Larocque v. Canada (Minister of Fisheries and Oceans), 2005 FC 694

                                                                                                                                  Date: 20050516

                                                                                                                             Docket: T-1629-03

                                                                                                                        Citation: 2005 FC 694

BETWEEN:

                                                     JEAN-VICTOR LAROCQUE

                                                                                                                                            Applicant

                                                                           and

                              HER MAJESTY THE QUEEN IN RIGHT OF CANADA,

                                                               represented by the

                                         MINISTER OF FISHERIES AND OCEANS

                                                                                                                                        Respondent

                                                        REASONS FOR ORDER

de MONTIGNY J.

[1]                By means of judicial review, the applicant is seeking the cancellation of a scientific fishing licence issued by the Department of Fisheries and Oceans (the DFO) on the ground that the Minister exceeded his jurisdiction in allocating 50 metric tonnes (t) of snow crab in exchange for services rendered by the licence holder in connection with scientific research conducted by the DFO.

THE FACTS

[2]                The applicant, Jean-Victor Larocque, is the sole owner of Pêcheries J.V.L. Ltd., a company holding a snow crab licence. It would appear that, since 1990, snow crab fishers with the traditional fleet have voluntarily taken part in developing and implementing a number of snow crab conservation and protection measures with the DFO. In 1997, snow crab licence holders in Area 12 and the DFO entered into a co-management agreement, the terms of which included measures for conserving and protecting snow crab stocks. Area 12 covers a sector located on the west side of the Gulf of St. Lawrence and includes persons residing along the Gulf on the coasts of New Brunswick, Quebec and Newfoundland.

[3]                Despite the fact that the agreement was not renewed upon its expiry in 2001, the provisions of the agreement were followed in 2002, and crab fishers continued sharing the costs with the DFO as they had done over the years between 1997 and 2001, when the agreement was in force.

[4]                After the 2002 fishing season, the DFO entered into negotiations with the traditional fleet with a view to developing a new co-management approach. Negotiations broke down, and it would appear that the main reason for their failure was the DFO's expressed intention to increase the fishing effort by allocating a quota to lobster and groundfish fishers on a permanent basis. Traditional crab fishers opposed the idea of a new permanent sharing arrangement for snow crab, claiming that it would endanger the sustainability of the fishery and could lead to the collapse of stocks.

[5]                Given the breakdown in negotiations, on May 2, 2003, the DFO announced a three-year management plan for the snow crab fishery in the Gulf of St. Lawrence. The overall quota, which had been 22,000t in 2002, was reduced to 17,148t. There was no agreement between the DFO and the traditional fleets on management and conservation measures when this quota was set. On May 11, 2003, the DFO made an offer in writing to the fishers, indicating it was open to the idea of setting a higher total allowable catch (TAC), on the condition that a co-management agreement providing for scientific research and monitoring be implemented to ensure that conservation objectives would be met.

[6]                Although no such agreement could be reached, DFO representatives nevertheless concluded that it was important to continue conducting scientific research on the fishery to ensure its long-term viability. No one denies that the DFO on its own did not have the financial resources required to assume the costs of certain research activities, such as the operating expenses related to a trawl survey. This type of survey is particularly useful for assessing the biomass of stocks, and such surveys had been carried out since 1990.

[7]                Traditional snow crab fishers, too, acknowledged the usefulness of such scientific research and therefore decided to cover the costs of hiring a private research firm to carry out a trawl survey. On July 7, 2003, the firm applied to the DFO for a scientific fishing licence, but DFO officials decided that they needed more information before considering the licence application.

[8]                In the meantime, the DFO conducted an assessment of the operating costs of the trawl survey and estimated that 50 t of crab at the market price prevailing at that time would be sufficient to cover the operating costs of the licence holder eventually selected to carry out the survey. The decision to issue a scientific licence was made on June 20, 2003, by the Regional Director General, Gulf Region, on behalf of the DFO.

[9]                A public tendering process was used to decide who would receive the scientific licence. In a notice to fishers, dated July 23, 2003, the DFO described in the following terms the operation it was preparing to carry out:

The Department of Fisheries and Oceans (DFO) wishes to advise that it will be conducting a snow crab trawl and trap survey in 2003 in Snow Crab Fishing Areas 12, 18, 25 and 26. The survey will be carried out under the authority of the Fishery (General) Regulations and related licence, issued to a fisher who will be authorized to sell up to 50 t of legal-sized crab to cover the costs of the survey. The 50 t will be taken from within the existing TAC of 17,148t for 2003.

The objectives of the survey are to evaluate the condition of the stock, establish an abundance index, validate data from the fishery, compare the composition of the stock between the trap and trawl survey, and to study the biological cycle of snow crab and their seasonal migration (tagging of males and females). The information collected during the survey will be used for the stock assessment and management planning of the 2004 fishery. DFO intends to begin the survey shortly.

[10]            The selection criteria that accompanied the notice described the work to be carried out in the following manner:

Part A: Trap survey

To conduct a trap survey with transects in two locations predetermined in the southwestern Gulf of St. Lawrence (portion of Area 12, Areas 25, 26 and 18) by following a scientific protocol established by the Department of Fisheries and Oceans (DFO) Canada. The trap survey will enable DFO Oceans and Science representatives to collect information to assess snow crab stocks and to conduct biological analysis on the life cycle and seasonal movement of snow crab in the southwestern Gulf of St. Lawrence.

Part B: Trawl survey

To successfully complete one trawl tow per station at 230 stations predetermined by DFO, by following a scientific protocol established by DFO, using a 20-meter [sic] Nephrops trawl provided by DFO, to enable Department of Fisheries and Oceans representatives to gather information needed to assess stock conditions in the southwestern Gulf of St. Lawrence (portion of Area 12, Areas 25, 26 and 18).

[11]            The scientific fishing licence was issued on August 7, 2003, after the end of the fishing season. The amount of snow crab harvested that season was 300t under the TAC.

[12]            The present application for judicial review was filed on September 5, 2003. The application seeks a declaration to the effect that the Minister exceeded his jurisdiction and acted unlawfully in deciding to issue a scientific fishing licence in exchange for a 50-t allocation of snow crab. By implication, the applicant is also seeking a declaration setting aside the Minister's decision and prohibiting the issuance in future of any scientific licence in exchange for an allocation of any species covered by the Fisheries Act (the Act).

THE ISSUES

[13]            Essentially, the issue to be decided in this application for judicial review is whether the Minister, when issuing a scientific fishing licence, may use a portion of the resources he manages to fund certain activities of the DFO.

[14]            In his factum, the applicant also raised two other issues, namely: (1) whether the Minister abused his authority or acted contrary to the principles of natural justice with respect to the conditions set in the call for tenders; and (2) whether the decision made by a DFO official to allocate 50 t of snow crab in exchange for services requested by the DFO constituted an unlawful delegation of ministerial authority.

[15]            The respondent objected to the inclusion of these two issues on the ground that they were not raised in the notice of application for judicial review. At the hearing, the applicant abandoned the second issue. The third issue was not argued by counsel for the applicant, so I will address it in a very summary fashion in my analysis.

ARGUMENTS OF THE PARTIES

[16]            While he concedes that the Act gives the Minister considerable discretion with respect to issuing fishing licences, the applicant submits that this discretion does not extend so far as to allows the Minister to use the resource to finance scientific research. The discretion granted to the Minister under section 7 of the Act and section 52 of the Fishery (General) Regulations (the Regulations) allows the Minister to issue fishing licences for the sole purpose of managing fisheries. In other words, the Minister may only issue licences to allow fishing activities while ensuring that such activities are controlled so as to avoid compromising the protection and conservation of stocks.

[17]            By acting as he did, the Minister allegedly dressed up a service contract as a scientific fishing licence, which goes beyond the powers granted to him under the Act and the Regulations. It is incumbent on the Treasury Board to allocate the necessary funds to the DFO to finance its activities. The DFO's funding shortfall cannot be remedied by using the resources that the Department has a mandate to protect.

[18]            The applicant also relied on this Court's decision in Aucoin v. Canada (Minister of Fisheries and Oceans), [2002] F.C.J. No. 1157 (QL). This case dealt with the lawfulness of the DFO's decision to impose a levy on the holders of traditional snow crab fishing licences in addition to the required license fees. The additional levy was to be used to fund job creation projects for crab processing plant workers who had been laid off. Rouleau J. concluded that a scheme aimed at giving financial assistance to seasonal employees of fish processing plants who were not entitled to Employment Insurance benefits was ultra vires the Minister.

[19]            Counsel for the DFO, meanwhile, submits that the true questions to be answered are the following: (1) whether the fishing for scientific purposes provided for under the licence in dispute is in accordance with the proper management and control of fisheries; (2) whether the Minister's decision is in accordance with his duty to manage, conserve and develop fisheries on behalf of Canadians in the public interest; and (3) whether the Minister based his decision on relevant considerations, avoided arbitrariness and acted in good faith.

[20]            Relying on the case law, which holds that the Minister must use his authority to issue licences with a view to managing, conserving and developing fisheries on behalf of Canadians in the public interest, the respondent argues that scientific research activities aimed at assessing stocks are well within the scope of this objective. Consequently, the trawl survey, an important part of the licence in dispute, was completely in accordance with the proper management and control of fisheries.

[21]            With regard to whether the licence in dispute is somehow a veiled means of funding the DFO's activities, the respondent replies that, first of all, the DFO has no specific duty to conduct trawl surveys, and that it is therefore incorrect to argue that the licence was issued for the purpose of enabling the DFO to carry out an essential duty or activity prescribed by the Act. Second, counsel for the DFO added that the crab allocation was not intended to give the licence holder a profit; rather, it was to provide the licence holder with adequate compensation for operating expenses, including the skipper's wages. The allocation was therefore not a dominant purpose of the licence; it was merely accessory to it. Insofar as the main objective of the licence was to conduct scientific research, the Minister must therefore have acted within the scope of the powers conferred upon him by the Act.

RELEVANT STATUTORY PROVISIONS

[22]            The resolution of this application for judicial review lies in the application of the following statutory and regulatory provisions:

ANALYSIS

[23]            The argument advanced by the applicant in his written and oral submissions is based on two governing ideas. First, the scientific fishing licence issued by the DFO on August 7, 2003, constitutes a veiled service contract, in that its essential aim is to compensate the licence holder for duties that the Minister must carry out under the Act. Insofar as this compensation takes the form of a resource allocation, it is argued that it is ultra vires the powers delegated to the Minister, since he has no authority to use the resources he manages to fund his activities.

[24]            To assess the merit of these claims, we must consider the relevant statutory and regulatory provisions. It is agreed by all that the source of the Minister's authority to issue fishing licences lies in section 7 of the Act. This power is prima facie a discretionary one and confers no rights upon fishing licence applicants. Nevertheless, it is trite law that a discretionary power is not without limits and must not open the door to arbitrariness. Discretion must be exercised in accordance with the principles of natural justice and the objectives set by the Act.

[25]            In the more specific case of fishing licences for experimental or scientific purposes, section 52 of the Regulations takes up this idea, stating that the Minister may issue licences for such fishing if it "would be in keeping with the proper management and control of fisheries". Thus, the question that must be answered is whether the Minister acted in keeping with the purposes set out in the Act and the Regulations by issuing the licence at issue in these proceedings.

[26]            A simple reading of the description of the work to be carried out and the objectives set (reproduced above) is sufficient to conclude that the licence was issued for the purposes of assessing snow crab stocks and ensuring that those stocks are conserved and responsibly harvested. I do not see how the applicant could contest this observation, given that traditional snow crab fishers themselves retained the services of a specialized firm to obtain a fishing licence for similar surveys.

[27]            It is therefore not the lawfulness of the activity itself that is contested, but rather the means of financing it. By allowing the licence holder to keep and sell 50 t of crab, it is alleged that the fishing licence is transformed into a service contract, since issuing the licence would for all intents and purposes be no more than a veiled means of funding the DFO's activities.

[28]            I have difficulty accepting that the decision to allocate 50 t of crab to the licence holder instead of paying the holder from the DFO's budgets is sufficient to transform the licence into a service contract. On the contrary, I think the means of compensating the licence holder for his or her contribution to the DFO's scientific analyses is purely accessory to the true object of the licence.

[29]            The situation could have been regarded differently if it had been proven that the crab allocation granted to the licence holder resulted in significant net profits. In such a case, the scientific character of the activities authorized under the licence could have been called into question. In the case at bar, the DFO submitted that the proceeds of the sale of 50 t of crab would merely cover the operating expenses of the licence holder. Although the applicant expressed doubt about this assertion, I find the assessment completely realistic, given the requirements set out in the call for tenders.

[30]            I note in passing that section 35 of the Regulations appears to explicitly provide for the possibility of selling fish caught under the authority of a scientific fishing licence. The commercial nature alone of this activity is not sufficient to change the character of the licence. What matters is the primary nature of the activities for which the licence was issued, not the accessory aspects.

[31]            In short, unless the Act were to prohibit the Minister from allocating a snow crab quota to a fisher in exchange for surveys carried out on behalf of the DFO for scientific purposes, I see nothing in the licence itself that would render its issuance unlawful or ultra vires.

[32]            Since the Act is silent on this, we must look to the spirit of the Act to try to determine what considerations are relevant to the Minister's decision to issue fishing licences. As we have seen in the preceding, discretion is never absolute and must always be exercised in light of Parliament's objectives.

[33]            Comeau's Sea Foods v. Canada (Minister of Fisheries and Oceans), [1997] 1 S.C.R. 12 provides an excellent illustration of this principle in a fisheries context and brings much needed clarification with regard to the factors guiding the Minister in the exercise of his powers under the Act. The Supreme Court was asked to decide if the DFO could revoke an authorization to issue a fishing licence after the authorization had been given but before the actual licence had been issued. The Court had to consider the scope of the Minister's discretion under section 7 of the Act. Writing on behalf of the Court, Major J. stated the following (at paragraphs 36-37):

It is my opinion that the Minister's discretion under s. 7 to authorize the issuance of licences, like the Minister's discretion to issue licences, is restricted only by the requirement of natural justice, no regulations currently being applicable. The Minister is bound to base his or her decision on relevant considerations, avoid arbitrariness and act in good faith. The result is an administrative scheme based primarily on the discretion of the Minister . . . .

This interpretation of the breadth of the Minister's discretion is consonant with the overall policy of the Fisheries Act. Canada's fisheries are a "common property resource", belonging to all the people of Canada. Under the Fisheries Act, it is the Minister's duty to manage, conserve and develop the fishery on behalf of Canadians in the public interest (s. 43). 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. [Emphasis added.]

[34]            The question that must be asked is whether the Minister, in deciding to issue a licence allowing a fisher to keep 50 t of snow crab to cover the operating costs of taking part in DFO-sponsored scientific activities, was motivated by his duty to "manage, conserve and develop the fishery on behalf of Canadians in the public interest". Put in these terms, the question must be answered in the affirmative.

[35]            There is no doubt that the purpose of the surveys carried out by the licence holder is to assess the state of stocks, establish an abundance index, validate data on the fishery, and study the life cycle and seasonal migration of the snow crab. Moreover, the evidence indicates that such surveys have been carried out for 15 years, and at no time did the applicant contest the usefulness of such activities.

[36]            We are therefore far from the situation brought to this Court's attention in Aucoin. In that case, to which reference has already been made at paragraph 18 of these reasons for judgment, the Minister had allocated 20 percent of each fisher's traditional quota to a non-profit corporation, Partenariat du crabe des neiges Inc. (the Partenariat), which neither owned nor operated any fishing boats or engaged in fishing activities. Upon payment by each fisher to the Partenariat of a sum of money based on the fisher's total per-pound quota, the Partenariat would then notify the DFO that the fisher in question had paid the sum owing on his or her per-pound catch. Upon this notification, DFO officials would release the withheld 20 percent of the fisher's quota.

[37]            Asked to rule on the validity of the program, Rouleau J. wrote the following:

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.

. . . .

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. (paragraphs 43 and 46)

[38]            This passage clearly shows that the problem in this case was not the mechanism put in place to finance the Partenariat, but rather the very objective of this organization, whose funding came from levies on fishing licences. The situation is very different in the case at bar. There is no question that the DFO's objectives here are legitimate and in keeping with spirit of the Act. This creative solution designed to remedy a lack of funds available to the DFO does not vitiate the lawfulness of the objective or the chosen means for achieving it. I have even less difficulty arriving at this conclusion, knowing that the contested term of the fishing licence, the allocation of 50 t of snow crab, represents only a tiny fraction of the total allowable catch, which, moreover, was not reached that year.

[39]            With regard to the unlawful sub-delegation argument, for the following reasons, I believe it must fail. Subsection 24(2) of the Interpretation Act (R.S.C. 1985, c. I-21) explicitly states that "[w]ords directing or empowering a minister of the Crown to do an act or thing, regardless of whether the act or thing is administrative, legislative or judicial, or otherwise applying to that minister as the holder of the office, include . . . (d) notwithstanding paragraph (c), a person appointed to serve, in the department or ministry of state over which the minister presides, in a capacity appropriate to the doing of the act or thing, or to the words so applying".

[40]            Issuing a licence and setting the related terms and conditions are clearly administrative acts. The case law has on numerous occasions recognized that the sub-delegation of such powers is implicitly permitted, given that ministers cannot personally consider every application for every licence that the applicable legislation authorizes them to issue (see for example Ahmad v. Public Service Commission, [1974] 2 F.C. 644; [1977] S.C.R. 238">The Queen v. Harrison, [1977] S.C.R. 238).

[41]            For these reasons, I conclude that the application for judicial review must be dismissed.

                                                                                                                             "Yves de Montigny"          

Judge

Certified true translation

Michael Palles

                                                             FEDERAL COURT

                                                      SOLICITORS OF RECORD

DOCKET:                                           T-1629-03

STYLE OF CAUSE:             JEAN-VICTOR LAROCQUE v. HER MAJESTY THE QUEEN IN RIGHT OF CANADA, represented by the MINISTER OF FISHERIES AND OCEANS

PLACE OF HEARING:                     Fredericton, New Brunswick

DATE OF HEARING:                       April 13, 2005

REASONS FOR ORDER BY:                      The Honourable Mr. Justice de Montigny

DATED:                                              May 16, 2005

APPEARANCES:

Brigitte Sivret                                                                                                  FOR THE APPLICANT

Ginette Mazerolle                                                                                        FOR THE RESPONDENT

SOLICITORS OF RECORD:

McInnes Cooper

Moncton, New Brunswick                                                                              FOR THE APPLICANT

John H. Sims, Q.C.

Deputy Attorney General of Canada

Ottawa, Ontario                                                                                          FOR THE RESPONDENT