Appearance before the House of Commons Standing Committee on Public Accounts (PACP)
Auditor General of Canada’s Report 12: Protecting Canada’s Food System
DFO Parliamentary Affairs, February 2022

Table of contents

• Opening remarks
  • Introduction
  • Auditor general’s report 12, protecting Canada’s food system
• Conclusion
• Canadian Seafood Stabilization Fund
  • Background
• Blue Economy Strategy
  • Ocean as a reliable source of food
  • Role of the Blue Economy Strategy in food security now and in the future
  • Background
• Fish Harvesters Benefit and Grant Program
  • Overpayment letters to wage-earning crew
  • Benefit eligibility/unclear eligibility criteria
  • Applicants turned down
  • Indigenous applicants/alternate sources income information
  • Appellants claiming their CRA information was incorrect
  • Program tax expertise
  • Program payments
  • Phase-two applications
  • Background
• Anticipated questions and answers
  1. What was the role of the department in the design and oversight of the canadian seafood stabilization fund (CSSF)?
  2. Why did DFO and RDAs not develop specific targets and performance indicators related to sustainable development commitments and GBA+ outcomes during program design?
  3. How will the guidance developed by DFO ensure that relevant targets and performance measures are developed for future initiatives to inform Canadians on the department’s contributions to sustainability and gender and diversity outcomes?
  4. To what extent was the Canadian Seafood Stabilization Fund aligned with existing Sustainable Development Goals?
  5. How were funding decisions made?
  6. What was the CSSF allocation per region?
  7. How did DFO make use of existing mechanisms to expedite program design?
  8. Was the overall design of the program fair and equitable ?
  9. Why were fish and seafood processors in Ontario and northern Canada not included in the CSSF?
  10. Why did the use of repayable contributions differ across regions?
  11. DFO, how would you support AAFC in designing emergency food programming based on your experiences during covid?
  12. How is DFO contributing to food security?
  13. In light of the numerous letters that were sent to recipients of the fish harvester benefit fund, will fishers that were paid a share of the profits and not a wage be able to keep their benefits?
  14. How did DFO monitor and reported on the fund’s performance?
• Management action plan

Opening remarks

Introduction

“Good morning, Mr. Chair and committee members. “

I’m joined by two of my senior officials from Fisheries and Oceans Canada, including:

• Niall O’Dea, Senior Assistant Deputy Minister, Strategic Policy
• Hugo Pagé, Assistant Deputy Minister and Chief Financial Officer

Auditor General’s report 12, Protecting Canada’s food system

The Canadian Seafood Stabilization Fund was one of the emergency support programs implemented in response to the COVID-19 pandemic.

This temporary fund was established to support Canada’s fish and seafood processing sector through the crisis, support economic recovery, and to help in supporting broader food security objectives during a period of significant uncertainty in Canada and around the world.

This fund provided $62.5 million in new temporary funding to the fish and seafood processing sector.

It helped fish and seafood processors put in place health and safety measures to help protect workers against COVID-19 and maintain Canadian jobs.

It also helped to increase plant capacity to process, store, package, and distribute healthy, high-quality products, and to adapt processes and marketing to suit changing consumer demands.

In establishing this Fund, we took an approach that leveraged already established program infrastructure to deliver funding support in an effective and timely way.

The Fund was developed in collaboration with Regional Development Agencies; including Atlantic Canada Opportunities Agency (ACOA); Canada Economic Development Agency for Quebec Regions (CED); and  Western Economic Diversification Canada (WD) (now PacifiCan); RDAs took a leading role in delivering this important funding to organizations on the front line.

This audit recognizes the speed in which the design and development of the emergency measures were put in place and the effectiveness of the coordinated response. Leveraging existing mechanisms from previously established programs, and directing funding and delivery through the three Regional Development Agencies that serve the Atlantic and Pacific Regions, removed the need to build a new program from scratch.

Despite the need for a rapid response, the audit found that the Fund met requirements for accountability and transparency. It applied the needed oversight controls for the review and approval of applications, largely met service standards for funding decisions, and applied the proper oversight of spending by documenting the approval and tracking of payments to recipients.

The Fund provided $62.5M for 245 projects supporting businesses and organizations in the Canadian fish and seafood sector with approximately 5 per cent of funding going to businesses owned by women and 9 per cent to Indigenous-owned businesses. The funding helped the sector overcome challenges associated with the COVID-19 pandemic by increasing cold storage and inventory capacity, supporting retooling technologies and marketing efforts, and enhancing health and safety measures to minimize risk to workers. 

Although the fund was intended to address immediate, unprecedented challenges due to the pandemic, we recognize the importance of developing targets and indicators that help us to measure and report on program contributions toward sustainable development commitments and to gender and diversity in order to improve assessment and outcomes.

As such, the Department agrees with the recommendation made by the Auditor General to ensure that future food-related initiatives measure and report on contributions to sustainable development and to Gender-Based Analysis Plus.

We addressed this recommendation by developing guidance material to support program managers (or programs) to better align program results with federal and departmental sustainability goals and GBA Plus. These guidance materials will be used by existing and future programs, including those supporting future food-related initiatives. This will reinforce the importance of considering both sustainable development and the needs of diverse groups across Canada in the planning and delivery of programs, as well as when measuring their results.

Conclusion

Thank you, and we would be pleased to answer any questions you may have.

Canadian Seafood Stabilization Fund

The $62.5 million Canadian Seafood Stabilization Fund was established to support the marine commercial fish and seafood sector, which is the primary economic force in many coastal and rural communities.

Due to COVID-19,the sector faced unprecedented challenges. The Fund was established to help processors increase storage capacity, adopt new worker health and safety measures, and adapt to changing market conditions.

The Fund has been delivered by the three Regional Development Agencies that serve the Atlantic and Pacific Regions. Processors in other regions were encouraged to work with Regional Development Agencies to discuss their needs, given the suite of eligible supports under other programs.

Background

• processors of ocean-based fish and seafood products (including products from marine aquaculture) in the Atlantic and Pacific regions were able to obtain funds for the following activities: increasing storage capacity to more effectively deal with raw materials and inventory; adopting new equipment for worker health and safety, improved product quality, updated packaging and increased productivity; and conducting market adaptation activities (developing or adapting products to respond to new market demands, and conducting market development and entry activities, including viable transportation solutions)
• the CSSF was delivered by the three Regional Development Agencies (RDAs) serving the Atlantic and Pacific regions: the Atlantic Canada Opportunities Agency (ACOA), the Canada Economic Development Agency for Quebec Regions (CED); and Western Economic Diversification Canada (WD)
• processors falling outside of the scope of the CSSF were eligible for funding under the Relief and Recovery Response Fund (RRRF), which provided almost $1 billion in support for small and medium-sized businesses through RDAs and the national network of Community Futures Development Corporations, with funding subject to eligibility criteria and funding priorities for each region.

Blue Economy Strategy

Canada has a unique opportunity to restore and safeguard the health of our oceans, build opportunities for our coastal communities and sectors, and contribute to the fight against climate change.

With the ocean economy rapidly expanding globally, Canada must adopt a clear strategic direction to seize these opportunities for environmental and social benefits and inclusive growth.

That is why the Government will bring forward an integrated, whole-of-government Blue Economy Strategy for Canada.

A healthy ocean is critical to sustainably grow our ocean economy. Canada is well-positioned to demonstrate to the world that this can be done responsibly, with the longest coastline in the world, direct access to three oceans, cutting-edge ocean science, and a strong track record on oceans protection and conservation.

Importantly, this work will build greater resilience in coastal regions and communities that rely on and contribute to our blue economy.

Ocean as a reliable source of food

As noted by the High Level Panel for a Sustainable Ocean Economy, the production of ocean food is crucial to enhancing food security, human health and well-being and preventing widening inequality.

With global demand for fish and seafood projected to increase seven to nine per cent yearly, it will be important for Canada and other countries around the world to ensure that wild-capture fisheries operate at sustainable levels in terms of catch volumes.

Role of the Blue Economy Strategy in food security now and in the future

International consumers are paying increasing attention to the sustainability of the fish and seafood they consume. The future prosperity of the Canadian sector will be dependent on securing the value-added from a sustainable and ethical product, supported by investments in efficiency, environmental performance, value-creation and improved gear technology.

Canada’s industry is primarily comprised of small-scale, owner-operator commercial fishers, and is well-positioned to be leaders in promoting an ethical and sustainably-focused sector.

The Blue Economy Strategy will examine policies and the regulatory environment to ensure proper supports are in place for our small and medium-sized ocean-based enterprises. This will provide better protection for Canadian fish and seafood exports as sustainability requirements increase globally.

Release of the engagement report

Canadians engaged actively in the Government’s extensive consultations to offer their ideas and advice on what should be included in the Strategy.

It is expected that the “What We Heard Report” will be released in the next few weeks.

Release of the strategy

I expect that the Blue Economy Strategy will be released the first half of the year.

Integrating climate change in the Oceans Act (If pressed):

Our government recognizes the important role that our oceans play in addressing the global biodiversity crisis and in mitigating the impacts of climate change.
We know that protecting ocean areas can mitigate or slow the loss and degradation of biodiversity and, at the same time, help maintain important carbon sinks or stimulate new carbon sequestration through the restoration of degraded coastal habitats.

This is why we have committed to amend the Oceans Act to meaningfully address climate change considerations.

Modernizing the Oceans Act will provide an opportunity to showcase global leadership at the unique cross-roads of marine conservation and climate change policy.

Background

• developing a comprehensive Blue Economy Strategy (BES) is a key mandate commitment for the Minister of Fisheries, Oceans and the Canadian Coast Guard
• on December 16, 2022 the Prime Minister mandated the Minister to “Continue working with business, academic institutions, non-profits, provincial and territorial governments, and Indigenous partners to grow Canada’s ocean and freshwater economy and support the long-term sustainable growth of Canada’s fish and seafood sector, ensuring Canada is positioned to succeed in the fast-growing global ocean sectors of the blue economy and advancing reconciliation, conservation and climate objectives.”
• the BES public engagement process was officially launched on February 8, 2021 and ended on June 15, 2021. Over a span of 158 days, engagement occurred with provincial, territorial and Indigenous partners and a wide range of Canadians involved in ocean industries, environmental and social justice initiatives, academia, science, and research and development through a series of virtual roundtables and meetings with the previous Minister of Fisheries, Oceans, and the Canadian Coast Guard, the Parliamentary Secretary, and senior departmental officials. All Canadians were also encouraged to share their feedback by answering online survey questions or by submitting written input
• the response to the blue economy engagement activities was extensive. A ‘What We Heard’ report summarizing the input received is currently being developed and is expected to be released in late January / early February 2022
• the World Bank defines the blue economy as, “the sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health.”
• the blue economy includes a diverse range of oceans-based sectors (e.g., commercial fisheries, aquaculture, marine transportation, offshore-oil and gas, shipbuilding, port and harbour infrastructure, and tourism) that generate economic and social benefits for individuals, communities, and coastal nations around the world
• the global blue economy prior to COVID-19 was rapidly expanding and creating significant opportunities for growth. As per a 2016 report by the Organization for Economic Cooperation and Development (OECD), global economic activities tied to the oceans was projected to double to over CAD $4 trillion by 2030. The blue economy has the potential to outperform the global economy as a whole, both in terms of value added and employment
• Canada’s ocean-based sectors contributed approximately CAD $36.1B annually (1.6 per cent of national GDP in 2018) and is a source of nearly 300,000 jobs (1.6 per cent of national employment in 2018)
• with key assets such as: the longest coastline in the world; access to three oceans; diverse and highly-valued oceans resources; leading oceans research; and, marine conservation efforts, Canada is well-positioned to capitalize on the opportunities afforded by the growing blue economy
• as the Government refocuses its agenda post-COVID-19, a forward-looking BES will set a vision for our ocean-related sectors and help guide future actions and investments to enable long-term sustainable growth, especially for coastal communities. The strategy will also advance our ocean conservation objectives, reconciliation with Indigenous peoples and climate objectives
• in addition, the strategy will consider how to restore and safeguard our ocean health and how climate change is impacting oceans
• a key tenet of the blue economy is that long-term value creation is directly linked to our ability to restore and rejuvenate ocean health, and that better stewardship of our oceans is essential to sustainable growth, and resilient and thriving coastal communities
• A healthy ocean is critical for sustainable growth in the ocean economy and requires strong commitments to ocean preservation; improvements to the environmental performance of ocean sectors through innovation, technological development, and enhanced resource management; and, recognition that climate change and the health of the world’s oceans are inextricably linked
• internationally – in 2018, Canada, Kenya, and Japan co-hosted the Sustainable Blue Economy Conference in Nairobi. In December 2020, the High Level Panel for a Sustainable Ocean Economy, of which the Prime Minister is a member, released their centerpiece report which committed countries to develop Sustainable Ocean Plans. The BES will achieve this international commitment for Canada

Oceans Act amendments

• the Minister of Fisheries, Oceans, and Canadian Coast Guard was mandated to “modernize the Oceans Act to explicitly consider climate change impacts on marine ecosystems and species in regional ocean management, ensuring the Act provides for measurable progress indicators and objectives, and create a national, interdisciplinary working group focused on climate-resilient ocean conservation planning.”
• at this time, international guidance to improve how marine protected areas (MPAs) provide nature-based solutions to address climate change impacts on marine biodiversity, as well as climate change considerations in conservation network development, and MSP? is minimal; however, these topics are actively being explored in Canada and will support meeting the mandate commitment
• a number of Oceans Act MPAs in Canada do support the resilience of marine species, habitats, and ecosystems to the negative impacts caused by climate change in our ocean. DFO scientists have also conducted research on the interrelationship between oceans protection and climate change to build resilience at the conservation network scale. However, the connection between oceans conservation and climate change is not explicit in the Oceans Act. This gap is what the mandate commitment seeks to address.
• the Department is currently conducting policy work to amend the Oceans Act to respond to this commitment

Fish Harvesters Benefit and Grant Program

The Fish Harvester Benefit and Grant (FHBG) Program launched its second phase in August 2021, and was closed for applications on October 31st.

The Program continues to process appeals and issue the second part of the benefit payment. The Program’s grant stream was completed in phase one, as was the first part of the benefit payment.

To date, the Program has paid out about $162 million in support of its target recipients in Canada’s fishing sector.

The sector shows encouraging signs of rebound. Export levels, prices, and quantities are starting to return to – and in some cases exceed – their pre-pandemic levels.

Overpayment letters to wage-earning crew

The Program provides assistance to self-employed fish harvesters and self-employed crew.

To issue phase-one payments quickly, applicants attested to: their income, employment status, and estimated COVID losses. They received monies based on this information.

Their information was subsequently reviewed against tax data they filed when it became available in summer 2021.

Some individuals who attested to being self-employed had filed tax information indicating that they were wage-earning employees, and therefore not eligible.

Those individuals received overpayment letters, for which they had a right of appeal. The appeal deadline was October 15, 2021.

Benefit eligibility/Unclear eligibility criteria

The Fish Harvester Benefit and Grant Program fills a gap in the Government of Canada’s overall COVID-19 strategy.

The Program is aimed at supporting self-employed harvesters and self-employed shareperson crew who would not otherwise have received COVID relief.

Importantly, explicitly excluded from the scope of Program eligibility are wage-earning employees.
Individuals whose Canada Revenue Agency data indicated that they were wage-earning crew were not eligible.

These details regarding the Program’s scope have always been clear, and publicly posted on the Program’s website.

Applicants turned down

Based on the Program’s limited scope, a sizeable number of applicants were turned down during the Program’s first and second phases.

While applicants could be turned down for a number of reasons, the group most affected in each phase were crew members.

Crew members that filed tax information indicating that they were wage-earning employees were not eligible for the Program.

In making its decisions, the Program deferred to applicants’ Canada Revenue Agency data, with the exception of applicants who were tax exempt (see “Indigenous Applicants” below).

Indigenous applicants/alternate sources income information

While the Program was able to defer to applicants’ data as filed with the Canada Revenue Agency, obviously this option was not available for Indigenous applicants who were tax exempt.

In these cases, the Program worked with individual applicants, their community representatives, and Indigenous fishing companies to secure alternate sources of income information for tax-exempt applicants.

The use of alternate income data was restricted to tax-exempt applicants, and when Canada Revenue Agency information was available, the Program relied on it.

Appellants claiming their CRA information was incorrect

Some individuals said that their Canada Revenue Agency tax information did not accurately reflect the nature of their employment.

In response, Fisheries and Oceans Canada and the Canada Revenue Agency developed a process to allow those who were appealing overpayment letters to request a change to their T4 information and advance their FHBG file at the same time.

The process involved the appellant and the employer sending the Program letters or emails with additional information about the individual’s employment status, and their intention to seek a T4 adjustment from CRA. 

The FHBG Program could then take this additional information provided into account when adjudicating the appeal, while CRA could start its review in response to the request for T4 adjustment.

Program tax expertise

The Fish Harvester Benefit and Grant Program is a partnership led by Fisheries and Oceans Canada, and supported by Employment and Social Development Canada, and the Canada Revenue Agency.

Fisheries and Oceans Canada has, through the course of the Program, drawn on the taxation expertise resident in the Canada Revenue Agency.

As well, since phase one of the Program, Fisheries and Oceans Canada has contracted expertise through Price Waterhouse Coopers, which has provided advice and guidance to the Program on taxation-related matters.

Program payments

The Program was initially approved for $439.4 million in grants and contributions over two years. To date, it has spent about $162 million in grants and contributions.

The Program’s initial budget was based on a worst-case scenario where the ultimate depth and duration of the loss of demand in the Canada fisheries sector was unknown, and unknowable.
In many cases, applicants did not ultimately lose the 25 per cent minimum amount of their annual income required to be eligible for the program.

This is not to say that harvesters did not suffer losses, but that often losses were below the Program’s threshold level. 

These lower-than-expected losses, necessarily reduced Program payments. And the sector does show encouraging signs of rebound.

Phase-two applications

A requirement of the Program was a second application.  That application window opened in August and closed at the end of October, 2021.

Applicants were reminded about filing second applications through a number of means:

• the 2020 T4 tax slip, which went to everyone who received phase-one monies, included a reminder about the phase-two application
• employment and Social Development Canada issued “Nudge Letters” in late August 2021. These letters were sent to everyone who received a phase-one benefit, and reminded of the phase-two applications
• a notices to harvesters sent in August, September, and October 2021
• announcements via social media about the launch of phase two

Background

• on May 14, 2020, the Prime Minister announced the creation of the Fish Harvester Benefit and Grant (FHBG) Program, which launched its first phase in August 2020.  The Program is currently working to complete phase-two processing.  The deadline for phase-two applications was October 31, 2021.  The FHBG Program is presently completing the processing of applications and appeals
• the Program supports self-employed fish harvesters and self-employed crew affected by COVID-19. It fills a programmatic gap in the Government of Canada’s COVID-19 strategy by providing COVID relief benefits to self-employed individuals who would not otherwise be eligible for COVID support. It is delivered in partnership by DFO, Employment and Social Development Canada (ESDC), and with the Canada Revenue Agency (CRA)
• payments from the Fish Harvester Benefit and Grant Program are taxable and must be declared on harvesters’ income tax returns
• the FHBG Program is delivered in two-phases:
  • phase One (2020) involved the issuance of: 1) one-time grant payments to provide emergency business expense support to address the non-deferrable business costs of self-employed fish harvesters; and 2) the first part of the benefit payment (60 per cent) to provide income assistance to eligible self-employed fish harvesters and self-employed crew
  • phase Two (2021) involves confirming that the applicant-attested information provided in phase one aligns with Canada Revenue Agency (CRA) data. A phase-two application was required by all applicants who received payment in phase one. If eligible, and with the successful submission of the phase two application, the Program issues the second part of the benefit payment (the remaining 40 per cent)
• the benefit payment covers up to 75 per cent of income losses beyond a 25 per cent threshold for the 2020 tax year when compared to 2018 or 2019. The maximum benefit is $10,164
• in the opening weeks of round two in August 2021, applicants experienced lengthy telephone wait times in trying to connect with a Service Canada call centre agent. Service Canada responded quickly to provide additional call centre support, and wait times were reduced dramatically
• the first installment of the benefit payment was promptly issued to applicants based on their attestations to the program respecting their status, income, and expected COVID-related losses. That information was subsequently reviewed against CRA data filed by the applicants when that information became available prior to the launch of phase two
• some recipients of the first benefit payment had initially indicated that they were self-employed crew.  However, CRA tax data indicated that some of those recipients were wage-earning employees, and therefore not eligible for the program. Individuals in this situation were issued overpayment letters.  Recipients of those phase-one overpayment letters had a right of appeal. The deadline for those appeals was October 15, 2021

Anticipated questions and answers

1. What was the role of the department in the design and oversight of the Canadian Seafood Stabilization Fund (CSSF)?

During the onset of the pandemic Canada’s agri-food sector faced unprecedented market instability and financial strain. Critical challenges such as the loss of key export markets, a strong decrease of price and demand, and increased costs threatened job losses and business closures, including in the fish and seafood processing sector.

During this period, Fisheries and Oceans Canada was in constant communication with the fish and seafood industry, both harvesters and processors, provinces and territories, as well as regional to development agencies, to understand and work toward common solutions to support the sector.

In the context of the fish and seafood processing sector, it became clear that the sector was facing a suite of new and pressing challenges to adapt its operations, address storage capacity issues, and put in place new health and safety measures.

Of note, while this specific fund was directed at the processing sector, there were also implications for the harvesting sector given the inherent link in the supply chain.

It also became clear that an overarching policy lead in the federal family was needed to champion a support measure that could address common challenges facing our fish and seafood processing sector.

Our role, working collaboratively with regional development agencies, and informed by industry and provincial partners, was to establish a policy basis for the fund, and to design coherent eligibility criteria for funding to be delivered by the regional development agencies.

Working with the regional development agencies, leveraging our collective expertise of the sector, and informed by the regional realities on the ground, we worked through how best to use available program infrastructure to support the sector in an expedient manner.

That is why funds were delivered through the regional development agencies (RDAs) who had the mechanisms already in place to deliver the funds quickly.

The fund targeted those key regions across the country with a significant reliance on the commercial fish and seafood sector.

In terms of oversight, senior officials at DFO and the Regional Development Agencies were in regular contact through implementation and roll-out. This allowed us to maintain a line of sight on any unforeseen program challenges across regions throughout delivery.

Ultimately, working together, we were able to put in place a temporary fund, with built-in flexibilities to enable the fish and seafood processing sector to adapt to the evolving circumstances of the pandemic.

2. Why did DFO and RDAs not develop specific targets and performance indicators related to sustainable development commitments and GBA+ outcomes during program design?

GBA+ and sustainability were assessed during the development and design phases. Expected outcomes were identified via the GBA+ analysis, and the RDAs tracked the value assistance and the number of projects funded for GBA+ groups, including women-owned and Indigenous-owned business (i.e., disaggregated data). This data is still being examined by the RDAs to establish an accurate analysis of the impact of the CSSF.

At the time, supplementary performance indicators were not established in order to reduce administrative burden and ensure that rapid funding could be delivered to fish and seafood sector participants.

The CSSF was a demand-driven program – those companies who were eligible for the program (i.e., who needed it) and applied, received the funding. As the program was established in the early stages of the pandemic, it would have been challenging for the Department to predict the level of take up by any group, and thereby, establish targets.

If pressed if DFO should have played a stronger role with respect to overall design/oversight of the CSSF?

The design and oversight role was balanced. It respected the authorities and mandates of the organizations involved.  Funds were rolled out in line with the terms of conditions of regional programming. Mechanisms were in place to ensure regular communication and sharing of information as the funds were being distributed.

3. How will the guidance developed by DFO ensure that relevant targets and performance measures are developed for future initiatives to inform Canadians on the Department’s contributions to sustainability and gender and diversity outcomes?

(Reference p.16, section 12.5 “Recommendation. Fisheries and Oceans Canada and Agriculture and Agri-Food Canada should ensure that their future food-related initiatives measure and report on their contributions toward sustainable development commitments and gender diversity in order to improve assessment and outcomes”.)

Guidance material was developed to integrate Gender Based Analysis Plus and the Departmental Sustainable Development Strategy into regular DFO processes for developing targets and measures for new and ongoing programs, including future food-related initiatives. 

The guidance provides clear direction on what to consider when referring to GBA Plus and sustainable development, steps to follow to align targets and measures with existing Departmental results planning and reporting processes, and considerations regarding data collection. The guidance materials are currently being used during a review of the performance information for all of the programs in DFO’s program inventory, taking place in 2022.   

4. To what extent was the Canadian Seafood Stabilization Fund aligned with existing Sustainable Development Goals?

The audit found that the Fund considered its linkages to Sustainable Development Goals in 2 of 4 existing sustainable development strategies, but did not have any performance measures to show its contributions.

• 2019-2022 Federal Sustainable Development Strategy: Contribution but no performance measures were included as this was not the primary focus of the program. Guidance has now been created to ensure that FSDS performance measures will be included in any future proposal that contributes.
• Departmental Sustainable Development Strategy: No contribution and no performance measures were included. The strategy was not applicable in this proposal. Guidance has been created to ensure that DSDS performance measures will be included in any future proposal that contributes. (Following this guidance, performance measures would not have been applicable as it does not contribute in this case.)
• United Nations’ Sustainable Development Goals: Contribution but no performance measures were included as this was not the primary focus of the program. Guidance has now been created to ensure that UNSDG performance measures will be included in any future proposal that contributes.
• Food Policy for Canada: No contribution and no performance measures were included. The strategy was not applicable in this proposal. Guidance has been created to ensure that DSDS performance measures will be included in any future  proposal that contributes. (Following this guidance, performance measures would not have been applicable as it does not contribute in this case.)

5. How were funding decisions made?

Defer to Regional Development Agencies as funding decisions were based on the eligibility requirements of the RDAs.

6. What was the CSSF allocation per region?

The $62.5 million funding allocations was initially determined based on the GDP of Canada’s fish and seafood processing sector in each region (using 2018 Statistics Canada data for “seafood product preparation and packaging”).

• ACOA: $38.1 (67.7%)
• CED: $9.1 (16.2%)
• WED (now PacifiCan): $9.0 (16.0%)

Initially, the Department of Fisheries and Oceans retained $6.2 million to respond to emerging industry pressures, but DFO later allocated those funds to the RDAs to address surging demand. Of that amount, ACOA was allocated $4.6 million while WED (now PacifiCan) received $1.6 million.

Final allocation to the three RDA, was as follows:

• ACOA: $42.7 (68.3%)
• CED: $9.1 (14.6%)
• WED (now PacifiCan): $10.7 (17.1%)

7. How did DFO make use of existing mechanisms to expedite program design?

DFO made use of simplified processes for program and funding approvals, such as concurrence and off-cycle letters and used existing authorities under Regional Development Agencies Ts&Cs.

Additional info:

The CSSF funding was covered via a Statutory Vote under the Public Health Events of National Concern Payments Act (PHENCPA) Statutory Authorities which allowed DFO to access funds and allocate these funds to the RDAs once agreement on distribution was reached.

8. Was the overall design of the program fair and equitable ?

On balance, the design of fund had to be tailored to fit regional needs and circumstances.  The CSSF is an example where 3 RDAs, in partnership with DFO, worked to deliver a national response program to COVID-19 very swiftly but within existing mechanisms/programs, as relevant to their unique regional context. 

9. Why were fish and seafood processors in Ontario and Northern Canada not included in the CSSF?

The CSSF was established to support the particular adaptation needs of processors in the regions served by the Atlantic Canada Opportunities Agency, Canada Economic Development for Quebec Regions, and Western Economic Development Canada (now PacifiCan).

It was recognized that processors in other regions could be eligible for support under the Regional Relief and Recovery Fund delivered through the Community Futures Development Corporation or RDA in their region (subject to regional eligibility criteria and funding priorities), or other government programs.

If pressed re: access support for fish and seafood processors in Ontario or Northern Canada:

Fish and seafood processors in the regions not covered by the CSSF could still be eligible for support under other Government of Canada COVID-19 relief measures. Businesses and organizations were encouraged to contact their RDA to discuss their needs.

10. Why did the use of repayable contributions differ across Regions?

Defer to RDAs. Once funding was allocated to RDAs, each agency used available programs terms and conditions to disperse funds in the most effective way in their regional context.

The use of repayable contributions, as a general rule, applies to for-profit businesses, where the intent is to generate profits or increase its value. The Canadian Seafood Stabilization Fund established non-repayable contributions (rather than repayable contributions) for non-commercial not-for-profit groups and for Indigenous-controlled businesses.  While most commercial activities were repayable, some eligible activities aimed at ensuring health and safety of workers were non-repayable.

RDA programs must be assessed against the degree to which they respond to region-specific needs and priorities, rather than strictly through a lens of program consistency.  As you are likely aware, RDAs are increasingly called upon to support horizontal, pan-Canadian policy issues. Such whole-of-government approaches are needed to tackle major national issues, such as COVID-19 relief and recovery. In the case of national COVID-19 relief and recovery measures, RDAs were able to assess the unique needs of businesses and communities to best support program design and delivery in their respective regions. The pandemic presented unprecedented challenges and the need for urgent responses. As such, the CSSF was a temporary and time-sensitive measure targeted to businesses in the fish and seafood processing sector and the not-for-profit organizations that support the sector. Each RDA (ACOA, CED-Q and the former WED now PacifiCan) was similarly focused on ensuring that their respective efforts resulted in the right type and level of support to fish and seafood processors in their region.

11. DFO, how would you support AAFC in designing emergency food programming based on your experiences during covid?

Defer to AAFC.

12. How is DFO contributing to food security?

As noted by the High Level Panel for a Sustainable Ocean Economy, the production of ocean food is crucial to enhancing food security, human health and well-being and preventing widening inequality. With global demand for fish and seafood projected to increase seven to nine per cent yearly, it will be important for Canada and other countries around the world to ensure that wild-capture fisheries operate at sustainable levels in terms of catch volumes. As sustainability requirements increase globally, we need to ensure our sector is positioned to meet these requirements. This is why we are continuing to advance efforts to ensure a sustainable fisheries management regime, combatting global illegal, unreported and unregulated fishing, and working with our federal partners and with the industry to enhance boat-to-plate traceability of fish and seafood in Canada. (for more info please refer to BES note in binder)

13. In light of the numerous letters that were sent to recipients of the fish harvester benefit fund, will fishers that were paid a share of the profits and not a wage be able to keep their benefits?

The Fish Harvester Benefit and Grant Program fills a gap in the Government of Canada’s overall COVID-19 strategy. The Program is aimed at supporting self-employed harvesters and self-employed shareperson crew who would not otherwise have received COVID relief. Importantly, explicitly excluded from the scope of Program eligibility are wage-earning employees.

Individuals whose Canada Revenue Agency data indicated that they were wage-earning crew were not eligible and these details regarding the Program’s scope have always been clear, and publicly posted on the Program’s website. In making its decisions, the Program deferred to applicants’ Canada Revenue Agency data (exception was applicants who were tax exempt). Some individuals said that their Canada Revenue Agency tax information did not accurately reflect the nature of their employment. In response, Fisheries and Oceans Canada and the Canada Revenue Agency developed a process to allow those who were appealing overpayment letters to request a change to their T4 information and advance their FHBG file at the same time.

14. How did DFO monitor and reported on the Fund’s performance?

With the support of DFO, the Regional Development Agencies developed performance measures for the Fund, including expected results, indicators and some targets to monitor their performance. The Regional Development Agencies provided their year-end 2020-21 results, which were included in DFO’s year-end reporting to senior management at the Performance Measurement and Evaluation Committee meeting.

The information presented to senior management included the number of projects and amount of funding that was distributed to increase cold and inventory capacity, retooling technologies/equipment and marketing efforts and to enhance health and safety measures to minimize risk to workers as well as the amount of support provided to women-owned and Indigenous-owned businesses.

Excerpts of the 2020-21 Results Round Up presentation to PMEC on September 16, 2021, including the two slides on the CSSF.

Canadian Seafood Stabilization Fund (CSSF)

• CSSF allows Canadian seafood processing sector businesses to respond to recovery challenges as a result of the COVID-19 pandemic
• The fund helps help stabilize the seafood sector, which is vital for many rural communities and important to Canada’s food security
• The fund was delivered by Regional Development Agencies (RDA): Atlantic Canada Opportunities Agency (ACOA), Canada Economic Development for Quebec Regions (CED) and Western Economic Diversification Canada (WD)
• A total of $58.5M in Grants and Contributions was provided in 2020-21

Canadian Seafood Stabilization Fund (CSSF)

The seafood sector is an important part of Canada’s economy. In 2018, the sector’s gross domestic product (GDP) was almost $1.2 billion, with Atlantic Canada representing 66% of the national GDP for this sector and Quebec and Western Canada representing 16% and 15%, respectively.

CSSF allows Canadian seafood processing sector businesses to respond to recovery challenges as a result of the COVID-19 pandemic. This includes, but not limited to:

• Increasing cold storage and inventory capacity
  (46 projects*, total value $24,334,972)
• Retooling technologies/equipment and marketing efforts
  (46 projects, total value $23,611,993)
• Enhancing health and safety measures to minimize risk to workers
  (112 projects, total value $37,387,478)

Highlighted Results (All indicators provided in Annex 2)

• Close to $60M was provided to support 131 businesses or organizations
  in the sector, of which:
• $3.2M aided the businesses owned by women
  

* Numbers are not mutually exclusive. Projects could support more than one listed results

Management Action Plan