KIRBY ELSON Applicant v. CANADA (ATTORNEY, 2017 FC 459

Date: 20170505 Docket: T-138-16 Citation: 2017 FC 459 Ottawa, Ontario, May 05, 2017 PRESENT: The Honourable Madam Justice Strickland BETWEEN: KIRBY ELSON Applicant and CANADA (ATTORNEY GENERAL) Respondent JUDGMENT AND REASONS TABLE OF CONTENTS Background . 2 Decision Under Review .. 9 Issues . 10 Standard of Review .. 11 Issue 1: Which decision(

s) is (are) subject to judicial review? . 12 Issue 2: Was the Minister’s decision based on relevant considerations? . 14 Applicant’s Position . 14 Respondent’s Position . 16 Analysis . 19 Issue 3: Did the Minister reasonably exercise, or did he fetter, his discretion? . 41 Applicant’s Position . 41 Respondent’s Position . 45 Analysis . 48

(1) Mandatory Requirements . 51

(2) Exemptions and Consideration of Individual Circumstances . 55

(3) Decision letter / s 7 of the Fisheries Act 70 Issue 4: Did the Minister have an open mind? . 74 Applicant’s Position . 74 Respondent’s Position . 75 Analysis . 76 Issue 5: What is the appropriate remedy? . 82 Costs . 85 [ 1 ] This is an application for judicial review of a decision by the Minister of Fisheries and Oceans, accepting the recommendation of the Atlantic Fisheries Licence Appeal Board ( “Appeal Board” ), and denying the Applicant’s appeal in which he sought to be granted an exemption from the Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries policy ( “PIIFCAF Policy” or “Policy” ).

As a result, the Applicant was no longer eligible to have the fishing licences held by him reissued. This application is brought pursuant to

section 18.1 of the Federal Courts Act , RSC 1985, c F-7. Background [ 2 ] The Department of Fisheries and Oceans Act , RSC 1985, c F-15 established the Department of Fisheries and Oceans

( “DFO”) and sets out the powers, duties and functions of the Minister of that department. These extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other federal department, board or agency, relating to the sea coast and inland fisheries, fishing and recreational harbours, hydrography and marine sciences, and the coordination of policies and programs of the federal government respecting oceans (s 4(1)).

Pursuant to s 7 of the Fisheries Act , RSC 1985, c F-14 ( “ Fisheries Act ” ) the Minister may, in his absolute discretion, issue or authorize to be issued leases and licences for fisheries or fishing, wherever situated or carried on. [ 3 ] Over the years, the DFO has established various policies pertaining to management of the fishery. One of these is the Commercial Fisheries Licencing Policy for Eastern Canada , 1996 ( “1996 Policy” ) which has been revised over time but remains in effect.

The 1996 Policy describes a fishing licence as an instrument by which the Minister, pursuant to his or her discretionary authority under the Fisheries Act , grants permission to a person to harvest certain species of fish, subject to the conditions attached to the licence. This is not a permanent permission and terminates upon expiry of the licence. The licence holder is essentially given a limited privilege, rather than any kind of absolute or permanent right or property.

Generally speaking, all fishing licences must be renewed, or “replaced” , annually. [ 4 ] Incorporated within the 1996 Policy are the Owner-Operator Policy and the Fleet Separation Policy. The Fleet Separation Policy was introduced in 1979 to separate the fish harvesting and fish processing sectors of the industry. Under that policy, new fishing licences for fisheries pursued by vessels of less than 65’ in length would not be issued to corporations, including those involved in the processing sector of the industry.

Under the Owner-Operator Policy, which was introduced in the 1970s, licences would be issued in the name of an individual fisher, licence holders were required to fish their licences personally, and were limited to holding one licence per species. [ 5 ] During consultations arising from the 1999 Atlantic Fisheries Policy Review ( “AFPR” ), concerns were expressed by members of the inshore fleet that the Fleet Separation and Owner-Operator Policies were being undermined by “trust agreements” .

In November 2003, the Minister announced his intent to release a discussion document which would form the basis of public consultations concerning trust agreements and the Owner-Operator and Fleet Separation Policies. A news release indicated that the DFO would examine all options, including the possibility of regulations, to deal with the trust agreements which were counter to DFO policy. A discussion paper entitled Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries followed.

It noted that a fishing licence reflects a privilege to fish, which is granted annually at the absolute discretion of the Minister pursuant to the Fisheries Act . This is a limited permission to fish constrained by the conditions of the licence. When the licence expires, the privilege to fish terminates. The paper noted that some licences issued to individuals had become the subject of trust agreements which are entered into between the licence holder and a fish processor or other third party.

The trust agreements are private contracts, which are binding on the parties to them and often direct the use of the licence by the processor or other third party. Where a licence is the subject of such a trust agreement, the beneficial interest in it is transferred to another party and the legal title remains vested in the licence holder as a bare trustee.

Consultation on the discussion paper followed, as did the issuance of A Policy Framework for the Management of Fisheries on Canada’s Atlantic Coast . [ 6 ] Ultimately, in April 2007, the PIIFCAF Policy was introduced by the Minister who stated that its goal was to strengthen the existing Owner-Operator and Fleet Separation Policies to ensure that inshore fish harvesters remained independent and that the benefits of fishing licences flowed to the fishers and to Atlantic coastal communities.

In the policy statement section, the Policy states that it strengthens the Owner-Operator and Fleet Separation Policies by addressing issues concerning “Controlling Agreements” (trust agreements), a term which it defines. The stated objectives of the PIIFCAF Policy are to reaffirm the importance of maintaining an independent and economically viable inshore fleet; strengthen the application of the Owner-Operator and Fleet Separation Policies; ensure that the benefits of fishing licences flow to the fish harvester and the coastal community; and, assist fish harvesters to retain control of their fishing enterprises.

The Policy created the “Independent Core” category as the new eligibility criteria for the receipt of new or replacement vessel-based fishing licences in the Atlantic Canada inshore sector after April 12, 2007.

The Independent Core category is available to inshore fish harvesters who are not parties to controlling agreements. [ 7 ] The PIIFCAF Policy states that heads of Core Enterprises, who are not a party to a controlling agreement with respect to any inshore vessel based fishing licences issued in their name, will be eligible to obtain the Independent Core category by filing a declaration stating that they are not a party to a controlling agreement. Declarations were required to be filed by March 31, 2008 and thereafter each time a fish harvester requested a new or replacement inshore vessel-based licence.

Licence holders who were a party to a controlling agreement had seven years, until April 12, 2014, within which to comply with the PIIFCAF Policy. Those who did not do so would not be eligible to be categorized as Independent Core and, therefore, would not be eligible to be issued new or replacement licences. [ 8 ] In 2007, the DFO sent an information package to all inshore licence holders to whom the PIIFCAF Policy applied.

In February 2008, a second package was sent, to address questions that had been raised, and extending the deadline for the filing of declarations to March 31, 2008. [ 9 ] The Applicant was a party to a controlling agreement with Labrador Sea Products Inc. and Quinlan Brothers Limited.

Accordingly, on March 25, 2008, he filed the required declaration with the DFO. [ 10 ] On December 3, 2009, the DFO sent the Applicant a letter advising him that, because he was a party to a controlling agreement, he did not qualify as an Independent Core fish harvester, which categorization was subject to review at any time should the DFO become aware of additional information having an impact on his eligibility.

He was advised that he could continue to fish the licences that he held until April 12, 2014, that he could request replacement licences but would not be eligible to receive new or replacement licences until the controlling agreement was terminated, or brought into compliance with PIIFCAF Policy, and that he had the right to appeal the categorization decision.

On October 18, 2013, the Applicant received a further letter from the DFO to the same effect. [ 11 ] On March 18, 2014, the DFO sent registered letters to those licence holders who were still in controlling agreements, again reminding them of the PIIFCAF Policy deadline of April 12, 2014, urging them to terminate or amend their controlling agreements to bring them in line with the PIIFCAF Policy, and to file a new declaration to that effect so that they would be eligible for licence renewal.

The letter also advised that fishers would have an opportunity to appeal a decision to deny the renewal of their licences if they remained

in a controlling agreement after April 12, 2014. To participate in the appeal, all relevant information, including their controlling agreement was to be submitted to the DFO within 30 days from the time their request to have their licences renewed was denied. The letter stated that the Minister had instructed the Appeal Board to examine controlling agreements submitted for review to determine if there was, in fact, a violation of the Owner-Operator and Fleet Separation Policies that the PIIFCAF Policy was designed to protect. The delivery of the letter was signed for by the Applicant’s spouse.

A press release to similar effect was issued by the Minister on March 20, 2014. [ 12 ] In early April 2014, the DFO contacted the Applicant and advised him that if he applied for a renewal of his licences prior to April 12, 2014 they would be issued to him for the 2014 season. The Applicant did so and was duly issued the licences.

In the fall of 2014, he was again contacted directly by the DFO and advised that his licences would not be renewed in 2015 if he was still subject to the controlling agreement. [ 13 ] On December 31, 2014, the Applicant wrote to the Minister asking for an exemption to the PIIFCAF Policy for his enterprise and that he be given the opportunity to make out a case for such an exemption. [ 14 ] By letter of March 12, 2015, the then Minister of Fisheries and Oceans, Minister Shea, responded stating that, under PIIFCAF, any licences deemed to be in a controlling agreement as of April 12, 2014 would not be eligible for renewal and that the DFO would not be considering any exceptions to the PIIFCAF Policy.

The Minister advised that if the Applicant wished to appeal a non- renewal decision by the DFO he may do so through the Appeal Board and, that upon receipt of an appeal request, a fishing licence may be reissued for an interim period during the appeal process. The Minister requested that he confirm in writing within 30 days if he wished to appeal.

The Minister also noted that if the Applicant were to terminate his controlling agreement during the appeal process, his situation would be reassessed at that time. [ 15 ] The Applicant appealed the non-renewal decision to the Appeal Board by a letter to the Minister dated April 10, 2015 and his licences were renewed for 2015. [ 16 ] On June 12, 2015, the DFO faxed a 14-page appeal package, including an appeal case

summary, to the Applicant by way of his spouse. On August 28, 2015, an updated package was provided to the Applicant’s counsel. On October 21, 2015, the Applicant’s counsel provided written submissions and a copy of the Applicant’s controlling agreement to the Appeal Board. The hearing was held on the same date at which time the Applicant’s counsel made oral submissions. [ 17 ] In its report to the Minister, the Appeal Board outlined the PIIFCAF Policy, the Owner-Operator Policy, the Fleet Separation Policy, and the background facts.

It noted the submissions of the Applicant’s counsel which included that: the Applicant was seeking an exemption to the PIIFCAF Policy; exiting his controlling agreement may have a significant cost; he may lose his enterprise; the PIIFCAF Policy is an irrational and ineffective policy that will cause financial hardship and that it has been grappled with but rejected in other jurisdictions; it does not appreciate a fisher who holds a quota but does not have financial assistance; if a fisher is located in Labrador, without an agreement he cannot sell his catch; and, the Policy ties the hands of fishers, limits flexibility and financing and, therefore, makes it more expensive for fishers to operate their enterprise.

The Appeal Board stated that it had advised counsel that a discussion of other jurisdictions was beyond its mandate. It asked counsel to put a dollar value on the claimed financial hardship for this to be considered as extenuating circumstances as all fishers are in the same situation, but noted that counsel was unable to do so. The Appeal Board found that the Applicant had been treated fairly in accordance with the DFO Controlling Agreement Policy [ sic ] and had not demonstrated a valid extenuating circumstance to justify upholding the appeal. It recommended that the appeal be denied.

On December 18, 2015, in a Memorandum for the Minister, the Associate Deputy Minister recommended that the Appeal Board recommendation be accepted. [ 18 ] By letter to the Applicant dated December 23, 2015, Minister Tootoo denied the appeal.

Decision Under Review [ 19 ] The relevant portion of Minister Tootoo’s decision letter of December 23, 2015 (“decision”) states: This letter is in response to your appeal concerning the licences held in your name that remain subject to a controlling agreement, despite the eligibility requirement provided for by the policy on Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries (PIIFCAF). The hearing of the Atlantic Fisheries Licence Appeal Board occurred on October 21, 2015.

The report of the Atlantic Fisheries Licence Appeal Board, which contains its recommendation, has been submitted to me for my consideration. Having considered all relevant information, I have decided to deny the appeal. Therefore, you will not be provided with an exemption to the PIIFCAF policy. Accordingly, you will no longer be eligible to have the licences reissued to you for the 2016 fishing season and beyond. Issues [ 20 ] The Applicant identifies the issues as:

(1) Whether the Minister unlawfully fettered his discretion by applying the PIIFCAF Policy to the Applicant without considering his individual circumstances;

(2) Whether the Minister prejudged the Applicant’s case; and

(3) Whether the PIIFCAF is ultra vires the jurisdiction of Parliament pursuant to s 91(12) of the Constitution Act, 1867 , such that the Minister cannot rely upon it for the decision. [ 21 ] The Respondent identifies the issues as:

(1) What is the standard of review?

(2) Was the Minister’s decision based on relevant considerations?

(3) Did the Minister reasonably exercise his discretion?

(4) Did the Minister have an open mind? [ 22 ] In my view the issues can be framed as follows:

(1) Which decision(

s) is (are) subject to judicial review?

(2) Was the Minister’s decision based on relevant considerations?

(3) Did the Minister reasonably exercise, or did he fetter, his discretion?

(4) Did the Minister have an open mind?

(5) What is the appropriate remedy? Standard of Review [ 23 ] The Applicant did not make written submissions regarding the standard of review but at the hearing before me submitted that the reasonableness standard applied to the issue of the fettering of discretion.

The Respondent submits the standard of review is reasonableness and that the Minister’s decisions on issuing commercial fishing licences are highly discretionary and are entitled to deference ( Stemijon Investments Ltd v Canada (Attorney General) , 2011 FCA 299 at paras 20-25 (“ Stemijon ”); Malcolm v Canada (Minister of Fisheries and Oceans) , 2014 FCA 130 at paras 32-35 (“ Malcolm ”); Boogaard v Canada (Attorney General) , 2014 FC 1113 at paras 66-68 (“ Boogaard FC ”), reversed by the FCA on other grounds, 2015 FCA 150 (“ Boogaard FCA ”)). [ 24 ] I agree that the Minister’s decision concerning the issuance of commercial fishing licences is discretionary and subject to a standard of review of reasonableness ( Dunsmuir v New Brunswick , 2008 SCC 9 at para 53 (“ Dunsmuir”) ; Boogaard FC at paras 66-68 ; Ralph v Canada (Attorney General) , 2009 FC 1274 at paras 21-22 ; Assoc des crevettiers acadiens du Golfe inc c Canada (Procureur general) , 2011 FC 305 at paras 56-57 . [ 25 ] While there has been some uncertainty regarding the appropriate standard of review where the fettering of discretion is at issue, the Federal Court of Appeal has held that, post- Dunsmuir , the fettering of discretion should be reviewed on the reasonableness standard.

Further, that the fettering of discretion is always outside the range of possible, acceptable outcomes, and is therefore per se unreasonable ( Stemijon at paras 20-25 ; Gordon v Canada (Attorney General) , 2016 FC 643 at para 27 (“ Gordon ”)). [ 26 ] In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process, but also with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law ( Dunsmuir at para 47 ). [ 27 ] Issues of procedural fairness are reviewed on the correctness standard ( Mission Institute v Khela , 2014 SCC 24 at para 79 ; Canada v Khosa (Citizenship and Immigration) , 2009 SCC 12 at para 43 ).

Issue 1: Which decision(

s) is (are) subject to judicial review? [ 28 ] The Applicant submits that he seeks judicial review of a decision by the Minister which he submits is comprised of two letters, dated March 12, 2015 and December 23, 2015, written by Minister Shea and Minister Tootoo, respectively, refusing to renew the Applicant’s fishing licences.

The Applicant did not provide written submissions as to why the Court should consider both letters as one decision, but at the hearing of this matter submitted that whether the letters were treated as one decision or the letter of Minister Tootoo was considered to be the decision under review, made no difference for the purpose of the hearing and that both decisions were made without the Minister exercising his or her discretion. [ 29 ] The Respondent submits that the decision subject to judicial review in this matter is the decision by Minister Tootoo dated December 23, 2015 ( Rule 302 of the Federal Courts Rules, SOR/98-106; Pieters v Canada (Attorney General) , 2004 FC 342 at para 4 (“ Pieters ”)). [ 30 ] Rule 302 of the Federal Courts Rules provides that, unless the Court orders otherwise, an application for judicial review shall be limited to a single order in respect of which relief is sought.

Put otherwise, only one decision can be challenged on judicial review unless the Court orders otherwise which may be the case where the decisions at issue are closely linked and may be considered as a continuing course of conduct ( Council of the Innu of Ekuanitshit v Canada (Fisheries and Oceans) , 2015 FC 1298 ).

In this matter, by letter of March 12, 2015, Minister Shea advised that licences deemed to be in a controlling agreement as of April 12, 2014 are not eligible for renewal and that the DFO would not be considering any exemptions to the PIIFCAF Policy, but advised that the Applicant could appeal a non-renewal decision through the Appeal Board. The Applicant did appeal, taking the position that the Minister acted

unfairly by applying the PIIFCAF Policy without considering whether his personal circumstances justified the exemption he hadsought.

The Appeal Board made a recommendation to Minister Tootoo who, by letter dated December 23, 2015, denied the appeal and,accordingly, declined to provide an exemption to the PIIFCAF Policy and stated that the Applicant was no longer eligible to have hislicences reissued to him. [31] This Court has previously held that where a decision under review results from an appeal, the Court should only review theappellate judgment, the original decision is not before the Court (Pieters at para 4 citing Unrau v Canada (Attorney General), [2000]FCJ No 1434 (Fed TD); also see Lessard-Gauvin v Canada (Attorney General), 2016 FC 227 at para 10; Gun v Piikani First Nation,2014 FC 908 at para 32).

Accordingly, in my view, only the December 23, 2015 is subject to judicial review in this matter. Issue 2: Was the Minister’s decision based on relevantconsiderations? Applicant’s Position [32] The Applicant submits that the Minister’s decision relied upon the PIIFCAF Policy which trenches upon on provincialjurisdiction under section 92(13) and (16) of the Constitution Act, 1867 (UK), 30 & 31 Vict, c 3, reprinted in RSC 1985, App II, No 5(“Constitution Act, 1867”).

More specifically, the Applicant asserts that the Minister could not base his decision on a policy that wouldbe ultra vires Parliament if it was enacted as legislation. The Policy was, therefore, an irrelevant, unconstitutional consideration(Canadian Union of Public Employees (CUPE) v Ontario (Minister of Labour), 2003 SCC 29 , [2003] 1 SCR 539 at para 172(“Canadian Union of Public Employees (CUPE)”)). [33] The Applicant submits that the PIIFCAF Policy is, in pith and substance, a regulation of contracts. It is social and economiclegislation unrelated to protecting the fishery.

Accordingly, it is not a valid exercise of the federal fisheries power pursuant to section91(12) of the Constitution Act, 1867 (Slaight Communications v Davidson, (SCC), [1989] 1 SCR 1038 at para 90, perLamer J, dissenting but not on this point (see para 9) (“Slaight Communications”); Doré v Barreau du Quebec, 2012 SCC 12 (“Doré”)).

Further, that the Fisheries Act must be interpreted in a manner consistent with the Constitution Act, 1867 (R v McKay, (SCC), [1965] SCR 798 at 803-804 (“McKay”); Castillo v Castillo, 2005 SCC 83 at para 30 (“Castillo”)) such that the Minister’s powerto issue licences under s 7 does not authorize decisions on the basis of the PIIFCAF Policy. [34] The Applicant submits that s 91(12) relates to the fishery as a resource, but does not extend to ancillary activities related tothat industry, such as contracts between processors and harvesters (R v Roberts, 1882 CarswellNat 7 (SCC) at para 36 (“Roberts”).

Accordingly, s 91(12) does not authorize PIIFCAF for three reasons. First, s 91(12) does not give Parliament jurisdiction to regulate fishprocessors as this is a matter for the Provincial governments under s 92(13) (Reference re: Fisheries Act, 1914 (Can),(UK JCPC), [1930] AC 111 at para 20 (“Reference re: Fisheries Act”)) and is not necessarily incidental to s 91(12) (Reference re:Fisheries Act at paras 23-25).

Second, s 92(12) does not give the Minister power to regulate the economic relationships that surround thefishery, including contracts between fish processors and fish harvesters, which are matters of Provincial competence (British ColumbiaPackers Ltd v Canada (Labour Relations Board), 1974 CarswellNat 132F (FCTD) at paras 1-3 (“BC Packers”) nor to regulate theeconomic relationships between the owners of fishing vessels and the crews of those vessels (Mark Fishing Co v UFAW, (BC CA), 1972 CarswellBC 95 (BCCA) at paras 7-13, 18-42).

And, finally, the valid exercise of s 91(12) requires a connection tothe fishery as a resource and the PIIFCAF Policy has no such connection (Fowler v The Queen, (SCC), [1980] 2 SCR213; Northwest Falling Contractors Ltd v The Queen, (SCC), [1980] 2 SCR 292; Ward v Canada (Attorney General),2002 SCC 17 at paras 20-24, 34-36, 41-49 (“Ward”)). The Applicant submits that there is no evidence that the PIIFCAF Policy has anyimpact for fish stocks or conservation. Respondent’s Position [35] The Respondent submits the PIIFCAF Policy is authorized by the Fisheries Act.

Parliament’s power over “sea coasts andinland fisheries” pursuant to s 91(12) is broad and includes managing fisheries to achieve socio-economic objectives (Ward at paras 2,34, 41; Comeau’s Sea Foods v Canada, (SCC), [1997] 1 SCR 12 at para 37 (“Comeau’s Sea Foods”); Gulf TrollersAssn v Canada (Minister of Fisheries and Oceans), (FCA), [1986] FCJ No 705, 32 DLR (4th) 737 at para 16 (“GulfTrollers”); MacKinnon v Canada, (FC), [1987] 1 FC 490 at paras 16-17, 23-24 (“MacKinnon”); Carpenter FishingCorp v Canada, (FCA), [1998] 2 FC 548 (FCA) at paras 34-40 (“Carpenter Fishing”)).

Federal fisheries powerextends to managing the fisheries on social, economic or other grounds “either in conjunction with steps taken to conserve, protect,harvest the resource or simply to carry out social, cultural or economic goals or policies” (Gulf Trollers at para 16) and is not confined toconserving fish stocks, but also extends to the management and control of the fisheries as a public resource, which has many aspects,including economic considerations (Ward at paras 2, 34, 41; Comeau’s Sea Foods at para 37). [36] Further, the Courts have consistently held that the Fisheries Act gives the Minister wide discretion to manage fisheries in thepublic interest, including taking into account social and economic factors in managing and allocating a fishery resource (Tucker vCanada, [2000] FCJ No 1868 at para 18 (“Tucker”), aff’d 2001 FCA 384; Malcolm at para 52; Carpenter Fishing at paras 34-35, 40;Association des Senneurs du Golf Inc v Canada (Minister of Fisheries) (1999), (FC), 175 FTR 25, 94 ACWS (3d) 774at para 25 (“Association des Senneurs”), aff’d 2001 FCA 276; Canada (Attorney General v Arsenault, 2009 FCA 300 at paras 40, 57(“Arsenault”)).

The Minister’s absolute discretion to issue licences under s 7 of the Fisheries Act is consonant with the overall policy ofthe Fisheries Act that Canada’s fisheries are a common property resource that the Minister has a duty to manage, conserve and developin the public interest (Comeau’s Sea Foods at paras 37, 46; Area Twenty Three Snow Crab Fisher’s Assn v Canada (Attorney General),2005 FC 1190 at paras 19-20; Campbell v Canada (Attorney General), 2006 FC 510 at para 19 (“Campbell”)). [37] The Respondent submits that the PIIFCAF Policy is consistent with the wide ambit of permissible purposes of the

Fisheries Act . It works in conjunction with other policies to achieve the identifiable and acceptable socio-economic objectives of supporting a diverse Atlantic fishery, avoiding market concentration, and maximizing the economic benefits of the resources for participants in isolated rural fishing communities ( Tucker at para 18 ). Conversely, controlling agreements are deliberately designed to circumvent licencing policies.

They constitute a “mischief” resulting in individual fish harvesters losing control over their licences and shifting the benefits of the resource away from individual fish harvesters and the isolated coastal communities that rely on it to fish processors.

The existence of controlling agreements, and their effects, is a relevant factor for the Minister to consider in issuing licences to fish as authorized by s 91(12) of the Constitution Act, 1867 and the Fisheries Act . [ 38 ] The Respondent also submits that a policy cannot be challenged based on the division of powers ( Timberwest Forest Corp v Canada , 2007 FCA 389 at para 3 (“ Timberwest FCA ”); Timberwest Forest Corp v Canada , 2007 FC 148 at para 102 (“ Timberwest FC ”); Little Sisters Book & Art Emporium v Canada (Minister of Justice) , 2000 SCC 69 at para 89 ).

The PIIFCAF Policy is not a legislative instrument; it is a non-binding policy serving to guide the Minister’s exercise of his lawful discretion to issue commercial inshore fishing licences. As such, it lacks any legal force by which it could intrude on provincial legislative jurisdiction ( Campbell at paras 18, 45 ). The constitutional validity of an administrative policy like PIIFCAF is reviewable only on the ground that its enabling statute is unconstitutional, and here the Applicant has not challenged the Fisheries Act .

Without such a challenge, a division of powers analysis is inapplicable to the PIIFCAF Policy. Further, there is no meaningful distinction between asserting that the Fisheries Act must be interpreted (i.e., read down) to provide for only “constitutionally valid” policies and making a more straightforward claim that the PIIFCAF Policy itself is unconstitutional. [ 39 ] The Respondent submits that in the alternative and in any event, the pith and substance of the PIIFCAF Policy is management of the inshore fishery, which falls under s 91(12).

While the Policy incidentally touches on contracts, it is not unconstitutional or outside the scope of federal authority as a result ( Timberwest FC at paras 103-114 ). This was demonstrated by the Supreme Court of Canada in Ward ( Ward at para 40 ; MacKinnon at paras 9, 17, 24 ). Similarly, the PIIFCAF Policy is one policy factor that exists within the context of a broader licencing scheme that is concerned with the overall management and control of the Atlantic inshore fishery.

While the PIIFCAF Policy references controlling agreements, in substance it deals with the control of licences, which is in the Minister’s purview in managing the fishery and controlling access to the resource ( Comeau’s Sea Foods at para 37; Ward at para 49 ). [ 40 ] The Respondent submits that the Minister has the widest possible discretion with respect to issuing licences, which extends to the considerations the Minster chooses to take into account as appropriate in making licencing decisions. Deference is owed to the decision-maker’s choice of relevant considerations ( Comeau’s Sea Foods at paras 37, 46).

Here, the Minister has determined that keeping control of licences with individual licence holders is important and there is no basis for the Court to interfere with the Minister’s assessment that the existence of controlling agreements, which hand control over licences to third parties, is a relevant licencing consideration. Analysis [ 41 ] The relevant legislative provisions are set out below for ease of reference. Constitution Act , 1867 91.

It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, 91.

Il sera loisible à la Reine, de l’avis et du consentement du Sénat et de la Chambre des Communes, de faire des lois pour la paix, l’ordre et le bon gouvernement du Canada, relativement à toutes les matières ne tombant pas dans les catégories de sujets par la présente loi exclusivement assignés aux législatures des provinces; mais, pour plus de garantie, sans toutefois restreindre la généralité des termes ci-haut employés dans le présent article, il est par la présente déclaré que (nonobstant toute disposition contraire énoncée dans la présente loi) l’autorité législative exclusive du parlement du Canada s’étend à toutes les matières tombant dans les catégories de sujets ci-dessous énumérés, savoir : … … 12.

Sea Coast and Inland Fisheries. Les pêcheries des côtes de la mer et de l’intérieur. … … 92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say, 92. Dans chaque province la législature pourra exclusivement faire des lois relatives aux matières tombant dans les catégories de sujets ci-dessous énumérés, savoir : … … 13. Property and Civil Rights in the Province. La propriété et les droits civils dans la province; … … 16. Generally all Matters of a merely local or private Nature in the Province.

Généralement toutes les matières d’une nature purement locale ou privée dans la province.

Fisheries Act 7

(1) Subject to subsection (2), the Ministermay, in his absolute discretion, wherever theexclusive right of fishing does not alreadyexist by law, issue or authorize to be issuedleases and licences for fisheries or fishing,wherever situated or carried on. 7

(1) En l’absence d’exclusivité du droit depêche conférée par la loi, le ministre peut, àdiscrétion, octroyer des baux et permis depêche ainsi que des licences d’exploitation depêcheries — ou en permettre l’octroi —,indépendamment du lieu de l’exploitation oude l’activité de pêche. Department of Fisheries and Oceans Act 4

(1) The powers, duties and functions of theMinister extend to and include all mattersover which Parliament has jurisdiction, not bylaw assigned to any other department, boardor agency of the Government of Canada,relating to 4

(1) Les pouvoirs et fonctions du ministres’étendent d’une façon générale à tous lesdomaines de compétence du Parlement nonattribués de droit à d’autres ministères ouorganismes fédéraux et liés : (

a) sea coast and inland fisheries;

a) à la pêche côtière et à la pêche dans leseaux internes;(

b) fishing and recreational harbours;

b) aux ports de pêche et de plaisance;(

c) hydrography and marine sciences; and

c) à l’hydrographie et aux sciences de la mer;(

d) the coordination of the policies andprograms of the Government of Canadarespecting oceans.

d) à la coordination des plans et programmesdu gouvernement fédéral touchant auxocéans.

(2) The powers, duties and functions of theMinister also extend to and include such othermatters, relating to oceans and over whichParliament has jurisdiction, as are by lawassigned to the Minister.

(2) Les pouvoirs et fonctions du ministres’étendent en outre aux domaines decompétence du Parlement liés aux océans etqui lui sont attribués de droit. [42] In my view, the starting point for an analysis of whether the Minister’s decision was based on relevant considerations is the2002 decision of the Supreme Court of Canada in Ward, which addresses both the scope of federal fisheries powers and the duties of theMinister as well as the application of the “pith and substance” analysis to a fisheries related matter. [43] In Ward, the applicant held a commercial licence issued to him under the Fisheries Act which permitted him to harvest hoodedand harp seals.

Section 27 of the Marine Mammal Regulations prohibited the sale, trade or barter of young harp (whitecoats) and hooded(bluebacks) seals. The applicant was charged with selling pelts contrary to the regulation and argued that s 27 was ultra viresParliament. [44] The Supreme Court of Canada held that s 27 was intra vires Parliament under its fisheries powers. The purpose of theprovision was to control the killing of bluebacks and whitecoats by prohibiting their sale, making it largely useless to harvest them.

Parliament’s object was to regulate the seal fishery by eliminating the commercial hunting of whitecoats and bluebacks while allowingfor limited harvesting for non-commercial purposes. The prohibition existed in the context of a scheme concerned with the overall“management and control” of the marine fisheries resource. It was not directed at controlling commerce or property but rather wasdesigned to curtail a hunt that was damaging the economic viability of the sealing industry and the fisheries resource in general.

TheCourt held that, while the method chosen to curtail the commercial harvest of bluebacks and whitecoats may have been imperfect,efficiency was not a valid consideration in the pith and substance analysis. Further, to argue that because the legislative measure was aprohibition on sale, it must in pith and substance be concerned with the regulation of sale, confused the purpose of s 27 with the meanschosen to achieve it.

Viewed in the context of the legislation as a whole and the legislative history, there was nothing to suggest thatParliament was trying to regulate the local market for trade of seal and seal products.

Section 27 was in pith and substance concernedwith the management of the Canadian fishery and fell within federal fisheries power which is not confined to conserving fish stocks, butextends more broadly to maintenance and preservation of the fishery as a whole, including its economic value. [45] The Supreme Court stated that, although broad, fisheries power is not unlimited, Parliament must respect the provincial powerover property and civil rights.

Whether a matter best conforms to a subject within federal or provincial jurisdiction cannot be determinedby drawing a line between federal and provincial powers on the basis of conservation or sale. The activity at stake must be examined todetermine whether the matter regulated is related in pith and substance to the federal fisheries power or the provincial power overproperty and civil rights. As s 27 was vitally connected to protecting the economic of the Canadian fishery as a whole, it was a validfederal measure.

That result fully respected the provinces’ constitutional right to control property and civil rights. [46] The Supreme Court undertook a thorough review of the jurisprudence concerning the scope of the federal fisheries power,including several of its older decisions which are relied upon by the Applicant in this matter, and concluded: 34 First, the preponderance of authority suggests that the fisheries power is not confined to conservation, nor to pre-sale activities,but extends more broadly to maintenance and preservation of the fishery as a whole, including its economic value.

In The Queen v.Robertson (1882), 1882 CanLII 25 (SCC), 6 S.C.R. 52, Ritchie C.J. described the fisheries power as extending “to subjects affecting thefisheries generally, tending to their regulation, protection and preservation”.

Accordingly, Parliament’s power extended to “all suchgeneral laws as enure as well to the benefit of the owners of the fisheries as to the public at large, who are interested in the fisheries as asource of national or provincial wealth” (pp. 120-21). 35 In Reference re Certain Sections of the Fisheries Act, 1914, (SCC), [1928] S.C.R. 457 (aff’d (UK JCPC), [1930] A.C. 111 (P.C.)), Newcombe J. cited, at p. 472, the definition of a fishery given in Patterson on the Fishery Laws

(1863), at p. 1, as “the right of catching fish in the sea, or in a particular stream of water”. But he went on to cite the broader “leadingdefinition” from J. A. H. Murray’s A New English Dictionary (1888), defining fishery in terms of the “business, occupation or industry ofcatching fish or of taking other products of the sea or rivers from the water”. Davey C.J.B.C., in Mark Fishing Co. v.

United Fishermen& Allied Workers’ Union (1972), (BC CA), 24 D.L.R. (3d) 585 (B.C.C.A.), said of this: “The point of Patterson’sdefinition is the natural resource, and the right to exploit it, and the place where the resource is found, and the right is exercised” (p. 592).See also International Fund for Animal Welfare, Inc. v. Canada, (FC), [1987] 1 F.C. 244 (T.D.) (division of powersissue aff’d (FCA), [1989] 1 F.C. 335 (C.A.)). 36 The theme that the fisheries power refers to the resource was affirmed by this Court, per Laskin C.J. (dissenting, but not on thispoint) in Interprovincial Co-Operatives Ltd. v.

The Queen, (SCC), [1976] 1 S.C.R. 477, who wrote, at p. 495, that thefederal fisheries power “is concerned with the protection and preservation of fisheries as a public resource”, extending even to the“suppression of an owner’s right of utilization”. 37 Again, in Northwest Falling Contractors Ltd. v.

The Queen, (SCC), [1980] 2 S.C.R. 292, Martland J., speakingfor the Court, recognized that the fisheries power involved legislating in relation to fisheries as a resource (at p. 298): . . . federal legislative jurisdiction under s. 91.12 of the British North America Act is not a mere authority to legislate in relation to “fish”in the technical sense of the word. The judgments in this Court and in the Privy Council have construed “fisheries” as meaningsomething in the nature of a resource. 38 More recently, in Comeau’s Sea Foods Ltd. v.

Canada (Minister of Fisheries and Oceans), (SCC), [1997] 1S.C.R. 12, Major J. noted that the Minister’s duty under the Fisheries Act extends beyond conservation to management and developmentof the fishery for the benefit of the public, stating (at para. 37): Canada’s fisheries are a “common property resource”, belonging to all the people of Canada. Under the Fisheries Act , it is theMinister’s duty to manage, conserve and develop the fishery on behalf of Canadians in the public interest (s. 43). 39 In Gulf Trollers Assn. v.

Canada (Minister of Fisheries and Oceans), (FCA), [1987] 2 F.C. 93 (rev’g (FC), [1984] 2 F.C. 398 (T.D.)), the Federal Court of Appeal directly confronted whether the federal fisheries power isconfined to conservation of the fish stock. At issue were federal regulations for closing times that favoured sports fishers overcommercial fishers. At trial, Collier J. held that the fisheries power did not extend to the general management and control of the fisheriesfor the benefit of Canadians beyond mere protection and preservation of the resource.

The Federal Court of Appeal reversed the decision.Marceau J.A. expressed the view that “Parliament may manage the fishery on social, economic or other grounds, either inconjunction with steps taken to conserve, protect, harvest the reserve or simply to carry out social, cultural or economic goalsand policies” (p. 106). 40 Moreover, the courts have rejected the view that the federal power extends only to management of fisheries in their natural stateand terminates prior to the point of sale. In British Columbia Packers Ltd. v.

Canada Labour Relations Board, (FCA),[1976] 1 F.C. 375 (C.A.) (appeal to S.C.C. dismissed on other grounds, (SCC), [1978] 2 S.C.R. 97), Jackett C.J.remarked that the fisheries power does not extend to the “making of laws in relation to things reasonably incidental to carrying on afishing business, such as labour relations and disposition of the products of the business, when such things do not in themselves fallwithin the concept of ‘fisheries’” (p. 385 (emphasis deleted)).

However, it is clear that aspects of sale that are necessarily incidental tothe exercise of the fisheries power fall within federal jurisdiction: see R. v. N.T.C. Smokehouse Ltd. (1993), (BC CA),80 B.C.L.R. (2d) 158 (C.A.); R. v. Saul (1984), (BC SC), 10 D.L.R. (4th) 736 (B.C.S.C.); R. v. Twin (1985), 1985ABCA 254 , 23 C.C.C. (3d) 33 (Alta. C.A.). The rationale is that the federal government may limit sales in order to preventinjurious exploitation of the resource.

It therefore appears that no bright line can be drawn at the point of sale for the purposes ofdefining the scope of the federal fisheries power. 41 These cases put beyond doubt that the fisheries power includes not only conservation and protection, but also the general“regulation” of the fisheries, including their management and control.

They recognize that “fisheries” under s. 91(12) of theConstitution Act, 1867 refers to the fisheries as a resource; “a source of national or provincial wealth” (Robertson, supra, at p. 121); a“common property resource” to be managed for the good of all Canadians (Comeau’s Sea Foods, supra, at para. 37). The fisheriesresource includes the animals that inhabit the seas. But it also embraces commercial and economic interests, aboriginal rightsand interests, and the public interest in sport and recreation. … 43 Thus we have before us two broad powers, one federal, one provincial.

In such cases, bright jurisdictional lines are elusive.Whether a matter best conforms to a subject within federal jurisdiction on the one hand, or provincial jurisdiction on the other, can onlybe determined by examining the activity at stake. Measures that in pith and substance go to the maintenance and preservation of fisheriesfall under federal power. By contrast, measures that in pith and substance relate to trade and industry within the province have been heldto be outside the federal fisheries power and within the provincial power over property and civil rights. 44 The cases bear this out.

Measures whose essence went to the regulation of fish processing and labour relations in the fishery havebeen held to fall outside the federal power.

On the other hand, measures primarily related to the regulation of the fisheries resource butincidentally touching the sale of fish have been upheld as valid federal legislation. (Emphasis added) (Also see Association des Senneurs at para 25; aff’d 2001 FCA 276 , where this Court stated that “the Minister has the power to managefishing in accordance with social, economic or other factors”; Gulf Trollers at paras 16-17; Malcolm at para 52). [47] In Tucker, Justice Rothstein, then of this Court, held that the policy of the Fisheries Act and the considerations that arerelevant to the exercise of the Minister’s discretion under s 7 of the Act were those set out in Comeau’s Sea Food.

Specifically, that

under the Fisheries Act it is the duty of the Minister to manage the fisheries. Licencing to restrict entry into a commercial fishery and tolimit the number of fishermen and vessels was an instrument or device available to the Minister to carry out such management (at para17). And, having regard to the Minister’s duty to manage the fishery and the “unlimited breadth of his

section 7 discretion in respect oflicencing” there was nothing unreasonable about the Minister’s refusal to allow the plaintiff the opportunity to utilize both an inshoreand offshore licence at the same time (at para 18). [48] In Comeau’s Sea Foods, the question was whether the Minister, having authorized the granting of fishing licences, had theauthority to revoke that authorization.

The Supreme Court of Canada held that: [36] It is my opinion that the Minister’s discretion under s. 7 to authorize the issuance of licences, like the Minister’s discretion toissue licences, is restricted only by the requirement of natural justice, no regulations currently being applicable. The Minister is bound tobase his or her decision on relevant considerations, avoid arbitrariness and act in good faith. The result is an administrative scheme basedprimarily on the discretion of the Minister: see Thomson v. Minister of Fisheries and Oceans, F.C.T.D., No. T-113-84, February 29,1984. [37] This

interpretation of the breadth of the Minister’s discretion is consonant with the overall policy of the Fisheries Act. Canada’sfisheries are a “common property resource”, belonging to all the people of Canada. Under the Fisheries Act, it is the Minister’s duty tomanage, conserve and develop the fishery on behalf of Canadians in the public interest (s. 43). Licencing is a tool in the arsenal ofpowers available to the Minister under the Fisheries Act to manage fisheries.

It restricts the entry into the commercial fishery, it limitsthe numbers of fishermen, vessels, gear and other aspects of commercial fishery. [49] The Supreme Court also found that the Minister’s wide discretion must be interpreted in light of the need to respond toimmediate policy concerns affecting the fishery (at para 46).

In that case, the Minister was not exercising his legislative function but wasrevoking an authorization in response to what he felt were pressing and immediate concerns in the lobster fishery. [50] In Carpenter Fishing, this Court found that the imposition of a quota policy, as opposed to the granting of a specific licence, isa discretionary decision in the nature of policy or legislative action.

And, so long as the Minster does not fetter his discretion by treatingthe guidelines as binding upon him, he may validly and properly indicate the kind of considerations by which he will be guided as ageneral rule when allocating quotas.

These discretionary policy guidelines are not subject to judicial review, save for the (Maple LodgeFarms Ltd v Canada, (SCC), [1982] 2 SCR 2 (“Maple Lodge Farms”)) exceptions: bad faith, non-conformity with theprinciples of natural justice where their application is required by statute, and reliance placed upon considerations that are irrelevant andextraneous to the statutory purpose (at para 28).

When addressing irrelevant purposes, the Court stated that permissible purposes foractions under the Fisheries Act are interpreted in a particularly broad way, citing Gulf Trollers at p 106, Comeau’s Sea Foods at pp 25-26and s 4(1) of the Department of Fisheries and Oceans Act, and concluded: 37 It follows that when examining the exercise by the Minister of his powers, duties, functions and discretion in relation to theestablishment and implementation of a fishing quota policy, courts should recognize, and give effect to, the avowed intent of Parliamentand of the Governor in Council to confer to the Minister the widest possible freedom to manoeuvre.

It is only when actions of theMinister otherwise authorized by the Fisheries Act are clearly beyond the broad purposes permitted under the Act that the Courts shouldintervene. [51] What can be taken from the above jurisprudence is, first, that the Parliament’s powers under s 91(12) are broad. The fisheriesare a common property resource and Parliament may properly manage and control that resource.

This is not limited to conservation ofthe fish stocks but includes management of the fishery on social, environmental or other grounds, either in conjunction with steps takento conserve, protect or harvest the resource or simply to carry out social, cultural or economic goals or policies. Further, it is theMinister’s duty to manage the fishery on behalf of Canadians and in the public interest, which includes licencing.

The Minister’sabsolute discretion in licencing, pursuant to s 7 of the Fisheries Act, permits him or her to validly consider social, cultural or economicgoals or policies when deciding whether or not to issue fishing licences. [52] In the context of this matter, the Minister’s statement introducing the PIIFCAF Policy indicated that the Minister stronglybelieved that an independent inshore commercial fishing fleet was an important element of an economically prosperous Atlantic Canadaand that the Policy underscored the government’s commitment to building a foundation of economic strength for Atlantic coastalcommunities.

Its goal was stated to be to strengthen the existing Owner-Operator and Fleet Separation Policies to ensure that fishharvesters remain independent and that the benefits of fishing licences flow to the fishers and Atlantic Canada communities. This is alsoreflected in the stated PIIFCAF objectives. [53] The PIIFCAF Policy itself states that, during the Atlantic Fisheries Policy Review, inshore fish harvesters repeatedly notedthat controlling agreements were undermining existing licencing policies, including the Owner-Operator and Fleet Separation Policies.

The PIIFCAF Policy strengthens those policies by addressing issues concerning controlling agreements and ensures that those who arebenefitting from the privilege of the licence are those who are actively engaged in the fishery. [54] Accordingly, in my view, the purpose of the PIIFCAF Policy clearly falls within Parliament’s broad powers to manage thefishery.

Further, it was an entirely relevant consideration of the Minister in exercising his discretion as to whether to issue a fishinglicence, pursuant to the authority conferred on him by s 7 of the Fisheries Act, in that it engages social and economic factors in managingthe fishery. The jurisprudence above clearly establishes that these are permissible factors for the Minister to take into consideration. [55] The Applicant, however, takes the position that the PIIFCAF Policy was an irrelevant, unconstitutional consideration becausethe PIIFCAF Policy would be ultra vires if it was enacted as legislation.

In this regard, the Applicant cites paragraph 172 of CanadianUnion of Public Employees (CUPE) at para 172 as standing for the principle that the Minister could not base his decision on irrelevantconsiderations. [56] I would first note that the PIIFCAF Policy is just that, policy. It was not enacted as a regulation or as legislation. Therefore,it cannot be subject to a division of powers challenge as being ultra vires. In Timberwest FC, the plaintiff challenged the validity of afederal scheme controlling the export of logs on the basis that the scheme, which was promulgated under a policy statement, was not

authorized by the relevant federal legislation and was unconstitutional as being an attempt by the federal government to regulate in areasof provincial jurisdiction. The plaintiff was not questioning a decision made by the Minister as to whether or not to grant an exportpermit, but questioned the validity of a policy issued by the Minister. This Court held that “[i]n our constitutional system, laws areconsidered unconstitutional for one reason or another, not policies. The plaintiff has not challenged the legislative provisions dealingwith the issuance of export permits” (at para 102).

The Federal Court of Appeal upheld the decision and stated that it is not the role ofthe courts to determine the constitutionality of policies and noted that the appellant had not challenged the validity of any provision ofthe relevant act (Timberwest FCA at para 3). [57] Further, paragraph 172 of Canadian Union of Public Employees (CUPE) is found in the portion of the Supreme Court ofCanada decision considering the exercise of discretion based on the weighing of considerations relevant to the object of a statute’sadministration, referencing case law, then considering that in relation to the test of patent unreasonableness on the facts of that case.

Inthat context it stated that “[t]he principle that a statutory decision maker is required to take into consideration relevant criteria, as well asto exclude from consideration irrelevant criteria, has been reaffirmed on numerous occasions.” The paragraph goes on to provide anexample of a case in which it was found to be an error that a decision-maker failed to take into account highly relevant considerations inreaching the decision. It says nothing regarding the inability of the Minister to rely on a policy that would be ultra vires Parliament if itwas enacted as legislation.

The Applicant provides no further support for that statement, and in my view, it is without merit. [58] The Applicant also submits that the PIIFCAF Policy is, in pith and substance, the regulation of contracts, being social andeconomic legislation unrelated to the protection of the fishery itself. Thus, it is not a valid exercise of federal fisheries powers pursuantto s 91(12) of the Constitution Act, 1867. In my view, as will be discussed below, a pith and substance analysis has no application to thismatter. Further, the PIIFCAF Policy is related to the fishery.

As is clear from the above jurisprudence, the broad authority conferred onthe Minister by

section 7 of the Fisheries Act engages social and economic factors in managing the fishery, which is what isencompassed by the PIIFCAF Policy, and is not restricted to the protecting of the fishery itself as the Applicant submits. And while theApplicant references Slaight Communications and Doré in support of his position, in my view they are of no assistance. In those casesthe issue was whether the administrative decision-makers exercised their statutory discretion in accordance with Charter (CanadianCharter of Rights and Freedoms,

Part I of the Constitution Act, 1982, being

Schedule B to the Canada Act 1982 (UK), 1982, c 11(“Charter”)) protections, which is not at issue in this matter. [59] The Applicant also submits that the Fisheries Act should be “interpreted in a manner consistent with the Constitution” and, assuch, the Minister’s power to issue licences under s 7 does not authorize decisions on the basis of the PIIFCAF Policy. In this regard theApplicant references McKay and Castillo as well as a quote from David Phillip Jones & Anne S de Villars, Principles of AdministrativeLaw, 6th ed (Edmonton: Carswell, 2014) (“Phillip & de Villars”).

However, those references support only the principle that legislationshould be interpreted in a way consistent with the Constitution, they go no further and do not address the

interpretation of legislation inthe context of policy asserted to exceed Parliament’s powers. [60] The reference quoted in Castillo reads as follows: 2.4 The Presumption Against Extra Territorial Effect 30 The legislative jurisdiction of the provinces is limited to matters “[i]n each Province” by the wording of s. 92 of the ConstitutionAct, 1867. Unless otherwise explicitly or implicitly provided, legislatures are presumed to respect the territorial limits of their legislativepowers: Côté, at pp. 200-203. If possible, legislation should be construed in a manner consistent with this presumed intent.

Similarly, it isnow accepted that where legislation is open to more than one meaning, it should be interpreted so as to make it consistent with theConstitution: McKay v. The Queen, (SCC), [1965] S.C.R. 798, at p. 803; Slaight Communications Inc. v. Davidson, (SCC), [1989] 1 S.C.R. 1038, at p. 1078. [61] Similarly, the quote from Phillip & de Villars pertains to a discussion of the differences between the Canadian and Britishsystems of government when challenging government actions.

When describing federalism, the division of legislative powers and thedetermination of whether legislation is unconstitutional, Phillip & de Villars states at pp 28-29: …When courts characterize legislation for constitutional purposes they do so on the basis of its overall essential nature - its so-called“pith and substance” - and disregard its lesser “incidental” characteristic. The courts have the duty to determine whether particularlegislation is unconstitutional, and they cannot be deprived of this power by procedural devices.

It logically follows that neither the Federal Parliament nor a Provincial Legislature may attempt to enact legislation which purport todelegate powers which are not assigned to it under the Constitution.

Thus, the validity of delegated legislation or of any other form ofdelegated powers depends upon the constitutional validity of the parent Act… (footnotes omitted) [62] It is difficult to see how these references support the Applicant’s assertion that the Minister is precluded from considering thePIIFCAF Policy in refusing to issue licences, because, in the Applicant’s view, the PIIFCAF Policy falls outside federal fisheries powersand therefore is an irrelevant consideration.

What they support is that legislation can be challenged on the basis that it is ultra vires theConstitution, but the Applicant in this case has not challenged s 7 of the Fisheries Act. [63] Indeed, in its Notice of Constitutional Question, filed pursuant to s 57(1) of the Federal Courts Act, RSC 1985, c F-7 theApplicant asserts that one of the basis for bringing the application for judicial review was that the Minister “relied upon constitutionallyimpermissible considerations” as the existence of controlling agreements is a matter of property and civil rights in the province divorcedfrom the subject matter of the fisheries power in s 92(12) of the Constitution Act, 1867.

The Applicant described the legal basis for theconstitutional question as follows:

Section 7 of the Fisheries Act does not authorize the Minister to make licencing decisions on the basis of the existence of aControlling Agreement between a fish harvester and a fish processor. That is a matter which is in pith and substance in relation tocontracts, and thus not a valid exercise of s. 91(12) of the Constitution Act, 1867 (the “Fisheries Powers”). PIIFCAF governs the

economic relations ships between the fish harvesters and fish processors, and is aimed at preserving the independence of the harvestingsector and the economic interests of certain isolated rural communities. It is based on considerations which, if enacted by Parliament,would be ultra vires Federal jurisdictions. 8. Significantly, PIIFCAF is not a regulation, and the Applicant is not challenging the constitutionality of PIIFCAF as aregulation. Therefore it is the Applicant’s Position that this Notice of Constitutional Question is not required, but he is filing thisNotice out of an abundance of caution. 9.

Put simply, the Federal Fisheries Power can only be exercised when there is a constitutionally valid connection to the subjectmatter of s. 92(12), being the fishery as a resource. PIIFCAF governs contractual relationships that are unconnected with those matters. 10.

The Fisheries Act should be interpreted in a constitutional manner, and, as such, did not authorize the Minister to reach thisDecision on the basis of PIIFCAF. (emphasis in original) [64] I fail to see how, if the constitutionality of a policy is not subject to challenge, the Applicant can attack a discretionarydecision of the Minister on the basis that the policy upon which it was based was, in essence, unconstitutional. In my view, in theabsence of a challenge to s 7 of the Fisheries Act, the Applicant’s approach cannot succeed.

And, even if the Applicant had challenged s7 of the Fisheries Act, in this case the Minister’s authority was not exceeded, because, as noted above, the Minister can take intoconsideration economic and social factors when making policy and licencing decisions. [65] In

summary, while it is beyond question that the Minister’s authority exercised under

section 7 of the Fisheries Act must fallwithin Parliament’s s 91(12) powers, the Applicant’s submission that the Minister cannot base his decision on a policy that would beultra vires Parliament if it was enacted as legislation and that the PIIFCAF Policy, as such, was an irrelevant unconstitutionalconsideration, is not supported by jurisprudence.

The Applicant provides no authority that the Minister’s considerations must, in and ofthemselves, be constitutional. [66] Although I have found that the PIIFCAF Policy is not subject to a division of powers challenge, even if I am incorrect, in myview the PIIFCAF Policy in pith and substance is a valid exercise of the federal fisheries power pursuant to s 91(12) of the ConstitutionAct, 1867. [67] The approach for a pith and substance analysis was described by the Supreme Court of Canada in Fédération des producteursde volailles du Québec v Pelland, 2005 SCC 20 , [2005] 1 SCR 292 (SCC): 20 The requisite approach was recently discussed by LeBel J. in Kitkatla Band v.

British Columbia (Minister of Small Business,Tourism and Culture), [2002] 2 S.C.R. 146, 2002 SCC 31, at paras. 53-54, a case involving provisions of the Heritage Conservation Act,R.S.B.C. 1996, c. 187: A pith and substance analysis looks at both (1) the purpose of the legislation as well as (2) its effect. First, to determine the purpose ofthe legislation, the Court may look at both intrinsic evidence, such as purpose clauses, or extrinsic evidence, such as Hansard or theminutes of parliamentary committees.

Second, in looking at the effect of the legislation, the Court may consider both its legal effect and its practical effect. In other words, theCourt looks to see, first, what effect flows directly from the provisions of the statute itself; then, second, what “side” effects flow fromthe application of the statute which are not direct effects of the provisions of the statute itself: see R. v. Morgentaler, (SCC), [1993] 3 S.C.R. 463, at pp. 482-83.

Iacobucci J. provided some examples of how this would work in Global Securities Corp. v.British Columbia (Securities Commission), [2000] 1 S.C.R. 494, 2000 SCC 21, at para. 23: The effects of the legislation may also be relevant to the validity of the legislation in so far as they reveal its pith and substance. Forexample, in Saumur v. City of Quebec, (SCC), [1953] 2 S.C.R. 299, the Court struck down a municipal by-law thatprohibited leafleting because it had been applied so as to suppress the religious views of Jehovah’s Witnesses. Similarly, in Attorney-General for Alberta v.

Attorney-General for Canada, (UK JCPC), [1939] A.C. 117, the Privy Council struck down alaw imposing a tax on banks because the effects of the tax were so severe that the true purpose of the law could only be in relation tobanking, not taxation. However, merely incidental effects will not disturb the constitutionality of an otherwise intra vires law. [Emphasisadded.] (See also P. W.

Hogg, Constitutional Law of Canada (loose-leaf ed.), vol. 1, at § 15.5(d)) [68] In Ward, in the context of a challenge for fisheries related regulation, the Supreme Court of Canada stated: 17 The first task in the pith and substance analysis is to determine the pith and substance or essential character of the law. What isthe true meaning or dominant feature of the impugned legislation? This is resolved by looking at the purpose and the legal effect of theregulation or law: see Reference re Firearms Act, supra, at para. 16.

The purpose refers to what the legislature wanted to accomplish.Purpose is relevant to determine whether, in this case, Parliament was regulating the fishery, or venturing into the provincial area ofproperty and civil rights. The legal effect refers to how the law will affect rights and liabilities, and is also helpful in illuminating the coremeaning of the law: see Reference re Firearms Act, supra, at paras. 17-18; Morgentaler, supra, at pp. 482-83.

The effects can also revealwhether a law is “colourable”, i.e. does the law in form appear to address something within the legislature’s jurisdiction, but in substancedeal with a matter outside that jurisdiction?: see Morgentaler, supra, at p. 496. In oral argument, Ward expressly made clear that he is notchallenging the law on the basis of colourability. 18 The pith and substance analysis is not technical or formalistic: see P. W. Hogg, Constitutional Law of Canada (loose-leaf ed.),vol. 1, at p. 15-12. It is essentially a matter of

interpretation. The court looks at the words used in the impugned legislation as well as thebackground and circumstances surrounding its enactment: see Morgentaler, supra, at p. 483 ; Reference re Firearms Act, supra, at para.

17. In conducting this analysis, the court should not be concerned with the efficacy of the law or whether it achieves the legislature’sgoals: see RJR-MacDonald Inc. v. Canada (Attorney General), (SCC), [1995] 3 S.C.R. 199, at para. 44, per La Forest J.;Reference re Firearms Act, supra, at para. 18. 19

Section 27 of the Regulations, read alone, is simply a prohibition of sale, trade or barter, suggesting it might fall within theprovincial rather than federal domain. However, we cannot stop at this point. We must go further. What is the purpose of s. 27, and whatis its effect? How does it fit into the regulatory scheme as a whole? The question is not whether the Regulations prohibit the sale somuch as why it is prohibited. [69] The Supreme Court went on to find in Ward that the purpose was clear from the Regulations as a whole and the legislativehistory.

Section 27 of the regulations was intended to control the killing of bluebacks and whitecoats, by prohibiting their sale, as thereaction to the harvesting of these seal pups destroyed the traditional seal markets and was threatening markets for Canadian fishproducts abroad. The Court found that the prohibition on sale was not directed to controlling commerce, but to preventing the harvestingof those seals.

Situating s 27 in its context supported the view that it was neither directed at property nor at trade, but at curtailing thecommercial hunting of bluebacks and whitecoats and that the prohibition existed in the context of a scheme that was concerned with theoverall management and control of the marine fisheries resource: 24 I conclude that Parliament’s object was to regulate the seal fishery by eliminating the commercial hunting of whitecoats andbluebacks through a prohibition on sale, while at the same time allowing for limited harvesting of these animals for non-commercialpurposes.

Stated another way, the “mischief” that Parliament sought to remedy was the large-scale commercial hunting of whitecoats andbluebacks. This was done to preserve the economic viability of not only the seal fishery, but the Canadian fisheries in general. [70] As to the effects of the legislation: 25 Turning to the effects of the legislation, s. 27 affects the legal rights of its subjects by prohibiting the sale of whitecoats andbluebacks that have otherwise been legally harvested. Ward submits that the legal effect of s. 27 is to regulate the property andprocessing of a harvested seal product.

The argument amounts to saying that because the legislative measure is a prohibition on sale, itmust be in pith and substance concerned with the regulation of sale. This confuses the purpose of the legislation with the means used tocarry out that purpose. Viewed in the context of the legislation as a whole and the legislative history, there is nothing to suggest thatParliament was trying to regulate the local market for trade of seals and seal products.

Ward’s argument that s. 27 is directed at regulatingan already processed product because the seals are skinned and the meat preserved on the vessel similarly confuses the purpose of s. 27with the means chosen to achieve it. … 28 I conclude that the s. 27 prohibition on sale is essentially concerned with curtailing the commercial hunting of whitecoats andbluebacks for the economic protection of the fisheries resource.

As such, it is in pith and substance concerned with the management ofthe Canadian fishery. [71] In my view, the reasons and result of the pith and substance analysis of the impugned regulatory provision in Ward aredirectly on point if the PIIFCAF Policy were subject to that analysis, which, as I have stated above, I do not believe to be the case. [72] The purpose of the PIIFCAF Policy, as it clearly explained and is seen from the record which sets out the history leading up tothe enactment of the Policy, was to ensure that inshore fish harvesters remained independent and that the benefits of the fishing licencesflowed to the fishers and coastal communities which rely upon them.

To achieve this object, the Policy put in place an Independent Corecategory as the new eligibility criteria for inshore fish harvesters who are the head of a Core Enterprise. To be eligible to have theirlicences renewed after 2014, those fishers would have to exit their controlling agreements or to amend them so as to be in compliancewith the Policy requirements. This was done because the Minister had determined that controlling agreements, which were devised todefeat the existing licencing policies, resulted in negative socio-economic consequences for coastal communities.

To remedy this‘mischief’ the Minister implemented the PIIFCAF Policy, a companion to existing policies, which is aimed at fish harvesters andachieves its purpose by eliminate controlling agreements by tying them to licence eligibility criteria. Viewed in context, it is clear thatthe PIIFCAF Policy is not directed at the regulation of the fish processing industry or contracts.

It is intended for the propermanagement and control of the fishery. [73] The direct effect of the PIIFCAF Policy is that an individual fish harvester licence holder, or head of a Core Enterprise, whocontinues to be a party to a controlling agreement is not eligible for a licence renewal. The broader effect of the Policy is that fishprocessing corporations are prevented from exerting licence control in the inshore fishing industry.

The PIIFCAF Policy only deals withthe eligibility criteria for licences, it does not prevent licence holders from entering into contracts, obtaining financing, using their licenceas collateral, supplying their catch to whomever they wish or otherwise organizing their business affairs as they see fit. It does notfrustrate contracts. It is not concerned with the regulation of the economic relationships that surround the fishery, including contractsbetween fish processors and fish harvesters. The Policy is aimed at a broader purpose.

The fact that the PIIFCAF Policy incidentallytouches on contracts does not result in a finding that it is ultra vires the jurisdiction of Parliament, if a policy could be challenged in thatregard. I also do not accept the Applicant’s submission that the PIIFCAF Policy must have connection to fish stocks or conservation inorder to be a valid exercise of s 91(12). Ward and other jurisprudence noted above make it clear that the fisheries resource includescommercial and economic interests.

The scope of the fisheries power is broad, and in my view, the management of the inshore fishery isa valid matter authorized by s 91(12). [74] Accordingly, while I do not believe the analysis to be applicable, if it is, then the pith and substance of the PIIFCAF Policy isthe management of the inshore fishery and protecting the economy of coastal communities who depend on the resource.

This is a validexercise of s 91(12) powers, and it does not trench upon s 92(13) provincial powers concerning property and civil rights or s 92(16)matters of a local or private nature in the province. [75] In conclusion, for the reasons above it is my view that the existence of controlling agreements and the PIIFCAF Policy, whichaims to eliminate such agreements by way of licence eligibility requirements, is a relevant factor for the Minister to consider in issuing

licences to fish under

section 7 of the Fisheries Act. Issue 3: Did the Minister reasonably exercise, or did he fetter,his discretion? Applicant’s Position [76] The Applicant submits the decision is unreasonable because the Minister fettered his absolute discretion by treating thePIIFCAF Policy as mandatory and failing to consider the Applicant’s individual circumstances (Telecommunications Workers Union vCanada (CRTC), (SCC), [1995] 2 SCR 781 at para 37; Stemijon at paras 20-25, 28, 43, 60; Canada (MNR) v JPMorgan Asset Management (Canada) Inc, 2013 FCA 250 , [2014] 2 FCR 557 (CA) at paras 72-73).

Further, the Ministercannot fetter his discretion by treating guidelines as binding upon him on him (Maple Lodge Farms at p 6-7 ), but must consider theevidence in whole (Kanthasamy v Canada (Minister of Citizenship and Immigration), 2015 SCC 61 at paras 32, 60 (“Kanthasamy”)). [77]

Section 7 of the Fisheries Act grants the Minister “absolute discretion” in issuing licences. This broadest discretion is subjectonly the requirements of natural justice (Saulnier v Royal Bank of Canada, [2008] SCR 166 at paras 33, 39, 48 (“Saulnier”)) and requiresthe Minister to base his or her decision on relevant considerations, avoid arbitrariness, and act in good faith (Comeau’s Sea Foods atparas 22, 36-37, 39, 46, 49).

A Minister cannot convert a policy into a regulation by treating it as binding (Tucker at para 19; CarpenterFishing at paras 28, 29, 35, 37; Saulnier at para 24). [78] The Applicant submits that in this matter the Minister fettered his discretion for three reasons.

First, the PIIFCAF Policyitself purports to create mandatory requirements for individual fish harvesters as it requires that all heads of Core Enterprises filedeclarations that they are not in a controlling agreement every time they request a licence and that they will not be issued a licence if theyfail to meet the Independent Core eligibility requirement. The PIIFCAF Policy also provides that licence holders who remain a party to acontrolling agreement will not be eligible to be issued a licence.

Moreover, the PIIFCAF Policy declaration form describes itself asmandatory in that any fish harvester seeking to be categorized as Independent Core or seeking to be issued a replacement or new licence,must declare whether he or she is a party to a controlling agreement. [79] The thrust of the Policy as a whole is mandatory in nature; it contains no indication that the particular circumstances of thecase must be considered nor does it provide criteria for determining whether or not discretion is to be exercised (Ha v Canada (Ministerof Citizenship & Immigration), 2004 FCA 49 at paras 74-75 (“Ha”)).The PIIFCAF Policy thereby operated as a fetter on the Minister’sdiscretion.

And, although the Policy states that it is not binding on the Minister and does not fetter his or her discretion, the Applicantsubmits that this reference pertains only to fishing fleets, and not individual fish harvesters, because the identified exemptions concernonly fleets.

The PIIFCAF Policy contains no exemptions in relation to individual fish harvesters and the only flexibility it offered forindividual fish harvesters expired on March 31, 2009 (s 10). [80] The Applicant further submits that in a discussion document entitled “Preserving the Independence of the Inshore Fleet inCanada’s Atlantic Fisheries”, the DFO conceded that the PIIFCAF policy could not be implemented as a regulation because prohibitingparties from entering a contract or dictating the terms of a contract would interfere with private financial transactions and fall outsideDFO’s jurisdiction.

Because of this, the PIIFCAF Policy is enforced indirectly through the Minister’s “absolute discretion” under s 7 ofthe Fisheries Act. [81] Second, the Applicant submits that the PIIFCAF Policy permits no exemptions for individual fish harvesters. This isdemonstrated, beyond the PIIFCAF Policy itself, by statements of the Minister in a 2014 radio interview, an information packageprovided to licence holders when the PIIFCAF Policy was released, statements made by the Minister’s affiant, Mr.

Morley Knight(“Knight”), Regional Director General, Maritimes Region at the DFO, during cross-examination, and statements made by Mr. GabrielGregory (“Gregory”) (management consultant who provides consulting services to the seafood industry in Atlantic Canada), andMr. Derek Butler (“Butler”) (Executive Director and Chair of the Board of the Association of Seafood Producers) each of whom filed anaffidavit in support of the Applicant’s application for judicial review. On cross examination, Knight gave evidence that he was notaware of any exemption to the PIIFCAF Policy ever being granted.

The Applicant submits that in Ha (at para 77), the Federal Court ofAppeal relied on a similar lack of evidence that the decision maker had ever departed from a policy preventing legal counsel fromattending visa officer interviews to find that his discretion had been fettered. This is in contrast to Thamotharem v Canada (Minister ofCi

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