Illegal lobster market prevails Fishermen back Canadian probe

HALIFAX, Nova Scotia – Fishermen in Atlantic Canada’s lucrative lobster trade say they have complained for years about an extensive, multimillion-dollar black market now being investigated by federal officials.

Leaders in the industry say they repeatedly have urged Ottawa and the Nova Scotia government to crack down on an illegal underground trade that’s squeezing them out of the business and siphoning off millions in tax revenues.

“We have been saying this is a growing problem, but little’s been done,” Denny Morrow, who represents fish packers along the southwest shore of Nova Scotia, said Wednesday.

“Unless the government enforces the law, you can’t have a level playing field. It’s causing honest fishermen and buyers to become dishonest.”

The Canada Customs and Revenue Agency is investigating an alleged black market in the Atlantic lobster fishery they say could be worth up to $200 million in unreported income.

The agency has been looking into the underground economy over the period from 1996 to 1999, but only a couple of people have been charged with related offenses.

Those cases are tied up in the courts and it could be months, if not years, before any more charges are brought.

“It’s a very long investigation,” Roy Jamieson of the agency said Wednesday. “These are particularly difficult because of the painstaking process of forensic audits.”

The investigation, involving about a dozen agents doing up to 10 separate cases, includes audits of more than 200 individuals and companies, Jamieson said.

Agents are trying to determine if buyers have accounted for all of the lobster they’ve bought from fishermen primarily in southwestern Nova Scotia, where the industry has been a vital part of the economy for the last 100 years.

Fishermen and buyers say two lobster markets have sprung up in recent years, with increased competition fueling an illegal economy.

Buyers will offer fishermen cash for their catch, allowing them to sell it without having to record their earnings and pay taxes, and taking away business from other buyers who operate legally.

“Sometimes fishermen have taken so many of their crates and gone somewhere else with it where they don’t pay the legal price,” said one lobster buyer in Clark’s Harbour, Nova Scotia, who didn’t want his name used.

“It makes a very unfair playing ground and every company has run into some type of problem with it.”

The province defended its record in dealing with the illegal trade in lobsters, arguing it launched an investigation with its federal counterparts when the Tories came to power in 1999.

Ernie Fage, minister of fisheries, said his department has been working closely with federal authorities to monitor sales and track shipments.

Fage says the province, which is doing a review of the industry for the last nine months, has hired more inspectors but it takes time to track down information.

“It takes a number of months … by the time you do extensive paper trails, audits, to ensure that you do have your facts straight,” Fage said.

Morrow said he’s sent letters to the Department of Fisheries, Canada Customs and the province in recent years, with little response or action.

Officials have said a fish plant on Cape Sable Island could be involved in the sale of illegal lobster to an American company on Cape Cod in Massachusetts.