75 



CHAPTER? 



LICENSING AND FLEET 

 DEVELOPMENT POLICY 



. . .the present fisheries poUcy instruments 

 have failed to encourage practices that would 

 efficiently capture the potential natural 

 wealth of the industry. 



ECONOMIC COUNCIL OF CANADA' 



To realize the potential benefits of our fish resources 

 we must, first, properly manage the stocks and their habi- 

 tat; and, second, provide a system of access to the 

 resources that will promote their most efficient use. The 

 latter entails some kind of licensing system. To provide 

 the background for the detailed proposals regarding com- 

 mercial licensing policy that follow, this chapter outlines 

 the role of licensing in regulating fleet development, cur- 

 rent licensing arrangements and the basic objectives of a 

 modern policy. The following five chapters deal with the 

 methods for achieving these objectives in the various 

 commercial fisheries of the Pacific coast. 



The background provided in this chapter is important 

 for three reasons. First, it is only in recent years that 

 access to commercial fisheries has been controlled; tradi- 

 tionally, fleets were unrestricted so that the licensing sys- 

 tem, as a means of control, was of little significance. But 

 the need to regulate the size and structure of fishing fleets 

 is now the most urgent issue of commercial fisheries pol- 

 icy. So the design and administration of licences warrants 

 a central place in fisheries policy — a much more promi- 

 nent place than it has hitherto been given. 



Second, the licensing system determines how access to 

 the available harvest will be allocated among potential 

 users, and this gives rise to the sharpest debate and fric- 

 tion among user groups, and between them and the regu- 

 latory authorities. For this reason, licensing arrangements 

 must be seen to be defensible in light of explicit objec- 

 tives, and to be consistent, understandable and fair. Hith- 

 erto, this consistency and clarity has been lacking. 



Third, my public hearings revealed a great deal of con- 

 fusion about the legal, economic and administrative 

 aspects of this new and complicated aspect of fisheries 

 policy. And because so much needs to be done to mod- 



ernize our present crude licensing structure, it is essential 

 to begin with a clear statement of policy objectives, his- 

 tory and alternative approaches and their implications. 



My Preliminary Report also gave sjjecial emphasis to 

 commercial licensing arrangements and fleet develop- 

 ment policy; indeed, these were the specific issues that 

 my terms of reference required me to deal with and make 

 recommendations upon last year. Accordingly, I recom- 

 mended a variety of important changes, some of which 

 are now being implemented. Those proposals dealt only 

 with certain fisheries, and even in those cases I indicated 

 that I would consider additional changes in my final 

 report. In the following chapters, I incorporate most of 

 my preliminary recommendations, and the changes made 

 by the government in the interim, in a fuller review and 

 more comprehensive set of proposals for reform of licens- 

 ing policy. 



FLEET DEVELOPMENT AND THE TREADMILL 

 OF OVERCAPACITY 



The central economic problem of the commercial 

 fisheries is the chronic overcapacity of the fleets. As I 

 describe in later chapters, all of our major fisheries, espe- 

 cially the salmon, herring and halibut fisheries, have 

 greatly expanded their fishing power in recent years. But 

 because the stocks of fish could not yield greater catches, 

 most of the new capital investment in vessels and gear 

 and the advanced technolog> is wasted. Our most valu- 

 able stocks could be fully harvested with only a fraction 

 of the capital and labour now expended on fishing them. 

 This wasteful pattern of development reflects govern- 

 ments* failure, in spite of repeated attempts, to develop a 

 policy that would encourage the industry to develop 

 efficiently. 



The perplexing phenomenon of excessive expansion of 

 productive capacity is not limited to Canada's Pacific 

 fisheries; it can be observed in major fisheries throughout 

 the world. In recent years, licensing systems in consider- 

 able variety have been designed to alleviate the problem, 

 though few can be said to have had much beneficial 

 effect. 



A clear understanding of why commercial fleets tend to 

 overexpand is essential in order to design effective correc- 

 tive policies. Although this has been well analyzed in aca- 

 demic and official studies during the last few years,- my 

 hearings revealed considerable confusion about the prob- 

 lem within the fishing community and judging from the 

 policies adopted, within the government as well. So a 

 brief explanation of the general phenomenon is in order 

 before turning to policies required to deal with it. 



The F>erverse tendency for fishing fleets to overexpand 

 is rooted in the way the commercial fisheries have tradi- 

 tionally been organized. Until very recently, fisheries 



