Business Transactions in Alberta

1. Business Transactions in Alberta New Mandatory Privacy Provisions in Buy-Sell and other Commercial Agreements Alec Szibbo September 13, 2004

2. Privacy Legislation Landscape • Federal: Personal Information Protection and Electronic Documents Act (“PIPEDA”) Jan1, 2001-2004 • BC, Alberta: Personal Information Protection Act (“PIPA”) Jan 1, 2004 • Quebec: An Act Respecting the Protection of Personal Information in the Private Sector Jan 1,1994

3. Applicable Privacy Laws(Sep 13, 2004) • All of Canada: PIPEDA • Transborder PI transfers for consideration • Federal undertaking • Quebec: Provincial Act (“substantially similar”) • BC, Alberta: PIPA” or PIPEDA??

4. When do Privacy laws apply? • Any Commercial Activity involving “CUD”: • Collection • Use, or • Disclosure • Personal Information – information about identifiable individual (excluding “business contact information”)

5. Personal Information Very Broad Concept • Name, personal address, phone number • Age, weight, height, health • Ethnic origin, citizenship, religion • Occupation, employment history • Income, asset, credit and financial information • Education, educational history • Marital status, family status, sexual orientation • Personal views or opinions

6. Aspects of “Business Transactions” (BT) Now Impacted by Privacy Laws • Primary Subject of the Business Transaction isPersonal Information assets (e.g. customer lists) which are being transferred or disclosed • Incidental collection, use or disclosure of Personal Information during Business Transaction (e.g. due diligence on target company’s employees)

7. Basic Privacy Principle affects a BT NOTICE & CONSENT General Principle: very individual whose PI is the subject of the BT or whose PI is incidentally collected, used or disclosed during a BT: • Must be informed of the transfer /disclosure of such PI, and • Must provide consent for such PI to be transferred /disclosed

8. Privacy Exemptions for a BT • No commercially viable exemptions are available under PIPEDA for PI disclosure a part of BT- s. 7(3) • Contrast BT exemptions: • Alberta (broadest)- s 22 • BC (notice requirement)- s 20

9. The Alberta BT Exemption Broad “Business Transaction” Definition- • Any acquisition or disposal (e.g. purchase, sale, lease, merger, amalgamation) OR any security interest • In respect of any organization (e.g. company, association, trade union, partnership, sole proprietorship) Or organization asset,organization business,organization activity, or part thereof, current or prospective

10. The Alberta BT Exemption • Pre-Closing/Due Diligence BT Exemption • Completion BT Exemption • Post-Completion BT Exemption

11. Pre-Closing/Due Diligence BT Exemption No consent required for PI CUD if: • Parties enter undertaking limiting PI CUD to BT purposes and • PI is necessary to determine whether to do the BT

12. Completion BT Exemption No consent required for PI CUD if: • Parties enter undertaking limiting PI CUD to BT purposes and • PI is necessary to complete the BT

13. Post-Completion BT Exemption No consent required for PI CUD if: • Parties enter undertaking limiting PI CUD to purposes for which it was originally collected and • PI relates solely to business/objects of the BT

14. Common Limitations on BT Exemption • Alberta- BT Exemption not apply if primary purpose of the BT is to purchase, sell, lease transfer, dispose, disclose PI • BC- BT Exemption not apply if BT does not involve substantial assets other than PI • If Bt does not complete- must either destroy or return PI

15. BC Limitation on Post-Completion BT Exemption BT Exemption from the consent requirement applies only if Notice is given: • to all subjects of the PI (employees, customers, directors, officers, shareholders) • that BT has taken place • that their PI has been disclosed

16. Factors to Consider for Privacy Compliance in BT • Location of Parties: BC, Alberta, Que, ROC • Stage: Due Diligence, Completion, Post Completion • Type of PI: Employee vs. Non-employee • Type of BT: Asset vs. Share

17. Thank you Alec R. Szibbo 416.365.3506 (Tor.) 604.643.6362 (Van.) aszibbo@davis.ca