Fisheries and Oceans Canada expects to flounder under mounting climate costs

Hurricane Fiona left a trail of destruction across the Atlantic Coast in September 2022 wreaking havoc on wharves, fisheries, vessels, and gear and the federal government’s pocketbook.

In response to the climate disaster, Fisheries and Oceans Canada (DFO) has had to earmark more than $563 million to deal with Fiona’s aftermath, including damage to 142 out of 184 small craft harbours on the Atlantic coast. 

However, internal communications obtained by Canada’s National Observer suggest that Hurricane Fiona was just a harbinger of escalating climate-related costs and operational threats DFO expects to face in the coming years. With a shrinking budget, the department is bracing for more severe financial and logistical challenges as the climate crisis intensifies.

In 2024, the federal Department of Finance surveyed 52 federal agencies to assess climate-related financial risks. A document obtained through a freedom of information request reveals DFO’s survey response and offers a snapshot of the agency’s key vulnerabilities, including infrastructure damage, increased marine rescues, ecosystem degradation and threats to fisheries and marine navigation.

As the cost of mitigating climate impacts continues to surge, DFO is contending with an $85.5 million budget cut last year and expects $235 million in cuts over the next couple of years.

Yet the federal agency is already facing a yearly budget deficit of more than $100 million that hamstrings its ability to maintain its critical buildings, equipment, and other assets. 

Coastal communities pay price of DFO underfunding

Successive federal governments have all chronically underfunded and under-valued DFO leaving it struggling to keep the Coast Guard afloat and adequately protect fisheries and oceans, said Lisa Marie Barron, NDP MP for Nanaimo–Ladysmith on Vancouver Island.

Canada has the longest coastline in the world, an internationally recognized seafood industry, and thousands of Indigenous and coastal communities that rely on DFO services and infrastructure, all at increasing risk from climate change, she said.

“It’s so short-sighted,” said Barron, who is the party's DFO critic and serves on the parliamentary committee on Fisheries and Oceans. 

“It’s the department that often gets the bottom of the barrel of investment and seems to be a low priority.” 

Small craft harbours, essential for fishers and coastal community economies, have suffered neglect and are being battered by extreme weather, she said. Fisheries monitoring also suffers, hindering sustainable stock management as warming waters shift migration patterns, Barron added.

“There are so many reasons why we need to be prioritizing the protection of our oceans, and have the necessary information and resilient infrastructure to adapt to the climate as it changes.” 

Infrastructure and maintenance challenges

DFO manages an extensive range of infrastructure and assets, including bases, search and rescue stations, harbours, wharves, hatcheries, laboratories, field camps, light stations, telecommunications towers, and bridges. Maintaining the portfolio is already a challenge due to aging infrastructure, inflation, and evolving federal requirements, the DFO document said. 

Responsibility for all DFO assets is divided between three custodians: the small harbour program, the Canadian Coast Guard and the real property department, which is responsible for the remaining facilities owned or leased by DFO to support the ministry’s programs or services. 

Reporting to the finance ministry, DFO said it was already worried about its ability to maintain its property, let alone the additional pressures of climate change.

“The department is not in a position to absorb additional costs associated with climate change impacts and preventative adaptation measures intended to guard against damage,” DFO said.

“The department's three property custodians already struggle to manage their aging infrastructure portfolios with current budgets.” 

In particular, DFO’s small craft harbours program with 949 sites, including 691 core fishing harbours, provides crucial infrastructure for aquaculture, fisheries and tourism in remote Indigenous and coastal communities. 

One in eight harbours are in unsafe or poor condition at present, or will be within three years, DFO said, while the remaining harbours are in fair or better condition but without adequate investments are expected to degrade rapidly due to extreme weather and climate changes. The replacement value of all the small craft harbours exceeds $7.1 billion.

The agency’s real property portfolio includes approximately 200 sites, including things like hatcheries, laboratories and field stations that have a total replacement value of $8.1 million. The DFO department must manage its portfolio within its approved annual budget of $204 million. 

However, the real property department faces a yearly funding shortfall of $108 million if the portfolio is evaluated using the Treasury Board’s maintenance and replacement cost guidelines, the DFO document shows.

Climate disasters, such as floods and fires, further divert resources from regular maintenance, DFO said. For instance, the Spius Creek Hatchery in Merritt, B.C. required $1.5 million in emergency repairs after a devastating provincial flood in 2021. Despite these efforts, ongoing flooding continues to undo repairs and strain regional resources.

However, the department is developing and using tools like a national geo-database that indexes the climate vulnerability of infrastructure to prioritize which small craft harbours or facilities get attention first and to guide the design and repairs necessary to make them more resilient, DFO said.

Spike in marine rescues and environmental emergencies 

Climate change is also increasing pressure on the Canadian Coast Guard’s ability to conduct search and rescue operations and respond to environmental emergencies, including diesel and oil spills from damaged vessels.

“The CCG already faces fiscal constraints in addressing climate change impacts,” DFO noted.

Extreme weather events, sea ice retreat, and unpredictable marine conditions will exacerbate response challenges, driving up labour, transportation, equipment and emergency intervention costs, DFO added. 

Storm surges are reshaping coastal waterways, eroding harbours, and depositing sediment that alters navigation routes and threatens the economic viability of communities reliant on marine infrastructure, DFO said. As Arctic ice recedes, increased vessel traffic in uncharted waters also raises the likelihood of groundings and spills, further straining Coast Guard resources.

The CCG operates more than 120 vessels, including icebreakers, patrol and science ships, search-and-rescue lifeboats and radar and communication stations, as well as more than 17,000 buoys, beacons, and channel markers. Valued at $1.4 billion, Coast Guard assets are vital for safe and efficient maritime navigation. However, climate change will increase demands on these resources, DFO stressed. 

Fisheries and ecosystem degradation

DFO’s mandate to manage fisheries and protect marine ecosystems is also at risk. Warming oceans are altering fish migration patterns, threatening food security and increasing the need for additional research and will necessitate the closure of some harbours while requiring new ones elsewhere.

“There is a risk that the department may not have the capacity to coordinate, plan, prioritize, and adjust its services and programs at a pace that will allow it to effectively respond to rapidly changing environmental conditions impacting aquatic ecosystems,” DFO said.

For example, plummeting Pacific salmon stocks are vulnerable to climate-driven changes such as rising water temperatures and wildfires and floods that cause habitat destruction. The federal government committed $647 million over five years in 2021 to address the crisis, but DFO warns more large-scale interventions will be needed to curb the biodiversity collapse and protect marine species on the cusp of extinction. 

The Newfoundland cod collapse is a good illustration of the economic devastation poor fisheries management can cause, Barron stressed. Other important DFO programs to deal with derelict vessels littered across the coasts and clean up massive amounts of ghost gear and ocean plastics have already been axed. 

Investing up front to prevent climate problems and pollution is more cost-effective than responding after disasters or emergencies, she added.  

“If the biggest polluters were taxed fairly, this is where this money could go, into ocean protection, sustainable fisheries and coastal communities.”

Rochelle Baker / Local Journalism Initiative / Canada’s National Observer