Good morning. Welcome.
I'm here as the chair of the panel that made the recommendations that the ministers have acted on. Having heard the discussion earlier on with the previous group, I'm going to zero in on one issue, which is what the report said about 50-50, and I'll be happy to entertain questions around that.
The approach we used was based on the principle of equity, but also on other principles, and they are all laid out in the report. We labelled each of the so-called temporaries at the time as “quota holders” because each had an individual share, and the idea was that each one of those quota holders would be organized into a company of some kind. They could determine whatever organization they wished to aggregate or to consolidate those quota holdings so that the overall increase in the number of vessels or the increase in effort really wouldn't change. In other words, the fishery prior to and after the entry of the temporaries would remain roughly similar, at just over 200 vessels. To do that meant consolidating those quotas into some form of entity.
The key, though, is that regardless of how many participants--how many quota holders--formed a company, that company's overall quota would be the sum of the individual quotas held. In other words, if you had 10,000 pounds and 10 licence holders formed a company, that company would have 100,000 pounds; if there were 10,000 pounds and 15 formed a company, it would have 150,000 pounds.
What seemed to get lost in the recommendations after the TAC hit the magic 9,700 tonnes was that each of the licences was simply treated as another licence and the overall quota was divided equally among them. The trouble was the tonnage in each one of these new companies either exceeded or fell short of the sum of the individual quotas that each of the quota holders took into the company when it was formed. As a result, when you aggregated these things, it no longer added up to 50-50, but fell somewhat short of that. It was effectively still a 60-40 arrangement.
I think the document makes clear the intention and how the mechanism was supposed to work. In the report the annex B that's referred to was used as an illustration of what an end result would look like, but we had no way of knowing at the time how the various quota holders would aggregate themselves into companies or how many companies would end up in the final result. However, it didn't matter how many companies there were; as long as each of the quota holders took in their allocation, it would sum to the 50%, the equitable level that had been intended.
Somewhere along the way there was a misinterpretation of how this was supposed to work.
Another important element here is that there is a recommendation, which had been accepted by the minister, of complete transferability of quota among the quota holders: company A could acquire quota from company B, or there could be consolidation within company A. The idea was that it was to be fluid, so that issues around viability could be addressed naturally through consolidating more quota to make sure your vessel was viable.
The recommendations were of a piece. They were meant to be taken as a whole, and that's the way the minister accepted them, with the exception of the 50-50 sharing, which was to be engaged at the trigger point of 9,700 tonnes.
So the idea of this one-third, one-third, one-third, or 25, 25, 50% share, and so on, is certainly one way of looking at it. But our mandate was to look at this as a fishery that could be put and maintained on a viable basis. Those recommendations were directed to that end, and not along classes of individuals. All of the licence holders participated, or had the opportunity of participating in the hearings, including the first nations, who were represented, and the permanent and the temporaries. Everybody participated, and we had briefs from all of them. These were the recommendations and those were the ones that were accepted by the minister.
My reading of this is, yes, there was a misinterpretation of how this equity was to be applied, and it was not applied in the way the report had intended.