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1981 Report of the Auditor General of Canada

The Department

8.1 The Department of Fisheries and Oceans (DFO) is responsible for a wide range of activities including fisheries management and research in coastal and inland waters, fisheries economic development and marketing, international fisheries negotiations, oceanographic research, hydrographic surveying and charting, and the development and administration of fishing and recreational harbours.

8.2 The main legislative base for the Department is the Department of Fisheries and Oceans Act ( S.C. 1978-79, c.13 ), which established the Department in April 1979, and the Fisheries Act, which was enacted in 1867 in accordance with the responsibility for "sea-coast and inland fisheries" placed on the federal government by Section 91(12) of the British North America Act. Under the Fisheries and Oceans Act, the Department is also responsible for co-ordinating government policies and programs respecting oceans. The "Fisheries" and "Oceans" components of the Department have evolved independently of one another.

8.3 The strategic objectives of the Department of Fisheries and Oceans, as published in the DFO 1979-80 annual report, are to assure:

- the comprehensive management of Canada's fisheries resources through the protection, rehabilitation and enhancement of individual fish stocks and the aquatic habitat upon which these resources depend;

- the "best use" of fisheries resources, through a variety of measures affecting when, where, how and by whom these resources are harvested, processed and marketed to obtain highest possible social and economic benefits;

- the acquisition and dissemination of knowledge of oceanic processes and environments so as to support activities related to defence, marine transportation, the exploitation of offshore energy resources, and the management of the fishery resource and its aquatic habitat;

- hydrographic surveying of Canada's coastal and inland waters for the production of nautical charts and other information necessary for safe navigation;

- the provision of a national ocean information service;

- the provision and administration of a national system of harbours in support of commercial fishing vessels and recreational boating; and

- the conduct of a range of international activities in both the fisheries and oceans sectors.

Resources

Organization

(Exhibit not available)

8.6 Small Craft Harbours is a separate directorate reporting directly to the Deputy Minister.

8.7 Within the Fisheries Management Program, activities are organized according to geographic considerations and the national nature of certain activities. There are three assistant deputy ministers (ADMs) in Fisheries whose responsibilities are as follows:

- The ADM Atlantic Fisheries is responsible for fisheries management east of the Quebec-Ontario border and has national responsibility for fisheries research and fish inspection.

- The ADM Pacific and Freshwater Fisheries is responsible for fisheries management west of the Quebec-Ontario border as well as in the Arctic. Responsibilities also include the provision of national direction in the areas of resource rehabilitation, enforcement, native affairs, and enhancement and fish habitat management.

- The ADM Economic Development and Marketing is responsible for providing a focus for comprehensive policy development and for formulating a co-ordinated departmental approach to the economic development of the Canadian fishing industry. The scope of these responsibilities extends, on a national basis, to marketing, fishermen's assistance, the conduct of international fisheries relations and economic policy, research and statistical services.

8.9 The Minister of Fisheries and Oceans is also responsible to Parliament for the activities of two Crown corporations: the Freshwater Fish Marketing Corporation and the Canadian Saltfish Corporation, as well as for a departmental corporation, the Fisheries Prices Support Board.

Environment

8.11 In Canada, no single agency or level of government has jurisdiction over all aspects of the fishery system. Under the British North America Act, the federal government has jurisdiction over the management of the fishery resource, harvesting, and inter-provincial and international trade. Provinces have jurisdiction over the type, number and location of processing plants.

8.12 Because fish stocks that had become depleted before 1977 have now, in most instances, dramatically recovered, the Department has been taking a number of steps to improve further the resource base and to increase the contribution to the economy of the fishery sector. For example, emphasis is being placed on improving fish quality as a means of extracting additional value from a limited resource. The quality improvement program involves every stage of the production process, from the water to the supermarket. The Department is also considering further expansion of a program for the enhancement of salmon species on the Pacific Coast.

8.13 The economic and social environment within which the Department functions is heavily influenced by the responsibility to allocate equitably the benefits flowing from this renewable, natural resource. The Department's clients, whether commercial, recreational or native fishermen, inshore fishermen or offshore trawlermen, sealers or conservationists, fish processing executives or fish consumers, all have widely varying opinions on the degree to which the resource should be used and how the economic benefits flowing from its use should be distributed. Thus the Department's role in relation to Canada's fishing industry must be clear and understood by all parties involved. Furthermore, it is essential that the Department have adequate economic analyses when making decisions that affect different groups.

8.14 Decision making concerning the allocation of benefits from fisheries resources is strongly influenced by regional disparities in the rate of economic development and employment. These considerations must be balanced against the tendency for too many people and too much capital to flow into the fishery. If left unchecked, this tendency can result in diminished benefits for an excessive number of participants.

8.15 For example, the Department has set an objective:

to create the conditions necessary for a viable and stable commercial fishing sector and improved incomes, through regulation of harvest levels and by implementing licensing and allocation measures and through research, development assistance and quality programs.

8.16 The Department operates in close liaison with over 20 other federal government departments and with the provincial and territorial governments. As well, the Department maintains contacts with its counterparts in the other major maritime nations and in related international bodies.

8.17 International relations, trade, and development functions are important elements in both the fisheries and oceans sectors. The Department negotiates foreign access to surplus Canadian fish stocks through bilateral and multilateral agreements that include reciprocal provisions guaranteeing the Canadian fishing industry access to certain foreign markets.

8.18 The Department is heavily dependent on reliable scientific data for decisions on quotas and allocations. It has, therefore, allocated over 60 per cent of its fisheries research budget to scientific resource assessment. Scientific information is developed to permit fisheries managers to set allowable catches at levels that will ensure a larger average size of fish, improved catch rates and greater stability of catches from year to year.

8.19 In oceanography, the recent expansion of offshore energy-related activities has resulted in an urgent need to upgrade abilities to make predictions concerning ice, temperature, currents, tides and waves. This information is vital to safe and effective development of offshore and frontier energy resources and the transportation of these resources to markets. Professionals such as economists, oceanographers and other scientists, together with inspection and conservation specialists, are required to carry out these functions so there is a need for careful planning to meet human resource requirements and training of personnel for current and future needs.

8.20 Each of these environmental factors, some largely beyond the Department's control, has a significant effect on DFO's operations. Because of the decentralized nature of the Department's operations, it is imperative for good management control that there are mechanisms in place to gather and provide accurate, reliable, timely, and useful information on a national basis concerning the conduct and results of the Department's various operations. It is also important that the Department plan and co-ordinate its activities on a national basis.

Audit Scope

- strategic planning;

- effectiveness measurement;

- support services;

- cost recovery; and

- information for Parliament.

- fisheries research;

- economic analysis, statistics and fisheries assistance programs;

- fisheries operations, including allocation, inspection, licensing, regulation, surveillance and enforcement, and enhancement; and

- operations of the Small Craft Harbours Directorate.

8.24 In Ocean Science and Surveys, we reviewed the systems for planning and controlling oceanography and hydrography.

8.25 In our reviews of oceanography and fisheries research, our audit was conducted in conjunction with the government-wide audit of research and development, reported in Chapter 2 of this Report. We did not address the technical performance of research and development work. Hence, our research and development observations and recommendations should not be regarded as commentary on the scientific quality or results of the Department's research and development activities.

Summary of Audit Observations

8.27 Effectiveness measurement. Although the program evaluation group in DFO is new, it has completed some evaluations, and progress appears to be satisfactory. With respect to clarity of objectives, the Department did not have objectives that were sufficiently precise to allow for measuring effectiveness, and it had not completed a profile of the components of program evaluation for its programs, as required by Treasury Board. Such profiles can help to establish the accountability of program managers and serve as a useful tool in the evaluation of programs.

8.28 In the Salmonid Enhancement Program, we found that the procedures in place to measure the effectiveness of the program were generally satisfactory, but that analyses were needed where conditions existed that could affect cost-benefit decisions.

8.29 Fisheries research. The research activities of the Fisheries Management Program were, in general, well managed, except for the allocation of resources for research. The Department had not used its mechanisms for establishing priorities for optimal research effort.

8.30 Economic development. Fisheries Management's economic development activities are composed of economic analysis, statistics and the fishermen's assistance programs. Weaknesses existed in the management of contributions paid under the Fishing Vessel Assistance Program since payments were made without respecting the accepted criteria applying to such payments. Further, contributions were being paid toward the cost of constructing replacement fishing vessels at a time when the overall fishing fleet possessed excess capacity. With respect to economic analysis, which is a major input into the allocation of fish stocks and the determination of enhancement and assistance activities, we found that, although the amount and quality of the analysis was improving, weaknesses still existed. This was particularly true of the analysis dealing with the activities of East Coast inshore fishermen.

8.31 Allocation. The allocation process is important to the management of fish stocks. The Department had ensured that scientific advice was given to fisheries managers. With this advice, and in consultation with other interested parties, the Department has been able to set total allowable catch limits that have permitted stock regeneration. However, there were two weaknesses in the allocation process. The Department had not clearly defined the socio-economic objectives for the process and had not developed a method for making trade-offs between conflicting objectives. For example, the objective to create a viable and stable fishing industry could conflict with the objective to increase fishermen's incomes. We also noted that the consultative process involved in developing, implementing and enforcing management plans for the allocation of fish stocks was becoming increasingly costly. Cost-benefit studies of alternative methods of allocation had not been carried out.

8.32 Enforcement. The Department's surveillance and enforcement responsibilities were increased dramatically with the introduction of the 200-mile limit in 1977. In our opinion, the surveillance activities applying to offshore enforcement were being managed adequately; however, there were weaknesses in inshore surveillance and enforcement. For example, in operational planning, priorities had not been established concerning the effort to be devoted to various species. Further, the Department did not have a system to provide management with appropriate information on inshore surveillance and enforcement activities.

8.33 Inspection. The Department adequately managed the inspection of imported products and of products, like canned salmon, requiring mandatory inspection. In other parts of the program, however, there were deficiencies. The Department had not determined, on a general basis, what level of inspection effort should be undertaken. As a result, although it had valid statistical sampling techniques, they were not applied on either a consistent, uniform basis to all products or on a directed basis to those plants and products where the greatest risks of health hazards existed.

8.34 Enhancement programs. The Department's enhancement programs are designed to enhance natural fish stocks by using a number of techniques, including constructing and operating hatcheries and spawning channels and fertilizing lakes. The West Coast program, the Department's main enhancement effort, was generally well managed. The East Coast program, however, has, in our opinion, been operated without due regard for economy and efficiency. For example, there were several uneconomic and inefficient hatcheries, including three in close proximity serving the same river.

8.35 Small Craft Harbours. We identified weaknesses in the planning process for Small Craft Harbours. For example, there was no approved national plan covering the short and long-range development of these harbours. Furthermore, there were no criteria for establishing project priorities on a national basis and no guidelines for identifying when projects required cost-benefit analyses.

8.36 Ocean Science and Surveys. In the Ocean Science and Surveys Program, we examined oceanography and hydrography and concluded that both activities were reasonably well managed. However, in oceanography, which is primarily a research function, the Department needs to develop guidelines for preparing project proposals and criteria for selecting new research projects.

8.37 Cost recovery. The Department has not effectively implemented a cost recovery system for services provided to specific individuals or groups. In Small Craft Harbours, rates for the use of harbour facilities had not been changed since 1973 and did not reflect the cost of supplying the service. We estimate that, by maintaining the same rate structure since 1973, the Department has foregone approximately $5 million in revenues. In other areas, such as ships and the operation of Bait Depots, the Department had not effected the cost recoveries required by Governor in Council. This situation has resulted in an estimated revenue loss of approximately $2 million a year.

8.38 Support services. The management of support services within the Department was generally weak. There were major deficiencies with respect to human resource planning, human resource information systems and training. There were also serious deficiencies in the management of electronic data processing due to the absence of a documented national policy or long-term plan and a national EDP security plan. We also observed inadequacies in certain aspects of materiel management and financial management, while the effectiveness of the Internal Audit Division was reduced by the lack of an active Internal Audit Committee.

Observations and Recommendations

Strategic planning

8.40 The Department has instituted other planning initiatives that are linked to the Strategic Overview. For example, National Plans, covering most of the major functions, have been developed. These National Plans are detailed expansions of the Strategic Overview. Also, in accordance with Treasury Board requirements, the Department has introduced multi-year operational planning which covers a five-year period and quantifies the resources required to meet the objectives set out in the Strategic Overview and National Plans.

8.41 DFO has made a major effort to improve planning by implementing new systems for strategic and operational planning. The various planning processes -- the Strategic Overview, the National Plans, and the multi-year operational plan -- were not as complete or as integrated as they should have been; however, the Department was aware of the areas requiring improvement and is addressing them.

Effectiveness Measurement

8.43 In 1980, an evaluation policy was issued, outlining the roles and responsibilities of the Evaluation Group and the Evaluation Committee. At the same time, a five-year schedule of evaluation was approved. We reviewed the policy and schedule and found both to be satisfactory.

8.44 The Group has completed evaluation studies for all four programs in the first year of the evaluation schedule. Evaluation assessments, or pre-evaluation planning documents for the five programs in the second year of the evaluation schedule, had been completed, and work was under way on the actual evaluation studies of these programs. We reviewed two of the studies completed in the first year and four of the five assessments for the second year of the evaluation schedule.

8.45 In 1981, Treasury Board approved a "Guide on the Program Evaluation Function". This and other recently available supporting documentation have helped to provide direction for evaluation activities in departments and agencies. However, because evaluation functions are expanding rapidly throughout government, there is a shortage of adequately trained and experienced personnel.

8.46 We found that evaluations studies and assessments were of uneven quality, and some evaluations had fallen behind schedule. We noted, however, that the group has made definite progress toward planning and conducting evaluations in a manner that satisfactorily reflected the requirements of both the Treasury Board Guide on Program Evaluation and our audit criteria for effectiveness measurement and reporting.

8.47 The Department was aware of the problems encountered by the Evaluation Group in its early years of operation and was attempting to consolidate its initial progress by filling vacant positions with experienced personnel, and following even more closely Treasury Board guidelines on planning and conducting program effectiveness evaluations.

8.48 The Evaluation Group is responsible for conducting effectiveness evaluations of all programs at least once every five years. In addition, individual program managers are responsible for having appropriate procedures in place to monitor continuously the extent to which their programs are achieving the desired effects or objectives. An important step in being able to measure program effectiveness is to have clear program objectives.

8.49 To determine the degree to which there were satisfactory procedures to measure program effectiveness, we examined the systems in place in the Atlantic region to measure the adequacy of control over the access to the fisheries resource. The licensing process determines which people and which vessels have the right to fish. The allocation process takes the total allowable catch in a year and divides it up among various user groups. Taken together, these two activities determine who catches what fish and under what circumstances.

8.50 We examined the 1981 Atlantic Groundfish Management Plan as the major example of the allocation process. This allocation plan allocates approximately 60-65 per cent of the total Atlantic catch. In 1980, this catch was valued at $227 million.

8.51 The task of specifying precise objectives for the allocation process is difficult. Only from the mid-1970s on were effects like economic benefits and social well-being explicitly taken into account in fisheries management. Previously, only biological aspects, such as the maximum numbers of fish that could possibly be taken, were considered important. Time is needed to conduct analyses and establish information systems to manage the fisheries resource with an appropriate level of understanding of its socio-economic characteristics and effects. In some areas, this type of information has only recently become available for use by fisheries management.

8.52 Although progress has been made in clarifying the Department's socio-economic objectives since the mid 1970s, we concluded that the objectives of the Atlantic licensing and allocation activities were not sufficiently precise. For example, licensing has a major effect on the income of fishermen and the Department has included "to improve incomes" among its objectives for the licensing program. It might be expected that precise targets, such as the average industrial wage or a set poverty line, would be used to make such an objective clearer.

8.53 Further, the objectives of the 1981 Atlantic Groundfish Management Plan included the improvement of incomes and the maintenance and enhancement of the economic viability of coastal communities. Economic viability can be expressed using more precise terms, such as a specified proportion of a community's income or employment derived from the fishing industry. Clearer objectives concerning income are possible and necessary to permit measurement of program effectiveness and to hold managers to account for program performance.

8.54 The Department had not completed a program evaluation component profile of their programs as required by the Treasury Board's Guide. These profiles include the objectives of a program and a statement of its intended impacts and effects. Profiles can help establish the accountability of program managers and can be useful in evaluating the effectiveness of their programs, especially in key functions, such as licensing and allocation that control access to and allocation of the fishery resources.

8.55 The Department should ensure that program evaluation profiles are completed for all programs.

8.56 Salmonid Enhancement Program. The Department has expended significant effort in defining and measuring the objectives of the Salmonid Enhancement Program. This program uses various enhancement techniques to achieve its target of doubling the number of salmon available on the West Coast of Canada. When these fish are caught, the Department assumes that socio-economic benefits will accrue with respect to national income, regional development, native people, employment, and resource and environmental preservation.

8.57 We selected three enhancement projects at Chilliwack, Puntledge and Tlupana Inlet that had been completed and were representative of the cost-benefit methodology that was applied to all the enhancement projects. We reviewed the assumptions that were made and the types of data and information used in these selected projects.

8.58 The procedures to measure the effectiveness of the Salmonid Enhancement Program were generally satisfactory. However, our examination revealed some problems with the available data because they varied in quality or accuracy, and some of the assumptions were at wide variance with what was most likely to occur. For example, catch data or allocation of catch to different user groups such as sports fishermen or American fleets were known to be subject to some error. Also, the Department based the estimated benefits of the enhancement programs on an assumed level of fish survival and catch rates. Although some level must be assumed, departmental experience has shown that these survival and catch rates can vary by as much as a factor of two. When these assumptions and data are used in cost-benefit analysis, they raise serious questions concerning the validity of the cost-benefit ratio that determines whether a project will or will not be undertaken. Finally, with respect to the validity of some assumptions, the Department assumed no increase in the capitalization of the fishing fleet. It is reasonable, however, to expect that some capitalization, like increasing capacity, will occur. This increase in the fleet's capitalization cost would result in a less favourable cost-benefit ratio for the projects concerned.

8.59 Typically, when data that are subject to a significant amount of error or that may change over time are entered into a cost-benefit ratio, several ratios are prepared based on alternative, but likely, scenarios. The Department has conducted this type of sensitivity analysis for the selected variables on the Puntledge River project and for future prices for salmon on all projects.

8.60 The Department should carry out further sensitivity analyses where assumptions and data are subject to a significant degree of fluctuation that could significantly affect the outcome of the cost-benefit ratio.

8.61 The general methodology used for the Salmonid Enhancement Program could be applied to other projects in the Department. Initiatives are already under way to expand it to the areas of enforcement, regulation and conservation on the Pacific coast.

8.62 The Department should determine the feasibility of applying the effectiveness methodology of the Salmonid Enhancement Program to other depart mental programs.

Fisheries Research

8.64 We reviewed the management systems and procedures for planning and controlling research and development activities. Our review was designed to assess the adequacy of the systems and procedures for ensuring that the Fisheries Management Program managed its research activities economically and efficiently.

8.65 Managing the fishing resources requires intensive scientific effort to determine the best level of resource harvesting to ensure conservation and regeneration while, at the same time, permitting maximum socio-economic returns. To fulfil its mandate, the Department has embarked on a comprehensive program of resource assessment and analysis for the principal species of interest.

8.66 The Department's procedures for estimating the size of stocks are based on scientific and statistical methodology established originally in the early 1970s and improved subsequently. The Department has well developed procedures in this regard; however, because of extensive, natural variability in populations for some species, the reliability of the data for these species is not as good as it is for others.

8.67 There are research programs directed toward long-term understanding of the behaviour of various species and the inter-relationship between species. However, within the Fisheries scientific community, there is considerable concern that the emphasis on obtaining accurate stock assessments has been at the expense of long-term research. In certain species, the lack of research is becoming a problem for effective long-term management of the resource and for international negotiations.

8.68 We noted an apparent imbalance in the resources allocated to various species, if the level of resources devoted to certain species is compared to the current and future benefits provided by these species. We realize, however, that the allocation of research resources reflects public perceptions of need for service as well as historical patterns. For example, substantial research, habitat and enhancement effort has been devoted to salmon on the Atlantic coast. A departmental study indicated that, in 1978-79, the Maritime region expenditures, including research and enforcement, amounted to 29c/ for every $1.00 of fish landed in that region. For salmon, the amount spent was at least $12.60 for every $1.00 of fish landed. The Department had not carried out analyses to determine what would be an appropriate level of expenditure to devote to each species.

8.69 The Department should carry out studies to determine how its research and enforcement efforts should be allocated.

Economic Development

8.71 Economic analysis. Economic analyses are essential input for a wide range of departmental activities. They are used in developing economic policy, allocating fish quotas and evaluating and designing fishermen's assistance programs.

8.72 In the Newfoundland region, a number of studies had been made of certain fisheries and the financial performance of some fleet segments. However, these studies had been made of large vessels and restricted fisheries like shrimp and crab while the vast majority of the fleet, the small inshore vessels in the Atlantic region, had yet to be studied. The Newfoundland region is planning a survey of the inshore fleet during 1981.

8.73 Although the Department had made progress in improving the quality and range of its economic analyses, further improvement was required, particularly in the area of the Atlantic coast inshore fleet. Without adequate analysis on the inshore fleet, it is difficult for the Department to make key decisions on allocation or to evaluate fishermen's assistance programs which are often designed to help inshore fishermen. For example, the Department allocated 60 per cent of northern cod to the inshore fleet without any quantitative analysis of the trade-off between employment, fish quality, income improvement, stability, economic efficiency and allocations to other fleets.

8.74 The Department should ensure that its economic analyses are expanded, particularly for the East Coast inshore fleet.

8.75 Catch statistics. Statistics on catches serve as input for a number of different activities. They are used in fishery research to develop the total allowable catch, in the allocation process to allocate fish quotas, and in economic analysis to establish fishermen's incomes and to monitor fish quotas. They are published monthly and annually as public information and are used in international negotiations.

8.76 Because catch statistics are used for such a variety of purposes, there are conflicting and competing requirements for the same data. For example, in managing quotas, it is essential that the data are timely. When developing total allowable catch numbers, however, researchers require accurate data on what was caught and from what locations; timeliness of data is not a major concern. As a result of these different information requirements, there have been a number of data systems developed.

8.77 The Department was aware of the problems in trying to produce data that are both timely and accurate. There had been a number of attempts to resolve the problems at headquarters and in the regions. Nevertheless, the problems of duplication of effort, lack of timeliness, inaccurate data and unco-ordinated efforts by different regions still remained.

8.78 The Department should review the present system for compiling catch statistics to ensure that it meets the needs of its users in the most cost-effective manner.

8.79 Fishermen's assistance programs. We reviewed the major program designed to. provide assistance to fishermen, the Fishing Vessel Assistance Program.

8.80 This program was originally intended to increase the productivity and efficiency of Canada's fishing fleets by providing fishermen with financial assistance for constructing new vessels and modifying existing vessels. Since its inception in 1942, the objectives of the program have expanded to include helping independent fishermen, and generating employment in shipyards and related industries. For the fiscal year ended 31 March 1979, expenditures totalled $10.7 million and provided for the construction of 763 new vessels and the modification of 22 others.

8.81 Our review of the Fishing Vessel Assistance Program indicated that the program did not operate with due regard for economy or efficiency. A major problem in the East Coast fisheries has been excess capacity of the fishing fleet. The results of a study, commissioned by the Department and published in October 1979, indicated that the program had aggravated the situation by subsidizing the construction of vessels with greater catch capacities. The same study concluded that the program had the effect of increasing the price of all fishing vessels, although only one in three newly constructed vessels was subsidized. This has created a potential conflict with other departmental programs.

8.82 The controls over the operations of the program were inadequate. We found a number of instances where the Department's eligibility criteria and financial controls were not followed. For example, 45 files contained no evidence that the vessels had been inspected during construction or that they were insured. Although the regulations require that the vessel must be involved in fishery activities for a number of years after replacement, none of the 67 files reviewed contained reports on subsequent fishing activity. The Department's published eligibility criteria were all violated at least once.

8.83 The Department should enforce its eligibility criteria and controls for the Fishing Vessel Assistance Program.

Fisheries Operations

8.85 Allocation of fish stock. The allocation process is the key activity in the stocks management process because the Department's ability to allocate fish stocks among fishermen and regions gives it substantial power to control economic returns. It is during the allocation process that fisheries managers set catch quotas for various species.

8.86 The process begins with the provision of scientific advice to the departmental managers on a "best catch" quota to determine the most appropriate balance between maximum harvesting and ensuring the conservation and regeneration of fish stocks. Once the research advice has been given, advisory committees develop draft fishing management plans. The preparation of the plan is generally based on scientific advice, past allocations, management policy and available economic analyses. The fishing management plan prescribes the total allowable catch by species for various geographic sectors, types of equipment and fishermen. An important part of the process in the past has consisted of consultation with various interested and affected groups.

8.87 However, our audit disclosed two weaknesses in the allocation process. First, as discussed previously under the heading Effectiveness Measurement, the Department had not defined clearly enough its socio-economic objectives with respect to the allocation of stocks. Similarly, the Department had not formally established priorities for, or developed trade-offs between, objectives when conflicts arose or where it was clearly not feasible to attain all the objectives.

8.88 A second weakness in the allocation process pertained to a lack of information on the economic and social effects of alternative allocation methods. We observed that the process of developing and implementing the management plans was becoming increasingly costly. We could not find evidence of cost-benefit studies of the consultation process or of alternative approaches for developing management plans, such as the method employed by the U.S. government whereby the fishermen's representatives make the allocation.

8.89 The Department should undertake studies of alternative methods of allocation of fish stocks, where feasible.

8.90 We also found problems in the co-ordination of specific fishery management plans developed in the allocation process with other departmental programs, particularly regulatory and licensing enforcement activities. Although many of the plans attempted to allocate existing fish stocks in a manner that would achieve a stable level of harvesting capacity, other programs either continued to permit expansion of existing harvesting capacity or permitted new entries into the fishery.

8.91 For example, the Fishing Vessel Assistance Program has, as noted previously, exacerbated the capacity problem. In addition, although the Department's fishing plans were based, in many instances, on a cut-off of limited entry licences, we found situations where, in 1980, licences in the Maritimes for limited fisheries for groundfish, herring and scallops continued to increase. The increased capacity thus generated tended to put more pressure on stocks that were, in some cases, fully utilized.

8.92 Although fishing management plans called for a commercial salmon fishing ban in New Brunswick, which ended in 1981, and for compensation payments of $1.5 million per year to be paid to commercial fishermen, bycatch and poaching of salmon, according to the Department, substantially defeated the purpose of the ban. Bycatch refers to fish caught while fishing for other species permitted under licence.

8.93 The Department should ensure that all its programs and activities relating to fish management are properly co-ordinated to minimize conflict with each other.

8.94 Licensing. Most major fisheries are controlled through the use of commercial fishing licences. In general, these major fisheries have limited entry licences, meaning that no further expansion of the fishery is allowed.

8.95 The Department lacked consistent and clearly stated licensing policies that covered ownership, utilization and transferability. Without such policies, regions have developed their own approaches that are confusing to fishermen and departmental officials alike. For example, on the West Coast, most licences can be transferred; on the East coast most cannot. The East coast regions also have different approaches to ownership. The Department could not give us any clear rationale for these differences.

8.96 A second weakness with licensing is that the Department has regulations that cover some, but not all, aspects of licensing. In 1981, the Department had to make an out-of-court settlement with a fisherman because, in the opinion of the Department's own lawyers, a licence could not be denied by policies that were not defined in regulations.

8.97 The Department should develop general principles and policies on licensing that cover utilization, ownership and transferability and should establish regulations covering these principles and policies.

8.98 Regulations. The Department issues regulations under the authority of the Acts that it administers. Procedures for issuing and amending regulations were inadequate to ensure that regulations were issued promptly when required. For example, the regulations covering the 1981 Atlantic Groundfish Management Plan were not promulgated by January 1981.

8.99 The Department should issue regulations on a timely basis.

8.100 Surveillance and enforcement. Historically, surveillance and enforcement activities have been directed toward traditional inland and inshore species such as salmon or lobster. During the 1960s and early 1970s, offshore stocks were managed by the International Commission for the Northwest Atlantic Fisheries of which Canada was a member. In 1977, when the 12-mile limit was extended to a 200-mile fishing zone, the responsibilities and complexities of surveillance and enforcement activities were altered dramatically. Canada assumed the sole responsibility for the direct management of a number of inshore and offshore fish stocks such as cod, herring, hake, halibut and redfish. The Department responded to this new role by introducing a number of measures, including foreign fishing limitations, licensing requirements, gear limitations and management plans to conserve and augment fish stocks.

8.101 The Department's surveillance and enforcement activities are divided into two areas, offshore and inshore. The Department has adequately managed its offshore surveillance and enforcement activities. Since 1977, it has instituted a number of techniques, including on-board observers, aircraft surveillance, vessel boardings and a computerized information system that ensure that both foreign and domestic offshore fleets comply with regulations.

8.102 There were weaknesses, however, in the management of inshore surveillance and enforcement activities. Operational planning was weak because the Department had not established priorities or specified the desired level of effort for each species and the allocation of resources between enforcement activities and other duties such as licensing, data collection, public relations and so on. The person-year and equipment requirements, and hence the cost of enforcement, varied considerably among species. Without priorities, it was not possible for the Department to set appropriate enforcement practices or to establish accurate budgets.

8.103 The Department should establish priorities as part of its operational planning system for inshore surveillance and enforcement activities. These priorities should be used in the operational planning process to determine how surveillance and enforcement effort should be distributed among the different fish species and among other activities, such as licensing and data collection.

8.104 Since inshore surveillance and enforcement cover a wide range of activities, it is important that the Department have an information system that records where resources are being spent. The Department did not have a management information system that covered inshore activities. Such information is essential in setting regional and area operational plans and in comparing actual results against plans.

8.105 The Department should ensure that it has appropriate information on the way in which inshore surveillance and enforcement efforts are being expended.

8.106 Inspection. The fish inspection program is designed to protect the public from health hazards and fraud. The Department uses over 400 person-years and an annual budget of $10 million to inspect some 1,300 processing plants. The inspection program has seven main components:

- vessels and vessel landings;

- unloading, handling and transportation;

- plant registration;

- inspection of plant operations;

- product inspection - grading;

- product inspection - health, safety, minimum quality; and

- product inspection - imports.

8.108 For approximately 60 per cent of the production that does not require mandatory inspection, sampling for inspection was not done on a statistically valid basis, and the Department had not determined the appropriate level of inspection. The Department is planning to rate plants; this is the first step in the effort to set the level of inspection.

8.109 The Department should develop criteria for categorizing hazard levels in all plants and facilities and, to aid in setting levels of inspection for each plant, the Department should apply these criteria to rate the plants and facilities it inspects.

8.110 The Department should develop statistically valid sampling and inspection plate for all fish plants and products it inspects.

8.111 The Department has an operational performance measurement system for inspection; however, this system was not being used because a number of regions found the output inappropriate to their needs. Consequently, it did not have access to accurate and timely information necessary for planning and controlling inspection activities.

8.112 The Department should ensure that appropriate and timely information is available to meet the needs of inspection management.

8.113 Fisheries and Oceans has two major initiatives under way that affect inspection. The first is a major evaluation that is to be completed early in 1982. The second is the Quality Improvement Program, aimed at improving the overall quality of Canadian fish products. It is too early to determine what results this new program will have, but the initial plan indicated that it may correct some of the weaknesses in the current fish inspection program by improving fish handling, introducing grades of fish and requiring processors to implement quality control programs.

8.114 Enhancement. Fisheries and Oceans enhances natural fish stocks on both the East and West coasts by a number of techniques such as hatcheries, spawning channels and lake fertilization. On the West coast, enhancement is a major element of the Department's operation under a program approved by Cabinet in 1977. On the East coast, enhancement activities are carried out on a considerably smaller scale.

8.115 The Salmonid Enhancement Program on the Pacific coast is intended to generate economic, social and environmental benefits through contribution to national income, regional development, employment, well-being of native people, and environmental preservation goals of Government. It applies fish culture technology to Pacific Salmonid species. One of the aims is to restore and preserve the historical levels and distribution of salmon by species and stock.

8.116 The Program is being carried out in two phases with the long-term objective of contributing to the Government's national and other goals by increasing the salmonid production by up to 150 million pounds per year. Phase I, the first seven years, has the objective of constructing fish hatcheries and other facilities capable of producing an additional 50 million pounds of salmonids each year at a cost of $150 million. Phase II will have variable annual salmonid production targets based on the attainment of the Government's current economic and social objectives.

8.117 The Program is administered by a Salmonid Enhancement Program Directorate which reports to the Minister of Fisheries and Oceans through a Salmonid Enhancement Board.

8.118 Our review of the Salmonid Enhancement Program included an examination of the overall planning process, financial management, the planning and acquisition of major production facilities, an assessment of the program evaluation procedures, reported earlier in this chapter, and the reporting on hatchery operations. Our examination did not extend to a review of the inter-relationship between the Salmonid Enhancement Program and other West coast activities such as stock management, regulations, licensing and enforcement.

8.119 Our summary conclusions are that the Salmonid Enhancement Program has developed sound systems for planning, for the acquisition of capital assets and for financial management.

8.120 The Program's strategic and operational plans were integrated and were based on extensive studies, user input and management review. These plans clearly identified the total program costs and anticipated outputs. The cost-benefit analyses of individual projects used assumptions and data generally in line with Treasury Board guidelines. Project selection criteria had been established to ensure proper selection and to maximize technical, social and economic benefits for the Program.

8.121 Our examination of four of the five major completed construction projects indicated that projects were selected on the basis of a study of alternatives and an analysis of costs and benefits. The projects were well planned and managed. The Directorate, however, had not developed a system to review and report on completed projects. Such a review would compare actual to planned, actual to average, or some other standard of performance of costs, time and engineering quality. Because no review system was in place, the Directorate could not ensure that strengths and weaknesses of projects were identified and dealt with appropriately.

8.122 The Salmonid Enhancement Program Directorate should develop and implement post-project evaluation procedures to ensure that strengths and weaknesses of projects are identified and used to improve the management of future projects.

8.123 The Salmonid Enhancement Program is at a stage of transition. The initial major construction projects have only recently been completed; their operation and maintenance are now becoming the major activity of the Directorate.

8.124 There was a general lack of formal and uniform systems for collecting data and reporting on the operations of the enhancement facilities. Although extensive data were collected and numerous reports produced, we found a lack of clear, concise summary reports on performance. For example, we did not find concise reporting on how soon full utilization of total production capacity would be reached and the extent to which the current output was ahead or behind schedule. There were no production standards against which performance could be monitored, nor was there any form of standard costs that could be used for evaluating the cost effectiveness of individual facilities.

8.125 The Department should develop production standards, standard costs and clear, concise performance reports.

8.126 The Department's financial management and reporting system has been modified by the Directorate to meet the requirements of the Salmonid Enhancement Program. These changes, however, have not been documented. The Directorate has introduced various modifications and improvements to the Department's financial management and reporting system; for example, variance analyses and reports were being prepared and followed up on a quarterly basis. These changes have been made independently of the Comptroller's Branch at headquarters. Without documentation of the new procedures and reporting requirements, there has been no transfer of knowledge to the other regions or branches within the Department. This lack of documentation could also cause problems if there were to be a turnover of the staff involved in the Program's financial management function.

8.127 The Department should ensure that all changes to the financial management and reporting systems are first reviewed by the Comptroller's Branch and documented.

8.128 The Department operates 12 hatcheries in the Atlantic region to enhance salmon and trout. The hatcheries require a staff of 54 and an annual budget of $1.9 million.

8.129 The hatchery system demonstrated lack of due regard for economy and efficiency. There were several uneconomic and inefficient hatcheries. For example, there were three hatcheries in close proximity serving the same river. The Department has acknowledged that economies could be achieved by closing at least one hatchery.

8.130 Our review of departmental documentation indicated that the hatchery situation had been evident to the Department for several years, and the situation had not been resolved.

8.131 The Department should rationalize the present system of hatcheries with a view to improving economy and efficiency.

Small Craft Harbours

8.133 The Program is implemented through the Small Craft Harbours Directorate in Ottawa and six regional offices. Approximately 70 per cent of the budget, the bulk of which is allocated for fishing harbours, is expended on the East coast. The Small Craft Harbours Program varies significantly from one region to another. For example, in British Columbia, the emphasis is on harbour management; in Newfoundland, construction and upgrading of facilities are the main concerns. Our examination was designed to determine whether the Department's acquisition and management of Small Craft Harbours demonstrated due regard for economy and efficiency.

8.134 Planning. We noted considerable user participation in identifying regional needs and thus in contributing to the development of regional plans. However, there was no approved comprehensive national plan for the Small Craft Harbours Program, and projects identified by the regions and submitted to Headquarters for approval were not ranked in order of priority on a national basis by Headquarters to ensure that available resources were allocated to individual projects in order of importance. The present system of relatively consistent allocations to regions did not ensure that resources were used in a way that would provide the greatest socio-economic benefit.

8.135 The Department should develop a system for ranking projects in order of priority on a national basis to ensure allocation of resources based on greatest need.

8.136 Project studies and review. There have been no written guidelines established to determine when socio-economic studies used to define the need for projects should be conducted. There was considerable variation among the regions as to when such studies would be conducted.

8.137 The Department does not require post-completion reviews of projects. There was no documented identification of implementation strengths to be carried forward or of weaknesses to be avoided in future projects. Escalation costs were not clearly segregated from increases or decreases due to changes in the scope of the work. All of these are needed to improve the estimating and/or control of future projects.

8.138 The Department should establish guidelines for identifying those projects requiring socio-economic studies and should ensure that post-completion reviews are carried out for major projects.

8.139 Harbour administration. Rates charged for services and use of facilities, as set out in the Fishing and Recreational Harbours Regulations, have not been changed since the responsibility for Small Craft Harbours was transferred from the Department of Transport in 1973. There were no procedures in place for the periodic review of rates to ensure their appropriateness. The Branch had made little effort to have original rates changed. Rates in place did not recover or reasonably reflect the cost of providing services and facilities. If the inflation index only had been applied to the rates, they would be at least double what they are now. If the Department had increased its rates each year at the same rate as the inflation index, the Department would have charged approximately $5 million more than it actually did using the 1973 rates.

8.140 The Small Craft Harbours Directorate should carry out periodic reviews of the rates charged for its services and facilities and, where appropriate, recommend changes in rates.

8.141 Effectiveness measurement. The Small Craft Harbours Directorate did not have procedures to measure and report the effectiveness of its program. Management has recognized the need and desirability for measuring program effectiveness. We were informed that, as a by-product of the Small Craft Harbours Evaluation begun by the Department in April 1981, new indicators would be developed.

Ocean Science and Surveys

Ocean Science

8.143 The purpose of the audit was to determine whether the systems enabled management to carry on research activities with due regard for economy and efficiency and whether there were adequate procedures for measuring the effectiveness of the program.

8.144 The research management systems in Oceanography were basically sound. Oceanography has recently made a number of improvements in strategic and operational planning for research; however, we found several areas where further improvements were required to ensure that full benefits accrue from these initiatives.

8.145 The planning process, initiated only a year ago, lacked specific guidelines about likely levels of funding for research in general and for targeted areas in particular. Further, existing program review and evaluation were not used fully to control the direction of research programs.

8.146 Unlike Fisheries, Oceanography is primarily engaged in basic research. Therefore, project selection is the critical point in the research project cycle where senior management can ensure that the right project is initiated. Since many of the projects continue over several years, it is most important that the selection process be objective, rigorous, documented and standardized throughout this decentralized program. Although there was an informal system, the Department did not have formal guidelines or selection criteria for documenting, proposing, costing, evaluating, selecting and controlling new research projects.

8.147 The Department should formalize its guidelines and selection criteria for selecting, controlling and evaluating new research projects, and ensure that these are communicated to all concerned.

Canadian Hydrographic Service

8.149 Our review of the Service included an examination of the planning and controlling process and the systems in place to ensure efficiency of operations. We concluded that the Service adequately planned and controlled the resources under its direct control. We identified problems with the Service's main reporting system, a system designed to be a chart inventory, production status and time reporting system for all cartography work done by the Service. Discussion with Service officials indicated that they were in agreement with our observations and currently have the system under review.

Support Services

8.151 We reviewed the management systems used in the administration- of departmental support services activities. In particular, we examined systems used for financial management, internal audit, electronic data processing, payroll costs management, and materiel and facilities management.

8.152 Financial management. Since the Department of Fisheries and Oceans is highly decentralized and the regions operate with considerable independence, there is a need for strong financial planning, functional direction and sound financial systems. In this way, senior management of the Department can have assurance that its financial operations are being properly carried out.

8.153 We found that there were weaknesses in financial planning and systems and a lack of functional direction from headquarters with respect to financial matters.

8.154 To meet its needs after it separated from the Department of the Environment, the DFO established a Comptroller's Branch in August 1979. During our audit, this Branch was in the process of identifying areas of departmental finance requiring improvement and was taking the necessary corrective action.

8.155 One of the areas where weaknesses existed was in the preparation of operational plans, Estimates and budgets. In many areas, there was little involvement by financial officers in the preparation of operational plans and Estimates relating to the 1980-81 fiscal year. Budget requests were not reviewed by financial officers to ensure that they had been properly prepared and contained adequate justification for the resources requested. Budgeting, for the most part, was not based on analysis of needs but was incremental. Subsequent to our examination, the Department has been taking steps to correct these weaknesses and issued detailed instructions for the preparation of the 1981-82 program expenditure plans.

8.156 The Department should ensure that financial officers are involved in preparing operational plans, Estimates and budgets and that they analyse regional requests to ensure that they are properly prepared and adequately supported.

8.157 The Branch was not regularly providing financial direction and co-ordination to the regions. Therefore, there was no assurance that financial operations were being carried out adequately and consistently throughout the Department. In addition, the Department had not clearly assigned the responsibility for developing financial systems either to the Branch or to any other group or groups within the Department. For example, because there was no uniform policy for controlling and accounting for moneys for research and development received from the private sector, each region had developed its own system for controlling and accounting for these funds. Effective 1 April 1981, the Comptroller's Branch was given the responsibility for systems development and maintenance.

8.158 The Comptroller's Branch should give functional direction to departmental financial units and ensure that the development of regional financial systems is properly co-ordinated.

8.159 Internal audit. The internal audit function is carried out by the Internal Audit Division of the Evaluation and Audit Branch. The Division has engaged the Audit Services Bureau of the Department of Supply and Services to perform most of the audits, with the remainder being carried out by public accounting firms.

8.160 We examined the mandate of the internal audit function and the manner in which audits were planned, conducted, reported and followed up.

8.161 To the date of our audit, no operational audits had been completed since the Division's mandate was expanded only in December 1980 to include audits of this type. However, the Division was preparing plans to address its additional responsibilities.

8.162 Although the Audit Committee was established in 1979, it met for the first time in April 1981. We found no evidence that the Committee had reviewed audit planning, audit policies, resource requirements, Internal Audit Report observations and conclusions or departmental action plans to correct deficiencies noted in audit reports.

8.163 The Audit Committee should give active guidance and support to the Internal Audit Division by reviewing its plans, policies and reports and by ensuring that there is adequate departmental follow-up of major observations.

8.164 Electronic data processing. The major role of electronic data processing (EDP) within the Department of Fisheries and Oceans is to provide the means to collect, organize and disseminate fishery and ocean information and to support scientific research. In 1980-81, the total EDP budget was $10 million, with 153 person-years devoted to EDP activities.

8.165 We found that there was no national EDP policy, long-term plan or EDP security plan. Therefore, the Department lacked assurance that its EDP operations were being developed in conformity with user needs and plans. The absence of an EDP security plan could result in the Department losing important segments of the information compiled by its computers and being unable to replace these data. This has happened on at least one occasion.

8.166 The Department should develop a national EDP policy, EDP long-term plan and EDP security plan.

8.167 Payroll costs management. In 1980-81, the Department utilized 5,500 person-years, and its payroll costs amounted to approximately $153 million.

8.168 We found that the Department had carried out little human resource planning and what human resource plans there were had not been properly integrated with long-term program needs. The Department was therefore running the risk that it would not have the appropriate number of people available with the skills necessary to meet its operational needs.

8.169 There were serious deficiencies in the Department's ability to forecast the future availability of existing human resources. The Department's records of its human resources were not sufficiently complete to enable it to develop an inventory of available skills, nor did it determine turnover rates, retirement rates, career development or succession plans. The Department, therefore, was not in a position to develop action plans to provide for needs based on an analysis of skills or projections of human resource availability.

8.170 The Department should improve its human resource planning by developing plans that are based on current and future operational needs.

8.171 The Department did not have a satisfactory training program in that there was no formal identification or assessment of training needs and no formal process for developing courses or programs based on an analysis of needs. Because the Department did not have a national policy covering its surveillance and enforcement activities, regions had set their own recruiting standards and developed their own training programs, and the amount and quality of training for both new and regular officers varied considerably among regions. The Department has recently appointed a national director who is responsible for co-ordinating national enforcement issues, including recruiting and training.

8.172 The Department was not using performance appraisals to help identify training needs. Existing training and development programs have been developed on an ad hoc basis. They consisted primarily of orientation courses given to new recruits. Courses were selected by individuals on the basis of personal interest, with little or no involvement by the human resources function.

8.173 The Department should adopt a more systematic approach to identifying employees' training needs.

8.174 The management of human resources was hampered by the fact that the Department did not have a comprehensive human resource information system. Besides providing classification, salary and other information with respect to employees on strength, such a system could also be used for providing other information such as turnover rates, attrition rates, retirement figures and the dates on which the performance of employees was evaluated.

8.175 The Department should develop human resource information systems that will provide the information needed by departmental managers for planning, training and other personnel management purposes.

8.176 Materiel and facilities management. The Department has a considerable investment in buildings and other structures and in various types of materiel. We found that, in the past, there had been insufficient attention given to the management of materiel and facilities but that, at the time of our audit, the Department was identifying and correcting deficiencies.

8.177 We reviewed the management of one building project, vehicles, laboratory equipment, vessels and inshore fish handling equipment.

8.178 Construction of the Northwest Atlantic Fisheries Centre in St. John's, Newfoundland cost $33 million and took place both before and after the Department of Fisheries and Oceans was separated from the Department of the Environment. Although economies were realized by cost reviews during the construction period, there was a lack of due regard for economy in planning the Centre. Our review of the consultants' design concept proposal, presented during the planning period, disclosed that it was incomplete in some important respects. For example, the estimated costs were in part understated and in part incomplete, with the result that the preliminary estimate was $8.8 million less than the final estimate. Further, the approval of Treasury Board was later sought and obtained without assessing the extent, if any, that inadequacies affected the validity of the proposal.

8.179 In addition, the Department proceeded with a segment of the second phase of the project costing $2.7 million on which Treasury Board had placed a ceiling of $2.0 million. Although the Department received Treasury Board approval to complete the second phase, it did not seek specific authorization to raise the $2.0 million ceiling to $2.7 million. The cost of the whole project did not exceed the approved total only because the Department did not construct the project's third and final phase. This third phase was to contain an addition 39,500 net square feet, representing one-quarter of the originally projected floor space.

8.180 The Department should ensure that project proposals are properly supported by accurate and detailed costs estimates.

8.181 The Department should maintain its expenditures within approved Treasury Board limits.

8.182 In our 1980 annual Report, we stated that, except as noted in paragraphs 2.109 to 2.113, the Department's systems for managing its fleet of vessels were generally adequate. We followed up on these observations and found that these matters had been dealt with adequately. One other matter raised with the Department was not dealt with: this concerns the Department's practice of evaluating major refits on a post-project basis without resolving, either with Treasury Board or the Department of Supply and Services, the latter's failure to include transportation and incidental expenses in evaluating repairs and refit bids.

8.183 In respect of inshore fisheries rehabilitation program equipment, the Department has taken or is taking satisfactory action on most of the matters raised in paragraph 12.3 of our 1980 annual Report. The items remaining relate to the failure to adopt and implement a cost recovery program and also to bill and collect container rentals promptly in accordance with lease terms.

8.184 Cost recovery. In 1978, the Governor in Council set out the requirements for recovering costs of rendering services to others. Contrary to those requirements, the Department has not been recovering any costs with respect to the use of its vessels on behalf of outside organizations. We estimate these costs to be $1 million a year. Further, in the operation of Bait Depots, only one-half of the recovery required by Governor in Council was being made, with the result that there was an under-recovery of approximately $1 million in 1980-81.

8.185 The Department should recover costs in accordance with Governor in Council requirements.

Information for Parliament

8.187 Assistance programs administered. The Department administers a number of assistance programs for fishermen; for example, the Fishing Vessel Assistance Program and the Bait Services Program. Operational objectives and results achieved by these programs should be included in the Estimates. A summary table, listing the assistance programs, with specific page references for more details later in the plan, would enable Members of Parliament to find quickly those areas in which they are particularly interested.

8.188 Initiatives. The Department has undertaken a number of recent initiatives such as the Salmonid Enhancement Program, enforcement of Canada's declaration of a 200-mile economic zone, and research in the Beaufort Sea and Hibernia fishing areas where oil exploration is taking place. Disclosure of these initiatives and their financial implications in the revised Estimates would create a context in which Members of Parliament could examine resource needs and establish a basis for subsequent accountability.

8.189 Operational objectives and measures of effectiveness. Members of Parliament are interested in knowing what results a program intends to achieve with the resources requested and how these relate to the program's overall objectives. For example, the resources for the Salmonid Enhancement Program might be related to targets for increased fish stocks and higher catches. Although it is true that the levels of fish stocks and catches are affected by factors beyond the control of the program, some statistics of past trends and future targets, accompanied by a narrative explanation, would give Members of Parliament a partial basis on which to judge the effectiveness of the program. Although difficult to project and measure, information on the specific socio-economic benefits -- national income, regional development, meeting needs of native people, employment, and environmental preservation -- would be even more helpful to Members in assessing program effectiveness. Similarly, specific targets and trends in results for other activities should be included in the Estimates wherever possible.

8.190 Additional ways to justify resource requirements. The information required to justify the level of resources depends on the nature of the activity. In many cases, disclosure of measures of efficiency and levels of service can be useful. For example, in describing recurring functions like field inspection and laboratory tests, the level of resources required could be related to the number of inspections or tests. The resources required for offshore surveillance and enforcement work could be related to the surveillance pattern selected; that is, by disclosing the mix of fixed and variable costs for patrols, the extent to which costs were increased by more frequent patrols would be made clear.

8.191 Resource requirements for research are difficult to justify. Here, Members of Parliament might find useful an explanation of the mechanism used to fix resource levels for research or to select projects. For example, the Estimates could explain that, in the fisheries management activity, the major part of the research effort is devoted to stock assessment and related biological research necessary for the rational allocation of the fish stocks. In the Ocean Science and Surveys activities, most of the research effort is for relatively basic work, and the Estimates could indicate that projects are selected based on peer group, management, and client judgements.

8.192 Capital. The Estimates should demonstrate that capital projects support the objectives of the program and that resources will be acquired with due regard for economy. The requirements for materiel should be defined in such a way that the materiel acquired will enable the user to meet the need for a given service in an economic and efficient manner. The choice among alternative types of materiel should be based on a thorough analysis of the relative costs and benefits. For example, Fisheries and Oceans meets its extensive requirements for ship time by using both charters and its own vessels. The rationale for this strategy should be explained in the Estimates.

8.193 Due regard for economy also requires that decisions on acquisitions or construction consider life cycle costing. For example, the Department has a program to replace, on a planned basis, older vessels of 6 metres or more in its fleet of 268 ships. The construction of new vessels has important operating implications in terms of future years' financial requirements that should be explained in the Estimates. Similarly, the Department should also explain in its Estimates the life cycle costs of the Small Craft Harbours Program and the Salmonid Enhancement Program.

Summary of Recommendations and Department's Comments

Effectiveness Measurement

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Fisheries Research

Recommendation

Department's Comment

Economic Development

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Fisheries Operations

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Small Craft Harbours

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Ocean Science

Recommendation

Department's Comment

Support Services

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment

Recommendation

Department's Comment