Nunavut Tunngavik Incorporated v. Canada (Minister of Fisheries and Oceans)

Nunavut Tunngavik Incorporated v. Canada (Fisheries and Oceans)
Court (s) Database
Federal Court Decisions
Date
2024-04-26
Neutral citation
2024 FC 649
File numbers
T-1362-21
Decision Content
Date: 20240426
Docket: T-1362-21
Citation: 2024 FC 649
Ottawa, Ontario, April 26, 2024
PRESENT: The Honourable Mr. Justice Favel
BETWEEN:
NUNAVUT TUNNGAVIK INCORPORATED AND THE QIKIQTANI INUIT ASSOCIATION
Applicants
and
THE MINISTER OF FISHERIES AND OCEANS, CLEARWATER SEAFOODS LIMITED PARTNERSHIP, AND
FNC QUOTA LIMITED PARTNERSHIP
Respondents
JUDGMENT AND REASONS
I. Overview [1] Nunavut Tunngavik Incorporated [NTI] and the Qikiqtani Inuit Association [QIA] [together, the Applicants] seek judicial review of a July 16, 2021 decision [Decision] by the Minister of Fisheries and Oceans [Minister] to approve the reissuance of one Greenland halibut and two Northern shrimp fishing licences in waters adjacent to the territory of Nunavut from Clearwater Seafoods Limited Partnership [Clearwater] to FNC Quota Limited Partnership [FNC Quota].
[2] At issue is a consideration of the Minister’s authority for the issuance or reissuance of licences pursuant to section 7 of the Fisheries Act, RSC, 1985, c F-14 [Fisheries Act] in light of the limitations placed on the Minister’s authority pursuant to article 15.3.7 of the Agreement between the Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada [Nunavut Agreement], a constitutionally protected modern day treaty.
[3] The application for judicial review is granted.
II. Background A. Parties [4] Together, NTI and QIA represent the Inuit of Nunavut as Designated Inuit Organizations under the Nunavut Agreement. NTI represents Inuit from all three regions of Nunavut (Qikiqtani, Kivalliq and Kitikmeot) and plays a central role in administering and implementing the Nunavut Agreement. QIA represents the Inuit of the Qikiqtani region where over half of all Inuit in Nunavut reside. As Designated Inuit Organizations, the Applicants are mandated to protect Nunavut Inuit rights and advance Inuit economic, social and cultural well-being through the implementation of the Nunavut Agreement.
[5] The Minister, Clearwater, and FNC Quota are all Respondents. The Minister is involved because it is responsible for the Department of Fisheries and Oceans [DFO], including the discretionary control of granting, issuing and transferring commercial fishing licences under section 7 of the Fisheries Act. Clearwater is a Nova Scotia based company and is one of the largest seafood companies in North America. Clearwater is the operating entity of Clearwater Seafoods Inc., which held all of the organization’s fishing licences that are at issue. FNC Quota is a company involved in the transfer or reissuance of the licences and is owned by seven Mi’kmaq communities in Nova Scotia [Mi’kmaq Coalition]. The Mi’kmaq Coalition also owns FNC Holdings Limited Partnership [FNC Holdings]. FNC Holdings, along with Premium Brands Holdings Corporation [Premium Brands], also jointly and equally own Clearwater as of January 25, 2021.
B. Context [6] While this matter does not involve the allocation of fishing quota, it is still helpful to review the applicable fishing regime. The Minister controls fishing of the Greenland halibut and Northern shrimp by setting an overall limit on the amount of the total allowable catch [TAC] that licence holders may fish within each regulatory region, then the TAC is distributed to individual licence holders as a “quota”. There are two relevant regulatory regions at issue here: the North Atlantic Fishing Organization sets the divisions for Greenland halibut quota and Canada sets the Shrimp Fishing Areas for Northern shrimp. This matter concerns one Greenland halibut licence (142081) located in Division 0B, which overlaps with Zone I as described in the Nunavut Agreement, and two Northern shrimp licences (11267 and 25784) in Davis Strait East and Davis Strait West (part of the Eastern Assessment Zone), which also overlap with Zone I.
[7] Prior to the creation of Nunavut, the Federal Government had introduced the Enterprise Allocation Program [EA Program] in Nunavut adjacent waters to prevent over-fishing. The EA Program provided large tracts of quota to a small number of companies that would be stable licence holders, limiting the number of participants with access to the market. None of the quota were provided to Nunavut Inuit.
[8] The Nunavut Inuit and Canada ratified the Nunavut Agreement in 1993. Article 15 of the Nunavut Agreement acknowledged the inequality of access to commercial fishery in off-shore adjacent waters by recognizing (1) Canada’s sovereignty over Arctic waters is supported by Inuit use and occupancy; and (2) the need for the development of an Inuit economy based on marine resources. Article 15.3.7 of the Nunavut Agreement recognizes the “principles of adjacency and economic dependence of communities in the Nunavut Settlement Area on marine resources” and requires the Minister to “give special consideration to these factors when allocating commercial fishing licences within Zones I and II.” Article 15.3.7 also defines adjacency as “adjacent to or within a reasonable geographic distance of the zone in question.”
[9] Government and Senate committees have recommended that the Minister grant increased access to Nunavut interests in off-shore fisheries. In 2002, the Independent Panel on Access Criteria concluded that Nunavut interests’ access to marine resources lagged behind their coastal counterparts and recommended that no additional access be granted to non-Nunavut interests in waters adjacent to Nunavut until the territory has achieved access to a major share of its adjacent fisheries resources. In 2004 and 2009, Canada’s Standing Senate Committee on Fisheries and Oceans found that Nunavut interests in off-shore commercial fisheries lagged behind the 80-90% access enjoyed by Atlantic provinces in their adjacent waters and it urged the Minister to ensure that Nunavut received the primary benefit from the resources of their shore.
[10] As of 2021, Nunavut’s share was approximately 76% of Greenland halibut quota in Areas 0A and 0B, which is an increase from 27.2% in 2002. Division 0A is now held 100% by Nunavut interests, but it was previously an exploratory fishery due to barriers such as it having a shorter season and the area being less economically viable. Division 0B was an area where the Minister allocated quota to Nunavut interests and the EA Program. Nunavut’s share of the Northern shrimp quota is 38.5%, which is about a 5% increase from 2002. The growth in both fisheries is a result of DFO increasing the TAC and not due to any new or transferred licences. In contrast, Atlantic based fisheries entities from adjacent provinces hold 90% of allocations.
[11] The issue of applying the principles of Article 15.3.7 to decisions about commercial licences has been the subject of several cases before the Federal Courts, including Nunavut Wildlife Management Board v Canada (Minister of Fisheries and Oceans), 2009 FC 16 [Nunavut Wildlife]. Nunavut Wildlife concerned the permanent transfer of licences from Seafreez Foods Inc. to Clearwater and involved essentially the same Greenland halibut quota. The Court did not set aside the decision to transfer the licences since the transfer was in accordance with existing government policy, despite finding that the Minister did not appropriately give special consideration to the principles in Article 15.3.7.
C. Transaction [12] On March 5, 2020, Clearwater announced a strategic review process. By early summer 2020, Clearwater announced that it would only seek bids for the purchase of the whole company. In August 2020, Premium Brands, a British Columbia corporation, made a joint bid along with the Mi’kmaq Coalition through FNC Holdings. On November 9, 2020, Premium Brands and FNC Holdings announced a definitive agreement for the purchase of Clearwater in which both parties would each own half of Clearwater [Transaction]. On January 25, 2021, Clearwater, Premium Brands and FNC Holdings completed the Transaction and announced it publicly.
[13] The transfer of certain mid-shore and off-shore commercial fishing licences from Clearwater to the FNC Quota [Licence Transfer] was a key part of the Transaction. The Mi’kmaq Coalition financed its contribution through the First Nations Finance Authority [FNFA] which required collateral. The Transaction required completing the Licence Transfer, including transferring the associated quota from Clearwater to FNC Quota, and FNC Quota would then pledge them as collateral to FNFA. Thereafter, FNC Quota would give Clearwater the right to use the licences, harvest, and sell the catch on its behalf.
[14] On January 26, 2021, Clearwater requested the Minister’s approval of the Licence Transfer. On February 17, 2021, DFO sent the Applicants and the Government of Nunavut a copy of Clearwater’s application and sought their views. The DFO had several further communications with the QIA in March 2021 by meeting, letter, and call, then by another meeting in June 11, 2021.
[15] Prior to these events, in December 2019, Qikiqtaaluk Corporation [QC], the business arm of QIA, met with Clearwater and the Mi’kmaq Coalition to discuss terms of a joint purchase. QC declined the proposal because it would not increase Inuit self-sufficiency, as it did not fit within the existing commercial fishing practices of the Nunavut Inuit, but QC wanted to remain committed to finding a mutually agreeable arrangement with Clearwater and the Mi’kmaq Coalition. QIA had expressed to the Minister that it had neither the assets nor interest to acquire all of Clearwater. Negotiations were ultimately unsuccessful, as Clearwater was only interested in bids for the whole company.
D. Evidence [16] The Applicants filed affidavits from Jerry Ward, Director of Fisheries for QC; Harry Flaherty, President and Chief Executive Officer for QC; Jeffrey Maurice, Director of Policy and Planning for NTI; and Richard Paton, Senior Director of Projects for QTI. Collectively, their affidavits describe the roles of NTI and QIA, the importance of fisheries to Inuit culture and traditions, the Northern fisheries regime, Government and Senate committee studies about the state of Inuit participation in fisheries, and economic development and capacity-building initiatives in Nunavut.
[17] The Minister filed affidavit evidence from Adam Burns, Acting Assistant Deputy Minister of Fisheries and Harbour Management for DFO. Clearwater filed affidavit evidence from Christine Penney, Vice President of Sustainability and Public Affairs for Clearwater Seafoods Inc. FNC Quota filed affidavit evidence of Chief Terrance Paul of Membertou First Nation, located in the Cape Breton Regional Municipality, Nova Scotia. Collectively, the evidence describes the Respondents’ roles, the Transaction discussions with the Applicants, and the importance of the Licence Transfer to Clearwater and FNC Quota.
[18] None of the affiants were cross-examined on the contents of their respective affidavits.
III. The Decision [19] On July 13, 2021, DFO issued a memorandum to the Minister recommending that the Minister approve the Licence Transfer [Memorandum]. The Memorandum outlined the Transaction, the Licence Transfer, the legal and policy framework, stakeholder views, foreign ownership requirements, obligations under the Nunavut Agreement, as well as voluntary licence relinquishments and reconciliation. On July 16, 2021, the Minister approved the Licence Transfer after agreeing with DFO’s recommendation. DFO communicated the Decision to the Applicants at a meeting with the QIA on July 20, 2021 stating that the licences were already purchased and that there was no regulatory role for the Minister to play. The Decision was communicated to the Applicants and the Government of Nunavut by letter dated July 30, 2021. The Applicants and the Minister agree that the reasonableness review should primarily look at the Memorandum, as well as the rest of the record that was before the Minister in making the decision (Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov] at para 137).
IV. Issues and Standard of Review [20] This matter raises the following issues:
Was the Decision reasonable?
Did the Minister meet the requirements of the duty of procedural fairness in making the Decision?
[21] The Applicants and the Respondents agree that the standard of review for the merits of the Decision is reasonableness. I agree with the parties that the merits of the Decision generally are reviewable under a reasonableness standard. This aspect of the case does not engage one of the exceptions set out by the Supreme Court of Canada in Vavilov. Therefore, the presumption of reasonableness is not rebutted (at paras 16-17).
[22] A reasonableness review is a robust form of review that requires the Court to consider both the administrator’s decision-making process and the outcome of the decision (Vavilov at paras 83, 87; Mason v Canada (Citizenship and Immigration), 2023 SCC 21 at para 58 [Mason]). A reviewing Court must take a “reasons first” approach to assess whether the decision bears the hallmarks of reasonableness – justification, transparency and intelligibility – and whether it is justifiable in relation to the relevant factual and legal constraints (Vavilov at paras 15, 99; Mason at paras 59-61). The onus is on the applicant to demonstrate the unreasonableness of the decision (Vavilov at para 100). A decision will be unreasonable where there are shortcomings in the decision that are sufficiently central or significant (Vavilov at para 100). Two types of fundamental flaws can render a decision unreasonable: a failure of rationality internal to the reasoning process and a failure of justification given the legal and factual constraints bearing on the decision (Vavilov at para 101; Mason at para 64). If the reasons of the decision-maker allow a reviewing Court to understand why the decision was made and determine whether the decision falls within a range of acceptable outcomes, the decision will be reasonable (Vavilov at paras 85-86).
[23] The Applicants and the Respondents do not provide submissions on the standard of review for procedural fairness or for matters of treaty interpretation. Jurisprudence confirms that such matters both attract a standard of review of correctness (First Nation of Nacho Nyak Dun v Yukon, 2017 SCC 58 [Nacho Nyak Dun]; Makivik Corporation v Canada (Attorney General), 2021 FCA 184 at paras 77-81 [Makivik]). On a correctness review, no deference is owed to the decision-maker (Blois v Onion Lake Cree Nation, 2020 FC 953 at para 26, citing Elson v Canada (Attorney General), 2019 FCA 27 at para 31 and Connolly v Canada (National Revenue), 2019 FCA 161 at para 57). Instead, when evaluating whether there has been a breach of procedural fairness, a reviewing court must determine if the procedure followed by the decision-maker was fair, having regard to all the circumstances (Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69 at para 54; Vavilov at para 77; Baker v Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC) at paras 21-28 [Baker]).
V. Relevant Provisions [24] Section 7 of the Fisheries Act states:
7 (1) Subject to subsection (2), the Minister may, in his absolute discretion, wherever the exclusive right of fishing does not already exist by law, issue or authorize to be issued leases and licences for fisheries or fishing, wherever situated or carried on.
…
(2) Except as otherwise provided in this Act or regulations made under it, leases or licences for any term of more than nine years shall be issued only under the authority of the Governor in Council.
[25] Article 15 of the Nunavut Agreement sets out principles on marine areas:
15.1.1 This Article recognizes and reflects the following principles:
(a) Inuit are traditional and current users of certain marine areas, especially the land-fast ice zones;
(b) the legal rights of Inuit in marine areas flowing from the Agreement are based on traditional and current use;
(c) Canada's sovereignty over the waters of the arctic archipelago is supported by Inuit use and occupancy;
(d) Inuit harvest wildlife that might migrate beyond the marine areas;
(e) an Inuit economy based in part on marine resources is both viable and desirable;
(f) there is a need to develop and co-ordinate policies regarding the marine areas; and
(g) there is a need for Inuit involvement in aspects of Arctic marine management, including research.
[26] The provision of the Nunavut Agreement at issue is Article 15.3.7:
15.3.7 Government recognizes the importance of the principles of adjacency and economic dependence of communities in the Nunavut Settlement Area on marine resources, and shall give special consideration to these factors when allocating commercial fishing licences within Zones I and II. Adjacency means adjacent to or within a reasonable geographic distance of the zone in question. The principles will be applied in such a way as to promote a fair distribution of licences between the residents of the Nunavut Settlement Area and the other residents of Canada and in a manner consistent with Canada's interjurisdictional obligations.
VI. Analysis [27] In written submissions, a preliminary matter arose between the parties. The Minister asked the Court to give no weight to the Applicants’ affidavit of Mr. Paton and to prefer Canada’s evidence set out in the affidavit of Mr. Burns where there is a contradiction between the two affidavits. At the hearing, the Applicants agreed to strike the contested paragraphs of Mr. Paton’s affidavit after noting that the exhibits of that affidavit are already part of the Certified Tribunal Record.
A. Was the Decision reasonable? (1) Applicants’ Position [28] The Minister has broad discretion to allocate licences and quotas pursuant to the Fisheries Act but this discretion has significant legal constraints upon it as a result of the Nunavut Agreement. In addition, the uniqueness of the particular holdings needed to be considered, including the impact of placing these holdings into non-Inuit hands. In this case, the obligations flowing from the honour of the Crown had not yet taken shape when other cases interpreting Article 15 were decided. The honour of the Crown is a constitutional principle that is always at stake when the Crown deals with Indigenous people (Manitoba Metis Federation Inc v Canada (Attorney General), 2013 SCC 14 at paras 69-70 [Manitoba Metis]; NTI v Canada (Attorney General), 2012 NUCJ 11, rev’d in part, 2014 NUCA 2). The honour of the Crown requires diligent implementation of the Nunavut Agreement, particularly when it imposes a special burden on the Minister’s discretion through Article 15.
[29] There are four main reasons why the Decision was unreasonable in light of the constraints from the Nunavut Agreement. First, the Minister failed to give special consideration to the principles of adjacency and economic dependence by not recognizing that without the re-allocation of at least some of the Clearwater licences to Nunavut fishers, Nunavut interests are unlikely to gain access comparable to other provinces due to the permanent nature of these licences.
[30] Second, the Minister failed to grapple adequately with the issue of whether reissuing the Clearwater licences would be consistent with the Minister’s obligation to “promote a fair distribution of licences”. The Clearwater licences are the only practical prospect to attaining adjacency in Nunavut. The Memorandum asserted that “Nunavut interests already hold very significant shares in the two areas for which Clearwater has licences” and that it would be “unfair” to increase Nunavut’s participation, despite Senate and Court conclusions otherwise on the fairness of distribution. An increase in TAC resulted in an increase in Nunavut’s share for both Greenland halibut and Northern shrimp and TAC cannot be relied on to increase Nunavut’s share in these fisheries in a timely manner.
[31] Third, the Minister failed to give special consideration to the principle of economic dependence of Nunavut communities on marine resources, despite the significant annual landed value of the Greenland halibut and Northern shrimp fisheries. This landed value is significant in the context of the smaller Nunavut economy relative to the economies of other provinces.
[32] Fourth, the record before the Minister failed to analyze basic questions raised by the reissuance of the Clearwater licences in light of the Nunavut Agreement, particularly concerning a pathway to future fair distribution. Instead, the Minister has continued to lack a policy or plan for how to give special consideration to Article 15 principles, despite the Court’s direction to do so in Nunavut Wildlife. The block of licences at issue in the Licence Transfer is the only way for Nunavut shares in the fisheries to increase.
[33] Furthermore, the Minister inappropriately prioritized commercial expectations over Inuit treaty rights. The Minister fettered her discretion by either assuming she had no discretion to affect the Transaction or by deferring to the commercial expectation that arose from the past precedent of approving permanent transfers between willing buyer and seller. The Minister seemed to consider herself bound to comply with precedent in which the Minister routinely approves permanent transfers between willing buyers and sellers as fishing licences can be analogized to proprietary rights (Saulnier v Royal Bank of Canada, 2008 SCC 58 [Saulnier]). However, Saulnier was clear that fishing rights are not actually property and the typical expectation that the Minister will reissue licences to a willing buyer cannot fetter the Minister’s discretion (Saulnier at paras 33-35; Doucette v Canada, 2015 FC 734 at para 109, citing Andrews v Canada (Attorney General), 2009 NLCA 70 at para 84). The Minister’s approach to licence transfers in Nunavut-adjacent waters is a consistent, decades-long pattern of unwillingness to interfere with the legacy of Nunavut exclusion from the fishery.
[34] Reconciliation with non-adjacent Indigenous communities cannot be prioritized over the fulfillment of treaty obligations to Inuit. The Minister appeared motivated in part by the fact that Clearwater would transfer the licences to an Indigenous-owned consortium as it could contribute to reconciliation. Reconciliation with a non-adjacent Indigenous group cannot be prioritized over the fulfillment of treaty obligations to Inuit. The concept of reconciliation is reflected in Article 15 and this essentially means that diligence is required by the Minister in arriving at licence allocations.
[35] Lastly, the Applicants submit that the Minister failed to explore practical solutions to promote a fair distribution of licences within the context of the Transaction. The Minister had options at her disposal to facilitate meetings between the Applicants and the parties to the Transaction, signaling to the parties to the Transaction an unwillingness to approve a reissuance without Nunavut involvement, or indicating a preference for certain Transaction terms. Instead, the Minister incorrectly assumed the Applicants’ intent as wanting a “repatriation” of Clearwater’s licences, rather than a willingness to purchase the licences, and decided not to take any of these steps to ensure fair distribution of licences.
(2) Minister’s Position [36] The Memorandum is internally coherent and justified because it sets out the facts, Article 15.3.7 requirements of the Nunavut Agreement, relevant policy considerations, the positions of the interested parties, the law, and a clear analysis that connects the evidence to the Decision.
[37] The Federal Court of Appeal in Nunavut Tunngavik Inc v Canada (Minister of Fisheries and Oceans), 1998 CanLII 9080 (FCA) [Nunavut Tunngavik 1998] identified the principles applicable in reviewing the Minister’s exercise of discretion. The role of the Court is not to “second guess” the Minister’s decision and the Minister must have “the widest possible freedom to manoeuvre” (at para 18). The reviewing Court is concerned with the legality of the ministerial decision and not its opportunity, wisdom or soundness (at para 19). The Federal Court of Appeal also provided an interpretation of Article 15.3.7 whereby special consideration means that “particular and appropriate attention ought to be given when balancing the fierce competing interests at stake with a view to promoting a fair balance in the distribution of commercial fishing licences in these zones” (at para 52).
[38] The Federal Court in Nunavut Tunngavik Inc v Canada (Minister of Fisheries and Oceans), 1999 CanLII 8815 (FC), aff’d 2000 CanLII 16334 (FCA) [Nunavut Tunngavik 1999] applied this framework and determined that Article 15.3.7 does not imply a mandatory preference to be given to Nunavut residents (at para 87). The Federal Court in Nunavut Territory (Attorney General) v Canada (Attorney General), 2005 FC 342 [Nunavut Territory] similarly found that the decision made by the Minister was open to him, taking into account all of the competing interests that were before him (at paras 69-70).
[39] Nunavut Wildlife arose in a different context so the Court should be cautious in applying this case as it concerned a decision to reallocate Greenland halibut quotas, not licences, and the challenger of the decision was the Nunavut Wildlife Management Board which was not applying to be a recipient of the quota.
[40] In response to the Applicants’ submissions, first, the Memorandum expressly and in detail articulates the special considerations from Article 15.3.7, and applied this in making the Decision, so the Applicants’ allegation that the Minister failed to give special consideration to adjacency and economic dependence on marine resources is unfounded. The Memorandum shows that the Minister considered the Crown’s obligations, the principles of adjacency and economic dependence, and fairness in the distribution of licences. The Minister ultimately agreed with the fact that Nunavut interests held significant shares in the two areas in which Clearwater had licences, so made the determination that it would be unfair to strip Clearwater and FNC Quota of the value of the licences to increase Nunavut participation in Zone I. This is really a question of treaty implementation.
[41] Second, the Court’s comment in Nunavut Wildlife about the need for a policy to respond to Inuit concerns concerning an unfair distribution of licences was obiter but regardless, DFO does have a policy-based approach to the application of the principles in Article 15.3.7. The Decision involved consideration of fishery management plans and other important guidance documents, including the “Integrated Fishery Management Plan – Greenland Halibut, Northwest Atlantic Fisheries Organization Subarea 0” and “Integrated Fishery Management Plan – Northern shrimp and striped shrimp – Shrimp fishing areas 0, 1, 4-7, the Eastern and Western Assessment Zones and North Atlantic Fisheries Organization (NAFO) Division 3M”. In any event, a written policy was not required for the Minister to meet the requirements of Article 15.3.7 and a written policy would not have bound the Minister or have been enforceable.
[42] Third, the evidence undermines the Applicants’ inferences that the Minister “considered herself bound to comply with past precedent”, “relied on Saulnier”, or that there was a “pattern of unwillingness”. The evidence demonstrates that the Minister took steps to ensure the decision-making process was fully informed and Article 15.3.7 does not preclude the Minister from considering other elements, including commercial interests, as long as special consideration is given to the principles within Article 15.3.7 (Nunavut Tunngavik 1999 at paras 68-69, 87; Beckman v Little Salmon/Carmacks First Nation, 2010 SCC 53 at paras 34-35, 78-79 [Beckman]).
[43] Fourth, contrary to the Applicants’ submissions, the Minister was under no obligation and had no authority to broker a commercial arrangement between the Applicants, Clearwater, and FNC Quota. This is outside the scope of Article 15 of the Nunavut Agreement and the honour of the Crown. If the intended role of Article 15.3.7 was to give priority access to the Applicants over other persons or entities, the Nunavut Agreement would have been drafted differently (Nunavut Tunngavik 1998 at para 50). The Applicants were entitled to special consideration of the principles of adjacency and economic dependency but they were not entitled to a specific outcome in relation to the Decision.
(3) Clearwater’s Position [44] The statutory schemes under the Fisheries Act and the Nunavut Agreement are the main constraining factors and context for the Court’s review. Even though the Nunavut Agreement limits the exercise of the Minister’s discretion under section 7 of the Fisheries Act, the Minister still retains broad discretion (Nunavut Tunngavik 1998 at paras 13-16, 18).
[45] Furthermore, the Nunavut Agreement is a comprehensive and modern treaty negotiated by sophisticated parties whose terms must be given appropriate weight (Quebec (Attorney General) v Moses, 2010 SCC 17 at para 7 [Moses]; Beckman at paras 10-12, 36).
[46] Article 15 of the Nunavut Agreement is a balanced scheme for Nunavut Inuit involvement in fisheries decisions both within the Nunavut Settlement Area’s marine areas and Zone I. The Nunavut Agreement guarantees special consideration but not “priority” access or an outcome (Nunavut Tunngavik 1998 at paras 50-52). There is also no set percentage of what Nunavut interests should hold. As well, Article 15.3.7 does not expressly or implicitly provide that the interests of others identified in the Nunavut Agreement should be disregarded or minimized (Nunavut Tunngavik 1999 at paras 87-88). It only respects the interests of Nunavut Inuit and the interests of others with a historically entrenched place in the fishery (Nunavut Territory at para 71). Accordingly, the Nunavut Agreement does not require Courts to re-write it through “broad” interpretation that deviates from the carefully negotiated text.
[47] The Transaction was not new access to the fisheries but rather an internal corporate transfer. There was no change to the status quo of fishing allocations.
[48] This matter is distinguishable from two cases where there have been breaches of Article 15.3.7. In Nunavut Tunngavik 1998, there was a reduction in the share of overall TAC with no indication of any special consideration or reasons provided. In Nunavut Wildlife, it concerned the approval of a sale of unwanted quota attached to particular licences and mainly concerned the need to consult and consider the views of the Nunavut Wildlife Management Board. In contrast, the factual context of this matter is the most complicated matter that the Minister has had to consider as it is a large, complex transaction involving a sale to an arm’s length party in which there was not a sale of unwanted quota on the open market. There was also thorough consultation.
[49] The Decision adequately considered the impact of the Transaction on the economic dependence of Nunavut communities. First, the Applicants overstate the need for the Minister to reference explicitly the principles of adjacency and economic dependence in the Decision and the record. Written reasons “must not be assessed against a standard of perfection” and must be read in light of the history and context of the proceedings in which they were rendered (Vavilov at paras 91, 94). Regardless, the record and DFO’s reasons to QIA on July 20 and 30, 2021 show that the Minister did give special consideration to adjacency.
[50] Second, the Applicants’ assertion that the Minister believed it would be unfair to increase Nunavut participation in Zone I as Nunavut already had significant shares in two areas is a gross mischaracterization because the Applicants only focus on what would be fair to Nunavut and not any other party. Nunavut interests are to be considered but they will not always prevail over others.
[51] Third, the Memorandum noted specific context on economic dependence and was not required to cite any specific data or evidence in the Decision. A review of the Decision in light of the record makes clear that the Minister gave special consideration to economic dependence when the Memorandum referred to the landed value of the Clearwater licences and the interests currently held by Nunavut, as well as correspondence with the Government of Nunavut, the Applicants and the Nunavut Wildlife Management Board regarding the Transaction.
[52] Fourth, the question of whether DFO has a policy or plan for fair distribution is a “red herring” and not reviewable in this application.
[53] Furthermore, there is nothing in the record supporting the Applicants’ assertion that the Minister fettered her discretion or was unduly influenced by precedent, including DFO’s preference for a willing buyer and willing seller or licence transfer policy. Instead, the record shows that the Minister was aware of the option to reallocate the licences, including to Nunavut interests.
[54] The Minister was also not required to explore options that would result in the Applicants receiving the licences against Clearwater’s wishes. It was not clear on the record that the Applicants sought the Minister’s assistance in facilitating a transaction, rather than a forcible taking of the licences. Such involuntary licence allocations are not only rare but are disruptive and result in instability. Fairness and equity is a two-way street and is crystalized in Article 15 as well as Clearwater’s long history in fishing in the North.
(4) FNC Quota’s Position [55] FNC Quota relies on Clearwater’s submissions and restricts its submissions to the issue of whether it was reasonable for the Minister to factor in the principle of reconciliation as it related to the Mi’kmaq Coalition. It acknowledges the principles of the honour of the Crown are always at stake, however, submits that it was likely that, in this instance, the honour of the Crown did not give rise to a fiduciary duty.
[56] Citing the Truth and Reconciliation Commission’s “What Have We Learned: Principles of Reconciliation”, FNC Quota submits that reconciliation is about securing economic justice for Indigenous peoples or in other words, “closing gaps in economic opportunities and outcomes that exist between Indigenous and non-Indigenous Canadians.”
[57] Reconciliation as it related to the Mi’kmaq Coalition was a relevant factual consideration. Article 15.3.7 of the Nunavut Agreement seeks to apply the special considerations in a way that promotes a fair distribution of licences between Nunavut Settlement Area residents and “the other residents of Canada”, so the Mi’kmaq Coalition’s interests were relevant. FNC Quota agrees that the honour of the Crown is “always at stake” in the Crown’s dealings with Indigenous people, and that in this case the Crown had to pay attention to the Mi’kmaq Coalition’s interests since the Transaction could secure their long-term prosperity. FNC Quota claims that the Minister’s refusal to approve the transfer of licences would have a far more devastating impact on the Mi’kmaq Coalition’s prospects of achieving economic justice than its approval would have on the Applicants’ preferred method of increasing its share of adjacent quota.
[58] FNC Quota also refutes the Applicants’ submission that the Memorandum included vague and abstract references to reconciliation. The Minister was showing sensitivity to the “undeniable reality” of the Transaction and that the Licence Transfer would “catapult the Mi’kmaq Coalition and its members into a leading position in the global seafood industry, providing opportunities and prosperity for those communities” by the Memorandum stating that “the Clearwater sale could contribute significantly to reconciliation”.
(5) Conclusion on Reasonableness [59] The Decision was unreasonable. The Applicants have satisfied their onus of demonstrating that the Decision is unreasonable (Vavilov at para 100). I will make some observations before setting forth my analysis.
[60] Modern land claims agreements and treaties, as opposed to historical treaties, while still being required to be interpreted and applied in a manner that upholds the honour of the Crown, were intended to create some precision around property and governance rights and obligations (Beckman at para 12). Instead of ad hoc remedies to smooth the way to reconciliation, the modern treaties are designed to place Aboriginal and non-Aboriginal relations in the mainstream legal system with its advantages of continuity, transparency and predictability (Beckman at para 12).
[61] The parties all acknowledge the importance of the Nunavut Agreement’s role as a legal constraint on the Minister’s authority, but disagree on whether the Minister reasonably complied with its provisions when making the Decision.
[62] The Courts have applied the Nunavut Agreement in judicial reviews of the allocation or reissuance of licences in the Nunavut Settlement Area. Notably, previous decisions concerning the issuance of licences in the Nunavut Settlement Area have been determined on the basis of patent unreasonableness (Nunavut Tunngavik 1998 at paras 18-19; Nunavut Territory at paras 52-54), unless the decision involved procedural fairness (Nunavut Wildlife at para 61).
[63] Flowing from these cases, there are several things to note. First, the Federal Court of Appeal has provided some guidance on the correct interpretation of Article 15.3.7 of the Nunavut Agreement. The Nunavut Agreement provides for a principle of equity, not priority, in distributing licences and that “special consideration” means that particular and appropriate attention ought to be given to adjacency and economic dependence when balancing the competing interests, with a view to promoting a fair balance in the distribution of licences (Nunavut Tunngavik 1998 at paras 49-52).
[64] Second, Nunavut Wildlife addressed a relatively similar issue and concerned the same Greenland halibut quota. It is also the most recent decision in a series of cases concerning whether the Minister has complied with the Nunavut Agreement. The Court decided not to set aside the transfers because the transfers complied with existing government policy and a change in the policy would require time and consultation. The Court acknowledged that “the representations from the applicant to the Minister’s department in this case have demonstrated new concerns about future transfers which must be considered by the Minister under Section 15.3.7 before future transfers of company quotas are approved” (at para 116). Furthermore, “no further inter-company transfers of allocation should be approved in division 0-B until the Minister has considered the new concerns raised by the applicant” (at para 120). Though not directly applicable to the present matter, the Court nevertheless identified factors that the Minister should consider in reissuing licences, which are useful here given the similarities in the transfer and quota.
[65] In my view, the reasonableness of the Minister’s Decision, which the parties agree is set forth in the Memorandum, must be read in light of a close reading of the Nunavut Agreement and with attention to the Courts’ jurisprudence on the Nunavut Agreement. As the Supreme Court of Canada has stated, “[p]aying close attention to the terms of a modern treaty means interpreting the provision at issue in light of the treaty text as a whole and the treaty’s objectives” [emphasis in original] (Nacho Nyak Dun at para 37). As pointed out by Clearwater, the case law suggests that modern t