The Privacy Gap: Why Canada's Stalled Federal Laws Mean More Risk for Your Small Business in 2025

• by Admin
• November 04, 2025

The Privacy Gap: Why Canada's Stalled Federal Laws Mean More Risk for Your Small Business in 2025

The Law That Wasn't, and the Danger That Is

For the past several years, Canadian businesses have been bracing for a new federal law to replace our aging privacy legislation (PIPEDA). That law was called Bill C-27, and it promised a complete overhaul with massive fines, new consumer rights, and rules for Artificial Intelligence.

Then, in early 2025, it all stopped. Due to a prorogued Parliament and a subsequent federal election, Bill C-27 died on the order paper. It is not law.

For a small business owner, this might sound like a reprieve—a "get out of jail free" card. It is the exact opposite.

The failure of a new federal law has not created a vacuum; it has ceded leadership to stricter, more aggressive provincial laws (like Quebec's Law 25) and left businesses exposed. In 2025, you are not in an unregulated space. You are in a complex, fragmented landscape where customer expectations are at an all-time high, and the cost of a single breach — in both fines and reputation — can be fatal.

If you collect any customer data (names, emails, phone numbers, purchase history), this guide is for you. Here’s what you need to know about the real state of digital privacy and cybersecurity in Canada today.

Disclaimer: This article provides general information and is not a substitute for legal advice. Every business's data-handling practice is unique. We highly recommend consulting with a qualified business or privacy lawyer to assess your specific situation.

Part 1: The New "De Facto" Standard: Quebec's Law 25

While Ottawa stalled, Quebec did not. Quebec's Law 25 (formerly Bill 64) is fully in effect and is now the toughest privacy law in Canada.

"But I'm not in Quebec," you might say. "My business is in Brampton."

Does your website get traffic from Quebec? Do you have customers, clients, or even just email subscribers who live in Quebec? If the answer is yes, you are very likely subject to Law 25 and its severe penalties.

Because it is the strictest standard, Law 25 has become the high-water mark that all Canadian businesses should aim for. Its key requirements include:

• A Privacy Officer: You must designate a person to be responsible for privacy compliance (by default, this is the CEO).
• Plain-Language Consent: "I agree to the terms" is no longer enough. You must clearly explain what you are collecting, why you are collecting it, and who it will be shared with, in simple language.
• Mandatory Breach Reporting: You must report any data breach that poses a "risk of serious injury" to both the Quebec privacy regulator and the affected individuals.
• Privacy Impact Assessments (PIAs): You must conduct a formal assessment before launching any new project or system that involves collecting personal information.
• New Consumer Rights: Customers have the right to request their data be deleted (the "right to be forgotten") or transferred.

The principles of the failed Bill C-27 were very similar. This is the undisputed direction of Canadian law.

Part 2: Why Your Old Cybersecurity Isn't Good Enough

Privacy law and cybersecurity are two sides of the same coin. Your privacy policy is the promise you make to customers. Your cybersecurity is how you keep that promise.

All Canadian privacy laws, including the old PIPEDA (which is still in force!) and Quebec's Law 25, have a core "safeguarding" principle. You are legally required to protect the personal information you hold with security safeguards that are "appropriate to the sensitivity of the information."

In 2025, cyber threats are more sophisticated than ever, and small businesses are the primary target. A recent survey showed that over 40% of cyberattacks target small businesses, believing they have weaker defenses.

This means your "safeguarding" obligation has a much higher bar to clear. "Appropriate" cybersecurity in 2025 is no longer just having an antivirus program. It means:

• Multi-Factor Authentication (MFA): Using a password plus a code from your phone to access all critical accounts (email, banking, cloud storage).
• Data Encryption: Ensuring customer data is encrypted, both when it's stored on your server ("at rest") and when it's being sent ("in transit").
• Regular Data Backups: Maintaining secure, separate, and offline (or "air-gapped") backups of your critical data so you can recover from a ransomware attack without paying.
• Employee Training: Your staff is your biggest vulnerability. They must be trained to spot phishing emails and social engineering attempts.
• Vendor Management: You are responsible for the data you share with third parties (like your email marketing service or cloud provider). You must ensure their security is adequate.

A single data breach that exposes customer emails and purchase history, which is then traced back to a failure to use MFA, is a clear-cut violation of your legal duty to safeguard data.

Part 3: The 4-Step Action Plan for Brampton Small Businesses

The federal law may be in limbo, but your responsibility is not. Here is a practical, 4-step plan to protect your business and your customers in 2025.

Step 1: Know Your Data (Data Mapping)

You cannot protect what you do not know you have. Grab a spreadsheet and answer these questions:

• WHAT data do you collect? (e.g., names, emails, addresses, credit card info?)
• WHERE do you store it? (e.g., on a local server, in a file cabinet, in Mailchimp, in your e-commerce platform?)
• WHY do you have it? (e.g., for shipping, for a newsletter, for processing payments?)
• WHO has access to it? (e.g., your sales team, your accountant, a third-party marketing agency?)

Step 2: Create Your Privacy Management Program

This is the single most important lesson from both Law 25 and the failed Bill C-27. You need a formal program.

• Appoint a Privacy Officer: Designate one person (even if it's you) to be responsible. Put their title and contact info in your privacy policy.
• Write a REAL Privacy Policy: Use your data map from Step 1. Hire a lawyer to draft a clear, plain-language policy that explains exactly what you collect, why, and how you protect it.
• Create a Breach Response Plan: What will you do the moment you discover a breach? Who do you call first? How will you investigate? How will you notify customers? Write it down before it happens.

Step 3: Revamp Your "Consent" Process

Stop hiding consent in your fine print. Move to an "active, opt-in" model.

• Bad: A pre-checked box that says, "I agree to receive marketing communications."
• Good: An unchecked box that says, "Yes, I'd like to receive your weekly email newsletter with tips and promotions. You can unsubscribe at any time."
• Better: Separate, granular consent for separate activities (e.g., one box for the newsletter, another for sharing data with partners).

Step 4: Implement "Reasonable" Cybersecurity

Start with the basics. Implement these three things this week:

• Turn on Multi-Factor Authentication (MFA) for your email, banking, and key cloud services.
• Review your backup strategy. Run a test to see if you can actually restore your data.
• Send a test phishing email to your team (using a free online tool) and see who clicks. Use the results as a training moment.

Conclusion: The Future of Privacy is Here, Even if the Law Isn't

Do not let the lack of a new federal law lull you into a false sense of security. The expectations of your customers, the power of provincial regulators, and the risk from cybercriminals have all created a new, higher standard.

By treating customer data with the respect it deserves, you are not just complying with the law — you are building your single greatest asset: trust. A small business in Brampton that can prove it takes privacy seriously will have a powerful competitive advantage over those who are still waiting for a law to force their hand.