Question Period Note: Clearwater Transaction

• On November 9, 2020, Clearwater announced the conclusion of their strategic review and the sale of all shares of their company.
• Seven Atlantic Mi’kmaq First Nations intend to purchase a 50 per cent share of Clearwater. The remaining 50 per cent share will be purchased by Premium Brands, a private company based in British Columbia.
• The arrangement is intended to involve all of Clearwater’s existing Canadian fishing licences to be re-issued to FNC Quota Limited Partnership, a corporation that is 100 per cent owned by the First Nations Coalition, making them the new licence holders.
• As the Minister of Fisheries, Oceans and the Canadian Coast Guard, my role in this transaction is to carefully review all requests for licence re-issuance to asses whether those requests adhere to the criteria set out in Fisheries and Oceans Canada’s licensing policies, as well as the Integrated Fisheries Management Plans, and the administrative guidelines that govern the affected fisheries.
• In making licensing decisions, I take a variety of factors into consideration as per section 2.5 of the Fisheries Act, including conservation, social, economic and cultural factors, and the preservation or promotion of the independence of licence holders in the Atlantic and Quebec commercial inshore fisheries.

DFO’s Role in the Sale of Commercial Fishing Enterprises

• In promoting a stable and predictable operating environment for both First Nation and non-First Nation fishing enterprises, my department continues to support the voluntary relinquishment of existing commercial licences and quota, through willing-buyer, willing-seller arrangements.
• The Government of Canada supports collaboration amongst First Nations and non-Indigenous harvesters and efforts to create partnerships. Working together towards mutually beneficial outcomes is the practice of reconciliation.
• As Minister of Fisheries, Oceans and the Canadian Coast Guard, my role is to set out considerations to be taken into account in determining whether to reissue a licence to an eligible new or existing licence holder as a replacement for an existing licence being relinquished.

If Pressed on the Marshall Decision, moderate livelihood and/or treaty rights:

• The Government of Canada remains committed to implementing the treaty right to fish in pursuit of a moderate livelihood.
• Canada stands ready to work with First Nations to explore and discuss how to implement this right, while supporting a safe and orderly fishery.

• On November 9th, 2020, Clearwater Seafoods Incorporated (“Clearwater”), announced publicly that it had reached a definitive arrangement agreement for the purchase of Clearwater by Premium Brands Holdings Corporation (“Premium Brands”), and a coalition of Mi’kmaq First Nations (the “Mi’kmaq Coalition”).
• Premium Brands Holdings Corporation and the Mi’kmaq Coalition formed a new company, 12385104 Canada Inc., owned 50 per cent by each party, for the purpose of purchasing all of the issued and outstanding common shares of Clearwater and the units issued under various equity compensation plans (“the transaction”). The agreement included a transaction price of $8.25 per share, with an overall value of approximately $1.0 billion, including debt. The Mi'kmaq coalition has agreed to contribute $250 million for its share of the purchase, which will be paid for through a 30-year loan from the First Nations Finance Authority.
• After reviewing the transaction, on January 6th, 2021 the Competition Bureau of Canada issued a “no-action letter”, indicating their clearance of proceeding with the transaction. On January 7th, Clearwater announced that its shareholders had approved the arrangement. As a final step in approving the sale of the shares, on January 8th, the Nova Scotia Supreme Court approved the sale.
• The members of the Mi’kmaq Coalition have established FNC Quota Limited Partnership for the purpose of holding the licences and associated access to be acquired from Clearwater as part of the sale. FNC Quota Limited Partnership is owned by six Mi’kmaw communities in Nova Scotia and one in Newfoundland and Labrador: Membertou First Nation, Paq’tnkek First Nation, Pictou Landing First Nation, Potlotek First Nation, Sipekne’katik First Nation, We’koqma’q First Nation and Miawpukek First Nation.
• Clearwater’s current licence holdings are primarily in offshore fisheries, but they do hold access in the inshore as well.
• Clearwater Seafoods Limited Partnership would continue to exist and would operate the licences under the corporate structure of the new company as a distinct entity thereby ensuring continuity for its brand, employees and community involvement. Operationally, there would be no changes in the harvesting, processing, sales, employees etc. but it would no longer be a publicly traded company on the stock exchange.
• This planned changed will take effect if ministerial authorization is provided for the re-issuance of the licences from Clearwater to this new company. The licences will continue to be held by Clearwater until the ministerial approval is granted.
• An announcement confirming the sale of the Clearwater’s shares is expected on January 25, 2021.
• No formal licence re-issuance request has been received to date.
• Although the current legislation provides that licences are not ‘‘transferable’’, as Minister of Fisheries, Oceans and the Canadiane Coast Guard, in your absolute discretion provided under Section 7 of the Fisheries Act, you may, for administrative efficiency, set out considerations to be taken into account in determining whether to reissue a licence to an eligible new or existing licence holder as a replacement for an existing licence being relinquished. You may deny a request for licence re-issuance based on relevant considerations.

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