Saulnier v RBC: A big catch for the fishing industry?

Last Friday, the Supreme Court of Canada (“SCC”) released a decision that may prove to be the big catch the Canadian fishing industry was waiting for. In Saulnier v Royal Bank of Canada, [2008] 3 SCR 166, fishing licenses were held to be “property” for the purposes of the federal Banking and Insolvency Act, RSC 1985, c B-3 [BIA] and Nova Scotia’s Personal Property Security Act, SNS 1995-96, c 13 [PPSA]. This will allow fishing licenses (which may cost hundreds of thousands of dollars) to be pledged as security for bank loans; which, in turn, should make loans easier to acquire and facilitate expansion of fishing businesses.

We here at have looked at this case a couple of times during the time of the hearing. For a detailed description of the facts, please see Jakki Warkentin’s summary, and for an analysis of the issues at stake, please see Brad Caldwell’s piece here.


The pertinent facts are as follows: Mr. Saulnier signed a General Security Agreement (“GSA”) with a bank to finance his fishing business, giving a security interest in “all…present and after acquired personal property including…Intangibles…and in all proceeds and renewals thereof.” The business failed, and Mr. Saulnier made an assignment in bankruptcy. The receiver and trustee in bankruptcy attempted to sell Mr. Saulnier’s four fishing licenses, but Mr. Saulnier refused to sign the necessary documents. He claimed that fishing licenses could not constitute ‘property’ for the purposes of the statutes above.

The Decision

While recognizing that fishing licenses are a major commercial asset (para 23), Binnie J. noted that the Nova Scotia Supreme Court’s (Royal Bank of Canada v Saulnier2006 NSSC 34) emphasis on “commercial realities” was not appropriate. He writes,

I agree with the Court of Appeal that ‘commercial realities’ cannot legitimate wishful thinking about the notion of ‘property’ in the BIA and the PPSA, although commercial realities provide an appropriate context in which to interpret the statutory provisions. The BIA and the PPSA are, after all, largely commercial statutes which should be interpreted in a way best suited to enable them to accomplish their respective commercial purposes (para 42).

As such, the SCC characterized their task as one primarily of statutory interpretation, i.e., determining the appropriate definition of “property” in the context of the BIA and the PPSA. The decision notes the privileges that come with the license:

[T]he holder of a s. 7(1) [of the Fisheries Act, R.S.C. 1985, c. F 14] licence acquires a good deal more than merely permission to do that which would otherwise be unlawful. The holder requires the right to engage in an exclusive fishery under the conditions imposed by the licence and, what is of prime importance, a proprietary right in the wild fish harvested thereunder, and the earnings from their sale (para 43).

The decision notes that this falls within the definition of “property” for the purposes of the BIA:

The terms of the definition are very wide. Parliament unambiguously signalled an intention to sweep up a variety of assets of the bankrupt not normally considered ‘property’ at common law. This intention should be respected if the purposes of the BIA are to be achieved (para 44).

Likewise, he definition of “intangible” property in the PPSA is also fulfilled:

The definition of ‘intangible’ simply describes something that otherwise constitutes ‘personal property’ but is not one of the listed types of tangible personal property. ‘Intangible’ would include an interest created by statute having the characteristics of a licence coupled with an interest at common law … Our concern is exclusively with the extended definitions of ‘personal property’ in the context of a statute that seeks to facilitate financing by borrowers and the protection of creditors. In my view the grant by the Fisheries Minister of a licence coupled with a proprietary interest as described above is sufficient to satisfy the PPSA definition (para 51).

Limited Rights

It should be noted that despite this decision, the court was careful not to recognize a property right in the license per se. That is, the SCC has not created rights in the license beyond that which the original owner had. The decision makes this clear:

It may well be that in the course of a bankruptcy the fishing licence will expire, or has already expired. If so, the trustee will have the same right as the original holder of an expired licence to go to the Minister to seek its replacement, and has the same recourse (or the lack of it) if the request is rejected. The bankrupt can transfer no greater rights than he possesses. The trustee simply steps into the shoes of the appellant Saulnier and takes the licence ‘warts and all’ (para 50).

This limitation also addressed the Attorney General’s concerns. The decision also notes:

Counsel for the Attorney General of Canada was greatly concerned that a holding that the fishing licence is property in the hands of the holder even for limited statutory purposes might be raised in future litigation to fetter the Minister’s discretion, but I do not think this concern is well founded. The licence is a creature of the regulatory system. Section 7(1) of the Fisheries Act speaks of the Minister’s ‘absolute discretion.’ The Minister gives and the Minister (when acting properly within his jurisdiction under s. 9 of the Act) can take away, according to the exigencies of his or her management of the fisheries. The statute defines the nature of the holder’s interest, and this interest is not expanded by our decision that a fishing licence qualifies for inclusion as ‘property’ for certain statutory purposes (para 48).


While this decision may seem to facilitate the getting of loans by Canadian fishers, it remains to be seen whether this right recognized by the SCC is sufficient to address the concerns of banks in taking security in these licenses. Regardless, it certainly seems like a step in the right direction in helping the growth of the Canadian fishing industry.

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