A Supreme Court decision regarding the legal nature of fishing licences has confirmed what we've already known for some time, writes Communications Manager Eric Enno Tamm: fishing licences and quota are, in fact, "property."
In an 8-0 decision in Saulnier v. Royal Bank, the Justices upheld a ruling that commercial fishing licences are property that can be sold to settle a bankruptcy. Nova Scotia fisherman Benoit Saulnier and his company Bingo Queen Fisheries Ltd. went bankrupt in 2004. His creditors tried to sell four fishing licences – worth $630,000 – to cover his debts.
Saulnier refused to sell them, arguing that the licences – which are described as annual fishing “privileges” granted by the Minister under the Fisheries Act – didn't meet the legal definition of “property” and thus weren't subject to sale as assets. The court rejected this argument.
The Justices write: "A… licence confers to the holder a right to engage in an exclusive fishery under the conditions imposed by the licence, and a proprietary right in the fish harvested and the earnings from their sale. The subject matter of the licence, coupled with a proprietary interest in the fish caught pursuant to its terms, bears a reasonable analogy to a common law profit à prendre which is undeniably a property right."
In 1969, the number of licences in BC fisheries was limited as part of a plan to reduce the number of fishermen. Immediately, fishermen began to buy, sell, trade and lease their licences. Despite the Fisheries Act defining them as "privileges," licences began to acquire the characteristics of personal property. In fact, by 2007 these “privileges” in BC were worth about $1.6 billion. That's at least five times the value of tangible assets like vessels and equipment in the BC fishery.
While the Supreme Court’s legal clarificaiton is welcomed, we’ve sounded an alarm bell, in a 2004 report titled Catch-22, about the growing overcapitalization in licences and quota that has priced rural and Aboriginal fishermen out of the market. Access to capital has become critical to fishermen.
Many banks and financial institutions already treat fishing licences and quota as property for the purposes of collateralizing business loans. In fact, Ecotrust Canada's subsidiary capital corporation has already accepted them as security.
So, the Supreme Court has only confirmed the de facto practice of most lending institutions. Whatever cloud of uncertainty hanging over the legal nature of fishing licences has now disappeared entirely.