Fisherman told to either drop DFO complaint of controlling agreement or risk losing home
An inshore fisherman from La Scie whose commercial fishing enterprise is being seized by a receiver for the bank has been given until this Thursday, March 7th, to either retract a recent declaration to DFO that he was in an illegal controlling agreement, or risk losing his home.“No fisherman should be put in that impossible position,” says inshore fisheries advocate Ryan Cleary. “It’s the latest example of how the entire system works against the inshore fleet.”
Jimmy Lee Foss purchased the Ocean Surfer II andsuite of commercial licences (including snow crab and shrimp) in April 2022 with a $3.8-million loan from the CIBC. According to Foss, the deal was arranged and co-signed by local fish processor Robin Quinlan of Quinlan Brothers Ltd.
However, Foss found himself in financial trouble by 2023 with the dramatic drop in the price of snow crab, and a receiver, BDO Canada Ltd., was appointed in mid-January of this year. At about the same time, Foss declared to the federal Department of Fisheries and Oceans (DFO) that he was in a controlling agreement.
Controlling agreements are illegal, and occur when a corporation (usually a processing company) loans money to a fisherman to purchase an enterprise, licences, or gear, and, through the agreement, controls the catch.
Controlling agreements undermine the independence of inshore enterprise owners, and often prevent them from getting a fair price for their fish.
DFO’s Conservation and Protection division launched an investigation into Foss’s allegations this past January, and recently executed a warrant to seize his cellphone.
According to the warrant, DFO is after all digital communications between Foss, Quinlan, and representatives of Quinlan Brothers Ltd. between September 2021 and February 2024.
Meantime, a spokesman for BDO Canada, the receiver appointed in Foss’s case, wrote him on Feb. 29th to request that he either retract his declaration that he was in a controlling agreement, or sign over the commercial fishing licences that are still in his name.
The spokesman gave Foss five days to respond.
“If a positive response is not received by the requested date (Thursday, March 7th), the lender (CIBC) retains its full rights to enforce its security interest in the fishing licences, which includes but is not limited to, the personal guarantee,” read the letter.
That personal guarantee includes Foss’ family home in La Scie.
Cleary is calling on DFO to intervene and clarify whether Foss must sign over his commercial licences while an investigation is ongoing.
There are just over 3,000 licensed inshore fishing enterprises in Newfoundland and Labrador, and it’s believed a majority are tied to processors through financial agreements that include the right-of-first refusal on all landings.
In December, the House of Commons Standing Committee on Fisheries and Oceans released a report on corporate concentration and foreign ownership into fishing licences and quota — recommending the creation of an independent fishery financing agency (similar to Farm Credit Canada) within five years.
The report recommended the financing agency have “sufficient risk tolerance to finance and mentor new entrants to acquire licenses and quota and to refinance existing licence holders to become independent of illegal trust and supply agreements with fish processors.”
The Conservatives on the committee went a step further to advise DFO to begin work “immediately” with the provinces on the creation of a new fishery financing agency “from BC to NL.”
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