Proceedings of the Standing Senate Committee on
Fisheries
Issue 6 - Evidence for April 30, 1998
OTTAWA, Thursday, April 30, 1998
The Standing Senate Committee on Fisheries met this day at 8:30 a.m. to consider the questions of privatization and quota licensing in Canada's fisheries.
Senator Gerald J. Comeau (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, our two witnesses today are Dr. Anthony T. Charles of St. Mary's University and Mr. Arthur Bull from Coastal Communities Network.
At this time, I would like to introduce Dr. Charles and give you a very brief biography. Dr. Anthony Charles, a Professor of Management Science in the Faculty of Commerce at St. Mary's University, specializes in fisheries and aquaculture research, particularly issues of management, economics and policy, as well as resource assessment.
Dr. Charles has written extensively on strategies for sustainable fisheries and has been called upon to advise government, both in Canada and abroad, on fisheries conservation, marine research and coastal development. He is a director of the Oceans Institute of Canada, a member of the Fishermen and Scientists' Research Society, coordinator of the fisheries seminar series at St. Mary's and a former member of Fisheries Resource Conservation Council. I do not know if he has much time left for himself or his family, but we particularly want to thank Dr. Charles for agreeing to give us his views on our subject of study.
Welcome, Dr. Charles. Please proceed.
Dr. Anthony T. Charles, Professor of Management Science, Faculty of Commerce, St. Mary's University: Thank you, Mr. Chairman. I would like to thank the committee members for inviting me to your committee. You are certainly dealing with what I feel is one of the crucial issues in fisheries across Canada; in fact, an issue that is, as you know, important both to the Pacific and the Atlantic -- although interestingly enough I think it has been solved rather better in the Arctic than on the other two coasts of Canada.
I am going to read some of my presentation today. I will certainly make the brief available to you afterwards. I do apologize also to the translators, because since I sent it to them yesterday, it has changed a little bit; I hope it is still suitable.
I will focus today on four particular themes that I hope are relevant to your committee. I would like to start off by briefly -- a bit as an academic I suppose -- discussing the difference between property rights and user rights, which I think is a distinction that has been blurred but needs to be made. I will then go on to talk about the conservation impacts of individual quotas, followed by a discussion on maximizing the benefits to the coastal economy and coastal communities. My final topic will be the issue of choosing between individual quotas and alternatives in specific fisheries.
To start off with property rights and user rights, I would note that DFO has promoted individual quotas, in particular ITQs, in the Maritimes by telling fishermen that they would own essentially a share of the fish. There is no question as to who really owns the fish swimming in the ocean. The fact is that I own them, and so do you and all Canadians. In fact, a major reason that I, as a Canadian, and other Canadians care about our ocean resources is that I, as a Canadian, own them and benefit from them.
Here we get to the difference between property rights and user rights. This may be well known to everyone, but I will just reiterate that property rights refer to rights attached to owning property. As I said, Canadians own the fish. On the other hand, user rights refer to rights to use the resource. If you hold a fishing licence, you have a use right. If you hold an individual quota, that is also a use right, but one based on a numerical level. Similarly, for someone with a lobster licence that allows for a certain number of traps, that, again, is a use right.
That being said, there is no doubt that a fishing licence or an individual quota are also forms of property that can be bought and sold; whether that is legal or not, it does occur.
It should be clearly understood that the fish remain public property. That point must be clearly acknowledged, as it is with oil, with gas, with timber on Crown land. In all those cases, we do not give away our oil or our trees, and so on. We give out use rights. The same should occur with fish. That concludes my brief comment on that distinction.
I would like to turn more attention to the conservation impacts of individual quotas, which is something that, as a member of the Fisheries Resource Conservation Council, I have put some considerable thought into, as chair of a committee on management and regulations there.
Before discussing my main points, however, I would like to comment on the message that DFO has sent about conservation in its implementation of individual quotas. In particular, I want to point out, as you know, that quotas were given out based on each fisherman's record; their so-called catch history. What is truly disturbing, to me at least, is that the period of time over which everyone's history was calculated, 1986 to 1993, was precisely the time that the fish stocks were being destroyed.
Here is the simple truth: The more you bent the rules during that time, the more you used a liner in your nets, the more you high-graded and discarded fish, the more you bashed the stocks, the more you are now rewarded into perpetuity with a nice fat quota. There is absolutely no justice in that, certainly not from a conservation point of view.
Turning to two particular points. The first point I would like to make is that individual quotas create incentives against conservation. Fishermen have always gone into debt to buy their boats, and then they need to go fishing to make the boat payments. That is a fact of life in modern fisheries. ITQs make that situation worse. You have some of the fishermen buying expensive quota from the others, going deeper in debt to do so, and then needing to fish even harder to make ends meet. That is not a good situation for conservation.
Now the usual response to the comment I have just made is to point out that, indeed, there is no problem, because the overall TAC protects the stock. Two points should be made about that. One I will deal with more in detail in a moment. There are major problems and shortcomings with relying on a total allowable catch.
Second, individual quotas create incentives to dump fish, to discard fish, to high-grade in an effort to maximize the value of the fish landed. All of that is bad for conservation, and it occurs regardless of the TAC -- the total allowable catch. In fact, bringing the quota down to the individual level has a perverse effect. The way I refer to it is that an IQ personalizes the benefits of dumping and discarding.
For example, suppose that two juvenile small fish weigh the same as one adult fish. If a fisherman discards those two small juvenile fish, the cost of doing that is the minimal lost value that he could have had by selling them. The benefit from dumping or discarding is that he can now go out and catch within his own quota an adult fish worth much more than those two small fish that were dumped. That personalized benefit -- dumping and discarding -- accrues to an individual quota but is essentially not there with the competitive fishery, where all fishermen have access to the total quota of fish. In the absence of individual quotas, the incentive for dumping and discarding is smaller.
By the way, the point will be made by some that, if individual quotas were transferable, if they could be bought and sold, the problem that I just mentioned would disappear. That is simply not true. The problem may be lessened if you can buy quota to essentially cover those small fish that you caught, but the small fish are still worth less than the large fish. There is still an individual incentive under an individual quota scheme to dump, discard and high-grade. I would be pleased to expand on that if you wish.
I will now turn to my second main conservation impact -- that is, that individual quotas exacerbate the fundamental flaws of the entire spectrum of quota management, starting with the total allowable catch. As you know, you start with the total allowable catch and then that is subdivided. To understand one particular problem in conservation with ITQs, we need to understand how that exacerbates the more fundamental problem of quota management.
TACs are determined typically as a portion of the total fish stock, the total biomass, but the number of fish in the ocean is surely one of the most uncertain numbers on earth; amazingly uncertain and never going to be fully knowable.
The fact that we have that massive uncertainty in the fish stock means that the TAC is bound to be just as uncertain. That is not just theory. For me, one of the main causes of the collapse of the groundfish industry was the belief that we could set TACs knowing the number of fish in the ocean. That was very naïve. It was very sad that that was the way things worked.
In theory, quota management works; in practice, it has failed dramatically. I am not just talking about individual quotas. I am referring to the whole quota-management approach, which is not just something found in Canada, of course; it is found worldwide. It has had problems worldwide.
I will turn now to the question of how the fishing season progresses. As you know, in Canada's Pacific salmon fishery, stock sizes are estimated regularly within the course of the fishing season and fishing times are adjusted weekly or even daily to take into account changing understanding of stock sizes.
What about Atlantic groundfish management? It is just the opposite. Although DFO allowed for in-season changes, those changes were rarely made in practice. In the face of declining stocks, TACs were not adjusted during the course of the fishing season. The simple truth, I think, is that such changes were seen as too inconvenient for the industry. Once the TAC was set and subdivided and subdivided again into allocations for each sector and then for each individual, an illusion of certainty was created in which the pieces of the pie, those allocations of quota, were then viewed as unchangeable, as sacrosanct.
This rigidity contributed to poor conservation practices. The worst of those problems were in ITQ fisheries, where individuals felt that they had an unchangeable, secure piece of the pie, which, in turn, made managers reluctant to change the pie when it should have been reduced in size.
Unfortunately the groundfish fishery is obsessed with subdividing the pie -- as if it were an apple pie sitting on the table, easy to look at, easy to cut up. ITQs are simply the worst manifestation of that obsession, the effect of which is terribly bad for conservation. It keeps us from building an adaptive, robust approach to management that we really need to avoid disasters in the future.
I would like to turn now from the fishing process to the question of maximizing benefits from the fishery. Here I would like to emphasize the difference between non-transferable and transferable quotas.
There are many economists -- and I am not one of them -- who push endlessly for transferability of quota. These economists believe that the most efficient fishermen will buy quota from the others and the overall efficiency of the fishery will increase. That is the theory. There are some fatal flaws in that argument.
First, it is not, in fact, the most efficient who buy-out the others; it is those with the most access to the money to buy the quota from the others. How did they get that capital? Well, who knows, but one possibility is that they obtained it by catching large amounts of fish over that period when the fish stocks were declining. This whole system is not something that has been particularly good for conservation. The basic raison d'être of ITQs is flawed in that sense.
There is a more fundamental question, though -- and this to me is one of the crucial areas that I would love to see some attention paid to. It is the fundamental question of: What do we mean by efficiency? A narrow view of efficiency is the following: getting the most fish out of the ocean at the least cost. That is the traditional idea of efficiency from an economist's point of view. It is a disaster for conservation.
A better approach is to view efficiency as getting the greatest net benefits per fish that is caught. The idea makes sense. Do the most we can with what we have. How do we measure those benefits coming from the fishery? It is not only the benefits to the fishermen -- the value of the catch -- but also the benefits to the coastal communities, benefits such as providing jobs on boats as crew members, jobs on shore repairing the boats or baiting the hooks and of course all the spin-off benefits to the coastal economy.
Since the fishery serves as the engine of that coastal economy, the key goal, the measure of success, should be to keep that engine running well -- doing its job for the economy and for the communities. That means that every available fish, not every fish in the ocean, but every fish that is available in the total allowable catch must be used optimally to maintain coastal communities, to maximize those spin-off benefits, to maximize jobs.
How does this relate then to individual transferable quotas and IQs? Evidence from around the world, Iceland, New Zealand, as well as southwest Nova Scotia, shows how transferability of quota leads to concentration of quota, loss of jobs, harm to coastal communities. Income distribution suffers. The most vulnerable in the fishery, the crew members, lose their jobs without any compensation. Whole communities can be left without access to the fishery. This suggests something that is not well received, I am sure, by many economists, that with a broad measure of efficiency ITQs are actually bad for efficiency. The total economic benefits to the coastal economy obtained per fish would likely decline when ITQs are introduced.
On the other hand, it must be said that non-transferable quotas could actually stabilize the local economy by making clear that a certain portion of the quota resides in the coastal community. The essential problem with individual non-transferable quotas is that in every case I know of in the world they eventually became transferable. Pressures mounted, somebody gave in and the quotas became transferable. The harm to communities, crew members and to the local economy came to pass. In other words, non-transferable quotas can be the slippery slope on the way to transferability and all the hazards that that brings.
What is preferable to me is a system that starts right off based in the coastal community. I am thinking of the new community quotas that we have here in Nova Scotia for the groundfish fisheries. They still suffer all the flaws of any quota-management scheme, but if you have to have quotas this is the way to go.
Community quotas bring people together in the coastal community, rather than tearing them apart, as the ITQ approach has done. Fishermen in the community manage themselves. They create fishery management plans that suit their own situation. They divide up the quota in a deliberate attempt to maximize overall benefits, rather than let it be merely a matter of who has the money to buy the quota and who does not. In terms of maximizing the benefits, some major initiatives could take place.
My final theme is the question of choosing between individual quotas and other alternatives. I am pleased to see that the committee has highlighted this particular point. The debate worldwide over ITQs has divided into two camps, pro and con, but I do believe that the truth is more complex.
In a nutshell, my assessment is as follows: First, I have to repeat the fundamental point that any approach based on quotas needs a hard look. In highly uncertain fisheries, such as Pacific salmon, quotas are simply foolhardy. The ground fishery has been found to be much more uncertain than ever realized before, and I would question the wisdom of relying on quotas there. Indeed, I would recommend to you a Fisheries Resource Conservation Council publication that explores the conservation impacts of quota controls and of effort controls in more detail.
My second point, though, is that if we insist on quota management, then my sense is that transferable quotas would be foolhardy as well in fisheries in which the fishery plays a strong role in supporting coastal communities. In other words, a criteria for avoiding transferability would be present when the fishery has a strong role in supporting coastal communities. They are obviously a non-starter in the lobster fishery. That would be foolishness.
Transferable quotas are also inappropriate in the small boat, fixed-gear groundfish fishery, as well as the rural-based salmon fisheries, say, in the central coast on the Pacific Ocean. The fundamental reason for this is that transferability flies in the face of the fisheries' role in maximizing benefits per fish caught in the local economy.
I said that those sort of fisheries should not have ITQs, but I think IQs are another matter. They could work in some cases under two particular conditions. One is that permanent transfers or sales should be prohibited; although transfers within a season are fine as long as they do not become a habit. The second condition is that the IQs should best operate within a framework of a community quota so that rules are set locally and the fishermen in the community have group control over the IQ system.
That then leads to the question: What fleets are suited to ITQs? This is the subject of some research around the world. My suggestion is that ITQs are best restricted to those fisheries with relatively few players, with relatively stable stocks, and with relatively little in the way of community connections. In other words, what you might think of as the more industrial fisheries are better candidates.
In conclusion, I would simply reiterate my main points. The reliance on a flawed quota-management system needs to be reviewed. Second, ITQs and IQs exacerbate the conservation shortcomings of quota management. Third, if we are to have quotas, then community quotas are a good development. Finally, point four, please do not buy the argument that ITQs are good for efficiency. Those making that argument are using a view of efficiency that neglects the fisheries' big role in small communities.
I would like to thank you for your attention and welcome your comments.
Senator Stewart: Professor Charles has told us that there may be some fisheries for which the quota system is suitable -- those where there are few fishers, where the stock is relatively stable and where there is very little community connection with the enterprise.
Let me ask: In your view, which of the fisheries in Nova Scotia, using these criteria, would be suitable for the application of the quota system?
Mr. Charles: The difficulty, I suppose, is that those criteria are not always compatible with one another. In other words, many shellfish fisheries are more stable than finfish fisheries, but they tend, because they are closer to shore, to have a strong community connection. The lobster fishery is perhaps the best example.
On the other hand, there are at least a couple of fisheries that generally fit the bill. I preface this by stating my overall concern with quota management. Here we are talking about this in the context of believing that overall quotas, total allowable catches, are suitable in some cases.
One fishery that comes to mind is the offshore scallop fishery between Nova Scotia and New Brunswick, where essentially a small number of companies operate and there tends to be less of a community connection because of that. The scallops are relatively stable, and there is a scientific assessment done of that. That would be the kind of case that I think might be more relevant for ITQs.
Senator Stewart: In your comments, you began a sentence by saying, "If you have to have quotas..." It is clear that you are saying, to a very great extent, that the quota approach is not desirable. If people are so misled that they are going to insist upon having quotas, if you have to have quotas, are we to understand that, setting aside fisheries such as the scallop fishery, to which you just now made reference, and perhaps some others of similar character, you would prefer a much more immediate hands-on approach of the Department of Fisheries and Oceans? In other words, they would be tracking from week to week what was happening with regard to the catch in relation to the biomass and then advising those who would be setting the rules locally, to use another expression that you employed? Is that your ideal model as the alternative?
Mr. Charles: Not quite. You used the term hands-on, and hands-on by the federal government. I would not advocate that in particular. I was trying to distinguish from the salmon fishery on the West Coast, which has a very adaptive approach, and it happens to be done at the moment by the federal government, by DFO. I am not sure if, in the end, that is the best approach for the salmon fishery.
My point there was that it is adaptive, in the sense that, each week, in fact each day, the managers reassess the state of the stocks and whether a fishery can take place there. I am not suggesting that for the groundfish fishery, or in fact for the lobster fishery in Atlantic Canada. Salmon is a particular case where you have the salmon, of course, coming back from the ocean. They are coming into the rivers. They need to be watched as that takes place. What I would say, though, and my concern especially about the individual quota approach, is that it creates this illusion of certainty that the quota is now allocated for the year, that it will never be changed because to change it would bother individuals who now have individual quotas.
My concern is that the ground fishery needs to be not as adaptive, not as closely monitored as the salmon fishery, but it does need to be open to changes within the course of the fishing year if it turns out that the fish do not appear to be there. My main point is that you should not just keep the quota set because it is convenient for the industry to keep it at that level. Hence, there needs to be a bit more adaptiveness, but not necessarily hands-on by DFO.
Senator Stewart: I am thinking primarily of the Atlantic coast; indeed, I am thinking primarily of Nova Scotia. You have said that the quota arrangement may be suitable for certain fisheries. You mentioned one in particular. You said something about the lobster fishery. Would you restate what you said and amplify it just a little?
Mr. Charles: About the quota system and the lobster fishery?
Senator Stewart: Yes.
Mr. Charles: The lobster system does not work with a quota system; it works by effort controls. In the Fisheries Resource Conservation Council study of the lobster fishery that I took part in, it was amazing to me how universal it was that the fishermen supported the management system. Having looked at groundfish so intensively over the last few years, it was a bit of an eye opener to see how the fishermen supported their scientists. They supported their managers, more or less, subject to limits. They felt that the system worked vis-à-vis lobster. It does not use quotas. There are valid scientific and historical reasons for not using quota.
Senator Stewart: You are saying that in the case of the scallop fishery the quota approach may be suitable but that it is irrelevant in the case of lobster because there are already methods and techniques in place that provide for conservation and some stability.
All right then. To which fisheries, for example, in Nova Scotia would you apply the community-based management?
Mr. Charles: That is an excellent question, because it used to be thought that although lobster has traditionally been managed on a more local-community basis that that would not be possible for groundfish, because groundfish -- for example, cod -- move all around the coast and thus you could not have community-based management. That has been proven wrong over the last couple of years.
The community of Sambro, to its credit, initiated the idea of a community quota in groundfish. That is now expanded throughout the Scotia Fundy region, which I think is a very exciting development. Essentially, it is not as community-based as I would like to see it. There are examples in Sambro, in Digby Neck, for example. Those two perhaps are the shining examples of what is getting close to truly community-based management, focussed on the community. The so-called community quotas are a step in that direction.
If it works for groundfish in Scotia Fundy, I think it would work for groundfish elsewhere in Atlantic Canada. I really do not see why that approach could not be extended to other species as well.
Senator Stewart: You are using the notion of the community as the relevant entity. Let us assume that you have a community in which a fair number of the boys -- and perhaps the girls, too -- decide that they are not going to live in Halifax where they have good hospitals and good universities, et cetera, all paid for by the provincial taxpayers province; that they are going to stay at home. How are they going to have access to the local prosperity in this community-based fishery?
Mr. Charles: The first point is that there is not room in the fishery for everyone. I would rather not say that, but it is a fact of life. With limited resource and with technology having advanced and somewhat irreversibly advanced, there is just not enough fish for every single person that would ever want to go fishing.
That being said, my feeling about the way groundfish is managed in Atlantic Canada is that it pays no attention to the sort of point that you are raising there. The fixation in groundfish management is on boats and fish. Now there is nothing wrong with paying attention to fish, and boats for that matter as well, but there is no attention paid to the local regional economy and what is best for that economy; nor is there attention paid to what is best for individual coastal communities.
The reason for that, I guess, is that the people in DFO have the same focus as I had originally -- that is, analyzing fish and boats. They just have no sense of how to analyze and how to do the best for coastal communities. It may be beyond their mandate, but certainly somebody should be looking at that point.
The young people in coastal communities have a future in the fishery if it is a fishery that is managed as much as possible and controlled as much as possible at the local level. You will hear, I am sure, from other presenters in coastal communities, closer to the scene than I am, how that is positively done. Trying to maximize the overall benefits to the coastal economy is, to me, the crucial feature.
Senator Stewart: Mr. Charles, you are presenting coastal community management as an alternative. I find it, at first glance, highly attractive. Then I ask you a question about access of new people to that community enterprise and you just have not answered my question. I am disappointed, because I was hoping that you would complete a sales pitch which I found to be very appealing and sympathetic.
Mr. Charles: Perhaps I just did not quite catch the question or the point. How do people access the fishery?
Senator Stewart: Suppose a fisher has two sons, both of whom think that they want to do what their father is doing, and a neighbour is in the same situation. You have an expanding number of applicants. What is the decision-making process for who is allowed into the fishery and who is not? How does the community decide? Do they draw lots?
Mr. Charles: I see. No, I do not think so, in terms of the lottery. See, I hesitate to answer that question, because I am not in a fishing community, unless you count Halifax as one.
Senator Stewart: We know that is a corporate town.
Mr. Charles: Yes. Thank you. I just want to make the point that with community-based management the decisions about the question that you are asking are made in that local community. The community might be Sambro, or it might be Queen's Lunenburg, for example. The key feature is not for me to say how that would work but for the structure to be there for that community to make the decision.
I will say, as an analyst of fisheries, that, if there is indeed an expanding set of individuals who want to get into the fishery, at some point the community is likely to say, "We have to limit the total number of people in the fishery, but let's use the benefits from the fishery to expand and build on other parts of our economy."
Shelburne, for example, has been doing that with their community future's program, now called an RDA, basically trying to map out the resources that they have locally and build up other alternatives to the fishery. Hence, some young people are going to end up going into the fishery if it is kept healthy and community controlled, others are not.
The key point is that there is no easy answer to your question, but I would rather that be decided at the community level.
Senator Butts: Thank you very much, Dr. Charles. It is a welcome message, as far as I am concerned.
For you, what is the difference between property rights and user rights?
Mr. Charles: I just finished teaching this in a course at St. Mary's, so I hope I know it -- although I must say that it is not a clear-cut point. In fact, another Canadian, Evelyn Pinkerton, on the West Coast prefers to refer to management rights, the right to be involved in managing the resource -- which I think is a valid point as well.
Let me just say that property rights refers to ownership and user rights refers to access or use of the resource. So the person, or the country, or the set of people who own the resource, who have the property rights over the resource, are going to be the ones who decide about the user rights for the resource.
Since Canadians own the fish swimming in the ocean, we should receive some benefit from that, as we do for oil, and gas, and timber on Crown land; but we should also be determining, in a conscientious manner, what the access to that resource should be, to maximize the benefits that we want to obtain. For me, the key thing is to maximize benefits to the coastal economy.
Those holding the property rights, namely Canadians, would determine use rights. Of course, there are historical use rights in the fishery which are very important to respect: native peoples' traditional fishing in the in-shore fishery, and so on. You also have a decision to be made over the use rights, the overall use of the resource.
Senator Butts: I agree wholeheartedly with your theory. It is just that when it comes down to the practice -- I just attended a conference on Sable Island gas, and I do not think I am ever going to have much say in how that works either. So the comparison with forestry or with oil and gas has the same sort of problem, at least in my mind.
Supposing we could agree to individual quota, or community quota: How would we be able to prevent it from being transferable? I think you said that it always results in being transferable. Have you any sense of how we can keep the "T" out of it?
Mr. Charles: I am not sure of the answer to that. The enterprise allocation scheme for groundfish in Atlantic Canada that was introduced about 15 years ago is a non-transferable approach, at least in theory. The enterprise allocations given to the offshore processing companies, National Sea Products, Fishery Products International and others, are non-transferable. Technically, they can be transferred within a season between companies that need a bit of flexibility in their quotas, and I do not see anything wrong with that myself.
In practice, we have seen fish plants in Atlantic Canada closed down by those companies that hold those enterprise allocations, and those allocations have then been moved to other locations. That I think is a failure of that process.
You might recall Canso. It has been several years ago now. I credit Canso, at least for me, with the first expression of the idea of a community quota. They said, "Why do we, here in Canso, not hold this quota, rather than National Sea Products, or some of the companies holding the quota?" Why not? Why not allocate it to the community where the fish plant is located? If the fish plant wishes to leave, then tell whoever wants to buy it that they would then have access to the quota in that community. That procedure always made sense to me.
To me, the fundamental way to keep the "T" out of the IQs is to make sure that you are operating on a community basis. I may not know too much about coastal fishing communities, but I do not think a coastal community, as a group, is going to sell off its key asset, which is access to the fishery. I do not think that is going to happen.
So if the community is controlling the quota overall, even if there are individual quotas within that community quota, even if a community quota is subdivided amongst the fishermen, I think that safeguards it, personally. At least it guarantees that the community will retain the benefits of that quota. So to me, that would be a key step.
Senator Butts: So instead of IQs, the solution is CQs.
Mr. Charles: My comments on that is that Alaska -- it seems strange to use Alaska as an example -- is the one place in the world that I know of that has named their quotas "community development quotas." I think we have something to learn from that concept.
We have community quotas right here in Nova Scotia, in Scotia Fundy, including southwest New Brunswick. As I mentioned earlier, it is an experiment about which I think everybody would agree has succeeded.
Senator Butts: I think we had some in Nova Scotia in the past, as well, especially in Cheticamp -- in 1970-71, I believe -- and that was owned by a co-operative.
I would love to join in your sales pitch for community quotas, as Senator Stewart mentioned, but I cannot answer his question either. I think the relevant point, though, is that the community quota system, as we had tried to propose it in the CCN, was that the board that regulated it would be more than fishers. The board would be comprised of community leaders, municipal politicians, people from churches or the board of trade. The aim is really to sustain those communities. The assumption was that there is not going to be much growth, but there will be a disappearance if we do not do something. In my sense, it was that desperate. That is why I do not know what I would do if a whole lot of people came into that community.
The Chairman: I have a couple of questions, Dr. Charles.
Apparently there is no government policy on the whole question of privatization. In the absence of government policy or public policy, the DFO has taken it upon itself to set policy on this. The best I can understand it is that every sector is looked at individually, and if it is found that it would be a good idea the department goes ahead and does it.
That can create a problem, and fishermen explained the problem to me the other day this way: What if the department wishes to privatize a certain sector of the fishery? It creates a rumour or starts a rumour that this fishery is going ITQ. This puts pressure on those people who have the licences who are now in a common fishery to put the pressure on increasing their catch history, which then causes problems in that sector of the fishery. It starts depleting the stocks. It does all kinds of damage to the stocks. At the end of the day, the DFO comes in and says, "Look, this is a mess. We have to put in an ITQ in order to fix this mess." I am relaying the story the way the fisherman relayed it to me.
Judging from what I have seen over the last number of years, the theory makes a lot of sense, the way the fishermen explained it to me, but this is in the absence of public policy on the whole concept of privatization.
I asked the FRCC chairman a couple of weeks ago whether the FRCC might be interested in looking at this, at community quotas, privatization and so on, as a means to possibly solve the problems in the fishery. The chairman indicated to me that he did not have the right or the mandate to even look at this through the FRCC. I find this sad, because the FRCC is the group that probably travels the most in fishing communities and meets the most with fisher people throughout Canada.
Would you have any comment to make on whether the FRCC mandate should be expanded to include looking at the question of privatization and/or community co-management?
Mr. Charles: That is a good question to someone who just three weeks ago ended his term on the FRCC. I was the chair of a committee on the council that produced the report, as I mentioned, that examines the conservation impacts of quota controls and effort controls.
We did not look at issues of privatization or, in particular, at individual quotas more than the sort of topic that I discussed today in terms of the conservation. We focussed on the conservation impacts.
Very briefly, I guess I would agree with the chairman of the FRCC. The FRCC has gained a good deal of credibility by steadfastly avoiding the territory that deals with allocation issues, and who gets the fish, and what is the management arrangement in the fishery. I think it has set the FRCC in a particular moral ground, I suppose you might say, by avoiding some of that discussion.
That being said, I was very firm, as well, in my committee of the FRCC in wanting to do the study of the conservation impacts. As my brief I think tried to get at, there are conservation impacts of individual quotas. There are also social and economic impacts, as I mentioned, but there are serious conservation impacts. It is certainly well within the FRCC domain's to look at that.
In fact, we did look at it with the discussion paper that I mentioned -- which I would certainly recommend to your committee. In terms of doing a full study, I think that would indeed be going beyond where the FRCC should be. I hate to say that, in a way.
The Chairman: We must consider the question of ownership through privatized quotas. The department advises us that it considered this to be a quasi property right; that this is not actually property rights.
Property rights fall under provincial jurisdiction, however, and the fear is that the provincial courts might look at this completely differently. The courts might decide that the quotas have indeed been privatized, and are, therefore, now under somebody's property. What would your comment on this be?
Mr. Charles: I will put this into the context of a point that I made earlier about the future of communities. In terms of access to the fishery, the people of Sambro, which is a community with a strong fishery background, not far from Halifax, feel that, had they not set up a community quota when they did, they might have lost everything. Part of the reason for that involves the concern over the buying up, consolidation, or concentration of quota.
Property is involved here. As I am not a lawyer, I could not list all the technical and legal aspects of property for you, but they do seem to be in here. For example, quota holdings can now be used as collateral on loans. They might even be split up in divorces. There are all sorts of indications that we are dealing with property.
I did make the distinction that it is important that, when we talk about privatization, we are not, I hope, selling off the fish which are swimming in the ocean. The property that is involved is the right to catch particular quantities of fish. That is what an individual quota tells us. That particular right has a monetary value connected to it -- people buy and sell it. If the quota is transferable, at least there is a market for it. In my opinion, property is involved in that process.
I would like to speak about the case of other natural resources. As far as I understand it, the federal government, on behalf of the people of Canada, can lease out access to Crown land for lumber operations, or for oil-drilling. In the fishery, for some reason, perpetual rights are handed out. It may not be entirely clear that they are perpetual rights, but there is certainly no time period associated with an individual quota. That is strange, given that every other resource sector in Canada has time periods for leases.
The Chairman: I will refer to the question of concentration. You alluded to it in the case of Canso, where a company which owned enterprise allocations moved the landings from one community to another. That showed what can happen when a corporation owns the resources that are supposedly owned by the Canadian public, and leaves the community holding the bag. In that case, the taxpayers had to help the community of Canso survive. This fits in well with your opening comments, where you said that there is an overall cost to this, and the taxpayers are paying it.
If enough of these stocks were to be concentrated in fewer and fewer hands, could this not become something that could be traded on a stock exchange such as the TSE? Would the shareholders be anymore beholden to the fish stocks than the communities who have depended on the stocks for centuries? At the end of the day, who is going to care more for these stocks?
Mr. Charles: That is a very good point. I am not a sociologist, but I do know that a lot of social science research has shown that those who live closest to natural resources tend to be the best stewards of those resources. There is a tendency to conserve the resource, although there are certainly exceptions.
In general, proximity to the resource does tend to promote conservation. For examples of this, we can look at coastal communities, but also at inland forest communities, where the tendency is for those communities not to sell off the possibility of future jobs.
On the other hand, as the fishery is more and more viewed as just another asset in a market portfolio, there will be less attachment to it. From a social point of view, that could not be otherwise.
Economists tell us that IQs or ITQs enhance the idea of the ownership of the resource, which in turn enhances conservation of the resource. As your question points out, however, we must consider that there might be limited validity to that.
It is absolutely true that I take care of the little plot of land that my house sits on in Halifax. I own it, and I take care of it. There is something to be said for ownership. There is also something to be said for proximity, which might encourage the communities, as a group, to maintain the resource.
It seems that the DFO is absolutely committed to pushing for IQs and ITQs. The DFO has a great number of employees, but there are no social scientists on board. Thus, there is no understanding of how a community, as a group, could conserve a resource. Perhaps it is not the DFO's fault. Its employees do not understand; they have not read the literature, and they have not seen this for themselves. They may not have visited enough of the coastal communities. In my opinion, that is the saddest aspect.
Senator Stewart: I come from a fishing village where many of the people in the DFO are referred to as Rideau Canal fishermen.
Reference has been made to Canso. I was the member of Parliament for Antigonish-Guysborough when Acadia Fisheries built what was, at the time, the most modern fish plant on the East Coast of North America, in Canso. The taxpayers of Canada put in a water and sewage system in order to make that plant possible.
Acadia Fisheries was a British company, and, for reasons that had nothing to do with Canada, but had a great deal to do with the government of the United Kingdom, it could not carry on. The company sold, and the buyer decided to land the fish near Halifax instead. It was called rationalization.
This experience, which has been a somewhat embittering one, prompts me to ask some questions. First: If Canso were given a community quota now, is the condition of the fish stock such that its fish processing operation could be revived at a viable level? Also: What kind of fish are being landed by the Sambro operation? Are the stocks adequate for the future of that operation?
Mr. Charles: I have spent five years on the Fisheries Resource Conservation Council, and I have come to feel very strongly about conservation. Many others in the fishery have come to feel the same way. I do hope that people will be very careful about some of the calls for opening up fisheries, such as the ones in Newfoundland.
I have looked very closely at the groundfish fisheries in Atlantic Canada. It is my feeling that the fisheries which have been closed should remain that way. One of those is called 4VsW, the fishery off the eastern shore of Nova Scotia. It is in terrible shape, and it is one of the saddest situations. Part of the cause might be environmental, but a huge part of the cause has been over-fishing. We do not know who is responsible, but there was a huge amount of non-reported catch; in other words, illegal fishing. It is very sad.
My in-shore fishermen friends on the eastern shore were not the big cause of the collapse of that stock. They were not responsible, except in a small way.
In the near future, there can be no great hopes for the local groundfish, particularly around Canso. A plant is operating there now, but I do not think that it is doing much business in groundfish. It mostly deals with shellfish, like shrimp and crab. The plant is operating, but I do not think that there is hope for its expansion in the near future. I do not have a business plan for it in front of me, but I would think that, for the moment, it is operating at its appropriate level.
In my opinion, Sambro is an example of everything that can be done in a community. Everything that can be done is being done in Sambro. The fishers are fishing a diversity of species. Historically, they have fished both up the eastern shore and down towards the southern shore. Now they are only fishing groundfish towards the southern shore. They also fish large fish like swordfish and a variety of other species.
Work is being done to diversify the fishery. The fish plant runs an aquacultural research operation that will hopefully develop into a commercial enterprise. There are efforts to develop Crystal Crescent Beach, which is near Sambro, into more of a tourist attraction.
In my opinion, the ideal approach is to try to diversify within the fishery, as well as outside of it. I know that it is a hard battle. I can only imagine how much harder it would be to try to diversify in an outport in Newfoundland. Diversification is not an easy task, but the people in Sambro are making an effort.
As I mentioned earlier, the people in Sambro feel that having the community quota is a crucial step towards the stability which they are hoping to achieve.
The Chairman: On behalf of the committee, I would like to say that we appreciate your willingness to come in and present to us this morning. Your presentation will be very important for the report that we will present this fall.
Mr. Charles: I would like to thank the committee members, and I will send my brief to you in the near future.
The Chairman: Our next witness is Mr. Arthur Bull, who is the co-chair of the Coastal Communities Network of Nova Scotia. That organization is an association of representatives from the fishing industry, harvesters and small processors, municipalities, economic development agencies, and church and community organizations. The network was founded in 1992, in response to the crisis in the groundfishery.
Mr. Bull also represents about 250 fishermen with the Fundy Fixed Gear Council. I open the floor to you, Mr. Bull.
Mr. Arthur Bull, Co-Chair, Coastal Communities Network: Thank you for allowing the Coastal Communities Network this opportunity to present our position on this issue. It is a very important issue to coastal communities in Nova Scotia.
Senator Butts knows as much as anyone about the history and the mandate of the CCN. I will defer to her in that regard.
Over the last few years, the CCN has focused on fisheries issues. We have done a lot of the ground-breaking work on co-management and community-based management in the fisheries, and we have played an advocacy role on behalf of coastal communities in Nova Scotia, particularly on fisheries issues.
This morning I would like to present the CCN's position on privatization and on ITQs. I will not present a lot of research data, expert information, and research background. Instead, I will present a position based on the experience of the people who live in coastal communities, and who have been affected by this policy.
I will focus on ITQs. I know that privatization takes in a number of different management approaches. The ITQ approach is only one of them, and it has been the aspect of privatization that has most intensely impacted on the coastal communities of Nova Scotia.
I will present the CCN's position on ITQs, and give a few examples that relate to that position. I will mainly draw on the Bay of Fundy area for these examples. As you know, I am also involved with the Fundy Fixed Gear Council, which is the fixed gear management board for the Nova Scotia side of the Bay of Fundy. I will therefore draw on that area, although my comments could apply to many of Nova Scotia's coastal communities. I will also talk about some alternatives to privatization, such as community-based management. I will end with some suggestions for possible actions.
The CCN's position on ITQs is clear and unequivocal. We are opposed to ITQs on the grounds that they are destructive to the resource, and destructive to the communities that depend upon it. Privatization undermines both the viability and the sustainability of Nova Scotia's coastal fishing communities.
I will make a few general comments about the policy of ITQs, again from the point of view of the people who live in coastal communities.
First of all, this is not a new policy, although you might take it to be a new and innovative approach if you were to read the Ontario newspapers. As Dr. Charles has pointed out, this approach has been used for some time, and we can see the effects that it has had on coastal communities. This is not a theoretical question, nor is it a question of economic theory. This is a question of something that has happened and is happening. The people who are impacted by this can see the effects of this policy.
Although this policy has been in place for a number of years -- well over a decade, and in some cases almost two decades -- there has been no public evaluation of it.
ITQs are the result of a specific and direct public policy. They did not come into existence because of market forces, demographics, or technological change. They are the direct result of a federal government intervention in the fishery.
Most of the people in the coastal communities who are affected by this policy are opposed to it. I live near Digby, which has a population of less than 3,000 people. In 1996, 1,000 people marched there in opposition to ITQs. On the day of the worst storm of 1996, with about four days notice, 5,000 people marched in Halifax in opposition to ITQs. This is not a policy which was brought in by popular demand.
I would like to touch on the question of ITQs as private property. From the point of view of the people who live in coastal communities, this is private property. From the point of view of people who have ITQs it is private property. It is bought, sold, and leased. I know of at least one case where it has been identified, by the courts, as private property in a divorce settlement. If it walks like a duck and quacks like a duck, it is a duck. In the opinion of coastal communities, we are talking about property.
I will touch on the DFO's handling of this policy. There has been a lack of clarity, of information, and of transparency in the development and implementation of this policy.
Sometimes ITQs are referred to as simply an allocation right. Sometimes they are referred to as a quasi property right, and sometimes they are treated as property. Someone in our community tried to find out about individual allocations under the ITQ program, but was turned down. This person then went through Access to Information, and was turned down again. The justification for this was that the requested information was individual information; that is, it dealt with individual property.
I understand from the transcript that the senior DFO officials who spoke before this committee referred to ITQs as an allocation, or, as Dr. Charles defined it, a user right. There is quite a bit of ambiguity, even on the time periods. In their testimony to this committee, senior DFO officials said that the groundfish ITQ had a nine-year time span. Last week, however, I read a press release from the DFO that called ITQs a permanent allocation.
Coastal communities want to know why there is no clarity on this. This policy allows for the privatization of a public resource without any public debate, and it has been imposed on communities who do not support it. As a policy development and implementation process, the ITQ policy is flawed.
The proponents of ITQs may say that, while they did not perhaps explain ITQs well, they are efficient, and they do work. From the point of view of the resource, and of the economy of the coastal communities, let us see how they have worked.
In the case of the resource itself, it has been clearly documented that ITQs increase the rate of high-grading, discarding, misreporting, and the dumping of small fish. This has been documented by the DFO itself, and Dr. Charles outlined why it happens. From the perspective of the coastal communities, it is important to understand that this is a very difficult issue.
The people who live in coastal communities know what is happening on the water. Their neighbours, brothers, and friends work on these boats, and they work in fish plants. People know what is going on. It is very difficult to see massive waste happening. When it happens in the same stocks that support the small boat in-shore fishery which is the backbone of the coastal community, it is particularly difficult. That fishery is trying to survive with very limited access to the same resource. The issue of conservation is a very difficult one.
I have a couple of example from my own experience as the coordinator of the Fundy Fixed Gear Council. In 1998, a massive amount of small spawn haddock was taken off an area adjacent to Brown's Bank. This is something that everybody in our communities knew about. When lobster fishermen go to buy bait they see these fish. We know what is being caught, and there is a very strong feeling about it.
This did not hit home for me until I received a call from an active dragger captain. In my capacity as a representative of Fixed Gear, he called me and said: "Something needs to be done about this. It must be stopped." He spoke about the possibility of the resource being finished off, if this kind of practice were continued. He said that four out of five of the boats in that fleet had liners in their nets. This comes from a dragger captain -- somebody in the ITQ fleet.
There was a report that, in the first two months of the season, two boats had dumped more than 240,000 pounds of groundfish. There were more than 100 tonnes of fish dead in the water. This came from a source well-positioned to know the facts of the matter.
These anecdotes serve to give you a sense of what this looks like at ground level; what it looks like in coastal communities. From the point of view of the coastal communities in Nova Scotia, the ITQ policy is a complete failure as a conservation measure.
With regards to the economic effects of ITQs, Dr. Charles described a concentration of ownership is promoted. This has certainly happened in fleets where ITQs have been brought in by the DFO. As he pointed out, those who have the most capital -- that is the processors -- are able to buy up the quota. In addition to this, they are also able to buy licenses and enterprises. This is a very dangerous combination.
The DFO's licensing policy for Scotia-Fundy says that there is a fleet separation policy -- that is to say, the enterprise must be owner-operated. To have a licence you must run the enterprise yourself. This policy is not enforced, however. It is possible for a plant to buy not only the quota, but also the enterprise. The plant can then run the enterprise. The man in the wheelhouse, who, on paper, is the owner/operator, is, in fact, an employee of the company. This is happening on a large scale in all of the ITQ fleets.
Let us consider the logic of this. We have a public resource which has been privatized without any public debate, and which has gone into the hands, not of the fishermen, but of the companies on land.
What is the next step in that sequence? In coastal communities, we do not know the answer. We have no control over the next step.
If the owner of a large part of a fleet, along with his quota and licences, were bought out by a foreign company, a Canadian resource would be owned by another company. This could happen this year. We do not need the MAI for this to happen. It is a very conceivable outcome of privatization.
The very existence of the coastal communities is based on this resource, and they have, in a sense, been dealt out of access to it. Again, from both an economic and a conservation point of view, the ITQ policy has been, and will continue to be, destructive to the very existence of coastal communities in Nova Scotia.
I will speak about alternatives to ITQs. I believe that it is important for the CCN, and for the communities that we represent, to not only attack this policy as being detrimental, but also present alternatives to it. As I mentioned, the CCN has done a lot of the groundwork in developing co-management.
Dr. Charles talked about the emerging community-based management models that are now in operation in Nova Scotia. There are other cases of community-based management emerging in Atlantic Canada as well. It is important to know that this is probably the major worldwide trend in fisheries management.
In trying to learn how to achieve community-based management, we have spent a lot of time looking outside of Canada. The World Bank is hosting a conference on community-based management in Washington for organizations from around the world. That gives you the sense that this is a somewhat legitimate approach.
In the question period I would be happy to fill in more details about community-based management. For now, let me talk about some of the principles involved.
The first principle is that fishermen and their communities must play the primary role in the stewardship of the resource. To that end, clear, democratic, and transparent decision-making processes, which include the fishermen and their communities, must be brought in. This is the crucial element in community-based management. The people who are affected by policies must have input into the creation of those policies.
The second principle is that community-based management is able to take more of an ecological approach, or an ecosystem approach, to management. By that, I mean it is able to look at the interrelationships between species, between habitat, stock, fishing patterns; it is able to look at the whole picture. This is quite different from the kind of management which we have had under the DFO, which has tended to put things into discrete boxes and deal with species, fleets, gear types, and areas very, very distinctly. That ecological approach is very important to community-based management.
Thirdly, "community-based management" means that management of the fisheries can now be developed in the context of sustainable community economic development. This means that we can look at the maximum number of sustainable and viable jobs in that community. This is a very interesting aspect of community-based management that is emerging because it means, from the point of view of the Canadian public and the Canadian taxpayer, that we can look at the fisheries as an investment, as a viable job creator. Is it efficient to have a boat with a crew of three or four people, with a quota that could support 60 or 70 people on the water? Those kinds of decisions need to be made. This idea of managing the fishery is part of community economic development and a shifting perspective. I think it is probably the most promising aspect of a community-based managed fishery that is emerging today.
I think I shall stop there. I have other material, but I think it will come out in the questions. I will be presenting a written brief as well to support some of the things I have said. Thank you.
The Chairman: Thank you very much, Mr. Bull. We will start off with Senator Stewart.
Senator Stewart: I want to ask the witness if I am correct in believing that he heard the discussion we had earlier?
Mr. Bull: Yes, I did.
Senator Stewart: Then you know a little bit of where I am coming from. I have three questions, Mr. Chairman. I think I shall proceed in ascending order.
Mr. Chairman, as you know, we had a witness at our last meeting who defended the Individual Transferable Quota (ITQ) system very strongly, on the basis of a particular fishery on the West Coast, namely the sable fishery; that testimony may not be available to Mr. Bull. I have here a document which I think he will have read. It is the report of the House of Commons Standing Committee on Fisheries and Oceans, tabled just a few days ago. I am going to read paragraph 66:
In South West Nova, however, a representative of the inshore mobile gear fishery viewed the ITQ system differently. Before the ITQ system reorganization, the fleet had grown rapidly despite attempts to limit fishing effort, with the result the capacity expanded to an estimated 400 per cent of that needed. Switching to the ITQ system had brought benefits such as the ability to plan fishing activities according to market and weather conditions, and availability of the resource. It also provided the opportunity to develop other fisheries that would not have taken place under a common property regime because of bycatch provisions.
Now, that part of Nova Scotia is the same as the one in which you live. This refers to the inshore mobile gear fishery. Why is it that that view comes from your part of the East Coast and is so different? Presumably they have good reason for taking that position. Do you know what that good reason is?
Mr. Bull: I do not know who made the comment. My general experience has been that those people, those very few people who win from the ITQ policy, usually support it. This would be true whether you went to Iceland, Norway or New Zealand. There are winners, but there are very, very few. Now the thousand people who marched in Digby clearly did not see themselves as winners, but you can always find somebody who has benefited.
Senator Stewart: You are with the Fixed Gear Council, and I noticed and tried to emphasize that this is the Mobile Gear Fishery. Would the difference in the gear help to explain the differing viewpoints?
Mr. Bull: Some people have proposed bringing ITQs into the fixed gear fishery. You would probably find the winners in that particular fishery saying the same thing. The few big boats or companies that get the quotas and the licences would say that this is a great system. The trouble is, you do not often hear from all the people who have been shut out in their communities.
Senator Stewart: Contrary to what the department believes or says it believes, you say that the ITQ system results in massive waste. You referred to liners in nets. Could you explain to us why the community-based management of particular fisheries would put a greater emphasis on conservation?
Mr. Bull: There are a couple of reasons. The fisheries, instead of being managed by a company for profit, would be managed for sustainability and viability. This touches on a point that was made earlier: the people whose families and children depend on this resource are the ones in the best position to take on its stewardship. There will be a different approach to management, one that looks beyond profits.
The question of compliance also arises. My experience is that the community management boards are able to get their members to comply to conservation measures in a different way because they are run by those very people. For example, in the Fundy Fixed Gear Council, there is an infractions committee, which is a committee made up of fishermen. If you do not comply with the management plan, you come before that committee, and it has the power to impose a sanction on you. It is no longer a question of how can we outsmart the DFO to catch more fish. The committee is very clear: if people catch too much fish or break the rules in some way, they are taking away from their neighbour. This different approach to fisheries, where the fishermen themselves play the role of stewards of the resource, seems a lot more promising.
Senator Stewart: What particular species of fish are taken by your organization in the Digby area?
Mr. Bull: It is groundfish: cod, haddock, pollack, hake and halibut.
Senator Stewart: Now, I come to what I think is my most important question. I must say I find the idea of community-based management very attractive. I do so, Mr. Chairman, because I watched what happened at Canso, from the trouble we had getting the Acadia fisheries plant in there to the subsequent history of that plant. Community-based management would have been a great advantage to Canso, and to Canada.
I wonder if the witness feels that all the different species are suitable for this kind of management. For example, is the lobster industry? Is it more necessary in some species than in others?
Then we move to the whole question of responsible stewardship. I remember, Mr. Chairman, the days when we had fishermen's cooperatives in parts of the Northumberland Strait area, and some of them seemed to work quite well, almost as well as the witness suggests that the community management scheme as a whole would work. Others just worked dismally.
I think it is a tough question, but I think it is a question that has to be dealt with. Opponents of this approach will inevitably ask if you are not making assumptions about the quality of the judgment of the management in these community-based enterprises. Are you not making a very optimistic judgment, posing the ideal over and against the painful realities?
Secondly, I would like to ask the question I asked earlier: How is the community going to decide which of the fisher's five sons is going to replace the father in the fishery?
Mr. Bull: I shall touch on a couple of those questions. I do not know if I shall get them in the right order or not. First of all, in terms of other species. I think there is nothing unique about groundfish in terms of being suitable for community-based management. A community-based management initiative in Newfoundland, in lobster, is apparently working very successfully. Their productivity has gone up steadily every year through the use of conservation measures, of enforcement in most areas. I could see it working in the intertidal fishery in clams and lobsters. I am not sure where that would end, but it certainly is an approach that is not just attached specifically to groundfish or fixed gear.
I just want to comment briefly on your mention of cooperatives. It is very interesting that some of the community-based management groups are, in fact, starting to look at cooperatives, marketing cooperatives and investment cooperatives, as the logical next step. They feel that if they are not going to get a whole lot more fish, that they should look at a way to increase the economic benefit, at quality programs and value-added programs. That very interesting trend is emerging as part of this community economic development question.
In terms of being optimistic, maybe that is the only thing you can be in the fishery. Otherwise, you have to throw your hands up. But I am also basing that on my last three years' experience of actually managing the fishery -- not me personally, but the fishermen and their representatives -- on Nova Scotia's side of the Bay of Fundy. I think the key thing here that certainly helps in terms of having good leadership and getting good decisions, is very strong organizational development, not just having a few people telling a bunch of people what to do.
In our organization there are elected port reps for every wharf. There is a hand-line committee that is elected geographically; a long-line committee, a gill-net committee, and an infractions committee. They are all elected, so that accountability is built in. It seems to me, that whenever you have that process, you are less likely to run into a situation where a few people are going to hijack the process.
I will now come back to the five sons question. I do not have a ready answer to that either, except to say that the key change here is that these questions of viability, of who should and should not be in the fishery, should be decided in the communities affected by them. The federal government should not be telling us what is a viable income in our communities. To somebody in Ottawa, a viable income in the fisheries does not mean the same as it does to somebody who lives on Digby Neck. Whether or not four or three or two or all five can come in is a local decision. That question of what is viable can only be made locally.
Let me just add as well something I left out. When I say the fishermen elect representatives to manage the fishery, there are community representatives on the council. There are in the Fundy Fixed Gear Council anyway. The fishermen have the primary role in management, but there are also community reps, so the council represents the broader community.
Senator Stewart: I have one last question of jurisdiction. I am prepared to make a guess, that one of the reasons why the regimes have prevailed in the fisheries is because the fisheries are under the Parliament of Canada. The proposal that you are putting forward would entail legal structures which, in part, would come under provincial jurisdiction.
I wonder if your council has dealt with the problem of mixed jurisdiction here. Perhaps the unsatisfactory situation we find ourselves in now results from the fact that the federal government has dealt with this question primarily as an industrial question, whereas you are talking about a social approach to the fishery. I should think that many aspects of that would come under provincial jurisdiction. Have you dealt with that problem?
Mr. Bull: We really have not come to grips with it. I think that jurisdictional question is a really important one. In essence, we are talking about giving jurisdictional authority to coastal communities. I think it is something we are going to have to come to grips with, particularly because this government is going to table the Fisheries Act again this year, I understand. That is going to have major implications for jurisdictional questions in particular, because it does not define who the minister can sign a management agreement with. It basically opens the door to complete legitimization of these property rights and to shutting communities out.
So, from our point of view, that Fisheries Act, if it is tabled in the same form that it was in 1997, is a very serious threat to coastal communities. To make it a positive piece of legislation, it needs a provision that states that one of the standards you must meet to sign a management agreement is that your community, the people affected by this management agreement, must be part of the process.
The Chairman: Thank you, very much, Mr. Bull. The whole subject of the Fisheries Act is indeed going to have an impact on the subject we are having this morning. We shall have to postpone that, the specifics of the Fisheries Act, to a different meeting, but you are right in pointing it out.
Senator Butts: I will just pick up on that last point following Senator Stewart's. You may have a little head-start on it if you are trying to taking control of your own wharf. Has that begun down there yet?
Mr. Bull: That is interesting, because it seems to be, again, something that follows naturally from community-based management. I think we are trying to deal with that other aspect of privatization. Even if we got all the management questions right, the physical infrastructure to actually fish may be taken away. That is part of the community economic development side of the fisheries again. We need to get organized around the wharves, buoys and so forth. I think that, again, is something that follows from this general movement toward communities taking more control of their future.
Senator Butts: That is precisely why I brought it up. I think that if that same community board took over the wharf's management, you would have to charge a small fee to each user. Whatever way you do it, it would not present another problem of jurisdiction.
I was interested in your presentation, that it was specifically about ITQs. Would IQs fit in all the things you talked about as ITQs?
Mr. Bull: I think Dr. Charles referred to this in his presentation. Within the context of community-based management, a fleet could be managed by IQs if the transfers did not go longer than a year and were not permanent transfers. I do not think that would necessarily be a problem. We do not have IQs at all for our fleet, but I know of other fleets which do come under the heading of "Community Management," so I think it is possible. The key is that they must not be permanent, that they are not being treated as property.
The other thing that is critical to this owner-operator policy is that it cannot go to somebody who is not a fishermen, who is not an owner of an enterprise. That is also key to us.
Senator Butts: There is not universal agreement on this so far, is there? A witness from that region was all in favour of IQs and ITQs and was convinced that that was the way to go. Do you have any opposition from people such as these?
Mr. Bull: There certainly are differences of opinion on this. Without impugning anybody's motives, I do not think the nature of this management approach means that there are a few winners and a lot of losers. Basically, those who win, whether it is Norway, Iceland or Nova Scotia, are going to be very much in favour of the approach. For the people who do not have ITQs, not too many of them support ITQs, let me put it that way.
Senator Butts: I would like you to explain for me in a little more detail what the role of the DFO is in your scheme?
Mr. Bull: Essentially, we have just started down the road towards community-based management. We are in somewhat of a hybrid situation where the DFO has essentially assigned us a quota based on the catch history for our whole area between 1986 and 1993. We still have a quota system that has been allocated to us.
Other than giving us that quota and assigning the licensing conditions that are attached to the actual licences, the DFO does nothing. Essentially, they say, "There it is. Manage it however you will." In order to make that work, we have civil contracts which the fishermen actually sign with their own organization, indicating that they will abide by a fishing plan, and so forth. The DFO does not enforce our plan; we have to do it ourselves. It is self-enforcing in a way.
But other than giving us that quota and enforcing it on the water, the DFO plays very little role. However, the enforcement issue is an important one because the DFO has faced very serious cuts, as we know, and there is very little enforcement on any fleet now.
We would like to have a more formal agreement with the DFO. We could take care of a lot of these management things, the licensing, and so forth. But there are some things we'd like the DFO to take care of, and one of them is enforcement on the water.
Senator Butts: Community-based co-management therefore becomes a community-based quota. Is that quota labelled as community?
Mr. Bull: Yes. Right now it is. It is called a "community quota."
Senator Butts: Therefore, community-based co-management assumes a quota for a community?
Mr. Bull: Yes, it does, in terms of coming back to the question of ownership rights. It is not that we want to own that quota as a community. We want to take care of that quota on behalf of the Canadian people. It is a public resource; that we as the people who live and work adjacent to it, in a sense, will hold in trust for future generations.
Senator Butts: I agree with you completely. I think it is very important, though, that you do not just say "co-management" or "partnerships," because these words have taken on a completely different sense within DFO and other documents.
Mr. Bull: I agree completely with what you say.
Senator Butts: In this scheme of things, what place is there for the myriad of fishermen's unions that you have in Nova Scotia, for example?
Mr. Bull: The way our board is structured, the associations and unions are actually the groups that make up the management board. For example, when the Fixed Gear Council was created, there was the Island's Inshore Fishermen's Association, Bay of Fundy Inshore Fishermen's Association and the Maritime Fishermen's Union. All three send representatives to sit on that management board.
The unions and associations are the democratic bedrock of the management board. Where you pay your dues is where you get your card and where you elect your representatives.
Senator Butts: Would it be to your advantage to amalgamate these into one union, or even dispense with them?
Mr. Bull: In my opinion, there would be an advantage, but many associations in southwest Nova Scotia have a long history. I think people feel that they want to keep what's there, and that they might be waiting some time for everybody to join one union. It may happen, but I think it will happen through a process of people participating in this management process.
Senator Butts: Have you been able in the past year -- since I have been away from it at least -- to get mandatory dues from these unions?
Mr. Bull: Mandatory dues have not been passed in Nova Scotia except in one of the regions. Mostly they were not passed because too small a vote came out. However, in our area, in a sense, we have mandatory dues. In order to fish under the Fixed Gear Council's plan, you must join the association. Everybody who fishes joins. We are about 95 per cent paid up in our dues, which is usually the real measure of whether fishermen are supporting it or not.
Senator Butts: Your union dues become part of your licence to fish?
Mr. Bull: Yes. You must join the association before you can sign one of these civil contracts.
Senator Butts: Thank you very much.
Senator Perrault: Mr. Chairman, I hesitate to intervene in this very enlightening dialogue. I am from the West Coast, not from the East Coast, but my education has been advanced substantially as a result of hearing your very useful remarks.
We have similar concerns on the West Coast. I am not going to get into the details, there will be a time and day for that. However, we are coming to the conclusion that there is a worldwide crisis in the production of food fish, that afflicts not just North America but the whole world. It may have something to do with the vast environmental changes, such as the ultraviolet emissions, the thinning of the ozone layer, and the destruction of plankton that feeds the cod.
I wonder if you have any views on these theories, that environmental factors may be the major cause of the collapse of the fisheries? Then I have a couple of other questions.
Mr. Bull: Honestly, I am not in a position to know; I do not have the scientific background to answer. But questions like that could be part of community-based management. The research and scientific aspects of the fisheries would, in effect, become part of community business management. If there is an environmental change in the Bay of Fundy, fishermen could be out there monitoring it. That information, which will affect the fishing plans, could be fed back into the management process.
Senator Perrault: The coho on the West Coast is near extinction. Certainly you have advanced some very positive ideas today about how more effective management systems can be brought into existence. I am just concerned that the solution does not lie in management technique improvement alone. It is a much larger question than that.
A number of people across the country have suggested that we place fisheries under provincial control. Do you think a case can be made for that? What is the position of your organization?
Mr. Bull: I am not sure that that would be an easy solution. Perhaps the province should have a bigger role and should be at the table.
We are more interested in moving jurisdictional control to the community level, but this may be a different situation on the West Coast.
It will be important that all the players sit down at the table, and that this does not end up being a turf war between different jurisdictions, whether local, provincial or federal. It is clear that we have to move towards an integrated view in managing the fisheries, and that we have to get away from this fragmentation of who is responsible for what.
We would welcome a larger role. Our organization would welcome a larger role, and the province surely would. I am not sure we would want to necessarily see the whole thing shifted over. It is more important to think about local management.
Senator Perrault: Perhaps greater provincial involvement, with the idea of working together with the other levels of government and with organizations such as yours, would make a great deal of sense, if we are facing this kind of crisis.
On the East Coast, I understand that there has been another decline in Atlantic salmon stocks. Has any reason been delineated?
Mr. Bull: Again, it is out of our organization's area. I am not sure. I have heard the same as you.
I think the province could play a really positive role in looking at this approach of community and economic development and cooperatives and value-added to the fishery; that is, improving the economic side of the fishery.
Senator Perrault: And thereby improve the employment prospects and all the rest. I think you have brought a very positive paper to this meeting today and I want to thank you as a West Coaster for what you are doing?
The Chairman: Thank you very much, Senator Perrault. Mr. Bull, you made a comment regarding a minister's statement whereby he had referred to ITQs as permanent allocations. I wonder if you could get the quote in question, or where you got that quote. We would like to see it if we could.
Secondly, on the question of quotas and community co-management, I know you are looking at it from many, many directions. But right now, your quota is strictly groundfish. However, one of the great advantages of community co-management is that if the pressure on one stock becomes just too great, you can relieve the pressure from that stock and place it on something else. A fisherman can move on to a different species of fish. Is your group entertaining this objective, to get more of a multi-species fishing approach? Or is it something you cannot afford, that is pie in the sky for the time being.
Mr. Bull: I think it is one of the real possibilities that could come out of community-based management. You know, as does Nova Scotia, that the great strength of the economy is that multi-species approach, that flexible approach to fishing where it is not all one species or one way of fishing. Traditionally, that has been the way it has succeeded. I think we should look to our successes in deciding how to proceed in the future.
I agree with your last comment, this it is not going to happen over night. Remember, almost all of our members, the fixed gear fishermen, are also lobster fishermen, so it is not perhaps as far off as we would think.
The Chairman: I have one final question. One of the downsides of multi-species fishing is that if a fisherman does not use a specific licence for a number of years, the DFO has tended to go in and remove that licence, thereby placing a pressure on the fisherman to use it. That is one of the dangers of having one, two or three licences. Would the community co-management approach lessen somewhat this incidence?
Mr. Bull: When we look at community-based management, there is no reason to think that part of that management would not be licensing. In fact, licensing would be part of the management. Our organization is setting up a licensing committee made up of community and fishermen's reps to actually develop a local licensing policy. Those kinds of issues, again, should be decided at the community level, according to what benefits the community.
Senator Stewart: My question is on a very different topic. I have watched fishermen increase their capital investment by getting a new boat and putting all the newest gear on it. When I ask them if they really need that, they tell me that they do not, but that they are pushed into it by the Income Tax Act.
Do you have any experience with that kind of effect on the fisheries flowing through from the Income Tax Act? If you get a better boat and higher quality equipment, you have to get more fish to pay for it, and thus the vicious circle that all starts with the Minister of National Revenue.
Mr. Bull: It is not such a big issue in the fleets that we represent because those fleets are basically hanging on by the skin of their teeth. There is not a lot of capital investment in that fishery.
It is an interesting question in terms of the capacity of the fisheries. It is fascinating to look back at the economic role of the federal and provincial government in financing the building of boats way beyond what the fishery could sustain.
It would be good to look beyond the DFO's role. The HRDC has just spent several billion dollars in the fisheries, which probably makes them a player, too. I am sure they are wondering what they are getting for their investment, and how many jobs are being created. This is part of this reorientation that is emerging. I think it is an important way to think about the fisheries, not just in terms of the DFO but in terms of the overall economic picture and the whole federal government, including the HRDC and revenue and so forth.
The Chairman: Thank you very much, Mr. Bull. We are going to wrap this up. On behalf of the committee, I wish to thank you for taking the time out of a very busy schedule to appear before us and to give us your knowledge, your experience and expertise on this very important subject.
Maybe there is a lot to be learned from your group. The actions of government sometimes affect in ways that are not thought of. Maybe the government should look at an ecosystem approach to government.
With that in mind, thank you very much, Mr. Bull. All the best to you and your group.
Mr. Bull: Thank you, Mr. Chairman. Thank you for this opportunity. I will be sending out a written brief.
The committee adjourned.