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Canada Mortgage and Housing Corporation (Re), 2023 OIC 33

Date: 2023-08-08
OIC file number: 5820-00897
Institution file number: AF-2019-00042 / JMH

Summary

The complainant alleged that the Canada Mortgage and Housing Corporation (CMHC) had improperly withheld information under paragraph 18(a) (government trade secrets, government financial, commercial, scientific or technical information), paragraph 18(b) (competitive position of government institutions, negotiations by government institutions), paragraph 20(1)(b) (confidential third-party financial, commercial, scientific or technical information), paragraph 21(1)(a) (advice or recommendations) and paragraph 21(1)(b) (accounts of consultations or deliberations) of the Access to Information Act. This was in response to an access request for records related to the development and significant policy changes to the Canada Mortgage Bonds (CMB) program, as well as risk assessment for the CMB and the National Housing Act Mortgage-Backed Securities (NHA MBS) programs. The complaint falls within paragraph 30(1)(a) of the Act.

The scope of the complaint was reduced to remove instances where paragraph 20(1)(b) was applied to withhold certain third-party information.

During the investigation, CMHC invoked paragraph 68(a) to withhold some third-party information available for purchase. CMHC also disclosed some information it had withheld under paragraphs 18(a), 18(b), 21(1)(a) and 21(1)(b). CMHC showed that it met all of the requirements of these exemptions where it maintained them.

The third parties whose information remained at issue did not provide any representations and CMHC could not show that it met all the requirements of paragraph 20(1)(b).

The Information Commissioner ordered that CMHC disclose all information at issue withheld under paragraph 20(1)(b).

CMHC gave notice that it would implement the order.

The complaint is well founded.

Complaint

[1] The complainant alleged that the Canada Mortgage and Housing Corporation (CMHC) had improperly withheld information under paragraph 18(a) (government financial, commercial, scientific or technical information), paragraph 18(b) (competitive position of government institutions, negotiations by government institutions), paragraph 20(1)(a) (third-party trade secrets), paragraph 20(1)(b) (confidential third-party financial, commercial, scientific or technical information), paragraph 21(1)(a) (advice or recommendations) and paragraph 21(1)(b) (accounts of consultations or deliberations) of the Access to Information Act. This was in response to an access request for records related to the development and significant policy changes to the Canada Mortgage Bonds (CMB) program, as well as risk assessments for the CMB and the National Housing Act Mortgage-Backed Securities (NHA MBS) programs. The complaint falls within paragraph 30(1)(a) of the Act.

[2] During the investigation, the complainant decided it was no longer necessary for the Office of the Information Commissioner (OIC) to investigate instances where paragraph 20(1)(b) was applied to third-party financial information, third party names, or information that could reveal the identities of third parties.

Investigation

[3] When an institution withholds information, including information related to third parties, the third parties and/or the institution bear the burden of showing that refusing to grant access is justified.

[4] On October 19, 2022 and May 3, 2023, CMHC disclosed additional information, which it had withheld under paragraphs 18(a), 18(b), 21(1)(a) and 21(1)(b) when it responded to the access request. CMHC indicated that this information was disclosed due to the passage of time. CMHC continued to withhold the remaining information under paragraphs 18(a), 20(1)(a), 20(1)(b), 21(1)(a) and 21(1)(b). CMHC also decided to rely on paragraph 68(a) to withhold information.

Paragraph 68(a): material available for purchase

[5] Under section 68, the right to access records under Part 1 of the Access to Information Act does not apply to material for sale to the public.

Does the information meet the requirements of the exception?

[6] During the investigation, CMHC relied on paragraph 68(a) to withhold information related to Moody’s on pages 601-602. CMHC confirmed that the information was copied directly from a proprietary tool of Moody’s, and this exact information is available to the public for purchase.

[7] CMHC showed that the information is the same as the material available for sale to the public. Consequently, I conclude that the information is excluded from the Act under paragraph 68(a).

[8] Since the information meets the requirements of this exception, the OIC did not examine the other exemptions CMHC applied to the same information. In particular, no review of the application of paragraph 20(1)(a) was necessary.

Paragraph 18(a): government financial, commercial, scientific or technical information

[9] Paragraph 18(a) allows institutions to refuse to disclose financial, commercial, scientific or technical information of the Government of Canada or a government institution when that information has or is likely to have substantial value.

[10] To claim this exemption, institutions must show the following:

  • The information is financial, commercial, scientific or technical.
  • The information belongs to the Government of Canada or one of its institutions.
  • The information has substantial, rather than nominal, market value or is reasonably likely to have such value in the future.

[11] When these requirements are met, institutions must then reasonably exercise their discretion to decide whether to disclose the information.

Does the information meet the requirements of the exemption?

[12] I accept that the information at issue is financial, commercial, scientific or technical information belonging to the Government of Canada. However, I questioned whether all of the information at issue has substantial market value or is reasonably likely to have such value in the future. I am satisfied, based on CMHC’s representations, that much of the information does have such market value. More specifically, I accept that information such as the models used by CMHC to set guarantee fees and information related to CMHC’s risk appetite meet the requirements of the exemption.

[13] I conclude that the information that remains withheld meets the requirements of paragraph 18(a).

Did the institution reasonably exercise its discretion to decide whether to disclose the information?

[14] Since the information meets the requirements of paragraph 18(a), CMHC was required to reasonably exercise its discretion to decide whether to disclose the information. In doing so, CMHC had to consider all the relevant factors for and against disclosure.

[15] An institution’s decision not to disclose information must be transparent, intelligible and justified. An institution’s explanation will be sufficient when the institution provides details of how it made the decision and when the documents related to the decision-making process shed light on why the institution proceeded as it did.

[16] In its representations, CMHC provided details as to the factors it considered when deciding whether to withhold information under paragraph 18(a). CMHC considered, among other factors, how disclosure of information that could reveal future fee levels would impact the demand for funding, and specific harms to CMHC’s loan insurance business that could result from disclosing CMHC’s risk appetite.

[17] I conclude that CMHC considered all relevant factors when it decided not to disclose the information. Consequently, the exercise of discretion by CMHC is reasonable.

Paragraph 20(1)(b): confidential third-party financial, commercial, scientific or technical information

[18] Paragraph 20(1)(b) requires institutions to refuse to disclose confidential financial, commercial, scientific or technical information provided to a government institution by a third party (that is, a private company or individual, but not the person who made the access request).

[19] To claim this exemption, institutions must show the following:

  • The information is financial, commercial, scientific or technical.
  • The information is confidential.
  • The third party supplied the information to a government institution.
  • The third party has consistently treated the information as confidential.

Does the information meet the requirements of the exemption?

[20] CMHC is withholding information remaining within the scope related to three third parties pursuant to paragraph 20(1)(b): Cornerstone Capital (Cornerstone), Andrew Kalotay Associates, Inc. (AKA) and Moody's Investors Service, Inc. (Moody’s). The OIC sought representations from these three third parties pursuant to paragraph 35(2)(c). While Moody’s responded, neither Cornerstone nor AKA provided representations. CMHC invoked the exclusion found at paragraph 68(a) after the OIC sought representations pursuant to paragraph 35(2)(c). As I have found the information related to Moody’s is excluded from the Act, an analysis of Moody’s representations is unnecessary.

[21] As required by section 36.3, the OIC notified the two relevant third parties, Cornerstone and AKA, of my intention to order CMHC to disclose some of the information at issue. Neither third party responded.

[22] Very little of the information related to the third parties clearly fits within the common definitions of financial, commercial, scientific or technical information, so as to meet the first requirement of the exemption. The OIC asked the third parties to identify information that specifically fits within these categories and explain how the information is of the specified nature. Lacking any representations in support of the first requirement of the exemption, it was not necessary to determine whether the other requirements were met.

[23] Neither CMHC nor the third parties provided representations supporting the application of paragraph 20(1)(b) to the information withheld related to Cornerstone and AKA. As a result, I conclude that the withheld information does not meet the requirements of paragraph 20(1)(b).

Paragraphs 21(1)(a) and (b): advice or recommendations and accounts of consultations or deliberations:

[24] Paragraph 21(1)(a) allows institutions to refuse to disclose advice or recommendations developed by or for a government institution or a minister.

[25] To claim paragraph 21(1)(a), institutions must show the following:

  • The information is advice or recommendations.
  • The information was created by or for a government institution or minister.

[26] Paragraph 21(1)(b) allows institutions to refuse to disclose accounts of consultations or deliberations in which government employees, ministers or members of a minister’s staff took part.

[27] To claim paragraph 21(1)(b), institutions must show the following:

  • The information is an account—that is, a report or a description.
  • The account is of consultations or deliberations.
  • At least one of an institution’s directors, officers or employees, a minister or a member of a minister’s staff was involved in the consultations or deliberations.

[28] In addition, the records that contain the information must have been created less than 20 years before the access request was made.

[29] When these requirements are met, institutions must then reasonably exercise their discretion to decide whether to disclose the information.

Does the information meet the requirements of the exemption?

[30] I accept that the information that remains withheld by CMHC is recommendations to management within presentations and reports created by CMHC employees less than 20 years before the request was made and that none of this information falls under subsection 21(2).

[31] I conclude that the withheld information remaining at issue does meet the requirements of paragraph 21(1)(a).

Did the institution reasonably exercise its discretion to decide whether to disclose the information?

[32] Since the information meets the requirements of paragraph 21(1)(a), CMHC was required to reasonably exercise its discretion to decide whether to disclose the information. In doing so, CMHC had to consider all the relevant factors for and against disclosure.

[33] CMHC provided representations as to the factors it considered in its exercise of discretion, and those factors do appear to be relevant. The OIC questioned, however, why CMHC exercised its discretion to release the information on pages 268-277, while deciding to withhold very similar information on pages 262-267 and 918-933. CMHC explained that this inconsistency was due to an error, and that the information should have been consistently withheld, including how it exercised its discretion with respect to this information. I accept that this inconsistency does not signal an unreasonable exercise of discretion.

[34] I conclude that CMHC considered all relevant factors when it decided not to disclose the information. Consequently, the exercise of discretion by CMHC was reasonable.

[35] Where the information meets the requirements of this exemption, I did not examine the other exemptions CMHC applied to the same information.

Result

[36] The complaint is well founded.

Order

Under subsection 36.1(1) of the Act, I order the President of the Canada Mortgage and Housing Corporation to disclose all information withheld under paragraph 20(1)(b) related to Cornerstone and AKA.

On July 12, 2023, I issued my initial report to the President of the Canada Mortgage and Housing Corporation setting out my order.

On July 31, 2023, CMHC’s confirmed that it would release the remaining third-party information after the mandatory waiting period has elapsed, following receipt of my final report.

I have provided Moody’s with this report.

When a complaint falls within the scope of paragraph 30(1)(a), (b), (c), (d), (d.1) or (e) of the Act, the complainant and institution have the right to apply to the Federal Court for a review. They must apply for this review within 35 business days after the date of this report. When they do not, third parties may apply for a review within the next 10 business days. The person who applies for a review must serve a copy of the application for review to the relevant parties, as per section 43. If no one applies for a review by these deadlines, this order takes effect on the 46th business day after the date of this report.

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