Transport Canada (Re), 2022 OIC 63

Date: 2022-12-01
OIC file number: 5819-03837
Institution file number: A-2019-00078/JAB

Summary

The complainant alleged that Transport Canada had improperly withheld information under subsection 19(1) (personal information) and paragraphs 20(1)(a) (third-party trade secrets), 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 specific types of records related to a Boeing 737 MAX aircraft system (Maneuvering Characteristics Augmentation System (MCAS)). The complaint falls within paragraph 30(1)(a) of the Act.

Personal information withheld under subsection 19(1) was removed from the scope of the complaint.

Transport Canada withheld the responsive records in full under paragraphs 20(1)(a), (b) and (c) concurrently.

The institution and third party did not demonstrate that the requirements of paragraph 20(1)(a) were met, that all of the information is confidential financial, commercial, scientific or technical information meeting the requirements of paragraph 20(1)(b) or that general and innocuous information met the requirements of paragraph 20(1)(c).

The Information Commissioner ordered that Transport Canada disclose specific information at issue and re-exercise discretion under subsection 20(6).

Transport Canada gave notice that it would disclose specific pages in accordance with the order.

The complaint is well founded.

Complaint

[1]      The complainant alleged that Transport Canada had improperly withheld information under subsection 19(1) (personal information) and paragraphs 20(1)(a) (third-party trade secrets), 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 specific types of records related to a Boeing 737 MAX aircraft system (Maneuvering Characteristics Augmentation System (MCAS)). 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 the application of subsection 19(1) to 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]      The OIC sought representations from the third party, The Boeing Company (Boeing), pursuant to paragraph 35(2)(c) of the Act as well as from Transport Canada pursuant to paragraph 35(2)(b). Although Boeing maintained that paragraphs 20(1)(a), (b) and (c) apply to the entirety of the records, Boeing provided consent to disclose certain parts of the records.

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, subsection 20(5) requires institutions to reasonably exercise their discretion to decide whether to release the information.

[8]      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.

[9]      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?

[10]    Transport Canada withheld the entirety of the responsive records under paragraph 20(1)(b), concurrently with paragraphs 20(1)(a) and 20(1)(c).

[11]    The OIC noted that Boeing stated in its submissions to Transport Canada that the documents contain highly sensitive information regarding aircraft systems on the 737 MAX.

[12]    I accept that the records contain a significant amount of technical information, but I am not convinced that all of the information within the records is financial, commercial, scientific or technical in nature. For example, cover pages, acknowledgments, page numbering and generic headings/titles did not appear to fall within the common definitions of these terms, as they contain more general information. As per the findings of the Supreme Court of Canada in Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3 (paras. 141-142), parts of technical records can indeed be found not to meet the requirement of being technical. I am not satisfied by Transport Canada’s argument that all information within these documents is commercial or technical in nature simply by virtue of forming part of a document that is largely technical and that is necessary for Boeing’s commercial success.

[13]    According to the Federal Court (Air Atonabee Ltd. v. Canada (Minister of Transport) (1989), 27 C.P.R (3d) 180 (Fed T.D) at 197)), exemption from disclosure pursuant to paragraph 20(1)(b) requires that the redacted information meet each of the following criteria for confidentiality:

[14]    I note that portions of the records at issue are publicly available in at least one other jurisdiction. I am unable, therefore, to conclude that the publicly available information detailed in my initial report to Transport Canada meets the first criterion of confidentiality.

[15]    Secondly, while I accept that much of the information at issue meets the second criterion of confidentiality, this is not the case for all of the information at issue.

[16]    As found by the Federal Court in AstraZeneca Canada Inc. v. Canada (Health), 2005 FC 189 (aff’d in 2006 FCA 241): “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. This is particularly the case where the approvals relate to people’s health and physical well-being.”

[17]    Transport Canada has provided evidence to support an expectation of confidentiality between itself and the manufacturers it regulates.

[18]    However, I am not convinced that information that is widely known, such as general industry-related information, i.e. acronyms and external references, or general information, meets the requirement of confidentiality. Neither Transport Canada nor Boeing provided adequate representations to meet their burden and convince otherwise.

[19]    While I accept that the third criterion of confidentiality is met for much of the records, I am not convinced that it is met for all of the information at issue. Public, rather than confidential, communication of this information would foster the regulatory relationship between Boeing and Transport Canada for public benefit.

[20]    I accept that the records in question were supplied to Transport Canada by Boeing via the United States Federal Aviation Administration (FAA) (Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, paras. 156-159), and that Boeing has consistently treated the records as confidential, so as to meet the third and fourth criteria for exemption pursuant to paragraph 20(1)(b).

[21]    I conclude that not all of the withheld information meets the requirements of paragraph 20(1)(b). Boeing and Transport Canada have not demonstrated that certain information is confidential financial, commercial, scientific or technical information, as detailed in my initial report to Transport Canada.

Paragraph 20(1)(a): third-party trade secrets

[22]    Paragraph 20(1)(a) requires institutions to refuse to release trade secrets that belong to a third party (that is, a private company or individual, but not the person who made the access request).

[23]    To claim this exemption, institutions must show that the information is a trade secret—that is, a plan or process, tool, mechanism or compound that possesses all four of the following characteristics:

• The information is secret—that is, only one or a relatively small number of people know it.
• The third party intended to treat the information as secret.
• The information has industrial or commercial application.
• The third party has an interest worthy of legal protection (that is, an economic interest).

[24]    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.

[25]    However, subsections 20(2) and 20(4) specifically prohibit institutions from using paragraph 20(1)(a) 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?

[26]    Transport Canada withheld the entirety of the responsive records under paragraph 20(1)(a), concurrently with paragraphs 20(1)(b) and 20(1)(c).

[27]    Boeing stated in its submissions to Transport Canada that the documents contain highly sensitive information regarding aircraft systems on the 737 MAX in relation with the certification.

[28]    The Supreme Court in Merck Frosst v. Canada (Minister of Health), 2012 SCC 3, at para. 109, defined the characteristics of a trade secret as a plan or process, tool, mechanism or compound that possesses all four of the following characteristics:

• the information must be secret in an absolute or relative sense (i.e. known only by one or a relatively small number of persons);
• the possessor of the information must demonstrate that he has acted with the intention to treat the information as secret;
• the information must be capable of industrial or commercial application;
• the possessor must have an interest (e.g. an economic interest) worthy of legal protection.

[29]    While I was open to the possibility that the records could contain some trade secrets, I am not convinced that the records in their entirety could qualify as trade secrets.

[30]    To qualify as trade secrets, the information must constitute plans or processes, tools, mechanisms or compounds. The OIC questioned whether this was truly the case, as well as how all of this information is capable of industrial or commercial application, and how Boeing possesses an interest in all of this information (much of which relates to regulatory compliance) that is worthy of legal protection. Although Boeing indicated that the records may contain certain details of certain processes or plans, Boeing did not demonstrate how the records as a whole met this requirement. The OIC sought representations from Transport Canada on the above-mentioned points, including representations on what specific information in the records at issue constitute trade secrets (see Canada (Transport) v. Air Transat A.T. Inc., 2019 FCA 286, paras. 63-66; see also: Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, paras. 120-126).

[31]    Transport Canada conceded that upon re-examination of the records, it would no longer rely on paragraph 20(1)(a) to withhold any portion of the records. As such, Transport Canada provided no representations supporting Boeing’s claim that the requirements of paragraph 20(1)(a) are met.

[32]    I conclude that the information does not meet the requirements of paragraph 20(1)(a).

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

[33]    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.

[34]    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.

[35]    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.

[36]    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.

[37]    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.

[38]    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?

[39]    Transport Canada withheld the entirety of the responsive records under paragraph 20(1)(c), concurrently with paragraphs 20(1)(a) and 20(1)(b).

[40]    I am not convinced that all of the information in the records at issue meets the requirements for exemption pursuant to paragraph 20(1)(c). Specifically, I am not convinced that the information I have found does not meet the criteria for paragraph 20(1)(b), does meet the criteria for paragraph 20(1)(c). For the information that I do accept as meeting the criteria for paragraph 20(1)(b), however, I need not address the applicability of paragraph 20(1)(c).

[41]    I am not satisfied that Boeing and Transport Canada have met their burden with respect to demonstrating that disclosure of general and innocuous information, such as title pages and references, meets the requirements of the exemption. Rather, by consenting to disclosure of this type of information, Boeing calls into question whether there can really be a reasonable expectation of harm resulting from disclosure of this type of information. Although Boeing has argued that disclosure of references would reveal details of Boeing’s internal process for achieving certification, I am not satisfied that this is true of all information within the lists of references. Neither Transport Canada nor Boeing have demonstrated that document numbers and other information that does not reveal confidential commercial or technical information meet the requirements of the exemption.

[42]    Since a substantial amount of information related to the Boeing 737 MAX aircraft was made public in the wake of the Lion Air and Ethiopian Airlines crashes, this publicly available information must be considered in the context of the paragraph 20(1)(c) exemption (Bombardier Inc. v. Canada (Attorney General), 2019 FC 207, paras. 21, 125-126).

[43]    In light of the above, I am not convinced that there exists a clear and direct connection between disclosure of the aforementioned information at issue and a risk of harm well beyond the merely possible (Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, paras. 197, 206).

[44]    I conclude that certain information does not meet the requirements of paragraph 20(1)(c). Transport Canada and Boeing have not demonstrated that there is a reasonable expectation that disclosure of certain information would result in probable harm of the types described in paragraph 20(1)(c), as detailed in my initial report to Transport Canada.

Subsection 20(5): disclosure with consent

[45]    When the requirements for paragraphs 20(1)(a), (b) or (c) are met, and the third party to whom the information relates consents to the information’s disclosure, subsection 20(5) requires institutions to reasonably exercise their discretion to decide whether to release the information.

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

[46]    Boeing indicated that it consents to the disclosure of specific parts of the records, as detailed in its representations.

[47]    The OIC sought Transport Canada’s representations on whether it is now willing to exercise discretion under subsection 20(5) where Transport Canada maintains that the requirements for paragraphs 20(1)(a), (b) or (c) are met, but where Boeing has provided its consent to disclose this information.

[48]    Transport Canada indicated that in light of Boeing’s consent, it is now willing to disclose the specific parts of the records identified by Boeing.

Subsection 20(6): disclosure for public safety reasons

[49]    When the requirements for paragraphs 20(1)(b) or 20(1)(c) 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.

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

[50]    Following the Lion Air and Ethiopian Airlines crashes, public safety advocates have voiced significant interest in obtaining information related to the Boeing 737 MAX aircraft. Boeing was charged by the United States Department of Justice in relation to its MCAS system for its 737 MAX aircraft, which led to a deferred prosecution agreement in which Boeing agreed to pay over $2.5 billion: https://www.justice.gov/opa/press-release/file/1351336/download. The deferred prosecution agreement states that the MCAS system activated during both the Lion Air and Ethiopian Airlines crashes, and may have played a role in those crashes.

[51]    I recognize that Transport Canada could not have turned its mind to whether any of the circumstances described in subsection 20(6) existed when it responded to the access request, as discretion cannot be exercised where the requirements of paragraph 20(1)(a) are met, and Transport Canada had applied paragraph 20(1)(a) to the entirety of the records.

[52]    In light of the OIC’s preliminary view that the requirements of paragraph 20(1)(a) were not met with respect to all of the information in the records, the OIC sought Transport Canada’s representations on discretion under subsection 20(6) where Transport Canada concedes that the requirements of paragraph 20(1)(a) are not met, but where Transport Canada maintains that the requirements for paragraphs 20(1)(b) or (c) are met.

[53]    Having decided none of the records were exempt under paragraph 20(1)(a), Transport Canada did provide the OIC with representations on its subsequent exercise of discretion under subsection 20(6). Transport Canada indicated that the public interest was considered, but that it would not be in the public interest to disclose the information. Transport Canada stated that its “credibility with our international airworthiness authority partners and manufacturers” would be negatively impacted by disclosure, citing Air Atonabee (supra) at para 49 and Porter (supra) at para 68 in support of its position.

[54]    Transport Canada’s representations do not reflect any consideration of the Lion Air and Ethiopian Air crashes, and the resulting public interest in disclosure of the information at issue in this context. This is evidently an important factor relating to the exercise of discretion under subsection 20(6) that Transport Canada was required to meaningfully grapple with in order to reasonably exercise its discretion. (see Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, para. 128).

[55]    I conclude that Transport Canada did not consider all relevant factors when it decided not to disclose the information. Transport Canada’s cursory treatment of the public interest, without regard to the public interest as it relates to the Lion Air and Ethiopian Air crashes, does not reach the level of justification, in relation to the facts and the law, that is required for Transport Canada’s exercise of discretion to be reasonable. Consequently, the exercise of discretion by Transport Canada was not reasonable in my view.

Subsection 13(1): confidential information from government bodies

[56]    Subsection 13(1) requires institutions to refuse to release information obtained in confidence from certain government bodies.

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

• The information was obtained from one of the following government bodies:
  • a government of a foreign state or an institution of a foreign state;
  • an international organization of states or an institution of such an organization;
  • a provincial government or institution;
  • a municipal or regional government or institution; or
  • an aboriginal government or council listed in subsection 13(3).
• The information was obtained from the government body in confidence—that is, with the understanding that it would be treated as confidential.

[58]    When these requirements are met, institutions must then consider whether the following circumstances exist:

• The government body from which the information was obtained consents to its release.
• That body has already made the information public.

[59]    When one or both of these circumstances exist, subsection 13(2) requires institutions to reasonably exercise their discretion to decide whether to release the information.

Does the information meet the requirements of the exemption?

[60]    Boeing alleged in its representations that paragraph 13(1)(a) should have been applied to the records to protect information provided by the FAA. It claimed that the responsive records would have been provided to Transport Canada by the FAA, and that the agreement between the FAA and Transport Canada does not allow Transport Canada to disclose information supplied by the FAA without the consent of the FAA or the third party to whom the information relates. Transport Canada, in its representations, indicated that only the third party could provide consent to disclose the information and not the FAA. Transport Canada indicated in its representations that in its opinion the requirements of paragraph 13(1)(a) are not met.

[61]    Upon review of the same Implementation Procedures referenced by Boeing, I found that these procedures allow for disclosure of information provided by the FAA to Transport Canada, to the extent that no valid third-party exemption applies. There is therefore no indication that the FAA provides this type of information to Transport Canada in confidence as described in subsection 13(1), so as to meet the second requirement for that exemption.

[62]    In light of the above, I conclude that the information does not meet subsection 13(1).

Result

[63]    The complaint is well founded.

Order

Under subsection 36.1(1) of the Act, I order the Minister of Transport to:

1. Disclose specific information within the records where I have found the exemptions under section 20 do not apply, as detailed in my initial report.
2. Re-exercise of discretion under subsection 20(6) with consideration of all relevant factors, including the public interest in disclosure as it relates to the Lion Air and Ethiopian Air crashes.
3. Disclose this information within 10 days after the day on which the order takes effect under paragraph 36.1(4)(b).

Given that the information at issue relates to a third party, the Minister must abide by the terms of subsection 37(4) when disclosing any records in response to my order.

On October 14, 2022, I issued my initial report to the Minister of Transport setting out my order.

On November 28, 2022, the Deputy Minister of Transport gave me notice that Transport Canada would likely disclose in full pages 1, 25 to 29, 1804, 1826, 2223, 2224, 2227, 2231, 2243, 2382, 2386, 2394, 2456, 2481 and 2597. In addition, it would likely partially disclose information on pages 2 to 4, 44 to 47, 49 to 51, 1951, 1952, 2237, 2238, 2383, 2384, 2387, 2395, 2406, 2414, 2415, 2442, 2443, 2457, 2458, 2480, 2482, 2483, 2485, 2486, 2487, 2498 to 2516, 2524 to 2526, 2528, 2560 and 2598, applying exemptions per paragraphs 20(1)(b) and 20(1)(c) in alignment with the intended order.

I have provided Boeing 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.