DFO enacts new laws
It won’t be against the law for a fish harvester to borrow money from a fish processing company under the laws enacted Thursday by Canada’s Department of Fisheries and Oceans (DFO).
However, DFO won’t reissue a fishing licence if a loan agreement is worded in any way that gives the lender any decision-making control over the fishing enterprise.
Mark Waddell, Director General of Indigenous and Sectoral Policy with DFO in Ottawa, said the regulations are intended to ensure the person who holds the fishing licence is the person who makes all decisions related to the management of the enterprise.
Through discussions with the fishing industry — including groups like the Fish Food and Allied Workers (FFAW) and the Canadian Independent Fish Harvesters Federation (CIFHF), as well as lawyers and accountants — Waddell said the industry indicated it didn’t want to cut off access to capital, recognizing that these (processors) are sometimes the only investors available to the industry.
“The harvesters identified a number of situations where they would like to avail themselves of deals with non-financial institutions, through reasonable loans or reasonable supply arrangements.”
And if a fish processor, or a rich uncle, loans money to a fishing enterprise, they will also be protected with changes to the DFO notices and acknowledgements system.
Up to now, only registered financial institutions and provincial loan boards that had a debt against a fishing enterprise could attach a note to the harvester’s file asking DFO to notify them if the licence holder applied to transfer the licence to another fisher.
Waddell said that will offer protection to processors, “offering them some comfort that the licence holder won’t sell his quota or licence and be able to walk away with the money they owe the processor.”
The change to the regulations comes after years of debate and numerous court cases challenging ownership of fishing licences. The amendments to the Atlantic Fishery Regulations 1985 and the Maritime Provinces Fishery Regulations clarify the rules and create penalties for those who disregard the law.
Waddell said during the consultations with the industry, they heard of at least 25 different scenarios involving controlling agreements.
“Many (industry) members were exceedingly forthright with us, sharing with us their documentation relating to their corporate structures and that was invaluable in terms of being able to recognize what is out there.”
Both the FFAW and the CIFHF issued press releases welcoming the new laws.
In a statement, the FFAW said, “Though there is still work to be done, these new regulations ensure that inshore harvesters … are in less danger of exploitation and our fisheries are more protected.”
In an interview last week, FFAW president Keith Sullivan said no one knows the exact number of harvesters who are bound by “controlling agreements” with processors, but he suggests the number could be very high in Newfoundland.
Sullivan also said at the time the union was anxious for the DFO policies on controlling agreements to become law, providing for penalties for those who don’t comply with the rules.
Those penalties are high, said Waddell.
Harvesters who apply for their annual fishing licences must disclose whether they are in a controlling agreement. Those that are, will have to provide proof that they have restructured the loan agreement so the lender no longer has control over sale of catches or operation of the enterprises.
“Some enterprises are already on our radar,” said Waddell.
And in those cases where he DFO has reason to believe the licence holder does not have independent control over the licence and quota, the department will not reissue the fishing licence until the fish harvester can prove there is no controlling agreement.
Those who are in controlling agreements but do not disclose that information, run the risk of losing the licence altogether, and risking fines of up to $100,000, if the DFO discovers the lie.
Meanwhile, Waddell said the DFO will be conducting information sessions with fish harvesters and industry groups over the next several weeks to educate them on the new laws.
“Very early in the new year we will be hosting seminars and information sessions,” he said, so licence holders will know what to do when it comes time for them to renew their fishing licences.
“We’re going to continue to work with industry to understand those regulations so they can continue to prosecute viable fisheries and hold viable enterprises, with the monies and the benefits flow back to the licence holder, which is the intent of the rules around owner/ operator.”