Opposition Leader Dwight Ball criticized the Tories in the Newfoundland and Labrador legislature Wednesday over a deal that allows a government-owned halibut quota to be caught and landed in Nova Scotia and “not providing any of the direct employment benefits for our province.”

CBC News Investigates

But the government stressed the overall benefits of the arrangement, noting it is part of a deal that helped save a threatened groundfish plant in Arnold’s Cove.

Both sides were reacting to a CBC Investigates story Wednesday that revealed the current arrangement to sub-lease the halibut quota outside the province.

“In 2004, the government also said that this deal would have the highest economic and job impact,” Ball said in the House of Assembly.

“Well, obviously now if you are stepping away by allowing this to be landed and shipped by Nova Scotians, well, that is not the highest economic impact. What the minister is saying, that there is no one in Newfoundland and Labrador that could actually fish that quota, I take it.

“This quota has been landed in Nova Scotia and it is bad enough, as I said, it is being fished by Nova Scotians. So why did you not insist that this be landed and fished by Newfoundlanders and Labradorians?”

Fisheries Minister Keith Hutchings noted that allocations for vessels over 100 feet can be transferred to any entity in Newfoundland and Labrador, and the owners of such vessels are free to negotiate with Icewater for access.

Hutchings stressed that the 2004 deal with Icewater Seafoods Inc. helped save between 120 and 180 jobs at the fish plant.

“Is the honourable member suggesting that we are going to pick between the inshore harvesters and those 180 workers in Arnold’s Cove, and we are going to shut down a very stable cod facility with the cod coming back?” Hutchings said.

“This was a comprehensive agreement to build the industry, not to walk away from it, but to step in when High Liner stepped out. We stepped in to make sure it was secured, and we are going to continue to do that and work with all industry to make sure it continues to move forward.”

Suite of quotas leased to Icewater

The quota — 130 tonnes of halibut in the fisheries management areas 3NOPs-4VWX, which covers all of the south and west coasts of Newfoundland — is part of the suite of quotas the province leases annually to Icewater Seafoods Inc. in Arnold's Cove to help fuel its operations.

CBC Investigates discovered that Icewater isn't harvesting that halibut quota at all. The Newfoundland company has instead been sub-leasing it to an unnamed harvesting entity outside the province.

Icewater Arnold's Cove fish plant file CBC

The Icewater fish plant in Arnold's Cove is pictured in a file image. (CBC)

Neither the province nor the feds would name that company, citing commercial sensitivity, but CBC Investigates has learned that the halibut is being landed in Nova Scotia.

The provincial government acquired the halibut quota, plus other groundfish quotas, in June 2004 for $3.5 million.

The acquisition was part of a deal geared at keeping the plant in Arnold's Cove operating under a new company called Icewater.

Under the terms of the 2004 arrangement, Icewater pays the province $50,000 per year to lease the suite of quotas, which include everything from cod and haddock to halibut, turbot and flounder.

The province now estimates the quotas to be valued between $16 and $20 million per year.

With files from Rob Antle and Jamie Baker