NLIS 4
August 31, 2005
(Fisheries and Aquaculture)
 

Minister comments on New Ferolle and Englee

Fisheries and Aquaculture Minister Trevor Taylor today responded to comments made by Opposition Leader Gerry Reid regarding the selection of an operator for the plant in New Ferolle for the 2005 fishing season.

The Department of Finance seized the New Ferolle property earlier this year from James Doyle (Sr.) and Sons Limited due to default of mortgage obligations, and subsequently leased it temporarily to Ice Cap Fish Company. This arrangement allowed the plant to operate this season while the necessary outstanding legal issues involved in divestiture are resolved prior to the property being sold.

�We had few options that would ensure the plant would operate this spring other than entering into a temporary lease arrangement with Ice Cap,� Minister Taylor said. �We could have instead waited and offered the plant for sale once the legal issues were resolved, but that would have resulted in the plant not operating this year and no one in the community wanted that. Plant workers and harvesters employed by Ice Cap strongly supported this arrangement.�

Ice Cap Fisheries had been operating the plant under a lease arrangement with the previous owners. Government has been attempting to recover a $771,200 debt from James Doyle (Sr.) and Sons Limited resulting from a payout of a loan guarantee in 1997. The previous government guaranteed a loan of $771,200 to James Doyle (Sr.) and Sons Limited, while the former Enterprise Newfoundland and Labrador had approximately $1.2 million in outstanding equity investments.

In 2004, the Department of Fisheries and Aquaculture agreed to temporarily transfer the processing licence from James Doyle (Sr.) and Sons Limited to Ice Cap in 2004 to give the two companies an opportunity to resolve outstanding financial and legal issues involved in submitting a proposal to government for repayment. When an agreement was not reached by the deadline of November 1, 2004, the Department of Finance made arrangements to seize the property in an attempt to recover the money owed.

�This is a one-year lease with Ice Cap until a buyer can be found. It�s unfortunate that the company is currently facing short-term cash flow problems that have resulted in their failure to meet their cash obligations, including their payroll,� Minister Taylor said. �One thing the Opposition leader is forgetting in his criticism of government is that we wouldn�t be in this situation if the previous administration had not put $2-million into an operation that is worth less than $500,000 and without adequate security.�

The Labour Relations Agency has been approached by some employees and is working to provide a resolution to the issue of employees not receiving pay owed.

The Opposition leader also makes reference to the situation in Englee, where the plant there was closed last year due to structural issues. Residents are understandably frustrated that the company that owns the plant and the processing licence has not indicated what it plans to do. Government is committed to finding a resolution to the issue facing Englee and to pressuring the company to state its intentions. However, it must be done responsibly and within the policies and procedures in place to handle licensing issues.�

�Unlike the previous government, we want to make sure if we end up in court we have the best possible chance of winning,� Minister Taylor said. �Despite his criticism, the Opposition leader is not doing anything to assist the people of Englee or to offer solutions to their problems. If he has the answers, he should provide them to the people of Englee. Unfortunately he did not have the answers for Englee when he was the minister and he hasn�t found them since.�

Media contact. Tracy Barron, Communications, (709) 729-3733, 690-6157

2005 08 31                          3:50 p.m.


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