FISH Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 21, 1997

• 0930

[English]

The Chairman (Mr. George S. Baker (Gander—Grand Falls, Lib.)): Order. Before I introduce the Auditor General, I'd like to introduce the members of the committee to the viewing audience.

From the official opposition, we have Mr. John Duncan from the federal riding of Vancouver Island North, British Columbia. Next to Mr. Duncan is, of course, Preston Manning, who is the leader of the official opposition, from the riding of Calgary Southwest. We have Mr. Gary Lunn, who is from the riding of Saanich—Gulf Islands in British Columbia, who is also representing the Reform Party.

• 0935

From the Bloc, we have Mr. Bernier, from Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, which is in Quebec.

Then we have a representative of the Progressive Conservative Party, Bill Matthews, from Burin—St. George's, which is in Newfoundland.

Peter Stoffer, who is with the NDP, is from Sackville—Eastern Shore, which is in Nova Scotia.

As for members of the government, we have Wayne Easter, who is the parliamentary secretary to the Minister of Fisheries and Oceans, who is from Malpeque, Prince Edward Island; Charles Hubbard, who is the MP for Miramichi, New Brunswick; Nancy Karetak-Lindell, who is from the riding of Nunavut, Northwest Territories; Carmen Provenzano, who is from Sault Ste. Marie, Ontario; and Mr. John O'Reilly, who is filling in on the committee, who is from the riding of Victoria—Haliburton, Ontario.

Also at the table is our clerk, Bill Farrell, and Alan Nixon and Claude Emery, both from the Library of Parliament's research bureau.

A late arrival is Mr. Lawrence O'Brien, who is from the government side. He is from the riding of Labrador in Newfoundland and Labrador.

We want to welcome the Auditor General and ask him to introduce the people he has here with him today. Then he can make an opening statement, after which our committee members will be questioning his remarks.

Mr. L. Denis Desautels (Auditor General of Canada): Thank you very much, Mr. Chairman.

I am accompanied today by Mr. Doug Timmins and Mr. Don Young. Both Mr. Timmins and Mr. Young have had a fairly direct hand in the conduct of this work, and they will be able to help me in answering the committee's questions.

I wish to thank you, Mr. Chairman, for the opportunity to present the results of our audits on the Atlantic Groundfish Strategy and the Atlantic groundfish fishery itself.

The very difficult question, Mr. Chairman, of dealing with those adversely affected by the collapse of the Atlantic groundfish industry concerns me greatly, as I know it concerns each one of you. It also concerns me that despite an investment of more than $3 billion in income support adjustment, rationalization programs, and changes to the management of the fishery, the critical problems of the Atlantic groundfish industry remain.

As TAGS is running out, the strategy's objectives will not be achieved. A review of TAGS has been launched, and the minister has indicated his intention to reintroduce amendments to the Fisheries Act. These chapters provide information that I hope you will find very useful as this committee becomes involved in these matters.

Our three chapters point to a continuing problem of an overcapacity to catch fish, limited alternatives for the people who continue to depend on the fishery, and the need to improve fisheries management to eliminate unsustainable fishing practices. Dealing with all of these concerns is doubtless a very difficult task, but they must all be dealt with so as to ensure a solution. TAGS is not the first attempt to resolve the problem; previous programs, such as NCARP, were equally unsuccessful at dealing with these concerns.

One part of the solution requires the government to address the issue of overcapacity. The capacity of the groundfish harvesting industry is not easily defined. The government has focused on the number of licence holders and the number of people in the industry.

However, perhaps a more significant consideration is the increasing catching power of vessels and gear currently available to fishers. It has been widely recognized that even prior to the groundfish crisis, the capacity of the Atlantic groundfishery was at least double what was needed to catch the fish that were available.

• 0940

Many people were attracted to the fishery by the easy access granted under past licensing policies and access to government support programs, such as unemployment insurance. Naturally, these fishers want to maximize the return on their investment in vessels and fishing gear in a competitive fishing environment, and the resulting overcapacity contributed to overfishing. However, attempts to address the capacity problem in the Atlantic groundfishery have been largely unsuccessful.

One of the primary objectives of TAGS was to reduce harvesting and processing capacity. In conjunction with other initiatives, removal of 50% of groundfish licences was targeted. These initiatives would eventually remove approximately 23% of the licences that existed when TAGS was approved.

[Translation]

Here are some of our key observations about the TAGS program.

First of all, the core group of fishers identified to continue in the fishery was significantly larger than the initial target.

Second, a portion of the remaining 10,435 core licence holders historically caught most of the fish.

Third, the TAGS capacity reduction initiatives were able to retire only 545 groundfish licences.

We recommended that the Department of Fisheries and Oceans develop and propose to the government a strategy for further reducing overcapacity in the groundfish industry.

However, we pointed out that this solution also required that the government address overdependence on the Atlantic groundfish industry.

The collapse of the groundfish industry affected not only fishers but also an even larger number of people who worked in processing plants. And even if stocks were to return to the levels seen in the 1980s, the industry could not provide adequate incomes for the number of people who depend on it.

Even when groundfish were plentiful, the industry could not support all of those who relied on it. To give the fishery resource base a chance to be managed on a sustainable basis, we recommended that the government address the difficult social and economic circumstances of coastal communities.

We also pointed out in these chapters that the fisheries management framework requires clarification. There is no clearly stated national policy for sustainable fisheries.

[English]

The department has developed principles to guide industry restructuring and fisheries management renewal that place a priority on conservation. However, it's not clear how these principles relate to other considerations, such as providing access to income support, assuring viability of coastal communities and maintaining populations in remote parts of Canada. Performance or program expectations are not defined precisely enough for Parliament to know what results have been achieved. The department has not yet developed measurable indicators related to its guiding principles. Performance indicators need to be developed, and planning and performance reporting needs to be better integrated, and our recommendations address these issues.

We also examined the department's efforts to rationalize the industry and renew its fisheries management practices, essential elements to ensure that groundfish stocks are conserved as fishing resumes. In this regard, one of the department's strategies, as it copes with budget restrictions and moves to the fishery of the future, is to place more responsibility on the industry to manage itself. We're concerned that the department does not have sufficient assurance that the industry can, and will, accept increased responsibility for managing the groundfishery.

We recommended that the department ensure that accountability for the conservation and protection of groundfish stocks is an integral part of any arrangements for industry to take on increased responsibilities for fisheries management. We also found that the department's own fisheries management practices need further improvement to ensure the sustainability of the resource base.

• 0945

Problems still exist with the commercial catch data needed for groundfish stock assessments. Also, more must be known about the groundfish stocks and the marine environment so that assumptions used will reasonably reflect the current status of the stocks. Guidance is needed on the precautionary approach that can be applied to the Atlantic groundfish stocks.

The department has not yet formalized its integrated management planning process for groundfish. This process would ensure that the various departmental units, such as science, enforcement, and fisheries managers, act in a co-ordinated way.

Catch-monitoring information is necessary to manage fishing activity and to use as input for stock assessments. While the dockside monitoring program is an improvement over previous methods of collecting data, we found significant weaknesses in its control environment. In addition, the department has not integrated information from at-sea observers and other information into its management practices.

Enforcement activities have historically focused on ensuring that fishers comply with fisheries regulations. As part of the strategy to transfer responsibility to industry, the department plans to shift its emphasis from the traditional enforcement of compliance to the audit of monitoring programs. We found that little progress has been made in this direction, however. In addition, we found that the information needs of enforcement officers are not being met, and enforcement efforts have been diverted away from groundfish to other fisheries.

[Translation]

I would now like to look at Chapter 16, dealing with Human Resources Development Canada and The Atlantic Groundfish Strategy, or TAGS.

We found significant problems with this $1.9 billion program. Lessons learned from The Atlantic Groundfish Strategy will be relevant as federal and provincial governments consider the needs of those who will not be able to work in the groundfish industry when the Strategy ends, which is anticipated in 1988.

The timetable to develop an initiative as important as TAGS was unrealistic. Predictions of the number of clients were very low, due to inadequate analysis. The oversubscription in TAGS led to a strain on resources. As a result, the government moved resources from active measures—such as industry rationalization and labour adjustment—to the passive income support measure.

There were errors in the application of eligibility criteria that required many corrections. Also, varying interpretations of these criteria resulted in differing treatment of participants.

We found that the roles and responsibilities of the four organizations involved in implementing the Strategy were neither clearly defined nor agreed on. One outcome of this situation was that fishers and plant workers delayed making decisions on their course of action as the federal government moved slowly to identify the core fishery.

Inadequate information was provided to Parliament on progress toward achieving the TAGS objective of restructuring the fishing industry.

Results of the labour adjustment component of TAGS will not be known because program evaluation efforts were abandoned. For any future program, particularly one as important financially, economically and socially as this one, we recommend formal measurement to ensure accountability.

[English]

To conclude, Mr. Chairman, we appreciate this opportunity to present the results of our audit reports on the Atlantic groundfish fishery and the Atlantic groundfish strategy. My colleagues and I are aware of the real human problems caused by the collapse of the groundfish industry. We know the collapse has caused a great deal of hardship for coastal communities, particularly in Newfoundland, where there is significant dependence on this fishery.

Some media reports say that we concluded that income support was not a good thing to do. That is certainly not the case. We concluded that the restructuring and adjustment objectives of the tax program were not met. As problems were encountered in trying to implement the strategy, the majority of funding went to income support.

• 0950

Mr. Chairman, I believe that this committee can play a role by taking note of lessons to be learned from TAGS and from previous programs as it reviews the government's plans to address the problems in the fishery. The root problems in the fishery still need to be addressed, and we hope that the government will place a priority on developing a national fisheries policy.

We also feel that a precautionary approach is required to ensure that groundfish will be available in the future.

Finally, we think that a concerted effort and commitment are required from all players involved in order to address overcapacity and dependence on the industry.

I thank you, Mr. Chairman, and my colleagues, and I will be happy to answer the questions of the committee members.

The Chairman: Thank you, Mr. Auditor General.

For our first question we go to the official opposition, and we'd like to welcome the leader of the official opposition, Mr. Preston Manning, to the committee. There's an open invitation to all the other leaders as well. We don't charge admission at the door.

Mr. Manning.

Mr. Preston Manning (Calgary Southwest, Ref.): Thank you, Mr. Chairman. I want to thank you for the opportunity to visit with you this morning.

I'm here, first and foremost, to indicate our concern for Atlantic fishermen and for fishermen in Canada in general. We feel that mismanagement of the fishery has resulted in serious damage to the biological base of the fishery on the east coast, and we're concerned that we're going down the same road on the west coast.

We of course are particularly interested in the TAGS program, because it was supposed to help restructure the industry and retrain the workers. Instead, we are aware, from our own sources and now from the Auditor General, that none of those objectives were really achieved. In fact, I think 76% of the funding of the program ended up going into income maintenance, and therefore contributing more to despair and disillusionment rather than hope for the people for whom this program was designed.

I want to thank the Auditor General for his usual good work. We study his reports quite seriously. It sometimes takes us a while to get through all the material, but we always find the effort worth while.

I really have two questions I'd like to put.

In your chapter 14.5—and I notice that you mentioned it again in your oral presentation—you make a statement that I find astounding. It's the simple statement that there is no clearly stated national policy for sustainable fisheries. I find that astounding, because we are repeatedly assured in the Parliament that the government is committed to sustainable development, in particular sustainable development with respect to the fishery. Yet you say that there is no national policy for sustainable development.

I wonder if you would elaborate on that conclusion, because many of us, particularly those who don't have a background in the fishery, frankly find that astounding. We thought there was such a thing but it wasn't working. You're saying that there really isn't such a policy. Perhaps also suggest what would be the key elements of such a policy if Parliament were to insist that it be developed.

Mr. Denis Desautels: I'll ask Mr. Timmins to answer the question.

Mr. Doug Timmins (Assistant Auditor General): I think there is a fair degree of elaboration on what we found in relation to the national fisheries policy in paragraphs 14.69 to 14.76 of our report.

The history of the national fisheries policy was first identified as part of the green plan initiative, and we believe that has evolved, in some cases, through time. Legislation in the 1980s talked about a number of things, but not some of the key elements of the national fisheries policy.

To answer the second part of your question would be to say that the key elements are first of all the involvement of provinces and industry in developing that policy, as well as to have conservation as a paramount part of that. Some other aspects may be....

The precautionary approach is something that is being developed in the international forums, and the federal government is working actively in trying to further that development. We elaborate on the precautionary approach a bit in our chapter, as well as to some of the key elements. I think those would be some of the fundamentals, but the partnerships of all the players that are involved, the provinces, the territories, industry—all the players—I think are the important part of the national policy.

• 0955

Mr. Preston Manning: On TAGS itself and your chapter 16 observations and recommendations, this is a $1.9 billion program, yet you say there was no definition of responsibility, there was no strategic plan, there was no coordinating mechanism, there was no evaluation mechanism, there was inadequate front-end analysis, there was an unrealistic timetable, and inadequate information was presented to Parliament on the whole subject throughout. Frankly, we find it astounding that a $1.9 billion program could even get off the ground with those types of deficiencies. How could that sort of thing happen with a $1.9 billion program?

When we asked about this program at the front end in Parliament we were told there was a definition of responsibility, there was a strategic plan, there was a timetable, there was an evaluation mechanism, and adequate information would be presented to Parliament. So how could that have happened with a $1.9 billion program? More importantly, what has to be done to prevent that from ever happening again?

Mr. Doug Timmins: I believe part of the problem may be that the individual players had plans and were approaching it, but what we refer to is no overall strategic plan. We're talking about a number of departments getting together, being coordinated in their initiatives.

Part of the problem was the urgency to get the program under way. We point to a number of design concerns we have. Some of the design was not necessarily based on information that was available in terms of who the participants would be and knowing the number of participants in the program and the demand and how that would all work. That's the sort of thing that needs to be done up front. At a very high level, clearly there were submissions to cabinet and discussions of the overall intention and the design, but I think the factor was, first, the urgency to get on with the design of the program and get it implemented, and then the question of what information was available to deliver on that basis.

Mr. Preston Manning: And the preventive measures?

Mr. Doug Timmins: I guess I would suggest that a program of this nature and magnitude requires some time to develop. As we look forward to what may follow on from this program, I guess we do have some time...maybe we take the time and make sure there is a coordinated and detailed plan at a strategic level.

Some of the difficulties we allude to or point out in the chapter were things such as identifying the number of core fishers in the fishery. Those kinds of delays contributed to the pressure for more income support rather than meeting the original objectives of a lesser amount of money going to income support and more going to adjustment and rationalization.

The Chairman: Thank you, Mr. Manning.

Mr. Lawrence O'Brien, Labrador, whose riding was totally devastated by the collapse of the northern cod fishery.

Mr. Lawrence D. O'Brien (Labrador, Lib.): Thank you, Mr. Chairman.

I have one grave problem there: what can you do in five minutes? I would much prefer to have more like five hours.

Certainly when I look at the Auditor General's report and consider some of the things you are saying relative to the facts of life in the fishery, particularly in my riding in Atlantic Canada, obviously you are paying very great attention to the theoretical side of life and very little to the practical side of life.

• 1000

In hindsight, it's quite easy to develop a plan to look at a fishery or a TAGS program, but I believe, sir, if you and your team came along the coasts of Labrador and saw firsthand the needs and the concerns and the issues, if you saw the total devastation of a place like Black Tickle, which was the capital of the cod fishery not only for Labrador, but for the Atlantic coast.... Take what you can out of it when you can and put as little as you can back when you're no longer important to them.

If you take that in the context of the emerging shrimp fishery that's up there right now, the government of this country, which I am a part of—the previous minister was Mr. Mifflin—announced massive increases in shrimp. You didn't allude to that in your report. He called for major changes and major quota upgrading because of the tremendous amount of shrimp along the northeast coast of Newfoundland and the coast of Labrador. That's basically because the cod are gone. Cod eat shrimp. It's as simple as that.

There's an emerging fishery there, both inshore and offshore, that you, in your report, when you're talking about overcapacity and limited alternatives and so on, could probably have addressed and have given some real depth, meaning, and understanding about how we can go on with our lives after TAGS.

But the problem I find in dealing with that is that the burdens of the bureaucracy of the Department of Fisheries and Oceans hold me and my people back. When you're talking about boat sizes of 34 feet 11 inches and you have to go a hundred miles at sea, that's the ticket to get rid of the fishermen, sir, because we're all going to die at sea in the way that John Cabot disappeared a year after he discovered Newfoundland. We need to get into bigger boats.

The government has to start addressing these kinds of issues, whether it's fisheries and oceans or the government at large doing it. We need to get away from the 34 foot 11 inch size to the 55, 60, or 65-footers, and then the 19 souls in Black Tickle who can qualify for shrimping licences, multiplied by five people on a boat, means 100 people working out of a community of 400, so we're back to work. This is the kind of stuff the TAGS has to tie into.

I have one other point, if I may. I find it ludicrous that the Auditor General's report did not in any way address the very serious problem of the harp seal fishery along the coast of Labrador, the northeast coast of Newfoundland, and in the Gulf of St. Lawrence. It's a massive problem and you did not lend your efforts to it. In a way, this impacts a great deal on the return of the codfish stocks along the coasts of Labrador and northeast Newfoundland.

Why are the codfish returning off Nova Scotia and the south coast of Newfoundland to some degree, and to some degree in the Gulf of St. Lawrence, but not in George Baker's riding or Lawrence O'Brien's riding? To me, it's very simple. It's called “seals eat fish”, and there are multi-millions of seals.

I have an example, and this is what you would have found if you went into the ridings. I have examples on videotape. Videotapes have been shot by a fisherman friend of mine on the Grand Banks that show him hauling back his nets with the seals coming up and under the codfish. That's the soft part of the fish and that's where the liver is. The seals make an incision and pull the liver out. They eat the liver. When you stop to think about a seal, if you know seals as well I know seals—my dad bought them for 26 years—when you open it up, it's got blubber on it, it's got thick fat on it. That's oil, and they have to get oil from somewhere.

So what I'm saying is that to some degree they're eating the larger fish. They're taking the livers. They're consuming that part and the cod is falling to the bottom, and that's what the crab and the lobsters and all that live on. The list goes on and on. Then there's the small Arctic cod and so on.

We have bigger problems and bigger fish to fry, sir, than you have alluded to in trying to address this and draw your parameters on dealing with the TAGS program.

• 1005

That to me, sir, is more of a statement than a question, but I could go on and on, and only get to the tip of dealing with the problem as it applies to my riding, to Newfoundland, and to Atlantic Canada to a large degree.

Thank you very much.

The Chairman: Thank you, Mr. O'Brien.

Mr. Auditor General, would you like to respond as to why seals were not mentioned in your report?

Mr. Denis Desautels: Mr. Chairman, I would like to respond to that, and perhaps to a couple of other points made by Mr. O'Brien.

In conducting our work, we've tried to be as comprehensive as possible. We obviously weren't able to cover all of the concerns and all of the problems to the same extent, but I believe our report is a fairly comprehensive, balanced, and constructive review of the situation. It's also based on the objectives set for this program as stated by the government at the time, Mr. Chairman. So we were not inventing new dimensions here; we went right back to the specific objectives for this program when it was announced by the government. I think we have to keep in mind that this is really what we were trying to accomplish in this particular set of audits.

In regard to the specific question on the causes for the collapse, Mr. Chairman, we have addressed that to some extent. We have not necessarily done so to the satisfaction of Mr. O'Brien, but I think we have stated quite clearly that the department has to explain more clearly and conclude more clearly on the real causes of the collapse. I think people are arguing whether it's overfishing, whether it's predator problems, whether it's climate, or problems of some other sort. People are in fact throwing the ball at each other on the particular causes of the collapse. So we said in our chapters that the department indeed owes it to everyone to be clearer on the relative causes of the collapse that we've experienced.

The Chairman: Thank you.

I'll now go to Mr. Bernier of the Bloc.

[Translation]

Mr. Yvan Bernier (Bonaventure—Gaspé—Îles-de-la- Madeleine—Pabok, BQ): I'm glad to see our Auditor General, Mr. Desautels, here this morning.

To start with, Mr. Desautels, I would like to go back to paragraph 36 of the document you presented to us this morning. In it you point out that your comments may have been misinterpreted by some of the media. You say they reported that:

... we concluded that income support was not a good thing to do.

And you add:

That is certainly not the case.

I would like to give you a chance to make your thinking on this very clear, because what I took from your report, and what people in the industry took from it, was that income support was a necessity. It wasn't the fault of the fishermen and fish-plant workers if the adjustment and restructuring objectives weren't met. It was the government's fault—the government did not take the right steps. I would like you to spell out for us what you said, or what you wanted people to understand, i.e., that as far as TAGS was concerned it was the restructuring and adjustment objectives that weren't met and not that of income support, which was not in itself a bad measure.

Mr. Denis Desautels: I can certainly repeat what we said in paragraph 36 of our statement. We recognize that there was, is and for the foreseeable future will continue to be a need for income support. In my view, that is elementary, and nothing in the three chapters we published suggest the contrary or could be used to claim the contrary.

• 1010

On the other hand, as I said earlier in response to Mr. O'Brien, if you look at paragraph 16.10, that is, the tenth paragraph in Chapter 16, you will find the program's objectives, and you will see that they do not deal strictly with income support.

So the government did set out very very clear objectives, and those objectives make very little mention of income support. A great deal is said about other objectives, and those are the ones that have not been achieved, for a variety of reasons. We explain quite clearly in Chapter 16 some of the factors that contributed to the program's failure, in particular a lack of planning, a lack of coordination among the different departments, a delay in identifying the target group, and so forth.

In part, there were what can be termed administrative errors or delays that meant it became impossible to adjust in time, and so funding had to be transferred from active to passive measures.

Mr. Yvan Bernier: Mr. Desautels, you say you recognize that the needs are still there and that in your view income support measures must be continued. Would you go so far as to recommend to the government that it provide for such expenditures right now? We are currently on the verge of the budget preparation stage, and the Standing Committee on Finance is compiling data and complaints from the public, because the next budget has to be ready in February.

The program has sufficient funding to keep going until May, apparently. So it would be more prudent to make arrangements right away for some kind of extension to the support program, financially speaking, and to use this year as a reprieve providing the time to set up the new program on a sound basis. You have sketched for us possible avenues for national policies, but you say the government must take the time to design the program well and to identify verifiable objectives.

Would you go so far as to tell the government this morning that the responsible attitude would be to make arrangements right away, rather than improvising next April or May when the coffers are empty?

Mr. Denis Desautels: I am not prepared to tell the government precisely what it should do. That's up to the government to decide. At the same time, we all know that we have six months ahead of us in which to do a better job of planning the program that will replace the one we are discussing this morning. It will be the third program of its kind to be implemented, because before there was the one we are currently discussing, there was an earlier one intended mainly for Newfoundland fishers.

So I imagine that lessons are starting to be learned about this type of income support or industry rationalization program. It is certainly time that lessons were learned from all this.

Mr. Yvan Bernier: That wasn't a trick question I was putting to you, and I apologize if it sounded like one to you. We know that ministers and MPs come and go, but civil servants remain. So is it plausible that between now and next May, the federal mandarins will have enough time to plan and construct a program that will enable us to achieve the real objectives—restructuring of the industry and adjustment of its workers? You note that this is the third time round for such programs and that each time they seem to be cobbled together in haste.

You also say that there are whole aspects of the Strategy that were put forward and then suppressed, with no further information compiled about them. Is it reasonable to think that between now and next May, the officials at Human Resources Development Canada and Fisheries and Oceans will be capable of coming up with a program that really looks likely to work? If it seems that this will be difficult, because dialogue between the two departments is difficult, then we ought to opt for a year's postponement, but this time the program would really have to work. Are they capable of designing a really effective program in the time available?

• 1015

Mr. Denis Desautels: The government has six months ahead of it to plan the next program better. It has, I hope, better information available to it than it did before, including better information on the target population. Under the two previous programs, it took a great deal of time to identify the people the program was supposed to help, the ones who were eligible for various benefits. But now they have better information. In my opinion, the government should indeed be capable of preparing a program within six months that meets the tests we apply to it.

I also believe that they should not simply reproduce the existing program. As you can see, it hasn't worked terribly well. So they will have to come up with something better. Perhaps it's also time—and this is a question for the long term, and will need to be debated—to start separating the issues of the fishery, a sustainable fishery, and purely socio-economic issues.

When you look at the longer term, you have to ask yourself if the fishing industry has the capacity to support all the people it is currently expected to support. That's not an easy question to answer, I admit, but we have to start thinking about separating the two issues a bit—the issue of an economically sustainable fishery and the issue of the problems faced by the people whom the industry can't support.

[ English]

The Chairman: Thank you, Auditor General.

We'll go to Mr. Easter, representing Malpeque, Prince Edward Island.

Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chairman and Auditor General. We certainly welcome the report and appreciate the constructive analysis, although we might quibble over a few points here and there.

I'm pleased that on page 7 of your submission today you state that you are aware of the real human problems caused by the collapse of the groundfish industry. When we're dealing with this subject and the way it is being presented, I think we have to understand there are two sides to the coin. On the one side, there are the economic considerations. On the other side, there are the people and the communities—the flesh and blood—who are very seriously affected by the collapse of the ground fishery.

Since the report has come out, we've seen statements by the leader of the opposition that this is a total waste of money. That bothers me, because it puts everything in the economic context, instead of looking at what we have to do with the total system.

On the point the leader of the opposition raised related to paragraph 14.5, which states “we found no clearly stated national policy for sustainable fisheries”, I just want to put on the record that there is movement being made. We did in fact pass the Oceans Act in the last Parliament, and it is in the process of being implemented. That will take time. There was the new Fisheries Act introduced but not passed in the last Parliament. It is currently under review by the minister, people within the department, and fish organizations to determine how it should be brought back in—in toto as it was last time, just parts of it, or whatever. I'm sure this committee will be dealing with that.

My question really relates to process. Based on what you've seen, what process do you recommend to deal with all aspects of this? One is the economic side, which we are concerned about, but keep in mind that for the people to whom these moneys went under TAGS and other programs, it has put bread and butter on their table. It's very important in terms of their sustainability as people and communities.

• 1020

Do you have any suggestions for a process to achieve the plan? I know you're aware of Minister Pettigrew appointing a senior individual to look at impact, but do you have any other suggestions?

Mr. Doug Timmins: That's a very complex question to answer. If I understood it, the issue was not just the amendments to the Fisheries Act to introduce some aspect of the national fisheries policy, the question was addressed more to solving the whole issue. If that's the case, I'm not sure we would have a magical solution to suggest.

It's certainly going to take time. It's certainly going to take an involvement of negotiation and partnership and discussion of setting out some clear objectives for what conservation means, what the precautionary approach means, on perhaps a fishery-by-fishery, community-by-community basis, how we are going to manage things in the fishery if we're talking about the communities and the social and economic issues.

If we're talking about the national fisheries policy within the Fisheries Act, I think the movement to reintroduce the bill in due course is appropriate—the debates and the discussion through the parliamentary committee process. I don't have anything I can offer on how else that might work.

Mr. Wayne Easter: The second question is just spinning off my first one. I just want to get your point of view on this. You've done the auditing. I assume—and one should never make assumptions—you've probably talked to people in communities who have been under TAGS and affected by TAGS. Based on their human experience—and I know you're trying to deal with economics in this report—have you seen the TAGS program as valuable in those people's lives?

I want to refute this idea that this program was a waste of money. Maybe it could have been administered better—that's no problem—but I don't want the impression left that this was a waste of money.

On page 5, point 27, you said:

We found that little progress has been made in this direction. In addition, we found that the information needs of enforcement officers are not being met and enforcement effort has been diverted away from groundfish to other fisheries.

Could you explain that point?

Mr. Doug Timmins: I think that point really is drawn from the context of our chapter 15, in which we talk about the need for more integrated enforcement activities and how groundfish has not always been an enforcement priority, the information is not necessarily available to ensure effective enforcement, and the department has indicated a need to train enforcement officers better. It's within that context that we were making that comment.

Mr. Wayne Easter: Just a supplementary question on that. You do say efforts are being diverted away from groundfish to other fisheries. How so?

Mr. Doug Timmins: The priority that's being placed on enforcement activities is focused on fisheries other than groundfish fisheries. To be fair, we are talking about a limited number of groundfish fisheries activities which are going on, but the fact that the priority is on fisheries other than groundfish fisheries is not, in our view, most helpful in ensuring enforcement activities are appropriate in groundfish.

• 1025

The Chairman: We're going next to Nova Scotia and Mr. Stoffer, then to Newfoundland and Mr. Matthews, then to Mr. Hubbard from New Brunswick, and then back to Mr. Duncan from British Columbia.

Before I call that, I want to ask the Auditor General just one short question in view of what he said to Mr. Easter.

We have a group that's asked to appear before this committee. They are a group of TAGS recipients who have a petition to present to you, as the Auditor General, of thousands of TAGS recipients who want an investigation into where the money went under TAGS. They've sent to us—and I'll ask that this be copied and given to members of the committee....

So I'd just ask you a short question. According to the TAGS recipients, you did not investigate where the money actually went, that is, the money that did not go to the TAGS recipients. Do you have any response to that, in view of their petition that's being forwarded to the committee?

Mr. Denis Desautels: The statement might refer to the fact that we did not do exhaustive audit work on the aspect of the program dealing with training and the purchase of courses from institutions and so on. Our rationale for that is that kind of activity was not unique to TAGS. HRDC has in fact been conducting that kind of program for many years. So we did not go into that aspect of the utilization of the TAGS moneys, but concentrated more on the actual benefits paid to individuals and also on the retirement of licences and early retirements.

The Chairman: Okay. We'll go to Mr. Stoffer of Nova Scotia and then back to Mr. Matthews of Newfoundland.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): New Democrats should always be first. Thank you, Mr. Chairman.

To the Auditor General, I hope you enjoy your apple from Nova Scotia.

I have an awful lot of concerns to deal with, and five minutes isn't going to do it. Along with Mr. O'Brien of Labrador, five hours would probably be more appropriate, or five weeks.

Mr. O'Brien, before I go to the Auditor General, I just wanted to say the easiest thing we can do is always blame a predator like the seals. It was similar when I lived in the Yukon: we blamed the wolves for the lack of caribou. The real problem is man. To blame it on a predator species is the easiest thing to do. Although I do agree with you that seals should have been in this report, the easiest thing to do is to always blame a predator species, when in fact it's man that's the problem with the groundfish strategy. If we remove all the shrimp, the cod aren't going to come back, because there's nothing for them to eat. So there's a balanced argument. I'd love to debate that with you on a more formal basis.

The Auditor General's report failed to mention the historical aspect of the ITQ systems and what devastation that's done to the groundfish. What you had for hundreds of years were community quota allocations, and now you've gone to corporate control. You have 50% of the resource in Atlantic Canada under corporate control, and they high-tech these fish stocks incredibly. They could catch tonnes of fish in hours, what used to take thousands of people weeks to do. I wish you had mentioned that more in the report as a major problem with what's going on with the fisheries.

I've always argued that the easiest thing we can say is there are too many fisher people out there, when in reality there's too much damn big equipment out there. They'll high-tech this industry down to nothing. You talked earlier about industry and government getting together to discuss some sort of industry control of the fish stocks. Well, that would be the worst thing that could ever happen. It's like allowing lumber companies to take care of the environmental aspects of our wooded areas. It just can't happen.

I believe there should be a more cooperative, joint togetherness in that regard. If you talk to any of the fishers all up and down the coast, you'll find it's not the individual fishers who are the problem; it's the big corporate conglomerates out there. That's the problem.

One fisherman down in Sambro told me quite simply—he has a grade five education and he's been fishing for 35 years—he said, “Peter, the problem with the fisheries is this: you can have seven guys make $30,000 a year or you can have one guy make $200,000 a year”. That's the crux of the problem. We've downsized it to the point where we can catch them in minutes, as compared to weeks.

• 1030

Also, you said that a formal measurement is required. I recommend to you, sir, that although you can't tell the government what to do, you can certainly advise them. That would be a judicial inquiry. In my opinion, a judicial inquiry is the only way that scientists from the Department of Fisheries and Oceans, from the Department of the Environment, and from all other aspects of our society can come forward without job retribution or this gag order that they're under—in this so-called democracy we live in—and start laying the blame where it is. The same people in the Department of Fisheries and Oceans are still there.

Since the merger, you also have the coast guard now managing many aspects of the Department of Fisheries and Oceans. That's not alluded to in your report at all. That should have been gone into a great deal. The coast guard knows a lot about boats, but they don't know anything about science, and that again is another problem. It's a major problem.

You just can't keep going this way.

Issues like by-catch were not touched on very much in your report. There is still dumping of tonnes and tonnes of fish as we speak today. You've got Russian and Cuban trawlers bringing their catch in for processing at our plants. Those could be Canadian jobs right there. It just goes on and on and on.

You're right about the fact that there is no national policy. We've known that for years. It's a major problem.

I think that under a judicial inquiry not only would they find fault as to the TAGS concerns and everything else, but they would also have firm recommendations from various people throughout Atlantic Canada who can come forth with plausible solutions. Without a judicial inquiry, I really don't believe that anything in your report will go anywhere.

There are other issues as well.

On the income support, I agree with Mr. Easter. The money was not wasted, although aspects of it, probably hundreds of millions of dollars, were wasted in diversion from other areas where it should have gone. But I believe that in the end it did put bread and butter on the plates of everybody who required it.

The actual promise of TAGS was till May of 1999, not until 1998. Your report should have said that it should have stayed, as Mr. Bernier has said, until May of 1999. That gives us not just six months but another year and six months in order to come to some plausible solutions. Those were contractual agreements. People took out loans, they took out investments, they did all kinds of things based on the fact that they would have an income support until May of 1999. The government, without consultation—they said they did, but they didn't—rips up this agreement and stops it in May of 1998.

Where they got that pressure from I won't allude to at this particular time, but I have a good idea of where it came from.

I compare the fishing industry to what's happening in the farming industry in Saskatchewan. Twenty-five years ago a family could get by on five sections of land. Now they can't. They need at least twenty sections of land. It's the same in the fishery. The “two-foot-itis disease”, I call it. You've got to have a bigger boat. You've got to go more deeply in debt. You've got to catch more fish. This puts more of a strain on the resource.

These are issues I wish the report had alluded to: the fact that it is not the individual fishermen in the 18-foot boat who is causing the problem, but it's the big corporate conglomerates, who've been subsidized since 1983 in the Lockeport experiment of National Sea. You subsidize a big corporation like that in Lockeport, and what happens? Within years, the stock started to decline and people started to get laid off. Yet a certain handful of people made an awful lot of money. It wasn't the individual fishers in Labrador or Newfoundland or Nova Scotia or P.E.I. or New Brunswick.

Thank you.

The Chairman: Thank you, Mr. Stoffer.

I don't know where the question is, but perhaps you—

Mr. Peter Stoffer: I'm sorry. It's on the judicial inquiry. Why didn't his report ask for a judicial inquiry into the fishery?

The Chairman: Perhaps the Auditor General can address that question, given the fact that 50% of the take of fish on the east coast, according to your report, is from the offshore. Another amount equal to that is from foreign vessels that are fishing on straddling stocks. Given those facts, as Mr. Stoffer says, you don't need any cuts in the inshore, according to your logic in your report.

Mr. Auditor General.

Mr. Denis Desautels: First of all, our report touches indeed on a number of the issues that have just been raised by Mr. Stoffer. When we talk about capacity and what contributes a capacity, what capacity means, I think our report does touch on that. I would refer you to paragraph 14.56, among other things. We have also talked about other contributing factors, such as by-catch and high-grading. We have in some fashion dealt with a number of possible causes of the collapse.

• 1035

The main message is that DFO has to come out—as I said earlier—and more clearly state what were the respective contributions of these various causes to the collapse, because I think everybody is shooting at each other on what may have caused the collapse or not caused the collapse. I think there's a need for parliamentarians to hear from DFO what is the relative contribution of each of these factors to the collapse.

In terms of the judicial inquiry, I don't want to comment on that except to say that of course that's for parliamentarians and government to decide. I understand that the department is in the process of looking at the management of the science function within its department and its ranks. I would hope that once that internal review is done and it's made public then we can decide what the next step should be.

The Chairman: Mr. Matthews, Newfoundland.

Mr. Bill Matthews (Burin—St. George's, PC): Thank you very much, Mr. Chairman.

I want to thank the Auditor General and his officials for being here this morning and to say off the top that there's nothing in the report that surprised me. I think for the most part for those of us who have been involved in the fishery and following NCARP and TAGS that the Auditor General's report stated the obvious. My worst fear is that we had NCARP, then we had TAGS, and it was very difficult for there to be a smooth transfer of files from DFO to HRD, from NCARP to TAGS. So I'm one person who is not surprised that this has been screwed up so badly under TAGS.

Mr. Chairman, my worst fear this morning is that as we go forward with whatever follows TAGS we are capable of screwing it up even worse. I say that not very lightly, but I say it out of concern for the people I represent.

The review of TAGS in my view is an outright waste of time and effort. There is nothing left to be found out about TAGS in terms of the problems. The Auditor General has highlighted them very well in his report. All of those concerned and involved in the program know the problems. Today government should know what strategy and what plan to put in place to follow TAGS. We don't need any more time, and we don't need any more expenditure of money. We know there are going to be fewer people left in the fishery. The real challenge for government is what do we do with those who will not be able to make a living from the fishery? That is the real challenge. What do we do with them?

I would like to ask the Auditor General about the 545 licences of people being retired from the fishery through licence buyouts, which he talks about. I was in a section of my riding last week, in Grand Bank—Fortune on the Burin Peninsula, and I met with representatives of the inshore fishery and the processors and union locals. I was told by those people that there are more boats fishing in that area right now than there were before the moratorium took place. There are more vessels fishing in that small area because of transfers of inactive licences and so on.

I would like to ask the Auditor General as well, did you find in your investigation that, yes, they bought out licences but the vessels and the gear continue to fish, so in essence there was no real reduction in harvesting capacity? What they did was give someone $100,000, $150,000, $200,000 to stay ashore, which they were very grateful for, but someone else hopped into the vessel and crewed it and that vessel is still fishing. So how in the name of God could we have a reduction in harvesting capacity when these kinds of things went on? It did happen, big time it did happen.

The other thing I want to say to the Auditor General so that he knows and other members of this committee know is that there were letters issued by the then minister of fisheries and the then minister of human resources to people in the fishery for early retirement. They have letters in their possession. I have copies of them. There were hundreds of people in Newfoundland and Labrador alone that were given letters saying that if they turned 55 in the TAGS benefit period they would be entitled to early retirement. Government reneged on that commitment. I'm wondering if you came across that in your investigations.

Also, there's been great concern, particulary in Newfoundland and Labrador, about the expenditure of millions of dollars by private training institutions, training programs. In particular, the biggest question in Newfoundland and Labrador—which was raised by the chairman partly—is what did the fishermen's union, the FFAW...? There are rumours that they received about $50 million in funding from TAGS and NCARP, and I'm wondering if you and your officials investigated and know where that approximately $50 million was spent. It's a big concern for the people of Atlantic Canada, because they want to know where that money went.

• 1040

The Chairman: Mr. Timmins, you did the audit. Your response?

Mr. Doug Timmins: Thank you, Mr. Chairman. I don't believe that I'm going to be very helpful in answering the member's questions on all three counts, unfortunately.

I think we found no real evidence of the fact. We didn't pursue the particular matter that the licences were not effectively retired. Our focus was on the program to buy them out and how much was allocated.

We also found no evidence of the reneging on promises, or whatever, if I understood the second question properly. And I think Mr. Desautels has previously answered the first question, in terms of the $50 million that was for the training. So we did not focus on that for the reasons already explained.

Mr. Bill Matthews: Thank you. That's a very important point.

To the Auditor General, perhaps I don't understand properly, but I thought that it certainly would be a role for the Auditor General and the officials in his department to look at the expenditure under the various components of TAGS to see where this money went and that everything indeed was in order. That was my understanding. Perhaps I'm incorrect in that understanding, but I thought....

If you haven't done it, then let me ask you whether there is any way you can look at two components particularly of that program. One is the money to training institutions and for the training programs, and number two is where the funding that went to the FFAW, the union in Newfoundland, went and what it was spent for, how it was used—was it done wisely and was it done prudently? So if you haven't done it, then can you do it?

The other thing I want to comment on is I'm wondering if the Auditor General, because of his overall statement about DFO and so on, has given any serious consideration—and he mentioned science—that the scientific activity of DFO should be totally independent and should be at arm's length from the Department of Fisheries and Oceans so that, as my colleague from the NDP has said, people are not muzzled or gagged or restricted in what they say. I strongly contend that it should be an independent agency or commission of some sort that deals with this science, so there are no restrictions, and indeed we can deal with the real truth about our fish stocks.

The Chairman: Mr. Timmins, do you have a remark?

Mr. Denis Desautels: I'll deal with those, if I may, Mr. Chairman.

First of all, on the question of the money that went to training and to other organizations, we do have the capacity and the ability to pursue this if we wish to. It's our own judgment, based on the different factors to pursue one issue or another. We have to make choices all the time, and up to now we have chosen not to pursue this in depth. We could decide otherwise, and we have the ability and the mandate to do that.

The second question, whether or not the scientific activity should be divorced from DFO, is a very interesting question. There are examples of that elsewhere around government, where you have semi-autonomous organizations like the National Research Council, as an example, where you have fairly distinct scientific activities being carried out.

In answer to that question, I would prefer to wait for the internal review that is going on now and see what people have to recommend in terms of managing scientific activity within DFO, and take it from there.

I would add to that, however, that we can still in the meantime introduce more transparency to all of this, and in fact there has been, since 1993 I believe, in place a council to interplay between the minister and the scientific community and the departmental people. I think that kind of transparency is very healthy, and I think strengthening that particular aspect could overcome some of the concerns that have been expressed by Mr. Matthews.

• 1045

The Chairman: Thank you, Mr. Auditor General. So you will be responding to the fishermen who will be petitioning you, the TAGS recipients, regarding the request that an audit be done as to where the money went, as well as to Mr. Matthews.

Now we turn to Mr. Hubbard from New Brunswick.

Mr. Charles Hubbard (Miramichi, Lib.): Thank you, Mr. Chairman.

I've listened to the Auditor General before and I'd like to commend him, but I'm not sure if he really realized how big this issue is when he started to look at this chapter of his report. I'm sure in the weeks ahead he'll find this a very big issue, and we'll probably be calling him back or looking for more information from him.

The report is rather critical of the management of DFO. If you had a rating scale of one to ten, how would you rate the management of DFO, ten being the highest mark?

The Chairman: Do you wish to respond to that, or do you want to pass?

Mr. Denis Desautels: Not really, Mr. Chairman. Our work was not carried out to arrive at that precise a rating.

The problems are quite serious, obviously, but I should say here that we don't blame necessarily DFO for all of the problems we've mentioned in here. I think the issues are broader than simply one department. There were other people involved in the TAGS program, for instance, and when we talk about a national policy, I think that involves other players as well.

Mr. Charles Hubbard: I think my ten minutes might be used up, but in terms of any private corporation that received an audit such as the one you delivered, if we were shareholders or investors in that corporation I believe we'd have to make some very difficult decisions. I think, Mr. Auditor General, we would have to look at those in terms of your report, and I think most people around this table consider it to be a very critical report, especially in terms of the idea of sustainability.

Is it a realistic objective for us to assume that DFO can measure up to developing a sustainable program for fisheries in Canada? Is it a realistic expectation?

With that, I'd also like to know in terms of the investigation you did as Auditor General.... We talk about people with heads, and we have all kinds of heads thinking about how money is spent. Mr. Easter referred to the heart. Did any of your people have the sea legs that go with knowing what the fisheries are about in Atlantic Canada? Did you have people who knew in their heart, in their legs, could they go out and taste the salt water, feel the wind, cope with the vessels they were trying to talk about in terms of this report?

The Chairman: Mr. Auditor General, did Mr. Timmins wish to respond?

Mr. Doug Timmins: In terms of the first question, the nature of the problem within fisheries, as Mr. Desautels indicated in his answer to the earlier question, is certainly a question that goes beyond just the fisheries management to solve the problem. We point in our chapters to the direction of the government to resolve the problem. It's not just a fisheries problem.

We also point to the fact that there were many good intentions in the design of things like the biological reference points or the conservation standards that have been introduced in the past, but they were not successful once implemented, and that those are the kinds of things on which many players, including the industry, have to work with fisheries to make sure that conservation is the priority and that the resource is managed in relation to that.

To deal with the question of whether it can be done, I think it goes beyond just DFO management to respond to that.

I'm sorry, Mr. Chairman, I've forgotten the second question.

An hon. member: It was about the sea legs.

Mr. Doug Timmins: Yes. I guess I had a little sea sickness there for a moment. Sorry.

We had a number of people advising us, a number of people involved who lived in the Maritimes, on the east coast, who have many people in their families that have been involved in fishing, and so on. To go beyond that, we did not have any fishermen specifically involved in the audit, but we had a number of people advising us and were consulting a number of people who had a fishing background and were extremely supportive. Someone in industry was advising us as well.

• 1050

The Chairman: Thank you, Mr. Timmins.

Now we go to British Columbia, Mr. Duncan and Mr. Lunn.

Mr. John Duncan (Vancouver Island North, Ref.): Thank you very much, Mr. Chair.

I'd like to congratulate the Auditor General for doing this task. Everyone can know that a program is a disaster, but it's helpful to have somebody providing the solid documentation from arm's length.

I think some people may be trying to shoot the messenger here. We've had all kinds of evidence that government policy was at the root of most of what happened. There is one very damning statement referred to in paragraph 14.43 of the Auditor General's report. It goes all the way back to 1970, to the fact that rationalization of the fishery was a recognized need at that time. What we in fact saw over the next decade was not rationalization, but expansion.

The parliamentary secretary made comment about a statement by the leader of the opposition. I'd just like to go beyond the CBC sound bite to at least put on the record that what Preston Manning said in question period was this:

[W]hen [Parliament] voted to support the program, [it] was money for training and restructuring of the industry, and they got neither of those through the TAGS program.

That's clearly what we were talking about.

The fact is that there has been a massive betrayal of the entire fishery. There has been a lack of serious consideration of legitimate scientific research. There has been a betrayal of fishermen dependent on good management.

We are seeing a loss of population in Newfoundland. This is a really sad situation. No one has ever apologized for what has been done to that province.

“There have been some very hard lessons learned.” That was something the Auditor General said earlier today. We didn't need to learn those lessons in 1997. In 1993 the fisheries minister, Mr. Crosbie, said “We can't go on paying people for doing nothing.” That was NCARP, the previous program. He also said “This is a gigantic social experiment.” In 1994 the fisheries minister, Mr. Tobin, said “This is the program to end all programs.” Well, preventative management is a very desirable thing.

We've had the DFO and other scientists, in well-publicized fashion, complain about the suppression or politicization of scientific opinion and stock assessments. Many have suggested that we need a legislative enabling of reporting on our stock assessments. I know you've answered one question on this. I think that is a very solid direction for the Auditor General to investigate and to recommend on—once, as you say, we've seen something come from the department.

Finally, Mr. Chair, I'd like to make a motion, and then I'll share my time with my colleague. The motion is this:

Recognizing the disturbing failure of the Atlantic Groundfish Strategy and the fact that the fate of millions of dollars of taxpayers' money designated to assist displaced fisheries workers is being asked about by TAGS recipients, this committee moves that the director for the Atlantic Groundfish Strategy immediately undertake an investigation to reveal the location of the funding of the TAGS program, and be accountable to this committee and appear as a witness in the first week of December 1997 with his results.

The Chairman: I'll have a look at the motion put by the hon. member, but I remind the committee that we do have the Department of Human Resources Development as witnesses before this committee this afternoon, as well as Mr. Eugene Harrigan, who is conducting an investigation into the future activities of the federal government regarding TAGS.

Now, I believe Mr. Lunn was interested in asking a question.

• 1055

Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Thank you, Mr. Chairman.

After reading it in great detail, I too want to commend the Auditor General on his report. What I read is very disturbing. I will point out the one sentence in 14.5 Mr. Manning also referred to: “Nevertheless, we found no clearly stated national policy for sustainable fisheries”. I find that very disturbing. As a member from British Columbia who is following what is happening on the Pacific coast with great interest, I see an alarming parallel. What is happening in British Columbia, I read in this report, is what has happened in Atlantic Canada.

I understand the Auditor General has completed a report on the Pacific fishery situation, so I have a few questions for him. Again, the report is very critical on protection and conservation. The sustainable fishery is the one that seems to be losing on both the Atlantic and the Pacific. First, has this report been completed, or does it exist?

Second, where is this report now, if it does exist? I understand this report is supposed to be tabled in the House in early December. Is there any reason why we could not have access to this report now, at an earlier time, if it exists? I think the sustainable fishery is in a crisis situation. We need to move as quickly as possible and learn from our mistakes, as they have pointed out in the report on the Atlantic.

The Chairman: Mr. Auditor General, could you answer the question the member put? If what he has said is correct and you've done the report and you're going to present it on December 2, then you've obviously finished it. Is Mr. Lunn correct?

Mr. Denis Desautels: Mr. Chairman, the work is near completion and we're in the process of finalizing that first chapter, if you wish, on the Pacific situation. Our plans were to table that in the House on December 2.

I said this is a first chapter. We're also planning a follow-up to that, a second one, for some time in 1998. It's far less advanced.

So we're pursuing the fishery issue on the Pacific coast as well. We're not ready to report as we speak now, but we will be tabling a report on that on December 2 and another one later on, in 1998.

Mr. Gary Lunn: If the report is not complete, then is it safe to assume report is still within the confines of your office and not released to the department?

Mr. Denis Desautels: There are discussions, as we always have, going on with the department to establish that the facts on which we're basing our report are correct. So some discussions are going on between ourselves and the department right now, and that's the process of finalizing that chapter and that work. This is a standard practice we carry out for all of our work.

Mr. Gary Lunn: Because of the urgency of what is happening on the Pacific coast right now and the lessons that can be learned from the Atlantic—and we are in a very critical situation in the Pacific in the matter of time and people are trying to resolve this as we go forward—is there any way this report could be available to this committee before December 2? The timing of this report is absolutely critical right now to the future of the sustainable fishery in British Columbia, and it may be of great assistance.

Mr. Denis Desautels: It's my judgment that the report is not ready for that at this point. But we're not looking at a very long timeframe. We're talking about December 2, which is not very far away. I believe our report then will be very timely.

I don't think I can release it before then. We will be working quite hard at finalizing it between now and then.

• 1100

The Chairman: Auditor General, would you commit to reappear before this committee at that time so that we can examine you on December 2 or as soon thereafter as possible, preferably December 3?

Mr. Denis Desautels: If invited, I would be pleased to appear again with that new report.

The Chairman: You are now invited. It's a standing invitation.

As to the motion Mr. Duncan just put that the director of human resources development appear before this committee and justify where the money went, we have the very people before this committee this afternoon at 3.30. I will use my judgment and put off the motion until after that hearing, and then if not satisfied I will call on Mr. Duncan to reput the motion. Is that satisfactory, Mr. Duncan?

Mr. John Duncan: Yes, it is.

The Chairman: We now go to Mr. Bernier, who has a small supplementary, and then I think Mr. Lawrence has a small supplementary.

[Translation]

Mr. Yvan Bernier: I'll try to keep it short.

Mr. Desautels, just now when you replied to my first question about the time needed by the government to set up an adjustment and restructuring program, you said that six months, or at any event the time from now until the anticipated end of the TAGS program, gave the government, or could give it, it the time to set up such a program.

My next question has to do with accounting. I would be grateful if you could do some adult education here, for me and for the viewers who are following this discussion on television. Without giving the future program a name, everybody knows that the financial needs are there and that it's reasonable to expect estimates for them in next February's budget. Everybody knows that TAGS comes to an end in May of 1998 and that there won't be enough money to get through to the following year. In accounting terms, how does this work? People often say that the government doesn't look ahead enough, doesn't react far enough in advance. As taxpayers, can we expect that the government will provide for this expenditure, even if it doesn't tell us whether it will actually spend the money or not?

Mr. Denis Desautels: I imagine that if the government, at the time the next budget is being prepared, has relatively clear plans for the extension or replacement of TAGS, certain sums will be allocated for that purpose.

However, it is quite possible that the amount and the conditions for extension of the program will not be obvious. As you know, the government can, as part of the budget process, provide for certain unforeseen contingencies and simply include in its general estimates an amount that could be used for an extension of the existing program, depending on what decisions are made next May or June. So there could be funding provided, but in an amount and under conditions that aren't spelled out.

Mr. Yvan Bernier: Normally it would be fair and reasonable to see if the government is trying to behave prudently. It knows that TAGS will be ending within the fiscal year. So at the very least it ought to be able to calculate how many people are still receiving benefits under the program and how much that costs the government every week, and figure out what it would cost to get to the end of the following year.

Then one of the ministers could decide whether to pay out that money or not. I imagine the stock market must be expecting it to cost us $500,000 more. I presume the amount must be quantified somewhere. So if the government plans to act prudently, we should be able to count on finding provisions for this purpose in Mr. Martin's next budget.

Mr. Denis Desautels: I think that's a question that should be addressed to the Minister of Fisheries and Oceans, or the Finance Minister.

Mr. Yvan Bernier: As an accountant and our Auditor General, can you tell us if this is normally a tool that should be available?

• 1105

Mr. Denis Desautels: The Canadian government's budget principles are such that any expenditure anticipated for a fiscal year must be included in the budget tabled to Parliament. So if there are expenditures anticipated for a program like this, the Minister would be able to answer your question when the budget is brought down, I should think.

[English]

The Chairman: Thank you, Auditor General.

Mr. Stoffer.

Mr. Peter Stoffer: My last question is for the Auditor General. Again, as the gentleman from the Reform was indicating, I don't think we're here shooting the messenger; it's the message. It's kind of upsetting, as Mr. Lunn said, that there's no national policy for things of this nature from coast to coast to coast, if I may use the Arctic as well.

Mr. Hubbard wanted to know if you could rate the DFO on a scale of one to ten. I think Mr. Matthews and I wouldn't even put it on the chart. It wouldn't even make it there. The problem is there are still cuts going on within the DFO for another two years. More money and more people are being displaced out of DFO.

My question for you, sir, is do you have confidence in the current management at DFO to carry out their function as your recommendations see fit?

The Chairman: Mr. Auditor General, I don't think you have to answer that. If you want to pass on that question, you don't have to answer it, as you know.

Mr. Denis Desautels: Mr. Chairman, the decision to make cuts or not make cuts is outside my scope, obviously, but I believe there's a fair bit of information around that's available based on TAGS and the predecessor to TAGS. I think they can learn the right lessons based on what is already known.

The Chairman: Mr. Stoffer, did you have a final point on that?

Mr. Peter Stoffer: He has a lot more confidence than I have. For the sake of the 20,000 fishers in Atlantic Canada and Quebec—and that's not including the ones on the west coast or in the Arctic—I hope, sir, that your confidence in them is correct.

Mr. Denis Desautels: Mr. Chairman, very quickly, the department has responded generally favourably with our recommendations. We'll give them a chance to implement or act on what they said they were going to do.

The Chairman: Thank you.

Mr. Wayne Easter: I have a point of order, Mr. Chairman, or a point of information, because I think there's a misinterpretation here.

I'm wondering if the Auditor General could clearly distinguish the responsibility of DFO relative to TAGS and the responsibility of HRD relative to TAGS. I believe there is some confusion that DFO is responsible for the TAGS program, and it's not. It's HRD. We have responsibilities over management, yes.

Mr. Doug Timmins: I think if you refer to the details of our chapter you'll see that the TAGS component DFO is responsible for is dealt with within chapter 15. It is primarily the licence buy-back, the rationalization and renewal aspects.

The responsibilities for adjustment and income support were both HRDC. As laid out in chapter 16, there is a paragraph that brings in the two other agencies that were involved in terms of $50 million for regional economic development. Those are ACOA and FORD-Q.

The Chairman: Thank you.

Mr. O'Brien, you had a closing question?

Mr. Lawrence O'Brien: In my remarks earlier I don't think I was talking about shooting the messenger, as the Reform might have said. I think what I was trying to say is the messenger could have gone a little further and been a little more practical and maybe applied some things that could help some of the current recipients of TAGS to get on with their lives beyond TAGS or beyond whatever. I was thinking primarily of some of the concerns I expressed in my own riding.

As for the NDP critic, Mr. Stoffer, I want to say very quickly that the people may have been to blame initially relative to the technology and the dragging and so on of the fisheries. I think now Mother Nature has jumped in and is doing its part too relative to the imbalance that is being created in the ecosystem with the seals. I think the Auditor General and the Government of Canada generally need to be very cognizant of that. Stop the pussy-footing around relative to the great saviours of the seals, and deal with the facts of life.

My final comment has to do with life after the current program. This is more in the form of a question, not totally relative to what I just said but I suppose all-encompassing.

• 1110

Would you suggest, sir, that whatever program we have following TAGS, or life after TAGS as we know it, would include more buyouts or more retiring of licences through retiring people at the age of 50 or 55? To me, one of the better parts of the TAGS and NCARP programs I've seen was the retirement side of it, which gave some peace of mind and comfort and allowed the fishery to unfold in certain manners. I think that's still a very important point.

The Chairman: Do you wish to comment, Auditor General?

Mr. Denis Desautels: Very briefly, Mr. Chairman, I recognize that this is a huge, difficult issue, and it's not going to be easy to succeed in whatever future programs governments come forward with.

In terms of more buyouts, there has to be a bigger reduction in the total capacity, not necessarily in the numbers of licences, achieved in order to maintain a sustainable fishery. So I think that if this is not dealt with, then 15 years from now we'll still be talking about it.

I have one last comment. I had mentioned this a bit earlier. It comes through in some of the comments by members of the committee. I think if we look down the road a little further, there will be a need to try to separate somehow gradually the sustainable fishery objective from some of the more socioeconomic objectives.

I personally feel that we're asking a lot of the fishery at this point in time. Our various governments will have to think of solutions that over time deal with this not only as a fishery issue, but as a broader socioeconomic issue.

The Chairman: Thank you, Auditor General. A short comment by Mr. Easter.

Mr. Wayne Easter: Yes. In your remarks today, in point 12 you mentioned that—this really relates partly to what Mr. Stoffer said earlier—a portion of the remaining 10,435 core licence holders historically caught most of the fish. Do you have any further analysis of that? Are you talking about the corporate fishery more so, and if so, how much? What's the breakdown between the corporate fishery versus the family fishery, and that kind of thing?

Mr. Doug Timmins: Mr. Chairman, I'll try to answer that.

We did not analyse the small or large fishery within the component. I think the primary focus here is that within the 10,000 that remain, it basically starts with the fact that, from the point of TAGS, 545 licences were retired. That's not a significant component. The rest of the people are still eligible to fish. Of the ones who are now designated for termination as outside of the core, the 2,626 licences, they were not the most active ones.

So the point that was made here is that within the component of the some 10,400 licences that remain, the ability to catch the fish is still within those licence holders.

The Chairman: In the inshore sector.

Mr. Doug Timmins: Within the total.

The Chairman: You haven't dealt with the foreign sector or the offshore sector; you're talking about the boats in the inshore sector.

Mr. Doug Timmins: We haven't dealt with the foreign sector, but the remaining licences, to a degree, cover all. They include the enterprise allocations.

The Chairman: Yes, these are what we call longliners, or up to 65 feet. That's what you're referring to. Beyond 65 feet is generally referred to as being offshore, which you didn't deal with. Some of the committee members wish you had dealt with it.

Anyway, we have a short intervention from Mr. Lunn.

Mr. Gary Lunn: I just want to make a quick comment. We heard a few comments from Mr. O'Brien on the seals, and I just wanted to ask the Auditor General to possibly look into this at the end. I don't believe the problem of the seal industry is the codfish. I don't think that's the problem. I think the government has deliberately suppressed this industry.

There's the potential for hundreds of jobs—there's no question about that—in the seal industry, but they're not able to export the seal products due to government regulations, whether this is deliberate or not. The reason is that in Canada a seal is considered a fish. It's dealt with by DFO not as mammal. But it is a mammal, so in order to get the inspections approved, it has to come from the Department of Agriculture. So there's a bureaucratic mess there at the end of the day. The DFO cannot legally give the appropriate inspections or certificates that are required.

• 1115

I think there is a huge potential here for a seal industry in Newfoundland. Again, the codfish are not the problem. The government has deliberately suppressed this market.

So I would ask you, if you have not done so, to look into this bureaucratic mess and the seal industry suppression. I think there is a very big industry that could be there for Newfoundland, but it has not been dealt with. It's a huge bureaucracy, and possibly your office could offer some assistance in this matter.

The Chairman: Auditor General, did you want to comment on the seals?

Mr. Denis Desautels: I'll take good note of that, sir.

The Chairman: Thank you.

We want to thank the Auditor General and his officials for appearing before us today. Of course he is committed as well to appear before the committee when he presents his report on the British Columbia salmon to the House of Commons. We appreciate that, and we will be in touch.

This afternoon we will be dealing with chapter 16, which is human resources development, and where the money went. We will also have Mr. Eugene Harrigan, who has been appointed by the Government of Canada to investigate what to do after May, when TAGS terminates. That will be this afternoon in this committee room at 3.30.

The meeting is adjourned.