Friday, April 10, 2020

Privacy best practices in a pandemic public health emergency

Since the early days of the COVID-19 pandemic, privacy questions have been in the headlines. International media reported stories from Asia about smartphones being used to enforce quarantine orders. In Ontario, Premier Ford suggested using telecom data to track social isolation compliance and more recently the Quebec police announced that it had arrested a woman in violation of a quarantine order by tracking her down via her cellphone.

Companies are wondering what information they can require from employees about their health, diagnosis or risk factors, and what information they can provide to public health authorities if asked. Companies also have similar questions about customer information.

What privacy laws apply?

Since Canada has a patchwork of privacy laws, the first question is always whether a privacy law applies at all and if so, which one. In Atlantic Canada, public sector employers and “federal works, undertakings and businesses” are subject to privacy regulation for employee information, but the private sector is only covered for customer information. The majority of private-sector employers in Canada (other than in British Columbia, Alberta and Quebec) fall in the gap without privacy regulation for the workplace. Even if no law applies, this does not mean that privacy should be thrown out the window.

Companies should be guided by privacy best practices described below, all of which are embodied in privacy statutes across Canada. These best practices align closely with what employees have come to expect regarding handling of their personal information. Organizations that adopt these principles generally avoid negative reaction from employees that their personal information has been misused. Transparency also encourages honest reporting, as individuals are usually more comfortable with disclosing personal information to an organization that is forthright about how they propose to use the information.

Organizations should be concerned about the relatively new common law causes of action for “intrusion upon seclusion” and “public disclosure of private facts”. Given that health information is particularly sensitive and the irrational stigma that seems to attach to COVID-19 disease, one might allege that disclosing infection risk or status to others may meet the “highly offensive to a reasonable person” threshold for the torts. Applying best practices would minimise the risk of liability.

Balancing privacy with public and occupational health

For employers, what should emerge is a careful balance between privacy principles and legitimate occupational health and safety concerns. The occupational health and safety imperative is a legal one, on both the employer and the employees, as the Occupational Health and Safety Act of Nova Scotia places obligations on both sides to ensure a safe workplace. Given the mode of transmission of the novel coronavirus, employers have a responsibility to keep employees who are at risk of spreading infection out of their workplaces. Some companies have decided to take the temperature of everyone entering the premises and excluding anyone with a fever. Others have adopted questionnaires or mandatory reporting of risk factors. Each of these scenarios involves the collection of personal information, so tread carefully.

What practices to adopt should be informed by the following privacy best practices:

(i) the collection of personal information must be justified, reasonable and non-discriminatory;

(ii) individuals should be given notice of the purposes for the collection, use and disclosure through policy or other direct communications such as signage;

(iii) personal information collected should be restricted to the minimum that is reasonable in the circumstances;

(iv) personal information should only be used for those purposes and should not be disclosed further than necessary; and

(v) the personal information should be accurate, as it will be used to make a decision of whether the employee, contractor or visitor will be permitted to work in the workplace.

What is justifiable and reasonable should be informed by the latest information from public health.

Disclosing personal information to public health authorities

Until recently, public health officials have largely been out of the spotlight, but they have been discreetly and diligently working to contain public health hazards, such as sexually transmitted infections. They are often been given special powers to do so, which includes the ability to require personal information from others. For example, in Nova Scotia, section 15 of the Health Protection Act gives the Chief Medical Officer of Health or his delegate broad powers to order information from third parties. Every privacy law in Canada permits disclosures where required by law and many also permit disclosures where it’s reasonably necessary related to the health and safety of the individual. Obviously, check your local statutes.

That said, we have to be very, very careful about attempts to get data in bulk, such as location data from telcos.

While health and safety are of course top of mind in this pandemic, privacy considerations should also be taken into account.

[Note: This post is based on an upcoming article for the Canadian Bar Association - Nova Scotia's Nova Voce magazine.]

Monday, February 17, 2020

Ontario court adopts the "false light publicity" privacy tort

Regular readers of this (irregular) blog will recall the milestone case of Jones v Tsige, in which the Ontario Court of Appeal imported into Canada the US privacy torts. That list includes:

1. Intrusion upon the plaintiff's seclusion or solitude, or into his private affairs.
2. Public disclosure of embarrassing private facts about the plaintiff.
3. Publicity which places the plaintiff in a false light in the public eye.
4. Appropriation, for the defendant's advantage, of the plaintiff's name or likeness.

The fourth cause of action, commercial appropriation of the plaintiff's image, was already alive and well in Canadian tort law. The Court in Jones applied the "intrusion upon seclusion" tort and subsequent cases have applied "public disclosure of private facts" (See Ontario court explicitly adopts new privacy tort: public disclosure of private facts.)

In December 2019, the Ontario Superior Court of Justice explicitly recognized the "false light" privacy tort. In Yenovkian v. Gulian, 2019 ONSC 7279, Justice Kristjanson was dealing with an unpleasant family law case in which the husband had made wild accusations against his former spouse, particularly related to their two children. The judge noted, with respect to the list of privacy torts:

[170] With these three torts all recognized in Ontario law, the remaining item in the “four-tort catalogue” of causes of action for invasion of privacy is the third, that is, publicity placing the plaintiff in a false light. I hold that this is the case in which this cause of action should be recognized. It is described in § 652E of the Restatement as follows:
Publicity Placing Person in False Light

One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if

(a) the false light in which the other was placed would be highly offensive to a reasonable person, and

(b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.

[171] I adopt this statement of the elements of the tort. I also note the clarification in the Restatement’s commentary on this passage to the effect that, while the publicity giving rise to this cause of action will often be defamatory, defamation is not required. It is enough for the plaintiff to show that a reasonable person would find it highly offensive to be publicly misrepresented as they have been. The wrong is in publicly representing someone, not as worse than they are, but as other than they are. The value at stake is respect for a person’s privacy right to control the way they present themselves to the world.

While I don't propose to list all the misconduct the husband was found to have carried out, this summary at the beginning of the decision is helpful for context:

[2] It is also about a father, Mr. Vem Yenovkian, who has engaged in years of cyberbullying of the mother, Ms. Sonia Gulian on websites, YouTube videos, online petitions and emails. It is about a father who videotapes court-ordered access visits with the children—both in-person and on Skype—and edits and posts those access visits and photographs of the children on the internet, with commentary. It is about a father who publicly posts on YouTube a video of his son cowering under a table while the father harangues him over Skype on a court-ordered access visit. It is about a father who posts videos of him describing his daughter, who suffers from a neurological disorder, as looking drugged, when she used to be “normal,” and posting that his daughter has a “broken” mind.

[3] Despite court orders prohibiting posting, the father continues his cyberbullying campaign abusing Ms. Gulian and her parents. He seeks to undermine the administration of justice through an online campaign to “unseat” a judge of this Honourable Court for rulings made, internet attacks on trial witnesses and the wife’s lawyer, and by flouting court orders and family law disclosure obligations.

The Court in this case did not follow the $20,000 "cap" on non-pecuniary damages set out in Jones v Tsige, but rather followed the divergent train of thought started with the Doe case:

[186] There is no claim for pecuniary damages; the only issue is non-pecuniary damages. The infliction of mental suffering and invasion of privacy are based on many of the same facts.

[187] On damages for intrusion on seclusion, the Court of Appeal in Jones v. Tsige held at paragraphs 87-88 that damages for intrusion upon seclusion in cases where the plaintiff has suffered no pecuniary loss should be modest, in a range up to $20,000. The important distinction with the two invasion of privacy torts in issue here, however, is that intrusion on seclusion does not involve publicity to the outside world: they are damages meant to represent an invasion of the plaintiff’s privacy by the defendant, not the separate and significant harm occasioned by publicity.

[188] The two Jane Doe cases have recognized that the cap on damages for intrusion upon seclusion may not apply to the other forms of invasion of privacy: Jane Doe 2016 at para. 58; Jane Doe 2018 at paras. 127-132. In this case, as is in those, the “modest conventional sum” that might vindicate the “intangible” interest at stake in Jones v. Tsige, para. 71, would not do justice to the harm the plaintiff has suffered.

[189] In Jane Doe 2016, at para. 52, Stinson J. turned to sexual battery cases for guidance in arriving at an award, and Gomery J. in Jane Doe 2018, at paras. 127-128 followed the same approach. In support of this approach, Stinson, J. pointed to the similarly of the psychological and emotional harm the plaintiff had suffered to that experienced by victims of sexual assault.

[190] I likewise adopt the method of looking to the factors applied to decide damage awards for a tort causing harms analogous to those the present plaintiff has suffered for invasion of privacy. The harm arising from the invasion of privacy in the present case is akin to defamation. Accordingly, in arriving at an award of non-pecuniary damages, I am guided by the factors described by Cory J. in Hill v Church of Scientology, at para. 187, which I am adapting to the tort of publicity placing a person a false light:

a) the nature of the false publicity and the circumstances in which it was made,
b) the nature and position of the victim of the false publicity,
c) the possible effects of the false publicity statement upon the life of the plaintiff, and
d) the actions and motivations of the defendant.

[191] In this case, the false publicity is egregious, involving alleged criminal acts including by Ms. Gulian against her children. The false publicity is widely disseminated on the internet, as well as through targeted dissemination to church friends and business associates. Ms. Gulian has suffered damage as a mother, as an employee, in the Armenian community, and in her church community. She is peculiarly vulnerable as the spouse of the disseminator of false publicity. The false publicity has had a detrimental effect on Ms. Gulian’s health and welfare, humiliation, caused her fear, and could be expected as well to affect her social standing and position. Mr. Yenovkian has not apologized, nor has he retracted the outrageous comments despite court orders.

[192] The damages for intentional infliction of mental suffering are intended to be compensatory. I award $50,000 compensatory damages for intentional infliction of mental suffering, relying on Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419.

Wednesday, December 11, 2019

Privacy Commissioner again upends the consensus on transfers for processing in Aggregate IQ investigation

You may recall earlier this year when the Canadian Privacy Commissioner completely revised the previous consensus by concluding that a "transfer for processing" was a disclosure that requires consent, along with any cross-border transfer of personal information. The Canadian privacy and business community were shocked by this reversal and the Commissioner eventually reversed this position, returning to the status quo.

Once again, the OPC has upended the consensus on using contractors to process information on behalf of a client.

The Privacy Commissioner of Canada and the Information and Privacy Commissioner of British Columbia together released their reports of findings into Aggregate IQ on November 24, 2019, following their joint investigation of the company. You may recognize the name of the company, as it was implicated in the many international Cambridge Analytica investigations. It was a contractor to the now infamous company that was implicated in a range of mischief related to the Brexit campaign and the US 2016 presidential election.

As a Canadian company, it should not be surprising that Aggregate IQ would come under scrutiny in Canada. What is surprising is that the result of the investigation essentially turns a whole lot of Canadian thinking about privacy and contracting out of services on its head, and also seems to ignore binding precedent from the Federal Court of Canada.

Aggregate IQ is essentially a data processing company that works on behalf of political parties and political campaigns. They take data from the campaigns, sort it, supplement it and sometimes use it on behalf of their clients. They key is that they do this work on behalf of clients.

Superficially, it may make sense to conclude that a Canadian company is subject to Canadian privacy laws. But the working assumption has always been that companies that collect, use and disclose personal information on behalf of clients are subject to the laws that govern their clients and their clients' activities. Those "trickle down" through the chain of contracts and sub-contracts. What's shocking is that the OPC has concluded that compliance with those laws is not enough. Processors in Canada, they say, have to also comply with Canadian laws even when they are incompatible with the laws that regulate the client.

For example, Aggregate IQ did work on a mayoral campaign in Newfoundland. No privacy law applies to a mayoral campaign in Newfoundland, but nevertheless the OPC says that Aggregate IQ needed consent for their use of the information on behalf of the candidate. The campaign did not need consent, but the OPC concluded that by using a contractor, the campaign is subject to more laws and additional burdens than the government of Newfoundland has concluded are necessary. Similarly, the OPC says that Aggregate IQ needed consent under PIPEDA for what they were doing on behalf of US and UK campaigns, even though the activity is largely unregulated in the US and consent is not required in the UK (using legitimate bases for processing under the GDPR). Setting aside whether the campaigns were actually complying with their local laws, the conclusion from the OPC is that additional Canadian requirements will be overlaid on top of the laws that should actually matter and actually have a close connection to what's really going on.

Until this point, the consensus has generally been that when a contractor is handling data for a customer, the obligations that lie on the customer flow down to the contractor. Similar to the “controller” and “processor” scheme in GDPR.

Canadian privacy law applies to the collection, use and disclosure of personal information in the course of commercial activity. And you'd think that Aggregate IQ is engaged in commercial activity so PIPEDA would apply. But that's not the case. If a contractor is collecting, using or disclosing personal information on behalf of a client, you have to look at that client's purposes. The Canadian Federal Court clearly concluded this in State Farm v Privacy Commissioner.* In that case, the OPC asserted its jurisdiction over an insurance company because they were clearly commercial, even when acting on behalf of an individual defendant in a car accident lawsuit. The Federal Court firmly disagreed. One has to look at what's really going on. State Farm was not handling personal information on its own behalf, but on behalf of its insured who was not subject to any privacy regulation for that activity. The same principle applies here. If Newfoundland has decided not to regulate how mayoral candidates collect and use personal information, it makes no difference if they use that information themselves or hire a contractor to do that.

This upends what has been understood to be the way things work. And it has worked.

And it is really bad public policy. It puts Canadian companies at a significant disadvantage in very competitive industries. While many people say that GDPR is much more privacy protective, there are many circumstances where personal data can be processed without consent, but based on a legitimate interest. A company or campaign in Europe would be much better off hiring a European company if hiring a Canadian company meant that the legitimate interest is disregarded and a Canadian consent requirement were superimposed. The same would apply to a Canadian campaign: the campaign that complies with whatever laws apply to it directly is suddenly subject to additional rules if it hires a contractor to carry out what would otherwise be a compliant and lawful activity.

It is also really bad public policy because if you take it to the logical conclusion, it means that Canadian governments cannot hire contractors to process or use personal information on their behalf. All Canadian public sector privacy laws are based on "legitimate purposes", so consent is not required where the collection, use or disclosure is lawfully authorized and legitimate. But this finding by the OPC would say that the contractor has to get consent under PIPEDA for whatever they do for their public sector client. This is not workable and I hope is an unintended consequence.

Beyond that, I'm not sure what to say. It appears that Aggregate IQ has agreed to follow the Commissioner's recommendations, so this will not be given the chance to be corrected by the Federal Court.

How this will play out in future cases remains to be seen.

* I should note that I was counsel to State Farm in that case.

Saturday, November 23, 2019

Presentation: Access to Government Information

On Friday, November 23, 2019, I had the pleasure of presenting on the topic of access to government information with Janet Curry of the Workers Compensation Board at the Canadian Bar Association - Nova Scotia branch annual professional development conference. In case it's of interest, here's our presentation.


David Fraser, McInnes Cooper; Janet Curry, Workers’ Compensation Board of Nova Scotia

The panel will share their perspectives on advising clients on requests for access to information held by government and public bodies. They will share best
practices and tips from both sides – those making requests for access to information, and those responding to such requests.

You can download it in PDF format here.

Wednesday, November 20, 2019

Presentation: Surveillance tech and privacy laws

I was honoured to be asked to give a breakfast presentation to the Canadian Security Association Atlantic Chapter on surveillance and security technology and the law. In case it's of broader interest, here's the presentation:

You can also grab it as a PDF here.

Monday, October 14, 2019

What a CLOUD Act agreement will look like for Canada

The United States Department of Justice and the United Kingdom Home Office have announced that the two countries have signed a bilateral agreement “On Access to Electronic Data for the Purpose of Countering Serious Crime”. The Agreement is intended to be a bilateral agreement of the type anticipated under the CLOUD Act. Passed in March 2018, partially to address the litigation against Microsoft related to evidence in Ireland, the CLOUD Act authorizes the United States to enter into executive agreements with other countries that meet specific criteria related to rule of law, civil rights and privacy. Once laid before Congress and approved, the result is to lift each party’s legal barriers that prevent one country’s legal processes from being recognized in the other. Many countries have been seeking an alternative to the traditional channels of mutual legal assistance, which are seen as time consuming and cumbersome.

When it comes to orders directed at US custodians of information, the main barrier to be overcome is the American Stored Communications Act that prohibits most US service providers from providing the content of communications except in response to a US court order. These can be obtained via the mutual legal assistance system, but all the steps required to obtain these orders are seen by law enforcement and cumbersome and time consuming. Under a CLOUD Act executive agreement, US service providers will no longer be prohibited from providing such content in response to an appropriate foreign order. It is very important to note that the CLOUD Act does not make foreign orders enforceable (with full force of a domestic court order) in the United States, but merely removes this barrier.

On the UK side of the equation, changes were made in UK law to permit this under the Crime (Overseas Production Orders) Act 2019, which received Royal Assent in February 2019. The Agreement will enter into force following a six-month Congressional review period mandated by the CLOUD Act, and the related review by UK’s Parliament.

Australia has already announced that it is seeking its own CLOUD Act executive agreement, and Canada is rumoured to be in similar discussions.

The Canadian Association of Chiefs of Police have been lobbying pretty hard for an executive agreement between Canada and the US, and called for it in their 2018 Annual Resolutions:

BE IT FURTHER RESOLVED that the Canadian Association of Chiefs of Police urges the Government of Canada to negotiate a bilateral data-sharing agreement with the United States of America who are authorized to do so pursuant to the CLOUD Act, and;

BE IT FURTHER RESOLVED that the Canadian Association of Chiefs of Police seeks a commitment from the Government of Canada for meaningful consultation with the CACP during the development of these instruments.

So what would this look like for Canada? The CLOUD Act and executive agreements are based on reciprocity, meaning that not only can Canadian law enforcement obtain information from US-based service providers, but American law enforcement can obtain information from Canadian-based information custodians. Currently, that’s mostly a no-go except through the MLAT.

In order for Canada to sign an executive agreement and give it effect, it would have to amend the Criminal Code and other statutes to give Canadian production orders extraterritorial effect or to create a new class of production orders, in a manner that is similar to the UK Crime (Overseas Production Orders) Act 2019. Notwithstanding the wishful thinking of many in Canada’s law enforcement community (relying, in part, on the wrongly-decided Brecknell decision from BC), Canadian production orders to not operate extraterritorially.

Removing Canadian legal barriers to foreign court orders that are subject to the bilateral executive agreement will likely be the most controversial part of the process. Canadians likely do not mind if Canadian law enforcement are able to obtain data about Canadian suspects in Canadian criminal investigations from foreign service providers. They likely will care about whether US law enforcement can obtain access to information from Canadian service providers.

Currently, all Canadian privacy laws prevent disclosure to foreign law enforcement under foreign orders. That includes private sector privacy laws, like the federal Personal Information Protection and Electronic Documents Act and provincial equivalents. The list would also include the health privacy laws in effect in most Canadian provinces, and each public sector privacy law. Currently, the public sector laws in British Columbia and Nova Scotia specifically prohibit disclosures in response to “foreign demands for disclosure”. This will either have to be removed or Canada will need to negotiate an exception in its executive agreement with the US to carve out information that is subject to public sector privacy laws.

What will likely be lost in the discussion and debate is the fact that CLOUD Act agreements are not intended to simply give effect to all orders from the other state. They are intended to create a form of passing lane in the MLAT for certain kinds of orders where the requesting state has a strong interest in the data and the receiving state has a minimal interest. For example, Canadian authorities can’t use a qualifying order to get information about a US suspect from a US service provider. Those would still have to go through the MLAT, subject to close scrutiny by American authorities. Likewise, US authorities should not be able to obtain information about Canadians from a Canadian service provider under this arrangement.

What also needs to be emphasised is that any Canadian amendments should not go any further than mirroring the changes made in the US law. The CLOUD Act does not make foreign orders enforceable (with full force of a domestic court order) in the United States, but merely removes certain barriers. Canadian amendments should do the same and make sure that a Canadian service provider has resort to Canadian courts and the Charter to review any foreign demands. And these orders should be limited to serious crimes.

I expect it will be an interesting discussion when it is finally announced. I would hope there is meaningful discussion, rather than just unveiling it as a fait accompli.

Thursday, August 22, 2019

Another privacy class action dismissed due to lack of compensable damages

Privacy class actions seem to be having a bit of a rough time as of late.

“The need to change a password at a higher frequency cannot give rise to a serious compensable loss claim.”

Following a trend that has become reasonably well established in Québec and is expanding across Canada, the province’s Superior Court has refused to certify a privacy class action on the basis that the representative plaintiff did not experience any compensable harm. In Bourbonnière c. Yahoo! Inc., Justice Tremblay considered a certification application brought by a putative class of individuals affected by a range of data breaches suffered by Yahoo! Inc. and Yahoo! Canada Corp. Yahoo! had announced a number of incidents, including one that saw information about 500 million users stolen in 2014, another in 2013 which also involved information theft and unauthorized access to account data using a forged digital cookie file.

The representative plaintiff testified that she had no reason to believe that she had been a victim of identity theft or fraud as a result, and had not identified any suspicious financial transactions. In addition, she continues to use her Yahoo! mail account and has not signed up for any identity theft protection or credit monitoring products.

The Court summarized her harm at paragraphs 36 and 37:

[36] In summary, Plaintiff has not incurred any out-of-pocket costs associated with the protection of her personal and/or financial information.

[37] The only prejudice suffered by the Plaintiff relates to the inconvenience of having to change her passwords in all of the accounts associated with her Yahoo email address and the alleged embarrassment suffered as a result of spam emails that were sent to her friends. The Court is of the view that such prejudice is insufficient to justify a class action.

This conclusion was based on a growing line of authorities in Québec. The Court referred to Mustapha v. Culligan of Canada Ltd of the Supreme Court of Canada, standing for the proposition that “compensable injury must be ‘serious and prolonged’ and rise above the ordinary annoyances, anxieties and fears that a person living in society may experience”.

[42] Similarly, in Mazzonna, a case involving the loss of data tape, the Superior Court concludes that the anxiety felt by the plaintiff upon and after learning that her personal information had been lost and the modification of habits in the manner in which she managed her bank account, is not enough to meet the threshold, even on a prima facie basis, of the existence of compensable damages.

[43] The present case can be distinguished from other data security incident cases such as Zuckerman and Belley since, unlike these two other cases, Plaintiff has not incurred any expenses for credit monitoring services nor was she a victim of identity theft.

[44] The transient embarrassement [sic] and inconveniences invoked by the Plaintiff are of the nature of ordinary annoyance and do not constitute compensable damages recoverable under the applicable law. Indeed, the need to change a password at a higher frequency cannot give rise to a serious compensable loss claim.

The Court also had issues with the composition of the class, particularly a subclass referred to as the “Collateral Victims”, being “all other persons, businesses, entities, corporations, financial institutions or banks who suffered damages or incurred expenses as a result of the data security incidents”. As the plaintiffs had not identified any single “Collateral Victim”, the court concluded that this particular subclass was “artificial” and questioned its existence.

The application for certification was dismissed. It is notable that a parallel Ontario proceeding is ongoing.

A previous version of this was written for the Canadian Technology Law Association newsletter.

Friday, May 10, 2019

Presentation: What’s new in cross-border digital evidence gathering for criminal investigations?

I was invited to present at the High Technology Crime Investigation Association's first annual Canadian Cyber Summit.

I spoke about recent issues and trends in cross-border criminal investigations originating in Canada, starting with the current state of affairs and the Mutual Legal Assistance Treaty regime, issues caused by blocking statutes and what the CLOUD Act will mean for Canadian investigators.

In case it's of broader interest, here's the presentation:

Thursday, April 25, 2019

My Atlantic Security Conference 2019 Presentation: The New Privacy and Cybersecurity Legal Risk Landscape (or how to play nicely with lawyers)

I was invited back this year to the Atlantic Security Conference as a speaker. It's a great event and shows that Halifax really punches above its weight when it comes to tech and skills.

My presentation was on The New Privacy and Cybersecurity Legal Risk Landscape (or how to play nicely with lawyers), focusing on the drivers that are forcing a convergence between privacy and infosec. It also talks about the skills that infosec folks can cultivate to become of greater value to their clients, by developing skills to translate between business folks and lawyers on security issues. The crowd was great with some fantastic questions.

Here's the presentation for anyone who may be interested.

Saturday, April 20, 2019

Privacy Commissioner proposes new guidance on crossborder transfers, requiring consent for all outsourcing

In seeking to revise crossborder dataflows, the OPC’s position would require consent for all transfers of personal information for processing

The Office of the Privacy Commissioner of Canada (OPC) has initiated a consultation that proposes to completely reverse its previous guidance on crossborder dataflows under the Personal Information Protection and Electronic Documents Act (PIPEDA). And because they are trying to fit a round peg in a square hole, their position -- if implemented -- will have a huge impact on all outsourcing.

In 2009, the OPC published a position that was consistent with the actual wording of the statute. It held that when one organization gives personal information to a service provider, so that the service provider can process the data on behalf of the original organization, it was a transfer and not a disclosure. This is an important distinction because transfers do not require consent from the individual, as is the case with a disclosure. Data is disclosed when it is given to another organization for use by that organization for its own purposes. In a transfer scenario, the personal information is protected by operation of the accountability principle, which means the organization that originally collected the data and has transferred it to a service provider remains responsible for the personal data and has to use contractual and other means to make sure that the service provider takes good care of the personal information at issue. Importantly, in its 2009 guidance, the OPC correctly noted “PIPEDA does not distinguish between domestic and international transfers of data.” Consent was not required, but the OPC did recommend that notice be given to the individual:

Organizations must be transparent about their personal information handling practices. This includes advising customers that their personal information may be sent to another jurisdiction for processing and that while the information is in another jurisdiction it may be accessed by the courts, law enforcement and national security authorities.

The 2009 policy position reflects the consensus of most privacy practitioners since PIPEDA came into effect in 2001. The new position is a complete reversal and discards the notion of “transfers” of personal information for processing:

Under PIPEDA, any collection, use or disclosure of personal information requires consent, unless an exception to the consent requirement applies. In the absence of an applicable exception, the OPC’s view is that transfers for processing, including cross border transfers, require consent as they involve the disclosure of personal information from one organization to another. Naturally, other disclosures between organizations that are not in a controller/processor relationship, including cross border disclosures, also require consent. [emphasis added]

The new position concludes that because there is nothing in PIPEDA that specifically exempts transfers from consent, transfers can be folded into the mandatory consent scheme:

While it is true that Canada does not have an adequacy regime [as in Europe] and that PIPEDA in part regulates cross border data processing through the accountability principle, nothing in PIPEDA exempts data transfers, inside or outside Canada, from consent requirements. Therefore, as a matter of law, consent is required. Our view, then, is that cross-border data flows are not only matters decided by states (trade agreements and laws) and organizations (commercial agreements); individuals ought to and do, under PIPEDA, have a say in whether their personal information will be disclosed outside Canada.

This new position, while demanding consent, brings the true nature of that consent into question. One one hand, the organization has to get consent. On the other hand, the individual can be given no meaningful choice or ability to opt-out, because the organization can say “take it or leave it”:

Organizations are free to design their operations to include flows of personal information across borders, but they must respect individuals’ right to make that choice for themselves as part of the consent process. In other words, individuals cannot dictate to an organization that it must design its operations in such a way that personal information must stay in Canada (data localisation), but organizations cannot dictate to individuals that their personal information will cross borders unless, with meaningful information, they consent to this.

There is little basis in the statute for this position reversal, and their consultation document shows some significant mental gymnastics to get where they want to go notwithstanding the actual scheme of the Act.

Because PIPEDA does not deal with crossborder transfers in any specific way, the only way for the OPC to get to the result they seek is to impose their new requirements on all transfers for processing by a third party, regardless of whether that processing involves moving the personal information outside of Canada. And to highlight the shortcomings of trying to shoehorn this principle into the existing statute, it would not affect in any way a US company that operates in Canada deciding after the fact to move data to its own US-based data centre because it would not be a disclosure or a transfer from one entity to another.

When PIPEDA was first passed and as subsequently amended, Parliament expressly excluded crossborder barriers.

Parliament had the example of the European Data Protection Directive and its adequacy mechanism, but Parliament did not follow this model at all. The only way for the OPC to get to the result it is seeking is to impose new requirements on all transfers for processing by a third party, regardless of whether that processing involves moving the personal information outside of Canada. By going after crossborder transfers -- which is ill-conceived on its own -- the OPC is proposing to break all domestic outsourcing, as well. This is a massive cost with no discernible privacy benefit.

If Parliament had intended to address crossborder data transfers, it would have done so. It can still do so. It is not the role of the Privacy Commissioner of Canada to usurp Parliament’s prerogatives in this manner.

This reimagining of PIPEDA really stretches statutory interpretation past the breaking point. It also has the effect of undermining the rule of law when an Officer of Parliament decides unilaterally to reinterpret and essentially re-write the statute presented to him by the institution to which he is accountable. This should have been a consultation that would lead to a report to Parliament, not the imposition of GDPR-envy on companies operating in Canada.

The proposal immediately garnered significant criticism. Lisa Lifshitz wrote for Canadian Lawyer Magazine:

This is problematic in several respects as this analysis flies in the face of years of guidance from the OPC and reiterated repeatedly, including in the 2012 Privacy and Outsourcing for Businesses guidance document) that a transfer for processing is a "use" of the information, not a disclosure. Assuming the information is being used for the purpose it was originally collected, additional consent for the transfer is not required; it is sufficient for organizations to be transparent about their personal information handling practices. This includes advising Canadians that their personal information may be sent to another jurisdiction for processing and that while the information is in another jurisdiction it may be accessed by the courts, law enforcement and national security authorities.


The OPC’s implement-first-ask-permission-later approach to changing the consent requirements for cross-border data transfers is troublesome at best and judging from initial reactions, sits uneasily with many (me included).

Likely knowing this, at the same time it released the Equifax decision the privacy commissioner also announced a “Consultation on transborder dataflows” under PIPEDA, not only for cross-border transfers between controllers and processors but for other cross border disclosures of personal information between organizations. The GDPR-style language used in this document is no accident and our regulator is seemingly trying to ensure the continued adequacy designation of PIPEDA (and continued data transfers from the EU to Canada) by adopting policy reinterpretations (and new policies) pending any actual legal reform of our law. Meanwhile, the OPC’s sudden new declaration that express consent is required if personal information will cross borders (and the related requirement that individuals must be informed of any options available to them if they do not wish to have their personal information disclosed across borders) introduces a whole new level of confusion and complexity regarding the advice that practitioners are supposed to be giving their clients pending the results of the consultations review, not to mention the potential negative business impacts (for consumers/vendors of cloud/managed services and mobile/ecommerce services, just to name a few examples) that may arise as a consequence.

Michael Geist has written about the OPC’s approach on his blog:

While the OPC position is a preliminary one – the office is accepting comments in a consultation until June 4 – there are distinct similarities with its attempt to add the right to be forgotten (the European privacy rule that allows individuals to request removal of otherwise lawful content about themselves from search results) into Canadian law. In that instance, despite the absence of a right-to-be-forgotten principle in the statute, the OPC simply ruled that it was reading in a right to de-index search results into PIPEDA (Canada’s Personal Information Protection and Electronic Documents Act). The issue is currently being challenged before the courts.

In this case, the absence of meaningful updates to Canadian privacy law for many years has led to another exceptionally aggressive interpretation of the law by the OPC, effectively seeking to update the law through interpretation rather than actual legislative reform.

The OPC is inviting comments up to June 4, 2019 and I am sure expected they’ll get an earful.

This posting is based, in part, on a summary I prepared for the Canadian Technology Law Association's newsletter.

The OPC has just posted a bit of a justification/explanation for their consultation, along with some specific questions they'd like addressed. They are specifically looking for guidance on the following:

Questions for Stakeholders
  1. In your view, does the principle of consent apply to the transfer of personal information to a third party for processing, including transborder transfers? If not, why is the reasoning outlined above incorrect?
  2. Does Principle 4.1.3 affect the interpretation or scope of the principle of consent? If so, what is the legal basis or grounds for this interpretation?
    What should be the scope of the consent requirements in the Act in light of the objective of Part 1 of PIPEDA as set out in section 3, the new section 6.1 (and its reference to the nature, purpose and consequences of a disclosure), and the OPC’s Guidelines for obtaining meaningful consent, in force since January 1 2019? Specifically:
    1. In what circumstances should consent be implicit or explicit?
    2. What should be the level of detail in the information given to the person affected? Do you agree that consent should be comprised of at least the following elements: (i) the purposes for which the responsible organization seeks to use the personal information, (ii) the fact that it uses third parties for processing but that it provides for a comparable degree of protection, (iii) when the third parties are outside of Canada, the countries where the personal information will be sent, (iv) the risk that the courts, law enforcement and national security authorities in those countries may access the personal information?
    3. Should the notice to the affected person name the third parties?
    4. Should the notice contain other pieces of information?
  3. Since the 2009 Guidelines already require that consumers be informed of transborder transfers of personal information, and of the risk that local authorities will have access to information (preferably at the time it is collected), at a practical level, would elevating these elements to a legal requirement for meaningful consent significantly impact organizations? If so, how?
  4. If the elements identified in question 3(b) were required conditions for meaningful consent under a new OPC statement of principle, what steps should the OPC take to address the needs of organizations to collect, use, and disclose personal information?
  5. What elements should be included in obtaining consent for transfers for processing that are not transborder?
  6. Do you think the proposed interpretation of PIPEDA is consistent with Canada’s obligations under its international trade agreements? If not, why would the result be different from the current situation, where the elements identified in question 3(b) must disclosed as part of the openness principle?
  7. Any other comments or feedback you think may be helpful.