West Coast Fisheries, ITQs and the DFO

Legacy Part 19 – Des Nobels – Retired Fisherman, Activist and Elected Official

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Text By Blake Butterfield – Co-Editor-in-Chief and Head Correspondent

Meet Des Nobels, retired fisherman, a director of the North Coast Regional District and long-time spokesperson for the T. Buck Suzuki Environmental Foundation. At 63 years old, Des has lived in the small, water-access only Digby Island community of Dodge Cove for 34 years.

 Des Nobels on his boat – Dodge Cove, BC

Des Nobels on his boat – Dodge Cove, BC

Budget Cuts and Changes

In his time, Des has seen many changes come to the West Coast fishing industry. His experiences are legion and his opinions regarding policies, policymakers, and any number of other factors relating to the fishing industry in Coastal BC, are worthy of in-depth review. In a coming series of articles, we will expound upon a number of Des’s ideas and philosophies as they relate to this project.

Des will attest that most people’s eyes glaze over when you try to explain West Coast fisheries to them. It is a hodgepodge of regulatory and policy directives that do not have any true function or are based on, according to Des and others, inadequate and often out-of-date data stemming from a chronic disregard for the value of science within governing bodies at the provincial and national level. Partly for this reason, much of the budget of the Department of Fisheries & Oceans (DFO) was cut. But that is not the only reason. The importance of commercial fishing to British Columbia has been downplayed in favor of other industries and this has resulted in inadequate solutions and neglect. Given how important the health of our ocean is to most Canadians and the importance that the fishing industry has for our coastal communities, the failure to continue to collect adequate data on our fish is shocking, particularly given the large sums that are spent elsewhere.

One thing the BC fishery has in common with other, more well-supported resource-based industries, however, is the fact that it has been sold out from under the noses of the Canadian public to corporations, banks or a limited number of wealthy individuals, many of whom are not even Canadian or pay Canadian taxes.

Inadequate – cynics might say deliberately inadequate – methods for consultation with community partners including commercial fishers and First Nations have, according to Des, made things even worse.

This cut in the DFO budget had other effects as well. One is that the costs associated with tracking the fishing harvesting were downloaded onto the fishermen themselves. When Individual Transferable Quotas (a system that allows for fishing quotas to be bought and sold independently by weight) were first introduced, they were given freely to fishermen, and all were aware of the great value stored. Due to their understanding of the future value of what they were being given, fishermen readily agreed to take on the costs of self-observation. No one seemed to foresee that fishermen would not be the future owners of the quotas, however. What was supposed to happen was that the most efficient fishermen would end up owning the quotas, not corporations and investors. As time has gone on and more non-fishermen have bought the quotas, without taking on the observing costs, the real costs to fishermen have risen sharply. New, young fishermen entering the industry are rare indeed, and why would they? Unless bequeathed the wealth of equipment required, taking on the current costs would be like agreeing voluntarily to enter into indentured servitude.
 

Unfortunately Common Canadian Occurrence

One thing the BC fishery has in common with other, more well-supported resource-based industries, however, is the fact that it has been sold out from under the noses of the Canadian public to corporations, banks or a limited number of wealthy individuals, many of whom are not even Canadian or pay Canadian taxes. This follows the same line of thinking that has helped define how Canada manages its natural resources in general – license the rights to the highest bidder and watch the wealth flow outside of the actual communities who are the natural stewards of the resource and the environment from which it is sourced. It's a mode of thinking that does not do justice to the value of the environment, the communities who live there or even the resource itself.

What went wrong at the DFO? For starters, Des points out, it no longer has experienced personnel. The people with the knowledge have all retired. The office is now devoid of what Des would term “expertise.” DFO used to hire from the industry. People from fishing families who understood the water, the industry and how they operated would get jobs at the DFO. Some say that was too close of a relationship, whereas others saw that it allowed officers the ability to know who is screwing around and where to find them. They were on the front lines all the time. Their knowledge allowed them to focus the Department’s time more effectively, and just their presence was enough to keep most people from doing stupid things.

Inadequate – cynics might say deliberately inadequate – methods for consultation with community partners including commercial fishers and First Nations have, according to Des, made things even worse. You might think that there is one forum where all of these groups would collaborate on a sustainable future for our coastal waters, but sadly this is not the case. Channels of communication, from community groups, First Nations and governing bodies, are now kept separate. No forum exists. No collaboration takes place. No one seems sure why anyone thinks this is a good idea. The only logical explanation anyone can come up with is that it is a way for the government to maintain a higher degree of control.
 

Thanks For All the Fish

So, who owns the fish off Canada’s West Coast? Why Canadians, of course, right? Not so fast. In the 1990’s, the government hired forestry economist Dr. Peter Pearse to come up with a new system for managing its West Coast fisheries. Stocks had plummeted over the previous few decades and something needed to be done. Pearse took a page from Iceland and New Zealand’s fisheries, and since then an ever-growing number of our fish catches have been under the umbrella of ITQs.

Of the ITQ system at the time, Dr. Pearse said, “You cannot take quotas to a bank and borrow against them; you cannot transfer them flexibly; you cannot subdivide them.” However, what actually happened was that quotas became commodities to be traded to the highest bidder. In fact, banks now recognize quota as a valuable asset, which can, for instance, be used as collateral for getting loans.
 

The grand theory was that these rising quota prices would mean a healthy return for everyone. In effect, however, due to the costs of the quotas themselves, fishermen reap very little...


For inexplicable reasons, the government put no restraints on the ownership of these quotas, so anyone anywhere could buy them. And they have. This has driven prices through the roof. Over the past few years, in excess of $50-million worth of Canadian fishing quota has been purchased by Chinese interests. Good luck trying to find any public information on that. They have mouths to feed, declining food supplies, tons of cash on hand and a long-term vision. The Canadian government, it seems, very often forgets about that latter bit. So, how is it that China is buying up Canada’s  rights to the fish off our own coast? Well, Canadian law states that fishing quotas are, “not subject to any statutory constraints.” and the Canada China Foreign Investment Promotion and Protection Agreement (FIPA) compounds the problem. Signed into law in secret and without debate in the House, this agreement effectively allows China to sue the Canadian government for any losses incurred in Canada by Chinese companies for any reason. Canadian fishermen may never get those rights back. As a result our coastal communities suffer and this offshoring of resource rights does nothing to support sustainable fishing practices.
 

You Yuan A Piece Of Me?

As an aside, there is good reason to believe that our current government’s recent purchase of the troubled Trans Mountain pipeline for $4.5-billion was done for the same reason, as China had made significant investments in the Tar Sands. These investments would take a big hit were the pipeline not built and this would leave Canada in a position to be sued by China for lost profits, possibly ending up costing Canadian taxpayers just as much money. At least this way, Canada comes away owning something.

Obviously, Many moving parts of a potential solution are at hand: Build greater experience and passion at the DFO; bring all of the concerned parties to one table as part of ongoing governance; actively include the cultural knowledge of coastal First Nations; demand adequate data on what is actually going on in our oceans; and put fishermen to work conducting test fisheries to explore alternate species and assist in data collection.

The alternative could be just giving away our fish resources without getting anything in return. Or, instead of paying Kinder Morgan money for an aging pipeline of a declining-in-value resource, to end up paying tons of court costs and handing money over to China in a lawsuit. Both are bitter pills for many to swallow.
 

Profit Leakage: No Trickle Down Here

The grand theory was that these rising quota prices would mean a healthy return for everyone. In effect, however, due to the costs of the quotas themselves, fishermen reap very little, if any, of this reward. The value of the halibut quota “rose 190 per cent between 2010 and 2017, from $43 a pound to $125 a pound.” Most of the profits go to leaseholders, many of whom can’t even own Canadian fishing licenses because they aren’t Canadian. Meanwhile, the proportion of the money that goes into the pockets of fishermen is estimated to have dropped precipitously, by about 80%, according to some estimates. This puts pressure on the fishermen and impedes progress towards more sustainable practices. Des’s approach during his years as a commercial fisherman was to exercise restraint in how much he fished, but placing fisherman in an economic climate where they fish for someone else’s gain for 80% of the time does nothing to encourage restraint industry wide.

 Des Nobels, on his boat – Dodge Cove, BC

Des Nobels, on his boat – Dodge Cove, BC

Obviously, something has to be done. Many moving parts of a potential solution are at hand: Build greater experience and passion at the DFO; bring all of the concerned parties to one table as part of ongoing governance; actively include the cultural knowledge of coastal First Nations; demand adequate data on what is actually going on in our oceans; and put fishermen to work conducting test fisheries to explore alternate species and assist in data collection. The costs associated with self-observation could also be attached to the owners of quotas in the future, lessening the costs and therefore the risks taken by those doing the fishing. Any further foreign investment could be disallowed, or at least regulated in a way that the Canadian government could stop and reverse it at any point in the future.
 

There Is Hope

Some economists warn that any restriction anywhere on foreign investment could cause foreign money to flow out of the country as fears rise that we are not a friendly place for investor dollars. However, even our most recently previous Federal government, who were notoriously pro business, turned away a mountain of cash from the Chinese who wanted to purchase our potash. Canada is by far the biggest producer of potash in the world. In a seemingly rare stroke of foresight, our government realized the value potash would have to a future Canada, and rejected the offer. As China consumes about 20% of the yearly supply of this fertilizer, and owning Canada’s share would have almost quadrupled their supply, it must have been a shocking disappointment to them. But, as many non-economists have ironically noted, the Chinese are still bringing us their cash for whatever we will sell them.

Having said all this, Des sees things getting worse still before they get better. As he says, it has taken them over a century to get to this point, and here we are. Trouble is, the life in our ocean and those who live in our coastal communities can’t wait another 100 years for it to be fixed.