Federal Court Limits Third-party Information Exemptions in Access-to-information Requests to Regulators

In Porter Airlines Inc. v. Attorney General of Canada, 2014 FC 392, the Federal Court of Canada clarified the limits of the "third-party information" exemptions under section 20 of the federal Access to Information Act (ATIA). In particular, the Court emphasized the distinction between confidential third-party information, which is exempt from access-to-information requests, and conclusions drawn from such information by regulatory bodies, which are subject to disclosure under the ATIA.

Background

Transport Canada received ATIA requests in relation to its oversight of the Canadian Aviation Regulations, and particularly with respect to the safety management system (SMS) developed and implemented by Porter Airlines Inc. (Porter). Porter sought to have the requested records withheld from disclosure under the third-party information exemptions of the ATIA. Two of the exemptions relied on by Porter were the "confidential information exemption" under section 20(1)(b) and the "financial prejudice exemption" under section 20(1)(c).

The Third-party Confidential Information Exemption

Central to the Court’s analysis was the distinction between confidential SMS information supplied by Porter, and Transport Canada’s regulatory conclusions based on that SMS information. Previous jurisprudence held that confidential information supplied by a third party could be exempt from access-to-information requests, but in general, conclusions of a regulator should be disclosed. Here, the Court grappled with the proper approach to records that contained both types of information, and ultimately directed Transport Canada to apply "effective and creative redaction" such that none of Porter’s confidential SMS information would be disclosed alongside Transport Canada’s regulatory conclusions. Justice Rennie agreed that where the disputed records contained or summarized Porter’s SMS information, that information could not be disclosed. However, "the basic conclusions of [Transport Canada] do not summarize Porter’s confidential SMS information, and therefore are not within the ambit of this reservation." He noted that "[i]n the main, regulatory conclusions need not contain any [confidential] information."

Prior Inadvertent Disclosure

Justice Rennie also briefly commented on the effect of prior inadvertent disclosure of information on the application of the third-party confidential information exemption. He stated that simply because information is inadvertently disclosed, it does not mean that the information is no longer confidential and as such subject to intentional disclosure under the ATIA. Rather, a purposive test is applied to determine whether the parties had intended for the information to remain confidential, despite the inadvertent disclosure. If a government body had purposefully disclosed the information to the public, then the information is no longer confidential. Where the disclosure is inadvertent or accidental, there is no intent to remove the cover of confidentiality, and therefore the information may be shielded under the section 20(1)(b) exemption. Justice Rennie’s comments are helpful to owners of confidential information.

The Financial Prejudice Exemption

Porter also argued that disclosure of the disputed records would financially harm or prejudice Porter’s competitive position, and therefore should be exempted from disclosure under section 20(1)(c). Porter’s position was that the release of regulatory documents would affect travel choices of passengers, since the public might not fully understand and appreciate the regulatory conclusions of Transport Canada. However, Justice Rennie disagreed, stating that Porter had failed to demonstrate a reasonable expectation of probable harm resulting from the disclosure of the records. Justice Rennie also pointed out that the expected harm under this exemption should not be attributed to only the possibility of the public’s misunderstanding of the disclosed information, and noted that the Supreme Court of Canada had specifically cautioned against applying the financial harm exemption based on the potential for public misunderstanding.

Moving Forward

Although this decision is related to airline safety, it has significant ramifications for all federally regulated industries. Porter had submitted SMS information as required by law, but with an expectation of confidence. In light of Justice Rennie’s ruling, conclusions of regulators will not be protected from disclosure, while the underlying confidential information that informs those conclusions is likely to remain confidential and exempt from disclosure. Owners of confidential information will want to continue to seek the protection for such information provided under the ATIA. Further, this case reaffirms the difficulty in relying on the financial prejudice exemption to oppose the disclosure of information that is not deemed to fall under the confidential information exemption.

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* With assistance from Albert Chan, Articling Student.

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