February 2005

 

TOWARDS TREATIES AND TRANSITION: A DISCUSSION PAPER ON ESTABLISHING A LICENCE BANK

 

Background

 

The final recommendation in Treaties and Transition, the report prepared by Professors Pearse and McRae in May 2004 for the joint federal-provincial task group on establishing a vision for post-treaty fisheries, is:

 

Action should be taken across the range of recommendations.  Reform should be complete, not partial.

 

Shortly after the release of Pearse/McRae, the First Nations Summit and the BC Aboriginal Fisheries Commission released a parallel report, Our Place at the Table: First Nations in the BC Fishery, prepared by a panel of aboriginal fisheries experts.  Like Pearse/McRae, this report proposes solutions intended to bring a high degree of certainty to aboriginal and non-aboriginal interests alike while ensuring the conservation of the fisheries resource.  Alliance members believe there is enough common ground between the two reports to move forward with reform and make progress on treaties.  This discussion paper proposes a way to move to towards those ends by establishing a licence bank.

 

The Issue

 

British Columbians want to see progress on treaties.  Four tables have agreements in principle (AIP) in place and are in negotiations to finalize treaties; there is a strong desire to make significant progress on these over the next few months.  The fisheries component remains one of the thorniest with widespread concern regarding harvest agreements and treaty protected sale of fish.

 

The fisheries community has two broad and serious areas of concern.  The first is a level playing field--that all participants in the commercial fishery must be subject to the same rules and the same standards in an integrated fishery so that no one group of participants has a competitive advantage over another. The second is compensation--that the costs of treaty settlements, whether for increased food, social and ceremonial (FSC) fish or for fish for commercial sale, should be borne by all Canadians not by industry.    

 

Both levels of government have acknowledged the fundamental nature of these concerns and indicated acceptance but have not yet clearly defined them in policy.  The failure to articulate a clear policy, especially on the federal side, has led to deep suspicion about the cumulative effect of treaty negotiations and fears that whether inadvertently or deliberately the government is negatively impacting the economic viability and value of the industry in order to make settlement easier.  At the same time, lack of security of access is reducing investment at all levels of the fishery, making it harder to meet the needs of the global seafood market.

 

To reassure industry, the two governments should announce that they are endorsing the principles outlined in Pearse/McRae and are moving ahead step by step.

 

From our perspective, the key principles are:

 

  • A single, integrated commercial fishery with all participants operating on a level playing field, with the same rules and the same priority, with all fish sold commercially subject to the same terms and conditions.
  • Equivalent quotas and licences should be purchased to offset new First Nations commercial allocations or significant increases in FSC harvest.
  • Fair rules of compensation must be established for non-quota fisheries to avoid arbitrary decisions, such as occur with sockeye equivalents.
  • A mandatory catch monitoring and independent third party dockside verification program for all fisheries.
  • DFO retains the single, ultimate management authority.
  • Enhanced security of tenure with 25 year, renewable licences.

 

Moving Forward: Establishing a Licence Bank

 

As a means of moving forward in the spirit of both Pearse/McRae and the First Nations report, we propose that the two governments immediately create an independent board, able to accept funds from both the provincial and federal governments, with a base capital endowment of $100 million to acquire licences and/or quota in various fisheries for present AIP arrangements or to be utilized in interim agreements to provide economic benefits to First Nations until such time as comprehensive agreements are complete.  While interim arrangements or comprehensive settlements are being developed, these licences and/or quota could be leased to interested parties in the existing commercial industry in order to generate additional revenue to supplement the original investment.  For instance, the going market lease in most quota fisheries would pay off the initial purchase over 10 years and would thus substantially reduce the long-term cost of transfers to First Nations.  A long-term approach would also enable licences and/or quota to be acquired in a cost-effective way without distorting the market.

 

It is important to note that this could not be achieved through the existing advisory groups, through the existing AFS transfer model (which penalizes First Nations and currently leaves 26 per cent of F licences unused in inventory without generating any return for taxpayers), or in house mechanisms at Fisheries and Oceans Canada (which cannot recognize licences as property).  It must be set up on a business-like model—because it will be part of the fishing business—with the ability to retain funds, roll money between fiscal years, make rapid and sensible decisions, and allow for “expert” input from industry and First Nations. 

 

We propose therefore that government set up the base capital fund under a non-profit society or independent foundation.  The fund would be set up under an  independent board of directors consisting of expert advisors from First Nations, industry and government with a clear set of conditions covering the reason for the fund, the way it can be used, the way it will be administered and the process for transferring licences acquired to settle treaties or make interim arrangements.  This board would hire staff who understand the complex system of buying, selling and leasing licences and/or quota and who will run the bank in a business-like way in order to make it self-sustaining, to reinvest any surpluses in more licences and/or quota, supplement the original investment, and reduce the cost to the taxpayer of settling treaties in a way that is fair to First Nations and the commercial sector.

 

In setting up the fund, consideration must be given to the following:

 

  • Licences and/or quota bought by the bank should be turned into personal licences rather than vessel licences (on the model of existing N licences) in order to facilitate transfer to First Nations;
  • Licences and/or quota should be acquired across the full range of fisheries
  • Licences and/or quota should be acquired as cheaply as possible and leased to interested parties to maximize profits—i.e. the bank must be run on sound business principles
  • Clear rules on conflict of interest must be developed
  • Clear procedures for transfer of licences and/or quota for treaty settlement must be developed including provision of adequate notice periods

 

In this way, the bank would be the mechanism by which the government acquires licences and/or quota, holds the entitlements until they are needed for interim arrangements or settlement of negotiated treaties, then distributes the entitlements to First Nations and removes them from the bank’s books.  The mechanism would work with both existing quota fisheries and those currently with open access.    In the case of salmon, for instance, licences will not necessarily pass back and forth.  They will be bought, held and leased to interested parties until such time as quotas or another share mechanism are developed by the broader industry.  At this point, the quotas that the licences once represented will be leased out and ultimately transferred for settlement.  In this way, the bank could hold shares in salmon species not required for individual treaty settlements and lease these back to industry.

 

Progress on establishing the licence bank must also be in tandem with the other recommendations of Pearse/McRae in keeping with their advice that reform must be complete not partial.  

 

Our proposal would not change the existing table by table negotiating mandate although it would require developing and implementing an overarching policy.  It would demonstrate, however, a dramatic commitment to marrying the conclusions of the two reports with the need to make progress on turning the fisheries component of AIPs into final treaties while establishing principles to guide other tables.  It would advance the twin aims of conservation and economic viability.  It is achievable, it is fiscally practical and we believe would be widely acceptable.

 

*****

 

 

Members of the BC Seafood Alliance                Associate Members

 

Area A Crab Association                                         BC Salmon Marketing Council

Canadian Sablefish Association                           Canadian Groundfish Research & Conservation Society

Deep Sea Trawlers Association                            Pacific Fishermen’s Mutual Marine Insurance Co.

Fisheries Council of Canada

Pacific Halibut Management Association

Pacific Prawn Fishermens Association

Pacific Salmon Troll Alliance

Pacific Sardine Association

Pacific Sea Cucumber Harvesters Association

Pacific Urchin Harvesters Association

Spawn on Kelp Operators Association

Underwater Harvesters Association

West Coast Green Urchin Association

 

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