Canada’s Privacy Landscape in 2026: A Gap in Strategy between the "Aspiration of Policy" and the "Reality of Business"

Year-End Evaluation for Business Owners

By Derek Lackey, Managing Director, Newport Thomson

Introduction

The state of privacy law in Canada in 2026 is like a crucial infrastructure project always “under construction.” Although the promise of complete reform is always in the public forums, large business has a complex system of regulation, with the federal statute of 2000 pitted against provincial vigilance and global demands, and a growing geopolitical imperative on data sovereignty issues.

“This evaluation looks at two different realities: the regulatory environment that Canada could realize by the end of 2026, and the environment in which your operations actually exist.”

SCENARIO ONE: Policy Ideal

If Canadian lawmakers met their intended goals, then a privacy landscape for 2026 might contain:

Enforceable Federal Legislation

The Consumer Privacy Protection Act (CPPA) will trump a privacy act that has been on the books for 24 years, namely:

Penalties with consequence: Fines of up to $25 million or 5% of the company’s worldwide gross revenues, whichever encourages full compliance.

A functional judiciary: True decision-making power, rather than the current reliance of the Privacy Commissioner upon persuasion, publicity, or the courts.

Requirements of algorithmic transparency:

– Explanations of the operation of consequential automated decision systems for individuals.

– The provision of choices for every individual.

Strengthened individual rights: Rights to access, amend, and delete information must respect international standards. Transparency and choice are fundamental tenets.

Practical Impact: There would be a real enforcement risk for businesses.

The current calculation, where privacy violations carry primarily reputational cost, would shift dramatically toward financial exposure.

Data Portability Rights

Canadians could gain legal entitlements for the transmission of personal information in machine-readable form among service providers:

The data of the financial services flows freely among the financial institutions
Medical records are made highly portable, but remain secured
Customer profiles and preference data transfer between competitors
Making it easier for different systems to work together

Business Impact: Methods of customer retention based on data lock-in are no longer applicable. The value of competitive superiority changes from data ownership to use and service.

Relevant Digital Sovereignty

Canada would claim domain over the data infrastructure via:

Risk-Based Cross-Border Data Transfer Assessments
More stringent government data residency rules
Preferences in Canadian procurement of infrastructure
Industry-specific data localization of essential services

Business Impact: Cloud architectural choices assume more importance. Cloud vendor choices involve assessment of risk based on jurisdiction too. American tech vendors see new barriers in the Canadian marketplace.

Comprehensive AI Governance

Clear statutory obligations would govern artificial intelligence deployment:

Mandatory impact assessments for high-risk AI systems
Bias testing and mitigation requirements
Human oversight of automated decision-making
Transparency and choices offered in AI-driven processes

Business Impact: AI implementation becomes a compliance-gated initiative requiring formal governance, documentation, and risk management, not merely a technical deployment.