Running a small- or medium-sized business (SMB) in Ontario entails following national and local mandates, such as tax policies and guidelines on how to reopen establishments during the pandemic. It also requires abiding by Canada’s data privacy laws.
Because almost all businesses today collect, store, or share their clients’ digital information, consumers have become increasingly concerned with how these data are used. To this end, the government has placed some safeguards to ensure consumer privacy.
What data privacy laws in Canada should SMBs be aware of?
Some data privacy laws in the country can affect the way you operate your SMB. Perhaps the most important regulation you should be aware of is the Personal Information Protection and Electronic Documents Act (PIPEDA), a federal law that sets forth rules for handling personal information gathered through a business’s commercial activities. It applies to all federally regulated Canadian businesses, except those in provinces or territories that have their own privacy laws, such as British Columbia, Alberta, and Quebec. However, PIPEDA may still apply to businesses in these areas if any personal information crosses jurisdiction.
Be sure to review your local legislation on data privacy as well. Ontario, for instance, has the Freedom of Information and Protection of Privacy Act, which grants individuals the right to request access to information in the custody of public bodies. The province also has the Municipal Freedom of Information and Protection of Privacy Act, which protects consumer information on government records.
Lastly, check if there are sector-specific privacy laws that you need to comply with. For example, banks are subject to the Bank Act, which stipulates how federally regulated financial institutions should manage the use and disclosure of personal financial information.
What does privacy legislation mean for my SMB?
Canada takes data privacy seriously, and violating legislation can result in hefty fines, lengthy litigation, reputational damage, or permanent business closure. Here are things you should do to avoid these unpleasant outcomes:
Create a solid privacy policy
Your privacy policy should state clearly what information you will collect, how you will collect them, for what purposes, and in what way they will be used. This document should be readily available to your customers; for instance, you can publish it on your website's homepage. Customers appreciate doing business with an honest organization that respects their privacy rights — this transparency may even become a competitive advantage for your business.
If you feel the need to strengthen your privacy policy, you can refer to this guide from the Office of the Privacy Commissioner, which can help you better live up to your responsibilities under PIPEDA.
Minimize employee-associated risks
Per the Office of the Privacy Commissioner of Canada, an employee error is not a valid excuse for PIPEDA violations. This is why you should pay particular focus on data privacy risks posed by your employees. Implement security measures that limit employee access to client information, and, if necessary, train and retrain your staff on how to properly handle data. You must also set disciplinary actions for failing to follow privacy procedures.
Assign a Privacy Officer
Every business subject to PIPEDA must designate a Privacy Officer who will be accountable for that organization’s data privacy compliance. The identity of the Privacy Officer should be provided on request, and their contact information should be posted on the company website conspicuously. What’s more, customer service representatives should know about the Privacy Officer’s information and how to direct customers to this individual.
Don’t ask for Social Insurance Numbers (SINs)
Never require your customers to provide a SIN to be able to transact business with your company. Unless there is a legal requirement for customers to give out their SIN, a driver’s license will suffice in identifying an individual or validating their address. Your forms should also explicitly state that customers are not required to disclose their SINs.
Disclose data breaches
Data breaches can strike businesses of any size or industry, so your SMB must have a data breach disclosure policy In case you fall victim to one. According to the Breach of Security Standards Regulations, any business that experiences a breach of data involving personal information must do the following:
- Determine whether the breach poses a “real risk of significant harm” in any way to any individual. “Real risk of significant harm” includes bodily harm, humiliation, reputational damage, financial loss, loss of employment or business, loss of property, and identity theft, among others.
- If the data breach does pose a real risk of significant harm to anyone, notify the affected individuals as soon as possible.
- Report the breach to the Privacy Commissioner as soon as feasible.
- Notify any third party that may also be affected by the data breach, even if they are not directly involved. For instance, if the breach exposed an individual’s credit card information, you should notify the issuer of the credit card immediately.
- Record all information about the data breach, including the steps your company undertook to mitigate its effects, and make these records available to the Privacy Commissioner.
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