Proceedings of the Standing Senate Committee on 
Fisheries and Oceans

Issue 10 - Evidence - May 29, 2014 - Morning sitting

HALIFAX, Thursday, May 29, 2014

The Standing Senate Committee on Fisheries and Oceans met this day, at 9:38 a.m., to study the regulation of aquaculture, current challenges and future prospects for the industry in Canada.

Senator Fabian Manning (Chair) in the chair.


The Chair: To begin the meeting, I would ask senators to introduce themselves.

Senator McInnis: Senator Tom McInnis from Nova Scotia.

Senator Lovelace Nicholas: Senator Lovelace Nicholas from New Brunswick.

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

Senator Munson: Jim Munson from Ontario, but my heart is in New Brunswick.

Senator Raine: Nancy Greene Raine from B.C.

Senator Mercer: Terry Mercer from Nova Scotia.

Senator Wells: David Wells from Newfoundland and Labrador.

The Chair: The committee is continuing its special study on the regulation of aquaculture, current challenges and its future prospects for the industry here in Canada. We just had a couple of days in Newfoundland and Labrador and we're delighted to be here in Halifax, Nova Scotia, this morning to hear from a variety of witnesses here today. We understand that the witnesses have some opening remarks, but before we do that I would ask you to introduce yourselves and who you represent please.

Nell Halse, Vice President, Communications, Cooke Aquaculture: Good morning. I'm Nell Halse and I represent Cooke Aquaculture.

Peter Corey, President, Aquaculture Association of Nova Scotia: Peter Corey, and I'm here today representing the Aquaculture Association of Nova Scotia.

Bryan Bosien, Member, Aquaculture Association of Nova Scotia: Bryan Bosien and I represent Snow Island Salmon.

Pamela Parker, Executive Director, Atlantic Canada Fish Farmers Association: Pamela Parker, and I'm here representing the Atlantic Canada Fish Farmers Association.

The Chair: Thank you very much

Ms. Parker, would you like to begin?

Ms. Parker: Thank you very much for the opportunity to meet with you today. I have prepared a slide deck that you all have available. Because my time is limited I'm not going to repeat what's on the slides but will give you a brief overview of the salmon farming industry in Nova Scotia as we go through them.

The fundamental starting point is that we're farmers. Everything we eat is farmed, all of our vegetables, fruits, our meats. Farms no longer stop at the shoreline. The decline of the wild fisheries started long before salmon farming. In fact, farming started because the people were trying to find a way to rehabilitate the wild fishery through hatchery and ranching programs. There is no scientific evidence to support the premise that salmon farms are a threat to remain in wild populations.

Mathematical models put forward in papers prior to 2009 have been proven false. Canadian wild salmon monitoring shows trends for wild fish returns have remained relatively stable in areas both with and without salmon farms. As global populations grow we are seeing fresh water resources diminish; land suitable for food production is shrinking. More and more food is being grown in areas where access to fresh water is required to irrigate those crops. The UN tells us that by 2025, which is only 11 years from now, two thirds of the world's population will live in areas plagued by fresh water shortages. I mention this because I believe we have a moral imperative to learn how to grown more food in the marine environment.

Slide 5 shows some facts we need to keep in mind about the food we will need in the future. Seafood consumption is rising; salmon is now more popular than beef. Aquaculture will be critical to ensure that wild fisheries continue to be properly managed while meeting the growing demand for seafood.

Not only is the population growing, so is the middle class and so are those who want to eat a healthy diet. We know that salmon is one of the healthiest foods you can eat. If Canadians just ate five ounces of seafood each week, over 5,800 lives would be saved from coronary heart disease. That represents over a $50 billion benefit to our society, not to mention the billions of dollars that would be saved in healthcare costs.

People want their food grown in the most natural way possible, and that's what our farmers do. Fresh water hatcheries are home to our eggs and our young fish, and then they move to marine farms where they are stocked at very low densities. Fish movement is tightly regulated; fish enter the water certified disease and parasite free.

The data on slide 7 clearly shows that fish receive far fewer antibiotics than any other farmed protein in Canada. Our fish are healthy but when they require care all treatments are prescribed by a veterinarian. All medicines undergo rigorous risk assessments based on international research and local study.

A lot is said about sea lice which vary based on many environmental factors. So far there has never been a sea lice treatment in Nova Scotia on a salmon farm. However, after 10 years of field study in Norway and the U.K., there has not been a sea lice treatment product that has had a negative impact on wild fisheries, including prawns, lobsters and crab.

Salmon farmers have a vested interest in maintaining a pristine marine environment which is why they have implemented codes of practice that govern all operations. Sites are carefully chosen to provide the best conditions for fish wellbeing and ensuring environmental sustainability.

Canadian farmers are now achieving close to a one to one feed conversion ratio. Not only are we using less fish meal and fish oil, more of the feed is being converted to flesh. This means less waste coming from the fish itself and that's one of the many reasons why our farms are achieving such high standards in their annual benthic monitoring.

Salmon farmers are committed to conservation. Slide 9 profiles two projects we're involved in. The inner Bay of Fundy, iBoF, project has farmers keeping wild smolt in the farms for a year so that they can become stronger and better able to survive and spawn. In 2012 this meant that 40 fish returned to the Upper Salmon River, more fish than that river had seen in over 20 years. Other members were involved in ground breaking lobster survey work. You can see by the number of berried females and lobster that increased from baseline after the farm began operations. When the farm was fallowed those numbers began to drop. The study is being continued for a second production cycle and early results show numbers again increasing.

One of the reasons we think that people are unsure about our industry is because salmon farming is ever changing. Where terrestrial farming evolved over centuries, salmon farming has evolved within decades. We also work in communities and a society where there has been little or no change over three generations. However, this generation is seeing significant change, largely due to shifts in the traditional resource industries and more people moving to urban centers. There is a natural inclination to fear what we don't understand; change is hard on people. The introduction of salmon farming, which is also changing rapidly, can often be used a focus for that fear of change.

On slide 10 I have also shown that salmon farms fit within existing ecosystems without really changing or causing significant or permanent harm. That can't be said for traditional terrestrial farms. Salmon farmers are not just partners in a working waterfront; they are partners in their communities. When people have jobs you see family violence go down, citizens are healthier, children do better in schools and there is active social opportunities within those communities. We believe the development of the aquaculture sector, specifically salmon farms, provides a win-win for Canada. We benefit from better health through access to quality seafood and better socioeconomics futures for our communities and our nation.

However, Canada is falling short of reaching its potential. Slide 13 shows that Canada's production has flatlined and we know that Nova Scotia is not tapping its potential. Canada has room for responsible and sustainable growth of the salmon farming sector in every region of Canada. Growing production in Nova Scotia will in turn support increased investment in infrastructure, fish processing plants, fish hatcheries, along with an expanded service and supply sector and the jobs that come with that.

The work of this committee is critical and time is of the essence to achieve responsible growth and development in Canada. Investors need business certainty, and we are losing too much to other countries. Our regulatory system is overly complex, uncertain and confusing, which restricts growth and investment. The public also can't understand it, which undermines confidence. While we need regulation that protects the public interest the existing patchwork of regulations and policies falls short. A national strategy that provides a coherent and contemporary approach is required. This must include an aquaculture act that defines our industry as farming and provides a clear national commitment to development. This strategy should provide clarity for industry and intergovernmental relationships.

Development cannot be undermined by negative rhetoric or speculation of potential or possible impacts. Over 30 years of salmon farming and scientific research simply do not support these speculations, nor do recorded commercial fishery landings. Potential does not mean reality and correlation does not mean cause.

Salmon farming is crucial to supply the world's growing demand for this food. It also represents an unprecedented opportunity to bring economic prosperity to Atlantic Canada's rural communities and keep our young people at home.

Thank you very much.

The Chair: Thank you, Ms. Parker.

Mr. Bosien: Thank you, Mr. Chair and Senate committee members, for this opportunity to appear before you today. I represent Snow Island Salmon and am a member of the Aquaculture Association of Nova Scotia.

My name is Bryan Bosien. I grew up in Deer Island, New Brunswick. Since the late 1970s aquaculture has been a vital part of the island's economy and culture. In this area and many others it is a good example of how tourism, traditional fishery and aquaculture can co-exist and share in our natural resources. I started working in the aquaculture sector on my summer vacations as a student and it has grown into a 20-year career.

The aquaculture industry is at a pivotal crossroad in Canada. We can lead, follow or get out of the game. We have been following for years; that is, lagging behind other countries' production values. Getting out of the game is not an option when aquaculture can provide much needed protein for feeding the world's population. Now is the time for Canada to lead.

Aquaculture provides considerable benefits and investment for communities around the world as well as in Canada. The Ivany report, Now or Never: An Urgent Call To Action For Nova Scotians, was released in February. From that title alone we understand the gravity of the state of our economy. Nova Scotia needs more economic activity in every way.

The aquaculture industry can provide much needed jobs and security in many rural areas within Nova Scotia. It is always surprising to hear some of the perceptions of what aquaculture is and what goes on at our sites. We need to do a better job communicating.

Aquaculture is the fastest growing food production system in the world. In Norway they have recognized this and have focused on using finfish aquaculture to grow their economy. In a decade they increased their production from 510,000 tonnes of salmon in 2001 to 1.3 million tonnes in 2012. This is an increase in production of 158 per cent.

However, Canada is lagging behind significantly. We are not responding to the global protein requirements or capitalizing on our inherent and natural advantage. In 2001 we produced just over 105,000 tonnes. Already we were one fifth of Norway's production. If that wasn't disappointing enough, in 2012 our production was just over 108,000 tonnes, a paltry increase of just over 2 per cent. Only 5,900 tonnes, or 5 per cent of that, was in Nova Scotia.

At Snow Island we are ready to provide year round production and bring prosperity to rural communities in Nova Scotia. If we succeed in gaining our four farm rotation model we can bring around 60 direct full time jobs. We are a small company that raises fish in a low density model with extensive farm fallowing. This allows us to raise a truly unique tasting fish. To date we have no experience with sea lice or ISA. We are committed to ensuring the environment, community, staff and the fish are treated with care, respect and importance. Sustainability is part of every company decision. I am very proud of our results. I consider our fish to be some of the healthiest in the world and our product is of exceptional quality.

The global demand for fish and seafood as healthy protein sources is growing. Today fish is the largest source of animal protein in the diets of over 1 billion people. With that comes pressure to increase production and harvest fish and seafood using sustainable, well managed, safe, traceable products and practices.

What better way to know what is going on the plates of Canadians than having products raised in Canada. In fact our provincial government set a legislated goal within the Environmental Goals and Sustainable Prosperity Act that, by 2020, 20 per cent of food bought by Nova Scotians be locally produced.

Currently Canada is the only major farmed seafood producing country without national legislation specifically designed to govern and enable its industry. We do not object to being regulated, we welcome it. Regulation is a very important part of helping stakeholders understand that what we do is being done carefully, appropriately and responsibly. Modernizing the regulatory and policy framework will allow our industry to realize its full potential.

Passing legislation or approving regulations are only part of the process. There needs to be a commitment for public consultation, transparency and inspection. Also, we would like to see certificates for companies to display and show stakeholders we are operating with sustainable and responsible practices.

Our industry's technology and operating procedures have evolved tremendously. Companies are continually seeking ways to improve their shared value. There are great things being done by the companies in the sector, some of which are in the room here today.

For Canada to grow its finfish aquaculture sector, it needs to gain a social licence. Regulations, inspection and transparency will greatly aid in gaining this licence. Shifting the current debate to restarting a conversation will ensure we create a shared value of the focuses on economic and societal progress.

You can facilitate growth of the industry by supporting modernized legislation, inspection and public consultation. Thank you.

The Chair: Mr. Corey?

Mr. Corey: I want to thank Senator Manning and members of the committee for this opportunity to speak on behalf of the Aquaculture Association of Nova Scotia and the finfish sector in particular. We are proud of the role that our association has played as the primary industry representative for over 30 years. With our membership of 75 operators, suppliers, institutions and individuals we support a diversity of species and production models for the betterment of rural economies. Many of our members are interlinked with the motivation to not only advance their own businesses but to see the aquaculture industry thrive in Nova Scotia. Recognizing the currently untapped potential of our aquatic resources we contribute to local economies through provision of jobs and investment in our local communities. Efforts in public engagement and development of codes of best practice further demonstrate our commitment to operating cohesively with stakeholders.

Furthermore our members draw on our network of regional universities particularly Dalhousie's aquaculture campus to address practical questions around productivity, new species and process improvement. Over the past three decades the Nova Scotia aquaculture industry has brought 11 aquaculture species to commercial production: Atlantic salmon, rainbow trout, halibut, Arctic char, striped bass, and numerous species of shellfish and marine plants. We believe that diversity in species and production models makes the best use of a coastal and inland resource that is itself diverse. With our continued emphasis on diversity and R & D the aquaculture association is positioned to support expansion within the existing member base as well as new inference to the industry.

The aquaculture association of Nova Scotia therefore encourages this diversity by advocating for a sector approach to aquaculture development in our province. The majority of aquaculture operators in Nova Scotia would be considered small and medium sized businesses.

Two primary issues face most of these companies: access to leases and access to capital. A sector approach to development of this industry will help to ensure that we overcome the hurdles and realize our growth potential. Seeing as my colleagues here at the table with me will speak specifically to Atlantic salmon, I would like to bring attention to other finfish species currently farmed commercially in Nova Scotia.

Atlantic halibut and rainbow trout have particular potential to make an even greater contribution to our provincial economy. Atlantic halibut has been farmed in Nova Scotia since 1997. The halibut hatchery in Clarks Harbour is the only supplier of halibut seed stock in Canada with grow-out facilities in Woods Harbour and Advocate Harbour, also in Nova Scotia. Currently 90 per cent of this seed stock is exported to Norway and Scotland for on-growing. The halibut sector would prefer that a larger portion of this seed stock go directly to the Nova Scotia grow-out sector.

Further expansion of halibut grow-out in Nova Scotia is blocked largely by access to capital. Unfortunately due to halibut's bottom dwelling behaviour they do not perform well in conventional ocean based technology. Tanks accommodate this behaviour while their relatively low oxygen demand and high market value offset the much higher operating costs associated with land based operations. Atlantic halibut is therefore a strong candidate for land based or closed containment aquaculture, though capital costs remain a major limiting factor.

Rainbow trout production was roughly 1500 metric tonnes in Nova Scotia in 2012. This animal fits well with our industry's complement of species by making use of certain coastal areas that are not well suited to Atlantic salmon cultivation. Many locations may only be operated three seasons of the year, insufficient time to raise market-size salmon but adequate for production of rainbow trout. Seasonal production facilitates annual fallowing of farm sites ensuring minimal environmental impacts. Rainbow trout's apparent resistance to ISA is another advantage of this species.

Farming of rainbow trout in Nova Scotia has the potential to triple, though several hurdles are hampering this expansion. Supply of eggs is a major challenge. Sourced from a single U.S. supplier the strain of rainbow trout currently cultivated in N.S. is not specifically bred for the marine environment. To address this limitation a breeding program should be established in Canada to select for traits important to Canadian aquaculture conditions. Another potential solution is access to strains of rainbow trout outside of the U.S. and Canada which are better suited for marine cultivation.

There is little doubt that aquaculture is the food production sector in Nova Scotia with the greatest potential for expansion. Federal government departments can be instrumental in advancement of this industry trajectory and ensure that aquaculture contributes even more substantially to rural economies in Nova Scotia.

Thank you very much.

The Chair: Ms. Halse.

Ms. Halse: Good morning, Senator Manning and the rest of the Senate committee. My name is Nell Halse. I want to make sure that people have a copy of my presentation because, like Pam, I have slides interspersed with my speaking notes, and they might be useful if you are able to follow that along.

So I'm here to represent the Cooke family who built and own the company Cooke Aquaculture. The CEO is Glenn Cooke and he worked with his father, Gifford, and his brother, Mike, to develop this company. I also represent about 2,500 employees, many of whom live and work here in Atlantic Canada.

So I have an image of an eyed egg, a salmon egg and that egg is going to multiply in size many times and grow into an adult salmon. We think this is a really good metaphor for Cooke Aquaculture and actually for the aquaculture industry in Canada.

The company started small 28 years ago when Glenn, together with his father and his brother, stocked 5,000 fish in wooden cages in the Bay of Fundy. And we have grown to be a major player in the global salmon farming industry, now ranking sixth in the world. But in spite of our expanded global reach we continue to invest in our home, which is Atlantic Canada.

We currently have hatcheries, salmon farms and processing operations in every province in Atlantic Canada, in Newfoundland, New Brunswick, Nova Scotia, P.E.I. and also in the state of Maine. We also farm salmon in a company in southern Chile, and we farm sea bass and sea bream in southern Spain. And earlier this month we concluded a deal to purchase a salmon farming company in Scotland. This acquisition means that our projected revenue for 2014 will be nearly one billion dollars.

We employ 2,500 people, with about 1,700 right here in Atlantic Canada. These are good year round jobs with benefits ranging from skilled labour to professional careers such as veterinarians, accountants, IT technicians, marine biologists, environmental scientists and business administrators, just to name a few.

Most of our early years were devoted to building the business in Charlotte County, New Brunswick, a sector that now employs 16 per cent of the region's workers. In 2006, we moved into Newfoundland with a multimillion dollar investment and a promise to create new jobs there. We have delivered on that promise. We now have people working in the Coast of Bays region on farms, in a brand new state of the art hatchery and we just concluded a long-term agreement for processing in Hermitage that will secure jobs for people in that community.

Our investments since 2006 served as a catalyst for that province. Other farming companies have moved into Newfoundland and have built significant farming and processing operations. Service and supply companies have set up shop there. And as you can see on this slide, government has also invested significantly into infrastructure to support the sector.

Communities on the south coast of Newfoundland that were devastated by the closure of the fishery have become vibrant and healthy communities featuring employment, new housing, new infrastructure like wharves and fish health labs and many social benefits. The employees with good jobs and benefits volunteer in local government and schools and they advocate for better facilities, recruit new businesses and encourage grocery owners to stock better and healthier choices in local stores.

We believe there are both opportunities and responsibilities for companies like Cooke and others to grow Atlantic Canada's food production sector. We have a mandate to feed people both locally and globally with healthy and nutritious food and to create jobs and bring social benefits to our coastal communities.

So I have a slide that just shows our presence in Nova Scotia. We made a similar promise in Nova Scotia about creating jobs and benefits to communities and we're investing here now. We are developing new farms and implementing a bay management approach that involves crop rotation and fallowing bay areas between crops. And our goal is to be able to stock 3 million fish in Nova Scotia each year. This would give us the business case to build a new hatchery in the Digby area, like the one that you saw at Swangers Cove, Newfoundland, and then to open a processing facility in the Shelburne area. At the same time, we are also investing in expanding our feed plant in Truro.

Just to put this in perspective, and this echoes some of the comments you've already heard, if we stock 3 million fish a year that means stocking about six farms in Nova Scotia each year and producing approximately 11,000 metric tonnes annually. This is less than 1 per cent of the annual production of Norway, the world's leading salmon farming country. We are committed to disciplined, responsible growth of a sustainable industry that not only grows healthy food that is in great demand but we are creating good jobs and sustaining our coastal communities. This is not careless, reckless growth by any means.

We are committed to a continued investment and realizing the full expansion plan that we have announced here in Nova Scotia. But we do need the regulatory framework and political decisions by both the federal and provincial government to allow this to happen.

I wanted to just mention too that our farming operations mirror the Atlantic salmon's natural life cycle. Like their wild cousins our salmon come from local strains and begin their life cycle in freshwater. When they are physiologically ready for the transition to saltwater our salmon are transferred to ocean farms in their natural environment. Today a large percentage of wild fish on Canada's West Coast start their lives in hatcheries as well. There are many, many salmon that are stocked in the oceans by Alaska, Japan and Russia every year, and those become the wild fisheries. So just to put that in perspective, this expertise is used worldwide.

This chart shows when aquaculture began in Atlantic Canada in relation to landings of wild salmon. Note that the wild salmon fishery closed long before aquaculture and that wild salmon returns to Nova Scotia and New Brunswick have been in crisis since the 1940s and 1950s. We know that there are many reasons for the decline, loss of habitat caused by hydroelectric dams, forestry, agricultural runoff, overfishing and most importantly at-sea survival.

Some try to point the finger at salmon farming but there is no real scientific evidence to support these allegations. In fact, farmed salmon helped to take the pressure off the wild fishery by providing consumers with healthy fresh salmon year round.

I want to point out too that we do have the expertise in our sector, in our company to assist with wild salmon conservation. Cooke has spent close to a quarter of a million dollars in the last 10 years as a partner in the Magaguadavic River Salmon Recovery program, for example. We contributed facilities and personnel in one of our hatcheries on that river, and we raised the river fish for releasing at various stages. And we are now partnering with the inner Bay of Fundy Recovery program and have offered support to other local river groups, and we're eager to find additional conservation partnerships.

Right from the early days, Cooke has strategically pursued vertical integration. The company now manages the entire value chain from egg to plate in its North American operations. So we have our own broodstock, our early rearing facilities, our closed containment, fresh water facilities and on-growing and harvesting. We do our own processing, logistics distribution, which means we have our own trucking company and a sales and marketing division. We have our own feed plant, equipment and manufacturing division and we invest heavily in research and development. One of the things that we are very proud of is the announcement just in the fall of 2013 of the NSERC Cooke Industrial Research Chair in Sustainable Aquaculture at Dalhousie University with Dr. Jon Grant holding that position. Another major research area is feed, and we have a DNA based Offspring Traceability program.

On the market side, we focus on fresh. Our point of market differentiation is our freshness, and that's true for others in Nova Scotia as well. So we're driven by a proximity to market and we get a premium for price because we can deliver to market within 24 to 48 hours from the time that the salmon are actually swimming in the farm.

Also, more than 50 per cent of our product is value added. That helps strengthen our company as well; it gives us opportunities in the marketplace that you wouldn't have if you only put whole salmon out into the marketplace. That's a very high percentage for our industry.

While many people are aware of our success story and its contribution to community and charity events, we also realize that there are many people, even here in Atlantic Canada, who do not know much about Cooke, and frankly about the sector. And it certainly doesn't help that there are also groups that are deliberately misinforming the public about who we are. It is for this reason that we commissioned Corporate Research Associates to conduct opinion polling in Nova Scotia on at least four occasions since 2011. We've discovered that there continues to be strong support across the province for further development of the aquaculture industry in Nova Scotia. However, many people also said that they need more information and need to learn more about it.

Another interesting point, a strong majority of Nova Scotians offer some level of support for the creation of a national aquaculture act, which you've heard a lot about today.

So we've taken a lot of direction from these reports and have invested significantly in public awareness and community engagement. We now have a community liaison committee in the Jordan Bay/Shelburne area and are finalizing membership for additional committees in Liverpool and Digby areas. The committee terms of reference are posted on our Nova Scotia website as well as a question and answer section based on all the questions that come to us through the committee. Membership is made up of business leaders, fishermen, harbour authority representatives and community leaders, including those who do not support aquaculture. We have an independent facilitator who chairs the committee, and we have found this to be an excellent model for dialogue so will continue to make this investment as part of doing business.

And we rely on a number of initiatives for education and awareness, including posting "day in the life" videos on YouTube and regular e-updates to a broad list of stakeholders. We also recently invested in a major campaign "Farms don't stop at the land" and have a website, that includes all that material.

Most importantly, our managers interact regularly with members of the community and respond quickly to resolve issues whenever they arise. We employ local people who have a vested interest in the long term success and viability of our business but also of their communities.

I would like to conclude by taking you back to that small eyed salmon egg. We did start small, but we haven't stopped growing. We're a big fish today but we see a world of opportunity and a world of growth, both for Cooke Aquaculture and aquaculture in Nova Scotia.

Thank you.

The Chair: Thank you, witnesses, for a great review of the aquaculture industry here in Nova Scotia.

Questioning will begin with Senator Wells.

Senator Wells: Thank you panel for appearing and giving your presentations. I have a couple of questions, one to Ms. Parker.

You made a statement that surprised me: Salmon is more popular than beef. Can you tell me how that's measured or give some supporting background on that?

Ms. Parker: Actually it is sales, so salmon sales are now surpassing beef. I don't have the study; it was a consumer report that was issued last year.

Senator Wells: Okay, so you're not sure if it's consumption or —

Ms. Parker: It's sales and consumption, so the quantity of salmon. And most recently in the U.K. salmon, was the most popular meal served at Christmas time this year in Great Britain.

Senator Wells: Not turkey?

Ms. Parker: Not turkey or goose.

Senator Wells: Mr. Bosien, you mentioned the social licence aspect. This is something we've run into a number of times in our study on aquaculture. We recognize that's an issue, and I want you to help me with this. The industry has to fulfill a myriad of regulatory licensing issues from many departments and many jurisdictions. You also have to obtain a social licence in what I would say or what I would consider, having heard testimony over the last couple of months, an environment of changing goal posts. There are some groups that are categorically against aquaculture regardless of what mitigations might be put in place. Can you talk to me a little bit about the social licence?

Ms. Halse, because you're dealing with it perhaps more directly on a regular basis, could you comment on some of the things that you're doing to obtain that social licence that's so necessary?

Mr. Bosien: Currently with the Aquaculture Association of Nova Scotia we're holding stakeholders engagements and really bringing home small coffee table meetings where you're actually having conversations and not debates. I worked as a commercial diver in the aquaculture industry for 15 years and the pictures that I'm seeing on the internet of what goes on in aquaculture, what's underneath the pens and what it looks like is not what I saw in those 15 years. So a lot of people are getting their information, I find, from what we call "internet truths." There's a lot of information out there and trying to sift through it together and have conversation is the best, and we've been finding that it has been working really well. And I think we have to start that conversation instead of a debate.

Senator Wells: Ms. Halse?

Ms. Halse: I certainly echo Bryan's comments. That's exactly right; it goes back to developing relationships in the communities.

I mentioned the more formal process that we've just initiated in the last year with the community liaison committees, which is a good form for dialogue. But there's nothing to replace our employees and our managers actually standing on the wharf and talking to their neighbours and working with them and helping them out. And the more people you have working in the sector, in a community, the more engagement there becomes as well. So I think that's the root of it.

That's why we did the opinion polling too, because it's very difficult sometimes what you hear in the press all the time; it's the louder voices that sometimes give a mixed view. For example, you might think in Nova Scotia that most people are against aquaculture. Sometimes media reports will say that, will talk about an increased concern, but that's not borne out by what we have learned from our public opinion polling. Generally, that's their business, communication, and communication is a very tiny part of my business, for example. So it's at the grass roots level.

Frankly, we understand that before we go into a new community or want to set up new farms you need to engage that community, tell them what you want to do, ask their advice. Sometimes it means taking a fisherman or a group of fishermen from that community out on the water and saying, "This is where we're thinking of putting a farm and here's why," getting their advice and then being willing to actually make changes based on their feedback. That doesn't guarantee that you won't get opposition but it's certainly a very important part of what we do today.

Senator Wells: I have one final question for Ms. Halse. We've heard from a number of people, and specifically Ruth Salmon from CAIA, about Canada's aquaculture production not increasing as it should or flatlined on a graphic basis. I look at the graph that Ms. Parker supplied that showed New Brunswick production actually decreasing over the last five or six years. I'm assuming New Brunswick production is mostly Cooke production. Is Cooke increasing in Canada, is Cooke decreasing, is it flatlining or is this chart indicative of maybe moving to Newfoundland and picking up production there? Can you tell me a little bit about how Cooke is doing on the production side?

Ms. Halse: Sure, I'd be happy to.

First of all Cooke is not the only grower in New Brunswick; there's another major company called Northern Harvest and a few small players. I'm glad you picked that up because in fact what's happening in New Brunswick is partly a reflection of the problem we have in Canada in terms of regulation; there is a lack of clarity. There's no real vision for aquaculture in Canada; there's no federal legislation, which I'm sure you've heard from Ruth. And that means many things.

One thing it means is that we don't have the tools we need to farm properly. Right now in Canada we are limited by the tools that we have or the treatment options we have to deal with a particular parasite. It's sea lice today but it could be something else tomorrow. Because we have limited options, we have reduced our stocking in New Brunswick, and I know the other companies have too. In areas where you might be more susceptible to a particular parasite, you would put less fish or you may not stock a farm altogether. Whereas if you were a beef farmer and you had that problem we could be quite sure that the Minister of Agriculture would be standing up and advocating for the sector, would be looking around the world for solutions for whatever the health issue might be. We just don't have that today for salmon farming. It's not just about putting your hand out and saying we want government to solve the problem, or just give us whatever we ask for; we're willing to do the science and research that is involved in getting products approved but we're also investing millions of dollars in non-chemical treatment options. So our preference would be to use something that does not involve chemicals at all, but sometimes that's part of the solution; that's what they use in other countries after many years of research. So that's the reason for the decrease in production.

Cooke is certainly investing in other parts of the world, in places like Scotland where they actually have a strategy for growth of their aquaculture sector, but we are very committed to Atlantic Canada. We're very committed to Canada and if we could solve some of these regulatory problems we could do much, much more.

Nova Scotia is a prime example. We rolled out a multimillion dollar expansion plan here as well and it's been slowed down by some of the regulatory review which we support and we contribute to, but it needs to get done and we need to be able to keep moving and growing our business.

Senator Wells: Okay, thank you very much.

Senator Munson: Thank you for being here this morning.

I'm curious: What's the average wage in the aquaculture sector, a fish farmer person who works eight hours a day, just statistically? I would like to have a figure.

Ms. Parker: The wages are actually a good wage. They would be above the minimum wage to start, and it would depend entirely on the level of experience that's required for a job. But they are good jobs and there would also be a full benefits package.

Senator Munson: Similar to Newfoundland, $14 or something like that?

Ms. Halse: Yes, $14 or $15 would be an average, but then of course you've got some highly qualified people who would receive professional level salaries as well.

Senator Munson: On the question of flatlining and talking about the regulations being restrictive and complex, can somebody be more specific? What regulations would be complex and restrictive? If you can just give me an example of duplication, because I haven't got that answer yet.

Ms. Parker: So there are feed additives, natural foods that you can eat as a human being but we can't put them in salmon feed, which would actually help prevent sea lice from attaching to them. So it's now been two and a half years, these functional feeds are available in Norway and the U.K., but in two and a half years CFIA still hasn't amended their appendix for feed additives. To do a licence amendment to just change the configuration of the farm, you wouldn't be increasing it, can take anywhere from a year plus. That's sometimes provincial but it sometimes fringes on federal.

We've had the aquaculture activities regulation to support the integrated pest management approach to sea lice and that's been now almost four years going through different iterations. So those are just a couple of examples on the salmon side. And I'm sure that there are challenges on the shellfish side as well around lease boundaries, et cetera.

Senator Munson: We talked about social licence and you also talked about certificates for companies to display. What kind of certificates? What are these? What would be the added value to these certificates that you're asking for?

Mr. Bosien: Certificates to display, because there are a lot of regulations that we must follow, a lot of testing we do for the environment. We would put these up to show people that we are doing a lot of stuff; it's not just putting fish out in the water and letting them go, we've out there doing things. A certificate is just a display saying they have met everything required by them, they're exceeding this and they're taking a proactive approach to aquaculture.

Senator Munson: On the Ivany report, which got a lot of play actually across the country about what Nova Scotia needs and double research funding and double partnerships between business enterprise and the community college. This is directed towards the Nova Scotia government for research funding? I guess the government has changed in the last month or so. Have you had sit-downs and conversations with government? Is provincial government prepared to do more? Do you get that indication to stop this flatlining and where you're at in the aquaculture sector in the rest of the world? Are you feeling positive?

Ms. Halse: I'm sure we could all comment on that for a minute, but I think that it is a complex situation for an industry when you have a change in government because there's always an uncertainty of which policies will continue or change. But we have seen in Nova Scotia a strong support for our sector. This current government keeps telling us they are supportive of aquaculture and want to see it grow.

The previous government made some very specific investments with our company, specifically supported our expansion plan with an investment that was a loan; it has to be paid back. In response to your question about research, some of it actually could be non-repayable if we invested it in research in Nova Scotia institutions for the benefit of the industry here.

So there certainly have been some positive experiences, but what we need to do is really encourage them. As companies and as industry associations we're already investing in collaborations on research projects, but we'd certainly love to see more direct support from the province.

Senator Munson: Thank you.

Senator Raine: Thank you very much and I appreciate what's going on here. I'm not as familiar with your exact situation but I am learning. There is one elephant in the room that we have to really think about and that is the location of aquaculture vis-à-vis the communities. I'm sure that you want the aquaculture, the farms to be close to where your workforce lives because it's more economical to transport them to the site and it's just more convenient for the workers. But we also have a situation where people have invested in retirement homes or recreational real estate, made a significant investment, and they did that based on falling in love with the view, the pristine wilderness of a certain area, and on the expectation that it would not change, but now it's changing. That is causing, I believe here in Nova Scotia and certainly out West, a severe pushback on aquaculture that's not based on science but is based on human emotion. We can't just dismiss that. There is a value to purchasing a piece of land, and the view and the location form part of the value. So there is a difference between people who live in the rural communities who appreciate the work and understand the working ocean and those who understand the ocean as a playground or as a view.

Has the association done any work at all on perhaps zoning, proposing zoning for the location of aquaculture sites. Are you far enough along in the experience to know exactly what's required from an oceanography point of view in terms of the flow and the water? Can you find locations that are remote from people's views or people who don't want you there that could still could be accessed; for example, by taking workers in a bus to the wharf or out to the site?

I'm just wondering whose problem this is. As a society I think we need to understand that, yes, we need to farm the ocean and it makes good sense. But if you are going to change the value of a person's investment, should compensation be offered? Or what can you do to get that social licence?

I'm not sure who should answer. Probably some of you have more experience on this than others, but I'd appreciate you talking about that.

Ms. Halse: You have a couple of questions there that are really important, but your one question about do we know enough about locating a farm site, all the oceanography work, the answer is yes. We've been doing this for 30 years. We have a lot of science partners who know the exact requirements for temperature, water flow, all of those things. Even though we have a wonderful coastline, there are limits to where you can farm, in terms of Atlantic salmon — and the others can speak to the other species. People come to us all the time and say, "Well why don't you go over here?" But we spend a lot of time and invest a lot of money with environmental engineers and that to figure out where we should be before we actually apply for a farm. So that science and that information experience is there for us, and we are limited to certain areas.

On the other part, there are a couple of points. I'm glad you mentioned the working ocean because I think we need to keep reminding ourselves that we have a culture of working waterfronts, that's the Maritimes way. In our experience, people have come into a working harbour where there has been centuries of activity — there have been fish plants, there have been shipyards and all of this — and bought a piece of waterfront and then objected because there's a fish farm in there. There has to be a bit of a reality check as to people's expectations. When you buy a lovely property, you can't dictate on land who all your neighbours are going to be either. So it's a bit about managing expectations, but that's being rational. As you said, it's an emotional issue and I think when you ask whose problem is it, it is our problem. That's why I said in our case when you go into a new community you've got to spend a lot of time talking to people ahead of time. And if you can identify those people who are likely to be objecting, is there some way you can work with them and make it so they see it as a positive? If it's a community that needs jobs and if there's a way that you can operate your farm so that it is least impactful, think about how it looks, how your people should behave, those are things that can help to resolve that concern. The ocean is the best place as far as we've concerned but we aren't going to be able to do it just anywhere.

Mr. Bosien: I'll add a little bit to that. The sites that we've looked at are usually between 1.8 and 2 kilometers from the shore and most times you can't even see them. We had a farm operating for eight years and when we applied for a new one that's when people got nervous because it was going to spoil their view, they said we don't want fish farms here. And we said, "Well what about the one we've had operating for eight years?" And they didn't even know one was there. So it's the perception as well and respect for each other.

Ms. Parker: It's also expectations. Traditionally we have looked out at marinas or shipyards. In British Columbia you look out at a log boom and that's okay. But a salmon farm is something different and people aren't used to it. They'll object to a shellfish lease when in fact that shellfish is just kind of growing below the water and isn't really noticeable, but, yes, a few times a year you get people out there to do some work or to harvest. So it is very much like Nell said: You've got to manage expectations and educate people.

In New Brunswick, you will see standing on the shore that you're looking at quite a few farms, and they're all within the viewscape of the people who live there. Some people who come from other places and aren't used to seeing them, it does take some adjusting, and our industry is actually quite proactive in working with their neighbours to address if it's a noise issue or a viewscape issue. And those things need to be resolved on a one-off basis. We also have to remember that in Atlantic Canada our tides are extremely dynamic, and that challenges equipment. So all of our farms are specially engineered. It does preclude us, right now, from putting things too far offshore because you still have to be able to get out to your fish to tend them, to feed them, et cetera.

Senator Raine: We all know that there's a very passionate group of anti-aquaculture people who are very skilled at using the internet to spread their point of view. How does the industry deal with the mistruths and the innuendos and the sort of half-truths that are out there that get repeated and it goes on and on? Is there any way you can counteract those points of view and are you trying to do that?

Ms. Parker: In Atlantic Canada the salmon farming industry has worked together to develop alternative websites that could also correct misinformation. We send mailers. I know that there have been community meetings. We go to fairs and other events, food shows. I mean it's a fine line we walk.

As you know, it's actually quite a small group of people and as you say they're very skilled at using the Internet and their international Web so that comments are not necessarily coming from the people who actually live there. And we have to be careful that we don't keep perpetuating the misinformation. If you see a negative article in the paper, and if you write a letter to the editor then you get other letters to the editor. In some cases people are hesitant or afraid to respond because if they raise their head, certainly a community person, their business could be targeted or they personally could receive a lot of email or attention that they don't want.

I know on "Act for Aquaculture," which is a website that the salmon farming industry uses, we actually received a letter from a businessman who was wanting to respond to negative or misinformation in his community but he was afraid to because he was afraid that his business would be targeted. So we put the letter forward. All we can do is continue to work in our communities, because I believe our industry does have social licence where they operate. We just have to make sure that we continue to inform as best we can through a variety of ways.

Mr. Corey: It's a really tricky situation. My feeling is that the perception or the information that comes from those other groups is really compelling. As you've said they're very professional and often they are scientists. They have very compelling information and it's unbiased, whereas if we respond to that information we are inherently biased because we are the operators. So we have to be very creative in how we respond, obviously. The aquaculture association has a number of tools for community outreach and raising awareness through summer programs, and online tools and so on for responding proactively. But the anecdotal reports that I get from colleagues is that when the correct information is provided to people who have been in opposition and they see the value of fish farming, their opinion has been changing as far as the contribution that it can make to coastal communities. It is challenging but we are reaching out to communities in a proactive way to respond to those challenges.

Senator Lovelace Nicholas: I welcome you here this morning. My question is to Ms. Halse.

You mentioned your membership includes business leaders, fishermen, harbour authority and representatives of communities. Are any First Nations involved in your industry?

Ms. Halse: That's a very good question. We have one committee that's been functioning for some time now in Jordan Bay and Shelburne. We do not have a specific representative of First Nations there but we recognize that. We do it community by community, so if we have a community where there is a First Nations band, and I believe that for the Liverpool group that we're trying to set up we have on our list of people representation there.

Senator Lovelace Nicholas: Thank you.

Where do you market and how do you ship your product?

Ms. Halse: Because we focus on freshness our primary market certainly for our North American operations is Canada and the U.S. and sort of Toronto east and Chicago east and mostly New England. But that's where when you get into the value added you can sometimes go a little farther afield. But it's the freshness so we really rely on the U.S. and the Canadian markets. I'm speaking for Cooke. The True North Salmon would be the brand that you might see, and it's both retail and food service. The other companies in Atlantic Canada that farm salmon do pretty much the same thing. We don't focus on the frozen because we can't compete with other countries like Chile for example, they produce a lot of frozen and they ship all over the world. In fact, we have a Chilean company that does that. So our focus has really been Canada and the U.S. and there's a huge demand for that.

Senator Lovelace Nicholas: How do you ship it?

Ms. Halse: By truck. We have our own trucking division as well that does most of our trucking.

Senator Lovelace Nicholas: The reason why I asked is in Newfoundland they have problems shipping their product, or animals as some say, so thanks for your answer.

Senator Raine: As a supplementary to Senator Lovelace's comment, we found in Newfoundland that they're having an issue with the ferry. Would you have anything to add to that, especially Cooke, because you do ship from Newfoundland. Is the ferry or the capacity of the ferry a limiting factor for you?

Ms. Halse: The answer is yes because we're a major company in Newfoundland as well. The issues you would have heard there would be our issues as well. Now it depends how you do the processing. We obviously want to process Newfoundland fish in Newfoundland and then ship product from there. I know that some companies were doing some processing here but that's hugely expensive and adds tremendously to your cost of production. And that's really what we want to do in Nova Scotia as well, we're growing fish here today, we want to process them here as well. But yes, anything you can do to help us with the ferry situation would be great.

The Chair: Mr. Corey do you have something to add to the earlier question?

Mr. Corey: Yes, to the First Nations question if I could.

Just in case it doesn't come up today, although I know that a representation of this particular company is going to be speaking later on in another panel, but one of our members has a partnership with the Waycobah First Nation in Cape Breton on a rainbow trout farm in the Bras d'Or Lakes. It's now a model operation for other First Nations communities in the country. I'm told that it is the only full time employer aside from other band operations in that community. So it's making a substantial contribution to that First Nations community.

Senator McInnis: Thank you for being here.

The committee commenced this study into aquaculture because they saw the potential but they also recognized that there were difficulties. We will hear from industry, we'll hear from government, university research and the public at large. Sometimes I think we're like a jury; we hear the defence side and we hear the prosecutorial side and hopefully at the end we'll be able to make some reasonable recommendations.

Let me quickly talk about the federal act. I believe we do require a federal act but I want to ask you to comment on this. You can have a federal act and you can have it fall under the jurisdiction of the Minister of Agriculture as has been requested. But, in my opinion, it would change little or nothing unless you deal with the 10 or 11 sets of provincial legislation across the country and/or protocols that are in place.

Here in Nova Scotia they're currently consulting with the public, the panel to deal with regulations. Back five or six years ago, they signed an MOU with the other Atlantic provinces to work collaboratively together to bring in and streamline the regulations, but I bet you'll find out that they haven't talked to the other provinces. So when you go and ask for legislation, be careful what you ask for. This legislation should be concurrent. It should be legislation that deals with the provinces and they must buy into the federal aspect so that we have consistency across the country as opposed to a patchwork. Would you comment on that, please?

Ms. Parker: First, I'll point out that Canada does have acts for agriculture, mining, et cetera, that are still managed by the provinces, so there is a template for that.

The national industry government working group that's working on the national strategy has engaged the provinces. We believe that the provinces have a role to play in our industry that operates in their individual provinces and we want to protect that.

As I mentioned, we believe that there is precedent already in other resource industries. As an industry association we are working on a pan-Atlantic approach on many initiatives so we are currently working with Newfoundland, Nova Scotia, New Brunswick on codes of containment so that the governance around containment and escape mitigation would be done on a pan-Atlantic approach. We're working on a similar initiative around ISA management so that it is handled the same throughout the regions. All of the provincial vets and provincial governments are engaged in that with CFIA, with DFO and with the industry. I agree with what you're saying and we're certainly working towards that end.

It will also clarify things and provide I think greater public confidence that the industry is being managed on a level playing field making it much easier to understand the regulations. A national act could also provide a framework to strengthen the MOUs with the different provinces. Because we operate in the ocean, we're still going to have to respect the provisions within the Fisheries Act, but at least we will be recognized as food producers.

Mr. Corey: To add to that, I think that there's great value in streamlining and bringing clarity to regulation. In addition, I think that it signifies or would signify to Canadians that it is a growth industry recognized by federal government, that this is something that federal government is prepared to get behind, whereas at this point it is something that could be walked out on, if you know what I mean. I'm not saying that well, but once an aquaculture act is in place it establishes that commitment to enabling and facilitating growth in an industry that the government recognizes as being a real opportunity for Canada.

Senator McInnis: We just came back from Newfoundland where we heard about bay management areas, predetermined areas for the setup. I likened it to zoning where in the quiet of night these sites can be predetermined and that's what Senator Raine alluded to. It strikes me that you would be able to do the public engagement in advance because currently, at least in Nova Scotia, the public engagement is terribly flawed, and that's what drove the government, actually, to do public consultations. As you may be aware, I participated in these public engagements and it was horrific. So how do you feel about that? It's scientifically based in Newfoundland, but do you not agree that that would be a better way to proceed?

Ms. Halse: Bay management is actually a farming approach. It takes all farms in one area that are on the same year class and they share. Whatever treatments or anything that occurs is done collaboratively. In some cases it's just one company in one area but if it's more than one company they have to work together. In New Brunswick this approach has been in place in regulation now for several years, and that took a long time to develop. The scientists, communities, governments, and industry worked together to develop it. That means that fish can only go in the designated areas for this. This year, for example, fish are only stocked in Bay Area 1, Bay Area 2 has market fish, Bay Area 3 is fallow and it rotates. But you also must have your fish out by a certain date and if you don't you're not in compliance and there could be penalties.

So that's been very strictly adhered to in New Brunswick. It's worked really well in terms of managing environmental impact and managing disease and health. We've had great success as a result because that's hand in hand with protocols, biosecurity and that sort of thing.

So in Newfoundland the industry has been pushing really hard for this bay management to be formalized in this same way, but I think you're almost talking about two different things, the bay management in terms of practice of farming which I think everybody in the finfish sector for sure would endorse.

As a company we're trying to implement it in Nova Scotia as well. We've recommended to the regulatory review panel that we want to see that embedded in regulation.

Then there's the other area of maybe how you do your consultation. I agree with you. I've been to some of the public consultations, and different governments try different formulas for how you do that. They're obliged to engage the public and we want to be engaged as well. If you do more of an open house it seems to work better than if you have microphones where people can grandstand because then often the people with the questions just leave, they don't want to talk in that kind of a volatile environment.

It's a very complicated thing to figure out what's the best way. I think our approach to going into a community is to start talking to the people on your own, just tell them your plans, ask them for their advice, and that's the only way. In some communities that's worked really well. In Shelburne we have a "citizens for sustainable aquaculture" group that sent in 600 letters in support for our site application. That didn't happen overnight. We worked in that community for several years before that happened. But unfortunately I think you had asked for the mayor to come and she wasn't able to.

However, there are some success stories I think here. I think in the Meteghan area, Digby area you would find similar support from the municipal leaders and from the community leaders. So it's not all a doom and gloom story but it's ongoing work for us, we can't ever give up. In fact, we know we have to do more of it.

Mr. Bosien: For the area that we're looking to develop I've been going door to door and talking to people and that was their same sort of sentiment, in the current style with the microphones there they didn't want to speak up for fear of retribution. But they're really getting behind us now. I'm gaining support and they're saying, "Yeah we want jobs here," but they don't want to stick their head out in their community. It's a small community but they are willing to get behind us now. We're having small community meetings and talking one on one, and I find that's a much better approach.

Senator McInnis: One of the other areas is where it's mandatory that you have to fallow. It's mandatory that you have to remove the fish feces. It's almost like a security deposit that you have to put in for restoration of a site. Do you agree with that? That's what takes place in Newfoundland.

Ms. Halse: We initiated it, that whole approach to bay management. I can give you many, many letters and dates of meetings where we said to the government, "This isn't just a nice idea but only if you feel like it." It needs to be in place; it needs to be in regulation so that everyone has to do it. It's no good if only some players are doing it, it only works if the whole industry is doing it. And that's hard work . It took a long time to bring it about in New Brunswick because companies have operations in different bays so they've had to learn how to work with each other, agree on which wharf they would use for what kind of activity. It's not a simple process but what fallowing does is it allows the farm to regenerate and that's something that we're doing as a company wherever we can. However, I can't think of anybody in the industry that would object to it today.

Senator McInnis: Thank you.

Mr. Corey: If I could just quickly respond to the zoning and bay management idea. Snow Island, just as an example, is proactively doing that voluntarily. Bryan can better speak to this but there probably won't be time, but they're looking to secure four leases so they can do a proper rotation. Fallowing is good for farming; it's good for the environment. There is no question that there is going to be the deposition of some amount of waste under farms. However, there is another operator in Nova Scotia that has informed us that the conditions of the bottom have actually improved under or around at least that farm. I'm sure that Cooke Aquaculture is also able to do the fallowing, is doing fallowing on their farms in Nova Scotia considering the number of farms that they have, but I can't speak specifically to that. Anyhow, the point being that voluntarily companies like Snow Island are looking to implement basically bay management strategies and fallowing strategies.

Senator Mercer: Thank you for being here. I'm not a regular member of this committee. I'm the Deputy Chair of the Standing Senate Committee on Agriculture and Forestry, but I do appreciate some of the facts that you share; they're ones that I hear daily — particularly the fact that by 2050 we're going to have 9 billion people on this planet and we've got to figure out how to feed them. Aquaculture is one of the bright lights in that conundrum. It also seems to me that the anti-aquaculture people seem to have lots of time to protest against the people who are interested in getting the job done, are out there getting the job done, are creating jobs and helping the economy of Nova Scotia.

I want to ask the question about attitude. Since the Ivany report came down in February, and to remind everybody the title of that is Now or Never, Urgent Call to Action for all Nova Scotians, has there been, have you witnessed a shift in attitude, not just publicly but more importantly with the provincial government. You've got a new government with this report that underscores need for change. We've got a premier whom I've heard say a number of times that he is committed to many of the recommendations that Ivany makes. Have you seen a positive change in attitude?

Ms. Halse: It's a difficult question, partly because our sector is under — it's kind of like a holding pattern because of the regulatory review process, a process that was initiated by the previous government and is continuing. So I think we all kind of wonder where things are going to go. Our company and others have all got plans in the works; we're in the middle of doing things, growing our businesses.

Right now the government is saying that they're not going to make decisions on new farms until the review process is completed. But that doesn't mean that we can't still be applying and that they can't be processing the applications internally, but the decision is what the previous government had indicated they were waiting for.

So from our point of view it's an important message because we're midstream in a major expansion. We want to build this hatchery, open a plant but we need some more farms and this whole bay management is the reason. That's why I said that if we stock six farms a year that will do it for us. It's not like we're doing this massive explosion of farms everywhere but the reason is so that we can rotate the areas. The strong message that we have for the province is that that process is important; it needs to get done so we can move on because we're kind of in a holding pattern. I don't know what the others feel about that.

Mr. Corey: There is a bit of a holding pattern, although my understanding is that it's strategic because, as Nell referred to, that regulatory process was triggered by the previous government. The current government is kind of taking a deliberate back seat a little bit just to ensure the third party influence is dominant. But from conversations with the minister there is sincere support for aquaculture moving forward in the province.

The Chair: Thank you to our witnesses. I'm sure senators have other questions, but time is limited and our next panel is to begin in a couple of minutes.

I just want to add that if there's something you think that you would like to pass on or some reports, feel free to contact the clerk of the committee. Our study is ongoing until June of next year. I'm sure you people that are interested in it will be hearing from us from time to time. So if there's anything that you think that needs to be clarified or that you'd like to present to us as extra information, feel free to do so anytime. We thank you for your time this morning.

I would like to welcome our next panel. We're delighted that you took the time to join us here today. Please introduce yourselves first. I understand we have some opening remarks starting with Dr. Swan and then the others.

Ms. Vicky Swan, Research and Development Coordinator, Aquaculture Association of Nova Scotia: I'm the research and development coordinator with the Aquaculture Association of Nova Scotia.

Tom Taylor, Sales and Technical Support Manager, Northeast Nutrition Inc.: Tom Taylor with Northeast Nutrition, part of Cooke Aquaculture. I'm based in New Brunswick, but I work through the Atlantic provinces in sales and technical support.

Brian Blanchard, Member, Aquaculture Association of Nova Scotia: Brian Blanchard. I work with Scotian Halibut Limited here in Nova Scotia. I'm based out of Halifax but involved with another halibut farm in Advocate, Nova Scotia, as well called Canaqua Seafood.

The Chair: As I said earlier, thank you for taking the time to join us here today.

Dr. Swan, I understand you have some opening remarks. The floor is yours.

Ms. Swan: Thank you very much for providing me with the opportunity to speak with you today. I am an aquatic biologist and I've worked on research pertaining to the aquaculture industry for a little over a decade now. I'm really thrilled to have the opportunity to pass on a bit of my experience in working with this industry during that time.

I think it's a bit of a unique experience in that I've worked on research programs in roles both as a student, as an academic working with government and my current role as a representative for industry members themselves. Because I've served in these diverse roles, all of which have contributed to the advancement of the aquaculture industry, I've developed a great overall perspective which allows me to approach my research priorities and current work with a broader view. As a result I can see the potential that these diverse contributions can have especially when they're well aligned.

I'd like to spend the time that I have to speak to you relaying a few key lessons and messages that my perspective and experience in working with this industry have taught me to date. Given that experience and diversity, I think some of the messages that I have for you today are really focused on collaborative work with other support industries and within the sector itself.

One important point that has probably resonated with you already during your work but bears repeating is that this is an industry that truly wants more knowledge and research. The members of our association and others that I've dealt with from the other Atlantic provinces actively seek out ways to learn more about nearly every aspect of their operations. They're interested in gaining more information about the biology of the species that they farm. So although farmers know their particular crop species perhaps better than even the most renowned academic expert they recognize that current research tools allow them to delve deeper into this understanding.

One example of this is that the shellfish industry members of our association recognize that environmental fluctuations seen with increased temperatures and the threat of ocean acidification present real challenges to the biological sustainability within the populations of animals that they grow. Because of this they're actively pursuing research to help identify natural populations of oysters and mussels that have genetic characteristics to best deal with these potential threats.

Our farmers are also interested in the natural environments in which they farm. Many farmers are also keenly observant of their lease environments and much of their own farm monitoring is some of the most in depth data available about these coastal environments. They recognize that the more information that is available the better farm management practices can evolve to best compliment that particular environmental landscape.

Our farmers are also interested in the interaction between farm dynamics, the environment and other species. I've had many conversations with our members about the need to learn more about interactions of our farms and the environments in which they are found. Many of these conversations are initiated by the farmers themselves. They call me and say that we need a study to look at any number of interactions because they've had a conversation with a community member at their local coffee shop and neither party really has the necessary evidence to quantify or characterize the specific interactions for their region. This is something that should be seen as an incredible opportunity in which people are in agreement that more scientific investigation is needed to support ecosystem health for all interested parties. Collaborative investigations are key to advancing informed discussions about these issues.

Our farmers are also interested in new technologies that can help farming reach optimal efficiencies. They themselves are innovators; they see new and diverse ways of optimally growing their high quality seafood products. When they experience issues or recognize parts of their production systems that aren't as efficient or sustainable as they expect it can be they tackle new solutions themselves or look to partners to address these areas.

Many farmers have come to me with issues about their farms and we work to initiate new research and development projects with diverse partnerships with academic and private institutions to address these in new and exciting ways. Our farmers are not interested in business as usual. They're constantly evolving to optimize their farm practices and develop new technologies to support their aquaculture operations.

Another key message I would like to impart today is that collaboration and cooperation have been fundamental foundation stones to the aquaculture industry and continue to be paramount to success of this industry. Many of the R&D initiatives that individual companies undertake to improve their businesses can advance under proprietary non- disclosure agreements with researchers and institutions or remain privately in house. Our experience at the Aquaculture Association of Nova Scotia and indeed regionally has been an incredible amount of information sharing to advance the sector and remain responsive to common needs within the industry.

Recently our oyster industry members recognized that currently seed availability for many different reasons was a common issue to many operators. In order to proactively address this issue, industry began speaking to one another and identified they would like to receive hands-on training in remote setting practices in order to begin experimental trials of this practice this season. I prepared a funding proposal based on this collective need and through the support of the provincial Department of Economic and Rural Development and Tourism several member companies will receive targeted training on the use of remote setting from the Horn Point Laboratory at the University of Maryland in the coming weeks. Without open communication and alignment of this goal this work would likely not have advanced. This is just one of many examples of cooperation both within and across aquaculture sectors that fuels the advancement of the industry as a whole.

I would like to close with a few remarks and some often lesser noted but extremely important considerations when assessing the potential of further aquaculture development in Canada.

The expansion and advancement of ocean sciences, aquatic technologies, marine biotechnology and the individuals with expertise in this area are growth industries that can be built and accelerated by a diverse, growing and strong aquaculture industry. When discussing the positive impacts of aquaculture development the support industries that supply aquaculture producers are often highlighted. While these support industries are of great importance when assessing the landscape of development it is also important to note the potential growth industries that exist and recognize the impact that their loss presents should aquaculture fail to further develop in Canada. Vibrant and sustainable aquaculture production spurs on investigation of our marine environments, it supports the establishment of research institutes and the training of scientific experts. Development of new technologies encourages new and innovative entrants into the sector who approach farming with new ideas and thus advance the industry. Production efficiencies can be increased, value added resources can be identified from every stage of the production cycle, waste products can be mitigated for use in other industries and, most importantly, true innovation can occur leading to discovery and development that we can't currently identify.

Norway has been excellent in that they've experienced the occurrence of a growth biotech industry that has developed as a result of their continued advancement in aquaculture production. They currently boast 16 key research facilities that deal directly with aquaculture experimentation. This does not include the myriad of smaller scale biotech and engineering enterprises that have been established through seizing the potential created by a healthy aquaculture industry looking to advance research and development. Canada is a leader in biotechnology and certainly marine research. Closer alignment of the aquaculture industry with federal, provincial, academic, institutional and private research initiatives will serve both communities in advancing these important contributors to our economy and provide more understanding of our marine environments. These collaborations are more easily established with an industry that is diverse, that is growing successfully, that is supported by a strong regulatory framework and that has vocal public support.

Thank you.

Mr.Taylor: I'm a last minute entry. I was to present to you yesterday in Truro, but luckily mechanical issues were on the ground and not in the air, so I'm glad to be with you here today.

From Northeast Nutrition I'm giving a feed perspective. I've given a handout. I'm seeing them around the table, so good. I know that these were a last minute entry.

A bit of an intro: I've been in the industry, and I began on the ocean, since 1991 and then came on land with the hatchery component in terms of a recirculation aquaculture system, so I have experience in that operation. I came into feeds and nutrition in 1998. I've been fortunate to work with many people and see many aspects of the industry which has been my career since university.

Northeast Nutrition is part of the vertically integrated company of Cooke Aquaculture, which you've already been informed of today in other meetings. The research and development that we continue to invest in, in terms of effort, time and money, is our advantage and opportunity going forward to remain a very competitive producer in a global industry.

With regard to the significance of the research, I've listed some examples here on page 4 but just to hit the highlights, the Industrial Research Chair with Dalhousie University receives a very extensive investment from our company., we do collaborate research in fish health. As Dr. Swan has said, it's extremely important to bring knowledge and skill sets from academia to reality and work with the knowledge and skill sets we have from ocean experience, so that's important. Genomics, we do that as well. Mechanical designs and innovation; we can't buy things off the shelf, so we usually innovate ourselves in terms of our production cycles. And the fifth one for the research would be the nutrition which is what I'll speak to now. That was a bit of a brief background.

Northeast Nutrition, our feed mill is located in Truro, Nova Scotia. Our annual production level is approximately 73,000 metric tonnes of feed production with a seasonal influence. In the Atlantic region the animals do not eat much through the winter months because their blood temperature is dependent on the water temperature and as we know and you saw firsthand yesterday in Newfoundland with snow flurries, it can be cool here. So our production level is in the 73,000 metric tonne level.

We have approximately 54 employees at the moment. We do have a plan to expand our feed mill production capacity, and that will be dependent on the future of our expansion overall as Ms. Halse had presented earlier.

Northeast Nutrition in terms of our approach to research and development in our design for formulations we've had the pleasure of working with very strong companies in ownership in the past. Shur-Gain is who we were prior to Northeast Nutrition, when we became Cooke Aquaculture integrated, and also we were a component of Maple Leaf Foods. So the research and development in animal nutrition on terrestrial animal studies, those methodologies and approaches, we implement and have all along in fish nutrition. There was not a lot of knowledge on fish nutrition until Atlantic salmon production came into play 30 plus years ago. This started back in the 1960s with trout in Norway with the Vik brothers and came to Atlantic salmon production with researchers from the biological station in St. Andrews working with researchers in Norway. So we were in on the ground level in the beginning of this industry. We've kind of taken a step back, unfortunately, but we'll gain our momentum again.

So the research approach, we've had those skill sets from terrestrial animal production experience. We use our Saint John River strain which is part of our broodstock and development and our pedigree program for our self-support and sustainability for animals.

The ingredient supply in a global theatre is becoming tighter as we go forward with increasing food production to feed more and more humans as we expand in our global population. So we have to be smarter with the ingredients that are available, we have to continuously research and develop new ingredients that can be used to produce feeds to grow animals for food production for humans.

Feed accounts for greater than 50 per cent of the production expense. It's the greatest input in farming, so it's obviously our greatest opportunity. That is why the research and development is extremely important and why we continuously work in that area.

Salmon feed ingredients are almost entirely made from the by-products of other human food production. So we take the by-products from industry such as poultry and we purchase from our suppliers products that are very useful and safe. They're approved by Canadian Food Inspection Agency. We use those to produce diets to raise our salmon and trout to produce food for humans. These are materials that would not have been used in human food consumption that we are able to utilize in animal food, diet design.

I wanted to mention as well that fish are nutrient and energy specific; they are not ingredient specific. It's important to realize that the nutritional requirements of the animal during the life cycle of production are met, exceeded slightly but not too much because otherwise you're over supplying and through metabolism and waste excretion it becomes a waste of the protein and energy going in. So you meet the requirements, you exceed it a bit in your formulation design and you use the ingredients that deliver the nutrient and the energy requirement to the animal.

In saying that, in the past in the origin of the industry there was a high dependency on fish meal and fish oil to feed the animals based on their natural ecosystem as carnivores. They fed on other fish. As we've researched further and developed our knowledge of their demands and requirements, we have been able to meet those nutrient and energy levels with other ingredient products. So I wanted to clear that.

On page 8, the fish-in and fish-out ratio is something you'll hear of at times, and anecdotally people will sometimes reference numbers that are no longer relevant or accurate. If, for example, you hear that it takes 10 units of a wild fish to produce one unit of an aquaculture farmed salmon that's incorrect. We are raising seafood products; we are utilizing animal proteins, plant proteins; we have a very small amount of fish protein in there and when it comes to oils we use animal, plant oils along with some fish oil. The reality is the fish-in fish-out ratio shows we're actually a net producer of seafood product, not a net consumer. The ratio is actually .5 to 1, which would be the approximate at the current levels in our formulations, design and use. That's a key message to pass on as well and that I'd like to share with you.

The research and development that Northeast Nutrition conducts is done in house at Huntsman Marine Science Center located in St. Andrews, New Brunswick. We have our tank fields set up there to conduct our internal research, and we do some collaborative research with suppliers.

I'm going to just go through the food manufacturing part quickly. It's at our Truro facility. It's computerized. We have extrusion technology in use so the feed is expanded as it's coming out of our extruder barrel, which allows for air pockets to form in the pellets, and then oil application when it's added to the feed goes throughout the full pellet of the feed. So when the animal consumes the feed it has the proper protein and energy levels to meet the nutritional requirements during its life cycle stage.

I've given you a few photos. I'll provide the actual presentation that I was going to give yesterday; it is easier to look at than this.

We do have packaging in 25 kilogram bags in bulk tote packaging to reduce our packaging requirement. Quality control is essential to make certain that we're meeting the specifications of our design and formulation. That is done on every lot that's produced and the samples are retained for two years after production in case there was ever a need for a food recall. So we follow our CFIA, our hazard analysis control point or HACCP program. We're also Best Aquaculture Practice certified, so we have our third party accreditations in our food production system.

Once the feed is made how do you use it? You have to know how to use it in order to be efficient and effective and to remove the opportunity for excess in feeding. So we provide feed management training to our saltwater site management teams, and we use cameras, underwater and at surface, to watch the animal behaviour during the feeding so that we minimize the potential of any excess feeding. Once again, feed is your greatest input cost. You don't want to pollute your environment, so we're doing everything we can to be effective and as efficient with our feed. We have automated feed systems that we've invested substantially in. I've given an example of our largest units in Newfoundland that are used; they are 400 metric tonne storage capacity. These are computerized systems that deliver the feed in doses that are measured so that we have accurate levels of feed administered to the cages to meet the requirement of the animals as we're growing them.

So the feed is produced; it's used efficiently and effectively on the site with technology and innovation that we've invested in.

I'm just skipping ahead through the presentation, sorry.

The final product that we produce is the Atlantic salmon, which is very healthy, tasty, sustainable. We're helping feed the world in what we do in our industry, and I hope that we're able to increase what we're doing as our part in production of Atlantic salmon products.

In closing, I've added a few slides from Kontali; it's from 2013 and is just for your information. I know it's a lot to look at at the moment, but it talks about markets in terms of the market of the Atlantic salmon in the global theatre and it talks about the harvest per region which is on slide 30. That's a little busy, so I'll let you digest that later if you've not seen that prior.

On slide 31, the take-away is that the global harvest of farmed salmon species is now at 2.841 million metric tonnes in the world of which we're part of in Canada. Of that 2.841 million metric tonnes Atlantic salmon represents close to 2 million tonnes. It's the substantial species that's being produced globally, and it's extremely important that we continue and remain competitive in our production here, feed being a very, very big component of that.

There are two slides left and then I'll stop. Total supply of Atlantic salmon species: Slide 32 gives you the bar graph to emphasize the significance of the Atlantic salmon production.

The final slide I thought was interesting. It shows an estimated catch of wild salmon in 2012. Please note the absence of Atlantic salmon in that slide. If it wasn't for Atlantic salmon production there would be a huge deficit in supply of salmon products for humans to consume.

That's kind of the quick ride I wanted to present to you today and that's where I'll end. Thank you for your time and having me here today.

The Chair: Thank you Mr. Taylor. Sorry we didn't make it yesterday but you did a great job in presenting the Coles Notes view.

Mr. Blanchard.

Mr. Blanchard: Thank you very much for coming to Halifax and to Nova Scotia to hear about what we're doing here. I believe it was 2003 when I last met with the committee. I think Senator Mahovlich was the head leader at that time and he visited our sites in Clarks Harbour when we were actively involved and still are doing halibut.

I'm going to present some information on Atlantic halibut aquaculture specifically. Unfortunately I'm going to end up reading from my notes, which I'd prefer not to do, but it's the only way I'll get the information that I'd like to get to you. Was the handout provided to you? Yes, that's it. So I'll basically be paraphrasing through that whole document as I go.

Atlantic halibut is closer to commercialization than any other marine finfish species in Atlantic Canada. We have the technical ability and marketing history to support a 5,000 metric tonne industry within 10 years.

There are three key stakeholders located in Nova Scotia and Prince Edward Island currently trying to dive the industry to success. These stakeholders have established an internationally renowned broodstock program, hatchery production history and grow-out capacity with demonstrated success in the harvesting and marketing of halibut. This forms a solid basis to allow a local integrated and stable halibut aquaculture industry to develop. Most critical for companies is to have access to working capital to allow operations to achieve an economy of scale required for profitability. This must occur soon before the small but dedicated group of private investors becomes financially exhausted.

The Atlantic provinces have long identified the need to diversify the aquaculture industry. Atlantic halibut was one of the first species identified as having potential for alternate species development and is the closest to commercialization for farming in Atlantic Canada. The reasons for this are: There is a demonstrated technical competence. We have 25 years of research experience in the culture of this species and have amassed a considerable amount of information on its biology, particularly regarding its reproductive and hatchery stages. Past studies have confirmed the biological ability to grow halibut through all stages of the growing process. Other Atlantic regions, Scotland and Norway, are successfully producing halibut for market.

Most importantly, there is a well-established market. Farmed halibut has been harvested and sent into the market consistently for over a decade obtaining a premium price. The market for farmed halibut is estimated to be in excess of 10,000 metric tonnes. Current total Canadian production is less than 50 tonnes. We are experienced in the sale and marketing of Atlantic halibut. It is a prized, high value white fleshed fish. The market for Atlantic halibut is strong and has a long history and has demonstrated sustained high value. There is ample room in the marketplace to accommodate cultured product.

Three stages are recognized in aquaculture development: research, pre-commercial development and commercial development. Atlantic halibut is at phase two, the pre-commercial development. At this stage the salmon aquaculture industry received significant funding and training support whereas the support for the pre-commercial Atlantic halibut aquaculture phase has been minimal. When support has been provided success has followed. An example of this is in broodstock development. A broodstock development program was initiated in conjunction with Fisheries and Oceans Canada with ACRDP funding in 2001. This was continued with a highly successful Genome Canada supported project which resulted in the mapping of the Atlantic halibut genome. This was further supported with an ACOA AIF funded program. Scotian Halibut Limited has been an integral player in this development program since its inception and was awarded the AIF funding in 2004 which has been the cornerstone of the Canadian industry.

The primary outcome of this program is that selected F1 generation broodstock is now being used for directed spawning, and commercial production of an all-female population has also occurred in the past number of years. It is estimated that this program is seven to eight years ahead of other countries' programs. We are holding ourselves ahead of everybody, and the opportunity for other countries to catch up really is not there within that timeframe.

The challenge of the broodstock is the cost. This burden artificially inflates the cost of juvenile production and puts tremendous financial stress on the individual company players. The solution to that is the provision of public funding for the broodstock development programs.

In terms of juvenile production there is only one company producing juveniles in Atlantic Canada. It occurs at the Scotian Halibut facility in Clarks Harbour and has an estimated annual production capacity of 300,000 juveniles and an expansion capacity to 600,000. Currently the oversea market is taking 80 per cent of all the Canadian production. So we basically are producing them here and exporting them to Norway and Scotland for grow-out. So we're losing that value added opportunity in this country.

In terms of grow-out in Atlantic Canada initial efforts to raise halibut began in the 1980s in sea cages with wild caught halibut in local waters. Over the next couple of decades increased interest in the farming of the specie would result in the sea cage grow-out and marketing of halibut.

In 2005 Canadian Halibut Incorporated, along with a number of public agencies and universities, initiated a research program to answer critical questions to be resolved prior to investment in a commercial operation. They were very successful in addressing many of the challenges encountered in marine cage grow-out of halibut.

Findings from this work suggest that Atlantic halibut aquaculture will be profitable in sea cages and has many positive attributes. These include Atlantic halibut can be integrated with salmon operations since it is not a vector for ISA. Intensified environmental monitoring to date indicates that the cages stocked at commercial levels do not create the level of environmental degradation of salmon cages. This is because the fecal matter is not de-positional in nature; it suspends quite well and is somewhat fluffy so it disperses very well into the environment. Also because halibut culture appears to be viable at smaller numbers than salmon, smaller sites could be utilized thereby making use of salmon sites that have been taken out of production as salmon production has been moving to larger sites. So there is an inventory of smaller sites that could be reactivated and used for culturing Atlantic halibut. Halibut acquaculture uses much of the same infrastructure, technology and skill sets used by the salmon aquaculture industry with little or minimal modification.

The challenges are until economic viability is proven to the private sector no private investment or any level of risk taking by lending institutions will occur. This means there is no financing available for cage grow-out enterprises. Growth of fish is highly variable as well, so improvement in broodstock needs to be continually carried out.

With respect to land based grow-out, two land based grow-out operations are here in Atlantic Canada, Halibut P.E.I. in Prince Edward Island — I believe you may be visiting that site — and Canaqua Seafoods Limited located in Advocate, Nova Scotia. Both operations are successfully rearing halibut from juvenile to market and are regularly supplying the marketplace with products which are well received and fetch a premium price.

Challenges those operations face: they will not be at the critical mass required for profitability until grow-out systems that optimize the environmental conditions are scaled up. The solution to that is assistance in the financing of scaled up reuse systems and recirculation to some extent will allow production efficiencies to be achieved. As well, access to capital and lines of credit are necessary to increase the biomass that's being farmed.

In conclusion, the Atlantic halibut industry is poised for expansion to a $100 million industry in the Maritimes, but adequate financing for development to demonstrate economic viability is lacking. The Canadian Atlantic halibut industry partners have identified the need for timely access to capital as being the primary constraint preventing this industry from progressing to a commercial level. The viability of the farms from hatchery to grow-out is most impacted by the low levels of production which prohibit economies of scale from being achieved. The levels of production are low since there is a serious gap in funding programs to finance development activity, and current funding programs are short term and as a result do not allow maximum leveraging of funds from other players. Because of the developmental nature of the industry private lending institutions have no interest in halibut aquaculture ventures. So we must obtain the support from public funding to guarantee advancement through this critical period of development.

Thank you very much.

The Chair: Thank you all for your presentations.

We'll begin our questions with Senator Mercer.

Senator Mercer: Thank you for being here.

Mr. Taylor, you said that the feed is inspected by the CFIA, the Canadian Food Inspection Agency. How often are inspections and at what point in the process is it inspected and approved by CFIA? How has your relationship with CFIA been? I have heard various different reports from the aquaculture community on how people were at CFIA.

Mr. Taylor: CFIA inspects our feed mill once per year. There would be a second inspection required if we were not accredited by a third party with our HACCP certification, which is part of the Feed Assure program through the Animal Nutrition Association of Canada. Also we have our best aquaculture practice certification now at Northeast in Truro. That is a third inspection that's done. So there is one per year from CFIA. There could be routine visits as well but one official compliancy inspection. There's an inspection by the Feed Assure program for our HACCP certification and then there's a third inspection of our feed mill by the BAP for the certification. So relating to your question for CFIA it's one per year. It would be two if not for the other certification programs. The relationship is strong.

I can also speak from our Charlotte Feeds Mill in St. George which I manage. I do not manage Truro, I am in sales and tech support. Our relationship there with CFIA is strong as well.

Senator Mercer: One of the reports shows about 2 million total pounds. I'm wondering, is that Atlantic salmon that are being used? Obviously Norway is the big player. What is the pedigree stock that they are using?

Mr. Taylor: They would have their own internal broodstock programs. They would be using Norwegian salmon strains. I'm not personally aware of, for example, Marine Harvest's — they being the largest producer in the world — broodstock program in the regions that they farm their product. I just know what we manage from our end at Cooke Aquaculture. Obviously the supply, fish health and performance of our families and bloodlines are extremely important to our company.

Senator Mercer: Mr. Blanchard, you said something that I find curious. You said that some of your sites are smaller, have a smaller need than salmon farms. Halibut is a lot bigger than a salmon so I'm confused, or are you just farming less halibut because of the volume because of the size of the fish?

Mr. Blanchard: The site can have fewer numbers of fish. The market size of the fish is about 5 kilos, so it's not any different than the size of salmon that would be marketed. But because of the higher value of halibut you can run a smaller site and still remain viable.

Senator Poirier: Mr. Taylor, on the feed that you produce at your plant, are you supplying just Cooke Industries or are you supplying other companies also?

Mr. Taylor: Sorry I didn't cover that; that's a good question.

We supply most of our volume internally, but we do have some key external customers as well. We have a trout producer that's producing in Ontario, Newfoundland and Nova Scotia. That would be our key external customer, and then we also have a contract grower within our company that would be an external company that we work with.

Senator Poirier: And the lifespan of the feed that you're producing is what?

Mr. Taylor: The shelf life?

Senator Poirier: Yes?

Mr. Taylor: You can have the product held stable as long as it's not in the sunlight and it's kept dry. It could be easily nine months.

Senator Poirier: Are you the only feed company in Atlantic Canada?

Mr. Taylor: No. Skretting, which is one of the largest companies for production in the world, is located in Bayside, New Brunswick, and there is Corey Feed Mills in Fredericton, New Brunswick.

Senator Poirier: My other question is for Mr. Blanchard. On page 7 of your presentation, the halibut cage that you have in New Brunswick, I'm just wondering about the social issues. Has there been any problems in setting up the farming of halibut compared to oysters and mussels and the salmon farming and dealing with social issues in the community, because of the size of the cage. Is that something you've been dealing with?

Mr. Blanchard: It has not been an issue. The site that was being used for the halibut was an existing salmon site that had the licence amended to include halibut for production. So the visual didn't change, nothing changed for the site.

As I mentioned, the equipment and infrastructure for salmon farming and halibut farming are almost identical. The single biggest modification we do is on the bottom, which is held flat because the halibut lay down usually after eating. There's a shelving system that can be used but the bottom must remain flat. The equipment is effectively the same.

Senator Poirier: Are the coastal areas where you're located also residential?

Mr. Blanchard: Yes. This was in Lime Kiln Bay in New Brunswick on an existing salmon site.

Senator Poirier: How many farms are there in Atlantic Canada?

Mr. Blanchard: Right now there are only two land-based farms operating. Because of access to working capital for feed purchasing, Canadian Halibut wasn't able to sustain its operation and grow. So right now we have no cage farming in Atlantic Canada. However, 95 per cent of all halibut harvested in the world comes out of cages in Scotland and Norway and they use the same infrastructure.

Senator Wells: Mr. Blanchard, you mentioned access to public funding is necessary for some of the work that needs to be done.

I also go to Dr. Swan. The last paragraph in your presentation says that Norway is an excellent example and they experience growth due to their mature biotech industry. So here's my question: Do we have partnerships with the biotech sector in Norway to benefit from their extensive research and knowledge?

Ms. Swan: I'm not aware of any current partnerships. However, in the last year the biomarine business conference was held in Halifax and connections were made between our local aquaculture producers and international biotech companies. A lot of the key leaders were there and several sessions were held specifically on aquaculture and alignment with marine biotech industries.

Mr. Blanchard: We are working with our Norwegian customer on a genomics project through a partnership agreement with them. Because there are no programs to continue that work in Canada, and we're actually working with them.

The Norwegian Research Council has just recently invested over Cdn $5 million in genomics work in halibut in Norway, so we're piggy backing on their work and bringing ours to the table. Unfortunately it means that we have to share our own work as well to become part of that partnership.

As well, we're also working on some smaller projects, so there are examples of collaboration going on within the halibut sector. If we look at the research community itself over the past two decades, there have been numerous instances of collaborative work between Canada and Norway.

Senator Wells: The National Research Council has a number of centers of excellence across Canada. I note that there are a number of them that might be applicable. Bio-industrial Innovation Canada is out of Sarnia has $15 million; the Canadian Water Network out of Waterloo has $61 million; and one here out of Dalhousie University, the Marine Environmental Observation Prediction and Response Network, has $25 million. Are you involved in any of those centers of excellence?

Ms. Swan: The center of excellence at Dal does have a current project proposal that was supported by our association through a letter of support. We are not actively involved in the research program for that project.

Senator Lovelace Nicholas: Welcome. My question would be geared to Dr. Swan.

As you know, wild fish eat different types of food and the farmed animals are being fed the pellets containing chicken or whatever. Would the farmed salmon that people eat be genetically altered as a result? What would be the long-term effect on humans?

Mr. Blanchard: The ingredients in feed for salmon or fish in Canada, would not create a genetically modified component through farming of the animal. There is zero risk of that because it just doesn't work that way. Feeding animal protein to fish does not alter the fish. The fish body absorbs whatever nutrients it can from that and it's just used in the natural growth of the fish. It isn't transferrable to humans.

Senator Lovelace Nicholas: What I'm trying to say is we've been eating wild salmon for years and years and now it's being grown and farmed. You don't foresee anything in the years to come that would be harmful?

Mr. Taylor: It's a good question and I understand why you're asking it. I think the best way I can answer that would be that the ingredients we use are approved by the Canadian Food Inspection Agency. They are the same ingredients that would be used in terrestrial animal feeds, so for pork, poultry, dairy, beef, so they're safe.

In terms of fish, it's still a fish protein, as Brian mentioned, so they would be similar to the wild salmon.

Senator McInnis: I have a couple of quick questions.

Is the regulatory regime with respect to halibut the same as it is for salmon?

Mr. Blanchard: Yes, it is.

Senator McInnis: Exactly the same, so you have to go through all of the steps.

Mr. Blanchard: Absolutely.

Senator McInnis: Do you have any difficulties?

Mr. Blanchard: The length of time to get things done is significant. Something we would see as simple, say, amending a licence to farm another species on a site would have to go through the same process for halibut or for cod. The process is the same. The length of time taken is usually the most significant piece for us.

I can actually give you a very quick example. We have some spare space at our farm in Woods Harbour. We'd like to do a project with a local oyster farm because we have tanks that are big enough to do some remote setting. We applied I think back in January for just an amendment to do four days of work, basically fill the tank, put the spat in, bubble some air in, settle the oysters and then have them moved to the oyster farm. We are still in the process of trying to get a permit to do that. During that period of time the biological clock is continuing to tick along. I think it's a good example in that we're farming and we have biological restraints, but the regulations sometimes don't recognize the biological constraints. If we don't get that permit in time, then that whole project will have to wait for one year to restart it again.

It's a very small project. It's experimental in nature, but it has to go through the complete gamut of a licence amendment to our permit.

Senator McInnis: That is helpful.

Marine farmed aquaculture has been around for decades. I am kind of a freshman senator in dealing with some of the public servants in Ottawa. Do you get the sense that they haven't actually bought into this industry at the moment? Are they actually taking it seriously?

Mr. Blanchard: You know what, I believe everybody is taking it seriously. However, getting the attention it needs to push things through the bureaucracy may be lacking. Often there may be very good directives from up top and good support from down below but in the middle, depending on, for example, the call of an election, we can get trapped into thinking, "Well, we should park that because it could become an election issue." I think sometimes that impacts how we move things through.

If we look at this national act that we're all trying to hopefully get, I can actually say that I was part of that discussion on whether or not we needed it nearly 20 years ago, and most recently the discussion five years ago. Sometimes we're forced into trying to align ourselves with the political environment in determining whether or not there's enough time to get something through in regard to the act. You know, we have a supportive environment right now and we're trying to get the act through but sometimes we run out of time because the business of government goes on pause as we take six months out for an election. So I think that there's a will to do stuff, I think there's support to do stuff. I think that we sometimes just have outside influences that just make getting through the system unmanageable, and I've been witnessing that for years and years and years. We can produce every five years the new development strategy, which is a repeat of the old development strategy, but we never achieve what we were trying to do in the last one.

This country is completely stagnated. I work all over the world and I see the growth that's going on all over the world, and you come back and you just want to pull your hair out. We're constantly caught in the debate of farm versus wild and that debate is kind of rolled into closed containment, land versus sea right now. All the while we have aquatic resources which no longer are actively being involved in pelagic fisheries that could be used for production of protein.

I was here in 2003 going through the same thing. I don't know if I'm going to outlast everybody on the next round. But I think there is support.

Sorry to rant, but I think sometimes there's the outside influences that really impact really good work that's going on. Right now this push for the act does bring clarity to how we can move this industry forward. The reality of 9 billion people is coming at us like a freight train. The reality of food security in this country already is that we're not there. We have to be aware that we have resources that can be used for the production of food. And I see my families' farm land being turned into subdivisions. That land should be protected, the same as we look at aquatic resources. Those aquatic resources need to be protected.

Senator Munson: I'll put my two questions together, but they are not related.

Earlier testimony from Mr. Corey talked about rainbow trout production. I was fascinated to read that he said the supply of eggs is a major challenge to expansion of this sector; the source is from a single U.S. supplier. The question is why can't we be innovative and have this sort of thing being done here, Dr. Swan? Why is that not happening here? Why do we have to rely on the United States of America for this?

On the money part of it all, Mr. Blanchard, you have it in bold type here, the Canadian Atlantic Halibut aquaculture industry partners have identified the need for a timely access to capital. We're so far behind I don't think we'll ever catch up to other countries. If this is such a sustainable industry you would think people would be at the door financing. Who do you go after for the money and how do make it any more attractive than you've described it so far?

So first question is on eggs and the next is on money.

Ms. Swan: Broodstock availability and egg supply within a number of our diverse species operations remains a priority for the association. We have a few examples of single suppliers being relied upon for our species, and it is a contentious issue and a nervous issue for our producers. As of right now we haven't been able to find research partners to tackle these issues for various reasons, and funding in order to push a bit of this work forward has also been an issue.

Senator Munson: What are those various reasons?

Ms. Swan: With regard to finding expertise? I think that a number of the research partners that we've approached had focused priorities in other areas and weren't able or willing to tackle this particular issue.

Mr. Blanchard: With respect to halibut financing and financing farms, the single biggest thing that we need access to is working capital to purchase feed. You cannot get feed credit at the feed company. You can't go to commercial lending sources to get financing for that feed, and it's all related to the bank needing something to be able to put their hands on as collateral or inventory.

The salmon industry has an extremely long history and is very stable so banking is easy to do, well relatively easy to do. For halibut because it's a new species in farming or not proven yet, commercial lending is not available.

In this province the Auditor General said we don't want loan guarantees on the books because it creates a higher liability on the books of the province. So loan guarantees for the industry were removed I think back in 2003. So we can't go to get a loan guarantee from the province to go to a bank to access that financing. If we wanted to build a building, we can get money for that, but it's of no value to get a building when you can't actually pay the labour, buy the electricity, pay for the oxygen and access the working capital.

Part of the challenge is we are regulated in part by the Department of Fisheries and Oceans and we are not under the Department of Agriculture. We do not have access to the programs that agriculture would offer. For example, something as simple as crop diversification, about five years ago there was a program for farmers to transition from one crop to another with available funding of over $250 million. Those programs don't exist in aquaculture or in fisheries. So we can't go to the fisheries loan board here locally and access the same type of programs that farming would traditionally be able to do. Part of that goes back to the need for an act with some clarity. Where do we fit?

We're a land-based farm or a sea cage farm. We put the juveniles in and we grow them to harvest. We're a farming activity even though we're using either common resource property or a land-based farm yet we're treated as fisheries. And because of that, without that clarity, it's quite hard.

I'll just go back to the diversification issue. For a traditional farmer to transition to other crops, the time it takes to transition the crop and get to the economy of scale where the new crop is viable, he relies on the support programs. If you were a salmon farmer or a trout farmer and you had a site and you wanted to transition into halibut or any other species, the time period that you would take to get up to the economy of scale so that you're profitable again is too long without bridge financing or a support mechanism. That's where the question becomes, "Why would I diversify; why would I look at alternatives if I'm going to run my business into the ground because I can't cash flow it through the two or three year or four year period of time to get up to economy of scale?" If you were a traditional farming operation there are mechanisms to allow for that to happen.

So that's the short answer.

Senator Raine: Thank you very much and I really appreciate all of you being here.

A while ago we did a study on the grey seal and the proliferation of it and actually recommended a cull. During that study we learned that the quality of protein in grey seal and also the quality of the oil from seals was very high.

Mr. Taylor, have you looked at seals as a source of protein for fish?

Mr. Blanchard: You'd be happy to know that such a project was done in Newfoundland in the early 1990s. In fact, a former minister of fisheries in Newfoundland was one of the partners in that project. It was a moist diet that they used. They blended the seal meat in and not one salmon would come close to it. They could not get consumption to happen.

Senator Raine: Rats. Thank you.

The Chair: Great way to end for sure.

Once again I want to thank our witnesses for their presentations. I remind all witnesses that if there's something you think of afterwards that you think would be a benefit to the committee in its findings in the study, please feel free to forward it.

I listened intently and I liked the reference to the halibut having some human qualities; they like to eat and lie down. We're going to eat shortly, senators. We're going to be back here at one o'clock, so nobody will be allowed to lie down.

(The committee adjourned.)