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EDITORIAL: Closing the door on controlling agreements

<p>The commercial mackerel fishery (both inshore and offshore) was closed early this year because the quota was reached for the first time. Researchers are reaching out to fishermen through a survey to gather information for stock management.</p>
- Wikimedia Photo

The simplest explanation?

If you’re told you’re not allowed in the house, it doesn’t matter whether you go in the front door or sneak in the back.

You’re still not allowed in the house.

Last Friday, the Federal Court of Appeal issued the latest decision in the Kirby Elson case. It’s a case about how far fishing companies can use their financial clout to vertically integrate in the fishery.

Elson doesn’t fish, at least not in the normal way you might expect, by owning a boat and hiring crew: he says he can’t afford to fish any other way, though, and that he should get to keep his licence despite the rules.

Instead, he signed a controlling agreement that allows fishing companies to fish his licence. As his lawyers put it, “(T)he corporation with which he has entered the agreement provides a vessel, crew and support, and finances the license. He depends on this relationship for his livelihood and, without it, will lack the license funding, vessel, employees, connections, suppliers and capital required to continue to fish on his own.”

The problem with that situation is that federal licencing rules prevent fishing companies from holding licences for vessels in the under-65 foot category. The rules are a way to keep fishing companies with deep pockets or other financial resources from pushing ordinary harvesters out of the business.

They can’t do it through the front door by buying licences, and the federal government has ruled they can’t do it through the back door by leaving someone as a fishing licence holder in name only either.

You can understand why Elson wanted an exemption to the rules.

But the Federal Court of Appeal wasn’t having it.

“The authority of any federal minister to issue a licence includes the right to ensure that the person to whom a licence is granted is actually the person who is acquiring that licence and that such person is not simply acting on behalf of and for the benefit of another person who would not be eligible to obtain that licence. In this case, as a result of the controlling agreement, Mr. Elson had effectively transferred to Labrador Sea Products Inc. and Quinlan Brothers Limited all of his rights to exploit the licences that were issued in his name and his control over these licences,” the judges wrote. “These companies acquired the benefit of these fishing licences and the right to exploit the fisheries resource related thereto. As a result of the Fleet Separation Policy (which has been in place since 1979), this is something that these companies could not do. These companies would, therefore, be doing indirectly what they could not do directly.”

It’s clear that both doors are pretty much closed.

Until the next effort.

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