Instead of giving the severely stressed cod and other groundfish populations a respite from fishing pressure, Ottawa began freely issuing liscenses, and subsidies were provided big companies to build bigger ships and processing plants. Industry employment rose 60 percent in two decades. During this stage, harvesting rates increase rapidly and stabilize at excessive, unsustainable levels. Government, which is supposed to regulate the fishery, is motivated instead to remove obstacles so that profits from the fishery can grow. Often, governments offer attractive subsidies, with ready takers drawn by high yields and substantial profits during this initially stable period.
Conditions soon change, however, and yields start to decline.
Then, when the results of additional scientific research and improved knowledge necessitate calls for reductions in the allowable catch, industry appeals to government for help or special consideration, because, by this point, substantial investments and jobs are at risk. The typical response by government at this point is to delay a decision, pending the results of more research. Government procrastinates, arguing that no substantive data is available upon which to base a decision to reduce fishing effort, and without conclusive information the status quo is maintained. The scientific process required to acquire, analyse and respond to such information can take several years. But, the overall effect of government subsidies is to encourage over-harvesting.