Net loss: A cost-benefit analysis of the Canadian Pacific salmon fishery

This article applies cost-benefit analysis to the Canadian Pacific commerci al salmon fishery. It demonstrates that government policies to preserve the fishery have resulted in higher let social costs than would have resulted from a "do nothing" policy, notwithstanding the rent dissipation associated with unconstrained resource exploitation. The value of landings and the pr ivate costs of the harvest over a cycle (1988-1994) are calculated. On aver age, fishers extracted rents of C$34.7 million (in constant 1995 Canadian d ollars) annually. The public costs of enhancing the resource and organizing and policing the harvest are estimated. When these costs are included in t he calculation, net benefits drop to an average of negative C$55.6 million annually. This translates into a net present value (NPV) of the salmon fish ery of negative C$784. The effects on NPV of both modest policy changes imp lemented in 1996-1997 and of a move dramatic but credible fleet rationaliza tion program are provided. The results indicate that further policy change is called for More generally the study shows that policy reform that would significantly benefit both the private sector (through reduced vent dissipa tion) and the public sector (through reduced government expenditures) can b e surprisingly difficult. (C) 2000 by the Association for Public Policy Ana lysis and Management.