In the commercial context, confidential or proprietary
information disclosed to a customer is usually protected by
non-disclosure obligations found in non-disclosure agreements or
contracts. Parties can rely on these provisions, and enforce them
as necessary, to ensure protection of their information.
It does not work the same in the government context.
In Part 1 of our series, we explain why and what to consider before
disclosing information to the federal government.
Open and Transparent Government Versus Commercially Confidential Information
All public sector institutions in Canada are accountable to the public. One of the ways accountability is assured is through transparency of government information and action. Accountability and transparency are fundamental elements in open and democratic society. Even institutions tasked with matters of national security importance are accountable and will have obligations of transparency.
In the context of procurement, bidders and contractors are frequently required to provide financial, commercial, scientific, technical or proprietary information, as well as personal information about their employees and contractors. Disclosing this information may be a mandatory requirement for bidding, necessary to properly execute the work under a contract, or to respond to a contract audit. For the government, this information may be necessary to conduct proper due diligence or to meet legislative, regulatory or policy obligations before contract award, or following contract award.
When information is disclosed to the federal government, even if confidentiality provisions are provided for in request for proposals (RFP), non-disclosure agreements (NDA) or contracts, the Access to Information Act - and the government's obligations of openness and transparency - remain in play because federal government departments and agencies subject to the Act cannot “contract out” of the legislation1.
Bidders and contractors may see clauses such as these in RFPs and contracts:
Standard Instructions - Goods or Services - Competitive Requirements(2003)
All bids will be treated as confidential, subject to the provisions of the Access to Information Act (R.S. 1985, c. A-1) and the Privacy Act (R.S., 1985, c. P-21).
General Conditions: Higher Complexity – Services(2035)
Subject to the Access to Information Act, R.S., 1985, c. A-1, and to any right of Canada under the Contract to release or disclose, Canada must not release or disclose outside the Government of Canada any information delivered to Canada under the Contract that is proprietary to the Contractor or a subcontractor.
The Access to Information Act
A common misperception is that the Access to Information Act is “non-disclosure” legislation (i.e., it requires the government to withhold information). In reality, the Act is focused on achieving government accountability and transparency through disclosure of information under the control of government that is not otherwise exempt under the Act2.
Canadians have a “right of access” to government information in records under the control of a government institution and may submit requests for information under the Act.
Under the Act, there is a presumption of disclosure, unless a statutory exemption applies.
If the federal government believes that the confidential commercial information of a third party may be disclosed to the public as part of an access to information request, the federal government must first provide notice to the third party, at which point the third party will have the opportunity to formally respond and make legal arguments as to why its confidential commercial information is exempt under the Act.
We will review the federal access to information process in relation to third parties, particularly those bidding on government contracts, in an upcoming bulletin.
Key Considerations Before Disclosing Confidential Information to the Government
In addition to the customary considerations involving disclosure of confidential information, several key questions should be considered:
- Is the information required to be disclosed?
- Is the information subject to confidentiality provisions
(Standard Acquisition Clauses and Conditions,
non-disclosure agreements etc.)?
- If yes, are the confidentiality provisions sufficient in light of the importance of the confidential information? For example, can the recipient distribute the information within government unrestricted or is the information restricted from distribution and disclosure to identified individuals or teams? To whom can the government disclose the confidential information (including outside of government)? Are these recipients bound by confidentiality agreements?
- Is there an obligation to return confidential information or to destroy it once the purpose for which it was disclosed ends?
- Does the information contain an appropriate confidentiality and proprietary notice for disclosure to the federal government? Is the notice properly placed in the documents?
- Is a proper confidentiality notice embedded in all outgoing emails?
- For information disclosed orally or visually, what type of verbal notice is provided before disclosure and what type of written follow-up notice is provided?
- Are employees properly briefed on the obligations with respect to confidential and proprietary information and the implications of the Access to Information Act?
Bidders and contractors should always seek legal advice before disclosing confidential information to ensure that they clearly understand the Act and its implications and to ensure information is properly marked and best protected from disclosure.
Footnotes
1. This bulletin is concerned with departments, agencies and Crown corporations that are subject to the Act.
2. Access to Information Act (R.S.C., 1985, c. A-1), section 2, reads in part:
2 (1) The purpose of this Act is to enhance the accountability and transparency of federal institutions in order to promote an open and democratic society and to enable public debate on the conduct of those institutions.
(2) In furtherance of that purpose,
(a) Part 1 extends the present laws of Canada to provide a right of access to information in records under the control of a government institution in accordance with the principles that government information should be available to the public, that necessary exceptions to the right of access should be limited and specific and that decisions on the disclosure of government information should be reviewed independently of government; and […]
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.