November 6, 2009

Does a municipality have the right to withhold records of its controversial decision to sell city assets and to enter into a 30-year service agreement for those assets? That has been the subject of a four-year access-to-information battle between the City of Toronto and a local trade association. Now in a landmark decision by Ontario's Information and Privacy Commissioner, the answer to that question is a resounding "No."

In Brief

On October 27, 2009, a senior adjudicator with the Information and Privacy Commissioner of Ontario ordered the City of Toronto to disclose key records regarding the City's controversial sale of its street and expressway lighting assets to a subsidiary of Toronto Hydro Corporation. The nearly 100-page decision (Final Order MO-2468-F) addresses a number of key issues, including the City's attempt to deny access to the records on the basis that it had held closed door meetings regarding the sale and a related service agreement. 

Background

During its 2005 budget deliberations, the City identified a gap between revenue and expenditures. To help close that budget gap, City Council decided to sell the City's streetlights, including expressway lights and the street-light and expressway-light poles, to Toronto Hydro Street Lighting Inc. (THSLI), a subsidiary of Toronto Hydro (subsequently amalgamated with Toronto Hydro Energy Services Inc. or "THESI"). The City was the sole shareholder of Toronto Hydro. The City estimated that selling the street lights would generate $40 to $60 million in revenue.

On December 14, 2005, City Council enacted By-Law No. 1084-2005 authorising the sale and a 30-year service agreement between the City and THSLI. Prior to this, a mix of THSLI and private electrical contractors had maintained the City's street lights and expressway lights.

The Greater Toronto Electrical Contractors' Association, a local trade association, opposed the change. Acting on its behalf, Fasken Martineau submitted a request to the City under the Municipal Freedom of Information and Protection of Privacy Act for disclosure of the sale agreement, the service agreement and related records in January 2006. 

When the City refused to disclose key records, Fasken Martineau filed an appeal with Ontario's Information and Privacy Commissioner. This is one of a series of appeals related to the sale of the streetlights and the service agreement, involving more than 12,000 pages of responsive records. We have successfully obtained a series of related Orders against the City in these appeals, including MO-2389, MO-2135-I, MO-2275, MO-2396-F, and MO-2282-I.

The Adjudicator's Decision

In the Order, the adjudicator reinforced the unique character of the service agreement: "the agreement at issue is a 30-year agreement between THESI and the largest municipality in Canada. […] This is not a standard agreement, nor was it negotiated at arm's length. Rather, it is a multi-million dollar unique contract between two linked parties."

The adjudicator almost universally rejected the City's claims that it was entitled to withhold records and portions of records from disclosure under the Act. With the exception of one section of one record, the adjudicator ordered the City to disclose all of the records at issue in the appeal.

The adjudicator's decision criticized the City's conduct in the appeal, saying "the appellant has been prejudiced by the delay caused by the City's actions throughout the processing of this appeal." Further, in dismissing the City's claimed exemptions under section 11 of the Act, the adjudicator found most of the City's representations contained only "bald assertions" and "vague and generalized submissions" that were insufficient to establish that harm might occur to the City if it released the records.

Finally, in what is likely the most significant aspect of the Order, the adjudicator conducted an extensive analysis of the City's claim that it was entitled to refuse disclosure of records under the "closed meeting" exemption under the Act. This exemption would have permitted the City to refuse to disclose records that revealed the substance of deliberations of a meeting of a council, board or committee if a statute authorised holding such meeting in absence of the public. In rejecting the City's claim, the adjudicator held that the City had not established that any statute authorised the holding of closed door meetings regarding the Sale and the Service Agreement.

The Order requires the City to disclose the records by December 1, 2009.