Nova Scotia has made sweeping changes to loan regulations for the fishing industry.
The changes including changing loan limits from CAD 1 million (USD 750,000, EUR 660,000) to CAD 5 million (USD 3.8 million, EUR 3.3 million); a reduction in loan approval wait times; a percentage point decrease in loan interest rates; amortization terms of loans expanded from 20 to 30 years; reduced service fees; and an expansion of what qualifies for loan financing.
The announcement was made Thursday, 6 December in Yarmouth by local Member of the Legislative Assembly (MLA) Zack Churchill.
“We now will have options for long-term loans. The reduced interest rates on term loans will be dropped by about a percentage point, on average, which has the potential to save hundreds of thousands of dollars for people who take loans out to do this,” Churchill said. “We're increasing to a 30-year limit, from a 20-year limit, which will make the loans more affordable. And we’re reducing service fees, particularly on the license alone, so this can help achieve a savings of approximately CAD 4,000 [USD 3,000, EUR 2,600], on average, for those folks who take advantage of this.”
The new loan regulations allow for expanded qualifying activities to include seafood processing, boat-building, and aquaculture operations.
The goal is to expand options and eliminate financial barriers to entry into the fishing sector for younger fishermen and assist with improving fishing enterprises, according to Denny Morrow, chair of the Fisheries and Aquaculture Loan Board (FALB).
“A lot of the other lenders and the banks so often shy away from young fishermen because they don’t have the history in the industry and they don’t have the collateral and they won’t fund fishermen,” Morrow said. “Over the coming months, we will be developing some policies to implement these regulations for the processing sector, for boat builders and also for aquaculture businesses in the province. But the real thrust of this is to provide better financing, better products, faster turn-around times, [and] better service to the fishermen who are the core clients for the loan board.”
Typically, the FALB lends between CAD 35 million to 40 million (USD 26.3 million to 30.1 million, EUR 23.1 million to 26.4 million) per year. This announcement will make it likely those numbers increase much higher in the coming year, Geoff Irvine, executive director of The Lobster Council of Canada said.
“It seems that this is all about making it easier for younger harvesters to enter the business, which is good news in my opinion,” he said. “All in all, a good story as far as I am concerned.”
The fishery sector is worth CAD 2 billion (USD 1.5 billion, EUR 1.3 billion) annually to Nova Scotia. And it plays a vital function in sustaining the region’s economy during the winter, when tourism is down.
Churchill credited a local fisherman and member of the Coldwater Lobster Association for being the impetus for these changes, which he said will allow older fishermen to age out of the industrywhile making it possible for the next generation to enter it and maintain the sector’s viability.
