Cybersecurity Data Breaches and Mandatory Privacy Breach Reporting: Lessons from Alberta

by Blake, Cassels & Graydon LLP
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In an increasingly interconnected and digitized world, data breaches have become ever more common. The wealth of personal information that corporations have in their possession means that such breaches can occur in even the most benign circumstances. Although many corporations have developed sophisticated privacy and cybersecurity protocols to minimize these risks, data breaches have become a feature of 21st century life.

With respect to cybersecurity breaches that involve personal information, many governments have placed the onus on corporations to be transparent about such breaches and notify appropriate public authorities whenever they arise. Different methodologies abound, but Canadian jurisdictions are increasingly adopting mandatory breach reporting requirements into their legislation to accomplish this end.

Alberta is currently the only Canadian jurisdiction that imposes mandatory privacy breach reporting requirements on private sector organizations. However, similar requirements will soon be coming on the federal level.

ALBERTA LEGISLATION

As its name suggests, mandatory privacy breach reporting is an obligatory process. It requires an organization that experiences a privacy breach to notify the applicable authority and, if necessary, affected individuals of the breach.

Alberta’s private sector mandatory privacy breach reporting requirements are set out in its Personal Information Protection Act (PIPA). Section 34.1 of PIPA requires organizations to notify the Office of the Information and Privacy Commissioner (Alberta OIPC) of any incident “involving the loss of or unauthorized access to or disclosure of the personal information where a reasonable person would consider that there exists a real risk of significant harm to an individual.” Once notified of a breach, the Alberta OIPC reviews the information and determines whether to notify affected individuals. That being said, many organizations adopt a proactive approach in such circumstances and notify individuals well before any such order from the Alberta OIPC.

For organizations involved in the public health sector, it should also be noted that a mandatory breach reporting requirement will soon come into force under Alberta’s Health Information Act (HIA). Per section 60.1 of the HIA, organizations will have a duty to notify the Alberta OIPC and the minister of health whenever there is a loss of individually identifying health information if there is a real risk of significant harm to the individual. The exception to notification under this provision is where it could reasonably be expected that the notification would result in a risk of harm to the individual’s physical or mental health.

FEDERAL LEGISLATION

Mandatory breach reporting requirements will also soon be coming into force under the federal Personal Information Protection and Electronic Documents Act (PIPEDA). Under section 10.1 of PIPEDA, organizations will be required to notify individuals and the Office of the Privacy Commissioner of Canada (Canadian OPC) where “it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm” to the individual. Organizations will also be required to notify other organizations (e.g. credit bureaus) and the government if such notice could reduce risks or mitigate harm and keep a record of every breach of personal information under their control (upon request, such records must be provided to the Canadian OPC). A failure to abide by these new PIPEDA protocols is punishable by a fine of up to C$100,000.

RECENTLY REPORTED DATA BREACHES IN ALBERTA

In the limited time since mandatory breach reporting was first implemented in Alberta in 2010, there have been a host of data breaches that have triggered these requirements. Through the years, the primary principle that can be drawn from these instances is that breaches can occur in a multitude of ways. A brief overview of three recent decisions from the Alberta OIPC illustrates this point:

  • Cowboys Casino: Hackers compromised the casino’s computer systems and stole over 6.5 gigabytes of sensitive personal information of employees and customers. The hackers threatened to release the information unless they received a ransom.
  • Godiva Chocolatier of Canada Ltd.: An employee’s suitcase containing a password protected (but unencrypted) laptop was stolen from a rental car in Texas. Personal information may have been contained in the laptop. Over 100 Alberta residents were affected by this incident.
  • Big Fish Games: In this case, malware was installed on the organization’s online purchasing system. This malware appeared to intercept the payment information of some of the organization’s customers. Over 350 individuals in Alberta were affected by this incident.

With mandatory breach reporting legislation coming into force federally, it is likely that a similar range of data breaches will be seen in that jurisdiction as well.

PRACTICAL CONSIDERATIONS

It is important that organizations adopt a proactive approach to combatting potential data breaches. Most often, this begins with the development and implementation of a privacy management program. Helpfully, the Canadian OPC and its provincial counterparts in Alberta and British Columbia have jointly created a comprehensive document, Getting Accountability Right with a Privacy Management Program, to aid in the development of such programs.  

By way of summary, this document sets out the following foundational principles for an effective privacy management program.

  • Organizational commitment: It is essential that organizations commit to implementing privacy management protocols. To this end, management should actively support privacy initiatives and should even designate a privacy officer to oversee these matters. Such “top-down” involvement is crucial in creating a culture of compliance.
  • Program controls: Organizations must assess what types of personal information they hold and determine how they utilize it. In doing so, they can determine what mediums need to be employed to protect the information and then craft their policies accordingly.
  • Risk assessment tools: As privacy requirements change in jurisdictions over time, organizations should conduct risk assessments periodically to ensure that all aspects of applicable legislation are complied with.
  • Training and education: By properly educating staff to understand how to assess privacy risks and respond to potential data breaches, organizations can minimize damage if and when it arises and save significant resources over time.
  • Breach and incident management response protocols: In the event that a breach does occur, organizations should have a procedure and a team in place to manage the response.
  • Service provider management: Organizations should be conscious about how the personal information they retain is handled by third-party service providers. This consideration is especially relevant if the third party operates in a foreign jurisdiction.
  • Ongoing assessment and revision: In addition, organizations should regularly review their privacy policies and protocols to ensure they are up to date. Through such monitoring, any concern can be documented and—if necessary—addressed. 

By basing a privacy management program on these principles, organizations can develop strong internal policies that will not only comply with upcoming mandatory breach reporting legislation but safeguard organizations from potential data breaches.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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