November 2000 Fraser Forum: Moving Beyond Burnt Church:
Property Rights for Atlantic Lobster
The Supreme Court of Canada’s September 17, 1999 decision, R. v. Marshall, was neither decisive nor supreme. It absolved Donald John Marshall, Jr., a member of the Mi’kmaq fishing community, of any criminal activity related to an illegal fishing charge. The Supreme Court determined that an existing 1760 treaty right grants the Mi’kmaq community an inherent right to "fish and trade for sustenance." The West Nova Fishermen’s Coalition (WNFC), an organization representing in-shore fishermen from all East Coast fisheries, took exception to the ruling. Following the Supreme Court decision, the WNFC requested an appeal of the ruling on the grounds that unfettered native fishing rights compromise the sustainability of fish stocks. Although an appeal was not granted, the Supreme Court responded on November 17, 1999, by issuing a "clarification" to the Marshall decision, indicating that the treaty right was limited and could be trumped with regulations "respecting the conservation and protection of fish."
The conflict
The fallout from the Marshall decision continues to be costly and divisive. Last winter the DFO was involved in fisheries negotiations with more than 30 aboriginal communities primarily in Nova Scotia and New Brunswick. In order to avoid conflict over the Marshall decision and its subsequent clarification, the DFO offered lucrative deals to entice First Nations communities to sign conservation-focused fishing contracts. As of May 2000, the DFO had signed more than 20 costly agreements with First Nations. However, several aboriginal communities refused to accept DFO’s regulatory role. The DFO offered the Burnt Church First Nation (BCFN) $2.2 million to build a new wharf, $300,000 to construct a fisheries building, and more than $140,000 to conduct other fisheries-related activities in exchange for a regulated food fishery during the closed commercial lobster season.1 Despite these financial incentives, the BCFN rejected the DFO’s offer on the basis of their purportedly unfettered treaty right. Throughout the summer and into the fall, the BCFN continued to exercise its treaty right by increasing its fishing capacity beyond the DFO’s "sustainability" limit. Fall harvests from this "food" fishery have already far exceeded annual sustenance levels (according to the DFO, 40 traps would be more than sufficient for feeding the community; the BCFN uses over 4,000 traps). In response to the over-fishing throughout the summer, the DFO initiated further negotiations with the BCFN.
By September, the negotiations had broken down and the BCFN had resorted to roadblocks and aggression against the DFO’s enforcement officers’ attempts to remove aboriginal lobster traps. As well, tensions increased between native and non-native fishermen as a result of non-native fishermen removing and destroying BCFN lobster traps in protest of the inequitable distribution of commercial fishing rights. On September 21, 2000, fisheries minister Herb Dhaliwal officially closed the BCFN lobster food fishery for conservation reasons, and continues to oversee a process of removing all remaining traps (over 3,600 had been removed by September 23, with approximately 1,000 remaining in near-shore waters).
A promising solution
Superficially, the conflict between the DFO and the BCFN appears to be due to a failure on the Supreme Court’s part to set a strong precedent and on DFO’s part to effectively manage the diverse interests in the fishery. Yet there is a much more fundamental problem that plagues the East Coast lobster fishery: the lack of allocated and enforced property rights for all participants. Without secure, defined access to the resource, conflict within the fishery is inevitable.
Under current management, neither native nor non-native fishermen have exclusive access to East Coast lobster—no fishermen owns the lobster until they are caught. An incentive is thus created for fishermen to harvest as many lobsters as possible, as quickly as possible, before other fishermen do. The result has been significant over-fishing which has nearly devastated the lobster resource.
There is, however, an alternative. Allocating lobster rights to each individual harvester before lobsters are caught eliminates the need to continually fight over allocation. In such a system, after determining the sustainable harvest level, the DFO would set a total allowable catch (TAC) which would then be divided into individual quota (IQ) shares for all license holders. Each quota holder then has a pre-catch right to his share of the TAC and can exercise that right any time and in any capacity throughout the fishing season. Enhanced resource stewardship would result and translate into maximized product quality and economic returns, without dangerous and unsustainable competition.
It is important to emphasize that even under IQs, the initial allocation process remains difficult. However, once this allocation is set, the DFO as well as industry could rely on the effectiveness of the market to manage the lobster fishery. For example, transferable IQs would facilitate IQ trading between licence holders such that the quota would rest with the harvester who values it the most. In the case of land claims or treaty settlements, additional native fishing rights would be bought from non-native harvesters before being transferred to the claimants. As a result, an IQ program for lobster would require minimal regulation by the DFO beyond setting the TAC for the fishery (particularly if an industry-financed monitoring and enforcement system is developed, as has been the case for the majority of BC’s IQ fisheries).
Under the current system, commercial non-native fishermen are being asked to bear a disproportionate amount of the costs of settling treaty claims. If commercial fishermen had stronger property rights, the DFO would be required to buy and sell licenses (with quota shares attached) using taxpayer money, thereby spreading the economic burden of settling these claims more equally across society.
As well, based on the success of shellfish/invertebrate IQ fisheries in BC, such as geoduck clams, red and green sea urchin, and sea cucumber, the lobster quota program would likely result in a safe, economically prosperous, and environmentally sustainable fishery for all participants.
Property rights versus treaty rights
Under IQs, all lobster fishermen—native and non-native—would have a stake in the fishery and thus an incentive to sustain the resource. Nonetheless, an IQ program would require the BCFN to accept a restriction on their unlimited treaty right since individual quotas are inherently limited by the size of the industry-wide TAC. However, treaty rights and quota rights may not be mutually exclusive. In fact, an IQ system would endow native and non-native lobster fishermen with stronger and more secure fishing rights than now exist. Property rights would enable all fishermen to have a larger degree of autonomy to fish at their leisure within their quota limit. The property right would not only secure their access to a certain amount of fish, negating the need to struggle and compete for a share, but would also ensure profitable returns and a safer, more secure fishery.
Conclusion
All fishermen in the East Coast lobster fishery are fighting a battle with the DFO for more secure tenure to a resource that defines their lifestyle and provides for their livelihood. Although the fight on the East Coast is framed as treaty rights versus conservation, the underlying problem is that tenuous and poorly defined access to a natural resource creates uncertainty, economic instability, and a lack of environmental stewardship. By implementing an IQ system for lobster, the DFO would move away from the negative-sum mentality embodied in the current management structure (natives win at the expense of non-natives and vice versa in the short run; total lobster stocks are reduced in the long run) towards a more sustainable and profitable fishery in which all fishing communities win.
Note
1Although the commercial lobster fishery in New Brunswick is closed due to conservation concerns, because of the Marshall decision, the BCFN are permitted to continue harvesting for sustenance within the DFO’s "sustainable limit."
Miriam Bixby (miriamb@fraserinstitute.ca) is a Research Economist at The Fraser Institute. She has an MA in Economics, with a specialization in the environment, from the University of Toronto.
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