Report says DFO policy could have a $375 million hit on fishing industry in southwestern N.S.

By Tina Comeau

NovaNewsNow.com

A coalition made up of more than 300 fishermen and processors has released a report that says a new DFO licencing policy will sink the value of lobster, groundfish and tuna licences in southwestern Nova Scotia by $375 million.

Not only will this impact fishermen looking to sell their licences and on those banking on these sales for their retirement, but it will impact the economy of the region says the Coalition for an Economical Atlantic Fishery.

The coalition commissioned a report following the Department of Fisheries and Ocean’s announcement in April of a new owner-operator licencing policy. DFO says the policy is aimed at preserving the inshore fishery in Atlantic Canada by ensuring that the person who owns a licence is the only one who has control over it. Anyone in a controlling or trust agreement – where someone else benefits from the licence – must terminate that arrangement within seven years.

A report released by the coalition Friday, which was prepared independently by Gardner Pinfold Consulting Economists Limited, looks at the economic and business implications of DFO’s change to licensing policy.

The impact the economists have come up with is significant says lawyer Clifford Hood, spokesperson for the coaltion. He says a $375 million hit to a region as small as southwestern Nova Scotia is huge.

Licence values would decrease, its been concluded, because they’d be hitting the market at the same time and there would be new rules or processes to follow when it comes to who can lend the money to buy them, and even who can buy them at all.

For Carl Cottreau of Clarks Harbour, who runs a lobster tank house that employs 23 people, the policy isn’t good. He’s in a trust agreement where a licence he depends on to bring lobster into his business is in another person’s name.

“The seven-year timeframe that they’re allowing us to have these trust agreements and giving us a sunset clause to get rid of them, what that does is it means I have to place my trust agreement and licences on the same market that everyone else is, so that’s going to diminish the cost,” he says. “I have to take what I can get for it. And a gentleman that wants to retire has to compete on the same market.”

And with the average age of fishermen in the region being around 58 years old, many will be looking in coming years to retire from an industry that does not have an employee pension plan. Their licence is their pension plan.

Margo Swim of Xsealent Seafood Company says her business is in trust agreements because as a processor they can’t own multiple licence, yet they still need to secure a supply of product coming into their business that employs 30 people.

“In seven years these people will have no work,” she says. “Without the security of supply they’re out of work.”

Already in the short term, notes the report, there is considerable confusion and uncertainty with marine brokers in Yarmouth reporting that trades in licences has come to, more or less, a complete halt as buyers and sellers try to sort out implications of the policy. Two or three licence deals in the works following the policy announcement already saw a 30-40 per cent drop in the value of the licence.

But Hood says there is some good news. The good news is it’s not to late for DFO to change its policy. It’s already exempting certain fleets from it, plus it’s granted a deadline to licence holders when it comes to declaring their status.

“Our job is to try and convince government that they should look at this very carefully,” Hood says. “This isn’t one that there isn’t a solution for.”

The coalition hopes to achieve this by engaging in more dialogue with the department and the minister of fisheries.