Canada: Protection Of Confidential Commercial Information Affirmed In Freedom Of Information Decision

On February 19, 2015, the Supreme Court of Canada (SCC) denied leave to appeal from the judgment of the Alberta Court of Appeal (Court) in Imperial Oil Limited v. Alberta (Information and Privacy Commissioner). This case addressed important principles of law with respect to the interpretation and application of Alberta's Freedom of Information and Protection of Privacy Act (FOIP Act) and broader issues of administrative law.

As is normal in leave applications, the SCC did not give reasons for its decision; consequently, the Court of Appeal decision is now the leading authority on these issues.


This case concerned a freedom of information request made by the City of Calgary in relation to a Remediation Agreement between Alberta Environment, Imperial Oil Limited (Imperial Oil) and others. The Remediation Agreement was the result of successful mediation proceedings between the parties in which the City of Calgary did not participate. After Alberta Environment declined to disclose the whole of the Remediation Agreement, the City of Calgary applied to the Privacy Commissioner, who ordered disclosure of the document. This decision was subsequently quashed on judicial review.

The Privacy Commissioner appealed to the Court. The Court held that the Privacy Commissioner had no standing to appeal, and further that in any event the Remediation Agreement was exempt from disclosure both as information subject to legal privilege (section 27 of the FOIP Act) and as information the disclosure of which would be harmful to the business interests of a third party (section 16 of the FOIP Act).


Standing of a Statutory Tribunal to Appeal from Judicial Review of its Own Decision

The Court confirmed and followed prior case law holding that a statutory tribunal cannot appeal from a judicial review order quashing its own decision unless its jurisdiction is in question. In this case, it was the reasonableness and correctness of the Privacy Commissioner's order that was at issue, not the Privacy Commissioner's jurisdiction to issue the order.

Given the adjudicative role of the Privacy Commissioner in these proceedings and the obligation of his office to remain fair and neutral between litigants, the Court held that it was inappropriate for the Privacy Commissioner to be actively involved in litigation contesting the validity of his order. The Court recognized that special challenges may arise where there is no other party with the resources to effectively advance the issues on appeal, but observed that the City of Calgary in this case was obviously equipped to launch such an appeal and elected not to do so.

Although the Court held that its ruling on this issue was sufficient to dispose of the appeal, the Court determined that further comment was warranted given the importance of the issues raised.

Standard of Review

The Court upheld the standard of review applied by the chambers judge, finding: (a) that it would not be appropriate to apply a single standard of review to all the issues raised; and (b) that the standard of reasonableness was generally applicable in respect of the Privacy Commissioner's interpretation and application of the FOIP Act, but correctness applied in respect of the interpretation and application of the law of privilege and where the Privacy Commissioner purported to construe environmental statutes and policies in his analysis of the exceptions to disclosure under the FOIP Act.

Meaning of 'Legal Privilege' under FOIP Act

The Court rejected the Privacy Commissioner's argument that his interpretation of the word "privilege" as used in the FOIP Act should be accorded deference. The Court ruled, "Privilege is a legal concept with constitutional dimensions, and its interpretation is of central importance to the legal system as a whole. . . . Where the legislature uses words with a well established legal meaning, it must be presumed that it intended them to be applied in accordance with that meaning" (paragraph 35).

Turning to section 27 of the FOIP Act, the Court held that the Privacy Commissioner was incorrect in concluding that the Remediation Agreement was not exempt from disclosure on the basis of legal privilege. Relying on a recent SCC decision, the Court held that at common law, both mediations and the resulting settlements are privileged. The Court observed that the purpose of settlement privilege is to prevent disclosure of the settlement terms to a party adverse in interest and with related unsettled claims against the party asserting the privilege, here the City of Calgary in respect of its outstanding issues with Imperial Oil. Contrary to the views of the Privacy Commissioner, the Court held that settlement privilege applies to both public and private disputes, without modification for considerations of public interest. The Court held that the entirety of the Remediation Agreement was thus subject to settlement privilege and exempt from disclosure.

Disclosure Harmful to Business Interests of a Third Party

The Court held that the disputed portions of the Remediation Agreement were also exempt from disclosure under section 16(1) of the FOIP Act on the basis that disclosure: (a) would reveal commercial, financial, scientific or technical information of the third party, being Imperial Oil; (b) that was supplied to a public body, being Alberta Environment, in confidence; and (c) could reasonably be expected to significantly harm the competitive position or significantly interfere with the negotiating position of Imperial Oil and discourage third parties from supplying similar information to Alberta Environment when it is in the public interest that such information be supplied. The Court rejected the Privacy Commissioner's contrary conclusion as unreasonable.

The following guidance from the Court with respect to section 16(1) of the FOIP Act is noteworthy:

  • Of the third party: The Court confirmed that the expression "of the third party" refers to the source of the information without necessarily requiring ownership in the strict sense. Information can be "of the third party" regardless of whether it was specifically requested by the public body or voluntarily provided and regardless of whether it was developed for the third party by outside consultants.
  • Supplied by the third party: Similar to its analysis of the expression "of the third party," the Court rejected the notion that information ceases to be "supplied" by the third party once used in a negotiated agreement between the third party and the public body.
  • Supplied, explicitly or implicitly, in confidence: The Court opined that this component of section 16(1) of the FOIP Act is substantially a subjective test, such that "the perceptions of the parties on whether they intended to supply the information in confidence is of overarching importance" (paragraph 75). In the Court's view, the Privacy Commissioner's confidentiality analysis was affected by the inaccurate assumption that under the environmental appeals system, a mediated solution should result in public disclosure of the resulting document.

Lastly, the Court considered whether, as determined by the Privacy Commissioner, disclosure of the information provided by Imperial Oil was nonetheless authorized or required under an enactment of Alberta or Canada under section 16(3)(b). The Court agreed that disclosure of the information was permitted under a Ministerial Order of Alberta Environment. However, the Court upheld as reasonable Alberta Environment's decision to withhold such information, referring to the evidence of both Alberta Environment and the Environmental Appeals Board that "disclosure would seriously undermine the mediation process commonly used to resolve environmental disputes" (paragraph 93).


The Court's decision in Imperial Oil Limited v. Alberta (Information and Privacy Commissioner) offers valuable guidance both with respect to key issues of administrative law and the interpretation and application of the FOIP Act. With respect to the central issue of standing to appeal, the Court held that a statutory tribunal can only appeal from a judicial review order quashing its own decision where its jurisdiction is in question. Special considerations, which may arise where the statutory tribunal is the only party who can effectively advance issues on appeal, do not apply as a general rule.

Beyond this central issue, the further comments of the Court with respect to the appropriate standard of review, interpretation of words with an established legal meaning and the requirements of the specific exceptions to disclosure under the FOIP Act provide helpful insight with respect to the freedom of information regime in Alberta and potentially other Canadian jurisdictions with similar legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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