STANDING COMMITTEE ON RESOURCES
Mr. Neil LeBlanc
MR. CHAIRMAN: My name is Neil LeBlanc. This is the Resources Committee and our guests today are the Nova Scotia Aquaculture Association. We have Marli MacNeil who is the Executive Director and also Brian Muise who is the President of the Board of Directors. The usual format, I think you have been here before, is we give the witnesses a chance to make an opening statement or whatever format you care to take and then from there we go into questions. So perhaps if you could lead us off, we would appreciate it.
MR. BRIAN MUISE: Well, first off, I would like to say thank you very much to the committee members for giving us an opportunity to appear before you today. My name is Brian Muise. I am President of the Aquaculture Association. I have been involved in this industry in Nova Scotia for about 26 years. I have made my living as a producer and then with government for a term with Nova Scotia Fisheries and left that and back as a producer. I am a producer to this day. So there is a reasonable history of individuals involved in this province making a living in this industry. The industry is not what we hoped it would be at this point and I think this message may come through as we go through.
So just to let you know, I am going to be here more as a resource person today. My background is quite extensive. I have grown salmon, trout, oysters, mussels, scallops, the gamut. I am now a mussel producer. I am also a consultant. I do consulting work here within the province, within Canada and internationally with aquaculture development agencies. I will act more as a resource person, be able to speak as an actual producer.
I am going to turn the floor over to Marli MacNeil, our Executive Director, to do a more formal presentation. Thank you very much.
MS. MARLI MACNEIL: Thank you, Brian, and thank you very much for the opportunity to appear before you this afternoon. I believe you will have received a handout that contains an overview of what we would like to talk about this afternoon and some information on aquaculture programs in other provinces. This package of information sort of came from a discussion that I had with Mr. LeBlanc where I talked about these things and he suggested maybe it would be good to see what is going on elsewhere. So I brought that for your information.
The Aquaculture Association of Nova Scotia is primarily a producers organization, although we do have members who are either suppliers or supporters of the industry. It was founded in 1977 to represent the interests of the then fledgling aquaculture industry. In 1998, it represents the interest of the now fledgling aquaculture industry. We have currently approximately 120 members ranging from students to farmers to supply industry but, again, our primary focus is with the producers and their needs and requirements.
The mandate of the association, like all mandates and mission statements, reads very nicely. It is to support the production of quality food in the cool, clean waters of Nova Scotia, creating wealth based on a renewable resource. The association supports its members in developing viable businesses by defending their interests with government, by pursuing access to financing, funding, to providing appropriate services and by promoting aquaculturists as farmers of a diversity of high quality products. I believe as we go through our discussions this afternoon, you will see that there are key words in there that certainly have a lot of meaning.
Our association basically sets itself up, as I mentioned, to service the producing sector and we have six priorities, if you will, for the association and, indeed, its staff. The first one is advocacy, defending aquaculture, lobbying for regulatory change, being proactive and planning for future development. Some concrete examples of this that I can relate to you come, actually, very close to a lot of other industries right now, whereas we are dealing with the effects of the Swissair crash on our industry and representing our industry in meetings, Brian has been to several meetings making presentations, making sure that growers who may not have the time or, indeed, the resources to represent themselves, are being represented.
We are in the process of drafting environmental codes of practice for our industry. We represent industry on committees working on various guidelines, for instance, very recently, the guidelines for diving safety in the province and are continually responding to proposed federal and provincial legislation which might impact on our industry.
Another of our key priorities is actual management of the association. The membership concluded after a lot of soul-searching that they required an association to represent their interests because, for the most part, their businesses are too small to take precious time away from them to come to meetings and to represent themselves. So accessing funding to keep our doors open has been a real challenge. We will discuss later that our industry is worth approximately $15 million. That is spread out over about 100 businesses so
it doesn't take a mathematician to figure out there is not a lot of money to put back into keeping an association open so we have to scrounge for funding to do that.
Communication with industry, government and the public is a key priority that we have set and we do this by both newsletters and news bulletins which go both to the community at large and to our membership, information pamphlets, special publications and we get, increasingly, requests for information from people who don't really know a lot about the industry and would like to learn. We gauge that those have gone up from about two or three a month to four or five a week in the last year and I have somebody who pretty well devotes 20 per cent of her time to doing that sort of thing.
We see that we have a role in facilitation. We act in the way to determine the needs of the industry and find appropriate programs and services to meet those needs. Examples of that would be actually undertaking research projects on behalf of the industry as a whole, doing computer searches for information - again, facilitating links that individual business people don't have the opportunity to make.
Our fifth emphasis, I guess, is promotion, that is making the positive impacts industry can have on communities known to the public and also promoting the products that we produce to the public. Examples of how we are involved in that are participation in school and community events like agricultural fairs, which we do increasingly, school science exhibits and we have been involved in projects such as the recent Sobeys Seafood Celebration which targeted a publication that basically was all full of aquaculture information and recipes and was distributed in all Sobeys stores in Atlantic Canada and Quebec.
The sixth sort of area that we have looked at is education and training. There are two sides to that, if you will. There is gaining access to continuing education for farmers and their employees and then there is working with educational institutions to ensure that the training and education that they are offering to people who may go into the aquaculture field is both relevant and realistic. Some examples of that are participating in the community colleges aquaculture advisory group, speaking to students at NSAC and at other universities and offering workshops for our members in various locations around the province on issues such as finfish nutrition, farm management, marine emergency and first aid, seafood processing technology, et cetera.
Some of the concrete things that we do as an association are providing services such as a phytoplankton monitoring program, a scallop toxin testing program and a fish health monitoring program; as I mentioned earlier, education and training opportunities, workshops and group benefits such as insurance and member rebate programs that are not available to small companies as most of our members are without the group dynamic.
We have been fortunate over the years to receive funding through, first, the cooperation agreement, now, the economic diversification agreement to offer some of these services. That funding ends March 31, 1999 and as I am sure most of you know, there is no more money left in that agreement so the services end as well.
We also represent the industry in regional, provincial and national committees and boards. I, for instance, sit as President of the Canadian Aquaculture Industry Alliance, which ensures that the message from Nova Scotia not only gets to Ottawa but gets hand delivered to Ottawa, which has been a bit of a bonus I guess in this year.
We hold an annual conference which attracts between 250 to 300 people to Halifax. These people now come from all over the world. We have been attracting people both in the U.S. and from Europe in the last couple of years. This serves as a focal point, if you will, for exchange of information and for technology transfer. It has been growing on an annual basis.
We also act as a clearing house for information and research needs. I think the benefit of having one industry association representing an industry in a province as big as this one is that we are able to bring the concerns of industry forward with a uniform voice, and we are also able to bring messages back that we receive through the industry.
In order to put our industry in context with aquaculture in Canada, no need to look at the international figures because those numbers are kind of meaningless when you are talking about a $15 million industry but the information I provided you with shows the value of the industry in other parts of the country. In British Columbia, $240 million; Prairie Provinces, it is primarily land-based trout, a small but growing sector with $6 million; Ontario, $20-plus million, this was a year old figure, I could not get a more accurate one; Quebec, the number you have on the information you received is $5 million, that is, in fact, $14 million, I got that confirmed today and, again, growing pretty well the same sorts of things that we grow here in Nova Scotia, mind you, certainly with B.C., a very different growing climate. In the region, we are surrounded by New Brunswick with a $125 million industry; Prince Edward Island having moved up to $25 million in the last year; and Newfoundland coming on steadily at $10 million.
The industry in Nova Scotia, as you know, is worth just a little over $15 million. There are 375 or so leases, only about 100 working farms. I am being very generous in that 100 because we are talking about anything from a one person operation to the two or three large farms that we do have in the province. We are currently having commercial production: Atlantic salmon, rainbow trout, and steelhead trout - the only difference there is rainbow is in fresh water and steelhead is in salt water, but the same trout - mussels, American oysters, Arctic char, scallops, and some sea plants. We are currently developing European oysters, halibut, winter flounder, clams and quahogs, sea urchins, striped bass and American eel.
We have a number of advantages in Nova Scotia that we ought not to lose sight of when we talk about the potential of this industry. I actually put this list together when I was meeting with a group of Chinese investors last year when we were trying to entice them to maybe invest in aquaculture in Nova Scotia. They decided to go to Newfoundland instead, but I still think it is a good list.
We have a history of aquaculture in this province. As Brian mentioned, he has been in the business 26-some years and that is really long in this industry in Canada. We are now seeing a second generation, if you will, of fish farmers emerging and a lot of the first generation are recognized internationally as industry leaders. We have a lot of coast line. Although not all of it is suitable for aquaculture, I think we have a lot of it that is suitable for a wide variety of species.
We have good water quality, good growing conditions. We have traditional ties with the sea and a heritage with the sea that can't be overlooked and maybe forgotten. We have world-class processing facilities in Nova Scotia. We have technical and scientific expertise, and I noted for example, DFO's abilities here in Nova Scotia, mind you that seems to be a little bit less than it was when I made this list and National Research Council's Institute for Marine Biosciences, as well as several universities who have great expertise in marine biology. We have a well-trained professional work force in Nova Scotia. There are degree programs at the bachelor, master and Ph.D. levels that include study in aquaculture. The Ag College has their bachelor in aquaculture now that is fully entrenched. We have technician programs at the Nova Scotia Community College system.
We were discussing earlier that there is a study, which I haven't actually been able to get my hands on, but apparently it was done a couple of years ago, that indicated the large majority of people who come into this industry and are marginally successful in it have above-average educational levels and technical expertise. That workforce is here and is well trained. We have international transportation links that allow a product to be on the other side of the world within 36 hours, which puts us in good stead for the European market.
But we have a number of challenges as well, one of them is the competing use of marine resources. We have a lot of coastline but we have a lot of people who use that coastline and we have to fit into an overall strategy of allowing competing uses. The international aquaculture industry is developing at a much faster pace certainly than we are, and the effect of that on markets is felt on every fish farm in Nova Scotia.
We have had a problem in Nova Scotia with the chicken and the egg thing. You can't get markets until you grow enough product and you can't grow enough product until you know you have sales for it. We have struggled with this inability to grow to a production capacity which allows us to fill major markets, which means we are now price takers as opposed to price makers, and relegated oftentimes to try to find small niche markets because we just can't compete in a larger market place.
One of the challenges we face on a daily basis is government policy inaction, that just doesn't take into consideration what our industry is all about. We talk a lot about what is the role of government in the development of our industry. In sort of looking at this in a philosophical way, we feel that the role of government in the development of any industry should be to create a positive climate in which entrepreneurs can build successful businesses.
Some of the ways that this could be achieved in a lot of industries including ours, is by asserting both in declaration and practice that the development of the industry is indeed a priority; assisting with the financial environment by providing appropriate funding programs designed to assist an industry in its developmental phase and by creating a favourable tax situation; working to streamline and improve the regulatory climate within which the industry must function; supporting immediate and long-term research and development projects; providing extension services to achieve technology and knowledge transfers; acting as advocates or cheerleaders for the industry within government and with the public; working with industry to create long-term development strategies; gathering and disseminating market intelligence; and assisting with the development of new markets; and supporting industry associations.
In other jurisdictions, governments are doing this by providing programs, largely through industry associations to support farms in their start-up phase and carrying out required and relevant research. I think some of the articles that I did provide in the information packet give an overview of what is being done in other areas.
We have also thought about what you as a government and as individual MLAs might be able to do on our behalf and we have come up with a couple of concrete suggestions. If the government of this province is serious about aquaculture, as a lot of the literature would lead us to believe, it must make it a government priority as opposed to a departmental concern and allow appropriate resources to be allotted to it. The federal model, if you will - mind you, I am going to talk about the model and not the practice on this side - has been to decide that aquaculture is, indeed, a government priority not just to the Department of Fisheries and Oceans and has set aside a budget to hire a Commissioner of Aquaculture Development, recognizing that there has to be someone to see the industry through the maze of different government departments and agencies with which it is concerned.
A couple of concrete examples have been brought to our attention in meetings we had recently. There is a lot of frustration by farmers who go to Department A, whatever it might be, Economic Development, Environment, whatever, only to be told this is a Fisheries issue. We in the industry don't believe that anything we do is simply a Fisheries issue, it is an aquaculture issue and it is something that is broader than one department.
In addition, I think government must be prepared to make a commitment to this industry in the long term. The problems that we will be dealing with, I guess when we get talking a little bit more, and some of the challenges we detailed earlier in the presentation are
not the result of one government or one administration. We have a 25 year history of trying to develop this industry in Nova Scotia. It has been the flavour of the month, if you will, five or six times over that period. If you actually graph development in the aquaculture industry or interest on the part of government, regardless of who was in power at the time, I think you will have a very correlated graph that goes like this. There has never been sustained development, there has never been sustained growth.
We are also concerned with the emphasis that seems to be emerging of bringing in new, as opposed to servicing existing, businesses. We have farms that have been in the water for 20 years or so and they feel the need for services and assistance just as much as a new farm might.
We believe that the role of government is to work with industry to set the development agenda but not to try to pull industry to a bureaucracy determined direction. As I have said many times, bureaucrats aren't farming fish. So if they are making projections without talking to the people who farm fish, then those projections are doomed to fail. Only the people who actually have the fish in the water, the shellfish in the water, their homes and their kids' college funds on the line can really make the determination of what this province can do in the next three to five years.
As I have stated earlier, I believe government must work to create a positive financial and regulatory climate within which industry can build profitable businesses, which in turn will create wealth and employment in rural and coastal communities. That is where the bulk of aquaculture is going to happen, in rural and coastal Nova Scotia. There will be support jobs created in more urban centres but the direct jobs will be created there.
Aqua farming is over-regulated in this country and it is preventing investment. This is according to a recent study carried out by the Canadian Aquaculture Industry Alliance, sponsored by ACOA, the Western Diversification Fund and DFO. In Nova Scotia, there are some 14 government departments and agencies involved in the leasing process alone. With the numerous layers of governments, bureaucracies, regulations, user fees, et cetera, it is really a wonder that a fish farm ever starts up.
If we were to make clear cut recommendations to you today, there would really be three of them. This may be a bit repetitive in terms of what I have already said but the first one: that the government has to declare the development of the aquaculture industry a priority for all departments and make a long-term commitment to that.
There has to be more involvement, in our opinion, of the Agriculture Department in aquaculture. We are recommending a liaison officer within the Department of Agriculture and Marketing to work on aquaculture issues. There is a real knowledge there of how to assist the development of a farming industry that we don't have access to at the present time, again, because it is a fisheries issue. Extension services for both technical and business needs,
proactive veterinary service, appropriate marketing assistance, all of those exist and would be accessible to us if we had some sort of a formal link. Aquaculture is not a fishery. It has much more in common with farming and therefore we need to get some sort of formal link.
The third recommendation and final recommendation that we would make is a financial commitment to the industry. I will agree with anyone who states there has been a lot of money spent on aquaculture in Nova Scotia. There is not a lot to show for that. A directed development fund similar to the one that has been set up in Newfoundland, which you have information about in that package, would go a long way in developing the research and support infrastructure required. There are a lot of questions. Every year that you grow fish you get new questions and the ability, if you will, to come up with new answers doesn't exist any more. With the loss of the economic diversification agreement for funding, projects that we have brought forward, we are now losing farms to new fouling, new diseases, that we as an industry and certainly the Department of Fisheries and Aquaculture does not have the resources to address.
So that is the end of our formal presentation, if you will, and we would certainly welcome questions and discussion.
MR. CHAIRMAN: Thank you very much, Marli. Some of our committees use different formats but being that we have a few members that are absent and if we can take our turns, if the members are agreeable to that, I will try to make notes of who has any questions and it would go in order as I mark them down. George, did you have a question for Marli?
MR. GEORGE ARCHIBALD: If I could, Mr. Chairman, I think everybody should be very happy with your rule. Thank you very much, I enjoyed your presentation a great deal and I do agree with you that aquaculture should be part of the Department of Agriculture, not part of the Department of Fisheries. Growing fish is very similar to growing chickens. You have the same disease problems, you've got the same intensive management that you have in agriculture and I wholeheartedly agree that it should be there. Can Nova Scotia aquaculture grow to be as large as other provinces with $100 million annually?
MR. MUISE: I firmly believe it and have always maintained that it could and, particularly, with the new opportunities. I think we have lost the opportunities as far as salmon. Certainly salmon was the big species a few years ago. We have lost that opportunity because other countries around the world have jumped into that market, filled a niche and now control the market place, Scotland, Norway, now Chile. So salmon has become an international commodity but there still is an opportunity to gain a real competitive edge and competitive advantage and a head start in some of the marine finfish species.
MR. ARCHIBALD: What's that?
MR. MUISE: Marine finfish species, such as halibut and haddock, that sort of thing. We have the environment for it. We have the natural resources that serve as food stuffs, the waste, you know. We used to talk maybe a bit idealistically 15 or 20 years ago about the future of aquaculture in this province and we could see not a drop, not a pound, not a gram, of waste product coming out of our fishery, that every ounce of what we now dump back in the ocean, every ounce of herring, scrap fish, viscera, be turned into high protein fish food for the rest of the world. That has never happened.
MR. ARCHIBALD: Can you do that economically?
MR. MUISE: Not at this point with the new finfish species but we couldn't do it with salmon 20 years ago. We couldn't do it with mussels 15 years ago. We can now. These new species are in development and internationally there is a global race on right now to be the first to commercial the cold water marine species and we are part of that. So, yes, I am still very optimistic after all these years.
MR. CHAIRMAN: John, any questions?
MR. JOHN MACDONELL: Yes. I am assuming if I look at the traditional fishery, then I would assume that what we produce in the aquaculture industry would only be a drop in the bucket compared to what the trawlers and so on would be doing in volume?
MR. MUISE: Yes.
MR. JOHN MACDONELL: So it would tend to make me think that globally with populations increasing that there should really be a market there that is a long way from being filled. Am I wrong in that perception?
MR. MUISE: No. If you want to look at the big picture, I do a lot of teaching in the wintertime and the one telling trend line that I use has been produced by FAO, the World Food Organization, that pretty well indicates that harvest of wild fisheries product has peaked at about 100 million tons. There will be some up and down with that but it has peaked. Yet, the demand is going to continue to grow for fisheries, fish-based products, at about 20 per cent per year. So, where is that going to come from? That is going to come from aquaculture. Aquaculture, internationally, has been recognized as the source for that increased demand, to service that increased demand. From the big picture, that is what the globe is looking at, many countries in the world.
[1:30 p.m.]
MR. JOHN MACDONELL: I am also curious about, I am not sure what they refer to as, whatever the offals or whatever waste in the industry that could be turned into food. Is that the only potential for food? Is there a way to produce fish food other than from the present fishing industry?
MR. MUISE: Yes, in fact, I had a discussion last night based on two companies looking at some other products. I would like to make two other points, if we could just back up just one step before I answer that one. You talk about aquaculture never really meeting, possibly or perhaps not possibly, the supply that can come from offshore trawlers. In fact, if you look at the statistics, the salmon industry in southern New Brunswick, which grew from nothing in 1980, has surpassed in the value of the landing of groundfish in southwestern Nova Scotia by 1995.
The catfish industry in the southern United States, which has employed vacant cotton land with the shift in cotton production to offshore United States left a lot of vacant bottom land in the Mississippi Delta, land which was burnt out from traditional agriculture, the value of that industry now far surpasses the entire groundfish landings for Nova Scotia and New Brunswick. Actually the entire groundfish landings here is well over $1 billion.
MR. ARCHIBALD: What do they do, just flood the ground?
MR. MUISE: They do, huge ponds. A pond up here would be one-half acre, down there they would be 15, 20, 30 or 40 acre ponds.
MR. CHAIRMAN: Usually for catfish.
MR. MUISE: Catfish, yes. So, the capacity has been proven and it is sustainable. There have been dramatic international failures such as converting land into saltwater ponds for shrimp production but there are successes out there as well. Those are two examples that I throw out to you that aquaculture has demonstrated that given the right conditions, it can be a very significant producer of high-value, high-quality products.
Now, getting to your other question about supply of materials for conversion. The waste products from fisheries was one we had always looked at as providing us with a strategic advantage here in Nova Scotia. In fact, the move nowadays, based on a great deal of ongoing research, has been to move away from animal proteins and more towards plant proteins and feeding of trout and salmon, that sort of thing. The animal-based proteins, fish meal, fish offal will continue to play a significant role.
MR. JOHN MACDONELL: I am just looking at the possibility of developing another industry in association with the aquaculture industry, and if there was a way that you could grow something that you could feed fish and I can see that the public would be more and more inclined to see that every scrap of anything is dealt with in the most proper of ways, where there won't be tons of fish thrown overboard or whatever regulations had fostered that in the past.
The graph, you had mentioned there seems to be growth in the industry when there was interest in government, I guess what I am wondering is . . .
MR. ARCHIBALD: You got two questions, I only got one. He likes you better. (Laughter)
MR. JOHN MACDONELL: Oh, I thought when you interjected . . .
MR. ARCHIBALD: Oh, you thought that was a question? (Laughter)
MR. JOHN MACDONELL: What I am wondering is, where have you stopped. If you started here, in interest, and so on, have you just stopped over here at the same point, or has the graph gone like this? Is it at all increased?
MS. MACNEIL: I think the up and down has not given a net increase. Where we are right now would be difficult to judge. The industry is often the last one to know what is going on in government and where support is and what the trends are. We are not privy to a lot of those discussions. There has been work done recently on what are the winners and what are the losers in the industry. Well, it was done without industry consultation for the most part. I think every time we go up and down, there are casualties and there are successes in that process.
What has not changed is the knowledge base. I would add to your thought that maybe we could have a sister industry, if you will, growing food. I think we also have another industry potential in Nova Scotia, exporting knowledge. We have incredible amounts of knowledge in this province on how to grow fish. It is recognized internationally. I went to a conference several years ago with the then president who also started out around the same time as Brian did. I was new to the industry and I could not believe the number of international names, that I had read in books trying to teach myself about the industry, they kept running over to shake this man's hand because they theorized about most of the stuff that he was actually doing and he was a hero to them. That is not abnormal in Nova Scotia's industry. So we have all of that service residual, if you will, but we have a lot of bankrupt people.
Every time you go down that slope the banking community loses confidence. The community loses confidence. I am from industrial Cape Breton and I will tell you the Devco model of development never worked and it's not going to work now either but there were fish farms there that changed hands five or six times. So my impression of aquaculture living in the community was not a positive one because you would get the announcement and everybody would come in, there would be jobs created and then a year or two later there's an empty building again and somebody would come in the next time aquaculture became interesting.
So those are sort of the negative legacies that are left and there are personal tragedies that you have to deal with. This is something that I have to deal with on a regular basis of the person calling and saying I am shutting down the farm. It's for sale. I lost everything, you know, literally to the point where the kids can't afford to go to college this year. We lost that. So you kind of have to look at the bigger picture so we don't lose everything but we lose a lot every time we start down that slope.
MR. CHAIRMAN: Perhaps after the meeting we might have a discussion on how we want to proceed, do we agree to do it this way. If the members are comfortable with it, then we will continue. If you want to have time-frames, then we will do that also. Gordon, you had a question?
MR. GORDON BALSER: Yes. With 120 members, how does that correlate to the number of people actually involved in the industry? Is that pretty representative? Is it cross sectional? Are there people who could be members of your association if they so chose?
MR. MUISE: Yes, it's open and provided you are somehow a participant or a supplier to the industry. Now, the core board of directors, we have changed policy in the last couple of years, those are drawn from actual producers but a number of our members, it also includes suppliers to industry. There are people supplying buoys, ropes, nets, feed stuffs, that sort of thing. They are also industry members, also academics, people in the research community but with the core, the association has now become a producers group.
MS. MACNEIL: If I can add something, we do represent, according to our last statistics, approximately 90 per cent of the production. So there are growers in the province who choose not to join the association. However, we have made it a conscious corporate decision, if you will, that whether they have paid their dues or not, we represent them. So if an issue comes up that we feel they should know about, we will tell them. If we are putting on a training opportunity, we will invite them to that workshop or meeting. We make every effort to make sure that we know we speak for the industry and we can demonstrate that at any opportunity. So you might not pay your dues and in most organizations that would mean you didn't really get to have a say in what is going on but we are very conscious of the fact that these are small business people who for whatever reason don't feel comfortable in being
part of a group, or have had bad experiences in the past, whatever, but when there is a policy or something major that they should know about, we make sure that they are involved.
MR. BALSER: What would it cost to join your organization for a year?
MS. MACNEIL: The fee structure starts with a sustaining fee, if you will, which we make the big guys pay and that is $300. For the normal fish farm it would be $150 and for supporters/academics, $110. Students can join for $40. That is an annual fee.
MR. BALSER: I have a second question that leads out of that. You indicated there are 100 farms currently in operation. There are 375 leases that are presently being held. Is there a fair amount of lease speculation or do people hold multiple leases? What is the reason for that?
MR. MUISE: Well, the lease situation is a bit of a mix. There has been a traditional leasing system in this province for well over 100 years I think and, particularly with oyster leases along the North Shore and the Bras d'Or Lakes, that makes up almost 200 leases, if I remember correctly. It has been a year since I looked at that but these were part of traditional holdings, part of sort of the subsistence agriculture social system that we used to live in back at the turn of the century. Many of those leases are still held and most of them not worked. That is common throughout the Maritimes here. It is not particular to Nova Scotia. New Brunswick and P.E.I. also have hundreds of leases underutilized.
With the new interest in aquaculture, which began in the late 1970's and particularly during the late 1970's, there was a huge speculative rush on leasing and lease areas, when people were strictly speculating, on no biological basis, with no basic research into the quality of those leases. In fact, that is when I was with the department, and I think it was one of the reasons I ended up leaving the Department of Fisheries. It became insane, and my family reached the point of saying, either get out of this or do something else. There are 1,700, 1,800 calls and inquiries and applications a week; I have actually seen applications come in for every square acre of water from Ship Harbour to Guysborough.
In any event, the Department of Fisheries cleared up most of that nonsense and evolved a system over time, but more recently, you see a core group of producers very actively pursuing the purchase of existing leases and/or acquiring new leases to try to get enough area to become a productive unit, an economically viable unit. There are scattered small producers, there are quite a number of vacant leases, underutilized leases - maybe I should put it that way - which the Department of Fisheries is apparently working to either enforce folks to make them more productive or to turn them over to someone who will make them more productive. There is a consolidation taking place now, slowly.
MR. BALSER: Further to leases, it seems to me that in any kind of industry like this, there are prime locations. If the prime sites are now being held by people involved in aquaculture, does that prohibit someone else, or do they have to take marginal sites to get in the same industry? Do you see what I mean? I am in it first and I have access to the prime sites, whether I am using them or not, how long do I hold my lease and how do they change hands?
MR. MUISE: The Department of Fisheries is putting a great deal of pressure on people now. You are talking, I think, less than two years. They give leaseholders who are underutilizing leases by some definition - I am not really clear of yet, but underutilizing leases - I think they get a year to submit a development plan and a year to apply it. I think that is probably quite workable, because it would certainly take you that long, say in the mussel business, to develop the lease.
You are right when it comes to something like salmon leases. One of the big restrictions in the salmon industry is you must locate in a site where you can over-winter fish, because it is longer than one growing season to produce a large salmon. One of the reasons the industry did grow so fast in New Brunswick was because they had found a fairly extensive area, maybe a few thousand acres, where salmon could be safely over-wintered. Those similar sites exist here in Nova Scotia, but very much smaller in scale and they are scattered.
You don't see the high concentration of 20 to 30 farms in Nova Scotia that you saw in New Brunswick, you will see a couple in the Annapolis Basin, one out on Saddle Island in the Aspotogan Peninsula, one in Cape Breton, and that is an environmental restriction, that one. Probably the most intensely sought after pieces of water have been salmon over-wintering sites, and that has taken place over the last 10 years. Most of the existing areas have been used up and are being utilized. I don't think you will see a vacant salmon lease. It is too valuable.
MR. CHAIRMAN: Mr. Samson.
MR. MICHEL SAMSON: I'm just curious. What is the relationship between your organization, the Department of the Environment, and environmental groups throughout the province and outside of the province, like the Sierra Club and other groups of that sort? What kind of relationship is there, what kind of flow of information goes between yourselves and those groups?
MS. MACNEIL: There isn't a formal relationship with any of those groups. We, as an industry, watch with great interest and great fear at what has been happening on the West Coast, in terms of conflict between environmental organizations and the aquaculture industry, which has basically brought their industry to a standstill, and then, I guess, more recently, some similar-type discussions in New Brunswick, where the David Suzuki Foundation, for
instance, is taking out full-page ads in New Brunswick newspapers criticizing the industry. This is a major issue.
I related it to the board a couple of weeks ago that I was watching a CBC Newsworld documentary, and they were interviewing someone, and this had nothing to do with the story, but behind the person who was being interviewed was a sign that said: Friends don't allow friends to eat farmed salmon. So there is a very major international environmental outcry, if you will, against aquaculture, especially finfish farming. We decided to be very proactive here.
We have the luxury in Nova Scotia of being so small that no one really notices that we are here. That does give us an opportunity, if we are able to access resources, of getting our house in order, if you will, before information starts being requested and before sort of jaundiced eyes, if you will, are turned our way.
We entered into a program with the IRAP program of NRC which is a technical assistance program, to develop an environmental code of practice for our industry. What this is, quite basically, is best practices, what is the best way to interact positively with the environment. It is something that is in process. We anticipate having a draft ready during the winter months when it is easier to consult with our industry. They are a little busy to talk to us these days. What we are hoping to do is - I guess there are three reasons for doing this. The first reason is education of our own industry. A lot of people make mistakes simply because they don't know that there is a better way to do something or they don't know what they are doing is wrong in the first place. To demonstrate best practices, improve the sustainability of our industry by ensuring that our sites are utilized to their best capacity, not beyond their capacity. I guess thirdly is to create a public relations document, if you will, that will allow us to enter into positive discussions.
I do have discussions with the Department of the Environment on various occasions. They are mostly issue-based but I did check with them and consult with them before we entered into this process of developing our own code of practice and they felt this is a very positive move although the government tends toward regulation. They also realize they don't have resources, really, to enforce regulation and they would much rather see an industry come forward with a plan of activities that we not only are agreeing to but believe in. That makes their job so much easier.
MR. SAMSON: My next question is, I guess, along the same sense of relationship of the organization. What is your relationship with inshore fishermen? Let's say I want to set up a steelhead trout farm down in Richmond County. Does your association make it available to new entrants that yes, we will come down, we will meet with local fishermen's organizations, say, here are their concerns and say here is where we have done this research, here is where we have been in the industry. It seems that that message would be much better received if it came from someone like your organization instead of government because fishermen don't always trust government officials . . .
MS. MACNEIL: Neither do fish farmers.
MR. SAMSON: . . . with justified reasons. I am just wondering, what is the relationship there. Is there any contact with the inshore fishermen and do you assist new entrants who are trying to get into the industry?
MS. MACNEIL: We have assisted, we don't have formal relationships with any of those organizations but we have fairly consistent discussions, if you will. We are often in the same boat when an issue comes from DFO or from the Nova Scotia Department of Fisheries and Aquaculture; we often get together, as organizations, to talk about those sorts of things. We have, in the past, assisted people who are trying to get leases, who are trying to set up operations and we have also stayed away from those. I think it depends on a couple of issues; first of all, if the farmer wants us involved because oftentimes a controversy that may arise is best solved, if you will, within the community because this is primarily a community decision. Do you want to have an aquaculture industry or don't you? While an inshore fisherman may not trust people from government and any department, small communities also don't trust people coming from Halifax to tell them what to do.
So we have been very open to going in and helping people, certainly providing people who are getting ready to proceed to a public hearing or a RADAC committee meeting with a lot of information so that they have some statistics. As I mentioned earlier, we do computer searches quite often, if you need information. It always depends on the person making the application, if they feel they want that kind of interest on our part.
Having been involved in these situations - I have been with the association almost four years now - the board has decided and I certainly concur with that, that it is very difficult to get involved in a one-of situation, especially if there are competing farmers looking for the same sites, for instance. The association shouldn't be caught in any kind of a controversy between two potential members. So we are very careful to support as much as we can, give lots of information but not sort of go the public route unless it is requested and warranted by the board's view of this, I guess. Is that the best way to discuss that?
MR. MUISE: Could I just maybe extend that thought just a little bit?
MR. CHAIRMAN: Certainly.
MR. MUISE: There is another aspect to that subject area you are hitting on, Mr. Samson, which I have been keenly involved in now for 20 years. As I said, I earn a portion of my living by doing teaching and for the last six years, through the regional industrial training committee. Invariably, I find myself, over the last couple of years, sitting at meetings with more and more fishermen looking at possible opportunities in aquaculture which was a complete change from 10 years ago. We would never see anyone from the fishing community. It brings up this whole question about why haven't more of the inshore fishing community
gotten involved in aquaculture? I still can't answer that. I think part of the reason was it was never perceived as a need until a crisis hit.
If there is another observation I can make is that the difference in mindset between a wild harvester and a farmer is far greater than most of us fully appreciate. The entire thought process, the entire paradigm in which they work, in which they view life, is so different that that is a difficult step to make. I think we underestimated that in our training and education programs. It is something I have tried to address and that is a whole subject area we could talk for hours on. But just to make a point, I think it is a bigger issue than what I think you just initially opened up there and it is a fascinating area; a lot of work needed, I think.
MR. CHAIRMAN: Mr. Archibald.
MR. ARCHIBALD: Thank you. (Interruptions) This committee may have an opportunity to make a difference in your industry. You made some very strong recommendations, government priority, some kind of a liaison with agriculture - extension services, primarily, I think from agriculture is what you need - and financial. One of the questions that I have now, is there a government body where you borrow money, like a Farm Loan Board or the fisheries, which one do you use?
MS. MACNEIL: Fisheries. It is called the Fisheries and Aquaculture Loan Board now.
MR. ARCHIBALD: I think this committee could have an opportunity to make some recommendations to the government. Now whether the government adopts them or not, there is nothing we can do about that but as a committee. I think we could make some recommendations along the lines you are suggesting because I think aquaculture has been overlooked for a long time. It shouldn't be but it is. The government is now paying lip-service to it with the Agricultural College involved, granting a program, fisheries and aquaculture. It is now in the name of the department.
I think there is more potential than exists today and if we, as a committee, could adopt the recommendations that you have made and recommend to the Legislature that these things take place, I would think the government may listen and act upon them. However, I think it is going to take quite a bit of work on the part of this committee to get to the point where we can make the recommendations that the government make this priority for development because it is in rural Nova Scotia and that is where we need development. I see nothing wrong with the extension work being done by the people that have been trained and have been doing it now since the 1930's. In financial, certainly we all know that it takes money to get into this business.
So to the committee members, I am wondering if they would be interested in pursuing these challenges that have been put before us and could act upon them in a quick and decisive way so that in this fall sitting of the House we could, as a committee, or the chairman could make the recommendations through the Legislature and perhaps it would help make your industry grow. Now would that be something that your industry would appreciate this committee doing? It is nice that you are here but if I go home and have supper tonight and everybody else goes home and has some supper tonight, tomorrow morning we will meet with another group and we forget about you. I mean it is nice to know this stuff but it is not going to do you any good.
MR. MUISE: If I might just comment on that. We made a recommendation that we need a far greater liaison with agriculture and the agriculture mentality. Agriculture can contribute a great deal to our industry. This is a subject of ongoing debate within our own association.
Myself, having a background in government for a fairly lengthy period of time, I have always been preaching the danger of moving, let's say, wholesale into agriculture, simply because we are implanting ourselves within fishing communities within the jurisdiction of the Nova Scotia Department of Fisheries and particularly within the jurisdiction of Fisheries and Oceans Canada.
One of the biggest fears I have always preached to our own membership is that if you think we have got tough times now, try to completely exclude Department of Fisheries and Oceans. Department of Fisheries and Oceans has the ultimate hammer.
Department of Fisheries and Oceans can come in - they have the Fisheries Act and under the Fisheries Act, there is a clause in there - I cannot remember which clause it is - where they can actually stand on a no-net loss of habitat, zero loss of habitat to fish and that could be short term, long term, it doesn't matter. It depends how they wish to interpret that clause.
I've been in a situation with provincial Fisheries in the past - 15 years ago, albeit - where DFO folded their arms across the table and said, if you wish to see aquaculture development, you demonstrate to us that there is absolutely no negative impact on fisheries. It can't be done, and that delayed development for several years.
Getting beyond that argument and actually allowing DFO to get a foot in the door and have some responsibility in aquaculture, it was a huge step in getting this industry to move forward in this province. It was never a problem in P.E.I., believe it or not. While DFO is issuing leases wholesale in P.E.I., just 7 kilometres across the Gulf, in Nova Scotia there was a no-issuance order in place. It was just one of the bureaucratic stumbling blocks we got over.
When we recommend a closer tie to agriculture-type systems and agriculture paradigm, we don't have the - at this time we haven't thought that is where we could actually recommend a solid mechanism. What I have always said is that what we need is the mindset, the paradigm, the financial models of agriculture and the knowledge background on agriculture management systems. We also need the social support of the fishing communities and we need the support of Fisheries and DFO, vis-à-vis the environmental impact, the impact on fisheries, that sort of thing.
We are talking an activity which spans several jurisdictions and I think that starts to speak to the heart of the matter while we are sort of getting tied up in bureaucracy. We very often find ourselves tied up in bureaucracy.
MR. CHAIRMAN: I think if I could just pick up on one thing Mr. Archibald has said, I think he is asking as to whether or not your association would feel that if the committee focused on that and brought forth some recommendations and that is only provincially - I appreciate what you are saying about Department of Fisheries and Oceans but we don't have any jurisdiction in that forum, but would your association feel that that is something that would serve well your organization?
MR. MUISE: Sure, I think so.
MR. ARCHIBALD: See, one of the things you mentioned is there are 14 places in government you have to go when you want to start a fish farm. That would drive me crazy. It is just nuts. If we could even sort through those 14 and shut it down to about 3 steps, where you have to ring the doorbell, open the door and then you're at somebody's desk, that is about as far as you should have to go when you want to start a business.
It is as frustrating as the devil, the paper you have to follow along, the letters you have to write, the people you have to see. If you are trying to involve half a dozen different departments, cripes, all you need is two people out on vacation and you are tied up for two months. It just drives you nuts.
There is no need for half the questions that the bureaucrats want to know answers to. There is no need for half the things - and sometimes you are answering the same questions three or four times.
Perhaps, if we could find out more about the difficulties people are having setting up the industry, we might be able to help make some recommendations to government that will eliminate most of the 14 steps. I am sure there has got to be duplication after duplication.
Most of the time you are dealing with bureaucrats who probably would like to be doing something else anyway. You know, they've all got other things that they would rather do. Personally, I would like to know what these 14 steps are and how we can shorten them
down to two or three. If somebody wants to get into business, I think we ought to open the doors for them, not close the doors.
MS. MACNEIL: I think, if I could respond a bit to that, I certainly appreciate your comments about assistance in that area. To be fair to the Department of Fisheries and Aquaculture, a number of years ago they took that on as a challenge to try to improve the leasing system. I think Brian has alluded to that, that it is much better than it was.
There are a couple of challenges that we run into and the first one is that this is a jurisdictional situation, where there is federal jurisdiction, there is provincial jurisdiction, and then there are a number of agencies in both of those groups that have jurisdiction.
[2:00 p.m.]
So while most of the legwork, if you will, has been undertaken now by the Department of Fisheries and Aquaculture in moving those leases through the numerous steps they have to go through, at any one step in the situation, it can bog down. We have had examples of farms that have been approved by the province, leases issued, licences issued, the farm gets up and running, two years later they get a call from Coast Guard, you are on an illegal site, we never approved that.
We have a situation now where the Department of Fisheries and Oceans requires a permit every time you move a fish from point A to B within the province. It is a cumbersome paper trail for which we can't find a reason. There is no one to interpret information. There is no body of information there to determine whether a permit would be actually approved or not, like what grounds would it take to actually disallow a permit, we don't know. But it is a requirement. That is one of the chores we have come into.
I think if you look at aquaculture, there are really two very distinct parts to our industry. One is that regulatory licencing part, which the Department of Fisheries and Aquaculture, as our lead agency has a good handle on. As Brian said, you need to be in that milieu, you need to be dealing with Fisheries and Oceans and all of the other so-called agencies and lead agencies constantly. Then there is the other thing that happens the day after you get your lease, and that is development, which the Department of Fisheries and Aquaculture really is not geared towards. It is geared towards the regulatory side.
So if you were looking at a split, if you will, that is where we really need agriculture's help. That is their business, they don't have regulations. I was quite amazed to have this explained to me one day by the deputy minister. Their regulations all reside in environment, and that is who, sort of, controls agriculture as such, whereas our industry, it is all in the same place. Sometimes it is like showing up for a court date and your defence attorney is the guy that arrested you. Sometimes it just doesn't work very well. It is that sort of thing that we are trying to address.
In terms of the 14 agencies and people that need to deal with the leases, that is simply because no one can let go. Everybody wants to have a piece of this. Some agencies really do need to be there, others you kind of have to question. DFO and Coast Guard, for instance, are the same organization now, it is just that nobody told Coast Guard, so you have to deal with them separately and go through that paperwork.
MR. CHAIRMAN: I have just a couple quick questions I would like to throw out, if I could, and one of which is, you talk about the values of landings and you mention New Brunswick has $125 million and we are $15 million. I guess, I always look at it and say, well, how much of that really is economic activity that is a net gain to the province, because I ask myself how much of that is feed, is that accrued to the Province of New Brunswick. I look at $125 million worth of landings in groundfish, and how much of that actually ends up in the pockets of Nova Scotians versus $125 million of landings in salmon and saying, well, how much do people take home at the end of the day, and we might be surprised at how little goes into it?
I am asking, has anybody sort of quantified, the sales are great, what I am asking is, what is the net?
MR. MUISE: Those are farmgate sales. That is sales to the farm, then if you want to know how that is dispersed, then you get into ownership. Certainly, there are several large international corporations situated in New Brunswick, and I don't want to be held to this, but I would think of the 28 farms, I would suggest to you, probably six or seven are held internationally, the rest are all locally, home-grown, home-owned companies from New Brunswickers; in fact, one of the most successful is a neighbour of yours, Chris Saulnier, a young fellow who happened to be over there . . .
MR. CHAIRMAN: From Pinkney's Point.
MR. MUISE: Yes. From Pinkney's Point, who happened to be over there, saw the opportunity, grabbed a lease, and it is now comfortably ensconced in the aquaculture business, and now looking at coming back home and bringing some opportunities with him. I think the proportion is something like that.
There are certainly international interests there, but I would suggest to you that certainly if you go to St. George, New Brunswick, if you just want to look at the impact, the St. George, New Brunswick, Back Bay area. When I worked out of St. Andrew's in the late 1960's and 1970's, Back Bay was sort of the brunt of jokes, that was the area of highest unemployment, it was the southern most tip of Charlotte County, and everybody told Back Bay jokes, the way we tell Cape Breton jokes and Newfoundland jokes, or whatever, Back Bayers. It is not Back Bayers, it is the highest level of employment in the Province of New Brunswick, directly as a result of salmon farming.
MR. CHAIRMAN: I guess the bottom line, if I could, like how many jobs has it created? I am sure someone has probably done that. It would be good for us . . .
MS. MACNEIL: Five thousand jobs in Charlotte County is the largest, as Brian mentioned, employer in that region of the province. What has developed is not just a fish farming industry, but it is the support industry, supply industry, that has developed around it. We are very careful when we look at our employment predictions for Nova Scotia. We are very careful not to include the same kind of multipliers because a lot of our farms are being serviced out of New Brunswick and we would have to get to a certain critical mass to bring that type of industry here, or to support that industry here. We have the details. New Brunswick has done a lot of planning recently and B.C. has as well, which shows that those 5,000 jobs are direct employment jobs in Charlotte County.
MR. CHAIRMAN: Can I ask a question? I know what I would like to ask and I am not sure whether you are in a position to comment on it. It is obviously the one that grows on the northern shore, this new major mussel farm that is being proposed and we are hearing a lot of different comments as to, I am not sure how many hectares this involves, about 2,000 hectares or whatever it is but a lot of people are obviously asking as to whether you need such an immense farm to make it viable. Their contention is it had to have the size quota. This is the largest mussel farm in Canada, if it would go through. So, obviously, if it is viable in other areas, why does it have to be so large here in Nova Scotia? I am sure a lot of the members here present around this table have had calls in this regard. I am sure, Charlie, you have had some, too. What does it mean? Are these megafarms the way that people are going? Is it necessary or isn't it?
MS. MACNEIL: We have not been involved in this issue. This sort of goes back to Mr. Samson's question. We have not been invited to be involved so I don't know anything more than you folks would know from reading the newspapers. This farm, my understanding is that the request that has gone in to the Department of Fisheries and Aquaculture will be a farm that is pretty well the sum total of the entire mussel production in Nova Scotia right now. We know that to be profitable, farms have to be able to grow steadily to meet their market demand, which has been a problem in Nova Scotia, as we have detailed the trouble of getting additional lease space. So, I guess if I was coming in to start a farm, I would be looking for something that will meet my future needs as well as my current needs and that may be why it looks quite large.
In terms of what size it has to be to be profitable, I can't judge that because we don't have one like that to look at. We have farms like the one Brian is working on and some of his colleagues and I guess the word would be, eke out a living?
MR. MUISE: I guess it addresses the issue of what you want by way of economic activity. One individual, depending on their own expectations of income from a business, could probably set up quite comfortably on 50 or 75 acres of water and make a living on
mussels. If you want, as this farm seems to be purporting to set up a central processing facility and maybe do some value added and employ 30 or 40, then you are not going to do that with the mussel production from a 25, 30 or 40 acre farm. You are going to need a lot more than that.
So, it varies with what level of activity you are looking for. My partner and I are beginning to make a living on about 50-some acres and we would like to have double that. If we could, I think we would be content and we would have a nice viable business on about 100 acres.
MR. CHAIRMAN: What is a processing plant? This is my last question. People say a processing plant, in my understanding of mussels, it is a live product. So, a processing plant to me is a grading, sorting, packaging. I mean people look at processing plants, you have this envisionment that it is almost like a production line where everything is being processed and canned and everything. So, to me, this is not a major investment into a processing facility that you would have to have thousands of acres to do it. Is my assertion correct, that it is basically a live commodity and basically just would be grading them?
MS. MACNEIL: Yes, washing, grading, debyssing and packing. So, it is a packing plant, yes. Again, it depends on what you want to do. There is a company that just moved into Mahone Bay that will go the value-added route and is taking wild mussel product and doing various frozen products, that sort of thing. So, there are extended product lines that can be developed but you need a certain amount of product to make that viable and that has not happened in this province yet. I think if you had a situation such as the Dockendorffs are proposing, those sorts of possibilities open up but for a very basic unit, yes, you are absolutely correct, 99 per cent of the mussel production in this province goes live sale where the mussels are simply washed, debyssed, graded, inspected, packed and shipped. So it is minimal, yes.
MR. CHAIRMAN: Mr. MacDonald.
MR. CHARLES MACDONALD: On the financial side, you're looking at financial commitment to aquaculture as one of the three priorities. Is that in research and development, is it in marketing or is it in sustaining the industry? Where is the greatest need?
MS. MACNEIL: What I had in mind was almost a bit of everything that you're talking about. If you look at the project, the $20 million development fund that they set up in Newfoundland two years ago, it is mostly loan guarantees for farmers, similar to what we have now but more of it through the Fisheries and Aquaculture Loan Board. It is investment in research and development, on the types of projects that are too big for individual farmers, or even groups of farmers to undertake on their own, but answer critical questions that will lead to the next stage of growth in the industry and I think it's also in helping access new markets and market information.
This is not direct handouts, if you will, to individual businesses. That has proven to be unsuccessful in every jurisdiction that it has been tried. There is some validity, I believe, in helping farmers who are trying new products, new technology, new ideas, by underwriting some of the costs and taking away some of the risks so it allows entrepreneurs to feel comfortable in making good business decisions as opposed to just trying to make do with status quo and not achieving any growth.
MR. CHARLES MACDONALD: If I may just follow up, are tax credits a viable alternative in any of that area?
MS. MACNEIL: Most of our businesses aren't making profits so tax credits aren't (Interruptions)
MR. CHARLES MACDONALD: It's a non-entity, yes.
MS. MACNEIL: We are looking for some tax revision, if you will; for instance, having fish farms treated in a similar way as agricultural facilities with resource-based taxation as opposed to commercial taxation. We're working on that one through the Department of Business and Consumer Services and enlisted the assistance of the Canadian Federation of Independent Business to try to make a business case for that. Tax credits really would only apply to the larger organizations which can pretty well sustain their own research and development. It's the little guys that we're having problems helping.
MR. CHARLES MACDONALD: Thank you.
MR. CHAIRMAN: John.
MR. JOHN MACDONELL: Yes, I have a couple of questions if I could. I'm curious, the bureaucracy you go through here trying to set up a farm, but I'm wondering, have you examined what other places do? Does it appear to be the same or different? You mentioned about the difference in P.E.I. already but I'm just wondering about B.C. or some of these other places. I mean the same department would apply federally and I'm just wondering, have they worked something out better?
MS. MACNEIL: Better, no; different, yes. In British Columbia right now there's a virtual ban on new leases, they call them tenures out there, because of the environmental concerns that have been expressed in hearings that have gone on. There's a lot going on there. In Ontario they have split aquaculture into two departments. There's the Aquaculture Department, whatever the name is, and Natural Resources. Leasing is done through Natural Resources. It doesn't involve DFO because it's mostly an inland fishery in inland waters and DFO is not involved. In Newfoundland it's a very different situation in that there is a push to get more leases. So a lot of barriers have been sort of brought down. It depends on the jurisdiction and it depends also on the amount of direct intervention, if you will, by DFO. It
seems to be the commonality. Where there are problems it tends to be DFO/Coast Guard that get involved.
MR. JOHN MACDONELL: I'm assuming that your view of the industry is that the marine species is where you would expect the major growth in the industry, or do you foresee that you can grow trout, or whatever, on land like they do with the catfish in the States and there's a market there that has not been filled?
MR. MUISE: Yes, I'm not very good at crystal ball gazing but if you want a bit of an educated guess on this one, and that's what we all do at this point, there's still growth opportunity in mussels. That's where I've jumped back in, just three years ago, mostly based on my observations of the market and what I see as a very steadily increasing demand and some particular competitive advantages we have here in Nova Scotia that other jurisdictions will not have and I'm trying to get a piece of that while it's still available.
Salmon, as I say, that's an international commodity now and anyone trying to move into the salmon business has got to be very, very sharp because you are dealing with very, very tight margins and increasing supplies. So if you look at real growth opportunities, I think there's still growth within the trout sector. The trout we grow here in this province is a phenomenal quality product. It's just we've never really been able to get it established in markets. It's more of a niche market and properly positioned we don't see this competing for salmon dinners. We see it as a different product altogether.
Globally the next big wave of aquaculture development is seen to be with one or more of the cold water, white flesh, marine fish species and that's where everyone is focusing. I would speculate at this point, in fact, I would be willing to put money down on this one, that it's going to be land-based rather than cages.
MR. JOHN MACDONELL: Is that right?
MR. MUISE: Yes, I think so simply because, for technological and control reasons, I think it is.
MR. JOHN MACDONELL: I was curious about that and I also, my last question, Mr. Chairman, is who is doing the research regarding reproductive technologies or the spawning of these marine species? I know salmon has been figured out long ago but I'm just thinking cod, halibut, et cetera, I know there is work being done there but I'm just wondering, is it moving in leaps and bounds or is it - that would be a major part of developing that industry or that part of the industry I would think.
MR. MUISE: Yes. In this province regionally, let's say there are some consortia set up to look at and to address various aspects of some of the stumbling blocks in spawning and hatching some of these marine species. There are consortia of private businesses in
partnership with groups like St. Andrew's biological station. There are other totally private interests here in Nova Scotia and New Brunswick who are doing their own in-house research. A number of government institutions, such as over at the Marine Institute in St. John's, Newfoundland, is doing a great deal of work and has been for a number of years. The National Research Council have now refocused their marine bioscience centre to look at opportunities in marine species. So there is a great deal of research going on in a number of different areas.
If you're a real risk taker and a private entrepreneur, there are a number of those people around who feel they can crack the nut at this stage but even if they do make some preliminary steps, we've been through the cycle with a number of other species and I can see them making a few false starts and falling back and having to be heavily reliant on support from well-versed and experienced government agencies. That body of knowledge is building. It is building on several different levels. I would speculate, personally, that the real breakthrough won't come for probably four, five or six years. I'm just guessing at this point. Unless someone gets a flash of insight or makes some observations that we're missing now, I don't think it will happen faster than that and if you really look at the growth cycle of these animals, even if they do crack it in three or four years, you're going to have to add three or four more years on for a growth cycle. So, you know, you don't have to mortgage the house tomorrow if you want to jump in but it's happening. It will happen a bit slowly. So we're into a little bit of a lead time here, I think.
MS. MACNEIL: If I could just add a comment to that. It is one of the areas and I guess history is repeating itself, we've been at the forefront of aquaculture how many times now and then somebody always ends up taking what we've done and using it to their advantage but we have the first commercial flatfish hatchery in Canada here in Nova Scotia and that is Sambro Fisheries in Sambro. They have been working with winter flounder for several years and they are ready to go to the next step and that is providing juveniles for grow-out trials next year. We have R & R Finfish in Digby County which has been working on halibut and is now working with a U.K. farm who sent over some expertise to bring them through that early growth phase because these are fish that we don't normally see until they are big. We don't even know what they look like in terms of small little things, and flounder that big is quite a fascinating little animal, but they are doing very well.
We probably will have another halibut operation coming onstream in the next several months. NCR, as Brian mentioned, is working with flatfish and is also doing a major project with Connors Brothers of New Brunswick, who made it pretty big in the salmon industry, on haddock. I think that is probably a very telling comment, that the salmon industry is looking for new products, because they know salmon has unlimited ability to grow, and haddock is what they are working on. There is a major project out at Sandy Cove.
There is a lot going on in Nova Scotia. We are building a knowledge base here. Our concern is that we actually have the opportunity to take advantage of that, instead of watching it go elsewhere.
MR. CHAIRMAN: Mr. Balser.
MR. BALSER: I am glad you mentioned R & R Finfish. To what degree is the government involvement, in terms of funding, necessary for aquaculture development? R & R is a perfect example, it is going to be five or six years before they have a product to market, and all during that process, there is the risk of loss through mortality or changing market demands, so on and so forth. My understanding is that they are looking at $0.5 million a year in order to keep their enterprise viable, and my knowledge of aquaculture, certainly in my riding, is that there has always been a substantial amount of government-funding support, either through loans or grants or loan guarantees. Is that the norm? And if so, I guess, to what degree is it the norm?
MR. MUISE: There have been a number of international studies done on aquaculture, looking at the global impacts and global opportunities, and invariably several factors have been identified as being keys to success. Either number one or two has always been the cost sharing of risk by the public sector to help get these industries off the ground. Second to that has been, ready access to home markets to allow you to make your mistakes in your home markets, before you export.
There are a number of other factors, but very near and always in the top three has been the cost-sharing of the initial risk. Keeping in mind that we are virtually reinventing automobiles or aeroplanes, and if you can picture in your mind what those machines looked like 50 or 100 years ago as compared to what we have now, that is essentially what we are doing. We have put our first toe in the aquaculture water here in Nova Scotia only 25 years ago. We are making steady progress.
If there is an underlying factor to contribute to get companies over that initial risk period, it has been the willingness to help. I was going to be a bit glib and say, is it necessary, absolutely not. There is no need for public funds, unless someone else is willing to do it and that has been the case. If you look at the development process, there is no need to put R & D money into private companies, let them do their own research, except that if we don't, New Brunswick will do it, P.E.I. will do it, Newfoundland will do it, the State of Maine will do it, the State of New Hampshire will do it, West Virginia will do it, Norway will do it, Scotland will do it, they all have done it and will continue to do it.
As Marli indicated, Nova Scotia was internationally known as an aquaculture leader all through the 1970's because we did a great deal of research. Where we failed was in applying that research. I guess what I am saying, not to be too glib, it is necessary because it is a highly competitive, highly risky and if you want to look at an individual company, let's
say, and this is taking place, there are individual companies behind closed doors funding their own research and keeping the results of that research to themselves, proprietary, rightly so. I can name several within this province who are doing that. If you envision this as becoming an industry, rather than just an individual company, which we have always stated, there are opportunities for rural development all over the province or all over the Maritimes, then the case can be made for assisting in early-stage development and R & D, provided those results are made open to the public. That has been a cornerstone of development to this date, well over Canada and in the East here.
MR. BALSER: If I could ask a follow-up question to that, but in terms of using the salmon fishery as an example, it is my understanding that a great deal of the technology and the innovations were developed here in Nova Scotia, in Canada, and then they are being exported to, for example, Chile, because the cost of production is so much lower. So they can put a salmon on the market for much less than we can put a comparable product on the market rearing in Nova Scotia. I can understand the concern of a company that spends a great deal of money in research and development, especially in the cold water finfish market, to see that expertise exported as a result of lack of proprietary ownership of the technology.
MR. MUISE: Yes, that is a huge area for discussion and consideration. The salmon industry is an interesting one. Most of the basic biological knowledge and technology was developed here in Canada on how to spawn, hatch and grow salmon, mostly within the government system to provide smelts for release and to re-establish fisheries, to enhance fisheries, that sort of thing.
That technology was taken to Norway in the 1960's and within 10 years, it converted into a commercial operation whereby they began growing fish in cages. In fact, the Canadian scientists went over and helped that start, not envisioning the cage component to the whole industry but to help these folks get their hatchery systems in place. Then once that became commercially viable, that technology, the cage technology was imported back to Canada in the early 1970's. So, it was one of those cycles. You are right, once these products become commodities, then the global pressure is on to produce these things and wherever they can be produced most cost-effectively. I think there was another point there. It slipped with me at this time.
MR. BALSER: That's fine.
MS. MACNEIL: There is another comment I would like to make on that. If you look at the farms in Chile, quite a few of those are farms left jurisdictions they were in because of the regulatory climate. I know a number of farmers who have business in Chile, both from New Brunswick and from British Columbia and the reason that they have gone there is the regulatory climate promotes aquaculture development. We had a situation a couple of years ago where there had been vandalism done to a net and the farm was basically losing all their fish. No one could decide what authority could actually go in and help stop the loss of that
fish, whereas in Chile, the navy would have been there because it had been established that this was enough of a priority for them that they protected their industry.
As part of the study I mentioned earlier that was done on the national regulatory climate, I was involved in the original conference, or working group of 15 people that started this process. One of the farmers there is now an owner of one of the largest farms in Chile. He would not have gone there, is not interested in new business there, is not interested in the climate there, except he could not grow his business in Canada. It cost too much. There is a dollar amount for every regulation that is there. We have recognized that. We have established that in the study but what I don't have is the actual dollar amounts and the remediation that is being recommended. It will be the federal government's BIT, which is the business impact test which is being applied to our industry as we speak.
MR. MUISE: There is one other very important aspect. I don't know why I let this slip but it is tired season, this is busy season on the farm. It is probably one of the most critical points I could make to you at this time and it brings up the issue of how time critical development is. As Marli pointed out, back in the 1970's, Nova Scotia was a world leader. In fact, the technology for growing mussels was developed here in Nova Scotia. All the initial protocols for putting salmon and the various trout species into salt water were developed here in Nova Scotia with funding through the Cape Breton Development Corporation. Most people forget those facts. What happened was, we missed the ball in applying that technology. So, now we are followers, not leaders.
One of the questions that always bugs me or one of the stumbling blocks is, you know we have not been successful in the past, what makes us think that if we solve a few technical problems with the marine species that we are ever going to become commercially successful? An essential element to developing this business is, once you find that technical advantage, exploit it commercially and hold on, because we are faced with now where many of our competitors were initially advantaged over us by great deals of public funding, during the early developmental stages which we lacked, they were initially advantaged by that, they made a gain on us ahead in the market place and now they are maintaining their lead through economies of scale and efficiencies and market presence and high-quality products.
So, this brings up the whole issue of just how critical it is that once you identify an opportunity that can be a real competitive advantage, the next step is you have to exploit that commercially. That is where we failed in this province. We have world-class research people here. We have provided the basic research to help this industry grow, here, in Norway, in the United States, in the Caribbean and in South and Central America. Much of it has been developed right here; the basic diets and the protocols have been developed here. We haven't been able to apply it. That is the key. You are getting to the heart of the question now.
[2:30 p.m.]
MR. BALSER: Why have we failed to learn from past experience? You are saying that it looks like the same thing will happen again. What can we do, as a government, or whatever, to ensure that we don't drop the ball this time?
MR. MUISE: Again, generalizing, Nova Scotia is wonderful, has demonstrated its incredible ability of bureaucratizing a wonderful idea. We are incredible at that. It depends on how you want to define success. Aquaculture has been a wonderful success here in Halifax because if you look at the number of jobs in the Department of Fisheries and Aquaculture, the Department of the Environment, DFO, ACOA, groups like that, that have been now pulled under the aquaculture heading, there are a number of well-paid jobs created. If you define aquaculture's success as being product and jobs created in rural areas, we have failed.
So, we have been very successful at having the very first Aquaculture Act or one of the ones in the world, certainly in the English-speaking world, we had a wonderful Act. Unfortunately, it didn't help development but that really didn't seem to enter into the equation, when the Act was developed. I took part in that and I was one of the initial people who drafted that Act, being naive enough to think that that was just one step in a process, not realizing that the process would stop there, that once the Aquaculture Act was in place and a legislative framework was there, that was enough.
Everything beyond that is the responsibility of private business, let it go. In an ideal world, private business should have been developing its own business but this is not an ideal world. This is a world of competing jurisdictions where people will bid to have companies come set up in their own home province. Governments will contribute to help people get through those initial stages. That took place in other jurisdictions. It did not take place here. That is one of the reasons.
Again, it has to do with this time criticalness. Back when salmon farming was first starting out or let's say mussel farming was starting out - I will use mussel farming because we have much greater opportunity in mussels in terms of the number of sites that could be developed. Salmon, as I told you before, were limited in the numbers of sites. Back when a company, and I use an actual example, came here from Holland to look at setting up a large shellfish operation in this province. At the end of three and one-half years of waiting for the licence to be processed, they came back to me - I was with the province at the time - and told me to take the application out of the system. We went to P.E.I. this morning at 9:00 a.m. and by 3:00 p.m. we had 400 acres approved. Our money will be going there as of tomorrow morning, thank you. We can quote cases like that.
Now that has improved. The licensing system has improved tremendously but the question has to be asked, why 15 years ago you could go to, let's say P.E.I. and get a license within one working day and it took 13 years to evolve a system down to where you can get
one within a few months? That is, when I say, the bureaucratization of a process or an idea, that is still a stumbling block and it remains to this day. I still leave the question, what makes us think, by what stretch of the imagination, can we ever envision ourselves being successful in the future, given the number of failures we have had in the past?
Unless you accept that there is something inherently wrong with the people who are trying to develop aquaculture in this province and that is thrown out regularly, there is something inherently wrong with the people involved. We need better people and that is thrown out. We can get into discussions for hours on those sorts of things but basically we have conflicting jurisdictions and conflicting visions of what this industry is, what it needs and where it should be taken. We could talk about this for hours and I think this is not the place.
MR. CHAIRMAN: I will cut it off at that point. Mr. Samson.
MR. SAMSON: One of the main things that jumps out at us today is the figure of $125 million value product in New Brunswick and $15 million here in Nova Scotia. The number one issue that kind of jumps out at you is the need for growth here in this province. One of the major steps in establishing that growth has been the Fisheries and Aquaculture Loan Board to help establish people in setting up. Now I have had a number of people who have tried to get into the system indicate that one of the major problems with receiving funding from that board was, as you know, the Fisheries and Aquaculture Loan Board has several representatives from different backgrounds and has also representatives from the aquaculture background. I know of at least a couple of instances where funding was denied due to opposition by members of the aquaculture industry on that board based on the fact, in a couple of cases, it would have been in direct competition with their particular business. I am just wondering if that has been a concern that has been raised with you? Your aquaculture industry, as you said, is drastically different from your traditional fishing industry because I guess to simplify it, your traditional fishing industry, you were competing for resource whereby aquaculturists are competing for markets.
I am just wondering if maybe the funding aspect, if there is a need for change there, because you are basically dealing with competing interests here. I know, if I have a business and someone is looking for money to set up next door to me and compete with me, I am probably not going to be too crazy about that idea. I am just wondering if that concern has been brought up to you and if maybe it is time we look at maybe having a different system, so that we don't have any sort of opposition coming from the aquaculture industry itself, to people who want to set up here in the province.
MS. MACNEIL: I think sometimes we have to be careful not to look at some of these structures as being fixable, sometimes maybe they aren't fixable. I don't have a lot of involvement with the Fisheries and Aquaculture Loan Board, rightfully so. These are business decisions that should be made. Some of the concerns that have been expressed, and may not be addressing the concerns you have, are applications coming forward which people realize,
because of their years of expertise in the business, are not technically sound, and have no chance of success or little chance of success, being promoted by the department bringing them forward.
What may seem to be a criticism or opposition, that it is based on fear of competition is actually based on fear of failure, and what that failure would do to the industry as a whole. Every time somebody goes out of business, there is a ripple effect of that. I have heard that concern issued.
There was some talk a while back of having the Fisheries Loan Board and the Farm Loan Board combined into one. That was something that seemed interesting, actually it seemed imminent at one point, it was going to be announced the next day, and this was several years ago. Because the type of technical expertise that might be available to evaluate an aquaculture application, is far different from a wild fishery application. I mean if you are asking for money to buy a boat, it is pretty straightforward, if you default they come take your boat. If you are asking for money for an aquaculture farm, that may not have any kind of production for four years, if it is shellfish, or two and one-half years if it is salmon, you get my drift, it is very difficult for traditional lenders - and, for the most part, the people who make up the Fisheries Loan Board have their background either in fisheries lending or traditional lending - to judge that application.
I think the effort was made under the last Minister of Fisheries, Mr. Barkhouse, to bring some aquaculture expertise to bear, so that someone in there could actually judge those applications, because there is nothing to take back, unless you want to take back fish and grow them. I think it was a necessary step, and maybe the right individuals weren't chosen. I really can't comment on that. I don't even know who the individuals are.
As I said, we are very arm's length away. I think the original objective was the correct one. We need somebody who understands this business. Maybe there is a way of getting people who understand farming and just kind of apply the fact that we have much wetter pasture than they do, to the idea of assessing loan applications.
There is also real concern that whatever is funded with public money, whether it be from this government or ACOA or whatever, has enough technical review to give it a chance of success, because any failure is going to impact on everybody.
MR. SAMSON: I understand that concern, and that was one of the main first questions I came up with, well, they are probably concerned about that, but I know especially with the finfish industry, if you are going to get any government money now, the whole project has to be completely insured. So, if there is a problem with it, there is insurance coverage on it, and it is not, as you said, a complete flop. As you said, with a fisherman, you have a boat, you take the boat back. But in these cases, there is an insurance requirement, so there is something there to reclaim, if it does fail. I guess my question is based on those two
instances, and I can say that those two projects, which I indicated are very successful and growing, and did not receive a cent from the Fisheries Loan Board, and had to go to the Farm Loan Board, because they were being blocked by the representatives of the aquaculture industry on that board.
So that is why I question if they had maybe people in the industry, it - as you said, you have scientists and other representatives - might be more appropriate than actually having people who would be in direct competition with those bringing forward these claims.
MS. MACNEIL: I think there is a logic to that, but no one asked my opinion on who they would appoint, but I would suggest that it be someone with a business background. The business of growing fish is one that we are just learning. Agriculture has their agri-economics professionals, we don't have the equivalent. So it has to be someone who understands the business of farming, maybe retired farmers are the better people, even failed farmers. They know better than anybody how much money it costs to stay in an aquaculture business.
MR. CHAIRMAN: I have another question I want to ask, in my home village of Wedgeport, we have recently had some people who have failed, and I use that as an example of the hard knocks that you have said that some people have experienced. They were into the finfish fishery, and also into the oyster fishery, and I think, I go back to the lack of technical support that was offered by the province. They encouraged these specific participants, and I think, Marli, you know who I am referring to . . .
MS. MACNEIL: Yes. I do.
MR. CHAIRMAN: . . . without mentioning their names. They were encouraged, very much so, to get into both aspects of this aquaculture, because of the fact that they saw a lot of potential. So, they approached, got no grants, mostly all loans, which they personally guaranteed upon buying a lot of the product, especially with the shellfish and the oysters, where they were buying 50,000 or 100,000 or 200,000 seeds. Later on, I think they were concerned that the counts weren't done properly, because they were using a procedure that was estimating it, and I can't comment as to whether it was accurate or not. I know that the people who were involved were very concerned, and the size that they could be put out, the assumption was made that they could be put out at 4 millimetres and they had to be further on. It had been proven that it should be at least 10 millimetres, because we have a lot of strong currents in our area.
These people have been basically put out of business. I look back to when I have spoken to them, and the biggest thing that they found is that when they had problems, basically the department said, well, you have a problem. That was it. I am belittling their comments to a great extent, but when you get down to the nitty-gritty, it is exactly how it happened. On the finfish fishery, they had problems with sea lice and so forth, and the
department had asked them for technical experience and they said, well, it's a problem. I really don't know what to do.
If you go to New Brunswick or you go to Newfoundland, and you have a problem, and you go to the Department of Fisheries, it is their problem. In Nova Scotia, the farmers that I have spoken to, I have basically said that when they go to the department - and these questions are technical, they are difficult to answer, they are not simplistic - the department really hasn't taken responsibility for them. I think a lot of people who probably could have done well in the fishery, basically feel they have been let down by the department.
MS. MACNEIL: I think that is a critical point, and we do slightly address it. As you will notice, we have run extension-type programs. I have two people who work for me, one who has quite a bit of expertise in shellfish, the other in finfish. The funding for those people, under the old co-op agreement, ends March 31st. As of April 1st, we have no technical expertise in this industry that we are able to send out quickly to help people.
The farm that you are talking about, one of the owners sat on our board of directors last year. We had a meeting with the Department of Fisheries and Aquaculture, just sort of a meet-and-greet with the Aquaculture Division. Someone made a very glib comment about, well, everything is going very well in oysters. I pushed back, because I knew what was coming, because this is a person who is very able to express himself. He asked them very interesting, leading questions as to how they could come to this conclusion. Someone pointed out, well, our shellfish expert just told us that. So he went over in the full face of the entire meeting, shook hands and said, I am so and so, you are the shellfish expert, I have been in business for four years, I have never seen you. Do you even know where my farm is? Of course, this person didn't.
I would like to say that that is the exception, but it is the rule. We have gotten involved as an association in areas we never planned to get involved. For instance, we lost a farm in Mahone Bay to fouling by a tunicate, which is basically a little sea squirt thing, naturally occurring, but just decided for some reason last year that it really liked this farm, and it killed the mussels on this farm. We have, as an association, gone out of our way to try to find answers. There are no answers. Internationally, there are no answers to this problem, but we have tried everything we could do. The farmer couldn't even get anyone from the province to come down.
It's not a reflection on individuals, or even on that department's division, it's a reflection on the ability to cater to a developing industry. They don't have the personnel or the expertise. They don't have that extension, tradition if you will, that Mr. Archibald spoke of, that started here in the 1930's in agriculture, and they are reactive as opposed to proactive. So, we have one vet and a half-time vet for the summer, for the first year. The vet cannot possibly do anything but react to crises, so teaching people how to be proactive and to prevent disease is not being done. It is sort of regular checks that might show a problem
before it becomes a disaster are not being done because they just don't have the resources to do it.
One more point, and I think I made it to you before, in New Brunswick, where they have had a terrible problem with the infectious salmon anaemia disease, I was there in November to go to a workshop. I just happened to be there at the right time when they were doing some post mortem work on some dead fish. I'm nosy as hell. I just wanted to go in and see what post mortem work on dead fish looked like.
The facility that I was in is the one that the New Brunswick Government has in that region in St. George. They have three others. It had a fully dedicated aquaculture pathology lab with six or seven Ph.D. people in that facility to work on the problem. I was with our provincial vet and he almost cried because he has to move the two-headed calf off a table to do work at the Agricultural College pathology lab because that is the only space he has to work in. Basically, I guess you get out of something what you put into it and we are not putting enough resources into that.
MR. CHAIRMAN: That brings me to my point that they basically felt they were encouraged and they feel that they were misled as to the fact that this technical support would be there.
They have told me how much they have lost and I am not going to repeat it, it is major money. They were basically approached by provincial government to do this. They didn't do it on their own. They told them, you should be doing this, there is a promise of good returns. We have the water, we have the sites, you are both quite involved in the fishery and you can go from here.
They feel, in a sense, that they have been let down and they won't quickly forget.
It goes back to the point that the provincial Department of Fisheries has a budget of $5.5 million. We have a $1.5 billion industry. That $5.5 million is basically directed towards the natural, historic, commercial fishery. For support staff - these people - I cannot understand how they have had the leap of faith that they have had because there isn't anything there for them if they have problems.
In theory, when you get into a fishery like this, it is all done on theory because if you have so many fish that should survive so much growth weight, so much this, so much that, if everything worked on theory we would all be very rich individuals in any fishery.
Of course, the problem is the variables that come into this that you cannot control that you have to deal with. I think if you look at any aquacultural fishery you will find it is the variables that kill you. If you can overcome them, you will survive and if you cannot, you will go by the wayside.
I ask myself, does the department have the resolve to invest in it? Should the department be investing in it or should they be contracting out to organizations such as yourself and say, look, as an aquacultural association, are you willing to, in a private contract, do it all?
I don't care who does the work. I don't care if it is Santa Claus who does it or if it is you or the department. I don't want somebody else to go through the pain and the anguish that the people in my community are going through right now because this has been closed down three months ago. This isn't something two years ago. If people are declaring personal bankruptcy and have a newborn child, it is not pleasant.
I ask myself, do you have an interest in trying to provide technical service or coordinating it, or whatever? It isn't there and it should be. I think, of all the points that I have seen, the regulatory ones that George was referring to before that blocks applications, once you get there - if you get there and you fail after, you are better off not to have gotten there in the first place. Perhaps you could comment on that.
MS. MACNEIL: It is a very interesting point because the individual you were talking to - certainly, I have been talking to - the hardest part of my job is hearing the personal losses that people suffer in this industry. Unfortunately, that situation is not unique.
What always interests me, though, is the resolve to try to get back because aquaculture is - I have worked in other industries and this is new to me, the last three and one-half years, or so. The hallmark of what I see, and maybe I differ from some of my government colleagues - is the passion and the entrepreneurship of these people. I don't believe in the philosophy that Nova Scotians cannot develop an aquaculture industry. I believe that you certainly can here in this province.
The technical expertise that is required to start up a farm and to maintain a farm is not available. DFO did have some of it here. They have moved it all to New Brunswick. They have consolidated. They have reduced staff. I sit on the National Science Advisory Council for Ocean Sciences and it is the same all over. DFO is not in the picture any more. In this province, we didn't move to fill the void.
We have projects that we have sort of co-sponsored with the Department of Fisheries and Aquaculture that they now have had to renege on. We have to give the money back because they do not have the personnel to do it. They need resources, I will never dispute that but there needs to be more money spent on aquaculture and it does not have to be handouts to companies. It is providing an infrastructure that will support developing companies. Whether we are involved in coordinating that, we have been doing it for the last three years out of necessity. We did not decide to have a finfish facilitator and a shellfish facilitator because we wanted the challenge, we knew because we had to have somebody with technical expertise to fill these voids.
I have someone who is working on monitoring for this ISA virus, which has pretty well kicked the butt of New Brunswick's industry and we do not want it here. He is on the road three days a week and in my office two days a week. If I had three people, we might be able to get the province done in timely fashion. It does not really matter in the final analysis who does it. It is not a race for glory or responsibility, it just has to be done and there has to be financial commitment to taking on that responsibility until the farm is up and running. When farms are big enough to actually employ their own veterinarians, finfish farms or shellfish farms, when they have laboratories on site to find out what is killing their shellfish then that will be appropriate for industry to take that on for itself but in this growing phase, it has to be a government responsibility.
MR. CHAIRMAN: I have another question if no one else has any. There have been some concerns with the finfish fishery, especially the steelhead in the Pubnico area, the Lobster Bay area. It has been trying to expand. It had some problems last year. They got in some marketing problems. They processed most of it in the frozen state and then the price went down. So a lot of them did not put fish out this year because of the fact that they do not have the financial resources to do it. When that came up, I was perturbed to hear that supposedly there are some offshore companies that are coming in and buying leases. I think it is a company from Quebec and so forth. Is that anything that you are aware of, that there are a lot of people basically coming in from outside the province and buying these licenses? Can you comment?
MS. MACNEIL: Both in finfish and shellfish.
MR. MUISE: I do not want to get into anything too controversial but I think it is pretty well common knowledge that the largest leaseholders in this province now are companies from Prince Edward Island and New Brunswick. That basically comes from a standpoint that they are welcomed here for one thing and they have firmly established businesses and market connections based on their aquaculture successes in New Brunswick and Prince Edward Island. Those provinces have fully developed their available lease area and are now looking to expand and we are the logical place. We have the waters, we have the opportunities, they have the markets, they have the sound financial footing and they are stepping over here. It is just good solid business expansion.
MR. CHARLES MACDONALD: Just on that. We got them moving in from New Brunswick and P.E.I. P.E.I. has been able to access their leases and everything else easier and it is the same with New Brunswick. Does that lie in the DFO structure or does it lie in the . . .
MR. MUISE: Leases have to do with property rights. They come under provincial jurisdictions.
MR. CHARLES MACDONALD: Be it DFO or the federal regulations, rather than the fisheries or Coast Guard or whatever, why is it that much easier to access them in P.E.I. or are they transferring that over to Nova Scotia? Is that why they are coming in?
MS. MACNEIL: One of the comments I heard, why I asked these questions, why I first go involved with the industry, was in New Brunswick and Prince Edward Island they developed an industry and then developed regulations after. That is why I mentioned it. We had all the regulations here and no industry. So, we put up every roadblock that could possibly be put up to development. I think Brian's point though is that they have overdeveloped or reached their capacity in New Brunswick for finfish and in P.E.I. for shellfish and they are looking here where there are opportunities. We welcome those opportunities being exploited, if you will, but we are hopeful and afraid at the same time it is not at the expense of Nova Scotia business people who may have been trying to do this for 10 years with very little support. Some of these companies are coming in after having made very nice profits with a lot of government support in our own provinces. We just want it on an equal playing field, if you will.
MR. JOHN MACDONELL: I am curious as to when you say that they kind of reached their limit in New Brunswick, you're only referring to the good sites for the farms but what about this trend, if it is a trend, to move on land with marine species? Is there much movement that way there?
MR. MUISE: Yes, again, as you can probably appreciate, there's a very different cost structure to setting up a land-based facility based on pumping water.
MR. JOHN MACDONELL: Sure.
MR. MUISE: I think you would appreciate also that you would need a fairly high-priced, high-margin species to justify that sort of intensive capital investment. As I say, with the salmon industry, that is not an international commodity and so it's really not viable. People are projecting a significant profit potential to justify some of these very expensive species such as halibut, as to be land-based. You have to keep in mind too, please, that the salmon industry in New Brunswick was based on a fish worth $5.25 to $5.95. Right now generally we're dealing with a product that's valued at a market of $2.75 to $2.80. So the margins have tightened up.
Just to give you one example, I'll tell you just the type of luck we have here. It's not all mismanagement. Sometimes it's just downright rotten luck. We have a company sitting on Saddle Island, which is right at the tip of the Aspotogan Peninsula. Due to various reasons having to do with disease and cutbacks and that sort of thing, they find themselves now sitting on the only large supply of salmon in the six to eight, eight to 10 pound range. The price jumped from $2.75 to $4.05 in a week. Two days after that, the Swissair jet crashed right off their site. They can't move any product off their site. They have a window of opportunity of
four weeks to move the best part of $4 million worth of fish and they can't move fish off the site because of an international incident of no one's making. Those sorts of incidents have happened in this province in the past. I've been part of a couple of them and this is just one.
We met all day Sunday with the Coast Guard and the Vice-President of Swissair and the crisis team and it looks as if those folks will be able to move fish as of tomorrow morning. That's the type of luck some of our companies have had and no one can predict that sort of thing. What we need is an emergency response team to be able to help people get through that, and they are helping but that is just an example.
MR. CHAIRMAN: One last comment because we're getting to the end of our time, the last question, are the other jurisdictions subsidizing? A lot of our farmers are still saying that there is still subsidization from other provinces, whether it's in the cages or whatever, they're doing it in genius ways so that people are getting into it. A lot of the capital costs are there, even half of your stock, so they are still competing basically with two hands tied behind their back. Is that still going on? I know there was a study done and promised to be released by the department. I think you mentioned in our discussion that you actually did some of the research and that study I don't think was ever made public.
MS. MACNEIL: Which study . . .
MR. CHAIRMAN: Wasn't there a study done in regard to levels of subsidization?
MS. MACNEIL: Yes, that was a couple of years ago. Now nobody knows where it is which is kind of funny in . . .
MR. CHAIRMAN: It has nothing to do with Ralph Fiske by the way. (Laughter)
MS. MACNEIL: Good, I'm glad to hear that. We have tried to get that information and it gets increasingly difficult to get because our neighbouring provinces gave it to us readily a couple of years ago and now, as we've mentioned, some of their companies are starting to come here and they see us as more competition but over the years there have been numerous subsidy-type programs available. You will see reference to that in the information package.
Newfoundland right now is a prime example of there being a lot of government money going into helping people get established in business. I have met with the minister in Newfoundland, the Honourable John Efford, and he calls it taking the risk, helping spread the risk. In Nova Scotia, ACOA did that for a couple of years but they're not doing it anymore. So those subsidies are available, which are direct subsidies. There have been assistance programs that help people put processing plants in, for instance, and the capital cost involved in putting a finfish processing plant in is substantial.
[3:00 p.m.]
Brian has referred to this as the gift that keeps on giving because every year you still have that equipment and it's still paying for part of your operation. There are research-type projects which end up putting subsidies into the industry that do exist in the other provinces. For instance, in Prince Edward Island where they have a very mature, developed industry, they are still spending money on research. They have something which they call AFRIF, which is the Aquaculture Farming Research Investment Fund. This fund basically takes the risk off the farmers themselves in trying new techniques and new technologies. So they still exist. We are still trying to find that level playing field.
MR. CHAIRMAN: Well, we have come up to the end of our time. I would like to thank you very much for coming today.
Perhaps, as a committee, we will have some discussions. Mr. Archibald has made a suggestion and perhaps, as a committee, we can have some discussion on that.
I would like to thank you both for coming in and I think your answers were quite informative to the committee and I think for a lot of us, who happen to represent quite a bit of rural Nova Scotia, it is very important to us that we understand. I think a lot of us are sort of naive when it comes to the aquaculture industry and hopefully we can learn from that. So thank you both very much.
MS. MACNEIL: I would also like to extend an invitation to any of you who would like to either visit farms or learn more about the industry, just to contact me and I can set that up for you.
MR. CHAIRMAN: Thank you for the offer.
MR. PAUL MACEWAN: Do you have business cards?
MS. MACNEIL: Yes, we do.
MR. MACEWAN: I had a question I wanted to ask you. The Chairman hasn't recognized me but my name is Paul MacEwan. I am from Sydney and I have been a member of this House for 28 years and I don't get recognized by the Chair. So that is point one.
MR. ARCHIBALD: You don't come on time either.
MR. MACEWAN: I got here. I drove a long way to get here, too, Mr. Chairman.
MR. ARCHIBALD: The meeting started at 1:00 p.m.
MR. MACEWAN: My question is, have you had any contact with the Minister of Fisheries on these matters? They are important matters. I wish I had had some time to talk because I would have said a bit about them, but they are important. Have you had any contact with the Minister of Fisheries and if so, could you indicate what the response has been?
MS. MACNEIL: We have had ongoing contact and discussions with two Ministers of Fisheries now in my term and certainly many more in Brian's long involvement with the industry. We have had one formal meeting with the current minister, Mr. Colwell. The types of suggestions we are making today have been made before. We appeared, actually, before the Law Amendments Committee two years ago when there were changes being made to the Aquaculture Act to request some changes. Those requests were not dealt with at that time and I think these discussions will be ongoing on a regular basis. Most of our contact, as I am sure you can appreciate, is with the Director of the Aquaculture Division and sometimes with the deputy minister. Mr. Colwell has been incredibly busy with his two portfolios.
MR. MACEWAN: Well, you have made an excellent presentation here today and if they send me a copy of the transcript of this meeting, I am going to take it to Mr. Colwell. I know him pretty well. I am going to tell him you made a good presentation and try to reinforce it.
MS. MACNEIL: Thank you.
MR. CHAIRMAN: Thank you very much. Perhaps on the next occasion, Mr. MacEwan, you can raise your hand because everyone else here had no problem getting noticed. If you raise your hand (Interruption) What did you say?
MR. MACEWAN: I looked at you. I indicated, I raised my hand like that and no response.
MR. CHAIRMAN: Did you? Well, if I missed you, I apologize because everyone else here I caught and if you did, I obviously wasn't . . .
MR. MACEWAN: I would have thought you would have called on each member in turn anyway.
MR. ARCHIBALD: Oh, Paul, now down to this foolishness. Why don't you come on time, Paul, instead of raising so much ruckus.
MR. CHAIRMAN: Anyway, we had talked about further witnesses that we had. We had made a presentation to have the - what was the group that we asked to have?
MR. JOHN MACDONELL: Silviculture Contractors Association.
MR. CHAIRMAN: Okay, can you update us on that, Darlene?
MRS. DARLENE HENRY (Legislative Committee Clerk): Your next meeting will be September 29th. It will be here from 1:00 p.m. to 3:00 p.m.
MR. CHAIRMAN: In the interim, George had made a motion - and also George isn't here right now - that we had talked about whether or not we wanted to further look at this industry, whether or not there is an interest from the committee. If there is something that you would like to bring forward, whether or not you want to look at some of the suggestions that they made, I would like for each caucus to basically discuss among yourselves and to see whether or not they would be supportive of such a motion. We could basically try to focus our efforts.
I don't think Mr. Archibald basically meant a 10 or 12 meeting type of review, but maybe as a committee we could take a look at where we want to focus and if there are suggestions that we could come up with as a committee, make recommendations to the House, that we could bring that position forward at the following meeting and take a position on that. Is that agreeable with the members today?
SOME HON. MEMBERS: Yes.
MR. CHAIRMAN: That being so, we stand adjourned until September 29th.
[The committee adjourned at 3:05 p.m.]