Ottawa to invest in 'fisheries innovation' for Atlantic Canada following EU trade deal

With Canada's trade deal with the European Union on track to come into force provisionally within weeks, the federal government is set to announce anew fisheries innovation fund.

But don't portray this new money as a way to compensate Atlantic Canada, Fisheries Minister Dominic LeBlanc told CBC News last week.

"I didn't say compensation. That was your word," LeBlancsaid after an announcement in Vancouver last week.

"What I said is that we're prepared to work with provinces to look for a way to make our fishing industry the most innovative, productive, sustainable and globally competitive that we can."

Compensation was what Newfoundland and Labrador was looking for in the face of the Comprehensive Economic and Trade Agreement (CETA), which will preventCanadian provinces from placingany export restrictions on raw fish.

Currently, minimum local processing requirementsare in placeto protect jobs, particularly in more remote fishing communities.

WhenCETAtakes effect, export restrictionsmust end except forNewfoundland and Labrador's processing requirements, which will be phased out over three years.

Last week's ratification by the European Parliament puts CETA on track to kick in as early as April 1, assuming Canada's federal and provincial governments complete the legal and regulatory changes required to comply with the new deal.

Harper failed to support processors: Trudeau

The previous federal Conservative government and formerpremiers fromNewfoundland and Labrador were in conflictover CETA compensation.

As the deal took shape in2013, a $400-million fisheries fund was in play.

But the federal government didn't want itsinvestmentto become a slush fundfor the industry federal money was contingent on"demonstrated losses."

The province refused to cede its jurisdiction over minimum processing requirements and went on to accuse then prime minister Stephen Harper of reneging on his compensation offer.

At the time, then third party leader Justin Trudeau wrote in support of then premier Paul Davis, saying Harper's government "failed to adequately address the concerns of Canadian sectors that may be negatively impacted by CETA, including Newfoundland and Labrador's fish processors."

For a time, the spat appeared to threaten CETA'simplementation.

If the province doesn't drop its local processing requirements,the federal government could be vulnerable to being sued for not holding up its end of the treaty.

Since the election of Trudeau's government in the fall of 2015, both sides havesaid only thattalks are underway towardfinding a solution.

But what form would that solution take?

Similar to dairy strategy

"This deal was never finalized," Newfoundland and Labrador Premier Dwight Ball said on a conference call as he hosted fellowAtlantic premiers in talks in Corner Brook Monday. "If it was finalized theywould have the cheque by now. It didn't happen."

LeBlanc'sportrayal of what's on the tableechoes the Liberal government'sofferto the dairy sectorlast November: help to compete, but not compensation, per se.

• $350Mdairy programs to help farmers, processors compete underCanada-EUtrade deal

Harper's governmentannounceda multibillion-dollar compensation package for what the supply-managed agriculture sectors, including dairy, might lose underCETAand the Trans-Pacific Partnership trade agreement. Some elementsalso werecontingent on demonstrated losses.

The Liberal dairy programs were announced beforeCETA'sratification vote. But even still, it's unclear whether thisfunding arrivedfast enough to improvethesector's competitiveness before new European cheese imports hit the shelves.

Meanwhile, the fisheries package isn't quite ready yet.

'Massive economic opportunity'

LeBlanc said last week he's been "encouraged" by his recent conversations with Atlantic provinces affected by the lifting of export restrictions.

"They understand that our government is serious about supporting the fishing industry and ensuring that this historic agreement can benefit this sector of the economy in an unprecedented way," hesaid.

CETA will immediately lower tariffs on Canadian fish and seafood to zero.But the simultaneous loss of local processing jobs would offsetgains.

"We're convinced that this agreement offers a massive economic opportunity for the fish and seafood industry across the country," LeBlancsaid.

Ball agrees "tremendous benefits"are possible fromCETA's tariff removals. But he still wants to finish the conversation about compensation. Thethree-year phase-out for the local processing requirementsbuys breathing room.

"We're going to take the time that's required to have the discussion, take the discussions to the fullest extent to see what's available to us," he said.

LeBlanc said an announcement with the precise details of the new innovation funding was coming soon:"It probably won't be in the next couple or few weeks, but it won't be two to threemonths away."

It's possible a federal budgetexpected in March could provide more details.

Investments in support of innovation and growth across various sectors of Canada's economy are expected to be a recurring theme inthe 2017 budget.