Mr. Speaker, I am pleased to rise today to speak to private member's Bill C-475.
I thank the hon. member for the opportunity to discuss our government's approach to protecting Canadians from data breaches. This issue is one of many the government has committed to addressing in its own bill to update the Personal Information Protection and Electronics Documents Act, namely Bill C-12, which is currently awaiting second reading.
I wish to point out that the data breach notification regime proposed in Bill C-475 takes a starkly different approach than that in Bill C-12. Bill C-475 requires organizations to first notify the Privacy Commissioner of every potential data breach, regardless of context or remoteness. The Privacy Commissioner must then determine whether affected individuals should be notified. Given the potential number of breaches that could be reported, such a regime would increase costs and burdensome compliance procedures for Canadian businesses and would impose an unwieldy financial and administrative burden on the Office of the Privacy Commissioner, generating more costs than benefits for taxpayers.
In contrast to the approach in Bill C-475, Bill C-12 requires that organizations determine whether a breach of personal information poses a real risk of significant harm to individuals. The organization experiencing the breach is in the best position to understand and assess the risks and decide quickly what should be done to protect individuals without delay. With appropriate oversight by the Privacy Commissioner, the responsibility should rest with the organization experiencing the breach. Bill C-12 also requires an organization to report a potential breach to the Privacy Commissioner when there is real risk of significant harm.
The Privacy Commissioner retains oversight of the notification process and would have the option of initiating an investigation if it were believed that notification was not done properly or did not occur when it was required. This also provides her office with information on the nature and number of breaches that have occurred.
There are other differences between the approaches to notification taken in the two bills. Bill C-475 states two factors that are to be used by an organization when determining whether to report a breach to the Office of the Privacy Commissioner. These factors are the sensitivity of the information and the number of individuals impacted by the breach. The use of only these two factors to determine risk related to a breach does not allow for consideration of circumstances to determine if a potential breach could be harmful.
This approach in Bill C-475 to determine whether to report a breach to the commissioner would also not capture breaches impacting only one or a few individuals, even where there is a high risk of significant harm to those individuals. This leaves a large portion of potentially harmful incidents outside of the legislation.
By contrast, Bill C-12 lays out different factors for determining whether a breach poses a real risk of harm, namely the sensitivity of the information and the potential for the misuse of that information. This requires the organization to assess all the circumstances around the breach, including, for example, whether the information was encrypted, whether it was fully recovered, or whether the circumstances suggest criminal involvement. All of these issues must be considered when determining the risk related to a particular data breach. If not, we run the risk of not capturing all harmful breaches or of focusing on capturing too many remote potential breaches, thereby increasing the burden on organizations and quite possibly reducing the commissioner's capacity for dealing with those that would cause harm.
Under Bill C-475, the proposed threshold to be used by the Privacy Commissioner for determining whether to order an organization to notify individuals is “appreciable risk of harm”. This term is ambiguous and is not defined in the bill. It is therefore not clear what type of breaches this threshold is meant to capture.
The manner of notification to individuals required by Bill C-475 is stated as “...clear and delivered directly...in the prescribed form and manner”. However, there are no details provided on what that form and manner would entail. Furthermore, the bill would not provide for regulation-making power to address this. PIPEDA applies to a very broad range of organizations of all sizes to ensure the timely notification of individuals. The means of notification imposed by any legislative requirement should be flexible enough to accommodate the varying circumstances in which these organizations find themselves.
For example, Bill C-12 would allow organizations to use means of notification such as website notices or paid advertisements, where necessary. This can be an important tool in situations where there is a large group of individuals who have not provided their current contact details, for instance. Organizations need access to every method available to reach those concerned in a timely manner. The new requirement proposed by Bill C-475 would create considerable uncertainty and would be burdensome and costly for organizations. In the U.S., where this issue is tracked annually, the average cost to an organization of a single notification is estimated to be $194. The average total cost to an organization for a data breach is approximately $5.5 million. As entrepreneurs in our communities strive to grow our economy and create jobs for Canadian families, we should take care to examine more efficient alternatives to ineffective procedures. These new requirements might even diminish the value of notification because of notification fatigue, causing individuals to ignore the numerous notices they receive. Bill C-475 would thus undermine its own purpose.
In summary, the opposition's approach in Bill C-475 would impose an administrative burden on the Privacy Commissioner and a financial burden on organizations and would impede timely disclosure of data breaches to individuals. Bill C-475 also does not define key terms adequately and does not capture many potentially harmful breaches, such as those involving a small number of individuals.
The notification regime proposed under Bill C-12, on the other hand, is a careful, risk-based approach that would balance the need for notification to individuals with the cost of notification. The comprehensive approach of Bill C-12 could be applied to the vast range of circumstances and considerations faced by the various types of businesses, both large and small, that are subject to our federal private-sector privacy legislation.
I would therefore urge hon. members to oppose Bill C-475, and I invite the opposition to join us in support of Bill C-12 and move it to committee for detailed consideration as soon as possible.
