Canada: Cyber Risks To Your Organization And Its Consequences

New reporting standards from the Office of the Privacy Commissioner of Canada

As technology quickly advances, different industries are finding several ways to innovate, adapt, and evolve their practices to generate larger profits, create operational efficiencies, and respond to people's needs. The unfortunate consequence of this rapid proliferation of technology is that many firms are unaware, or underprepared for the risks that technology can attract and the consequences that follow when your data is stolen.


Whether you are a Fortune 500 company, midsize enterprise, or a local retailer, your organization could be at risk from a cyber-attack. These attacks can come from systems outside your firm, or trick staff inside your organization into granting unauthorized access to your data.

Hacking is one of the most well-known cyber risks and comes from outside of your organization. Typically, one imagines someone sitting behind a black screen with lines of code in front of them furiously typing commands into their computer, but what does it do? In its simplest terms, hacking is the act of gaining access to information to which they are not authorized by accessing or exploiting a system. Once inside, a hacker has very few limits on what systems and data they can access. This unauthorized entry leaves your organization vulnerable to the hacker stealing, changing, or destroying information.

Where hacking is the equivalent of someone trying to sneak into your house to steal from you, social engineering threats are the attacks that trick you into letting them in. Socially engineered threats are even more widespread than hacking and take on various forms including:

  1. Phishing – the illegal attempt to obtain personal information such as names, addresses, social security, or banking information. Commonly phishing attacks impersonate a legitimate company and attempt to steal people's personal information or login credentials.

  2. Pretexting – an elaborate attack where attackers focus on creating a good pretext or fabricated scenario in order to steal their victim's personal information. Often the scammer pretends they need certain bits of information from the target in order to confirm their identity.

  3. Baiting – Similar to phishing, however, these attacks are distinguishable by the hackers use of an item or good that is used to entice a victim. Common examples include free music or points once you log in to a certain site.

  4. Quid Pro Quo – similar to baiting, quid pro quo attacks promise a benefit in exchange for information. This benefit usually assumes the form of a service, whereas baiting frequently takes the form of a good. A common quid pro quo attack is a fraudster who impersonates an IT service to spam direct contacts through your company directory.

  5. Tailgating – These types of attacks involve someone who lacks the proper authentication following an employee into a restricted area. A common type of tailgating attack is where a person impersonates a delivery driver and waits outside a building. When an employee gains security's approval and opens their door, the attacker asks that the employee hold the door, thereby gaining access off of someone who is authorized to enter the company.


A hack from outside or an internal data breach is not only inconvenient to fix but puts your organization at risk of great legal liability. As we progress into the digital era, invasion-of-privacy torts are developing under Canadian law. The four invasion-of-privacy based torts protect different privacy interests and include:

  1. The intrusion upon an individual's seclusion or solitude, or into his or her private affairs;
  2. The public disclosure of embarrassing private facts about an individual;
  3. The publicity that places an individual in a false light in the public eye; and
  4. The appropriation for the defendant's advantage, an individual's name or likeness.

The tort of intrusion upon seclusion is especially worrisome for organizations as it allows courts to award "symbolic damages" even when no economic loss is proven. As these torts develop, large scale data breaches are resulting in more class actions.

The case of the 2014 data breach affecting Home Depot and Home Depot Canada is an example of the risks from external hacking. During the 2014 breach, criminals hacked the payment card system at self-checkout machines with custom made malware. Although Home Depot was not found in violation of any privacy legislation by the respective provincial privacy commissioners, several Canadian class actions were started. The American settlement included a USD $13 million cash fund and 18-month subscriptions to identity-theft monitoring services. The Canadian settlement was an additional CAD $400,000 and included Home Depot's ongoing commitment to take out identity-theft protection policies for customers affected.1

More recently in another hack from 2017, cybercriminals accessed personal information through security vulnerabilities on Equifax's website. The breach resulted in names, addresses, social insurance numbers, and some credit card numbers being compromised for up to an estimated 143 million Americans and 100,000 Canadians.2

Recall, external hacks are not the only cyber-risk. American healthcare company UnityPoint Health is the target of a class action suit arising from a phishing scam that resulted in the information of at least 16,000 people being stolen. Further legal action is anticipated as another 1.4 million patient records were breached in another phishing scheme in 2018.

Of course, not all risks are malicious, an employee accidentally disclosing private information in correspondence or taking home a thumb drive with private information and losing it, is still a potential privacy breach that could result in legal action.

In addition to the risk of litigation and investigations by the Office of the Privacy Commissioner, a company that suffers a data breach must also contend with the reputational damages that follow. For publically traded companies this will often mean a short term drop in share value. In 2015, British telecommunications company TalkTalk reported a 10% decrease of its share price in the first two days following publication of a data breach and a further decline to the end of the year. When it comes to reputation overall, it seems that while a data breach may have a short-term impact the way the company handles the breach is a far greater influence than the breach itself.

Handlinga Breach

The federal privacy law, the Personal Information Protection and Electronic Documents Act ("PIPEDA") imposes strict reporting requirements.3 PIPEDA is a very broad piece of legislation that applies to all organizations (from the largest multinational conglomerate to a sole proprietorship) that collect, use, or disclose personal information in the course of commercial activities. It defines "personal information" very broadly as any factual or subjective information, recorded or not, about an identifiable individual.4

If you have reason to suspect a serious data breach, contact legal counsel right away. Under PIPEDA it is an offence to knowingly contravene the reporting, notification and record-keeping requirements relating to breaches of security safeguards; doing so could lead to prosecution by the Attorney General of Canada and hefty fines. As of November 1, 2018, organizations subject to PIPEDA are required to:

  • report to the Privacy Commissioner of Canada breaches of security safeguards involving personal information that pose a real risk of significant harm to individuals
  • notify affected individuals about those breaches that pose a real risk of significant harm, and
  • keep records of all breaches.

Counsel can assist you in determining whether the data breach is significant enough to require reporting, what to include in the report, and how to maintain adequate records. The definition of "significant harm" is new and quite broad. It includes bodily harm, humiliation, damage to reputation or relationships, loss of employment, business or professional opportunities, financial loss, identity theft, negative effects on the credit record and damage to or loss of property.

Limit Your Risk

Preventing and minimizing cyber-attacks requires good planning, effective monitoring, and comprehensive responses. Effective systems management is the first line of defence against hacking. Strong internal policies regarding email communication, USBs, work phones, and other devices/data will help protect you against socially engineered attacks or accidental disclosure. Review and update policies frequently and foster a culture of cybersecurity within your workplace.

Ultimately, in the event of a data breach, take reasonable steps to prevent further damage or remedy the breach and consult legal counsel as soon as possible to ensure that you comply with the disclosure and notification requirements set out in PIPEDA.

  1. Lozanski v The Home Depot, Inc., 2016 ONSC 5447.
  2. At the time of writing, the Equifax Canada class action has been certified but not settled.
  3. S.C. 2000, c. 5.
  4. PIPEDA in Brief - Office of the Privacy Commissioner of Canada

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

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

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions