Crab fishermen's debts being recalled by province

Accusations were flying Tuesday in the legislature between provincial politicians over a decision by the PEI Lending Agency to call in over $17 million in loans to eight crab fishermen.

The loans are in arrears and have been for years. Over the past weekend, the fishermen were told they had until the end of June to bring their payments up-to-date.

Crab prices peaked in 2004-05, and the fishermen ended up paying top dollar for the licences.

The outstanding crab loans were made in 2005 and 2006 to eight fishermen by the former Conservative government. Last year the auditor general did a special report on the loans. He concluded there was little chance of recovering the money. He also said the loans had been approved by the previous Conservative government against the advice of the PEI Lending Agency.

The loans were an attempt to buy more crab quota for P.E.I. and expand crab processing, according to Opposition House Leader Jim Bagnall.

"I think the biggest thing here is, there was only eight fishermen on P.E.I. that had the fortitude to put everything they own up for grabs here to try to help the fishing industry in this province, and the processing industry," said Bagnall.

But quotas were cut when the recession hit, prices plummeted and the eight fishermen still owe more than $17 million.

"Unfortunately, I think they were given some bad information. There's a responsibility on the part of the borrower, as well as the lender to take a look at situations and to evaluate and do your due diligence. I'm not sure it was done on either side of the equation on these files and you can see the outcome," said Innovation Minister Allan Campbell. "It's not pretty."

The loans have also been criticized by Liberal MLA Charlie McGeoghegan, who called them a sweetheart political deal for to friends of the Progressive Conservative Party.

"They set up five or six guidelines, then they broke them all," said McGeoghegan.

"It started at $14 million, it's over $17 million now. There comes a point in time where you have to say, when is enough is enough?"

Fisheries Minister Neil LeClair agreed.

"We just can't let it go on forever," said LeClair. "We have to make decisions and as far as I'm concerned, back when these loans were given out, it was a bad decision."

If the fishermen aren't able to start making payments to the government by June 30, they may be forced to declare bankruptcy.