What Elson Means to Our Communities – a history of owner-operator

This article was originally published in the Spring 2019 edition of the Union Forum magazine.

What Elson Means to Our Communities – a history of owner-operator

Robert Keenan
Projects Manager, FFAW-Unifor

Rural Newfoundland and Labrador was founded, built, and sustained on the fishery. For centuries, the industry was mainly defined by the cod fishery; for the past thirty years, it has been largely the shellfish fishery of snow crab and shrimp, both of which are very high value fisheries.

In the late 1970s, an important decision was made that would change the fishery on the east coast of Canada. It was decided that inshore fishing licenses – licenses for harvesters with boats 65 feet or less – should not be owned by corporations, and must instead belong to the individual fishers in the community that actually participate in the fishery. This was known as the fleet separation policy.

The fleet separation policy empowered fish harvesters in a manner not seen since the establishment of the Fish Food and Allied Workers’ Union. Fish processing companies would now have to buy product from harvesters since the option of vertical integration – the companies owning the plants and the licenses to catch the fish – would not be allowed.

Fleet separation put harvesters and processors on equal footing. It created a balanced marketplace, harvesters supplied product that processors demanded.

For the past 25 years, this balanced marketplace has been under constant attack from fish processing corporations. Not content with harvesters as equals in the fishing business, processing companies created agreements that placed total control of licenses in the hands of the company while the name attached to the license remained with the fish harvester. The agreements became known as “controlling agreements”, as they vested in the corporation total control of the license: when it would be fished, in which boat, and with what crew. The corporation even retained control over the license when the license holder died.

Over time, companies bought up more and more licenses through controlling agreements. This massively inflated the price for licenses, financially-inhibited new entrants, and undermined collective bargaining. For a long time DFO turned a blind eye to controlling agreements, but after a concerted effort by inshore harvester associations an enforcement mechanism was put in place. The corporations used this attempt at enforcement to test the legality of DFO policing controlling agreements.

For the past several years, the Elson case – named for the fish harvester that was asked by the corporations to admit he was in a controlling agreement – moved its way through various tribunals and courts. At every step, the case for Elson was fully defeated.

Two weeks ago, the Federal Court of Appeal, the second highest level court in Canada, unanimously rejected Elson’s appeal. In doing so, the Court stated, “As part of the management of the fisheries, DFO has the right to know whether the named license holder is the beneficial owner of that license, or whether he or she is simply holding the license in name only. DFO has the right to know whether a non-eligible person (such as a corporation) is the person who will be controlling that license.”

In reference to the companies that pushed the appeal, the Court wrote, “These companies acquired the benefit of these fishing licenses and the right to exploit the fisheries resources related thereto. As a result of the Fleet Separation Policy, this is something that these companies could not do. These companies would, therefore, be doing indirectly what these companies could not do.”

The decision in Elson should leave no doubt as to the importance and enforcement of the fleet separation policy. It is our sincere hope that DFO keep these statements from the Court of Appeal in the forefront of their thinking as they go about abolishing controlling agreements from the inshore fishery.