1 EVIDENCE Standing Committee on Fisheries and Oceans NUMBER 023 1st SESSION 42nd PARLIAMENT Monday, September 26, 2016 Le lundi 26 septembre 2016 Standing Committee on Fisheries and Oceans CANADA [Recorded by Electronic Apparatus] EVIDENCE September 26, 2016 Committee Edited Evidence * Table of Contents * Number 023 (Official Version) Official Report * Table of Contents * Number 023 (Official Version) Témoignages * Table des matières * Numéro 023 (Version officielle) 23 26 09 2016 2016/09/26 09:05:00 House of Commons Comité permanent des pêches et des océans Standing Committee on Fisheries and Oceans FOPO Chair Mr.

Scott Simms 42 1 (0905) [ English ] The Chair (Mr. Scott Simms (Coast of Bays—Central—Notre Dame, Lib.)) : Good morning, everybody. Welcome to St. John's, Newfoundland and Labrador. This is our first field trip for the committee. We have a couple of things to clear up, committee, before we move on to our witnesses. We made an agreement before we left that we had a witness list, but it wasn't an exhaustive witness list. We decided that if somebody wanted to be a witness, we would invite them to speak to us, but we'd do it with unanimous consent, so I'll be seeking that in just a few moments.

What we're going to do is add another hour, given that we now have three people who want to appear in front of us who we didn't have before. On the original schedule, we were scheduled to finish at 4:15. We're now going to finish at five o'clock, and we will have three witnesses. On the three witnesses in question, the three of them are appearing as individuals. I'm going to seek unanimous consent on each of them. The first one we have is former member of Parliament and former member of this committee, Mr. Ryan Cleary. Can I receive unanimous consent? Some hon. members: Agreed.

The Chair: Jason Sullivan will be the next witness. The original one, Mr. Gillett, was unable to make it, but Mr. Sullivan has also asked to appear. It's a last-minute addition. Is that agreed? Some hon. members: Agreed. The Chair: Finally, we have a man who is no stranger to this committee: Mr. Gus Etchegary. Do I have unanimous consent? Some hon. members: Agreed. The Chair: Those three witnesses will appear from 4:15 to five o'clock. Mr. Doherty. Mr. Todd Doherty (Cariboo—Prince George, CPC) : Mr.

Chair, for the information of the committee, I would ask if it's possible to get the bios for the three new witnesses, please, prior to their testimony. The Chair : I know Ryan is here, and I think Mr. Etchegary is here as well. If you want to supply us with a short bio of yourselves, that would be great, and we'll say before four o'clock or as soon as you can. That's a good point, Mr. Doherty. Thank you, folks. Let's get started. We're running a bit late, but as you can see, we have four esteemed witnesses in front of us to start this off.

I want to start by saying that the study in and of itself in the motion put forward by Mr. McDonald is this: That the Committee commence a study of the Northern Cod Stock and its relevance to associated species. This study would evaluate the replenishment of the stock and what other species are affected by it in the region. The study would also look at sustainable harvesting technologies for the future of the cod fishery; and that the Committee report its conclusions to the House. This is why we are here today. We have our first group of witnesses.

First of all, we have the Honourable David Wells, Senator David Wells from Newfoundland and Labrador. It's good to see you again, Senator Wells. We also have with us the former provincial fisheries minister and federal natural resources minister, the Honourable John Efford, and the current fisheries and aquaculture minister, Steve Crocker, from the Department of Fisheries, Forestry and Agrifoods. It seems you're pretty busy these days, Mr. Crocker. Also from the Department of Fisheries, Forestry and Agrifoods, we have the deputy minister, David Lewis. We're going to supply you with 10 minutes each.

You don't have to use the whole 10 minutes, of course. We're going to start with you, Senator Wells. You have the floor.

(0910) Hon. David Mark Wells (Senator, Newfoundland and Labrador, C) : Thank you, Chair, and thank you, members of the House of Commons, for inviting me and welcoming me here today. I don't know what background you were given for me, but I'll give a short bio of my background in the fisheries. I started in 1979 in the fishery in Newfoundland and Labrador. My first job was driving a forklift on a wharf. In the 36 years after that, I've done a number of things. I've managed fish plants. I've written over 100 reports, including policy and technical reports for clients.

I was a member of Canada's NAFO team at the Northwest Atlantic Fisheries Organization; I was a delegate on that team for a number of years. I was a senior policy adviser to the federal fisheries minister and chief of staff to another federal fisheries minister, and I also sat for a couple of years on the Senate fisheries committee. My background is varied and quite extensive in the Newfoundland and Labrador fishery and, indeed, in the Canadian and international fishery.

I could spend all day talking about the fishery, but there are a couple of specific things that I think are important and that the committee should consider in their deliberations. The first one is the markets for groundfish. If there is indeed a return of groundfish as a primary species for Newfoundland and Labrador, I think it's important that the committee members recognize that this is not the cod fishery of old, where cod was king. Cod now competes strongly—and in fact is losing in that competition—with other whitefish species like tilapia, pollock, and haddock.

For the most part, cod as the primary centre of the plaice species has lost that place. I think that's important to recognize. There's a new paradigm in the marketplace. Second, there's the different business model that's presented. In the past, you had many hundreds of groundfish plants and many hundreds of landing stations. You no longer have that since the moratorium in the early 1990s. That whole system has collapsed and was removed and replaced by a different paradigm, that of the primary species and shellfish, primarily shrimp and crab.

I think that has to be considered as well when the question arises of what happens to the emerging fishery of groundfish, of cod specifically, but other groundfish as well. The third thing that I think you should give some consideration to is the recreation of the Newfoundland and Labrador cod fishery. As I said in my initial point, it's a different place. We have fewer harvesters. We have an older workforce in the processing sector. The number that was used a couple of years ago for the average age of a fish-processing worker was 56 years.

That was a couple of years ago, and you don't have the young people coming into the processing sector like you once had. This will naturally lead to more mechanization, and that changes the paradigm of the processing sector. There are also restrictions on entry into the fishery with fishing licences, and for those who have licences, restrictions on access to other stocks. That's something I think should be considered. I've mentioned, of course, the number and locations of landing sites and processing sites. The quality degrades significantly the more you truck fish from a landing site to a processing site.

I think the most important thing to do is to get the raw material into processing, wherever that is, as quickly as possible. The last thing I want to mention is the management of the industry. Right now, we have a situation whereby the harvesting sector is managed by the federal government, under federal jurisdiction, while the processing sector—or as soon as the product lands at the wharf—is under the management of the provincial jurisdiction. I think there's a huge wall between those two.

It's hard, and in fact almost impossible, to have an integrated industry when you have two jurisdictions managing two critical aspects of the fishery. I might have some comments on that afterwards if people are interested in that. Thank you very much.

(0915) The Chair : Thank you, Senator Wells. We're now going to Mr. John Efford, please, for 10 minutes. Hon. John Efford (As an Individual) : I'll try to keep it to 10 minutes. First of all, welcome to the beautiful Province of Newfoundland and Labrador. I'll begin in this way: you're going to hear me speak in a different language—and I mean that sincerely—with passion. I was born in Port de Grave, one of the largest fishing communities on the island of Newfoundland and in Labrador. I grew up into fishing with my own father. Actually, my son is in fishing today, so I've been very close to it.

What I'm amazed at.... I didn't plan any written words this morning. I wanted see what the feeling was around the table and talk to some different people. Ken gave me an opening with his recommendation, his proposal, to do a study in the fishery to see what the cod stocks are like and what the harvesting should be for the future or whatever. Can you imagine? We closed the fishery. We were part of the closure of the fishery by the federal and provincial governments in 1992.

Norway had a closure at the same time for three years, and their stocks were back and they were back fishing commercially, but in 1992 we closed the fishery, and now we're going to recommend to do some studying. I'm not condemning this, Ken, because it's a good idea, if it wasn't done, but just to think that it's not done, in this day and age, gives me one question that I want to ask you people, as the representatives from Ottawa. What is the role of DFO in the harvesting sector if 25 years later we still don't have any solid scientific information on the cod stocks?

That in itself leaves a major question unanswered. I've said many times that we were blessed with the oil industry, but the oil industry bears no comparison to the fishing industry if it's managed right. It's a renewable resource; it will be there forever and ever if—again, the word “if”—we manage it right. I look at what's happening, and I have meetings with ministers and meetings with individuals, and I walk away shaking my head. My God, where are we headed down the road?

If any other country in the world or any other province in Canada had the resources that Newfoundland and Labrador has in its ocean, we would be floating on air all the time, and here we are today, arguing with each other over what to do next. We're making recommendations and we don't know what the outcome is. The question has to be answered: what is the role of DFO? If you go down to the DFO building right now, you're lucky if you get to see somebody for eons. The staff is not down there anymore in any numbers.

From what I understand, most of the work being asked for or being done, which is nothing compared with what needs to be done, is done through the union. The union's job is not research. The union's job is to protect the fishermen, but that's not happening. We have two frustrations going on in the one area: we don't know the science, and we don't know what the role of DFO is. Here's the other thing that really concerns me. I always thought that people living on an island out in the north Atlantic, as we are, who have the resources around....

How could we would be left in this position of asking this question today? First of all, who is responsible for the fishery, but then who gets the right to catch it? Keep in mind that we know very well that in 1992 prior to the moratorium the small boats did not destroy the cod fishery. They did not cause the closure of the cod fishery, because they can only fish a certain number of months each year, and the type of boats and the type of gear they have restricts them from doing any major damage to such a large resource, when there's 800 million tonnes of cod or whatever the numbers are.

So there goes that question. Now we're back wanting to get into the fishery and the people on those small boats can't get the right to go fishing. They are restricted from catching cod because they don't know whether if the cod is out there to catch or not. We're restricted from fishing in our own area because we didn't have a history in any particular fishery, but I thought that everybody understood that the principle of adjacency should be working. If the principle of adjacency is working, then the first people to get the chance to go back into the fishing industry are those people who operate the small boats.

(0920) For example, I know of a fleet. In fact, as you go to Port de Grave tomorrow, which I understand you going to be, you're going to see boats that have been tied up to the wharf since the middle of July, with no fishing rights whatsoever. They have all the gear. They have all the trawls. They are not looking for or asking for money. They just want a quota of fish.

Yet the factory freezer trawlers are steaming into the community of Bay Roberts with a million and a half pounds of turbot aboard, or a million and a half pounds of some other species of fish, and the small boats in Port de Grave—the 65-foot boats and so on—are tied up to the wharf and not moving whatsoever. I wonder why, and I wonder what's going to happen. How do we get a start on the future? After 25 years, how do we possibly start over and begin now to do a complete scientific study to just tell us what happened?

If we don't already know, then I wouldn't want to be the person who goes out onto the street and tells the people that we have to start over again. With the new gear, all we have to do is to go Iceland or Norway. We know what type of gear should be used: hook-and-line gear. We opened up the fishery this year, after all these years, and the first thing we put into the water was gillnets. That's the worst darn thing you could possibly do. We have to get markets, and the only way we're going to get markets for our products is to have quality. You will never get quality in gillnets.

With hook-and-line, auto trawls, and other ways of catching fish, why would you want to put gillnets back into the water after all these years? Every week when you turn on the radio or the TV they're talking about a marketplace. There's no market for our cod and no market for our groundfish. No wonder, if we're going to handle fish like that and expect people to pay top dollar. They say there's no price for cod. I go down to Florida in the winter months. The cheapest cod I can buy in Florida is $11 per pound. The most a fisherman can get for a pound of cod here in Newfoundland is 50¢ or 60¢.

It's absolutely ludicrous to have that happen. There's a reason I told you about the passion. This morning, I didn't expect to hear this. I expected to hear some good news that we had some signs—probably not enough—that would give us a level of comfort to start fishing. No way. I expected that we would have a quality assurance program put in place federally and provincially. Not done. If it was done, we wouldn't allow the gillnets to go into the water. If you catch fish with open line, you're catching a top-quality product. We were out yesterday with my son. He took a cod pot.

In the cod pot, the fish were swimming around. That's quality. That's the type of thing that needs to be done, and we don't need to go all over the world and study it again. It's no good asking for half a dozen things this morning. I'd rather ask for one or two things and get something done. When you people go back to Ottawa, you need to get the message through to the Minister of Fisheries that he needs to take charge of the ship. He needs to be captain of that ship. He needs to listen to people, and he needs to make decisions on exactly what needs to be done, and it's not complicated.

You don't have to be a rocket scientist to find out how to get a quality product or to find out how much fish is out in the ocean. As we used to say, you can't put a rubber bag over your head and get down and count it. You have to base it on science, and if we don't have the science now, we should be ashamed of ourselves. Mr. Chairman, we need to get attention paid to those couple of things. Also, we don't need to have the boats tied up. We need the boats out there doing the actual harvesting in a small way to give us an idea of how much is out there. We know.

We know the quantity of stock—the quantity, but not the quality—that's out there in groundfish. We're not talking just about cod. Please take the message back to Ottawa. We should be ashamed of ourselves if we don't have enough science done. We should be ashamed of ourselves if now, today, after all this time, we still have to use gillnets for the fishery of the future. The Chair : Thank you, Mr. Efford. Minister Crocker, please. You have 10 minutes. Mr. Steve Crocker (Minister, Department of Fisheries, Forestry and Agrifoods, Government of Newfoundland and Labrador) : Thank you, Mr.

Chair, to you and to the committee for the opportunity to be here this morning. Thank you to MP McDonald for suggesting this as a topic for your committee. It's a very important topic for our province as we move forward. I'll do my best not to go over the points that Senator Wells and Mr. Efford raised earlier so that we have more time for questions. As we're all aware, the northern cod stock stretches across the northern coast of Newfoundland and Labrador from the Grand Banks to the south of Labrador. The collapse of northern cod was the biggest layoff in Canadian history.

It is generally acknowledged that there were several reasons for that collapse. Overfishing, environmental changes, and poor management all played a role. While it is important to learn this in history, we're not here to dwell on the past this morning. Today, as stocks are built, we have an opportunity for a renewed groundfish fishery with northern cod once again in the forefront. It is extremely important that we rebuild this fishery in a sustainable manner for our fish harvesters, processors, workers, and coastal communities.

As we work to achieve economic and environmental sustainability, we must also seek to achieve social sustainability. As the lucrative snow crab and shrimp stocks decline, we must ensure that our cod fishery emerges as an economic and viable fishery, and we must optimize the value of the resource to all stakeholders. As we move forward, we must do so with a northern cod rebuilding plan that allows for continued growth of the stock and the rebuilding of the cod industry.

Today, management plans require these elements in order for fisheries to achieve market certification, including marine stewardship certification, and I'll speak to that more a little later. I believe it's also important that we take an enhanced ecosystem approach to the management of northern cod. While management of the entire marine ecosystem is virtually impossible, we can better integrate the management of improved forage species such as capelin with our management objective for cod. We can also consider the impact of competitors and predators such as seals in the management of cod as we go forward.

In order to do this, we must have guidance from the science community. With the federal government's renewed commitment to and investment in science, it is important that this new investment find its way to Newfoundland and Labrador through DFO. To go back to Mr. Efford's point, science is an integral part of where we have to go with the fishery in the future. Our government is committed to working with the industry and developing markets for a revitalized cod fishery in Newfoundland and Labrador.

One key approach is to promote and support opportunities to enhance market access and to continue to focus on maintaining top quality, from initial harvest through to final market preparation. Cod is still one of the most important species in the global seafood market. However, market dynamics have changed considerably since Newfoundland and Labrador was a major player in the cod industry in the 1970s and 1980s. Today, the largest players in Atlantic cod fishery are Norway, Russia, and Iceland, which account for more than 80%—more than one million tonnes—of global supply.

There are also millions of tonnes of other substituted whitefish species, both wild and farmed. It is important to recognize that Newfoundland and Labrador has an extremely small share of today's global market. In 2015 our province exported just over 1,100 tonnes of cod fillets, or .0036% of the world total. The large volumes of H and G cod on the world market in recent years has resulted in huge growth in twice-frozen fillets and blocks, primarily processed in China, which are dominating global cod markets.

The largest markets for cod are fresh and frozen fillets in the United States, frozen fillets in the United Kingdom, and salted cod in Portugal. Currently, the Newfoundland and Labrador cod fishery primarily produces single frozen fillets that are portions in the form of tails and loins. If our industry does not produce and sell high-value cod product, it will be difficult for us to compete with high-quality producing countries such as Iceland and Norway. More importantly, we have to avoid the volume-driven commodity market dominated by China and other countries that are able to produce low-cost product.

(0925) The marketing challenges our industry faces with respect to transitioning back to cod include logistics of transportation of fish off island, i.e., fresh cod fillets. Today in Newfoundland and Labrador, we have a problem getting product, whether it's fresh salmon, milk, or livestock, on and off our island, due to simple logistical issues with Marine Atlantic. If we're going to have a successful cod fishery in the future, one of the things that has to be considered when we talk about accessing fresh markets in the U.S. with cod is Marine Atlantic. That is a problem that we will need to address.

Our challenges also are to position ourselves to compete globally, to market and produce a consistent supply, and to produce and maintain a consistent quality throughout the supply chain. Sustainability is key when it comes to market access. Today, all major cod, pollock, haddock, and most flatfish fisheries are MSC-certified, and that again will be a very important factor as we move forward in the cod fishery in Newfoundland and Labrador. We must also recognize that our industry needs time to transition from shellfish back to groundfish.

This will not happen overnight, and it will require governments on both levels—federal and provincial—to work with harvesters, processors, and all industry stakeholders to ensure that the necessary attention and financing are there so that harvesters have an opportunity to transition back into the fishery that Mr. Efford spoke about a few moments ago when you look at technologies. For example, for a harvester today to move into a hook-and-line system for a 65-foot vessel requires an investment of about $150,000.

This investment is not easy to come by as you transition into a fishery, so it's important that all levels of government look at ways in which we may be able to help harvesters in the future when it comes to that transition and the significant financial value that it will bring. This fall, our government will establish a fisheries advisory council that will be immediately tasked with developing an action plan on cod revitalization. We are pleased that the federal government will participate in the fisheries advisory council once it is established.

The importance of coordination between the federal and provincial policies to support the cod sector, particularly during the industry transition, can't be overstated. It is imperative that we work together to optimize the value from the limited resources that are harvested and processed. We believe strongly that fisheries management decisions, such as the setting of TACs, should be based on scientific evidence in order to protect against the over-exploitation of resources and allow long-term sustainability in the fishery.

In closing, I believe the only way to truly achieve our collective objective regarding the northern cod fishery is by all parties working together. Again, both levels of government have an important role to play in management and regulation to ensure that we have a well-managed fishery providing a high-quality product to the world. Governments can only be successful in implementing these necessary measures through discussion and dialogue with the industry. Also, going back to what was said by Senator Wells and Mr. Efford this morning, I think another thing is to dialogue. We need to continue the dialogue.

It's really good to see that this is a part of that process today, but it needs to continue, and not just in meetings like this. When meetings like this or meetings with ministers and other officials end, we need to carry the message forward and continue to work on it. Our department of fisheries in this province is certainly prepared to engage in that discussion with all parties. We're quite ready to do so. Quite honestly, in this province, we cannot afford to have a fishery of the future that's not well planned and well managed.

I feel that this is really our last chance at a good northern cod fishery in this province, and we have to make sure we do it right. Thank you.

(0930) The Chair : Thank you, Minister Crocker. Mr. Lewis, would you like to weigh in at this point or during questions? Okay. One of the things Minister Crocker mentioned was MSC certification. Just to clarify, “MSC” is the Marine Stewardship Council, and you can find out about them at msc.org. Thank you very much, folks. Now we get into the question rounds. We're going to go to the government side first and have seven minutes of questions. I'm going to be strict on the questions. I will be flexible on the answers. If you exceed seven minutes, there is flexibility built in. We're not here to be that strict.

Now we'll have seven minutes from the Conservative side. Mr. Doherty, do you have a comment? Mr. Todd Doherty : Mr. Chair, prior to getting into the questions, I wonder if it's possible to have a copy of Mr. Crocker's speaking points? He had some great information but was speaking a little too fast for me to actually write down some of the things. I understand that we have an English copy. I wonder if we can get a copy of it so we can ask questions pertaining to his testimony.

(0935) The Chair : Yes, as per the Standing Orders of the committee and the rules, of course, if we distribute any publication whatsoever—anything—we need to have it in both languages. We don't have a third translation service and— Voices: Oh, oh! The Chair: —I apologize. We'll see how this goes along. In order to distribute his comments—they're only in English—we need to have unanimous consent, so I will seek it. I actually have two items, so I'm glad you brought it up. We have Mr.

Crocker's comments, plus we have a potential witness who has just requested to speak, and I'd like to distribute a short bio on her before we vote on allowing her to speak as a witness today. That being said, do I have unanimous consent? All in favour of this distribution? Some hon. members: Agreed. The Chair: We're good to go. We'll distribute that, plus the bio I mentioned. We'll take that after the questions. Mr. McDonald, I understand you're going to start. You have seven minutes. Mr. Ken McDonald (Avalon, Lib.) : Thank you, Mr. Chair. It's good to be here this morning.

Before I start with the first question, I will provide a bit of information. Mr. Efford asked a couple of questions with regard to the science and where the biomass is right now, and why we don't know. Actually, Mr. Efford, for your information, DFO officials and scientists appeared before the committee last week in Ottawa, and the biomass right now is estimated at approximately 300,000, which is still well below where they would like to see it.

It's still rated as being in the critical zone, and I think it's probably in the next year that they will do a full stock assessment again, which will give new numbers for that. I think they were probably providing us with 2015 numbers at that time. I'll start off with a question for you, Minister Crocker. Basically, how does the province see the northern cod fishery of the future? Mr. Steve Crocker : Thank you, Mr. McDonald. First of all, I apologize for speaking fast, but John tells me he understood it. Voices: Oh, oh! Mr. Steve Crocker: It's hard when you have 10 minutes and you really have a lot to say.

You cram it all in there. Mr. Todd Doherty : There's a lot of good information. Mr. Steve Crocker : The fishery that we see in our future looks nothing like the fishery we left in 1992. We left a fishery in 1992 where we were doing primarily cod blocks and second-fiddle products, and we need to become a leader in quality. Quality starts at the side of the vessel. To go back to Mr. Efford's comments earlier, quality starts with the method of harvest, and gillnets certainly do not meet the method of harvest that we're going to need to compete with the Icelands of the world.

If you look at Iceland, primarily right now, you will see that their fishery is a hook-and-line fishery. There are other methods, but it's primarily hook and line. It's interesting, when you look at the Icelandic model, to see that as the use of gillnets goes down, the price of cod goes up. It's very clear to see when you look at Iceland as a country and what they've done with their fishery. Harvesting technology is extremely important. Then, we need to equip our vessels so they have the proper equipment to bleed and store fish to get it to market and to get it to landing.

That's where the province and our role, I guess, really come in. We're responsible for the processing sector. We need to work very closely with DFO in the future when it comes to harvesting, until we get the fish to processing. We will also have to ensure our processors are doing their part to ensure that product quality is maintained.

On the overall question, we see a great promise in our province with regard to northern cod and the opportunities it will provide, but the next years are going to be quite challenging as we transition from primarily a shellfish industry to a cod industry. it's really going to take co-operation in the coming years to get us to where we need to be in the northern cod harvest. Mr. Ken McDonald : Thank you. My next question is for all three of you. Mr. Efford, you raised this as a point: who can catch the fish? You can start, and the other two witnesses can answer as well.

What are your thoughts on the Prime Minister 's commitment to have the first 115,000 tonnes allocated to the inshore fishers once the commercial fishery starts up in a commercially viable way again?

(0940) Hon. John Efford : My first thought is very clear: what is the inshore fishery? After all these years, that's the question that has not yet been answered in Newfoundland and Labrador. If the inshore fishery is the 65-foot boat—right now, there's the 89-foot, and it's down to just small boat fisherman and the bays—I would agree with it. If it's not, then I disagree, because now that all that fish is allocated to the inshore fleet, the 42-foot boat that has been fishing with the gillnets has to change. That has to stop. They're limited to where they can travel because of weather conditions.

When you have a 42-foot boat, you can only go a short distance from home. You're talking about 10 to 12 miles, you know. That's usually what it is. The other boats, the 65-footers and the 79-footers, that fleet of inshore boats, can fish on the Grand Banks, and they can give you a bit of an understanding of how much cod is really out there, because nobody is allowed to put a piece of fishing gear in the water out there now, anywhere on the Grand Banks. That's the key. That's a failure in itself because we have many spots out there, and I'm sure there are people here who know more about it than I do.

They know about the Virgin Rocks, the Hamilton Bank, and the Funk Island Bank, and that's where the offshore Atlantic cod stocks are. There's no reason in the world why we couldn't get this fishery back and going the way it should be going, and we don't need to be making a lot of investment to it. The boats have the gear. The boats have the equipment. They're not looking for money to buy things. They're looking for the right to go fishing. Hon. David Mark Wells : Thank you for the question. It's a good question.

When I learned of that—and I'm not speaking as someone in the political realm now, but as someone who's had over 35 years' experience in the industry—I was quite surprised. It was a social decision, a social policy made by the Prime Minister . As Mr. Efford said, what's going to be forced now is that you're going to have smaller boats going further afield, where smaller boats shouldn't be, to catch fish. A decision to assign a disproportionate or any proportionate amount to one sector in that way, I think is....

We'll revisit this discussion if a vessel that's not built for the high seas happens to go down because they're overloaded with fish, because they had to go further afield, and because they had the quota access to the fish. Yes, it was a popular decision among inshore fishermen, of course, but I think there are other ramifications we may have to revisit in the future. The Chair : Mr. McDonald, thank you very much. Thank you, Senator Wells and others. Mr. Arnold, please, for seven minutes. Mr. Mel Arnold (North Okanagan—Shuswap, CPC) : Thank you, Mr. Chair.

I want to thank the witnesses for being here this morning. We heard earlier that Sweden closed their fishery for only three years. In Canada, it's now 25 years on, and we're still studying it. Can you tell me what the difference was with their stocks? Was it Sweden or Norway that did that? Were their stocks depleted as badly as the stocks off Canada's coast? What did they do differently to restore that fishery so quickly? Hon. John Efford : First of all, I don't think there was much difference in the problems in Newfoundland and the problems in Norway.

The biggest thing that catches my attention is that they had solid signs from day one. They were well equipped to recognize that there was a problem in the fishery, and the scientific information backed it up. What they did was shut it down totally, as we did here, and reopened it after three years. Nobody could ever answer us or tell us whether, if Newfoundland had done the same thing, what if...? We still don't know today how many fish are out there, after 25 years, so that gives me a great deal of disappointment today. If our scientists haven't provided us that information, God help us for the future.

It's all based on solid science or no science at all. Mr. Mel Arnold : I guess there are contradictory—

(0945) Mr. Steve Crocker : Can I just add to that? Mr. Mel Arnold : Okay. Mr. Steve Crocker : This is one thing that I missed in my earlier remarks, but it ties into what Mr. Efford just said. One thing for certain that we need to look for in the transitioning years—and beyond—is a commitment from DFO to a full stock assessment every year. There has been some reinvestment in DFO. Fortunately enough, the federal government has seen fit to hire I think almost 20 new scientists here in this province, which is long overdue and well needed. This province, over the last 10 to 12 years, had to do our own science work.

We actually created CFER, the Centre for Fisheries Ecosystems Research. We were forced to do that because of the lack of science being done by DFO. It's very important that DFO take this science role seriously Hon. John Efford : Could I make a point very quickly? I don't want to take up other people's time. The other big difference in Canada—and if you go back through my time in federal and provincial politics, you'll find that I talked about it every single week—was that 10 years ago we had an estimation of 10.5 million harp seals, plus the grey seals, plus the hooded seals.

People still make fun and say, “Oh, Efford is talking about the seals again”. But if 10 million harp seals each ate only one codfish a year, that's 10 million fish coming out of the ocean. I'm satisfied to put my reputation on that having an impact on the stocks returning, because we were not allowed to take the fish out of the ocean to eat. Why? It was because we wanted the stocks to return, but if you have 12 million to 14 million seals of different species, then you know where there's a major part of the problem. Mr. Mel Arnold : Thank you. I'm glad you brought up that point.

Our earlier testimony has contradictory evidence regarding the impact of seals on the cod stocks. I'd like the committee to somehow find out what can be done to determine the seal diet prior to the collapse and post collapse. Did it change? Did they move to a different species? Have they started to compete for other prey, the same prey the cod prey on? There's so much missing there. We need to find out. Mr. Steve Crocker : I understand the question about what they are eating, but it's really a moot or irrelevant point because, at the end of the day, they are eating seafood.

Whether that's cod or whether that's a forage fish, we all know what they are not eating. I think at one point someone said they don't eat turnips. We do know that if it's not cod, they are consuming food that cod would consume. Mr. Mel Arnold : I can refer to what's happened in British Columbia, my own province, with ungulate species and wolf populations. Wolf populations have been allowed to expand out of control, basically, and because the habitat has changed, the prey species are different.

We now have serious problems with ungulate species—mountain caribou is one example—where wolves have switched over from feeding on white-tailed deer and moose to feeding on caribou, because that's all that's left. Is the same thing happening with seals and cod? You say absolutely? Okay. Thank you. Thank you, Mr. Chair. The Chair : Thank you, Mr. Arnold. After the next question, we'll seek unanimous consent for the extra witness. Mr. Johns, go ahead for seven minutes, please. Mr. Gord Johns (Courtenay—Alberni, NDP) : Thank you.

Thank you for your passion and your commitment to doing this right because, as the minister said, this is probably our last chance. I come from coastal British Columbia, Minister Cocker. You talked about how a lot of the processing is going offshore and going to China. In British Columbia, we've seen canneries closing. We're shipping our fish to China to get it filleted and then it comes back to our supermarket shelves. That's what's happening at home. It's pretty scary to see that. Mr. Efford, you talked about the principle of adjacency. I couldn't agree more. I think we need to go to that.

Would you elaborate and maybe cite some models of adjacency, how we can get there, and what's needed to get there?

(0950) Hon. John Efford : The principle of adjacency was adopted by the federal Liberal Party at the last convention. “Adjacency” means involving those people who are adjacent or closest—if you want to use the word “closest”—to the stocks. They've just made a decision on shrimp. The shrimp stock is in trouble in certain areas, and they had to make some major changes. The changes they made were based on the principle of adjacency. The principle of adjacency gives the Newfoundland and Labrador people the right to have the first opportunity to harvest the fish. The factory freezer trawlers get the last.

Factory freezer trawlers are one of the main reasons we are here today. If you have a small 80-foot boat coming into Port de Grave or anywhere in Newfoundland, it has nothing in the holds of the boat at all, and it is not allowed to catch the fish, but the factory freezer trawlers are steaming in with a million and a half pounds aboard. The principle of adjacency is where the first opportunity goes to the local people, and after that, we'll decide. Mr. Gord Johns : Minister Crocker, you talked about the 20 new scientists that have been hired. What's needed?

Obviously, 20 isn't enough, and I can't imagine it would be to get you to what you need. You talked about an annual review and assessment of the stocks. Can you give us an idea of what kind of staff and resources are needed for us to do this right? Mr. Steve Crocker : I believe the staff and resources are there now; the staffing increase at the local DFO is in the last three to four months. But we need a commitment to science, a commitment to a full stock assessment every year, at least until we get to a point that we know where we're to, because right now there are indications....

I think our growth rate has been somewhere around 30%, but we need to monitor it. We see other science issues. There's an issue around capelin. One of the main foods for cod is capelin. It's very important that we understand that fishery, or that species, as well as we go forward. Among the major challenges we're having in the fishery and this imbalance is one in regard to the cod returning. It's been proven many times by harvesters in this province when cod return. Right now, cod are having a detrimental effect on shrimp and crab.

It's nothing unusual to see a fisherman post a picture in which a cod's belly is full of shrimp and, unfortunately, full of small female snow crabs. We have to make sure there's not an imbalance in the ecosystem. Science has to play a major role in doing that and in listening to harvesters as well: these people are on the front lines. In many cases, we're not opening up a dialogue with harvesters, with the people who are on the front lines. Mr. Gord Johns : Great. Go ahead, Mr. Efford. Hon. John Efford : I have to ask one question, and I think this is the key to the whole meeting this morning.

Three hundred thousand tonnes of fish is what science is saying is in the water. You people just gave us that information. I've read it many times. The one thing I've never seen, which I'll ask you to look for when you go back to Ottawa, is this: have you seen a scientific report that supports the point that there are 300,000 less or more cod? Is there a scientific report available that you've seen? Mr. Gord Johns : Mr. Lewis. Mr. David Lewis (Deputy Minister, Department of Fisheries, Forestry and Agrifoods, Government of Newfoundland and Labrador) : I have one point to add to the minister's comments on science.

The minister, in his opening remarks, mentioned the Centre for Fisheries Ecosystems Research, which was an institute that was set up at the marine institute by the provincial government to undertake science, and particularly science on northern cod, utilizing research scientists and graduate students at the university. It has built a significant capacity at the university. It was using technologies that aren't being used on the coast here in Newfoundland—for example, acoustic surveying. The Norwegians and the Icelanders do multiple surveys in a year and also do acoustic surveys.

That hadn't been done in the province here. The survey that DFO does generally is a groundfish trawl survey done each fall. The science that the Centre for Fisheries Ecosystems Research was able to contribute to the science being done by DFO—and it was in collaboration, to a large extent—certainly increased the knowledge base that the scientists collectively had on the northern cod stock. They did satellite tagging on cod. This was the first time in the world that cod had been tagged by satellite tags. That gave a much better understanding of the migratory patterns of the fish.

It was found that large fish, which the DFO surveys had not been finding, were actually inshore for longer and different periods of the year than had been the case prior to the moratorium. There is a lot of additional science. Concerning the capelin, which the minister and Mr. Efford both mentioned, we do very little science on capelin. Capelin is absolutely critical to the viability of the cod stock. In Norway and Iceland, they do a tremendous amount of research on capelin, including acoustic surveys. The amount of science we do on capelin is very limited.

I believe it's as important to know what the situation is in the capelin stock as to know what the situation is in the cod stock.

(0955) The Chair : Thank you, Mr. Johns. That's your seven minutes. We're now going to go into the round of five minutes. No, my apologies: we go back for seven minutes. We'll do it that way, but we'll talk about the time again later. We have just over 15 minutes left, so we'll see how far we can get with this. Very quickly, we distributed the bio and information about someone who requested us to do so. That's Kimberly Orren, who wants to testify. Do I have unanimous consent to accept as a witness Kimberly Orren? Are there any objections? Some hon. members: Agreed. The Chair: Okay, Ms.

Orren, what we are going to do is this. We have a special panel of our overflow guests; I'm sorry, I didn't mean to describe you as “overflow”. Nevertheless, at one o'clock, we have a panel of only two people, so we can fit Ms. Orren in on that particular panel for three people. Is that okay? All right. Now we go back again to seven minutes. Turning to the government side, we have Mr. Finnigan. Mr. Pat Finnigan (Miramichi—Grand Lake, Lib.) : Thank you, Mr. Chair. Welcome to our panel. It's my second visit to Newfoundland, and so far it's as great as the first one.

I'm looking forward to spending the next couple of days with you. I am from Miramichi, and of course there are no cod in the Miramichi, but there is salmon. At least, we're hoping there will be. We face some of the same issues there that you do with the lower numbers, whether from predation or whatnot, so this is interesting for me. Mr. Wells, I think you stated that harvest has to be close to the processing part of it. Could you elaborate on that as to what this would mean?

Would it mean freezing right on board with those freezer plants that you have on board, or do you mean that the communities should be close to where the ships come in? Could you elaborate on what you meant by that? Hon. David Mark Wells : That's a good question. It's an important question, because in the past, prior to the 1970s, much of the fish that was landed around the coasts of Newfoundland and Labrador was processed at a plant at that landing site. As there became greater competition for that landed resource, the competition would come from processors who weren't necessarily at that community wharf.

They would truck that fish to their fish plants. The more you truck raw material that's already dead, there are two things that happen. One is that there's a greater degradation of the resource before it gets to the processing operation, and the second is that it's necessary to have infrastructure at that wharf that can mitigate some of the damage done as it's trucked. The initial part of the processing of fish is gutting and bleeding, and then icing and having the insulated boxes and that sort of thing at the site. In the old days, you didn't have that. You harvested and landed right at the plant.

With the greater competition for the resource, you might have a product that's landed in St. John's harbour and might be trucked 12 or 13 hours away. That's one of the things that needs to be considered. I'll give full credit to Mr. Efford when he was fisheries minister, because he spearheaded the greater concentration and emphasis on having a quality product. That started with you, John, and well done on that. That must be a consideration, whether the product is cod, crab, or shrimp, whatever's there.

(1000) Mr. Pat Finnigan : Thank you very much. Mr. Efford, I think it was you who mentioned that we would need to retool. In other words, 25 years ago, the methods of harvesting and processing would certainly be different from today. I think the reason is quality. Should the stock rebound, how do you see that process taking place? Would we have as many plants all over the island? How do you see that? Hon. John Efford : First of all, I'm a strong believer in a business sense. I don't like the idea of financial support to an industry from government dollars.

I was a business person myself, and I was also, as you know, a politician. I can assure you of one thing. For all of the fishermen I talk to—and that's many fishermen every year—give them the opportunity to fish, and they will provide the tools they need. We did the crab plants back when I was fisheries minister in 1996, and we based the plants on a regional basis around the province. They weren't all located in one part of the island. That worked out well for the crab industry when it came to the quality of the product.

We had examples of trucking tractor-trailer loads of crab down to my area, down in the community where I live. I saw it myself. I was in government at the time, and it was two and three days before they were unloaded. You can't have a quality product like that. Seriously, for the majority of fishermen in Newfoundland and Labrador, give them the right to go fishing, and they'll find the tools. All you have to do is tell them. The first thing I would do is take every gillnet in Newfoundland and have a bonfire. Mr. Pat Finnigan : Thank you.

We've had DFO as witnesses a couple of times, and they're telling us that they have monitored the stocks ever since the collapse, and probably before, with whatever resources they have. They are the first to admit that there are still many questions. They're not so sure why Norway has rebounded so fast. Part of the theory is predation by seals and other animals or birds, but also, the warmer waters could have changed the ecosystem. I ask this of everyone: how should we manage? We know that capelin is one of the favourite foods, but cod will eat other things. How should we manage?

If we're moving to other species as far as harvesting goes, how do you think that is important to the cod? How do we manage all of that to make sure we have a balance that exists in order for cod supplies to come back? Mr. Steve Crocker : I think it all comes back to science, to knowing what's there and what effect one has on the other. Mr. Efford just showed me a picture of what was dinner for a codfish. It was probably 10 or 12 female snow crab. We need to make sure the ecosystem is balanced. I guess that would mean more surveys and stronger science.

We just came out of a debate here in this province around shrimp in SFA 6, that area, and one of the things in that debate was that we had to convince the federal government to do a yearly commitment to a full stock assessment. We can never have too much science. The investment in science is going to be crucial if we wish to maintain a solid fishery with all components, whether it be crab, shrimp, cod, capelin, turbot, or other species in the water. We need a strong commitment to science. The Chair : Thank you very much. Before we get to five-minute questions, just quickly, Mr.

Efford, you wanted to distribute this picture.

(1005) Hon. John Efford : I want them to understand that's it's a cod and that's snow crab. The Chair : I'm going to move this along quickly with copies. Do I have consent from everybody to accept this? Some hon. members: Agreed. The Chair: We'll make copies and distribute them. For five minutes, we're now going to Mr. Doherty. Mr. Todd Doherty : Gentlemen, I want to say thank you to each of you for your testimony. Mr. Efford, your passion comes through loud and clear. There's no translation needed for that. I appreciate all four of you appearing before us today. My first question is for you, Senator Wells.

You started down the path of telling us about how to best manage the fishery. I'm wondering if you can continue down that path with your thoughts. Hon. David Mark Wells : Thanks for that question. As I said earlier, one of the biggest problems we have and have always had in the industry is that great divide between the harvesting, which is under federal jurisdiction, and the processing, which is under provincial jurisdiction. In order to have an industry that's integrated and moves smoothly, I think there's a better model to have, rather than to have that divide between two critical aspects of the industry.

I'll speak briefly about my couple of years as deputy CEO of the offshore petroleum board here in Newfoundland and Labrador, which is a federal-provincial agency that's at arm's length from both the federal and the provincial governments. It was written into legislation in the 1980s, and its prime directive was to look after four things: resource management of the oil and gas reserves, environmental aspects, health and safety, and industrial benefits.

I think a similar model that looked after resource management and industrial benefits for the Newfoundland and Labrador fishery, where you would have integration between harvesting and processing, would be a good model, and certainly a better model than we have right now. You would have no political influence or interference. You would have no special interest groups that would have influence, be they processors, harvesters, plant workers, or competing unions. Like Mr.

Efford when he was minister, Minister Crocker, I'm sure you've hear every day from special interest groups that are looking for something: some favour, some benefit, or some emphasis on their particular aspect of the sector. I know that when I was a senior policy adviser at the federal level in DFO, and then after that the chief of staff, every day I'd get calls asking if people could do this or that. What I think is necessary is to set the rules, set the structure for the rules, and then stop that influence from the special interests.

By having groups comply with the rules, everyone knows the rules, and there are no special interests that would have extra or undue influence. I think that's a model that should be looked at between the provincial government and the federal government. Mr. Todd Doherty : Thank you. Mr. Crocker, there was a reason why I wanted your notes. You said something that I really wanted to get a bit more information on. Your government has already started work towards a seafood innovation and transition program. I wonder if you could share with us a little more information on that. Mr.

Steve Crocker : That is a program we introduced in this year's budget. It is a small program of $2 million. The focus in that program was to look at funding projects or helping harvesters or processors who are interested in advancing equipment. For example, in that program, we partnered with some harvesters for hook-and-line systems. We also contributed towards some on-board technology, some cod pots. Mr. Todd Doherty : Is it grants? Mr. Steve Crocker : Yes, it is a contribution towards capital cost. One thing I can assure you—and Mr. Efford will appreciate this—is that there is no funding for gillnets. Mr.

Todd Doherty : Is there more information available on your government website on that? Mr. Steve Crocker : We can certainly get you the full.... Mr. Todd Doherty : Okay. This is more of a comment. We have talked a lot about managing the fishery, not necessarily managing the fish stocks. I thought I would ask the panel whether you have thoughts on how we move forward in managing the fish stocks. Mr.

Steve Crocker : I think it comes back to one of Senator Wells's points about a management system where we bring the province, the federal government, and all stakeholders together and make sure that when we set out the parameters of this new fishery—because remember, it is not the fishery of 1992—they are agreed upon and they are stuck to. I think that, alluding to what Senator Wells said, one of the problems we have had in the fishery recently has been a piecemeal approach of “do this, do this, and do this”, but then it causes issues.

(1010) Mr. Todd Doherty : Mr. Chair, do I have time for one more question? Mr. Lewis, when the Department of Fisheries appeared before us, they mentioned capelin. I asked when the last capelin study was, and they didn't really give us a great answer on that. We were presented with information regarding the survey catch. It is an essential change in the past decade of cod stocks. In the 3L district, it is not showing the return to numbers that we are seeing in the more northern side of it. Would you have more information on what the capelin numbers would be in that area? The Chair : Please answer briefly. Mr.

David Lewis : As I mentioned, the information on the capelin is relatively sparse. The survey work that is done is mostly on an inshore basis. In terms of having a good understanding of the status of the offshore capelin stocks, there is very little information known about that, from my understanding. This is where acoustic surveying—utilizing vessels that could survey in the distant waters out to the 200-mile limit—would be a big advantage. The Chair : Thank you, Mr. Lewis. We have five minutes left, with the government side questioning. Mr. McDonald, please, for five minutes. Mr. Ken McDonald : Thank you, Mr.

Chair. I would like to go back for a quick second to Senator Wells and his response to the question about the 115,000 tonnes being more of a social type of thing for the Prime Minister to say and to put into his platform as an election promise or to be very supportive. It doesn't surprise me because of the fact that the same Conservative government that was in power—and even when they were in opposition—still felt that LIFO was the right policy for our shrimp fishery. We know where LIFO is today, and the adjacency part of it.

You talk about the federal government controlling the harvesting and the province controlling the processing, and you mentioned the C-NLOPB. Why do you think it hasn't happened? Even with the previous government—for someone who is so passionate and, even though in the Senate, still connected to that party—why do you think it hasn't happened, that we haven't seen a joint management approach to the fishery when it comes to Newfoundland and Labrador? Hon. David Mark Wells : Again, it's a good question. I'll remove the politics from it; I don't have any comments on LIFO.

I think what happens generally is that groups want to hold and consolidate their authority. That authority, certainly in the fishery, is the jurisdiction. The federal government wants to hold and consolidate what is in their jurisdiction, and equally, I think, the province wants to hold and consolidate what's in their jurisdiction. In the case of the C-NLOPB and the offshore, the courts ruled that this was federal jurisdiction.

There was an agreement made—I think to the great credit to the government of the day—that this would be seen as though it were on land, as in Alberta, or as in the case of other rural resources in Saskatchewan, or wherever it is on land. To its credit, the federal government of the day saw joint management and treatment of the offshore as though it were on land as a correct benefit and the right thing to do. Part of it is just coming together. Why hasn't it been done thus far?

We had some discussions on it around 2006 or 2007 when I was working for then-minister Hearn, but the political environment wasn't there, regardless of the party, between the federal government and the provincial government of the day. Mr. Ken McDonald : Thank you. I have another question. Minister Crocker, you didn't have a chance before to comment on the allocation of the first 115,000 tonnes to the inshore fishers. Mr. Steve Crocker : In June of 2015, the provincial House passed unanimously our support for the first 115,000 tonnes being harvested by the inshore fishers.

We continue to support the first 115,000 tonnes for the inshore. The inshore will provide the most direct benefits to the province. Whether it's the harvesting or the processing on land, it's a very important part for our rural communities in the province, so we maintain our commitment to that commitment. Let me add something about the joint management piece: it would be interesting when looking at northern cod.

In a lot of our fisheries there are many adjacent provinces, and there fishing areas that straddle more than one jurisdiction, but one of the interesting things with northern cod is that there are really only two jurisdictions involved. They are Newfoundland and Labrador and Canada. Northern cod may present a unique opportunity for some type of joint management of that stock in particular.

(1015) The Chair : You have one minute. Mr. Ken McDonald : I'll be quick. Mr. Efford, we've talked about biomass and everything, and you've been involved both provincially and federally as a minister responsible for the fishery. What level do you, as a former minister, believe the biomass has to be at to sustain a commercial fishery? Hon. John Efford : First of all, I don't believe the scientific information telling us that we only have 300,000 tonnes in the ocean. I've been on the Grand Banks. My son is on the Grand Banks.

They're fishing, when they get some fish to catch—we're not talking about cod now—and the waters are full. I was out for a trip just this weekend, and what I saw just down in the end of Conception Bay was absolutely mind-boggling. If they're going to tell us that we only have that amount of cod, what I would like to be assured of and what I would like to see—and this would answer my question—is the scientific written information, how it was arrived at, and who has it, because they can't tell us that we only have that amount of cod. I believe the cod stocks are greater than that. Mr.

Ken McDonald : You think— The Chair : I'm sorry. We're done. Thank you. The five minutes are up. I want to thank all of our guests. First of all, you've received the picture that came from Mr. Efford. I want to thank the Sheraton for providing it in colour, as a matter of fact. It was very nice of them. The other thing, just as a preview, Mr. Efford and the other witnesses, is that we talked about science and this afternoon at 2:30 we have a senior research scientist from DFO who will be testifying. If you'd like to stick around for that, perhaps your questions may be answered during that round.

The other thing, of course, is that we'll have the bios of our guests distributed this afternoon. At this point, before we break for a few minutes before our next panel, I want to thank our current panellists for coming in: Deputy Minister Lewis, and Minister Steve Crocker, who is also the member of the House of Assembly for—help me fill in the blanks here— Mr. Steve Crocker : —Carbonear—Trinity—Bay de Verde. The Chair : Done. As well, former minister Efford, it's nice to see you again, sir. I neglected to mention, Senator Wells, that you are a currently a member of the Senate fisheries committee.

Is that correct? Hon. David Mark Wells : No, I'm not. The Chair : I'm wrong. Hon. David Mark Wells : I was a member of the Senate fisheries committee a couple of years ago when we did the seal study and the aquaculture study. The Chair : Then you're there in spirit, I gather. We'll keep it at that. Thank you very much. We're going to break for a few minutes. At about 10:30 we'll have our second panel. (1015)

(1035) The Chair : We'll ask you to take your seats. We have speeches coming up and once again we have to seek permission because they are in English only. Just for the sake of clarification, and to point it out to our guests, we have to distribute in both languages unless we get unanimous consent to proceed with just one language. Do I have unanimous consent to distribute the comments from our witnesses? Some hon. members: Agreed. The Chair: We're good to go. Let's get started. We're running a bit behind. This is panel number two. With us we have Mr. Derek Butler, from the Association of Seafood Producers. Mr.

Butler, it's good to see you again. We have Alberto Wareham, president and chief executive officer, who is from Icewater Seafoods Incorporated. We have someone else who is no stranger to the committee: Mr. Keith Sullivan, president of the Fish, Food and Allied Workers, the FFAW. You have 10 minutes each. If you're under 10 minutes, that would be appreciated as well, as we like to get to questions and comments. Mr. Butler, I'm going to ask you to start, please. You have 10 minutes.

(1040) Mr. Derek Butler (Executive Director, Association of Seafood Producers) : Thank you very much. I've timed it for just under nine, so hopefully I'll get there. On behalf of the Association of Seafood Producers, I am pleased to appear before this committee, and I thank you for the invitation. I'll give you a quick overview of the ASP, our role and work and who we represent, and then provide some brief remarks on our perspectives on northern cod going forward. ASP is an industry association. It represents the majority of seafood producers in the province by volume and value.

Our members include small, medium-sized, and large companies. Most are family owned and several are harvester owned. They are all invested uniquely in rural Newfoundland and Labrador; there are not too many fish plants here on the waterfront in the city. A few have access to their own quotas for some species, but most buy from the independent inshore fleet represented by my colleague, Mr. Keith Sullivan. ASP's members produce a wide range of species available to the commercial fishery.

Our members produce the majority of snow crab and inshore shrimp, at close to 80% or 90% of both, which represent most of the value in the fishery in the province. They also produce a vast majority of pelagic species available to us, such as capelin, herring, and mackerel. We do a fair bit of the groundfish, including cod. All of what we produce, or most of it, is exported. Our markets are the world over, including North America, Europe, Africa, and, increasingly, Asia, year after year.

As an association, we engage in the usual range of activities appropriate to a trade association, including public policy, government, media relations, and services to members. Those services include serving as the client of the first Marine Stewardship Council eco-certification in Canada, for northern shrimp. It was the largest such certified shrimp district in the world at the time, and the first on the eastern seaboard of North America.

As you will know, the MSC is a third party audited standard for fishery sustainability to assure the world—our markets—that our products come from sustainable fisheries in terms of what we harvest in terms of habitat and ecosystems and the management regime. We're now the client for four different certifications covering shrimp in the Gulf of St. Lawrence, Nova Scotia, and in Newfoundland and Labrador, and for snow crab in the province. Our members hold other certificates as well.

As somewhat of an anomaly in the industry, we also negotiate fish prices for 67 species per year, as our industry is subject to collective bargaining legislation. That takes up a fair bit of our work. I have worked for ASP as executive director since 2004, and I have served as chair of the board since 2006. I've also served on the FRCC, the Fisheries Resource Conservation Council, and on a number of other fisheries or other related advisory bodies. The reason why you're here, and the reason why we're here, is cod. Cod, to state the obvious, is important.

As I often say, it's part of the cultural, social, political, and economic history of this province. We were but an island in the sea and essentially a platform for the seasonal prosecution of the fishery by Europeans. We were later a place of habitation, a colony, and then a country, and now are a province of Canada. Cod, to use a French expression, is our raison d'être. It was the stock market of Europe and the livelihood of our people. It's sad, but we all know the story with the word “moratorium”. Just to say it, says it all.

In recent years, the work of DFO and the Centre for Fisheries Ecosystem Research, CFER, at the marine institute, suggests an increase in biomass for northern cod, and yet—and this is my take-away point—it must be underscored that the fishery is not yet rebuilt. ASP is of the view that a general strategy of restraint is required in our approach to northern cod.

As we wrote to the Minister of Fisheries and Oceans last year, “a general strategy of restraint grounds any and all increases in science, avoids past mistakes, accelerates stock recovery, and protects the substantial investments that will be required for modernization and for market development”. That restraint includes adherence to the PA framework, the precautionary approach framework to which DFO is itself committed. DFO has said that its precautionary approach framework will guide decisions. The Association of Seafood Producers supports that adherence.

In that regard, it should be noted that stock-building has yet to occur. The biomass remains in the critical zone at just over one-third of Blim. In DFO's PA framework, this means removals must be kept to a minimum. In “Northern cod comeback”, published in the Canadian Journal of Fisheries and Aquatic Sciences last year, authors Rose and Rowe suggest that with frugal stock management and low fishing mortality, “this stock could rebuild, perhaps within less than a decade”.

(1045) Again, to underscore the point, the stock is not yet rebuilt. ASP is also on record as supporting the position contained in the DFO's Canadian science advisory secretariat's science response from last year, which reads in part that “removals should be kept low to promote stock growth”.

We have noted before in correspondence to the minister, and in concurrence with the FRCC report on groundfish from 2011 titled “Towards recovered and sustainable groundfish fisheries in Eastern Canada: a report to the Minister of Fisheries and Oceans”, of which I have a copy here, past instances of growth in biomass have been cropped off by premature quota increases. I was pleased to serve on the FRCC at the time of that report, and I want to reiterate its findings today. Past instances of growth have been cropped off. We want to avoid that, and I think all stakeholders want to avoid it.

It remains imperative, therefore, that we follow the science and not get ahead of it. We have to avoid being led by an impressionistic sense of what's out there or by open line radio. This fishery is being watched with increased scrutiny by our fellow Canadians and the international community, and appropriately so. It's an iconic fishery for collapse, and the world is right to watch what we do.

We support erring on the side of caution, not just for the international perspective on northern cod, but because it is appropriate in reality, as per “A Harvest Strategy Compliant with the Precautionary Approach” adopted by DFO. Removals have to be kept to a minimum by necessity, and the low level of removals to date in this stock have been key to the recovery, such as we have seen to date. Northern cod, it must be acknowledged, is not just an icon or an interesting case study for international observers or for national fisheries management and science.

At the end of the day, rebuilding matters to industry participants represented here at this table. Again, the 2011 FRCC report said, “This rebuilding will require sustainable fishing practices, economically viable enterprises and the production of quality, high value products that find acceptance in global markets.” In an era of increased whitefish supply in international markets, both wild capture and aquaculture, northern cod will be of most value when it supports a modern industry that is economically sustainable with premium quality fish. We're not there yet either.

There is some concern, well placed, that we cannot “get there from here” in terms of the structure. We also acknowledge and support the minister's commitment to ensuring the implementation of a “licence and tags regime for all recreational fish participants...expected to be introduced prior to the 2017 season”. That is an important point. In closing, let me say that we invite, as always, DFO's continuing collaboration with the industry.

We acknowledge DFO's support for our northern cod fisheries improvement project, FIP, which ASP is developing in conjunction with the Groundfish Enterprise Allocation Council, or GEAC. That project, like all FIPs, is designed to help prepare northern cod for eventual MSC certification. MSC, I'd like to remind people, is the democracy of the marketplace, making third party attestations as to the sustainability of seafood products in the marketplace. It is telling to recall that MSC was developed on the back of the groundfish moratorium here in the early 1990s. The world is watching.

Whatever we do with groundfish, and cod in particular, we must do it right if it is to sustain us many years hence. We can be sure now, as we face the prospects of ecosystem change, that the decrease of more valuable shellfish and the resurgence of lesser value per unit groundfish will bring untold pressures to bear on industry participants and the managers. We face some difficult years of transition ahead. Again, thank you for your time. I'm available for any questions you might have. Thank you. The Chair : Thank you, Mr. Butler. True to your word, you were around nine minutes. Mr.

Wareham, please, for 10 minutes or less. Mr. Alberto Wareham (President and Chief Executive Officer, Icewater Seafoods Inc.) : Thank you, Chair. Thank you to the committee for this opportunity this morning. Icewater Seafoods is a family-owned business with an extensive history in the Newfoundland cod fishery. It started seven generations ago when my ancestors came to Newfoundland from Dorset, England. Icewater was formed in 2004 by my father, Bruce Wareham, from the former Newfoundland operations of High Liner Foods.

Today, Icewater is a vertically integrated groundfish company with the second-largest holdings of greater-than-100-foot enterprise allocations for various groundfish stocks across Atlantic Canada. Access to these resources allows Icewater to plan and sustain operations at our plant in Arnold's Cove. Our state-of-the-art plant is solely focused on the production of North Atlantic cod. With a team of 210 cod experts, we have successfully built strong niche markets for premium quality individually quick-frozen cod portions, which are sold primarily in Europe.

Even after the moratorium on northern cod was announced in 1992, our plant operations remained focused solely on cod. This, coupled with the help and support of our community, has made Icewater the largest buyer and the larger producer of cod in Newfoundland since the moratorium. Prior to 1992, North Atlantic cod was king of the world's whitefish production, which Newfoundland has benefited from since the early Europeans began drying and salting fish along our shores in 1497. However, world production and consumption of whitefish have evolved significantly since the moratorium.

Although North Atlantic cod continues to be the preferred whitefish for discerning consumers, it has lost its dominance of world whitefish production, primarily to Alaskan and Russian pollock. In 2016, the 1.4 million tonnes of North Atlantic cod that will be captured represents only 18% of the eight million tonnes of whitefish that will be harvested globally. The disposition of world markets for North Atlantic cod has also changed significantly since the moratorium.

From the late 1950s, when freezing technology was introduced, through to the moratorium, the majority of Newfoundland cod was produced in cod blocks and sold in North America. This market no longer exists. Today, North America represents approximately 5% of the world market for North Atlantic cod. The primary market for premium quality North Atlantic cod in fresh and frozen form is the United Kingdom and western Europe. Icewater sells 90% of its production in the European market and competes with the top producers from Iceland and Norway, where sustainability has been a focus for many years.

Actually, it was the announcement of the moratorium in 1992 that was the genesis of the Marine Stewardship Council, which has become the largest certifier of sustainable seafood in the world. To be blunt, world markets do not need or defer to the mere 4,000 tonnes of northern cod captured in 2015. However, for Icewater, this raw material complemented our existing supply and allowed us to further develop our market presence in high-end European markets. This is not to say that there is no future for northern cod. In fact, it is quite the opposite.

Provided we do this right—that is, we focus on quality and allow the stock to build—northern cod could indeed be the future of the Newfoundland fishing industry. It is with this in mind that I remind you of the following. The latest Department of Fisheries and Oceans stock assessment for northern cod, which was released in May 2016, shows that the stock is only at 34% of the lower limit reference point, the point below which the stock is at risk of serious, long-term impairment of productivity.

Under DFO's precautionary framework, removal should be kept to the lowest level possible, and the very concept of a commercial fishery is inconsistent with the reality. There is no doubt that the stock has experienced significant growth in the last five years. It is also indisputable that much of this growth has been derived by a limited number of relatively strong year classes that have appeared as an anomaly and have not been experienced since.

Unless these year classes are allowed to grow and develop into spawning stock and contribute to future recruitment, we could easily revert to the same cycle of collapse as in our recent past. We must, as required by the department's own policy, keep removals at an absolute minimum. If catches are allowed to increase too soon, we will crop off the growth and will for the third time in 25 years lose the opportunity to realize the full potential of the northern cod stocks.

In fisheries, we often base our removals on an assessment of how the fish we catch today may impact our population next year, the year after, and even out 10 years. With northern cod, DFO has adopted a model that is unable to see beyond three years because of stochastic error associated with the model formulation. This limitation forces management decisions to be undertaken without an assessment of what the impacts may be over the medium and long-term horizon. This is clearly problematic, especially when we are only at 34% of the lower limit reference point.

To return to a previous point, prior to the moratorium, the Newfoundland processing industry was production-driven; that is, it produced primarily cod blocks and salted products, which did not require premium-quality raw material.

(1050) However, to compete in today's market for premium-quality cod, we must start with sustainably sourced, premium-quality raw material. In this new market, the Newfoundland processing industry must be market driven; that is, we must produce products demanded by the market and must focus on the products that yield the highest value for all steps in the value chain. A premium-quality raw material can only come from a balanced offshore—fall-winter—and inshore—spring-early summer—fishery.

We must remember that the northern cod stock is migratory; that is, it spawns in the early spring in the offshore area and migrates to the inshore to feed during the summer months, returning to the offshore areas in the fall. We understand that various fisheries ministers and department officials have commented that priority access will be granted to inshore for up to the first 115,000 tonnes of northern cod as the fishery recovers. Priority, however, does not mean exclusivity.

From a historical perspective, the greater-than-100-foot fishery is one of the key components to keeping plants operating year-round in Newfoundland. In a recent history of northern cod fishery prepared by a former RDG of the Newfoundland region, it was highlighted that from 1977 to 1992 the greater-than-100-foot sector landed approximately 40% of the total Canadian northern cod landings. The minister's recent comment that his government would honour any prior commitments to the inshore regarding access as the fishery recovers has been interpreted by some to mean exclusive access.

Without an offshore component to the fishery, we cannot maximize the value from our northern cod fishery as it recovers. One lesson learned from the moratorium is that fisheries managers need the best science available to them when making multi-year management decisions. The northern cod stock covers a very large area, with more than one genetically distinct stock. Although it has been well studied, there are some key deficiencies that exist with our understanding of where it resides, how and when it moves, and its vulnerability to the fishery.

For this reason, and to ensure we are able to fish the stock sustainably and gain MSC certification in the future, the Groundfish Enterprise Allocation Council and the Association of Seafood Producers began a fisheries improvement project for northern cod in 2015. The five-year work plan has a budget of $11.7 million and will result in our having the best understanding of the stock that modern science permits.

To date, the fisheries improvement project has funded the development of assessment and simulation models, genetic identification of stock components, and work towards the development of a large-scale acoustic tracking array. In fact, a recent announcement by this government on the Ocean Frontier Institute included a partnership with our fisheries improvement project that will significantly further our efforts to achieve sustainable management of the stock. For this, I and our partners thank you.

The work on our fisheries improvement project has highlighted one key risk: if the productivity of the stock remains low, the population is likely to decline again. Any fishing will increase that risk. In a more positive vein, the stock may indeed continue to grow if capelin production improves and we truly keep levels to a minimum. If this is the case, we could achieve the limit reference point within five to ten years. At that point, the stock will be ready to support a commercial fishery that is sustainably certified and can compete in the world markets. Thank you for your consideration and time.

(1055) The Chair : Thank you, Mr. Wareham. Mr. Sullivan, please, for 10 minutes or less. Mr. Keith Sullivan (President, Fish, Food and Allied Workers) : Thank you. It's certainly a challenge to talk about the northern cod fishery in 10 minutes, so I'll get going. Welcome. Good morning to members of the committee. I'm Keith Sullivan, president of the Fish, Food and Allied Workers Union, an affiliate with Unifor. The FFAW is the largest private sector union in the province, representing over 12,000 members, the vast majority in fish harvesting and fish processing.

It's understood that the cod fishery has a deep connection with our province. I'm going to talk about the value of the cod fishery to our members and our communities. The FFAW union movement started in 1970 when the cod price was 2.5¢ per pound. Back then, we didn't refer to it as “cod”, but simply fish. Cod was our fishery and our identity. The northern cod moratorium in 1992 put tens of thousands of FFAW members, including my family, out of work and dependent on government subsidy programs. The calamity of the cod moratorium forever changed the relationship between fish harvesters and fisheries.

The change applied to all aspects of the fishery, from science to marketing to management. In the wake of the moratorium, it was critical for fish harvesters and the FFAW to establish a larger role in fishery science. To that end, over the past 25 years, the FFAW has developed a full fisheries science program on a variety of species. The union also has a full-time fisheries scientist on staff, so that when DFO discusses matters of science we are in a room with a vast array of knowledge and a voice. With respect to cod, our two most important science programs are the cod sentinel and cod tagging programs.

Sentinel started after the moratorium as a response to a deep disconnect between what harvesters were saying on the water and the results of the stock assessments conducted by DFO in the years prior to the moratorium and that were being given to us. Before the moratorium, information from the inshore harvester was not systematically collected and used to inform management of the stock. Up to the moratorium, information on abundance was collected from the catch of offshore vessels that fished when cod were aggregated and vulnerable. There was limited information from the inshore fisheries on cod.

The cod sentinel program was designed to systematically collect information from the inshore to use for use in stock assessment and management. We now have information on catch rates and much more biological information. The information that the FFAW collects from its tagging program is crucial. It provides a direct estimate on fishing mortality, and it allows us to estimate the amount of cod removed during a season. It even accounts for removals of recreational catch. Our tagging program is conducted in partnership with DFO and involves attaching spaghetti tags to northern cod in inshore waters.

Just this week, we have technicians on the northern peninsula and southern Labrador. What are our science programs telling us? In sentinel, catch rates have increased substantially over the past five to 10 years. The increase started in division 3K, where experimental nets that once caught four fish are now catching 15. In division 2J, the increase was slower in developing, but over time the catches from experimental nets have gone from one to two to 30 fish per net. What this means is that catch rates are much higher than they were at the beginning of the moratorium, particularly in 2J.

With respect to mortality, the level for this stock is very low at the moment. Fishing mortality refers to the mortality of the species from fishing over the year. For the past three years, fishing mortality of northern cod stock was about 2%. In historical terms, in the 1980s, fishing mortality was around 20%. We're currently at one-tenth of that rate and, more importantly, biomass is expected to grow considerably over the next three years, which is the projection we have from our latest stock assessment.

What all of this points to is the long awaited return of northern cod stock and the corresponding environmental shift. Harvesters and processors have primarily focused on shellfish for the past 20 years. Now the focus is switching to groundfish, and not just cod, but turbot, redfish, and others. Though we're encouraged by the return of cod, we have not lost sight of the importance of conservation.

(1100) There is no harvester in this province who wants to relive the challenges of the cod moratorium. The new cod fishery is going to be managed correctly. To that end, we have the WWF, processing companies, and FFAW members attending meetings on a fisheries improvement project for northern cod. It's a very important partnership, with the goal of meeting sustainability standards for the new cod fisheries, which means things like the marine stewardship certification. The shift back to groundfish is exciting and challenging.

The cod fishery is certainly different from shellfish, and all in the province are aware of this. With shrimp and snow crab, we are major suppliers to the market. For cod, we're certainly a relatively small fraction of the overall supply. In many discussions and debates on how to approach northern cod as it returns, the one point that came back is that we would approach the cod fishery in a much different way than before. Prior to the moratorium, we were a quantity-based fishery serving the fish-stick market.

As we rebuild our cod fishery, our focus is on quality, a deliberate and necessary shift for the harvesters of our province. With quality in mind, the FFAW is part of the Newfoundland and Labrador Groundfish Industry Development Council. We have developed a ocean-to-plate approach. We're looking first at what the market needs and where the most value can be achieved, and then we're building our cod fishery to meet those needs. For example, we know there is a demand for high-quality, fresh, and once-frozen cod for white tablecloth restaurants and high-end consumers. These markets exist in a variety of places.

Icewater Seafoods mentioned their markets in Europe, for example. Iceland has increased the value of its own fishery by providing fresh cod to the eastern United States. With our current connections to Europe and our proximity to the U.S., we have much potential in the cod market. While it's important to tie our new cod fishery to market needs, we also need to build a fishery that works for our harvesters and plant workers in the future. Harvesters need to be able to land high-quality cod, and they need to be compensated accordingly for the value they're bringing into this industry.

The first thing that needs to be done—and it is within the power of the federal government to do so—is to protect the owner-operator principle. The attack on the owner-operator principle in the last 20 years, primarily but not exclusively by processing companies, has been terrible for the economics of the fishery in our coastal regions. Of particular concern is the impact of trust agreements, that method of undermining the owner-operator and fleet separation policies and its impact on the cost of fishing licences, which has made it extremely difficult for the next generation of harvesters to enter the fishery.

Processing companies with large resources have circumvented owner-operator and fleet separation policies and have bid up the price of crab and shrimp licences to the point where only well-established harvesters—or in most cases, processors—can afford to pay. Harvesters who are in trust agreements often receive less money for their catches. Fortunately, the impact of trust agreements on the cod fishery today is a little smaller. It is not the same as those other fisheries. However, this could change, particularly as the value of the cod fishery increases. Therefore, the owner-operator policies must be protected.

The focus on quality also requires an understanding of what quality cod is and how a quality cod can be landed. As I mentioned earlier, the pre-moratorium fishery was focused on quantity. Harvesters haven't landed northern cod in a meaningful way in 25 years, so we still have some work to do. We've spent a significant amount of time, at all levels of the industry, on fully understanding what constitutes a quality fish. For the past two years, we've been engaged in a cod quality project, in partnership with ACOA and the provincial government.

Teams of harvesters monitor a whole host of variables, from the temperature of the fish, to how it's handled when removed from the net or hook. When this process is finished, we should have a comprehensive guide for achieving top-quality cod, and we'll be able to disseminate this information to all in the industry, including harvesters.

(1105) Harvesters also need to be properly compensated for providing quality fish. On this point, we have made important steps. For the past three seasons, we've had a quality-grade price system, where grade A cod receives a higher price than grade B cod and so on. This certainly has its challenges, but harvesters recognize the need to be paid for the quality, and this will be key to increasing value. The new cod fishery is going to require significant investment, from both a harvester and a processor perspective.

For that investment to pay off, the harvester price needs to be good, and the fishery needs to be managed and structured properly. One management change that began this year is having a longer season to allow harvesters to catch more cod so that we can supply a steady stream to the market. The best cod, the cod that provides the best price to harvesters and processors, is one that is landed quickly and shipped to market. We need to move away from a condensed fishing season and to spread out landings and avoid gluts in the processing sector.

In years past, harvesters were limited to 5,000 pounds, which they landed in a week or two. This year, there are limits for weekly landings, but the season is stretched out considerably and over several months. We have many harvesters who have landed 15,000 to 20,000 pounds of cod this year. I've spoken with one experienced harvester who has caught 36,000 pounds of cod using just hook-and-line, just he and his daughter in a boat each day. Landing 36,000 pounds of quality cod is a positive change, albeit a first step for the economics of our cod fishery.

There have also been positive steps taken by the federal government to encourage investment in the inshore cod fishery. Last year, during the federal election campaign, Prime Minister Trudeau committed to allocate the first 115,000 metric tons of northern cod to the inshore fleet. This allocation existed before the moratorium, and inshore harvesters were given every expectation that it would once again exist, once a normal commercial cod fishery restarted. In late July of this year, Minister LeBlanc confirmed to me and the senior executive of the FFAW that this commitment stands.

The first 115,000 metric tons of northern cod will be granted to the inshore sector. This is an extremely important commitment. We are building a cod fishery from a very small base at the moment. If we are going to change how we catch, transport, process, and market large amounts of cod, those engaged in that sector need to know that there is a consistent allocation of fish, so they can invest with some security. The commitment to 115,000 metric tons is the best security the industry and our country can receive.

It will give us time to rebuild at a reasonable pace, to build markets, to build expertise in catching and processing quality cod, and to figure out how best to fish and manage the new northern cod fishery. For the harvesters of Newfoundland and Labrador, the cod fishery is not about revisiting the past; it is about charting a new future. Our hope is that, 30 years from now, the idea of a cod fishery won't bring to mind images of 1992 and the dreaded moratorium.

Rather, we hope it brings to mind images of 2016, images of a man and his daughter catching 36,000 pounds off a hook-and-line, and how we've just started, as I will remind you, the process of turning a sustainable cod fishery into a pillar of prosperity for coastal communities from Newfoundland and Labrador. Thank you.

(1110) The Chair : Thank you. I was a couple of minutes generous there, but you might want to thank the other two gentlemen for coming up short. You took it from them. I have a reminder before we get into questions and answers. This is a pretty big room with a high ceiling, and as we say here in Newfoundland, if you're not handy to the mike, it ain't gonna happen. Please keep that in mind. We are going to start questioning with the government side. Mr. McDonald, please, for seven minutes. Mr. Ken McDonald : Thank you, Mr. Chair.

I welcome the three gentlemen who are here today and thank them for taking the time to appear before the committee. My first question is for the FFAW president, Mr. Keith Sullivan. Keith, in your talk you referred to the importance of the cod, the coming back to the cod, and the fact that the first 115,000 tonnes would be allocated to the inshore, but what about when that point comes and beyond that, when that stock finally gets to the biomass where we can open the commercial fishery? I guess I have two questions for you.

As a person who represents not just the fishers but processors throughout Newfoundland in a lot of small rural communities, when the cod fishery returns, at what level do you think the biomass should be to return to that full-fledged commercial fishery? What significance do you think it will have for rural Newfoundland when we get to that point? Mr. Keith Sullivan : Thanks for that question. That one has been debated for many years. We're happy that the science is picking up the growth of the stock. In the next three years, what we see from the science is an expected doubling.

It's really matching up with what harvesters are seeing. The growth is happening at a significant pace, and the fish mortality is very low. We're happy to see that year-after-year increase. I think the main thing, particularly for this stock, is that we have a sustainable fishery, and because all eyes will be on it, that will be important to market it. You have to keep in mind the amount of fish that there actually is. We're talking about 260 million pounds of fish, which is a considerable amount to market. That can represent $500 million to the economy of our province.

That's why I speak of that going to owner-operators, staying within our coastal communities. We have an advantage in the province in being able to supply fresh fish, first of all to important markets in the eastern United States, and it's a very good once-frozen product that certainly is superior to much of the twice-frozen product that remains in the rest of the world.

I think it is really important that we build those markets and our capacity as we go along, because from the small fishery we have now—the few thousand tonnes—to get up to 115,000 tonnes, the fishery, our infrastructure, and our markets are going to have to grow at the same time. We need a considerable amount of focus, and this year was only a very small first step focusing on having a longer supply. I think we have much potential. We'll have to do a lot of working together to realize the value of that hundreds of millions of dollars in potential for everyone in the province.

(1115) Mr. Ken McDonald : Thank you. The next question is for both Mr. Butler and Mr. Wareham. What type of investment is needed in the processing sector to make sure we're ready for the fishery and ready to provide the product that will dictate the demand we're going to have on our fishery in the future? Mr. Alberto Wareham : Thank you for your question. We're fortunate in the sense that we have the only state-of-the-art plant in Newfoundland today, so we have the investment.

Obviously, we're continuing to invest, but if you were starting from scratch, you would need $25 million or $30 million for one plant, and you probably need five to six plants. We can't go back to the fishery of the past, when we had a fish plant in every community. I'm not saying there's no place for small fish plants, but if we're going to compete with the best in Iceland and Norway in the world market, five to six plants at $25 million to $30 million each would probably be okay. Mr. Derek Butler : I would echo that in terms of the numbers. We don't need the number of plants we used to have.

We've had a significant reduction from 200-plus in the groundfish days. As we've gone through shellfish, we're down now to somewhere around 60 to 70 plants in the province. I've always joked that we need one per electoral district, and we'd be happy with that, with 40-odd—I guess it would be 30-odd now—at the provincial level. We need tens of millions of dollars, and here's the trick. As the biomass goes up, if we trickle up in terms of supply or landings it won't support the investment. You need to have a significant quantity of fish available to you to support the investment.

My members are principally in shellfish right now. If we're going to transition to groundfish, we need a lot of capital, and we need the fish to sustain it. That's going to be the challenge: finding the balance between increasing fishing now and getting a sufficient amount to justify the investment. Mr. Ken McDonald : Thank you. Mr. Wareham, what are the markets going to demand in terms of a finished product? What type of quality? What kind of price range are we looking at achieving by doing that? Mr. Alberto Wareham : I should probably answer those in the order you asked them.

I'm in Iceland once or twice a year and looking at technology on a yearly basis to make sure we have the best. You have to understand that Marks and Spencer is one of our largest customers in the U.K. When the Marks and Spencer people come to our facility, they have just left the facility in Iceland or the facility in Norway. They have to see the same style if they're going to take any comfort. There are only four processing plants in the world that are approved to supply Marks and Spencer with cod, and we're one of those, so we need to have the best. When I'm in Iceland, I see fish being landed. Mr.

Sullivan referred to the grading system that we have in Newfoundland. We've been working with them on that for the last three years. Ninety-five per cent of the fish landed in Iceland is grade A. We're not there yet in Newfoundland. We have a long way to go. We have seen improvements this year. Basically, you almost need the perfect fish if you're going to compete in those markets, both fresh and frozen. We haven't competed in the fresh market because we have not up till now had a constant supply of a superior quality of cod that allows us to be in the market 12 months of the year.

That's why our focus is on the frozen production. Mr. Ken McDonald : Thank you. I have time for one more question, Mr. Wareham. As a person who has a successful operation right now when it comes to cod—I think you said something about just over 200 cod specialists—are you concerned about having a high-level skilled workforce when the fishery returns in a major way? What are we going to do to make sure we have that workforce? Mr. Alberto Wareham : First of all, if you had the opportunity to come to our facility, you would see that it's not like a typical fish plant that people have in their minds.

It's like an operating room. We have people with an average of 21 years' service in our facility and an average age of 50 years. That's amazing in any industry. In the seafood industry, it's off the charts. We have that because we've stayed focused on what we're good at, which is cod. We give our people full weeks of employment. We bring in frozen raw materials to supplement what we can get locally, so they're getting 25 to 30 full weeks of employment. If you can give people full weeks and pay them good wages, I think you'll attract people. The other thing is automation.

We're investing as much as we can to make sure we have the best in the world, but we still need 210 people to operate the plant—

(1120) The Chair : Thank you, Mr. Wareham. I'm sorry, but I have to cut it off there. Mr. Doherty, please, for seven minutes. Mr. Todd Doherty : Thank you, Mr. Chair. Gentlemen, I thank you for appearing before us today. I have a few questions. This is for the panel. First off, we had DFO testify before us last week regarding the numbers from their studies, which are a third of what they would like to see. However, we've also heard testimony where there was some skepticism about those numbers, testimony that the numbers are actually greater than that. Are you satisfied with DFO's numbers?

Or do you believe they're higher than what DFO is reporting? Mr. Keith Sullivan : I can start it off. I think we need continued investment in science. The recent investment in having more science staff hired by DFO is a good start. That said, we do a relatively good job on cod. Mr. Todd Doherty : Sorry, but do you think— Mr. Keith Sullivan : I was just working up to the numbers and what I want to say. I'll go quickly. The observations of the inshore harvesters are that they see generally more cod throughout the region than they did in the 1980s.

The concern is whether the 1980s estimates were higher than they really were and whether we are underestimating now. Those are some concerns. That observation is certainly widely held. To summarize the point, we have to continue to make sure that we have the best science available. Mr. Todd Doherty : Mr. Butler. Mr. Derek Butler : I would concur with Keith. We always appreciate the science—more science and good science. I made the point, and I was explicit in making it in my remarks, that we need to avoid an impressionistic sense of what's out there. Open-line radio can't rebuild cod.

The old joke around where I'm from, Clarenville, is that the only place you can't catch cod is out in the woods, but I say we default to the science, in light of the precautionary approach, until we have greater certainty. Mr. Todd Doherty : I can appreciate that. Mr. Butler, you mentioned that restraint—continued restraint—is needed. Do you support DFO's decision to extend Newfoundland and Labrador's recreational fishing by 14 days this year? Mr. Derek Butler : It's a very political question in Newfoundland and Labrador. We understand, as an industry, that there will be a role for the recreational fishery.

Let me leave it at this. We would think that removals have to be tracked. We support the tagging initiative of the minister. I don't think that expanding the recreational fishery right now is the best approach in light of our concerns around the stock, in light of where it is in terms of the critical zone. That may be saying more than I wanted. We probably would have defaulted to past practice and understanding the necessity of that or the politics around it, but not the increase. Mr. Todd Doherty : I'll keep it as “restraint is needed”. Mr. Derek Butler : Absolutely. Mr. Todd Doherty : I would agree with that.

Mr. Wareham, that was a great presentation. I would love to be able to see your plant. As a committee, we have a question. Our moratorium has been on since 1992. Norway's cod stock was replenished in three years,

whereas we're still sitting 25 years out. What are they doing differently from what we did? Mr. Alberto Wareham : You're talking from a stock perspective? Mr. Todd Doherty : Right. Mr. Alberto Wareham : There are a couple of different things to point out. They have high productivity in their stocks,

whereas we do not. I think that's why the scientists want to see approximately 980,000 metric tons of spawning stock biomass. Our cod matures more slowly. In Iceland, fish are recruiting into the fishery two to three years during the spawning stock, and ours is five to six years. It's as much about the biology of the fish than it is anything.

(1125) Mr. Todd Doherty : DFO testified last week that they're seeing a change in the tendencies of the fish, that because of the low stocks we're seeing them mature faster. Would you agree with that? Mr. Alberto Wareham : In Newfoundland, we are not seeing that yet. We've been producing the stewardship fishery cod that's been landed since 2006, and we're not seeing a substantial change yet. Mr. Todd Doherty : I really appreciate the ocean-to-plate practice. I come from British Columbia. There's a large farming area in my region, and we have similar sustainable farming practices for “pasture to plate”.

If you saw me on the phone, I was Googling the right term. It is something that I can appreciate. You mentioned something about the quality of fish in saying that we're not quite there in terms of the quality of fish. Is that because of the quality of fish or the quality of harvesting? Mr. Alberto Wareham : I'm going to answer in two ways. As I've said, one of the biggest challenges we have in Newfoundland is 500 years of history: “that is just fish and it's good enough”. That was good enough up until 1992, but it's not good enough anymore. We work with some of the FFAW harvesters.

They've been harvesting fish for 30 years. They learned from their fathers and their grandfathers, etc. They don't know how to handle it as well as they think they do. Mr. Todd Doherty : That's exactly what I wanted to get to for my next question. It would appear to me that change is inevitable and that we have to change the way we do things as we move forward. There is a large component in terms of education and educating our long-standing fishing families on a more sustainable way of doing things. My question is for the panel.

How are we seeing buy-in with the recreational fishers and also with the long-standing fishing families in educating them in the new ways and better ways of doing things? Mr. Alberto Wareham : I think we can say that money has a way of solving problems or encouraging change. That was one of the reasons Icewater and the FFAW worked on the quality grading system. By paying a substantial premium for grade A and a very low price for grade C, we're trying to force them— Mr. Todd Doherty : It's incentive based. Mr. Alberto Wareham : Yes. Mr. Todd Doherty : That's perfect. Thank you. The Chair : Thank you, Mr. Doherty.

Mr. Johns, please, for seven minutes. Mr. Gord Johns : I also want to thank you for being here. It's great for you to share your invaluable insight. I'm from coastal British Columbia, from Vancouver Island. We're seeing a huge decline in our salmon stocks, as you know. We hope we don't go the way of the cod in 1992. We can learn and share a lot, and I appreciate what you're teaching us today. Mr. Sullivan, you talked about the owner-operator principle. In British Columbia, with our salmon, I'll give you a comparison. One operator owns 39% of the quota of our salmon stocks.

Can you talk a bit about the owner-operator, the adjacency, and the importance of that? Mr. Keith Sullivan : In Newfoundland and Labrador, the biggest part of the economy in coastal regions outside the northeast Avalon, where we are now, would be the fishery. It has been for a number of years. It's the reason why people settled all these communities.

What we've seen in recent years has been more of a shift to things like we've seen in B.C., with companies going around the policies for trust agreements, and with companies with deeper pockets, not necessarily located in those areas, being able to outbid and out-compete local harvesters, such as someone who is on the deck of the boat. That's been a hindrance to the next generation of people for getting into the industry at a fair value. We've done a substantial amount of work. It's a popular policy.

People recognize the value of it, but there have been loopholes that have been exploited, and we're working hard to close those. For the future prosperity of our coastal communities, that's something that is going to have to be stopped soon, because we're losing a future generation. If we have people that could possibly be international companies and whatnot looking and trying to secure a supply of food products.... I'll stop there just to recognize that we have a short amount of time, but it is vitally important for our future. Mr.

Gord Johns : One of the earlier witnesses talked about harvesting being managed right now by the federal government, as we know, and processing by the provincial government. He said that it's impossible for us to continue down this path without integrating some sort of process. Mr. Butler, and maybe Mr. Wareham, do you want to talk about how we can improve, in terms of more of an integrated model, to be more efficient?

(1130) Mr. Derek Butler : I don't have particular thoughts other than to say that I would support that. I think there's a challenge.

Section 7 of the federal Fisheries Act gives absolute discretion to the federal Minister of Fisheries and Oceans. We'd like to see a change to that in respect of moving the fishery forward. In the 21st century, we don't think any one person should have absolute discretion. It's the most powerful minister in respect of their cabinet colleagues at the table, in respect of their domain of competency or interest in the fishery. The challenge has to be all the pressure that puts on the minister. In respect of managing the fishery, the minister can't give up that authority, I don't think, without a change in the act.

I think this has to be addressed before there's any talk of sharing management between the two levels, the federal and the provincial. The other aspect of this, which is very complicated, is all the provincial aspects. We share fisheries in the Gulf, for example. Then there's the NAFO angle. There are international fisheries that compete with or overlap provincial fisheries. In area 7, for example, under shrimp, NAFO quotas were set there. They were not set by Canadians but managed by Canadians.

The third wrinkle—this is just to speak to how complex this is—involves our first nations and the federal authorities around first nations as a result of I think the Donald Marshall decision. That makes it all very complex. I think everybody would laud the principle of a requirement for more shared stewardship between the two levels of government, but it's very complex. Mr. Alberto Wareham : I would add one comment to that. Whoever is going to manage it, it has to be science-based. We have to get the politics out of it. It has to be science based. That's the only way we have a future in the fishery. Thank you.

Mr. Gord Johns : This leads me to the next question, Mr. Wareham. You talked about a three-year cycle in terms of management. What would you like to see? Maybe you could elaborate a little more on that. Mr. Alberto Wareham : Well, I guess “go slow” is the main thing. If there have to be increases, keep them very small. Our plant is operating today at 40% to 50% of its capacity. I should be the greedy person at the table saying that I want my plant full, but I'm the seventh generation, and if I'm going to have an eighth, a ninth, and a tenth generation of our family in the business, I want it done right.

I'm prepared to go slow for the long term. The Chair : Thank you, Mr. Johns. We'll go over to Mr. Finnigan, please, for seven minutes Mr. Pat Finnigan : Thank you, Mr. Chair. Thank you to the panel for appearing on the processing side of this. My first question would be for Mr. Sullivan. If we ever return to sustainable numbers to harvest, do you believe that we have presently in those fishing communities the labour force, the human resources to do this? Would you say that retooling is a must? Or are we going to have to go to offshore labour to supply it, if we ever do return to a sustainable harvest? Mr.

Keith Sullivan : Supply of labour is certainly a concern in many areas now, but I think that if we build a valuable fishery, something that pays good wages to those involved, we'll be able to attract workers. We have a generation of people who love this industry and are very interested in life in rural Newfoundland and Labrador. For example, Mr. Wareham talked about the average term for people in his plant being over 20 years. We may have challenges, but I think the main thing we focus on is getting the most value possible from our fish.

If we hit the high-end markets and we're able to pay harvesters to stay there, I think there's a very bright future. We might go to other models where we don't get the highest value and may not be able to pay people, but I think we should strive to get the most value and make sure that we make those well-paid jobs. That will certainly help attract a labour force. Mr. Pat Finnigan : Mr. Butler. Mr. Derek Butler : Despite the evident youth you see here on the panel— Voices: Oh, oh! Mr.

Derek Butler: —we have the lowest birth rate in the country, and that's including any U.S. state, and the oldest population in the country. It's a remarkable change from the 1970s. I'm a little less optimistic. I think we have significant challenges in terms of our labour force. The recent change by the government in respect of the temporary foreign workers was helpful to the processing sector, particularly in the Maritimes, where the challenge is even more acute. I think we have a real challenge. Groundfish is going to be more labour-intensive work than shellfish is.

That means you're going to need to bring in workers, which is unlikely to happen, I think, to the extent that it's done in other jurisdictions. I think we have a real challenge with the aging workforce, given the labour required to do groundfish, because it's labour-intensive as opposed to capital-intensive. Absent some structural changes in the fishery to achieve the year-long fishery that together we've alluded to here, my fear is that, as is the case with Norway and Alaska in the pollock fishery—Alaska is the world's largest whitefish fishery, I believe—the fish will end up in China for additional processing.

We need high innovation. That takes a lot of money. I would add one thing. We've mentioned Iceland. I think Keith mentioned it before me. I would say to the committee that if there were ever a parliamentary trip worth its merit, it would be the panel's visiting Iceland to see how things are done. They have groundfish and they have pelagics. They haven't had the shellfish. They had cold water shrimp, but not the snow crab. They have done things. We don't need to reinvent the wheel. We don't need to do everything they do, either, because we're unique. But we don't need to reinvent the wheel.

(1135) Mr. Alberto Wareham : If you recall some of my comments in my opening remarks, if we have five or six plants with, say, 250 people in a plant, with 1,250 or 1,500 people we have enough capacity to produce 250 million to 300 million pounds of cod. A lot of new technology for whitefish is being developed in the world, so with a combination of technology and 1,500 people, I think we're okay. Mr. Pat Finnigan : I have another question. This time we're talking about gillnets. I'm not sure what the other countries are doing and whether they're still used.

Can we remove them and can we remain with smaller boats and compete in the world market? Mr. Alberto Wareham : The majority of the fish landed in Iceland is not landed with a gillnet. I think I saw the numbers. It's 10% or 20%,

whereas in certain parts of Newfoundland it's 80% or 90% gillnets. With gillnets you can get a quality fish, but you have to obtain it properly and the weather has to be on your side. On average, you will not get as good quality with a gillnet as you will with hook-and-line. Hook-and-line lends itself to small boats and big boats. It can be done in both. Mr. Pat Finnigan : It can be competitive. Is the industry and are you satisfied with the relationship between the industry and DFO? What else could be done? You have a good working relationship with DFO.

Do you think they're doing enough to have the proper data to evaluate the stock? Do you see anything else that could be done to enhance that relationship and get better numbers? I'll go to you first, Mr. Sullivan, and you might want to comment on the last one. Mr. Keith Sullivan : Thank you. Very quickly on the last one, I think we'll focus on what the market values in the fishery and in catch methods. There are certai