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Appendix C - Cost Analysis for the Canadian Shellfish Sanitation Program Evaluation


Table of Contents


Cost Analysis for the Canadian Shellfish Sanitation Program

Introduction

Stratos has prepared this cost analysis working paper to document the costs and expenditures associated with the Canadian Shellfish Sanitation Program (CSSP), as part of a summative evaluation of the CSSP. The analysis assesses the costs associated with delivery of program activities by Environment Canada (EC), the Department of Fisheries and Oceans (DFO), and the Canadian Food Inspection Agency (CFIA). It provides a cross-cutting analysis of expenditures at the regional level.

The overall CSSP evaluation takes into consideration the Treasury Board's value for money profile tool that defines the term "value for money" as a means to assess two areas of inquiry: program relevance and performance. This cost analysis, focuses on the performance aspect, particularly in two areas: efficiency and cost-effectiveness. However there was insufficient information to conduct a reliable assessment of economy.

This report has been divided into five sections:

  • Section 1.0 provides an introduction and outlines the methodology and scope of the cost analysis;
  • Section 2.0 presents an overview of each CSSP partners' major activities and includes an analysis of costs and expenditures;
  • Section 3.0 provides an estimate of the value of Canada's commercial shellfishery;
  • Section 4.0 discusses the Value for Money of the industry with respect to two key areas: efficiency and cost-effectiveness;
  • Section 5.0 presents several findings based on this analysis and provides considerations for developing a better understanding of the CSSP's cost and expenditures.

Methodology

The data referenced in this report were provided from a number of sources during the document review and regional interview phases of the evaluation. Data provided from EC was produced from the department's internal financial tracking system which includes costs and expenditures for the CSSP program. Data submitted by DFO is based largely on the department's national Fisheries Enforcement Activity Tracking System (FEATS) which was implemented to record and monitor the outputs (i.e. level of effort in hours) of enforcement programs at DFO. For the purpose of this evaluation, DFO has converted FEATS data into monetary terms for CSSP activities conducted by the Conservation and Protection Branch, and provided an estimate of effort by the Resource Management Branch. Data pertaining to CFIA's CSSP activities were obtained largely from the CSSP Costing Model13. In all cases, department leads and CSSP program staff have had the opportunity to validate data with respect to their expenditures.

Scope and limitations

This analysis focuses exclusively on expenditures associated with federal activities under the CSSP. The data provided by DFO and CFIA have been generated for the purpose of this report and do not come from a system designed specifically for tracking actual CSSP expenditures14. Therefore, this data is only an estimate and may not reflect the precise costs of the program for these partners. Furthermore, there is a lack of consistent readily available information on expenditures and activities. As a result, information has been obtained from the most current sources.

Additionally, the analysis focuses on federal expenditures only as there is a lack of readily available information on the costs borne by non-federal entities (e.g. industry, provincial authorities) in order to assist in delivering the program. Program related services which may be provided by these non-federal entities but are not factored into this analysis include:

  • Water sampling and analysis in conditionally-open areas under management plans;
  • Water sampling and analysis conducted by volunteers;
  • Water sampling and analysis conducted by provincial authorities (e.g. PEI);
  • Biotoxin and Vibrio sampling conducted by industry.

Furthermore, federal costs associated with implementing relevant pollution prevention initiatives as specified in the Memorandum of Understanding (MOU) (e.g. Georgia Basin Action Plan, Saint Lawrence Vision 2000, etc.) or meeting the potential costs associated with internal and external pressures (discussed in Section 4.0) have not been included due to a lack of readily available information.

Finally, this cost analysis does not attempt to address the direct and indirect economic and social benefits of the shellfishery to Canadians and their communities. Although there are economic and social benefits directly linked to CSSP activities, information on what these benefits are and their value in monetary terms is limited.

Overview of CSSP Costs and Expenditures

Environment Canada

Overview of Environment Canada's CSSP Responsibilities
Environment Canada has two main program responsibilities under the Canadian Shellfish Sanitation Program (CSSP), which are implemented by the Department's National Marine Water Quality Monitoring Office. The primary responsibility includes undertaking sanitary and water quality surveys in order to make recommendations on the classification of shellfish growing areas. The secondary responsibility under the CSSP includes the promotion of pollution prevention and remediation of shellfish growing areas.

Environment Canada's Marine Water Quality Monitoring Unit's (MWQM) CSSP responsibilities as specified in the MOU for the CSSP are:

  • Sanitary, bacteriological surveys;
  • Determine source and extent of pollution and recommend the location of closures;
  • Recommend growing area classifications;
  • Maintain records;
  • Ensure proper application of lab procedures;
  • Ensure proper application of sampling procedures;
  • Promote pollution prevention;
  • Support DFO in notification on open/closures;
  • Provide information to DFO on water quality for areas;
  • Implement EC portion of management plans for conditionally approved areas;
  • Participate in the audit program.

Each year, Environment Canada completes classifications in new areas; resurvey existing areas to confirm the appropriateness of approved, closed, conditionally approved, and prohibited classifications; and ensures that together with CFIA the required evaluations of government/private laboratories conducting CSSP analyses are completed. In 2006, Environment Canada collected and analyzed 21,576 samples in 30415 growing areas spanning 10,332 km² of approved and conditionally approved growing areas.

The MWQM tracks information and reports on activities in four EC regions: Atlantic, Quebec, Pacific, and National Headquarters regions. Table 1 provides a characterization of CSSP sampling activities in 2006 for Environment Canada.

Table 1 - Characterization of Environment Canada's Sampling Activities by Region for 2006

Activity Atlantic Quebec Pacific Total
No. of growing area sectors surveyed 157 75 72 304
No. of samples 12,076 5,000 4,500 21,576
No. of km2 of Approved Growing Areas 4,205 2,314 3,353 9,872
No. of km2 of Conditionally App. Growing Areas 79 280 101 460

Reported Costs and Expenditures
For the 2006/07 fiscal year, Environment Canada's total costs and expenditures for delivering the CSSP are approximately $3.71 million16. Of this total, approximately $2.2 million has been allocated to 28.4 full-time employees (FTE figure includes casuals). Operating expenditures totalled approximately $1.45 million and an additional $62K is allocated to capital expenditures. Table 2 presents a summary of expenditures and staff effort by region for 2006/07.

Table 2 - 2006/07 Environment Canada Program Expenditures and Staff Effort

Region Effort (FTE) Salary Expenditures ($000)
Operating Capital Total
National Office 3.4 264 50 0 314
Atlantic 12.3 910 575 28 1,513
Pacific 9.2 714 341.1 34.1 1,089.2
Quebec 3.5 310 488 0 798
Total 28.4 2,198 1,454.1 62.1 3,714,200

(Source: Internal document, 2007)

Departmental Analysis
Of the $3.7 million allocated to CSSP activities, approximately 45% (approx. $1.67 million) of all expenditures are spent conducting bacteriological surveys17. An additional 19% (approx. $700K) can be attributed to conducting shoreline surveys. The remaining costs are attributed to: coordination and program management (17%); data management (9%); lab management (8%); and capital (2%).

The department's CSSP expenditures are highest in the Atlantic region (i.e. $1.5 million) and lowest in the National Headquarters region (i.e. $314K). The Pacific region maintains the second highest costs at $1.1 million followed by Quebec at $798K.

Regional Analysis
The Atlantic region spends approximately $1.5 million on CSSP activities. Of this total, $910K can be attributed to human resources (i.e. salaries) and $575K for operating costs. Approximately 65% of the costs for human resources are spent on conducting bacteriological surveys (40%) and shoreline surveys (26%) whereas the remaining costs for human resources are allocated to ongoing data management, program management, and lab management. Also, 82% of the region's operating expenditures are spent conducting bacteriological surveys (62%) and shoreline surveys (20%).

Quebec spends approximately $798K on CSSP activities; nearly $310K is allocated to human resources and $488K is spent on operating costs. Roughly 45% of the costs for human resources are spent overseeing contractors' activities for bacteriological surveys (26%) and conducting shoreline surveys (19%). An additional 31% of human resource costs are allocated to data management. Roughly 90% of the region's operation costs can be attributed to conducting bacteriological (86%) and shoreline (5%) surveys. This higher percentage of operating costs can be directly attributed to having contractors complete nearly all bacteriological surveys in Quebec.

The Pacific region spends approximately $1.09 million on CSSP activities. Of this total, $714K is allocated to human resources; $341K to operating costs; and $34K to capital expenditures. Approximately 65% of human resource expenditures are spent on bacteriological (34%) and shoreline (30%) surveys. Similarly, 75% of the region's operations costs can be attributed to bacteriological (60%) and shoreline surveys (15%).

Department of Fisheries and Oceans

Overview of the Department of Fisheries and Oceans' CSSP Responsibilities
The Department of Fisheries and Oceans' responsibilities for delivering the CSSP include:

  • Opening and closing shellfish growing areas;
  • Posting patrolling and enforcing shellfish closures in accordance with the Fisheries Act;
  • Controlling shellfish relaying operations and harvesting for depuration operations;
  • Implementing DFO portions of jointly developed Management Plans for "Conditionally Approved" areas;
  • Providing information to stakeholders on opening and closures of shellfish growing areas;
  • Maintaining records of the opening and closure of shellfish growing areas, as well as records of enforcement patrols;
  • Consulting with CFIA and EC prior to the commencement of any developmental or exploratory shellfish fishery or the issuance of any new licences or permits;
  • Participating in the CSSP audit program.

The program operates in and reports on five DFO regions: the Gulf, the Maritimes, Newfoundland, Pacific and Quebec, which include the following provinces: Newfoundland and Labrador, Nova Scotia, New Brunswick, PEI, Quebec, and British Columbia. Based on an estimate generated in 2002-03, there are approximately 46.47 FTE's dedicated to CSSP efforts in DFO.

The department's major activities with respect to the CSSP is posting, patrolling, and enforcing closed harvest growing areas (accounting for about 75% of the overall effort), and this is exclusively done by the Conservation and Protection Branch. The Conservation and Protection Branch tracks the hours spent on posting, patrolling and enforcing closures using the Fishery Enforcement Activity Tracking System (FEATS). This information for the years 2000 to 2005 is summarized in Table 3.

Table 3 - Summary of Hours of Enforcement

  2000 2001 2002 2003 2004 2005 2003-2005 Avg
GULF 2,468 3,210 4,945 4,213 6,616 4,883 5,237
MARITIMES 5,183 9,727 12,080 13,062 9,948 8,086 10,365
NEWFOUNDLAND 9 301 698 171 301 394 288
PACIFIC 1,750 4,972 6,200 5,841 5,287 4,627 5,252
QUÉBEC 2,954 4,306 6,454 4,494 2,653 3,069 3,405
Total 12,364 22,515 30,377 27,780 24,804 21,057 24,547

In 2005-06, the Conservation and Protection branch spent approximately 21,000 hours patrolling over 15,529 km² of closed, conditionally approved, and approved growing areas18.

Reported Costs and Expenditures
In the absence of a specific CSSP cost tracking system, the department has relied on converting the data on level of effort provided by FEATS for an estimation of costs for the Conservation and Protection Branch's patrol hours19 Resource Management costs have been estimated by the department by way of internal consultations or estimates provided in previous attempts to complete the costing model for the department. These data do not include operations and maintenance or capital costs.

Departmental Analysis
For the year 2005/06, DFO's total expenditures on CSSP were approximately $3,456,000. Roughly $2,577,000 went towards C&P activities (i.e. posting, patrolling, and enforcing closures), which accounts for 74% of the DFO program costs, and $899,000 went towards resource management, which accounts for 26% of the program costs. Table 4 summarizes DFO's estimated CSSP expenditures provided for 2002 and 2005.

Table 4 - DFO Expenditures on CSSP

2002-03 Expenditures
  C&P RM Total %
Gulf $524,800 $222,400 $747,200 22%
Maritimes $667,500 $286,800 $954,300 28%
Newfoundland $80,700 $130,700 $211,400 6%
Pacific $588,200 $125,000 $713,200 21%
Quebec $479,000 $222,900 $701,900 20%
Headquarters $100,000 $27,000 $127,000 4%
Total $2,440,200 $1,014,800 $3,455,000  

 

2005-06 Expenditures
  C&P RM Total %
Gulf $558,000 $167,000 $725,000 21%
Maritimes $1,049,000 $400,000 $1,449,000 42%
Newfoundland $37,000 $20,000 $57,000 2%
Pacific $545,000 $152,000 $697,000 20%
Quebec $348,000 $125,000 $473,000 14%
Headquarters $20,000 $35,000 $55,000 2%
Total $2,557,000 $899,000 $3,456,000  

The total overall program expenditures in DFO have not changed significantly since 2002; however expenditures have increased substantially in the Maritimes and have decreased in all other regions, most significantly in Newfoundland, Quebec, and Headquarters. It is important to note that the National program lead for CSSP in DFO was transferred from the Conservation and Protection Branch in 2002 to the Resource Management Branch in 2005. When comparing the hourly data presented in Table 3, it is apparent that the level of Conservation and Protection effort for the CSSP has decreased by 30% and yet there has been an increase in Conservation and Protection budget by 5% since 2002. Figure 1 illustrates the changes in Conservation and Protection effort between 2000 to 2005 for each region.

Figure 1 - Regional Canadian Shellfish Sanitation Program Hours
Figure 1 - Regional Canadian Shellfish Sanitation Program Hours

Regional Analysis
DFO spends approximately $1.049 million in the Maritimes, which accounts for roughly 42% of the department's total CSSP costs, the highest of all regions.

The Gulf and Pacific regions have the second and third highest expenditures respectively. These regions share similar program costs, accounting for 21% (i.e. $725K) and 20% (i.e. $697K) of the department's total CSSP costs.

The Quebec region ranks fourth in terms of overall CSSP costs for DFO at $473K. Newfoundland and the National Headquarters expenses are modest totaling $57K and $55K respectively.

The Canadian Food Inspection Agency

Overview of the Canadian Food Inspection Agency's CSSP Responsibilities
Within CFIA, the Program, Operations, and Science Branches are responsible for providing delivery of CSSP activities. Total FTE's at CFIA are approximately 34.420. The majority of the Canadian Food Inspection Agency's CSSP-related activities are captured under two major programs: the Marine Biotoxin Monitoring Program and the Quality Management Program. Responsibilities under the Marine Biotoxin Monitoring Program include routine testing of shellfish samples for Paralytic Shellfish Poisoning (PSP), Amnesic Shellfish Poisoning (ASP), and on a limited basis Diarrhetic Shellfish Poisoning (DSP). The Agency also regulates the processing and preparation of shellfish for the market, including post harvesting monitoring and sampling. The Quality Management Program (QMP) is the main control system used by the Canadian Food Inspection Agency to monitor the safety and quality of fish and seafood.

The Agency tracks information on activities and reports this information in the CSSP Annual Report. Information is presented for activities carried out in three CFIA regions: the Atlantic, Quebec, and the Pacific. In 2004-05, CFIA collected approximately 11,404 samples under the Marine Biotoxin Monitoring Program from 443 monitoring sites in harvesting areas in all three regions. An additional 840 samples were collected under the Quality Management Program from 202 federally registered plants21. Table 5 summarizes the data reported in the 2004-05 Annual Report.

Table 5 - 2004-05 CFIA CSSP Activities

Activity Atlantic Quebec Pacific Total
No. of biotoxin monitoring sites in harvest areas 228 75 140 443
No. of samples from harvest areas 4004 3281 4119 11,404
No. of Federally registered plants 145 16 41 202
No. of samples from registered plants 58 758 24 840

Reported Costs and Expenditures
With three branches involved in the CSSP (i.e. Program, Operations and Science) and no financial system for tracking CSSP resources by program activities, CFIA has relied on the CSSP costing model to estimate expenditures allocated to the program for 2005. By using this model, CFIA estimates that their total costs and expenditures for delivering the CSSP are $7.46 million22. The costing model provides a breakdown of costs and expenditures for four CFIA regions: Pacific, Quebec, Maritimes (i.e. New Brunswick, Nova Scotia, and Prince Edward Island), and Newfoundland, as well as Headquarters.

Table 6 summarizes the costs and expenditures accrued by the regions delivering CSSP activities in 2005. A more detailed summary of the Agency's costs and expenditures by activity can be viewed in Appendix A.

Table 6 - 2005 CFIA Costs and Expenditures

Major Activities - Marine toxin/pathogens control and processing controls
Region Pacific Quebec Maritimes Nfld. HQ Total
Marine toxin monitoring program 1,484,139 991,396 1,242,523 398,750   4,116,808
Vp monitoring program 52,440 0 18,876 0   71,316
Processing controls 504,037 78,940 882,684 108,654   1,574,315
Coordination & Admin. 322,421 189,061 392,369 136,404   1,040,255
Stakeholder contribution -614,553 -80,033 -31,040 -3,156   -728,782
Sub total 1,748,484 1,179,364 2,505,412 640,652   6,073,912
Management and control of harvesting areas 37,838 0 0 1,133   38,971
Capital 156,654 66,933 274,966 86,000   584,553
Laboratory Standards 91,867 32,000 91,867 67,383   283,117
Program Administration 75,583 90,833 99,860 66,214 150,000 482,490
Program Total 2,110,426 1,369,130 2,972,105 861,382 150,000 7,463,043

Agency Analysis
Approximately 83% of all CFIA CSSP expenditures can be attributed to conducting activities for marine toxins, pathogens control and processing controls. Of this total, approximately 56% is accounted for by the Marine Biotoxin Monitoring Program and 22% for the activities conducted under the QMP. The Marine Biotoxin Monitoring Program is the most expensive activity for all regions. Also, an additional 14% of this total can be attributed to coordination and administration activities carried out by inspectors, supervisors, managers, program specialists and support staff. The remaining 17% of program costs can be attributed to capital expenditures (8%), program administration and coordination (4.5%), laboratory standards (3.8%), and the management and control of harvesting areas (< 1%).

The department's CSSP expenditures are highest in Maritimes at approximately $3 million and lowest in Newfoundland at roughly $861K. The Pacific region maintains the second highest total at $2.11 million followed by $1.4 million in Quebec. Headquarters provides oversight and coordination services for approximately $150K.

Regional Analysis
The Marine Biotoxin Monitoring accounts for roughly 42% ($1.24 million) of the program costs in the Maritimes region. Approximately 30% ($882,684) of all Maritime program costs can be attributed to QMP-related activities, the highest cost of all CFIA regions. Coordination and Administration costs for marine toxin activities account for 13% of all program costs, at $392,369, also the highest cost for all CFIA regions. The Maritimes region also maintains the Agency's highest capital costs ($275K) and Program Administration and Coordination costs (approx. $110K) of all CFIA regions. These high costs are proportional to the level of commercial harvesting, especially processing activities that occurs in Maritimes.

The Marine Biotoxin Monitoring Program accumulates the highest costs for the Pacific region's CSSP activities. This activity accounts for $1.48 million, roughly 70% of the program's cost in this region, and is also the CFIA's most expensive activity. QMP activities account for approximately 24% of the region's costs whereas coordination and administration for marine toxin activities totals an additional 15%. The remaining costs can be attributed to capital (7%), laboratory standards (4%), program administration and coordination (4%), and management and control of harvesting areas (2%).

In Quebec region, the Marine Biotoxin Monitoring Program accounts for approximately 72% ($991K) of the region's program costs. Coordination and Administration of biotoxin activities is the region's second highest expenditure costing $189K, roughly 14% of the region's total expenditures. Overall Program Administration and Coordination is the third highest cost for the region totaling approximately $91K, nearly 7% of the region's costs. These high administration costs can be attributed to the ongoing management of contractors for gathering samples for the Marine Biotoxin Monitoring Program.

The Marine Biotoxin Monitoring Program is also the highest cost for Newfoundland totaling approximately $399K, or roughly 46% of the region's costs. Similar to the Quebec region, Newfoundland's second highest expenditure falls under the Coordination and Administration of biotoxin activities. This expenditure accounts for nearly 16% of the region's costs. QMP activities are the region's third highest costs accounting for 13% of all costs.

Summary of Departmental Expenditures

The total program expenditures for the CSSP are approximately $14.63 million. At the CSSP partner level, CFIA accounts for $7.46 million, approximately 51% of the total program expenditures. Environment Canada and the Department of Fisheries and Oceans maintain comparable expenditures at $3.71 and $3.46 million respectively.

Market Value of the Canadian Shellfishery

The CSSP makes an important contribution to maintaining the health and productivity of Canada's fishing industry23. Canada has one of the world's most valuable commercial fishing industries worth more than $5 billion a year and providing more than 130,000 jobs to Canadians. It is the economic mainstay of approximately 1,500 communities in rural and coastal Canada24. As the world's fourth-largest exporter of fish and seafood products, with exports to more than 130 countries, Canada's fish and seafood exports are valued at $4.3 billion. Canada exports an estimated 85%, by value, of its fish and seafood production.

The species monitored by the CSSP and that are tracked for landed values come from two sources: the wild-commercial industry and the aquaculture industry. Species monitored include: clams, quahogs, geoducks, oysters, scallops and mussels25.

In 2005, approximately 89,029 tonnes of CSSP-related shellfish were harvested from wild harvest areas. An additional 37,451 tonnes of shellfish were harvested from aquaculture facilities. Combined, the total landed value of these shellfish is approximately $203.8 million. Species harvested from the wild represent roughly 71% of the landed market value which equals approximately $145.1 million. The remaining $58.7 million is generated from the aquaculture industry. Tables 7 and 8 present a summary of Canada's wild-commercial industry in terms of landings and market value.

Table 7 - 2005 Commercial Landings, By Province (tonnes, live weight)26

Value of Commercial Landings, By Province ($000)
  NS NB PEI Quebec Nfld. Total Atlantic BC Total Canada
Clams/ quahaug/ geoducks 8,211 989 1,519 1,849 13,647 26,216 2,282 28,497
Oyster 168 337 2,740 0 0 3,245 0 3,245
Scallop 47,578 2,810 354 1,229 5,180 57,151 25 57,176
Mussel 0 104 0 7 0 111 0 111
Total 55,957 4,240 4,613 3,085 18,827 86,723 2,307 89,029

Table 8 - 2005 Value of Commercial Landings, By Province ($000)27

Value of Commercial Landings, By Province ($000)
  NS NB PEI Quebec Nfld. Total Atlantic BC Total Canada
Clams/ quahaug/ geoducks 7,799 2,099 3,087 2,425 15,398 30,809 24,742 55,551
Oyster 330 942 6,113 0 0 7,386 0 7,386
Scallop 67,024 4,273 629 1,901 8,079 81,906 143 82,049
Mussel 0 119 0 15 0 134 0 134
Total 75,153 7,433 9,829 4,341 23,477 120,235 24,885 145,120

Tables 9 and 10 present a summary of Canada's aquaculture industry in terms of landings and market value.

Table 9 - 2005 Canadian Aquaculture Production Statistics (tonnes)28

  Nfld. PEI NS NB Que BC CANADA
Clams 0 0 0 0 0 1,788 1,788
Oysters 0 2,857 232 1,857 0 7,638 12,584
Mussels 3,157 16,054 2,300 500 753 78 22,842
Scallops 0 0 11 0 0 226 237
Total 3,157 18,911 2,543 2,357 753 9,730 37,451

Table 10 - 2005 Canadian Aquaculture Production Statistics ($000)29

  Nfld. PEI NS NB Que BC CANADA
Clams 0 0 0 0 0 8,378 8,378
Oysters 686 1,950 5,500 0 0 7,959 16,095
Mussels 3,060 550 21,400 980 6,900 278 33,168
Scallops 91 0 0 0 0 988 1,079
Total 3,837 2,500 26,900 980 6,900 17,603 58,720

Atlantic Canada's shellfishery represents 77% of the total market value, approximately $156 million, for species covered by the CSSP. The Pacific region accounts for 21% of the total market value, which equals roughly $42.4 million. Quebec accounts for the remaining 2%, totalling approximately $5.3 million.

Cost-effectiveness and Cost-pressures

This analysis takes into consideration the Treasury Board's value for money profile tool that defines the term "value for money" as a means to assess two areas of inquiry: program relevance and performance. More specifically, this cost analysis focuses generally on cost-effectiveness and cost-pressures, but also provides commentary on efficiency.

Cost Effectiveness
CSSP partners are focusing the majority of their resources in areas where most of the resource is and the potential economic gains are greatest. For comparison purposes, Table 11 presents a summary of CSSP partner expenditures by region and compares it to the regional market value of the shellfishery30. For the purpose of comparing regional expenditures to regional market values, the total costs for the National region have been excluded.

Table 11 - CSSP Expenditures vs. Market Value of CSSP Shellfishery

  Pacific Quebec Atlantic Total
EC 1,089,200 798,000 1,513,000 3,400,200
DFO 697,000 473,000 2,231,000 3,401,000
CFIA 2,110,426 1,369,130 3,833,487 7,313,043
Total Expenses 3,896,626 2,640,130 7,577,487 14,114,243
Total Market Value 42,488,000 5,321,000 156,029,000 203,838,000
CSSP Costs as % of the market value 9% 50% 5% 7%

However, comparing the regional market value to regional costs and expenditures does not form a good basis for arguing that CSSP costs are proportional to the market value of the Canadian shellfishery. As previously noted in Section 3.0, Atlantic scallops generate the largest market value of all species covered by the CSSP in the Atlantic region but require the least level of effort. Subtracting these species from the total market value decreases the market value by $80 million, leaving an overall market value of $70 million. For comparison purposes, Table 12 presents a summary of CSSP partner expenditures by region and compares it to the regional market value after subtracting the market value of Atlantic scallops, Pacific geoducks, and Newfoundland clams which are considered deep water species and thus require less effort.

Table 12 - Program Costs as a Percentage of Re-profiled CSSP Market Value

  Pacific Quebec Atlantic Total
Total Market Value 42,488,000 5,321,000 156,029,000 203,838,000
Less scallops     80,096,000 80,096,000
Less geoducks 21,630,000     21,630,000
Less Nfld. clams     15,398,000 15,398,000
Sub Total 21,630,000 0 95,494,000 117,124,000
Remaining Market Value 20,858,000 5,321,000 60,535,000 86,714,000
Total Expenses 3,896,626 2,640,130 7,577,487 14,114,243
CSSP Costs as % of the remaining market value 19% 50% 13% 16%

After subtracting the market value of these three species, it can be concluded that the total CSSP costs are proportional to 16% of the overall market value. When analyzed at the regional level, it was found that the Quebec region's CSSP expenditures are proportional to 50% of their regional market value, the highest expenditure to market value percentage. The Pacific region maintains the second highest percentage with 19%, whereas the Atlantic region is third at 13%.

When considering the value for money associated with the CSSP program costs, it is also important to consider the economic consequences for Canada if the program did not exist. The impact of this risk was seen following the deaths related to the consumption of contaminated shellfish during the Domoic Acid outbreak in 1987. In addition to the deaths and illnesses associated with consuming contaminated shellfish, the loss of both domestic and international consumer confidence and concerns regarding shellfish consumption extended across to all fish products and nearly caused a collapse of the entire fish industry. Despite major marketing and public awareness efforts, it took a number of years before the fish market fully recovered from the crisis precipitated by Domoic Acid. If this were to happen today, Canada's $5 billion per year commercial fishery and its 130,000 fishery related jobs would be in jeopardy.

Cost Pressures
The data referenced in this report focuses exclusively on the current costs accrued by the CSSP partners and does not make reference to cost pressures driven by internal and external pressures. Anecdotal evidence provided during the evaluation has identified a number of pressures that are influencing or will influence the CSSP's performance and costs. Some of the major external pressures identified in the evaluation are:

  • There is increasing pressure imposed by trading partners on Canada to maintain equivalent programs for trade purposes (e.g. USFDA's standards, requirements, and guidelines, EU standards, etc.);
  • Canada's aquaculture industry is expanding;
  • Aboriginal interests to harvest for food, social and ceremonial and commercial purposes;
  • The results of fisheries management and other incidents and their outcomes (Krever Inquiry, Marshall Decision, etc.) are raising the expected federal government's standard of care in protecting public health and providing access to resources;
  • Operational costs for field operations are a rising expenditure for all partners. For instance, all partners are challenged with escalating fuel costs associated with their field activities.

Several internal pressures were also identified and are directly attributed to a lack of resources for delivering key elements of the CSSP. Thus, the lack of resources is:

  • Limiting the number of open areas and economic opportunities for Canadians;
  • Limiting the time and funds available for delivering public awareness campaigns;
  • Limiting the program's ability to conduct scientific research for understanding new and emerging problems (e.g. global warming) and improving scientific techniques.

These pressures need to be considered within the context of the value and importance of the CSSP's contribution to maintaining a healthy and productive fishery for Canada. Programs like the CSSP ensure that safe shellfish are available to Canadians and international trading partners. Without programs like the CSSP, Canada's fishing industry is in jeopardy and the potential collapse of the fishing industry is high. The ill-effects of a fishery collapse were illustrated during the 1987 Demoic Acid incident that nearly halted the sale of fish products in Canada and abroad. If this were to occur today, Canada's $5 billion industry and its reputation with international trading partners would be at risk.

Efficiency
The evaluation found that there is a lack of reliable and quantitative information to conduct a concrete analysis on the CSSP's efficiency. Thus, it is not possible to compare expenditures and activities for all three partners.

Despite the lack of readily available quantitative information, the results of the interview phase of the evaluation highlighted that CSSP activities for some CSSP partners are increasing despite no increase, or reduced levels of, funding. For example, anecdotal evidence gathered from EC indicates that the department has become more efficient by conducting more samples with lower levels of funding31.

Based on the limited quantitative data provided for the evaluation, we have identified that some CSSP partners may be providing fewer services for similar or comparable levels of funding. For example, the Department of Fisheries and Oceans is currently not providing the same level of enforcement effort (i.e. patrol hours) compared to 2003 levels but has allocated the same level of funding to CSSP activities. In light of this finding, it is noted that several interviewees commented that expenses for operations are rising and can affect the delivery of CSSP activities. In this case, stable budgets, combined with increasing costs associated with conducting patrols, are resulting in reduced time spent in the field.

Findings

Based on a review of the data and information submitted; and interviews with program and operations staff, and CSSP partner leads; and the analysis presented above, we found that:

  1. There is no centralized cost-tracking system for the CSSP. As a result, there is not a firm understanding of program costs at the program, departmental or regional levels. Aside from Environment Canada, there is no dedicated tracking of CSSP program expenditures taking place.
  2. Information on the full market value of the Canadian shellfishery is not readily available. This report provides an estimate of the commercial landings of the shellfishery, but does not account for secondary economic benefits or the market value of the Aboriginal and recreational shellfisheries.
  3. Departments involved with the CSSP do not have a full understanding of costs borne by non-federal stakeholders. Evidence submitted for the evaluation emphasizes that the industry and provincial authorities accrue significant costs that contribute to the program, and assist with conducting activities that are specified as federal responsibilities under CSSP. However, there has been no attempt to quantify these expenditures for the entire program.
  4. Program expenditures do not correlate well with the market value of the fishery. The high market value of the scallop. Geoduck, Newfoundland clam, and farmed mussel fisheries is not proportional to the level of CSSP effort. For example, scallops and geoducks require much less CSSP resources compared to other bivalve fisheries.
  5. Some CSSP costs are influenced by geographical differences. Activities conducted in isolated areas (e.g. sampling and enforcement in the Northern Coast of the Pacific region) are more expensive and time consuming resulting in increased costs for the program.
  6. There are numerous external and internal pressures that are straining or have the potential to put additional pressures on current resource levels. Accommodating a growing domestic industry and the need to meet international requirements are significant pressures for the CSSP. Thus, there is a need to better quantify baseline costs associated with delivery of the program and to identify the costs for the program to address these increasing pressures.
  7. Activities carried out by CSSP partners are often conducted in conjunction with other responsibilities. As a result, it is difficult to identify the true costs for the CSSP program. For example, CFIA lab analysis activities are often completed in parallel with other responsibilities.

Appendix A - CFIA Cost Model Summary for 2005

Major Activities
Marine toxin/pathogens control and processing controls
COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Marine toxin monitoring program 1,484,139 991,396 1,242,523 398,750   4,116,808
Vp monitoring program 52,440   18,876 0   71,316
Processing controls 504,307 78,940 882,684 08,654   1,574,315
Coordination and administration 322,421 189,061 392 ,369 136,404   1,040,255
Stakeholder contribution -614,553 -80,033 -31,040 -3,156   -728,782
Element total 1,748,484 1,179,364 2,505,412 640,652 0 6,073,912

 

Management and control of harvesting areas
COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Orders           0
Contaminated harvest area identification 3,060   0     3,060
Licensing (contaminated area permits)           0
Opening & closing of harvesting areas 19,667   0 1,133   20,800
Patrol, surveillance & enforcement           0
Product Tracking           0
Management of conditionally open areas 15,111   0 0   15,111
Stakeholder Communications           0
Stakeholder contribution           0
Contaminated harvest area identification           0
Element total 37,838 0 0 1,133 0 38,971

 

Capital
COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Major Capital 84,550 45,833 180,433 78,333   389,149
Major Capital 72,104 21,100 94,533 7,667   195,404
Element total 156,654 66,933 274,966 86,000 0 584,553

 

Laboratory Standards
COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Analytical Quality Assurance, Standards Development 91,867 32,000 91,867 67,383   283,117

 

Program Administration & Coordination
COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Interdepartmental Shellfish Committee, Maintaining of bilateral agreements, Maintaining national / regional web based information systems, Audit 60,396 86,333 79,299 63,714 135,000 424,742
Public Awareness and Education 15,187 4,500 20,561 2,500 15,000 57,748
Element total 75,583 90,833 99,860 66,214 150,000 482,490

 

COSTS, by element and subelement BC Quebec Maritimes (NB, NS, PEI) Nfld. NHQ Total
Program total 2,110,426 1,369,130 2,972,105 861,382 150,000 7,463,043

Notes: CFIA resources is derived from the CSSP costing model (Average cost)
It is based on the best estimate of actual cost and time spend on the activities, using salary +30 %
The model was completed by the by the staff intimately involved in the CSSP; It has not yet been validated by Managers

  1. Marine toxin program - includes the sampling and analysis costs.
    • Some of the sampling cost in BC and Quebec are contracted out;
  2. Processing control includes the Audits on the processing plants issuing export certificates and product inspections.
  3. Co-ordination and administration - Includes all the practical times of inspectors, supervisors and product inspections.
  4. Stakeholder contribution - primarily for taking the samples; This is deducted from the totals; The cost is calculated based on CFIA costs.
  5. Managing and control of harvesting areas - time to prepare the recommendations to DFO/EC closures
  6. Capital
    • Major - includes > 25K such as cars - 8 yr amortization laboratory equipment - 10 years amortization
    • Minor - includes < 25K, such as computers, laboratory equipment
    • It does not include building capital

Appendix B - Environment Canada's Expenditures for 2001 - 2006

Program Expenditures and Staff Effort - National Office
Expenditures ($k) 2001/ 2002 2002/ 2003 2003/ 2004 2004/ 2005 2005/ 2006 2006/ 2007 (est)
Salary* 67.1 96.9 100.9 107.5 136.1 264.0
Operating 37.7 47.5 49.9 49.9 52.8 50.0
Total $ 104.8 14.,4 150.8 157.4 188.9 314.0
Effort FTE** 1.0 2.0 2.0 2.0 2.0 3.4

* salaries estimated
** includes casuals

Program Expenditures and Staff Effort - Atlantic
Expenditures ($k) 2001/ 2002 2002/ 2003 2003/ 2004 2004/ 2005 2005/ 2006 2006/ 2007 (est)
Salary 719.4 761.8 816.7 797.0 852.1 910.0
Operating 647.0 549.6 552.2 570.1 573.3 575.0
Capital 300.8 599.5 0.0 0.0 0.0 28.0
Total $ 1667.2 1911.0 1368.9 1367.1 1425.5 1513.0
Effort FTEs 12.0 12.0 12.0 11.2 11.8 12.3

 

Program Expenditures and Staff Effort - Pacific
Expenditures ($k) 2001/ 2002 2002/ 2003 2003/ 2004 2004/ 2005 2005/ 2006 2006/ 2007 (est)
Salary 546.0 555.6 635.7 641.7 669.6 714.0
Operating 462.6 639.5 435.9 336.5 330.7 341.1
Capital 124.1 33.8 124.3 0.0 50.3 34.1
Total $ 1132.7 1228.9 1195.9 978.2 1050.6 1089.2
Effort FTE 9.2 8.2 8.2 9.2 9.2 9.2

 

Program Expenditures and Staff Effort - Quebec
Expenditures ($k) 2001/ 2002 2002/ 2003 2003/ 2004 2004/ 2005 2005/ 2006 2006/ 2007 (est)
Salary 166.0 166.0 166.0 166.0 166.0 310.0
Operating 555.0 555.0 550.0 522.0 525.0 488.0
Capital 50.0   50.0 50.0 50.0  
Total $ 771.0 721.0 766.0 738.0 771.0 798.0
Effort FTE 4.0 3.0 2.5 3.0 3.0 3.5

 

Program Expenditures and Staff Effort - Total
Expenditures ($k) 2001/ 2002 2002/ 2003 2003/ 2004 2004/ 2005 2005/ 2006 2006/ 2007 (est)
Salary 1,498.5 1,580.3 1,719.3 1,712.2 1,823.8 2,198.0
Operating 1,702.3 1,797.6 1,588.0 1,478.5 1,481.8 1,454.1
Capital 474.9 633.3 174.3 50.0 100.3 62.1
Total $ 3 675.7 4 005.3 3 481.6 3 240.7 3 436.0 3 714.2
Effort FTE 26.2 25.2 24.7 25.4 26.0 28.4

 


13 As part of the CSSP redesign effort, a costing model was developed in 2004. This initiative was an attempt to estimate the program's costs and expenditures at the regional and departmental levels. For CFIA, the data provided was completed by staff intimately involved in the CSSP but was not validated by Managers.
Costing model figures include level of effort, salaries, person hours, etc.

14 Again, CFIA data is provided from the costing model. The costing model is an estimate tool and does not track real expenditures.

15 Information on the number of growing areas surveyed was obtained from the CSSP 2004-05 Annual Report. Additional information on the km² for approved and conditionally approved areas has been provided separately by Environment Canada. This reflects data for 2006.

16 EC has not finalized expenditures for 2006-07, thus, information presented in Table 2 is an estimate. This data does not include amortized capital costs and only reflects capital expenditures for 2006/07.

17 Additional information on where Environment Canada's CSSP spending occurs at the regional level can be viewed in Appendix B. An additional analysis was completed to assess where spending is occurring and what for level of activity. This analysis can also be viewed in Appendix B.

18 Data on total km² provided under separate cover for 2006. It was anticipated that this data is more accurate then high estimates provided in 2005.

19 The cost for C&P is based on an average of hours patrolled for CSSP between 2003 and 2005, times the estimated average cost per hour of $100. This cost per hour is a national average. Some regions would have a cost above $100 and some below. All costs except minor capital are included in the hourly rate. Minor capital is derived from C&P expenditures and budget information (averaged over the three years 2004 and 2006, with the latter being a budget estimate) with the CSSP attribution based on CSSP's estimated percentage share of patrol costs. These range from as low 0.2% in Newfoundland to as high as 14% in Quebec.

20 Figure excludes FTEs providing laboratory services. No number was submitted.

21 The large majority of the samples in Quebec taken at the registered plants are for the biotoxin monitoring program and not taken as part of the QMP.

22 CFIA has estimated approximately $729K for stakeholder contributions which can be largely attributed to the Marine Biotoxin Monitoring Program. This sum has been subtracted from the overall estimate. Without stakeholder contributions, the CFIA's total costs for the CSSP would be $8.19 million.

23 re is limited information available on the market value of the recreational and aboriginal fisheries.

24 Source: Agriculture and Agri-Food Canada, Canada's Fish and Seafood Industry. Available from: http://atn-riae.agr.ca/seafood/industry-e.htm

25 It is important to note that Atlantic scallops do not require intensive or high levels of CSSP resources but generate the highest market value for the Atlantic region.

26 2005 Canadian Aquaculture Production Statistics
http://www.dfo-mpo.gc.ca/communic/statistics/commercial/landings/seafisheries/s2005pq_e.htm

27 2005 Value of Atlantic & Pacific Coasts Commercial Landings, By Province (thousand dollars)
http://www.dfo-mpo.gc.ca/communic/statistics/commercial/landings/seafisheries/s2005pv_e.htm

28 2005 Canadian Aquaculture Production Statistics (tonnes)
http://www.dfo-mpo.gc.ca/communic/statistics/aqua/aqua05_e.htm

29  2005 Canadian Aquaculture Production Statistics (tonnes)
http://www.dfo-mpo.gc.ca/communic/statistics/aqua/aqua05_e.htm

30 This table summarizes the information provided earlier in this report into a common format for analysis. The regions can be defined as: Atlantic - all provinces east of Quebec; Quebec; and Pacific (British Columbia). National figures are not included.

31 A five year summary on Environment Canada's expenditures was provided and can be viewed in Appendix B.

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