“I accept the undisputed evidence that there is some risk posed to Fraser River sockeye from diseases on salmon farms, but I cannot make a determination as to the precise level of risk. Therefore, precaution would suggest assuming that the risk is not insignificant.”
This quote could have been taken directly out of the recent Federal Court decision of Morton v Canada (Fisheries and Oceans) since the issues address by that case are closely related to the ones in front of the Cohen Commission of Inquiry (Cohen) 3 years before. In fact Justice Rinnie recognized this context. It seems, however, that the Department of Fisheries and Oceans (DFO) did not head the wise words of Commissioner Cohen and continued to treat some serious salmon disease – specifically piscine reovirus (PRV) and heart and skeletal muscle inflammation (HSMI) disease – carelessly. But ignoring an issue does not make it go away. Thankfully for the vigilance of Ms. Morton, DFO will now have to rethink some of its approach to aquaculture. In Part 1 of this post, I explored the issues of the standard of review, the precautionary principle, and the reasonableness of the aquaculture fish transfer licence conditions. In this Part, I look at the issue of illegal sub-delegation of discretionary powers, especially in this case when discretion was delegated to the industry. I reproduced the background section of Part 1 below for ease of reference.
The applicant, Alexandra Morton, a well-known biologist, gathered information about the transfers of salmon smolts (smolting is the process that allows a salmon to live in salt water) from a Marine Harvest Hatchery to a fish farm in Shelter Bay. Some of the smolts were tested positive for PRV, a disease that some believe is the cause of the infectious and deadly HSMI. Dubious about the legality of such transfers by Marine Harvest, the applicant initiated an application for judicial review. The initial application claimed that the Pacific Aquaculture Regulations did not allow for fish transfers and that the part of the Marine Harvest licence allowing such transfers was invalid. DFO abandoned its argument that the Pacific Aquaculture Regulations permitted fish transfers, and the case instead turned on whether or not the Fishery (General) Regulations (the Regulations) allowed for fish transfers as set out in the licence conditions.
Of great importance was section 56 of the Regulations setting conditions to the issuance of transfer licences:
56. The Minister may issue a licence if
(a) the release or transfer of the fish would be in keeping with the proper management and control of fisheries;
(b) the fish do not have any disease or disease agent that may be harmful to the protection and conservation of fish; and
(c) the release or transfer of the fish will not have an adverse effect on the stock size of fish or the genetic characteristics of fish or fish stocks.
The licence itself contained the following conditions on fish transfers:
3.1 The licence holder may transfer to this facility live Atlantic or Pacific salmonids from a facility possessing a valid aquaculture licence issued pursuant to section 3 of the Pacific Aquaculture Regulations between the Fish Health zones described in Appendix VI, provided transfers occur within the same salmonid transfer zone as outlined in Appendix II and provided:
(a) the species of live salmonid fish are the same as those listed on the face of this licence;
(b) the licence holder has obtained written and signed confirmation, executed by the source facility’s veterinarian or fish health staff, that, in their professional judgment:
(i) mortalities, excluding eggs, 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; 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.
A new Kind of Fish: Sub-delegation to the Aquaculture Industry
Part of the applicant’s argument was that the sub-delegation by the Minister to Marine Harvest through the licence condition 3.1(b) of her section 56 of the Regulations obligations was illegal. This argument comes from the legal maxim of delegatus non potest delegare (a delegate may not re-delegate). Simply put, when a legislative provision delegates some decision-making power to a delegate, that delegate may not in turn ask a sub-delegate to exercise the decision making-power in their place. Illegally delegating a power does not require abdicating that power; it only means that a person exercised it in lieu of the actual delegate or without sufficient control from them. The rule against sub-delegation depends on the language of the legislation creating the delegation in the first place. In some circumstances a provision may provide for sub-delegation, in which case the sub-delegation is perfectly legal. Such language can be implied, as when a statute speaks of the Minister but the delegate is often in fact a public servant of the department. Lastly, sub-delegation cannot be permanent as the delegate must have the power to end the sub-delegation at all time.
In this case, the Minister sub-delegated his discretion to allow or not fish transfers to Marine Harvest, through its aquaculture licence. The applicant alleged it was an unlawful sub-delegation of decision-making power to the industry. Justice Rennie determined the issue by asking whether the delegation required Marine Harvest to apply objective standards or subjective ones, the latter being unlawful in his view. He construed section 56 of the Regulations as permitting sub-delegation to the industry “of administrative and operational responsibilities”. Rennie J. then found that all the conditions, except 3.1(b)(iv), required Marine Harvest to apply objective criteria to determine if a fish transfer was permissible. He found, however, that condition 3.1(b)(iv) was improper sub-delegation because it conferred unlimited discretion to Marine Harvest (mainly through the absence of definition of “low risk”), and the Minister did not retain his supervisory power over the sub-delegate (the only supervision was after the facts documentation of the transfer process).
Sub-delegation of Environmental Pre-conditions to the Industry: How not to Delegate
I am uncomfortable with Justice Rennie’s approach on sub-delegation. Firstly, the language of section 56 of the Regulations is clear; it sets pre-conditions to the issuance of a licence. The Minister may issue a fish transfer licence if, and only if, the conditions of section 56 are met. The Minister has to be satisfied that, among other things “the fish [to be transferred] do not have any disease or disease agent that may be harmful to the protection and conservation of fish”. If she is not satisfied, the language of section 56 is pretty clear that she cannot issue a licence. The French version confirms this: “le ministre peut délivrer un permis dans le cas où”. This language clearly state that the Minister can issue a licence when, in that particular case (dans le cas où) the pre-conditions are met. What the Minister is delegating to Marine Harvest is her discretion to determine whether or not a licence should be granted, not simply, as the judge puts it, some administrative function. In fact administrative or ministerial power is described as “almost mechanical decision-making with virtually no discretion”; section 56 is clearly not such a task.
Rennie J., in the reasonableness part of the decision, treated section 56 as a pre-condition, but in this part he appears to interpret the section as licence conditions which obviously would be managed by the licence holder, subject to DFO enforcement. Such sub-delegation also brings problems of conflict of interests and bias since the decision-maker and the beneficiary are the same entity. How can a licence holder decide, even with objective standards, if pre-conditions to obtain its licence are met? If you ask me, it has an aura of improper delegation.
While the Minister may delegate the task of determining if pre-conditions are met to a director or an officer (in this case the original licence was issued by a Regional Director), she certainly cannot delegate it to a private party without express legislative authority. We are in the presence of an exercise of discretion regarding conservation standards, not hiring a private company to clean public buildings or transcribe meetings (truly administrative tasks, not statutory powers).
Secondly, sub-delegating discretionary powers, whether circumscribed or not, to a private entity seems at first view improper sub-delegation. This is not a case of a delegation to a public servant or another public body. I cannot see how delegating section 56 licencing power to the industry who is subjected to the Regulations can in any way be considered a valid sub-delegation. If Parliament or the Governor-in-Council would have wanted to state exceptions to fish transfer licence, create regulatory requirements to be respected by the industry, or create provisions for industry self-regulation, they would have done so; they would not have created pre-conditions to the issuance of a licence.
Rennie J. cites no authority to support his position. Moreover, the case law points in the other direction. In Re Niagara Wire Weaving Co Ltd (No 2), the Ontario Court of Appeal found that sub-delegating a decision-making power by the Securities Commission to the shareholders of a company, a regulated private party, was impermissible. The Superior Court of Québec found in two cases that a city council could not sub-delegate enforcement of smoking restriction bylaws to business owners. In those cases, even though the sub-delegations were of administrative functions, it was deemed unlawful because it was made outside of the administration to private parties.
The objective standard test mentioned by Justice Rennie seems only relevant when sub-delegation is made to a subaltern within the public administration under the direct authority of the true delegate. In fact, it seems to me that all the discussions in the case law about implicit power to sub-delegate and its restriction are grounded in the fact that the delegated power always remain within the public administration. Neither the Vic Restaurant or R v Cox decisions cited by Rennie J. can help his argument since the former is a delegation from a city council to police services, and the latter is a delegation within DFO. Neither remotely suggests that sub-delegation can be made to private parties. In fact, one of the reasons why sub-delegation is rarely improper is because it is made within the same administrative entity controlled by the delegate (the Minister in this case). An important aspect of sub-delegation is the level of control the delegate has over sub-delegates. The rule for objective standards is a manifestation of this, not an exception.
Thirdly, sub-delegating section 56 discretion to a private entity shields this public decision-making power from judicial review. A foundational principle of administrative law is the power of superior courts to review decisions of the administration. Through the preamble and section 96 of the Constitution Act, 1867, the power of judicial review was constitutionalized. As stated by Chief Justice Rinfret:
“… toute restriction aux pouvoirs de contrôle et de surveillance d’un tribunal supérieur est nécessairement inopérante lorsqu’il s’agit pour lui d’empêcher l’exécution d’une décision, d’un ordre ou d’une sentence rendue en l’absence de juridiction.”
Even clear attempts by Parliament or legislatures to shield decision-making from judicial review have been rejected by the courts, transforming them as simple indicia for curial deference. If the legislator cannot explicitly oust judicial review of administrative actions, it goes without saying that the Governor-in-Council or a Minister cannot implicitly oust it. In this case, the Minister effectively shields her discretion to issue licences from judicial review by sub-delegating her power to Marine Harvest. Only the original issuance of the aquaculture licence can be reviewed under the scheme approved by the Federal Court since decisions to transfer fish are in the hand of the industry, leaving us with the sore consolation of post infraction enforcement . The effect of the sub-delegation is to accomplish indirectly what one cannot do directly: escape constitutionally entrenched judicial review.
Lastly, it goes against the democratic principle that government decisions should be made by politically accountable people (responsible government). Although the Minister remains accountable for the initial licence issuance, we lose most of the political accountability after the issuance, including access to info, since the ultimate decision to transfer fish rests in the hands of a private party. This might not be an independent ground of review, but it furthers the point that sub-delegation to a private party is impermissible. In the word of Marshall JA:
“It is, therefore, as has been underscored throughout this judgment, ever important to keep in the forefront the reality that this entire question of the validity of exercise by departmental officials of ministerial powers is rooted in the tenets of responsible parliamentary government.”
* * *
The way I see it, DFO has two options. It can require a new licence for every fish transfer. Or it can create a condition in the aquaculture licence requiring the approval of the Minister before a transfer occur. The condition could contain the reasonable conditions 3.1(b)(i) & (iii), and such other reasonable conditions deemed necessary by the Minister, as standards the licence holder needs to meet to obtain approval. This way the industry knows what to expect, the process can remain relatively resource effective, and the ultimate power remains with the Minister who is answerable to Parliament. Additionally each decision would remain judicially reviewable. If DFO finds this framework tenuous, it is for the Governor-in-Council to change the Regulations, not for the courts to validate impermissible sub-delegation based on efficiency concerns.
Concluding thoughts of Part 2
While I have difficulty seeing sub-delegation, especially of discretionary powers, to a private party ever being proper without express statutory language, it is even more glaringly improper in an environmental setting. As stated by Cohen, DFO’s paramount objective should be the conservation of fish, and thus decision-making about conservation should remain with the Minister. DFO has accepted that conservation is its primary objective, but it seems that it has yet to actualize this position in its sub-delegation policy. I say this because it is impossible to say with a straight face that delegating environmental decision-making to the industry subjected to the environmental standards purported to be applied is the best way to ensure environmental compliance. You do not ask the polluter if they think they should be allowed to pollute. Marine Harvest is the industry, and has a direct interest in ensuring it can transfer fish, a necessary operation for aquaculture. It is in the worst position to assess independently and as objective as possible whether or not a fish transfer should happen.
Additionally, the precautionary principle also militates, in my view, against sub-delegation of environmental decision-making to private parties. After all, delegatus non potest delegare is primarily a statutory interpretation rule (a presumption), as can be the precautionary principle. In this case the evidence has demonstrated that Marine Harvest, and I assume the industry in general, does not err on the side of caution when it comes to fish diseases. DFO, with a broader view of the situation and with (allegedly) the interest of the Canadian public at heart, is best placed in theory to determine the risk of a particular activity to the conservation of fish.
Finally, one question still remains unanswered by the jurisprudence on sub-delegation. What is the applicable standard of review of this question? There are hints pointing both ways: (1) correctness because we are dealing with whether or not a sub-delegate can at all act in lieu of the delegate (a question of vires/jurisdiction) or (2) reasonableness because in the end the doctrine of delegatus non potest delegare is a rule of statutory interpretation, and the interpretation by the Minister of her “home” statute/regulation is presumed to attract the reasonableness standard. For now, it seems as the courts are applying a standard analogous to the one applied in procedural fairness or duty to consult issues, mixing both standards without much clarity.
Overall, Morton v DFO is a positive contribution to environmental law. The most egregious conditions of the licence were struck down and with more than a little help from the precautionary principle. Nevertheless, even in victory one must be cautious. This case may have been a victory, but if it remains unchallenged (either by other courts or on appeal) the Federal Court’s pronouncement on sub-delegation may live on. Letting such unsupported statement on sub-delegation of discretionary decision-making to private entities survive may cancel the positive effects of the decision. I think it would be bad policy to allow the aquaculture industry to determine itself the validity of fish transfers through statute or regulation, but it is simply bad law to allow it through sub-delegation absent clear statutory language.
 Ibid, para 19.
 The behaviour of DFO surrounding arguments seems to not have impressed Rennie J.: see Morton v Canada, para 106.
 Morton v Canada, para 23.
 Willis, ibid, 258 & 264.
 Willis, ibid, pp 259-260; s 24(2) of the Interpretation Act, RSC 1985, c I-21; David J Mullan, Administrative Law (Toronto: Irwin Law, 2001), 369-370 [Mullan]; and The Queen v Harrison,  1 SCR 238, 245.
 For example, in Archer v Canada (Attorney General), 2012 FC 1175, para 22, it was held that the sub-delegation of harbour maintenance by the Minister to the harbour lease holder was not improper if the lease was legally formed considering the regulatory requirements. There are several distinctions with the present case, mainly that the “sub-delegation” was not of a decision-making power, and that granting a lease obviously implies that the lessee has the ability to enjoy, maintain, manage, etc., the property being leased.
 St Peters Estates Ltd v Prince Edward Island Land Use Commission, 86 Nfld & PEIR 271, 1990 CanLII 2638 (PE SCTD), 81, citing Dene Nation et al v The Queen,  2 FC 942, 6 Admin LR 268 (FCTD).
 See David Lanham, “Delegation of Governmental Power to Private Parties” (1985) 6 Otago L Rev 50, 51.
 Ohayon c Côte St-Luc,  RJQ 2731 (QC CS); and Nozza c Laval (ville), JE 93-26 (QC CS)
 See for example Patrice Garant, Droit Administratif, 5e éd (Cowansville (Qc): Éditions Yvon Blais, 2004) 227-238 [Garant] where he speaks only of sub-delegation within the administration while enumerating rules of sub-delegation.
 Mullan, supra note 10, 372; Willis, supra note 8, 164; and Garant, supra note 20, 227-230 & 237-238.
 Denis Lemieux, “La nature et la portée du contrôle judiciaire” dans École du Barreau du Québec, Droit public et administratif, Collection de droit 2014-2015, Vol 7 (Cowansville (Qc): Éditions Yvon Blais, 2014) 208-210; and Garant, supra note 20, 481-484.
 The Constitution Act, 1867, 30 & 31 Vict, c 3; Alliance des Professeurs Catholiques de Montréal v Quebec Labour Relations Board,  2 SCR 140; Immeubles port louis ltée v Lafontaine (Village),  1 SCR 326; and MacMillan Bloedel Ltd v Simpson,  4 SCR 725.
 Alliance des Professeurs Catholiques de Montréal, ibid, 156.
 Henry H Perritt Jr “Negotiated Rulemaking before Federal Agencies: Evaluation of Recommendations by the Administrative Conference of the United States” (1985-1986) 74 Geo L J 1625, 1693-1695; Nicole Duplé, Droit constitutionnel : principes fondamentaux, 6e éd (Montréal: Wilson & Lafleur, 2014), 8-9 & 151-155; Ann Chaplin, “Carltona Revisited: Accountability and the Devolution of Statutory Powers” (2007-2008) 39 Ott L Rev 495; and R v NDT Ventures Ltd, 2001 NLCA 16, paras 62-70.
 R v NDT Ventures Ltd, ibid, para 70.
 Office of the Auditor General of Canada, Federal government response to the 2012 Cohen Commission report into the decline of Fraser River salmon and concerns about the potential impact to fish habitat protection under the amended Fisheries Act, Environmental Petition 357, 21 February 2014.
 Re Peralta et al and The Queen in Right of Ontario, 49 OR (2d) 705 (1988 ONCA); aff’d  2 SCR 1045.
 However see Challenger Geomatics Ltd v Alberta (Appeals Commission for Alberta Workers’ Compensation), 2014 ABQB 712, 58; De Beers v Mackenzie Valley, 2007 NWTSC 24, para 30; Kindratsky v Canada (Attorney General), 2006 FC 1531, para 12; Bagshaw v Canada (Attorney General), 2012 FC 291, paras 21-22; Association of Professional Engineers of Ontario v Ontario (Municipal Affairs and Housing), 284 DLR (4th) 322, 2007 CanLII 17629 (ON SCDC), para 34; Canada (Attorney General) v Vorobyov, 2014 FCA 102; Canadian Generic Pharmaceutical Association v Canada (Health), 2009 FC 725, para 44; Apotex Inc v Canada (Health), 2010 FCA 334, para 56; and Canadian Assn of Regulated Importers v Canada (Attorney General),  2 FCR 247, 1994 CanLII 3460 (FCA). These cases state that sub-delegation is to be reviewed on the correctness standard because it is a question of law and/or jurisdiction. The judges do not explain how they reached their conclusion in any details. Also, the post Dunsmuir decisions do not consider the presumption of reasonableness review applicable to questions of law.
In Morton v Canada, Justice Rennie seems to imply that the standard is reasonableness: para 86. See also Niagara Escarpment Commission v The Joint Board, 2013 ONSC 2497, paras 54-57.