Canada Gazette, Part I, Volume 146, Number 51: Regulations Amending the Fishery (General) Regulations

December 22, 2012

Statutory authority

Fisheries Act

Sponsoring department

Department of Fisheries and Oceans

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Background

Fisheries and Oceans Canada’s At-Sea Fisheries Observer Program was initiated in the late 1970s with Canadian observers being deployed on foreign fishing vessels in order to collect information related to fishing activities. In 1980, observers began to be deployed to Canadian offshore trawlers with coverage expanded to include inshore and near-shore fleets in 1990. Since that time, the Program has expanded to include observers deployed to most of the major domestic fisheries in all Fisheries and Oceans Canada regions.

The At-Sea Fisheries Observer Program allows for the collection of detailed, geographically co-ordinated fisheries-related data on the fishing effort, catches and discards at sea on board Canadian and foreign vessels. This information, which would be difficult to collect through other programs, allows Fisheries and Oceans Canada to meet its information needs in conservation and protection, fisheries management and science programs.

Currently, at-sea observers are independent Fisheries and Oceans Canada-designated individuals under the Fishery (General) Regulations (the Regulations). These individuals are employed by one of the four corporations in Canada that provide observer services, but the corporations themselves cannot be designated as observers under the Regulations. About 15 000 fishing enterprises have at-sea observer requirements, logging in almost 20 000 observer sea days per year. Approximately 275 at-sea observers are required at peak fishery operating times and conduct at-sea observations in the following fisheries:

• Offshore northern shrimp;
• Gulf, Maritime and Quebec snow crab;
• Quebec groundfish;
• Maritimes inshore and offshore scallop;
• Maritime region fixed and mobile gear ground fishery;
• Maritime swordfish and tuna;
• Newfoundland region crab;
• Newfoundland halibut;
• Newfoundland turbot;
• Newfoundland groundfish (other); and
• Pacific groundfish trawl.

As part of the Government of Canada’s Budget 2012, Fisheries and Oceans Canada has taken a policy decision to withdraw its annual funding contribution, resulting in a restructuring of how the At-Sea Fisheries Observer Program will be implemented. The Department has annually contributed one third of the total Program operating expenditure, and although government funding will be withdrawn at the end of the 2012 fiscal year (March 31, 2013), the Program will continue to be run. The Program has been administered as a public-private partnership, managed through government contracts with corporations to provide at-sea observer services. Under the current government contract program delivery model, the Crown establishes contracts with service-providing corporations that manage an effective program, including observer recruitment and training, deployment planning and scheduling, data collection, analysis, and quality control in addition to establishing service standards, observers’ deployment plans, and reporting requirements.

With the decision to allow full privatization of at-sea observer services, the Department will no longer be managing at-sea observer services through contracts with corporations. Instead, observer coverage will continue to be required by the Department but will be provided directly to the fishing industry by observer companies and individuals that have been designated by Fisheries and Oceans Canada.

As the fishing industry takes greater responsibility for conservation and stewardship, it will also assume a greater share of fisheries management costs, including all costs associated with fisheries monitoring programs, of which the At-Sea Fisheries Observer Program is a significant component.

Issues and objectives

Issue

There are three issues that would be addressed by the proposed amendments. The first is that, in the absence of pre-arranged service standards, observers’ deployment plans, and reporting requirements from a corporation, Fisheries and Oceans Canada would have to establish these requirements with each individual observer, since the current Fishery (General) Regulations allow only individuals to be designated as observers. However, the Department does not have the capacity to manage hundreds of individual observers. As well, individual observers would then have to take on the negotiation of their own supply arrangements with multiple fisheries, a function currently being managed by corporations, in order to meet the management objectives of the Department. (see footnote 1) This is a function that individual observers may not be prepared to meet.

The second issue is that, within the Regulations, the requirement for mandatory data transmission by observers to the Department, while mentioned indirectly, is not explicitly stated. This runs the risk of being overlooked, which would hinder the Department’s ability to receive data collected for fisheries.

The third issue of this proposal is that, currently, at-sea observers perform the duty of biological examination and fish sampling as a part of the existing government contract process. However, the Regulations only specify for this duty to be performed at a fish landing facility or aquaculture operation, which excludes those sites where at-sea observers would be able to perform these duties, for instance, on board a vessel. Since this is a core function of at-sea observers, an amendment is needed to include these duties in the Regulations.

Objectives

The first objective of the regulatory amendment is to ensure that the At-Sea Fisheries Observer Program continues to be managed in an orderly and effective manner, in which Fisheries and Oceans Canada maintains oversight of training and ongoing standards for at-sea observers, and that the Program be delivered efficiently. This would be accomplished by amending the Regulations so that corporations, in addition to individuals, could be designated by regional directors general for all observer duties, and provide observer coverage services directly to the fishing industry. This amendment would also mitigate the significant risks otherwise associated with managing a program of individually designated observers each responsible for their own training, deployment scheduling, and data collection and management.

The second objective of the regulatory amendment is to clarify that the requirement to transmit to the Department data collected by at-sea observers in a timely manner is mandatory by making this an explicit clause in the Regulations. This requirement needs to be clarified as the transmission of data is important for the Department to meet its information needs in conservation and protection, fisheries management and science programs.

The third objective of the regulatory amendment is to ensure that at-sea observers can continue to perform biological examination and sampling of a fish by amending the Regulations to allow these duties to be done on board a vessel.

Description

The following amendments to the Fishery (General) Regulations are proposed:

• Under the “Designation and Duties” section of the Regulations, corporations would now be eligible for designation by regional directors general (Fisheries and Oceans Canada) for all observer duties. This would allow corporations to perform all duties listed under this section of the Regulations on board a fishing vessel and provide observer coverage services directly to the fishing industry.
• The Regulations would also include a new provision that would be added to explicitly state that a designated observer shall transmit the information collected and compiled in the course of their duties to the Department in a timely manner.
• Finally, under the “Designation and Duties” section of the Regulations, amendments would be made to ensure that observers at-sea conducting biological examination and sampling of a fish would be able to perform those duties while on board a fishing vessel.

Consultation

Throughout the spring of 2012, Fisheries and Oceans Canada consulted with major fishing industry association representatives and the management teams of the four current at-sea observer companies regarding (i) the policy decision to restructure the at-sea observer program and (ii) the proposed regulatory amendments.

The fishing industry has expressed interest in being included in the consultation process until the development of corporation certification standards and designation policy and procedures is complete. Consultation is slated to be completed by December 2012.

The Department is using a three-pronged approach including consulting via (i) existing Fisheries and Oceans Canada regional species advisory committee meetings, (ii) Web-based consultations administered by the Department’s Communications Branch, and (iii) mailing out letters to harvester organizations.

To date, the parties consulted are most concerned about the potential increase in costs to some fishing industry sectors under the new delivery model. Knowing that the Department will be withdrawing funding and that proposed amendments could be in place by April 1, 2013, industry is apprehensive about how service costs will be set by corporations.

The Department acknowledges industry’s concerns related to the Budget 2012 announcement that partial funding for the Program will be discontinued. Although program restructuring may result in observer corporations passing on additional administrative costs to the fishing industry, these business decisions will be determined in the private sphere between fishers and corporations, and outside of Fisheries and Oceans Canada engagement. Program costs could also be determined by other departmental policy considerations, including coverage rate requirements, which are outside the regulatory process and would continue to be subject to ongoing management and conservation consultations with industry.

With respect to the proposed Regulations, both the at-sea observer industry and the fish harvester industries are expected to be supportive because a system based on service delivery contracts between corporations and fish harvesters would be much more efficient for all parties than a system in which fish harvesters must contract for at-sea observer services with individual observers.

“One-for-One” Rule

The “One-for-One” Rule applies to these amendments and the proposal is considered an “in,” or an increase in administrative burden on industry, under the Rule.

Under the proposed amendments, corporations wishing to be designated as at-sea observers would experience increased administrative costs as a result of the requirement to submit a business plan and an application for designation. The total increase in annualized administrative costs for all businesses would be $5,158 (constant 2012 dollars, present value base year 2012), and the annualized average administrative cost increase per business would be $1,032 (constant 2012 dollars, present value base year 2012).

The administrative costs were calculated with the following assumptions:

• The Department is assuming five corporations for this calculation: three in the Atlantic, one in the Pacific, and one projected entrant in the next 10 years.
• Each corporation would perform the tasks related to becoming designated only once because the certification would remain valid on an ongoing basis.

Two types of administrative burden were counted as a part of the increase in cost to the corporations. The first was related to learning about the Regulations or the requirements. Since the proposal would amend the Regulations to permit corporations to be designated, these corporations would now need to familiarize themselves with these provisions and with the information obligations of the new certification process. The Department split this burden into two categories: those corporations that are already a part of the system and are aware of most of the information obligations that are based on the old Request for Proposal process (80%), and those corporations that will be new service providers and will need more time to familiarize themselves with the new requirements (20%). All estimates of the time to complete these tasks came directly from one of the affected corporations.

The second administrative burden was related to the process for obtaining certification. Corporations will need to apply for certification by the Canadian General Standards Board and will need to meet requirements including developing a deployment plan, describing the corporations data collection and quality control system, demonstrating the corporation’s financial viability, and demonstrating the corporation’s conflict of interest clause including arms-length service delivery. This increase in burden would apply to one hundred percent of stakeholders identified. It is estimated that corporations would take 112.5 hours (15 business days) to comply with certification requirements. This average of 112.5 hours was deemed valid by Fisheries and Oceans program staff who based this on the past contracting process time standards and the estimates that came directly from one of the affected corporations. This is a total estimation of how long the entire application would take, including submission of requirements to the Canadian General Standards Board.

Small business lens

The small business lens does not apply to this proposal, as there would not be a significant increase in costs to small business or a disproportionate impact to small business as a result of these Regulations. The Department will be consulting with industry in developing the certification standards and procedures for corporations. In this way, the small businesses that would be affected would play a role in deciding what is included in the new certification process and be a part of the discussion on how this new process should be implemented.

Rationale

A cost-benefit analysis was performed by examining the difference between (a) the proposed regulatory scenario that would come into force in 2013 and (b) the base case or the status quo situation, i.e. if the regulatory changes are not adopted and only individuals can be designated as at-sea observers through operational policies. Due to the high number of observers required for the fisheries under the Program, the designation of corporations as service providers of at-sea observers would imply significantly less cost to the Government, service providers and the fishing industry and more efficiency than the base case scenario where only individuals can be designated. The only incremental costs due to the proposed Regulations would be the costs to the corporations wishing to be designated as at-sea observers. Hence, the proposed Regulations are expected to have positive net benefits.

There are currently four corporations in Canada employing individuals that provide at-sea observer services. In order to avoid underestimating the potential costs to business should this number change, the analysis projects that up to one more corporation may apply for certification from the Canadian General Standards Board and designation by Fisheries and Oceans Canada as an at-sea observer service provider. The total administrative cost required to become familiar with and complete the application for the certification process for the five corporations is estimated at $36,927 (upfront cost, current year value). The total annualized average administrative costs over a 10-year period with a discount rate of 7% are $5,158, or $1,032 per business (constant 2012 dollars).

Under the base case scenario, individual observers would each need to demonstrate that they have the ability to meet the operational policy requirements by providing a business plan or evidence that they are employed by or reporting to an organization that has an established business plan for providing observer services. The Department would have to process a large number of individual applications, and fishers with at-sea observer coverage requirements would have to find and hire those observers individually. As the proposed regulatory changes would result in a much smaller number of stakeholders leading service provision (i.e. 5 companies as opposed to 275 or more individuals), the costs for the certification, hiring and data collection processes would be significantly lower under the proposed regulatory changes in comparison to those of the base case scenario.

Fisheries and Oceans Canada has determined that a corporate structure would better suit an effective and efficient Program. The regulatory changes would streamline the process for observers to demonstrate that they can meet the service standards for their assigned duties. A corporate structure would provide the program delivery efficiencies and infrastructure/mechanisms for observer candidates to be recruited, trained, and deployed to sea in accordance with Fisheries and Oceans Canada’s operational plans, and provide the data collection oversight, and most importantly the data quality control functions performed by the corporations. The designation of corporations as service providers of at-sea observers would help achieve the objective of orderly Program delivery and facilitate the ongoing management of the Program for both Fisheries and Oceans Canada and the fishing industry.

Implementation, enforcement and service standards

There are a number of ways that corporations and the fishing industry will be notified of the new requirements for Fisheries and Oceans Canada designation of corporations conducting at-sea observer coverage. The Department sent out letters in the fall of 2012 to each of the fish harvesting associations to provide them with more details surrounding the Government decision to no longer fund the At-Sea Fisheries Observer Program, and to inform them of the Department’s future plans regarding program delivery. As well, Fisheries and Oceans Canada will be conducting ongoing consultations with the current suppliers of service (corporations), and with fishing industry associations in the development of corporation certification standards and designation policy and procedures. These consultations are slated to be completed by December 2012.

The Department will also ensure a notice is posted on the departmental external Web site.

Fisheries and Oceans Canada will continue to be involved in establishing observer coverage requirements through policies, and conducting oversight and monitoring of the program deliverables on an ongoing basis.

Contacts

Randy Jenkins
Director
Enforcement
Conservation and Protection
Ecosystems and Fisheries Management
Fisheries and Oceans Canada
200 Kent Street
Ottawa, Ontario
K1A 0E6
Telephone: 613-990-0108
Fax: 613-941-2718
Email: Randy.Jenkins@dfo-mpo.gc.ca

Samia Hirani
Regulatory Analyst
Legislative and Regulatory Affairs
Fisheries and Oceans Canada
200 Kent Street
Ottawa, Ontario
K1A 0E6
Telephone: 613-993-8600
Fax: 613-993-5204
Email: Samia.Hirani@dfo-mpo.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 43 (see footnote a) of the Fisheries Act (see footnote b), proposes to make the annexed Regulations Amending the Fishery (General) Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Randy Jenkins, Director, Enforcement, Conservation and Protection, Ecosystems and Fisheries Management, Fisheries and Oceans Canada, 200 Kent Street, Ottawa, Ontario K1A 0E6 (tel.: 613-990-0108; fax: 613-941-2718; email:
Randy.jenkins@dfo-mpo.gc.ca).

Ottawa, December 13, 2012

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE FISHERY (GENERAL) REGULATIONS

AMENDMENTS

1. (1) Section 39 of the Fishery (General) Regulations (see footnote 2) is amended by adding the following after subsection (2):

(2.1) An observer designated under subsection (1) shall transmit in a timely manner to the Department or to a corporation designated under subsection 39.1(1), as the case may be, the information collected and compiled in the course of their duties under subsection 39(2).

(2) Subsection 39(5) of the Regulations is replaced by the following:

(5) An observer who is assigned the duties set out in paragraph (2)(c) shall perform those duties while on board a fishing vessel, at a fish landing station or in an aquaculture facility.

2. (1) The portion of paragraph 39.1(1)(a) of the Regulations before subparagraph (i) is replaced by the following:

• (a) a description of a program that is capable of accurately collecting and compiling information obtained by individual observers in the course of their duties under subsection 39(2) and that includes

(2) Subparagraph 39.1(1)(a)(ii) of the Regulations is replaced by the following:

• (ii) a plan for the training and independent examination of individuals who will be designated as observers to perform the duties described in subsection 39(2), and for the supervision of those observers, and

COMING INTO FORCE

3. These Regulations come into force on the day on which they are registered.

[51-1-o]