Fisheries are the lifeblood of business in Western Nova Scotia. This is a highly regulated industry from the harvesting to the plate. Licensing for fishing efforts is strictly regulated by the Department of Fisheries and Oceans Canada known as “DFO”. Onshore buying and processing are regulated by the Nova Scotia Department of Fisheries. The Canadian Food Inspection Agency [CFIA] is involved in supervising processing facilities. There are also environmental laws that can come into play. Vessel safety is regulated by Transport Canada. Transport Canada also maintains the Registry of Shipping. All transfers of vessels will need to be filed on that registry as well as mortgages on the vessel.
This article addresses the law as to non-aboriginal fisheries. Aboriginal fisheries are subject to regulation under its own laws and set of rules which we also assist clients with.
The law in Canada is that the management of the fisheries is in the absolute discretion of the Minister of DFO. This has been confirmed by the Supreme Court of Canada. This means that court challenges that can be made to the authority of the Minister are virtually nonexistent.
This means knowledge of departmental policies and procedures is essential. Our lawyers are well versed in DFO Policy as well as the procedures under the other governmental agencies.
In order to be qualified to hold a fishing license, there are requirements. Residency, Homeport, or Area of Historical Fishing are generally the factors considered by DFO in deciding if an individual is qualified to hold a license. This much too complex to describe in this short blog, but we will be happy to guide you through it.
The licensing regime essentially works on three models. Effort controlled, Competitive fisheries and quota fisheries and they have very different rules. Effort controlled, of which lobster is the major example, involves a license to fish with specified equipment during a specified season.
There is no limit on the catch that a license holder can catch. Competitive fisheries are controlled by a Total Allowable Catch (TAC). License holders can fish as much as they like during an open season but when the TAC is caught the fishery is closed. Quota fisheries are as the name suggests. A license is required but the quota attached can be bought and sold, either temporarily (i.e. for a season) or can be permanently transferred between licenses.
DFO allows a license holder to operate as a company with restrictions. The only shareholder of the company must be the person qualified to be a license holder. We are often called on to give opinions on the corporate status of companies and to ensure they qualified and are Canadian owned.
Most, if not all fisheries, that are not on the quota system are subject to the PIIFCAF policy. This implements the DFO Owner-Operator and Fleet Separation policies. Essentially this means that processors and fish buyers cannot be involved in owning or financing these enterprises. When acquiring a PIIFCAF license, we will be called on to review all the documentation and certify to DFO that there is no “controlling agreement” by a third party.
As a result of the case of Saulnier v Royal Bank, which was taken to the Supreme Court of Canada by one of our lawyers, Andrew S. Nickerson Q.C., financing can be obtained through banks and other recognized financial intuitions. This involves a filing with DFO that results in DFO not transferring any license or quota unless the financial institution consents. This has provided banks and other financial institutions with comfort to lend against licenses.
We also regularly defend persons charged with breaches of fisheries regulations.
We welcome assisting you with your fisheries enterprise.