The collapse and subsequent moratorium on Atlantic cod has had profound economic, political, and sociological consequences in Atlantic Canada. Following the 1992 moratorium, the federal government transferred billions of dollars to Atlantic fishers to compensate for the rise in unemployment. It has since failed to reform fisheries management in Atlantic Canada, where unemployment remains persistently higher than the remainder of the country.
Despite several exogenous factors that contributed to the decline of Atlantic Canada’s cod stock, the federal government’s mismanagement of the country’s fisheries effectively in the years preceding the 1992 moratorium also played a crucial role. More disturbing, however, is the failure to produce meaningfully reform fisheries management. Instead of consulting with local communities about sustaining their ecosystems or pursuing alternative management schemes, the federal government opted to uphold the status quo, which has failed to improve cod stocks or create alternative employment prospects for those affected. The status quo, in fact, creates an incentive to rely on government transfers, reinforcing unemployment.
Iceland, much like Canada, experienced the collapse of its herring stock in the 1970s, prompting the government to implement a four-year moratorium, during which the government reformed fisheries management and implemented an individual transferable quota (ITQ) regime. The ITQ is a property rights mechanism that affords shares as a percentage of the annual total allowable catch (TAC) to individual fishers and fishing fleets to encourage long-term sustainability and fleet economization. In Iceland, for instance, the ITQ management system applies to the majority of the country’s fisheries, resulting in greater fleet economization and stock regeneration above sustainable levels.
The similarities between Iceland and Newfoundland constitute a natural experiment, whereby the success of Iceland’s ITQ management system can inform Canadian fisheries reform. Furthermore, British Columbia adopted a limited ITQ system, which, according to the Department of Fisheries and Oceans (DFO), has yielded positive results (although opponents assert that these results are misleading).1 There are, nevertheless, very clear lessons to be learnt from Iceland’s fisheries management system, which has since facilitated Iceland’s herring stock regeneration above pre-moratorium levels, in addition to strengthening Iceland’s other marine species stock.
The most obvious lesson is relinquishing managerial control of Canada’s fisheries to the provinces, which are invariably familiar with managing their local resources. In this way, local fishers (who were, in the years preceding Atlantic cod’s collapse, frequently ignored), regional scientists, and industry experts, all of whom are capable of offering sound advice to fishers and politicians, have a greater capacity to manage their local environment. Furthermore, adopting an ITQ system reduces waste by compelling fishers to economize their catch (the added effect of which is increased landed catch values and reduced overcapitalization).