Yep. As MM points out this *might* result in no boats, and no licence income. The 'laffer curve' principle at work again, but the problem is solved.
But somewhere between 0% rise in licences and 400% rise in licences, there might be a sweet spot where a higher licence fee results in more income. Certainly it would result in few boats so less wear and tear on the system, so less maintenance would be needed. A Good Thing surely as it would be a step towards the canal system becoming sustainable.