Canada: Cybersecurity Q&A: What Canadian Companies Need To Know About The EU's New Data Protection Law

 It is trite to point out that information crosses national borders today at an unprecedented rate and with very few barriers. A consequence of this unconstrained international flow of information is that domestic data protection laws increasingly have implications abroad. The recent overhaul in the European Union's data protection laws is a prime example of this, which will have implications for Canadian organizations of all sizes and types.

Q: What is the GDPR?

A: The General Data Protection Regulation (GDPR) was adopted by the European Parliament in April 2016 and comes into force in May 2018 (replacing Data Protection Directive 95/46/EC that is currently in force in the EU). One of the GDPR's objectives is to harmonize protections applicable to the processing of personal data across the EU, but it will also have material implications for Canadian organizations.

Canadian organizations will need to assess to what extent the GDPR applies to their activities and what (if any) changes will be required to stay onside of this new EU law.

Q: Does the GDPR apply to my organization?

A: The first step for any Canadian organization is to determine whether the GDPR applies to its activities. The GDPR's territorial scope is not limited to organizations with a physical presence in the EU, nor is it limited to organizations that are actively or intentionally targeting customers or users in the EU. Even without an establishment in the EU, the GDPR will apply to the extent an organization is processing personal data of subjects who are in the EU where the processing activities are related to: (1) offering goods or services to an individual in the EU (including goods and services offered at no charge); or (2) monitoring the behaviour of individuals that occurs in the EU.

As such, many Canadian organizations will find themselves subject to the GDPR notwithstanding that they are only inadvertently or passively operating in the EU, and any third-party processors of EU personal data will be caught even if they are not established in the EU.

Q: If the GDPR applies to my organization's activities, what are my options?

A: If, as a Canadian organization, you find that your activities fall within the GDPR's scope, there are generally two available courses of action. The first is to restrict your activities such that they fall outside of the GDPR's scope. For example, you might restrict your services to non-EU IP addresses or elect not to process personal data from individuals located in the EU. This could be the best option if your EU activities are neither material nor strategic to your organization. If restricting your activities in such a manner is not desirable (or possible), then the only other available course of action is to comply with the terms of the GDPR.

Q: What obligations will apply under the GDPR?

A: The GDPR imposes a number of obligations that do not exist in Canada (or are more onerous than those that do exist) and, as discussed above, these obligations will apply to many Canadian organizations.

Some of the GDPR's notable (or more unique) aspects are:

  • Obligations on Controllers and Processors: The GDPR imposes statutory obligations on the person who determines the purposes and means of the processing of personal data (controllers), but it also imposes obligations directly on the persons who process data on behalf of the controller (processors). This differs from Canadian privacy laws, which tend to apply directly only to the controllers and the controller is then responsible for their processors' compliance. For example, under the GDPR, there are express restrictions on subcontracting that apply directly to processors.
  • Consent and Other Grounds for Processing: Personal data can be processed (e.g., collected, stored, used, disclosed, erased) under the GDPR only where certain requirements are met, for example where the data subject has provided consent. "Consent" is relatively narrowly defined in the GDPR and requires a "freely given, specific, informed and unambiguous indication . . . by a clear affirmative action." As such, opt-out consent will not be a valid means for obtaining consent. If consent is not obtained, there are various alternative grounds for processing.
  • Security and Privacy by Design: Controllers and processors must implement "appropriate technical and organizational measures to ensure a level of security that is appropriate to the risk," taking into account various other considerations set out in the GDPR. There are also positive obligations to implement data protection "by design and by default."
  • Breach Notification: Following any "personal data breach," a controller must notify the supervisory authority within specific time-frames. Where the personal data breach is "likely to result in a high risk to the rights and freedoms of natural persons," the data subject must also be notified without undue delay.
  • Automated Processing: There are a number of provisions in the GDPR regarding automated decision-making and "profiling" (i.e., "automated processing of personal data . . . to evaluate certain aspects relating to natural person"). For example, data subjects have rights of notice, access, consent, and objection in connection with automated decision-making.
  • Right to Erasure ("Right to be Forgotten"): Data subjects have the right to have personal data concerning them erased without undue delay in a number of circumstances, including where it is no longer necessary for the purpose it was collected (though this right is limited, for example, to the extent the information is necessary for exercising the rights of freedom of expression and information and for the establishment, exercise or defence of legal claims).
  • Portability: Where personal data is processed using automated means, a data subject has the right to receive their personal data in a structured, commonly used and machine readable format.
  • Mandatory Data Protection Officer: Controllers and processors must designate a "data protection officer" if: (1) the processing is carried out by a public authority or body; (2) their core activities include regular and systematic monitoring of data subjects on a large scale; or (3) their core activities consist of processing on a large scale of certain categories of data (e.g., data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, data relating to criminal convictions). The data protection officer must have "expert knowledge of data protection law and practices," and the GDPR sets out various rights and responsibilities of such person which require him or her to have a significant level of independence.

Q: What is required to transfer EU personal data outside of the EU?

A: In a similar manner as the current Data Protection Directive, EU personal data cannot be transferred outside of the EU except in certain circumstances, such as where consent has been obtained from the data subject or where appropriate safeguards have been put in place (e.g., model contractual clauses).

A transfer can also be made to a non-EU country where the European Commission has decided that the destination country ensures "an adequate level of protection," and Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) has been recognized as providing such an "adequate level of protection." Currently, there are only 11 jurisdictions that have been granted this recognition, so Canada has a relatively unique advantage in this regard. While this may change in the future, for the time being, EU personal data can be transferred to organizations in Canada that are subject to PIPEDA without meeting further requirements (e.g., without obtaining consent for the transfer).

Canadian organizations that are not subject to PIPEDA (e.g., public bodies, universities, organizations subject only to provincial privacy legislation) do not benefit from this adequacy recognition and must ensure they have consent for the transfer or other appropriate safeguards in place before transferring EU personal data to Canada.

Also, PIPEDA's "adequacy" status only facilitates the transfer outside of the EU and does not in any way reduce an organization's obligation to comply with the remainder of the GDPR.

Q: As a Canadian organization, how do I approach compliance?

A: For Canadian organizations, a good first step is to assess current policies and practices and identify gaps relative to the requirements of the GDPR. Once these gaps are known, differing strategies can be assessed and a plan can be crafted to achieve compliance in the most efficient manner possible. For example, for one organization it may be more efficient to isolate the data that is subject to the GDPR and implement a compliance plan only in respect of that data. In other organizations this may not be possible and compliance will need to be implemented across the board.

There are numerous similarities between PIPEDA and the GDPR, so Canadian organizations that comply with PIPEDA will have a head start towards GDPR compliance. With that said, various aspects of the GDPR have no equivalent in PIPEDA (e.g., data portability requirements, data protection officer and mandatory breach notification (which is not yet in force under PIPEDA)), and additional effort will be required in those areas.

The GDPR will impose a wide range of new obligations on many Canadian organizations. Because of the breadth of these new obligations, a compliance plan will require input and consideration from stakeholders across the organization. While May 2018 may seem like a long way out, starting this process early will allow sufficient time for organizations to craft robust and lean processes that achieve GDPR compliance without undue cost or complication.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.