OTTAWA Canada's rules for genetically modified fish are so lax that labs don't have to report escapes into the wild, says an audit released today.

That means bigger, more adaptable fish engineered in labs could put the natural variety at a disadvantage when they compete against each other for food and territory, the audit by Canada's environment commissioner has found.

And because scientists don't have to disclose what they create in their labs, it says, it's not known what sort of so-called `Frankenfish' might someday swim Canada's water systems.

'The result of these weaknesses is that the extent of research under way in Canada and any accidental release of (genetically engineered) fish may not be fully known,' the audit says.

The Canadian Environment Protection Act of 1999 currently regulates biotechnology, but the audit says separate rules for genetically modified fish could close some of the gaps it found.

'In our view, new regulations could address the weaknesses of Canada's current regulations in this area,' says the report.

'This includes the need to strengthen oversight of research and develop mandatory reporting requirements for GE (genetically engineered) fish and for accidental releases of genetically engineered organisms into the environment.'

Fisheries and Oceans has long conceded it needs separate regulations for the manmade fish, but the department still has not drafted its own policy.

And the audit says the department no longer intends to.

Although the department agreed with a recommendation in the environment commissioner's 2004 audit that a separate policy was needed, officials later decided against it.

'Department officials told us that the 2004 commitment to revise and finalize a policy in response to our audit was made without a full understanding of the applicable ... provisions,' the audit says.

Research on genetically modified fish began in the early 1980s. Canada doesn't have its own commercial farms for genetically modified fish, but a U.S. company has had a Canadian subsidiary on Prince Edward Island since 1994.

The company asked the U.S. Food and Drug Administration in 2006 to allow it to sell its fish as food.

Canadian government officials say it's reasonable to expect a similar request to sell the fish in Canada, the audit says.