HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Mr. John MacDonell (Chairman)

Mr. William Dooks

Mr. William Langille

Mr. Gary Hines

Mr. Charles Parker

Ms. Michele Raymond

Mr. Wayne Gaudet

Mr. Keith Colwell

Mr. Gerald Sampson

[Ms. Michele Raymond was replaced by Ms. Joan Massey.]

[Mr. Keith Colwell was replaced by Mr. David Wilson (Glace Bay).]

[Mr. Gerald Sampson was replaced by Mr. Harold Theriault.]

In Attendance:

Ms. Mora Stevens

Legislative Committee Clerk

Executive Director

Mr. Ronald Heighton

Member of the Board of Directors

Chair - Nova Scotia Fleet Planning Board

Praxis Research and Consulting

Mr. Rick Williams

HALIFAX, TUESDAY, NOVEMBER 22, 2005

STANDING COMMITTEE ON RESOURCES

9:00 A.M.

CHAIRMAN

Mr. John MacDonell

MR. CHAIRMAN: Good morning, committee members. I apologize for being five minutes late. I might as well get right to the agenda, the Canadian Council of Professional Fish Harvesters and Rick Williams, as well. First I think we will introduce the members of the committee and then, gentlemen, you can introduce yourselves for the record.

[The committee members introduced themselves.]

MR. CHAIRMAN: You may begin whenever you'd like.

MR. JOHN SUTCLIFFE: Before Rick goes into his presentation, I'll say a few words about the sector council. The Canadian Council of Professional Fish Harvesters is one of 30-odd national sector councils which HRSDC by and large funds to address human resource issues in various sectors. Perhaps the oddest of all the sector councils is the fish harvester sector council. As usual, with our industry, it is the square peg in a round hole. Principally, unlike other sectors - with the possible exception of aviation - the fishery, as you know, largely falls within federal jurisdictions, whether it is DFO, Transport Canada, of course, Revenue Canada and increasingly having some impact on the sector, Environment Canada with the Species at Risk Act.

In addition to that our sector generally lies at the margins of Central Canada and other regions of the country where the main part of the labour force lies. For that reason, I continually assert with HRSDC the significance of our sector as a primary employer in remote coastal regions of the country and in not so remote coastal regions of the country.

My understanding is, for example, in Atlantic Canada the fishery sector - that would be harvesting as well as the shore sector - is the largest private sector employer throughout Atlantic Canada. It's not quite so significant in the Pacific region but in the coastal economy and particularly for First Nations in that region, it's also a primary employer.

The council is formed of major fish harvester organizations in Canada, typically in what we call the owner/operator sector, the sector of generally, I suppose, smaller vessels and it's the dominant characteristic of the fishery on this coast and on the West Coast, accounting for probably 75 per cent of the landed value and probably close to 95 per cent of the labour force in the sector.

It is our mandate, as with other sector councils, to address the human resource issues. Principally, today, we've identified two general areas of concern. One is the increasingly complex regulatory environment in which the fishery is conducted, and a serious issue around what we call the intergenerational transfer, that is who will be replacing the harvesters today, and what will the structure of the industry be, how will the benefits of the fishery be shared and will that be different than today, and what skills and what do we have to do to preserve what we call the independent and the owner/operator sector.

That intersects quite a bit with another mandate that our council has, and this, once again, differentiates a certain amount from other federal sector councils, and that is the mandate to address what we call national issues of common concern. It took years for us to establish our table, because the fishing sector is particularly fractious, as you know, and the struggle over access and so on has often created deep divisions within regions, between fleet sectors, between regions and so on.

At this point in time, after several years of struggle, we have a table at which midshore, inshore, Native, non-Native and all the other competing fleet sectors sit, if they are represented by large democratic organizations. All the organizations that sit on the council sort of have to have at least 200 members, with the exception of perhaps two organizations in the country, they all sit at our table. We've built a substantial national table to deal with these issues.

I think that would be about all that I want to say. I think Rick, in the summary of his sector study - all of these councils, by the way, do these sector studies. Generally the sector studies identify the human resource issues and related issues in the industry that need to be addressed, and it's then the business of the sector council to develop strategic plans to address them. That's sort of at the core of that whole national sector mandate.

So we're at that point now when we not only have a lot of experience on the ground around our professionalization work and things like that, but also the findings of the sector study, members are now positioned to address the developing of a strategic plan to come to grips with some very substantial and serious issues facing our sector, different from region

to region often but very serious issues that need to be addressed if we are to preserve the independent and extremely productive fishing sector in this country. Thank you.

MR. RICK WILLIAMS: My name is Rick Williams. I'm a policy advisor with the Canadian Council, and I was also the lead researcher on the National Fish Harvester Sector Study, which we're going to review this morning. John, by the way, is the executive director of the Canadian Council, formerly a long-time fisherman on the West Coast of Canada. To his right, Ronnie Heighton is the president of the Nova Scotia Fleet Planning Board, representing a number of industry organizations in the Gulf Nova Scotia region, and a long-time board member of the Canadian Council.

What I would like to do is just walk through with you some of the major findings of the study. Maybe we can just discuss as we go - if that's all right, Mr. Chairman - if you have questions or comments, rather than waiting until the end. As John mentioned, the Canadian Council represents the owner/operator sector of the Canadian fishery, conservatively estimated, 75 per cent of the landed value in Canada and 90 per cent to 95 per cent of the employment.

[9:15 a.m.]

The vision of the Canadian Council as an organization is that professional fish harvesters, captains and crew, living in stable coastal communities will remain the predominant sector in the Canadian fishing industry. So when we do this sector study, we're looking at that sector, the owner/operator, independent, community-based fleets, and recognizing that they are the dominant sector, the first part of our study really did the economics on that to establish that. We're looking at sustaining that sector.

There are arguments that you're probably all familiar with that would say that Canada's fishery is inefficient, that we're falling behind competitor nations, and that independent, owner/operator, small-business sector shouldn't be the dominant sector, that we should have a vertically-integrated industry to compete with Iceland or Norway or wherever. We're not considering that point of view. We're starting from the industry as it exists and looking at sustaining that industry. There's about 36,000 people employed in the owner/operator fleets in Canada, of whom maybe 25,000 have fishing as their primary source of income.

I just handed around to you a printout that we did from the study that just shows the results of the fairly large survey that we did, but just for Nova Scotia. Then there's a second table which we'll discuss when we get to it. This is just for your information. I'll refer, at times, to a few of the tables in here. In Canada, we did one of the largest telephone surveys that had ever been done on fish harvesters. We pulled out, in these tables, just the Nova Scotia results, the almost 300 fishermen who participated in the Nova Scotia survey. They're divided into two categories, Scotia-Fundy, which would be from Cape North around to the

Bay of Fundy, and then Gulf Nova Scotia, which would be the other way, up to the New Brunswick border. Just for your information, you can look through these. There's a wide range of issues that are discussed in the survey. As I go, I'll pick up on a few of them.

The objectives of the sector study were to identify trends for the current and future needs for a skilled labour force in the fish harvesting industry. The labour force includes enterprise heads as well as crew, and the crew breaks down into two categories, people who are, in effect, apprentices who will become owner/operators in the future, or people who are permanently crew members and who will not become owner/operators. The overall goal of the study is to propose policy and action responses to address gaps and challenges that are identified in the study.

The study included an updating of all the available secondary data, particularly census data on the labour force, a telephone survey of 1,200 enterprise heads in the Atlantic Region and Quebec, 600 crew members in the Atlantic Region, 300 captains in B.C., and 170 crew members in B.C. So, as I say, a fairly large survey component. Other parts of the study included key interviews in consultation with harvester leaders, fish processor representatives, fisheries experts, DFO managers and provincial government officials. We also did focus groups with harvesters in each DFO region, regional workshops and experts meetings, international comparisons, including visits to other fishing nations, and a literature review, in-depth financial analysis of fishing enterprises with regard to rising licence prices and intergenerational transfers. That part of the study is really quite critical, but we won't really go into it today unless you ask questions about it.

By the way, for each of these components of the study - this is the overview report and we'll leave copies with you - there's a separate study that will be available on CD or off the Web page. For example, there is a fairly in-depth analysis of the financial dynamics of fleets and fleet viability, and then community case studies in seven coastal rural regions, which I'll touch on here.

I'm going to run through the big picture, what were the overall findings of the study or what sort of conclusions do we draw from it. First of all, one obvious kind of statement to make is that until recently, I would think even now, when most policymakers look at the fishing industry, they have their heads fixed on the notion of too many fishermen, not enough fish, that the problems of the industry are that there are too many people. This study is going to attempt to change that mental set, which is not to say that there are, right now, too few people but that in the future there is that danger, that we will not have the people we need to run this industry; and that issue of too many people is quite complex, it's not a simple notion. In some fleets there may be reasons to look at restructuring and perhaps reducing capacity but in other fleets, that's not the issue.

We want to challenge that assumption about too many fishermen and start changing the policy frame toward, how do we have the people with the skills in the places where they're needed for this extremely valuable fishery in the future.

MR. WAYNE GAUDET: Can I interrupt?

MR. WILLIAMS: Yes.

MR. GAUDET: How would you respond to there is not enough fish for everyone, or is there?

MR. WILLIAMS: One part of the study that didn't get funded was to look at the resources and what the current and future resource supply is to say, what's going to be the groundfish industry or how many people are going to be needed in shellfish or whatever, so we weren't able to do an in-depth analysis. We did do kind of an overview of that and we looked at the past 30 years. Again, the predominant notion in the media is that the fishery is on a downward track, less and less fish, the world is collapsing, the sky if falling. In actual fact that's not what is happening, we have stocks that are up and we have stocks that are down, and we have a constant issue about managing them on a sustainable basis. I think we haven't gotten that under control yet but it's not an unmitigated disaster everywhere.

For example, in Harold's region - and I guess in yours, too - we're looking at some of the biggest year classes in haddock that have ever been recorded. So there's a stock that may come back and there will be a big debate about how you manage that on a sustainable basis. Our lobster stocks in Ronnie's area are in trouble and in other areas they're very strong and so on. It's an issue of the complexity of the fishery and how do we manage on a sustainable basis, and that's the problem we would like people to focus on, rather than too many fishermen, the simplistic notion that right across the board the problems would be solved if we got rid of most of the fishermen. With this study we're trying to change the mindset and hopefully affect the public attitudes toward the fishery.

There's a second area in which we'd like to challenge the policy mindset and the public mindset which is the picture of fishing as unskilled. Someone at a DFO meeting a week or so ago referred to the fishery as employment of last resort. When that person said that, about 10 other DFO people in the room came across the table at him and said, are you joking, look at the incomes people are making in parts of Nova Scotia in the fishing industry. It's not a job of last resort, it's an extremely valuable, strategic industry and in particular, it's not an unskilled trade. To make your living in fishing you have to have a lot of skills, it's a knowledge-intensive industry in terms of the range of tools and technologies that you use, knowing the fish, knowing the conditions in which you work, operating safely and so on. So we're trying to challenge that idea.

The real problem with the fishery is not that it's an unskilled trade at all, but that it's not what we call "professionalized" in the sense that the knowledge and skills are not defined. There's not a formal system of recognizing or certifying the knowledge and skills people have in the industry, it's kind of invisible. In our view, and we think we have substantial evidence, it is a high-skilled, knowledge-intensive industry.

A third kind of general notion that we're putting out with this study - everybody has known this but we've actually kind of quantified and really defined it very clearly is, how does this industry - again, it's the leading export producer in Nova Scotia over the last 30 years, it's a foundation industry in our region - produce this highly-skilled labour force in the absence of a formal training system? When you compare it to carpenters, brain surgeons, whatever, how do we produce the skilled people we need who are willing to work under these conditions?

What we've defined through this study - and you'll see a lot of it in the survey results - is a system of what we call "informal apprenticeship". A great majority of people acquired this substantial body of knowledge and skill on the job, working with mentors in their families and communities, and so on. So there's a system of training and preparing the next generation of skilled workers in this industry that's, again, like an iceberg, most of it is below the surface. We're very concerned about that and I will come to why we're concerned about that shortly.

Another thing that we've quantified with this is - like every other skilled trade or professional occupation - we have a demographic bubble moving through the labour force and it has significant implications. Conservatively estimated, half of the enterprises in the fishery in the Atlantic Region will change hands within less than 10 years, we're basing that on survey results from early 2004. So think of any other industry, again, we have a problem with electricians, carpenters, school teachers, or brain surgeons but here we're not talking about just skilled individuals in a labour force, we're talking about people who own and operate businesses. So not only will the people change, but the ownership of the assets of the industry are going to change. Who's going to own them after 50 per cent change hands?

Given all of these things, we're concerned - and we have evidence from the study to corroborate - that the owner/operator, community-based fishery may be dramatically weakened or displaced over this next 10-year period, unless there's a substantial public policy response to grant that.

First of all high licence prices are a significant barrier to retention and control of licences within the owner/operator, community-based sector. There are tremendous pressures to consolidate, control ownership because either the licence has quota attached to it, so someone owns the fish, or the licence provides access to the resource, say in the case of lobster, and ownership or control of the licence means control of the resource. Will

independent, community-based small businesses be the predominant sector 10 years from now.

MR. CHAIRMAN: Rick, so what you're saying is 50 per cent of enterprises that change hands by 2014 will not change hands and be the same as it is, is what you're saying, it's not going to be owner/operator, half of it's going to go to operations.

MR. WILLIAMS: Yes, if you look at Nova Scotia alone, that change has already happened in the last 10 years in groundfish, in scallops and herring. All that's really left, in terms of the community-based owner/operator fleet is crab and lobster, and we'll come to that. Nobody noticed - Junior noticed and the fishermen noticed, but in terms of a public policy discussion, there was no real substantial debate about whether or not those kinds of changes should take place in those other fisheries.

MR. CHAIRMAN: But the areas it has already changed, is it 50 per cent that's lost, or is it 75 per cent that is lost and it's still only 25 per cent that is owner/operator, or if it's 50 per cent are we going to lose the other 50 per cent in 10 years?

MR. WILLIAMS: Ronnie might comment on this but I would say in herring and scallop it is 90 per cent lost. Groundfish still has an owner/operator component there, I'm not sure that the percentage would be.

MR. RONALD HEIGHTON: On the north side of Nova Scotia and on the Gulf side it would be more owner/operator yet or get in the ground fishery but if you look at the concentration when the ITQ system was implemented in Scotia-Fundy, it concentrated the licences and, of course, the landings in certain areas. I would think on the north side of Nova Scotia we still have a bit of owner/operator where on the south side, it seems to be diminishing fast.

MR. SUTCLIFFE: I think it might be worth mentioning in addition to this intergenerational issue having potential significant impacts on who's going to be fishing and who's going to be controlling access to the resource, there are other things as well that can speed that process up, like the management of the fishery, licensing arrangements and so on can add additional impetus to change. It's not just who will be able to purchase fishing enterprises that will substantially, potentially, alter the nature of the fishery, but licensing changes as well can have the same impact among existing licence holders, that substantially change the nature of the fishery.

[9:30 a.m.]

MR. WILLIAMS: I don't have a bullet here for that but we do have DFO pushing hard in some really important fisheries for ITQ management, particularly, right now, salmon on the West Coast. It keeps surfacing in relation to lobster, I keep hearing it coming back.

The high licence prices, outside investors on this coast that's contrary to the owner/operator fleet separation policy, but we know it's still happening through trust agreements. On the West Coast there is no owner/operator fleet separation framework to start with. Then on a more basic level, as you're all aware, in Nova Scotia we have fewer young people coming up into our rural industries because of depopulation of rural areas, out-migration of youth. The jobs in some of our seasonal industries are not competitive anymore in a situation of shortages of skilled labour.

Young people growing up in our rural communities have lots of options for more attractive careers, so our industry may not be competitive to draw young people into the industry because wages have gone down for crew in some fleets, fewer fishing opportunities, shorter seasons, et cetera. Generally speaking, the conditions are not real positive for replacing the current generation of highly skilled owner/operator and professional crew.

The report points to a number of key policy areas and some of the key ones are federal jurisdiction but some of the key ones obviously are in the provincial sphere. It's not that one of these is a solution, all of these things would need to be dealt with in a coordinated way if we're going to have a sustainable, independent, owner/operator fishery.

First of all we need to look at the maintenance and intergenerational transfer of the knowledge base that's in the industry now. All of these people who are in their 40s, 50s and 60s who are going to leave over the next 10 years, how do we make sure that their knowledge and skills are passed on? I'm sorry, I'm ahead of myself a little bit, but what I'm looking at here is what are some of the reasons why it's in the public interest to maintain?

Every couple of months we see an article in The Globe and Mail from - what's it called, the enterprise institute, Brian Crowley's group, something like that - calling for the vertical integration of the fishery and so on. What are some public policy reasons why we wouldn't go that route, why we would maintain an owner/operator fishery? One thing is maintaining the knowledge and skills base, a skilled labour force. The second thing is, the fishing industry is a critical component of the rural coastal economy and helps to hold in place a labour force for many other rural-based industries which are also seasonal, which would have difficulty. If you allow one major component of the rural economic base like fisheries to weaken, it's like a domino effect on other parts; forestry, tourism particularly, aquaculture, oil and gas development.

You know, 75 per cent of Nova Scotia's exports are generated in rural-based industries, including a big chunk of our manufacturing from Michelin and so on. The rural economies are a critical factor and the fishery is a key component. We also think and want to forcefully argue that maintaining a dominant role is wild fish harvesting, for people who live in the communities, live on the coast, have a long-term stake in conservation and sustainable harvesting is key. We've certainly noticed that in our international comparisons

of different countries and how they manage their fisheries, that sustainability is directly linked to communities that have a long term investment in the resource.

Then there are coastal peoples - First Nations and so on - who have a right to live where they live and have access and control over their adjacent resources. That's not just First Nations, in Nova Scotia it's Acadian people and general people who have a multi-generational commitment to the fishing industry; they have rights too. Coming out of that is a range of policy areas that we think would have to be addressed in a coordinated way to make the owner/operator fishery sustainable.

First and foremost on the Atlantic coast, if the owner/operator and fleet separation policies are not maintained and enforced, then it's game over. What happened in scallops, herring and groundfish, as John said, is about changes in licensing policy, subtle and almost below the radar, that have dramatically changed the economic structure of those sectors, those fleets. We have lobster and crab left, and if we don't maintain owner/operator fleet separation then we're going to see a dramatic reduction in employment and community sustainability.

MR. GAUDET: Mr. Chairman, can I ask the million dollar question? Looking at the fact that money basically has taken control over scallops, herring, what kind of guarantee is there that crab and lobster will not be taken over by large investors and companies? It's happening at home, along Digby and Yarmouth Counties. I look at the last year - I hate to even look at what the next year will bring, because I know what it's going to bring. Anyone who basically is arriving at a certain age, who is considering leaving the industry, when the cheque is before them it's hard to say no. That has been happening more and more.

Looking, again, at the experience that the sector has seen, especially in the last five, 10 years, we know it has happened in other sectors, and I'm listening to some of the people at home, talking about crab and talking about lobster, hoping that that operator will continue to have hold of those, but I'm not convinced that's going to happen.

MR. WILLIAMS: Everyone here will have things to say about that. Our survey suggests - for example, we asked the question to fishermen, when you leave the fishery and retire, what is your goal, what would you most like to do? Two-thirds of the respondents or more said I want to keep the licence in the family or the community, and 25 per cent or 30 per cent said I want to sell it for the highest price. We still have a situation where the great majority of people in the industry would choose or would prefer to see sustainability of the owner/operator sector, but that one-third really calls the shots. Even if it was 15 per cent, if they're selling their licences for very high prices and so on, that creates an environment in which there are pressures and temptations.

We have some data in the study. We don't know who is buying the licences outside of the owner/operator category. There are two general things that are happening. One is processors or other non-fishermen, through trust agreements. There's some indication in the survey results that about 40 per cent of licences in Nova Scotia that have been sold recently were sold through those mechanisms. But the other thing that's happening is that individual fishermen are buying those licences, putting them in somebody's name and building up multi-licence family enterprises, which is a different story. It's a bit more of a grey area, as to whether or not that's a problem. It's breaking the rules, strictly speaking, of the owner/operator fleet separation.

When our organization advocates a policy of professionalization in the fishery, what we mean is that there are standards and criteria that define a professional fisherman, and they're the only people who are allowed to own those licences. It's one core enterprise per fisherman. That's what we would prefer, but we think that if the policy is clearly articulated and enforced, the great majority of fishermen will go along with it, but we can't guarantee anything. Do you want to comment?

MR. SUTCLIFFE: I would take quite seriously the issue you raised. If a fisherman who probably doesn't have a pension plan, like so many other people, is offered a high price for his licence, and the price is higher than what he might get if he were selling to the crewman who had been working with him and lived in the community, or his son or daughter, I don't think it's just a matter of temptation. I would probably tend to agree with you that it's the real choice that most people would make. Frankly, I don't see why you would expect fishermen to be any different than any other people in that regard.

I think, as you know, fishermen are operating under some constraints that make the decision more difficult. Fishermen don't have an even playing field on the tax front, as you're aware, that other small businesses do, in terms of the intergenerational transfer, in terms of income tax and so on, that we feel must be addressed. If and when it is addressed, it will help level the playing field. It's extremely difficult at the present time for a father to pass a $1 million fishing enterprise on to his son or daughter, because the deemed value will be a value upon which he pays a capital gains tax, $0.25 million. So even if he wants to give it to his son for $1 or $1,000, he's going to be taxed as if it were a $1 million enterprise, and he has to pay that $250,000, and not only does he not get a pension plan out of it but he goes - so we need to fix that. Every other Canadian small business has that opportunity. Why don't fishermen?

In addition to that, when the fishery is lucrative, and other investors, whether they're processors or dentists out of the country even, take a look at the sector and take a look at quota and licence and enterprise as an investment, they often have quite favourable conditions under which they consider the fishing enterprise as a fair investment. They probably can access much lower interest rates than fish harvesters can. I'm not certain that the researchers would altogether agree here, but I think that if we look at some of the

analyses more closely than we have in the sector study, I think that you would see, possibly, that the current value of enterprises - if a young fish harvester had the opportunity for interest rates and a period to spread the loan over that other investors do, be they a processor or some other such interest, the fishing enterprise would become a much more viable activity whether it meets the current high levels of value or not.

All of which, I guess, is to say that I think if fish harvesters, fishermen, had an even playing field, the dollars a retiring fish harvester would be offered for his licence by a new entrant in the fishery wouldn't be that different from the dollars some investor is going to offer him. So one of the things we say is level the playing field with respect to tax policy, with respect to access to capital, and with respect to being able to borrow against licences. At least give us an even playing field so that young fishermen have a chance to stay in the industry and can compete with other investors in terms of the preferential rates and other conditions they operate under. I'm not saying that altogether fixes the dollar issue, but I think it comes very close. Perhaps we need to do a little more analysis on that.

MR. GAUDET: I'm looking a little further. As a private small or medium business, shouldn't those people have the right, if they want, to exit the industry, sell to whoever wants to buy? Shouldn't they have that right? I know of two close friends who are around 50 years old, both were lobster fishermen who decided to sell. They're out of the fishing business. I remember hearing from those very same individuals, talking about keeping those licences for owner/operators, and then I asked myself - they were preaching to me that there was a need for this, for whatever reason, and I respect the choices they've made. They certainly have those choices, and they decided to leave, sell and move on.

[9:45 a.m.]

I'm trying to understand the big picture here looking at some other sectors that have gone through this whole process, basically most of the industry is now controlled by someone outside of the industry, and then I'm looking at crab and lobster, and I've been hearing this for the last five years. Then I'm seeing people who have been telling me this is the way to go, and all of a sudden, my God, they do just the opposite of what they've been telling me. At the same time, I do respect that after having been in this industry for 30-plus years, they should have that choice. I'm just trying to better understand if it's possible to bring some type of control to keep it to owner/operator, especially in those two industries, crab and lobster.

MR. SUTCLIFFE: Well, it is public policy at the present time that the inshore fishery will be done by owner/operator, that there will be fleet separation, that it will not be vertically integrated. It goes back to Romeo LeBlanc. I think the notion behind that public policy was, apart from that 200-mile limit and the great bonus the offshore got in terms of quotas and so on at the time and the bone they threw to the inshore at the time was that they would have those resources. But those resources became extremely valuable, and that's the valuable sector of the fishery today, and it's the owner/operator fishery.

If you were to change that policy - well, I think the notion behind the policy is to protect communities, to protect the livelihoods of people who have depended on that resource, and if you lost it I think you would quickly see the concentration of a fishing effort in a few regions. I have in the back of my mind the example where all the fishing activity is increasingly concentrated in the lower mainland and one or two other regions. I know history changes. At one time there were 90 canneries operating up and down the coast of British Columbia. Now that's a long time ago, but today there are half a dozen and they're in two locations. The employment in those canneries and the fishermen who increasingly own more licences and fishing companies that own 40 per cent of the licences are concentrated in a few areas of the coast.

In addition to that, and this is one thing current harvesters, I think, are very concerned about, as that concentration occurs, the value of the harvesting sector and the contribution it can make to the rural economy goes down. At 25 per cent or 30 per cent of the control of harvesting in the hands of, say, processing interests, the live market for fish is effectively controlled. The substantial prices in the shellfish industry that fishermen have enjoyed in recent years disappears. That vibrant economy in many areas, based on the shellfish fishery, deteriorates quickly.

So there's the notion behind the owner/operator fishery and the fleet separation policy, in particular, is to build a strong economy in fish harvesting to maximize the landed value of fish, basically, rather than to have it move up the pipe, a vertically-integrated industry, which would deprive the fish harvesters and their communities of capturing a large-value resource. Frankly, examples in other areas, or something you can go by, it only takes a limited amount of control of access, like 20 per cent, 25 per cent before you can set prices for fish. That very quickly leads to the collapse of the viable fishing economy.

MR. CHARLES PARKER: If I might ask a question, Mr. Chairman, or just interject for a minute. The problem is certainly that the owner/operator policy is not being enforced. I'm wondering, the policy has been there since 1977, and at that time, like you mentioned, John, it was less important, but now, today, it's very important. Is it by design or is it by omission, how is it that it's not being enforced? Is the federal government, through DFO, not pursuing it because they want to see corporate Canada take over the fishery, which does not make sense to our communities and to our fishing families? Or is it just hands off, let the sharks invade and take over? It seems to me the policy is there, and it's designed to protect our individual fishing families and our communities, but yet it's not happening. Is it just a laissez-faire attitude, just let things be, as they happen, let the natural market force take place, regardless of the consequences? It's certainly not good for our Atlantic economy, that's for sure.

It seems to be that, and combined with the other federal part of it, the tax issue on intergenerational transfer, again, there's been push, there's been initiative, I think all political Parties, at one time or another, have been pushing for that. It would make a tremendous difference in transferring it to their son or daughter or whoever. Is it federal government policy here that's part of the problem, either a lack of enforcement or just not allowing a proper tax policy to come in? I can talk about the provincial government policy, too, but I guess I want to ask about the federal government first of all.

MR. HEIGHTON: The federal government, in the two areas they have, the Maritime Region, in Scotia-Fundy on the south side of Nova Scotia, and the Gulf region, are entirely different. On the Gulf region, DFO has supported the owner/operator. They even went through a large court case in northeastern New Brunswick over the owner/operator principle. At the same time, DFO in the Maritime Region, they've turned a blind eye to it and are allowing people to circumvent the policy.

All of the trust agreements that are in Scotia-Fundy are illegal, but there's nobody who's going to stand up and say that. And the more they're allowed to be there, the more concentrated the fishery is. I'll give you an example. We were at the fish show in Yarmouth last year, and there was a certain individual, I won't name his name, who came in and was bragging that he had acquired 12 fishing enterprises. He said I own 12 licences, and I drive a Hummer. One of the guys who was with me said, well, so what? If they belonged to 12 different individuals, they would all be driving a half-ton truck.

The point being when these guys are allowed to do this, they hurt their communities immensely. And coming from a small community of 480 people, I can tell you, you can see it when things like this happen. When that man with the 12 licences makes his financial commitments for the year, once he has spent all he needs to spend, the rest of that money is invested in New York or Tokyo or Toronto or somewhere else, and it doesn't get into the community. That causes our small coastal communities to die. We lose our banks and we lose this and - everything goes. At a time, and this is a very crucial time, all governments should be trying to maintain the owner/operator and the fleet separation policy for both sides of Nova Scotia.

MR. PARKER: I agree, Ronnie, it's a real problem for our communities and for the future of our whole province, really. The question is, why is the federal government not enforcing the policy? Why isn't our provincial government pushing it harder to ensure that we maintain our rural communities? A strong rural base is a cornerstone of our economy, it makes so much sense. I'm just wondering if there's another agenda out there, why it has been allowed to happen.

The province not only has an obligation to push the feds to get something done here to maintain our owner/operator policy, and while they talk the talk, they're not always walking the walk, are they? They are saying one thing but I see there's not much real support

of that policy. The other part is access to capital, isn't it? That's something else the province has a lot of responsibility for, I think. If the young fishermen can't get access to capital then it's going to turn to somebody who has the money and that leads to a trust agreement.

Through our Nova Scotia Fisheries Loan Board we have the opportunity to provide money to our young new entrants coming in for boats and gear, and for licences if they so wish, but that's not happening at this point. We've been pushing government to do that and that's one way they could allow new people into the industry and allow our fishing enterprises to remain in our communities. It seems to me there is a lot that government can do at both the federal and provincial level.

MR. HEIGHTON: Especially in the licensing part. Just a bit of information, if there was a small policy change made to the way licences are reissued, then a fisherman could finance the person who wants to buy his enterprise out. The way the policy is now, you can't get your own licence back unless it goes through a third name. If I wanted to sell my enterprise to John and said, okay, you pay me x amount for the next 10 years but he defaults, I can't take it back, because it has to go to Rick and then back to me. That takes three years or so by the time you go through the system.

Small policy changes could make a big difference because that way I could have a financial agreement with the guy who has fished with me for 10 years and he says, okay, I'd like to buy you out when you're ready to go, I could step back and he could step in and then if he defaulted, I could take it back. Those little policy changes could be made by the federal government but there just doesn't seem to be any will.

MR. SUTCLIFFE: On the matter of trust agreements, it's just a category of civil contracts, there are all kinds of them, they do all kinds of things. One of the things they do is a trust agreement between fishermen for the sale of a vessel, or with a single fisherman and an incorporation that he wants to do to gain advantage of tax. There is a whole substantial number and the majority probably - although nobody knows, not even Revenue Canada - of the trust agreements are not trust agreements that control the final disposition of the licence that send it to a foreign investor possibly, or to a processor, or to some other investor interest, which is the concern we're expressing here.

Why that situation developed and has gotten out of hand, particularly in some fleet sectors, is difficult to tell. I think it just started happening and was not noticed. By the time it was noticed by government it was just sort of a messy thing to have to deal with and probably, some people, whether they were some politicians or senior bureaucrats, just hoped that nobody would notice and maybe it would go away. In some regions I think there was active support for that policy and kind of an ideological or theological commitment to letting the market make all these decisions in the fishery.

Members of the Canadian Council certainly noticed and raised the issue. I'm happy to say that the Department of Fisheries and Oceans, and the current federal minister, did take notice and attempt to address the situation. I don't know what the current political uncertainties are going to do to this initiative but there was a thoroughly advanced process for dealing with trust agreement problems in policy and in licensing arrangements. What will happen to that initiative at this point, I don't know. But that initiative, by itself, is not probably enough to address the situation, it will require other provincial supports and so on, like arrangements for access to capital. It will also include - and it's part of the initiative act, interestingly enough - Revenue Canada adjustments, as well.

[10:00 a.m.]

All of the pieces are out there, the recognition is there, the concern around the problem, and the speculation - some of which we've done today - about what happens if we don't protect this fleet sector, is all on the table now and that's a good thing. Whether we get to deal with it when we have this opportunity remains to be seen. Whether we get to properly address the problem and make sure we get the outcomes, which, I think, everybody would acknowledge we need here, remains to be seen.

MR. HAROLD THERIAULT: Gentlemen, we have started a little process here through the loan board for access to capital for our young fishers. We just made an amendment to the bill that was put into the loan board to open up more capital for fishermen; we put an amendment to that to loan this money, to use the licences as collateral to the loan board. We sent a letter to Minister Geoff Regan to accept this and to make that tiny policy change to make this happen, at least to give us a level playing field, like you say, for our younger people. Right now it's just big business and the Aboriginal fishery that's taking control of it.

You fellows have said it all here just as plain as could be, you couldn't say it any better, DFO wants the hell out of this because they don't know how to run a fishery, they never did. If they can give it to a dozen companies and to the Aboriginal people, satisfy a few of them on their way out, they're happy as hell. They couldn't care less about Digby or Cape Breton or anywhere else.

If this inshore fishery goes out of this province, with what we have left in crab and lobster, this province will never be the same again. This province is going to change forever because 50 per cent of the economy in this province comes from these coastal communities, if not more, that's a low, conservative number. It is going to be a big change, we've seen it in our groundfishery, we've seen it in other fisheries.

We have a herring fishery being cut back now to a dozen seiners, they're even going to cut back on them. We have the Scottish fleet coming into Lunenburg now going to fish our herring up, talk about foreign affairs taking over. Man, where are we going here? I know

where we're going, we're going to hell in a handbasket in these coastal communities. You fellows have been preaching this for years and every one of us in the inshore fishery has been preaching this, leave the inshore sector alone and let these coastal communities survive. If they don't, if we don't stop this, and if Geoff Regan doesn't stop this by the end of this year and make this happen, his legacy is going to be that this province is going to hell in a handbasket and he was part of it. That's all I have to say because you fellows have said it all.

MR. CHAIRMAN: Rick, I'm just wondering where you are in your presentation?

MR. WILLIAMS: About halfway. (Laughter)

MR. CHAIRMAN: Mr. Theriault, when you talk about low numbers and conservative numbers, I have used low and conservative interchangeably but just be careful. One thing I'm not going to let you get away with, I don't think the Native community is part of the problem here.

MR. THERIAULT: No, I said DFO. DFO has started to try to satisfy the Marshall decision and they will take what money they can to try to make that happen for the Aboriginal people.

I have nothing against the Aboriginal people coming into the fishery. In 1999, I was part of them coming into this fishery and said it was a great thing.

MR. CHAIRMAN: That wasn't the interpretation I got so I just wanted to verify that.

MR. WILLIAMS: I feel compelled as a researcher here and not as a representative of the fishermen's organization, to point to a worry that comes out of this study. For Don, or Ronnie, or others in a fisherman's organization, it's very difficult to say in public that fishermen shouldn't be allowed to sell their enterprises to the highest bidder. Our research findings suggest the need, one way or the other, to regulate the market for licences and quotas in the fishery.

I handed around this table, survey results that show that when we asked fishermen if they sold their enterprise right now what they expect its value would be. We also asked them, what was your total earnings from sales of fish in the previous 12 months? So it goes down through all the different fishing fleets, these are all lobster-based inshore fleets except for specialists and then in Newfoundland and Labrador. The "N" is the number of fishermen who responded to the survey. The catch value is what they said their total earnings from sales of fish was in the previous 12 months. The fishing enterprise was what they could sell their whole enterprise for right now, licences, boats, gear. The factor is the total selling price of the enterprise divided by the catch value. In other words, if you were going to buy a grocery store or any business, you would look at what price you would pay for that business based on its revenue flow, what can you earn from it. This is crude, you're asking people's

opinions, but the factor is that, for example, in LFA 33 people said they sold on average $81,000 worth of fish and they could sell their enterprise for $243,000, so that's a factor of 2.99 per cent or about 3 times.

As part of the study we also - and there are separate reports - had an accounting firm and experts in evaluating businesses and so on do their analysis of all this, plus we did detailed case studies of 10 enterprises. As a general, very crude rule of thumb, a ratio of three to one is a reasonable basis to buy an enterprise of any kind, a garage, a corner store, a restaurant, anything. You can afford to finance it if you can pay a price that's not a whole lot more than three times what its annual revenue is. So you can look at that ratio when you go to LFA 34, it's 3.72 or LFA 27, 28, 29 in eastern Nova Scotia, its 3.62. That difference, just crudely speaking between three and those higher numbers, to us represents a kind of inflation or upward pressure on the prices that is beyond what the actual business value of the enterprise is.

When you look over at the ratio's vessel and gear, take LFA 34, for example, the vessel and gear were worth $292,000, roughly, or 1.1 times the sales of fish. The licence is 1.68. If you go down those factors - licences and quotas is 1.6 - you'll find that in almost all cases the licence or quota, i.e. the piece of paper or something that says you're allowed to go fishing, is worth more than the boat, the gear and everything put together. Because of Marshall, because of trust agreements, et cetera, there's a market now in access rights and there is upward pressure on that market because other investors are coming in who don't have to pay for it or finance the business out of actually persecuting the business, or prosecuting the business, sorry - persecuting the fishermen, prosecuting the business. That tells you that there is something wrong here.

From a research or policy point of view, we think that proper regulation of this industry would change that. The Nova Scotia Department of Agriculture and Fisheries did an investigation into making loans available through the loan board for the purchasing of licences. They came to the conclusion that it was not a good investment, because at these prices the young fishermen would not earn enough money out of the enterprise to be able to pay off their debt and they would have more foreclosures. Then you'd have this problem of paying all this money for licences, and it's difficult to get your money back on a licence.

Our research would support that conclusion, that until licence prices come down to a better ratio - of course with fishing it's all speculative, who knows what lobster will be worth five years from now. The American dollar, the markets, disease, stock collapse, whatever, it's a gamble, it's a big gamble. So for fishermen to be paying more than three times the annual earnings to get that piece of paper and to be able to go fishing, it's a big gamble.

We think that the market for licences and access should be regulated, so that there's a better - for an owner/operator, young fisherman, whatever - investment climate. That means, as John was saying, fully enforced owner/operator fleet separation, so it's only fishermen who are buying those licences and who are the only people who are going to finance the licence out of the earnings from the enterprise and not from some other bucket of money. We're looking at expanded education and training so that they can run those businesses more efficiently, more effectively, more sustainably. And we're looking at tax measures and financial resources to facilitate the purchases, the intergenerational transfer.

All those things together need to be part of the solution of that problem. Just fixing the owner/operator fleet separation is like the finger in the dike, it will prevent the collapse in the next five to 10 years, maybe, but it will just slow down the overall process unless these other things are in place.

I think I'll leave that, just to quickly run through a few more points. Informal apprenticeship - I said earlier that the way in which the industry replaced or continually renewed its labour force was not through formal training and certification and so on like in other trades and professions, but through informal - people growing up in the fishery, usually in family enterprises. There is some really interesting data came out of that, just to quantify that. In Nova Scotia, for example, overall, the age profile, 45 per cent are 50 years or older and the average age is 49. Only 24 per cent of owners/operators right now are under 40 years of age. We say half will leave - it could be a lot more than that, if three-quarters of your people are over 40 right now - over the next 10 years.

The current captains, the current generation of captains, who did they get their licences from: 36 per cent got it from a family member in the Atlantic; 24 per cent from someone in their community, 35 per cent took over a licence from someone they worked for, either family or community in the Atlantic Region. When we asked the crew, who did you work for: 59 per cent worked for family members, father, brother, uncle, whatever; 38 per cent worked for somebody in the local community, in the Atlantic Region. When we asked the crew members, those who wanted to become captains, owners/operators, who would you get your licence from, 46 per cent in the Atlantic Region said from a family member, 32 per cent said from another licence holder in the community, and 65 per cent said from someone who they worked for, either family or community. That's the way the industry operates, predominantly. It operates within family and community network.

When we asked the crew, what are your future plans, 39 per cent in the Atlantic said they would like to become owner/operator. That's a good ratio. In other words, if one out of three wants to become a captain, then you're basically reproducing your labour force. Compare that with 12 per cent in the Pacific, where you don't have an owner/operator fleet separation environment, and the crew have no hope of becoming owners/operators. That's the direction we're going in.

We asked both captains and crew, were the current costs of licences a barrier for a crew member to become a skipper. In the Atlantic, of the crew, on a scale of one to five, the highest being five, 48 per cent of crew said very serious, 64 per cent of captains said high licence prices were a very serious barrier. I went through that table.

We've traditionally replaced our skilled labour force through informal apprenticeship. Our concern is that that system is breaking down, that we aren't going to have the skilled people in place, as professional crew or enterprise heads. First of all, there are fewer enterprises to provide jobs, less so in Nova Scotia than in any other region but it is generally a problem. There are shorter fishing seasons, so there's less opportunity to get in, to earn money, to learn the trade. Generally speaking, for crew, wages have gone down. Again, less so in southwest Nova Scotia, but everywhere else wages have gone down markedly.

[10:15 a.m.]

Young people are under a lot of pressure to get into skilled trade jobs in other sectors, the young people in rural communities. I can go fishing for three, four, five months a year and earn x, or I can be a plumber or a school teacher or whatever and work a full year, et cetera. So we have a general out-migration from the fishing communities generally, and then we have that barrier in terms of the high cost. So a lot of young people look at it and say, I'd like to go fishing but I have no hope of ever owning the enterprise. Who wants a lifetime of seasonal work for $15,000, $20,000 a year plus pogey? It's not an attractive career.

The second table is, I think, very striking - this one in the handout I gave you. We broke out census data for specific fishing communities. We drew a line on the map and only looked at those communities. So you can look at LFA 34 in Nova Scotia and LFA 25 in New Brunswick, which is very similar to the area where Ronnie lives in Nova Scotia, along the Northumberland Strait. The total labour force of all industries 15 years and over in LFA 34 was pretty stable, a -3 per cent drop. In LFA 25 in New Brunswick, a 6 per cent growth because of the growth of Moncton, I guess.

When you look at the 15 to 34 age group, the young component of the labour force, the group that is having children, who are really the sustaining power of our communities, there's a 26 per cent decline in LFA 34, and 22 per cent in LFA 25, and in other areas it's more. Then we look at the fish harvester labour force age, and that includes captains and crew, 15 to 34 years of age, and we have a parallel decline in LFA 34 and across the board. Young people in general are just not in our rural communities and in our rural industries. The total fish harvester labour force actually grew by 5 per cent, because the fishery was strong in LFA 34 but the young people are leaving anyway. So that very graphically illustrates the challenge around, where are the apprentices to take over the future of our industry?

We have some policy recommendations in that area, and mainly it's one that falls in the provincial government orbit, which is if we're not going to replace our people, our skilled, knowledgeable labour force through the informal stream, maybe we need to build up our formal stream and make it workable. We need a renewal of formal training options that are affordable, that are accessible for people living in coastal communities, and that also prepare them for life in those communities. What a lot of people are going to have to do is they're going to have to work in other industries in the off-season. They've got the skills. Fishermen have the skills to do it. Most fishermen run small businesses, they have all kinds of technical skills, carpentry, electric, hydraulics, mechanics, all these things. They can work in the tourism industry. They can work in a range of areas. So having an overall strategy for having what some of our fishermen, when we did a workshop on this, call survival skills, being able to survive and thrive in rural communities.

So that's one area, the training system as part of a renewal of rural communities and the rural labour force, and then the second area - and I think you have to address the same issues in other industries, forestry, the trades, a variety of industries have the same challenge around a skilled labour force in rural areas - financial supports for new owners/operators in terms of the loan board, using licences as collateral, capital gains tax that John mentioned, and professional incorporation as an option we put forward.

Now I will mention in relation to that previous discussion, and Harold has touched on it, the John Hanlon process is completed. John Hanlon has put proposals in front of the minister that will close the trust agreement loophole and that will address the incorporation question so that there is a level playing field in terms of the tax hit. They're sitting on the minister's desk now. I don't know whether this committee does things like sending letters to a federal minister saying, before you end this Parliament next week, or something, the minister has the power to sign those things into effect, we hope you'll do it, that we don't have to go through this all over again. It has taken two or three years to get where we are right now, where the minister has promised to fix the trust agreement issue and the tax incorporation issue and we don't want to let him off the hook.

As we understand it, correct us if we're wrong, the minister can do this, it doesn't have to go through Gazetting and all those things, it's the minister's prerogative. Maybe I will stop there.

MR. CHAIRMAN: I want to say thanks, number one. I'll read you this and I'll give you a copy but I want your reaction, if I could have it.

This committee sent a letter to Minister Regan dated March 8, 2005,

"Dear Mr. Minister:

Recently the Standing Committee on Resources held a meeting with the Gulf Nova Scotia Bonafide Fisherman's Association and the Guysborough County Inshore Fisherman's Association. A motion was unanimously passed at this meeting which reads as follows:

The Standing Committee on Resources would like to express to you it (sic) unanimous support of the federal Owner Operator Policy in the 44 ft. 11" and under small boat fleet in the Inshore Fishing Sector.

The Committee would like to encourage you as the Minister Responsible for this policy to ensure that this policy is strictly enforced in the future.

Included with this letter is . . . the Tuesday, February 8, 2005 meeting transcript. Thank you for your attention to this matter."

This is the minister's response, dated June 9, 2005:

"Thank you for your letter of March 8, 2005, articulating the Nova Scotia Standing Committee on Resources support for Fisheries and Oceans Canada's Owner-Operator Policy. I know that this is an important policy for Atlantic fishers, and I want to assure you that I am committed to working to maintain a vibrant, economically competitive, and ecologically sustainable Atlantic fishery.

As you may be aware, in January 2004 DFO held consultations on a discussion document entitled, 'Preserving the Independence of the Inshore Fleet in Canada's Atlantic Fisheries'. The purpose of the consultations was to seek the views of the fishing industry and other stakeholders on some aspects of DFO's licensing policies: in particular the Owner-Operator of Fleet Separation policies. Through the insight gathered from these consultations - held throughout the Atlantic provinces, Quebec, and Nunavut - the department is drafting a proposal to address some of the issues that exist around licensing policy. Such a proposal would support the independence of the inshore fleet in the Atlantic fisheries, and enable a more modern business environment for inshore fishers. It is planned to discuss this proposal with the fishing industry in the coming months.

I would like to assure you that I am actively taking steps to strengthen Canada's fisheries throughout DFO's Fisheries Management Renewal (FMR) Initiative. FMR is a comprehensive effort to modernize the policies that govern our commercial fisheries on both coasts, and applies many of the

objectives and guiding principles of the Atlantic Fisheries Policy Framework (AFPF) that I released last year.

You may be familiar with the AFPF, but if not, I offer . . ." the following internet Web site for more information.

"You will find that the AFPF outlines DFO's support for the Owner-Operator and Fleet Separation Policies. These polices are integral elements of the Commercial Fisheries Licensing Policies for Eastern Canada, 1996 which remain in effect.

Through consultations with industry representatives and many other stakeholders I have heard that a more open and transparent fisheries decision-making system, which includes a greater role for the industry in decisions that affect their livelihood, are critical for a modern fishery. I have also heard that creating stability in access and sharing arrangements is a necessary 'first step' to creating a modern fishing sector. Stability is vital to meet conservation goals, to increase the value of fish being caught, and to give the fishing industry the stable business environment it needs.

It is for these reasons that I announced in March 2004 that sharing arrangements for most commercial fisheries in Atlantic Canada would be stabilized for that year. On March 10, 2005, I made a further announcement to establish sharing arrangements for up to five years in most of the Atlantic fisheries as a positive and significant step toward a modern fisheries management system.

Fisheries and Oceans Canada is actively working towards providing a more modern governance system for Canada's fisheries for the benefit of a strong, economically and environmentally sustainable, and vibrant fishing industry in Nova Scotia and throughout Canada.

Thank you for articulating your support for the Owner-Operator policy and for your demonstrated commitment to the fishing industry in Nova Scotia."

I also have a letter from Chris d'Entremont - and I'll leave a copy of that with you - I think, where he is supportive as well. I'm just curious about the FMR, the Fisheries Management Renewal Initiative, and the Atlantic Fisheries Policy Framework. Can you enlighten us as to what interactions you've had with DFO and ability to have input into both of those, and whether or not, from what the minister has said, you've seen anything on the ground that indicates that there's a change coming or supportive thinking?

Mr. Heighton, you mentioned that in New Brunswick they seem to take a more aggressive position on this, as far as prosecutions and so on; don't seem to have the same

view here. Do you have any comments as to why you think - in the same department, it seems strange?

MR. HEIGHTON: It's in the same department, but it was a court case in New Brunswick. It was representative of the Gulf region. In Atlantic Canada there are several regions, but Nova Scotia has two, like I said before, the Maritime Region, which is the Scotia-Fundy, which starts in Victoria County, Cape Breton, and comes around the south side of Nova Scotia and goes right to the American border, and then from Bay St. Lawrence up around and right up to the Quebec border is the Gulf Region, and it includes the Madeleine Islands and P.E.I. and New Brunswick on the gulf side of Nova Scotia.

They are ruled out of the office in Moncton, and they sometimes see things differently than they do with Scotia-Fundy. They're trying to protect the owner-operator fleet separation policy by going to the letter of the law. Like I said before, it seems like in Scotia-Fundy they've ignored the letter of the law.

The fishermen on the north side of Nova Scotia have always said that they accepted the policy that there's one fisherman, there's one licence, and he fishes it himself. That, in my view, has never been the same view as the fishermen in southwestern Nova Scotia. They say they have one licence, and anybody can fish it. We've always been very adamant that the owner of the licence should be aboard the boat. That is a relaxed version in Scotia-Fundy compared to the Gulf region.

I think it's more peer pressure. There are not a lot of trust agreements yet. I would estimate likely less than 5 per cent of the licences would be under trust agreements in the Gulf region in Nova Scotia. But it is starting, and because of the relaxed rules on the south side of Nova Scotia, now it's becoming a reality, where some buyers are looking for a concrete part of the fishery for supply for lobster and crab, they're now trying to invest in the fishery to make sure they get that portion.

MR. CHAIRMAN: Do you have any comments around the Fisheries Management Renewal Initiative or the Atlantic Fisheries Policy Framework? Are they words on a page, or is there . . .

MR. HEIGHTON: More or less words on a page. When you try to get DFO to agree to anything that makes sense to a fisherman or to a fishing community, it doesn't work - they run and hide.

MR. WILLIAMS: If I could just comment on the Atlantic Fisheries Policy Review, that's an interesting example. That started in 1999, and they just put the framework out late last year. That framework is worth looking at very carefully, because it does commit to the owner/operator fleet separation, but then it talks about flexibility for fleets to work out what owner/operator fleet separation means within different fleets. The big problem that DFO has

right now with the minister's commitment to owner/operator fleet separation is what do you do about the fleets that have already lost owner/operator status, what do you do about groundfish and herring and scallops?

Technically speaking the owner/operator fleet separation applies. John, in your letter you mention 45 and under, right?

[10:30 a.m.]

MR. CHAIRMAN: Yes.

MR. WILLIAMS: It actually applies to 65 and under. So what do you do about the mobile gear, the groundfish fleet and the herring fleet and so on, where it is vertically integrated, effectively? So that has been the dilemma.

The Atlantic Fisheries Policy Review does set out a direction, largely as a result of the pressure from the organizations associated with the Canadian Council. Owner/operator fleet separation wasn't even mentioned in the first discussion paper that came out of the Atlantic Fisheries Policy Review. So it has been pressure from industry that forced that issue. I think the Atlantic Fisheries Policy Review, speaking for myself here, from a policy point of view, is a step forward in terms of codifying some of these key principles around an owner/operator fishery and sustainability and so on. It's in the actual implementation, and Ronnie's absolutely right that DFO bureaucrats in different regions have a great deal of latitude to interpret their own policies in quite different ways.

MR. CHAIRMAN: I know some members have questions, so I'll choke off here in a second. The wording, it's almost like it was written by a politician, the department is drafting a proposal to address some of the issues that exist around the licensing policy, such a proposal would support the independence of the inshore fleet in the Atlantic fisheries and enable a more modern business environment in inshore fisheries. It's not clear what a more modern environment would be. There's no, absolutely not, we're not allowing this to continue, and we're going to take steps to ensure the sustainability of owner/operator.

I'm not sure who we have on the list. Mr. Parker.

MR. PARKER: I'd like to come back to the Hanlon report that was mentioned. I understand Mr. Hanlon worked for DFO out of Antigonish. The report, as far as I know, is not publicly available, or it's not available, period. I guess I've seen a little bit of maybe what's in it, or possibly what's in it, through LFA34, what they have submitted to Mr. Hanlon. Everything we hear about it is good, that it may well help maintain the owner/operator policy, and God knows, that's what we need.

I like your suggestion, Rick, that maybe as a committee we send a letter to the minister, asking that he support that and sign off on it before we perhaps get into a federal election, or whatever is coming down the road here very shortly. Mr. Chairman, I'm going to move that in a couple of minutes. I just want to ask what we do know for sure about the report. Is there any opposition to it? Is anybody blocking the Hanlon report? Is there some reason why it hasn't already been signed off? Is there full support from our provincial governments in the Atlantic Region?

MR. SUTCLIFFE: I'm not sure of the extent of the consultations that have taken place. But as we call it, the John Hanlon process and proposal comes out of the independents' report, some issues in that report were identified by us and others that needed to be addressed. The independents' report and the condition of the independents, we needed to have these issues addressed. The federal minister appointed John Hanlon - we were actually in a meeting with him when this took place - to address two issues specifically, two of those weaknesses. One was the problem of the trust agreement loophole that was allowing the undermining of that policy. The other was financing arrangements, financial issues that need to be addressed to support new entrants. Those are the two things, as I recall, that he was to address and that would strengthen the policy they have on supporting the independent fleet, the owner/operator fleet.

We had council and many organizations, and, I think, provincial government people were consulted in an informal process after Hanlon developed his proposals. It was not part of a formal consultation process, but I think they call them targeted discussions with key stakeholders and so on. What we heard, as a council, we were able to generally support without seeing a lot of detail.

Our understanding from our members and from reports from John Hanlon is that by and large, fishing organizations supported those. Actually, some processor groups supported them too, their main issue being what we need is a level playing field, we need to know the rules of the game. We have known that the fleet separation policy was a problem for us to own licences but since there was this grey area we took advantage of it, but if it's clarified we're okay with it. We heard that report, we were surprised to hear that at least some of the - I gather - larger processors and their associations were supportive, but there is opposition; for sure, pockets of opposition. It may hopefully be based mostly on some confusion or understanding around what's implied here and this is always a problem when there's really no paper - policy - that's clearly spelling out the recommendations that Hanlon has, I'm sure, placed on the minister's desk, and a proposed action plan for implementation.

I think the concern in some quarters, sometimes fishermen, sometimes some processors, is that the unravelling of the current situation where trust agreements have violated the owner/operator policy may be painful for some people in certain circumstances, and may put some sectors of the processing side at a disadvantage. Probably all of that can't

be straightened out but I think a lot of it, once we know, if we could know, what the policy recommendation is going to be in detail, be sorted out.

There are basically two things that he has done. One is with a very minor licensing revision, identified the harvesters out there that are the traditional core harvesters that own a licence and don't have what they are calling controlling agreements; that is, they're not calling them trust agreements they're calling them controlling agreements. That is an agreement that controls the disposition of the licence. So you can have a trust agreement to take advantage of tax benefits through incorporation and so on, it's not targeting those. There are many such trust agreements out there, these civil contracts, but the controlling agreements that give to the beneficial interest party in these agreements control of the disposition of the licence, would be addressed. There are time periods to move licences back and, of course, that's the other major thing.

Revenue Canada. Interestingly enough, at a couple of the sessions we had with Revenue Canada, several officers from Revenue Canada were sitting with DFO when they were making these presentations and DFO has worked with Revenue Canada around these policy adjustments, so that an outstanding misunderstanding between Revenue Canada and DFO around the policy and what that implies from Revenue Canada's point of view can be resolved with these new things.

We had a presentation. I actually never got a discussion document. I think at some of the meetings around Atlantic Canada there were some overheads that were presented. I don't know if Hanlon and Revenue Canada appeared before this committee or not, but from the point of view of the council and council members - and we understand most others, but not everyone - the recommendations, as they were generally placed before us were certainly acceptable. In the face of what we consider almost an emergency situation and an opportunity now to address them, we felt it was important to take what we saw and understood, to support it and attempt to move them on it.

MR. PARKER: Mr. Chairman, based on what Mr. Sutcliffe has indicated to us, that it is probably a good report and that it would be absolutely beneficial to our fishing communities, if it's appropriate at this time I would like to make a motion that this committee send a letter to Minister Regan as soon as possible, asking him to support the recommendations of the Hanlon report and to sign off on it, I guess . . .

MR. SUTCLIFFE: Implement it.

MR. PARKER: . . . implement it so that it would be policy. But based on what Mr. Sutcliffe is telling us, and under the circumstances, the emergency of the situation where it may die on the minister's desk if it's not supported, I think it's something that we should urge the minister to do. So I'll make that a motion.

MR. CHAIRMAN: Mr. Wilson.

MR. DAVID WILSON (Glace Bay): Before we get to the question, let's be realistic, folks. We all know that the government is probably going to fall on Thursday . . .

AN HON. MEMBER: Monday.

MR. DAVID WILSON (Glace Bay): Thursday is the vote, it will be pretty soon. Do you think that the federal Fisheries and Oceans Minister is going to get to a letter that we send probably late today or tomorrow and approve something in it, and get word back to us before that? Of course not.

MR. THERIAULT: No better time.

MR. DAVID WILSON (Glace Bay): I'm not against it, if I may, Mr. Chairman.

MR. CHAIRMAN: That's nice to hear.

MR. DAVID WILSON (Glace Bay): If I may, I'm not against it. God knows, I have a very real understanding of what the fisheries mean to Cape Breton. There are two fish plants in Glace Bay and without them we'd lose one of our primary employers in Glace Bay, so I know how important this is. But let's not play games. Why don't we send a letter to Mr. Layton and ask him to hold off on defeating the government and give the minister time to approve a letter. Do we want to play that game? Let's not play games, ladies and gentlemen, please, this is too important to play games with. If we're going to do something - this organization has come before us with real concerns about real people - let's do something substantial. There are other things we can do except play political games by sending a letter off to a minister and asking him to answer it before the government falls two days from now.

MR. CHAIRMAN: Did I hear you right in saying you're not against it?

MR. DAVID WILSON (Glace Bay): I'll support it, absolutely, but I'm allowed to speak my mind, I think.

MR. CHAIRMAN: Thank you, we appreciate that. Mr. Theriault, did you want to comment on this?

MR. THERIAULT: It was brought up that we haven't seen the Hanlon report. I'll agree with that, as long as that Hanlon report supports the owners/operators of the coastal communities of this province. If it hasn't gotten full support in that report . . .

MR. CHAIRMAN: Mr. Gaudet.

MR. GAUDET: I can't support this motion. Voting in support of a motion of something that I have no clue what I'm voting on is absolutely the most ridiculous thing that I've ever heard. I would like this committee to maybe at some point, if we could look at this Hanlon report, and then entertain the motion from our colleague, the member for Pictou West.

[10:45 a.m.]

MR. WILLIAMS: On a point of information. I don't know, when you're debating a motion, whether it's allowable - I can read you what Hanlon's proposals are, that he told us in two separate meetings he hasn't substantially altered since the original.

MR. CHAIRMAN: That's fine?

MR. GAUDET: That would help.

MR. CHAIRMAN: That will be fine. Go ahead, Rick.

MR. WILLIAMS: There are four basic elements of what he's proposing, one of which is controversial among fish harvesters, so we don't know whether it will be in the final proposals, but the other three, as far as we're aware, have been widely accepted by industry groups.

The first is, to address the trust agreement they're proposing to create a new licence category, the independent core status. Right now a core fisherman owns a core enterprise. Now they're going to call it an independent core enterprise, and the owner of that has independent core status. All the current privileges that go with the core licence will go with this new one. To achieve and maintain the status a harvester has to be core and not be party to a controlling agreement that gives away control over the disposition of a licence. So DFO will not renew your licence after a certain point if you have given up your independent control through not a trust agreement but a controlling agreement.

So any harvester who - you understand the trust agreement, right? The fisherman still has his name on the licence, but he has in effect sold the beneficial use of the licence. So, if that is the case, the licence won't be renewed after a certain period of time.

The controlling agreement definition does not interfere with other types of agreements, for example, harvesters borrowing money from processors in return for a contract to supply fish to the plant. So that would still be allowable, no problem. Licence holders who do have controlling agreements and disclose them to DFO within six months will have, initially it was proposed three years but at the last meeting, Hanlon suggested five years to effect the dissolution of the trust agreement, either change the agreement or sell the licence to an independent fisher. If the parties to the agreement do not get out of it, the

licence will become non-transferable. The licence holder must come forward to be identified. The parties have six months to identify themselves to DFO, after which they will not be eligible for the five-year window to eliminate the controlling agreement.

So, if you understand all that, it just means that any licence that is subject to a controlling agreement will not be transferrable after, perhaps, five years. They have five years to get out of it.

The second basic proposal addresses the intergenerational transfer around incorporation and tax status. Independent core status holders will be allowed to transfer their licences to a corporation with all the subsequent benefits of incorporation, but the corporation will have to be 100 per cent owned and controlled by the owner/operator. In other words, you're applying the owner/operator principle to the corporation. There will be a certification mechanism to establish the status, and so on. There is a variety of technical stuff about how they're going to do this.

The controversial element was that DFO will consider issuing licences to incorporated co-operatives that are 100 per cent owned by independent core harvesters. In other words, for example, in Digby Neck, if you have 50 licensed core independent fishermen, they could form a co-operative and own quota, buy quota or buy licences to fish, according to Hanlon's proposal, as long as every single member of the co-operative is an independent core harvester.

Some industry groups have worried about that, as being another way, when they think of big co-ops or something or other, that companies might get control. So there's been debate about that particular issue. We're not sure what the final recommendation will be on that.

Around the issue of using the licence as collateral, the banks want security before they loan money to buy licences. DFO does not want to be a party to any loan, and that's why they don't allow the licence to be used as collateral, because DFO doesn't want to end up being a party to the contract. As an alternative, DFO could have a licensing provision allowing core harvesters to surrender their independent core status for a fixed period of time to assure the bank that the fishermen can't transfer the licence during that time and then default on the loan. So it's a little small thing that would protect the bank and make it easier for the banks to lend money to buy licences.

Those are the proposals that he put on the table in May, and then when we met with him in August, he said he hadn't really substantially changed that. But we're not sure what that co-op issue will be.

MR. CHAIRMAN: Mr. Hines.

MR. GARY HINES: Mr. Chairman, I'm not sure that the minister has actually officially received this document. Do you know if he has or not?

MR. CHAIRMAN: Yes.

MR. HINES: He has. Well, that would make it easier to support it, at least, because it would certainly look really dumb, trying to rush something through because of the three- or four-day time frame if the minister hadn't seen it. I would like to know how Junior feels - after he's heard that recommendation, because he is seemingly the professional when it comes to fisheries. (Interruptions)

MR. THERIAULT: This co-op thing, I can't see that. As long as independent fishermen are running that, it wouldn't seem to be any different than an association, as fishermen coming together. I can't see that being too much harm there. It's something you would have to study.

I'm concerned about that five-year thing of businesses or corporations backing out of it. They could control the whole fishery within five years. What the hell do they care if they can back out of it or not? In five years' time I can see them taking control of this fishery.

MR. WILLIAMS: The reason for that was . . .

MR. THERIAULT: Who would they want to sell it to after they've raped it all and it's all gone? It wouldn't matter anyway. So that could be a concern.

MR. WILLIAMS: Hanlon initially proposed three years, because some people are concerned, get them out as fast as possible before, as you say, they do a lot of damage, but the reason why, and it was our financial adviser who actually first suggested they go to five years, because, typically, in running a business, in a standard business practice, when you make an investment like buying a business, you have a business plan that gives you five years to get your return on your investment, to get out. So a five-year window would allow people who have bought licences through trust agreements a reasonable period of time in which to get out of them, through the returns on the investment, without putting undue pressure on . . .

That's the thinking. You're right, there are other implications to that. It does seem to have been widely accepted in the consultations.

MR. CHAIRMAN: But what you're saying with that is that those who are already in trust agreements, other than owner/operator, would actually have five years to be out.

MR. WILLIAMS: Yes.

MR. CHAIRMAN: In effect, we'd be stopping the entrance of any new ones, and the ones who are in would have to be out in five years.

MR. WILLIAMS: Yes. If I had bought Ronnie's licence through a trust agreement, his name would still be on it. As far as DFO is concerned, he still owns the licence. So Ronnie and I would have to get together, and if he doesn't want to fish anymore, buy it back from me, we would have to sell it to somebody else, so we would both be able to get out of the agreement. It would take five years, we're thinking, to . . .

MR. CHAIRMAN: Without that, the people who are in trust agreements, if you don't put a limit, they can destroy the industry - that's the way it is now, to use Junior's wording. At least in five years they've got to be gone, according to this. Does that seem more sensible, Junior?

MR. THERIAULT: I'd like to have it studied a while.

MR. DAVID WILSON (Glace Bay): Mr. Chairman, may I?

MR. CHAIRMAN: Hold on, honourable member for Glace Bay.

MR. GAUDET: Mr. Chairman, I'm very uncomfortable voting on this motion, because I don't know the Hanlon report. I heard some recommendations. We don't know what the final recommendations are going to be. I was going to ask my colleague, is everyone in the industry in support of this Hanlon report? Are there any concerns expressed?

MR. THERIAULT: This is the first I've heard of anything coming out of it. It's due out December 15^th, I believe, officially. That's another month away, nearly a month away.

MR. GAUDET: Mr. Chairman, would it be possible to maybe invite someone to come in and brief us on exactly what's in this final report? Then we'll be in a better position, either to support or not support the motion that's on the table.

MR. CHAIRMAN: That's a question for the committee. It's not particularly un-sensible, I would say. I want to kind of remind members of the committee that this is the Canadian Council of Professional Fish Harvesters, which is made up, in my book, of 12 different organizations, plus a number of honorary members. I think the group before us, we'll assume, is speaking for a broad section of the industry.

MR. DAVID WILSON (Glace Bay): May I, Mr. Chairman? The group said there were two groups that weren't represented at the table. Who are they? In your initial presentation you said that you had everyone at the stakeholders' table, but there were two groups that weren't there.

MR. SUTCLIFFE: Specifically, there's a group of halibut fishermen on the West Coast whose numbers would support their application to be members of the council; they have not applied. The other group would be the Eastern Fishermen's Federation here on this coast that was a member of the council and no longer is, although it's an association, and some associations, like, I believe, Ronnie's, are members of EFF and members of the Council. So it's basically those two organizations in Canada that meet the bar in terms of their size and constitutions, that are not members.

MR. CHAIRMAN: I think where I was going was when we have organizations come before our committee, we're kind of using them as the expert to lead us as to where we may want to go on a particular issue. So I was thinking we would afford this group the same indulgence.

Mr. Theriault, then Mr. Gaudet.

MR. THERIAULT: I support the Canadian Council of Professional Fish Harvesters, always have. I think you're doing a fine job; I think you always have done a fine job. You've pushed for this. What I'm getting at is I would like to see this report in hand, and I would like to hear back from some of my fishermen, too. I haven't - and I don't think you have either, Rick - heard a lot about it. We're both sitting here talking this back and forth, about this co-op and this five-year plan. I would love to be able to hear from an expert, from some fishermen, and get their thoughts on it, too. It sounds like none of us here knows exactly what this could mean, especially this co-op thing. I don't know. I don't even know how to speak on that.

MR. SUTCLIFFE: If it helps, what we did, and most organizations that I'm aware of sent their own letters. What the Canadian Council did is we supported the Hanlon initiative to strengthen the independence of the owner/operator fleet. In fairness, in the absence of detailed text, when we knew the minister had been presented with the proposals and we had a very quick turnaround on consultations after he did that, we quickly got back to the minister that we supported the initiative, the Hanlon initiative, to strengthen the independence of the owner/operator fleet.

We felt, because of the seriousness of the issue and the opportunity that this initiative offered, that it was important to do that. So we did it in that way, maintaining, as Rick has pointed out, some issues and uncertainties around the detail. We felt it was important to deliver a strong, clear message to the minister that we were very much in support of the initiative to address the loophole issue, which clearly is undermining the initiative and to address the financial issues around new entrant access to licences and so on, which are the substance of the Hanlon proposals. But in the absence of knowing the details, that's what we felt we could do and actually should do, so that the minister continues with that.

MR. THERIAULT: Can we support this, Mr. Chairman, as long as we can change our minds with amendments? (Interruptions)

MR. SUTCLIFFE: It's the intent. We face the same issue, but we wanted to deliver a clear message that we support the clear intent of this initiative, to strengthen the independence . . .

MR. THERIAULT: Well, let's do that.

MR. PARKER: That's all my motion was.

MR. DAVID WILSON (Glace Bay): No, it's not. (Interruptions)

MR. THERIAULT: You said the report.

MR. CHAIRMAN: Junior, do you want . . .

MR. DAVID WILSON (Glace Bay): Mr. Chairman, if I may. I wasn't recognized the last three times.

MR. CHAIRMAN: I apologize.

Mr. Wilson.

MR. DAVID WILSON (Glace Bay): Qualifying my support that was originally there, if this motion was reworded to what it should be, in my opinion, and that is we want the minister to get off his duff and take some action on this issue. Let's make the motion read that way. Right now the motion is worded politically. If you want to change the motion, then I have support for that kind of a motion to say let's get on with this report, take a look at it, and either accept or reject the recommendations. But right now, after having heard, and even our guests are saying in the absence of having the details of what's going on here, this motion as it stands right now and as it's worded, I can't support it.

[11:00 a.m.]

MR. PARKER: Can we have it read back? I don't remember the wording myself.

MR. CHAIRMAN: I think it was specific to Hanlon's report, actually.

MS. MORA STEVENS (Legislative Committee Clerk): Just what I got out of it - and this could be a little different than Hansard - it was, the Standing Committee on Resources was to write to the federal Minister of Fisheries and Oceans expressing the committee's support of the recommendations contained within the Hanlon report, concerning the

owner/operator policy, and urging the minister to sign off on the new regulations prior to the end of the current session of Parliament.

MR. THERIAULT: So can we reword that, Charlie?

MR. PARKER: What part are you unhappy with?

MR. THERIAULT: Well, we can't really accept the Hanlon report if we don't know what's in it exactly, but we can support - you worded it right . . .

MR. WILLIAMS: Action to close the trust agreements . . .

MR. THERIAULT: Exactly. Action to close the trust agreements and give the fishermen financial support to make intergenerational transfers accessible.

MR. CHAIRMAN: With no reference to the Hanlon report?

MR. WILLIAMS: That would get you off the hook of supporting something you haven't seen.

MR. DAVID WILSON (Glace Bay): I'm not comfortable with the reference to the end of this current session of Parliament, which we all know is coming Thursday.

MR. CHAIRMAN: Chances of it even getting there by then . . .

MR. DAVID WILSON (Glace Bay): It's unrealistic.

MR. PARKER: I can take that part out, I'm not quite sure how that part got in there, but basically I was asking for support for our owner/operator independent fishermen. (Interruptions)

MR. CHAIRMAN: Let's see what the wording of this is and then we'll have a re-look. I'm not sure, even with an election, the minister may change but the department probably won't. If his name goes on it, whoever else is in the seat will get the letter.

MR. HINES: Minister or his successor.

MS. STEVENS: Do you want the original motion or . . .

MR. CHAIRMAN: No, we want the rework.

MS. STEVENS: The Standing Committee on Resources would write to the federal Minister of Fisheries and Oceans, expressing support for the closing of trust agreements and the support to the fishermen of intergenerational transfers.

MR. CHAIRMAN: I think we need a little more wording on that.

MR. THERIAULT: The financing, the tax implications in intergenerational transfers.

MS. STEVENS: In the financing or tax implications of intergenerational transfers. So it would just be writing a letter expressing the committee's support concerning the closing of trust agreements and expressing the support of the fishermen in the financing and tax implications of intergenerational transfers.

MR. THERIAULT: Right on.

MS. STEVENS: So that takes out about this session of Parliament.

MR. THERIAULT: Generally, that's what the Hanlon report is requesting.

MR. PARKER: Yes, it's basically the same thing without mentioning the Hanlon name.

MR. CHAIRMAN: Is the committee fine with that?

MR. HINES: Just one thing I would add is the word "immediate" before the word "support".

MR. CHAIRMAN: Immediate support?

MR. HINES: Immediate. Then if it gets in the hands of the minister before, which is entirely doubtful but at least it does place an urgency on it and that was the intent, to place urgency on it.

MR. DAVID WILSON (Glace Bay): Mr. Chairman, I'm extremely uncomfortable supporting anything that no one on this committee has ever seen or read.

MR. CHAIRMAN: But we're not referring to the Hanlon report.

MR. THERIAULT: It's just general now, this has been going on for years.

MR. DAVID WILSON (Glace Bay): Well, hasn't everything?

MR. THERIAULT: We're just not getting into specifics now.

MR. DAVID WILSON (Glace Bay): I know but we haven't read a report and we're supporting it.

MR. CHAIRMAN: Mr. Wilson, we're not referring to the Hanlon report.

MR. PARKER: We're supporting the general principle of owner/operator and intergenerational transfers, we've written those kinds of letters before.

MR. CHAIRMAN: Can I just hear from the committee, yeas for this?

SOME HON. MEMBERS: Yea.

MR. CHAIRMAN: Nays? Thank you.

It is agreed.

We are five minutes over our time, I'm not sure if we have anybody else on the list who had a burning question.

Any questions by the members on the annual report? Okay.

MS. STEVENS: The Tory caucus sent in two minor little changes and it was a clarification in one of the sections about owner/operator policy, and the other one - they were just very small clarifications - was about clarification of Quebec's policy of the $500,000 capital gains versus Nova Scotia's $100,000 limit. So there were just tiny little changes on two pages.

MR. THERIAULT: We're talking about the same thing today.

MS. STEVENS: Exactly.

MR. CHAIRMAN: Do you need our signatures?

MS. STEVENS: We need a motion of support for it and then I can track down everyone for signatures.

MR. GAUDET: Mr. Chairman, I move that the committee supports the Annual Report of the Standing Committee on Resources, 2004-05.

MR. CHAIRMAN: Is it agreed?

It is agreed.

I want to thank you for coming in today. You can notice the debate, I think, and this is an issue - as in a variety of issues - for those of us who are in rural constituencies. I don't have a large fishing sector in my constituency but anybody who recognizes the economic value for what the contribution is from the fishery in particular, or from the rural resource side, whether it's agriculture or forestry, I think would not miss any of the points or the value that you brought to us. We're certainly hopeful that we can move our provincial government, and hopefully, the federal government, to a direction that addresses some of these issues. Thank you very much. Do you have any comments you want to make to sum up?

MR. SUTCLIFFE: Thank you for the opportunity, we appreciate it.

MR. CHAIRMAN: The meeting is adjourned.

[The committee adjourned at 11:10 a.m.]