Personal Information Protection and Electronic Documents Act

The Personal Information Protection and Electronic Documents Act emerged out of a growing awareness of the privacy vulnerabilities that accompany the digital age. As commerce shifted increasingly online, the potential for misuse or mishandling of personal data surged.

PIPEDA aims to create a structured environment where personal data is not only secure but also managed in a way that respects individual privacy rights. It outlines the responsibilities businesses have toward the consumer and enforces penalties for failure to comply.

If your activities involve collecting data from Canadian citizens, whether you operate in Canada or not, PIPEDA applies to you. In this guide, we will further explore the genesis and primary goals of PIPEDA, as well as its broader implications for data privacy obligations outside of Canada.

What Is the Personal Information Protection and Electronic Documents Act (PIPEDA)?

The Personal Information Protection and Electronic Documents Act (PIPEDA)is Canada’s data privacy law designed to regulate how private-sector organizations and businesses handle personal information.

Essentially, PIPEDA requires these private organizations to obtain consent for collecting, using, or disclosing personal data, ensuring data accuracy, and safeguarding it.

PIPEDA was enacted on April 13, 2000, to address the growing concerns to protect personal information in the digital age.

At its core, PIPEDA aims to ensure that businesses follow the 10 fair information principles. They’re like the 10 commandments of data handling outlined by PIPEDA.

They cover everything from accountability and gaining consent, to security measures and individual access. PIPEDA strongly advocates for these principles to help build trust in your business and in the digital economy.

Like the European Union’s General Data Protection Regulation (GDPR), under PIPEDA, individuals also have the right to access their information, request corrections, file complaints, and withdraw their consent.

It’s important to note that some Canadian provinces also have similar privacy laws like British Columbia and Quebec that may exempt organizations from PIPEDA if they operate within those provinces.

Violation of PIPEDA may result in legal action initiated either by individuals or the Office of the Privacy Commissioner of Canada.

What Are the General Definitions of PIPEDA?

The following section provides an overview of key definitions and components related to PIPEDA. Understanding these basic terms and principles is necessary for both businesses and individuals to ensure compliance with the law and safeguard personal privacy.

What Is Personal Information Under PIPEDA?

In the context of PIPEDA, personal information is described as data about an “identifiable individual”. This information, either by itself or when combined with other details, has the potential to pinpoint you as a specific person, including:

What Is Not Considered Personal Information Under PIPEDA?

While it’s important to know what’s considered personal information under PIPEDA, it’s equally important to know which information falls outside its coverage.

Data not considered as personal information under PIPEDA includes:

Who Does PIPEDA Apply To?

PIPEDA plays a substantial role in governing how businesses in Canada manage personal information to protect the privacy of individuals. Let’s explore precisely which entities are covered in PIPEDA and whether or not these rules and regulations apply to you.

1. Private Sector Organizations

PIPEDA mainly targets businesses in the private sector engaging in commercial activities. If you’re running a company that aims to make a profit, whether you’re a small boutique in Ontario, a tech startup in Saskatchewan, or a service provider in the Northwest Territories, PIPEDA applies to how you manage personal information.

2. Federally-Regulated Organizations

Some businesses are always subject to PIPEDA, no matter where they’re located. This includes big players regulated by the federal government like banks, airlines, and telecom companies.

If you’re in these sectors and doing business in Canada, PIPEDA is a law you must comply with.

3. Certain Canadian Provinces and Territories

PIPEDA generally covers most provinces and territories in Canada, including:

• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Nova Scotia
• Nunavut
• Ontario
• Prince Edward Island
• Saskatchewan
• Yukon

If your business operates in these regions and deals with personal information, PIPEDA certainly applies.

Some provinces have their own privacy rules that are very similar to PIPEDA and may override it under certain circumstances.

So, if you’re in one of these provinces, their rules usually take precedence over PIPEDA. However, if your business operates nationally and personal info crosses borders, PIPEDA still has a say.

4. International Businesses With Meaningful Links to Canada

PIPEDA’s reach extends beyond Canada’s borders and can affect organizations regardless of their geographical location in the world.

In simpler terms, PIPEDA still applies to businesses even outside of Canada. This is due to a legal precedent established by the Canadian court, which stipulates that PIPEDA can apply to activities with a “real and substantial” connection to Canada.

Several factors help determine whether a business possesses this substantial connection to Canada. It includes considerations such as:

In a nutshell, PIPEDA covers most private businesses in Canada, but it’s important to consider your location, your sector, and whether you’re dealing with personal info that travels across borders or falls under other specific regulations.

Who Is Exempted From PIPEDA?

PIPEDA doesn’t apply to everyone. Understanding who falls outside its boundaries is equally important.

After all, you don’t want to start attempting to conform to regulations that don’t apply to your business. Here’s a closer look at who PIPEDA typically does not apply to.

1. Non-Profit and Charity Organizations 

PIPEDA is primarily aimed at businesses engaged in for-profit, commercial activities. If you’re running a non-profit organization or a charity group with no profit motive, PIPEDA is not typically something you need to worry about.

2. Political Parties and Associations

Similarly, political parties and associations are usually not directly governed by PIPEDA. Their primary activities often involve political advocacy, which doesn’t fall under the scope of commercial, for-profit actions that PIPEDA regulates.

3. Certain Canadian Provinces

When it comes to regions within Canada, there are certain provinces that may be exempt from PIPEDA.

Why? Because these provinces have privacy laws that are deemed substantially similar to PIPEDA, and they may take precedence.

In certain provinces, this situation applies specifically to the disclosure of personal health information retained by health information custodians under the respective health sector privacy laws of those provinces.

These seven provinces have privacy laws that closely mirror PIPEDA:

So, if your business operates solely within these provinces, you’ll follow their rules instead.

You should be aware, however, that there is great emphasis on the phrase “solely within”.

The catch here is that even in these provinces, PIPEDA can still apply under certain circumstances.

If your organization engages in commercial activities that involve personal information crossing provincial or national borders, PIPEDA must be applied.

Also, if you’re a federally-regulated business, like a bank or a telecom company, located in these provinces, you’re still subject to PIPEDA.

PRO TIP: Always keep in mind that context matters, and PIPEDA’s applicability can change depending on the nature of your activities and where personal information flows.

The 10 Principles of the PIPEDA

The 10 fundamental principles of PIPEDA, known as the Fair Information Principles, represent the foundation on which PIPEDA was built.

To ensure compliance with PIPEDA, your organization or business must adhere to these 10 fair information principles that set the guidelines for the collection and management of personal information.

1. Accountability

Every organization is responsible for the personal information it handles. This means appointing someone within the organization who’s responsible for making sure PIPEDA’s rules are followed.

Think of it as having a privacy guardian in your business.

2. Identifying Purposes

Before or during the time the information is collected, your organization needs to be crystal clear about why it’s gathering this data.

3. Consent

Personal information can’t be collected, used, or shared without the consent of the person it belongs to, except in certain situations where it wouldn’t make sense to ask for consent.

 4. Limiting Collection

The collection of personal information should only be restricted to what is necessary for the purposes identified by the organization. More importantly, information must be collected through fair and lawful means.

 5. Limiting Use, Disclosure, and Retention

Unless otherwise approved by the individual or mandated by law, personal information may solely be utilized or revealed for the purposes for which it was initially gathered. Furthermore, this data should only be retained for as long as necessary to fulfill those specific purposes.

Once you have gathered personal information, you can only use it for the purposes for which personal information was gathered in the first place.

6. Accuracy

Personal information that is collected should be kept as accurate, complete, and up-to-date as possible to serve its intended purposes effectively.

7. Safeguards

Make sure to provide necessary protection relative to the sensitivity of the personal information.

 8. Openness

An organization is obligated to provide comprehensive details about its policies and procedures regarding the handling of personal information, making this information easily accessible to the public.

9. Individual Access

Upon request, an individual should receive information regarding the existence, utilization, and disclosure of their personal information, along with access to this data. Furthermore, they should have the opportunity to contest the accuracy and completeness of the information, allowing for appropriate amendments when necessary.

10. Challenging Compliance

If someone thinks you’re not following these principles, they should be able to voice their concerns. Think of it as a way to make sure everyone’s on the same page.

In addition to these principles, PIPEDA includes a critical guideline: Any collection, use, or sharing of personal information must align with what an ordinary person would see as reasonable in a given situation.

The Office of the Privacy Commissioner (OPC) has identified specific scenarios that most people would agree are not reasonable or appropriate. These are often referred to as “no-go zones”. They include:

What Are the Data Subject Rights Under PIPEDA?

PIPEDA grants the following rights to Canadian consumers:

 1. Right to Access

Under PIPEDA, individuals have the right to access personal information collected and held by your business. They can request to know what data you have about them, and you must provide this information in a clear and understandable manner.

This right promotes transparency and allows individuals to verify the accuracy of their data.

2. Right to Accuracy and Completeness

Data accuracy is paramount. Data subjects have the right to request corrections to the personal information held by your business if it’s incomplete or inaccurate.

As a responsible business owner, you must promptly address these requests to ensure the reliability of the data you hold.

3. Right to Withdraw Consent and Submit Complaints

Consent forms the foundation of data collection under PIPEDA. Individuals have the right to withdraw their consent at any time.

If they choose to do so, you must cease using their information, respecting their decision. Additionally, data subjects have the right to submit complaints if they believe your business has mishandled their personal information.

Having a clear process for addressing such complaints is essential.

PRO TIP: Understanding these data subject rights is essential for small business owners. It not only ensures compliance with PIPEDA but also demonstrates your commitment to information privacy and customer trust.

How Can Businesses Comply With PIPEDA?

To help you streamline the process, here’s a specific and actionable breakdown of how your business can comply with PIPEDA:

1. Designate a Privacy Officer and Share Their Contact Information

Every organization subject to PIPEDA must appoint a Privacy Officer responsible for compliance with the Act. It’s vital to make this person’s contact information readily available on your website and ensure that your customer service team knows how to direct inquiries to them.

2. Educate Your Staff on Privacy

Provide basic training on privacy protection responsibilities to your staff, especially those dealing with customer interactions and data handling.

3. Take Accountability for Employee Actions

Understand that employee errors, intentional or accidental, cannot be used as excuses for PIPEDA violations.

Alongside privacy-sensitive policies, implement safeguards such as staff training, consequences for policy violations, limited access to personal information for employees, and protections against mass copying of data to portable devices, if necessary.

4. Limit Personal Information Collection

PIPEDA requires businesses to collect the minimum amount of personal information necessary for the intended purpose and to clearly communicate this purpose to customers.

If you wish to collect information beyond the primary purpose, make it optional or seek consent, especially for secondary purposes like marketing.

5. Make Sensitive Optional

Clearly convey, through forms and staff training, that customers are not obligated to provide certain sensitive information such as their Social Insurance Numbers unless legally required.

6. Create a Clear Privacy Policy

Take the time to create a comprehensive privacy policy that clearly outlines what data you collect, the purpose behind it, how you use it, and who you share it with. More and more people these days want to know how their data is being used so be open about it.

7. Inform Customers About Video Surveillance

Even if you do not retain surveillance footage, using video surveillance constitutes the collection of personal information.

Use it only when genuinely needed, post visible signs to notify people of surveillance, and provide contact information for questions or complaints.

8. Safeguard Personal Information

Use safeguards appropriate to the sensitivity of personal information. Exercise extra caution with health and financial data and avoid collecting unnecessary information.

If you must retain it, ensure it’s securely stored, and consider encryption for devices containing personal information.

9. Respond to Access Requests

Customers have the right to access their personal information related to them within 30 days and at a minimal cost. This includes written data, as well as audio and video records. Protect third-party personal information and be aware of exceptions to the right of access.

9. Transparent Information Collection

Be transparent about the collection and use of personal information. If you cannot provide a clear explanation for requesting specific personal information, customers may question your practices.

10. Obtain Meaningful Consent at All Times:

Meaningful consent lies at the heart of Canadian private-sector privacy legislation. Here is an outline of practical steps to ensure that organizations obtain meaningful consent, promoting transparency and user understanding.

What Is Considered a Data Breach Under PIPEDA?

As of November 1, 2018, PIPEDA introduced new provisions and corresponding regulations concerning breach of security safeguards.

A data breach, as defined by PIPEDA, encompasses scenarios involving the loss, unauthorized access, or unauthorized disclosure of personal information resulting from the failure of security safeguards or the absence of such safeguards.

This definition applies universally, covering businesses of all sizes, including small enterprises. Under these new amendments, organizations must adhere to several essential requirements:

The Office of the Privacy Commissioner defines “harm” as a broad range of consequences, including bodily harm, humiliation, damage to reputation or relationships, loss of employment or business opportunities, financial loss, identity theft, negative credit effects, and damage or loss of property.

The assessment of a “risk of significant harm” takes into account factors such as the sensitivity of the breached personal information, the likelihood of its misuse, and other relevant considerations outlined in PIPEDA.

While PIPEDA doesn’t prescribe specific safeguards, it emphasizes the organization’s responsibility to adequately protect personal information.

PRO TIP: This protection often involves measures like robust password policies, encryption, and other security practices that prevent unauthorized access, disclosure, copying, use, or modification of personal data.

Who Enforces PIPEDA?

The primary authority responsible for enforcing PIPEDA is the Office of the Privacy Commissioner of Canada (OPC).

The OPC is an independent oversight agency that reports to Canada’s Parliament. It is tasked with ensuring that PIPEDA is upheld and that organizations subject to the law follow its principles and requirements.

The OPC operates from its headquarters in Gatineau, Quebec, and maintains a regional office in Toronto, Ontario, primarily focused on ensuring compliance with PIPEDA within the private sector and protecting the personal information of its citizens.

Established in 1983 in response to the Privacy Act, the OPC’s responsibilities were subsequently broadened in 2001 to encompass private sector businesses under PIPEDA.

The OPC’s mandate extends to the oversight of compliance with both the Privacy Act and PIPEDA, encompassing federal government entities and private sector organizations.

The OPC executes its mission to protect and promote the privacy rights of individuals through several strategic measures such as investigation and legal action, transparent reporting, research and knowledge sharing, and promoting privacy awareness.

Through these enforcement actions and initiatives, the OPC upholds privacy protection as a cornerstone of Canadian society.

What Are the Penalties for Violating PIPEDA?

Compliance with PIPEDA is not optional, and there are penalties in place for organizations that fail to meet its requirements. Understanding these penalties is essential for organizations operating within the scope of PIPEDA to ensure they adhere to the law and protect individuals’ privacy.

1. Investigations and Audits

In cases where an organization is suspected of non-compliance, the OPC may initiate investigations or audits. These procedures aim to assess whether an organization is following PIPEDA’s privacy principles.

The Privacy Commissioner of Canada also has the authority to compel organizations to undergo audits if there are reasonable grounds to believe they are not complying with the law. Organizations subject to such audits must cooperate fully.

2. Voluntary Compliance Agreements

In cases where an investigation or audit reveals non-compliance, the OPC may seek a voluntary compliance agreement with the organization. This agreement outlines the actions the organization must take to remedy the situation and achieve compliance with PIPEDA.

3. Court Orders

If an organization refuses to comply with the OPC’s recommendations or the voluntary compliance agreement, the Privacy Commissioner can apply to the Federal Court of Canada for an order compelling compliance. The court has the authority to issue these orders under PIPEDA.

4. Public Reporting and Reputation Damage

PIPEDA empowers the Privacy Commissioner to publicly report on non-compliant organizations, which can result in significant reputational damage. Organizations found to be in violation may experience a loss of trust among customers, partners, and stakeholders.

5. Fines and Penalties

Unlike some other privacy laws in various jurisdictions, PIPEDA does not have a comprehensive system of financial penalties for non-compliance. However, recent amendments to PIPEDA have introduced a potentially significant change in this regard.

As of November 1, 2018, organizations that violate PIPEDA may face fines of up to $100,000.

6. Civil Lawsuits

Individuals who believe their privacy rights have been violated can file civil lawsuits against organizations under PIPEDA. These lawsuits can result in monetary damages awarded to the affected individuals.

In cases of widespread privacy breaches affecting multiple individuals, class-action lawsuits may be initiated. These suits can lead to substantial financial liabilities for organizations found to be at fault.

7. Impact on Business Operations

Dealing with investigations, audits, legal actions, and reputational damage can be disruptive to an organization’s operations. It can consume valuable time and resources that could be better allocated elsewhere.

Non-compliance with privacy laws like PIPEDA can also lead to the loss of customers, business partners, and opportunities, as organizations that prioritize privacy compliance may choose not to engage with non-compliant entities.

8. Ongoing Compliance Obligations

Even after a violation has been addressed, organizations must take corrective action and implement remediation measures to ensure ongoing compliance with PIPEDA.

Organizations subject to compliance agreements may also require ongoing monitoring and reporting to demonstrate their adherence to PIPEDA.

The penalties for violating PIPEDA can have significant legal, financial, and reputational consequences for organizations. While the financial penalties under PIPEDA may not be as substantial as in some other jurisdictions, the potential for significant fines and legal action exists.

Moreover, the broader impacts, such as reputational damage and operational disruption, should not be underestimated. It is always in the best interest of organizations to proactively ensure compliance with PIPEDA to protect the privacy rights of individuals and avoid the associated penalties.

PRO TIP: Businesses that understand their obligations under PIPEDA not only safeguard themselves legally but also build a reputation as responsible custodians of personal information.

Examples of PIPEDA Violations

In January 2017, the Federal Court of Canada found Globe24h.com, a Romanian website, and its owner in violation of PIPEDA.

Globe24h.com had reposted Canadian legal decisions online, making them easily searchable on search engines. Individuals raised privacy concerns as their sensitive personal information became accessible through online searches, violating PIPEDA.

This case is important because it posed questions of jurisdiction and international relevance.

The court determined that PIPEDA can apply beyond Canada’s borders when a “real and substantial link” exists. In this case, the website’s content related to Canada specifically targeted Canadians, and impacted the Canadian public, justifying the application of Canadian law.

The court also ruled that it could issue corrective orders with extraterritorial effects to enforce PIPEDA compliance.

Globe24h.com was fined $5,000 and cooperated with the privacy prosecution. The decision highlighted the need for legal measures to address internet-related privacy violations with international implications.

Another case that underscores the OPC’s active role in upholding PIPEDA’s mandates, especially concerning the importance of obtaining explicit consent is the complaint about Home Depot of Canada Inc.’s compliance with PIPEDA.

The investigation which was concluded on January 26, 2023, revolved around a complaint where Home Depot was alleged to have disclosed customers’ personal information to Facebook (now Meta Platforms, Inc.) without their knowledge or consent.

The OPC found that Home Depot had not obtained valid consent for this practice, and the Privacy Statements of both Home Depot and Meta were deemed insufficient to support implied consent.

As a result, the OPC considered the complaint to be well-founded and resolved. Home Depot committed to implementing OPC’s recommendations, which included discontinuing the use of Meta’s Offline Conversions Tool and amending privacy communications to ensure transparent messaging and meaningful consent.

How Does PIPEDA Compare to Other Data Privacy Laws?

To gain a more comprehensive understanding of PIPEDA’s significance, we’ll compare it with two other prominent laws: the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States.

The GDPR set a new global standard for data protection. It applies not only to European Union (EU) member states but also to any organization worldwide that processes the personal data of EU residents.

One of GDPR’s key features is its extraterritorial reach, mirroring PIPEDA’s recent amendments. The GDPR requires organizations to obtain explicit consent for data processing, allow data subjects to access their information, and report data breaches promptly.

Both regulations emphasize consent, transparency, and data breach reporting. However, the GDPR imposes stringent fines, up to 4 percent of global annual revenue, for non-compliance, whereas PIPEDA fines are relatively modest.

On the other hand, the CCPA marks a significant shift in data privacy laws in the United States. It grants California residents rights over their personal data, including the right to know what data is collected and the right to request deletion.

Businesses are required to disclose data practices and allow consumers to opt out of data sales.

Comparing CCPA to PIPEDA, CCPA focuses on California residents, whereas PIPEDA applies nationally in Canada. Both laws however emphasize individual rights, transparency, and access to personal information.

PIPEDA is sectoral, with some provinces having their own privacy laws, while CCPA applies broadly to businesses meeting specific criteria.

Data privacy is a universal concern, and data protection laws like PIPEDA, GDPR, and CCPA play key roles in addressing these concerns around the world.

Regulations regarding data are only going to become more abundant in our tech-driven world. Brushing up on PIPEDA regulations in the above guide will help you develop privacy policies and establish systems that protect both you and your customers.

While each law has its distinct characteristics, they all strive to strike a balance between protecting individuals’ privacy and enabling responsible data usage in our increasingly digital world.

Frequently Asked Questions