AQUACULTURE IN CANADA'S ATLANTIC AND PACIFIC REGIONS

The Standing Senate Committee on Fisheries

Interim Report

Chair: The Honourable Gerald J. Comeau
Deputy Chair: The Honourable Joan Cook

June 2001

37^th Parliament - 1^st Session

THE STANDING SENATE COMMITTEE ON FISHERIES

The Honourable Gerald J. Comeau, Chair
The Honourable Joan Cook, Deputy Chair

And

The Honourable Senators:

Adams
Callbeck
Carney, P.C.
*Carstairs, P.C. (or Robichaud, P.C.)
Chalifoux
*Lynch-Staunton (or Kinsella)
Mahovlich
Meighen
Moore
Robertson
Watt

The following Senators also served on the Committee during its study: The Honourable Senators Corbin, DeBané, Forrestall, Graham, Hubley, Johnson, Kenny, Milne.

--------------------

36^th Parliament - 2^nd Session

The Honourable Gerald J. Comeau, Chair
The Honourable Fernand Robichaud, P.C., Deputy Chair

And

The Honourable Senators:

Adams
*Boudreau, P.C. (or Hays)
Carney, P.C.
Cook
Johnson
*Lynch-Staunton (or Kinsella)
Mahovlich
Meighen
Perrault, P.C.
Perry
Robertson
Watt

*Ex Officio Members

The following Senators also served on the Committee during its study: The Honourable Senators Furey, Squires.

37^th Parliament – 1st Session

Extract from the Journals of the Senate of Tuesday, March 13, 2001:

The Honourable Senator Comeau moved, seconded by the Honourable Senator Di Nino:

That the Standing Senate Committee on Fisheries be authorised to examine and report upon the matters relating to the fishing industry;

That the papers and evidence received and taken on the subject during the Second Session of the Thirty-sixth Parliament be referred to the Committee;

That the Committee submit its final report no later than March 31, 2002; and

That the Committee be permitted, notwithstanding usual practices, to deposit any report with the Clerk of the Senate, if the Senate is not then sitting; and that the report be deemed to have been tabled in the Chamber.

The question being put on the motion, it was adopted.

Paul C. Bélisle
Clerk of the Senate

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36^th Parliament - 2^nd Session

Extract from the Journals of the Senate of Tuesday, December 7, 1999:

The Honourable Senator Comeau moved, seconded by the Honourable Senator Lynch-Staunton:

That the Standing Senate Committee on Fisheries be authorized to examine and report upon the matters relating to the fishing industry;

That the Committee report no later than December 12, 2000; and

That the Committee be permitted, notwithstanding usual practices, to deposit its report with the Clerk of the Senate, if the Senate is not then sitting; and that the report be deemed to have been tabled in the Chamber.

After debate,

The question being put on the motion, it was adopted.

Paul C. Bélisle
Clerk of the Senate

TABLE OF CONTENTS

PREFACE

INTRODUCTION

A. Global Overview
B. Canadian Aquaculture

THE FEDERAL ROLE

ISSUES RAISED

A. The DFO’s Support of Aquaculture
B. Employment and Economic Development
C. The Siting of Fish Farms
D. Environmental Concerns About Salmonid Aquaculture
E. Escaping Farmed Salmonids
F. Fish Health
G. Shellfish Aquaculture, Enhancement
H. Science, Research and Development

CONCLUDING REMARKS

RECOMMENDATIONS

APPENDICES

FAO CODE OF CONDUCT FOR RESPONSIBLE FISHERIES, ARTICLE 9 – AQUACULTURE DEVELOPMENT - APPENDIX 1
WITNESSES - 37TH PARLIAMENT – 1ST SESSION - APPENDIX II
WITNESSES - 36TH PARLIAMENT – 2ND SESSION - APPENDIX III
EXHIBITS - 37^TH PARLIAMENT – 1^ST SESSION - APPENDIX IV
EXHIBITS - 36^TH PARLIAMENT – 2^ND SESSION - APPENDIX V
MEETINGS & TOURS - APPENDIX VI

 PREFACE

I want to applaud this Committee’s ongoing study of aquaculture in Canada. … The issues you have raised here are extremely important for me and my Department, and I will do everything I can to address them. – The Honourable Herb Dhaliwal, PC, MP, Minister of Fisheries and Oceans, Proceedings, 4 April 2000

I think that this Committee could do a service to Canadians in holding the Department’s attention – to hold its feet to the fire, if I might be so crude. It should be ensured that the work that is planned is carried out... – Ronald C. Thompson, Assistant Auditor General, International Affairs, Proceedings, 2 May 2001

One aspect of my job is to keep DFO’s feet close to the fire so that the Department meets all of its goals with respect to its action plan and it $75 million program. – Yves Bastien, DFO Commissioner for Aquaculture Development, Proceedings, 29 May 2001

We have ... asked for a copy of the legislative review that has been prepared by the office of the Commissioner of Aquaculture Development within DFO. This we understand was finished last year and has never been released. ... This is typical of the way information about this industry is treated, both at the federal and provincial levels of government. – Janice Harvey, Director, Marine Conservation Program, Conservation Council of New Brunswick, Proceedings, 24 April 2001

Mr. Bastien’s document indicates that he wants to make the Fisheries Act a toothless creation. – Lynn Hunter, Fisheries and Aquaculture Specialist, the David Suzuki Foundation, Proceedings, 9 May 2001

My view is that if the Auditor General conducted the evaluation of salmon farming on both coasts on 1 April 2001, the Auditor General would find that there has been a significant effort by the Department. While there may be some issues that are still outstanding, that the bulk of the issues have been resolved and that we are making some significant progress forward. – David Rideout, Executive Director, Canadian Aquaculture Industry Alliance, Proceedings, 1 May 2001

There were many reasons for undertaking a study on aquaculture, not the least of which is that farmed fish and shellfish ultimately end up on our dinner plates. The international fishing industry is undergoing an historic transition, with aquaculture (also known as "fish farming" or "aquatic farming") becoming the source of a steadily increasing percentage of seafood consumed world-wide. In Canada, we are told that aquaculture: is a rural-based industry providing much-needed employment and numerous economic spin-offs for rural coastal communities hard hit by depletions in wild fish stocks; acts in a supporting role to the wild fishery; provides indisputable opportunities in related technology and service sectors; and offers tremendous opportunities for further development. Canadians are also told that constraints to the sector’s expansion cost jobs and that government’s support and approval of industry expansion should naturally follow.

In keeping with its mandate and mindful of costs, the Committee conducted a series of informal, fact-finding meetings in the Atlantic and Pacific regions in 2000 to: familiarize members with the issues facing the fisheries; and discover, first-hand, the specific challenges and constraints facing the marine aquaculture sector. These informal discussions involved various stakeholders and designated members of the Committee, or "working groups." The meetings took place in boardroom-type settings, as well as in the form of visits to a number of research laboratories and facilities, finfish and shellfish farms, and processing plants. In addition to oral presentations, the Committee welcomed written briefs and letters. These deliberations were supplemented by the use of videoconferencing and by more formal and recorded hearings in Ottawa.

Aquaculture represents about one-quarter of the landed value of fish in Canada. From our in-the-field visits, we can certainly attest to the fact that there are many examples of successful fish farming enterprises on both coasts of Canada. With only two decades of significant commercial production, Canada’s aquaculture sector is a relatively new industry, but also one that is growing and evolving. Its complexion and level of development changes notably from one province to the next, with opinions being more deeply divided in some regions than in others. Some communities embrace aquaculture as an economic generator, while others have misgivings. A variety of fish species are cultivated in Canada, but much of the lively and sometimes contentious debate centres on the possible environmental consequences of salmon farming, especially in British Columbia and New Brunswick where almost all of the farmed salmon in Canada is produced.

Generally speaking, industry regulation has fallen short of the expectations of conservationists and environmental groups, commercial fishermen, Aboriginal peoples, recreation and tourism interests, waterfront property owners, and other users of the shoreline. Some believe aquaculture and traditional fishing to be mutually exclusive. A perceived lack of willingness on the part of the salmon farming industry to provide others with information on their activities contributes to an overall climate of distrust. Advocates of aquaculture, on the other hand, believe that the regulatory framework is cumbersome, expensive and unduly restrictive. Salmon growers, in particular, repeatedly cautioned that "half-truths" and "unsubstantiated accusations" about their industry were being put forward publicly. Communication, i.e., "getting the right message out" to the public and media, was considered to be a priority by both proponents and industry critics alike.

Canadian aquaculture is at a critical juncture in its evolution. One of the challenges faced by government now and in the years ahead will be to achieve a delicate balance between various competing users of the marine environment (a common property resource). For the Department of Fisheries and Oceans (DFO), whose motives and agenda on aquaculture were frequently questioned in the Committee’s discussions, this will be easier said than done. Opinions on the industry are divided, but there is at least some common ground in the form of shared interests and objectives. For example, neither side wants to see the escape of farmed fish, or transmission of disease, and both want a clean environment as well as more research. In at least some respects, aquaculturists, environmentalists, conservationists and fishermen are potential allies. The task at hand will be to build on common interests and cooperate to ensure that aquaculture will in future be environmentally sustainable and economically successful. Meaningful public involvement will also be necessary to address perceptions of industry secrecy and government’s failure to respond.

One immediate and positive result arose from one of our meetings in St. Andrews, New Brunswick, on 29 February 2000, with representatives of the Department of Fisheries and Oceans Biological Station, the Huntsman Marine Science Centre, the Atlantic Salmon Federation, the New Brunswick Department of Fisheries and Aquaculture, and the New Brunswick Salmon Grower’s Association. Prior to the meeting, the representatives had spent a good deal of time identifying and agreeing on science-based issues. Subsequent to the Committee’s visit, the five groups agreed to meet again, and this eventually led to a proposal for collaborative research to better understand the ecosystem of the Bay of Fundy, where most of the province’s salmon production originates. We were later informed that this spirit of cooperation would not have happened without the stimulus provided by the preparations made in advance of the Committee’s visit. Such dialogue between various interests should be encouraged in order to create more cooperative relationships. We hope that more of this will take place in future.

Clearly, aquaculture promises great returns in many areas. This is especially so in Nova Scotia and Newfoundland, regions where finfish farming is relatively new and where participants can learn from past mistakes. This is also the case for the farming and enhancement of shellfish, activities that are generally considered to be environmentally friendly and that appear to offer economic opportunities for small entrepreneurs and fishermen alike.

Equally clear is that there are legitimate environmental concerns, especially if the salmon farming sector is to expand. This became more evident as the Committee heard more presentations. At this point in time in the sector’s development, it may be fairly said that science firmly supports neither side of the environmental debate. Indeed, our "fact-finding" exercise points to the need for much more scientific research "to ascertain the facts" surrounding many of the issues identified in this report. Suffice it to say that this will be no small task. In British Columbia, for example, a five-volume, 1,800-page Salmon Aquaculture Review (SAR) published by the province’s Environmental Assessment Office, in August 1997, concluded that at current levels of production, salmon farming in B.C. posed a low risk to the environment. That report, however, recommended that a number of new studies be conducted, and strongly cautioned that there were "significant gaps in knowledge" – which has since become an often-used refrain by industry critics.

A number of major developments, government announcements and reports on the industry occurred during the course of our inquiry. In August 2000, for example, the federal Minister of Fisheries and Oceans announced the Program for Sustainable Aquaculture (PSA) – which includes $75 million in new funding, over five years. In February 2001, the Auditor General of Canada tabled Chapter 30 of his December 2000 report. That month, an Expert Panel established by the Committee on Expert Panels of the Royal Society of Canada – a federally appointed, independent scientific body – also released a report on the regulation of food biotechnology in Canada that contains an important chapter on aquaculture. As the first phase of a legislative and regulatory review of aquaculture, the Commissioner for Aquaculture Development submitted 36 recommendations to the federal Minister of Fisheries and Oceans in June 2000; his report, dated March 2001, was made public in late April 2001. Meanwhile, the DFO has been developing a detailed action and implementation plan, which was also recently made public. In British Columbia, where more than two-thirds of Canada’s aquaculture output is produced, the newly elected provincial government there might decide to change its fish farming policies or lift a moratorium that was placed in April 1995 on the issuance of new conventional salmon farm tenures. At the time of writing, New Brunswick was in the process of reviewing applications for new salmon grow-out sites. A new federal aquaculture Act may, in future, be introduced in Parliament.

In many respects, this report is a snapshot in time. Although aquaculture and enhancement is a growing activity in the inland provinces, we limited the scope of our study to the maritime coastal provinces that dominate Canada’s production. The complex, dynamic and shared jurisdictional nature of the industry also forced us to focus on the more important themes. The industry’s reaction may well be that the contents of this document are based largely on speculation and on outdated information because of huge improvements in technology, husbandry, and farm siting. Similarly, the DFO may respond that recent departmental programs – such as the PSA, and initiatives of the Canadian Council of Fisheries and Aquaculture Ministers – are responding to concerns.

We appreciate the keen interest shown by those who so generously made time available to participate in our review. This included finfish and shellfish farmers, fish farm workers, interest groups, research scientists, veterinarians, members of the public, and federal and provincial government officials, including the Minister of Fisheries and Oceans who appeared before the Committee on two occasions. Some matters were beyond our terms of reference dealing with aquaculture, and cannot be dealt with in this report. The dissolution of Parliament and the November 2000 federal election considerably delayed our work.

The Standing Committee on Fisheries and Oceans of the House of Commons has undertaken a similar inquiry on aquaculture. We look forward to the Committee’s report.

Lastly, I would like to thank the Honourable Ray Perrault of British Columbia and the Honourable Melvin Perry of Prince Edward Island, who have since retired from the Senate, for their tireless efforts and valuable contribution to our study. The Committee is indebted to Claude Emery, Research Officer of the Library of Parliament; his knowledge of fisheries as well as his research, analytical and writing skills are greatly appreciated. We also wish to thank our Clerk, Barbara Reynolds, for her exceptional organizational skills, especially in planning our fact-finding visits. We also acknowledge the valuable assistance received from Anne Marleau, our Administrative Assistant, in keeping all our documents in order.

Gerald J. Comeau
Chair

 INTRODUCTION

I believe that aquaculture is now entering a new phase in its development. … I am absolutely convinced that when our descendants look back, in the year 2100 or 3000... , they will view the dawn of the third millennium as the point at which mankind went from fishing to aquaculture. – Yves Bastien, DFO Commissioner for Aquaculture Development, Speaking Notes, Aquaculture Canada ‘99 Trade Show, Conference and Fair, Victoria, B.C., 27 October 1999

I believe that Canada can position itself appropriately. In that way, the Canadian aquaculture and wild fish industries can benefit from Canada being the best in the world in terms of ocean management, food safety, environmental quality, aquatic animal health and overall industry services. – David Rideout, Executive Director, Canadian Aquaculture Industry Alliance, Proceedings, 1 May 2001

World-wide – in virtually every place in the world – coastal environments are seriously degraded because they have been the recipients of well over 200 years of industrial activity. ... (W)orld-wide, salmon aquaculture is the last straw for many coastal environments. ... We are talking about industrial scale feed lots for fish. – Janice Harvey, Director, Marine Conservation Program, Conservation Council of New Brunswick, Proceedings, 24 April 2001

Aquaculture – the cultivation of aquatic organisms, including finfish, shellfish (molluscs and crustaceans), and aquatic plants – is an established practice in many parts of the world and has its roots in ancient times. The Chinese, for example, have been refining their fish culturing techniques for thousands of years. As in agriculture, "aquaculture" (or fish farming) implies some form of intervention (e.g., regular stocking, feeding, and protection from predators). Unlike the traditional capture fisheries, aquaculture implies some form of ownership of the stocks being cultivated.

Globally, total production of cultured fish, crustaceans and molluscs in 1998 was more than 39.4 million tonnes, with Canada contributing less than 3% to this amount. Fish farming has seen phenomenal growth, encouraged by: the rise in demand for fish products (due to population increase and changes in dietary preferences); aquaculture’s continuity of supply, consistency of quality, and control over production (e.g., size, fat content); scientific advances in nutrition, disease control, rearing techniques, and genetics; technological developments in designing fish-rearing installations; and major declines in the world’s major wild fisheries. Resource economists assert that most major stocks of commercial fish have either been fully exploited or are being excessively harvested, and that growth in traditional fisheries is over.

Aquaculture has not only become the source of an increasing percentage of seafood consumed throughout the world, but is also considered to be the fastest-growing agri-food production activity – a trend this Committee predicted more than a decade ago, in its 1987 report on fish marketing.⁽¹⁾ Over the past decade, output is said to have grown at an average overall annual rate of 12%, with some sectors achieving annual growth rates of 20%. World-wide, aquaculturists produce more than one-quarter of the global food fish supply. For the next 10 to 15 years, the Food and Agriculture Organization (FAO) predicts sustained growth, with total production reaching between 35 to 40 million tonnes by the year 2010, or between 35 to 40% of the total fisheries production by weight. Up to 40% of international revenues generated by fish may result from fish farming. In North America alone, demand for seafood is expected to increase by as much as 40% by the year 2010.

Since its inception in the early 1980s, the salmon industry has grown exponentially. In 1997, for the first time, the world’s production of farmed salmon of just over 900,000 tonnes surpassed the global wild catch of 728,000 tonnes. Farmed salmon is worth more than $7 billion, about four times the value of the world’s wild harvest of salmon; and more growth for salmon farming is foreseen, particularly in Norway and Chile, with production projected to reach 1.9 million tonnes during the decade. Globally, other trends include lower production costs, the diversification of product lines, and industry rationalization – a trend that began in the 1990s and that is expected to put continued downward pressure on prices and possibly harm smaller producers’ ability to compete.

Aquaculture is often heralded as the next step in an evolutionary process, similar to that which led to our obtaining meat from farming and ranching rather than from hunting. Others are of the opinion that aquaculture will continue to supplement the traditional capture (or "wild") fisheries, but will never entirely displace them because wild stocks of fish, when properly managed, tend to have high reproductive rates and can generally withstand high harvest levels.

There has been increasing global concern and controversy about the possible impacts of aquaculture on the marine environment or ecosystem. For example, aquatic farming is promoted by some to be the logical way to lessen fishing pressure on threatened or declining wild fish stocks, and to "help feed a hungry world." That view is challenged by those who contend that the consumption of farmed finfish, such as salmon, is likely to have the opposite effect. For one thing, it is said that the industry relies heavily on pelletized feed made from wild-caught fish harvested off the shores of developing countries (e.g., South American anchoveta, jack mackerel, sardine); for another, the species farmed are mostly luxury food items sold in the developed countries. Several people in our discussions also spoke of the "fish meal dilemma," which they characterized as both a moral and economic problem: they said it takes 3 (or 4) kg of wild-caught fish to produce one kg of farmed carnivorous fish (e.g., salmon) for market. In other words, a net loss of fish protein results in this so-called "protein-short world." One witness put it this way:

Salmon farms are remarkably inefficient at converting biological industrial inputs into product. ... (T)o "manufacture" the food required by a salmon farm, the farm requires the marine support area of 40,000 to 50,000 times the surface area for cultivation. In other words, for every square meter of a fish farm net area, you require between 40,000 and 50,000 square meters of ocean surface area to produce the fish that those salmon will eat. ... (T)he European fish farming industry requires the production of 90 per cent of the North Sea to keep it afloat. Therefore, 90 per cent of the primary production in the North Sea, at present, is going toward fish farming, which is the direction that we are taking. Right now, the industry is succeeding on the backs of the South American fisheries, but now they are slowly kicking us out. We will be forced to extract those resources from other waters. – John Volpe, Department of Biology, Centre for Environmental Health, University of Victoria, Proceedings, 9 May 2001.

Others, however, assert the following claims: the feed conversion ratio has greatly improved in recent years; species harvested to produce fish meal/fish feed are those not normally consumed by people and have little commercial value; aquaculture feeds represent a small percentage of the world’s total production of animal feeds derived from fish; and fish produce more protein than is obtained from land-based meat production.⁽²⁾ On the amount of harvest needed to produce fish feed, we were reminded that an ecosystem is a complex web; as such, significant tinkering with any part of it can set up a continuum of results that flow throughout the whole.

B. Canadian Aquaculture

Through annual growth rates in our market of 10 to 20%, aquaculture in Canada could easily reach $2 billion a year in sales later in this decade. – The Honourable Herb Dhaliwal, PC, MP, Minister of Fisheries and Oceans, Proceedings, 15 February 2000

‘Will Canada be a world leader in aquaculture or a secondary player? … We are starting out ... with a rather ironic handicap – a strong fishing industry and a still abundant supply of marine resources. ... It is up to us to capitalize on the immense expertise of the fisheries sector ... and join with them in R&D, industrial partnerships and joint projects that meet the needs of both sectors. – Yves Bastien, DFO Commissioner for Aquaculture Development, Speaking Notes, Aquaculture Canada ‘99 Trade Show, Conference and Fair, Victoria, B.C., 27 October 1999

... (T)here is an enormous divide between what the salmon farming industry and their supporters within government say and what members of the environmental community, First Nations and independent scientists say on this topic. – Lynn Hunter, Fisheries and Aquaculture Specialist, the David Suzuki Foundation, Proceedings, 9 May 2001

We did not think that we wanted to take on the whole of the country. We felt that would be somewhat unmanageable for something that seemed as tricky as aquaculture, and so we limited the scope to the West Coast and to the effect on wild salmon stocks. Perhaps our scope could have been broader... – Ronald C. Thompson, Assistant Auditor General, International Affairs, Proceedings, 2 May 2001

In Canada, aquatic farming is not an entirely new endeavour. By the early 1880s, the federal government had been operating a network of fish hatcheries geared to public stocking programs.⁽³⁾ In fact, Canadians are recognized the world over as pioneers in the field of fish farming. However, it was not until the 1970s that facilities began to produce on a commercial scale. In the 1980s, Canadian aquaculture grew very quickly to become a thriving commercial industry providing direct and indirect economic benefits to many regional and local economies. Today, the industry is a mosaic of small, medium, and large-scale vertically integrated operations. It also varies across the country as to its size and age. Commercial ventures have been established in all ten provinces and in the Yukon Territory. The species cultivated include finfish (e.g., salmon, trout, sea trout or "steelhead," Arctic char, tilapia, perch, walleye), plants (a variety of seaweed), and shellfish (e.g., oysters, clams, scallops, mussels). New species (e.g., cod, wolffish, haddock, halibut, flounders, sturgeon, striped bass, abalone, sea urchins, sea cucumbers, prawns, clams, scallops) are in the experimental stages of development or being cultured in small quantities.

Broadly speaking, several factors have helped to spur the Canadian industry: an increase in the overall demand for seafood domestically and in export markets; declining populations of wild stocks; the fact that traditional capture fisheries that have reached their limits; improvements in production and transportation techniques; and proximity to the United States market. In aquaculture, once the appropriate size of the species being cultivated is reached, the "crop" is harvested, processed and shipped to market, often arriving within hours of leaving the water. Unlike the cyclical wild fisheries, aquaculture affords a predictable and stable supply of product to market.

At $429 million in 1998, aquaculture accounts for approximately one-quarter of the total value of the fish and seafood produced in Canada (Tables 1 and 2). About 70% of Canada’s production is exported, primary markets being the United States and Japan. Canadian producers are, however, relatively minor players in global terms; the amount produced represents less than 1% of the total value of world output. Although regulation is perceived by its producer members as an impediment to growth, the Canadian industry has been growing at a remarkable pace. The volume of output, which has doubled since 1989, is said to be expanding at an impressive average rate of about 15% per year; if production predictions are met, the industry will exceed $1.5 billion in sales by the year 2005. Aquaculture is said to have enormous potential for growth because of Canada’s 244,000 kilometres of largely untapped coastline on the Pacific, Arctic and Atlantic oceans, its abundant freshwater resources, its reputation for high-quality fish products, and its world-class science and technology infrastructure. Many hope that, with a commitment of resources, Canada will once again become a major world producer of seafood, a position that has been in decline since the 1950s.

Table 1 – Canadian Aquaculture Production, 1998
(Tonnes)

1. includes Char, Other Finfish and Total Alberta Finfish.
2. excludes Confidential Data.
3. excludes "other" for provinces.
   

Note: Some data are confidential and not reported; subtotals are therefore greater than the sum of the data listed. The production and value of aquaculture include the amount and value produced on sites, and exclude hatcheries or value added products. The data are collected from each of the provincial departments responsible for aquaculture.

Source: Department of Fisheries and Oceans, Statistical Services.

The source and notes for Table 1 also apply to Table 2.

In Canada, the cultivation of finfish accounts for the largest percentage of aquaculture’s annual output; finfish accounted for 74% of total aquaculture tonnage in 1998-1999, and 92% of the industry’s value. The balance of production came from the shellfish sector, which accounted for about 24,000 tonnes valued at $34 million. Salmonids⁽⁴⁾ are the most popular cultivated species because of established farming methods and markets. The Atlantic salmon (Salmo salar) has become the major choice of Canadian salmon growers for a variety of reasons, including faster growth rates, greater tolerance for higher stocking densities, superior disease resistance, and more efficient feed conversion rates. About 85% of Canada’s production is Atlantic salmon, the other species being steelhead trout, and chinook and coho on the West Coast. When fish farming was first introduced in British Columbia in the 1970s, two species of Pacific salmon (chinook and coho) were farmed almost exclusively. Later, for economic reasons, salmon farmers switched predominantly to Atlantic salmon.

Most of the farmed salmon in Canada is produced in British Columbia and New Brunswick, where aquaculture is a firmly established and well-developed activity. Geographically, salmonid farming in the Pacific and Atlantic regions is also strongly localized. In British Columbia, most farms are located in the waters of the Broughton Archipelago, on the mainland coast next to the north-east coast of Vancouver Island. On the East Coast of Canada, the largest concentrations of this sector are found in the Bay of Fundy where the powerful tides are said to provide an ideal environment for cultivation. In B.C., where about two-thirds of the total Canadian output is produced, farmed salmon has become the largest agri-food export. The sector also has the highest level of foreign ownership; two multinational companies control more than half of the province’s production. In New Brunswick, where ownership is less concentrated, there are strong linkages with its counterpart in the State of Maine in terms of investment by New Brunswick producers.

Levels of salmonid production are considerably smaller in Newfoundland and Nova Scotia – provinces that are relative newcomers but that have nonetheless experienced high rates of growth in recent years. The activity is also expected to expand considerably. In Newfoundland, the production of finfish is mostly steelhead trout and Atlantic salmon. Shellfish aquaculture is based primarily on mussels, and the province’s strategic plan also focuses on the grow-out of Atlantic cod. Nova Scotia’s finfish sector is based primarily on the rearing of salmonids, but many other species are cultivated as well. Unlike the situation elsewhere, the aquaculture sector there was said to be diverse, not concentrated in any one particular region, with sufficient water available to it for expansion. The hope was often expressed to us in Nova Scotia that the province would become a world leader in alternative species development.

The salmon farming cycle begins with the collection of eggs and milt from broodstock (on-farm broodstock, wild stock, or an imported source) selected for their known desirable characteristics (e.g., fast growth, disease resistance, flesh colour). Fertilized eggs are incubated in freshwater in a controlled hatchery environment (primarily in round fibreglass tanks) where temperature, oxygenated water, and other conditions are managed. The fish are usually inoculated, sometimes individually, to prevent disease and, once a specific size or developmental.

stage is reached, they are transferred to grow-out sites. These so-called "salmon farms" typically consist of a series of large netted, suspended, cage-like structures placed in flowing, open, near-shore marine (saltwater) sites. Netting to deter predators is commonly placed around the perimeter of the cage. In this setting, the fish are given specific diets of pelletized feed (a major production cost for finfish) until they reach marketable size. We were told that flesh colour and fat content can also be manipulated depending on the type of feed and colouring agent used. The length of the seawater grow-out phase depends on the species and stock being raised, smolt size, water temperature, feeding practices, and a variety of other factors. For salmonids, this phase can last anywhere from 12 to 16 months. Put simply, the goal is to grow the largest quality fish, in the shortest possible time, and at the least possible cost. With about 6% of total world production, Canada is the world’s fourth-largest producer of farmed salmon after Norway, Chile and the United Kingdom.

Mussels, oysters and a variety of clams are the mainstay of those who cultivate shellfish, a species group that is very much in demand. Shellfish farming evolved from a series of local experiments to become a thriving industry in Nova Scotia, New Brunswick, Newfoundland, Quebec, British Columbia and Prince Edward Island. On both coasts, shellfish farms are primarily small and medium-size, owner-operated companies. In PEI, which is the largest shellfish producer, five processors account for the majority of shellfish production; blue mussels predominate. Canadian shellfish aquaculturists compete primarily with producers in the United States (mainly from the states of Washington, Oregon, North and South Carolina, Florida and Virginia). Other competitors are located in Chile, New Zealand and Asia.

The growing process for shellfish begins with the collection of seed stock (or "spat") normally from the wild, or from hatchery production. Unlike finfish aquaculture, the ebb and flow of tides and water movement provide the basic food source for shellfish. Thus, successful shellfish farming depends on: the ability to grow the seed over time in areas where there are sufficient nutrients in the water; steady and reliable water temperature ranges and flows; and favourable climatic conditions such as wind and weather. Depending on the species being cultured, the grow-out stage may involve bottom culture (where the growing takes place on the sea bed), near-bottom culture (on structures constructed on the bottom), or off-bottom culture (on structures suspended in the water between the surface and the bottom). For example, scallop larvae may be collected in the wild by using mesh bags stuffed with a special type of material. There they may be grown until collected and transferred to appropriate sites on the ocean bottom, or on hanging lines.

Part of the problem with aquaculture is that some jurisdictions are divided between provincial and federal governments. We need to look at how to harmonize some of those. – The Honourable Herb Dhaliwal, PC, MP, Minister of Fisheries and Oceans, Proceedings, 15 February 2000

This industry does not have parity with either the wild fishery or with terrestrial farms, so there is a competitive disadvantage... – David Rideout, Executive Director, Canadian Aquaculture Industry Alliance, Proceedings, 1 May 2001

If you look back over the course of time, and the events which I have recounted, I am sure that you will understand if I tell you that the aquaculture sector has heard the talk but is still anxious to see the walk. – Yves Bastien, DFO Commissioner for Aquaculture Development, Proceedings, 22 February 2000

Quebec recognizes the need to work in conjunction with the federal government to improve consistency and harmonize the legal and regulatory regimes regarding aquaculture. Quebec believes that such discussions need to be conducted bilaterally and not within the federal-provincial group. – Rémy Trudel, Minister of Agriculture, Fisheries and Food, In Reaction to the Recommendations of the Task Group on Aquaculture and the Program for Sustainable Aquaculture, 17 August 2000

Five years ago, if an individual applied for a site licence, that individual had to go through 22 departments and/or agencies, federal and provincial. After all the work we have done in five years, we have it down to only 15. – Jerry Ward, Assistant Deputy Minister, Department of Fisheries and Aquaculture, Newfoundland and Labrador, Proceedings, 4 October 2000

Huge progress has been made in terms of working with the federal government on environmental assessments and permitting approval. – Peter Underwood, Deputy Minister, Department of Agriculture and Fisheries, Nova Scotia, Proceedings, 15 May 2001

Aquaculture straddles the line between fishing and farming. More significantly, compared to other countries, the Canadian jurisdictional context is complex and unique. Unlike the case of the traditional common property (capture) fisheries, the responsibility for overseeing aquaculture is shared between the provinces (and territories) and the federal government.

Although the Constitution Act, 1867 does not specifically mention aquaculture, judicial interpretation of constitutional powers makes it clear that the provinces have the power to regulate many of its aspects. The most far-reaching provincial authority is over property and civil rights. The scope of permissible provincial regulation includes the following: the management and use of Crown land; the licensing of aquaculture operations; the setting of standards for the business of aquaculture and those who conduct it; local marketing and consumer protection; waste management; and labour relations and employment standards. Some provinces have proclaimed Acts dealing with aquaculture, while at the local level, regional districts and municipalities administer zoning bylaws. With one exception,⁽⁵⁾ the provinces are responsible for aquaculture planning, site leasing, and the majority of approvals for aquaculture sites, aquaculture training and education, the collection of statistics, the promotion of fish and aquaculture products, and the management of the industry’s day-to-day operations.

The Parliament of Canada also enjoys constitutional power that touches on the subject of aquaculture. This includes the power to legislate in relation to federal public property, sea coast and inland fisheries, navigation and shipping, and Indians and land reserved for Indians. These powers have been interpreted to allow the federal Parliament to pass laws to: preserve and protect the environment of wild fish; control marine traffic and pollution in Canadian waters; and require environmental assessment of projects that have any effect on matters within federal legislative jurisdiction.

Aquaculture is not defined as a fishery under the Fisheries Act, although the Act’s provisions pertaining to fish habitat (section 35) and the deposit of deleterious substances into water frequented by fish (section 36) apply to it. Under the authority of the Fisheries (General) Regulations made pursuant to the Fisheries Act, the DFO may authorize activities such as the collection of fish for stocking or artificial breeding from the wild stocks, and the release of live fish into fish habitat. Pursuant to the Fisheries Act, the Management of Contaminated Fisheries Regulations give the DFO the ability to close any fishery where toxicity or contamination reach unacceptable levels. The federal Fish Health Protection Regulations require all shipments of live salmonids (including eggs) into Canada or between provinces to come from facilities certified as being free of certain diseases. The Fish Inspection Act and its regulations govern the safety and quality of fish products. The Navigable Waters Protection Act – one of the oldest pieces of federal legislation – protects the public’s right of navigation. The Canadian Environmental Assessment Act, the Feeds Act, the Health of Animals Act, the Food and Drugs Act, the Canadian Environmental Protection Act, the Pest Control Products Act, and the Migratory Birds Convention Act are other important federal statutes.

Also, the responsibility for regulatory enforcement is sometimes split between departments within each level of government. At the provincial level, regulations are overseen by health departments, environmental departments, fisheries departments, lands and forest departments, agriculture and transportation departments, labour department worker safety requirements, and a host of aquaculture site-specific local rules and requirements. In British Columbia, for example, we were told that more than 14 federal, provincial and municipal departments and agencies are directly and indirectly involved in the regulatory and management process of fish farming. Regulations and required management practices may cover issues ranging from worker safety requirements on fish farm sites, to specifying the equipment and supplies used to construct and operate the fish farms (e.g., the use of materials that bio-degrade, the content of fish feed, the testing of water quality, the use of antibiotics).

At the federal level, the DFO plays the lead role, with 16 other federal departments and agencies having responsibilities relating to aquaculture.⁽⁶⁾ Committee members were informed that an Interdepartmental Aquaculture Steering Committee, chaired by the DFO, has been formed for matters that require consultation and discussions between them. They were also reminded that, over the past 20 years, the DFO had been involved in numerous reviews and studies reinforcing the potential of the aquaculture industry in Canada. The following bullet points briefly summarize the major federal initiatives in support of aquaculture:

• In the 1970s and 1980s, the DFO established a core science capability that helped build the aquaculture industry in Canada and in some other countries.
• In 1983, the DFO and the Science Council of Canada sponsored the First National Aquaculture Conference.
• In 1984, the Prime Minister named the DFO as the lead federal agency responsible for aquaculture.
• In 1986, First Ministers agreed to a statement of national goals and principles for the development of aquaculture.
• Between 1986 and 1989, Memoranda of Understanding (MoUs) were negotiated and signed with six provinces and one territory, to clarify the delineation of responsibilities between the levels of government. This was followed by the launching of MoU implementation committees. The MoUs are "customized" to meet the needs of the industry in each province or territory and have been used over the years for the administration of the industry.
• In 1988, the Standing Committee on Fisheries and Oceans of the House of Commons (then chaired by the chair of this Committee) tabled a study entitled Aquaculture in Canada, which recommended that the federal Fisheries Minister take a pro-active role in supporting aquaculture development in Canada. The House Committee recommended that a senior-level service headed by an Assistant Deputy Minister be created "to serve as the co-ordinative focus for all aquaculture activities particularly those taking place within the Science Sector."
• In 1989, the Standing Senate Committee on Fisheries tabled a study on the marketing of Atlantic fishery products (Report III on the East Coast Fisheries). During its deliberations, it was suggested to the Committee that the DFO establish a section within its organizational structure to deal specifically with aquaculture and to coordinate the efforts of various other government departments. The Committee recommended that the DFO create a senior-level service headed by an Assistant Deputy Minister to coordinate all aquaculture activities. In his November 1990 response, the Minister of Fisheries and Oceans "disagreed" with this proposal, stating that it was premature to consider an ADM for aquaculture, and that a new position of Director of Aquaculture had been approved to coordinate departmental and governmental activity.
• In 1990, the DFO launched a strategy for the development of aquaculture.
• In 1992, the DFO appointed a Director of Aquaculture Policy to provide leadership for aquaculture development within the Department and the federal government. Shortly after, departmental and inter-departmental Aquaculture Steering Committees were established, followed by the first Aquaculture Planning Forum in Montreal.
• In 1994, the DFO commissioned a national opinion poll that revealed widespread public support for aquaculture development.
• In 1995, the DFO announced the Federal Aquaculture Development Strategy (FADS), a framework or "blueprint" for federal initiatives in support of industry development. The Strategy identified aquaculture as a legitimate user of land and water and a priority for the federal government, and confirmed the DFO as the lead department within the federal government.
• In 1996, a Liberal Caucus Task Force on Aquaculture led by George Rideout and Herb Dhaliwal concluded in a report (entitled Aquaculture: Cultivating Potential) that the federal government has an obligation to actively assist and promote aquaculture. The Task Force recommended that responsibility for aquaculture be given to a separate agency, headed by a Deputy Minister (DM) or equivalent, to initiate, advance and coordinate all government activities related to aquaculture.
• In 1997, the Liberal government announced its commitment for federal support of aquaculture. The federal Liberal Party’s 1997 election platform (Securing our Future Together: Preparing Canada for the 21st Century) stated that improved support for the aquaculture industry by the federal government and its agencies would foster more rapid growth of the industry. The document contained a promise to appoint a Commissioner for Aquaculture Development who would report to the Minister of Fisheries and Oceans.
• In December 1998, Mr. Yves Bastien, the first-ever federal Commissioner for Aquaculture Development, was appointed for a four-year term. The creation of this position was a direct response to a policy commitment made by the government in the 1997 federal election.
• In April 1999, the DFO established its Aquaculture Restructuring and Adjustment Directorate to consolidate the Department’s policy and programs in cooperation with the newly appointed Commissioner.
• In June 1999, the Department held two roundtables – one with stakeholders and one with provinces and territories – to review the state of the industry and to determine whether the Federal Aquaculture Development Strategy was still relevant. At the roundtables, the 1995 Strategy was confirmed as the appropriate approach for the federal government to take; participants urged the federal government to implement the FADS without further delay.
• In August 1999, Herb Dhaliwal was named Minister of Fisheries and Oceans, at which time the Minister immediately stated that the development of a sustainable aquaculture was a priority.
• In September 1999, in Quebec City, the Minister of Fisheries and Oceans signed an agreement on inter-jurisdictional cooperation with his provincial and territorial counterparts to identify shared priorities. The federal/provincial/territorial ministers unanimously endorsed the goal of making Canada a world leader in sustainable aquaculture.
• In October 1999, the federal government announced the launch of a new Aquaculture Partnership Program (APP) aimed at helping the industry in the various regions to develop partnerships and to collaborate on projects of national or regional significance. Later, in April 2000, the Fisheries Minister and the Commissioner for Aquaculture Development announced $401,650 in funding for four projects under the APP.
• In April 2000, the Atlantic Council of Fisheries Ministers (ACFM) recognized the importance of aquaculture for Canada through the inclusion of "aquaculture" in the official title of the Council for future meetings.

Under the 1995 Federal Aquaculture Development Strategy, federal initiatives in aquaculture have been primarily directed toward: supporting infrastructure (i.e., research and development, education and training, etc.); creating a regulatory and policy framework conducive to industry development; and improving industry/government partnerships. We were informed that the implementation of the FADS was delayed in the years immediately following its release. This was because no resources were available to implement the Strategy as a result of severe budgetary cuts within the federal government.⁽⁷⁾

As noted previously, the federal government has since renewed its commitment to federal support of aquaculture. In brief, the DFO told the Committee that it had adopted a multi-pronged approach to the sustainable growth of aquaculture. The Department has been working to put in place an updated policy framework for operational decision-making. Under the auspices of the Canadian Council of Fisheries and Aquaculture Ministers (CCFAM), a Task Group was established as a mechanism for intergovernmental cooperation and information-sharing. A national code for sustainable aquaculture is being developed, and it is hoped that it will be linked to local industry codes that have already been developed.

The Department has also made a commitment to make strategic investments in federal capacity to support and to promote the Federal Aquaculture Development Strategy. The establishment of a new DFO Directorate was said to be the first step in that direction. On 8 August 2000, the federal Minister of Fisheries and Oceans announced the Program for Sustainable Aquaculture; this includes $75 million in new funding, over five years. The investment: aims to strengthen the ties between levels of government, the scientific and academic communities, and the industry itself; and is intended to provide the public and private sectors with opportunities to conduct leading-edge research and development, to strengthen measures to further protect human health through an enhanced shellfish water quality monitoring program, and to implement a legislative and regulatory framework for the industry.

The new funding includes: $32.5 million for Science, and Research and Development (which includes $20 million for the Aquaculture Collaborative Research & Development Program, or ACRDP); $20 million for a Human Health Program; and $22.5 million for an Improved Management and Regulatory Framework. Also announced was the establishment of an Office of Sustainable Aquaculture (OSA), which is responsible for: implementing changes to the legal and regulatory framework for aquaculture; updating the DFO’s policy framework for operational decision-making; working with the provinces to establish federal-provincial mechanisms for cooperation and harmonization; and overseeing strategic investments in federal capacity to support and promote the FADS.⁽⁸⁾

In the first phase of his Legislative and Regulatory Review of Aquaculture in Canada, the Commissioner for Aquaculture Development submitted 36 recommendations to the Minister of the DFO in June 2000, which were made public in April 2001.⁽⁹⁾ The report’s proposals deal mostly with policies, many of which are "considered to be temporary until more fundamental legal gaps are addressed." Currently, the DFO is addressing the report’s recommendations on aquatic animal health, and on government-ordered eradication of fish (and compensation) through a National Aquatic Animal Health Program. The second phase of the review is expected to clarify and define the key policy principles in aquaculture, which the Aquaculture Commissioner deemed "essential prior to the overhaul of the current legal regime."

The DFO’s strategic plan for aquaculture has two objectives: first, "to increase public confidence in environmentally sustainable aquaculture development"; second, "to increase the industry’s global competitiveness." To achieve these objectives, the Department has developed an action plan based on four themes: a healthy environment; healthy fish and quality products; the shared use of our aquatic resources; and a competitive industry. The action plan in turn consists of five core activities: the Program for Sustainable Aquaculture; the creation of an enabling policy environment; the development of a national aquatic animal health strategy and program; increased federal-provincial harmonization of various aquaculture activities (in recognition of the shared jurisdictional nature of the aquaculture sector); and the creation of an enabling regulatory environment.

On the regulatory environment, short-term work currently underway by the Department includes:

• clarification of the Canadian Environmental Assessment Agency (CEAA) process as it applies to aquaculture with the development of a national guide outlining information requirements to assess the environmental effects of marine aquaculture;

• development of a national guidance document on the application of section 35 of the Fisheries Act to aquaculture;

• development of a report on the application of section 36 of the Fisheries Act to aquaculture;⁽¹⁰⁾

• the finalization of an introduction and transfer code for aquatic organisms;

• the development of national guidelines for the application of fish management authorities to aquaculture;

• development of guidelines for Navigable Waters Protection Act (NWPA) site design and marking for aquaculture; and

• a review of the duration of NWPA approvals.