THE STANDING SENATE COMMITTEE ON FISHERIES AND OCEANS
EVIDENCE
OTTAWA, Thursday, April 30, 2026
The Standing Senate Committee on Fisheries and Oceans met with videoconference this day at 8:31 a.m. [ET] to examine and report on the independence of commercial inshore fisheries in Atlantic Canada and Quebec, and the policies and legislative tools used by the Government of Canada to preserve it, such as the Owner-Operator Policy.
Senator Fabian Manning (Chair) in the chair.
[English]
The Chair: My name is Fabian Manning, senator from Newfoundland and Labrador. I have the pleasure of chairing this committee.
Should any technical challenges arise, particularly in relation to interpretation, please signal this to the clerk or me, and we will work to resolve your issue.
Before we begin, I would like to take a few moments to allow members of the committee to introduce themselves.
Senator Dhillon: Good morning. Baltej Dhillon, British Columbia.
Senator C. Deacon: Colin Deacon, Nova Scotia.
Senator Ravalia: Good morning and welcome. Mohamed Ravalia, Newfoundland and Labrador.
Senator Cuzner: Good morning. Rodger Cuzner from Nova Scotia.
[Translation]
Senator Boudreau: Good morning. Victor Boudreau from New Brunswick.
Senator Surette: Good morning. Allister Surette from Nova Scotia.
Senator Gerba: Good morning. Amina Gerba from Quebec.
[English]
Senator Busson: Welcome. I’m Bev Busson from British Columbia.
The Chair: On November 18, 2025, the Standing Senate Committee on Fisheries and Oceans was authorized to examine and report on the independence of commercial inshore fisheries in Atlantic Canada and Quebec, and the policies and legislative tools used by the Government of Canada to preserve it, such as the Owner-Operator Policy.
Under this mandate, the committee will be hearing today from the following individuals: Claudio Bernatchez, Director General, Coopérative des Capitaines Propriétaires de la Gaspésie; and Serge Fortin, Executive Director, Quebec Fishing Industry Association.
Mr. Bernatchez, you have the floor. I’m sure senators will have some questions afterwards.
[Translation]
Claudio Bernatchez, Director General, Coopérative des capitaines propriétaires de la Gaspésie: Good morning. My name is Claudio Bernatchez and I’m the Director General of Coopérative des capitaines propriétaires de la Gaspésie, which serves fishers across the four regions in maritime Quebec. Our offices are in Rivière-au-Renard in Gaspésie.
While the fishing industry has come a long way technologically since the first Europeans began to harvest cod in the 15th century, the culture around the industry occasionally bears a striking resemblance to the merchant days of the 18th and 19th centuries.
During this period, fishers would exchange their catch for coupons, which they used to buy basic essentials from the same merchants. The merchants therefore had total control over fishers’ activities.
Fortunately, today, a big proportion of independent fishers or owner-operators have freed themselves from this control and have taken charge of and operate their own business independently. They can establish mutually beneficial business connections with buyers. Meanwhile, some fishers, both new and established, can’t afford to buy fishing licences on their own, and that is to be expected. They have to turn to financial backers who lend money or guarantee loans in exchange for a say in the revenue earned from fishing. As a result, they don’t operate independently because they’re subject to certain restrictions. Let me give you three examples to illustrate the subtleties involved in managing a fishing business.
The first example is that of a fisher who takes out a loan from a financial institution. The institution lends them an amount of money that could run into million of dollars. If the fisher faces financial challenges in repaying their various lenders — we’ve seen this many times in recent years — the institution forces them to repay the loan first, which means that suppliers of goods and services in the community have to extend credit for potentially long periods, and this puts them in a vulnerable position. The fisher doesn’t have the luxury of choosing the debts they want to repay.
The second example is a processing plant that guarantees a fisher’s loan at a financial institution. The plant also literally oversees the fishing business’s income and expenditures. I was very surprised when I heard that. Thus, the fisher delivers their fish to this plant and doesn’t have any say on the landing prices that they are offered. The ancestral story continues and shows the fisher’s subservience to the buyer. Actually, at the beginning of the 20th century, our village experienced a fishers’ uprising, prompting the army to intervene. They were protesting against this kind of situation.
The third example is the government of Quebec, through MAPAQ, which guarantees a fisher’s loan with a financial institution. MAPAQ doesn’t allow fishers to ship their fish to another province, even though this would give them a better landing price. We got a letter from the minister about this around two years ago.
In the first case, loans granted by financial institutions over the past three years alone have helped fishers buy fishing licences at exorbitant prices — for example, $3.5 million for shrimp just before the stocks collapsed, $9 million for lobster and $18 million for snow crab.
It should be noted that originally, all DFO-issued licences cost just a few dollars. The DFO and fishers contributed to the current untenable situation, and financial institutions are reaping the benefits now. I’m telling you that the situation is untenable because during the most recent crises, the biggest stress factor for fishing businesses was the level of debt, which is very high for some businesses, and this has a big impact on the survival of these businesses.
In the second, we’re seeing a continuation of the old model — and I reiterate that it doesn’t affect everyone — implemented by companies from Jersey and others several centuries ago, which has now evolved into something more humane. Nevertheless, the notion of fisher’s independence is undercut because in practice, it’s administered by the buyer.
Lastly, the third case shows that the government has made the choice to maximize economic impacts in a given area, sometimes at the fishers’ expense.
The one thing these three cases have in common is the gradual and occasionally precipitous erosion of the fisher’s independence to make their own choices. In return, they make business decisions at some point either to get started in this field or to expand their portfolio of licences. When unexpected events arise, some are less well prepared than others to weather the storm, and this opens the door to potential buyers looking for opportunities.
Some of these buyers may be legitimate, but some operate in the shadows. I’m putting this in a nice way because in reality, some business relationships are rather dubious. I’m sure you’ve heard that from other witnesses.
Government agencies such as Fisheries and Oceans Canada do their best to monitor transactions, but they have limited resources and may not catch some questionable transactions.
If I had one suggestion for this committee, it would be that guilty parties should receive harsher penalties. That way, we could begin to slow down the unreasonable increases in licence acquisition prices and ensure that the next generation can enter an industry with an aging demographic and maintain the economic vitality of coastal communities that have always relied on fishing for their livelihoods.
Thank you for your attention. I will now try to answer your questions.
[English]
The Chair: Thank you.
Mr. Fortin, the floor is now yours.
[Translation]
Serge Fortin, Executive Director, Quebec Fishing Industry Association: Good morning, Mr. Chair. Honourable senators, thank you for having me.
I represent the Quebec Fishing Industry Association, or AQIP. We share the central objective of your study to preserve the vitality of coastal communities and to protect a public resource that must continue to deliver benefits for Canada.
Your committee has clearly heard about mounting financial stress and that the independence of the coastal model is under strain. You have heard that the price of licences has skyrocketed so much that sometimes, the paper they’re written on is worth more than the business operation, and this is locking out the next generation. You have also heard that independent fishers are the lifeblood of coastal communities. AQIP would like to add a small point. Today, some licence and quota holders are entrepreneurs in every sense. They manage large assets and make investment decisions and commercial choices. As such, being anchored locally is no longer automatically guaranteed simply because one holds a licence.
The cases that have been reported to our association show that sometimes, the threat of delivering somewhere else is used as leverage in discussions pertaining to finance, advances and other benefits. I’m not pointing a finger at anyone; I simply want to underscore that the reality has become more complex.
Processing plants are our regions’ economic pillars. They support hundreds of families, buy locally and invest in quality, innovation, food security and export. The fact is that many of these businesses are generational, family-owned businesses that are deeply anchored in our communities. In certain cases, fishers are also shareholders. As such, the line between fishing and processing is already more porous than what is recognized under the regulatory framework.
There lies the inconsistency. A fisher can be a shareholder in a plant, but a processing entrepreneur cannot hold any quota or licence or even have a minimum regulated access to ensure basic security of supply. However, without predictability, regional jobs become precarious, creating space for informal and opaque practices, and potentially for foreign interests with more capital who extract value from the fisheries.
We have a simple message: The era of caricatures is behind us. We’re dealing with a new reality now. We need to modernize the playing field in a pragmatic way to protect coastal communities.
Concretely, first, AQIP recommends developing a Canadian finance and credit guarantee tool for the next generation and for asset acquisition, modelled on the one for farmers. Second, we recommend mechanisms to facilitate intergenerational transfers, including phased-in transitions.
Third, we recommend the introduction of a strictly limited and regulated opportunity for minimum access or right to basic supply for plants to keep jobs and investments in the regions. Our fourth recommendation is to promote and authorize transparent minority partnerships and investments with disclosures and guardrails, instead of allowing informal arrangements to thrive. Our final recommendation is to strengthen financial traceability to follow the money and draw a distinction between legitimate funding and controlling agreements.
Our goal is not to go against the spirit of the owner-operator policy, but to ensure that in today’s economic reality, wealth from a public resource remains in Canada, continues to support regional jobs and is not eventually captured by foreign interests.
Thank you, everyone. I’d be very happy to answer your questions.
[English]
The Chair: Thank you to our witnesses. From the growing list we have here, there are several questions from our senators.
Senator Busson: Thank you to you both for being here. We have heard from a number of other witnesses too that, although the policy of the Department of Fisheries is to support owner-operators, it seems that what’s going on is actually the reverse of that. The owners are struggling to survive and are having a lot of issues.
As we heard your testimony, specifically, Mr. Fortin, you commented on the fact that these informal arrangements, as you put it, are difficult to trace. We’ve heard from other witnesses as well that the transparency of the registry does not exist, so it’s difficult to know how these informal transactions happen.
Could you talk a little more about that concern and how following the money might connect to foreign interference or foreign interests being a large part of the Quebec fishery? Mr. Fortin?
[Translation]
Mr. Fortin: On the issue of these informal agreements, I would like to add a small point concerning what various fisher associations have said. We’re not talking about plants putting pressure on fishers, but about fishers that approach corporate players and occasionally make outright threats to go somewhere else for funding or cash advances to start the fishing season or settle overdue payments . . . .
It goes without saying that with the current regulations and legislation, these agreements between fishers and businesses are often verbal. As we see it, the idea that businesses end up controlling fishers is simply not accurate. Indeed, we’re no longer in the era where there was a certain level of control, and now it’s a partnership where the businesses that supply us experience occasional financial hardship. I know this because I’ve experienced it myself in the past and I’ve had to help suppliers going through difficult periods. These informal agreements help businesses and fishers because for a business, a fisher declaring bankruptcy or transferring their interest to another business means a direct loss of revenues linked to the loss of production.
We’re talking more about a business partnership than covert control, hence AQIP’s recommendation to stop sweeping certain things under the carpet and to make everything public. When I talk about businesses, I mean fishing businesses, because the days of a simple fisher are long gone. Nowadays, businesses manage significant assets, which could be higher than the assets of several people here. They make business decisions and negotiate agreements. We’re really talking about business partnerships for the mutual benefit of both businesses.
As such, we think that modernizing the regulatory framework to allow certain businesses to sign agreements and contracts with business partners would respect the spirit of the law and show that there is no hidden control, only a partnership focused on mutual gain.
The skyrocketing price of quotas over the past few years has not helped. We need to realize that $10 million or $12 million to buy a quota is too much for a young person who wants to take over a business.
Today, for a young person to buy and take over the family business, paving the way for a partnership could reassure the financial institution and the person taking over the business as they know they have a buyer who will take their catch for the next 10 years because there is a partnership agreement with their local plant.
Some mechanisms could be put in place to ease the transition. That’s essentially the spirit of my presentation today.
[English]
Senator Busson: Thank you very much.
I will ask your colleague something. He made a comment that DFO has contributed to this issue, and you mentioned how the industry operates. Could I please ask Mr. Bernatchez to expand on your comment about DFO contributing to this problem?
[Translation]
Mr. Bernatchez: As far as I know, if DFO had enforced the regulations as originally established: If a licence holder stops fishing, they must return the licence to DFO because the licence belongs to them. However, in reality, what would happen is that a fisher would find someone to buy their licence and all they would have to do would be get DFO permission to complete the transaction. DFO wouldn’t look at the value of the transaction and only focus on transferring the title from one fisher to the other.
Over time, due to inflation, speculation and the state of stocks, we started to see transactions running into millions of dollars. That is what caused the biggest problem, as Mr. Fortin said earlier and as I said in my remarks.
However, I’m not blaming DFO because in reality, the fishers who entered into these transactions and got huge sums of money chose to do things that way. To this day, those planning to sell their licence or quota hope they’re going to make a big profit.
Right now, we’re caught in spiral where it’s virtually impossible to stop the practice because fishers who bought their licences at a steep price hope to make a profit and contribute to their retirement when they resell their licence.
It’s a very difficult situation and I honestly can’t see how we can stop the spiral.
[English]
Senator Busson: Thank you so much.
Senator Ravalia: Thank you to both our witnesses.
I was curious to hear from both of you about the relationship between Indigenous and non-Indigenous fishers. How does the fishery collaborate — if they do — and would you be able to give me the current state of that relationship, please?
[Translation]
Mr. Fortin: Mr. Bernatchez might be better placed to answer that question on the relationship between Indigenous and non‑Indigenous communities.
In terms of the relationship with businesses, we believe that we have a special relationship with both stakeholders, in the sense that it’s a business relationship that is strictly based on the benefit for both parties to do business together.
Currently, what we’ve heard on our side is that the situation appears to be fairly stable, in spite of some grievances about the distribution of quotas. Some Indigenous quotas are operated by non-Indigenous fishers — however, this is always hearsay — and that can cause some . . . . I don’t want to use the word “jealousy,” but there’s a sense of frustration because licences have been issued, but they are not being used directly.
However, I’d like to add a small point, namely, that the same thing happens with non-Indigenous fishers. We’ve seen some problematic cases where fishers have licences and quotas, and I’ll give you a concrete example. In the shrimp industry — where there has been no fishery for years — they just lease their quotas. Fishers always try to get the highest price when negotiating prices — I agree with my colleague Mr. Bernatchez — and this cuts off opportunities for our youth to take over because the price of quotas is extremely high right now. I agree with Mr. Bernatchez that we’re in a spiral where the price of quotas has increased at an exponential rate.
The situation also has indirect impacts where young people have paid $10 million or $12 million for quotas, but they’re not making enough income to repay their loans. We have seen young people turning up at plants and saying, “I’m having a hard time, and you’re not paying me enough.” That may well be, but that’s the conventional price and it’s the set price and there’s no way to raise it, and so they are forced to ask for financial help.
That’s a problem, and we have to take the time to see how the young generation can take the baton and get the situation back to a level where investing in the acquisition of a quota or a business offers potential to turn a profit.
A few weeks ago, I met a fisher who has two jobs. He fishes in summer and works in a plant for nine months to make ends meet because he can’t draw a salary from fishing at the moment. He bought his quota two years ago. It’s clear that this puts pressure on businesses, because there’s always a risk that they’ll lose these suppliers.
I went off on a bit of a tangent, but I wanted to provide a recap. Under the circumstances, I would say that the status quo is in order, in the sense that things are going well on both sides and we’ve not had a lot of negative feedback about this issue, apart from a few here and there.
Mr. Bernatchez: Personally, I think there are two ways to look at Indigenous and non-Indigenous relationships. From a human point of view, everyone recognizes the need for reconciliation due to atrocities committed in the past by governments and the clergy. A vast majority of fishers support reconciliation.
The rub, as we say, is that fishers are wondering how far this reconciliation will go and why it mostly involves fishing in our communities, even though there are other ways to promote it.
We understand historical and ancestral rights for certain types of fishing than others, because it’s clear that some species were not fished to ensure First Nations had what they needed a long time ago, but that’s another matter.
In this regard, I think that if the government could send a clear message stating that it will stop setting aside quotas for First Nations after a certain threshold, for example, the quotas would be more acceptable.
On the other hand, year after year, at least four Indigenous communities are members of the Association des capitaines-propriétaires de la Gaspésie. We work very closely with the three Mi’kmaq communities in Gaspésie, Listuguj, Gesgapegiag and Gespeg. We also work closely with the Wolastoqiyik Wahsipekuk First Nation in the Lower St. Lawrence and with Innu communities on the Côte-Nord.
We have organic connections. Quite often, non-Indigenous fishers have sold their licences to Indigenous communities at a profit. We were satisfied. We also assisted Indigenous communities in the transition to commercial fishing and some of them are still in that business 20 years later. We have a very good relationship with our Indigenous communities here. They are our partners and clients. We see them on a regular basis in our facilities at the boat yard, store and workshop. We have tried and managed to develop projects together. Generally, we have an excellent relationship with Indigenous communities, and this happens organically.
[English]
Senator Ravalia: Thank you. That’s very helpful.
[Translation]
Senator Gerba: I wish to welcome our witnesses once again.
My question is for both of you.
We understand that access to capital appears to be an endemic problem, so to speak, and a significant barrier to the next generation entering commercial fishing. I also understand concerns about inflated licence prices. What action is needed to address this issue?
Mr. Bernatchez: I can go first.
I joined this business in the mid-2020s, on March 16, 2020, the very day that COVID-19 forced us to shut down all institutions. It was a very difficult time for the industry in general, just as it was for other industries. That was followed by a decline in the populations of various species. We went through a tough time, and because of all that and the lack of income due to declining stocks, a highly problematic element became apparent, namely, debt load. This has pushed many businesses to the brink of bankruptcy. Were it not for some of the measures introduced to allow creditors to defer payment, many fishing businesses would not be in operation today.
I wish I could give you a solution now when it comes to debt loads and the cost of buying licences, but I don’t have one. Earlier, Mr. Fortin spoke about coming up with something modelled after Farm Credit Canada. The Canadian Independent Fish Harvesters Federation is working extremely hard to submit a proposal to Farm Credit Canada to include fishing businesses. We actually had a meeting yesterday to discuss this proposal. It’s a noble and worthwhile idea.
However, clear boundaries have to be established. We can’t keep looking for solutions to ensure that fishers have guaranteed loans, for example, which end up pushing them further into debt. We’ve hit the ceiling in terms of sustaining debt repayments. We have to keep in mind that the ability to repay is directly dependent on the resource, which has to be available and the market price has to be competitive. Fishers have no control over these two fundamental elements. We have to advocate for approaches and measures that secure the long-term availability of the resource. Even so, the past few years have shown that changes in the St. Lawrence ecosystem have had a more significant impact on some species than on others.
Mr. Fortin is better equipped to discuss markets that than me. Nevertheless, uncertainty means that we don’t know what can happen from one year to the next. Furthermore, economic uncertainty related to interest rates on loans can have a big impact on ability to make repayments. I’m sure you have heard about people who have mortgaged their homes for hundreds of thousands of dollars. A change of a single percentage point in the rate of interest has a real impact on their ability to make repayments, and so as you can imagine, if the debt is $3.5 million or even $10 million, interest rates will make matters worse.
We’re thinking about it, senator, but I don’t have an answer for now.
Senator Gerba: Thank you.
Mr. Fortin, you spoke about opportunities for intergenerational transfers, including phased-in transitions. Can you expand on that?
Mr. Fortin: First, I’d like to add to what Mr. Bernatchez said.
I have a financial background, and I’ve been in the fishing industry for just one year. Before that, I worked in aviation and security in the private sector for more than 20 years. My observation is that perhaps people wanted to artificially keep jobs in the regions and to fund them at great cost through government programs and the purchase of businesses, boats and licences.
Those loans would not have gone through in any financial institution. When one comes up with a purchase plan, they must also present a business plan and provide proof that the business they want to purchase is viable and profitable. Unfortunately, on our side, the gap between the rich and the poor in the fishing industry is growing wide. We see very wealthy fishers — it has to be said — and fishers who are having a very hard time. It’s sad to see that this situation was caused indirectly by governments that want to support certain regions or allow certain property transfer at any price.
In our opinion, to restore quota prices to reasonable levels, the financial market has to correct itself. By that I mean that fishers have to show mathematically how the business will be viable at a given price, rather than trying to look for grants that will keep the business on life support only for them to file for bankruptcy four years later. That’s the first point.
Another issue is intergenerational transfers. It’s important to understand that loans are high risk. We have discussions with banks that provide funding for fishers. These are high-risk loans. In some business sectors, experience is treated as a form of equity.
It’s not always easy when quotas go for $3.5 million. Furthermore, even if the interest rate is only 5%, not all young captains aged 28 or 30 have that kind of money.
Fathers often provide loan guarantees and stand as sureties in transactions with buyers. We see that in certain sectors. Nevertheless, there are possible solutions that would allow a young captain to aspire to one day take over the family business.
As I always say, being a doctor doesn’t mean you’ll make a good financier. My wife works as an accountant for physicians. My point is that the fact that your father is a fisher, and you have fished all your life and have spent time on a boat since the age of eight doesn’t mean you’re well prepared to take over and run a business. Opening the door to non-bank investments, for example, and working with committees that can be set up to provide coaching would go a long way to optimize the chances of having a successful transition.
We think there are possible solutions. We can talk about them and explore all opportunities that could be put forward, which could have a direct impact on the chances of having a successful transition. However, the first step is to bring down the price of quotas to a realistic level.
We have seen this and I can also tell you that our corporate players regularly hear from young owners who have purchased quotas at great expense over the last three or four years. One of my members told me: “The young man will never make it. He has two jobs and he can’t make any payments. He didn’t have money at the beginning of the season to buy bait. Unfortunately, he made a poor financial decision. I don’t know who gave him the funding, but he didn’t get the right guidance when he chose to take over that business.”
Senator Gerba: Thank you.
[English]
Senator Dhillon: Mr. Bernatchez, you said it well. It sounds like there is a spiral that folks are in.
Mr. Fortin, perhaps I can come to you first with respect to financial transparency and some of what is going on in that example that you just shared with respect to folks being caught in this very difficult place. They have to make decisions in the moment rather than to look at the big picture. Correct me if I have this wrong because I’m not a fisher. It is not my background, so I’m just trying to put things together. It feels like fishers, when they are stuck in that space, are pawning off their catch ahead of the season so that they can manage their livelihoods. In turn, this puts the plants in a difficult place, and they are held hostage. Do I have that right?
[Translation]
Mr. Fortin: I’m not sure I understood your question, and so I’ll provide a summary just to make sure I got the essence.
The fact that some fishery businesses are experiencing financial hardship indirectly increases pressure on businesses because there’s a risk that they may be forced to go out of business. Currently, because fishers are under extremely high financial pressure, sometimes they have to look for buyers who can pay higher landed prices per pound.
One of the problems we see in remote areas is that there are fishers — I have a document here that backs this up — who lobbied in January to be exempt from the regulations to allow them to sell to other provinces and countries. Fishers have been forced to sell outside in order to get higher prices and that puts local businesses that employ hundreds of people at risk of shutting down.
There is more pressure on fishers because success is not guaranteed if they don’t get along with their local buyer. That has an adverse effect where the price per pound keeps escalating. Plants reported losses last year and there were threats that fishers were going to land their catch in other provinces.
Last year was exceptional because an American company was coming to the docks to buy Canadian catch at high prices, and this resulted in financial losses for some plants in Quebec.
We need to find ways to make fishers more financially secure and provide security for their businesses to restore the sector’s stability and ensure the survival of existing businesses and fishers.
This does create collateral damage, because the financial hardship some fishers face creates a ripple effect across the entire industry and sector.
[English]
Senator Dhillon: Thank you. I appreciate that. That’s very helpful.
Mr. Bernatchez, earlier you shared that we’re in a spiral, and you do not see a way out of it. Can I ask you to look into the future? If the spiral is not addressed, where do you see us landing in 5 or 10 years from now? What is that going to do to the fishing industry, fishers and the entire economy relating to that? What does that look like for you?
[Translation]
Mr. Bernatchez: That could widen the gap between the rich and the poor, as Mr. Fortin said earlier. When prices are too high, only those on solid financial footing can buy. Even so, the people who are very secure financially will get to a point where they say that a business is not making sense and the licence will never be viable. Either the gap between the haves and have-nots will get wider or the market will dictate the peak eventually.
Perhaps there will be a few bankruptcies, even among the biggest companies, because they won’t make it. For now, no limits have been set other than financial ones. Earlier, Mr. Fortin noted that at some point, financial institutions that grant these high-value loans will have to tell fishers, “Either you can or can’t pay off your debt.”
For now, these institutions are a bit . . . . I’ll take the example of my daughter, who bought a home four years ago. The bank told her, “You can go up to such and such an amount.” I told her to wait a bit, do the math and take time to draw up a budget. In reality, the bank was saying that this person has this or that kind of income and can borrow this much. At some point, they could intuitively tell that perhaps she wouldn’t have enough money for leisure or for groceries. There’s a societal responsibility in the entire process, and we should not shy away from saying so. It involves educating and teaching our children and fishers, whether they are the next generation or not. We need to make space for that discussion.
Three years ago, one fisher called and asked me, “Can I buy a licence at such and such a price? Would you do it if you were in my shoes?” I have a background in education and I’ve never done any fishing. I told him I’d never go for it. I understand the resource is thriving, but that is a huge amount of money and he’ll have to pay it off for the rest of his professional life. He bought it anyway, because he wants to engage in fishing. He’s a great guy and I wish him well, but nevertheless, these people are taking huge risks.
Plants are also taking risks. We have a plant right next to us that has just invested a significant amount of money on resource processing. I spoke to a manager yesterday and I hope everything goes well for him too. Sometimes — this is personal and it doesn’t reflect the views of the fishing association I represent — I hear people saying that fishers are not making money, and I hear processors saying the same thing, and I wonder why they’re still open. If nobody is making money, well, maybe they should be doing something else. I’m in the dark about many things. Some information reaches us, but some never does.
Mr. Fortin: I’d like to make an important point, which is one of the reasons we wanted to be here today to represent processing plants. There’s a regulatory asymmetry that needs to be remedied in relation to what you pointed out. The current regulatory framework is based on a distinction that appears to be increasingly harder to justify. Legally, a fisher can be an owner or shareholder in a processing plant, invest in industrial businesses, and structure and diversify their economic activities.
Conversely, an entrepreneur who owns a processing plant cannot own fishing quotas or licences to guarantee minimum supply to maintain operations. They can’t have guaranteed minimum supply or formally invest in the sector in a transparent and controlled manner. This asymmetry creates an obvious injustice, particularly since plants are deeply rooted in their communities, support hundreds of direct and indirect jobs, buy their goods and services locally, and generate significant recurring economic benefits for their communities.
Nowadays, a fisher will need to spend millions of dollars if they want to start their own business. Gone are the days when a fisher could buy a boat for $10,000 and go fishing with a licence that someone gave them. On the side of businesses and corporate players, price escalation during the acquisition and heavy debt burden carried by some fishers have created intense financial pressure that pushes many fishing boats to land in other provinces and to sell to buyers from the U.S. and Asia.
Some businesses dealing with shrimp have been approached — I’m sharing this in confidence — for cash advances so that fishers can lease additional quotas, but if these businesses don’t advance the money, the fisher says that they’ll land their catch on the other side, and that Johnson in the United States will buy their fish. It’s difficult to guarantee a minimum quantity of fish for the industry. For the first time, all businesses are calling for the model to be reviewed and for businesses to be allowed to acquire quotas, or at the very least, to partner with fishers in a transparent manner.
We don’t want to do things in secret: If you have a quota to sell and it’s going for $2 million, and a fisher is willing to buy it, but they don’t have the money, can they come up with a business plan and we can provide the funding? We give the fisher a 20‑year loan guarantee and for the next 20 years, they will deliver their catch to us, and they won’t be paid any less per pound because prices in Quebec are fixed by agreement. This increases the odds that the fisher’s project will go through and they can start their business, and businesses, corporate players and processors have a guarantee that a minimum amount of resources will be delivered to the plant to keep it in operation.
From that point of view and in a context where job retention and regional investments are contingent upon stable supply, the lack of legal mechanisms to ensure this security creates a structural risk for regional businesses. We’ve seen this over the past few years when businesses have closed down, resulting in job losses in the regions. Furthermore, over the past three years, businesses have repeatedly said that even though this practice is common in other provinces and countries, we don’t have guaranteed minimum landings for our plants, and this creates collateral damage.
As Mr. Bernatchez said, if someone wants to buy a new machine, they go to the bank and say, “I want to purchase a fish‑cutting machine that’s going for $3 million.” The bank will ask the borrower whether they have customers, but it won’t sign off on the loan because they’re not sure how much volume they will be allowed this year. Our supply is not guaranteed, and so it’s hard to borrow or increase lines of credit. It’s the only business sector that I’ve seen in my life that doesn’t have a guarantee that it will get its raw material.
The market has evolved and the situation has changed. We’re at another stage where we need to reassess the business model and open the door to businesses working transparently with fishers, which comprise small and medium-sized enterprises, to ensure the continued viability of this sector. Currently, as Mr. Bernatchez pointed out, fishers are at risk, and so are businesses, and no one is making money. Perhaps it’s time to review the sector’s business model.
[English]
The Chair: Just before we go any further, it is 9:26 a.m. We have a hard stop at 10 a.m. I would like to advise our witnesses and our senators that we still have three names on the first round and one name on the second, and we have the Nova Scotia duo up next. I just want to advise everybody of the time constraints that we have.
[Translation]
Senator Surette: Before I ask my question, I want to make sure I understood that AQIP only represents processing plants, and not owner-operators. Is that correct?
Mr. Fortin: Processing plants only.
Senator Surette: In your previous remarks, and at the beginning of your opening statement, you spoke about injustice and noted that a fisher can own a processing business, but a processing plant cannot engage in fishing. That’s the main issue that we’re studying now in relation to owner-operators. I understand what you said about quotas, but it seems that this doesn’t apply to lobster fishing, which is carried out with traps. Does that also apply to lobster fishing?
Mr. Fortin: It may be applicable because whatever the resource fished and the plant that processes it, irrespective of whether it’s a quota or a number of traps, the fact that you can guarantee landings or raw material would ensure businesses are sustainable. Moreover, for some fishers, having a guaranteed buyer provides a solid foundation for financial planning.
Senator Surette: That’s the challenge, because for us, when we speak about an owner-operator, the individual has to be on the boat in person.
Mr. Fortin: Yes.
Senator Surette: If the operator owns a business, they still have to be on the boat and personally engage in fishing, while the opposite is completely different. As I understand it, and from what you’re saying, you don’t support the owner-operator policy?
Mr. Fortin: We’re still in favour of the owner-operator principle with a view to modernizing the business model for this sector. Some owner-operators have shares in several plants in Quebec, where fishers own three plants. We’re saying we still support the owner-operator principle, but we’re urging the government to be more open when it comes to funding, financial support and partnerships to develop and market produce so that corporate players and businesses can partner with these owners on the same footing as a financial institution or the government. I’ll give you an example. Some boat owners have loans and government guarantees.
Wouldn’t a business that could give owner-operators a guarantee be better placed to provide advice and help them grow and prosper than the government of Quebec?
Senator Surette: You spoke about informal agreements in relation to transparency. We have heard a lot about controlling agreements or business agreements, which is entirely different, because that destroys the concept of the owner-operator who owns the processing plant and hires a substitute fisher. The two concepts are completely different. We need to be careful about that. I’d like to know whether you believe that if we decide to take that direction of collaboration or partnership, we need to tread very carefully and not destroy the concept of owner-operator because it’s a matter of economic development for many of our small coastal regions.
Mr. Fortin: Absolutely. I’ve been told that what you’re saying is quite minor. It’s true that some boats may have faced this undue pressure from businesses that have helped them directly or indirectly financially or in some other ways, but I would add a small point and say relationships should not be generalized. The relationships I’ve heard about are in the line of, “I’ve been a fisher for 15 years, we go hunting together and I’ve helped them out before.” That’s a partnership.
We’ve heard about some cases where there were complaints in relation to fishing boats and fishers under undue pressure. Having regulations that would ensure transparency in professional relationships between the business, the bank and the fisher would prevent such cases.
I’d like to add a slight clarification. We still support the owner-operator principle, but we’re also calling for opportunities to allocate a minimum quantity of quotas to businesses to ensure their survival. I should point out that a business that needs to process 20 million tonnes to sustain operations will be at risk of going out of business if it processes four or five tonnes. Some countries and provinces ensure businesses have minimum guaranteed supply, and the rest is up to a free market.
That provides a bit of clarification to what I was saying. We believe we need more owner-operators to keep jobs in communities and because this has many benefits, but we have to remember that businesses make a significant contribution to the regions. Some fishers fish in their community, and then land their catch eight hours away, where they top up their gas, service their boat, and go to shore, and then they go back home and don’t spend money in their village. A plant that employs 250 people in the village, rents houses and buys food is a big economic pillar. I think that is what it means to work together.
We need to move away from the old adversarial narrative. We need to have shared responsibility in 2026.
Senator Surette: Thank you.
[English]
Senator C. Deacon: I would like to start, if I could, Mr. Fortin. As quickly as possible, can we have a conversation about cooperative processing facilities? There is a good one on Cape Breton, which is Victoria Co-operative Fisheries Ltd. in Neil’s Harbour. It supports seven harbours of fishers, owned by those fishers.
Do you have any examples of cooperative ownership of processing plants among your membership? I am building off what my colleague Senator Surette was talking about with fisheries going in that direction. Do you have any examples about which you could speak briefly with regard to how well that is working or not?
[Translation]
Mr. Fortin: Yes, indeed, I do have a very specific example. Currently, there are three plants in Îles-de-la-Madeleine that belong to fisheries co-operatives, including one owned by more than 80 fishers. One plant started operations last year, with 32 fishers who created a partnership to start a business.
MAPAQ and the government of Quebec gave fishers an opportunity to acquire a plant and undertake processing and sales. The principle does exist.
Is the principle viable in the long term and what do we think about it? Well, we think so, but it has to be a collaborative process.
As I said, the fact that someone is a physician doesn’t mean they’ll make a good manager, but the business model can succeed. The team has to work with various fisheries associations and collaborate on many projects to ensure sustainability.
[English]
Senator C. Deacon: Thank you very much.
Mr. Bernatchez, could you speak to the challenge that has often been cited among witnesses, including those of today, about the high prices being paid for fishing licences that don’t seem to be sustainable? There have been a lot of investment bubbles in this world. This seems to be another one right now.
You also made the point that DFO controls these licences. If this committee were to make recommendations that would negatively impact the prices of licences, to what extent should we be concerned about that?
The reality is that people are making decisions right now to invest amounts of money. I have now seen it in some harbours that young fishers who have just acquired a license are also buying a boat for $1.5 million. They are leaning into a challenge, but are not really taking all the facts into consideration. When I look back to when I first bought a house at interest rates that were in the double digits, it’s hard to imagine that they can take on this sort of debt and not worry about it.
To what extent should we be concerned about making recommendations that could negatively impact some fishers and the prices they’ve paid but still be in the long-term best interests of the industry overall?
Mr. Bernatchez: That is a tough one because you don’t want to impact those who have paid high prices for their licences if they have a chance to sell them back for at least the same price or to make a profit. That’s what they want to do. I understand. It is just like any other investor in any other area of expertise.
I don’t know. I just know that, right now, today, there are talks between DFO and the Canadian Independent Fish Harvesters Federation. Part of this subject is being discussed. Everybody is looking for solutions. We don’t have clear solutions, but I’m hopeful that, when we’re done with those discussions, we might have something to recommend.
Senator C. Deacon: The reality is that DFO has allowed activities to occur that go against the spirit of the act and that go against the spirit of the owner-operator policy decisions and fleet separation. Those decisions have been strongly embraced on the Atlantic coast, at least. If that’s happening, DFO plays a role in that, for sure, but, in reality — and you spoke about it earlier — people are making financial decisions that really are not sustainable.
I wonder about the extent to which that should be a public problem versus a private problem. The public problem is making sure that the industry is sustainable over the long haul. I’m just speaking for myself. I hate what that might cause in some lives, but I also know that Toronto real estate prices fell by more than 50% in 1989 and in the early 1990s. It took until 1999 before they recovered. Many people lost a lot of money in that market.
Bubbles happen, and this may be one of them. Help us a bit if you could.
[Translation]
Mr. Bernatchez: As I said earlier, the problem will probably resolve organically, in that when licences get to a certain price point, people will stop buying. Those who acquired licences at a steep price will probably face challenges in the coming years. Interest rates will probably go up, markets will drop and resources will be depleted. The problems we witnessed in Toronto real estate in 1989 can happen at any time in the fishing industry. Again, investment is a business decision. People who decide to invest take huge financial risks. That’s the way I see things for now.
[English]
Senator C. Deacon: Thank you both very much.
[Translation]
Senator Boudreau: I’d like to start with Mr. Fortin.
I share my colleague Senator Surette’s concerns. The reality in the maritime provinces is probably a bit different from Quebec’s. Allow me to explain why. We’re quite concerned about controlling agreements because they contradict the spirit of the owner-operator policy. You’ve spoken at length about partnerships and allowing plants to be partners, to buy licences, traps and so forth. You’ve also said that processing plants in Quebec are still family businesses and are owned by local folks.
The reality in the maritime provinces is quite the opposite because our plants have been sold to outside interests, many of which are based in Quebec. That’s a different dynamic. Our plants were family owned at some point, but now, I’d say that half the businesses or more are owned by interests from outside the region. The profits are not plowed back into the region. Operating costs are still invested locally, but ultimately, profit from these plants goes outside our regions. People say that this is contrary to the owner-operator policy, which requires the fisher to be dockside and to personally engage in fishing, but the owner of a plant can sell to outside interests, and the profits don’t stay in the region.
I strongly believe — you also said this — that with a customized fisheries program, Farm Credit Canada would be the best solution. Fishers would not be forced to turn to plants for funding. As you noted, these are high-risk loans for banks, and they are therefore harder to secure. I believe that Farm Credit Canada is a significant part of the solution to this problem. Would you agree with that?
Mr. Fortin: I agree with you.
I do wonder at what point people sell out to the devil. That’s when one is stretched to the limit financially. When you find yourself in that situation, as you can imagine, banks will not come to your rescue, but instead, other businesses are going to give you funding at a usurious rate, or with the intention of taking control of your vessel or resource. Bringing in a federal entity to provide funding for fishers — this is consistent with what you said — would considerably reduce the risk of these types of businesses taking control.
Essentially, this is the result of some harvesters facing financial hardship. The issue goes deeper. If you buy a licence at a high price and you receive funding from the credit union, and then you run out of money to launch the fishing season and contact a company that will lend you $10,000 to buy bait, you end up becoming dependent. You get caught in a vicious cycle and virtually sell your soul to the devil just to get by.
That’s why we’re saying that the financing structure around funding owner-operators needs to be overhauled. Indeed, for us, a model modelled on Farm Credit Canada would be one of the major points that should be put forward, while allowing for certain partnerships to be established in a visible, supervised and monitored way, because these partnerships are here to stay. Some owners may not make the best managers and they might make poor decisions and they will be backed into a corner. They will be forced to look for secret ways to avoid asking for funding and then to keep control of their business. Making all financial transactions or advances subject to legislation would protect some people from their own missteps. Our team fully agrees with what you’ve said.
Senator Boudreau: Thank you.
We’ve spoken about the prices of licences and the challenge to intergenerational transfers. If a lobster fishing licence goes for $9 million and a crab fishing licence goes for $15 million, as you said earlier, obviously, someone somewhere is making some money. Have our fishers been victims of their own success? Fishing and the market are in a good place and prices are skyrocketing, which means that businesses are now better placed or equipped to pay these high prices, compared to a young fisher trying to break into the market. It’s easier for a business to fund a $9 million loan than for a young fisher coming into this occupation.
Mr. Bernatchez: Definitely.
Earlier, I pointed out ironically that no one is making money. Someone is making money somewhere. That much is certain. However, the speculation that put us in this spiral is probably behind all of this. People are taking risks. I don’t know what will become of them. For now, we just have to find ways to stop the spiral, or at least slow it down. The more we talk about it, the harder it is to come up with solutions.
I’d like to say one thing. The idea about transparency and reviewing the business model must be taken seriously. Many people have heard me say that I had no interest in contributing to another chapter of the history of fisheries written the same way as the ones that came before. We need to seriously take the time to determine how this review could take place for the benefit of the coastal communities that rely on fisheries primarily.
The industry can have significant benefits for dozens of coastal communities in Quebec and Atlantic Canada. We can debate this issue as much as we want and we can try to identify solutions, and that’s well and good. However, the discussion must focus on the substance of the debate, it must be transparent and there must be confidence and trust among participants to truly work in the best interests of communities.
[English]
Senator Busson: I’ll be very brief in my comments. It is more of a comment than a question, but I will look for your confirmation. We started out with the premise that the owner-operator system supported by DFO is a system that we would like to support. We’re hearing — I’m looking for your confirmation on this — that that policy needs to be reworked. Someone said that we can’t allow this to be swept under the carpet, and Mr. Fortin said that we can’t be stuck in the past.
Am I right in assuming that DFO needs to address this head on and start creating policies that actually face the reality of what’s happening in the real world? Mr. Fortin?
[Translation]
Mr. Fortin: Yes, I completely agree with what you’ve just said that we still think that the owner-operator system should stay in place for the good of all coastal communities. We think that the department should review the legislation, adapt it to the new reality and allow boat owners — the captains — to operate within a financial framework that ensures they don’t become dependent on any business and that they don’t turn into a business with covert control.
However, this requires a comprehensive review of the current legislation to identify new approaches that might not be included in the current legislation, such as partnerships with corporate players or funding over longer periods. I’ve been told that since these are risky loans, some businesses agree to fund loans, but only for seven years. Seven years . . . . If I have a bad month and I’m forced to look for funding elsewhere, a bank will not lend me money.
We need to get out of this small spiral where fishers are under so much financial pressure that some of them have no choice but to sell their soul to the devil and enter into agreements with businesses that have only one goal, namely, to take control of their resource and maximize revenues.
[English]
Senator Busson: Mr. Bernatchez, do you want to add to that?
[Translation]
Mr. Bernatchez: I think we’ve covered the main points. The concept of the owner-operator must be protected because based on my understanding of the fisheries industry, it will deliver the most benefits for coastal communities. I’ll go one step further. We’re talking about land use. Many fishing villages have disappeared over the past few centuries, but if we can prevent this and keep communities strong, I think the whole country would benefit. Like it or not, fishing is still the leading industry in Atlantic Canada and maritime Quebec. We need to find ways to protect the industry, and I strongly believe that this goes through the concept of owner-operator.
We must also take the time to review the business model, enhance collaboration with all industry stakeholders, including processors and ensure that people in these communities benefit as a whole.
[English]
Senator Busson: Thank you.
[Translation]
Senator Gerba: Mr. Bernatchez, I’d like to hear your thoughts about Mr. Fortin’s statement that controlling agreements are in the minority. Would you agree with that assessment? More broadly, what do you think about the proposals for partnership Mr. Fortin has recommended?
Mr. Bernatchez: Thank you for the question. You know, even though our organization represents fishers from various parts of Quebec, we’re not familiar with the financial deals that are struck. We’ve heard about them and I know they exist because every now and then, we ask processing plants about certain fishers’ financial health or ability to pay, but I can’t tell you how common the practice is. I can’t tell you how many of our members have signed controlling agreements or informal agreements with processing plants. I don’t know how many there are, unfortunately.
Was your second question about collaborating with plants?
Senator Gerba: Yes, that’s right. Mr. Fortin has recommended partnerships.
Mr. Bernatchez: Yes. Right now, I’d say that we should maintain the concept of owner-operator and find ways to develop broader business models that would include owner-operators with their processing plants to deliver more benefits for communities. That means we need to guarantee supply at prices that are acceptable to both sides and ensure that each industry can grow from this.
Senator Gerba: Thank you very much.
[English]
The Chair: Thank you to our witnesses this morning for the very detailed discussion. It always makes me look good when we finish within our time limit. Thank you.
(The committee adjourned.)