Quota transfer demand feasible, Rideout insists

Newfoundland and Labrador's fisheries minister is confident a deal can be hammered out with Ottawa on transferring Fishery Products International's groundfish quotas to the province.

Tom Rideout maintains that such a transfer is a deal breaker in the tentative agreement FPI has reached to sell its plants to Ocean Choice International and High Liner Foods.

Themove would be extraordinary, and will likely require some careful diplomacy amid sour relations between Newfoundland and Labrador and the Conservative government in Ottawa.

The federal government maintains exclusive jurisdiction over harvesting quotas, while the province controls processing licences.

A March 1 letter sent by federal Fisheries Minister Loyola Hearn to Rideout — which has been obtained by CBC News — lays out five conditions that must be met before Hearn will consider transferring FPI's quotas.

The conditions call for a speedy resolution, getting employees back to work, ensuring landings stay in Newfoundland and Labrador and that the plan have endurance over time.

Importantly, though, Hearn said he wants a deal that will "ensure that the federal minister's discretion is not fettered" or perceived to be fettered. Hearn said he is also "concerned about any precedents that this may have for other fisheries."

Speaking to reporters Tuesday, Rideout said that condition will be accommodated.

"We have no desire to fetter or threaten or diminish or deteriorate or limit any authority of the minister of Fisheries and Oceans for Canada. None," said Rideout.

"We're not asking for anything else other than to hold the quota."

The provincial government was able, briefly, to obtain quota in a deal several years ago to keep a fish processing plant open in Arnold's Cove.

Deal possible, Reid says

But Opposition leader Gerry Reid said he does not think Ottawa has ever transferred quotas directly to a provincial government.

Nonetheless, Reid is optimistic that ways can be found to strike a deal.

"It's not going to be transferred from the federal government to the province," Reid said.

"The quotas will be given to whoever takes over FPI, and then they will give a letter of intent or whatnot to the province, saying if we don't fulfill our commitments that we gave to you, then we will pass over the quotas."

FPI announced earlier this week it had reached tentative agreements to sell its primary assets.

The provincial government, through the FPI Act, has some control over the affairs of the former Crown corporation, which was formed in 1984 in a massive restructuring of the then-collapsing fishing industry.

FPI was privatized in 1987, and in 2001 was the target of a hostile takeover led by Nova Scotia processor John Risley.

Hearn has said he will not comment on the possible transfer until he receives a formal request.

Rideout said FPI and Ocean Choice— which wishes to buy most of FPI's plants and trawlers— both agree with the province obtaining control of the quota, and will soon put that in writing.

Ocean Choice's proposal includes obtaining FPI's offshore shrimp and scallop quotas directly.

High Liner is seeking to buy FPI's secondary processing plant in Burin.