Innovation, Science and Economic Development Canada (Re), 2022 OIC 25

Date: 2022-06-02
OIC file number: 5819-00768
Institution file number: A-2018-00688

Summary

The complainant alleged that Innovation, Science and Economic Development Canada (ISED) has improperly withheld information under paragraph 20(1)(c) (financial impact on a third party) of the Access to Information Act in response to an access request for information related to the Technology Partnerships Canada (TPC) program including the Total Repayment figures related to several projects.

The scope of the complaint was narrowed to information related to twenty-one (21) third parties.

Several third parties and ISED provided representations in support of the exemption. However, neither the third parties nor ISED demonstrated that the information at issue met all of the requirements of the exemption.

The Information Commissioner ordered ISED to disclose all information at issue.

ISED gave notice that it would implement the order.

The complaint is well founded.

Complaint

[1]      The complainant alleged that Innovation, Science and Economic Development Canada (ISED) has improperly withheld information under paragraph 20(1)(c) (financial impact on a third party) of the Access to Information Act in response to an access request for information related to the Technology Partnerships Canada (TPC) program including the Total Repayment figures related to several projects.

[2]      During the investigation, the complainant decided it was no longer necessary for the Office of the Information Commissioner (OIC) to investigate the information withheld by ISED relating to all of the third parties. The complainant decided to narrow the scope of the complaint down to the following 21 third parties:

• Bell Helicopter Textron Canada Limited (BTCL)
• CAE Inc. (CAE)
• CMC Electronics Inc.
• Héroux-Devtek Inc.
• Honeywell Limited (including for Com Dev Ltd.)
• IBM Canada Ltd.
• GlaxoSmithKline (for ID Biomedical Corporation)
• Iogen Energy Corporation / Iogen Corporation (Iogen)
• Magellan Aerospace Limited (including for Bristol Aerospace Limited, Fleet Industries Ltd., Haley Industries Limited, and Orenda Recip Inc.)
• MDA Corporation (formerly MacDonald, Dettwiler and Associates Inc. & MDA Systems Ltd., including for Cascade Data Services Inc.)
• Medtronic Canada (for World Heart Corporation)
• Mitel Networks Corporation (Mitel)
• Navistar Canada, Inc. (Navistar)
• Pratt & Whitney Canada Corp. (P&WC)
• BlackBerry Limited (formerly Research In Motion Limited)
• Safran Landing Systems Canada Inc.
• Sanofi Pasteur Limited
• Siemens Canada Limited
• SUEZ Water Technologies & Solutions (for GE Water & Process Technologies Canada)
• Suncor Energy Inc.
• Vale Canada (for Vale Newfoundland & Labrador Limited)

[3]      The information at issue in the complaint is the Total Repayments figures associated with the 80 projects listed in Table 1.

Table 1: Information previously disclosed to the complainant

*Total Repayment figures differ from the above assistance and expenditures and are associated with each of these projects.

Investigation

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

[5]      The OIC sought representations from all 21 third parties concerning the information exempted by ISED under paragraph 20(1)(c).

[6]      Six (6) of the third parties provided representations opposing disclosure of the Total Repayments figures corresponding to their project(s): BTCL, CAE, Iogen, Mitel, Navistar and P&WC.

[7]      Eight (8) of the third parties did not provide any representations: CMC Electronics Inc., GlaxoSmithKline, Honeywell Limited, IBM Canada Ltd., Magellan Aerospace Limited, Medtronic Canada, SUEZ Water Technologies & Solutions and Suncor Energy Inc.

[8]      Seven (7) of the third parties either consented or did not oppose to the disclosure of the information related to them.  Accordingly, ISED has confirmed it is now willing to fully disclose the withheld information related to BlackBerry Limited, Sanofi Pasteur Limited and Vale Canada, Héroux-Devtek Inc., MDA Corporation, Safran Landing Systems Canada Inc. and Siemens Canada Limited.

[9]      Finally, some of the third parties raised concerns related to the application of paragraph 20(1)(b) and 20(1)(d) of the Act. Although ISED decided to only rely on paragraph 20(1)(c) in its response to the access request, ISED was therefore also provided with an opportunity to make representations on paragraphs 20(1)(b) and (d).

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

[10]    Paragraph 20(1)(b) requires institutions to refuse to release 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).

[11]    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.

[12]    When these requirements are met, and the third party to whom the information relates consents to its disclosure, subsection 20(5) requires institutions to reasonably exercise their discretion to decide whether to release the information.

[13]    In addition, when the requirements are met, subsection 20(6) requires institutions to reasonably exercise their discretion to decide whether to release the information for public health or public safety reasons, or to protect the environment, when both of the following circumstances exist:

• disclosure of the information would be in the public interest; and
• the public interest in disclosure clearly outweighs any financial impact on the third party, any prejudice to the security of the third party’s structures, networks or systems, or competitive position, or any interference with its contractual or other negotiations.

[14]    However, subsections 20(2) and 20(4) specifically prohibit institutions from using paragraph 20(1)(b) to refuse to release information that contains the results of product or environmental testing carried out by or on behalf of a government institution, unless the testing was done for a fee for an individual or an organization other than a government institution.

Does the information meet the requirements of the exemption?

[15]    Several of the third parties raised paragraph 20(1)(b) in their representations. Based on the representations from ISED and the third parties, I accept that the Total Repayments figures are financial and commercial in nature.

[16]    I am not convinced, however, that any of the Total Repayments figures are objectively confidential, so as to meet the second requirement for the paragraph 20(1)(b) exemption. As set out below, the third parties and ISED have not demonstrated that two of the three criteria for objective confidentiality are met. They have not demonstrated that the circumstances in which the repayments originate and are communicated give rise to reasonable expectation that they will not be disclosed. Nor have they demonstrated that confidential communication of the information would foster the relationship between the third party and the institution for public benefit when the opposite appears to be the case.

[17]    The second criterion for the paragraph 20(1)(b) exemption requires that each of the following conditions are met:

• The information contained in the record is not available from other sources in the public domain or obtainable by observation or independent study by a member of the public acting on his or her own;
• the circumstances in which the information originates and is communicated give rise to a reasonable expectation that it will not be disclosed;
• the information, whether provided by law or supplied voluntarily, is communicated to the government within a relationship that is either fiduciary or not contrary to the public interest and that will be fostered for the public benefit by confidential communication.  (see Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, para. 133; Canada (Information Commissioner) v. Canada (Transportation Accident Investigation and Safety Board), 2006 FCA 157, para. 72).

[18]    In reviewing the information and considering the representations received, I accept that the Total Repayments figures are not available from other sources in the public domain or obtainable by observation or independent study by a member of the public acting on his or her own. The first requirement needed to establish confidentiality by an objective standard is therefore satisfied.

[19]    With respect to the second requirement of objective confidentiality – that the circumstances in which the information originates and is communicated give rise to a reasonable expectation that it will not be disclosed – the Courts have found that there is a reduced expectation of confidentiality when public funds are involved and in such circumstances disclosure is often in the public interest (see: Canada Post Corp. v. Canada (Minister of Public Works and Government Services), 2004 FC 270 at paragraph 40; AstraZeneca Canada Inc. v. Canada (Health), 2005 FC 189, para. 76, affirmed in 2006 FCA 241).

[20]   During the investigation, several third parties made submissions regarding the second requirement of the objective confidentiality test.

[21]   ISED also provided representations with regard to paragraph 20(1)(b). Regarding the confidentiality criterion, ISED referenced confidentiality clauses that are present in some of the Contribution Agreements between third parties and ISED (which restrict disclosure of the “contents of the Agreement”). ISED explained that some of the third parties in the present investigation did not have, in their Contribution Agreements, a “Public Release of Repayment Amount” clause.

[22]   However, general confidentiality clauses restricting the disclosure of the “contents of the Agreement” and the lack of a clause explicitly permitting the release of repayment amounts are not sufficient on their own, in the circumstances, to create a reasonable expectation that repayment amounts by companies receiving public funding, to ISED, will not be disclosed. The repayment amounts contribute to reflecting net expenditures by ISED on each project – public funds, and often large sums of public funds. I am not convinced that such repayment amounts can be considered to have originated and/or been communicated with a reasonable expectation that they would not be disclosed.

[23]    ISED also submitted that the third requirement of the objective confidentiality test – the public benefit criterion – is met because ISED discloses other information, including total repayments for the program and repayable contributions. However, this is not directly responsive to the relevant legal test.

[24]    Neither ISED, nor any of the third parties, demonstrated that the relationship between these third parties and ISED would be fostered for the public benefit by confidential communication of the Total Repayments figures.

[25]    Repayments are not voluntary, and disclosure of repayment information would not deter the third parties from making future repayments, since they are a contractual obligation. This stands in contrast with a situation where confidentiality needs to be preserved in order to ensure that third parties are not discouraged from supplying such information to government in the future (see Air Atonabee Ltd. v. Canada (Minister of Transport) (1989), 27 C.P.R (3d) 180 (Fed T.D), para. 45).

[26] To the extent that repayments reflect the success or lack thereof of a project, such as by providing an indication of gross revenues or sales, these are the fruits of government investment; public, rather than confidential, communication of repayment information would appear to foster the relationship between the third party and the government institution for public benefit.

[27]    In Canada (Minister of Public Works and Government Services) v. The Hi-Rise Group Inc., 2004 FCA 99, para. 41, the Federal Court of Appeal stated: “Absent special circumstances (national security comes to mind), I fail to see how public benefit could be fostered by maintaining the confidentiality of amounts paid or payable by government pursuant to contractual obligations with third parties.”

[28] I find that this principle, as it relates to amounts paid or payable by government, extends to the results of amounts paid or payable by government – which are paid to government. The Total Repayments figures, when taken together with the initial contribution made by the government to the third party, reveal the net amount actually spent on each project by government.

[29] To summarize, I am not convinced that any of the Total Repayments figures are objectively confidential within the meaning of the exemption in paragraph 20(1)(b). First, they have not been shown to have been communicated in a reasonable expectation of confidence that they will not be disclosed. Second, it has not been demonstrated that confidential communication of these figures would foster the relationship between the relevant third parties and ISED for public benefit. It is therefore unnecessary to consider whether the third and fourth criteria needed to establish the applicability of paragraph 20(1)(b) are met.

[30]    In light of the above, I conclude that the Total Repayments figures do not meet the test for exemption pursuant to paragraph 20(1)(b).

Paragraph 20(1)(c): Financial impact on a third party

[31]    Paragraph 20(1)(c) requires institutions to refuse to release information that, if disclosed, could reasonably be expected to have a material financial impact on a third party (that is, a private company or individual, but not the person who made the access request) or harm its competitive position.

[32]    To claim this exemption with regard to financial impact on a third party, institutions must show the following:

• Disclosing the information could result in material financial loss or gain to the third party.
• There is a reasonable expectation that this harm could occur—that is, the expectation is well beyond a mere possibility.

[33]    To claim this exemption with regard to competitive position, institutions must show the following:

• Disclosing the information could injure the competitive position of the third party.
• There is a reasonable expectation that this prejudice could occur—that is, the expectation is well beyond a mere possibility.

[34]    When these requirements are met, and the third party to whom the information relates consents to its disclosure, subsection 20(5) requires institutions to reasonably exercise their discretion to decide whether to release the information.

[35]    In addition, when the requirements are met, subsection 20(6) requires institutions to reasonably exercise their discretion to decide whether to release the information for public health or public safety reasons, or to protect the environment, when both of the following circumstances exist:

• disclosure of the information would be in the public interest; and
• the public interest in disclosure clearly outweighs any financial impact on the third party, any prejudice to the security of the third party’s structures, networks or systems, or competitive position, or any interference with its contractual or other negotiations.

[36]    However, subsections 20(2) and 20(4) specifically prohibit institutions from using paragraph 20(1)(c) to refuse to release information that contains the results of product or environmental testing carried out by or on behalf of a government institution, unless the testing was done for a fee for an individual or an organization other than a government institution.

Does the information meet the requirements of the exemption?

[37] For paragraph 20(1)(c) to apply, there must be a clear and direct connection between the disclosure of specific information and a risk of harm well beyond the merely possible or speculative (see Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, paras. 197, 206).

[38]    I am not convinced that the Total Repayments figures at issue meet this test. The main submissions advanced by the third parties and ISED are that disclosure of these Total Repayments figures could enable competitors to derive sensitive information relating to the third parties, which would in turn create a risk of harm well beyond the merely possible.  However, neither the third parties nor ISED demonstrated how, specifically, these derivations could be done (amidst various factors casting doubt on this possibility) and how such derivations could create an adequate risk of harm.

[39] In addition, some third parties advanced submissions relating to the public potentially misunderstanding the Total Repayments figures. However, I am not convinced that these submissions, which are speculative, meet the test for the paragraph 20(1)(c) exemption.

[40]    ISED made submissions on paragraph 20(1)(c) that are similar to some of the third parties’ submissions. More specifically, ISED stated that “releasing the repayment information would not only give a direct understanding of the project’s success or failure at a point in time, but also insight on the project’s gross revenue”. According to ISED this, in turn, could allow a competitor to deduce the performance of the project, gain an understanding of the value of the research and the technologies, and derive a competitive advantage from this information.

[41]    Having carefully considered the representations and evidence received from ISED and the third parties, no clear and direct connection between disclosure of the specific information at issue and a risk of harm well beyond the merely possible has been shown.

[42]    As stated in Bombardier Inc. v Canada (Attorney General), 2019 FC 207 at paragraph 100, “evidence that is vague or speculative in nature cannot be relied upon to justify an exemption under subsection 20(1)”. In that case, Bombardier failed to provide the court with sufficient evidence that its Total Repayment figures per project could be used to determine other information that would be harmful to its competitive position.

[43]    In the present instance, third parties and ISED have asserted that disclosure of the Total Repayments could lead to the derivation of other information relating to third parties, including information on the value of their research and development, which, in turn, could cause harm. However, neither the third parties nor ISED have demonstrated how the information alleged to be capable of being derived can in fact be discerned by the disclosure of the Total Repayments figures.

[44]    Even to the extent that Total Repayments figures might potentially provide some indication of the viability of projects, neither ISED nor the third parties demonstrated that the disclosure of these figures would create a risk of harm well beyond the merely possible. As with the Bombardier case, it has not been demonstrated that disclosure of the Total Repayment figures at issue would enable deductions of information that would meet the test for a risk of harm well beyond the merely possible.

[45]    To the extent that Total Repayments figures are based on gross revenues and sales, the specific formulas for determining the amount to be repaid based on these metrics are not necessarily known to the public, which renders potential links between particular repayment amounts and success or failure, or degrees thereof, more difficult. The formulas appear to have varied depending on project and third party; accordingly, it is not clear that a general benchmark of success versus failure is possible.

[46]    In addition, some repayment amounts may have been conditional, or may have included different terms than simply gross revenues or gross sales. Furthermore, the timelines for repayment appear to have varied across the various third parties, making it even more difficult to make accurate inferences from the Total Repayments figures at issue, as of 2018.

[47]    It is also apparent that metrics of gross revenues or sales are not necessarily determinative in reflecting a project’s success or lack thereof, as of a particular time. Revenues and sales can be delayed, for example, in order to favour further research and development for a project. Conversely, revenues and sales might be relatively higher at an earlier stage in the project but have negative implications for the long-term viability of the project.

[48]    Also, the representations of the third parties and ISED on this point do not appear to factor in any publicly known data in the relevant industries that might potentially reflect success or failure of different third parties or their projects. This further undermines the alleged clear and direct connection between disclosure of the Total Repayments figures and a risk of harm well beyond the merely possible.

[49]    The projects in question were long-term projects commenced at a particular point in time, in Canada – between 1996 and 2006. The viability or lack thereof of such projects at earlier times may not be as relevant, in Canada and abroad, more than a decade later. The projects that were not viable may have been abandoned early on, making the information relating to those projects significantly out of date and less likely to create the required level of risk of harm. The projects that were viable may have been viable years ago but this may no longer be the case. In addition, much of the research and technologies relevant to the projects in question would appear to have changed since the inception of the projects; this casts doubt on the value and materiality of any information that a competitor could derive about the relevant projects based on the Total Repayments figures as of 2018.

[50]    It is not clear how closely a competitor to the third parties in question could link specific projects to specific technologies and the value of research and development on such projects, so as to gain actionable information that could create a risk of harm well beyond the merely possible. While general information about the technologies and the value of research and development may be known, there would be additional information relevant to making such potential links, that would not be known to a competitor. For example, as noted above, certain projects may have only been viable at an earlier time, but may have lost viability afterwards. Such missing links are unaccounted for in the submissions of the third parties and of ISED.

[51]    I am not convinced of the third parties’ and ISED’s submissions that the criteria for paragraph 20(1)(c) are met because of the information that can allegedly be derived from the Total Repayments figures, leading to a risk of harm well beyond the merely possible. The required clear and direct connection has not been demonstrated.

[52]    While some third parties raise general issues of public misunderstanding leading to a risk of harm, I note that the Courts have been skeptical of arguments relating to public misunderstanding. This is so because such arguments could undermine the fundamental purpose of access to information legislation – which is to give the public access to information so that the public may evaluate the information, and not to protect the public from the information (see Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, para. 224).

[53]    In any event, I am not convinced that any potential misunderstanding cannot be addressed using explanatory notes (see Concord Premium Meats Ltd. v. Canada (Food Inspection Agency), 2020 FC 1166, paras. 74, 78, 81, 89, 93, 126).

[54]    In light of all of the above, I conclude that the Total Repaymentsfigures do not meet the test for exemption pursuant to paragraph 20(1)(c).

Paragraph 20(1)(d): Negotiations by a third party

[55]    Paragraph 20(1)(d) requires institutions to refuse to release information that, if disclosed, could reasonably be expected to interfere with the contractual or other negotiations of a third party (that is, a private company or individual, but not the person who made the access request).

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

• A third party is or will be conducting contractual or other negotiations.
• Disclosing the information could interfere with those negotiations.
• There is a reasonable expectation that this harm could occur—that is, the expectation is well beyond a mere possibility.

[57]    When these requirements are met, and the third party to whom the information relates consents to its disclosure, subsection 20(5) requires institutions to reasonably exercise their discretion to decide whether to release the information.

[58]    In addition, when the requirements are met, subsection 20(6) requires institutions to reasonably exercise their discretion to decide whether to release the information for public health or public safety reasons, or to protect the environment, when both of the following circumstances exist:

• disclosure of the information would be in the public interest; and
• the public interest in disclosure clearly outweighs any financial impact on the third party, any prejudice to the security of the third party’s structures, networks or systems, or competitive position, or any interference with its contractual or other negotiations.

[59]    However, subsections 20(2) and 20(4) specifically prohibit institutions from using paragraph 20(1)(d) to refuse to release information that contains the results of product or environmental testing carried out by or on behalf of a government institution, unless the testing was done for a fee for an individual or an organization other than a government institution.

Does the information meet the requirements of the exemption?

[60]    One of the third parties raised paragraph 20(1)(d) in its representations. However, ISED has indicated that, in its view, there is insufficient evidence to demonstrate a clear and direct connection between disclosure of the information at issue and interference with specific negotiations.

[61]    Interference, in the context of paragraph 20(1)(d), has been interpreted in the Courts as meaning “obstruction” – as indicated by the corresponding word for interference in the French version, “entraver”. (see Blood Band v. Canada (Minister of Indian Affairs and Northern Development), 2003 FC 1397, para. 49; Canada (Information Commissioner) v. Canada (Minister of External Affairs), [1990] 3 F.C. 665 (F.C.T.D.), paras. 24-25). I am not convinced that this requirement for the paragraph 20(1)(d) exemption, of a risk of harm well beyond the merely possible obstruction of the third party’s negotiations resulting from disclosure of its Total Repayments figure, is met.

[62]    I conclude that the Total Repayments figures do not meet the test for exemption pursuant to paragraph 20(1)(d), as insufficient representations have been provided to meet the test for exemption.

Result

[63]    The complaint is well founded.

Order

Under subsection 36.1(1) of the Act, I order the Minister of Innovation, Science and Industry to disclose all Total Repayments figures within the record for the 80 projects relating to the 21 third parties listed within the narrowed scope of the complaint, appearing within the record under the following Applicant Legal Names:

• Bell Helicopter Textron Canada Limited
• Bristol Aerospace Limited
• CAE Inc.
• Cascade Data Services Inc.
• CMC Electronics Inc.
• Com Dev Ltd.
• Fleet Industries Ltd.
• GE Water & Process Technologies Canada
• Haley Industries Limited
• Héroux-Devtek Inc.
• Honeywell Limited
• IBM Canada Ltd.
• ID Biomedical Corporation
• ID Biomedical Corporation of Quebec
• Iogen Corporation
• Iogen Energy Corporation
• MacDonald, Dettwiler and Associates Inc.
• Magellan Aerospace Limited
• MDA Corp.
• MDA Systems Ltd.
• Mitel Networks Corporation
• Navistar Canada, Inc.
• Orenda Recip Inc.
• Pratt & Whitney Canada Corporation
• Research In Motion Limited
• Safran Landing Systems Canada Inc.
• Sanofi Pasteur Limited
• Siemens Canada Limited
• Suncor Energy Inc.
• Vale Newfoundland & Labrador Limited
• World Heart Corporation

Disclose this information within 10 days after the day on which the order takes effect under paragraph 36.1(4)(b).

Please email a copy of the response letter to the Office of the Information Commissioner’s Registrar (Greffe-Registry@oic-ci.gc.ca).

Institutions must abide by the terms of subsection 37(4) when disclosing any records in response to my order.

On March 29, 2022, I issued my initial report to the Minister of Innovation, Science and Industry setting out my order.

On April 29, 2022, the Corporate Secretary gave me notice that ISED would be implementing my order.

I have provided the following third parties with this report:

• Bell Helicopter Textron Canada Limited
• BlackBerry Limited
• CAE Inc.
• Héroux-Devtek Inc.
• Iogen Energy Corporation / Iogen Corporation
• MDA Corporation
• Mitel Networks Corporation
• Navistar Canada, Inc.
• Pratt & Whitney Canada Corp.
• Safran Landing Systems Canada Inc.
• Sanofi Pasteur Limited
• Siemens Canada Limited
• Vale Canada

The third parties that chose not to make any representations to the OIC in respect to the complaint are not entitled to receive the report.

Section 41 of the Act provides a right to any person who receives this report to apply to the Federal Court for a review. Complainants and institutions 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.