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Interpretation Bulletin: Commercial Activity

One of the Commissioner’s primary roles is to investigate and try to resolve privacy complaints against organizations. The Commissioner’s findings will depend on the facts of each case and will be informed by the evolving jurisprudence. Over time, findings on certain key issues have begun to crystallize into general principles that can serve as helpful guidance for organizations.

In an effort to summarize the general principles that have emerged from court decisions and the Commissioner’s findings to date, the OPC issues Interpretations of certain key concepts in PIPEDA. These Interpretations are not binding legal interpretations, but rather, are intended as a guide for compliance with PIPEDA. As the Commissioner issues more findings, and the courts render more decisions, these Interpretations may evolve and be further refined over time.

The Meaning of “Commercial Activity”

I. Relevant Statutory Provisions

Subsection 2(1) of PIPEDA states that “commercial activity” means “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.”

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

II. General Interpretations by the Courts

  1. An organization offering free services may, in doing so, be engaged in a “commercial activity” within the meaning of PIPEDA. One ought to look beyond the free aspect of the specific activity in question and consider such activity within the context of the organization’s business model as a whole. (Reference re Subsection 18.3(1) of the Federal Courts Act, 2021 FC 723).
  2. The collection of evidence on a plaintiff by an individual who is a defendant in a tort action brought by that plaintiff would clearly not constitute a “commercial activity” within the meaning of PIPEDA. “Indeed, the fact that an individual defendant collects evidence himself or herself for the purpose of a defence to a civil tort action is clearly not a commercial activity on the part of that defendant since there is no “commercial character” associated to that activity.” (State Farm Mutual Automobile Insurance Company v. Privacy Commissioner of Canada, 2010 FC 736).
  3. “…(I)f the primary activity or conduct at hand, in this case the collection of evidence on a plaintiff by an individual defendant in order to mount a defence to a civil tort action, is not a commercial activity contemplated by PIPEDA, then that activity or conduct remains exempt from PIPEDA even if third parties are retained by an individual to carry out that activity or conduct on his or her behalf. The primary characterization of the activity or conduct in issue is thus the dominant factor in assessing the commercial character of that activity or conduct under PIPEDA, not the incidental relationship between the one who seeks to carry out the activity or conduct and third parties.” (State Farm Mutual Automobile Insurance Company v. Privacy Commissioner of Canada, 2010 FC 736).
  4. PIPEDA does not apply to the disclosure of relevant information required in the context of a legal proceeding; the relationship between litigants in the context of a legal proceeding is not one that can be described as commercial. (Hatfield v. Intact Insurance Company, 2014 NSSC 232 (CanLII)).
  5. A physician is engaged in a commercial activity when he or she conducts an independent medical examination of an individual on behalf of an insurance company, for the purpose of processing a claim for insurance benefits. (Wyndowe v. Rousseau, 2008 FCA 39 (CanLII))
  6. Not-for-profit organizations are not automatically exempt from PIPEDA. Whether an organization is a non-profit business for purposes of taxation is not determinative of whether its collection, use or disclosure of personal information is carried out in the course of commercial activity (Rodgers v. Calvert, 2004 ON SC (CanLII))
  7. Although an association’s collection of membership fees in exchange for the services and benefits of membership may constitute an “exchange of consideration” under the laws of contract, this does not in itself lead to the finding of a commercial activity for the purposes of PIPEDA. (Rodgers v. Calvert, 2004 ON SC (CanLII))
  8. The provision of mandatory professional liability insurance for Ontario lawyers by LawPro, a regulatory insurer, was found not to constitute commercial activity for the purposes of PIPEDA.  “Although LawPro is designed to conduct itself in a financially viable manner, its principal shareholder is the Law Society [of Upper Canada] – a regulatory body – and its mandate entails ‘a commitment to working with the bar in the public interest over the long term’…  That mandate takes LawPro outside the type of activities to which PIPEDA applies.” (Cusack v. Lawyers’ Professional Indemnity Co., 2013 ONSC 5511 (CanLII)).

III. Application by the OPC in Different Contexts

Whether an organization can be said to collect, use or disclose personal information in the course of a commercial activity will vary depending on the facts of each case. In most cases, determining whether an organization is engaged in a commercial activity is straightforward, while sometimes the issue is more complex and requires closer examination. The following highlights cases in a variety of contexts where the circumstances have called for contemplation of the meaning of “commercial activity”:


Education and Day Care

  • A daycare organization was found to be engaged in commercial activities despite the fact that it was a non-profit organization partially subsidized by a municipal government.
  • A non-profit organization that administers university entrance exams was found to be engaged in commercial activity. The OPC determined that the simple fact that the organization is non-profit and membership-based does not mean that it does not engage in transactions of a commercial character which would trigger the application of PIPEDA. In the circumstances, the organization’s core activities were found to serve, primarily, the administrative and organizational needs of its members and not educational or other public purposes and thus constituted an activity with a commercial character.
  • A private school was found not to be engaged in a commercial activity when it collected personal information for admissions purposes. The Assistant Commissioner employed this two part test to determine whether the organization was covered by the Act:
    1. What is the institution’s core activity? Is the institution providing educational services as its core activity? If so, the activities should presumptively be considered not to have a “commercial character.”
    2. The presumption that the activities of an educational institution do not have a commercial character will be rebutted if the institution has, as one of its objectives, the goal of earning a profit for the owners of the institution.

Applying this test, the Assistant Commissioner concluded that the organization in question was a private school, with education as its core activity. On the second branch of the test, the Assistant Commissioner found no indication that the school’s goal was to earn a profit for its owners, consistent with the organization’s status as a charitable, not-for-profit organization. Therefore, the school was able to uphold the presumption that its core educational activities were of a non-commercial character.

Real Estate


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