Originally published in Blakes Bulletin on Privacy, June
A bill to enact the Safeguarding Canadians' Personal
Information Act, has been introduced in Parliament. The bill,
if enacted, would make a number of changes to Canada's federal
Personal Information Protection and Electronic Documents
Business Transaction Exemption. The business
transaction exemption, in particular, will be welcomed by the
business community. It would permit the reasonable use and
disclosure of personal information without consent, both in the due
diligence phase and after closing, provided the organizations enter
into a data protection agreement containing certain required terms,
such as to use and disclose the information solely for purposes
related to the transaction. On closing, one of the parties must
notify affected individuals within a reasonable time after the
transaction is completed that their personal information has been
Data Breach Reporting Obligation. A significant
change would be a requirement that organizations notify the Federal
Privacy Commissioner of any material breach of security safeguards
involving personal information under their control. The factors
relevant to determining materiality would be defined to include:
(a) the sensitivity of the personal information; (b) the number of
individuals affected; and (c) an assessment by the organization
that the cause of the breach or pattern of breaches indicates a
systemic problem. Organizations would also be required to notify
individuals of such breaches if they create a real risk of
significant harm. Significant harm would be defined to include
bodily harm, humiliation, damage to reputation or relationships,
financial loss, identity theft and negative credit effects.
Employee Personal Information. PIPEDA only
applies to the employment information of a limited group of federal
works, such as banks and airlines. The bill would remove the
consent requirement for collection, use or disclosure of employee
personal information to the extent necessary to establish, manage
or terminate an employment relationship in those federally
regulated organizations. Both the business transaction exemption
and the use of employee personal information without consent, but
on notice, reflect regimes already in place in the Alberta and
British Columbia Personal Information Protection Acts.
Business Contact Information. Business contact
information would be expanded to include all business contact
information, including work electronic mail address. However,
business contact information would only be exempt from consent
requirements where that information is used solely for the purpose
of communicating with the individual in relation to their
employment, business or profession. In other words, business
contact information would not be exempt if used for non-business
Consent. The bill would more precisely set out
the standard for consent by providing that consent is only valid if
it is reasonable to expect that the individual understands the
nature, purpose and consequences of the collection, use or
disclosure of the personal information. While this concept was
already in PIPEDA and required both knowledge and consent, the
change will further heighten the need for careful consideration of
the wording of all personal information disclosures and
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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