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In this decision of the Federal Court of Canada, Mr. Justice Rennie concluded that certain conditions included in Marine Harvest’s fish farm licence were inconsistent with the regulatory standards governing when fish can be transferred to the marine environment, and were also inconsistent with the precautionary principle. The Court gave the Department of Fisheries and Oceans (“DFO”) until September 2015 to revise the licence conditions to bring them in line with the regulations.

I. Background

Biologist Alexandra Morton (“Morton”) lives in the Broughton Archipelago, an area with the highest density of fish farms on the British Columbia coast, and has, since the early 1990s, been raising concerns about the effects of fish farms on the health of wild salmon, and about Crown government’s management of these risks. Part of her advocacy has involved using the courts.

In 2008, Morton brought an action in BC Supreme Court to prohibit the Province (who then regulated finfish aquaculture in Pacific waters) from renewing aquaculture tenures and licences. Morton argued that Parliament, not the Province, had the jurisdiction to legislate and regulate in this area. The BC Supreme Court and BC Court of Appeal agreed.¹ As a result of that decision, since early 2010, finfish aquaculture on Canada’s Pacific coast has been regulated by Parliament through the Fisheries (General) Regulations (“FGR”), the Aquaculture Regulations, and licences.

In November, 2009, the Prime Minister appointed Justice Cohen to conduct an inquiry into the decline of sockeye salmon in the Fraser River (the “Cohen Inquiry”). Morton participated in the Cohen Inquiry, and argued that the primary cause of the failure of the 2009 sockeye return was disease, and that fish farms along the path of the migrating salmon played a significant role in the origin or amplification of that disease. In his final report, Justice Cohen found, among other things, that there was “some risk” posed to wild salmon from disease on fish farms, and that ensuring the health of wild stocks should be DFO’s number one priority in conducting fish health work.

Morton’s advocacy work has continued in this latest application for judicial review. This application focussed specifically on the licence DFO had issued to Marine Harvest (“MH”), which allowed MH to transfer fish from its hatchery to its fish farm at Shelter Bay northeast of Port Hardy (the “fish farm”), and whether those actions permitted under the licence complied with the regulations.

The Court refers to this background, and the conclusions of the Cohen Inquiry, in its decision.

II. Facts: The Regulations, the Licence, and the Transfer of Fish

Section 7 of the Fisheries Act gives the Minister of DFO “absolute discretion” to issue licences for fisheries or fishing, and s. 43 allows the Minister to make regulations, such as the FGR. Part VIII of the FGR states that a licence is required to transfer fish to a fish farm, and that the Minister can only issue a licence if certain pre-conditions set out in s. 56 are met. Those regulatory conditions include that the fish do not have any disease or disease agent that may be harmful to the protection and conservation of fish (s. 56(b)), and that the release or transfer of the fish will not have an adverse effect on the stock size or genetic characteristics of fish (s.56(c)).

Condition 3.1 of MH’s licence allows it to transfer live smolts from its hatchery to its fish farm, provided certain conditions are satisfied. In particular, under Condition 3.1(b) MH must have written confirmation from its veterinarian or fish health staff that, in their professional judgment:

(i) mortalities… in any stock reared at the source facility have not exceeded 1% per day due to any infectious diseases, for any four consecutive day period during the rearing period;

(ii) the stock to be moved from the source facility shows no signs of clinical disease requiring treatment; and

(iii) no stock at the source facility is known to have had any diseases listed in Appendix IV;² or

(iv) where conditions 3.1(b)(i) and/or 3.1(b)(iii) cannot be met transfer may still occur if the facility veterinarian has conducted a risk assessment of facility fish health records, review of diagnostic reports, evaluation of stock compartmentalization, and related biosecurity measures and deemed the transfer to be low risk.

In March 2013, MH transferred salmon smolts from its hatchery to its fish farm. Three months later, the smolts tested positive for piscine reovirus (“PRV”). Evidence suggests that PRV is the viral pre-cursor to heart and skeletal muscle inflammation (“HSMI”), an infectious disease found in farmed salmon. Morton believed that because fish at MH’s fish farm had PRV, the smolts at the hatchery must have had PRV, meaning that MH had transferred diseased fish, contrary to the FGR.

Morton brought an application for judicial review challenging the transfer as being ultra vires the FGR. She argued that condition 3.1 of MH’s licence conflicted with the requirements in s. 56 of the FGR that transferred fish not have any disease that may be harmful to the protection and conservation of fish, and that transferred fish not affect the stock size or genetic characteristics of fish. Morton also argued the Minister had unlawfully delegated her discretion and responsibility for the protection and conservation of the fishery to MH.

III. The Court’s Decision

The Court allowed Morton’s application for judicial review and concluded that certain of the licence conditions were inconsistent with the regulatory preconditions, and therefore unlawful.

a. Were the Licence Conditions Reasonable and Aligned with the Precautionary Principle?

The Court noted that the Minister’s discretion is framed and controlled by the FGR. Therefore, the question before the Court was whether condition 3.1 of MH’s licence was a reasonable articulation of the mandatory requirement of s. 56 of the FGR.

DFO argued that the licence conditions were reasonable, took into account limitations on scientific knowledge, and reflected a precautionary approach to fish transfers. DFO also asserted it was “guided by expert advisers” and that the licence conditions were based on “scientific criteria.” The Court rejected DFO’s argument, criticizing the Minister for making unsupported statements of science and after-the-fact assertions in an attempt to bolster the reasonableness of the Minister’s exercise of discretion.

The Court considered the meaning of the precautionary principle and how it had been applied by the courts and concluded that the precautionary principle:

• recognizes that the lack of complete scientific certainty should not be used as a basis for avoiding or postponing measures to protect the environment; and

• has evolved from being a matter of public policy to a norm of customary international law and substantive domestic law.

The Court found DFO’s arguments justifying the transfer of PRV infected smolts “inconsistent” and “contradictory” in light of the evidence and the precautionary principle. While there may still be some debate in the scientific community as to whether viruses, other than PRV, may be responsible for HSMI, the evidence suggests that PRV as a disease agent may be harmful to the protection and conservation of fish, and therefore a “lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.”

The Court concluded that the licence conditions, which permit a transfer of PRV infected smolts, do not reflect the precautionary principle. DFO was not, based on the evidence, erring on the side of caution.

b. Were the Licence Conditions Aligned with the Regulations?

As a matter of law, the licence cannot allow what the regulations exclude. The Minister’s legal duty under s. 56 of the FGR, consistent with the precautionary principle, is to only issue a licence to transfer fish if the fish to be transferred do not have “any disease or disease agent that may be harmful to the protection and conservation of fish.”

The Court concluded that conditions 3.1(b)(ii) of the licence set lower standards for when diseased fish may be transferred than were required by s. 56 of the FGR. Condition 3.1(b)(ii) of the licence allowed MH to transfer fish provided the fish “shows no signs of clinical disease requiring treatment”; whereas s.56(b) of the FGR set a higher standard, fish could only be transferred if they “do not have any disease or disease agent.”

The Court reasoned that whether treatment is needed for farmed salmon may have no nexus to the risk posed to the “protection and conservation of fish.” In addition, a licence condition that allows transfers unless the fish shows signs of clinical disease was problematic in terms of HSMI, where the clinical signs are not manifest until 5-9 months following the transfer of the smolts to the ocean. In effect, this condition of the licence allowed MH to transfer fish from a stock infected with a disease agent that has not yet presented as disease. For these reasons, the Court found that this licence condition was inconsistent with and contrary to s. 56(b) of the FGR.

In addition, the licence condition did not specify how MH’s fish health staff was to determine whether the fish have any disease agent. Did this have to be an objective assessment using scientific measures, or would a quick glance in the tank suffice? This too meant that the licence condition had a lower standard than that required by the FGR.

The Court went on to consider licence condition 3.1(b)(iv), which allows MH’s veterinarian to override other conditions if he or she has conducted a risk assessment and has deemed the transfer to be “low risk.” The Court found that this condition conflicted with s. 56(b) of the FGR. The licence allowed a transfer based on MH’s own veterinarian’s view that the transfer was “low risk,” clearly circumventing, sidestepping or nullifying the regulatory requirements.

c. Did DFO Improperly Delegate its Authority to the Aquaculture Industry?

The Court went on to conclude that the Minister, through licence condition 3.1(b)(iv) had improperly delegated her authority to the aquaculture industry. While s. 56 of the FGR can be interpreted as impliedly authorizing DFO to sub-delegate its administrative and operational responsibilities, the Court reasoned that this can only be done if the delegation provides criteria that are objective, discernible and clear. In giving MH the power to do a subjective assessment of what is “low risk,” the Minister’s delegation was imprecise and unclear. The Minister offered no guidance as to what “low risk” means or to what it refers. Is it low risk to farmed stock, low risk to wild stock, or low risk to consumers?

In addition, the delegation was improper because DFO did not retain supervisory control over the aquaculture industry. Under the licence, MH could transfer diseased fish without DFO’s knowledge, approval or supervision. Considerable discretion was left in the hands of the aquaculture industry to make risk decisions about a public resource. This, the Court concluded, did not align with s. 56 of the FGR or with the primary objective of the Fisheries Act: conservation of the resource.

d. Remedy

As a remedy, the Court declared that conditions 3.1(b)(ii) and (iv) of MH’s licence do not meet the requirements of the FGR, and are of no force and effect. The Court suspended this part of its judgement, giving the Minister until September 2015 to develop licencing conditions that are consistent with the standards set out in s. 56 of the FGR.

IV. Potential Implications

The decision serves as a sharp reminder to DFO that its primary role, and indeed the primary objective of the Fisheries Act, is to conserve the resource. This is an important responsibility and one that cannot be handed over to industry to make risk assessments and decisions on what fish are safe to release into marine waters. This decision also shows that DFO’s oft repeated mantra that it manages fisheries using a “precautionary approach” will be closely scrutinized to see if DFO can support its decisions based on science, and whether it is, in fact, erring on the side of caution.

This case summary provides our general comments on the case discussed and should not be relied on as legal advice. If you have any questions about this case or any similar issue, please contact any of our lawyers.

1 Morton v British Columbia (Agriculture and Lands), 2009 BCSC 136, aff’d BCCA 481.

2 Appendix IV is part of the licence and sets out what DFO has identified as 8 diseases of regional, national or international concern. Importantly, the preamble to Appendix IV states that the listed diseases “Can severely impact fisheries and affect regional and national trade so they warrant urgent notification and immediate attention.”