What Is PIPEDA and How Does It Affect Your Business?

The purpose of this article is to provide an overview of Canada's PIPEDA, including its scope, requirements, exceptions, enforcement, and penalties. This article is intended to be a helpful resource for organizations seeking to comply with PIPEDA and protect the privacy of individuals whose personal information they collect, use, or disclose.

The Personal Information Protection and Electronic Documents Act (PIPEDA) is a federal law in Canada that governs the collection, use, and disclosure of personal information by organizations in the course of commercial activities. The law applies to organizations in all sectors, including private sector organizations, non-profit organizations, and federal government organizations that collect, use, or disclose personal information in the course of commercial activities.

Compliance with PIPEDA is important for organizations as it helps to protect the privacy rights of individuals and maintain their trust in organizations that collect and use their personal information. Failure to comply with PIPEDA can result in penalties and damage to an organization's reputation.

The purpose of this article is to provide an overview of PIPEDA, including its scope, requirements, exceptions, enforcement, and penalties. This article is intended to be a helpful resource for organizations seeking to comply with PIPEDA and protect the privacy of individuals whose personal information they collect, use, or disclose.

What is PIPEDA?

The Personal Information Protection and Electronic Documents Act (PIPEDA) is a federal privacy act that regulates how private-sector organizations handle personal information during commercial activities. The goal of PIPEDA is to balance the privacy rights of individuals with the legitimate needs of organizations to collect, use, and disclose personal information for reasonable purposes. PIPEDA applies to all private-sector organizations that collect, use, or disclose personal information during commercial activities, with the exception of those in Quebec, Alberta, and British Columbia, which have their own private sector privacy laws that are substantially similar to PIPEDA.

The fair information principles of PIPEDA are the foundation for the law's approach to privacy protection. These principles are based on ten internationally recognized principles for the protection of personal data, including accountability, transparency, and consent. PIPEDA requires organizations to be accountable for the personal information they collect, use, and disclose and to take appropriate measures to safeguard this information. It also requires organizations to be transparent about their privacy policies and practices and to obtain the consent of individuals before collecting, using, or disclosing their personal information.

Overall, PIPEDA provides a comprehensive framework for protecting personal information in the course of commercial activities. By following the fair information principles and guidelines for PIPEDA compliance, organizations can ensure that they are protecting the privacy rights of Canadians while still being able to carry out their legitimate business activities.

Why complying with PIPEDA standards matters

The PIPEDA compliance standards comprise ten principles that organizations are required to adhere to. These standards are objective in nature and serve as guidelines to assist businesses in meeting regulatory PIPEDA compliance requirements.

1. Accountability: Organizations are responsible for the personal information under their control and must designate an individual or individuals who are accountable for ensuring compliance with the principles.
2. Identifying purposes: Organizations must identify the purposes for collecting personal information at or before the time the information is collected.
3. Consent: Individuals must be informed of the purposes for which their personal information is being collected, and consent must be obtained before or at the time of collection.
4. Limiting data collection: Organizations must limit the collection of personal information to that which is necessary for the purposes identified and must collect information by fair and lawful means.
5. Limiting use, disclosure, and retention: Organizations must use or disclose personal information only for the purposes for which it was collected, unless the individual has consented to another use or disclosure, or when required by law. They must retain personal information only as long as necessary for the identified purposes.
6. Accuracy: Organizations must keep personal information as accurate, complete, and up-to-date as necessary for the purposes for which it is to be used.
7. Safeguards: Organizations must protect personal information against unauthorized access, disclosure, copying, use, or modification through appropriate security measures.
8. Openness: Organizations must be open about their policies and practices regarding the management of personal information and must make this information readily available to individuals.
9. Individual access: Upon request, individuals must be informed of the existence, use, and disclosure of their personal information and must be given access to that information. They must also be able to challenge the accuracy and completeness of the information and have it amended as appropriate.
10. Challenging compliance: Individuals must be able to challenge an organization's compliance with the principles of PIPEDA, and the organization must have procedures in place to address such challenges.

The guidelines described above constitute the PIPEDA framework, which applies to all companies in Canada as well as international organizations operating within the country. The only exception to this rule is businesses that are subject to compliance standards mandated by other Canadian provinces.

Who does PIPEDA apply to?

PIPEDA applies to the following:

• All private-sector organizations that collect, use, or disclose personal information during commercial activities, including businesses, non-profit organizations, and charities, with the exception of those in Quebec, Alberta, and British Columbia.
• Federally regulated organizations, such as banks, airlines, and telecommunications companies, regardless of where they are located in Canada.
• Inter-provincial providers of goods and services, such as online retailers, and transportation companies that operate in more than one province.
• Government organizations, such as federal government agencies, but only with respect to their commercial activities.

It is worth noting that PIPEDA does not apply to government organizations when they are carrying out their public functions, such as law enforcement or national security. In summary, PIPEDA applies to a wide range of organizations that collect, use, or disclose personal information during commercial activities, with the exception of those in Quebec, Alberta, and British Columbia that have their own private sector privacy laws. By following the guidelines for PIPEDA compliance, organizations can ensure that they are protecting the privacy rights of Canadians while still being able to carry out their business activities.

What is personal information under PIPEDA?

Personal information is defined broadly under PIPEDA as any information about an identifiable individual, such as their name, address, email, phone number, date of birth, social insurance number, driver's license, or blood type. PIPEDA also includes sensitive data, such as an individual's ethnic origin, social status, and personal health information.

Under PIPEDA, organizations are required to obtain an individual's consent before collecting, using, or disclosing their personal information, except in certain circumstances, such as when the information is required by law or in an emergency. Organizations must also limit the collection, use, and disclosure of personal information to what is necessary for their stated purposes and must ensure that the information is accurate, complete, and up-to-date.

Additionally, PIPEDA requires organizations to have appropriate safeguards in place to protect personal information against unauthorized access, disclosure, or retention. This includes physical, organizational, and technological security measures, such as secure storage facilities, access controls, and encryption.

Finally, individuals have the right to access their personal information held by an organization and to request that any inaccuracies be corrected. They also have the right to file a complaint with the Office of the Privacy Commissioner of Canada (OPC) if they believe that their privacy rights have been violated. In cases of a data breach, organizations are required to notify affected individuals and the OPC, and may face disciplinary actions if they are found to be non-compliant with PIPEDA.

In comparison to the European Union's General Data Protection Regulation (GDPR), PIPEDA provides similar protections for personal information, but is generally considered to be less strict in its requirements. However, as data privacy continues to be a significant privacy issue for Canadians, the OPC continues to monitor PIPEDA compliance and make recommendations for improvements to privacy legislation.

Scope of PIPEDA

Under PIPEDA, all organizations that collect, use, or disclose personal information in the course of commercial activities are required to comply with the law. This includes private sector organizations, non-profit organizations, and federal government organizations that engage in commercial activities.

PIPEDA applies to personal information, which is broadly defined as any information about an identifiable individual. This includes information such as name, address, email address, phone number, date of birth, social insurance number, financial information, and medical information.

However, PIPEDA does not apply to all personal information or all organizations. There are several exemptions to PIPEDA, including for organizations that operate solely within a province or territory with its own substantially similar privacy legislation, organizations that collect, use, or disclose personal information for journalistic, artistic, or literary purposes, and employee personal information used for employment purposes.

It is important for organizations to determine whether they are subject to PIPEDA and, if so, to ensure they comply with the requirements of the law. Failure to comply with PIPEDA can result in penalties, damage to an organization's reputation, and loss of consumer trust.

Provincial laws and compliance with PIPEDA

While PIPEDA is a federal privacy act that applies across Canada, some provinces have their own privacy laws that govern the collection, use, and disclosure of personal information by organizations within their jurisdiction. These laws may be similar to PIPEDA or may have different requirements.

Quebec, British Columbia, and Alberta are examples of provinces that have their own private-sector privacy laws. Organizations that operate solely within these provinces may be subject to the provincial laws instead of PIPEDA. However, if an organization operates in multiple provinces or territories, it may still need to comply with PIPEDA.

In Ontario, while PIPEDA applies to most private-sector organizations, the province also has its own privacy legislation, the Personal Health Information Protection Act, which applies to personal health information collected, used, or disclosed by health information custodians in the province

New Brunswick, Nova Scotia, Newfoundland and Labrador do not have private-sector privacy laws, but have adopted substantially similar legislation regarding the collection, use and disclosure of personal health information. Organizations in these provinces must still comply with PIPEDA.

The Office of the Privacy Commissioner of Canada (OPC) is responsible for overseeing compliance with PIPEDA and ensuring that individuals' privacy rights are protected. The OPC investigates complaints about privacy issues and has the power to take enforcement action against organizations that violate PIPEDA.

Under PIPEDA, individuals have the right to access their personal information held by an organization and to request that it be corrected if it is inaccurate. Organizations must also limit the collection, use, and disclosure of personal information to only what is necessary for the purposes identified, and must protect personal information with appropriate security measures. Organizations must obtain meaningful consent of the individual before collecting, using, or disclosing personal information, and must retain personal information only as long as necessary.

Federally-regulated organizations, such as banks, telecommunications providers, and airlines, are subject to PIPEDA and may also be subject to additional regulations. The GDPR, or General Data Protection Regulation, is a privacy law that applies to organizations in the European Union, as well as to some organizations outside the EU that collect or process the personal data of individuals in the EU.

To ensure an organization's compliance with PIPEDA, it may appoint a privacy officer to oversee the organization's privacy practices and ensure that they are in line with PIPEDA and other applicable privacy laws. Organizations should also regularly review their privacy policies and practices to ensure that they are up-to-date and in compliance with the law. By doing so, organizations can protect the privacy and personal data of individuals and avoid penalties for non-compliance.

Requirements under PIPEDA

Under the Personal Information Protection and Electronic Documents Act (PIPEDA), organizations must comply with various requirements when collecting, using, and disclosing personal information. These requirements include:

1. Obtaining Consent: Before an organization collects, uses, or discloses an individual's personal information, they must obtain meaningful consent from the individual. The individual must also be informed of the purpose for which their information is being collected, used, or disclosed.
2. Limiting Use, Collection, and Disclosure: Organizations must limit the collection, use, and disclosure of personal information to only that which is necessary for the identified purposes. Any new purposes for which the information will be used must also require consent.
3. Ensuring Accuracy: Organizations must take reasonable steps to ensure that personal information is accurate, complete, and up-to-date.
4. Retention: Organizations must only retain personal information for as long as necessary to fulfill the identified purposes.
5. Safeguarding Personal Information: Organizations must implement appropriate security safeguards, such as physical, organizational, and technological measures, to protect personal information from unauthorized access.
6. Providing Access: Upon request, organizations must inform individuals about the existence, use, and disclosure of their personal information and provide them with access to that information.
7. Allowing Individuals to Challenge: Individuals have the right to challenge the accuracy and completeness of their personal information and request that it be amended if necessary.
8. Sensitivity of the Information: Organizations must recognize the sensitivity of certain types of information, such as personal health information, and provide additional protection as required.
9. Responding to Inquiries and Complaints: Organizations must respond to inquiries and complaints about their privacy practices in a timely and appropriate manner.

Failure to comply with these requirements can result in penalties, damage to an organization's reputation, and loss of consumer trust. In severe cases, individuals may take legal action against organizations, and federal courts can order remedies for significant harm caused by unauthorized access to personal information.

Exceptions to PIPEDA requirements

While PIPEDA outlines many requirements that organizations must follow to protect individuals' personal information, there are some exceptions to these requirements. In certain circumstances, personal information can be collected, used, or disclosed without the individual's consent.

• Personal information collected, used, or disclosed for journalistic, artistic, or literary purposes.
• Personal information collected, used, or disclosed for purposes related to national security, defense, or public safety.
• Personal information collected from an individual as part of their employment application or employment relationship.
• Medical information and financial information may be subject to additional regulations or exemptions under other legislation.

It is important for organizations to note that these exceptions are not absolute, and they must still ensure that they are taking appropriate measures to safeguard the personal information and only collecting, using, or disclosing personal information to the extent necessary to achieve the specified purpose.

Organizations should also be aware that certain types of personal information may be subject to special considerations and exemptions under PIPEDA. For example, the collection, use, or disclosure of sensitive personal information, such as medical or financial information, may be subject to additional requirements and restrictions.

In addition, organizations must ensure that they are complying with any applicable provincial laws related to personal information protection. Provinces such as Quebec, British Columbia, and Alberta have their own private-sector privacy laws, which may have different requirements and exemptions than PIPEDA.

Enforcement and penalties

The Privacy Commissioner of Canada (OPC) is responsible for enforcing PIPEDA and ensuring that organizations comply with its requirements. The Commissioner has the power to investigate complaints made by individuals or conduct investigations on its own initiative. In addition, the Commissioner can make recommendations to organizations and issue orders to ensure compliance with PIPEDA.

Failure to comply with PIPEDA can result in significant penalties for organizations. For example, organizations that violate PIPEDA can be subject to fines of up to $100,000 CAD for each violation. In addition, individuals affected by a violation of PIPEDA may also be entitled to damages for any harm suffered as a result of the violation.

There have been numerous examples of organizations penalized for non-compliance with PIPEDA. In one high-profile case, a major Canadian telecommunications company was fined $100,000 CAD after the Privacy Commissioner found that it had failed to adequately protect the personal information of its customers.

It is important for organizations to take PIPEDA compliance seriously in order to avoid penalties and maintain the trust of their customers. Organizations should establish clear policies and procedures for protecting personal information, ensure that employees are trained on PIPEDA requirements, and regularly review and update their privacy practices to ensure compliance with any changes to the law.

Final thoughts

Complying with PIPEDA is essential for any organization that collects, uses, or discloses personal information in Canada. Organizations must obtain consent, limit the collection, use, and disclosure of personal information, ensure its accuracy, safeguard it, provide access to it, and respond to inquiries and complaints about privacy practices. While there are exceptions to PIPEDA requirements, they are limited, and organizations must ensure that any collection, use, or disclosure of personal information falls within those exceptions. The Privacy Commissioner of Canada plays a significant role in enforcing PIPEDA, and organizations can face significant penalties for non-compliance. It is vital for organizations to stay up-to-date with changes to PIPEDA requirements to ensure ongoing compliance. There are resources available to help organizations ensure compliance, including the Privacy Commissioner's website and consulting with privacy experts. By complying with PIPEDA, organizations can protect individuals' privacy and maintain trust in their operations.