I never professed to be a business person, Mr. Speaker, have not got a business clue in my body, never paid a payroll in my life, but even my elementary sense of business tells me there was something right about that whole process, Mr. Speaker.
Fisheries minister Tom Rideout, House of Assembly, May 1, 2007.
Deputy premier and fisheries minister Tom Rideout confirmed in the House of Assembly Tuesday that the provincial government is only interested in gaining control of Fishery Products International's groundfish quotas.The lucrative quotas for shrimp and crab will remain with the company that purchases FPI's assets, likely Ocean Choice and High Liner.
Rideout explained the rationale in a news release:
"The top priority for our government is ensuring that maximum benefits are received," said Minister Rideout. "Unlike shrimp and scallop, which are primarily offshore factory freezer operations, a substantial component of the groundfish sector involves significant onshore employment through processing. Under current DFO policy, any Enterprise Allocation licence holder is not obligated to land their catch in the province and therefore is free to freeze at sea and send this product to other countries for processing. This is a tremendous threat to our province, and our ownership of these quotas will ensure that Newfoundland and Labrador continues to enjoy these benefits over the long-term."The groundfish quotas produce the largest number of jobs in local processing plants, hence government's interest in them, even though groundfish is considerably less lucrative than the other quotas.
As Bond Papers noted earlier in the FPI debacle, the province is looking to ensure the maximum level of employment in processing plants, irrespective of the long-term financial viability of the operations in an industry that is already oversupplied with plants and plant workers. While Bond may have been more than a bit off in some of the other projections, in the long run that much was right: the groundfish quotas are being retained to make sure that the maximum number of people have sufficient work to qualify for federal financial assistance. That's basically the philosophy the provincial government followed the last time Rideout was fisheries minister and as much as there is evidence of the need for significant change in the fishery, Rideout's plan is to keep things much like they were.
In the legislature, Rideout admitted that he had never run a business and professed to have no specific knowledge of business. Perhaps that explains Rideout's efforts to prevent FPI from exporting undersized fish and why he is so anxious for the provincial government to retain quotas for groundfish, a portion of which simply cannot be processed economically in the province.
There's no small measure of irony - or is it hypocrisy - that for all the talking of retaining what is rightfully "ours" and for all the Premier's interest in FPI's American marketing arm, that portion of the company's portfolio will be sold off to a Nova Scotia company. For all the time Danny Williams and others spent accusing the current FPI shareholders and directors of plotting the destruction of the company, in the end, it was a combination of factors, including provincial government policy that led to the dismantling of FPI and exactly the situation Williams seemed to oppose.
On top of that, consider that changes to the FPI Act made last actually greased the skids. Most observers missed it entirely, and fish minister Rideout continues to spread the myth that the legislature must approve and breakup of FPI. Yet, as Rideout well knows, the power to approve any sale of FPI and its assets was transferred out of the hands of the individual legislators and handed to cabinet.
The deal is already done. And if cabinet hasn't blessed it yet, the crowd in charge are guaranteed to approve the sale at the earliest opportunity. That's why FPI share prices have jumped lately: there's a sign that the tortures are over and the valuable bits and pieces will be sold off.
The debate in the legislature on Bill Number One, already given first reading and so far unseen by the House, will do nothing except set up a new regime for a new company called FPI as already approved by cabinet. If cabinet didn't know the details of the arrangement, they would not have introduced the new FPI bill before any other piece of legislation in the new session.
The end result of this whole FPI mess is actually quite simple to see. A once-proud company has been rent. The marketing arm, which supported the province's fishing industry as whole, has now gone off to Nova Scotia hands. A local company has picked up some of the other assets - the lucrative ones - and the provincial government is stuck holding the poorest piece of the whole pie.
But they have the one which, to an old-fashioned politico like Rideout with nary a business clue, gives them the most political brownie points. What the provincial government actually gets of course, is a prolonged headache that comes from standing in the way of the shifts and changes needed in the fishing industry. All it took was two and a half years of agony for the ordinary workers at FPI, a considerable loss for those who, like Sanford Limited had invested in FPI planning to have it make money, and ultimately the solution it seemed no one in the province had wanted. Later this month, we will be without Fishery Products International, except in skeleton, and with its most lucrative component - the one that produced value for the industry as a whole - controlled by outside interests.
It would seem that Rideout and his supporters have a political clue comparable to his business one.
