



COURT OF APPEAL FOR ONTARIO

CITATION: U.S. Steel Canada Inc. (Re), 2016 ONCA 68

DATE: 20160126

DOCKET: C61176

Hoy A.C.J.O., Blair and Lauwers JJ.A.

IN
    THE MATTER OF THE
COMPANIES CREDITORS ARRANGEMENT ACT
,

R.S.C.
    1985, c. C-36, AS AMENDED

AND
    IN THE MATTER OF A PROPOSED PLAN OF COMPROMISE OR ARRANGEMENT WITH RESPECT TO
    U.S. STEEL CANADA INC.

Andrew Hatnay and Adrian Scotchmer, for the appellants Non-USW
    Active Salaried Employees and Non-USW Salaried Retirees

Kristian Borg-Olivier, for the appellants USW and USW
    Local 1005

Michael Kovacevic, for the appellant City of Hamilton

Michael E. Barrack and John Mather, for the respondent
    United States Steel Corporation

Sharon Kour, for the respondent U.S. Steel Canada Inc.

John L. Syme, Joseph Cheng and Jacqueline Dais-Visca, for
    the respondent Attorney General of Canada

Jonathan G. Bell, for the respondent Ernst & Young
    Inc. (the Monitor)

Peter D. Ruby, for the Superintendent of Financial
    Services (Ontario)

Heard:  November 19, 2015

On appeal from the order of Justice Wilton-Siegel of the Superior
    Court of Justice, dated May 19, 2015, 2015 ONSC 2885.

Hoy A.C.J.O.:

I

OVERVIEW

[1]

This appeal concerns the scope of the privilege in s. 36 of the
Investment
    Canada Act
[1]
(the 
ICA
) over information obtained by the Minister of Industry
[2]
or an officer or employee of Her Majesty in the course of the administration
    and enforcement of the
ICA
. The
ICA
provides for the review
    of significant investments in Canada by non-Canadians.

[2]

U.S. Steel Canada Inc. (USSC) is subject to protection under the

Companies
    Creditors Arrangement Act
[3]
(the 
CCAA
). Stakeholders in the
CCAA
proceedings brought a
    motion for disclosure of the contents of a settlement agreement arrived at in
    the course of litigation to enforce the
ICA
(the Settlement
    Agreement). The Settlement Agreement was entered into by USSC, its American
    parent, United States Steel Corporation (USS), and the Attorney General of Canada
    (on behalf of Industry Canada
[4]
)
    (the AGC) on December 8, 2011. It contains written undertakings provided by
    USS to the Minister for the purposes of the
ICA
. The central issue is
    whether s. 36 of the
ICA
bars this disclosure.

[3]

The
CCAA
judge concluded that the Settlement Agreement was
    privileged in its entirety under s. 36 of the
ICA
. Because he so
    concluded, he did not consider whether the Settlement Agreement was protected
    by common law settlement privilege. He dismissed the motion of four key
    stakeholders  the United Steel, Paper and Forestry, Rubber, Manufacturing,
    Energy, Allied Industrial and Service Workers International Union (USW), the
    court-appointed Representative Counsel to the non-USW active and retired
    employees of USSC, USW Local 1005 and the City of Hamilton  seeking production
    of the Settlement Agreement. They appeal the dismissal of their motion.

[4]

For the reasons that follow, I conclude that s. 36 of the
ICA
does
    not prohibit USSC and USS from disclosing the Settlement Agreement.

[5]

I would return the issue of whether disclosure of the Settlement
    Agreement is barred by common law settlement privilege to the
CCAA
judge for determination in the exercise of his discretion in the
CCAA
proceeding. As the
CCAA
judge did not have the Settlement Agreement
    before him, I would direct the monitor of USSC, Ernst & Young Inc. (the
    Monitor), to disclose the Settlement Agreement to the
CCAA
judge so
    that he may review it and, if he deems it helpful, entertain further
    submissions by the parties before determining this issue.

II

THE FACTS

[6]

USS is a publicly-traded Delaware corporation and one of the largest
    steel producers in North America.

[7]

In 2007, USS purchased Stelco Inc., a Canadian steel company with
    facilities in the City of Hamilton and in Nanticoke, Ontario. Stelco had
    emerged from
CCAA
protection in 2006. The acquisition was subject to
    the review and approval of the Minister under Part IV of the
ICA
. The
    review process under Part IV is intended to ensure that a proposed investment
    by a non-Canadian company is likely to be of net benefit to Canada.

[8]

USS was given permission to purchase Stelco after it gave certain
    undertakings to the Minister in respect of the acquisition. The undertakings
    included commitments by USS in respect of production and employment levels in
    Canada.

[9]

USS renamed Stelco, calling it U.S. Steel Canada Inc., and remains its
    ultimate owner. USSC faced financial difficulties in 2008, apparently due to
    the global recession. In 2009, the Minister sent a demand to USS pursuant to s.
    39 of the
ICA
, claiming that USS was in contravention of the
    employment and production undertakings, and requesting that USS remedy the
    alleged defaults, show that there was no default, or justify any
    non-compliance. USS denied any non-compliance with the undertakings for which
    it could be held accountable. USS took the position that any inability to meet
    its objectives was the result of factors beyond its control for which it could
    not be held responsible.

[10]

On
    July 17, 2009, the AGC filed an application under s. 40 of the
ICA
,
    seeking an order directing USS to comply with the undertakings and to pay
    certain penalties for any breach. The appellant, the USW, among others, was
    given intervener status in the application.

[11]

The
    litigation was ultimately settled without any judicial finding on the merits
    when USS, USSC, and the AGC entered into the Settlement Agreement. Some details
    of the Settlement Agreement have been publicly disclosed, including the fact
    that it contains new written undertakings provided by USS to the Minister for
    the purposes of the
ICA
. Some of the new undertakings were publicly
    announced, such as USSs commitment to continue producing steel in Canada, to
    maintain some of its Ontario operations until the end of 2015, and to make
    certain capital investments. The Settlement Agreement requires that the balance
    of its terms be kept confidential and the details are not otherwise publicly
    available.

[12]

As
    a result of continuing financial difficulties, USSC applied for and was granted
CCAA
protection on September 16, 2014. In an affidavit filed in
    support of its application, USSC referred to the Settlement Agreement and
    asserted that its confidentiality was protected both by the terms of the
    agreement and s. 36 of the
ICA
. Ernst & Young Inc. was appointed
    as the Monitor of USSC. USS has filed claims in the USSC claims process for
    amounts it alleges are owed by USSC, including unsecured claims of over $1.9
    billion and a secured claim of over $78 million.

[13]

The
    Monitor has a copy of the Settlement Agreement. On January 7, 2015, counsel for
    the USW requested disclosure of the Settlement Agreement from the Monitor, if
    the parties would consent. The Monitor was told on January 23, 2015 that the
    parties would not agree to disclose the Settlement Agreement and took the
    position that it could not disclose it without consent.

[14]

On
    April 10, 2015, the appellants brought the motion below in the
CCAA
proceedings, seeking an order to compel Industry Canada, USS and/or USSC to
    disclose the Settlement Agreement and, in particular, the undertakings contained
    therein. Their position was that the information sought was relevant to an
    assessment of restructuring proposals being made by stakeholders, and would
    permit them to participate in the restructuring process on a fully informed
    basis. In particular, they submitted that USS had continuing obligations under
    the Settlement Agreement that would need to be addressed in any restructuring,
    such as continuing to produce steel at the Canadian plants and continuing to
    make certain capital investments. They also believe that the Settlement
    Agreement would disclose breaches of the undertakings, which they would rely on
    to object to the status of the USS claims against USSC. The City of Hamilton
    filed evidence of the financial importance to it of USSCs Hamilton works.

[15]

By
    letter dated April 17, 2015, the Director General of the Investment Review
    Division of Industry Canada advised the parties that the Ministers delegate,
    appointed pursuant to s. 6 of the
ICA
,
    had reviewed the Settlement Agreement and come to the opinion that
disclosure
    of the Settlement Agreement was not necessary for any purpose relating to the
    administration or enforcement of the
ICA
and that such disclosure
    would prejudicially affect the conduct of USSs business affairs. This
    determination is contemplated by the privilege regime in s. 36 of the
ICA
,
    discussed below. The letter also stated that the Settlement Agreement required
    the parties to maintain it as confidential, save for the details that were already
    publicly disclosed.

III

THE SCHEME OF THE
ICA
AND s. 36

[16]

Before
    reviewing the
CCAA
judges reasons, it is helpful to briefly outline
    both the purposes and relevant portions of the framework of the
ICA
,
    as well as the structure of s. 36 and how it interfaces with the
Access to
    Information Act
, R.S.C., 1985, c. A-1 (the 
ATIA
). Section 36 is
    reproduced in Schedule A to these reasons, together with some of the other
    sections of the
ICA
referred to below.

Purposes of the
ICA

[17]

Section
    2 of the
ICA
provides that its purposes are to provide for the review
    of significant investments in Canada by non-Canadians in a manner that
    encourages investment, economic growth and employment opportunities in Canada
    and to provide for the review of investments in Canada by non-Canadians that
    could be injurious to national security.

The Review Process

[18]

Part
    II of the
ICA
exempts certain investments from its application (s. 10).
    In the case of certain other investments not exempted by Part II, Part III of
    the
ICA
requires only that the non-Canadian making the investment give
    notice of its investment and provide the information prescribed in that Part
    (ss. 11-13). Part IV requires that, in a narrower category of reviewable
    investments, the non-Canadian satisfy the Minister that the investment is
    likely to be of net benefit to Canada. USSs investment in USSC was a
    reviewable investment.

[19]

Where
    an investment is reviewable under Part IV, the non-Canadian must file an
    application with the Director containing such information as is prescribed
    (s. 17(1)). The Director may request that the non-Canadian provide any other
    information the Director considers necessary (s. 17(3)). The Director then
    refers to the Minister any of the following material obtained in the course of
    the review: the information contained in the application and any other
    information submitted by the applicant; any information submitted by the person
    or entity from whom or which control of the business is being or has been
    acquired; any written undertakings to Her Majesty in right of Canada given by
    the applicant; and any representations submitted to the Director by an affected
    province (s. 19(1)).

[20]

If
    the Minister is satisfied that the investment is likely to be of net benefit to
    Canada having taken into account any information, undertakings and
    representations referred to the Minister by the Director, then, subject to
    certain exceptions, the Minister must give notice of that evaluation to the
    applicant within a specified time period.

[21]

If
    the Minister is not so satisfied, he or she is required to give notice to that
    effect to the applicant, who then has the opportunity to make representations
    and submit undertakings to Her Majesty in right of Canada. The Minister will
    take those further representations and undertakings into account in making the
    decision (s. 23).

The Enforcement of an Undertaking

[22]

Enforcement
    mechanisms are set out in Part VII of the
ICA
. If the Minister
    believes that a non-Canadian has failed to comply with a written undertaking
    given to Her Majesty in right of Canada relating to an investment that the
    Minister is satisfied or is deemed to be satisfied is likely to be of net
    benefit to Canada, the Minister may send a demand to the non-Canadian requiring
    it to remedy the default (s. 39(1)). If the non-Canadian fails to comply, the
    Minister may apply to a superior court for an order directing the non-Canadian
    to comply with the written undertaking (s. 40(1)). As discussed above, the
    Minister sent a demand to USS and subsequently commenced an application under
    s. 40(1). The Settlement Agreement was concluded before the Ministers
    application was judicially determined. The Settlement Agreement was clearly
    concluded in the course of the enforcement of the
ICA
.

The Statutory Privilege

[23]

Section
    36 is in Part VI of the
ICA
, which is entitled General. While it is
    reproduced in its entirety in Schedule A to these reasons, for ease of
    reference, ss. 36(1) and (2) provide as follows:

36(1) Subject to subsections (3) to (4),
all
    information obtained
with respect to a Canadian, a non-Canadian, a
    business or an entity referred to in paragraph 25.1(c)
by
    the Minister or an officer or employee of Her Majesty in the course of the
    administration or enforcement of this Act is privileged
and no one shall
    knowingly communicate or allow to be communicated any such information or allow
    anyone to inspect or to have access to any such information.

(2) Notwithstanding any other Act or law but subject to
    subsections (3) and (4), no minister of the Crown and no officer or employee of
    Her Majesty in right of Canada or a province shall be required, in connection
    with any legal proceedings, to give evidence relating to any information that
    is privileged under subsection (1) or to produce
any
    statement or other writing containing such information
. [Emphasis
    added.]

[24]

Exceptions
    to the statutory privilege created by s. 36(1) are then set out in ss. 36(3) to
    (4), and the exception in para. 36(4)(b) is qualified by s. 36(5).

[25]

Three
    exceptions in s. 36(4) are relied on by the appellants to argue that the
    Settlement Agreement, or the undertakings contained therein, are exempt from
    privilege: para. (a), which excepts information for the purposes of legal
    proceedings relating to the administration or enforcement of [the
ICA
];
    para. (b), which excepts information contained in any written undertaking
    given to Her Majesty in right of Canada relating to an investment that the
    Minister is satisfied or is deemed to be satisfied is likely to be of net
    benefit to Canada; and para. (d), which excepts information the communication
    or disclosure of which has been authorized in writing by the Canadian or the non-Canadian
    to which the information relates.

[26]

By
    its April 17, 2015 letter, discussed above, the AGC has invoked s. 36(5):

(5)
No minister of the Crown and no
    officer or employee of Her Majesty in right of Canada or a province may be
    required
, in connection with any legal proceedings or otherwise, to give
    evidence relating to or otherwise to communicate or
disclose
    any information referred to in paragraph (4)(b)
where, in the opinion of
    the Minister or a person designated by the Minister, the communication or
    disclosure of that information is not necessary for any purpose relating to the
    administration or enforcement of this Act and would prejudicially affect the
    non-Canadian that gave the written undertaking referred to in that paragraph in
    the conduct of the business affairs of that non-Canadian. [Emphasis added.]

[27]

USS
    argues that the exceptions in s. 36(4)(a) and (d) do not apply to the
    Settlement Agreement and, because the Minister has invoked s. 36(5), USS is not
    required to disclose the new undertakings to the appellants under s. 36(4)(b).

The
ATIA

[28]

The
ATIA
provides a right of access to information in records under the
    control of a government institution. However, that right is not absolute and
    the
ATIA

contains various exceptions. One exception is s. 24(1),
    which provides that, where a record contains information the disclosure of
    which is restricted by or pursuant to any provision set out in Schedule II, the
    head of a government institution shall refuse to disclose it. Section 36 of the
ICA
is one of the provisions contained in Schedule II. Therefore, if a
    record contains information the disclosure of which is prohibited by s. 36, the
    Minister shall not disclose it in response to a request made under the
ATIA
.
The statutory privilege provided for in s. 36 is therefore absolute,
    subject to the exceptions set out therein, and cannot be circumvented by resort
    to the
ATIA
.

IV

THE JUDGMENT BELOW

[29]

The
CCAA
judge noted at the outset of his reasons that the
    appellants abandoned their argument that the Settlement Agreement did not
    constitute information. Instead, they argued that the undertakings contained
    in the Settlement Agreement did not constitute information and were therefore
    not privileged under s. 36(1).

[30]

The
CCAA
judge concluded that information in s. 36 of the
ICA
covers
    undertakings given by USS to the Minister, including any undertakings in the
    Settlement Agreement.

[31]

He
    explained, at para. 27:

[B]ecause the term information, as used in these provisions,
    is intended to capture all information provided by a prospective foreign
    investor to the Crown in the course of the administration and enforcement of
    the
ICA
, including in particular in the course of the approval
    process, it must also include undertakings given in connection with that
    process. This conclusion is supported [by] both the broad language of these provisions
    as well as by the policy of the [
ICA
].

[32]

In
    his view, undertakings are statements of fact regarding a commitment that the
    foreign investor is making to the Minister, as well as a contractual obligation
    (para. 28), and are therefore information. He rejected the appellants
    arguments that written undertakings accepted by the Minister and undertakings
    provided in the enforcement context should be distinguished from undertakings
    not accepted by the Minister in the approval process and are not information
    for the purposes of the
ICA
.

[33]

The
CCAA
judge also rejected the appellants alternative
    argument that, even if the undertakings are information for the purposes of ss.
    36(1) and 36(2), they do not constitute information for the purposes of the
    exemptions in s. 36(4). The basis for this argument is s. 36(4)(b), which
    provides an exclusion from the non-disclosure regime for information contained
    in any written undertaking except to the extent the Minister determines
    otherwise under s. 36(5). The appellants argued that this provision makes it clear
    that information and a written undertaking are different. While the
CCAA
judge acknowledged that it was possible to interpret the provisions in the
    manner proposed by the appellants on a reading of the
ICA
limited to
    the wording in paragraph 36(4)(b), he was not persuaded that this
    interpretation was correct based on a consideration of the provisions of s. 36
    as a whole, as well as the purposes of the
ICA
.

[34]

The
CCAA

judge held that the structure of s. 36 required that the
    written undertaking contemplated in s. 36(4)(b) be treated as a reference to a
    document containing one or more undertakings, rather than to the contractual
    commitments themselves. This, he concluded, parallels the language of s. 36(2),
    which refers to a statement or other writing containing such information. And
    it is also consistent with his interpretation of s. 36(5). In his view, s. 36(5)
    was intended to apply to all information contained in any document to which s.
    36(4)(b) would otherwise apply, including the undertakings given to the
    Minister.

[35]

He
    then dealt with the questions of whether Industry Canada, USS, and USSC were
    subject to the non-disclosure regime in s. 36 of the
ICA
, and if they
    were, whether he could order production using the courts broad order-making
    powers under s. 11 of the
CCAA
.

[36]

Section
    36(1) provides that no one shall knowingly communicate information obtained
    by the Crown in the administration or enforcement of the
ICA
. As such,
    the
CCAA
judge reasoned that, subject to the operation of the limited
    statutory exceptions in s. 36, Industry Canada, USS and USSC are subject to
    this statutory obligation of confidentiality. The
CCAA
judge found that
    the exceptions did not apply in this case: the exception in s. 36(4)(a) did not
    apply because the legal proceedings here were under the
CCAA
and not under
    the
ICA
; the exception in s. 36(4)(b) did not apply because the
    Ministers delegates opinion was unfavourable to disclosure; and the exception
    in s. 36(4)(d) did not apply because USSCs reference to the Settlement
    Agreement in its application for
CCAA
protection did not constitute
    express or implied authorization by USSC or USS to disclosure of the
    information.

[37]

The
CCAA
judge declined to exercise the authority granted to the court
    under s. 11 of the
CCAA
to order disclosure, on the grounds that the
    court could not override the operation of the
ICA
statutory scheme.

[38]

Given
    his conclusion that the regime in s. 36 of the
ICA
applied, the
CCAA
judge declined to address the appellants submission that, if the Settlement
    Agreement, or at least the undertakings contained in it, were not governed by
    s. 36 of the
ICA
,
the common law settlement privilege was
    displaced by the public interest in disclosure.

V

ISSUES

[39]

This
    appeal raises the following issues:

1.

Did the
CCAA
judge err in concluding that information in s. 36 of the
ICA
includes undertakings given in enforcement proceedings?

2.

Did the
CCAA
judge err in concluding that none of the exceptions to the privilege regime in
    the
ICA
applies?

3.

If the
CCAA
judge erred in concluding that the Settlement Agreement is privileged under the
ICA
, should this court determine whether disclosure of all or part of
    the Settlement Agreement is barred by common law settlement privilege?

VI

ANALYSIS

(1)

Did the
CCAA
judge err in concluding that information in s.
    36 of the
ICA
includes undertakings given in enforcement proceedings?

[40]

The appellants submit that the undertakings in the Settlement Agreement
    are not privileged under s. 36 of the
ICA
. They argue that s. 36(1)
    only protects information obtained by the Minister for the purpose of
    determining whether or not to approve a proposed investment, and has no
    application to the Settlement Agreement, which arose out of a settlement of
    post-acquisition litigation.

[41]

The
    appellants further argue that the
CCAA
judge erred in conflating
    information and undertaking for the purposes of s. 36 of the
ICA
,

since
information and undertaking are used as discrete terms
    throughout the
ICA
, including in s. 36(4)(b). They say that an
    undertaking is not a contractual obligation and a statement of fact; it is
    simply a promise. They cite
Kitchenham v. AXA Insurance (Canada)
,

2008
    ONCA 877, 94 O.R. (3d) 276, at para. 26, where this court defined an
    undertaking as follows: [a]n undertaking is a promise given by one party to
    another party to the lawsuit in exchange for obtaining something from that
    party.

[42]

I
    reject the appellants arguments, and find that the
CCAA
judge did not
    err in concluding that the privilege in s. 36(1) attaches to information
    obtained by the Minister in connection with the enforcement of the
ICA
and that undertakings contained in the Settlement Agreement are information
    for the purposes of s. 36.

[43]

The
    appellants first argument regarding the scope of s. 36(1) is largely
    underpinned by the observation of
Prothonotary
    Milczynski in
Canada (Attorney General) v. United States Steel Corp.
,
    2009 CarswellNat 5932 (Fed. T.D.), at para. 16, that [i]nformation is provided
    to the Minister of Industry and Investment Canada under various provisions of
    the [
ICA
] for the purposes of allowing the Minister to determine
    whether or not a proposed investment is likely to be of net benefit to Canada.
    However, that observation does not purport to be a comprehensive legal
    determination of the scope of s. 36(1) of the
ICA
. In my view,
    interpreting s. 36(1) to provide that the privilege only attaches to information
    obtained by the Minister for the purpose of determining whether or not to
    approve an investment ignores the words in the course of the  enforcement of
    this Act.

[44]

As
    for the appellants second argument, despite the use of information and
    undertaking as discrete terms in Part IV of the
ICA
, I agree with
    the
CCAA
judges conclusion that, in s. 36 in Part VI of the
ICA
,
    Parliament intended information to include undertakings set out in a document
    given to the Minister.

[45]

This issue has long been settled
.
As the respondents submit,
Hamilton
    v. Canada (Attorney General)
(1984),
    28 B.L.R. 92 (Fed. T.D.)
determined over 30 years ago that
    undertakings provided by a non-Canadian constituted information for the
    purpose of s. 14(1) of the
Foreign Investment Review Act
, S.C.
    1973-74, c. 46, as amended (
FIRA
).
FIRA
was the predecessor
    to the
ICA
,
and s. 14 of
FIRA
was the equivalent of s.
    36 of the
ICA.
Section 14(1) of
FIRA
provided that all information
    with respect to a person, business or proposed business obtained by the
    Minister  in the course of the administration of this Act is privileged. Like
    s. 36(4)(b) of the
ICA
, s. 14(4)(c) excepted from the privilege regime
    information contained in any written undertaking. Section 14(4) also provided
    for an exception to the exception, similar to that contained in s. 36(5) of
    the
ICA
, pursuant to which the Minister did not have to disclose any
    information referred to in s. 14(4)(c) where the disclosure was not necessary
    for any purpose relating to the administration or enforcement of the Act and
    would prejudicially affect the person who gave the undertaking. And, like the
ICA
,
    in other sections of
FIRA
, information and undertakings were used
    as discrete terms.
[5]
In the face of
Hamilton
, Parliament did not adopt different language
    in enacting the
ICA

or amend the
ICA
to make clear
    that undertakings are not subject to the privilege regime in s. 36.

[46]

In
    the course of debating Bill C-15
[6]
,
    which was ultimately enacted as the
ICA

and replaced
FIRA
,

opposition members criticized the secrecy inherent in the investment
    review process under
FIRA

and moved to amend the Bill to
    provide for greater public access to information under the
ICA
. They
    noted that, without further amendment, the
ICA

would suffer
    from the same problems that existed under
FIRA
: for example, see
House
    of Commons Debates
, 33rd Parl., 1st Sess., Vol. 3 (1 May 1985), at 4298,
    4305 and 4313 (Hon. Vic Althouse, Hon. Jim Manly and Hon. Nelson A. Riis) (
ICA

Debates).

[47]

Several
    of the proposed amendments would have required the Minister, under the
ICA
,
    to make public all undertakings given by the investor once it was determined
    that the proposed investment would be of net benefit to Canada:
ICA

Debates, at 4242. The legislature ultimately voted to defeat the amendments:
ICA

Debates, at 4313. This demonstrates the legislatures
    intention to continue the privilege scheme that extended to undertakings under
FIRA
,
    such that undertakings would be confidential unless an exception applied.

[48]

I disagree with the appellants that s. 36(4)(b) (information contained
    in any written undertaking) makes it clear that information and
    undertaking are different and that undertakings set out in a document given
    to the Minister are therefore not information for the purpose of s. 36. The
    appellants interpretation of s. 36(4)(b) would distinguish between what they
    would characterize as the bare promise made to the Minister and information contained
    in the promise  the written undertaking  to the Minister. The appellants
    would permit USS to assert privilege over the information contained in the
    written undertaking, but not over the bare promise itself. They would require
    USS to parse each written undertaking to sever what they would characterize as
    the bare promise provided to the Minister from any information contained in the
    written undertaking. Where is the line between information and bare
    promise? And without the information contained in the written undertaking, would
    disclosure of the bare promise be meaningful? In my view, the appellants
    interpretation of s. 36(4)(b) does not bear scrutiny.

[49]

As
    I discuss below, I agree with the
CCAA
judge that written
    undertaking in s. 36(4)(b) defines the location of the privileged information
    and does not define the scope of information for the purposes of s. 36. Section
    36(4)(b) therefore does not make it clear that undertakings are not information
    for the purposes of s. 36.

[50]

However,
    because I conclude below that the exception to the privilege regime in s.
    36(4)(b) applies to USSC and USS, such that they are not prohibited from
    disclosing the Settlement Agreement, the result of this appeal does not turn on
    whether information in s. 36 includes undertakings.

(2)

Did the
CCAA
judge err in concluding that none of the
    exceptions to the privilege regime in the
ICA
applies?

[51]

In
    my view, the
CCAA
judge correctly concluded that the exceptions in ss.
    36(4)(a) and (d) do not apply. However, I agree with the appellants that the
    effect of s. 36(4)(b) is that USSC and USS are not prohibited from disclosing
    the Settlement Agreement.

(a)

Section 36(4)(a)

[52]

Section
    36(4)(a) provides that disclosure of information for the purposes of legal
    proceedings relating to the administration or enforcement of [the
ICA
]
    is
not
prohibited by s. 36.

[53]

The
    appellants submit that the current
CCAA
proceeding and the earlier
ICA
enforcement proceeding that led to the Settlement Agreement are related and,
    accordingly, disclosure of the Settlement Agreement for the purposes of the
CCAA
proceeding constitutes disclosure of information for the purposes of legal
    proceedings relating to the administration or enforcement of [the
ICA
].
    They argue that the
CCAA
judge failed to consider that the words
    relating to are words of the widest possible meaning, as interpreted in
Slattery
    (Trustee of) v. Slattery
, [1993] 3 S.C.R. 430, at pp. 445-446, and that
    his interpretation of the exception in s. 36(4)(a) was erroneously narrow.

[54]

I
    reject this argument. I agree with the
CCAA

judge that s.
    36(4)(a) does not apply in these circumstances. Here, disclosure of the
    information is sought by the appellants for the purposes of the current proceedings
    under the
CCAA
. It is not sought for legal proceedings relating to the
    enforcement of the
ICA
, and it is not sought by the Minister, who is
    the party charged with the administration and enforcement of the
ICA
. Indeed,
    the Minister has stated his opinion that disclosure of the information was not
    necessary for any purpose relating to the administration or enforcement of the
ICA
.

[55]

This case is very different from
Slattery
. In
Slattery
,
    Revenue Canada sought to collect income tax owing by Mr. Slattery. After
    conducting a lengthy investigation into his affairs, it petitioned Mr. Slattery
    (the bankrupt) into bankruptcy in order to collect the income tax owing. The
    trustee in bankruptcy then commenced civil proceedings against the bankrupts
    wife, seeking a declaration that certain assets held in her name were, in
    reality, property of the bankrupt's estate.
The
    trustee sought to introduce testimony from Revenue Canada officials involved in
    the earlier investigation of the bankrupts affairs. Counsel for Mrs. Slattery
    objected on the ground that such testimony was statutorily barred in accordance
    with s. 241 of the
Income Tax Act
,
    R.S.C. 1952, c. 148, as amended by S.C. 1970-71-72, c. 63 (the 
Income
    Tax Act
), which prohibited Revenue Canada
    officials from disclosing information obtained from a taxpayer for the purposes
    of that Act. The trial judge held that the testimony was not barred due to an exception
    under the
Income Tax Act
stating that
    the prohibition did not apply in respect of proceedings relating to the
    administration or enforcement of [the
Income Tax Act
].

[56]

On appeal, the Supreme Court of Canada held that disclosure of the
    information obtained by Revenue Canada during its investigation for the
    purposes of the trustees bankruptcy action was permissible because the bankruptcy
    proceedings could be clearly characterized as relating to the enforcement of
    the
Income Tax Act
.

[57]

Characterizing
    the bankruptcy proceedings as "proceedings relating to the ... enforcement
    of" the
Income Tax Act
made sense in
Slattery
. Revenue
    Canada was the party who petitioned the taxpayer into bankruptcy, it was
    actively involved in the bankruptcy proceedings, and the tax officials and the
    bankruptcy trustee were collaborating. Revenue Canada was entitled to volunteer
    to disclose the disputed (otherwise confidential) information in order to
    enforce the
Income Tax Act
.

[58]

Unlike
    this case, the two sets of proceedings in
Slattery
were interrelated.
    Here, they are not. Other than the privilege issue, the Minister has no
    interest in the
CCAA
proceedings.

[59]

Section
    36(4)(a) therefore does not permit the appellants to obtain disclosure of any
    information contained in the Settlement Agreement.

(b)

Section 36(4)(b)

[60]

Section
    36(4)(b) provides that s. 36 does not prohibit disclosure of:

(b) information
contained
in any
    written undertaking given to her Majesty in right of Canada relating to an
    investment that the Minister is satisfied or is deemed to be satisfied is
    likely to be of net benefit to Canada. [Emphasis added.]

[61]

As
    discussed earlier, the AGC has invoked s. 36(5) and is therefore not required
    to disclose
any
information referred to in s. 36(4)(b). I agree with the
CCAA
judge that, as a result of invoking s. 36(5), the AGC cannot be
    required to disclose the Settlement Agreement. This conclusion is supported on
    two bases.

[62]

First,
    I agree with the
CCAA
judge that, in this case, written undertaking
    in s. 36(4)(b) means the Settlement Agreement. The information referred to in
    s. 36(4)(b) is therefore the information contained in the Settlement Agreement
    and, as a result of invoking s. 36(5), the AGC cannot be required to disclose
    any of that information.

[63]

As
    I have outlined above, the
CCAA
judge held that the structure of s. 36
    required that written undertaking in s. 36(4)(b) be treated as a reference to
    a document containing one or more undertakings, rather than the promises
    themselves contained in the document. As he noted, containing is used in s.
    36(2) in reference to information in a written document. Contained is also
    used in s. 36(4)(b). Here, the document containing the undertakings is the
    Settlement Agreement. The
CCAA
judge accordingly equated written
    undertaking in s. 36(4)(b) to the Settlement Agreement. Therefore, in his
    view, the information referred to in s. 36(4)(b) is all the information
    contained in the Settlement Agreement.

[64]

The
    respondents do not appear to challenge that conclusion, at least on the facts
    of this case. In her April 17, 2015 letter to the parties invoking s. 36(5),
    Jennifer Aitken, Director General of the Investment Review Division of Industry
    Canada, took the position that disclosure of any information relating to written
    undertakings may not be required where, in the opinion of the Ministers
    designate, the communication or disclosure of that information is not necessary
    for any purpose relating to the administration or enforcement of the
ICA
and it would prejudicially affect the non-Canadian that gave the written
    undertaking in the conduct of its business affairs. She advised that the
    Director of Investments, appointed by the Minister pursuant to s. 6 of the
ICA
,
had reviewed the Settlement Agreement
    and other documents and come to the conclusion that disclosure of the
Settlement Agreement
is not necessary for any purpose
    relating to the administration or enforcement of the
ICA
and that the disclosure
    of it to persons other than the Monitor and the Monitors legal counsel in the
CCAA
proceedings would prejudicially affect the conduct of the business affairs of
    USS. The Minister has apparently concluded that the Settlement Agreement
    consists of information relating to written undertakings.

[65]

I agree with the
CCAA
judge that written undertaking in s.
    36(4)(b) defines the location of the information. And I agree that where, as is
    apparently the case here, the document consists of the undertakings given to
    the Minister and information relating to those undertakings, the document
    itself constitutes the written undertaking for the purpose of s. 36(4)(b). I
    also suspect that in most cases information contained in the document would
    consist of undertakings given to the Minister and information related to those
    undertakings. I need not determine whether written undertaking in s. 36(4)(b)
    also includes a document that contains undertakings given to the Minister,
    information related to those undertakings and information unrelated to those
    undertakings, or whether, in such a case, written undertaking in s. 36(4)(b)
    means only those parts of the document containing the undertakings and
    information related to those undertakings.

[66]

Second,
    under s. 36(2), the Minister cannot be required to produce any statement or
    other writing containing [information described in s. 36(1)]. There is no doubt
    that the Settlement Agreement contains information described in s. 36(1). Section
    36(4)(b) provides an exception with respect to information contained in any
    written undertaking given to.  By invoking s. 36(5), the exception in s.
    36(4)(b) is of no effect with respect to the Minister. Therefore, s. 36(2)
    applies and the Minister cannot be required to produce the Settlement Agreement,
    which is a writing containing [information described in s. 36(1)].

[67]

The
    remaining question is whether, because the AGC has invoked s. 36(5), USSC and USS
    cannot be required to disclose any information contained in the Settlement
    Agreement.
On appeal, the appellants argue that the
    answer to this question is no. They say that USSC and USS can be required to
    disclose information contained in the Settlement Agreement under s. 36(4)(b),
    even though the AGC has invoked s. 36(5), because s. 36(5) only protects the
    Minister or other government employees or officers from being forced to
    disclose information. They would therefore restrict the application of s. 36(5)
    to the parties named therein. The appellants did not make this argument before
    the
CCAA
judge. Because this appeal deals
    with the proper interpretation of the
ICA
, and s. 36 specifically, I am persuaded that this court
    should address this question.

[68]

In
    my view, the exception to the exception in s. 36(4)(b), created by s. 36(5),
    does not apply to USSC and USS. Therefore, if not protected by common law
    settlement privilege, and absent a sealing order, USSC and USS can be required
    to disclose information contained in the Settlement Agreement.

[69]

This is clear from the wording of s. 36(5), which provides that [n]o
    minister of the Crown and no officer or employee of Her Majesty in right of
    Canada or a province may be required . In contrast, s. 36(1) provides that
    no one shall knowingly communicate .  If Parliament had intended to extend
    the exception to the exception in s. 36(5) to a broader category of persons
    than those listed, it could have used broad language, similar to that employed
    in s. 36(1).

[70]

I
    reject USSs argument that
Camco Inc., Re.
(1983), 22 B.L.R. 1 (Ont.
    H.C.) supports its position that s. 36(5) also excepts the supplier of the
    information. In the course of a disputed application for the liquidation and
    dissolution of Camco under corporate legislation, disclosure was sought from
    Canadian General Electric (CGE) of documents it had filed in support of its
    earlier application to the Foreign Investment Review Agency (the Agency) to
    acquire Camco. Callaghan J. held that the supplier of the information, and not
    just the Minister, was entitled to the benefit of the statutory privilege
    created by s. 14(1) of
FIRA
. As discussed above, s. 14(1) provided
    that:

[A]ll information with respect to a  business obtained by the
    Minister  is privileged and
no person
shall
    knowingly  communicate or allow to be communicated to any person not legally
    entitled thereto any such information. [Emphasis added.]

[71]

Accordingly,
    CGE was not required to disclose the documents it had filed with the Agency. At
    issue in
Camco
was the scope of the term no person. The court in
Camco
did not hold that the words no minister of the Crown and no officer or
    employee of Her Majesty include the person who supplied the information. Instead,
    it held that the language of s. 14(1) and specifically the term no person 
    which is much broader than the wording in s. 36(5) of the
ICA
and its equivalent
    under
FIRA
in s. 14(4)  clearly applied to the supplier of the
    information.

[72]

I
    also reject USSs argument that restricting s. 36(5) to the persons
    specifically named therein renders the section meaningless. Doing so provides
    an exception to the exception for the persons named therein. It also ensures
    that the information cannot be obtained from the Minister under the
ATIA
.
    As the appellants have argued, it was (and is still) open to USS to seek a
    sealing order to protect the confidentiality of the Settlement Agreement in the
CCAA
proceeding in accordance with the test in
Sierra Club of
    Canada v. Canada (Minister of Finance)
, 2002 SCC 41, [2002] 2 S.C.R. 522, as
    was done in
Canada
(Attorney General) v. United States Steel Corp.
Such orders have been granted in
CCAA
proceedings to protect
    privileged materials:
Hollinger Inc. (Re)
, 2011 ONCA 579, 107 O.R.
    (3d) 1, at paras. 19-23, leave to appeal refused, [2011] S.C.C.A. No. 473.

(c)

Section 36(4)(d)

[73]

Section 36(4)(d) states that disclosure of the following is
not
prohibited:

(d) information the
    communication or disclosure of which has been authorized in writing by the
    Canadian or the non-Canadian to which the information relates.

[74]

I agree with the
CCAA
judge that, by referring to the
    Settlement Agreement in the affidavit it filed in support of its
CCAA
application, USSC did not authorize in writing the disclosure of the Settlement
    Agreement. USSC specifically asserted that the confidentiality of the
    Settlement Agreement was protected both by the terms of the agreement and s. 36
    of the
ICA
. I make no determination as to whether USSC waived its
    common law settlement privilege by referring to the Settlement Agreement in the
    affidavit.

[75]

Accordingly,
    the final question is whether, although not protected in the hands of USSC and USS
    by s. 36, the Settlement Agreement is protected by the common law settlement
    privilege.

(3)

If the
CCAA
judge erred in concluding that the Settlement
    Agreement is privileged under the
ICA
, should this court determine
    whether disclosure of all or part of the Settlement Agreement is barred by
    common law settlement privilege?

[76]

The
    Supreme Court highlighted the importance of settlement privilege in
Sable
    Offshore Energy Inc. v. Ameron International Corp.
,
2013 SCC 37,
    [2013] 2 S.C.R. 623. As Abella J., writing for the court, states at para. 12,
    [s]ettlement privilege promotes settlements. Promoting settlement contributes
    to the effective administration of justice. While the settlement privilege
    creates a presumption of inadmissibility with respect to settlement
    negotiations, exceptions to the privilege will be found when the justice of
    the case requires it. The party seeking to override the settlement privilege
    must show that there is a competing public interest that outweighs the public
    interest in securing settlement.

[77]

The
    appellants submit that, if s. 36 of the
ICA
does not prohibit
    disclosure of the Settlement Agreement or the undertakings contained therein, this
    court should determine whether disclosure is barred by the common law
    settlement privilege, rather than sending the matter back to the
CCAA
judge.

[78]

The
    appellants argue that they have demonstrated a competing public interest in
    favour of disclosure that outweighs the public interest in encouraging settlement.
    They say that if USS has obligations to USSC under the Settlement Agreement,
    USSs very significant claim in the
CCAA
proceeding could be subject
    to set-off. They also emphasize that they represent employees and retirees
    affected by the
CCAA
proceeding. They say they are entitled to know
    whether or not USS has obligations to USSC under the Settlement Agreement, how
    those obligations impact the current restructuring negotiations, and whether
    USS is in breach of any obligations to USSC.

[79]

The respondents submit that this court should return the issue of
    whether production of the Settlement Agreement and its contents is barred by
    common law settlement privilege to the
CCAA
judge for determination. However,
    they argue that, in any event, this question should be answered in the
    affirmative. They say that substantial disclosure of the undertakings was made
    in a press release at the time of the settlement in 2011 and, further, that the
    undertakings were made to the Minister and are not for the appellants to
    enforce. USSC notes that there is no evidence that production of further
    details of the Settlement Agreement will impact the
CCAA
claims
    process. Their position is reinforced, they submit, because the Monitor has a
    copy of the Settlement Agreement and has not argued that it should be disclosed
    to the appellants.

[80]

Neither
    this court nor the
CCAA
judge was provided with a copy of the
    Settlement Agreement. In my view, it may be necessary to review the Settlement
    Agreement to evaluate the appellants argument that, in these circumstances,
    there is a competing public interest in disclosure that outweighs the public
    interest in settlement.

[81]

I
    would therefore return the issue of settlement privilege to the
CCAA
judge for determination in the exercise of his discretion in the
CCAA
proceeding.

[82]

I
    would direct the Monitor to disclose the Settlement Agreement to the
CCAA
judge so that he may review it and, if advisable, entertain further submissions
    by the parties before determining this issue.

VII

DISPOSITION

[83]

I
    conclude that s. 36 of the
ICA
does not prohibit USSC and USS from
    disclosing the Settlement Agreement and I would accordingly allow the appeal. I
    would return the issue of whether disclosure of the Settlement Agreement is barred
    by common law settlement privilege to the
CCAA
judge for determination
    in the exercise of his discretion in the
CCAA
proceeding.

Released: AH  JAN 26 2016

Alexandra Hoy
    A.C.J.O.

I agree R.A. Blair
    J.A.

I agree P. Lauwers
    J.A.





SCHEDULE
    A

Investment Canada Act
,
    R.S.C., 1985, c. 28 (1st Supp.)



Purpose of Act

2.
Recognizing
    that increased capital and technology benefits Canada, and recognizing the
    importance of protecting national security, the purposes of this Act are to
    provide for the review of significant investments in Canada by non-Canadians in
    a manner that encourages investment, economic growth and employment
    opportunities in Canada and to provide for the review of investments in Canada
    by non-Canadians that could be injurious to national security.



Matters
    to be referred to Minister

19.
(1) The
Director
shall refer to the Minister, for the purposes of section 21, any of the
    following material received by the Director in the course of the review of an
    investment under this Part:

(
a
) the
    information contained in the application filed under section 17 and any other
    information submitted by the applicant;

(
b
) any
    information submitted to the Director by the person or entity from whom or
    which control of the Canadian business is being or has been acquired;

(
c
) any
    written undertakings to Her Majesty in right of Canada given by the applicant;
    and

(
d
) any
    representations submitted to the Director by a province that is likely to be
    significantly affected by the investment.



Privileged information

36.
(1) Subject to subsections (3) to (4), all information obtained with respect to
    a Canadian, a non-Canadian, a business or an entity referred to in paragraph
    25.1(c) by the Minister or an officer or employee of Her Majesty in the course
    of the administration or enforcement of this Act is privileged and no one shall
    knowingly communicate or allow to be communicated any such information or allow
    anyone to inspect or to have access to any such information.

Evidentiary privilege

(2) Notwithstanding any other Act or law but
    subject to subsections (3) and (4), no minister of the Crown and no officer or
    employee of Her Majesty in right of Canada or a province shall be required, in
    connection with any legal proceedings, to give evidence relating to any
    information that is privileged under subsection (1) or to produce any statement
    or other writing containing such information.

Communication
    or disclosure of information

(3) Information that is privileged under subsection
    (1) may, on such terms and conditions and under such circumstances as the
    Minister deems appropriate,

(
a
)
    on request in writing to the Director by or on behalf of the Canadian or
    non-Canadian to which the information relates, be communicated or disclosed to
    any person or authority named in the request; or

(
b
) for
    any purpose relating to the administration or enforcement of this Act, be
    communicated or disclosed to a minister of the Crown in right of Canada or a
    province or to an officer or employee of Her Majesty in right of Canada or a
    province.



Exceptions

(4) Nothing in this section prohibits the
    communication or disclosure of

(
a
) information
    for the purposes of legal proceedings relating to the administration or
    enforcement of this Act;

(
b
) information
    contained in any written undertaking given to Her Majesty in right of Canada
    relating to an investment that the Minister is satisfied or is deemed to be
    satisfied is likely to be of net benefit to Canada;

(
c
)
    information to which the public has access;

(
d
) information
    the communication or disclosure of which has been authorized in writing by the
    Canadian or the non-Canadian to which the information relates;



(
f
)
    information to which a person is otherwise legally entitled;



Non-disclosure

(5) No minister of the Crown and no officer or
    employee of Her Majesty in right of Canada or a province may be required, in
    connection with any legal proceedings or otherwise, to give evidence relating
    to or otherwise to communicate or disclose any information referred to in
    paragraph (4)(
b
) where, in the opinion of the Minister or a person
    designated by the Minister, the communication or disclosure of that information
    is not necessary for any purpose relating to the administration or enforcement
    of this Act and would prejudicially affect the non-Canadian that gave the
    written undertaking referred to in that paragraph in the conduct of the
    business affairs of that non-Canadian.





[1]
R.S.C. 1985, c. 28 (1st Supp.).



[2]
Now the Minister of Innovation, Science, and Economic Development.



[3]
R.S.C., 1985, c. C-36.



[4]
Now Innovation, Science and Economic Development Canada.



[5]
See, for example, ss. 9, 10 and 11 of
FIRA
. Section 9 required the
    Minister to review any information contained in the notice of proposed
    acquisition of control or establishment of a new business, any other
    information submitted, any written undertakings given and any representations
    submitted by a province likely to be affected by the investment. Section 10
    referred to a summary of the information and written undertakings. Section 11
    similarly referred to information  and any written undertakings.



[6]
Bill C-15,
An Act respecting Investment in Canada
, 1st Sess., 33rd
    Parl., 1984-1985.


