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February 27, 2001
Economic Development
Standing Committees
Meeting topics: 
Economic Development Committee -- Tue., Feb. 27, 2001

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HALIFAX, TUESDAY, FEBRUARY 27, 2001

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

1:00 P.M.

CHAIRMAN

Mr. Brooke Taylor

MR. CHAIRMAN: I will bring the Standing Committee on Economic Development to order, committee members. This afternoon we have witnesses from the Department of Fisheries and Oceans. To my left would be Mr. Jon Hansen, Senior Advisor, Resource Management, Scotia-Fundy Sector and Mr. Leslie Burke to my right. Leslie is the Director of Policy with the department. Perhaps we could go around the table, beginning with colleague Chisholm and introduce ourselves.

[The committee members introduced themselves.]

MR. CHAIRMAN: I believe, Mr. Hansen, you are going to make a presentation on behalf of the department. Then we probably will have a few questions for you.

MR. JON HANSEN: Thank you. What I intend is just to do a summary presentation for approximately 15 minutes and basically what I am going to be covering is the overview of the Scotia-Fundy Region, a little bit on groundfish management, an overview on that. Again, this all going to be relatively cursory, it is a rather detailed subject and could be very extensive. Then the last thing is just an overview on community management as it applies to fixed gear less than 65.

Our region, as you mentioned before, is the Scotia-Fundy Region. That, basically, is the area from Cape North in Cape Breton along the Atlantic Coast into the Bay of Fundy and to the border between New Brunswick and the United States. So that is the Scotia-Fundy Region. In those areas, you see, we have 4Vn and 4W and so on. Those are different NAFO divisions on how we define the stocks. Most of the main groundfish species refer to cod and haddock. There are others like pollock and flatfish and so on.

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Everything east of Halifax, which is sort of east of the 4X/4W line, that area now, for any cod or haddock, is under moratorium, has been under moratorium since 1993. In the area west of that area or southwest Nova Scotia, we have two different stocks of cod and haddock. One is the species that resides more or less in the area on the map known as 4X and 5Y. Then we have another stock that is separate from that which is the 5Z or what we refer to as Georges Bank and that stock is also transboundary and resides on both the Canadian and U.S. sides.

When you look at the overall fishery, there is a lot more to the fishery than just groundfish and there have also been a few changes in the industry. What is shown here is just a landed value or difference from 1990 to the year 2000 and you see that in 1990 groundfish accounted for 38 per cent of the total landed value whereas today it is closer to only 13 per cent. I will show different slides later on how groundfish have decreased.

What you are also seeing, though, is that the total landed value of all species - and what you see on there is groundfish, shellfish and pelagics - pelagics are really grouped into two types of pelagics: there are the small ones which are mostly your mackerels and herrings and then your large ones would be some of the tuna or swordfish. You see from 1990 to the present, the landed value has gone from $438 million to $618 million. The shellfish value has increased significantly while groundfish has decreased. It has gone from representing now 83 per cent from the 50 per cent.

When we look a little more closely at just the shellfish, the percentage shares or contribution to the overall landed value of lobster hasn't changed a lot. If anything, it has gone down. We have increased the landed value by other species such as snow crab and shrimp. You see that some of these species, like snow crab, have gone from 1 per cent to now 10 per cent and the overall value again by increased landings of shellfish, has more than doubled from $232 million in 1990 to now representing about $503 million.

Just a brief overview on groundfish management and some of the characteristics. There are a lot of different features to groundfish management that include other things such as small fish size, small fish protocol, spawning areas and so on, but some of the key features in groundfish management really involve two main things. One is its limited entry licences. There are only so many licences and the majority of all the licences, at least in groundfish that we have today, is the same as it was around 1979. There hasn't been an increase in the number of groundfish licences. So it is limited entry and that is all that refers to.

The second aspect of our groundfish management deals with total allowable catch or TAC as we refer to it. It basically says there is a limit on how much can be removed. As soon as you get into a TAC, you have to divide that TAC into quotas and those quota shares are divided among the fleets that we currently have and initially those quotas assigned to the different fleets were based largely on the percentage of that quota they were taking then, or at least in the early 1980's. So you have the different fleets but they have been assigned a percentage share.

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When you look at the different fleets in groundfish, we really have six basic fleets. We have the fixed gear less than 45 foot, that is using vessels less than 45 foot, and they are currently managed by what we call community management. The next two groups are the larger fixed gear in the 45 foot to 65 foot vessels and all the small, mobile less than 65 foot, which are both under the ITQ or Individual Transferrable Quota system. The next two fleets are a relatively small segment. There are not many vessels or companies in those areas but they are the fixed gear 65 foot to 100 foot and also mobile. The last fleet is all those vessels greater than 100 foot. The last three are all managed under enterprise allocation or some refer to it as company quotas. The three last groups, greater than 65 foot are Atlantic-wide where all those that are less than 65 foot have to fish in their home area which in our area is the Scotia-Fundy Region.

As I said, a lot of the quotas have more or less remained the same and have been in terms of percentages that were assigned. This is an example of 4X and 5Y cod or the cod stock that is in Southwest Nova. If you take the two top lines, the blue is the fixed gear less than 65 foot and then you have mobile less than 65 foot, those two groups together. They have been allocated, more or less, 91.5 per cent of the total, whatever the quota is each year, or the TAC and the offshore, where you have the last three lines down there at the bottom, those combined are 8.5 per cent; specifically, those greater than 100 foot, they have 6.5 per cent and the two 65 foot to 100 foot fleets have 2 per cent of the quota.

Now those shares as assigned by percentages have remained more or less the same throughout the Atlantic; since the early 1980's, there hasn't been a lot of change. There have been some changes where the percentages have decreased from the offshore and given to the inshore but while you have percentages that are roughly the same, a percentage of something that is decreasing in total, as you can see here, with the moratoriums in the east of Nova Scotia as well as Newfoundland, the gulf and northern cod, as you are all aware, has led to a significant drop just in the landings and the available fish that any of the fleets can go for.

What you are seeing here is the landings that are recorded in our region have basically decreased by a fivefold factor from 1986 to now with the declining quotas and the moratorium, as I said. You see that the value of the groundfish has gone from over $300 million, landed value in 1987, whereas today we are really only dealing with $50 million. So nobody is happy with the percentage shares, regardless of how high they are, because there is so little of anything to have.

I am just going to go through a few brief milestones. As I said before, limited entry. Most of that came in in 1973 as we extended our 200 mile jurisdiction in 1977. We also produced our first groundfish plant. As early as 1984, we identified overcapacity both in the inshore and offshore fleets, and basically 20 per cent of the boats caught 80 per cent of the quota. It didn't matter which fleet. The first year we put enterprise allocations on the offshore was 1984. What that did, it stopped the competition within the offshore, the companies themselves, but more importantly it also capped what the offshore could do and it gave them a system where the offshore could also try and match their harvesting capacity with the available quotas instead of

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one free-for-all and catch what you can. This followed in 1988 with implementing enterprise allocation for the 65 foot to 100 foot fleet.

In 1989 there were quota transfers, as I mentioned earlier, from the offshore and this was again in percentage shares. In 1989 there was a lot of pressure from the inshore fleets, especially the mobile gear fleets where you had blockades of ferries and various other things; at that time 12,000 tons of offshore quota was transferred to the inshore, both to the fixed gear and the mobile fleet. Most of it was Georges Bank quota but there were still quotas involved in both 4X and 4VsW. Here is an example of a slide which shows this increase. The top red line at the left, that is the offshore, and they had approximately 55 per cent of the Georges Bank cod and then in 1989, 30 per cent of the total cod was transferred to the fixed gear and mobile gear received 30 per cent of the overall TAC instead of 12 per cent. Those shares have, more or less remained, where the offshore today, since 1989, has 4.5 per cent of the Georges Bank cod.

Just to go back to that earlier one. In 1989, while we did these transfers, that is also when we combined the quotas for the small dragger fleet. In Southwest Nova, where we combined the Georges Bank cod and haddock with the 4X cod and haddock and catch the total, and when you catch it all then you are finished. We had the period before that that some of the fleets basically felt they wouldn't be closed. The mobile fleet felt that they couldn't argue for more quota if they still had quota and then they ran out on June 28th.

In 1991, we introduced ITQs for the small mobile fleet. One of the other issues in 1993 - I am just going to follow this slide - where we did away with an overrun limit for fixed gear. Fixed gear less than 45 foot had a quota and when they caught it, they could continue fishing up until 1993. But they were limited in the amount of fish, which was 3,300 pounds per species. They could continue fishing.

I will just note so I won't come back to it, you will see 1996, and we will get into that a bit later, Trial Community Management.

Now, I just want to go to a slide on cod just to demonstrate one point in terms of trying to stay within the quota. The red is the quota of the fixed gear fleet in 4X cod and the blue bars are the catches. As an example with this 3,300 pounds and what it meant, you see that in 1990 the total allowable catch for all fleets was set at 12,000 tons and the fixed gear had a quota of 7,000 tons. That year the fixed gear less than 65 foot catch totalled 15,000 tons. They more than doubled their quota and they weren't the only ones that overran, but here is an indication of where they were closed once they reached their quota and the 3,300 pounds kept adding up. They caught 15,000 tons and that is when the decision was made that that 3,300 pounds had to be removed and we go back to a strict quota management for fixed gear. At that time we had strict quotas for all other fleets.

Just a few milestones on community management. As you saw with the declining quotas, when it came to the fixed gear less than 45 foot we tried to, through the various advisory committees of fixed gear, listen to what everybody said and the department would come up with one plan for all. As the quotas decreased, especially in Southwest Nova, this meant lower and

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lower trip limits to make the season last. In 1995, there was, through the fixed gear committee, they basically said, well, let's try and at least divide it three ways, have a handline quota, longline quota and a gill-net quota and then all the fishers have to choose which one they want to do.

At the same time, a group of fishermen in Sambro had told the committee that they would like to try to have a quota for their community that they could manage themselves and this was accepted by the committee and implemented. So everybody else fished as either one of the three gear quotas and Sambro fished under community management. The gear quotas didn't last long and they were closed down relatively early, and basically everybody from Ketch Harbour to Grand Manan had to decide whether they were in the handline, longline or gill-net group.

That fall, as they saw the results of what appeared to be where the Sambro management style was better than what they had, they themselves, the committee, called their own seminar for two days and they invited over 100 different representatives and they decided to go to the department and request a community-based management system for all fixed gear.

We started in 1996 in dividing the quotas up, various groups, but ultimately you went along county lines. 1996 was just a trial period. There was involvement of a week's meeting with a facilitator for the committee without DFO and then in 1996, after that trial, we had a two day seminar in Halifax and there was unanimous agreement to come up with seven geographically-based community management boards. It is just a rough map but the blue area is Eastern Nova, and this is in respect to fishing west of Halifax. So you had all the groups of fishers in the blue or Eastern Nova. The small, little area to the west of Halifax is Halifax West and largely an organization there is called PAFFA, the Prospect Area Full-time Fishermen's Association. Green is Queens/Lunenburg; pink, Shelburne; green, Yarmouth and then you have one community from Digby and all counties north to the New Brunswick line and then the last community is New Brunswick.

MR. LESLIE BURKE: I should point out maybe that the blue area to the east is also the area where most of the groundfish stocks are under a moratorium so there really isn't a whole lot of actual fishing happening to the east.

MR. HANSEN: What that meant, basically, was that you take the fixed gear less than 45 foot quota of cod as an example here and divide it into the seven communities. You see Shelburne, the big pie on the bottom, really received the lion's share of the total fixed gear quota and largely because we went on a combination of equal share, unidentified and catch history. Shelburne has always been the most active fixed gear county in all of our regions. They ended up with 59 per cent of the quota on cod while the other six communities had a total of 41 per cent.

Shelburne was one of the few areas that couldn't agree to establish a community management board, or at least a single one. They had various differences in terms of point of view and in the fall of 1996 or 1997 and heading up to the fall of 1996 after the meeting and

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trying in the January to April period to come to an agreement, they could not agree to a single management board. They started looking at who represents who and the two points of view were submitting fishermen that they said they represented. We started to get into a duplication issue of who claimed who. We sent a letter and a ballot that we created with the help of the different fixed gear associations in Shelburne and basically asked every fisherman to indicate which association of the seven or eight that were in Shelburne, which represented them, and to prevent their concern that they didn't want the fishermen to send it to DFO, we contracted an independent accounting firm in Yarmouth to send in who represented who and we had a 92 per cent response of all the licence holders.

The results were, of the associations that we now refer to as Board A, 32 per cent of licence holders supported them, 57 per cent was the other group that we call B and then 11 per cent didn't support anyone. There still wasn't agreement by April and as a department that basically divided the available quota for fixed gear into group A and B on a formula that had catch history and equal share. That was in April.

What you see here now is the earlier diagram but this is cod, haddock and pollock. It includes the two boards, Shelburne A and Shelburne B and the little round circles represent the licence holders. You see Shelburne B right now accounts for 535 members, 169 in Shelburne A. Then you see all the others. Eastern Nova, as Les pointed out, that is the whole group of fishers from basically Halifax east. Only some of them fish in 4X. You will see they have quite a few. There are 851 licences in Eastern Nova whereas New Brunswick has 228. The pie diagrams represent the amount of quota and then within that we have added the number of licences.

Once the committee, and this is the fixed gear committee made up of representatives - there are basically three representatives from each management board and that committee is where the decisions are made on how to go forward with this community management. The fixed gear committee basically designed the community management system. In 1998 they designed operational guidelines that were sent to the minister for approval for a five year period and all the representatives with the exception of Shelburne Management Board A supported that and that is what is in place now. Basically the department divides the fixed gear less than 45 foot quota into percentage shares to the seven different communities and eight different management boards. Then each management board decides what to do with their quota.

The original problem we had is that, as an example, when we went into the gear quotas in 1995 and a whole group of people from Sambro to New Brunswick opted for gill-net. They found out that having one, huge competitive quota didn't take into account the total differences between PAFFA, a strong gill-net group like Queens/Lunenburg and say New Brunswick, which has a high amount of gill-net. New Brunswick had a later lobster season so by the time they are ready to fish for groundfish, they had to wait until the fish went all the way up the Bay of Fundy, especially pollock, and by that time 60 per cent or 70 per cent of the quota had gone.

Ultimately, the representatives are the ones who designed this community plan because they did not want the single average plan that DFO put in every year. Right now anybody in a

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county has a choice. They can choose to fish with a community board plan or we have a single group that is still administered by DFO and is Scotia-Fundy Region-wide. If you don't want to go in a community group, you can go in Group X and that is basically the DFO-managed group.

That is a very quick overview and then I know if there are various questions, myself or Les will take any questions that you have.

MR. CHAIRMAN: Thank you, Mr. Hansen. We have been joined just a few moments ago, by the MLA for Cape Breton The Lakes, Brian Boudreau. Welcome, Brian.

MR. BRIAN BOUDREAU: Thank you, Mr. Chairman. Just for a point of information, I was stuck in a snowstorm so I apologize for being late.

MR. CHAIRMAN: Well, there is certainly lots of snow to go around, isn't there?

Now, do we have some committee members wishing to ask some questions? Mr. Estabrooks.

MR. WILLIAM ESTABROOKS: I thank the gentlemen for attending this hearing. We, of course, were responding, as a committee, to an earlier group, a protest group. The agreement as you might have followed in the media, for having those particular fishermen in here was eye-opening, to say the least.

I guess I would like to begin - and I represent the Prospect area - by a general question on how would you describe your working relationship at DFO with local fishing groups? From my impression, if I may, the confrontation, the acrimony, the accusative finger-pointing at times in certain areas of this province, would almost necessitate a PR firm, at times, to work for DFO. Now that is my impression as a representative of a fishing community but also as a result of some of the comments that we heard here on January 16th. How would you describe your relationship with local fishing groups?

[1:30 p.m.]

MR. BURKE: Let me just take that on in terms of our perspective. Cast your mind back a little bit perhaps to the 1980's and 1990's, the period that Jon tried to cover with his presentation and I think you will find that we used to have quite an acrimonious time with a great many fishing groups. We had blockades of the Yarmouth ferries in the 1980's, in the early 1990's we had the blockades of Russian ships down the coast around Shelburne. In the fixed gear communities we had takeovers of our buildings even later in the 1990's. That is primarily sort of a groundfish perspective if you want.

The measures that Jon kind of showed the evolution of here was as we moved these groups into more of a self-management position with respect to the fishery, even though the fishery was really reducing dramatically in the available quotas for the various groups, you don't really see, with the exception now of a very few of these groups, there are probably only

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one or two left that take a significant position of the sort that you are speaking of. We don't have takeovers anymore by the mobile gear inshore groups, we don't have any acrimonies with the offshore EA communities. Of the seven, eight, really, community groups that you see here on the fixed gear, we don't really have any takeovers and acrimony with those as well.

There always seems to be a new issue in the fishery. The current one clearly has to do with a Supreme Court decision that has created a new set of uncertainties for many of the fisheries. But in terms of the things that we can actually deal with, our strategy, really, has been to give fishing interests and fishermen themselves more and more control and an active role in management. That has definitely made a big change to the number and the kinds of confrontations that we have been facing over really the last two decades.

MR. ESTABROOKS: Do you wish to add to that, Mr. Hansen?

MR. HANSEN: I was just going to add to that. You saw in the slide where the groundfish has gone down significantly; the major fisheries of cod and haddock in the east have been closed. We have gone in 4X cod where we had 26,000 ton, 30,000 ton quotas, which is now at 6,000 tons, even though the Fisheries Resource Conservation Council last year recommended to the minister as low as 4,000 tons. We have pollock that was forever at 43,000 tons and now is 10,000 tons or less. So, we are down now to such low quotas that I think it is relatively safe to say that nobody is really happy with that. But then you get into an issue of trying to stay within those quotas, which is so important these days. You saw where we have gone and you saw that in 4X and in other areas, it was overfishing, and that had a lot to do with it.

We are now into other things. We are asking the industry to pay increased licence fees. We are asking the industry to try to make sure that we get timely monitoring. We are asking the industry in the handlining boat or the offshore or even the small dragger to pay dock monitoring fees, which is a third party to verify the catches, and that costs money, and all those sort of things. So you are now facing an industry, in groundfish at least, where you have much less to catch and you have increased fees.

Now, that isn't exactly a great picture but then you get back to the point that you now have an industry that is more willing to be responsible for their own actions. We have given some of the management measures, we set the overall TAC through the minister, which is really based on the recommendations of this Fisheries Resource Conservation Council, and then they decide how to catch it and when to catch it. They decide their own management plans, whether it's in the ITQ or whether it's in the offshore where, you know, years ago - it wasn't that long ago - when National Sea and FPI would have anywhere from 40 or 50 or 60 boats fishing between northern cod and Georges Bank, whereas now you have two or three Cape boats fishing for a couple months a year. That's all they have. So everybody is having to adjust. That's basically it.

MR. ESTABROOKS: Mr. Chairman, I am appreciative of those things. I see the slides and I see the numbers and I see the charts. Previous to my wise decision to get into politics, I

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was a school principal. Many of the young men - women I guess, but men in particular - in the communities that I represent see no future in the fishery and have made other career choices. What is happening in some of the places that are represented by other MLAs around this table is, the very community fabric of what Nova Scotia is about and the way that fishing is conducted seems a thing of the past.

I have here and I want you to comment on this and maybe it is just inflammatory rhetoric, but we had people appear in front of us on January 16, 2001, and one of the representatives from Southwest Nova said, if I may, on Page 11, "That occupational cleansing is not incidental or accidental, it is part of the Department of Fisheries and Oceans deliberate policy of taking 9,000 inshore fishermen who fished the waters off Nova Scotia in 1991 and reducing them to 4,000 inshore fishermen in 2000." Either of you, would you comment on that quote, because that occupational cleansing says that the very fabric of the coastal communities in Nova Scotia is in jeopardy because of DFO policies?

MR. BURKE: It is an - what did you call it? - inflammatory statement intended to I guess arouse your emotions quite a bit. The earlier statistics that Jon indicated there show that the fishery, in spite of the really ominous situation with respect to groundfish, is actually about 41 per cent bigger in value than it was at the beginning of the 1990's. Now, the groundfish collapse that we have seen really significantly to the east of Halifax, in fact, across the Atlantic and it has affected Southwest Nova as well, has certainly been very disruptive. Most of those disruptions have actually occurred to people working in the processing sector in those communities. If you went to Lunenburg or Petit-de-Grat or Canso in the east or even the offshore processing communities through Southwest Nova, you would find that those are the areas that have been really most heavily impacted by the reductions that we have seen.

The harvesting side of the industry is doing very well as a result of the displacement that we have seen from groundfish towards shellfish. The values have really been doubled in lobster, so most of the inshore fishery is, in value terms, very heavily dependent on lobster. We have a new crab fishery that was a minor fishery in the east. Fortunately some of these have happened in the east. A new crab fishery that has really taken off in the east in the last few years has provided a lot of employment east of Halifax and into Cape Breton.

There is no scheme on the part of the department to somehow, systematically, decimate inshore fishermen. What has happened is that we have had a resource collapse in part, no doubt, due to heavy fishing pressure. But in measure, as well, due to some environmental concerns, some environmental issue impacts have affected the stocks and science still doesn't really have a consensus on what has actually gone on out there with respect to these groundfish stocks.

The department's response has been to provide almost $3 billion in adjustment assistance. Some of that has gone to buying out the fishermen who were in the fishery, giving them a chance to start something else, if they could. We expected that there would be some recovery of those stocks over a three, four or five year period but we are still not seeing it. So, people who took advantage of the buy-out, I would think, are really feeling themselves lucky to have had that opportunity.

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I think one should be careful as to how one characterizes that act of generosity really on the part of other Canadians who have put that kind of money into the picture. Probably 80 per cent of it is going to Newfoundland and about 20 per cent of it has come here to Nova Scotia and primarily to the communities to the east.

MR. HANSEN: Just one point back to the issue of what Les mentioned in terms of buy-out. We have somewhere in the vicinity of 3,500 licences with less than 65 foot in groundfish and through the voluntary buy-out; I think the total was 389 who opted for that buy-out package. Having said that, we have never, of the 3,500, ever had 100 per cent active fishing, let alone 80 per cent fishing. I'm not saying all of them, but a lot of these licences were sold back in a buy-out to the federal government that may never have fished in the first place.

MR. CHAIRMAN: John MacDonell.

MR. JOHN MACDONELL: Mr. Chairman, I don't really know where to start and I am actually kind of glad for the opportunity to educate myself. Certainly, when I get to talk to fishers anywhere, they don't generally sing the praises of DFO. One of the things brought to our attention in the committee meeting that the gentlemen from Southwest Nova presented was their concern around the privatization of the industry. I would like to hear your view of whether such a thing is occurring and even though I know ITQs don't exist as far as the lobster fishery goes, there is a concern that that is also happening with it. I will make that question number one, if you would be willing to address concerns around privatization of the fishery?

MR. BURKE: As Jon has point out with the fishery, one of the main input control mechanisms is the limited entry licence. The limited entry licence applies in all species of fisheries, including lobster and these groundfisheries we have been discussing here in more detail. A licence is issued by the federal Crown to an individual and he then in turn has to - it is considered a privilege in law - use that licence for the season that it is issued for.

Over time, that practice of issuing licences, which is really in law at the full discretion of the minister, in one year he could have given it to Joe Bloggins and in the next year given it to John Smith. That would have been a fairly disruptive practice between the two fishermen, if he had chosen to exercise his discretion that way. Instead what has happened is individuals who received the licence, who are really fishermen from one year to the next, came to expect that that licence would be issued to them repeatedly.

Over time, as the fisherman grew older, he then had developed a certain amount of equity - normally he had some sons, perhaps some family members, or a crewman who came into the fishery - and he wanted to see that there was some continuity in the movement of that licence from where he was, to sort of the next generation that would take over his boat. There were a couple of options for that.

From the department's point of view we could have basically said, no you are finished now, we will take it back and do the same thing we were going to do earlier; that is, give it to somebody else of our choosing - political choosing even from that point of view. Instead the

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industry didn't quite care for that. They said we would rather be able to designate who is going to get our licence. So licences then passed from one set of hands to another set of hands on the recommendation of the fishermen involved. These are all rules and practices that have evolved with fishermen's very keen participation all the way through the process. As you do that, increasingly, if you are in a fishery with a high value, fishermen sometimes pass them on to their sons gratis, but if they were passing them on to a crewman, or stranger who was eligible to receive one, they looked for some consideration for that.

Increasingly we have seen the price of these licences, as they have moved from one hand to another hand, escalate. In very lucrative fisheries they can be quite high. Even though they are considered privileges and they are issued annually, in practice they are seen as really the base of your stability in the industry.

So really all the licences and all the fisheries that we manage are managed on that same legal base. What happens in the ITQ fisheries over and above that is we take the licences that are normally given or issued for a specific fishery for a specific time and break down the quotas available in that area more specifically so that you end up with a licence that now is quantified as to how much you can catch; that is quota or individual quota. With the same practices as fishermen developed on the licences, they began to want to trade the quotas between them. So you end up with a very useful management tool, in fact, because what happens then is, if the overall TACs are reduced the quotas go down but you can consolidate these individual quotas onto a single enterprise for a year, say, or for an interim period and then only have as many boats fishing as can be supported by the stocks.

It gives fishermen a logical, sort of economical mechanism and people consider that privatization. In essence, I guess, the whole practice is quasi-privatization of a certain kind of fishing privilege that has evolved over the last 40 years of practice.

MR. CHAIRMAN: Mr. MacDonell, just before you ask your next question, I wonder if I could politely ask our witnesses if they could try to be a tad more succinct and brief in responding to the questions.

MR. BURKE: Definitely.

MR. CHAIRMAN: Okay, Mr. MacDonell. Thank you.

MR. JOHN MACDONELL: I probably made the mistake of saying I need to be educated. I guess what I am concerned about is whether or not the department recognizes this as an issue and the impact that that has on communities where the resource, actually the allocation of the resource basically is moving from the hands of a number of people to the hands of a very few and how that may impact those communities and if DFO has a strategy around, gee, this could be problematic for those communities, even though in a free market society this seems like a relatively sensible thing to let it go this way but it may not be to the best interests of the people involved. Do they ever think about well, gee, we should look at this?

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MR. BURKE: Well, certainly if you look at our new policy document, there is reference in there to communities and community interests. The department sees itself as having a role in that area along with many other departments of the federal government and of the province. The most important thing that we can do is manage fisheries so that they are viable and can provide a good, long-term, sustainable level of employment for communities. It is important, then, to keep things in balance between resources and allocations and it is important as well that we have mechanisms in management that will allow fishermen more control. So that is where we are going with community management and that is where we are going with the ITQ management programs.

MR. CHAIRMAN: Thank you, Mr. Burke.

MR. JOHN MACDONNELL: Could I ask one more?

MR. CHAIRMAN: Go ahead, John, yes.

MR. JOHN MACDONELL: If you can answer this in a succinct fashion it would be great. My understanding around the allocation of shrimp, I think about the community of Mulgrave which has a plant there, privately built - I don't know if there was even a tax dollar that went into it - and was looking for an allocation of shrimp to be processed there. It is my understanding that a lot of shrimp quota, and some people say too much shrimp quota, went to Newfoundland where there weren't even facilities to process the quota that they got. I guess number one is, is that an accurate description of what happened and can you tell me the basis on which those allocations are made?

MR. BURKE: Well, you are looking now at a stock that isn't even in our area. So unless you have large . . .

MR. JOHN MACDONELL: When you say in our area, what do you mean, Nova Scotia?

MR. BURKE: In the zone that Jon put up on the map.

MR. HANSEN: South Labrador, if northern shrimp is what you are talking about.

MR. BURKE: So in essence this is really a resource that Newfoundlanders would consider theirs. Without large offshore companies with large boats, none of that resource would be coming to Nova Scotia to create employment either for Nova Scotia fishermen or for Nova Scotia plant workers. So the large, bad, evil trawlers that have been plying Atlantic waters for quite some time have been the source of employment and economic return for Nova Scotians in a way that just wouldn't have been there had they not been fishing off Labrador and Grand Banks, as they have been for the last 40 years and shrimp is one of those circumstances. In this case, the Newfoundlanders basically said, hold it. This is really adjacent to our areas. All this resource should really be coming into Newfoundland, whatever is surplus to what has been normally allocated should be coming into us.

[Page 13]

MR. JOHN MACDONELL: So there are no Newfoundland boats fishing off Nova Scotia then.

MR. BURKE: Very few.

[Page 14]

MR. HANSEN: In groundfish there is. In shrimp, we have some inshore shrimp off of Canso, in that area. There we have a traditional fleet of a few boats from New Brunswick that fish alongside our less than 65 foot shrimp vessels and it is a very small quota, nothing of the scale of northern shrimp.

MR. JOHN MACDONELL: So the New Brunswick boats, the shrimp they catch goes to where?

MR. HANSEN: Wherever they send it. There is no requirement by licence that they must land a, b or c.

MR. BURKE: It is their choice.

MR. JOHN MACDONELL: Thank you.

MR. CHAIRMAN: Don.

MR. DONALD DOWNE: I have a couple of questions. First I want to welcome you here. I live in Lunenburg County and the fishermen there probably have the same kind of feelings in some ways that I have heard around the table here about the concern about DFO. So in many ways it is a thankless job you have but somebody has to do it and hopefully you are paid the bucks to do the job.

There is a concern that has been mentioned at our previous meetings and currently that DFO seems to be more focused on draggers than they are on inshore. Larger corporate type of farming is easier to manage from your perspective than having 15 different fishermen or 30 different fishermen arguing over a catch or whatever in an area versus one company or two companies. You sit down and work out an arrangement. That perception is out there whether it is valid or not. The inshore fishermen feel, obviously, that the draggers are taking away their livelihood. Has the Department of Fisheries and Oceans done anything to educate the public on your side of this issue or are they in fact partially right in their concern?

MR. HANSEN: Regardless of what we have done in the past, you still see the view that, depending on which side you are on already, the other groups are bad. We have most fixed gear fleets that will say that draggers are the scourge of the ocean. We have draggers now that are saying with the amount of lobster gear, the lobster season and you are looking at lobster gear that has expanded from the coast. We have introduced new species of fisheries such as crab, whether it is snow crab, Jonah crab or even things like slime eels, they are all fished by fixed gear which means you put some sort of fixed gear trap or otherwise with a buoy and then automatically by law it is a requirement that all mobile gear, which are draggers and herring seiners must stay a minimum of a half mile away from that. If you listen to a lot of the draggers, they feel they have been excluded from a lot of their traditional ground because now they have to stay away.

[Page 15]

When we are dealing with the times we have now with the little available quota, it is very difficult for everybody to say nice things about the other gear sector. We have gone through many years of mesh selectivity with draggers and gone from diamond mesh, that tended to pull and constrict, to square mesh that remains open. We now have the dragger fleet that has the least lowest percentage next to the gill-netters of small fish because they select for it whereas hook and line, they don't have the selectivity of size by a hook with bait on it. So now you get an argument that one group is taking all the small fish. Now it is the other group taking all the small fish. Nobody is happy out there and in terms of us trying to educate the different groups, we can only present various documents that say this is good or this is bad or whatever but there is not a lot of buy-in on all sides.

MR. BURKE: I think it is said often that it takes forever to earn a good reputation and just one event to lose it. I think that is probably as true about the practice that we have as any. We spend a lot of time working with fishermen's groups themselves and I think that suggestion I made earlier that we have actually made quite a bit of progress with quite a few of the fishing groups with their involvement in the management process. There was a time when they basically focused on harvesting and management was something that the government did to them. Increasingly they are part of the management process and when you are part of the management process, you recognize that you are actually part of the problem and that you really have to be acting responsibly in quite a different way than if you were simply out there to do a very specific task which is just to catch as many fish as you could. That education process is, I think, happening, quite significantly with the fishermen themselves, certainly through their association representation and the management that they have put in place.

MR. DOWNE: There are just a couple of short snappers. I have met people on both sides. I know very dedicated people on both sides. It would be nice if we could find a vehicle to try to get some commonality and some focus so there is not the gridlock. I guess everybody is looking to blame somebody.

Back on your chart here in the changes in the catch, we see that lobster is 54 per cent or 55 per cent, 10 years, a decade. The scallops have actually gone down substantially in that number from 34 per cent down to 22 per cent. I guess that is one question. It is fairly well managed. We brag about the fact that we are so well managed. Is that the Yarmouth-Digby kind of area that is showing the major drop in scallops or . . .

MR. BURKE: No, the thing to recognize as well here is that there are two different size pies here. So 34 per cent of the smaller $232 million pie is about the same as 22 per cent of the bigger $503 million pie, if you go to the next page. In fact, the scallop fishery is about the same value as it was at the beginning of the decade. In fact, it includes both the Georges Bank, or that offshore scallop fishery and the one in the Bay of Fundy.

MR. DOWNE: But you see the crab side. The crab issue is moving up fairly high. I guess the issue is on these changes, has the amount of research gone into allocations of that quota for those species as there has in other areas of groundfish and what assurance do we have

[Page 16]

that we are not overfishing those particular stocks, whether it is crab or whether it is shrimp? I see they are actually moving up fairly well.

MR. BURKE: The scallop fisheries are sort of very actively managed now. There has been dramatic change made in the Bay of Fundy in the last couple of years with respect to scallops. After quite a few years of good fishing it went down. I think the scallop fishery in the region has not been tremendously adversely affected by the same environmental conditions that affected groundfish to the east. On the other hand, the crab and the shrimp fisheries, the consensus probably would be that those two fisheries have benefited from the same environmental events that have negatively impacted groundfish. So we are not expecting that the abnormally high levels of abundance in those two fisheries can be sustained over time. We will see some reductions over time we expect in both the crab fishery and the shrimp fisheries over the future. No matter what science we do nature will only give us so much. We are hoping that we will get some groundfish back when those two go into periods of decline.

MR. DOWNE: You become a cycle theorist when you are dealing with resources. There is a cycle. I am concerned that we are outside that circle in some of the numbers that we have seen lately with the groundfish and it hasn't rebounded the way we would want it.

My other comment is, you are hearing a lot lately about salmon and some areas actually becoming on the endangered species list. What impact would that have if, in fact, the minister were to determine that salmon would, in fact, in Nova Scotia, become part of the endangered species. What impact would that have on the fishery in Nova Scotia?

[2:00 p.m.]

MR. BURKE: Well, from the point of view of the salmon fishery itself, its main use today is recreational. Where it may have a fairly strange impact would be through the legislation that protects salmon and salmon habitat if it is put on an endangered species list. Then other forms of fishing have to be conducted in such a way as to minimize the opportunity that they would intercept some of this salmon and its migratory pattern.

MR. DOWNE: So the point of the draggers offshore, for example, . . .

MR. BURKE: Could be an effect.

MR. DOWNE: They are catching everything in those nets and bringing it up. You have salmon in there. Would that curtail or could it curtail that whole aspect of fishing as we know it?

MR. BURKE: It might in certain circumstances, but again the salmon migratory patterns and where they go into the deep ocean and when they are actually in transit and so on, those are all fairly well understood, at least in terms of their patterns of movement and their time of being there. So there would be lots of areas you could fish knowing or thinking, expecting that you wouldn't, in fact, hit salmon. We wouldn't stop building houses on the sides of streams entirely

[Page 17]

and we wouldn't stop paving roads and building bridges and we wouldn't stop fishing entirely. We would find areas where high probabilities of risk existed and minimize those.

MR. CHAIRMAN: Mr. Chipman.

MR. FRANK CHIPMAN: Mr. Chairman, I just have a couple of brief questions. I may come back with another question later on. We talk about the fishery, particularly the offshore fishery. We don't treat the resource the same as we say we would provincially with Crown land where we sell stumpage off the resource. I realize that is because it is mobile. In a situation, let's say Russian fleets or whatever come in and fish offshore, do we sell the fish at so much a pound? I guess I refer to the same as a fixed gear fisherman. Do they pay for the resource that is out there?

MR. HANSEN: I can answer that. What we have, whether it is domestic or whether it is foreign, we charge licence fees. In the domestic fees as an example, right now we would charge inshore fixed gear licences $100 for the year. For the ITQ and EA, there is a dollar value per ton of quota assigned to either that company licence or in terms of the individual quota. I can't remember all the fees but let's say on an average it is $39 . . .

MR. BURKE: Actually, I think the best way to think of it is we charge a fee that is about 3 per cent to 5 per cent of the value . . .

MR. HANSEN: For domestic.

MR. BURKE: . . . of you having a licence.

MR. HANSEN: With respect to foreign vessels, the only foreign fishing that occurs at any time is on stocks that may be surplus to Canadian needs. In the last year in this whole region, the only ones that we have had fishing in is what we call the silver hake fishery on the edge of the shelf. There are two ways. We are allocating quota to a Canadian company and they have the right to use either domestic or a foreign vessel in that one particular fishery. Last year there was one company that had an allocation of 5,000 tons in this current year we are in now, and they chartered a foreign vessel to fish it and they landed 1,100 tons. If there had been allocations to the nation itself where they could take it home, which occurred four years ago was the last time where there was an allocation given to a foreign nation to take home, and that was primarily Cuba.

We have a licensing fee system that deals with two types of costs. It is an initial fee of so many dollars per gross registered ton of the vessel that comes into the zone and it is in the $1,100 or $1,200 range and then there is a daily fishing fee based on being in the zone a number of days, not how much. It is in the order of 10 times to 15 times to 20 times higher than anything domestic vessels would pay.

MR. CHIPMAN: You have probably exceeded the answer that I wanted but I guess basically what I am trying to say is local fishermen, say the Bay of Fundy or whatever, they pay

[Page 18]

3 per cent to 5 per cent the value of a catch. Now is this retail, wholesale, raw fish? How do you determine the value?

MR. BURKE: It is calculated, licence fees are very tricky to introduce and to keep updated.

MR. CHIPMAN: Let's say you caught 10,000 tons of haddock. What would the percentage be on that?

MR. BURKE: What happened, actually, the department used to have a very nominal fee for all of the licences, and about five years ago we introduced this 3 per cent to 5 per cent rate which was based upon using an average landed value that was in the early part of the 1990's. So, in fact, it is probably coming due in the next few years to some kind of an updating. At that time we were saying the fee will basically be 3 per cent to 5 per cent of the value of the landings that would be available to that licence. The exception was for small inshore operators, like the fixed gear groundfish guys, they didn't actually go to the full rates, they charged them a flat fee of $100.

MR. CHIPMAN: How do you determine, do you determine it on the whole fish, roundfish?

MR. BURKE: It is the value, so it doesn't really matter, whether it is whole fish or roundfish.

MR. CHIPMAN: But how do you determine the value?

MR. BURKE: Well, it is an average price over a period of time. It would be annually, we collect data on how much fish is caught and how much it sells for, so we would basically use an average price.

MR. CHIPMAN: Could you give me a ballpark figure, say, per pound?

MR. BURKE: Per pound of?

MR. CHIPMAN: Whole fish.

MR. BURKE: I would say that the per pound of whole fish, let's say, it would be in the order of maybe one cent to two cents. It would ultimately translate down to in the case of groundfish, for a lucrative species, for one that would sell for 60 cents to $1.00.

MR. CHIPMAN: Right, say, for haddock, halibut and that sort of thing.

MR. BURKE: Haddock.

[Page 19]

MR. CHIPMAN: One other question that I would like to ask too, and I guess what I was referring to, I look at the resource and it is not a finite resource and I look at forestry, which is under provincial control, we charge so much for that resource but this, as I say, is a mobile resource and not a fixed resource, whether that is a reasonable way to go or not.

MR. BURKE: Well, up until this last introduction we were not collecting very much for the Crown, for the people of Canada, we are not getting very much of a fee at all from this resource, one that could be considered, just as you say as forestry.

MR. CHIPMAN: Which brings me to another thought that it is similar to the resource that we have in the offshore right now, where before we joined Confederation we owned the offshore resources, today Ottawa has them and we don't get anything out of those and basically Ottawa is running our offshore fishery now and we are still not getting approximately a fair share.

The other thing I wanted to ask you, when a fisherman has so much ITQ he can sell it and that is transferrable, he sells it to a bigger fisherman because he doesn't have - let's say, maybe he does or maybe he doesn't. How do you know he is getting a fair and reasonable price? What is the percentage of fish export, whole, caught in this region?

MR. BURKE: I would imagine that we would export somewhere between 80 per cent to 85 per cent of everything that is caught here.

MR. CHIPMAN: So if I have an ITQ and I sell it to you, you are going to sell 80 per cent of that to the U.S. market and you are going to be paid in U.S. dollars.

MR. BURKE: So are you. We have been doing that since the beginning.

MR. CHIPMAN: But what about the guy who owns the ITQ who decides not to fish but wants to sell that ITQ, is it reflected back in the price he receives?

MR. BURKE: The amount of our product that would have been going to export to the United States, Japan or Europe has been in that 80 per cent to 85 per cent range since forever. So it has always been a function, sort of factored into the price of fish and into the underlying price of licences and the underlying price of quota.

MR. CHIPMAN: But I am talking fisherman to fisherman, I am not talking company to . . .

MR. BURKE: No, I hear you. But the first fisherman who owned the quota, its value is based on the fact that he could sell the fish that he caught off it into certain markets. At that time the markets he was selling to were the American market or the other markets. It had already been built into that price. So when he decides he is going to rent or sell some of his quota, he is selling it to another guy who is going to be doing pretty much the same thing, so it is already in there.

[Page 20]

MR. CHAIRMAN: Thank you, Frank. John.

MR. JOHN MACDONELL: I want to touch on one thing for starters. The honourable member for Lunenburg had mentioned about the number of salmon. I just wonder if you could give me some indication of what you think the impact of the recent 100,000 salmon that escaped in the Bay of Fundy, any ideas . . .

MR. BURKE: We will have to send you some more witnesses for that. (Laughter)

MR. JOHN MACDONELL: I know recently there was a special done by the Nature of Things on aquaculture and I think on the West Coast in particular - I think they are introducing Atlantic salmon which is causing problems. Also I think they were talking about hybrids produced from caged salmon - and I always thought the caged salmon was the same Atlantic salmon that we have in the oceans - is it a different subspecies?

MR. BURKE: We can save you a lot of time on this one, because we really can't answer your questions.

MR. JOHN MACDONELL: Are you worried? Let me put it that way.

MR. BURKE: I like salmon, I eat a lot of farmed salmon. (Laughter)

MR. JOHN MACDONELL: I don't know if you can actually touch on this topic either but I want to ask the question. The past interim agreements with the Native community, the various bands, are coming up in March, they were year agreements. One of the fears expressed to me by one of the chiefs was that the government wouldn't enter into a long-term discussion out of the Marshall decision and that it would be a question of coming back, signing another interim agreement and then signing another interim agreement. I don't know anything about the background of what the minister has presented, but it looks as though the minister has come up with something that he has presented to the Native community around trying to negotiate out of Marshall. It seems that it is a kind of cross-jurisdictional situation between Indian Affairs and the Department of Fisheries and Oceans as well, because one didn't have jurisdiction to do something around the treaties or whatever. So I am wondering if you have any knowledge or information about at least how that has been perceived and anything in the agreement? You may not be able to discuss it anyway, I am not sure.

MR. BURKE: Again, I will give you some information sort of offhand but it is not really that official. So I would just as soon focus on our topic here today.

MR. JOHN MACDONELL: Okay.

MR. CHAIRMAN: I wonder if we could perhaps go to Mr. Ronald Chisholm.

[Page 21]

MR. RONALD CHISHOLM: A clarification when you talk about the shrimp quota for plants like in Mulgrave. Newfoundland seems to have the bulk of the quota. Are you saying that the reason for that is that they are the closest to the northern shrimp where they are fished?

MR. BURKE: There are sort of three big pockets of shrimp in Atlantic Canada. One of them is really in the area between Labrador and Greenland. A second smaller one is in the Gulf of St. Lawrence, up around Anticosti. A third one, a very small one, is off Canso.

All the shrimp fisheries have really benefited from this environmental change that I mentioned. There are two and three and four times as much abundance in the stocks as we have seen in recent history. That has happened in all three areas. But the one up north has gone from a 20,000 ton or 30,000 ton fishery to a 130,000 ton fishery. The original participants were about 20 companies with quite large vessels to go into the ice areas that were up there and fish those species. There are quite a few Nova Scotia companies and vessels that actually go and participate in that fishery. They have retained their historic share.

What has happened is this surplus that has been identified. The Newfoundlanders basically didn't see that that should, in fact, all go to the original companies and that it should only be going, if it was going to be shared outside the original companies, to Newfoundland interests. That's really what has happened.

MR. RONALD CHISHOLM: So in other words, if there is quota that fishermen in Newfoundland have that they don't use, there is nowhere else for that to go, it has got to stay with . . .

MR. BURKE: If it went to that point, I would say that there would be have been allocations outside but the view - don't forget, as I mentioned earlier, with the demise of the groundfish there are a lot of unemployed groundfish fishermen in Newfoundland. So basically they really felt this was an opportunity for them to have participation in the fishing industry in a way that otherwise just wouldn't have been available.

MR. HANSEN: Also keep in mind, Ronald, that the northern shrimp quota is also allocated to various Inuit groups as well.

MR. CHAIRMAN: Thank you, Mr. Chisholm. Perhaps I could just throw a question out. The 1999 Marshall Supreme Court of Canada decision gave, beside the Mi'kmaq, the Maliseet and Passamaquoddy bands also the ability to hunt, fish and gather in order to make a moderate living. I am just wondering the population numbers in Nova Scotia of the other two bands, the Maliseet and Passamaquoddy - I guess what I am asking, I am trying to find out does the DFO have any idea whether or not those bands, in fact, are considering exercising their right?

MR. BURKE: The bands are quite specifically and geographically located and there are none of the other bands, other than the Mi'kmaq, here in Nova Scotia.

[Page 22]

MR. CHAIRMAN: But northeastern United States, for example, the Passamaquoddy, would they be able to, under that ruling, come in if they so choose?

MR. BURKE: Once again, you are kind of getting out of our area of expertise in terms of the legality of that point. My understanding of it is it doesn't apply, they really can't cross and fish as they wish.

MR. CHAIRMAN: Brian Boudreau.

MR. BRIAN BOUDREAU: Mr. Chairman, first of all I am interested to find out if your presentation is available in written format?

MR. BURKE: I didn't bring copies but I can have them sent over tomorrow if that is all right?

MR. BOUDREAU: Yes, that would be fine, thank you. I have a lot of concerns really, I am not going to hedgehog about that and I am going to go ahead and move right into it. How do you determine the amount of fees? For instance, I understand large companies are obtaining large fish quotas.

MR. BURKE: I'm sorry I missed the question, could you repeat it?

MR. BOUDREAU: I understand that the larger companies received larger quotas with regard to various fish stocks.

MR. BURKE: There is really no connection between the size of the company and the size of the quota. It depends upon what stocks you are talking about and there are quite a number of variables. There isn't really any direct relationship between the size of a company and the size of a quota.

MR. HANSEN: The earlier presentation basically showed that if you go Southwest Nova, the majority of the quotas are allocated to less than 65 foot and the offshore has very little. If you go into such species as redfish, which is only fished by mobile, you'll see the offshore has a much higher percentage than the fixed gear, or it is divided between the mobile small draggers and the larger offshore. So depending where you are, whether it is a Labrador stock, or a Grand Banks, or a Southwest Nova, or a Georges Bank stock, there are different percentages for each of the different fleets. Those percentages more or less reflect what the different groups were doing way back when.

Within the offshore, if the offshore had - I forget - 4.5 per cent of the George's Bank cod, that is divided between 15 different companies in Atlantic Canada, whether it is FPI, National Sea, Mersey, or all of those other companies, they have to divide - and they have specific percentages for each company as well - the 4.5 per cent on specific percentages to each company.

[Page 23]

MR. BOUDREAU: Are there companies in Nova Scotia receiving a higher percentage than what they are actually catching?

MR. BURKE: A higher percentage of quota than they are actually catching?

MR. BOUDREAU: Yes.

MR. BURKE: There are some quotas that are not being fully caught. Typically they are species that for one reason or another don't have good commercial value at the moment or the cost of catching them exceeds the amount you can sell them for. Jon mentioned earlier, species like silver hake. Silver hake is a very low value fish and if you looked at uncaught quota figures for the region, you would be lost in the detail but you would find there would be uncaught quotas, some company or some individual held those quotas and didn't catch them. The reason why he didn't catch them was because he couldn't make a profit from catching them and neither could anyone else.

MR. HANSEN: One example I can say right now, if you look at the pollock stock that ranges from Georges Bank to Cape North, all gear sectors right now are having problems in fully utilizing pollock. Right now we have set the TAC, the total allowable catch, for pollock at 10,000 tons. If you take the inshore fixed gear, small draggers, and offshore, so far we have caught 4,800 tons, so we are at 48 per cent and the season ends March 31st. By then, I would expect that you will catch close to 50 per cent, if that. Certainly, there is going to be a lot of uncaught quota. Is the pollock available to be caught? Is the market right now not very good for pollock? So each group has to decide whether they are going to harvest their share; whether it is offshore, inshore, those are the issues they have to deal with in terms of their markets, their capacity and their availability to harvest.

MR. BOUDREAU: Are they altered in any way after a couple of years?

MR. BURKE: We try to keep the shares constant. There have been adjustments - as Jon pointed out - over the years. For the most part, if you look at the adjustments, they have actually favoured inshore groups over offshore groups. If you look at what has happened when we have had these new explosions in the fishery - we were just speaking about northern shrimp - well all of that surplus has gone to inshore communities, inshore groups in Newfoundland. The department's policies are the same here, crab in eastern Nova Scotia has all gone to core groundfishermen who were displaced as a result of the groundfish downturn.

For the most part, if the government goes in there and kind of just arbitrarily messes around with the quotas, it typically creates a whole lot of uncertainty that adds to the uncertainty of the industry. We would rather have the industry itself making those decisions, using some rational, logical kind of thinking about how to make adjustments between fleets or groups.

Communities are in exactly the same position, communities have a certain quota allocation. Now they are faced with what do we do when a community member wants to move from Yarmouth to Digby, which are two different communities. They have had to work out a

[Page 24]

protocol for shifting some quota from one community to the next community to accommodate this individual who wants to move around. We basically have said, it is really in the best interests of those guys to figure that out and that is how we do it.

MR. BOUDREAU: Don't you feel that affects the fishery in an economic sense?

MR. BURKE: Sure.

MR. BOUDREAU: And it increases the price of fish?

MR. BURKE: No.

MR. BOUDREAU: Not at all?

MR. BURKE: No, the price of fish is determined by how much somebody - often in the United States - wants to pay for their burgers or their restaurant meal and that is the price of fish. The price of fish is determined in the market place.

MR. BOUDREAU: So if I purchase a quota from you from your department for 50,000 tons and I know full well I can't catch 50,000 tons, I can only catch 25,000 tons, then you believe that I am going to lose on my quota fees, that I am not going to charge more for the 25,000 tons that I did catch, to cover the 50,000 ton licensing fee that I paid?

[Page 25]

MR. BURKE: I don't know if there would be very many quotas where you would have those kinds of economics but let's say you did, well you might be interested in charging more than what you paid for it but maybe the market wouldn't be prepared to pay you. If that were the case, you wouldn't be around for very long as a businessman.

MR. BOUDREAU: If I could provide you with individual situations and cases, can you comment on them at a later date?

MR. BURKE: It all depends on whether the individuals involved would be interested in having - we treat data confidentially, if it relates to an individual - our comments on their data, we would be happy to do so.

MR. BOUDREAU: So the fees that you charge, is that just a cost recovery fee or how do you calculate a fee?

MR. BURKE: We went through that a moment ago. It is a fairly complicated formula, but we will send you the details because otherwise we will spend . . .

MR. HANSEN: The specific price per ton for ITQ and EA in legislation at this point is designed to reflect, as Les said, the 3 per cent to 5 per cent of the value. As I said, I can't remember the details but as an example for ITQ or EA, it is about $39 per ton, which I think what Les said is somewhere about half a cent, or one cent per pound is what it works out to; whereas that same ton in the inshore is exempt from those per ton fees and they are $100 for the year, no matter whether they catch a little or a lot.

MR. BOUDREAU: But you do agree to provide that formula to the committee?

MR. HANSEN: Yes, we will. That will be included in the copies I send over. I will give you a copy of the schedule that says what the fees are.

MR. BOUDREAU: When it comes to fees in Nova Scotia, are they the same as they are in Newfoundland?

MR. BURKE: Basically the same formula is used across the country, including British Columbia.

MR. BOUDREAU: So there are no different rules and regulations in the Province of Newfoundland than there are in Nova Scotia or any individual part of this province?

MR. BURKE: Well, I won't say all rules but you were talking specifically about how the fees are calculated, yes.

MR. BOUDREAU: I will refer to the TAGS program, the displaced fishery workers. That was much different in Newfoundland than it was administered here in Nova Scotia.

[Page 26]

MR. BURKE: Not really, no.

MR. BOUDREAU: Yes, it was.

MR. BURKE: Well, I administered it here and I was part of the program delivery in Atlantic Canada. There really wasn't any dramatic difference in the two areas.

MR. BOUDREAU: I would be willing to debate that at a later date with you but that's fine, I will accept what you are saying today. When these community boards were set up, how did you set them up?

MR. HANSEN: Largely it was a decision by the fishermen themselves. They had a period of five days with a facilitator and we had started designing what the group should be, largely based on geographics. There was some concern with whether Shelburne and Yarmouth should be together. There were some concerns whether the Shelburne gill-netters should be part of the Shelburne group and so on. Largely it was decided that they wanted to be part of certain geographic groups. One example was initially, Queens, Lunenburg and Halifax West was one community. Near the end of that discussion they decided that Halifax West did not want to be part of Queens and Lunenburg.

That was how you formed the basic groups at the beginning and then we did form one management board or one group called Shelburne and later, when there was no agreement, DFO was the one that said there would be two boards and divided the amount of quota for those two, based on a formula that really dealt with past catch history and some percentage based on the number of licence holders in each group.

Largely, the design of the community management structure, the years used for sharing the quota, the formula for how the quota should be used was all done by the industry. It was not DFO's initiative to develop community management. That was all done by the industry representatives.

MR. BURKE: Based on an idea that evolved out of Sambro.

MR. HANSEN: Yes, an experiment for one year. They felt that they had tried everything else from an all-inclusive free-for-all, on your mark, get set, go, to gear-type quotas, to reduced trip limit quotas, to differences for big boats; and little boats, they had tried everything over a period of five years or six years. They all felt that community management would give them an opportunity on how they fished.

As I said - I used the example of New Brunswick - they basically came back and said we need control. We have an entirely different fishery with respect to lobster, we start later than everybody else, we have big tides to work with. We need to figure out how we can catch our quota. We don't want to be included with Shelburne, we don't want to be included with Yarmouth. That was over a two year period that all the fixed gear community representatives basically sat down and developed what they have now. It was led by the industry, not DFO.

[Page 27]

MR. BOUDREAU: I can understand New Brunswick, to be honest with you, but I'm not interested in New Brunswick today. I'm interested in concerns of, in particular, residents of the area I represent, who are quite concerned with the direction the Department of Fisheries and Oceans are going forward in. I am concerned with Nova Scotia, not New Brunswick. When we have an individual fisherman who has no interest in joining a group, how does he have an input with the direction your department is going in?

MR. HANSEN: Right now if you look east of Halifax, I think, with respect to provincial legislation, they were the only ones who voted in favour of mandatory dues. That is from basically Halifax East to, I think, Guysborough; I am not sure of the provincial boundaries. Then you have all of Cape Breton. They have organized themselves with all the different associations in Cape Breton: they have one fixed gear community management board and I think seven or eight different associations from Richmond County Fishermen's Association, all the way up to North of Smoky Fishermen's Association in Cape North.

[2:30 p.m.]

Now, every fisher can choose two things; they can choose to fish under the plan of the community board in their area, they can choose to fish under another community board outside of their area. In order to do that, the two boards have to agree. Obviously, if one board is going to end up with more fishermen, they would probably make some arrangements to have some portion of the quota shifted, that is up to the two management boards. Failing anything to do with the community management board, there is the single plan that DFO administers.

We have, on average, from 12 to 25 individuals each year who do not want to be part of the community management board and they fish under what we call DFO Group X. We have percentage quota set aside. The rules for that group are: they start in June, there are no seasons, I guess, not spread out, there are no trip limits, you catch what you catch, bring it in and you have 100 per cent third party verification through DMP and when one of the three major quotas, either cod, haddock or pollock is caught, the fishery is over for that group and they can't move to any other group. Just like the rest of the community boards function, the fisherman has a choice.

MR. CHAIRMAN: Mr. Boudreau, maybe with your cooperation, we could move along to Bill Dooks. We will come back to you, Brian.

MR. WILLIAM DOOKS: Mr. Chairman, a couple of questions. Why did the department stop the buy-back program for groundfish licences of less than 45 feet?

MR. BURKE: We ran that program with an industry advisory board. We had so much money to spend and we had a target to reach in terms of the number of licences that were expected to be bought with the money available. The advisory board's recommendation with respect to how we would spend that money was that they wanted to get that target with the least amount of money spent. Basically, we did achieve that. We retired almost 400 licences in this last round of buy-backs and we spent probably about 75 per cent of the money that was

[Page 28]

allocated to the board. The committee's recommendation at that point was that we should go back and see if we could have the money reprofiled to some other kind of more productive use, they felt, for the industry as a whole. So, we are actually in that process now. We haven't really completed that process. We have to go back to Treasury Board and try to advance other ideas for how we would go about spending that money more usefully in the environment of this community quota system that has been set up in the meantime.

MR. DOOKS: The average age of the fisher in the Atlantic Region, do you have stats on that?

MR. BURKE: I can only guess on that, but it probably would be, if you will take a range, between 48 and 54. The same as us, pretty much, you know, sort of a demographic, it looks a lot like the rest of us guys, increasingly.

MR. DOOKS: So would you say there are more licences for sale now than what there would be fishermen to purchases? I understand that it is hard for a fisherman now to sell a ground licence because the buy-back package is gone. I know a number of fishermen who are having a problem to sell them.

MR. BURKE: Back to a comment I made earlier, the government's buy-back program was a very generous treatment of groundfish fishermen. In essence, they were holding onto a licence that had no market value because there was no underlying fishery. So the buy-back program allowed them to get a very good price on a voluntary basis but they were asked not just to sell their licence but to actually leave the fishery permanently. So, in fact, we weren't just buying a groundfish licence, we were buying a lifestyle.

MR. DOOKS: This has been happening over the last 10 or 15 years, whatever the case may be.

MR. BURKE: No, more like the last five.

MR. DOOKS: My concern, of course, I represent the Eastern Shore, and my concern is, as you said we have a lot of people aged 48, 50, 55 in the fishery and soon they will be 65 and want to retire. I want to know what incentive or is there any movement to try to bring a young group of fishers into the business? As I see it, as people retire, it is going to leave a void and if you have communities that are focusing and making their livelihood on or off the fishery eventually, we'll say in 15 years, the fishery is going to be removed totally from the rural communities and this will allow a certain allotment or allocation of quota, which I am very much afraid may be transferred to the draggers or to the bigger fisheries.

MR. BURKE: No. We are back to the same rule that we talked about earlier. The shares of quota available to these various groups are available on a percentage. At the moment, the underlying TACs are zero, but we are holding in abeyance here the fact that those groups have a certain historic right to a percentage. If those stocks come back, when those stocks come back I hope, we will see those shares replenished. So, the licences which we haven't bought back,

[Page 29]

which will still be available if they are renewed by those fishermen, will take on a value related to the recovering stocks. So, they will be in those communities, they will be available for the next generation of fishermen to acquire, whether it is the son of the first guy or whether the guy is still around or whether he sells it to a neighbour. That is the way the system is geared up to work at the moment.

MR. HANSEN: I was just going to say, if you look at the percentage shares through history, we have never gone the other way where we have gone from fixed gear to mobile or from inshore to offshore.

MR. DOOKS: Thank you. Next question. Do seals eat fish?

MR. BURKE: I think the answer to that is definitely they do eat fish. The question is how much?

MR. DOOKS: How much. Is there any movement for a seal harvest, I mean in the local fishery, not the pup harvest but to do something with the seals, and I say harvest, I say that respectfully, is there is any movement at DFO that they would have to be able to utilize that?

MR. BURKE: There is an interim report that was just leaked. There is quite a large seal fishery review ongoing at the moment. I would rather wait until we get the results of that very illustrious group's deliberations and they will answer all your questions, I am sure, about seals.

MR. DOOKS: Processing plants, we know they are importing fish from Russia. There doesn't seem to be any shortage of fish from our shores for friends in Europe or the northern part anyway. Do we have fishing vessels doing a fishery in the northern seas?

MR. BURKE: No, Canadians historically have not had a distant water fleet that fished in (Interruption)We were colonized by others coming here and doing it that way and we never really did get off the mark to do distant water fishing.

MR. DOOKS: How come their fishery remained constant and strong?

MR. BURKE: Well, it hasn't. The fact is that it has been through some cycles and there are some strong fisheries globally and some weak fisheries globally at the moment.

MR. DOOKS: Where do you see us in 20 years as far as Nova Scotia is concerned in relation to the fishery? Give us a guess.

MR. BURKE: I really wish I had an answer for that question for you.

MR. DOOKS: You're an expert in the field, I am sure in the evening you lie back and guess.

[Page 30]

MR. BURKE: We will be doing everything we can to ensure that we continue to have a really strong economic sector that is based on the fishery in Nova Scotia.

MR. DOOKS: You certainly understand that there are some areas, some regions, of Nova Scotia that still depend very much on the resource fishery?

MR. BURKE: Absolutely.

MR. CHAIRMAN: Thank you, Bill. Perhaps we could move to Kerry Morash. For our witnesses benefit and committee members, Kerry joined us a little late, so Kerry, welcome.

MR. KERRY MORASH: I apologize for being late, it certainly wasn't intentional. I understand from my colleague that you really haven't discussed the silver hake fishery a great deal or have you covered that?

MR. BURKE: We have touched on it.

MR. MORASH: I have a couple of questions. One, I guess, is the future of the silver hake fishery for Nova Scotia, what you think it may be; I understand it to be experimental and a research fishery. You are probably aware, we have a plant in Queens County, Bluewave that has been very successful in bringing some fish ashore and processing it and moving it along. Probably to cut to the chase, Queens County has 17.5 per cent unemployment. Do you see that fishery growing and creating more employment in Nova Scotia, particularly in Queens County?

MR. HANSEN: Number one, the bad news is that we have gone from a high TAC of 135,000 tons for the overall stock out there. Right now, last year or the one we are in now, it is at 20,000 tons. The advice that we just recently received from the Fisheries Resource Conservation Council that makes recommendations to the minister on what the TAC levels are, that has right now recommended to the minister status quo. So we are looking possibly at that level of 20,000 tons.

Now having said that, we have gone from a fishery that was exclusively foreign not too many years ago, nothing was even coming ashore but it was all being fished by foreign countries and taken home and it was surplus to our needs. The department has spent a lot of money in conjunction with the industry in trying to develop this fishery to the point where we have had increased interest by the inshore; normally, the fishery would only be conducted at the edge of the shelf. The industry said, what about looking at a little inshore or deep water basins, both Emerald Basin and LaHave Basin? Now, a couple of years ago, even though the TACs have come down, we now have a fishery that is exclusively Canadian, it is not allocated to any foreign, except 2 per cent that is under treaty to France. We have a 5,000 ton allocation that is allocated each and has been for the last few years to Bluewave and they have had the opportunity to fish it with foreign or domestic vessels.

In essence, it has been a Canadian quota and percentages have come ashore as well. The rest of the fishery, let's say the remaining 15,000 tons, has been fished by less than 65 foot

[Page 31]

draggers in the basin and they are landing now an average of 10,000 tons. Right now they still have a couple of months left. But that is a fishery that really was non-existent before. You are dealing with a species that is a gadoid, a relative of the cod and the haddock. It is much smaller, grows very quickly and has a high mortality after three or four years. So, you are fishing anywhere from two to three years old and it is soft fleshed, it deteriorates very quickly and foreigners use freezers at sea, small draggers are doing a box system, in and out in a couple of days quickly is what they have developed.

Right now, I would think it is beyond the experimental and it is virtually a Canadian fishery and if the resource increases and the markets are better, then I think you are seeing a very reasonably successful Canadianization story here.

MR. CHAIRMAN: Thank you, Mr. Morash. I just have to go to the list, whereas we are going around the second time, in some cases third, we will maybe allocate 10 minutes for some short snappers. Frank.

MR. CHIPMAN: Mr. Chairman, I have 10 minutes? (Laughter)

MR. CHAIRMAN: No, collectively.

MR. CHIPMAN: One's a statement and the other one is a question. I know in my area I thought it was at 44/40 on the Bay of Fundy in the scallop fishery, is it the 4X and 4W, is that what you referred to? There are more.

MR. BURKE: There are other designations for different fisheries. There is a line there.

MR. CHIPMAN: Anyway this is just a statement, but I know I have had different discussions with the scallop fishermen and I know we are talking about groundfish here today. Their concern is that the 250 boats out there fishing the Bay of Fundy for six or seven companies have the most lucrative, which is the tip or the finger of Georges Bank.

Just a small question I was going to ask. Some of us here have a little bit of time once in a while, myself I don't but I think most of them are hard-working gentlemen around this table, I don't see any of the ladies here - Darlene is not an MLA, but . . .

MR. CHAIRMAN: Is there a question somewhere?

MR. CHIPMAN: There is, Mr. Chairman. I don't have to have a licence to go out and fish do I, I can go out and fish 10 groundfish a day, is that correct?

MR. HANSEN: Yes, recreationally. You can fish 10 groundfish, any combination of groundfish, no halibut, zero halibut.

MR. CHIPMAN: I wasn't aware of that until last year. You don't include mackerel as a groundfish would you?

[Page 32]

MR. BURKE: No.

MR. CHAIRMAN: Thanks, Mr. Chipman, I appreciate your comments and questions. Don Downe.

MR. DOWNE: Two quick ones if I can. One just as a point. Silver hake, we were very instrumental in helping to bring that in your area and it is a great program, hopefully, it is very successful in your area.

The 3D seismic work that is going on with the offshore. There have been some concerns with regard to the impact that it has on the shellfish industry and other fisheries. Can you tell us what the status is now with regard to that issue? It is a legitimate concern of the fishermen in different areas of this province and also a legitimate requirement to develop the offshore. Can you give us any insight on that?

MR. BURKE: Again, you are sort of out of our specific area of expertise but there are indeed some reviews going on right now with respect to the environmental impact of 3D seismic work and the concern is mostly on the behaviour of shellfish and on larvae and plankton perhaps. I think we are going to have to wait until that review comes back in. I don't know if there is anything definitive on that.

[Page 33]

MR. DOWNE: It would be worthwhile getting in the last one, if I can, Mr. Chairman. I think Bill mentioned it a little and talked about the future of the industry and I realize that is an open-ended question. I guess the department itself internally must continually look at developing strategies for the future of the industry or strategy for the next five years. In my riding, the inshore fishermen are hurting, they are finding it very, very frustrating; it has gone from a multigenerational industry to fewer and fewer fishermen in my riding. I was at a meeting last night and they are telling me a lot of concerns relative to the fact that they can't fish very much. That's a legitimate, rural community concern. As an MLA I am concerned for them.

My question to you is - I doubt I am going to get a really straight answer on this, 1000 per cent, and I don't mean that in a derogatory sense, but there has to be some strategy here in sustaining the rural fishing industry as well as the fact that there is going to be an offshore fishery of some sort. Our local people, the hook and liners, and all those others who talk about sustainability, they talk about rural communities, they have lived there, they were born there, their families lived there, they are hurting and they are scared about the future. They really are legitimately concerned about their future. I would like to know if the department is working on or has or is prepared to announce a specific strategy to deal with those individuals, other than what we have been talking about today, which, in many ways, for me, is confusing as all get out?

MR. BURKE: It is difficult in two hours to deal with, I mean there is a lot of detail and a lot of twists and turns in the fishery and in fisheries management. I am just going to give you a slightly different view of some of the numbers you saw earlier. This is a graphic that shows what has been happening again, more like the same period, 1990 to 1999, which is the last year for which I could do this kind of division for you. In 1990, 32 per cent of the fish landed in the region was landed by vessels greater than 65 foot and for the most part, those are the larger company vessels; 13 per cent was landed by vessels 45 foot to 65 foot; and 55 per cent was landed by boats under 45 foot in length. In 1999, the picture had changed slightly. Essentially, the two larger groups saw a reduction in their share of the pie, as you can see there . . .

MR. DOWNE: The same size pie is it?

MR. BURKE: The pie is quite a bit bigger. The pie is 41 per cent bigger, if you remember that earlier number, more or less.

MR. DOWNE: You are comparing the same pie.

MR. BURKE: Yes, same areas. The portion of that of the value going to smaller vessels, under 45 foot. is up to 62 per cent. So it is 62 per cent of the bigger pie. The thing to also keep in mind is that the brown part or the reddish part of that pie includes those offshore vessels that are bringing fish in from Newfoundland. So if they weren't bringing in the fish from Newfoundland, it wouldn't be coming to Nova Scotia at all. If you think about where fish is caught, landed and processed in Nova Scotia, it doesn't happen in Halifax, it happens in rural Nova Scotia, it happens in communities throughout Nova Scotia. Unlike many other provinces in Canada even, go to British Columbia, a lot of the activity centres around Vancouver and

[Page 34]

Victoria or Prince Rupert. If you come East, you will find it, for the most part in fact what happens here happens elsewhere. It has been the small rural communities that has been the focus of the fishery, and that includes even the offshore operations as well. So, really in Nova Scotia the fishery is very, very important to rural Nova Scotia. The fishery for the last decade, in spite of all the bad news, has been actually dramatically successful and the beneficiary has been rural Nova Scotia.

MR. DOWNE: If the Chairman will let me.

MR. CHAIRMAN: Go ahead, one more comment.

MR. DOWNE: The thing is, these numbers, it is interesting, I knew you were prepared for this question because you could hardly wait until somebody asked it, but the reality is if that is factually accurate . . .

MR. BURKE: I guarantee you that it is.

MR. DOWNE: . . . then why isn't that message out there and why are my fishermen in my riding telling me something altogether different than that. They have no reason to mislead me. They have no reason to hide anything. If the catch is substantially higher, 7 per cent higher on a graphic that is 40 per cent bigger than it was 10 years ago, why are they telling me altogether different . . .

MR. BURKE: Keep in mind all the data we have shown you.

MR. DOWNE: These are people I know, friends, and they are telling me, Don, this is not the same, and you are coming here and saying, Don, they are wrong and I am right, this is wrong.

MR. BURKE: Keep in mind that we are trying to provide you today with a fairly balanced picture. Keep in mind that what we have told you today is that the groundfishery has really taken a big hit. If you were primarily dependent on groundfish in Atlantic Canada over the last 10 years, you have seen the underlying source of your income dry up, if you are east of Halifax, totally dry up; if you are west of Halifax, it has diminished dramatically. If you are a crab fisherman, if you have been a shrimp fisherman, if you have been a lobster fisherman, for the most part your income has increased dramatically.

So, who is coming to talk to you? Is it the guys whose incomes have increased dramatically or the guys whose incomes have decreased dramatically? I guess that is the question I would ask you.

MR. DOWNE: That is why we use the total value, but anyway, I will stop. Thank you, Mr. Chairman.

[Page 35]

MR. CHAIRMAN: Thank you, Mr. Downe, appreciate your cooperation. Now, we do have two or three other members here who have very succinct questions, and brief answers will be forthcoming I trust. Bill Estabrooks.

MR. ESTABROOKS: Discarding is happening, dumping is happening, I don't think you can deny that. I'm wondering, how many prosecutions have you had for that particular practice and what are the punishments, a fine system, et cetera?

MR. HANSEN: I don't think we have had very many on discarding or dumping. You are dealing with a topic that occurs when nobody is there to see it. When you have an observer or a departmental official on board the vessel, it doesn't happen. If you look at what you believe to be occurring - and I will say that it is probably occurring, but has it always been occurring, is it more now or less? I would suggest that if you talk to many people in the industry, it is less than it was.

Several years ago, prior to 1994, within legislation we had the ability to legislate trip limits. We had the ability, and within regulations that said there are size limits on groundfish, you shall not catch and retain anything less than 17 inches. Anything over the prescribed trip limit is prohibited and you can be fined if you exceed - let's say the trip limit was 10,000 pounds. So we talked a lot to the industry and went back and removed those; this is what amounted to fisherman saying I'm damned if I do and damned if I don't, I have no choice; if I don't discard the small fish or what is over my trip limit, when I come in I will be charged. So we removed from legislation the ability to set trip limits, and therefore had to remove minimum fish size limits.

We replaced that with new legislation that says you must land all groundfish and it is an offence to discard anything. So we went from what industry called legislated discards by the departmental regulation, to now where you are required to bring everything in.

When we are there, as I said, discards do not occur. But there are other ways of looking at that. We do random boardings by Fisheries officers, measure the size of fish to see if they are small or not, measure the species composition, then try to compare that when the landing comes in if it is similar or different. If it is different, we can use that individual, maybe as a targetting; let's put an observer on and see if his behaviour changes. We close areas where we deem that the fish are small, and then we require that only individuals or fishing boats with an observer on board can go in there. We developed a policy protocol in dealing with small fish that made it not a chargeable offence.

Fishermen cannot be charged for bringing in small fish; if anything we would prefer, at least, to see them so we have signs of incoming year classes or recruitment. If it is too much - our cut-off is 15 per cent by count number - then that area where he caught it will be closed for a period of 10 days and we go look again, and so on. So those are all the changes. As I said, we did the mesh size thing, increased that. We had better selectivity on some of the draggers. Ultimately we are dealing with responsible fishing practices which have to be adopted by the industry. Industry cannot afford to pay for a cop on every boat, it is impossible, and the

[Page 36]

department doesn't have the money to go out and do spot checks on every single boat. Ultimately the industry has to be responsible and it has to look after it.

MR. CHAIRMAN: Mr. Boudreau.

MR. BOUDREAU: Okay, I'll ask my question. A lot of independent inshore fishermen indicate to me that DFO is only interested in dealing with large fishing operators, that they really don't have too much interest in dealing with small independent fisheries. They indicate to me that they feel this is the reason fees have increased significantly in recent times. I guess my question is, how do you answer to these comments?

MR. BURKE: Well, Jon here is the full-time guy who talks only to small-scale fishermen, for the most part. I spend a lot of my time, and I can assure you that there are department officials throughout DFO who would spend most of their day talking to small independent fishermen. That would be the bulk of our business.

MR. BOUDREAU: But talking to them, and listening to them and hearing them are different issues. But anyway, I have one more small question. Many people say - and you deny it here today - that the use of draggers and other such vessels is not hurting our fishery. I believe it is, I will be honest with you. Can you provide documented proof to indicate that this is actually not occurring in our local fishery?

MR. BURKE: There are a couple of truisms, I think. Almost all fishing gear aims to kill fish; that's the basic design purpose of the fishing gear, to go out there and catch fish. There certainly is a large body of individuals who would say that draggers are a form of technology that can be and are destructive, as well, to other species or to the habitat. Some work is going on with that. I think it depends on where you are fishing, what the bottom looks like. There would be some areas that would be more vulnerable than others and I'm sure that there is some incidental damage done by dragging technology.

There is also some incidental damage done by other forms of technology. The gill-nets are probably serious ghost-fishing technologies. When nets are lost, they continue to fish for quite a long time afterwards, as they roam around the bottoms, getting tangled up in various things. We have heard a lot of talk about damage done by draggers to corals. To what degree? Draggers would basically say, well, we don't go where there are corals because the problem is, we rip up our gear. Quite often a lot of the samples of corals that are actually brought forward as examples of things being out there, are corals that are tied up in fixed gear boats that drop anchors overboard, right onto the same corals. If enough fixed gear boats drop anchors into areas where they can fish successfully onto corals, I'm sure it doesn't do the corals any good either.

If you go across the technologies, you can find sins in each of them with respect to incidental damage, depending on where they are being used and how they are being used. Our objective is, as much as possible, to minimize that kind of damage and the fisherman's objective is to try to fish in areas where they are going to get away with the least amount of damage to

[Page 37]

their own gear. So there is some common purpose there and I think we will increasingly see more sensible uses of all those technologies for the different kinds of fishing.

MR. CHAIRMAN: Thank you, Mr. Burke, and the final question goes to Mr. MacDonell.

MR. ESTABROOKS: A short snapper.

MR. JOHN MACDONELL: Thank you, I will try to be brief. I do want to comment on your comment on draggers. What I would like to see DFO do is an analysis of what is happening with draggers, because I think there is a big difference between dropping a bunch of anchors and hitting coral, and dragging the anchor for a mile. That is definitely not quite the same thing.

[3:00 p.m.]

I wonder if you could answer a couple of things very quickly. One is who makes up the Fisheries Resource Management Council? The other would be around the return of the groundfish, particularly the cod. At another meeting a month or so ago - it was a seminar on lobster - when talking to people from DFO, one individual thought that prior to the collapse that the health of the cod stock wasn't great and that there had been some theory about water temperature at the time and how that has only recently started to right itself and they think that may help the stock return. So I just wonder if you could answer those two.

MR. HANSEN: What I will do is I will leave this one here at the back on size and structure. There is a combination of 14 people, industry and that and there is a whole list of people. I will leave this document.

MR. BURKE: With respect to your question on environmental conditions and groundfish, yes, there is one consensus in the scientific community and that is that water temperatures in the area, in fact, if you drew a line right off Halifax, the ocean currents happen to mingle there. The northward flowing cold water currents had actually crept down into all of the areas off the Grand Banks, into the Gulf of St. Lawrence and onto the eastern Scotian Shelf, to the point where water temperatures were at the bottom end of the tolerable ranges for groundfish species, primarily the cod, the haddock and the ones we were most dependent on. The northern moving warm currents actually met there.

On the Pacific Coast we are all familiar with El Niño. Well those of us on the Atlantic Coast should become familiar with the gyres that actually operated exactly the same way on the Atlantic side. That is a combination of wind and water currents that caused that to happen. We had a period of about 10 years where cold water temperatures adversely affected the productivity of groundfish stocks. Those conditions have reversed themselves. They reversed themselves about three or four years ago and we began to see recruitment; that means very small fish coming up to juvenile age.

[Page 38]

What has been disappointing to the department, in areas where there was no fishing at all, our assumptions basically here and throughout the North Atlantic, including on the European side, are that we basically crop off about 20 per cent of the stock through fishing. There was another assumption that about another 20 per cent of the stock died naturally of whatever causes: old age, sickness, whatever.

When we stopped fishing entirely we were conducting a really interesting large-scale experiment, in that we had taken out what's called the fishing mortality. What we are seeing now is that instead of there being a natural mortality of 20 per cent, we are seeing natural mortality more like 50 per cent. So we are getting the young fish coming into the fishery, growing to a certain size and then they seem to be disappearing. We don't see any signs of sickness, we don't see other explainable causes at the moment that there is a consensus about, but we haven't seen the recovery that we would have expected to see in overall stock abundance in those stocks from Halifax North, even though the underlying environmental conditions in the ocean had returned to pretty much normal a few years ago.

MR. CHAIRMAN: Thank you, Mr. Burke, and I believe with that we will have to conclude today's agenda of our hearing. On behalf of the committee I want to thank Mr. Burke and Mr. Hansen for coming in - Mr. Boudreau?

MR. BOUDREAU: Can I ask that this list be provided to all members of the committee, please?

MR. HANSEN: Yes, I will send one over to every member.

MR. CHAIRMAN: Thank you very much. We do appreciate your patience, indulgence, and the information that was gleaned from the hearing I am sure will be very helpful and useful. Maybe some day we can welcome you back.

MR. BURKE: It was our pleasure.

MR. CHAIRMAN: Committee members, we have some unfinished business. I know some committee members have other meetings to get to, including yours truly, but under Committee Business, first of all let's deal with our next hearing and perhaps somebody could make a motion as to who we would bring in, who we would contact. Mr. Estabrooks.

MR. ESTABROOKS: In the sense of continuity and I know that perhaps there are other people or other groups, but I was under the impression that my caucus had submitted a letter earlier to you that there were other groups from the fishing industry that we were going to look at. I particularly point to the Nova Scotia Dragger Fishermen's Association or Clearwater Fisheries, but is it your intent to move away from the fishing groups to move to other witnesses?

MR. CHAIRMAN: If I might, I was going to leave the decision relative to the next witness up to the collective committee and that is why I am open for a suggestion as to who we might bring in next. I don't have any particular difficulty bringing in another group regarding

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the inshore/offshore fishery, but I guess I am at the beck and call of the committee. I guess in that sense we would be looking for some direction. Mr. Estabrooks.

MR. ESTABROOKS: If I may, I would move, if possible - and I know Darlene is under the direction of the committee and it depends upon this - that for the sake of continuity, I would recommend that we have a representative in from the private sector, Clearwater Fisheries and a second choice from our caucus would be the Nova Scotia Dragger Fishermen's Association.

MR. CHAIRMAN: Any discussion on the motion?

MR. CHIPMAN: Just for clarification, Mr. Chairman, the other groups you have here on the list, were they pending coming in before this issue arose?

MR. CHAIRMAN: They haven't been contacted but there is an outstanding witness list that obviously isn't focused on any particular area: Irving; an Economic Development officer; New Deal Development; and the Ready Mix Association. Mr. Dooks.

MR. DOOKS: Mr. Chairman, is it necessary to bring other witnesses in on the fishery issue? What is the purpose of bringing other people, they haven't asked to come in and I think we have addressed the - it first started off with the Shelburne group. The purpose of this today was to bring some clarity to their issues. I don't know if we have achieved that or not but I mean, do we continue down this road? Is it necessary?

MR. CHAIRMAN: Mr. MacDonell.

MR. JOHN MACDONELL: Mr. Chairman, I am not a regular member of the committee but I was here for the Southwest Nova Scotia group. My understanding when they left, I think their request was we get a number of people from the industry in and hear what they might have to say on the issues that they raised. That was my impression, it was a little more extensive gathering of information.

MR. CHAIRMAN: Mr. Downe.

MR. DOWNE: It seems to me . . .

MR. CHAIRMAN: I'm sorry, Brian, I didn't know if you had your hand up or not. I think to be, fair Brian Boudreau had his hand up there.

MR. DOWNE: Absolutely.

MR. CHAIRMAN: We weren't trying to sidestep him there.

MR. BOUDREAU: Mr. Chairman, I'm not having a good day over here. I will have to stand on my chair so you can see me from now on. I agree with my colleagues from the Third Party that we bring in other fishery groups. I totally support that initiative; however, I believe

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that the Department of Fisheries has committed to provide information to this committee and I for one - and I am not a school teacher or principal, I am a mere auto mechanic as I am called on the street, Mr. Chairman - would prefer to see perhaps a month go by for us to have ample time to analyse the information that the federal department is going to provide the committee members.

MR. CHAIRMAN: Just on that point, relative to the next hearing date, I believe we are looking at March 20th, based on March Break and other considerations and from conversation with our very capable Clerk here, Darlene, and that probably would be plenty of time to sort of internalize some of the information that we have received.

If I could just comment before I recognize Mr. Downe, there will come a time when we do have to draw the line, in fact, on fishery and fishery-related topics. I think, quite frankly, that the Resources Committee might be a more appropriate body to entertain some of these presentations, although we made a commitment, let's not forget, all caucuses agreed in an effort to bring Mr. Sears down from the mast of the Bluenose, quite honestly, that we would bring in another witness or whatever. We did have DFO in, obviously today and as far as I am concerned, as Chairman of the committee, I am at the beck and call of the committee members, but I would be quite comfortable moving on to other witnesses. Mr. Downe.

MR. DOWNE: It seems to me in Hansard that we talked about a motion and we talked about bringing somebody else in. I think it was pretty clear, at least I understood it to mean that we would be bringing in another body.

My suggestion is tying in with both my colleagues here. Number one is to follow through with the fishery to some degree. It can't be every week on the fishery, I mean we have a lot of other issues out there of concern to people, but I do think to do justice to the concerns of the people in the fishing industry, it would be only fair that we would fulfil the obligation we made to the men who were here that day before our committee. I agree with my colleague that a period of time needs to elapse, maybe a month is a reasonable time, because I think we need to get the minutes from the meeting, the types of issues that those individuals are saying to us are important so that we can frame our questions for the next group, because we are getting two different signals, two different messages.

It is very concerning to me as an MLA: my people are telling me one thing, I am being told another; we have numbers showing one thing, one says it is not the size of the catch it is the value of the catch; lobster prices are up today, they are down tomorrow and that is going to change; and so on and so forth. So I would suggest that - we had some inshore fishermen, we had the DFO - we need to do something on the offshore side, to understand the corporate, whether it is the suggestion of Clearwater or National Sea or one of those bodies, I think that would be beneficial for us and I would suggest that we do that a month from now.

My suggestion is for the next meeting that we maybe go to another sector. We had a meeting on economic development in Cape Breton recently, we can either follow up with another issue on economic development because clearly there is an economic crisis in that part

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of this province, in Cape Breton. If we are not prepared to do that, then I am quite prepared to move on to the Ready Mix Association to hear their concerns. They would like, I am sure, getting into the road construction time, they have some ideas about construction and I think that would be an appropriate time to meet with them.

MR. CHAIRMAN: Mr. Chipman.

MR. CHIPMAN: Yes, Mr. Chairman, I have a tendency to agree with the member for Lunenburg West. We are all interested in the fishery of Nova Scotia, no doubt about it, it affects most of us, but it is a federal issue and we have heard from DFO today and I think they were the first group on the list we were going to deal with. I guess I would have to agree with the people from the Second and the Third Parties or the Third and Second Parties, whichever way you want to refer to them, that we give a month or so to pass and digest the information and move on from there.

MR. CHAIRMAN: I think that is a good point. You are quite correct, most of the fishery-related concerns are federal by jurisdiction. So would somebody possibly make a motion regarding our next witness.

MR. ESTABROOKS: Mr. Chairman, excuse me, I was under the impression that I had made a motion. I recommended that our next witnesses be Clearwater and the Dragger Fishermen's Association.

MR. JOHN MACDONELL: Mr. Chairman, before you go to the motion. For the members of the committee, Mr. Grady of the Southwest Nova Scotia Fishermen's Rights Association requested that we contact other fishery associations, fishermen and business organizations prior to listening to DFO because, in his words, they will tell you a fairy tale and expect you to believe it. So, their intention and hope was that we would listen. I will go by whatever the committee wants to do but I certainly don't want to see this wind up too far on the back burner.

MR. CHAIRMAN: Any other comments on the motion? Would all those in favour of Mr. Estabrooks' motion please say Aye. Contrary minded, Nay.

[The motion is defeated.]

MR. DOWNE: Just to clarify, you already made the vote - you were very quick, Mr. Chairman, because it is a few minutes after - but I understood were talking about maybe letting a month or so go by?

MR. ESTABROOKS: No, the motion states . . .

MR. DOWNE: No, no, I am just saying that is what some of the conversation of the motion is specifically at the next meeting to move directly back into that.

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MR. CHAIRMAN: If I could just intervene, Mr. Downe, the motion has been defeated. Are there further motions regarding our next hearing?

MR. BOUDREAU: I make a motion, Mr. Chairman, that we invite Mr. Whalley, the Economic Development Manager for the Cape Breton Regional Municipality to put forth a presentation to this committee. I guess my theory there is probably a follow-up from Father Greg MacLeod, just to see if the municipality and perhaps there is not a clash of direction here or if they are on the same page in regard to economic activity and growth in the Cape Breton Regional Municipality, in particular Cape Breton Island.

MR. CHAIRMAN: So, your motion is that we contact Mr. Whalley, the Economic Development Manager and ask him to come in as a witness for our next scheduled hearing, which is March 20th.

Are there any comments or questions? Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

MR. DOWNE: Will you entertain another motion, Mr. Chairman? The following meeting then can we revert back to the recommendation by Bill with regard to the two fishing groups? That gives us enough time to review the minutes and to prepare properly for that meeting. I move, Bill, the two organizations that you recommend for the following month's meeting.

MR. CHAIRMAN: Bring them both in together, Mr. Downe, for clarification?

MR. DOWNE: Can they both get in, could we fit them? We would have to be very specific around the table here, we have a limited period of time and the House will be in session.

MR. DOOKS: We have to be careful with our questions.

MR. DOWNE: I think you are absolutely right, Bill, if we could do that. Is it possible to meet with both of them at one time? I think it could be. We would have to keep a very tight time-frame.

MR. CHAIRMAN: It will give Darlene a little window to work with too, yes.

MR. DOWNE: So I move that the following meeting would include Clearwater and the Dragger Fishermen's Association.

MR. CHAIRMAN: The date of that meeting, Darlene.

MRS. DARLENE HENRY (Legislative Committee Clerk): It is biweekly.

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MR. CHAIRMAN: So we have March 20th, that would be over into April then.

MRS. HENRY: April 3rd.

MR. CHAIRMAN: You have all heard the motion. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

That motion is carried as well.

Just something under old business. At the request of the Liberal caucus, we sent a letter to the Speaker, the Honourable Murray Scott, asking if there was money or if they could make money available for this committee to go to Cape Breton regarding economic development issues. We have heard back from the Speaker and I will just quickly quote the Speaker: "As you probably are aware, no monies have been budgeted for travel for the committees and unfortunately at this time, we do not have the funds available to grant your request. However, if you would like to submit a request to be considered in next year's budget, I would encourage you to do so and it will be considered at that time."

The thought, I guess, behind the Liberal request was that people in some parts of the province feel that government is not being accessible, so we agreed that the request was reasonable but obviously there aren't monies to take that trip. Does the committee feel that we should pursue this further with the government, Cabinet or through the Internal Economy Board? Darlene, maybe you want to give us just a little background on these types of requests before I recognize Mr. Estabrooks.

MRS. HENRY: As in previous times, the chairman writes a letter to the chairman of the IEB requesting additional funds for such ventures and whatnot, so it has to go through the Internal Economy Board for them to give us approval and we just put into the letter the purpose of the estimated budget of what it is going to cost and the length of time. This request was over a two day period. Again, we will submit the same bit of information that we did the first time to see if we can get an approval for next year's budget to do so.

MR. CHAIRMAN: Darlene costed everything, committee members, had it all worked out. I don't know if we provided all members with a copy of that. She had it all broken down, like advertisement, accommodation, hall, rental or whatever. (Interruption)

MR. ESTABROOKS: Mr. Chairman, I move that you, as the chairman, request to the Internal Economy Board consideration in budgetary decisions to allow for a trip this year, particularly to Cape Breton.

MR. BOUDREAU: I second the motion, Mr. Chairman.

MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

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The motion is carried.

I shall write a letter to the Internal Economy Board regarding that request. Thank you very much.

The meeting is now adjourned.

[The committee adjourned at 3:21 p.m.]