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CHRONCILE HERALD: OTTAWA — Land-based fish farming will remain a niche part of the industry, aquaculture officials told a parliamentary committee Tuesday.

Fish farming has established itself as a profitable industry, generating $1 billion in revenue across Canada each year and producing 154,000 tonnes of fish, three-quarters of which is salmon.

But there is debate about the environmental impact of fish farms, and the aquaculture industry is under pressure from some ecological corners to move toward a system called containment fish farming.

That system involves breeding fish in tanks on land with water that is filtered and renewed. Only a small portion of the Canadian industry — for salmon, a few hundred tonnes — comes from this method.

Conventional fish farming will be the norm for the foreseeable future, industry executives told Parliament’s standing committee on fisheries and oceans on Tuesday.

“Aquaculture’s a business,” said Daniel Stechey, president of Canadian Aquaculture Systems Inc. “At the end of the day, we’re growing fish to make money. If you do that, you have to look at the unit cost of what you’re producing.

“When you’re selling a commodity, the closed-containment recipe is just not there.”

Closed-containment fish have become a premium product in some markets. Stechey compared it with free-range chicken being marketed against regularly prepared chicken or organic products versus conventional products.

But a cost markup of about 20 per cent comes with the extra branding punch, and that was before salmon prices dipped in recent months due to an oversupply in Europe and increased supply from a rebounding South American market.

The cost of closed-containment fish farming is also a major factor.

A 2010 Fisheries and Oceans Canada study found that conventional fish farming had a 52 per cent return on investment. Closed-containment farming has just a four per cent return on investment, the study said, but a number of variables could skew that result.

Companies need much more certainty about their return on investment before they take the plunge, said Clare Backman of Marine Harvest Canada, the country’s largest aquaculture company.

Still, there are benefits to closed-containment fish farms over conventional ones. Closed-containment farms prevent the threat of disease, water quality problems and stock losses due to storms. The question is how to make it viable because capital costs vary widely.

Marine Harvest Canada is hoping to answer some of these questions. It has put forward a proposal to create an $8-million, 300-tonne closed-containment pilot project in British Columbia.

But Marine Harvest is not paying for the facility in-house and the project is on hold while the company seeks funding. Ottawa has expressed interest in kicking in $3 million, but there is still $5 million to be secured.

Some committee members wanted to see the industry take a more aggressive stance.

“It seems to me that if you look at every jurisdiction around the world, when there has been a fish farm, there has been environmental problems,” said NDP MP Fin Donnelly.

“Whether it’s parasites or disease, there have been these issues. So it seems that something needs to change.”

Stechey took issue with those comments, saying the fish farming is a tightly regulated industry with minimal environmental impact. Closed-containment systems create higher demands for fresh water, land and energy, he said.

Ruth Salmon of the Canadian Aquaculture Industry Alliance, said demand for fished salmon is projected to grow three to five per cent a year, a gap closed-containment farms could not possibly fill.

The fish farm debate has been raging in Nova Scotia, where Cooke Aquaculture, a New Brunswick company, plans a massive expansion.

A $150-million processing plant in Shelburne is projected to create 350 jobs. But there has been resistance to Cooke’s plans for a fish farm in nearby Shelburne Harbour from environmental groups and residents.

Cooke has responded with a significant public relations campaign in the hopes of avoiding a repeat of Digby Neck, where a Cooke fish farm has come under repeated fire from residents and fishermen.

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