BC Business
The B.C. salmon fishery keeps resisting a market-based management system. Critics accuse the feds of pitting independent fishermen against corporate giants, but what if this new approach gives the little guy some much-needed financial clout?
Classic rock blares from the wheelhouse radio. Skipper Quincy Sample layers on fibreglass in a waist-deep cockpit at the stern of his boat, making repairs to the 42-foot vessel in anticipation of a commercial salmon fishery opening in June. Gulls squawk as the guy lines of sailboats moored nearby sing in the breeze.
Sample, 43, was born in Saskatoon but raised within spitting distance of the ocean in Pender Harbour on the Sunshine Coast. He’s been fishing since his early teens. His language is as salty as the air on this spring afternoon at Comox Harbour, where he ties up the Esther Sample (christened after his wife) when not chasing halibut, herring, cod or salmon. When it comes to making a living, commercial fishing is all Sample has ever known.
“I can’t imagine doing anything else,” he says as he climbs out of the cockpit, looking slightly intoxicated from the epoxy fumes. “I’ll always be a fisherman.”
The commercial salmon fishing game can be seductive, but the rules keep changing. Young fisherman face rising entry costs, and striking a balance between commerce and sustainability remains as elusive as it was early last century, when boats netted a seemingly inexhaustible supply of Fraser River sockeye. Since 1990 the province’s wild salmon harvest has declined from nearly 100,000 tonnes to about 20,000, with a wholesale value of between $150 million and $170 million, according to the B.C. Ministry of Agriculture. As for independent fishermen like Quincy Sample, they’re watching the increasing corporatization of their industry and the concentration of fishing rights in fewer hands.
Many critics point to Fisheries and Oceans Canada (the DFO) and its individual transferable quotas, or ITQs. When it emerged in the 1970s, this made-in-B.C. fisheries management concept aimed to address what was considered an untenable situation: fishermen racing to catch as much they could of the quota assigned to a particular stock. The DFO disliked the so-called derby fishery for several reasons. Besides leading to more fish being caught than were allocated, it threatened crew safety because of its competitiveness and made conservation-based management tough.
ITQs gave fishermen a designated amount of quota, which became a tradable good, like a share on the stock market. Quota can be bought or leased: in the B.C. halibut fishery, fully covered by an ITQ system since 1991, the quota purchase price is more than $100 a pound, according to Ecotrust Canada and the T. Buck Suzuki Environmental Foundation. Although quota began as a number on a piece of paper with modest value, it now looks like a lottery win for fishermen lucky enough to get in early. ITQs removed the race to fish, but they also spawned a clash of ideologies around how commercial fishing is managed.
Joy Thorkelson, a tough-talking Prince Rupert city councillor and a longtime representative of the United Fisherman and Allied Workers’ Union (UFAWU), says ITQs have inflated the cost of quota—discouraging new entrants into commercial fishing—and whittled away fishermen’s bottom line. They’ve also led to the rise of armchair fishermen who make profit from staying at home and leasing out their quota, she adds.
Thorkelson gets furious thinking about how fishing rights and control, thanks to what she considers a concerted effort by the DFO to impose ITQs, have migrated up the food chain to the likes of Canadian Fishing Co. Part of the Jim Pattison Group, Canfisco is a vertically integrated company that owns licences, quota and fishing vessels in most fisheries on the coast, plus processing facilities in B.C. and Alaska that together handle some 20,000 tonnes of salmon annually. (In late 2015, Canfisco closed its Oceanside fish cannery in Prince Rupert, the last in the province, eliminating several hundred seasonal jobs and roughly 20 high-paid trades positions—and further angering the UFAWU.)
The West Coast salmon fishery continues to resist full implementation of the ITQ system. The reasons are as complex as the fish are to manage: five species, three fleets (gillnet, seine and troll) and fishermen’s independent streak, strong as a tidal rip. Thorkelson claims that more than 90 per cent of UFAWU members oppose ITQs. So far, the commercial salmon sector remains mostly a derby fishery, with catch limits attached to a stock and gear type during an opening that can last anywhere from a few hours to several days.
The UFAWU is lobbying the DFO to make owner-operator and fleet separation provisions part of any further fishery management changes. It’s something that Thorkelson says Atlantic fishermen fought hard for when they won concessions as the agency imposed ITQs on the East Coast. Owner-operator provisions require the individual who owns the quota to be on the water fishing it; fleet separation prevents fish buyers and processors from dominating the fishing fleet, whether it’s by directly purchasing quota and licences, or offering financing to fishermen in exchange for exclusive rights to their catch.
“What we need is a system that works for working fishermen on the water, and ITQs don’t,” Thorkelson says from the UFAWU office in Prince Rupert. “It’s becoming more about the stock market and less about the game of fishing.”
Thorkelson has an ally in Evelyn Pinkerton, a maritime anthropologist at SFU’s School of Resource and Environmental Management, who has written extensively about community management and control of fishery resources. Pinkerton argues that a neoliberal attitude has infected the federal fisheries bureaucracy and is playing into the hands of corporations while downloading costs onto everyday working fishermen.
Pinkerton co-authored a 2009 paper called “Elephant in the Room” that assailed the impact of ITQs on the B.C. halibut fishery. In the 1990s that fishery was one of the first to adopt them, following a recommendation by economist Peter Pearse, now an emeritus professor of economics and forestry at UBC, who headed the 1982 Commission on Pacific Fisheries Policy for the DFO. The SFU academic tells BCBusiness that this led to an investor class “who make more money leasing quota than fishing it,” as well as consolidation of fishery control in the hands of processors like Canfisco. Although the value of the halibut fishery grew by 25 per cent between 1990 and 2007, the proportion that ended up in the pockets of boat crews plunged by 73 per cent, according to Pinkerton.
Her paper sparked a rejoinder from Bruce Turris, a former DFO economist and currently executive manager of the Canadian Groundfish Research and Conservation Council, who cited a “lack of proper sources and references” when it came to quota lease prices and practices. Others, like Art Davidson, a Saanich-based fisherman and president of the BC Longline Fishermen’s Association, countered that though the ITQ system works well for people who own all or much of the quota they fish, it also acts an investment vehicle that unfairly distributes wealth away from the fishermen who bring the resource to market.
But according to Jeff Grout, the DFO’s Pacific region resource manager for salmon, government isn’t forcing ITQs down the throats of commercial fishermen. Grout says his department informs its fishery management decisions by seeking input from area harvest committees consisting of fishermen on the ground. The DFO has only implemented ITQs in the salmon sector on a season-by-season basis in select seine and troll fisheries, and Grout admits they have faced stiff opposition from the gillnet fleet.
“There will always be independent fishermen who have different ideas, but we think ITQs have been effective in terms of managing the fleets and assuring that they fish within allocations,” he says. “It gives us more certainty in terms of catch.”
As for the cost of leasing and buying quota, Grout says the DFO doesn’t collect data on private transactions between fishermen. For Pinkerton, that points to a big problem: with ITQs, the agency has unleashed a sharecropping of the ocean that is squeezing fishermen.
If the UFAWU’s Thorkelson represents the little guy—the deckhands, boat captains and fish plant workers—Rob Morley, Canfisco’s vice-president of production and corporate development, symbolizes what the UFAWU, Pinkerton and their allies say is another side of the West Coast fishery: monopolizing and increasingly dominant.
But Morley says the facts prove otherwise. In June 2016, before the federal Standing Committee on Fisheries and Oceans, he testified that Canfisco buys fish from a fleet of 860 vessels and owns eight processing facilities but owns just 4 per cent of all salmon licences, as well as 21 per cent of groundfish quota, 15 per cent of hake quota, 3 per cent of halibut quota and 2 per cent of sablefish quota. Morley concluded that “contrary to misinformed reports, the licensing policies in B.C. have not resulted in increasing concentration or control by Canfisco and the companies we have merged with.”
His testimony doesn’t paint a complete picture: the company has a 50 per cent stake in an undisclosed number of fishing vessels up and down the coast that gives Canfisco exclusive access to buy the catch.
Although the last cannery closed nearly two years ago under Canfisco’s watch, the bright spot in B.C.’s salmon sector is the growing demand for fresh-frozen fillets. Here the province has an advantage over Alaska because it’s closer to North American markets, Morley says. By eliminating the race-to-fish mentality, ITQs better serve consumers, he believes.
“ITQs make sense because it spreads out the fishing effort over a longer period of time and enables us to get the best high-quality product to market in a timely manner,” Morley explains from Canfisco’s headquarters in Richmond.
But Pinkerton and Thorkelson also say there are misconceptions about commercial fishermen being overly competitive and prone to exploiting a stock to near extinction, as befell the East Coast cod fishery. For decades the West Coast industry self-organized through what was known as a layup system, whereby captains would keep their boats tied up at the dock for several days after landing their catch, giving the rest of the fleet a chance to take its share. This approach died out in the 1970s, some say due to a lack of government support.
ITQs eventually filled that void, but this framework for fisheries management has taken heat elsewhere. Early on, New Zealand was more enthusiastic than other nations in adopting the market-based approach to quotas. In a 2016 paper, Fiona McCormack, an anthropologist at the University of Waikato in Hamilton, noted that New Zealand has been globally recognized for its efficient and sustainable fisheries management, largely based on its wholesale adoption of ITQs. But this adulation masks some unsettling side effects, McCormack argued, namely the “inequitable distribution of fishing rights, the relative power of quota holders vis-à-vis producers, the lack of attention given to the intergenerational concerns of fishermen and their communities, the emergence of new class structures” and other issues.
The DFO’s management of West Coast fisheries has tilted toward conservation since the policies of the 1996 Mifflin Plan and subsequent licence buyback programs reduced the number of salmon licences by more than half. B.C.’s five salmon species—coho, sockeye, Chinook, pink and chum—comprise more than 8,000 genetically unique stocks that spawn in myriad rivers, streams, creeks and even roadside ditches. The feds recently renewed their commitment to salmon conservation, including a pledge to implement all of former B.C. Supreme Court justice Bruce Cohen’s recommendations from the inquiry into the 2009 collapse of the Fraser River sockeye run.
Stuart Nelson, a Surrey-based fisheries consultant, believes the critics are comparing ITQs to some utopia that no longer exists, when salmon were so abundant that the first Europeans to visit B.C. claimed they could walk across streams on the backs of spawning fish. Management of commercial fishing had to change from a free-for-all to something more controlled, Nelson says. Unlike SFU’s Pinkerton, he sees a positive side to climbing quota leasing costs: “It means quota must have some value.”
As with most other industries, Nelson adds, young people can expect to pay their dues—as a crew member or a captain leasing quota—to work their way up to an ownership position.
IN THE SAME BOAT Shaun and Sonia Strobel founded Skipper Otto’s to support independent fishermen
That’s an oversimplification, says Sonia Strobel, co-founder and managing director of Richmond-based Skipper Otto’s. If Canfisco is the Goliath of commercial fishing, Skipper Otto’s is the David. Strobel says she and her husband, Shaun, launched it in 2008 in response to the pressure on family fishing operations from factors such as the escalating cost of leasing and buying quota, the consolidation of processing and the closure of public docks that once let fishermen offload their catch for free. (Northern fishermen now have one choice—pay to use a Canfisco-owned dock in Prince Rupert.)
“My father-in-law, Otto, has gillnetted for salmon since 1969, and my husband has fished for most of his life,” Strobel says. “During that time there has been a steady decline in the number of independent fishing families. Our goal is to not only make a profit but also support fishermen with a fair living wage.”
Skipper Otto’s is based on a community-supported agriculture model, in which members pay upfront for a certain amount of seafood that varies depending on what’s seasonally and annually available. Participating fishermen have the security of a guaranteed market for their catch, while consumers know who caught the fish, how it was caught and where the money goes. Yet a look at Skipper Otto’s roster of 30 or so mostly silver-haired fishermen confirms that salmon fishing is increasingly an old man’s game.
The outfit may be a small player compared to Canfisco, but Strobel says it’s growing: “Last year we took on four new fishermen, and we’re getting inquiries all the time.”
At press time, Skipper Otto’s was completing a memorandum of understanding that will enable it to build a 10,000-square-foot processing facility on DFO land in Steveston. Hopefully, Strobel says, construction will be finished in time for 2018’s peak Fraser sockeye run, which is expected to be in August and September.
Fishermen are an individualistic lot, averse to overbearing government intrusion. Spend a few minutes with the likes of Quincy Sample on his boat, or visit any dock where trollers, seiners and gillnetters tie up, and you’ll get the idea. Back on the water, Sample shows the grit and optimism that is perhaps the only reason he continues to reinvest in commercial fishing. Debt has been his constant companion. When Sample was 22, he owed $220,000 on a salmon licence; he hasn’t stopped investing, buying quota when he can and leasing whatever he can’t afford to buy. Recently he bought a salmon trolling licence for $160,000. Sample owns 15 per cent of his halibut quota and leases the rest of what he catches from so-called armchair fishermen. “It’s like gold,” he says.
He shrugs about the DFO’s hopes to introduce the ITQ system across the board in the salmon sector. Quota is expensive, Sample admits, but there’s an unexpected upside to this market-based mechanism for access to commercial fishing opportunities. Previously, walking into a bank to ask for financing with not much more than a beat-up fish boat for collateral was a non-starter. But banks now recognize quota as a valuable asset, enabling fishermen like Sample to leverage it for financing.
“The problem with the big companies is that they have deep pockets and can bid up the price of quota. The Jimmy Pattisons of the world are owning the industry,” he says. “But you know, there will always be fires to put out. I’ll always fish.”