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A model of a giant lobster marks the headquarters of Clearwater Fine Foods Inc. in Halifax on Oct. 19, 2005.ANDREW VAUGHAN/The Canadian Press

A historic business deal that will make a handful of east coast Mi’kmaq First Nations big players in the Atlantic Canada fishery also risks further inflaming deep divisions in the region’s lobster industry.

The offer to buy Bedford, N.S.-based seafood giant Clearwater Seafoods Inc. for $1-billion by B.C.'s Premium Brands Holdings Corp. and a group of seven Mi’kmaq First Nations is the largest potential investment in the seafood industry by an Indigenous group in Canada.

The Mi’kmaq bands would become co-owner of North America’s largest shellfish supplier – and have exclusive access to its coveted offshore fishing grounds in Nova Scotia, which they say will bring more jobs and prosperity to their communities.

Membertou First Nation Chief Terry Paul, who orchestrated the deal on behalf of the Mi’kmaq buyers, said the acquisition would create an enduring legacy for Mi’kmaq communities.

Premium Brands, coalition of Mi’kmaq First Nations acquire Clearwater Seafoods

“The Mi’kmaq will be fishing in the waters until the rest of time,” he said Tuesday. “Acquiring Clearwater will have lasting positive impacts on the economics of our Mi’kmaq communities.”

But commercial fishermen in Nova Scotia are vocal in their opposition. The union that represents non-Indigenous fishermen in the Bay of Fundy says the seafood company, which it blames for deflating lobster prices in the region, is being sold to Mi’kmaq groups at a time of severe tension over Indigenous fishing outside of the federally regulated season.

Those tensions over the region’s “moderate livelihood” fishery boiled over last month when non-Indigenous fishermen destroyed the catch of Mi’kmaq fishermen and burned a lobster pound to the ground. The Mi’kmaq hold a treaty right to earn a “moderate livelihood” under a Supreme Court ruling in 1999, but commercial fishermen say there should be limitations on those rights.

The Clearwater deal was partly financed by the First Nations Finance Authority, a not-for-profit organization created by the federal government and run by Indigenous groups to improve access to capital for First Nations communities. The Mi’kmaq coalition will put up $250-million, financed through a 30-year loan.

The First Nations group and Premium Foods will acquire Clearwater for $8.25 a share in cash, which equates to a market value purchase price of $537-million.

The acquisition will worsen tensions between Indigenous and non-Indigenous fishermen, and alienate Mi’kmaq bands excluded from the deal, said Colin Sproul, president of the Bay of Fundy Inshore Fishermen’s Association union.

“There’s nobody more hated or viewed as an enemy of lobster fishermen than Clearwater Seafoods, and that’s because of the price controls they’ve exercised over the industry,” he said. “The government has just facilitated a deal … that is going to align select First Nations with someone who’s despised by inshore fishermen, at a time of historic divisions between our groups. I think it’s all pretty irresponsible.”

Jane Deeks, a spokesperson for federal fisheries minister Bernadette Jordan, said the federal government did not play a role in facilitating the deal with Clearwater. That was a business transaction between the seafood company and its future owners, she said.

Dan Paul, a Mi’kmaq historian in Halifax, said the Clearwater deal signals that the region’s Indigenous people are making progress in their long march toward economic independence.

“What happens over a long period of time, if you educate people ... you begin to open more doors, and opportunities appear,” he said. “The Mi’kmaq lost their livelihood when the Europeans invaded, and now they’re on the cusp of reclaiming it.”

Clearwater, Premium Brands and the Mi’kmaq were in talks for several months before the deal was struck. In September, Clearwater sold two of its offshore lobster licences to Chief Paul’s First Nation for $25-million.

Chief Paul said the Clearwater purchase is “strictly a commercial transaction” that does not affect efforts to establish a moderate livelihood fishery. But he also left the door open to the possibility that Clearwater could purchase lobster from the moderate livelihood fishery – a key issue, since other seafood buyers have blacklisted Mi’kmaq-caught lobster out of loyalty to non-Indigenous commercial fishermen.

Under the proposed deal, the Mi’kmaq bands would have exclusive access to the rest of Clearwater’s offshore lobster licences in lobster fishing area (LFA) 41, a massive, deep-water fishing zone that stretches from the Canada-U.S. boundary off southern Nova Scotia to the Laurentian Channel between Cape Breton and Newfoundland.

It’s the only lobster fishing area in Canada that operates year-round, has a quota and has no trap limit. Its annual total allowable catch is 720 tonnes, or nearly 1.6 million pounds of lobster.

“It’s the pearl of all fisheries,” said Mr. Sproul. “LFA 41 is larger than every other LFA in the country, combined. There will be expansions in that quota in the future. It will be the gift that keeps on giving.”

Commercial fishermen are opposed to Clearwater’s monopoly in the offshore fishery, he said. It holds all the licences for the deep-water fishing area, which starts 80 kilometres from shore, and has special exemptions that no other company has, Mr. Sproul said.

His association had made a proposal last summer that Clearwater’s eight licences should be divided equitably among all of Nova Scotia’s Mi’kmaq bands under the moderate livelihood fishery. Instead, this deal picks “winners and losers” among Mi’kmaq communities, he said, and hands over exclusive access for an important fishing ground to a conglomerate.

Richmond, B.C.-based Premium Brands, which controls more than 40 brands of meats and seafood, also supplies The Keg and Boston Pizza restaurant chains.

“This is an attempt to Indigenize something that is not lawful. They’re transferring Canada’s offshore resources to a multinational conglomerate," Mr. Sproul said.

With a report from The Canadian Press

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