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First Reference
Volume 3, Issue 5           

  1. Anti-spam Bill returns to House
  2. What is NFC and when is it coming to Canada?
  3. Draft of new national Securities Act introduced
  4. Facebook faces privacy questions...again
  5. Amendments to PIPEDA disappoint privacy watchdogs
  6. Ontario introduces Not-for-Profit Corporations Act
  7. New copyright bill tabled


Anti-spam Bill returns to House

Remember ECPA, the Electronic Commerce and Protection Act? It died an untimely death after second reading in the Senate last December, when the government prorogued. Now it´s back, relatively unchanged, but with a gnarly new name - the Fighting Internet and Wireless Spam Act. It has been re-introduced to the House as Bill C-28, and, given the fact that all parties have already agreed to it, stands a pretty good chance of becoming law.

Click here for the Bill and here for the Industry Canada press release.

The addition of Operations and Marketing PolicyPro to the electronic version of Finance and Accounting PolicyPro (FAPP) gives you access to twelve Sales and Marketing model policies and in-depth Overviews, including OP6.01 - Plans, Research and Strategy, OP6.02 - Advertising and Direct Marketing, OP6.04 - Corporate Image and Communication Standards, OP6.07 - Customer Relationship Management, and OP6.12 - Do Not Call Registry. To try a free 30-day trial of FAPP, click here.

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What is NFC and when is it coming to Canada?

The answer to the first question is easy: NFC is short for Near Field Communication, a simple, very short-range wireless communication technology (similar to RFID), that can be used for a "contactless" payment between an NFC enabled device and an NFC reader at a retail checkout or a public transit turnstile, for example. NFC is a very hot technology right now, and is becoming widely used for low-value payments, such as transit fares, in some parts of the world like Japan and Korea.

The answer to the second question is a bit more complicated. NFC is being used in Canada - the VISA payWave card is an example - and a few companies have run limited trials with NFC smart cards. But everyone is holding their breath for the really big implementation - mobile payments, where NFC-enabled smart phones are transformed into "mobile wallets" and associated apps could compare prices with other vendors, download a warranty or instructional video, connect to a reward program, and integrate the payment record with financial management software, for example.

NFC technology isn´t a hurdle and smart phones are everywhere, so what´s the holdup in North America?

The reasons have to do with banks, merchants, competing technologies and jurisdictions, and payment associations. In its recent strategic plan Vision 2020, for example, the Canadian Payments Association is hedging its bets. Although it says that "emerging payments, such as mobile payments are set to grow and could replace payment cards as the next dominant consumer payment" it also admits that there is no existing CPA framework for mobile payments, and says only that it will "further explore opportunities in this area." This despite the potential efficiencies that the financial services sector would realize if electronic payments become commonplace for small dollar purchases.

A recent study by the Federal Reserve Bank of Boston is the best, most in-depth look at the opportunities and constraints for NFC technology in the U.S. Much of its analysis also applies in Canada. Click here for this very useful document. Want to keep track of this emerging technology? Click here for NFC Forum and here for NFC News sites.

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Draft of new national Securities Act introduced

Earlier this year, we reported that Alberta and Quebec were preparing constitutional "references" to be heard by their respective provincial courts of appeal to defend their rights to maintain their own provincial securities regulators. At the same time, the federal government announced its intention to take its case for a national securities regulator to the Supreme Court.

And this past week, that´s exactly what has transpired. The finance minister released a new federal Securities Act, but announced that it would immediately be presented to the Court with the question: Is the annexed proposed Act within the legislative authority of the Parliament of Canada? However, the minister made it clear that the provinces would have the power to opt in or out of the national scheme, as they wished. Click here for the news release, and here for the draft Act.

Stay tuned.

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Facebook faces privacy questions...again

Over the past couple of years, as reported here, Facebook has had run-ins with the Canadian privacy commissioner. And Canada´s not alone, privacy watchdogs in the U.S. and around the world have been critical of Facebook´s willingness to sacrifice users´ personal data in the name of social media. Click here for an article from the Washington Post.

After the latest criticism, and Facebook´s ill-advised defence of its privacy policies in the U.S. press, there was a well-publicized but unsuccessful movement to mobilize Facebook users to commit social suicide and deactivate their Facebook accounts on May 31st.

But you´re not Facebook, and you´re probably not a player in the world of social media. What´s the lesson for you? Just this: as you develop strategies to make new connections with your customers and your market through your website, email and Internet marketing, blogs and Twitter you must ensure that protection of personal information is built into whatever you do. Take the advice of the Ontario Privacy Commissioner and practice Privacy by Design.

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Amendments to PIPEDA disappoint privacy watchdogs

On May 29th, the federal government introduced Bill C-29, the Safeguarding Canadians´ Personal Information Act, which makes substantial changes to PIPEDA, the Personal Information Protection and Electronic Documents Act. The Bill had been in development for several years, and one of its primary objectives was to address a significant gap in PIPEDA, the issue of mandatory disclosure of "material" breaches of personal information by the companies or organizations responsible.

Although Bill C-29 does address this issue, it´s the way that disclosures are classified as material, and the lack of penalties for non-disclosure that have critics, like Michael Geist and Janet Lo, counsel with the Public Interest Advocacy Centre, unhappy. Under the new legislation, the organizations responsible for the breaches get to decide if they are material and must be reported to the Privacy Commissioner (based on a number of criteria such as the sensitivity of the information, the number of customers affected and an assessment by the company that concludes the cause of the breach indicates a systemic problem).

Companies also have the discretion to decide if they must inform the individuals whose personal information has been breached, based on whether the breach poses a real risk of significant harm (e.g., identity theft, fraud or damage to reputation). And there are no monetary penalties for sweeping significant data breaches under the rug. This is in contrast to laws in several U.S. states that define the responsibility to report breaches with more precision, and either impose hefty fines for breaches or grant the right of those affected to sue the company responsible.

Click here for a link to Bill C-29.

Confidentiality and Privacy policies are featured in all Internal Control Library publications. See policy IT 8.04 in Information Technology PolicyPro, policy NP 1.08 in Not-for-Profit PolicyPro, and policy GV 1.11 in Finance and Accounting PolicyPro.

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Ontario introduces Not-for-Profit Corporations Act

In late May, Bill 65, Ontario´s Not-for-profit Corporations Act received second reading in the provincial legislature. This is the culmination of several years of consultation with the sector, as discussed in an article in Inside Internal Control from the summer of 2008.

Given that it´s been in the works for so long, there are few surprises in the Bill. Like the new federal Not-for-Profit Corporations Act, it disentangles the rules for not-for-profits from for-profit corporations, and streamlines the incorporation process. It also enhances corporate governance and accountability by providing a statutory duty of care for directors and allows not-for-profits to engage in commercial activities where the revenues are reinvested in the corporation´s not-for-profit purposes.

For a summary of the Bill from Jane Burke-Robertson and Terrance S. Carter of Carters Professional Corporation, a full-service law firm with a focus on charities and not-for-profit organizations, click here. For the news release containing highlights of the legislation, click here.

As Bill 65 moves through the legislation process, you can count on the quarterly update releases of Not-for-Profit PolicyPro (NPPP) to keep you on top of the latest changes. For more information on NPPP, click here.

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New copyright bill tabled

In more late-breaking legislative news, the new federal Copyright Modernization Act, Bill C-32, was tabled on June 2.

For those of you haven´t been following the contentious reform of the existing and antiquated Copyright Act, this is the feds third crack at it. The Liberals tabled Bill C-60 in 2005, which was criticized for favouring the interests of copyright holders over consumers and died when Parliament was dissolved that year. The Conservatives tried again with Bill C-61 in 2008. It faced the same complaints, and disappeared when the government prorogued.

Both these Bills were slammed for catering to the entertainment industry, which lobbied hard for digital locks on devices and content. During extensive consultations leading to the new Bill, most Canadians made it clear that they objected to the locks.

Despite this, digital locks are enshrined in the new legislation, along with prohibitions against breaking or circumventing them on a device, disc or file. This means it would be illegal to copy a CD or digital song sold with copy protection on it, for example.

However, the Bill does allow some "fair dealing" latitude, including legalization of format shifting (e.g., copying content from one device to another, such as a CD to a computer or an iPod), time shifting (recording television programs for later viewing but not for the purposes of building up a library) and making back-up copies of content to protect against data loss.

But these fair dealing exceptions beg the question: Are they meaningless if the content has a digital lock in place? This appears to be the case, and will be the centre of controversy as the Bill moves forward into committee.

For Michael Geist´s commentary on the Bill, check out his blog here, and here for his new Speak Out on Copyright blog. For Bill C-32, click here.

In Vol. II - Governance, Finance and Accounting PolicyPro (FAPP), includes policy 4.04 - Copyrights and Trademarks in the Legal and Regulatory chapter. For more information on FAPP, click here.

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About Inside Internal Control

Editor: Colin Braithwaite, Managing Editor, Internal Control Library.

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