T-1024-85
Piller Sausages & Delicatessens Limited (Appli-
cant)
v.
Minister of Agriculture (Respondent)
and
Information Commissioner of Canada and Jim
Romahn (Party Intervenants)
INDEXED AS: PILLER SAUSAGES & DELICATESSENS LTD. v.
CANADA (MINISTER OF AGRICULTURE)
Trial Division, Jerome A.C.J.—Toronto, Septem-
ber 8, 9, 10; Ottawa, December 11, 1987.
Access to information — S. 44 application to prevent disclo
sure of meat inspection team audit reports of meat packaging
plants in Kitchener-Waterloo for 1983 to newspaper reporter
— Reports of annual audits performed in addition to daily
inspections — Applicant relying on s. 20(1)(c) and (d) to
prevent disclosure — Applications dismissed — Evidence of
harm under s. 20(1)(c) and (d) must show direct causation
between disclosure and harm — American cases, combining
tests in s. 20(1)(b) and (c), by combining "class" test and
"injury" test in one exemption, not applicable — Evidence of
likelihood of substantial injury required — Disclosure of
reports not reasonably expected to result in material financial
loss, prejudice competition or interfere with contractual
negotiations — Daily inspections chief source of public infor
mation and protection — Consumers unlikely to ignore daily
inspections, generally high rating given plants, departmental
letter accompanying report setting out limitations of report,
date of report, and steps taken to correct deficiencies —
Reasonable importer unlikely to rely on reports in face of
assurances provided by inspection system — No evidence
foreign governments using information to erect non-tariff bar
riers against Canadian meat products — Unlikely such dated
information about minor deficiencies seriously jeopardizing
current negotiations — Release of reports not jeopardizing
collection of data by federal inspectors as inspection statutory
requirement — Public interest in disclosure outweighing risk
of harm to applicant.
This is one of fourteen applications under section 44 of the
Access to Information Act to prevent disclosure of meat inspec
tion team audit reports prepared by the Department of Agricul-
ture. The reports are the result of annual or semi-annual audits
by federal meat inspectors and are in addition to the daily
on-site inspections. The reports are working documents and do
not reveal trade secrets. They are designed to underline prob
lem areas in order to initiate corrective action. In addition, a
meat packing and slaughtering plant receives an overall rating.
A newspaper reporter filed a request under the Act for the
reports on plants in the Kitchener-Waterloo area in 1983. He
was advised that certain information would be deleted under
paragraphs 20(1)(b) and (c). In response to his subsequent
complaint, under subsection 30(1), the Information Commis
sioner recommended disclosure. The applicant relied upon
paragraphs 20(1)(c) and (d) which provide that any record that
contains information, the disclosure of which could reasonably
be expected to result in material financial loss to a third party,
or to interfere with contractual negotiations of a third party,
shall not be disclosed. It argued that the information was
negative and inadequate, and that consumers would likely buy
a competitor's product, or switch to a substitute product,
resulting in financial loss. The applicant was also concerned
that disclosure of this information might adversely affect cer
tain contract negotiations with a foreign company in which it
was engaged. Finally, the applicant argued against disclosure
under subsection 20(6) (which permits disclosure if the public
interest outweighs the financial loss to a third party) on the
ground that public knowledge would not be increased by the
inadequate report, and that communication between meat
inspection auditors and the meat packing companies would be
endangered by public release of the reports, resulting in dimi
nution of public knowledge.
Held, the application to resist disclosure should be dismissed.
Evidence of harm under paragraphs 20(1)(c) and (d) must
be detailed, convincing and describe a direct causation between
disclosure and harm. It must not merely provide grounds for
speculation as to possible harm: Sawridge Indian Band v.
Canada (Minister of Indian Affairs and Northern Develop
ment). A high standard of proof is required to establish an
exemption from disclosure on grounds of financial harm or
contractual interference: Re Daigle.
American case law should not be relied upon to interpret the
Canadian statute. The American interpretation combines the
tests set out in paragraphs 20(1)(b) and (c) of the Canadian
Act by combining a "class" test and an "injury" test in one
exemption. When considering paragraph 20(1)(c) of the
Canadian statute, the test is one of reasonably expected finan
cial or competitive harm, regardless of whether the information
disclosed is confidential per se. The standard for refusing to
disclose must be established with specific reference to the
Canadian Act.
The American cases do contain some useful statements about
the standard of proof. The American test depends upon "evi-
dence revealing actual competition and the likelihood of sub
stantial competitive injury". Actual competitive harm from the
disclosure of documents not yet released is impossible to show
and is not required. Conclusory and generalized allegations of
harm are unacceptable. The evidence must not require pure
speculation, but must at least establish a likelihood of substan
tial injury. This also seems to be the test incorporated in
paragraphs 20(1)(c) and (d) in the wording "could reasonably
be expected to". The expectation must be reasonable, but it
need not be a certainty.
The evidence does not establish that the disclosure of infor
mation could reasonably be expected to result in material
financial loss to a third party, prejudice the competitive posi
tion of a third party, or interfere with the contractual or other
negotiations of a third party. The inspections forming the basis
of the audit reports are separate from and in addition to the
daily inspections which result in the affixing of the legend
attesting to the product having satisfied the high standards of
purity and cleanliness set out in the Meat Inspection Act and
Regulations. It is this latter process which informs and protects
the public in its day-to-day purchase of meat. The reports
reflect a periodic audit of that process, concentrating on the
physical condition of the plant and its general operation. It is
unlikely that the consumer will ignore the assurances of the
daily inspections, the generally high overall rating given these
plants, the accompanying letter from the Department setting
out the reports' limitations, the fact that the reports are more
than three years old and the steps taken to correct any
deficiencies.
For the same reasons, a reasonable importer would not rely
on the information contained in these reports in the face of the
assurances provided by daily meat inspections. In the absence
of evidence supporting the allegation that foreign governments
will use this information to erect non-tariff barriers against
Canadian meat products, there is no real risk to the financial or
competitive position of the applicant. The applicant's apprehen
sion of sensational news coverage was not supported by the
evidence. It is inconceivable that such dated information about
minor deficiencies in the applicant's facilities would seriously
jeopardize current negotiations.
There was no evidence that release of these reports will
jeopardize the collection of data by government inspectors. The
quality of the information gathered does not depend on an
atmosphere of cooperation, as the reports are the products of a
statutory inspection process.
Any doubt in a case under the Access to Information Act
must be resolved in favour of disclosure. The inspections which
produced these reports were undertaken by public authorities,
involved the expenditure of public funds and were made to
protect the public. The resulting reports are by their very
nature public information. The material does not come within
paragraph 20(1)(c) or (d), but in any case, the public interest
in disclosure outweighs any risk of harm to the applicant, and
the reports should be released under subsection 20(6).
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Access to Information Act, S.C. 1980-81-82-83, c. 111,
Schedule I, ss. 20(1)(b),(c),(d),(6), 44.
Freedom of Information Act, 5 U.S.C. § 552 (1970).
Meat Inspection Act, S.C. 1985, c. 17.
Right to Information Act, S.N.B. 1978, c. R-10.3, s. 6.
CASES JUDICIALLY CONSIDERED
APPLIED:
Sawridge Indian Band v. Canada (Minister of Indian
Affairs and Northern Development) (1987), 10 F.T.R. 48
(T.D.); Re Daigle (1980), 30 N.B.R. (2d) 209 (Q.B.).
CONSIDERED:
National Parks and Conservation Ass'n v. Morton, 498
F.2d 765 (D.C. Cir. 1974); National Parks and Conser
vation Ass'n v. Kleppe, 547 F.2d 673 (D.C. Cir. 1976);
Public Citizen Health Research Group v. Food and Drug
Admin., 704 F.2d 1280 (D.C. Cir. 1983).
REFERRED TO:
Maislin Industries Limited v. Minister for Industry,
Trade and Commerce, [1984] 1 F.C. 939 (T.D.); DMR
& Associates v. Minister of Supply and Services (1984),
11 C.P.R. (3d) 87 (F.C.T.D.); Canada (Information
Commissioner) v. Canada (Minister of Employment and
Immigration), [1986] 3 F.C. 63; 11 C.P.R. (3d) 81
(T.D.).
COUNSEL:
Ronald E. Mark for applicant Piller Sausages
& Delicatessens Limited.
P. L. Seitz for applicant J. M. Schneider Inc.
Colin L. Campbell, Q.C. for applicants
Canada Packers Inc., F. W. Fearman Com
pany Limited, Toronto Abattoirs Limited and
Oscar Mayer Foods Corporation.
John J. Chapman for applicants Gainers Inc.
and Burns Meats Ltd.
Robert H. McKercher, Q.C. for applicant
Intercontinental Packers Limited.
Gary A. Maavara for applicant IBP Inc.
G. N. Sparrow for respondent Minister of
Agriculture.
Hilde M. English for intervenant (requestor)
Jim Romahn in T-1024-85, T-1025-85,
T-1456-85, T-1471-85, T-1491-85, T-1506-85
and T-2338-86.
Michael L. Phelan for intervenant Informa
tion Commissioner of Canada in T-1024-85,
T-1025-85 and T-1026-85.
APPEARANCE:
Ken Rubin on his own behalf as intervenant
(requestor) in T-1118-85, T-1119-85,
T-1131-85, T-1140-85, T-1253-85,
T-1291-85.
SOLICITORS:
Sutherland, Hagarty, Mark & Somerville,
Kitchener, Ontario, for applicant Piller Sau
sages & Delicatessens Limited.
Mackay, Artindale, Wunder, Kitchener,
Ontario, for applicant J. M. Schneider Inc.
McCarthy and McCarthy, Toronto, for appli
cants Canada Packers Inc., F. W. Fearman
Company Limited, Toronto Abattoirs Limited
and Oscar Mayer Foods Corporation.
Miller, Thompson, Sedgewick, Ferris &
Healy, Toronto, for applicants Gainers Inc.
and Burns Meats Ltd.
McKercher, McKercher, Stack, Korchin &
Laing, Saskatoon, Saskatchewan, for appli
cant Intercontinental Packers Limited.
Borden & Elliott, Toronto, for applicant IBP
Inc.
Deputy Attorney General of Canada for
respondent Minister of Agriculture.
Haney, White, Ostner, English & Linton,
Waterloo, Ontario for intervenant (requestor)
Jim Romahn in T-1024-85, T-1025-85,
T-1456-85, T-1471-85, T-1491-85, T-1506-85
and T-2338-86.
Osler, Hoskin & Harcourt, Ottawa, for
intervenant Information Commissioner of
Canada in T-1024-85, T-1025-85 and
T-1026-85.
INTERVENANT ON HIS OWN BEHALF:
Ken Rubin as intervenant (requestor) in
T-1118-85, T-1119-85, T-1131-85,
T-1140-85, T-1253-85, T-1291-85.
The following are the reasons for order ren
dered in English by
JEROME A.C.J.: This is one of fourteen applica
tions under section 44 of the Access to Informa
tion Act [S.C. 1980-81-82-83, c. 111, Schedule I]
which came on for hearing before me on Septem-
ber 8, 1987 in Toronto, Ontario. While the specific
facts of each application vary slightly, the princi
ples involved are the same. These reasons, with
minor variations, will also apply, therefore, to the
Federal Court files numbered T-2338-86,
T-1291-85, T-1131-85, T-1140-85, T-1506-85,
T-1025-85, T-1471-85, T-1026-85, T-1118-85,
T-1119-85, T-1253-85, T-1456-85 and T-1491-85.
A—BACKGROUND
In these applications, ten of the meat packing
and slaughtering companies which operate in
Canada seek to prevent the disclosure under the
Access to Information Act of meat inspection team
audit reports prepared by the federal Department
of Agriculture. The reports in question were prod
ucts of the federal meat inspection system, which
was the subject of very extensive affidavit evidence
on behalf of all parties. A description of that
system will be necessary here, and the affidavit of
David Adams, General Manager of the Canadian
Meat Council contains the following overview:
5. The federal meat inspection system, as it presently operates,
commenced in the early 1900's. The federal meat inspection
system was developed to ensure the highest standards of
hygiene in the production of Canadian meat products. Initially,
the purpose of the inspection was to facilitate the export of
Canadian meat products to foreign markets.
6. Over the years, Canadian meat products from federally
inspected plants have been accepted for export in accordance
with the health and sanitary standards of more countries than
the meat products of any other nation. The Canadian inspec
tion system is acknowledged to have the highest standards and
to provide the broadest export market for Canadian meat
products. This system has ensured and maintained the highest
standards of hygiene in the meat products industry. This is
essential because the world market is very competitive at the
present time.
7. The management of the meat inspection system has recog
nized the highly competitive international market and the
increased competition in the domestic market not only from
imported meats but also from other high protein foods. The
federal meat inspection system utilizes resident on-site federal
government inspectors, regional supervisors and headquarters
inspectors from Ottawa.
8. In the largest plants there may be as many as 30 or more
resident on-site federal meat inspectors who continually moni
tor and approve all meat products on a day-to-day basis. Their
work in turn is reviewed by regional supervisors who perform
monthly supervisory audits of the various plants in their juris
diction to ensure consistency of application of federal meat
products standards.
9. Finally, federal meat inspectors from headquarters in
Ottawa perform annual and for large volume exporting plants
semi-annual or quarterly audit inspections to ensure consistency
throughout all of the meat processing and slaughtering plants
in Canada.
It should be noted that the daily, on-site inspec
tors referred to by Mr. Adams have considerable
power under the Meat Inspection Act, S.C. 1985,
c. 17. They control the use of the inspection legend
indicating approval for human food, without which
the product may not be marketed or exported.
Similarly, if at any time an inspector discovers
that the plant's operations are not in conformity
with national standards, he may seize and detain
any meat product at his discretion. Their work and
the general condition of the plant are subject to an
annual or semi-annual audit conducted by the
Meat Hygiene division of the Department's
Ottawa headquarters. Ms. Kristine Stolarik,
Acting Head of the Access to Information and
Privacy Unit of Agriculture Canada, described the
audit process in more detail in her affidavit:
2. National Veterinary Auditors employed in the Meat
Hygiene Division, Food Production and Inspection Branch of
the Department of Agriculture Canada ("Agriculture Cana-
da") review meat slaughter and processing plants at least once
a year. The review is completed in the form of a visit to the
establishment.
3. The review of a slaughter establishment is usually started at
the finished product area and progresses from the shipping
dock, through the packaging, processing, boning, cut-up, cool
ers, kill floor and livestock areas.
4. At the end of the physical review of the facility, a meeting is
held with plant management at the establishment to discuss the
deficiencies encountered during the review, any action required
and commitments from plant management in respect of correc
tive action.
5. After the review and discussion, the National Veterinary
Auditor makes an audit report entitled "Inspection Report" in
respect of the particular establishment copies of which are
given to plant management, the Regional Office of Agriculture
Canada and to the Audit Chief in the Meat Hygiene Division,
Food Production and Inspection Branch of Agriculture,
Canada.
6. No unique processes, or trade secrets are revealed in the said
Inspection Reports. The Inspection Report is a working docu
ment for Agriculture Canada and is a necessary tool in the
national meat inspection system. The Inspection Report,
because it is designed to underline problem areas at an estab
lishment in order to initiate corrective action, does not typically
list or detail favourable information about the facilities and
operations at that establishment. The focus of this working
document is a determination of either "acceptable" or "unac-
ceptable" conditions.
The audit team usually includes a "Foreign
Review Officer" which, in the case of plants which
export to the United States, is a member of the
U.S. Department of Agriculture. The FRO accom
panies the National Veterinary Auditors, asks his
own questions and observes the inspection. After
the audit he prepares a report of each establish
ment which is sent to Washington. His report
contains much of the same information as the
Canadian reports and rates the plant as "satisfac-
tory" or "unsatisfactory" by Canadian standards.
(Meat Hygiene Manual, Agriculture Canada,
April, 1982, pages 1-10.)
In addition to an "acceptable" or "unaccept-
able" indication in each of the inspected areas, the
Canadian audit reports also give an overall rating
to each establishment in one of the following
categories:
A — Excellent
B — Good
C — Satisfactory (meeting only minimum
standards)
D — Critical
F — Failed
(Meat Hygiene Manual, ibid, pages 1-12)
It is important to note that the audit reports
reflect an examination of the physical plant, the
slaughter and packing operations and the inspec
tion process. The audit may involve a close inspec
tion of a small sample of meat products at various
stages, but it plays no part in the approval process
related to the products themselves. That falls
entirely to the daily on-site personnel.
B—FACTS GIVING RISE TO THIS APPLICATION
On June 20, 1983, Jim Romahn, a reporter from
the Kitchener-Waterloo Record filed a request
under the Access to Information Act for "Canadi-
an meat inspection team audit reports on plants in
this area so far in 1983". He listed several firms by
name, including Piller Sausages and Delicatessens
Ltd. of Waterloo and two of the other applicants
involved here. The applicants were advised of this
request by the Department of Agriculture on July
26, 1983 pursuant to section 28 of the Act. Piller
Sausages and the other two named applicants filed
objections to the release of the reports. In Novem-
ber, 1983 the requestor was advised by the Depart
ment that the records would be disclosed but that
information described in paragraphs 20(1) (b),(c)
and (d) of the Act would be deleted. (The exemp
tion under paragraph 20(1)(d) was later with
drawn.) In January, 1984 the requestor filed a
complaint under subsection 30(1) to the Informa
tion Commissioner. An investigation resulted and
on March 25, 1985 the Commissioner sent the
following report to the Minister of Agriculture:
The investigation of Mr. Romahn's complaint by our office did
not disclose sufficient reason to support the refusal to release
the meat inspection reports in their entirety. Objections to the
release of information exempted under paragraph 20(1)(c) of
the Act must, in my opinion, show a reasonable expectation of
a defined injury to the third parties on such disclosure. In
accordance with the Act, all firms that made representations to
your department in 1983 were invited to make representations
to this office in late June 1984.
The representations from some of the meat-packing firms
emphasized that deficiencies recorded by the inspectors were
minor, but without explanation, such remarks could give the
public the false impression that plant conditions or processing
were generally substandard, leading to a decline in the demand
for products from those firms. I have noted this and other
concerns voiced in the representations from the third parties
and your department, and am not convinced that disclosure of
the information refused under paragraph 20(1)(c) of the Act
could reasonably be expected to result in material loss or gain
to, or prejudice the competitive position of third parties. These
representations have not included any persuasive examples of
the injuries contemplated by the exempting paragraph.
I note that before 1981, unedited copies of meat inspection
reports were available on request from your department, but no
evidence of the injury contemplated under paragraphs (b), (c)
and (d) has been provided to me. As well, while reports
prepared by Canadian and U.S. meat inspectors filed in Wash-
ington have been released by the U.S. Department of Agricul
ture under their Freedom of Information Act since 1972, the
United States Department of Agriculture officials are not
aware of any firms in the North American meat industry that
have suffered business losses as a result of these disclosures.
I would also draw to your attention, the provision of subsection
20(6) of the Act, wherein the head of the government institu
tion may disclose any record containing information described
in paragraphs 20(1)(b), (c) and (d), if such disclosure would be
in the interest of public health, and if the public interest in
disclosure clearly outweighs in importance any financial loss or
gain to, or prejudice to the competitive position of a third party.
Since the mandate for your meat inspection personnel states, in
part, "to provide consumers with sound, safe, wholesome, cor
rectly labelled meat products .... ", a concern for public health
appears to be the purpose of the inspections. The exempted
comments by the meat inspectors relate to non-compliance with
sanitary or processing standards in the plants and disclosure of
information, which reflects non-compliance with the depart
mental requirements would allow the public, on whose behalf
the department acts, to be properly informed on those packing
plants not adhering to the appropriate standards. Furthermore,
officials may wish to make explanatory remarks when releasing
the records.
In conclusion, I do not consider the justifications which have
been provided for the exemptions claimed in respect of Mr.
Romahn's request for access to be valid, and in accordance with
subsection 37(1) of the Access to Information Act, I therefore
recommend that disclosure of information relating to inspection
comments be made in accordance with the Act on or before
April 15, 1985, or that you give me notice of any action taken
or proposed to be taken to implement this recommendation or
provide reasons why no such action has been or is proposed to
be taken.
In compliance with this recommendation and
section 28 of the Act, the Department notified the
applicants on April 22, 1985 that the audit reports
would be released in their entirety, with the excep
tion of the deletions under paragraph 20(1)(b).
The applicants responded by issuing notices of
applications to review that decision under section
44. On May 27, 1985 all the reports requested
were released to the requestor, with the remaining
deletions, except those concerning the three com
panies who had filed applications for review. The
Department included a covering letter which
explained the nature of the audit reports and the
concerns expressed by the meat packing compa
nies. It stated in part:
Many of the third parties have expressed concern that the
inspection reports could be misinterpreted by someone unfamil
iar with the inspection system. The purpose of the reports is to
point out deficiencies in facilities and operations for the correc
tive action of plant management. The reports contain objective
comments on plant conditions which existed at the time of the
inspection but which do not necessarily relate to the present
situation. As equipment and buildings wear gradually, mainte
nance and repairs is an ongoing function and it is almost
impossible to achieve a state of zero deficiencies at any given
time. The report does not give a fair assessment of the overall
operations of a plant in the sense that satisfactory conditions
are not commented upon.
The statutory basis for this application is sub
section 20(1) 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:
(a) trade secrets of a third party;
(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.
C—APPLICANT'S ARGUMENTS
This applicant concentrates its arguments on
paragraphs 20(1)(c) and (d). It characterizes the
information as negative and inadequate and con
tends that serious financial harm could result from
its release.
The supporting evidence filed by all applicants is
of two types: first, the opinion of experts as to the
nature of the meat industry's market and the
probable impact of negative information and
second, facts pertaining to each applicant's past
experience of vulnerability to negative informa
tion. This litigation was complicated by applicants'
concern over confidentiality of their evidence. At
their request, all material was filed in sealed
envelopes and cross-examination of the affiants
was conducted in such a way as to restrict access
to transcripts.
Turning first to the expert testimony filed, two
experts submitted affidavits to be relied upon by
all applicants. These were Mr. David Adams, Gen
eral Manager of the Canadian Meat Council,
some of whose evidence has been referred to above,
and Professor Donald M. Thompson, a professor
of Administrative Studies at York University.
Professor Thompson's opinion is based on a review
of samples of the audit reports of various appli
cants' premises and copies of news articles on the
meat products industry, some of which were writ
ten by the requestor here, Jim Romahn. His evi
dence is summarized by this applicant at para
graphs 13 to 16 of its memorandum of fact and
law as follows:
13. The release of the negative information contained in the
Meat Inspection Reports will have a negative impact on the
respective meat packing plant by encouraging the consumer to
purchase meat products from a competitor. A more substantial
risk to the Canadian meat industry as a whole, is that the
consumer who is exposed to this type of negative reporting
might make the consumer decision to purchase a substitute
product, thereby reducing the demand for meat products in
Canada.
14. The meat industry is then faced with the extreme difficulty
of having the purchaser "switch back" to meat products. Since
meat is considered to be a low involvement product, it is
difficult, and perhaps impossible, to overcome negative infor
mation through advertising. This is due to the fact that adver
tising for a low involvement product is intended to create
awareness and familiarity through repetition. It is difficult or
impossible to deliver complex and varied messages dealing with
the desired product benefit about a low involvement product
and thus try to overcome negative information. Consumers
simply do not care enough to pay attention.
15. It may be possible to overcome negative information for
low involvement product by cutting price. Generally the promo
tional price incentive must be maintained long enough to
induce repeat purchase of the brand. The success of this
strategy depends on the initiator being able to sustain the price
cuts over a period of time, and on competitors not simply
matching (and thus negating) the price cuts. This will obviously
result in significant financial loss to the producer over the
period of time necessary to recapture the lost market share.
16. In the export markets, if negative information about
Canadian products or producers were to become available to
foreign governments, in an industry where similar information
about competing suppliers in other countries was not available,
export sales could be permanently harmed. Perhaps more
important, importing countries searching for useful non-tariff
barriers to exclude Canadian meat products might well seize on
such information as a basis for exclusion.
Mr. Adams' evidence alleges that the meat
industry enjoys a low profit margin and that the
loss of even a small portion of profit share from
the decline of domestic or international sales could
have a very serious impact on the profit position of
these applicants.
Piller Sausages illustrates its own position in this
regard by reference to negotiations it has recently
undertaken with a foreign company which, if suc
cessful, would result in a dramatic increase in its
sales per annum. The success of these negotiations
is said to be based primarily on the applicant's fine
reputation for producing high quality meats. Any
damage to that reputation based on negative infor
mation could have a direct impact on the outcome
of these negotiations.
With specific reference to subsection 20(1) of
the Act, it is argued that the disclosure of the meat
inspection audit reports could reasonably be
expected to result in material financial loss to the
applicant and to prejudice its competitive position
in the Canadian meat industry and in the interna
tional market. The disclosure of the reports could
also reasonably be expected to interfere with the
contractual negotiations of the applicant with the
foreign company referred to above. The applicant
admits that the deviations from standards indicat
ed in the reports are, in general, quite minor. Its
fear is that particularly colourful incidents could
be drawn from the reports and used for sensational
media reporting, leaving the reputation and integ
rity of the plants open to attack and, ultimately,
resulting in serious financial loss. The respondent
should therefore be prohibited from disclosing this
material by operation of paragraphs 20(1)(c) and
20(1)(d).
The applicant also refers to subsection 20(6),
relied on in part by the Information Commissioner
in her recommendation. It reads as follows:
20....
(6) The head of a government institution may disclose any
record requested under this Act, or any part thereof, that
contains information described in paragraph (1)(b), (c) or (d)
if such disclosure would be in the public interest as it relates to
public health, public safety or protection of the environment
and, if such public interest in disclosure clearly outweighs in
importance any financial loss or gain to, prejudice to the
competitive position of or interference with contractual or other
negotiations of a third party.
The applicant's submissions on this issue are con
tained in paragraphs 11 and 12 of its memoran
dum of fact and law:
11. The disclosure of the information contained in the Meat
Audit Inspection Reports would not, in any material respect
whatsoever, enhance the knowledge or information of the
public with respect to the public health issue of meat packing at
the Applicant's plant. There is inadequate information in the
Report for any uninvolved individual to make a determination
of the net result of the Report. The information which is being
withheld, if fairly and clearly explained to each member of the
public, would not affect his or her decision to either purchase or
not purchase the product produced by the Applicant. The
public interest as it relates to public health has therefore been
adequately protected by the process of the inspection itself. The
disclosure of the Report would not significantly enhance the
public knowledge and runs the real risk of significantly misin
forming the public.
12. It is submitted that disclosure of the information contained
in the Meat Audit Inspection Reports would misinform as
opposed to inform the public of the public health issue. The
public has received the protection and assurance of safe meat
products through the daily inspections and through the daily
surveillance of the Canadian meat inspectors and the annual
and semi-annual reports. Compliance with these standards is
evidenced by the Canadian meat inspection stamp on all meat
products produced through Canadian meat packing plants. The
public is fully protected and informed through these proce
dures. The potential financial loss and prejudice to the competi
tive position, together with the interference with the contractu
al negotiations of the Applicant with the U.S. Company, clearly
outweighs in importance the public interest in disclosure.
In this connection the applicant also argues that
full and liberal communication between the audit
teams and the inspected companies would be
endangered by public release of the reports, result
ing in a diminution, rather than an enhancement,
of public awareness and safety.
D — RESPONDENT'S AND INTERVENORS' ARGU
MENTS
The respondent asks me to reject any suggestion
that the applicant will suffer harm from these
disclosures. It points out that the applicant's prin
cipal concern, as revealed in the cross-examination
of its President, is not the content of the reports
themselves, but the treatment they will be given by
the newspapers. An unbiased story, reflecting the
limitations of the audit reports would not produce
the same cause for concern. However, is is not
disputed that the applicant itself has never suf
fered financially as a result of bad publicity, either
concerning its own company or the meat industry
in general, so it is only a possibility that financial
harm would occur as a result of negative press.
Cross-examination of the applicant's expert wit
nesses elicited the following admissions:
1) Professor Thompson acknowledged that "the important
thing in sales loss is not that (the inspection reports) are
available from the Government, but (that) they are publicized
to consumers in an essentially negative fashion". He also
agreed that many variables would affect the impact of a story.
Cross-Examination of Donald Thompson, page 38, question 94.
2) Agriculture Canada released the audit reports to requestors
between 1981 and 1983.
Cross-Examination of Kristine Stolarik, response to undertak
ings.
3) The United States Department of Agriculture releases the
American version of these reports to requestors under the
American Freedom of Information Act.
Cross-Examination of Donald Thompson, page 38, question 94.
Cross-Examination of David Adams, page 71, question 197.
4) Mr. Adams knew of no harmful news stories resulting from
either of the above forms of disclosure.
Cross-Examination of David Adams, page 71, question 198—
page 72, questions 201-203.
5) Unbranded meat would be less affected by publicity than
branded meats.
Cross-Examination of Donald Thompson, page 71, question
175.
6) 70% of all meat sold in Canada is unbranded.
Cross-Examination of David Adams, page 52, question 129.
7) The Meat Council of Canada has approved for release a
new meat inspection audit report form which would constitute a
quarterly summary of the information conveyed by the current
reports, omitting minor and temporary deficiencies.
Cross-Examination of David Adams, pages 66-70; page 88;
Exhibit 3.
The respondent argues that the applicant has
failed to satisfy the onus of showing that this
material falls within paragraphs 20(1)(c) or (d).
This applicant did not seriously dispute that, as the
party resisting disclosure, it bears the burden of
persuading me that clear grounds exist to justify
exempting these documents from disclosure. (See
Maislin Industries Limited v. Minister for Indus
try, Trade and Commerce, [ 1984] 1 F.C. 939
(T.D.).) With respect to paragraph 20(1)(c) the
respondent alleges that the applicant has shown no
concrete examples of financial harm caused by
negative publicity. In addition, the harm alleged is
too remote. The paragraph requires evidence of
direct causation: that the disclosure itself will
result in harm, not possible media coverage. The
respondent also claims that the exemption is not
justified under paragraph 20(1)(d) as the only
contractual negotiations alleged to be endangered
are the applicant's negotiations with a U.S. firm
which admittedly does its own inspection of the
premises. All other customers obtain information
about the applicant's premises and products from a
variety of sources, of which these reports would
only be one. And, in any case, the release of
reports which are over three years old could hardly
jeopardize current contractual negotiations.
As one intervenor, the Information Commission
er adds to these submissions on paragraphs
20(1)(c) and (d) the following: a reasonable
person reading the reports will recognize their
limitations and will also note the acceptability and
letter rating of each plant, which provide a more
balanced overview. The unpleasant nature of the
information is not in itself grounds for refusing to
disclose. The letter included with the reports
already disclosed sets out the applicant's concerns
in this regard and would reduce any negative
impact in the mind of the reasonable reader.
Releasing the reports with the letter is no different
from releasing the quarterly summaries already
approved by the Meat Council. The applicant has
remedies at common law in the event of any
misleading or inaccurate information published as
a result of the disclosure of the reports.
In addition the parties intervenant argue that,
even if the reports can be shown to come within
paragraphs 20(1)(c) or (d), they should still be
disclosed by the operation of subsection 20(6).
20....
(6) The head of a government institution may disclose any
record requested under this Act, or any part thereof, that
contains information described in paragraph (1)(6), (c) or (d)
if such disclosure would be in the public interest as it relates to
public health, public safety or protection of the environment
and, if such public interest in disclosure clearly outweighs in
importance any financial loss or gain to, prejudice to the
competitive position of or interference with contractual or other
negotiations of a third party.
The intervenors argue that disclosure of this
information would be very much in the public
interest. The purpose of the inspection system
which produced these reports is to protect the
public and ensure that it continues to enjoy the
highest standards of meat hygiene. Therefore, dis
closure of the reports would protect the public
interest in having available information about the
health and safety of food. The applicant's concerns
that the public will only be misinformed by the
reports should, according to these parties, be
alleviated by the explanatory letter which will
accompany them. Disclosure will also serve the
public interest by encouraging all plants to achieve
high standards of hygiene for competitive reasons.
E—THE LAW
The Access to Information Act is a relatively
young statute. While the jurisprudence interpret
ing it has grown quite rapidly over the past few
years, there have been very few decisions dealing
with third party applications under section 44 and
not all have dealt in any detail with the require
ments for exemption under paragraphs 20(1)(c)
and (d). Their major thrust was to establish, first,
that the burden of proof rests with the party
opposing disclosure (as this applicant admits) and
second, that having regard to the purpose of the
Act, as stated in section 2, any exemption from
disclosure must be limited and exceptional, con
fined to those specifically set out in the statute.
(See Maislin Industries Limited, supra; DMR &
Associates v. Minister of Supply & Services
(1984), 11 C.P.R. (3d) 87 (F.C.T.D.); and
Canada (Information Commissioner) v. Canada
(Minister of Employment and Immigration),
[1986] 3 F.C. 63; 11 C.P.R. (3d) 81 (T.D.) (sec-
tion 42 application).)
In a more recent decision, Sawridge Indian
Band v. Canada (Minister of Indian Affairs and
Northern Development) (1987), 10 F.T.R. 48
(F.C.T.D.), my colleague, Martin J. considered
the specific paragraphs which concern us here. In
that case an Indian Band sought to restrain the
disclosure of their membership rules, claiming that
they intended to recoup the expenses connected
with their preparation by charging a fee to other
Bands who wished to obtain a copy as precedent.
The issues under paragraphs 20(1)(c) and (d)
arose in connection with a review of the Minister's
decision not to issue a notice under section 28 of
the Act as he did not consider the third party to be
affected in any of the ways set out in subsection
20(1). The Court's review was confined to a con-
sideration of whether that decision had been prop
erly made. Martin J. also went on to say that he
would have made the same determination on the
facts before the Minister. His reasons reflect the
degree of evidence required to discharge the onus
on an applicant seeking to apply these provisions
[at pages 56-57]:
If the applicant has been able to obtain some benefit for his
Band by allowing other Bands to use the rules as a precedent
for drafting their own rules he has indeed been fortunate. In
this respect the evidence is neither detailed nor convincing.
Apparently a number of copies of the rules were given to other
Bands. No money which could be directly attributed to the
release by the applicant of the rules was received in return.
Instead the evidence indicates that the Band received certain
benefits by way of support for actions it has against the federal
Government.
Given the information which the respondent had at the time
he decided not to proceed under s. 28 of the Act, and in
particular the rules themselves, and given the representations
which were made subsequently, including the material in sup
port of this application, the respondent could not then and
could not now be expected to conclude that the release of the
rules would or might effect any of the results described in s.
20(1)(c) or (d). To expect the respondent to conclude that the
release of the rules would or might give rise to such results
would be to expect him to engage in the height of speculation.
I endorse the sense of these remarks that evidence
of harm under paragraphs 20(1)(c) and (d) must
be detailed, convincing and describe a direct cau
sation between disclosure and harm. It must not
merely provide grounds for speculation as to possi
ble harm.
Perhaps due to the small number of cases under
the federal statute, all briefs include decisions
from the New Brunswick Court of Queen's Bench
which deal with a similar New Brunswick statute,
the Right to Information Act, S.N.B. 1978, c.
R-10.3. One of these, Re Daigle (1980), 30 N.B.R.
(2d) 209 dealt with a request from the provincial
Leader of the Opposition to the New Brunswick
Electric Power Commission for disclosure of a
"work sampling study" prepared by a consultant
regarding the construction of a nuclear generating
station. Disclosure was refused by the Commis
sion, in part, on the basis of paragraph 6(c) of the
New Brunswick Act, which reads:
6. There is no right to information under this Act where its
release
(c) would cause financial loss or gain to a person or depart
ment, or would jeopardize negotiations leading to an agree
ment or contract;
Stevenson J. dealt with the arguments presented
under paragraph 6(c) as follows [at pages
215-216]:
It is my view, however, that the application of paragraph
6(c) of the Act—so far as the question of financial loss or gain
is concerned—must be determined on a narrower ground. In
my opinion, to successfully rely on that exclusion, it must be
established that the loss or gain would result directly from
disclosure of the information. Here the Minister relies on what
can only be characterized as a speculative future gain or loss to
the contractors.
With respect to the contention that disclosure would cause
financial loss to the Power Commission in weakening the
position of the Commission in attempting to improve the
performance of a specific contractor or in negotiating the
settlement of contractual claims or in potential litigation of
contractual claims, I need say only this: I cannot accept that
any responsible contractor will be less likely to desire to
improve his performance when his past performance has been
subjected publicly to constructive criticism—logic dictates that
the converse would be true. The general reference in Mr.
Ganong's affidavit to "the settlement of contractual claims or
in potential litigation of contractual claims" is of little evidenti-
ary value. There is no clear evidence that there are in fact
outstanding claims which would be affected. More specific
evidence is necessary to support exclusion from disclosure on
that ground.
It is objected that disclosure of the information could cause
financial loss to The Emerson Consultants Inc. in the future.
The material in the Study is presented clearly, candidly and
objectively. One would expect nothing less from a firm of
management consultants. Such a presentation enhances rather
than detracts from the ability or reputation of the consultant. If
the consultant were to voluntarily disclose the contents of a
confidential report, potential clients would have cause for con
cern. But third parties cannot fault the consultant for a disclo
sure made not by the consultant but rather compelled by
statute. Furthermore, the future possible loss alluded to is
wholly speculative and would not be a direct result of the
disclosure. I note finally that Mr. Creaghan did not press this
argument strongly.
There is the additional contention that disclosure would
jeopardize negotiations for a collective agreement between the
craft unions and the Lorneville Bargaining Authority. The
short answer to this objection is that assessments of work
performances made some three years ago are now so remote in
time that it is inconceivable to me that their disclosure could
jeopardize or prejudice current negotiations.
Again we note the high standard of proof which is
necessary to establish an exemption from disclo
sure on grounds of financial harm or contractual
interference.
Finally, all parties also draw upon American
decisions which deal with the much older Freedom
of Information Act of that country (5 U.S.C. §
552 (1970)). As the Information Commissioner
points out in her submission, however, reliance on
American case law for purposes of interpreting the
Canadian statute can be dangerous. The relevant
provision of the Freedom of Information Act
reads:
552... .
(3) ... each agency, on request for identifiable records
made in accordance with published rules stating the time,
place, fees to the extent authorized by statute, and procedure to
be followed, shall make the records promptly available to any
person. On complaint, the district court of the United States in
the district in which the complainant resides, or has his princi
pal place of business, or in which the agency records are
situated, has jurisdiction to enjoin the agency from withholding
agency records and to order the production of any agency
records improperly withheld from the complaint [sic]. In such a
case the court shall determine the matter de novo and the
burden is on the agency to sustain its action.
(b) This section does not apply to matters that are—
(4) trade secrets and commercial or financial information
obtained from a person and privileged or confidential;
This exemption has been interpreted by the U.S.
Court of Appeals to require the following two-
stage test:
[4] To summarize, commercial or financial matter is "confi-
dential" for purposes of the exemption if disclosure of the
information is likely to have either of the following effects: (1)
to impair the Government's ability to obtain necessary informa
tion in the future; or (2) to cause substantial harm to the
competitive position of the person from whom the information
was obtained. [National Parks and Conservation Ass'n v.
Morton, 498 F.2d 765 (D.C. Cir. 1974), at page 770.]
The Information Commissioner argues that this
interpretation combines the tests set out in para
graphs 20(1)(b) and (c) of the Canadian Act by
combining a "class" test and an "injury" test in
one exemption. When considering paragraph
20(1)(c) of our statute, however, the test is one of
reasonably expected financial or competitive harm,
regardless of whether the information disclosed is
confidential per se. Therefore, while the American
jurisprudence is helpful in seeking an understand
ing of similar terminology, the standard for refus
ing to disclose must be established with specific
reference to the Canadian Act.
The American cases, however, do make some
useful statements about the standard of proof in
access to information applications. Two examples
will suffice to show the thrust of the jurisprudence
in this respect. In National Parks and Conserva
tion Ass'n v. Kleppe, 547 F.2d 673 (D.C. Cir.
1976), at page 683, the Court of Appeals found
that the District Court had not erred in finding
that disclosure would cause substantial competitive
harm:
[8] With the exception of these two concessioners, appellees
have also met their burden of proving that disclosure would be
likely to cause substantial competitive harm. The district court
found that it would, J.A. 289, 292, 295-96, and substantial
evidence in the record supports the necessary inferences leading
to that conclusion. No actual adverse effect on competition
need be shown, nor could it be, for the requested documents
have not been released. The court need only exercise its judg
ment in view of the nature of the material sought and the
competitive circumstances in which the concessioners do busi
ness, relying at least in part on relevant and credible opinion
testimony.
An even more useful summary of the law as taken
from several precedents was found in Public Citi
zen Health Research Group v. Food and Drug
Admin., 704 F.2d 1280 (D.C. Cir. 1983), at pages
1290-1291:
[6,7] The relevant question thus becomes whether the com
mercial information submitted to the FDA by the IOL manu
facturers is "confidential" within the meaning of Exemption 4.
Commercial information is confidential for purposes of the
exemption if its disclosure would either "(1) ... impair the
Government's ability to obtain necessary information in the
future; or (2) ... cause substantial harm to the competitive
position of the person from whom the information was
obtained." National Parks 1, 498 F.2d at 770 (footnote omit
ted). Under the second prong of this test—the only one at issue
here—the court need not conduct a sophisticated economic
analysis of the likely effects of disclosure. National Parks II,
547 F.2d at 681. Conclusory and generalized allegations of
substantial competitive harm, of course, are unacceptable and
cannot support an agency's decision to withhold requested
documents. See id. at 680; Pacific Architects & Engineers, Inc.
v. Renegotiation Board, 505 F.2d 383, 384-85 (D.C. Cir.
1974). But the parties opposing disclosure need not "show
actual competitive harm"; evidence revealing "[a]ctual compe
tition and the likelihood of substantial competitive injury" is
sufficient to bring commercial information within the realm of
confidentiality. Gulf & Western Industries v. United States,
615 F.2d at 530.
The American test, then, depends upon "evi-
dence revealing actual competition and the likeli
hood of substantial competitive injury". Actual
competitive harm from the disclosure of docu
ments not yet released is, of course, impossible to
show and is not required. Conclusory and general
ized allegations of harm are, however, unaccept
able. While the actual terms of the exemption in
the U.S. statute may differ, this standard of proof
seems to coincide with the tests set out in the
Canadian cases referred to above. The evidence
must not require pure speculation, but must at
least establish a likelihood of substantial injury.
This also seems to be the test incorporated in
paragraphs 20(1) (c) and (d) of the Canadian Act
where the wording used is "could reasonably be
expected to" result in harm. The expectation must
be reasonable, but it need not be a certainty.
F—CONCLUSION
The principle of the Access to Information Act
requires the party opposing disclosure to establish
that the information in issue comes within one of
the specific exemptions set out in the statute. In
this case, the exemptions pleaded are paragraphs
20(1)(c) and (d). In order to establish a case for
non-disclosure on those grounds the applicants
must show that this is information the disclosure
of which could reasonably be expected to:
1) result in material financial loss or gain to a
third party,
2) prejudice the competitive position of a third
party, or
3) interfere with the contractual or other
negotiations of a third party.
Applying the tests set out above, does the evi
dence in this case establish those propositions? I
find that it does not, for several reasons. The first
and most important consideration is the nature of
the meat inspection audit reports themselves. The
inspections which form the subject-matter of the
reports are separate from and in addition to the
daily, continuous production inspections by on-site
Agriculture Canada officials. It is those daily
inspections which result in the affixing of the meat
inspection legend, without which no meat product
can be marketed in or exported from Canada. The
legend attests to the product having satisfied the
high standards of purity and cleanliness set out in
the Meat Inspection Act and Regulations. As
admitted by this applicant in argument, it is this
process which chiefly informs and protects the
public in its day-to-day purchase of meat for con
sumption. Any product that doesn't meet the
standards is detained by the inspectors and never
reaches the store shelves.
The reports at issue here reflect a periodic audit
of that process, concentrating chiefly on the physi
cal condition of the plant and its general operation.
The applicants claim that the public will not dif
ferentiate between the plant's facilities, whose
deficiencies are commented on in the reports, and
the meat produced there. To support that claim,
they necessarily argue that those negative com
ments will cause consumers to ignore the assur
ances derived from the daily, constant inspection
of the product and facilities. The consumer is also
expected to ignore the generally high overall rating
given these plants in the reports, the accompanying
letter from Agriculture Canada setting out the
reports' limitations, the fact that these reports are
more than three years old and the steps taken by
the plants to correct any deficiencies. In the face
of all this positive information, the consumer, they
conclude, will turn away from the products of the
subject producers and, ultimately, from all red
meat products to substitutes like poultry and fish.
It is an argument I cannot accept, particularly in
view of the applicant's own admission that these
reports, properly understood, should not affect the
public's decision to purchase the applicant's
products.
The same problems arise with respect to the
applicant's concerns about the export market. All
applicants indicated, with deserved pride, that
Canada's standards for meat hygiene are the high
est in the world and that our meat products are
well respected abroad. At the same time, however,
they argue that any negative information about
their operations would damage their competitive
position with respect to suppliers from other coun
tries in which such information is not available. I
find it hard to imagine that a reasonable importer
would rely on the information contained in these
reports in the face of the assurances provided by
Canada's highly respected meat inspection system,
as evidenced by the meat inspection legend on all
exported products. The applicant also maintains
that foreign governments will use this information
to erect non-tariff barriers against Canadian meat
products. No examples of such use of Canadian or
American inspection reports could be found and in
the absence of any evidence to support this allega
tion, I am not prepared to conclude it represents a
real risk to the financial or competitive position of
the applicants.
This gap in credibility is not overcome by the
applicant's apprehensions of sensational news cov
erage of the reports. Those apprehensions are
simply not supported by the evidence. Several
examples of news reporting on the meat packing
industry are included in the affidavits filed in
support of this application. Only one refers to
reports similar to these, which, it will be remem
bered, were available from Canadian authorities
between 1981 and 1983 and from Washington
since 1972. A perusal of the latter article illus
trates the inconsequential nature of the complaints
expressed in the reports. I also note that the
article, written by the requestor here, Jim
Romahn, specifically comments on the minor
nature of many of the complaints and chronicles
the steps taken by criticized firms to correct any
deviation from standards. I do not find it to be an
unbalanced or biased account and certainly not
one which would unduly alarm the consumer.
As for contractual interference, the same rea
sons apply to show that potential trading partners
cannot be reasonably expected to abandon negotia
tions as a result of these reports. As Stevenson J.
said in Re Daigle, supra, the fact that these
reports are over three years old would surely be
taken into account by a reasonable customer. It is
inconceivable that such dated information about
minor deficiencies in the applicant's facilities
would seriously jeopardize current negotiations.
There is also no evidence that release of these
reports will in any way jeopardize the collection of
data by government inspectors, as alleged by the
applicant. We are not dealing here with a situation
in which information is voluntarily supplied to the
government by the industry. In other words, this is
not a case where the quality of the information
gathered depends on an atmosphere of coopera
tion. The concern in the American cases cited by
the applicants is that people may hold back useful
information from government agencies for fear of
publication. These reports are the products of a
statutory inspection process. To maintain their
registration as licensed meat packing plants, they
must submit not only to a periodic audit, but to
continual, on-site inspections. There is no way the
inspectors or auditors can be prevented from
observing and recording plant conditions. Unlike a
voluntary information-gathering service, these
inspections are not dependent on industry coopera
tion for the quality of the information collected. In
addition, I am not convinced that cooperation
would suffer. Publication of these reports may
make it even more desirable for competitive rea
sons, for these firms to meet or surpass national
standards. Communication and cooperation with
federal authorities would be the best way to
achieve that goal.
I said in Maislin Industries, supra, that any
doubt in a case under the Access to Information
Act must be resolved in favour of disclosure. The
information at issue here is a textbook case of
material which ought to be available to requesters.
The inspections which produced these reports were
undertaken by public authorities, involved the ex
penditure of public funds and were made for the
purpose of protecting the public. The resulting
reports are by their very nature public informa
tion. The applicants have not discharged the onus
of persuading me they should not be disclosed. I do
not find that this material comes within paragraph
20(1)(c) or (d) of the Act. Even if I am wrong in
that conclusion, the public interest in disclosure in
this case clearly outweighs any risk of harm to the
applicant and the reports should be released under
subsection 20(6) of the Act.
For these reasons, I have concluded that the
meat inspection audit reports may be disclosed in
the form proposed by the Department of Agricul
ture. The application to resist disclosure is there
fore dismissed with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.