Introduction
Kirby Elson had been fishing in Newfoundland and Labrador for
about 50 years when the policy on Preserving the Independence of
the Inshore Fleet in Canada's Atlantic Fisheries
("PIIFCAF") was introduced in 2007. Concerned it would
cause him to lose his fishing enterprise, he sought an exemption
from complying with PIIFCAF. After various procedural steps, the
matter ended up in Federal Court as an application for judicial
review of Fisheries Minister Hunter Tootoo's December 2015
decision that the Applicant's exemption request should be
denied (accepting a recommendation of the Fisheries Licence Appeal
Board).
In an 86-page decision reported as Elson v Canada (Attorney
General), 2017 FC 459, Justice Strickland has dismissed
the application and upheld the Minister's denial. This means
the Applicant no longer has valid fishing licences.
Not only is this decision important for the fishing industry in
Atlantic Canada, but it also takes a broader look at the extent of,
and limits on, the Minister's discretion over fishing licences
under section 7 of the Fisheries Act.
PIIFCAF and controlling agreements
PIIFCAF was intended "to reaffirm the importance of
maintaining an independent and economically viable inshore fleet;
strengthen the application of the Owner-Operator and Fleet
Separation Policies; ensure that the benefits of fishing licences
flow to the fish harvester and the coastal community; and, assist
fish harvesters to retain control of their fishing
enterprises."1
As a result of PIIFCAF, an Atlantic fish harvester would only be
eligible for a new or replacement licence if they were not party to a
"controlling agreement." A controlling agreement is a
form of trust agreement that lets someone other than the licence
holder (say, a fish processing company) make decisions about
licence transfers.
The Applicant had been in a controlling agreement with Labrador Sea
Products Inc. and Quinlan Brothers Limited since 2003. In 2007,
PIIFCAF gave licence holders in controlling agreements seven years
to comply. At the end of 2014, the Applicant was still in his
controlling agreement. As mentioned, he unsuccessfully tried to
seek an exemption from PIIFCAF so he could remain in the
controlling agreement arrangement.
The Minister's exercise of discretion
The legal issues on judicial review were whether the Minister
(1) based his decision on irrelevant factors; (2) fettered
(improperly limited) his discretion; or (3) had a closed mind when
considering the Applicant's request for an exemption.
(1) Irrelevant
factors?
The Applicant argued that PIIFCAF was an irrelevant consideration
because, he said, the policy itself was actually unconstitutional.
The Applicant framed PIIFCAF's requirement for fish harvesters
to get out of controlling agreements as an improper interference
with the provincial power over the regulation of contracts.
Justice Strickland disagreed, finding that the Minister had the
discretion to "consider social, cultural or economic goals or
policies when deciding whether or not to issue fishing
licences"2 as part of the federal power over
fisheries. PIIFCAF, she found, was meant to achieve these kinds of
objectives in Atlantic Canada.
As Justice Strickland explained: "the Minister had
determined that controlling agreements, which were devised to
defeat the existing licencing policies, resulted in negative
socio-economic consequences for coastal
communities."3
Furthermore, Justice Strickland noted that PIIFCAF, as a policy and
not legislation or a regulation, could not actually "be
subject to a division of powers challenge."4 (There
was no constitutional challenge to section 7 of the Fisheries
Act, which grants the Minister extremely broad discretion over
fishing licences and related issues.)
Justice Strickland found PIIFCAF "does not frustrate
contracts"; licence holders still have wide contractual
freedom: "it does not prevent licence holders from
entering into contracts, obtaining financing, using their licence
as collateral, supplying their catch to whomever they wish or
otherwise organizing their business affairs as they see
fit."5
(2) Fettered
discretion?
The mandatory nature of PIIFCAF, and the absence of exemptions for
individual harvesters, did not fetter the Minister's
discretion, according to Justice Strickland. The Applicant had the
opportunity to seek an individual exemption from the Minister,
through correspondence with DFO and through the Appeal Board
process. But although the Applicant's position was that a
controlling agreement was the only way he could afford to keep
fishing, he had not submitted any supporting financial or other
evidence during that process.
This was not the end of Justice Strickland's analysis, however.
She ended up finding that the Minister had fettered his discretion
after all.
In particular, she found a flaw in the Minister's decision
letter from December 2015 indicating that he'd improperly
limited his discretion by concentrating on PIIFCAF and not
explicitly relying on the Fisheries Act as a source of his
decision-making authority: "the Minister's decision
letter failed to acknowledge the source and breadth of his broad
discretion under section 7 of the Fisheries Act, referring
only to the PIIFCAF Policy. He thereby fettered his discretion by
not also considering that it was open to him to afford the relief
sought other than by way of the PIIFCAF Policy and the appeal
process."6
(3) Closed
mind?
Despite her conclusion that the Minister fettered his discretion,
Justice Strickland found that the Applicant had not met the
stricter test to show that the "Minister's mind was
closed";7 the Minister had not prejudged
the issue before it came to him, even though he decided against the
Applicant.
Remedy
Justice Strickland relied on a Federal Court of Appeal decision
holding that a "decision that is the product of a fettered
discretion must per se be
unreasonable."8 Importantly, however, that did
not automatically
result in a remedy for Mr. Elson. This is because of Justice
Strickland's finding that the available remedy—returning
the matter to the Minister—would not have made any difference
to the result.
The Applicant did not meet the requirements of PIIFCAF, and the
Minister would still have the discretion to deny him an exemption,
so Justice Strickland decided there was no point in sending it
back.
This decision could yet be appealed.
In the meantime, PIIFCAF continues to apply – and continues
to prevent Mr. Elson from fishing his licences if he remains party
to a controlling agreement.
This update is intended for general information only. If you
have questions about how this case may affect you, please contact
our fisheries law practitioners
Will Moreira, QC, FCIArb and
Sadira Jan in Halifax, or
Kim Walsh in St. John's.
1 Paragraph 6.
2 Paragraph 51.
3 Paragraph 72.
4 Paragraph 56.
5 Paragraph 73.
6 Paragraph 135.
7 Paragraph 146.
8 Paragraph 153 (see also paragraph 25).The content
of this article is intended to provide a general guide to the
subject matter. Specialist advice should be sought about your
specific circumstances.