The Allocation of Commercial Fishing Rights within the Great Lakes

Evadne Liuson
June 1997 

Evadne Liuson, an honours student of Biology and Environmental Sciences at the University of Toronto, researched and wrote this paper to fulfill the requirements of the Professional Experience Course offered by the university’s Innis College.

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Most people associate Canada’s fishing industry with the fisheries of the East and West Coasts.  To do so, however, is to overlook one of the world’s largest freshwater fisheries: the fisheries of the Great Lakes.

When Europeans first discovered the Great Lakes basin in the 17th century, about half of the biomass of the lakes consisted of fish weighing more than 4.5 kilograms.[1]  Coureur des bois Pierre Radisson described the fishery resource of Lake Superior as consisting of “stores of fishes, sturgeons of vast bigness, and Pykes seven feet long.”[2]  Lake trout, whitefish, herring, muskellunge, northern pike, walleye, bass, and dozens of other high value species were found in plenty.  In fact, the fish in Lake Huron were so bountiful that they “fairly lifted each other out of the water.”[3]  In Lake Ontario, “salmon were so numerous in the late 18th century that women waded into the water to seine them with flannel petticoats.”[4]  Fishing did not begin on a large scale, however, until the 19th century.

Up to this time, the fisheries of the Great Lakes had been essentially subsistence in nature.  Fish were caught, primarily by the native Indians around the lakes, for the purpose of personal consumption.  With the advent of large-scale European settlement in the early 1800s, the scale of fishing increased dramatically. Markets began to emerge after about 1820, and by the 1850s commercial fishing on the Great Lakes was well established.  Fishing effort became more intensive as well as more effective.  On Lake Erie, the “social, economic, and technological developments were so rapid that the catches increased at an average rate of about 20 percent per year” over a span of 70 years.[5]  Between the years 1870 and 1900, the total landed value of Ontario’s fisheries averaged about $1.05 million dollars per year.[6]  The freshwater fishery of the Great Lakes was the largest in the world.

Seemingly inexhaustible, the resources of the Great Lakes began to show signs of depletion by the late 1800s. For the most part, over-fishing was deemed to be the culprit.  However, fish populations in the Great Lakes were increasingly being threatened by a host of other factors.  By 1900, for example, the once abundant Atlantic salmon had vanished from Lake Ontario.  Its disappearance was attributed not only to over-fishing but also to pollution and to damming of rivers and subsequent siltation of spawning grounds.  Later in the century, Lake Erie fish populations were devastated by the effects of eutrophication.  The walleye catch, which had averaged over three million kilograms a year in the 1940s, dropped to 148,602 kilograms in 1968.[7]  Mercury contamination prompted the closure of the Lake Erie commercial fishery for walleye in 1970.  In fact, in all the lakes, contamination by mercury, PCBs, and other toxic substances has resulted in temporary closures of fisheries and advisory warnings against high levels of fish consumption.

By the end of the 19th century, deforestation, fires, pollution of spawning areas by sawmills, damming of tributaries, and the conversion of coastal wetlands to agriculture or urban industrial uses had all shifted the ecological balance against the Great Lakes fisheries.  In the 1930s, a new threat arrived on the scene in the form of the parasitic sea lamprey.  This eel-like fish wreaked havoc on the lake trout and whitefish populations when it invaded. On Lake Superior, the proportion of lake trout and whitefish, which, in the 1880s, comprised virtually the entire commercial catch, had decreased to less than 10 percent by the 1960s.[8]  On Lake Huron, lake trout production by 1955 was 99 percent lower than the average commercial catch in the 1930s.[9]  The invasion of the sea lamprey virtually eliminated lake trout populations in the Great Lakes.

With the demise of the lake trout, fishermen turned their attention to the lake herring (also called the cisco).  A progressive “fishing-up” process was in effect.  Fishing-up describes the process in which commercial fishermen shift their emphasis from fish with high value to those with lower value because of declining catches of higher value fish.[10]  Populations of lake herring were over-fished.  The blue pike (also called the blue walleye), endemic to Lakes Erie and Ontario, was also fished to extinction.  Even the lake sturgeon, which was once so numerous that it was considered a pest, was a rare sight by 1900.

By the 1960s, the fisheries of the Great Lakes were on the verge of collapse.  Hundreds of commercial fishing operations had gone out of business.  The situation prompted action on the part of management agencies.  The development of lampricides in the late 1950s reduced sea lamprey numbers to only a tenth of what they once were.[11]  In the 1960s, the decision was made to introduce fast-growing Pacific salmonids (especially the Coho salmon) into the Great lakes to replace the lake trout and to control the populations of another exotic species, the alewife.  The Great Lakes Water Quality Agreement of 1972, a joint agreement between Canada and the United States, led to controls on pollution and phosphorus discharges to the lakes.  These and a variety of other management initiatives have since led to a rebounding of the fishery.  In fact, today the Great Lakes support a multibillion dollar fishing industry.[12]

The fishing industry of the Great Lakes is sustained by three types of activity: sport or recreational, Aboriginal, and commercial.  Economically, sport fishing is the  most important of the three.  Based on the number of sport fishing licences sold every year, there are about two million adult anglers in Ontario.[13]  Of these, over half are Ontario residents, while the rest come from the United States.[14]  It is estimated that approximately one third of Ontario residents fish the Great Lakes at some time or other during the course of a year.[15]

The main species of interest to sport fishers are small and largemouth bass, salmon, yellow perch, walleye, and trout.  Many of these fish, including the Pacific salmon, are planted in the lakes through hatcheries and various stocking programs.  The recreational fishery is largest on Lake Huron, and smallest on Lake Superior.  Every year sport fishers spend close to $4 billion on fishing equipment and supplies, boats, camping gear, cottages, lodging, transportation, and other activities directly related to fishing.[16]

Because of its economic importance, the sport fishing industry holds considerable political power.  On the Great Lakes, the industry is represented by the Ontario Federation of Anglers and Hunters.  The federation becomes involved in conflicts that arise between sport fishing interests and the interests of other user groups.  In the past, the greatest conflict has been between sport and commercial fishers.  Recently, however, conflict between sport and Aboriginal fishers has been more intense.

Aboriginal fisheries are found on all of the Canadian Great Lakes except Lake Erie.  There are two First Nations fisheries on Lake Ontario, two on Lake Huron, and five on Lake Superior.  In general, fishing by First Nations tends to be subsistence in nature; that is, the Indians fish for personal consumption and for other traditional purposes.  As part of a traditional ceremony, for example, the Mohawks of Tyendinaga First Nation on Lake Ontario spearfish approximately 7,000 walleye every year.[17]  Sport fishers object to spear fishing as a harvesting technique and feel it should be banned.

On the Great Lakes, there are about 100 Aboriginal fishers who are licensed to fish commercially.[18]  Aboriginal commercial fishing is concentrated around eastern Lake Superior and Lake Huron’s Bruce Peninsula.  Targeted fish species include lake whitefish, trout, and walleye.  However, fishing operations tend to be small in scale, and the aboriginal harvest makes up less than two percent of the total commercial harvest of Ontario.[19]

In contrast, non-Aboriginal commercial fishing on the Great Lakes is responsible for 95 percent of Ontario’s commercial fish harvest.[20]  In 1994, the commercial fish harvest in Ontario was 18.6 million kilograms and had a landed (i.e. unprocessed) value of $42 million.[21]  The value of processed fish shipments was about $200 million, mostly in exports to the United States, Japan, and Europe.  Yellow perch, walleye, lake whitefish, and rainbow smelt are the primary species of fish exported.  However, chub, lake herring, and trout are also important commercially in the Great Lakes.

Currently, there are over 500 commercial fishing licences issued on the lakes.[22]  Since a fisherman can hold multiple licences, however, this number does not reflect either the size or the number of existing fishing operations.  On Lake Ontario, for example, 160 licences have been issued, but there are only 40 to 50 commercial fishing operations.[23]  It is these fishing operations that have the greatest impact on fish populations within the lakes.

Able to support commercial, Aboriginal, and recreational fisheries, the Great Lakes fishery is clearly more robust now than it has been in the last few decades.  Still, fish communities are vastly different from what they once were.  Fish stocks have undergone a radical transformation in terms of size, age, species, numbers, and abundance.  In fact, it is estimated that over 10 percent of the 75 species that were once found in Lake Ontario have disappeared.[24]  The loss of some endemic species and the establishment of exotics has resulted in fish communities that are dominated by smaller, less valuable species such as the rainbow smelt and alewife.[25]  Moreover, these fish communities are structurally and functionally volatile.  They are far less stable and predictable than they were when species such as lake trout, walleye, burbot, and lake sturgeon predominated.[26]  The original success of the Great Lakes fishery was a result of the surplus of these large benthic, or bottom-dwelling, fish.  Today, however, the success of the fishery depends on effective resource management.

With different groups all vying for the same fragile resource, managing the Great Lakes fishery is no easy task.  The fishery is a classic example of the “commons” dilemma wherein too many users are seeking to use a limited good.[27]  For fisheries managers, therefore, the difficulty lies in accommodating the user while endeavoring to preserve the good.  They face the challenge of determining a sustainable level of harvest, equitably allocating it, and monitoring compliance with management systems. 

Fisheries Management Agencies

Within the Great Lakes, the challenge of fisheries management has been taken up by several agencies.  Currently, responsibility for the welfare of the Canadian Great Lakes fishery is shared between the government of Canada and two bi-national commissions.  It is worth noting, however, that, in an ongoing fight for recognition of existing treaty and Aboriginal rights, First Nations around the Great Lakes claim the right to full management of their traditional fisheries.[28]

The International Joint Commission

Created under the auspices of the Boundary Waters Treaty of 1909, the International Joint Commission (IJC) addresses issues of water quality.  The IJC has the authority to resolve any disputes over the use of water resources that cross the international boundary.  It also carries out studies and advises governments on various courses of action.  It was under the direction of the IJC that the Great Lakes Water Quality Agreement of 1972 was drawn up.  Amended in 1978 and again in 1987, this agreement commissions both parties to “restore and maintain the chemical, physical, and biological integrity of the water of the Great Lakes Basin Ecosystem.”[29]  Programs such as the Lakewide Management Plans and the Remedial Action Plans for Areas of Concern have been developed to do just that.  These programs play an important role in fisheries management, particularly in the protection and rehabilitation of fish habitat.

The Great Lakes Fishery Commission

The Great Lakes Fishery Commission (GLFC) was established in 1955.  Growing out of the joint Convention of the Great Lakes Fisheries, its initial mandate was to find a means to control the sea lamprey.  Today, the GLFC conducts its responsibilities through Canada’s  Department of Fisheries and Oceans (DFO) and the U.S. Fish and Wildlife Service.  It is comprised of eight commissioners (four appointed by each nation), and the balance of its program is carried out through a committee structure.  Funded bi-nationally, the GLFC typically has an annual budget of about $7 million, most of which is directed toward programs related to lamprey control.[30]

While the GLFC continues to develop measures and implement programs to control sea lamprey, it is also devoted to developing co-ordinated programs of research and management within the Great Lakes.  In 1981, for example, the Commission adopted the Joint Strategic Plan for Management of Great Lakes Fisheries.  This plan has helped agencies co-ordinate their management activities in order to protect, enhance, and restore the Great Lakes fisheries.  In the past, for example, the pollution control community within the Great Lakes basin, operating under the umbrella of the IJC, has worked largely separately from the fisheries management community operating under the umbrella of the GLFC.  Within the past several years, however, formal contacts between members of the two communities have begun to grow — a step toward an ecosystem approach to managing the Great Lakes.[31]

Department of Fisheries and Oceans

The Department of Fisheries and Oceans is the federal institution with primary responsibility over Canada’s fishery resources.  Created by the Government Organization Act in 1979, the DFO is currently in the process of streamlining its legislative and regulatory base.  The department is repealing statutes that are no longer relevant, and integrating provisions for those into the Fisheries Act.  The Great Lakes Fisheries Convention Act, for example, has been repealed.  However, this will not affect the role of the GLFC because any regulations to give effect to decisions of the Commission will be enacted under the Fisheries Act.[32]

Although the DFO coordinates policies and programs for both the marine and inland fisheries, management of the Great Lakes fishery is not directly under the authority of the DFO.  In fact, only a small part of the federal fisheries budget is devoted to Canada’s freshwater fisheries, and most of this is directed to controlling the sea lamprey in the Great lakes and to inspecting the quality of fish products.[33]

Ontario Ministry of Natural Resources

Although the federal government retains the ultimate responsibility for the Great Lakes fishery, the Ontario Ministry of Natural Resources (OMNR) is delegated as the regulatory agency.  As such, it plays the principal role in mediating conflicts, enforcing regulations, and maintaining balances between the different uses of the resource.  The OMNR is directed by a minister appointed by the premier.  However, on each lake, the day-to-day management responsibilities are carried out through a management unit. Typically each unit consists of a lake manager, liaison officers, conservation officers, compliance supervisors, biologists, technicians, and operations personnel.

In 1976, the OMNR developed the Strategic Plan for Ontario Fisheries (SPOF).  This plan provides a long-term approach to managing Ontario’s fisheries resources.  Revised in 1991, SPOF II advocates an ecosystem approach to fisheries management.  Initiatives such as the Community Fisheries Involvement Program have been developed under this plan.[34]

Fisheries Management Instruments

In response to concerns about over-fishing and declining fish stocks, fisheries managers of the Great Lakes are looking to control or reduce pressures on fish populations.  This has been accomplished most directly by regulating fishing activity within the Great Lakes.  Various instruments have been employed to this end.

Legislation

In Ontario, fishing is regulated by both federal and provincial laws.  Currently, these laws are undergoing extensive revisions in an effort to update, integrate, and consolidate.

Canada Fisheries Act

The Fisheries Act is the basic statute administered by the DFO.  It provides the legislative authority for management of fish and their habitats and sets out the rules for day-to-day conservation and management.  Matters such as fish allocation and licensing are governed by this act.  Enforced by fishery officers, the penalty for fishing offences against this act is a fine of up to $500,000, a prison term of up to 24 months, or both.  For destroying fish habitat, including placing harmful substances in the water, the penalty is a fine of up to $1,000,000 each day or imprisonment for up to three years, or both.[35]

Ontario Fishery Regulations

Enacted under the Federal Fisheries Act, the Ontario Fishery Regulations provide the legislation for controlling commercial fishing operations through the establishment of open and closed seasons, size limits, quotas, gear restrictions, and the delineation of fishing areas.[36]  In 1989, these regulations were extensively revised.  Some restrictions that used to be embodied in regulations now appear as conditions on commercial fishing licences.[37]  Pursuant to section 79 (1) of the Fisheries Act, a contravention of any regulation is a summary conviction offence punishable by a fine not exceeding $5,000, or by imprisonment for a term not exceeding twelve months, or by both.[38]

The Game and Fish Act

Ontario’s Game and Fish Act deals with licensing.  It specifies, for example, that a licence is required for all commercial fishers.  A sport fishing licence is required for anglers between the ages of 18 and 64 inclusive who are residents of Ontario and for non-resident anglers who are 18 years of age or older.[39]  “Game fish” such as brown trout and rainbow trout are also designated under this Act.  The Game and Fish Act is enforced by conservation officers and deputy conservation officers who operate random “Fish Check Stations” throughout the year.

Aboriginal Communal Fishing Licences Regulations

First authorized under the Fisheries Act in June, 1993, the Aboriginal Communal Fishing Licences Regulations (ACFLR) originally applied only to federally managed fisheries.[40]  The following year, however, they were amended to extend to Ontario fisheries.  The regulations provide communal fishing licences as a tool for the management of Aboriginal fisheries.  They require designation of any persons or vessels to fish under the licence, obligate the licence holder to report catches, and authorize the sale of fish harvested under the licence.[41]  With its attached allowable harvest, a communal fishing licence is issued to a band as a whole.  The allocation is then divided among the band members in any manner the band sees fit.  Some Aboriginal fishers may have access to commercial quota under ACFL as well as under a conventional commercial fishing licence.

Within the Great Lakes, the ACFLR are a source of conflict.  The OMNR feels that the licences permit the First Nations flexibility and are best suited to communal use while ensuring that the commercial fishery is regulated and fish stocks are protected.  In Lake Huron, the Ministry has been holding back a significant proportion of the allowable commercial harvest from non-Aboriginal fishers and re-allocated it to the Nawash and Saugeen First Nations through the communal licences.  This allocation is equivalent to about 540,000 kilograms of fish.[42]  Still, the bands consider the communal fishing licences an infringement on their Aboriginal and treaty rights.  In 1993, an Ontario court seemingly affirmed this when it declared a 1984 provincial communal licence unconstitutional.[43]  However, controversy over the regulations is ongoing.

Restrictions

A fishery may be regulated by two types of restrictions: input controls or output controls.[44]  Input controls limit fishermen’s ability to fish.  In this way, they indirectly protect the resource from over-exploitation.  Frequently employed in the past, input controls include restrictions on gear, seasonal restrictions, area closures, and size limits.  Output controls, on the other hand, limit the number of fish that fishermen can harvest.  In the Great Lakes, the fishery is managed by a combination of both input and output controls.

Licensing & Limited Entry

In the Great Lakes, non-Aboriginal fishers require licences in order to fish commercially or recreationally.  While Aboriginal fishermen’s rights generally exempt them from licensing requirements for traditional food fisheries, the Ontario government has taken the position that it should license Aboriginal commercial fisheries.[45]

Licences describe the exact privileges to be granted to the fishermen.  A commercial fishing licence, for example, consists of a four-piece form which includes the original licence and three appendices.  Appendix A of the licence specifies those persons who will be designated as co-fishers as well as all of the vessels that will be used to work the licence.  Appendix B details the conditions governing the licence such as when and where fishing can occur and the type of gear that may be used.  Appendix C lists the species of fish in the quantities that they may be caught.  Anglers are similarly limited by daily catch and possession limits, gear restrictions, and area and seasonal closures.

Depending on the terms of the licence and the residency of the purchaser, sport fishers are charged a fee in the range of $10 and $45.[46]  Commercial fishers, on the other hand, are charged a licence fee according to the quantities of fish that they may harvest.  A fee of $25 is charged for a licence with an attached quota of less than 6,700 kilograms, while $100 is charged for a licence with a higher quota.[47]  A licence holder is further required to pay to the Crown a royalty of two percent of the landed value of his harvest.  The Ontario Commercial Royalty System was introduced in January 1995 and presently generates about $800,000 annually.[48]  All fees and royalty payments go into a designated Special Purpose Account which is dedicated to fish and wildlife management.

While entry to the sport fishery is open to all anglers, the OMNR issues only a limited number of commercial licences on the Great Lakes every year in order to prevent over-capacity and resource depletion.  One hundred and sixty licences are issued on Lake Ontario, 181 on Lake Erie, 99 on Lake Huron, and 65 on Lake Superior.[49]  New licences are only issued in areas where unused stocks of fish are available.  On Lake Erie, for example, no new licences have been created since 1984.[50]  For anyone wanting to enter the commercial fishing business, therefore, his only option is to buy an existing licence from a retiring fisherman.  Thus, limited entry is a strategy used to restrict the number of commercial fishers on the lakes.  Licensing requirements and licence fees act as sub-strategies, further restricting entry to the fishery.[51]

Gear Restrictions & Size Limits

Restrictions on gear are generally intended to ensure that only fish of a certain size (and age) are caught.  Typically, they include setting a maximum size limit on fish hooks and a minimum size limit on net meshes.  Mesh regulations are an important strategy in allowing juvenile fish stocks to mature and become marketable.  In areas of Lake Erie around Pelee Island, for example, gill nets are restricted in the spring to protect spawning stocks of walleye.  Spawning stocks of yellow perch are similarly protected by a restriction on the size of gill nets that can be used from January 1 to May 15.[52]

Area & Seasonal Closures

Closed areas and seasons are often imposed in order to protect vulnerable fish stocks and for other conservation purposes.  However, they are also useful in reducing conflict between user groups.  In the Great Lakes, conflict between commercial and sport fishers has been minimized by separation of the users in space and time.  In general, priority has been given to sport fishers in areas and times of the year when recreational demand is high.  The creation of the “Georgian Bay line” in 1913, for example, excluded commercial fishermen from operating in the nearshore waters of Lake Huron’s eastern Georgian Bay.[53]  More recently, in the Port Colborne/Fort Erie area of Lake Erie where there is competition between anglers and commercial fishermen during the summer months, “no gill net” zones have been set along the lakeshore.[54]

Although input controls may be useful in minimizing conflict between user-groups, they have been criticized for requiring too much government regulation (and intervention) and for being expensive to enforce.[55]  With output controls, on the other hand, “there is no longer a need for [the DFO] to over-regulate fishing inputs in an attempt to limit the catch.”[56]  Output controls provide a more direct means of protecting fish stocks.

Recreational Restrictions on Commercial Fishing[57]

Non-aboriginal commerical fishing is limited by recreational allocations in a number of ways.  First, some species are harvested by both anglers and commercial fishers.  For this reason commercial quotas may be held below what is estimated as the safe harvest level to distribute part of the allocation to recreational fishing.

Second, some species are essentially designated as “game fish species” that are reserved for anglers and cannot be harvested commercially.  Rainbow trout, brook trout, and chinook salmon are examples of species that commercial fishers are not provided a quota for and therefore cannot harvest.

Finally, as noted in Area & Seasonal Closures, commercial fishers are prohibited to fish where anglers find it favourable for recreational fishing in effort to maintain good recreational fishing in the area.  Additionally, it should be noted that while recreational fishing is not managed through a quota system, the recreational harvest, itself, is controlled by way of creel limits, possession limits, seasons and sanctuaries, and gear restrictions.[58]

Individual Transferable Quotas

The individual transferable quota (ITQ) is an example of an output control.  It is defined as an exact allocation of a number of kilograms (or pounds) of a specific species of fish.[59]  This allocation is attached to a commercial fishing licence, giving the fisherman a right to harvest and sell the specified quantity of fish.  Licence holders can transfer quotas from one commercial licence to another within a quota area, through sale or lease.[60]

Beginning in 1976, ITQs were introduced in Lake Erie as harvest controls on lake trout and walleye.[61]  (Actually, as early as 1960, there was a smelt quota of 20 tons per week per boat, but this quota was never enforced and remained largely ineffective as a control mechanism).[62]  ITQs did not come into widespread use on the rest of the Great Lakes until 1984.

The Quota Program

The quota program was implemented in the Great Lakes as part of a comprehensive management initiative aimed at “modernizing” the commercial fishery in Ontario.  The rationale for this initiative was stated in a 1982 report by the Committee on Modernizing Ontario’s Commercial Fishery.[63]  The report emphasized that fisheries should no longer be treated as an open-access, common resource:

In an open, free-for-all fishery, competing fishermen try to catch all the fish available to them, regardless of the consequences.  Unless they are checked, the usual consequence is a collapse of the fishery; that is, resource extinction in the commercial sense, repeating in a fishery context “the tragedy of the commons.”[64]

While entry to the Great Lakes fishery was not completely open or free-for-all, limited entry licensing alone did little to prevent overfishing.  It restricted the number of fishers, but it did not limit their harvest.  It was therefore about as effective as open-access in protecting the fishery.  In fact, it was in response to serious problems of overexploitation of smelt and perch populations in Lake Erie that the quota system was introduced.

By providing fishers with a “quasi-property right” to a specific amount of the resource, ITQs, the committee believed, would move toward privatizing what was previously common to all.  They would give fishers ownership over a sort of “swimming inventory.”[65]  With a stake in the fishery, fishers would develop greater concerns for the conservation and management of fish stocks.  At the same time, the concern over racing to secure a share of the catch would be eliminated.  Fishing effort could be spread over the entire season, enabling fishermen to adjust the nature, timing, and scale of their operations to take advantage of market conditions and produce a more profitable harvest.

Hailed as a more rational approach to harvesting fish, today the quota program regulates the commercially preferable species of the Great Lakes.  Yellow perch, smelt, walleye, lake herring, trout, and whitefish are subject to quotas in most, if not all, of the lakes.  Management of these commercial fish species involves two fundamental processes.  The first is quota setting and addresses the problem of conservation: deciding what amount of fish can be harvested on a sustainable basis.  The second is quota allocation: deciding who benefits, in what ways, and to what extent.[66]

Quota Setting

For each commercial fish species, quotas are set as a percentage of the total allowable catch (TAC).  Once the TAC is set for the year, this percentage translates into a fixed amount.  The idea behind quotas is that they represent a biologically-based limit on the harvest of fish.  The TAC is meant to approximate the maximum sustainable yield (that is, the maximum harvest that can be obtained from year to year without depleting the resource[67]) of the fishery.  Calculating this yield, however, is a highly complex process that requires detailed data on fish populations.  Commercial fishers provide valuable sources of information by means of their Daily Catch Reports (DCRs), which require details on the amounts and species of fish harvested as well as the amounts of effort used to catch these fish.[68]  The OMNR gathers additional assessment data through commercial catch sampling, partnership index fishing, sport surveys, index trawling, and American fisheries agencies.

In order to ensure that the TAC is based on the best biological information available, the OMNR issues commercial fishing quotas in two parts.  The following is an outline of the Quota Setting Process on Lake Erie;[69] the process is similar on the other Great Lakes.

Initial Quotas

Biological information that is used to calculate initial quotas is collected between August and October.  This data is analysed and, in November, meetings with the Program Committee, the Sport Fish Liaison Committee, and the Commercial Fish Liaison Committee are held to set initial quotas.  The Program Committee is composed of commercial fishers, sport fishing groups, fish processors, union members, and OMNR personnel.[70]  Initial quotas for walleye, yellow perch, and smelt are set at 50 percent of the previous year’s quota; initial quotas for whitefish, on the other hand, are set at 100 percent of the previous year’s quota. (On Lake Ontario, initial quotas range from 50 to 100 percent of the previous year’s level, based on preliminary stock assessment.[71]  Initial quotas on Lake Huron are simply calculated at 90 percent of the previous year’s final quota.[72]  On Lake Superior, initial quotas are set at 100 percent of the previous year’s final quota.[73])  The initial quotas are not meant to be an indication of final quotas.  They simply provide sufficient quantities of fish on new licences to allow fishers to begin fishing as soon as licences are issued on January 1.  Initial quotas are announced in December.

Lake Erie Committee Meeting

Ontario manages the Lake Erie fishery in co-operation with the four American states that border the lake and within the framework of the Lake Erie Committee (LEC) of the Great lakes Fishery Commission.  Within the committee are various task groups that work together to analyse data and prepare recommendations for total allowable catches.  These recommendations are presented in late March at a public meeting of the LEC and the five members of the LEC seek to reach a consensus on the total allowable catches for walleye and yellow perch, the two quota species shared by the Canadians and Americans.

Final Quotas

OMNR staff meet with the Program Committee and the two Liaison Committees to establish final quotas and the distribution of the quotas between the three quota areas on the lake.  Final quota recommendations are forwarded to the Minister of Natural Resources for review and approval.  While year-to-year variations in quota are usually within a 10 to 20 percent range, adjustments of up to 50 percent have been implemented to reflect dramatic changes in stocks.[74]  In 1992, for example, the commercial fishers of Lake Erie landed nine million kilograms of smelt.  Three years later smelt populations had dropped so drastically that the OMNR reduced their quotas to half that amount.[75]  Final quotas are usually announced by April or May.

By waiting until late spring to set the final quotas, the quota is based on the best available biological data.  Still, reliability of assessment data remains a concern.  In the Lake Huron commercial fishery, for example, ITQs were implemented during a period of relative stock abundance. Allocations, however, did not reflect available stocks. They had been calculated on the basis of lesser stocks.  Determination of the TAC therefore had been based on outdated or imprecise information.[76]  In this particular case, politics also influenced the allocation amounts.

In 1984, the Honorable Alan Pope, then Minister of Natural Resources, ordered that ITQs be implemented on an accelerated schedule.  His decision, made against the advice of senior fisheries managers, was a response to pressure from the sport fishing industry in Ontario’s north.[77]  In this area, tourism and recreation play an important economic role and sport fishers were demanding measures to ensure a stable sport fishery resource.  By explicitly allocating a portion of the fishery to the commercial fishing industry, the quota system satisfied this requirement.  As called for, ITQs were hastily implemented in Lake Huron, resulting in allocations that were based on inadequate stock assessment.  Political and economic considerations therefore are sometimes more influential in determining the TAC than biological ones.[78]

Quota Allocation

The first step in allocating the commercial fishery was to divide the Great Lakes into quota areas.  This was done in 1982, prior to the implementation of ITQs.  Each lake was divided into a series of zones according to various criteria including their ecological make up and the species of fish that they support.  On Lake Huron, for example, zones were based on: the lake’s three-basin morphology; a pre-existing grid system the ministry had been using as a basis for stock assessment; existing administrative units; fish stocks and habitat; and boundaries of traditional fishing areas.[79]  There are 17 quota areas on Lake Huron, 34 on Lake Superior, six on Lake Ontario, and only three on Lake Erie.

Once the lakes had been divided into quota areas, the annual TAC could be divided into area quotas.  Area quotas are assigned to quota areas every year after the TAC has been set.  Commercial fishers are then allocated a percentage of the area quota.  This percentage was determined back in 1984 and was based on a fisher’s past performance:  The average harvest by a licence holder (that is, the best three of the five years prior to 1984) was calculated by the OMNR and pro-rated against the TAC.  Thus, a fisher who had fished actively between 1979 and 1984 would have been allocated a larger quota than a fisher who had been less active.

When the OMNR first allocated quotas on the basis of past performance in 1984, many fishers received small shares because, for some reason, they had not been fishing actively over the previous five years.  For some fishers, chance factors such as illness, poor weather conditions, or weak market incentives for certain fish species contributed to their poor past performance.  Other fishers had been under-reporting their catches during the years used for calculation of the ITQs.  Still others had recently purchased their licences from other fishers who had only fished minimally during the critical period.[80]  Some fishers had even been restraining their fishing effort in order to give fish stocks a break.[81]  Whatever the reason, all of these fishers were essentially penalized for the way that they had decided to fish during those five years between 1979 and 1984.

Limited to small quotas, many of these fishers have since gone bankrupt, others have had to reduce their fishing operations from full to part-time, while others have been forced to sell their operations at a fraction of what they would have been worth if it were not for the attached quotas.[82]  Even for those fishers who can still afford to fish, the potential of their operations is limited by the size of their quotas.  Of course, they may expand their operations by purchasing or leasing unused quota from other commercial fishers, but such transfers depend on availability of quota within the quota area.

Those fishers who happened to benefit from the allocation formula, however, fought to retain their advantage.  Hence, past performance remains the basis for present day quota allocations.  Any annual increase or decrease in an area quota is divided proportionally among the licence holders using a “sharing formula.”  For example, if the TAC increases by 10 percent, this translates into a 10 percent quota increase for each licence holder.  Once allocated for the year, a quota normally does not change.

On Lake Ontario, however, quotas are prone to in-year changes.  The OMNR may award more quota to those fishers who have been very active in catching their quotas.  It has set aside additional quota for this purpose.  Commercial fishers on the lake are thus given an incentive to harvest their quotas.  In fact, if they do not catch their quotas, they may be reduced in the following year, and the unused quotas re-allocated.[83]  For example, if a fisherman harvests less than 20 percent of his quota without good reason (that is, market prices are up for his quota species and stocks are plentiful), he could lose some of his quota the following year.

Although re-allocation has only taken place on Lake Ontario, fishers on the other lakes still operate under the perception that if they do not use their quota, they will lose it.  A Lake Huron Southampton area fisher complained, “I’m fishing more now than before, because I don’t want to lose any quota.  I was doing OK before, but now I have to meet the quota figure.”[84]

Enforcement of Quotas

With the implementation of ITQs, fisheries managers had anticipated a reduction in the need for government regulation and enforcement.  The idea was that, with a stake in the fishery, commercial fishers, acting in their informed self-interest, would increasingly police themselves through peer pressure and reporting abuses to the relevant authorities.[85]  The quota program was to be, in effect, self-regulating.  This has not turned out to be the case in the Great Lakes fishery, however.

Commercial fishers complain that there are more government regulations now than when the quota system was not in place.[86]  The need for enforcement, too, has increased, especially since the annual TAC is calculated partly according to harvest information supplied by commercial fishers.  If fishers violate their quotas and under-report or misreport their catch, the accuracy of the TAC could be affected.  This, in turn, has implications for the sustainability of the fish stocks.

The commercial fishing industry in the Great Lakes does operate within a self-policing program, but it is administered by the OMNR.[87]  Two specific systems are in effect.  The “Lock-Box” program requires that all fishers place a copy of their DCRs in a sealed dockside box before unloading fish from their vessels.  Copies of the DCR then stay with the fish during transport to the processing or wholesale and/or retail facility.  At any point, Conservation Officers can audit the accuracy of the DCR.  The Port-Observer program, on the other hand, allows Deputy-Conservation Officers to inspect the harvest of the day on board a vessel prior to unloading.  Combined, these programs can be effective tools for enforcement.

Unfortunately, limited to their quotas, commercial fishers are more prone to activities such as high-grading, discarding of bycatch, and misreporting.  High-grading describes the process in which fishers discard less valuable fish in hopes of catching more valuable ones.  In general, larger fish tend to be favoured over smaller fish.  This is the case with deepwater chub on Lake Huron.[88]  On Lake Erie, however, the only example of high-grading is the discarding of the large, older walleye.  These fish, called “jumbos” by the fishers, do not fetch as much per kilogram as the smaller walleye, known as “number ones.”  The problem, however, is kept to a very low level by fishers using appropriately sized gill nets as well as patrols by Conservation Officers and reports from anglers and even other commercial fishers.[89]

In some lakes, discarding of by-catch, non-target fish species that are caught incidentally, poses more of a concern.  Restricted to their quotas, commercial fishers tend to discard — and in the process, to kill or maim — game fish, fish in excess of their quota, and those that are too small to process.  In Lake Erie, this is primarily a problem with smelt and yellow perch.  While discarding bycatch is not illegal, fishers are encouraged to avoid waste by using appropriate equipment and changing their fishing locations if they encounter too many small fish.[90]  On Lake Huron, a policy to deal with lake trout caught in excess of quota was implemented in 1994.  An incidental lake trout allowance is now available on commercial fishing licences and these fish can be sold without penalty.  Even lake trout caught in excess of quota and the allowance can be marketed, with 30 percent per pound retained by the licence holder and the rest remitted to the Crown.[91]  This was done to eliminate discarding and to encourage reporting of all fish harvested.  Similar policies are in effect on the other lakes.

Another obstacle to the quota program is misreporting.  Fishers who harvest over their quotas sometimes misreport their catches in the hopes of selling the excess fish illegally.  In 1993, for example, a Lake Ontario fish buyer was charged with 12 counts of failing to report the purchase of 25,996 kilograms of whitefish.  Although he claimed to have been forced into the situation because “the ministry would not give [him] a realistic quota,” he was nevertheless fined $26,000 for under-reporting.[92]  The following year, a Lake Erie fish buyer and six fishermen were fined $28,000 for committing commercial fishing violations.  The fishermen had been fishing for smelt in one quota area, but had reported catching their fish in another.[93]  Similar sorts of quota violations occur on the other lakes.  One Georgian Bay area fisher said, “I report my catch the way [OMNR officials] want to hear it,” implying that he has no qualms about misreporting.[94]

Conclusion

Supplemented by legislation, regulations, and restrictions, the quota system is a vast improvement over open-access regimes.  In the Great Lakes, quota management has eliminated the race to fish and reduced competition and conflict among the different user groups.[95]  ITQs, however, still do not offer adequate protection for fishers or fish stocks.  Although quotas give commercial fishers quasi-property rights to a share of the resource, these rights are severely limited by the government and therefore do not confer all of the benefits of true ownership.

With secure ownership over the resource, fishers would have economic incentives to not only conserve fish stocks for future use but also enhance them.  The fishers reap the benefits of their own good husbandry practices and suffer the consequences of poor practices.[96]  The problem of enforcement, too, is minimized as fisheries owners who set catch and size limits  have fewer reasons to cheat.[97]

Insecure rights, in contrast, discourage fishers from investing in fisheries management.  Clearly, the use-it-or-lose-it policy in effect on Lake Ontario, and feared on other lakes, renders quotas insecure.  Commercial fishers on the Great Lakes have little incentive and, facing the threat of re-allocation, a strong disincentive, to reduce their fishing efforts or to make other long-term investments in the resource.  To commercial fishers on the Great Lakes, “the situation is analogous to ‘owning’ (and selling/buying) a piece of property, the size of which is/can be changed by government (and is changed regularly and without warning).”[98]  Thus, they will not voluntarily restrain their fishing effort for purposes of either conservation or enhancement.  The fishery is therefore under constant threat of over-exploitation.

Insufficient control over the resource breeds further insecurity. Under the current quota system, fishers lack the decision-making powers that should accompany ownership.  While fishers have limited rights to the resource, the OMNR retains ultimate control over management decisions.  The OMNR decides who can fish, where they can fish, how they can fish, and how much they can fish.  It sets the TAC, and it allocates the quota.  And, as was illustrated above, government control renders the system susceptible to user pressures.[99]  But governments are not held accountable for ill-advised decisions.  It is the fishers who stand to lose if the government fails to make wise or fair decisions.

Restrictions on transferability also discourage fishers from investing in their resources.  Under the current regime, commercial fishers are only authorized to buy, sell, or lease quota to other commercial fishers within their quota area.  Quota holders cannot sell their rights to those outside of the commercial fishery — say, sportfishing organizations that would like to buy, and then retire, the rights.  These restrictions prevent rights from ending up in the hands of those who most value them or will use them most efficiently.  They thus reduce the value of the quota.

Fishers of the Great Lakes need stronger incentives to preserve and enhance their fisheries.  They need to operate in a system of full accountability.  Such a system should be characterized by stronger rights, be they in a new institutional setting or in an improved quota regime.  If fishermen are to continue to hold quotas, these should be more secure and more fully transferable.  And fishermen should be more involved in the management of the fisheries.  Empowered to make the decisions that count, fishermen will have greater incentives to fish responsibly and the resources of the Great Lakes will be better protected for the long run.

Notes

Works Cited

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One thought on “The Allocation of Commercial Fishing Rights within the Great Lakes

  1. why did the Ontario government change the law for walleye fishing in lake Ontario from accidentally catching walleye to full permission and ruin sport fishing thereby chasing tourist away

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