INTRODUCTION

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1. The second of July 1992 marked a turning point in the lives of tens of thousands of Atlantic Canadians. On that day, the Minister of Fisheries at the time, the Honourable John Crosbie, announced a two-year fishing moratorium on the northern cod stock. Moratoria on other cod stocks and other major groundfish species quickly followed. Total allowable catches for groundfish fisheries that remained open were, in most cases, severely reduced. The overall result was that, within a very short space of time, Canada's groundfish industry was virtually shut down. The loss of this industry has had profound social, economic and cultural implications for those directly and indirectly dependent upon the industry, the communities of the Atlantic provinces and the province of Quebec.

2. In retrospect, it is clear that this disaster had been looming on the horizon for a considerable time. In the early 1980s, inshore fishermen saw their catches declining and the average size of the cod they were catching decreasing. By the mid-1980s, some Department of Fisheries and Oceans (DFO) scientists were also beginning to realize that something was seriously amiss, despite increasing catches by the offshore sector and favourable stock status estimates. By the late 1980s, DFO scientists were beginning to revise their estimates of the northern cod stock downward and on February 12, 1989, the federal government appointed the Independent Review Panel on Northern Cod under the chairmanship of Professor Leslie Harris. In March 1990, the Panel released its report that confirmed that fishing mortality for northern cod had been much higher than previously believed and was at a level that could threaten the viability of the northern cod stock. The Panel recommended immediately setting a substantially lower total allowable catch that would reduce fishing mortality. Total allowable catches for northern cod (2J-3KL)1 for the 1990 and 1991 seasons were reduced but not by the margin recommended by the Harris Panel.

3. In May 1990, the government introduced the first of three major adjustment programs designed to deal with the deepening crisis in the Atlantic groundfish industry, the Atlantic Fisheries Adjustment Program (AFAP). This was followed by the Northern Cod Adjustment and Recovery Program (NCARP) in 1992 and the Atlantic Groundfish Adjustment Program (AGAP) in 1993.

4. When NCARP was introduced in 1992, it was widely accepted that the moratorium on the northern cod would last for two years and that fishing could resume by the 1994 season. Despite the moratorium, the condition of the northern cod stock continued to decline and it was becoming clear that recovery and resumption of a normal fishery was much further in the future.

5. AGAP and NCARP ran out on May 15, 1994. These programs were succeeded by a new program designated The Atlantic Groundfish Strategy, generally known as "TAGS." TAGS was a program that combined income support with labour and industry adjustment measures. It was designed to help those people most affected by the downturn in the groundfish industry to weather the crisis and assist those who were willing to make the transition to employment in other fields. It was also intended to help the industry address a problem of significant overcapacity in the harvesting sector. Above all, a key element of TAGS was considered to be "active programming." This meant that income support would be contingent upon active participation in program elements such as training or involvement in community development projects.

6. TAGS was initially designed to handle a predicted caseload of 26,500 clients. Instead, the TAGS caseload turned out to be 40,000, approximately 50% higher than originally planned. From the start, the higher caseload placed a substantial pressure on the TAGS funding envelope of $1.9 billion, which had been allocated in the February 1994 federal budget. In order to remain within the funding envelope, successive changes were authorized by cabinet that redirected funding from adjustment measures within TAGS to income support. In addition, the requirement of active programming was set aside. Despite these changes, the TAGS budget will be exhausted earlier than planned. TAGS payments are now expected to continue until August 31, 1998, three months later than the May 1998 date previously anticipated but still considerably earlier than the originally planned date of May 1999.

7. The diversion of funds from adjustment elements of the program has contributed to a much lower uptake of adjustment measures than originally projected. Despite the extensive moratoria on groundfish stocks the short term prospects for significant recovery of many groundfish stocks remains uncertain, although there are now signs of substantial concentrations of healthy cod in the bays around Newfoundland.

8. The prospect of the end of TAGS and the uncertain and uneven recovery of groundfish stocks around the Atlantic coast raises profound issues with respect to any program that may replace TAGS in 1998 and for fisheries management policy in general for the Atlantic region. For this reason, the Standing Committee on Fisheries and Oceans of the House of Commons undertook, at the earliest opportunity, a study of TAGS and fisheries management issues in Atlantic Canada.

9. Over a period of 9 days from November 23 to December 1, 1997, the Standing Committee on Fisheries and Oceans visited a total of 15 communities in Newfoundland and Labrador, Quebec, New Brunswick and Nova Scotia in order to hear directly the views of fishermen, plant workers, representatives of fishermen's organizations, community representatives and representatives of provincial governments and non-government organizations. This report is a synthesis of the views expressed to the Committee. On the majority of issues there was wide consensus but on others there were significant differences of opinion often related to regional differences. As much as possible, this report attempts to include these varied points of view into the main themes.

10. In virtually all the communities that the Committee visited, witnesses told us that this was the first time anyone representing the federal government either from Parliament or from the senior levels of the bureaucracy had visited their communities to meet them face to face and listen to their concerns. Indeed, we believe this is the first time a Committee of the House of Commons has in this way visited so many small communities of Newfoundland, Atlantic Canada and Quebec. Many witnesses expressed gratitude to the Committee for visiting their communities but at the same time many also expressed reservations about the ability of the Committee to initiate significant change.

11. At some of the Committee's meetings, emotions were at times intense and opinions strongly worded. At no time, however, was the hospitality extended to the Committee other than warm and gracious. For this, the members of the Fisheries and Oceans Committee extend their deepest gratitude to the people and coastal communities of Atlantic Canada and Quebec.

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1 Subareas of the NAFO Convention Area, east of Newfoundland and southern Labrador.