Fisheries and Aquaculture
May 1, 2007

Government Ownership of FPI Groundfish Quotas
Will Provide Significant Long-Term Benefits

The assurances of the Provincial Government that no sale of Fishery Products International (FPI) will proceed unless all groundfish quotas are transferred to the province will ensure significant long-term benefits for the fishing industry in Newfoundland and Labrador.

The Honourable Tom Rideout, Minister of Fisheries and Aquaculture, today said that substantial onshore economic activity is derived from groundfish and that these quotas must remain in the province for the benefit of all those depending on the fishery.

"The top priority for our government is ensuring that maximum benefits are received," said Minister Rideout. "Unlike shrimp and scallop, which are primarily offshore factory freezer operations, a substantial component of the groundfish sector involves significant onshore employment through processing. Under current DFO policy, any Enterprise Allocation licence holder is not obligated to land their catch in the province and therefore is free to freeze at sea and send this product to other countries for processing. This is a tremendous threat to our province, and our ownership of these quotas will ensure that Newfoundland and Labrador continues to enjoy these benefits over the long-term."

The minister noted that in the event of a successful sale, the groundfish quotas will be obtained by the province at no cost.

Minister Rideout added that Ocean Choice International (OCI), or any other potential buyer of FPI�s primary assets, would have great difficulty financing the acquisition without the collateral provided by the shellfish quotas. It is important for the successful company to have these quotas to improve the long-term financial viability of the operation.

"While government focused primarily on the groundfish quotas based on reasons related to employment, provincial control of these quotas will provide the long-term leverage necessary to ensure that the shellfish quotas are retained by the successful buyer for the benefit of Newfoundland and Labrador," said Minister Rideout. "Shrimp will continue to be landed in this province as it makes economic sense to do so. Most of the crews are from this province, and employment opportunities will continue to exist in onshore loading and offloading as well as all at-sea operations. We will be seeking assurances from the company where there is any risk that such activity will not continue."

"Furthermore, the scallop fishery is not a significant fishery for our province, but it has provided strong financial returns for FPI," continued the minister. "As with shrimp quotas, the ownership of the scallop quotas by OCI is important to ensure the long-term viability of the Newfoundland and Labrador assets."

Minister Rideout reiterated that any transaction requires government approval.

"Our government continues to exercise due diligence throughout this process, and we will not approve any sale unless we are certain that the public interest is protected," said the minister.

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Media contact:
Lori Lee Oates
Director of Communications
Department of Fisheries and Aquaculture
709-729-3733, 690-8403
oatesll@gov.nl.ca

2007 05 01                                           5:25 p.m.

 


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