A significant halibut quota owned by the provincial government is being harvested and landed in Nova Scotia by a Nova Scotia-based fish company, CBC Investigates has learned.

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.

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

That means the government-owned halibut quota is not providing any direct employment benefit to the province.

Fisheries and Aquaculture Minister Keith Hutchings says quota trade-offs between companies are not an uncommon practice in the industry.

In the case of Icewater, he says the halibut quota is a small price to pay for what has been a bigger overall success.

"Right now [Icewater] operates during the year, employs approximately 120 unionized positions and at peak can go to 180,” Hutchings said.

“So what we entered into originally, certainly we've seen that it's helped support the industry. In regards to the quota allocations the province purchased and leased back to Icewater, that was done to allow them to generate revenue to allow the viability of the operations out there. And we've seen that [to] be successful as well."

Keith Hutchings Fisheries Aquaculture Minister CBC

Keith Hutchings is the Newfoundland and Labrador minister of fisheries and aquaculture. (CBC)

As for the economic impacts of the fish being landed and processed in Nova Scotia, he says the benefits there are negligible.

The minister says he's open to any ideas anyone in the industry has.

"With halibut, there's very little secondary processing, it’s HOG — head on and gutted — and it's put right into the market," Hutchings said.

"From an economic point of view, it's landed there and it goes right into the Eastern Seaboard, is my understanding. But again, if there's something else we can do or we can look at, I'm certainly willing to do that."

Deal goes back to 2004

The quota is one of several attached to the Icewater deal, including everything from cod and haddock to halibut, turbot and flounder. They were previously owned by National Sea Products.

The provincial government acquired the quotas in June 2004 in what was called a resource "repatriation" move, geared to keep the plant in Arnold's Cove operating under a new company called Icewater.

The quotas are listed under a government-owned entity called the Newfoundland and Labrador Industrial Development Corporation (NLIDC).

'If we hadn't interjected in 2004, these quotas would have went elsewhere.'- Fisheries Minister Keith Hutchings

Under the terms of the 2004 deal, Icewater pays the province $50,000 per year to lease the quotas.

A decade ago, the quotas were not believed to be worth much. But that has since changed.

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

With groundfish making an apparent comeback, Hutchings says the move in 2004 was a wise investment.

"If we hadn't interjected in 2004, these quotas would have went elsewhere," he said.

Inshore concerns about halibut

The quota of 130 tonnes of halibut owned by the government is worth just over $1 million in current landed value, and is actually expected to grow to 150 tonnes this year.

It’s more than double the amount of halibut available to smaller enterprises on the south coast of Newfoundland.

Fishermen in the inshore under-65-foot fleet in that area have a total of about 60 tonnes to catch between them all.

Inshore fleets on the south and west coasts of Newfoundland have tried in vain in recent years to get the federal government to increase their quotas and bycatch levels to account for what has been a resurgence of halibut in those areas.

In fact, there's been so much halibut showing up in many areas of the province that it's caused other fisheries — like turbot in the Gulf of St. Lawrence — to be shut down due to overwhelming halibut bycatch.

Hutchings understand harvesters will be frustrated to hear that the province owns a substantial quota of halibut and that it's being fished and landed in Nova Scotia.

But he says quota levels, transfers, and allocations fall to the feds.

Hutchings says the province supports the inshore harvesters' call for increased access to halibut.

The provincial government’s quota deal with Icewater runs for another 10 years.