Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue 3 - Evidence, February 17, 2005
OTTAWA, Thursday, February 17, 2005
The Standing Senate Committee on Fisheries and Oceans met this day at 10:53 a.m. to examine and report on issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans.
Senator Gerald J. Comeau (Chairman) in the chair.
[Translation]
The Chairman: We are continuing today to examine and report on issues relating to the federal government's new and evolving policy framework for managing Canada's fisheries and oceans. We are fortunate today to welcome Dr. Parzival Copes, Emeritus Professor of Economics at Simon Fraser University.
Dr. Copes is a nationally and internationally recognized authority on fisheries economics and management and fisheries policies. Dr. Copes has very extensive experience as a consultant and as an adviser to government agencies, international organizations, non-governmental agencies, corporations and legal offices in Canada and numerous countries in North and South America, Europe, Asia and Oceania. He has written extensively on fisheries and has been a frequent media commentator on radio, television and in the print media, and an invited speaker as well.
Welcome, Professor Copes. We look forward to your presentation and to a most interesting morning.
Mr. Parzival Copes, Emeritus Professor of Economics, Simon Fraser University Institute of Fisheries Analysis and Centre for Coastal Studies: I am very pleased to have been invited to speak to you, and it is on a favourite subject of mine: the fishery. In fact, it is the one subject that I always seem to be talking about.
I have been a critic of what has become a favourite method of fisheries management: using individual transferable quotas. From the start, when they were first proposed, I said, ``Wait a moment; there are some downsides to using individual transferable quotas.'' Thus, I have been a critic of the use of individual transferable quotas. It is not that I consider that there are no circumstances in which they should be used, but there is, I think, a considerable downside to the use of individual transferable quotas in many instances. That is the message that I had been broadcasting. If you are considering the use of individual transferable quotas, look at it carefully to see whether this is indeed the system you want to use in any particular circumstance, as there are downsides to the use of individual transferable quotas.
We should first look at the fact that, with regard to fisheries, we are dealing with the application of policies to an important industry in the country. There are three essential components of fisheries policy, which you see on the screen there: the sustainability issues through biological conservation; the question of profitability and the economic question of efficiency; and the social question of equity, of fairness. There are biological, economic and social consequences that we must take into account when considering the use of individual transferable quotas.
I have been a bit of a skeptic of the use of individual transferable quotas because there are many things that can go wrong in their application. My message has been to look carefully at what the downside is to the use of ITQs before you apply them.
We can systematize the analysis of what can go wrong with ITQs. Let me show on the screen here the categories of problems that we can encounter in the use of individual transferable quotas.
The downside rests on two major considerations. One is the consideration of management requirements. If you look at the management requirements of fisheries, what can go wrong if you are using ITQs? The first set of problems lies in the relative inflexibility of total allowable catches, or TACs. If you apply an individual transferable quota system, you are in advance allocating to various participants in the fishery a fixed amount of fish that they can take.
That means you lose some flexibility in managing your fisheries. For stock conditions in a fishery, it is important, during the fishing season, to determine the initial estimates of numbers of fish available for taking without consequences. You might find halfway through the season that the fish stocks are not as strong as originally thought. If that happens with an Individual Transfer Quota system, wherein you advise in advance the participant in the fishery of the allowable catch, you might find that the catch was taken early in the season, the fish may be gone and so you have overfishing. Thus, you lose some flexibility by using an ITQ system that advises in advance of the season. Once the promise has been made, you are stuck with it. That is the relative inflexibility of the total allowable catches that you set in an ITQ system.
Second, we have the near-irreversible system commitments. If you are going to work with an ITQ system and tell all participants in the fishery at the beginning of season what the allowable catch is, then flexibility has been lost if the fish have been given away beforehand. Individual Transferable Quotas are specified by species such that the allowable catch specifies the number of cod or haddock or other. However, the fish caught in your net may not be in the proportion of the stated quota, creating a bycatch problem. How do you handle the bycatch problem? You can say that it has to be thrown back but, of course, most of that fish would die and that is a wasteful system.
There is a problem of bycatch dumping when you are administering an ITQ system because so much quota of various species is given. The only way to constrain it is to say that the bycatch has to be thrown back. If the fisher is allowed to keep the bycatch of another species for which he has no quota, then that bycatch will be targeted and the entire management system cannot be maintained. Everyone will be targeting bycatch because it can be kept. Then the numbers involved in the bycatch become large. The fact of a quota system is that you can never give out the quotas in the proportions in which fishermen are actually catching fish. There will always be a bycatch problem when you are dealing with an ITQ system.
Now is another set of problems with an ITQ system: induced behaviour. How will fishermen behave when they fish with an individual transferable quota system? If there is a desirable species for which they have a quota but they are fishing in an area where there is not much control over the fishing and there is a valuable species, the fishermen will hide it and dispose of it as they can. That is what we call ``quota busting.'' They are taking more than the stated quota. Depending on the nature of the fishery, it is easier or more difficult to get away with that.
Then there is the question of high-grading. If you are fishing a species for which you have a quota and you get a much higher price for a certain size of that species, then you will be inclined to throw back the size that nets the lower return. When fishermen come into dock, the fish of the quota species are weighed and so they want to have only the size that nets the highest price per pound, so they high-grade — they throw away the fish that does not get the highest price per pound.
Then there is the matter price dumping, which can be enormously costly in some fisheries. You read of instances in various fisheries where someone comes across a whole load of fish that had been dumped by a fisherman. It may be that the fisherman found out after he had fished an area and before he returned to dock that the price of the landing price that he will receive that day will be low because of a surplus. Will that fisherman give up some of his quota to fish that will net only one-third the expected price? No, so that fish is thrown overboard. The price-dumping problem comes into play when you try to administer through quotas.
Next we have the ratcheting of quotas. Fishermen are good at persuading the politicians to get the department to give them a bit more quota. There will always be a politician who will listen to the fishermen in their constituency. The fishermen tell the politician that there is much more cod out there than the managers thought so we should get a larger quota. They put pressure on the politicians to ratchet up the size of the quotas that they receive. Very often it means that overfishing of various species then occurs.
There is also the matter of discount driven stock depletion. Fishermen would prefer to have an allocation of so many tonnes of fish this year than the promise of a larger quota next year. The old adage ``a bird in the hand is worth three birds in the bush'' applies to fish such that a larger quota this year is worth a great deal more than the promise of a larger quota next year, if the fish will be there. There is always this pressure to give away more fish now than is truly warranted.
There is also the problem of data fouling. There are many fishermen who, if they can get away with it, will land some extra fish that no one knows about and they report only the amount that they are allowed to catch. It means that the fisheries managers have an idea of reported catches that is much too low. That means that the data they are using to estimate the strength of the stocks is skewed and gives them the wrong impression of the actual reduction in the stock if much of it is not being reported.
These are many of the problems that you can encounter in a system that is based on quotas that are given away. The system does not work as well as it might work theoretically on paper.
I think I have gone through the main reasons for being somewhat sceptical about the administration through individual transferable quota systems.
The Chairman: Go to questions, sir?
Mr. Copes: I am open to questions.
The Chairman: We will start off with Senator Phalen.
Senator Phalen: In your presentation, I did not hear you mention individual quotas or community quotas. Do you have any feelings in respect of both of those quotas or do you lump them all as quotas?
Mr. Copes: If you are dealing with individual quotas, there can be a greater difficulty in terms of the attempt to get away with taking fish that you do not report. It is difficult to keep track of thousands of individual quotas, rather than looking at the total volume of fish that are going through a port or something like that.
If you are dealing with community quotas, you get a rougher estimate of how much fish is being used but you have fewer opportunities for individuals to try to hide the amount of fish that they are individually taking. It is a much bigger job of trying to keep tabs on all of the individuals who are taking fish rather than getting a rough estimate, not perhaps one that is entirely correct, but a rough estimate of how much fish is going to report.
Senator Phalen: In the Atlantic region there are concerns about trust agreements. Have you any comments to make on that?
Mr. Copes: Offhand, no. I would have to look at that carefully before I would comment on that.
Senator Phalen: In your opinion, are there fishing fleets in the east coast that are still too large for the available resources?
Mr. Copes: I have not studied that in recent times. In the past I have, and certainly we had considerable excess capacity. I suspect that the capacity may still be a bit too large but I have no good estimate of where that stands at the moment.
Senator St. Germain: Thank you, Mr. Copes. Listening carefully to your presentation, professor, how can you legislate or regulate integrity? Have you got any suggestions? You point out some of the pitfalls that exist under any type of system. You have high grading, quota busting, by catch dumping. These people are going to cheat the system and we have got a reduction of enforcement people in the field. Our courts just bring them in the front door and let them out the back. There are really no penalties. They do not seize boats the way they should. Have you got any suggestion?
Mr. Copes: It is a difficult one. If you have a highly individualized system of access entitlements, there are many individuals that you have to check on to see how much they are taking. That is a rather difficult task. If you have a system where we say, ``We are not going to check on individuals. We just want to ensure that the total amount of fish that is being taken is not too large.'' It is going to be a little bit more difficult to get an accurate estimate of how much fish is being caught. If you do not look at individuals and say, ``I do not want you cheating and landing fish where we do not know that it is being landed,'' you are doing a cruder system of looking at how much fish is going through various channels. You say, ``I think the drain on the stocks is too large,'' and you close the fishery. It is a cruder system because you are not trying to measure every amount of fish that is taken by every fisherman, but you do not give as much opportunity either for individual fishermen to hide how much they are catching. You are getting a cruder estimate of how much is going through the ports but perhaps it is a better estimate in the long run because no one is trying to hide it. There is the choice that you may have to make of are we going to try to individualize the amount of catches that you are allowed to take, or are we going to do a cruder system of seeing how much is going through ports and saying, ``We are going to close the fishery because enough has been taken for this year.''
It is a difficult call, which one is going to give you the best results, because the chances that you get wrong estimates are there in the two systems, an individualized system or one where you just look at what is going through the ports in terms of the amount of fish. You would have to look carefully at which will give you the better results in particular cases.
Senator St. Germain: I would like to ask you a question about the West Coast fishery. I would like your opinion. As the threat on the salmon runs in British Columbia becomes more of a reality, there is some that say that we should suspend the commercial fishery and keep the salmon for a sports fishery because the bang for the buck, so to speak, is much greater in the sports fishery.
Have you a view on that, sir?
Mr. Copes: That is a difficult one. In general, I have the impression that there is room for both. There is the question of how easy it is to manage the fisheries and get an accurate estimate of how much fish is being taken, and of controlling the amount of fish that is being taken, depending on how much is going through the sport fishery, how much is going through the commercial fishery. In the final analysis, I suppose you can get better controls on the commercial fishery because you can check on the channels easier than when you are dealing with individuals all over the place who are taking fish.
There is also the question of what do the people of this country want in terms of the utilization of their fish stocks. Do we want to have greater opportunities for individuals in sport fisheries? Do we want to have a healthier commercial fishery? In the final analysis that is a political call, to what extent we will allocate fish to the sport fishery versus the commercial fishery. I do not have a strong opinion on that.
Senator St. Germain: You say it is a political call, but really it is a call as to which method most endangers the species, I would say. I happen to hunt quite a bit and we police ourselves in the hunting field. If somebody violates something, I can tell you where I hunt annually in the Rockies, we just would not allow it. You would not allow anyone to shoot before the season is open without considering reporting it.
Is there any self-policing within the fisheries industry that you have come across, or could we develop a system that self-policing would become more of a fact of life in the fisheries? As you know, with technology being as it is, the speed of boats, everything has improved so dramatically that really if they do not police themselves, it is next to impossible. It is like the sport hunting situation. If we as hunters did not assist in the policing in the enforcement of the game laws, they would wipe out the elk and the moose population, and anything else.
Have you ever looked at the enforcement aspect from a self-policing point of view by the industry itself or is it such a rabble that it is non-existent?
Mr. Copes: That is an important and interesting question and I do not have an answer ready because I have not spent much time thinking about that, but that is something that is worth researching.
Senator Hubley: Thank you, and welcome this morning professor Copes. I feel that we cannot discuss the fishery without looking at the coastal communities that Canada has on both sides and in the North, and if there is a change in the fishery, how that is going to impact on those communities. My question would be a little along the line of the community quotas. You have discussed that, but economic viability in fisheries appears to mean different things to different people. For some, the economic viability of fishing enterprises is paramount, others are more concerned about the viability of coastal communities and are supportive of community based fisheries management that is rooted in the idea that fishers and other residents of coastal communities who live closest to the resource should have a large degree of responsibility for and control over its management.
I am wondering, in your experience, if you could comment on other fishing industries in Iceland, Scotland, New Zealand or Norway, and how does that compare to Canada's Atlantic fishing industry? Are there similarities or differences? Do they practice co-management?
Mr. Copes: I think those are very valid and interesting questions. To be honest, I do not have an answer ready. I have studied fisheries in many countries and I think that maybe we can distil some answers from that, but I have not done so and so I cannot give you an answer now. It is worth some research to get answers to those questions.
Senator Hubley: We have an Aboriginal community in Canada, as does New Zealand. We would be particularly interested in knowing how the ITQs or the IQ system has worked there because we have a concern that whatever system we have in Canada has to address the needs of our aboriginal community.
Mr. Copes: I think a lot more work needs to be done on looking at quota systems, not just as individual quotas, but as community quotas, and looking at the means we have of getting a quota systems to work that are cost efficient. Much work is needed before we have answers there.
Senator Adams: Thank you, professor. I am living mostly in a community on the coast in the Arctic. You are from British Columbia. Have you studied the Aboriginal salmon fishing before you had the hatchery. Have you studied the difference between individual fishermen of the Aboriginal? Have you studied the difference between the allowable community quota use and the commercial quota use as recognized by DFO?
Mr. Copes: Those are interesting questions, but I do not have answers ready on that. Certainly, I think it is worth some research to get answers to those questions. I have not had the opportunity to work on that.
Senator Adams: In the mean time, since we settled a land claim, the Minister of Fisheries at the DFO give us a couple of areas, 10A and 10B, and according to him, it is called Nunavut quotas. In the last four or five years, three or four communities have accepted to have a quota in the community at one time. Now that policy has changed. Another company from Europe is taking most of the quota. There should be some kind of change in the policy. Since we have settled a land claim, we should be able to control the quota for our community.
Mr. Copes: That is certainly worth investigating to come up with a reasonable policy. It should be directed at the nature of the problem in different parts of this country. In the north, in the area where you are concerned, circumstances may very well demand a different kind of system than what you have the other parts of the country. It is certainly worthwhile looking at regulations that are specific to the conditions in different parts of the country.
Senator Adams: One more question. It is mostly big corporations. Some of the companies are looking for cheap labourers. We live in the Arctic, we cannot compete with other companies. We have been up there thousands of years, we know where to go. We live of both the land and the water. The people have to depend on seals, whales and caribou. Now, the government says that you have to learn how to get into a ship. We have been in the sea. We have been in the ships. With the policy right now, the government says that you have to learn how to be a fisherman. The people have been catching fish all their lives and hunting. We are not farmers, so anything that we do not have to go to catch should be in the policy. It should recognize what is in our culture as compared to the commercial aspect.
Mr. Copes: I certainly think that policies should be specific to the culture and the circumstances of different parts of the country that are in fact quite different in terms of what their needs are.
I am certainly very sympathetic to looking at culture-specific regulations that need to be considered, particularly for parts of the country in the Far North where you have very different circumstances from what you would have in the east coast and west coast of the country.
The Chairman: Thank you very much. We now go on to Senator Watts from Northern Quebec.
Senator Watt: Thank you, professor, welcome. I will try and cover two areas. One is, under the present system, the way the activity takes place in the ocean. Then I will go back to the concept of the old ways, what happens.
We do know that there are inspectors on board on those trawlers. Over time, we have heard that they are not really up to their responsibilities in terms of not reporting sufficiently what is being caught. That we know for quite a number of years. I have been personally involved, having trawlers out there doing the fishing and having our own inspectors on board. Those are normally the inspectors that are put on by Fisheries and Oceans.
What I am hearing from you is that they are not doing their jobs. We have heard over time that they are not doing their job, that basically they bought out people. In other words, they are not reporting what they should be reporting in terms of what is being caught and what is being dumped in the ocean.
The fact that you highlighted a number of scenarios, the problems that you see, fits quite well with the knowledge that I have developed over the years, participating in the international fishing activities.
What do you think we need to do as a committee if we are going to come up with tangible recommendations to the Department of Fisheries and Oceans, empowering those people more so they can actually do their jobs? Do you have any ideas how that could be dealt with by way of legislation or any other means? That is my first question.
My next question is that there seems to be competition between the old ways and the new ways. What I mean by that is that Fisheries and Oceans are attempting to privatize their responsibilities. That is a fact that you have highlighted, and I think you are questioning that aspect of it also.
Should we make recommendations as a committee, that there is very little fish out in the ocean and the ocean is in trouble, that we should try our best — I know that we cannot turn the clock back, but at least make an attempt to turn the clock back — and say that certain activities that take place in the ocean are no longer acceptable? In other words, the new methods of technology that are used today are so great that they could empty the ocean out in no time flat. That is the direction that we have been going over the years.
Should the government take on these responsibilities, rather than privatizing it, and say enough is enough, this is what we need to do now, focussing on the community, the coastal people? As Senator Hubley was saying earlier on, there is a concern about the livelihood of those coastal people, including the Aboriginal people. These things affect our economy; this is our day-to-day life. We are impacted pretty heavily.
If Fisheries and Oceans goes ahead, those communities will no longer exist. At the same time, I do not see government trying to look for alternatives so those people can make ends meet.
I leave it there and see how you will respond.
Mr. Copes: I am certainly very sympathetic to the questions you raised. In a country that has such diverse circumstances, a country of enormous size such as Canada, which has remote areas with circumstances quite different from those in other parts of the country, we need to have regulations that are specific to the different circumstances in the country. Certainly, in the northern areas that you are concerned about, in many instances we need to have regulations that are specific to the circumstances there.
It will not be easy to do because it means a lot of extra work in looking at remote areas with very difficult circumstances. That probably would require an entirely different approach to management, but it needs to be done.
Senator Watt: Thank you. We will have a second round.
The Chairman: Yes. We will go on to Senator Johnson from Manitoba.
Senator Johnson: Welcome, professor. In your opinion, do property rights-based fisheries — for example private quotas, ITQs — encourage stewardship of the resource?
Mr. Copes: They may. They could also do the opposite. If people are left to look after a fishery by themselves without much control, apart from the controls that they apply themselves, it depends on the attitudes toward stewardship of those particular groups, whether they are healthy or not. Are these people who want to get rich quick and might, in fact, destroy the stocks, or are they very responsible people?
One has to look very carefully at the specifics to say, yes, we need a different regime in this particular area, and we can leave it to the local stewards to come up with the right answers for their circumstances; or whether that is not the case, and there is not a level of responsibility there that would result in a healthy attitude toward fisheries management. The circumstances might be quite different in different parts of the country.
Senator Johnson: Have property rights-based fisheries resulted in more sustainable fisheries in New Zealand and Iceland? Are the fisheries' management systems in these countries successful from a conservation standpoint? As you know, Iceland has the longest history of individual quota management in the world.
Mr. Copes: I know that in countries like Iceland, there are experiments with particular approaches to management. I do not have a definitive view on how successful they have been. I have heard about it, and I have been to Iceland and to several other countries that have their own specific approaches. In some instances, I have some skepticism, but I am open to persuasion.
I have not studied enough of them closely enough that I can give you some very definitive answers.
Senator Johnson: One more question, professor. What are the most serious shortcomings of IQs and ITQs? Do they bring new and different problems? Can you comment on that?
Mr. Copes: The shortcomings might be twofold. One is that it may give advantages to some groups that have been given privileged access, which may be unfair. Whether it is good for the management of the fisheries concerned is a question that depends on the level of responsibility of the people who are doing the administering there. It could either mean very good management, if they have a long-term, community-based perspective or bad management, if they have a get rich quick perspective. So you can have very good results or very poor results from leaving it to local authorities to say, you will look after your own fisheries. You can get both results — very good and very bad ones. I would be very careful before I give the authority away to see what the likely results would be in terms of the attitude of the people concerned. To a large extent it would depend on how responsible they are for their wider community, rather than just for the personal interest.
Senator Johnson: Could I just conclude. When were you in Newfoundland, at Memorial University?
Mr. Copes: I was there from late 1950s, early 1960s.
Senator Johnson: Can you tell us what you saw there? Did you see the cod situation then or it was not as bad?
Mr. Copes: At that time, fisheries development needed a lot of work still, much more work has been done and progress has been made. At that time, a lot needed to be done still.
The Chairman: Thank you very much, Senator Johnson. I should note in passing that in 1994, you did get a honourary doctorate from Memorial University.
Mr. Copes: Yes. It was a bit more recent than that.
The Chairman: Yes, 2004. I am mixing my dates now. Senator Merchant is a fairly new member to the committee and we welcome her to this meeting.
Senator Merchant: Thank you very much, professor and thank you very much, Mr. Chairman.
Professor, the Fisheries Act gives the minister very broad discretionary powers to distribute wealth in the form of fishing licences and fish quotas. Section 7 of the Fisheries Act authorizes the minister to issue fishing licences at his or her absolute discretion. The 2004 policy framework for Atlantic fisheries mentions the need to possibly amend the Fisheries Act. The department often uses the word ``modernization'' in connection with the Fisheries Act. According to the policy framework, the department suggests that fishing fleets could propose self-adjustment mechanisms such as the issuance of licences and quotas through fleet planning boards.
Does the Fisheries Act have major shortcomings in your opinion and can you elaborate?
Mr. Copes: I have not got a quick answer, I am sorry. I would have to look at that more carefully.
Senator Merchant: Would you prefer not having the Minister of Fisheries and Oceans wield absolute discretion in matters of licensing and fish quotas? Should DFO remove itself from having to make decisions on fish allocations?
Mr. Copes: Again, I do not have a ready answer for that. I would have to look at the circumstances to see how it is working at the present time and the shortcomings in terms of the administration of fisheries authority to see what might need to be done to improve it. I have not got a ready answer.
Senator Merchant: In your knowledge of the management of the fisheries in New Zealand, do you know if there was social consensus before ITQs were introduced there?
Mr. Copes: I doubt that there was a full social consensus. I do not have a good enough knowledge of how broad a consensus there might have been that would warrant the introduction of the system that they have. Undoubtedly, there were some people very much in favour of it, but that might be because they were going to be favoured by the system.
Senator Merchant: Finally, I will ask you one more question about New Zealand and perhaps you can answer it.
What were the community or social consequences of introducing ITQs there?
Mr. Copes: I have not studied that carefully. I do not think I can give you a good answer without some further study.
I have visited New Zealand a number of times but I have not done a specific study on how well the system has worked out there. It would be rash for me to comment on it now.
Senator Merchant: It would be useful to our committee to compare some of the other systems in New Zealand or in Great Britain or in Iceland.
Mr. Copes: That is a study that is worth doing. I have not done it, so I would not want to give you an opinion off the top of my head.
The Chairman: I have a couple of questions before we go on to the second round, doctor.
To follow up on that very question, New Zealand and Iceland have been promoted by DFO officials here in Canada as being almost a panacea, the ultimate management tool that would solve all the problems of the deficit and so on.
I may be exaggerating somewhat there, but it has been passed off as a panacea. Are you aware whether any serious, objective studies have been done by any researchers of these great benefits and downsides of the upsides and downsides of the New Zealand and Iceland fisheries?
Mr. Copes: That is an interesting question and it just so happens that I have a cartoon from an Icelandic newspaper. I think I have it here. I would like to show that to you to give you an indication of the commentaries that have come about. That is the ``House of ITQs'' in Iceland as commented upon by the cartoonist of the major newspaper of Iceland. That is how he looks at the ``House of ITQs.''
The Chairman: Very interesting. That may be one of the studies that we may want to look at.
Mr. Copes: It is from Morgunbladid which is the main newspaper of Iceland.
The Chairman: A picture is worth a thousand words. In my spare time, I try to read newspapers from outside of Canada. This is from The New Zealand Herald dated February 17. It is today's newspaper in New Zealand.
I will quote from Fishing Industry Guild South Island Administrative Officer, Louis Hart. I will not go through the whole newspaper. I will just make one quote here. ``I think we can safely say that in New Zealand, domestic fishing fleet is in the freefall.''
It may be worth pursuing what he meant. He goes on to say in the second line. ``The so-called restructuring of our industry seems to be simply code for laying off New Zealand workers in order to increase margins.''
Again, this might point to the great need to look at what the experience was in that jurisdiction which saw it as a panacea and whether these kinds of comments are indicative of the results of this classical economic application.
Mr. Copes: Yes, I have come across some disturbing news from New Zealand also, with critiques of what the system has wrought there. I have not got enough details at my finger tips that I can give you a good assessment of where it stands now.
The Chairman: We might be able to encourage you to have this as one of your future studies.
Senator St. Germain brought up the BC experience. As you are aware, there was a recently released report called ``Treaties in Transition'' produced by Dr. Pearse and Professor McRae, the Pearse-McRae report. One of the recommendations was that salmon should be placed under an ITQ system.
As recent as five, six or seven years ago even DFO was saying that it was not possible to place salmon under an ITQ program. They listed the reasons being that fish went together and that if you direct for chum you might catch something else. Therefore, it was impractical, as well as considering the fact of the migratory patterns.
This idea of including salmon under an ITQ program, does that make any sense whatsoever?
Mr. Copes: It has never made any sense to me. Even the great protagonists of ITQs for a long time said: ``No, you cannot really do it with salmon.'' They are so keen on one size fits all with the ITQ system being the system that they are trying very hard to find a way to force the ITQ system on to salmon as well. I think it would be probably disastrous, but certainly very unfortunate.
The Chairman: Maybe they sensed that the salmon have now changed their swimming patterns and that they do not swim together any more and so you can direct for what kind of fish and they will all conveniently set aside so that somebody who has a Chinook salmon allocation would only catch Chinook salmon and so on. That is one of the things we will have to look at.
Given your vast experiences, and it is acknowledged by almost everybody that you have spent most of your life looking at management of fisheries and the impact of decisions on fisheries, did this task force seek your views on the report that they ultimately issued?
Mr. Copes: No.
The Chairman: You are one of the foremost, and it is recognized by most industry people, that you are one of the foremost experts on this subject. They did not seek your views.
Mr. Copes: No, but I am a critic also of a lot of things that have been put forward by others, so, they are disinclined to ask my opinion.
The Chairman: It was Marshall McLuhan who said that the medium is the message. I wonder what the message would have been if DFO has chosen Parzival Copes to do a Copes report and whether the report might have been viewed as being different.
Mr. Copes: Undoubtedly, this is very much so, yes.
The Chairman: The comment that I got from a number of people was the very fact that it was Dr. Pearse and this is not to reflect in any way ill on Dr. Pearse. Dr. Pearse as well is an acknowledged expert on issues and he has his views and ideas. A lot of the opinions that were expressed back then were it was a foregone conclusion how the conclusions were arrived. Therefore, the medium became the message in this case, that DFO had chosen a medium to get its message across that this is where they were going.
Mr. Copes: Yes, undoubtedly.
The Chairman: A question was asked of you earlier on whether you were aware of any economic and social studies that were done in New Zealand and/or Iceland prior to implementation of the privatization scheme. Were you aware that they had evaluated what might be the impact?
Mr. Copes: I am not aware of any official studies. Undoubtedly, there were private individuals with quite different opinions and some of them have consulted with me that did not like the approach that was being taken by the government.
The government did not look at a number of alternatives. They selected the alternative they liked and had studies done to bolster that particular approach.
The Chairman: This is what is being done in some quarters in Canada right now. Some people are suggesting that this is in fact happening in Canada. There is no objective through analysis of the impact of the direction that we are going and that we are doing it the same way.
Mr. Copes: We are not looking at the alternatives.
The Chairman: A few last questions. Are you aware that the DFO officials from Canada have gone to foreign jurisdictions and actively promoted the benefits of ITQ programs in spite of some of the down sides that you yourself have laid out for us today and whether these DFO officials who we know have been promoting this in foreign jurisdictions are doing it in underdeveloped countries or should we seek to find out if this is happening?
Mr. Copes: I am not aware that they have been working in underdeveloped countries to try to promote the same system there. I would think that it would be rather difficult to apply in developing countries. There are people who think so highly of their own system that they would like to see it applied everywhere, I suppose.
The Chairman: You would be surprised. If you tried to apply it to salmon, you may try it at everything. They may be looking at eels and guppies right now.
The DFO has viewed the allocation of fish as being a contract between itself, the Crown and the licence holder. This is the only two parties to a contract when allocations of fish are done.
Would you agree with the premise that some have advised that in fact there is a third party involved in the contract in that the communities that have invested in infrastructure, ice plants, fish plants, hospitals, schools and so on, built around the community that was dependent on the fishery, and that these people, when a decision is made on their future as to whether the fish will be given away, as to whether these people might not also have a contract or a stake in the contract?
Mr. Copes: I would certainly support the view that they ought to have a say in the matter.
The Chairman: At the present time DFO does not view this as being relevant and they are not part of it.
Mr. Copes: Apparently, yes.
The Chairman: One of the final series of questions. Are you aware if there have been any studies conducted on the issue of concentration of these licences because the very word ITQ transferable, means that there can be, and we have seen evidence that there is, a concentration of the stocks in fewer and fewer hands?
Mr. Copes: Undoubtedly, that is one of the purposes of the ITQ to facilitate that.
The Chairman: Are you aware if we progress, because there is a continuum to this from a common property resource, to a property based resource? Along the continuum somewhere this becomes private property. When the licence does become private property and/or the fish, then the issue becomes one of provincial responsibility rather than federal because provincial is private property is provincial.
Mr. Copes: That is an interesting question. I have not given that much thought, but that is worth thinking about.
The Chairman: One final question. You mentioned in your opening down sides to the fishery that data fouling means that they are not reporting the catches. Some of it is being dumped. Some of it is being not reported, and those right numbers need to get into the hands of the scientists and managers in order to assess what has been taken out of the bio mass. There is a bio mass of a certain species out there and if the fishermen come in and say we have caught X number of pounds or tons, but they do not report that there has been dumping or high grading or misreporting, then that means that the scientists themselves do not have the right number. They are basing their next years TAC based on the wrong number. I am leading up to a point on this if indeed this is happening.
Would there not been an encouragement to deliberately not include a percentage in the mix if DFO is aware that dumping is occurring because it would be embarrassing for DFO to admit that there is dumping?
Mr. Copes: That is quite possible and I have been concerned about it. The term ``data fouling'' is one that I introduced to the literature because it was my concern that that phenomenon existed and was being ignored. I have added a number of terms to the literature on the basis of my perspective of what was being ignored in terms of the reality of the fishery.
Senator Hubley: The IQ and the ITQ systems have been described to us as a purely economic approach to the fisheries. Certainly, you have demonstrated that very clearly in the negative impacts they have on fishing productivity and the conservation of fish stock. That raise the issue of policing, monitoring and surveillance. Within the fishery industry, I would think that would be an important component if, in fact, this system of quotations and using the fishery were implemented.
Have you seen other jurisdictions that have tied the cost of ensuring stewardship of the resource in the cost of the ITQs? Do you foresee that we would have to have a much more enhanced surveillance system in Canada if we were to go to the IQ or the ITQ system?
Mr. Copes: I would think so, yes. There are so many problems with the ITQs and we are not in the position to measure the depth of those problems. The ITQ is running away with its own particular approach to fisheries, regardless of the down side. The proponents of the ITQ do not like to hear about the down side so it is being ignored.
Senator Hubley: Perhaps that is something that this committee will look at, particularly if we have to face the reality that some of our fishery will operate under the IQ and the ITQ system.
Mr. Copes: Yes, the problem is with us now.
Senator Hubley: Dr. Copes, where is this happening now? Is it on the West Coast? Is it with one particular species of fish?
Mr. Copes: Well, it seems to be happening more on the East Coast than on the West Coast; it depends on the fisheries. The salmon fishery is rather difficult to bring under ITQs, although they are trying to do that. It is difficult because you are dealing with specific runs and you have to wait to see how much fish comes through. It is much more difficult to apply the ITQ system to the salmon fishery where the stock is migratory and you do not know the stock strengths until they come back from the ocean grounds.
It has taken the proponents of ITQs a longer time to find a way to force the ITQ system on the salmon fishery, and we are still not there, than on the other fisheries.
The Chairman: Dr. Copes, it has been a delight to have you appear once again before the committee. The last time was in 1998 when we looked at the issue of privatization and quota licensing in Canada's fisheries. You were extremely valuable then, offering a great contribution to our study. You have been most helpful again today. We want to encourage a public debate on this important issue. It is the view of the committee that such initiatives and public policies should be done with an opportunity for the public to provide its views. You have given us a good start to that public debate.
Mr. Copes: It has been a pleasure. I am pleased to have had the opportunity to talk to senators.
The committee adjourned.