The Government of Canada has announced that its proposed data breach notification requirements pursuant to the Digital Privacy Act (the “Act”) will take effect on November 1, 2018.  The Act amends Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) in a number of areas, with the most important change being mandatory data breach reporting requirements.

Under the Act, organizations that experience a data breach in Canada will now have mandatory statutory obligations, including:

1. Determining if the breach poses a “real risk of significant harm” to any individual whose information was involved in the breach and conducting a risk assessment;

2. If there is a real risk of significant harm, notifying the affected individuals and the Privacy Commissioner of Canada as soon as feasible;

3. Notifying any other organization that may be able to mitigate the harm to affected individuals; and

4. Maintaining a record of any data breach that the organization becomes aware of and providing it to the Commissioner upon request.

The form and content of the notices will be prescribed by regulation; it is expected that those regulations will be in force at the same time.

In Canada and abroad, there have been some highly publicized incidents involving the unauthorized access, use and disclosure of personal information.  While it is not clear whether this precipitated the implementation of the Act’s data breach notification requirements, it certainly means that any businesses operating in Canada should take immediate action to prepare for the changes.

Existing Privacy Law

PIPEDA, which took effect on January 1, 2004, allows those who believe their personal information has been compromised to file a complaint with the Privacy Commissioner of Canada and to make an application to the Federal Court, claiming all appropriate damages and remedies. PIPEDA applies to all personal information collected, used, or disclosed in the course of commercial activities by all private sector organizations within a province unless the province adopts provincial legislation that is “substantially similar” to PIPEDA.  The law applies also to employees in federally regulated organizations (e.g., banks, airlines, telecommunications and interprovincial transportation companies), but not to employees in provincially regulated entities.

To date, only Quebec, British Columbia and Alberta have adopted private sector legislation deemed substantially similar to PIPEDA.  Apart from PIPEDA, Alberta is the only province that has its own statutory breach notification requirements in force.  Section 34.1(1) of Alberta’s Personal Information Protection Act requires an organization with personal information under its control to notify the Alberta Information and Privacy Commissioner with respect to “any incident involving the loss of or unauthorized access to or disclosure of the personal information where a reasonable person would consider that there exists a real risk of significant harm to an individual as a result of the loss or unauthorized access or disclosure.”

Canadian businesses already have an obligation to implement appropriate privacy policies and practices to comply with applicable privacy legislation.  For those companies governed by PIPEDA, a proper protocol should also be put in place so that they are prepared to manage and respond to data privacy breaches when they occur.