Federal Court Rules on Scope of "Commercial Activity" under PIPEDA

For companies subject to Canada's private-sector privacy legislation, the recent Federal Court of Canada decision in State Farm Mutual Automobile Insurance Company v. Canada (Privacy Commissioner) may come as both a relief and a disappointment. The court's decision sheds some light on the types of "commercial activities" governed by the Personal Information Protection and Electronic Documents Act (PIPEDA), but it failed to settle the issue of PIPEDA's constitutional validity as it relates to the intra-provincial activities of provincially regulated companies.

PIPEDA applies to private-sector organizations that collect, use or disclose personal information in the course of "commercial activities." It defines "commercial activity" as any transaction, act, conduct or regular course of conduct that is of a commercial character. While PIPEDA is a federal statute, it also applies in any province without legislation that is "substantially similar" to PIPEDA.