Section 20(1)(c) and (d): Information that could impact third party financial matters or negotiations

Preliminary Matters

The Access to Information Act, R.S.C. 1985, c. A-1, (the Act) gives any Canadian citizens or permanent resident within the meaning of the Immigration Act and any individual or any corporation present in Canada a right (of access) to most records under the control of the federal government. More specifically, the Act provides for access to all information in records controlled by government institutions listed in Schedule I of the Act unless there is a specific provision in the Act that permits or requires the head of the government institution to refuse to disclose the information, or unless the records (or part thereof) are excluded under section 68 or 69.

Paragraphs 20(1)(c) & (d) are mandatory injury exemptions. The consequence is that once the Head determines that disclosure of a record or part thereof would give rise to the prejudice enunciated in one of these exemptions, he/she must then refuse to grant access to the requested information unless either of the exceptions in 20(2), (5) or (6) applies. The exemption process under paragraphs 20(1)(c) & (d) is not completed until this determination is made.

The Test

Criteria for application

In the case of paragraph 20(1)(c) there are two alternative tests. If either apply, the relevant information must be exempted from disclosure that is:

• Where the disclosure of the information could reasonably be expected to result in material financial loss or gain to a third party; or
• Where the disclosure of the information could reasonably be expected to prejudice the competitive position of a third party.

In the case of paragraph 20(1)(d) there is only one test. The information must be such that its disclosure could reasonably be expected to interfere with contractual or other negotiations of a third party.

Case Law

1) Where disclosure could reasonably be expected to:

In Air Atonabee v. Canada (Minister of Transport) (1989), 27 F.T.R. 194 (T.D.), the Court held that the test is whether, assuming use of the information, its disclosure would give rise to a reasonable expectation of probable harm. The burden of proof is on the party resisting disclosure1, and that to satisfy the requirement of this exemption, there must be evidence as to the way in which the information will cause harm and the degree of harm it will cause.2

The evidence of harm must be detailed, convincing and describe a direct causation between disclosure and harm. However, one must clearly distinguish between 'direct causation' and 'direct causality' the former being the test to be applied under injury exemptions and the latter being explicitly rejected by the Court of Appeal in Canada Packers Inc. v. Minister of Agriculture et al. (1988), [1989] 1 F.C. 47 (C.A.). 'Direct causation' requires a direct causal link - the person resisting disclosure must bring specific evidence which would show that there is a link arising from the disclosure which would result in the harm. To put it another way, there must be some logical explanation to show why disclosure could lead to a particular identifiable harm. However, the person resisting disclosure does not have to prove a 'direct causality' (i.e., that the disclosure of the requested information would, by itself, causes the specific harm). In other words, it is not necessary to prove that disclosure could result directly in producing the specific harm.

In Information Commissioner v. Immigration and Refugee Board (1997), 140 F.T.R. 140 the Federal Court Trial Division characterized the injury test in paragraph 16(1)(c) of the Act as a "confident belief", as follows:

The reasonable expectation of probable harm implies a confident belief. There must be a clear and direct link between the disclosure of specific information and the harm alleged. The Court must be given an explanation as to how or why the harm alleged would result from the disclosure of specific information. The more specific and substantiated the evidence, the stronger the case for confidentiality. It cannot refer to future investigations generally:

Where the harm foreseen by release of the records sought is one about which there can only be mere speculation or mere possibility of harm, the standard is not met. It must have an impact on a particular investigation, where it has been undertaken or is about to be undertaken. One cannot refuse to disclose information under paragraph 16(1)(c) of the Access to Information Act or paragraph 22(1)(b) of the Privacy Act on the basis that to disclose would have a chilling effect on possible future investigation. (at paras. 40-45).

A high standard of proof is necessary to establish an exemption from disclosure on grounds of financial harm or contract interference.3 To prove harm, one must be able to trace, track, illustrate, and show how disclosure of specific information could lead to the harm alleged.

Under the Act, the test is one of reasonably expected financial or competitive harm, regardless of whether the information disclosed is confidential per se (i.e., inherently). However, if the information is, in fact, confidential - this could increase the likelihood that it might be able to meet the test. The standard of proof for substantial competitive harm is evidence of substantial injury. Evidence that harm might result is pure speculation and is not good enough. The expectation of harm must be likely, but it need not be a certainty.4

Description of possible harm, even in substantial detail, is often insufficient in itself. At a minimum, there must be a clear linkage between the disclosure of specific information and the harm alleged. We must be given an explanation of how and why the harm alleged would result from disclosure of specific information. However, if it is self-evident that as a result of disclosure of the record:

• harm will be done;
• how (and when) it will be done; and
• why it will be done, little explanation need to be given.5

What you want is a clear, logical believable explanation of the harm that could be expected if the information is disclosed and the connection between the disclosure and the harm - i.e., the logical link.

Where inferences must be drawn, or the answers to these questions are not clear, then further explanation would be required. The more specific and substantiated the evidence, the stronger the case for the exemption. The more general the evidence or the less plausible (believable) the result, the more difficult it would be to be satisfied as to the linkage between disclosure of particular documents and the harm alleged - i.e., the more difficult it will be to conclude that the test has been met.

The context surrounding the disclosure of the information is also relevant. The jurisprudence has established certain specific conditions that could be taken into consideration when determining whether a reasonable expectation of harm would result from disclosure:

• Use of the information: You must assume that the information would be used in assessing whether its disclosure would give rise to a reasonable expectation of harm. 6 For example, what use would likely be made of the information by a competitor is a relevant factor to be considered. In what way would this use likely lead to harm? For example, what use would likely be made by the requestor? These are relevant factors in determining how use could lead to the specific harm.
• Availability of the information: It is relevant to consider if the information sought to be kept confidential is already available from sources otherwise available to the public, and whether it could be obtained by observation or independent study by a member of the public acting on their own.7 For example, where the information requested is already available elsewhere to the public, there may be need for exemption under this exemption.8 The party (i.e., even if it's us) alleging that the information is publicly available has the burden of proof. Not only must the party prove that the withheld information is otherwise publicly available but, if it is government information, that the information was released from an official source. 9
• Press coverage: Press coverage of a confidential record is relevant to the issue of expectation of probable harm from its disclosure. 10 When the same or similar information has already been disclosed and received press coverage, no additional harm could be expected from the release of the requested information. Note, however, that a third party cannot claim that media would misinterpret the requested information and would cause prejudice to the third party. This argument has been found purely speculative.11
• Time: Evidence of the period of time between the date of the confidential record and its disclosure is relevant.12 In some cases, the older the record, the less likely an injury could occur.
• Other relevant documents: Each document must be considered on its own merit and in the context of all the documents requested for release since the total contents of the release may have a considerable bearing on the reasonable consequences of its disclosure.13 On the other hand, a single record may cause harm when disclosed but disclosure may result in no harm when disclosed in full context or with an explanation.

It is the probable consequences of disclosure which are most significant in determining whether a document or a portion thereof may be exempted under this section, not the nature of the document or the nature of the information contained in the document.

General:

Occam Marine Technologies Ltd. v. Canada (National Research Council) (1998), 155 F.T.R. 117 (F.C.T.D.)

• The Court held that the general financial success or lack of it, of any third party is not relevant to the assessment of whether paragraph 20(1)(c) applies.

Swagger Construction Ltd. v. Canada (Minister of Public Works and Government Services) (1996) 112 F.T.R. 152

• Swagger Construction Ltd. was awarded a contract to construct a land border facility at Huntingdon, British Columbia. The department of Public Works and Government Services later received a request to release records relating to the project. Swagger Construction took the position that the disclosure of the information would result in a loss, prejudice or interference as per paragraphs 20(1)(c) and (d) of the Act. The Court concluded that in light of all the evidence and given the fact that the contract had been completed, the information could not give rise to a reasonable probability of material financial loss to Swagger Construction, or of prejudice to its competitive position or of interference with its contractual or other negotiations. The alleged misrepresentation and use of any of the information to the detriment of Swagger Construction did not constitute more than mere possibility or speculation, which did not meet the test established by the Federal Court of Appeal in Canada Packers Inc. and St. John Shipbuilding Ltd. The application was therefore dismissed and the records were disclosed

2) Material financial loss or gain to:

Not every financial loss is covered by this exemption, only those that are 'material'. The word 'material' is not defined in the Access to Information Act. However, since we are dealing with an exemption, it is to be narrowly constructed and the exceptions to the right of access must be limited and specific, the word 'material' has the meaning of 'substantial' or 'important'. Therefore, in order to be exempted under paragraph 20(1)(c), disclosure of the information must produce a substantial prejudice or gain to a third party (i.e., this is any third party and not only the third party to whom the information refers) that can be translated into monetary value. The substantial prejudice must be assessed in relation to the specific third party to which it refers - i.e., what is material to one third party might not be material to another third party and vice versa.

In Bitove Corp. v. Canada (Minister of Transport) (1996), 119 F.T.R. 278, Bitove Corp. asked for a review of a decision of the department of Transport to release certain records which had been requested by a competitor of Bitove Corp. The question was whether the information could not be disclosed pursuant to paragraphs 20(1)(b) and (c) of the Act. The Court was satisfied that all the information had been provided to the department in confidence and as a result of the contractual relations between Bitove Corp. and the department. The Court was further of the opinion that it was all information the nature of which would be of great assistance to Bitove Corp.'s competitors to determine precisely how and where the applicant negotiated its contractual arrangements with the respondent, how it conducts its affairs and how it directs its sales efforts. In these circumstances, the Court was of the view that the applicant had successfully discharged the burden of establishing that the records contained the kind of information described in paragraphs 20(1)(b) and (c) of the Act.

3) Prejudice to the competitive position of a third party:

The Federal Court of Canada interpreted this part of the test in such a way that in order to be covered by this exemption; the third party must have a defined market or business which would be adversely affected by the disclosure14. However, this injury does not have to be translatable into monetary value. Unlike the other test under this exemption, the prejudice is not qualified -i.e., the Act does not say materially prejudice. Therefore, the only requirement is that the disclosure of the requested information would likely cause harm to the competitive position of a third party.

There could be some situations where, for example, it is possible to perceive a prejudice but it is not possible to translate it into monetary value. (E.g. the expertise of the employees of a third party, the quality of products/services used, etc.). Such information is also covered by 20(1)(c).

The prejudice under this exemption could apply to any third party, not just the third party that supplied the information.

In Culver v. Canada (Minister of Public Works and Government Services), (F.C.T.D., October 27, 1999, unreported), the Federal Court Trial Division accepted evidence that disclosure of contract prices would allow competitors to work backwards and discover other confidential information about the third party and to develop pricing strategies to undercut the third party. The Court found that the information should thereby be exempt under paragraph 20(1)(c) on the basis that disclosure could reasonably be expected to prejudice the competitive position of the third party.

4) Interference with contractual or other negotiations:

Paragraph 20(1)(d) also applies when any third party could reasonably be expected to be prejudiced by the disclosure. This exemption must be distinguished from the prejudice to the competitive position dealt with in paragraph 20(1)(c). As such, the Federal Court in Société Gamma Inc. v. Canada (Department of the Secretary of State), (April 27, 1994), T-1587-93, T-1588-93 (F.C.T.D.), interpreted this provision as requiring that "it must refer to an obstruction to those negotiations and not merely the heightening of competition for the third party which might flow from disclosure".15

 

Table of Authorities

Air Atonabee v. Canada (Minister of Transport) (1989), 27 F.T.R. 194 (T.D.).

Bitove Corp. v. Canada (Minister of Transport) (1996), 119 F.T.R

Canada Packers Inc. v. Minister of Agriculture et al., [1989] 1 F.C. 47 (C.A.).

Information Commissioner of Canada v. Prime Minister of Canada, [1993] 1 F.C. 427 (T.D.).

Matol Botanique International Inc. v. Canada (Department of National Health and Welfare) (June 3, 1994), T-2916-90 (F.C.T.D.).

Merck Frosst Canada Inc. v. Minister of Health & Welfare, (1988), 20 F.T.R. 73 (T.D.).

Northern Cruiser Company Limited v. R (September 12, 1991) No.T-109-90 (F.C.T.D.), confirmed by F.C.A. (August 28, 1995), A-1039-91.

Ottawa Football Club v. Minister of Fitness and Amateur Sports, [1989] 2 F.C. 480, 24 F.T.R. 62, 23 C.P.R. (3d) 297 (F.C.T.D.).

Piller Sausages and Delicatessens Limited v. Minister of Agriculture at al. (1987), 14 F.T.R. 118 (T.D.).

Société Gamma Inc. v. Canada (Department of the Secretary of State), (April 27, 1994), T-587-93, T-1588-93 (F.C.T.D.).

Sutherland v. Canada (Minister of Indian and Northern Affairs et al., (May 6, 1994), T-2573-93 (F.C.T.D.).

Swagger Construction Ltd. v. Canada (Minister of Public Works and Government Services) (1996) 112 F.T.R.

Endnotes

1. Northern Cruiser Company Limited v. R (September 12, 1991) No.T-109-90 (F.C.T.D.), confirmed by F.C.A. (August 28, 1995), A-1039-91.

2. Merck Frosst Canada Inc. v. Minister of Health & Welfare, (1988), 20 F.T.R. 73 (T.D.); Information Commissioner of Canada v. Prime Minister of Canada, [1993] 1 F.C. 427 (T.D.)

3. Piller Sausages and Delicatessens Limited v. Minister of Agriculture at al. (1987), 14 F.T.R. 118 (T.D.).

4. Ibid.

5. Information Commissioner of Canada v. Prime Minister [1993] 1 F.C. 427 (T.D.).

6. Air Atonabee Ltd. v. Minister of Transport, (1989), 27 F.T.R. 194 at 216.

7. Ibid.

8. State v. City of Cleveland, Civil No. 59571 (Ohio App. Aug. 27, 1992): Paragraph 149.43(a)(2)(d) of the Ohio Public Records Act exempts information which would endanger the life or physical safety of law enforcement personnel, a crime victim, a witness or a confidential information source. The respondents claimed this exemption for records relating to the identity of police informants. The court recognized that incarcerated informants incur a high degree of risk to their physical safety after providing information to the police. However, if an informant discloses his identity by testifying at trial, then it is doubtful that redacting the records relating to that informant will enhance his security.

9. Fisher v. United States DOJ, 772 F. Supp. 7 (D.C. Col. August 15, 1991): In this case, the plaintiff's primary complaint was that much of the requested information allegedly had been released to the news media, and he contends that he is therefore entitled to this information. However, the plaintiff failed to provide evidence that the media coverage was the result of a release of the requested information by the government to the press. Nor did the plaintiff demonstrate that any of the withheld information has been the subject of publicity so widespread as to warrant disclosure under the FOIA. See Founding Church of Scientology, Inc. v. NSA, 197 App. D.C. 305, 610 F.2d 824, 831-32 (D.C. Cir. 1979). Moreover, the Court found that even assuming that some of the withheld information has appeared in the press, the nondisclosure was not proper because a disclosure from an official source of information previously released by an unofficial source would confirm the unofficial information and therefore cause harm to third parties. See Simmons v. Dep't of Justice, 796 F.2d 709, 712 (4th Cir. 1986) ("release from an official source naturally confirms the accuracy of the previously leaked information"). Furthermore, public disclosure of some information does not necessitate the disclosure of additional information that is otherwise properly exempt from disclosure. Sirota v. CIA, 3 G.D.S. para. 83,261 (S.D.N.Y. 1981) (citing Fensterwald v. CIA, 443 F. Supp. 667 (D.D.C. 1978).

The plaintiff also contended that during the sixteen-week trial in which he was a co-defendant, information withheld by the defendants was disclosed. However, the plaintiff failed to reference a single document withheld by the defendants in whole or in part which might fall within this category, and has not demonstrated that any of the withheld information has been so publicized as to warrant disclosure under the FOIA. See Founding Church of Scientology, 610 F.2d at 831-32.

10. See Canada Packers Inc. v. Minister of Agriculture, [1989] 1 F.C. 47 (C.A.) where the Court found that the evidence did not sustain the appellant's fear of unfair press coverage or its impact, rejecting evidence of previous press reports which related to products rather that on the condition of the plants which was the subject of the report at issue. See also Ottawa Football Club v. Minister of Fitness and Amateur Sports, [1989] 2 F.C. 480, 24 F.T.R. 62, 23 C.P.R. (3d) 297 (F.C.T.D.) where the Court found that since most of the information contained in the requested documents already made press coverage, no additional harm could be expected from the release of the requested information.

11. See Matol Botanique International Inc. v. Canada (Department of National Health and Welfare) (June 3, 1994), no T-2916-90 (F.C.T.D.) : While the Court found that sometimes the media is biased in the way it informs the public, it could not infer bad faith upon the media without any evidence to this effect.

12. Ottawa Football Club, supra, where the judge considered that the record was three years old when assessing the likelihood of harm resulting from disclosure.

13. Canada Packers Inc. v. Minister of Agriculture, [1989] 1 F.C. 47 (C.A.).

14. See Société Gamma Inc. v.Canada (Department of the Secretary of State),(April 27, 1994), T-1587-93, T-1588-93 (F.C.T.D.): "The applicant has not demonstrated to me that its success is so precariously dependent on the form of its proposals [i.e., the records at issue in this case] instead of on its competitive advantage based on its past record and future capacity"

25. To that effect, see also Canada Packers Inc. v. Minister of Agriculture et al. (1988), [1989] 1 F.C. 47 (C.A.):

"with respect to paragraph 20(1)(d), I accept the submission of the Information Commissioner that this paragraph is intended to catch contractual situations not covered by paragraph 20(1)(c) and hence can have no application to day-to-day sales such as are principally in question in the domestic meat industry. It may, however, have some relevance with respect to international sales..."