Nova Scotia CBC Investigates

Lobster fisherman defends maligned practice of 'controlling agreements'

'Twenty per cent of the boats in Meteghan wouldn't have got started in the industry without some help'

Paul Withers - CBC News

December 20, 2017

Fishing boats loaded with lobster traps head out from Eastern Passage, N.S. (Canadian Press)

The federal government's attempt to stop corporate control of the lucrative lobster fishery is facing another challenge, and the Nova Scotia fisherman at the centre of the case has taken the rare step of speaking out about it.

Hubert Saulnier, 63, is a familiar face on the Meteghan wharf in southwestern Nova Scotia. He has been fishing for more than four decades and has held many positions with the local fishermen's association.

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Saulnier is also one of 14 fishermen in a so-called controlling agreement with Yarmouth Sea Products, one of southwest Nova Scotia's largest lobster buyers.

In a controlling agreement, a fisherman holds the fishing licence, but in many cases, his or her boat is supplied by a company that reaps the profits from the catch.

In Saulnier's case, Yarmouth Sea Products lent him money for his boat, and in return, he has pledged to sell them his catch.

Hubert Saulnier is also one of 14 fishermen in a so-called controlling agreement with Yarmouth Sea Products, one of southwest Nova Scotia's largest lobster buyers. (CBC)

It's Saulnier's controlling agreement that has resulted in an upcoming hearing with the Atlantic Fisheries Licence Appeal Board.

Although the agreements are opposed by inshore fisheries associations, Saulnier says he makes no apologies for his arrangement.

"This has been going on for 30 years," he said. "As a matter of fact, it's got a lot of entrants into [Lobster Fishing Area] 34, and right now they are doing quite well."

Saulnier gestures to the bustling wharf in the Acadian fishing port, where he says 20 per cent of the 51-vessel fleet got their start with a controlling agreement with a lobster company. 

DFO's latest measure on corporate control 

The Department of Fisheries and Oceans (DFO) has cracked down on controlling agreements, saying they have been "proliferating" and undermining policies to ensure that the benefits of an inshore fishing licence go to the fisherman holding the licence.

DFO set a 2014 deadline for fishermen to exit controlling agreements.

To enforce its position, DFO brought in a test known as PIIFCAF, or "Preserving the Independence of the Inshore Fleet in Canada's Atlantic Fisheries."

View of the Meteghan wharf. (CBC)

The policy doesn't prevent a fisherman from entering into a business arrangement with a company to sell his or her catch to them. It just says the fisherman must have control over the licence when he or she wants to transfer or sell it to someone else.

A third party — such as the company — cannot control or influence the transfer.

Saulnier and Yarmouth Sea Products say they have crafted an agreement that is PIIFCAF-compliant, as it allows Saulnier to sell his licence to any core fishermen.

"When I exit the fishery, all I have to do is sell a licence to a qualified individual. Now the qualified individual has to pay me and then I pay off the rest of the loan to Yarmouth," Saulnier said.

The man behind the agreements

For decades, Yarmouth Sea Products lawyer Clifford Hood has been the mastermind behind the agreements.

Saulnier's controlling agreement has been amended at the request of the fisherman's lawyer to remove any conditions limiting the transfer. Those included a clause requiring a one-year notice period and another imposing a $25,000 "breakup" payment to the company.

"I am confident — and so is Mr. Saulnier's counsel — that we have crafted an agreement that fully complies," Hood said.

The next step is convincing the Atlantic Fisheries Licence Appeal Board. If that can't be done, Hood predicts further legal challenges are ahead.

For decades, Yarmouth Sea Products lawyer Clifford Hood has been the mastermind behind agreements that give companies control of fishing licences. (CBC)

"Where is the clarity going to come from? It's going to come from the Federal Court of Canada," he said. "In my view, that's where we are going to end up."

A legal challenge to PIIFCAF has already made its way to the Federal Court of Canada.

Earlier this year, Justice Cecily Strickland sided with DFO, ruling the federal fisheries minister was entitled to strip fishing licences from Labrador fisherman Kirby Elson, who was in a controlling agreement with two companies. An appeal has been filed in that case.

When asked to provide a copy of the controlling agreement, both Saulnier and Hood declined CBC's request. Nor would Saulnier say how much he still owes Yarmouth Sea Products.

The company's owner, Steve Corkum, declined interview requests.

Saulnier says the arrangement is nothing new for him — and many other fishermen in this area.

"These young guys — not old like me — started working, running a boat for a company lobster fishing, working hard, day and night. They made some money, put the money aside — then they quit the company and bought their own rigs," he said.

"Twenty per cent of the boats in Meteghan wouldn't have got started in the industry without some help."

'Huge amount of value'

Saulnier's view is one that is rarely stated publicly and is vehemently opposed by inshore fisheries associations, including the Maritime Fishermen's Union, of which Saulnier is currently a vice-president.

Controlling agreements are the path to a corporate takeover of the lobster fishery, the associations say.

Fisherman at the Meteghan wharf. (CBC)

Allain Barnett, a former research scientist with the University of New Brunswick, has written about the struggle between federal fisheries policies that spread the wealth and greater market efficiency through corporate control.

DFO has allowed "consolidation" in most other fleets, he said, but the lobster fishery is the final battleground.

"There is a huge amount of value in these fisheries," Barnett said in a telephone interview from Miami, where he's currently conducting research with Florida International University.

"[The lobster fishery] is essentially the last stand for the independent fish harvesters. It is extremely important to maintain fishing livelihoods in coastal communities. The fishing associations have lobbied very vigorously to maintain that independence. I think DFO has taken notice of that."

Where fleets have been allowed to consolidate, licences have become a commodity and entry into the fishery become even more restricted and expensive, said Melanie Sonnenberg, president of the Canadian Independent Fish Harvesters Association.

She pointed to British Columbia's sablefish fishery, where she said one fisherman paid an Asian owner more than $700,000 to rent the licence to go fishing.

That's where the lobster fishery is heading if DFO allows companies to control licences, Sonnenberg said.

"The handwriting is on the wall if this continues with this sort of corporate control of the fishery," she told CBC News.

Lobster boats head out from West Dover, N.S. in 2016. (Andrew Vaughan/Canadian Press)

Sonnenberg also scoffed at the lack of disclosure around Saulnier's agreement.

"We need to see [these agreements]. We need to look at some of the hooks that are in them for younger fishermen and older fishermen who are getting out," she said. "We have to have that debate, but we can't have it if we can't see the agreements to see what kind of control is being exercised."

'Why bust it?'

If Saulnier wins at his hearing, it means fishermen will have found a way to be in a controlling agreement while still satisfying Ottawa's policy to protect the inshore fishery.

If he loses and DFO takes his licence away, he wonders how he'll be able to repay his debt to Yarmouth Sea Products.

Both Saulnier and Hood say DFO's war on controlling agreements flies in the face of reality in southwestern Nova Scotia.

"The evidence out there is that it's working. Why bust it? There's no evidence the communities are suffering and that's the key," Hood said. "[What] we should be talking about here is not who owns the licences, but how many there are in the community. We have to have a system that keeps the 900-odd enterprises. 

"That's what we have to do, that's what generates the incomes."

Several weeks ago, Saulnier said he was asked to serve as a member of the Atlantic Fisheries Licence Appeal Board, where he is awaiting a hearing on his potentially precedent-setting case.

"I think I'll send in the paperwork and see what happens," he said with a laugh.

ABOUT THE AUTHOR

Paul Withers
Reporter

Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.

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