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The disagreement is rooted in the terms of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). As part of the negotiations, the Newfoundland government agreed to phase out minimum processing requirements, a policy that allows the province to set the minimum amount of processing that must occur on fish products before they can be exported.

The policy is protectionist and shields inefficiency, but it has guaranteed jobs in areas of rural Newfoundland and the proposal that it be eliminated has been hugely controversial.

The policy is protectionist and shields inefficiency, but it has guaranteed jobs in areas of rural Newfoundland

The provincial government calculated the opening of European markets to Canadian shrimp and cod, with the gradual elimination of 20% tariff barriers on shrimp and 7.5% on cod, would take the sting from ending minimum processing requirements (MPR).

As part of the deal, the government in St. John’s negotiated an agreement with Ottawa to set up a $400 million Fisheries Fund, cost-shared 70/30. That agreement was reached in June 2013 and it seems at that time, everyone believed that this was a “transition fund,” aimed at helping the industry adjust to new conditions, as well as worker displacement from the end of MPR.

Certainly, that seems to have been the impression of Bill Hawkins, chief of staff to Trade Minister Ed Fast (and now the prime minister’s principal secretary), in an email he wrote to the Newfoundland government on Oct. 23, 2013. In the email, he talked about a “transitional program of up to a combined total of $400 million that would address fish and seafood industry development and renewal, as well as workers whose jobs are displaced in future.”