Data Residency Requirements Canada: Does Canadian Data Need to be Stored in Canada Only?

No, Canadian data doesn’t have to stay in Canada.

Neither the Personal Health Information Protection Act (PHIPA) nor the Personal Information Protection and Electronic Documents Act (PIPEDA) requires private companies to keep their data stored only within Canada.

However, if we’re talking about government entities, they do have strict rules. These rules make sure that data doesn’t leave the country.

So, while private sector businesses have more flexibility, they still need to follow PHIPA and PIPEDA laws.

This means they must have solid technical and physical security measures in place to protect data, no matter where it’s stored.

A 2024 Guide to Canadian Data Residency Requirements

Here are the key points regarding Canadian data residency:

1. PIPEDA Compliance

PIPEDA governs how personal data must be handled.

While PIPEDA does not explicitly require data to be stored in Canada, it mandates that organizations must protect personal information, regardless of where it is stored.

2. Provincial Regulations

Some provinces have stricter data residency laws.

For example, British Columbia, Alberta, and Quebec have their own privacy legislation that may require data to be stored within the province.

3. Government Data

For federal government data, there are more stringent rules, often necessitating that sensitive data be stored on Canadian soil due to national security concerns.

4. Cloud Services

Many organizations using cloud services should check their providers’ data residency practices.

Some cloud providers offer data storage options that comply with Canadian laws and can guarantee data remains in Canada.

In Canada, there is one federal-level data privacy law called PIPEDA and multiple provincial-level laws such as,

• PIPA: Personal Information Protection Act (AB)
• PHIPA: Personal Health Information Protection Act (ON) (Healthcare-specific)
• PHIPAA: Personal Health Information Privacy and Access Act (NB)
• PHIA: Personal Health Information Act (NS, NL)
• Quebec Privacy Act (QB)

So, if you are practicing a business (for example: a healthcare business in Ontario), PHIPA surely applies to you.

But PIPEDA also applies to your business practice.

Majorly, the requirements of both federal and provincial data protection laws in Canada are the same, but there are some differences.

For example, PHIPA does apply to you during both commercial and non-commercial healthcare activities.

Whereas, PIPEDA applies when you are collecting, using, and sharing data during commercial activities only, regardless of the industry.

If you belong to the private sector, you can store data outside Canada, but you must ensure it is done securely. Here are the key responsibilities to keep in mind:

1. Data Security:

You are responsible for the secure storage of data. Canadian laws do not specify technical safeguards like HIPAA does.

2. PIPEDA Requirements:

• Use contracts or other means to ensure high protection levels while third parties process your data.
• Notify the Privacy Commissioner of any data breaches.

3. Validate Policies:

Ensure that your data storage provider has robust privacy policies and staff training in place.

By adhering to these guidelines, you can protect your data and remain compliant with PIPEDA.

The global economy highly depends on the cross-border transfer of data.

But at the same time, it also holds significant privacy and security risks.

Thus, to keep privacy risks at the minimum level while the data is being stored, transferred, and used across borders, different countries have imposed different data residency requirements.

For example, the European Commission restricts data transfer with jurisdictions that they find offering not “adequate” protection for personal information.

This is called the state-to-state approach.

But in Canada, “PIPEDA does not prohibit organizations in Canada from transferring personal information to an organization in another jurisdiction for processing.”

However, PIPEDA unquestionably asks one organization to validate the privacy and security measures of another organization that it is dealing with.

Thus, it is called to have an organization-to-organization approach in Canada.