Legislative Update

A couple of recent legislative changes and initiatives will be of interest to due diligence and investigative researchers.

Amendments to PIPEDA

The Digital Privacy Act, recently passed by Parliament and soon to come into force, amends the federal Personal Information Protection and Electronic Documents Act (PIPEDA), which applies to private sector organizations that collect, use, or disclose personal information in the course of commercial activities. As the Data Protection Report notes:

The revised PIPEDA will specifically permit the sharing of personal information without individuals’ consent in the context of due diligence for business transactions, such as M&A, a partial sale of assets or transfer upon insolvency, provided certain conditions are met by the parties to the transaction. Organizations engaging in these types of business transactions will need to ensure compliance with the statutory requirements that resemble those found in Alberta’s privacy legislation. For example, under the PIPEDA amendments, only information necessary to the transaction may be communicated pursuant to an undertaking to protect the information with appropriate security measures and to use it solely for purposes related to the transaction. If the transaction does not proceed, the information must be returned. Otherwise, it may only be used after completion of the transaction for the purposes for which it was originally collected and if certain conditions are met, including notice to the individuals concerned.

The updated legislation also gives organizations the ability to disclose personal information to other organizations for the purposes of investigating a breach of an agreement, or a contravention of a Canadian law, or in connection with detecting, preventing or suppressing fraud.

Limits to Ontario Police Record Checks

A proposed bill in Ontario will standardize and limit the kinds of information released in police record checks. Police would no longer be able to disclose mental health information and would only release non-conviction records, such as acquittals, in limited circumstances to potential employers and others in background checks.

Quick Tip Tuesday: Searching for Corporate Directors

Today’s quick tip is from a presentation I’ll be giving on May 14 on business backgrounding and due diligence research. If you’re an info pro in the Toronto area, please join me for what I hope will be an information-rich session. You can sign up here.

In Canada, corporations can be formed in all provinces and territories as well as federally. However, searching by director name is only possible for a federally registered corporation. You can use the site: command in Google on the Corporations Canada site, or use the Canadian Federal Corporations and Directors database in FPInfomart, though this latter resource is populated by the vendor and is not comprehensive.

Quick Tip Tuesday: Financial Filings

All Canadian publicly traded companies must file documents through their provincial or territorial securities commission. These filings are publicly available through SEDAR.

A little-known tip is that Canadian companies that also trade in the U.S. sometimes have to file there earlier than they do in Canada. So if you’re looking for current filings and your company of interest also trades in the U.S., look for filings on EDGAR.

Free Speech and Privacy at Work

When can an employee’s off-duty web postings or other activities be reasonably monitored and controlled by an employer in order to protect the business? This has been a recurring question since the rise of the public internet and especially of social media. This article does a nice job of reviewing the case law and dissecting the issues of privacy, free speech, and employer loyalty with regard to online postings, and notes that:

It is fair to say that although technology has changed the playing field, the principles with respect to off-duty conduct in Canada have not changed. As long as employees must remain subordinate and loyal to their employer, there are limits to what they can express, even on their own devices and even if they are off-duty.

While an employer can never completely control the online behaviour of its employees, it can manage the delicate balance between protecting the business and respecting the rights of employees to privacy and free speech by putting in place “a well-drafted and well-communicated policy which clearly identifies acceptable workplace practices and use of company equipment as well as personal equipment, both at work and off work.”

Recent Developments in Privacy Law

In Canada, we have some of the most stringent privacy legislation in the world, and in my public records research, I’m constantly coming up against privacy laws that complicate my work and keep me from finding as much information about private citizens as I’d like. As a private citizen myself, however, I’m grateful for these laws, which seem to get strengthened whenever they’re challenged in the courts.

Even with police searches, the trend seems to be toward recognizing privacy interests. In a recent ruling, for example, the Supreme Court of Canada declared unanimously that a specific search warrant  is required to search the contents of a personal computer or cellphone. The Court drew a distinction between computers, which contain a large amount of personal information, and other types of receptacles in the home. When it comes to privacy concerns, the computer must be treated as a separate place:

In effect, the privacy interests at stake when computers are searched require that those devices be treated, to a certain extent, as a separate place. Prior authorization of searches is a cornerstone of our search and seizure law. The purpose of the prior authorization process is to balance the privacy interest of the individual against the interest of the state in investigating criminal activity before the state intrusion occurs. Only a specific, prior authorization to search a computer found in the place of search ensures that the authorizing justice has considered the full range of the distinctive privacy concerns raised by computer searches and, having done so, has decided that this threshold has been reached in the circumstances of a particular proposed search. 

In another recent decision, however, the Supreme Court highlighted the importance of freedom of speech when it conflicts with privacy concerns. In a case that involved a union photographing and videotaping people crossing a picket line during a strike, the Court struck down Alberta’s privacy legislation. The Court stressed the basic importance of freedom of expression in the context of labour disputes, saying the law imposed undue restrictions on the union’s ability to communicate and promote its case during a legal strike. It gave the province a year to make appropriate changes.

Meanwhile, Manitoba, which recently enacted its Privacy Information Protection and Identity Theft Prevention Act (“PIPITPA”), may also have to make some changes, as it based its legislation on the Alberta model. Manitoba is now the fourth Canadian province to enact general private sector privacy protection legislation (the others are British Columbia, Alberta and Quebec), the key feature of which is the breach notification provision: an organization must notify affected individuals if personal information under the organization’s control is lost, accessed or disclosed without authorization.

Finally, this news is a good reminder that being in contravention of privacy laws can cost businesses: the Federal Court recently ordered Bell Canada to pay $21,000 in damages in connection with conducting a credit check on a customer without consent.

Wondering about the various public and private sector privacy legislations in Canada? This site has a good overview.

New Online Case Law Additions in Canada and the U.S.

The trend toward providing more free online access to court opinions got a massive boost recently in both Canada and the U.S. In Canada, the Law Society of Upper Canada, the copyright holder of the Ontario Reports, made available to CanLII the full historical collection of OR case reports (15,000 decisions published from 1931 to 2013), increasing CanLII’s database for Ontario courts by about 25%.

In the United States, the federal Judiciary and the Government Printing Office partnered through the GPO’s Federal Digital System, FDsys, to provide public access to more than 750,000 opinions, many dating back to 2004. In addition to PACER, this is another source to access court-related information. [via InfoDocket]