* \ I K AMI UOKK H)K C OMMI K( I \1 IKKNSINCi 



tishiTics lv> otlscl ihc costs ot adniiiuslcrmi; llic licciisini; 

 projirain I thcrotbre recomniciKj 



32. ITm' iiiiiiiiail \iili(l;itioii kv for iIk' ^ciM'ral atiniiKTcial 

 ttsliiii^ \fvstl Ik-t'iKc ((I A liiViKi') sluHiUI Ik- S5() l<»r 

 lUI vi-sscis aiul all atklitional ftfs now iharf^itl lor 

 annual \ali(kiti<iii of individiuil s|K\-ii>s pri^ik'^cs 

 should bv oliniinatcd. 



In cfl'ect, ihc proposal would spread licensing adminis- 

 tration costs evenly over the entire commercial fleet, 

 while leaving it to royalties and bids for new licences to 

 capture an appropriate share of resource values for the 

 public. 



Payments 



These proposals will increase licensees" financial obli- 

 gations, which will consist of the annual commercial 

 fishing vessel licence validation fee, royalties and bonuses 

 bid for new licences. I propose that — 



33. One half of the annual payments due in respect of 

 royaltk's on quota licences and niariculture leases and 

 bonuses bid for all new licences and leases should be 

 payable each year at the tinie of validation of conuner- 

 cial fishing vessel licencx-s. T!ie other half should be 

 payable b\ December 31. 



34. Interest should be cliarged on all payments in arrears, 

 and licences and leases should not be validated until 

 arrears are paid. 



Postponing half the payments until the end of the year 

 in this way will lighten the financial burden on licensees 

 prior to the fishing season. 



To conclude this section, I stress that this reformed 

 structure of licence fees and royalties must be introduced 

 at the same time as other important licensing proposals in 

 this report. If the new fishing privileges and fleet rational- 

 ization are not accompanied by provisions for capturing 

 some of the benefits, windfall gains will accrue to licen- 

 sees and become capitalized into licence values, making it 

 more difficult to introduce new charges in future. 



A NEW APPROACH TO FLEET DEVELOPMENT 

 AND LICENSING ADMINISTRATION 



With the introduction of limited-entry licensing in the 

 major fisheries during the last few years, licensing admin- 

 istration and fleet development have emerged from pas- 

 sive and relatively unimportant concerns of the Depart- 

 ment to major issues of fisheries policy. Moreover, the 

 policies themselves have been changing rapidly and 

 licensing has become increasingly elaborate, so that the 

 administrative demands on the Department have grown 

 considerably. But the provisions for attending to these 

 matters have not kept pace; and the importance of licens- 

 ing has clearly outgrown the priority it receives in the 

 region. 



Licensing administialioii remains a separate unit in the 

 Management Services Division of the i'ield Services 

 Branch. Its responsibilities include issuing the full range 

 of commercial licences initially and renewing them annu- 

 ally, documenting licence transfers and approving vessel 

 replacements. Buried deep in the lield .Services Branch, 

 licensing competes for funds and stature with the liiil 

 range of field operations in the region. 



Elevating IJcensing Responsibilities 



Licensing diflers markedly in substance from most 

 other functions performed by the Department. The main 

 thrust of the Department's activities are biological and 

 engineering: determining the condition of the stocks, 

 developing them, and managing fi.shing and fish habitat. 

 Licensing, in contrast, is concerned with industrial devel- 

 opment and the allocation of rights of access to 

 resources. Even under today's system, strong arguments 

 can be made in favour of divorcing the licensing function 

 from traditional fisheries management activities, since it 

 calls for an entirely different kind of expertise and it deals 

 with quite different problems, including the highly sensi- 

 tive business of allocating fishing privileges. Licensing 

 administration by no means enjoys universal confidence 

 now: 



. . . licensing decisions have created suspicion 

 and resentment in the industry; this has con- 

 tributed to further animosity between fisher- 

 men and those charged with managing the 

 fishery.'* 



These functions will be even more important under the 

 licensing proposals in this report. Allocatmg new licences 

 and administering competitive bidding must be, and 

 must be seen to be, independent and totally impartial; 

 and managing fleet rationalization programs calls for spe- 

 cial organizational arrangements. 



The Economic Council of Canada, in a recent study of 

 fisheries policy, concluded that fishing privileges should 

 be administered by a body that is separate from the 

 agency responsible for managing the resources, because 

 "fishery officials should be as insulated as possible from 

 decisions about who is to participate, so as to depersonal- 

 ize and depoliticize the choice of gear and fishermen."' 

 Separate licensing authorities already exist in Alaska, 

 New Zealand, and some other jurisdictions, and appear 

 to operate well. It is worth noting also that some of the 

 highly regarded fisheries management agencies are free of 

 licensing responsibilities, such as the International North 

 Pacific Salmon Commission, the International Halibut 

 Commission and Alaska's Department of Fish and 

 Game. 



In my Preliminary Report I recommended a Crown 

 corporation to administer a buy-back program in the 



