Dockets:
T-1003-13
T-1300-13
Citation:
2014 FC 487
Ottawa, Ontario, May 21, 2014
PRESENT: The
Honourable Mr. Justice Manson
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Docket:
T-1003-13
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BETWEEN:
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EQUIFAX CANADA CO
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Applicant
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and
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MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES CANADA AND THE INFORMATION COMMISSIONER OF CANADA
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Respondents
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Docket:
T-1300-13
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AND
BETWEEN:
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EQUIFAX CANADA CO
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Applicant
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and
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MINISTER OF HUMAN RESOURCES AND SKILLS DEVELOPMENT AND THE
INFORMATION COMMISSIONER OF CANADA
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Respondent
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REASONS FOR JUDGMENT AND JUDGMENT
[1]
These proceedings constitute two related
challenges to the disclosure of information pursuant to subsection 44(1) of the
Access to Information Act, RSC 1985 C A-1 [the Act]. Both challenges are
brought by Equifax Canada Co [the Applicant].
[2]
The first, court file number T-1003-13,
challenges a decision by the Minister of Public Works and Government Services
Canada and the Information Commissioner of Canada [PWGSC].
[3]
The second, court file number T-1300-13,
challenges a decision by the Minister of Human Resources and Skills Development
Canada and the Information Commissioner of Canada [HRSDC].
I.
Issues
[4]
The issue in file T-1003-13 is whether the price
for a contract should be exempt from disclosure under sections 20(1)(c) and
20(1)(d) of the Act.
[5]
The issue in file T-1330-13 is whether certain
portions of contracts entered into between HRSDC and the Applicant since 2006
should be exempt from disclosure under sections 20(1)(c) and 20(1)(d) of the
Act.
II.
Background
[6]
The Applicant is a large credit reporting agency
in Canada. It also provides credit protection, fraud management and credit
management services. It has entered into contracts with many government
departments, including PWGSC and HRSDC. The services provided through these
contracts include commercial credit scores, consumer credit checks, employee
screening, authentication services, and various analytic services.
A.
T-1003-13
[7]
In January, 2013, an electronic storage device
containing the personal information of 583,000 student loan borrowers, who were
clients of the Canada Student Loans Program from 2000 to 2006, was lost from an
HRSDC office in Gatineau, Quebec. The personal information included social
insurance numbers, dates of birth, and names. HRSDC approached the Applicant
and requested a proposal for credit and fraud protection services for the
individuals affected by this loss of data. According to the affidavit of Carol
Gray, the president of the Applicant, TransUnion of Canada Inc, a competitor of
the Applicant, submitted a proposal for the same work. According to Ms. Gray,
the proposal submitted by the Applicant involved a unique suite of services and
was priced below market value.
[8]
HRSDC selected the Applicant’s proposal and
began negotiating the broad terms of a contract to provided the proposed
services [the Contract]. Responsibility for the Contract was then transferred
to PWGSC to finalize its terms. The Contract was concluded on January 18, 2013,
with an understanding between the parties that its total value would remain
confidential subject to any operation of law.
[9]
On February 25, 2013, the Applicant was notified
by the Access to Information and Privacy Office [ATIP] that PWGSC had received
a request pursuant to the Act for the following records:
Contract
with Equifax Canada (and/or Equifax Inc.) regarding credit protection services
offered to Canada Student Loan Program participants whose personal information
was on the hard drive lost by or stolen from HRSDC.
[10]
ATIP invited the Applicant to make written
representations as to why the records requested should not be disclosed.
[11]
On March 5, 2013, John Russo, Vice-President,
Legal Counsel of the Applicant, wrote to ATIP to request that the pricing,
statement of work and the implementation plan for the Contract be exempt from
the Act’s disclosure requirements pursuant to 20(1)(b) and 20(1)(c) of the Act.
Mr. Russo stated that the release of this otherwise confidential information
would cause economic harm to the Applicant if it were disclosed.
[12]
On May 16, 2013, ATIP wrote to the Applicant,
indicating that after considering Mr. Russo’s March 5, 2013 letter, it had
exempted certain records pursuant to 19(1), 20(1)(b) and 20(1)(c) of the Act.
However, ATIP did not exempt the disclosure of the contract price or the
payment terms.
B.
T-1300-13
[13]
On March 12, 2013, ATIP notified the Applicant
that HRSDC had received the following request pursuant to the Act:
Aside from the contract between Equifax and
HRSDC regarding the 583,000 individuals that were part of the Canada Student
Loan Program and that were affected by the Department’s loss of personal
information, provide any other contracts that HRSDC has with Equifax in Canada or Equifax in the United States since 2006.
[14]
On April 1, 2013, Mr. Russo wrote to ATIP to
request that pricing and service description terms for the various contracts at
issue should be exempt from disclosure pursuant to 20(1)(b) and 20(1)(c) of the
Act. Mr. Russo stated that the release of this otherwise confidential information
would cause economic harm to the Applicant if it were disclosed.
[15]
On July 15, 2013, ATIP wrote to the Applicant,
stating that after considering the representations in Mr. Russo’s March 5,
2013, letter, it had exempted certain records. However, ATIP did not exempt
certain terms of the various contracts. In particular, ATIP did not exempt
HRSDC contact information for contract administrators, term and renewal dates
of contracts, the type of security and protocol access granted to the
Applicant, the products offered, and the total price of contracts.
III.
Analysis
[16]
For both proceedings, the parties agree that under
the Act, access is the general rule and that public disclosure is a
fundamental means to hold the government accountable for its expenditures (Dagg
v Canada (Minister of Finance), [1997] 2 S.C.R. 403 at 428; Canada (Public
Works and Government Services Canada) v Hi-Rise Group, 2004 FCA 99 at para
42).
A.
T-1003-13
[17]
The Applicant’s reasons for claiming that the
Contract price should be exempt under section 20(1)(c), include:
a.
the disclosure of the Contract would provide
TransUnion, the Applicant’s main competitor, and any other competitors, with a
competitive advantage, by being able to use that information to undercut future
bids by the Applicant;
b.
the benchmark Contract price in this matter, if
known to competitors, would inevitably result in an uneven playing field for
future contracts: the Applicant has no such benchmark to compare to a competitor’s
pricing for a comparable scope of work.
[18]
The Applicant acknowledges it bears the burden
of proving that 20(1)(c) is made out, but that the burden of proof required is
less than the balance of probabilities (Merck Frosst Canada Ltd v Canada (Health), 2012 SCC 3 at paras 196, 206 [Merck]).
[19]
The Applicant also argues that confidential
information can include special knowledge that makes it possible to undercut
the competition (1488245 Ontario Ltd v Riska, 2010 ONSC 6780 at para 22;
DCR Strategies Inc v Vector Card Services LLC, 2011 ONSC 5473 at para 42).
[20]
Moreover, the Applicant implicitly argues that
20(1)(d) of the Act also applies, as the revelation of the Contract price could
make future negotiations with the federal government more difficult.
[21]
The Respondents acknowledge certain financial
terms and business related information of the Contract should be exempt from
disclosure. However, they are not prepared to consider the contract price as
being exempt, notwithstanding the Applicant’s objections.
[22]
The Respondents argue that the Contract was
based on a unique set of circumstances which is unlikely to occur again. Given
this, there is an insufficient likelihood that revealing the total Contract
price could prejudice the Applicant’s competitive position or result in
financial loss under 20(1)(c) or interfere with future negotiations under
20(1)(d).
[23]
To the extent that the Applicant claimed an
exemption under 20(1)(d) of the Act, the Applicant at best has a basis for arguing
that disclosure of the Contract price could make future negotiations more
competitive. This is insufficient for the Applicant to fall under the exemption
requirements in 20(1)(d) of the Act (Canada Post Corp v National Capital
Commission), 2002 FCT 700 at para 18 [Canada Post]).
[24]
However, I find that the Applicant meets the
threshold established under 20(1)(c) of the Act to justify exemption of the
Contract price.
[25]
To satisfy 20(1)(c), the Applicant must show
that the disclosure of the information at issue could be reasonably be expected
to result in prejudice to its competitive position or a financial loss. The
information at issue should be examined in its entirety in order to determine
the likely impact of its disclosure (Merck at paras 196, 219).
[26]
The Applicant must show that there is a
“…reasonable expectation of probable harm” (Merck at para 192). This degree
of likelihood is less than the balance of probabilities, but greater than a
mere possibility.
[27]
The affidavit of Ms. Gray has clearly set out
the circumstances under which the Contract with HRSDC was entered into:
a. e-mails
establishing that both the Applicant and HRSDC understood that the terms of the
agreement would remain confidential, and that the Contract price was not to be
shared with any other government departments or outside government;
b.
the only proviso to (a), above, was that non-disclosure was subject to any
applicable legislation, law, decisions from a competent court of law, or any
Ministerial duties and/or obligations with respect to federal accountability.
[28]
I find Aventis Pasteur Ltd v Canada (Attorney General), 2004 FC 1371 [Aventis Pasteur] provides a useful guide
in determining whether the Applicants have satisfied 20(1)(c) of the Act. At
paras 24-25 of Aventis Pasteur, the Court describes how the total
contract price could, when read in context, reveal more detailed information
that could reasonably be expected prejudice the applicants:
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…
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.
[29]
As in Aventis
Pasteur, the total Contract price might be of little of use to competitors
in isolation. However, the number of individuals affected by the data breach is
publicly known. These pieces of information, together with the description of
services provided by the Applicant in the Contract, provides a ready benchmark
on which competitors could base future bids for data protection services with
the government.
[30]
While I agree with the
parties that the circumstances which led to the Contract were unique, I have
little doubt that the government will more than likely require similar data
protection services in the future. I am
satisfied that by disclosing the Contract price, there is a real, objective
risk that this information will give competitors a head start or “spring board”
in developing competitive bids against the Applicant for future contracts for
data protection services. This risk is greater than a mere possibility. An
exemption for non disclosure of the Contract price under section 20(1)(c) is
warranted
B.
T-1300-13
[31]
The Applicant notes several areas of disclosure
which would prejudice their competitive position:
a.
Location of the particular HRSDC office which
provides contracts at issue;
b.
The name and phone number of the HRSDC employee
who issues the contracts;
c.
Type of security access granted to the
Applicant;
d.
The products offered; and
e.
The total price of the contracts
[32]
Cumulatively, this information provides
instructions for the competition as to how to contact the relevant individuals
within HRSDC and determine the type of products the government agencies are
purchasing. It is argued that this would give competitors an advantage.
[33]
As with T-1003-13, the Applicant has argued that
disclosure of the Contract price could make future negotiations more
competitive. Based on the speculative nature of the evidence on this issue, I
find that the Applicant has not met the threshold for an exemption under
20(1)(d) (Canada Post at para 18).
[34]
While the Applicant’s argument that the
information contained in the disclosure might more easily facilitate the
attempted entry into the market for government services by a rival company has
some merit, I do not think it meets the threshold for an exemption under
20(1)(c).
[35]
With regard to the contact information for
individuals responsible with contracting at HRSDC, I am not satisfied that the
Applicant has satisfied its burden, given that, with some effort by an
interested competitor, appropriate contacts could be determined through the
government’s online directory and through other government sources designed to
facilitate business with government. Given that the Treasury Board Contracting
Policy encourages openness, competition and fairness, I am not persuaded on the
evidence before me that such information reasonably needs the cloak of
confidentiality in this business context.
[36]
Moreover, by its own admission, the Applicant currently
has no substantial competition for government contracts. While I agree that
TransUnion or another competitor could enter the market, the fact that no
competition currently exists makes the potential of a reasonable expectation of
probable harm relatively remote.
[37]
Lastly, pricing for specific components of the
contracts were redacted by HRSDC, while the total Contract price was disclosed.
As was described above with respect to T-1003-13, per-unit pricing was the
basis for the court applying the exception in 20(1)(c) of the Act in Aventis
Pasteur, not the total contract price. Consequently, Aventis Pasteur
would suggest that the pricing information at issue does not meet the threshold
in Merck.
[38]
Given the above, I am not convinced that the
totality of the information in this case meets the threshold for an exemption
pursuant to 20(1)(c) of the Act.
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