Date: 20050203
Docket: T-1820-04
Ottawa, Ontario, this 3rd day of February, 2005
Present: THE HONOURABLE MR. JUSTICE von FINCKENSTEIN
BETWEEN:
FLAG CONNECTION INC.
Applicant
and
THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES
Respondent
REASONS FOR ORDER AND ORDER
[1] The Applicant is a company called Flag Connection Inc. which is in the business of manufacturing flags. It contends that the Respondent's practice of purchasing flags is contrary to the National Flag of Canada Manufacturing Standards Act, ( R.S. 1985, c. N-9 ), ("National Flag Act").
[2] The National Flag Act, passed in 1985, is a short statute that provides as follows:
1. This Act may be cited as the National Flag of Canada Manufacturing Standards Act.
2. (1) On or before June 28, 1985, the Canadian General Standards Board shall establish standards for manufacture of the national flag of Canada corresponding to the intended use of the flag under varying conditions, including indoor use, outdoor use, one-event-only use and such other uses as the Board may determine that the national flag of Canada may reasonably be subjected to.
(2) The Canadian General Standards Board shall, at least once every three years, review the standards and corresponding uses referred to in subsection (1) for the purpose of ensuring their adequacy relative to technological advances in the production of materials and dyes used in the manufacture of flags.
3. (1) No Crown corporation, department, board, agency or office of the Government of Canada shall, after June 28, 1986, purchase or use a national flag of Canada for government purposes unless it has been manufactured in compliance with the applicable standards for manufacture and use thereof established by the Canadian General Standards Board pursuant to section 2.
(2) Subsection (1) does not apply in respect of flags purchased for a use for which standards are not established by the Canadian General Standards Board.
4. All flags, whether manufactured in Canada or imported into Canada, that are manufactured in compliance with the standards for manufacture referred to in section 2 shall bear a mark identifying that flag as having met the standards for manufacture established by the Canadian General Standards Board.shortly after the adoption of our national states that no department of the Government of Canada shall "purchase" or "use" a Canadian flag for "government purposes" unless the flag has been manufactured in compliance with the applicable standards for its manufacture and use established by the CGSB. The CGSB has established standards for flags to be used for "Outdoor Use", "Indoor Use" and "One-Event-Only Use". The "Outdoor Use" standard focuses on the requirement that outdoor flags not lose their colour and are able to withstand weathering
(Underlining added)
[3] The Canadian General Standards Board ("CGSB") is a government agency that is engaged in the creation of voluntary standards in various disciplines through the use of standards committees. The CGSB has set up a Flag Committee which is made up of representatives from the manufacturing sector, as well as the public sector. The National Flag Committee provides advice and recommendations to the CGSB on the development of standards under the National Flag Act. In November of 2003, a new standard for Outdoor Use of the National Flag Standard CAN/CGSB-98.1-2003 ("2003 standard") was adopted by the CGSB. This 2003 standard was in force as of the date this matter was heard.
[4] Four Requests for Proposals were issued by the Respondent on behalf of the Department of Canadian Heritage ("CH"):
1. RFP C2700-030493/A ("493A") dated 2003-11-04 for 41,755 flags with a technical specification that stipulated compliance with the 2003 standard:
Technical Requirements
Technical Requirement National Flag 90 cm x 180 cm (3' x 6') is to be manufactured in accordance with Canadian General Standards Board (CGSB) Standard CAN/CGSB -98.1-2003 (new edition), Type 4 (with Rope & Toggle): ...
(Application Record p. 78)
No compliant bids were received in respect of this RFP.
2. RFP C2700-030493/B ("493B") dated 2004-01-27 for 64,330 flags with a technical specification that stipulated compliance with an attached purchase description that was less stringent than the 2003 standard:
Technical Requirements
Technical Requirement National Flag 90 cm x 180 cm is to be manufactured in accordance with Purchase Description CAG-8-0401-783 attached herein.
(Application Record p. 100)
[Purchase Description CAG-8-0401-783 was not included in the Application Record]
This contract was awarded to a competitor of the Applicant called Scythes Inc. ("Scythes").
3. RFP C2822-040242/A ("242A") dated 2004-09-21 for 15,400 flags again with a technical specification that stipulated compliance with an attached purchase description that was less stringent than the 2003 standard:
2. TECHNICAL REQUIREMENTS:
Purchase Description - CAG-8-0409-783A
PURCHASE DESCRIPTION
ITEM:
CANADA FLAG (Outdoor Use), 90 x 180cm, Header with Rope and Toggle
SCOPE:
This purchase description describes the requirements for a "Canada Flag" for promotional purposes (unofficial) by Canadian Heritage. The Canada Flag is made from a plain weave fabric weighing 60-60 g1/m2 and dye printed. Includes header, rope and toggle.
The finished flag fabric shall be tested in accordance with test methods cited in Table 1 and shall meet all the requirements.
(Application Record pp. 127 & 143)
No compliant bids were received.
4. RFP 2822-040242/B ("242B") dated 2004-11-04 for 25, 900 flags again with a technical specification that stipulated compliance with an attached purchase description that was less stringent than the 2003 standard:
TECHNICAL REQUIREMENT:
Purchase Description - CAG-8-0411-783B
PURCHASE DESCRIPTION
ITEM:
CANADA FLAG (Promotional Use), 90 x 180cm, Header with Rope and Toggle
SCOPE:
This purchase description describes the requirements for a "Canada Flag" for promotional purposes (unofficial) by Canadian Heritage. The Canada Flag is made from a plain weave fabric weighting 60-70 g/m2 and dye printed. Includes header, rope and toggle.
The finished flag fabric shall be tested in accordance with test methods cited in Table 1 and shall meet all the requirements.
(Application Record p. 543 & 559)
This contract was awarded to the Applicant on November 30, 2004.
[5] The present action was commenced as a result of RFP 242A set out above. Notwithstanding that no compliant bid was received, the Applicant, after several interlocutory proceedings, chose to proceed. It is the Applicant's contention that this RFP is contrary to s. 3 of the National Flag Act.
[6] The Applicant seeks the following relief:
(a) A declaration that the respondent is in contravention of the National Flag of Canada Manufacturing Standards Act, and the standards established by the CGSB, by issuing Request for Proposals No. C2822-040242/A with the objective of purchasing national flags for government purposes that are not in compliance with the Act and the prescribed standards.
(b) A declaration that the respondent has breached his statutory duties, and acted for an improper purpose, by conducting the above procurement with the intention of favouring a competitor of the applicant. Alternatively, the applicant requests a declaration that there is a reasonable apprehension of bias in the respondent's actions.
(c) An order prohibiting or restraining the respondent from contravening section 3(1) of the National Flag Act by purchasing national flags other than in compliance with the provisions of that Act.
d) An order in the nature of mandamus directing the respondent to comply with the provisions of section 3 of the National Flag Act.
[7] ISSUES
1. Do Canadian flags purchased for promotional purposes fall outside the scope of theNational Flag Act?
2. Has the Respondent demonstrated a reasonable apprehension of bias toward Scythes Inc. by issuing RFP 242A?
3. Does the Canadian International Trade Tribunal ("CITT") provide an adequate alternative remedy for the Applicant?
ISSUE 1: Do Canadian flags purchased for promotional purposes fall outside the scope of the National Flag Act?
[8] The flags are purchased by CH as part of its mandate to promote Canadian symbols.
CH is the largest user of flags in Canada. A manager at CH of a division called "State Ceremonial and Canadian Symbols" deposed to the fact that he runs a "Parliamentary Flag Program" under which flags are purchased for distribution to MP's and Senators who, in turn, give these flags to their constituents. CH also buys flags for distribution to the public, either directly through its regional offices or indirectly through various interest groups, associations and schools across Canada. These flags will be used by the general public for all conceivable purposes such as Canada Day celebrations, picnics and wall decorations. The flags in issue were intended for the celebration of the upcoming National Flag Day on February 15, 2005.
[9] The Applicant maintains that given that the flags are bought by a government department in discharge of its mandate, they are purchased for "government purposes". As such, they have to comply with s. 3 of the National Fag Act.
[10] I find it difficult to accept this argument for two reasons. First of all, all purchases by government must be made under some sort of specific or general authority. If one were to construe any purchases by a Crown corporation, department, board, agency or office of the Government of Canada ("government bodies") in the discharge of its mandate as falling under the category of "purchase" or "use" for "government purposes", I cannot conceive of an instance where a "purchase" or "use" by government bodies would not be for "government purposes". After all, government bodies are generally restricted to use or purchase assets only for the purpose of the discharge of their mandate.
[11] Secondly, if one adopts this construction, the words "for government purposes" as found in s. 3 are superfluous. If this was the meaning intended, the section would have read: "No Crown corporation, department, board, agency or office of the Government of Canada shall use or purchase a national flag of Canada unless...".
[12] In this context, the phrase "for official use" has to refer to use by a government body performing official government functions. In terms of outdoor use, occasions such as the opening of Parliament, receiving official visitors, state funerals, flying on top of government buildings come to mind. In terms of indoor use, swearing in ceremonies or the display of the Canadian flag in courtrooms or other government hearing rooms would be typical examples.
[13] I am strengthened in this view by the French version of s. 3. which uses the words "fins officielles" for "government purposes". The word "officiel" is defined in Le Grand Robert Deuxième Edition, 1992 as:
1. (a) Qui émane d'une autorité reconnue, constituée (gouvernement, administration..). Décision, mesure officielle. Acte officiel. = > Authentique. Documents* officiels (- > Archive, cit. 9). Certificat* officiel. Honneurs officiels. Être revétu d'une dignité officielle. Témoignage officiel de satisfaction. Étalon officiel de mesure (- > Mètre, cit. 2). - Communiqué* (cit.) officiel, dépêche, note officielle (- > Évidence, cit. 7). Recueil officiel des lois. = > Bulletin (des lois). Journal officiel, et, subst., l'Officiel : journal contenant les textes officiels (lois, décrets, arrêtés...), les débats des assemblées, etc. Le Journal officiel a succédé au Moniteur officiel.
Le Grand Robert, also provides the further illustrative definition for the word "officiel":
(d) (1874). Qui est organisé, commandé par les autorités constituées. Cérémonial*, protocole officiel. - Fêtes, réjouissances officielles. Cérémonie oficielle. Visite officielle d'un souverain (par oppos. À privé). Portrait officiel. - Par ext. L'art officiel, auquel le gouvernement, l'état donne sa caution qu'il finance.
This definition amply demonstrates that the word "officiel", when used in conjunction with the activities of government, refers to formal or ceremonial functions of government, not to the mere delivering of government services or programs.
[14] However, even if one were to adopt the interpretation suggested by the Applicant, this would not advance his cause. The purpose for which flags are used or bought is determined by their ultimate use, not by their characterization in the RFP. As mentioned earlier, the flags in issue here were purchased by CH for direct or indirect distribution to the public. There is no way of telling where they will be used and for what purpose. Therefore, the mere fact that RFP 242A used the words "outdoor use" in the purchase description does not establish that the flags would be used for outdoor purposes.
[15] Section 2(1) specifically provides for the determination of uses other than "outdoor", "indoor" and "one-event-only". However, no standards for other uses have been established by the CGSB. The purpose for which the flags were purchased by the Respondent for CH does not fall into any of the categories of uses established by s. 2(1); they are quite correctly described by the Respondent as for "promotional use". The ultimate users of the flags may use them either indoors or outdoors or both. However, one thing is evident, once given to the public, the flags will not be used outdoors for "government purposes".
[16] Given that no standard has been set for promotional use, the Respondent did not have to comply with the National Flag Act in its purchases for such use. Consequently, I do not find that RFP 242A was in violation of the National Flag Act.
ISSUE 2: Has the Respondent demonstrated a reasonable apprehension of bias toward Scythes Inc. by issuing RFP 242A?
[17] The Applicant's allegations relating to preferential treatment of its competitor rest on three premises:
1) that the Applicant is capable of manufacturing a flag meeting the 2003 standard;
2) that a lower standard favours Scythes; and
3) that the Respondent knowingly issued RFP 242A based on a purchase description to favour Scythes.
[18] None of these allegations is borne out by the record. There were no compliant bids in respect of RFP 493A, the only RFP that ever demanded compliance with the 2003 standard. The Applicant asserts that he can manufacture to the 2003 standard, yet he has not delivered testing data to show that his flags meet that standard. They may very well meet the standard, but it was incumbent on him to prove this and he failed to do so.
[19] The Applicant also asserts that the lower standard favours Scythes. A lowering of standards should benefit every bidder unless it can be shown that only one bidder can take advantage of this. No proof of any kind was given to back up the assertion that only Scythes would benefit.
[20] The Applicant pointed out that the stitching pattern required in RFP 242A reflects the stitching pattern employed by Scythes. This coincidentally similar stitching pattern, without any additional evidence, does not establish that this RFP was written to favour Scythes over the Applicant. No evidence was provided that this stitching is less onerous of Scythes or can only be used by Scythes. Nor was any evidence provided that this less onerous stitching cannot be used by the Applicant or can only be used by the Applicant by incurring significant additional costs.
[21] The substantial evidence introduced by the Applicant regarding attempts to revise the 2003 standard were described as "shenanigans" by the Applicant's counsel. Whether they are or not is immaterial, the Applicant has not established why such a revision would favour his competitors and be of no advantage to him as well.
[22] Accordingly, the Applicant will not succeed in this regard either.
ISSUE 3: Does the Canadian International Trade Tribunal ("CITT") provide an adequate alternative remedy for the Applicant?
[23] Given that I have found that the Applicant does not succeed on either issues 1 or 2, there is no need to consider this issue.
CONCLUSION
[24] This application will be denied as the Applicant has neither established that Canadian flags purchased for promotional purposes fall within the scope of the National Flag Act, nor that the Respondent demonstrated a reasonable apprehension of bias toward Scythes Inc. by issuing RFP 242A.
ORDER
THIS COURT ORDERS that this application will be dismissed. The Respondent shall have its costs in this matter.
"K. von Finckenstein"
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1820-04
STYLE OF CAUSE:
FLAG CONNECTION INC.
and
THE MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES
PLACE OF HEARING: OTTAWA
DATE OF HEARING: JANUARY 19, 2005
REASONS FOR ORDER: THE HONOURABLE MR. JUSTICE VON FINCKENSTEIN
APPEARANCES:
Mr. Ronald Lunau FOR THE APPLICANT
Mr. Alexandre Kaufman FOR THE RESPONDENT
SOLICITORS OF RECORD:
Ronald D. Lunau & Catherine Beaudoin
Gowing Lafleur Henderson LLP
Ottawa, Ontario FOR THE APPLICANT
John H. Simms Q.C.
Deputy Attorney General of Canada
Per: Alexandre Kaufman
Department of Justice FOR RESPONDENT