October 5, 1998
(Development and Rural Renewal)

Debt Restructuring Policy - Fisheries Loan 
Board Early Retirement and Licence Retirement 
Programs Post-TAGS Initiative

Beaton Tulk, Minister of Development and Rural Renewal, responded today to recent media reports that left the impression the province's approach for dealing with outstanding loans under the Fisheries Loan Board may compromise the ability of fisherpersons to participate in the post-TAGS early retirement and licence retirement programs.

Minister Tulk stated: "Government is sensitive to the circumstances and situation faced by fisherpersons and, contrary to some recent media suggestions, government has no intention of `scooping or gobbling up' their payouts merely to satisfy outstanding loans to the Fisheries Loan Board."

The minister said: "Government has a very clear policy on this issue and that policy is to deal with each case on its own merits and to treat all fisherpersons in a fair manner. The province will not act in a way that will unduly discourage fisherpersons from taking advantage of the retirement options available to them, or which will compromise the goal of reducing overall harvesting capacity in the groundfish industry.

"This is the same policy that was successfully applied with the earlier TAGS buyout programs in 1994 and 1995. Where there is an ability to meet some or all of their loan obligations to the taxpayer without causing financial hardship or otherwise interfering with their ability to get on with their lives outside the fishery, fisherpersons will be expected to do so. Where this cannot be achieved, the loans will be restructured to meet individual needs."

Under the previous TAGS licence retirement program in 1994 and 1995, the average federal payout to small boat fisherpersons was $94,000, while the actual average debt owing to the Fisheries Loan Board by these same individuals was $8,700. Furthermore, the province does not have the right nor did it attempt any automatic intercept of these debts, but rather reviewed each one on its own merits and worked with individual fisherpersons to arrive at mutually acceptable arrangements. "Fisherpersons were generally satisfied with this approach and there is no reason to believe that any different picture will emerge with the new program" said Mr. Tulk. "Clearly, fisherpersons are not at risk of any financial `grab' by the province."

Minister Tulk also noted that the average payout to larger boat fisherpersons under the earlier TAGS licence retirement program was $204,000, as against an average debt owing government through loan guarantees with the chartered banks of $175,000. In all of these cases, however, the fisherpersons had considerable equity in their vessels and the sale of their vessels was more than adequate to cover the full balance of their loans. "In other words, all of those fisherpersons were able to pay off their debts while retaining the full amount of their buyouts," said the minister, "and there is no reason to believe that the situation will be any different this time."

Minister Tulk also stressed that the province has a responsibility to ensure that the taxpayers' interests are appropriately protected. "It would not be fair to the taxpayer, or to those fisherpersons who have faithfully met their loan obligations to government over time, to simply write-off the balance of all loans that are currently outstanding without reference to individual circumstances and need." There are presently almost 3,500 government loans outstanding to fisherpersons that are worth in excess of $68 million.

"Those fisherpersons who have met their obligations over time, and the taxpayer in general, have a right to expect their government to act responsibly in managing this significant investment," said the minister.

"This is why the circumstances of each fisherperson must be considered on a case-by-case basis and why a `blanket' approach is not appropriate."

Fisherpersons who are thinking about taking advantage of either the early retirement or licence retirement programs under the post-TAGS initiative should contact the nearest office of the Department of Development and Rural Renewal if they have outstanding loans or loan guarantees with the Fisheries Loan Board to discuss their own particular circumstances. "The department will be as considerate and as sensitive as it can be to the individual circumstances of fisherpersons," concluded Mr. Tulk.

Contact: Scott Reid, Communications, (709) 729-4570.

1998 10 05                                               2:30 p.m.