Newfoundland and LabradorNewfoundland and Labrador news
Updated: Tue, 11 Feb 2014 18:37:19 GMT | By CBC News, cbc.ca

Bill 29 court case may put price tags off-limits to public



A case dealing with the impact of Bill 29 on the release of business information is currently before the Newfoundland and Labrador Supreme Court. CBC

A case dealing with the impact of Bill 29 on the release of business information is currently before the Newfoundland and Labrador Supreme Court. CBC

The Supreme Court of Newfoundland and Labrador is being asked to rule on whether Bill 29 puts the price of office supplies bought by Memorial University off-limits — a case that could set a precedent limiting what citizens are permitted to know about how their tax dollars are spent.

The provincial government won’t say whether Bill 29 was meant to do that.

Steve Kent — the minister in charge of the Office of Public Engagement, which oversees the law — stressed to CBC Investigates that the matter remains before the courts.

None of the parties involved in the pending case about MUN are speaking publicly.

But court filings outline the genesis and nature of the dispute — a dispute that could have far-reaching impacts on the public’s right to know.

Bid for MUN business

In 2011, Dicks and Company lost the Memorial office supplies contract to Staples Advantage, the business-to-business division of Staples.

According to Dicks’ court filings, the winner of the bid for contracted items also got all “non-contracted” purchases from the university, which accounted in the past for much more business.

Dicks alleges that Staples was providing contract items at a financial loss and making up for the difference through higher prices on those “far more lucrative” non-contract items. Those allegations have not been proven in court.

Because of these concerns, Dicks wanted to get the pricing information for all items MUN was buying from Staples, contract and non-contract.

MUN said no, citing a part of the law amended by Bill 29 to strengthen protections over business information.

Dicks appealed to the information commissioner, who recommended the prices be released.

MUN agreed to do so. But Staples then went to court to stop that from happening.

In a court application seeking to deny the information’s release, Staples specifically cited the “business interests” section of the law changed by Bill 29.

“Releasing Staples’ pricing information would allow our competitors to understanding [sic] our exact price point on the products we sell,” Stan Dabic, a Staples Advantage vice-president, wrote in an Oct. 23, 2012, letter to MUN.

“Competitors could create a database of Staples’ pricing, and then lower their prices just enough to undercut Staples (as opposed to offering their best price.) Competitors would use this information to their advantage to bid on future contracts and would be given an unfair advantage to win future business. In particular, competitors could use this information to undercut the current pricing provided to Memorial University, resulting in a loss of sales to Staples.”

Dicks and Company disagrees with that rationale in its court filings. The company acknowledges that it has a financial interest in the matter, but also stresses the importance of accountability.

“Dicks’ greater interest in this dispute, however, is the consequences which will flow from the disclosure of this information, namely, the potential uncovering of unfair or unaccountable office supply purchasing by Memorial from Staples,” its court filings note.

“If, as suspected by Dicks, Staples is ousting its competition in contract bids with under-market prices in order to later charge higher prices on ‘non-contract’ items, the sought-after information will be essential to confirm its suspicions. The disclosure of this information would presumably cause Memorial to adapt its office supplies tendering procedures, giving Dicks a fair chance at a successful bid for the contract and the $525,000 of business opportunities that would result.”

Watchdog recommends disclosure

In a June 2013 report, Newfoundland and Labrador information commissioner Ed Ring recommended that the pricing information be disclosed.

“As one of its main purposes, access to information legislation is meant to promote accountability and transparency,” Ring wrote in his report.

“Public bodies are spending public funds and the public should be able to know how those funds are being spent. The public should be able to ‘check up on’ a public body to ensure public funds are spent in a fiscally responsible manner. This is how public bodies are made accountable.”

Ring’s report noted that: “if the actual prices that are being paid by the public body are not in line with prices set out in a bid then there is a problem — one which may never come to light if the actual purchases of a public body are shielded from disclosure.”

He said the revised law is not meant to conceal the prices of goods and services bought by public bodies.

“Asking a public body to disclose how much it pays for the goods and services purchased from a third party simply fulfills the accountability purpose of the [law],” Ring wrote.

“Prior to Bill 29, this type of information was available and it should still be available post-Bill 29.”

'You always have to strike a balance'

Steve Kent, the minister in charge of the province's Office of Public Engagement, declined to address whether this is information the public has the right to know, or information that should be protected.

"You always have to strike a balance between the two," Kent said.

"This current matter that we're discussing is a matter that's before the courts right now. So I can't comment on the specifics of the case that is before the courts. What I can tell you is that as a government, we want to see as much information released as possible, wherever possible."

Kent says a pending review of Bill 29 will provide a broad look at perceived issues with the law.

"We also are conducting this review process to ensure that if there are any concerns with the legislation, that those concerns can be addressed," Kent said.

Before Bill 29, there was a tough three-part test that had to be met before business information was considered off-limits.

Bill 29 reduced that to a simple one-part test, significantly lowering the threshold.

"The intention was to provide better protection for commercially-sensitive information," Kent noted.

The province retains the right to change the law, whatever the court decides.

Bill 29 overturned a prior court decision that went against the government.

Attorney General Felix Collins defended that option when he rolled out Bill 29 nearly two years ago.

“Government’s prerogative is to make laws,” he said when questioned by reporters in June 2012.

“Governments make laws.”

Bill 29 review promised

The Tory administration has taken a public hammering over perceptions of excessive secrecy related to Bill 29.

Last month, Premier Tom Marshall announced that a scheduled review of the legislation would be moved forward, due to public concerns.

“I've heard from people who have not necessarily talked to me about specific parts of the legislation, but who have indicated to me that there's a concern that the government is not as open, as transparent, as it should be,” Marshall told reporters.

“We take that very seriously and we want to correct it.”

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