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FIPPA - Withholding Third Party Information

January 29, 2022

British Columbia

,

Canada

Issue

In what circumstances can a government body exclude information shared with it by a third party from disclosure under the British Columbia Freedom of Information and Protection of Privacy Act?

Conclusion

Section 21(1) of Freedom of Information and Protection of Privacy Act ("FIPPA") states that the head of a public body must refuse to disclose to an applicant information

(a) that would reveal

(i) trade secrets of a third party, or

(ii) commercial, financial, labour relations, scientific or technical information of or about a third party,

(b) that is supplied, implicitly or explicitly, in confidence, and

(c) the disclosure of which could reasonably be expected to

(i) harm significantly the competitive position or interfere significantly with the negotiating position of the third party,

(ii) result in similar information no longer being supplied to the public body when it is in the public interest that similar information continue to be supplied,

(iii) result in undue financial loss or gain to any person or organization, or

(iv) reveal information supplied to, or the report of, an arbitrator, mediator, labour relations officer or other person or body appointed to resolve or inquire into a labour relations dispute. (Freedom of Information and Protection of Privacy Act)

Section 21(1) of FIPPA creates a three-part test: s. 21(1)(a), (b) and (c). A public body is required to withhold third party information only if all three parts of the test have been met. (Financial Institutions Commission (Re))

The principles to be considered in applying s. 21(1) are well established and I will follow them in this case. In order to properly withhold information under s. 21(1), a public body must establish the following three elements:

- The information is a trade secret of a third party, or the commercial, financial, labour relations, scientific or technical information of or about a third party;

- The information was supplied to the public body in confidence; and

- Disclosure of the information could reasonably be expected to cause significant harm to the third party’s competitive position or the other types of harm as set out in s. 21(1)(c). (Grand Forks (City) (Re))

FIPPA does not define the terms “commercial” or “financial” information. Past orders have said that “commercial” information relates to commerce and the buying, selling or exchange of goods and services, and that the information does not need to be proprietary in nature or have an independent monetary or marketable value. The term also means information about money and its use or distribution. (Financial Institutions Commission (Re))

For s. 21(1)(b) to apply, the information must have been supplied, either implicitly or explicitly, in confidence. This is a two-part analysis. The first step is to determine whether the information was supplied to a public body. The second step is to determine whether the information was supplied “in confidence”. (Grand Forks (City) (Re))

For s. 21(1)(b) to apply, the supplied information must also have been supplied “implicitly or explicitly, in confidence.” To establish the element of confidentiality, it must be shown that information was supplied “under an objectively reasonable expectation of confidentiality, by the supplier of the information, at the time the information was provided.” (Financial Institutions Commission (Re))

The final step in the s. 21(1) test is to determine if disclosing the information, that meets the first two parts of the test, could reasonably be expected to cause one or more of the harms listed in s. 21(1)(c). The standard of proof for s. 21(1) and any other exception which uses the language “could reasonably be expected to harm” is a middle ground between that which is probable and that which is merely possible. The Supreme Court of Canada has said “The important objective of access to information would be thwarted by a mere possibility of harm standard. Exemption from disclosure should not be granted on the basis of fear of harm that is fanciful, imaginary or contrived.” To meet the standard, the party objecting to disclosure does not have to establish on the balance of probabilities that the harm will in fact occur but “something well beyond a mere possibility of harm must be shown.” The determination of whether the standard of proof has been met is contextual, and how much evidence and the quality of evidence needed to meet this standard will ultimately depend on the nature of the issue and “inherent probabilities or improbabilities or the seriousness of the allegations or consequences.” The evidence needs to establish “that there is a direct link between the disclosure and the apprehended harm and that the harm could reasonably be expected to ensue from disclosure.” (Financial Institutions Commission (Re))

In British Columbia (Technology, Innovation and Citizens’ Services) (Re), the Ministry of Technology, Innovation and Citizens’ Services refused a journalist access to attachments to its contract with a third party related to the Okanagan Correctional Centre on the basis that disclosure could reasonably be expected to harm the third party’s business interests. The IPC adjudicator found that the confidentiality agreement between the Ministry and the third party was relevant to establishing that the information had been supplied to the public body in confidence (s. 21(1)(b)). The adjudicator ultimately determined that the Ministry was required to withhold some of the information in dispute pursuant to s. 21(1).

In University of British Columbia, Coca-Cola Bottling Ltd., and other third parties, Re, the University of British Columbia ("UBC") received a media request for access to all records concerning its agreement with a third party ("Coca-Cola"). UBC refused to disclose certain responsive records pursuant to s. 21(1) of FIPPA. One such document (the "Cold Beverage Agreement"), which contained a confidentiality agreement, was in dispute. The confidentiality clause explicitly reflected the specific language of each of the three tests under s. 21 of FIPPA. Consequently, the IPC adjudicator agreed with UBC and Coca-Cola that disclosure of the records in dispute would reveal commercial, financial, or technical information of Coca-Cola, reveal information explicitly supplied in confidence, and could reasonably be expected to harm significantly Coca-Cola's competitive position or interfere significantly with its negotiation position, and could result in undue financial loss to Coca-Cola. The adjudicator upheld UBC's decision to withhold the Cold Beverage Agreement (and other records), with the exception of the identities of the signatories to the agreement.

In British Columbia (Advanced Education) (Re), a third party requested a review of three decisions made by the Ministry of Advanced Education to disclose information related to advertising work the third party did for the Ministry. The third party argued that disclosure could reasonably be expected to harm its business interests and the business interests of several other third parties. In part, the third party argued that s. 21(1)(b) was engaged because the information in dispute was subject to confidentiality agreements the third party had with its vendors. The third party did not provide the contracts and confidentiality agreements to which it referred to support its assertions that the information in dispute was supplied in confidence. The IPC adjudicator found that the information in dispute was not supplied, implicitly or explicitly, in confidence under s. 21(1)(b), and ultimately confirmed the Ministry’s decision that s. 21 did not apply to the information, and ordered the Ministry to disclose it to the applicant.

Law

Section 21 of the Freedom of Information and Protection of Privacy Act, RSBC 1996, c 165 ("FIPPA") governs when the government may refuse to disclose information because it will harm the business interests of a third party:

Disclosure harmful to business interests of a third party

21 (1) The head of a public body must refuse to disclose to an applicant information

(a) that would reveal

(i) trade secrets of a third party, or

(ii) commercial, financial, labour relations, scientific or technical information of or about a third party,

(b) that is supplied, implicitly or explicitly, in confidence, and

(c) the disclosure of which could reasonably be expected to

(i) harm significantly the competitive position or interfere significantly with the negotiating position of the third party,

(ii) result in similar information no longer being supplied to the public body when it is in the public interest that similar information continue to be supplied,

(iii) result in undue financial loss or gain to any person or organization, or

(iv) reveal information supplied to, or the report of, an arbitrator, mediator, labour relations officer or other person or body appointed to resolve or inquire into a labour relations dispute.

(2) The head of a public body must refuse to disclose to an applicant information that was obtained on a tax return or gathered for the purpose of determining tax liability or collecting a tax.

(3) Subsections (1) and (2) do not apply if

(a) the third party consents to the disclosure, or

(b) the information is in a record that is in the custody or under the control of the digital archives or museum archives of government or the archives of a public body and that has been in existence for 50 or more years.

In Grand Forks (City) (Re), 2016 BCIPC 34 (CanLII), the British Columbia Information and Privacy Commission ("IPC") set out the test under s. 21(1) of FIPPA as follows:

[10] The principles to be considered in applying s. 21(1) are well established and I will follow them in this case.[4] In order to properly withhold information under s. 21(1), a public body must establish the following three elements:

- The information is a trade secret of a third party, or the commercial, financial, labour relations, scientific or technical information of or about a third party;

- The information was supplied to the public body in confidence; and

- Disclosure of the information could reasonably be expected to cause significant harm to the third party’s competitive position or the other types of harm as set out in s. 21(1)(c).

[...]

[15] For s. 21(1)(b) to apply, the information must have been supplied, either implicitly or explicitly, in confidence. This is a two-part analysis. The first step is to determine whether the information was supplied to a public body. The second step is to determine whether the information was supplied “in confidence”.

[...]

[19] Previous BC orders have stated that information contained in an agreement negotiated between a public body and a third party will not normally qualify as information that has been “supplied” to the public body.[9] They have also said that the fact that a term from a proposal is incorporated unchanged in a contract does not mean that the contract term is “supplied” information as opposed to “negotiated” information. For instance, former Commissioner Loukidelis said in Order 03-15:

It would hardly be surprising that terms in a contract arrived at resemble, or are even the same as, terms in the contractor’s proposal. It might well be more unusual for the contract arrived to be completely out of step with the terms of the contractor’s proposal. A successful proponent on an RFP may have some or all of the terms of its proposal incorporated into a contract. As has been said in past orders, there is no inconsistency in concluding that those terms have been “negotiated” since their presence in the contract signifies that the other party agreed to them.[10]

[20] There are two circumstances, however, where information in an agreement may be supplied, rather than negotiated information. Delegate Iyer explained those two circumstances as follows in Order 01-39:

Information that might otherwise be considered negotiated nonetheless may be supplied in at least two circumstances. First, the information will be found to be supplied if it is relatively “immutable” or not susceptible of change. For example, if a third party has certain fixed costs (such as overhead or labour costs already set out in a collective agreement) that determine a floor for a financial term in the contract, the information setting out the overhead cost may be found to be “supplied” within the meaning of s. 21(1)(b)…

…The intention of s. 21(1)(b) is to protect information of the third party that is not susceptible of change in the negotiation process, not information that was susceptible of change but, fortuitously, was not changed…

The second situation in which otherwise negotiated information may be found to be supplied is where its disclosure would allow a reasonably informed observer to draw accurate inferences about underlying confidential information that was “supplied” by the third party, that is, about information not expressly contained in the contract…[the public body] must point to specific evidence showing what accurate inferences could be drawn from which contractual terms about what underlying confidentially supplied information. Moreover, as discussed below, where information originally supplied in a bid proposal is simply accepted by the other party and incorporated into a contract, the mere fact that disclosure of the contract will allow readers to learn the terms of the original bid will not shield the contract from disclosure.[11]

[...]

[29] The next step in the s. 21 analysis is to determine whether the immutable information was supplied implicitly or explicitly in confidence. This test for “in confidence” is objective and the question is one of fact. Evidence of the third party’s subjective intentions with respect to confidentiality alone is not sufficient.[17]

[...]

[35] It is only necessary for me to consider whether disclosure of information that was supplied in confidence (i.e., the immutable information) could reasonably be expected to result in harm under s. 21(1)(c).

[36] While the City does not need to show on a balance of probabilities that the harm will occur if the information is disclosed, it must nonetheless do more than show that such harm is merely possible. The Supreme Court of Canada in Ontario (Community Safety and Correctional Services) v. Ontario (Information and Privacy Commissioner)[22] said the following about the standard of proof for exceptions that use the language “reasonably be expected to harm” and the type of evidence required to meet that standard:

This Court in Merck Frosst adopted the “reasonable expectation of probable harm” formulation and it should be used wherever the “could reasonably be expected to” language is used in access to information statutes. As the Court in Merck Frosst emphasized, the statute tries to mark out a middle ground between that which is probable and that which is merely possible. An institution must provide evidence “well beyond” or “considerably above” a mere possibility of harm in order to reach that middle ground… This inquiry of course is contextual and how much evidence and the quality of evidence needed to meet this standard will ultimately depend on the nature of the issue and “inherent probabilities or improbabilities or the seriousness of the allegations or consequences”: Merck Frosst, at para. 94, citing F.H. v. McDougall, 2008 SCC 53 (CanLII), [2008] 3 S.C.R. 41, at para. 40.

[37] Further, in British Columbia (Minister of Citizens’ Services) v. British Columbia (Information and Privacy Commissioner),[23] Bracken, J. confirmed that it is the release of the information itself that must give rise to a reasonable expectation of harm and that the burden rests with the public body to establish that the disclosure of the information in question could result in the identified harm.

In Financial Institutions Commission (Re), 2019 BCIPC 44 (CanLII), the IPC recently set out the relevant principles to s. 21 of FIPPA:

[50] Section 21(1) creates a three-part test: s. 21(1)(a), (b) and (c). A public body is required to withhold third party information only if all three parts of the test have been met.[45]

[...]

[55] FIPPA does not define the terms “commercial” or “financial” information. Past orders have said that “commercial” information relates to commerce and the buying, selling or exchange of goods and services, and that the information does not need to be proprietary in nature or have an independent monetary or marketable value.[49] I have also considered what prior orders have said about financial information and conclude that the term means information about money and its use or distribution.[50]

[...]

[57] In order for the second part of the test to be met, the information must have been supplied, either implicitly or explicitly, in confidence. This is a two-part analysis. The first step is to determine whether the information was supplied to a public body. The second step is to determine whether the information was supplied “in confidence.” Below, I find that with only a few exceptions, the information was supplied, implicitly or explicitly, in confidence to FICOM.

[...]

[68] For s. 21(1)(b) to apply, the supplied information must also have been supplied “implicitly or explicitly, in confidence.” To establish the element of confidentiality, it must be shown that information was supplied “under an objectively reasonable expectation of confidentiality, by the supplier of the information, at the time the information was provided.” [65] Some of the records contain express statements of confidentiality. Based on those express statements, I find the information in dispute in those records was supplied in confidence. VC and JG’s evidence regarding the nature of FICOM’s supervisory and regulatory relationship with Coast Capital persuades me that the balance of the supplied information was supplied with the implied understanding that it would be held in confidence.

[...]

[70] The final step in the s. 21(1) test is to determine if disclosing the information, that meets the first two parts of the test, could reasonably be expected to cause one or more of the harms listed in s. 21(1)(c).

[71] The standard of proof for s. 21(1) and any other exception which uses the language “could reasonably be expected to harm” is a middle ground between that which is probable and that which is merely possible. The Supreme Court of Canada has said “The important objective of access to information would be thwarted by a mere possibility of harm standard. Exemption from disclosure should not be granted on the basis of fear of harm that is fanciful, imaginary or contrived.”[69] To meet the standard, the party objecting to disclosure does not have to establish on the balance of probabilities that the harm will in fact occur but “something well beyond a mere possibility of harm must be shown.”[70]

[72] The determination of whether the standard of proof has been met is contextual, and how much evidence and the quality of evidence needed to meet this standard will ultimately depend on the nature of the issue and “inherent probabilities or improbabilities or the seriousness of the allegations or consequences.”[71] The evidence needs to establish “that there is a direct link between the disclosure and the apprehended harm and that the harm could reasonably be expected to ensue from disclosure.”[72]

[...]

[106] Previous OIPC orders have established that s. 21(1)(c)(ii) does not apply where there is a statutory or contractual compulsion for a third party to provide similar information (or the prospect of compulsion exists) or where there is a financial or other incentive for doing so.[105] Coast Capital was evidently motivated by self-interest as well as statutory and regulatory requirements to supply information to FICOM as part of the s. 15.2 application. I am not persuaded by what the parties say that it would be different for any other credit union subject to FICOM’s regulatory oversight or approval processes. Therefore, I find that s. 21(1)(c)(ii) does not apply to the remainder of the s. 21 information.

In British Columbia (Technology, Innovation and Citizens’ Services) (Re), 2018 BCIPC 42 (CanLII), the Ministry of Technology, Innovation and Citizens’ Services refused a journalist access to attachments to its contract with a third party related to the Okanagan Correctional Centre on the basis that disclosure could reasonably be expected to harm the third party’s business interests. The IPC adjudicator found that the confidentiality agreement between the Ministry and the third party was relevant to establishing that the information had been supplied to the public body in confidence (s. 21(1)(b)). The adjudicator ultimately determined that the Ministry was required to withhold some of the information in dispute pursuant to s. 21(1):

Supplied in Confidence

[53] The next step in the s. 21(1) analysis is to determine whether the template information in Tabs 1 through 17 and 26, which I have concluded was supplied, was supplied “implicitly or explicitly, in confidence”. To establish confidentiality of supply, it must be shown the information was supplied “under an objectively reasonable expectation of confidentiality, by the supplier of the information, at the time the information was provided.”[55] Evidence of the supplier’s subjective intentions with respect to confidentiality alone is insufficient.[56]

[54] The Ministry submits that it received the information in dispute implicitly and explicitly in confidence and that Plenary expected the information would be kept confidential.[57] It also referred me to sections of the RFP guidelines relating to confidentiality as well as the disclaimer on the cover page of Schedule 15, which specified that the financial model was the property of the third party and not to be re-produced or used for purposes other than the financial analysis of the OCC project.[58]

[55] Plenary says that the information in dispute was “provided to the Ministry on the understanding that it would be kept confidential.”[59]

[56] The applicant says that Plenary was aware it was bidding on a contract offered by a public body and therefore should have expected that the contract would be subject to FIPPA and open to scrutiny by the members of the public.[60]

[57] Plenary responded to the applicant’s submission, stating that s. 21(1) of FIPPA protects against the disclosure of some information and therefore the fact that FIPPA applies to the Contract does not necessarily mean that the information in dispute would be disclosed.[61] It further said that it had an expectation of confidentiality due to the “numerous confidentiality clauses in the RFP and the Contract (including on the cover page of the Financial Model).”[62]

[58] I do not accept the applicant’s argument that Plenary could have had no expectation of confidentiality because it was bidding on a project with a public body subject to FIPPA. FIPPA has a number of exceptions to disclosure that, in specific contexts, protect information provided to a public body in confidence. Previous orders have determined that s. 21(1) can apply to information in a contract and it must not be disclosed.[63] As such, it is not automatically the case that Plenary could have had no reasonable expectation of confidentiality.

[59] I have reviewed the confidentiality clauses in the RFP and the disclaimer on Tab 1 of Schedule 15 and agree that this evidence supports the Ministry and Plenary’s submissions that the information in dispute was provided to the Ministry on the express understanding that it would be kept confidential.

[60] I also note that the Ministry provided evidence that the RFP evaluators for the OCC project were advised that “one of the guiding principles in the RFP evaluation process was confidentiality,” that they were required to sign a confidentiality agreement before viewing the proponents’ materials and that Schedule 15 is stored in a server with controlled access and remains confidential.[64]

[61] I am satisfied, on the basis of the evidence outlined above, that there was a mutuality of understanding between the Ministry and Plenary that the information in Schedule 15 was supplied by Plenary to the Ministry in confidence. As such, I find that the template information on Tabs 1 through 17 and 26, was supplied in confidence pursuant to s. 21(1)(b) of FIPPA.

[62] I will now consider whether disclosing the template information in Schedule 15 could reasonably be expected to result in harm to a third party.

In University of British Columbia, Coca-Cola Bottling Ltd., and other third parties, Re, 1996 CanLII 2805 (BC IPC), the University of British Columbia ("UBC") received a media request for access to all records concerning its agreement with a third party ("Coca-Cola"). UBC refused to disclose certain responsive records pursuant to s. 21(1) of FIPPA. One such document (the "Cold Beverage Agreement"), which contained a confidentiality agreement, was in dispute. The confidentiality clause explicitly reflected the specific language of each of the three tests under s. 21 of FIPPA. Consequently, the IPC adjudicator agreed with UBC and Coca-Cola that disclosure of the records in dispute would reveal commercial, financial, or technical information of Coca-Cola, reveal information explicitly supplied in confidence, and could reasonably be expected to harm significantly Coca-Cola's competitive position or interfere significantly with its negotiation position, and could result in undue financial loss to Coca-Cola. The adjudicator upheld UBC's decision to withhold the Cold Beverage Agreement (and other records), with the exception of the identities of the signatories to the agreement:

Section 21: The confidentiality agreement in the Cold Beverage Agreement

UBC and Coca-Cola provided me with extensive affidavit evidence to the effect that disclosure of the records in dispute would harm their respective financial or economic interests. Under section 21, only the interests of Coca-Cola are relevant; those of UBC were considered under section 17. I have reviewed these affidavits carefully and the attached submissions, each of which has been made available to the applicant. (See Submission of UBC and Coca-Cola, paragraphs 3.1-3.18, 7.1-7.38, and the accompanying affidavits) I found this evidence very persuasive. I am also not in a position to reveal information disclosed to me in three in camera affidavits that supplemented the open affidavits of the Vice-president for External Affairs of UBC, the General Sales Manager for Coca-Cola in British Columbia, and the President of Spectrum Marketing, a consultant to UBC.

In general, Coca-Cola argues that disclosure of its information in the records in dispute “would confer an unwarranted advantage on Coca-Cola’s competitors in the intensely competitive soft drink industry,” give them possession of a valuable document about how to structure a sophisticated sponsorship transaction and, further, give them access to the financial considerations affecting the final agreement. Disclosure would also interfere significantly with Coca-Cola’s negotiating position with other third parties for comparable agreements. (Submission of UBC and Coca-Cola, paragraphs 3.13-3.17)

The most important and relevant point that can be made is that the confidentiality clause in the Cold Beverage Agreement, which I have had an opportunity to review on an in camera basis, and the contents of the record in dispute, explicitly reflect the specific language of each of the three tests under section 21 of the Act. These are exactly the tests that Coca-Cola, or any other third party, must establish in order to create a mandatory exemption whereby UBC, or any other public body under the Act, “must refuse” to disclose information harmful to the business interests of a third party.

This is the first time that I have reviewed a contract explicitly designed to establish, up front, the terms and conditions for compliance with section 21(1), which I have called for in other Orders. (See Order No. 11-1994, June 16, 1994, p.12; Order No. 21-1994, August 15, 1994, p. 6; and Order No. 19-1994, July 26, 1994, p. 4)

I find the UBC arguments and evidence on section 21 persuasive. Therefore, I agree with the submission of UBC and Coca-Cola that disclosure of the records in dispute would reveal commercial, financial, or technical information of Coca-Cola, reveal information explicitly supplied in confidence, could reasonably be expected to harm significantly Coca-Cola’s competitive position or interfere significantly with its negotiating position, and could result in undue financial loss to Coca-Cola. (Submission of UBC and Coca-Cola, paragraphs 7.1-7.38) However, I am not persuaded that either section 21 or section 17 can be applied to the signatories to the contract.

9. Order

Under section 58(2)(b) of the Act, I confirm the decision of the University of British Columbia not to release the records to the applicant with the exception of the signatories to the contract.

In British Columbia (Advanced Education) (Re), 2016 BCIPC 43 (CanLII), a third party requested a review of three decisions made by t

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