Fishers being squeezed

Since 1979 there has been a policy in place on Canada’s east coast to protect inshore fishermen: the “fleet separation and owner-operator” policy essentially prevents the corporate sector from owning inshore licenses. Today, the corporate sector already owns three-quarters of the fishery (mainly in the mid-shore and off-shore) and inshore fishermen are worried about the pressure they see for a corporate push into the inshore too.

A Parliamentary Committee is currently reviewing changes to the Federal Fisheries Act, including the owner-operator policy. The public consultation just closed but representatives from Nova Scotia, including Graeme Gawn — a lobster fisherman and president of the Maritime Fishermen’s Union Local 9 — made presentations to the Committee calling for the policy to be made into regulation. He has been quoted saying: 

The fishery shouldn’t be a simple cash cow for one generation — it has sustained these communities for twelve. This is about how the fishery will look here in 20 years.

The following is an excerpt from my 2013 book The Devil and the Deep Blue Sea, and it looks at the reasons why fleet separation and owner-operator policies are crucial to small rural communities in Nova Scotia and should be made law.

Fishers Being Squeezed

The depletion of global fish stocks, fishing down the food web, and climate change all just mean that everything we thought we could count on is shifting and tentative. And fishers, particularly the small inshore ones, are being squeezed, not just by these ecological realities, but by economic ones according to Marc Allain, a research associate with the Canadian Fisheries Research Network at the University of New Brunswick. The Network brings academics, government scientists and industry representatives together to look at issues of relevance to the fishing industry. Allain says the “race for fish” — the competition between fleets that eventually led to the collapse of the groundfish — resulted in overcapitalization, essentially where fishers struggled to achieve unrealistic returns on their investment. In 1992, when then federal fisheries minister John Crosbie announced the moratorium for the northern stock, he also said that too many boats and too many people were chasing too few fish. In other words, a move to “rationalize” the fishery and reduce capacity was imminent. Allain says that in order to deal with this overcapacity, the government eliminated some of it by using market mechanisms and what are called Individual Transferable Quotas (ITQs). “You give everyone a share and then you let them trade so the most efficient operator will buy out the others,” he explains.

ITQs, introduced in the smaller vessel (under 45-foot) groundfish fleets in the 1990s, gave licence holders a guaranteed percentage of the total allowable catch based on their “catch history” over a six-year period. Owning it gave them the freedom to sell it, or lease it, and thereby transfer it to the highest bidder. Prior to this there was a collective quota for entire fleets. Those in support of the new scheme say it eliminates the competitive “race for fish,” because fishers own a guaranteed share of the “resource.” But critics of ITQs say they result in corporate concentration and benefit those who overfished in the first place. “In Nova Scotia it became very prejudicial to longliners, handliners, and gill netters,” says Allain. “[The government] took the last years of catch history and rewarded those who created the overfishing problem.” Not only that, it was only the licence holders who were recognized and essentially gifted the fish, while crew-members who also helped amass the catch histories lost out.

Ronnie Wolkins knows about this first hand. He’s been the president of the South West Fishermen’s Rights Association based out of Clarks Harbour on Cape Sable Island, Nova Scotia since 1996 and has fished with a hook and line for thirty-one years. He’s committed to the technology and says it’s a more sustainable way to fish since it doesn’t damage fish habitat or needlessly kill juvenile or unwanted fish. Wolkins tells me the story of when he was a crew-member aboard a forty-two foot fishing boat that ran into some trouble. On its way back to Cape Sable Island from George’s Bank and carrying 36,000 pounds of fish, the boat it hit a strong wind from the northeast and started taking on water. “We started bailing and used cotton gloves and screw drivers to chink the cracks in the deck,” he says. Even though everyone aboard the boat were fishers, none of them actually owned the licence to fish. So when it came time to allocate percentages of quota, Wolkins says “not one man aboard that boat got a catch history off that.”

Judith Maxwell runs the Scotia Fundy Inshore Fishermen’s Association, which also represents inshore fishermen. Her group differs from Wolkins’ because it adopted what she calls an “informal” ITQ system. “Every fishing licence has a catch history attached to it,” she explains, “and fishermen can choose whether they go into the informal ITQ system or the competitive fishery.” She says the majority of inshore fishers in southwest Nova Scotia are part of this informal ITQ system, but if they choose to go into the competitive fishery, they would join an association like Wolkins’ group, where they combine all their catch histories and pool the fish. This total amount is then distributed among the fishers and allocated on a weekly basis.

Maxwell says that because the DFO cut the fishing quotas so much, the percentages allocated to the licence holders translates into a lot less fish and for some it’s not enough to operate economically. In 1998, demonstrations erupted that had a lot to do with the fall-out from DFOs catch history allocations in the fixed-gear groundfishery. In February of that year, Ronnie Wolkins was among those who occupied a DFO office in Barrington Passage and by March their anger and discontent had spread and ten DFO offices around the province were occupied. Three months later, Scott Nickerson and three other fishers from southwest Nova Scotia made the news when they chained themselves to the flagpole on the lawn of the Nova Scotia legislature and pitched a tent with the words “we need fish” on the side. They were called “The Flagpole Four” and they argued that the push toward ITQs was an attempt to squeeze out the little guy. They said the DFO didn’t give them enough quota to feed their families. Later the same year, Nickerson made the news again when he committed suicide by shooting himself in the chest with a rifle.

Maxwell says that because of the shortage of fish, out of the 250 members in her group, only fifty actively fish, while the remaining 200 lease their quota to other fishermen. That way, fishers can accumulate quota, making it more worthwhile to go fishing. She says another way to transfer the quota is to sell a fishing licence. “I know a lot of fishermen who are now in their sixties and they know they’re never going to go fishing again so they sell their licence. The guy purchasing it doesn’t get the licence number — that disappears for life — but he gets all the benefits,” she says. “That includes the quota.” Maxwell says this is largely how the fleet got downsized. She says that in the mid-1990s there were about 750 fishing licences in Shelburne County alone and today there are only 560. DFO data show a similar trend: In 1996 there were 15,245 licence holders in Nova Scotia and by 2009 there were 5,898. In Atlantic Canada overall the number of licence holders plummeted from 49,957 to 17,751 in the same time period.

Critics of the system say those with greater access to capital can accumulate quota, whether it’s by leasing it or buying out fishing licences, which results in corporate concentration. Details about how the “informal” ITQ system has specifically led to this in Atlantic Canada are largely unknown, mainly because the information is not publicly available. But according to Maxwell, there is an “ongoing battle” and it’s over keeping the inshore fishery alive. Right now, there are DFO restrictions in place that don’t allow quota to be mixed between fleets. For instance, a dragger, which is part of the mobile-gear sector, could buy out the licence of an inshore fisher in the fixed-gear sector, but he would not be allowed to add the quota attached to that licence to his own. He would have to either lease the quota back to an inshore fisher or fish it himself by acquiring a fixed-gear boat. This is called “fleet separation,” and Maxwell says that if DFO were to ever do away with this restriction, the fishery would concentrate into the hands of a few very quickly. “Our fear is mixing of the histories between the two different fleets because then as the stocks keep depleting and mobile gear needs to access the fishing grounds twelve months of the year to keep their enterprise going, if they could buy fixed gear quota and add it to theirs, then our stock and resource would slowly disappear,” Maxwell explains. From a community perspective this would mean that fishing communities would lose access to fish.

There are already indications that concentration is happening, as draggers buy out fishing licences from the fixed gear sector and lease the quota back to the inshore. In 2004, DFO surveyed small boat (less than 45 feet) inshore fishers in the Maritimes about their operating and maintenance expenses and found that on average the fleet paid more than $7,000 a year to lease quota, which amounted to roughly seven per cent of all expenses. While this isn’t good, it’s still nowhere near as bad as it could be.

Like Judith Maxwell, Marc Allain, of the Canadian Fisheries Research Network, is worried the DFO might abandon restrictions that are currently protecting the inshore fishery in Atlantic Canada and bring in policies like it did out west that allow non-fishers to own quota and lease it back to the fishers. When ITQs were first introduced in the Pacific fisheries, the original quotas were allocated or gifted to vessel owners based on catch histories, similar to how it was done here. But unlike here, there was no restriction on who could own quota and as a result, outside investors can own quota and lease it back to fishers. “In the space of a few short years, access to the most lucrative species has gotten concentrated in the hands of ‘investors,’” he says.  Since the new quota scheme was introduced out west, leasing fees have skyrocketed and in some cases the leasing cost was as high as seventy-five percent of the landed value of the fish. To illustrate the problem, Allain provides the cost breakdown for one representative small-boat fishing trip that went out in the spring of 2011. On this particular trip the fishers landed 22,000 pounds of fish including sablefish, halibut, rockfish, and lingcod, valued at $64,000. From this revenue, the fisher who owned and operated the vessel paid $9,000 to his crew and $6,000 to vessel expenses, while the lion’s share — $42,000 or sixty-six per cent of the landed value — went to lease quotas. This left only $7,000 for the boat share, which is essentially his income.

Here in Atlantic Canada restrictions like “fleet separation” and “owner-operator” rules are still in place, which means the owner needs to operate the boat and fishers or processors are still the only ones allowed to own fish quota. “But we’re always fearful that some back door will open up,” says Judith Maxwell. “If that happens, it could end up that lawyers, drug-store owners and Walmart, could end up owning the quota.”