Fisheries Act Section 10: National policy for allocating fish for financing purposes

Table of Contents

1.0 Introduction

Fisheries and Oceans Canada (DFO) is committed to building and strengthening collaborative relationships with stakeholders and Indigenous groups in support of sustainable and economically viable marine and fisheries sectors. In order to accomplish this, several mechanisms are available for DFO to collaborate with stakeholders and Indigenous groups to help achieve our mandate, priorities and objectives.

On June 29, 2012, the Jobs, Growth and Long-term Prosperity Act received Royal Assent. Contained therein was a provision that amended the Fisheries Act, granting the Minister the authority to allocate fish or fishing gear/equipment for the purpose of financing scientific or fisheries management activities (section 10), commonly referred to as “use of fish”, through a joint project agreement (known as a collaborative agreement). With the authority under section 10, the Department, stakeholders and Indigenous groups now have an additional tool to partner in the sustainable management of this important resource for the benefit of all Canadians.

2.0 Scope

The scope of this policy is national and it applies to all commercial, recreational, and Indigenous fisheries licensed and/or managed by DFO under the Fisheries Act. Section 10 of the Fisheries Actprovides the Minister with the authority to allocate fish or fishing gear/equipment for the purpose of financing collaborative science or fisheries management activities that contribute to the proper management and control of the fisheries and the conservation and protection of fish. These activities are described through a collaborative agreement (i.e., a joint project agreement under section 10 of the Fisheries Act) that the Department has entered into with a partner. The Fisheries Actis worded as follows:

FISH ALLOCATION FOR FINANCING PURPOSES

Allocation of Fish

10. (1) For the proper management and control of fisheries and the conservation and protection of fish, the Minister may determine a quantity of fish or of fishing gear and equipment that may be allocated for the purpose of financing scientific and fisheries management activities that are described in a joint project agreement entered into with any person or body, or any federal or provincial minister, department or agency.

Quantity in licence

10.(2) The Minister may specify, in a licence issued under this Act, a quantity of fish or of fishing gear and equipment allocated for the purpose of financing those activities.

3.0 Purpose

The purpose of this policy is to define standardized, rigorous, and transparent criteria and processes when using fish or fishing gear/equipment to finance activities, and to ensure clear and consistent application of section 10 of the Fisheries Act.

4.0 Stakeholder support

Stakeholder support is required for both the project and the allocation being set aside under section 10 for every collaborative agreement the Department enters into under this policy. For the purpose of this policy, stakeholder support is considered to be the support of a significant majority of those directly affected by the allocation decision (harvesters or their representative organizations) whose cumulative share of the resource amounts to 2/3 or 66 percent of the TAC for share based fisheries; or, 66 percent of harvesters participating in the fishery in an input based fishery that will be affected by the allocation of fish or fishing gear / equipment.

The onus will be on the project proponent to obtain and demonstrate to DFO through adequate mechanisms that stakeholder support has been obtained. However, this will not relieve the Department from consulting with Indigenous groups, where necessary or required.

5.0 Eligibility

The Minister of Fisheries and Oceans has the authority to set the TAC for Canadian fisheries in support of the proper management and control of fisheries and the conservation and protection of fish. Section 10 of the Fisheries Act provides the Minister with the ability to allocate some of this fish to help finance certain joint activities with stakeholders and Indigenous groups.

Although the Minister can enter into a collaborative agreement pertaining to scientific or fisheries management activities with any person or body, or any federal or provincial minister, department, or agency, eligibility criteria will help guide DFO in determining:

  1. The persons or entities eligible to propose projects and enter into a collaborative agreement with DFO;
  2. The types of projects that can be funded using an allocation of fish or fishing gear/equipment; and,
  3. The persons or entities eligible to receive an allocation of fish or fishing gear/equipment to finance collaborative agreements with DFO.

5.1 Participant eligibility

DFO will consider entering into collaborative agreements pertaining to scientific or fisheries management activities with any person or body, or any federal or provincial minister, department or agency. However, these collaborative agreements must include a representative that is:

  1. A licensed harvester, which includes commercial, recreational, and Indigenous harvesters in a fishery where a project is proposed, or those that receive an allocation of fish or fishing gear/equipment; or,
  2. A harvesters’ organization representing licensed harvesters referred to in (a); or,
  3. Any other legal entity that will represent the interests of the harvesters involved in the fishery for which the activity will be proposed.

5.2 Project eligibility

Eligible recipients of an allocation of fish or fishing gear / equipment under section 10 are limited to harvesters or legal organizations who hold a licence in the fishery where the project is taking place (except under 9.4) and who are not prohibited to sell fish.

For example, a participant in a collaborative agreement not entitled to sell fish would have to recommend to the Department an eligible recipient for the section 10 allocation as referred to in the first paragraph.

5.3 Allocation eligibility (i.e. recipients of fish or fishing gear/equipment)

DFO will consider funding activities through an allocation of fish or fishing gear/equipment that:

  1. Contribute to the proper management and control of a fishery, including the conservation and protection of fish;
  2. Do not compromise the conservation of the resource;
  3. Do not impact food, social and ceremonial (FSC) fisheries (except under section 9.3), fish allocated under comprehensive land claims agreements, and international sharing agreements (except under 9.1(b));
  4. Are consistent with current sharing arrangements, where established;
  5. Include a true contribution (defined in section 7.1) proposed by all parties entering into the collaborative agreement;
  6. Are consistent with the DFO’s mandate and support an element of DFO’s Departmental results framework (DRF);
  7. Are supported (both the allocation and the project proposal) by a significant majority (defined in section 4.0) of harvesters or their representative organizations who are directly affected by the allocation decision in that fishery.

6.0 Process for project proposals

Wherever possible, project proposals should be raised by the proponent at the relevant advisory committee meeting. In other instances, project proposals would only be considered if they are brought forward within a reasonable amount of time prior to the proposed start date of the fishery to allow DFO to assess proposals and consult with Indigenous groups, where required.

7.0 Collaborative project costs

7.1 True contributions

A collaborative agreement is the required mechanism to partner with someone under section 10 of the Fisheries Act. Due to the collaborative nature of these agreements, all parties who are signatories to the collaborative agreement must demonstrate that they are contributing something from their own resources, either as an in-kind contribution and/or a cash contribution that is not going to be considered a recoverable expenditure through the allocation of fish or fishing gear/equipment used to finance the project. This is what is known as a true contribution.

Collaborative agreements must define the true contribution(s) included in the project and should be of comparable value between all parties. As well, collaborative agreements should include the sharing of authority and responsibilities; resources (time of personnel working on the project or supporting the project in some capacity, funding, and expertise); benefits; and overall risk of the project.

An in-kind contribution is considered anything contributed to a project that is not cash or an allocation of fish, but can be quantified in some way (for example, time of personnel working on or supporting the project in some capacity). The quantity of fish or fishing gear / equipment set aside by the Minister under the authority of section 10 cannot be considered an in-kind contribution from either the Department or the proponent since at the time the allocation of fish or fishing gear / equipment is set aside by the Minister, the fish is still a common property resource that belongs to the people of Canada.

A cash contribution towards a project that is intended to be a true contribution in the collaborative agreement cannot be recovered as an expense through the allocation of fish or fishing gear/equipment.

7.2 Eligible costs

Eligible costs that can be recovered under a collaborative agreement through an allocation of fish or fishing gear/equipment are the incremental and direct costs of activities clearly linked to the project (which may include its development, administration, and implementation). Other costs that are not explicitly referenced in departmental policies and rules regarding collaborative agreements, but are clearly linked to the activity, may be examined on a case-by-case basis and included if the agreement of all signatories has been received.

7.3 Ineligible costs

Fixed and overhead costs that are not associated with the planning, oversight, or conducting of the activity are ineligible to be recovered through a collaborative agreement.

See annex A for examples of eligible and ineligible costs in a collaborative agreement.

8.0 Determining the amount of fish

When determining an amount of fish or fishing gear/equipment required to finance an activity under section 10, the Minister will be held to the same standard of accountability and efficiency as would be the case if allocating public funds directly.

Keeping this and the collaborative nature of section 10 in mind, proponents will need to determine the minimum amount of fish or fishing gear/equipment that is required to cover the cost of the activity, and provide DFO with this amount for consideration by the Minister when making allocation decisions for that fishery. Having the ‘significant majority’ support by those affected by the allocation decision (as defined in section 4.0) will be required for the amount of fish or fishing gear/equipment proposed. The amount of fish or fishing gear/equipment allocated should be within the range of fair market value as considered by industry and be reasonably expected to generate sufficient funds to securely finance the specified activity over the timeframe of the collaborative agreement. It should consider the full revenue from selling the fish and the costs of catching and landing the fish. Estimated revenue and cost may be adjusted in the collaborative agreement to account for uncertainty around fluctuating economic factors, such as landing prices and operational costs.

9.0 Allocation of fish or fishing gear/equipment

The following considerations will guide the Minister when setting aside an allocation of fish or fishing gear / equipment to finance scientific or fisheries management activities under section 10. Allocation decisions under section 10 of the Fisheries Actwill be made by the Minister or delegated authority for that fishery as it relates to decisions on TAC or level of effort.

9.1 Total allowable catch (TAC) based fisheries

In the context of TAC based fisheries, fish will typically be coming from the existing Canadian TAC, with those affected by the allocation decision being determined by whether the activity will be for the benefit of all those in the affected fishery. The following rules apply:

  1. An allocation of fish will typically be taken off the top of the Canadian TAC of the fishery associated with the project, after deducting what is required for existing FSC fisheries.
  2. Taking fish off the internationally set TAC can be considered with the concurrence of the responsible international body that recommends the TAC.
  3. Where an activity is proposed by a sub-group of harvesters within a larger fishing area, the allocation can be taken off the sub-group’s share of the quota only (2/3 support of the sub-group is required).

9.2 Input controlled fisheries

In the context of input controlled fisheries, such as lobster, the allocation used to generate the financial support for the activity would typically come from existing effort in any given fishery.

9.3 Treaty and Indigenous rights

Where the allocation decision has the possibility of affecting established or potential Indigenous or treaty rights the following process will apply:

  1. The Department will maintain the honour of the Crown, and proper consultation with the affected Indigenous groups will occur;
  2. If applicable, relevant provisions of any land claims agreements will be taken into account before making the allocation decision.

9.4 Allocation of fish to fund an activity in a different fishery

Strong support from harvesters in the affected fishery will be required for the Minister to set aside a quantity of fish or fishing gear/equipment to finance an activity aimed at a fishery for another species.

For the purpose of this policy, strong support should be aiming for consensus from those who are affected by the allocation of fish or fishing gear/equipment used to finance the activity.

10.0 Licensing

The allocation of fish or fishing gear/equipment will be provided through a fishing licence. The actual licensing mechanism to allocate the fish or fishing gear/equipment may vary and will be determined based on the specifics of the activity, such as when the fishing activity will occur, and current regulations in place (e.g., commercial fishing licence, section 52 of the Fishery (General) Regulations scientific licence).

Other relevant fisheries licensing policies and rules continue to apply in the application of section 10.

11.0 Collaborative agreements

Collaborative agreements are required for section 10 activities financed using an allocation of fish or fishing gear/equipment and should be drafted using the cost sharing agreement or specific purpose account templates which can be found in annex B.

Collaborative agreements may be developed for a period longer than one year, with preference being given to those that are in-line with the multi-year management and assessment decisions associated with the particular fishery.

In order to ensure a rigorous and transparent process, throughout the term of the collaborative agreement, and for six (6) years after expiration or termination of the agreement, the parties shall maintain accounting records related to: in the case of DFO, recoverable project expenditures; and, in the case of the proponent, fish allocation contributions. Either party will, on demand, permit the other party or any person that it may designate, to audit, monitor, take copies and extracts from and examine the accounting records and supporting documentation, and will provide all necessary access and assistance for the audits.

12.0 Data collection

The fishing activity associated with a section 10 allocation is subject to the same data collection provisions as normally applied to the fishery via conditions of licence and/or specified in the collaborative agreement. Specific rules with respect to the collection and transmission of data from the activity to DFO may be outlined through the conditions of licence for the fishery, if required.

Annex A: eligible and ineligible costs

Below is a list of eligible and ineligible costs that can be referenced when calculating the cost of the activity. Other examples not specifically noted below will be evaluated on a case-by-case basis.

For the collaborator:

Eligible costs Ineligible costs
Vessel contract for the project Overhead costs such as the collaborator’s office staff not working directly on the project, heat and hydro of the association’s office, rent for properties, fixed fees, etc.
Vessel fuel (incremental; only the cost of fuel related to the cost of catching the allocation of fish or fishing gear/equipment, as well as the cost of conducting the activity) -
Ship’s crew salary and related costs for the sea days needed to conduct the activity -
Sea going technician / fisheries observers -
Project related training -
Gear, equipment, material or supplies specific to the project (nets, sensors, bait, traps, ropes, buoys, etc.) -
Participation costs for fieldwork and meetings specific to the survey (travel, meal, logistics, materials, etc.) -
Organization’s incremental costs directly related to the project (project administration, material and supplies, fees, etc.) -
Consultant contracts specific to the project -

 

For DFO:

Eligible expenses Ineligible expenses
Equipment, materials or supplies specific to the project Costs charged by departmental internal services (Legal, Finance etc.) based on amount of project funding
Travel specific to the project Any other fixed costs not associated with conducting the project or that do not comply with departmental policies and rules regarding collaborative agreements
Consultant contracts specific to the project -
Salary and benefits of employees working directly on the project (including overtime) -

Annex B: Cost-sharing agreement template

If interested in accessing the Cost Sharing Agreement and Specific Purpose Account Templates , please send a request to DFO.section10-article10.MPO@dfo-mpo.gc.ca.