July 11, 2024

What’s new in Canada’s data sovereignty landscape?

What’s new in Canada’s data sovereignty landscape?

The biggest news for Canadian data sovereignty is data sovereignty for the First Peoples, Canada’s indigenous population. Indigenous communities in Canada are seeking to obtain full control over the generation, processing, and storage of their data. While still in the discussion phase, this movement highlights a broader, ongoing shift towards greater data sovereignty in Canada.

Adding to this, the reaction of Canadians to the U.S. Cloud Act—despite primarily affecting U.S. companies—highlights concerns about the potential disclosure of Canadians’ personal information to foreign entities.

Undoubtedly, data sovereignty is a significant concern in Canada. For business leaders with interests in the country, understanding the nuances is crucial. This article will explore the current state of data sovereignty in Canada, the challenges it presents, and how InCountry can help your company ensure data sovereignty compliance.

Canadian data sovereignty landscape

Four areas emerge as focal points when reviewing Canada’s data sovereignty landscape. They are as follows:

  1. Legal & regulatory framework
  2. Emerging trends
  3. Key stakeholders
  4. Critical concerns or challenges

These focal points form the basis for reviewing all critical issues regarding the data sovereignty landscape in Canada. Unlike the PDPL v GDPR, these laws complement each other to ensure a stable system. We shall review each of them in this section.

Legal & regulatory framework

The Canadian data privacy law, also known as the Personal Information Protection and Electronic Documents Act (PIPEDA), is a pivotal aspect of the legal framework governing data sovereignty in Canada. This federal legislation regulates how private-sector organizations handle personal information during commercial activities, ensuring that data collection, use, and disclosure practices meet stringent privacy standards.

Next are Canada’s provincial data privacy laws, which some provinces have created in addition to the PIPEDA to meet their unique needs. For instance, Quebec’s Bill 64 enhances privacy protections and increases penalties for non-compliance. Furthermore, the data localization requirements of both federal and provincial privacy laws continue to contribute to this discussion.

Finally, the public sector privacy laws also play a role as they govern how governmental agencies handle the personal information of Canadian citizens.

Emerging trends

A few emerging trends also contribute to the discussion on the Canadian data sovereignty landscape, and we shall highlight a few here. They are as follows:

  • Stricter regulation and enforcement: There is an increasing trend towards more stringent data privacy laws in Canada. The introduction of Bill C-27 in 2022, an amendment to certain areas of the PIPEDA, introduced stricter measures for handling personal data. It introduced the Consumer Privacy Protection Act (CPPA), which replaced parts of PIPEDA, the Personal Information and Data Protection Tribunal Act (PIDPTA), and the Artificial Intelligence and Data Act (AIDA).
  • Prioritizing data security: Organizations have been paying more attention to cybersecurity in recent times. They are now investing in robust security measures to protect client data from breaches and unauthorized access. This results from the increasing requirements of data privacy laws and the menace created by cyber theft.
  • Public awareness and advocacy: The activities of cyber criminals and the increasing awareness created by data privacy law advocates have led to a spike in public interest on these issues. Consumers are increasingly concerned about how companies are handling their data. This drives the demand for greater transparency and accountability from organizations.

Key stakeholders

Three major stakeholders stand out in our review of the data sovereignty landscape of Canada, as they play essential roles in shaping this landscape. They are the Government Agencies, Private sector businesses, and Civil Society Organizations.

Government Agencies like the Office of the Privacy Commissioner of Canada (OPC) play a crucial role in enforcing privacy laws and advocating for more robust data protection measures. Private businesses, especially those in sectors handling sensitive data (e.g., finance, healthcare), are actively involved in shaping the data sovereignty landscape through compliance and advocacy. Finally, Civil Society Organizations like the Canadian Internet Policy and Public Interest Clinic (CIPPIC) and the Canadian Civil Liberties Association (CCLA) work to protect privacy rights and influence policy development.

  • Indigenous Data Sovereignty: Indigenous communities in Canada advocate for control over their data to ensure it is used in ways that respect their rights and sovereignty. This includes the principles of OCAP® (Ownership, Control, Access, and Possession), which are critical for any data collection and use involving Indigenous peoples.

Data sovereignty laws in Canada

Canada’s data sovereignty laws are derived from several data privacy laws in the country. They are in 3 categories as follows:

  1. Federal legislation
  2. Provincial legislation
  3. Industry-specific regulations

We shall discuss these in detail below:

Federal legislation

The following are federal Canadian data privacy laws:

  1. The Canadian Personal Information Protection and Electronic Documents Act (PIPEDA).
  2. The Canadian Privacy Act.
  3. The Canadian Personal Information Protection and Electronic Documents Act (PIPEDA).

This is Canada’s primary federal law regulating how private sector organizations handle personal information during commercial activities. It shares some similarities with Saudi Arabia’s data protection laws as it applies to private organizations. The PIPEDA governs how they collect, use, or disclose personal information during commercial activities. It also covers personal information about federally regulated business employees, including banks, airlines, and telecommunications companies. In provinces with privacy legislation deemed substantially similar to PIPEDA, such as Quebec, Alberta, and British Columbia, PIPEDA generally does not apply to them, except in cases of interprovincial or international data transfers.

The PIPEDA is based on ten fair information principles outlined in the Canadian Standards Association’s Model Code for the Protection of Personal Information. These principles form the framework for how organizations must manage personal information. The principles are as follows:

  • Accountability: organizations must appoint a data officer who will be responsible for ensuring compliance.
  • Identifying purposes for data collection before collecting.
  • Consent must be sought from private individuals before collecting their data.
  • Limiting collection to only what is necessary.
  • Limiting use, disclosure, and retention of private data.
  • Accuracy: personal data collected must be accurate.
  • Safeguards are necessary to ensure maximum security for data
  • Openness: organizations must be open regarding how they manage clients’ data.
  • Individual access: clients should have access to their personal information at all times.
  • Challenging compliance: individuals can challenge a company’s compliance with established data privacy laws.

Below are other compliance requirements of the PIPEDA:

  • Develop and implement privacy policies that comply with the ten fair information principles.
  • Ensure individuals’ consent is obtained for collecting, using, and disclosing their personal information.
  • Allow individuals to access their personal information and request corrections when necessary.
  • Implement security measures to protect personal information from loss, theft, and unauthorized access.
  • Make information about privacy practices and policies readily available to individuals.
  • Notify affected individuals and the Privacy Commissioner of Canada about data breaches that pose a significant risk of harm.

The Office of the Privacy Commissioner of Canada (OPC) is responsible for enforcing the provisions of the PIPEDA. They are to carry out investigations and audits and make court applications, where necessary, to ensure full compliance with the PIPEDA.

The Canadian Privacy Act

Enacted in 1983, the Canadian Privacy Act is a federal law that regulates how federal government institutions manage personal information. The Act establishes guidelines for government departments and agencies to collect, use, and disclose personal information, ensuring the protection of individuals’ privacy rights. The Privacy Act applies to over 250 federal government departments, agencies, and crown corporations. Here are a few requirements of the Canadian Privacy Act:

  • Purpose Limitation: Federal institutions are only allowed to collect personal information that is directly related to an operating program or activity.
  • Information Source: Whenever possible, personal information should be collected directly from the individual it pertains to.
  • Purpose Specification: Personal information must only be used or disclosed for the purpose for which it was collected unless the individual consents or the disclosure is authorized by law.
  • Legal Exceptions: Personal information can be disclosed without consent under specific circumstances, such as for law enforcement purposes or to comply with court orders.
  • Retention Period: Personal information should be kept only as long as necessary to fulfill the purposes for which it was collected.
  • Disposal: Personal information must be disposed of securely to prevent unauthorized access.
  • Data Quality: Institutions must ensure that personal information is accurate, complete, and up-to-date for its intended use.
  • Security Measures: Federal institutions must protect personal information with appropriate security safeguards against risks like loss, unauthorized access, use, disclosure, or modification.
  • Access Rights: Individuals have the right to request access to their personal information held by federal institutions.
  • Correction Rights: Individuals can request corrections to their personal information if they believe it to be inaccurate.
  • Privacy Policies: Institutions must make their privacy practices publicly available.
  • Designated Officials: Institutions must appoint an official responsible for ensuring compliance with the Privacy Act.

As in the PIPEDA, the Office of the Privacy Commissioner of Canada (OPC) is also charged with the enforcement of this policy, managing complaints and investigations, auditing federal agencies for compliance, etc.

Provincial legislation 

We shall briefly discuss the British Columbia Personal Information Protection Act (PIPA) under this section. Please note that other Regions like Quebec, and Alberta, have their regional privacy policies.

British Columbia Personal Information Protection Act (PIPA)

The British Columbia Personal Information Protection Act (PIPA) is a provincial law that governs how private sector organizations in British Columbia collect, use, and disclose personal information. Enacted in 2004, PIPA aims to protect individuals’ privacy while enabling organizations to manage personal information responsibly. We shall review some key features of PIPA below:

  • Scope: PIPA applies to all private sector organizations operating within British Columbia, including businesses, non-profits, and professional associations. However, it excludes public bodies governed by the Freedom of Information and Protection of Privacy Act (FIPPA) and personal information managed by federal works, undertakings, or businesses, which are regulated by the federal Personal Information Protection and Electronic Documents Act (PIPEDA).
  • Consent: Organizations must secure consent from individuals before collecting, using, or disclosing their personal information, with certain exceptions outlined in the Act.
  • Purpose Limitation: Personal information must only be used for the purposes specified at the time of collection or for purposes reasonably related to those unless additional consent is obtained.
  • Access & Correction: Individuals have the right to access their personal information held by an organization and can request corrections if the information is inaccurate or incomplete.
  • Security: Organizations are required to implement reasonable security measures to protect personal information from unauthorized access, use, or disclosure.
  • Transparency is essential; organizations must communicate their personal information management practices and make their privacy policies readily available.

The Office of the Information and Privacy Commissioner (OIPC) for British Columbia is tasked with enforcing PIPA. Individuals who believe their privacy rights have been violated can file complaints with the OIPC. The Commissioner possesses the authority to investigate these complaints, conduct audits, and issue orders to ensure compliance with PIPA.

Industry-specific regulations

In this section, we shall briefly discuss the Personal Health Information Protection Act (PHIPA) in Ontario.

The Personal Health Information Protection Act (PHIPA) in Ontario

The Personal Health Information Protection Act (PHIPA) is a provincial law in Ontario that governs the collection, use, and disclosure of personal health information by healthcare providers and organizations. Enacted in 2004, PHIPA aims to protect the privacy of individuals’ health information while ensuring that healthcare providers can access the information they need to deliver effective care. Here are some key features of the PHIPA:

  • Scope: PHIPA governs all healthcare providers and organizations in Ontario, including doctors, hospitals, long-term care facilities, pharmacies, and health information custodians. It covers any information about an individual’s health or healthcare history, encompassing physical and mental health, healthcare services received, and payments.
  • Consent: Healthcare providers must obtain consent from individuals before collecting, using, or disclosing their personal health information, except in specific circumstances outlined by the Act.
  • Purpose Limitation: Personal health information can only be used or disclosed for the purposes for which it was collected unless additional consent is obtained or as allowed by law.
  • Access & Control: Individuals have the right to access their health information and request corrections if they find the information inaccurate or incomplete.
  • Security: Health information custodians must implement appropriate security measures to safeguard personal health information from unauthorized access, use, or disclosure.
  • Transparency: Organizations must inform individuals about their practices for managing personal health information and ensure their privacy policies are accessible.

The Office of the Information and Privacy Commissioner of Ontario (IPC) is responsible for enforcing PHIPA, the provincial legislation governing privacy. Individuals who feel their privacy is infringed can lodge complaints with the IPC. The Commissioner holds significant powers, including conducting investigations, performing audits, issuing directives, and proposing adjustments to ensure adherence to PHIPA.

Other industry-specific data privacy laws in Canada include the E-Health Legislation, the Bank Act, etc.

Key concerns and challenges covering data sovereignty in Canada

Some issues emerge in the discussion of data sovereignty in Canada. These are challenges and concerns businesses face to ensure compliance with Canada’s data sovereignty requirements. These concerns and challenges are highlighted below:

  • Cross-border data transfers

Transferring data across borders, especially to countries with differing legal systems, introduces risks of access by foreign governments or entities, posing privacy and data security challenges. Compliance with Canadian privacy laws and international agreements like GDPR demands significant resources due to the complexity involved in cross-border data transfers. And only a few businesses can afford these resources.

  • Privacy and security issues

Safeguarding against data breaches and unauthorized access is paramount due to the potential for substantial financial and reputational harm. The ever-changing landscape of cybersecurity threats creates the need for continuous enhancements to security protocols and measures.

  • Technological dependence

Several Canadian organizations rely on technology and cloud services offered by foreign firms, potentially subjecting them to foreign regulations such as the US CLOUD Act. The scarcity of homegrown alternatives further complicates efforts to maintain control over data sovereignty.

  • Regulatory compliance

Organizations, particularly those operating across various jurisdictions, face significant challenges in navigating the complexities of federal and provincial data protection regulations. The costs of adhering to these laws, especially for small and medium-sized enterprises (SMEs), can be substantial.

  • Public awareness & trust

Ensuring public trust in the management and protection of data is paramount. High-profile data breaches and the unauthorized use of personal information erode confidence in data security. Educating both individuals and organizations about data privacy rights and best practices is crucial to fostering a robust culture of data protection.

  • Emerging technologies

Emerging technologies such as artificial intelligence, big data analytics, and the Internet of Things (IoT) pose fresh challenges regarding data sovereignty. These innovations typically necessitate extensive data usage, prompting questions about the location and methods of data processing and storage.

These are a few of the concerns and challenges confronting Canadian Data Sovereignty. In the ensuing paragraphs, we will show you how InCountry can help you fix these issues.

Canadian data sovereignty requirements

Canadian data sovereignty requirements prioritize controlling and protecting data within the country’s borders, ensuring compliance with Canadian data laws and regulations, such as PIPEDA and other provincial equivalents. Below are some critical requirements:

  • Legal jurisdiction: Data collected and stored in Canada must adhere to Canadian privacy legislation, providing protections under laws like PIPEDA, PHIPA, etc.
  • Consent and control: Organizations must obtain consent from individuals to collect, use, and disclose their personal information, while individuals retain the right to access and correct their data.
  • Data localization: Sectors such as healthcare require data to be stored and processed within Canada to uphold privacy and security standards.
  • Security measures: Canadian privacy laws mandate that organizations implement security safeguards to prevent unauthorized data access, use, or disclosure.
  • Compliance and oversight: Regulatory bodies like the Office of the Privacy Commissioner of Canada oversee compliance, investigate complaints, and enforce penalties for non-compliance with data protection laws.
  • International data transfers: When transferring data outside Canada, organizations must ensure adequate safeguards to protect data privacy. Using contractual agreements or mechanisms recognized under Canadian law could be very helpful here.

Overall, Canadian data sovereignty requirements aim to safeguard privacy rights, enhance data security, and ensure responsible management of personal information within Canada’s legal framework.

How InCountry helps companies stay compliant with Canadian data sovereignty laws

At InCountry, we offer various solutions to ensure your company fully complies with data sovereignty laws. Our flagship platforms leverage cloud technology to securely store your clients’ data within Canada while enabling remote access. This solution significantly reduces reliance on cross-border data transfers, alleviating associated complexities. Should cross-border data transfer be necessary, our tools streamline and document these processes to ensure compliance with Canadian laws and international standards like GDPR.

With a proven track record in data management, we stand as a trusted partner committed to safeguarding and managing your clients’ data with excellence. 

Contact us today to discuss your compliance needs and discover how we can provide enduring solutions.