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Policy Briefing — Canada Reintroduces Digital Charter Implementation Act

Canada’s Bill C-27 would replace PIPEDA with the Consumer Privacy Protection Act, create a new data protection tribunal, and introduce the Artificial Intelligence and Data Act, demanding enterprise privacy programs, data mobility readiness, and high-impact AI risk controls.

Zeph Tech Research Lead

Research lead, Zeph Tech

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Executive briefing: On the Government of Canada tabled Bill C-27, the Digital Charter Implementation Act, 2022, to overhaul federal private-sector privacy and establish new artificial intelligence governance obligations. The bill would replace Part 1 of PIPEDA with the Consumer Privacy Protection Act (CPPA), create a Personal Information and Data Protection Tribunal, and introduce the Artificial Intelligence and Data Act (AIDA) for high-impact AI systems. Together, the instruments impose programmatic privacy management duties, stronger consent and data mobility rights, fines up to 5% of global revenue for offences, and lifecycle risk controls for AI developers and deployers.

Although Bill C-27 must still progress through second reading, committee study, and Senate review, organisations operating in Canada need to prepare now. CPPA obligations would apply broadly to commercial activities in provinces without substantially similar laws, while AIDA captures AI systems made available or used in the course of international or interprovincial trade and commerce. The proposal aligns Canadian policy with the OECD AI Principles, the EU General Data Protection Regulation (GDPR), and Québec’s Law 25 modernisation, signalling that boards should integrate privacy and AI risk into enterprise governance frameworks.

Key components of Bill C-27

Consumer Privacy Protection Act. The CPPA codifies a requirement to implement a privacy management program proportionate to the organisation’s size and activities (section 9), covering policies, training, security safeguards, breach response, and vendor oversight. It preserves the consent-based model but tightens valid consent conditions (section 15) and mandates transparency about how personal information is collected, used, and disclosed. Individuals gain new rights, including:

  • Data mobility. A right to transfer information between organisations in designated data mobility frameworks (section 72), supporting interoperability in sectors such as banking and telecommunications.
  • Automated decision explanations. A right to receive meaningful information about how automated decision systems make predictions, recommendations, or decisions that could have significant impacts (section 63).
  • De-identification rules. Restrictions on re-identifying de-identified information and obligations to apply technical and administrative measures when de-identifying data (sections 74–75).

The CPPA introduces a legitimate-interest-like exception allowing certain business activities without consent (section 18(3)), provided organisations conduct and document a privacy impact assessment showing that benefits outweigh privacy intrusions. Enforcement powers expand significantly: the Office of the Privacy Commissioner of Canada (OPC) can recommend administrative monetary penalties up to the greater of C$10 million or 3% of global revenue (section 94), while offences carry fines up to the greater of C$25 million or 5% of global revenue (section 125).

Personal Information and Data Protection Tribunal Act. The new tribunal would hear appeals of OPC orders and decide on penalty recommendations. It can substitute its own findings, provide guidance on penalty calculation factors (e.g., organisation size, compliance history, mitigation), and ensure procedural fairness before sanctions become enforceable.

Artificial Intelligence and Data Act. AIDA applies to persons responsible for designing, developing, managing, or making available high-impact AI systems in Canadian commerce. It mandates risk management programs, data governance measures, record-keeping, and incident reporting. Key obligations include:

  • Impact assessments. Identify whether a system is high-impact based on criteria to be set in regulation (section 7) and document measures to mitigate harms such as biased outputs, adverse health or economic effects, or violations of human rights.
  • Transparency. Publish plain-language descriptions of high-impact systems, including intended use, types of content generated, and measures to assess and mitigate risks (section 11).
  • Monitoring and notification. Establish processes for ongoing evaluation and promptly notify the Minister if a system results or is likely to result in material harm (section 12).
  • Prohibited conduct. Ban reckless or malicious use of AI systems that could cause serious harm, including deploying systems in a manner likely to cause physical or psychological injury or significant economic loss (section 39).

The Minister of Innovation, Science and Industry would gain audit powers, the ability to order production of records, and authority to issue compliance orders. Administrative monetary penalties and offences mirror CPPA levels, reinforcing the need for executive oversight.

Governance actions for boards and executives

Boards should integrate Bill C-27 readiness into enterprise risk management. Mandate a board-level privacy and data committee or extend audit committee charters to include CPPA and AIDA oversight. Require management to present a maturity assessment covering privacy program design, AI governance, data stewardship, and third-party risk. Set expectations that the chief privacy officer (CPO) and chief data officer (CDO) jointly maintain the privacy management program, while an AI governance lead coordinates AIDA compliance.

Executives must allocate budget and talent for cross-functional workstreams. For example, legal teams should map CPPA requirements to existing policies; information security must align safeguards with ISO/IEC 27001 and NIST CSF controls; human resources and procurement need updated training and supplier obligations. Boards should demand dashboards showing privacy impact assessment throughput, data subject request volumes, AI model inventories, and high-impact system risk scores.

Operational priorities for the next 120 days

  • Program documentation. Draft or update the privacy management program manual, ensuring it covers policy governance, training, vendor management, breach handling, retention, and oversight of de-identification practices. Document responsible roles, escalation paths, and evidence repositories for audits.
  • Data mapping and classification. Refresh inventories of personal information, sensitive attributes, and data flows across Canadian operations. Tag datasets associated with automated decision systems and assess whether data mobility frameworks (e.g., Consumer-Directed Finance) apply.
  • Consent and notice redesign. Review consent prompts, privacy notices, and onboarding flows to ensure they provide information required under sections 15 and 62, including processing purposes, consequences, and withdrawal mechanisms. Incorporate layered notices and dashboards to facilitate user control.
  • Automated decision governance. Catalogue automated decision systems affecting individuals (credit, employment, benefits, content moderation). For each, document logic, input features, human oversight, and explainability methods. Build templates for CPPA section 63 responses that include meaningful information and describe factors relied upon.
  • AIDA risk assessments. Develop criteria, aligned with anticipated regulations, to identify high-impact systems—considering factors such as biometrics, critical infrastructure, employment decisions, healthcare, and financial services. Perform baseline assessments, recording foreseeable risks, mitigation steps, monitoring cadence, and incident response triggers.
  • Vendor due diligence. Update procurement questionnaires and contracts to reference CPPA and AIDA obligations, requiring suppliers to maintain privacy programs, disclose sub-processors, support data mobility, and cooperate with risk assessments. Include audit rights and notification timelines for incidents.
  • Training and awareness. Launch targeted training for executives, engineers, product managers, HR, marketing, and customer support. Cover consent standards, legitimate-interest assessments, de-identification techniques, automated decision transparency, and AIDA reporting duties.

Aligning with provincial and international regimes

Many organisations already comply with Québec’s Law 25, the EU GDPR, or California’s CCPA/CPRA. Bill C-27 still requires gap analysis: the CPPA’s definition of de-identification differs from GDPR pseudonymisation, and its legitimate-interest exception requires a documented assessment signed by an accountable executive. Québec’s automated decision rights (section 12.1 of the Act respecting the protection of personal information in the private sector) overlap with CPPA section 63 but include prior notice obligations. Harmonising these requirements reduces duplication and supports consistent customer experiences across provinces.

For multinational AI deployments, align AIDA controls with the EU AI Act high-risk obligations, U.S. federal agency guidance (OMB M-21-06, the 2022 AI Bill of Rights blueprint), and sectoral rules such as the U.S. Equal Employment Opportunity Commission’s algorithmic fairness expectations. Adopt a unified risk rating methodology and ensure documentation satisfies each regime’s audit trails.

Data stewardship and security integration

Privacy and AI governance depend on disciplined data management. Implement data minimisation tactics—masking, tokenisation, synthetic test data (with re-identification controls), and retention schedules. Security teams should align safeguards with CPPA sections 57–60, emphasising encryption, access controls, activity logging, and breach detection. Ensure breach response plans reflect CPPA notification thresholds and timelines, including obligations to inform the OPC and affected individuals “as soon as feasible.”

For AI systems, institute MLOps practices that capture model lineage, dataset provenance, bias testing results, and performance metrics. Establish continuous monitoring to detect drift, anomalous behaviour, or unintended outcomes. Document human-in-the-loop checkpoints and fallback procedures when models are disabled. Maintain a central repository of risk assessments, mitigation plans, and incident logs for inspection by regulators or the tribunal.

Metrics, reporting, and assurance

Develop key performance indicators (KPIs) and key risk indicators (KRIs) to evidence compliance progress. Examples include percentage of business units with documented privacy procedures, median time to fulfil access or mobility requests, number of legitimate-interest assessments completed, share of high-impact AI systems with published summaries, and time to resolve AI incidents. Provide quarterly updates to the board summarising trends, open remediation actions, and regulatory developments (e.g., committee amendments, tribunal guidance drafts).

Internal audit should schedule reviews of the privacy management program, consent mechanisms, and AI governance. Consider third-party assurance—such as SOC 2 privacy criteria or ISO/IEC 27701 certification—to demonstrate maturity. Prepare for possible OPC investigations by maintaining evidence binders: policies, training logs, DPIAs/PIAs, AIDA risk assessments, supplier agreements, and incident response records.

Timeline and next steps

  • 0–30 days: Appoint executive sponsors, launch the gap assessment, and secure budget for privacy and AI governance enhancements.
  • 30–90 days: Complete data mapping, prioritise consent and transparency redesigns, and implement baseline AIDA risk assessments for high-impact systems.
  • 90–180 days: Operationalise data mobility processes, finalise vendor contract updates, conduct tabletop exercises simulating OPC investigations or ministerial audits, and prepare communications for employees and customers.

Bill C-27 signals a comprehensive shift in Canadian privacy and AI oversight. Organisations that invest early in governance, documentation, and cross-functional accountability will reduce enforcement exposure, maintain customer trust, and position themselves to influence forthcoming regulations and guidance.

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