Atlantic Fisheries Policy Review

Back to Issues, Campaigns and Projects

Effective Date: April 11, 2001

1. Introduction

As a member of the Canadian Council of Professional Fish Harvesters, Fish, Food and Allied Workers endorses the recommendations and the thrust of the CCPFH Brief which was submitted to the Atlantic Fisheries Policy Review in Dartmouth, Nova Scotia on March 12, 2001. In this brief we will reinforce some of the key items from the Canadian Council's Brief, as well as deal with other items of concern to our membership.

Fish, Food and Allied Workers (FFAW/CAW) represents more than 20,000 workers throughout Newfoundland and Labrador, most of whom are employed in the fishing industry. Our Union is the bargaining agent for fish harvesters throughout the province.

Our presentation will deal with a number of key issues critical to Atlantic fisheries policy and to the viability of our coastal communities, such as the owner-operator and fleet separation principles, as well as the principles of adjacency and historic dependence.

But first we believe it necessary to stress how the principles and policies outlined in our presentation are the cornerstone of a sustainable fishery and to sound conservation policy.

The federal government's oceans' management strategy is based on three key principles: sustainable development, the precautionary approach and integrated management planning.

As stated in the Atlantic Fisheries Policy Review discussion document:

"The challenge in defining conservation is to find the right balance between providing the economic and social benefits of harvesting a natural resource and the need to protect the resource itself... a high-risk approach would pursue short-term gains in economic development, employment and incomes, at the risk of jeopardizing the well-being of fish... Fisheries should be managed so that they are ecologically sustainable and provide the greatest possible stability to fishing communities. This is achieved when the fisheries are economically viable and self-reliant over the long-term."

Our Union agrees with these conservation goals and we believe that enshrining principles such as the independent owner-operator principle and the fleet separation policy will contribute to the long-term viability of the fishery and fish resources as well as the people and communities who depend on those resources. In addition, we believe that responsible fishing practices which are encouraged through provincial professionalization programs will assist in the conservation, sustainability and long-term viability of our fish resources, the fishing industry and our coastal communities.

2. Owner/Operator Policy/Fleet Separation

We believe the Canadian Council of Professional Fish Harvesters has rightly put its finger on the owner/operator issue and the related fleet separation policy as being critical to the future of fisheries policy in Atlantic Canada. We support the recommendations made in this regard by the Canadian Council and lament the deterioration of the independent fish harvesting operation in British Columbia where non-fishing investors lease licences and quotas to working fishermen who have been marginalized by the lack of proper legislative and regulatory protection for the individual fishing enterprise.

A fishing licence is a licence to fish and should not be handed out to people who have no intention of fishing and no background in fishing.

Fish harvesters in Atlantic Canada are not prepared to sit back and see the people who do the hard work on the fishing boats displaced and marginalized by wheeler-dealers. Fishing rights are a heritage of coastal communities, not a commodity to be peddled on Bay Street like Nortel shares.

The peddling of fishing quotas that is presently taking place in areas such as 3Ps and 4RS3Pn makes a mockery of fisheries management. It is repugnant that a brand new entrant to 4RS3Pn (the Northern Gulf of St. Lawrence) picked up quotas totally 700,000 pounds while traditional fixed gear licence holders who have fished the area for a lifetime have to scrape by on a scant fraction of this amount. As long as one new entrant gets as much fish as 100 long-established resident enterprises, fisheries management in this country will be in disrepute.

Fish, Food and Allied Workers is alarmed that the draft report of the AFPR makes no mention of the owner/operator foundation of the inshore fishery nor of the fleet separation policy that leaves fishing to fishermen and processing to processors.

The authors of the 1976 DFO policy on the commercial fishery gave thoughtful and comprehensive protection to these principles. We are very concerned about the erosion of these principles, particularly in light of loopholes that have been exploited by processors and other non-fishing investors and in light of the failure of the AFPR to incorporate these principles in its second draft once they were highlighted by industry representatives, including our organization, during consultations with the so-called External Advisory Committee.

There is no need for us to reiterate the details of the loophole in policy which has allowed fish processing companies and other non-fishing investors to establish so-called "trust agreements" which separate legal title to fishing licences from their beneficial use. We support the Canadian Council's recommendations in this regard and highlight as a top priority the need for appropriate regulatory or legislative change to render legal title and beneficial use of fishing licences inseparable.

As a related aspect of the owner/operator issue we note that the AFPR discussion document makes frequent references to what it describes as the "paternalism" of DFO fisheries management policy. One area in which this description is apt is the whole area of vessel replacement policy. We believe this policy review is an opportunity to introduce appropriate flexibility in the vessel replacement rules.

Recommendation # 1:

We recommend that the AFPR final report include a confirmation of the fleet separation policy for <65' vessels.

Recommendation #2

We recommend that fishing licences in the <65' sector be issued only to fish harvesters who have met the professionalization requirements that exist in their respective regions. In Newfoundland and Labrador this would mean licence holders would have to be holders of Level II Professionalization certificates.

Recommendation # 3:

We recommend that DFO use the AFPR exercise as an opportunity to conduct consultations with the harvesting sector for the purpose of introducing appropriate flexibility into the vessel replacement policies.

Recommendation # 4:

We recommend that the final AFPR policy statement include a recommendation for measures to plug the loophole which presently permits the separation of legal title from beneficial use of fishing licences.

3. Inter-generational Transfer of Licences

We underline the importance the CCPFH gave to the whole issue of inter-generational transfer of fishing licences. Even those licence holders who wish to simply transfer their licence to sons and daughters who have grown up with them in the fishing enterprise, as well as in the family home, are subject to heavy capital gains taxation. The overall cost of transferring of licences to the next generation is a fisheries policy time bomb with great implications for the next generation of fisheries managers, as well as of licence holders. Increased pressure on fishery resources is the inevitable consequence if licence transfer costs and capital gains taxes suck all of the profits out of the fish harvesting business.

The other troubling consequence of the current rules governing inter-generational licence transfers (i.e. capital gains taxes) is the potential for increased corporate concentration or ownership of the fishery.

Recommendation # 5:

We endorse the recommendation of the Canadian Council of Professional Fish Harvesters requesting a full study of the public policy considerations related to the inter-generational transfer of licences including an exploration of the different ways and means that would facilitate inter-generational transfer. This would include such options as capital gains exemption on the disposition of fishing property, national fish harvesters retirement savings plan and any other approach that would give fish harvesters more control over the transfer of their fishing enterprise.

4. Aquaculture, Ecotourism and Recreational Fisheries

It's hard to say which aspect of the AFPR appalled us more - the total lack of attention to the owner/operator issue or the repeated references to increased resource access for the purposes of aquaculture, ecotourism and recreational fisheries. We believe these represent new users in fisheries which are already oversubscribed. We do not believe the case has been made at all in the discussion document for the disproportionate amount of attention that these sectors have received in the paper.

It strikes us as remarkable that at a time when government has spent a substantial amount of money to buy out fishing enterprises and strictly limiting new fishing opportunities that such prominence would be given to expanding the role of these particular sectors.

In 1992, the fishing society of Atlantic Canada was thrown into turmoil. The closure to fishing of key groundfish stocks had a devastating impact on fishing people and their communities. Yet they recognized the need for such drastic action. They recognized the need to interrupt 500 years of history. They were more than willing to suffer the hardship of short-term pain in the interests of the long-term - rebuilding fish stocks for future generations.

Yet after years of struggle and a commitment to rebuild stocks, fishing people are now being asked to accept new users when they have yet to recover the ground they lost and when stocks have yet to recover anywhere close to levels where it is safe or sustainable to introduce new users.

To add insult to injury, the federal government is now considering an expanded food fishery - a euphemism for a recreational or political fishery - that would include the issuing of 40 tags per person as well as an extended fishing period. This would be an absolute recipe for destruction, a licence to poach. It is also entirely unenforceable. This also flies in the face of repeated recommendations from the Fisheries Resource Conservation Council (FRCC) against a food fishery. Why should the Minister of Fisheries and Oceans only accept those FRCC recommendations that restrict the commercial fishery?

How can such an expanded recreational fishery be explained within the government's oceans' management strategy? It certainly does not support the precautionary approach as prescribed by the Department of Fisheries and Oceans. Nor does it support the conservation principle as outlined in the AFPR discussion paper (page 16) which states that "the first principle and highest priority governing resource management for the Atlantic coast fisheries should therefore be: Management decisions must put the conservation of fisheries resources and habitat first."

Rather such a plan represents "a high-risk approach... jeopardizing the well-being of fish."

Fish harvesters - especially those in the small-boat sector - and the fish processing jobs and communities they help support are operating under limited fisheries re-openings. This is by no means the time to introduce new users or to expand the role of an unenforceable and uncontrollable recreational/political fishery that has little economic value and that as a result could end up damaging recovering cod stocks.

On the other hand, the fishing industry has a tremendous economic value to our province and communities. The commercial fishery was worth more than $1 billion to our provincial economy last year. These new export dollars helped employ more than 20,000 people in the fishery and another 7,000 people through spin-off jobs. The fishery, both provincially and nationally, contributes to the country's overall balance of trade. Nationally, the fishing industry was valued at $4.1 billion last year. In addition, it remains the economic engine for rural Newfoundland and Labrador and hundreds of other coastal communities throughout the country.. Instead of threatening that, we should be looking for ways to ensure that fisheries are managed "so that they are ecologically sustainable and provide the greatest possible stability to fishing communities. This is achieved when the fisheries are economically viable and self-reliant over the long-term." (page 16, AFPR)

5. Adjacency and Historic Dependence

Unlike the recreation, ecotourism, and aquaculture issues which enjoyed such prominence in the discussion document, short shrift indeed was given to the issue of adjacency.

Historically, adjacency and historic dependence have been the twin pillars of resource access. We are not proposing to unravel years of history in terms of access to resources. However, we believe in the case of new or expanded access that the adjacency principle must be supreme.

The impact of the collapse of groundfish stocks in Atlantic Canada was devastating in coastal communities in different parts of the five eastern provinces. Nowhere was the impact of such massive consequence to the overall economy as was the case in Newfoundland and Labrador. More than 75% of TAGS recipients were from this province for the very simple reason that the bulk of the impact of the resource collapse was felt in this historically groundfish-dependent province.

One of the few positive aspects to an otherwise calamitous situation was the emergence of some shellfish stocks, notably a remarkable bloom in the Northern shrimp stock in an ocean where the status quo had been substantially changed by the absence of historically abundant groundfish stocks.

We take great exception in this province to the use of resources off our shores for political capital in other parts of the country. When we went through the darkest days of the groundfish collapse we neither asked for nor received a single pound of allocation other than in waters adjacent to our shores. It is utterly and completely unacceptable that our resources should now be managed on any other basis. New resources should be made available to adjacent participants in the fishery. The current capacity of our industry is more than capable of harvesting any resource that comes our way in the foreseeable future. New or expanded access should be granted to non-adjacent users in any Atlantic Canadian resource only when the needs of adjacent harvesters and communities have been fully met.

With respect to the Northern shrimp fishery in particular, many of the <65' participants have been assigned unrealisticly low quotas while other adjacent, long established fishing enterprises have been denied access to this resource. Many plants that could be involved in a cooked and peeled processing operation remain idle. There is no surplus shrimp to the needs of the adjacent people and therefore there is no basis for allocation of this or other stocks in our waters to non-adjacent interests.

The principle of adjacency was violated last year when the federal government allocated northern shrimp to non-adjacent users from Prince Edward Island, while adjacent enterprises and plants operated under capacity.

Adjacency as described by former Fisheries and Oceans Minister Anderson:

In May 1999, David Anderson, Dhaliwal's immediate predecessor, was questioned in the House of Commons by Yvan Bernier, a Bloc Quebecois MP from the Gaspe region of Quebec, about new shrimp licences. Anderson's answer was to the point.

"Mr. Speaker, according to departmental principles and policies, where there is an increase in the shrimp population in the northern zone, these shrimp are made available to fishers in contiguous fishing areas, if the fishers are further away and in another province, distant from that area, they do not get the TAC (total allowable catch)," he said.

"This is very clear, very simple, and the fishers are well aware of it."

"My final point is that when it comes to temporary shrimp licences we allocate on the basis of adjacency and the Quebec fishers are not adjacent to the Labrador and Newfoundland shrimp."

Recommendation # 6:

That the adjacency principle be enshrined as a permanent feature of DFO fisheries management policy in conjunction with recognition of historic dependence on a particular resource as the basis for continued access.

Another aspect of the management of the northern shrimp fishery is that the main beneficiaries of this fishery - the holders of the 17 offshore frozen-at-sea factory freezer trawlers licenses - export unprocessed shrimp for processing in Europe when we have under-utilized peeling plants next door to the resource.

Recommendation #7:

We recommend that processing of industrial shrimp in Canadian peeling plants be a condition of license of the Canadian offshore shrimp fleet.

6. Cost Recovery

We are alarmed at the references to cost recovery in the discussion paper. The principle characteristic of the industry that was saddled with massive increases in user fees in the mid-1990s was one of virtual economic collapse. We note on Page 23 of the discussion paper the reference to the February 2000 budget as a demonstration to the government's commitment to "a fair and competitive tax system". The fee structure that has been implemented in the fishing industry is a form of targeted taxation which undermines the viability of fishing enterprises.

In 1995, fish harvesters - who were at the time struggling through moratoria on 14 key east coast groundfish stocks - were handed the largest tax increase in Canadian history through the introduction of massive increases in licence fees.

Last year, the federal minister of finance announced the largest tax cut in Canadian history - over $100 billion in tax relief. After years of spending cuts by Ottawa - including massive cuts to the budget of the Department of Fisheries and Oceans - the country's coffers are healthy and in surplus. Yet fish harvesters continue to pay whopping licence fees and there are indications the federal government is considering increasing its so-called "cost recovery" measures for fish harvesters, but no sign of any increase in the provision of crucial services such as science, enforcement and health and safety.

We are alarmed to see the discussion paper go beyond the usual "jargon" of a fee for those who "receive a private benefit from the use of a public resource". The discussion paper goes on to talk about the fishing industry being one that "is also able to help finance the management of the fishery".

The management of the fishery is part of the Terms of Union between Canada and the Province of Newfoundland and Labrador. It is a public service which should be provided and paid for by the Government of Canada as part of its obligations under the terms of Confederation. We are not interested in being passed the bill for this public service.

7. Allocations

The dominant theme of the discussion paper is the Department's desire to download the responsibility for resource allocations. We accept the argument that principles of access and allocation policy need to be firmed up and made known to the Canadian public. We do not share the view that it is practical or feasible to download the allocation responsibility to industry.

This is a particularly troublesome notion in fisheries with a large number of diverse participants spread over a large geographic area. In many cases the differences between users of the resource are so great as to render industry agreement on the contentious issue of allocations unattainable.

We do not believe unaccountable boards are the appropriate vehicle for allocation decisions because they would have little or no understanding of the policy end and political context in which their decisions are made.

The discussion paper suggests that current licence holders in the fishery decide on the issue of new entrants in their fishery. It would be marvellous to live in a society that was so magnanimous as to make this realistic. However, existing licence holders in any fishery will inevitably protect their own interests, and it is the responsibility of the Minister to deal with circumstances of significantly increased resource and determine when that permits the licencing of new entrants.

For example, the Northern shrimp fishery has enjoyed a tremendous increase in abundance and value. In 1997, the then Minister of Fisheries and Oceans, Honourable Fred Mifflin, provided new access to this fishery according to a clearly articulated set of principles that included recognition of the needs of those adjacent to the resource. It is our submission that had this decision been left to the existing licence holders in the Northern shrimp fishery that the new access that provided a lifeline for many fishing enterprises, plants and coastal communities would not have been made available. This is not a criticism of those licence holders, merely a reality of human nature.

One of the fallacies associated with those who criticize the awarding of new access to shrimp or crab resources, that were such important decisions in the 1990s, is that somehow this has contributed to increased capacity. These new opportunities did not add one single new fishing enterprise to the fishery. What they did among existing enterprises is change the sharing of fishing opportunities with the objective of providing fairer sharing of the access to the resource.

Many will argue, with justification, that we are still a long way from having a fair sharing of the resource amongst the various players. This situation would have been even worse had the expanded access to crab and shrimp during the 1990s not been implemented.

One of the real weaknesses of the discussion document, the system of integrated fisheries management plans and the overall analysis that is done on the existing fishery is that it treats each species as somehow being discrete from all other activity. The Department of Fisheries and Oceans during the mid-1990s established a Core licencing policy in which it established objective criteria for designation of Core enterprises. Because of the severe downturn in the groundfish industry, the Government of Canada invested very substantial amounts of money in a licence buyout program. We believe that this program should be continued until the available funding is exhausted and we believe that there is even merit in extending the licence buyout program with ongoing funding.

We also believe that, now that the Core has been identified and once those who have elected to accept the buyout program have left the fishery, allocation policy should be aimed at enhancing and assuring the successful operation of those who made up the Core fishery.

From time to time the Department raises the viability bogey man, usually as an argument to deny access to the less advantaged among the licenced harvesting enterprises in Atlantic Canada. What policy should be aimed at is taking all reasonable steps to allow all the recognized Core enterprises to achieve viability.

By ensuring the viability of independent fishing enterprises through the points raised in this presentation, the government will also help ensure the viability of fishing communities, which it has stated as a goal. We must be careful not to make the mistakes of the past by watering down the resource to the point where fishing enterprise and community viability is threatened.

Recommendation # 8:

We recommend that allocation decisions continue to be the responsibility of the Minister of Fisheries and Oceans subject to allocation policies and priorities that are clearly identified and made public.

Recommendation # 9:

The Atlantic Fisheries Policy Review should recognize the reality that the fishery is dominated by multi-licenced enterprises and should recommend that policy be developed to optimize the prospects for financial stability of the various fleet sectors which make up the Core Fishery.

In this regard we acknowledge and support the comment in the discussion document that policies should be aimed at preventing the concentration of fishing licences in too few hands. We believe the above recommendation, together with our recommendations on fleet separation and the owner/operator principle, will go a long way to achieving that stated objective.

We view with some concern statements in the discussion document recommending greater involvement of the general public in fisheries management decision making. While we accept that the broader public has a state and an interest in fisheries management decisions, care has to be taken to ensure that this is handled in an appropriate manner. We accept and agree that fish plant workers and crew members on fishing vessels are bonafide industry groups whose opinions should be solicited and respected. Community leaders and provincial governments also have a voice that should be heard and respected, and policies should be debated in a manner that allows for a reasonable level of broad public input. Having said this, we believe that the people that work in the harvesting and processing of fish are those with the greatest stake and whose views should ultimately carry the day.

On a final note, we acknowledge the recognition in the discussion document of the importance of professionalization and we endorse the recommendations of the Canadian Council of Professional Fish Harvesters in this regard. Professionalization in this province was truly a grassroots exercise that began with debate in our organization beginning in 1989 before any reference was ever made by the DFO Minister on this concept. We believe that professionalization is an absolutely necessary framework for the owner/operation foundation of our fishery and the fleet separation policy. Exhaustive public consultations were conducted every step of the way in the development of the professionalization program in Newfoundland and Labrador, including the passage of legislation in the Legislature of this province. Over the years, three full rounds of public meetings, involving a total of more than 400 meetings, attended by close to 10,000, people formed the context for the development of the professionalization program.

We developed in this province a professionalization regime that made sense for this province. We believe that it is up to the fish harvester organizations in the various regions of the country to develop their own programs that make sense in the context in which they operate.

Recommendation # 10:

We recommend continuing support for professionalization from DFO as the appropriate policy framework in which to enshrine the owner/operator principle and the fleet separation policy.

The discussion document referred to the adoption of historic shares as a cornerstone of resource allocation and as a general statement we accept the respecting of historic shares. However, if it were as simple as that there would be no need of a Minister or of an Allocations Board. All the managers would need would be a calculator to adjust the shares to changes in Total Allowable Catch.

The fact is the situation is more complex than this. Resource availability changes dramatically from time to time and with this comes a need for changes in access and allocation opportunities.

In particular, we believe the re-opening of fisheries at a fraction of their historic level requires a special approach that is responsive to the circumstances in play at the time of re-opening. This is in fact what happened in the re-opening of the 2J3KL, 4RS3Pn and 3Ps cod fisheries. With the exception of 2J3KL, where several federal Ministers have acknowledged the primacy of the inshore sector, the modified status quo that was used in 4RS3Pn and in 3Ps cod re-openings was done not on any firm policy footing, but in an ad hoc manner.

However, we believe that the basis on which these fisheries re-opened was instructive in that at low levels of quota in relation to historic abundance, priority was given to traditional and immediately adjacent participants taking into account the availability of other fishing opportunities.

When fisheries shrink to a fraction of their former level or re-open at very low levels related to historic levels, due account has to be taken for the context in which various users entered the fishery. In some cases users were added on an individual and ad hoc political basis at a time when resource abundance was not in question. Surely, those shares should not be treated on the same level of priority as those of the traditional users of this resource for many generations.

Recommendation # 11:

The Department of Fisheries and Oceans should recognize the re-opening of closed fisheries or the continuation of existing fisheries at TAC levels far below traditional levels as a special situation in which priority would be given to fleets depending on adjacency, length of attachment to the particular fishery, availability of other fishing opportunities and other criteria.