Taxpayers’ money well spent on aquaculture
One of the main reasons why the salmon farming industry in Canada is dominated by Norwegian companies is the reluctance of Canadian banks and other financial institutions to provide financing for the day-to-day operation of fish farms. As was the situation some 30 years ago, Canadian banks still by and large refuse to lend money to entrepreneurs or even established salmon farming companies unless the applicant can provide a watertight loan guarantee. Unlike terrestrial agriculture- where farmers can get a loan based on the value of their livestock- Canadian banks all but refuse to assign any value to fish swimming in net pens for loan security purposes.
One Canadian company that has managed to buck this trend is Cooke Aquaculture on Canada’s east cost- and a lot of the credit for its survival and expansion into international markets is no doubt due to the on-going support by local and federal governments. And as business Reporter for the Chronicle Herald Brett Bundale reports, in true Canadian fashion this support for the aquaculture industry by governments has its critics and detractors- even within provincial government circles;
ooke Aquaculture Inc. is defending its track record amid charges the company is a risky investment for Nova Scotia taxpayers. In a report released Wednesday, the province’s auditor general raised concerns about the financial assistance the provincial government provided businesses through the controversial Nova Scotia Jobs Fund. Jacques Lapointe said more than $500 million (~€ 355 million) in loans handed to companies, including Irving Shipbuilding Inc., Pacific West Commercial Corp. and Northern Pulp Nova Scotia Corp., were poorly managed and lacked adequate monitoring and accountability. Cooke Aquaculture received $25 million (~€ 17.75 million) in public funds last year in a combination of repayable and forgivable loans. Lapointe singled the aquaculture company out, saying its loan was a high risk one that didn’t have any security backing it.
But a Cooke Aquaculture spokeswoman said the business underwent a rigorous application process. “This is not some idle, fly-by-night plan that we put together,” Nell Halse said, noting the company has operations across Atlantic Canada, Maine, Chile and Spain. “It’s based on experience. It’s based on having delivered and that certainly factored into the government’s decision in Nova Scotia.” She said the company opened its books to government during the long and extensive application process. “There is no question that the officials and the minister of the day used extensive scrutiny over our proposal and that they certainly did their due diligence,” Halse said.
Lapointe also said the multimillion-dollar loan had a negligible net economic benefit on the province and the funds weren’t limited to the company’s Nova Scotia operations. But Halse said the $18 million (~€ 12.8 million) Cooke Aquaculture has accessed so far has all been spent in the province. She pointed to a recent hiring spree as an example. The company hired 30 workers in the Digby area and another 30 in Shelburne. The firm currently has 170 workers. Cooke Aquaculture is also planning an expansion of its feed mill in Truro and committed to building a hatchery in Digby. “We’re creating jobs in rural, coastal communities where they desperately need it,” Halse said. “There is a lot of economic activity and spinoffs as a result.”
Other companies that received taxpayer money through the Jobs Fund also stepped forward to defend their work in the province.
