I would like to talk about two things. One is the failure of the free market system in our fisheries. The free market system was intended to work under certain conditions, but these conditions do not exist in most Pacific fisheries today. Second, I'd like to talk about options for transitioning to an owner-operator/fleet separation system in the least disruptive way, based on ideas of B.C. fishermen and the world fisheries literature.
The free market system can work well when there is, number one, equal access to capital; number two, equal access to information; number three, a transparent auction-like situation. Instead, we have conditions in the ITQ system in which young fishermen cannot afford to buy either a licence or a quota because they don't have access to enough capital for either. We have lack of equal access to information, because ITQs do not go up for bid in an auction-like system, but instead are leased privately and increasingly through processors, with lessor or lessee not knowing what lease price is being charged.
Third and finally, ITQs are often held by shell companies and are gravitating offshore because fishermen are not required to reveal the ultimate beneficiary in their application for a licence. Corporate control of licences has enabled the export of fish to be processed abroad where labour is cheaper, causing the closure of fish-processing plants in Canada. The last major cannery in British Columbia was closed in 2016, and fish caught in B.C. waters are now canned in China, Vietnam, Thailand and Alaska.
If owner-operator/fleet separation is a viable alternative, how do we get there with the least amount of disruption? There are many good ideas from active fishermen who responded to an online survey of B.C. fishermen conducted in the summer of 2018 by the United Fishermen & Allied Workers' Union, UNIFOR.
There is a high level of agreement in this survey on three basic questions. Ninety-one per cent answered “Yes, in some fisheries” to these questions: “Would you support an owner-operator policy created to meet the needs of B.C. fishermen?” and “Would you support a fleet separation policy that prevented processors/buyers from controlling licences/quotas?” It's interesting that they say “in some fisheries”, so maybe not all fisheries. The third question was “Should DFO hold an inquiry to change west coast licensing policy to benefit active fishermen and rural coastal communities?” Eighty-one per cent answered “yes”, but they said that third party involvement would be crucial. They were a little hesitant about DFO controlling the whole thing.
Now, there are four major ideas that came out of this survey about how to do desirable change, and also from the fisheries literature. These ideas demonstrate that it's possible to design ways of moving to owner-operator without hugely disruptive consequences to corporate or fishermen ITQ owners.
I'll probably have time to talk only about one idea, which is licence and quota banks. In licence and quota banks, fishermen's organizations or communities have purchased ITQs, hold them in a quota bank and lease them out to qualifying community members at affordable prices that are much lower than the market rates charged by most quota owners. This gives us options for dealing with both fishermen and corporate ownership of ITQs, under an owner-operator scenario.
Fishermen in the survey responded, with 76% saying that they thought this was a really good idea, worth exploring. They're familiar with the Northern Native Fishing Corporation, which has existed since 1982 in northern B.C., out of Prince Rupert, whose purpose is to allow fishermen stable access to licences. There were about 200 licences in this quota bank when three tribal councils bought the B.C. Packers rental fleet. The purpose is to allow fishermen stable access to licences at a moderate lease fee, without licences being treated as a commodity to be traded for profit by either fishermen or processors.
This model has been taken up around the world in a number of places. I'll just mention the Cape Cod Fisheries Trust in Massachusetts, which does this. They manage to lease out quota to small-scale fisheries for 50% of the market lease fee. There's a dock fish quota bank in B.C. that does a similar thing. There's a marvellous one at a very small scale in one community in Denmark, Thorupstrand, which has become very famous.
The one I want to talk about the most is the CDQ program in Alaska. It has a somewhat different way of handling this issue, but I think it could be easily adapted to a quota bank. When the Bering Sea and Aleutian Islands fisheries went to ITQs in 1992, 10% of the quota was reallocated to the communities, which were largely indigenous.
In the Alaska case, they didn't necessarily go to licences, although they could have. My point is that this is something that could be easily used in Canada as a way of repatriating fisheries to Canada. This was done, by the way, in Newfoundland and Labrador with a shrimp factory trawl fishery. When that fishery, which was within the 200-mile limit, was fished by other countries, Canada simply began to reallocate the fishery to onshore co-ops.
That kind of system could be used to reallocate percentages of fisheries, any percentage that people thought was fair, to quota banks, which would then release that amount of fish to owner-operators. This offers a very useful tool for thinking about how much—what percentage—of the fishery you want to reallocate, at what rate and at what time.
I'm not going to have time to talk about the other ideas, but I'll just tell you what they are. One idea is to talk about allowable quota ownership, how much quota ownership anyone could have. Another is allowable quota fees, if you're going to gradually phase out quotas, and—