FISH Committee Meeting

STANDING COMMITTEE ON FISHERIES AND OCEANS

COMITÉ PERMANENT DES PÊCHES ET DES OCÉANS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 26, 1998

• 0923

[English]

The Chairman (Mr. George S. Baker (Gander—Grand Falls, Lib.)): I call the committee to order.

Our order of reference today, our order of the day, is pursuant to Standing Order 108(2), consideration of central Canada fisheries issues. I want to remind the committee that we will be going to Manitoba very soon for five public hearings, so some of the witnesses who we had scheduled for today will be appearing at either The Pas, Grand Rapids, Gimli, Selkirk or Winnipeg at our hearings there.

Our witnesses today are the following: from the Northwest Co-operative Fisheries Limited, Mr. Rick Hay, who's the general manager; and appearing as individuals we have Karen Olson, who is a commercial fishermen in Lake Winnipeg, and Kim Sigurdson, who is a marketer of fish and seafood products. So we'll be hearing from these three witnesses one after the other.

• 0925

We have with us today on the committee the spokespersons for the Reform Party of Canada, for the Bloc and for the New Democratic Party, as well as the Parliamentary Secretary to the Minister of Fisheries and Oceans.

Who wishes to go first? In giving us a presentation, normally we would ask you to say a few words and then open up to questions from each side. Mr. Sigurdson.

Mr. Kim Sigurdson (Individual Presentation): Thank you, Mr. Baker and honourable members. The Freshwater Fish Marketing Corporation has been around since 1968-69. Its author is McIvor, who you might recall from the McIvor commission and the Wheat Board.

The monopoly that the FFMC, the Freshwater Fish Marketing Board, has is somewhat like the Wheat Board's. I think the Wheat Board is a little smaller in size. The total monopoly area of the Freshwater Fish Marketing Association is approximately 6 million square kilometres. It covers northwestern Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories.

There are approximately 3,500 fishermen who work for the corporation. The corporation has been paying somewhere in the vicinity of about $32 million out annually to its 3,500 fishermen. We got a letter from John Crosbie when he was the minister. Ironically, John thought that $32 million was a whole lot of money for a lot of people. He was right. It was a whole lot of people.

If you take 3,500 fishermen and divide it into $32 million, the average fisherman is making $9,143 per person. I don't know how many people in Canada would work for only $9,000 a year, but that's the basis of the complaints we have to bring towards the corporation.

The corporation doesn't allow anybody other than itself to market the fish and process it. There are special dealers' licences you can get— I'll get into that a little later —but basically the corporation buys one species and one species only, and that's pickerel.

Whitefish is a major market, but the only thing is they haven't marketed it very well. What they've asked the fishermen to do is basically throw away 60% to 70% of their catch. When you talk about 60% or 70% of the catch in an area the size I just described, you're talking of 20 million to 30 million pounds a year being thrown away by the poorest of the poor.

By that I mean that 75% to 80% of the fishermen are aboriginal. They are living in some of the most squalid communities you'd ever imagine in third world living conditions. I think the last time the Standing Committee on Fisheries came to Manitoba you had an opportunity to go and take a look at the way some of the aboriginal people were living.

I'm Métis, and we have some communities that are in pretty dire straits, but if you take a look at some of the first nations communities with 60%, 70% and 80% unemployment rates, who are not allowed to even process their fish and are being made to throw them away, it's a bit of a paradox, really.

You have the standing committee here looking on the east coast, and the fishermen out there go out there every day and they look out in the water and there is nothing there. Then you go out to the west coast, where the time clock is clicking; there are hardly any fish left there either. Then you come to the prairie provinces and the north, where we have lakes full of fish and we're made to throw them away.

You might recall the former chairman, Ron MacDonald, saying it was legislated poverty. That's exactly what this is. It's racist policy, as far as I'm concerned. Being aboriginal and taking a look at some of the conditions that we live in, I think it's just insane. There is no reason for this.

The bottom line is that nothing is going to change until we get rid of this corporation, this monopoly.

• 0930

One of the things that can happen when the corporation is taken out, or if— there's a new catchword these days called “dual marketing”. If fishermen and their communities were allowed to catch this fish and sell it to whoever and wherever they want, you'd find a couple of things happening. Number one, you'd find jobs being created all throughout the north, jobs that we really need.

Another thing you'd find is the transportation problems that the corporation talks about are problems that are valid. They say that it costs a tremendous amount of money for these fishermen to send their fish down from the northern parts of Manitoba, from some isolated communities, and it's true. I'll give you an example.

In some areas in Manitoba right now they're throwing away trout, perch and whitefish. These are commodities. These are fish that you see in the supermarkets selling for unbelievable prices. The fishermen aren't allowed to process the fish, as I said, so they're stuck basically saying, okay, we'll take the fish, we'll put it on a plane, and we'll send it to Winnipeg, to Transcona, to be processed. The transportation costs are so high that it doesn't make sense. You can't send a fish down from northern Manitoba to Winnipeg when it costs you a dollar a pound for transportation and the corporation's going to give you a dollar a pound for the fish. There's no point in sending it. You're not making any money. So currently they're throwing it all away.

As for the processing of the fish, I'm sure that most of the committee members have been in fish plants and seen what happens. When you cut a fish up, you're taking usually 50% to 60% of its weight and leaving it at the site, leaving it at the community. They use it for putting in their gardens, they use it for anything, but the fact of the matter is they're sending down the filleted weight that's worth something.

An example of that is the pickerel prices. Pickerel's the mainstay up in where we're from, in the midwestern part of Canada, and this fish is selling at anywhere from $25 to $35 a kilogram in Safeway stores and Loblaws and such. The fishermen currently in Manitoba are getting a little more than a dollar a pound for that fish. There's something wrong with this. I know Safeway doesn't put that much of a hit on these fish in percentage points. What happens to the fish is that the fishermen get a buck for it, a buck and change, they send it on down, and where the profits go no one really knows. The corporation doesn't show it, so no one really has a clue what's going on and where this money's going. But there is a heck of a disparity in the prices between the fishermen and the market.

I'd like to bring to you to the folder I presented you with, with my paperwork here. If you take a look at the very beginning, you'll note that there's an Arthur Andersen report. This was put together after my company spent tens of thousands of dollars trying to get into the fish business, trying to take the fish species that the corporation didn't want. One of them happened to be burbot, and believe it or not, it's a codfish; it's an inland freshwater codfish. After a couple of years of going up and trying to market this product, we basically got shut down, and the reasons are here. Arthur Andersen gave the reasons why we weren't succeeding. I'd like to just comment on a few of these.

If you take a look on page 2 of this Arthur Andersen report, you'll see three points at the bottom. It starts off: “The Real Canadian Superstore has introduced maria'— or freshwater cod —“as President's Choice `Fresh water Cod' in its Ottawa and Quebec stores from December to April.” It took a year and a half for me to develop that market with Superstore, going back and forth to Toronto, spending a lot of money. One Superstore was offered a price by me, which they accepted, when I had to go off and get a special dealer's permit from the corporation. The corporation found out who my market was going to. They automatically got somebody in Superstore and low-balled my price.

There's no way on God's green earth that this corporation made any money on this fish. They did it to spite anybody in the industry who's trying to do something on their own. And basically they did a really good job. They brought my price down to a point where I just couldn't make a profit, and our company subsequently went out of business.

• 0935

We did go off to try to find some other markets. You may note that we had one in British Columbia and the Washington state area. We also went to a federated group of companies out of Chicago. They did about $11 billion a year, and they have 30,000 member stores. They were interested too.

We couldn't endure what was going on with the corporation. Any time we did something, they would seem to get the advantage because they knew who we were dealing with. They'd contact them and circumvent us.

Here's another problem we had. The former chairman of the Freshwater Fish Marketing Corporation went to the fishermen's meetings up in our Métis community. This is a community, by the way, where one of the founding Fathers of Confederation, Mr. Louis Riel, was from.

We had this little fish plant there. Maurice Blanchard, who was the chairman, went in and told the fishermen that they weren't going to pay them. He said that we were basically a bunch of shysters and crooks. That's as close to slander and libel as you want to get.

They basically took us right out of business. What I'm saying here is the truth.

The next thing I want to get to is two other papers, which are the two other documents here. You'll notice that the National Arts Centre and the Prime Minister's residence both sent me letters of support for coarse fish. This is fish that's currently being thrown away, as I said, in the millions of pounds.

The markets we had, again aside from these two small ones, were circumvented. Any time we went out and we gave FFMC our contacts, they'd phone our contacts, low-ball the prices, and push us out of business.

I'd like to go on a little further about FFMC and the people that help bring aboriginal companies and people like us down. If you take a look on the next page, you'll see the Privacy Commissioner of Canada. You'll note that there's a bit of a story about a number in the 709 area code, which is in Newfoundland. Right underneath it, you'll note there's a document of a Mr. Reginald E. Curé, who's a partner of mine. I used access to information to find out what was going on, what this Freshwater Fish Marketing Corporation had, and what they were doing.

I was a little stunned. Here's what they had done. I received this document from the corporation. I looked at the top of it and noticed that it was from the Department of Fisheries and Oceans, the minister's office. I looked at the time it was sent. It was January 29, 1993, at 8.25 p.m.

This document was sent to this area code number, which happened to be the old Maritime Insurance Company, which is now the American Insurance Company. Nobody at the American Insurance Company knew of this document, but it did get sent from there to the Freshwater Fish Marketing Corporation.

What I'm getting at here is that Fisheries and Oceans and their bureaucracy worked hand in hand with the Freshwater Fish Marketing Corporation in quashing any people who had anything good to do with the fishery, anything that helped out in selling fish.

You might want to take a look at the next document. I'm trying to rush through this as quickly as possible to give the other people here a chance to speak. You'll note it's from a Mr. Felix Holtmann. It was sent to Mr. Nilo Cachero.

It's basically about a document that you'll note is underneath it. It's two pages down. You'll see a document to Nilo Cachero. It has a list of people's names on it. I think there are 13 or 15 people. All these people come from private businesses in Canada and sit on a committee. One of the committee members is a former vice-president of the Freshwater Fish Marketing Corporation, Mr. Peter Smith.

What Mr. Holtmann is talking about in this letter is what Mr. Smith thinks I am. I'm just one person here who happened to get this information. There are many aboriginals to whom this corporation has done this. I can attest to that. But what you're looking at is this guy calling me, in a public domain, a scallywag and a man of zero reputation.

• 0940

How the hell is somebody like me in a private business suppose to operate when I have a crown corporation legislated by the Government of Canada to slander me and libel me? These people here, a number of whom I spoke to, wouldn't do business with me if I had $1 million in my back pocket and all the fish in Canada. They listen to a corporation. The federal government call me these names and get away with it.

I want to point out a couple more things. If you take a look at the pages following that, you'll notice a briefing note. Again, this is the bureaucracy of Fisheries and Oceans gone insane.

You'll note on the top they say that Kim Sigurdson is a Métis from Manitoba and has claimed widespread support among fisherman. I never claimed that once. I did claim that a lot of fishermen feel the same way as I do, as well as some other government officials.

If you note there, $29,000 was covered by the federal government in a project that was worth $39,000. I put the rest of that money in. That was one of the few business plans I did. We're talking about hundreds of thousands of dollars that went nowhere, because every time I tried to do something, the corporation just put me down. They'd get hold of other bureaucrats, and they all work together.

If you take a look at the bottom, you'll notice that it says “Mr. Sigurdson took this as a `slight' and complained to you and the Chairman of the Board” of FFMC. This kind of stuff was given to the Minister of Fisheries and Oceans. At the time it was John Crosbie. Later on it was Brian Tobin.

I have often wondered why Brian Tobin never made any great changes after what the committee recommended in the last go-around in 1995, but I understand now. Brian Tobin was told a pack of lies, and he sided with his bureaucracy. His bureaucracy write things to him and they're just outright lies.

There's a thing here on the second page. It says I was purporting to be a spokesman to the federal government. Every time somebody speaks on behalf of minorities or fishermen who aren't doing very well, we're “purporting” things. In other words, we just tell people things they want to hear, and we don't stand by them.

Our little fish company went out of business precisely because these bureaucrats at Fisheries and Oceans and FFMC came down on us, and I look at that as a very racist thing. Had there been a bunch of white people, this would never had happened. I sincerely mean that.

I want to go on just a little further. On the second page, you'll note that the national chief at the time, Ovide Mercredi, supported what we were trying to do in trying to get the Freshwater Fish Marketing Corporation to leave small companies and aboriginal communities alone so they could create their own jobs and do things. We don't want to break any laws. All we want to do is process fish in this country. All we tried to do was make a buck and employ people— to employ our own people who are suffering from 80% and 90% unemployment. If you read on a little further, you'll note that didn't happen. We got pushed out of business.

In finalizing what I'm saying, I've one other thing at the very back of the documents here. Just before he came down with his decision, Mr. Tobin met with me in Winnipeg. He said, “ Kim, I have to tell you something. I have over 300 letters from fishermen, and none of them support what you're saying. They support the Freshwater Fish Marketing Corporation.”

Well, this last letter here is documented proof. The Freshwater Fish Marketing Corporation confirms that they assisted in getting the postage, paying the postage, and getting the letters out. And you'll note that Mr. Popko says there was nothing improper done by this. Well, had I known that we were in a popularity contest, I would have asked the first nations and Métis fishermen to write in. As 70% of 35,000 fisherman, we would have outdone those 300 letters in a big way.

I want to make this clear to you. When you go to Manitoba and you hear from some of these fishermen, remember all the fishermen who haven't got the goddam money to come down and meet with you and tell you exactly how they're suffering. You're going to meet people from fisheries that are close by and accessible. The problem is the fishermen I work with are in places they can't even afford to come from. They can't even afford to get on an airplane, let alone get on a phone to somebody.

• 0945

I just wanted to point that out to you. If you're talking to these people, remember one thing. It's not everybody. There are a lot of other aboriginal fishermen in northern communities, somewhat like Island Lake, where you saw them. These people don't have a dime. I think you might recall that at that point in time, these fishermen weren't making more than $5 or $6 an hour, if that.

In closing, I have one more thing to say. People say to me, “Are you angry? Are you frustrated?” As an aboriginal and seeing the way the racism has run through these departments— and it is racism —I had to find out who these bureaucrats were who were working with FFMC. You'll note that I used access to information a number of times to find this out.

I have a stack of papers here. These are phone calls made from Freshwater Fish Marketing Corporation to the Department of Fisheries and Oceans. Thousands of phone calls— thousands —and it's only a one-way street on this thing. This isn't from Fisheries and Oceans to FFMC. This is just one way.

I took a look at these numbers. There are only three or four bureaucrats who work with Freshwater Fish, and they, believe me, helped Freshwater Fish in every way and every step along the way of putting down people like me and aboriginal people across western Canada.

I guess I'm through. Thank you very much for your time.

The Chairman: Thank you. We'll move on.

You're correct, I think some of us are still around from that last committee meeting, which, as you pointed out, went up into those northern areas and Island Lake. The amount of discards of whitefish ran into about 90% of their catch, and it was thrown into the woods.

We'll go now to Rick Hay, who is representing the North West Co-operative Fisheries Ltd. Mr. Hay is the general manager.

Mr. Rick Hay (General Manager, North West Co-operative Fisheries Ltd.): Good morning.

Honourable members, on behalf of the commercial fishermen of northwest Manitoba, we wish to thank you today for agreeing to meet with us in the midst of what we consider to be an emergency in the inland commercial fisheries, presently under the mandate of the Freshwater Fish Marketing Corporation. Ours is an emergency that in the very near future will affect the entire aboriginal populations of seven northwest communities in Manitoba, unless we act now to ensure this does not happen.

Commercial fishing in our corner of the province is very important, as it has been a way of life and a livelihood for commercial fishermen for many, many years. Without the commercial fisheries, the seven northwest communities would have no industry other than welfare. In the community of South Indian Lake alone, during the 1997 open water season, 202 people were employed in the commercial fishery, either as fishermen or fish plant workers, out of a total community population of 1,005 people.

This industry, livelihood, and way of life will end in the very near future, as the returns on fish sales through the Freshwater Fish Marketing Corporation have reached the actual cost of fish production. The average commercial fisherman can no longer see daylight at the end of the season.

Our major problem is whitefish, which represents in excess of 80% of our annual fish production. Commercial fishermen's returns and sales of whitefish to FFMC have really not changed in 25 years, yet our cost of production increased steadily in that 25 years, which brings us to the problem we have today.

Fishermen feel they are wasting their fish resources to a marketing board, with little or nothing in their pockets at the end of the season to show for their efforts. This way of life is very important to our fishermen. Fish resources are strong and healthy. However, without an economic return, it is only a matter of time before the commercial fishery and infrastructure are gone, with rebuilding in the future probably cost-prohibitive.

Because we live or die with whitefish prices offered by the FFMC, we have been busy during the past four years trying, on our own, to add value to the whitefish— to somehow increase the returns to fishermen to offset our high operating costs and low returns.

• 0950

First of all, four years ago we saw value in whitefish eggs as caviar. At the time, the FFMC had dropped the caviar business, telling fishermen that the market had dried up and there was no future in the fish egg business, and that as a result they were not buying eggs from any commercial fishermen anywhere.

At that time, our association applied to the FFMC for a long-term special dealer's permit allowing our association to purchase whitefish, lake trout and tullibee eggs directly from commercial fishermen in the provinces of Manitoba and Saskatchewan and market them unrestricted anywhere in the world. The permit was issued by FFMC only because it had completely dropped out of the egg business, therefore it had no real reason to deny the permit.

Four years later, we have developed a whitefish, lake trout and tullibee caviar that is second to none in terms of quality and colour. In addition, solid, well-paying markets have been developed in the U.S., Canada and northern Europe that we can never hope to fill in the foreseeable future.

Our caviar business generates approximately 30,000 pounds of processed, packaged and ready-to-eat caviar, with an increased annual value of $250,000 to our whitefish producers. Strangely, after four years, our main competition in the caviar markets is the FFMC, who, following our entry into the business, came back in a major way.

Secondly, the FFMC is today selling the majority of whitefish in the whole, fresh and frozen form, lumped together from various lakes as export continental or cutter whitefish. Our market research carried out for our study indicates that buyers of FFMC whitefish have come to expect an inferior whitefish in terms of quality, colour and fat content, and have labelled such whitefish in one category, and that is quite simply “Canadian”, with a low-end wholesale price, as compared to Lake Superior's with a high-end value. LS's or Lake Superior's are any whitefish produced in the Great Lakes.

The majority of whitefish produced in the northwest corner of Manitoba are from South Indian Lake, which our market research, which includes distribution of a lot of samples, has shown compares closely to LS in terms of quality, colour and fat content, and will in time be close in terms of acceptability in price.

We have had a lot of discussions with the FFMC concerning a small-scale, fresh whitefish filleting operation through our plant located in Leaf Rapids, Manitoba, as we have determined through market research that a quality value-added market is available for this product direct to market. The response, regardless of the idea, has always been negative, and the answer in the end has always been no.

In view of the attitude of FFMC over this whitefish issue and our desperation to preserve a livelihood in commercial fishing, our association decided approximately two years ago to answer one basic question about the northwest Manitoba fishery: is the FFMC doing the best possible job in terms of returns to our commercial fishermen, or can we do a better job on our own?

We decided to study that question very thoroughly and be prepared in the end to accept the study's recommendations. If at the end of the study it was determined that the FFMC is the only way, our industry is very short-lived. If at the end of the study and business plan it was determined that earnings to our commercial fishermen would be increased outside of FFMC, then we would pursue it until it happens.

Part of that process involved meetings with organizations like MKO in Thompson, who in turn had meetings with the Minister of Natural Resources for the Province of Manitoba in February 1996. At these meetings the honourable minister indicated that if a sound, long-term business plan could be developed that showed that commercial fishermen could do better outside FFMC and if the plan was fully supported by the commercial fishermen, the province and the honourable minister would take to the federal government the request for withdrawal from FFMC.

• 0955

Today our study and business plan have been completed for the north-west fishery, from lake to market, by the consulting firm of Jerald S. Goldenberg and Associates of Winnipeg. Our group was actively involved in this process, especially in the marketplace. After careful review, we have become very comfortable with the report and the business plan, which indicates beyond a doubt that we can do better on our own after adequate provisions for contingencies.

Will there be start-up problems? Yes. Will there be risks? Yes. Will we be better off as commercial fishermen in the end? We believe so, as the alternative with FFMC, we believe, is short-lived.

The completed business plan was presented to the honourable Manitoba Minister of Natural Resources in June 1997 by our group in Winnipeg. The response to our plan was very positive, with the honourable minister agreeing to commence discussions with his federal counterpart, the Honourable David Anderson, in Ottawa concerning our plan and our wishes to withdraw from FFMC and its corresponding act. As of this date we have had no response.

One further question we wish to address today is, why only the northwest corner of Manitoba? We have an organization of commercial fishermen known as North West Co-operative Fisheries Ltd., which represents all commercial fishermen in the seven northwest communities, who are unanimous in their desire for change to preserve their industry. We have never and will not go into other areas of Manitoba and try to impose our wishes on other fishermen or organizations who may or may not be content with the FFMC. Our only advice to fishermen, if ever asked, would be to study their situation very carefully before they ask for change, because things could get worse.

In our situation what we don't want are more meetings and conferences to discuss our problem. We know our problem; we have studied our problem and have come up with a solution that we want to see implemented as soon as possible. We have no intentions of having any further direct discussions with the FFMC on this issue, as there is nothing further to discuss.

Furthermore, we have chosen until now not to argue our situation through the media, but rather have developed a plan on our own, after careful study, that we wish to initiate. Strangely, our plan falls in line with what the FFMC was created to do, and that is to increase returns to commercial fishermen.

On behalf of the commercial fishermen I represent today, thank you for the opportunity to speak to you about an industry so vital to the aboriginal commercial fishermen of northwest Manitoba. Thank you.

The Chairman: Thank you, Mr. Hay.

In MKO in Thompson, what does MKO stand for? Is that a company or is that a—

Mr. Rick Hay: MKO is an umbrella aboriginal organization in Thompson, Manitoba, that represents 26 native communities in northern Manitoba.

The Chairman: Okay. Thank you.

Now we'll hear from Karen Olson, who is a commercial fisherman.

Ms. Karen Olson (Individual Presentation): Thank you. I am a commercial fisherman. My three brothers are commercial fishermen, as is my father, my mother, and my uncle. We are a third-generation commercial fishing family on Lake Winnipeg. We fished in Iceland before we came to Canada.

My father was one of the founding members of the Freshwater Fish Marketing Board. We ourselves are former agents of the Freshwater Fish Marketing Board. We supported the board initially, but we feel it's time for a change.

Because prices paid to fishermen are generally stagnant or dropping, we cannot afford to ship our fish to the marketing board any more. Freshwater Fish tells us how much we'll be paid for our fish, they tell us what species they'll buy, the provincial government sets the quotas, and the result is a fixed income to commercial fishermen in Manitoba that is below the poverty line.

We are new-generation producers. We feel we can do a better job marketing our fish. We feel we can increase our returns. We have computers; we have fax machines; we have cell phones.

• 1000

We question why the federal government is in the fish business. We see the federal government showing leadership in getting out of businesses they don't belong in. I have seen Prime Minister Jean Chrétien on Pamela Wallin Live saying he hates fish, and wondering why we are in the fish business.

I agree; why is the federal government in the fish business in the prairies? How can the federal government say to us as fishermen that a fisherman north of Kenora can sell his fish to the highest bidder while a fisherman across the border in Manitoba cannot? We buy fish from fishermen in Ontario. I can take that fish, add value to it, and sell it to the United States, but I cannot sell my own brother's fish except to the corporation.

The federal government won't buy— this is one example —small goldeyes. I don't know if you've heard of a Winnipeg smoked goldeye, but it's quite a delicacy. We take the small goldeyes that are being thrown away, smoke them, and sell them locally.

We get requests all the time. We had a request just a week ago from a chef in Ottawa asking whether we could ship our smoked goldeyes to a restaurant in Ottawa. No, we cannot. We are not allowed to sell our goldeyes outside the corporation, but the corporation will not buy these small goldeyes. So we either throw them away or we do what we can.

We are pickerel commercial fishermen. We can sell pickerel to the corporation, but I cannot sell pickerel to the restaurant across the street from me for an international convention of Americans. But I can buy pickerel from Poland, which I've done. I can sell Polish pickerel in Winnipeg to restaurants and supermarkets, but I cannot sell my own pickerel.

The same situation happens with whitefish. We are also commercial whitefish fishermen. We fish in the south end of Lake Winnipeg. We also have licences that permit us to fish whitefish in the north end of Lake Winnipeg. I can buy whitefish from Ontario, add value to it, and sell it anywhere in the world, but I cannot buy my brother's whitefish and do that. I cannot buy whitefish from Rick's group and do that. We just throw it away.

I think this is inconsistent with what Canada has already accepted with regard to free trade. I don't think the government meant to be so restrictive in its policies when it comes to fish. We would like more latitude to sell our fish in Manitoba, Canada, and of course the United States.

We would like to be able to add value to our catch and increase our income. We would like the federal government to give us that latitude by introducing a dual marketing system that we can sell outside the marketing board or give us an exemption like the Island Lake Co-op has.

We have a dual marketing system for the hog industry in Manitoba, and it's working very well. The hog marketing board is still successful and the producers are successful, so I think there's room for both.

I think that's all I'll say today. Thank you.

The Chairman: I think you put it very well.

Ms. Karen Olson: I'm very glad to see Gimli on the agenda for the committee in May. We certainly will have some fishermen there. Hopefully, my father will attend. He's 81 years old, and he has just recently retired from the fishing industry. He has a wealth of experience. I wish I could have brought him today, but he couldn't travel, as his health is not good. But he will certainly be at the Gimli meeting.

The Chairman: And as you mentioned, he's one of the founding people of the Freshwater Fish Marketing Corporation.

Ms. Karen Olson: That's right. I think we thought that was the way to go 25 years ago. I think, in theory, a central selling desk to export our fish and give us higher returns should have worked, but it doesn't seem to be working now.

The Chairman: Okay, if we could now go to questions, I have indications from Mr. Hilstrom that he wishes to ask a question. Then there's Mr. Bailey as well, and Mr. Stoffer. I wonder if we could go to perhaps Mr. Duncan, or does Mr. Duncan wish to move to Mr. Hilstrom? Mr. Hilstrom, Mr. Stoffer, Mr. Bailey, and then Mr. Easter. We'll go that way.

So we'll go to the Reform party. Mr. Hilstrom.

• 1005

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr. Chairman, could you give me an idea of the amount of time that I have? There is a large amount of information to question about, and I would like to just hit the main points if I have an idea of how much time we have left.

The Chairman: Let's try to do it this way: ten minutes for each questioner. Normally for the first questioner from Reform we stretch it to twelve or thirteen, and then we limit it to ten after that. Is that appropriate?

Mr. Howard Hilstrom: Yes, although my question isn't in regard to the fact that we should be equal or unequal or whatever. It's just that I want to make sure this important subject is covered properly, so I'll get right to it.

The Chairman: Yes, since you were one of the first people to suggest that we go this route and that we make sure we go to Manitoba.

Mr. Howard Hilstrom: Thank you very much.

The inland fishery is very important to the economy of the prairies, and certainly of Ontario and the Northwest Territories. I guess the first thing we'll clear off right away is if you are still a member of the Freshwater Fish Marketing Corporation, Karen, either as directors or in any other position.

Ms. Karen Olson: No, we're not.

Mr. Howard Hilstrom: Do you have any opinion on the current operation of the FFMC by the new chairman?

Ms. Karen Olson: Well, they seem to be floundering. Last year they barely broke even. This year I understand they're running at a loss. They don't seem to know what direction they're heading in. All they tell us is that they can't sell our whitefish, they can't sell this, they can't do that. We're just asking them to let us do it, then.

Mr. Howard Hilstrom: Okay, that's fine.

Mr. Sigurdson, in comparing the Canadian Wheat Board to the Freshwater Fish Marketing Corporation, I think we have to be a little judicious in the use of figures and what not there. We're talking about a $6 billion industry as compared to a $32 million. The figures in the last 1996-97 report of the FFMC indicate that in 1995-96, $47 million worth of fish were sold, and in 1996-97 it was $43 million. You're using a figure of $32 million. Are the FFMC figures correct in their report, or do you feel they're maybe not correct?

Mr. Kim Sigurdson: I have been told those numbers are cooked, fudged, whatever they are. I have a hard time answering that question. When you have the Auditor General of Canada looking over their books, I have to give the guy some credit—

You're asking me if those numbers are right. I don't know if they're right, but John Crosbie wrote me a letter telling me that “Freshwater Fish Market Corporation has paid on an average over the last five years”— and that was in 1992, so I'm going back a little —“some $32 million for 3,500 fishermen.” I'd be stunned to find out that the Freshwater Fish Marketing Corporation has made more money in the last couple of years than they did in the early 1990s and during the 1980s, which was their heyday.

Mr. Howard Hilstrom: Originally, the FFMC was set up because the fish buyers were believed to be paying very low prices for the catch. That was the original purpose of the FFMC, as I understand it. In your opinion, what has changed to now indicate that fish buyers— and we would be going back to that —would be able to pay a better price? Has something changed, or is it—

Mr. Kim Sigurdson: Yes. I think we can all agree the world has changed in a very dramatic way. Free marketing, supply and demand, has taken over. Where we used to have a supply management system set up for almost everything in Canada, they're pretty well gone by the wayside.

I guess another thing that McIvor looked at when he put the Freshwater Fish Marketing Corporation in motion was the aboriginals in these communities, and he assumed that maybe a lot of them weren't educated enough to take care of their own finances. Now, if that was the truth back in 1968-69, it's not the way it is any more. The aboriginal communities across northern Canada, and across Canada period, are reaching a higher education attainment level than ever before.

To answer your question, I believe they were trying to protect themselves from themselves, really. If somebody comes up from the United States and wants to buy fish right now, I can assure one thing: they're paying a hell of a lot more than the corporation is at this point in time, and they're not asking us to throw fish away.

• 1010

Mr. Howard Hilstrom: Yes. So the price discovery mechanism, where there is no commodity exchange, would be through individual fishermen or cooperatives dealing directly and trying to establish or determine price.

Mr. Kim Sigurdson: That's correct.

Mr. Howard Hilstrom: Okay. The other area that I would just like to quickly touch on is one that Mr. Hay spoke briefly about. It's this idea of having another processing plant, of additional processing plants. I know there originally was one at Flin Flon, but is there currently a proposal for a coarse fish processing plant in Manitoba? Possibly Mr. Holtmann, who was going to be here, is involved in this. Is there such a project under way?

Mr. Rick Hay: Part and parcel of our plan— this plan —involves using an existing fish plant that was built in northern Manitoba in Leaf Rapids in 1972. The province spent $1 million there building a fish plant to process fish, a fish plant which, as of today, has not processed one ounce of fish. The building is there and the equipment is there. We're trying to turn it around and start using that building for what it was designed to do.

Mr. Howard Hilstrom: To process all fish? Pickerel, whitefish, including coarse fish—

Mr. Rick Hay: We want to throw absolutely nothing away. Absolutely nothing.

Mr. Howard Hilstrom: I know that's what you want, but is that what the proposal is? To process all fish?

Mr. Rick Hay: The proposal is to process all fish, and in fact we developed markets for all fish.

Mr. Howard Hilstrom: Karen Olson, possibly you can comment on this. The St. Laurent Métis— and Kim Sigurdson you could maybe comment too. There was a proposal and funding went to a coarse fish processing plant there. Can you explain what happened to that or why that didn't go ahead?

The Chairman: Before you answer the question, Mr. Hilstrom, I wonder if, for the viewers, because this is being televised, one of you could simply explain what coarse fish are.

Ms. Karen Olson: Coarse fish are non-quota species in Manitoba. Coarse fish consist of mullet, pike, carp, freshwater cod, burbot, silver bass and white bass.

A voice: Whitefish?

Ms. Karen Olson: Whitefish is a quota fish. It's not a coarse fish.

These are fish that Freshwater doesn't necessarily buy. These are fish like silver bass, let's say; on the lake we throw thousands of pounds away. That's coarse fish.

Mr. Howard Hilstrom: Thank you, Ms. Olson.

My question then, of course, gets back to the plant that was originally planned. And I believe equipment was purchased for that Métis plant up in St. Laurent. Do you have any comment on why that market didn't develop?

Mr. Kim Sigurdson: Again, what you're reading, I guess, isn't perfectly clear. The fact of the matter is that we didn't get a dime from the government. We got money to put together a business plan. Then we paid another $5,000 or $10,000 to Arthur Andersen to tell us what we were doing wrong. Basically they said that the thing we were doing wrong was being in the fish business when there's a crown monopoly running it. We have markets for fish, but in order to get the fish to the marketplace we would have to go to the company's door to ask them if it was okay to sell to that guy. End of story. They'd phone them up and say, “Hey, we have a better price and a better deal”, and we'd be out of business. That is the truth.

Mr. Howard Hilstrom: Thank you. I'll pass this on now so that others have lots of time.

The Chairman: You wanted Mr. Duncan to do a clean-up question within your time period.

Go ahead, Mr. Duncan.

Mr. John Duncan (Vancouver Island North, Ref.): No, I'll wait. Mr. Bailey—

The Chairman: No. We have to go—

Mr. John Duncan: I'll wait until the full round.

The Chairman: No. We have to go to Mr. Stoffer, Mr. Duncan, and then back to Mr. Bailey for his full round.

Mr. John Duncan: Okay.

The Chairman: Did you want to clean up? You have two minutes left in your time period.

Mr. John Duncan: Give it to Mr. Bailey when it's his turn.

The Chairman: When it's his turn? I don't know if we can do that.

Mr. Stoffer of the New Democratic—

Mr. John Duncan: Okay, then, let me take my time now.

The Chairman: I knew Mr. Duncan was going to come back.

Some hon. members: Oh, oh.

The Chairman: Mr. Duncan.

Mr. John Duncan: Somebody else may ask this, but am I correct when I say that what you're really asking for is a change to the legislation? In order to do what you want to do, you would need a change in the federal legislation that creates this monopoly for the Freshwater Fish Marketing Corporation. Is that the bottom line?

Ms. Karen Olson: That would be ideal.

Mr. Rick Hay: There's one little section in the act. It would be quite simple to change it if we were to just remove that one sentence that says “the sole buyer and seller of fish”. Then we'd basically get into a dual marketing system. Quite frankly, we would like to see the marketing board stay. We're not advocating getting rid of the marketing board, but we do think it would be a healthy environment to have both.

• 1015

Mr. John Duncan: For how many years has this been requested? This is certainly not the first time. Am I correct in that?

Ms. Karen Olson: It's been escalating over the last five years, for sure. We would ideally like to have the legislation changed. If we were to receive a three-year exemption, like the Island Lake Co-op received, we would still be reluctant to invest $2 million or $3 million in a plant only to have that exemption not renewed.

We would like to invest money in a plant, and we would like to expand, but we'll only do so if the legislation is changed.

Mr. John Duncan: Has the three-year review been done on the exemption?

Ms. Karen Olson: Their exemption is up September 30, 1998. My understanding— and I work with that group, Island Lake Co-op —is that they will be applying for a renewal, or they want a permanent exemption.

So there's no turning back. They're quite happy with the way things are going.

Mr. John Duncan: Thank you.

Mr. Kim Sigurdson: If I could, you asked the question of what we would like to see. There are three different people here. I want to make it very clear that I'd like to see them totally out. Some people want dual marketing. You can't have somebody saying one thing and then doing another. They're either out or in. If fishermen choose to buy that plant and sell their fish through it, that's fine, but the Government of Canada should be out of the fish business.

Thank you.

The Chairman: Of course, when we get into the legislation, the Freshwater Fish Marketing Corporation can issue, under their present legislation, certain abilities to issue permits. But then again, that's a whole new question, I'm sure you all agree, because if you don't have unlimited rights indefinitely, there's not much good going to a bank and saying, well, it can be shut down at any moment in time. But we'll get into that under the legislation.

I want to go now to the New Democratic Party of Canada. Mr. Stoffer.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Thank you very much, Mr. Chair, and I thank all three of you for your fine presentations this morning.

I can certainly appreciate and understand the frustrations you have with the bureaucrats, trying to figure out who they are. We're working on that right now, as we speak. One of our recommendations in the east coast report was to have a look at these bureaucrats and to see who and what they are, and what they're doing.

I find it amazing, simply amazing, that a government would write a slanderous letter such as this one, calling you a scallywag. Have you taken them to court at all?

Mr. Kim Sigurdson: We'll be taking them to court.

Mr. Peter Stoffer: You will be. Boy, they'll be busy in court now, the DFO, with all their various cases.

I would like to know, for the record, how many tonnes of fish are thrown away every year in Manitoba. Just give me a ballpark figure, because this is scandalous.

Mr. Rick Hay: Ballpark figure? You're probably talking 30% in excess of what is being produced as marketable fish.

Mr. Peter Stoffer: How many tonnes?

Ms. Karen Olson: I'll give you one example, a fisherman we work very closely with. Every day this winter— every day for probably 90 days —we have thrown away 1,000 pounds of silver bass on the ice.

Mr. Peter Stoffer: What would that market value be if we got rid of the FFMC and you sold it yourselves? What would that be in terms of income?

Ms. Karen Olson: I feel that particular fish is worth between 25¢ a pound and $1 a pound. We've been approached by a group in LA and we've been approached by a lot of Asian interests. It's a fish they seem to like. So $1 a pound for silver bass would be a godsend, just a godsend.

Mr. Kim Sigurdson: I had exported some silver bass, right from where Karen's family is from, three or four years ago, out of that St. Laurent plant, and we got $2.25. That's what that fish was worth to us when we sold it.

Ms. Karen Olson: Currently, FFMC does not buy that species.

Mr. Peter Stoffer: I guess my concern would be also the sustainability of fishing on Lake Winnipeg and the other lakes. If we got rid of the FFMC, or it was changed, or we had a dual market, are there assurances from the three organizations here today that you could fish that resource in a sustainable, long-term manner where, say, Kim, you wouldn't be competing against Karen, and Karen, you wouldn't be competing against Rick? Because then it would become a Pac-Man society, where the strongest survives and the other two may fall off.

• 1020

Mr. Kim Sigurdson: Well, the government has quotas, and the Manitoba government enforces these quotas. Karen's family has certain quotas. Mr. Hay's group has different quotas. It's nothing like the east coast or the west coast, where somebody can come in and fish out a certain area.

There's a black market, of course. Will that black market get bigger without FFMC? I kind of doubt it. When you think that they're paying a pittance right now for their fish, and a guy can go down the street and sell it to his neighbour for five or six bucks a pound, I think there's a fair amount of black marketing right now.

Mr. Peter Stoffer: I'd like you to comment on the recent appointment of Mr. Ron Fewchuk. We understand that his appointment caused quite a stir in Manitoba. I guess the last question I have is why? Why does the FFMC— If your father— and he gave a great presentation, so I'm really looking forward to meeting him —was once a member of this corporation, he must have high ideals and beliefs.

Ms. Karen Olson: We have been members and directors.

Mr. Peter Stoffer: It must be very frustrating for you at this time. But I guess the other question, besides the one about Ron Fewchuk's appointment, is why? You folks are professionals and you know what you're doing. In your opinion, why has this direction happened? What was the turn?

Ms. Karen Olson: I don't understand the question.

Mr. Peter Stoffer: You were a member of the FFMC for obviously good reasons, but now you are basically saying you want out. Why? I know the frustrations that you have, but what happened to change the attitude or mentality?

Ms. Karen Olson: It's economics. We're going broke. We have to do something to survive.

Mr. Peter Stoffer: But why would the FFMC do this to you? You were called a scallywag. Besides the corporation not liking you— they don't like me either; not the FFMC but the DFO, but I can appreciate that because we attack them all the time —there has to be a reason as to why they're doing this. Is it selective?

Mr. Kim Sigurdson: I hate to use the word “bureaucrats”, but that's exactly what these people are. If you have a Department of Fisheries and Oceans filled with a bunch of bureaucrats down the street, and you all of a sudden start taking responsibilities and duties away from them, what's the next thing that happens? They're out on the street flipping hamburgers for McDonald's. So they're all looking out for their jobs. They're trying to protect their own asses in this deal. And it's the same thing with the Freshwater Fish Marketing Corporation.

As for the thing about Mr. Ron Fewchuk, I think he was a breath of fresh air after the last two guys who ran that thing, Mr. Tom Dunn and Mr. Bruce Popko. Those guys were too rigid. When I sat there with Elijah Harper in Garden Hill and asked the president of the corporation if first nations people could sell the fish they were throwing away, do you know what he said? All he said was, “No.” He said no more than Elijah has ever said no. It was incredible.

So I think Mr. Fewchuk may have some vision. If he has any type of vision, he's going to see that what's going out there is destroying people's lives. That's what my viewpoint is.

Mr. Rick Hay: To answer your other question in regard to where things got off the rails, in my mind things have gone off the rails simply because the marketing board is trying to deal with fish today the same way it did 25 years ago. It doesn't work. There's been little or nothing done in terms of new product development or value-added products. In other words, in terms of sitting down and figuring out a way to do something additional for that fish to get a longer dollar out of it, I think they're way behind.

Ms. Karen Olson: Freshwater Fish has traditionally focused on the American market and the European market, but there's a huge emerging Asian market. That's where the fish is going to be sold. To get that Asian market, you have to have top quality. The Freshwater system doesn't provide for that.

When you have a fisherman in Great Slave Lake, Alberta, shipping his lake trout from Alberta to the plant in Transcona and it's eleven days in transit, and then you have a Chinese buyer who comes to look at that fish, he turns his nose up because it's not good quality. The system they have can't give good quality. We need to be able to move fish fast. We can move fish from Rick Hay's area to Winnipeg in six hours, and have it in LA in another eight hours. We can move fish in 24 hours, and that's what the buyers want, not eleven days.

Mr. Peter Stoffer: Okay, thank you— and I'm looking forward to that smoked goldeye.

Ms. Karen Olson: I brought some with me. You're welcome to have some.

Mr. Peter Stoffer: God love you. Thank you very much.

Ms. Karen Olson: I brought the goldeyes that we're throwing away. I thought I'd give them to you people.

The Chairman: We'll now go to Mr. Bailey, followed by Mr. Easter.

• 1025

Mr. Roy Bailey (Souris—Moose Mountain, Ref.): Thank you, Mr. Chairman.

For the assurance of the parliamentary secretary, I will not be making any allusions here, Mr. Easter, to any other government operations.

Mr. Wayne Easter (Malpeque, Lib.): I'll wait—

Mr. Roy Bailey: I have run into some luck, Mr. Chairman, in that last night we finished off a series of meetings with the Standing Committee on Transport. My luck is that at that meeting we had a very dynamic presenter, as we have here today. They aren't hiding anything; they're just laying it out in front, bang, bang, bang. They have nothing to hide, and I really appreciate that.

Having not been on the committee, though, I've been in the room long enough to find it very alarming indeed that we are actually throwing food away. On the one hand we have people standing in our chamber who talk about hunger and poverty and so on, and yet I hear of the tonnes of food thrown away. I simply cannot understand that, and I want to say this: if it has anything to do with government manipulation or a government operation or a government presence, then surely we, as government, must step back and say that it's a disgrace. It absolutely is a disgrace.

Kim, as I came in, you were the main speaker, and I found it a great relief to hear you mention that you could take the goldeye that was thrown away and re-sell it. Did I hear you say that?

Ms. Karen Olson: Do you want me to show you one?

Mr. Roy Bailey: No.

Ms. Karen Olson: I'll show you one after.

Mr. Roy Bailey: The point I make is that—

Ms. Karen Olson: I haven't created the market for it—

Mr. Roy Bailey: That's great. And Kim, you also gave us a market figure for the silver bass?

Mr. Kim Sigurdson: Yes. The Asian markets are very— the Asian guy I met, who came over here, said this was like steak to them. I took him up to see the fishing villages and to meet the first nations and Métis fishermen who were out there getting this fish, and he was really impressed. But as Karen says, you can't put it on a truck for 11 days—

Mr. Roy Bailey: It's not like selling wheat.

Ms. Karen Olson: No.

Mr. Roy Bailey: Okay. There's my first allusion. But the point I want to make is this, to all three of you: I don't see any argument among the three of you. You're basically coming from the same background. Having said that, it seems to me that what I hear you saying— and check me if I'm wrong —is that the only thing we need to do with this problem before you, which is very much part of your lives, is to have the government playing the role only with regard to the quota and not of any manipulation or corporation or anything else. Is that correct?

Ms. Karen Olson: Absolutely.

Mr. Roy Bailey: Why do you—

Ms. Karen Olson: I feel government should manage quotas because we want to make sure we have stock in the future. But I don't think the government needs to be involved in the marketing of fish.

Mr. Roy Bailey: Having said that, it seems to me— and perhaps I'm oversimplifying it —to be a rather simple matter to change. Perhaps while I'm here I'll find out why it is not a simple matter to change, but if that would bring about the solution— that's my number one point. And second, if we somehow didn't throw away and waste food in this country —it seems like this committee could solve this and could go on record as being the greatest thing since sliced bread.

Mr. Kim Sigurdson: It would be.

Mr. Roy Bailey: Wouldn't it be?

Mr. Kim Sigurdson: If you go to Ontario, where Karen was talking about, 150 miles east of Winnipeg, there is no monopoly any more. It's much the same as the Great Lakes. There are quotas the government has set, and you live and die by those quotas. When we go to Ontario, you can buy fish— when I buy fish from those aboriginal fishermen, they say they have pickerel, whitefish, trout, suckers and freshwater cod, and then they say that if I want to buy their pickerel, I have to buy everything. So that forces me to go out and find another market. I don't necessarily have a —the money I'm giving them for some

[Technical Difficulty— Editor] —but it takes a little time to work up a market. But it's being used.

Mr. Roy Bailey: With regard to my question, then, you're on the same wavelength, and do I hear you saying that each of you people finds your own market? Or does the fish marketing board find the market?

Mr. Kim Sigurdson: We find markets for the fish board.

Mr. Roy Bailey: Thank you.

In conclusion, just let me say that I have enjoyed this, and my best to you. Maybe I'll get a chance from my colleague here to get back on this, because, man, I could have some fun on this committee, and with your support, I'm quite sure I could.

• 1030

Thank you, Mr. Chairman.

The Chairman: Mr. Bailey, we're travelling out to your area and all of western and northern Canada. We're going to be passing judgment along the way on the Freshwater Fish Marketing Corporation in the report. You're welcome to join us anywhere along the way.

You have three minutes left. Mr. Duncan has asked for two of those three minutes, and then we'll add on one minute to the Liberal side.

Mr. John Duncan: Thank you, Mr. Chair.

I think there's a very important thing happening here. I know in my riding— I'm from Campbell River, the north end of Vancouver island —we have about half of the shellfish aquaculture business in the province. As well, we have a lot of the fin fish that's grown.

What we have there is basically live delivery to the processing plant. These products are in transit. There's really no inventory. They're in transit from live delivery within, say, four hours maximum, with delivery on the same day.

This is what you talked about, Mrs. Olson.

They're going to very discriminating markets in Asia, in Seattle, Portland, Los Angeles, San Diego— those types of destinations. The plant conditions are hospital laboratory conditions. This is something that has a whole different mindset. This is something that's developed recently. You talked in terms of a five-year timeframe. Similarly, this is not value-added any more, this is standard operating procedure. This is the standard way to market.

That, in my view, is exactly what you're asking for. Like you, I don't believe government is capable of operating in that environment, nor is that discretionary or wise or good use of government priorities and facilities. I say all that because some parts of the world are already there. I'm talking about parts of the world right here in Canada. We don't have the marketing corporation circumstance that you have.

That's not a question, that's a comment. I wanted to put it in there just to indicate the positives. We do have some bureaucracy problems associated with all of that, but that's not to do with the marketing so much as the other aspects of the business.

Thank you for your presentation. You know philosophically where I'm coming from, certainly.

The Chairman: I think everybody does, Mr. Duncan. That's why you wouldn't give your two minutes to the NDP.

Some hon. members: Oh, oh.

The Chairman: We'll go now to the Parliamentary Secretary to the Minister of Fisheries and Oceans, and then to Mr. Carmen Provenzano.

Mr. Wayne Easter: To start, I want to clarify a point from Mr. Bailey. I am a very strong believer in marketing boards and in single-desk selling, especially as it relates to the Canadian Wheat Board. The Canadian Wheat Board is different from the Freshwater Fish Marketing Board, and of course deals with a different product. Clearly, it has been able— the evidence is there —to maximize, over years, returns back to producers and in that globalized market to see that Canada's a major competitor, to see that we do well in that marketplace.

That doesn't necessarily mean the same thing applies in terms of experience with the Freshwater Fish Marketing Board. I don't know at this moment. We're going to check that out.

You said, Karen, near the end of your remarks, that the central selling desk to sell your fish— it should work, but obviously, from listening to you today, it doesn't seem to work. What do you think is the reason for that?

• 1035

Ms. Karen Olson: Quality of product. The current system that Freshwater has is not able to deliver what I call a fresh product. I have purchased fish product from the marketing board and I've thrown it in the garbage. There's no quality; it's rotten.

The marketing board, for example, is closed on weekends, so what do we do with our fish? We ice it. The longer it sits, the worse it gets. Sometimes it's six days old before it's shipped to the marketing board.

Mr. Wayne Easter: There's no question that—

Ms. Karen Olson: This is not like wheat.

Mr. Wayne Easter: No, it's not like wheat, but we have other marketing agencies as well.

I'm a dairy producer. Dairy is as volatile a product to sell and process as is fish. We have different kinds of marketing boards by which producers have done well in terms of the marketing of dairy and dairy products.

In any event, there's no question that the bottom line in today's marketing is that quality sells and if you have no quality you're not going to be in the marketplace. What I'm wondering is, does the Freshwater Fish Marketing Board have to be changed?

On Kim's point, he talked about a dual marketing system. I just want to point out, Kim— and I'm not going to get into an argument on this —that you can't have a dual marketing system and a single-desk system working hand in hand. You either have a dual market or you don't.

Mr. Kim Sigurdson: I agree with you.

Mr. Wayne Easter: These fellows across the way like to believe that you can have both systems operating hand in hand. You can't. You either have a single-desk selling system or you have a dual marketing system. You can't have both working at the same time. It's impossible.

Mr. Chairman, I want to hear what the Freshwater Fish Marketing Board has to say for itself. For the life of me, I can't understand why common sense wouldn't prevail. If you're discarding a thousand pounds of silver bass and there's a market for it, then why aren't we marketing it? For the life of me, I can't understand that— or the small goldeye. What's the reason given to you for not marketing the silver bass and the small goldeye?

Ms. Karen Olson: They cannot sell it, period.

Mr. Wayne Easter: They can't sell it.

Ms. Karen Olson: They can't find a market for it. They cannot sell our whitefish, either. We were paid 40¢ a pound for whitefish in the 1940s and we're still being paid 40¢ a pound.

Mr. Wayne Easter: I may be parliamentary secretary, Mr. Chairman, but I'll tell you we'll have to ask somebody from the Freshwater Fish Marketing Board to appear before us, because in my opinion that is unacceptable. We do have to find ways, and you can do it through marketing agencies, to develop new products, add value and so on.

My last question is, why can't you do some of these things in terms of marketing silver bass, adding value, selling small goldeye, as an agent of the board?

Ms. Karen Olson: We are currently not an agent of the board. I guess to do that we'd have to pay a commission to the board, which I think would take away any profit. There's not a lot of margin to move on these rough fish. We all have to work on very low profits and very low margins.

Mr. Wayne Easter: But could you be an agent of the board and do it?

Mr. Kim Sigurdson: I've never heard of that before.

Ms. Karen Olson: I've never really heard of that, to tell you the truth.

Mr. Rick Hay: I think basically what you're saying is, is there an arrangement?

In Karen's particular situation, she is in Winnipeg, the same town that Freshwater is in, in Transcona. When you're 500 miles north of that city, as we are, you sit down and say to the marketing board, we can help each other out here. We've developed a good solid market for fresh whitefish fillets. We've got the ways and means of doing things here. We can keep the family together, work out an arrangement with you where we fillet them here, we market them on our own, and we give you a fee for the privilege of being able to basically do your work for you.

• 1040

Mr. Wayne Easter: But, Mr. Chairman, if you're into what we could call an experimental fishery— it probably shouldn't be called that —like silver bass in terms of marketing it to, as you say, Los Angeles, any marketing agency that's worth its salt would say, okay, if any, we will pay minimal commission without preps, and let's see if there's a market there. You would then operate as an agent of the board in order to do that.

All you're allocated from the board in this particular instance is the authority to do such and such. I can't see why it can't be done. And they don't have to be big commissions. As you say, Rick, it's in terms of working in partnership together to move ahead. If that kind of thing isn't happening, then there's something wrong.

Mr. Kim Sigurdson: If I can add something, sir, if we try to help them market their fish and we bring markets to them— Say we wanted to be a part of it so that we could take the fish that are being thrown away. If we offer them that, they get all up in a big snit because they figure we're trying to cut into their marketing. We can do a better job.

Marketing boards don't like people who will go out to try to sell over them, whether it's the wheat board, the fish board or any board. I'm sorry that we have that difference of opinion, because I do respect your opinion, but I can say this much: if people out there want to sell something, whether they're fishermen or farmers, let them sell it.

If a marketing board is so good, people will come and support that marketing board. Right now, that fish marketing board has done terrible things to aboriginals more than to anybody else. When you get up into these northern parts of Manitoba, I guess you'll see how people are living, and I think you might have a difference of opinion.

Mr. Wayne Easter: I was going to make that point earlier— and I really don't want to get into this discussion —because you had inferred racism from DFO and from the marketing board.

Mr. Kim Sigurdson: That's true.

Mr. Wayne Easter: I disagree with your inference on the basis that I think it's a marketing philosophy. You and I may disagree in terms of how the product's marketed, in terms of whether it should be through a central agency, a dual agency, a supply management board, or whatever. But I'm telling you my philosophy in terms of marketing versus yours. That has nothing to do with racism, and I don't think racism should be implied on that basis.

In any event, to me the bottom line here is that if there is product being wasted, if there is a market for a product, there has to be some way of doing that through the Freshwater Fish Marketing Board, either with people being agents of the board or whatever, rather than this kind of situation that's going on at the moment.

I guess all I can say is that we have to look into it, Mr. Chair. I'd like to look into the possibility of doing it with agents.

And, Kim, if the marketing board has problems with that, as far as I'm concerned, that's too bad. If there's a market there, one where we can move ahead and where there can be a profit made without undermining the industry as a whole, then the marketing board should be looking into it and should be utilizing people to in fact do that.

The Chairman: Thank you, Mr. Easter.

We're now going to go to Mr. Provenzano, and then we're going to go to the Bloc.

I would also point out to members that we will be reviewing the legislation. Of course, under the legislation, yes, you can be assigned, you can receive responsibility, you can market. The problem, of course, is that at any moment in time, the board can cut that off or it can go into competition when you find the markets. You have nothing. You go to the bank with that and they just won't give you any money. I think you'll find that to be the truth.

Anyway, we'll get into that and the different options that are available when we examine it thoroughly. Mr. Easter is correct, there is a mechanism under the act whereby it can be done, but how long it can go on is another question.

Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): Some of my questions have been partially answered, Mr. Chairman, but just for clarification, is it correct to understand that all fish that are not high-grade species are coarse fish, and that the high-grade species of fish are pickerel, northern pike, trout and export whitefish?

Mr. Kim Sigurdson: Pickerel, some whitefish— because there are different types of whitefish, continental and export —and trout. But they're throwing away trout.

Mr. Carmen Provenzano: Am I correct in understanding that the silver bass and small goldeye are species within the coarse fish category?

Ms. Karen Olson: Yes.

• 1045

Mr. Carmen Provenzano: Mr. Sigurdson, you told the committee this morning that you had developed a market for what is called freshwater cod.

Mr. Kim Sigurdson: Yes.

Mr. Carmen Provenzano: That market, according to your submissions, collapsed because of meddling by the Freshwater Fish Marketing Corporation.

Mr. Kim Sigurdson: That's correct.

Mr. Carmen Provenzano: Assuming those allegations can be supported, Mr. Sigurdson, would it be of benefit to you, or would it be answering this situation, if the Freshwater Fish Marketing Board were specifically prohibited from meddling, or from getting involved in any way, in the marketing of what are coarse fish? If you can develop a market for coarse fish, would it help if there were a specific prohibition to the marketing board against getting involved in any way in the marketing of that particular species?

Mr. Kim Sigurdson: I think there's a glimmer of light there.

The secretary mentioned earlier that you can't have dual marketing and have a marketing board. I agree. Either you're a virgin or you're not a virgin. When it comes right down to it, if you take a look at the Arthur Andersen report, you will find that at the bottom of it they state that nobody should put money into a fish plant as long as the Freshwater Fish Marketing Board has its fingers on the purse strings. If I get a special dealer's licence and I take that to the Royal Bank of Canada, they will laugh at me. They will say this thing can be taken away at a moment's notice— and by the way, you have to go to them and give them your buyer. Oh, yes.

Mr. Carmen Provenzano: If it were very clear that the species of fish whose marketing was controlled by the Freshwater Fish Marketing Corporation were frozen, and these are the fish you can be concerned with and you're not to be concerned with any other species, would that kind of prohibition and clarification or just definition of the mandate of the corporation assist you?

Mr. Kim Sigurdson: I guess so. It would be a very good start, sir.

Mr. Carmen Provenzano: About the special dealer permits, I understand from the materials you provided that those special dealer permits are easily available.

Mr. Kim Sigurdson: Yes.

Mr. Carmen Provenzano: What does that mean? Does that mean you can just fill out a short application and pay a small fee and get these?

Mr. Kim Sigurdson: They don't even ask you for money for this. You just go to them, you fill out your licence, they ask you where you're sending it, and if you're lucky and they don't care, they won't phone the buyer up and circumvent you. But they will do it.

Mr. Carmen Provenzano: Is there any monitoring? Once a permit is issued, is there some kind of involvement on the part of the Freshwater Fish Marketing Corporation in the activities the special dealer permit permits? Is there any monitoring?

Mr. Kim Sigurdson: They reserve the right to come into your plant at any time, anywhere, and do whatever they want, honest to God.

The Department of Fisheries and Oceans inspectors have a job, and rightly, they come in and make sure you have a clean bill of health and you're doing things in the proper way. But FFMC also reserves the right to come into your plant and inspect things themselves. I can assure you they have gone into plants, found little things wrong, and told the fisheries inspectors, and they shut you down.

Mr. Carmen Provenzano: This is with special dealer permits to market coarse fish.

Mr. Kim Sigurdson: Yes, that's true.

The Chairman: We go to the Bloc. Mr. Bernier.

[Translation]

Mr. Yvan Bernier (Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, BQ): First of all, I would like to thank the witnesses for coming. A while ago I had to leave for a few minutes to take part in the business of the House.

• 1050

I will remind the witnesses that I had a chance to travel in the west with the former committee. I perfectly understand the situation and the frustrations the witnesses appearing this morning feel.

Mr. Sigurdson even mentioned "racism", and I think that at times he is not totally wrong. Since that situation has been lasting for quite some time and that we can see that those who are most affected by it are precisely the first nations and the Metis, one can admit that they are sometimes right to think that way.

I will try to sum up what I remember of my last trip. The witnesses may correct what I say if they find I am wrong. It might save other members time to share with them what I understood then.

The Freshwater Fish Marketing Corporation has one, two maybe three fish plants. It is a very centralized agency and they have to cover the whole western region of Canada, including the fisheries of northern Alberta and northern Manitoba. Am I right? The members opposite are faced with a very important question: it's all well to want to centralize the marketing, but how do you gather that fish to bring it to the centre?

Everybody knows that all species do not have the same value. It is easy to understand that the cost of the round whitefish, which is shipped whole and is not necessarily edible for everybody, is of little interest. One can understand that the Freshwater Fish Marketing Corporation has players everywhere, although there is a big concentration of fishermen near the plants since they can easily market their fish without complaining for the price they get for the so-called coarse species. The huge distance between some fishermen and the fish plants is responsible for the fact that they are often— if I dare use the expression —in a shitty situation because the board is not too interested in their fish. I' like Mr. Sigurdson to confirm for us what his experience was. I was part of the former committee and we really tried to put an end to the harassment by the board. However, I think that we only succeeded in helping the small village of Island Lake, if I remember correctly, in northern Manitoba.

[English]

Mr. Kim Sigurdson: Island Lake.

[Translation]

Mr. Yvan Bernier: That village can now market its fish without being bothered by the board. And what is the result? It's been a little less than two years now. Do we begin to see tangible results? Those fishermen were allowed to sell only their pickerel since the other species were not considered high-grade. It didn't make any sense.

As everybody said here, how on earth can you throw away food? It was difficult to understand, especially for an aboriginal person respectful of mother nature, that you could fish in the lakes and throw away 70 to 90% of the catch.

• 1055

The other members should also understand that when you fish, your fishing licence and your fishing gear will not enable you to fish only the high grade species. The fishing gear you are using might well make you catch other species. It's totally insane to force people to work within a completely closed system.

Last time, we made a proposal which could not be implemented. The proposal was to enable people living in isolated areas to market their fish on their own. You cannot restrict them to fishing one species only or a given species, as Mr. Provenzano was proposing. You have to understand that when you put your gear into the water, you might well catch all sorts of things.

If we enable them to be responsible for doing their own thing, then we have to let them do whatever they want from start to finish. You cannot only allow them to market the worst fish, the one hardest to market. You have to give them responsibility for the whole catch. How on earth could we tell them to send only pickerel to Winnipeg and enable them to market only two or three species?

Such a formula would have another impact on the Freshwater Fish Marketing Corporation. Thus, their production costs or the transportation costs per pound for the same pickerel would be higher because they would be sending less of them, but the plane or the truck still would have to go. If you decided to wait for a few days to reduce your costs, the board would be having a problem at the other end because the shell life would be reduced.

Earlier, we talked about the fish that was 11 days in transit. Maybe I did not understand correctly. But if such is the case, I'd like the witnesses to let me know. But if this is the situation, you can rely on me to tell the other committee members before they go or while they are travelling there.

I am usually in favour of gathering things, of having a board of some sort, intellectually speaking. But in our case, you have to take into account the hugeness of the area the board has to cover. If I may be so bold, the board cannot be up to speed in all situations. That's why I think we should have legislated provisions. If we have a hard time making room for it in the legislation, I would even suggest that the Act be repealed. Those who want to keep some kind of a board will be able to create a new board of a co-op type around the existing plants. At least the others would be able to live a decent life.

That's all I wanted to say. If I had a wrong perception of some things, I'd like you to correct me. It is very important that the other MPs go and see what's happening there. But I will repeat it, Mr. Chairman, it is very frustrating to see how long Mr. Sigurdson has been working on that issue: he's been through the Crosbie epic, the Tobin epic, the Mifflin epic and now the Anderson epic. Nothing has been solved and nothing moves forward. He has to keep coming back to repeat his story and this government is not solving the problem. He will probably have to come back in five or then years and then his children will probably come in turn. I think that the members have to understand how important this is. The witnesses did not ask for grants this morning, they only want to be able to work.

Thank you, Mr. Chairman.

[English]

The Chairman: Before we go on, I think Mr. Stoffer wanted to make a short comment or ask a question of the witnesses. Then we'll conclude, because we have other witnesses. Given that we're travelling throughout this region and that we will be examining the legislation, I'm sure there will be a very interesting conversation between members.

Mr. Stoffer.

Mr. Peter Stoffer: Thank you, Mr. Chair.

Mr. Hay, you mentioned a letter you wrote to Mr. Anderson. Would we be able to get a copy of that letter, to which you have not yet got a response?

Mr. Rick Hay: I indicated that we'd been working through the provincial Minister of Natural Resources, who in turn was to have discussions with Mr. Anderson in regard to changing legislation to allow our particular area of northwest Manitoba to leave the marketing board.

Mr. Peter Stoffer: May we get copies of that document?

• 1100

Mr. Rick Hay: Yes. There's one thing I would like to do today. If I can, I would like to leave this report with the chair. Seeing as how you are going to be coming to Manitoba in May, I want to leave a copy of this report I referred to. It's a study that we had done on our own. I'd like you to review it before you come to Manitoba, if possible. It tells an interesting story and it answers a lot of questions, a lot of the types of questions that have been asked here today, particularly in the area of rough fish.

The Chairman: Excellent.

Would any of the other witnesses like 20 or 30 seconds or a minute or so to wrap up?

Mr. Wayne Easter: On a point of clarification, Mr. Chair— and then they can wrap up —this is just for my own information, really. It's about the marketing board, which you claim markets whitefish, right? But had it never intended to market the coarse fish species?

Ms. Karen Olson: We felt that when the marketing board was created, that was the whole purpose.

Mr. Wayne Easter: Why I asked the question is that if you compare the fish marketing board to the Wheat Board— and there's obviously no comparison in terms of how successful it is —the Wheat Board markets wheat and barley; it doesn't market oats.

Ms. Karen Olson: Okay.

Mr. Wayne Easter: So what I'm wondering is why the fish marketing board can't market whitefish and leave the coarse fish to the open market.

Mr. Rick Hay: It is. As of the last round of Senate committee hearings, mullet and burbot have been what they call “deregulated”. It is a wide open market now. The marketing board does not have an exclusive on those two species. But it's very difficult to pick one of those species out and make an industry out of it without the rest to go along with it.

Mr. Wayne Easter: Okay.

Mr. Karen Olson: I think it would also be difficult for Freshwater to say they'll market walleye but nothing else.

Mr. Wayne Easter: Thanks. That's okay.

The Chairman: Mr. Hay, the reason Mr. Easter keeps making reference to the Wheat Board and so on is that he is the former president of the National Farmers Union for Canada, so he has this great interest in both fish and wheat— and oats.

Some hon. members: Oh, oh.

The Chairman: We want to thank the witnesses for appearing here today and we want to assure you that your comments will be taken into account when we prepare our report and our recommendations concerning the Freshwater Fish Marketing Board.

Thank you very much for coming here today.

The Chairman: We'll now move on to another group and we will then retire into closed session after we hear from this very important group of people from eastern Canada.

Mr. Wayne Easter: Mr. Chairman, just a point for our committee members. When are we going to deal in camera with the west coast report?

The Chairman: In 45 minutes, Mr. Easter.

Mr. Wayne Easter: So at 11.45 or 11.50 a.m. we're going to deal with that?

The Chairman: Yes, we have to do that. We've allocated 45 minutes to the next witnesses concerning the groundfish industry and other types of fishes on the east coast of Canada, and following that, we'll be going into a closed session to finish off the west coast report. And I mean “finish it off”; we have to conclude this today.

I wonder now if the Fogo Island Co-op could take the two seats in front of us, the testimony seats reserved for the witnesses.

We're now going to hear from the Fogo Island Co-operative Society Ltd. We have two witnesses here with us today, one of whom is Mr. Cecil Godwin.

Mr. Godwin is well known throughout Newfoundland and Labrador for his activities in rural communities. Some of the committee members were listening to a lecture this morning given by a person from Memorial University concerning the rural communities in the fishery today in Newfoundland and how these fisheries can survive. Mr. Cecil Godwin is somewhat of an expert on this and has attended many conferences dealing with social issues as they relate to rural communities and the problems we have in eastern Canada.

• 1105

With Mr. Godwin is Mr. Hugh St. Croix. Mr. St. Croix is well known throughout eastern Canada as a manager of fish plant operations. Recently from the Labrador coast, from a cooperative in Labrador, and now to the cooperative that is perhaps the biggest cooperative operating in eastern Canada for fish, called the Fogo Island Co-operative Society Limited, Mr. St. Croix is recognized as an expert in the operation of fish plants and in the marketing of groundfish and shrimp products.

We'll start our testimony today, Mr. Easter, with a presentation from these witnesses. Mr. Godwin, perhaps you could start, sir, and then we'll go to Mr. St. Croix. Mr. Godwin is the president of the board of the Fogo Island Co-operative Society Limited. Mr. Godwin.

Mr. Cecil Godwin (President of the Board, Fogo Island Co-operative Society Ltd.): Thank you, Mr. Chair. First I'd like to say thank you very much to the committee for giving us this opportunity to appear before you this morning.

I'd like to start off with a background on what we are and where we come from. Fogo Island is a small island located off the northeast coast of Newfoundland. It lies at the easternmost edge of Notre Dame Bay and is separated from the Newfoundland mainland by the Sir Charles Hamilton Sound. Farewell, it's nearest point of contact, is 10 kilometres south of the island, and a ferry system provides transportation to the island from this location.

Fogo Island covers an area of 282 square kilometres and is outlined by steep rocky coast and several protected harbours. This island is made up of 8 settlement areas. It has a population of between 3,000 and 3,400 people. The main industry is the fishery, with some employment outside the fishery provided by the different service industries, stores, hospitals, schools and so forth.

The Fogo Island Co-operative was incorporated in December 1967 and operated for the first time as a business in the summer of 1968. The co-op was formed at a time when the provincial government resettlement program was in full swing. This resettlement program, administered by the province but funded through the federal Department of Fisheries, had as one of its main objectives the rationalization of the inshore fishery in the early to mid-1960s.

The solution at that time was to move people from small and difficult-to-service communities into larger so-called growth centres. Island communities were high on the priority list to be resettled. In 1967, every public indication was that the people of Fogo Island were slated for resettlement. But because of the mood of uncertainty that was created by this public knowledge, some of the regular community services began to disappear from the island and privately run fish companies decided either to leave or discontinue operating their businesses.

The residents of Fogo Island, particularly the fishermen, were caught in a serious dilemma since fishing was the backbone of the economy. They knew that if they moved, in addition to uprooting their families and incurring the extra cost of rebuilding properties in new locations, they would also have lost access to their traditional fishing grounds.

Rather than going along with the government program, the communities resisted. The people of Fogo Island refused to move. They decided to stay and look at other options. The alternative to be looked at, at that time, included a different approach to harvesting. This would include building larger boats so that fishermen could go farther to sea. Processing and marketing alternatives were also studied with a view to ensuring that fishermen could sell all their catch and so that the fishery generally could be developed to include other species.

• 1110

Our co-op was formed against this background and in response to the inshore fishery crisis of the 1960s. The process used to form our cooperative has been internationally recognized and promoted as a successful community economic model. It's referred to as the “Fogo process”.

In its early years the co-op was responsible for boat building and fish processing. It built a fleet of 30 longliners and took over the processing facilities left vacant by private industry.

Today the co-op has five plants, three processing plants and two buying stations. It also has a laboratory, test kitchen, stockroom, and welding shop. It processes a variety of fish species and has annual sales ranging from $8 million to $15 million. It has a membership of approximately 600 fishermen and 400 plant workers. Owners' equity is $3 million. In 1997 its fishermen's payroll was $6.2 million and its labour payroll was $2.4 million.

The fishermen members own and operate their own fishing enterprises. The boat sizes range from small outboards to 65-foot steel boats. They harvest a variety of species, including crab, lobster, turbot, flounder, greysole, halibut, grenadier, lump roe, herring, mackerel, and squid. There are also a few other species not included here.

Despite the co-op's accomplishments over the past 30 years, Fogo Island still faces difficulties that weaken its economy. Currently the co-op, and indeed Newfoundland's entire fishing industry, are facing their greatest crisis in memory, brought on by the decline of the northern cod stocks, and an only less serious decrease in availability of other species. The crisis has created major instabilities in most rural communities in Newfoundland and Labrador. As the TAGS program comes to an end, major emphasis is being placed on restructuring of the fishing industry, reducing the number of people dependent on fewer resources. Given these events and further changes pending, this is an appropriate time for participants in Newfoundland's fishing industry to re-examine old assumptions and prepare new plans for the future.

Since 1992 the Fogo Island Co-operative has begun such a process. Several steps have been taken to try to become more informed about the state of the resource we depend on in our region.

In conjunction with the DFO science branch and HRDC, we have created an inshore fisheries database of information that dates back, in some cases, over 20 years. The database shows the pattern of fishing that took place; the types of species caught, by size and grade; the type of gear and amount used to catch it; the price paid, etc. We have also partnered with the DFO habitat branch, Parks Canada, HRDC, and the Fogo Island tourism committee to create a marine resources inventory. We also participated in the inshore and offshore Sentinel survey.

As well, we are now completing a marine information centre in Seldom, Fogo Island. This centre is meant to be an educational tool, research centre, and tourist attraction. It will provide interpretation of Fogo Island's cultural history, the Fogo Island Co-operative, the traditional inshore fishery, and interpretation of the famous Funk Islands. It will also provide marine services to the travelling public. We feel all of these activities are building blocks that will lead to a better understanding of our environment and the natural resources we depend so heavily upon.

Over the next few months public consultations will held on Fogo Island to explore the idea of establishing a pilot project on integrated coastal zone management. Many people are at a crossroads in their lives and must make long-term decisions. Plans for the future must be sustainable, broadly based, and environmentally acceptable. We must look at all opportunities available to Fogo Island: value-added production, secondary processing, ecotourism, aquaculture, resource, education, etc.

Capital investment will be necessary within the fishing industry as well as in tourism. Residents of Fogo Island, because it is an island, need to have confidence in the island's future to make such an investment. That type of confidence can only come from a well-thought-out plan that is sustainable and that incorporates all aspects of its economy.

• 1115

This brings us to the point of our presentation. Attached you will find historical landing information that outlines the diversity of the Fogo Island Co-operative's operation and that of its independent fish harvesting enterprises.

When the cooperative formed in 1967, its main objective was to diversify the fishing activity on Fogo Island, which to this day remains its primary goal. It has been the experience of the cooperative that this diversity has provided stability to the island's economy for the past 30 years.

For example, in years when the landings of a specific species were low, or the markets were weak, other species helped offset the negative impact. This was especially true throughout the past several years with the closure of the groundfish fishery. The crab operation has helped sustain the cooperative as well as its fishers and plant-worker members throughout the moratorium.

In 1998, however, we expect this situation to change. With the present financial conditions of the Asian market, recent changes in the unemployment insurance program, the end of the Atlantic groundfish strategy and no prospects of the groundfishery reopening in the immediate future, we feel we have reason for major concern.

Fogo Island is an island. Because of this, we are acutely aware of the need to maintain certain levels of population in order to continue to make the island viable. In order to do this, fishermen must be able to earn a reasonable living from the sea to support their fishing operation and obtain a reasonable income for themselves. Plant workers must be able to access a certain amount of employment in order to maintain a reasonable standard of living that will require an extended work season. As well, the cooperative must be able to remain competitive in the marketplace, with quality products, in order to maintain a viable business.

The following list of objectives needs to be met in order to achieve the results required: for fishermen, increase landings by harvesting other species; for plant workers, extend length of working season; and for the cooperative, access more raw materials, improve production facilities in order to reduce overhead costs and meet the new HACCP rules, and carry out production development in order to add value to existing primary production, i.e., crab.

In order to meet these objectives, capital will be required. Because we are a community-based business, in 1987 we made a request to the Minister of Fisheries and Oceans to provide our cooperative with an offshore shrimp licence. At that time, Torngat Co-operative and the Labrador Shrimp Company had received shrimp allocations and were reinvesting the revenue from these licences into their communities in order to provide employment and contribute to the local economy.

In 1996 the Department of Fisheries and Oceans issued a press release requesting proposals on how any increased quotas in a northern shrimp fishery could be shared. Again, the Fogo Island Co-operative made official representation to DFO requesting a share in this allocation based on our rights of adjacency and our historical participation in the Newfoundland and Labrador fishing industry as a community-based business. Again, we were not granted a share of the allocation. An allocation was provided to the St. Anthony Basin Resource Corporation because of its adjacency to the resource and the fact that it was community-based. All indications are that there will be an increase in the shrimp allocation in areas 5 and 6 in 1998. We feel strongly that, this time, we should be given access to this resource.

At the present time, approximately 10 of our independent fishing enterprises under 65 feet have geared up to fish shrimp using the otter trawl technology. Over the next few months we will carry out extensive experimental work to test the beam trawl and shrimp pot technology in our area. If successful, the opportunity will be available for fishermen using smaller boats to become involved in this fishery. If it fails, there will be a large portion of our traditional small boat fishermen who will not be able to harvest this resource.

• 1120

We would like to have the opportunity to provide an alternative way for them to participate in this fishery. If we are given this opportunity, we are certain that, over a period of time, we will be able to access a reasonable supply of raw materials to justify a shrimp operation here.

As a business, we need to build a new crab plant to meet the new processing requirements under the HACCP rules. We would like to incorporate shrimp production into this facility to help diversify our production and provide more employment. These activities require major capital investments. We would like to access an offshore shrimp allocation to allow us to carry out these activities.

The long-term goal is to secure our present supply of raw material, crab, etc., as well as shrimp, by being capable of purchasing all species that our fishermen now land; address the needs of those in our small boat sector so they may participate in this lucrative fishery; help them diversify their operations and increase their incomes; create an extended work season for our plant workers; increase revenues to the cooperative so we can maintain a viable operation; and continue to contribute to the local economy of Fogo Island.

Consider the request and rationale for access to the shrimp quota. The Fogo Island Co-operative has made a formal request to the Department of Fisheries and Oceans for shrimp allocation on several occasions. To date, it has not succeeded. It's the only community-based organization directly adjacent to this abundant resource that has not been given access. It's requesting DFO to give the Fogo Island Co-operative an allocation in 1998 that's based on the increase in quota anticipated and recommended in the stock assessment report.

The rationale for such a request is as follows. Fogo Island is an area of the province that faces many difficulties because of its isolation. In spite of this, however, it has continued to be a thriving community, providing a reasonable level of services and standard of living to its residents. This is one area of the province where the reliance on social services has been minimal because of the employment created by the cooperative.

The Fogo Island Co-operative is a community-based fish processing business that is owned by the fishers and plant workers. Those fishers and plant workers have invested $3 million in their business to date, in addition to those fishers who own their own enterprises.

The cooperative is the only employer on the island outside of the service industry. Any revenues generated through this business are used to benefit the fishers, plant worker members, and the island community.

It's similar to other community-based businesses that now hold shrimp allocations, such as the Labrador Fishermen's Union Shrimp Company Limited, Torngat Fish Producers Society Limited, and the St. Anthony Basin Resource Corporation. Fogo Island is directly adjacent to area 6 of the northern shrimp fishery, and therefore should be given primary consideration in any new shrimp allocations.

The closure of the northern cod fishery in 1992 caused the Fogo Island Co-operative and the individual fish owners to lose approximately 80% of their supply of raw materials. Since that time, they have been able to operate and maintain reasonable levels of employment through value-added crab production. This has allowed the cooperative to provide a reasonable raw material price to its fishers and maintain a significant amount of employment in the plants. We employ between 500 and 550 workers in the summer season.

The crab fishery has allowed the cooperative to remain a viable business entity, but it was unable to afford the type of the type of capital investment required to meet the new HACCP regulations now being implemented. An allocation of northern shrimp will allow the co-op to make capital investments to meet the need for crab processing, as well as incorporating a shrimp production in the same facility. This will allow the co-op to maintain the 550 jobs now being provided and extend the work season for these employees.

It will allow the cooperative to purchase all raw materials landed by its fishermen. In turn, it will secure its supply of raw materials for the present and the future. It will establish a level of raw material supply that will justify shrimp processing on Fogo Island. It will provide a secure economic base that will allow Fogo Island to continue to build a strong tourism industry that has started with the establishment of the marine information centre and marina that will open this year.

• 1125

In conclusion, in 1967 the people of Fogo Island took control of their own destiny by rejecting a resettlement program of the day and started their own fishery worker/producer cooperative. They began by building a fleet of longliners that allowed them to go farther out to sea and fish a variety of fish species. This permitted them to reduce their dependence on one species, cod, and on one market, the salt codfish market, and to develop a multi-species fish processing operation.

The cooperative has provided stability to Fogo Island's economy for the past 30 years. It would like to have the opportunity to continue to provide this stability by once again diversifying its operations by participating in a lucrative northern shrimp fishery.

Since 1987 it has requested access to the northern shrimp fishery and has to date been denied. Northern shrimp has been allocated on the principles of adjacency and community dependence, two principles that are synonymous with Fogo Island. Fogo Island is the only community-based organization directly adjacent to the northern shrimp fishery that has not received a shrimp allocation. We respectfully request your support for this initiative.

I'd like to thank you very much.

The Chairman: Thank you, Mr. Godwin.

Mr. St. Croix, did you wish to add anything to Mr. Godwin's presentation?

Mr. Hugh St. Croix (General Manager, Fogo Island Co-operative Society Ltd.): Not particularly, Mr. Chairman. I probably will as we go along, but the bottom line is that this organization is the only adjacent organization that has not been recognized over the last 15 or whatever years as far as the shrimp is concerned and it's time it was recognized, Mr. Chairman.

The Chairman: And as you say, now is the time, as you understand it, that shrimp quotas are going to increased for that northern zone. Is that correct?

Mr. Hugh St. Croix: That's correct. There was a large increase in 1997 and it appears as though there will be an increase in particular, I believe, in area 6 and area 4, or sub-area 6 and sub-area 4, for 1998. We feel that this is the time and the only time, probably, we'll get the opportunity to partake of that increase.

The Chairman: Of course, you're right in the middle of area 6. The committee, during its trip through Newfoundland, became well acquainted with the quotas that were given, the offshore quotas, to people who live in Florida and people who live in Europe, the two offshore licences given to a gentleman who they claimed was living in Florida at the time. We also were made aware of the fact that of all of the offshore licences that are presently there, some of them are very large corporation licences in the northern area.

By the way, Mr. St. Croix, the committee also met with DFO yesterday and learned about the fishing by Denmark. They call it an experimental shrimp fishery in 3-L, just a little bit to your south, because you're in 3-K in the northern cod zone. Were you aware that there was an experimental fishery in zone 3-L by Denmark? Have you ever heard of that before?

Mr. Hugh St. Croix: I'm vaguely aware of it. It is something that has been happening in recent months. I'm not very aware, though, I must admit.

The Chairman: The Danish vessel is called the Høgifossur, as we identified it. I wanted to remind members of these two facts before we go to questions. I notice Mr. Stoffer wished to put a question to the witnesses or make an observation.

Mr. Stoffer.

Mr. Peter Stoffer: I guess my question is why haven't you been given the resource? Why haven't you been given this allocation? It just begs the question as to why.

Mr. Cecil Godwin: We don't know why. We simply don't know why.

Mr. Peter Stoffer: Have they given you any written correspondence as to why?

Mr. Cecil Godwin: No, just that it's not appropriate at this time. That's the kind of correspondence we've been getting.

Mr. Peter Stoffer: Since 1986.

Mr. Cecil Godwin: Actually, I think it was 1986 or 1987 that the first proposal went into DFO for an allocation.

• 1130

Mr. Peter Stoffer: It appears from your report that you've been working very closely with DFO and the science branch.

Mr. Cecil Godwin: Very much so.

Mr. Peter Stoffer: It seems that everything's working on a very cooperative basis. If that's the case, then I would say things are maybe changing for the good if DFO can cooperate with you in this regard. You had mentioned science branch regarding the inshore fisheries database, but in this particular allocation you've been stonewalled.

Mr. Cecil Godwin: You see, that is a different part of DFO.

Mr. Peter Stoffer: I never like to separate DFO when it comes to criticism, but as we speak now, you don't really have any valid answers as to why you haven't been given one?

Mr. Cecil Godwin: Just that it's not appropriate at this time.

Mr. Hugh St. Croix: Further to that, Mr. Chairman, based on recent conversations— and I mean within hours —it doesn't look positive for this year. And this is coming primarily from the political arm of DFO.

I'd also like to add, Mr. Chairman, that time is of the essence in this situation. I feel that if it hasn't been made already, a decision certainly will be made within the next two to three weeks.

Mr. Peter Stoffer: Okay, with that, I'd like to put a motion on the floor, if possible.

The Chairman: You can always put a motion on the floor, Mr. Stoffer.

Mr. Peter Stoffer: I basically just want to encourage the chair of the committee to write a letter to the Minister of Fisheries and Oceans as quickly as possible, asking him to grant the request from the Fogo Island Co-operative Society for their quota allocation for shrimp in zone 6.

The Chairman: The motion put by Mr. Stoffer is that the chair of the committee, on behalf of the committee, write a letter to the minister to encourage the minister to try to satisfy the request of the Fogo Island Co-op for an allocation of shrimp for this year.

Is there any debate? Mr. Easter— and this is on the motion.

Mr. Wayne Easter: Yes, I recognize that.

Mr. Chairman, I know of at least six or seven other requests for allocations. Those people will also be able to argue adjacency in some instances, and in other instances be able to argue history. We haven't heard from those. I think we also ought to consider— One of my questions was going to be whether or not the shrimp fishery can sustain any more impact. Is it impacting the food chain of the cod? So I think your motion is premature.

Mr. Peter Stoffer: His answer to the question of shrimp allocation was based on the study. You're basing it on the stock assessment report. He's already answered your question.

The Chairman: I think the motion, then, would have been that in the letter to the minister, we would be saying that if there is a quota increase, the minister should consider the application by the Fogo Island Co-op. Does that meet your request, Mr. Stoffer?

Mr. Peter Stoffer: Sure, because what Mr. Godwin said about the stock assessment report is what he's basing it on.

The Chairman: So if there is an increase, the minister should consider the request of the Fogo Island Co-op.

Mr. Easter.

Mr. Wayne Easter: I have no problem with that, but I did have a question for you. You said the decision is made primarily by the political arm of DFO. What's that?

Mr. Hugh St. Croix: That's not quite what I said, sir.

Mr. Wayne Easter: That's how I took it.

Mr. Hugh St. Croix: The indications that I have had to date have been from the political arm of DFO, which would be the regional office. They're not that decisions are made by the political arm.

Mr. Wayne Easter: Okay.

Mr. Hugh St. Croix: In response to some of your comments, one was what it does—

The Chairman: Mr. St. Croix, we do have a motion on the floor, so I want to dispose of this motion.

You've all heard the motion. The motion concerns urging the minister to consider the request by the Fogo Island Co-operative if there is an increase. Mr. Duncan, do you have debate on that motion?

Mr. John Duncan: Yes, I do. We have the motion that has been presented, but some of us want to ask questions. Can we delay the motion until the end?

The Chairman: Absolutely.

So let's go to further questions. We did have the leader of Her Majesty's Loyal Opposition, the Reform Party of Canada, who has signified to the chair that he wished to ask some questions, so we'll go to Mr. Duncan.

• 1135

Mr. John Duncan: Yes, first of all, most Canadians don't know where Fogo Island is, and we do have a television audience today, so if one were to land in St. John's, how long would it take to get to Fogo Island by automobile and ferry?

The Chairman: Mr. St. Croix.

Mr. Hugh St. Croix: Maybe we could use Gander as an example, which is somewhat central Newfoundland. If you were to land in Gander and drive for an hour and a half you would take a forty-five minute ferry ride to Fogo Island. It's directly east from Gander.

Mr. John Duncan: That has implications from a diversification standpoint, because you have talked about tourism and other things. Thank you for that.

In terms of the fishing quota and the shrimp fishery, are we talking of areas 4, 5 and 6? These are shrimp areas, I assume. Are these inshore or offshore? The reason I'm asking the question is that you talk about wanting to utilize smaller boats. You have a fleet now that includes boats up to 65 feet. Is that the appropriate type of boat for this new quota allocation? Can you describe that?

Mr. Hugh St. Croix: I think we've complicated the issue a little bit by talking about the smaller boats. What traditionally has happened in the shrimp industry, until at least 1997 for the most part, is that with the exception of an area off the gulf, shrimp has been fished by offshore factory trawlers. In 1997 DFO decided to do some reallocating of the resource by giving additional quotas to some of the adjacent and aboriginal groups along the northeast coasts of Newfoundland and northern Labrador, Baffin Island and northern Quebec through what is called the Northern Coalition of licence holders.

Now, what we are advocating here is that to be able to compete with those various groups we also should have an offshore quota of shrimp to be able to, as they are doing, pump the revenue back in to further diversify our operation to be able to then handle an up and coming inshore shrimp fishery. That's in essence what we're up to, and what we're talking about in this particular case is accessing 3,000 tonnes of shrimp, which would be comparable to Torngat Fisheries having roughly 3,000 on one licence, the Union Shrimp Company in southern Labrador having 6,000 on each licence, and St. Anthony Basin having 3,000 and so on.

So what we're saying is that to be on par with all those groups who are again— I repeat myself —aboriginal and adjacent groups, we should be looking at 3,000 tonnes of shrimp to be caught offshore, revenue to be used to diversify and to maintain, Mr. Chairman, our business. Our cooperative is not in a very financial healthy position at this point and really does need that quota of shrimp for the purposes mentioned.

Mr. John Duncan: When you refer to the opportunity to diversify, does that diversification include beam trawlers and the shrimp pot for smaller boats, which there's reference to in your brief? You want to take your current fleet and change their configuration so that they're appropriate for the shrimp fishery?

Mr. Hugh St. Croix: Yes, that would be part of the use of that revenue from that resource.

Mr. John Duncan: Do I understand that if you were able to catch shrimp using that technology, it is your estimation that the shrimp product you would catch with that technology would have a higher value once processed than shrimp caught by the dragger technology?

Mr. Hugh St. Croix: We're not sure of that at this point. We believe that it could possibly be the case, but we're not really sure at this point and that's the idea of doing the research, really.

• 1140

Mr. John Duncan: I have a very strong suggestion for you. That is, we do have the beam trawler technology on the west coast. They are catching shrimp, and their experience is that this is a very different and much more labour-intensive product in terms of not just the fishing component but the processing component. There's more handwork involved in the processing, and a higher price. If you want to get together in any way with those people, I can give you some contacts in that regard.

Mr. Hugh St. Croix: Thank you.

Mr. John Duncan: Thank you.

The Chairman: Thank you, Mr. Duncan.

Let's hear now from the parliamentary secretary. You had some questions, sir.

Mr. Wayne Easter: No, I think Mr. St. Croix wanted to respond to some of the points I made earlier.

The Chairman: Mr. St. Croix.

Mr. Hugh St. Croix: Yes, there was one comment. I think it was: what does it do to the food chain where cod is concerned?

It is widely believed that the reason there is such a high biomass at this point is because of the lack of cod and the fact they're not there eating the shrimp, so it's a reverse kind of situation.

As for the resource, apparently we are now harvesting about 20% of what is believed to be the biomass at this time, particularly in areas 6, 5 and 4, as you go north.

Mr. Wayne Easter: I think Mr. Duncan raised most of the other points I wanted to raise. We heard from— I can't think of the woman's name —from Memorial University this morning, in terms of the crisis in the fishery. She was saying we had to go to more local control, and so on.

But I do have a concern in this day and age. In fact, since about 1969 to most of our natural resource industries— fisheries, agriculture, forestry —we have basically been promoting an industrial policy, not a sustainable policy, an industrial policy that I maintain is the nature of industry: it takes, it uses, it wastes, it discards. Constantly in this kind of technology you move to fewer and fewer human resources involved. I think we have to investigate ways and means— and I think John related to it with the beam trawl and other approaches —that in fact may be more labour intensive but would produce the quality of product that we ought to be going for and is not wasting so much of the resource.

I wonder what your thoughts are on that and if you think that's the way we ought to be moving. I was at an interesting conference in St. John's on gear types. There's probably not enough research into the area, but there are ways and means now of using gear selectivity to not destroy some of the other stocks when you're fishing for one particular species. Should we be moving further and further in that direction?

Mr. Hugh St. Croix: I think so. There's no question you should always strive to develop gear technology that is going to protect other species. I think the offshore shrimp industry has done a fairly good job in doing that by using what they call the Nordmore grate, which releases smaller fish, and so on. We should all be cognizant of the need to do that, and I think it will ultimately be the way we'll be going.

Mr. Wayne Easter: On the one last question I have, sum up for me as briefly as you can why you believe Fogo Island should receive the next shrimp allocation versus the other areas.

I had one other question that I didn't ask earlier. You made the comment that the biomass— the shrimp is probably in great quantities now in part because the cod —that was basically what you referred to— are not eating it. But we're utilizing only about 20% of the biomass, I believe. The concern I have is that I see in recent years a lot of capital being spent on plants, on boats, etc., to exploit the shrimp resource. What happens if, as we hope, the cod comes back? Will you be into another game there of having over-capacity in the shrimp resource, capacity we will have to get rid of?

• 1145

Mr. Hugh St. Croix: First of all, who are you comparing us with in justifying the need for a quota of shrimp?

Mr. Wayne Easter: Because of confidentiality, I can't say. What is your justification for saying Fogo Island should get it versus others?

Now you know where I stand on the chap in Florida, Mr. Chair.

Mr. Hugh St. Croix: First of all, governments, and I mean provincial and federal governments particularly, again, since the cod moratorium came into play, have been encouraging people to look after themselves and the community— you're the community; you deal with your community. look after yourselves. Fogo Island is a primary example of having looked after itself, and it wants to continue looking after itself. It's isolated, very comparable to southern Labrador —Rigolet, Makkovik —Baffin Island, etc. It's directly adjacent to the resource.

That's pretty much it. How much more do we need?

The Chairman: And it's a cooperative.

Mr. Hugh St. Croix: And it's a cooperative and it needs revenue to diversify its business and stay in business.

If you look at what is currently the situation in Baffin, northern Quebec, with the Labrador Inuit Association, the Labrador Development Corporation, the Innu in northern Labrador, the Torngat Fish Producers Co-op— in southern Labrador you look at the Métis, you have the Union Shrimp Co., St. Anthony Basin, a corporation that just came into play, they are all fishing offshore quotas. The revenues are going back into sustaining and further developing whatever it is they want to develop.

If you jump from St. Anthony to Harbour Grace— and I have to mention names —the Harbour Grace Shrimp Company, which is an offshore private company that doesn't necessarily— I have to be careful how I say this —put the revenue back into the community— So from the St. Anthony basin to Harbour Grace, which is the whole of the northeast coast of Newfoundland, there is nobody with an offshore shrimp quota.

We fit those criteria in all respects.

The Chairman: In other words, you're the community-based organization. We're not saying all big private corporations are bad for having allocations, such as Fishery Products International and so on, which do have offshore licences.

Don't they? Do they have an offshore licence up there? One or two?

Mr. Hugh St. Croix: Yes, Mr. Chairman. Fisheries Products does have two licences.

The Chairman: Two licences?

Mr. Hugh St. Croix: Two offshore licences, as does—

The Chairman: As do a lot of other big corporations. But your point is the community-based organizations— Here you are, right in the middle of the resource, and you're perhaps the only community-based organization left.

Mr. Hugh St. Croix: Perhaps, Mr. Chairman, we are.

We don't have a problem with private companies. We don't have a problem with all the quotas.

The Chairman: Big corporations.

Mr. Hugh St. Croix: But we do have a problem, and a very serious problem, Mr. Chairman, with the fact that we don't have a quota. We will not leave this issue alone.

The Chairman: Mr. Bernier.

[Translation]

Mr. Yvan Bernier: I will be very brief. I am equally happy to have learned something about the map of Canada today. I always looked at the island of Newfoundland without noticing that it was held by Fogo Island. How many people live on Fogo Island and what federal riding is it in?

• 1150

Some hon. members: Ha, ha!

[English]

The Chairman: Mr. Bernier, before he answers the question, you've heard of— is it the Edge of the Earth Society?

Mr. Hugh St. Croix: The Flat Earth Society.

The Chairman: The Flat Earth Society. That's where they go to celebrate. Is it yearly, an annual thing sometimes? So Fogo Island is famous, Mr. Bernier.

It's just a point I'm making, but go ahead, Mr. Godwin.

Mr. Cecil Godwin: It's the Flat Earth Society, and there are four corners: one of them is in the Bermuda Triangle; one is in Papua New Guinea; one is in one of the Greek islands; and the fourth corner is four or five miles off the east coast of Fogo Island.

The people who believe this are not idiots; they're university professors, politicians, and so on. They're based in New Brunswick and somewhere in the States.

The Chairman: Now, Mr. St. Croix, back to Mr. Bernier's question.

What was your question, Mr. Bernier?

[Translation]

Mr. Yvan Bernier: I would like to know how many people live there and what riding it is in. I will ask a more serious question after.

[English]

Mr. Hugh St. Croix: It's 3,000 to 3,500. There are 9, 10 or 11 communities— depending on what you want to call it a community —on the island, and it's in the federal riding of the chairman of this committee.

The Chairman: And of course, on this matter, the chairman is completely impartial.

Mr. Bernier.

[Translation]

Mr. Yvan Bernier: And in what federal riding is it in?

[English]

Mr. Hugh St. Croix: It's in the federal riding of Mr. Baker, the chairman of this standing committee.

[Translation]

Mr. Yvan Bernier: So, it's in the riding of Gander— Grand Falls.

You just made me curious earlier when you talked about the value added crab production. I'd like to know what this is all about since in Quebec and New Brunswick, we mostly sell crab in sections to the Japanese. This notion of value added to crab was unknown to me.

[English]

Mr. Hugh St. Croix: I have to remind you that I've been less than four weeks with the cooperative at this point, but I believe what's referred to there is certain— raw legs and not the whole sections, like what you're saying is being done in Quebec and New Brunswick, but chopping the shoulder off the section and using the leg as an item. It is just one more step into process, if you like.

Mr. Cecil Godwin: Over the last six or seven years, we've gotten into quite a bit of what we call value-added finished product for the Japanese market. We've done raw sections, as you're familiar with. We've done cooked sections for the American market. We've done whole cooked crab for the Japanese market, plus whole raw for the Japanese market. We've done raw cut legs, and we've done another one where you take the crab leg and you take a knife and you take a sliver off the leg.

That's most of what we've been doing in the last six or seven years, finished product for both the restaurant trade in Japan plus the Christmas gift trade in Japan. So what we've been doing is pretty much a finished table product.

[Translation]

Mr. Yvan Bernier: I understood that. But there's nothing wrong with belonging to the federal riding of Gander— Grand Falls, far from it. I just wanted to learn something and know where Fogo Island was exactly. Now I understand it all. Thank you.

[English]

The Chairman: And I knew where Îles-de-la-Madeleine is.

Mr. Bailey, a short question.

• 1155

Mr. Roy Bailey: Thank you, Mr. Chairman.

You've been going for 30 years, you say, or approximately. That's almost an entire generation. You have stated that you have become internationally known, and I suspect that when you refer to that you refer to the development of the cooperative. Is that correct? In its total phase— you moved in and formed a cooperative at a time when things were going in the reverse as far as economics were concerned in the fish business.

I find it difficult, in looking at the map, and in your question— the very reason why you're here today. You must tell me, do you think the reason you haven't received a quota in the shrimp business is that you have been too successful?

Mr. Hugh St. Croix: That has crossed my mind several times over the last little while. You look at some of the communities in the province that have pretty much done very little over the last six or seven years when it comes to the moratorium, and you look at some of the things that Fogo Island has done over the last 30 years— and actually, on December 7, 1997, it was 30 years, so we're into our 31st year right now —and I think maybe that could be a factor. But my question to you would be this: do you really penalize people because they are being successful? That's the way we feel.

Mr. Roy Bailey: Thank you. I think that's the way I would feel in your circumstances.

Let's say your request is coming in and let's take the negative part of that. What would be your reaction if you didn't get a quota to improve the economy in your operation and these some 335 people— To come back to my original question, would you then say, look, we've worked our butts off here, we've taken in the ships, we've cared for ourselves and we've cared for our people. Then I would go back and ask that same question: have we maybe been too successful? Or would you ask yourself if the problem was that you didn't make the proper approach to the proper people at the right time?

The Chairman: I don't know if, as business people, they would want to answer that question.

Mr. Roy Bailey: No, I—

The Chairman: Probably we can think it, but I would think that they have their strategy mapped out, and to try to give us—

Mr. Roy Bailey: Okay.

Mr. Cecil Godwin: When you say “business people”, let me say that I come to this committee as a volunteer. I am not a paid employee in the situation I'm in right now. I am actually a fork-lift operator in one of our plants. There are ten more like me who sit around the table and try to make the right decisions for our business. I'm not coming to you as a business person. I'm coming to this committee as a person from a community who does not want to leave that community. I've done the Ontario thing, and by that I mean that I left home and went to Ontario in the seventies, and I went to Labrador, and I really don't want to leave any more. And this would be the option that we need.

At the end of the day, if nothing happens, we will ask the questions of ourselves that you asked of me a minute ago, but that will not put us in a situation where we would stop doing the things we are doing in order to become—

Mr. Hugh St. Croix: If I may, Mr. Chairman, let me say that I personally don't believe that's the reason for Fogo not getting our quota of shrimp. I see other players in the shrimp business that are probably more successful than Fogo and still have a shrimp quota. I believe it may have been— and I'm a little hesitant to say this —the lack of lobbying to that end on the part of Fogo.

Mr. Roy Bailey: Thank you, Mr. Chairman.

The Chairman: Mr. Godwin, my apologies. I spent seventeen years on a co-op board, and I probably was a businessman, but I was doing business and you didn't always give away your next step. That's what I was alluding to.

Sorry, Mr. Bailey.

Mr. Cecil Godwin: Apology accepted.

The Chairman: We'll now go to Mrs. Leung.

• 1200

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chair.

I enjoyed your presentation. I want to congratulate you. You're doing very well, the co-op. It's not easy.

I have a couple of questions. You indicated that you've tried new tests on the shrimp pot and the beam trawl. Can you quickly describe what they are?

Mr. Cecil Godwin: Actually, the shrimp pot is pretty much the same kind of technology as that used in the lobster fishery. It's a pot that has bait in it, and the shrimp get in.

The beam trawl technology is a small version of what the otter trawl is. The only thing is, it's operated off small boats, and it can be done with just two individuals instead of a big crew that goes with the larger boats. So it's pretty much the same type of technology as the otter trawl.

Ms. Sophia Leung: Okay.

I want to know if any other groups are competing with you in terms of allocation. Do you know?

Mr. Cecil Godwin: I don't think so. Not in our area. I will pass that one on to Mr. St. Croix.

Mr. Hugh St. Croix: None that we know of in that area from St. Anthony to St. John's, let's say. There isn't any other group in that area that would fit the same criteria as we do.

At this point, we wouldn't have access to that information.

Ms. Sophia Leung: What is your marketing plan if you do succeed in getting the allocation? Do you think there'll be a lot of increase in income? How are you going to market that?

Mr. Hugh St. Croix: We're talking here about an offshore quota of shrimp, which means we will initially have to work with someone who has a licence. We would, again, initially have to work within the confines of whatever agreement we do with, in this case a fisheries product.

Ultimately, once we've acquired some revenue from the offshore operation, then we would hopefully set up our inshore, in which case we would do the marketing ourselves, possibly.

Ms. Sophia Leung: Who would you aim for?

Mr. Hugh St. Croix: We probably would be looking at the Japanese market for the raw product and possibly at the Chinese market or the Taiwanese market for the cooked and peeled. Though there is a market, of course, in Europe, I suspect we would probably be looking at Asia and Southeast Asia.

Ms. Sophia Leung: What about B.C.? They use a lot of shrimp.

Mr. Hugh St. Croix: I'm not familiar with the possibilities for shrimp in B.C., but it's certainly something we could look at.

Ms. Sophia Leung: Last question. You do have a very excellent MP. Have you lobbied him to try to present at DFO— that's the easiest way —and also the chair of the standing committee? Did you do that before you came here?

Mr. Hugh St. Croix: This is part of our lobbying process, I guess.

Ms. Sophia Leung: Thank you.

The Chairman: Mr. St. Croix has been working with cooperatives all up the northern Labrador coast and has just now come down to take over this cooperative regarding shrimp on Fogo Island.

[Translation]

Mr. St-Julien, did you have a question?

Mr. Guy St-Julien (Abitibi, Lib.): Yes. Mr. St. Croix, do you have business relations with the people in northern Quebec and Nunavik and with the Inuit concerning shrimp harvesting?

[English]

Mr. Hugh St. Croix: Not currently, though we have discussed some possibilities over the last year in terms of turbot, some possibilities with crab, and then particularly the spiny crab or porcupine crab. At this point we haven't done any deals, if you will.

[Translation]

Mr. Guy St-Julien: When we talk about Nunavik, we mean the whole Ungava Bay area. Looking at your map on the shrimp harvesting, one can see that you are going into the Ungava Bay area. Do the Inuit harvest shrimp further down, towards Labrador and Newfoundland?

[English]

Mr. Hugh St. Croix: Yes, of course. All the groups in northern Quebec, Baffin, and northern Labrador have access to all shrimp areas through the offshore effort.

• 1205

I used to have a lot of activity with those various groups by being with Torngat Fisheries in the capacity of general manager, through what we formed in 1997, the Northern Coalition. I can read to you the organizations in the Northern Coalition, Mr. Chairman. It is made up of the Labrador Shrimp Company, Labrador Inuit Development Corporation, Torngat Fisheries, Makivik Corporation, Unaaq fisheries and Qikiqtaaluk Corporation.

These are the six organizations that make up that northern coalition. There has been a lot of cooperation between all of Labrador and Baffin and northern Quebec.

[Translation]

Mr. Guy St-Julien: Do the Inuit complain a lot about the costs? By how much did the shrimp fishing licence increase in 1990? Could you give us a percentage?

[English]

Mr. Hugh St. Croix: I'm not sure I understand what you mean by the cost of—

[Translation]

Mr. Guy St-Julien: By how much did the licence increase since 1990?

[English]

Mr. Hugh St. Croix: Since 1990, the cost of licence for shrimp went from $2,500 to $150,000. I don't know, x number of thousand percent in the last five or six years.

[Translation]

Mr. Guy St-Julien: One last very important question. What is the cost of living on Fogo Island? What is the price of bread and gas? How does the cost of living compare with that in the south? Is it three or four times higher?

[English]

Mr. Hugh St. Croix: Cecil may be able to respond to this better than I can. I am sure it's at least double what it would be in St. John's or Gander and you don't have access to all the goods that you would have in those areas.

Mr. Cecil Godwin: I concur with what Mr. St. Croix said. It's double, definitely double, and you do not have access to half of what you have access to on the mainland.

[Translation]

Mr. Guy St-Julien: Thank you.

[English]

The Chairman (Mr. George Baker): Thank you, committee members.

Mr. St. Croix, are we led to believe that there is likely going to be a quota increase in Area 6, and Fogo Island as a co-operative is practically in the middle of that, right in that zone of Area 6, and to your knowledge there is no other community based application in that zone apart from yours?

Mr. Hugh St. Croix: That's correct. We are in the middle. To my knowledge there isn't any other application. That's not to say there isn't, but to our knowledge that's the case.

Mr. Chairman, we very strongly feel that we should have— As a matter of fact, I'll go as far as to plead with this committee to plead with the Minister of Fisheries and Oceans to give us a 3,000-tonne quota of shrimp in that area.

Further to that, Mr. Chairman, there will be an increase and it will probably be in the neighbourhood of 20,000 to 23,000 tonnes, so there is no reason, absolutely no reason— It's a moral issue at this point, Mr. Chairman, a moral issue.

The Chairman: You are saying a 20,000 to 23,000 tonne increase.

Mr. Hugh St. Croix: We believe that to be the case.

The Chairman: Here you are in the middle of this zone, the only community-based organization, a cooperative, and you've been applying since 1987 and you sort of hear via the grapevine that it doesn't look too good for you in the next few days in getting this shrimp allocation. Is that what you're telling the committee, Mr. St. Croix?

Mr. Hugh St. Croix: That's correct, Mr. Chairman. In actual fact, it could make one cry.

The Chairman: The motion before the committee is moved by Mr. Stoffer. The motion is that the chair write to the Minister of Fisheries and Oceans on behalf of the committee requesting the minister to consider the request by the Fogo Island Co-operative Society Limited for an offshore shrimp allocation of 3,000 tonnes, if DFO does increase the quotas.

(Motion agreed to)

The Chairman: Thank you very much, Mr. St. Croix and Mr. Godwin, for appearing before this committee.

Mr. Hugh St. Croix: Thank you very much, Mr. Chairman. Thank you everybody.

The Chairman: The committee is going to go in camera. The witness on the Multilateral Agreement on Investment, the director general of trade policy, will be here next Tuesday before the committee.

• 1210

I'm going to hit the gavel in a moment, and we're then going to take a break so that the television cameras can shut down. We're going to go in camera and we're going to finish the west coast report. It should only take a few minutes.

We will come back in about two minutes.

[Editor's Note: Proceedings continue in camera]