2016 FC 1159, 2016 FC 1159

[2017] 2 F.C.R. 74 T-1271-07 2016 FC 1159 Roland Anglehart Jr. et al. ( Plaintiffs ) v. Her Majesty the Queen in Right of Canada ( Defendant ) Indexed as: Anglehart v. Canada Federal Court, Gagné J.—Montréal, January 18, 19, 20, 21, 25, 26, 27, 28, February 1, 2, 3, 8, 9, 10, 15, 16, 17, 22, 23, 24, 29, March 1, 2, 7, 8, May 2, 3, 4, 5, 6, 9, 10, and 11; Ottawa, October 19, 2016.

Fisheries — Action by plaintiffs suing respondent for actions performed by Minister of Fisheries and Oceans (Minister), Fisheries and Oceans Canada officials (DFO) from 2003 to 2006, which allegedly reduced plaintiffs’ individual quota (IQ) of snow crab by 35 percent — Plaintiffs members of traditional mid-shore fleet of crab fishers in Area 12 in Southern Gulf of St.

Lawrence –– Snow crab fishery regulated since 1975 — Plaintiffs asking defendant be ordered to pay them, inter alia, compensation for loss of profits — Plaintiffs alleging three main causes of action: expropriation, unjust enrichment, misfeasance in public office by Minister, DFO officials — Issues: what was nature of plaintiffs’ rights; whether plaintiffs having legitimate expectations; whether plaintiffs’ causes of action should be allowed — When fishery went from being competitive fishery to being IQ fishery, Minister not granting plaintiffs actual quasi-property right in IQ assigned to each of them — Canada’s fisheries common property resource — IQ policy not giving plaintiffs vested right to renew subject to predetermined conditions or vested right to predetermined quantity of fish — Minister having broadest discretion to issue fishing licences — Policies not immutable, not creating legitimate expectation — Regarding expropriation, plaintiffs not owning IQs assigned thereto by DFO policy — Other obstacles existing preventing plaintiffs from bringing expropriation action in present context — Thus, plaintiffs failing to establish expropriation — As to unjust enrichment, plaintiffs not establishing being impoverished, any enrichment on part of DFO — DFO simply reallocating snow crab resource or merely managing it or using resource to fund management activities — Tort of misfeasance in public office also examined — Despite unlawful nature of financing agreements concluded between DFO, certain fisheries associations, DFO’s actions not causing plaintiffs any harm — However, plaintiffs’ argument that DFO committed tort of misfeasance in public office by reducing 2003 TAC by 4,000 mt to force plaintiffs to pay DFO $1.7 million to finance research activities accepted — Reduction without justification, attempts to find explanation ex post facto, Minister’s reaction regarding questions media asking after 2003 fishing plan released satisfactorily showing that only reason Minister reducing TAC in 2003 was to force traditional crabbers to resume negotiations potentially leading to joint project agreement — In doing so, Minister acting in bad faith, particularly in context of all changes choosing to make to DFO policies that same year — Minister exercising discretion by relying on considerations irrelevant, capricious or foreign to purpose of statute — Therefore, Minster committing tort of misfeasance in public office causing injury to plaintiffs for which entitled to compensation — Action allowed in part.

Crown — Torts — Misfeasance in public office — Plaintiffs suing respondent for actions performed by Minister of Fisheries and Oceans (Minister), Fisheries and Oceans Canada officials (DFO) from 2003 to 2006 allegedly reducing plaintiffs’ individual quota (IQ) of snow crab — Plaintiffs alleging three main causes of action: expropriation, unjust enrichment, misfeasance in public office by Minister, DFO officials — Regarding expropriation, plaintiffs not owning IQs assigned thereto by DFO policy — Other obstacles existing preventing plaintiffs from bringing expropriation action in present context — Thus, plaintiffs failing to establish expropriation — As to unjust enrichment, plaintiffs not establishing being impoverished, any enrichment on part of DFO — DFO simply reallocating snow crab resource or merely managing it or using resource to fund management activities — However, plaintiffs’ argument DFO committing tort of misfeasance in public office by reducing 2003 TAC by 4,000 mt to force plaintiffs to pay DFO $1.7 million to finance research activities accepted — Reduction without justification, attempts to find explanation ex post facto, Minister’s reaction regarding questions media asking after 2003 fishing plan released satisfactorily showing that only reason Minister reducing TAC in 2003 was to force traditional crabbers to resume negotiations potentially leading to joint project agreement — In doing so, Minister acting in bad faith, particularly in context of all changes choosing to make to DFO policies that same year — Minister exercising discretion by relying on considerations irrelevant, capricious or foreign to purpose of statute — Therefore, Minster committing tort of misfeasance in public office causing injury to plaintiffs for which entitled to compensation.

This was an action by the plaintiffs suing the respondent for actions performed by the Minister of Fisheries and Oceans (Minister) and by Fisheries and Oceans Canada officials (DFO) from 2003 to 2006, which allegedly reduced the plaintiffs’ individual quota (IQ) of snow crab by 35 percent. The plaintiffs are 97 of the 130 members of the traditional mid-shore fleet of crab fishers in Area 12 in the Southern Gulf of St. Lawrence who fished under the limited entry regime and were subsequently assigned an IQ. They are residents of New Brunswick, Quebec, Nova Scotia and Prince Edward Island.

The snow crab fishery has been regulated since 1975 first under a limited entry regime and later under the IQ regime. Starting in 1984, DFO set an annual total allowable catch (TAC), which it announced at the start of each fishing season. Over the years, a number of agreements and arrangements were made between crab fishers and the DFO. In 2003, a Three-Year Snow Crab Management Plan for the Southern Gulf was announced and implemented despite strong protests by fishers.

As well, in 2003 and 2004, since there was no joint project agreement between DFO and crab fishers, DFO decided to use part of the TAC to fund certain of its activities. In their action, the plaintiffs were asking the defendant to be ordered to pay them, inter alia , compensation for the loss of profits experienced in 2003, 2004, 2005, 2006, 2007 and 2008 on the grounds of acts by DFO; compensation for the drop in value of the plaintiffs’ fishery enterprises; and restitution of the value of benefits appropriated by DFO to the plaintiffs’ detriment.

Essentially, the plaintiffs were alleging three main causes of action: expropriation, unjust enrichment and misfeasance in public office on the part of the Minister and DFO officials. The plaintiffs attempted to persuade the Court that a fishing licence is property that confers on its holder a property or quasi-property right in the IQ associated with it; that their rights vested in 1990 when the competitive fishery was transformed into an IQ fishery; and that a quasi-property right in their IQs was conferred on traditional crabbers. The defendant in turn argued in

particular that the plaintiffs’ snow crab licences do not entitle them to a predetermined portion of the TAC apart from what is granted to them by licence condition for a given year; that fisheries are a common property resource; and that the Minister cannot abdicate his discretion to manage Canada’s fisheries to issue commercial fishing licences for each fishery. At issue was the nature of the plaintiffs’ rights; whether they had legitimate expectations; and whether the three causes of action the plaintiffs referred to—expropriation, unjust enrichment and misfeasance in public office—should be allowed.

Held , the action should be allowed in part. When the fishery went from being a competitive fishery to being an IQ fishery, the Minister did not grant the plaintiffs an actual quasi- property right in the IQ assigned to each of them. Canada’s fisheries are a common property resource. Also, there is a distinction between a limited-entry policy and the granting of a quasi-property right in this resource.

While a DFO policy may favour the plaintiffs in that it provides for exclusive access to the snow crab fishery, this policy is a simple management measure that does not grant the plaintiffs any property rights in the resource or any vested right to any portion of the TAC. As to the nature of the rights under a fishing licence, while the evidence unequivocally showed that after the adoption of the IQ policy the plaintiffs’ licences were renewed year after year, that did not give them a vested right to renew subject to predetermined conditions or a vested right to a predetermined quantity of fish.

The Minister has the broadest discretion to issue the fishing licences. Regarding the plaintiffs’ argument that the implementation of a policy in favour of a small group of fishers for issuing renewable IQ licences created a legitimate expectation on their part that the Minister would never unilaterally add new licence holders, policies are not immutable. In order for the Minister to be able to retain his broad discretion to manage fisheries, it must be possible to amend them as needed and they cannot give rise to a right for the plaintiffs.

Furthermore, expectations, however legitimate, cannot generate or create substantive rights or form the basis for an action in damages. The evidence showed that the plaintiffs did not have a legitimate expectation that the Minister would never issue new Area 12 snow crab licences but rather that they knew that it was a real possibility and that their fear of this happening influenced some of the decisions they made. Therefore, they had no real expectations whether legitimate or not in this regard. The first cause of action, expropriation, was dealt with.

In arguing that the Minister expropriated 35 percent of their IQs after 2003 and that they were entitled to compensation, the plaintiffs had to show that the Crown unilaterally took their private property for public purposes. However, the plaintiffs do not own the IQs that were assigned to them by a DFO policy.

Even though they view them as valuable assets capable of being the subject of a transaction, their rights in these IQs are precarious and the value of their licences depends on the annual biomass, market price and the Minister’s discretion whether to issue new licences or share the resource with other fishers.

Moreover, there were a number of additional obstacles that prevented the plaintiffs from bringing an expropriation action in the present context, such as a complete denial of any use of the property at issue, which was not the case in this matter since the plaintiffs were only partially denied use of the portion of the TAC set aside for them after 1990. Also, concerning the Minister’s power to reallocate a portion of the TAC to an IQ fishery, the Minister may at any time favour one group of fishers over another and may also make changes to his own policies at any time.

Therefore, the plaintiffs failed to establish expropriation and their first cause of action was dismissed. As to the second cause of action, unjust enrichment, the plaintiffs argued in particular that the facts in evidence showed that the defendant unjustly enriched itself at their expense and that they were entitled to be indemnified for their correlative impoverishment.

They submitted that the defendant did this by using the snow crab resource to fund DFO activities or to fund rationalization programs for the lobster and groundfish fisheries or to enable DFO to fulfil its obligations involving giving First Nations access to the commercial snow crab fishery. However, the plaintiffs did not establish any enrichment on the part of DFO. DFO simply reallocated the snow crab resource or merely managed it or used the resource to fund its management activities. Nor were the plaintiffs impoverished.

Since they were not entitled to a predetermined share of the TAC, there could be no unjustified transfer. Therefore, the DFO did not take anything that belonged to the plaintiffs who also suffered no deprivation as a result. The third cause of action, the tort of misfeasance in public office, was also examined.

Although it was established that, through various agreements entered into from 2003 to 2006 to obtain financing for its management and research activities, DFO overstepped its management authority by illegally appropriating or selling fishery resources belonging to Canadians, the unlawful nature of these financing agreements concluded between DFO and certain fisheries associations did not cause any harm to the plaintiffs. Therefore, the plaintiffs failed to demonstrate misfeasance in public office in this regard.

However, the plaintiffs’ argument that DFO committed the tort of misfeasance in public office by reducing the 2003 TAC by 4,000 mt in an artificial and arbitrary manner to force the plaintiffs to pay it an amount of $1.7 million to finance its research activities was accepted.

The reduction without justification, the attempts to find an explanation ex post facto , and the Minister’s reaction regarding questions he was asked by journalists after the 2003 fishing plan was released satisfactorily showed that the only reason the Minister reduced the TAC by 4 289 mt in 2003 was to force traditional crabbers to resume negotiations that could lead to a joint project agreement. In doing so, the Minister acted in bad faith, particularly in the context of all of the changes he chose to make to DFO policies that same year.

He exercised his discretion by relying on considerations that were irrelevant, capricious or foreign to the purpose of the statute. Therefore, the Minster committed a Category A tort, which caused the plaintiffs harm compensable in law, namely the missing 4 289 mt share that the 2003 fishing plan allotted them based on their respective IQ. In conclusion, DFO committed the tort of misfeasance in public office for which the defendant was liable by reducing the TAC from 21 437 mt to 17 148 mt in 2003 thereby causing injury to the plaintiffs for which they were entitled to compensation.

STATUTES AND REGULATIONS CITED Bankruptcy and Insolvency Act , R.S.C., 1985, c. B-3, s. 2. Bill C-62,

An Act respecting fisheries , 35th Parl., 2nd Sess., 1996.

Bill C-115,

An Act respecting fisheries, 35th Parl., 1st Sess., 1994. Charter of Ville de Québec, R.S.Q., c. C-11.5. Criminal Code, R.S.C., 1985, c. C-46. Federal Courts Rules, SOR/98-106, r. 400(3). Financial Administration Act, R.S.C., 1985, c. F-11. Fisheries Act, R.S.C., 1985, c. F-14, ss. 7, 8, 10, 43(1),(f),(g). Fishery (General) Regulations, SOR/93-53, ss. 2 “document”, 10, 16, 22(a),(g). Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 248(1). Mineral Act, S.B.C. 1977, c. 54. Personal Property Security Act, S.N.S. 1995-96, c. 13. CASES CITED APPLIED: Canada (Attorney General) v. Arsenault, 2009 FCA 300, 1 Admin.

L.R. (5th) 91; Taylor v. Dairy Farmers of Nova Scotia, 2010 NSSC436, 298 N.S.R. (2d) 116, affd 2012 NSCA 1, 311 N.S.R. (2d) 300; Malcolm v. Canada (Fisheries and Oceans), 2013 FC 363, affd 2014FCA 130, 76 Admin. L.R. (5th) 179; Pacific National Investments Ltd. v. Victoria (City), 2004 SCC 75, [2004] 3 S.C.R. 575; Garland v.Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629; Larocque v. Canada (Minister of Fisheries and Oceans), 2006 FCA 237, 270D.L.R. (4th) 552; Canada (Attorney General) v. Chiasson, 2009 FCA 299, 314 D.L.R. (4th) 512, revg 2008 FC 616, 295 D.L.R. (4th)744. DISTINGUISHED: Saulnier v.

Royal Bank of Canada, 2008 SCC 58, [2008] 3 S.C.R. 166; Manitoba Fisheries Ltd. v. The Queen, (SCC),[1979] 1 S.C.R. 101, (1978), 88 D.L.R. (3d) 462; R. in right of the Province of British Columbia v. Tener et al., (SCC),[1985] 1 S.C.R. 533, (1985), 17 D.L.R. (4th) 1; Rock Resources Inc. v. British Columbia, 2003 BCCA 324, 229 D.L.R. (4th) 115;Beaurivage v. Québec (Ville), (Que. C.A.); Peel (Regional Municipality) v. Canada; Peel (Regional Municipality) v.Ontario, (SCC), [1992] 3 S.C.R. 762, (1992), 98 D.L.R. (4th) 140. CONSIDERED: R. v. Marshall, (SCC), [1999] 3 R.C.S. 456, (1999), 178 N.S.R. (2d) 201; Canada v.

Haché, 2011 FCA 104, [2011] 5C.T.C. 37, revg 2010 TCC 10, 2010 D.T.C. 1042; Kimoto v. Canada (Attorney General), 2011 FCA 291, 32 Admin. L.R. (5th) 184;Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), (SCC), [1997] 1 S.C.R. 12, (1997), 142D.L.R. (4th) 193; De Keyser’s Royal Hotel Ltd, (Re), [1920] UKHL 1 (BAILII), [1920] A.C. 508; Peter v. Beblow, (SCC), [1993] 1 S.C.R. 980, (1993), 101 D.L.R. (4th) 621; Finney v. Barreau du Québec, 2004 SCC 36, [2004] 2 S.C.R. 17; EntreprisesSibeca Inc. v. Frelighsburg (Municipality), 2004 SCC 61, [2004] 3 S.C.R. 304; Paradis Honey Ltd. v.

Canada, 2015 FCA 89, [2016] 1F.C.R. 446; Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263; Foschia v. Conseil des Écoles Catholique de LangueFrançaise du Centre-Est, 2009 ONCA 499, 266 O.A.C. 17; Roncarelli v. Duplessis, (SCC), [1959] S.C.R. 121, (1959),16 D.L.R. (2d) 689. REFERRED TO: Maple Lodge Farms Ltd. v. Canada, (SCC), [1982] 2 S.C.R. 2, (1982), 137 D.L.R. (3d) 558; Molaison v. Canada(1993), 73 F.T.R. 253 (F.C.T.D.); Carpenter Fishing Corp. v. Canada, (FCA), [1998] 2 F.C. 548 (C.A.), (1998),155 D.L.R. (4th) 572; Association des crevettiers acadiens du Golfe Inc. v.

Canada (Attorney General), 2011 FC 305, 385 F.T.R. 302;Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559; Canada (Attorney General) v.Mavi, 2011 SCC 30, [2011] 2 S.C.R. 504; Canada v. South Yukon Forest Corporation, 2012 FCA 165, 4 B.L.R. (5th) 31; CanadianPacific Railway Co. v. Vancouver (City), 2006 SCC 5, [2006] 1 S.C.R. 227; A and L Investments Ltd. v. Ontario, , 36O.R. (3d) 127 (C.A.); Granite Power Corp. v. Ontario, , 72 O.R. (3d) 194 (C.A.); Dennis v. Canada, 2013 FC 1197,affd 2014 FCA 232, leave to appeal to S.C.C. refused, [2015] 1 S.C.R. vi; Air Canada v.

British Columbia, (SCC),[1989] 1 S.C.R. 1161, (1989), 59 D.L.R. (4th) 161; Association des crabiers acadiens v. Canada (Attorney General), 2006 FC 1241, 301F.T.R. 297; Cheticamp Fisheries Co-Operative Ltd. v. Canada (1994), (NS SC), 118 D.L.R. (4th) 428, [1994] N.S.J.No. 356 (S.C.) (QL); Aucoin v. The Queen, 2001 FCT 800, 208 F.T.R. 178; Professional Institute of the Public Service of Canada v.Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660; Three Rivers District Council and Others v. Governor and Company ofthe Bank of England, [2000] UKHL 33 (BAILII), [2000] 3 All E.R. 1.

AUTHORS CITED Brown, R. “‘Takins’: Government Liability to Compensate for Forcibly Acquired Property” in K. Horsman and G. Morley. GovernmentLiability: Law and Practice, loose-leaf. Toronto: Canada Law Book, 2013. Canada. Task Force on Atlantic Fisheries. Navigating Troubled Waters: A New Policy for the Atlantic Fisheries: Highlights andRecommendations: Report of the Task Force on Atlantic Fisheries. Ottawa: The Task Force, 1982.

ACTION by the plaintiffs suing the respondent for actions performed by the Minister of Fisheries and Oceans and by Fisheries and Oceans Canada officials from 2003 to 2006, which allegedly reduced the plaintiffs’ individual quota of snow crab by 35 percent. Action allowed in part. APPEARANCES Patrick Ferland and David Quesnel for plaintiffs. Paul Marquis , Édith Campbell and Toni Abi Nasr for defendant. SOLICITORS OF RECORD LCM Attorneys , Montréal, for plaintiffs. Deputy Attorney General of Canada for defendant. Table of Contents Paragraph I. Overview 1 II.

Background and history 5 A. 1975—Change from an unregulated fishery to a limited entry fishery 5 B. 1990—Change from a limited entry fishery to an IQ regime 11 C. Crisis in the groundfish and lobster fisheries—temporary wealth and resource sharing 22 D. The Marshall decision 49 E. Urgent demands from Area 18 crab fishers 60 F. New permanent access 66 G. The negotiations leading to the 2003 fishing plan 68 H. The 2003 fishing plan 81 I. The use of part of the TAC to fund DFO activities 87 J. The legal proceedings 91 III. Issues and remedies sought in this phase of the case 92 IV. Analysis 97 A.

Preliminary issue: Objection to the filing of the Crown’s notice of appeal in Haché v. The Queen , 2006-3736(IT)G (Exhibit 601) and of Appendix A of the outline of the plaintiffs’ submissions in Canada v. Haché , A-44-10 (Exhibit 615) 97 B. Nature of the rights and interests alleged by the plaintiffs underlying each cause of action 101

(1) Parties’ positions 101

(2) Relevant legislation 106

(3) Saulnier and Haché 107

(4) Nature of the rights under a fishing licence 116

(5) Plaintiffs’ legitimate expectations 123 C. First cause of action: Expropriation 147 D. Second cause of action: Unjust enrichment 164

(1) Applicable law 164

(2) Enrichment of DFO 170

(3) Impoverishment of plaintiffs 180

(4) The absence of juristic reason for the enrichment 186 E. Third cause of action: Misfeasance in public office 189

(1) Components of the tort 195

(2) Financing of DFO’s activities from 2003 to 2006 200

(3) Financing rationalization programs for other fisheries 205

(4) Share of the TAC allotted to fishers in area 18 213 (5) 4000 mt reduction in TAC in 2003 225

(6) Release signed in 2006 254 F. Conclusion 257 The following is the English version of the reasons for judgment and judgment rendered by Gagné J.: I. Overview [ 1 ] To the delight of seafood lovers, the commercial snow crab fishery has been operating in the Southern Gulf of St. Lawrence since the 1960s, and it is doing well. This fishery has been regulated since 1975, first under a limited entry regime and later under an individual quota (IQ) regime.

[ 2 ] The plaintiffs are 97 of the 130 members of the traditional mid-shore fleet of crab fishers in Area 12 in the Southern Gulf of St. Lawrence—or their assigns or management companies, as applicable—who fished under the limited entry regime and were subsequently assigned an IQ.

They are residents of New Brunswick, Quebec, Nova Scotia, and Prince Edward Island. [ 3 ] They are suing Her Majesty the Queen in Right of Canada for actions performed by the Minister of Fisheries and Oceans (the Minister) and by Fisheries and Oceans Canada officials (DFO) from 2003 to 2006, which allegedly reduced their IQ by 35 percent. [ 4 ] Under a July 23, 2008, order rendered by Richard Morneau, Prothonotary, the proceedings were divided into two phases; the first will examine the general issues involving all plaintiffs, and the second will examine issues pertaining to each of the plaintiffs individually.

I am examining the first of these two phases, and I must rule on the nature of the plaintiffs’ rights, on whether they have legitimate expectations, and on the three causes of action the plaintiffs refer to: expropriation, unjust enrichment, and misfeasance in public office. II. Background and history A. 1975—Change from an unregulated fishery to a limited entry fishery [ 5 ] The first recorded snow crab landings in the Southern Gulf of St. Lawrence occurred in the 1960s. Until 1975, this fishery was open to all and subject to very few constraints.

Commercial snow crab harvesters had no quotas, and the fishery at the time was a so- called competitive fishery, meaning that every fisher attempted to catch as much crab as possible before the end of the fishing season. [ 6 ] In November 1973, the Department of the Environment, which was responsible for fisheries and ocean sciences at the time, announced the adoption of a limited entry regime for the snow crab fishery in the Southern Gulf of St. Lawrence.

A snow crab advisory committee was established, made up of fishers, producers (or processing plant owners), federal officials, and provincial officials from the affected provinces. The first meeting took place in May 1974.

When the limited entry regime came into effect in 1975, the minister implemented the advisory committee’s recommendation that, from 1975 until snow crab stocks were able to support greater fishing effort, only the fishers who fished snow crab on board a vessel in at least one year from 1970 to 1974 inclusively would be eligible for a licence. [ 7 ] There were two objectives to this regime: to control the fishing effort in this area, and thus conserve the stock status, and to ensure the profitability of the fleet. [ 8 ] From 1975 to 1989, the snow crab fishery in area 12 remained a competitive fishery.

However, starting in 1984, DFO set an annual total allowable catch (TAC), which it announced at the start of each fishing season. The impact of the competitive fishery regime in combination with a TAC was felt, and certain fishers acquired more advanced vessels and gear so they could fish more of the TAC; it was a race for the resource. [ 9 ] Starting in 1987, crab landings dropped. They fell to 7 900 tonnes in 1989, and there was a significant resurgence of white or soft-shell crab.

Since soft-shell crabs are moulting and have no commercial value, Area 12 fishers asked DFO to close the fishing season ahead of schedule, and they went home early. [ 10 ] Around the same time, DFO held industry consultations with the different fishers’ associations in preparation for establishing a new commercial fishing regime in Eastern Canada. This regime came into effect in January 1989. One of its provisions was to limit the number of fishing licences based on biological and economic considerations.

B. 1990—Change from a limited entry fishery to an IQ regime [ 11 ] In the winter after the 1989 fishing season, fishers’ associations and the snow crab advisory committee held numerous meetings to discuss the crisis facing the industry that year. Several options were put forth, including a complete closure of the fishery for the 1990 season.

They also discussed additional management measures to implement to better conserve the biomass and avoid future collapse. [ 12 ] The minister at the time also decided to take the opportunity to introduce one of the recommendations from a 1982 report entitled Navigating Troubled Waters: A New Policy for the Atlantic Fisheries: Highlights and Recommendations: Report of the Task Force on Atlantic Fisheries (Exhibit 27) (commonly known as the Kirby Report), which was to implement an IQ regime.

IQs were already being used in other fisheries and were seen as a responsible, sustainable way to manage the resource. [ 13 ] This option was presented in advisory committee meetings, and the idea caught on. Representatives of the Association des pêcheurs professionnels acadiens (APPA) quickly spoke in favour of IQs. However, representatives of the Association des pêcheurs de crabe du Québec (APCQ) and the Association des crabiers et hauturiers du nord-est du Nouveau-Brunswick (ACHNE) were more reluctant.

Many APCQ and ACHNE fishers had recently purchased larger vessels and were quite successful in the competitive fishery. They were less than pleased about having their catches limited by an IQ. [ 14 ] The supporters of the IQ regime were able to convince the opponents that the new regime was the only way to ensure the short- term profitability of the fleet, and that it would not only allow there to be a 1990 fishing season, but also create a more structured fishing season and better promote the long-term conservation of the biomass.

For APPA, this system also protected New Brunswick’s historical shares, which were being overtaken by Quebec. [ 15 ] In fact, the sharing formula was subject to more debate than the IQ regime itself. The more successful fishers wanted the IQ to be set based on historical catches, whereas the others (mainly the APPA members) supported equally distributed IQs.

Several sharing formulae were examined before Minister Bernard Valcourt announced an 80–20 formula in the 1990 Fishing Plan (Exhibit 87): 80 percent of the TAC would be shared equally, and 20 percent would be distributed based on the historical catches of each fisher. [ 16 ] In the 1990 Fishing Plan, the minister also announced the licence condition that traditional fishers in Area 12 would have to use the services of dockside monitors and at-sea observers. Dockside monitors are responsible for weighing landings to ensure that fishers do

not go over their IQs, and at-sea observers accompany the crew and take samples to determine catch composition—size, claw height, percentage of soft-shell crabs, etc.

The data collected were forwarded to DFO’s science department. [ 17 ] Another consequence of the 1989 crisis was that DFO obtained additional financing from the Treasury Board for 1990–1995 and adopted the Atlantic Fisheries Adjustment Program (AFAP), under which a scientific vessel was purchased for snow crab and an annual trawl survey program and soft-shell crab protocol were implemented. [ 18 ] Trawl surveys are performed using a net attached to a vessel. This net scrapes the sea floor at a width of 20 metres. Catches are sampled, and the data collected are forwarded to DFO’s science department.

Biologists consider trawl surveys one of the best techniques in the world for estimating crab biomass. They are used to study not only the biological development of crab—reproduction, growth, diseases, etc.—but also various trends. Since trawl surveys are performed after the fishing season, the commercial biomass for the following season can be estimated, as can the increase in juvenile crabs, which will make up the commercial biomass in years to come. [ 19 ] The soft-shell crab protocol adopted in 1990 divided Area 12 into four large sectors.

If the percentage of soft-shell crabs in a given sector went over 20%, the sector was closed for the rest of the season. White or soft-shell crabs are crabs that have not yet stopped growing. They generally moult once a year. After growing for about nine years, crabs moult one last time and develop claws at the ends of their front legs. Only adult male crabs may be fished. They reach commercial size one year after their last moult.

They may be fished in the following three to four years, and then they become mossy—and lower quality—and die. [ 20 ] Traditional fishers praised AFAP because it contributed to knowledge of the life history of snow crab, provided information on the location of the biomass, and could be used to anticipate catches in future years. [ 21 ] The traditional fleet in Area 12 had 130 fishers in 1990, and the TAC, or the portion of the TAC reserved for this fleet, is still distributed among them according to the same formula or IQ regime. C.

Crisis in the groundfish and lobster fisheries—temporary wealth and resource sharing [ 22 ] The 1989 crisis and the knowledge acquired through AFAP made fishers feel accountable and take an interest in resource management. [ 23 ] As for DFO, it was facing new challenges in the 1990s: the collapse of the Atlantic groundfish fishery, the emergence of Aboriginal claims to commercial fisheries, the collapse of the biomass in certain fisheries combined with an abundance of mollusks and crustaceans (especially crab, since crab biomass benefited from new management measures, and shrimp), and the new government’s significant budget cuts. [ 24 ] DFO officials and traditional fishers in Area 12 developed close collaboration.

Overall, fishers were quite happy with the IQ system, which was a significant culture change. People were now working together; departures from the dock were more structured and there was room for uncertainty. One of the members of ACHNE apparently understood the benefits of this new regime when his vessel broke down at the start of the season. He had time to repair it before going out to catch his IQ. This would not have been possible under a competitive regime. [ 25 ] From 1990 to 1995, the TAC grew considerably, even though the exploitation rate set by DFO remained conservative.

The exploitation rate is the percentage of the biomass that makes up the TAC. On average, it was 38.5 percent in the 1990s. Below is the annual TAC in metric tonnes for the crab fishery in the first half of the decade: - 1990: 7 000 mt - 1991: 10 000 mt - 1992: 11 200 mt - 1993: 14 500 mt - 1994: 20 000 mt - 1995: 20 000 mt [ 26 ] In these same years, lobster and groundfish stocks decreased, leading to a moratorium on the cod fishery in 1993.

At the time, everyone believed, incorrectly, that the moratorium would be short lived. [ 27 ] DFO was under increasing pressure to issue new crab licences to cod fishers affected by this situation. As they were part of the same fishers’ associations at the time, cod fishers asked for help directly from their crab fisher colleagues. [ 28 ] Traditional fishers in Area 12 were nervous; there were rumours about new licences being issued in 1993. According to Gastien Godin, then Director General of APPA, they were developing several plans to [translation] “protect their territory”.

One of the ways to do so, in their opinion, was to enter into a long-term agreement with DFO. [ 29 ] In 1993, Minister John Crosbie issued a five-year fishing plan that could be modified if the annual TAC increased by more than 10 percent or there were significant changes in the crab fishery (Exhibit 122). Traditional fishers were reassured, since they did not believe the TAC would increase by more than 10 percent. [ 30 ] Over the course of 1994, tensions rose in fishers’ associations representing cod and crab fishers.

Scientists announced a significant increase in biomass, and crab fishers feared that new licences would be issued. To avoid increasing the fishing effort, traditional fishers offered to share the wealth rather than the resource. Their proposal, which DFO accepted, was to issue a licence to fish 2 000 mt of crab to a newly created entity. Since it would not own any vessels, this entity would have the 2 000 mt of crab fished by crab

fishers it designated, which would pay part of their resulting profits to a fund for the cod fishers. The plan was that, of the anticipated value of $1.50 per pound, 30 cents would go to the crab fisher and the rest to the fund. As it happened, the price per pound was $2.60, and the crab fisher kept $1.40 while $1.20 was added to the fund. [ 31 ] AFAP expired after the 1994 fishing season, and DFO began discussions with traditional fishers for them to take over and, through a joint project agreement, continue to fund the trawl survey and soft-shell crab protocol.

Given the provisions of the Fisheries Act , R.S.C., 1985, c F-14 (which will be discussed below), DFO informed fishers that it could not tie financing of scientific activities to resource sharing, as they wanted, and that financing could not be conditional on an agreement by DFO to stabilize fishing effort (Exhibit 162.1). [ 32 ] Under these circumstances, the government tabled Bill C-115 [

An Act respecting fisheries , 35th Parl., 1st Sess., 1994] to modify the Fisheries Act (Exhibit 639) so that DFO could enter into long-term joint project agreements with different fisheries, in which it could associate co-management of the fishery with the minister’s discretion under the Act. However, neither this Bill nor Bill C-62 [

An Act respecting fisheries , 35th Parl., 2nd Sess., 1996], tabled in 1996, was ever adopted in the House of Commons. [ 33 ] The “Joint agreement between the snow crab fishing industry and Fisheries and Oceans Canada on stock assessment of the snow crab and other related research in the Southern Gulf of St. Lawrence (Areas 12, 18, 19 and 25/26)” (1995 Joint Project Agreement) was entered into on March 3, 1995 (Exhibit 171).

One of the provisions of this five-year agreement was that, for 1995, crab fishers would contribute $600 000 to scientific research on snow crab. [ 34 ] Crab fishers saw a clear advantage to continuing to work with DFO and maintaining the annual trawl survey, since DFO’s results are used to determine the future biomass and crab concentration areas. They also thought their partnership with DFO would contribute to finding an acceptable fishing plan for 1995 and avoid sharing the resource.

They attempted to submit a unanimous proposal to their cod fisher colleagues for a new wealth sharing formula for the 1995 fishing season, but were unable to. Although ACHNE members did not give their consent, a proposal of this type was submitted to the fishers’ associations and DFO at the March 30, 1995, advisory committee meeting. [ 35 ] The crab fishers’ optimism was short lived, because at this advisory committee meeting, several attendees were requesting new access to the snow crab fishery and asking for resource sharing rather than wealth sharing.

After heated argument, representatives of certain crab fishers’ associations demanded that DFO throw the new access applicants out of the meeting. According to Gastien Godin, the [translation] “harm had already been done”, and Minister Brian Tobin rejected their proposal. [ 36 ] Minister Tobin announced his fishing plan on April 13, 1995, and for the first time, he temporarily shared the resource. Out of a TAC of 20 000 mt, 15 500 mt were assigned to traditional fishers in Area 12, and 4 500 mt were assigned to new access applicants (Exhibits 178, 179 and 180).

Although the minister specified that this was a temporary, one-time measure to help resolve the groundfish crisis, traditional fishers were greatly disappointed, and they withdrew from the 1995 Joint Project Agreement. [ 37 ] After the fishing season, discussions continued on a new long-term agreement between crab fishers and DFO.

The context was favourable, since the government had tabled a second bill, mentioned above, to modify the Fisheries Act and allow DFO to associate resource management with the partnerships it entered into with different fishers’ associations (Exhibit 641). [ 38 ] On February 8, 1996, DFO and crab fishers entered into a five-year agreement in principle with three components: (

i) resource sharing above a defined gross income level for traditional fishers; (ii) the creation of a fund for non-traditional fishers to rationalize their fishery; and, (iii) the participation of traditional fishers in financing DFO activities (Exhibits 214, 216.1 and 217). [ 39 ] However, since Bill C-62 was not in effect—in fact, it died on the order paper after the 1997 election—DFO did not ratify the agreement in principle with crab fishers.

As long as there is no change to the Fisheries Act , DFO is forced to use a two-pronged approach: implementing an integrated fisheries management plan that complies with the minister’s discretion under the Fisheries Act , and, if applicable, a joint project agreement to fund DFO activities subject to the Financial Administration Act , R.S.C., 1985, c. F-11. [ 40 ] On April 18, 1996, Minister Fred Mifflin announced the 1996 fishing plan, which maintained the temporary sharing of the resource (Exhibit 226). Once again, traditional fishers were very disappointed, and plant workers joined them in violent protests.

Plant workers feared that the temporary sharing would mean landings would go to other plants, and that as a result they would not be able to work enough hours to qualify for employment insurance. The fishers refused to go to sea. They filed an application for an interim injunction to prevent the fishing plan from being executed.

The application was rejected, and the fishers discontinued their request with the defendant’s consent. [ 41 ] Following a meeting between traditional fishers, Minister Mifflin, and New Brunswick Premier Frank McKenna, a resolution was found and the fishing season began, quite late, at the end of May. The parties agreed to enter into a multi-year agreement for the start of the 1997 fishing season. [ 42 ] While this multi-year agreement was in the works, DFO and crab fishers in areas 25 and 26, two coastal areas north of Prince Edward Island, were entering into discussions to integrate these areas into Area 12.

Fishers on Prince Edward Island were struggling, and they wanted DFO to eliminate the border. According to DFO scientists, Areas 12, 25 and 26, as well as Areas 18 and 19, two coastal areas north of Nova Scotia, were all part of the same biological snow crab unit, and there was no logical reason to separate them.

This issue was therefore included in discussions on entering into a multi-year agreement, and Area 12 crab fishers accepted the integration as an acceptable compromise. [ 43 ] On May 1, 1997, DFO and traditional crab fishers in Areas 12, 25 and 26 entered into a “Five-Year Co-Management Agreement” (Exhibits 241 and 250) (1997 Joint Project Agreement). Robert Haché, a representative of the Association des crabiers acadiens Inc. (ACA), confirmed that although fishers did not truly negotiate this agreement, it [translation] “suited them to a certain point”.

The document was divided into two separate parts with the explicit goal of complying with the provisions of the Fisheries Act that, despite two bills tabled by the government, had still not been amended.

[44] The first part of this agreement contained the Integrated Fisheries Management Plan, meaning the management measuresthemselves, which set out the TAC and IQs, the implementation of an ice committee, the season opening and closing dates, and soft-shellcrab monitoring. An improved soft-shell crab monitoring protocol was introduced in this agreement. Rather than dividing Area 12 intofour large sectors, Areas 12, 25 and 26 were divided into 280 grids (there were 350 grids in the entire southern Gulf).

If the percentage ofsoft-shell crabs in a given grid went over 20 percent, the grid was closed for the rest of the season. [45] Also in this Five-Year Co-Management Agreement, crab fishers agreed for the first time to temporary resource sharing. Asharing formula was adopted wherein the resource would be shared only when profits surpassed $500 000 for the traditional mid-shorefleet. The first 2 000 metric tonnes above this amount would be assigned to non-traditional fishers, and the excess would be shared 60–40 between traditional crab fishers (60 percent) and the new access fleet (40 percent).

As a result, temporary resource sharing occurred in1995, 1996, 1997 and 2001. [46] Also under the Five-Year Co-Management Agreement, a Solidarity Fund was implemented to help processing plant workers.This was an initiative of the traditional fishers, with the support of DFO, under which they would contribute 15 cents per pound of crabfished to a fund to provide work to plant workers who needed it to complete the required number of weeks to be eligible for employmentinsurance.

At the time, some saw this as a hidden tax imposed by the Government of New Brunswick, while others saw it as a way forcrab fishers to honour a promise made to plant workers in exchange for their support in the 1996 conflict. Either way, the auditorgeneral’s second report in 1999 (Exhibit 642) contains a

section entitled “The Solidarity Funds—Imposition of a Fee That May Not BeContemplated in Legislation”.

It indicates that it is inappropriate for DFO to ensure that a given fisher has contributed to the SolidarityFund before issuing their licence conditions for the year and thus their IQ. [47] The second part of the Five-Year Co-Management Agreement contained the Joint Project Agreement and set the financial andnon-financial contributions of DFO and fishers’ associations to certain DFO activities. [48] According to Pat Chamut, Assistant Deputy Minister—Fisheries Management, DFO, the 1997 Joint Project Agreement was animportant part of the history of crab fishery management in Area 12, both because it ended the 1996 conflict and demonstrated the abilityof DFO and crab fishers to work together to manage this fishery, and because it demonstrated that such a joint project agreement waspossible without requiring modifications to the Fisheries Act.

At least that was the belief at the time! D. The Marshall decision [49] On September 17, 1999, the Supreme Court of Canada rendered its judgement in R. v. Marshall, (SCC), [1999]3 S.C.R. 456. The Court affirmed the First Nations right stemming from treaties signed in 1760 and 1761 to practise commercial fishingin pursuit of a “moderate livelihood”. [50] The Treasury Board allocated an initial budget of $160 million to implement a vast federal government initiative to integrate FirstNations in Canada into the commercial fishery for all species (Marshall Initiative).

The initial phase of this initiative was completed in afew months, and DFO went back to the Treasury Board with a detailed plan including a comprehensive program for buying back licencesfrom traditional fishers and a program to train First Nations in commercial fishing. DFO was allocated a budget of $500 million for thissecond phase of the Marshall Initiative, which spanned from 2000 to 2007. [51] DFO decided to buy back licences rather than issue new licences.

Everyone agreed that this was the most harmonious way tointegrate First Nations into the commercial fisheries that had operated as limited entry fisheries for a number of years. [52] DFO entered into intense negotiations with 33 First Nations in the Atlantic Region in order to come to agreements and allocatethem a portion of the annual TAC of the various fisheries practised there.

A number of them were especially interested in snow crab. [53] Unfortunately for DFO, the buyback program did not meet its objectives for the crab fishery. [54] First, since the program was not ready for the 2000 fishing season, fishers suggested DFO borrow a portion of their annual TACto meet its commitments to First Nations and give this quota back to them in 2001, once the program was implemented. DFO accepted,and 1 060 mt of crab were taken off the TAC to be assigned to licences issued to members of First Nations.

Starting in 2001, the tonnageallocated to First Nations and to temporary licences under the 1997 Joint Project Agreement was taken from the TAC before quotas wereallocated to traditional fishers based on their IQs. From 1 060 mt, the amount was reduced to 911 mt and then 888 mt in later years.Finally, instead of this tonnage being returned to traditional fishers, they were compensated at $2 per pound under an agreement withDFO. [55] Under its licence buyback program, DFO had to determine the value of a snow crab licence.

Since the fishery became a limitedentry fishery, the only way to enter it has been through succession or by acquiring an existing licence. DFO was aware of thesetransactions but not of the financial details. However, the ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec(MAPAQ) had determined that a snow crab licence was worth $1 250 000 in 1999.

Based on MAPAQ’s assessment, DFO’s initial offerto traditional crab fishers in 2000 was for $13 000 per metric tonne (equivalent to an average price per permit of $1.4 or $1.45 million).Since there was little interest in this offer, DFO quickly raised it to $18 000 per metric tonne. DFO was able to buy back one licence in2000 and eight in 2001. [56] In 2001, DFO was still 400 mt of snow crab short of meeting its commitments to First Nations.

A committee was implemented tostudy this issue and, aware that the TAC was falling, traditional crab fishers suggested that DFO change the basis of its evaluation anduse a percentage of the IQ rather than tonnage. DFO accepted and set its buyback price at $2.6 million per percentage point (see forexample the offer in Exhibit 390). [57] DFO was still unable to buy back any additional snow crab licences in 2002 and 2003. However, during this same period, certainsales by mutual agreement took place at a price higher than that offered by DFO.

For example, Daniel Dubois, a fisher on the GaspéPeninsula, received an offer of $3.5 million, which he refused.

[ 58 ] Faced with the failure of its program, DFO started to explore other options starting in 2003. One licence was bought back in 2004, and the program, which was initially supposed to end on March 31, 2004, was extended, first until March 31, 2006, and then until March 31, 2007. In 2005, negotiations with First Nations had come to a close.

In 2006, DFO was still 10.8 percent short of its initial objective of 15.8 percent of the TAC of snow crab to meet its commitments, and it was unable to buy back any additional licences. [ 59 ] DFO determined that $37.4 million was required to acquire this portion of the TAC from traditional fishers. DFO developed its final solution, and $37.4 million was taken from the balance of the budget allocated by the Treasury Board to the Marshall Initiative and distributed provincially, prorated for each fishers’ IQ.

In 2007, all of the plaintiffs signed the financial aid agreement submitted by DFO (see for example Exhibit 606). In fact, DFO was buying back a part of each fishers’ IQ, and the fishers were giving up this

part in future. These agreements contained a release, which will be discussed below. E. Urgent demands from Area 18 crab fishers [ 60 ] Minister Robert Thibault took office on January 15, 2002. [ 61 ] In the advisory committee meeting held on February 19, 2002, Fred Kennedy, spokesperson for the Area 18 Crab Fishermen’s Association, informed traditional crab fishers in Area 12 and DFO representatives that crab fishers in Area 18 were applying to be integrated into Area 12 with 5.32 percent of the TAC, the same percentage as awarded to Areas 25 and 26 crab fishers starting in 1997.

Fred Kennedy had been working for this association since 1999, and he was chosen to represent it with DFO. In the 1990s, crab fishers in Area 18, who were struggling to catch their TAC, tried in vain to gain access to Area 12. Their objective was therefore to gain access to starting in the 2002 season.

Traditional fishers in Area 12, who were not informed that Area 18 crab fishers would be participating in the February 19, 2002, advisory committee meeting, were opposed to this integration, especially at 5.32 percent of the TAC. [ 62 ] Minister Thibault announced his first fishing plan on April 8, 2002 (Exhibits 360 and 365), and on April 12—since the 1997 Joint Project Agreement had expired the previous year—he signed a new Joint Project Agreement with fishers’ associations (2002 Joint Project Agreement) (Exhibit 366).

This one-year agreement outlined the financial and non-financial participation of DFO and fishers’ associations in DFO activities related to the snow crab fishery; it said nothing about management of the fishery. [ 63 ] Also in April 2002, Minister Thibault held an initial meeting with Fred Kennedy, who presented the demands of Area 18 crab fishers.

This meeting was followed by a second meeting in July 2002, in Petit-de-Grat, Nova Scotia, attended by, on the one hand, Fred Kennedy, Bill Broffy, president of the Area 18 Crab Fishermen’s Association, and two Area 18 fishers, and on the other hand, Minister Thibault and his colleague Rodger Cuzner, a Liberal MP. [ 64 ] At this time, Minister Thibault publicly confirmed that, barring a very convincing argument to the contrary, he was in favour of integrating Area 18 with Area 12. [ 65 ] However, during the 2002 fishing season, when he was asked whether Area 18 crab fishers could have access to Area 12 to complete their landings for the current year, he went with the recommendation of his senior officials to not reopen the 2002 fishing plan, especially because the 2002 Joint Project Agreement, which bound DFO to the traditional crab fishers’ associations in Area 12, was in effect.

F. New permanent access [ 66 ] In 2002, Minister Thibault met with representatives of the Maritime Fishermen’s Union (MFU), who wanted the temporary access to the crab fishery that some of their lobster and groundfish fishers had to become permanent. The MFU planned to use the revenue generated by the snow crab fishery and other revenue to create all sorts of activities, such as ecotourism, to get workers out of the lobster and groundfish fisheries. This is known as rationalization, which means removing a number of fishers from a given fishery to ensure the profitability of those who remain.

For Minister Thibault, the lobster and groundfish fishers’ associations wanted a permanent access regime in order to self-rationalize. [ 67 ] In a meeting held in May 2002 in Shippagan, New Brunswick, between Minister Thibault and traditional crab fishers in Area 12, the minister expressed for the first time his desire to resolve once and for all the issue of new access to the snow crab fishery. The minister informed traditional crab fishers that he was prepared to sign a multi-year agreement with them, but that this agreement would have to include permanent access for lobster and groundfish fishers. G.

The negotiations leading to the 2003 fishing plan [ 68 ] In fall 2002, DFO asked traditional crab fishers whether they were interested in negotiating a multi-year agreement, and they were. Crab fishers nominated Rémi Bujold, consultant, to represent them, and Jim Jones, Regional Director General (DFO), was nominated as chief negotiator for DFO. [ 69 ] The first negotiation meeting was held on December 16, 2002. At the start of the meeting, Jim Jones informed fishers that the minister wanted permanent access and that they would discuss not the principle itself but the level of access.

Crab fishers were still unsure what was meant by permanent sharing, but for Jim Jones, it was clear: it meant a constant share every year for the new access fleet. The Marshall Initiative and the integration of Area 18 were also discussed, and crab fishers agreed with DFO to submit an initial multi-year agreement proposal. [ 70 ] After this first meeting, Minister Thibault wrote to Fred Kennedy, inviting him to meet with Area 12 fishers to explain his point of view.

However, he informed him that he found 5.32 percent high, since historically, catches by fishers in Areas 25 and 26 were higher than those in Area 18, and could not be used as a reference point. [ 71 ] On January 20, 2003, crab fishers submitted their agreement proposal, which included three years of co-management (Exhibits 405.2 and 678). They also suggested sharing the resource as follows: the first 20 000 metric tonnes would go to traditional crab fishers (this number would include the First Nations’ share), the next 2 000 metric tonnes would go to new access fishers, and the excess, if

there was any, would be shared with 70 percent going to traditional crab fishers and 30 percent to new access fishers. This proposal completely rejected the integration of Area 18. [ 72 ] The second negotiation meeting was held on January 24, 2003. In the morning, Minister Thibault was at the mid-shore conference, and his main topic of discussion was his desire to implement permanent resource sharing in the crab fishery. The minister set the tone for the negotiation meeting that was held that afternoon. All issues were discussed, and Jim Jones reacted to the January 20 proposal.

He clearly stated that the issue of access to the resource was a problem. The meeting did not go especially well, but the parties still hoped to arrive at an agreement before the fishing plan was announced. [ 73 ] The third meeting was held on February 14, 2003. Jim Jones repeated that the minister was committed to implementing a permanent resource sharing regime; Dominic Leblanc, MP for Beauséjour, had even announced this a few days before the meeting. Jim Jones stated for the first time that the objective was for 10 to 20 percent of the TAC to go to the new access fleet.

The Marshall Initiative was also a significant issue at this meeting, and there was concern about the lack of success of the licence buyback program. [ 74 ] On February 17, 2003, Jim Jones wrote to Rémi Bujold, repeating that he was concerned that crab fishers’ position on permanent sharing had not changed (Exhibit 412).

On March 10, 2003, he repeated this again when he informed crab fishers that he could not discuss their January 20 proposal until they made progress on the crucial issue of resource sharing (Exhibit 421). [ 75 ] After this third meeting, crab fishers held a press conference, which, according to Jim Jones, further damaged the tone of negotiations. [ 76 ] The final meeting was held on March 25, 2003. At the start, Jim Jones informed participants that he intended to give DFO’s position on the January 20, 2003, proposal and deliver a verbal counter-proposal to the crab fishers.

He confirmed that DFO was in agreement with all aspects of the proposal pertaining to the crab fishers’ financing of its activities. However, this proposal did not meet the minister’s objectives for permanent sharing and the integration of Area 18. He informed them that the only item he was able to discuss with them was the percentage of the TAC that would be allocated to new access applicants and Area 18 crab fishers.

At the end of the meeting, Robert Haché asked Jim Jones what DFO’s counter-proposal had in it for them, to which Jim Jones answered, the possibility of implementing an Individual Transferable Quota (ITQ) regime. If crab fishing businesses were no longer profitable under the new measures, this type of regime would allow them to buy a portion of another crab fisher’s IQ to increase their income. [ 77 ] No progress was made at this meeting. Jim Jones suggested that if Rémi Bujold was able to get crab fishers to agree to permanent sharing of 10 percent of the TAC, he would try to convince the minister.

He also suggested that crab fishers meet with the minister to attempt to find a resolution. [ 78 ] A meeting was scheduled for April 8, but Monique Baker, Crustacean Management Officer (Gulf Region) with DFO, did not wait for this meeting and started drafting the decision note to the minister in preparation for the 2003 fishing plan (Exhibit 440). [ 79 ] On April 2, 2003, Rémi Bujold wrote to the association representatives that negotiations had failed (for example, Exhibits 425 and 426.1).

He also restated his concern about their lack of desire to truly negotiate. [ 80 ] At the April 8, 2003, meeting, Minister Thibault repeated that there would be permanent sharing and that crab fishers would have to accept this for productive discussions to be able to occur. He informed that initially, quotas would be issued to fishers’ associations, which would distribute them to their members, but eventually, he planned to implement an ITQ regime. He believed that the transferability would allow fishers to recover some of the lost quota. Fishers, however, did not draw the same conclusions. H.

The 2003 fishing plan [ 81 ] On Friday, May 2, 2003, the minister announced his “Three-Year Snow Crab Management Plan for the Southern Gulf” (Exhibits 441 and 443). This plan integrated Area 18 into Area 12, except for a buffer zone along the Area 19 boundary, and assigned 4.7081 percent of the TAC of the new combined area to Area 18 fishers. It also reserved 15 percent of the TAC for new access fishers’ associations for the three years covered by the fishing plan, and stated that the purpose of this sharing was to support rationalization. However, the TAC and management measures would be set every year.

For 2003, the minister set the TAC at 17 148 mt; 11 702 mt were allocated to traditional fishers in Area 12 (including the former areas 25 and 26), 578 mt were allocated to fishers in Area 18, 2 701 mt were allocated to First Nations, and 2 167 mt were allocated to new access associations and fishers. [ 82 ] Since negotiations with traditional fishers were unsuccessful, there was no joint project agreement, the regular soft-shell crab protocol was reinstated (Area 12 was divided into four large sectors), and there would be no trawl survey after the fishing season. [ 83 ] Contrary to a well-established practise, crab fishers were not notified in advance of the contents of the fishing plan.

They were informed through the media and received the fishing plan only at the end of the day on Friday. Jim Jones admitted that it was an embarrassing situation for local DFO representatives. [ 84 ] Crab fishers’ associations tried without success to calm their members down, and they informed them that they would ask the courts to strike down the fishing plan. But the fishers reacted immediately and violently. Over the weekend, protests broke out, and angry crab fishers set fire to buildings and patrol vessels and vandalized local DFO offices.

They also threatened to boycott the fishing season. [ 85 ] On Monday, May 5, 2003, traditional fishers in Area 12 held an emergency meeting to discuss the situation. The minutes from this meeting (Exhibit 444) show that they maintained their position: no integration of Area 18, no sharing in 2003, and 20 000 mt for traditional fishers and First Nations. A demand to this effect was delivered to the minister by Rémi Bujold; it informed him that if he accepted, crab fishers were prepared to fund scientific activities and the management program. The minister refused, and Rémi Bujold was dismissed.

That afternoon, the minister told the media that he was prepared to increase the TAC by 3 000 to 4 000 mt if crab fishers would sign a joint project agreement with DFO.

[ 86 ] Crab fishers submitted a new proposal to the minister (Exhibit 466, at page 9): if the minister increased the TAC to 21 600 mt, they would agree to integrating Area 18 without removing the buffer zone. This new proposal was discussed at a meeting between the minister and crab fishers. The minister repeated that he would increase the TAC by 3 000 mt to 4 000 mt if traditional crab fishers would sign a joint project agreement stating that they would provide $1.7 million to fund DFO activities.

He specified that this increase would also be shared with new access and Area 18 fishers, but that the $1.7 million would be paid only by Area 12 traditional fishers. A written offer was submitted to fishers the same day (Exhibit 469). This offer was also refused, but crab fishers conceded to go to sea, and the season, though late, occurred as usual. I. The use of part of the TAC to fund DFO activities [ 87 ] In 2003, since there was no joint project agreement between DFO and crab fishers, DFO developed a plan to fund the trawl survey performed after each season.

It decided to use 50 mt of snow crab (for an approximate value of $300 000), not fished by First Nations, to fund the trawl survey. DFO issued a call for proposals and awarded the contract to Joey Desveaux. [ 88 ] In 2004, DFO also decided to use part of the TAC to fund its activities. In his fishing plan (Exhibit 498), Minister Geoff Regan announced that 400 mt would be used to fund various DFO activities. Several DFO departments were consulted, and they estimated the costs of various activities.

DFO again issued a call for proposals (Exhibit 635), and the Regroupement des pêcheurs professionnels des Îles-de-la-Madeleine (RPPIM) was awarded the contract. DFO and RPPIM signed a joint project agreement (Exhibit 531.1), which stated that RPPIM would contribute $1.5 million to the following DFO activities: the trawl survey, the improved soft-shell crab protocol, scientific analysis and increased catch monitoring. It also stated that RPPIM would manage its allocation of 400 mt of crab by awarding quotas to fishers in exchange for compensation. [ 89 ] DFO followed the same process for 2005.

Its call for proposals (Exhibit 553) stated that it was seeking $1.9 million to fund its research activities and that a 480 mt snow crab allocation would be made available to the successful bidder to distribute to its members.

The Acadian Groundfish Fisherman’s Association (AGFA) was awarded the contract and signed a joint project agreement with DFO (Exhibit 560). [ 90 ] AGFA was also awarded the contract in 2006 under the same process (Exhibit 630) and signed a joint project agreement under which AGFA would contribute $1.5 million to fund DFO activities in return for an allocation of 1 000 mt of snow crab (Exhibit 590). J. The legal proceedings [ 91 ] Initially, the plaintiffs filed an application for judicial review before this Court to have the 2003 fishing plan declared illegal and revoke it.

This application was then discontinued, and this case was established on July 11, 2007. In their case, the plaintiffs are asking the defendant to be ordered to pay to them: (

a) Compensation for the loss of profits experienced in 2003, 2004, 2005, 2006, 2007 and 2008 on the grounds of acts by DFO; (

b) Compensation for the drop in value of the plaintiffs’ fishery enterprises; (

c) General and punitive damages; (

d) Damages for loss of future income; (

e) Restitution of the value of benefits appropriated by DFO to the plaintiffs’ detriment; (e.1) Compensation for the plaintiffs’ rights or interests that were either expropriated by DFO or of which the plaintiffs were deprived; (

f) Interest calculated on the amount of damages pre-judgement and post-judgement; (

g) Costs and disbursements; (

h) All other relief that this Court may consider fair and equitable. III.

Issues and remedies sought in this phase of the case [ 92 ] In a document entitled [translation] “Concise joint list of issues to be decided in the proceedings” and signed by the parties on May 29, 2013 (trial record, tab 13), the parties listed the following issues to be decided in the first phase of hearings: [translation] Regarding expropriation WHEREAS , in the second phase, individual evidence about the plaintiffs’ conduct, behaviour, knowledge, beliefs, and personal views relevant at any time may negate their individual rights to compensation based on the alleged expropriation; and WHEREAS the plaintiffs demonstrate and establish, in the second phase, the extent and value of the rights and commercial assets they allege were expropriated from them;

A) Is the behaviour of the minister of Fisheries and Oceans Canada and its officials (collectively “DFO”) likely to constitute an expropriation of the portion of rights or bundle of rights or commercial assets alleged by the plaintiffs? In particular:

i) Are the alleged rights, alleged bundle of rights (or a portion thereof) and alleged commercial assets “property” or a form of “property” or interest that can be expropriated? If yes:

ii) Did DFO subtract a portion of the rights, the bundle of rights or the commercial assets alleged by the plaintiffs? iii) Did DFO’s actions result in an appropriation of rights, the bundle of rights or commercial assets alleged by the plaintiffs? If yes: iv) For there to be expropriation, is there a legal requirement for the Crown to have kept the profit for itself or entirely destroyed the property or interest in question?

v) If yes, did the Crown, in this case, keep the profit for itself or entirely destroy the expropriated property or interest? vi) Is a partial deprivation of the alleged rights, bundle of rights or commercial assets likely to lead to a legal finding of expropriation? vii) If yes, did DFO, in this case, deprive the plaintiffs of the alleged rights, bundle of rights or commercial assets?

B) If yes, does such an expropriation entail a requirement to compensate the plaintiffs? Regarding unjust enrichment WHEREAS the plaintiffs allege, with respect to the deprivation criterion, that they were deprived of a portion of the TAC and the resulting income; WHEREAS the plaintiffs allege, with respect to the deprivation criterion, that the alleged allocation of the TAC decreased the value of their businesses; WHEREAS the issue of whether the plaintiffs individually suffered deprivation or prejudice will be decided only in the second trial; WHEREAS the extent of this deprivation or prejudice will be decided only in the second trial;

C) Did the alleged acts and omissions likely allow DFO to enrich itself without cause at the expense of the plaintiffs? In particular:

i) Did DFO enrich itself through the alleged use of snow crab to fund its activities, its rationalization programs, and its program to integrate Aboriginal fishers into the commercial fishery? ii) Do the alleged deprivation of a portion of the TAC to which the plaintiffs allege they have a right, the resulting income, and the alleged decrease in the value of the plaintiffs’ businesses likely constitute a deprivation of the plaintiffs corresponding to the alleged enrichment of DFO? iii) Are there legal grounds justifying the alleged enrichment of DFO? iv) Does the defence of change of position apply to this case?

Regarding misfeasance in public office WHEREAS the following issues will be decided, if this Court deems it necessary, in the second phase: whether the plaintiffs suffered a prejudice, whether the prejudice suffered was legally caused by the alleged tortious conduct, and whether the alleged prejudice may be subject to compensation according to the rule of law in tortious matters;

D) Does the Crown have immunity in this case from the tort of misfeasance in public office?

E) For there to be misfeasance in public office, is it necessary to establish a legal obligation of DFO of which the plaintiffs were deprived? If yes, was there one in this case?

F) Did DFO behave such that the criteria related to the common issues of tort of misfeasance in public office are met as regards the following allegations:

i) The reduction of the TAC by approximately 4,000 tonnes in 2003 to impose a financial contribution requirement on the plaintiffs in return for an increase in the TAC? ii) The financing of DFO activities using the fishery resource? iii) The use of snow crab to force the implementation of lobster and groundfish fishery rationalization programs? iv) The use of snow crab for programs to integrate Aboriginal fishers into the commercial fishery?

v) The determination of the portion of the TAC to be allocated to Area 18 fishers when this area was integrated with areas 12, 25 and 26? Regarding legitimate expectations WHEREAS determination of whether or not the plaintiffs had legitimate expectations likely depends on the evidence that will be presented in the second phase;

G) Can the doctrine of legitimate expectations constitute a cause of action raising the possibility of damages and interest?

H) Are the alleged actions of DFO and the specific circumstances of this case likely to have caused the plaintiffs’ alleged legitimate expectations?

Regarding compensation paid by the Crown

I) Does the compensation paid or payable by the Crown to certain snow crab licence holders in areas 12, 18, 25 and 26 after the 2006 fishing season constitute a total or partial barrier to the plaintiffs’ claim regarding the integration of Aboriginal fishers into the commercial snow crab fishery? [ 93 ] At the hearing, counsel for the plaintiffs filed an additional document entitled [translation] “Findings sought by plaintiffs at first phase”, which sets out the declarations they seek as follows: [translation] A.

REGARDING EXPROPRIATION Allocations to Aboriginal bands DECLARE that the reduction in IQ for each plaintiff resulting from the allocation to Aboriginal bands of the following portions of the TAC constituted an expropriation of the plaintiffs’ rights for which they are entitled to compensation: 2,701 metric tonnes (t) (15.7511%) of the 2003 TAC; 4,128 t (15.5188%) of the 2004 TAC; 5,038 t (15.5802%) of the 2005 TAC; 3,933 t (15.2035%) of the 2006 TAC.

Financing of DFO operations DECLARE that the reduction in IQ for each plaintiff resulting from the use of the following portions of the TAC to fund DFO operations constituted an expropriation of the plaintiffs’ rights for which they are entitled to compensation: 400 t in 2004, 480 t in 2005 and 1,000 t in 2006. Integration of Area 18 DECLARE that the reduction in IQ for each plaintiff resulting from the allocation of 4.7081% of the TAC to Area 18 fishers after 2003 constituted an expropriation of the plaintiffs’ rights for which they are entitled to compensation.

New access and rationalization DECLARE that the reduction in IQ for each plaintiff resulting from the allocation of 15% of the TAC to new access fishers and associations after 2003 constituted an expropriation of the plaintiffs’ rights for which they are entitled to compensation. ALTERNATIVELY, DECLARE that the reduction in IQ for each plaintiff resulting from the allocation of 15% of the TAC to new access fishers and associations from 2003 to 2006 constituted an expropriation of the plaintiffs’ rights for which they are entitled to compensation. B.

REGARDING UNJUST ENRICHMENT Financing of DFO operations DECLARE that the use of the following portions of the TAC to fund DFO operations, and the correlative reduction in IQ for each plaintiff, resulted in unjust enrichment of the defendant for which the plaintiffs are entitled to compensation: 400 t in 2004, 480 t in 2005 and 1,000 t in 2006.

Rationalization DECLARE that the allocation of 15% of the TAC to new access fishers and associations from 2003 to 2006, and the correlative reduction in IQ for each plaintiff, resulted in unjust enrichment of the defendant for which the plaintiffs are entitled to compensation.

Allocations to Aboriginal bands DECLARE that the allocation of the following portions of the TAC to Aboriginal bands, and the correlative reduction in IQ for each plaintiff, resulted in unjust enrichment of the defendant for which the plaintiffs are entitled to compensation: 2,701 t (15.7511%) of the 2003 TAC; 4,128 t (15.5188%) of the 2004 TAC; 5,038 t (15.5802%) of the 2005 TAC; 3,933 t (15.2035%) of the 2006 TAC. C. REGARDING MISFEASANCE IN PUBLIC OFFICE Financing of DFO operations

DECLARE that DFO committed the tort of misfeasance in public office for which the defendant is liable by using 400 t of snow crab in 2004, 480 t of snow crab in 2005 and 1,000 t of snow crab in 2006 to fund its operations, thereby causing injury to the plaintiffs for which they are entitled to compensation. Rationalization DECLARE that DFO committed the tort of misfeasance in public office for which the defendant is liable by allocating 15% of the TAC to new access fishers and associations from 2003 to 2006, thereby causing injury to the plaintiffs for which they are entitled to compensation.

Integration of Area 18 DECLARE that DFO committed the tort of misfeasance in public office for which the defendant is liable by allocating 4.7081% of the TAC to Area 18 fishers after 2003, thereby causing injury to the plaintiffs for which they are entitled to compensation. Reduction in 2003 TAC DECLARE that DFO committed the tort of misfeasance in public office for which the defendant is liable by reducing the TAC from 21,621 t to 17,148 t in 2003, thereby causing injury to the plaintiffs for which they are entitled to compensation.

Punitive damages DECLARE that the plaintiffs are entitled to punitive damages. [ 94 ] Counsel for the defendant objects to the plaintiffs supplementing the list of issues identified at the preliminary stage of the proceedings and asks the Court to rely on the joint document dated May 29, 2013. [ 95 ] First, I do not believe that these two documents are necessarily mutually exclusive. From the issues identified, there generally arises a certain number of conclusions to which the Court arrives.

Second, I am not bound by the suggestions of counsel in this regard and will make only those findings that, in my view, arise from the evidence and the arguments presented by the parties, within the limits of this first part of the split proceedings. [ 96 ] That said, I will first address an objection to the evidence raised by the defendant during the proceedings, which I took under reserve.

I will then comment on the nature of the plaintiffs’ rights, their legitimate expectations, and the three alleged causes of action, namely expropriation, unjust enrichment and misfeasance in public office on the part of the Minister and DFO officials. IV. Analysis A. Preliminary issue: Objection to the filing of the Crown’s notice of appeal in Haché v. The Queen , 2006-3736(IT)G (Exhibit 601) and of Appendix A of the outline of the plaintiffs’ submissions in Canada v. Haché , A-44-10 (Exhibit 615) [ 97 ] These two pleadings pertain to Tax Court of Canada (TCC 2006-3736(IT)G; Exhibit 601) [ Haché v.

The Queen , 2010 TCC 10 , 2010 D.T.C. 1042] and Federal Court of Appeal (A-44-10; Exhibit 615) [ Canada v. Haché , 2011 FCA 104 , [2011] 5 C.T.C. 37] decisions in a case pitting Gildard Haché, a traditional Area 12 crabber, against the Canada Revenue Agency, as a result of the former challenging a notice of assessment issued by the latter ( Haché case). Gildard Haché is among the traditional crabbers who agreed to sell their fishing licences to DFO and abandon all privileges associated with the licences in exchange for payment as part of the Marshall licence buyback program.

The authenticity of these documents is admitted for the purposes of production, but the defendant objects to their production on the ground that they have no relevance in this case. [ 98 ] Essentially, in these documents, the federal Crown argues that Gildard Haché’s snow crab licence gave him [translation] “the right to renew the licence year after year” and that [translation] “[this] right to renew year after year is a right exclusive to the licence holder”, which means that it constitutes [translation] “eligible capital property related … to the fishing enterprise” of the taxpayer (Exhibit 601, at page 639).

The capital gain realized during the sale of this property is therefore taxable as such under the Income Tax Act , R.S.C., 1985 (5th Supp.), c. 1 (ITA). [ 99 ] This evidence is relevant in this case, and despite the defendant’s attempt to take before this Court a somewhat different position, namely, that the fishing licence confers on the holder only rights for the year during which it was issued, all of the evidence adduced at the hearing confirms, in regards to the right to renew and the exclusivity attached to the licence, the position taken by the Crown in the Haché case. [ 100 ] However, the issue of whether the argument that it is property within the meaning of subsection 248(1) of the ITA , which was accepted by the Federal Court of Appeal, should have any impact on the characterization of the licence and of the rights that it confers for the purposes of the Fisheries Act , is entirely different.

This is a question of law that cannot be the subject of an admission and that must be determined by this Court. In other words, this evidence is relevant only for the admissions of fact it contains. The defendant’s objection to the evidence is therefore rejected. B. Nature of the rights and interests alleged by the plaintiffs underlying each cause of action

(1) Parties’ positions [ 101 ] At the outset, the plaintiffs submit that while the causes of action raised in support of this action are not new, this is the first time that a court that has the benefit of a full factual record has to determine, on the merits, the true nature of the rights of fishing licence holders in the context of an exclusive fishery with IQs. [ 102 ] They rely heavily on the decisions of the Supreme Court of Canada in Saulnier v. Royal Bank of Canada , 2008 SCC 58 , [2008] 3

S.C.R. 166 and of the Federal Court of Appeal in Canada v. Haché , 2011 FCA 104 [cited above] in an attempt to persuade the Court that a fishing licence is property that confers on its holder a property or quasi-property right in the IQ associated with it. [ 103 ] They acknowledge that there is a great deal of case law where, whether in applications for judicial review of federal Crown activities

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