What about Clearwater and the offshore lobster fishery?

Media attention is trained on St. Mary’s Bay in southwest Nova Scotia, where the Sipekne’katik First Nation led by Chief Michael Sack has been exercising Treaty rights to a “moderate livelihood” fishery since September 17. But what is happening in the offshore lobster fishery is going largely unnoticed. 

That is absolutely understandable, given the very ugly scenes that erupted when the Mi’kmaw fishers were met by swarms of angry Acadian commercial fishers, some uttering racist slurs, who issued threats and cut their traplines, after which a Mi’kmaw boat was burned and a lobster pound burned to the ground. 

But what is happening in the offshore could also have wide-reaching impacts on the Atlantic lobster fishery and independent inshore fishers, and is also worth keeping an eye on. 

As the Halifax Examiner reported here, just nine days before Sipekne’katik fishers took to the waters to lay lobster traps on the 21^st anniversary of the landmark Marshall decision that affirmed Mi’kmaw Treaty rights to fish for a moderate livelihood, Membertou First Nation and Clearwater Seafoods announced that they had “reached an agreement for the sale of two of Clearwater’s eight offshore lobster licences” to Membertou. 

“Membertou is investing $25 Million to purchase the licences,” read the press release. 

This deal marks an end to Clearwater’s monopoly on offshore lobster licences; it previously owned all eight of them in the massive Lobster Fishing Area (LFA) 41. But it also raises many questions about what it means for Clearwater and Membertou First Nation, for the offshore, and indeed, for the inshore lobster fishery. 

What’s in it for Clearwater and Membertou? 

As reported previously, Membertou Chief Terrance Paul told the Halifax Examiner that he didn’t have a number for the jobs that the deal would create for First Nations people, although he would like “at some point” to integrate as many Mi’kmaq as possible into the Clearwater operations. 

He also said that the Membertou licences would be fished by the Clearwater offshore lobster boat Randell Dominaux, as this is “much more efficient and economical.”

Clearwater vice president sustainability and public affairs Christine Penney told the Examiner that the deal involved a “long-term harvest agreement” that allows Membertou to harvest the quota on the Clearwater vessel that fishes in LFA 41. The quota for two of the eight licences would be 25% of the total, or 180 tonnes. 

“We’ve got an agreement that governs that and provides revenue sharing, employment, and training opportunities,” she said. 

CBC reported that Membertou went to the First Nations Finance Authority for the funds for the purchase. 

A DFO spokesperson told the Examiner that since 2007, when DFO launched the Atlantic Integrated Commercial Fisheries Initiative (AICFI), and up to the 2020-21 fiscal year, AICFI has provided $97 million in direct funding to Membertou First Nation to “build commercial fishing enterprise (CFE) capacity, support harvester training, and expand and diversify CFE operations.”

Asked if any of the $97 million had been used to purchase the two Clearwater offshore licences, the DFO spokesperson replied: 

As noted in the announcement on September 8^th, 2020, the agreement for the sale of two of Clearwater’s eight offshore lobster licences to Membertou First Nation represents a voluntary commercial transaction between Clearwater Seafoods and Membertou First Nation. The transaction is subject to regulatory approval by Fisheries and Oceans Canada. Fisheries and Oceans Canada was not involved in the formation of this agreement.

The Examiner emailed Membertou First Nation for further clarification on the terms of the sale of the offshore lobster licences, and is still hoping to receive a reply. 

Something “fishy”?

These days, the cost of a single commercial licence to fish lobster inshore can be exorbitant — hundreds of thousands dollars, especially in the lucrative LFA 34 off southwest Nova Scotia, where the Sipekne’katik First Nation is currently engaged in their moderate livelihood fishing.

LFA 34 abuts the offshore LFA 41 where Clearwater  until very recently had a monopoly.

A DFO spokesperson told the Examiner that the combined annual and quota fee that Clearwater pays for all eight licences in LFA 41 is $279,000. 

Asked how or if the sale of two licences to Membertou will change the cost of the LFA 41 licences, Christine Penney replied that, “Going forward, Membertou will pay the licence fees for their licences and Clearwater will pay the licence fees on our remaining licences.” 

She did not specify whether all licence fees are the same. It they are, that means Clearwater will now pay $209,250 and Membertou $69,750 annually for their offshore lobster licences. 

Questions were sent to Penney about what Clearwater would get from fishing the Membertou licences, and for how many years it had agreed to use its boat to do so, but as of publication time, replies had not been received.  

A lifelong lobster fisher in southern Nova Scotia — I’ll call him Frank — who was a mate on a former Clearwater boat that used to fish LFA 41, deems the deal “fishy.” In Frank’s view:

… they didn’t even really sell to them guys [Membertou First Nation]. If you think about it, they [Clearwater] sold the licences to Membertou for $25 million, but they’re still catching the lobsters and getting the boat share. 

When Frank worked for Clearwater between 2000 and 2007, it had four boats fishing in LFA 41, and he says the “boat share” that the company collected for the lobster catch was 65%. 

Frank wonders what the First Nation got for $25 million, telling the Examiner: 

No one can figure it out … Clearwater’s still catching the lobsters and holding them until the price gets big, and getting the big flip on them lobsters when the price gets big after holding them. So what are the natives getting? It’s a mystery to me.

Two weeks after the Clearwater–Membertou deal was announced, Undercurrent News reported that Premium Brands Holdings, a food giant with operations throughout Canada and the US — together with Membertou First Nation and Miawpukek First Nation of Newfoundland and Labrador — was “being tipped as the frontrunner” in the bid to buy Clearwater Seafoods.

In 2018, Premium Brands Holdings bought Ready Seafood, one of the “leading processors, distributors and marketers of lobster” in the US with three facilities in Maine. Premium Brands appears to be on an acquisition spree; already in 2020 it has gobbled up two Canadian food companies, Allseas Fisheries and Global Gourmet. 

If the rumours about a deal with Premium Brands and Clearwater goes through, it would give the two First Nations a much larger share of the offshore lobster industry on LFA 41, and Clearwater would likely stand to profit handsomely in selling off its control of these and other licences to fish public resources to a multi-billion-dollar transnational corporation.

No clear answers

But how did Clearwater get control of these licences in the first place? 

Turns out there are no straightforward answers to that simple question, at least not ones that Clearwater or DFO were willing to provide. 

Asked for details of when, exactly, Clearwater obtained its eight licences for LFA 41, Penney replied:

Clearwater purchased the offshore lobster licences through a series of historic transactions, the last of which was completed in 2007.

A DFO spokesperson offered this cryptic and incomplete reply to the same question: 

Clearwater acquired the licences over time through licence re-issuance, i.e. transfer. In 2007, Clearwater became the lone offshore lobster licence holder. 

The DFO spokesperson directed me to the Integrated Fisheries Management Plan for information on the licensing and management of the offshore lobster fishery. It failed to explain how Clearwater got control of LFA 41, but did provide a brief history of the offshore lobster fishery. 

From swordfish to lobsters

According to DFO, it created Atlantic Canada’s offshore lobster fishery in 1971 as a reaction to the growth of the US offshore lobster fishery on Georges Bank. 

Lobster District A, as Canada’s new offshore lobster fishery area was then called, covered the entire outer portion of the Scotian shelf, extending outward from the inshore boundary line that ended at 50 nautical miles from shore.

This came shortly after the US began restricting imports of swordfish because of new standards reducing the allowable levels of mercury in food in the 1970s. This hurt inshore commercial fishers in southwest Nova Scotia — longliners who fished using main lines with baited hooks attached — who depended on the US market for their swordfish. The federal government offered 56 longline swordfish fishers licences for offshore lobsters. 

Sam Elsworth is the former president of the Halifax West Commercial Fishermen’s Association, and co-owner of Sambro Fisheries Limited as well as a founding member of the Nova Scotia Swordfishermen’s Association. He told the Halifax Examiner that to understand the origins of the offshore lobster fishery one has to go back to the decision by the Canadian government to declare all Canadian-caught swordfish mercury-contaminated, something he describes as “Canada at its inept international fisheries management best.”  

As Elsworth recollects it — requesting that we include the caveat that he is 77 years old and his is an “ageing mind” — the US market accounted for 95% of Canadian swordfish exports at the time. So when that market was no longer available, “a black market in trans-shipping developed immediately,” and the Americans “quickly displaced Canada as one of the world’s leading nations in the landing of swordfish,” by using illegally trans-shipped Canadian fish.  

Elsworth continued:

So what to do with the excess longline swordfish vessel capacity? Well, why don’t we try offshore lobstering? I seem to recall there were four licences issued, and an exploratory fishery began. I don’t remember all of the recipients, or how the distribution was accomplished. But I do know one licence went to Lockeport and another to Sambro. The guys on the receiving end of these licences were good fishermen, and quickly figured out how to make a successful venture. The Sambro men were personal friends. They were getting on in years, and after perfecting the techniques, sold to (I think), first Continental Seafoods. They in turn eventually became assets of Clearwater.

From that point on, the history and the development belong to Clearwater. None of the pioneers are still living. I can’t help but wonder what they would be thinking, and their disbelief at the value today’s fishery assigns to those licences. It all began as a bit of a Hail Mary hand-off!

Inshore fishers unhappy with new offshore lobster fishery

DFO’s website reports that by 1972, only six swordfish vessels had taken up offshore lobster fishing. When two more licences were awarded four years later, inshore fishers in Southwest Nova Scotia (SWNS) “expressed serious concerns” about the impact that the new offshore lobster effort could have on their inshore fishery. 

“The average landings for SWNS lobster decreased from 4036 t [metric tonnes] during 1970–1976 to 3120 t for the period of 1976–1980,” according to DFO.

In response to the fishers’ concerns, DFO imposed several restrictions on the offshore lobster fishery. This included freezing the number of offshore licences at eight, limiting the number of traps per vessel to 1,000, applying a 10-month season to be chosen by the vessel owner, and setting a total allowable catch (TAC) of 408 tonnes on a part of LFA that included the Brown’s Bank area closest to the inshore fleet. 

In 1979, DFO then closed the Brown’s Bank area, identified as LFA 40, to protect lobster brood stock. 

According to Shannon Arnold, marine policy coordinator at the Ecology Action Centre, right from the beginning and on through the 1990s and early 2000s, when offshore lobster licences were being bought up, inshore lobster fishing associations were very concerned — and also very vocal — about the potential impact of the offshore fishery on lobster stocks. 

She told the Examiner that as a result of the pressure coming from inshore fishers, DFO brought in conservation measures that it might otherwise not have implemented, including a relatively conservative total annual catch (TAC) and a larger minimum size for caught lobsters. 

As reported previously, in 1986 DFO set the TAC for LFA 41 at 720 tonnes, and it is still the same today. 

Unlike the inshore fishery where DFO sets seasons and trap limits, Clearwater can now fish LFA 41 all year round with no trap limits.

Tumultuous decades in the Atlantic fishery 

Rick Williams, a research consultant and research director for the Canadian Council of Professional Fish Harvesters, is a former provincial deputy minister and professor at Dalhousie University, and also the author of the 2019 book, “A Future of the Fishery: Crisis and Renewal in Canada’s Neglected Fishing Industry.” 

In an interview, Williams said that throughout the 1970s and until the mid-80s, in addition to shellfish (lobster, scallops, crab, oysters), inshore fishers tended to harvest a wide range of fish species, including groundfish (cod, haddock, hake, Pollock, halibut) and pelagic species (mackerel, herring, Gaspereau, tuna). 

So when DFO was opening up the offshore to lobster fishing in the 1980s, inshore fishers were also mobilizing to press the federal government to protect groundfish stocks, which were declining rapidly primarily because of overfishing by industrial fleets. The decline in groundfish stocks meant they were becoming increasingly dependent on lobster.

In the 1960s and 70s, foreign fleets heavily fished the offshore. But when the 200-mile limit came in in 1977, Williams said the foreign fleets were pushed out of that zone, and “the federal and provincial governments felt that overnight they had to create an industrial fishery that would be able to replace the foreign fleets, those big boats and those big plants overnight, literally in the space of four of five years.”

According to Williams, this resulted in: 

… massive investment in setting up an industrial high-volume offshore fishery with huge onshore plants … They were private companies created by public investment. The government gave them hundreds of millions of dollars in grants and loans, low interest loans, and so on.

And so the inshore people, vessels under 65 feet, basically, got marginalized and pushed aside. Roméo Leblanc from New Brunswick was the fisheries minister, and he brought in a policy called fleet separation, which basically said that in fisheries with vessels under 65 feet, companies that processed fish could not harvest fish, could not own licences. And at the same time, they also brought in limited entry licensing, meaning there was a fixed limit on the number of licences that would ever be granted by the minister.

Fleet separation, according to Williams, meant that:

…ownership of access to the resource in coastal waters would stay in the fishing communities. When the fisherman died or retired, the licence could only go to another fisherman. It couldn’t go to a company or go to another province. So it would stay in that community. And it would stay in a small business owned by a local person. 

According to Williams, in 2008, Conservative DFO minister Gail Shea from PEI brought forward the Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries Policy (PIIFCAF) to strengthen fleet separation and also owner-operator policies. The latter meant that: 

… the guy who owned the licence had to be on the boat when the licence was fished. The purpose of that was to prevent people from leasing out their licences, and allow one rich fisherman to get control of 10-15 licences from other people. That was starting to happen. 

Williams points to Canada’s west coast to illustrate what happens to the inshore fishery where there is no owner-operator regulation, as is the case in British Columbia: 

… it’s created a situation where the actual working fishermen on the water are all mostly sharecroppers. They have to live on about 25 to 30% of the value of what they catch. And 70% goes to the guy who owns the licence or the quota. Because of owner-operator, we don’t have that on this coast. 

Then in 2018, Williams says, “Roméo LeBlanc’s son, Dominic, created the Atlantic Fisheries Fund and introduced major changes to the Fisheries Act to give Fleet Separation, Owner-Operator, and PIIFCAF Policies the force of law.”

However, Williams recognizes that some unscrupulous operators are flouting the rules and putting the independent inshore fishery at risk, adding that people do find ways to get around the rules: 

With fleet separation and owner-operator, there are lots of under-the-table things going on. But generally speaking, we have a professionalized fishery where only active fishermen [have licences]. Lobster, snow, crab and shrimp represent 80% of the total value of Canadian fisheries, and the export value is now in the range of about $8 billion. That’s over $6 billion of income that flows to small businesses in coastal communities. 

Grounding of the groundfish fishery

Meanwhile, in the offshore fishery, Williams said that in the early 1980s, all the big industrial fish companies that the federal government set up with massive amounts of public money — including National Sea Products and Fisheries Products International — went bankrupt. 

Once again the government stepped in the pump public money into the private sector. According to Williams: 

The government bailed them all out and gave them private property ownership of 90% of the groundfish stocks. That formally pushed the inshore guys out of the groundfish industry. And so 10 or 15 years later, in 1991, all the groundfish stocks started to collapse. And by 1994, you had a total moratorium on all groundfish fishing across the Atlantic region. You can blame that on the Canadian company boats, overfishing, but nobody really knows the balance of factors that caused the collapse. It would primarily be foreign fleets, in the 1960s and 70s, which were picking millions of tonnes of cod, particularly off the Grand Banks. 

Williams said the Canadian fleets kept up the same level, which meant that: 

… in the 1990s, with all the groundfish gone, shellfish species, particularly lobster, crab and shrimp, began to dramatically increase and in the space of five, six, seven, eight years, the inshore — under 65-foot fishing fleets — went from being impoverished, marginalized, no income, in crisis to having control of the most lucrative fishery. 

He continued: 

The difference between groundfish and shellfish is that the Canadian groundfish industry was completely structured around high-volume, low-value commodities, for example the vast majority of our cod caught in the 1970s and 80s was exported as frozen cod blocks to prisons and hospitals in the US. So what happened with shellfish such as lobster, crab, and shrimp is that they were selling into much higher value markets. And in the 1990s, 90% of it was still being exported to the US, and U.S. companies were exporting it to Europe and Asia and so on. But nevertheless, at significantly, higher product value. 

And so all of a sudden, fishing inshore, the poor, the marginalized, the peripheral part of the industry suddenly became the richest part of the industry. And Roméo LeBlanc’s decision to ring-fence the under-65-foot fleets so that they couldn’t be owned by companies, and could only be owned by individual licensed fishermen, created a different industry structure than you see in almost any other part of the Canadian economy, where small business owners were capturing this massive growth in product value. 

Kirby Report paves the way for Clearwater

Williams traces the collapse of the groundfish stock in the early 1990s to what he describes as the “completely destructive, irrational industry structure that was just kind of mindlessly adopted from foreign fleets.” 

That industry structure seems to have its roots in the 1982 report by Michael Kirby, who was appointed by then-Prime Minister Pierre Elliot Trudeau’s Liberal government to chair a task force on Atlantic Fisheries. The report, “Navigating troubled waters: A new policy for the Atlantic Fisheries,” rejected what it called the “rural-romantic” approach to fishery.^[1]Navigating troubled waters: A new policy for the Atlantic Fisheries. Report of the Task Force on the Atlantic Fisheries. Michael J.L. Kirby, Chairman. December 1982

Williams blames the Kirby report for the “decision to hand over ownership of 80 or 90% of the groundfish to two or three companies and make it their permanent private property:”

That’s through a system they call enterprise allocation. It’s often called individual transferable quotas. Basically, the government — the crown — gave private companies for free — zero cost — hundreds and hundreds of millions of dollars worth of fish, with permanent property rights. And they fish it as long as they wanted. Or they could sell it on the open market. The idea was that government wouldn’t intervene. So that same model applies in lots of other fisheries … with the offshore enterprise allocations, they can go sell it to the Chinese, which they’re currently doing. They can go sell it to whomever. And it’s because it’s their private property. It’s a public resource that is transformed into a private property. 

Speaking in the 1999 film by Stefan Forbes, One More Dead Fish, former Acadia University professor, the late Don Grady, said that the “essential message” of the Kirby report was that the entire fishing industry should be reshaped so that the large corporations that were growing rapidly at the time, “could rely on the fishery resources as their private preserve to make money.”

The government persisted with its support for corporate fisheries, and when the groundfish collapse came DFO blamed over-fishing on all the players, including handliners, boats less than 12 feet long that used hooks and lines.

This was an accusation that Grady found ludicrous. Speaking in the 1999 film, he said: 

Who depleted the bloody fishery? Was it the inshore fishermen of Nova Scotia? God help us. Was it the hand-liners who raped the resource and very nearly killed it? No. It was the large corporate ships and you don’t have to have a PhD in oceanography to know why and how. They are dragging and when they do that their big plates on the ocean floor they destroy habitat.

With shellfish just about the only lucrative fishery left at this point, the largest corporate player, Clearwater Seafoods, was busy on the offshore with its lobster licences and scallop draggers. 

Speaking in the same film, John Risley — co-founder of Clearwater Seafoods —defended the way Clearwater fished with draggers:

A fish drag will do damage to the bottom. It will cut off — you know the bottom is irregular — it will tend to flatten the bottom off. Absolutely, that’s the case. On the other side, you could argue, well, “so what?” What is the economic value of a mound of rock and whether the mound of rock is two feet up, or whether it’s flat, could somebody please explain to me what is the difference? We’re getting economic value from taking that rock and levelling it, as we would take a field and turn it into an arable condition by getting rid of the weeds, old stumps and so on, and tilling it and getting it productive, isn’t that having some positive effect?”

Risley also had some harsh words for inshore lobster fishers:

Who do you think is poaching the lobsters? Who do you think is fishing in excess of the trap limits? That goddamn independent fisherman. And so what you’ve got to do is say to people, “Look, these are the rules, and if you break those rules, you’re out. Break the rules, you’re out. Out! Gone! Find a new job! You lost your licence!”

Ironically, when Clearwater broke the rules and got caught nearly two decades later, it didn’t lose any of its licences and Clearwater is still far from being “out” or “gone” from the fishing industry.

Clearwater breaks the law and gets a “slap on the wrist”

In June 2016, the Conservation and Protection (C&P) branch of DFO issued a report reviewing Clearwater’s offshore lobster fishery.  That report states that in December 2014, when DFO boarded the company’s boat, the Randell Dominaux, “evidence was gathered that demonstrated a significant marine resource loss linked to the fishing practices.” 

A formal investigation led to these findings about Clearwater Seafood fishing practices:

Large quantities of traps are being left unattended in the water for significant lengths of time. E.g. Aug 30^th – Oct. 28^th, 2014 (68 days), 8500+ traps left in the water during scheduled repairs.

This led to “high lobster mortality / cannibalism.” 

It also broke the law. 

Atlantic Fishery Regulations (1985) Section 115.2 “prohibit any person from leaving fishing gear unattended in the water for more than 72 consecutive hours. The purpose of the regulation is to minimize loss of fishing gear, incidental mortality, the potential for gear conflict and spoilage of catch.”

As reported in Part 3 of the Lobster Fishery at a Crossroads series, several lobster fishers have told the Examiner that this 72-hour regulation is a good one, because if lobsters are left unattended in a trap, they will eat each other and any other bycatch in the trap. 

Clearwater Seafoods and CS Manpar, its company that operates the Randell Dominaux, were charged, and in September 2018, the latter pled guilty. The Clearwater company was convicted in a provincial court of “gross violation” of fisheries regulations. 

It did not lose its licence, as John Risley had said every fisher who broke the rules should. Rather, Clearwater, with annual sales worth nearly half a billion dollars, was fined $30,000. 

During the court case, the Crown stated that DFO had given Clearwater ample and clear warnings, starting with a PowerPoint presentation in June 2016 to “representatives from senior management of the Clearwater Seafood partnership” that made it clear “storage of gear at sea was not permitted.” The Crown continued:

At this meeting the representatives were advised that the continuation of this practice could result in an enforcement action. This morning was followed by a written warning by way of a detailed letter by DFO dated Aug 16, 2016. The letter was directed to Christine Penney the VP sustainability public affairs for both companies. The letter reinforced the discussion that had taken place on June 3, 2016 and again warned the continuation of the practice of storing gear at sea could result in enforcement action.”

Clearwater continued the practice after this …. As DFO officers found in 2017.

Statements were subsequently obtained from the two captains operating the Randell Dominaux during the period of time in and around September 11 to November 4, 2017. Both Captains Randall Scott and Ernie Matthews ID’d themselves as employees of Clearwater and it was confirmed that approximately 38 trawls or 3,800 traps were stored at sea in lobster fishing area 41 unattended. It must also be noted that both captains advised that they were not made aware of the warnings from DFO by their employer.

Penney denies this, telling the Examiner that: 

The warning related to an incident where gear was not properly stored according to our own internal protocols. This initiated an internal review as well as a broader discussion with DFO about the practice of storage at sea. Working with the Regulator, we refocused on innovating and improving the fishery to change this practice. The statement that the Captains were unaware of the warning is not accurate. The Captains and crew were aware of the changes that were required and directly involved in finding innovations to the way in which we operate the fishery. We made significant investments in modifications to the vessel to allow for safer transport of traps. We have eliminated the practice of storing gear at sea. Sustainability and responsible harvesting are core values at Clearwater and when changes need to be made, we make them.  

And:

The practice of storing gear at sea under proper conditions and in predetermined locations with the gear disabled was a longstanding historic practice in the offshore fishery due to the challenges and safety concerns associated with transporting the gear on deck. This practice was always communicated transparently to DFO and historically was accepted practice.    

DFO’s impact statements to the court appear to contradict this, maintaining that: 

… the practice of leaving unattended traps in the oceans represents a serious conservation risk to Canada’s marine resources and both commercial and non-commercial species and also considers the negative message sent to other fishers in the industry particularly the inshore that this practice is acceptable general deterrence focuses on not only actual harm done but the potential harm.

Asked if Clearwater had been compliant on all the directions it received from DFO in 2016 to make it comply with the law, and how its compliance was being monitored, a spokesperson replied (rather unhelpfully):

The Conservation & Protection branch of Fisheries and Oceans Canada has the responsibility of monitoring compliance in all fisheries. Fishery officers conduct regular patrols by air, land and sea to ensure all licence holders are compliant with the Fisheries Act.

Shannon Arnold of Ecology Action Centre thinks DFO has allowed Clearwater to consolidate and set up its offshore lobster fishery, using just one boat for all of its licences, in a way that made it impossible to obey the rules. 

Said Arnold: 

They consolidated all those offshore licences to fish on one big boat and somehow wrangled an exception to a rule that one licence holder couldn’t have more than 50% of the quota — and they created a fishery that they couldn’t logistically fish within the rules. For years, they just went ahead and bent the rules and no one seemed to be able to stop them, even if everyone knew it. Now that they had a slap on the wrist, they are trying to change the law to suit them and maintain their exclusive access to an abundance of lobster.

An inshore fisher caught flouting rules, she said, may get a very serious fine and has traps taken away. 

One lobster fisher told the Examiner that he was once fined $2,500 when DFO officers found one under-sized lobster in his catch, and in total he spent $10,000 trying to get the charges dropped against the apprentice who was just beginning his training. 

But Clearwater continues to fish, and has not even lost its Marine Stewardship Council certification, something Arnold says is “ridiculous.”

Clearwater is now pressuring DFO to change the 72-hour rule, which it is considering, as the CBC’s Paul Withers reported in 2018.

What now for the offshore?

As mentioned earlier, it is not clear when, exactly, Clearwater managed to get a monopoly on the offshore lobster licences, or how much it paid for them. 

However, with Clearwater now looking for buyers, and reports circulating about possible bidders, it is likely that new owners will soon control the lobster, scallop, clam, shrimp, and groundfish licences operated by the company co-founded in 1976 by John Risley, now a billionaire who appears on the list of Canada’s richest.  

For a time in 2018, it looked as if Clearwater would lose its monopoly over Arctic surf clam fishery, when then-minister of Fisheries and Oceans, Dominic LeBlanc allocated a quarter of the clam quota to the Five Nations Clam Company, a partnership comprising Premium Seafoods of Isle Madame in Cape Breton, and a consortium of five First Nations in the Atlantic provinces. 

Clearwater threatened legal action against the government for what it called a “failure in public policy and abuse of power by the Minister.”

As CBC reported, the licence to Five Nations was then cancelled after news broke that there were family ties with Dominic LeBlanc and other Liberals, and that it failed to obtain a vessel for the fishery. The full surf clam quota was then restored to Clearwater for a year.

In March 2019, Clearwater and 14 First Nations in Nova Scotia and Newfoundland signed a 50-year partnership on the lucrative Arctic surf clam fishery — a public resource on which Clearwater had held a monopoly for decades.

Clearwater’s press release stated: 

“The strength of this agreement is the opportunity it creates for the fourteen First Nations adjacent to the resource to become meaningful participants in the commercial fishery,” said Chief Terrance Paul (O.C.) [Order of Canada], Chief of Membertou First Nation and Co-Chair of the Assembly of Nova Scotia Mi’kmaq Chiefs.^[2]In late October 2020, Chief Terrance Paul stepped down as co-chair of the Assembly of Nova Scotia Mi’kmaw Chiefs.  “This is a business development model that has been successful for our community in other sectors and it makes sense to extend it to the seafood industry with Clearwater, as they have industry knowledge and experience.”

The voluntary agreement will be effective immediately and benefits to participating First Nations are retroactive to January 2019.  The Agreement will provide millions of dollars in benefits to First Nations through annual revenue sharing, training, leadership development, employment, as well as procurement of goods and services from Indigenous suppliers.

Clearwater and the Marshall decision

As reported in Part 2 of the Lobster Fishery at a Crossroads series, “it’s unclear if or what Clearwater received from the feds in agreeing to the transfer of the surf clam licence, but the company clearly managed, once again, to benefit from Canada’s reconciliation efforts with First Nations.” And: 

In an interview done at the time of the Marshall decision in 1999, Bernd Christmas, a Mi’kmaq lawyer and negotiator for the Assembly of Nova Scotia Mi’kmaw Chiefs, said the Assembly had met with Clearwater co-founder and owner, John Risley: “You could tell in his face, he’s frustrated. [Clearwater’s] greatest fear is that the Mi’kmaq people are going to set up the same thing as Clearwater. Mi’kmaq have constitutionally protected access to the resource, while they have to lobby for their access.” 

For his part, Risley said at the time that he had questions about the geographic limitations of where the Treaty rights could be exercised, and whether it just included species that the Mi’kmaq historically fished. 

While the Marshall decision and the guaranteed access it provided to First Nations initially posed a threat to Risley, it appears from the deals and partnerships he’s brokered over the years, that it’s also something he’s managed quite handily to capitalize on.

However, any large investors interested in taking over Clearwater with its offshore licences, may wish to listen carefully to what Berndt Christmas of Membertou First Nation has to say about Aboriginal rights. Speaking on the CBC radio show Maritime Connection on October 25, 2020, Christmas said he would argue that, “there is a legal challenge that has to be dealt with, and that’s the whole notion of Aboriginal title.” He continued:

Aboriginal title includes waters, and if Canada, which it has [done], claims a 200-mile economic zone, well in our case, based on Treaties, Mi’kmaw title goes out 200 miles. So this notion of commercial fishermen saying we should just stick to our back yard, well no, that’s not the question. The question is how are you going to deal with the fact that those are our waters? And the next argument could be, and the products coming out of those waters are ours … Why are we being told to go into LFA 22, 34, or whatever …when we have the mobility rights to go into any of these zones based on the legal precedence that have been set by Treaty rights that the Mi’kmaq have? 

For the time being, however, those questions have yet to be dealt with, and First Nations are signing agreements with Clearwater for fishery licences. 

A few people have suggested to the Examiner that such arrangements with Clearwater, given that it is up for sale, could open a back door for foreign money and investors who want to access the fishery, something they can’t do themselves.

Rick Williams, for example, said that he sees a “risk here that First Nations are being used as tools or being taken advantage of to allow corporate entities, foreign investors and so on, to get control of Canadian fishing resources that they otherwise shouldn’t be able to do.”   

In his 2019 book on the future of the fishery, Williams writes that he looks at the fishery “primarily as an economic sector supporting jobs and incomes in coastal communities and contributing to economic development in disadvantaged regions and Indigenous populations.” 

He says when he first began working with fish harvesters in the mid-1970s, “the crisis that was bringing new harvester organizations to life across the entire Atlantic region was the rapacious exploitation of groundfish stocks by foreign dragger fleets” before the 200-mile limit came into effect, after which, “federal and provincial governments invested heavily to build up a Canadian offshore industry on the same industrial template.” He writes:

Inshore harvesters were mobilizing to defend their own economic interests, but also to challenge government policies centred on big companies and industrial fleets pumping low value products into global commodity markets.

…

We are today at a point in that evolution where the rebuilding and enhanced conservation of fish stocks would not be possible without the leadership, organizational capacities, and knowledge resources of harvester organizations and their leaders. While still learning and still struggling with conflicting interests—and sometimes with each other—fish harvesters today serve as the primary stewards of fish stocks and habitats as much as they are users of those resources.

Williams has respect for the “little guys” in the inshore fisheries, writing:

For me, fish harvesters were the little guys fighting for their livelihoods and communities, but also to protect fish stocks from a large-scale corporate-industrial model that was fundamentally incompatible with a wild animal harvest. Although the fishery and the people in it have changed dramatically, I see fish harvesters still fighting that same battle today.

Frank, the lifelong lobster fisher and former mate on one of Clearwater’s lobster boats, worries that the current uncertainty about the governance of the inshore lobster fishery may lead ultimately to further erosion of the independence of inshore fishers. He says that could mean that licences with trap numbers could be replaced by individual transferable quotas, as happened to the longliners in the ground fishery decades ago, opening the door to corporate consolidation and control of the fishery by what he calls “big crooked companies.” 

Said Frank: 

The government don’t care. They’re going to get their pension after they serve their time and they don’t care what happens to them guys. Not one bit. They didn’t care back then. They don’t care now.

I think it’s either going to be a free-for-all and everybody’s just going to come and go until there’s nothing left, or there’s going to be quota. The natives will have so much quota and the commercials will have so much quota. And Clearwater has their quota. Maybe this is all happening because Clearwater intends on selling out to Premium Brand, I don’t know. But there’s something awful fishy going on here.