Ruling that prevents corporate takeover of inshore fishery faces appeal

The Newfoundland and Labrador seafood industry is behind an appeal of a Federal Court of Canada decision upholding DFO's right to stop controlling agreements.

Federal Court of Canada judge upheld DFO crackdown on 'controlling agreements'

Some observers describe the fight against controlling agreements as a fight for survival of the inshore fishery in Canada. (CBC)

The Newfoundland and Labrador seafood industry is behind an appeal of a recent Federal Court of Canada decision that upheld Ottawa's right to prevent the corporate takeover of inshore fisheries in Atlantic Canada and Quebec.

The June 5 appeal was filed at the 30-day deadline. No court date has yet been set to hear the appeal.

Last month, Justice Cecily Strickland ruled the federal fisheries minister was entitled to strip fishing licences from Labrador fisherman Kirby Elson. Elson was a placeholder on a snow crab licence controlled by two related Newfoundland processing companies.

'It's a fight for survival'

The Elson decision was hailed as a victory by some inshore fisheries organizations and the Department of Fisheries and Oceans. They argue controlling agreements are used by companies to get around longstanding policies that local fishermen control inshore licenses and the profits that come from them.

"We're watching this because it has or could have a huge impact on the inshore fishery in Canada, depending on the outcome," said Melanie Sonnenberg, president of the Canadian Independent Fish Harvesters Federation.

"The inshore fishery, if we are to let it go by way of the corporations, will be the end of coastal Canada as we know it. It's a fight for survival in terms of independent owner-operators in the fishery."

Elson's 2003 controlling agreement with Quinlan Brothers Ltd. and Labrador Sea Products Inc. gave the companies total control over every aspect of a licence — even in death. The companies provided the vessel, the crew, financed the boat and reaped the profits.

Elson a test case

DFO set a 2014 deadline for fishermen to exit controlling agreements.

Elson was the only fisherman in the region who explicitly refused, and he became the test case when industry filed for a judicial review of the fisheries minister's decision to take his licence away.

The case brought forward by Kirby Elson, centre, has important ramifications for the independence of the inshore fishery. (CBC)

The companies — through Elson's appeal — argued the minister had no right to interfere in what was a commercial contract. Strickland rejected that argument on a key point.

"The minister's absolute discretion in licensing … permits him or her to validly consider social, cultural or economic goals or policies when deciding whether or not to issue fishing licences," the judge wrote in the 87-page decision.

Too poor to fish

Elson has refused to say who paid for his legal challenge.

The Cartwright, N.L., fisherman — who said in an affidavit he was too poor to fish — was represented by one of Canada's biggest law firms: McCarthy Tétrault of Toronto.

Quinlan Brothers denies it is directly behind the legal challenges and referred inquiries to the Association of Seafood Producers in St. John's. The 15-member association has refused to discuss the case.

Grounds for appeal?

Strickland did uphold one industry legal argument, finding that in denying Elson's appeal, the minister's decision letter limited his discretion.

The letter identified a new policy to preserve the independence of the inshore fishery as the only avenue open to an exemption, when the minister had broader authority to grant Elson relief in an appeal.

However, Strickland concluded it did not matter because the minister "could not reasonably reach a different outcome on the facts and law."

About the Author

Paul Withers


Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.