Actions and Commitments

Call to Action # 92: Business and Reconciliation (92)

Can reconciliation and profit coexist? Clearwater Seafood thinks so

April 2, 2024

On the East Coast, an Indigenous firm is charting a unique course that other First Nations are watching closely JASON KIRBY PHOTOGRAPHY BY DARREN CALABRESE THE GLOBE AND MAIL

Title photo

Frozen cockles and Arctic surf clams at Clearwater Seafoods’ Highland facility in Glace Bay, N.S.

In the gleaming-white Highland Fisheries plant in Glace Bay, on the northeastern tip of Cape Breton Island, Nova Scotia, tens of thousands of Arctic surf clams—each one steamed and flash frozen at sea, and looking every bit like rude, little red tongues—stream through a maze of conveyor belts and X-ray scanners. Individually photographed at lightning speed and graded by computer for their colour and shape, the rejects are robotically punted away with quick blasts of air from an array of nozzles, while the rest get sorted, packed and shipped mostly to Japan, China, Korea and Europe as part of a thriving clam export business worth about $130 million a year. That, as they say, is a lot of clams.

For Clearwater Seafoods, the company that owns the plant and has long had a monopoly on the fishery, the surf clam—popular as a sushi ingredient for its texture and sweet taste—has been critical to its growth into one of North America’s largest seafood companies. But the species also played a pivotal role in deciding the company’s fate.

Workers sort frozen cockles and Arctic surf clams at Clearwater Seafoods’ Highland facility in Glace Bay, N.S.

In 2017, the federal government announced it would strip Clearwater of one-quarter of its surf-clam quota in the name of reconciliation, promising to allot it instead to an Indigenous company. While the process was eventually scrapped—it turned out the winning bidder was only 25% Indigenous-owned, didn’t own a boat, but did have conflicted ties to then federal fisheries minister Dominic LeBlanc—about $400 million of Clearwater’s market value evaporated over five months. The debacle prompted Clearwater to sign a landmark 50-year surf-clam agreement with 14 First Nations in Nova Scotia and Newfoundland worth millions in revenue-sharing and other benefits. But it also served as a wake-up call to the company’s founders, including billionaire John Risley, that it was time for a change. “We knew a partnership with First Nations would be the only way to obtain the social licence we were never going to get as a consequence of being a corporate entity and a for-profit business,” says Risley, who put in motion the sale of Clearwater in 2020, the plan being to put First Nations communities at the helm.

It’s now been a little over three years since seven Mi’kmaq bands from Atlantic Canada joined with Richmond, B.C.-based Premium Brands Holdings to do just that. The deal for Clearwater, worth $1 billion (including around $440 million in debt) was hailed as a transformative moment that reflected the growing economic clout of Canada’s First Nations. That the announcement in November 2020 came just weeks after Mi’kmaq fishermen faced protests and intimidation from non-Indigenous lobster fishermen as they asserted their rights to trap lobster out of season only served to drive home the importance of the deal. As the CBC comedy show This Hour has 22 Minutes offered as a punchline to its segment on the purchase: “If you can’t beat ‘em, buy ‘em.”

Since then, the general public’s gaze has drifted away from Clearwater. Yet the company, and the unique partnership steering the ship, is being closely watched by Indigenous leaders, corporate bosses, bankers, lawyers and politicians across the country. It’s a real-world experiment for an emerging model of economic reconciliation, one in which First Nations that have long struggled under the weight of racism, indifference and paternalism are asserting their place in the Canadian economy to unlock prosperity on their terms.

Even before the Clearwater purchase, the Membertou First Nation, which spearheaded the negotiations on behalf of the Mi’kmaq communities, was a trailblazer in private-sector partnerships and business development. Evicted in 1916 from their reserve on the shores of Sydney Harbour and shunted uphill to a patch of swamp and rock, Membertou has transformed itself since the 1990s from a community struggling with poverty, high unemployment and a near-total reliance on government transfers into one of the most dynamic and successful First Nations communities in Canada.

Chief Terry Paul, chief and C.E.O. of Membertou First Nation, at his office in the Mi’kmaq community located on Unama’ki — Cape Breton Island, N.S.

The driving force behind that change, as well as the deal for Clearwater, was Membertou’s Chief Terry Paul, who, at 72, and speaking in a quiet voice, still marvels that his community is part owner of a global seafood company. “Having access to the offshore fishery for me was always a dream, but now it’s a reality,” he says during an interview in the Membertou Trade & Convention Centre, where the band’s corporate-development offices are based. “We have a learning curve like anyone else would with a new company, but our people have taken on Clearwater, and they’re beginning to feel that it’s their company.”

That company is undergoing significant change, with a three-pronged plan to emphasize its Indigenous ownership, boost procurement from Indigenous-owned businesses and suppliers, and increase the number of Indigenous employees at all levels. At the same time, Premium Brands—a $6.3-billion-a-year specialty-foods holding company that has grown rapidly by acquiring manufacturers and distributors across Canada and the U.S.—is revamping Clearwater’s business model. The goal is to expand into value-added packaged seafood products by embarking on an ambitious M&A strategy.

The partnership is a fascinating intersection of interests that could serve as a template for other future deals: a business-minded First Nation that emphasizes its seven-generations approach to stewardship, and a public company that reports to shareholders on a quarterly basis but talks frequently about the importance of long-term thinking. And it’s likely we’ll see more such transactions follow in its wake.

“I think Clearwater will be regarded as one of the most significant deals in Canadian history because it’s changed the conversation and put the whole region on a very different trajectory,” says Ken Coates, chair of Yukon University’s Indigenous governance program. “First Nations have said they want to get back into the economy in a different way, and what they are doing is systematically buying back Canada.”

Corey Woodrow, a vessel manager with Clearwater Seafoods, walks past one of the company’s clam-fishing vessels while docked in Mulgrave, N.S. on Feb. 1, 2024.

It takes less than three minutes to drive up the hill from the shores of Sydney Harbour, the original grounds of the Membertou First Nation (then called the Kings Road Reserve) to the community’s home today. There’s little to indicate you’ve crossed from the town of Sydney onto reserve lands, save for a board announcing “Membertou welcomes the world”—that, and the stop signs all say Naqa’si. Modern bungalows dot the roads, and people gather at the bowling alley or sip coffee at the Tim Hortons.

In the early 1970s, when Chief Terry Paul was in his early 20s, it was an urban reserve blighted by poverty and devoid of opportunity. He’d watched his friend Donald Marshall Jr. get charged with and convicted of a murder he didn’t commit. (Marshall would spend 11 years in prison before being exonerated in 1990.) In search of a better life, Paul headed south to Boston, where he found work at what’s now called the North American Indian Center, a non-profit that provided a crash course in governance, finance and self-determination. He brought what he’d learned home to Membertou and began to implement the core tenets in the mid-1980s, after he was elected chief for the first time. “What I learned in Boston wasn’t here,” says Paul. “The importance of having a proper administrative structure, budgets, meetings—all the simple things you need to have in place.”

With an economic development team on board, Membertou signed business, training and employment deals in the early 2000s with a host of companies, including with what was then SNC-Lavalin (for environmental remediation work around the Sydney Tar Ponds Project), Grant Thornton (a business alliance that continues today) and Clearwater itself (for Membertou fishermen to sell all their snow crab to the Glace Bay plant and secure jobs there).

Meanwhile, spurred by Paul’s old friend Marshall—who won a major decision at the Supreme Court of Canada that reaffirmed the right of certain First Nations members to fish, hunt and gather in pursuit of a moderate livelihood—Membertou developed a $10-million-a-year commercial fishery. It also expanded into gaming and commercial real estate, developing retail, office space, a hotel and a sports complex on land it acquired off-reserve. “I don’t think there’s a year that we haven’t bought a parcel of land,” says Paul.

Membertou went from being a financial basket case in the 1990s—it suffered under a $1-million deficit on a budget of $4 million, not to mention a nearly complete reliance on transfers from Ottawa—to having annual revenue of $85 million in 2023 and an accumulated surplus of the same amount. Poverty rates among its 1,700 people have plunged, and the high school graduation rate has climbed to 90% from about 30%. The band is pushing ahead with a number of projects, including Seventh Exchange, a 180-acre development on part of the 1,250 acres it owns near the reserve. It’s also working with a company called EverWind Fuels to develop two proposed wind farms intended to power a hydrogen plant in Nova Scotia. Perhaps its most symbolic deal to date, however, came back in 2015, when the band acquired a medical arts building on Sydney’s Kings Road—the very site the community had been forced from nearly a century earlier.

It’s all helped make the community the third-largest employer in the Cape Breton Regional Municipality and the third-largest taxpayer—”soon to be second,” says Paul.

On a typical day, the Clearwater facility sends up to 20,000 pounds of crustacean out the door, much of it bound for Asia.

Key to Membertou’s success over the past decade, including the Clearwater purchase, has been a revolution in First Nations finance, in particular the growth of the First Nations Finance Authority (FNFA). Modelled after the B.C. Municipal Finance Authority, it’s a not-for-profit authority, governed by an elected group of chiefs and councillors, that taps global capital markets for financing collectively on behalf of its First Nations members. And because the debentures it sells to global investors like pension funds, asset managers and sovereign wealth funds are backed by the pledged revenues streams of its members, as well as a debt reserve fund and other safeguards, they’re regarded as highly sound. That allows the FNFA to extend long-term loans below the prime lending rate—far cheaper than a conventional bank loan.

In 2012, Membertou was the first community to pass the certification process needed to borrow from the FNFA, tapping the agency for a $21-million, 30-year loan. Part of the money was used to refinance more expensive existing debt, saving it more than $140,000 a month in servicing costs, but also to finance the development of an interchange connecting Membertou directly to nearby Highway 125. Prior to that, Membertou had to rely mostly on temporary lines of credit to fund infrastructure projects, and it was rare to find a bank willing to extend even a five-year loan on a $10-million building, says Mike McIntyre, Membertou’s CFO.

By the end of 2023, the FNFA had lent $2 billion to more than 80 First Nations for water treatment plants, housing, schools, roads and other infrastructure, but also property development, wind farms, resource licences and equity investments. And it was a key part of the Clearwater buyout, which would be Membertou’s biggest deal yet—and possibly a game-changing example for First Nations nationwide.

“This model allows for economic participation in a way that hadn’t been possible before,” says Harold Calla, executive chair of the First Nations Financial Management Board, which certifies band finances and reporting standards before they can qualify for FNFA loans. “Clearwater was a $1-billion transaction that shows First Nations communities are capable of participating at that level.”

John MacInnis reaches for a crate housing lobsters in the reservoir at the Clearwater Seafoods packing facility in Halifax.
A pallet of freshly packaged lobster at the Clearwater Seafoods packing facility in Halifax.
Cooked lobster in a display case at the Clearwater Seafoods retail store in Halifax.

It’s early February, and workers at Clearwater’s lobster processing facility in the Halifax suburb of Bedford—the company’s headquarters—are scrambling to fill another massive order for live lobsters. Three shipments are due to leave today, bound for China in time for the Lunar New Year. Another team, drawing from a pool-size tank of crates teeming with 100,000 pounds of crustacean, is assembling boxes of live lobsters to fulfill orders from across North America—$58.75 for a 2.5-pounder, plus $30 for next-day delivery. On a typical day, up to 20,000 pounds goes out the door to distributors, grocers, restaurant chains and consumers.

It’s a reminder of Clearwater’s reach: In 2022, it sold $605 million in scallops, clams, lobster, shrimp, crab and other seafood to customers in 59 countries. That’s a far cry from Clearwater’s start in 1976, when Risley and his brother-in-law Colin MacDonald sold lobsters out of an old pickup truck before moving their small business into a renovated restaurant. Over the next four decades, the company grew rapidly by acquiring plants, vessels and fishing licences, including the full quota for Arctic surf clams from the Banquereau Bank off Cape Breton and the Grand Banks off Newfoundland and Labrador, plus all eight lobster licences in fishing area 41, an offshore stretch of ocean that begins 92 kilometres off Nova Scotia’s south shore and extends out to 370 kilometres. (That’s different from the inshore lobster fishery, which has been the scene of recurring tensions between Indigenous and non-Indigenous fishermen over the years.)

A worker arranges cooked lobster in a display case at the Clearwater Seafoods retail store in Halifax. In 2022, Clearwater sold $605 million in scallops, clams, lobster, shrimp, crab and other seafood to customers in 59 countries.

By 2019, Clearwater’s co-founders were looking to sell. Part of the impetus was the government-induced clam crisis of 2017, the stunted effort by Ottawa to transfer part of Clearwater’s quota to First Nations. They were also facing a succession problem, since none of their kids were interested in joining the business. That fall, Risley invited Chief Paul and a handful of other First Nations representatives to dinner at his waterfront home in Halifax and asked if they’d be interested in acquiring Clearwater, should the opportunity arise. Paul immediately said he wanted all of it—but even if Membertou enlisted other Mi’kmaq communities, they’d still be too small to absorb such a massive operation. They’d need a partner.

Clearwater launched a strategic review in March 2020, and Risley strongly encouraged potential bidders to find a way to work with the First Nations. Roughly 40 bidders expressed interest, but only one was willing to meet Membertou in the middle. “Hedge funds were looking at it as a quick flip, and other potential partners said they’d give us 2% and didn’t take it seriously,” says McIntyre, who’s been part of Membertou’s executive team since 2001. “We could tell Premium were the most sincere. They were the only ones to treat us as an equal.”

The process was complicated by the pandemic. Presentations to potential bidders were done via video call, as were negotiations and due diligence—on Clearwater’s vessels and in its processing plants, managers would strap GoPro cameras to their helmets and give virtual tours of the facilities.

Meanwhile, Membertou had entered into talks with Premium Brands, and Paul and his team were pitching the acquisition to other communities. Not all of them jumped at the chance. “This isn’t a criticism of any other chief, but what has been pushing Membertou forward is Chief Paul’s desire to put the community’s money on the table to be a player in transactions, while others felt uneasy about it,” says longtime adviser Jim Gogan, a partner with McInnes Cooper in Sydney whose practice focuses on Indigenous and regulatory law, and who represented the coalition in the Clearwater deal.

It’s important to note that Paul has an obvious entrepreneurial streak and appetite for risk that raises a question all visionary leaders eventually face: how to find a successor capable of replicating that magic. Paul has been chief for 40 years, with no obvious replacement in the wings—an issue the Atlantic Institute for Market Studies raised two decades ago in a paper on the Membertou model. When asked about it, Paul notes there are a number of lawyers and accountants in the community capable of doing the job and that Membertou’s management team is more than just one person. But he also bats away the question with a joke: “I’ve talked about retiring, but a lot of people tell me they’re not ready for me to leave. So I just say, ‘When I get old, I’ll think about it.’”

Chief Terry Paul is credited as the driving force behind Membertou’s transformation from a community struggling with poverty, high unemployment and a near-total reliance on government, into one of the most dynamic and successful First Nations communities in Canada.

For now, Paul’s powers of persuasion clearly haven’t diminished, and in the end, five other Nova Scotia bands and one in Newfoundland—We’koqma’q, Potlotek, Paqtnkek, Pictou Landing, Sipekne’katik, and Miawpukek—joined the Clearwater buying group.

But it’s unclear the $1-billion deal could have proceeded without the FNFA. It provided the Mi’kmaq coalition with a 30-year, $250-million loan, split between the seven communities, to buy a 50% stake and become full owners of six of Clearwater’s offshore lobster licences. (Membertou holds the other two after acquiring them in 2020 for $25 million.)

“Industry is figuring out that we make good partners because we bring more than just the political side to a deal,” says Jennifer Deleskie, Membertou’s vice-president of business development. “We also bring capital.”

Under the deal, Clearwater pays the communities roughly $18 million a year in licence payments, though McIntyre says the focus has been to put all that cash flow toward paying down debt. That’s changing.

The FNFA didn’t have the capacity at the time to finance the coalition’s entire $500-million investment, so Premium Brands lent it the remainder as subordinated debt (an unsecured loan that ranks below other debts), though with a 10% interest rate. In December, the coalition refinanced $100 million of that debt with the FNFA at just 4.28%. Starting this year, it will put several million a year into the communities.

“We’ll be looking at new investment opportunities, but at the same time, it’s important to make sure those funds are for the community, by the community,” says Gioia Usher, CEO of We’koqma’q First Nation, also located in Cape Breton. That means putting the money into housing, purchasing new land and “trying to get ahead of some of the issues these communities have faced for a long time.”

Ian D. Smith, C.E.O. of Clearwater Seafoods since 2010, at the company’s headquarters in Halifax.

Upstairs from the lobster processing facility in Bedford, at Clearwater’s corporate office, sits the man tasked with making this unique partnership model work.

Ian Smith—a former army reserve officer who went on to hold management and executive positions at Gillette, Colgate-Palmolive and Campbell Soup—has been CEO since 2010. Once he learned Clearwater was up for sale, he says he had no doubt that Mi’kmaq communities would be involved.

It’s helped that both new owners were familiar with the company. Membertou had worked with Clearwater on several partnerships, while Premium Brands was acquainted with Clearwater’s board and with Smith. Much of the first two years was spent navigating the pandemic, which turned demand for Clearwater’s products upside down—for a time, the food-services sector that had traditionally accounted for two-thirds of Clearwater’s business shrank dramatically, replaced by a surge in home-bound consumers.

Now, however, Clearwater is embarking on a growth strategy that reflects its new owners but is also rooted in the company’s harvesting strengths.

Near Smith’s desk sits a model of one of the company’s three clam vessels. The boats—each longer than an NHL hockey rink—are floating processing plants that spend 35 days at sea at a time. All told, Clearwater has 20 vessels operating in three oceans—the latest addition is a $90-million trawler for shrimp and turbot. “This is a highly capital-intensive business,” says Smith, noting the company must spend $30 million a year just on repair and maintenance. “It’s not a choice. That’s the ante to keep our asset base in operation.”

But Premium Brands, a serial acquirer, has also charted an M&A course that will see Clearwater move deeper into the world of value-added seafood and secondary processing—think canned clams or scallops in cream sauce. “Over the next five-plus years, we want to become serial acquirers of companies that have the knowledge to value-add the products, whether that’s canning, breading, saucing, smoking or packaging,” says Smith.

George Paleologou, who’s been CEO of Premium Brands since 2008, says the goal is to “decommoditize” Clearwater, not by reducing its harvesting business, but by increasing revenue from the sale of value-added products that have steadier margins. “Seafood is the only protein where demand locally exceeds supply, so having access to supply is strategically really important,” says Paleologou. “But our view is that they should also own a lot of the customers who value-add their products and sell them in the marketplace.”

At the same time, the process to Indigenize Clearwater is picking up speed, and Smith sees it as critical to future growth. Part of the plan has to do with emphasizing the company’s Indigenous ownership in not only its packaging, but also in its work with customers, governments, banks and other industry players. “We are unabashedly saying we’re an Indigenous-owned company, and that should be a reason you should consider working with us,” says Smith. “And if it hasn’t been part of your consideration, it should be.”

It also involves educating Clearwater’s employees on Canada’s history with First Nations. “I went through the K–12 education system here in Canada, and we were lied to,” says Smith. “I’m not trying to dramatize it, and maybe there were best intentions, but what we were taught about First Nations, Métis and Inuit was a complete and utter falsehood.”

Cheryl Copage-Gehue, director of Indigenous relations at Clearwater Seafoods. As a member of the Sipekne’katik First Nation, part of the Mi’kmaq coalition that acquired Clearwater, her community is also now a part owner of the business.

Clearwater recently recruited Cheryl Copage-Gehue from the Halifax Regional Municipality, where she was Indigenous adviser to the city. As a member of the Sipekne’katik First Nation, part of the Mi’kmaq coalition that acquired Clearwater, her community is also now a part owner of the business. She’s trained Smith to help her with blanket ceremonies, an exercise that takes participants through 1,500 years of Indigenous history over the course of three hours. It’s an optional program she’s rolling out across the company. “For most people, there’s a lot of awareness that needs to be done, because they’ve never worked with First Nations before,” she says, pointing to understanding protocols, and how to work with elders and engage with communities. “We’re not a special interest group. We are our own government, and we are 50% owners of this corporation now.”

Clearwater has also embarked on a revamp of its procurement arrangements, with an eye on potential Indigenous partners. “You don’t get Clearwater’s business because you’re Indigenous, but you do if you have the knowledge, skills and competency to be a provider,” says Smith. “And by the way, we’ll help you get there.”

Lastly, Clearwater wants to dramatically increase the share of its workforce that’s Indigenous. It’s a slow process and, as Smith and several members of Membertou’s economic development team repeatedly point out, it won’t involve existing workers losing their jobs. “Reconciliation isn’t about displacing people at Clearwater and replacing them with Mi’kmaq people,” says Deleskie. But as people retire or leave, Indigenous candidates who qualify will be given the first shot at those jobs. To get candidates ready, Clearwater has launched a post-secondary training program that places community members in jobs throughout the company. At a recent presentation to women Mi’kmaq fishers, Copage-Gehue emphasized the opportunities. “The seafood we’re catching here is being sold globally in China and Scotland—do you realize we own a company in Scotland?” she told the group. “We own a company in Argentina. Our youth have an opportunity to become part of this and potentially work in sales in China or Argentina, or in robotics.”

Smith won’t say whether Clearwater has a target for Indigenous employment, but he says if you look 10 years out, “is it 25% or 30% of the total company that have an Indigenous background? Maybe that’s not even ambitious enough.”

One of the jobs up for grabs might be Smith’s own. When the deal was signed, Paul said he dreamed of a day when Clearwater’s CEO would be Indigenous. He still feels that way. But in the same breath, he praises Clearwater’s existing management team, who all stayed on after the transaction closed. “I call them the Magnificent Seven,” says Paul.

Smith is well aware of Paul’s hopes, and while there’s no set date for him to leave, he wants to make sure there are internal candidates for the board to consider. (The board has four members, including Paul.) “I have no doubt they’re going to want to consider an Indigenous candidate, and the selection committee will do a very rigorous job choosing the next CEO,” Smith says. “I’m here to create shareholder value, to make sure our employees are safe and earn a decent living so they can take care of their families and save for retirement. I want to make sure that when my time is done here and the baton is passed, the next leader understands that.”

Clearwater’s offshore lobster quota has been set at 720 tonnes since the 1980s, while the total lobster catch for Atlantic Canada in 2021 was 105,600 tonnes.

Can a company motivated by profit partner with a First Nations group dedicated to a loftier bottom line and make it work?

It’s a question many corporate leaders are asking themselves these days, as more transactions involving Indigenous communities get announced. In 2022, Enbridge sold stakes in seven Alberta pipelines to Athabasca Indigenous Investments, owned by nearly two dozen First Nations and Métis communities, for $1.1 billion. Last year, four B.C. First Nations bought a 34% stake in a limited partnership from Western Forest Product to operate on 157,000 hectares of forest land on eastern Vancouver Island. Meanwhile, Premium Brand’s Paleologou hints at a potential “Clearwater west” 50-50 partnership with First Nations in B.C. “We’re driving it from the point of view of creating a situation where two plus two equals eight,” Paleologou says, without giving a timeline for when a deal might be announced.

What’s more, with the federal government and provinces like B.C. exploring or adopting loan guarantee programs that will enable First Nations to take equity stakes in resource projects, it’s no surprise companies are taking notice of their growing financial clout. It’s likely to raise questions about whether corporate Canada is taking advantage of First Nations for their access to low-cost capital—but that framing itself smacks of the paternalism that has kept Indigenous people on the economic sidelines for so long. “These opportunities are approached very much like the private sector would, looking at the return on equity, the risk profile and where the opportunities are,” says Gogan. “They’re participating as equity partners, not as a bank just loaning money out.”

Against this evolving landscape, the Clearwater deal offers a unique lens to explore the emerging dynamic between First Nations and corporate Canada. While Paleologou emphasizes his company’s long-term approach to growth, it is fleeting by the standards of the Mi’kmaq coalition, which adheres to the principle that actions taken today must consider the impact they’ll have on the next seven generations.

So far, both Premium Brands and the Mi’kmaq coalition have found ready agreement on strategy. Helping matters is the fact the company enjoyed record results in 2022, its first full year under new ownership, with sales up 13% to $605 million. Yet, fiscal 2023 has been a tougher slog, with revenues flat in the first three quarters compared to the year before. It’s the kind of volatility Premium Brands hopes to eventually smooth with its value-added strategy, but a sustained stretch of weak performance could test the patience of shareholders.

Another test could arise if lobster stocks come under pressure. To many in the inshore lobster fishery, as well as environmentalists, Clearwater has long been viewed with resentment and suspicion because of its grip on the offshore fishery. Indeed, as the deal to buy Clearwater was nearing completion, Chief Paul and his team watched nervously as some Indigenous communities criticized Clearwater, concerned it could scuttle the deal. “We get tagged all the time as that big conglomerate Clearwater, but we’re 1% of the fishery,” says Deleskie, Membertou’s head of business development.

Indeed, Clearwater’s offshore lobster quota has been set at 720 tonnes since the 1980s, while the total lobster catch for Atlantic Canada in 2021 was 105,600 tonnes, up from 67,000 tonnes a decade earlier. (Last year, Clearwater asked the Department of Fisheries and Oceans to boost its quota by 72 tonnes but was refused.) And while the latest 2022 analysis from the DFO shows lobster stocks are healthy, catches this winter have dropped—another reminder that stewardship and Clearwater’s bottom line could find themselves at odds.

But as Smith sees it, neither prerogative—profit or reconciliation—should exclude the other. He frames it as “the tyranny of the or and the genius of the and.” There’s a tendency, in the face of seemingly contradictory options, to believe that only one or the other can be pursued. But the genius of the and means embracing forces that seem paradoxical. “Accomplishing our Indigenous strategy and delivering top-quartile shareholder returns is not an or option,” he says. “You have to do both, and that means serving up the investment opportunities that allow us to do both.”

Likewise McIntyre, Membertou’s CFO, says including First Nations as full participants in projects means getting a partner that appreciates the necessity of financial returns. “Clearwater was first and foremost an investment for us,” he says. “We deployed half a billion dollars of capital, so we’re obviously there to protect that investment and grow it. The quicker we can grow Clearwater, the quicker it pays down debt, and the more benefit comes to communities.”

That said, if ever the interests of Premium Brands and the Mi’kmaq coalition irreconcilably collide, Risley knows how it will end: with the First Nations buying out their corporate partner. “That’s ultimately what will happen—and should happen—and that’s a good thing,” he says. “It doesn’t matter if it happens in 15 years or 25 years. It will happen when the First Nations are ready.”

Inshore showdown

While the offshore lobster fishery that Clearwater engages in is separate from the inshore fishery that has been the source of tensions over Indigenous fishing rights, there’s a clear line between the landmark court decision that affirmed those rights and the Mi’kmaq coalition’s acquisition of Clearwater:


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