The government’s omnibus budget implementation bill (Bill C-59) has attracted attention for its inclusion of copyright term extension for sound recordings and the retroactive changes to the Access to Information Act. Another legislative reform buried within the bill is a significant change to PIPEDA, Canada’s private sector privacy law. The bill adds a new Schedule 4 to PIPEDA, which allows the government to specify organizations in the schedule to which PIPEDA applies. Bill C-59 immediately adds one organization: the World Anti-Doping Agency (WADA), which is based in Montreal.
The change to PIPEDA is designed to address European criticism that WADA is not subject to privacy laws that meet the adequacy standard under EU law. WADA is currently subject to Quebec’s private sector privacy law, which meets the “substantial similarity” standard under Canadian law, but has not received an adequacy finding from Europe. In June 2014, the EU Working Party that examines these issues released an opinion that raised several concerns with the provincial law. The goal of the criticism appears to be to deem Montreal unfit to host WADA and transfer its offices to Europe. The Canadian government wants to stop the privacy criticisms by deeming PIPEDA applicable to WADA. Since PIPEDA has received an adequacy finding, presumably the hope is that the legislative change will address the European concerns.
Leaving aside the obvious problem of burying privacy reforms in a budget bill (in fact, privacy, copyright, and access to information all within a single bill with little or no study of those reforms), the change is a potential target for a constitutional challenge. Given how the government has justified PIPEDA in the past, it is difficult to see how this change would pass constitutional muster.
When PIPEDA was first introduced in the late 1990s, the government was careful to limit its scope to commercial activities. The reason had to do with the constitution. Privacy law fits within the provincial power over property and civil rights. The federal government sought to regulate privacy on a national basis by relying on its trade and commerce power. That led to a model that limited application in the first three years to federally regulated entities and the creation of a “substantial similarity” model that allowed provinces to establish their own private sector privacy law. Quebec’s law pre-dates PIPEDA and has received the designation. Notwithstanding the attempt to limit its scope, Quebec immediately filed a constitutional challenge against the law (which has since remained largely dormant).
While there have even been some questions about relying on trade and commerce for PIPEDA, particularly after the Supreme Court of Canada decision involving a national securities regulator, there has never been any doubt that PIPEDA applies solely to commercial activities (Privacy Commissioner interpretation bulletin) as that is essential for the constitutional basis for the law. The problem with the Bill C-59 change is that it seeks to extend PIPEDA to non-commercial activities. The government states:
While PIPEDA provides clear rules for organizations in the context of commercial activity, it does not currently apply to organizations such as the World Anti-Doping Agency, an international, independent organization headquartered in Montreal. Economic Action Plan 2015 proposes to clarify through legislative and regulatory amendments that Canada’s privacy protection laws extend to organizations such as the World Anti-Doping Agency, thereby helping to ensure that all personal information they hold in Canada is adequately protected.
The government is free to amend legislation, but it is not free to ignore the constitution. Simply stating that WADA is now subject to PIPEDA is subject to challenge because to do so calls into question the constitutional foundation of the entire law. If PIPEDA applies to non-commercial activities, it needs a different constitutional basis. By encroaching on provincial powers – in this case seeking to impose a federal law where a provincial Quebec law applies – the government is proposing to solve one problem by creating a much bigger one.