The Far Reach of Freedom of Information to Local Government Subsidiaries

Local governments that have created corporations to operate their activities have an interest in the outcome of the Office of the Information and Privacy Commissioner for British Columbia (Order F09-08) – Corporation of the Village of Burns Lake, April 30, 2009, where two applicants made requests for information under the B.C. Freedom of Information and Protection of Privacy Act (FIPPA) to the Village of Burns Lake (the Village) and to two other entities – the Burns Lake Community Forest Ltd. (BCLF) and ComFor Management Services Ltd. (ComFor). The information requested related to several entities connected with the Burns Lake Community Forest in northern British Columbia.

The Village had created BCLF as a vehicle to enter into a long-term agreement with the Province of British Columbia to manage the operation of a community forest. The Village initially owned 100% of the shares of BCLF and appointed all of its directors. The Village, solely for tax purposes, subsequently transferred all BCLF shares to ComFor, another wholly owned subsidiary, all of whose directors were also appointed by the Village.

ComFor’s articles of incorporation were subject to the approval of the Inspector of Municipalities, who directed that ComFor should be subject to FIPPA.

When the information requests were made, the Village passed on the request to BCLF and ComFor as the appropriate parties to provide the information. BCLF and ComFor argued that they were not subject to FIPPA, as they were neither listed as public bodies under Schedule 2 of FIPPA, nor captured by the definition of “local government body” found in the legislation.

The issue in this case was whether BCLF and ComFor were “local government bodies” under FIPPA. To be “local government bodies” for the purpose of the legislation, it was a requirement that all the members and officers of the companies be appointed by, or under the authority of a municipality. BCLF and ComFor argued that the Village was just a “figure-head shareholder” of ComFor, and held the shares under various constraints and agreements. The companies argued these limitations were significant with respect to the question of whether ComFor’s members and officers were appointed under the authority of the Village.

The Commissioner considered a recent Ontario Court of Appeal decision where the Toronto Economic Development Corp. (TEDCO), an entity incorporated by the City of Toronto to carry out its economic policy, contended that it was not subject to the Ontario Municipal Freedom of Information Act (MFIPPA). MFIPPA, being the Ontario equivalent of FIPPA, provided that any body whose “members or officers” were appointed under the authority of a municipality was subject to the Act. TEDCO’s contention that it was not subject to MFIPPA was based on the fact that TEDCO’s directors appointed its officers. In that case, the court gave the Act a liberal and purposive reading and came to the conclusion that TEDCO’s officers were appointed under the authority of the City, and that TEDCO was, therefore, subject to MFIPPA.

In determining whether the officers of ComFor were appointed or chosen by or under the authority of the Village, the Commissioner employed the same approach to the interpretation of FIPPA and found that ComFor’s officers were appointed under the Village’s authority. Referring to ComFor’s own articles of incorporation, and the Village’s rights as 100% shareholder of ComFor, the Commissioner held that the Village had complete control and direction over ComFor.

According to the Commissioner, the key concept in this case was that the Village created ComFor and delegated to it, and its subsidiaries, the responsibility of the management of a publicly held resource. In his opinion, the purpose of the Legislature in including “local government bodies” under FIPPA was to capture such matters of public business, whether delegated to a public board, commission or a corporation. Therefore, as wholly owned subsidiaries of the Village, ComFor and all the other related entities, including BCLF, fell into the same category of public bodies subject to FIPPA.

Since ComFor was a “local government body” under FIPPA, the applicants had a right to have their requests for information processed, and the Commissioner ordered the companies to respond to the requests.

This case stands for the principle that the scope and purpose of freedom of information legislation flows through local governments to organizations that may be their delegates in matters of a public nature. If a high degree of control exists between the local government body and the delegate body or organization, these bodies and organizations may not be insulated from the application of FIPPA and must be prepared to operate in a manner consistent with the Act.