Federal Liberals on Thursday introduced privacy legislation that would give Canadians more control over how their personal data is used by commercial entities, impose fines on non-compliant organizations and introduce new rules for the use of artificial intelligence.
This is the first major update in this area of policy since before the advent of Facebook, Twitter or even Pinterest, a platform that Innovation Minister François-Philippe Champagne repeatedly mentioned at a press conference in the afternoon.
The proposed legislation, Bill C-27, is a long-awaited step toward Champagne’s mandate to advance the Digital Charter, a series of principles designed to strengthen consumer privacy protections and guide the development of the digital economy.
He told reporters that it was “one of the strictest frameworks to be found among the G7 countries”.
“We are racing to the top,” said Justice Minister David Lametti.
The bill, called the Digital Charter Implementation Act of 2022, shares a title and most provisions with an earlier bill introduced by the Liberals in late 2020 that did not become law.
While some advocates had hoped for a more formal enshrinement of privacy as a fundamental right, the bill’s updated preamble states that the protection of privacy interests is “essential to individual autonomy and dignity, as well as to the full realization of fundamental rights and freedoms,” and states that the intention to harmonize Canadian regulations with international standards.
It will create the Consumer Privacy Protection Act to give Canadians more control over their personal information and how it is handled by digital platforms.
This includes requiring companies to obtain the consent of the person whose information they are seeking, using plain language that “that person can reasonably be expected to understand.”
Under the new rules, individuals must be able to securely transfer their data from one organization to another or have their data permanently deleted if they withdraw their consent to its use.
The personal information of minors is newly defined in the bill as “confidential information” and its deletion at their request or at the request of their parents will be subject to fewer exceptions.
While previous attempts by the Liberal government to introduce new privacy rules in the private sector were criticized by some as too weak, the new version does not expand the powers it gives to the federal privacy commissioner.
The commissioner will be able to investigate complaints, order companies to comply and recommend fines if they don’t.
An ordering tribunal will then review the recommendations and impose a penalty. The most severe penalty is that non-compliant companies will pay five percent of their global revenue or $25 million, whichever is greater.
For the first time, the bill creates rules for the responsible development of artificial intelligence systems and criminal penalties for those who abuse new technologies.
The proposed AI and Data Act would require companies to document their rationale for AI development and report on their compliance with the safeguards it sets out.
The AI and Data Commissioner will have the power to order independent audits of companies as they develop the technology, and the minister will have the power to register compliance orders with the courts.
Organizations developing artificial intelligence can be prosecuted for the use of illegally obtained data, as well as if there is an intention to cause serious harm or economic loss.
It would also be a crime to make an artificial intelligence system available for use knowing that it could cause serious physical or psychological harm or significant property damage.
Companies welcome change
The Canadian Chamber of Commerce said in a statement Thursday that the changes are welcome but long overdue.
“The law is not keeping up with the pace of change or with Canada’s international competitors,” said Mark Agnew, the organization’s senior vice-president.
“The so-called boundaries between ‘digital’ and ‘traditional’ businesses no longer exist, and Canadian laws must adapt to this reality or our businesses risk falling behind their international counterparts.”
“Canada needs 21st century privacy legislation to help get the job done. It is time to get to work and pass Bill C-27 without further delay.” Read our full statement from @mark_agnew here: https://t.co/vU86wYp8bU #cdnpoli #BillC27 #cdnbiz
In a media statement, the Canadian Marketing Association (CMA) called the legislation “an important and long-awaited step toward modernizing Canada’s private sector privacy law.”
“An updated privacy framework is urgently needed to ensure that consumers have up-to-date protections and that the companies that contribute to our economic recovery have clear and consistent privacy rules that will foster innovation and growth,” said Sarah Clodman, Vice President CMA in Public Relations and Opinion. management, the message says.
The CMA said it would study the bill and provide its proposals to parliamentarians in the coming weeks.
With the House of Commons soon to go into summer recess, it is unlikely that the bill will be discussed much before the fall.
A new privacy officer has been appointed
Daniel Therrien, who has long pushed for reforms as the federal privacy commissioner, criticized the previous bill as “generally a step backwards” compared to the current one.
It would give consumers less control and organizations more flexibility to monetize personal data without increasing their accountability, he said last May, before the legislation expired after the general election.
Therrien, whose term as commissioner recently ended, also said the legislation puts commercial interests ahead of people’s privacy rights, and he favors a framework that enshrines privacy as a human right.
Philippe Dufresne, the government’s candidate to replace Therrien, told a House of Commons committee this week that the upcoming bill should recognize privacy as a “fundamental right.”