Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement Program: Questions and Answers

Why is the word ‘retirement’ used?

The use of the term retirement in relation to the Licence Retirement Program, refers to the permanent removal (retirement) of commercial salmon troll licence eligibilities that participate in the commercial salmon troll fishery.

When will the Review of the Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement Program conducted by Nelson Bros. Fisheries Ltd. be made publicly available?

A copy of the Review of the Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement Program (VLRP) is available on-line on the Department of Fisheries and Oceans Waves webpage.

Will any changes be made to the retirement program process as a result of the Review?

The Department has completed an independent review of the Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement Program conducted by Nelson Bros. Fisheries Ltd and reviewed the recommendations made in the report.

The review completed by Nelson Bros. Fisheries Ltd. found the use of a reverse auction process was appropriate given the objectives of the program and the Voluntary Salmon Troll Licence Retirement program will continue to be through a reverse auction process (for more information please see the description of the process and rationale listed below).

However, in consideration of the results of the review and associated recommendations, the Department has updated several key components of the VLRP:

  1. improvements to communication and administration of the program;
  2. revision of the fair market value (FMV) used internally by the Department to determine which licence retirement offers to accept; and
  3. plans to continue the current licence retirement program until December 31, 2018 or until no funds remain. Should funds remain after December 2018; the Department will review future uses of any remaining funds at that time.

In regards to updates to improvements to communication and administration of the program, the following changes have been made:

Please ensure that the Department has your correct email address.

The Department does not intend to re-issue the application package for each retirement round. Instead, the application forms may now be submitted to the Department at any time throughout the year and any applications received will be reviewed quarterly. Responses will be provided to applicants on the success of their applications following the end of each quarterly deadline. It is anticipated the deadlines for quarterly retirement rounds will be:

October 31, 2016
January 31, 2017
April 30, 2017
July 31, 2017
October 31, 2017

January 31, 2018
April 30, 2018
July 31, 2018
October 31, 2018
December 31, 2018

Those salmon troll vessel owners who wish to submit an application may find a copy of the Voluntary Salmon Troll Licence Retirement application package online.

A request may also be made to have a copy provided by email or mail, should that be the preference.

In addition, the Department will now use email for all future communication in lieu of paper mail outs. Please ensure that your email address on record with the Pacific Fishery Licence Unit is correct and up to date.

Who is eligible?

Eligible applicants include vessel owners with salmon troll full or reduced fee licence eligibilities.

Those vessel owners who offer a salmon troll (Area F, G or H) licence eligibility and/or packages of multiple salmon troll licence eligibilities, which are within fair market value, will be considered.

The Department will continue offering retirement opportunities through December 31, 2018, subject to remaining mitigation funds.

Communal commercial salmon licence eligibilities will not be eligible for this program; neither will salmon seine or gillnet licence eligibilities.

How many troll licenses have been retired in through the Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement program?

Rounds 1 through 13 have been complete. The results, per round are summarized in the table below.

Retirement Round Applications received Licence eligibilities Retired
Area F Area G Area H Total
Round 1 46 0 6 0 6
Round 2 62 11 8 6 25
Round 3 39 4 4 2 10
Round 4 36 4 5 1 10
Round 5 46 5 4 1 10
Round 6 35 4 7 3 14
Round 7 36 7 2 2 11
Round 8 34 6 4 2 12
Round 9 26 0 1 0 1
Round 10 11 2 1 0 3
Round 11 5 0 0 0 0
Round 12 5 1 0 1 2
Round 13 2 0 0 0 0
Total to date 381 44 42 18 104

How do I know what to bid to voluntarily retire my salmon troll licence eligibility?

The process for retirement of commercial full fee salmon troll licence eligibilities will continue to be through reverse auction. Applicants will assess the value to them of permanently retiring (permanently removing from the troll fleet) a salmon troll licence(s) and identify the amount in dollars they would like in return for retiring the items listed on the application. No price negotiation will occur.

In addition to an owners’ own financial assessment of the value of a licence eligibility, information regarding average licence values in the salmon troll fishery can be found in the Nelson Bros. Fisheries Ltd. Review of the program. Information is also available under the heading “Commercial Fishing Business Plans - Analysis of Commercial Fishing Licence, Quota and Vessel Values”.

What is the rationale for the reverse auction process used by the Department for the salmon troll licence retirement and how does the process work?

The reverse auction process coupled with credible and independent advice on market value is generally regarded as one of the most impartial and fair processes. This process is a long standing practice of this Department and was used in past salmon licence retirement programs in 1996, 1998 and 2000.

The program is operated through a voluntary reverse auction with multiple opportunities to submit applications over an initial 2 year period. In this process, vessel owners voluntarily submit licenses identifying the price they believe appropriate, while the Department evaluates offers based on guidelines, which include fair market value, when selecting to accept or reject offers. Informed by independent advice on licence values, the Department has retired licence eligibilities that have met the value for money requirement and thus the usual DFO practices for licence retirement programs are being followed.

If I have multiple salmon troll licenses, can I apply to retire them all?

Yes, multiple salmon troll licence eligibilities may be offered for retirement as a package or individually.

Can I retire less than all of my salmon licenses under the salmon licence retirement program?

Yes.

However, if a vessel owner is offering less then all salmon troll licence eligibilities held on the vessel, then the first licence placed on the vessel must be retained.

The last licence eligibility that was stacked onto the vessel will be the licence retired.

If your application is selected, for the purposes of this program, the vessel owner(s) will have an opportunity to specify the area they wish the first licence to maintain. Only the areas currently assigned to the licences held on the vessel, within the same gear type, may be selected.

Will this be the only opportunity for me to submit my bid to voluntarily retire my salmon licence eligibility under the salmon licence retirement program or will there be multiple opportunities to apply?

The Department will continue offering retirement opportunities until the end December 31, 2018, subject to remaining mitigation funds.

How much money are you spending on the salmon licence retirement program?

$28.5 million has been dedicated to restructuring the salmon troll fishery through licence retirement; however, a small portion of the funds may be used for removal or disposal of derelict and abandoned vessels arising from this program.

The Department does not provide updates on expenditures of funds for this program as this would indicate average values paid for retired licences and would undermine the reverse auction process.

What progress has been made on the Department's plan to modernize the commercial salmon allocation framework?

The Department began work to update the Commercial Salmon Allocation Framework (CSAF) in September, 2013. A terms of reference for the work was completed and subsequently consultations primarily with the Commercial Salmon Advisory Board (CSAB), First Nations Salmon Coordinating Committee (SCC) and individual First Nations upon request. Work completed to date is summarized in the 2016/2017 IFMP under appendix 6. Further information on the consultation process and results are available online.

What are the requirements of the PST agreement with respect to the Pacific Salmon Treaty mitigation program?

The Treaty between Canada and the United States, in Annex 4, Chapter 3, paragraph 4 states:

The Parties agree that $30 million (U.S.) of the funding to be provided by the United States identified in paragraph 3, above, is to be made available to Canada to assist in the implementation of this Chapter. Specifically, $15 million (U.S.) is to be provided in each of two U.S. fiscal years from 2009 to 2011, inclusive, or sooner (for a total of $30 million U.S.), with the following understandings:

(a) the bulk of this funding would be used by Canada for a fishery mitigation program designed, among other purposes, to reduce effort in its commercial salmon troll fishery; and

(b) Canada will inform the Commission as to how this funding was utilized in support of the mitigation program within two years of receiving such funding.

The Department has previously announced the mitigation program elements.

What requirements are there for providing updates to the United States on the implementation of the PST mitigation plan?

The Treaty between Canada and the United States stipulates that Canada will inform the Commission as to how this funding was utilized in support of the mitigation program within two years of receiving such funding. Canada has informed the US of the PST mitigation program and provided an update on the program implementation at the Pacific Salmon Commission Annual Meeting in February 2013.

What will happen after the term of the PST agreement expires (e.g. after 10 years)?

On December 23, 2008, Canada and the United States ratified new provisions for five chapters under Annex IV of the Pacific Salmon Treaty. The new fishing regimes came into effect January 1, 2009 through the end of 2018 and are contained in Chapters 1, 2, 3, 5, and 6 of Annex IV of the Treaty. The agreement replaces previous versions of these Chapters. The current provisions of the Pacific Salmon Treaty that relate to chinook salmon are contained in Annex IV, Chapter 3 (Chinook Salmon) and apply for the period 2009 through 2018.

The Pacific Salmon Treaty was first signed by Canada and the U.S. in 1985 to provide the framework through which the two countries work together to conserve and manage Pacific originating in one country and intercepted in the other the country. Elements of the Treaty have been renewed in 1999 and 2008. As laid out in the Treaty, the Pacific Salmon Commission (the bilateral body established to oversee the implementation of the Treaty) is responsible for reviewing the fishing chapters of the Treaty and, where appropriate, making recommendations to the governments of Canada and the U.S. for their amendment. It is anticipated that the current provisions of Annex IV will be reviewed prior to their expiration in 2018 and that a renewed agreement will come into force on January 1, 2019.

Canada’s representatives on the PSC include First Nations, commercial and recreational fishing interests, the environmental sector, and the Province of British Columbia, as well as Fisheries and Oceans Canada.

Will the Area G Total Allowable Catch (TAC) in the West Coast Vancouver Island (WCVI) Aggregate Abundance Based Management (AABM) be reduced as a result of the Voluntary Salmon Troll Licence Retirement program?

The Department’s 1999 An Allocation Policy for Pacific Salmon outlines the principles used to guide the Minister and the Department in the management and allocation of the Pacific Salmon resource between First Nations, recreational and commercial fish harvesters.

Under the current arrangements:

Pre-Season Post-Season
WCVI AABM Abundance Index 1.15 under-review
WCVI AABM Chinook TAC 196,800 under-review
AABM Recreational Catch 55,000 78,350
First Nations Catch 5,000 4,289
Area G Troll Catch 136,800* 123,930
Total AABM Catch 206,569

*The total Area G troll TAC is calculated as the difference between the WCVI AABM chinook TAC less offshore recreational catch and First Nations FSC catch.

The total allowable catch for the current year can be found in the Southern BC Salmon Integrated Fisheries Management Plan.

Will the Area F Total Allowable Catch (TAC) in the Northern British Columbia (NBC) Aggregate Abundance Based Management (AABM) be reduced as a result of the Voluntary Salmon Troll Licence Retirement program?

The Department’s 1999 An Allocation Policy for Pacific Salmon outlines the principles used to guide the Minister and the Department in the management and allocation of the Pacific Salmon resource between First Nations, recreational and commercial fish harvesters.

Under the current arrangements:

Pre-Season Post-Season
NBC AABM Abundance Index 1.38 under-review
NBC AABM Chinook TAC 182,400 under-review
AABM Recreational Catch 50,000 48,000
Area F Troll Catch 132,400* 74,660
Total AABM Catch 122,660

*The total Area F troll TAC is calculated as the difference between the NBC AABM chinook TAC less AABM recreational catch.

The total allowable catch for the current year can be found in the Northern BC Salmon Integrated Fisheries Management Plan.

Will commercial troll allocations be adjusted as a result of the Pacific Salmon Treaty Voluntary Salmon Troll Licence Retirement program?

In 2015 and based on recommendations from First Nations Salmon Coordinating Committee (FN SCC) and the Commercial Salmon Advisory Board (CSAB), the Minister of Fisheries and Oceans Canada approved several changes to the commercial salmon allocation framework including defined shares for commercial fleets at the species, fleet and fishery production areas for a period of 5 years with provisions to review the allocations after year 4, starting in 2015.

The commercial allocation plan, including troll fleet allocations, can be found in the Northern and Southern BC Salmon Integrated Fisheries Management Plans.

Do I have to pay tax on any voluntary payment I receive for retiring a salmon licence?

Yes. It is the responsibility of the applicant to seek independent advice regarding payment requested, income tax, financial, legal and other implications of retiring salmon troll licence(s).

Can I continue to designate a Roe Herring Seine licence to my vessel if I retire my commercial salmon troll licence?

Yes, current licensing policy on the designation of vessels for roe herring seine licenses is “the designated vessel must be registered as a Canadian commercial fishing vessel.” The vessel does not have to be eligible for any vessel based licence.

Can I continue to designate a Rockfish licence to my vessel if I retire my commercial salmon troll licence?

Limited entry party based licenses such as Rockfish, Red Sea Urchin, Green Sea Urchin, Sea Cucumber and Euphausiid must be designated to a registered commercial fishing vessel that is eligible for any vessel based licence (i.e.) salmon, schedule II species, geoduck, sablefish, halibut, crab, shrimp trawl, groundfish trawl, and prawn and shrimp by trap, a valid communal commercial licence or a valid salmon category N licence.

Can I withdraw my application to retire my salmon licence?

Yes, you may withdraw your application prior to the completion of the Relinquishment Agreement, provided that written advice of the withdrawal, signed and dated by all applicable signing authorities, has been received.