Evidence of meeting #33 for Industry, Science and Technology in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pipeda.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Chris Padfield  Director General, Digital Policy Branch, Department of Industry
John Knubley  Deputy Minister, Department of Industry
Kelly Gillis  Associate Deputy Minister, Department of Industry

11:50 a.m.

Conservative

The Chair Conservative David Sweet

Thank you, Ms. Gillis.

Mr. Warawa, you have five minutes.

11:50 a.m.

Conservative

Mark Warawa Conservative Langley, BC

Thank you, Chair.

Thank you, Minister, for being here.

I think it's very important that we protect the rights and the personal information of Canadian consumers. We realize, with regard to the digital economy and how it's evolved so dramatically over the last few years, that it's important that we address the concerns we hear from Canadians.

With respect, Chair, I hear from the NDP that we should maybe amend what has come to us from the Senate.

Minister, if we were to delay and amend, would Bill S-4 then have to go back to the Senate to get passed? My concern is that this is needed, Canadians want this, and a vast majority of Canadians want this passed, and if we amend it, what's the chance of it passing in this Parliament? It's needed.

11:50 a.m.

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

Well, to answer the political question that I guess in part came from Ms. Nash, as a committee you can propose amendments and consider them, as with other legislation that we've brought forward, like the Copyright Modernization Act, and so on. You will vote on them and consider them, and they will be considered by the House at report stage when the bill comes back.

There's a procedural issue, of course, in that if the bill is amended it does go back to the Senate for reconsideration of the bill, because the process is reversed. But I certainly wouldn't advocate taking away from members of Parliament their right to deliberate over legislation and offer thoughtful amendment if it strengthened the bill.

To Ms. Nash's point, if members of this committee have amendments, if any member of this committee has suggestions on how the legislation might be improved, we can certainly do all we can to provide this committee with the necessary background information to understand its implications for the bill, and whether or not it would in fact strengthen it.

11:55 a.m.

Conservative

Mark Warawa Conservative Langley, BC

Thank you, Minister.

Chair, we will be discussing this in great detail. We'll be calling a number of witnesses. The reality is that in our calendar we have about 15 meetings in the rest of this Parliament. If it's not passed, forwarded to the House and then passed, this will not be going ahead in this Parliament. I believe it's needed. I believe we've heard—and the Senate heard—that this reaches the balance.

Minister, just to reconfirm, there is a review built into Bill S-4. This will be reviewed in five years to see if it's effective and if there are any problems with it. Is that correct?

11:55 a.m.

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

It can be reviewed at any time. This committee can choose its own business. You can review it the day after, if you like. The committee can do whatever it wants. But as my deputy points out, this is the third time we've taken a run at this legislation and updating PIPEDA, so there is some urgency.

I was in opposition for two terms and I understand the nature of chastising governments for reasons real and imagined. That's fine, but one of the reasons we took the approach, why it is Bill S-4, and why we tabled it in the Senate first, is that this committee had a very full agenda. Parliament itself had a very full agenda, with a number of high-profile and complex pieces of legislation through the fall session of Parliament, and we wanted to get going on this. We wanted to get forward traction.

Of course, our legislative process requires it to have the support and consent of both houses of our bicameral legislature. We wanted to get it passed and moving forward, keeping in mind that we do have a campaign coming up this fall and House time is precious and limited. We reversed the process for that reason: because we do want this legislation to get passed and we do want it to go forward.

We see it as essential for a number of reasons, including taking full advantage of the digital economy and protecting Canadians online. There is I think a growing anxiety and an expectation amongst Canadians that the government do all it can in order to protect the privacy of Canadians online, not only in terms of the Privacy Act and citizen engagement with the Government of Canada in ensuring that their privacy is protected when they provide their information to the government, but also when they are doing so in the private sector.

It has now passed the Senate after consideration and deliberation, and there are a number of amendments that were debated at committee. This committee of course can fill its schedule and consider this legislation as it wishes, but it certainly is my desire that the bill move forward and be adopted so that we can protect Canadians and give Canadians the confidence they deserve.

11:55 a.m.

Conservative

The Chair Conservative David Sweet

Thank you, Minister.

Ms. Nash, you have two minutes, from the calculation of what is left after the last question.

11:55 a.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Thank you.

Would you like to...?

11:55 a.m.

NDP

Annick Papillon NDP Québec, QC

Yes, I'm going to continue.

Bill S-4 would give the Privacy Commissioner additional powers to enter into compliance agreements with organizations. In light of the fact that the date of the budget has been postponed numerous times—it won't be before April—has the government committed additional financial and human resources to the commissioner so that he can fulfill his new functions?

You have been in power for nearly 10 years and you are preparing a new budget. Can you assure us that the commissioner will have sufficient financial and human resources to do the job properly?

11:55 a.m.

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

That's a good question.

Yes, we believe that the commissioner and his office have the resources they need to implement the bill effectively and reasonably.

11:55 a.m.

NDP

Annick Papillon NDP Québec, QC

Although we don't know what the budget will contain, you are sure that you have set aside the resources necessary for the commissioner to do the work properly. Is that what you are pledging, minister?

11:55 a.m.

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

Yes, we believe the commissioner has the resources necessary. If more resources are needed, we'll have to make some changes. The government can always make that decision. After conducting consultations, however, I can tell you that we are convinced the commissioner has the resources he needs.

Noon

Conservative

The Chair Conservative David Sweet

The last questioner is Mr. Daniel, for five minutes.

Noon

Conservative

Joe Daniel Conservative Don Valley East, ON

Thank you, Chair, and thank you, Minister, for being here. It's great to see you.

Clearly one thing that is interesting is that the Internet does not have Canadian borders. It's obviously going right across the world; it's going everywhere else in a flash. Given that and the nature of data, you could have a very small company, run by one or two people, with terabytes of data that could be lost and moved upon.

Is a $100,000 penalty a reasonable penalty for a small company that would go bankrupt without it? They'd probably start again the next day, but....

Noon

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

We think the penalties are aggressive, and they are per breach—it's not a macro figure. In the violent crime legislation that we put forward, this is not a concurrent fine; it would be consecutive. It other words, this would be per breach, per violation.

Noon

Conservative

Joe Daniel Conservative Don Valley East, ON

Excellent.

We have so much trade going on with companies that actually don't reside here, and I think you alluded to that earlier. But if their data is being housed out of country and they are working with Canadians, and if there is a breach of Canadian data and they have no footprint in Canada, how do we deal with that?

Noon

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

As I said, this is about protecting the rights of Canadians, and if Canadians' rights have been violated, the commissioner is empowered to pursue those penalties and those investigations. It's about the rights of a Canadian citizen; it's not necessarily about the physical aspect. It's about those who are doing business in Canada interacting with Canadians through ISPs within Canada. It's about protecting Canadians.

February 5th, 2015 / noon

Conservative

Joe Daniel Conservative Don Valley East, ON

Very good.

This seems to be very functional and well-written legislation. I think it is going to be very effective when we put it in place, so I agree with my colleagues that we should move forward with it with speed.

This is probably just a side issue. Have we have considered anything about legislating on the software and hardware that allow some of these breaches to occur? We've seen that Microsoft, for example, when it brought out its spreadsheet, had a whole flight simulator embedded in the software just to push the hardware out. There are surely things that we can do on that, and we can maybe legislate some of it.

Have you considered that, or has your department considered it?

Noon

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

It sounds to me less of a privacy issue than a competition issue. But yes, there are always those accusations about some firm's new operating system or new software being bloated in order to drive up the demand and requirement for greater hardware. It's a well-told story and well understood.

I would say that, if you or anybody has concerns about that kind of anti-consumer behaviour, we have a competition commissioner who can certainly look at them.

Noon

Conservative

Joe Daniel Conservative Don Valley East, ON

I think there are hardware solutions that would prevent undue access, and similar software solutions as well, but that is just a comment.

Noon

Conservative

James Moore Conservative Port Moody—Westwood—Port Coquitlam, BC

The one thing I would say is that since the mass saturation of personal computers, and now, with the increasing saturation of smartphones, people are spending. It used to be that you would spend $2,000 for a laptop and $200 for a mobile phone. Well, now you're spending $1,000 for a mobile phone and $500 for a laptop; and they're everywhere. We are all obsessed with the technological facts of our lives.

The consumer is far more educated. Some of the games that have been played in the past on the consumer side, such as the software/hardware dog-chasing-its-tail-in-order-to-drive-money-out-of-the-consumers'-wallets which we've just described, I don't think people could get away with today. People are more informed and have better understanding than ever before.

We're all exposed. We know what data plans are on the wireless side. We know what behaviour drives up our costs on the wireless side. People are getting more and more educated, and with information and knowledge comes power. With the power of an informed consumer come reacting market forces. With reacting market forces comes greater innovation. It's a good thing.

Noon

Conservative

Joe Daniel Conservative Don Valley East, ON

Well, thank you very much, Minister, and I think this is a wonderful bill. I think we should continue to press forward with it. It will be in the interest of all Canadians, including those in my riding of Don Valley East, and I'm hoping that we can get this through fairly quickly.

Noon

Conservative

The Chair Conservative David Sweet

Thank you very much, Mr. Daniel.

Thank you very much, Minister, for indulging a couple of minutes of overtime. We're going to pause for a couple of minutes while the minister leaves and while his officials get set up for the second hour.

Noon

Conservative

The Chair Conservative David Sweet

Colleagues, we're back in session.

We have a second hour, and Mr. Knubley has some opening remarks.

Mr. Knubley, please go right ahead.

Noon

Deputy Minister, Department of Industry

John Knubley

Mr. Chair, I'll be very short.

I want to talk about two things. One is the basic objectives of the act, and the Minister referred to them. I also want to talk about some of the principles and objectives in terms of the design of the bill, which I think are important to understanding why the bill is the way it is.

Bill S-4 makes four important changes.

First, it requires companies to tell Canadians if their personal information has been lost or stolen, and they've been put at risk as a result.

Second, in the area of consent, it clarifies that actions taken to obtain consent must be appropriate to the target audience. We heard earlier about the particularly vulnerable group of children. In the area of consent it modifies the very limited circumstances—and we would want to stress, very limited—when personal information may be shared without consent in order to balance against other important public policy objectives, for example, if a bank or financial adviser suspects that one of the clients is a victim of financial abuse.

Third, Bill S-4 gives the Privacy Commissioner a range of new tools and greater flexibility to enforce the act.

Fourth, it take steps to reduce the burden on businesses and to allow them to use this information in relation to their ongoing work and due diligence relating to various business transactions.

On the design side—and this is what I think is probably most important as an administrator to bring to your attention—it is really two concepts. I think this came up in the earlier discussion. One is the issue of balance and the other is the issue of principles. This is a bill based on principles.

As we make amendments and look to the future we want to maintain a concept of balance and build upon a principle-based approach that has made PIPEDA successful. These principles are set out in the annex to the original act and include important concepts such as accountability, consent, accuracy, safeguards, and openness.

In light of some of the earlier questions I would stress that openness is a principle that we constantly look to and applies, for example, in the question of the use of information between businesses. Of course it is all about ensuring that citizens have the right to know.

In terms of balance, I'll make a couple of quick points. Ensuring Canadians have the information they need so they can take action to protect their privacy is a priority. Equipping the Privacy Commissioner with the information and tools needed to protect Canadians and increase compliance is a priority. Providing clear rules and a minimal administrative burden on the private sector is a priority. These are not priorities that always mesh and the question of balance comes into play.

In conclusion I want to say that while every country takes a unique approach to addressing privacy—the United States, for example, has a more regulatory-driven approach and the European Union a much more proscriptive approach—we think we have a world-leading approach to the administration of privacy here in Canada and that's reflected in these amendments. We hope to continue to be a leader internationally in this regard.

Thank you, Mr. Chair.

12:15 p.m.

Conservative

The Chair Conservative David Sweet

Thank you very much, Mr. Knubley.

Colleagues, there's a committee coming in here after us. I know that because I'm on that committee. We have to do some business at the end so our rounds will be four minutes now per questioner in order to be able to finish on time and get the business done that we need to do and to be able to clear the room.

Mr. Lake, for four minutes, please.