Judgments

[2000] 3 F.C. 82

A-121-99

IN THE MATTER OF the Privacy Act, R.S.C., 1985, c. P-21, and Section 108 of the Customs Act, R.S.C., 1985, c. C-1;

AND IN THE MATTER OF certain complaints received by the Office of the Privacy Commissioner of Canada in respect of the communication of personal information collected by the Department of National Revenue to the Canada Employment and Insurance Commission;

AND IN THE MATTER OF an application by way of special case stated for opinion of the Federal Court, Trial Division pursuant to paragraph 17(3)(b) of the Federal Court Act, R.S.C., 1985, c. F-7.

Indexed as: Privacy Act (Can.) (Re) (C.A.)

Court of Appeal, Décary, Sexton and Evans JJ.A.— Ottawa, February 8 and 9, 2000.

Privacy — Disclosure of information by Revenue Canada (Customs) to CEIC pursuant to memorandum of understanding regarding data capture and release of customs information on travellers (program aimed at catching those receiving EI benefits while out of Canada) authorized by Privacy Act, s. 8 and Customs Act, s. 108 — Privacy Act, s. 8(2) not restricting disclosure of personal information only to purpose for which collected — Under Privacy Act, s. 8(2)(b), Parliament may, by statute, confer on any Minister wide discretion as to disclosure of information his department has collected.

Customs and Excise — Customs Act — Disclosure of information by Revenue Canada (Customs) to CEIC pursuant to memorandum of understanding regarding data capture and release of customs information on travellers (program aimed at catching those receiving EI benefits while out of Canada) authorized by Privacy Act, s. 8 and Customs Act, s. 108 — In exercising discretion under Customs Act, s. 108, Minister duly took into consideration objectives of Privacy Act.

Employment insurance — Disclosure of information by Revenue Canada (Customs) to CEIC pursuant to memorandum of understanding regarding data capture and release of customs information on travellers (program aimed at catching those receiving EI benefits while out of Canada) authorized by Privacy Act, s. 8 and Customs Act, s. 108 — In self-reporting scheme such as EI, Commission must be able to collect information from outside source when claimant fails to voluntarily report it.

In an application by way of a special case stated for the opinion of the Federal Court Trial Division, the Motions Judge found that the disclosure of personal information by the Department of National Revenue to the Canada Employment Insurance Commission (CEIC) pursuant to an ancillary Memorandum of Understanding for data capture and release of customs information on travellers was not authorized by section 8 of the Privacy Act and section 108 of the Customs Act. This was an appeal from that opinion.

The CEIC used this data, at least some of which is “personal” within the meaning of the Privacy Act, to learn of residents who were outside of Canada when in receipt of EI benefits, contrary to the Employment Insurance Act. With this information, government officials were able to recover overpayments and impose penalties.

The stated question dealt solely with the interpretation of the relevant statutory provisions, the parties having chosen to bring Charter issues separately in a companion case.

Held, the appeal should be allowed and the stated question answered in the affirmative.

The Court (per Décary J.A.): The Motions Judge erred in answering the stated question in the negative for the reason that the blanket authorization given by the MNR in 1991 was an invalid exercise of discretion. The issue before the Motions Judge concerned the 1997 Memorandum of Understanding on data capture and release which constituted authorization independent from that given in 1991. The validity of the 1991 authorization was not in issue.

The argument that the Privacy Act requires that personal information be disclosed only for the purpose for which it was collected or for a use consistent with that purpose was without merit. The requirement that a government institution such as the Commission collect personal information intended to be used for an administrative purpose directly from the individual to whom it relates (subsection 5(1) of the Act) was not absolute. In a self-reporting scheme such as employment insurance, the Commission must be able to collect information from an outside source when a claimant fails to voluntarily report it. Second, the wide range of the exceptions permitted under subsection 8(2) unquestionably attests to the intention of Parliament to allow disclosure of personal information to persons who have no connection whatsoever with the disclosing institution and for purposes other than those for which the information was collected.

The Privacy Act clearly contemplates, and distinguishes between, the collection of information, which can only be for purposes related to the activity of the institution — in this case, direct collection by Customs of the information and indirect collection by the Commission, through Customs, of that part of the information which is relevant to the activity of the Commission — and the disclosure of information, which, in most cases, is for purposes other than those for which it was collected and for purposes related to the activity of the requesting institution.

Under paragraph 8(2)(b), Parliament may, by statute, confer on any Minister a wide discretion as to disclosure of information his department has collected, such discretion, of course, to be exercised, as it was herein, in conformity with the purpose of the Privacy Act. By using words of wide import in paragraph 8(2)(b) of the Privacy Act and eventually in paragraph 108(1)(b) of the Customs Act, Parliament left itself a considerable margin of manoeuvre with respect to its own legislation and took advantage of it.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44].

Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, s. 108(1) (as am. by S.C. 1995, c. 41, s. 28) (a),(b),(c).

Department of Human Resources Development Act, S.C. 1996, c. 11, s. 80.

Employment Insurance Act, S.C. 1996, c. 23, s. 37(b).

Employment Insurance Regulations, SOR/96-332, s. 55.

Federal Court Act, R.S.C., 1985, c. F-7, s. 17(3)(b).

Interpretation Act, R.S.C., 1985, c. I-21, s. 24(2)(c) (as am. by S.C. 1992, c. 1, s. 89).

Privacy Act, R.S.C., 1985, c. P-21, ss. 4, 5, 7, 8(1),(2)(a),(b),(d),(e),( f),(l),(m)(i), 11, Sch. (as am. by S.C. 1996, c. 11, s. 80).

CASES JUDICIALLY CONSIDERED

REFERRED TO:

Smith v. Canada (Attorney General), [2000] F.C.J. No. 174 (C.A.) (QL).

APPEAL from the opinion of the Trial Division ([1999] 2 F.C. 543 that the disclosure of personal information by the Department of National Revenue to the Canada Employment Insurance Commission pursuant to an ancillary Memorandum of Understanding for data capture and release of customs information on travellers was not authorized by section 8 of the Privacy Act and section 108 of the Customs Act. Appeal allowed.

APPEARANCES:

Brian J. Saunders for Attorney General of Canada, appellant.

Brian A. Crane, Q.C. for Privacy Commissioner of Canada, respondent.

SOLICITORS OF RECORD:

Deputy Attorney General of Canada for Attorney General of Canada, appellant.

Gowling, Strathy & Henderson, Ottawa, for Privacy Commissioner of Canada, respondent.

The following are the reasons for judgment of the Court delivered orally in English by

[1]        Décary J.A.: This is an appeal from an opinion of the Trial Division reported at [1999] 2 F.C. 543 (T.D.). At issue in the Court below was an application by way of a special case stated for opinion of the Court pursuant to paragraph 17(3)(b) of the Federal Court Act [R.S.C., 1985, c. F-7]. The question put to the Court was the following one [at page 561]:

Is the disclosure of “personal information” by the Department of National Revenue to the Canada Employment Insurance Commission pursuant to the Ancillary Memorandum of Understanding for data capture and release of customs information on travellers authorized by section 8 of the Privacy Act and section 108 of the Customs Act?

The answer given by the Motions Judge was “no”.

[2]        The “personal information” referred to in the stated question is information disclosed in the E-311 Traveller Declaration Card which persons entering Canada by air must complete and submit on arrival to an officer of the Department of National Revenue. The specific information at issue consists of the traveller’s name, date of birth, postal code, purpose of travel, and dates of departure from and return to Canada. It is not disputed that at least some of this information is “personal” within the meaning of the Privacy Act [R.S.C., 1985, c. P-21]. The information made available by the Department (Customs) to the Canada Employment Insurance Commission (the Commission) is electronically matched with the Commission’s database of employment insurance claimants. The Commission retains the information in respect of those Canadian residents who were outside Canada and who received employment insurance benefits. Claimants are not entitled to receive benefits under paragraph 37(b) of the Employment Insurance Act [S.C. 1996, c. 23] for any period during which they are not in Canada unless they come within an exception prescribed by section 55 of the Employment Insurance Regulations, SOR/96-332. The purpose of the program in issue is to identify employment insurance claimants who fail to report that they are outside Canada while receiving benefits with a view to recovering any resulting overpayment, and where appropriate, to imposing penalties.

[3]        It is common ground that at the time of filing their initial claim for benefits, claimants are routinely informed of their rights and obligations while receiving benefits. These include the obligations: to be available for work at all times; to genuinely search for work at all times; and to report any absences from Canada immediately. Claimants are informed that they can discharge the last obligation by advising their Canada Employment Centre or by noting their absence on their bi-weekly report cards.

[4]        Prior to April 1997 Form E-311 contained the words “We will use your answers to the following questions for customs control purposes, and to compile statistical data”. The form was amended in April 1997 to delete this sentence and replace it with: “The personal information declared on this form is maintained in information bank number RC PPU 043”.

[5]        Personal information bank number RC PPU 043 refers to a Revenue Canada information bank. Personal information banks are maintained by government institutions pursuant to section 11 of the Privacy Act. The banks provide a summary of the personal information held by the institutions. They also describe the uses made of the information. At least once a year, a listing of personal information banks is published by the Treasury Board Secretariat in a document entitled InfoSource. The PC PPU 043 bank states that information provided on an E-311 Card may be used by Revenue Canada and by other government departments and investigative agencies for the administration and enforcement of Acts of Parliament.

[6]        The stated question deals solely with the statutory interpretation of some provisions of the Customs Act [R.S.C., 1985 (2nd Supp.), c. 1] and of the Privacy Act. The parties have chosen to bring Charter [Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, appendix II, No. 44]] issues separately in the companion case of Smith v. Canada (Attorney General), [2000] F.C.J. No. 174 (C.A.) (QL) which involves a concrete dispute between a claimant and the Commission and which has been heard together with this appeal. That case is disposed of in separate reasons filed this very day.

[7]        The provisions at issue read as follows:

Privacy Act [sections 4, 5(1), 7(a),(b), 8(1),(2)(a),(b),(d), (e),(f),(l),(m)(i)]

4. No personal information shall be collected by a government institution unless it relates directly to an operating program or activity of the institution.

5. (1) A government institution shall, wherever possible, collect personal information that is intended to be used for an administrative purpose directly from the individual to whom it relates except where the individual authorizes otherwise or where personal information may be disclosed to the institution under subsection 8(2).

…

7. Personal information under the control of a government institution shall not, without the consent of the individual to whom it relates, be used by the institution except

(a) for the purpose for which the information was obtained or compiled by the institution or for a use consistent with that purpose; or

(b) for a purpose for which the information may be disclosed to the institution under subsection 8(2).

8. (1) Personal information under the control of a government institution shall not, without the consent of the individual to whom it relates, be disclosed by the institution except in accordance with this section.

(2) Subject to any other Act of Parliament, personal information under the control of a government institution may be disclosed

(a) for the purpose for which the information was obtained or compiled by the institution or for a use consistent with that purpose; or

(b) for an//y purpose in accordance with any Act of Parliament or any regulation made thereunder that authorizes its disclosure;

…

(d) to the Attorney General of Canada for use in legal proceedings involving the Crown in right of Canada or the Government of Canada;

(e) to an investigative body specified in the regulations, on the written request of the body, for the purpose of enforcing any law of Canada or a province or carrying out a lawful investigation, if the request specifies the purpose and describes the information to be disclosed;

(f) under an agreement or arrangement between the Government of Canada or an institution thereof and the government of a province, the government of a foreign state, an international organization of states or an international organization established by the governments of states, or any institution of any such government or organization, for the purpose of administering or enforcing any law or carrying out a lawful investigation;

…

(l) to any government institution for the purpose of locating an individual in order to collect a debt owing to Her Majesty in right of Canada by that individual or make a payment owing to that individual by Her Majesty in right of Canada; and

(m) for any purpose where, in the opinion of the head of the institution,

(i) the public interest in disclosure clearly outweighs any invasion of privacy that could result from the disclosure, or

Customs Act [section 108(1) (as am. by S.C. 1995, c. 41, s. 28), (a),(b),(c)]

108. (1) An officer may communicate or allow to be communicated information obtained under this Act or the Customs Tariff, or allow inspection of or access to any book, record, writing or other document obtained by or on behalf of the Minister for the purposes of this Act or the Customs Tariff, to or by

(a) any officer or any person employed in the Department of National Revenue;

(b) any person, or any person within a class of persons, that the Minister may authorize, subject to such conditions as the Minister may specify; or

(c) any person otherwise legally entitled thereto.

[8]        The Motions Judge answered the stated question in the negative [at page 560] essentially for the reason that a blanket authorization issued by the Minister of National Revenue on July 26, 1991 was [at page 560] “an invalid exercise of discretion” as an unlawful fetter on the future exercise of discretion and as based on irrelevant considerations. The issue before her, however, was not with respect to that blanket authorization, but to “the Ancillary Memorandum of Understanding for data capture and release of customs information on travellers” entered into on April 26, 1997, by the Department of National Revenue, on the one hand, and the Canada Employment Insurance Commission, on the other hand. That Ancillary Memorandum supplemented an existing Memorandum of Understanding on the Release of Information entered into by the parties on February 17, 1995, which Memorandum replaced a revised agreement of March 1992 between the same parties and was said to be made pursuant to the 1991 Ministerial Authorization. Nowhere in her reasons has the Motions Judge referred to the 1997 Ancillary Memorandum.

[9]        While it is technically true that the Ministerial Authorization of 1991 was the first step in the process leading to the actual data-matching program, the fact is that the 1997 Ancillary Memorandum constitutes an authorization of its own, independent from that given in 1991, as is evident from its “Introduction” which states as follows:

Recognizing that Section 108 of the Customs Act allows for the release of customs information to any person that the Minister may authorize

…

Therefore, Revenue Canada hereby agrees to data capture information from the customs travellers information cards and to release the information to the Commission for purposes of the administration and enforcement of the Employment Insurance Act. [A.B., Vol. 2, at pp. 256-257.]

For the purpose of answering the stated question, the 1991 Ministerial Authorization, in our respectful view, was either to be ignored or be read simply as background to the 1997 Ancillary Memorandum. The Motions Judge did neither. We express no view as to the validity of the 1991 Ministerial Authorization.

[10]      The Privacy Commissioner raises a rather technical argument with respect to the validity of the 1997 Ancillary Memorandum. We doubt whether this argument can be raised in this case in view of the wording of the stated question but be that as it may, it has no merit. As the argument goes, paragraph 108(1)(b) of the Customs Act requires an authorization to be given by the Minister and in the case at bar the 1997 Ancillary Memorandum is described as being an authorization by “Revenue Canada” and has been signed by the Deputy Minister of National Revenue “for and on behalf of the Department of National Revenue”. The latter issue is resolved by paragraph 24(2)(c) of the Interpretation Act, R.S.C., 1985, c. I-21, [as am. by S.C. 1992, c. 1, s. 89] which provides that “Words directing or empowering a minister of the Crown to do an act or thing … include … his … deputy”. As regards the use of the words “Revenue Canada” instead of the word “Minister”, the day has fortunately not come yet for this Court to give any credence to such a literal approach in a case such as this one.

[11]      Another argument raised by the Privacy Commissioner is that paragraph 108(1)(b) of the Customs Act is not what is contemplated by paragraph 8(2)(b) of the Privacy Act because it refers to “information” and not to “personal information”. This argument also fails. Subsection 108(1) of the Customs Act refers to “information obtained under this Act” and there is simply no reason why the word “information” should not be interpreted in its plain, general, encompassing meaning rather than being restricted, as suggested by counsel, to the limited meaning of “commercial information”. An Act of Parliament authorizing the disclosure of information may come within paragraph 8(2)(b) of the Privacy Act even though it does not expressly designate the information in question as “personal information”.

[12]      A more serious argument is raised by the Privacy Commissioner. It revolves around the purposes for which a federal institution may disclose personal information under its control. According to the Commissioner, paragraph 8(2)(b) of the Privacy Act, when read in the context of the entire Act and particularly of section 7, requires that personal information be disclosed only for the purpose for which it was collected or for a use consistent with that purpose. We do not read the Act in the same way as the Commissioner.

[13]      Section 4 provides that “[n]o personal information shall be collected by a government institution unless it relates directly to an operating program or activity of the institution”. That obligation clearly relates to the collection of information, not to its disclosure.

[14]      Subsection 5(1) requires a government institution such as the Commission[1] to “collect personal information that is intended to be used for an administrative purpose directly from the individual to whom it relates”. The requirement, however, is not absolute. First, it is qualified by the words “wherever possible”. Surely, in a self-reporting scheme such as the employment insurance scheme, the Commission must be able to collect information from an outside source when a claimant fails to voluntarily report it. Second, the requirement is expressly made subject to the provisions of subsection 8(2), which itself is “subject to any other Act of Parliament” and which enables the Commission to access personal information collected by another government institution—in this case, Customs—in a large number of circumstances. The wide range of the exceptions permitted under subsection 8(2) unquestionably attests to the intention of Parliament to allow disclosure of personal information to persons who have no connection whatsoever with the disclosing institution and for purposes other than those for which the information was collected.

[15]      Section 7 prescribes two possible uses of personal information collected by a government institution. The first use, (a), is for the purpose for which the information was obtained or a use consistent with that purpose. The second use, (b), is for a purpose for which the information may be disclosed to the institution under subsection 8(2). The first use is related to the purpose of the collection; the second use, clearly, is not.

[16]      Subsection 8(2) contemplates three types of disclosure: that, allowed under paragraph (a), for the very purpose of the collection or a use consistent with that purpose; that, expressly allowed under paragraphs (b) and (m), for “any purpose”, and that, expressly allowed under paragraphs (c), (d), (e), (f), (g), (h), (i), (j), (k) and (l), for specific purposes therein described, some of which are totally unrelated to the purpose for which the information was collected.

[17]      The Privacy Act therefore clearly contemplates, and distinguishes between, the collection of information, which can only be for purposes related to the activity of the institution—in this case, direct collection by Customs of the information found in Form E-311 and indirect collection by the Commission, through Customs, of that part of the information found in Form E-311 which is relevant to the activity of the Commission—and the disclosure of information, which, in most cases, is for purposes other than those for which it was collected and for purposes related to the activity of the requesting institution.

[18]      In this context, paragraph 8(2)(b) cannot but be interpreted as being a provision that enables Parliament to confer on any Minister (for example) through a given statute a wide discretion, both as to form and substance, with respect to the disclosure of information his department has collected, such discretion, of course, to be exercised in conformity with the purpose of the Privacy Act. Paragraph 8(2)(b) could obviously have been phrased differently and its interpretation might have been made easier had it expressly stated, as did paragraph (f) with respect to agreements or arrangements between a federal government institution on the one hand and a provincial government, a foreign government or an international organization on the other hand, that agreements or arrangements could be made between two federal government institutions for the purpose of administering or enforcing any law of Canada. But one can simply not conclude from Parliament’s alleged failure, in paragraph 8(2)(b), to be specific when it clearly intended to be general, that federal government institutions cannot be authorized under that paragraph to disclose to other federal institutions personal information that, without any express restriction, they can disclose to foreign institutions. In using words of wide import in paragraph 8(2)(b) of the Privacy Act and eventually in paragraph 108(1)(b) of the Customs Act, Parliament clearly left itself a considerable margin of manoeuvre with respect to its own legislation and took advantage of it.

[19]      To accept the interpretation suggested by the Privacy Commissioner would be to rob paragraph 8(2)(b) of the Privacy Act and paragraph 108(1)(b) of the Customs Act of most of their significance. We add in passing that subsection 108(1) of the Customs Act refers to “the purposes” of the Act when it deals with collection and does not do so when it deals with disclosure.

[20]      In the end, therefore, we are of the view that paragraph 8(2)(b) of the Privacy Act has a much wider meaning than that suggested by the Commissioner and that paragraph 108(1)(b) of the Customs Act gives the Minister of National Revenue the discretionary power to authorize the arrangement at issue with the Canadian Employment Insurance Commission.

[21]      In exercising her discretion under paragraph 108(1)(b) of the Customs Act, the Minister of National Revenue had to take into consideration the objectives of the Privacy Act. She satisfied herself that the disclosure sought by the Commission was for a permissible use and that no more information than that needed by the Commission would be disclosed. In the Ancillary Memorandum of Understanding dated April 26, 1997, the Commission agrees to use the information communicated by Customs solely for the purposes of the Employment Insurance Act and not to disclose the information to any third parties. The Commission also undertakes to protect the information provided in accordance with conditions set out in the 1995 Memorandum of Understanding. Those conditions, among other matters, require an adequate trail for auditing access to information provided, limit the personnel to whom the information could be released, set out procedures for a security audit at the request of Customs, and provide for the eventual destruction of the information. In the circumstances of this case, we are satisfied that the exercise by the Minister of her discretion is unimpeachable.

Disposition

[22]      The appeal will therefore be allowed, the opinion of the Motions Judge will be set aside and the stated question will be answered in the affirmative. There will be no order as to costs.

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