Merck Frosst Canada Ltd. v. Canada (Health)

Merck Frosst Canada Ltd. v. Canada (Health)
Collection
Supreme Court Judgments
Date
2012-02-03
Neutral citation
2012 SCC 3
Report
[2012] 1 SCR 23
Case number
33290, 33320
Judges
McLachlin, Beverley; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise; Rothstein, Marshall; Cromwell, Thomas Albert
On appeal from
Federal Court of Appeal
Subjects
Access to information
Notes
SCC Case Information: 33290, 33320
Decision Content
SUPREME COURT OF CANADA
Citation: Merck Frosst Canada Ltd. v. Canada (Health),
2012 SCC 3, [2012] 1 S.C.R. 23
Date: 20120203
Docket: 33290, 33320
Between:
Merck Frosst Canada Ltd.
Appellant
and
Minister of Health
Respondent
- and -
BIOTECanada
Intervener
Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
Reasons for Judgment:
(paras. 1 to 242)
Dissenting Reasons:
(paras. 243 to 265)
Cromwell J. (McLachlin C.J. and Binnie, LeBel, Fish and Charron JJ. concurring)
Deschamps J. (Abella and Rothstein JJ. concurring)
Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, [2012] 1 S.C.R. 23
Merck Frosst Canada Ltd. Appellant
v.
Minister of Health Respondent
and
BIOTECanada Intervener
Indexed as: Merck Frosst Canada Ltd. v. Canada (Health)
2012 SCC 3
File Nos.: 33290, 33320.
2010: November 12; 2012: February 3.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
on appeal from the federal court of appeal
Access to information — Third party information — Exemptions — Notice requirements — Severance — Access to information requests filed with Health Canada relating to third party pharmaceutical company’s new drug submissions — Whether government institution fulfilled obligations to review records before providing notice of intention to disclose third party’s information and in severing non‑exempt information — Whether statutory notice requirements triggered — Whether third party information falling within Act’s exemptions — Access to Information Act, R.S.C. 1985, c. A‑1, ss. 20(1) , 25 , 27 , 28 .
Access to information — Appeals — Standard of appellate review — Evidence — Access to information requests filed with Health Canada relating to third party pharmaceutical company’s new drug submissions — Whether deference owed to reviewing judge’s findings that exemptions from disclosure applied to third party information — Whether pharmaceutical company provided sufficient direct and objective evidence information falling within exemptions — Access to Information Act, R.S.C. 1985, c. A‑1, ss. 20(1) , 44 .
Health Canada received access to information requests relating to two new drug submissions made to it by M, a pharmaceutical company and third party to the requests. A series of disputes arose between the parties about what information had to be disclosed and what was exempt from disclosure under the Access to Information Act (“Act ”). In particular, Health Canada identified several hundred pages in response to each request. It reviewed those pages, concluded some contained information that could not be disclosed under the exemptions found in s. 20(1) of the Act , and redacted those pages in part. It also concluded a number of pages did not contain any exempted information and disclosed those pages without notifying or consulting M. Enclosing hundreds of the still undisclosed pages, Health Canada then notified M of the access to information requests and of its intention to disclose the enclosed pages, asking M to explain which portions of the remaining pages M considered confidential under s. 20(1) , and why. Following a number of exchanges, Health Canada agreed to further redactions but rejected the balance of M’s objections. M filed for judicial review of Health Canada’s decisions under s. 44 .
The Federal Court found that disclosure by Health Canada without prior notice to M contravened s. 20(1) of the Act and held that over 200 pages were exempted from disclosure, while the remaining pages could be disclosed. The reviewing judge also held that it would be extremely difficult to sever and disclose non‑exempt information pursuant to s. 25 . The Federal Court of Appeal allowed Health Canada’s appeals, ordering that all the remaining pages at issue should be disclosed.
Held (Deschamps, Abella and Rothstein JJ. dissenting): The appeals should be dismissed.
Per McLachlin C.J. and Binnie, LeBel, Fish, Charron and Cromwell JJ.: The decision of the judge conducting a review under the Act , which will often have a significant factual component, is subject to appellate review in accordance with the well-established principles set out by this Court. The Federal Court of Appeal correctly set out and applied the applicable standard of review. The reviewing judge did not make requisite findings of fact and failed either to state the applicable legal principles or to explain how the legal principles applied to the facts before him or, in some cases, both. The Court of Appeal was therefore entitled to intervene and to carry out its own assessment of whether the reviewing judge had correctly applied the Act ’s exemptions to the records. There is nonetheless some merit to M’s complaints. The Act must be interpreted and applied so that it strikes the balance Parliament intended between broad rights of access and protection of third party information. Both the Act and the considerations identified by the reviewing judge and by M support a fairly low threshold to trigger the obligation to give notice under s. 27(1) . Observing a low threshold for third party notice ensures procedural fairness and reduces the risk that exempted information may be disclosed by mistake. Disclosure without notice is only justified in clear cases where the government institutional head, reviewing all the relevant evidence, concludes that there is no reason to believe that the record might contain exempted material. A head should refuse to disclose without notice where there is no reason to believe that the information is subject to disclosure. M’s submission, that there is an automatic right to notice with respect to certain categories of records is not, however, supported by the grammatical and ordinary meaning of s. 27(1) , or by the jurisprudence which makes plain that notice is required only if certain conditions are met in the particular circumstances. The institutional head must give notice if he or she is in doubt about whether the information is exempt; intends to disclose exempted material to serve the public interest pursuant to s. 20(6) ; or intends to disclose third party information by severing the non‑exempt information and disclosing only that as required by s. 25 . In giving notice, the institutional head cannot simply shift the responsibility to review the records onto the third party. Institutions must make a serious attempt to apply the exemptions by reviewing each individual record to determine which portions, if any, may be exempted. The same principle applies to the severance of material under s. 25 . It is also prudent and in accordance with common sense for a third party, who is generally in a better position than the head of the institution to identify information that falls within one of the s. 20(1) exemptions, to be as helpful as it can be in identifying precisely why disclosure is not permitted. In these appeals, it is of limited use to decide if the notice provisions and the appropriate level of review by the institutional head were correctly applied throughout. It may be observed, however, that both M and Health Canada at times took rather extreme positions that were not in accordance with the purpose, letter or spirit of the Act .
The party seeking judicial review bears the burden of demonstrating that the statutory exemptions apply on a balance of probabilities. In relation to the exemptions themselves, M has not shown that any of the pages in issue, as redacted by Health Canada, contain any information exempted under s. 20(1) (a), (b) or (c). First, a “trade secret” for the purposes of s. 20(1) (a) should be understood as a plan or process, tool, mechanism or compound, which possesses the following characteristics: the information must be secret in an absolute or relative sense (is known only by one or a relatively small number of persons); the possessor of the information must demonstrate he or she has acted with the intention to treat the information as secret; the information must be capable of industrial or commercial application; and the possessor must have an interest (e.g. an economic interest) worthy of legal protection. This approach is consistent with the common law definition and takes account of the legislative intent that a trade secret is something different from the broader category of confidential commercial information protected under s. 20(1) (b). While the Court of Appeal correctly defined “trade secrets”, it erred in law by insisting the term should be interpreted restrictively and that there was a high threshold for invoking the exemption. The applicable standard of proof is still the civil standard of the balance of probabilities. However, this error did not result in the Court of Appeal reaching the wrong conclusion about how s. 20(1) (a) applies here. It did not err in finding that M’s evidence was not responsive to the documents as redacted by Health Canada. The reviewing judge’s failure to refer to the applicable legal test or the relevant evidence constituted a material error justifying appellate intervention.
Second, M’s submission that the Court of Appeal erred in finding that it had not discharged its burden of proof, and that the documents, as redacted, continued to contain confidential information, must fail. In order to qualify for the s. 20(1) (b) “confidential information” exemption, the information must be financial, commercial, scientific or technical information; confidential and consistently treated in a confidential manner by the third party; and supplied to a government institution by a third party. Government reviewers’ notes may fall under the exemption to the extent that they contain information communicated to them by a third party. While the Court of Appeal once again applied an unduly onerous standard of proof, finding that the third party opposing disclosure has a heavy burden to establish the exemption, the result did not turn on its description of the standard of proof. Rather, the court’s decision rested on the findings that Health Canada conceded that extensive redaction was necessary and that there was no direct and objective evidence from M to show that the remaining information was confidential. Both of these conclusions focussed on the primarily factual question of whether the substance of the information was publicly available. M’s submissions, including references to the evidence, are of no assistance in explaining how what is left on the often heavily redacted pages is confidential in the face of Health Canada’s evidence that the unredacted material is in the public domain and therefore not confidential. As for the formatting and structure of the new drug submissions, they do not qualify for exemption as confidential information in this case. Generally, as here, the choice about how information is presented or the precise organization and ordering of sections of a document are the subject of publicly available guidelines, although the nature of the information and evidence in the particular case must be considered in deciding whether or not the exemption applies. M’s argument that the very fact it listed particular articles and studies otherwise available in the public domain in its new drug submissions is confidential information, because it would be understood by competitors that M had relied on those studies, must also fail. The record shows that M itself proposed that copies of all published articles referred to in the submissions should be provided to the requester. In addition, the fact that M had referred to many studies was already in the public domain as a result of the publication of the Product Monograph (a scientific document which contains the information for safe and effective use of the drug) and other documents. While the possibility of establishing a claim of this nature in cases where the evidence supports it cannot be foreclosed, the evidence does not support it here.
Third, the exemption in s. 20(1) (c) applies if disclosure could reasonably be expected to harm the third party. The test to establish the degree of likelihood that harm will result from disclosure is “a reasonable expectation of probable harm”. This long‑accepted formulation is intended to capture that, while the third party need not show on a balance of probabilities that the harm will in fact come to pass if the records are disclosed, the third party must nonetheless do more than show that such harm is simply possible. 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. There is no reason to reformulate the test. As to whether it is possible that disclosing information already in the public domain can cause harm, publicly available information is generally not exempt information under the harm test. It may, however, be possible in some cases to show that the way in which publicly available information has been compiled for a particular purpose is not, itself, publicly known, giving rise to the risk of harm by disclosure. Information, not already public, that is shown to give competitors a head start in developing competing products, or to give them a competitive advantage in future transactions may, in principle, meet the requirements of s. 20(1) (c). The evidence must convince the reviewing court 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. Disclosure of information such as dates, numbering and location of information within a new drug submission or the manner of its presentation, as well as lists of studies or acknowledgement that certain studies have been consulted, and information about how the regulatory process works, usually does not give rise to the necessary expectation of harm or competitive prejudice required in s. 20(1) (c). In this case, while Health Canada applied an unduly onerous test of probability of harm, a review of M’s submissions and evidence confirms the Court of Appeal’s intervention was nevertheless justified. Health Canada’s evidence that virtually all of the unredacted information in issue was in the public domain was largely unanswered by M and it did not provide evidence showing how the disclosure of the redacted form of the information could reasonably be expected to give rise to the harm and prejudice it claimed. Moreover, M’s submission that the release of some of the information could give an inaccurate perception of the product’s safety cannot be accepted. Courts have often — and rightly — been sceptical about claims that the public misunderstanding of disclosed information will inflict harm. Refusing to disclose information for fear of public misunderstanding undermines the fundamental purpose of access to information legislation; the public should have access to information so that they can evaluate it for themselves.
Finally, the Court of Appeal’s disposition of the s. 25 issue should be affirmed. M did not provide any submissions and the reviewing judge failed to explain why non‑exempt material could not reasonably be severed and disclosed as required under s. 25 . The Court of Appeal was obliged to intervene, although it erred to the extent it faulted the reviewing judge for having substituted his view for that of the institutional head. The reviewing judge was required to consider whether the institutional head had properly applied s. 25 . The heart of the s. 25 exercise is determining when material subject to the disclosure obligation can reasonably be severed from exempt material. Severance will be reasonable only if disclosure of the unexcised portions of the record would reasonably fulfill the purposes of the Act , having regard to whether what is left after excising exempted material has any meaning and whether the effort of redaction by the government institution is justified by the benefits of severing and disclosing the remaining information. Where severance leaves only disconnected snippets of releasable information, disclosure of that type of information does not fulfill the purpose of the Act and severance is not reasonable.
Per Deschamps, Abella and Rothstein JJ. (dissenting): The Federal Court judge reviewing the decision of the head of an institution pursuant to s. 44 of the Act discharges a function similar to a trial judge. An appellate court must defer to a trial judge’s findings on questions of fact as well as on questions of mixed fact and law. The standard to be applied on such questions, per Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, is that of a palpable and overriding error. Deferring to trial judges’ findings where it is appropriate to do so ensures that judicial resources are used efficiently, enhances access to justice and is consistent with the institutional role of the appellate court. Here, the reviewing judge’s findings on the exemptions are fact‑based or bear on questions of mixed fact and law, so deference is owed to them. No palpable and overriding error can be found in his judgments. While one may disagree with the result, the judge’s conclusions can easily be explained by referring both to his reasons and to the parties’ submissions. This Court ought not to be conducting the kind of technical review which is required in order to determine whether information qualifies for an exemption from disclosure under the Act . The size of the record, the time allotted to the parties to argue their cases in this Court, and the Court’s institutional role are all factors that militate against reviewing the facts in minute detail. The deferential approach dictated by Housen is more consistent with this Court’s role. The reviewing judge should not be required to provide a word‑by‑word, line‑by‑line, or even page‑by‑page explanation for his or her decision. The Federal Court of Appeal erred in retrying the case.
Cases Cited
By Cromwell J.
Discussed: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; referred to: Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403; Ontario (Public Safety and Security) v. Criminal Lawyers’ Association, 2010 SCC 23, [2010] 1 S.C.R. 815; Canada Post Corp. v. Canada (Minister of Public Works), [1995] 2 F.C. 110; Canada (Privacy Commissioner) v. Canada (Labour Relations Board), [1996] 3 F.C. 609, aff’d (2000), 25 Admin. L.R. (3d) 305; Canada (Information Commissioner) v. Canada (Commissioner of the Royal Canadian Mounted Police), 2003 SCC 8, [2003] 1 S.C.R. 66; Canada (Information Commissioner) v. Canada (Minister of National Defence), 2011 SCC 25, [2011] 2 S.C.R. 306; Air Atonabee Ltd. v. Canada (Minister of Transport) (1989), 37 Admin. L.R. 245; Merck Frosst Canada & Co. v. Canada (Minister of Health), 2003 FC 1422 (CanLII); Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Twinn v. Canada (Minister of Indian Affairs and Northern Development), [1987] 3 F.C. 368, aff’d (1987), 80 N.R. 263; H.J. Heinz Co. of Canada Ltd. v. Canada (Attorney General), 2006 SCC 13, [2006] 1 S.C.R. 441; SNC‑Lavalin Inc. v. Canada (Minister of Public Works) (1994), 79 F.T.R. 113; Maislin Industries Ltd. v. Minister for Industry, Trade and Commerce, [1984] 1 F.C. 939; Canada Packers Inc. v. Canada (Minister of Agriculture), [1989] 1 F.C. 47; Rubin v. Canada (Canada Mortgage and Housing Corp.), [1989] 1 F.C. 265; AstraZeneca Canada Inc. v. Canada (Minister of Health), 2005 FC 189 (CanLII) (supplementary reasons 2005 FC 648 (CanLII)), aff’d 2006 FCA 241, 353 N.R. 84; Canada (Information Commissioner) v. Canada (Prime Minister), [1993] 1 F.C. 427; F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41; Société Gamma Inc. v. Canada (Department of the Secretary of State) (1994), 56 C.P.R. (3d) 58; R. v. Stewart, [1988] 1 S.C.R. 963; R. I. Crain Ltd. v. Ashton, [1949] O.R. 303, aff’d [1950] O.R. 62; R. v. Hape, 2007 SCC 26, [2007] 2 S.C.R. 292; Zingre v. The Queen, [1981] 2 S.C.R. 392; Ordon Estate v. Grail, [1998] 3 S.C.R. 437; Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; Schreiber v. Canada (Attorney General), 2002 SCC 62, [2002] 3 S.C.R. 269; Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014; Janssen-Ortho Inc. v. Canada (Minister of Health), 2007 FCA 252, 367 N.R. 134, aff’g 2005 FC 1633 (CanLII); Les viandes du Breton Inc. v. Canada (Canadian Food Inspection Agency), 2006 FC 335 (CanLII); Ottawa Football Club v. Canada (Minister of Fitness and Amateur Sports), [1989] 2 F.C. 480; Saint John Shipbuilding Ltd. v. Canada (Minister of Supply and Services) (1990), 67 D.L.R. (4th) 315; Brookfield Lepage Johnson Controls Facility Management Services v. Canada (Minister of Public Works and Government Services), 2004 FCA 214, 322 N.R. 388; Chesal v. Nova Scotia (Attorney General), 2003 NSCA 124, 219 N.S.R. (2d) 139; Lavigne v. Canada (Office of the Commissioner of Official Languages), 2002 SCC 53, [2002] 2 S.C.R. 773; Information Commissioner (Can.) v. Immigration and Refugee Board (Can.) (1997), 140 F.T.R. 140; Hilewitz v. Canada (Minister of Citizenship and Immigration), 2005 SCC 57, [2005] 2 S.C.R. 706; Kwiatkowsky v. Minister of Employment and Immigration, [1982] 2 S.C.R. 856; Re Actors’ Equity Assn. of Australia and Australian Broadcasting Tribunal (No 2) (1985), 7 A.L.D. 584; Watt v. Forests, [2007] NSWADT 197 (AustLII); Cyanamid Canada Inc. v. Canada (Minister of Health & Welfare) (1992), 9 Admin. L.R. (2d) 161; AB Hassle v. Canada (Minister of National Health and Welfare) (1998), 161 F.T.R. 15, aff’d [2000] 3 F.C. 360; Wells v. Canada (Minister of Transport) (1995), 103 F.T.R. 17; Culver v. Canada (Minister of Public Works and Government Services), 1999 CanLII 8959; Bitove Corp. v. Canada (Minister of Transport) (1996), 119 F.T.R. 278; Coradix Technology Consulting Ltd. v. Canada (Minister of Public Works and Government Services), 2006 FC 1030, 307 F.T.R. 116; Canada Post Corp. v. National Capital Commission, 2002 FCT 700, 221 F.T.R. 56; Aventis Pasteur Ltd. v. Canada (Attorney General), 2004 FC 1371, 262 F.T.R. 73; Prud’homme v. Agence canadienne de développement international (1994), 85 F.T.R. 302; Coopérative fédérée du Québec v. Canada (Ministre de l’Agriculture et de l’Agroalimentaire) (2000), 180 F.T.R. 205; Blank v. Canada (Minister of the Environment), 2007 FCA 289, 368 N.R. 279; Canada (Information Commissioner) v. Canada (Solicitor General), [1988] 3 F.C. 551; Montana Band of Indians v. Canada (Minister of Indian and Northern Affairs), [1989] 1 F.C. 143.
By Deschamps J. (dissenting)
Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Prairie Acid Rain Coalition v. Canada (Minister of Fisheries and Oceans), 2006 FCA 31, [2006] 3 F.C.R. 610; Zenner v. Prince Edward Island College of Optometrists, 2005 SCC 77, [2005] 3 S.C.R. 645; Canadian Imperial Bank of Commerce v. Canada (Chief Commissioner, Human Rights Commission), 2007 FCA 272, [2008] 2 F.C.R. 509; Rubin v. Canada (Minister of Health), 2003 FCA 37, 300 N.R. 179; Merck Frosst Canada Ltd. v. Canada (Minister of National Health), 2002 FCA 35 (CanLII); SNC Lavalin Inc. v. Canada (Minister for International Co‑operation), 2007 FCA 397, 77 Admin. L.R. (4th) 1; 3430901 Canada Inc. v. Canada (Minister of Industry), 2001 FCA 254, [2002] 1 F.C. 421; Air Atonabee Ltd. v. Canada (Minister of Transport) (1989), 37 Admin. L.R. 245; Underwood v. Ocean City Realty Ltd. (1987), 12 B.C.L.R. (2d) 199; Janssen‑Ortho Inc. v. Canada (Minister of Health), 2007 FCA 252, 367 N.R. 134.
Statutes and Regulations Cited
Access to Information Act, R.S.C. 1985, c. A‑1, ss. 2(1) , 3 “third party”, 4, 13 to 28, 41, 42, 44, 45, 46, 50, 51, Schedule II.
Access to Information Act Extension Order, No. 1, SOR/89‑207.
Act respecting access to documents held by public bodies and the Protection of personal information, R.S.Q., c. A‑2.1.
Anti‑terrorism Act, S.C. 2001, c. 41, ss. 25 , 29 .
Competition Act, R.S.C. 1985, c. C-34, ss. 11(1) , 74.11(4) .
Criminal Code, R.S.C. 1985, c. C-46, ss. 25.1(9) , 382.1(2) .
Food and Drug Regulations, C.R.C., c. 870, ss. C.01.017, C.08.002.
Food and Drug Regulations, amendment, SOR/95-411.
Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F.31.
Insurance Companies Act, S.C. 1991, c. 47, s. 294(6) .
Regulations Amending the Food and Drug Regulations (Data Protection), SOR/2006‑241.
Security of Information Act, R.S.C. 1985, c. O-5 [formerly Official Secrets Act], s. 19(4) [ad. 2001, c. 41, s. 29].
International Documents
Agreement on Trade‑Related Aspects of Intellectual Property Rights, 1869 U.N.T.S. 299 (being Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, 1869 U.N.T.S. 3), art. 39.
North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, Can. T.S. 1994 No. 2, art. 1711.
Authors Cited
Bastarache, Michel, et al. The Law of Bilingual Interpretation. Markham, Ont.: LexisNexis, 2008.
Brandeis, Louis D. “What Publicity Can Do”, Harper’s Weekly, vol. 58, December 20, 1913, 10.
Canada. Health Canada. Therapeutic Products Programme Guideline — Preparation of Human New Drug Submissions. Ottawa: The Department, 1991.
Canadian Oxford Dictionary, 2nd ed. Edited by Katherine Barber. Don Mills, Ont.: Oxford University Press, 2004, “expect”, “likely”.
Doray, Raymond, et François Charette. Accès à l’information: loi annotée: jurisprudence, analyse et commentaires. Cowansville, Qué.: Yvon Blais, 2001 (feuilles mobiles mises à jour décembre 2010, envoi no 20).
Hughes, Roger T., and Dino P. Clarizio. Halsbury’s Laws of Canada — Patents, Trade Secrets and Industrial Designs. Markham, Ont.: LexisNexis, 2007.
Hughes, Roger T., Dino P. Clarizio and Neal Armstrong. Hughes & Woodley on Patents, 2nd ed. Markham, Ont.: LexisNexis, 2005 (loose‑leaf updated April 2011, release 25).
Parisien, Serge. Les secrets commerciaux et la Loi sur l’accès à l’information du Québec. Montréal: Wilson & Lafleur, 1993.
Sullivan, Ruth. Sullivan on the Construction of Statutes, 5th ed. Markham, Ont.: LexisNexis, 2008.
Vaver, David. “Civil Liability for Taking or Using Trade Secrets in Canada” (1981), 5 Can. Bus. L.J. 253.
APPEALS from a judgment of the Federal Court of Appeal (Desjardins, Noël and Pelletier JJ.A.), 2009 FCA 166, 400 N.R. 1, [2009] F.C.J. No. 627 (QL), 2009 CarswellNat 5226, reversing the decisions of Beaudry J., 2006 FC 1200, 301 F.T.R. 241, 59 C.P.R. (4th) 312, [2006] F.C.J. No. 1504 (QL), 2006 CarswellNat 5635, and 2006 FC 1201 (CanLII), [2006] F.C.J. No. 1505 (QL), 2006 CarswellNat 5644. Appeals dismissed, Deschamps, Abella and Rothstein JJ. dissenting.
Catherine Beagan Flood and Patrick Kergin, for the appellant.
Bernard Letarte and René LeBlanc, for the respondent.
Anthony G. Creber and John Norman, for the intervener.
The judgment of McLachlin C.J. and Binnie, LeBel, Fish, Charron and Cromwell JJ. was delivered by
Cromwell J. —
I. Overview
[1] Broad rights of access to government information serve important public purposes. They help to ensure accountability and ultimately, it is hoped, to strengthen democracy. “Sunlight”, as Louis Brandeis put it so well, “is said to be the best of disinfectants” (“What Publicity Can Do”, Harper’s Weekly, December 20, 1913, 10, at p. 10).
[2] Providing access to government information, however, also engages other public and private interests. Government, for example, collects information from third parties for regulatory purposes, information which may include trade secrets and other confidential commercial matters. Such information may be valuable to competitors and disclosing it may cause financial or other harm to the third party who had to provide it. Routine disclosure of such information might even ultimately discourage research and innovation. Thus, too single-minded a commitment to access to this sort of government information risks ignoring these interests and has the potential to inflict a lot of collateral damage. There must, therefore, be a balance between granting access to information and protecting these other interests in relation to some types of third party information.
[3] The need for this balance is well illustrated by these appeals. They arise out of requests for information which had been provided to government by a manufacturer as part of the new drug approval process. In order to get approval to market new drugs, innovator pharmaceutical companies, such as the appellant Merck Frosst Canada Ltd. (“Merck”), are required to disclose a great deal of information to the government regulator, the respondent Health Canada, including a lot of material that they, with good reason, do not want to fall into their competitors’ hands. But competitors, like everyone else in Canada, are entitled to the disclosure of government information under the Access to Information Act, R.S.C. 1985, c. A-1 (“Act ” or “ATI ”).
[4] The Act strikes a careful balance between the sometimes competing objectives of encouraging disclosure and protecting third party interests. While the Act requires government institutions to make broad disclosure of information, it also provides exemptions from disclosure for certain types of third party information, such as trade secrets or information the disclosure of which could cause economic harm to a third party. It also provides third parties with procedural protections. These appeals concern how the balance struck by the legislation between disclosure and protection of third parties should be reflected in the interpretation and administration of that legislation.
[5] Health Canada received access to information requests relating to certain new drug submissions made to it by Merck. A series of disputes then arose between Merck, a third party to the requests, and the Minister of Health about what information had to be disclosed and what was exempt from disclosure. An avalanche of paperwork and court proceedings ensued. No fewer than five proceedings before the Federal Courts, generating a record of some 67 bound volumes of material, have brought the parties to this Court. At issue are the interpretation and application of several provisions of the Act that govern the disclosure or non-disclosure of third party confidential commercial information.
[6] Merck says that the balance has swung too far in favour of disclosure, both in the way the Act was administered by Health Canada and in the way it was interpreted by the Federal Court of Appeal. Merck has three main complaints. First, it says that Health Canada failed to give it notice and an opportunity to make objections before disclosing some of its confidential information. This complaint raises issues about the threshold under the Act for giving third parties notice before disclosing their information. Second, Merck says that Health Canada failed to conduct an adequate review of the information before making its initial decision that the information was subject to disclosure. The effect of this, Merck claims, is that Health Canada effectively shifted its statutory obligations onto it, resulting in Merck having to expend extensive human and financial resources to deal with the access to information requests. In short, the process itself inflicted undue commercial injury. This point requires analysis of the nature of the government institution’s duties under the Act and the role of the third party when it claims exemption for the information sought. Third, Merck contends that both Health Canada and the Federal Court of Appeal held it to too onerous a standard of proof that the information was exempt. This contention requires an examination of the burden and standard of proof on a third party claiming exemptions from disclosure.
[7] In addition to these main points, Merck also submits that the Federal Court of Appeal applied the wrong standard of appellate review and misapplied the provisions relating to the disclosure of information that can be reasonably severed from exempt material in the same record.
[8] Although my view is that Merck’s appeals should be dismissed, there is nonetheless some merit to its complaints. I will take the opportunity the case provides to set out my understanding of when notice must be given to a third party, what the role of the government institution is in applying the third party exemptions and what are the applicable standards and burdens of proof in relation to them. I will address the standard of review on appeal and how the severance provisions should be applied. Finally, I will deal with the specific rulings about the numerous pages of information still in contention. The main challenge of the appeals is to determine how to interpret and apply the Act so that it strikes the balance Parliament intended between broad rights of access and protection of third party information.
[9] A good deal of background is required in order to understand the precise issues before the Court, which I will provide in the following section.
II. Facts, Proceedings and Issues
[10] The case arises out of two access to information requests made with respect to information submitted by Merck to Health Canada in the course of seeking approval to market two products.
[11] Merck applied to obtain approval to market Singulair®, an asthma medication, by filing a New Drug Submission (“NDS”) in early 1997. To obtain Health Canada’s approval, Merck had to make full and frank disclosure of all of its knowledge and information about the drug. Approval was granted approximately a year and a half later and, as a result, the drug was marketed and sold in Canada. In 1999, Merck applied for approval of Singulair® in a 4‑mg dose that would extend the permitted indications for the drug to patients two to five years of age. This required the submission of a Supplementary New Drug Submission (“SNDS”). An SNDS is submitted to request the authorization to market a drug that has already been approved and for which certain changes have been made, for instance and as in this case, proposing a new dosage. This process of approval, as with an NDS, required Merck to submit a great deal of information. The new dosage was approved and the drug marketed.
[12] In due course, Health Canada received access to information requests relating to both Merck’s NDS and SNDS. With respect to the NDS, the requester sought access to the Notice of Compliance, the Comprehensive Summary, the Health Canada reviewers’ notes, and the correspondence between Health Canada and Merck. With respect to the SNDS, the requester asked for all releasable records.
[13] As we shall see, these access to information requests led to lengthy exchanges between Merck and Health Canada about how Health Canada was processing them and what documents were or were not subject to disclosure, leading ultimately to extensive court proceedings.
[14] These appeals engage two quite complex legislative and regulatory schemes, one relating to new drug approval and the other to access to information. I will, therefore, briefly outline these schemes. I will then set out a brief account of how Health Canada addressed the access to information requests, a brief summary of the ensuing court proceedings in the Federal Courts leading to the appeals to this Court and a statement of the precise issues that must be resolved.
A. The New Drug Approval Process
[15] To seek approval to market a new drug in Canada, Merck was required to file an NDS which must comply with the Food and Drug Regulations, C.R.C., c. 870, s. C.08.002. This submission is a comprehensive disclosure of all of Merck’s information on the new drug. Amongst other things, it must submit a list of ingredients, the details of the methods of manufacture, details of the tests to be applied to control the potency, purity, stability and safety of the new drug, and detailed reports of the tests made to establish safety. Some of this information is made public upon approval of the new drug. Merck was also required to submit a statement of all representations to be made for the promotion of the new drug respecting the administration of the proposed dosage, the claims to be made and the contra-indication and side effects of the new drug.
[16] Health Canada has issued quite detailed guidelines for the preparation of new drug submissions. The submission is to be in five main parts:
Part 1 — Master Volume;
Part 2 — Chemistry and Manufacturing, which sets out detailed information about the drug substance;
Part 3 — Comprehensive Summary, which sets out investigational studies relating to pharmacology, toxicology, microbiology, published and unpublished investigational articles, clinical studies and research and development of the drug. The Comprehensive Summary is the heart of the NDS, consisting of factual, concise descriptions of the methodology, results, conclusions and evaluations of the relevant investigational animal and clinical human studies;
Part 4 — Sectional Reports detailing investigational and clinical studies; and
Part 5 — Raw data from preclinical and clinical studies.
(Therapeutic Products Programme Guideline — Preparation of Human New Drug Submissions (1991))
[17] Once submitted, Health Canada reviews and evaluates this information. This produces what is referred to in the record as “reviewers’ notes”. During the review process, the reviewers of course comment on the information provided and frequently pose questions and seek additional information from the manufacturer. These requests, along with other communications passing between Health Canada and the manufacturer constitute what has been referred to in the record as correspondence. Before this Court, information in three types of documents is at issue: the Comprehensive Summary, the reviewers’ notes and the correspondence.
[18] When all this information has been reviewed by Health Canada, a publicly available Product Monograph will be approved. This is a scientific document which contains the information for safe and effective use of the drug. It is based on data summarized in the Comprehensive Summary and is drafted and redrafted as Health Canada and the manufacturer discuss the product and exchange information. The final Product Monograph may not include all of the information exchanged between the parties. Rather, it is the result of discussions and compromise between them. It is published as part of the Notice of Compliance issued by Health Canada.
[19] An SNDS follows a similar process.
B. Access to Information Legislation and Process
[20] It is useful now to turn to a brief review of the legislative provisions that governed Health Canada’s response to the access to information requests relating to Merck’s NDS and SNDS. I have set out the most relevant provisions of the Act in the Appendix to these reasons.
[21] The purpose of the Act is to provide a right of access to information in records under the control of a government institution. The Act has three guiding principles: first, that government information should be available to the public; second, that necessary exceptions to the right of access should be limited and specific; and third, that decisions on the disclosure of government information should be reviewed independently of government (s. 2(1) ).
[22] In Dagg v. Canada (Minister of Finance