Deal must end, fishermen tell committee

By Andy Walker

SOU’WESTER

If the lobster fishery is to survive in P.E.I., the Liberal government must end it a deal with Ocean Choice International that limits processing capacity. This was the message a legislature committee studying the collapse of Polar Foods International received from the industry.

Polar Foods, created in 1998 out of the merger of six smaller processing companies, went into receivership just before the 2004 fishing season when the Bank of Nova Scotia called in its loans. The former Conservative government purchased the company’s debt and put it up for sale. The majority of the assets, including the biggest plants in Souris and Beach Point, were purchased by Ocean Choice.

The Newfoundland-based company struck a 10-year deal for paying off the $14 million purchase price. Under those terms any incentives government gives any other processing company must also be offered to Ocean Choice. As well, if the province issues any additional processing licenses until 2014, the company’s debt is considered paid in full.

Donald Johnston of the Southern Kings and Queens Fishermen’s Association believes the deal effectively sold out Island fishermen and smaller processors like co-operatives.

While the terms of the deal have been public for some time, a copy of the actual agreement has never been tabled in the public realm. Jeff Malloy of the Acadian Fishermen’s Co-op asked the committee to do just that.

However Johnston indicated he had a copy of the document. Committee chair Bush Dumville questioned legislature staff about whether the committee could view the document. Since the hearings of the committee are governed by legislative privilege, the document could be seen.

Provincial Treasurer Wes Sheridan said breaking the deal would cost Island taxpayers millions. Johnston conceded that point but argued the industry would not survive unless government action was taken. "If this deal stays, we’re going," he said.

Malloy argued the deal gives the impression there is an overcapacity in lobster processing in Canada’s smallest province. But he maintains almost half of the lobsters landed at the Island ports are trucked out.

"The processing capacity that we presently have on P.E.I. cannot handle the lobsters landed," he said.

With rising fuel costs and the high Canadian dollar, Malloy argued the processing sector is in need of government help. He said the deal with Ocean Choice doesn’t allow that to happen.

"Imagine the uproar in this province if tomorrow the government announced there was a hotel chain in Charlottetown that was buying a building from the province, but as part of the deal there would be no more financial aid or even project partnerships for anyone else in the tourism industry for the next 10 years," Malloy said. "Well, this is what has happened to our industry without even an explanation.