Monday, December 9, 2013

DFO clueless re $250-million NL compensation package for EU trade deal: committee testimony



On Thursday, Dec. 5th, David Bevan, Associate Deputy Minister of the federal Department of Fisheries and Oceans, appeared before the House of Commons Standing Committee on Fisheries and Oceans to answer questions re the fish component of the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The following is the text of the questions I posed to Bevan:

Mr. Ryan Cleary (St. John's South—Mount Pearl, NDP): 

Thank you, Mr. Chair. Thank you to the witnesses.

In Newfoundland and Labrador this trade deal is generally seen as a good trade deal.

I know as a young journalist for years covering the EU shrimp tariffs, for example, into the EU were incredibly detrimental to our seafood industry.

We have the association representing seafood processors; we have the Fish, Food and Allied Workers' union representing fishermen, plant workers, and trawlermen; we also have the province of Newfoundland and Labrador, the Kathy Dunderdale administration, all behind this trade deal.

On the one hand, we've been asked to give up minimum processing requirements for a whole host of species.

We have provincial legislation, as you know, that basically outlines minimum processing for various species that had to be adhered to.

Those minimum processing requirements will be lifted, which some critics have a problem with.

But most people generally, across the board, are in favour of that.

At the same time we're getting reports out of the European Union that this deal is being billed as good for European processors because they will get access to Canadian fish, to Newfoundland and Labrador fish, which makes some people in my province of Newfoundland and Labrador wary of that.

My specific question is this. A compensation package has been announced to the tune of $400 million, $120 million from the province and $280 million from the Government of Canada.

A compensation package—well it's been described as a compensation package.

I've also heard it described as a way for the province, the industry to prepare for access into the EU market.

So my question is this. The $280 million, would you describe it as a compensation package or would you describe it as a package to prepare for the access into the EU?

And the second part to this question is, do you have a breakdown on what the $280 million will be spent on specifically?

Mr. David Bevan: On the latter, I don't.

DFO is not involved in the administration of that fund, and it hasn't been involved in the discussions leading up to the announcement. It's really outside of our—

Mr. Ryan Cleary: Which department is that?

Mr. David Bevan: The Department of Fisheries has not been involved in the—

Mr. Ryan Cleary: But which department is?

Mr. David Bevan: Foreign affairs and trade, ACOA, and obviously the province.

The province must have had some kind of calculation that the fund was necessary, if it went to the federal government to negotiate it.

Unfortunately, I don't have any of that information nor do I think anyone here does.

DFO has not been directly engaged in the discussions leading up to the creation or the administration of the fund.

¹ (1555)

Mr. Ryan Cleary: Okay, that would be handled by international trade.

The calculations of how to come up with the $280-million figure, from the federal government's end, would have come from international trade.

Mr. David Bevan: They would have responded, I presume, to a position put on the table by the province.

Mr. Ryan Cleary: You also couldn't say whether this would be.... In terms of your adjective, would this be a “compensation” package, or is this a “T-up” package?

Mr. David Bevan: Again, I don't know the answer to that.

We were not aware of it until the announcement took place.

We haven't been involved in any of the lead-up to it. So we are not really in a position to tell you if it's a compensation, if it's a preparation, or what the nature of the use of the fund would be.

Mr. Ryan Cleary: I asked this question.

I don't have the answer. 

Is that unusual—the fact that the federal Department of Fisheries and Oceans isn't involved in a $280-million package for the Newfoundland and Labrador fisheries?

Mr. David Bevan: It's a fish processing industry.

That's a provincial jurisdiction.

We aren't involved in the management of the processing.

We work in partnership with provinces, because it's obviously a continuum of the fishing industry.

But no, we weren't engaged in this.

It was part of a negotiation, internal to Canada, to pave the way to get the deal. But we weren't a part of that process.

I don't think it's unusual for a department where it's not directly involved.

We have no real business in the processing side.

To get the arrangement with CETA, that was up to trade. To administer the fund is up to ACOA.

We don't have the authorities to administer a fund of that nature.

Mr. Ryan Cleary: Thank you.

I have a question, as well, about production costs.

I had one particular conversation with Earle McCurdy, head of the Fish, Food and Allied Workers Union, Newfoundland and Labrador.

I asked him about production costs in the European Union and whether there was a fear. Production costs are lower in the European Union. That may mean that....

Again, these reports out of the EU about access, the Europeans lauding this potential access to Canadian fish, the production costs in the EU, in countries, for example like Spain and Portugal.... Is there any fear that the lower production costs there could undermine what's left of our fish plants, of our processing facilities in Newfoundland and Labrador?

Mr. David Bevan: Production costs probably vary quite considerably across the EU. The expertise would also vary in terms of what they're good at processing.

Shrimp is processed farther north, where production costs can't be any less expensive than those in Newfoundland and Labrador. But there also is the issue of transportation and product form, etc. That will come out, I would expect.

I also note that minimum processing requirements were not ubiquitous to all jurisdictions in Atlantic Canada.

You don't see any significant product movement in a raw form out of Atlantic Canada to the EU, to be processed there into a different form.

We see fish go to the EU in a fairly unprocessed way, but that's because it goes to the retail, where it's value is higher in the marketplace, for a whole small fish, for example.

That would be a different issue than going to be further processed.

Mr. Ryan Cleary: Thank you very much.

The Chair: Thank you, Mr. Cleary.

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