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Atlantic Integrated Commercial Fisheries Initiative

(AICFI) Component 4 – Commercial Fisheries Development

Opportunity Source (CFDOS)

Application Procedures

Published By: 2009 © Minister of Public Works and Government Services

Aboriginal Policy and Governance Fisheries and Aquaculture Management Paper Fisheries and Oceans Canada Cat. No.: Ottawa, ON ISBN: K1A 0E6 Project Management: PDF Cat. No.: 978-1-100-12579-4 Kevin Fram ISBN: Fs23-542/2009E-PDF Director, Atlantic Integrated Commercial Fisheries Initiative (AICFI),

Aboriginal Policy and Governance

TABLE OF CONTENTS Introduction .................................................................................................................. 1 Confidentiality Issues................................................................................................... 2 Steps in Making an Application to AICFI Component 4............................................. 2 Examples of Proposals that could be Submitted for CFDOS Support ......................... 5 ANNEX “A” – Sample Component for Application Template ................................... 8 Annex “B” – Overview of Contents of Component 4 Applications ............................ 9 ANNEX “C” - Business Case Template – AICFI Component 4 Applications............ 10

Introduction A major emphasis of the AICFI program is to support the enhancement of Mi’kmaq and Maliseet Fist Nation (MMFN) commercial fishing enterprises (CFE) governance, management, administrative and operational structures and practices in order to build capacity and enhance long-term sustainability of the CFE. In support of these program goals, Component 4 provides critical, practical assistance to MMFN CFEs which complements other capacity building activities, including CFE management and technical human resource development, being carried out through AICFI Components 2 and 3. As such, Component 4 represents a very important part of AICFI. The main feature of AICFI Component 4 is a Commercial Fisheries Development Opportunity Source (CFDOS) to which MMFN CFEs that meet the prerequisites can apply for CFE capacity building support. The contents of Component 4 applications, the process whereby applications are submitted, how the applications are assessed and by whom, and follow-up activities constitute the major part of this document. A significant level of funding is available through the Commercial Fisheries Development Opportunity Source (CFDOS). However, the level of support available to each applicant is limited and a rigorous application review process is required to achieve a fair distribution. Applicants may also need to be encouraged to seek other supplementary sources of support to ensure that the proposed project will meet the critical short-term capacity-building needs of the CFE. In some cases, AICFI program support, including CFDOS, should be considered as complementing other, more substantial, sources that may be available. With the broader approach taken, the Business Development Team (BDT) can be of assistance to MMFN CFEs by advising on the strategic use of other capacity-building aspects of the AICFI program and additional outside funding opportunities and sources. The following information, discussion and suggestions are presented in sections titled: confidentiality issues, examples of projects eligible for CFDOS support, details of application, detailed breakdown of general implementation process. A list of the main parties involved in AICFI Component 4 implementation is provided below.

The list of parties involved in the general implementation of AICFI Component 4 includes:

• Mi’kmaq and Maliseet First Nation (MMFN) Communities and their Commercial Fishing Enterprises (CFEs)

• Atlantic Policy Congress (APC) of First Nation Chiefs Secretariat Inc. • Business Development Team (BDT) • AICFI Program Authority, DFO HQ • DFO Maritimes, Gulf and Québec Regional Staff (including Aboriginal Program

Coordinators) • Third-Party Evaluator (Evaluator) • Application Review Board (ARB)

AICFI Component 4 – Commercial Fisheries Development Opportunity Source (CFDOS) 1

Confidentiality Issues A major factor in long-term sustainability and commercial success of a fishing enterprise is confidentiality surrounding planned capacity building and business development strategies. In order to participate in Component 4 of the AICFI program, an MMFN community is required to have developed a Commercial Fisheries Business Development Plan (BDP) either independently or in conjunction with the Business Development Team. However, the BDP remains confidential unless the MMFN chooses to release it. The Commercial Fisheries Business Development Plan does not have to be released even where the plan’s implementation is being supported through Component 2.3 of the AICFI program. Likewise, the plan does not have to be supplied as part of a Component 4 application. Instead, a Business Case, developed by the CFE with possible assistance from the Business Development Team, is attached to the Component 4 application confirming alignment of the proposed work with the MMFN’s Commercial Fisheries Business Development Plan. The AICFI Component 4 general implementation process has been designed to accommodate this need for confidentiality while still ensuring fair and equitable assistance is provided in response to Component 4 applications. The process necessarily puts special responsibility on the Business Development Team and the Third-Party Evaluator to provide the required assurances to MMFNs regarding confidentiality of their Commercial Fisheries Business Development Plans. Consequently, the Team will provide information in the Business Case concerning alignment of proposed projects with the applying CFE’s capacity building and long-term sustainability goals, to make an evaluation process possible. The rigorous application evaluation process will also be carried out under strict confidentiality by those involved. When projects are approved, details of the work being carried out remain confidential. Decisions concerning release of business and technical details of the work being carried out under approved projects rests with the MMFN community doing the work. Steps in Making an Application to AICFI Component 4

Please note: In order to make an application for Component 4 support, communities must have an active AICFI Commercial Fisheries Business Development Plan and an operational Fisheries Management System (or equivalent).

Text in this section sets out the process in detail. Figure 1 below provides a flowchart representation of the general implementation process MMFN communities have been made fully aware of the AICFI program and application procedures for the various components of the program including Component 4. However, experience with changes in personnel suggest that continuing reinforcing efforts are needed to ensure all eligible communities remain informed about application procedures and other considerations. In particular, there is a need for follow-up information to MMFN communities in relation to the application process for AICFI Component 4 participation.


An application consists of a completed application form template plus attachments, namely: a work plan, schedule and breakdown of estimated costs, a business case, and a supporting letter from the Chief and Council. Interested MMFN CFEs must prepare an application for Component 4 support, consistent with the guidelines and application form templates, provided in the AICFI Application Guide, and submit the completed application to the DFO Program Authority (See Annexes “A” and “B”). The Business Development Team (BDT) is available to help develop the CFE’s business case at no additional cost to the community (See the Business Case Template Annex “C”). Where a broader approach to proposed work is taken by the CFE, the BDT may make suggestions for complementary funding options. On receipt of each application DFO Program Authority checks to confirm that the form has been completely filled out and all attachments are present. If any parts are missing, DFO returns the application to the CFE for follow-up. If all parts of the application are in place, DFO forwards it to the appropriate Regional staff for comment, the Third-Party Evaluator (Evaluator) for assessment, and the Application Review Board (ARB) for consideration. Employed by DFO, the Evaluator will act as a technical assistant to the Application Review Board in evaluating applications, particularly in relation to the technical feasibility and practicality of work proposed and its alignment with CFE capacity-building and sustainability goals of the AICFI program. The Evaluator first ensures that the application and attachments contain all necessary technical and other information. If any information is missing, the application is returned to DFO with an explanation. DFO informs the community of the deficiency and invites resubmission, with necessary additional supporting information. If all information is available, the Evaluator assesses the application and supporting documentation for internal consistency, practicality, and relevance to CFE capacity building and sustainability, visits the community to discuss the application and confirm that the BDP is being implemented by comparing the BDP with the application. He also checks on whether the FMS is in use, and then prepares a report and recommendations. DFO Québec, Gulf and Maritimes Regional and Area staff review each application, comment on any assumptions relating to resource access, and provide any other up-to-date information that might be relevant to the application. The resulting comments and information, including the most current community profile for the applying CFE, are forwarded to the DFO Program Authority. When the Evaluator’s report/comments and information from DFO Regional and Area staff are received and considered, the DFO Program Authority passes selected supporting documentation to the Application Review Board (ARB) to aid in their deliberations. The ARB will consist of three (3), including at least two First Nation, members with broad economic development experience. The Executive Director of the Atlantic Policy Congress (APC) of First Nation Chiefs Secretariat Inc. and the AICFI Program Authority, DFO, will attend ARB meetings as ex-officio members and provide Secretariat support.


The ARB carries out its work and reports with recommendations on each application to the DFO Program Authority. Recommendations are to include: priority of the work proposed, level of CFDOS support, and, where necessary, optional/supplementary funding sources. The ARB should identify other existing complementary funding sources where the proposed work includes, for example, acquisition of a very expensive piece of equipment, or is clearly part of a broader thrust relating to CFE development that requires funding from more than one funding source. The ARB can also make suggestions and offer assistance relating to how these options could be pursued by the community. Once the DFO Program Authority receives the ARB’s report, departmental processes are applied, including use of evaluation tools, to determine level of support available and DFO informs the CFE. If the support available is acceptable to the CFE, a Contribution Agreement (CA) is negotiated with the MMFN community. The MMFN CFE begins work set out in the CA and AICFI program support is applied as agreed in the CA. Project management oversight begins. Interim and final reporting process is carried out consistent with the CA and as required in the AICFI program. When the project work/activity has been completed and the final report submitted by the CFE, DFO personnel or their representative visits the community to discuss implications of the final report. Outcomes of this session will be filed with DFO Program Authority for reference. Examples of Proposals that could be Submitted for CFDOS Support There is no intention to tell MMFNs what they can propose for CFDOS support as long as the proposed work falls within the eligibility parameters of the AICFI program. In particular, the proposed work must be aligned with capacity building and sustainability on the harvesting side of a commercial fishing enterprise that has or is well on its way to implementing a commercial fisheries BDP, including documented governance, and has adopted and is using the Fisheries Management System (FMS) or equivalent for vessels/species included in applications for CFDOS support. Broad headings for the work eligible for Component 4 support are given in the AICFI Application Guide and include:

(1) Fishing vessel upgrade/ replacement; (2) Fishing operations upgrades; (3) Commercial fisheries related on-shore facilities upgrades; and (4) Other needs (e.g. minor changes to round out existing access).

In order to allow for advance consideration of projects that might be put forward for CFDOS support, the following examples are listed for each category. Priority will be given to supporting project applications made under categories 1, 2 and 3 below. Category 4 applications will be considered only when the CFE has no outstanding needs/commitments under categories 1, 2, and 3.


(1) Fishing Vessel Upgrade/Replacement projects might include: • Vessel replacement with new construction or existing (previously used or

refurbished vessel) • Engine upgrade or replacement • Propulsion system upgrade or replacement including gearboxes, propellers, bow

thrusters, etc. • Deck layout, deck and hull reinforcement, and other structural changes • Stabilization (tanks, beams, etc.) • Bridge and navigational improvements (e.g. advanced electronics, navigation and

safety systems, communication upgrades, etc.) • Vessel modifications to accommodate changes in fishing methods and product

handling/holding (e.g. freezing, refrigeration and insulation, etc.) • Energy efficiency modifications

(2) Fishing Operations Upgrade projects might include:

• Equipment needed for changes in fishing/fleet operations, fishing strategies, tactics and methods, e.g. improved (energy efficient, species and/or size selective) fishing gear more precisely adapted to vessel capabilities.

• Providing specialized equipment and facilities to enable cooperation between vessels in one fishing operation or in a fleet (to allow for allocation of duties based on specific capabilities of individual vessels).

(3) On-shore Facilities Upgrade projects might include:

• Ice making, storing and delivery facilities and systems • Bait preparation, holding and delivery facilities and systems • On-loading, off-loading, craneage/moving equipment and systems • Fishing gear maintenance and changeover facilities (e.g. warp measurement

capabilities) • Obsolete/worn-out gear, toxic material and other waste disposal facilities • Dockside refrigeration facilities

(4) Other Needs projects might include requests for:

• Acquisition of additional licences/quotas commercially available to round out existing communal access, e.g. to make the harvesting of this community license/quota more economically viable. CFE Proposals must follow the DFO procedures already in place for acquiring licences/quotas.

• Other capacity building projects not covered under categories 1, 2, or 3 above. CFDOS projects must be completed in the fiscal year for which funding has been approved. In accepting a project, DFO does not commit to support under AICFI and follow-on or other project submitted for consideration in subsequent years. It is recognized that very large projects may involve several phases/steps. While it may be helpful to describe the entire undertaking when applying for CFDOS support for one component of the work, approval will be limited to that one component. CFDOS support is not implied for other or subsequent components.


Upgrades to/replacement of vessels and fishing equipment are rarely accomplished through off-the-shelf purchases. Some of the required feasibility and design activities may be included in the BDP, or may be further developed during BDP implementation (supported under AICFI Component 2.3). Such an internal/confidential techno-economic feasibility/ review provides both the CFE and the BDT with an objective assessment of the technical viability and economic benefits of the proposed work. The Business Development Team (BDT) is also available, at no additional cost to the CFE, to assist with the business case needed to support the project proposal. The business case should be written after the work plan, schedule and estimation of related costs have been completed The BDT should prompt the CFE to obtain the necessary technical assistance to prepare a work plan, scheduling and estimation of related costs. The CFE may apply for funding under AICFI Component 2.3 to retain this expertise. For smaller projects, the techno-economic feasibility/review supported under 2.3 may provide an adequate assessment of the proposed work needed to complete the work plan, schedule and estimated costs section of the application. In the case of larger projects, where only preliminary feasibility work is supported under 2.3, there may be a need to include in the application for CFDOS support for some or all of the following “soft costs” related to the work, in addition to actual equipment costs:

• Detailed techno-economic feasibility work to identify the most practical solutions, including consideration of possible impacts on fishing vessel stability, registration and licencing, and initial definition of parameters for the work and costs involved;

• Design work (engineering, naval architecture, technical drawings) once the project is defined;

• Identification of facilities (shipyard/dry dock) where the planned work will be carried out;

• Professional assistance to represent client’s interests and to monitor progress and ensure work is carried out to specifications, oversee sea trials and any subsequent modifications, and liaise with government regulators to ensure the upgrades are in line with existing regulations and that any required changes to vessel registration/licencing are implemented.

Once larger projects have been approved for CFDOS support, any increased or new costs identified as a result of “soft cost” activities that are in excess of the CFDOS support already approved must be funded from other sources.



ANNEX A Sample Component 4 Application Template

Figure 2 shows the sample application template that appears in the AICFI Application Guide for use by First Nation communities when applying for support under Component 4 – MMFN Integrated Commercial Fisheries Diversification. When completed, the template should provide all information needed to fully identify the community and commercial fishing enterprise (CFE) applying for support and the project/work proposed. The completed template provides the starting point for the Third-Party Evaluator and the Application Review Board and assists in focusing assessment of the work proposed. All information provided by a community and in the application and supporting documentation must be held in confidence by the evaluator and the resulting report and recommendations supplied only to AICFI Project Authority, DFO. Figure 2

ANNEX “B” Overview of Contents of Component 4 Applications

Applications for CFDOS support can be submitted by any MMFN CFE that has implemented the Fisheries Management System (FMS) or equivalent, and has completed and implemented (or is well on in the process of implementing) an AICFI commercial fisheries Business Development Plan (BDP). Guidelines for AICFI Component 4 Applications are given in the AICFI Application Guide together with an application form template. An application consists of the completed application form, covering letter from Chief and Council, Work Plan, Schedule and Breakdown of Estimated Costs, and a Business Case supporting the proposed work.

The work plan should describe the specific activities to be undertaken in the project for which the application is being made – it does not deal with the overall business plan or any associated projects or future activities. The specific elements should, where possible, be broken out in such a way as to allow for estimating a directly associated cost. All work must be completed within one fiscal year and there is no guarantee that any subsequent additional work mentioned in the proposal will be funded under AICFI in future fiscal years.

Examples of headings for use in the work plan include:

• Brief overview of the entire work proposed.

It is anticipated that the work will typically involve upgrade or replacement of vessels, gear and other fisheries-related facilities so that all design, feasibility, construction/repair and commissioning work should be addressed in the work plan.

NOTE: Only after capacity building activities have been completed may CFEs seek

rounding out of existing community access as a separate CFDOS project. Application for the purchase of additional community licence/quota would require a business case and an estimate of purchase and related costs.

• Tasks

A breakdown of the work by task should provide sufficient detail to identify the labour (by skill and profession) and all materials and services required.

• List of participating parties

This should include, for example, project manager, technical personnel, construction companies, client representative, etc.

• Scheduling considerations

These should include any dry-docking requirements, arrangements for out-of-service periods, and deadlines for major steps in the task-completion process.

• Reporting

Include reporting commitments for confirming work progress and final project completion.


The Schedule and Breakdown of Estimated Costs should include:

• A breakdown of the sequence of activities to be carried out in completing the work and a

schedule of time required for completion of each activity; • Estimates for necessary costs including materials, facilities, labour, testing, registration

fees, professional fees and any other necessary cost items related to the work; • A statement of the research already carried out in order to estimate costs required for the

work, supplying estimates received, listing estimates requested but not yet received, identifying any outstanding quotes not yet requested, and describing how the work will be managed and supervised to ensure the project is completed on time and within the estimated budget.

MMFN CFEs applying for CFDOS support may ask the Business Development Team for assistance in preparing the Business Case, at no additional cost to the CFE. The business case should be written after the work plan, scheduling and estimation of related costs have been completed. The BDT should prompt the CFE to obtain the necessary technical assistance to prepare a work plan, scheduling and estimation of related costs. The CFE may apply for funding under AICFI Component 2.3 to retain this expertise. The Business Case (See Annex “C”) will confirm that a confidential techno-economic feasibility/review has been conducted and provides positive support for the business/economic relevance and technical practicality of the proposed work. The business case should also show how the proposed work will support short and long term capacity-building and sustainability of the CFE, describe the short and longer-term importance of the work to implementation and mature application/fine tuning of the Business Development Plan, and indicate other existing possible sources of complementary funding support, if a broad approach is taken in the work proposed.


ANNEX “C” Business Case Template – AICFI Component 4 Applications

The Business Case should provide justification for the work being proposed and support for the work plan, schedule and breakdown of estimated costs contained in the CFDOS application. The following subject areas should be addressed in the business case, as appropriate:

1. Description of the project. (Expanded /more detailed version of the summary on the application form but, if possible, not more than approximately 250 words.)

2. Statement of the problem to be solved e.g. need to increase revenue by better use of vessels/facilities or by reducing costs through change in scale.

3. In general terms, describe what solution is proposed for the problem, e.g. restructuring of fleet/ fishing operations, upgrading/replacement of vessels/fishing equipment, etc.

4. Describe what alternate solutions have been considered. Give main reasons to show the alternatives are unsuitable or less effective than the selected proposal.

5. Describe the level of impact of the proposed solution on CFE sustainability and employment in the community.

6. Summarize costing of selected proposal and any longer term costs that will be incurred as a result of doing this work.

7. What alternative funding sources have been considered? Indicate the state of enquiry and indicate any potential response and value. Give reasons for alternate sources of funding not being pursued.

8. Provide a calculation of benefits: (a) directly from project implementation, (b) indirectly from project implementation. Indicate when projects costs will be recovered.

9. Summarize any technical/scientific/fisheries management or other factors that must be taken into account, e.g. information extracted from the techno-economic feasibility study*.

10. Any other concluding information that supports the proposal.

*For technical projects, provide confirmation that a techno-economic feasibility/review has been conducted and provides positive support for the business/economic relevance and technical practicality of the proposed work. (Support for conducting a techno-economic feasibility study may be available under AICFI Component 2.3, where the CFE is not able to undertake such a study.)



GUIDELINES FOR THIRD PARTY EVALUATION OF THE BUSINESS CASE The Business Case will be evaluated under the following headings and levels.

• Impact of the proposed work on implementation of the CFE. Business Development

Plan? ___ Marginal to implementation of BDP. ___ Some positive influence on implementation of BDP. ___ Critical to implementation of BDP.

• Alignment of the proposed work with CFE Business Development Plan goals?

___ Marginal to achieving short-term capacity-building objectives of BDP. ___ Some positive influence on achieving short-term capacity-building objectives of BDP. ___ Critical to achieving short-term capacity-building objectives of BDP.

• Economic impact of investment on CFE?

___ Investment recovered over longer term. ___ Investment recovered in 5 – 7 years. ___ Investment recovered in less than 3 years.

• Impact on employment in community?

___ Proposed work will have little or not impact on employment. ___ Number of weeks employment for seagoing personnel will be maintained, rather than

lost, as a result of the proposed work. ___ Number of weeks employment for seagoing personnel will be increased as a result of

proposed work. • Impact on overall CFE sustainability?

___ Little or no impact on overall CFE sustainability ___ Existing fisheries or fishing operations will be maintained rather than lost. ___ New fisheries or fishing operations will be established.

• Any other items judged to be critical to specific cases?

___ To be identified, described, and impact of item set out by Evaluator.

NOTE: The Application Review Board will have access to both the business case and evaluation results.

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