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Aquaculture Regulatory Decisions: The Critical Role of Industry Engagement

Published:

June 6, 2022

Author(s):

• J. Alex Templeton
• Peter MacKay, PC, KC

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The Federal Court’s April 22, 2022 decision in Mowi Canada West Inc. v. Canada (Fisheries, Oceans and Coast Guard) has implications for the fisheries sector across Canada. Notable both for its outcome, and for what it says about ministerial decision-making, the Court set aside the controversial decision of the former Minister of Fisheries, Oceans and the Canadian Coast Guard to phase-out aquaculture licences in the Discovery Islands Region of British Columbia. The Court’s decision highlights two key problems recurrent in aquaculture regulatory decisions across Canada when they tend to be politically-driven: the lack of clear, intelligible decisions, and the mischaracterization of ministerial licensing decisions as policy decisions. Increased industry engagement can play a critical role in resolving both problems.

The Lack of Clear, Intelligible Decisions

The Mowi decision highlights the lack of justification, transparency and intelligibility in ministerial decisions impacting the aquaculture industry. In Mowi, the lack of clear reasons from the Minister ultimately favoured fish-farmers. But in many other cases, it has had the reverse effect. For example, the 2021 Newfoundland and Labrador Court of Appeal’s decision in Northern Harvest Smolt Ltd. v. Salmonid Association of Eastern Newfoundland, dealt with a ministerial decision regarding environment assessment that exhibited the same problem as did that in Mowi: inadequate explanation, insufficient elaboration on critical issues and unsupported logic. But in Northern Harvest Smolt, the Court’s decision striking down the ministerial decision as unreasonable, on the same basis as did the Court in Mowi, was ultimately against the interests of fish-farmers. Both the Mowi and the Northern Harvest decisions, and others like them, illustrate the implicit danger in applying a political, and sometimes partisan external, lens to a science-based and legally regulated industry.

The Problem. Courts are increasingly focused on promoting a culture of justification in ministerial decision-making. Clear, reasoned decision-making is critical to the aquaculture industry, and to developing confidence and progress forward; yet ‘government linguistics’ fail to give the industry clear direction, causing enormous frustration (learn more about this issue in Growing Out Atlantic Canada’s Aquaculture Industry). In Mowi, the Court addressed this issue head-on: “[t]he problem in this case in applying the current test of reasonableness is, first, the absence of reasons.” The Court found the Minister’s attempt to subsequently explain her decision through affidavit evidence improper, confirming affidavit evidence in this context “cannot be used as an after-the-fact means of augmenting or bootstrapping the reasons of the decision-maker.” The Minister was required to demonstrate that she had been alert and sensitive to the matter before her – that she had “meaningfully grappled” with the key issues – when she made the decision. The Court found the Minister had failed to do so: “The Decision, in the absence of reasons, cannot be justified. In the absence of reasons, it is not transparent. In the absence of reasons, it is not intelligible.” It was, therefore, not defensible. And indefensible decisions expose industry members to the uncertainty that a court could strike the decision down – and that could go either way.

The Engagement Solution. Greater industry engagement at the time government makes critical decisions is one solution to this problem. Aquaculture proponents and operators have a role to play in demanding that government produce intelligible reasons: reasons that explain why a decision was made, at the time it was made. It’s not good enough for industry members to merely get the decision they want. That decision must be defensible; it must be impervious to challenge; it must provide certainty. In an industry that, historically, already faces tremendous uncertainty based on volatility of catches, weather, regulation, and more, avoiding additional uncertainty created by unjustified, and some might say unnecessary, Ministerial interventions is a critical consideration.     

The Mischaracterization of Licensing Decisions As Policy Decisions

The Mowi decision also highlights competing characterizations of ministerial decisions as either licensing decisions or policy decisions. This characterization is important: licensing decisions require procedural fairness to licensed aquaculture operators; policy decisions do not. In Mowi, the Minister tried to dress her decision as a policy one. The Court wouldn’t have it.

The Problem. The Minister argued the decision to phase-out licenses was a policy decision, entirely within her discretionary authority and jurisdiction regarding management of fisheries, and not a licensing decision that raised a duty of procedural fairness towards the aquaculture operators. The Court disagreed. Favouring the fish-farmers’ argument, the Court concluded the Minister’s decision was a licensing decision, affecting licensees’ continued operation of their fish-farms and the transfer of fish into the farms, and attracting a duty of procedural fairness towards the licensees.

The Engagement Solution. This is such an important finding: fish farmers’ licences afford them procedural rights that are a critical trigger for engagement. The Court recognized the Minister owed licensed aquaculture operators procedural fairness, which included a right to be notified, consulted and heard. They had legitimate expectations that they would be informed and would have opportunity to raise their concerns with the Minister before she made the decision, based in part on the process in the past. They had a right to be engaged. As the Court recognized in Mowi, fish-farmers make significant investments and detailed plans for the growth and harvest of their fish stocks based on their licences. The economic consequences of abruptly terminating the licensed activity are significant. Fish-farmers’ assertion of their procedural rights and regulators affording them full opportunity to engage will ultimately force intelligible – and thus reliable – decision-making.

Please contact your McInnes Cooper lawyer or any member of our Fish, Seafood & Aquaculture Industry Team @ McInnes Cooper to discuss how regulatory decisions impact your aquaculture or other operations.

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