Date: 20041007
Docket: T-808-02
OTTAWA, Ontario, October 7th, 2004
Present: THE HONOURABLE MR. JUSTICE KELEN
BETWEEN:
AVENTIS PASTEUR LIMITED
Applicant
- and -
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR ORDER AND ORDER
[1] This is an application pursuant to section 44 of the Access to Information Act, R.S.C. 1985, c. A-1, (the "Act") for a review of the decision dated May 3, 2002 by Public Works and Government Services Canada ("Public Works") to disclose the quantity of doses and the volume ranges in a $50 million contract for the supply by the applicant of the influenza virus vaccine. The issue is whether the information to be disclosed in the contract is exempt from disclosure pursuant to paragraphs 20(1)(b),(c) or (d) of the Act.
THE FACTS
Background
[2] The applicant, Aventis Pasteur Limited, manufactures a vaccine for the influenza virus. On August 21, 2001, following a request for proposals, the applicant was awarded a contract by Public Works for the supply of its vaccine.
[3] In November 2001, the Access to Information and Privacy Office of Public Works (the "ATIP Office") received a request under the Act for records containing the following information from the contract:
PRIX DE VENTE ANNUEL/DOSE. NOMBRE DE DOSES/ANNEE: DE 2001 ET ANNEES SUBSEQUENTES. DUREE DES CONTRATS ET CLAUSES RESTRICTIVES, SI INDIQUEES PRIX PAYE PAR GOUVERNEMENT POUR L'ACHAT DES OEUFS EMBROYENNES CAS DES PANDEMIE (sic).
[4] By letter dated November 26, 2001, the ATIP Office advised the applicant of the request and invited the applicant to make submissions with respect to the possible exemption of all or part of the records under section 20 of the Act.
[5] The applicant provided the ATIP Office with written submissions objecting to the release of those portions of the contract that contained the unit prices per dose of vaccine, the quantities of doses as well as the volume ranges used to determine the prices per dose. The applicant claimed that this information was exempt pursuant to paragraphs 20(1)(b), (c) and (d) of the Act and should be severed from the records prior to their release.
The Decision
[6] The ATIP Office reviewed the applicant's submissions and by letter dated May 3, 2002, informed the applicant that:
Pursuant to section 28 of the Access to Information [Act], we have considered your views and have decided that the records for which access has been requested are partially exempt under sections 20(1)(b) and 20(1)(c) of the Act.
Attached to the letter was a copy of the severed contract that the ATIP Office intended to disclose. The unit prices per dose had been deleted from the contract, however, the quantities of doses and volume ranges had not been deleted.
[7] Public Works decided that the unit prices per dose in the contract are exempt from disclosure under paragraphs 20(1)(b) and (c) of the Act. In other words, the unit prices are confidential financial, commercial information, and the disclosure of the unit prices could reasonably be expected to result in material loss to the applicant or could reasonably be expected to prejudice the competitive position of the applicant.
[8] On May 23, 2002, the applicant initiated this application for judicial review with respect to the proposed disclosure of the quantities of the vacine and the volume ranges. The applicant submits that because the total value of the contract is public, the release of the quantity of doses and volume ranges would allow a third party to determine the approximate unit prices of the vaccine. Since the ATIP Office determined that the unit prices were exempt pursuant to paragraphs 20(1)(b) and (c), the applicant claims that information that allows a third party to determine the approximate unit prices should also be exempt from disclosure.
THE RELEVANT LEGISLATION
[9] The applicant relies on the following provisions of the Act:
| 20. (1) Subject to this section, the head of a government institution shall refuse to disclose any record requested under this Act that contains [...] (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.
[...]
44. (1) Any third party to whom the head of a government institution is required under paragraph 28(1)(b) or subsection 29(1) to give a notice of a decision to disclose a record or a part thereof under this Act may, within twenty days after the notice is given, apply to the Court for a review of the matter.
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20. (1) Le responsable d'une institution fédérale est tenu, sous réserve des autres dispositions du présent article, de refuser la communication de documents contenant: [...] b) des renseignements financiers, commerciaux, scientifiques ou techniques fournis à une institution fédérale par un tiers, qui sont de nature confidentielle et qui sont traités comme tels de façon constante par ce tiers; c) des renseignements dont la divulgation risquerait vraisemblablement de causer des pertes ou profits financiers appréciables à un tiers ou de nuire à sa compétitivité; d) des renseignements dont la divulgation risquerait vraisemblablement d'entraver des négociations menées par un tiers en vue de contrats ou à d'autres fins.
[...]
44. (1) Le tiers que le responsable d'une institution fédérale est tenu, en vertu de l'alinéa 28(1) b) ou du paragraphe 29(1), d'aviser de la communication totale ou partielle d'un document peut, dans les vingt jours suivant la transmission de l'avis, exercer un recours en révision devant la Cour.
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ANALYSIS
Standard of Review and Onus
[10] The parties agree that the only decision under review is the decision to disclose the portions of the contract containing the quantity of doses and volume ranges. The decision to withhold the unit prices per dose from disclosure is not before the Court.
[11] In reviewing the decision under section 44 of the Act, the standard of review is correctness. The Court will consider whether this information ought to be disclosed on a de novo basis. Accordingly, the decision of Public Works to disclose is not owed any deference. The Court's analysis must be guided by the principle of public accessibility to information contained in government records, as this is the purpose of the Act. However, Parliament has provided that a government institution shall refuse to disclose certain records provided to government by third parties. A party seeking exemption from disclosure has a "heavy onus" to prove that the information is exempt from disclosure. See my decision in Canada Post Corp. v. National Capital Commission (2002), 221 F.T.R. 56 at paragraph 8. See also St. Joseph Corp. v. Canada (Public Works and Government Services) (2002), 218 F.T.R. 41 (F.C.T.D.), Canada Packers Inc. v. Canada (Minister of Agriculture), [1989] 1 F.C. 47 (C.A.), and Air Atonabee Ltd. v. Canada (Minister of Transport) (1989), 27 F.T.R. 194 (F.C.T.D.).
[12] In this review, the applicant claims exemption from disclosure under paragraphs 20(1)(b),(c) and (d) of the Act. The respondent argues that the information in question does not fall under any of these provisions.
Paragraph 20(1)(b) - Confidential Financial and Commercial Information
Four Conditions
[13] In order to bring the information in question within the exemption set out in paragraph 20(1)(b), the applicant must establish, on a balance of probabilities, that the information:
1) is financial, commercial, scientific or technical information;
2) is confidential information;
3) was supplied to a government institution by the third party; and
4) was treated consistently in a confidential manner by the third party.[emphasis added]
[14] I am satisfied that conditions 1 and 4 have been met. The information is undoubtedly financial and commercial. Moreover, the applicant has consistently treated the information in a confidential manner.
Condition No. 2: Confidentiality
[15] With respect to condition 2, the jurisprudence sets out three requirements that must be met in order for the information to be considered confidential. MacKay J. in Air Atonabee, supra, at paragraph 42 summarized the test as follows:
[...] 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 disclosed, 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 the public benefit by confidential communication.
[16] I am satisfied that the first criterion of this test has been met since the information in question is not available from any other source.
[17] The Federal Court of Appeal recently provided direction as to the application of the last two criteria of the test. In Canada (Minister of Public Works and Government Services) v. Hi-Rise Group Inc., 2004 FCA 99, the Court considered an application by a commercial landlord to prevent the disclosure of rent being paid by the Federal Government for one of the landlord's buildings, as well
as the option prices at which the building could be acquired. The Court found that the information in question did not constitute "confidential information" as envisioned by the Act. Noël J.A., relying heavily on the reasoning of Strayer J. (as he then was) in Société Gamma Inc. v. Canada (Department of State) (1994), 79 F.T.R. 42 (F.C.T.D.), commented that:
[...][W]hen a would be contractor sets out to win a government contract through a confidential bidding process, he or she cannot expect that the monetary terms, in the event that the bid succeeds, will remain confidential. (paragraph 37)
[...]
[...]The public's right to know how government spends public funds as a means of holding government accountable for its expenditures is a fundamental notion of responsible government that is known to all. (paragraph 42)
In addition, Noël J.A. stated at paragraph 41:
As was pointed out in Société Gamma, there are good reasons for maintaining confidentiality during the bidding process but different considerations arise once the contract is awarded and public funds are committed to it. Absent special circumstances (national security comes to mind) I fail to see how public benefit could be fostered by maintaining the confidentiality of amounts paid or payable by government pursuant to contractual obligations with third parties.
[18] The Court of Appeal concluded that the information in question was not confidential within the meaning of paragraph 20(1)(b) because the landlord could not reasonably have expected that the amounts paid by the government under the contract would be kept from the public.
[19] While the Court of Appeal relies upon Société Gamma for the proposition that the confidentiality of amounts paid or payable by a government pursuant to a contractual obligation with third parties is not confidential after the bidding process has been completed and the contract awarded, I note that Strayer J. (as he then was) stated in Société Gamma at paragraph 5:
[...] Proposed prices per word to be paid under the contract are deleted.
and at paragraph 9:
[...] Many of the concerns expressed by it to the respondent including the possible harm to it of revealing information as to price, personnel, and equipment have already been met by the respondent agreeing to sever portions of the proposals dealing with these matters.
Accordingly, in Société Gamma the unit prices per word for the translation contract were not being disclosed and were not the subject of review by Justice Strayer. In the case at bar, there is a history of confidentiality between the applicant and Public Works. Public Works has agreed in the past and agrees in this case, that the unit prices per dose are confidential, financial and commercial information not to be disclosed. Accordingly, the rational of the Court of Appeal in Hi-Rise Group Inc., supra, does not apply. In this case, the applicant understood that the monetary terms of the contract would remain confidential while the total contract price would be public.
[20] The case at bar is easily distinguished from Hi-Rise Group Inc. in that the Federal Court of Appeal held at paragraph 33:
The question to be answered in the present case was therefore whether the respondent, assuming that its proposal was successful, could reasonably expect that amounts paid or payable to it out of public funds pursuant to the ensuing contract would remain confidential by reason of the fact that the process which led to the grant of the contract was confidential.
In the present case, it is clear that both the applicant and Public Works accepted and expected that the unit prices per dose paid under the contract would remain confidential while the total contract price would be made public. Obviously, any other information in the contract which would disclose the unit price would also remain confidential.
[21] Public Works cannot switch horses in midstream. It cannot say that the unit prices are confidential and then propose to disclose part of the contract which will enable the confidential part to be easily calculated.
[22] With respect to the third criterion, whether the public benefit is fostered by keeping the information confidential, I must presume that Public Works considered this issue and concluded that keeping the details of the unit prices confidential was in the public's benefit. As I indicated earlier, the decision by Public Works to withhold the unit prices from disclosure is not under review, only the decision to disclose information that would allow a third party to calculate the approximate unit prices. Since Public Works considered it in the public's benefit to withhold the unit prices, it follows that it is in the public's benefit to withhold information that enables a third party to calculate the approximate unit prices. For that reason, I am satisfied that the last criterion of confidentiality, as set out in Air Atonabee, supra, has been met.
Condition No. 3: Supplied to a Government Institution
[23] In Canada Post Corp. v. National Capital Commission, supra, I held that negotiated terms cannot be characterized as information "supplied to a government institution by a third party". McGillis J. came to a similar conclusion in Halifax Development Ltd. v. Canada (Minister of Public Works and Government Services), [1994] F.C.J. No. 2035. To hold otherwise would broaden the scope of the exemption and prevent the public from having access to much of the information contained in government contracts.
[24] In this contract, the unit prices per dose in the different ranges of quantities was supplied by the applicant to the government and was not a negotiated term. Other parts of the contract were negotiated, but the unit prices were not. Similarly, the volume ranges to which the unit prices apply were supplied by the applicant and not the subject of negotiation. The fact that the applicant selected one particular quantity within that range does not mean that that quantity was not part of the information supplied by the applicant.
[25] The quantity of doses and the volume ranges used to determine the prices per dose can be used by one of the applicant's competitors or one of the applicant's customers to obtain an approximation of the unit price per dose in the contract. Since Public Works agrees that the unit price per dose is exempt from disclosure, it only makes sense that the quantities also be exempt. The confidential evidence before the Court demonstrates that if the quantities of doses and the volume ranges in the contract were made public, these numbers could be used, together with the public information that the total contract value is $50,799,000, to calculate the approximate unit price per dose in the contract. The Confidential Affidavit of Dr. Robert Van Exan at paragraph 50 outlines that the applicant's competitors could determine, within a few cents per dose, the unit price and structure of the applicant's tender if the information were disclosed. This evidence was not contradicted by the respondent or cross-examined and is the only evidence before the Court on whether the disclosure of the quantities and the volume ranges would allow a competitor to determine the unit price per dose contained in the contract. Just as a woman cannot be half pregnant, the financial terms of a contract cannot be half confidential. Public Works submits that the quantities of the dose is not exempt from disclosure. I do not agree because the disclosure of the quantities would, according to the only evidence before the Court, disclose the approximate confidential unit prices in the contract.
[26] For these reasons, I am satisfied that the applicant has established that the information meets the conditions for exemption from disclosure under paragraph (20)(1)(b) of the Act.
Public Works ought inform bidders whether the financial terms of a contract will be made public or be kept confidential
[27] In obiter, I add that Public Works ought inform parties during the bidding process whether the financial terms of a contract, after it is awarded and after public funds are committed to it, will remain confidential. I agree with the Court of Appeal in Hi-Rise Group Inc., supra, that "absent special circumstances, the public ought to know how its money is being spent, including the terms of the contract". This is to ensure that the government is accountable to the public. If Public Works decides that there is a public interest in maintaining the confidentiality of certain terms of a contract, then Public Works ought make that decision, and make it known to companies submitting tenders or proposals.
[28] In the case at bar, the evidence is clear that the government intended that the total contract price would be public, but the unit prices per dose would remain confidential. There may be a public interest in keeping the unit prices confidential because the government is able to obtain a much lower price from a contractor than the contractor would otherwise be able to offer. In the contract at issue, the applicant certified that the price is not in excess of the lowest price charged anyone else in NAFTA or EEU countries, including the applicant's most favoured customer, and that Public Works is entitled to audit the applicant's books to verify that the price is the lowest price.
[29] On the other hand, it may be in the public interest that the unit prices are made public. This may lead to the applicant's competitors proposing lower prices per unit when the contract comes up for renewal.
[30] The current so called "Québec Sponsorship Scandal" underlines the importance that government contracts should be made public and transparent unless it is contrary to the public interest. Consequently, Public Works should make clear at the outset of any bidding process whether the ultimate contract will be disclosed, or whether parts of it will be kept confidential in the public interest. If Public Works determines that the some of the terms should remain confidential, it should also clearly set out how the public benefit is fostered by maintaining confidentiality. Such a determination by Public Works would not foreclose a section 44 review by the court, however, it would go a long way to clarifying the expectations of the parties and identifying the public interest considerations involved.
Paragraph 20(1)(c) - Harm or prejudice to competitive position
[31] It is well established that in order to rely on the exemption under paragraph 20(1)(c), the applicant must demonstrate, on a balance of probabilities, that there is a "reasonable expectation of probable harm." (Canada Packers, supra). In this regard, it is not sufficient for the applicant to generally speculate as to the probability of harm which the disclosure would cause, rather the
applicant must clearly show that the disclosure will probably cause it harm. (Viandes du Breton v. Canada (Department of Agriculture and Agri-Food) (2000), 198 F.T.R. 233 (F.C.T.D.) at para. 11).
[32] After a careful review of the confidential evidence, I am satisfied that the information in question falls within the exemption in paragraph 20(1)(c). The disclosure of the information can reasonably be expected to prejudice the competitive position of the applicant in upcoming bids and can reasonably be expected to result in financial loss to the applicant. Obviously, the applicant's competitors will undercut the prices charged by the applicant if at all possible. As indicated by counsel for the applicant, this prejudice is only aggravated by the fact that the applicant will not have similar information about its competitors.
[33] In my view, the evidence of the applicant, when considered in its entirety, establishes on a balance of probabilities, that the disclosure of the disputed information could reasonably be expected to prejudice the competitive position of the applicant. In support of this conclusion I make reference to the decision of Simpson J. in Perez Bramalea Limited v. Canada (National Capital Commission), [1995] F.C.J. No. 63 (F.C.T.D.) in which the Court held that there was a reasonable expectation of probable harm if prospective tenants knew the rental rates paid by the National Capital Commission for floors of an office building. In addition, in Canada Post Corporation v. National Capital Commission, supra, I held that there was a reasonable expectation of probable harm if the sponsorship rates paid by a sponsor were disclosed.
[34] As I indicated earlier, whether it is in the public interest that the applicant's competitors know the price paid is a decision for Public Works to make before it calls for future bids. Public Works should make clear to the parties submitting bids whether or not the ultimate contract, in all of its details, will be made public or will be kept confidential. If the contractor is informed in advance that the contract will be completely public, then paragraph 20(1)(c) would not apply.
Paragraph 20(1)(d)
[35] As I indicated at the hearing, I am not satisfied that the applicant has adduced any evidence of specific contract negotiations which would allegedly be interfered with if the information were disclosed. The applicant has an obligation to provide tangible evidence to discharge its burden under this exemption, which it has not satisfied.
DISPOSITION
[36] For these reasons this application will be allowed, and the quantity of doses and volume ranges contained in the contract shall not be disclosed under paragraphs 20(1)(b) and (c) of the Act.
ORDER
THIS COURT ORDERS THAT:
1. this application is allowed with costs; and,
2. the quantity of doses and the volume ranges contained in the contract shall not be disclosed pursuant to paragraphs 20(1)(b) and (c) of the Act.
"Michael A. Kelen" _______________________________
JUDGE
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-808-02
STYLE OF CAUSE: Aventis Pasteur Limited
and
Attorney General of Canada
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: September 27, 2004
REASONS FOR ORDER
AND ORDER: The Honourable Mr. Justice Kelen
DATED: October 7, 2004
APPEARANCES:
SOLICITORS OF RECORD:
FEDERAL COURT
Date: 20041007
Docket: T-808-02
BETWEEN:
AVENTIS PASTEUR LIMITED
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR ORDER
AND ORDER