by Brian Lee Crowley

Trying to say anything sensible about the incredible mess that is the inshore fishery always makes me feel like one of those hapless contestants in Monty Python’s Summarizing Proust Contest: so much to say, so little time in which to say it.

Let’s start with what’s wrong. Ranchers own their cattle, and farmers own the productive capacity of their land. If they run down the long-term value of these assets through poor management, they pay a direct personal cost. In other words, ownership of these assets introduces a direct and tangible accountability for the quality of stewardship of the resource.

Fishermen, on the other hand, by and large, do not own the fish until they’ve landed them in the boat. All they have, besides the boat, is a licence from DFO to put their nets or lines or traps in the water at the times and places authorized.

The government of Canada essentially owns the resource, but reaps no benefits from sound management. It runs the fishery so as to maximize short-term employment as a gateway to social benefits and to maintain coastal populations in a state of political dependency. Productivity and profitability, the inescapable keys to sustainable economic progress, be damned.

So what else is new? Well, something quite interesting, actually. As is always the case, human ingenuity finds a way to get around the obstacles governments and others throw in the path of doing the right thing.

Inshore fishermen have realized that they have a valuable asset in their fishing licence. Now, you might think that this isn’t so, because the Department of Fisheries and Oceans only allows licences to be transferred from one officially-recognized fisherman to another, and then only with the approval of DFO. Theoretically, no money (other than the DFO fee) changes hands. Right.

DFO is perfectly aware that as much as $850,000 has been paid to holders of lobster licences in rich fishing grounds to get them to surrender those licences to DFO in favour of the “purchaser.” Less valuable licences fetch correspondingly lower prices.

But if that’s the true value of a licence (or as close as we’ll get in the absence of a real market where anyone can freely buy and sell licences), here’s the problem: how do new fishermen come up with that kind of money? It’s great for fishermen who are retiring – they’ve now got the same kind of handy retirement fund that farmers have (they don’t get the same tax breaks, but then farmers cannot claim EI). But how does the rising generation find the cash?

In any other area, the answer would be simple: the new generation borrows against the future earning power of the asset. The bank or some other lender holds a mortgage on the property and gives the new entrant the cash up-front to buy it.

But what happens when you don’t really “own” your licence, which is the arcane world inhabited by fishermen?

Why, you take advantage of contract law, and make a contract with the person financing your move into fishing, promising them that you will, in effect, surrender the licence in their favour if you are unable to make your payments. This is the origin of the so-called “trust agreements” that are causing such a stir in the in-shore fishery these days.

The people who love the bad old system, in which fishermen earn their living at the pleasure of the minister of DFO, find these agreements to be a terrible threat. They don’t want fishing to be carried out, like any other business, by those who are best and most efficient at it.

They don’t want the fishery organized like any other industry, where people who acquire assets and manage them well are rewarded for their pains, while those who manage them poorly go out of business and pass those resources on to those who can make better use of them.

No, they want to maximize the number of people living from fishing, even where many of them cannot hope to earn a decent living from their efforts, and must rely on annual bouts of EI and other forms of government support.

The trust agreements, which the courts have recognized as valid contracts, finally give real power to fishermen who want to be rewarded for their fishing and managerial prowess rather than the political lobbying power of coastal communities.

They show the way to a modern and efficient industry that creates value for coastal communities by maximizing the value the fishery can create. And because trust agreements now allow fishermen themselves to realize the real value of the licences that they hold, finally the politics and the economics of the fishery are converging in a way that holds out the real prospect of unprecedented prosperity on our coasts.

Brian Lee Crowley is president of the Atlantic Institute for Market Studies (, a public policy think tank based in Atlantic Canada. E-mail: [email protected]