CIIT Committee Meeting

     Good morning. Welcome

    To any visitors in the back, welcome to our continuation of the Standing Committee on International Trade's consultation with Canadians and stakeholders on the implications of the TPP.

    It's good to be back in Ottawa, I guess. We've done six provinces so far. We started in British Columbia and then did the western provinces, and we did Quebec and Ontario last week. We're back here, and we're going to Atlantic Canada. We're saving the best for the last. We're waiting for all the seafood to come in and then we'll get out to taste it in the fall.

    We have had a lot of consultations across the country. We've heard from many different stakeholders, whether it's the health industry or agriculture, but we haven't had many seafood people yet. Today we're focusing on the seafood industry.

     I have to say to the witnesses that we're in a time in Ottawa when the votes can be called at any time. That may happen, but we're going to proceed as if there are no votes and we're going to go from there.

    Today, on our first panel, we have two witnesses. We have Clearwater Seafoods and the Maritime Fishermen's Union.

     I don't know if the Maritime Fishermen's Union is on the phone and can hear us, or if they are going to be coming in a little later.

    Can you hear me?

    Yes. Thank you for being with us.

    We're going to start off with Clearwater Seafoods, and then we'll move on to you for five minutes. Then we'll have dialogue with MPs.

    Christine Penney, go ahead, for five minutes.

    On behalf of Clearwater Seafoods, I would like to thank the committee for the opportunity to present on this important issue. This year marks our company's 40th year in business—40 years of sustainable seafood excellence and trade. Clearwater got its start in international trade with a single truckload of Nova Scotia lobster being sold into Boston. Today we sell Canada's finest seafood around the world in over 30 countries.

    We see free trade and the Trans-Pacific Partnership as a critical element of our future success. I would like to offer our congratulations to the federal government on their demonstrated leadership in strengthening trade relationships that make our local economies stronger.

    By way of introduction, Clearwater Seafoods is a leading global provider of premium wild-caught shellfish. We were founded in 1976 and are now North America's largest vertically integrated processor-distributor of premium shellfish. We are one of Canada's largest holders of shellfish quotas and licences in Atlantic Canada, and we are one of Canada's only publicly traded fishing companies. We own state-of-the-art factory vessels with frozen-at-sea processing technology, and we have advanced on-shore processing, storage, and distribution capabilities. We employ approximately 1,400 Atlantic Canadians in coastal communities across Atlantic Canada.

    Clearwater has extensive global sales, marketing, and distribution platforms. As I mentioned, we currently have sales in over 30 countries, and approximately one-third of our business is in Asia.

    In 2015 we had approximately $150 million worth of sales into countries that are party to the TPP agreement. Excluding the NAFTA countries, U.S. and Mexico, sales to TPP countries amounted to $72.4 million. Japan alone accounted for almost 14% of Clearwater's sales in 2015.

    Clearwater has always been a supporter of reducing trade barriers around the world. In 1976, when we first opened for business, we were a small lobster distributor with a local retail outlet and wholesale export business into the Boston seafood market. Over the next few years Clearwater pioneered the concept of extended live storage and air shipments of live lobster into Japan and Europe.

    Clearwater is experienced at opening and developing foreign markets for Canadian seafood products. We have recently supported the ratification of the Canada-EU trade agreement, and we regularly participate in trade shows around the world, including in Asia, to develop our relationships with our customers and build global markets for premium Canadian seafood.

    In terms of the importance of the Asia-Pacific region to seafood generally, the Canadian seafood industry relies on export markets for our success. Our oceans have an abundance of resources that far exceed the demand for seafood in Canada. If you look at the Statistics Canada estimates, the value of the Canadian domestic seafood exports was approximately $6 billion in 2015. Asia-Pacific countries are very important markets for Canadian seafood products. In 2015 the estimated value of Canadian seafood exports to TPP countries was approximately $400 million, representing close to 8% of Canadian seafood exports. Of this, Japan accounted for $261 million, and Vietnam $106 million, making these countries the most important TPP markets for Canadian seafood.

    In Japan, seafood imports account for more than 50% of domestic seafood consumption; however, tariffs can be quite high, and in some cases are as high as 15%. The TPP will eliminate two-thirds of these tariffs, and all of them will be removed within 15 years. This is a very important element for increasing our trade relationship on seafood with Japan.

    In Vietnam, imports account for only 8% of seafood consumption currently, leaving significant room for growth. Consumption is also expected to increase by about 8% between 2016 and 2020. In Vietnam, tariffs can be as high as 34% on Canadian seafood products. With the TPP, 83% of these tariffs will be reduced to zero immediately, and all will be eliminated within 10 years.

     Coming back to the impact of the Trans-Pacific Partnership agreement for the Clearwater business, Clearwater competes globally for market share, and tariffs—

    If you could finish up in half a minute, that would be great.

    You'll have time to add to that when we have dialogue.

    Clearwater competes for market share, and tariffs and non-tariff trade barriers are important considerations for our business. There are significant tariffs currently on lobster, snow crab, and frozen shrimp in the TPP markets.

    In closing, the TPP ensures that Canadian seafood is on a level playing field globally, allowing Canadian companies to compete, expand, and invest for growth to the benefit of Canadian workers. Opening new markets and growing exports of Canadian seafood through expanded free trade will benefit Clearwater and all Canadian fisheries.

    I'll wrap it up there.

    Thank you very much.

    Thank you very much. You have quite the success story from one truckload of lobsters. Your numbers are amazing and the potential is quite staggering. Thank you.

    We're going to go to the beautiful town of Shediac.

    Is that where you're from, Mr. Brun? Are you in Shediac?

    Yes, that's correct.

    Thank you for joining us today. Could you give us your assessment of the TPP in five minutes or less?

    Go ahead, sir.

    Thank you very much, Mr. Chair. I don't know if the vice-chairs Mr. Hoback or Ms. Ramsey are present today.

    We thank you for the invitation to appear before the committee today.

    For a dozen years or so, I have worked for the Maritime Fishermen's Union in Shediac, New Brunswick. That is where the head office is located. We represent coastal fishers on New Brunswick's east coast and three regions in Nova Scotia, including Cape Breton—we work with Ms. Ludwig, who is a member of your committee—Pictou and Antigonish, as well as the southwestern regions of Nova Scotia, at the other end of the province.

    We represent more than 1,300 fishers of lobster, herring, halibut and a multitude of other coastal species. We also represent fishers who are owner-operators. They are the owners of their businesses and operate their own boat. These people live in the community, spend their income there and live in the regions to see them develop.

    This is very important, helps hundreds of communities in the Atlantic provinces to live, to grow and to be dynamic. Without this industry, it would be very difficult to live in the Atlantic provinces, especially now, because the economic situation is difficult. I also include Quebec, because fishing is very important there. Obviously, Pacific regions must be included as well. This region is a little less well known, even though there is often contact with people from there.

    I would like to highlight that I am also the president of the Canadian Independent Fish Harvesters Federation, an organization that includes all of these fishers' organizations, such as the Maritime Fishermen's Union, and represents more than 7,000 independent fishers. They own and operate their boats in Canada in the five provinces on the Atlantic coast, as well as in western Canada.

    We support reducing barriers and tariffs throughout the world, especially for our most important fisheries. Above all, our fishers harvest lobster and crustaceans. That's very important, particularly because this harvest is meant to be exported. Indeed, lobsters and shellfish are for the most part sold outside of Canada. Any reduction in existing tariff barriers increases the potential sale of species that are the most important for our fishers. This improves both the value of products and Canada's competitiveness in the seafood sector.

    I would like to share with you some statistics and their meaning. It is somewhat sad—I need to emphasize this very strongly—that the fishing industry is one of the most underestimated industries in Canada, when it is one of the industries with the most potential in the country. That has been the case for several years, because fishing depends on highly unpredictable marine environments. It is very difficult to conduct scientific studies when one is talking about the sea. Things are not visible or easy to access. The environment is very unpredictable, because there are many predators and many other activities that occur in the sea. Also, certain humans have an impact on our fisheries.

    It is very important to highlight both the importance and the potential of fisheries.

    Over most of the last 50 years, there have been highs and lows, but it has been proven that today, the potential is huge.

    Let's just look at lobster as an example. In 2014, the amount of lobster fished reached 352 million pounds. The value of lobster in Canada—or rather, I should say the Atlantic, because it is fished there for the most part—has now reached $1.5 billion. That represents an increase of about 33% over the last five years. It is unpredictable, but the potential is huge.

     Excuse me, can you wrap it up, sir?

    Yes, of course.

    I would like to quickly say two final things which are very important.

    First of all, the strategy for lobster and shellfish is to create a triangle of demand: in Asia, Europe and in North America. We depend entirely too much on North America, which represents about 86% of our exports. That percentage is much too high. We must diversify our sales. That is why free trade agreements and reduced barriers and tariffs are so important if we want to further develop the market in Asia.

    The last point I wanted to emphasize is very important as well. When negotiating free trade agreements, it is absolutely imperative to respect both the policies and Canadian rules of the game. In the Atlantic, there is an owner-operator policy. This is very important to ensure that the benefits of fishing remain in the hands of fishers, so that they make it all the way to communities and so that money earned is spent at home.

    As I explained, land use and the economies of hundreds of communities that have nothing else to keep their economies going are what is at stake. That is extremely important and non-negotiable. It is very important to highlight it.

    To conclude, it is clear that we support reduced tariffs in the Pacific region. It is very important for the future to develop the triangle of demand throughout the world, to better promote our seafood products and, above all, shellfish, which are very important for us.

    Thank you very much.

    Thank you, sir. You represent a very large group of fishers, men and women who work on or near the water. I commend you for the work you're doing.

    You asked who's on our committee. I'll introduce some of our members. Our members come from all over the country. We have Mr. Dhaliwal from British Columbia and Mr. Ritz and Mr. Hoback from Saskatchewan. From southwestern Ontario, we have Mr. Van Kesteren and Ms. Ramsey. From the Toronto area, we have Mr. Peterson and Mr. Fonseca. We have Madam Lapointe from Quebec and Ms. Ludwig from the Maritimes. I'm from Cape Breton, and you represent many people from my area, too.

    Anyway, we're going to open it up to dialogue with MPs. I'd like to get through most of the MPs, so please keep it brief.

    We're going to start off with the Conservatives. Mr. Ritz, you have the floor.

    Thank you, Mr. Chair. Thank you for your presentations this morning, ladies and gentlemen.

    I'm familiar with Clearwater and the great work you do in Japan. About a year ago, I had the opportunity to be with your president as we did a taste test with a Japanese audience. It was mostly lobster, but there were 10 or so different dishes that chefs made up over there. It went over extremely well. We had a pet lobster in the box, some 20 pounds—just a monster—that we held up to show the size and scope of the industry.

    You're absolutely right, Christian, that trade is critical to the growth of this industry. We know the potential is there. That's the first time I've heard someone talk about a trade triangle, and you're spot on with that. The more people you have vying for your product, the more valuable the product becomes.

    On a trip with the Prime Minister in China, we were at Hangzhou at an operation called Alibaba (China) Co., Ltd. Jack Ma said that, in honour of the Prime Minister's being there, he was going to offer Canadian lobster for sale on his site. He had 250,000 lobsters. They sold in nine minutes. You're absolutely right in defining the Asia-Pacific area. Vietnam has a real problem getting top-quality Canadian product.

    We're at a delicate stage with the TPP. We seem to be waiting for the Americans to ratify it before we jump into the arena. Do you think that's right, or should we show leadership and move forward rather than waiting for the next president? Neither Democrats nor Republicans seem to be in favour of this deal. Should we move forward on our own and show leadership?

    Christine, I'll start with you.

    From our perspective, yes, certainly we would like to see Canada show some leadership. We've talked about the importance of this agreement for our industry, the Canadian industry. I think one of the points that is important to note is that we do compete with supplies of like species from other producers that could be party to this deal, so we would really like to make sure that Canada has a strong place at the table and helps to see this agreement cross the finish line.

    Christian, do you have any points?

    Mr. Chair, the comments that were just made are very important.

    It is very important to continue finding new markets and new opportunities. The markets in Vietnam are extremely important for China. Products often pass through Vietnam. The markets in Australia also have an enormous economic impact on the world. We should not neglect these markets—I mean countries that are part of the TPP. Canada should play a leadership role to encourage its American neighbours to see the importance of this partnership.

    It is important to remember that there are two types of lobster products: live lobster and frozen lobster, which is becoming increasingly popular. China and other Asian countries may be very interested in these products. There is enormous potential there that we haven't exploited yet, or at least not much. This is only the tip of the iceberg and we really need to develop the potential of this sector.

    Sure, and there's also a tremendous opportunity to value-add. There's a lot of lobster that isn't first tier and, of course, there's a premium required for that, but there are a lot of bits and pieces that can be made use of as well. How long do you think it would take for industries in Atlantic Canada, which is what we're talking about today, to have the potential to add those value-added lines to the processing to make sure we're capturing every penny we can out of all the product that's moved forward?

     There is a phase-in period for the TPP, and of course for CETA as well, and it's very important, I think, that we send a strong signal to industry that they tool up to take advantage of that, that they find those markets and then tool up accordingly. I'd like your thoughts on that as well, please.

    It will have to be a short answer, please.

    I completely agree that there is enormous potential but there is still work to be done. Over the last 10 or 15 years, some very good things have been done to further highlight the value of lobster. We have 30 or 40 different products for frozen lobster alone. Over the last 15 years, innovation in the frozen lobster and lobster processing sectors has taken off in an incredible way.

    We now have a whole range of products, including lobster tails, lobster claws, and entire cooked or raw lobsters. There's something for everyone, from the famous chef who wants to create an absolutely fascinating product, to the family who wants a much more affordable lobster meal. We have managed to offer a whole range of different products. There is innovation, but I agree that we need to have even more innovation in Canada.

    Thank you, sir.

    We're going to move to the Liberals for five minutes.

    Ms. Ludwig, you have the floor. Go ahead.

    Good morning. Thanks to both of you for your presentations. As someone from the Atlantic region, I'm very encouraged by the conversation and by the presentations you've made this morning.

    One of the areas that is key, and that I've heard about from so many businesses, is the challenge of the non-harmonization of standards regarding fish processing.

     Christian, being from the herring industry, you would know that the herring industry is definitely at a deficit and at dangerous levels across North America. For fish procurement, how have your businesses been affected by the lack of harmonization of standards also set by the CFIA?

    I represent fishermen, mostly. It's really the processing industry that was affected by the harmonization of standards. We received very little information on this subject. There was a certain impact, which is just beginning to be felt. Like other groups, we are trying to find the best way of harmonizing the standards and seeing what it is possible to do. This mostly affects the processing industry.

    I know that Clearwater does not have a lot of herring, but it is possible that it is part of the industry. People from that company would probably be able to give you a better answer to that question.

     Thank you.

    Christine?

    Certainly, as a company that exports to 30 countries around the world, harmonization of requirements is an important consideration. Each market has its own nuances and intricacies and from time to time these issues can become non-tariff trade barriers, so harmonization and provisions within deals like the TPP are an important component for us. They ensure that at a government-to-government level these issues will be resolved.

    Our experience is that the Canadian Food Inspection Agency has a very good reputation internationally. They work well with their colleagues around the world, and it's important to us as an industry that we maintain that high level of rigour and the high reputation that the Canadian Food Inspection Agency has.

    Our reputation as the Clearwater brand depends in large part on the reputation of safe Canadian seafood, so that's quite important.

    Christian, you mentioned owner-operator policies. Working with your group of fishers, is there any strategy for success in planning in fishing, such as passing that business along to a family member, or protecting it within the Canadian market?

    If you will allow me, I would like to speak on this subject. It's a very good question, and I share the concerns that were just voiced.

    We have been working for five years now to try to find better solutions that suit fishers, those who wish to leave the industry, and above all those who wish to join it.

    There is always a significant turnover. It's strange because, four or five years ago, we were very concerned about fishers leaving, especially fishers' helpers. They went out west to rebuild their lives. Some of them stayed in that region for about 10 years.

    Currently, because of economic shocks, there is a return to the Atlantic. There is therefore more interest in renewal in the fisheries, but we can't depend on this good news, which is often sporadic. It depends on economic circumstances. We are working very hard to find solutions that allow families to keep the permits but also, first and foremost, to follow and be mindful of the owner-operator policy and the separation of the Atlantic fleet. This policy is extremely important and crucial to our fishers.

    Thank you.

    Ms. Ramsey for five minutes. Go ahead.

    Good morning. Thank you for your presentations, both of you. It's fascinating to someone from southwestern Ontario to talk about the east coast and fishing and the importance that has to our economy as well as to the economies of those communities you mentioned.

    I think part of the general concern is that people who are working and living in the coastal communities...we know they are working hard to ensure sustainability and fairness around the quotas when we're talking about Canadian waters versus international waters.

    Part of the TPP, chapter 20, actually says that we prevent overfishing and overcapacity. Overfishing, we know, is a huge problem globally, not just in Canada, and it has social, economic and environmental implications.

    According to Fisheries and Oceans Canada:

    Considering that the TPP will include eight of the top 20 fishing nations, what impact will the TPP have on efforts to combat overfishing globally, in our Canadian waters and international waters?

    Thank you, Tracey, for the question. It's a very important issue when it comes to fisheries.

    Clearwater, as a company, is dedicated to sustainability. We have made multi-million dollar investments in ensuring that we have appropriate science to underpin the management of our fish stocks.

    We work quite collaboratively with the Department of Fisheries and Oceans to help ensure that there are specific scientific research studies to look at what sustainable removal levels are in each of our fisheries.

    We've also made a significant investment in eco-labelling our products. There is an organization called the Marine Stewardship Council, which is the leading global eco-label. This puts fisheries through a rigorous process of assessment by an independent audit company.

     Those are all things we're doing now, but what would happen with the signing of the TPP to ensure that those same measures would be protected in our Canadian international waters? We know they butt up against one another. You can't really divide.... There's no division between those waters.

    Did you want to weigh in, Monsieur Brun?

    I admit that the international waters concern the inshore fishery a bit less. The simple answer to your question is that each sector must do its part to protect the sustainability of our resources.

    Concerning shellfish and lobster, which are the most important products in the Atlantic, we really succeeded. The evidence is there. There are historic fishing levels. The fishers themselves made a large number of these sacrifices by leaving lobster in the water in a variety of ways. I will not go through the list of measures that they took, but it's quite remarkable compared to other fisheries both at the international level and in other regions in Canada.

    We also respect the precautionary approaches, which we have been using for a number of years now. Shellfish, obviously, are recognized by the Marine Stewardship Council, which is a very important indicator of the sustainability of species.

    Thank you.

    Someone by the name of Wilf Swartz from the Nereus program at the University of B.C. has said:

     He says:

    Do you think that's correct? If that is the case, what other markets are you looking to get into where we have high tariffs currently around lobster specifically? We'll just focus on lobster.

    I believe there remains room for growth and development of the Japanese market. We talked about innovation a little bit earlier. The Canadian seafood industry is constantly innovating. That's a very important element of us being competitive globally.

    We talked a little bit about innovation in frozen lobster products. While our business in Japan is primarily in live lobster right now, we do have innovative technologies for frozen lobster that are allowing us to access new and different markets and to expand our business there.

    Certainly I think there is continued room for growth, and removal of tariffs is an important component, no matter what level they are at.

    What would be the next country —

    Ms. Ramsey, sorry, but we're way over five minutes.

    I'll just remind MPs to watch their time. Try to not put questions at the end of your five minutes, because it makes it awkward for the witnesses to switch over.

    We'll move over to Mr. Peterson for five minutes.

    Thank you, Mr. Chair. I'll stick to my strict time limit, I can assure you.

    Thank you to both of the presenters for being here today.

    Mr. Brun, I have a quick question for you, to start off.

    You mentioned that in any free trade agreement, something that's non-negotiable to you is to make sure that what I think you called the “unique” regulatory regime in Atlantic Canada is preserved. You referred to it as the owner-operator model.

     Can you elaborate on that and on what sort of business model that is?

    Absolutely.

    There is the owner-operator policy and the fleet separation policy. These seem to be very complicated terms, but in fact, the term “owner-operator” means that the fisher is the owner of his or her own business. Obviously, their family members can work in the business, but the fisher is the owner. Their name is on the boat, and they are the ones who operate it. It remains a property, and it's very close to our communities. There is also an advantage for these communities, because many fishers live there and spend their money there, whether they are spending their money on fishing or on other things. They live in areas that, otherwise, would have very little economic activity. It is therefore extremely important.

    The fleet separation means that only the harvesting sector, therefore the fishers themselves, can hold these permits. A company, a dentist in Toronto or someone from the outside who doesn't have a direct link to the fishery cannot hold fishing privileges. Fishing rights do not exist; they are fishing privileges. Don't forget that the fishing industry is not like other industries that exist in Canada. It is an industry where people are owners and where there are shared interests.

    Under the law, all Canadians have the right to receive the benefits of these fisheries. That is why it is a sharing of this common property. A fishery is not private property.

     Thank you for that. I appreciate that elaboration.

    Is there any component of the TPP agreement that you think would threaten that model, or do you see that model being able to thrive under the TPP if it becomes law?

    Based on what we've read and what Fisheries and Oceans Canada told us in answer to our questions, nothing would put those policies at risk. However, we would still like to inject a note of caution, since this issue is so crucial for Atlantic Canada.

    Our fears are mostly based on the fact that some of the countries that are part of this agreement, such as New Zealand, have systems that are very privatized and very different. Yet we are hearing that throughout the world those who have opted for greater corporatization, or more privatization, are now thinking of coming back to larger fleets and smaller vessels. That's actually much more profitable for citizens. Big vessels and all that goes with them is all very well and good, but you need a lot of capital and high revenues to make it work. So it's not always the most effective way to conduct the fishery.

    Madam Penney, I've spent some time in Halifax, and every time I flew back I stopped at the Clearwater booth at the airport and got the nice carry-on size lobster. It's perfect.

     I have just a couple of questions, now that I've made everybody hungry.

    You elaborated that you see the Japanese market as still having great potential, even though the tariffs may not be that high now. You also alluded in your opening statements that you're keen to try to tap into the Vietnamese market. Can you elaborate on how you see that happening, and is there more than just the tariffs in the way of tapping into that market now?

    I do believe there is significant growth in Asia-Pacific markets generally. The Vietnamese market is actually a fairly small component of our business at the moment, so any removal of barriers would certainly help us to expand our business there.

    We do have a sales force on the ground in Asia-Pacific. The growth in the middle class generally in Asia-Pacific is really driving demand for high-value seafood. Canadian seafood has a very good reputation. It's known to be high quality and food safe. This is driving demand in those marketplaces and allowing us to expand our business.

    Thank you.

    Can I make another observation?

    Go ahead, sir.

    Tariffs for frozen lobster and shellfish are much higher than for live lobster. Eliminating tariffs would be very important, especially for countries like Vietnam, where a high volume of shellfish passes through on the way to China. There are also the Japanese markets. In the east and the west, be it in emerging or developed countries, habits are changing, especially among young people, who usually want to be able to prepare their meals much more quickly. Live products, which take a relatively long time to prepare, and which are not easy to prepare, are often being replaced by frozen products. So there's a lot of potential for all countries that are part of the partnership.

    Thank you, sir.

    We're going to move over to the second round and start off with Madam Lapointe.

    Thank you, Mr. Chair.

    Hello and welcome to our witnesses. Thank you for being here today. It's very interesting to talk about seafood, especially seafood from Atlantic Canada. These are excellent products.

    Some countries subsidize their fishery. But I've noticed that we still have not addressed the issue of subsidized markets. Would the Trans-Pacific Partnership help to fight against subsidies and overfishing?

    Mr. Brun or Ms. Penney, I would like to know what you think about this.

    I have a brief comment to make.

    The fact that gigantic fleets have been heavily subsidized is a world-wide concern. I have witnessed that myself in certain European regions, where the fleets are made up of huge vessels that look more like war ships.

    Obviously, according to us, this has harmful consequences on the environment and the preservation of species across the planet. If we look at the situation as a whole, we can see that it is difficult to maintain and preserve many of our species sustainably.

    In my opinion, this is causing countries that have abused or are currently abusing the system to think things over. These countries are trying too hard for bigger is better. And that should also lead to reflection. Have these strategies really worked? Are we dealing with the same problems when we have a small number of fleets made up of gigantic vessels as we had 50 years ago or a generation ago, when there were many more smaller ships and where more people were able to benefit? In addition, these profits remained within countries and were shared among many more people.

    Scotland is in the process of considering returning to fleets that are made up of a larger number of smaller ships, in order to distribute the benefits more equally in the fisheries sector.

    Thank you.

    Ms. Penney, do you have something to add on the topic of subsidies?

    I agree with my colleague that subsidies to the fishing industry globally do distort the marketplace, and they do create, at times, issues with sustainable fishing. To the extent that we can reduce subsidies to fishing industries globally, that helps the Canadian seafood industry compete, and it helps protect the sustainability of global fish stocks.

    With respect to structures of industries, my colleague made a point about large boats versus small boats. From our perspective, there is a place for all of these types of vessels in the Canadian fishery. There are fisheries that are more appropriate for small boats and owner-operator policies; and then there are offshore fisheries, which are long distances from shore and they require large boats with processing technology on board, and can provide very good, stable, year-round jobs for our fishermen.

    From our perspective, we support policies in Canada that encourage a diversity in the structure of the fishing industry, respecting both those fisheries that are appropriate for small boats and those fisheries that require larger boats with more technologically advanced capabilities.

    Thank you very much for that.

    Thank you, Madam Lapointe.

    We're going to move to Mr. Van Kesteren for four minutes. Go ahead, sir.

    Thank you, Chair.

    Welcome, Ms. Penney. Welcome, Christian, as well. This is a fascinating discussion.

    My riding has the largest freshwater fishing port in the world, Wheatley, but I must confess that I have much to learn in the fishing industry. I very much look forward to the trip that we'll be taking down east.

    Mr. Brun, your passion, it's somewhat different from what we're used to. I suspect that your union is more involved with private ownership, people who have boats and they're part of this union. I share some of your concerns. I don't know enough about the industry to make a clear decision or take a stand on that, but I'm certainly willing to listen. I do see where you're coming from.

    This morning we're talking about the TPP. What we really want to hear is, like they say down south, “You're either fer it, or you're agin it.” I want to ask you, Mr. Brun, about your position on the TPP. Are you for it, or are you against it?

    It is very clear that we are in favour of the agreement. Perhaps I was not clear enough during my presentation, but we are in favour of all options for reducing tariffs on sea products. We have only one reservation, which I mentioned during my presentation. I think I have explained the reasons for that clearly enough. We are in favour of the agreement because it would increase the value of our products.

    Asia is one of the three major corners of this triangle I referred to earlier, as concerns exporting Canadian seafood products. This is an underdeveloped market, especially for frozen lobster and shellfish. Both of these products are of great economic value for Canada.

    This triangle is very important. We have tremendous potential in Asia and Europe, two underdeveloped markets. We are checking whether tariff reductions would be possible in these two areas.

    If we want to put this strategy in place, it is very important that the value of Canadian seafood products increase.

     Thank you, sir. That was the main thrust of my question. You made that very clear, and I appreciate that. I think all of us very much look forward to coming down and learning more about the seafood industry. I agree with you that it's very, very important to your economy and to the economy as a whole in Canada, but it is also very important that we get this right in terms of sustainability. I'm very pleased to hear that you're so active in that process as well.

    Ms. Penney, can you maybe tell us about where you see the industry going? Still being mindful of those things we just discussed in terms of the sustainability, where do you see the potential for growth? In terms of numbers, let's talk about jobs. Have you thought about that? Is that something you can maybe share with this committee?

    I don't have specific estimates in terms of growth of these markets under the TPP arrangement, but without a doubt there are fundamental elements that help build value in Canadian seafood. We do have a limited supply of wild Canadian seafood because we manage it for sustainability. We do quite a good job of that in Canada.

    I mentioned earlier the Marine Stewardship Council, or MSC, certification. Canada is one of the countries with the most fisheries certified to that standard, which is viewed to be the highest level of environmental sustainability in terms of standards globally. We've done quite a good job of protecting sustainability in our resources. The industry is committed to that. That's the baseline.

    Given that we have a limited supply, because we are managing it to sustainable levels, the larger we can grow the demand for our Canadian seafood the more it allows us to build the value. That brings more dollars back into the Canadian economy. It allows us to reinvest back into our businesses, into key elements like innovation, which is so critical for us to be successful in international markets. It allows us to innovate in terms of our products. It allows us to invest back into our vessels and our infrastructure, and into our employees and our communities. We see TPP as a key component of that.

    Thank you, Ms. Penney, and thank you for coming and representing Clearwater—

    Mr. Chair, I would like to add something concerning jobs. I only need five seconds.

    Yes, go ahead, Mr. Brun, but very quickly, please.

    The fishery sector is the largest private employer in the Atlantic provinces, with 25,000 direct and indirect jobs.

    Thank you very much, sir. Thank you for reminding us of that.

    That ends the panel.

    Mr. Brun, thank you for coming on the phone here with us. We wish you and all the people you represent a successful and safe fishing season this year. Take care, and thank you for coming.

    Thank you also to Ms. Penney.

    We will go in camera now. We have a motion to deal with for just five minutes.

    Thank you again, folks.

    [Proceedings continue in camera]

    [Public proceedings resume]

    We are back. We have Christina Burridge of the BC Seafood Alliance and we have Derek Butler from the Association of Seafood Producers from St. John's, Newfoundland. Imagine that, we have one from the east and one from the west.

    Of course, we're doing the TPP and you are going to discuss the implications of the TPP. If you can keep it within five minutes, we'd appreciate it.

    You're going to hear a little ruckus in about 20 minutes because the House of Commons has a bunch of votes going on. The way we're going to roll here, we're going to give you each five minutes, and then each party will have a little dialogue with you. Then we'll have to wrap it up, probably around 10:15. Thank you for coming on board.

    Do you want to start off first, Christina, for five minutes? Go ahead.

    Good morning, everyone. My name's Christina Burridge. I am the executive director of the BC Seafood Alliance. The alliance is an umbrella organization whose 17 members represent about 90% of wild-harvested seafood from Canada's west coast, and that's worth about $850 million annually.

    We work closely with the Seafood Producers Association of B.C. They represent the major processors of wild seafood, and the two associations work very closely together, and our views almost always align, and they certainly do on trade policy.

    There are three things we look to from government: secure access to the resource, a modern and stable regulatory regime, and market access. Those are the three things that we cannot do ourselves.

    Almost all the seafood that Canada imports comes in duty-free, and our goal is that our trading partners ultimately reciprocate that access. B.C. exports about $1 billion annually of wild and farmed seafood; roughly two-thirds of that goes to the U.S.A., and one-third to Asia. Access to the U.S. is already duty-free under NAFTA. Almost all the exports to Asia, some $337 million, are wild seafood such as prawns, crab, sablefish, salmon, geoduck, sea urchins, and sea cucumbers. That breaks down to about $179 million to China; $108 million to Japan; $31 million to Hong Kong; and almost $19 million to Vietnam.

    Japan and Vietnam are the immediate prize for us in the trans-Pacific trade partnership, but we share the hope of many that China might eventually join. Tariffs on seafood products in Japan range from 2.5% to 10.5%, while almost all imports to Vietnam are subject to 20% tariffs. Our closest competitor is the state of Alaska, which produces the same species in the same product forms, and sells them to the same markets, but which has the advantage of out-producing us in terms of volume, by up to 10 times.

    We saw first-hand the gains made by Alaskan seafood exporters when the KORUS FTA with Korea came into force in 2012, three years before the Canada–Korea agreement came into force. They gained a market advantage through lower tariffs that has been hard for us to match.

    It would be disastrous for us if the U.S. ratified TPP but Canada did not, immediately making our products uncompetitive in Japan and Vietnam, making it impossible that we could develop new TPP markets such as Malaysia, Brunei, or Peru.

    In addition to the tariff advantages of TPP, we are strong believers that the codification of rules assists Canadian exporters dealing with non-tariff barriers such as phyto and phytosanitary issues. Consistent rules consistently applied benefit all exporters.

    We advocate for TPP, because access to affluent and increasingly affluent consumers on the Pacific Rim is the best way to increase value from a limited resource. Access means, first, dollars to the Canadian economy, and jobs and income for families and communities up and down the coast. It's the lifeblood of our sector.

    Thank you for the opportunity to make that short statement.

     Thank you, and thank you for getting up so early and joining us, and for being on time.

    We're going to move over to Newfoundland.

    Mr. Butler, you have five minutes or less. Go ahead.

    Thank you. Good morning, and thank you for the invitation to address you this morning.

    Very quickly, ASP is the industry trade association representing seafood processors in the province. Total production is around $1 billion—it varies year in, year out—and my members produce the vast majority of that volume.

    As you well know, the seafood industry is a trading industry. I've appeared before three parliamentary committees to date, and two of those three, 66%, have been before the trade committee, and not, as one might expect sometimes, before fisheries and oceans. And while there's obviously merit in that when we talk about licensing and allocations, the trade committee is really a very appropriate committee for this industry, because we are a trading business.

    A few years ago, just to illustrate, when I was in Boston, I was impressed with the P.E.I. ministerial delegation at the time, which included a number of ministers. I shook hands with one, and I said, “You must be Minister of Fisheries.” He said, “No, I'm the Minister of Business, and I'm the host of the reception, because this is a business. We're not here about licensing or allocations. We're here to sell and make trade and do business together.” I thought that made a lot of sense.

    This year in Boston we were represented by both our Minister of Fisheries and our premier, and we really appreciated that.

    As I say, we're a trading industry, and if Canadians doubled, tripled, or even quadrupled their seafood consumption—which would be nice—we could never eat all of the seafood we produce. We have to sell. And while we're pleased to sell in Canada, in our respective home provinces or across the country, the reality is 80% to 90% of Newfoundland and Labrador's seafood, I think 76% for Canada, will be sold in international markets. Thus it ever was, and ever shall be. That was the reason we were settled in the first place—when cod, in our case, was a proxy for the European stock market historically. It's quite amazing. We have hundreds of years of experience in trade, and that will always be the case.

    So if we have to sell—that brings me to support for TPP—quite simply we want to ensure we have level playing fields, that the sales and the distributions of our products are in channels that don't apply prejudicial or punitive tariffs or other non-trade barriers, like those that Christina just alluded to.

    We sell a great product. That much we know. It's the last wild protein, as I often tell people. Apart from sport hunting, this is the last wild protein in the world, and that underscores the importance of getting it right in terms of fisheries management and sustainability, and we appreciate the government's support in that respect from DFO.

    We also know there's great demand for seafood, wild and aquacultured. My members are mostly in the wild business, and there's a lot implied in that statement to be fair, but there's great demand we know, and we know we have a great product.

    More precisely, when it comes to TPP and why we think this is a good deal for seafood and our industry, and why we, as the industry trade association, support it, let me give you a few quick reasons.

    The first is because we export most of our seafood, as I said earlier. We will always do that, and we want to conduct that business on good terms.

    Secondly, the countries in TPP represent a significant and growing proportion of the world's key markets for seafood, both established markets and new opportunities, growing opportunities.

    Thirdly, the tariffs on seafood in the countries represented in the TPP are quite high. They can be as high as 34%. Those are high costs. If you think about any small business, or large or medium-sized business, and what margins might be required to make that business sustainable, and then think about those kinds of tariff rates that you pay, which prevent consumers from getting access to quality fish, they thwart market access and they limit where we can sell.

    That brings me to the fourth point. Reducing tariffs is not really just about the straight math calculation of what happens in those given markets, for example here in the TPP countries. When tariffs change in a given market, or several markets, as represented by this deal, the trade flows that can be impacted in other non-TPP countries might give us benefits as well.

    I've made this point before with respect to the CETA deal. Just to illustrate, we sell on average 70% of our snow crab to the U.S. and 30% to Japan. In respect of CETA, as the 8% tariff on snow crab is eliminated in that market, and as that market opens up for trade in snow crab, the question is not simply how much more snow crab we might sell in Europe, but also—get this—how will that changing dynamic with sales opportunities in Europe change our returns in the U.S. or Japan?

    Academically, I think we will sell snow crab in Europe; academically we might not sell another pound of snow crab there. But the sales returns from the other markets could still increase, because we have that potential.

     That's how these things work. I think that applies to TPP. It's why we support trade deals that eliminate or reduce tariffs, and it's why we supported the CETA deal, as well.

    In closing, we support CETA, we support the elimination of tariffs on seafood, and we support levelling the playing field for the sale of our products, because we're a trading industry.

    I want to thank you again for the opportunity to address you today, and I am pleased to respond to any questions you might have.

    Thank you, sir. It's amazing the amount of product we produce in Canada and the amount of export.

    We're going to have a couple of quick questions from the MPs. We're going to go with Mr. Hoback, for four minutes.

    Thank you, Chair. I'm going to split my time with Mr. Van Kesteren, so I'll do one question and he'll do one.

    Sir, at the end there, you said CETA. I assume you also meant TPP. Correct?

    Yes. I said we support CETA and TPP. We support both for the same reasons.

    Your logic on how expanding markets can improve your returns makes a lot of sense. We've seen that in the beef sector where we had the exact same thing happen. Five years ago we couldn't give away a cow, and now cows are two grand, even more if they're bred, and you're 100% right on that.

    I'm worried about non-tariff trade barriers. What will this deal do to help eliminate those non-tariff trade barriers to make sure if there are any disputes, you have a mechanism that will quickly dissolve those disputes?

    I think Christina has spoken to one. I don't know if Christina, whom I know well from the industry, might be prepared to address the phytosanitary issue as an example of a non-trade barrier.

    We certainly find that as tariffs come off, non-tariff barriers have a habit of proliferating, and one of the weapons that countries have is phytosanitary requirements. We're experiencing that with China at the moment. At the same time, and CETA is a good example, we generally find with trade agreements there is provision for being able to sort out issues in a common forum that establishes clear rules, and those are almost as important as the tariff barriers.

    Of course the multi-level aspect gives you the discipline of other partners to make sure everybody acts accordingly.

    I'll turn my time over to Mr. Van Kesteren.

    Thank you, Chair, and thank you all for being with us.

    It's a most interesting discussion we've had this morning. I repeat what I said to the last panel, I think we all are looking very much forward to visiting the east coast. We have been to the west, and unfortunately we didn't have the opportunity to visit the fishing facilities, but I think that'll be a major thrust of the upcoming visit.

    I spoke in the last panel about jobs. I think I want to go to Newfoundland in this particular instance because we know the devastation that was visited on the Rock with the collapse of the cod stock. I've been there a couple times. I'm curious, do you see that being resurrected, not specifically the cod, but the fishing industry? Do we see potential for growth there and opportunity for your young men and women who have left in the past? Is there opportunity being presented on the island, and specifically with treaties like the TPP?

    That's a great question, and I'd love to sit down over dinner, and a fish meal at that, to discuss it. The cod layoff was the largest industrial layoff—

    Oh, stop it, stop it.

    —in Canadian history, with huge ramifications all throughout Atlantic Canada. We're going through a period now when we see a changing ecosystem, and we have increasing abundance in the cod biomass, in northern cod. I think we'll be back to a commercial fishery in due course, in maybe three, five, or seven years. With that, we're going to see a declining of value in shellfish, as shellfish declines and groundfish comes back. The unit price of shellfish is much better, in terms of returns to the industry, to harvesters, and to producers than the unit value at this point of groundfish. We face challenges. The opportunity that TPP and CETA provide, for example, in these kinds of trade deals is to bring home more value in the industry right now. That will help us, I think, retool for the changes that will take place in terms of the changing ecosystem. We're going through a transition phase. It's going to be difficult for a period.

    Thank you, Mr. Butler. I'm out of time, but I do want to take you up on that dinner sometime. I'd love to have that conversation. Thank you.

    We're looking forward to coming out in the fall.

    Mr. Dhaliwal.

    Thank you, Mr. Chair, and thank you to Ms. Burridge and Mr. Butler.

    In B.C., the leading agrifood export is seafood. How do you see a long-term job market expanding with the access to these nations through the TPP?

     I'm not sure we'll see an increase in jobs. I think what we will see is an increase in better jobs.

    Our goal as an industry is to operate on a year-round basis, not a seasonal basis. That's true for both fishermen and workers in processing plants. We certainly aim to operate between 40 and 50 weeks a year. In terms of new market opportunities, my colleague Derek spoke about the knock-on effects of getting new markets and their effect on the dynamics of existing trade. It will only create more secure, more long-term employment, even if the numbers don't particularly increase.

    Would this expansion indirectly help other industries besides the fishing industry in British Columbia?

    Certainly. There's a huge number of support industries, many of them in communities, often quite small communities, up and down the coast in terms of ice, in terms of transportation, and in terms of packaging. As well, obviously there's an impact for the port of Vancouver in particular, and for airlines operating out of YVR.

    You mentioned that if the U.S. ratifies, then we have to ratify. But what we're hearing across the border is that both Democrats and Republicans are not in favour of ratifying the TPP.

    In your view, we should not to be in a rush to ratify this TPP, and it would be better to consult more industries, more people, and see what the election results are on the south side of the border?

    I see Canada prepared to sign. It may be that a number of countries will choose to wait until after the U.S. election or to wait and see what happens with the U.S. If it so happens that TPP falls apart, I would urge Canada to immediately engage in bilateral negotiations with some of those countries in order to reduce tariffs and clarify rules of trade. I think there's a huge opportunity for us. We cannot be the country that gets left behind.

    In terms of other bilateral countries, we already have Japan and Vietnam as our markets. Who else do you see as a market that we should have a bilateral agreement with?

    Even Japan and Vietnam still have high tariffs on seafood products. I'd like to see Canada engage directly with a view to eliminating those tariffs. In Japan there's really very little justification for those kind of tariffs, and Vietnam has absolutely taken off as an export market. Its people are increasingly affluent. If we can make our products 20% cheaper, then that's a whole new market for us.

     Thank you.

    Ms. Ramsey, go ahead.

    Thank you so much for your presentations. It is great to hear representation from both coasts, that's for sure.

    I think one of my colleagues asked a question to Ms. Burridge around jobs and what would be created potentially in B.C. My question now goes to Mr. Butler in the same vein.

    This committee has heard reports that we'll see 58,000 Canadian jobs lost in the TPP, and 0% growth. I hear that your industries are ones that would benefit from it. I think we hear that clearly this morning, that you are one of those sectors that would benefit. The concern then becomes how we would offset 58,000 jobs lost in other sectors.

    Mr. Butler, can you tell us if jobs would be created, and if you've done an analysis around the amount of job growth you foresee for your industry?

    Oh, that's a really good question as well. You'll have to come down for dinner too.

    Voices: Oh, oh!

    I would love to.

    I'd say the same thing as Christina has said. We've seen it take place in other countries. Iceland is one example. You might not see a direct increase in the number of jobs but in better jobs, better-paying jobs, longer-term jobs, and increases in the season.

    In our sector, one of our challenges is that as we go down in shellfish, which is capital-intensive, we'll go up in groundfish, which is labour-intensive. Newfoundland has gone from having the youngest population in Canada and one of the highest per capita growth rates to the oldest population in Canada and I think the lowest birth rate of any jurisdiction, Canadian or American, by state or province. I checked that a number of years ago.

    So we have challenges with respect to labour, as we go back to groundfish, because it takes so many people. It's quite a different industry from shrimp and snow crab, which are our principal industries. We'll see increases in employment, definitely.

     My second question is around the sanitary and the phytosanitary challenges. We've heard about this from other industries as well. Really, as I think you said well, Ms. Burridge, it's not often the tariffs that are the barriers—it's the non-tariff barriers.

     You mentioned a whole bunch of species that you fish, such as crab, geoduck, and salmon. Can you speak specifically to the sanitary and phytosanitary challenges and the harmonization issues you have with the TPP countries we're looking at?

    We have had issues with Japan recently, for instance, over lobster, and I believe with oysters from British Columbia. Those are the kinds of things that tend to take a long time to sort out, and then you end up with different rules from country to country.

     I know that it is not directly one of the TPP countries but, for instance, we are an having issue with prawns to China and the use of certain kinds of additives. What is permitted in China, for instance, is not permitted in Japan. Those are the two main markets for that product, so we would hope that over time we would be able to have a consistent approach to those kinds of issues.

    Can you tell us how you envision it happening in the TPP that those issues will be resolved?

    I think it's because you have a forum for resolving those kinds of issues. It is possible to build a common approach based on, say, what's permitted under Codex. I think we can move to a point where the participating countries—and we would expect to see this happen over time—would take that kind of common approach.

    Thank you.

    That wraps up our morning here. I thank our witnesses from B.C. to Newfoundland. It's an important industry you have. I thank you for coming with your briefs and for the good dialogue we've had.

     We welcome anything you want to send us. We're going to be working on this report for a few more months yet, and we'll send you a copy when we're done. Thank you for joining us this morning.

     That ends the meeting. We're adjourned.