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Impacts of harvesting rights in Canadian Pacific fisheries

ANALYSIS

A properly functioning, stable cooperative fisher game should see the "players" working towards the maximization of the net economic returns from the fishery through time, while bargaining over the division of these returns. We now turn to the available data to see what evidence, if any, can be obtained on whether the cooperative fisher games are, or are not, yielding the hoped for results, and thus, whether or not, the destructive consequences of the pre-ITQ Prisoner's Dilemma type of competitive games have been eliminated.

Figure 1. Pacific Halibut Season Length: 1980-2005

A line graph depicting the season length for the Pacific Halibut from 1980 to 2005. The number of days decrease from 60 in 1980 to 6 in 1990. Suddenly, the number of days jumped to 250 in 1991 and remained steady until 2005.

Table 4. Pacific halibut fishery TAC overage/underage: 1988-2005
Year Catch (tonnes) TAC (tonnes) TAC overage / underage (tonnes)
1988 5 866 5 749 117
1989 4 659 4 564 95
1990 3 783 3 555 228
1991 3 241 3 364 -123
1992 3 441 3 636 -195
1993 4 796 4 836 -40
1994 4 498 4 564 -66
1995 4 320 4 387 -67
1996 4 321 4 379 -58
1997 5 601 5 719 -118
1998 5 859 5 924 -65
1999 5 552 5 554 -2
2000 4 832 4 884 -53
2001 4 638 4 819 -180
2002 5 448 5 510 -62
2003 5 328 5 397 -69
2004 5 494 5 768 -275
2005 5 568 5 700 -132
Figure 2. Pacific Halibut: Number of Active Vessels 1980-2005

A line graph depicting the number of active vessels for the Pacific Halibut from 1980 to 2005. Values decreases slightly from 340 in 1980 to 230 in 2005.

Since the integrated ITQ scheme has been in place for a very short period of time, this segment of the ITQ history of the fisheries cannot be assessed. Thus, the search for evidence will, of necessity, proceed on a fishery by fishery basis, up to the introduction of the integrated scheme. It will come as no surprise that the Pacific halibut and sablefish experiences are much easier to assess than is that of the groundfish trawl fishery.

In turning first to Pacific halibut, it will be recalled that, in the years leading up to the introduction of the IQ scheme, the fishery was characterized by excess capacity, rapidly declining seasons, chronic TAC overages, and economic distress. Consider now Table 4, and Figures 1 and 2.

The chronic overages (based on reported catch) disappeared after the introduction of IQs. The steady decline in active vessels is encouraging. What is particularly striking is the dramatic increase in season length, up to the IPHC maximum, and the fact that it has remained at, or close to, that maximum, ever since.

Detailed data on the industry's costs are not available, so that it is not possible to obtain estimates of the industry's profits through time. What is available, however, is the market value of quota over time. Given that quotas are perceived by fishers as being de facto long term, the quota values will, if the fishers are rational, reflect, albeit imperfectly, the market's perception of the flow of net economic returns from the fishery through time. Consider now Table 5, which presents the halibut quota values in constant 2005 dollars, and the accompanying Figure 3, in which a trend line is plotted.

Figure 3. Pacific Halibut: Quota Values and Trend Line

A line graph depicting the quota values for the Pacific Halibut from 1990 to 2006. The value increased steadly from 12 in 1990 to 75 in 2005 following closely the trend line.

The quota values reflect the market's perception of the returns from the fishery to the industry, not to the economy as a whole. Since the introduction of the ITQ scheme can be expected to have increased DFO's management costs, it is important to know whether the government received compensation through increased licence fees. Hence the quota value series is accompanied by a series on licence fees, also in constant dollars.

Table 5. Pacific halibut fishery quota and licence values in constant (2005) dollars 1988- 2005
Year Quota valuea (2005 $ per kg) Licence fees ('000s of 2005 $)
1988   6.5
1989   6.2
1990   5.9
1991 13.52 993.2
1992 15.41 974.5
1993 17.89 135.7
1994 19.93 135.6
1995 24.20 132.0
1996 39.73 128.8
1997 42.36 126.8
1998 43.85 125.4
1999 50.74 121.9
2000 62.94 2,126.3
2001 n/a 1,192.9
2002 63.59 1,332.5
2003 n/a 1,289.8
2004 74.25 1,321.1
2005 77.00 1,083.0

a Annual average

The quota values, in real terms, show a steady, and indeed unbroken, increase, since the inception of the IQ scheme, in spite of sharply increasing licence fees. Given the fluctuations in the halibut market, the unbroken nature of the increase is surprising. In any event, the quota values increased some five fold in real terms, over the last decade and a half. This can be taken as a measure, albeit crude, of the market's perception of the steadily increasing economic health of the fishery.

With regards to licence fees, the licence fees collected were trifling prior to the introduction of IQs. They remained decidedly modest during the 1990s, but reached a more healthy state after 2000, when DFO began to undertake a serious cost recovery program.

The same exercise is now undertaken for the sablefish fishery. Consider Tables 6 and 7, and Figures 3 and 4.

Table 6. Sablefish fishery TAC overage/underage 1988-2005
Year Catch (tonnes) TAC (tonnes) TAC overage / underage (tonnes)
1988 5 075 4 015 1 060
1989 4 722 4 015 707
1990 4 275 4 260 15
1991 4 532 4 560 -28
1992 4 557 4 560 -3
1993 4 546 4 560 -14
1994 4 533 4 521 12
1995 3 709 3 709 0
1996 3 168 3 169 -1
1997 3 893 4 023 -130
1998 4 164 4 023 141
1999 6 323 6 394 -71
2000 3 532 3 646 -114
2001 2 753 2 812 -58
2002 1 894 1 928 -34
2003 2 591 2 675 -84
2004 3 859 4 088 -229
2005 3 822 4 213 -391
Figure 4. Sablefish Season Length: 1981-2005

A line graph depicting the season length for the Sablefish from 1980 to 2005. The number of days decrease from 250 in 1980 to 10 in 1990. Suddenly, the number of days jumped to 375 in 1991 and remained steady until 2005.

Figure 5. Sablefish: Number of Active Vessels: 1983-2005

A line graph depicting the number of active vessels for the Sablefish from 1980 to 2005. Values increased slightly from 23 in 1983 to 32 in 2005.

Table 7. Sablefish quota values and licence fees in constant (2005) dollars 1988-2005
Year Quota valuea (2005 $ per kg) Licence fees ('000s of 2005 $)
1988   0.7
1989   0.7
1990 18.04 0.7
1991 19.93 0.6
1992 21.01 0.6
1993 27.52 0.6
1994 32.99 0.6
1995 45.71 0.6
1996 n/a 484.5
1997 n/a 605.4
1998 54.17 599.1
1999 63.42 1,512.4
2000 88.86 920.0
2001 n/a 838.3
2002 89.50 179.7
2003 n/a 613.9
2004 90.01 988.0
2005 77.00 911.0

a Annual average

Figure 6. Sablefish: Quota Values and Trend Line

A line graph depicting the quota values for the Sablefish from 1990 to 2006. The value increased steadly from 20 in 1990 to 75 in 2005 following closely the trend line.

The pattern exhibited by the sablefish fishery, after the introduction of IQs differs only in minor detail from that of the Pacific halibut fishery. The same conclusions hold.

The data that are available for the groundfish trawl fishery are, due to the complexity of the fishery, less complete than are those for halibut and sablefish. There are, for example no useful quota value data for the fishery available, at the time of writing. Nonetheless, it is possible to draw some inferences from what data there are. Consider now Tables 8 and 9.

Table 8. Groundfish trawl fishery number of active vessels and number of tows per annum 1996-2005
Year Active Vessels (no.) Tows ('000s)
1996 112 19.7
1997 92 16.3
1998 88 17.2
1999 89 17.4
2000 82 18.2
2001 83 16.7
2002 79 17.8
2003 78 15.5
2004 72 14.8
2005 75 14.4

Table 8 gives some indication that there was a steady decrease in active capacity in the fishery, after the advent of ITQs, and a corresponding decrease in fishing effort.

Table 9 on Pacific ocean perch, the fishery described as having been out of control in the pre-ITQ era (see: Table 3), is revealing. The massive overages disappeared after the 1997 implementation of the new regime. The appendix contains a set of tables on the other main groundfish trawl fishery species and species groups. Pre-ITQ TAC data are not available for these species, but post-ITQ TAC data are. It will be seen that the post-ITQ overage/underage pattern is virtually identical to that of Pacific ocean perch.

Table 9. Pacific ocean perch TAC overage/underage 1995-2005
Year Catch (tonnes) TAC (tonnes) TAC overage / underage (tonnes)
1995 6 311 4 234 2 077
1996 6 490 6 884 -394
1997 6 016 6 481 -465
1998 5 947 6 147 -200
1999 6 222 6 147 75
2000 5 967 6 147 -180
2001 5 823 6 147 -324
2002 5 897 5 847 50
2003 6 228 6 146 82
2004 5 971 6 146 -175
2005 5 152 6 146 -994

The economic data on the groundfish trawl fishery are fragmentary. Having said this, history has carried out a useful experiment for us. The American groundfish trawl fishery, off Washington, Oregon and California, is very similar in nature to that off B.C. When the B.C. fishery moved to ITQs, the West Coast American fishery continued with the same management scheme that Canada had used prior to 1997. A detailed comparative study of the two fisheries was published in 2006, by Trevor Branch, now with the University of Miami (Branch 2006). Branch concludes that, were the US to adopt the management scheme used for the B.C. groundfish trawl fishery, including the use of 100 per cent at sea observer coverage to be paid for by the fishers, the per annum net incomes of the American fishers would be increased by many millions of dollars (Branch ibid.).

Finally, it needs to be asked whether there is any evidence of the fishers, in the fisheries in question, coalescing and attempting to enhance the long term value of the resource, as cooperative game theory would lead us to expect. Once again, the evidence is very fragmentary, but there is some. No hard evidence is available, at the time of writing, on the Pacific halibut fishery. There is some, however, on the other two fisheries. The Canadian Sablefish Association has been making voluntary contributions to stock assessment and research in the order of $800,000 per year (L. Budden, Canadian Sablefish Association, pers. comm. 2007). The groundfish trawl fishers have made comparable voluntary annual contributions to research (Grafton et al. 2007).

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