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Summary: Socio-economic analysis of the Species at Risk Act (SARA) listing decision for Okanagan Chinook Salmon

Chinook Salmon.
Chinook Salmon adult spawning phase (Source: Fisheries and Oceans Canada)

Region: Pacific
Populations: Okanagan Chinook
Scientific name: Oncorhynchus tshawytscha
COSEWIC Status: Endangered
SARA status: Under consideration

Context

The Okanagan population of Chinook salmon was first assessed in May 2005 as Endangered by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) in an emergency assessment. The status was subsequently re-examined in April 2006 and designated as Threatened. The Governor in Council declined to list Okanagan Chinook under the Species at Risk Act (SARA) in March 2010, citing reasons including the economic costs that would be incurred by commercial salmon fisheries, and that reduction in catch on its own would not be expected to provide for recovery of Okanagan Chinook (Canada Gazette, Part II, 2010). COSEWIC re-assessed the status of Okanagan Chinook in April 2017 and designated the species as Endangered, initiating the current SARA listing process.

A socio-economic analysis (SEA) has been completed to inform the current SARA listing decision for Okanagan Chinook. The SEA considers incremental costs and benefits relative to a baseline of activity that accounts for management measures in place, or known to be coming into force, in the absence of the proposed regulation (i.e., without vs. with listing).

Baseline management and economic profiles

To create the baseline scenario for this analysis, an average of the data from 2018-2021 was used.

Chinook salmon fisheries are managed by Fisheries and Oceans Canada (DFO). There are currently commercial fishery restrictions on Chinook retention in Area F salmon troll and Area G Chinook troll. In addition, a number of recreational salmon closures exist in Haida Gwaii, West Coast Vancouver Island and the North Coast. First Nations salmon fisheries also experience restrictions in these areas.

There is no fishing for salmon in the southern Okanagan (Freshwater Region 8) with the exception of Food Social, and Ceremonial purposes (licences negotiated annually) and recreational fisheries for sockeye salmon in Osoyoos Lake in years with sufficient abundance. There is mandatory release of Chinook salmon.

Management scenarios

List and do not list management scenarios were developed as part of the current listing processFootnote 1. The SEA assesses the economic impacts of proposed and mandatory measures in each scenario relative to the baseline.

Under the list scenario, the general prohibitions of SARA would come into effect. Individuals and their habitat would also continue to be managed and protected under existing legislation (Fisheries Act). Technical and biological feasibility of recovery would be determined during preparation of the recovery strategy, as well as the identification of critical habitat, to the extent possible. Additionally the following proposed management measures would come into effect:

Under the do not list scenario:

Costs of list and do not list scenarios

Impacts were assessed over a 12-year period, which is consistent with the timeframe considered in the Recovery Potential Assessment (DFO, 2021) and is representative of approximately 3 generations for the population. All monetary values are expressed in real 2021 Canadian dollars, and annualized and present values are calculated using a 7% discount rate, in accordance with Treasury Board guidelines.

Total monetized costs were estimated at $32.3 to $34.4 million (present value) over the 12 year period, or $4.06 to $4.36 million per year. In the commercial salmon fishery, which represents a majority of the cost impacts, listing would result in a reduction of almost the entire landed value of Areas F and G. The breakdown of the annual average incremental costs to interested parties are as follows:

Additional groups could be affected as a result of their share in potentially affected commercial salmon fisheries.

Table 1 below provides a detailed breakdown of the costs to businesses and Canadians.

Table 1: Incremental Costs m(in 2021 million $, 12 years, 7% discount rate)
  Present value Annualized average
Business/Industry Costs (lost profits) Commercial Salmon Fishery (lost profits) 23.7 3.0
Seafood Processing Sector 5.5 0.7
Lodge/Charter Recreational Fishing Service Businesses (consumer surplus) 0.5 0.06
Costs to Canadians Recreational Angling (tidal) (consumer surplus) 2.6 to 4.7 0.3 to 0.6
Total costs 32.3 to 34.4 4.06 to 4.36

The cost of research and outreach activities to government is unknown but is expected to be lowFootnote 3. Additionally, these costs may be covered by existing DFO and SARA program funding.

Under a do not list scenario, measures currently in place to recover Okanagan Chinook, such as outreach, monitoring, and habitat protection would be expected to continue and opportunities for enhancing these measures would be further investigated. However, as management measures for the rebuilding plan have not yet been finalized, the impact of implementing a rebuilding plan cannot be assessed at this time.

Benefits of list and do not list scenarios

Simulations of growth and recovery probabilities for Okanagan Chinook show different potentials for benefits. However, according to the Recovery Potential Assessment model, simulations suggest increases in future abundances of the population are conditional on habitat improvements or hatchery supplementation. Exploitation rate (fishing mortality) reduction, whether or not undertaken under SARA, has the potential to lessen rates of decline. However, eliminating exploitation alone will not result in population recovery. Additionally, Okanagan Chinook are a cross-border species, and the US accounts for the majority of fishery-related mortality in this population. In the absence of additional mitigation measures in US fisheries, the exploitation rate in US waters would likely remain high.

As a result, in the absence of specific information on recovery potential, incremental benefits cannot be estimated. Instead, a breakeven analysis was conducted to establish a range of benefits, or willingness to pay (WTP) values, that would be needed to offset the monetized costs and demonstrate a net benefit. The WTP is estimated by dividing the total incremental cost of the listing scenario by the number of Canadian householdsFootnote 4. For the listing scenario, the benefits value would need to be $0.27 to $0.29/year, per Canadian household, to equal the monetized costs.

To validate these breakeven values, they were compared to a valuation study for Chinook protection and recovery in the US (Wallmo and Lew, 2012). This study is considered representative of the management measures proposed for Okanagan Chinook if listed under SARA, and is the most current research in this area. This study estimated the annual WTP value of Chinook salmon recovery at CAD $60.50 per household (2021 dollars), after adjusting for inflation and exchange rateFootnote 5.

This analysis suggests that the breakeven values of $0.27 to $0.29/year are well below the range estimated in the Wallmo and Lew study, demonstrating that benefits of recovery, if achieved, could potentially be greater than costs.

Summary

Overall, the incremental costs under the list scenario are between $32.3 and $34.4 million present value, with an annualized value of $4.06 and $4.36 million. This is within the range of “high impact,” as defined by Treasury Board guidance. The incremental costs under the do not list scenario are unknown at this time as the rebuilding plan has not yet been finalized. Benefits of recovery could exceed the monetized costs, provided the recovery objective is achieved.

References

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2023-09-29