Canada: PIPEDA's Draft Breach Of Security Safeguard Regulations Provide Timely Guidance

Last Updated: September 20 2017
Article by Bernice Karn and Belinda Chiu

Last Thursday, Equifax reported a data breach, which may have affected up to 143 million consumers in the United States. The credit reporting company announced that between mid-May and July of this year, hackers accessed and stole consumer names, social security numbers, and other personal information held by Equifax. Canadian consumers were also affected, though the scope of the Canadian breach is not yet known. Consumers are understandably concerned about the ramifications of the hack, particularly as this announcement comes almost two months after the breach occurred, though Equifax has stated it took prompt action and engaged a cybersecurity firm after discovering the breach.

The Equifax announcement follows closely on the heels of the draft Breach of Security Safeguard Regulations ("Breach Regulations") released by the Ministry of Innovation Science and Economic Development Canada (ISED) over the Labour Day long weekend. Organizations concerned about how to report a data breach in Canada now have some guidance as set out in these new Breach Regulations. 

Background

The concept of data breach reporting was first introduced at the federal level in Canada by Bill s-4, the Digital Privacy Act, which came into force on June 18, 2015, and amended Canada's federal privacy law, the Personal Information Protection and Electronic Documents Act (PIPEDA). The revisions to PIPEDA mandated that organizations report data breaches that pose a "real risk of significant harm" to individuals and introduced record keeping requirements. The draft Breach Regulations specify the minimum requirements for reporting and notice, as well as the record-keeping requirements.  

Following the 30-day comment period, the ISED may make further amendments or publish the final Breach Regulations. The ISED has stated that the coming into force of these Breach Regulations will be delayed to allow organizations sufficient time to establish processes and procedures for tracking and reporting data breaches. 

Data Breach Reporting Requirements 

1.    Do all data breaches need to be reported?

The reporting regime mandates that data breaches that pose a "real risk of significant harm" must be reported to the Office of the Privacy Commissioner of Canada (the "Commissioner") and notification of the breach must be given to affected individuals. In assessing the risk of a data breach, organizations must consider the sensitivity of the information involved and the likelihood that such information will be misused. Other organizations, such as law enforcement agencies, must also be notified if they may be able to mitigate the harm to affected individuals. A data breach such as the one suffered by Equifax would likely qualify as the type of breach that must be reported under the new Breach Regulations, as the company held sensitive personal information such as social security/insurance numbers, and the probability of misuse in areas such as identity and credit theft is high.  

Report to the Commissioner

When notifying the Commissioner, the organization must also provide a data breach report. The Breach Regulations set out the following minimum requirements for these types of reports:

(a)    a description of the circumstances of the breach and, if known, the cause;

(b)    the day on which, or the period during which, the breach occurred;

(c)    a description of the personal information that is the subject of the breach;

(d)    an estimate of the number of individuals in respect of whom the breach creates a real risk of significant harm;

(e)    a description of the steps that the organization has taken to reduce the risk of harm to each affected individual resulting from the breach or to mitigate that harm;

(f)    a description of the steps that the organization has taken or intends to take to notify each affected individual of the breach in accordance with subsection 10.1(3) of PIPEDA; and

(g)    the name and contact information of a person who can answer, on behalf of the organization, the Commissioner's questions about the breach.

These requirements do not preclude organizations from including additional information in their breach reports. While these new reporting requirements are generally in line with the regulations already in force under Alberta's Personal Information Protection Act, one notable difference is that the proposed federal Breach Regulations do not require an assessment of risk of harm to individuals, which makes filing these reports significantly less onerous than in Alberta.

Notification to Affected Individuals

The proposed Breach Regulations also list the content of notifications to be provided to affected individuals. These requirements bear similarities to those in Alberta. Notifications to individuals should contain much of the same information as in the report to the Commissioner. Additionally, organizations must provide a toll-free number or email through which individuals can obtain more information, and must inform individuals of any internal complaint procedures and about their right to file a complaint with the Commissioner. 

The manner of notification is also prescribed, and notably provides some flexibility for organizations, allowing organizations to communicate notifications via email (with consent), letter, telephone or in person. Indirect notification, through a posting on the organization's website or through an advertisement, is also an option in limited circumstances such as when direct notification would cause further harm to the individual or would be prohibitively expensive. 

2.    Record Keeping Requirements

The PIPEDA amendments also require organizations to maintain a record of every breach and there is no applicable minimum threshold. The Breach Regulations require that these records be retained for a period of 24 months from the date that the organization "determines" that a breach has occurred. (The implication is that, until a breach is confirmed, there may not be a requirement to keep a record of every possible incident.) These requirements may be of concern for larger organizations that deal with massive amounts of data and frequent security threats, but ISED has highlighted that mandatory record keeping will encourage organizations to maintain and implement tracking for data security incidents. Further, the definition of "record" allows for a broad interpretation, and organizations will be permitted to determine the form and content of the records so long as there is sufficient information to satisfy the data breach report requirements above. Implicitly, this means that a report meeting the data breach reporting requirements would be a sufficient record. The Commissioner may also request the data breach records for a two-year window; a time frame intended to align with the limitation period for civil action in most jurisdictions.

Impact on Businesses & Consumers

While the Breach Regulations, at first glance, appear to place an onerous administrative burden on organizations, they are generally flexible and provide a range of ways for organizations to comply. For example, for those organizations that have already implemented data security protocols and breach notification procedures (such as those mandated by privacy laws in other jurisdictions), compliance with the Breach Regulations may only nominally increase costs to the organization while reinforcing best practices for the industry.

Organizations that are familiar with data breach reporting obligations in the United States may find the current draft regulations disappointing. Unlike in the US, where reporting obligations are generally triggered if certain information is impacted (e.g., financial details, health information, social security numbers, government identification), the Breach Regulations only refer to data breaches resulting in a "real risk of significant harm" as a threshold for requiring mandatory reporting. The lack of prescriptive notification triggers or further guidance on what types of breaches must be reported means that organizations will need to make their own determinations on what they believe to be "reportable" breaches. Without additional clarity from the regulator, or until precedents are established once the rules are in force, there is a possibility that organizations may inappropriately screen out data breaches based on their own internal assessments and industry-specific risk profiles – to the detriment of affected individuals.

Ultimately, although the Breach Regulations are a step in the right direction to protect personal information of Canadians, it remains to be seen if organizations will respond practically and effectively once they are in force. Interested parties may submit representations concerning the proposed regulations until October 2, 2017.

For the full text of the draft Breach Regulations and the Regulatory Impact Analysis Statement, please click here.  

The contribution of Tegan O'Brien, articling student, in the preparation of this article is gratefully acknowledged.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions