Vol. 149, No. 14 — July 15, 2015

Registration

SOR/2015-177 June 29, 2015

FISHERIES ACT

Aquaculture Activities Regulations

Whereas the Governor in Council has made the Regulations Establishing Conditions for Making Regulations under Subsection 36(5.2) of the Fisheries Act (see footnote a) under subsection 36(5.1) (see footnote b) of the Fisheries Act (see footnote c);

And whereas the conditions established in those Regulations for the exercise of the regulation-making power of the Minister of Fisheries and Oceans under subsection 36(5.2) (see footnote d) of that Act have been met;

Therefore, the Minister of Fisheries and Oceans, pursuant to subsections 35(3) (see footnote e) and 36(5.2) (see footnote f) of the Fisheries Act (see footnote g), makes the annexed Aquaculture Activities Regulations.

Ottawa, June 26, 2015

GAIL SHEA
Minister of Fisheries and Oceans

AQUACULTURE ACTIVITIES REGULATIONS

INTERPRETATION

Definitions

1. The following definitions apply in these Regulations.

“Act”
« Loi »

“Act” means the Fisheries Act.

“aquaculture”
« aquaculture »

“aquaculture” means the cultivation of fish.

“aquaculture licence”
« permis d’aquaculture »

“aquaculture licence” means any of the following:

“barren substrate”
« substrat stérile »

“barren substrate” means benthic substrate on which there are no visible organisms.

“biochemical oxygen demanding matter”
« matière exerçant une demande biochimique en oxygène »

“biochemical oxygen demanding matter” means any organic matter that contributes to the consumption of oxygen that is dissolved in water or sediment.

“Monitoring Standard”
« Norme »

“Monitoring Standard” means the Aquaculture Monitoring Standard, as amended from time to time, that is produced by the Minister and maintained on the Department of Fisheries and Oceans website.

“soft bottom”
« fond meuble »

“soft bottom” means a benthic substrate that consists of loose particles such as clay, mud, marl, sand, pebbles, gravel, shells or small stones.

DELETERIOUS SUBSTANCES

Specified substances

2. For the purpose of paragraph 36(4)(c) of the Act, the following classes of substances deposited in the operation of an aquaculture facility are specified to be deleterious substances:

DEPOSIT

Conditions applicable to deposits

3. An owner or operator of an aquaculture facility may, subject to the conditions set out in sections 4 to 14, deposit a deleterious substance specified in section 2 in any water or place referred to in subsection 36(3) of the Act.

CONDITIONS

Aquaculture facility

4. The deleterious substance must be deposited in the operation of the aquaculture facility and the facility must be operated under an aquaculture licence.

Drugs

5. In the case of a deposit of a drug,

Pest control products

6. In the case of a deposit of a pest control product,

Measures to reduce detriment

7. (1) The owner or the operator of the aquaculture facility must, in depositing a deleterious substance referred to in paragraph 2(a) or (b), take reasonable measures to minimize detriment to fish and fish habitat outside the facility, having regard to

Feces and unconsumed feed

(2) In the case of an aquaculture facility that cultivates finfish and that is operated under an aquaculture licence that permits a standing biomass of more than 2.5 t or an annual production of more than 5 t, the owner or operator of the facility must take reasonable measures to minimize the deposit of fish feces and unconsumed feed, having regard to the factors set out in paragraphs (1)(a) to (c).

Information required before depositing

8. (1) In the case of an aquaculture facility located in tidal waters for the cultivation of finfish that commences operations after the day on which these Regulations come into force, the owner or operator of the facility must submit the following information to the Minister at least 300 days before making a first deposit of a deleterious substance in the operation of the facility:

Exception

(2) Despite subsection (1), if an aquaculture facility commences operations during the 300 days after the day on which these Regulations come into force, the owner or operator of the facility must provide the information referred to in paragraphs (1)(a) to (d) within 30 days after the day on which the operations were commenced.

Monitoring Standard

(3) The studies undertaken to obtain the information referred to in paragraphs (1)(a) to (d) must be conducted in accordance with the Monitoring Standard.

Non-application

(4) Subsections (1) and (2) do not apply to an acquaculture facility whose aquaculture licence, if issued or granted, permits a maximum standing biomass of 2.5 t or less or a maximum annual production of 5 t or less.

Applications affecting contours of footprint

9. (1) If the owner or operator of an aquaculture facility located in tidal waters that cultivates finfish makes an application under federal or provincial law that, if approved, would authorize any activity that is likely to increase the predicted contours of the footprint of the biochemical oxygen demanding matter deposited by the facility, the owner or the operator must conduct the studies necessary to obtain the information referred to in paragraphs 8(1)(a) to (d) and submit the information to the Minister within 30 days after the day on which the application was made.

Non-application

(2) Subsection (1) does not apply to an acquaculture facility whose aquaculture licence, if amended, permits a maximum standing biomass of 2.5 t or less or a maximum annual production of 5 t or less.

Substrate sampling and restocking

10. (1) In the case of an aquaculture facility that is located over a soft bottom and cultivates finfish in tidal waters in or adjacent to Quebec, Nova Scotia, New Brunswick, British Columbia, Prince Edward Island or Newfoundland and Labrador, the owner or operator of the facility

Visual monitoring instead of sampling

(2) The owner or operator of an acquaculture facility must conduct visual monitoring in accordance with section 11 instead of the sampling described in subsection (1) if the owner or the operator cannot obtain, from each of the locations specified in the Monitoring Standard, benthic substrate samples that

Visual monitoring of substrate

11. (1) This section applies to aquaculture facilities that cultivate finfish in the waters referred to in subsection 10(1) but

Monitoring and restocking

(2) The owner or operator of a facility referred to in subsection (1)

Notification of Minister

12. (1) The owner or operator of an aquaculture facility that cultivates finfish that is located in tidal waters in or adjacent to Quebec, Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland and Labrador must notify the Minister if the following occurs:

Notification — British Columbia facilities

(2) The owner or operator of an aquaculture facility that cultivates finfish that is located in tidal waters in or adjacent to British Columbia must notify the Minister if the following occurs:

Time for notification

(3) The owner or operator of an acquaculture facility that cultivates finfish that is located in tidal waters must notify the Minister within 14 days after the day on which the samples of the substrate were taken or the visual monitoring conducted, as the case may be.

Fish morbidity or mortality

13. (1) If fish morbidity or mortality outside the aquaculture facility is observed from any part of the facility within 96 hours after the deposit of any drug or pest control product referred to in paragraph 2(a) or (b), the owner or operator of the facility must immediately notify a fishery officer of

Minister’s directions

(2) If the owner or operator of an acquaculture facility is directed by the Minister to undertake measures under subsection 36(6) of the Act, and the Minister advises the owner or the operator that the direction is related to a notification made by them under subsection (1), the owner or the operator must cease depositing the drug or pest control product referred to in subsection (1) until they have complied with the Minister’s directions.

Annual report

14. The owner or operator of an acquaculture facility must submit an annual report to the Minister, and retain a copy of it, in accordance with section 16.

SECTION 35 OF THE ACT

Prescribed works, undertakings, activities and conditions

15. (1) For the purposes of paragraph 35(2)(a) of the Act,

Exception — deleterious substances

(2) The deposit of deleterious substances is not prescribed for the purpose of paragraph (1)(a).

Exception — Pacific Aquaculture Regulations

(3) Subsection (1) does not apply to any work, undertaking or activity carried on in any waters or place referred to in section 2 of the Pacific Aquaculture Regulations.

REPORT

Annual report

16. (1) An annual report must be submitted in a form acceptable to the Minister and contain the following information in respect of the operation of the aquaculture facility during the calendar year:

Due date of report

(2) An annual report must be submitted to the Minister on or before April 1 of the year following the year that is the subject of the report.

Copy of report to be retained

(3) An owner or operator of an aquaculture facility must retain a copy of the annual report in the facility for a period of two years after the day on which it is submitted to the Minister.

Information prior to coming into force

(4) For greater certainty, an owner or operator of an aquaculture facility is not required to include information in an annual report in respect of any period before the day on which these Regulations come into force.

CANADIAN FOOD INSPECTION AGENCY

Paragraph 35(2)(a) of Act

17. (1) For the purposes of paragraph 35(2)(a) of the Act, the disposal of fish by the President of the Canadian Food Inspection Agency for the purposes of fish pathogen or pest control and the Health of Animals Act is prescribed.

Deposit of deleterious substance

(2) The President of the Canadian Food Inspection Agency may, for the purposes of fish pathogen or pest control and the Health of Animals Act, deposit a deleterious substance referred to in paragraph 2(a) or (b) in any water or place referred to in subsection 36(3) of the Act.

COMING INTO FORCE

Registration

18. 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.)

Background

Global aquaculture production is growing rapidly. Since 1996, aquaculture production in Canada has more than doubled, and its value has tripled to nearly $1 billion a year. Aquaculture is increasingly important to Canada’s economy. It is estimated that over 90% of all aquaculture-related jobs are located in rural Canada, concentrated in coastal areas. Aquaculture occurs in almost every province, and the scope of aquaculture operations varies across the country, depending upon the species being farmed, the environment (marine, freshwater), and the culture technologies used. In 2012, salmon represented the greatest production volume of farmed fish in Canada at 62%, followed by mussels (16%), oysters (6%), and trout (4%).

Issues

The control of disease, pests, and biofouling, and the feeding of animals are critical animal husbandry activities in aquaculture, as they are in other food production sectors. In the aquaculture sector, these activities involve the deposit of substances, such as treatment products (drugs and pest control products) or organic matter (fish feces and feed, biofouling organisms, etc.), into waters.

The regulation of the aquaculture industry in Canada is shared between the federal and provincial/territorial governments. The federal government, through various statutes, regulates certain aspects of aquaculture-based activities. For example, the Fisheries Act includes authorities related to fisheries protection and pollution prevention. The Health of Animals Act provides for the control of fish disease and related matters. The Pest Control Products Act provides for the regulation of pest control products. The new substances provisions of the Canadian Environmental Protection Act, 1999 address environmental risks related to drugs. The Canada Shipping Act, 2001 includes provisions with respect to pollution from vessels and floating platforms.

Generally, provincial authorities license aquaculture operations (i.e. all activities related to the growing of finfish and shellfish), and authorize the allocation of space to carry out aquaculture operations (in British Columbia and Prince Edward Island, Fisheries and Oceans Canada has that role). Many jurisdictions also regulate for potential environmental impacts, animal welfare, fish health, and/or pest control product sale and use. Across Canada, provinces are responsible for the regulation of veterinary practices.

Overall, the environmental impacts of the aquaculture sector are well managed through the suite of federal and provincial regulations addressing aquaculture husbandry activities and the use of products to control diseases and pests. However, given the large number of regulators and the breadth of the regulatory requirements, the current regime can be cumbersome for aquaculture operators and confusing for Canadians who seek assurances that environmentally sustainable practices are required by law.

A consequence of this complex regime is that regulatory gaps exist and, despite multiple legal requirements established by multiple regulators, a risk of negative environmental impacts, however negligible, remains. Conversely, different jurisdictions require overlapping environmental protection measures, resulting in businesses paying to put in place different protective measures for different regulators to address the same (or largely the same) risk. Another consequence is that aquaculture operations can be subject to different requirements or standards of performance in different areas of the country. Different operating conditions create inequity between areas and subject businesses to economic disadvantages based on location. This is of particular concern with respect to small business and new entrants to the sector.

The existing regime can make it more difficult for the aquaculture industry and other federal agencies to use the tools needed to meet regulatory requirements and to support good husbandry practices. For example, events related to fish health issues can adversely affect the aquaculture business and the surrounding environment. Both aquaculture operators and regulators need certainty in the requirements associated with the deposit of fish health treatment products.

The Aquaculture Activities Regulations (the Regulations or the AAR) increase the coherence of federal and provincial/territorial regulation of aquaculture activities related to the control of disease, pests, and biofouling, and the feeding and cultivation of fish. The Regulations authorize licensed aquaculture facilities to carry out husbandry activities and also contain requirements that support the pollution prevention provisions of the Fisheries Act. These requirements are intended to minimize harm to fish and fish habitat while permitting essential aquaculture activities. This allows aquaculture operators to carry out important husbandry activities with greater certainty that activities are being carried out properly, while also ensuring that fish and shellfish populations are suitably protected.

In addition, the Regulations enable the federal government to monitor aquaculture activities nationwide, contribute to ongoing efforts to support fisheries protection and pollution prevention, and increase public transparency in regulatory practices and outcomes through public reports on the combined regulatory measures.

Description

Fisheries and Oceans Canada (DFO) has worked with its provincial/territorial and other federal regulatory partners to develop the Regulations to authorize aquaculture-related husbandry activities under section 36 (deposit of deleterious substances) and section 35 (fisheries protection) of the Fisheries Act. In addition, the Regulations also authorize the Canadian Food Inspection Agency to conduct activities related to sections 35 and 36 of the Fisheries Act for the purpose of aquatic animal health under the Health of Animals Act. The Regulations are ministerial regulations pursuant to subsections 35(3) and 36(5.2) of the Fisheries Act.

Before exercising any power under subsection 35(3) of the Fisheries Act, the Minister needs to take into consideration the factors prescribed in section 6 of the Fisheries Act. The Department has conducted an analysis to demonstrate how factors such as the contribution of the relevant fish to the ongoing productivity of commercial, recreational or Aboriginal fisheries; fisheries management objectives; whether there are measures or standards to avoid, mitigate or offset serious harm to fish that are part of a commercial, recreational or Aboriginal fishery, or that support such a fishery; and the public interest were contemplated.

The Regulations prescribe the classes of substances authorized to be deposited, and specify works, undertakings or activities authorized to be undertaken. These provisions enable

According to the Food and Drugs Act, a drug includes any substance or mixture of substances manufactured, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder, abnormal physical state, or the symptoms thereof in man or animal. It includes products used for restoring, correcting or modifying organic functions in man or animal, or for disinfection in premises in which food is manufactured, prepared or kept. According to the Pest Control Products Act, a pest control product is any product, device, organism or substance that is manufactured, represented, sold or used as a means for directly or indirectly controlling, preventing, destroying, mitigating, attracting or repelling a pest.

Health Canada’s Healthy Environments and Consumer Safety Branch conducts pre-manufacture and pre-import assessments of the potential environmental risk of drugs under the New Substances Notification Regulations of the Canadian Environmental Protection Act, 1999. Health Canada’s Pest Management Regulatory Agency conducts environmental and human health risk assessments in regulating pest control products in accordance with the Pest Control Products Act and its regulations. The Regulations complement the regulation of drugs and pest control products by regulating their deposit into waters for aquaculture purposes.

Biochemical oxygen demanding matter is organic matter that contributes to the consumption of oxygen dissolved in water or sediment. The deposit of biochemical oxygen demanding matter as a result of feeding and biofouling control (e.g. pressure washing) activities has the potential to impact fish and fish habitat. This is due mainly to changes in oxic state within sediments. Species composition varies with changes in the amount of oxygen available in the sediment (i.e. the oxic state) and species’ physiological need for oxygen to carry out basic life functions. Generally, the higher the oxygen content of the sediment the greater the biodiversity. The accumulation of organic matter on sediments can reduce the amount of oxygen available. The effect of the accumulation of organic matter will vary with the substrate type and species present. The potential intensity, extent and location of effects vary with hydrological and oceanographic factors (e.g. water depth, water currents, wave action).

Performance standards, such as sulfide concentrations, are commonly used to determine the impact of biochemical oxygen demanding matter deposits. The Regulations complement the existing controls on the deposit of biochemical oxygen demanding matter and create national coherence in the monitoring approach and remedial actions taken.

Under the Regulations, the authorization of the specified activities is subject to conditions, namely the following:

The reporting requirements enumerated in the Regulations enable the assessment of compliance with the Regulations, inform environmental risk assessments, and aid in the prioritization of efforts in aquaculture management. The reporting requirements also support public reporting on the Regulations, environmental outcomes, and the state of aquaculture activities in Canada. Information collected by Fisheries and Oceans Canada through the reporting requirements is to be shared with other federal agencies to enable risk management and the development of appropriate risk management measures, where appropriate.

Consultation

Fisheries and Oceans Canada has identified parties who may be impacted by the Regulations, including the aquaculture industry, provincial and territorial governments, First Nations and Aboriginal communities, the fishing industry, and environmental non-governmental organizations.

Since the initial development of the regulatory proposal in 2009, Fisheries and Oceans Canada has consulted with external parties to exchange information and solicit feedback. At the outset of this regulatory project, the proposed name for the Regulations was the “Fish Pathogens and Pest Treatment Regulations.”

In August 2010, a discussion document was posted on the Fisheries and Oceans Canada Web site, and an online consultation process took place for a period of 15 days.

On November 5, 2011, Fisheries and Oceans Canada published, in Part I of the Canada Gazette (Vol. 145, No. 45), the Notice of intent with respect to regulations for fish pathogens and pest treatment.

After receiving feedback in response to the notice, further consultations were held in February 2012. At that time, the scope of the regulatory project was expanded to include the deposit of biochemical oxygen demanding matter from aquaculture sites, and the title of the project was changed to the “Release of Aquaculture Substances Regulations.”

In February and March 2012, Fisheries and Oceans Canada consulted with the aquaculture industry and commercial fishing interests in Atlantic Canada and pursued consultations through several stakeholder meetings across Canada.

Stakeholder comments expressed through these past processes were taken into account in the design of the Regulations, as proposed and prepublished in the Canada Gazette, Part I, on August 23, 2014 (Vol. 148, No. 34).

Concurrent with the prepublication of the proposed Regulations in the Canada Gazette, Fisheries and Oceans Canada undertook 49 technical information sessions across Canada to provide additional information on the proposed Regulations and other regulatory and non-regulatory initiatives being undertaken by Fisheries and Oceans Canada to support a strong and robust aquaculture industry in Canada. These information sessions were targeted to a broad range of stakeholders familiar with, and interested in, all aspects of the aquaculture industry in Canada.

The 60-day comment period provided through the Canada Gazette prepublication resulted in the following comments received by Fisheries and Oceans Canada:

Benefits and costs

The Regulations entail an estimated total monetized cost to industry and Government of $548,398 in the first year. The present value (PV) of total costs is estimated to be $3,701,096 over a 10-year period, with the annualized average cost being $529,748.

The benefits of the Regulations have been qualitatively assessed and include modernized regulatory requirements for the aquaculture industry and enhanced public confidence in Canada’s management of the aquaculture sector.

Given the significant scope of these qualitative benefits, it is believed that they would outweigh the costs that would be imposed on the aquaculture industry and Government.

Baseline scenario

In the absence of the Regulations, there are already a wide range of regulatory and legislative measures in place for managing activities that would be authorized through the Regulations. For example, the management of pest control products is subject to the federal Pest Control Products Act and the management of the deposit of biochemical oxygen demanding matter falls under provincial regulations.

Regulations scenario

The Regulations require the following incremental measures from aquaculture operations: (1) having in place measures to minimize detriment to fish and fish habitat when depositing deleterious substances (i.e. drugs, pest control products, and biochemical oxygen demanding matter); (2) monitoring biochemical oxygen demanding matter deposits via free sulfide or visual monitoring proxies, in accordance with the Monitoring Standard; (3) having in place measures to mitigate the risk of serious harm to fish outside the facility when installing operating, maintaining, or removing an aquaculture facility; (4) annual reporting; and (5) notifying a fishery officer when mortality or morbidity of fish is observed, and keeping records at the aquaculture facility of such events.

Given existing regulatory requirements and documented practices, the majority of the requirements under the Regulations do not result in incremental costs to aquaculture facilities.

Analysis
Costs to Government

The mitigation and monitoring requirements included in the Regulations are based on existing federal and provincial legislation and compliance programs. The Department’s compliance and enforcement strategy for the Regulations will therefore focus on ensuring compliance with the reporting requirements of the Regulations.

The only incremental costs to the Department stem from communicating with the aquaculture sector with respect to the requirements of the Regulations, and from ensuring the continued submission, compilation and review of annual reports and biochemical oxygen demanding matter deposit monitoring submissions. The Department is dedicating existing resources to these tasks, including two weeks of a PM-04 classification in each of the six Fisheries and Oceans Canada regions to analyze and compile the data received from the aquaculture industry, and two months of an EC-05 classification from Fisheries and Oceans Canada in the National Capital Region to prepare a publicly available report. The Department is also handling biochemical oxygen demanding matter monitoring information submitted by industry (i.e. approximately one week, BI-03 classification).

In addition, an interdepartmental memorandum of understanding between Fisheries and Oceans Canada, Environment Canada, and Health Canada has been developed to improve coordination and consistency between federal partners, and to increase transparency of regulatory measures and outcomes. The cost of developing and implementing this memorandum of understanding is being absorbed from existing resources in each department. Current personnel at the three departments will be dedicating a small portion of time to meet on a required basis (i.e. approximately three times a year) to discuss and resolve memorandum of understanding related issues. The Department is dedicating an existing 0.25 full time equivalent, EC-05 classification, to coordinate these meetings and to prepare or distribute relevant documents.

The opportunity cost to Government has been estimated to be $57,800 annually, for a total PV of $405,960 (see the cost-benefit statement table). This cost does not require incremental resources, since existing staff will be employed.

Benefits to Government

The Aquaculture Activities Regulations provide better coordination, resulting in an integrated and effective management of risks. By comparison, the management of these activities by a variety of regulators prior to these Regulations presented regulatory gaps and consequential risks.

Costs to industry

There are incremental compliance costs resulting from the requirements to minimize the deposit of deleterious substances and to mitigate the risk of serious harm to fish and fish habitat. These requirements are not meant to set new standards or change aquaculture industry’s behaviour, but rather to document the practices they are already utilizing. Therefore, compliance costs are expected to be very low.

Industry’s annual reporting costs are based on the number of aquaculture facilities (1 927), rather than on the number of aquaculture businesses (472). This is to account for the fact that annual reports are required for each facility, rather than for each business. Industry’s administrative costs were calculated by using the Regulatory Cost Calculator.

All aquaculture facilities across Canada will bear an average annual cost of $240 per facility, which reflects the time spent by employees in keeping records of data and practices related to activities managed under the Regulations, in compiling and verifying this information for the annual report, and in submitting the report to the Department. It must be noted that this cost is based on operations of a certain complexity. Small aquaculture operations will probably require less effort and resources to meet this requirement.

Aquaculture facilities engaged in marine finfish will require reporting of the monitoring activity of the biochemical oxygen demanding matter deposit. This will represent an additional cost of $42 per facility every two years, and will be borne in most part, if not all, by larger firms.

The total annual administrative cost to industry stemming from annual reporting requirements has been estimated at $468,852.

In addition, all aquaculture firms will bear a one-time, upfront cost of learning about the new regulatory requirements, which has been estimated to be $42 per firm, and $19,629 for the entire industry.

The total PV for upfront and annual reporting costs has been estimated to be $3,293,019 (see the cost-benefit statement table). The average annualized cost per business is estimated to be $1,017. These estimates may be construed as the maximum administrative costs industry may bear in implementing the Regulations, since industry may already be reporting to aquaculture regulators on the use of drug and pest control products.

Finally, costs associated with notifying in the instances of observed fish morbidity or mortality is expected to be negligible. Available information indicates that, in relation to the use of authorized pest control products, no such events have occurred at aquaculture operations during the past decade. Assuming that this trend will continue over the period of this analysis, the occurrence of such unusual events is expected to be sporadic at the most, and its associated notification costs would, therefore, be negligible.

Benefits to industry

The Regulations modernize regulatory requirements in the aquaculture sector with respect to the application of the Fisheries Act to their activities (specifically for sections 35 and 36). This provides greater clarity with respect to rules concerning the deposit of deleterious substances. The Regulations facilitate access to the appropriate management tools to address disease or pest outbreaks, which reduce the industry’s economic risk and the potential impact to aquatic ecosystems.

Costs to consumers and Canadians, in general

Given the small magnitude of the reporting costs for industry, it is unlikely that these costs would be passed on to the consumer. It is anticipated that there would be no incremental costs to consumers or Canadians in general as a result of the Regulations.

Benefits to consumers and Canadians, in general

A more integrated and better coordinated risk management regime, together with public reporting of industry level data collected through the Regulations is expected to improve consumers’ confidence in aquaculture products and to enhance the value of Canada’s brand in export markets.

Cost-benefit statement
  First Year (2014) Middle Year (see note a) (2018) Final Year (see note b) (2023) Total (PV) (see note c) Annualized Average (see note d)
A. Quantified impacts ($2012) $548,398 $526,652 $526,652 $3,701,096 $529,748
Benefits By stakeholder n/a n/a n/a n/a n/a
Costs Industry:
  • Administrative
  • (Upfront)
  • (Ongoing)
  • Compliance
  • $19,629
  • $468,852
  • $2,117
  • n/a
  • $468,852
  • n/a
  • n/a
  • $468,852
  • n/a
  • $19,629
  • $3,273,390
  • $2,117
  • $2,795
  • $468,852
  • $301
Government $57,800 $57,800 $57,800 $405,960 $57,800
B. Quantified impacts in non-dollars — e.g. from a risk assessment
Positive impacts By stakeholder n/a n/a n/a n/a n/a
Negative impacts By stakeholder n/a n/a n/a n/a n/a
C. Qualitative impacts

Short list of qualitative impacts (positive and negative) by stakeholder.

  1. Government: Better coordination under an overall regulatory regime (proposed by the Aquaculture Activities Regulations), as opposed to the current management by a variety of regulators, would result in an integrated and effective management of risks.
  2. Industry: (a) A more integrated risk management regime in place under the Aquaculture Activities Regulations would improve the public confidence in aquaculture products and in the government capacity to adequately manage the aquaculture industry; (b) averted legal costs in potential lawsuits, if found in contravention of sections 35 and 36 of the Fisheries Act, would confer an indirect benefit to the industry. Depending on the level of penalties imposed and the frequency of violations, this may represent substantial potential cost savings by the industry.
  3. Consumers: Improved confidence in the sustainability of aquaculture products due to a better coordinated risk management regime in place under the Aquaculture Activities Regulations. Given the small magnitude of the reporting costs to aquaculture industry, it most likely would not result in an appreciable increase in consumer prices.

“One-for-One” Rule

Element A of the “One-for-One” Rule applies to these Regulations, as it imposes new administrative burden costs on business and Element B of the “One-for-One” Rule applies, as these Regulations are an entirely new regulation that imposes new administrative burden costs on business.

As described in the “Benefits and costs” section, the increase in administrative costs is linked to the reporting and notification requirements introduced under the Regulations. The annualized average (AV) of administrative costs increase is estimated at $409,513 for all businesses. It represents an annualized average of $868 per business, assuming the 1 927 facilities are equally distributed across the 472 businesses (i.e. an average of 1 927/472 = 4.08 facilities per business).

Small business lens

Statistics Canada business classification categories (i.e. small, medium, large) are based on the number of employees and annual gross revenues. Based on these classifications, most aquaculture businesses in Canada, 465 out of 472 businesses, are either micro businesses (i.e. fewer than five employees or under $30,000 in annual gross revenues) or small businesses (i.e. fewer than 100 employees or between $30,000 and $5 million in annual gross revenues).

The Statistics Canada business classification categories correlate with the types of aquaculture operations: finfish facilities are generally owned by large businesses, whereas shellfish and freshwater facilities are mainly owned by micro and small businesses.

Fisheries and Oceans Canada has designed the Regulations to minimize disproportionate incremental costs to small businesses. The small business lens does not apply to this regulatory proposal, as the incremental cost to businesses is lower than $1,000,000 annually and the cost per small business is estimated to be lower than $1,000 annually.

The main cost to industry under the Regulations is the annual reporting requirement, which requires an annual report for each facility. The annual report has nine sections, four of which can apply to micro and small businesses (i.e. shellfish and freshwater aquaculture facilities) depending on the types of activities undertaken in any given year by these facilities. It is therefore assumed that the administrative burden on micro and small businesses to complete the annual report would be half that of a large business (i.e. finfish aquaculture facility).

Using the Regulatory Cost Calculator and assuming that the 1 592 small facilities are equally distributed across the 465 small businesses (i.e. an average of 1 592/465 = 3.42 facilities per small business), the cost for the small business group to complete the annual report is estimated to be $820 per small business (at a rate of $240 per facility).

Taking the above assumptions into consideration, it is estimated that the Regulations would not result in any disproportionate burden to small businesses.

Rationale

Given that section 36 of the Fisheries Act prohibits the deposit of deleterious substances unless authorized by regulations, no non-regulatory options were considered. However, Fisheries and Oceans Canada identified three regulatory design options that would provide for the protection of fish and fish habitat: (1) the use of permits to authorize and regulate aquaculture activities; (2) the use of maximum limits for deleterious substance deposits included in regulations; and (3) the authorization of prescribed aquaculture activities within regulations when regulatory conditions are met.

After analysis of potential design options, and within the authority of sections 35 and 36 of the Act, Fisheries and Oceans Canada concluded that the most appropriate option would be option 3: to prescribe and authorize aquaculture activities in regulations under subsections 35(3) and 36(5.2) of the Fisheries Act when activities are conducted in conformity with regulatory conditions. This design facilitates compliance by businesses while imposing a lower additional administrative burden compared to the two other options.

The regulatory option was selected based on a number of factors. First, it relies on existing regulatory mechanisms and provides for the protection of fisheries at the lowest costs to all parties. It allows for improved integration of the Fisheries Act, the Canadian Environmental Protection Act, 1999, the Food and Drugs Act, and the Pest Control Products Act, and minimizes duplication with established provincial regulatory regimes. The Regulations also support Fisheries and Oceans Canada’s objectives to support sustainable fisheries and aquaculture through the presence of an effective, efficient, and transparent regulatory regime that builds public confidence in the management of the sector. Furthermore, the Regulations contribute to the long-term financial viability of the aquaculture industry by enabling integrated risk management and fish health management practices.

The Regulations have been designed to provide greater certainty for aquaculturists on regulatory requirements related to sections 35 and 36 of the Fisheries Act. The Regulations allow for

Implementation, enforcement and service standards

To improve integration between federal departments and their respective legislative responsibilities, and to increase transparency in the management of the sector, a federal interdepartmental memorandum of understanding involving Fisheries and Oceans Canada, Health Canada, and Environment Canada has been developed. This agreement identifies clear operational roles and responsibilities related to science review and oversight, information sharing, and compliance and enforcement activities. To ensure that the Regulations and associated Aquaculture Monitoring Standard (see footnote 1) evolve as new technologies and new scientific information become available, the commitment includes provisions for an executive committee that may establish special working groups to lead implementation activities. The memorandum also contains a provision to establish a two- to three-year science-based research and advisory process to support implementation of the Regulations and other initiatives under section 36 of the Fisheries Act. The results of this process would be used to inform cost-effective, risk-based post-deposit monitoring and remedial actions, with respect to drugs and pest control products, for future incorporation into the regulatory regime under these Regulations.

The design of the Regulations takes into consideration existing federal and provincial policies and regimes. Federal agencies will continue to lead in compliance and enforcement activities in relation to those aspects already within their legislative purview. For example, Health Canada’s Pest Management Regulatory Agency would continue to be responsible for regulating pest control products and enforcing pest control product conditions of registration or authorization. With these Regulations, existing agreements between federal and provincial agencies regarding aquaculture remain in place. Provincial aquaculture regulators are also expected to play a key role in supporting the implementation of the Regulations through their existing programs and tools. For example, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador already have requirements and practices in place regarding integrated fish health and pest management, mitigation and performance standards for sediment effects arising from the deposit of biochemical oxygen demanding matter, and information requirements for new farm sites. However, Fisheries and Oceans Canada now has new responsibilities for collecting/collating data reported and ensuring that the reports received are in accordance with standards and regulatory requirements.

The report to the fishery officer of observed fish morbidity or mortality would also be communicated to the Pest Management Regulatory Agency in situations where the tissue sample results indicate that a pest control product may have contributed to the mortality. The Minister of Health, under the Pest Control Products Act, has the authority to undertake a variety of actions ranging from further investigation and monitoring to cancellation of the pest control product’s registration or authorization. Actions taken would be linked to the severity of impact to fish populations.

For drugs, the power exists under the Food and Drugs Act to cancel the identification number of drugs. Cancellation results in the sale of the drug being prohibited which, in turn, results in the deposit of the drug not being authorized under these Regulations.

Fisheries and Oceans Canada has developed communications material and will meet with interested regulators and stakeholders to further explain the intent and implementation aspects of the Regulations.

To support consistency in application and implementation of the Regulations, a guidance document has been developed. This document is available through the Fisheries and Oceans Canada Web site and explains the requirements and expectations of the Regulations for aquaculture facility owners/operators. As well, the guidance document describes in clear terms the roles and requirements under the Regulations of all aquaculture regulators.

Achieving compliance involves the assessment of risks and identification of compliance issues, compliance encouragement, promotion and inspection, and investigations. Fisheries and Oceans Canada’s enforcement tools under the Fisheries Act include education, warnings, compliance orders, and prosecutions with fines of up to $2,000,000, imprisonment of up to three years, or both in the case of an individual [clause 40(2)(a)(i)(B) of the Fisheries Act]; fines are higher when a corporation is found guilty of violating section 36 of the Fisheries Act. For compliance matters related to the use of pesticides, Health Canada’s Pest Management Regulatory Agency is responsible for Pest Control Products Act enforcement activities. Their enforcement response tools under the Pest Control Products Act include education, warnings, product detention, and depending on the situation of non-compliance and the enforcement approach taken, maximum prison terms from six months to three years and maximum fines from $200,000 to $1,000,000.

Performance measurement and evaluation

Fisheries and Oceans Canada intends to conduct a performance review of these Regulations after five years of their coming into force.

Contact

Ed Porter
Manager
Aquaculture Policy and Regulatory Initiatives
Fisheries and Oceans Canada
200 Kent Street, Room 8N187
Ottawa, Ontario
K1A 0E6
Fax: 613-993-8607
Email: FPPTR-RTPPP@dfo-mpo.gc.ca