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

16 min to read

The Personal Information Protection and Electronic Documents Act, commonly known as PIPEDA, is the law that governs the dealings of corporations with consumers’ personal information in Canada.

It is aimed at ensuring that the right to privacy of individuals is not violated and to create policy guidelines on the proper handling of private information by organizations.

PIPEDA rests on ten key principles of fair information practices, such as defining purpose, consent, and accountability, among many others.

Deep Dive:
To maintain a positive relationship with consumers as well as adhere to Canadian laws concerning data protection, organizations must follow these principles.
Key Takeaways:
  • PIPEDA protects Canadian privacy and personal information through 10 principles
  • Ongoing changes may enable individuals to control their data through rights to access, correction, and data transfer
  • Organizations must understand the limits of international data transfer and obtain consent before transferring data outside of Canada
Hocoos small logo Answers Legal and Ethical Considerations

What types of personal information and organizations are covered by PIPEDA? 

PIPEDA is relevant to any entity, such as businesses and non-profit organizations, that collects, uses, or discloses personal and sensitive information for commercial purposes. It also encompasses personal information of employees and other stakeholders, such as customers, clients, and other people. Below are examples of personal information that PIPEDA protects:

  • Name;

  • Address;

  • Phone number;

  • E-mail address;

  • Social insurance number;

  • Credit card information;

  • Medical records;

  • Employment history. 

All organizations that fall within the scope of PIPEDA have to adhere to the ten principles of fair information practices contained in the Act, which govern the gathering, utilization, and sharing of personal information.

Pro Tip: 
For more information on PIPEDA, visit the Privacy Commissioner’s Office of Canada.

How does an individual’s consent to the collection of personal information function under PIPEDA, and how can it be obtained validly? 

PIPEDA requires that an organization must get your consent before collecting, using or sharing your personal details. Consent must be informed and voluntary.  Informed consent states that you should know what information is collected, the purpose behind collecting it, and to whom it will be shared. 

Deep Dive: 
A variety of forms can be used to obtain consent, such as oral, written, electronic, or even through actions that imply agreement.

Should PIPEDA be amended to encompass the right for individuals to access, correct, and transfer their personal information, and what are the potential implications of such a change? 

An individual’s ability to access, amend, and relocate personal information recorded by companies about them has been proposed as an amendment to PIPEDA. The modification aims to increase control over personal information provided by individuals.  

Potential Benefits: Adding these rights may:

  • Foster improved trust from enhanced transparency about data usage.

  • Empower individuals by improving data management capabilities, leading to more informed choices.

  • Enable service providers to compete by making data relocation easier between services.  

Potential Challenges: These modifications may also lead to:

  • Relatively high expenditures for organizations to accommodate new requests and change processes technologically and operationally.

  • Limitations placed by new individual rights (particularly portability) on the need for data to innovate or personalize services.

What are the limitations of PIPEDA in the context of international data transfers, and how can these limitations be addressed? 

PIPEDA handles international data transfers primarily with the accountability principle. This means the organization that transfers the data is in charge of it. This system is different from other regions where data protection provisions for the receiving country may necessitate region-specific consent, which invokes a formal adequacy determination or some other acceptance framework for assessing how data protection is offered in the country where the data is sent. The specific actions taken regarding these issues include:  

  • Accountability: Any organization transferring personal data outside Canada remains responsible for its protection.  

  • Comparable Protection: The organization must contractually ensure a comparable level of protection for the information while it is processed by a third party abroad.  

  • Transparency: Organizations must inform individuals, usually through privacy policies, that their information may be transferred and processed outside Canada and may be subject to the laws of those foreign countries.

How does PIPEDA handle data breaches and security incidents, and what are the reporting requirements for organizations? 

Under PIPEDA, organizations are required to protect personal data with reasonable measures. If there is a breach of any of these safeguards, organizations must evaluate, considering breach sensitivity and potential harm, whether or not there is a Real Risk of Significant Harm (RROSH). If the RROSH threshold is met, organizations must:  

  • Report the breach to the Office of the Privacy Commissioner (OPC) as soon as possible;

In addition, regardless of any RROSH determination, organizations must retain documentation of all security breaches for a period of 24 months and provide these records to the OPC when requested. Deliberately breaching these requirements for reporting, notification, or record retention may incur penalties.

What are your responsibilities under PIPEDA as an organization or individual? 

While PIPEDA enables individuals to take control of their personal data by giving them specific rights, it also primarily outlines the obligations that an organization has concerning their commercial undertakings. Organizational Responsibilities, based on 10 FIPs, include:

  • Accountability: Identify an individual who ensures compliance with privacy policies and procedures, and is accountable for the protection of personal information within the organization.

  • Identifying Purposes: Purpose specification must occur before information collection or concurrently with the activity.

  • Consent: Collect, use, or disclose personal information after adequate consent has been solicited.

  • Limiting Collection: Collect information fairly and lawfully and exclusively within the scope of identified purposes.

  • Limiting Use, Disclosure, Retention: Use/disclose only for stated purposes; keep only as long as needed.

  • Accuracy: Information kept should be verified to be complete, current, and pertinent to the purpose.

  • Safeguards: Limit access to the information and protect it from unauthorized access using reasonable security measures corresponding to the sensitivity of the information.

  • Openness: Organizations must disclose policies and practices concerning information management.

  • Individual Access: Information relevant to clients is provided in conjunction with opportunities to make adjustments.

  • Challenging Compliance: The organization must develop policies for receiving and responding to questions and complaints concerning the organization’s compliance with its privacy policies and procedures.
Deep Dive:
Key Additional Duties: Organizations need to manage and report data breaches to the Privacy Commissioner, notify affected individuals if there is a ‘Real Risk of Significant Harm’ (RROSH), and keep records of all data breaches for 24 months.

Individuals’ Rights under PIPEDA: Include the ability to retrieve and call for a portion of their private information held by others, withdraw consent, with some restriction, and challenge an organization’s actions regarding the information.

If a user has any questions about PIPEDA or has a privacy concern, what steps do they need to take to raise their concerns and seek resolution? 

To clarify PIPEDA or any other privacy concern, the initial step is to get in touch with the specific organization you think handles your information. Their address and phone number are on the website or in the privacy policies. If the organization’s response is not to your satisfaction, you may submit a complaint to the Office of the Privacy Commissioner of Canada (OPC). Some examples of the questions that need to be directed to the organization include:  

  • Which type of information is being collected from me?

  • In which ways do you utilize my information?

  • Who has access to my data?
Pro Tip:
Maintaining documentation of your interactions with the organization and the Office of the Privacy Commissioner (OPC) is essential.

What are the potential consequences of violating PIPEDA for organizations and individuals? 

PIPEDA may enforce the following in case of a law break:

For Organizations:

  • Financial: Potential fines up to $100,000 CAD for knowingly violating specific obligations (like breach reporting or record-keeping rules), along with possible court orders to compensate affected individuals.

  • Legal: Exposure to lawsuits from individuals seeking damages for harm resulting from the violation.

  • Reputational: Damage to the organization’s brand reputation and loss of customer trust.

For Individuals:

  • Harm: Individuals whose privacy rights are violated may experience consequences such as financial loss, identity theft, or reputational damage.

  • Redress: Affected individuals can file complaints with the Office of the Privacy Commissioner of Canada and may pursue damages through the courts.

Conclusion 

The Personal Information Protection and Electronic Documents Act, or PIPEDA, is one of the essential legislations that protects data in Canada. PIPEDA ensures the responsible handling of personal information. It has 10 guiding principles, such as data protection and limiting collected information to what is essential. Also, the collected data must be kept confidential, along with the use of security measures to prevent unauthorized disclosure. 

The proposed change to the current PIPEDA allows people to access, correct, and transfer their personal data, which may give individuals more significant control over their information compared to the current status. While there are gaps in the international transfer of data and protecting individual rights versus protecting business interests, legislation on the use of privacy and data is sure to benefit Canadians. There are ongoing efforts to refine privacy laws so that people and businesses can use modern technology without facing less harmful data leaks.

Table of Contents

READY TO KICK-START YOUR SMALL BUSINESS JOURNEY?

Important Consideration: The information provided by our expert team is designed to give you a general understanding of the website creation process and the features available to you. It's important to note that this information is not a substitute for professional advice tailored to your specific needs and goals.
Read our editorial standards for Answers content.
Our goal is to empower you to create an amazing website. If you have questions or need guidance during the building process, don’t hesitate to Contact us. We're happy to provide assistance and point you in the right direction.