Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 15 - Evidence
OTTAWA, Wednesday, October 8, 2003
The Standing Senate Committee on Fisheries and Oceans met this day at 6:23 p.m. to examine and report upon the matters relating to quota allocations and benefits to Nunavut and Nunavik fishermen.
Senator Gerald J. Comeau (Chairman) in the Chair.
[Editor's Note: Some evidence was presented through an Inuktitut interpreter.]
[English]
The Chairman: This evening we continue our examination of matters relating to quota allocations and benefits to Nunavut and Nunavik fishermen. With us this evening is Mr. Neil Greig, a director of fisheries with Makivik Corporation of Kuujjuaq, Quebec. Mr. Greig is a recognized expert in northern fisheries and food processing. He is a long-time participant in various policy levels in the industry, a one-time owner of a large fishing vessel in the northern shrimp fishery, and has been a pioneer in establishing portable abattoirs for caribou as well as fishing-processing facilities in the North.
Welcome, Mr. Greig. You might want to introduce your colleague. We look forward to your comments and questions that will follow.
[Interpretation]
Mr. Neil Greig, Adviser, Makivik Corporation: Our secretary, Mr. Berthe, from the Corporation of Makivik, had to attend a meeting in Kuujjuaq and is unable to be here today. Mr. Adamie Alaku, the vice-president of our program, is on the plane from Nunavik, and was unable to make it in time for this meeting.
[English]
For ease of conversation, I will introduce my associate, Mr. Marc Allard, who is an advisor in fisheries matters and marine biology, sits on many committees for, and on behalf of, Makivik fisheries division. He resides in Montreal, and is involved with seals hunting. He has been involved in the fishery with us for almost 25 years. I will not tell the story of when we first met, but it had to do with measuring fish. That was when we had lots of fish.
Makivik Corporation was established by special legislation pursuant to the James Bay and Northern Quebec Agreement. Special acts of both the Quebec and federal governments were required to enact this legislation.
Makivik Corporation is the Inuit party responsible for any results that occur from the JBNQA. As established in its charter, Makivik Corporation has the following responsibilities to its shareholders: to receive, administer, use and invest the compensation money intended for the Inuit as provided for in the James Bay and Northern Quebec Agreement; to relieve poverty and to promote the welfare and advancement of education of the Inuit; to foster, promote, protect and assist in the preserving of the Inuit way of life, values and traditions; to initiate, expand and develop opportunities for the Inuit to participate in the economic development of their society through application of their skills and capital; to exercise functions vested in it by other acts or the agreement; to develop and improve the Inuit communities, and to improve their means of actions; and to assist in the creation, financing or developing of businesses, resources, properties and industries belonging to the Inuit.
In Northern Quebec, the Inuit have an established history of commercial fishing in the North, trading with the Hudson Bay Company and other trading companies in the late part of the 19th century and into the 20th century. These were for species of whale, salmon and Arctic char. In more recent times, the Inuit of Nunavik have been involved in commercial fishing for cod, turbot, shrimp, salmon and Arctic char.
Access to resources has been a major factor in the growth of the industry in the North and the capital to build a fishery. The seasonal nature of the fishery has also played a significant role in the evolution of the fishery. The modern fishery in which we now participate requires considerable capital investment. To this extent, we need suitable businesses that generate profits and employment opportunities for Inuit from Nunavik. To meet all the requirements for good business is difficult at the best of times — and even more difficult in the North.
In the section on government interventions and financial assistance, we tried to address some of the questions that were raised in previous papers. Makivik Corporation has, in the recent past, constructed four small plants to be used for caribou and marine products to supply the communities with a hygienic supply of country foods.
These processing facilities have commercial potential also for the export of caribou and fish species. Financial assistance from government for the operating capital for these operations does not exist in Nunavik. Any business of this nature is supposed to be able to raise capital through its own sources. Makivik Corporation is the only company with this type of financial capability.
As developers for local economies of our regions, we continuously try to create opportunities for businesses. Local people often request to have available buildings or facilities that they could lease or rent, depending on the circumstances. None of us will deny that in more developed regions of the country, you have roads and systems for communications, and access to water and other prepared sites, and that it is far easier to create a modern business environment. In the North, all businesses have to build their own facilities. This is a large impediment to growth.
There still is a problem of working capital to start the operation and maintain that business in a competitive environment. The fish business is very competitive, and has to deliver a product at world market prices, available to all consumers. Is there a place for subsidies for transport of finished product to market, or to underwrite some of the start- up costs or operating capital? In an ideal world, there would be no subsidies. However, in the North, we must look for creative vehicles that will allow certain ventures to proceed.
The cost of hydro, labour, insurance, water, sewage, taxes, fuel and transport are all major issues in the cost of doing business in the North. Reduce those costs and you create a potential for growth.
Investment in shore-based facilities for fish plants creates many employment opportunities in certain locations, but fishing in the North is of a seasonal nature, and the fish are harvested by a mobile fleet and subject to world market prices. An investment must be made in freezer facilities to store inventory to allow for year-round production from a processing plant or facility that is leased from a developer. The leases should be in line with those paid in Atlantic Canada to remain competitive. Alternatively, from an investment perspective, a mobile platform that supports freezing and manufacturing on board is the ultimate solution.
With regard to vessel operations, the question posed all the time in the industry by both government and interested parties is: Do you own your own vessel? There is considerable emphasis on: Why do you not own a vessel? It seems that in the fishing industry it is imperative to own everything. Does Air Canada own all its aircraft? Air Canada leases the vast majority of its fleet. Surely, then, the fishing industry can live with the same conditions.
Makivik Corporation was awarded its original licence in 1979, restricted to the North only. As a condition, it was required to own and operate a vessel only in the area of Ungava Bay and Hudson Strait, and NAFO area 0A and 0B, for shrimp only. Based on these facts, Makivik Corporation decided that, to become a member of the fishing industry, it would, and did, purchase a freezer trawler. It also invested heavily in the years 1979 through 1981 in research into fish stock identification in Ungava Bay and Hudson Strait, at a cost in excess of $5 million. This was done on the assumption that we were the only company to be allowed to fish that area, as we were excluded from the southern areas.
Within one month of identifying large resources of shrimp, Pandalus Montagui, the sub-species of shrimp, it became public knowledge, and we were surrounded by southern-based vessels that were allowed to take advantage of these new resources. Eventually, we were given full access to the shrimp in all areas. This did not happen until 1986. In this time, we learned the expensive lessons of the fishing industry. Accumulated losses forced the sale of the vessel, and opened discussions with the government as to greater access and better regional benefits for the licences.
Since the mid-1980s, many licence holders, especially those in the North, have been operating with what is termed as revenue-sharing joint ventures with vessel owners in the south. In many cases, these same vessel owners have a licence and a joint venture with a northern partner, which is an economic benefit to both parties. In the case of Makivik Corporation, we own 35 per cent of an operating company that charters a trawler from a vessel owner.
In order to clarify much of the innuendo surrounding the ownership issue, in 2003 Makivik Corporation requested clarification on this matter from the minister. The response was to agree with our position that we are not required to own a vessel. This does not mean that we will not own a vessel. We are, at this moment, negotiating an ownership arrangement in a vessel.
The situation still requires some further clarity. If licence holders were required to own a vessel, this would place a financial burden on those vessel owners with sharing arrangements, as their investments would be at risk if those licence holders were forced to remove their licence and acquire their own capacity. This would increase overall capacity when it is not required.
The awarding of the licence to northern regional groups was done on the basis of providing some economic benefit to the regions. Makivik Corporation is a regional organization and, as such, accumulates the financial benefit to the region. Makivik Corporation has invested much of the proceeds into the fishery-related projects and other economic development issues. As long as the regional or community nature of these licences remains, the community at large benefits. However, if you allow for individuals to own these licences, then the community will not benefit from any revenue-sharing arrangements.
Concerning access to resources, in accordance with various agreements, Makivik Corporation is given access to resources in various areas of the North. The Nunavik Inuit Marine Region Agreement-in-Principle recognizes Makivik Corporation and its subsidiaries and, accordingly, in 2003, the Minister of Fisheries recognized this and awarded a percentage of the overall increase to Makivik Corporation.
The offshore shrimp fishery in NAFO 0AB, or SFA 1, 2, 3 and 4, is governed by the seasonal fluctuations of the environmental conditions. We, therefore, have to work around this seasonal nature. Accordingly, areas 5 and 6 become very important for us to round off a year-round operation.
Makivik Corporation has always agreed with the sharing nature of Canadian resources for the benefit of those adjacent to the resources. In the early development of the offshore shrimp fishery, very few of the catches were in area 5, and even less in area 6. As environmental conditions changed over the last 10 years, we have seen a shift in the resources further to the south. This became more apparent as the cod stocks declined to almost nothing. Shrimp and other crustaceans replaced the cod in those areas. We were very happy when the Minister of Fisheries awarded the Northern Coalition extra tonnage of shrimp in SFA 5. However, as some of those resources have increased in other areas, we have not fared as well.
The threshold level for the offshore shrimp licence holders that is on the guiding principle of last in first out, or base, is 37,600 metric tons, of which Makivik Corporation receives one-seventeenth. We believe this level should be increased to ensure our own viability if and when the shrimp resources start to decline. In addition, we believe the Northern Coalition should have its allocation protected.
On the matter of groundfish, we have not been successful in negotiating a groundfish licence with the government through the land claims process. Several ministers have told us that we must buy a groundfish licence. This is not an easy task, and it does not help that we have insufficient access to turbot to allow us to consider acquiring the proper vessel to harvest in this fishery.
In 1985, we exploited the turbot fishery in the northern portion area of 2G, adjacent to Nunavik and Labrador. This fishery was done through an experimental developmental fishery, using a foreign long-liner. We used crew from Nunavik on a very efficient vessel. No other Canadian companies were fishing turbot in those waters, or in 0B. However, much effort was still focused on more southerly areas. This permit was never renewed.
Under the development quota system, started in 1992 through to 1998, our involvement in this fishery declined to its present level of 140 metric tons, or 2.5 per cent of the TAC. Nunavut companies benefited to 1500 metric tons, or 27.2 per cent, and one company from the south has the equivalent of 34.5 per cent of the stock. This is very unfair.
We believe that we have as much history, adjacency to these stocks as our neighbours to the north and to the east, yet there is not a fair sharing of the resource. This needs to be changed, and only the government has the power to do this. If we are to purchase or acquire a groundfish licence or enterprise, the Government of Canada should remove any impediments to this acquisition to ensure that any provinces do not stand in the way of this acquisition.
Financial assistance should be given in order to acquire these licences, much the same as has been done as a result of the Marshall decision.
The development of the turbot fishery in 0A is of some concern to us, as it should be to others. We do not wish to deny our neighbours access to their adjacent resources, and applaud their recent efforts to develop the fishery. We believe we should be entitled to some of the resource in this area; however, the main concern is with the size of the stock and the management of the stock.
Moving on to science and surveys, surveys and stock assessments in the northern areas that include NAFO 0AB and 2GH have been very few over the past number of years. The northern shrimp licence holders and the Government of Canada have established a Northern Shrimp Research Foundation. This foundation was established in order to carry out research on the shrimp stocks in areas 0B and 2GH. This method or approach is not unique in the world, but many oppose it because it is seen as a government responsibility.
The surveys will not include 0A for turbot or shrimp, and we believe that the Government of Canada, through NAFO, must have more consistent surveys in 0AB and 1A, B, C, D and E. Our concern is — from information from captains and workers on vessels in the area — that the size of the fish is small, and that they believe 0A is a nursery area for fish that flow into 0B as they mature. I believe you may hear this from others, and it may mean a more cautious approach to the development of this fishery.
The Government of Canada should fund a survey of Ungava Bay and Hudson Strait for a four-year period to determine what stocks exist in the area.
In summary, economic initiatives for the development of the proper infrastructure should be established in an orderly fashion that allows for growth without adverse impact on the resources. Emphasis is required to create some valued-added processing and markets that will bring export dollars to Nunavik.
We should not be forced into purchasing large vessels where the resource base or seasonal nature does not justify an investment, especially if it is a regional or community-based licence.
Acquiring a groundfish enterprise is required. The government should establish a similar program as that established by the Marshall decision. No restriction should be applied to the type of vessel or location of operation. Government should help.
We would like assurance that we will be given greater access to 0B turbot. From our current 140 metric tons, we would like an increase to 1,000 tons. We would like access to area 0A.
Shrimp licences should be protected to ensure that Makivik Corporation has a guaranteed level of harvest to no less than one-seventeenth of the 37,600 metric tons — or 2,211 tons — and that the Northern Coalition allocation of 6,120 tons be made permanent.
Training of Inuit crew to the highest level is a priority, and should continue.
Scientific surveys and resource identification should be more frequent. Specifically, there is a need for immediate surveys in 0AB, Ungava Bay and Hudson Strait.
There is also expressed concern, and the need for a more cautious approach, to the fishery in 0A.
If I may add, the direct employment income generated from the shrimp fishery alone for Nunavik is in excess of $1.5 million a year. Seventy per cent of the crew operating on these vessels are Inuit from Nunavik, or beneficiaries from Nunavik. Additional indirect benefits are accrued through flying on our airlines, First Air and Air Inuit, for all our crew who travel to and from the vessels.
Perhaps I should add that there is as much benefit applied in Newfoundland and Nova Scotia, by virtue of the fact that we off-load our vessels in those provinces, and we resupply from there also. An average cost per landing is in excess of $200,000. Therefore, there are large spin-off benefits to other areas of Canada.
The Chairman: I will ask members to bear with me this evening. Since we will be sitting again later this evening, we will not be able to go into overtime. Once I give senators the nod, I would ask them to cede their place to the next senator, so that every senator has an equal opportunity to pose questions. If we have time for a second round, obviously we will come back to them.
[Interpretation]
Senator Adams: Your presentation was clear, but I would like to have more clarification about developments that have taken place in the community of Kuujjuaq since 1979. What has happened so far?
[English]
Mr. Greig: There is revenue sharing of the monies generated from the fishing arrangements, and we benefit quite substantially from these arrangements. Those revenues have been reinvested into different community projects, not the least of which is the four plants that were established for the caribou. They have been invested in arts and crafts development as well as in the research centre in Kuujjuaq. They have also assisted indirectly in the hatchery project that you saw in Kuujjuaq two years ago.
Makivik donates money to projects through the community donation fund. Through 1984 to almost 1990, we invested equally with the federal government — with Fisheries and Oceans — in inshore research and development, predominantly in Ungava Bay. We have also done additional development work in Hudson Bay for molluscs and shellfish, for diving operations.
We have a tendency to allow local developers to try to develop themselves, as opposed to us pushing the envelope all the time. We believe it is up to them. We will invest time and effort in assisting them, but they have to carry out the actual development. However, if it is a project of a regional nature, Makivik will take the lead role. I hope that answers your question.
[Interpretation]
Senator Adams: My next question has to do with the turbot caught in the waters between Baffin Island and Quebec. As I understand it, the government allocates the quotas in that area, and a certain allocation is an experimental allocation. Makivik Corporation has a certain allocation in the 0B area and the situation is different with respect to 0A. I also understand that, under the agreement, the Baffin Fisheries Coalition allots certain quotas to corporations, and I think that is up to 10 per cent. Is this enough quota for you? Is the BFC allocating enough quota to the communities so that they can benefit? Are allocating quotas to Newfoundland fishers who have fishing vessels?
[English]
Mr. Greig: I will try and answer this as diplomatically as possible. As the two senators from the North will know, I am not known for my diplomacy.
The quota establishment process is established by NAFO, the Northwest Atlantic Fisheries Organization. There are bilateral agreements between Canada and Greenland, but essentially NAFO does all of the surveying. Through a scientific process, we agree on the number.
As you say, 0A is a different fishery from 0B. In my opinion, much more attention and caution is required in the development of the 0A fishery. It is still a developmental fishery. There are still foreign vessels fishing in that area, for and on behalf of the Baffin Fisheries Coalition or other Nunavut entities. They are fishing under various types and styles of fishing agreements. I am not privy to their agreements, and that, really, is none of my business. Many of those vessels are from Newfoundland. Without having all the up-to-date knowledge of the situation, I can say that these vessels are available, and they provide as much benefit to Nunavut as they do to Newfoundland.
Is the region and are the communities at large benefiting? Again, I cannot answer that. That is up to Nunavut. I would assume that, in their methods of allocating what I would call sub-permits to representative companies in Nunavut — they are either representing hunting, fishing, trapping associations locally — there would be a community benefit. I assume those are, in fact, the arrangements. Again, I am not privy to those specific arrangements.
With reference to 0B, the Canadian quota is 5,500 metric tons. Regardless of what we wish or want to do, we have to work within those quotas. Nunavut has 1,500 metric tons. They should be able to operate a vessel in the season that is available to them for those 1,500 tons. Having said that, fishing conditions, catch rates and vessel performance will all determine if they are able to reach that capacity.
I believe they have broken it down into smaller elements to allow other vessels to come into the area. We have no problem with that as long as the benefits accrue to the region. Again, what they do with it is not my business.
Nunavik or Makivik obviously want more. We cannot even consider acquiring or making substantial investment in a vessel when we only have 140 tons to fish. It just does not make economic sense. We have been quite successful in the arrangement we have for the 140 tons, but it is not sufficient to think about an investment. We require an allocation of metric 1,000 tons, and obviously, we want that. If it were given, we would take it.
[Interpretation]
Senator Watt: I understand what Senator Adams was asking about. This is difficult to discuss. However, you are talking about where you get your quotas and what you have right now — the metric tons that you receive right now — and that you are not able to make money out of these things.
Where else can you get this resource? Where else can you go?
[English]
Mr. Greig: Our only options available are to go out and buy an existing groundfish enterprise. That is a core enterprise, probably Newfoundland or Nova Scotia. It depends on the size of the vessel and the amount of quota that it has or the allocation that it has been given and whether it is a freezer licence or is it a wet fish licence?
If we were able to acquire one of sufficient capacity and allocation, we would be able to fish in the north and fish other groundfish species else where in the south — not that there is a lot of groundfish species left to fish. The 24,000 metric ton quota recently announced in 2J3KL is not a lot of fish.
However, the price of turbot and some other groundfish species in today's market is very good — almost three times the price of shrimp. It used to be the other way around. Those are the only opportunities available to us to go elsewhere. Could we go overseas and fish outside Canadian waters? We cannot do that without the proper licences from the Government of Canada.
[Interpretation]
Senator Adams: Today, do you know what economic resources are available out to you?
Mr. Greig: Yes, we do know of one, or two or three. There are people out there that are making tons of money. However, I do not want to say how much money, because this is available to be everybody, everybody is listening.
Senator Watt: You mentioned that shortly after you began in 1979, you were working with the Nunavummiut, bringing them along with you as you are fishing.
Why is it no longer this way? You are neighbours with the Nunavut. It seems to me that you two should be working together.
[English]
Mr. Greig: It is an extremely difficult question. For many years, the Inuit of Nunavut did not participate in the fishery. In 1986, I had help from Senators Adams and Watt in addressing this issue. We made representations to the Government of Canada that the Inuit of Nunavut should be a participant in this fishery. Everybody knew there were land claims coming downstream at some point in time; nobody knew when.
We made arrangements at that time that, yes, they would get a permit. I have to go take my Makivik hat off and put my personal hat on here. At that time, I was also a vessel owner. We owned two vessels — the Aqviq and the Kinguk — that we used in joint ventures, one with Makivik Corporation and one with Qikiqtaaluk Corporation of Nunavut.
To this day Makivik Corporation still operates in conjunction with that operating company. They have had a long relationship with that company. From 1986 up until probably 2000, Qikiqtaaluk Corporation participated in that system also. We provided training to them, we provided a lot of my own personal expertise to them — albeit, sometimes they paid for it, sometimes they did not, but that was a commercial arrangement. We essentially brought them along to a place where they were capable of doing things by themselves, as is natural.
We do have another joint venture with Qikiqtaaluk Corporation under a company called Unaaq Fisheries, which was established also in 1987 and operates through a revenue-sharing arrangement with Clearwater Fine Foods of Nova Scotia. It has been quite successful since 1987. At that time in 1987 through to 1991, I was part of that venture also with Clearwater, Farocan and myself — Farocan being the operating company at that time that operated in Nova Scotia.
Nunavut has chosen to go in their own direction — and rightfully so. We have chosen a different route — albeit with the same objective of one day owning our own vessel. However, the economic analysis of a seasonal fishery just does not allow substantial investment in the fishery. The large vessel owners are the people who have invested in the fishery to date — a new trawler will cost $34 million. That is a lot of money for any bank to put up and for any owner to guarantee. The capital required to do these things is excessive at best.
[Interpretation]
Senator Watt: I would like further clarification — later on — as to how you can work together as Inuit. We will leave this issue for now. We will get back to it.
I would like to understand what you want us to do here for you. What recommendations can you make to the senate committee here?
[English]
Mr. Greig: I have to be a little careful here because, I can speak for Makivik, and I can also speak from experience. The more you can cooperate, the better off everybody is. I would like to see more cooperation but it has to be equal. There should be no sticks. You cannot have one with a stick and one with a toothpick. Until the playing field is levelled a little bit, unfortunately Makivik will be the one with the toothpick.
Better sharing of resources would lead to better joint venture possibilities. We have to overcome. I am not speaking on behalf of Makivik; I am speaking from personal experience. You cannot have five fish plants in the north, producing shrimp. It just does not make sense. We would all love to have the jobs and employment and money in our communities. However, some communities are better at doing it than others and maybe that is what we have to buy into.
Royal Greenland is actually considering opening up a shrimp peeling plant in Denmark. That is a significant move, and it is being done for economic reasons as well. Careful thought has to be given to any process that involves large investments in the north.
For example, Makivik Corporation has to respond to all its shareholders. It cannot be seen as just investing in one vessel that might employ 110 people over the year. It has to satisfy all its other investors or shareholders in the region. Any venture that involves Nunavut, has to take all these things into consideration. Levelling of the playing field is paramount in determining what the best way forward might be. Without open access to quota, there is no level playing field.
The Government of Canada did do this for us in the 1980s. They levelled the playing field for us; they made us an equal partner with the rest of the fishery in Canada. We had invested in shrimp. They made that move and that was greatly appreciated. I am sure Senator Watt remembers the days when we were struggling to get this going.
Senator Watt: Is there anything else you want us to do?
Mr. Greig: We need greater access; we need more science in the north.
Senator Watt: More science?
Mr. Greig: Absolutely.
Senator Hubley: You mentioned that you presently have access to 0B turbot at 140 metric tons. What would be the sustainability? How much quota would sustain a vessel fully employed? It probably cannot be year round but what figures are we looking at here?
Mr. Greig: One thousand metric tons is not an arbitrary number.
Senator Hubley: It is not.
Mr. Greig: It is not. It allows us sufficient access to that resource to supplement our current fishing operations to make them more viable. We fish for shrimp and we would use probably the same vessel as some other operators already do to fish that resource. It makes that much more viable. It makes the jobs more consistent.
Senator Hubley: That would be what you feel you should have to make anything work.
Mr. Greig: Anything less than that does not justify the investment or even refurbishing our existing trawler to fish for that resource.
Senator Hubley: A new trawler was $34 million.
Mr. Greig: That is for roughly a 17-metre trawler, freezer factory with a full factory and these vessels that are that price have both groundfish and shrimp licences.
Senator Hubley: The licence comes with the vessel, is that correct?
Mr. Greig: No, the licence is awarded by the Government of Canada. We are given an allocation that we then place on the vessel.
Senator Hubley: When you mention a freezer, you would have to have a freezer trawler. You mentioned offloading in Halifax. Are there are no processing facilities there or closer?
Mr. Allard: No. The only facility up north is on the Greenland side in Nuuk.
Mr. Greig: I mentioned that if you were to create the infrastructure in the north, you have to build a freezer in the north to hold the tonnage that you are bringing ashore. If you bring that tonnage ashore, then you have the potential of establishing a processing plant with that to allow processing of shrimp — much as is done in Newfoundland, or Greenland or Nova Scotia. However, it cannot happen without the infrastructure. I do not know who has the capital to invest in that infrastructure.
The Chairman: For clarification, are we talking about shrimp or turbot?
Mr. Allard: The question was for freezers.
The Chairman: For the stocks?
Mr. Greig: Normally we have dealt with shrimp as being the money-maker or spinner. There is no facility in Nunavut that I know that is capable of handling the tonnages coming ashore.
The Chairman: Of shrimp.
Mr. Greig: Of shrimp.
The Chairman: We are not talking turbot now.
Mr. Greig: In Nunavut there is a plant that handles turbot. It handles 300 metric tons or more of turbot a year in its freezer. That is one trip.
Mr. Allard: Essentially we are trying to say that for us to invest in the fishery and have some stability at present with shrimp — and we have a significant amount of shrimp — it would be good to have access to several species. It is not only the mix. The mix that we need is not just the kinds of fish; we need more than one species. It is not only the amounts; it is where you can fish it. It is the mix of those three things.
A year like this year where turbot is strong and shrimp at an all-time low, the turbot would help offset the low shrimp prices. If we only have shrimp, we have very good years and very bad years. It is very unstable. We need that proper mix to make things sustainable over the long term.
Senator Hubley: One of the items in your summary- training of Inuit crew to the highest level is a priority and should continue. I think that is very good. Can you tell me what percentage of the crew is Inuit, generally?
Mr. Greig: Seventy per cent of the crew on our vessel is Inuit or beneficiaries from Nunavik. We started with probably 4 out of 20 to start off with.
Senator Hubley: Have you provided lots of opportunities?
Mr. Greig: We cannot stop training. Some of these fishermen are going to leave; some will be no good. However, some of them have gone on to be excellent fishermen; some of them have gone on to be excellent policemen or firefighters, because this is all part the discipline they get on the vessel during their training. It helps them establish themselves for other careers.
Senator Hubley: Are there are opportunities for them to move up within the fishery through training and things of that nature?
Mr. Greig: Yes.
Senator Cook: I am interested in your mobile platforms. How economical is that for building fish plants?
Mr. Greig: It is more of an industry term than a real estate project. When we say a ``floating platform,'' we are talking about a factory freezer boat.
Senator Cook: I pictured a barge-shaped platform with a facility.
Mr. Greig: You are not far off the mark. For years, both Mr. Allard and I have looked at that potential as being a more feasible way to develop marine resources of the north. We include seals in that.
These are mobile resources. They do not stay in one place. This might answer part of Senator Watt's question. Within the area of Ungava Bay and Hudson Strait, Nunavut and Nunavik will share resources when all the claims are finished and out of the way. With all due respect to the legal mumbo jumbo, we are going to call our cousins in Kingnait or Iqaluit and say, ``We are going to go up here, do you want to come?'' That in the end is how it will work, but until that point in time, we have to put up with the regulatory overburdened system that we have right now.
We will be able to develop the resources, not as you can in Newfoundland or elsewhere, but these mobile plants could be and should be looked at. If there is anything in addition, we could say maybe that is some research that has to be done as to the viability of those. At some point in time, you will have to export the product out, and if you can tow that product on the barge you are processing it on, then so be it, that is how you do it, or you meet up with the cargo boats that are in the region.
Senator Cook: Help me to understand the quota, the subsidy and the licence. The quota is set for the area by NAFO.
Mr. Greig: The scientific quota is established by NAFO.
Senator Cook: Who issues the licence, divides up the pie? DFO?
Mr. Greig: The Government of Canada, through the Minister of Fisheries and Oceans.
Senator Cook: We hear repeatedly the problem is the capacity of the quota to make the fishing viable.
Mr. Greig: Yes, for us to get our 1,000 metric tons we will displace somebody else. That is the only way it can be done under the current quota arrangement.
Senator Cook: Help me to understand the adjacency factor up into your community. By ``adjacency,'' you mean ``adjacent to your shores.'' What exactly is the principle of adjacency as it applies to the north? You talk about a fishing area way to the north of Baffin Island and you fish it. How does the adjacency factor come into play?
Mr. Greig: For us, the adjacency factor was dealt with through a government memo in the 1980s that established Nunavik as having some adjacency to Davis Strait — predominantly NAFO area 0B as opposed to 0A, and adjacent to 2G, as opposed to 2H.
Killiniq, which is recognized as a community under the James Bay and Northern Quebec Agreement was very much adjacent to the resources in Labrador and Davis Strait. I know it quite well; I used to fish there. That was back in the days we were pulling out 180,000 pounds of cod. That went by the by in the late 1970s. However, that was the adjacency issue.
Now, who is more adjacent and who is less — and with all due respect to Newfoundland — they claimed they were more adjacent to some than we.
Senator Cook: I was looking at your adjacency factor on Ungava Bay down to the Davis Strait. How do we solve this dilemma, to make the fishery viable? Are there too many licences or too few fish? Are we going the same way in the north as we were in the Grand Banks? What is at stake here?
Mr. Greig: I do not think there is a real similarity in terms of licensing of the resource between the Grand Banks and the area of Davis Strait and 2G. We are subject to seasonal and environmental restrictions so the resource stands in pretty good shape relative to other resources.
Having said that, fishing companies, fishermen, vessels will find a way to harvest anything if it is worth something. That is not saying they are bad. It is just the way of the industry; the way of farmers, if it is worth something, they will do it.
Are there too many licences? I would like to say there is not because I want one. I am just being honest. Is the resource in the north over-subscribed? From a biased point of view, no. However, others they may have a different perspective.
The area in 0A is not oversubscribed at the moment. We are extremely worried about the state of the stock. Is it a nursery stock that flows elsewhere? The size of the fish is small relative to what we are catching elsewhere — 0A compared with 0B. This is a concern for us.
Is it a genetic problem? We do not think so; however, the scientists have to answer that one.
Senator Cook: I hear you say that at the moment the turbot fishery is a very lucrative fishery as opposed to the shrimp. I read earlier in my notes you believed that 0A is a nursery for the turbot. Is there any evidence-based information to support that or is that what you are asking through the medium of the science programs.
Mr. Greig: We are asking through the science program that that be determined. We need proper aging of the fish themselves. We have fishermen telling us — and I think the catch rates and statistics will show this — that 50 per cent or 60 per cent of the stock taken from 0A, is less than 500 grams. That is not a very big fish. It is not a mature fish; that is for sure. The other balance is less than one kilo and I do not think that is a mature turbot either. 2.2 pounds may translate only in six years old.
Senator Cook: The turbot of my childhood was considerably heavier than 2.2 pounds.
Mr. Greig: In Killiniq, when we fished there in 1985 — I am referring to the corner of 2G and 0B — the average size of the fish was 3.5 kilograms.
Senator Cook: If you are fishing turbot, that is small.
Mr. Greig: We do not think so. The fishery in 0B has proven it can sustain it. We do not know about 0A though.
Senator Mahovlich: You mentioned that you were not privy to information on where certain vessels got their licences, is that correct?
Mr. Greig: Yes, that is what I said.
Senator Mahovlich: Licences are public.
Mr. Greig: Licences are public record.
Senator Mahovlich: It is government.
Mr. Greig: The licences are given to, I believe in this case, to the Baffin Fisheries Coalition but then they acquire or charter vessels.
Senator Mahovlich: The coalition does?
Mr. Greig: Yes. I am not privy to how many they charter to fish their quota. I could get that information.
Senator Mahovlich: Yes, it should be public knowledge.
Mr. Greig: It is public information. They have to permit each vessel as it comes in. There are both foreign and Canadian vessels prosecuting that fishery.
The Chairman: I am going to quote directly from your presentation earlier, where you said, ``As long as the regional or community nature of these licences remain, then the community at large benefits; however, if you allow for individuals to own these licences, then the community will not benefit from any revenue-sharing arrangement.'' I thought that was an extremely important statement, and it jibed with what you were saying earlier on.
What are you trying to suggest with that statement? Are there individuals who do want to have licences in that area? Or, was it that you wanted to keep it for your community?
Mr. Greig: A review of the granting of the licences by the Minister of Fisheries at the time to Labrador through Torngait Fisheries, to Makivik Corporation, to the Labrador Fishermen's Union and Shrimp Company, indicates that they were given as regional licences and to benefit the region, as compared to the individual, as a whole. It was a means of generating revenue for those regions without giving government grants. I do not know an easier way to say it. If you allow the same access to an individual, of course I would want it.
The Chairman: Is this being contemplated?
Mr. Greig: I am aware of companies that are owned by an individual or individuals who do want to do this. I cannot knock them. I would want to do the same thing if I were allowed to do it. It enters the area that we were discussing as to whether the resource is over-subscribed?
The Chairman: I am most concerned about this because it is the one area of Canada that seems to be trying to benefit the resource on behalf of its communities. Other communities have taken the corporate sector route with corporate donations of licences under the willing participation of DFO, which awards these licences to the corporations.
The north seems to have a refreshing way of viewing resources such that they are of benefit to the communities rather than to the corporations. I am not a socialist by any stretch of the imagination, but it is good to see such a benefit in the communities. If it is proposed that the northern fisheries have the same arrangement as the southern fisheries, the benefits of the community-based resources may disappear. I am quite concerned about this. I will be looking at this much more closely because I understand the message.
Mr. Greig: For us it is very important. Even if access to resources were given to an individual — not on the substantial nature that we are given access, but smaller allocations within the region of a community with the proper infrastructure — then I could understand that because the community would benefit as much as the individual would benefit. However, the individual is risking the capital. On the basis of the larger picture, certainly the regional approach is far better. If you reference the community development quotas, CDQs, in Alaska, you will learn that Mr. Gregory Fisk, formerly of Makivik, is involved and is very knowledgeable about the way we did this before he went back to Alaska.
The Chairman: The committee may want to revisit the question of value of benefits to a community holding the quotas versus private interests holding the quotas. We studied on that subject some years ago and it would be worth our while to talk about this again.
Mr. Greig: You could do that. I think it would also be helpful to others to keep the information straight. However, many of the corporate entities of the world such as Clearwater have a community conscience. I cannot knock that.
The Chairman: I agree. However, corporations work a little differently than communities work.
I have a question about the 0A turbot. Do you know whether the turbot of Atlantic Canada — including 0A turbot, all the way down to the NAFO regions — is all one distinct stock or are there different stocks?
Mr. Greig: I am not a scientist but prior to NAFO, there was the International Commission of North Atlantic Fisheries, ICNAF. They determined that the turbot was one stock. However, in recent years, NAFO has looked at it differently. Initially, they looked at turbot because of their interest in the fjord fishery in Greenland to determine whether they are the same stock or a spawning stock or a nursery stock. They have examined all those factors. We have some very good scientists in Canada who have determined that the turbot is one stock. Many of the captains fish on the nose and the tail of the Grand Banks for turbot and have found that that same turbot has spent some time in the north.
That is a question that the scientists could better answer, perhaps.
Mr. Allard: You are right on that one, Mr. Greig.
The Chairman: We will pursue it with the scientists. Do you think the 0A is the nursery of the whole stock of the East Coast?
Mr. Greig: I have to defer to captains and those who are out there fishing the stock. They will tell you about that.
The Chairman: Thank you.
Senator Mahovlich: What about tuna? I went fishing in the late 1960s for tuna and I no longer hear anything about that fishery.
Mr. Greig: The Northumberland Strait fishery was viable for tuna this year in P.E.I — the southern fishery.
Senator Mahovlich: Are tuna found up north?
Mr. Greig: No, it is too cold.
[Interpretation]
Senator Adams: The Nunavut government has written to the premier with respect to the allocated tonnage. Have you had discussions with the Nunavut government, the Baffin Fisheries Coalition, and the corporations that you mentioned about how you can work together on fisheries?
[English]
Mr. Greig: Yes, however, I go back to what I said earlier: It is much easier to discuss things on a level playing field. We have tried through another organization called the Northern Coalition to promote these sharing arrangements. Nunavut, rightfully so, wants full access and that is their position; whether I agree with it does not matter. If I were in their shoes, I would be doing the same thing and asking for greater access all the time.
My thought is that if Makivik Corporation does not share in the resources in a more functional way, then we will be fighting one another for a resource that may not exist in 10 years if we do not take care of business properly. That may be a bit blunt for some but that is the way I feel.
[Interpretation]
Senator Adams: The Baffin Fisheries Coalition purchases fish from communities such as Qikiqtarjuaq, Clyde River and Pond Inlet. They pay by the metric ton. Is this the best way to go about selling fish?
[English]
Mr. Greig: If I had the opportunity to do it, I would sell my fish in the water and make a great deal of money. P.E.I. does it as do many others. It is not a new process and it happens around the world. As long as the benefits accrue to the community or to the region, then perhaps there is nothing wrong with it.
Why would you want to invest capital in a fishery that is only in place for a maximum of — given the right environmental conditions — eight months of the year? At the best of times, it is 12 weeks of the year.
Are they going about it the right way? I cannot fault them because I would do the same thing. I was instrumental in developing these processes so I cannot knock them and say that they are wrong.
[Interpretation]
Senator Adams: You mentioned that more testing needs to be done. The DFO minister said that $200 million will be given out to do research in B.C. and Newfoundland. Has funding been given to research the areas of Ungava Bay, Hudson Strait, and 0A and 0B?
[English]
Mr. Greig: I have not seen any substantive work being done in our area. That is why we established the Northern Shrimp Research Foundation. The government has given the industry at large access to a quota that we translate into dollars so that we are able to charter research vessels to carry out research in shrimp fishing areas 2, 4 and 5.
The research will be done under strict government supervision because it is their program but we are paying for it through a common resource. It is another form of taxation but the industry, rather than the Canadian public, is being taxed. It is a voluntary tax. However, it is a common practice elsewhere but it is not being done in Canada. Again, much of it depends on the price of shrimp in the market but it will be a four-to-five-year project that will provide an analysis of the shrimp stocks in those areas.
I believe that work was done in 1999 and 2000 by Nunavut, DFO and the Government of Greenland on stocks in 0A and 1, A, B and C. However, the program is inconsistent. To obtain proper data, you have to establish a proper program over a period of time that will give you answers that allow you to make good decisions, as opposed to uncertain decisions. The government should also allow, and fund, much more research but, as a minister says, the department has no money and it has made constant cutbacks. This mechanism was to try to make it work.
When Makivik Corporation entered the fishery, all the research in Ungava Bay and Hudson Strait was done with Makivik money; there was no government money. The last survey in 1956 was on Frobisher Bay. We do not have a history of good research in the North in terms of resource analysis and identification — except for the inshore fisheries.
Senator Adams: I think it is currently about 8,000 metric tons in Nunavut. What percentage of that is the turbot and shrimp? Do you have any idea of the percentage they are fishing up there? I do not know if it is true but I think they are only catching approximately 3 per cent. Maybe it is 10 per cent.
Mr. Greig: If you are referring to the 0A or 0B stock, there are different levels for each one and I cannot remember the exact numbers. Turbot, I believe, is at about 27 per cent in the 0B area and 100 per cent in 0A for Nunavut. They have greater access to the shrimp than we have essentially because of the Nunavut claim on the stock that we identified. That is history now.
I do not want to give the exact number. Your researchers will probably have the right numbers. It is greater than the percentage that we have access to.
The Chairman: We will obtain these numbers at a later time.
Senator Cook: Throughout your presentation you talked about level playing fields. You said that at one time, you enjoyed a level playing field in the fishery industry. Do I understand correctly that the playing field is currently skewed against you? If so, how is that?
Mr. Greig: In 1986, the playing field was level in that we had equal access to the shrimp resources — as did the other northern shrimp licence holders in the offshore. Prior to that, we did not have the same. It was a very good government decision at that time, not only for us but also for other players.
I mentioned the level playing field in respect of the different levels of access that Nunavik has as opposed to the access that Nunavut has. Again, I cannot speak for Labrador, but I know they have even less than we have in respect of turbot. They will come to the table with the same complaint, I am sure.
Senator Cook: This was a DFO decision?
Mr. Greig: I assume that it was a DFO decision because we certainly did not agree with it. I believe it was part of the process of the land claims that allowed greater access by Nunavut. I cannot argue that and I do not speak on behalf of our negotiators on the offshore claims. I deal in realities rather than with things that may or may not happen.
Senator Watt: I have two areas to cover. A few weeks ago, officials from Nunavut Tunngavik Incorporated made a presentation in which they indicated their bottom line: they want 90 per cent.
Why could you not work out some arrangement with Nunavut? They do not have 90 per cent now but that is their request for the quota. If the quotas used by the other companies — other than Nunavik — are high, why do you not negotiate an arrangement with Nunavut Tunngavik, even if you have to pay royalties, apart from the joint revenue- sharing concept. Is that feasible?
Mr. Greig: If I had 90 per cent of the resource, why would I want to share it with anyone else?
Senator Watt: They have no infrastructure and they have no vote.
Mr. Greig: If they have 90 per cent of the resource, they can afford to do other things.
Senator Watt: Do you not want to take the risk?
Mr. Greig: It is not a matter of wanting or not wanting to take the risk. If Nunavut or any other region accesses 90 per cent of the resource, why would they want to share it with someone else? I understand that. Could we share that 90 per cent with them? We would certainly be open to discussions. However, recent history has shown that that will not happen.
Mr. Allard: If we could not obtain our own access, that would be plan B. The first choice would be to have our own access to create our own harvesting plans and perhaps invest in a proper vessel that could do both shrimp and turbot. One of the important things that arose here is the sharing of resources. In respect of the shrimp industry, it is important to mention that it is probably set aside from the other fisheries because a good sharing is currently happening in that industry.
The danger in asking for 90 per cent of a resource for Makivik and Qikiqtaaluk, and for Nunavut and Nunavik, is that you would need access to the southern resource to give yourself a year-round operation. If you have 90 per cent of the northern resource only, then you would make money for five months and lose money for seven months. You need to have some up north and some down south. We have shared. Newfoundland fishes up north just like we fish down south. There are seven fishing zones and each licence holder has the same amount of access. There have been a few strays from that principle but, basically, the allocation is divided 17 ways. Newfoundland fishes up north as much as we fish down south.
Senator Watt: I understand you have an arrangement with Clearwater.
Mr. Allard: Yes, it is the one that we share.
Senator Watt: Nunavut would also have an arrangement with Clearwater. What is the difference between the two arrangements?
Mr. Allard: Nunavik and Nunavut is a joint venture called Unaaq Fisheries, which operates with Clearwater in a 50 per cent partnership.
Senator Watt: One joint venture still exists.
Mr. Allard: Yes.
Senator Watt: Does it still exist today?
Mr. Allard: Unaaq fisheries still exists. Makivik has its own shrimp licence and they both have deals with the same company. Therefore, we share a partner but it is not a three-way agreement. Makivik had a deal with Farocan; Qikiqtaaluk Corporation also had a deal. We had separate boats and licences, but one management company.
Mr. Greig: Were the deals one in the same in terms of financial gains and employment gains? I can answer from both sides of the table that yes, they were equal.
Senator Watt: Seventy per cent of the crews on the ships are the Inuit from Nunavik. Does the same arrangement apply in Nunavut? Are 70 per cent of the fishermen on those boats Inuit?
Mr. Greig: Currently, we believe that the number is less than 70 per cent.
Senator Watt: Witnesses from one of the small communities on Baffin — Clyde River, I think — indicated that only a handful of their people work on the larger vessels.
You mentioned that you have a research foundation. What percentage of your catch goes into the foundation on an annual basis?
Mr. Greig: The percentage of our overall quota is only 5 per cent.
Senator Watt: Would it be an attractive option for the committee to make recommendations to the Department of Fisheries and Oceans that it at least make up the difference because you are contributing to the foundation for scientific research?
Mr. Greig: The position taken by the Northern Shrimp Advisory Committee was such that for the surveys to proceed in a meaningful and manageable fashion, we agreed that this portion of the increases in allocation given by the Government of Canada would be set aside. It is a public resource. In essence, the government cannot come up with the cash but it can come up with a public resource that allows us to fund the research. Was it a good thing? I believe it was. From a tax perspective, it is good because it is taxing the fishing companies and not the people of Canada.
The Chairman: Gentlemen, on behalf of the committee I thank you for your contribution this evening.
The committee adjourned.