Inshore regulations

Summary of April 1st Inshore regulatory changes

Amendments made to the Fisheries Act in 2019 helped us put the suite of DFO policies for inshore and coastal fisheries in Atlantic Canada and Quebec into law. This will help us keep the benefits of an inshore fishing licence in the hands of independent core harvesters and maintain a separation between the fishing sector and other sectors.

What are inshore regulations?

When we strengthened authorities in the Fisheries Act in 2019, we also made regulatory amendments to our inshore regulations: the Atlantic Fishery Regulations, 1985 and the Maritime Provinces Fishery Regulations. These amendments clarify the rules governing inshore licences and create new enforceable requirements to help us ensure that licences remain in the hands of local, independent fish harvesters.

Part of the regulations came into force on December 9, 2020 when elements of the Owner-operator and Fleet Separation policies were added to these regulatory requirements:

inshore and coastal licences can only be issued to an eligible individual, their estate or the company in which they own and control 100% of the voting shares, or to community-based fishing organizations, and
holders of inshore and coastal licences, operators named in these licences, or authorized substitute operators, must personally fish the licence.

These rules are the same as they were before the regulations came into force, but now they are law, rather than policy.

The regulatory changes in December 2020 also enabled DFO to be able to issue coastal licences to wholly owned companies, as long as the eligible individual owns and controls 100% of the company’s shares.

The next part of the regulatory changes is in effect on April 1, 2021.

How will DFO ensure compliance with these regulatory amendments?

Compliance with these regulations will be achieved in two ways: administratively and through enforcement.

Administratively, DFO will only permit commercial fishing licences to be issued to individuals, their wholly owned companies, or community-based fishing organizations. Prior to being issued a licence, licence holders must attest to not having transferred any of the rights or privileges conferred under a licence to any third party. If found to have transferred any of the rights or privileges under a licence, that licence will not be reissued until the applicant can demonstrate that use and control by a third party has ceased.

Since these prohibitions are law, the Department will be able to investigate instances of third parties using or controlling a licence issued in someone else’s name. Any contravention of the regulations is a prosecutable offence under the Act and may result in Court imposed penalties, or a suspension/cancellation of the licence, depending on the violation.

Section 78 of the Fisheries Act outlines penalties for offences.

Do the April 1st changes apply to me?

The inshore regulations apply to inshore Independent Core licence holders across Atlantic Canada and Quebec, except holders of:

a pre-1979 corporation licence
a pre-1989 corporation licence that does not name the operator in Maritimes Region
an exempted fleet licence in Maritimes Region
a coastal licence in Maritimes and Gulf Regions

In addition, the regulations do not apply to any licence issued under the authority of the Aboriginal Communal Fishing Licence Regulations.

Will harvesters currently exempted/excepted from the inshore policies continue to be exempted under these regulations?

Yes. however, new exemptions or exceptions will not be allowed under the regulations.

Keeping a crew registry

The inshore regulations require inshore Independent Core licence holders to keep records of all the crew aboard the vessel on every fishing trip. These requirements will be outlined in the licence conditions. They include:

Name
Fisher Identification Number or Provincial Fisher’s Certificate
Vessel name and vessel registration number
Directed species
Fishing trip start date
Fishing trip end date

These records must be kept by the licence holder for at least five years.

Is there a logbook that DFO is requiring for the crew registry?

No specific logbook is required for the recording of this information. Licence holders are requested to keep records of this information in their own personal business documentation files.

What is meant by a fishing trip?

The definition of a fishing trip is found in the Atlantic Fishery Regulations, 1985, section 2(1), which state that: a fishing trip means a voyage that commences at the time a fishing vessel leaves a port to engage in fishing and terminates at the time fish caught during that period are offloaded.

Who is defined as crew?

Crew is defined as those people onboard the fishing vessel who are engaged in fishing activities.

The regulations specify that an individual less than 16 years of age may be on a fishing vessel without registering as a commercial fisher, whether they are engaged in a fishing activity or not.

Individuals over the age of 16 may also be on the fishing vessel; however, if they are engaged in fishing, they must register as a commercial fisher.

An individual of any age, who is not engaged in commercial fishing, does not need to register to be onboard the vessel, and is not considered as crew.

What information is needed for crew members who are less than 16?

For individuals less than 16 years of age who are fishing onboard the fishing vessel, they should be included in the crew registry, noting instead of a fisher registration or certificate number that they are less than 16 years of age.

Why is a crew registry needed for all inshore Independent Core licence holders?

As an inshore Independent Core licence holder, it has always been important that you were independent and making all of your own enterprise decisions.

Industry has long advocated for the Owner-Operator and Fleet Separation policies to be enshrined in regulations, and now they are.

When inshore commercial licence holders are in control of their operations, they benefit from the fishing licence issued to them and the sales of the fish.

As an owner operator who is an Independent Core licence holder, one of the licence privileges is your choice to use a catch-share arrangement which determines how you pay your crew members. However, at the same time, the use of the catch-share arrangements means that you are transferring some of the benefits you have as a licence holder. To allow for you to continue to operate your enterprise independently, the regulations allow for the continued use of a catch-share as an allowable exception. The crew registry is a requirement to allow for this exception. In the future, if we should need to confirm your independence (your regulatory compliance), we may ask to review your crew registry to confirm the members of your crew (i.e., those who shared in the catch-share arrangement).

The new regulations reaffirm the importance of you being an independent business person.

Use and benefits of an inshore licence

Under the inshore regulations, the licence holder cannot transfer the use of the licence or the control that the licence holder has over the decisions related to that licence.

When an inshore licence is issued, the licence holder can:

Participate in the fishery
Benefit from the catch

sales of the fish
how sales of the fish are shared with the crew

Make all decisions related to the fishing operations of the enterprise:

where, when and how to fish
who is on the crew
where the catch is landed

The licence holder may also:

Participate in key decisions about the use of the licence
Request a licence renewal or licence re-issuance to another eligible person
Request a substitute operator as per DFO policies and procedures
Request the transfer of quota or gear to another eligible licence holder

The Minister of Fisheries and Oceans maintains absolute discretion over licensing.

If a fish harvester is denied a licence will there be a transition period during which he can still fish in 2021?

No.

Information for fishing companies

If the licence is issued in the name of a wholly owned company, the owner of the company must:

Own and control 100% of the shares of the fishing company
If applicable, declare that they are compliant with the inshore regulations before paying the licence fees.

If the company is an inshore family fishing corporation and has both voting and non-voting shares:

The licence holder must maintain control over the use of the licence and all decisions regarding the use of the licence at all times
The licence holder and owner of the fishing company must maintain 100% of the voting shares, and be the sole director
Non-voting shareholders, if any, must only be immediate family members

If the company pays dividends, these must only be paid to immediate family members.

If the company has a family trust under it:

The licence holder and owner of the fishing company must be the trustee
The beneficiaries must all be immediate family members

Immediate family members include:

Wife, husband or common-law spouse of the licence holder
Parents, grandparents, brothers, sisters, children, grandchildren, great-grandchildren (descendants) of the licence holder or the licence holder’s spouse
Common-law partners or spouses of the licence holder’s children or children of the licence holder’s spouse

Immediate family members do not include:

Aunts or uncles
Nieces or nephews
Cousins

For those who are primarily family-owned fishing businesses, but do not meet all of the new regulatory criteria, for fishing in 2021, what will DFO's approach be?

If the licence holder does not meet the requirements of the regulations, you will not be issued the licence.

Declaration: Confirming compliance

A licence holder must confirm that they are compliant with the inshore regulations before paying the licence fees. The National Online Licensing System (NOLS) contains a new, electronic declaration to replace the paper process used in the past.

When the licence holder or their NOLS representative go to pay annual licence fees, the declaration form will appear. By clicking the box at the bottom:

the licence holder is declaring that they understand the inshore regulations and are compliant with them (i.e., that they will maintain the use and control of licence decisions)
the NOLS representative is declaring that the licence holder has declared that they are compliant with the inshore regulations

You can only pay the licence fees once the declaration box has been checked.

Please note: It is an offence under the Fisheries Act to make a false or misleading statement in an application for a licence. DFO licensing staff and fishery officers have the authority under the Fishery (General) Regulations to ask the licence applicant for more information to confirm that the licence holder is eligible.

Why do I have to make a declaration?

As of April 1, 2021, applying to obtain a commercial licence under the Atlantic Fishery Regulations, 1985 and Maritime Provinces Fishery Regulations (either new or previously held) is subject to new eligibility criteria and prohibitions respecting the use and control of the rights and privileges conferred under the licence to fish.

The Regulations are intended to help ensure that all licence holders abide by the amendments, thereby maintaining a level playing field in the fishery and reducing the risk that the social, economic, and cultural benefits associated with independently owned businesses are diverted away from licence holders.

By establishing licence eligibility criteria and clear rules of conduct subject to enforcement action under the Fisheries Act, these amendments aim to address practices that threaten to undermine licensing decisions made by the Minister. This will allow the Minister to continue to licence inshore and coastal fisheries in a manner that fulfills social, economic, and cultural objectives, and to protect the independence and prosperity of small coastal communities.

The new electronic Declaration of Inshore Regulations Compliance replaces the paper declaration of policy compliance that Independent Core licence holders were required sign.

What if I’m a NOLS Representative – what does the declaration mean for me?

The new electronic Declaration of Inshore Regulations Compliance is a requirement prior to the Minster being able to issue a licence under the Atlantic Fishery Regulations, 1985 and Maritime Provinces Fishery Regulations.

For NOLS Representatives, this means that you are declaring that the licence holder for whom you are completing the licence application, Declaration and licence fee payment, has declared to you that they are compliant with the regulations associated with that licence.

What if I’m not compliant at the time I go to pay the licence fees?

Under the new regulations, the Minister of Fisheries and Oceans cannot issue inshore licences to applicants who have not retained the use and control of the rights or privileges conferred under the licence.

How does the declaration work/when does it come up?

The National On-line Licensing System (NOLS) now contains a new, electronic Declaration for you to do this instead of the paper process we used before.

The Declaration will pop up when you or your NOLS representative go to pay the licence fees. You will need to read it, check the box at the bottom to tell us that you understand the regulations and are compliant with them, and then, proceed to pay the licence fees.

If you have a NOLS representative, they will need to understand what the new regulations mean and confirm that you also understand them (and are compliant with them) before they check the box at the bottom of the Declaration and proceed to pay the licence fees.

You (or your NOLS representative) can only proceed to ‘Pay Now’ once you’ve agreed that you understand the regulations and have confirmed that you are compliant with them.

If you can’t agree or have some concerns about the new Declaration (or you want to check first that you’re compliant with the regulations), you can contact the DFO licensing team.

Allowable transfers

A licence holder is allowed to:

Request that DFO authorize a Substitute Operator, as per DFO policies and procedures
Have a crew-share agreement with people fishing aboard the vessel

Crew registry requirements

Use the licence as collateral in a loan agreement

Notice and Acknowledgement System

Transfer the benefits of the licence to an inshore family fishing company in which the licence holder has 100% control over the voting shares

In situations of bankruptcy or death or incapacitation of the licence holder, a re-issuance may also be requested.

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