Indexed As: Kimoto et al. v. Canada (Attorney General) et al. Federal Court of Appeal Evans, Layden-Stevenson and Stratas, JJ.A. October 19, 2011.

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1 Doug Kimoto, Vic Amos and West Coast Trollers (Area G) Association on behalf of all Area G Troll Licence Holders (appellants) v. The Attorney General of Canada, Gulf Trollers Association (Area H) and Area F Troll Association (respondents) (A-85-11; 2011 FCA 291) Indexed As: Kimoto et al. v. Canada (Attorney General) et al. Federal Court of Appeal Evans, Layden-Stevenson and Stratas, JJ.A. October 19, Summary: Pursuant to the Pacific Salmon Treaty with the U.S., Canada agreed to reduce its catch of chinook salmon off the west coast of Vancouver Island (Area G) by 30 percent for each of ten years, commencing in The U.S. undertook to provide US$41.5 million, of which $30 million was to assist in implementing the mitigation program. The "bulk of this funding" was to be used "to reduce effort" in the commercial salmon troll fishery, "among other purposes". In 2009 and 2010, the Minister of Fisheries and Oceans achieved the agreed result by reducing fishing days. The Minister next intended to use the $30 million to buy-back fishing licenses, not only from the applicants (Area G licence holders), but also from two other demarcated fishing areas where allotments had not been reduced. The applicants sought judicial review. They claimed that the fund should be paid to them to retool their vessels to fish other species. The applicants had also filed an action, which had been held in abeyance. The Federal Court, in a decision reported at 382 F.T.R. 287, dismissed the application. Although the applicants made a strong case that they were the ones most directly and most adversely affected by the reduction in the chinook salmon catch, the court found that they had no special interest in the mitigation fund and that the decision of the Minister was well within her discretion both at law and under the terms of the Treaty. There had been no unjust enrichment. The applicants appealed. The Federal Court of Appeal dismissed the appeal. Administrative Law - Topic Judicial review - General - Governmental action - [See fourth Fish and Game - Topic 165]. Constitutional Law - Topic 9954 Practice - Notice to Crown and interested parties of constitutional question (incl. attack on validity or applicability of statute) - At the outset of the hearing of this appeal, the respondent brought a motion seeking an order striking Notices of Constitutional Question served by the appellants - The appellants submitted that the Notices raised issues concerning the applicability and operability of certain unspecified provisions of the Financial Administration Act - The Federal Court of Appeal struck the Notices - The Notices were deficient - They did not set out clearly and with particularity what provisions were inapplicable or inoperative, and the grounds for such a finding - They

2 also did not specifically seek relief, such as declaratory relief, that provisions were inoperative or inapplicable - Therefore, the Notices fell short of what was required under s. 57 of the Federal Courts Act - See paragraphs 19 and 20. Crown - Topic 679 Authority of Ministers - Exercise of - Financing powers - [See first Fish and Game - Topic 165]. application - On appeal, the applicants submitted that the Minister's decision did not comply with the Treaty and the Financial Administration Act (the FAA) and was therefore ultra vires - The Federal Court of Appeal disagreed - Section 26 of the FAA prohibited disbursements from the Consolidated Revenue Fund without the authority of Parliament - Section 21, in conjunction with the definition of "public money" in s. 2, permitted funds collected under a treaty to be paid out for a purpose specified in or pursuant to that treaty - Accordingly, if the proposed program was related to the purpose specified in the Treaty, the court could not interfere with the Minister's decision, unless the decision was unreasonable - See paragraph 8. application - On appeal, the applicants' position was founded on the proposition that the U.S. Fund was provided in exchange for the reduction in Area G - The Federal Court of Appeal stated that it did not follow that the Treaty had to be interpreted to remedy the reduction's adverse impact on Area G - Indeed, the plain language of the Treaty did not support the applicants' interpretation - Further, the evidence supported the reasonableness of the Minister's decision to allocate portions of the U.S. Fund to fishers other than those in Area G - See paragraphs 9 to 11.

3 application - The applicants appealed - They argued that they had a property right in the fish that would remain uncaught, rendering the program an expropriation which had to be explicitly authorized by the Financial Administration Act - The Federal Court of Appeal stated that the argument was ill-founded - The proposition "is the antithesis of fisheries being the common property of all, a principle deeply ingrained in Canadian law" - See paragraph 12. application - The Federal Court of Appeal dismissed the appeal - "In this case, the Minister informed herself of the available options (of which there were many) by conducting extensive consultations with the various stakeholders. Ultimately, she chose to expend the U.S. Fund, for the most part, on a voluntary and permanent licence retirement program. This was a highly discretionary decision guided by fact and policy. In our view, the basis of the Minister's decision was sufficiently transparent and intelligible, and the decision itself fell within the range of possible, acceptable outcomes which are defensible in respect of the facts and law" - See paragraph 13.

4 application - On appeal, the applicants argued that the program did not fall within the Treaty because licence reduction would not reduce "fishing effort" - The Federal Court of Appeal stated that the argument failed, inter alia, on the basis of the deferential standard of review - It was reasonably open to the Minister to conclude, in the circumstances, that a licence reduction component would reduce the fishing effort - The applicants had not demonstrated otherwise - With respect to the argument that the Treaty amounted to an impermissible sale of fishery resources, the program was directed to conservation and did not involve third-party service providers, and reciprocal conservation obligations were imposed on the U.S. under the Treaty - See paragraphs 14 to 16. Treaties - Topic 1606 Operation and effect - Domestic or internal consequences - [See fifth Fish and Game - Topic 165]. Treaties - Topic 2002 Construction - Particular treaties - [See second ]. Cases Noticed: Saulnier (Bankrupt), Re, [2008] 3 S.C.R. 166; 381 N.R. 1; 2008 SCC 58, refd to. [para. 12]. Saulnier v. Royal Bank of Canada - see Saulnier (Bankrupt), Re. New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 13]. Comeau's Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1997] 1 S.C.R. 12; 206 N.R. 363, refd to. [para. 14]. Larocque v. Canada (Minister of Fisheries and Oceans) (2006), 352 N.R. 133; 270 D.L.R. (4th) 552; 2006 FCA 237, dist. [para. 16]. Statutes Noticed: Federal Courts Act, R.S.C. 1985, c. F-7, sect. 57 [para. 20]. Financial Administration Act, R.S.C. 1985, c. F-11, sect. 21, sect. 26 [para. 8]. Counsel: Christopher Harvey, Q.C., for the appellants; Harry Wruck, Q.C., and Steven Postman, for the respondent, the Attorney General of Canada. Solicitors of Record: MacKenzie Fujisawa LLP, Vancouver, B.C., for the appellants; Myles J. Kirvan, Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent, the Attorney General of Canada. This appeal was heard and decided at Vancouver, British Columbia, on October 19, 2011, by Evans, Layden-Stevenson and Stratas, JJ.A., of the Federal Court of Appeal. The following reasons for judgment of the Court were delivered from the Bench by Layden-Stevenson, J.A.

5 Appeal dismissed. Editor: E. Joanne Oley Administrative Law - Topic Judicial review - General - Governmental action - The Canada-U.S. Pacific Salmon Treaty required Canada to reduce its catch of Chinook salmon from the West Coast of Vancouver Island (Area G) - The U.S. provided $30 million to Canada (the U.S. Fund) for a fishery mitigation program to reduce effort in its commercial salmon troll fishery (Areas F, G and H) - The Minister of Fisheries and Oceans decided on three key elements of the mitigation program, including a voluntary permanent licence retirement program for troll licence holders in Areas F, G and H - Area G troll licence holders (the applicants) sought judicial review - They took the position that the U.S. Fund should be paid to them - The reviewing judge dismissed the application - The Federal Court of Appeal dismissed the appeal - "In this case, the Minister informed herself of the available options (of which there were many) by conducting extensive consultations with the various stakeholders. Ultimately, she chose to expend the U.S. Fund, for the most part, on a voluntary and permanent licence retirement program. This was a highly discretionary decision guided by fact and policy. In our view, the basis of the Minister's decision was sufficiently transparent and intelligible, and the decision itself fell within the range of possible, acceptable outcomes which are defensible in respect of the facts and law" - See paragraph 13. Crown - Topic 679 Authority of Ministers - Exercise of - Financing powers - The Canada-U.S. Pacific Salmon Treaty required Canada to reduce its catch of Chinook salmon from the West Coast of Vancouver Island (Area G) - The U.S. provided $30 million to Canada (the U.S. Fund) for a fishery mitigation program to reduce effort in its commercial salmon troll fishery (Areas F, G and H) - The Minister of Fisheries and Oceans decided on three key elements of the mitigation program, including a voluntary permanent licence retirement program for troll licence holders in Areas F, G and H - Area G troll licence holders (the applicants) sought judicial review - They took the position that the U.S. Fund should be paid to them - The reviewing judge dismissed the application - On appeal, the applicants submitted that the Minister's decision did not comply with the Treaty and the Financial Administration Act (the FAA) and was therefore ultra vires - The Federal Court of Appeal disagreed - Section 26 of the FAA prohibited disbursements from the Consolidated Revenue Fund without the authority of Parliament - Section 21, in conjunction with the definition of "public money" in s. 2, permitted funds collected under a treaty to be paid out for a purpose specified in or pursuant to that treaty - Accordingly, if the proposed program was related to the purpose specified in the Treaty, the court could not interfere with the Minister's decision, unless the decision was unreasonable - See paragraph 8. Treaties - Topic 1606 Operation and effect - Domestic or internal consequences - The Canada-U.S. Pacific

6 Salmon Treaty required Canada to reduce its catch of Chinook salmon from the West Coast of Vancouver Island (Area G) - The U.S. provided $30 million to Canada (the U.S. Fund) for a fishery mitigation program to reduce effort in its commercial salmon troll fishery (Areas F, G and H) - The Minister of Fisheries and Oceans decided on three key elements of the mitigation program, including a voluntary permanent licence retirement program for troll licence holders in Areas F, G and H - Area G troll licence holders (the applicants) sought judicial review - They took the position that the U.S. Fund should be paid to them - The reviewing judge dismissed the application - On appeal, the applicants argued that the program did not fall within the Treaty because licence reduction would not reduce "fishing effort" - The Federal Court of Appeal stated that the argument failed, inter alia, on the basis of the deferential standard of review - It was reasonably open to the Minister to conclude, in the circumstances, that a licence reduction component would reduce the fishing effort - The applicants had not demonstrated otherwise - With respect to the argument that the Treaty amounted to an impermissible sale of fishery resources, the program was directed to conservation and did not involve third-party service providers, and reciprocal conservation obligations were imposed on the U.S. under the Treaty - See paragraphs 14 to 16. Treaties - Topic 2002 Construction - Particular treaties - The Canada-U.S. Pacific Salmon Treaty required Canada to reduce its catch of Chinook salmon from the West Coast of Vancouver Island (Area G) - The U.S. provided $30 million to Canada (the U.S. Fund) for a fishery mitigation program to reduce effort in its commercial salmon troll fishery (Areas F, G and H) - The Minister of Fisheries and Oceans decided on three key elements of the mitigation program, including a voluntary permanent licence retirement program for troll licence holders in Areas F, G and H - Area G troll licence holders (the applicants) sought judicial review - They took the position that the U.S. Fund should be paid to them - The reviewing judge dismissed the application - On appeal, the applicants' position was founded on the proposition that the U.S. Fund was provided in exchange for the reduction in Area G - The Federal Court of Appeal stated that it did not follow that the Treaty had to be interpreted to remedy the reduction's adverse impact on Area G - Indeed, the plain language of the Treaty did not support the applicants' interpretation - Further, the evidence supported the reasonableness of the Minister's decision to allocate portions of the U.S. Fund to fishers other than those in Area G - See paragraphs 9 to 11.