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Natural Resources Canada (Re), 2023 OIC 45

Date: 2023-10-16
OIC file number: 3218-01867
Institution file numbers: DC7040-18-017/JA

Summary

The complainant alleged that Natural Resources Canada (NRCan) had improperly withheld information under paragraph 20(1)(b) (confidential third-party financial, commercial, scientific or technical information) and 20(1)(c) (financial impact on a third party) of the Access to Information Act. This was in response to an access request for records related to a specific contract. The complaint falls within paragraph 30(1)(a) of the Act.

NRCan and the third party did not show that all of the requirements of paragraphs 20(1)(b) and 20(1)(c) were met for portions of the information.

The Information Commissioner recommended that NRCan disclose all information previously withheld under paragraphs 20(1)(b) and (c), other than a void cheque and the unit prices and quantities. NRCan did not inform the Commissioner, as required by subsection 37(1), whether they would implement the recommendation. Instead, they disclosed additional information to the complainant and provided a copy to the Office of the Information Commissioner. Upon review, the Information Commissioner noted that the additional disclosure did not include all of the information subject to her recommendation.

The complaint is well founded.

Complaint

[1]     The complainant alleged that Natural Resources Canada (NRCan) had improperly withheld information under subsection 16(2) (facilitating the commission of an offence), subsection 19(1) (personal information), paragraph 20(1)(b) (confidential third-party financial, commercial, scientific or technical information), paragraph 20(1)(c) (financial impact on a third party) and section 68(a) (material published or available for purchase) of the Access to Information Act. This was in response to an access request for records related to a specific contract. The allegation falls within paragraph 30(1)(a) of the Act.

[2]     During the course of the investigation, the Office of the Information Commissioner (OIC) confirmed that the scope of the allegation is limited to NRCan’s application of paragraphs 20(1)(b) and (c) to withhold the information at issue.

Investigation

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

[4]     During the investigation, the OIC sought representations from both Welund North America (Welund) and NRCan pursuant to section 35 of the Act. Welund did not respond to the OIC’s request however they did provide representations to NRCan, who shared them with the OIC. Before the issuance of this report, the OIC provided Welund with an opportunity to make representations with respect to my preliminary conclusions and analysis on NRCan’s application of exemptions to withhold the information at issue. No response was received.

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

[5]     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).

[6]     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.

[7]     When these requirements are met, and the third party to whom the information relates consents to its disclosure, institutions must then reasonably exercise their discretion to decide whether to release the information.

[8]     Institutions must also 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.

Does the information meet the requirements of the exemption?

[9]     Paragraph 20(1)(b) was applied concurrently with paragraph 20(1)(c) to withhold various information related to the contract between NRCan and Welund, including but not limited to Welund’s business number, information in the purchase order, a void cheque provided by Welund, unit prices and quantities for services and electronic file names.

[10]     Regarding the first criterion of the exemption, in the decision Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, the Supreme Court of Canada stated that that the terms “financial, commercial, scientific or technical” should be given their ordinary dictionary meanings.

[11]     I am satisfied that small portions of the information, such as the unit prices and a void cheque belonging to Welund, consist of financial information. That said, it is unclear how most of the rest of the information withheld fits within the categories of financial, commercial, scientific or technical information.

[12]     The records are related to Welund business, and were created in the context of a proceeding having financial or commercial implications. However, many of the records in question do not contain explicit financial or commercial information (see: Appleton & Associates v. Canada (Privy Council Office), 2007 FC 640, at para 26). Other than Welund’s assertion that the information is financial and technical, no representations have been provided to demonstrate how the information at issue falls within the ordinary dictionary meanings of these terms. As such, I am not convinced that the first criterion has been met for most of the withheld information.

[13]     Regarding the second criterion – confidentiality of the information withheld, Welund stated to NRCan that the information was provided with an expectation of confidentiality as it involves sensitive financial and technical details.

[14]     In order for information to be considered confidential, the information must:

  • not be available from sources otherwise accessible by the public;
  • originate and be communicated in a reasonable expectation of confidence that it will not be disclosed; and
  • be communicated, whether required by law or supplied gratuitously, in a relationship between government and the party supplying it that is either a fiduciary relationship or one that is not contrary to the public interest, and which relationship will be fostered for public benefit by a confidential communication. (see: Air Atonabee Ltd. v. Canada (Minister of Transport), [1989] F.C.J. No. 453).

[15]     I accept that some of the information protected in the documents is not accessible from sources available to the public. However, portions of the information appear to be publicly available, such as Welund’s services and business number.

[16]     Furthermore, other than the void cheque mentioned above, no representations were provided, other than Welund’s assertion, to demonstrate that all of this information was communicated in a reasonable expectation of confidence that it would not be disclosed. As found by the Federal Court, “[parties seeking government approvals, just as parties seeking government funds or contracts, cannot expect the same degree of confidentiality as a party who is assisting government” (Astrazeneca Canada Inc. v. Canada (Health), 2005 FC 189, para. 76, affirmed in 2006 FCA 241).

[17]     No information has been provided upon which I could conclude that most of the information was communicated within a relationship fostered for public benefit by confidentiality.

[18]     Consequently, I conclude that the information, other than the void cheque, does not meet the confidentiality test for the second criterion.

[19]     I accept that much of the information in question was supplied to NRCan by Welund. However, I note that any information created by NRCan and its representatives that does not reveal information supplied by Welund to NRCan does not meet this criterion.

[20]     As for the fourth criterion, I am not convinced that all of the redacted information has been consistently treated as confidential by Welund as no representations were provided to this effect.

[21]     In light of the above, I conclude that the information, other than the void cheque, does not meet the requirements of paragraph 20(1)(b).

[22]     Since this information does not meet the requirements of this exemption, I also examined whether NRCan had properly applied paragraph 20(1)(c) to the information that was concurrently withheld.

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

[23]     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.

[24]     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.

[25]     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.

[26]     When these requirements are met, and the third party to whom the information relates consents to its disclosure, institutions must then reasonably exercise their discretion to decide whether to release the information.

[27]     Institutions must also 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.

Does the information meet the requirements of the exemption?

[28]     With the exception of Welund’s business number, NRCan has relied on paragraph 20(1)(c) to withhold the same information exempted under paragraph 20(1)(b).

[29]     Welund stated to NRCan that the disclosure of the information at issue could have severe repercussions, jeopardizing not only the current proposal but also any future negotiations or business opportunities. Welund maintained that the records provide details of their methodology, services, cost and strategies in writing a successful bid. Finally, Welund stated that the documents contain information that can offer a competitive advantage by revealing innovative ideas, best practices, or proven methodologies used to prepare a successful bid.

[30]     The case law pertaining to the Act makes it clear that a party resisting disclosure based on paragraph 20(1)(c) bears the onus of establishing that there is a reasonable expectation of a probable harm described in paragraph 20(1)(c) occurring if the information were disclosed (see Merck Frosst v. Canada (Minister of Health), 2012 SCC 3, para. 92; Canada Packers Inc. v. Canada [Minister of Agriculture], 1989 1 FC 47 [CA] at para 22). There must be a clear and direct connection between disclosure of the information at issue, and a risk of harm well beyond the merely possible (Merck Frosst, paras 197, 206).

[31]     The onus of establishing that information meets the criteria for paragraph 20(1)(c) to apply includes an evidentiary burden that cannot be satisfied by mere affirmations that disclosure would probably or undoubtedly give rise to the alleged harm. Evidence that is vague or speculative is insufficient to establish a reasonable expectation of probable harm (Wyeth-Ayerst Canada Inc. v. Canada (Attorney General), 2005 FCA 257, para. 20).

[32]     I accept that disclosure of Welund’s unit prices and quantities, for example on pages 325 and 346 of the records at issue, could reasonably be expected to injure its competitive position.

[33]     I am not convinced, however, that disclosure of the remaining information withheld such as forms supplied by the Government of Canada and a description of Welund’s services/software for example, establishes a risk of harm well beyond the merely possible (Merck Frosst, paras 197, 206).

[34]     Additionally, as noted above, information about Welund’s services is publicly available.

[35]     Finally, there is information in the records that was withheld on some pages but disclosed on others.

[36]     I therefore conclude that the information at issue, other than the unit prices and quantities, does not qualify for exemption under paragraph 20(1)(c).

Result

[37]     The complaint is well founded.

Recommendation

I recommend that the Minister of Natural Resources disclose all of the information previously withheld under paragraphs 20(1)(b) and 20(1)(c), other than the void cheque at page 366 and the unit prices and quantities.

On August 17, 2023, I issued my initial report to the Minister of Natural Resources setting out my recommendation. The Minister did not inform me, as required by subsection 37(1), whether they would implement my recommendation. Rather, on October 3, 2023, NRCan disclosed additional information to the complainant, and subsequently provided a copy of this release package to my office. Upon review of the release package, I noted that the additional disclosure does not include all of the information subject to my recommendation.

I have provided Welund North America 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 has the right to apply to the Federal Court for a review. The complainant 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.

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