In our increasingly digital era, protecting personal data against hacking, misuse, and breaches is more critical than ever. In fact, according to UNCTD 137 out of 194 countries have enacted laws for data protection and privacy. Among these regulations, Canada’s PIPEDA stands out as a pivotal law for protecting personal details. What does this law truly entail and how is it shaping the business of companies? Today, we are diving into the intricacies of PIPEDA with the guidance of Elinext’s experts.
PIPEDA in brief: What is it and who adopted it?
PIPEDA, short for the Personal Information Protection and Electronic Documents Act, is a Canadian law governing the handling of a consumer’s private details. This act outlines the methods private-sector entities should employ to gather, utilize, and share personal information in commercial activities. Furthermore, it encompasses several clauses addressing the management of electronic documents.
The law was adopted by the Office of the Privacy Commissioner of Canada (OPC) in 2000 to enhance consumer trust in eCommerce while also convincing the EU that Canadian legislation is suitable for protecting the personal information of European Union citizens. According to Section 29 of the Act, Part I (“Protection of Personal Information in the Private Sector”) must be reviewed by the Canadian Parliament every five years.
Therefore, besides the protection of personal information and individual rights, PIPEDA is important because it aligns with GDPR standards. This means that data exchange between Canadian enterprises and the EU can be carried out without being burdened by standard contractual clauses.
How PIPEDA is enforced?
PIPEDA authorizes the OPC to conduct privacy audits of businesses, but only when the OPC has reasonable grounds to believe that the business is not in compliance with PIPEDA requirements. During these inspections, security controls used to protect personal information may be reviewed, as well as existing policies, procedures, and methods, and how the organization handles privacy-related incidents.
What companies and organizations are subject to PIPEDA?
Any private enterprise in Canada that collects personal information in the course of commercial activities falls under PIPEDA:
- Private enterprises handling their clients’ data;
- Federally regulated entities, including airports, airlines, banks, both domestic and international transport firms, offshore drilling entities, broadcast and radio outlets, and telecom businesses.
PIPEDA also applies to companies operating within its jurisdiction, regardless of where the company is based. This means PIPEDA applies to non-Canadian enterprises that collaborate with Canadian clients.
Who is exempt from PIPEDA?
Some Canadian provinces are exempt from PIPEDA, as they have privacy laws substantially similar to PIPEDA’s regulations. Alberta and British Columbia, for instance, have PIPA (Personal Information Protection Act), and Quebec has an act regarding the protection of personal information in the private sector.
Medical service providers in some provinces like Ontario, New Brunswick, Nova Scotia, and more also follow laws that supersede PIPEDA concerning medical data.
What personal data does PIPEDA protect?
According to PIPEDA, personal data is ”any information about an identifiable individual”. Essentially, this refers to information collected during business operations, including:
- details like age, name, ID numbers, earnings, ethnicity, or blood group;
- feedback, assessments, remarks, societal standing, or punitive measures;
- personal employee documents, financial histories, lending logs, health records, or records of disagreements between a buyer and a seller.
Some personal information isn’t covered by PIPEDA’s rules:
- professional contact information (such as name, title, email, organization address, work phone, etc.) intended strictly for work-related communication;
- data gathered only for personal reasons (like a personal card list) or specific intents (like buying products or switching professions);
- information gathered exclusively for literary, journalistic, or artistic endeavors.
What are the key law provisions?
Under PIPEDA, organizations must:
- secure consent before gathering, utilizing, or revealing personal details;
- offer a product or service to a consumer, even if they decline consent for data collection, usage, or sharing, as long as the information isn’t crucial for the transaction;
- gather data ethically and legitimately;
- maintain a transparent and easily accessible policy for personal information protection.
As for data owners, PIPEDA grants the right to access and view personal data upon request, edit and partially delete personal data, withdraw consent, and file complaints.
Can you elaborate on the compliance requirements for software under PIPEDA?
According to the OPC, before collecting, processing, and transmitting personal information, the user must give their consent when personal information is confidential. Consent must also be obtained in cases where the intended use of personal information might go beyond the reasonable expectations of individuals: actions such as information sharing for marketing purposes, accessing contact lists, or location tracking. Moreover, such consent can only be requested when necessary for the software and should not be requested during installation or account setup.
Consent should also be obtained when software involves direct marketing using electronic means (e.g., email). If consent is not obtained, sending direct marketing related to an individual’s specific business or interests is prohibited. If an individual does not give consent or the law does not require it, personal information may only be used or disclosed for the purposes for which it was collected. Personal information should only be kept as long as necessary to achieve these purposes.
The following information must always be publicly available:
- the specific personal data being gathered;
- the reasons for gathering, utilizing, and exchanging such information;
- potential recipients of the collected personal details;
- notable risks or threats potentially linked to the data collection.
According to PIPEDA, it’s recommended to use step-by-step instructions, videos, and infographics to explain software privacy settings to the user.
Data Safeguarding: It’s essential to implement stringent security protocols to keep users’ personal data safe from potential threats, including unauthorized access, alterations, and theft.
Breach Notification: If a data breach occurs, organizations must promptly alert the OPC and relevant entities, such as law enforcement or financial processors. It’s crucial to inform these parties swiftly once a breach is identified. Additionally, every data breach involving personal details should be recorded.
Designated Privacy Contact: Under PIPEDA, organizations are mandated to designate a Data Protection Officer (DPO). This individual liaises with the OPC and ensures adherence to PIPEDA guidelines. Details of the DPO, including their name and contact information, should be easily accessible for inquiries.
What are the fines and punishment for non-compliance with PIPEDA requirements?
PIPEDA imposes administrative fines for non-compliance, the amount of which can vary depending on the severity and type of violation. Under PIPEDA, these actions are recognized as violations:
- hindering the OPC during an investigation.
- failing to report personal information-related security breaches within the organization’s purview.
- not maintaining records of security breaches concerning personal information under the organization’s oversight.
- taking retaliatory actions against a whistleblower.
Violations tried on a summary conviction can result in penalties of up to 10,000 Canadian dollars. If the offense is indictable, the fine can go up to 100,000 Canadian dollars.
Organization owners are ultimately responsible for ensuring compliance. However, when software is being developed with PIPEDA requirements in mind, vendors must know and adhere to PIPEDA’s regulations during the development process.
The bottom line
In the age of rapid digitization, the safety of personal data is a paramount concern for businesses, individuals, and governments alike. With the majority of the countries acknowledging this pivotal issue, Canada’s PIPEDA emerges as a robust framework, ensuring that personal information is treated with utmost care and integrity.
At Elinext, we always go above and beyond to provide solutions that not only support our clients in reaching their business objectives but also adhere to relevant laws and standards, which bolsters our clients’ reputation as dependable and trustworthy partners.
