment for the culture of salmonids in Newfoundland and Labrador is an internationally recognized code which ensures the maintenance of aquaculture sites in the salmonid sector and ensures that the fish in the cages stay in the cages to the maximum extent possible.

These are some of the approaches and the hallmark of our governance model has been a co-operative approach between all levels of government and industry to put in place practical but progressive aquaculture policies to ensure the good governance of the industry.

The province also provides compliance enforcement and inspections of aquaculture sites throughout the province. Marine aquaculture sites are inspected annually. We have a biannual code of containment inspections that are undertaken. We work co-operatively with our federal colleagues, for example Transport Canada, for inspections under the Navigable Waters Protection Act for compliance. As well we conduct regular fish health and biosecurity audits usually on a 40- to 45-day cycle throughout the year.

From an environmental management perspective we work cooperatively with the federal government in terms of fish habitat in particular. DFO has responsibility for fish habitat obviously but we work closely with them on pre- licence benthic assessments and fallow period monitoring. As the minister mentioned we have a fallow period, so after a site is put in place there is follow-up monitoring to ensure the site maintains its good health.

The new aquaculture activities regulations that are coming forward from the federal government will also support this new initiative in terms of providing and identifying to the public that we have the optimum management opportunities and regimes in place.

All of this being said the objective, as the minister outlined, is to seek opportunities for expansion and address some of the challenges that will come. These include, for example, the Coast of bays where we have just barely tapped the available areas that can expand for the aquaculture sector in the future for the salmonid industry, bays west toward Burgeo which have real opportunity, as well as Placentia Bay to the east. There is potential to double production over time but this will be industry driven and market driven as we move forward.

As the minister pointed out, we have constructed two state of the art hatcheries. These are probably two of the most modern hatcheries in the western hemisphere. One is located in Stephenville and one I believe you visited in St. Alban's yesterday. These are the types of opportunities provided and we work closely with industry to move forward.

The supply and service sector is also critical. The industry relies heavily on supply and service, and I believe you will have some presentations later today. This provides other additional economic activity and opportunity for the economic wealth of the province as well. It supports the local community tax base and has regional impacts but again provides the industry with state of the art expertise at its fingertips to allow the industry to move forward.

We work closely with industry in terms of developing infrastructure. I believe you visited some of our wharves, the biosecure wharves, to ensure that the movement of fish and fish products in and off the farm are conducted in a most biosecure manner with the greatest focus on fish health. We are working on brood stock.

We have a healthy working relationship with our federal government to look at the interaction between wild and farm salmonids. We've been working with them particularly in a review of south coast salmon stocks and providing input particularly from Dr. Whelan's shop in terms of fish health. We work closely with stakeholders and we really support evidence-based science. That is what we believe has to be the hallmark in terms of making good regulatory management of these decisions.

The mussel industry is experiencing a real resurgence in the last number of years. They're expanding and every single mussel they are producing today is going into the marketplace. There is a need to expand there so we're working with them in terms of an environmental management program, a monitoring program, to allow them to look at new opportunities particularly in the Notre Dame Bay and the Green Bay areas. I believe you will be in Notre Dame Bay tomorrow to have a look at some of our mussel operations.

Through our Fisheries Technology New Opportunities Program the department works with the industry to provide and access new technology from wherever it exists in the world to produce better quality fish products and new opportunities, to reduce labour costs and increase mechanization. Certification, as we pointed out as well, is key when we support the industry, an example being the Canadian Organic Mussel Standard, but also best practices and certifications for our salmonid sector.

I also have responsibility for seafood marketing. New marketing opportunities and value-added opportunities are increasing. We see our products hitting and looking at new markets not only in the U.S. but into Asia. Also with the upcoming reduction of tariffs under CETA, new opportunities are opening up in Europe as well.

There are challenges in all sectors. We work closely with our industry. Coastal resource user conflict is key, but I will point that the industry has done a banner job in being able to identify issues and potential interactions with the other people who are occupying the coastal zone. We generally have very few conflmicts. There has been a level of trust built up between governments and other resource users in the aquaculture industry that reduces conflicts and works up front in the licensing process to reduce that.

That is a brief overview on the aquaculture governance piece. I can take some questions later, but I will now pass it on to Dr. Whelan to discuss aquatic animal health issues.

Dr. Daryl Whelan, Director, Aquatic Health Division, Chief Aquaculture Veterinarian, Newfoundland and Labrador Department of Fisheries and Aquaculture: Senators, thank you for the opportunity to speak. I met a few of you recently so that was informative for me as well.

Just to discuss in the context of aquatic animal health, it should come as no surprise that any time you raise animals for food production the health component is an important part for sustainability, for performance and for animal welfare for those animals. It is an obligation by all. If you raise animals you must care for them.

In order to do that, whether it is terrestrial animals or aquatic animals, you really need health professionals involved. It should come as no surprise that we actually have the formation of an Aquatic Animal Health Division in Newfoundland. The government foresaw that was a strong pillar for growth, sustainability, performance, and really the obligation and responsibility for all, for industry and government.

The Aquatic Animal Health Division was formed, of which I'm the director. I had an opportunity to speak on this a day or so ago, but I will go through some of the points that are here. If you have any questions afterward I will be glad to speak to them.

The division itself provides aquatic animal health extension services and those services really are broad based. We do that for our stakeholders who really are different levels of provincial and federal governments, the aquatic industry itself, for academia, stocks that are there, fishermen, Fisheries and Oceans, and Environment Canada. We've actually been the client service provider for some of those features. It gives us an opportunity to see what is out there in the marine environment, in the freshwater environment, and to see what the animals have to really survive in and live in to sustain life.

I see the issues are both wild and aquaculture based because these pathogens and these health issues that we discuss have been there a long time and will be there for a long time to come.

The Department of Fisheries and Aquaculture actually has a robust Aquatic Animal Health Program. We have several programs that feed into this. We have an active and passive surveillance program. We go out there every 30 to 45 days on farm sites. We also respond to calls. If we get a question, "Doc, my fish just don't look right in this particular area, can you come out and have a look", we have those services available to provide that and to reach some resolution.

We have a comprehensive biosecurity audit program as well. It entails going to wharves, to facilities on land and on water, transfers of animals in and out of the province, transfers within the province where biosecurity audits are conducted and discussions are held to ensure that it is the strongest and most robust that it can be. We have a really strong laboratory diagnostic program. We operate out of three different laboratories and I will talk about that in another slide.

We conduct applied research on behalf of industry and the public to ensure that we can reach some resolution of the issues that are there and make things a little bit better for the next time. I think that is how we approach things.

Introduction and transfers of fish is a really important role that we play. The federal role is there, the provincial role is there and the industry itself, so it behooves you to make sure that the introduction and transfers of animals and their movement are done at the highest level as well.

I think it is good to realize the context of what happens. If you just took health management out of the equation at the industry level, provincial level and federal level, I think what you would see is a curious case of loss of socio- economic resources for the different regions. You would see no mitigation of a disease. We know animals that are in the marine environment, freshwater environment and all these other ones are susceptible to what exists there. If you didn't control that it would be an uncontrolled situation. It would amplify. It could move between stocks. It is really not a tenable position to be in at the federal, provincial or industry level.

There would be morbidity. There would be decreased performance. All these would be outcomes: disease spread within regions, between countries and import/export trade restrictions so at a national level it would really impact the country. It means a culling of fish where things might have been mitigated, things may have been controlled. Again, as I said, it would reduce socio-economic impact for different communities, for the provinces and for the country itself, all that to say that I think fish health is a very strong pillar for this industry as it is in terrestrial models as well.

I am very proud of and I think the government is very proud of the staff complement that we have for aquatic animal health. We have very technical people with varied backgrounds and a large educational experience component. They are highly trained. We have everyone from degrees, to post-graduate degrees, veterinarians and epidemiologists. We have specialized people for biosecurity, for audits. We have animal health technologists. We have laboratory technicians. It is a varied group but they are very mobile. They really are cross-trained in all different fields so they are staff that we really heavily rely on and again very proud of.

On the AAHD facilities themselves, we actually have three and we segregate them down to what they do. We have more of a wet lab in St. John's and that will handle some of the academic needs, some of the federal and provincial needs, and we do that component from there.

In Grand Falls we've really specialized that down to when it comes to work on the sentinel surveillance programs for shellfish, things like blue mussels or oysters, and will conduct that work.

The jewel for us is the Centre of Aquaculture Health and Development. That is in St. Alban's. Some of you had an opportunity to visit there and, as I said before, it is a very good facility. I think that it will reach real fruition and reach some international renown over time. I think you will hear more about that.

It is a very sophisticated multi-disciplinary laboratory. It is not just one. We have nine different laboratories that are in there, special for detection or trying to do things with fish health, trying to understand the environmental concerns that may crop up. We have several technologies that will help us. If there was an oil spill or if there was anything like that of environmental concern we would want to know does it affect our animals.

We're looking for future certification for the facility. Right now we have accreditation through the Canadian Food Inspection Agency. We will be going through the ISO standardization process, so 17025 for laboratories and continued work with the Canadian Council on Animal Care. As I said a virtual tour was actually conducted on May 25.

Some of the initiatives for health and biosecurity, we use these terms all the time but they are actually really amalgamated. They are really one thing. There is no real separation. Each one feeds off the other. A lot of things that we look at for the animals themselves are the site selection, where are they in a freshwater marine environment, what things can we do to optimize that and give them the strongest performance they can have and minimize any sort of fish health effects.

Siting is very important for the growth performance. You want to try and site them away from other known vectors of disease. Any wild animals that are there you try to source away. You want to be away from any regions that you know already may have something.

We deal with some bacterial viruses in the marine environment. We know they're a thousand years old or 900 years old. They have been there for a long time. You want to try to mitigate and look after the animals that you raise.

We deal with several initiatives that are part of the policy about site fallowing. We want to rotate sites as well. We want sites to be used for a certain amount of time and not used for others. If you can understand any agricultural principles aquaculture follows those. They're very sound. They've been there for hundreds of years and they make sense.

We have site species and ear class separation because you don't want naive animals next to mature animals or other types. You want to make sure they're protected.

We have several fish health strategies. One thing that we're using is a certificate of health for transfer between the Atlantic provinces. We have a highly collaborative effort with the Atlantic provinces. We are very much in tune with each other trying to harmonize our work and we understand what moves from each province to another. That has been an important endeavour for us.

There are disinfection and cleaning disinfection protocols that people follow for different things. All this to say, one question we get a lot is that it seems like you're doing a lot of things and you're treating this like this is a very harmful situation. It's not really that. What you're doing is you're trying to minimize any sort of impacts to your stocks that you're raising. It's your obligation to treat them the best that you can and it's not that there is any more to wild versus salmonid culture, versus anything else. It is really a matter of: do the steps and take the steps that you can to protect those fish.

As Mr. Meaney mentioned earlier we have further work on bay management delineation so separation of bay management areas is a very crucial endeavour. We do it based on science and it is very much evidence based. We have epidemiologists involved, oceanographers, the industry itself. There are a lot of specialists involved with trying to get separation between zones. Why you do that is because even though it seems like an open environment there are many different significant steps you can take to create that sort of separation.

Another big step for us is biosecure infrastructure, things like having clean wharves, wharves that have things externally leaving from a site and not coming back, reducing all those effects that may come about. We have things like a program for this wharf infrastructure that the provincial government has really come on board with and provided different things for wharves but also for waste water treatment. It is very crucial we understand that if you take a lot of animals from the marine environment that are wild or cultured and you have them and they go through a processing plant and there's really no initiative to try to eliminate the risk or spread, then I think that can lead to problems. The government has seen that and has a very strong waste water treatment program that was initiated and enabled that to really be not an issue after that point.

Therapeutant access is a very important issue and I think that it can't be overstated that when you have animals you have to raise them. I think of it no different than aquatic animals, terrestrial or for humans. No matter what you do in the world there will always be a health issue. If you can't save that from the human health, if you can't stop all those diseases, all those issues, how can you stop them for terrestrial or aquatic?

What's important is do you have everything in place that you could manage, you could not allow movement-spread application whether that be terrestrial, aquatic or human. In order to do that it has always been crucial that you also have therapeutant access. You have to have that kind of toolbox in order to be able to handle those things but at the same time you do things like non-therapeutant strategies and management strategies. We do the same things we humans, things like a cleaning disinfectant for your hands. We talk about that with fish. There's no difference. Part and parcel of that you do need therapeutant access. We really see that there are very limited tools available for the aquaculture industry itself.

When we talk about the therapeutants that are available they're actually under Health Canada's Pest Management Regulatory Agency and the Veterinary Drugs Directorate. It depends on which category of federal jurisdiction you come under, but there are very few therapeutants that are available. If there is a singular and focused use of that, that will lead to tolerance and resistance and really that's not the way to go. That is one thing that I would strongly discuss during this time.

Right now there are collaborative efforts and they are trying to engage Health Canada really as the top part for the Veterinary Drug Directorate and Pest Management Regulatory Agency. For DFO and Environment Canada, we really need a streamlined approval process, something that is really well prescribed, that is really set out, so that we can have a stable environment to see that the companies that want to be involved know what the standards are, the criteria, and they can be done in an efficient manner. Availability is there but at the same time we're aware that it would be a judicious use, that it would be sustainable, that it would be audited, that it would go through the regulatory process.

An issue that's discussed a fair bit is sea lice. It should be remembered that obviously this is a wild living crustacean that exists. It occurs in every ocean on many fish species. There are different types of sea lice but they do affect wild and cultured fish. So you try to site marine cages away from the salmon rivers that you know are scheduled with large amounts because you try to reduce the impact of the wild fish on your cultured farm stocks. These sites are surveilled by both Fisheries and Aquaculture and different specified managers for every company in the marine environment.

Salmon farms have actually fish health management plans in contingency that exist for sea lice. That question was asked before. The idea is really surveillance and monitoring. One thing I want to make people aware that is that when you have these stocks of fish they're not all treated. There is no growth promotant used. There are no hormones used. I can categorically say that there is no prophylactic treatment of antibiotics. Veterinarians will ascertain if there is an issue and in conjunction with industry decide what is the best method, is it therapeutant, is it non-therapeutant and some strategy. That is how that process occurs. It is a very important process. It is one that serves us well.

Therapeutant access for sea lice control is actually a world-wide issue. Jurisdictions around the world are struggling with this and there's always new work both therapeutant-wise and non-therapeutant-wise. Integrated pest management programs have come really to the forefront. It should come as no surprise. We see that in terrestrial all the time. Those are exactly the programs they implement and aquaculture is doing the same.

Infectious salmon anaemia is a virus that has also been in the news quite a bit. The lead agency for reportable diseases such as ISAV is the Canadian Food Inspection Agency. It is a very serious but manageable challenge that other jurisdictions have undergone and been through. Biosecurity efforts, surveillance, early detection and subsequent depopulation are the avenues used internationally and ISA has been detected world-wide.

With infectious salmon anemia some key points to remember is that you really need a large degree of collaboration when these issues are found. To me as a veterinarian it is not much different than dealing with any other health issue. Whether it be terrestrial based like the things that happen to wild animals and cultured animals on land or whether it is human themselves, you need this collaborative effort in order to meet these challenges. I'm happy to say that between the CFI, the producers, and Fisheries and Oceans there has been great collaboration when it comes to these issues.

There are some key issues. We require access to some of the reference laboratories to establish that there actually is an issue when it comes to reportable disease. Trying to meet case definitions, trying to expedite the process, trying to maximize and optimize fish health and lead to that has really been a challenge. I think that over time this will be addressed and the Senate committee may actually have the role to speak about that.

Provincial and producer strategies expedite ISAV management. We do a lot of surveillance that occurs on the outside, the producers themselves, enhanced biosecurity of different regions. That part is in play and the interaction with the federal role is something that we're always working on.

We conduct applied research on ISAV. We think it is very important. One of the missteps we see is that in the efforts to deal with ISA sometimes there are no thoughts about what you do for the future, how you manage this, what things you do to make it better or what things you can do. That is a very important issue to address and I think the province and industry have really proceeded on with that. Things like enhanced biosecurity, depopulation that you do, mortality control, all these are different efforts that are required to do that because there is no treatment for ISA.

We do have a requirement for further infrastructure. There are always infrastructure needs. You want approved processing plants to handle animals in that manner, wharf infrastructure, cleaning disinfection, all the infrastructure that we're talking about, personnel and equipment.

Talking about ensiling, composting, rendering, all these practices for how do you handle any of the mortalities, these are ongoing things that we work with. Some of the continuing initiatives that we're actually involved with in the division and have been very much supported by government are things like a health database, a decision support system with the industry, laboratory and surveillance information management systems, applied clinical laboratory and field trials, Atlantic provinces integrated pest management programs and our targeted surveillance for different types of pathogens that are in the marine environment or we've heard about in other jurisdictions.

Bay management areas are very crucial to this and health and epidemiological studies and sea lice epidemiology studies. As you can hear, epidemiology is a really big focus for us because we've seen how it works for human health, things like when SARS occurred. Some of your best answers came from the epidemiologists, some of the things that say what can we do to reduce these impacts in the future. We see that as very important and within the division we've encouraged that discipline.

We want to see a completion of the aquatic animal health MOU with the federal government. We want to enact the Aquaculture Activities Regulations in a manner that's very useful for the provinces and for industry. We advocate for the development and access to approved therapeutants for the aquaculture industry. This is judicious and responsible usage that we're discussing.

We have ongoing projects right now in the province. There are Wrasse projects, so some cleaner fish, looking at non-therapeutant options. We are doing network and spatial epidemiology, oceanography, ISA, BKD and different risk factor studies. We have a broad base of collaboration.

We deal with the Memorial University of Newfoundland and Labrador, specifically the Marine Institute and the Ocean Sciences Centre, the Atlantic Veterinary College, the Centre for Aquatic Animal Health Sciences, Fisheries and Oceans Canada, and both the industry association NAIA and the producers themselves.

They are extraordinary institutes to deal with. The Atlantic Veterinary College is one of the five veterinary colleges in Canada but it is very specific for aquatic animal health. It is well recognized in the world. If you go to Norway and Scotland they will know immediately about the Atlantic Veterinary College. They've been an amazing resource for the Atlantic provinces and for Canada. Thank you.

The Chair: Thank you, Dr. Whelan.

On behalf of the committee I thank you for accommodating us late Sunday evening at your facility in St. Alban's and the great presentation you made to us at that time as well. It was very educational and informative. We're going to begin our questions this morning with Senator Wells.

Senator Wells: Again, welcome to the committee and thanks very much for your presentation on Sunday night, Dr. Whelan.

Minister Hutchings, you mentioned a couple of programs that the provincial government has. I think there is a $250,000 program and some others. I know there are federal programs through ACOA and other infrastructure funds. How significant have the federal programs been in the recent success and development of the aquaculture in Newfoundland and Labrador?

Mr. Hutchings: In regard to funding programs?

Senator Wells: Yes.

Mr. Hutchings: From our perspective, I guess to go back and look at it from a Newfoundland and Labrador perspective in terms of developing this industry, any funding is crucial to incentivize those investors to come to the province to start. I guess from the beginning, I mean in our history, we've had a number of aquaculture sites sort small scale. I guess we wanted to get some of the larger players to come to drive that industry.

From that perspective the funding was crucial in making that attraction and providing those supports. Dr. Whelan talked about biosecurity, providing wharf infrastructure and all site infrastructure that is supportive of the industry as well. Funding for is extremely important overall and through our equity program we were able to attract those players too and continue to support them.

Brian, you can probably speak to further funding in regards to the federal government.

Mr. Meaney: The federal programs available for large scale projects in the province are really limited to the Atlantic Canada Opportunities Program but that has been very, very supportive. A very large proportion of the expenditures of ACOA in Newfoundland and Labrador have been made in the aquaculture sector but it's important to note that we're dealing with international companies.

Aquaculture capital is mobile. In order to be able to attract it to rural areas in Atlantic Canada it is incumbent on governments to ensure that they have the best opportunities and the best business models to move forward. The programs are complementary. We work together with our federal counterparts and with industry to see these developments. They are quite critical.

Senator Wells: Thank you for that.

This is to Minister Hutchings initially. Right now it is primarily salmonids and mussels. Is your department looking beyond that immediate future of salmon and mussels? Are we looking at other opportunities in other shellfish or crustaceans or other groundfish? What's beyond the curve and are we looking at that?

Mr. Hutchings: I guess where we are to now is: we just did a review of our overall provincial strategy. We went through and released "What We Heard", the document that is probably in your binder. We looked at salmonids and at mussels from that perspective. That has been our focus and that has where we've seen certainly growth. That's where we are to right now.

We have identified a tremendous room for growth in both of those areas, but one of the things we want to look at as we move forward from a biosecurity point of view is an infrastructure. We recognize from what we heard there is a need for additional infrastructure. We want to make sure that's available until we move that growth forward. We want to make sure that's there.

In regard to other types and exploratory work we get inquiries all the time in terms of other types of farming and that sort of thing. We're certainly open to that but we want to make sure first and foremost that we're structured in terms of our growth forward and we have the infrastructure in place certainly to do that.

At this point we're certainly not looking to expand out immediately. I's something in the long term we would certainly entertain and look at but ensure that we have the infrastructure and everything in place, the biosecurity that we need to do that.

I don't know if Brian or Dr. Whelan would like to comment on that.

Mr. Meaney: I have just one quick comment. We have a history of looking at a variety of species. We've done research on scallops, arctic char, sea urchins and lumpfish. We do have growers right now particularly in our mussel sector that are working in the oyster sector, for example looking at oyster farms in the province. There's a continuous opportunity there for industry to come forward to look at new species, but they certainly would have to be ones that match our environmental and biosecurity protocols and be able to do so.

Senator Wells: I have one question if I may. It will be a fast question but I can't guarantee a fast answer.

Dr. Whelan, the section you're involved in, the aquaculture industry, is maybe the most critical element. I mean we still need to find entrepreneurs, attract markets, and organize financing and capital markets.

You mentioned the interactions that you have with CFIA and Health Canada. Our committee is likely going to be making recommendations to federal entities. What other federal departments of entities do you interact with other than Health Canada and CFIA and what are your greatest frustrations in that process. That is an important part of what we need to know.

Dr. Whelan: It could be a long answer. I guess to be fair to the entities we deal with the ones that we mentioned, Fisheries and Oceans really for the most part, Canadian Food Inspection Agency and Health Canada on the periphery because ultimately anything that's done has to be available with no human health impacts. That's evident. That occurs. We actually have interaction with Environment Canada as well on certain occasions. That can be positive and may not be so positive at other times.

For federal entities those are really the big ones. At one time it was anything from the Navigable Waters Protection Act which used to be with DFO, Transport Canada, and all those sort of things. There's interaction there.

Senator Wells: Dr. Whelan, I was thinking specifically with the section that you deal with.

Dr. Whelan: Right, and that's what I was going to get to. It seems strange but all of those actually have an interaction and interplay with aquatic animal health. It does seem odd but there are a lot of federal entities that play a role. There are a lot of regulatory entities involved with this and I find that has an interaction on how we can do our work sometimes for the better and sometimes not so good.

Precisely things about Canadian Food Inspection Agency, I think they have the role. They are the lead for reportable diseases so when we deal with an indication of finding a reportable disease I feel our job in the provincial government is to detect, surveil and try to keep the health of animals optimized. To do that we need strong collaboration. We need strong leadership for the entities that are responsible for that. CFIA is responsible for reportable diseases in Canada whether it be terrestrial or aquatic. When those happen we want to see optimal fish health measures be initiated.

The biggest thing for us is being fast, being expeditious in a way that either depopulation occurs or the management of that. I haven't mentioned it there, but specifically some of the issues that we're working on are case definitions for the Canadian Food Inspection Agency. They wait a long time because they have to have a case definition that says without a doubt this is the gold standard. We definitely have this issue that has occurred. Therefore we can have funding and enact all of our regulatory powers to do this. That's great and that's the regulatory role that's there. That's how they follow their federal agenda for that.

Sometimes that's not the best for fish health. We want to see an expeditious procedure done. If we know very rapidly what we have detected and confirmed we would like to see that really reciprocated on the federal side saying we agree that's what we have; in the best interest let's then begin the effort of either management by processing, by depopulation, or whatever things have to occur in that realm for reportable diseases, all that to say that these issues have been raised in the past.

Movement on it has been slow but it is progressing and if things can come from this committee that can further make that collaboration more effective and faster than that will be appreciated. Fisheries and Oceans Canada has been quite a good supporter throughout these events, very supportive in describing what occurs in the wild environment and what the impacts are that might have led to things. They've been very good about this and their role hasn't been primary.

DFO's role when it comes to the Reportable Diseases Regulations really has laboratory support for the Canadian Food Inspection Agency. The one minor limitation that we see there is that it is very difficult to have these laboratories operate outside of ours. We're looking for fast responses saying that we want to confirm what the province and industry have determined. We want that fast confirmation. Without that, that has been a limitation. So we do want to see that change.

Further to that we have more of a collaborative effort occurring with the National Aquatic Animal Health Laboratory System, the NAAHLS program. It will take accredited laboratories all over Canada that reach a certain standard. They go through quality assurance and quality control. They ring test all their products. That will lead to the assurance that at one point perhaps the facility in St. Alban's will be the one that says we can say this is positive for this reportable disease; let's get on with the actions that we need to take. I think specifically those.

In Environment Canada there have been new endeavours under way. The Aquaculture Activities Regulations, if you go through it and you realize it, I look at it as more amendments than regulation but they affect sections 32, 35 and 36. It allows the destruction of things that we never thought of before. When you actually destroy sea lice it would be in contravention of a section of the Fisheries Act. Even though they're considered a pest and there are billions that are available it actually would have been an issue.

If you have a therapeutant that enters the water that has been an issue because anything you put in the marine environment can be considered a deleterious substance. Not to make light of it, but if you added salt to the ocean that's considered a deleterious substance, if you added brine, or if you added hot water to the ocean that could be considered a deleterious substance.

In the past what has occurred is that Environment Canada had the enforcement ability for the DFO Fisheries Act and regulations and they could enforce that at any point if anyone did those things. That needed to be really harmonized to make sure that kind of vaguery in the way that regulations work was really handled. There has been some agreement reached on that and I think soon when it has gone through the gazetting process you'll be able to do the judicious use of any of those products whether it be brine, salt water or a therapeutant.

The only thing that remains I think is really to ensure that with Environment Canada Disposal at Sea Regulations don't supersede all the good work that has happened. At any point you don't want to have three or four federal agencies, the province and the industry understanding what is available and what you can do under prescribed protocol and have an intervention by another federal agency that says that's not right. A directive could be issued with fines, jail time and those sorts of things. That kind of regulatory ambiguity we hope to see changed.

Senator Munson: Thank you very much for being here. Once again, doctor, thank you for the other night. It was a great entry into the environment of aquaculture in this province.

I am going to put two questions together. Mr. Meaney, you talked about 35 agencies and one-stop shopping. If I wanted to invest in a fish farm aquaculture in this province where would I start? Who would I talk to? How much money would I have? How do I get into this environment if there are just a couple of entities here that are running the fish farms?

There is the politics of it all and there is the investment part of it all. How do you get from 35 agencies to one-stop shopping to make it comfortable? When you talk about as the minister said opportunities here, there is a lot of fish it seems to be in this big pond. That's the first question.

To break that down, No. 2 is on the insurance part of it all. It seems to me it's a great deal of risk when you're involved in this whether it's destruction by the environment or disease.

We heard from Dr. Harpreet Kochhar, who is the Chief Veterinary Officer at CFI. He recommended that since the federal government is spending a lot of money to compensate people perhaps private insurance is the way to go for people. Would the Government of Newfoundland and Labrador support that kind of approach as well?

They are two separate questions but I think they're connected.

Mr. Meaney: I would just preface my comments that I think you will have other witnesses today who have made those investments and that may be a question you wish to pose to them.

Aquaculture is high risk. Any farm production system is a high risk business. It takes a lot of planning, a lot of knowledge and a lot of capital to do so. In terms of how do you invest part of our role is to facilitate with industry, to identify opportunities, to work with them and to identify sites, partners that may be available in our province, and to work together co-operatively in a solid and sound business model that would work in our particular environment.

We've been very lucky in terms of dealing with the companies that we have present here. They're very highly professional, highly qualified and extremely knowledgeable on the industry. That's the basis on which you need to invest. Access to capital is there for any good business plan. I think that's probably regardless of the industry that you're talking about.

Aquaculture in particular requires a specialized expertise and a specialized investor to work with you. We've been lucky to have Canadian companies in particular. I think it is an important point to make that in east coast operations these are entirely Canadian companies. These are locally owned companies that are Atlantic Canadian based and support Atlantic Canadians, but they access international capital markets to be able to do what they need to do.

As the minister indicated, over the last number of years we've seen that our $25 million of investment in the capital equity program has levered in excess of $400 million of private capital to be able to take the salmonid sector, for example, to where it is today. These are critical pieces.

From a government perspective I believe our role is to provide a road map, an ability to go through the program, and to provide everybody with all the information they need to know from a regulatory perspective and be able to take that into account in their business planning.

Along with the supports that were identified earlier like our capital equity program or ACOA's Business Development Program, that's the partner on smart business plans and to be able to see them realized in coastal communities around the country. Our role is to facilitate that.

As I mentioned earlier our directive is to encourage and regulate the industry. We take both sides of that responsibility very seriously and we want to see solid business plans. There are people out there that can work with you. If you have investment I think there are people in the room who may want to talk to you after the meetings today.

To your second point on insurance, the companies do carry insurance. Usually these are specified perils policies that deal with specific initiatives, specific issues. I think it would be wrong to presume that there is no insurance scheme available. There are private insurers that provide aquaculture insurance for specified perils. I think your comments from CFI probably relate specifically to the reportable diseases and the ability for compensation under the Health of Animals Act which is available to all farmers of Canada, terrestrial or aquatic. I think that's a different issue. Reportable diseases are ones that are unique or new to Canada and that insurers wouldn't probably look at but for the everyday perils companies carry insurance.

Senator Munson: Thank you for that. When do you think you'll see one-stop shopping?

Mr. Meaney: I think it exists in terms of the licensing process right now. As I said the key to the licensing one-stop shopping piece is that we provide one window, one application, one form that comes into one office as opposed to trying to track down 15 to 35 individual companies. That exists today in our province right now and it has worked quite well.

Senator Munson: Dr. Whelan, are you satisfied that there are enough biosecurity protocols in place to minimize the potential threat of ISA?

Dr. Whelan: Could you repeat the last part, please?

Senator Munson: Are there enough biosecurity protocols in place to minimize the spread of potential threat of ISA, infectious salmon anaemia?

Dr. Whelan: One thing to realize, and maybe I didn't say it enough, is that when it comes to disease or health issues in general all the practices that you take help minimize whatever eventuality that you have. So it's a matter of a gradient or a degree. There are biosecurity practices in place on every farm site I would say in Canada and in every region.

Protocols do exist. There are international standards. There are ones that are done provincially from the industry level. Those do exist. Is any protocol that you have perfectly going to prevent any disease or health issue? Categorically, no, because as I said before if we can't do it with the efforts that we've taken for human health world- wide and we can't prevent anybody from having disease or health issues, certainly you can have the same expectation for terrestrial or aquatic. There will be issues. What it really comes down to is the degree and the level of sophistication of the biosecurity programs.

Am I satisfied with what we have in Newfoundland? I would say yes and no. I'd say that we will always strive for more. We are happy that we've used every avenue we can, checking international standards, visiting different international jurisdictions, incorporating everything that we can within our protocols in Newfoundland. The industry takes it to heart. We take it very seriously and I would say it's an evolving process.

So am I happy? I would say I'm content but we always strive for more and there's always going to be new improvements. Whether it be technological advances, new types of cleaning and disinfection, new types of equipment, new management protocols, the incorporation of vaccines or other, that's an evolving process. I think it'll never be a point where I'll be happy but that's the way it should be. We need to strive for more.

Senator Poirier: Thank you for being here. Nice seeing you again, minister.

Just a couple of questions and if there is time for a round two I would actually probably have more than a couple.

The first question I wanted to ask was you have in place your Aquaculture Act and your aquaculture regulations. It has been in place since 1986 or 1988. I'm not sure of the date but around that time. Are you aware or can you tell me are there any other provinces that have a similar act in place like that, and to what advantage has it been to the farms or the people involved in aquaculture to have that act in place? What difference has it made in their life?

Mr. Meaney: Certainly most of the coastal provinces have Aquaculture Act or regulations. There are different models across the country. In British Columbia, for example, DFO is the primary regulator as they are in Prince Edward Island as an example. Nova Scotia and New Brunswick both have aquaculture acts. The province of Quebec does as well. Ontario uses a different set of regulations but has aquaculture regulations.

Clearly from a business perspective, a biological perspective and from an economic and social perspective it is important to have a set of regulatory guidelines in which industry knows how to operate its business in the metes and bounds in which it can. It's a benefit for our public as well as the private sector. It's certainly been critical in business aspects.

For example, if you look at one particular section of our act, I mentioned the duality of aquaculture in Canada. The provinces' legal requirement to legislate aquaculture falls under a section of the constitution dealing with property and civil rights. It's a unique circumstance where a mussel grower, a trout grower or a salmon grower actually owns a piece of property, an animal located in a public waterway. That property, as a civil rights piece, is critical in terms of being able to use that fish, for example, as collateral under the Canadian Bank Act. It has had some very, very practical approaches and responsibilities under the act but again clearly as in any industry what are the metes and bounds? How do you operate in confines to ensure in your total regulatory regime of ensuring that the province is managed in an appropriate and environmentally and sustainable way? The Aquaculture Act provides guidance and information and process in terms of accessing licences, permits and approvals to be able to do so but also outlines the responsibilities and penalties if you don't operate in an appropriate manner.

Senator Poirier: Has there been any involvement from DFO in writing the act to see if there are any similarities from one province to another?

Mr. Meaney: Our interaction with Department of Fisheries and Oceans is largely driven, as I indicated earlier, by this memorandum of understanding that we entered into with the federal government in 1986. Most of the provinces did so around that same year and they've been updated on a regular basis.

The MOU provides us with definitions and some markers to say here's what the federal responsibility is and here's what the provincial responsibility is. I think the acts on a provincial basis across the country have very similar components in terms of what is aquaculture, how is it licensed, what are the responsibilities of the province, what are the responsibilities of the operators and the other interaction between agencies, provincial as well. There are quite a number of similarities.

Senator Poirier: My second question is: In your slide on page 8 where you are talking about the challenges, and we are talking about mussels, the first one you have is coastal users' interaction/conflicts with fishers and the cabin owners. Being from a coastal area in New Brunswick I've heard of that specifically in the years when I was a member of the legislative assembly also. I am sure the conflicts are probably similar to the ones we would hear down home which would be affecting the tourism industry, property taxes living on coastal areas and different things like that. Can you share with me some of the resolutions that were able to come about in overcoming some of these challenges?

I guess the second part of the question is: I know we talked about in an earlier slide the number of employment opportunities that have increased with the aquaculture business in your province. We see that in different provinces also. We were talking about roughly between 800 to 1,000 here in Newfoundland. Has there ever been any study done to see if there have been any opportunities lost on the tourism sector because of the aquaculture business? Is that something that has been looked at? We've heard rumours of that and I am wondering if you have some information on whether there is fact behind the rumours or not.

Mr. Meaney: I've been involved in the industry 30 years. I would have to say that first when the industry really started to expand in coastal communities there was a wariness of what this means for interaction with primarily fishers at that time. One of the hallmarks that we have and one of our policies that we have is that no, we will not provide a licence that would displace traditional fishing activity. That's the process that we started with and that continues today.

Our licensing process involves, for example, referral to the fishermen's union so the local fishing committees are aware and local communities are aware of an activity that is being proposed. Early on back in the 1980s and early 1990s I think we had a lot of discussions and some lively meetings with cabin owners, with fishermen, with other marine resource users and recreational boaters. I think over time there has been a level of trust and we've seen the industry take steps which demonstrate their own responsibility and their awareness and respect of the other marine resource users.

I think it really comes down to that. We have mussel farms, for example, that specifically set the width between their mussel lines to allow lobster fishermen to continue to fish lobster in and about their sites. We have companies that will put tie-ons so that fishermen can attach bait nets in the spring when they want to go fishing. So it is a co-operative approach.

I think the other big piece for Newfoundland quite frankly is that many of the employees and operators of aquaculture sites have come from the traditional fishing sector. They bring that knowledge, very valuable knowledge, from working in coastal communities back to the companies and make companies work better because they've got experienced fishing people who know the waters, know the wind, know the ice and those types of things. That is a continual process.

On the tourism side in particular I would have to think we haven't seen many if any interactions. I can recall there was one concern raised about a kayak operator on the south coast who wasn't aware there was a salmon farm in the area. Part of our referral process is that we discuss with our Department of Tourism and also for example historic resources. So we wouldn't put a site where there was a ship wreck.

There's a co-operative approach. In all honestly, in travelling around the province, we've had minimal conflict. For what conflict has been there has been very practical resolution to that process.

Senator Poirier: In slide 3 you talked about your increase in 2013, an increase of 32 per cent. Can you share with me if that increase was due to more farm openings or an increase in the volume of salmon, or what was the increase based on? Why was there such a nice increase in one given year?

Mr. Meaney: It was an increase in production. The existing farms were actually producing more product.

Senator Lovelace Nicholas: Thank you, Chair, and welcome. My question is for Dr. Whelan. First which is politically correct, fish or animal?

Dr. Whelan: Either is fine. We say the Aquatic Animal Health Division or we specifically say fish, and by fish we mean finfish and shellfish, to be clear.

Senator Lovelace Nicholas: You mentioned that you do inspections on fish if the farmers find something wrong with them. Do you do it on request or at random?

Dr. Whelan: I tend not to use the word "inspection" because that's the wrong connotation. We do visitations. We do the scheduled ones for active and passive surveillance. It's a program that we initiate doing two things. We go to each farm site whether it be on land or in marine environments. We do that every 30 to 45 days. That's our goal. That's what we do.

In shellfish we do biannual visitations where we go out with a time frequency to check on the shellfish two times a year. We vetted that surveillance program through the OIE, through one of their key members for shellfish surveillance. So that's the model that we follow.

When we go there we go there for two reasons. One is a regular timely one that's there. It's crucial for me because I think that leads to a faster detection if there's an issue of trying to mitigate things before it becomes more of an issue, and I think that's been very helpful. The other one that we do is really a surveillance program where we can get a phone call. We can get a phone call or a veterinarian can get a phone call that states, "Hello, Doc, I'm seeing some issue. Can you come on out?" We also facilitate those. To say that for every single site 30 to 45 days is true, to say that there are more if there's an issue presented, we'd also go for those as well.

We think that gives you that robust system to try to get to issues fast and early. Veterinarians maintain a confidential relationship with their clients. Their clients are very easy going about saying "I'm starting to see something. Please come out and have a look". That rapport is really crucial.

Senator Lovelace Nicholas: How many farms are there in this area?

Dr. Whelan: It's an unusual question because it comes down to timing and frequency. How many farms that exist versus how many are active are two different things.

When one of the jurisdictions in the early days said they would like to have a farm site, we thought about it a long time and deliberated. It really makes more sense. They actually say you should have more sites, not less. Why? It is because you use a site for a duration. Then you let it lie fallow and for the upcoming year you'd use another place. That's just simply an agriculture practice that has been done for a thousand years. By fallowing it allows all these good things to occur.

That is why the two different numbers exist. One is how many farms that exist versus how many are active at any particular point in time, and in every region that differs. The numbers are here about how many farms exist but if you ask me today versus about five weeks when more of the stocking happens there would be more active sites.

Senator Lovelace Nicholas: Thank you very much.

Senator McInnis: Thank you for coming. Here in Newfoundland it sounds as though you're quite progressive and proactive in terms of your aquaculture. That is not the understanding we have of some of the other provinces in Atlantic Canada. It almost appears at some point that when you did your MOU with the federal government there were certain aspects of it that would almost appear to be federal jurisdiction, and I refer to animal health. When we had CFIA before us they were the ones that said they dealt with that and Health Canada said that likewise. I'd like for you to comment on that.

I have a couple of other quick points with respect to your act. I note that it requires financial or other security for restoration. Are those dollars paid up front? What are the details? How is the quantum arrived at?

Fallowing is an issue. For example, in Nova Scotia there was a company coming in to locate in a particular area of the province. They stated, "We're unique. We fallow our pens". So you have it your act saying fallowing and processes to mitigate environmental degradation.

How long does a site have to remain fallow and what takes place? Does it just sit there? Do you do anything with it? Also your act calls for disposing of fish waste. How is this done and where is the waste taken?

Those are just a few questions and if I have time I'd like to ask a couple more. Particularly I'd like to have time to talk about the bay management areas.

Mr. Meaney: In terms of the relationship between the federal government and fish health I think the important distinction—and it's not dissimilar in terrestrial health in Canada as well—is that generally the federal government has a responsibility for the national biosecurity piece. We don't want to see any new potato disease show up in Prince Edward Island. We don't want to see any new cattle disease show up in Alberta. The federal government has safeguards and international protocols that ensure that the transmission of animals and meat products reduces that risk. That's their primary role. It is the same in terms of the aquatic animal piece. They set the ground rules for import/ export, largely their major responsibility, but also deal with the reportable disease piece that Dr. Whelan referred to, for example infectious salmon anemia.

The provinces in every jurisdiction across the country have a role in terrestrial and aquatic animal health in terms of dealing with in situ or localized issues around animal health in our communities and bays that surround our provinces, production diseases or its management of that in terms that we have the optimal fish health piece.

While it may appear to be an overlap there's a clear distinction in terms of roles and responsibility. We deal with it on the farm site in terms of ensuring optimization of health within our own environment and communities. The federal government's responsibility is in ensuring that we have the legislative and inspection barrier that prevents any new diseases from entering Canada and relationships with other trading partners in our adjacent countries that we share borders with to ensure those optimal health pieces.

Senator McInnis: So the federal government doesn't come here to do any inspections. CFIA has no involvement whatsoever.

Dr. Whelan: I guess to go back first, it may look like an overlap of aquatic animal health. It is because you're talking about different categories of animal health. There's a reportable and notifiable disease issue that is handled nationally and down at the local level by CFIA. In truth, if you didn't have the interactivity between the province and the industry along with those, you wouldn't get everything on the periphery of what we're talking about.

Reportable and notifiable diseases don't occur every day although maybe the Food Inspection Agency thinks so right now. It's not something that is a commonality that we'll deal with every single time. It's an eventuality that the country has to be ready for.

What is of more importance is regular diseases or endemic pathogens that might exist in Canadian waters. They've existed and they always will. That's something that you'll have either in a freshwater or marine. Those are the ones that really have primary importance that you want to deal with. The province and the industry play a crucial role in that.

The federal one, the reportable disease one, sounds like it is completely separate. There is no question they're the lead entity for it, but without the province and the industry doing subsequent surveillance all around that region—a buffer zone, a control zone—you don't get that truly coordinated effort that leads to good management. That's part of where aquatic animal health works. It is all those levels.

It's not to say that's the only interaction because we also do fish health for the federal government as their client. We do that if there's a wild fish condition or something. We'll actually provide that health service and diagnostics and report back to those entities.

The other thing that happens is that there is the Department of Fisheries and Oceans Introduction and Transfers Committee so that when you move animals within the province or around it looks clearly on paper that's the lead for that. That has been now segregated and the health portion comes out to CFIA. The other components for habitat and genetics are actually handled by DFO, but what was really not clear there was the role of endemic pathogens that already exist that CFIA really doesn't have an interest in. Those ones are now being covered through DFO's Introduction and Transfers Committee, the province and the industry which will continue to do that surveillance. That's how they kind of mesh. I hope that explains that.

To proceed on with your fallowing question, we've done a lot of different work on fallowing over the years. It has been an important issue because we saw early on that you really need to fallow. I believe in it strongly. Inherently as a veterinarian I think that's a very strong practice to have. That was incorporated a long time ago but to do that you need the sites available. You need sites that can lay fallow.

What duration that you have will be different in every single jurisdiction. If people consider there's a mismatch between provinces and how long, we've had in some areas a one-year fallow. We asked that the site remain fallow. Why wouldn't another jurisdiction? Why wouldn't everybody do one year? It's because the environmental conditions are different in every region.

We look at some of the Newfoundland waters and we see 400 feet of water. You have all these conditions that really give you an optimal site: good production and good flow. That's really crucial but we also believe for a whole bunch of different factors that fallowing is a crucial piece to that. You have to have enough other sites available so in Newfoundland that can be the term that's there.

What will change is that we now have management agreements in place. We do evidenced-based decisions now so we have validated scientific information on how things travel and how they move. That will inform more on fallow so fallowing can be less or more based on that. So it becomes more of a truly scientific focused decision that you make for fallowing.

Senator McInnis: So the restoration of a site, is that in connection with fallowing?

Dr. Whelan: To me as a veterinarian its primary for health but obviously the secondary factor is that amount of fallowing allows for any other targeted events that happen for them to be remediated.

Senator McInnis: This financial contribution that is given I take it that's analogous to a security deposit. Is that paid up front? Who holds it?

Mr. Meaney: We're in discussions currently with the industry in terms of looking at financial obligations. The reference you make is in section 4.2 of our act. It deals with the event where a farm would fail and the site would have to be restored in a physical sense.

There are a number of models around. We have had discussions. Industry apparently maintains a lump sum of finances to address that in the event something happens. The recourse for the province under the act is that if you didn't have the funds available to do so then we could enact the powers of the act and go seek legal recourse against you.

There are two points I'll make. One is that the opportunities for requirement for restoration have been very, very small in the province and secondly we've had some experience with the cost of doing restoration. It's fairly reasonable. It's less than $100,000 for a major site. We're in the process of working with industry. They've come forward with a proposal in terms of how to provide that surety on an industry-wide basis as opposed to an individual.

Senator McInnis: The bay management area which you suggested is based on science to a great degree, it's something that I think is quite important and probably very helpful. Is it similar to zoning? They have to have apparently a minimum of three bay management areas where they put their farms. Explain to me how it works, and is it zoning?

Dr. Whelan: Each word has a specific definition so bay management areas have been chosen because it's a regionalized approach within that one discrete area, a bay managed area. The misnomer is the word "bay" because it's not necessarily in corporate to a bay. That is because a bay in Newfoundland versus a bay in New Brunswick is completely different. In some fjords in Newfoundland you could fit a whole industry of aquaculture in that area. The misnomer is the word "bay" but it is an area.

What's the difference between that and a zone? Zones are generally used for the World Organization for Animal Health, the Office Infectious des Epizooties. They use the word "zonation" and that's zonation has different control measures and different parameters. It has more to do with what's a defined response to something.

We see zones and zonation used in terrestrial medicine. With things like avian influenza there were zones, control zones and buffer zones. We would use something similar if you have a condition that you're under management. I think the reason the word "bay management areas" are chosen is the most specific and precise usage of words. Discrete activities happen within that area. You look at a marine environment, a freshwater environment and it looks like it's free-flowing. It looks like how could you do anything in that area. How could that be separate from another one? We use strict science rules, things like epidemiology where you look at risk factors and studies. You use oceanography where you understand currents, wind driven, the strata in the ocean and how things operate. You look at the zonal influence when we say "zone" and a "coastal zone", so how does that change?

We found in Newfoundland there has been a tremendous investment by the provincial government. It was seen as something that should be done, that we should have some strict evidence to inform these bay management areas. There has been in the neighbourhood of 450,000 per year for the last couple of years where we have our own vessel that has actually been leased from the Marine Institute, great collaborators in this. We have oceanographers on board, veterinarians, health people, development people and a multi-beam sonar suite. All these things are brought to bear and you go out and you start mapping the region along the coastline, along the areas where you think aquaculture is and will be. You want to understand how do things flow from this certain segment to another.

If there's no flow that leads you to believe now we've got a zone, that we have something that you would say would be "zonal". I look it as more of an area. That's a more precise term because you do the activities within that. We say there is then truly separation. If something can't travel or travel well from this region that you've chosen to another one, you've now created a biosecurity barrier that actually exists even though it looks like there is none. All the measures that happen is what will move from one region or one bay management area to another, control those, cleaning and disinfection should occur between each of those. The practices of stocking, when you stock, when you remove, when you harvest, when you do any sort of therapeutant or non-therapeutant control, they will be across the area. That gives you that greater of confidence you're doing things to improve things for the future.

Senator McInnis: Are they normally pristine areas?

Dr. Whelan: I would call everything a pristine area.

Senator McInnis: In Newfoundland.

Dr. Whelan: Isn't Newfoundland pristine? If you had an opportunity to visit I think you'd feel that. We're pristine. I think it's beautiful. I think the conditions are great. Everybody in the community loves their community. In all marine environments or freshwater environments there exist pathogens. They just do exist. If you want to call that pristine I do because within wild fishes there are pathogens found. Things are detected that exist. Are they still pristine? Absolutely but you do have to have an awareness that this exists.

Senator Raine: Thank you very much. One of the advantages of going last is that most of the questions I was going to ask have been asked. I appreciate your being here and I have a couple of very small points.

Have you ever experienced conflict between the siting of a fish farm and the people on shore where they didn't want it in front of their property and how would that be dealt with? Do people on shore have any rights in terms of what they call their pristine view, or are you sort of cognizant of that and is there general agreement that this is good for everybody?

Mr. Meaney: Our land tenure system in Newfoundland and Labrador is based on a Crown land basis and riparian area. Thirty-three feet from the high tide mark is public property. You may have a piece of property that overlooks the ocean but you have no direct ownership or restriction on that 33-foot area. We certainly consult. We take that information into account when there's an aquaculture licence present. There have been some concerns expressed however this is coastal Newfoundland and Labrador. There are fishing vessels and other vessels moving back and forth in front of your property every single day and it's presumed to be part of our process.

That being said, again we work with industry. If we can avoid disrupting somebody's access or view we certainly strive to do that, but from a legislative perspective no, there is no protection given to the shorefront properties that they have exclusive rights to viewscapes, for example.

Senator Raine: There's nothing on your application for tenure for a licence that says you have to have a little check box: "Do your neighbours agree?"

Mr. Meaney: The licensing process requires the company to meet with the community and meet with other resource users. If for example there were cottage developments in that area they would have to demonstrate to us that they've met those concerns and we would follow up on it if there were any concerns addressed with the opponents to it.

Senator Raine: The other question I have is completely different. We did hear that there's a concern about transporting the fish to market in an efficient and fast way where sometimes the trucks can't get on the ferries. In your plans for expansion are you taking that into consideration, the ferry access to the mainland for exporting the fish?

Mr. Meaney: We're very cognizant that the market access is the most critical point. Industry together with the province has made representation in terms of identifying priority for fresh and live seafood access on vessels that exiting the province. We continue to press those points with Marine Atlantic and support industry in terms of identifying opportunities where a priority setting basis can be identified for fresh and live seafood.

Senator Raine: Is that in place or is that hopeful?

Mr. Meaney: That's hopeful. The current priority setting process from Marine Atlantic doesn't necessarily segregate out seafood as a priority commodity exiting the province. Granted there is a difference between frozen products but the critical concern for us and industry is that fresh and live products—lobster, mussels, freshly harvested fish of any species—need to be able to get to market as quick as possible to be competitive in the market. Fresh is critical in the marketplace and travel time equates to freshness.

Senator Raine: Who owns Marine Atlantic?

Mr. Meaney: The federal government.

Senator Raine: Are they co-operating on this request?

Mr. Meaney: We've had numerous discussions and the industry has indicated to us that they are not satisfied with the current process in terms of access to priority setting on the ferries.

Senator Raine: Perhaps it would be good to get a little background paper on that issue for the committee. Thank you very much.

The Chair: Thank you, senators, and thank you to our witnesses this morning. It has been once again a very interesting and informative discussion and certainly a great way to start off our public hearings here in Newfoundland today.

Minister, if you have a couple of closing remarks, we will finish up.

Mr. Hutchings: First and foremost I want to thank the committee for hearing our presentation. I certainly hope we answered your questions. I want to thank staff, Dr. Whelan, and Mr. Meaney.

I hope you certainly get insight into what is happening in Newfoundland and Labrador in regard to aquaculture industry, how it has progressed, and certainly first and foremost biosecurity and making sure it is sustainable and keeping those pristine waters we talked about. Collectively I think we've done a good job. There are challenges but they're exciting times in terms of how the industry is going to grow.

Thanks for coming and certainly enjoy the rest of your stay in our great province.

The Chair: We're pleased to welcome our second panellist of the morning. I would ask you to introduce yourselves first before we begin, please.

Cyr Couturier, President, Newfoundland Aquaculture Industry Association: Good morning, senators. My name is Cyr Couturier and I'm currently the President of the Newfoundland Aquaculture Industry Association.

Miranda Pryor, Executive Director, Newfoundland Aquaculture Industry Association: Good morning. My name is Miranda Pryor. I'm the Executive Director of the Newfoundland Aquaculture Industry Association.

Jennifer Caines, Project Manager, Northern Harvest Sea Farms NL Ltd.: Good morning. I'm Jennifer Caines. I'm Project Manager with Northern Harvest Sea Farms Newfoundland Limited.

The Chair: Thank you for taking the time to join us here this morning, and my understanding is we will have some opening remarks. We'll give you the opportunity to present those and then our senators, I'm sure, will have questions for you. Certainly I want to thank you on behalf of the committee for your assistance over the last couple of days in organizing and helping us with our tour of the south coast. It was very memorable. The floor is yours.

Mr. Couturier: Thank you.

My biography has been handed out. I'm a marine biologist. I have 35 years of experience in sector development for aquaculture across the country and in Newfoundland in particular. I would like to briefly give you a few comments about aquaculture globally and put it down to the Newfoundland context. Then my colleagues here from the industry will speak a bit more about the finfish industry in Newfoundland and Labrador.

My voice is going. I guess it's a result of spending too much time on the Bay d'Espoir highway. I don't really know.

Global populations are growing of course and we will exceed 9 billion inhabitants on the planet by 2050. The United Nations has recognized that aquaculture is one of the fastest growing food production sectors globally and seafood in its entirety is currently the single largest source of animal protein eaten by human beings on the planet. An additional 30 million metric tons will be required to meet global demand at present levels of consumption. So even if we don't increase production from any source of seafood, at current consumption levels we will need another 30 to 40 million metric tons.

The United Nations reported on and released this week its status on world fisheries and aquaculture. It recognized farm seafood as an essential component of filling this gap. On a global basis farmed seafood accounts for 50 per cent of the seafood eaten by human beings. About half of the world's farm seafood consists of finfish species, feed to a certain extent, and half of self-feeding species such as seaweed, filter-feeding mollusks and so on. Over 50 million fish harvesters and fish farmers rely on seafood as a source of income, food production, employment and nutrition. A much larger portion of about 500 million people rely on seafood as nutrition.

Seafood, including farmed seafood, has the least carbon footprint of any food produced by man. On a global scale humans utilize nearly 80 per cent of our arable land and this land comprises less than 20 per cent of the world's food producing zones. So the opportunity is great for farm seafood to continue to supply food for humankind.

All seafoods provide incomparable sources of healthy delicious nutrition including excellent natural sources of essential oils, minerals, vitamins, db12 and a variety of other essential minerals that we need as human beings.

In Canada, we've been farming the oceans for over a century, in fact before Confederation, mostly for restoration and recreational fisheries purposes. We currently rank in terms of farm seafood 27th on a global scale and I think 22nd in terms of fisheries. In the fisheries alone we were in the top five or six in the 1980s. So we're losing ground in fisheries and we're also losing ground in terms of aquaculture. Our total contribution, even though it's a $2 billion industry in Canada, is less than 0.5 per cent of the global supply. The total value exceeds $2 billion to the Canadian economy and nearly 30 per cent of the value of all Canadian seafood comes from farm sources. Much of it is from farmed salmon.

There is lost production in shellfish and finfish due to regulatory barriers and many of them are at the federal level. We can talk about that if you wish but there's certainly a large gap. The gap is widening, for example, on salmon in spite of recent increases in Newfoundland and Labrador from the Canada perspective. Our share of the global market has decreased by over 40 per cent in the past decade. That's just comparing salmon and salmon.

The total farm production of Canada for finfish occupies less than 0.1 per cent of the coastal space available and in total an area less than Stanley Park in Vancouver. That's for all the salmon farms across all the provinces. Just in comparison, the airport and tarmac in Vancouver cover a much larger area of productive fisheries habitant than the Fraser River Delta. That's another example to give you a picture of how not dense aquaculture is across the country.

Finfish culture in Newfoundland and Labrador: Newfoundland has a desire and a responsibility to produce healthy and environmentally sustainable seafood to feed the growing demand. Salmon production began in earnest in Newfoundland a little over a decade ago—and Jennifer will talk to you about their efforts—well after all the major declines in natural salmon stocks occurred here and elsewhere.

We are currently the second largest producing region of Canada in terms of finfish next to British Columbia. At least we like to think so. We haven't seen the statistics yet for New Brunswick for last year. Conditions for farming salmon are different from those of the Maritimes and British Columbia. Most likely here in Newfoundland they're similar to Scotland and Norway in terms of the social, environmental and maybe to some extent economic conditions. Two of the world's leaders in salmon farming are Scotland and Norway.

The sector is worth over $200 million to the Newfoundland economy annually now, as the minister mentioned that this morning, and is supplying around 1,000 full-time jobs in rural areas and more indirect employment. In the last census the only rural areas of Newfoundland and Labrador showing declines in the rate of out-migration, or even increases in population during the last census of Canada, are farming regions of our province. Maybe it's coincidence but that's the case.

For Newfoundland and Labrador, just to finish up, there are a number of challenges to maintaining or increasing current levels of production in the finfish industry, including access to infrastructure, broadband and cellular, wharves, roads, transportation and service sectors, to name a few. There are ongoing needs that are difficult to overcome.

The capacity of Fisheries and Oceans to undertake science for the benefit of either fisheries or aquaculture we believe is severely limited. Nationally there are very limited targeted programs for either sector for research and development in aquaculture. There are a few locally but nationally there are very few.

We will find solutions to those challenges however as the opportunities for Newfoundlanders and Labradorians and Canadians are just too great. The regulatory regime at the federal level in particular is inadequate to manage fish farming. The Fisheries Act is an antiquated hunting act. That's what it was designed for. It's not meant for modern fisheries or farming, particularly not for farming. I don't even believe the word "aquaculture" appears in the act unless it appears under specific regulations. Moreover federal legislation support programs are applied differentially in Newfoundland versus other parts of the country and we'll hear that from my colleagues. We have the NPA, Navigable Protection Act, the Shellfish Sanitation Program and CFIA. We heard from Dr. Whelan that the resources applied toward our industry here are applied differentially than they are in other parts of the country.

There's a requirement for a national legislation from the federal side of the House to better manage aquaculture, legitimize it and regulate the industry more rigidly than the patchwork quilt of acts and regulations that are cumbersome, ineffective in some instances and impose a regulatory burden next to none for this sector.

I'll just conclude there for now, senators.

The Chair: Thank you.

Ms. Pryor: Thank you, everyone. I do appreciate the opportunity to speak with all of you this morning. I have a few speaking notes as well but because I do look forward to your questions I will try to keep my comments short.

I have a general overview of actually what NAIA is. Specifically we're a member based not-for-profit industry association. We have regular membership and associate members and currently our membership sits at around 80 members throughout the province and country. We have some from other parts of the country as well. We are unique in a sense that there is one industry association in Newfoundland and Labrador and we represent all sectors. We represent both the shellfish and the finfish producers so you will see me again this afternoon at 1 p.m., I believe, just to speak on our shellfish issues in particular.

We are managed by a voluntary board of directors. We are very grateful for the time and effort that they put in. It is sector based and both Cyr and Jennifer have been longstanding members of our board. They are elected annually during our annual AGM.

We have two offices in the province. We felt many years ago it was important to have a presence in St. John's, which obviously is the capital of the province, where we can meet regularly with our key regulators but also have a presence in the St. Alban's area on the south coast of the province where the coast of bays area is the heart of finfish production in the province.

I apologize for the quality of the graph here. I want to highlight that on page 2 it shows from 2003 to 2013 the level of growth in Newfoundland that we have experienced. We get these numbers from the province's Department of Fisheries and Aquaculture annually. The largest graph that you'll see has been our finfish production which in 2013 had reached approximately 25,000 metric tons. That increased from what you'll see in 2003 which was approximately 20,000 metric tons. There has been significant growth in the province in just those 10 years.

We are, as Cyr mentioned, the second largest producer now in Canada of finfish products. You'll see from a value perspective that meant approximately $197 million in direct product sales. That is just the sales of the product in 2013. With some of the critical infrastructure needs resolved we feel realistic goals for growth could be 40,000 metric tons by the year 2020. That's something that we approach cautiously. We want to be careful with our growth. We do not want to expand too rapidly but we feel we have identified several critical infrastructures. If that gets resolved we do feel we can reach that.

The key infrastructure needs: I don't believe I need to say to many of you who were with us over the last day or so that I have "roads" there, but obviously from the growth perspective of our industry we are located on the south coast and the only way to get in and out of the region right now is via road. Jennifer will probably emphasize in her talk the amount of actual transport trucks that go over that road daily for our industry. Roads are critical.

Wharves: Through investments that have been made several new wharves have been developed in the region but again given the vastness of the region there's a critical need for more wharves. If we're going to truly implement our bay management areas and our biosecurity protocols more wharves will be needed.

Waste management is a critical need for the industry at the moment. There are insufficient suppliers and solutions for organic waste management in particular. Contingency plans have been developed for mortality events however most of the solution providers being compost and landfills are inadequate at present or simply not available. This is important for biosecurity maintenance as well as proper disposal of the organic waste from our farms.

Other infrastructure needs include general suppliers that go along with the development of any industry but ours in particular would be diving, transportation logistics, well boats and equipment repair. The industry cannot grow without more suppliers of this nature.

Broadband and cellular coverage: Again I will probably leave that to Jennifer to highlight in particular the challenges that we have on the south coast, but site management, communications and real time environmental data acquisition are important for improving farm husbandry, animal performance and the safety of our workers on our farms as well.

Challenges with the Marine Atlantic ferry system: That has been mentioned this morning but we can't emphasize enough that is the link to our markets. Everything that we produce has to go with the Marine Atlantic ferry system because of the advantages we have of producing fresh seafood into the North American market.

Bay management areas have been discussed. It is a very important step for the industry. DFA, DFO and the industry have been conducting oceanographic studies and epidemiological studies in the coast of bays for five years or more now. That has led to our only recently being able to sign the bay management area agreements with the province for the companies. Full delineation and implementation of bay management areas should be feasible now and will require oversight by the Department of Fisheries and Oceans, DFA and the operating agreements that we have throughout industry participants.

Research and development: We are an industry that is heavily based in science and committed to constant improvement. Many of us, and all of us here at the table, have scientific backgrounds. Continued R&D is critical to our industry. I'll leave it at that because there's a separate panel discussion on that this afternoon. We are certainly committed to R&D.

Human resources: The aquaculture industry in Newfoundland creates approximately 1,000 direct jobs. We like to use the 1.5 ratio for indirect employment but the majority of these are in rural and coastal communities.

A competitive labour force is one that is well trained and keeps abreast of technological developments. There are shortages of qualified labour for all sectors of the industry now in processing on farms and in the supply and service sectors. Industry recruitment and retention are hampering growth in some areas. There is an ongoing need for technical training of farm and plant personnel on the most up-to-date methods of farming efficiently and environmentally responsibly.

We've done significant work over the last few years with the Marine Institute, with the companies' complete support, through funding provided via ACOA and through our provincial departments to train many of the employees we have on our farms now. We're looking at doing more managerial training this year. We do a lot of work in local high schools with the youth. We talk about aquaculture and I guess make them more aware of the employment opportunities in the industry. We see that as our future human resource as well.

Regulatory requirements and renewal: Aquaculture is a modern industry that requires a modern legislative framework to be at least competitive. On the federal side, as Cyr has mentioned, the industry is managed by an antiquated piece of legislation called the Fisheries Act. It makes no mention of aquaculture and is designed to protect wild fish only. Numerous sections of the act are invoked to regulate aquaculture activities and are simply not used in a fish farming context. The Newfoundland industry is advocating for a federal act to regulate the aquaculture industry, one that is enabling and allows for statutory regulation of the sector without competing interest.

We offer full support to our national association, the Canadian Aquaculture Industry Alliance, that I believe has spoken to your committee. Cyr currently sits as treasurer on the board of CAIA. I am also a board member of CAIA and we support the efforts of Ruth Salmon in that regard in Ottawa.

Moving on to Transport Canada, to name a couple of specific challenges that we currently have, the Federal Navigation Protection Act, formerly known as the Navigable Waters Protection Act, was recently revised and allows for clear site markings for navigation purposes. There is a strong need for consistency between provincial and federal regulations regarding site markings within Newfoundland. In comparison to other jurisdictions ours are quite different here although it is a national act. It is felt that there are excessive marking requirements in Newfoundland which create safety concern for fish farmers as well as for recreational boaters. Federal cutbacks to staffing within Transport Canada have resulted in Newfoundland losing its regional manager position a couple of years ago, first to Dartmouth and most recently this position was moved to Moncton.

Information gathering regarding the MPA permits, because we all require those in navigable waters now, from local staff has been difficult and is often directed to the Maritimes where communications are even more difficult. This has resulted in confusion among our industry participants and delays in getting our required permits.

The Canadian Food Inspection Agency, which has also been mentioned this morning, under the new Aquatic Animal Health Program, the NAAPH of CFIA, there are challenges with aspects of the current legislation, particularly as it relates to incidents of the detection and subsequent quarantine procedures required of a notifiable disease event.

Industry is continuing to work with CFIA. We have a meeting scheduled very soon to meet with representatives in Halifax to address these concerns, with the support that has obviously been demonstrated this morning of our provincial fish health veterinarians.

I'll just mention on the communications side, which is a very important aspect for the industry and for the association in particular that the finfish aquaculture industry will continue to promote its social and economic benefits to the economy. However the government also needs to continue to promote the sector as a viable and responsible economic activity for our rural region.

We are very blessed to have the support of provincial government here, as was demonstrated this morning, and we look to that from a federal government as well. We are committed to working with stakeholders and in Newfoundland in particular we do have a joint working committee which was formed with the fish harvesters' representatives through the FFAW on our south coast, as an example. We aim to meet regularly to discuss issues from the fish harvesters perspective as well as from the aquaculture perspective. We keep it to an industry-wide basis. We don't discuss particular company information but the company representatives do then meet with the fish harvesters individually on those. That has worked very well and has certainly improved our relations on the south coast.

Both government and industry need to work collaboratively on communications about our growth plans and developments as they arise and NAIA is committed to doing this on behalf of our industry in Newfoundland and Labrador.

Lastly we are committed to producing safe, nutritious, healthy seafood for the local as well as global consumers. We believe in this industry. We believe in what it can do for Newfoundland and Labrador. We believe in what it can do for all of Canada if the proper support is given.

Thank you for your time this morning.

The Chair: Thank you, Ms. Pryor.

Ms. Caines.

Ms. Caines: Good morning, everyone. You drove three hours to see me yesterday and I certainly appreciate that, so I drove three hours this morning to see you. I hope everyone is sufficiently warmed up after yesterday. I think we had the best day on the water yesterday as opposed to waiting until today.

I'd just like to reiterate a few points about Northern Harvest Sea Farms. I know it was difficult yesterday. We cut the engine on the boat but it was difficult in the wind to be able to talk to you and explain to you a little bit more about what we do.

Actually I was originally a biologist and a parasitologist but I've been involved in the aquaculture industry in Newfoundland for over 30 years now, first in shellfish and then in cod research and in salmon for the past 11 to 12 years. I'm currently the Manager of Northern Harvest Sea Farms Newfoundland Limited which is a fully integrated producer of Atlantic salmon for the fish market in the northeastern United States and Eastern Canada.

You don't hear much about Northern Harvest Sea Farms actually. Sometimes that's a good thing. We generally keep a low profile but in actual fact in 2013 we produced 16,000 metric tons of salmon for this market. That actually put us in No. 3 position with Canadian producers. All of our product is certified on the Global Aquaculture Alliances Best Aquaculture Practices Program. We were actually the first operation in Eastern Canada to receive BAP certification for salmon farms and we were the first three star BAP certified operation globally, together with our feed supplier and our processors. Hopefully once the hatchery standards become finalized our new hatchery in Stephenville will also have the four stars in that program.

As I said, we have a brand new recirculating hatchery on the west coast of the island and that's intended to supply the smolt for our production on the south coast. At any one time — and I don't know if you heard me yesterday — we probably have 150 to 200 cages of fish in the water, all distributed over 12 sites.

Again as Dr. Whelan was explaining, it's hard to give you a definite at this point in time when we have this many sites in operation with fallowing and sites coming in and out of production as fish get harvested out. Normally our sites are very deep, anywhere from 30 metres to 300 metres deep, and we use deep nets. We farm over 20 sites in rotation with production cycle of around 1.5 years to 2.5 years followed by a period of fallowing. Normally our fallowing period was one year in Newfoundland and you can see from the act the department was discussing this morning that Newfoundland has been proactive in these things. Sometimes it's good to be sort of late on the go in developing because you can learn from the mistakes of others. We've always had a long fallowing period, a single site year class and those types of what we consider normal good practices now. Newfoundland has had those for many years.

At Northern Harvest we believe in very low stocking densities which we think has given us an edge, feeding premium BAP certified feeds, and monitoring as you saw yesterday all the feeding with underwater cameras so that we have feedback from the fish to tell us when they're finished feeding. We work alongside capture fisheries such as the lobster harvesters, herring, codfish and other groundfish.

Northern Harvest currently owns a 650-cubic metre well boat, two 65-foot vessels, 258 steel utility barges, probably 16 or 17 long liners, one of which we were on yesterday, and various other barges and small craft. We employ around 130 people directly and we contract out our processing, our net servicing and some other services.

As you've heard Newfoundland has recently signed a bay management agreement that co-ordinates the stocking and fallowing of entire areas as well as the use of dedicated infrastructure for those specific areas. We saw one of the wharves yesterday in Back Cove that was designated as an inflow wharf where your new fish, your smolts, go to sea from your clean nets and your feed. Then at other wharves at other facilities are your outflow materials, fouled nets, dead fish, harvest fish and those things that return back from the farm. By using these separately and maintaining a separation between inflow and outflow activities we hope to ward off or keep separate but increase and improve the biosecurity and reduce the risk of pathogen transfer, specifically in the past couple of years ISA virus or infectious salmon anaemia virus.

Northern Harvest has been fortunate. We have not had any experience with ISA to date. We had better knock on wood. We are hopeful that the bay management program that we've all instituted now will help keep us that way.

I think you've found by now that Newfoundland conditions are quite unique. Our seawater is cold, very cold at times, and clear. Although it may seem extreme here the fact is we are indeed growing delicious and nutritious salmon and quite well. After all wild Atlantic salmon naturally spend their winters in the mid-Atlantic, which is not really known especially off west Greenland for the tropical conditions there.

We do have good opportunities here to grow premium quality salmon and to expand our industry, which has really only begun to expand around 10-12 years ago. I don't know if Northern Harvest will ever be a huge producers or whether or not Newfoundland will ever be a huge producer globally, but our philosophy is that improvements in sustainability are totally congruent with improvements in profitability, and both of those are our goals.

We are not however without other challenges and many of them have federal implications which I'm sure you're dying to hear about. Apparently everybody thinks I'd be able to focus on it all but I can't. There is just too much. You may not be able to do anything about them but at least you'll be aware of how they affect our ability to maintain our business and improve our competitiveness. I would think they affect all operations within Newfoundland, not just for Northern Harvest.

The Marine Atlantic ferry: While Newfoundland's south coast affords us waters not likely to be contaminated with industrial pollutants and/or heavy marine traffic, our island means we are where we are and the only way off and only way to be linked to the mainland is through the Marine Atlantic ferry system. That's where our main markets are obviously. The ferries experience frequent delays in crossing—there are two scheduled a day usually—due to weather or mechanical issues. At certain times of the year we just expect truckloads to be stuck in Port aux Basques.

The Christmas before last I believe we had nine truckloads of salmon just before Christmas stuck in Port aux Basques due to weather delays. That is significant. It is not trivial because every day that our fish stays on this side of that gulf is one day in the marketplace that the shelf life is just reduced.

We may or may not get those loads on the next available ferry either because of the low cost priority booking which actually at one time was no cost. Fresh seafood got priority booking as there were so many reserved spaces on board ferries. That's no longer possible. You can pay $500 a pop to have the priority booking and you're still not guaranteed. That's significant. While no one can control the weather we just ensure that we have the right ferries and the right docking infrastructure because that is our Trans-Canada Highway across the Cabot Strait. I would think some might be convinced that we don't have the correct ferries, that we have ferries that are too large for the ports they're operating in. Some of these ferries can't operate in any winds higher than 50 kilometres. Oh, boy, that's just about almost every day, if you think about it. Our products are not only perishable but any significant delays can and do result in downward pricing pressures in the marketplace, and that's definitely not a competitive advantage.

We have goods incoming as well including materials and feed and that cost is not trivial both in terms of money and lost opportunity. As I told you yesterday, given our seasonal challenges we have only so many days here to capitalize on opportunities to grow fish and we try to make hay when the sun shines.

Looking to the impact of the aquaculture on Marine Atlantic's business, Northern Harvest alone sent out 1,200 tractor trailer loads of fresh seafood product or fresh salmon last year in 2013. Together with 200 to 300 loads of feed or equipment transported into the province, that really accounts for 1 to 1.5 per cent of Marine Atlantic's commercial traffic business. I believe we have some figures showing 100,000 commercial sailing bookings last year. So 1.5 per cent to me is significant in a province this size. Add to that the other salmon producers as well as the mussel sector and I think it's significant.

With Transport Canada under the Navigation Protection Act as has been mentioned — and I won't dwell on it too much although it's a particular bane of my existence — there is a lack of uniformity of interpretation of regulations. We have the same act nationally. It used to be the Navigable Waters Protection Act. Now it's just recently changed to the Navigation Protection Act. The Newfoundland marketing requirements are determined by Transport Canada with local, I would say, Newfoundland region advice. Compared with other regions globally such as Norway, Scotland, Chile, and within Canada itself, either B.C., Quebec, Nova Scotia, New Brunswick or P.E.I., in 2011 for example before we bought our own well boat we chartered a well boat from Norway. The Norwegian captain, as soon as he got on the site to deliver our smolt, wondered what's all this; why do you have all these yellow small floats at 60-metre intervals around this site. He was concerned by the navigational hazard caused by it. They had never seen it before in Norway or anywhere else they worked. So what we did was we removed some of them temporarily so he could get safe access into the cages.

Lo and behold didn't Transport Canada inspect our sites during one of their inspections at the same time? Subsequently we got a letter saying that we were in non-compliance with our approvals.

You can't win. We don't know of any other jurisdiction in the world where so much marking of an aquaculture site is required. We have asked that this be reduced but the Newfoundland NWP staff continues to require it. All we ask for is equal interpretation of our federal legislation.

Also our insurers, our stock insurers, Sunderland Marine which is a global aquaculture insurance provider, had expressed concern over the excessive marking requirements in Newfoundland. They do not see this elsewhere.

I actually brought some documentation with me that's an amber alert. One thing I thought about this morning is we lost a $12,000 transmission in one of our longliners. The transmission can be replaced but if it had been during a stormy event and one of our boats was lost then we could have had serious personnel issues. So don't go there.

The new Navigation Protection Act came into effect in 2014 which was replacing, as I said, the old NWPA but we still don't know what this will mean for Newfoundland sites. There's uncertainty about the length of time for aquaculture approvals. It has been five years in the past. Our aquaculture leases are for 50 years. Our provincial licences are for one year. It's a full-time job keeping up with the regulatory burden, I tell you, in this industry.

I guess in essence the NWPA can't really tell us what the new act really means for us. As Miranda mentioned, we had the loss of the NWP manager for the Newfoundland region. Subsequently we've had three acting managers for the program and now we finally have a permanent manager in Moncton. I'm hopeful that we will be able to get something done with this because it sort of went off the rails when all of these changes started happening.

I am just about finished. Human resources: With the changing demographics especially in rural areas, finding qualified or trainable workers is challenging. We have great workers but it's becoming more and more difficult to find more and we need more. Again attraction and retention of employees is increasingly difficult and a whole range of factors is responsible, from health, education and other services to basic infrastructure and social services. I tell you Route 360, down that highway, doesn't really entice people to come live down in that area as well.

Also we understand Transport Canada is going to continue to increase requirements for vessel competency demonstration, decreasing the size of vessels for which ticketed captains will be required. I bring this to your attention simply because of the impact on small and rural operators like ours and the need for consideration of timelines for the implementation of new regulations and new requirements for ticketed captains. It's increasingly difficult already to recruit and retrain. We have even been in the position of facilitating training for someone for their FM-4, fishing master 4 classification, so that they can take a 60-tonne or higher vessel, only to lose them because now they are more employable. It is difficult to replace.

As far as communication goes, the lack of cellphone, broadband and Internet access opposes business economy and efficiency as well as personnel safety. You noticed yesterday that we had no cellphone service. We do have VHF radio and sometimes not great coverage considering the topography. I mean the fjord-like bays on the south coast of Newfoundland make that challenging. The farm you visited yesterday was only minutes from shore. That was the reason you were able to visit because we had such short time periods, but most of our farm sites are located between a half an hour and a two-hour steam from port without any coverage at some point in the middle there maybe. We only have one cell service provider down in the region so I'd like to ask them to step up their game. They've been asked. The lack of cellphone coverage not only affects our business communications and personnel safety, but the remote sensing technologies that are difficult for us to apply if we have to resort to satellite systems makes it more costly as well as not necessarily as secure.

In closing, in terms of impacts there are many other topics that we can focus on but I think we all should be challenged to reduce our impact on this earth. We've got several billion people already and yet more to be born and food production is paramount to their and our survival. We have the wonder of transforming fish that in many cases nobody eats or even desires to eat and the innovative use of other ingredients, component nutrients from various sources, and the wise use of our coastal resources and our people to yield such delicious and nutritious superior seafood. In Canada we've got tremendous opportunity to produce our own and still have room for future generations to do so.

Thank you.

The Chair: Thank you. You've raised many, many issues here this morning and I'm sure our senators have many questions but I'm going to ask that we try to keep our questions and answers as concise as possible, realizing our time limitations. As I said, you've raised many issues that we're very concerned about as the committee so I'm going to ask Senator Wells to begin our questions.

Senator Wells: Thank you for coming here today and giving us your presentations and answering the questions that we have. It's very helpful.

As you noted, Ms. Pryor, we did speak a number of times with Ruth Salmon from CAIA and one of her overriding messages was the concept and practice or concept and possibility of a standalone Aquaculture Act. We know in Canada, as I think Mr. Couturier said, we supply 0.5 per cent or less than 0.5 per cent of global supply.

Mr. Couturier: Of farm seafood.

Senator Wells: Of farm seafood, yes. That's right. Would a standalone Aquaculture Act that combined the aspects of Health Canada, CFIA, DFO, Transport Canada, Environment Canada, and whatever other ones I haven't noted, unleash greater production or activity and how would it do that if that would be the case?

Mr. Couturier: I don't think it would supersede any other federal acts because they're not going to change obviously, but if you have an act that legitimizes aquaculture as a farming activity — and it is farming; it is private property and it is within the purviews of the provinces to manage private property — I think you could come up with an act that would reduce some of the duplication that seems to be out there in terms of federal duplication and provincial duplication and get the federal house in order. There should be a component in there that has a development component such as in some of your agriculture acts and other areas which is non-existent for aquaculture in this country federally. It should also streamline the regulatory process so that you don't necessarily have to be referred to 15, 16 or 17 different federal agencies and pieces of legislation. That's the main reason.

The cost of just applying for a permit or a licence to operate in this country from the federal side may be up to half a million dollars for a salmon farm, for example, to get a licence and just do its due diligence in terms of consultation with the public and so on.

For farmers it's similar, not in costs but relative amounts. For shellfish farmers it may be $50,000 or $100,000 before they even may put something in the water. That's significant because just negotiating those different aspects of the law is quite cumbersome and creates a lot of headaches. The laws aren't always consistent with one another at the federal level or at the provincial level but at the federal level in particular. There needs to be some streamlining of that to make it more cost effective for industry and more understood what is expected. The industry doesn't want to be non- compliant. It wants to be totally respectful of all of the laws but they are cumbersome and there's a lot of red tape if you want to use the word. I think a federal act could enable, legitimize and better regulate aquaculture from the federal side.

Senator Munson: I thought the salmon were tough surviving the obstacles of going back and forth across the ocean. Salmon is one of the greatest survivors of all time but it seems the picture you have presented here today is equally as tough because you talked about the confusion and delay, Ms. Pryor. Could you give us some examples of what the confusion and the delay is all about in getting permits? What is not happening and what should be happening there?

Ms. Pryor: It goes to being compliant, as Cyr was mentioning. We have licence applications right now with the province that are required annually. Jennifer could probably speak more specifically to the process.

From the Transport Canada perspective where I mentioned specifically the confusion and delays, we have inspectors that visit our sites twice a year annually for Transport Canada. We also have provincial inspectors that visit our sites from the Department of Fisheries and Aquaculture. If they do visit our site, they have the site diagrams that were approved under what was the NWPA and then were deemed as being compliant or non-compliant. Anything that would be considered a hazard or non-compliant would then affect our ability to have the licence for that farm to be able to do anything to transfer the fish from that farm or to harvest the fish from that farm.

What's happened is with losing positions in Newfoundland with the movement of that it has created a lot of internal struggles within departments as well and certainly within local staff. There have been offices with retirements that have closed locally and they've not been restaffed. When we reach out to our counterparts to try to get clarification on application as to what is the status within the system, we have the approval. The province does certainly help with its one-stop shop of vetting applications for us, but if we've got approvals and we know we have the approvals from the province. If we have approvals from other agencies but the one we know we don't have is from Transport Canada, we will not get our application. Fish will not wait. If fish are in a hatchery and fish need to go to a farm there's a large process required to set up a site. We can't start any of that until we actually have our approved licence and the province will not give us that obviously until we have our Transport Canada approval, as an example. There have been delays. There have been considerable delays in getting any feedback as to status of applications. So that's where the confusion comes from.

Senator Munson: What's the rationale behind a one-year licence? People work in all kinds of industry. They're either five-year plans or three-year plans as a minimum. Where is that coming from and what is the rationale behind it?

Ms. Caines: I wish you'd ask that of the minister of fisheries. I agree the banks want more than a one-year plan, don't they?

Senator Munson: Could you elaborate on that? We should have asked of the minister. Maybe I didn't do my homework well enough but there much information for us this morning. The minister will probably be asked after this but is there an impetus to change that to make it a little bit more rational to the aquaculture industry?

Ms. Caines: Industry has asked for multi-year licences because it makes sense to do multi-year licences. Our fish are on the site for at least a year and a half before we can start to harvest them. Even if it was for a production cycle you know your fish are going to be there maybe a maximum of three years or whatever. Every single year you come back with your production statistics, your inventory reconciliations, your money, and then a few months later or a few weeks later you get a new licence issued. For that period of time you may be in non-compliance. With all the certification schemes it's all about documentation. It's all about being in compliance. Those are things that we don't like to see. Nobody likes to see it.

It's getting a bit better, I would say. To tell you the truth, the new Navigation Protection Act purports to make things a little easier but we still don't know and we can't get any answers just yet as to what that will actually mean for us whether or not it will be streamlined.

Senator Munson: I get more curious about this issue on this day of discovery. Basically for this committee everything connects. There have been many great things being said about what's happening in Newfoundland and Labrador in terms of being a have province. In Ontario where I come from we're a have-not province, seriously, in terms of equalized payments and so on. Yet with the oil industry and the money things are being poured back into this province. There is a thing called infrastructure that you say is not being addressed, everything from getting to the market to getting product off this island.

How do you go about addressing those issues? You complained about them. The Marine Atlantic ferry service is obviously not acceptable nor is getting across some of the roads that we were on yesterday. The Trans-Canada was fine but the other one was a little dicey in spots but that's the way it goes. Do you have any comfort that money earned in this province through taxation and so on will be used to have an equitable approach to all industries and in particular yours?

I'm startled. There's so much excitement in Harbour Breton and your place, Poole's Cove, yet I don't know how you're going to grow unless everything connects properly. Maybe that's just a statement from me.

Ms. Caines: And that's about all that we can give back to you because if we knew what to do we'd have been doing it by now, I think.

Mr. Couturier: I believe the province has reinvested some of that tax revenue from oil and gas to some extent. The minister mentioned this morning the loans. They are repayable so some of that would have come there to help the industry expand. They are going to pave 30 kilometres of that long road you were on yesterday at some point over the next two years. They've been paving it bit by bit.

We wouldn't say that it hasn't been forthcoming but it has been a long time forthcoming. For the wharves, as you also had an opportunity to visit, those of you who were able to go, the province itself has spent tens of millions on biosecure wharves. That is an infrastructure piece that was required and it still continues to be required.

The road is a big one. Marine Atlantic is a federal issue that somehow we have to have the province negotiate with the feds to resolve that issue for the marketplace.

In this year's provincial budget there was a significant announcement on broadband access in some areas of the province and I believe in the federal budget as well has a national infrastructure program. We hope that in the next couple of years we'll be connected. We don't know. That's something to see, I guess.

Other infrastructures that weren't mentioned directly, or maybe they were, are service infrastructure and waste management. In this province even if you're a homeowner where do you take your garbage? Right now it's all being consolidated into two or three zones in the whole province. You take that from 200, 300 or 400 communities and how do you even have the infrastructure to consolidate it? It is a question that's trying to be worked out now. The geography is challenging so that sort of infrastructure is not in place. It will be a challenge for future growth but as I said in my opening comments we believe we're up to the challenge. Our industry will certainly go to both the federal and provincial governments to make sure they are able to support the infrastructure needs.

Senator Raine: Thank you very much. We really appreciate the time you've taken with us on this tour.

Aquaculture producers need to use certain chemicals, therapeutants, biofouling agents, et cetera, as part of their ongoing operations. The committee has been told the industry would like to have access to a larger number of products. How does the use of chemicals in aquaculture in Newfoundland and Labrador compare to the use of chemicals in jurisdictions such as Norway and Scotland? How does the availability of therapeutants in Canada compare across Canada? Is it the same everywhere?

I just want a little bit of an overview, if you don't mind, and some details on the use of therapeutants.

Mr. Couturier: Maybe, Senator Greene Raine, I can partly answer some of this.

The availability of therapeutants is similar across the country because these are all nationally registered therapeutants that go through an extreme screening process by Health Canada, as Dr. Whelan mentioned earlier, Environment Canada, Fisheries and Oceans Canada for the federal Fisheries Act. Of course all provincial regulations have to be met. Before anything is licensed to be used or permitted to be used in an aquaculture facility it goes through all of those checks and balances. Sometimes it takes 10 years to get permission to use a therapeutant because you have to do all of the science required to demonstrate that it will have minimal impact on the environment when you're using it.

In terms of access it's basically similar for every jurisdiction in the country in terms of therapeutants and products that are used for growing fish and managing health in the event they are needed.

The other part of your question was internationally compared to Norway and so on. I don't know that we use per tonne of fish production if you're talking about antibiotics or sea lice treatments and so on. We're probably using less than Norway in some cases and certainly less than Chile. On a per tonne basis it amounts to very small amounts. I don't have exact numbers in front of me right now but something like .3 grams per kilogram may be used in farming salmon.

It's less than 3 per cent farm salmon will ever see an antibiotic in their life cycle. Most of the time fish health is managed through proper siting, low densities, proper husbandry, and vaccination in particular is another important one. A lot of our fish are vaccinated. They go in the water healthy and presumably resistant to a variety of local pathogens. We're doing well that way in Canada. It's hard to compare exactly against Norway but I would say that we're doing as well, if not better.

Senator Raine: Is there an end to the use of antifoulants on nets?

Mr. Couturier: That's also changing quite a bit in Canada. We have limited use of antifoulants on nets in Newfoundland and Labrador. We have some nets have a copper compound which has been used for 30 years but regular net cleaning and washing prevents that from basically leaching into the environment. These are all approved by Health Canada, Environment Canada and others for use in the marine environment. Many of the operations now are getting away from antifoulants for the simple reason that it does cost money to have the antifoulants put on the nets. They're able to do in situ net cleaning.

For example, in Scotland and Norway not that many operations actually use antifoulants because they clean the nets in situ, right on site. We're moving that way here in Newfoundland and Labrador. About half our production would probably be done that way. It won't be long, I am guesstimating, that it will be the common practice.

Senator Raine: Would that be quite labour intensive?

Mr. Couturier: It's highly mechanized, those net cleaning devices, but it is labour intensive, yes. You have robots that can do it. Basically it's underwater washers that can be done from the surface from a video camera. You can wash the hull of your boat to get rid of invasive species. You can do all kinds of stuff if it works.

In high wind and current conditions it may not work that easily. Otherwise you have to use sprayers in the cages and it's labour intensive to do that. That's the other point that you have to consider. If it requires additional labour then is it practical for the company to do it?

Ms. Caines: I would say it will be a while before we go totally with non-treatable nets. I think we're trying to minimize the use of it. If you look at the amount of antifoulant used per tonne of fish, I think the more we increase our productivity and the performance of our fish, if you look at it then, we're producing more fish per use of this product. I think we're a ways off before we would see any non-treated.

Senator Raine: Thank you.

Senator Poirier: Thank you for the presentation. We heard from Dr. Kochhar, who is the Chief Veterinarian Officer of Canada and Executive Director for Animal Health Directorate. When he appeared before the committee a while back he mentioned to us that the aquaculture industry was compensated several million dollars by the federal government for the costs associated with the order of destruction of fish between 2012 and 2014. He felt in the long run that would be something that could not be sustained. He was recommending that the industry consider a private insurance program similar to the one developed for Canada's poultry industry.

Is this something that you have looked at or have studied or thought of?

Ms. Pryor: I'll try to keep my points short.

Yes, the industry has certainly looked at it. They currently do have insurance policies in place. Jennifer can correct me if I'm wrong here, but the crop insurance is quite costly that they do have but does not include events such as a notifiable disease event. As Dr. Whelan was describing earlier, if the CFIA were to come into a site with ISA like we experienced here in Newfoundland, or IHN on the west coast, and if it's a notifiable disease that becomes a mandate of CFIA, that's when we may have the opportunity to get compensation for the fish. That isn't something for our insurance and we haven't been able to date to get insurance to cover crop losses due to that.

Mr. Couturier: As you may be aware crop insurance for these types of events are available to all farmers in Canada, animal farmers of any kind, even plant farmers. There are business risk management models out there. We've been talking with the federal government for at least 20 years on having business risk management insurance policies for crops shared between the provinces and the private sector, the sort of business model where you would share the insurance policy you were talking about.

We're hopeful if something like a new Aquaculture Act does come forward that it has an insurance policy for things like that that can be cost shared between industry and government. That would make sense and minimize the exposure of organizations like CFIA.

Of course no farmer wants to lose his or her crop to a non-endemic disease. It is a notifiable disease so they hope they certainly never have to run into it in the future. It's there as an emergency and the reason why it's there in the Health of Animals Act for Canada really is to protect trade. It's a trade issue.

When you spoke to the CFIA that's their mandate, animal health with respect to trade and that's why it's there. It's no different than any other farmed animal production in Canada.

Having said that, yes, there has been here in Newfoundland and Labrador and maybe in Nova Scotia some compensation in recent years for notifiable diseases. That's required basically under law because you have to get rid of your animals. We believe that if they improve the case definition, as Dr. Whelan mentioned, you would get those animals out of the water a lot faster and there would be a lot less compensation costs.

You should also know at the same time that compensation was paid for. The industry also contributed, as the minister mentioned, at least $400 million in private sector input and contribution to the economy of Newfoundland. That's not insignificant. Over the years that the compensation has been implicated in diseases for eradication for aquatic animals in Canada the industry has contributed over $15 billion to the Canadian economy. When you look at that the numbers do pale in comparison but anyway, yes, I think the industry is looking at a cost-shared insurance model.

Senator Poirier: My last question is that we've heard from you many different provincial/federal things that you'd like to see changed, improved or worked upon. The committee started this study in January of this year and we're hoping to present a report and be finished around June, 2015.

If I were to ask you which would be the No. 1 recommendation you would like to see us consider as a priority of the federal government to be put in the report, what would it be?

The Chair: Who would like to answer that?

Ms. Pryor: I'll try that.

As a No. 1 priority I think from an industry perspective I would add the recognition that we are a legitimate industry in Canada because I don't know if we've ever felt that we had that. That lends into the Aquaculture Act and why we've been asking for an Aquaculture Act, but we've run into so many instances where we're knocking on doors and we are the aquaculture industry but we're not allowed in because there's nowhere in federal legislation that they recognize us as a true industry. We are making significant strides in the industry in Canada and feel we can make more. I guess my first ask would be to have that recognition of the industry in Canada.

Senator Poirier: Would the other witnesses agree?

Mr. Couturier: From the federal government side.

Ms. Caines: From the federal, legitimizing an industry and offering support sometimes in the presence of, I hate to say it, other agenda driven attacks on an industry is something that's important. I think legitimizing with suitable legislation offers that acknowledgement that yes, this is an industry that Canada can do well at, is doing well at and should be doing better.

The first time I visited Norway I got off the plane and got on the bus. The first thing I saw all around me was advertising for aquaculture, aquaculture products, aquaculture feeds and everything I thought these guys have bought this big time. We don't see that here. We may never see it but it just struck me: oh, my goodness, this is a culture that really embraces what they have chosen. Granted, they have put an awful lot of money in it and a lot of attack: This is going to be a totally integrated approach; we are going to have an industry here and it is going to be salmon aquaculture. Boy, they did it big time. That was the thing that struck me, the legitimizing of that. We should be proud of what we've done and I refuse not to be proud of what I've helped to build in this province.

Senator Poirier: Thank you.

The Chair: A very diplomatic answer.

Senator McInnis: Thank you very much.

This morning our presenters left us feeling that we just finished an ice cream, everything was so good. In fact I'm surprised that you have difficulties with the federal government. When one looks at the MOU that was executed, the provincial act where the province controls a fair bit with respect to aquaculture, I'm somewhat taken back by your difficulties but will not repeat them now. Are there any organized groups opposed to aquaculture in Newfoundland?

Ms. Pryor: Oh, yes, I think with our industry that goes par for the course. As our industries were developing and if we look at that graph over the last 10 years, for a long time there were people who had concerns but it wasn't a very vocal group. Certainly as a sector and certainly as our colleagues in other parts of the country they would say, "As your industry grows just be prepared that the opponents will grow and consolidate as well".

We certainly have concerns that are raised locally from local groups. We do meet with them when we can and if they're interested to meet with us. We try to address those concerns but it's not anything that I think would be distinct to Newfoundland. They are concerns that are general to salmon farming that you'll hear in Nova Scotia, New Brunswick or B.C.

Ms. Caines: We welcome valid concerns. That's the only way we're really going to build a trusting and a trustworthy industry. It's when the concerns go off the rails and the rhetoric and things aren't based in scientific fact. That's what I have difficulty with, but it is concerned citizens that make improvements in many industries and aquaculture is no different than any other resource based or resource using industry. We welcome a certain amount of it. That's what makes us get better. I don't like my feet held to the fire, no, but I think we need a certain amount of that.

One of the things I mentioned was that I was a bit concerned about the destruction of habitat division within DFO and all the cutbacks we see in science and habitat protection. As a citizen of the country and a biologist I'm a bit concerned with that type of thing. We've had enough cuts of that. As an industry we welcome a certain amount of it. It has to help us get better but it has to be reasonable and it has to be based on science.

Senator McInnis: Who's on your board? Is it industry people?

Ms. Pryor: Yes, we have industry representatives and we have two at large representatives. Cyr actually sits as a representative from the Marine Institute and we have another gentleman on our board from the Ocean Sciences Centre.

Senator McInnis: I want to leave Newfoundland with a good understanding. I've heard some of your difficulties and your challenges but I take it Newfoundland is somewhat unique. You've referred to the depth of the waters where these farms are located and obviously currents are there. You do low stocking. I would like for you to comment on how many you put in a pen, the separation of the inflow and outflow and that type of thing. Would you say you're comparable to other Atlantic provinces in this respect?

Ms. Pryor: Comparable from an opportunities perspective, yes. We feel, as Jennifer said, we grow fish very well here and we can grow more fish very well here. But from a geographical perspective, no, just given the landscape of the south coast, the lack of roads and the cliffs that we have, and trying to institute bay management areas where we don't have wharves that we can designate as our inflow wharves and our outflow wharves. The industry is looking at how we implement that with the infrastructure we have and what we need.

We are unique from that perspective and unique from the environmental perspective as well. Some of the challenges and the hurricane wind events we get on our south coast of Newfoundland you may get in the Bay of Fundy or in other parts of Nova Scotia. I think we've learned from the other provinces what has been done. We're certainly learning from that and how can we do it better here.

Senator McInnis: The production of aquaculture in Canada has flatlined for a number of years now. In fact we're less than 1 per cent of the global production. China, for example, is 62 per cent. I think there is a uniqueness here in Newfoundland and I wish you luck with it.

I just wanted to offer this comment with respect to broadband. It is just a suggestion. You have to be proactive. You have a big challenge here because it will not be profitable. You have to take advantage of the federal proposal and you have to invite the operators in. There are ways that you can contribute toward the capital costs of the cells.

For example, I heard mention here today that you have Crown lands normally along the adjacent shoreline. You can use those as a great contribution toward the capital costs and the companies will accept it. We've done that in Nova Scotia.

Thank you.

Senator Lovelace Nicholas: It is nice to see you again today. Is there only a certain amount of licences that are issued every year? Is that why you have such a hard time to renew your licence?

Ms. Caines: The fact that they are annual licences means a tremendous strain on the human resources within the department and all the rest of the referral agencies that might need to be considered for the renewal of the aquaculture licence. Crown lands don't matter. It's a 50-year lease but that 50-year lease is no good to you unless you have a valid aquaculture licence.

Senator Lovelace Nicholas: And why would an application be refused? Give me one reason. Do they ever refuse a licence?

Ms. Caines: If there was total opposition or some physical reason, oceanographic reason or fish health reason, all of those things would be considered. There are at least 17 different referral agencies including Historic Resources as well as federal. So there may be reasons.

Usually by the time a company decides to submit an application they've done their homework. They've done their background. They've done their assessment and they've done an analysis of if they think the site is suitable or not. That includes public consultation all along the way. Even before you submit it there is a check mark there where you need to show that you've done due diligence in consulting people.

Senator Lovelace Nicholas: Thank you.

Mr. Couturier: This refers to the provincial annual renewal but when they did change the act two years ago in 2012, as the minister mentioned or Brian Meaney did, they do have provisions in there to give multi-year licences. The minister can do that. They're just not there yet so we're pushing them. They would be annually renewable but basically it's a check-off where you would check off that you've been compliant with all the laws and regulations and it should be expedited.

They've also implemented an electronic renewal system. They are piloting it now and hopefully that will help in terms of the labour component. We don't know. It's still a work in progress.

The Chair: Thank you, sir.

Earlier on, Ms. Caines, you mentioned some additional information you may have. I'm not sure exactly what it was on at the time but I just wanted to advise all of you if there's anything after today that you think we could use as part of our study, feel free to send it to the clerk and he'll distribute it to the senators on the committee. Once again, thank you.

As our next panel we're pleased this morning to welcome Mr. Robert Sweeney, the President and Senior Project Manager of Sweeney International Marine Corp and SIMCorp Marine Environmental Inc. and Mr. Boyd Pack of Newfoundland Aqua Services Ltd. from St. Alban's.

We were down to St. Alban's yesterday and are certainly delighted to have you here this morning.

On behalf of the members of the committee I thank you for taking the time today to join us. I understand that we have an opening statement from Mr. Sweeney and a statement from Mr. Pack, and then we'll go to our senators for questions.

Mr. Sweeney, the floor is yours.

Robert Sweeney, President and Senior Project Manager, Head Office, Sweeney International Marine Corp and SIMCorp Marine Environmental Inc.: Thank you and good morning, senators. Welcome to Newfoundland and Labrador.

First of all I'd like to extend my personal appreciation and gratitude for being afforded the opportunity to address the Standing Senate Committee on Fisheries and Oceans on regulations, current challenges and future prospects for the aquaculture industry in Canada. My particular focus this morning will be concentrated on the marine finfish aquaculture sector, specifically Atlantic salmon and rainbow trout in Atlantic Canada.

Let me begin by simply stating that the greatest challenge limiting the growth of the aquaculture sector in Atlantic Canada is the regulatory framework within which the Canadian finfish and shellfish producers must operate. While the provinces have a statutory mandate to both develop and regulate the aquaculture sector, there's no federal statute that supports the development of an aquaculture industry in Canada.

It's a well-known fact that the Fisheries Act dating back to 1868 was enacted to manage the capture, recreational and food fisheries in Canada by Fisheries and Oceans Canada or DFO, with a mandate to conserve and protect fish and fish habitat. If Canadians are to realize our full potential for aquaculture in our coastal waters then there is a very real need for federal legislators to bring into force a federal Aquaculture Act, entrenching the rights and privileges of the fish farmer to conduct the practice of aquaculture in the marine environment. Such an enabling federal statute would bring balance to DFO's mandate of protecting fish and fish habitat.

By way of introduction, my personal career in connection with the aquaculture sector in Atlantic Canada began about 30 years ago as a public servant with the Province of New Brunswick. My role as an aquaculture development officer included facilitating applications for aquaculture leases and licences while also developing many of the guidelines, policies and regulations governing the aquaculture industry over the course of a 14-year tenure with the province.

Upon leaving the public sector my career led me to senior management positions with two independent salmon farming operations in New Brunswick and Nova Scotia where I managed the site operations and growth opportunities for the owners. In February 2002 I followed a long-time ambition to own a business and incorporated Sweeney International Marine Corp with our head office located in St. Stephen, New Brunswick.

While we have been working on the Newfoundland south coast conducting marine environmental assessments for new aquaculture sites since 2004, it wasn't until December of 2008 when we decided that we needed a more permanent presence in the coast of bays region by establishing SIMCorp Marine Environmental Inc., opening an office in the community of Harbour Breton. Throughout Atlantic Canada, SIMCorp has a highly qualified professional staff of marine environmental biologists and environmental technicians, including a Benthic Sediments Lab located in the National Research Council's Institute for Marine Biosciences in Halifax, Nova Scotia.

SIMCorp is now seen to be among the leading experts in marine environmental assessments, monitoring and environmental management for the finfish aquaculture sector in Atlantic Canada. At the moment SIMCorp conducts the independent third party environmental monitoring required by the regulatory agencies for approximately 80 per cent of the marine finfish aquaculture sites in New Brunswick, 95 per cent of the sites in Nova Scotia, plus 95 per cent of the sites in Newfoundland and Labrador. Our files now contain well in excess of 830 hours or 50,000 minutes of underwater video footage of the seafloor throughout the region.

When we say that marine finfish aquaculture is an environmentally sustainable industry we do so from a great deal of experience on the water based upon what we see and what we measure both in the course of conducting baseline environmental assessments, followed by the ongoing compliance monitor. We had the rare opportunity to see Greenfield areas before an aquaculture site is ever put into operation and to monitor those same areas throughout the course of production. I might add that the regulatory compliance monitoring programs are under the pending Aquaculture Activities Regulation or AAR and proposed to be biased toward peak biomass monitoring deliberately designed to capture the worst case scenario.

It has been our experience that the finfish producers in Atlantic Canada typically meet or exceed the environmental quality objectives set out by the regulatory agencies. The sustainability analysis and risk assessment process begins with a scoping exercise when considering candidate areas for marine finfish aquaculture development. The analysis precedes the filing of any applications for new marine finfish sites and can take from one to seven years of collecting of environmental and resource data to complete.

A very complex matrix or parameters is applied against each candidate location being considered for aquaculture development. The fundamental elements critical to ensuring long-term environmental sustainability include at the very minimum looking at the bathymetric contours, water depths, exposure to wind and waves, water temperature, ocean currents, water quality, proximity to other aquaculture sites and/or producers. The establishment of bay management areas is also critical. We assess predators and pests, supporting infrastructure, local fisheries data, sensitive habitat and areas of ecological significance, along with the benthic flora and fauna.

All of the foregoing data sets are approved against a complex risk assessment matrix leading to whether or not a producer should even consider applying for a new marine finfish aquaculture site. Once the decision is made to move forward with the next phase by filing applications, an even more complex set of parameters including site management practices, fish health management, site engineering, biosecurity protocols, feed management and waste management, to name a few, come to bear in an even more comprehensive environment assessment for submission to the lead provincial department for aquaculture development.

Prior to Bill C-38 and Bill C-45 aquaculture applications were reviewed under parallel provincial and federal legislation and processes. However that's no longer the case. The duplication of processes has since been eliminated to an extent as the EAs are now co-ordinated by the provinces under provincial statutes with input from DFO. Although to this point the producers invested considerably into a process to ensure the long-term environmental and economic sustainability of a candidate location, the actual EA review processes are both complex and unpredictable.

To further complicate the process, the conundrum faced by the aquaculture sector in Atlantic Canada is that while one processed stream has been eliminated, a duplication of effort, DFO's core mandate toward fisheries production can and at times does supersede any development issue so important to job creation and sustaining our economy.

In conclusion, it's our view that fish farming in our coastal waters is an environmentally sustainable industry that needs to be supported by enabling federal legislation. Thank you.

The Chair: Thank you, Mr. Sweeney.

Mr. Pack.

Boyd Pack, Owner and President, Newfoundland Aqua Service Ltd.: Thank you. I just got back into town on Sunday and I have to apologize that I didn't get my little brief in ahead of time. If you want I can pass this out now.

The Chair: Everybody has received a copy. Go ahead, Mr. Pack.

Mr. Pack: First of all thank you for the opportunity. It's a pleasure to meet you distinguished people, especially Ms. Greene. I am very pleased to meet you.

I first got involved in aquaculture back in the late seventies as a volunteer member of what was then the Local Development Association. Then in the mid-eighties I was chairman of a federal program called the Community Futures Program which now has evolved into the BDC, I believe it's called now.

I'm from Bay d'Espoir. While in the other fishing communities in the mid-eighties life was relatively good and employment was relatively speaking not that bad, in Bay d'Espoir, which is not a fishing community, we were fighting with Port au Port for the highest unemployment rate in the province and one of the highest in Canada. At that time I was an educator with the school board. I spent 25 years as a teacher, principal, program co-ordinator and then assistant superintendent of the school board.

In 1993 a couple of friends and I started a training business called Aquatic Resources Incorporated to train employees for the aquaculture industry. Over a period of four years we trained some 150 students as basic aquaculture site workers. Some were better educated as technicians, which was twice the amount of training. Over 60 per cent or 93 of those people are still working in the industry and some have gone on to do post-graduate degrees in aquaculture and in other things. We're pretty pleased with the results there. We also administered and supervised work experience modules for university level students who were doing post-graduate work in aquaculture.

In 1994 from a personal perspective things were changing pretty drastically for me professionally as the school boards around the province were all being incorporated. I had to make a choice at that point in time to either go back into the classroom teaching or move up to Grand Falls or Gander area where the new school board office would be located. I was very much involved as a volunteer at that point in time in the aquaculture industry. I didn't want to move. My kids didn't want to move and my wife didn't want to move so I quit. Some would call me absolutely crazy for that but I did it. We went ahead with a new company, Newfoundland Aqua Service Ltd., in partnership with a company out of New Brunswick. The business was formed to primarily manufacture and maintain the cages that the industry would require.

Now as a volunteer I had gone to several business people in the area to encourage them to get involved in the cage manufacturing for the industry. Really I couldn't find any business people — they were probably smarter than I was — who would take that chance, who could see the potential business case for a business that would supply products to an aquaculture industry that wasn't here yet.

When you're beginning an industry like we were it's very much a chicken and egg situation. How do you build facilities to clean nets when the nets aren't made yet? How do you build a facility to disinfect, build and repair cages when the industry is not there yet? That was a chance we took. We couldn't get anyone else to do it basically so we went at it ourselves.

The industry was small at the time. You were down to the area and you could see there were not a whole lot of service businesses there now. Believe me, back in the eighties and nineties there were even fewer. To get any kind of maintenance done on boats or any kind of marine equipment was practically impossible around our area.

Newfoundland Aqua Service became sort of a supplier of necessity of a whole range of services and products. We got into everything over time from building the cages the fish are in, the plastic rings that you saw out there, to the nets that go in those rings. We got into manufacturing and repairing those and treating those with antifoulant.

The plastic work involves welding so the guys we trained to do the plastic welding were also metal welders, or some of them were. We ended up with a few really good welders. We not only ended up building the plastic barges, some floats and that kind of thing. We also ended up doing steel barges, doing repairs to fibreglass boats and repairs to outboard motors. We were storing feed and delivering feed, you name it. If it came along we tried to supply it to the industry because of necessity we had to do more than just make cages and nets.

The service that we provide is still changing. As the industry evolved different technologies come along, different products get used, and it's sort of an ongoing state of flux, if you would.

Our top priority as a service company is to provide services and products to the industry and to do it in a way that is environmentally appropriate and biosecure. In other words, we're handling equipment and materials belonging to all of the growers so it is incumbent upon us to make sure if grower A has some kind of a disease issue that there is no cross-contamination from their products to the products of other customers.

To that end we engaged in the development of a new $4 million facility at Milltown. I think you guys may have seen it in passing. What you would have seen would have been simply a fairly large building and some strange looking drums, big drums that we wash the nets with. You would have seen a lot of land that has been grubbed and readied for construction. That is a work in progress in Milltown now and it will be completed by the end of the fall. We purchased and installed three mechanical drum washers which are very similar, if you would, to the washers that you use at home except they're a heck of a lot bigger.

To give you some idea of the nets that we're putting in those washers now, they go out into the water weighing anywhere from 3,000 to maybe 5,000 pounds when they have been cleaned, mended, retreated and are ready to go into the water. Over the last few days — Jennifer would know all about it — we've had nets coming back to us to be cleaned that weigh over 30,000 pounds. That gives you some idea of how foul those nets can become with kelp, mussels, seaweed and all these types of interesting things. We've purchased and installed those three mechanical drums and they allow us to control the waste products that come off the nets, both the solid waste and the liquid waste.

That is important because the nets are coated with an antifoulant or a herbicide, I guess you would call them. Basically what it comes down to is: the easiest way I can describe it is copper paint. You've all seen ships and boats of various sizes and you will see maybe a red paint or a black paint on all them. These are generally the two most common colours. It is a paint that comes to the waterline on the boat. That is an antifoulant paint designed to inhibit the growth of biofouling on bottom of the boats. It is very similar to what is used to inhibit the growth of biofoulant on the nets. That is what we use.

Control of that is important from an environmental point of view because there is copper residue in the solids and there is dissolved copper in the water that we wash the nets with. These wastes cannot be disposed of until the copper content has been addressed. To remove the copper from the water we have developed a system which includes an EC unit, an electrocoagulation unit that uses low voltage electricity to remove dissolved metals from water. This equipment allows us to continue to reuse the water for cleaning. The system removes and treats the solids from the waste stream before disposed of in an approved landfill.

We clean up the water with the electrocoagulation unit and the solids that come out contaminated with copper have to be treated with lime and tested for leachability. Then we dispose of it in a landfill with the appropriate tarp coverings and things as required by the environment.

After the nets have been cleaned they have to be disinfected. Then they have to be repaired, strength tested to make sure they are strong enough to go back out and retreated with the antifoulant for deployment. Once that is done the nets are disinfected and they are taken from what we call the dirty side of our facility. They're disinfected, taken out of the disinfection tank, and then they go to what we call the clean side of our facility.

Now the clean side is separated by a fence from the dirty side. Of course employees who work on the dirty side cannot go to the clean side without going through the proper disinfection protocol and changing clothes, et cetera.

These nets have to be dried after they're treated. To dry them we're using a low temperature drying technology source in Norway. It's a unique system and we put it together in consultation with a Norwegian company and a Canadian company out of Winnipeg. What we did in order to decide on how we would set up our facility is we went and visited sites in Europe, Norway, Scotland, Ireland, Denmark, New Brunswick and British Columbia. We didn't go to Chile but two of the major players in Newfoundland also operate in Chile and we did get information from them.

We also had visits from international companies, service companies similar to ours. They have all come to visit us. We have gathered together and we shared information with them as well.

Participating in the establishment and the growth of the industry in our region has been very gratifying for me. We were looking in the eighties and nineties at 85 to 90 per cent unemployment in the Bay d'Espoir region.

The employment for aquaculture has dramatically improved the morale of the people in the communities. The economic benefits to communities are obvious. You probably would not notice it as much as people who lived there years ago and come back now. It's a common comment from people who come back to visit for vacations. It is a very positive comment that they make on what is happening in the region.

We were a dying community 25 or 30 years ago. There's absolutely no doubt about it. All of Newfoundland was, I suppose, but I know when I first went back to Bay d'Espoir to teach in our school we had a little over 600 kids. In the Catholic school up the way in St. Alban's there were over 1,200 students. Then there were some 350-odd in Conne River. Today in Milltown all of Bay d'Espoir, St. Alban's included, has only in the vicinity of 300 students. It's a different dynamic from a population perspective in the area now, but the good thing today is that we are seeing more young kids around the community. We have a lot of young people working in the industry and contributing to the community.

The salmonid aquaculture industry in Newfoundland has brought us prosperity and a bright future. There's no doubt that it is sustainable, but in order for the growth and sustainability of the industry to continue we need to have legislative support specifically for the aquaculture industry.

One of the problems is that we've been four years getting around to finally getting all the permits and the financing stuff in place to build this net servicing facility. A lot of it comes down to the time it takes to get permission to do the simplest of things. We are involved with departments of government that we didn't even know were involved. We know we have to deal with the Department of Environment, federally and provincially. We know we have to deal with DFO and DFA. That's logical, but I'm sitting in my office a little over a year ago and I get a visit from a federal lady from the Department of Health, a provincial Department of Environment person and a federal Department of Environment person. They come in, look at the antifoulant treatment that we're using and say, "Do you realize that what you're using is a herbicide or a pesticide?" I say, "Yes, that's why it's regulated the way it is." They say, "But do you realize that your employees need a licence to administer a herbicide or a pesticide?" I say, "Okay, so how do we go about getting a licence for our guys who work at that?" The young fellow says, "We don't have one yet. We don't have a training plan for herbicide or pesticide. When we get one, we'll be in touch." He hasn't called back yet but that's just a simple example.

I don't like to get into the bureaucracy or the political part of it, although I could, because 99.9 per cent of these people are the same as us. They are doing the absolute best that they can. The problem is especially in terms of the environmental — and I'm not going to distinguish between any levels of departments — that it's easier for these people sometimes to just let it sit there because once they sign they've committed, and they're scared shitless of what the kickback is going to be.

We were trying to figure out how to deal with the water, how to deal with the solid waste and what is the proper way to do it. We go to the various departments and we ask them, "What should we do?" They say, "I don't know. We're not in the business of telling you how to do it or what to do. You come and tell us what you want to do and we will say yes or no." That's a fact. And guess what? To most of the stuff they said no. It was quite an experience to travel around the aquaculture world over the years and see how it has developed around the world.

We don't have any monopoly on stalling and procrastination either. I don't want to give the impression that we're that far behind other countries and other jurisdictions in how we do things but they have similar problems. That's why I say that I don't know exactly how it should be done. If I did, I'd have had that solved long ago. There needs to be some sort of department that focuses on aquaculture because we're always seen as the poor cousin, if you will, of the wild fishery and/or agriculture. We need legislation specific to aquaculture so that if somebody wants to get involved in it from a business perspective then they have some guidelines and some rules and regulations that fit rather than trying to fit what they want to do into regulations that come from four or five different directions.

The Chair: It is very interesting. You're out at it every day so we like to hear from people that are trying to make a living from the industry. We certainly welcome your remarks.

Senator Wells: Thank you, Mr. Pack and Mr. Sweeney, for appearing and for your presentations.

Mr. Sweeney, suppliers to industry are very much bellwethers of success of that industry. It's one way to measure if an industry is growing or shrinking or how the suppliers to the industry are doing. What was the trigger that caused you to decide to expand to Newfoundland?

Mr. Sweeney: The trigger for us was seeing growth opportunity in Newfoundland. When we first started working here we worked remotely out of our office in New Brunswick, quite frankly. We would come to the south coast for two weeks at a time doing some initial scoping for a key client. It wasn't until we saw the real growth opportunity here in Newfoundland particularly on the south coast. That's what turned things for us.

We decided to open an office at one point just to catch up on the workload that had built up at the time. We had seven people working out of our office in Harbour Breton. That has since levelled off to four professional positions in that office. For us it was seeing growth opportunity. The growth opportunity was being realized so it wasn't speculative. It was becoming an everyday part of our lives so that's what turned it for us.

Senator Wells: How long ago was that?

Mr. Sweeney: That would have been 2008 so that's six years now. We've been working on the south coast for close to 10 years.

Senator Wells: Do you also supply to the north coast of Newfoundland and other aquaculture operators in the province or just on the south coast?

Mr. Sweeney: No, we don't. When you take a look at aquaculture in Newfoundland, the finfish production is on the south coast and up in the Green Bay area. The north coast has shellfish producers. The shellfish producers typically don't use companies like ours. For instance, a lot of the work has been done by provincial departments and monitoring the shellfish operations shows low impact on the environment. There's not a great need for companies like ours yet with the shellfish sector.

Senator Wells: Mr. Pack, when you left the teaching sector did you ever think you'd be hiring dozens of people and running, I'm assuming, a high revenue operation like this in the rural area of Newfoundland where you grew up?

Mr. Pack: No, I didn't. To be quite honest, I didn't really know where it was going to go. I just knew at the time something needed to be done in the area. I'm from that area. I grew up there. It was a desperate situation back in the eighties and nineties down in the Bay d'Espoir area in particular. I got involved for purely altruistic reasons at that time, believe it or not. It is only after a while you figure out that we'd better make money at this or we're in trouble. You learn quite quickly once you get involved.

I didn't know where it would lead. In the course of my involvement I've been involved with the grow-out of fish as well. I was there when we made some pretty big mistakes. They were not all our fault, I will say that, but I was involved very early in a company called SCD Fisheries which was sort of like a combination of about 60 or 70 people who had made small investments and everybody was sort of hoping to get rich at aquaculture.

Senator Wells: May I ask how many employees do you have now?

Mr. Pack: Today I think we have 23 directly and with the construction that's going on now there are 12 or 13 people there working with the two companies that are doing the construction.

Senator Wells: That's good. You are to be congratulated, both of you actually.

Senator Munson: Thank you for your comments this morning. I just have two questions. One is for Mr. Sweeney first.

We've heard earlier testimony and from yourself on the waste management issue and the lack of areas to get rid of this waste. You talked about a more comprehensive environmental assessment in dealing with waste management. It was in the context of feed management and biosecurity protocols. Can you give us any idea from your own company of how to deal even more effectively with waste management? It seems that there are very few dumping grounds that exist here.

Mr. Sweeney: Actually handling the waste stream is not part of our core business but we have worked with Mr. Pack in the past as he was building a business plan for all intents and purposes to warrant a land based facility. Some of the things that we see on the seawater side for instance is that a lot of the organic loading that we've seen in not just Newfoundland but throughout the Atlantic region over time has been a product of net washing on the sites themselves. What the producers would do as the nets would become biofoul is that they would wash the nets and the organic material would end up on the seafloor. Over the past 10-12 years there has been a transition toward bringing all the dirty nets to shore. The challenge in Newfoundland has been no facilities onshore until Mr. Pack started his operations.

That has been going on for five or six years but in the early days the challenge was working through the regulatory system itself. The need was there for a facility but working through the regulatory system was perhaps one of the most difficult challenges. We don't necessarily handle waste streams but we do work with our clients and a business like Mr. Pack's here to see the proper handling of the organic waste streams.

Senator Munson: Mr. Pack, you may have a viewpoint on that, but I'll ask this other question so you can answer both of them.

We've seen outward migration of course. I'm originally from the north shore of New Brunswick and the plane is full every day from Bathurst heading to Alberta, Saskatchewan, and so on and so forth. Newfoundland is no different.

You talked about the young people before. It's a smaller population. Are there enough programs in place for good tradesmen and women to stay home to work on all of the particular programs that you have in your company? Is there enticement to stay here. You talked about a sustainable, diverse, moving-ahead aquaculture that needs legislative protection and one-stop shopping and one place to go. Is there enough to keep people here to be part of this industry?

Mr. Pack: The biggest problem we're finding in terms of hanging on to skilled people is the labour market demand for in our particular case equipment operators like boom truck operators. We need a boom truck. It is much easier to get a brain surgeon than get a boom truck operator in Newfoundland and Labrador now. That may be exaggerating but it is difficult. Because of regulations they have to have training and one of the things we found is we've got older guys with us who can operate a boom truck. There are two trained boom truck operators in the industry, both of them relatively young, in their thirties and forties. We've got a couple of people there who can handle a boom truck better than either of these, but by God you ain't going to get them into school to get trained. It's just not in their genetics. I guess their experience in school 50 years ago was not that exciting and they just don't want to go back at it. The biggest problem is hanging on to people and being unable to compete with Labrador. the Avalon Peninsula and Alberta, of course.

Senator Munson: You're an educator. Are there enticements for the present generation with the provincial government or any government and the schools to educate people in this particular way to stay here and get well paid? Are there programs in place? Is the government paying enough attention?

Mr. Pack: On the positive side what we are finding, and I can only speak for our company, is that we do have people there who could be working in Fort Mac, in Labrador or wherever offshore, but they are opting to hang around because they have kids, they have a family and they have a life. There are some who are prepared to stay but you can't expect to keep people for $12, $13 or $14 an hour. The pay rate has to go up and that's one of the issues that the industry has to deal with. We have to be competitive with other sectors. With the price of fish fluctuating it all comes down to can you compete and still earn money.

Senator Poirier: Thank you for being here. I have one question for each.

Mr. Sweeney, in your presentation at the very beginning you talked about specifically the marine finfish aquaculture sector, specifically Atlantic salmon and rainbow trout in Atlantic Canada. We hear about mussels and oysters. We hear about salmon a lot but we don't often year the words rainbow trout. I'm just curious to know what level or percentage of market is there out there for rainbow trout. How much are we doing and is there a demand for it?

Mr. Sweeney: Lots of questions there.

Is there a demand? Yes, there is. Rainbow trout tends to be a niche market so it's not the volume market you would see with Atlantic salmon. Rainbow trout is actually being cultured here on the south coast and here are sites in Nova Scotia that are doing rainbow trout. They tend to be smaller producers in comparison with the salmon producers and that's largely because it is a niche market. Once you carve it out it's very difficult to get into those sales for all intents and purposes.

There is some work also being done with arctic char but that's very small scale. That's perhaps only one site that I'm familiar with in Atlantic Canada that's doing some work with arctic char recently in the marine environment. By comparison rainbow trout is very small but there are some producers.

Senator Poirier: Mr. Pack, you talked about your company that you put in place, the Newfoundland Aqua Service Limited, and you talked about a partnership with a cage manufacturer in New Brunswick. When you look at where we're going with aquaculture and hear all that you've done and all that you're doing for the industry, I need to say congratulations because I'm sure you started something that was probably not available for many years and have helped development the aquaculture industry to where it's at.

Right now you are in Newfoundland and you've partnered with New Brunswick. I am curious to know: Is your company supplying just for Newfoundland or are you supplying all of Atlantic Canada?

He's only going to allow me this one question so I'm going to have to put two or three in at the same time.

When you're talking about the nets how often do the nets have to come in for cleaning? Are you talking just nets from Newfoundland aquaculture? Are you talking about cleaning the cages? I remember years ago people would have concerns because of the floating cages for the oysters. They would say, "How do we clean the droppings from the birds? How do we clean this? Is this something we should be concerned about? Does this have an impact on the fish that we're growing?" I'm wondering exactly how big the territory is. If you don't do it, are those services available in other provinces that do the aquaculture of this type?

Mr. Pack: First of all when it comes to nets, no, we don't service or clean anything from out of province. One reason obviously is to ship it over here and ship it back would be expensive. The other thing is we would not be allowed to take dirty nets from here to New Brunswick or the other way around. We wouldn't be permitted to do that and for good reason.

The nets in terms of how long they're in there, it depends. I'm sure Jennifer and the other growers around would like to take them out every three or four months if they could. Generally they go in for a season. So a smolt net, for example, will go in in the spring when they put in the smolts. This is a smaller mesh net. It will be there until late that fall or the next spring. Then the fish are bigger and they can go into a bigger mesh net. I think it's safe to say that on average maybe a year in the water for a net. It varies. If you get a real bad mussel set they may come out sooner than that but by and large a year.

To your question on the cages, no, we don't do a lot of cleaning of the cages. We will if we have to repair it. It has to be cleaned before you can fuse it back together and things like that but generally that is done on the site. They'll just scrape off the oil or the bird droppings of whatever there on the site.

Senator Poirier: Are you aware if the net cleaning and what you're doing is available in all other provinces? Are there companies out there that are doing that?

Mr. Pack: Oh, yes, absolutely. Most of them we corresponded with and we've met over the years. It's a very small community.

Senator Poirier: Thank you very much.

Senator Raine: Thank you very much, and it's been very interesting.

Obviously you started with the industry, Mr. Pack, and built what was needed and were sort of building ahead of the regulatory people understanding how to regulate you. So you've probably had a very exciting time. You could probably write a book.

Mr. Pack: Yes, I've threatened to.

Senator Raine: You might want to take some names out. Obviously you're aware there are world-wide industry best practices.

Mr. Pack: Yes.

Senator Raine: Do you think those best practices should be part of the standards that would be set? Is what you're aiming for? Would that make it easier for the bureaucrats to sort of define what they want you to do? When you went to them and said, "What do I do," they said, "Just come and ask us and we'll say, yes or no." I mean that's crazy.

Mr. Pack: It is kind of crazy but it is the way it is, yes. In answer to your question we do have a code of practices, a pretty good code of practices from my perspective. Provincially NAIA does but that coded of practice is based on the regulations that we have or that we know we have at this point in time.

In answer to your question again, yes, I think a best practices section in the legislation or whatever you call it should be included. Now I realize saying that there may be people behind me here ready to shoot me in the back of the head, the growers, I don't know what kind of implications that would have for them in some cases but I see no reason why that couldn't be included.

Senator Raine: Thank you.

The Chair: Senator McInnis, you have the final question.

Senator McInnis: Thank you very much.

You mentioned the Aquaculture Act and it has been mentioned this morning as well. Currently in Canada we have the Fisheries Act and every province has an act. Basically that is based in the provinces with respect to aquaculture on farming and the securing of the pens to the ocean floor. This all falls within the jurisdiction of the province under the Constitution.

Recently in B.C. there was a Supreme Court decision that said aquaculture is a fishery and falls to the federal government. I want your comment on this. If we are going to have a national act do you believe it should be concurrent with the provinces? In other words, that we have the one act. At the moment we have a mishmash across the country. They're all different. It strikes me that we should have something, as I've mentioned before, analogous to the Criminal Code where you don't have all the provinces with their own laws. We have the Criminal Code and all feed into it.

Do you agree that that might be the way we should be going with respect to an Aquaculture Act in Canada?

Mr. Pack: Yes, the one-stop shop. I know we're sick of hearing those terms but, yes, if we could come up with some kind of legislation or regulatory system that includes both the province and the federal government it certainly should simplify things in the way of licensing and permits and that kind of thing for sure.

Mr. Sweeney: Senator, can I take you to some conferences with me? That's exactly what I would like to see. We have the opportunity to work in several jurisdictions, including Ontario and Saskatchewan, for instance. When we go to Ontario we move inland away from the Atlantic region and there is no aquaculture act. Ontario does not have an aquaculture act provincially. Applications for or administration of sites for all intents and purposes in Ontario is done through the Ministry of Natural Resources. There is no aquaculture act for Ontario.

In Saskatchewan it is the same thing. Saskatchewan does not have an aquaculture act. The industry there is actually regulated under I think the Department of Environment and crosses over into Natural Resources as well.

As we take a look at how aquaculture is administered in the Atlantic region, for all intents and purposes there's a lack of consistency throughout the Atlantic region. New Brunswick administers the aquaculture industry very differently than is done in Nova Scotia, for instance. Newfoundland is done somewhat differently again which causes some confusion for the producers as they work with the regulations.

With the type of work our business does in environmental monitoring I've spoken on many occasions that there is no consistency in terms of the environmental monitoring or the thresholds that are applied for impacts even within the Atlantic region, for instance. That can cause a great deal of confusion for the producers and for companies like ours, for instance as we work with the producers and as we work with regulatory agencies.

Within our own company I have to have biologists who are intimately aware of the regulations in each province and specialized in each province. Perhaps in our company I'm the only one that crosses the boundaries within the Atlantic region.

In short, yes, a national act should and could bring a level of harmonization on many different fronts and recognize the industry as a legitimate user of the marine resource.

Senator McInnis: In Ontario and Saskatchewan while they don't have acts they have protocols and they have to be followed, but it seems to me that if we're going to be effective, for example, in the next couple or weeks Nova Scotia will report after the panel travelled the province on new regulations. I suspect they didn't consult with Newfoundland, with New Brunswick or P.E.I. So we're going to have a whole new set of regulations and a different protocol.

It seems to me that the provinces should be working with the federal government. Let's not let the federal government on its own go out and do an act. We should do it collectively and it'll be more effective.

Mr. Sweeney: I would agree. The Fisheries Act or federal legislation supersedes anything provincially.

Senator McInnis: Exactly.

Mr. Sweeney: Over the past number of years with the discussions connected with Bill C-38 and Bill C-45, for instance, and pending regulation of the AER, personally I saw that as opportunity to bring that level of harmonization. I'm not sure it's there yet so, yes, Nova Scotia will likely come up with something somewhat different, slightly different. There will be some parallels with the Province of New Brunswick but I would have my doubts there's been a great deal of communication between Nova Scotia and New Brunswick, Nova Scotia and Newfoundland, Nova Scotia and P.E.I.

Senator McInnis: Yet the four Atlantic provinces executed an MOU that they would be consistent.

Mr. Sweeney: The irony here is there is an MOU in place among the four Atlantic provinces.

Senator McInnis: Thank you, Mr. Chairman.

The Chair: Thank you, and thank our witnesses. It has been a great conversation especially as I said earlier for those people that are on the ground. Thank you again for your time.

(The committee adjourned.)