Annual Report: 2003-2004

1. How Much Was Repaid?

Background

In July 2000, a citizen asked Industry Canada to disclose information about the performance of the department’s Technology Partnerships Program. The program was established in 1996 to provide repayable contributions to small and medium-sized enterprises to encourage research, development, and innovation. The Technology Partnerships Program operates in a similar manner to the Atlantic Canada Opportunities Agency (ACOA), Western Economic Diversification (WED) and Canada Economic Development for Quebec Regions. The requester wanted to know, among other things (such as the distribution of contributions by political riding), how much of the $1.6 billion given by the program was actually repaid. The requester also made similar requests for repayment information to ACOA and WED.

The department agreed to disclose the total amount of repayments (as it turns out, less than two percent had been repaid in the five years since the program’s inception); however, in December 2000, it refused to provide a breakdown by individual firm. The government argued that disclosure of the repayment record of individual recipients could lead the public to make erroneous judgements about the financial or managerial competence of these firms. The requester, on the other hand, could not understand why loans had been given to large corporations such as Pratt & Whitney and Bombardier and she felt the public should know whether or not these firms had ever repaid the loans. The requester was also puzzled as to why ACOA and WED had no difficulty disclosing the company-specific repayment information which IC wished to keep secret.

As a result, in March 2001, the requester complained to the Information Commissioner about the matter.

Legal Issues

To justify its refusal to disclose the breakdown of repayments by individual company, Industry Canada relied upon paragraphs 20(1)(b) and (c) of the Access to Information Act. In particular, the department argued that the repayment information was confidential commercial, financial information provided by the companies to the department (paragraph 20(1)(b)). As well, it argued that the level of repayment could give competitors an insight into how close to being ready for market a new technology might be and, hence, be prejudicial to the recipient companies’ competitive positions (paragraph 20(1)(c)).

The commissioner rejected the paragraph 20(1)(b) argument for two reasons: first, the repayment information had not been "supplied" by third parties to the government. Rather, it was a tabulation from the department’s own accounts owing. Second, there was no evidence that the amount of repayment was confidential in nature. The mere assertion that information is confidential is insufficient to discharge the onus of justifying the paragraph 20(1)(b) exemption.

With respect to the paragraph 20(1)(c) argument, the commissioner insisted that the companies themselves give detailed explanations of how disclosure of their repayment records could reasonably be expected to result in competitive harm to them. Given that other federal contributions programs had released very similar information about many of the same firms, the commissioner was not prepared to accept the department’s assertions that disclosure could harm the companies that had received loans.

It was not until April 2002 that Industry Canada agreed to consult all third parties. All of the companies agreed to disclosure or did not take advantage of their right to take action in the Federal Court to resist disclosure. Consequently, in February 2003, Industry Canada disclosed to the requester the amounts repaid by each company in receipt of a contribution from the Technology Partnerships Program.

The requester, as might be expected, found the time excessively long between her initial request for information (July 2000) and the release of the information (February 2003). However, she expressed the view that the long process was worthwhile as a necessary reminder to government and those who receive government contributions that taxpayers expect and deserve transparency and accountability in the administration of funding programs.

Lessons Learned

The protections for commercially sensitive information contained in section 20 of the Act are both broad and mandatory. However, there is also a heavy onus on government institutions not to refuse disclosure under these sections based on mere assertions of commercial confidentiality or competitive harm from disclosure. Rather, there must be evidence of harm, at the level of a probability, and concrete evidence that the information in question is of a confidential nature. However, even when information is confidential in nature, it cannot be kept secret under paragraph 20(1)(b) unless a third party has supplied it to government. Where the information is compiled by government through inspections, audits or accounting materials, paragraph 20(1)(b) may not be invoked to justify a refusal to disclose requested records.

It is regrettable that the public interest override contained in subsection 20(6) is limited and does not authorize government to weigh the public interest in accountability and transparency of public expenditures against the competitive interests of third parties. This is an omission that Parliament should remedy by legislative amendment.