of all Atlantic Coast groundfish landings 

 but was 37.5 percent of all offshore 

 landings. Of the 150 million pounds, 87 

 million were landed bj'- draggers. The im- 

 portance of the subsidized vessels in the 

 groundfish catch is greatest in New Bruns- 

 wick, where 96 percent of total landings 

 are made by draggers built with federal 

 assistance. In Nova Scotia the assisted 

 vessels land about 19 percent of the total 

 groundfish catch; in Prince Edward Island 

 and Quebec the proportion is Uii percent 

 and 33 percent respectively. it2/ 



The long-liners are somewhat more ver- 

 satile than the draggers, since they can 

 fish on rough grounds on which the draggers 

 would lose their gear. Moreover, they are 

 able to move from one fishery to another 

 as availability of fish and price dictate. 

 Thus the Nova Scotia long-liners shift from 

 fishing for cod to haddock to halibut to 

 swordfish and back again to codfish, hi / 

 There have been more SO to 60 feet Nova 

 Scotia long-liners built than any other 

 type of vessel under the subsidy plan. The 

 long-liners have been profitable to operate 

 and would appear to be a financially sound 

 investment, since even without subsidy aid 

 their return on investment payback time is 

 attractive. Their versatility is shovm by 

 the fact that in 1956, 70 percent of their 

 fishing time was spent in long-lining and 

 30 percent in swordf ishing , with the lat- 

 ter effort producing 3h percent of catch 

 values . U2/ 



Another popular long-liner is the 30 

 to ItO foot Newfoundland trap long-liner 

 which because of the low initial cost and 

 substantial operating profits, shows a 22 

 percent return on investment. 



Returns on invested capital in the 

 subsidized draggers have been low with the 

 exception of the ( 50-60') New Brunswick 

 Fundy draggers, (table 11-13). 



Table 11-13 indicates clearly that the 

 program of modernization could not have 



been effected without government subven- 

 tion. The fishermen did not have the cash 

 resources to build their vessels. This is 

 demonstrated by the heavy borrowings de- 

 scribed earlier, even after subsidies had 

 further reduced the relatively small 

 original cost of the craft . If subsidies 

 had not been available, it is doubtful that 

 the fishermen would have been able to ob- 

 tain the debt financing needed. The ves- 

 sels in the program have a useful life of 

 about 13.3 years. An examination of table 

 11-13 also reveals that without subsidy 

 only 3 of the 16 classes of fishing boats 

 surveyed would have been able to repay 

 their total debt from net earnings in a 

 period less than the life of the vessel. 

 These three classes represent h7 percent 

 of all vessels built under the subsidy- 

 scheme. Even with the subsidy, only k 

 vessel classes representing 50 percent of 

 those in the program could pay off their 

 debt from earnings in a period less than 

 the vessel's useful life. 



It is evident then that from 50 per- 

 cent to 55 percent of the vessels in the 

 program will not earn enough to pay off 

 their debt charges and build up a depre- 

 ciation reserve large enough to replace 

 their capital assets. In most instances 

 the combination of net earnings and de- 

 preciation is enough, even without subsidy 

 to pay the debt within the useful life of 

 the boat. The risk margin, however, would 

 be so high as to make lenders hesitate be- 

 fore making loan committments. 



The net returns on invested capital 

 in 75 percent of the cases are below 12 

 percent per annum. Clearly, if many of 

 the present classes are to be replaced, 

 continued government subvention must be 

 obtained by their owners . It is more 

 likely, however, that government subsidy 

 will be directed toward vessel types such 

 as the 50-60> Nova Scotia long-liners 

 which do operate profitably and which can 

 be replaced by their owners out of oper- 

 ating funds. Officials are not discouraged 



ItO/ Operations of Modem Long-Liners and Draggers, Atlantic Seaboard, 1952-1957 , by 

 John Proskie . Economics Service, Department of Fisheries of Canada. Ottawa, 1958. 

 Volume 7 - Part 1. p. 10-11. 



Ul / Operations of Modem Long-Liners and Draggers Atlantic Seaboard, 1952-1956 by 

 John Proskie . Economics Service, Department of Fisheries of Canada, Ottawa, 1957. 

 Part 1, p, 25. 



1^2/ Ibid., p. 27. 



21 



