Teresa Scassa - Blog

Teresa Scassa

Teresa Scassa

Artificial intelligence (AI) is already being used to assist government decision-making, although we have little case law that explores issues of procedural fairness when it comes to automated decision systems. This is why a recent decision of the Federal Court is interesting. In Barre v. Canada (Citizenship and Immigration) two women sought judicial review of a decision of the Refugee Protection Division (RPD) which had stripped them of their refugee status. They raised procedural fairness issues regarding the possible reliance upon an AI tool – in this case facial recognition technology (FRT). The case allows us to consider some procedural fairness guideposts that may be useful where evidence derived from AI-enabled tools is advanced.

The Decision of the Refugee Protection Division

The applicants, Ms Barre and Ms Hosh, had been granted refugee status after advancing claims related to their fear of sectarian and gender-based violence in their native Somalia. The Minister of Public Safety and Emergency Preparedness (the Minister) later applied under s. 109 of the Immigration and Refugee Protection Act to have that decision vacated on the basis that it was “obtained as a result of directly or indirectly misrepresenting or withholding material facts relating to a relevant matter”.

The Minister had provided the RPD with photos that compared Ms Barre and Ms Hosh the applicants) with two Kenyan women who had been admitted to Canada on student visas shortly before Ms Barre and Ms Hosh filed their refugee claims (the claims were accepted in 2017). The applicants argued that the photo comparisons relied upon by the Minister had been made using Clearview AI’s facial recognition service built upon scraped images from social media and other public websites. The Minister objected to arguments and evidence about Clearview AI, maintaining that there was no proof that this service had been used. Clearview AI had ceased providing services in Canada on 6 July 2020, and the RPD accepted the Minister’s argument that it had not been used, finding that “[a]n App that is banned to operate in Canada would certainly not be used by a law enforcement agency such as the CBSA” (at para 7). The Minister had also argued that it did not have to disclose how it arrived at the photo comparisons because of s. 22 of the Privacy Act, and the RPD accepted this assertion.

The photo comparisons were given significant weight in the RPD’s decision to overturn the applicants’ refugee status. The RPD found that there were “great similarities” between the photos of the Kenyan students and the applicants, and concluded that they were the same persons. The RPD also considered notes in the Global Case Management System to the effect that the Kenyan students did not attend classes at the school where they were enrolled. In addition, the CBSA submitted affidavits indicating that there was no evidence that the applicants had entered Canada under their own names. The RPD concluded that the applicants were Kenyan citizens who had misrepresented their identity in the refugee proceedings. It found that these factual misrepresentations called into question the credibility of their allegations of persecution. It also found that, since they were Kenyan, they had not advanced claims against their country of nationality in the refugee proceedings, as required by law. The applicants sought judicial review of the decision to revoke their refugee status, arguing that it was unreasonable and breached their rights to procedural fairness.

Judicial Review

Justice Go of the Federal Court ruled that the decision was unreasonable for a number of reasons. A first error was allowing the introduction of the photo comparisons into evidence “without requiring the Minister to disclose the methodology used in procuring the evidence” (at para 31). The Minister had invoked s. 22 of the Privacy Act, but Justice Go noted that there were many flaws with the Minister’s reliance on s. 22. Section 22 is an exception to an individual’s right of access to their personal information. Justice Go noted that the applicants were not seeking access to their personal information; rather, they were making a procedural fairness argument about the photo comparisons relied upon by the Minister and sought information about how the comparisons had been made. Section 22(2), which was specifically relied upon by the Minister, allows a request for disclosure of personal information to be refused on the basis that it was “obtained or prepared by the Royal Canadian Mounted Police while performing policing services for a province or municipality…”, and this circumstance simply was not relevant.

Section 22(1)(b), which was not specifically argued by the Minister, allows for a refusal to disclose personal information where to do so “could reasonably be expected to be injurious to the enforcement of any law of Canada or a province or the conduct of lawful investigations…” Justice Go noted that case law establishes that a court will not support such a refusal on the basis that because there is an investigation, harm from disclosure can be presumed. Instead, the head of an institution must demonstrate a “nexus between the requested disclosure and a reasonable expectation of probable harm” (at para 35, citing Canadian Association of Elizabeth Fry Societies v. Canada). Exceptions to access rights must be given a narrow interpretation, and the burden of demonstrating that a refusal to disclose is justifiable lies with the head of the government institution. Justice Go also noted that “the Privacy Act does not operate “so as to limit access to information to which an individual might be entitled as a result of other legal rules or principles”” (at para 42) such as, in this case, the principles of procedural fairness.

Justice Go found that the RPD erred by not clarifying what ‘personal information’ the Minister sought to protect; and by not assessing the basis for the Minister’s 22 arguments. She also noted that the RPD had accepted the Minister’s bald assertions that the CBSA did not rely on Clearview AI. Even if the company had ceased offering its services in Canada by July 6, 2020, there was no evidence regarding the date on which the photo comparisons had been made. Justice Go noted that the RPD failed to consider submissions by the applicants regarding findings by the privacy commissioners of Canada, BC, Alberta and Quebec regarding Clearview AI and its activities, as well as on the “danger of relying on facial recognition software” (at para 46).

The Minister argued that even if its s. 22 arguments were misguided, it could still rely upon evidentiary privileges to protect the details of its investigation. Justice Go noted that this was irrelevant in assessing the reasonableness of the RPD’s decision, since such arguments had not been made before or considered by the RPD. She also observed that when parties seek to exempt information from disclosure in a hearing, they are often required at least to provide it to the decision-maker to assess. In this case the RPD did not ask for or assess information on how the investigation had been conducted before deciding that information about it should not be disclosed. She noted that: “The RPD’s swift acceptance of the Minister’s exemption request, in the absence of a cogent explanation for why the information is protected from disclosure, appears to be a departure from its general practice” (at para 55).

Justice Go also observed that information about how the photo comparisons were made could well have been relevant to the issues to be determined by the RPD. If the comparisons were generated through use of FRT – whether it was using Clearview AI or the services of another company – “it may call into question the reliability of the Kenyan students’ photos as representing the Applicants, two women of colour who are more likely to be misidentified by facial recognition software than their white cohorts as noted by the studies submitted by the Applicants” (at para 56). No matter how the comparisons were made – whether by a person or by FRT technology – some evidence should have been provided to explain the technique. Justice Go found it unreasonable for the RPD to conclude that the evidence was reliable simply based upon the Minister’s assertions.

Justice Go also found that the RPD’s conclusion that the applicants were, in fact, the two Kenyan women, was unreasonable. Among other things, she found that the decision “failed to provide adequate reasons for the RPD’s conclusion that the two Applicants and the two Kenyan students were the same persons based on the photo comparisons” (at para 69). She noted that although the RPD referenced ‘great similarities’ between the women in the two sets of photographs, there were also some marked dissimilarities which were not addressed. There simply was no adequate explanation as to how the conclusion was reached that the applicants were the Kenyan students.

The decision of the RPD was quashed and remitted to be reconsidered by a differently constituted panel of the RPD.

Ultimately, Justice Go sends a clear message that the Minister cannot simply advance photo comparison evidence without providing an explanation for how that evidence was derived. At the very least, then, there is an obligation to indicate whether an AI technology was used in the decision-making process. Even if there is some legal basis for shielding the details of the Minister’s methods of investigation, there may still need to be some disclosure to the decision-maker regarding the methods used. Justice Go’s decision is also a rebuke of the RPD which accepted the Minister’s evidence on faith and asked no questions about its methodology or probity. In her decision, Justice Go take serious note of concerns about accuracy and bias in the use of FRT, particularly with racialized individuals, and it is clear that these concerns heighten the need for transparency. The decision is important for setting some basic standards to meet when it comes to reviewing evidence that may have been derived using AI. It is also a sobering reminder that those checks and balances failed at first instance – and in a high stakes context.

This post is the fifth in a series on Canada’s proposed Artificial Intelligence and Data Act in Bill C-27. It considers the federal government’s constitutional authority to enact this law, along with other roles it might have played in regulating AI in Canada. Earlier posts include ones on the purpose and application of the AIDA; regulated activities; the narrow scope of the concepts of harm and bias in the AIDA and oversight and protection.

AI is a transformative technology that has the power to do amazing things, but which also has the potential to cause considerable harm. There is a global clamour to regulate AI in order to mitigate potential negative effects. At the same time, AI is seen as a driver of innovation and economies. Canada’s federal government wants to support and nurture Canada’s thriving AI sector while at the same time ensuring that there is public trust in AI. Facing similar issues, the EU introduced a draft AI Act, which is currently undergoing public debate and discussion (and which itself was the product of considerable consultation). The US government has just proposed its Blueprint for an AI Bill of Rights, and has been developing policy frameworks for AI, including the National Institute of Standards and Technology (NIST) Risk Management Framework. The EU and the US approaches are markedly different. Interestingly, in the US (which, like Canada, is a federal state) there has been considerable activity at the state level on AI regulation. Serious questions for Canada include what to do about AI, how best to do it – and who should do it.

In June 2022, the federal government introduced the proposed Artificial Intelligence and Data Act (AIDA) in Bill C-27. The AIDA takes the form of risk regulation; in other words, it is meant to anticipate and mitigate AI harms to the public. This is an ex ante approach; it is intended to address issues before they become problems. The AIDA does not provide personal remedies or recourses if anyone is harmed by AI – this is left for ex post regimes (ones that apply after harm has occurred). These will include existing recourses such as tort law (extracontractual civil liability in Quebec), and complaints to privacy, human rights or competition commissioners.

I have addressed some of the many problems I see with the AIDA in earlier posts. Here, I try to unpack issues around the federal government’s constitutional authority to enact this bill. It is not so much that they lack jurisdiction (although they might); rather, how they understand their jurisdiction can shape the nature and substance of the bill they are proposing. Further, the federal government has acted without any consultation on the AIDA prior to its surprising insertion in Bill C-27. Although it promises consultation on the regulations that will follow, this does not make up for the lack of discussion around how we should identify and address the risks posed by AI. This rushed bill is also shaped by constitutional constraints – it is AI regulation with structural limitations that have not been explored or made explicit.

Canada is a federal state, which means that the powers typically exercised by a nation state are divided between a federal and regional governments. In theory, federalism allows for regional differences to thrive within an overarching framework. However, some digital technology issues (including data protection and AI) fit uneasily within Canada’s constitutional framework. In proposing the Consumer Privacy Protection Act part of Bill C-27, for example, the federal government appears to believe that it does not have the jurisdiction to address data protection as a matter of human rights – this belief has impacted the substance of the bill.

In Canada, the federal government has jurisdiction over criminal law, trade and commerce, banking, navigation and shipping, as well as other areas where it makes more sense to have one set of rules than to have ten. The cross-cutting nature of AI, the international competition to define the rules of the game, and the federal government’s desire to take a consistent national approach to its regulation are all factors that motivated the inclusion of the AIDA in Bill C-27. The Bill’s preamble states that “the design, development and deployment of artificial intelligence systems across provincial and international borders should be consistent with national and international standards to protect individuals from potential harm”. Since we do not yet have national or international standards, the law will also enable the creation (and imposition) of standards through regulation.

The preamble’s reference to the crossing of borders signals both that the federal government is keenly aware of its constitutional limitations in this area and that it intends to base its jurisdiction on the interprovincial and international dimensions of AI. The other elements of Bill C-27 rely on the federal general trade and commerce power – this follows the approach taken in the Personal Information Protection and Electronic Documents Act (PIPEDA), which is reformed by the first two parts of C-27. There are indications that trade and commerce is also relevant to the AIDA. Section 4 of the AIDA refers to the goal of regulating “international and interprovincial trade and commerce in artificial intelligence systems by establishing common requirements applicable across Canada, for the design, development and use of those systems.” Yet the general trade and commerce power is an uneasy fit for the AIDA. The Supreme Court of Canada has laid down rules for the exercise of this power, and one of these is that it should not be used to regulate a single industry; a legislative scheme should regulate trade as a whole.

The Minister of Industry, in discussing Canada’s AI strategy has stated:

Artificial intelligence is a key part of our government’s plan to make our economy stronger than ever. The second phase of the Pan-Canadian Artificial Intelligence Strategy will help harness the full potential of AI to benefit Canadians and accelerate trustworthy technology development, while fostering diversity and cooperation across the AI domain. This collaborative effort will bring together the knowledge and expertise necessary to solidify Canada as a global leader in artificial intelligence and machine learning.

Clearly, the Minister is casting the role of AI as an overall economic transformer rather than a discrete industry. Nevertheless, although it might be argued that AI is a technology that cuts across all sectors of the economy, the AIDA applies predominantly to its design and development stages, which makes it look as if it targets a particular industry. Further, although PIPEDA (and the CPPA in the first Part of Bill C-27), are linked to trade and commerce through the transactional exchange of personal data – typically when it is collected from individuals in the course of commercial activity – the AIDA is different. Its regulatory requirements are meant to apply before any commercial activity takes place –at the design and development stage. This is worth pausing over because design and development stages may be non-commercial (in university-based research, for example) or may be purely intra-provincial. As a result, the need to comply with a law at the design and development stage, when that law is premised on interprovincial or international commercial activity, may only be discovered well after commercialization becomes a reality.

Arguably, AI might also be considered a matter of ‘national concern’ under the federal government’s residual peace, order and good government power. Matters of national concern that would fall under this power would be ones that did not exist at the time of confederation. The problem with addressing AI in this way is that it is simply not obvious that provinces could not enact legislation to govern AI – as many states have begun to do in the US.

Another possible constitutional basis is the federal criminal law power. This is used, for example, in the regulation of certain matters relating to health such as tobacco, food and drugs, medical devices and controlled substances. The Supreme Court of Canada has ruled that this power “is broad, and is circumscribed only by the requirements that the legislation must contain a prohibition accompanied by a penal sanction and must be directed at a legitimate public health evil”. The AIDA contains some prohibitions and provides for both administrative monetary penalties (AMPs). Because the AIDA focuses on “high impact” AI systems, there is an argument that it is meant to target and address those systems that have the potential to cause the most harm to health or safety. (Of course, the bill does not define “high impact” systems, so this is only conjecture.) Yet, although AMPs are available in cases of egregious non-compliance with the AIDA’s requirements, AMPs are not criminal sanctions, they are “a civil (rather than quasi-criminal) mechanism for enforcing compliance with regulatory requirements”, as noted in a report from the Ontario Attorney-General. That leaves a smattering of offences such as obstructing the work of the Minister or of auditors; knowingly designing, developing or using an AI system where the data were obtained as a result of an offence under another Act; being reckless as to whether the use of an AI system made available by the accused is likely to cause harm to an individual, and using AI intentionally to defraud the public and cause substantial economic loss to an individual. Certainly, such offences are criminal in nature and could be supported by the federal criminal law power. Yet they are easily severable from the rest of the statute. For the most part, the AIDA focuses on “establishing common requirements applicable across Canada, for the design, development and use of [AI] systems” (AIDA, s. 4).

The provinces have not been falling over themselves to regulate AI, although neither have they been entirely inactive. Ontario, for example, has been developing a framework for the public sector use of AI, and Quebec has enacted some provisions relating to automated decision-making systems in its new data protection law. Nevertheless, these steps are clearly not enough to satisfy a federal government anxious to show leadership in this area. It is thus unsurprising that Canada’s federal government has introduced legislation to regulate AI. What is surprising is that they have done so without consultation – either regarding the form of the intervention or the substance. We have yet to have an informed national conversation about AI. Further, legislation of this kind was only one option. The government could have consulted and convened experts to develop something along the lines of the US’s NIST Framework that could be adopted as a common standard/approach across jurisdictions in Canada. A Canadian framework could have been supported by the considerable work on standards already ongoing. Such an approach could have involved the creation of an agency under the authority of a properly-empowered Data Commissioner to foster co-operation in the development of national standards. This could have supported the provinces in the harmonized regulation of AI. Instead, the government has chosen to regulate AI itself through a clumsy bill that staggers uneasily between constitutional heads of power, and that leaves its normative core to be crafted in a raft of regulations that may take years to develop. It also leaves it open to the first company to be hit with an AMP to challenge the constitutionality of the framework as a whole.

The Artificial Intelligence and Data Act (AIDA) in Bill C-27 will create new obligations for those responsible for AI systems (particularly high impact systems), as well as those who process or make available anonymized data for use in AI systems. In any regulatory scheme that imposes obligations, oversight and enforcement are key issues. A long-standing critique of the Personal Information Protection and Electronic Documents Act (PIPEDA) has been that it is relatively toothless. This is addressed in the first part of Bill C-27, which reforms the data protection law to provide a suite of new enforcement powers that include order-making powers for the Privacy Commissioner and the ability to impose stiff administrative monetary penalties (AMPs). The AIDA comes with ‘teeth’ as well, although these teeth seem set within a rather fragile jaw. I will begin by identifying the oversight and enforcement powers (the teeth) and will then look at the agent of oversight and enforcement (the jaw). The table below sets out the main obligations accompanied by specific compliance measures. There is also the possibility that any breach of these obligations might be treated as either a violation or offence, although the details of these require elaboration in as-yet-to-be-drafted regulations.

 

Obligation

Oversight Power

To keep records regarding the manner in which data is anonymized and the use or management of anonymized data as well as records of assessment of whether an AI system is high risk (s. 10)

Minister may order the record-keeper to provide any of these records (s. 13(1))

 

 

Any record-keeping obligations imposed on any actor in as-yet undrafted regulations

Where there are reasonable grounds to believe that the use of a high impact system could result in harm or biased output, the Minister can order the specified person to provide these records (s. 14)

Obligation to comply with any of the requirements in ss. 6-12, or any order made under s. 13-14

Minister (on reasonable grounds to believe there has a contravention) can require the person to conduct either an internal or an external audit with respect to the possible contravention (s. 15); the audit must be provided to the Minister

 

A person who has been audited may be ordered by the Minister to implement any measure specified in the order, or to address any matter in the audit report (s. 16)

Obligation to cease using or making available a high-impact system that creates a serious risk of imminent harm

Minister may order a person responsible for a high-impact system to cease using it or making it available for use if the Minister has reasonable grounds to believe that its use gives rise to a serious risk of imminent harm (s. 17)

Transparency requirement (any person referred to in sections 6 to 12, 15 and 16)

Minister may order the person to publish on a publicly available website any information related to any of these sections of the AIDA, but there is an exception for confidential business information (s. 18)

 

Compliance with orders made by the Minister is mandatory (s. 19) and there is a procedure for them to become enforceable as orders of the Federal Court.

Although the Minister is subject to confidentiality requirements, they may disclose any information they obtain through the exercise of the above powers to certain entities if they have reasonable grounds to believe that a person carrying out a regulated activity “has contravened, or is likely to contravene, another Act of Parliament or a provincial legislature” (s. 26(1)). Those entities include the Privacy Commissioner, the Canadian Human Rights Commission, the Commissioner of Competition, the Canadian Radio-television and Telecommunications Commission, their provincial analogues, or any other person prescribed by regulation. An organization may therefore be in violation of statutes other than AIDA and may be subject to investigation and penalties under those laws.

The AIDA itself provides no mechanism for individuals to file complaints regarding any harms they may believe they have suffered, nor is there any provision for the investigation of complaints.

The AIDA sets up the Minister as the actor responsible for oversight and enforcement, but the Minister may delegate any or all of their oversight powers to the new Artificial Intelligence and Data Commissioner who is created by s. 33. The Data Commissioner is described in the AIDA as “a senior official of the department over which the Minister presides”. They are not remotely independent. Their role is “to assist the Minister” responsible for the AIDA (most likely the Minister of Industry), and they will also therefore work in the Ministry responsible for supporting the Canadian AI industry. There is essentially no real regulator under the AIDA. Instead, oversight and enforcement are provided by the same group that drafted the law and that will draft the regulations. It is not a great look, and, certainly goes against the advice of the OECD on AI governance, as Mardi Wentzel has pointed out.

The role of Data Commissioner had been first floated in the 2019 Mandate Letter to the Minister of Industry, which provided that the Minister would: “create new regulations for large digital companies to better protect people’s personal data and encourage greater competition in the digital marketplace. A newly created Data Commissioner will oversee those regulations.” The 2021 Federal Budget provided funding for the Data Commissioner, and referred to the role of this Commissioner as to “inform government and business approaches to data-driven issues to help protect people’s personal data and to encourage innovation in the digital marketplace.” In comparison with these somewhat grander ideas, the new AI and Data Commissioner role is – well – smaller than the title. It is a bit like telling your kids you’re getting them a deluxe bouncy castle for their birthday party and then on the big day tossing a couple of couch cushions on the floor instead.

To perhaps add a gloss of some ‘independent’ input into the administration of the statute, the AIDA provides for the creation of an advisory committee (s. 35) that will provide the Minister with “advice on any matters related to this Part”. However, this too is a bit of a throwaway. Neither the AIDA nor any anticipated regulations will provide for any particular composition of the advisory committee, for the appointment of a chair with a fixed term, or for any reports by the committee on its advice or activities. It is the Minister who may choose to publish advice he receives from the committee on a publicly available website (s. 35(2)).

The AIDA also provides for enforcement, which can take one of two routes. Well, one of three routes. One route is to do nothing – after all, the Minister is also responsible for supporting the AI industry in Canada– so this cannot be ruled out. A second option will be to treat a breach of any of the obligations specified in the as-yet undrafted regulations as a “violation” and impose an administrative monetary penalty (AMP). A third option is to treat a breach as an “offence” and proceed by way of prosecution (s. 30). A choice must be made between proceeding via the AMP or the offense route (s. 29(3)). Providing false information and obstruction are distinct offences (s. 30(2)). There are also separate offences in ss. 38 and 39 relating to the use of illegally obtained data and knowingly or recklessly making an AI system available for use that is likely to cause harm.

Administrative monetary penalties under Part 1 of Bill C-27 (relating to data protection) are quite steep. However, the necessary details regarding the AMPs that will be available for breach of the AIDA are to be set out in regulations that have yet to be drafted (s. 29(4)(d)). All that the AIDA really tells us about these AMPs is that their purpose is “to promote compliance with this Part and not to punish” (s. 29(2)). Note that at the bottom of the list of regulation-making powers for AMPs set out in s. 29(4). This provision allows the Minister to make regulations “respecting the persons or classes of persons who may exercise any power, or perform any duty or function, in relation to the scheme.” There is a good chance that the AMPs will (eventually) be administered by the new Personal Information and Data Tribunal, which is created in Part 2 of Bill C-27. This, at least, will provide some separation between the Minister and the imposition of financial penalties. If this is the plan, though, the draft law should say so.

It is clear that not all breaches of the obligations in the AIDA will be ones for which AMPs are available. Regulations will specify the breach of which provisions of the AIDA or its regulations will constitute a violation (s. 29(4)(a)). The regulations will also indicate whether the breach of the particular obligation is classified as minor, serious or very serious (s. 29(4)(b)). The regulations will also set out how any such proceedings will unfold. As-yet undrafted regulations will also specify the amounts or ranges of AMPS, and factors to take into account in imposing them.

This lack of important detail makes it hard not to think of the oversight and enforcement scheme in the AIDA as a rough draft sketched out on a cocktail napkin after an animated after-hours discussion of what enforcement under the AIDA should look like. Clearly, the goal is to be ‘agile’, but ‘agile’ should not be confused with slapdash. Parliament is being asked to enact a law that leaves many essential components undefined. With so much left to regulations, one wonders whether all the missing pieces can (or will) be put in place within this decade. There are instances of other federal laws left incomplete by never-drafted regulations. For example, we are still waiting for the private right of action provided for in Canada’s Anti-Spam Law, which cannot come into effect until the necessary regulations are drafted. A cynic might even say that failing to draft essential regulations is a good way to check the “enact legislation on this issue” box on the to-do list, without actually changing the status quo.

This is the third in my series of posts on the Artificial Intelligence and Data Act (AIDA) found in Bill C-27, which is part of a longer series on Bill C-27 generally. Earlier posts on the AIDA have considered its purpose and application, and regulated activities. This post looks at the harms that the AIDA is designed to address.

The proposed Artificial Intelligence and Data Act (AIDA), which is the third part of Bill C-27, sets out to regulate ‘high-impact’ AI systems. The concept of ‘harm’ is clearly important to this framework. Section 4(b) of the AIDA states that a purpose of the legislation is “to prohibit certain conduct in relation to artificial intelligence systems that may result in serious harm to individuals or harm to their interests”.

Under the AIDA, persons responsible for high-impact AI systems have an obligation to identify, assess, and mitigate risks of harm or biased output (s. 8). Those persons must also notify the Minister “as soon as feasible” if a system for which they are responsible “results or is likely to result in material harm”. There are also a number of oversight and enforcement functions that are triggered by harm or a risk of harm. For example, if the Minister has reasonable grounds to believe that a system may result in harm or biased output, he can demand the production of certain records (s. 14). If there is a serious risk of imminent harm, the Minister may order a person responsible to cease using a high impact system (s. 17). The Minister is also empowered to make public certain information about a system where he believes that there is a serious risk of imminent harm and the publication of the information is essential to preventing it (s. 28). Elevated levels of harm are also a trigger for the offence in s. 39, which involves “knowing or being reckless as to whether the use of an artificial intelligence system is likely to cause serious physical or psychological harm to an individual or substantial damage to an individual’s property”.

‘Harm’ is defined in s. 5(1) to mean:

(a) physical or psychological harm to an individual;

(b) damage to an individual’s property; or

(c) economic loss to an individual.

I have emphasized the term “individual” in this definition because it places an important limit on the scope of the AIDA. First, it is unlikely that the term ‘individual’ includes a corporation. Typically, the word ‘person’ is considered to include corporations, and the word ‘person’ is used in this sense in the AIDA. This suggests that “individual” is meant to have a different meaning. The federal Interpretation Act is silent on the issue. It is a fair interpretation of the definition of ‘harm’ that “individual” is not the same as “person”, and means an individual (human) person. The French version uses the term “individu”, and not “personne”. The harms contemplated by this legislation are therefore to individuals and not to corporations.

Defining harm in terms of individuals has other ramifications. The AIDA defines high-risk AI systems in terms of their impacts on individuals. Importantly, this excludes groups and communities. It also very significantly focuses on what are typically considered quantifiable harms, and uses language that suggests quantifiability (economic loss, damage to property, physical or psychological harm). Some important harms may be difficult to establish or to quantify. For example, class action lawsuits relating to significant data breaches have begun to wash up on the beach of lost causes due to the impossibility of proving material loss either because, although thousands may have been impacted, the individual losses are impossible to quantify, or because it is impossible to prove a causal link between very real identity theft and that particular data breach. Consider an AI system that manipulates public opinion through an algorithm that drives content to individuals based on its shock value rather than its truth. Say this happens during a pandemic and it convinces people that they should not get vaccinated or take other recommended public health measures. Say some people die because they were misled in this way. Say other people die because they were exposed to infected people who were misled in this way. How does one prove the causal link between the physical harm of injury or death of an individual and the algorithm? What if there is an algorithm that manipulates voter sentiment in a way that changes the outcome of an election? What is the quantifiable economic loss or psychological harm to any individual? How could causation be demonstrated? The harm, once again, is collective.

The EU AI Act has also been criticized for focusing on individual harm, but the wording of that law is still broader than that in the AIDA. The EU AI Act refers to high-risk systems in terms of “harm to the health and safety or a risk of adverse impact on fundamental rights of persons”. This at least introduces a more collective dimension, and it avoids the emphasis on quantifiability.

The federal government’s own Directive on Automated Decision-Making (DADM) which is meant to guide the development of AI used in public sector automated decision systems (ADS) also takes a broader approach to impact. In assessing the potential impact of an ADS, the DADM takes into account: “the rights of individuals or communities”, “the health or well-being of individuals or communities”, “the economic interests of individuals, entities, or communities”, and “the ongoing sustainability of an ecosystem”.

With its excessive focus on individuals, the AIDA is simply tone deaf to the growing global understanding of collective harm caused by the use of human-derived data in AI systems.

One response of the government might be to point out that the AIDA is also meant to apply to “biased output”. Biased output is defined in the AIDA as:

content that is generated, or a decision, recommendation or prediction that is made, by an artificial intelligence system and that adversely differentiates, directly or indirectly and without justification, in relation to an individual on one or more of the prohibited grounds of discrimination set out in section 3 of the Canadian Human Rights Act, or on a combination of such prohibited grounds. It does not include content, or a decision, recommendation or prediction, the purpose and effect of which are to prevent disadvantages that are likely to be suffered by, or to eliminate or reduce disadvantages that are suffered by, any group of individuals when those disadvantages would be based on or related to the prohibited grounds. (s. 5(1)) [my emphasis]

The argument here will be that the AIDA will also capture discriminatory biases in AI. However, I have underlined the part of this definition that once again returns the focus to individuals, rather than groups. It can be very hard for an individual to demonstrate that a particular decision discriminated against them (especially if the algorithm is obscure). In any event, biased AI will tend to replicate systemic discrimination. Although it will affect individuals, it is the collective impact that is most significant – and this should be recognized in the law. The somewhat obsessive focus on individual harm in the AIDA may unwittingly help perpetuate denials of systemic discrimination.

It is also important to note that the definition of “harm” does not include “biased output”, and while the terms are used in conjunction in some cases (for example, in s. 8’s requirement to “identify, assess and mitigate the risks of harm or biased output”), other obligations relate only to “harm”. Since the two are used conjunctively in some parts of the statute, but not others, a judge interpreting the statute might presume that when only one of the terms is used, then it is only that term that is intended. Section 17 of the AIDA allows the Minister to order a person responsible for a high-impact system to cease using it or making it available if there is a “serious risk of imminent harm”. Section 28 permits the Minister to order the publication of information related to an AI system where there are reasonable grounds to believe that the use of the system gives rise to “a serious risk of imminent harm”. In both cases, the defined term ‘harm’ is used, but not ‘biased output’.

The goals of the AIDA to protect against harmful AI are both necessary and important, but in articulating the harm that it is meant to address, the Bill underperforms.

This is the second in a series of posts on Bill C-27’s proposed Artificial Intelligence and Data Act (AIDA). The first post looked at the scope of application of the AIDA. This post considers what activities and what data will be subject to governance.

Bill C-27’s proposed Artificial Intelligence and Data Act (AIDA) governs two categories of “regulated activity” so long as they are carried out “in the course of international or interprovincial trade and commerce”. These are set out in s. 5(1):

(a) processing or making available for use any data relating to human activities for the purpose of designing, developing or using an artificial intelligence system;

(b) designing, developing or making available for use an artificial intelligence system or managing its operations.

These activities are cast in broad terms, capturing activities related both to the general curating of the data that fuel AI, and the design, development, distribution and management of AI systems. The obligations in the statute do not apply universally to all engaged in the AI industry. Instead, different obligations apply to those performing different roles. The chart below identifies the actor in the left-hand column, and the obligation the column on the right.

 

Actor

Obligation

A person who carries out any regulated activity and who processes or makes available for use anonymized data in the course of that activity

(see definition of “regulated activity” in s. 5(1)

s. 6 (data anonymization, use and management)

s. 10 (record keeping regarding measures taken under s. 6)

A person who is responsible for an artificial intelligence system (see definition of ‘person responsible’ in s. 5(2)

s. 7 (assess whether a system is high impact)

s. 10 (record keeping regarding reasons supporting their assessment of whether the system is high-impact under s. 7)

A person who is responsible for a high-impact system (see definition of ‘person responsible’ in s. 5(2; definition of “high-impact” system, s. 5(1))

s. 8 (measures to identify, assess and mitigate risk of harm or biased output)

s. 9 (measures to monitor compliance with the mitigation measures established under s. 8 and the effectiveness of the measures

s. 10 (record keeping regarding measures taken under ss. 8 and 9)

s. 12 (obligation to notify the Minister as soon as feasible if the use of the system results or is likely to result in material harm)

A person who makes available for use a high-impact system

s. 11(1) (publish a plain language description of the system and other required information)

A person who manages the operation of a high-impact system

s. 11(2) (publish a plain language description of how the system is used and other required information)

 

For most of these provisions, the details of what is actually required by the identified actor will depend upon regulations that have yet to be drafted.

A “person responsible” for an AI system is defined in s. 5(2) of the AIDA in these terms:

5(2) For the purposes of this Part, a person is responsible for an artificial intelligence system, including a high-impact system, if, in the course of international or interprovincial trade and commerce, they design, develop or make available for use the artificial intelligence system or manage its operation.

Thus, the obligations in ss. 7, 8, 9, 10 and 11, apply only to those engaged in the activities described in s. 5(1)(b) (designing, developing or making available an AI system or managing its operation). Further, it is important to note that with the exception of sections 6 and 7, the obligations in the AIDA also apply only to ‘high impact’ systems. The definition of a high-impact system has been left to regulations and is as yet unknown.

Section 6 stands out somewhat as a distinct obligation relating to the governance of data used in AI systems. It applies to a person who carries out a regulated activity and who “processes or makes available for use anonymized data in the course of that activity”. Of course, the first part of the definition of a regulated activity includes someone who processes or makes available for use “any data relating to human activities for the purpose of designing, developing or using” an AI system. So, this obligation will apply to anyone “who processes or makes available for use anonymized data” (s. 6) in the course of “processing or making available for use any data relating to human activities for the purpose of designing, developing or using an artificial intelligence system” (s. 5(1)). Basically, then for s. 6 to apply, the anonymized data must be processed for the purposes of development of an AI system. All of this must also be in the course if international or interprovincial trade and commerce.

Note that the first of these two purposes involves data “related to human activities” that are used in AI. This is interesting. The new Consumer Privacy Protection Act (CPPA) that forms the first part of Bill C-27 will regulate the collection, use and disclosure of personal data in the course of commercial activity. However, it provides, in s. 6(5), that: “For greater certainty, this Act does not apply in respect of personal information that has been anonymized.” By using the phrase “data relating to human activities” instead of “personal data”, s. 5(1) of the AIDA clearly addresses human-derived data that fall outside the definition of personal information in the CPPA because of anonymization.

Superficially, at least, s. 6 of the AIDA appears to pick up the governance slack that arises where anonymized data are excluded from the scope of the CPPA. [See my post on this here]. However, for this to happen, the data have to be used in relation to an “AI system”, as defined in the legislation. Not all anonymized data will be used in this way, and much will depend on how the definition of an AI system is interpreted. Beyond that, the AIDA only applies to a ‘regulated activity’ which is one carried out in the course of international and inter-provincial trade and commerce. It does not apply outside the trade and commerce context, nor does it apply to any excluded actors [as discussed in my previous post here]. As a result, there remain clear gaps in the governance of anonymized data. Some of those gaps might (eventually) be filled by provincial governments, and by the federal government with respect to public-sector data usage. Other gaps – e.g., with respect to anonymized data used for purposes other than AI in the private sector context – will remain. Further, governance and oversight under the proposed CPPA will be by the Privacy Commissioner of Canada, an independent agent of Parliament. Governance under the AIDA (as will be discussed in a forthcoming post) is by the Minister of Industry and his staff, who are also responsible for supporting the AI industry in Canada. Basically, the treatment of anonymized data between the CPPA and the AIDA creates a significant governance gap in terms of scope, substance and process.

On the issue of definitions, it is worth making a small side-trip into ‘personal information’. The definition of ‘personal information’ in the AIDA provides that the term “has the meaning assigned by subsections 2(1) and (3) of the Consumer Privacy Protection Act.” Section 2(1) is pretty straightforward – it defines “personal information” as “information about an identifiable individual”. However, s. 2(3) is more complicated. It provides:

2(3) For the purposes of this Act, other than sections 20 and 21, subsections 22(1) and 39(1), sections 55 and 56, subsection 63(1) and sections 71, 72, 74, 75 and 116, personal information that has been de-identified is considered to be personal information.

The default rule for ‘de-identified’ personal information is that it is still personal information. However, the CPPA distinguishes between ‘de-identified’ (pseudonymized) data and anonymized data. Nevertheless, for certain purposes under the CPPA – set out in s. 2(3) – de-identified personal information is not personal information. This excruciatingly-worded limit on the meaning of ‘personal information’ is ported into the AIDA, even though the statutory provisions referenced in s. 2(3) are neither part of AIDA nor particularly relevant to it. Since the legislator is presumed not to be daft, then this must mean that some of these circumstances are relevant to the AIDA. It is just not clear how. The term “personal information” is used most significantly in the AIDA in the s. 38 offense of possessing or making use of illegally obtained personal information. It is hard to see why it would be relevant to add the CPPA s. 2(3) limit on the meaning of ‘personal information’ to this offence. If de-identified (not anonymized) personal data (from which individuals can be re-identified) are illegally obtained and then used in AI, it is hard to see why that should not also be captured by the offence.

 

This is the first of a series of posts on the part of Bill C-27 that would enact a new Artificial Intelligence and Data Act (AIDA) in Canada. Previous posts have considered the part of the bill that would reform Canada’s private sector data protection law. This series on the AIDA begins with an overview of its purpose and application.

Bill C-27 contains the text of three proposed laws. The first is a revamped private sector data protection law. The second would establish a new Data Tribunal that is assigned a role under the data protection law. The third is a new Artificial Intelligence and Data Act (AIDA) While the two other components were present in the bill’s failed predecessor Bill C-11, the AIDA is new – and for many came as a bit of a surprise. The common thread, of course, is the government’s Digital Charter, which set out a series of commitments for building trust in the digital and data economy.

The preamble to Bill C-27, as a whole, addresses both AI and data protection concerns. Where it addresses AI regulation directly, it identifies the need to harmonize with national and international standards for the development and deployment of AI, and the importance of ensuring that AI systems uphold Canadian values in line with the principles of international human rights law. The preamble also signals a need for a more agile regulatory framework – something that might go towards justifying why so much of the substance of AI governance in the AIDA has been left to the development of regulations. Finally, the preamble speaks of a need “to foster an environment in which Canadians can seize the benefits of the digital and data-driven economy and to establish a regulatory framework that supports and protects Canadian norms and values, including the right to privacy.” This, then, frames how AI regulation (and data protection) will work in Canada – an attempt to walk a tightrope between enabling fast-paced innovation and protecting norms, values and privacy rights.

Regulating the digital economy has posed some constitutional (division of powers) challenges for the federal government, and these challenges are evident in the AIDA, particularly with respect to the scope of application of the law. Section 4 sets out the dual purposes of the legislation:

(a) to regulate international and interprovincial trade and commerce in artificial intelligence systems by establishing common requirements, applicable across Canada, for the design, development and use of those systems; and

(b) to prohibit certain conduct in relation to artificial intelligence systems that may result in serious harm to individuals or harm to their interests.

By focusing on international and interprovincial trade and commerce, the government asserts its general trade and commerce jurisdiction, without treading on the toes of the provinces, who remain responsible for intra-provincial activities. Yet, this means that there will be important gaps in AI regulation. Until the provinces act, these will be with respect to purely provincial AI solutions, whether in the public or private sectors, and, to a large extent, AI in the not-for-profit sector. However, this could get complicated since the AIDA sets out obligations for a range of actors, some of which could include international or interprovincial providers of AI systems to provincial governments.

The second purpose set out in s. 4 suggests that at least when it comes to AI systems that may result in serious harm, the federal jurisdiction over criminal law may be invoked. The AIDA creates a series of offences that could be supported by this power – yet, ultimately the offences relate to failures to meet the obligations that arise based on being engaged in a ‘regulated activity’, which takes one back to activities carried out in the course of international or interprovincial trade and commerce. The federal trade and commerce power thus remains the backbone of this bill.

Although there would be no constitutional difficulties with the federal government exerting jurisdiction over its own activities, the AIDA specifically excludes its application to federal government institutions, as defined in the Privacy Act. Significantly, it also does not apply to products, services or activities that are under the control of the Minister of National Defence, the Canadian Security Intelligence Service, the Communications Security Establishment or any other person who is responsible for a federal or provincial department or agency that is prescribed by regulation. This means that the AIDA would not apply even to those AI systems developed by the private sector for any of the listed actors. The exclusions are significant, particularly since the AIDA seems to be focussed on the prevention of harm to individuals (more on this in a forthcoming post) and the parties excluded are ones that might well develop or commission the development of AI that could (seriously) adversely impact individuals. It is possible that the government intends to introduce or rely upon other governance mechanisms to ensure that AI and personal data are not abused in these contexts. Or not. In contrast, the EU’s AI Regulation addresses the perceived need for latitude when it comes to national defence via an exception for “AI systems developed or used exclusively for military purposes” [my emphasis]. This exception is nowhere near as broad as that in the AIDA, which excludes all “products, services or activities under the control of the Minister of National defence”. Note that the Department of National Defence (DND) made headlines in 2020 when it contracted for an AI application to assist in hiring; it also made headlines in 2021 over an aborted psyops campaign in Canada. There is no reason why non-military DND uses of AI should not be subject to governance.

The government might justify excluding the federal public sector from governance under the AIDA on the basis that it is already governed by the Directive on Automated Decision-Making. This Directive applies to automated decision-making systems developed and used by the federal government, although there are numerous gaps in its application. For example, it does not apply to systems adopted before it took effect, it applies only to automated decision systems and not to other AI systems, and it currently does not apply to systems used internally (e.g., to govern public sector employees). It also does not have the enforcement measures that the AIDA has, and, since government systems could well be high-impact, this seems like a gap in governance. Consider in this respect the much-criticized ArriveCan App, designed for COVID-19 border screening and now contemplated for much broader use at border entries into Canada. The app has been criticized for its lack of transparency, and for the ‘glitch’ that sent inexplicable quarantine orders to potentially thousands of users. The ArriveCan app went through the DADM process, but clearly this is not enough to address governance issues.

Another important limit on the application of the AIDA is that most of its obligations apply only to “high impact systems”. This term is defined in the legislation as “an artificial intelligence system that meets the criteria for a high-impact system that are established in regulations.” This essentially says that this crucial term in the Bill will mean what cabinet decides it will mean at some future date. It is difficult to fully assess the significance or impact of this statute without any sense of how this term will be defined. The only obligations that appear to apply more generally are the obligation in s. 6 regarding the anonymization of data used or intended for use in AI systems, and the obligation in s. 10 to keep records regarding the anonymization measures taken.

By contrast, the EU’s AI Regulation applies to all AI systems. These fall into one of four categories: unacceptable risk, high-risk, limited risk, and low/minimal risk. Those systems that fall into the first category are banned. Those in the high-risk category are subject to the regulation’s most stringent requirements. Limited-risk AI systems need only meet certain transparency requirements and low-risk AI is essentially unregulated. Note that Canada’s approach to ‘agile’ regulation is to address only one category of AI systems – those that fall into the as-yet undefined category of high ‘impact’. It is unclear whether this is agile or supine. It is also not clear what importance should be given to the choice of the word ‘impact’ rather than ‘risk’. However, it should be noted that risk refers not just to actual but to potential harm, whereas ‘impact’ seems to suggest actual harm. Although one should not necessarily read too much into this choice of language, the fact that this important element is left to regulations means that Parliament will be asked to enact a law without understanding its full scope of application. This seems like a problem.

 

Privacy is a human right. It is recognized the United Nations Declaration of Human Rights and other international human rights instruments. In Canada, the Supreme Court of Canada has interpreted the. 8 Charter right to be secure against unreasonable search or seizure as a privacy right, and it has also found that data protection laws in Canada have ‘quasi-constitutional’ status because of the importance of the privacy rights on which they are premised. The nature of privacy as a human right should not be a controversial proposition, but it became so in Bill C-11, the 2020 Bill to reform the Personal Information Protection and Electronic Documents Act (PIPEDA). Bill C-11 did not address the human rights dimensions of data protection, and it was soundly criticized by the former Privacy Commissioner of Canada for failing to do so. Bill C-27, which contains the new PIPEDA reform bill, and which was introduced in June 2022, gives a nod to the human rights dimensions of data protection. This post will consider whether this is enough.

There are several reasons why the human rights dimensions of data protection law became such an issue in Canada. Data protection laws balance the privacy rights of individuals with the needs of organizations and governments to collect and use personal information for a range of purposes. If a balance is to be struck between two things, the weight given to considerations on either side of the scale must be appropriate. Recognizing the human rights dimensions of the protection of personal data gives added weight to the interests of individuals (and communities) by acknowledging the importance that control over personal data has to the exercise of a variety of human rights (including, but not limited to, dignity, autonomy and freedom from discrimination). It also acknowledges the substantial threats that the data economy can pose to human rights. Second, the EU’s General Data Protection Regulation puts the human rights dimensions of privacy and data protection front and centre. Once this has been done across the EU, the omission of a similar approach from draft legislation in Canada takes on greater significance. It starts to look like a deliberate statement. Third, Quebec takes an explicit human-rights based approach to privacy, making it – well, awkward – to have a less human rights-forward standard crafted for the rest of Canada. In Ontario, a government White Paper considering a private sector data protection law for Ontario explicitly endorsed a human rights-based approach.

The federal government’s hesitation to address the human rights dimensions of privacy is rooted in its anxiety over the constitutional footing for a federal private sector data protection law. PIPEDA has been constitutionally justified under the federal government’s general trade and commerce power. This means that it is enacted to regulate an aspect of trade and commerce at the national level. PIPEDA focuses on data collected, used, and disclosed by the private sector in the course of commercial activity. The government’s concern is that adopting a human rights-based approach would transform the statute from one that addresses the management of personal data in the commercial context to one that governs human rights as they relate to personal data. Constitutional anxiety is evident even in the new name of the future data protection law: The Consumer Privacy Protection Act [my emphasis].

The former Privacy Commissioner of Canada, Daniel Therrien, commissioned a legal opinion on the issues of constitutionality linked to adopting a human rights-based approach. This opinion found that the legislation could support such an approach within the general trade and commerce framework. The federal government clearly takes a different view, which may be rooted in an almost pathological division-of-powers anxiety. After all, this government also refused to defend the constitutional challenge to the Genetic Non-Discrimination Act, even though the constitutionality of that statute (which began its life as a private-member’s bill) was ultimately upheld by a majority of the Supreme Court of Canada.

One of the changes in Bill C-27 from Bill C-11 is the addition of a preamble. It is in this preamble that the government now makes reference to the human rights basis for privacy. The preamble also enumerates other considerations, making it clear that the interests (or rights) of individuals are just one factor in a rather complex balance. The other factors include the importance of trade and free flows of data, the need to support and foster the data-driven economy, the need for an agile regulatory framework, the need to not unduly burden small businesses, the need for harmonization, and the importance of facilitating data collection and use in the public interest.

The clauses in the preamble that address privacy and human rights include an acknowledgement that the protection of personal information is essential to the autonomy and dignity of individuals and to their full enjoyment of their fundamental rights and freedoms in Canada. This is probably the strongest statement and it is near the top of the list. There is also an acknowledgement of the importance of privacy and data protection principles found in international instruments. There are some references to human rights in relation to AI, but those relate to the Artificial Intelligence and Data Act that is part of this Bill. There is also a closing paragraph which refers to bolstering the digital and data-driven economy by establishing a regulatory framework “that supports and protects Canadian norms and values, including the right to privacy”. At best, however, this just emphasizes that the right to privacy is one factor in the balance – and not necessarily the predominant one. The government has been reasonably explicit in the preamble about the range of competing public policy considerations that feed into their data protection bill. The overall message is: “Yes, privacy is a human right, but we’re trying to do something here.”

Bill C-27 also includes the text of a proposed Artificial Intelligence and Data Act (AIDA). This statute is arguably the government’s attempt to address human rights in the AI and data context, in that it contains measures meant to address discriminatory bias in AI (which is fueled by data). It is meant to apply to ‘high impact’ systems (not defined in the Bill), although impact certainly seems to be understood in terms of harms to individuals. Next week my series of posts will begin to consider the AIDA in more detail. For present purposes, however, consider that the AIDA will only apply to systems defined as ‘high impact’; it addresses only individual and not group harms; it will apply only in the context of AI (whereas data are used in many more contexts); and many organisations and institutions are excluded from its scope. In any event, while the proper governance of AI is of great importance, so is the proper governance of personal data, which is the domain of data protection legislation. The AIDA is therefore not an answer to concerns over the need for a human rights-based approach to data protection.

I have argued for a human rights-based approach to privacy in data protection law. The volumes of data collected, the way these data are used and shared, and the potential impacts they can have on peoples’ lives all suggest that we can no longer mince words when it comes to understanding the significance of data protection. Technology now reduces just about anything to streams of data, and those data are used to profile, categorize, assess, and monitor individuals. They are used in tools of surveillance and control. Although we talk the talk of individual consent and control, such liberal fictions are no longer sufficient to provide the protection needed to ensure that individuals and the communities to which they belong are not exploited through the data harvested from them. This is why acknowledging the role that data protection law plays in protecting human rights, autonomy and dignity is so important. This is why the human rights dimension of privacy should not just be a ‘factor’ to take into account alongside stimulating innovation and lowering the regulatory burden on industry. It is the starting point and the baseline. Innovation is good, but it cannot be at the expense of human rights.

In Canada we have relied upon the normative idea in s. 5(3) of PIPEDA that any collection, use or disclosure of personal information must be “for purposes that a reasonable person would consider are appropriate in the circumstances”. This normative concept is also found in s. 12(1) of Bill C-27. Although past privacy commissioners have given substance to this provision, the concern remains that without an anchor in an explicitly human rights-based approach, the ‘reasonable person’ might, over time, be interpreted to be more excited about the potential of data to boost the economy than concerned about the adverse effects its use might have on certain individuals or groups. Given that Bill C-27 will shift interpretive authority over key concepts in the legislation from the Privacy Commissioner to the mysterious Data Tribunal, this normative wiggle-room is particularly concerning.

In spite of this, the addition of a preamble to Bill C-27, with its references to privacy and human rights is probably all that we are going to get from this government on this issue. There is not much interest in going back to the drawing board with this Bill, and the government is no doubt impatient to move the data protection law reform file forward.

In the meantime, it is worth noting that the provinces remain free to enact and/or amend their own private sector data protection laws, and to make strong statements about a human-rights-basis for data protection. The laws in Alberta and British Columbia will be reformed once a new federal bill is passed. And, with a newly re-elected government, Ontario might once again turn its attention to crafting its own law. There are other fronts on which this battle can be fought, and perhaps it is best to turn attention to these.

 

Monday, 25 July 2022 06:34

Bill C-27 and Children’s Privacy

Note: This is the fifth in a series of posts on Canada's Bill C-27 which, among other things, will reform Canada's private sector data protection law.

Bill C-27, the bill to amend Canada’s existing private sector data protection law, gives particular attention to the privacy rights of minors in a few instances. This is different from the current law, and it is a change since the previous (failed) reform bill, Bill C-11. The additions to Bill C-27 respond to concerns raised by privacy advocates and scholars regarding Bill C-11’s silence on children’s privacy.

Directly addressing children’s privacy has been a bit of a struggle for this government, which seems particularly sensitive to federal-provincial division of powers issues. After all, it is the provinces that get to determine the age of majority. A private sector data protection law that defined a child in terms of a particular age range for the purposes of consent, for example, might raise constitutional hackles. Further, many of the privacy issues that concern parents the most are ones that fall at least to some extent within provincial jurisdiction. Consider the issues around children’s privacy and educational technologies used in schools. While many of those technologies are sourced from the private sector, the schools themselves are subject to provincial public sector data protection laws, and so, the schools’ adoption and use of these technologies is governed by provincial legislation. That said, children still spend a great deal of time online; their toys are increasingly connected to the Internet of Things; their devices and accompanying apps capture and transmit all manner of data; and they, their parents and friends post innumerable pictures, videos and anecdotes about them online. Children have a clear interest in private sector data protection.

The government’s modest response to concerns about children’s privacy in Bill C-27 no doubt reflects this constitutional anxiety. The most significant provision is found in s. 2(2), which states that “For the purposes of this Act, the personal information of minors is considered to be sensitive information.” Note that the reference is to ‘minors’ and not ‘children’, and no attempt is made to define the age of majority.

If you search Bill C-27 for further references to minors, you will find few. Two important ones are found in s. 55, which deals with the right of erasure. This right, which allows an individual to request the deletion of their data, has number of significant exceptions to it. However, two of these exceptions do not apply in the case of the data of minors (see my post on the right of erasure). The first of these allows an organization to deny a request for erasure if “the disposal of the information would have an undue adverse impact on the accuracy or integrity of information that is necessary to the ongoing provision of a product or service to the individual in question”. The second allows an organization to deny a request for deletion if the data is subject to a data retention policy. Neither exception to the right of erasure applies in the case of the data of minors. This is important as it will allow minors (or those acting on their behalf) to obtain deletion of data – even outside the organization’s regular disposal schedule.

The Personal Information Protection and Electronic Documents Act currently links valid consent to a person’s capacity to understand “the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting” (s. 6.1). Bill C-11 would have eliminated this requirement for valid consent. Responding to criticisms, the government in Bill C-27, has added a requirement that consent must be sought “in plain language that an individual to whom the organization’s activities are directed would reasonably be expected to understand.” (s. 15(4)) It is good to see this element returned to the reform bill, even if it is a little half-hearted compared to PIPEDA’s s. 6.1. In this regard, Bill C-27 is an improvement over C-11. (See my post on consent in Bill C-27).

Although no other provisions are specifically drafted for minors, per se, declaring that the personal information of minors is considered ‘sensitive’ is significant in a Bill that requires organizations to give particular attention to the sensitivity of personal data in a range of circumstances. For example, an organization’s overall privacy management program must take into account both the volume and sensitivity of the information that the organization collects (s. 9(2)). The core normative principle in the legislation, which limits the collection, use and disclosure of personal information to that which a reasonable person would consider appropriate in the circumstances also requires a consideration of the sensitivity of personal data (s. 12(2)(a)). In determining whether an organization can rely upon implied consent, the sensitivity of the information is a relevant factor (s. 15(5)). Organizations, in setting data retention limits, must take into account, among other things, the sensitivity of personal data (s. 53(2)), and they must provide transparency with respect to those retention periods (s. 62(2)(e)). The security safeguards developed for personal data must take into account its sensitivity (s. 57(1)). When there is a data breach, the obligation to report the breach to the Commissioner depends upon a real risk of significant harm – one of the factors in assessing such a risk is the sensitivity of the personal data (s. 58(8)). When data are de-identified, the measures used for de-identification must take into account the sensitivity of the data, and the Commissioner, in exercising his powers, duties or functions must also consider the sensitivity of the personal data dealt with by an organization (s. 109).

The characterization of the data of minors as ‘sensitive’ means that the personal data of children – no matter what it is – will be treated as sensitive data in the interpretation and application of the law. In practical terms, this is not new. The Office of the Privacy Commissioner has consistently treated the personal data of children as sensitive. However, it does not hurt to make this approach explicit in the law. In addition, the right of erasure for minors is an improvement over both PIPEDA and Bill C-11. Overall, then, Bill C-27 offers some enhancement to the data protection rights of minors.

As part of my series on Bill C-27, I will be writing about both the proposed amendments to Canada’s private sector data protection law and the part of the Bill that will create a new Artificial Intelligence and Data Act (AIDA). So far, I have been writing about privacy, and my posts on consent, de-identification, data-for-good, and the right of erasure are already available. Posts on AIDA, will follow, although I still have a bit more territory on privacy to cover first. However, in the meantime, as a teaser, perhaps you might be interested in playing a bit of statutory MadLibs…...

Have you ever played MadLibs? It’s a paper-and-pencil game where someone asks the people in the room to supply a verb, noun, adverb, adjective, or body part, and the provided words are used to fill in the blanks in a story. The results are often absurd and sometimes hilarious.

The federal government’s proposal in Bill C-27 for an Artificial Intelligence and Data Act, really lends itself to a game of statutory MadLibs. This is because some of the most important parts of the bill are effectively left blank – either the Minister or the Governor-in-Council is tasked in the Bill with filling out the details in regulations. Do you want to play? Grab a pencil, and here goes:

Company X is developing an AI system that will (insert definition of ‘high impact system). It knows that this system is high impact because (insert how a company should assess impact). Company X has established measures to mitigate potential harms by (insert measures the company took to comply with the regulations) and has also recorded (insert records it kept), and published (insert information to be published).

Company X also had its system audited by an auditor who is (insert qualifications). Company X is being careful, because if it doesn’t comply with (insert a section of the Act for which non-compliance will count as a violation), it could be found to have committed a (insert degree of severity) violation. This could lead to (insert type of proceeding).

Company X, though, will be able to rely on (insert possible defence). However, if (insert possible defence) is unsuccessful, Company X may be liable to pay an Administrative Monetary Penalty if they are a (insert category of ‘person’) and if they have (insert factors to take into account). Ultimately, if they are unhappy with the outcome, they can launch a (insert a type of appeal proceeding).

Because of this regulatory scheme, Canadians can feel (insert emotion) at how their rights and interests are protected.

Bill C-27, which will amend Canada’s private sector data protection law, contains a right of erasure. In its basic form, this right allows individuals to ask an organization to dispose of the personal information it holds about them. It is sometimes referred to as the right to be forgotten, although the right to be forgotten has different dimensions that are not addressed in Bill C-27. Bill C-27’s predecessor, Bill C-11, had proposed a right of erasure in fairly guarded terms: individuals would be able to request the disposal only of information that the organization had obtained from the individual. This right would not have extended to information the organization had collected through other means – by acquiring that information from other organizations, scraping it from the internet, or even creating it through profiling algorithms. Section 55 of Bill C-27 (“disposal at individual’s request”) brings some interesting changes to this limitation. Significantly, it extends the right of erasure to the individual’s personal information that “is under the organization’s control”. Nevertheless, in doing so, it also adds some notable restrictions.

First, Bill C-27’s right of erasure will only apply in three circumstances. The first, set out in s. 55(1)(a), is where the information was collected, used or disclosed in contravention of the Act. Basically, if an organization had no right to have or use the personal data in the first place, it must dispose of the information at the request of the individual.

The second situation, set out in s. 55(1)(b), is where an individual has withdrawn their consent to the collection, use or disclosure of the information held by the organization. Perhaps a person agreed to allow an organization to collect certain data in addition to the data considered necessary to providing a particular product or service. If that person decides they no longer want the organization to collect this additional data, not only can they withdraw consent to its continued collection, they can exercise their right to erasure and have the already-collected data deleted.

Finally, s. 55(1)(c) allows an individual to request deletion of personal data where the information is no longer necessary for the continued provision of a product or service requested by the individual. If an individual ceases to do business with an organization, for example, and does not wish the organization to retain their personal information, they can request its deletion. Here, the expansion of the right to include all personal information under the organization’s control can be important. For example, if you terminate your contract with a streaming service, you could request deletion not just of the customer data you provided to them, and your viewing history, but also the organization’s inexplicable profile of you as someone who loves zombie movies.

Where an organization has acceded to a request for disposal of personal data, it is also obliged, under s. 55(4), to inform “any service provider” to which it has transferred the data to dispose of them. The organization is responsible for ensuring this takes place. Note, however, that the obligation is only to inform any service provider, defined in the bill as an entity that “provides services for or on behalf” of the organization to assist it in fulfilling its purposes. The obligation to notify does not extend to those to whom the data may have been sold.

There are, however, important exceptions to this expanded right of erasure. Subsection 55(2) would allow an organization to refuse to dispose of data under s. 55(1)(b) or (c) in circumstances where it is inseparable from the personal data of another person (for example, that embarrassing photo of you partying with others that someone else posted online); other legal requirements require the organization to retain the information; or the organization requires the data for a legal defence or legal remedy.

A few other exceptions are potentially more problematic. Paragraph 55(2)(d) creates an exception to the right of erasure where:

(d) the information is not in relation to a minor and the disposal of the information would have an undue adverse impact on the accuracy or integrity of information that is necessary to the ongoing provision of a product or service to the individual in question;

For example, this might apply in the case where an individual remains in a commercial relationship with an organization, but has withdrawn consent to a particular use or disclosure of their data and has requested its deletion. If the organization believes that deleting the information would adversely affect the integrity of the product or service they continue to provide to the individual, they can refuse deletion. It will be interesting to see how this plays out. There may be a matter of opinion about the impacts on the integrity of the product or service being supplied. If an individual finds an organization’s recommendation service based on past purchases or views to be largely useless, seeking deletion of data about their viewing history will not impact the integrity of the service from the individual’s point of view – but the organization might have a different opinion.

In Bill C-27, the government responded to criticisms that its predecessor, Bill C-11, did nothing to specifically deal with children’s privacy. Bill C-27 addresses the privacy of minors in specific instances, and the right of erasure is one of them. Interestingly, the right of erasure prevails under s. 55(2)(d) for minors, presumably even when the erasure would have an “undue adverse impact on the accuracy or integrity of information that is necessary to the ongoing provision of a product or service”. It seems that minors will get to choose between deletion and adverse impacts, while those over the age of majority will have to put up with retention and uses of their personal data to which they object.

Another exception to the right also applies only to those past the age of majority. Paragraph 55(2)(f) provides that an organization may refuse a request for disposal of personal information if:

(f) the information is not in relation to a minor and it is scheduled to be disposed of in accordance with the organization’s information retention policy, and the organization informs the individual of the remaining period of time for which the information will be retained.

What this means is that if an organization has a retention policy that conforms to s. 53 of Bill C-27 (one that provides for the destruction of personal information once it is no longer necessary for the purposes for which it was collected, used or disclosed), then it can refuse a request for erasure – unless, of course, it is a minor who requests erasure. In that case, they must act in advance of the normal disposal schedule. This provision was no doubt added to save organizations from the burden of having to constantly respond to requests for erasure of personal data. For large swathes of personal data, for example, they can prepare a standard response that informs a requestor of their retention policy and provides the timetable on which the data will be deleted once it is no longer necessary to fulfill the purposes for which it was collected. If this provision can also be relied upon when an individual ceases to do business with an organization and requests the deletion of their information, then the right of erasure in Bill C-27 will become effectively useless in the case of any company with a data retention policy. Except, of course, for minors.

Finally, organizations will be given the right to refuse to consider requests for deletion that are “vexatious or made in bad faith”. Let’s hit pause here. This exception is to protect commercial entities against data subjects. I understand that organizations do not want to be subject to mass campaigns for data deletion– or serial requests by individuals – that overwhelm them. That might happen. However, the standard form email that will be part of the ‘regular deletion schedule’ exception discussed above will largely suffice to address this problem. Organizations now have enormous abilities to collect massive amounts of personal data and to use these data for a wide variety of purposes. Many do this responsibly, but there are endless examples of overcollection, over-retention, excessive sharing, poor security, and outright abuses of personal data. The right of erasure is a new right for individuals to help them exercise greater control over their personal data in a context in which such data are often flagrantly misused. To limit this right based on what an organization considers vexatious is a demonstration of how the balance in Bill C-27 leans towards the free flow and use of personal data rather than the protection of privacy.

It is important to note that there is yet another limit on the right of erasure, which is found in Bill C-27’s definition of ‘dispose’. According to this definition, dispose means “to permanently and irreversibly delete personal information or to anonymize it. Thus, an organization can choose to anonymize personal data, and once it has done so, the right of erasure is not available. (See my post on anonymized and deidentified data for what ‘anonymized’ means). Section 2(3) of Bill C-27 also removes the right of erasure where information is merely de-identified (pseudonymized). This seems like an internal contradiction in the legislation. Disposal means deletion or rigorous anonymization – but, under s. 2(3), a company can just pseudonymize to avoid a request for disposal. The difference seems to be that pseudonymized data may still eventually need to be disposed of under data retention limits, whereas anonymized data can be kept forever.

All told, as a right that is meant to give more control to individuals, the right of erasure in Bill C-27 is a bit of a bust. Although it allows an individual to ask an organization to delete data (and not just data that the individual provided), the right is countered by a great many bases on which the organization can avoid it. It’s a bit of a ‘Canadian compromise’ (one of the ones in which Canadians get compromised): individuals get a new right; organizations get to side-step it.

 

 

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