Vol. 149, No. 10 — May 20, 2015
SOR/2015-96 May 1, 2015
Regulations Amending the Pacific Aquaculture Regulations
P.C. 2015-469 April 30, 2015
Whereas the User Fees Act (see footnote a) applies in respect of the fees fixed in the annexed Regulations;
And whereas the requirements of section 4 of that Act have been complied with;
Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Fisheries and Oceans, pursuant to section 8 and subsection 43(1) (see footnote b) of the Fisheries Act (see footnote c), makes the annexed Regulations Amending the Pacific Aquaculture Regulations.
REGULATIONS AMENDING THE PACIFIC AQUACULTURE REGULATIONS
1. Section 1 of the Pacific Aquaculture Regulations (see footnote 1) is amended by adding the following in alphabetical order:
“shellfish” means Mollusca, Echinodermata and Crustacea. (mollusques et crustacés)
2. Section 3 of the Regulations is replaced by the following:
3. (1) The Minister may issue an aquaculture licence authorizing a person to engage in aquaculture and prescribed activities on payment of the flat fee and the annual fee for the licence for the first year of the period during which it is valid.
(2) The flat fee is payable for each aquaculture licence application and is determined in accordance with the formula
A × B
- (a) in the case of an aquaculture licence for fish cultivated for non-commercial purposes, $0, and
- (b) in the case of all other aquaculture licences, $100; and
B is the annual adjustment factor determined in accordance with the formula
[(C − 2015) × .02] + 1
C is the year of the payment of the fee.
(3) The annual fee is payable in respect of each year of the period during which the licence is valid and is determined in accordance with the formula
D × E × B
- (a) in the case of an aquaculture licence for fish cultivated for commercial purposes in a marine environment other than those fish referred to in paragraph (b), the number of tonnes of fish authorized to be cultivated under the terms of the licence,
- (b) in the case of an aquaculture licence for shellfish cultivated for commercial purposes in a marine environment, the number of hectares on which the shellfish are authorized to be cultivated under the terms of the licence, and
- (c) in the case of an aquaculture licence for fish cultivated for commercial purposes in a freshwater facility or in a land-based facility, zero, and
- (d) in the case of an aquaculture licence for fish cultivated for non-commercial purposes, zero;
- (a) in the case of the licence referred to in paragraph (a) of the description of D, $2.50,
- (b) in the case of the licence referred to in paragraph (b) of the description of D, $5.00,
- (c) in the case of the licence referred to in paragraph (c) of the description of D, $0, and
- (d) in the case of the licence referred to in paragraph (d) of the description of D, $0; and
B is the annual adjustment factor determined for B in subsection (2).
(4) An aquaculture licence must not be issued to an applicant who has not paid in full the flat and annual fees for aquaculture licences that were previously issued to that applicant.
3. Section 4 of the Regulations is amended by striking out “and” at the end of paragraph (o), by adding “and” at the end of paragraph (p) and by adding the following after paragraph (p):
(q) the place and time at which and the manner by which the annual licence fee must be paid.
4. The Regulations are amended by adding the following after section 4:
4.1 (1) If, during a given year, a condition in an aquaculture licence is amended to modify the quantity of fish authorized to be cultivated or the area within which shellfish is authorized to be cultivated, the annual fee payable for that particular year must be recalculated.
(2) In the event that the annual fee is recalculated, the Minister must amend the conditions of the licence respecting the payment of the fee to reflect any increase if the specific amount of each annual fee is set out in the licence.
COMING INTO FORCE
5. These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Prior to December 2010, the Province of British Columbia was responsible for issuing both the licences required to operate an aquaculture facility and the land tenures required to properly locate these facilities within the province. In 2010, as a result of a Supreme Court of British Columbia (B.C.) decision, the Pacific Aquaculture Regulations (the Regulations or the PAR) were implemented to replace the provincial regime, and to establish a federal licensing regime for marine finfish, shellfish, and freshwater aquaculture operators. The Department of Fisheries and Oceans (DFO) established the British Columbia Aquaculture Regulatory Program (the Program) to operationalize the Regulations.
In issuing licences under the Regulations, the DFO grants aquaculture operators the privilege of conducting a fishery in the course of which they make varying usage of the marine water column. As a result, it is appropriate to charge licence fees both as a method of cost recovery and as payment for a fishery through which exclusive access is granted to the marine water column for the purpose of commercial production (i.e. economic benefit).
During the development and implementation of the Regulations, it was determined that, given the nature of the licence fees being considered, they had to be treated as new user fees subject to the requirements of the User Fees Act (UFA). The UFA requires detailed consultations with parties who would be subject to any proposed new fee and service standard, as well as a parliamentary review of such fee proposals. Due to the short timeframe set by the Supreme Court of B.C. to develop and implement the Regulations, which did not align with the lengthy process for implementing a new fee structure for aquaculture licences under the UFA, fees were not initially included when the Regulations came into force. As a result, aquaculture licences have been issued without fees being charged since December 2010.
Presently, there are salmon, trout, Pacific oyster, clam, mussel, and scallop culturing operations in northern and eastern Vancouver Island (Port Hardy, Port McNeil, Campbell River, Tofino, Baynes Sound). The total value of cultured finfish produced in 2013 was $486 million, of which 98% was salmon. The total value of cultured shellfish in 2013 was $22 million. B.C. exports 70% of its aquaculture production, mainly to the United States. B.C. is the largest aquaculture producing province in Canada.
In May 2008, citing concerns related to impacts of aquaculture activities on wild salmon populations, Alexandra B. Morton, the Pacific Coast Wild Salmon Society, the Wilderness Tourism Association, the Southern Area (E) Gillnetters Association, and the Fishing Vessel Owners’ Association of British Columbia (the Applicants) applied to the Supreme Court of B.C. seeking a declaration that certain provincial legislation relating to aquaculture was ultra vires the Province’s constitutional jurisdiction. The Applicants argued that finfish aquaculture in B.C. was a “fishery,” and that it is therefore an area of exclusive federal jurisdiction.
On February 9, 2009, the Supreme Court of B.C. released its decision finding that “finfish aquaculture” is a “fishery,” and falls within the exclusive jurisdiction of Parliament under subsection 91(12) of the Constitution Act, 1867 (Sea Coast and Inland Fisheries). As a result, it ruled that the majority of the provisions of the provincial aquaculture legislation were outside the constitutional jurisdiction of the Province.
Noting that it would not be in the public interest for the decision to take effect immediately, the Court suspended the application of its decision for a period of 12 months, until February 9, 2010, in order to allow the federal government time to consider legislation (including regulations) of its own. A further extension was granted by the Court until December 18, 2010.
In light of this decision, the DFO developed and implemented the Regulations, which authorize the Minister of Fisheries and Oceans (the Minister) to issue aquaculture licences in respect of “the cultivation of fish” and prescribed activities that are carried out in the marine environment off the coast of B.C. and in certain land-based and freshwater facilities located in the Province. The Regulations also prohibit any person from engaging in such activities without a licence. The Regulations came into force on December 18, 2010. As a result, the DFO has significantly increased regulatory activities and resource requirements related to the management of aquaculture in B.C.
An aquaculture licence defines the management of specific elements, including measures to minimize escapes; transfers; incidental catch; predator control; impacts to fish and fish habitat; fish health; control and monitoring of pathogens and pests; other monitoring requirements; and record keeping, notification, and reporting. The licences also authorize the number of tonnes of finfish to be cultivated or the number of hectares on which the shellfish are to be cultivated. Under the Fisheries Act, the Minister has the authority to issue licences for a duration of up to nine years.
In many provinces where the DFO is not the lead aquaculture regulator, multi-year licences are issued. For example, in New Brunswick, licences for marine finfish are issued for three years while licences for shellfish are issued for up to 10 years. Further, licences in Nova Scotia are issued for 10 years, and may be eligible for automatic renewal if the operator is in compliance with regulations and licence conditions. Since 2010, the DFO has issued licences on an annual basis for marine finfish and shellfish, and up to 24 months for freshwater/land-based aquaculture. Licences of a shorter duration were appropriate during the first years of the Program to reflect post-implementation modifications to licence conditions, ongoing First Nation consultation, evolving scientific advice and the outcomes of related advisory processes.
Since its inception, the Program has evolved based on scientific advice, identification of best management practices, and ongoing monitoring. These efforts have introduced a level of stability and certainty regarding management measures under federal authority, whereby the management approach does not change significantly year to year. As a result, the DFO is now in a position to proceed with a transition to multi-year licensing. This will allow aquaculture operators to submit one application for a licence that would authorize their activities for a period of up to nine years. They must also continue to meet their licence conditions throughout the period for which their multi-year licence is issued. This is in line with the Government of Canada’s efforts to reduce administrative burden on Canadian businesses, and will also help create improved program efficiency within the DFO. Furthermore, multi-year licensing provides industry with more operational certainty, the ability for longer term planning, and support investments in more sustainable practices.
The objectives of the Regulations Amending the Pacific Aquaculture Regulations (the Amendments) are to authorize the collection of licence fees issued to aquaculture operators under the PAR, and to introduce an annual 2% inflationary increase that would act to maintain a consistent cost recovery ratio between the increasing cost of licensing activities and the regulatory regime over time, and the revenue generated through the licence fees. Licence fees will cover approximately 10% of the costs associated with federal licensing and aquaculture management activities.
The licence fees are intended to
- recover a partial amount of the cost associated with the issuance of a licence under the Program; and
- charge a fee for a fishery through which the licence holder would have privileged access to a column of water for commercial production.
The Regulations have been amended to require the payment of licence fees for licences issued pursuant to the PAR for commercial purposes. The licence fees have two components: a flat fee portion, due upon application, and an annual portion. The annual fee for the first year of the licence must be paid before the licence can be issued. Since freshwater operations are not granted a licence to operate a fishery using the marine water column, they will only be required to pay the flat fee to partially recover administrative and licence issuance costs.
The Amendments establish a formula for calculating both the flat and annual fee portions based on authorized production parameters, such as the number of sea floor hectares for shellfish culturing, and the number of tonnes of fish for marine finfish operations. It also incorporates a 2% inflationary mechanism that applies to all fees after the first year of the coming into force of the Amendments. The flat fee must be paid only when a licence of any duration is issued.
The annual fee is to be paid every year throughout the duration of the licence and is directly proportional to the number of tonnes of finfish authorized to be cultivated under the terms of the licence or the number of hectares on which the shellfish are authorized to be cultivated under the terms of the licence. This distinction is of particular relevance for those operators who request and are granted multi-year licences, whereby the flat fee must be paid only when a licence is issued, while the annual fee must be paid every year for the duration of the licence.
The fees are summarized in the table below and their calculation is demonstrated in subsequent examples.
In the first year of fee implementation (i.e. 2015), the formula will require the payment of fees as presented in the second and third column of the table below. Every year thereafter, the fee components applicable to each identified sector must be multiplied by the factor identified in the fourth column:
|Sector||Flat fee (see reference 1*)||Annual fee (see reference 2*)||Inflationary mechanism (see reference 3*)|
|Fish cultivated for commercial purposes in the marine environment other than shellfish||$100||$2.50/tonne (maximum licensed biomass)||2% per year|
|Shellfish cultivated for commercial purposes in the marine environment||$100||$5.00/hectare (licensed area of cultivation)||2% per year|
|Fish cultivated for commercial purposes in freshwater/ land-based facilities||$100||No charge||2% per year|
- Reference a
1* To be paid only upon issuance of licence.
- Reference a
2* To be paid annually, including the first year.
- Reference a
3* Applied to both the flat fee and the annual fee beginning in the second year of the coming into force of the Amendments.
For finfish aquaculture operations, the fee for a new licence in 2015 is calculated as follows:
Fee = $100 + ($2.50 × licenced tonnage)
For example (scenario 1), if a finfish aquaculture operator were licenced to produce 2 500 tonnes of Atlantic salmon for one year in 2015, the licence fee would be calculated in the following manner:
$100 + ($2.50 × 2 500)
$100 + $6,250
Total first year fee for a new licence = $6,350
For shellfish, the licenced tonnage in the calculation above would be replaced by the total licenced hectares, and for freshwater/land-based, only the flat fee is required to be paid.
In applying the inflationary mechanism, if the same finfish aquaculture were licenced to produce 2 500 tons of Atlantic salmon for one year in 2017 (two years after the year of the coming into force of the Amendments, i.e. 2015), the licence fee would be calculated in the following manner (scenario 2):
$100 × inflationary adjustment + ($2.50 × licenced tonnage) × inflationary adjustment
$100 × ([2017−2015] × 0.02 + 1) + ($2.50 × 2 500) × ([2017−2015] × 0.02 + 1)
$100 × 1.04 + $6,250 × 1.04
Total fee for a new licence two years after the coming into force of the Amendments = $6,604
When expanding scenario 1 to a multi-year licence issued in 2015, the calculation methodology would remain the same for the first year. However, every subsequent year for the duration of the licence term, finfish and shellfish licence holders would be required to pay only the annual portion of the fee including the 2% inflationary increase utilizing the methodology demonstrated in scenario 2.
Freshwater and land-based licence holders would not be required to pay any fees in the remaining years of the licence term. After the end of a multi-year licence term, all licence holders will be required to apply for and pay the flat fee in the first year of a new multi-year term along with the annual fee, both of which would be subject to the inflationary increase.
The Amendments also provide that the annual fee for a given year must be recalculated to reflect any changes in the licenced amount of finfish being cultivated or the licenced area being used to cultivate shellfish for that year. These revisions to the licence and the associated recalculation of the fee would occur at the time of application for an amendment by a licence holder. Any difference between the new fee and the previous fee will be prorated to reflect the remaining months left in the licence term. In the event that the licence fee increases, the licence holder must pay the difference in accordance with the conditions of his licence. If the fee decreases, the difference between the fee paid for the year and the recalculated fee will be remitted. Given the stable operating conditions and the rigour in establishing maximum production levels, it is not anticipated that these scenarios will occur with high frequency.
Non-commercial aquaculture operations and facilities, such as university facilities and facilities that are used for fish enhancement purposes, will be exempt from paying licence fees. Fish enhancement facilities produce juvenile fish for release into the wild to increase (i.e. enhance) the existing population. For example, a salmon enhancement facility would produce a number of smolt (young salmon) that would be released into waterways where scientific analysis has identified the need for enhancement. This results in a public benefit as the resource is being improved rather than being used for private economic benefit.
The “One-for-One” Rule does not apply to the Amendments, as there is no change in administrative costs for businesses.
A federal licensing application process for aquaculture in B.C. has been in place since 2010 and is not being revised. The Amendments only require the payment of fees for aquaculture licences, and there is no new administrative burden associated with this requirement.
Small business lens
The small business lens does not apply to these Amendments, as small businesses are expected to incur only limited costs (i.e. less than $1 million dollars per year nationwide), and they are not anticipated to be disproportionately high (e.g. high costs are not being imposed on a few small businesses).
In the B.C. aquaculture industry, the shellfish sector, and some freshwater/land-based operators, would be considered small businesses, while the finfish sector is mostly made up of larger corporations. Approximately 360 aquaculture operators in B.C. can be categorized as small businesses.
In general, the fee is designed to be proportional and fair for all sub-sectors of the industry (i.e. finfish, shellfish, and freshwater/land-based), and was developed in collaboration with stakeholders.
When formulating the licence fees, the DFO considered impacts on small businesses and made two targeted adjustments to proactively address these issues. The first adjustment resulted from consultations with licence holders, during which the shellfish sector demonstrated that fees tied to production levels would significantly and disproportionately increase their operating costs. In response, the fee structure was redesigned, and was based instead on the number of hectares authorized for use in cultivating shellfish.
Similar concerns were raised by the freshwater and land-based sectors, which do not operate a fishery using the marine water column, but rather carry out their operation in freshwater or on land. As a result, their fee has been limited to the flat fee portion, which is intended to partially cover the administrative costs of licence issuance and renewal incurred by the DFO.
The DFO has also implemented a flexible approach through the implementation of annual fee payments for multi-year licences rather than requiring the full payment of all fees upon issuance. This is intended to help reduce the monetary burden on small businesses.
A robust consultation strategy has informed the development of the licence fee framework. The DFO has communicated its intent to implement licence fees under the PAR through multi-phase consultations on a fee structure, including initial discussions with First Nations, licence holders, and other stakeholders in spring 2012. These preliminary discussions were subsequently broadened to the Canadian public during policy consultations on the licence fees and service standard that also met the requirements of the UFA in fall/winter 2013–2014.
In general, industry stakeholders have maintained their support for the implementation of licence fees throughout the consultation process. By proactively engaging with First Nations, the industry, and other stakeholders, the DFO has been able to produce a licence fee structure that better aligns the underlying fee principles — as previously described in the “Objectives” section — with licence holder needs in a manner that is simple to understand and administer. The principles, derived from the DFO’s Guide to External Charging, include aspects such as effects on competitiveness, neutrality, simplicity, low administrative burden, and practicality.
While some stakeholders have identified issues related to the level of fees or sought clarification on certain aspects of the regulatory program (detailed below), an initial round of targeted consultations under the process with program clients informed critical changes to the final fee structure.
Initial client engagement
To help inform a parliamentary fee proposal, as required by the UFA, preliminary face-to-face meetings were held in spring 2012 with First Nations, aquaculture licence holders, and industry associations to discuss possible approaches for implementing a fee schedule for aquaculture licensing in British Columbia. The intent was to gather general stakeholder views on the introduction of a flat fee structure, including an initial proposal of a fee based on 0.2% of landed value for all sectors. In effect, this initial proposal would have based the amount of the fee on the revenue generated through the sale of fish being cultivated, referred to here as landed value.
A summary of concerns raised is as follows.
- No opposition to licence fees; however, some requested that the funds be reinvested in First Nation communities in British Columbia.
Marine finfish aquaculture sector
- No opposition to licence fees; however, it was suggested that the fee structure be changed from landed value to tonnage per site, as this is tracked more closely and provides greater predictability.
Shellfish aquaculture sector
- Requested a reassessment of the proposed fee structure, as it was demonstrated that basing the fee on 0.2% of landed value would have resulted in disproportionately higher costs to this sector in comparison to the rest of the country, and also globally. For example, in other parts of Canada, fees are static (e.g. $500 for a finfish licence in the Province of Newfoundland and Labrador), and are not based on the final revenue generated through the sale of cultivated fish (i.e. landed value). It was proposed that the fee could be based on the size of operation (i.e. total hectares).
- Expressed similar concern that many operations could see significant increases to licence fees, affecting the competitiveness of their industry. Further, it was demonstrated that the fishery’s use of a federally regulated resource was limited.
As a result of these meetings, significant changes were made to the fee structure to address the concerns of consulted parties through a more balanced approach for each sector. More specifically
- a flat fee for licence issuance costs was introduced for all sectors, starting at $100 for the first year of the implementation;
- the shellfish fee was revised from production-based to area-based (i.e. $5.00/hectare for the first year of implementation);
- the finfish fee was revised from 0.2% of landed value to $2.50 per licenced tonne for the first year of implementation; and
- the land-based/freshwater sector is only required to pay the flat fee.
Regarding the First Nations requests to use the revenues for targeted projects, the DFO does not have the authority to redirect revenue flow that is being collected for deposit in the Consolidated Revenue Fund.
Online consultation with the public
Following the initial engagement with First Nations and stakeholders, and the significant changes that were made as a result, a broader 30-day online consultation was held from November 19 to December 19, 2013, on the DFO’s Web site. Through this forum, all Canadians were provided the opportunity to submit their comments on the proposed fees.
To notify the public of these consultations, the DFO posted a notice of intent in the Canada Gazette, Part I, and on the “Consulting with Canadians” Web site. The DFO also sent out 591 standard mail notices and consultation packages to all licence holders and First Nations in British Columbia. These packages provided them, directly, with a discussion paper that outlined the proposed fee, the related policy, the service standard, and instruction of how to participate to encourage them to provide feedback on the proposed fee structure. The DFO established a dedicated portion of its Web site to raise awareness on the fee structure and to inform stakeholders on the methods available to them for the submission of comments. Throughout the 30-day consultation period, a total of 607 visits to the Web site were registered. These visitors were predominantly concentrated in British Columbia, with some occurring in other parts of Canada, the United States, as well as other international locations.
During the public consultation period, 113 comments were received from a mix of stakeholders including licence holders, industry associations, private citizens, environmental groups, academics, etc., and covering a range of topics. While some were outside the scope of the consultation topic, most were directed at the level of the proposed fee and the UFA-mandated service standard for licence issuance and amendments.
Some non-governmental organizations continue to view the fees as being too low and have argued that they do not account for the externalities (e.g. effects on ocean health) that aquaculture may have. However, the DFO has determined that such externalities are taken into consideration during the application phase of an aquaculture operation. As part of this pre-approval review phase, the DFO works with the Province of British Columbia to determine if the location (siting) of proposed aquaculture facilities are appropriate by considering the best available science in order to minimize the impact on the environment and aquatic species. Understanding and managing such complex variables continues to be a focus for the DFO, and they are taken into consideration at the initial application stage and throughout the ongoing management of an operation. The DFO continues to support rigorous and unbiased scientific research to help ensure the ecological sustainability of Canada’s aquaculture industry, including interactions with the environment and existing wild species.
On January 9, 2014, the DFO responded to stakeholders through email and standard mail in instances where specific questions or concerns were expressed. Many of these responses helped further clarify the policy intent of the fee structure, and the associated regulatory requirements. Once these were sent, the official 30-day complaint period under the UFA was triggered, from January 9 to February 9, 2014.
UFA complaints resolution period
Under the UFA, in instances where a complaint cannot be resolved to a complainant’s satisfaction, a complainant has the opportunity to submit a written request to the DFO asking that the complaint be reviewed using an independent advisory panel.
Following the DFO’s initial responses to comments, only one stakeholder chose to continue a dialogue during the complaints resolution period. This complaint centered on concerns about the conditions of licence, which explain the requirements and restrictions of aquaculture operations authorized through the licence. In the ensuing exchange of information, both parties agreed that the concerns being expressed were not related to the licence fee structure as proposed for addition to the Regulations or the UFA- mandated service standards. The DFO committed to including the stakeholder in an upcoming technical review of conditions of licence, and an independent advisory panel was deemed unnecessary by both parties.
UFA parliamentary review
DFO submitted the final fee structure for tabling in Parliament in September 2014, as required by the UFA. On October 1, 2014, the proposal was referred to the Senate Standing Committee on Fisheries and Oceans (the Committee) for review. On November 25, 2014, DFO senior officials appeared before the Committee to answer questions on the proposal, and on November 26, 2014, the Committee recommended to Parliament that the proposal be approved as submitted (i.e. no changes). This marked the conclusion of the User Fees Act process through the completion of a parliamentary review.
Establishing aquaculture licence fees is a sound management practice that is transparent, stable, and helps recover a fraction of the costs associated with the administration of the Program. The annual fee reflects the industry’s ongoing and exclusive utilization of the marine water column. In addition, the DFO is of the view that the licence fee structure is simple and practical to implement, does not impose new administrative burden, and does not impact the competitiveness of British Columbia-based aquaculture firms within the global marketplace.
While aquaculture activities were still under provincial jurisdiction, the aquaculture industry paid licence fees to the Province of British Columbia. The provincial aquaculture licence fee structure was made up of three components: land tenure rent, aquaculture licence fee, and waste management fee. The federal licence fee structure replaces the former provincial licence and waste management fees. The land tenure rent component remains under provincial jurisdiction and continues to be charged by the province, meaning rent for the use of the sea floor located within the province is still paid to the Province of British Columbia. The new federal fees are equal to or slightly higher than the fees previously charged by the Province of British Columbia. Stakeholders were made aware of the intent to establish federal license fees leading up to the implementation of the Regulations in 2010.
A cost-benefit analysis on the cumulative impacts of the licence fees, when compared to the baseline scenario (i.e. the provincial licensing fee structure), shows that the net present value of the incremental compliance costs of the regime over a 10-year period (2014–2023) would range between $468,300 and $797,960. A range is estimated for compliance costs as the total costs are dependent on the evolution of the number of licences, production tonnage, and production values. This is equivalent to a cost range of $61,251 to $111,623 per year for the aquaculture industry.
Under the new federal fee structure, during the first year of implementation, aquaculture businesses would see licence fees increase from the previous provincial fees on average from $5,436 to $5,983 for marine finfish, from $50 to $139 for shellfish, and from $54 to $100 for freshwater finfish. Based on average active licence holder revenues, the amounts noted above represent a fraction of a percentage of business revenues, ranging from 0.07% for marine finfish (average business revenues of $8,983,210) to 0.18% for shellfish (average business revenues of $78,743). Licence fees would then increase by 2% per year, to account for inflation. By the tenth year of implementation, licence holders would be paying on average $7,150 for a marine finfish licence, $120 for a shellfish one, or $166 for a freshwater finfish one.
Under the new federal fee structure, the total amount of aquaculture licence fees expected to be collected in the first year of implementation from all aquaculture operations in British Columbia by the Government of Canada is estimated to be approximately $679,000. In the tenth year following their implementation, the total amount of licence fees revenues to the federal government is estimated to range between $752,000 and $803,000 depending on the evolution of the number of licences, production tonnage and values. As noted previously, this represents approximately 10% of the costs associated with these federal licensing and management activities.
Stakeholder consultations have indicated that the licence fees are a predictable and an absorbable cost component of doing business across the aquaculture sector. The industry is supportive of the principles underlying the licence fees as previously described in the “Objectives” section. The industry has not indicated any concerns related to the requirement to pay licence fees in advance (prior to the issuance of a licence), as will be required under the Regulations.
The Amendments close an existing regulatory gap and promote consistency across Canada, as the aquaculture operations in British Columbia have not paid licence fees since the federal government assumed regulatory control for these activities on December 18, 2010.
Furthermore, the licence fees for British Columbia are comparable to those charged in other Canadian provinces. The $100 flat fee is in the mid-range when compared to other provinces: in Newfoundland and Labrador, a finfish aquaculture licence carries a flat fee of $500; in New Brunswick, $50; and, in Nova Scotia, $386.50. While no province charges a fee similar to the annual component of the federal fee (i.e. reflecting the authorization of a fishery being established and utilizing a public resource for commercial benefit), provinces have other recourses for the application of fees through the leasing of tenures and waste management fees. When considered as a total cost to operators, the fees charged in other provinces are comparable to the combined cost of the federal British Columbia aquaculture licence fees and the tenure fee collected by the Province of British Columbia.
Implementation, enforcement and service standards
The Regulations will come into force on the day on which they are registered.
In all cases, the flat fee and the annual fee for the first year of the licence must be paid for the licence to be issued. For multi-year licences, non-payment of required annual licence fees for each year of the duration of the licence will be addressed as a failure to comply with the Regulations. In addition, licence conditions may provide for the date and manner of payment of the annual fees. Persons who do not comply with the Regulations or with the conditions of their licence can be prosecuted before the courts. Upon conviction, offenders are subject to a range of penalties, including fines and licence suspension or cancellation as prescribed by sections 78 and 79.1 of the Fisheries Act.
Implementation and service standards
Program service standards were developed in order to meet the requirements of the UFA. As a result, they were shared with program clients during the consultation process, and were tabled in their final form in Parliament. They represent the process and time required by the DFO to issue new licences or to make major technical amendments to existing licences. In the case of all species and sectors, this includes new licence applications, adding a species to a licence, or increases to annual production or infrastructure by greater than 10%; and, where the 10% is cumulative, to all requests granted over the previous five years.
The timeline for this standard is delivery within 365 calendar days. Establishing an aquaculture operation requires approval from both the Government of Canada and the Government of British Columbia, as licences are issued federally and land tenures are issued provincially. The application process for the establishment of an aquaculture operation is harmonized between the federal and provincial governments, offering applicants a single-window approach through a project review team comprised of the DFO, officials from the Government of British Columbia, and Transport Canada. Once the application is approved through this process, all of the permits, tenures and licences are sent out at the same time. The 365-day standard also accounts for the time needed to conduct work in support of this decision-making process, which includes consultations with First Nations, completion and analysis of environmental reviews, and coordination with other federal and provincial departments and agencies.
As the aquaculture licence fees are subject to the requirements of the UFA, the Minister will report annually on the service standard associated with new licences or major technical amendments to existing licences each year through the Departmental Performance Report (DPR) to Parliament. If the performance in a particular fiscal year does not meet the standards established for that fiscal year by a percentage greater than 10%, the UFA requires that user fees be reduced by a percentage equivalent to the unachieved performance, to a maximum of 50% of the licence fee.