2013 was a very active year in the tech sector in Canada. Some of the leading developments over the last year are summarised below.
Tech Transactions – Turbulent Year for BlackBerry (Fairfax transaction)
2013 was a turbulent year for the Canadian leader of the telecommunications industry. It started with a change of name, from Research in Motion Ltd. to BlackBerry, in order to rebrand the company and to be more successful on the stock market. A few months later, BlackBerry publicly announced that it was reviewing its strategic alternatives for the future. In November, BlackBerry received an investment of U.S. $1 billion from Fairfax Financial Holdings Limited ("Fairfax") and other institutional investors. Further to the transaction, Fairfax has become the largest shareholder of BlackBerry and changes were made to the management of the company. For more information on this transaction, please see our new release on the Fairfax transaction.
Temporary Foreign Workers — Outsourcing
On December 31, new amendments were introduced by the Canadian government to the Temporary Foreign Worker Program to better protect these workers and to ensure that Canadians are the first to be considered for jobs. The new amendments include tougher requirements for Labour Market Opinions and give more inspection powers to the government. These new amendments will have to be reviewed carefully by companies outsourcing their IT services offshore and will require added diligence regarding the hiring practices of service providers with a global staffing model. It would not be surprising to see more companies having recourse to outsourcing services enacting codes of conduct on hiring practices, conducting audit of their service providers' hiring practices and including representations and warranties in their outsourcing contracts in relation to the hiring of temporary foreign workers. For more information on outsourcing and temporary foreign workers, please see our blog recapping the topics canvassed during the 2013 tech summit.
2013 is also the year that cloud computing entered the financial
services sector. Initially, cloud services were mostly used by
small businesses and consumers, but financial institutions and
other large companies operating in regulated industries are now
going into the cloud, resulting in lengthy negotiations with
cloud service providers to address regulatory requirements and to manage risk due to the sensitivity of the data involved. Issues that require particular attention in a cloud context including: knowing where the data is located, ensuring data security and the respect of privacy obligations, and guaranteeing the continuity of the service against interruptions and even to obtain a copy of the data. For more information on issues arising from cloud computing, please see our blog on innovation in the cloud.
In 2012, the federal government proposed an addendum to the Code of Conduct for the Credit and Debit Card Industry in Canada to address mobile payments. The Addendum was anticipated to come into force in 2013, but the government stated in its Spring budget that it was finalizing it and it has not been released yet. The main reason behind the delay of the enactment of the Addendum seems to be that mobile payments raise concerns for consumers and merchants that are delicate to address such as privacy, security, fraud and the most important being: who should bear the costs of this new payment mechanism. For more information on mobile payments, please see our blog recapping the topics canvassed during the 2013 tech summit and our blog on mobile payments.
Telematics is new technology that has attracted much attention in 2013. In particular, the insurance industry has begun to put a lot of efforts praising its merits, offering savings of up to 25% for policyholders. In October, the Financial Services Commission of Canada, the Ontario insurance regulator, released a bulleting outlining what it views as acceptable and unacceptable for insurers offering this new device. Among others, the Commission considers that data collected by telematics should be treated as personal information protected under privacy laws, that insurers should not force their clients to use this technology and that telematics data should not be used by insurers for claims-related purposes. For more information on telematics, please see our blog canvassing issues arising from telematics.
2013 was a year of important legal developments in privacy with the enactment by the government of Manitoba of the Personal Information Protection and Identity Theft Prevention Act ("PIPITPA"). Manitoba has joined the ranks of British Columbia, Québec and Alberta who already had enacted privacy laws. The PIPITPA is similar in many instances to Alberta's Personal Information Protection Act. The Alberta's experiences and case law will certainly guide Manitoban organizations and the legal community in interpreting and applying this new law, except with regards to oversight and enforcement, where there is significant difference between the two. For more information on PIPITPA, please see our blog on PIPTPA.
SCC Privacy decision
Only a few weeks after this major legal development, the Supreme Court of Canada released its decision in Alberta (Information and Privacy Commissioner) v. United Food and Commercial Workers, Local 401, which involved the recording of a picket line in a shopping mall by a union and an employer, and strikes down the Alberta privacy law finding it unconstitutional on the grounds of the right to freedom of expression. The Court found that Alberta's privacy law's definition of personal information was too broad, deeming all personal information to be protected, and did not accommodate the freedom of expression of unions in lawful strikes. Since the sections of the Alberta law at issue in the judgement are similar to their equivalent in the privacy laws of Manitoba, Québec and British Columbia, as well as the federal Personal Information Protection and Electronic Documents Act, we can expect further legal developments to happen in the area of privacy for 2014. For more information on this SCC decision, please see our blog on this landmark decision.
Finally, Industry Canada issued its final regulations in relation to Canada's Anti-Spam Legislation ("CASL"), which will come into force, in part, on July 1st, 2014. Most Canadian businesses are in the midst of implementing their compliance initiatives in relation to CASL and will continue to do so over the next 6 months. This new law will significantly restrict the sending of commercial electronic messages and its constitutionally has already been questioned on the grounds of freedom of expression, federalism and vagueness. It will also be interesting to see whether and how the SCC decision's in United Food will be used in any potential challenges to the law. For more information on CASL, please see our blog on CASL.
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