Letter regarding complaint against federal political parties

The Office of the Privacy Commissioner of Canada sent the following letter in response to a complainant under the Personal Information Protection and Electronic Documents Act (PIPEDA) related to three federal political parties.

BY EMAIL

March 25, 2021

Mr. Bill Hearn
Fogler, Rubinoff LLP 
77 King Street West
Suite 3000, P.O Box 95
TD Centre North Tower 
Toronto, Ontario M5K 1G8

Dear Mr. Hearn:

I am writing in response to your correspondence received by my Office on August 22, 2019, in regards to Mr. Robert (Gary) Dickson’s complaint (the “Complainant”) against the New Democratic Party (the “NDP”), the Liberal Party of Canada (the “LPC”) and the Conservative Party of Canada (the “Federal Political Parties”), filed pursuant to s. 11 of the Personal Information Protection and Electronic Documents Act (“PIPEDA” or the “Act”).

As you know, my Office is responsible for overseeing the Privacy Act and PIPEDA. The Privacy Act covers the personal information handling practices of federal government institutions, while PIPEDA covers the private sector’s personal information handling practices in the course of commercial activities, with some exceptions.

Despite the able and thorough submissions made by the Complainant in this matter, we have concluded that PIPEDA does not apply to the activities of the Federal Political Parties that are the subject of the complaint as they are not commercial in character. While we appreciate and share the Complainant’s desire to ensure that the Federal Political Parties are subject to basic privacy protections, we must apply the law as it is currently drafted.

To come to our conclusion in this matter, my staff and I took the following actions:

• We carefully reviewed the Complainant’s extensive representations and evidence submitted in support of his complaint;
• We sought representations from the Federal Political Parties with respect to the application of PIPEDA to their activities;
• We reviewed the written representations we received from the NDP and the LPC (the Conservative Party of Canada did not provide a response);
• We provided an opportunity for the Complainant to review and comment on the representations received from the NDP and the LPC asserting that PIPEDA did not apply to their activities;
• We reviewed the final reply representations received from the Complainant; and
• We carefully considered the applicable legislation and jurisprudence relevant to this matter.

The Complainant’s allegations

This Complaint relates to alleged violations of PIPEDA by the Federal Political Parties with respect to their collection, use and disclosure of personal information from a variety of sources for the purpose of creating voter profiles and conducting political advertising, contrary to their stated privacy policies.

The Complainant submitted that PIPEDA applies to the Federal Political Parties. In particular, the Complainant submitted that activities undertaken by the Federal Political Parties for the purpose of selling and/or promoting their brand to voters and generally to sell or promote their goods, services and business interests are commercial activities and are therefore subject to the Act.

The Complainant cited the following as examples of commercial activities undertaken by the Federal Political Parties via targeted political advertisements:

• convincing Canadians to purchase party-branded memorabilia (e.g. apparel);
• convincing Canadians to make political donations;
• convincing Canadians to elect party candidates to political office during elections; and
• convincing Canadians to support the party’s policy platforms.

The Complainant stated that the Federal Political Parties also purchase personal information of Canadians, engage the services of businesses to profile voters and send targeted advertisements, and promote and protect their brands just as major companies do.

The Complainant submitted that the Federal Political Parties are contravening PIPEDA by not properly informing Canadians how they collect, use and/or disclose their personal information to conduct political advertising, including “micro-targeted” ads based on detailed profiles of individuals. The Complainant requested that my Office investigate his allegations against the Federal Political Parties and issue recommendations as appropriate.

Response by the NDP and LPC

In light of Complainant’s allegations, we asked the Federal Political Parties to provide their positions on the threshold issue as to whether PIPEDA applies to their activities. In response, both the NDP and the LPC indicated that they are not engaged in commercial activities within the meaning of PIPEDA when they attempt to gain public support or solicit donations or memberships and that therefore the Act did not apply to these activities.

Both the NDP and the LPC asserted that their activities are not-for-profit political activities and are subject to comprehensive regulation under the Canada Elections Act (the “CEA”). They submitted that the purpose of registered political parties, as required by the CEA, is to promote participation in public affairs. The NDP stated that registered political parties are required to operate on a not-for-profit basis and the soliciting of donations and memberships is not done for consideration. Further, both parties noted that the CEA contains specific rules around the publication of privacy policies and access to the list of electors, indicating that Parliament intended federal political parties’ practices with respect to personal information be regulated under that Act, not PIPEDA. They asserted that the fact that political parties protect and promote their brands is to further their political goals and support, not commercialization.

The NDP submitted that the sale of merchandise could be considered a commercial activity to the extent that it was not considered a “contribution” under the CEA, but that it did not engage in this activity. The LPC submitted its sale of merchandise is for a political purpose, given that any revenues generated over above the cost of the items are to be treated as “contributions” under the CEA. The LPC further submitted that it uses third party service providers to further its political purposes and this does not transform its activities into commercial ones.

Both parties asserted that they did not sell, barter, or lease its donor/supporter lists and only use such lists for purposes of communicating with voters and encouraging participation in democracy.

The Complainant’s reply

In an extensive and robust reply, the Complainant reiterated that PIPEDA was intended to provide broad-based privacy protections. Given it is quasi-constitutional in nature, it must be given a broad, liberal and purposive interpretation that must be read in harmony with the democratic rights contained in section 3 of the Charter of Rights and Freedoms. According to the Complainant, the Federal Political Parties clearly collect significant amounts of personal information and there is a need to ensure that their practices are subject to privacy protections. By reference to excerpts from Hansard and other sources, the Complainant submitted that PIPEDA was intended to apply to Federal Political Parties and that the fact that the CEA also applies to them does not oust PIPEDA’s application.

The Complainant asserted that the definition of “commercial activity” does not require an organization to be commercial; rather the question is whether it is engaged in commercial activity. The Complainant, who provided a third-party memo in support of their argument, offered numerous examples of activities that, it submitted, constituted commercial activities on the part of the Federal Political Parties. According to the Complainant, the sale of merchandise, tickets for fundraising events and memberships clearly meet the ordinary meaning of commercial activity. The Complainant also distinguished past case law^{Footnote 1} interpreting “commercial activity” under PIPEDA and stated that in any event these cases should not be followed since they were inconsistent with the intent that PIPEDA apply broadly.

Analysis

1. The Scope of the Jurisdictional Objection raised by the NDP and LPC

In light of the submissions received, we determined that the first issue we must address in this matter is whether PIPEDA applies to the activities that are the subject of the complaint.

Part 1 of PIPEDA applies to every organization in respect of personal information that “the organization collects, uses or discloses in the course of commercial activities” (s. 4(1)(a)).

The Federal Political Parties fall within the broad definition of “organization” within the meaning of the Act.^{Footnote 2} There is also no question that they collect, use and disclose “personal information” of supporters, members, volunteers, general voters and others in the course of their activities.^{Footnote 3} Indeed, the extensive evidence before us indicates that the information gathering practices of Federal Political Parties have greatly expanded over the years and that large amounts of personal information are increasingly collected and used to profile and communicate with individuals, including through micro-targeted messages and other forms of communication.^{Footnote 4}

Rather, the threshold issue that is raised by this complaint is whether the Federal Political Parties’ collection, use and disclosure of personal information in order to encourage voters to support them and their candidates, to make political donations and support their other fundraising efforts occurs in the course of “commercial activities” such that it is subject to PIPEDA.

2. Whether the Federal Political Parties’ collection, use and disclosure of personal information occurs in the course of commercial activities

“Commercial activity” is defined in the Act to mean “any particular transaction, act or conduct or any regular course of conduct that is of a commercial character, including the selling, bartering or leasing of donor, membership or other fundraising lists.” (s. 2(1)) The Federal Court of Appeal has noted that commerce generally includes exchange, trade, buying and selling.^{Footnote 5}

It is clear from this definition that the assessment of commercial activity is not based on the nature of the organization but on the nature of the activity in question.^{Footnote 6} We also agree with the Complainant that the Federal Political Parties have not been expressly exempted from the Act and could therefore fall within its ambit to the extent that they engage in a commercial activity that involves the collection, use or disclosure of personal information.

We accept therefore, as the NDP appeared to do as well, that a federal political party could be subject to the Act to the extent that it engages in a “transaction, act or conduct or any regular course of conduct” that is of a commercial character. This could be the case, for example, were a federal political party to sell, barter, or lease a donor or membership list, an activity expressly contemplated by the definition of “commercial activity”. It could also be the case where a registered political party engages in “pure commercial transactions” as described by the Chief Electoral Officer, for instance, when a political party sub-leases an office at fair market value.^{Footnote 7}

This said, we are not convinced that the regular activities of the Federal Political Parties, including the activities targeted by the complaint, are commercial in character within the meaning of the Act for the following reasons.

a. The general activities of the Federal Political Parties;

The Complainant puts forth both a broad and a narrow argument for why the Act applies. The broad argument is that the Federal Political Parties, in the way they collect personal information to target voters, act very much like businesses with brands, sophisticated marketing campaigns, and the use of third party commercial enterprises to provide things like data sources and analytics. Under this broader version, all of the Federal Political Parties’ activities are “indivisible” (to use the Complainant’s expression) and commercial in nature.

The difficulty with this argument is that it is inconsistent with the ordinary meaning of commercial activity and the nature of the activities in question. The regular activities of the Federal Political Parties pointed to by the Complainant, including soliciting donations, convincing Canadians to elect party candidates to political office during elections and convincing Canadians to support the party’s policy platforms lack any element of exchange. For instance, as the Complainant noted, a donation to a charity is not a commercial transaction.^{Footnote 8} Nothing is sold, bartered or leased, nor can the contributor reasonably expect something in return for his or her donation. Similarly, we fail to see how a donation to a political party can be fairly characterized as commercial in nature.

This is also true of several other activities pointed to by the Complainant including encouraging support or votes. In our view, convincing a voter to support a party’s platform or candidate does not involve a commercial exchange in any ordinary sense of that term.

The use of third party service providers to further the Federal Political Parties’ political activities does not change this analysis. In State Farm Mutual Automobile Insurance Company v. Privacy Commissioner of Canada, the Federal Court found that the primary characterization of the activity in issue is the dominant factor in assessing the commercial character of an activity under PIPEDA, not the incidental relationships that might exist with third parties.^{Footnote 9} The Complainant asserts that this case should no longer be followed. However, it is binding authority from the Federal Court; one that we are required to follow to the extent that it is relevant to the facts at hand. In this case, the primary characterization of such activities as advertising to voters is political, not commercial, in nature notwithstanding that third party businesses may assist Federal Political Parties in delivering such messages.

Similarly, the fact that data processing practices of political parties have evolved significantly since PIPEDA was adopted does not change their primary characterization, which consist of collecting, using and disclosing personal information in order to reach out to the voting public by way of political communications and/or advertising. The underlying purpose of their political communications/advertising is to solicit political donations, encourage voters to elect party candidates, or encourage voters to support particular party platforms.^{Footnote 10} This is a unique role played in Canadian democracy and does not involve the hallmarks of commercial exchange.^{Footnote 11} This finding is also consistent with the purpose of the Act. PIPEDA was intended to provide broad-based privacy protections, but in a commercial context and in certain other defined circumstances, as is made clear by the long title of the Act^{Footnote 12} and the application provision in section 4. Although the Federal Political Parties could be brought within its scope, we cannot ignore that for the time being there is no indication that Parliament intended that the Act would apply to the political activities of federal parties.

b. The sale of merchandise, event tickets, memberships, etc.;

The Complainant’s narrower argument focuses on the specific activities of the Federal Political Parties that involve an element of exchange, in particular the sale of memberships, the sale of branded merchandise, and events that involve the sale of tickets (e.g. to attend a fundraising dinner with politicians). The Complainant asserts that because these activities involve an exchange of value they are commercial in nature and are subject to the Act.

We note that we were presented with no evidence that the Federal Political Parties sell, barter or lease member or donor lists. Our analysis therefore proceeded on the basis that this was not occurring.

We also note that the NDP indicated that it does not sell branded merchandise. That said, it did not dispute that it sells memberships or tickets to fundraising events.

Although the sale of merchandise, memberships, and tickets involve an element of exchange, we are not convinced they qualify as commercial in character given the context in which the Federal Political Parties operate. In particular, these activities all involve the raising of funds for the Federal Political Parties’ political activities. Under the CEA, any revenue generated from the sale of merchandise and tickets for fundraising events above their cost, or memberships above a certain threshold, are required to be treated as contributions, which are strictly regulated under the CEA.^{Footnote 13}

This is consistent with Rodgers v. Calvert, where the Ontario Superior Court found that the “mere ‘exchange of consideration’” does not necessarily indicate commercial activity.^{Footnote 14} In that case, the Court found that the payment of a fee in exchange for membership does not in itself lead to the finding that PIPEDA applies. The Complainant disputes the continued relevance of this decision, but my Office has consistently held that the payment of membership fees for not-for-profit organizations is not a commercial activity.^{Footnote 15} While the Federal Political Parties may charge fees for membership, the fees are to fund their political activities and do not, in our view, constitute a commercial transaction.

Furthermore, even if we are wrong on this point and these specific activities are commercial in nature, that would not give my Office jurisdiction to enquire into the Federal Political Parties’ practices writ large with respect to the handling of personal information as the Complainant is requesting. The Complainant seeks an investigation not into the Federal Political Parties’ handling of personal information obtained from specific activities such as the sale of merchandise, but into their practices generally in relation to political advertising and with respect to all voters. However, the Federal Political Parties general practices with respect to the collection, use and disclosure of personal information clearly involve many activities that are not commercial in nature, as noted above. The Complainant cannot use discrete and limited activities such as the sale of merchandise as a springboard to expand the Act’s application to all activities of the Federal Political Parties, including those that are not commercial in nature.

c. Parliament has declined to extend PIPEDA to the Federal Political Parties.

Although not determinative, we are also influenced in our interpretation by the fact that Parliament has recently declined calls to make the Federal Political Parties expressly subject to the Act. Parliament was seized with the issue of extending privacy laws to federal parties when it studied Bill C-76, Elections Modernization Act in 2018. My Office recommended amendments that would have explicitly extended PIPEDA’s protections to federal political parties.^{Footnote 16} However, these amendments were not acted upon. The Government has also declined to act on a recommendation from the ETHI Committee to amend PIPEDA in order to subject federal political parties to it, pointing instead to provisions in the CEA that required parties’ to publish a privacy policy and indicating that it would continue “to reflect on the extension of Canada’s privacy protection frameworks to political parties.”^{Footnote 17}

Although I strongly believe that privacy laws should govern political parties to better protect both privacy and democratic rights, I must apply the law as it is today. As you know, as Privacy Commissioner I have often called on the need to expand privacy laws to ensure that political parties are subject to legislation and fully respect the privacy rights of Canadians. As I told Parliament, “what matters are that internationally recognized privacy principles… be included in domestic law and that an independent third party … have the authority to verify compliance.”^{Footnote 18}

Conclusion

In light of the above, no further action will be taken on your complaint.

I would like to extend my appreciation for the important dedication of your client into advancing the very important issue of privacy regulation for federal political parties.

Sincerely,