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: Client Update: It's here now! Breach reporting for Canadian businesses under PIPEDA

October 19, 2018

Rob Aske

You likely heard rumblings over the spring and summer, but now it's here. Canada’s federal privacy law known by the acronym PIPEDA (Personal Information Protection and Electronic Documents Act) adds privacy breach reporting as of November 1, 2018.

The gist of the breach reporting obligations is as follows:

A business will be required to report to the Privacy Commissioner a breach involving personal information ("PI") under its control (including with a service provider) if it is reasonable to believe that the breach creates a real risk of significant harm to the individual. (The Privacy Commissioner notes that it does not matter if it is one or thousands of affected persons).

Significant harm is defined to include humiliation, damage to reputation or relationships, loss of employment, business or professional opportunities, financial loss, identity theft, negative effects on credit record, and damage to or loss of property.

Factors relevant to the real risk of significant harm include sensitivity of the PI, and the probability that it may be misused.

The report to the Commissioner would need to describe the breach, when it occurred, the PI that is subject, the estimated number of individuals affected, and the steps that the organization is taking in response.

Your business would also need to notify individuals whose PI is involved, if that breach creates a real risk of significant harm to the individual.

The notice to the individual would need to describe the breach, when it occurred, the PI affected, the steps the organization is taking, plus information about the business’ complaints process and the individual’s rights under PIPEDA.

The business could be obliged to notify other organizations or government if the business believes that these other bodies may be able to reduce the risk of harm.

Reports must be made "as soon as feasible after the breach". The express goal is in part to reduce risks of harm, so reports may need to be made well before the full story of the breach is known.

Another big change with this new legislation is that businesses shall be obliged to keep and maintain records of EVERY breach of security safeguards involving PI; i.e. whether or not it meets any particular harm test. In addition, businesses must, on request, provide the Commissioner with access to copies of these records. (So businesses will be obliged to maintain records which will help the Commissioner and any claimant build a case against the business.)

The regulations require records of breach to be maintained for 24 months after the date that the business determined that the breach occurred. In addition, these records must enable the Commissioner to verify compliance with the business’ reporting obligations to the Commissioner and to individuals, if there has been a breach which creates a real risk of significant harm.

Any breach of these obligations may result in the business being charged with an offence, which could result in a fine not exceeding $100,000.

The obligation to report privacy breaches is not new to many jurisdictions, but will be new to much of Canada, and compels every business to sharpen their privacy practices – because going public with a breach can make the impact a much larger mess.

You can find the federal Privacy Commissioner's Guidelines on reporting breaches here.



This update is intended for general information only. If you have questions about the above information, please contact Rob Aske, or a member of our information technology, internet and privacy group.
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