T-895-88
Information Commissioner of Canada (Applicant)
v.
Minister of External Affairs and Third Party
(Respondents)
INDEXED AS: CANADA (INFORMATION COMMISSIONER) V.
CANADA (MINISTER OF EXTERNAL AFFAIRS) (T.D.)
Trial Division, Denault J.—Ottawa, March 21 and
July 5, 1990.
Access to information — Application to set aside refusal to
comply with Commissioner's recommendation to release infor
mation as to largest single annual import quota of foreign
cheese — Application denied — Information exempted under
Access to Information Act, s. 20(1)(b) and (c) — Four criteria
required by s. 20(1)(b) satisfied — Reasonable expectation of
probable harm established satisfying requirement for exemp
tion under s. 20(1)(c).
This was an application to review the Department's refusal to
comply with a request for information, specifically the amount
in kilograms of the largest single annual import quota of
foreign cheese allocated to a firm or individual in 1985. The
request was refused on the ground that the information, was
confidential financial or commercial information between the
Department and a third party exempted from disclosure under
Access to Information Act paragraph 20(1)(b), or information
the disclosure of which could prejudice the third party under
paragraph 20(1)(c). The import quotas on foreign cheese given
to Canadian firms have not been released by government in the
past. Such quotas are determined on the basis of the importer's
percentage of the cheese import business in 1973 and 1974. The
third party took the position that the information was also
exempted under paragraph 20(1)(d) as information the disclo
sure of which could reasonably be expected to interfere with its
contractual negotiations. The Commissioner maintained that
the exemption was not justified and recommended release of
the information. The issue was whether the information fell
within the statutory exemptions.
Held, the application should be denied.
The information was exempted from disclosure under para
graphs 20(1)(b) and (c). The four criteria that must be met for
information to be exempted under paragraph 20(1)(b) are that
it be: (1) financial, commercial, scientific or technical, (2)
confidential, (3) supplied to a government institution by a third
party, and (4) treated consistently in a confidential manner by
the third party.
(1) The quota figure is commercial information, in even the
strictest meaning of that term. The illicit offer received by the
third party for the sale or long-term rental of unused portions
of its quota support this finding.
(2) The information was confidential. Whether information
is confidential depends upon its content, purposes and the
circumstances in which it is communicated and compiled, i.e.
the information is not otherwise accessible by the public, it was
communicated in a reasonable expectation that it would not be
disclosed and in a relationship that is either fiduciary or not
contrary to the public interest. The quota amount was not
otherwise accessible to the public. Also, the information pro
vided to the Government upon which all initial and subsequent
quotas were established was communicated in a reasonable
expectation of confidence that it would not be disclosed. The
Commissioner's argument, that the public interest does not
require confidentiality in that the quota system itself provides
incentive for the third party to report its imports annually,
could not be accepted. The public interest in fostering confiden
tial relationships is merely an indicator, not a condition of
confidentiality and there is a public interest in maintaining the
confidentiality of this relationship. An undertaking had been
given that the information would be kept confidential. There is
a public interest in ensuring Government act in good faith
regarding confidential information that is received by it. The
Government may not always be bound by its undertaking to act
in confidence, but paragraph 20(1)(6) requires it to consider
itself bound by its undertakings to act confidentially in respect
of financial, commercial, scientific or technical information,
whenever the party to whom the undertaking was given has
consistently treated the information as confidential. This rule
holds true whether the undertaking was given before or after
the coming into force of the Access to Information Act. To hold
that undertakings of confidentiality are nullified by the Act
would be to give it a dogmatic interpretation rather than a
rational one—an intepretation which the law resists. Also,
similar relationships with other importers are being maintained
confidential, and in these circumstances disclosure of the infor
mation would amount to an unfair market intervention by
Government.
(3) The Commissioner argued that the information provided
in 1975 is not the information that is now being sought,
therefore the information is not information "supplied to a
government institution by a third party". The fact, however, is
that large quota holders have been able to retain their quotas
and shares of the market at a constant level since 1975 and
these quotas were based on confidential information of the
importers' imports in 1973 and 1974. Neither the information
originally received by the Government nor any of the quota
allocations subsequently deduced therefrom have ever been
communicated to the public. The third party's share of the total
quota has remained unchanged from 1975 and thus the disclo
sure of its quota allocation in any given year would be as
harmful as the release of its original or present allocation. The
information sought and the information provided in 1975 by
the third party is essentially the same, and the disclosure of
either would amount to a breach of paragraph 20(1)(b).
(4) The third party itself has consistently treated the infor
mation sought in a confidential manner. The affidavit evidence
was to the effect that all importers guard their quota allocation
figures jealously, this information being considered extremely
sensitive.
Under paragraph 20(1)(c) the party resisting disclosure is
required to adduce evidence of harm that could reasonably be
expected to be caused by disclosure. Given the nature of the
information sought, its potential uses and the great confidence
with which it had been guarded at all times, the respondents
had established a reasonable expectation of probable harm
regarding its disclosure. They adduced evidence establishing
the importance of keeping secret an importer's quota volume
from both customers and competitors. Knowledge of an import
er's quota is the only information lacking for competitors to
estimate profit levels, discern pricing strategies, market plans
and financial strength, making that information valuable com
mercial intelligence. The Commissioner's expert opinion evi
dence that as the request did not seek a breakdown of the
largest quota holder's allocation according to variety, country
of origin, and quality, nor the name of the holder, the informa
tion revealed would not contain anything new, was insufficient
to refute the respondent's evidence. The nature of the informa
tion is such that it can be of no use other than to the third
party's competitors, suppliers or customers.
An exemption under paragraph 20(1)(d) had not, however,
been established. Paragraph 20(1)(d) requires proof of a
reasonable expectation that actual contractual negotiations
other than the daily business operations of the third party will
be obstructed by disclosure. Evidence of the possible effect of
disclosure on international contracts generally and hypothetical
problems concerning foreign suppliers and local customers was
insufficient to establish a reasonable expectation that any par
ticular contract or negotiations would be obstructed by
disclosure.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Access to Information Act, S.C. 1980-81-82-83, c. 111,
Schedule I, ss. 2, 20, 42(1)(a).
CASES JUDICIALLY CONSIDERED
APPLIED:
Maislin Industries Limited v. Minister for Industry,
Trade and Commerce, [1984] 1 F.C. 939; (1984), 10
D.L.R. (4th) 417; 8 Admin. L.R. 305; 27 B.L.R. 84
(T.D.); Air Atonabee Ltd. v. Canada (Minister of Trans
port) (1989), 27 C.P.R. (3d) 180; 27 F.T.R. 194
(F.C.T.D.); Canada Packers Inc. v. Canada (Minister of
Agriculture), [1989] 1 F.C. 47; (1988), 53 D.L.R. (4th)
246; 32 Admin. L.R. 178; 26 C.P.R. (3d) 407; 87 N.R. 8
(C.A.); Saint John Shipbuilding Ltd. v. Canada (Minis-
ter of Supply and Services) (1990), 67 D.L.R. (4th) 315
(F.C.A.).
CONSIDERED:
National Parks and Conservation Ass'n. v. Morton,
498 F 2d 765 (C.A.D.C. 1974).
REFERRED TO:
Noel v. Great Lakes Pilotage Authority Ltd., [1988] 2
F.C. 77; (1987), 45 D.L.R. (4th) 127; 20 F.T.R. 257
(T.D.).
COUNSEL:
M. L. Phelan, Gregory 0. Somers and Paul
B. Tetro for applicant.
Bruce Russell for respondent Minister of
External Affairs.
Donald A. Kubesh for respondent third party.
SOLICITORS:
Osler, Hoskin & Harcourt, Ottawa, for
applicant.
Deputy Attorney General of Canada for
respondent Minister of External Affairs.
Stikeman, Elliott, Ottawa, for respondent
third party.
The following are the reasons for order ren
dered in English by
DENAULT J.: The applicant, the Information
Commissioner of Canada, is applying with the
consent of the complainant, the Honourable Allan
McKinnon, for a review of the respondent Depart
ment's refusal to comply with the complainant's
July 16, 1986 request for information. The infor
mation requested from the Department of Exter
nal Affairs was the amount, in kilograms, of the
largest single annual import quota of foreign
cheese allocated to a firm or individual in 1985.
The respondent Department refused the request
stating that the information was exempted from
disclosure by paragraphs 20(1)(b) and (c) of the
Access to Information Act, S.C. 1980-81-82-83, c.
111, Schedule I. The Department noted that on
two previous occasions it had refused disclosure of
similar information and that the Information
Commissioner had agreed that the information
was exempted under paragraphs 20(1)(b) and (c)
of the Act. It also noted that the same was true of
requests for information relating to the amount of
import quotas on chicken and turkey. The follow-
ing passage from the Department's letter of refusal
is most indicative of its reasons for refusal:
Similarly in an Access Request for "names of individuals and
companies, and their addresses, who were given permits to
import into Canada foreign cheese in excess of 25,000 kilo
grams, from January, 1985 to date", the Department concluded
that this specific information (notwithstanding the public avail
ability of the complete list of cheese import quota holders) was
exempt under Sections 20(1)(b) and (c). In this instance, (your
file 3100-0541) Mr. George Hamelin, in his capacity as Assist
ant Information Commissioner, concluded that he was "satis-
fied that the exempted information falls under 20(1)(b) and (c)
of the Act. In such circumstances, the exemption is mandatory
and consequently (he) propose(d) to dismiss (the) complaint as
not supportable."
The provisions relied on by the Department
protect third parties from the disclosure by govern
ment institutions of confidential information that
would be detrimental to their interests. In the
present case it was established that the amount of
import quotas on foreign cheese given to Canadian
firms have not been released by Government in the
past, and that they are determined on the basis of
individual importer's percentage of the cheese
import business in the years 1973 and 1974.
Import quotas were established in 1975, when the
total allocation of quota for cheese imports
amounted to 50 million pounds. This total was
divided amongst 198 importing firms and covered
some 200 varieties of cheese from 25 different
countries. Yearly changes since that time have
resulted in changes in the total amount imported,
in the number of importers, and in the number of
varieties imported. Under the quota system an
importer is required to import at least 95% of its
quota in any given year, in order to avoid a
reduction in his quota for the following year. The
fact that quotas have not always been met has
resulted in numerous reductions and has allowed
new importers to be apportioned a quota of their
own. As a result there are, currently some 250
importers. Nevertheless, some importers have been
able to meet their quotas year after year, and in
such cases the quota remains equal to the import
er's share of the market in 1973 and 1974, deter
mined in accordance with the information supplied
to the Government when the cheese quotas were
implemented. The only reduction that would have
occurred in such case was the 1979 reduction when
the government unilaterally reduced all quota allo
cations by 10%. In the present case the Depart
ment of External Affairs, whose Special Trade
Relations Bureau (STRB) administers the calcula
tion and allocation of quotas, has refused to dis
close the information sought on the grounds that it
is confidential information between itself and a
third party, and that it is commercial information
the disclosure of which would prejudice the third
party.
The Information Commissioner did not view the
Department's reasons for refusal as being justified
under the Act. Consequently it informed the third
party of its findings and advised it of its right to
make representations to the Information Commis
sioner regarding disclosure. The third party did so
and insisted that the information was exempted
pursuant to paragraph 20(1)(d) of the Act, as well
as paragraphs (b) and (c) as the Department had
suggested.
The Commissioner maintained however that the
exemption from disclosure was not justified. It was
therefore recommended that the information be
released by March 16, 1988. When this recom
mendation was not complied with, the Commis
sioner wrote to the complainant and obtained his
consent to seek judicial review, pursuant to para
graph 42(1)(a) of the Act, of the Department's
refusal to disclose the information.
The issue is a straightforward one of statutory
interpretation. Does the information requested fall
within the statutory exemptions in paragraphs
20(1)(b),(c) and (d) of the Act?
THE LAW
The relevant provisions of the Access to Infor
mation Act are the following:
2. (1) The purpose of this Act is to extend the present laws
of Canada to provide a right of access to information in records
under the control of a government institution in accordance
with the principles that government information should be
available to the public, that necessary exemptions to the right
of access should be limited and specific and that decisions on
the disclosure of government information should be reviewed
independently of government.
• • •
20. (1) Subject to this section, the head of a government
institution shall refuse to disclose any record requested under
this Act that contains
(a) trade secrets of a third party;
(b) financial, commercial, scientific or technical information
that is confidential information supplied to a government
institution by a third party and is treated consistently in a
confidential manner by the third party;
(c) information the disclosure of which could reasonably be
expected to result in material financial loss or gain to, or
could reasonably be expected to prejudice the competitive
position of, a third party; or
(d) information the disclosure of which could reasonably be
expected to interfere with contractual or other negotiations
of a third party.
• • •
(6) The head of a government institution may disclose any
record requested under this Act, or any part thereof, that
contains information described in paragraph (1)(b),(c) or (d) if
such disclosure would be in such the public interest as it relates
to public health, public safety or protection of the environment
and, if such public interest in disclosure clearly outweighs in
importance any financial loss or gain to, prejudice to the
competitive position of or interference with contractual or other
negotiations of a third party.
The Access to Information Act has been inter
preted in a purposive and liberal manner, and
courts are invariably guided by the purpose clause
in section 2. In Maislin Industries Limited v.
Minister for Industry, Trade and Commerce,
[1984] 1 F.C. 939 (T.D.) at page 943, Jerome
A.C.J. states:
... since the basic principle of these statutes is to codify the
right of public access to Government information two things
follow: first, that such public access ought not be frustrated by
the courts except upon the clearest grounds so that doubt ought
to be resolved in favour of disclosure; second, the burden of
persuasion must rest upon the party resisting disclosure wheth
er, as in this case, it is the private corporation or citizen, or in
other circumstances, the Government.
Thus in the present case both the respondent
Department and the third party bear the onus of
proving upon the clearest grounds that the infor
mation sought is exempted by paragraphs
20(1)(b), (c) or (d). I will address each of these
provisions in turn.
Paragraph 20(1)(b)
The proper approach to the interpretation of
paragraph 20(1)(b) was laid out in Air Atonabee
Ltd. v. Canada (Minister of Transport) (1989), 27
C.P.R. (3d) 180 (F.C.T.D.), at page 197, where
MacKay J. made the following comments:
The authorities relied upon by both counsel in relation to s.
20(1)(b), and others, have made clear that exemption from
disclosure under that paragraph requires that the information
in question meet all four of the following criteria, that it be:
(1) financial, commercial, scientific or technical information,
(2) confidential information,
(3) supplied to a government institution by a third party, and
(4) treated consistently in a confidential manner by the third
party.
MacKay J. then went on to consider in depth the
application of each of these requirements to the
case before him. In the course of his analysis he
made several comments which will provide a useful
guide whenever the interpretation of paragraph
20(1)(b) arises. Thus it was held that information
will be deemed to be financial, commercial, scien
tific or technical, when it relates to material that is
commonly referred to as such, in keeping with the
ordinary dictionary definition of those terms. In
this respect I have no hesitation in finding that the
amount of the import quota sought is commercial
information within the meaning of paragraph
20(1)(b). Moreover even if a more narrow mean
ing were ascribed to such terms, such as a require
ment that the information have an independent
market or cost value—a view explicitly rejected in
Air Atonabee—I am satisfied, on the affidavit
evidence of the third party that its quota figure
does have independent value, and is commercial
information in even the strictest meaning of that
term. The illicit offer received by the third party
for the sale or long-term rental of unused portions
of its quota are supportive of this finding.
As for the second criterion, the confidential
nature of the information, the Air Atonabee deci
sion contains a thorough review of the jurispru
dence on this issue and MacKay J. concludes, at
page 202, with the following comments:
This review leads me to consider the following as an elaboration
of the formulation by Jerome A.C.J., in Montana, supra [Mon-
tana Band of Indians v. Canada (Minister of Indian & North
ern Affairs), [1989] 1 F.C. 143] that whether information is
confidential will depend upon its content, its purposes and the
circumstances in which it is compiled and communicated,
namely:
(a) that the content of the record be such that the information
it contains is not available from sources otherwise accessible by
the public or that could not be obtained by observation or
independent study by a member of the public acting on his own,
(b) that the information originate and be communicated in a
reasonable expectation of confidence that it will not be dis
closed, and
(c) that the information 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
confidential communication.
In so far as these comments are not taken as
superadded conditions to the Act, I find them
instructive in determining whether the information
sought in the present case is, or is not confidential.
I am satisfied that the information sought is not
otherwise accessible by the public. I am also satis
fied that the market information on cheese imports
in 1973 and 1974 provided to the Government and
upon which all initial and subsequent quotas were
established was communicated in a reasonable
expectation of confidence that it would not be
disclosed. In fact neither of these points were
strongly contested by the Commissioner. The
Commissioner has however suggested that because
the information requested is submitted by the third
party in order to continue to receive an import
allocation quota, and because its submission is
thus of substantial financial benefit to the third
party, it is therefore not provided in a relationship
required by the public interest to be fostered by
preserving confidential lines of communication. In
other words since the quota system itself provides
incentive for the third party to report its imports
year after year, and to prove that its quota has
been met, there is no need for the Government to
preserve confidentiality; the Government need not
fear that the third party will be less candid or
forthcoming in the future merely because Govern
ment breached the confidentiality of the informa
tion originally provided to it, because the third
party's self-interest in maintaining its quota will
ensure its candour.
When seen in its true light, this portion of the
applicant's argument has very little to recommend
it. Indeed it lends support to those cases which
have rejected the American doctrine in National
Parks and Conservation Ass'n. v. Morton, 498 F
2d. 765 (C.A.D.C. 1974) [at page 770] that com
mercial or financial information is confidential if
its disclosure would "(1) . . . impair the Govern
ment's ability to obtain necessary information in
the future; or (2) . . . cause substantial harm to the
competitive position of the person from whom the
information was obtained." (Air Atonabee Ltd. v.
Canada (Minister of Transport) (1989), 27 C.P.R.
(3d) 180 (F.C.T.D.), at pages 199-200; Noel v.
Great Lakes Pilotage Authority Ltd., [1988] 2
F.C. 77 (T.D.).) What the Commissioner has
failed to appreciate is that the public interest in
fostering confidential communication is merely an
indicia of the confidential nature of the informa
tion and not a condition. The American approach
has the advantage of clearly recognizing that con
fidentiality is a shared responsibility between
informer and informant and that as such each side
may have legitimate interests in preserving confi
dentiality. According to that theory it is sufficient,
to demonstrate that confidentiality exists, to estab
lish that the interests of either party require as
much. I would agree that a determination of confi
dentiality is not made less objective by the fact
that only one side has an interest in maintaining
confidentiality. What must be objectively deter
mined is whether the information was obtained in
exchange for the explicit or implicit promise that it
would be treated confidentially. All that the third
indicia of confidentiality outlined by MacKay J.
allows for is the possibility that the government's
need, or the public interest as he puts it, to main
tain confidentiality may be legitimately considered
as a factor in determining whether a given piece of
information is of a confidential nature. As long as
this criteria is used as an indicator and not a
condition of confidentiality there is no danger in
retaining it as a factor to be considered.
In any event the public interest may indeed
require, in the present case, that the relationship of
confidentiality be fostered; while the obtention of
necessary information in the future may not
depend on good relations between government and
importers, there is nonetheless a public interest in
maintaining good relations per se with law abiding
persons. There is a public interest in ensuring that
Government act in good faith regarding confiden
tial information that is received by it. The Infor
mation Commissioner would have Government
say: "As we have established a quota system based
on information which you have provided to us in
confidence, and as this system itself ensures your
continued cooperation, through economic incentive
and the strong arm of the law, we may breach the
confidence you have reposed in us without any fear
of reprisal; hence we are justified in doing so and
mandated to do so by the Access to Information
Act." I do not think the Act requires anything of
the kind. I find that given the Government's duty
to act in good faith, there is a public interest in
fostering the confidential nature of its relationship
with the third party. This is not to say that Gov
ernment will always be bound by its undertaking
to act in confidence, the Act expressly provides
exceptions to this rule in subsection 20(6), but I
am satisfied that paragraph 20(1)(b) does require
that the Government consider itself bound by its
undertakings to act confidentially, in respect of
financial, commercial, scientific or technical infor
mation, whenever the third party to whom the
undertaking was given has consistently treated the
information as confidential. This rule holds true
whether the undertaking was made either before
or after the coming into force of the Access to
Information Act. The proper course in challenging
the validity of such an undertaking is for the
complainant, or the Commissioner, to avail itself
of the grounds in subsection 20(6). In this way a
balancing of interests, in favour of and against
disclosure can occur. To hold otherwise, and con
clude that undertakings of confidentiality are
strictly meaningless in light of the Act, is to give
the Act a dogmatic interpretation rather than a
rational one, and is thus an interpretation which
the law resists.
The grounds in subsection 20(6), set out above,
release the Government from its undertakings of
confidentiality whenever it is in the public interest
"as it relates to public health, public safety, or
protection of the environment" to do so. Yet none
of these valid grounds of public interest have been
advanced by the Commissioner in the present case.
In fact the release of the information sought would
make the third party, the only cheese importer
whose quota was publicly known, and thus place it
at a competitive disadvantage in relation to all
other importers. If no other quota is revealed, then
there is all the more reason to refrain from sin
gling out the third party in this manner. I find that
the public interest goes very much against these
sort of market interventions by Government, and
that this is yet another reason to foster the confi
dentiality of the Government's relationship with
the third party. I therefore reject the applicant's
argument that the information was not confiden
tial because the public interest does not require
that a relationship of confidentiality be fostered. I
do so for the following two reasons: a) the public
interest in fostering confidential relationships is
merely an indicator and not a condition of confi
dentiality; and b) there is a public interest in
maintaining the confidentiality of this relationship
since: i) an undertaking was given that the infor
mation would be kept confidential; and ii) similar
relationships with other importers are being main
tained confidential, and in these circumstances
disclosure of the information would amount to an
unfair market intervention by Government.
In light of all the above I am satisfied that the
respondents have established based upon an objec
tive determination that the information requested
is confidential in nature.
The Commissioner based the paragraph
20(1)(b) aspect of her case on the fact that the
information sought is not information "supplied to
a government institution by a third party". That is
the third criteria identified by MacKay J. in Air
Atonabee, supra. The Commissioner argued that
the information provided in 1975, is not the infor
mation that is now being sought. She submitted
that:
The total quota allocation in 1985 is not the same information
as was supplied to importers to the STRB in respect of their
performance in the years 1973 and 1974. The general reduction
in total quotas in 1979, the importers shift in varieties sourced,
and other changes in market participants and demand establish
that the market is dynamic and subject to continuous variation.
This however is insufficient to rebut the respond
ents' proof that large quota holders (roughly the
twenty largest importers) have been able to retain
their quotas and shares of the market at a constant
level since 1975 other than for the 1979 reduction
mentioned above; that these quotas were based on
confidential information of the importers' imports
in 1973 and 1974; and that neither the information
originally received by Government, nor any of the
quota allocations subsequently deduced from it,
have ever been communicated to the public or to
any person or firm other than those who originally
supplied the information. The uncontested affida
vit evidence of the third party is that its own share
of the total quota has remained unchanged from
1975 to the present, and that thus, the disclosure
of its quota allocation in any given year, would be
as harmful as the release of its original or present
allocation. To my mind, the information sought
(the largest quota in 1985) and the information
provided in 1975 by the third party, is essentially
the same information, and the disclosure of either
would amount to a breach of paragraph 20(1)(b).
The confidentiality of the 1985 quota figure itself
is also borne out by the method in which it is
received. While it is calculated on the basis of the
third party's previous quotas going back to 1975, it
is received by Government through a computer
hook-up which preserves the confidentiality of the
system. Each importer has been assigned a com
pany file number which gives them access to their
quota on the computer. Each import of cheese is
added to the quota holder's tally until the quota is
reached, at which point import permits are no
longer issued. The confidentiality of the importers'
file numbers and of their ability to meet their
yearly quota allocation complements the confiden
tiality surrounding the original 1973 and 1974
market information on which the quota allocation
is based. The facts reveal plainly to me that the
information is supplied by the third party to the
Special Trade Relations Bureau, a branch of the
Department of External Affairs, which is a gov-
ernment institution, within the meaning of the Act,
and I find therefore that the third criterion is met.
As for the fourth and final criterion under para
graph 20(1)(b), the evidence amply demonstrates
that the third party did itself consistently treat the
information sought in a confidential manner. The
affidavit of Robert Bertrand, an officer in the
Special Trade Relations Bureau, establishes that
all importers guard their quota allocation figures
jealously as the information is considered "confi-
dential and extremely sensitive". This is also con
firmed by the affidavit of Peter Dawes, former
Chief executive officer of the Canadian Importers
Association! Association des Import ateurs
Canadiens . In the course of his functions with that
association, over sixteen years, Mr. Dawes helped
form and served as executive director of the Inter
national Cheese Council of Canada, which was
formed in direct response to the government's
imposition of import quotas on foreign cheese. In
his affidavit Mr. Dawes affirms that:
The information concerning each importer's volume alloca
tion of quota is so sensitive that even the Council's operating
fees, which are based on the volume of each importer's quota,
were self-assessed and forwarded to a trust account adminis
tered by legal counsel and therefore protected under client/
solicitor privilege. This was done by a unanimous instruction
from the founding members of the Council.
• • •
Importers consider information on the actual levels of quota
allocated to a company as expressed in volume by weight to be
highly confidential and a matter of strategic consequence for
many reasons, but mostly related to competitive and financial
considerations.
Mr. Dawes then goes on to enumerate some of
those considerations, but I think that, in the
absence of any suggestion by the applicant that the
third party, or any other importer has ever made
known its own quota figures, the foregoing is
sufficient to establish that the final criterion of
paragraph 20(1)(b) was met. Indeed it confirms
the uncontested affidavit evidence of the third
party itself. Thus I am led to conclude that the
respondents have demonstrated that the informa-
tion sought falls within the exemption under para
graph 20(1)(b) and that as such the Department's
refusal to disclose the information was justified.
That finding is in itself sufficient to dispose of
this matter, but I am also satisfied that the
respondents have made out their case for exempt
ing the information under paragraph 20(1)(c) of
the Act.
Paragraph 20(1)(c)
Under paragraph 20(1)(c) the parties are
agreed that the test requires the party resisting
disclosure to adduce evidence of harm that could
reasonably be expected to be caused by disclosure.
The test was established in Canada Packers Inc. v
Canada (Minister of Agriculture), [1989] 1 F.C.
47 (C.A.), at pages 59-60 and reaffirmed in Saint
John Shipbuilding Ltd. v. Canada (Minister of
Supply and Services) (1990), 67 D.L.R. (4th) 315
(F.C.A.), where Hugessen J.A., states at page 316:
In applying that text [paragraphs 20(1)(c) and (d)] to the
material before him the judge [24 F.T.R. 32, 12 A.C.W.S. (3d)
51] followed the guidelines laid down by MacGuigan J.A. for
this court in Canada Packers Inc. v. Canada (Minister of
Agriculture) (1988), 53 D.L.R. (4th) 246, 26 C.P.R. (3d) 407,
[1989] 1 F.C. 47, where he said, at p. 255: "I believe one must
interpret the exceptions to access in paras. (c) and (d) to
require a reasonable expectation of probable harm." (The
emphasis is in the original.)
The applicant now invites us to say that this is wrong, first
because para. (c), while conveying the notion of "prejudice" (or
harm), does not set so high a threshold as probability and,
second, because para. (d) speaks only of interference and does
not require any showing of harm at all. We do not agree. The
setting of the threshold at the point of probable harm seems to
us to flow necessarily from the context, not only of the section
but of the whole statute, and it is the only proper reading to
give the French text ("risquerait vraisemblablement de causer
des pertes").
Thus while the law is clear, and there is no dispute
as to the test to be applied, determining just what
constitutes a "reasonable expectation of probable
harm" will invariably give rise to serious disagree
ment, as it has in the present case.
The respondents' argument is advanced in the
affidavits of Mr. Dawes, and of "Mr. third party",
the president of the Third Party, and its former
Controller, Secretary-Treasurer, and Director of
Finance. The name of the third party, and its
affiant are confidential matters which do not
appear in the public records submitted for this
application. Mr. Dawes submitted that once the
amount of the largest quota allocated in any given
year was made public, other importers and knowl
edgeable parties would immediately be able to
match that quota figure to the company to which
it was granted, because the largest import quota
holders are known to their competitors. He also
indicated that as overall demand for imported
cheese always surpasses supply, importers are
under great pressure from their customers (retail-
ers, wholesalers and restaurants) to use their full
quota to meet a particular demand rather than
follow through with their particular plans. It is
therefore important that an importer's quota
volume not be known to its customers. Moreover
by keeping its import quota secret a large importer
can and will choose to apportion its quota among
many small customers or to one customer exclu
sively for certain cheeses, if its quota volume were
known it could not negotiate as successfully with
its customers. I find that these disadvantages vis-a-
vis one's clientele would be even more accentuated
in a case where a given importer was the only
importer whose quota volume was known.
Other than disadvantages vis-a-vis clientele, the
Dawes affidavit establishes that knowledge of a
competitor's quota volume "is valuable commer
cial intelligence which can be used to advantage by
determining a competitor's price structures and
marketing strategies". Given the existing market
information, it is argued that knowledge of each
importer's quota entitlement is the only informa
tion lacking to estimate profit levels, discern pric
ing strategies, market plans, and financial strength
of the competition. One of the conclusions reached
by Mr. Dawes is that:
... disclosure of quota levels of individual importers, or the
largest quota holder in Canada in any given year, would cause
that importer financial damage. An important distinction on
the facts before us is that the loss and damage will be long
term:—not as it relates to the products marketed by the
company but to the overall competitive position of the company
whose confidential information is disclosed once and for all.
This is because a company's quota entitlement to various
varieties and volume within the current regulatory regime is not
expected to change in the foreseeable future.
The affidavit of the third party's president con
firms the examples of probable harm that would
flow from the divulgation of the information
sought, and gives specific examples of how, com
petitors, suppliers and customers could use the
information to the third party's detriment.
In contrast the Commissioner has forwarded the
expert testimony of Thomas C. Greig, Partner-in-
Charge of the International Trade Services Group
at Price Waterhouse in Toronto, and former
Assistant Deputy Minister of the Customs pro
gram in the Federal Department of National
Revenue. Mr. Greig has also served as Assistant
Deputy Minister, Finance, at the Department of
National Defence, and as Executive Vice-Presi
dent, Finance of M. Loeb Ltd. a wholesale food
distributor. After reviewing the affidavits of the
respondents Mr. Greig concludes that the release
of the information requested "would not result in
competitive prejudice or commercial loss or gain to
any party participating in the cheese market".
Essential to Mr. Greig's findings was his opinion
that in a business such as the cheese import busi
ness the large players would have a fairly accurate
idea of who their major competitors were and what
their volume of imports was. He concluded that as
the information request did not ask for a break
down of the largest quota holder's allocation
according to variety, country of origin, and qual
ity, nor for the name of the holder, the information
revealed could not be used in the manner which
the respondents affiants have suggested. Mr. Greig
also submitted that his findings would remain the
same even if the name of the largest quota holder
were revealed, and indeed it was plainly apparent
at the hearing that all the parties knew very well
the exact identity of the third party. According to
Mr. Greig there is no harm in releasing the infor
mation, because, by and large it contains nothing
new, nothing that would dramatically alter the
competitive position of the third party.
Having reviewed the evidence thoroughly, I
have some sympathy for Mr. Greig's position, but
I do not find it sufficiently refutes the evidence of
the respondent's affiants. In particular it does not
raise any doubt that could be resolved in the
applicant's favour. In fact while the information
requested, may not be as informative, or as
damaging to the third party, as previous access
requests in this matter would have been had they
not been refused, it is nevertheless information
which by its very nature can be of no use other
than to the third party's competitors, suppliers or
customers. I do not question the motives of the
complainant in making the request, and indeed
such matters are rarely relevant at all in access
requests. But the nature of the information
requested is such that in the final analysis I am
compelled to conclude that the best evidence put
forward is that of the respondents. Given the
nature of the information sought, its potential
uses, and the great confidence with which it has
been guarded at all times, I find that the respond
ents have established that a reasonable expectation
of probable harm exists regarding its disclosure.
For these reasons I find that the respondents have
met their burden of proving that the information
requested is exempt from disclosure under para
graph 20(1)(c) of the Act.
Paragraph 20(1)(d)
As for the last ground argued, the exemption
under paragraph 20(1)(d) of the Act, which only
the third party raised before me, I must briefly
indicate that it was not satisfactorily proven. Para
graph 20(1)(d) requires proof of a reasonable
expectation that actual contractual negotiations
other than the daily business operations of the
third party will be obstructed by disclosure. Reli
ance is placed on the strong sense of the words
"interfere with" as indicated by the use of the
word "entraver" in the French text. (Saint John
Shipbuilding Ltd. v. Canada (Minister of Supply
and Services) (1990), 67 D.L.R. (4th) 315
(F.C.A.). As MacGuigan J.A., states in Canada
Packers Inc. v. Canada (Minister of Agriculture),
[1989] 1 F.C. 47 (C.A.), at page 55:
With respect to paragraph 20(1)(d), I accept the submission
of the Information Commissioner that this paragraph is intend
ed 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 indus
try. It may, however, have some relevance with respect to
international sales ....
As this case deals with the cheese import busi
ness, Mr. Justice MacGuigan's caveat with respect
to international sales is not applicable. While some
evidence was tendered in the Dawes affidavit of
the possible effect of disclosure on international
contracts generally, and while hypothetical prob
lems concerning foreign suppliers and local cus
tomers were raised in the third party's affidavit,
these are not sufficient to establish a reasonable
expectation that any particular contract or
negotiations will be obstructed by disclosure.
Consequently the grounds for exemption under
paragraph 20(1)(d) have not been demonstrated.
However as the respondents have demonstrated
that the requested information is exempted from
disclosure under paragraphs 20(1)(b) and (c) of
the Act, this application and the order requested
by the Information Commissioner must be denied.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.