On November 1, 2018, the Canadian Breach of Security Safeguards Regulations1 of the Personal Information Protection and Electronic Documents Act (PIPEDA) come into force, mandating notification requirements triggered by the discovery of significant data breach. The Canadian regulations follow the European General Data Protection Regulations (GDPR)2, California Consumer Privacy Act (CCPA)3, and related New York Department of Financial Services Cybersecurity Rules and Regulations (NYCRR 500)4.
Under the new regulations, organizations that experience a data breach must conduct a risk assessment to determine if the breach poses a real risk of significant harm to any individuals whose information was exposed, and then notify the Privacy Commissioner, affected individuals and any other agency (think law enforcement) that might mitigate harm to those affected.
Notifications must be given “as soon as feasible” once the organization determines that a significant breach has occurred. Feasible echoes similar policy in many U.S. State breach notification laws that use language such as “reasonable and timely”. This subjective timing recommendation falls short of the prescriptive 72 hours that has become the gold standard across GDPR, the New York NYCRR 500 rules and Heath Insurance Portability and Accountability Act (HIPAA)5 that governs the protection of healthcare records.
Violations of the Act can yield fines of up to $100,000 Canadian, which falls short of its counterparts like the California CCPA act which carries fines of $100,000-750,000 US per consumer (per incident), and well short of the mammoth 20 million Euro (or 4% of the organization’s annual global revenue) for GDPR violations.
Still the Canadian Act creates harmony at the federal level across a mixed bag of provincial privacy laws (Alberta, British Columbia, and Quebec have equivalent PIPEDA laws) and healthcare information protection laws (Ontario, New Brunswick, Newfoundland and Labrador, and Nova Scotia). Some estimates report 40 percent of corporate security budgets are spent (wasted) streamlining and harmonizing cyber requirements across complementary and competing regulations and laws.6
Notification to the commissioner and affected individuals looks similar to other privacy laws: description of the event, dates and periods of the breach, description of the exposed information, steps taken to reduce the risk or resolve the issue, steps the individual can take to reduce the risk or mitigate harm, and contact information so affected individuals can obtain further information. It’s standard fair, but the organization is also required to maintain records of the breach for two years.
Unlike other regulations, this act gives the Privacy Commissioner the authority to investigate breaches, recommend criminal investigation and even convene a public inquiry. While that sound heavy handed, the root causes are rarely publicly shared, robbing industry of the opportunity to learn and continuously improve. Think the airline industry. Transportation experts investigate and piece together the multi-dimensional causes, and then legislation mandates improvements to prevent repeat incidents. In life and death circumstance we demand this cycle of learning. When it comes to cybercrime, stolen identities and crippled financial lives, we like to write-off the incident as a faulty patch update on a web server, or stolen credentials that sidestep the real issues, and trivialize the painful consequences experienced by the silent victims.
Thursday November 01 will come and go like any other day of the year. The sun will rise, the seas will not run red as blood, no earthquakes, no foursome of colourful equine riders. In fact, it’s doubtful that the vast majority of businesses will even know the Act has come into force. For those that see the coming date and haven’t taken action yet, it’s too late to repent. Most companies don’t understand their obligations or labor under the misapprehension that they would never have to worry about breach notification, because they are too small, not a target, don’t have anything worth stealing, or other similar delusion.
But like other laws, ignorance is no excuse and organizations that aren’t prepared and then experience a business altering breach will likely take far too long to discover the breach, then struggle to resolve the issue, and end up fined under the new act. It’s not a new story. We’ve seen it before with other privacy laws like HIPAA—review the public resolutions and penalties. Its a who’s who of cyber sinners.7
So what should organizations be doing to prepare for these new regulations? First, acknowledge that your business is a target because you do control assets (data, records, banking information, etc.) that is worth stealing. Conduct a risk assessment to determine how a criminal would likely target your firm, and then put plan together to protect your data, and who you would respond when a data breach occurs. Remember, these regulations meant to establish a baseline of reasonable care when it comes to data privacy, not to add insult to injury when a business is breached.
- Larry Clinton, CEO of the Internet Security Alliance speaking at the 2018 board meeting of the National Association of Manufacturers