Commercial Fish Royalty Rate Increase
Bill or Act:
Fish and Wildlife Conservation Act
Summary of Decision:
A decision was made to proceed with the proposal. The proposal was implemented by an amendment to O. Reg. 664/98 (Fish Licensing) by O. Reg. 352/15. This regulation was filed by the Registrar of Regulations on November 26, 2015 and published in the Ontario Gazette on December 12, 2015.
August 25, 2015
Summary of Proposal:
The Ontario commercial fishery operates across Ontario, but primarily on the Great Lakes. Fish processing occurs throughout the province, with the largest concentration of processing plants found in southwestern Ontario.
While some fish are consumed in Ontario, 90 per cent of the fish are exported either to the United States (75 per cent of exports) or Europe (15 per cent of exports), mainly to large retailers or restaurant supply companies.
Each year, approximately 400 commercial fish licencees harvest a freshwater fish catch worth between $35 million and $40 million, employing hundreds of people, either directly in the fishery or indirectly in associated industries.
At present, commercial fishers pay royalties based on the annual landed value of the fish harvested. The 3.3 per cent royalty rate has not been adjusted since 1999 and is low relative to royalties paid for other Ontario natural resources such as fur (five per cent; and varies with pelt prices). It is also low compared to commercial fish royalties elsewhere in the world, which typically range from seven per cent to 10 per cent where royalties are collected.
Royalties to the Crown have ranged from $900,000 to $1.3 million annually over the last five years. Royalties collected vary due to annual fluctuations in landed value of fish that are subject to changing factors such as market conditions, the level of harvest and sustainable harvest allocations.
Commercial fish licence fees and royalties only recover some of the costs of MNRF's commercial fisheries management program.
The annual program cost of MNRF activities that support the commercial fish industry (including salary, operational expenses and capital replacement and repair costs) is approximately $6 million. Of this amount, $650,000 is transferred to the Ontario Commercial Fisheries Association to carry out commercial fish harvest data entry, royalty billing and a lake-wide fisheries assessment program and weight observer program on Lake Erie.
As part of the 2014-2019 Sustainability Strategy for the Fish and Wildlife Special Purpose Account, stakeholders were consulted on a broad range of initiatives the MNRF is considering implementing. The strategy was posted on the Environmental Registry for 45 days in 2014. As part of the Strategy, MNRF proposes to increase commercial fish royalty rate from 3.3 percent to 5 percent over 3 years. The proposed implementation timeline is an increase of 0.7% to 4% on January 1, 2016 and an additional 1% effective January 1, 2018 to 5%. The increase will recover administrative and overhead costs and provide a more fair return on the value of the fishery.
300 Water Street, Peterborough Ontario
January 1, 2016