Regulations Amending Certain Regulations Made Under the Fisheries Act (Cultivated Shellfish): SOR/2021-101

Canada Gazette, Part II, Volume 155, Number 11

Registration
SOR/2021-101 May 14, 2021

FISHERIES ACT

P.C. 2021-391 May 14, 2021

His Excellency the Administrator of the Government of Canada in Council, on the recommendation of the Minister of Fisheries and Oceans, pursuant to subsection 43(1) ^{footnote a} of the Fisheries Act ^{footnote b}, makes the annexed Regulations Amending Certain Regulations Made Under the Fisheries Act (Cultivated Shellfish).

Regulations Amending Certain Regulations Made Under the Fisheries Act (Cultivated Shellfish)

Atlantic Fishery Regulations, 1985

1 (1) The portion of subsection 3(3) of the English version of the Atlantic Fishery Regulations, 1985 ^{footnote 1} before paragraph (a) is replaced by the following:

(3) These Regulations do not apply in respect of

(2) Subsection 3(3) of the French version of the Regulations is amended by striking out “ni” at the end of paragraph (c).

(3) Paragraph 3(3)(e) of the Regulations is replaced by the following:

• (e) any cultivated Atlantic salmon that are found in or taken from an aquaculture facility or any cultivated clams, mussels, oysters or scallops, of any species, that are so found or taken.

Maritime Provinces Fishery Regulations

2 The portion of paragraph 3(2)(d) of the Maritime Provinces Fishery Regulations ^{footnote 2} before subparagraph (ii) is replaced by the following:

• (d) cultivated fish found in or taken from
  • (i) an aquaculture area or site operated under a lease or licence issued by the Minister or under the Fisheries and Coastal Resources Act of Nova Scotia or the Aquaculture Act of New Brunswick, or

Coming into Force

3 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.)

Executive summary

Issues

Specific prohibitions in the Atlantic Fishery Regulations, 1985 (AFR) and the Maritime Province Fishery Regulations (MPFR), for example harvest close times and size restrictions, have unnecessarily hindered routine shellfish aquaculture operational needs, such as

• off-lease maintenance activities (e.g. temporarily removing shellfish to clean and sort them on shore);
• transferring undersized shellfish from lease to lease;
• harvesting shellfish at certain times of the year; and
• harvesting and marketing undersized shellfish.

The prohibitions in the AFR and MPFR represent conservation measures intended to manage publicly owned wild shellfish populations and are not appropriate for privately owned cultivated shellfish. They have constrained routine shellfish aquaculture site maintenance and harvesting operations that do not pose conservation concerns for wild populations, and may have limited market access for cultivated shellfish. Policy tools and guidelines were developed in an attempt to work around these regulatory issues, but these were associated with increased burden for industry (applications for exemptions), as well as additional paperwork for Fisheries and Oceans Canada (DFO).

Background

Atlantic Fishery Regulations, 1985

The AFR apply to the management and control of particular species of fish and shellfish in the tidal waters of the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Quebec (excluding Hudson Bay and most of the Hudson Strait). Among other things, they provide direction on the length/size of fish and shellfish that may be harvested, fishing/harvesting close times, and licensing. Notably, Atlantic salmon that originate in an aquaculture facility have been exempt from the application of the AFR since 1997. Other aquaculture species, however, have remained subject to the AFR, such as scallops, clams, mussels and oysters.

Maritime Provinces Fishery Regulations

The MPFR regulate commercial and recreational fisheries for freshwater, anadromous and catadromous fish species, as well as clams, mussels and oysters in Nova Scotia, New Brunswick, Prince Edward Island and Canadian fisheries waters adjacent to those provinces. Since their creation in 1993, the MPFR have included exclusions for cultured or cultivated fish (including shellfish ^{footnote 3}) found in or taken from an aquaculture area or site operated under a lease or licence issued by the Minister or by the Province of Nova Scotia or the Province of New Brunswick under their respective aquaculture legislation. Cultivated oysters have not historically been included in the exclusions, and have been subject to certain restrictions in the MPFR, including close times and minimum length restrictions.

Objective

The objective of the regulatory amendments is to exempt cultivated shellfish from the application of the AFR and MPFR, thereby removing unnecessary regulatory restrictions, such as harvest close times and length restrictions, on shellfish raised in aquaculture facilities in Atlantic Canada and Quebec. The amendments reduce the regulatory burden for the shellfish aquaculture industry and provide regulatory certainty for their routine operations. The regulatory amendments do not modify the existing controls over wild shellfish harvesting.

Description

The amendment to the AFR extends the exemption already in place for cultivated Atlantic salmon to cultivated mussels, clams, oysters and scallops. It modifies paragraph 3(3)(e) of the Application section to indicate that the AFR do not apply to cultivated Atlantic salmon, or cultivated clams, mussels, oysters or scallops of any species that are found in or taken from an aquaculture facility.

The amendment to the MPFR extends the exemption already in place for cultivated fish (in paragraph 3(2)(d)) to all parts of the MPFR. Previously the exemption was to all parts of the MPFR except Part VIII, which meant that cultivated oysters were subject to the oyster-related restrictions in Part VIII. It also amends subparagraph 3(2)(d)(i) of the MPFR to update the reference to the provincial legislation in Nova Scotia under which aquaculture licences are issued, by replacing the “Aquaculture Act of Nova Scotia” with the “Fisheries and Coastal Resources Act of Nova Scotia.”

Regulatory development

Consultation

From August 2017 to February 2018, DFO held 12 engagement sessions in Atlantic Canada and Quebec on the regulatory changes. These sessions targeted industry stakeholders (aquaculture, wild shellfish harvesters, and processors), environmental and conservation organizations, provincial governments, and Indigenous groups and organizations. During the engagement sessions, there was general support for the regulatory amendments, in particular from the aquaculture industry. No concerns or issues pertaining to the AFR and MPFR amendments were raised except the following items that were identified during the sessions held in New Brunswick:

• Industry stakeholders asked what would happen with commercial and aquaculture licences after cultivated oysters are excluded from the scope of the MPFR. The conditions of the aquaculture licences issued by New Brunswick, Nova Scotia and of the aquaculture leases issued by DFO in Prince Edward Island, are not expected to be impacted by this regulatory amendment. In Prince Edward Island, the conditions on oyster fishing licences have been updated to improve traceability and help restrict movements between farmed and wild products. The DFO is considering incorporating similar conditions on commercial oyster fishing licences in New Brunswick and Nova Scotia.
• Indigenous groups indicated that they would appreciate a notification or letter to be sent to them when the amendments to the AFR and MPFR are completed. The DFO agreed to do this.

In June 2018, DFO published on its website a notice of intent to amend the AFR and MPFR with a month-long window for the general public and interested stakeholders to submit comments. Shortly after the notice of intent was posted, DFO sent emails to shellfish aquaculture producers in Atlantic Canada and Quebec as well as to national and regional aquaculture associations to notify them of the posting and to invite them to comment on the amendments.

The only submission to the notice of intent was from an industry stakeholder in Nova Scotia, which expressed positive support for the amendments. The submission commented that the handling of undersized oysters is currently too restrictive and suggested modifying these restrictions to allow for direct transport of undersized oysters from lease to lease or from lease to shore worksites. The regulatory amendment addresses this concern, allowing oyster farmers to partake in routine aquaculture operations, such as removing and returning cultured oysters to their leases for cleaning, sorting and grading.

Outside of the engagement sessions and online consultation, DFO also received letters from Nova Scotia's Minister of Fisheries and Aquaculture and Prince Edward Island's Minister of Agriculture and Fisheries supporting the amendments to the AFR and MPFR.

The Regulations were not prepublished in the Canada Gazette, Part I, given the aforementioned consultations and relatively low complexity of the amendments. The regulatory amendments received no significant opposition or concerns throughout the engagement process both online and in-person.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the 2015 Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the regulatory changes were likely to give rise to modern treaty obligations. This assessment examined the geographic scope and subject matter of the initiative in relation to modern treaties and, after examination, no implications or impacts on modern treaties were identified.

During the engagement sessions held between August 2017 and February 2018, 22 Indigenous groups were consulted. This included the Acadia, Annapolis Valley, Bear River, Bouctouche, Glooscap, Kingsclear, Membertou, Millbrook, Pictou Landing, Potlotek, Sipekne'katik, Oromocto, Paq'tnkek Mi'kmaw, Wagmatcook, Waycobah and Wolastogev First Nations; as well as the Agence Mamu Innu Kaikusseth, the Assembly of Nova Scotia Mi'kmaq Chiefs, the Maritime Aboriginal Peoples Council, the Mi'kmaq Confederacy of Prince Edward Island, the Native Council of Nova Scotia and the Nunatsiavut Community Council. None of the Indigenous groups consulted expressed an objection to the regulatory amendments.

Instrument choice

The DFO previously implemented policy tools and guidelines in an effort to address the challenges faced by shellfish aquaculturists in relation to the AFR and MPFR; however, these were associated with increased burden for industry and DFO. As a result, DFO considered regulatory amendments as the best option for eliminating the restrictions in the AFR and MPFR that were unnecessarily impeding the shellfish aquaculture industry, thereby providing regulatory certainty to Canadian aquaculture operators for their routine operations. Amending the AFR and MPFR aligns with DFO's commitment to review regulatory requirements and practices that are bottlenecks to economic growth in the sector and modernize the federal regulatory framework for aquaculture, as described in the Agri-food and Aquaculture Roadmap.

Regulatory analysis

Benefits and costs

Canadian aquaculture shellfish production totalled $97.3 million in 2017, with Atlantic Canada and Quebec accounting for 77% of production value, or $75 million. ^{footnote 4} Oysters account for 46% ($45.1 million) of Canada's total cultivated shellfish production value with Prince Edward Island having the largest share of cultivated oyster production by value, generating $13.9 million in revenues (31% nationally) followed by New Brunswick ($12.1 million or 27% nationally). The production of cultivated oysters in Prince Edward Island and New Brunswick has experienced sustained growth, with a compound annual growth rate (CAGR) of 4.9% and 8.5% per year, respectively, between 2008 and 2017. ^{footnote 5}

Under the AFR, the requirements for length restrictions and close times for harvesting clams, mussels, oysters and scallops apply in the inland waters and tidal waters, including the foreshore of those waters, within or adjacent to the Province of Quebec. The closure period for clams, mussels, and oysters is from January 1st to March 1st. ^{footnote 6} The amendments extend an exemption to the AFR to cultivated mussels, clams, oysters, and scallops, permitting aquaculturists of these species to harvest year-round (i.e. the AFR close times will no longer apply to cultivated shellfish). However, the incremental impacts from the amendments are anticipated to be negligible as harvest activity in winter is limited due to thick ice impeding relevant shellfish production.

The MPFR apply in Nova Scotia, New Brunswick, and Prince Edward Island and in Canadian fisheries waters adjacent to those provinces. Under the MPFR, oysters are subject to length restrictions and close times. Variation orders have been issued which change the close times. The closure period in New Brunswick is from April 1st to September 1st (153 days per year) and from May 1st to August 6th (98 days per year) in Prince Edward Island. ^{footnote 7} Nova Scotia is closed for a single day (December 30th to December 31st). The amendments extend the exemptions to the MPFR to cultivated oysters, allowing oyster aquaculturists to harvest year-round (i.e. the MPFR close times will no longer apply to cultivated oysters). The scope of the quantitative analysis is the incremental impacts on producer surplus (i.e. profits) to the cultivated oyster sectors in New Brunswick and Prince Edward Island resulting from the potential addition in annual harvest days occurring during summer months when weather conditions for harvesting are favourable.

The potential change in production and producer surplus (profits) is estimated in monetary terms, to the extent possible, from an increase in production days each year. Incremental impacts are estimated under two scenarios of future production volume (tonnes of cultivated oysters), a lower bound (constant 2017 production) and an upper bound (growth based on the 10-year CAGR). To estimate the incremental impacts, the average daily production is multiplied by the additional harvesting days and the real fish price which is estimated to increase by 3.2% per year. ^{footnote 8} Producer surplus (profits) has been estimated using a profit margin of 1.3% of production value. ^{footnote 9} The analysis adopts a 10-year time frame for the forecast (2021 – 2030), and values are expressed in discounted 2021 Canadian dollars using a 7% discount rate. ^{footnote 10}

Permitting the aquaculture facilities to harvest for a combined additional 251 days per year during the peak summer production period when weather conditions for harvesting are favourable allows for an increase in annual production. ^{footnote 11} As a consequence, the incremental increase in profits (i.e. producer surplus) estimated for the cultivated oyster harvesters in New Brunswick and Prince Edward Island ranges from $1.8 million, if no growth in production is assumed, to $3.3 million, with growth in production over the 10-year analysis period. This translates into a $0.3 million to $0.5 million annual increase in profits, respectively.

In addition, the amendments clarify federal rules applicable to the shellfish aquaculture industry and remove unnecessary regulatory impediments in Atlantic Canada and Quebec. Enshrining the exemptions in regulation provides aquaculture operators with regulatory certainty and greater operational flexibility. There will be some administrative cost savings for shellfish aquaculture businesses, as they will no longer be required to complete applications, maintain records, and provide reports to be exempt from the regulations. It is estimated that approximately 12 cocktail oyster variation orders and 85 off-lease maintenance authorizations are issued each year, on average. The incremental benefits for businesses from the elimination of the activities associated with the needed variation orders and authorizations, while not estimated, are anticipated to be low.

As a result of the amendments, there will no longer be a need for DFO to review and process applications for variation orders and off-lease maintenance authorizations, potentially reducing administrative costs.

No incremental costs are anticipated to aquaculture businesses, the Government, or Canadians, as a result of the amendments to the AFR and MPFR.

Small business lens

There are no anticipated incremental costs resulting from the amendments to aquaculture businesses, including small businesses. The amendments clarify federal rules applicable to the shellfish aquaculture industry and remove unnecessary regulatory impediments in Atlantic Canada and Quebec and provide greater operational flexibility for their routine operations.

In 2018, the average annual total revenue for businesses operating in the aquaculture industry (finfish and shellfish) was $466 000 per year. ^{footnote 9} Over half of Canadian aquaculture companies are small enterprises that employ fewer than 4 workers, and 97% employ fewer than 100 workers. ^{footnote 12} Many shellfish aquaculturists may be considered small businesses. Therefore, the incremental benefits (estimated above) will also be experienced by the small shellfish aquaculture businesses operating in Atlantic Canada and Quebec (primarily oyster harvesters).

One-for-one rule

The amendments eliminate the need for aquaculture businesses operating in Atlantic Canada and Quebec to seek variation orders or off-lease maintenance authorizations to be exempted from certain regulatory restrictions. While this represents a reduction in paperwork for businesses, the administrative requirements for these are not set out in the regulations but instead stem from policy. Since the one-for-one rule applies only to administrative requirements set out in regulations, the changes are outside the scope of the rule and no “burden out” has been calculated.

Regulatory cooperation and alignment

Allowing routine aquaculture activities under the AFR and MPFR will not impact other federal and provincial controls that exist for other aquaculture operational activities and it will not modify the existing controls over wild shellfish harvesting. Furthermore, the conditions on oyster fishing licences in Prince Edward Island have been updated to improve traceability and help restrict movements between farmed and wild products. The DFO is considering incorporating similar conditions on commercial oyster fishing licences in New Brunswick and Nova Scotia.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment was not required.

Gender-based analysis plus (GBA+)

In 2018, there were 3 507 people employed in the aquaculture industry (finfish and shellfish) in Canada. Employees in Atlantic Canada and Quebec represented half (1 765) of all employed. ^{footnote 13} According to the 2016 Canadian Census, across Canada, women accounted for approximately 26% of income recipients in the aquaculture industry, Indigenous groups 11%, visible minorities 7%, and immigrants 9%. A detailed breakdown of the employment data for the shellfish aquaculture sector is not available.

Aquaculture is increasingly being pursued by Indigenous communities as a means to economic development. As of 2018, there are 170 Indigenous communities investigating or pursuing economic development in aquaculture across Canada.

The amendments are anticipated to have a positive impact on employment in the shellfish aquaculture sectors in Atlantic Canada and Quebec. It is possible that a portion of the increased revenues resulting from permitting aquaculture businesses to operate year-round may go towards labour (wages and commissions), either through the creation of new jobs or through increased earnings to those currently employed in the sector who will have greater opportunities to work. The degree to which the various affected groups will benefit, and how much they each will gain could not be estimated, due to a lack of detailed data for the shellfish aquaculture sector.

Implementation, compliance and enforcement, and service standards

The Regulations come into force on the day on which they are registered. The amendments do not require any new mechanisms to ensure compliance or enforcement.

Contact

Dean Medeiros
Manager
Aquaculture Policy Directorate
Fisheries and Oceans Canada
200 Kent Street
Ottawa, Ontario
K1A 0E6
Email: dean.medeiros@dfo-mpo.gc.ca