Best Practices and Principles to Stay PIPEDA Compliant

PIPEDA compliance regulations are Canada’s equivalent to the European Union’s GDPR and CCPA laws in California. Canada’s consumer data regulations have the same intent as other data protection laws. But, the implementation is a bit different.

The GDPR and CCPA are blanket regulations. Whereas PIPEDA compliance only applies to the private sector. In most cases, federal, state and nonprofit organizations are not bound by PIPEDA regulations.

Government and nonprofit organizations must adhere to the Privacy Act.

But most businesses and for-profit organizations fall under PIPEDA regulations. And like the GDPR, compliance is fairly straightforward. PIPEDA regulations are broken down into 10 core principles that also serve as guides for compliance best practices.

What is PIPEDA?

The Personal Information Protection and Electronic Documents Act, or PIPEDA, is a Canadian law related to privacy rights that aims to protect consumers' data. Specifically, PIPEDA outlines the ground rules for how private sector organizations engaging in commercial activities can use and disclose consumers’ personal information for business purposes.

The Office of the Privacy Commissioner of Canada states that personal information is any data that can help to identify an individual, either on its own or in combination with other pieces of data. This includes, but is not limited to information such as age, name, ID numbers, income, and disciplinary records.

PIPEDA Fair Information Principles

PIPEDA is organized into 10 principles which cover the responsibilities of organizations in the private sector in how they handle individuals’ personal information. Specifically, the principles outline how organizations are allowed to collect, use, disclose, and extend access to personal information, and covers individuals rights’ over their data.

1. Accountability

Accountability means that your organization must designate someone to be accountable for:

• Personal information collection.
• Personal information usage.
• Disclosure of personal information.
• Retaining personal information.
• Transferring personal information to third parties.

All of these can be handled by a single person or department — or you can disperse the duties. But someone must be officially accountable for each aspect of data management.

2. Identifying Purposes

This principle states that your organization must clearly identify the reason for collecting personal information. You can identify the reason for collection before or at the time of collection.

3. Consent

PIPEDA consent is very similar to GDPR consent. Whenever you collect, use or disclose personal information, you must clearly inform the person the personal data belongs to and get their explicit consent to do anything with their information.

4. Limiting Collecting

This principle states that businesses should only collect personal information when it’s necessary for meeting the needs and demands of consumers.

5. Limiting Use, Disclosure and Retention

This is related to the previous principle. This principle states that businesses should minimize the ways they use, disclose and retain personal information. Businesses need to limit how often they use, disclose and retain personal information.

6. Accuracy

This principle states that businesses must keep all personal information accurate, up-to-date and complete.

7. Safeguards

This means that all the personal data a business retains must be protected with safeguards that are appropriate to the sensitivity of the information being retained.

In terms of digital information, this typically means encrypting data wherever it’s stored and transmitting it over encrypted networks.

8. Openness

Openness simply means that your policies and procedures for handling personal information must be readily available and accessible.

9. Individual Access

Individual access refers to a consumer’s ability to access any personal information that a business has collected about them. At any time, a customer can request to know how a business is using, disclosing and storing their information, and the business must tell the customer.

10. Challenging Compliance

This one has a slightly confusing name. But it means that an individual can challenge a business’s compliance with PIPEDA regulations, and the business must prove that they are in compliance.

These 10 principles may seem intimidating. However, compliance is fairly simple. You can cover most PIPEDA bases with 5 best practices.

PIPEDA compliance best practices

PIPEDA aims to protect individuals and give them privacy over their data, and it’s important to be up to date with these regulations. Noncompliance can lead to many consequences; if an organization is found to have knowingly breached these requirements, they can be fined up to $100,000 per violation. To avoid these outcomes and invest in your business’ future, here are a few best practices for maintaining PIPEDA compliance.

1. Clear Opt-Ins

Always let customers opt in to any communication. In the opt-in form, include information about why you are collecting the information, and provide links to your data management policies and procedures.

2. Opt-Out Instructions

Provide information about how to opt out of further communication in every customer conversation. In emails, this is an unsubscribe link. For SMS, it’s instructions about how to stop further text messages.

If someone opts out of further communication, it’s best to delete their information. That way, you’re limiting retention and use.

3. Data Cleansing

Establish a regular schedule for cleaning your data to keep it up-to-date. Also, regularly audit your databases and remove data that pertains to inactive customers.

4. Responsive Customer Service

Take any requests for personal information or compliance challenges seriously. Respond to them as quickly as you’d respond to any sales service request, if not quicker.

5. Data Encryption

Encrypt all your customer data whenever it’s being stored on your servers. And choose your SMS and telecom providers carefully.

Many telecom companies transmit data over third-party networks and the public internet, where they cannot guarantee encryption or security. This is a real problem when following the Safeguards principle.

It’s best to work with communications carriers that operate their own private networks. These carriers keep your data on networks that they own and operate, so they can guarantee encryption and data security from end-to-end. This keeps you PIPEDA compliant, even when transmitting data through external networks to third parties.

If you follow these five best practices, you’ll be on the right side of compliance.

If you need an SMS and voice provider that transmits data over a private network and offers the end-to-end encryption you need to solidify your PIPEDA compliance, learn more about programmable SMS and voice calls with Telnyx.

FAQ

What does PIPEDA stand for? PIPEDA stands for the Personal Information Protection and Electronic Documents Act. It is Canada’s federal private‑sector privacy law that sets rules for collecting, using, and disclosing personal information in commercial activities.

Who must comply with PIPEDA? Private‑sector organizations in Canada that handle personal information during commercial activities must comply, including federally regulated businesses and those involved in interprovincial or international transactions. Provinces with substantially similar laws may cover purely local activities, but PIPEDA still applies when data crosses borders or provincial lines.

Does PIPEDA apply to U.S. or foreign companies? Yes, PIPEDA applies when foreign organizations collect, use, or disclose personal information about individuals in Canada during commercial activities. Nonprofits are generally exempt unless they engage in commercial transactions that involve personal information.

What is the U.S. equivalent of PIPEDA? There is no single U.S. federal equivalent to PIPEDA. Instead, privacy is governed by sector laws like HIPAA and GLBA and state laws such as the CCPA and CPRA.

What counts as personal information under PIPEDA? Any information about an identifiable individual qualifies, including names, contact details, IDs, device identifiers, voice recordings, and behavioral data. Multimedia content in messaging, such as images and videos carried by MMS, can also include personal information through the content or embedded metadata.

Does PIPEDA apply to SMS and MMS communications, including group messages? Yes, text and media messages that identify a person or can be linked to them fall under PIPEDA, whether sent as SMS or MMS. Group or broadcast message design choices matter because group MMS can expose participant information to others, which counts as a disclosure requiring valid consent and safeguards.

What are the penalties for non-compliance and breach notification rules? Organizations must report breaches that pose a real risk of significant harm to the Privacy Commissioner, notify affected individuals, and keep records of all breaches. Knowingly failing to report, notify, or maintain records can lead to fines, along with audits and compliance agreements that impose operational burdens.