STANDING COMMITTEE ON RESOURCES
Mr. James DeWolfe
MR. CHAIRMAN: Gentlemen, I think we should get this meeting under way. We are being quite generous in giving five minutes to the members of the NDP for representation, and there is no one here yet. I will have to say that these gentlemen have been on standby since 1998, and we are delighted to have both of you here with us today. We have Mr. Denny Morrow, Executive Director, and Mr. Glenn Wadman, President of the Nova Scotia Fish Packers Association. Without further ado, we will go around the table, starting to my right, and introduce ourselves so that you will know who we are.
[The committee members introduced themselves.]
MR. CHAIRMAN: We have Darlene Henry with us, as well, who represents the Committees Office.
Gentlemen, I would like to again welcome you, and apologize - it was beyond our control - events dictated the cancellation of your group several times. We have certainly looked forward to having you with us. The representation probably will be here from the other group, but we will have to get under way because we have other events that we have to attend as well.
Normally we have a presentation by the witnesses, followed by an opportunity to direct some questions to you. Who would like to start off?
MR. DENNY MORROW: I will. Mr. Chairman, members of the committee, we did start this some time ago, and I am getting near pension age.
What I thought I would do is just a little introduction about who the Nova Scotia Fish Packers Association represents. I have put some handouts of information with each person, and I have made some notes on some issues I thought it would be good to comment on. I have also provided you with a copy of discussion issues.
I coordinate the Atlantic Fishing Industry Alliance as well, which was formed in response to the Marshall decision, on behalf of the commercial industry here last fall. We met with Minister Dhaliwal and DFO staff in Ottawa last week, and there are some important issues in that regard. These are things we talked about during that meeting. I have also provided everybody with a copy of the position paper that the Atlantic Alliance put out. I will just give a little bit of background as to how this came to be produced, and what we are trying to do with it.
Getting started, the Nova Scotia Fish Packers Association has 58 member companies in the region from the Eastern Shore, around the South Shore to Annapolis County. The combined annual export sales of seafood from these companies is in the range of $350 million a year. Our companies buy, process, and export a wide variety of seafood products. As I have said, if it is caught by fishermen in the Atlantic Region, chances are our companies buy it and export it. Processing plant employment among our companies is estimated at 2,000 to 3,000, depending on the time of year, and also that is cyclical. In some species, we are in a downturn, and there is no secret to that, so that number of 2,000 to 3,000 could jump as groundfish stocks rebound. The number of fishermen who supply our plants, it is difficult to estimate, but we would estimate it is somewhere in the 3,000 to 5,000 range.
The Nova Scotia Fish Packers Association has a website. I have provided you with a little bit of information that is taken off the website; the list of companies is there. Most of these companies are small to medium-sized firms, anywhere from 10 to 100 employees. Most of them are family owned and have been in business for a number of years, in some cases generations. In many coastal communities, these companies are major employers. Visiting the website, there are some interesting things on there. We have research projects that we have done, we also have news updates from the industry, and we put this on so that it can be accessed by the general public.
Moving on to some of the issues that are confronting the processing industry and the fishing industry, the first thing I have noted is regulations. During the last two years, we have been in the process, in our plants, of implementing a new quality management program. We had to do this.
MR. CHAIRMAN: Excuse me. Since you stopped your presentation, I will introduce Frank Corbett, representing the NDP.
MR. MORROW: The quality management program that we have in our plants is to make sure we provide wholesome, safe seafood products. In the past two years, we export some 60 per cent to 70 per cent of our product to the United States. The United States has implemented a HACCP program, Hazard Analysis of Critical Control Points. This program started with the astronaut program in the United States as a way to make sure that you didn't have people getting sick on spoiled food when they were in space.
In order to get into the United States, we have had to integrate our quality management program with one they have. It has cost us a lot of money and it has cost us a lot of time and effort. We are now in the process of having the Canadian Food Inspection Agency do audits in our fish plants to make sure that we have implemented this program. I know Glenn, when he adds his comments, it has been something that has certainly preoccupied our management staff and some of our employees over the past two years.
Competition. Norway, Iceland, Chili, China, Alaska, these are examples of areas where the raw material, especially in fish, has been more prevalent, more abundant, and in many cases, cheaper than what we can buy it for. I know that in the early 1990's, when our groundfish stocks crashed and the TACs were cut drastically, there was a feeling that in southwestern Nova Scotia that there would be padlocks on all of our processing plants, but in fact what happened is the people, who were very entrepreneurial, went out on the world market, they accessed groundfish, continued to produce salt fish, frozen fillets, different products, and we continued to export. Maybe not at the level that we would have liked, but we have kept our foot in the markets. Some companies have done fairly well at this.
The situation right now is that the price of this raw material in the world market is increasing, these countries, in the case of Iceland and Norway, have gotten very aggressive in our markets. It didn't take them long to figure out that if they were giving us fish and we were processing it, selling it in the Caribbean, Mexico, so forth, that they had the raw material, they could do the same thing and they have done it.
A lot of our companies are under a great deal of competitive pressure right now. I was down to the Boston Seafood Show in March, and several people from China came up to one of the booths that I was working at, a company that produces a lot of salt fish that they export around the world. The Chinese came up, showed me their brochures, same products. They are starting to get into those markets as well. You can imagine the wage rates in those countries. It is a very difficult, competitive environment that we have right now. Not only that, but we also have other meat proteins, like chicken, pork, beef, and so on that have done excellent jobs of marketing, generic marketing programs. You go to Loblaws or Sobeys and you look at the seafood case, it has improved certainly, but it is fairly small in comparison to those meat proteins that you see down the line.
We have got a tough job of holding our markets, but there are certainly some pluses. We have a healthy product. Most of it is wild caught that our companies handle and the perception in the public is that that is a healthy product, it is a good product to eat. Canadian fish stocks, I just put some figures down for 4X cod to give you an idea where we are at. The TAC is 6,000 tons for the next three years, that is if the science people say that stocks are rebuilding, but the minister has committed to holding at 6,000 tons. Glenn says that my long-term average is a bit high.
MR. GLENN WADMAN: I think it is more like 18,000 or 19,000.
MR. MORROW: Yes, but you can see it is three times what it is now and this is in 4X haddock. The TAC is 8,100 tons, the long-term average about 20,000 tons; pollack, the TAC is 10,000 tons and the long-term average has been about 30,000 tons; Georges Bank cod, 1,800 tons last year versus somewhere around 10,000; 3,900 tons of haddock versus 20,000 tons. So you can see that we are very low in the quantities of fish that we have available to catch compared to what the longer term average has been.
We did some figures last year and we estimate that if our stocks return to somewhere around the long-term average, you would see another $275 million go into the economy of the South Shore and the southwest region. The Eastern Shore region, I was talking to one of the fishermen up there yesterday in one of our companies and groundfish is still declining even though there has been little or no fishing for groundfish. What is the cause of this, certainly we feel that seals are a big problem, especially the large seal herd that we have on Sable Island. Climate is another problem, water temperatures, but it is interesting that in this environment that seems to be bad for groundfish, it seems to be a good environment for shrimp and crab. So we are going to see increases in those fisheries and perhaps job opportunities in growing and processing of those species.
Just a few things about lobster. As stated, the stocks, our concern is mostly with the Bay of Fundy; South West Nova; the South Shore; LFA 33; 34; 32, up on the Eastern Shore. The stocks seem to be in reasonably good shape. In fact, we had a glut of lobster landed in South West Nova back in December and early January and it caused us quite a bit of marketing problems and price problems. Talking to fishermen on the Eastern Shore yesterday, their catches are up and they were up last year.
We are facing some additional conservation measures that are causing a lot of discussion amongst the fishermen, measure changes. DFO wants to double egg production. They have a four year program in place. We have been increasing the carapace size. It is interesting, the fishermen on the Eastern Shore, what they have decided to do is that they are going to put, each fisherman, license holder, is going to put away 220 pounds of female lobsters into a holding operation toward the end of the season and then those will be released at the end of the season as a way of a conservation measure. In southwest Nova they do v-notching. They v-notch the tail of female lobsters and put them back in the water.
One of the big problems that we have had is the black market fishery that we call, in lobster; it has been an out-of-season lobster fishery. It is estimated last year that most of it comes under the guise of the Native food fishery. It is estimated last year in LFA 34 that over one million pounds of lobsters was fished during that season and most of it went on the market to be sold and, amongst the fishermen, the processors, and the buyers, it is a very important issue that this be brought under control. We have spent a great deal of time this winter in meeting with DFO, with the federal negotiator, to try to make sure that this fishery is brought under control and it becomes a true food fishery. One of the real negative things that has resulted from this is, I think, a loss of respect amongst the commercial fishermen for the DFO management regime and that is hard to really estimate the significance of that, but we deal with it.
Live lobster markets seem not to be growing. That is our bread and butter, but the processed lobster, Prince Edward Island, New Brunswick, is the centre of that. The processors tell us that they are getting better at what they do; that is good. They are buying more of the catch, but we as a group feel that live lobster is something that we need to pay more attention to. We need to think about markets because it has really been an important product for us and it seems to be pretty well saturated right now.
The three sectors of the live lobster industry are: the harvest sector; the holding, those would be your pounds, your tank houses; and your export marketing companies. We have a number of those in our association and, of course, everybody is aware of the job Clearwater does in export marketing. All three sectors are important and all three have to be able to make money. If the holding and the export marketing sectors don't make money, then the harvest sector eventually is going to feel the result of this. The harvest sector right now seems to be doing very well. They are getting good prices for their lobster, but I can say from the standpoint of our association those companies that we have that have lobster pounds, tank houses and do exporting, their margins have been shrinking over the last three or four years and not making a lot of money, and in some cases no money.
Improvement is needed in handling fish and lobster. The easiest way to add value is for good handling practices onboard the boats. Bring us good quality fish, lobster that is cared for, in good condition, and that is the best way to add value to those products. We have been working with some fixed-gear groups in Shelburne County; we have produced a training video on fish-handling practices; and we are going to be putting courses on as well starting next winter. I have had lobster fishermen who have seen the video who have said we should do the same thing in that sector as well. So this is something that our association undertook here two years ago to improve communications with the harvest sector, to get in sync with them and start to address industry problems and work on projects together.
Some other things. We have talked a little bit about the possibility of a skilled labour shortage in our plants if groundfish stocks rebound. It is already happening in New Brunswick and P.E.I., in the frozen plants. They tell me it is very difficult to get skilled labour now
during the season. Other species, herring, our herring quotas have been increasing, but herring prices remain low. The only good side of it is herring for bait and herring for fish feed has been on the upswing, but it is just changing world consumption patterns as people aren't eating herring the way they used to. I guess the McDonald's and that craze is all over the world now. Shrimp seems to be on the uptick, crab, the large pelagics are doing well.
The final thing I would mention and then leave it open to questions, is that the industry was hit with the Marshall decision last fall. It has taken up a lot of our time, a lot of our energy trying to make sure that the Native access to the fishery is done in a way that it doesn't harm the livelihoods and investments of people who are already in the industry. That has been our focus for the last four or five months. With that, Glenn, is there anything you want to add?
MR. WADMAN: No, you hit all the points, there is really not much I can add to it. You know my opinion on HACCP. We are moving to a system where we no longer inspect fish, we inspect paper, which I will leave that to your decision whether it is good or bad. I guess the biggest thing I would want to mention to this committee, we need - I hate to use the word help - but what we need help with is your federal counterparts and that is a word that is not mentioned here, but is noted here many times and that is the effect of what downloading has done to our industry.
I will give you one concrete example right now. Mr. Chipman might be aware of this one, and this is the Bay of Fundy scallop fleet. Five years ago we would pay $100 for a license and go fishing scallops. Now we pay the government 25 cents a pound for our quota up front, before we get it. We pay 7 cents a pound to a dockside monitor before we can get the fish off the boat, so there is 32 cents. Because of the federal government's policy of privatizing wharfs, the Digby wharf, the rates have basically doubled, anywhere from doubled to doubled and one-half. So you are looking at another 7 or 8 or 9 cents a pound, just in wharfage fees. They have instituted a port sampling program to check the size of scallops, another 5 or 6 cents a pound.
Basically, right now, if you live in the Digby-Annapolis area and you are a scallop fisherman you have to fork over to the federal government or to a subagency of the federal government 55 cents a pound before you leave the wharf; that is on January 1st.
I think what we need to help in is making the feds realize they haven't done any one thing to break our back, it is like the old saying, the straw that broke the camel's back. They have added on dockside monitoring, they have added on access fees, they have privatized wharves, they have added on port sampling fees, they have added on observer fees, they are adding on electronic monitoring fees and this is where we need to get the message out as an industry. There is only so much money in fish and you can't privatize everything. Theoretically speaking, we could privatize the Trans Canada Highway, but I am quite sure that creamed peas would cost a hell of a lot more than they do now.
To sum all this up with the good things and the bad things happening to us, and this is happening across the fisheries and in the plants. Plant licences used to be $100, now they are $1,000; it used to be you produced good fish and an inspector would come in and take a look at it and went away; now you have to have an 800 page manual; you have to have Q&P supervisor; you have to have a video; you have to have a detailed audit; a plastic handle in your broom; you have to have red hair because blond haired people aren't allowed in the plant; you have to have an airtight door, all of which are downloaded costs. Eventually, all the downloaded costs wind up on your grocery shelf. That affects the whole industry, it drives up prices, it affects our ability to compete, it affects everything.
If there is any one thing I would ask this committee to try to do, is to try to make our governments realize that the accumulation of what governments are doing is having a significant effect on the industry. It is not the one cut, but it is the death by many cuts.
[9:30 a.m.]
MR. CHAIRMAN: Thank you very much, Glenn, for your remarks and also Denny. Before we go on any further, I must mention that John MacDonell has joined our group. So you will know who will be asking you questions in the near future. Does anyone want to start it off? Frank.
MR. FRANK CORBETT: I will go. Although I came in late, I caught it and it was a great presentation and, again, I apologize, Mr. Chairman, I was a last minute substitute. Glenn, I just want to go to your last remarks first. You were saying about the costs that have been downloaded to your organization. Has your organization, or any such group, done a cost analysis with the downloading costs on what it would cost to get a pound of fish to the table or to the supermarket as opposed to a pound of beef or pork?
MR. WADMAN: I don't think there has been any across the board broad study, not that I am aware of.
MR. MORROW: When this happened, I think about three years ago, I did a presentation in Ottawa before the House Fisheries Committee and there were a number of fishermen's groups there as well and we asked the department, because there are a lot of different agencies involved here and cross departments, and we asked them to conduct that kind of analysis. I understand for some agriculture commodities that they have done it, but for the fishery, it was stalled and really didn't go anywhere.
The Treasury Board had set out some guidelines that before significant costs were downloaded or user fees on to an industry, there should be an impact analysis, that was part of the Treasury Board's guidelines on that process. It was never really done on the fisheries, to my knowledge. When we have asked about it, basically, it is a stonewalling that we get.
MR. CORBETT: I am not a fan of downloading but it would be interesting to see relative to your industry if it is out of whack with, say, pork producers or the poultry or anything like that.
Just along another line, how much value-added product are the packers into? Is it an increasing part of your product line? The profit margin is it better for you to do value added or is it better for companies to go and put the raw product on the market?
MR. WADMAN: I guess it would depend on your definition of value added. If your definition of value added is adding more labour, I would say that is stable. We have a couple of canneries in the company, we have a lot of people who do salt fish, the finished product right down to the one pound retail packs. If your definition of value added is taking the fish and turning it into the most dollars, we have a lot of companies who do that also. So, really, it depends.
Value added is one of these new words. I put it out there in the context of dissed, you dissed me. I was watching at 3:30 a.m. this morning when I was up getting ready to come here, I was watching Jerry Springer or some damn thing and that was this morning's topic. (Laughter) People who dissed me when I was young. Value added is the same thing. We use it a lot but nobody has sat down and said what does value added mean.
If you are a fisherman selling to me, the concept of value added is, you want T.B. Kenny Fisheries to pay you the absolute maximum amount for your fish because you owned the boat, you got the million dollars down at the loan board, you got the crew. If you are the plant worker, your concept of value added is, I want whatever will require the most processing hours so I can get the maximum amount of unemployment. If you are the owner of the business, your concept of value added is, what can I do that has the biggest margin between buying the fish and the return I get. We do have a lot of companies involved with value added across the board, but it is a really difficult concept to grasp, because nobody has a clear definition. If you are fisherman, I know what it is. If you are a plant worker, I know what it is, and if you are the owner. If you ask me for a generic one, it is very difficult.
MR. MORROW: Just to add to that, this video, what brought this about is in the salt fish business. We can't make choice fish out of trash, so if you want to add value to that groundfish you are bringing in, take care of it, handle it properly, and then we are going to get more money out of that fish when we process it. Again, as Glenn said, when you use that term, everybody is thinking that you are doing entrées, that is the way to get added value. But, for our companies, as an example, if the fishermen handle the fish better, that is added value. It is probably the easiest way to get it.
MR. CORBETT: I guess that is where I am going, because I am neither a fisherman, a processor nor a plant owner. I am a consumer. That is where I am going with it when I go into the store. That brings my last question this time around. Mr. Morrow, you said earlier
you go in and you see the back of a store and you see the meat proteins, that may be 40 or 50 feet in length. They have this fish market that may be 10 feet. I will end my round by saying two things. What percentage of the market do you have, and realistically, where do you see it going, and how do you see yourself getting there?
MR. MORROW: Glenn is the guy in the marketing business here, but at our meetings, our members have always said if we had to live or die on Canadian consumption of seafood, we would be dead. Nova Scotians are not great consumers of seafood. It is right off our shore, but why that is, maybe it is partly our fault that we haven't done the marketing job here, but on the east coast of the United States, for example, they know fish, and they value it. There is a big market there. Europe. But, here in Nova Scotia with Sobey's and with Superstore now I see there are seafood counters. They are getting better. They have a staff person who is usually now fairly knowledgeable. They keep the fish in good shape.
I think consumers are getting more educated and demanding good products, so it is growing. Unfortunately, it is also at a time when many of our fish stocks are at low ebb, so one of the problems you have, I was in Toronto and I noticed in the seafood section there, they sell their fish by a 100-gram price. But you go and see a pound of cod and a pound of haddock, and, as opposed to a pound of chicken, people really don't stop and think that that pound of haddock, there is no waste with that. There is no bone, there is no skin to throw away, and not a lot of shrinkage. It is good value. But, these are things we face.
When you listen to Glenn talk about all the downloading and all the things we have to worry about in our plants, our management, levels have been trimmed in the last eight years because of margin squeeze. We just don't have the money and the people to maybe do that marketing job that should be done.
MR. WADMAN: One of the other things, too, that makes marketing more difficult is the fishery versus the other proteins. The fishery is a wild operation. You have to go out and find it and kill it. We have 3,000, 4,000, 5,000, 6,000, 10,000, maybe as high as 30,000 people in Nova Scotia who go do that. In beef we have 200 farms, and we raise them. Today if you have a cattle ranch and you look out, and yes I have 6,421 cows because now they have an electronic collar on them and you can log onto your PC and it will tell you where each one is, but if you leave the wharf in Halifax and say I am going to go look for 30,000 pounds of haddock, once you get past the Sambro lighthouse you have some decisions to make, and that is part of the problem.
You will see there are fairly well-organized generic marketing campaigns for chicken, for eggs, for beef, for poultry, whatever, but you very seldom see a generic marketing campaign for fish. The reason is because there are so many small companies and we are all, for want of a better word, hunter gatherers, because that is what we do. There is very little aquaculture business compared to the wild fishery, so we go out and we are trying to find the fish that is swimming wild.
Now, let's say in marketing, if you own a beef farm you can call up Sobeys and say I will kill 100 head of cattle for Father's Day, and I will deliver them to you, they will be $2.00 a kilogram. Sobeys can go out and market it and do a special Father's Day surf and turf, beef, whatever you want, but it is very difficult for you to say to Sobeys, on Father's Day, I am going to land 30,000 pounds of haddock because it may not be where it is supposed to be when you go there. I am from - as you can tell by the accent - the east coast of Newfoundland and we have a saying over home: God put a tail on 'em, that's why we call 'em a cod. That is the way with the fish.
This is part of the reason why, when you go into a store, there is 40 feet of beef and there is 10 feet of fish. We cannot go out and say to a store that we will promise you we will have fresh fish for Father's Day. What if it blows the last five days before Father's Day? On a cattle ranch it doesn't matter but, if you have a boat, that is a big part of the problem.
MR. CHAIRMAN: Some of us around this table had the opportunity last evening to support your industry, and knowing I was coming here today I did inquire about where some of the products came from and I was disappointed to hear that the shrimp that I was enjoying through much of the evening came from the Soviet Union. I guess that reflects back to a statement that I think Denny made earlier regarding salaries, and probably the cost of delivering that product here. Would that be a fair statement, that it is cheaper to get that product from the Soviet Union to Nova Scotia?
MR. WADMAN: At times. One of the marvels that we have with fish these days is that good old thing called the Internet. It used to be - and not very many years ago - that a businessman or a broker in Nova Scotia would have contact with a Soviet vessel that would make a deal to import fish in Canada, and then put it into a big wholesaler who would distribute it to Sobeys, who would bring it out to your local store. These days, what you are finding - and I am sure that you ladies and gentlemen have noticed the consolidation there is in that end of the food business - the buyer for Sobeys will click on a site, say, seafood.com, and he will go to the traders section and they will say, Borealis shrimp, have to offer, from Soviet Union, Newfoundland, Nova Scotia, whatever, and he will click around for the best buy. It used to be very difficult to deal with these people to get stuff in. Now, anybody, I am sure some of you have five-year-old kids at home who could go on the Internet and buy you a truckload of shrimp. That is part of the reason you are seeing this.
Of course, we are partly responsible for that pressure because we as consumers are going to the supermarkets of the world and saying, cheaper. Cheaper, cheaper, we want cheaper, hold the costs in line, hold inflation down. Of course, what is the natural reaction? If you have a Nova Scotia fish plant worker who is getting $11 per hour and you have a Soviet fish plant worker getting $11 a week but at the end of the day what you see on your plate are those shrimp. That is the reason we are seeing shrimp from Russia.
MR. CHAIRMAN: Are we getting high-tech in this province? We, as producers, are we on the net?
MR. WADMAN: Yes.
MR. MORROW: We don't want to give the impression here that our industry is on its knees. For example, in Newfoundland now they are talking about a $1 billion industry again. Our export sales have stayed up and our companies have continued to operate in a very tough environment. Just this past year we established our website company and our association, Fishermen's Market. They are not exactly duplicating Clearwater, they are not one of our members. What Clearwater is doing is selling on the net but Fishermen's Market is selling on the net and I know Glenn does, as well. So yes, we have companies who are right in step. I think it is a considerable achievement, considering what happened to our groundfish stocks. If you go down to southwest Nova Scotia, go to Cape Sable Island, you see all of the fish plants down there still operating, still employing people, still exporting in tough markets. They have survived this and hopefully, as things start to pick up and they have more resource, things will boom again. I think it is a considerable achievement.
As a sector, we also have the feeling that governments in Nova Scotia take this sector for granted. It is our number one export product out of Nova Scotia and it is kind of an afterthought.
MR. CHAIRMAN: If we were to buy a Nova Scotia product, like we should be, how much would you be exporting then? I think you said it was 60 per cent that goes out. Unfortunately, I wonder how much of the product comes in? Do you have any idea what comes into the province?
MR. WADMAN: I know it is a significant amount, but then a lot of the product coming into the province is raw product. Not only is Sobeys on the net, or whoever, I was using an example with the shrimp but I am also on there and I will buy frozen blocks of unprocessed cod fish from that gentleman in Russia and I will process that in Brier Island. We probably have 30 companies in the association doing that. I didn't mean to make it sound, like Denny said, doom and gloom, I was trying to explain how the shrimp got here. We do the same thing as companies too. I will buy haddock in Norway and process it down to fillets and I will sell it to Sobeys or Superstore or whoever. I should knock off picking on Sobeys, I guess, they may have some friends here.
MR. CHAIRMAN: You mentioned the beef for Father's Day but we had presenters here very recently that suggested that the major supermarket chains would buy out of province for 2 cents a pound. So it is a competitive market there too, there is no real difference in that regard, they are going to go for the best deal.
MR. MORROW: I would add too that sometimes companies in southwestern Nova Scotia, for example, are criticized for exporting whole fish to the east coast of the United States. It is no mystery that people down there value fresh fish, they go to their seafood counter the same way people used to go to the butcher shop here and they might want a steak, a particular fillet, or whatever they like, they like to have that fish processed on the fresh counter. We get a premium for sending good quality, fresh fish out of southwestern Nova Scotia, we have the advantage not like Newfoundland, we can truck it down there and get it there in good shape. But, it is not recognized that we also have container loads of fish coming off the world market into southwestern Nova Scotia coming into Yarmouth, into Shelburne. They are unloaded and go to our plants, we process them into salt fish, or as Glenn does, into other products, so it is a two-way street. That is often overlooked.
MR. WADMAN: I think a couple years ago, the province did a study - I think it was three or four years ago - and I think $60 million worth of raw material came in through Yarmouth, Shelburne, and Halifax that went to plants in western Nova Scotia to be processed. During the collapse, that is how we maintained our markets and maintained jobs.
MR. CHAIRMAN: Excellent, excellent. I had better go to some of the members.
Frank Chipman, I think you are first on the list.
MR. FRANK CHIPMAN: There are a few terms that I don't understand in the fishing industry. What is the difference between fixed gear and, is that a trawler type?
MR. WADMAN: Fixed gear is either gill nets or long lines.
MR. CHIPMAN: Now what is a groundfish?
MR. WADMAN: Cod, haddock, pollock, flounder; basically bottom-feeders.
MR. CHIPMAN: Another thing that has always amazed me - a friend of mine has a tractor-trailer. He goes to Sydney and picks up a load of fish. He transports it to Boston where it is processed frozen, then he hauls it on to Toronto. Why?
MR. WADMAN: It can happen. Money. Money makes the world go around.
MR. CHIPMAN: U.S. dollars?
MR. WADMAN: U.S. dollars. The U.S. can do stuff we can't do.
MR. CHIPMAN: You mentioned you buy fish from Norway, and Jim was talking about the scallops and the shrimp we had last night. The scallops, I don't know their country of origin. I can certainly tell you they weren't Digby scallops, because they didn't have the
flavour of Digby scallops. But the Russians always fished in Canadian waters. Can you fish in Russian waters, or do they have any fish left over there?
MR. WADMAN: Their actual fishery is much more buoyant than ours right now. There is very little Russian content left in our waters anymore. Most of the Russians that are fishing over here now, it is joint venture fishing, where there is still a small degree of Canadian companies hiring Russian boats; like up at the Davis Strait, the Northwest Territories, there is a turbot stock up there in 2GH; very deep water, 3,000 metres. There is not much technology available in Canada to fish that deep. It is being developed. There are a number of boats now. So there are a number of companies that have allocations up there, and they will contract the Russian vessel to fish that farm, or an Estonian vessel or a Lithuanian vessel.
MR. CHIPMAN: Would you say that overfishing by foreign fleets has helped to deplete the resource?
MR. WADMAN: I would say it has helped, it has contributed, but it is only one of the factors.
MR. CHIPMAN: I noticed in a comment you made, yourself or Denny, that Nova Scotians are not large consumers of seafood. I think a lot of it has to do with availability and price. I know I am an apple grower, and I have people complain that they can't find Nova Scotia apples in stores. Well, mine went to a large chain, and I can tell you, they weren't sold locally. Price is a factor, too. You look at the price - and I can say the same with apples, what the apple producer got and what the retail price is - I know what you get as a fisherman and what the retail price is, there is a big margin or a big spread there.
Were you joking earlier when you said, about the 800 page book, you had to have redheads and not blondes? You weren't serious there were you?
MR. WADMAN: The 800 page book is your HACCP manual. It is a well-known industry joke, but it is not a joke. Polar Foods, and I am sure you are all familiar with Polar Foods, they are the big lobster producer from P.E.I., when they submitted the first draft of their HACCP plan for their plants, I believe the thing was 76 pounds of paper.
Basically, what a HACCP plan will say is that you, Mr. Chipman, will put 1.2 apple trees per acre pointed at a 45 degree angle, growing on sunny days with six apples per limb. If you have five apples, you are out of spec and you have to do a variance, and if you have seven apples, you are out of spec and you have to do a variance. Now you should also be able to list which of those apples, on what position on the limb, will have a worm or have a bird land on it, and possibly you should be able to tell up front which days it is going to rain.
That is basically what this HACCP thing does. As I was saying, because of government cutbacks and less physical people on the street, we are moving to a system where an auditor comes in and checks my 800 pages of paper, but he does not look at my fish.
MR. CHIPMAN: Who does the regulations? Is this federal or is this the U.S.?
MR. WADMAN: This comes under Agriculture now, it is the Canadian Food Inspection Agency.
MR. CHIPMAN: That is hazardous access, critical control point, is that what their list defined?
MR. WADMAN: Yes.
MR. CHIPMAN: I just have one more. I still have that question, are you serious about the redhead versus the blond?
MR. WADMAN: No, but it gets . . .
MR. CHIPMAN: Right. So some of the safe manufacturing, we will say solomon gundy, would they normally be a member of the Fish Packers Association, groundfish?
MR. MORROW: We have a number of companies that produce . . .
MR. CHIPMAN: Comeau Seafoods, they are not either in the alliance or in the association?
MR. MORROW: Actually they are in the alliance. The Seafood Producers Association of Nova Scotia, SPANS, is the association that represents Clearwater, High Liner, Comeau Seafoods, Mersey Seafoods and a number of other companies, the larger companies, and they are in the alliance, but they are not in our association. We do work with that association and with those companies on common issues. There are really two processor associations in Nova Scotia, ours and SPANS.
MR. CHIPMAN: I noticed that Comeau's was not listed on the back of the appendix here, but Clearwater was so I questioned that.
MR. MORROW: Yes.
MR. CHIPMAN: That is all I have for now, Mr. Chairman.
MR. CHAIRMAN: Mr. MacDonell.
MR. JOHN MACDONELL: I would like to thank you gentlemen for your presentation, at least what I caught of it, and I apologize for my lateness and I apologize to the committee members. They are getting to know me pretty well I think by this stage. I am the one in the morning who lives outside the city so I don't have an easy start. I have a small farm and four kids to get off to school so it has to be a perfect day to get here on time.
I know very little about the fishing sector although I have talked to fishermen on occasion when I can. I am the Fisheries Critic, Agriculture Critic and Natural Resources Critic for our caucus. I don't really understand the federal government and its approach to the fishery anywhere in the country, let alone Nova Scotia. It looks to me that along with agriculture, it is one of those areas that actually you could generate jobs and generate wealth, I would think. My big fear is that it is a resource that is renewable and sustainable, but I really worry about where that is. Because it is different elements of the food chain and a variety of species involved in it, I worry that what we are seeing on the increase in shrimp stocks is a product of the decrease in the cod stock and that fishing shrimp may affect the return of the cod unless somebody figures out at what point you can stop doing that.
Along with wanting to get your comment about that, the value added, to me, is basically doing something more that gets you a lot more price than the cost of doing it. In my constituency there is a blueberry farmer and he freezes those blueberries. That makes them far more valuable in the market place and that is all he does. He does not change the shape of them, or split them, or do a thing; he freezes them. So certainly the market, I would think, can only stand so many of a certain conformity of a fish. In other words, if you fillet it, there is only so much fillet you can sell. If it is the whole fish, there are only so many whole fish. But if you can exploit every avenue of that market to its nth degree and try to convince somebody that there is something new you are thinking about that might be better, then for sure, but once you start spending more than you are getting out of the fish, then you are probably not gaining any value whatsoever.
[10:00 a.m.]
A fisherman had mentioned to me that he felt the industry was too much price driven or market driven, I guess was the point, and he was talking in relation to codfish and he said that a codfish - I will say five pounds and I might be wrong - was worth 75 cents a pound, but a two pound codfish was worth 50 cents a pound. So if you bring in your net and you have a lot of two pound codfish, more than likely they are going overboard and the five pound fish are staying. Then you put your net back in and those two pound fish don't make it back to survive. Is this called shagging? Have I got the right term for that?
MR. WADMAN: There is a term in the long line fishery called shacking where you shack off small fish, and then there is a term in the mobile gear fishery called discarding.
MR. JOHN MACDONELL: So they would both be the same thing basically then?
MR. WADMAN: Basically both mean the fish that should not come in don't come in.
MR. JOHN MACDONELL: Right, and this concern was around the fact that what we are actually doing is we are reducing the stock. If those two pound fish went in and went to the market place, then you would not put your net back. You would get your tons of fish basically, but you might take more of the smaller ones to do it but, otherwise, trying to get that same tonnage with larger fish. Do you see any mechanism to address that? I am assuming that these concerns have probably gone to Ottawa umpteen times and nothing has been done but, for me, I would like to think that the resource is sustainable and renewable because it doesn't matter about value added, or anything else; if you don't have fish, you don't have an industry. So could you comment on that?
MR. WADMAN: It is being tackled right now through a program called port sampling which is not extensive enough and, once more, that goes back to the feds - Paul Martin and not enough money. Basically what port sampling does, we have a couple of individuals in western Nova Scotia who will take say 1,000 pounds of your fish coming off the boat and measure every fish. They measure them to calculate the age and stuff.
With the amount of computer processing they have available now, they are monitoring the catch landed versus the catch observed at sea and vessels that are going out and are fishing in an area, say where they are getting 20 per cent two year olds, 20 per cent three year olds, 50 per cent four year olds, and when they land, get 90 per cent four year olds, they can be targetted. What they are doing now is they are putting industry-funded observers on them. If you get targetted under that, they will say here is a letter for you. You have to take an observer with you, and it is basically a government contract employee, for the next six months at your expense and the expense is about $250 a day. So it gets people's attention.
There is still some of it on the go and I think anybody who would sit up in this chair and deny that to you is lying to you, flat out, but I would mention that there are still speeders on the go and the problem is, with budget cuts, there are not enough cops. Can it be better? Yes. It is being addressed, not only that program, but in the mobile gear fishery which we are mainly in where we have gone from diamond mesh nets to square mesh. Basically a diamond mesh hangs like this and when you tow it, it fits together and so very small fish get caught. A square mesh hangs like this and when you tow it, it stays like this. The smaller fish go through so the selectivity is happening on the bottom and you are not injuring the fish. Our friends in the fixed gear have gone to a bigger hook size so the smaller fish cannot physically bite the hook.
There are steps being made all the time to avoid the capture of small fish but, like I said, there is still some happening. Will it ever be 100 per cent and be perfect? I doubt it will ever be. I have a favourite comment that I make at meetings, that Moses came down off the mountain with 10 rules and the fishermen stood up and said, where's the rest? That is basically what is happening here.
MR. MORROW: It is important that the fishing industry has said to the federal government over and over again that there has to be adequate money for science and research so that we know what is going on out there, and there has to be adequate money for enforcement. As a part of that - and again this gets back to this whole question of the Native fishery as well - there has to be respect for the management regime. Sure, you can enforce the speed laws by having police everywhere, but people have to have an underlying respect for why those rules are there. That is one of the problems that we are running into, you have to have a buy-in.
Your comment about shrimp and crab, for example, and the downturn in groundfish stocks is that there is probably a misconception that ecosystems have some equilibrium, and that this is a natural state of affairs. Water temperatures change, we are supposedly into global warming, well, we have seen very cold water along the Scotian Shelf, and we are sure it has affected larva and recruitment. That environment may be good for crab and shrimp, and that is the way it is happening in Newfoundland, but it is not good for groundfish. Is that bad or is it good? From a fisherman's standpoint, in Newfoundland, some of them tell me that they have never had it so good. As far as a plant worker, who used to work in a plant that processed groundfish, it is a bad thing.
MR. JOHN MACDONELL: I have to agree with you. I don't think we are going to go back to the days when John Cabot showed up and you could dip cod out of the ocean, if that was actually true. What I am concerned about is that whether the codfish comes back to be a viable industry, that it comes back to be viable as a species, that there is some type of natural equilibrium. I think your comment about the cattle, you can press in your computer and find out where they are, well, there is a lot that we don't know about the whole interrelationship between temperature. It is only recently that I realize there are more currents out there, and one above the other, going in different directions, and different thermaclimes and temperature variants, and all these factors that these organisms live in and have evolved to. I am sure that if you start shifting any of this that it has an impact, and then you throw man into the mix with increased technology.
I want to ask you just one more question, and then I hope to come back because I want to talk about the Native fishery. I am wondering if you can comment on draggers, and if you think that there is a negative impact on the ocean floor.
MR. WADMAN: As a dragger operator, we definitely leave a mark on the ocean floor. Is it as bad as you hear in the media? No. Is it zero? No. We leave tracks about 90 feet wide. We fish about 20 per cent of the surface, total, so there is about 80 per cent that we don't touch. People neglect to mention that little thing. This is my favourite argument - I am heavily involved in this on another front - you can imagine a dragger going across the ocean floor, and the complaint is that the dragger is doing this, but the guys who are complaining that the dragger is doing this, have a 60 pound anchor that is dropping, that is doing that. Which do you want? Do you want a scratch or do you want a punch?
Denny won't want me to mention this, but I will anyway, one of my favourite ones is, we have 0.5 million lobster traps from Halifax to Charlotte County. Each of those weighs about 75 pounds. On the first day, you will get a half a million of those, but nobody says that a half a million of those - it does absolutely no damage. Then we haul those traps, probably 100 times during five months. So really, we have 5 billion of those but they don't do any damage. So, yes, we do have an impact, but I don't think the impact is as severe as the farmer who run over his land and ploughs it up.
One of the other things, you hear as a big criticism of draggers is that where there are draggers there are no fish. Unfortunately, the evidence is just the opposite. If you take a map of Atlantic Canada and you put on it, concentration of fixed gear along the shelf, concentration of draggers along the shelf, and then you look at areas of low groundfish to areas of high groundfish, unfortunately, what the map shows is that the areas that consistently have a high dragger fishery, still have groundfish and the areas that have a high amount of fixed gear fishery have no groundfish. Now, there isn't any scientific correlation of that but it is a physical fact. Yes, we do have an impact, but I don't think it is serious.
MR. JOHN MACDONELL: You say you fish 20 per cent, 20 per cent of what? Is it 20 per cent of where the fish are?
MR. WADMAN: About 20 per cent of the geographic bottom is fishable by draggers. There is a perception that draggers just come in and we clean everything. But we are only using twine that is 4 or 5 millimetres in diameter. So if we get into an area of heavy rocks, we can't do anything because once you catch two rocks and they go through the back of the net, so go the fish. If you have a $10,000 net, you don't like leaving those on the bottom very often. So we fish about 20 per cent of the fish off the bottom, overall, but 80 per cent of the bottom is not touched by draggers at all.
MR. CHAIRMAN: There was mention earlier of seals and also Sable Island and I was fortunate or unfortunate to spend a fair amount of time on Sable Island; I guess fortunate to spend the first week but unfortunate to spend subsequent weeks. I can tell you, on a sunny day, you could barely see the sand for seals and they are fat. Now, there are two problems there, they eat fish and they also pass on parasites to the groundfish. Is anything being done to control the seal population today?
MR. MORROW: Well, I have been on the province's seal committee with some fishermen and some of the department personnel and DFO and it is a very frustrating experience. I have been there for over two years. We talk about the problem but solutions - we wanted to have a project where we were harvesting, we wanted to harvest about 20,000 grey seals, we have over a 100,000 herd of seals just on Sable Island alone, and these are 600 to 800 pound animals . . .
MR. CHAIRMAN: Yes, they're big.
MR. MORROW: . . . so you can imagine what they are eating. We can't get anywhere with the federal government. It is difficult. They are very much afraid of the environmental movement. Your comment about the parasites, I think Glenn would say it about what, 10 cents a pound?
MR. WADMAN: Yes, it about 10 cents.
MR. MORROW: It is adding and we are seeing them now, and we don't want this to go out of the room here, because I don't think the public would enjoy this . . .
MR. CHAIRMAN: This is being taped. So we can talk about it when that shuts down at the end of the meeting.
MR. MORROW: It is a growing problem and the solution to it, we think the province needs to be more aggressive. There was a birth control project that was started back in the mid-1990's, I understand that it is about 90 per cent effective; they go out and shoot a dart into the females and they don't come back because they come to Sable Island to pup, so they don't see them back and that is how they are able to estimate how effective it is.
The fishing industry is told that we would have to handle the cost of this and we just can't afford it. Now, I understand High Liner Foods - it used to be National Sea Products - put money into the original project, there was some government money that went into it as well and the technology is here. I think the people are at Dalhousie that developed this. That is one solution.
The Sealers' Association up in Cape Breton would like to harvest more, but the federal government has said that you have to have the market, and we are in a catch-22. How do you have a market if you don't have the product to send out as samples and to do all that market development work and it is a difficult product to market. By the way, at our annual general meeting last June, we ate seal meat pâté, excellent stuff; you mix it with pork. The Holiday Inn over in Dartmouth came up with the recipe and it was really good. We had seal meat as an entrée as well, I would say it was less good than the pâté, but, we are going to have it again this year. There are places in the world - Korea, China, for example - where they will eat seal meat, but it is a huge problem and we think that the total allowable catch for seals, they've got it on the Eastern Shore. The fishermen don't have it.
MR. CHAIRMAN: Thank you, very interesting. I have eaten a fair amount of seal meat as well, I have a friend from Newfoundland, he takes cans of it over. Jon Carey.
MR. JON CAREY: I think Mr. Wadman made a comment about aquaculture not playing a very significant part in your future, maybe?
MR. WADMAN: As a portion of the industry.
MR. CAREY: Is there a future for aquaculture, in your opinion, for your organization to work with and can it be a significant part? What is your opinion of aquaculture as far as the environmental aspect of it?
MR. WADMAN: Right now, I think there is definitely a future for aquaculture in Nova Scotia. The industry from the finfish point of view, has been targetting salmon and steelhead. I think, my personal belief, is that those species have been so overdone by Norway and Chile in the short term to get going; it may be the way to go, but in the long term, I think species like halibut are very valuable and some very significant work I think has been done in the Shelburne area now, in the Barrington area on it.
It is going to be a big player for the Nova Scotia economy because we are in a great area for that and we are six hours from the Boston market and that is just a fantastic market for that fish. Another one is winter flounder which is a very thriving fish now for the live fish market for the ethnic market. It hasn't been developed that well yet, but I think there are significant chances to do some business there. One of the big things about winter flounder is that it is a very cold-water-resilient fish so that it resists our cold water very well and so it should be able to live really well. Another fish that hopefully we will be able to culture is witch flounder, or grey sole as it is more commonly known; a very valuable fish. You are looking at, I think on Monday in the U.S., the whole fish coming from the water was like $2.50, $3.00 per pound in U.S. funds. This is basically as it comes from the water, laid in a box. There is a very good scallop farm being developed in the Annapolis Basin, I think there is some significant future there.
Going head to head with a place like Chile on salmon and on steelhead is going to be very difficult because it is just the cost of being in Canada, it costs more. We pay more in wages and most of the feed that is used to feed these fish is generated out of Chile, so if you are buying your feed from your main competitor, it is going to be very hard to compete.
MR. MORROW: I don't know whether the committee has money to travel, but as Glenn said, a couple of companies in this association, in partnership with Icelandic companies in Cape Sable Island are developing extensive halibut farming, and this is an on-land circulating system. The Icelanders feel they have mastered the technology. I was talking to a guy from the company down in Clark's Harbour yesterday, and they feel they are right on track, they are doing very well, and they are very excited about their prospects. This is something that right now is unique in the world. I think it has great possibilities for the province. We are proud that a couple of our companies took the risk and put up the money and got involved in this.
MR. CAREY: From the environmental standpoint.
MR. WADMAN: We have to be very sensitive about what is going into the environment. If you are asking for my personal opinion, the situation we see now where somebody says, those buoys out in the harbour are a reason to stop 200 jobs and $5 million in investment, I think it behooves people in the House to stand up and say, the good of the many is more important than your view, if you know what I mean. We have to control what these sites are putting in the water. For example, salmon, they treat them for sea lice, that chemical that is used to treating them, you don't want to release that into a very popular scallop or lobster area, because you save your salmon, you kill your other fish. That is not a nice thing to do. The environmental part of a site being rejected because some guy doesn't like what it does to his view, that is wrong. If you can imagine what downtown Halifax looked like 250 years ago, we have ruined the view; nice rolling meadows, nice spruce and birch trees coming down to the water. We have to have some industry to make this province go. We can't just go out and say, because of the aesthetic view from my window we are going to ban aquaculture from Nova Scotia.
MR. CAREY: My final question would be, from the economic standpoint, fishing from the wild or domestic, how are costs going to equate? Is it going to be more expensive to do domestic growing, using aquaculture?
MR. WADMAN: I couldn't truthfully comment. I guess it depends on the day. Start-up costs for farms is very significant. R & D, a new species, is very significant. But then $1 million for a 65 foot boat is very significant, so I really couldn't give you an accurate answer.
MR. CHAIRMAN: Mrs. Baillie.
MRS. MURIEL BAILLIE: You are very interesting, Glenn, listening to you talk. You seem to have a lot of knowledge, good common sense. I had a lot of ill-conceived ideas about draggers, I am glad you cleared that up. I live up in the Northumberland Strait area where we have the tastiest, best lobster in the world. Do you people buy from up around our way?
MR. WADMAN: Yes, we do.
MRS. BAILLIE: I was interested in hearing your bit about the conservation of the lobster. Earlier, you said you are going to keep 200 and so many, female lobster and then let them go.
MR. MORROW: This is on the Eastern Shore. Each lobster fishing area was given some targets for increasing egg production, and they were given different alternatives that they could pick from. What the fishermen came up with on the Eastern Shore was that instead of, for example, tail notching, and release in water, which they were concerned about disease and so on - fisherman in LFA 34 in southwestern Nova Scotia do that - decided they would take 220 pounds per licence holder, put them in a tank-house or pound and keep them until the end of the season then take them back out and release them. So that was their
contribution. That is not the only thing they do, we have carapace measure, we throw back small lobster.
MRS. BAILLIE: But why I am wondering about this is because you throw back the spawn lobster anyway, don't you? Why are you saving them and then putting them . . .
MR. MORROW: Well, every mature lobster is in some part of the cycle of breeding. Berried lobster is one part of that cycle and they are thrown back, but these are female lobsters that are not in that cycle.
MRS. BAILLIE: Oh, I see. I was thinking you were keeping the spawn lobster and I was wondering about that.
You spoke of the winter flounder, and that was a new term to me, and then you spoke of another fish . . .
MR. WADMAN: Grey sole. Witch flounder are grey sole; witch flounder being the proper name, but grey sole being the common usage on the wharf.
MRS. BAILLIE: Are those caught in the very deep, cold water?
MR. WADMAN: Very deep water, yes.
MRS. BAILLIE: Because I think I bought some of that. I am a little bit fortunate, I try to get the local fresh fish. I don't mind paying the extra price for it and like I said, I am fortunate to be able to do that. Somebody in Sobeys introduced me to this sole, this flounder and he was telling me it was caught in the deep, cold water. In fact he had a frying pan and so on to give you a little taste, so I bought some. It was delicious.
MR. WADMAN: That species is very valued in the live market. This is another fishery developing in Nova Scotia right now, the actual live fishery. We have one company or two on Cape Sable Island who are actually going out now and capturing cod alive. They bring them in in live tanks and take them to Chinese restaurants in Boston, New York, and Toronto. You go into these restaurants and they charge you a fantastic premium. You basically go up to the tank and say, that is my fish, and they reach in, take it out, kill it, cook it, and bring it back to you. Grey sole is in significant demand for these restaurants so I think there is real opportunity, if we can learn to culture these things, for big money.
MRS. BAILLIE: But you can't always get them around here.
MR. WADMAN: No, they are a very deep-water fish and the amount of them in the ecosystem right now is very small.
MRS. BAILLIE: Another question to you, Glenn. You were saying that you sometimes buy or get the cod from the Russian ships. Now, am I buying cod thinking it is caught around here, but it is from Russia?
MR. WADMAN: If you buy frozen cod in Halifax today, it could be from Canada, the U.S., Russia, China, Norway, Denmark, Iceland, England, Scotland, Finland, Estonia, Lithuania, et cetera. I guess the rules of production are if I buy whole fish from Russia and I bring it to a Canadian plant and then I defrost the whole fish and further process it by filleting it, removing the skin and bones, portioning it, refreezing it and repackaging it, in that transition product it goes from a whole-fish product of Russia to a finishing product of Canada.
MRS. BAILLIE: So it will be packed by so and so, is that . . .
MR. WADMAN: Yes. The import of whole fish from other countries is prevalent across the industry, from small companies to very large ones.
MR. MORROW: I think the thing to remember here is that we have had low groundfish stocks and we have kept employment in our plants by accessing the world market. Also, where would we be if we didn't have the United States, Europe, and Asia buying our fish and our lobster? We are an export industry, so it is just fair play, I guess.
MRS. BAILLIE: I am not against you, I am congratulating you for doing so. I was also interested in your comments on the seal, but I guess I have heard that. You talked about the environment and the buoys. My goodness, by taking away the seal hunt, they have taken a lot of jobs from people. I think that is just terrible to take one's livelihood.
[10:30 a.m.]
MR. WADMAN: The devastation that they have done to the northern part of Canada, the coast of Labrador, Ungava Bay, Northwest Territories, and Nunavet is unbelievable. In a lot of those communities, sealing was it. They destroyed that livelihood.
MRS. BAILLIE: I have taken quite a bit of time. Thank you. It is very interesting.
MR. CHAIRMAN: It is very interesting. Mr. Boudreau, I think you are next.
MR. BRIAN BOUDREAU: Mr. Chairman, I will be very brief. I just want to say that I appreciate you gentlemen coming in here today, because it has been really educating for me personally. I guess I have one question. I had a couple of questions but they have already been asked, and one was in regard to seals. I think you answered that as much as you could. The other one is marketing. Do you feel that there is a proper marketing program, or do you feel that government can assist in regard to proper marketing? I look at the farming industry in
regard to eggs, for instance. The marketing board worked rather well in that regard. I am wondering if that sort of thing could help your industry.
MR. MORROW: Just from the association's standpoint - and then Glenn is in marketing for his company - we had discussions with Nova Scotia Fisheries starting two years ago about just doing something fairly simple here in Nova Scotia during the summer months, when we have a lot of tourists, to try to feature Nova Scotia-caught product, Nova Scotia fish. We have produced some brochures, we have done a little bit of work, but all the other things that have sapped our energy and our money have done so, and it has been put on the back burner.
Also from an association standpoint, it is very difficult to get companies that compete vigorously with one another: 58 companies in our association, when we sit down at a meeting, you don't know who is not speaking at that meeting, but they work on common problems. To start working on marketing together, one company is thinking, well, I put money into the hat, Joe is going to get the advantage of it; right now I have my share of the market and somebody else is going to get in. It is very difficult to do. I am sure the other commodities have dealt with this, but they are more generic, eggs are eggs, and beef.
We have found it very difficult. I mentioned live lobster, I think we are facing a big problem there. The live lobster sellers in this province are going to have to start working together. We are getting $5.00 to $8.00 a pound to the fishermen. When you start marking that up and sending it off, we are finding resistance in the United States and in our markets. The fishermen want that good price, and you can't blame them, but we have to make money as well. You are talking about a premium product, and it had better be good, and you had better do a good job of marketing it, and we are not getting the margins to do that job. It is a big concern for the industry.
We have talked to the Nova Scotia Department of Fisheries about that. We think that maybe it is time for an industry task force on live lobster, to get the people around the table in the industry, talk about the problems we are having, and see if we can make some recommendations to the industry and to the government as well.
MR. WADMAN: I agree with Denny. I guess there is definitely a need for a generic "eat fish and seafood" campaign, something simple, something targetted at the summer months when we have a lot of tourists, but the big thing is, as Denny said, we have 58 individuals in the organization, and I think something that industry has to do is do a better job of advertising. Maybe we need the offices of the provincial department to help us coordinate that, but like I said, it is really difficult.
We should invite you to a meeting. It is more fun at a meeting to sit up front with Denny and me and watch the other 58 people. At any one time, you have 58 people and 30 of us are probably not speaking to each other because he beat me out on a lobster deal or I
beat him out on a salt fish deal, or somebody else beat the two of us out on a salmon deal. But that is business. It is very hard to generate funds for everybody to say, let's money in the pot for advertising. So if you go out and advertise, eat fish twice a week, and the consumption of cod goes up and the lobster guy goes, well, what did I get out of that? Or the salt fish guy goes, well, they are eating fresh fish.
One of the other problems with seafood is beef. You bake it or you grill it. With seafood, it is so flexible, there are literally hundreds of different things you can do with it. We have plants that specialize in salt fish. We have plants that only do smoked fish. We have plants that only handle lobsters. We have plants that only do whole fresh fish. We have plants that only do fresh fillets. Yes, we need some kind of a marketing campaign, but I am not sure how we can organize it.
MR. MORROW: I think we are evolving to where wild-caught fish and crustaceans are going to be the premium meat protein. There are wild caught. They are natural. They are recognized with Omega 3 fats. They are good for the heart, and the taste. There are a whole variety of things. Beef is beef. You get some difference between a T-bone and hamburger, of course, but it still is basically that beef taste. But go from scallops to cod or to salmon or sea urchins or whatever, there is such a variety there. What you see happening in the really good restaurants is that seafood is up there on the pinnacle, and the problem we have is we still, a lot of times think of it in Nova Scotia as the everyday food, the poor person's food. It is not anymore, and it is not going to be. But for a special occasion, not just lobster, but cod and haddock and these things, these are great foods. It is being recognized in the cities in the United States certainly, and in Japan. It is just that it is not recognized here.
MR. CHAIRMAN: I live in Pictou County and my home is on the Northumberland Strait so the Northumberland Strait is my summer playground. I have noted that my fishfinder in my boat is dead for the most part. Most of the summer, there is no movement out there, it seems, other than when the herring are running or the mackerel season starts at the end of the summer. I am wondering, is that sort of the norm for the inshore - I am not in deep water in the Strait there normally - that seems unusual to me. I would have thought when I first got into boating, I would see all kinds of movement down there, and I don't. Would I see movement on the Eastern Shore? Would I see more activity down Yarmouth way if I were boating there?
MR. WADMAN: As you get south you see more activity. I am not sure, when you say you are in shallow water, how shallow?
MR. CHAIRMAN: The Northumberland Strait is not deep, all the way to P.E.I. pretty much.
MR. WADMAN: The major stocks that are up there would be flounders and some codfish. Codfish generally . . .
MR. CHAIRMAN: You don't see too much movement on the ground anyway.
MR. WADMAN: No, you won't see the flounders, and then codfish generally is very transitory because we buy in the Cheticamp area down to Port Hood and down that way. You get a run of cod that comes up in the spring, it will go up in the Gulf, stay up there around the Maggies and up towards the North Shore, and they will come back down and we will start getting fish again in October-November. But during the summer months, it is mostly flatfish.
MR. CHAIRMAN: Is it because it is warm? It warms up because it is fairly shallow?
MR. WADMAN: I think that is probably part of it, and the fact that we know the stocks are very depressed out there because the fishery is closed. That used to be a massive fishery. Back in the late 1980's and early 1990's, the cod fishery along there used to have a TAC of 45,000 metric tons which is 100 million pounds. Now, I think last year they had an experimental fishery for 4,000 or 5,000 tons. There has been a 90 per cent reduction in what is happening there. That is definitely part of it.
The other thing is the water. I was going to comment when Denny mentioned about the cut, even though we have global warming, we have colder water.
MR. CHAIRMAN: Is that because of the melting?
MR. WADMAN: Exactly. What most people don't realize is one of the first symptoms of global warming is cold water, because the polar ice cap melts and all that cold water comes south.
I guess the next major thing that we will probably see, if global warming increases, is we will have really cold winters, because instead of getting warmer, as that cold water comes south, it is going to be colder. Then when it changes - it is a very complicated argument.
MR. CHAIRMAN: It is, isn't it?
MR. WADMAN: Global warming is a very complicated argument.
MR. CHAIRMAN: For those of us who live along the ocean, the weather is so unpredictable, and certainly if the water is cold in those coastal areas, then the air is cold, you have to go inland to get warm.
MR. CAREY: I just wanted a quick question. The Aboriginal effect to the fishing industry, is that going to be a significant part?
MR. WADMAN: Could we extend the meeting for about four weeks. (Laughter) There is definitely going to be a shift, and what the shift is going to be nobody knows, because even though there has been some interim one year agreements signed, we still don't know whether the fishing is going to be during the traditional season, we still don't know whether they are going to have to respect the same quotas we do, the same size measure, the same marketing rules. There is going to be an effect, but until it actually gets here, determining the effect is going to be very difficult.
If one of the fishermen, who sells to me, retires his licence to this new board that is on the go, called the ATP, the Allocation Transfer Program, which is a board the feds have set up to buy licences from Native fishermen - I should go on record as stating, by the way, I believe the people who are fishing now are the native fishermen as opposed to the Aboriginal fishermen or the treaty right fishermen who will be coming in - so if the ATP board retires a licence from a native fisherman and grants it to an Aboriginal fisherman, if he sells to the same company in the same community, there may not be a lot of effect.
If he sells to a different company in a different community, then there is a ripple effect in that community because there is less fish and less employment but then there is a ripple effect in the other community because there is more fish and more employment. So it is definitely going to have an effect. It is one of those things like getting hit by lightning, you know it is going to hurt you but you have to experience it before you know how.
MR. CHAIRMAN: I think we are going to get back to this topic in a minute. I let Jon jump in there out of turn, actually. I want Mr. Chipman to have an opportunity and Mr. MacDonell as well.
MR. CHIPMAN: Just a couple of questions. You mentioned dragging, that you are only doing 20 per cent of the geographical area. Are you talking about coastal or offshore?
MR. WADMAN: Inside 200 miles.
MR. CHIPMAN: You can go out to the 200 mile limit and drag out there, you go that far?
MR. WADMAN: It depends on the water, the water depth, the size of the boat.
MR. CHIPMAN: A short time ago we were talking about big versus small. The Full Bay Scallop Association comes to mind, they have the 41/40 zone . . .
MR. WADMAN: It is 43/40.
MR. CHIPMAN: Is it 43/40, okay. I think there are approximately 200 fishermen who can actually scallop fish in the Bay of Fundy, roughly 200 with Nova Scotia and New Brunswick. I think the Digby scallop fleet has declined in half, it is down to about 50 from the 100 it was. You have six or seven companies, I believe, that fish the most lucrative area, which is the Georges. How do you feel? Do you think that is a step in the right direction? Instead of giving the biggest part to six or seven companies, should you let the 200 who fish just in the Bay of Fundy go out to that area and have a little share of the pot?
MR. WADMAN: I guess I am pretty biased here because (a) we operate draggers; (b) we operate scallop draggers; (c) I am the Vice-President of the Full Bay Scallop Association; and (d) I am a member of the ITQ Management Committee for the scallop fishery. We have been lobbying on this problem for about seven or eight years. As it stands right now, the seven major fishing companies in Nova Scotia share all of the scallop grounds south of the 43/40 line and outside of 12 miles. They have approximately $100 million worth of scallops this year that they are going to share seven ways. This agreement was put in back in 1986. We have actually taken this agreement to court trying to have something done about it. We had about 50 meetings surrounding this particular agreement and the minutes of the meeting where the agreement was actually made have disappeared. All of the other 49 meetings' minutes are available.
I think right now there is a policy in place in the rest of Atlantic Canada, with the exception of the offshore scallop fishery, that if there are surplus earnings or super earnings, then the resource is subdivided to people who have less. We see that in the crab in the Gulf, we see it in the shrimp in eastern Nova Scotia, we see it in the shrimp in Newfoundland, crab in Newfoundland, but for some reason, these seven big offshore companies have been exempted from this rule and yes, I believe that they should share. Should all 200 boats go out there uncontrolled, wide open? No. There should be an allocation made to them. There has to be a way to monitor the resource, even though the resource should be shared, I don't think the resource should be raped. I am sure that members of all three of your Parties are probably being lobbied today, yesterday and Monday on this question. I don't know if that is the right answer or a good answer or any answer.
MR. CHIPMAN: I guess my concern, I represent the area of Parkers Cove, Hillsboro and that area, and those were thriving communities at one time. One scallop fisherman I spoke to, I think he only was permitted 9,000 pounds last year. It is just not a lot of scallops and isn't a lot of money either, compared to the livelihood they shared at one time. But I guess my concern is, you have seven companies basically with the largest share of the resource and yet, 200 - and I agree with you that it has to be monitored, but I think each person should be getting a little piece of the pie - but it is better off to have 200 families than maybe seven big companies. I know seven big companies may employ people, but I guess my concern is, are these communities going to disappear because of that?
MR. WADMAN: I agree with you 100 per cent. Even if 10 per cent of that resource, which is $10 million out of the $100 million, was reallocated on a temporary basis until the stocks rebuild in the Bay of Fundy. The Bay of Fundy is one of the most productive areas in the world and those stocks are coming back now in a small measure. There is some sign of rebuilding this year, especially in the area south of Brier Island.
MR. CHIPMAN: Is it not true that historically and traditionally, it was the small fishermen and not the companies who were there on the Georges Bank first?
MR. WADMAN: Actually the historic fact is, all of the big companies were originally small fishermen who got very successful and then got very big, but yes, the fishery on Georges Bank was first, from what I understand, started by the Digby inshore fleet I believe back in the 1920's.
MR. CHAIRMAN: Okay, we will cut it off there. Five minutes for John.
MR. JOHN MACDONELL: Okay, five minutes. I kind of have to agree with the line that Mr. Chipman is taking. I would like to see more people involved with having a piece of the pie and having the wealth distributed I think is far better for communities if that is the case.
A couple of points. One, on the aquaculture thing, I never realized that it was just somebody's historical view of the water that was causing them to turn down any of these aquaculture operations, but I can see that it could be. Certainly, we were always told that the currents would clean out anything underneath, but the amount of effluent coming from some of these operations seems to be significant and is laying right on the bottom, and I would say that that probably is affecting other parts of the fishery in a serious way.
I am really glad to hear your comment about the halibut. I think we are going to do aquaculture, but basically you have to get it out of the water and have some way to control it. I wonder if you know - and maybe you don't - but I have heard that since we are feeding a fish by-product, basically it is the food I think for aquaculture operations, so you have to catch something to have the product, and that is fairly expensive generating the food that goes to aquaculture operations, so it is not really clear as to how much of a gain you are making. Can you make a comment on that? I know it may not be your field of expertise.
MR. WADMAN: There are feed conversion ratios and, as I say, it is not my field of expertise, but normally the fish that are being used for making fishmeal are surplus fish, like carcasses. In the herring industry, we catch the herring, we remove the fillets, and what is left in the backbone, the head and the tail, will be processed into feed and then they add minerals, vitamins, and oils, pelletize it, and make it into fish food; they also add soy, protein. It is an industry all by itself, but it is a significant cost.
MR. MORROW: The conversion for fish is far better than beef. Beef is a good argument for vegetarianism. We take all this good quality vegetable protein and we feed it to beef, but fish, it is a good conversion rate. The herring industry, for example, the two bright spots they have are the herring they have that goes for salmon feed and the herring that goes for lobster bait. The world consumption of herring fillets has just been going down, the price is going down, and we have more herring. Our tax has gone up, but we can't make any money on it.
MR. JOHN MACDONELL: The other thing is around the Native fishery; I can agree with these interim agreements for a year. It is pretty hard to know what is going to happen after the year, but I would tend to think that Native fishermen are not any more disastrous to the industry than some of the non-Native fishermen have been. There are all kinds of things happening where we say we don't catch people. We know what goes on, and it has gone on for a long time.
It was my understanding that certainly with the Supreme Court decision in September and then the clarification that occurred afterwards, and actually the clarification said more than the decision did, so I find it difficult that, unless Minister Dhaliwal takes a completely lateral direction on this, his indications are that whatever happens with the native fishery will have to go by regulation of the existing fishery. In other words, if they are coming into the fishery, it will have to be on the same quota system and conservation mechanisms we have in place now for the fishery as it exists. I thought - and you can correct me if I am wrong - there were about 3,000 lobster fishermen in the province, and last fall there were only about 40 native fishermen. Is that a proper number?
MR. MORROW: If I could comment on this. In the position paper we start off making it very clear that with Native treaty rights they can get into the fishery three ways, the way all Canadians get in by buying a boat, buying a licence, and just to put that into perspective, Vietnamese were sponsored by church groups and groups in South West Nova 15 years ago or 20 years ago or whatever. In Yarmouth, we have a Vietnamese family who owns a couple of fish draggers. They owned a convenience store. They didn't have any treaty rights, they came in and they worked, the kids worked in the store, and that was the way. Most of our fishermen in South West Nova, the younger fishermen are heavily in debt. They work in the back of a boat. They borrow money and they get into the fishery. Natives can get into that the same way. They have that right that all Canadians have. They also have a right that nobody else in this room has and that is the right to fish for food.
They have used that food fishery in South West Nova last year, according to DFO estimates, to take over one million pounds out and sell it and that is abuse. They now have the Marshall treaty right and I think what the provincial government has to get its mind around is, you talked about the November 17th clarification, the Supreme Court set limits on that right. They said you are supposed to fish for moderate income. You are supposed to fish in your traditional fishing areas of your particular band.
We are evolving into a longer term process. We are told that it is going to be tripartite - provincial government, federal government and Native groups, native leadership. This process, the Department of Indian and Northern Development is going to be defining what a moderate income is. They are going to be defining how much access. The Native community makes up about 1.5 per cent of the population in Nova Scotia and in the Atlantic Region, a very small group.
We don't feel, as a commercial industry, that we are going to have any problem absorbing them as long as they fish by the same rules, the same regulations, which some of them dispute, the Indian Brook Band, for example, and there are members of all the bands who say that the treaty right gives us the right to go out whenever we want, and to fish however we want, ignoring that, but this longer term process that is going to be driven by DIAND, which has a mandate to serve the aboriginal community, not to protect our historical reliance of our communities and our fishermen who developed this lobster fishery or these groundfish, and that process is going to start, the definitions are going to be made by that department and, as a commercial industry, we take no comfort in this situation. We are not part of these negotiations.
I am working as coordinator of an organization that has 48 different fishermen organizations and processors in the Atlantic Region and if you ask me how many lobster licences have been bought in area 34, I don't know, we are not told and we won't be told. We find out in the press what is happening. If a chief decides that he wants to release the details of his agreement to the press, he can do so and then we read about it. There is a meeting tonight in Yarmouth of lobster licence holders in LFA 34 and they said very clearly last fall that they want this out-of-season commercial fishery stopped. If there is somebody who wants to go out and catch their dinner in lobster, then that is okay, but the stuff of five ton trucks backing up on the Yarmouth wharf, having totes put onboard, icing these things up and taking off; we know what is happening.
There is a reason our fishermen don't sit down and gorge on lobster five nights a week. We can sell the stuff for $5.00 to $8.00 a pound and we make a good standard of living for our community because we do that and we choose not to eat it every night. The treaty- right Natives know that as well and we don't blame them, but fish inside the commercial season. That season works. We have had a good viable industry for a long time. We are also in press releases now being told that more money is to be spent on developing aboriginal enforcement officers. It is called Native guardians. We have no problem with one enforcement body out there, the guys in the green uniforms. We don't care what ethnic group they are from, whatever. They are trained. They are out there to enforce the regulations, but what we don't want to see is a separate body to enforce native fisheries and one to enforce non-native fisheries or whatever.
We are starting to call ourselves non-treaty-right Canadians as opposed to treaty-right Canadians, because in South West Nova we have some of our Acadian members, their families were here in the 1600's, and to call them non-natives - United Empire Loyalists went there. These people developed these fisheries. These commercial fisheries didn't just appear out of nowhere, people have had to work hard, and we have invested a lot of money and a lot of effort in this.
[11:00 a.m.]
It is a very sensitive issue. We are not trying to deny the Native community their right to access here in the fishery. I appeared before the House Standing Committee and I suggested that, for example, when you have bands within a half-hour's driving distance of the Halifax Airport, what is Air Canada doing, for example, to provide jobs. We have Indian Brook fishermen coming down to Yarmouth, and they will be taking money out of our community. Our fishermen buy houses, they buy cars down there, they support the local businesses. That is all we have. We lost our major employers, non-fishing related, back in the early 1990's, Dominion Textile, the Rio Algom Tin Mine. What kept those communities down there from collapsing? It was this lobster fishery, and our fishery, all the companies and the people who invest in that.
Now to have people come in from outside the area, the local bands that are down there, fine, they can fish, they are going to spend their money there. We disagree with them not paying property taxes to support our schools and all the other taxes that are avoided. Those people live in the community, they can fish down there. We would like to see them eventually buy their own boats, rather than have somebody give them to them.
There are ways this can work, but the way the federal government is doing it is they are cutting the commercial industry out of the discussion, out of the negotiation, we are called others, and we don't like it. We are very fearful about what this long-term process is going to develop into, and the province is going to be brought into this. You have an important role to play in this whole discussion.
MR. CHAIRMAN: We are on a bit of a tight schedule.
MR. JOHN MACDONELL: I want to respond. I hear everything you are saying, and I think having you cut out of the talks is a mistake. I think all stakeholders should be involved. I think people have to realize that what happened in 1740 or 1750 was that the government of the day signed a contract, that treaty was a contract. Whether people like it today or like the implications of it today, the Supreme Court has made a decision. If it turned out that it had worked to the disadvantage of the Natives, and they said, look, this doesn't apply today, then so be it. If it works to our advantage, great; if it works to their advantage, gee, what can be going on here? I know of an individual in my area, Indian Brook is in my area but this individual is a non-Native and has a boat, I am not sure just where in Nova Scotia he fishes,
but he sure doesn't fish in Shubenacadie. I haven't heard a bit of complaint about a non-Native going into another community and applying the licence that he bought. That doesn't seem to have raised any concerns whatsoever.
I certainly hope that this will encourage a dialogue. I think the federal government dropped the ball, badly, on this, had no preparation on the idea that this decision was coming down, and it just may not go in the way of the non-Native fishery, this may go to the benefit of the Native community, and we should have a strategy around how we are going to incorporate that. They didn't. I think that was a big error on their part. I certainly think that if people are reasonable - anything that is done that is not legal, not right, I think the government should act on it and apply the rules of the land to ensure that everybody fishes by the same rules that they set up.
MR. CHAIRMAN: Thank you, John, your five minutes turned into 15. As I mentioned, we do have a tight schedule. I want to thank you, Mr. Morrow and Mr. Wadman for coming. The wait was worth it. I think you understand that from the dialogue that took place around this table today. You are quite right that we could extend this meeting for probably weeks to get more information from you, but it has been most useful. As a government, we certainly appreciate our role in the fisheries in Nova Scotia, and as a committee and as legislators around this table, we take your industry seriously. I do truly believe your industry of seafood processing is in good hands thanks to gentlemen like yourself at the helm. Again, thank you very much. We will see that you get copies of the transcripts for this meeting. We hope to see you in the future. I hope you keep in touch with this committee and keep us abreast of the activities in your industry. Thank you again.
The meeting is adjourned.
[The committee adjourned at 11:06 a.m.]