Canada: PIPEDA Amendments In-Force

Last Updated: June 23 2015
Article by Timothy Banks

Amendments to Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) are frequently proposed but just as frequently die on the order paper. Bill S-4, which proposed the most significant amendments to PIPEDA since it was enacted 15 years ago, looked to some like it might be set for a similar fate given the upcoming summer recess for Parliament and a fall election. Not so. As we reported following the vote, Parliament finally passed Canada's Digital Privacy Act, SC 2015, c32 last week. The Act received Royal Assent on June 18, 2015, with some amendments to PIPEDA going into force immediately.

This article provides a quick summary of the major amendments that are now in force, with our take on their significance. Missing from the list are the new breach reporting and notification requirements. The requirements to keep records of breaches of security safeguards, to report these breaches to the Office of the Privacy Commissioner of Canada (OPC) and to notify individuals of breaches that affect them won't go into force until sometime in the future. Regulations setting out the content of the mandatory reports and notifications need to be drafted. For background on the breach reporting and notification provisions, see our previous blog post.

For now, here's what organizations should know about the amendments to PIPEDA.

Compliance Agreements (ss. 17.1 and 17.2)

The OPC is now expressly empowered to enter into compliance agreements with organizations, which can be enforced by way of an application to Federal Court.

This tool can be used by the OPC whenever the OPC believes (on reasonable grounds) that an organization has committed, is about to commit or is likely to commit an act or omission that could constitute (i) a contravention of PIPEDA or (ii) a failure to follow a recommended practice set out in Schedule 1 of PIPEDA. The compliance agreement can include any terms that the OPC negotiates with the organization.

Dentons Notes: The OPC has used this tool before but without express legislative authority. Although, this tool will be very attractive to the OPC, it is not clear what will be "in it" for an organization. There is no protection for the organization from individual actions as a result of entering into a compliance agreement. The OPC may find that organizations are only interested in agreeing to these compliance agreements when they need time to implement an OPC recommendation and the OPC requires the agreement as a condition of obtaining that additional time.

Valid Consent (s. 6.1)

Consent of an individual is only valid if it is reasonable to expect that an individual would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.

The OPC's view is that this isn't really a change. However, PIPEDA is now more explicit that an organization must ensure that individuals understand the risks of consenting to collection, use and disclosure of personal information.

Dentons Notes: The OPC has an additional benchmark against which to criticize privacy disclosures. Now is the time to examine your privacy disclosures to determine whether the nature, purpose and consequences of your information handling practices are clearly explained.

Business Contact Information (s. 2(1))

A new definition of "business contact information" has been added and the definition of "personal information" has been revised to refer simply to "information about an identifiable individual".

These amendments clarify that work contact information, including an email address (which had been omitted previously), may be collected, used and disclosed without the knowledge or consent of the individual so long as the purpose is to communicate or to facilitate communication with the individual in relation to their employment, business or profession.

Dentons Notes: This is common sense. This won't change much but does clarify that a business email address and other contact information will be personal information if it is used for purposes other than to contact an individual in the individual's business or professional capacity. For example, a work email address being used as an ID for a personal site is still personal information. A work telephone number given to a courier delivering a package to a home address is still personal information.

Business Transactions (ss. 2(1) and 7.2)

PIPEDA now contains provisions to assist in the transfer of personal information in connection with business transactions. It applies to a broad range of transactions (e.g. asset sales, mergers, loans, securitization of assets, and leases or licences of assets) provided that the transfer of the personal information is not the primary purpose of the transaction.

PIPEDA did not have provisions that allowed organizations to share information as part of the due diligence phase of a business transaction or upon the consummation of the transaction. This provision allows for sharing, subject to certain conditions. The information must only be used and disclosed for purposes related to the transaction. The information must be safeguarded. If the transaction is not completed, the information must be returned or destroyed. If it is completed, the individual must be notified, the use must be limited to the originally identified purposes (unless additional consent is obtained) and any withdrawal of consent must be honoured. The sharing must be necessary to determine whether to complete the transaction and, if completed, to carry on the business.

Dentons Notes: This is a substantial improvement to facilitate business transactions. However, the inclusion in the provision of a test of "necessity" means that organizations are going to have to consider carefully what information is really necessary to be shared and ultimately transferred. One quibble is that the inclusion of amalgamations is out of step with corporate law. It is unclear why Parliament thought an amalgamation involved a disclosure. The most commonly accepted understanding of an amalgamation in Canada is that assets are not transferred (or, in the case of personal information "disclosed") as part of that type of business combination. Also, the "primary purpose" exclusion is going to be difficult in some contexts where the main asset of an ongoing business is information.

Employee Information / Employee Work Product (ss. 7(1)(b.2), 7(2)(b.2), 7(3)(e.2), 7.3)

These provisions apply to federal works, undertakings and businesses (known as FWUBs – e.g. banks, interprovincial railways, airlines, interprovincial trucking companies, offshore drilling platforms, telecommunications companies, etc.).

The amendments provide that notice, but not consent, is required for the collection, use and disclosure of personal information that is necessary to establish, manage or terminate an employment relationship between the federal work, undertaking or business and the individual.

Furthermore, the knowledge or consent of an individual is not necessary to collect, use or disclose information that is produced by the individual in the course of their employment, business or profession and the collection, use or disclosure is consistent with the purposes for which the information was produced.

Dentons Notes:  Before FWUB employers rejoice, there is still enough here to be troublesome. What is "necessary"? What is "consistent"? An employer and an employee are unlikely to agree on the scope of these "wiggle words".

Next of Kin / Identifying a Deceased Individual (ss. 7(3)(c.1)(iv) and 7(3)(d.4)

Personal information may be shared with a government institution that requests the information for the purpose of communicating with the next of kin or authorized representative of an injured, ill or deceased individual.

Personal information may also be shared with government institutions, next of kin or authorized representatives for the purpose of identifying an individual who is deceased, ill or injured. However, the individual, if alive, must be advised of the disclosure after it has been made.

Dentons Notes: Organizations should develop policies and procedures. In the case of government requests, it is still necessary to establish the lawful authority of the institution. In the case of identifying an individual, it may be necessary to notify the individual (in writing and without delay) of the disclosure.

Financial Abuse (s. 7(3)(d.3))

An organization that has reasonable grounds to believe that the individual has been, is or may be the victim of financial abuse can make a disclosure (without the knowledge or consent of the individual) to a government institution or the individual's next of kin or authorized representative for the purpose of preventing or investigating the abuse. It must be reasonable to expect that disclosure with the knowledge or consent of the individual would compromise the ability to prevent or investigate the abuse.

This provision responds to a perceived need, primarily in the financial services industry, for some way to get information to family members or other representatives when an organization believes an individual is subject to financial abuse. The provision has been criticized by some advocacy groups for seniors. It is expected to be used sparingly.

Dentons Notes: Policies and procedures are essential. Document all decisions to demonstrate that there were reasonable grounds to believe that there was actual or potential financial abuse and why the individual could not be approached for consent. Ensure that any disclosures are handled carefully without committing defamation, particularly when the disclosure is being made about one family member to another.

Fraud Detection and Prevention (s. 7(3)(d.2))

The knowledge or consent of an individual is not required in order to share personal information for the purposes of detecting or suppressing fraud or of preventing fraud that is likely to be committed. It must be is reasonable to expect that the disclosure with the knowledge or consent of the individual would compromise the ability to prevent, detect or suppress the fraud.

Dentons Notes: This is another area where policies and procedures will help avoid missteps. Organizations should consider entering into information sharing agreements specifying the conditions under which information will be shared.

Investigations in Breaches of Contracts or Laws (s. 7(3)(d.1))

Organizations may share information without the knowledge or consent of an individual to investigate past, occurring or potential breaches of an agreement or contraventions of the laws of Canada or a province. It must be reasonable to expect that disclosure with the knowledge or consent of the individual would compromise the investigation.

Organizations were frequently stymied in their ability to share information with one another while conducting investigations into potential wrongdoing. This provision opens the door to sharing for the purposes of the investigation.

Dentons Notes: Sharing is not mandatory. Any sharing of information should be subject to restrictions regarding how any shared information will be used and further disclosed. All decisions to disclose should be documented, including the reasons why it was reasonable to expect notice and consent would compromise the investigation.

Witness Statements in Insurance Claims (s. 7(1)(b.1), 7(2)(b.1), 7(3)(e.1))

The knowledge or consent of an individual is not necessary to collect, use or disclose information contained in a witness statement that is necessary to assess, process or settle an insurance claim.

This provision facilitates sharing of witness statements following an accident or other insured event.

Dentons Notes: This provision is primarily of interest to the insurance industry. Care will need to be given to ensure that disclosures are limited to what is necessary.

Worth the Wait?

The basic framework of PIPEDA remains intact. In many cases, the revisions to PIPEDA contained in Bill S-4 are clarifications or providing legislative authority for practices that have evolved. In other cases, such as the new sharing of information provisions to combat fraud and financial abuse or to conduct investigations are substantively new and are likely to be watched closely by the OPC to ensure that organizations use them in a measured and demonstrably defensible way. The one major change is data breach reporting and notification. However, no date has yet been set for when these provisions are going to go into force. However, because of their importance, look for our upcoming post discussing these provisions and the compliance challenges in depth.

For more information, visit our Privacy and Data Security blog at

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Dentons is a global firm driven to provide you with the competitive edge in an increasingly complex and interconnected marketplace. We were formed by the March 2013 combination of international law firm Salans LLP, Canadian law firm Fraser Milner Casgrain LLP (FMC) and international law firm SNR Denton.

Dentons is built on the solid foundations of three highly regarded law firms. Each built its outstanding reputation and valued clientele by responding to the local, regional and national needs of a broad spectrum of clients of all sizes – individuals; entrepreneurs; small businesses and start-ups; local, regional and national governments and government agencies; and mid-sized and larger private and public corporations, including international and global entities.

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