A aquaculture industry official in Newfoundland and Labrador believes federal policies played a role in Gray Aqua Group's financial troubles.

The company filed for bankruptcy protection this week, owing almost $40 million to dozens of companies.

Cyr Couturier, executive director of the Newfoundland Aquaculture Industry Association, said that under Canadian Food Inspection Agency rules Gray Aqua Group had to destroy fish infected by outbreaks of salmon anemia, costing the company millions of dollars.

Couturier said the company had to destroy its fish before they were large enough to sell.

Federal compensation is available, but Couturier said it doesn't go far enough.

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Cyr Couturier is the executive director of the Newfoundland Aquaculture Industry Association. (CBC)

"It's a small business that suffered some financial difficulties due to circumstances well beyond their control, such as getting a wild disease and not getting adequate compensation."

While Couturier still has hope for Gray Aqua, either way it's a learning experience for the industry.

"We just hope that they're able to restructure and continue on. If they can't, well, they'll just be a casualty in this whole sustainable development process that we have in Newfoundland and Labrador."

Couturier added that Gray accounts for about 15 per cent of the province's farmed salmon output.

The provincial government has $3.8-million equity stake in Gray Aqua.