This case involved the failure of the Department of Fisheries and Oceans ("DFO") in 2003 to negotiate a co-management arrangement with the snow crab fleet, which would have provided funding for scientific research related the snow crab fishery. As a result of that failure, DFO decided to undertake research itself by hiring a private contractor and paying him by issuing a scientific research licence that allowed the contractor to retain and sell 50 metric tons of snow crab. Although the preferred method of research was by means of trawl survey, since the trawl surveys would not have produced enough fish to allow the contractor to catch and retain 50 metric tons, the licence also provided for two trap surveys. This method of financing was adopted notwithstanding the fact that the Auditor General has previously raised concerns about such methods.
In 2003, a snow crab fish harvester brought an application for a declaration that the Minister of Fisheries did not have the power "to issue a scientific fishing licence in exchange for a 50-ton allocation of snow crab" (para 9). At the initial application, the Trial Division of the Federal Court denied the application for the following reasons (as described by the Court of Appeal):[I]issuing the licence would for all intents and purposes be no more than a veiled means of funding the DFO’s activities" (paragraph 27). He says that in his opinion "the means of compensating the licence holder for his or her contribution to the DFO’s scientific analyses is purely accessory to the true object of the licence" (paragraph 28); that "[t]he situation could have been regarded differently if it had been proven that the crab allocation granted to the licence holder resulted in significant net profits" (paragraph 29) and that "unless the Act were to prohibit the Minister from allocating a snow crab quota to a fisher in exchange for surveys carried out on behalf of the DFO for scientific purposes, I see nothing in the licence itself that would render its issuance unlawful or ultra vires" (paragraph 31). Stating that he was therefore of the opinion that "the Act is silent on this [issue]" (paragraph 32), he then says that the Minister has a broad discretion in issuing licences and that in this case he had exercised his discretion while taking into account the Parliament’s objectives.
Upon appeal to the Federal Court of Appeal, the trial level decision was overturned and the requested declaration was granted. In doing so, the Court of Appeal was careful to clarify that it did not take issue with the power of the Minister to issue licences for scientific purposes (para. 11) or even authorize fish caught under a scientific licence to be sold under some circumstances (para. 25). However, based upon the facts of the particular case, the court found that the Minister erred in not obtaining authorization pursuant to the provisions of the Financial Administration Act. In a widely quoted part of the decision the court said as follows:[I]t is accepted, as the Supreme Court of Canada put it in Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), 1997 CanLII 399 (S.C.C.),  1 S.C.R. 12, that "Canada’s fisheries are a ‘common property resource’, belonging to all the people of Canada" and that "it is the Minister’s duty to manage, conserve and develop the fishery on behalf of Canadians in the public interest" (at pages 25 and 26). They do not belong to the Minister, any more than does their sale price. Also, when the Minister decided to pay a contracting party with the proceeds of sale of the snow crab, he was paying with assets that did not belong to him. Paying with the assets of a third party is, to say the very least, an extraordinary act that the Administration could not perform unless so authorized by an act or by duly enacted regulations. Such an act, on its very face, is like an expropriation of fishery resources or a tax on them for the purposes of funding the Crown’s undertakings.
Since the application was limited to declaratory relief, the decision has only prospective effect to future snow crab research.