REGS Committee Report

SENATE and HOUSE OF COMMONS
OTTAWA, CANADA
K1A 0A6

38th Parliament, 1st Session

The Standing Joint Committee for the Scrutiny of Regulations has the honour to present its

SECOND REPORT

(Report No. 75 - Disallowance)

Pursuant to section 19.1(1) of the Statutory Instruments Act, R.S.C. 1985, c. S-22, as amended by S.C. 2003, c.18, and having notified the Minister of Fisheries and Oceans in accordance with section 19.1(2) of that Act, the Joint Committee resolves that subsection 36(2) of the Ontario Fishery Regulations, 1989, as enacted by SOR/89-93, be revoked.

The text of the provision it is proposed to disallow is reproduced in Appendix A to this Report. Appendix B includes the statutory notice to the Minister of Fisheries and Oceans as well as correspondence subsequently received from the Honourable Geoff Regan, P.C., M.P. and the Honourable David Ramsay, Minister of Natural Resources of Ontario. The Committee’s reasons for disallowance are set out in Appendix C.

Pursuant to section 19.1(5) of the Statutory Instruments Act, the resolution contained in this Report shall be deemed to have been adopted by the Senate or the House of Commons on the fifteenth sitting day after the Report is presented to that House unless, before that time, a Minister files with the Speaker of that House a motion to the effect that the resolution not be adopted.

A copy of the relevant Minutes of Proceedings and Evidence (Issue No. 9, First Session, Thirty-Eighth Parliament) is tabled in the House of Commons.

Respectfully submitted,

The Honourable John G. Bryden

Gurmant Grewal, M.P.

Joint Chairmen

APPENDIX A

36. (2) No holder of a commercial fishing licence shall violate any of the terms or conditions of the licence.

APPENDIX B

APPENDIX C

Section 36(2) of the Ontario Fishery Regulations, 1989 provides that:

36. (2) No holder of a commercial fishing licence shall violate any of the terms or conditions of the licence.

This provision was enacted with a view to making the contravention of a term or condition of a licence an offence under the Fisheries Act, R.S.C. 1985, c. F-14. Section 78 of that Act provides that:

78. Except as otherwise provided in this Act, every person who contravenes this Act or the regulations is guilty of

(a) an offence punishable on summary conviction and liable, for a first offence, to a fine not exceeding one hundred thousand dollars and, for any subsequent offence, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year, or to both; or

(b) an indictable offence and liable, for a first offence, to a fine not exceeding five hundred thousand dollars and, for any subsequent offence, to a fine not exceeding five hundred thousand dollars or to imprisonment for a term not exceeding two years, or to both.

A term or condition of a licence is not a provision of the Act or the regulations and the violation of such a term or condition does not constitute a contravention of the Act or regulations within the meaning of section 78 of the Act. The enactment of a general prohibition in the Ontario Fishery Regulations, 1989 against contravening a term or condition of a licence is designed to attract the application of section 78 of the Act. While a person contravening a licence term or condition is not liable to the penalties set out in the Fisheries Act, following the enactment of section 36(2) of the Regulations, that person would be liable for the breach of section 36(2) of the Regulations. Section 36(2) then, is intended merely to bridge the gap between a contravention of a term or condition of licence and the penalties provided for in the statute. In effect, the purpose of this regulatory provision is to do indirectly what could not be done directly, namely to impose criminal liability for the breach of a term or condition of a licence.

This provision was dealt with by the Committee in its Second Report of the Second Session of the Thirty-sixth Parliament (Report No. 66). The Committee maintains its position that this provision not only lacks legal authority, but trespasses unduly on rights and liberties and represents an unusual and unexpected use of the enabling authority.

It is accepted that regulations imposing sanctions or creating offence must be authorized by Parliament expressly or by necessary implication. Nowhere in the Fisheries Act is the making of regulations creating offences expressly authorized, nor can the existence of such a power be said to be necessarily implied. In fact the Act implies quite the opposite. Firstly, the acts which will constitute offences under the Fisheries Act are set out in the Act itself and it is to be presumed that if Parliament had wished to empower its delegate to add further offences to these it would have provided so explicitly. Secondly, the Act confers a power to make regulations providing for the suspension and cancellation of licences, a clear indication as to the sanctions that Parliament intended would follow a contravention of a term or condition of licence.

The Department of Fisheries and Oceans accepts that the Fisheries Act does not authorize the Governor in Council to create offences by regulation. Nevertheless, it has asserted that section 36(2) is valid. Although the Department itself earlier characterized section 36(2) as creating “the offence of violating the conditions set out in a licence”, it was later said that this provision does not create an offence, “but merely impose(s) a standard of conduct, breaches of which may be prosecuted under section 78 of the Act.” At another time, the provision has been characterized as establishing a “prohibition”. The “standard of conduct” imposed by section 36(2) of the Regulations is the requirement to comply with the terms and conditions of a licence. In turn, section 78 of the Act makes it an offence to contravene the Regulations. Technically then, the offence will be characterized as contravening section 36(2) of the Regulations, rather than as contravening the terms or conditions of a licence.

The Committee considers that the argument that section 36(2) of the Regulations simply imposes a “standard of conduct” is best characterized as disingenuous. Were it not for section 36(2) of the Regulations, a person contravening the terms or conditions of a licence would not be subject to criminal prosecution. Moreover, the actual requirements that must be complied with will be found, not in the Regulations, but in the terms and conditions of the licence. The only purpose of section 36(2) of the Regulations is to make the non-observance of the terms and conditions of a licence, which are not legislative requirements, punishable as if they were. To ignore this is to ignore the clear intent and effect of the provision. In this regard, it is significant that in a letter of April 14, 2005 to the Honourable Geoff Regan, the Ontario Minister of Natural Resources wrote that “subsection 36(2) is the offence section under which Ontario enforces terms and conditions on [...] fishing licences.” The Joint Committee agrees with this characterization of section 36(2).

Of course it is also the case that no matter how one characterizes section 36(2) of the Regulations, authority for the enactment of that prohibition must still be found in section 43 of the Fisheries Act. This has been acknowledged by the Department. The enactment by a delegate of a prohibition designed to make the contravention of terms and conditions imposed in the exercise of an administrative power subject the same penalties as Parliament decided should apply to rules enacted in the exercise of a legislative power represents the exercise of a substantive law-making power for which clear and precise enabling authority must be shown to exist. Such authority is entirely lacking in any of the provisions of the Act relied upon by the Department.

The position of the Department of Fisheries and Oceans rests on the fundamental misapprehension that the power to make regulations for the proper management and control of the sea-coast and inland fisheries (s.43(a)) respecting the issue, suspension and cancellation of licences and leases (s.43(f)) and respecting the terms and conditions under which a licence and lease may be issued (s.43(g)) must necessarily include the power to punish contraventions of the terms and conditions of licences as offences under the Act. For the Department, there can be no imposition of a “standard of conduct” unless the sanction for contravening the standard is a fine or imprisonment. But is not the conferral of a power to make regulations providing for the suspension and cancellation of licences a clear indication as to the sanctions which Parliament intended would adhere to breaches of the terms and conditions of licences? The Department of Fisheries and Oceans earlier argued that the power to make regulations respecting the cancellation and suspension of licences “would not negate the offence and punishment provisions set out in the Act. A person who has contravened a condition of his licence may keep the licence and pay a penalty for the violation.” Yet why would Parliament expressly provide for suspension and cancellation of licences unless it considered that these were the appropriate sanctions for failure to comply with the terms and conditions of a licence? Why did Parliament not itself provide that every contravention of the terms and conditions of a licence constitutes an offence? Section 78 makes it an offence to contravene the Act or the regulations. It says nothing whatsoever about the terms and conditions of a licence. It is submitted that this is because a licence is an administrative document, and, in the absence of contrary statutory provisions, those contravening such documents are subject to administrative sanctions, such as suspension and cancellation.

The Department of Fisheries and Oceans has also sought to rely on section 9 of the Act, which prevents the Minister from suspending or cancelling a licence if a prosecution has been commenced with respect to the operations under the lease or licence. This is said to indicate Parliament’s intent that failure to comply with the terms or conditions of a licence could be prosecuted as an offence under the Act. In fact, it indicates quite the opposite. Clearly, there will be some circumstances in which an action constituting a violation of the terms and conditions of a licence also constitutes an offence under the Act or the regulations. Section 9 of the Act is intended to address this situation. Section 9, however, must be read together with section 79.1 of the Act. Section 79.1 provides that where a person is convicted of an offence under the Act in respect of any matter relating to operations under a licence the court may, in addition to any punishment imposed, cancel or suspend the licence and prohibit the person to whom the licence was issued from applying for any new lease or licence during any period the court considers appropriate. Where violations of the conditions of a licence also involve a contravention of the Act or regulations, section 9 requires the Minister to choose whether to suspend or cancel the licence or to prosecute. If the latter is chosen, only the court may then impose cancellation or suspension as an additional punishment. Indeed, these mechanisms indicate that Parliament intended that there be a distinction between violating the terms and conditions of a licence and contravening the Act or the regulations. The aim of the disputed provision is to obliterate that distinction.

The Government’s response to Report No. 66 consisted of some ten lines, the pertinent portion of which stated:

The Government considers its ability to act in this regard is legally sound. Nonetheless, for the purposes of providing greater certainty and clarity, an amendment to the Fisheries Act regarding offences for the contravention of licence terms and conditions will be tabled in Parliament at the next appropriate opportunity, pending the completion of the comprehensive policy reviews currently underway.

In a letter to the Minister of Fisheries and Oceans dated April 30, 2001, the Joint Chairmen and Vice-chairman of your Committee advised that the Committee found it difficult to accept that this brief statement could be properly characterized as a “comprehensive” response to its Report, and requested a full and detailed response “that would address all of the arguments set out in the report of the Committee and either refute them or provide an alternative interpretation or explanation.”

For the most part, the Minister’s reply restated arguments that were considered and rejected by the Committee in its Report No. 66. One significant new element was the reference to the decisions of the Federal Court and Federal Court of Appeal in Barnett v. Canada (Minister of Agriculture and Agri-Food) ^[1]. The Committee has considered these decisions and concludes that they do not dispose of the issue.

The Barnett case concerned the importation of alpacas into Canada from Chile. While the animals were still in quarantine in Canada it was discovered that as a result of the actions of Chilean officials, the conditions of an entry permit had not been complied with. An order for the removal of the animals from Canada was issued pursuant to provisions of the Health of Animals Act providing for the forfeiture or removal of animals imported into Canada “in contravention of this Act or the regulations”. At trial, the removal order was quashed on the grounds that the official issuing the order had fettered his discretion by failing to consider other possible courses of action in addition to forfeiture or removal, and that in any event the removal order had effectively been made, not by the official who signed it, but by another official who had no authority to make such an order. Before reaching these conclusions, however, it was necessary for the Court to first consider whether the breach of the conditions of the entry permit constituted a breach of the Act or regulations so as to trigger the provisions of the Health of Animals Act providing for forfeiture or removal.

The trial judge began by stating the principle that “A breach of a permit condition in not automatically a breach of the Act or regulations under which it is issued. It can however be made such by express terms of the Act or regulation.” (emphasis added). She noted that sections 10(1)(a) and 160.1 of the Health of Animals Regulations “operate so as to make a failure to comply with the conditions attached to a permit a contravention of the Regulations.” The relevant portions of these provisions read:

10. (1) … no person shall import from a country other than the United States any turtle, tortoise or their eggs, any bird, honeybee, or any mammal, except a member of the orders Rodentia, Cetacea, Pinnepedia and Sirennia, unless the person

(a) does so under and in accordance with a permit issued by the Minister pursuant to section 160;

[...]

160.1 Every person to whom a permit or licence is issued under these Regulations shall comply with the conditions contained in the permit or licence.

The trial judge concluded that the bringing of alpacas into Canada other than in accordance with the conditions of the permit constituted a contravention of the Regulations, triggering the provisions of the Act providing for forfeiture or removal. She then quashed the removal order for the reasons noted above. It was this decision to quash the removal order that was appealed by the Minister.

On appeal, the Federal Court of Appeal reversed the decision of the trial judge and restored the removal order. The Court of Appeal found that taking the Health of Animals Act as it was written, the only alternative to the forfeiture of animals imported illegally was removal. On the question of whether a breach of the conditions of a permit constituted a breach of the Regulations, the Court of Appeal simply noted that this was the effect of sections 10(1)(a) and 160.1 of the Health of Animals Regulations.

While the trial judge and the Court of Appeal each took note of the fact that the breach of a condition of a permit was made a contravention of the Health of Animals Regulations by the operation of sections 10(1)(a) and 160.1 of those Regulations, it bears pointing out that both failed to consider the question of whether the Health of Animals Act authorized the making of regulations deeming a contravention of the conditions of a permit to be a contravention of the regulations. It was taken for granted by the courts in Barnett that if a provision of the Regulations had been enacted requiring compliance with the conditions of a permit so as to make non-compliance a contravention of the Regulations, there must be authority for that provision in the enabling statute. This is likely because the applicant did not raise the issue of the validity of sections 10(1)(a) and 160.1 of the Health of Animals Regulations.

Yet if, as the trial judge noted, it requires express terms in the Act to make a breach of a condition of a permit a breach of the legislation under which that permit was issued, it logically follows that there must also be express enabling authority in the parent statute to support a regulation having this effect. If Parliament itself can only make a contravention of a condition of a permit a contravention of the legislation under which the permit was issued by expressly so providing, how could it be thought that Parliament’s delegate could do this unless the power to do so is conferred by Parliament in express language? While the enabling authorities in the Health of Animals Act are quite similar to those in the Fisheries Act, in neither statute is there any express authority to make regulations for the purpose of treating the breach of the conditions of an administrative document such as a licence or permit as if it were a contravention of the law. The failure to consider the question of whether enabling authority for sections 10(1)(a) and 160.1 of the Health of Animals Regulations existed in the first place casts serious doubt on the value of the Barnett case as a precedent.

While the Department has characterized the provisions dealt with in Barnett as being “the same in all key elements” as section 36(2) of the Regulations and section 78 of the Fisheries Act, this is not entirely accurate. It bears pointing out that the circumstances in Barnett did not involve the commission of an offence. The Health of Animals Regulations provide for the forfeiture of animals that have been imported in contravention of the Health of Animals Act or its regulations, and for their removal from Canada where an inspector or officer has reasonable grounds to believe that this is the case or that the animals carry disease. Forfeiture and removal are not dependent on there being a conviction for the offence of contravening the Act or its regulations. They may be seen as regulatory mechanisms intended to prevent the introduction and spread of disease into Canada, rather than as penalties for contravening the law. In Barnett, the question of whether contravening the conditions of the permit could be punished as an offence did not arise. The situation with respect to section 36(2) of the Ontario Fishery Regulations, 1989 is rather different. Here, the sole purpose is to put in place a mechanism whereby the contravention of the conditions of a licence is punishable by fine or imprisonment as an offence. One is left to wonder whether the courts in Barnett would not have viewed the matter differently had they been faced with the question of whether Mr. Barnett could be imprisoned for contravening the conditions of the permit. Perhaps at least, this possibility might have caused a more careful consideration of the authority for the relevant provisions of the Regulations.

To the extent the Barnett decisions stand for the principle that express language is required to make the breach of a permit condition a breach of the act or regulations under which it was issued, they are entirely consistent with the position taken by your Committee. The problem in Barnett is that this principle was only partly applied by the courts. Again, if it requires express terms in the Act or regulations to treat a breach of a permit condition as a breach of the legislation under which it was issued, there must also be express authority in the parent statute to make a regulation having that effect. In not considering the question of the authority for sections 10(1)(a) and 160.1 of the Health of Animals Regulations, both the Trial Division of the Federal Court and the Federal Court of Appeal failed to deal with this second aspect of the principle.

To summarize, the purpose of section 36(2) of the Regulations is to make it an offence to contravene the terms and conditions of a licence. In section 78 of the Act, Parliament has provided that only contraventions of the Act and the regulations are to constitute offences. If Parliament had wished contraventions of licence conditions to constitute offences, it could, and no doubt would, have so enacted. Section 36(2) is nothing more than an attempt to treat contraventions of licence conditions, which are administrative requirements, as if they were contraventions of legislative requirements. Regardless of whether this is characterized as creating an offence or not, the requisite clear and explicit enabling authority for such a provision cannot found in the Fisheries Act.

If the provisions in question are thought to be necessary for the proper management of the fisheries, Parliament should be asked to amend the Fisheries Act to establish the offence of contravening the terms or conditions of a licence. A mere perception of necessity on the part of those charged with the administration of a statute is no substitute for proper legal authority. This is all the more so when the liberty of the subject is at stake. The central relevant fact is that in enacting section 36(2), the purpose of the Governor in Council is to make the breach of any licence term or condition punishable by fine or imprisonment. In the Fisheries Act, Parliament expressly reserved these penal sanctions for the breach of legislative requirements expressed either in the Act or in regulations made under the Act. The clear and explicit authority that would be required to support a regulation made for the purpose of expanding the application of the statutory penal provisions to requirements imposed in the exercise of an administrative power is not to be found in the Act at this time. In enacting section 36(2) of the Ontario Fishery Regulations, 1989 the Governor in Council is doing indirectly that which the Fisheries Act does not authorize him to do directly, namely, extend the application of section 78 of the Act to breaches of terms or conditions of licences.

As your Committee earlier reported to Parliament:

The inadequacy of the present statutory framework in terms of contemporary management of our fishery resources is a matter of public knowledge. Faced with a statute that does not meet modern management requirements, the Executive sees itself forced to resort to regulatory techniques of doubtful validity in order to meet those needs. While it recognizes those difficulties, your Committee does not consider they excuse the persistent and deliberate misuse of the regulation-making powers conferred by Parliament.

In its September 7, 2000 response to the Second Report of the Joint Committee (Report No. 66), the Government undertook to introduce amendments to the Fisheries Act that would provide the required legal authority for section 36(2) and similar provisions in a number of other regulations made under the Act. Well over two years later, Bill C-43, An Act to amend the Fisheries Act, was given First Reading on June 11, 2003. The Bill did not progress further prior to the prorogation of the Session on November 12, 2003, but was re-introduced as Bill C-33 in the Third Session of the Thirty-seventh Parliament. The bill had not been given Second Reading when Parliament was dissolved. In a letter dated March 24, 2005, the Minister of Fisheries and Oceans made it clear that the Bill would not be reintroduced at this time but that his officials were “planning to carry out a broader renewal of the Fisheries Act as soon as possible”. Having received such assurances before and being well aware of the problems and difficulties of reaching a consensus on a reform of the Fisheries Act, your Committee feels justified in treating this response as an indication that illegal provisions such as section 36(2) will remain in place for the foreseeable future. Considering that these regulations may have a direct impact on the liberties of Canadians, your Committee considers that further delay is not acceptable, and decided to propose the disallowance of section 36(2) of the Ontario Fishery Regulations, 1989. In the event the Houses agree to revoke this provision, your Committee would expect this decision to form a precedent for the removal of similar provisions in other regulations under the Fisheries Act.

In closing, the Committee wishes to briefly address the statement by the Ontario Minister of Natural Resources that:

Terms and conditions [of licences] are currently the only mechanisms by which Ontario can establish allowable quota, areas where fishing can occur, designates who can take fish under a licence, reporting for commercial fishing licences.

To the extent this comment suggests that disallowance of section 36(2) would impair the ability to impose terms and conditions of licences, it does not reflect a clear understanding of the nature of section 36(2). Disallowance of that section may change the manner of enforcing compliance with terms and conditions of licences, but would certainly not affect in any way the ability to impose such terms and conditions.

In the same letter, the Minister goes so far as to suggest that the disallowance of section 36(2) would “threaten the sustainability of our fisheries resources”. Whether or not section 36(2) remains in the Regulations, the authority to issue licences and to impose terms and conditions on the licence would remain unimpaired, as would the ability to enforce observance of those terms and conditions. The imposition of a fine or a jail term for breach of a licence condition, as opposed to suspending or cancelling the same licence, has nothing to do with the sustainability of the fishery resource.

While your Committee understands that the federal and provincial Ministers favour the enforcement of terms and conditions of licences though fines and imprisonment rather than licence suspensions or cancellations, the Committee would be remiss in its statutory responsibility if it allowed this policy preference to override the principle that the Executive may not create offences punishable by criminal sanctions without clear authority granted by Parliament. It is the responsibility of the Executive to ask the Houses for that authority.