The Damsa Chronicles 5: Socio-Economic Benefits (1)...

The Damsa Chronicles 5: Socio-Economic Benefits From a Proposed Public-Private Partnership for Enhanced Brook Trout Fisheries in a Multi-Use Forest (1)

In 1989, Damsa initiated a 14 year study on the development, technical and commercial viability of using sexually altered stocks to create new trophy brook trout fisheries in nine small lakes previously devoid of sport fish located 50 km west of Thunder Bay, Ontario, Canada. The lakes in question were relatively inaccessible, owing to a rugged topography, received little or no use by the general public and were not considered for sport fish management by the government of the day. Most waters would not meet the Ontario Ministry of Natural Resources criteria for cold water fisheries. The fisheries were intended to provide the basis of a commercial tourism operation where clients would pay for the opportunity to angle for trophy brook trout. The project was launched under the Crown Land As a Development Tool program under the Ontario Liberal government. Over half a million dollars has been invested in feasibility studies.

A very healthy five pound brook trout about to be released.
New fisheries science/technology has been developed including the use of sterile and/or monosex Lake Nipigon strain brook trout as the base of the fishery. Brook trout fisheries were created with fish averaging five pounds at near maximum trophy development - with some fish exceeding the ten pound barrier. The fish were tested with angling experts. Overall, the technology has been developed to create exceptional fisheries - comparable to the best in the world. These brook trout fisheries at full development surpass others available in Ontario today.

At the time of the proposal, emphasis was placed on fly fishing and catch and release protocols, concepts for angling in Northern Ontario that were well ahead of their times but which now are readily embraced.

We examine here some of the Socio-economic benefits which may be derived from such fisheries. The concepts, infrastructure and angling requirements were derived from company funded studies, research and reviews, with financial support from both provincial and federal governments. The best available expertise was sought in both technical and tourism sectors. Guidance was provided from a steering committee with representation from the Ontario Ministries of Northern Development and Mines, and Natural Resources. The business plan was accepted by the Ontario Government in 2002, nearly 14 years after the program inception with minor modifications. It consisted of three phases, starting with the science, then progressing to day fisheries and culminating with a four season ecotourist operation, anchored by an upscale fly fishing lodge.

Program Objectives

The primary commercial objective was to create a successful tourism business based primarily on opportunities for angling trophy brook trout fisheries. The fisheries must be sustainable. The fisheries were to be developed with sexually manipulated stocks in waters previously devoid of sport fish.

The secondary objectives included:

  1. determine/define potential for successful tourism operations, including environmental, infrastructure and angler requirements.
  2. create/develop superior trophy trout fisheries that meet angler requirements.
  3. ensure no loss of existing use/enjoyment by public of Crown resources if Crown land is utilized.
  4. to meet Ontario Ministry of Natural Resources and Ministry of Environment Statements of Environmental Values and all Federal fishery/environmental requirements.

Business Proposal Rationale

Trophy brook trout are very highly valued by anglers and are arguably the premier sport fish of North America. Historically, trophy brook trout fisheries have been in decline for several reasons. One reason involves the "Tragedy of the Commons" which leaves less angling success per angler as angler populations increase and common (public) resources do not. Additionally, much brook trout habitat has been lost, principally in the USA, due to human development. The introduction of competing salmonids such as Atlantic, chinook, coho and pink salmon as well as rainbow and brown trout have likely also affected brook trout populations in the Great Lakes.

Should Damsa be successful in creating new trophy fisheries, a large potential client base is believed available, particularly in the USA. Here in Ontario there are small lakes believed to have potential to grow trophy brook trout. Many of these lakes receive little or no public use - do not contain sport fish - and thus may be an under utilized resource.

Potential Revenues

We examined in detail the potential for marketing these fisheries, including both day trips, and on site accommodation. Projected fees are an interrelated function of the quality of the fishery, the "wilderness" experience the angler enjoys, and the supporting hospitality infrastructure. These fees would be comparable to other high quality fishing operations in Canada and could range from $75 to $500+ US a day, depending upon services provided. A schematic shows the primary requirements for a successful operation.

As part of these investigations we took a detailed look at an upscale fly fishing lodge where clients practiced catch and release, as this operation had a number of advantages including a low consumption of the fishery resource and low environmental impact.

Damsa conducted extensive and in depth studies on the preferences and marketing requirements to attract clients for fishing big brook trout, with particular attention being paid to fly anglers. Studies have included original research by Gerry McEachern with detailed interviews with 36 potential customers who were identified as "leaders and key influencers" in shaping the tastes of other fly anglers in North America. Only a handful of these people were media people. The rest, including Ernie Schwiebert - one of the top fly anglers in the USA - were avid anglers who had traveled the world and visited the finest fly fishing resorts on this planet. Each of these people participated in a one-hour long interview, and were formally questioned on all aspects relating to fly fishing resorts. These interviews, together with other background demographics on fly anglers resulted in a thorough understanding of the experiential preferences of potential customers and their preferences in facilities and services, fishery quality, setting and accommodation, food, equipment, prices and trip duration.

Final recommendations for development included comfortable lodging - up to 30 guests, very high service ethic, good food, relaxing atmosphere, scenic quiet "wild" environment, and high quality trout angling for brookies and rainbows. Other eco/adventure tourism programs were to be promoted, such as cross country skiing, making the proposal a four season operation.

Accommodations were based upon a prototype not dissimilar to Bruce Hyer's Wabikimi Lodge at Armstrong, Ontario. It has a very basic and simple rustic charm with all the creature comforts of home. The proposed lodge would be nestled unobtrusively into the topography of the shoreline. The accommodations would be accessed from both inside and outside the lodge, offering additional privacy. Each room would have complete bath facilities. And while the lodge would be designed with anglers in mind, it would also serve as a complete base for those wishing to seek a little relief away from the stresses of much of modern life. Revenues would be based on double occupancy.

The always-critical food service component will be designed and implemented under the guidance of David Nobel, the much-acclaimed chef and co-owner of the Thunder Bay area's former Unicorn Inn. In spite of being hidden away in South Gillies, a tiny village in the Northwest Ontario hinterlands, remote from all major highways and tourist attractions, Mr. Nobel and his small hostelry earned a remarkable international reputation for consistent culinary and hospitality excellence. This included visits by celebrities, near-permanent status among the top fifty restaurants in the independent dining guide Where to Eat in Canada, and high praise in numerous other guides and periodicals, including En Route, National Geographic Traveler, Best Places to B&B in Ontario, and Lonely Planet Canada. In short, he has impeccable credentials for providing quality food to a discriminating clientele under challenging circumstances similar to our own.

The accommodations are centred on Thunder Lake with trails leading to the other waters. All waters were located within a 1300 ha study area that had very little development owing to a rugged relief and many wetlands.

Overall the public-private partnership promotes a strong support/enhancement ethic for healthy ecosystems (forests, lakes, wildlife, fauna) that would foster recognition of nature's rhythms and cycles.

Expenditures

Expenditures associated with the North of Eden lodge concept go well beyond those typically associated with these kinds of tourism developments because the main product marketed - trophy brook trout fisheries - are created and maintained by the company, not the Crown. The Crown would have a regulatory role but not be responsible for the creation and maintenance of the fishery per se. These expenses are not trivial and are the fundamental reason the Crown is not creating many of these fisheries in other locations in Ontario. Finding suitable habitat is the first major expense. The services of a large environmental company would typically run upwards of $40,000 - $50,000 for a complete fishery habitat survey for a single lake for our purposes. Economies would be gained for a group of lakes in a single location, but for the nine waters identified for a successful operation such as the North of Eden concept, habitat studies by a major environmental company will easily exceed $150,000 to meet our information requirements.

Most of these lakes would require winterkill mediation if they are to be used for trophy development, as in their present condition they are unable to provide year round habitat for trout growth and survival. Typical winterkill mediation for trout involves preventing dissolved oxygen levels in the lake from declining to less than 3 mg/l. Capital costs would be dependant on the size of the lake but mediation of winterkill limitations to industry standards on lakes in the study area could be expected to run a minimum of $10,000-$20,000 per lake with annual operating costs that could run even more depending upon access limitations.

Once suitable habitat is identified or created, a sustainable fishery management plan would be established to meet angler expectations. Our studies indicated that anglers require the opportunity to angle for trophies grown within a lake rather than trophy trout grown off site and subsequently stocked. Supplemental stocking with trophies grown off site, where necessary, would have to be handled with care as anglers will be unwilling to pay significant fees for "farmed" fish. Costs incurred in developing the fish for stocking and testing can be substantial; for initial stockings for the Damsa studies these costs worked out to $200 per fish stocked. Additional costs were required for evaluating the growth, performance and longevity of the treated trout. All told over half a million dollars were invested in the development and testing of these new fisheries.

With proven technology, the costs associates with fishery development become much more certain. Costs for access, lodge and supporting infrastructure would vary with facilities desired.

Crown Resources Required

The Crown resources required to stimulate this economic activity are not believed to be large. Given the public sensitivity on the disposition of Crown Resources, the company is not particularly interested in the purchase of large lands in the area in question, but rather in the right to share the resources for specified (tourism) purposes, mainly nine lakes (65 ha) for fisheries commercial development. Thus tourism development would require acceptance/accommodation by the other user groups for resource sharing, particularly the general public, hunters and anglers, the mining industry and forest managers. In our proposal, traditional land use activities - as defined as those undertaken in the last generation - would be honoured. A parallel could be drawn with forestry practices today on Crown lands where the public are allowed wide use of forests for a variety of activities - but the trees are managed (and protected) for commercial purposes.

Our preliminary discussion with many of the general public suggest that an agreement on sharing resources is not only possible but desirable, as with good planning, the DAMSA technology can be applied in the tourism sector with no net loss in resources to the general public, or other resource users. In fact net gains (enhancements) are probable and are the objective of any resource development proposal. The project proposal provides for additional resource development for the public (creation of new brook/rainbow trout fisheries using Damsa technology outside the study area) in exchange for a fixed term access to Crown resources for the company's economic viability. The company would require a long term lease on few hectares of land for the lodge location. The company would require restrictions on the use of the trails built by the company to access the lodge and angling waters. None of these requirements would be undertaken to hinder traditional access or activities. The company would also require that those accessing the angling waters for (other) traditional purposes do not participate in angling activities.

Benefits:

Economic

The economic benefits from this proposal are considerable. Based on this plan, the proposal (in 2002$) would over a 40 year period:

Environmental

Fisheries

New waters, new trophy brook trout fisheries
Damsa created new outstanding fisheries for trophy brook trout. These fisheries can provide excellent sport with fly angling that compares well with famous fly angling waters in other parts of Canada and the western USA. Similar fisheries are not found elsewhere in Ontario public waters. From on-site discussions with invited angling experts, it is clear that trophy fisheries developed by the company can meet the expectations of the most discriminating anglers.

As pointed out in the previous article the fisheries technology employed in the Damsa project offer the following advantages: more, bigger and longer living trout; protection of the genetic integrity of waters stocked; higher returns to anglers; reduced risk of mercury poisoning to wildlife where such risks exist; no risk of creating stunted populations and improved survival rates. All these factors can result in improved conservation of the resource.

The fisheries utilize the ecosystem approach to resource management as outlined in the guiding principles for the Ministry of the Environment. The fisheries are designed to conform to the guiding principle of sustainable development as outlined in the "Strategic Plan for Ontario Fisheries - SPOF 11". The fish stocked would meet health requirements for other fish (government or private) stocked in Crown waters. As such the fisheries are intended to meet OMNR's Statement of Environmental Values, and any future uses of the waters and environment would not be compromised.

Waters

The fisheries developed by DAMSA not only improve the resource base by creating new desirable fisheries, but in many cases the aquatic environments are improved in order to provide viable trophy trout habitat. Watershed management principles have guided development of water resources within the study area since the very beginning of the project. Indeed, most of the study area, itself, is defined on a watershed basis. Creating new brook trout fisheries is an indication of the high value placed on the water resources, as wild brook trout are the most difficult salmonid to manage and require the highest water quality of the salmonids. Creating and maintaining new brook trout fisheries is a major environmental achievement in its own right. Waters are managed within Ministry of the Environment protocols "Water Management, Policies, Guidelines, Provincial Water Quality Objectives of the Ministry of the Environment and Energy, 1994".

Forestry

Only a small percentage of the forest at the north and south edges of the 1300 ha study area has been cut within the last 20 years. Much of the remaining area is forested by birch and poplar with most stands over 80 years old and some over 100 years. Practically all readily - accessible marketable softwood has been harvested from this area over the past century, leaving most of the less valuable poplar and birch stands, much of which is now over-mature and exhibiting core rot and die back. Aside from recent (< 20 years) forestry operations, replanting efforts over much of these formerly - harvested areas appear limited to date and much of the area is now covered by alders and other low bush type vegetation of little or no commercial value. In short the forest is far from healthy and of relatively low economic value to the wood industry. Additionally, these forests are the most difficult to successfully rehabilitate and replant once the over-mature wood has been harvested.

The study area forms part of the Sustainable Forest License held on behalf of the local forest products industry by Greenmantle Forest Inc., based in Thunder Bay. Although the existing forest resource appears to be of relatively low economic value due to the aforementioned former selective harvesting of softwood and lack of regenerative effort, the over - mature nature of the remaining hardwood, and the difficult access to unharvested sectors, Greenmantle Forest Inc. has advised that the area is nevertheless important to the total area under license management and affects total allowable harvest calculations.

From on site discussions with Greenmantle Forest Inc., Damsa believes that it is possible for Greenmantle to continue with its activities on behalf of the forest products industry within the project, while preserving and rehabilitating those aspects of the natural environment necessary to support the proposed tourism operation. It is recognized that high end ecotourism as proposed here is not compatible with typical cutting operations carried out in Northwestern Ontario and that more intensive Silvaculture practices would likely be required. But both Damsa and Greenmantle agree that a rejuvenated/rehabilitated forest is in everyone's interest and that each company's natural resource requirements are not necessarily mutually exclusive. Damsa would contribute to the rehabilitation of the forest through road/trail access and support of other forest management planning activities such as the promotion of enhanced wildlife and views capes under the direction of Greenmantle. Such forest management activities would be conducted through the current forest management process. Damsa stands ready to work with Greenmantle and the Ontario Ministry of Natural Resources in the confident expectation that a mutually acceptable arrangement can be developed.

It is interesting to compare revenues generated under the proposed tourism operation with those anticipated from traditional woodlands management for the area in question. Such a comparison would involve a detailed forestry management plan for the area which is currently lacking. To gain some perspective, however we compared projected tourism economic impacts with the regional average of typical productive forestry operations (William L. Lees and Associates 1998). The total productive forest area is appears to be about 60% (800 ha) of the total area of 1300 ha encompassing the lakes. The unproductive area includes lakes, ponds, wetlands, buffer zones and forest too difficult to access. And if one were to assume a conservative "average annual cut" of 800 m3 (1.0 m3/ hectare/year) for the productive forest, an estimate of the annual economic impacts (1998$) amounts to: (1) direct and indirect local employment of 2.0 person years, (2) expenditures on labour, goods, and services of $131,000 year and (3) industry contributions of $44,000 (Table 1).

Table 1. Annual economic impacts resulting from a regional average woodland harvesting operation for an 800 ha productive forest in comparison with a proposed high end tourism operations for a similar area. Both operations are ecologically sustainable and not believed mutually exclusive.
Total study area (1300 ha) Regional Employment (Direct & Indirect) Total Regional Expenditures (Employees, Goods & Services) Contributions to Government (3)
Sustainable wood extraction - 800 ha @ 1 m3/ha/yr (1998$) (1) 2.0 $131,000 $44,000
Upscale, high end Damsa tourism operations/yr (2002$) (2) 11.2 $638,100 $436,950
  1. Pro rated from William L. Lees & Associates Ltd. 1998. The Economic Contribution of the Primary Forest Products Industry to Northwestern Ontario
  2. William L. Lees and Associates Ltd. 2004. The Damsa Wilderness Preserve Concept, Preliminary Project Socio-Economic Impact Analysis, Final Report
  3. Includes taxes (payroll, PST, GST) and licenses to operate

Revenues generated by the Damsa proposal are about five times greater than that for the wood industry. Recalling that the current forest in the study area is likely well below the industry average in economic value, one could conclude that the Damsa proposal is attractive indeed.

In summary Damsa believes that potential negative impacts of modified harvesting operations in the study area can be largely mitigated by cooperative measures between Damsa and Greenmantle and that the Damsa proposal can be a valuable potential contributor to the local economy, while leaving the forest products sector essentially unharmed.

The Public

Lakes like this one that winterkills can grow brook trout over ten pounds if habitat limitations are overcome. There may be ten(s) of thousands of them in Ontario alone
For the general public there are provisions for maintaining/improving the current wilderness setting through land use policies that do not allow degradation of the natural environment. Also, Damsa assisted with the upgrade and maintenance of 8 km of the Conmee forest access road for increased use of the forest as a whole by the general public. For anglers there would be new opportunities for outstanding angling experiences here in Ontario. Some would be found within the Damsa study area - for a fee while others would be on new public waters where the fisheries were created by Damsa.

Discussions with other stakeholders in the study area including the bait harvester, trappers, bear guides and mining prospectors strongly suggest that their objectives and Damsa's are not mutually exclusive and that gains can be made for all parties. With respect to mining much of the study area has a history of intermittent claim staking with about half the area currently (July 6, 2005) staked with four claims. The study area is intercepted by a several geochemical anomalies for both precious and base metals and, according Bernie Schnieders, Regional Resident Geologist, Thunder Bay, Ministry of Northern Development and Mines, has a high mineral potential. It should be noted however, that from information on the Ministry of Northern Development and Mines website, only 1 in 10,000 claims turns into a productive mine; consequently the potential for an operating mine is very very low. Prospecting activity in itself is not considered incompatible with Damsa's objectives. And improved access to staked claims is certainly desirable for the claimholders.

Summary

This brief overview of socio-economic benefits suggests that there would be no net loss to the public should this proposal for additional fisheries go forward. Furthermore there are real and significant opportunities for enhanced conservation and stewardship. Successful development of a new fisheries resource base, as proposed here, can drive a variety of tourism operations for many other locations - wherever Crown or private waters are under utilized and can be economically made into viable trout habitat.

A framework for individual tourism/resort development has been developed and identifies key considerations for tourism application. An upscale fly fishing operation, as per the proposed "North of Eden" style, can generate revenues well in excess of one million dollars per year on a very limited resource base. Several lakes totaling perhaps a hundred hectares or so are all that would be required, along with an associated "wild" environment and a lodge base. The overall objective of this resource development proposal is to recognize and maintain existing uses within the study area while improving the very high wilderness aesthetic, wildlife and fauna values. Extensive marketing studies clearly indicate that there is a very large national and international client base from which to draw. Thus these small underutilized lakes offer a major new economic opportunity for Ontario.

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