Aucoin v. The Queen, 2001 FCT 800

Date: 20010717

Docket: T-662-01

Neutral Citation: 2001 FCT 800

BETWEEN:

HELIODORE AUCOIN, LUCIEN CHIASSON, ROMEO CORMIER,

AURÉLIEN HACHÉ, GUY HACHÉ, RHÉAL HACHÉ, ROBERT F.

HACHÉ, JEAN-PIERRE LeBOUTHILLIER, ALBANIE NOËL, ALPHÉE

NOËL, JOSEPH NOËL, LÉVI NOËL, LORENZO NOËL, MARTIN NOËL,

MATHURIN NOËL, NICHOLAS NOËL, ONÉSIME NOËL, RÉNALD

NOËL, RAYMOND NOËL, SERGE NOËL, JEAN-CAMELLE ROUSSEL,

                DONAT VIENNEAU and RHÉAL VIENNEAU,

                                                                                       Applicants

AND:

HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by

THE MINISTER OF FISHERIES AND OCEANS; ATTORNEY GENERAL

OF CANADA; FONDS DE SOLIDARITÉ DE L'INDUSTRIE DU CRABE

DES NEIGES INC.; and PARTENARIAT DU CRABE DES NEIGES INC.

                                                                                    Respondents

                                  REASONS FOR ORDER

ROULEAU, J.

[1]    The applicants, snow crab fishers located on the east coast of the Province of New Brunswick, are seeking by way of judicial review to set aside a decision by the Minister of Fisheries and Oceans whereby the Department for the 2001 fishing season has imposed a levy on the holders of traditional snow crab fishing licences in addition to the required license fees; this, they allege was beyond the scope of the Minister's authority.

[2]    Only the Minister of Fisheries and Oceans attended the judicial review application. Fonds de Solidarité de l'Industrie du Crabe des Neiges Inc. and Partenariat du Crabe des Neiges Inc. were unrepresented.

[3]    A brief history leading up to the directive issued by the Department of Fisheries and Oceans in April, 2001 is essential in order to understand the issue in dispute.

[4]    Some 130 snow crab fishers are licenced to harvest in Zone 12 which is an area on the west side of the Gulf of St. Lawrence and is made up of individuals residing on the coasts of New Brunswick, Quebec and Newfoundland bordering the Gulf.

[5]    As early as 1995, as a result of amendments to the then Unemployment Insurance Act, it became evident that employees working in snow crab processing plants were unable to work a sufficient number of weeks in order to qualify for benefits upon the termination of their seasonal employment.

[6]                Some time during the autumn of 1995, officials of the Department of Fisheries and Oceans (hereinafter the "Department") initiated discussions with the Zone 12 snow crab fishers with a view to implementing a program to subsidize the snow crab plant workers. The purpose was to create a fund to which the snow crab fishers would contribute together with the province of New Brunswick. The fund would undertake make-work projects in cooperation with the Province of New Brunswick; the laid-off plant workers along with certain members of the crew of some fishing vessels would be hired; as a result they would acquire a sufficient number of weeks of insurable employment in order to qualify for benefits. It should be noted in passing that in June, 1996, the Government of Canada passed certain amendments to the now Employment Insurance Act taking effect January 1, 1997 which altered the eligibility rules from weeks of insurable employment to hours in order to qualify for benefits.

[7]                For a number of years the Department of Fisheries and Oceans had been contemplating a fisheries management partnering concept. There already existed in some areas co-management allowing for the input of fishers in the direct management of the fishery. Various groups had been invited to the decision-making process and in some cases shared the cost of managing the fishery. The new initiative was to include on-shore workers in various fish processing plants; the ultimate aim was to create shared responsibility among the various parties in managing the fishing industry and provide longer term employment.

[8]                In anticipation of the partnering concept and on a purely voluntary basis, the licenced snow crab fishers were prepared to come to the aid of their fellow citizens in the industry and an agreement in principle was entered into in February, 1996 between officials of the Department and various associations representing the licenced snow crab fishers. It was agreed that a certain percentage of the gross revenue realized by the various fishers would be contributed to a fund for the purpose of providing the necessary financial support for the creation of make-work projects for the laid-off on-shore snow crab plant workers. The agreement was conditional and it was recited therein as follows:

"Une entente de partenariat entre le ministère des pêches et des océans et les 130 pêcheurs de crab des neiges de la Zone 12 lorsqu'une telle entente sera légalement possible selon la nouvelle loi sur les pêches."

(My emphasis)

[9]                The respondent Fonds de Solidarité de l'Industrie du Crabe des Neiges Inc. (hereinafter the "Fund") is a non-profit corporation which was incorporated on May 22, 1997. The respondent Partenariat du Crabe des Neiges (hereinafter the "Partenariat") was not incorporated until May 10, 1999 at the request of the Minister. The "Partenariat" does not own or operate any fishing vessel and is not engaged in fishing as defined in the Act.

[10]            The unchallenged evidence of the affiant Aurélien Haché, one of the applicants, outlines how the scheme operated. In the spring of each year a directive was issued by the officials of the Department that 20% of each fishermen's traditional quota was withheld and transferred to the "Partenariat". Upon payment by each fisher to the "Partenariat" of a sum of money, based on his total per pound quota, the "Partenariat" would then notify the Department that the individual had contributed the sum due on his per pound catch; they in turn would then retransfer the money to the "Fund" and the Department officials would re-release the withheld 20% of the quota to the fisher.

[11]            All of these applicants are part of an association called "Crabiers du Nord-Est Inc." whose principal spokesman is Aurélien Haché. In February, 1996, one of the applicants, Robert Haché, executed the tentative agreement on their behalf. The Minister then drafted Bill C-62 of 1996 which had its first reading in the House of Commons on October 3, 1996. This Bill brought a number of amendments to the proposed Act and regulations respecting fisheries and was designed to improve and authorize "fishery management agreements" which could have been entered into. Subsections 17(1) through (4) of the proposed legislation would have authorized the Minister to enter into fisheries management agreements and would have among other things:

17(2) An agreement may establish

...

d) the obligations, responsibilities and funding arrangements with respect to management of the fishery.

[12]            Unfortunately, Bill C-62 died on the order paper when Parliament was dissolved on April 27, 1997.

[13]            A press release dated May, 1997 outlining a management of the snow crab fishery specifically stated that a contemplated agreement was intended to create a fund to assist the workers who were employed in the snow crab plants in order to extend weeks of employment for those who would be losing their seasonal jobs.

[14]            The snow crab fishers respected the terms of the agreement even though Bill C-62 had died in the order paper and they continued to voluntarily make payments to the "Partenariat" and did not question their obligation until some time in February of the year 2000 when the affiant, Mr. Haché, wrote the Auditor General of Canada, L. Denis Desautels, questioning the legality of the scheme. In his reply dated March 1, 2000, the Auditor General wrote:

Plus précisément, une étude de cas de ce chapitre décrit nos préoccupations face à l'imposition d'une redevance aux pêcheurs, ce qui n'était pas prévu par la loi.

[15]            In his affidavit, Mr. Haché refers also to a report prepared by the Auditor General of Canada dated July 17, 2000 in which the Auditor General refers to:

Les fonds de solidarité: imposition aux pêcheurs de frais qui ne semblent pas prévus par la loi

[16]            Mr. Desautels confirms having enquired into the matter and acknowledges that it was undertaken by fishers on a purely voluntary basis; he provides a brief history of the agreement and concludes as follows:

Nos préoccupations. Le Ministère participe aux décisions concernant les fonds et s'assure que la redevance est payée et virée au fonds de solidarité. À notre avis, par ces mesures, il a en fait imposé aux pêcheurs des frais d'accès à la ressource, ce qui ne semble pas prévu par la loi.

De plus, le Ministère n'a aucun mécanisme pour rendre compte de ses activités en regard des fonds. Il a déclaré qu'il n'a pas de lien de dépendance avec le fonds; il n'agit donc pas, selon nous, de façon transparente et responsable.

[17]            The provisional agreement of February, 1996 provided that the funds being contributed by the fishers were to be paid to the Department of Fisheries and Oceans, Maritime Region. In light of the fact that Bill C-62 died on the order paper this did not occur. Hence the payments were made into the "Fund" rather than as directed in the provisional agreement. (See Exhibit C to the affidavit of Aurélien Haché sworn April 17, 2001)

[18]            An information bulletin issued by the Department of Fisheries and Oceans dated April 9, 2001 clearly indicates the so-called partnering agreements presumed ratification by Parliament because at page 4 the following is written:

Where Do We Go From Here - What Will Happen Next?

The legislative authority to enable DFO to enter into partnering agreements has been tabled in Parliament. The new Fisheries Act, if passed, will provide the basis for the legal implementation of partnering agreements. Until the new Act is law, legally binding partnering agreements, with respect to the management of the fishery, cannot be entered into.

(My emphasis)

[19]            Fisheries officials were undoubtedly aware that Bill C-62 had died on the order paper and were also undoubtedly aware as early as July of 2000 of the Auditor General's concerns about the appropriateness of this whole scheme. Nevertheless, on April 10, 2001, a press release was issued by Fisheries and Oceans Canada. It refers to the details of the 2001 snow crab management plan. In the body of this news release, after having referred to the Gulf of St. Lawrence areas 12, 25 and 26, the press release states:

It is anticipated that the participants of the co-management approach will continue to respect their commitment to the industry lead initiative of the solidarity fund.

[20]            In his affidavit, Mr. Haché swore that on April 9, 2001, Monique Baker and Rhéal Vienneau, resource managers of the Department located in Moncton, New Brunswick, confirmed in the name of the Minister that out of the total quota allocated to the traditional license holders, the Minister would be transferring 2,125 tons to the "Partenariat" as it had done in the previous fishing season. He further swears in his affidavit that he was advised that the "Partenariat" would retain this portion of the quota until the Minister was advised that the licenced snow crab fishers had paid their individual proportionate share to the "Partenariat".

[21]            The procedure adopted in the past for the fishing season 1999-2000 which was to be adhered to in the year 2001, is outlined in a document issued by the Resource Management Branch of Fisheries and Oceans Canada from Moncton, New Brunswick. This document is dated April 8, 2000 and is Exhibit "S" to the affidavit of Mr. Haché. It refers to the subject matter "Forms for Temporary Transfers" and to the procedure that will be followed for the allocation and co-management of 2,125 tons. It indicates that the "Partenariat" will receive a temporary permit for 2,125 tons; that the "Partenariat", upon receipt of funds, instructs the Department concerning each individual fisher. The "Partenariat" then forwards the request to the Minister's representative Monique Baker in Moncton, New Brunswick, who verifies the amount owing by each individual fisher and, once satisfied, the proper transfer form "shall be given to each fisher who must have it on board his vessel".

[22]            On April 10, 2001, Fisheries and Oceans Canada issued a press release under the heading: "Details of the 2001 Snow Crab Management Plan for Areas 12, 25 and 26 - Southern Gulf of St. Lawrence".    This press release states that "it is anticipated that the participants of the co-management approach will continue to respect their commitment to the industry-led initiative of the Solidarity Fund".

[23]            On April 19, 2001, the Department of Fisheries and Oceans through its Regional Director General, Mr. J.B. Jones, advises all licence holders in areas 12, 25 and 26 that once again, in light of the joint project agreement, Fisheries and Oceans will be allocating a percentage of the snow crab quota to the "Partenariat".

[24]            Following the press release of April 10 and the letter from the Department dated April 19, 2001, the applicants launched this motion on April 30, 2001. On May 2, 2001, Mr. Haché on behalf of his association wrote the Department to the attention of Mrs. Baker advising that the judicial review was to be entertained by the Federal Court on May 22, 2001; he was satisfied that most of the snow crab fishers would have fulfilled their entire quota before the matter could be heard and proposed that the monies which were to be paid to the "Fund" be held in trust until the matter was disposed of. Mrs. Baker replied on May 10, 2001 that she was relying on instructions received from her counsel and was non-committal.

[25]            In letters dated May 1, 2001, all these applicants forwarded to the Department, to the attention of Mrs. Baker, their cheques made payable to the "Partenariat" which in total exceeded $247,000.00.

[26]            By May 5, 2001, all of these applicants had paid in the extra levy in order to free up the 20% withheld quota. On May 8 and 10, 2001, the Department issued temporary seasonal snow crab licences for 2001 in the name of the "Partenariat" representing the 20% of the withheld snow crab quota and apparently these licences were valid as of May 10, 2001 and were expected to expire shortly thereafter.

[27]            The facts that I have recited are unchallenged by the respondents and none of the affidavits filed by Department officials in any way contradict the circumstances and the facts surrounding this dispute.

[28]            In the respondents' Motion Record, Monique Baker admits that she works for the Department of Fisheries and Oceans. She suggests in her affidavit that no letter had been sent out to the respective licence holders for 2001 similar to that issued for the 2000 fishing season reminding them of their obligation. She suggests that she faxed a draft copy of the letter to Mr. Gauvin indicating that it had been prepared but was yet undated and unsigned as of the date she swore her affidavit, May 7, 2001.

[29]            I have reviewed the draft letter prepared by the Department of Fisheries and Oceans under the authorization of one J.B. Jones, Regional Director General and, contrary to what Mrs. Baker suggests, such a letter was sent by the Department to the fishers on April 19, 2001. (See Exhibit A to the Supplementary Affidavit of Aurélien Haché sworn April 25, 2001)

[30]            I have also reviewed a further affidavit, one sworn by Hilaire Chiasson, a Senior Economic Analyst of the Department of Fisheries and Oceans, wherein he swears that he has attended meetings of the Board of Management of the "Fund". He suggests that since September, 1999, the Department's involvement was limited to one of observer and resource person and that he does not have a vote at Management Board meetings held by the "Fund". That may well be true but he is most surely aware that the only resources that the "Fund" had at its disposal comes from the Province of New Brunswick and the crab fishers. I fully understand that he may not have a vote at their meetings since they are determining what make-work projects should be approved. Nevertheless he is cognisant of the scheme.

[31]            A further affidavit was filed by the respondents from one Rhéal Vienneau, also an employee of Fisheries and Oceans Canada. He admits to the press release of April 10, 2001 and swears in paragraph 4 that "No quota has been held back from the Applicants, and no condition of the Applicants' licences indicates that any quota has been "held back"." He continues in paragraph 5 by stating "As of the date of the swearing of this affidavit neither a licence to fish for snow crab nor a snow crab quota has been granted to the Respondent, Partenariat du Crabe des Neiges Inc. (Partenariat)". In paragraph 7 he swears that "Neither the Minister nor the Department is to be provided with any confirmation of payments by the Applicants to the Fund as a condition of approving any allocation of quota". In his closing paragraph he suggests that "Payments to the Fund are not part of the payments under the joint Project Agreement. The applicants in this case are not parties to the Joint Project Agreement". This he swears on May 7, 2001.

[32]            This affidavit is drafted in such a manner as an attempt to obliquely avoid the facts; it is evident that the Department issued quotas or licences to the "Partenariat" the very next day, May 8, 2001. It is inconceivable that Department officials working in such close quarters were not aware of the monies forwarded to Mrs. Baker and made payable to the "Partenariat" and that they were unaware of the transfer of permits to the "Partenariat". (See Exhibit B to the Affidavit of Aurélien Haché sworn May 11, 2001)

[33]            For Mr. Vienneau to suggest that he was not aware of the joint Project Agreement and payment to the "Partenariat" is unacceptable. It is agreed that no formal joint agreement was entered into since Bill C-62 authorizing the Minister to undertake such a scheme died on the order paper in the House of Commons in the Spring of 1997. Nevertheless Exhibit C to the affidavit of Aurélien Haché sworn April 17, 2001 is a tentative agreement signed February 8, 1996. This agreement on the first page outlines what percentage of revenue will be directed to the "Fund" by the fishers. This was signed not only by the various associations representing snow crab fishers and Mr. Robert Haché, one of the applicants, but it was also signed by the deponent, Rhéal Vienneau on behalf of the Department.

[34]            The respondent submits and the Minister specifically denies that any quota was held back or transferred to the "Partenariat"; that there was no directive to pay into the "Fund" and no evidence to support the allegations.

[35]            A reading of the facts which are substantiated by the documents totally contradicts this submission. One need only look to Exhibit O to the affidavit of Aurélien Haché sworn April 17, 2001. Not only does it indicate that licences are being transferred temporarily to the "Partenariat", the Department also advises what format the fishers should employ after completing their payments. Exhibit B to the supplementary affidavit of Aurélien Haché sworn May 11, 2001 actually shows a licence specifically transferring some 1,345 tons of crab quota, dated May 8^th and 10^th issued in the name of the "Partenariat". Exhibit E to the same affidavit outlines the percentage of quota that was withheld and eventually released by the "Partenariat" to the individual fishers.

[36]            The evidence throughout clearly supports the contention that these applicants voluntarily undertook to provide certain payments based on their quota in an attempt to alleviate the difficulties encountered by seasonal workers. There is no doubt in my mind that officials of the Department of Fisheries and Oceans were instrumental in assisting in the negotiations and putting in place this agreement. The facts clearly indicate that part of the quota was being held back and that the monies paid to the "Partenariat" constituted an additional illegal levy or condition. There is ample uncontested evidence that it was not until the additional levy was paid that the held back 20% portion of the fishers' quota was then reallocated.

[37]            The respondent further alleges that there is no decision to be reviewed and that this application is premature.

[38]            In a news release dated April 10, 2001, the respondent Minister stated the following:

"Details of the 2001 Snow Crab Management Plan for Areas 12, 25, 26 - Southern Gulf of St. Lawrence

...

It is anticipated that the participants of the co-management approach will continue to respect their commitment to the industry-led initiative of the Solidarity Fund."

[39]            This release makes it very clear that the Plan was to be executed as in past years. There is no doubt in my mind that an integral part of the Plan for the 2001 snow crab fishing season provided for the holding back of quota in order to ensure payments to the "Fund".

[40]            It is again very clear from the evidence that on May 8^th and 10^th, 2001, the Minister had put into motion the Plan for the 2001 snow crab fishing season by issuing part of the quota to the "Partenariat". It is also evident that in May, 2001, the applicants made payments to the "Fund" in order to receive the quota that was being withheld. They completed the necessary forms in order for the quota to be reallocated. In particular, the "Formulaire de transfert temporaire" was completed by the applicants and was approved by an official of the Department of Fisheries and Oceans. I conclude that this application for judicial review is not in any way premature or speculative.

[41]            The respondent further asserts that the discretion of the Minister pursuant to the administrative scheme of the Act is very broad and that sections 7 of the Act and 22 of the Regulations vest the Minister with the authority to issue temporary licences to the "Partenariat" and in effect create valid conditional licences.

[42]            Section 7 of the Fisheries Act, R.S.C. 1985, c. F-14, states as follows:

[43]            There is evidence that licences for snow crab fishing were issued to the "Partenariat" who owned no fishing vessel and were not engaged in the fishing industry. Though the Minister has absolute discretion, it is specified that he may issue licences for fisheries or fishing, not for the purpose of assisting in setting up an unemployment benefit scheme and collecting additional levies. The Minister's conduct in this regards is not supported by any authority nor is it justified for any statutory purpose. The Fisheries Act is to protect and regulate fisheries and this was undoubtedly beyond the scope of the Minister's discretion.

[44]            In the case of Matthews v. Canada (Attorney General), [1999] F.C.J. No. 830, Mr. Justice Marceau, on behalf of the Court of Appeal, wrote the following:

"We agree with the learned motions judge that in exercising the power conferred on him by section 7 of the Fisheries Act [See note 1 below] to issue at his "absolute discretion" a fishing licence, the Minister of Fisheries and Oceans may not do it by attaching to the licence limitations or conditions, the sole purpose of which is to impose sanctions for the applicant's past behaviour. However largely expressed is the discretion given to the Minister to issue or not issue a licence, the qualifications that he may attach to a licence must necessarily be strictly aimed at furthering the objects for which his authority exists, namely the management of the fisheries and the conservation and protection of fish."

[45]            In the case at bar, I am satisfied that the Minister did not act in good faith. In Comeau Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1997] 1 S.C.R. 12, at page 8, Mr. Justice Major, on behalf of the Supreme Court of Canada, dealing with section 7 of the Fisheries Act wrote at paragraph 37:

"... Licensing is a tool in the arsenal of powers available to the Minister under the Fisheries Act to manage fisheries. It restricts the entry into the commercial fishery, it limits the numbers of fishermen, vessels, gear and other aspects of commercial fishery."

[46]            A regime established for the purpose of offering financial aid to seasonal employees for area fish plants who no longer qualify for employment insurance benefits is wholly unrelated to the issuance of leases or licences for the proper management and control of fisheries and conservation and protection of fish.

[47]            At the close of the hearing, counsel for the Minister of Fisheries and Oceans suggested that he wished to submit further arguments in writing which were forwarded to the Court in a letter dated May 24, 2001. This letter provides as follows:

"The authority for the Minister of Fisheries and Oceans to enter into the Joint Project Agreement and to deal with any monies received pursuant to the agreement is found in the general authority of a Minister to enter into a contract which binds the Crown and in Section 21(1) of the Financial Administration Act.

Authority for the first proposition is found in The Queen v. CAE Industries [1986] 1 F.C. 129 (FCA) at 165, where Stone, J., said:

I am satisfied that by its decision in Verreault the Supreme Court of Canada meant to depart from what had been regarded as the conventional legal wisdom, namely, that a minister of the Crown has no authority bo bind the Crown in contract unless the authority to do so exists under a statute or an order in council. I understand that case to hold that by the general rules of mandate including those of apparent mandate a minister of the Crown as head of a government department has the authority to bind the Crown in contract unless that authority is restricted by or pursuant to statute.

Section 21(1) of the Financial Administration Act states:

Money received for special purpose

21.(1) Money referred to in paragraph (d) of the definition "public money" in section 2 that is received by or on behalf of Her Majesty for a special purpose and paid into the Consolidated Revenue Fund may be paid out of the Consolidated Revenue Fund for that purpose, subject to any statute applicable thereto.

"Public money" is defined as:

all money belonging to Canada received or collected by the Receiver General or any other public officer in his official capacity or any person authorized to receive or collect such money, and includes:

(d) all money that is paid or received or collected by a public officer under or pursuant to any Act, trust, treaty, undertaking or contract, and is to be disbursed for a purpose specified in or pursuant to that Act, trust, treaty, undertaking or contract;"

[48]            In reply counsel for the applicants submits there is no evidence that any of the monies paid by the applicants have been transferred into the Consolidated Revenue Fund and that accordingly subsection 21(1) of the Financial Administration Act is not applicable in the instant case. Furthermore, throughout this dispute and throughout the application it was the Minister's position that he denied receiving any funds from the applicants. The reference to the decision of The Queen v. CAE Industries, [1986] 1 F.C. 129, is distinguishable. In the CAE Industries case, Cabinet had authorized ministers to sign on behalf of the government. There was no evidence in this instance that Cabinet ever approved or gave authority to the Joint Project Agreement.

[49]            As early as 1997 when proposed Bill C-62 died on the order paper the Minister had lost the discretion to negotiate such an agreement which involved the withholding of a percentage quota. This was well known by all concerned within the Department of Fisheries and Oceans. In the year 2000 the Auditor General of Canada expressed a great deal of concern and suggested that the Department was acting beyond the scope of its authority. All evidence supports the theory advanced by these applicants that there was a hold back of fishing quota until they paid their percentage share to the "Fund". There is no doubt in my mind that the Minister of Fisheries and Oceans acted beyond the scope of his authority when authorizing such a scheme and allowing the transfer to the "Partenariat".

[50]            I hereby declare the decision of the Minister to transfer 20% of the quota to the "Partenariat" is null and void and ultra vires his powers under the Fisheries Act. The decision is hereby set aside and the Minister is hereby prohibited from implementing the Plan.

[51]            In judicial review the awarding of costs is discretionary. In light of the circumstances of this application, I am prepared to entertain submissions by the applicants with respect to an award of costs. The applicants shall file and serve their submissions with respect to costs by August 1, 2001 and the respondents shall file and serve their reply by August 17, 2001.

[52]            With respect to the monies held in trust which I so ordered on May 22, 2001, I shall entertain submissions from both parties following the expiration of the appeal period.

     JUDGE

OTTAWA, Ontario

July 17, 2001