Ottawa to invest in 'fisheries innovation' for Atlantic Canada following EU trade deal

With Canada's trade deal with the European Union on track to come into force provisionally within weeks, the federal government is set to announce a new fisheries innovation fund. Just don't call it compensation, Dominic LeBlanc says.

'I didn't say compensation,' fisheries minister says as federal-provincial talks continue

Fisheries Minister Dominic LeBlanc says that no compensation is on offer to Atlantic Canada. Instead, an innovation fund will help the fisheries sector compete as Canada's free trade deal with the European Union forces an end to local processing requirements. (Darryl Dyck/Canadian Press)

With Canada's trade deal with the European Union on track to come into force provisionally within weeks, the federal government is set to announce a new fisheries innovation fund.

But don't portray this new money as a way to compensate Atlantic Canada, Fisheries Minister Dominic LeBlanc told CBC News last week.

"I didn't say compensation. That was your word," LeBlanc said after an announcement in Vancouver last week.

"What I said is that we're prepared to work with provinces to look for a way to make our fishing industry the most innovative, productive, sustainable and globally competitive that we can."

Compensation was what Newfoundland and Labrador was looking for in the face of the Comprehensive Economic and Trade Agreement (CETA), which will prevent Canadian provinces from placing any export restrictions on raw fish.

Currently, minimum local processing requirements are in place to protect jobs, particularly in more remote fishing communities.

When CETA takes effect, export restrictions must end — except for Newfoundland and Labrador's processing requirements, which will be phased out over three years.

Last week's ratification by the European Parliament puts CETA on track to kick in as early as April 1, assuming Canada's federal and provincial governments complete the legal and regulatory changes required to comply with the new deal.

Harper failed to support processors: Trudeau

The previous federal Conservative government and former premiers from Newfoundland and Labrador were in conflict over CETA compensation.

As the deal took shape in 2013, a $400-million fisheries fund was in play.

But the federal government didn't want its investment to become a slush fund for the industry — federal money was contingent on "demonstrated losses."

The province refused to cede its jurisdiction over minimum processing requirements and went on to accuse then prime minister Stephen Harper of reneging on his compensation offer.

At the time, then third party leader Justin Trudeau wrote in support of then premier Paul Davis, saying Harper's government "failed to adequately address the concerns of Canadian sectors that may be negatively impacted by CETA, including Newfoundland and Labrador's fish processors."

Justin Trudeau supported Newfoundland and Labrador's request for assistance for its fish processing sector prior to becoming prime minister. His provincial Liberal colleague, Dwight Ball, was elected late last year and has yet to pick a fight with the federal government over CETA compensation. (Adrian Wyld/Canadian Press)

For a time, the spat appeared to threaten CETA's implementation.

If the province doesn't drop its local processing requirements, the federal government could be vulnerable to being sued for not holding up its end of the treaty. 

Since the election of Trudeau's government in the fall of 2015, both sides have said only that talks are underway toward finding a solution.

But what form would that solution take?

Similar to dairy strategy

"This deal was never finalized," Newfoundland and Labrador Premier Dwight Ball said on a conference call as he hosted fellow Atlantic premiers in talks in Corner Brook Monday. "If it was finalized … they would have the cheque by now. It didn't happen."

LeBlanc's portrayal of what's on the table echoes the Liberal government's offer to the dairy sector last November: help to compete, but not compensation, per se.

Harper's government announced a multibillion-dollar compensation package for what the supply-managed agriculture sectors, including dairy, might lose under CETA and the Trans-Pacific Partnership trade agreement. Some elements also were contingent on demonstrated losses.

The Liberal dairy programs were announced before CETA's ratification vote. But even still, it's unclear whether this funding arrived fast enough to improve the sector's competitiveness before new European cheese imports hit the shelves.

Meanwhile, the fisheries package isn't quite ready yet.

'Massive economic opportunity'

LeBlanc said last week he's been "encouraged" by his recent conversations with Atlantic provinces affected by the lifting of export restrictions.

"They understand that our government is serious about supporting the fishing industry and ensuring that this historic agreement can benefit this sector of the economy in an unprecedented way," he said.

Newfoundland and Labrador Premier Dwight Ball, seen here with Judy Foote, the federal cabinet minister responsible for his province, have been in talks to figure out what kind of assistance the fisheries sector needs as the Canada-EU trade deal takes hold. (Andrew Vaughan/Canadian Press)

CETA will immediately lower tariffs on Canadian fish and seafood to zero. But the simultaneous loss of local processing jobs would offset gains.

"We're convinced that this agreement offers a massive economic opportunity for the fish and seafood industry across the country," LeBlanc said.

Ball agrees "tremendous benefits" are possible from CETA's tariff removals. But he still wants to finish the conversation about compensation. The three-year phase-out for the local processing requirements buys breathing room. 

"We're going to take the time that's required to have the discussion, take the discussions to the fullest extent to see what's available to us," he said. 

LeBlanc said an announcement with the precise details of the new innovation funding was coming soon: "It probably won't be in the next couple or few weeks, but it won't be two to three months away."

It's possible a federal budget expected in March could provide more details.

Investments in support of innovation and growth across various sectors of Canada's economy are expected to be a recurring theme in the 2017 budget.


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