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* Senator Gerald Comeau spoke at the Annual General Big Event of the Coastal
Communities Network on October 6th/1997. His topics included the proposed Fisheries
Act, changes within the DFO, how ITQ's threaten the fishery and support for
community based co-management. What follows is a transcript of that speech.
Thank you for the invitation . . .Fisheries issues, to me, are both important and intensely interesting. This is why I have chosen, both when I was in the House of Commons and now in the Senate, to serve on the fisheries committees. Fishing deals with subjects of most interest to all parliamentarians; it affects people, employment, environment, sovereignty, natural resources, economy. Yet, not enough people seem to appreciate the importance and dynamics of fishing.What is even more troubling is the misconceptions which are increasingly prevalent in Canadian society regarding the direction which fisheries managers and government are guiding the industry. I would like to touch on some of these issues. Needless to say, I am not speaking here on behalf of the fisheries committees nor on behalf of the caucus to which I belong. RestructuringCanada's fishing industry is undergoing profound and unprecedented re-structuring on both coasts. The objective is a 50% reduction in harvesting capacity in the pacific salmon fishery, and a similar reduction in the Atlantic groundfish sector. As well, the federal department of fisheries and oceans itself is being significantly transformed. Core services are being redefined. Programs are now said to be more "demand-driven" and "client-focused." new directions in federal policy include, among other things, sharing the cost of managing the fishery resource with those who benefit from it, instituting individual fishing quotas where feasible, and negotiating co-management arrangements with industry stakeholders. Proposed Amendments to the Fisheries ActFirst, I should like to touch briefly on the proposed amendments to the fisheries act. In the past, the common law relating to fisheries (dating back to the Magna Carta in the year 1215) and developments in the interpretation of Canada's constitution established two important principles. First, there is a so-called "public right to fish" in tidal waters. The principle here is that the right to fish belongs to the public and not the crown. Second, so-called "exclusive fisheries" in tidal waters can only be created by the enactment of competent legislation passed by parliament. These principles became an important aspect in the debate over proposed amendments to the fisheries act earlier this year. Critics of bill C-62 maintained that sections 17 to 22 were intended to abrogate the centuries-old common law "public right to fish." if the legislation had been enacted, the federal minister of fisheries would have been given, by means of legally-binding partnership agreements, broad authority to grant private or exclusive rights to the resource. This would have represented a fundamental change in the way we manage fisheries in Canada. Bill C-62 was debated at second reading in the commons last year, but died on the order paper. Similar legislation may be re-introduced. You may want to keep an eye on this. I certainly will.
Property Rights-Based FisheriesThere is also the matter of giving fishing operations some form of private ownership of fish stocks. Certain organizations such as the Fraser Institute and the Atlantic Institute for market studies (aims) have promoted "individual quota licences" -- also known as IQ's, ITQ's and EA's -- as the best means to reduce harvesting capacity at the least cost to taxpayers. Individual quota licensing also has a great deal of support in the corporate sector of the fishing industry, and within the federal fisheries bureaucracy itself. It is a well-articulated model because of it's popularity among neo-classical economists. Attention of the central Canadian media and wide circulation newspapers have jumped on the bandwagon: mostly favorable to the "privatization" propaganda. The Globe & Mail on August 2nd sums up the central problem of the fishery as being the common property nature of the resource. This official and academic support has attracted the effrey Simpson, one of the most widely read pace-setters reported in the July 4/1997 edition of the globe that "the best alternative to past failures is to abandon the common-property principle in favour of individually held and transferable property rights". Even the Ottawa Citizen had some feature articles promoting the privatization of the fishery. Suddenly, it has become fashionable to privatize. The rhetoric reached an all time low when two economists at DFO in Halifax Leslie Burke and Leo Brander published a paper in the Atlantic institute for Market Studies. The title of the article was "Behind The Cod Curtain". It compared our Atlantic competitive fishery to the dying days of the U.S.S.R. communist regime. It offered simplistic, one sided arguments in favour of privatization of our public resource. I don't recommend it for those of you who have high blood pressure. Quota licences provide fishermen or enterprises with what has been described by fisheries and oceans as a "quasi-property right" to harvest annually a certain pre-determined quantity of fish -a sort of swimming inventory. Quota licences "privatize," at least to some extent, the traditional "common property" competitive fishery. In Canada, they represent a major departure from the traditional way of seeing the resource as a common good. On the Atlantic coast, quota licences in the form of enterprise allocations or EA's were introduced in the Canadian offshore groundfish fleet in the early 1980's. They gradually became a fact of life in the herring seine fleet, the offshore lobster, scallop, clam and northern shrimp fisheries, the snow crab fishery and in segments of the inshore and midshore groundfish sector. As well, individual quotas have been introduced in certain pacific fisheries (e.g., for abalone, herring, geoduck (gooyduck), sablefish and halibut), and in freshwater (inland) fisheries. Advocates of privatization point to the many advantages associated with property rights-based fisheries. The so-called "mad race to the fish" is supposedly eliminated, access to the resource is said to be secured, fishing seasons are extended, and the potential exists for more effective long-term planning in terms of capital investments and market development. Generally speaking, management responsibility under a property rights-based regime is shifted downward from government to those holding the fishing rights. As such, the system is seen as a means of deregulation. When individual quotas are made "transferable" -- meaning when they can be voluntarily sold (or traded) to others - they become a means to "rationalize" a fishery. Individual transferable quotas (or ITQs) reduce the number of fishermen (or companies) as, over time, some choose to sell their quotas. These transfers inevitably lead to a concentration of licences in the hands of fewer and fewer individuals (or companies) - those with sufficient financial resources to outbid smaller operators. This form of rationalization is the most important justification for individual quotas. Some say, it is their Raison d'&#Ecirctre. On this, a very legitimate concern is the potential such licences have for serious disruption of the local economies of small fishing communities if and when they are transferred across coastal areas - given that individual quotas belong to the licence-holders, not the communities. When one considers the considerable indirect economic multipliers of fishing, the scenario of fish quotas moving away to other locations could prove to be disastrous for small rural fishing communities. What is often not costed is the financial drain to the public treasury which must then step in to support a community which loses it's main industry. Perhaps one solution could be to restrict ITQ transfers to interests inside prescribed and narrowly-defined areas, such as "communities." Certain questions come to mind with boat quotas: There are many interesting (and rather perplexing) questions concerning quota licensing. For example:
Once established, governments may be more reluctant to reduce quota levels for reasons of conservation, given that a reduction would likely fail to meet the expectations of quota holders. The often quoted advantage of I.T.Q.'s is that the owner can spread the catch over the year, thereby fishing according to the price and market demands. This places pressure on DFO not to change the TAC once it is set because it would eliminate this advantage. In a similar vein, some wonder whether property rights-based fisheries, once in place, can revert back to their former state as common property, if need be (e.g., for reasons of conservation)?
A recent document published by the Canadian council of professional fish harvesters (creating new wealth from the sea, June 1996) states that there are "loopholes which encourage companies to buy up licences through under-the-table deals" and "policies which allow fishing licences to be owned and traded by non-fishers." What about foreign ownership.?
It is often suggested that people fish more responsibly when they "own" the resource - that when a renewable resource is common property, there is no incentive to preserve or conserve it. The assumption is that fishers will clearly see the benefits of harvesting for the long-term health of their fisheries. But is there evidence to support this claim? Is the incentive for "self-policing" really greater under ITQ management? Who would you rather have to safeguard the stocks? Community based competitive fishermen or an absentee investor who bases decision on the rate of return on investment? HighgradingIt is certainly no secret that a major drawback of individual quota licences is the incentive they offer to misreport and intentionally reject low-value fish for higher-valued fish. This destructive and wasteful practice, known as "highgrading," is perhaps the most damaging feature of individual quota management. Highgrading makes enforcement, monitoring and surveillance more problematic and costlier. Another result of highgrading is the "fouling" of catch data used in stock assessment, information on which resource management decisions are based. The extent to which highgrading (and dumping) have contributed to the disastrous collapse of Atlantic groundfish is still a matter of speculation. United StatesInterestingly, last October, the United States placed a moratorium on any new rights-based fisheries in that country. Legislation to re-authorize the magnuson fishery conservation and management act mandated a four-year delay in the approval of ITQ programs in us federal waters. The delay, in effect until the year 2000, is pending the results of a two-year study by the national academy of sciences and additional congressional action on guidelines for future ITQ plans. Community-based fisheries - as an alternative approach to property rights-based fisheries - is increasingly suggested to protect local employment, but it is a far less well defined model for the fishing industry. I would venture to suggest that the think tanks and media types would find it harder to define the model. They might really have to do some serious thinking and we can't have that. There is also the compelling argument that traditional (competitive) fishing is more compatible with the "free enterprise" system than ITQ fisheries. Indeed, competitive fishing rewards the efficient and penalizes the inefficient.
The Senate Committee's StudyOver the years, a common complaint within the industry is that DFO tends to make the big decisions unilaterally. Then it consults. In the last parliament, the senate fisheries committee, which I chaired, initiated a study on individual quota licences. The inquiry, prematurely interrupted by the federal election, was an unprecedented, and many believe, a much needed forum for public debate on the subject. Despite the study's brief duration, much interest was generated. The inquiry proposed, among other things, to assess the social, economic and biological effects of individual quotas. More specifically, the inquiry sought to examine the consequences on:
Quota licensing is gaining acceptance in many countries around the world, but not much is known about these other management regimes. Much of the information is scanty, diffuse or out of date. Lessons learned elsewhere could provide some valuable insights for Canadians. We also have experience right here in Canada, which should be carefully analyzed to compare the common and provide property models. Our proposal was to link, via satellite, with Iceland, new Zealand, the East and West coast of Canada, to identify the benefits and drawbacks of ITQ's regimes. The senate committee created a site on the world-wide web to better inform the public of its work and activities and to promote better objective and understanding of the issues under study. You are all invited to visit the site. A Lack of ConsensusCanada's experience with property rights-based fisheries has been mixed. No real consensus appears to exist on extending them. For example, the Canadian council of professional fish harvesters (CCPFH), an umbrella group representing the country's largest fishermen's organizations, supports the concepts of common property and competitive fishing. The council has stated the following (in a document entitled creating new wealth from the sea, published in march 1995),:"We believe the fishery is fundamentally a public resource, governed by public policies of limited entry. We feel fishing rights should be earned by historic participation, not bartered on bay street. Thus, the use of ITQ's and EA's should be carefully limited... [ we] find the ideological enthusiasm for this type of management device disquieting. When taken in conjunction with the proposal to eliminate fleet separation, a management device can become the vehicle to end hundreds of years of an owner/operator-based fishery." In contrast, the fisheries council of Canada (or F.C.C.), a trade association representing the interests of Atlantic and freshwater fish and seafood processors and exporters, has strongly promoted the idea of further "privatizing" the fishery and moving toward a system of "secure, tradable harvesting rights." In British Columbia, the 1991 Cruickshank Commission (a commission of inquiry into pacific fisheries licensing, initiated by a number of industry organizations) observed that "no other debate in the industry raises as much emotional or philosophical intensity." In its report of November 1993, the Cashin Task Force on incomes and adjustment in the Atlantic fishery concluded that "no social consensus exists" in support of ITQ's. At the march 1995 Montreal roundtable on the future of the Atlantic fishery (organized by DFO), the consensus was that quota licences should be used as a management tool, but with conditions attached on their expanded use. In all the presentations made to the standing senate committee on fisheries since its creation in 1985, perhaps no other matter has been raised more frequently by witnesses and with as much emotional intensity. The senate committee's June 1993 report on the inshore fishery, recommended, among other things, that the short-term and long-term social, economic and biological effects of quota licences be more thoroughly studied by DFO. Its December 1995 report on the future of the Atlantic groundfish fishery recommended that DFO review and assess the effectiveness of its regulations aimed at placing limits on the ownership of individual quotas.
Concluding RemarksIndividual quotas have great theoretical appeal. They were adopted by fisheries economists in the 1980's as the most "efficient" approach in managing a fishery - the management device of choice. Many regard them still as a panacea. However, such enthusiasm for what has become "conventional wisdom" may be prone to error. The use of ITQ's (and similar measures) to solve old problems may well have created many (if not more) newer ones. In fact, there would now appear to be greater willingness to concede that there are practical "glitches" associated with individual quotas, and more of them than previously acknowledged. Fish is a renewable public resource that needs public protection. This resource has provided food and employment to residents of coastal communities for many centuries. There is no reason why this cannot continue. I have a great deal of optimism for the potential of the fishery provided management is truly consultative. Coastal fishers need not be reminded that proper management is essential to their future and the future of their communities. Small-scale fishing is a business enterprise and a social and cultural enterprise. More than anybody else, fishery-dependent people are most supportive of the principle of conservation. However, sound conservation practice cannot be dictated. There must be community involvement and a consultative philosophy underlying government action. To be successful, community management, I believe, must go beyond the fishermen, it must include the community at large. Mobilization of the whole community will attract a large pool of articulate (non-fishers) ..., economists, teachers, educators, parliamentarians and others who are all impacted by the decisions of government. It would certainly be a force to be reckoned and DFO would finally have to take notice.
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