Skip to content

Nothing fishy here: Federal Court dismisses application for judicial review in PIIFCAF case

Jennifer Taylor

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).

SHARE

Archive

Search Archive


 
 

Richards Estate sets the limits on actions against LTD insurers

February 27, 2020

Michelle Chai & Jennifer Taylor   UPDATE   Richards Estate v Industrial Alliance Insurance and Financial Services Inc, 2020 NSCA 14   The Nova Scotia Court of Appeal has recently overturned the decision summarized below,…

Read More

Can my child obtain a work permit?

February 27, 2020

Kathleen Leighton Family reunification is a top priority for Canada when it comes to immigration, and we recognize that in order to continue to attract skilled workers to our country, we must ensure there are…

Read More

Bringing top talent to Canada’s educational institutions

February 19, 2020

Kathleen Leighton and Brittany Trafford Canada’s higher education institutions power innovation and contribute to economic growth through research and development efforts, collaborations with government and industry and the provision of world-class educational programming to develop…

Read More

Express yourself … but maybe not on your license plate: The NSSC decision in Grabher

February 6, 2020

Jennifer Taylor   The case of Lorne Grabher and his personalized “GRABHER” license plate has grabbed many headlines. Mr. Grabher (“Applicant”) launched a constitutional challenge after Nova Scotia’s Registrar of Motor Vehicles cancelled his personalized…

Read More

Ensuring your earn-out turns out: A review of the law of earn-out clauses in Canada

February 5, 2020

David Randell and David Slipp With a number of economic indicators showing headwinds ahead, purchasers and vendors are likely to have a more challenging time agreeing on a target company’s valuation. In these cases, parties…

Read More

Post-Brexit impact on CETA mobility

February 3, 2020

Kathleen Leighton The Canada-European Union Comprehensive Economic Trade Agreement (“CETA”) includes mobility provisions between Canada and European Union (“EU”) member states, providing a useful route for investors, contractual service providers, independent professionals, intra-company transferees, and…

Read More

Beyond the border: Immigration update – January 2020

January 31, 2020

We are pleased to present the second installment of Beyond the border, a quarterly publication aimed at providing the latest information to clients about new programs and other immigration-related information that may be pertinent to employers…

Read More

Outlook for the 2020 proxy season

January 31, 2020

In preparing for the 2020 Proxy season, you should be aware of some of the regulatory developments and institutional investor guidance that is likely to impact disclosure to, and interactions with, shareholders. This update highlights…

Read More

Surprise changes to Nova Scotia’s minimum wage and partial hours rules announced

January 30, 2020

Jennifer Thompson Nova Scotia’s Premier’s Office has today made an unexpected announcement regarding several changes to be made to Nova Scotia’s minimum wage and partial hours rules, with effect from April 1, 2020. Additional increase…

Read More

My PR Card expired! What do I do?

January 28, 2020

Kathleen Leighton For individuals whose Permanent Resident Cards (“PR Cards”) have expired, it can be a time of panic. “Did I lose my status?”, “Do I have to leave the country immediately?”, “Can I still…

Read More

Search Archive


Scroll To Top