Strengthening the Inshore Regulations – Engagement video series: Introduction

Slide 1 - Strengthening the Inshore Regulations

Introduction

Slide 2 - Context

Today we will be discussing the “Inshore Regulations”

The Inshore Regulations are rules that determine:

• Who can be issued a licence
• What is required of licence holders, and
• What is prohibited

They have been in full effect since April 1, 2021.

DFO is reviewing these rules to understand how they are working and if they can be improved.

DFO is asking for your feedback as part of this review.

Slide 3 - What are the Inshore Regulations

The Inshore Regulations put over 40 years of DFO policies into law.

The policy elements that are included in the inshore regulations (in order of the date which they were put in place) are:

• The Fleet Separation Policy – which restricted the processing sector from being issued or holding inshore licences.
• The Owner Operator Policy – which required inshore licence holders to personally undertake the activities under the licence.
• The Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries Policy (otherwise known as PIIFCAF) which prohibited agreements where someone other than the licence holder used or controlled the licence, specifically around reissuance.
• And lastly, the Issuing Licences to Companies Policy which allowed inshore licences to be issued to a company where the independent core licence holder holds one hundred per cent of the voting and non-voting shares.

Slide 4 - What do the Inshore Regulations do

They clarify who can hold a licence, who must do the fishing, and who controls fishing decisions.

They were made to ensure licence holders own, operate, and control their enterprises.

They prevent unauthorized control by others, support independent owner operators, and keep benefits in local communities.

Slide 5 - How does DFO apply the regulations

Once issued a licence, licence holders cannot transfer the use and control of the rights and privileges under the licence.

But sometimes, agreements are put in place that can make it hard to see if a transfer has occurred.

The most common types of agreements seen by DFO are:

• Loans
• Security and guarantee agreements (licence is used as collateral)
• Supply (fish)
• Vessel leases (boats)

Slide 6 - How does DFO apply the regulations

When an application to transfer a licence is submitted from an existing licence holder to another individual, the following steps are taken:

• First, DFO checks whether the recipient (the one looking to receive the licence) is allowed to have it under the rules (which means they have met all eligibility criteria). – this includes things like residency, sea time, and any necessary training.
• Then, DFO requests copies of all agreements from the recipient for review. – this includes the licence application but usually also includes any lending, vessel, supply or other agreements.
• Lastly, DFO evaluates whether all requirements are met and makes its decision. – DFO determines whether the recipient abides by all the rules and would be independent if the licence was issued.

Slide 7 - What is DFO looking for when reviewing the agreements

DFO looks for:

• Who makes the decisions
• Who controls the licence in practice
• Whether someone other than the licence holder has control or influence
• Whether independence is limited (through any written or unwritten agreements), and
• Who receives the benefits

Slide 8 - How does DFO enforce the regulations

When a transfer of rights and privileges requires follow up enforcement by DFO’s conservation and protection program (C&P), the following steps are taken:

• Information Intake
  • The process begins with gathering information from multiple sources, including from Licensing, information provided by members of the public, and directly by Conservation and Protection officers.”
  • At this stage, the focus is on ensuring all relevant information is captured and recorded for further review.
• Information Review and Assessment
  • Once information is received, it is carefully reviewed and assessed to determine whether follow-up action is required.
  • If follow-up is needed, C&P then determines the most appropriate response—either a compliance verification activity or a more formal investigation
• Investigations
  • An Investigation's scope and complexity can vary.
  • When sufficient evidence is gathered, investigators prepare Reports to Crown Counsel along with full disclosure packages.
  • Any decision to proceed to court requires charge approval from the Public Prosecution Service of Canada.

Slide 9 - How does DFO apply the regulations

Now that we’ve covered how the regulations can be applied by both Licensing and Conservation and Protection, it’s important to highlight that there are differences in the amount of complexity and effort it takes for the different functions to achieve results.

The actions available to licensing, can be more impactful because they can be done quickly. However, the consequences of administrative actions are directed only towards licence holders.

The actions available to C&P can also be impactful but they are also more complex, which means they can take more time. The level of proof needed for a prosecution requires significant casework and investigation. While the consequences are primarily focused on third parties who are using and controlling a licence holder, the outcome is not always certain, meaning there are instances where no prosecution is achieved even after all the time and effort.

As you’ll also see on this slide, the point of transfer – which we’ll discuss in the next presentation – is not black or white, instead there are many places along the line where transfer could occur.

Finding exactly when and how is not always clear.

Slide 10 - What is the Comprehensive Review of the Inshore Regulations

The Comprehensive Review is evaluating the performance of the Inshore Regulations in meeting DFO’s objectives.

The review is taking place from February to September 2026.

The focus of the comprehensive review is to seek inshore stakeholder views on:

• Any general concerns you may have
• The main challenges you have experienced with the current implementation of the Inshore Regulations and the benefits you see of having strong rules
• Possible opportunities for improving the regulations; and
• Anything else you think is important to include in the review

Once the review is complete, regulatory amendments may be pursued.

Slide 11 - What has DFO heard so far

So far, four key topics have emerged for further discussion:

• Understanding Use, Control, and Transfer
• Using Money to Control a Licence
• Intergenerational Transfers
• Licence Holder Education and Obligations

In the presentations that follow, we will provide an overview of each issue, go over the identified concerns, and then discuss some ideas for the types of actions that could be pursued.

Slide 12 - Sharing other views

You may also have other ideas. Or, maybe you think more clarity could be brought to some of the issues that are already identified.

We want to better understand how the regulations impact your day to day business.

The more views you can provide us with, the better positioned DFO will be in developing options that reflect industry perspectives.

Slide 13 - Thank you