Canada: Data Protection Laws of the World Handbook: Second Edition - Canada

E-Commerce And Privacy Alert

LAW

In Canada there are 27 federal, provincial and territorial privacy statutes (excluding statutory torts, privacy requirements under other legislation, federal anti spam legislation, identity theft/ criminal code etc.) that govern the protection of personal information in the private, public and health sectors. Although each statute varies in scope, substantive requirements, and remedies and enforcement provisions, they all set out a comprehensive regime for the collection, use and disclosure of personal information.

The summary below focuses on Canada's four private sector privacy statutes:

  • Personal Information Protection and Electronic Documents Act ("PIPEDA");
  • Personal Information Protection Act ("PIPA Alberta");
  • Personal Information Protection Act ("PIPA BC"); and
  • An Act Respecting the Protection of Personal Information in the Private Sector ("Quebec Privacy Act"), (collectively, "Canadian Privacy Statutes").

PIPEDA applies (i) to organisations that are deemed to be a "federal work, undertaking or business" (eg banks, telecommunications companies, airlines, railways, and other interprovincial undertakings); (ii) to organisations who collect, use and disclose personal information in the course of a commercial activity which takes place within a province, unless the province has enacted "substantially similar" legislation (PIPA BC, PIPA Alberta and the Quebec Privacy Act have been deemed "substantially similar"); and (iii) to inter provincial and international collection, use and disclosure of personal information.

DEFINITION OF PERSONAL DATA

"Personal information" includes any information about an identifiable individual.

DEFINITION OF SENSITIVE PERSONAL DATA

Not specifically defined.

NATIONAL DATA PROTECTION AUTHORITY

  1. Office of the Privacy Commissioner of Canada (PIPEDA);
  2. Office of the Information and Privacy Commissioner of Alberta (PIPA Alberta);
  3. Office of the Information and Privacy Commissioner for British Columbia (PIPA BC); and
  4. Commission d'accès à l'information du Québec (Quebec Privacy Act).

REGISTRATION

There is no registration requirement under Canadian Privacy Statutes.

DATA PROTECTION OFFICERS

PIPEDA, PIPA Alberta and PIPA BC expressly require organisations to appoint an individual responsible for compliance with the obligations under the respective statutes.

COLLECTION AND PROCESSING

Canadian Privacy Statutes set out the overriding obligation that organisations only collect, use and disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.

Subject to certain limited exceptions prescribed in the Acts, consent is required for the collection, use and disclosure of personal information. Depending on the sensitivity of the personal information, consent may be opt in or opt out. Organisations must limit the collection of personal information to that which is necessary to fulfil the identified purposes and only retain such personal information for as long as necessary to fulfil the purposes for which it was collected.

Each of the Canadian Privacy Statutes have both notice and openness/transparency requirements. With respect to notice, organisations are generally required to identify the purposes for which personal information is collected at or before the time the information is collected. With respect to openness/transparency, generally Canadian Privacy Statutes require organisations make information about their personal information practices readily available.

All Canadian Privacy Statutes contain obligations on organisations to ensure personal information in its records is accurate and complete, particularly where the information is used to make a decision about the individual to whom the information relates or if the information is likely to be disclosed to another organisation.

Each of the Canadian Privacy Statutes also provides individuals with (i) a right of access to personal information held by an organisation, subject to limited exceptions, and (ii) a right to correct inaccuracies in/update their personal information records.

Finally, organisations must have policies and practices in place that give effect to the requirements of the legislation and organisations must ensure that their employees are made aware of and trained with respect to such policies.

TRANSFER

When an organisation transfers personal information to a third party service provider (ie who acts on behalf of the transferring organisation), the transferring organisation remains accountable for the protection of that personal information and ensuring compliance with the applicable legislation. In particular, the transferring organisation is responsible for ensuring that the third party service provider appropriately safeguards the data, and would also be required under the notice and openness/transparency provisions to reference the use of third party service providers in and outside of Canada, in their privacy policies and procedures.

With respect to the use of foreign service providers, PIPA Alberta specifically requires a transferring organisation to include the following information in its privacy policies and procedures:

  • the countries outside Canada in which the collection, use, disclosure or storage is occurring or may occur; and
  • the purposes for which the third party service provider outside Canada has been authorised to collect, use or disclose personal information for or on behalf of the organisation.

Under PIPA Alberta, specific notice must also be provided at the time of collection or transfer of the personal information and must specify:

  • the way in which the individual may obtain access to written information about the organisation's policies and practices with respect to service providers outside Canada; and
  • the name or position name or title of a person who is able to answer on behalf of the organisation the individual's questions about the collection, use, disclosure or storage of personal information by service providers outside Canada for or on behalf of the organisation.

SECURITY

Each of the Canadian Privacy Statutes contains safeguarding provisions designed to protect personal information. In essence, these provisions require organisations to take reasonable technical, physical and administrative measures to protect personal information against loss or theft, unauthorised access, disclosure, copying, use, modification or destruction. These laws do not generally mandate specific technical requirements for the safeguarding of personal information.

BREACH NOTIFICATION

Currently, PIPA Alberta is the only Canadian Privacy Statute with breach notification requirements. However, proposed amendments to PIPEDA would require notice of material breaches be made to the Office of the Privacy Commissioner of Canada ("OPC") and, in certain circumstances, to the individuals affected.

In Alberta, an organisation having personal information under its control must, without unreasonable delay, provide notice to the Commissioner of any incident involving the loss of or unauthorised access to or disclosure of the personal information where a reasonable person would consider that there exists a real risk of significant harm to an individual as a result. Notification to the Commissioner must be in writing and include:

  • a description of the circumstances of the loss or unauthorised access or disclosure;
  • the date or time period during which the loss or unauthorised access or disclosure occurred;
  • a description of the personal information involved in the loss or unauthorised access or disclosure;
  • an assessment of the risk of harm to individuals as a result of the loss or unauthorised access or disclosure;
  • an estimate of the number of individuals to whom there is a real risk of significant harm as a result of the loss or unauthorised access or disclosure;
  • a description of any steps the organisation has taken to reduce the risk of harm to individuals;
  • a description of any steps the organisation has taken to notify individuals of the loss or unauthorised access or disclosure; and
  • the name and contact information for a person who can answer, on behalf of the organisation, the Commissioner's questions about the loss of unauthorised access or disclosure.

Where an organisation suffers a loss of or unauthorised access to or disclosure of personal information as to which the organisation is required to provide notice to the Commissioner, the Commissioner may require the organisation to notify the individuals to whom there is a real risk of significant harm. This notification must be given directly to the individual (unless specified otherwise by the Commissioner) and include:

  • a description of the circumstances of the loss or unauthorised access or disclosure;
  • the date on which or time period during which the loss or unauthorised access or disclosure occurred;
  • a description of the personal information involved in the loss or unauthorised access or disclosure;
  • a description of any steps the organisation has taken to reduce the risk of harm; and
  • contact information for a person who can answer, on behalf of the organisation, questions about the loss or unauthorised access or disclosure.

On 29 September 2011, proposed amendments to PIPEDA were introduced that, if passed, would require that organisations report to the OPC "any material breach of security safeguards involving personal information under its control". The proposed amendments also require organisations to notify an affected individual "if it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm to the individual". The proposed amendments are not yet in force.

ENFORCEMENT

Privacy regulatory authorities have an obligation to investigate complaints, as well as the authority to initiate complaints.

Under PIPEDA, a complaint must be investigated by the Commissioner and a report will be prepared that includes the Commissioner's findings and recommendations. A complainant (but not the organisation subject to the complaint) may apply to the Federal Court for a review of the findings and the court has authority to, among other things, order an organisation to correct its practices and award damages to the complainant, including damages for any humiliation that the complainant has suffered.

Under PIPA Alberta and PIPA BC, an investigation may be elevated to a formal inquiry by the Commissioner resulting in an order. Organisations are required to comply with the order within a prescribed time period, or apply for judicial review. Similarly, under the Quebec Privacy Act, an order must be complied with within a prescribed time period.

PIPA Alberta and PIPA BC also lay out a number of offences, including, but not limited to, obstructing the Commissioner, knowingly making a false statement to the Commissioner, punishing whistleblowers, disposing of information to evade an access request, and failing to comply with an order. In BC, these offences also include the use of deception or coercion to collect personal information. In Alberta, these offences also include the collection, use, or disclosure of personal information contrary to the Act and failure to provide notice of a breach. Offences are punishable by a fine of not more than $10,000 for individuals and $100,000 otherwise.

Under PIPA Alberta and PIPA BC, where an order has been issued against an organisation or an organisation has been convicted of an offence under the legislation, individuals have a cause of action against the organisation for damages for loss or injury suffered as a result of the organisation's breach of its obligations under the legislation.

ELECTRONIC MARKETING

Electronic marketing is governed by both Canadian Privacy Statutes (as discussed above), as well as Canada's Anti-Spam Legislation ("CASL"). CASL received Royal Assent on December 15, 2010 and is expected to be in force by early 2014.

Under CASL it is prohibited to send, or cause or permit to be sent, a commercial electronic message (defined broadly to include text, sound, voice, or image messages aimed at encouraging participation in a commercial activity) unless the recipient has provided express or implied consent and the message complies with the prescribed content and unsubscribe requirements (subject to limited exceptions).

What constitutes both permissible express and implied consent is defined in the Act and regulations. For example, an organization may be able to rely on implied consent when there is an existing business relationship with the recipient of the message, based on (i) a purchase by the recipient within the past two years; or (ii) a contract between the organization and the recipient currently in existence or which expired within the past two years.

CASL also prohibits the installation of a computer program on any other person's computer system, or causing electronic messages to be sent from another's computer system, without express consent, if the relevant system or sender is located in Canada. In addition, the Act contains anti-phishing provisions that prohibit (without express consent) the alteration of transmission data in an electronic message such that the message is delivered to a destination other than (or in addition to) that specified by the sender.

CASL contains potentially stiff penalties, including administrative penalties of up to $1 million per violation for individuals and $10 million for corporations (subject to a due diligence defence). CASL also sets forth a private right of action permitting individuals to bring a civil action for alleged violations of CASL ($200 for each contravention up to a maximum of $1 million each day for a violation of the provisions addressing unsolicited electronic messages).

ONLINE PRIVACY (INCLUDING COOKIES AND LOCATION DATA)

Online privacy is governed by Canadian Privacy Statutes (discussed above). In general, Canadian privacy regulatory authorities have been active in addressing online privacy concerns.

For example, in the context of social media, the OPC has released numerous Reports of Findings addressing issues including: default privacy settings; social plug-ins; identity authentication practices; and the collection, use and disclosure of personal information on social networking sites. The OPC has also released decisions and guidance on privacy in the context of Mobile Apps.

In addition, the OPC has released findings and guidelines related to the use of cookies and online behavioural advertising, including findings indicating that information stored by temporary and persistent cookies is considered to be personal information and therefore subject to PIPEDA. The OPC has adopted the same position with respect to information collected in connection with online behavioural advertising.

In Privacy and Online Behavioural Advertising (the "OBA Guidelines"), the OPC stated that it may be permissible to utilize opt-out consent in the context of online behavioural advertising if the following conditions are met:

  • Individuals are made aware of the purposes for the online behavioural advertising, at or before the time of collection, in a manner that is clear and understandable;
  • Individuals are informed of the various parties involved in the online behavioural advertising at or before the time of collection;
  • Individuals are able to opt-out of the practice and the opt-out takes effect immediately and is persistent;
  • The information collected is non-sensitive in nature (i.e. not health or financial information); and
  • The information is destroyed or made de-identifiable as soon as possible.

The OPC has indicated that online behavioural advertising must not be a condition of service and, as a best practice, should not be used on websites directed at children.

With respect to location data, such information, whether tied to a static location or a mobile device, is considered to be personal information by Canadian privacy regulatory authorities. Assuch, any collection, use or disclosure of location data requires, among other things, appropriate notice and consent. Most of the privacy regulatory authority decisions related to location data have arisen with respect to the use of GPS in the employment context. TheCanadian privacy regulatory authorities provide the following test that must be met for the collection of GPS data:

  • Is the data demonstrably necessary to meet a specific need?
  • Will the data likely be effective in meeting that need?
  • Is the loss of privacy proportional to the benefit gained? and
  • Are there less privacy-intrusive alternatives to achieve the same objective?

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.


DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

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