Rise of the investor class in the British Columbia Pacific halibut fishery

Abstract

Individual transferable quotas (ITQs) have been promoted as a management approach to address many of the economic and conservation challenges encountered in fisheries. ITQs are expected to improve fishery outcomes based on assumptions about who owns the quota, how ownership is transferred and how ownership incentivizes stewardship. Changes in the ownership profile of the British Columbia Pacific halibut fishery were examined over a 25-year period. This analysis revealed that, despite the halibut fishery traditionally being an owner-operator fishery, with owner-operators owning and catching 90% of the halibut in 1991, owner-operators have been increasingly marginalized in the fishery, catching 45% of the halibut in 2016 while owning 15% of the quota. The original grantees of quota from 1991 continue to own over half of the quota, and original grantees comprised half of the owner-operators active in the fishery in 2016. However, these original grantees have been steadily becoming a new investor class, non-existent in 1991, alongside new investors who have bought into the fishery as a source of income from leasing. A new dynamic has emerged in the fishery, with the separation of quota ownership from fishing operations. This raises questions about the assumptions underpinning the rationale for ITQs as an efficient market-based mechanism for fishery management and as a means to improve stewardship incentives. Also questionable are the equity, the long-term viability, and the objectives this fishery is serving with this new ownership structure.