Rep: OEB Doc: 12YPN Rev: 0 ONTARIO ENERGY BOARD Volume: 7 25 JUNE 2004 BEFORE: R. BETTS PRESIDING MEMBER P. NOWINA MEMBER P. SOMMERVILLE MEMBER 1 RP-2003-0203 2 IN THE MATTER OF a hearing held on Friday, 25 June 2004, in Toronto, Ontario; IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Schedule B); AND IN THE MATTER OF an Application by Enbridge Gas Distribution Inc. for an Order or Orders approving or fixing just and reasonable rates and other charges for the sale, distribution, transmission and storage of gas commencing October 1, 2004. 3 RP-2003-0203 4 25 JUNE 2004 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 JENNIFER LEA Board Counsel COLIN SCHUCH Board Staff JAMES WIGHTMAN Board Staff FRED CASS Enbridge Gas Distribution Inc. DENNIS O'LEARY Enbridge Gas Distribution Inc. TOM LADANYI Enbridge Gas Distribution Inc. TANIA PERSAD Enbridge Gas Distribution Inc. MICHAEL CADOTTE Union Gas Limited ROBERT WARREN CAC & CCC JULIE GIRVAN CAC & CCC MICHAEL JANIGAN VECC ROGER HIGGIN VECC PETER THOMPSON IGUA JAY SHEPHERD School Energy Coalition DAVID POCH Green Energy Coalition MELANIE AITKEN Direct Energy Marketing Limited ELISABETH DeMARCO CEED, OESC, Superior Energy Management, TransAlta Energy Corporation MALCOLM ROWAN CME CAROL STREET CME MURRAY KLIPPENSTEIN Pollution Probe JACK GIBBONS Pollution Probe BRIAN DINGWALL Energy Probe VALERIE YOUNG OAPPA, Casco, Maple Lodge Farms, Markham District Energy MURRAY ROSS TransCanada PipeLines 8 TABLE OF CONTENTS 9 PRELIMINARY MATTERS: [19] SUBMISSIONS ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: [86] SUBMISSIONS BY MR. THOMPSON: [87] SUBMISSIONS BY MR. DINGWALL: [258] SUBMISSIONS BY MS. STREET: [271] SUBMISSIONS BY MR. HIGGIN ON BEHALF OF MR. JANIGAN: [295] PROCEDURAL MATTERS: [314] SUBMISSIONS ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: [324] SUBMISSIONS BY MR. SHEPHERD: [325] SUBMISSIONS BY MR. CASS: [345] REPLY SUBMISSIONS BY MR. THOMPSON: [500] DECISION ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: [536] 10 EXHIBITS 11 EXHIBIT NO. K.7.1: ILLUSTRATIVE EXAMPLES FOR THE DEFERRED INCOME TAX PANEL [33] EXHIBIT NO. K.7.2: DOCUMENT BRIEF OF IGUA [102] EXHIBIT NO. K.7.3: MOTION RECORD OF MOVING PARTIES IN RP-2001-0232 [104] EXHIBIT NO. K.7.4: MOTION RECORD OF Enbridge GAS DISTRIBUTION IN RP-2001-0232 [106] EXHIBIT NO. K.7.5: STAPLED DOCUMENT WITH EXCERPT FROM THE STATUTORY POWERS PROCEDURE ACT [111] EXHIBIT NO. K.7.6: STAPLED DOCUMENT, FRONT PAGE OF WHICH IS RULE 10 FROM THE RULES OF PRACTICE & PROCEDURE ACT [113] EXHIBIT NO. K.7.7: LETTER FROM EGD'S DIRECTOR OF FINANCE DATED OCTOBER 30, 2002 [141] EXHIBIT NO. K.7.8: LETTER FROM EGD'S DIRECTOR OF FINANCE DATED NOVEMBER 11, 2002 [142] EXHIBIT NO. K.7.9: CASE OF THE VANCOUVER SUN VERSUS ATTORNEY GENERAL OF CANADA [321] EXHIBIT NO. K.7.10: EXTRACTS FROM A BOOK ENTITLED "ADMINISTRATION OF INCOME TAX" [351] 12 UNDERTAKINGS 13 14 --- Upon commencing at 9:35 a.m. 15 MR. BETTS: Thank you, everybody. Please be seated. 16 Good morning, everybody, and just for the record, I'll make -- allow everybody to notice Mr. Jan Carr at the back of the audience there, he's Vice-Chair of the Board and come to, I assume, hear what's going on today. He warned me he'd be here. 17 Today is day 7 of the application RP-2003-0203. The Board has established this day as an opportunity for parties to argue the appropriateness of maintaining four documents submitted by the applicant as confidential. 18 Before we begin are there any preliminary matters? 19 PRELIMINARY MATTERS: 20 MR. CASS: There are, Mr. Chair, if I may address a few matters. 21 MR. BETTS: Please proceed. 22 MR. CASS: I have a couple of undertaking responses. First there is a response to Undertaking J.2.4 which concerned copies of 1995 and 1996 customer surveys, the response to that undertaking is available. 23 MR. BETTS: Thank you. Thank you Mr. Cass. 24 MR. CASS: Next I have a response to Undertaking J.5.2, the original question here was a request for production of documentation from stakeholder meetings. I understand that this is actually a corrected response to this Undertaking J.5.2. 25 MR. BETTS: My records indicate that we did receive this yesterday. Should we just dispose of the previous one? 26 MR. CASS: I think that would be a good way to proceed, Mr. Chair, yes. 27 MR. BETTS: Thank you, Mr. Cass. 28 MR. CASS: Then the next item, Mr. Chair, is a few pages that have been prepared for the purposes of the deferred taxes witness panel that will appear on Monday. These are, I guess I would call them, illustrative aids that the panel will use in order to assist the Board in understanding the deferred taxes evidence. 29 MR. BETTS: Thank you. 30 MS. LEA: This group of documents then can be given an exhibit number for identification, Mr. Cass. 31 MR. CASS: Yes. 32 MS. LEA: J.7.1, please. Pardon me, I'm getting my undertakings and my exhibits mixed up, K.7.1. 33 EXHIBIT NO. K.7.1: ILLUSTRATIVE EXAMPLES FOR THE DEFERRED INCOME TAX PANEL 34 MR. BETTS: Ms. Lea, can you identify a description for us or perhaps Mr. Cass can. 35 MS. LEA: Yes, certainly. Illustrative examples for deferred income tax panel. I'll give one to the reporter also. 36 MR. BETTS: Thank you. 37 MR. CASS: That's all I have, Mr. Chair. Thank you. 38 MR. BETTS: Thank you, Mr. Cass. Are there any other preliminary matters? 39 MR. THOMPSON: I just had one, Mr. Chairman. 40 A few days ago when you rendered your decision on EGD's motion to move issues from the list, you indicated that submissions with respect to costs could be made later. I was wondering if I could have your indulgence to make those submissions in the closing argument of IGUA rather than making a separate submission, or are immediate submissions on costs with respect to that motion preferred? 41 MR. BETTS: Can I have any comments or submissions from the other parties. Certainly we can deal with Mr. Thompson's request individually. Is there any other comment that anyone would like to make? 42 MR. SHEPHERD: Mr. Chairman, we would agree with Mr. Thompson. 43 MR. BETTS: Certainly, then, from the panel's point of view, those submissions included in closing arguments would be fine. 44 MR. THOMPSON: Thank you, sir. 45 MR. BETTS: Anything further? Ms. Girvan. 46 MS. GIRVAN: I just wanted to make sure that the Board had received the letter from Mr. Warren yesterday. 47 MS. LEA: We have copies. It was received in the Board's offices. 48 MR. BETTS: We've been in the process of getting new office equipment and furniture. I did get it so I can attest that it was received, but my fellow Board members have not, so we'll make certain that they get to read that now. Thank you. 49 Thank you. Are there any other preliminary matters? 50 MR. CASS: When we get to the point of argument of the confidentiality motion, Mr. Chair, I do have one other item to pass around. I've already given it to Mr. Thompson but not to others. 51 MR. BETTS: Thank you, and I will basically introduce that portion of the session and welcome any input at that point. 52 I'll just make one more point here for the Panel, just some clarification on the Board's position on oral arguments, and again, appreciating that this is a different strategy and a different procedure than we've typically followed in the Enbridge proceedings, but the primary purpose for the Board moving in that direction is that we feel it would be beneficial to have the opportunity to question those that are giving oral arguments and it's perhaps something that we have not had the ability to do in the past. So that is truly our objective so the idea of providing written arguments instead of those arguments is, from our point of view, kind of the last alternative. We would much prefer to be able to receive the arguments from the author -- with the author present so that we can question them. 53 So let's make that effort if we can. The Board would like to say that we respect the fact that many of you have made alternate plans in that period, assuming that things would be done in written format. The Board is willing to try and accommodate any of your scheduling conflicts as well and we would welcome your discussing that matter with Board Staff in an effort to find a time that would work for everybody, and perhaps even through the day today, you might have an opportunity to discuss any scheduling issues with Ms. Lea and she can help us coordinate those activities. 54 With that being said, we are now at the stage where we will deal with arguments with respect to the confidential matters. The Board indicated earlier that it is prepared to go into a closed or in-camera session which would be restricted to parties who have signed the confidentiality agreements, as well as all Ontario Energy Board staff, who are by the nature of their jobs, restricted to confidentiality as well. 55 So I just wanted to preface that by saying that it's certainly the Board's preference to deal with everything in an open session and I would ask those parties that intend to give arguments or submissions today to consider whether it would be possible to deal with their arguments in such a way that the details of the confidential documents would not need to be addressed. I'm looking for an opportunity to deal with this in open session and yet not divulge any confidential matters. That's one which we can approach it. 56 The other way we could approach it is to go into an in-camera session and then, after the fact, look at the transcripts and try to determine what portions could be in left public and what portions would have to be redacted and kept as confidential, and I'm looking for your submissions and input on that. 57 Perhaps Mr. Cass first because you are the one that's concerned about confidentiality. 58 MR. CASS: Mr. Chair, I have tried to frame my arguments so that they could be made on the public record and would not get into details of the confidential information such that there wouldn't be a need to go in-camera. 59 MR. BETTS: So you could deal with the matter in open session? 60 MR. CASS: The way I have framed my arguments. Now, of course, if I have to respond to points that do get into the details of confidential information, then that would change. But the way my arguments stand right now, I don't believe there would be a need to go in-camera for the purpose of the points I intend to make. 61 MR. BETTS: Mr. Thompson, how about you? 62 MR. THOMPSON: I think I've done the same thing. You never know until the other side reacts, but I would certainly strive to do that. And if I was getting into an area that I sensed might be sensitive I could alert my friend to it before we headed down that road to see if he had any problems. 63 MR. BETTS: Are there any comments or submission? Mr. Shepherd? 64 MR. SHEPHERD: Mr. Chairman, our argument will not refer directly to any confidential documents. 65 MR. BETTS: And who else intends to give arguments today? 66 MR. DINGWALL: I may, depending of course on the completeness of Mr. Thompson and Mr. Shepherd, who tend to leave few crumbs these days. But I would not be intending on referring to any of the confidential material specifically. 67 MR. BETTS: Ms. Street? 68 MS. STREET: Mr. Chair, I fall into the same position as Mr. Dingwall. Whether I am going to be required to say anything remains to be seen, but certainly I won't be referring to anything confidential. 69 MR. BETTS: Very well. 70 Mr. Higgin, do you intend to -- 71 MR. HIGGIN: No, I do not. Counsel for VECC, Mr. Janigan, is making a written set of submissions by letter to the Board and that's expected momentarily. In fact, I've just received an e-mail copy of that. 72 MR. BETTS: Okay. You have an e-mail copy of that now? 73 MR. HIGGIN: I do, yes. 74 MR. BETTS: Are you satisfied it's the final version of it? 75 MR. HIGGIN: I think so. 76 MR. BETTS: Perhaps as soon as you feel it's appropriate, it should be -- I would like to see that given to the company so that they can determine whether there's something sensitive in there that -- 77 MR. HIGGIN: I understand that as well. I'd hoped it was here before the session would start, sir. 78 MR. BETTS: Ms. Girvan? 79 MS. GIRVAN: The letter from Mr. Warren that was sent to the Board yesterday indicates that we will be supporting the CAC and the CCC will be supporting the submissions made by Mr. Thompson today. 80 MR. BETTS: Thank you. And therefore we shouldn't expect anything from you. Thank you. 81 Well, I think on that basis, I have not heard any objection otherwise, we will try to do this in open session. And Mr. Cass, you're obviously welcome, as would be the normal case, if you feel things are straying into a sensitive area, to let the Board Panel know through an objection and we'll try to confine the discussion as much as possible. If necessary, the Board will move into a closed session to deal with specific matters. So this will be in open session. 82 I'm really thinking now who should start this off. The applicant has asked for this to be kept as confidential -- in fact, excuse me for a moment while I just confer with my fellow Panel Members. 83 [The Board confers] 84 MR. BETTS: Thank you. After that short conference, we will ask Mr. Thompson to go first and then we will hear any supporting arguments and then we can hear arguments from anyone that opposes Mr. Thompson's position. 85 Mr. Thompson, please proceed. 86 SUBMISSIONS ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: 87 SUBMISSIONS BY MR. THOMPSON: 88 MR. THOMPSON: Yes, thank you, Mr. Chairman. 89 There's a number of documents I put on the dais, but there's an omission from one of them. It's the documents authored by Ms. O'Connor that I mentioned the other day that I would have copied and filed, and I think I should provide copies of these documents to you now. They're referenced in tab 4 of this documents brief, but the page says "Documents Excluded Until Confidentiality Claim by EGD is Resolved." So if I might just be permitted to give you copies of these documents. 90 MR. BETTS: Ms. Lea, I think until we determine otherwise, let us take anything that may be of a confidential nature and establish a different code for it, for example, X, and we'll therefore recognize which documents may be sensitive. And we will -- Ms. Lea, we will need an exhibit number for the document. 91 MS. LEA: Yes, and I was wondering if Mr. Thompson can indicate, within the documents brief that he has provided, are there any materials that are confidential? 92 MR. THOMPSON: There are not, but I'll take you through that in one second. 93 MS. LEA: I thought we would just wait a moment for Mr. Thompson to return. Do you have any more copies for the record itself? 94 MR. THOMPSON: I was only be able to bring ten, so the Board has three, you have one, the company has the rest. 95 Mr. Chairman, I put some material on the dais and this material relates not only to the motion this morning but also to the cross-examination next week. I wanted to give the company notice of these documents. The first document is a document entitled "Documents Brief of IGUA," and then under it are some authorities that I will be referring to on the motion. There's nothing in the documents brief that we've submitted on behalf of IGUA that is confidential. 96 I'll just run quickly through the index. What it refers to at tabs 1 and 2 are the motion records that preceded the Board's December 3rd decision in RP-2002-0135. And you'll find each of those motion records in the binders that are underneath. So the documents brief, tab 1, for example, refers to the IGUA motion record and says, "Filed Separately," and that's the first book under the documents brief, and then at tab 2, it refers to EGD's motion record and it's filed separately. 97 The documents brief at tab 4 refers to the correspondence from EGD's director of finance, which I just handed to you, and at tab 5, it's the Procedural Order that led to the 0135 proceedings. Tabs 6, 7, and 8 are the arguments in 0135 proceedings. The arguments at tab 6 and 8 are already in the record in this proceeding. They were requested to be filed by Enbridge in its interrogatories to IGUA. At tab 7 we've enclosed or have attached their argument. All of this is on the public record. Tab 9 is the decision. Tab 10 is the excerpt from Enbridge's letter of April 26th claiming confidentiality. And then tab 11 is the excerpts from the settlement proposal dealing with deferred taxes. 98 So apart from the two documents that I just distributed, there's nothing in any of these three briefs that is confidential so perhaps we could have them marked on the public record. 99 MS. LEA: Thank you. Mr. Cass, you've agreed that all three cerlox-bound briefs are acceptable to go on the public record? 100 MR. CASS: Yes. 101 MS. LEA: Thank you. So the documents brief with this case number on it, the documents brief RP-2003-0203 is going to be K.7.2, so document brief of IGUA. 102 EXHIBIT NO. K.7.2: DOCUMENT BRIEF OF IGUA 103 MS. LEA: The motion record of the moving parties which was in the RP-2001-0232 case, I think we'll mark that separately as K.7.3. 104 EXHIBIT NO. K.7.3: MOTION RECORD OF MOVING PARTIES IN RP-2001-0232 105 MS. LEA: The third cerlox-bound brief, the motion record of Enbridge Gas Distribution Inc. in that same 2001-0032 case, mark as K.7.4 for identification. 106 EXHIBIT NO. K.7.4: MOTION RECORD OF Enbridge GAS DISTRIBUTION IN RP-2001-0232 107 MS. LEA: Now, Mr. Thompson, I gather that the two stapled-together pieces is excerpts from the Statutory Powers Procedure Act, you wish those to be marked at this time also? 108 MR. THOMPSON: They're authorities to be referred on the motion so I'm in your hands, if you wish to mark those, that's fine. 109 MS. LEA: I guess we've gotten into the habit, despite the fact that these things are in evidence, of just marking for them identification so I'll pursue that practice. 110 So the stapled document, the front piece of which is an excerpt from the Statutory Powers Procedure Act will be K.7.5. 111 EXHIBIT NO. K.7.5: STAPLED DOCUMENT WITH EXCERPT FROM THE STATUTORY POWERS PROCEDURE ACT 112 MS. LEA: And the second stapled document the front page of which is Rule 10 from the Rules of Practice & Procedure, we'll mark that for identification K.7.6. 113 EXHIBIT NO. K.7.6: STAPLED DOCUMENT, FRONT PAGE OF WHICH IS RULE 10 FROM THE RULES OF PRACTICE & PROCEDURE ACT 114 MS. LEA: Then Mr. Thompson, I gather that the other two stapled pieces which are correspondence do contain confidential material; is that right? 115 MR. THOMPSON: Yes, this is the subject matter. 116 MS. LEA: This is the subject matter. 117 MR. THOMPSON: Well, one aspect of confidentiality claim that the company seeks. 118 MS. LEA: Should the two stapled pieces be marked together as one exhibit? 119 MR. THOMPSON: Yes. Yes, they should. 120 MS. LEA: So we'll begin the X series with those then. What's the best non-confidential description of these documents, Mr. Thompson? 121 MR. THOMPSON: I think just the description we've used in the brief, correspondence from EGD's director of finance, I guess, dated October 30 and November 11, 2002. 122 MS. LEA: Okay. Thank you. So we'll put these in the X series then, we'll call them X.7.1 both collectively X.7.1. 123 MR. CASS: Excuse me, Mr. Chair, I wonder if I might speak up before these get marked as X exhibits. I did want to indicate the reason for the company's concern about these documents in my argument but ultimately, the company will not assert a confidentiality argument with respect to these so that's why I speak up now just to indicate that they probably need not be marked as X exhibits. Should I just proceed to explain what I've just said and then perhaps we can mark these as K exhibits? 124 MR. BETTS: I think that would be helpful. 125 MR. CASS: The company's concern with respect to these documents and I assume now we're talking about the letter from Trish O'Connor to Mr. Thompson of November 11, 2002, and also a letter from her to Mr. Thompson of October 28th, 2002, relates to the circumstances in which these documents were provided. 126 Mr. Thompson can correct me if he disagrees, but it was my understanding that these documents were provided to Mr. Thompson as part of a without prejudice settlement discussion of the deferred taxes issue. In fact, if my memory is correct, and again, I stand to be corrected if I'm wrong, it was essentially a settlement discussion that was facilitated through Board counsel so almost in the nature of a mini ADR of the deferred taxes issue. That is the reason for the company's concern about confidentiality surrounding these documents; however, if Mr. Thompson feels that he needs these for the purposes of this hearing, the company will not hold that confidentiality concern as an obstacle to the use of these documents and so indeed, I don't think there is any argument or objection to the marking of these documents as exhibits on the public record. 127 MR. BETTS: Do you wish to make any reply to that? 128 MR. THOMPSON: Yes, perhaps I should, Mr. Chair. 129 I agree with Mr. Cass, these documents were created in the course of a settlement process. They were, however, provided to us by -- as information, they weren't documents that contained any settlement positions and I had understood Mr. Cass to say the other day he wasn't claiming privilege for the documents, his position was they should be held in confidence so I spoke to him yesterday about this and confirmed that we're not debating the settlement privilege issue, only whether they can be used to test the information that's been filed in this case because the nature of the information is essentially similar to what was provided subsequently. So that's the purpose of using the information and if my friend has no objection to the information being available for that purpose, then my suggestion is we just, rather than mark them, people could just insert them in the documents brief at tab 4 because that's what that tab is designed to accommodate. 130 MR. BETTS: Well, I think I've heard no objection to this material, these two documents, being included on the public record. We'll just confer for a moment. 131 [The Board confers] 132 MR. BETTS: First of all, we're prepared to accept that position and particularly on the basis that no one objects to these being filed on a -- in the public record. The Board would just like to remind all parties that this would be specifically in reference to the ADR or the discussions that might go on the side towards a settlement of issues. We do respect and continue to respect the need for confidentiality. In this particular case, it appears as though both parties agree that these documents may be made public; however, we would not want either party to feel pressured by a concern of the image that might be established by refusing to do so and that could be implied in what's going on here. 133 So we will proceed to put this on the public document and remind everybody once again that those matters that are discussed between the parties on a confidential basis should be honoured and there should only be exceptions to that that would come to the Board's attention. 134 With that, there has been a suggestion, I guess there's two ways we can deal with this, either to establish these with separate exhibit numbers or as Mr. Thompson has indicated, they could be included under tab 4 of your documents in K.7.2; is that correct, Mr. Thompson? 135 MR. THOMPSON: Yes, Mr. Chairman. 136 MR. BETTS: I think because they're separate and I get confused when things aren't numbered appropriately, I'm going to ask that they be numbered separately and it will be easier for me to find them in this stack of information. Ms. Lea. 137 MS. LEA: Yes, we're at K.7 -- is it acceptable that these two documents be marked together as K.7.7. 138 MR. BETTS: No, let's do them separately. 139 MS. LEA: All right. Very well. Then we'll have the letter of October 30th, 2002 as K.7.7. A letter of November 11, 2002, K.7.8, please. Thank you. 140 MR. BETTS: Thank you. 141 EXHIBIT NO. K.7.7: LETTER FROM EGD'S DIRECTOR OF FINANCE DATED OCTOBER 30, 2002 142 EXHIBIT NO. K.7.8: LETTER FROM EGD'S DIRECTOR OF FINANCE DATED NOVEMBER 11, 2002 143 MR. BETTS: Mr. Thompson, please proceed. 144 MR. THOMPSON: Thanks very much. 145 The bottom line of my submissions is that the claims that the company makes to keep some of the information confidential should be -- with respect to this issue, 12.1, should be rejected. 146 Let me just begin, if I might, with the principle that I submit should be applied. It's my submission that in a hearing such as this, which affects the public and in particular ratepayers, unless there are very exceptional circumstances, a proceeding must be transparent and completely open, particularly with respect to specific items of cost which are being claimed for recovery from ratepayers. 147 In that context, it's the submission of my client that all documents pertaining to costs that the company seeks to recover from ratepayers should be on the public record and subject to scrutiny in examination at the hearing. 148 It's my submission that there's a very heavy onus to discharge to keep confidential documents which pertain to the very costs which the utility seeks to recover from ratepayers. In this particular case with respect to issue 12.1, what we are talking about are income tax costs, and it's not EGD's income tax costs but income tax costs incurred by former EGD affiliates. Income tax costs are planned and then incurred either according to plan or according to some revised implementation arrangement. 149 What we're dealing with in this specific case are historic planned and incurred costs for two former affiliates of EGD. These are not forecast costs, they are historic costs. The size of the claim to which EGD asserts against ratepayers related to these costs is substantial, $23.8 million, which grossed up for income taxes is almost $37 million. This, in my submission, is a very significant amount and that all documents pertaining to these cost claims should be on the public record and available for review. 150 It's my submission that the public has a right to know all of the information that is with the Board pertaining to a determination of the recoverable amount, if any. 151 So I have given you a number of authorities with respect to what I call the principle of openness, starting with your own Board rules, K.7.6. I don't intend to take you through these materials in any great detail. It's clear from page 13 of your guidelines for the treatment of filings made in confidence, in section 3.8.2, that a Panel conducting an oral hearing where an issue of confidentiality arises has a very broad discretion to address the claim. 152 In terms of the principles that apply in assessing whether claims for confidentiality should or should not be allowed, in the second attachment, Exhibit K.7.5, the authorities with respect to confidentiality, I have attached firstly section 9 of the Statutory Powers Procedure Act, which applies to this Tribunal unless excluded by your own Act, and section 9(1) states that: 153 "An oral hearing shall be open to the public except where the tribunal is of the opinion that, (a) matters involving public security may be disclosed ..." 154 That's not the situation here of course. And then subsection (b) identifies a class of information which the Board may choose to treat as confidential: 155 "(b) intimate financial or personal matters or other matters may be disclosed at the hearing of such a nature, having regard to the circumstances, that the desirability of avoiding disclosure thereof is in the interests of any person affected or in the public interest outweighs the desirability of adhering to the principle ..." of openness, then you can order that the information be kept in confidence. 156 There's language to a similar effect in the Courts of Justice Act, which is at page 3 of this document, Exhibit K.7.5, section 135, subsection (2) sets out the test applicable to courts. 157 "The court may order the public to be excluded from a hearing where the possibility of serious harm or injustice to any person justifies a departure from the general principle that court hearings should be open to the public." 158 And then I've attached a series of cases at pages 5 and following, and I've highlighted some of the marginal notes that reiterate this principle of openness. 159 In the Ottawa Police case, I'll just read from the headnote, this is at page 5, in the second paragraph, it states: 160 "Unless there are compelling reasons to the contrary, a hearing, such as this ... that affects the public must be open to all citizens." 161 At page 7, we have the MDS Health Group case, a decision of Justice Lane, and here again, just at a level of principle, in the headnote, the middle of the paragraph, the decision of the court in that case was to reject the claim for confidentiality on the grounds that: 162 "... this was not a case where secrecy could be justified to protect private interests." 163 And there are themes to the same effect in the other cases which I won't take any time with, other than at page 14, I'll draw your attention to an excerpt from the decision in the McCreadie case, paragraph 14 at the bottom of the page, citing a case where it was held that: 164 "... Section 147(2) now Section 137(2) of the Courts of Justice Act was to be resorted to sparingly and in the clearest of cases and on the clearest of materials." 165 The other case that's attached is the case of Waxman and there again it cites all of the applicable principles. The only one I wanted to draw specifically to your attention is at pages 20 and 21 of the document, page 5 and 6 of the report. At paragraph 18 there is a citation from a Nova Scotia -- a case, MacIntyre versus Nova Scotia, in the Supreme Court of Canada and the quote from that case reads in part: 166 "It is now well established, however, that covertness is the exception and openness the rule. Public confidence in the integrity of the court system and understanding of the administration of justice are thereby fostered." 167 I submit that principle and those themes are applicable to the issue in this case turning on deferred taxes associated with rental program assets, particularly where the claim is in a substantial amount of some $24 million after taxes and grossed up almost $47 million. 168 So those are the principles that I submit you should have in mind when you're considering the claim for confidence that the company makes. 169 In terms of the specific documents for which confidence is claimed, I just wanted to give you the references here so you're aware of these. The first is in the prefiled evidence and it's at Exhibit A8, tab 5, schedule 2, appendix 5. And what has been filed in confidence for those -- at that appendices -- 170 MR. BETTS: I'm sorry, Mr. Thompson, would you mind repeating that reference again, please? 171 MR. THOMPSON: Yes, Exhibit A8, tab 5, schedule 2, appendix 5. 172 MR. BETTS: Thank you. 173 MR. THOMPSON: And what we have there are the actual tax returns of the numbered company over the relevant period of time which is between October 1, 1999 and May 7, 2002. So there's about almost two inches of actual tax returns which show the actual amounts claimed by these two companies. These are the actual taxes that relate to the claim that's being asserted for recovery against ratepayers in these cases. 174 The second group of documents are similar and they are tax returns including the tax returns of ESI, the other affiliate that carried on the rental program business, in part, after October 1, 1999 and they are at the response to Board Staff No. 109, so that's Exhibit I, tab 1, schedule 109. So that's one set of documents that the company is seeking to exclude from the public record, one type of document, tax returns. 175 The second category of documentation that the company seeks to exclude is what they refer to as tax-planning information, and you'll find the exclusions that are claimed with respect to these kinds of documents, they are claimed with respect to School's Interrogatory Nos. 1 and 155. So just so you'll understand the type of information that the company is seeking to have treated confidentially, I suggest we take a look at School Energy No. 1 which is Exhibit I, tab 16, schedule 1. This was a question seeking tax-planning information. The company provided a response and then there are three attachments to the response, and it's my understanding that the company is claiming to have attachment 3, which is some planning information documents prepared by Price Waterhouse and Enbridge's Calgary tax department, treated confidentially. Maybe it's more than appendix 3. 176 Is it more than appendix 3, Fred, or is it appendix 2 and 3? 177 MR. CASS: I'm sorry, I haven't related the request for confidentiality to appendix 3 the same as Mr. Thompson has. The request for confidentiality is as set out in the attachment to Ms. Persad's letter of April 26th, 2004. It's on page 3 and it's the first item. Just off the top of my head, it appears to me that that is -- that could be characterized as appendix 3, but I haven't double checked to make sure that that is correct. 178 MR. THOMPSON: Looking at that description in the document Mr. Cass has referred to, it's found at tab 10 of the documents brief, Exhibit K.7.2, it may well cover all three attachments. In any event, the -- whether it's one of them, two of them, or three of them, the type of document that the company seeks to have held in confidence is the actual tax-planning information that led to the taxes that were eventually paid by these companies for which the company now seeks to obtain recovery in part from ratepayers. 179 And falling into a similar category are, I believe, attachments 7 to 10 of School Energy No. 155, that's Exhibit I, tab 16, schedule 155. So that's tax-planning type of information that I ask you to have treated in confidence. But again, it's the actual tax planning that preceded the actual taxes that the company seeks to recover from ratepayers in this case. 180 The other aspect of School Energy No. 155 that the company seeks to have treated in confidence are certain segments of the response to the interrogatory, and I have a redacted version of the response to the interrogatory as well as an unredacted version of the response to the interrogatory. 181 If you would look at the redacted version which is on the public record, you'll see at -- this is Exhibit I, schedule 155, there are 14 pages of a response and you'll see, starting at page 5, again at page 6, more at page 7, more at page 8, and then at pages 11, 12, 13, and 14, a number of redacted paragraphs. So you have to go to the confidential response to ascertain what's in those redacted paragraphs. 182 I think I can say fairly on the public record, without violating any confidences, that in large measure, the redactions refer to tax planning, in other words, they cross-reference to the type of tax-planning information that's contained in attachments 7 to 10. But they do -- they go beyond that in some respects and contain information that was communicated to EI's board of directors with respect to the implications of some of the transactions. 183 And I don't want to make any statements as to -- on the record as to the substance of those communications, but you have to look at page 14 of the confidential version of schedule 155, Exhibit I, tab 16, schedule 155. It really starts at page 13. 184 In the unredacted version, which I'll refer to at page 13, there's a heading entitled "Planning for Deferred Taxes/Regulatory Asset Recovery." And it goes on, and this is the debate over whether the sale of these assets would impact on the ability to recover the $50 million regulatory asset that the company labelled this deferred tax claim. So in the unredacted version -- sorry, in the redacted version, what's on the public record, paragraphs under that heading indicate that during the course of the six months after the sale was contemplated, there was discussion over whether this -- whether the gain on the sale and the regulatory asset recovery were linked. 185 The nature of the discussion is described and then you get over on to page 14 of the document and there are three redacted paragraphs which, I think I can say on the public record, incorporate the report that was made to the EI board of directors about the linkage between gain on the sale and the recovery of the regulatory asset. 186 I submit that that information is factual and it should be on the public record. We have information on the public record about the gain realized on the sale. We have information on the public record that the company, in proceedings before this Board, was taking the position that the gain on the sale and the recovery of the regulatory asset are not linked, and the report's being made to the company's board of directors on that issue and the implications of those reports, in my submission, should be on the public record. It must be on the public record if parties are going to understand at the end of the day how ratepayers are going to be accountable for amounts in addition to the gain that was realized on the sale. So that's one aspect of this information that should not be kept in confidence. Cross-examination on it should take place in open tribunal. 187 I think that captures the nature of the information that the company is seeking to keep confidential; tax returns, tax-planning information, some communications to the EI board of directors. The only other information that was initially listed was this information that was provided by Ms. O'Connor which is now on the public record so I don't need to -- I don't need to address it. 188 Now, in order to understand my specific submissions for my request that you reject this claim of confidence with respect to planning documents, tax returns, and information concerning the linkage of the gain on the sale and recovery of the so-called regulatory asset, you need to have a high-level overview of the history of this deferred tax issue. I don't intend to dwell on this at any length, but Members of this Panel of the Board, have not been exposed to this and I wanted to just give you a high-level overview of the issue, because at the end of the day, what this Panel has to do is apply the Board's decision in the 0135 case to the circumstances that come out in the evidence here. 189 The decision at the Board's 0135 case is at tab 9 of the documents brief. In order to appropriately apply that decision, in my submission, and understand why these documents are important for the public record, you have to have an understanding of what was in issue in that case and what was before the Board when it decided that case, because this information provides the context as to why nothing with respect to tax claims should be considered by the Board in-camera. 190 Now, the material before the Board when it considered the 0135 -- before the Board in the 0135 proceeding consisted of the two motion records that we've marked as Exhibit K.7.3 and K.7.4. There was no evidence before the Board about the actual transactions that had taken place following October 1, 1999, except the excerpts from the prefiled evidence in prior cases that are contained in those motion records. So there was none of this evidence that you now have in this case making a distinction between taxes payable and cash taxes paid. All that was before the Board were these two motion records. 191 What gave rise to the proceedings before the Board that were dissolved in the 0135 decision was a dispute between the company, on the one hand, and the intervenors, on the other hand, as to the nature of the Board's original decision. The company was taking the position that the Board's original deferred tax position conferred on the company and imposed on ratepayers an unconditional obligation to pay $50 million plus gross-up for the Procedural Order that the Board issued prior to the argument in the 135 case, and you'll find that at tab 5 of the motion -- sorry, of the documents brief, K.7.2. 192 The first paragraph of the Procedural Order of the Board cites the 179-14/15 decision, it then cites the motion records, and then goes on: 193 "Having reviewed the motions, the Board is of the view that the threshold issue raised by the motions is the appropriate interpretation to be given to the Board's original decision to establish the notional utility account." 194 And then the Board proceeded by way of written argument with respect to that issue. 195 In the run-up to that Procedural Order, you'll see correspondence at tab 3 of the brief, this is an exchange of correspondence, three-way -- well, Mr. Cass writing to the Board and sending his motion record, we respond, and then there's a series of letters, but the nub of it is that there's this issue about the nature of the relief that the Board had granted in the unconditional obligation to pay? That gave rise to the Board's Procedural Order, that gave rise to the arguments which you have, and then all of that led to the decision. 196 The decision, in my submission, reiterates that what was being debated and resolved at that time was this position that EGD had taken that the Board's order created this obligation on ratepayers to pay $50 million regardless. 197 You'll see that in my submission reflected in paragraph 20 of the decision on page -- the third page: 198 "EGDI seeks to recover $50 million in rates based on its interpretation of the original interpretation of the Board's original decision. EGDI's claim is opposed by IGUA, CAC and VECC. In order to deal with EGDI's claim, the Board issued a Procedural Order." 199 Then, in its finding starting at paragraph 45 and following, paragraph 46, the Board said this: 200 "The pivotal issue the Board must decide is whether the creation of the notional deferral account is linked to the payment of income taxes in the future or whether it represents an unconditional obligation by EGDI's ratepayers to pay an after-tax amount of $50 million as compensation for past benefits received from the rental program." 201 So that's the issue. The Board went on and dealt with that issue. 202 The context, I repeat, is all in these motion records. Just so you will be aware of it, the original decision is in the IGUA motion record at tab 2(a). The decision on EGD's attempt to have that varied was at tab 2(b). A subsequent decision of the Board cited in the reasons in the 135 case in 1999 rejecting an application by EGD to draw down against the notional account is at tab C. And then at tab 2(m), what you have is prefiled evidence that the company filed in the RP-2000-0040 case where it was seeking rates for 2001 and a draw against the account and some responding evidence at tab 2(n) from a Mr. Johnson, CA, hired by IGUA. 203 The issue did not go forward in that case because of the pending claim for judicial review. The case for judicial review was disposed of and the company came back again seeking a draw on this account and the prefiled evidence in support of that request you'll find in the 2001-0032 case at tab 2(d) of the motion record and some interrogatory information dealing with that application. 204 The only thing I wanted to draw to your attention here with respect to this information at this time is that in those two cases where the company was seeking to draw down against these accounts, the basis for the claim was cash taxes paid by the numbered company and forecast to be paid. So what the Board hearing the 0135 case had, that's all it had, just these snippets of prefiled evidence and some interrogatory responses, and there was nothing of the nature that we now have in this case making this distinction between taxes paid and taxes payable. This is a concept that has surfaced following the Board's decision in 0135 and there was nothing before the Board dealing with that nuance to the information. 205 So what's all that got to do with documents? Well, the documents that the company wants to hold in confidence are planning documents and actual tax returns that deal with concept of cash taxes to be paid, and I submit these documents are very important to have on the public record because I believe they will discredit this notion that what the company can now recover from ratepayers is some hypothetical notional taxes payable. That's what their evidence in this case is all about. 206 So none of this elaborate manipulation of taxes paid versus taxes payable was before the Board in the 0135 case. The Board in the 0135 case did have some information before it about the sale of the shares of the company that carried on the rental program business and other businesses to Centrica, and submissions were made about the gain on the sale and how that was to be -- whether it was to be brought into account and how it should be brought into account. But I can find nothing in the Board's 0135 decision that addressed that. 207 What the Board did say in its 0135 decision, it referred to the sale -- that's somewhere in the history, I believe, forgive me -- yes, referred to the sale in paragraph 61, "rental program assets have been sold to a third party" - technically that's inaccurate; the shares of the company that owned the assets were sold to a third party - "and as such neither EGD nor its affiliates bear any further tax liability post this date." 208 Above in paragraph 53, the Board did refer to the section of the original decision which said that: 209 "Any proceeds from a sale or transfer would be available to address the related tax consequences." 210 But said nothing further. And in its conclusions at page -- paragraph 62, the Board said that: 211 "EGDI may seek to recover such amount ..." 212 This is the amount of taxes that became payable between the 7th of October, 1999 and May 7, 2002. 213 "EGD may seek to recover such amount appropriately verified in the next rates application." 214 So intervenors will argue that it's still open to this Panel to consider the proceeds of the sale to Centrica and the extent to which, if at all, those are to be brought into account in this proceeding. 215 So that information -- and there's information in the record in response to a CAC interrogatory about the gain on the sale, and the public information indicates -- that information on the public record indicates the gain on the sale was, I think, $240 million after taxes. I can get you the precise reference. 216 The other aspect of the original decision that wasn't really being debated in this case - we were talking about the nature of the original decision - the other aspect of the original decision that wasn't dealt with in this case that seems to have been overlooked by everyone to date is that aspect of the original decision at -- you might want to just turn this up, it's at Exhibit K.7.3, 2(a), it's at page 27 of the decision and page 47 of the motion record. 217 This goes back to the original forecast of the deferred tax liability of the rental program at September 30, 1999 of about $168 million. In that case, there was also a $42 million Revenue Canada refund that the company either had received or it was forecasting to receive. I think it had received it, if I'm not mistaken, by the time -- 218 MS. NOWINA: Excuse me, Mr. Thompson, what page was that on? 219 MR. THOMPSON: It's Exhibit K.7.3, the IGUA motion record, and it's tab 2(a), page 27 of the decision, 47 of the motion record. 220 MS. NOWINA: Page 47, thank you. 221 MR. THOMPSON: This is where the Board refers to both the deferred tax liability and the tax credit and it says: 222 "In the Board's view, whoever is responsible for the payment of deferred taxes should be entitled to this credit." 223 That decision, in my respectful submission, and this may well be argued later, can only be interpreted to mean that the first $41 million drawdown of the deferred tax liability is covered by the Revenue Canada tax credit and that has not been, from what I can determine, taken into account in the company's current numbers, and it certainly doesn't show up in any of this tax-planning information that they want to keep out -- keep in confidence, have tested in confidence, and it doesn't show up in the actual tax returns. 224 So that's another issue that's still open for consideration in the context of all of the information that is on the record, both confidential and non-confidential. 225 MR. BETTS: Mr. Thompson, I'd just like to ask you how you're relating this to the issue of the confidentiality of the documents in question? You've made arguments on the merits of the information. 226 MR. THOMPSON: What I'm submitting is that the documents, planning documents in particular, should not be held in confidence because testing them on the public record will reveal that they don't take into account this aspect of the original decision, and that testing shouldn't be conducted in secrecy. It's a thin connection, but that's what is the thrust of my submission. And the same thing, the actual tax records that they want to keep in confidence will, when tested, show that that number has not been brought into account. Numbers already on the record I can test to show that they haven't brought that number into account. 227 So that's another aspect of the original decision that I submit supports having everything on the public record with respect to taxes. 228 I think I can conclude my submissions in this fashion: What we are faced with in this case with respect to this deferred taxes issue is an application of the Board's 0135 decision having regard to the circumstances and the context in which that decision was made. What we're faced with in this case, in applying that decision, is the reality that a gain was realized on the sale of these assets to a third party, these shares to a third party, of some $240 million. 229 It appears that a $42 million income tax refund has not yet been accounted for. In addition, the company is seeking to recover from ratepayers an additional $37 million, that's including income taxes, which can only fairly be construed to be an enhancement of an already substantial gain for EI. 230 So when you're faced with that kind of claim, I submit it's extremely important that the ratepayers and the public are entitled to scrutinize in a public forum, all of the documents which show what actually was planned and what actually took place because we look at the reality of the situation, not hypotheticals, you'll see that the only two companies that carried on this business between October 1, 1999 and May 7, 2002, the two of them actually paid taxes of $12.1 million. 231 So those are my submissions in support of rejecting the claim for confidentiality for these various documents. 232 MR. BETTS: Thank you, Mr. Thompson. 233 [The Board confers] 234 MR. BETTS: I think I will invite panel members to ask questions of clarification after each submission. It may be that we have to come back and ask questions of all parties at the end as well, but I'll just see if there is anything that's come up at this point. 235 MR. SOMMERVILLE: Mr. Thompson, is there any category of material that you would consider to properly fall within the private regime where a claim is being made for inclusion in rates? 236 MR. THOMPSON: Yes, Mr. Sommerville, I believe in the Board's guidelines there is a list of the types of information that could fall within the ambit of confidential information. Perhaps I can start by saying what can't fall within that ambit are documents that pertain to the very costs that are being claimed. 237 So in a case where the income taxes of affiliates were really not in issue before the tribunal in a direct way, then I could appreciate releasing that information could well violate some principle of commercial sensitivity. Information that is prospective, prospective information that's unrelated to the claims being made in a case, I think, could, in some circumstances, legitimately be treated as confidential. 238 I know when you were dealing with the Accenture arrangements, you weren't dealing with historic facts, you were dealing with arrangements that were ongoing and there's, I think in that situation, a heightened sensitivity to commercially-sensitive information, but historic tax information, historic tax-planning information pertaining to the two affiliates on which a claim is based do not fall within that ambit, in my respectful submission. 239 MR. BETTS: Thank you. Ms. Nowina and myself probably have a couple of questions at this point but we'll wait until the end and they may be clarified. We will hold off until then. 240 I'd like to hear, first of all, who would be providing submissions in favour of Mr. Thompson's position? Nobody at this point. And those that will -- I'm going to give Mr. Cass the opportunity -- 241 MR. DINGWALL: That was my hand, sir. 242 MR. BETTS: Your answer was? 243 MR. DINGWALL: That I would be providing submissions in support of Mr. Thompson. 244 MR. BETTS: Sorry, I didn't catch that, I apologize for that. How long do you think you might need, Mr. Dingwall? 245 MR. DINGWALL: Not very long, sir. 246 MR. BETTS: I think I'll take that. I'm trying to find a break period so that Mr. Cass can perhaps digest any of the arguments that might be favouring the position expressed by Mr. Thompson, so Mr. Higgin. 247 MR. HIGGIN: Yes, I believe the letter from Mr. Janigan has arrived, and therefore, it should be made available to Mr. Cass so that he can look at those submissions as well. Thank you. 248 I apologize for it not being here at the beginning of the proceeding, sir. 249 MR. BETTS: Has Mr. Cass received that yet? Before I accept this as an exhibit, I'd like Mr. Cass to review it and see from his perspective if there is nothing sensitive in it. If he finds no reason to be concerned about that, then we will then enter it as an exhibit. It will be entered as an exhibit, it's a question of how we will handle it. 250 Mr. Shepherd. 251 MR. SHEPHERD: Mr. Chairman, we do have some submissions. We're supporting neither Mr. Thompson, nor Mr. Cass, and so we may be appropriately in the middle somewhere. We'll be probably 20 minutes. 252 MR. BETTS: Okay. 253 MS. STREET: Mr. Chair, I do just have a very brief submission, less than five minutes. 254 MR. BETTS: I think what we'll do then, if everybody -- can everybody bear with us for another 15 minutes. It's getting close to break time and I think I'd like to hear from Mr. Dingwall and Ms. Street and then we will break at that point. 255 Mr. Dingwall, are you prepared to proceed? 256 MR. DINGWALL: Yes, sir. 257 MR. BETTS: Please do. 258 SUBMISSIONS BY MR. DINGWALL: 259 MR. DINGWALL: One of the essential points that comes to mind in assessing confidential documents in a proceeding before the Energy Board is what would be the effect had the corporate structure remained the same as it was prior to the separation of the companies and what would have been the obligation of disclosure in a regulated context of any supporting information relating to expenses being claimed? 260 I think that that becomes a logical starting point for determining what the company's basic obligations become when they're seeking recovery of costs that will relate to ratepayers. And I think the Board should clearly establish as a principle that corporate separation or the creation of affiliates does not of itself create any form of confidentiality simply because they are new corporate entities, especially when those affiliates are performing functions for which costs are being sought to be recovered, either directly or indirectly. So I don't believe that the convenience of corporate structuring and the separation of assets creates any new obligation; in fact, what it does is it should create more of a diligence on the Board in gaining information and ensuring consistency with previous levels of disclosure. 261 My final submission, and we've reached that rather quickly today -- 262 MR. BETTS: This is your only final submission. 263 MR. DINGWALL: We'll see how that goes, I may need a deferral account. 264 -- is that in the guidelines for the treatment of filings made in confidence, there are some very specific considerations addressed in assessing confidentiality. They relate to business impacts, they relate to the conduct of additional proceedings that may be impacted by the publicity of certain records, and they relate to business sensitivity as it relates to ongoing transactions. 265 I'm not going to go into them specifically; the Board has them available and is certainly aware of them. But my submission is that none of these documents fall within the categories of where there need be sensitivity to them and, therefore, that none of these documents merit confidential treatment. 266 Those are my submissions. 267 MR. BETTS: Thank you, Mr. Dingwall. 268 [The Board confers] 269 MR. BETTS: The Board Panel has no questions, Mr. Dingwall. Thank you. 270 Ms. Street. 271 SUBMISSIONS BY MS. STREET: 272 MS. STREET: Thank you, Mr. Chair. 273 I only wish to bring to the attention of the Board the case that was discussed in the news yesterday of the Supreme Court of Canada that supports the principle of openness and a lack of secrecy in hearings. I, unfortunately, don't have the cite with me because I read it last night at the end of the day, but I can, with your permission, provide that to you to confirm the context of what the case is about, should that be helpful. 274 What that case dealt with was a judicial investigative hearing connected to the Air India terrorism bombing and the police had legislative authority, provided some years after the incident, to question witnesses in an in-camera hearing before a judge. And in that hearing, the witness's right to remain silent was overridden because of the nature of the incident. The newspaper in Vancouver, the Vancouver Sun, challenged the secrecy of the hearing itself and it went to the Supreme Court of Canada which recently released its decision and was reported yesterday. 275 The Supreme Court held that the hearing of that nature should not be in-camera; that the principle of open and publicly accessible hearings is an extremely important principle for the courts and for, by corollary, any tribunal such as this; that it is important for a hearing to remain open so that the public -- there is no perception on the part of the public that the decision-maker is in any way improperly influenced by one or other of the parties before it. 276 That principle, then, of openness, should only be overridden in very unusual circumstances. I note that in those particular circumstances where the issue was one of overriding an individual's right to remain silent in a criminal context, even in that kind of a significant situation, the court was not prepared to override the importance of a public airing of the evidence, that that is in the public interest. 277 So in light of that direction from the Supreme Court, I suggest that the documents that the company wishes to keep confidential in this matter do not begin to approach the seriousness of the circumstances in that case, and for those reasons, the confidentiality is not appropriate in this case. 278 So as I said, Mr. Chair, I apologize, I don't have the actual headnote or case with me. With your permission, I will provide it. And I appreciate that I am taking Mr. Cass by surprise here, so I apologize for that, but I will provide it should you wish to see that. I believe I have stated the facts accurately and the quoted ruling of Mr. Justice Iacobucci as well. 279 MR. BETTS: Do any of the parties require that particular reference to be filed? 280 MR. CASS: Mr. Chair, I don't require that it be filed, but I can hardly respond to things that Ms. Street has said about something that is not here before us and she has not brought with her. 281 MS. STREET: I bring it to the attention of the Board as the current state of the law that touches on the issue before you, and, in my submission, it would be helpful for you to at least be aware of that case. 282 MR. BETTS: Can you get -- can you file that with the Board relatively quickly? 283 MS. STREET: I'm sorry, Mr. Chair? 284 MR. BETTS: How quickly can you file that with the Board? 285 MS. STREET: I will attempt to obtain a copy of the headnote over the break, if I can get it faxed to Board Staff. 286 MR. BETTS: That would be fine, thanks. And Board Staff can help you with communications if that's necessary. So we will ask that that be filed through the break period. Thank you. 287 No questions, Ms. Street. Thank you from the Board Panel. 288 I believe Mr. -- well, I know Mr. Shepherd has a submission to make. I'm wondering, Mr. Cass, have you had an opportunity to review this letter from Mr. Janigan? 289 MR. CASS: Yes, I did, sir. 290 MR. BETTS: Do you have any objection to this being filed on the public record? 291 MR. CASS: No. 292 MR. BETTS: Then I'm going to ask Mr. Higgin, who is with Mr. Janigan, if you would please read this into the record. We might as well have all of the comments on the transcript. 293 MR. HIGGIN: I'm having to read it from my computer because I don't have a hard copy in front of me. 294 MR. BETTS: Let's give you the hard copy so we make certain there's no differences. 295 SUBMISSIONS BY MR. HIGGIN ON BEHALF OF MR. JANIGAN: 296 MR. HIGGIN: This is a letter from Mr. Janigan, counsel to the Vulnerable Energy Consumers' Coalition, regarding confidentiality of documents relating to issue 12.1, "Deferred Tax (Notional Utility Account)". 297 "I am Counsel to the Vulnerable Energy Consumers' Coalition. Unfortunately, I am unable to attend at the hearing on Friday, June 25th, 2004, at which the Board will hear submissions on the request of EGDI to maintain the confidentiality of certain documents related to Issue 12.1, Deferred Taxes (Notional Utility Account). 298 "I request the Board's dispensation to make the following submissions in writing on behalf of my client and to have these entered into the record of the proceeding. 299 "Submissions of VECC." 300 "1. We understand that the documents in question are first, those listed in part 3 of the attachment to the April 26, 2004 letter to the Board from Ms. Tanya Persad, Legal Counsel to Enbridge Gas Distribution and second, a letter and attachments dated November 11, 2002 to Mr. Peter C.P. Thompson, QC from Ms. Trish O'Connor of Enbridge Gas Distribution. 301 "2. We understand that there is no need to address the materiality of the documents per se, but only whether the documents should remain confidential as requested by EGDI, or alternatively be placed on the public record and also whether the Board's hearing of the deferred tax issue should be held in camera or open hearing. 302 "3. Most intervenors, including VECC, have unredacted copies of the documents listed in part 3 of the attachment to Ms. Persad's April 26 letter and have signed confidentiality non-disclosure undertakings to the Company. The letter from Ms. O'Connor to Mr. Thompson is, to our understanding, not on the record in this proceeding. 303 "4. VECC believes that the letter to Mr. Thompson from Ms. O'Connor should become part of the record in this proceeding and should be dealt with by the Board in a similar manner to the other documents. 304 "5. In considering the status and disposition of the matter of the confidentiality of the documents, VECC submits first, that all of the documents are prepared by, or on behalf of EGDI and/or the Enbridge Group of Companies. No third party is directly involved, so that there is an absence of any significant cause for concern about harm to third parties. 305 "6. Second, the Company has not proven that there is any commercial sensitivity issue with the documents. After all they relate to tax matters over a prior period 1999-2002. 306 "7. On the other hand, VECC submits that the importance of having the Board's Decision on the Deferred Tax issue supported by a transparent record of relevant cross-examination and documentation outweighs any concern that EGDI and its parents and affiliates may have about confidentiality of these three year old tax documents. 307 "8. VECC submits that the public interest will be best served by having all relevant evidence on the public record and having an open hearing of Issue 12.1 in this proceeding. 308 "All of which is respectfully submitted. Yours truly, Michael Janigan, Counsel for VECC." 309 MR. BETTS: Thank you, Mr. Higgin. 310 I think at this point, we will break. We will return with Mr. Shepherd's submissions and then submissions from Mr. Cass. Thank you. 311 Oh, I better set a time or we'll be away for a long time. Let's try to be back here at 20 minutes to 12:00. 312 --- Recess taken at 11:17 a.m. 313 --- On resuming at 11:43 a.m. 314 PROCEDURAL MATTERS: 315 MR. BETTS: Thank you, everybody. Please be seated. 316 During that break, were there any preliminary matters that arose? 317 MS. STREET: Mr. Chair, with the assistance of Mr. Dingwall's laptop and Board Staff, we do have a copy of a part of the decision to which I made reference, which appears to include the headnote completely and only part of the decision itself, but certainly the headnote can be referenced and provided to you and I believe you will see, beginning at the top of the third page, of what has been provided, some reference to the open-court principle that it does apply to all judicial proceedings and is, in the words of the Supreme Court, a hallmark of democracy and a cornerstone of common law. 318 I apologize, I don't have the complete case, but at least that provides you a summary of what the case is about and I can undertake to provide the complete case if that would be of assistance. 319 MR. BETTS: I think this will be sufficient, thank you. May we have an exhibit number for this, Ms. Lea. 320 MS. LEA: Certainly, it would be marked for identification purposes as K.7.10. I beg your pardon, 7.9. 321 EXHIBIT NO. K.7.9: CASE OF THE VANCOUVER SUN VERSUS ATTORNEY GENERAL OF CANADA 322 MS. LEA: The title would be the case of the Vancouver Sun versus Attorney General of Canada. We have a few extra copies for anybody else that wants one. 323 MR. BETTS: Are there any other preliminary matters? Mr. Shepherd would you please proceed with your submission. 324 SUBMISSIONS ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: 325 SUBMISSIONS BY MR. SHEPHERD: 326 MR. SHEPHERD: Thank you, Mr. Chairman, my submissions are limited to the two documents, School Energy No. 1 and School Energy No. 155. With respect to the tax returns, the other category of documents, we have no comments except to say that we didn't see anything that looked really nerve racking in those, but that's for Mr. Cass to deal with, I think. 327 With respect to School Energy No. 1 and 155, this was an inquiry that we embarked upon to gather tax-planning information to assist the Board in dealing with the deferred taxes case. This started prior to interrogatories with an exchange of correspondence with the company in which we asked for these categories of information and there followed some meetings and then School's Interrogatory No. 1 and a relatively unsatisfactory answer to that, followed by many, many more meetings, which I'm not going to talk about the details of, to discuss what should be provided in the context of issues of materiality, confidentiality, and relevance. 328 The end result of that process was -- well, no, we then asked Interrogatory 155, asking more specifically for the information we needed. The end result of that was that the company came up with what we think was an innovative solution to this problem of disclosure in this case, and they said, We'll put all of our tax-planning information in a room, go look at it and tell us what you want, and they did that. And they filled the board room full of more tax-planning information that any of us would want to see. And I spent two days going through it, document by document, identifying the documents that I wanted them to file in response to 155 and identifying, in the case of many of the documents, information that I wanted them to file but where I didn't need the document. The document was 10 pages and there was one paragraph that mattered. 329 In the end, they produced the response to School Energy 155, which I think the Board will agree is a pretty unusual interrogatory response. It is longer and more detailed, it contains more information, and frankly, contains more admissions than we normally see in interrogatories. They basically told the Board the story of Rentco in detail, with the numbers, with what they planted to do and why they did it, and that replaced a mountain of documents I would venture to say a foot thick that they would otherwise have had to file to tell you that same story. 330 In the context of -- and as you can imagine, we hotly negotiated the wording of the response to our interrogatory. In the context of that, we said to the company, We will respect your wish for confidentiality of whatever part of this you're filing that you wish to remain confidential. We didn't do that because of any legal constraints. We did that because we thought that was a fair balance, given that they were being very open about giving us the -- giving the Board all the information the Board needed for this issue. We felt that it was a fair balance to say whether or not you're being pollyanna about this or whether, in fact, you have a legitimate claim for confidentiality, we'll respect your wish to keep these things confidential if you want. 331 As a result, our position on this motion is we've already's agreed with the company that with respect to those two interrogatory responses, responses to our interrogatories, that whatever they have claimed confidential should remain confidential. I hasten to add, we did not make this agreement on behalf of anybody else, only on behalf of School Energy Coalition and the company was under no illusions that we were binding anybody else, nor are we making any content in these submissions on the legal issue of what should be confidential and what should not be confidential. 332 Our submissions here are more to assist the Board -- let me put this a different way. On an issue like this, the Board can decide the legal point, what should be confidential, what does the -- what information or what documents can the company require should be confidential, that's a legal issue; or, and perhaps and, it may not be one or the other but both, or the Board can decide the regulatory issue, what is the proper balance here? And we are speaking only to the second of those points in saying with respect to School Energy No. 1 and No. 155, we believe to the extent of the disclosure and the clarity of the disclosure that will assist the Board on this issue is, in part, a result of the fact that we agreed to confidentiality and while does that not bind the Board, we think it would be reasonable for the Board to consider that factor in weighing that balance. 333 Those are our submissions. 334 MR. BETTS: Thank you, Mr. Shepherd. The Board Panel has no questions, Mr. Shepherd. Thank you. 335 Am I correct in saying that is all of the submissions except for those from Mr. Cass at this point? 336 Just before I go to Mr. Cass, are there any comments that Board Counsel would like to provide, too? 337 MS. LEA: No, thank you, sir. I think we'd prefer to obviously not take a position on this issue, and I think the matters are thoroughly canvassed by the parties and will be by Mr. Cass. 338 MR. BETTS: Thank you. Mr. Sommerville does have a question for you, Mr. Shepherd. 339 MR. SOMMERVILLE: Mr. Shepherd, I can appreciate and do appreciate the circumstance that you have outlined where the company has forthrightly given you an opportunity as counsel for an intervenor to survey a range of materials in a particular setting to enable you to prepare yourself and your client for this proceeding. I guess my question -- the question that's in the back of my mind, and Mr. Cass may want to address this to some extent in his remarks, too, is the extent to which that bilateral arrangement ought to influence or govern the public access, the parties outside of the intervenor group, parties who aren't represented particularly at this hearing who are ratepayers, for example, and may have an interest in that material. How do we balance those interests? 340 MR. SHEPHERD: And I should have been clearer, I suppose. The essence of the legal argument on confidentiality is about public processes. It's about how a process like this should be governed and it's -- it is, in essence, itself a balance; it's a legal balance but it's a balance. 341 In this particular case, the company went out of their way to find a creative solution to a difficult disclosure problem. The alternative would have been we would have been here for several days arguing about a mound of information and some of it you may not have ever seen in the end. It is -- and I guess the point I'm making is that it may be a consideration for this Board to say, We should encourage that kind of creative solution -- we should encourage parties finding resolutions to problems rather than just fighting about them. And that's what the company did in this case and I think the process is better for it in this case. 342 MR. SOMMERVILLE: Thank you. 343 MR. BETTS: Thank you. Those are all the Board Panel questions. 344 Mr. Cass, are you ready to proceed? 345 SUBMISSIONS BY MR. CASS: 346 MR. CASS: Thank you, Mr. Chair. 347 I did say earlier that I had an item to pass around. I'm sorry, in the scramble to catch up with all the arguments I've heard in the meantime, I did neglect to pass this around, so perhaps before I start on my argument and then forget about it again, it would be convenient now to do that. Again, I've provided it to Mr. Thompson but not actually to anyone else. 348 I won't be actually getting to this until a little later in my argument, but for the purposes of the record, what I have handed out is an excerpt from a book entitled "Administration of Income Tax," by an author named Colin Campbell. I've included the title page and the copyright page of the book to give the extract some context, and then the actual pages that I believe to be of some relevance to my argument are included as well, pages 26 to 36. 349 MR. BETTS: I think for ease of reference we will ask for an exhibit number for this document. 350 MS. LEA: K.7.10, extracts from the Administration of Income Tax. 351 EXHIBIT NO. K.7.10: EXTRACTS FROM A BOOK ENTITLED "ADMINISTRATION OF INCOME TAX" 352 MR. BETTS: Thank you. 353 You may proceed, Mr. Cass. 354 MR. CASS: Thank you, sir. 355 Before I get into really the core of my argument, I will, with the Board's indulgence, start by trying to respond to some of the points made by others who have preceded me. 356 First, Mr. Thompson made quite a lengthy submission that I think he put in the category of some history of the deferred taxes issue. Most importantly, I think I need to state at this point that the company does not in any way agree with Mr. Thompson's characterization of the history of this issue. However, it seemed to me that this was largely a preemptive strike on final argument with respect to the merits of the issue. For that reason, I don't think I need to take the Board's time in going through Mr. Thompson's history and indicating the points of disagreement. In my submission, it had much more to do with the merits of the deferred taxes issue than any issues that are before the Board today and, in fact, has little or no connection with anything to do with confidentiality. 357 Having said that, just a couple of points that I will make about Mr. Thompson's history before I move on to something more relevant to confidentiality. 358 First of all, as I understood what Mr. Thompson was doing, he was trying to narrow in the -- to the narrowest possible issue what was actually determined in what's been loosely called the 135 decision. That is the decision of this Board that appears at tab 6 of Exhibit K -- I'm sorry, tab 9 of Exhibit K.7.2. 359 Mr. Thompson spent a considerable amount of time, as far as I could tell, in attempting to persuade the Board that what was addressed in this decision was really just quite a narrow issue. I'm not going to get into all the points of disagreement with Mr. Thompson's characterization of the decision. I would suggest to the Board that all that you would need to do is look at IGUA's argument that preceded that decision. It is at tab 6 of Exhibit K.7.2. It's quite a lengthy argument and, in my submission, it covers a broad range of issues far beyond the narrow context in which Mr. Thompson attempted to place the Board's decision in RP-2002-0135. Again, I don't think that this is the place to argue these points or the merits of the issues, but I think the Board can very quickly see from the argument that preceded the decision that the issues are far broader than Mr. Thompson attempted to suggest. 360 Now, another thing that Mr. Thompson seemed to be trying to imply in his submissions is that there is something unusual about the evidence in this case on the issue of taxes payable as opposed to taxes paid. Now, this goes directly to what the Board said in the decision I've just referred to, in RP-2002-0135, and Mr. Thompson almost read to the Board the words of the paragraph in which this comes up, but he just carefully avoided the particular words that are relevant to taxes payable. 361 So again, it's at tab 9 of Exhibit K.7.2, the second last page at tab 9, and it's the Board's ultimate finding in this decision. 362 "The Board finds and orders that EGDI is entitled to recover from the notional utility account an amount, after taxes, equal to the deferred taxes that became payable between ..." two dates. 363 So again, I think this is getting very much into the merits of the argument and I don't wish to go there. But I did want to at least deal with those two points that have been left on the record, in the context of this motion, by Mr. Thompson. 364 Now, one of the submissions I will be coming to later, in greater detail, is that what the company and its affiliates have done in this case is provide information that they do not consider to be relevant in order to assist the process. And in doing so, they've requested a limited amount of confidentiality and I stress the word limited. 365 There is much on the record now that the company and its affiliates do not consider to be relevant, and I will be coming to this in greater detail, but it's been provided because intervenors want to go in certain directions and the company did not want to prevent them from trying that if they saw fit to do so. However, the company's position is that these are not relevant directions to proceed in. 366 Well, where this fits into my argument at this point, is that now we have heard Mr. Thompson's review of the history, this, if anything, supports the company's point that these are not relevant areas of inquiry. Mr. Thompson's review of the history, if anything, made it clear that what IGUA is seeking to do in this case is re-argue points that have already been decided in previous decisions of this Board. So again, I will come to this later and I'm going to address it in greater detail and I'm not in any way making a relevance argument today. The company is going to reserve its points about the relevance of these areas of inquiry to final argument. The reason for that is to allow the intervenors to pursue areas of inquiry that they think are appropriate; however, in doing this, the company did request a limited amount of confidentiality and in the submissions we've heard from Mr. Thompson today about the history of this matter, it, if anything, reinforces the company's concern that the Board is going to be asked to go into areas that have already been decided and are irrelevant. 367 Next, I wanted to deal quickly with the first point made by Mr. Dingwall in his argument. Mr. Dingwall made a submission to the effect that the convenience of corporate structuring, and by this, I took him to be referring to the role of affiliates of the company, should not affect what would be the Board's disclosure expectations for a regulated utility. 368 What I want to make clear for the Board here is that the role of affiliates in this particular situation is, in my submission, not one that could be fairly characterized as one for the convenience of Enbridge. This requires me to look at a little bit of history, I won't be long on this, and invite the Board to remember what the 179-14/15 case was all about. The decision in this case can be found at Exhibit K.7.3. I just have to get for you the tab number, I'm sorry, I'm scrambling a little bit to pull together these references. 2(a) Mr. Thompson tells me. 369 Now, in this case, what the company was proposing was to wind down the rental program within the utility, so at tab 2(a) page 43, in the upper right-hand corner, the Board will see that proposal that company wished to retain the rental program within the core utility and wind it down. 370 Without going into any great detail, the Board essentially said no to that proposal. The Board did not consider it appropriate for the company to wind the rental program down within the core utility. Having reached that decision, it is certainly true that the Board left the company with options about what to do with the rental program and it is true that the Board left the decision up to the company. But the Board certainly put this in a very specific context and that can be found in paragraph 3.2.5 which is page 46. I only need to refer this Panel to the first sentence of paragraph 3.2.5. That sentence states: 371 "The Board's finding with respect to the retention of the rental program in the core utility is supported by its view of current regulatory policy which encourages the development of a 'pure utility' stripped of non-monopoly services." 372 So the Board very clearly stated here its view about where the rental program should be in relation to the utility and in relation to its view of regulatory policy about a pure utility. So I think it is a little unfair for Mr. Dingwall to suggest that the role of affiliates in this case in relation to the rental program that was unbundled from the utility was somehow a matter of corporate convenience for Enbridge. 373 Mr. Chair, at this point, then, I would like to move on and deal with some of the authorities that have been provided to you in the arguments that went ahead of me. I will try to do this quickly. And in doing so, I will start with Exhibit K.7.5. 374 MR. BETTS: Thank you. 375 MR. CASS: The pages at the top of K.7.5 include section 9 of the Statutory Powers Procedure Act which Mr. Thompson has already referred to. In this particular case, I think it is paragraph B of subsection 1 of section 9 that is applicable. The wording of paragraph B refers, among other things, to: 376 "... Intimate financial matters ..." that "... may be disclosed at a hearing ..." 377 As I will address later in my submission, tax matters are certainly intimate financial matters. The section refers to the "... desirability of avoiding disclosure thereof in the interests of any person affected or the public interest ..." 378 So I point out to the Board that it's a disjunctive test, it can be one or the other, the public interest or the interests of any person affected. In this case, the persons affected, so to speak, are Enbridge Services Inc., a company with a number of businesses other than the rental program that is the subject of the deferred taxes issue, the persons affected include the numbered company, and also include Enbridge Inc. because the evidence, the confidential evidence that's being discussed here includes corporate tax planning of Enbridge Inc. 379 Now, the interests of any person affected or the public interest can outweigh the desirability of adhering to a principle of openness, and in my submission, that is the situation in this case. 380 Now, I've only been able to very quickly look at the authorities attached behind section 9 of the Statutory Powers Procedure Act in Exhibit K.7.5. I do apologize to Mr. Thompson and the Board if I mischaracterize anything, but I will do my best to make my submission having done a quick review of this. 381 First, there are a number of references -- there are a number of court cases, cases involving court proceedings as opposed to administrative law proceedings. There is also a reference to the Courts of Justice Act applicable to court proceedings. 382 My submission to the Board here is that court proceedings stand on a very different footing from this case and from, indeed, any administrative law proceeding. There are different procedures in court. I'm sorry, I don't have it here with me but just by way of example, on examinations for discovery in a court proceeding there is something called the deemed undertaking that prevents parties from using information that they obtain on examination for discovery in a court proceeding for unrelated purposes. That's not something that the Board has. It's an example of the different procedures that apply in a court proceeding. 383 Another example of the difference is section 9 of the Statutory Powers Procedure Act itself. As far as I'm aware, there is nothing like section 9 in relation to court proceedings that have this test wherein the interests of a person affected in relation to intimate financial information may outweigh the openness of a hearing. 384 Another difference is the Board's confidentiality guidelines themselves. There is no such thing that I'm aware of in relation to a court proceeding. 385 I'm sorry, I probably should have had with me a set of the confidentiality guidelines to hand out. I don't know whether the Board Panel Members would have them. But given the differences I'm attempting to highlight between a court proceeding and a proceeding before this Board, I did want to make a few references to the guidelines. There won't be a lot so I can probably just read some of the references from the guidelines. 386 The guidelines contain a section, 1.2, entitled, "Background." Paragraph 1.2.1 of that background indicates that: 387 "The Ontario Energy Board Act 1998, encompasses a greater number of regulated parties, appeals to a broader group of stakeholders, and involves a number of new and/or augmented processes which has resulted in changes in both the type and amount of information required by the Board." 388 This is the background to the Board's confidentiality guidelines which, in my submission, have nothing to do with a court proceeding. 389 1.2.2 goes on to state that: 390 "The Board recognizes that the need for confidentiality might be different between competitive and monopoly businesses and will consider this distinction when making confidentiality decisions." 391 Well, the information in this case, Mr. Chair, is not information from the regulated utility, it is from unregulated affiliates. 392 Paragraph 1.2.3 states: 393 "The general proposition is that the Board generally places information it receives in the course of proceedings on the public record. However, a filer may consider some of the information sensitive and may request that a particular information item be treated as confidential. The Board recognizes that disclosing confidential information might harm the filer or others under certain conditions and that maintaining confidentiality may be necessary." 394 That's all something that's quite different from a court proceeding and is in no way addressed in the decisions dealing with court proceedings that have been brought to you today. 395 If I might digress at this point just to deal with a decision brought to you by Ms. Street, or indeed the headnote I think is all that we have. Again, I've only just been able to read this as Mr. Shepherd was making his submissions. But even looking at the headnote, one can readily see how different this case is from the case before the Board. It's apparent this case was not considering Section 9 of the Statutory Powers Procedure Act or confidentiality guidelines of an administrative tribunal or anything like that. 396 Looking at the second page of what was provided by Ms. Street, there is a reference to the majority decision and it starts by saying -- really, in my submission, setting out what the issue was here, and it says: 397 "Section 83.28 of the Criminal Code must be interpreted consistently with the preamble to the Anti-Terrorism Act and the fundamental characteristics of a judicial process, including the open-court principle." 398 So what was being addressed here was a section Criminal Code, it was not an administrative law proceeding or guideline at all, and the preamble to the Anti-Terrorism Act. 399 Now, further down on what is the third page of this item that's been provided by Ms. Street, one can find, really, the reason for the majority's termination in this case. It is stated: 400 "In a case in which so much of the information relating to the offence is already in the public domain and in which recourse to an investigative hearing is sought in the midst of an ongoing non-jury trial, the case for extensive secrecy is a difficult one to make and was not made out here." 401 Again, Mr. Chair, it bears no resemblance whatsoever to the proceeding before you. The case you're dealing with has nothing to do with recourse to an investigative hearing in the midst of an ongoing non-jury trial. 402 Among the cases in Exhibit K.7.5 from Mr. Thompson, I did see one that appeared to involve an administrative proceeding. As I understand this case, the request that was being made was that the entire hearing be held in-camera. This, in my submission, is quite different from the request that is before the Board in this proceeding from the company. The company is not requesting an entire hearing be held in-camera; the company is not even requesting that an entire issue be heard in-camera. 403 I don't know whether the Board has had any opportunity to gather together the non-confidential information on deferred taxes that has been provided in this proceeding, but suffice to say it's an extensive record of non-confidential information. There is considerable amount of detail on the company's claim and also on the intervenors' issues that can be found in the non-confidential record. This is almost a polar extreme from a situation of somebody asking that an entire hearing be held in-camera. 404 I will come later in my submissions to addressing, in a more detailed fashion, what is on the non-public record and where the Board can find on the non-public record the information needed for its determination in this case -- I'm sorry, what is on the public record and where the Board can find on the public record what is needed for its decision in this case. 405 That, at long last, Mr. Chair, brings me to the core of the submissions that I had intended to make to the Board about the confidentiality issues. 406 The starting point for my submissions, Mr. Chair, is that tax filings and related information are, by their very nature, confidential documents. 407 The second proposition that I start with is that in the regulatory context, this confidentiality should be protected -- in the regulatory context, this confidentiality should be protected especially when it involves unregulated companies. 408 Now, it's at this point that I would like to refer to the document that I passed up and that I think was marked K.7.10. I hasten to add, before I get into a discussion of this excerpt from the book by Mr. Campbell, that I don't purport to be a tax expert. Also, I don't want anyone to think that I'm overstating my reliance on what is said in this book. So after I've gone to the excerpts in the book, I will make some further submissions just to be sure that there's no confusion as to any effort on my part to overstate what is addressed in this book. 409 However, before I come to it, really the main reason for providing this to the Board is in support of my starting proposition, which is that tax filings and related information are, by their very nature, confidential. 410 So looking at what is written by this author, I would ask the Board to turn to page 26, under the heading "Disclosure of Information." And if I may, I will read some of the words from there. The text of the book starts out on this subject by saying: 411 "The Canadian income tax system is one of self-assessment requiring all taxpayers voluntarily to disclose their income annually. It is important to the effectiveness of this system that information disclosed by taxpayers be kept confidential." 412 There's then a reference to Section 241 of the Income Tax Act, which I will come back to address, again, in the context of making sure that no one misunderstands that I'm attempting to overstate the case here. 413 There is also a reference to a decision of the Supreme Court of Canada emphasizing the importance of confidentiality in a self-assessment system. And the Board can read the words from that decision. But Justice Iacobucci starts out by, again, noting that: 414 "The taxation of income in Canada has been and is based on self-assessment in Canada. Confidentiality of taxpayer information has been an important part of our income tax collection system." 415 He then goes on to talk about Section 241. Then in the next paragraph, he says: 416 "As alluded to already, parliament recognized that to maintain the confidentiality of income tax returns and other obtained information is to encourage the voluntary tax reporting upon which our tax system is based." 417 Skipping down a sentence: 418 "By instilling confidence in taxpayers that the personal information they disclose will not be communicated in other contexts, parliament encourages voluntary disclosure of this information. The opposite is also true. If taxpayers lack this confidence they may be reluctant to disclose voluntarily all of their required information." 419 It then goes on to talk about how there's an penalty imposed on an official or other authorized person who violates the secrecy of information obtained from taxpayers. Section 241 applies to employees and former employees of the federal or provincial governments and so on. 420 Now, it's at this point that I want to ensure that there's no confusion about the argument I'm making. I'm really advancing simply a general proposition about the confidentiality of tax information. Section 241, as I understand it, and again I'm not a tax expert, it actually deals with the information in the hands of the tax officials and in that regard, it protects confidentiality where someone might actually go to a tax official and try to get information about another person's confidential tax filing. 421 So there is that difference between what we're talking about today and what section 241 addresses. However, in my submission, the underlying point is the same. If the integrity of the self-reporting system is undermined when confidentiality is breached by a tax official revealing information, the integrity of the system is undermined just as well when the confidentiality is affected in some other manner. 422 Now, the other aspect in which I wish to make sure that no one thinks I'm overstating the case here is, section 241 deals with the actual filings, as I understand it, that are received by the Canadian Revenue Agency, and that is part of the issue here. Part of the issue does concern tax returns filed with the Canada Revenue Agency although as I will address in a little more detail when we come to the specific information, it's not the entire tax returns as Mr. Thompson seemed to think. The relevant portions of the tax returns, which are quite extensive, are on the public record. It's portions of the confidential tax filings that are not relevant that the confidentiality claim has been made in respect of. I will come back to that. 423 Part of the confidentiality issue here does actually concern filings made with the Canada Revenue Agency. There is more to the confidentiality claim though. It includes tax-planning information. 424 My submission, though, is that if anything, the argument for confidentiality is stronger in the case of internal tax planning than it is for the confidentiality of what is actually filed with the Canada Revenue Agency. There's several reasons why I make that argument. 425 First, the confidentiality of the actual filed return or other items provided to the Canada Revenue Agency can hardly be protected if there is no confidentiality protection for the background material which gave rise to that filing. 426 Second, the actual filed material is prepared with the expectation that it will be seen by at least one external party, the Canada Revenue Agency, but background tax-planning information is internal material and it's not prepared with that expectation that it's going to have to be disclosed to someone else. 427 Third, in my submission, if the general confidentiality of tax information does not extend to tax planning, that only means a chill on good tax planning by any corporation who's confidentiality is at risk because the effect is that items under consideration for tax-planning purposes are at risk to somehow be publicly disclosed at some other time. 428 And finally, as stated in the letter of March 12th to the Board from Aird & Berlis on this confidentiality issue, the disclosure of tax-planning information on the public record creates a risk of inappropriate unauthorized or inaccurate use of that information. 429 If I might have a moment here, there may be a relevant digression, if I might look at my notes for a moment to see if there's anything that Mr. Thompson said in his argument. 430 Yes, Mr. Thompson says that what the company seeks to have held in confidence, and I'm sorry I didn't get a complete note of his statement, but, is tax-planning information that led to certain decisions that Mr. Thompson considers to be of relevance to the deferred taxes issue. 431 The point to be made here, though, Mr. Chair, is that if one looks at the confidential record and here I will, as with others, attempt to avoid getting into detail of what is actually there, but you will see that what is in the tax-planning information is more than just what actually happened. It's consideration of proposals and ideas and so on. I refer you, for example, to the Pricewaterhouse document that Mr. Thompson has referred to that's in the confidential record. 432 If the Board were to look at it, you will see that there are questions thrown out, ideas, proposals. In my submission, that's where the concern arises about inappropriate or unauthorized -- or at least part of where the concern arises about inappropriate, unauthorized or inaccurate use of information. There is discussion of things there that may or may not have happened. They were issues that were thought about as part of the tax planning leading up to what actually happened. 433 Now, there's one other point that I want to make clear in relation to my reliance on the excerpt from Mr. Campbell's book. And for this purpose, if I could ask the Board just to skip ahead to page 33 of Exhibit K.7.10. I'm referring to the first sentence of the second paragraph and really what this is saying as I understand it that in court cases, section 241 and the confidentiality surrounding income tax information does not override relevance. I certainly accept that that is the case and I would not want anyone to think that my submissions today are intended to say that confidentiality should override relevance. However, in my submission, that's not at all what we're talking about. Despite its concerns about the relevance of the avenues that intervenors wish to pursue, the company has allowed that to happen subject to final argument. We're not addressing a situation here where confidentiality might override relevance, we're addressing a situation where the company is submitting that confidentiality should be maintained and there is a process under the Board's guidelines for that to happen. 434 Now, Mr. Sommerville put a question to Mr. Thompson about situations in which Mr. Thompson would envisage that, in fact, some information filed in a rate proceeding might be of a private nature. And as I understood Mr. Thompson's response to that, he at least started by indicating that one could look to the guidelines for guidance in that regard. 435 Well, in fact, in my submission, if one looks to the guidelines for guidance of what is sort of private information in the context of a rate proceeding, one finds a specific reference to tax-related information as falling into that category. 436 And again, if the Board Panel members don't have copies of the guidelines I apologize for not having brought them with me, but the guidelines contain I think more than one appendix, but certainly appendix 1 entitled "Confidential record types." 437 Appendix 1 starts out by saying: 438 "This appendix lists types of records previously assessed or maintained as confidential. The list is subject to amendment from time to time." 439 The opening words of appendix 1 are very careful to indicate that the confidentiality of any particular record and any particular proceeding is the decision of the Panel, that is most certainly the case, but appendix 1 goes on to identify these confidential record types. Item number 4 in the chart which follows is tax-related information, the explanation of items gathered for the purpose of determining tax liability or collecting a tax. 440 Well, as I understood Mr. Thompson's answer, he directed Mr. Sommerville to the guidelines and, in fact, that is what the guidelines have to say. 441 Now, again, I of course fully accept that the determination in any particular case like this one is fully with the Panel of the Board. What I think that appendix 1 is doing is recognizing the general proposition that I've brought to the Board's attention through the extract from Colin Campbell's book about the confidentiality that all people understand to attach to income tax filings and information prepared for the purpose of filings. 442 At this point, I'm going to turn to another part of my submissions. I will now address what I alluded to at the outset, which is the point that the company and its affiliates in this case endeavored to accommodate information requests from intervenors on the deferred taxes issue even where the company disagreed with the relevance of the requests. The company did this to allow intervenors to pursue the issues that they thought to be relevant even though the company did not accept the relevance. 443 In doing so, the company has left until final argument whether, in fact, there is any relevance to what intervenors seek to pursue in this hearing. But in the context of doing this, a considerable amount -- I'm not sure the word "considerable" even conveys the amount of material that the company has provided that it does not believe is relevant. And so in this context, the company has put forward what I submit is a very limited request for confidentiality; not in respect of all of what it considers to be irrelevant, but only in respect of particularly sensitive portions. 444 In this regard, for example, the Board might refer to the response to School Energy Coalition Interrogatory No. 155. At page 2 of that response, in the fourth paragraph, the company provides its view of relevance, and to save the Board having to turn it up, I can just read the paragraph, 445 "In the company's view, the issue in this proceeding that arises out of the decision rendered by the Board on December 3rd, 2003, is the appropriate verification of deferred taxes that became payable between October 1, 1999 and May 7, 2002." 446 That is the extract from the 135 decision that I took the Board to at the start of my submissions. That extract from the decision is the taking-off point for what I just read to you from the response to this interrogatory. 447 The response goes on to say: 448 "Much of the following information is not relevant to the verification of deferred taxes that became payable nor to any other issue in this proceeding and is provided only to address the supplementary interrogatory raised by School Energy Coalition." 449 The response goes on with many pages of what I would describe as detailed and sensitive tax-planning information. In the context of providing that response that it did not consider to be fully relevant to this case, the company has proposed limited redactions to protect particularly sensitive items. 450 Now, there are two reasons why I suggested this point is important to the Board. 451 First, Mr. Thompson seems to be making this submission that you have to have this on the public record because it's going to go to rate-making, and I will come back to that submission more directly a little bit later. The point, though, is that that's not necessarily the case. Much of what the company has provided it considers to be irrelevant, and if the Board agrees, it may have nothing to do with rate-making at the end of this case. That's the first point. 452 The second point is that, as I've already suggested, and as I think Mr. Shepherd indicated as well, the company did this to try to assist the process. And to rule now that confidentiality need not be maintained, even on the limited basis requested by the company, will only discourage this type of approach where an applicant seeks to assist the process by providing information with limited confidentiality concerns where it disagrees with the relevance of the information. 453 This, then, Mr. Chair, brings me to some specific submissions about the particular items at issue in this confidentiality motion. First is the subject of tax returns. Board Staff Interrogatory No. 109 asked what, in the company's submission, was the appropriate question. I don't know if the Board has ready access to Board Staff Interrogatory 109, but what it requested was the actual tax returns and all relevant schedules, in particular schedule 8 and T2057. The company responded to that interrogatory on the public record. The response was that the income tax returns were provided and the relevant schedules were provided on the public record. 454 What is at issue here is the additional information included in those tax filings that is not in any way relevant to the determination that this Board has to make. 455 Now, included in the filing at Board Staff Interrogatory 109 were schedules 1 and 8 from the tax return. Schedule 1 is the reconciliation of book income to taxable income and schedule 8 shows the determination of capital cost allowance. This information is what would be relevant to the deferred tax calculation. And in that connection, depreciation amounts and CCA amounts, tax rates, and so on are clearly shown. 456 So what the Board needs is on the public record. The confidentiality issue is in relation to extraneous items that are not part of what the Board needs. 457 Now, the next category of documents are those in Ms. Persad -- in the attachment to Ms. Persad's letter of April 26, 2004, were referred to as being attached to a March 12th letter from Enbridge to the Board. These are the tax-planning documents, including advice from Pricewaterhouse Coopers on tax-planning issues that I've already referred to. I've already provided submissions about a number of reasons why tax-planning information of this nature should be maintained in confidence. 458 In addition to that, it's important to bear in mind that there, again, is information on a non-confidential information filed on the record that it is relevant to these issues. So in response to School Energy Coalition Interrogatory No. 121, evidence has been provided to explain the impact that the transfer of assets of interest to Mr. Thompson had on the CCA claim, and how it compared to what would have happened if the assets had been left in the utility. The relevant tax return schedules and elections dealing with the transfer have been filed on the public record in response to Board Staff Interrogatory 109. And in the unredacted portions of response to Interrogatory No. 155, the Board will also see information that is non-confidential that is relevant to this issue that seems to be of interest to Mr. Thompson. 459 The next category of items in issue are, indeed, the redactions from the response to School Energy Coalition Interrogatory No. 155. The redaction of -- one area of redaction was, again, the tax-planning information relating to the asset transfer, and I think I've alluded to that twice now so I won't repeat myself and allude to that tax-planning information a third time. 460 Another area of redaction relates to overall tax planning or tax balancing that is done by the -- not being a tax expert, I'm sorry if I don't state things as accurately as they should be, but I would say by the Enbridge family of companies, the overall tax planning and tax balancing approaches. 461 A third area of redaction relates to the sale of the businesses to Centrica that address whether the sale might proceed as an asset sale or as a share sale. 462 Now, just coming back to the information about Enbridge's overall tax planning. In our submission, it's not relevant but, again, we're not attempting to prevent people from pursuing it now on a confidential basis. Further, the information providing the impact on the numbered company which is what we submit is relevant, has been provided in the summary schedules to tab 5, schedule 2, appendix 4. 463 In relation to the discussion of a share sale as opposed to an asset sale, our submissions are threefold. First, in our submission, this has nothing to do with the calculation of deferred taxes for the period at issue in this case. 464 Second, it's sensitive in its disclosure of Enbridge's planning about a business that is not regulated. 465 And third, it includes comments that are sensitive because they are of the type that was never expected to be found in a public domain. 466 Now, Mr. Thompson also referred to the redaction of material relating to a meeting of the board of directors of Enbridge Inc. The company submits that senior management discussions and board of director material at the level of Enbridge Inc., which of course is an unregulated company, concerning board of director decisions about an unregulated business should be considered confidential. 467 Again, the underlying point here is that there is a considerable amount of information on the public record, the non-confidential record that the company has provided for its affiliates notwithstanding concerns about relevance to permit intervenors to pursue the avenues of inquiry Mr. Thompson is referring to. 468 Mr. Thompson, as I understood his submission, appeared to be saying that this information should be placed on the public record because it is relevant to amounts that the company claims should be recovered in rates. Well, in my submission, if that were the test to confidentiality, there would be no confidentiality in rate cases. Essentially, all information in rate cases, however directly or indirectly, should have some relevance to amounts that the company seeks to recover in rates. If the test for confidentiality is that there can be no confidentiality in respect of those types of matters, that, essentially, means that the Board's rule on confidentiality, which I think is Rule 10 of the Board's guidelines on confidentiality, and indeed, section 9 of the Statutory Powers Procedure Act are meaningless in the context of a rates case. 469 And then I think the remaining point I heard in submissions of Mr. Thompson and perhaps also alluded to in Mr. Janigan's issue is some sort of implication that this shouldn't really matter because the information is not prospective. Well, Mr. Chair, I won't repeat all of the submissions I've already made about the confidentiality of tax information, but again, speaking as a non-expert, and speaking generally, I think that tax information tends to be historic. I'm not aware of anybody who files tax returns on a prospective basis. There may be cases and the fact that I'm not aware of them doesn't say very much because I'm not an expert. However, I would hazard to say that a considerable amount of the tax filing that goes on is historic and so I don't think that a response to the confidentiality concerns that arise in relation to tax information is to say, well, it's historic. 470 I also point out, again, that the documents, the tax-planning documents that are of concern from a confidentiality point of view discuss Enbridge corporate tax-planning techniques. There is no evidence on the record and no basis for Mr. Thompson to be able to persuade the Board that those techniques are merely historic in their application or use. 471 Those are my submissions, Mr. Chair. Thank you. 472 MR. BETTS: Thank you, Mr. Cass. The Board Panel will just confer for a moment. 473 [The Board confers] 474 MR. BETTS: Thank you, Mr. Cass. The Board Panel does have a few questions for you. 475 Mr. Sommerville. 476 MR. SOMMERVILLE: Actually, Mr. Chairman, having indicated I had a question, I'm withdrawing it before I ask it. 477 MR. BETTS: That's great when you can answer your own question. 478 I do have a few for you. The first, I guess, is perhaps a key one for me, and that is to ask you to address the actual harm that may be faced by the company and its affiliates if this information is placed on the public record. Can you help me with that? 479 MR. CASS: Yes, Mr. Chair, that's what I had been attempting to address when I gave the four points as to why, in my submission, tax-planning information, should, if anything -- the confidentiality protection for tax-planning information should, if anything, be stronger than for the actual tax filings. If I can just try to remember the points ... 480 MR. BETTS: Take your time if you want to refer to your notes. It's an important answer to me. 481 MR. CASS: I don't have these in the order I originally presented them, but one is in relation to the chill that then becomes associated with tax planning if, in fact, the decision of this Board is that the usual understanding of the confidentiality of that type of information is not to be observed even on the limited basis that has been requested in this case. 482 Another point, again, is that tax-planning information is, by its nature, internal documentation that is not prepared with the expectation that it's going to be seen or reviewed by other parties. The Board, of course, has been able to see it on a non-confidential basis in this case. It is, again, of concern to the company and its affiliates that for that type of internal planning and consideration of questions, proposals that may or may not have been followed, should not be on the public record. It is not of use to look at what actually happened. There is a risk created of improper use of that information or of somebody misinterpreting it or attempting to apply it in the wrong way because it is tax-planning information about proposals and questions that were addressed leading up to what was actually done. 483 In my submission, there is a real reason for concern about misuse of that, misinterpreting what it actually is or what it actually says. I could go on, but I think that's really the key point. 484 MR. BETTS: Maybe I can help you by asking some more specific questions about that. The reference to the chill, and I read it with the information that you provided and that was very helpful, but it seems to imply to me that the concerns of Revenue Canada, I think it was that party, might be that by disclosing tax information on a regular basis, that people will withhold that information. I don't think that you're suggesting that the corporations involved here would ever resort to that; am I correct? 485 MR. CASS: Absolutely not, sir. That's not the suggestion at all. The chill is more in the sense that tax planning becomes something that is reviewed in a fish bowl, so to speak. And by that I'm not referring to the tax authorities, I'm referring to anybody who has the access to the public record of the Board. I believe that there is wide-open access to the public record of the Board by anybody who cares to come and ask a question. So any person with any amount of curiosity about Enbridge Inc. tax planning would have information -- would have access to this information, would have the ability to look at it and potentially misuse it and misinterpret it. And I'm not referring to the Canada Revenue Agency, I'm referring to anybody, and I think that means everybody who has access to the Board's record, public record. 486 MR. BETTS: I'm probably well short of what I need in terms of financial knowledge to tell this, but I'm having trouble understanding how that would generate harm to the corporation, for their tax information to be -- their tax planning to be known. 487 MR. CASS: Well, can I -- will you forgive me if I use a simple analogy. I would think of my own tax return or your tax return, Mr. Chair. If someone were to suggest that that is relevant to a proceeding and it should go on the public record, and not only is that relevant, but all the thinking process you went through consultations with your accountant, the professional advice you sought before filing that tax return - that's going to go on public record. And anybody who might have an interest, a curiosity interest, in your affairs, or my affairs in the case of my situation, can come to the public record of the Board, look at that information. 488 There's no limit that I'm aware of within the Board's procedures, like the deemed undertaking on examination for discovery in court proceedings, as to what someone could do with that, whether it's a business rival, whether it's somebody else in the competitive market, whether it's just somebody that has an axe to grind with you or me. 489 I hope I'm making the point clear with this analogy, sir. It has nothing to do with the Canadian Revenue Agency, it's with this information being on the public record for anybody who wants to look at it to come and do that. 490 In my submission, I would be concerned if that was my tax information, and particularly all the planning that goes into my tax filing, I think that any taxpayer would have that concern. 491 MR. BETTS: Mr. Cass, there's tax documents filed on the public record in 109; am I correct? And how are these different? 492 MR. CASS: Again, Mr. Chair, what the company has attempted to do is get onto the public record as much as it can, and that was the purpose of the redactions; to get off the most sensitive items and to have on the public record as much as possible. The company accepted that Board Staff Interrogatory No. 109 was a request for the relevant information and what the Board really needs, and it was put onto the public record. 493 If I can -- sorry, sir, if I can also come back to your issue about prejudice and my analogy to any of us having our tax returns placed on the public record. 494 The additional factor that we have in the situation of a company like Enbridge Inc. that would not apply to you or me is that this is a publicly traded company and people are making investment decisions and people are reporting and distributing information about this company that affects investment decisions. 495 I just use the Internet as an example of the sources -- of what's available now for any member of the public who gets confidential information about a publicly traded company and wants to disseminate it to the world. 496 MR. BETTS: Thank you. I think I have one or two more, but let me just see here. No, that's all of my questions. Thank you very much, Mr. Cass. 497 MR. CASS: Sorry if I got a little carried away there. 498 MR. BETTS: No, no, that's fine. I was looking for your answer to my questions and you provided that. That's fine. 499 Mr. Thompson, reply? 500 REPLY SUBMISSIONS BY MR. THOMPSON: 501 MR. THOMPSON: Yes. I'll try and be brief, Mr. Chairman. 502 Dealing firstly with Mr. Shepherd's partial support for the company. Mr. Shepherd said, as I noted it, he negotiated the response to -- the company's response to Interrogatory No. 155. I assume that the information contained in the company's response is accurate and is not some compromise with respect to the facts. I think when he said that, what he meant was the scope of it was negotiated, not the content. 503 Mr. Shepherd indicated that he agreed to support the company's claim to keep confidential the information that they are seeking to keep confidential with respect to Schools' interrogatories without regard to the law, as I understood him, and my submission is that the details of Mr. Shepherd's side agreement with the company which were only disclosed this morning are really irrelevant to a consideration of whether the claims for confidentiality that the company makes should be sustained. 504 Moving to Mr. Cass's submissions. Mr. Cass made a lot of comments about relevance, but at the end of the day, he said more than once that the company agrees that relevance is for final argument, which is a practical approach and I applaud the company for that, because disputes with respect to relevance can take time. But the upshot of that agreement is that the question for the Board's determination now is whether confidentiality trumps the openness principle, and that is the ambit of it, in my submission, on this motion. 505 In assessing that, I think you should remember that there is going to be cross-examination of the information for which confidence is claimed, whether it's particularly sensitive or not sensitive, and the impact -- and whether it's maintained in confidence or not maintained in confidence, and the impact of that cross-examination will not be known, the impact of some of these facts will not be known, its impact on you will not be known until you render your decision. 506 Mr. Cass was, in effect, pointing to that, as I understood him, to support an argument that's one of the reasons why you should keep this confidential. I would suggest the opposite conclusion follows. That's a reason not to keep it confidential, because if you rely on something that comes out in the confidential or in-camera phase of the proceedings, you really can't order that the information subsequently be placed on the public record. 507 I suggest to you at the end of the day, because of the very peculiar nature of this claim which depends not on costs that EGD incurred but costs that unregulated affiliates incurred, you have to ask yourself whether all of the information pertaining to this claim of 37 million that EGD makes to, in effect, flow those costs through to EI, whether all of that information should or should not be on the public record. And I suggest to you that if you look at it from that perspective, ratepayers saying, Why on earth was I ordered to pay anything here, and they find out some of the stuff has gone on in-camera, that reflects poorly on the integrity of the process, in my respectful submission. 508 This is a unique case. I'm not suggesting that tax-planning documents would be treated non-confidentially in each and every case before the Board, but tax-planning documents with respect to this particular case are of relevance because they relate to the actual taxes that were ultimately incurred by these unregulated affiliates for which the company is seeking recovery against ratepayers. 509 Mr. Cass relied on the Income Tax Act and the general proposition that tax stuff is always treated in confidence. There are really many exceptions to that very broad, general principle and I can give you a couple. When a separated spouse sues for support and taxes are an issue, tax returns are required to be filed. Similarly, if someone makes a claim for loss of earnings in a personal injury case, tax returns form part of the evidentiary fabric. So where the taxes are a fundamental component of the costs being claimed, and in this case they are, and it's the tax costs of affiliates, the general rule with respect to the confidentiality of tax information does not apply, in my respectful submission. 510 Mr. Cass criticized my walk down memory lane as a preemptive strike and then he went on to give his own preemptive strike about taxes payable versus taxes paid. I agree with him. There will be an argument at the end of the day about the scope of what was decided in 135 and what wasn't decided, but from the perspective of my client, I wanted you to appreciate that there is a narrow scope perspective. Mr. Cass will be presenting a broader scope perspective when he argues on behalf of the company. 511 The points that were made about tax chill and internal documentation not seen or reviewed by other parties, they may have some bearing in a case where the tax-planning documentation is relevantly, if you will, distant from the matters in issue. For example, I don't think it would be fair to require production of Enbridge Inc.'s tax planning for the corporate entity as a whole in every rate case for Enbridge Gas Distribution. And that's the -- that's what Mr. Cass seemed to be implying in his submissions that, as I understood him, he's saying, If you treat this stuff as on the record in this particular case, then we're going to be faced with having to produce it on the record in every case, and I submit that that is not so. This is a very unique case that is being put forward dealing with costs incurred by former unregulated affiliates. 512 I think anything further that I might say would simply be repeating what I said in chief and therefore, those are my reply submissions. 513 MR. BETTS: Thank you. 514 [The Board confers] 515 MR. BETTS: Perhaps just one question, Mr. Thompson. 516 As we look through the documents, and I'll use as an example, a full tax return, is it absolutely necessary that every item, every page of that full tax return be on the public record? 517 MR. THOMPSON: For my purposes, no, but I haven't gone through and identified every page that might need to be on the record. The way I come at it is, the onus is on the company to demonstrate what should be excised from my any document. Relevance is not an issue, we're only dealing now with openness versus confidentiality and so I put my position on the basis the whole document should be there. I haven't gone through the segmentation that you've suggested. 518 MR. BETTS: You did make the case, I think I could restate it for you and correct me if I am wrong, that it's particularly critical in this case to have the income tax information because costs are being requested from ratepayers with respect to a specific issue. That doesn't imply that the information is, perhaps, necessary on where it doesn't apply to this issue; am I correct in saying that? 519 MR. THOMPSON: That's correct. I treat this as a one-off situation and it's these two utilities, the numbered company, and ESI, and it's really Enbridge that's driving this claim, Enbridge Inc. through these two utilities. It's a historic claim and it's very much a unique situation. 520 MR. BETTS: Thank you, Mr. Thompson. 521 MR. THOMPSON: Thank you, sir. 522 MR. BETTS: And Ms. Lea, has anything come to your mind that would assist the Board, appreciating that the Board Staff would not be taking a position on this? 523 MS. LEA: Pardon me, sir, there was something that I just wanted to get some ... 524 MR. BETTS: Yes, please take your time. 525 MS. LEA: No, sir, we're content with the record as it stands. Thank you. 526 MR. BETTS: Very well. The Board Panel will break at this time. It is our hope that we can deliver an oral decision on this matter sometime today. It's our hope. That doesn't mean that we will be able to, but that will be our objective. We will be, after taking a short break ourselves, for some food, we will get into deliberations of the matter. 527 If we are successful, we will be reconvening later today to deliver an oral decision. 528 If we're unable to accomplish that, we will simply be delivering the decision as soon as possible which could likely be on Monday morning, but we appreciate that you will benefit with this decision as you plan the proceeding going forward. So we will do our best to deliver it as quickly as possible. 529 What I would suggest, if any parties want to be present to actually hear us deliver the decision, that you leave a contact number with Mr. Schuch or Ms. Lea so that we could contact you with perhaps a half an hour's advanced notice and then you would have the option of attending if that was your choice. 530 Are there any questions? 531 MR. THOMPSON: Mr. Chairman, my plan is to return to Ottawa, but I'll leave my number with Ms. Lea so we can hook up by high tech to hear anything. So we'll be attending if you reconvene, but electronically rather than physically, if that's acceptable. 532 MR. BETTS: That's fine. And obviously it will be captured in the transcripts and there may be a way of getting you a portion of that as early as possible if you're unable to attend. I'll leave that between yourselves and Staff to coordinate that. 533 So we will recess at this point and we will -- maybe I could do this much for you -- no, I won't do any more than I have. We'll let you know by telephone how we're doing. Thank you very much, and we'll reconvene when the opportunity arises. 534 --- Luncheon recess taken at 1:12 p.m. 535 --- On resuming at 4:32 p.m. 536 DECISION ON CONFIDENTIALITY OF DEFERRED TAXES DOCUMENTS: 537 MR. BETTS: Thank you, everybody. Please be seated. 538 The Board is reconvening to issue its oral decision with respect to requests for removal of the classification of confidentiality associated with certain materials. 539 The following is the Board's decision: 540 The company has made a claim for confidentiality for certain materials related to Issue 12.1, deferred taxes. Some intervenors object to the claim for confidentiality, and have argued that the general principle that proceedings before the Board should be transparent and open to the public requires that the materials be available on the public record. IGUA and other intervenors have argued that the need for transparency is especially important where the material is directly relevant to setting rates for a regulated monopoly. The intervenors argue that this evidence is indispensable to the consideration of the issues, and that unless the most compelling reasons can be advanced by the company in support of its claim for confidentiality, an overarching public interest in disclosure should prevail. 541 The Board does not have any arguments before it as to whether the material for which confidentiality is claimed is relevant to Issue 12.1. The company elected not to object to the inclusion of the material on the record on the basis of relevance. Therefore, the Board must assume in deciding the question of whether the documents will be included on the record that they are relevant. 542 The central question for the Board comes from Section 9(1)(b) of the Statutory Powers Procedure Act: whether the company has demonstrated that the desirability of avoiding disclosure of the material outweighs the desirability of adhering to the principle that hearings be open to the public. The Board finds that the company has not succeeded in meeting that onus. 543 In essence, the company argues that the very nature of the material for which it claims confidentiality, that is, tax planning and tax returns of affiliated companies, supports the confidential treatment sought. This is especially so given that much of the material originates with unregulated entities. However, the company's decision, for whatever reason, to divest assets or functions to affiliates cannot serve to create any special protection for evidence originating with such affiliates where that evidence goes to the essence of a claim for inclusion of substantial costs or revenues in rates. 544 The harm alleged from the disclosure of this information, according to the company, included a chill on tax planning, risks of misinterpretation, misapplication and misuse of the information, and a breach of the general expectation of privacy. The company also argues that the fact that the owner of the information is a publicly traded company is relevant. The Board is not convinced that the alleged harm is sufficient to justify its exclusion from the public record. The Board notes that much of the material relates to historic data which the company has not demonstrated will cause harm by its present disclosure. 545 The Board has reviewed its confidentiality guidelines, including the criteria in appendix 2, and does not find that the material should be excluded on the basis of these guidelines. 546 The regulation of public utilities must be carried out in as transparent a process as possible. Only very exceptional circumstances should justify the exclusion from the public record of material that is used in rate-setting. The Board does not find that the company has demonstrated exceptional circumstances. Confidentiality protection will not be afforded the documents that were discussed today: responses to School Energy Interrogatories No. 1 and 155 and the documents produced in response to a letter dated February 10 from IGUA. The Board understands that the company does not object to the public disclosure of the two letters from Trish O'Connor that were originally listed in IGUA's objection. 547 The Board recognizes, and wishes to acknowledge, the efforts the company has clearly made to provide complete information to the intervenors and the Board on the deferred taxes issue. The Board appreciates the company's efforts. 548 Are there any questions? We will then adjourn at this point and reconvene in this room on Monday morning at 9:30 a.m. Thank you all. 549 --- Whereupon the hearing adjourned at 4:37 p.m.