Above: David Greening photo
The government of Newfoundland and Labrador recently announced a $15-million investment by the Innovation and Business Investment Corporation (IBIC) to enhance the province’s Fisheries Loan Guarantee Program, overhauling it into the Harvester Enterprise Loan Program.
The retooled program was announced by Fisheries, Forestry and Agriculture Minister Elvis Loveless alongside the Fish, Food and Allied Workers Union (FFAW) President Greg Pretty inside the provincial House of Assembly.
“Today, we’re here to announce a $15-million program in the Harvester Enterprise Loan Program — HELP — because I believe we’re providing help today to those who need it in the industry,” said Loveless.
The HELP program will see $4 million going to assist harvesters with loans for combining enterprises, $3 million for vessel-related items such as construction, purchasing or refitting and $2 million for acquiring licenses. The highlight of the program, according to Loveless, is the addition of a down payment component to assist in meeting the down payment requirements for accessing a loan from a financial institution.
“It’s 15 per cent up to a maximum of $450,000,” said Loveless. “No interest on that component piece, which we believe is a big piece for the borrower.”
The maximum term for these down payment loans will be 20 years, the first five of which will be interest accrual and payment-free. Repayment and interest accumulation will begin in the sixth year of the loan, which will be charged at the Bank of Canada’s policy rate.
The HELP program also features a need interest rebate component, which will see borrowers who honour their loan payments receive a rebate to cover interest in excess of the bank prime rate. According to Loveless, borrowers could see rebates of $245,000 or more.
Pretty, speaking on behalf of the FFAW, called the HELP program a great day for the union’s members and a great day for rural Newfoundland.
“We’ve talked in the last 15 months about a loan board; a true loan board that would assist harvesters, not only in engines and remodeling, but in new entrance into this fishery,” said Pretty. “This loan board will now accept loans and the risk that comes from young harvesters, so it will be a great boost to this fishery.”
Pretty also noted that the program can potentially reduce harvester’s dependency on processors in the province to fund their enterprises.
“There will be a movement away from that, and with the down payment you don’t have to go to the old setup,” said Pretty.
“That’s extremely significant moving forward, because that cartel-like behaviour included loans that were questionable on not only repayments, but licensing.”
Applications for the HELP program will open in early July 2024. The government of N.L. said at that time, it will release updated guidelines and application instructions and arrange information sessions with stakeholders.
