Canada: Federal Data Breach Reporting Regulations Published – Take Effect November 2018

The final Breach of Security Safeguards Regulations (Regulations) under the federal Personal Information Protection and Electronic Documents Act (PIPEDA) were made on March 26, 2018, and published on April 18, 2018. The Regulations set out prescribed requirements for mandatory breach reporting, which will come into force on November 1, 2018.

BACKGROUND

In 2015, amendments to PIPEDA (in the Digital Privacy Act) introduced provisions that created a federal mandatory breach reporting regime for Canada's private sector. However, the coming into force date for these provisions was delayed pending regulations setting out prescribed requirements. Draft regulations were published for public comment in September of 2017. The final Regulations were published on April 18, 2018 and are substantially similar to the draft regulations. For further information, please see our previous Blakes Bulletins: Cybersecurity Data Breaches and Mandatory Privacy Breach Reporting: Lessons from Alberta, One Step Closer to Mandatory Breach Reporting Across Canada: Consultations Open and Digital Privacy Act Receives Royal Assent, but Breach Notification Provisions Lag Behind.

BREACH REPORTING REQUIREMENTS

PIPEDA requires an organization that experiences a "breach of security safeguards" involving personal information under the organization's control, where it is reasonable in the circumstances to believe that the breach poses a "real risk of significant harm" to affected individuals, to:

  1. Report the breach to the Privacy Commissioner of Canada (Commissioner)
  2. Notify affected individuals
  3. Notify government institutions, parts of government institutions or other organizations if the organization believes that the institution (or part thereof) or other organization may be able to reduce or mitigate the risk of harm to the affected individuals.

PIPEDA also requires organizations to keep and maintain a record of all breaches of security safeguards under the organization's control, even those that do not meet the harm threshold for reporting.

An organization that knowingly fails to report or maintain records of a breach as required by PIPEDA will be guilty of an offence punishable by fines of up to C$100,000.

PIPEDA defines a "breach of security safeguards" as the loss of, or unauthorized access to – or disclosure of – personal information resulting from a breach of an organization's personal information security safeguards or from a failure to establish those safeguards.

The "real risk of significant harm" threshold for reporting is the same as is currently in place under the Alberta Personal Information Protection Act (Alberta PIPA), the only province that already requires reporting of private sector data breaches outside the healthcare context. PIPEDA sets out a non-exhaustive list of harms that constitute "significant harm", including bodily harm, humiliation, damage to reputation or relationships, loss of employment, business or professional opportunities, financial loss, identity theft, negative effects on credit record and damage to, or loss of, property. It also sets out a non-exhaustive list of factors that are relevant to the real risk of significant harm assessment, including the sensitivity of the personal information involved and the probability that the personal information has been, is being or will be misused. While these harms and risk assessment factors are not specifically set out in the Alberta PIPA, they are consistent with guidance issued by the Information and Privacy Commissioner of Alberta (Alberta IPC).

At the same time, the Alberta IPC's interpretation of "real risk of significant harm" has been criticized for going beyond the statutory interpretation rule of reading those words "in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament" (Rizzo & Rizzo Shoes Ltd. (Re)). As a result, while Alberta precedents will be relevant, we expect that they will not automatically be followed by the federal Commissioner.

It should also be noted that in contrast with many U.S. breach reporting requirements, the definition of "personal information" in PIPEDA is very broad, and the Canadian definition of harm encompasses non-economic harm.

Report to the Commissioner

PIPEDA specifies that the report to the Commissioner must be made as soon as feasible after the organization determines that the breach has occurred. The Regulations set out the form and manner in which the report must be made, as well as the information that must be included in the report.

In particular, the Regulations require that the report be made in writing, that it be submitted to the Commissioner via any secure means of communication, and that it contain the following information:

  • A description of the circumstances of the breach and, if known, the cause
  • The day on which, or the period during which, the breach occurred or, if neither is known, the approximate period
  • A description of the personal information that is the subject of the breach to the extent that the information is known
  • The number of individuals affected by the breach or, if unknown, the approximate number
  • A description of the steps that the organization has taken to reduce the risk of harm to affected individuals that could result from the breach or to mitigate that harm
  • A description of the steps that the organization has taken or intends to take to notify affected individuals of the breach in accordance with the Act
  • The name and contact information of a person who can answer, on behalf of the organization, the Commissioner's questions about the breach.

The Regulations contemplate that an organization may not have complete information at the time a report is made, and specifically allow an organization to submit new information to the Commissioner after the initial report has been submitted. This is an important improvement over the draft regulations, since organizations often do not have complete information at the time the report is required to be submitted. The final Regulations also refer to harm "that could result from the breach" rather than harm "resulting from the breach" (the language in the draft regulations). The final wording is more practical than the prior language, as potential harms will often be speculative at the time the breach is first discovered and may never materialize.

The information to be included in a report aligns closely to what is currently required in Alberta, with a few notable differences. For example, the Regulations require that the cause of the breach, if known, be reported to the Commissioner, whereas this information is not required to be included in a report to the Alberta IPC. On the other hand, a report to the Alberta IPC is required to include an assessment of the risk of harm to affected individuals, and this extremely difficult assessment is not required in a report to the Commissioner.

Notice to Affected Individuals

PIPEDA requires that notice be conspicuous and that it be provided to affected individuals directly (except in prescribed circumstances) and as soon as feasible after the organization determines that the breach has occurred. The Act also requires that the notice contain sufficient information to allow the individual to understand the significance to them of the breach and to take steps, where possible, to reduce the risk of harm or mitigate the harm. The Regulations set out the form and manner in which direct notice must be provided, the circumstances and manner in which indirect notice may be provided, and the information that must be included in the notice.

In particular, the Regulations require that the following information be included in the notice:

  • A description of the circumstances of the breach
  • The day on which, or the period during which, the breach occurred or, if neither is known, the approximate period
  • A description of the personal information that is the subject of the breach to the extent that the information is known
  • A description of the steps that the organization has taken to reduce the risk of harm to affected individuals that could result from the breach or to mitigate that harm
  • A description of the steps that affected individuals could take to reduce the risk of harm that could result from the breach or to mitigate that harm
  • Contact information that the affected individual can use to obtain further information about the breach.

Direct notice may be given in person, by telephone, mail, email or any other form of communication that a reasonable person would consider appropriate in the circumstances. This degree of flexibility is important as it will allow for non-traditional communication when an organization does not have traditional contact information for affected individuals.

Indirect notice is required if direct notice would be likely to cause further harm to the affected individual, undue hardship for the organization, or the organization does not have contact information for the affected individual. Indirect notice must be given by public communication or similar measure that could reasonably be expected to reach the affected individuals.

These notice requirements are similar to the notice requirements in Alberta. One important distinction is that the Alberta IPC has the power to order an organization to notify affected individuals, whereas PIPEDA does not grant the Commissioner order-making powers. The Alberta PIPA is also less prescriptive in terms of the form and manner in which notice must be given.

Record Keeping

PIPEDA requires that organizations keep and maintain records of all breaches of security safeguards, including those that do not meet the harm threshold for reporting and notification. These records must be provided to the Commissioner upon request. The Regulations clarify that the records must be maintained for 24 months from the day that the organization determined that the breach occurred, and that they contain sufficient information to enable the Commissioner to verify compliance with the breach reporting provisions of the Act.

The requirement to keep and maintain records of all breaches (which is not a requirement under the Alberta PIPA) is perhaps one of the most challenging aspects of PIPEDA's breach reporting regime and will require organizations to implement policies and procedures to ensure that all breaches (regardless of the significance) are reported and recorded in a consistent and centralized manner.

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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