Clearwater throws cold water on surf clam rival's prospects in 2018

Halifax-based Clearwater Seafoods spoke for the first time Tuesday since losing a valuable arctic surf clam quota and raised doubts about whether a new Indigenous rival will be able to live up to its promise to harvest in 2018.

The company suggested the licence for about 9,600 tonnes of the shellfish, worth an estimated $29 million, is on hold while the award is challenged in Federal Court.

"Our understanding is with a judicial review process, the Department [of Fisheries and Oceans] would pause in issuing a licence until that process plays itself out," vice-president Christine Penney said in a conference call with reporters after the company released first-quarter financial results.

CBC News received this response from DFO to Clearwater's claim the new surf clam licence is on hold.

"While we cannot comment on the matter before the court, the department intends to proceed with the decision," spokesperson Vance Chow said in a brief email statement.

Act of Indigenous reconciliation

The court challenge was launched not by Clearwater, but by another of the losing bidders in Ottawa's regionwide competition for a new Indigenous-led entrant in the fishery.

In February, Ottawa took 25 per cent of Clearwater's long-held surf clam monopoly and awarded it to the Five Nations Clam Corporation, a consortium of First Nations and its industry partner, Premium Seafoods of Arichat, N.S.

The winning proposal committed to harvest in 2018, although it needed authorization from federal Fisheries Minister Dominic LeBlanc to use a foreign vessel, which it has not yet secured.

"Regarding the boat, Five Nations and Premium are working diligently to take all steps necessary to implement the plan as detailed in our winning expression of interest," read a joint statement from Premium Seafoods president Edgar Samson and Five Nations president Aaron Sock, who is also Chief of the Elsipogtog First Nation.

Second guessing

"Whether the 25 per cent will be fished in 2018 remains unknown to us," said Clearwater CEO Ian Smith Tuesday. "There are many questions being asked about the government's policy decision, process transparency and multiple calls for review."

The Miawpukek band in Newfoundland and Labrador applied to the court to quash the decision in March, arguing Five Nations should have been disqualified because it did not have its Indigenous partners in place when it was selected.

Conservative MP Todd Doherty has asked the federal ethics commissioner to investigate because the president of Premium Seafoods, Edgar Samson, is the brother of Nova Scotia Liberal MP Darrell Samson.

One of the Five Nations Indigenous partners is led by former Liberal MP Todd Russell.

Clearwater had partnered with Nova Scotia Mi'kmaq in an effort to retain a stake in the quota.

Downsizing in the wind

Clearwater insists it is still considering mounting a court challenge of its own into what it calls an expropriation without compensation.

Smith said the company will announce this summer how it will adjust its business to the permanent loss of 25 per cent of the arctic surf clam quota. It has held a monopoly since 1999.

"We are looking to all extent possible to minimize the impact on our employees and the disruption of people's lives but the reality is we also have a business to run," Smith said.

The company is looking at the future of its three-vessel clam fleet and shore-based operations, which include a processing plant in the town of Grand Bank, N.L., and facilities in Glace Bay, N.S.

"We are going to move quickly to finalize and communicate them."

Clearwater challenges Five Nations

Clearwater remains committed to Indigenous reconciliation and First Nations participation in the fishery, he said.

Prior to Ottawa's competition for a new entrant in the fishery, Clearwater founder John Risley secretly offered federal minister Dominic LeBlanc to give up two clam licences if DFO would ensure Clearwater would harvest, process and market the catch.

Smith characterized the offer as a "pathway" for First Nations entry into the fishery since one of Clearwater's licences would go to a First Nation.

On Tuesday, Smith challenged Five Nations to reach Clearwater's level, saying it took the company 20 years to develop the market.

"First of all, they have to figure out how to harvest it. Then they have to figure out how to process it and then market, sell and distribute it," he said.

"If they are in operation and producing a product that is competitive with ours and they are able to do that within a short period of time, I would say good on 'em, well done."