Canada is an essential market for both United States and international businesses, with data privacy remaining a significant concern for government officials and organizations alike. Canada’s data privacy framework is characterized by a complex patchwork of federal, provincial, and sector-specific laws, with Quebec standing out for its particularly stringent requirements. 

This blog post is an installment in Reed Smith’s series examining the current state of data privacy laws in major jurisdictions across the United States and around the world. In this post, we will explore the key regulatory challenges and considerations presented by Canada’s data privacy and AI legal landscape.

PIPEDA 

Canada was one of the first countries to implement a comprehensive privacy law with the enactment of the Personal Information Protection and Electronic Documents Act (“PIPEDA”) in 2000. PIPEDA governs all private-sector organizations that collect, use, or disclose personal information in the course of commercial activities (PIPEDA, Part 1, (4)(1)). The definition of “commercial activity” under PIPEDA is broad, encompassing any regular course of conduct that is commercial in nature (PIPEDA, Part 1, (2)(1)). In addition to its application to private organizations, PIPEDA also extends to employees and job applicants of federally regulated entities, such as banks, transportation companies, and telecommunications providers (PIPEDA, Part 1, (4)(1)(b)).

Personal information and sensitive personal 

PIPEDA regulates the collection, use, and disclosure of personal information (PIPEDA, Part 1, (3)). Personal information is defined broadly to include any information about an identifiable individual (PIPEDA, Part 1, (2)). Although PIPEDA does not specifically define “sensitive personal information,” the Office of the Privacy Commissioner of Canada has clarified that any personal information may be considered sensitive depending on the context and the potential risks associated with its collection, use, or disclosure. Assessing whether the personal information being processed is sensitive is important, as it influences the type of consent required under PIPEDA for processing that information. The sensitivity of the information will determine whether express or implied consent is appropriate in a given situation.

Consent under PIPEDA: Implied vs. express 

Canada operates under a consent-based privacy regime, which requires organizations to obtain consent from individuals before collecting, using, or disclosing their personal information. Under PIPEDA, both implied and express consent are recognized, and the appropriate form of consent depends on several factors. For example, express consent is likely required when (1) the information is considered sensitive information, (2) the uses of the personal information are outside of the reasonable expectations of the data subject, or (3) processing of the personal information could result in meaningful harm or poses a significant risk of harm to the individual (Id.)

Regardless of whether implied or express consent is used, certain requirements must always be met. Individuals must be clearly informed about the specific processing activities for which their consent is being sought (Id.) They must also be provided with a genuine opportunity to refuse or withdraw consent at any time (Id.) Additionally, organizations should maintain records of the consent obtained and ensure that individuals are presented with a meaningful "reject" or "no" option as part of the consent process (Id.) These elements are essential to ensure that consent is valid and meaningful under PIPEDA.

Other obligations 

PIPEDA sets out ten foundational principles that organizations must follow when collecting, using, or disclosing personal information (PIPEDA, Schedule 1, Section 5). In addition to valid consent (PIPEDA, Schedule 1, Section 5, 4.2, Principle 3), organizations must ensure that personal information is collected, used, and disclosed only for purposes that are identified and documented—typically within a privacy policy (PIPEDA, Schedule 1, Section 5, 4.2, Principle 2). The collection of personal information must be limited to what is necessary for the specified purposes, and organizations must restrict the use, disclosure, and retention of personal information accordingly (PIPEDA, Schedule 1, Section 5, 4.2, Principle 5). 

Each of PIPEDA’s principles corresponds to practical steps that organizations should incorporate into their privacy programs. For example, organizations should maintain an up-to-date, PIPEDA-compliant privacy policy that clearly communicates their data practices to individuals. Internal policies and procedures should also be established to address the security and protection of personal information, ensuring compliance with PIPEDA’s requirements for safeguarding data (PIPEDA, Schedule 1, Section 5, 4.2, Principles 7, 8). 

Provincial laws 

As of the date of publication, three of Canada’s ten provinces, Alberta, British Columbia ("BC"), and Quebec, have enacted their own private sector privacy laws governing the collection, use, and processing of personal information.

Alberta and British Columbia 

Alberta and British Columbia have each established private sector privacy statutes that are similar in scope and substance. Unlike PIPEDA, which applies only in certain circumstances, the privacy laws in Alberta and BC generally apply to most private sector organizations operating within those provinces, subject to specific exceptions (BC Personal Information Protection Act 3(1), (2) & Alberta Personal Information Protection Act, 4(1), (3)). Notably, these provincial laws extend to employee personal information, whereas PIPEDA’s coverage of employee data is more limited and typically applies only to federally regulated businesses.

The privacy laws in Alberta and BC have been recognized as “substantially similar” to PIPEDA. As a result, compliance with the applicable provincial law is typically sufficient to meet PIPEDA’s requirements for activities occurring within Alberta or BC, although organizations should remain mindful of any exceptions or additional obligations that may apply (Id.).

Quebec 

Quebec’s privacy law, formally known as the Act Respecting the Protection of Personal Information in the Private Sector (“Quebec Privacy Law ”), provides a comprehensive legal framework governing the collection, use, and disclosure of personal information by private sector organizations operating within the province. Designed to safeguard the privacy rights of individuals, this legislation imposes strict obligations on businesses to ensure transparency, accountability, and security in their handling of personal data. Significant amendments to the Quebec Privacy Law were enacted in 2021, with the final phase of these changes scheduled to take effect in the fall of 2024.

Applicability 

The Quebec Privacy Law applies to the collection, holding, use, or communication of personal information by organizations operating in Quebec in the course of carrying on an enterprise (Quebec Privacy Law, Article 1). The definition of personal information is broad, encompassing any information that relates to a natural person and allows that person to be identified, either directly or indirectly (Quebec Privacy Law, Article 2).

Obligations

As with PIPEDA, the Quebec Privacy Law does not have GDPR-like legal bases that can be used to process personal information. Rather, the Quebec Privacy Law primarily relies on consent, both implied and express, to process personal information depending on the nature of the processing activity (Quebec Privacy Law, Article 8(4)). For example, the processing of sensitive personal information requires express consent (sensitive personal information is sensitive personal information if, by its nature, entails a high level of reasonable expectation of privacy such as medical or biometric information (Quebec Privacy Law, Article 12) (Quebec Privacy Law, Article 12).

Organizations are also required to appoint a data protection officer (Quebec Privacy law, Article 3.1). By default, this role is assigned to the person with the highest authority in the organization, such as the chief executive officer, but the responsibilities may be delegated to another individual by contract (Id.). 

A key obligation for the Quebec Privacy Law is the use of data privacy impact assessments. The Quebec Privacy Law requires organizations to conduct these assessments in certain situations, such as when personal information is transferred anywhere outside of Quebec (Quebec Privacy Law, Article 17). 

In addition, the Quebec Privacy Law imposes several obligations commonly found in global privacy regimes, including requirements to respond to data subject requests, notify authorities and affected individuals of data breaches, and implement appropriate security measures to protect personal information.

Fines and private right of action 

The Quebec Privacy Law establishes some of the highest penalties among global privacy laws. Quebec’s data protection authority has the authority to issue fines of CAD $10,000,000 or two percent of the organization’s worldwide turnover, which ever is greater (Quebec Privacy Law, Article 90.12). Moreover, courts in Quebec have the ability to issue even higher fines that can reach up to the greater of CAD $25,000,000 or four percent of the organization’s worldwide revenue (Quebec Privacy Law, Article 91). In addition to regulatory enforcement, the Quebec Privacy Law grants individuals the right to bring legal action against organizations that violate the law (Quebec Privacy Law, Article 93.1).

Canada’s Anti-Spam Legislation 

Canada’s Anti-Spam Legislation, commonly referred to as “CASL,” establishes strict rules governing the sending of commercial electronic messages, including emails, text messages, and other forms of electronic communication. Enacted in 2014, CASL prohibits the sending of commercial electronic messages without the recipient’s express or implied consent, and requires that all such messages include clear identification of the sender and an easy-to-use unsubscribe mechanism (Canada’s Anti-Spam Legislation, Sub-Sections 6-11). CASL applies to messages sent to or from Canadian computers and devices, regardless of where the sender is located (Canada’s Anti-Spam Legislation, Section 12). Violations of CASL can result in significant administrative monetary penalties, with fines reaching up to CAD $10,000,000 for businesses (Canada’s Anti-Spam Legislation, Section 20). 

Artificial intelligence 

Canada’s Artificial Intelligence and Data Act (“AIDA”) was proposed in June 2022 as part of Bill C-27, aiming to establish a legal framework for the responsible development and use of artificial intelligence systems in Canada by promoting transparency, accountability, and safety through requirements for organizations that design, develop, or deploy high-impact AI systems. Key provisions included obligations to assess and mitigate risks associated with AI, ensure data quality, provide clear documentation about how AI systems function, and proposed oversight mechanisms such as appointing a regulator with the authority to investigate non-compliance and impose penalties (Bill C-27, Part 3, Artificial Intelligence and Data Act). However, AIDA failed to progress through the legislative process in 2023, facing significant criticism for its vague language, lack of detailed enforcement measures, and insufficient stakeholder engagement. These concerns ultimately prevented AIDA from advancing to become law and, along with the rest of Bill C-27, resulted in its official withdrawal in January 2025, leaving Canada without a comprehensive federal framework specifically governing artificial intelligence at the time of writing.

Conclusion 

In summary, Canada’s data privacy framework is multifaceted, requiring organizations to carefully assess their obligations under both federal and provincial laws. PIPEDA establishes baseline requirements for the collection, use, and disclosure of personal information in commercial activities, while provincial laws in Alberta, British Columbia, and Quebec introduce additional or more stringent requirements, particularly regarding employee data and sensitive information. Quebec’s recent legislative amendments have further raised the bar for privacy compliance, introducing significant fines and new operational mandates. Additionally, CASL imposes strict rules on electronic communications, with substantial penalties for non-compliance. For businesses operating in or engaging with the Canadian market, understanding the interplay between these laws is essential to maintaining compliance, protecting individuals’ privacy rights, and mitigating legal and reputational risks.