Good morning, honourable members. We would like to discuss today the 2009–2010 snow crab sharing arrangements for crab fishing areas 24 and 23. My name is Norma Richardson, and I'm president of the Eastern Shore Fishermen's Protective Association. With me is Nellie Baker Stevens, our coordinator and snow crab representative on the snow crab advisory board, along with two other members for CFA 24.
As I said, we represent the Eastern Shore Fishermen's Protective Association, and we're located along the eastern shore of Nova Scotia. Our membership consists of 230 fishermen from Canso and Guysborough County to Halifax Harbour. This area's considered region 3, and we are accredited under provincial legislation with the Fisheries Organizations Support Act. We also have local fish plants and buyers as associate members.
We are here today to speak on behalf of over 300 fishermen, who include us, Halifax West Commercial Fishermen's Association, Guysborough County Inshore Fishermen's Association, and Richmond County Inshore Fishermen's Association. These fishermen come from communities from Sambro, west of Halifax, to Cape Breton. There are over 300 more fishermen affected in Cape Breton, so basically it is 600 fishermen from all of eastern Nova Scotia.
With reference to past negotiations, for years we, the quota holders, and the traditional fleet could not agree on how to share the quota. DFO finally came up with thresholds to determine how to divide the quota. For example, for this year's total allowable catch we, the quota holders, would have had 269 tonnes per core company, or approximately $45,000 per fisherman. The traditional fleet would have had 55 tonnes each, not the 115 tonnes that they got this year. The threshold model gave us equal shares per fleet, 50:50, when the quota was 3,000 tonnes. At anything over that, we got 90%.
At this time we were considered temporary entrants. DFO did not expect the quota to remain at levels to support both the quota holders' fleet and the traditional fleet. As you are aware, because landings and science had proved continuing strength and sustainability of the stock, a permanent arrangement bringing all of the licence holders under one regime was sought through the establishment of an independent panel to adjudicate the settlement. Everything in place today is a result of those recommendations.
One recommendation made by the panel the minister deferred to a later date; that was the recommendation for 50:50 sharing between these two groups. A commitment was made at that time by the minister that when science supported a 9,700-tonne total allowable catch, then the permanent 50:50 sharing would be triggered, removing the last obstacle to becoming fully integrated. The 50:50 sharing arrangement would see the traditional fleet having 50% of the TAC and the quota holders the other 50%. This would bring the traditional fleet to their 2004 levels, or even above that amount, as recommended by the independent panel.
In 2006 DFO made the quota holders permanent, with a licence made up of the amount of individual quota per quota holder needed to meet or exceed the traditional fleet licence. In 2006 that meant 20 quota holders in CFA 24; therefore, we only made up 16 licences, not the 31 licences that the panel showed in their appendix B fishery statistics table for the future.
Today, this is the second year that the fishermen have been denied their rightful share of the snow crab quota. For just one year, 2009, we're talking about at least $6 million that has been handed to the traditional fleet to be divided among 74 traditional licence holders. Those are $80,000 bonuses, in our mind. This was on top of the $228,178 that they were supposed to get, so in 2009 the approximate gross revenue was $310,852 each, with an allocation of 94 tonnes for the traditional licence holder in the singular form. This same amount was divided among 20 individual core fishermen and a snow crab company, meaning $15,543 gross each, which is 4.7 tonnes.
The DFO management plan states on page 42, table 4, that the quota holders' core companies would each get 6.234 tonnes when the quota reached 9,700 tonnes. With the change that the minister made to the sharing arrangements, we now have less of the quota--30% versus 32%. This clearly was not the intent of the panel.
The independent panel had recognized the discrepancy between the two fleets and acknowledged that 40 to 60 tonnes is indeed viable and sustainable. That would mean $140,000 to $200,000 for one licence holder.
We are here today to try to figure out what happened. We clearly see lack of consultation and communication on the part of DFO.
This was not an agenda item at our snow crab advisory meeting, but after that meeting everything went backwards for the 600 fishermen and their communities that were affected. We have asked repeatedly to meet with the Minister of Fisheries, to no avail. Like a thief in the night, Minister Shea stole millions from the pockets of small inshore fishermen and their communities in eastern Nova Scotia. She announced on Friday, June 12, 2009, at 4:33 p.m. the change to the sharing arrangement, with the fisheries set to begin the next Monday morning. Does this sound like someone who is interested in consultation? There was no consultation with the quota holders before this announcement. We were not aware that DFO had even considered discounting the independent panel's recommendation. After all, we had many DFO correspondents just stating the opposite.
We have seen very low and unstable lobster prices due to the economic downturn in the last two years. Our lobster fishermen could have used the extra money from the snow crab to get by, but it was unfairly taken from them. The minister with this decision and others has hurt small inshore fishermen and their communities in many ways, not just in the snow crab fishery. If we have more time later we would like to identify some of these, such as scallop and so on. Just last year most of our fishermen were not eligible for the package on lobster that was announced, since the minister would not take advice from industry on the criteria.
We recommend that the minister consult directly with the quota holders to mitigate any further injustice due to her unfair and arbitrary decision made in 2009 negatively affecting over 600 inshore fishermen of eastern Nova Scotia. We would like to see you, the standing committee, speak directly with Minister Shea and DFO personnel who give her advice. We cannot understand her rationale for such a decision. In the past number of years we had a very good working relationship with DFO, but in the past two years communication and consultation have been lacking. They seem to have reverted to telling us what they will do, not asking for input and taking all views into consideration.
Again we ask, what happened?
Thank you for your time.
:
Good morning. My name is Josephine Kennedy, and I represent multi-species licence holders in eastern Cape Breton.
I'm also speaking on behalf today of fishermen from Gabarus to Cape North, part of the quota holders, which we are now known as.
First off the rail, I want the panel to know that I am a Liberal. I've run under the Liberal ticket, so I don't want any partisan politics to play a role in this, because several times I have contacted the minister's office and that's what I've been asked: “Are you Josephine Kennedy, the Liberal?” We have got that out of the way.
Norma filled in the gaps from 1999 up until 2005. In 2005 Geoff Regan had convened an independent panel that was to bring stability and sharing into the snow crab fishery in eastern Nova Scotia. We had a lot of disharmony. There were a lot of separate groups. We were all sharing different quotas, and the time was right for this to be put to bed, to bring harmony back into the fishery. So an independent panel consisting of three individuals heard testimony from everybody who was affected by the snow crab fishery.
The panel came back with nine recommendations. The minister accepted all nine recommendations, but with one recommendation he chose to put a timeframe in for when it would be implemented. That was the most contentious recommendation, the sharing formula. The panel had recommended a 50-50 split from day one. It was 50-50, and that is where the problems lie. The 50% meant the pre-existing fleet, prior to 2005, would receive 50% of the total allowable catch. That meant that if there were a 5,000 tonne allotment for area 23, the pre-existing fleet would take 2,500 tonnes and the remaining 2,500 tonnes would be divided up among the quota holders who came into place.
In 2005 there was a little unrest. As a matter of fact, I led some protests, because we had heard rumours that the licensed fleet, the pre-existing fleet, would never allow it to go over 9,700 tonnes, thereby ensuring that they would enjoy a 60%-40% split forever and a day. We protested and we protested, and we were given assurances that, yes, at 9,700 tonnes the split would happen. So from 2005 to 2008 the fishery continued on. There was harmony. People started talking to each other—at one point even brothers hadn't been talking to brothers. It had got that bad within the snow crab fishery.
In 2009 the minister announced that we were going to have the 9,700 tonnes. We thought finally our prayers had been answered. Joan Reid, the acting area manager at DFO in 2009, sent out a letter in February to all licence holders giving them a heads-up that science was looking at approving the 9,700 tonnes. Therefore, and in her words, which I will repeat,
It is expected that due to the strong recruitment of TAC, exceeding 9,700 metric tonnes may be approved in 2009 thus triggering the permanent 50%:50% sharing arrangement recommended by the Advisory Panel on Access and Allocation in 2005.
We thought that was great; it was happening and nothing was going to be said. On March 25, 2005, we attended our advisory meeting, which normally dealt with traps, season opening and closing, and soft shell. With that we went on and the sharing formula was put on that agenda and we just automatically assumed, because we weren't consulted on anything—we had no idea what was taking place behind the scenes—that this was just going to be reiterated that the 9,700 tonnes was going to be surpassed and the permanent sharing would kick in.
Mr. Gordon MacDonald stood up at that meeting and in his statement he confirmed what we all knew, that this permanent arrangement would take place—you have the documents I passed out for the file—that they were aware of it. Claire MacDonald also stipulated that an exploitation rate of 20% would trigger the permanent sharing of 9,700 tonnes, 50-50.
So when we went to pick up our conditions, as we did the numbers we said we were shortchanged. So this is where it started.
We've tried and tried and tried to speak to the minister. We've requested: 350 fishermen first, then the guys in Guysborough requested also. To this day, over a year later, we have not received a response from the minister other than she is sticking with her decision.
But she has made a decision based on erroneous information. What we found out was that Gus van Helvoort, who was the area manager during this whole independent panel process, and who was involved in writing the management plan that was to be our bible, put his own personal briefing note into it, which should never have happened.
We want to know where this went off the rails, why we lost the 50%-50%. It's not equal; it's 50%-50%. This side of the table would take 50% of the quota and this side would take the remaining. There are no discrepancies in what's in these DFO documents. How it went off the rails, what took place behind the scenes, what the minister said in the House of Commons.... The minister said at standing committee that she was advised by stakeholders, through consultations and that; but we're a case in point. We weren't consulted and we didn't know until after the fact and then we had to start the fight. We had Andy Mooney, who was sent in from the minister's office. We were dragged around. He called us in December 2009 and told us that we were getting our crab back and to be expecting a letter. The next we found out he was pulled off the case.
Then they sent David Wells and we travelled off to Antigonish. That was a waste of time. We got another letter stating we weren't getting our crab back and the minister was sticking by her position.
Then when everybody basically thought we were going to give up the ghost that's when we contacted the standing committee and I got hold of Mr. Byrne, and this is the end result.
What we want the panel to know today is that we are not giving up on this. This is a contract no matter which way. Whether it's verbal, written, there was an offer and there was an acceptance. We abided by it for four full seasons. The fifth season, when we were supposed to benefit, it went off the rails, and we want to know how it went off the rails. Who got to who? Who was consulted?
I've tried through freedom of information, and they sent me out a couple of e-mail correspondences between Gordon MacDonald, the president of Area 23 Snow Crab Fishermen's Association; Mike Eagles, who was the senior advisor on snow crab; and Gus. I have some of those e-mails here. When they got wind of what I was up to, the freedom of information stuff was cut off. But those e-mails confirm that there was no misrepresentation, as Gus Van Helvoort tried to tell us, and that DFO misinterpreted their own documents for four full seasons and in the fifth season they decided to dust it off and go through it. We want to know how it went off the rails, why it went off the rails, and in the end we want our 50%-50%.
:
Getting back to the March 2009 meeting, in the notes, on page 12 at the bottom, we were discussing exploitation rates, whether it should be 13%, 17%, or whatever. Option two was 20%, and here is Claire MacDonald, the senior advisor for snow crab at DFO:
It should be noted that the 20% ER will trigger the permanent 50%-50% Sharing Arrangement recommended by the Advisory Panel on Access and Allocation in 2005.
Then it goes on to say on the last page, as Bernie said, that Gordon MacDonald got up and spoke, and he opened the discussion on sharing formula. He noted that if the TAC exceeded 9,700 tonnes, this would trigger a permanent reallocation. They did not have any reason to not understand what the sharing formula said from 2005. They knew it perfectly, but as Nellie stated, they were guaranteed that it wasn't going to go over 9,700 tonnes. The only thing is that science one-upped everybody and did a fair analysis of the biomass out there and put out 10,800 tonnes for 2009, and it's over 13,000 tonnes for 2010.
But fast-forward to the March 2010 management board. Prior to the start of the meeting I brought it up with Paul Gentile. We had a heated conversation over it, but it was not to be spoken of at the general meeting that would be recorded because--in Paul's words--the minister had made her decision and it was the final decision and they were not there to discuss it. They basically told us that if we were going to bring it up, the meeting was going to be shut down.
On the consultation part, if they talk about consultation before their changing this, there was absolutely none with us—maybe with the members of the permanent fleet, but we weren't party to that. When we tried to find out what went on.... This is when they were throwing in that we were consulted. We were not consulted. We're still fighting today, on May 27, to find out what in the name of God went on to change all this. It is something we lived through and practically gave up our first-born to get, and here we are back to fighting, back to the old status quo of arguing and nobody really wants to talk to anybody and looking at everybody as if to say “You're ugly; we don't want to talk to you.”
This has to change. I'm hoping this panel will go back to the minister and say “Look, Ms. Minister, all the DFO documents—not documents that Nellie wrote or Josephine Kennedy wrote or Bernie MacDonald wrote—are DFO's documents, every bit of it, and that was paid for by the taxpayer of Canada and the permanent fleet knew exactly what was going on right from the get-go”.
As Bernie said, Gordon MacDonald said the only way would be to divide the TAC equally. Well, how come Mr. Gordon MacDonald's words can be carried off to the minister and change a complete plan, but anything that we're supposed to be co-managing doesn't even see the light of day? It's thrown in the garbage before we get out the door.
That has to change, and if there's anything going to happen within DFO, those people in Halifax, those policy advisors and those ones who write the briefing notes, have to be held accountable, which they are not. They are not. They hide behind the minister's skirt or the minister's suit, whoever happens to be there, and when they're on the hot seat, what do they come back with? “Well, it's the minister who has the final decision”. But the minister can only go by what they're telling her to do.
:
I just want to make sure that you guys hear me, first of all, and do you guys see me as well? I'm first nation; are you able to see me?
The Chair: Yes.
Mr. Leonard Denny: Great, because it doesn't seem as though all the parties want to acknowledge first nations participation in this, so I just want to make sure I'm seen, right?
First of all, I want to welcome you guys to Unama'ki, also sometimes known as Cape Breton.
My name is Leonard Denny. I am the chief executive officer for Crane Cove Seafoods, which is owned by Eskasoni First Nation.
In the last ten years or so we've been able to start participating in commercial fishing activities due to the Marshall court decision. I'm happy to say that we've been able to build really strong relationships with DFO. We're actively participating in the management of the resource and of the oceans as well. We're also building strong relationships with the non-native fishers, the non-native communities, and the buyers.
As a first nation we take a balanced approach to fishing. We always look at the economic side of it, and I'm happy to say that we manage our own fishery. We look at the environmental side of it. We're always trying to use environmentally friendly practices in fishing. There's also the conservation side. We've been talking about marine protected areas and we've kept an open mind on that.
Conservation, the environment, and economics are all key. I think there is a balance so that you can do all that and still be successful.
The one thing I want to make clear that is not being made clear is that you always talk about the two groups sharing 50-50. It's 50-50 for two groups or 60-40 for two groups. Well, I want to let you know there are three groups here, not two groups. It works out to the traditional having about 20 licences and the first nations having about 20 licences and the temporaries--now permanent--having about 20 licences. The thought of taking two groups and sharing half and giving the other half to one group again makes us invisible. That's how I read it, because there are three groups equally sharing the three sets of 20-some licences.
Eskasoni fishes mostly out of area 23. Right now each group holds approximately one-third of the licences, so if you want to talk about fairness, I think it's right on the nose right now. I think the minister in her wisdom saw that and adjusted accordingly.
I know these plans were developed years ago and I want to state for the record that we were never consulted on these management plans. We were never consulted. It was never explained to us. Due process and due diligence were never done on this. I want to explain that.
We were also not consulted when they issued a new licence in area 23. To me it's very irresponsible and very cowardly for an outgoing minister to make such a decision, leave, and not have to deal with the consequences or the outcry from it. It's very cowardly and very irresponsible. It makes other MPs look bad. I know you guys aren't all bad, but it is very irresponsible.
They also talk about traditional licences and how there is one owner. It's one owner. Then they tell us that with us, there are 350 owners. Well, with our licences there are 10,000 owners, okay? It's 10,000, not 350. There are 10,000 owners.
I'll tell you about the benefits that the crab and fishing activities have brought so far to first nations in Eskasoni specifically. There are five processors, plus two on the mainland.
I'm not going to speak for the others, but in Eskasoni, we currently employ 100 fishermen and about eight administrators or managers, whatever you want to call them. We also employ 25 processors who are all native. We have 25 processors who repackage frozen crab caught by the industry.
Is it all about us? It isn't. We also help employ more than 200 non-natives in Arichat with our snow crab. We also help employ non-natives with our shrimp. We land our shrimp in North Sydney. So it's not all about us. Again, we're trying to find a balance here.
The income generated from that, the profits, is shared among the community whether that is debt reduction or offsetting shortfalls with programs in Eskasoni. The biggest thing for us is that if this change did occur, if they got their way and it did occur—and we've had these conversations before and apparently we were forgotten about today when they had their say—it would have meant 400,000 pounds lost to Eskasoni. I'm sitting in my office and I'm telling 20 fishermen with families who are used to welfare, because we are on reserves, that they are going back onto welfare and won't get to fish this year. That's not something I ever want to have to do.
Eskasoni is a proud first nation, but it is also a struggling first nation. Our community is 70% unemployed, 70% plus. It's always like that. Let alone the high suicide rate, our unemployment rate is enormous. I know it is easy to sort of.... It's like watching TV showing third world children. Turn the channel and it will go away. It is easy to turn the channel on us and forget about it, but we're going to try to make a fuss about that.
Again, for the record, we were never consulted on any of this, and I don't like it being implied that there were some backroom dealings here. We've always been upfront. We always participate in management decisions. We respect the rules. We've been following the rules since we have participated, so all this conspiracy theory stuff is just a pile of.... I don't want to say. Let's get realistic. The minister was able to adjust, but politics doesn't always make the right decisions, and believe you me, there is enough blame to go around. But let's do it case by case. We can't always blame you guys. You can't always blame us. So we do it case by case.
What I would also like to let you guys know about is that in area 23 and area 24 I would like to say it's a little bit different. We've been taking the cuts. When science tells us to cut, we cut. We work together. We have made sacrifices over the years. Our stock is healthy. Ours went up this year. In other areas it went down. But we don't fight it. We don't argue. When we are told to cut, we cut, and we manage our resource. So we should never be punished for doing that. We are managing a healthy resource.
For now that's all I want to say.
Again, thank you, guys.
:
Excuse me as well. I'm not exactly at my best right now. We're in the middle of fishing season, and I've just spent three days on two different boats trying to harvest lobster and snow crab at the same time. I was up until two o'clock in the morning trying to write what I was going to say to you folks today.
I have a little bit of a benefit because I've probably been at this business longer than any DFO or other person. My uncle started fishing when the first permits were issued in 1978; I started in 1979, and I've been in this fishery for a very long time. I've been working with the executive of the association and leading it pretty well since 1996, through the growth and expansion, the collapses, and the regrowth.
My name is Gordon MacDonald. I've been well addressed in the earlier presentations. I'm the managing director of the Area 23 Snow Crab Fishermen's Association. We're a collective of the traditional fishermen who have been around since the fishery was started and the aboriginal fleets that have been part of us since their being made permanent in the fleet.
Thank you very much, Mr. Chairman and members, for coming to Cape Breton. That certainly makes it a lot easier. Welcome to our home.
We're here to discuss what's become one of Canada's most successfully managed fisheries, the eastern Nova Scotia snow crab fishery. This fishery's been active for over 30 years, and it has proven to have highly variable biomass levels, as have all snow crab fisheries throughout the world. In Alaska and the gulf there are high fluctuations. Biomass gets very high, and then it drops.
In area 23 this resource, as such, has proven to both require and respond to good management practices, the foundation of which is found through the United Nations Food and Agriculture Organization's fundamental reliance on conservation through the reliance on fishermen as owners of the fishery resource. Because they're most tied to it, they suffer most or benefit most from the decisions that are made. If you can put that in their hands and give them a long-term feel, then you will achieve greater success than any level of policing or upper-hand management can achieve.
The snow crab fishery has progressed from an effort-based competitive fishery to a fishery managed by quotas that were implemented to avoid a stock collapse of the kind that was experienced in the mid-1980s. Quotas were set at the behest of the fishermen. The value had gone up in the 1990s, the price was around $3 a pound, the effort was going high, and we'd just gone through the collapse in the mid-1980s; the fishermen said, “We're going to drive this right back into the ground, and it's worth something. We need to protect this, and quotas will take care of that.”
However, when DFO implemented the quotas, they used a ten-year average that also included the collapse period, so they were set at a relatively low level. If you average zero into your numbers, it gets to be that. With a relatively low quota, the science then came on board to advise what the biomass levels were. They used something called a Leslie analysis, which pretty well says that if your catch rates are high and drop off rapidly, the resource can't handle the pressure, so the stock is in decline.
The fishermen had very little need for effort, because the season was long enough and the quotas were low enough that it didn't really matter. One played into the other, and the net result was that the scientific recommendation was that the stock was in collapse. The fishermen were going, “You're crazy. It's easier to catch these things than it ever has been.”
That said, DFO offered the industry the opportunity to use this trawl survey that had been done in the gulf. They'd bring the survey, at a quarter-million dollar price, if we paid the money, which we did. It's one of the examples of a fishing industry that has led for a long time in the proper types of management, from the recognition of collapse to the need for quotas to the need to then bring more science. They put their own money where their mouth is.
When the trawl survey came, they discovered that in actual fact the fishermen were right: the biomass had been skyrocketing during the whole period of time that we had been allocated quotas at low levels and told that those quotas were declining.
The resource was initially treated as a built-up biomass. The total allowable catches were increased for the traditional fleet, but they set aside 65% of what had been 100% traditional fleet fishery and gave that 65% away to new temporary access, which was divided among new participants and aboriginal fleets.
The idea was that this was a built-up biomass; it was there. We'd just gone through a cod collapse, there was no money, the lobster fishery was poor in a lot of areas, and fishermen were starving. There was a need to help. This was a bonanza.
The problem, of course, if you recognize snow crab biomass problems, is that it can be very high and it will drop very low. The idea was that we would bring in temporary participants and share in times of abundance, but when the abundance went down, the temporary participants would then exit, and that would provide a level of stability for the existing participants.
In 2002, after the Marshall decision, the aboriginal communities were created as full participants. Their temporary access was converted to permanent access. They were key pieces. The snow crab licences were key pieces to the Marshall agreements, because it was the fishery that had the largest economic value. There were all kinds of other parts to it, but these were key pieces.
This expanded the traditional fleet by 54%, from 24 to 37 licences, and it met with no protests by the permanent fleet. We welcomed the aboriginal fleet. We recognized that with the size of the biomass, the expansion was available. There was no compensation by DFO or anything for the extra inclusion into our fleet.
By 2004, in area 23 there were over 300 temporary quota holders and only 37 traditional aboriginal licence holders, and politics began to interfere with the best management practices and science advice. As we, societally, have failed to learn from history as understood in the tragedy of the comments on the cod fishery, existing participants would do anything to remain as the biomass showed its first signs of reduction. We had lost recruitment levels coming in. There was no sign of a future, and the biomass was headed for a steady fall, based on the independent trawl survey.
At the threshold of the time, 90% of the quota increases would go to the temporary fleet, because we were sharing at the times of abundance when we were up at a particular level; however, if there was any reduction, 90% of the reduction would also come from the temporary fleet as the resource went down. There was a recommendation for a 10% reduction in the TAC in 2004, and 90% was to come from the temporary fleet. Further, with poor scientific prognosis, the effort to convert temporary access into permanent access was about as rampant as you can imagine.
Sharing in times of abundance and traditional fleet protection in times of low abundance was gone. In a strange bout of math, the Department of Fisheries and Oceans actually treated the aboriginal communities as if they were temporary in 2004--after providing permanent access in 2002--and assessed them a 90% share of the reduction and then blended that through the permanent fleet. The net drop of 10% should have been shared 10% by the permanent fleet and 90% by the temporary fleet, but it was actually 39% for the permanent fleet and 61% for the temporary fleet. It's interesting, because it will play as we go along.
Further, in 2005 the minister of the day tasked the panel to implement new permanent access. We have serious concerns of abuse with this type of tool and its independence. Still, a large number of recommendations were implemented, including the conversion of all temporary access into permanent access, again with no compensation for the founding fishermen who invested significantly to bring this fishery to its development. As in the story of the little red hen, when the bread was ready, everyone was hungry; prior to that, there was no interest in effort or participation.
I'm sorry; I'll go more quickly.
I'm here as the chair of the panel that made the recommendations that the ministers have acted on. Having heard the discussion earlier on with the previous group, I'm going to zero in on one issue, which is what the report said about 50-50, and I'll be happy to entertain questions around that.
The approach we used was based on the principle of equity, but also on other principles, and they are all laid out in the report. We labelled each of the so-called temporaries at the time as “quota holders” because each had an individual share, and the idea was that each one of those quota holders would be organized into a company of some kind. They could determine whatever organization they wished to aggregate or to consolidate those quota holdings so that the overall increase in the number of vessels or the increase in effort really wouldn't change. In other words, the fishery prior to and after the entry of the temporaries would remain roughly similar, at just over 200 vessels. To do that meant consolidating those quotas into some form of entity.
The key, though, is that regardless of how many participants--how many quota holders--formed a company, that company's overall quota would be the sum of the individual quotas held. In other words, if you had 10,000 pounds and 10 licence holders formed a company, that company would have 100,000 pounds; if there were 10,000 pounds and 15 formed a company, it would have 150,000 pounds.
What seemed to get lost in the recommendations after the TAC hit the magic 9,700 tonnes was that each of the licences was simply treated as another licence and the overall quota was divided equally among them. The trouble was the tonnage in each one of these new companies either exceeded or fell short of the sum of the individual quotas that each of the quota holders took into the company when it was formed. As a result, when you aggregated these things, it no longer added up to 50-50, but fell somewhat short of that. It was effectively still a 60-40 arrangement.
I think the document makes clear the intention and how the mechanism was supposed to work. In the report the annex B that's referred to was used as an illustration of what an end result would look like, but we had no way of knowing at the time how the various quota holders would aggregate themselves into companies or how many companies would end up in the final result. However, it didn't matter how many companies there were; as long as each of the quota holders took in their allocation, it would sum to the 50%, the equitable level that had been intended.
Somewhere along the way there was a misinterpretation of how this was supposed to work.
Another important element here is that there is a recommendation, which had been accepted by the minister, of complete transferability of quota among the quota holders: company A could acquire quota from company B, or there could be consolidation within company A. The idea was that it was to be fluid, so that issues around viability could be addressed naturally through consolidating more quota to make sure your vessel was viable.
The recommendations were of a piece. They were meant to be taken as a whole, and that's the way the minister accepted them, with the exception of the 50-50 sharing, which was to be engaged at the trigger point of 9,700 tonnes.
So the idea of this one-third, one-third, one-third, or 25, 25, 50% share, and so on, is certainly one way of looking at it. But our mandate was to look at this as a fishery that could be put and maintained on a viable basis. Those recommendations were directed to that end, and not along classes of individuals. All of the licence holders participated, or had the opportunity of participating in the hearings, including the first nations, who were represented, and the permanent and the temporaries. Everybody participated, and we had briefs from all of them. These were the recommendations and those were the ones that were accepted by the minister.
My reading of this is, yes, there was a misinterpretation of how this equity was to be applied, and it was not applied in the way the report had intended.
:
First of all, I want to thank you for inviting me and Leonard Denny. We speak on behalf of 10,000 Mi'kmaq of Nova Scotia. There were five in the earlier group representing the corporate licences, so if we're talking equity here, I think what we should do is invite another 100 or so Mi'kmaq people to say what they have to say and how the snow crab industry affects them.
I prepared a little speech here. I work for UINR, the Unama'ki Institute of Natural Resources. It's an umbrella organization of the five Mi'kmaq communities of Nova Scotia. I can only speak for these five communities. As Leonard mentioned earlier, there are seven that currently fish in the Scotian Shelf for snow crab.
There are 10,000 residents who fish in the Scotian Shelf, and they represent 74% of the Mi'kmaq population of Nova Scotia. This equates to 21 and a half licences in area 23 and eight and a half licences in area 24. In addition to these licences, the Mi'kmaq communities currently own one, as mentioned earlier; Millbrook owns a fixed allocation.
The 30 licences and the fixed allocation equate to approximately 176 jobs for seven communities. That's just in the snow crab industry alone. These jobs mean that 176 families benefit from employment and a sense of well-being and belonging that being part of a community provides. The money generated from the snow crab industry and the commercial fisheries goes directly back into the community.
I want to go back. When I was contacted to do a presentation here, I asked why. It seemed as though the group before and a few now, maybe, were concentrating on the sharing formula. When I was asked to do a brief little presentation on what my view is, it was on how the snow crab industry affects the first nations Mi'kmaq communities that I represent. Based on that, I made a presentation based on how it affects the Mi'kmaq communities. I'll briefly mention the sharing formula, but it seems to me that this whole meeting here is focusing on that instead.
The money generated from the snow crab fishery and the commercial fishery goes back directly to communities. The chief and councillors of each community determine how best to allocate the money generated from the commercial fishery enterprises. Money that is generated for each community goes towards essential services within the community, such as housing, education, infrastructure, social services, health, community services, job creation, community enterprises, and improved well-being. Snow crab jobs provide opportunities and increased well-being that did not exist prior to the Marshall decision.
The amount of money generated from the fishery and the number of jobs it creates do not equate to a moderate livelihood for each community member; in most communities, snow crab revenue is used to help bail out other fisheries that are losing money, in hopes that the employees can accumulate enough income and enough employment insurance benefits to help them through the non-fishing season. Chiefs and councils decide for the communities how best to benefit the greatest number of people through work projects and supporting essential services, as well as supporting businesses and fisheries that are not profitable, in the name of job creation.
As you can see, there's a dependence on the snow crab fishery. We realize the importance of not fishing at all costs and want this resource to be there for generations to come to help our communities and their people; therefore, we support science recommendations and advice.
We feel that the definition of moderate livelihood has not been taken seriously. No moderate livelihood agreements have been honoured since the Marshall decision. The Marshall response initiative was a great thing for our communities, and things were much worse prior to the decision, but they are a long way from where we want them to be. More needs to be done to support economic opportunities and employment opportunities within Mi'kmaq communities, and more access to the snow crab industry is a start.
The snow crab industry on the Scotian Shelf is in good condition because of the cuts and management decisions that the participants made in the past. This has resulted in a high abundance of crab this year; the biomass has reached it peak and is now heading for a decline. This is a natural occurrence in snow crab and something that is easy to predict, whereas prices and political involvement are not.
The TAC is now at high levels never seen before, but unfortunately we have had to live with low prices because of the economy. With low prices for crab and increased operating costs, communities have had to adjust their budgets to compensate and have had to make decisions that affect the well-being of their members.
Any negative adjustments in quota affect the seven Mi'kmaq communities that fish snow crab and their approximately 10,000 members. This includes the new licence that was issued as well as the effects that will occur if the proposed sharing formula is implemented. Less quota available for first nation communities means fewer jobs and less money for essential services within the communities.
The IFMP did not support additional access to the snow crab areas of area 23 and area 24, as it stated that the fishery was fully subscribed. The seven Mi'kmaq communities of Nova Scotia that fish on the Scotian Shelf asked for more access prior to the Rhyno decision and were denied, only to watch the minister of the day issue a new licence without any fee to a non-native and with no benefit to any Mi'kmaq community.
The Supreme Court decision should have been considered prior to making the Rhyno decision. The Rhyno decision made us lose faith in DFO and the entire process, and we are left to question whether the courts and the federal government are indeed protecting our rights. We are now ail wondering how a person can receive a licence in this lucrative fishing area without consulting the Mi'kmaq of Nova Scotia or the fishermen who have been affected. The Mi'kmaq should have had first right to more access to this area to help meet the premise of what was promised in the Marshall decision, a moderate livelihood. The Rhyno decision took quota away from each Mi'kmaw person and community, and any adjustment to the sharing formula will do the same.
The issuance of the Rhyno licence goes directly against the commercial fisheries 1996 licensing policy for eastern Canada, whereby DFO gives special consideration to aboriginal peoples for commercial licences when opportunities arise. The opportunity was there for the minister to live up to the Marshall response initiative and support Mi'kmaq communities in receiving additional access, but the minister did not. This decision was made with total disregard to conservation, first nations, and management protocols in place at the time. The Rhyno decision causes first nation communities to question DFO's managerial ability. We are left to wonder if DFO considers treaty rights or first nation community sustainability when making decisions.
Thank you.
To our witnesses, thank you very much for appearing before us. We don't have a huge amount of time for questions, but thank you for your input and your opening remarks.
We will hear more from Mr. Rhyno later on. He was included in the original list of witnesses--in the original motion that called this committee to study this issue. I understand that he's prepared to come to Ottawa now so we can hear from him directly.
I want to delve into it with Mr. Gardner. We have a couple of options here, I guess. We can either try to elucidate from the meeting of the minds what was the intent or understanding of parties from 2004-05 to 2009 based on the test of a reasonable person; or we can simply test the actual management, the final decision from Minister Regan, that was set in place from 2005 until 2009.
You could argue that there weren't two groups or three groups; there were actually four groups. There were the traditional fishers who had longstanding access. There were the aboriginal first nations that had their temporary access made permanent--albeit very succinctly done for a very special and unique purpose, a communal purpose, for the benefit of those nations--as per the Marshall decision. The third group was the core company fleet. The fourth group was the actual individual temporary licence quota holders--the individual fishermen who assembled those licences.
But the issue here, the former has minister decided, is that for the purposes of administration there will be two groups. For the traditionals and the first nations, while the purposes of their licences were very distinct, unique, and different from each other, the actual administration of the licence conditions was almost identical—that's a fair statement, isn't it, Mr. Gardner? For the non-traditionals, the core company fleet, from the groundfish displaced fleet, their licences were somewhat different.
The point is that there are only two sets of licence holders per se: the traditional aboriginal, and the core company fleet. But they are licence holders. The plan of the minister says, and I'll quote directly from the plan: “When the TAC reaches 9,700 mt the distribution of quota will be calculated as follows. The permanent licences existing prior to 2005”--that would make up the traditional fleet plus the aboriginal first nations--“will equally share 50% of the TAC and all licences converted to permanent status in 2005 will share the remaining 50%.”
In the test of a reasonable person, how would someone interpret that any differently than that 50% of the quota, once it reaches 9,700 tonnes, would go to the traditional and aboriginal fleet licences on an equal basis? And since there are no individual licences issued to all 650 or 300, there are approximately 40 licences. But there are licences—the key term here is “licences”. The other 50% of the quota will be issued to those licence holders.
How, as a committee, do we decipher what the meeting of the minds was on that? It seems pretty well spelled out in black and white what the minister's final intention was.
Could you offer some comments on that?
The independent panel report came out in 2005, just prior to the fishing season. The recommendation on the 50-50 was not accepted by the minister. There were a series of meetings that were held after that to discuss how that was going to be implemented. The eventual recommendation was the 50-50, as discussed.
The interpretation of a reasonable man, though, is an interesting point. I consider myself to be reasonable, and I know other people who consider themselves to be reasonable, who completely misunderstood the concept of the trigger value, in the sense that we thought the 60-40 was actually a threshold and not a trigger.
The subtlety is in the word and what it means. A trigger, like a gun, goes off and shoots you in the head. The threshold, on the other hand, applies when you're beyond that level and it retracts when you're not. Having come from a series of thresholds and adjustments, we thought it was something that was in place when you were beyond that level--in other words, in times of excess.
This was implemented in the management plan, 2007-11, which I see some people have on the table. The management plan was not available to us until the 2008 advisory meeting, which was the first time we recognized some kind of problem.
So the panel report was in 2005. I mean, I fish for a living--that's what I do--and we don't hover over documents. We get an understanding of what we think it means and we go on.
When we saw it in the integrated fisheries and management plan in the March meeting of 2008, we recognized there was an interpretation problem, that it was trigger, not a threshold. At that point we started asking questions for clarification. We asked for clarity on what it meant, whether it was the trigger or the threshold. We spoke again....
A lot has been made about the Joan Reid letter that said if we hit this level this is going to implement this. Absolutely. I mean, with the minister's report Mr. Byrne was talking about, his announcement, there was clarity in what they intended to do; we just misunderstood it. We misunderstood it because we didn't get the fact that it was a threshold versus a trigger. But as soon as we did, again, we presented cases, and we made recommendations and spoke publicly. We went into the advisory meetings. We talked openly. There hasn't been anything done behind closed doors.
Again, with the different things that the panel took into account, it had a very difficult job. The bulk of the recommendations were implemented. Whether it was 50-50 or 60-40 is an interesting problem. It has a series of dilemmas attached to it, and ultimately it's the reason it wasn't directly accepted at the beginning.
The problem doesn't change. But what has changed is that the economic value of snow crab in the 2004 season was over $3 a pound. We put a price of $2.50 in our economic analysis to the panel, which was scoffed at because it was never going to go below that. We haven't seen $2.50 since. I mean, you add an economic crisis and the rest, and beyond that you've got resource fluctuations; you have economic fluctuations. You can't just give your quota away for free and then say you can be viable by buying it back. In low times you don't have the money, and in high times, again, it's expensive. The value goes up and the value goes down.
We misunderstood trigger versus threshold. We didn't get the IFMP until three years from this report. I mean, even this meeting here today is on a decision that was made over a year ago. We're in the second fishery from there. Sometimes it just takes time to get down to what's going on. It doesn't happen overnight.
:
Yes, I know. I'm going to be very quick.
With regard to the biomass projections, we've had a wonderful set of scientists. It started when we brought the trawl survey over in 1996-1997 with Mikio Moriyasu and the gulf-based snow crab assessment unit. In about 2002 or 2003 the Scotia-Fundy region took over its own science assessment with Dr. Jae Choi, a brilliant scientist, and we've had a spectacular relationship. I myself have a master's degree in science, and we have a great ability to communicate effectively.
We had the built-up biomass that came in the early 2000s and started to fish it. Unfortunately, for some particular reason, we lost all forms of recruitment. The female population disappeared. Everything looked bleak. In 2005 it looked very bleak, and we continued to take rapid serious cuts because that was the recommendation.
What ended up happening was that in about 2007 it attenuated on the bottom end, and then we've seen recruitment pulses start to come. There was a little blip, and it's grown. There is a series of histograms, and the picture would speak 1,000 words, but it has grown significantly.
Through that period of time, the 61 licences that were created in 2005 have all shared equally in the growth. Last year there was a 31% increase in the TAC. This year there is another 22% increase. The new corporate participants received a 31% increase last year and a 22% increase this year. They're over 50% above where they were just a few years ago, as all of us are, because it's been shared equally among us.
The prognosis for the future is that we still have recruitment pulses or waves coming in. The fishery looks very bright for the next two or three years. Then we are likely to experience some form of decline, as with all fisheries.
The increase that we're experiencing right now has occurred significantly more rapidly than what the scientists would have predicted. In 2005 there was no vision of any rebound at all, but it seems that the serious and significant cuts that we took have led to a more rapid rebound, and we're actually at the point now of having quite a bit of recruitment as well as fishing the resource. Last year, for example, the fishable biomass rose 45%. We took a 22% increase because there are reasons to be cautious still, but there was a 45% increase in our fishable biomass estimates from 2009 to 2010, which is huge. Again, a lot of that is attributed to the kind of cuts we have made. That is where we say we try to make the right decisions, because we interact with the science and respond to it.
I don't want to talk too much about what was discussed in the previous group, but the permanent fleet and the aboriginal fleet fully funded the trawl survey before the corporate licence holders came, and they will continue to pick up the slack. It will be funded 100%, regardless of whether they pay or they don't. It was crucially important to get them here, and it is still crucially important, so we have funded the survey for the last three years. They haven't fully paid in any one of those years, but it has just gotten worse.
That was the biomass issue.
I'm sorry; what was your formula question?
:
I think Mr. Gardner has misinterpreted what has gone on, even in the distribution.
The licences were created equal, but the quota shareholders haven't been punished. If there were 22 quota shareholders on one licence and 14 on the other, the licences were adjusted to meet that. It was based on the concept that 16 quota shareholders would equal one permanent fleet licence. So if there were 16 licences, they would be identical to a traditional licence. If there were 14 it would mean two units less or two units more, but they would be equally distributed because there are 16 shares to a licence for the number of licences that are there.
On how they're bantered about--some may have 22 and some may have 14--you just do the math. It all works out and everybody gets an equal share. There is no more for one particular person because they're bound to one group, or less for another.
The resource is up. It's at its highest level now, and that's great. We do our best through science to manage that. Unfortunately, we don't have any management capabilities over the economic value.
In the panel they were talking about a $3 price. Currently the shore price is around $1.45 here, and I think it's $1.35 in Newfoundland. That's less than half of what the value was back then. You can do the math any way you want, but if you catch twice as much fish and get half the money for it, you're at the same level.
The problem is, you have to average all of these things. There are three different things. You have to contend with the biomass, the economics, and the government, which can come along and say “You're making too much. We'll take it away.” But they're never really there when you're not making enough. Then they tell you, “You can just rationalize. You can just get together with your friends.”
Further to one of the questions that Mr. Blais asked earlier, our industry is over capacity. That has always been an issue in any kind of fishery, because when you have too much capacity, not enough fish, and too many fishermen there is a problem. When your economic viability starts to go south, at the end of the day nobody wants to leave. I was talking earlier about the temporaries who were looking at elimination from the fishery because the stock was going down and they didn't want to leave. So you do whatever you have to do. It doesn't matter about the level of C and P, policing, or whatever. If your choice is not feeding your family or giving up fishing, you take whatever you can until the bitter end.
If ultimately in your next step you're headed to the gulf, what they're facing right now is based on a wholesale push-back against new access to their fishery. They felt they were not stewards of their resource. The value of the resource was not theirs and it was going to be given away, so they fought tooth and nail against absolutely everything. They took a different approach from what we did, and they're in a different place from where we are. They used to have an excellent relationship with the scientists from the gulf, and now they don't.
We have to face the cycles up and down, as you've said. But we have to put away money, pay down debt, and get things prepared, because we know full well the resource is going to decline whether we like it or not. We have no control over the economic value. It has not been good in the last five years, and it doesn't have any prognosis of getting any better.
So those are factors that the minister took into consideration as well. She changed what former minister Regan had said, but Minister Regan was making his best decision based on the information available. It's five years later now. There is more information available and more understanding, and things change.
Talking about an integrated fisheries management plan--the bible--and that we need to follow this and listen, in 2004 they threw out the integrated fisheries management plan. The area 23 fleet and the aboriginal participants went to a judicial review because they didn't use the IFMP of the day. At the end of the day, the court said this was just a policy document, guidance, not something that needed to be held to. You cannot fetter the minister's discretion, because as the information becomes available they need to have the opportunity to make the best decisions based on the best information.
Things have changed. These things needed to be factored into consideration, and they were.
:
Thank you, Mr. Chairman and members of the committee, for allowing the opportunity to present today.
I'd like to bring greetings from Minister Belliveau. He's at cabinet today, but he would like to be here with me as we speak about the snow crab industry in Nova Scotia. Unfortunately, I have to fly solo today.
As you know, we have fisheries all around our coast, so I'd like to speak a little more generically. I realize you're here in the Maritimes region focusing a bit more on area 23 and 24. However, I'm going to speak to the gulf areas as well. I understand you're going to be in Moncton tomorrow, so some of the items I'm going to cover would be the types of issues you'll be dealing with tomorrow.
I'm going to speak on a number of points. First, I want to talk a bit about crab conservation. I'll talk about crab management.
I handed around some graphs and maps. I wish I had been able to get this material to you earlier. I apologize for that. It was just completed yesterday, and we couldn't get it forwarded to translation in time.
You see around Nova Scotia we have the gulf activity in areas 12, 12F, 19, and former area 18, which is now included in area 12. In the Maritimes region, we have in Sydney Bight 20 to 22, and then along the outer coast areas 23 and 24, and in the southern Nova Scotia area, 4X. I'm going to talk about the management approaches and some of the issues in each of those areas. Of course I'm going to talk about the economic importance to the province.
Snow crab has been, in roughly the last ten years, in the top three and sometimes four fisheries in Nova Scotia. It's been as high as two. Our biggest fishery, of course, is lobster. It's usually valued anywhere from $300 million to $500 million, but in the last few years snow crab is anywhere from second, third, or fourth most important fishery for the province.
I did hand around a graphic as well to give a little information on the value and the landings. You can see that the landings would range anywhere from about 12,000 tonnes provincially up to roughly 20,000 tonnes provincially. The value is where you'll find the real extremes, and you'll see anywhere from about $34 million to in the order of $122 million. I know you're going to be talking a lot about the resource during your hearings, but in Nova Scotia the impact on the price has been far more extreme on the impact on our communities, and even on the resource. The snow crab resource goes up and down, but the dramatic change in the price, largely because of exchange rates and our reliance on the U.S., has had a huge impact on our coastal community and our fishermen.
A little bit about conservation.... You probably touched on this a bit this morning. I'd like to stress that we are very fortunate in dealing with snow crab that they have a number of built-in conservation measures. First, and most importantly, the reproduction is largely protected in snow crab. We don't direct or land female crabs. The size limit and their distribution will largely protect them from the fishery. Males will not be harvested or targeted before they mature and reach terminal molt. Therefore, the males get a chance to reproduce at least once, and depending on how many are left behind after each harvest year, they'll have multiple reproductions. There's a group of crabs that mature but never reach legal size. They're known as pygmies in the industry. They are always going to be there to reproduce. So we have a situation we're very fortunate with. Fish population can have reproductive potential of a virgin biomass. The females are there, they're reproducing, and they're able to contribute to future stocks.
Now there are some concerns in the scientific community that maybe just removing males could have an impact on reproductive potential. That's a could; that's a possibility. I think it deserves some research, but by and large we would wish to have such a scenario in lobster, in groundfish, and some of the other fisheries, and be able to say we don't target any females, that all males finish their growth and are able to reproduce. So it is a very good situation for stock reproduction.
Also from a conservation perspective, I talked about the terminal-moult males. They finish their growth before they enter the fishery. They reach a terminal moult. Initially they're soft-shell crab, then in about a year they recover to be a good hard-shell crab. They're good quality for one or two years, and then their quality deteriorates and they're going to die. You have two to four years to be able to harvest these crabs—after that they're gone. So the idea of leaving large numbers there for long-term harvest is untenable. We don't have that luxury in snow crab. From a biological perspective, it's a good stock to be able to fish.
There are a couple of key areas. The protection of white crab, the moulted crab, is key, particularly those that moult to the size that are terminal and can be caught. It's imperative that we allow those to be left on the bottom without damage until they recover and they're able to serve the fishery. Those are your valuable crabs for the following year. Most fisheries have protocols that protect white crab.
Good science is also key. The trawl survey has been applied successfully in the snow crab fishery. We're fortunate. It's probably some of the best fishery science we have for stock assessment. However, let's not be overconfident. It is a tool. It's not 100% accurate. There are ranges in the estimations. The number we always talk about is the one that's in the middle, but depending on how many samples are done there's quite a range. Still, we are fortunate to have this trawl survey data for managing this fishery.
Enforcement is a priority, particularly for conservation, when we deal with going over lines. It's probably more of an issue in the gulf, where there are so many different fishing areas. In Scotia-Fundy the landing of the quota is an issue. There's a concern with overharvesting. They have to make sure that the landings are monitored properly to ensure that the quotas are actually followed and not abused. These are key points for our conservation.
I want to talk a little about management. I think there should be some flexibility in management, particularly on things like exploitation rights. I know that you're going to hear tomorrow about the precautionary approach. You're going to hear about the overharvest in area 12 and the need for a dramatic reduction this year. That's a legitimate perception. At the same time, it's a bit like motherhood. People talk about how a stock is going down fast, so we have to take drastic measures. It's hard to argue against that.
However, we have to keep in mind that we're talking about exploitation rights on a small percentage of the population out there. We don't fish any females. We don't fish any juvenile males. We only fish the terminal-moult male crabs, the large males. When you talk about an exploitation rate of 50%, people think it's very aggressive. But you have to realize that probably 75% of the population is not even in the mix to be harvested. It's 50% of the available biomass, or 20% of the available biomass—males that have finished their growth and are now terminal. That's a message I'd like you to take from me today. When people are talking about exploitation, they're not talking about the whole population. It's just a small fraction that you fish.
I believe that, within limits, the industry should be given some flexibility in choosing their exploitation rights. There should be a range that's considered reasonable. The long and short of it is that if you take them this year, they're not going to be there next year. But a number of those are going to die through natural mortality. You can't leave them there for long periods of time, so you want to find the balance of some stability and responsible management with utilizing the terminal molts that are available as the pulses come through the fishery, because it is a pulse resource. I've seen them cycle in the gulf. That fishery is a mature fishery, has been there since the early seventies. They've cycled up and down. It's a relatively newer fishery in the outer coast of Nova Scotia, but the same cycles are there.
I also want to mention the precautionary approach in management. I'm all for precautionary measurements and being responsible resource managers in our fishery. We have to manage for sustainability, but if we get to the point where we're doing it on principle rather than really good scientific reasons, then I have some concerns. I fear that's sometimes the case with snow crab, that people just give the motherhood notion out there that stocks are way down so we have to cut back on our harvest. It could be a very natural cycle. There's nothing we're going to do. So if we have a very small biomass, we can do our best to work through it from the fishery, or stand back, maybe be very conservative on the harvest approach, and watch as they are going to die within one or two years anyway through natural causes.
So again, it's almost sacrilegious to talk like this, but I'm putting it on the table, just for your consideration.
Quickly, I'll go through the areas. Area 12, 18, and 12F has been the most productive crab zone in the Maritimes. It has the longest commercial history. It was explored—Cape Breton, Prince Edward Island, and New Brunswick—in the mid-sixties. It was established as a commercial fishery in the late sixties or early seventies in New Brunswick and Quebec, and in the early seventies in Cape Breton, and later in Prince Edward Island. It has followed very cyclical landings. I recall, I believe it was in the late eighties, when the TAC was 7,000 tonnes. So that was quite a shocker at the time. I remember in the mid-eighties, the landings, before TAC management, were in the order of 32,000 tonnes. So the stock has cycled up and down, and since science has done the trawl survey, it has been very apparent. You can see the waves of year classes moving through that fishery. So it has gone up and down.
On old area 18, you're going to hear a number of different perspectives tomorrow. One is the mismanagement from an allocation perspective. You will hear from traditional area 12 folks. Part of that concern was the movement of the P.E.I. areas into the full area 12 fishery, and of area 18. Area 18 is a Nova Scotia area, and that is of significant interest to us. That area is a very productive area as well and has had a long history of white crab. So basically there was a lot of recruitment and growth in the area, and the crab would move out into the larger gulf area, so to speak. So the decision was made for area 18 to combine, to take their crab that is traditionally produced in area 18 and put it in the bigger pot and join with area 12. That enabled the area 18 fishery to stabilize on the white crab problems. It was a very good deal for the resource, and it was a good management decision for the area 18 fishermen.
It's the same situation for the area 25 and 26 fishermen in Prince Edward Island. So some will argue that it was part of the problem in area 12. Well, as I mentioned, the area 18 merger came with the resource that they brought into the bigger pool. So it really had no impact on the other fishermen but was able to stabilize the fishery in area 18. So it was a good thing.
Area 12F is a fringe area up in northern Cape Breton, a very small fishery, with localized crab that would have died there had they not been harvested in the area. So it's not very big but it's very important for the few fishermen who are in that area, and as in all other areas, the big issue for the economy up there is the prices.
Area 19 has been fished since the sixties. It's a highly productive area. If you look on your charts, that's the area off Cheticamp and there have been cyclical fisheries through that time. That fishery expanded from six inshore licences to 180 inshore licences, and contrary to many other areas, this was largely industry-led. They put forward various plans to include multi-species fishermen, largely the lobster fishermen.
Each of the 180 fishermen can have anywhere from three traps to 26 traps. So there are quotas associated with traps. They have an industry-designed management plan that is quite unique, which shares the resources but allows transferability as well. It's a summer fishery, so they do multiple fisheries. The do lobster and then snow crab, and they have a white crab protocol to protect their resource.
Area 19 is relatively small compared to area 12. It's a very dynamic area as far as movement of snow crab goes. So there are crabs coming in and going out. The fall survey in a small area such as area 19 is not very good for predicting what you're going to have in a fishery the following summer. That's the biggest issue in area 19, and I hope you hear about that tomorrow.
The way the industry has gotten around that in the last few years is to have a spring survey. Basically, when the crabs are harvested out in summer, then there's mobility of crabs--they mix around. In a small area such as area 19, a little bit of movement can make a dramatic impact on the biomass that's available for the fishery, and that movement can take place largely after the trawl survey. So the spring survey, which takes place just before the fishery, gives an accurate scientific assessment of what's available in area 19.
There's some talk that the 2010 fishery will not have a spring survey in area 19. There's a connection with area 12. The area 12 industry is asking why there are special deals for 19. Area 19 is unique. It has a unique set of circumstances, so that spring survey is essential. They also have a long-term co-management plan. They've been probably the most cooperative group of fishermen, for any species, I've observed as far as working with DFO to come together with a collective fishing plan over multiple years goes. They've been doing this for over a decade in area 19. That plan has a range for exploitation rates. It has a season range, and it spells out how they're going to manage that fishery.
The other message that “we just did something to area 12, so now we're going to do it to you in area 19 as well” causes concern. You have an industry group that has cooperated fully with DFO and will potentially be punished because of issues in another area. So it is essential to have the spring survey to set an accurate biomass level for the 2010 fishery and to maintain that long-standing co-management plan that has been agreed to between DFO and the industry. Time is running out, so I'm hopeful that you folks in the committee may be able to influence that survey that's needed within the next several weeks and will be able to maintain the good relationship and the positive fishery that we have in area 19.
Just turning briefly to the outer coast of Nova Scotia, in areas 20 to 22 there is relatively low productivity. It's important for the number of multi-species fishermen who are there, but it's been a challenge, particularly with low prices.
You've heard a lot about areas 23 and 24 today. Those opened up in the mid-1970s. There's been a huge expansion in the last ten years. These are very large areas, so there's a concern that the province is on some of the sub-areas. Initially, when the areas opened up, there were areas 23A, 23B, 23C, and 23D, and a slope area--you probably heard about that--and the same was true in area 24. When the fishery was changed about five years back, the sub-areas were removed. Back at the time when we made our presentation, we said we would like to see the sub-areas maintained at least until there was another tool to ensure distribution of fishing effort throughout the area.
Regarding the crab population, as I mentioned, you can harvest the terminal-molt crab only in a certain window. If they reach terminal molt and people are not fishing them, then there's lost opportunity, and fishermen will crowd in on areas that are easiest to get to. That becomes a real problem with low prices. You're going to try to spend as little money as you can to harvest your resource, so there's concern about lost opportunity in areas 23 and 24 for crab that may not be harvested because of these distant areas.
Also, there is a concern that as crabs age from a terminal molt they grow barnacles on their shells. So an issue we need to address in areas 23 and 24 is some kind of a protocol that will accommodate for this. If fishermen are bringing in crab that are lower quality, the price will be lower. And if the processors are saying that on that crab they're going to lose 10% because they have to scrape the barnacles off and they will lose the quality, that becomes an issue. So the way around that is to have a protocol that will allow some adjustment for barnacled crab. It's done in Newfoundland, so it would be the same thing in this region, to have an adjustment for the weight if it's barnacled crab.
The alternative will be high-grading so people will take only the best-quality crab. Then, of course, the older crab is discarded. It is going to be an economic opportunity lost to the fishery.
You've heard about the access issues. I'm sure that's one of the main reasons you're here. Minister Belliveau has heard both sides, and both sides are passionate about their position. In this fishery and in several others he has put forward the concept of a tribunal to be an independent arbitrator of these sorts of disputes. If you recall the Fisheries Act--the last two attempts at that--that concept was in there and it probably will be there again when the Fisheries Act is reintroduced. We've had a few goes at this, and we still haven't got a new Fisheries Act. So what the minister would like to see is a tribunal mechanism set up to deal with disputes such as access in crab fisheries and in others to hear both perspectives and then put forward a balanced and objective position.
Those perspectives may change from year to year, as you've heard around here. What may have happened in some areas in 1990 or in 2005 in the case of snow crab may be different in 2010. We usually always talk about resource. As I mentioned, the price factor is critical.
Finally, the processing is an extremely important industry in eastern Nova Scotia--crab processing. What's really hurting us are the exchange rates in the U.S. and the economic downturn in the U.S. In Canada, particularly in the fish industry, we can't dictate exchange rates, but what we can do is try to expand our market so we don't have all our eggs in one basket. They're having trouble in Europe. In Asia, we're into Japan with snow crab, and there are great opportunities in China, so we have to explore that.
In Europe, Marine Stewardship Council certification is key in some areas. There is an interest that's developing here in eastern Nova Scotia for snow crab. The province has basically financed a number of MSC activities in other fisheries, and we're prepared to help in the snow crab fishery as well. We think that is critical to get into new markets in Europe. So if the industry is prepared to move in that direction, we are prepared to work with them.
Landing gluts are a problem for the processing sector, as well as quality. So that's either white crab, which is largely managed by the industry, or barnacles, which need to be addressed, as I mentioned.
Unfortunately, we still have the processor-harvester disputes on pricing, and there is a lot of distrust. We see these two sectors as industry partners out in the much larger global marketplace, and again, we would like to encourage or assist in any way we can to improve those trust levels and have the two sectors work as partners.
So those are my not so brief remarks. I thank you for giving an opportunity to put our perspective on the table.
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Starting with price setting, Nova Scotia does not have a price-setting mechanism. This is a total harvester-buyer arrangement. We do not intervene in any way with any legislative price mechanism or system to negotiate prices.
Historically, we have had serious issues on price setting and our pricing of crab. We've actually had a task group with industry, and both the processors and the harvesters sat down and worked on trying to resolve some of these issues. We resolved the immediate ones, not the long-term ones. There will always be questions about whether the prices are fair. We will have the harvesters' concern that they're too low, the processors' concern that they simply can't make any money at some of the prices. But by and large, it's a free enterprise system on pricing in Nova Scotia.
On the processing facilities, there are probably in the order of a dozen plants that are geared up to process snow crab in Nova Scotia. I'd have to count around the province, but there are probably seven or eight of them that are active now.
Again, as a province we don't dictate where and how crab processing should be established. We don't give government money to establish a crab plant, for example. If someone came in and said this community has landed all kinds of crab, and we want to build a crab plant here, so give us so much money.... We do license the crab plants, but we don't actively go out there and try to build plants. We don't actively go and try to remove them. I guess some of the business forces have made that happen.
We only had a couple of crab plants in Nova Scotia. Then particularly with the huge expansion in area 23 and 24, a lot of people saw opportunities and built plants. Some of them have come and gone, and others are surviving and providing very important employment in the community.
On the number of harvesters, the example of probably the extreme is when I spoke about area 19. There are 180 fishermen there. If it was crab alone, there's no way this area would support those. But if the approach is a multi-species-type fishery with supplement lobster and what little groundfish is left--not much any more--maybe some herring and some other fisheries.... There is some transferability within that fishery where you could buy more traps, but not more than.... You can't eliminate a three-trapper, basically. That three-trapper has to be transferred to a new fisherman. So the fishermen themselves set up a system where there's still an opportunity for a young fisherman to get in at a low price and a low trap number and in time work his way up.
It has worked fairly well. The question is if it can survive the low prices that we've experienced in the last couple of years. That's a real concern. I'm sure industry, when they're faced with that, will have to deal with that in area 19.
In the other areas, the outer coast, 20 to 22, it's tough going, because landings are very low, but it's a multi-species fishery set-up there, so crab is a contribution.
The set-up in area 23 and 24, all the new players came in groups, as you've heard, rather than as individuals. So that dramatically reduced the number of fishing enterprises that could be out there, which kept the capacity down. There is some transferability there as well.
With interprovincial competition, we have open borders and movement of crab in the Maritimes. We have a problem with Newfoundland. We have a situation where there is a restriction of movement of crab, unprocessed crab, from Newfoundland to anywhere else. We asked the Newfoundland government multiple times to remove that to have unrestricted movement of crab and other fish products. But it's a priority policy area for Newfoundland, so we haven't been successful there.
So we have one restriction when it comes to movement of fish, and that's on crab in Newfoundland and Quebec. It is basically a countermeasure, because our industry was being hurt so badly by one-way movement of crab. We used the interprovincial trade agreement, the clause that states that if one jurisdiction has a barrier, another jurisdiction can use the same one if your industry is being hurt. These are the only restrictions we have. Other than that, we have interprovincial trade in all fish, and in the Maritimes for snow crab.