PIPEDA is Canada’s primary federal privacy law regulating private-sector organizations’ collection, use, and disclosure of personal data in commercial activities. It came into force in 2000 to guarantee that companies responsibly treat sensitive information while allowing the same individuals to control access and changes to that data. Compared with other similar but more comprehensive laws globally, PIPEDA applies to the commercial exchange of information.
Alternatives to PIPEDA are provincial privacy laws, such as Alberta’s Personal Information Protection Act (PIPA) and Quebec’s Act Respecting the Protection of Personal Information in the private sector, which provide province-specific privacy protections.
What makes PIPEDA important
- 94% of Canadians are concerned about how organizations handle their personal information and retain their data, signalling increased demands for more stringent privacy policies.
- Only 43% of companies fully comply with PIPEDA, leaving many businesses vulnerable to penalties.
- With 20% more cybersecurity breaches in Canada in 2023, compliance with PIPEDA has never been more top of mind.
- Non-compliance with PIPEDA can lead to fines of up to $100 000 for each violation, thus affecting the finances of any business.
What the decision-makers have to say
Organizations that bake in privacy, rather than bolt it on as an afterthought, will enjoy far better relationships with consumers and ensure a better method of mitigating risks.
This quote makes it clear: privacy compliance is your business’s VIP pass to ‘trust city.’ By weaving PIPEDA into everyday practices, you’re not only avoiding risk, you’re positioning yourself as the go-to brand that keeps data safe and secure. Talk about a competitive edge!
High-value case studies
As one of Canada’s largest e-commerce platforms, Shopify adheres to PIPEDA by ensuring that merchants collecting customer data meet privacy requirements. Shopify provides built-in privacy settings that allow businesses to request, delete, or anonymize customer information upon request. Additionally, the company encrypts sensitive data and requires two-factor authentication (2FA) for secure access.
RBC is one of Canada’s biggest banks. It has also implemented tight measures to ensure compliance with PIPEDA in protecting customer data. The bank encrypts all digital transactions, uses multi-step online banking authentication, and conducts annual security audits to detect vulnerabilities. In 2022, upon detecting a possible data breach, RBC quickly informed affected customers, reinforcing PIPEDA’s need for timely disclosure of breaches.
Overcoming the challenges
Challenge: The main issue most businesses face concerning PIPEDA is balancing the changing privacy laws with operational efficiency. With new technologies coming up daily, companies struggle to implement new security protocols in compliance with these regulations.
Solution: Businesses can use privacy management software that automatically tracks regulatory updates, manages consent collection, and flags potential non-compliance issues. Companies can also reduce manual errors by introducing automation for most processes, remaining compliant without disrupting business-as-usual activities.
Avoid penalties with this checklist
- Regularly carry out privacy audits to identify risks and update policies.
- Obtain explicit, free consent for the processing of personal data.
- Implement encryption of sensitive information with substantial access control.
- Train employees on the best practices concerning privacy to reduce human error.
- Deploy a data breach response plan to facilitate the PIPEDA requirement of notification.
