Consumer Privacy Protection Act: What Canada’s Privacy Overhaul Means For the Auto Industry

Cars used to just get us from point A to point B. Today, they function more like high-tech hubs that track GPS locations, store phone contacts, and gather details about our driving habits. This shift hasn’t escaped the attention of lawmakers and regulators. In Canada, conversations about data privacy have become louder and more urgent, especially with the Consumer Privacy Protection Act (CPPA) on the way.

Even though the CPPA is designed to handle personal data in general, it still lays down important rules for handling personal information. In other words, if you’re in the automotive business, you’ll want to pay close attention. Understanding how this new legislation applies to the data you collect and protect is critical for maintaining trust with customers and staying on the right side of the law.

The CPPA at a glance

Think of the Consumer Privacy Protection Act as the next chapter in Canada’s privacy story. Currently, the Personal Information Protection and Electronic Documents Act (PIPEDA) guides how companies handle personal data. But as online services grow more complex, the government wants to give Canadians stronger rights and clearer protections.

CPPA aims to refine or replace key parts of PIPEDA, focusing on three main things: giving people more control over their data, making sure businesses are upfront about what they do with it, and creating tougher consequences for those who violate the rules.

Key provisions

• Consent

Under the CPPA, organizations must get informed, meaningful permission before collecting or using someone’s personal data.

• Data portability and erasure

The CPPA allows individuals to direct the secure transfer of their data, which simplifies switching providers. Plus, you can request that a company delete your information if it’s no longer needed or you no longer agree to its use.

• Algorithmic transparency

Companies using AI and machine learning must be prepared to explain how they arrive at certain conclusions if they rely on personal information. No more mystery algorithms making big calls without any explanation.

• Penalties and enforcement

In the past, fines for privacy violations could be sizable, but the CPPA raises the stakes. Businesses that break the rules could face penalties of up to 5% of their global revenue or CAD 25 million, whichever is greater.

CPPA implications for the automotive sector

Modern vehicles collect a surprising amount of personal information, from real-time locations to driver preferences. Although the CPPA doesn’t single out car manufacturers or dealers, it covers any organization that handles personal data. That puts the automotive industry on notice for meeting these new standards, and here’s what that might look like:

1. Consent and transparency

• Drivers should know exactly what data their vehicle is collecting, how it’s being used, and who sees it. Clearer privacy notices are needed to avoid complex legal language whenever possible.
• While the CPPA emphasizes explicit consent, it doesn’t require opt-in or opt-out choices for every single scenario. Still, offering these options shows respect for drivers’ control over their own data and helps build trust.

2. Data minimization and retention

• If certain information isn’t essential for safety alerts, maintenance reminders, or other valid functions, OEMs shouldn’t gather it.
• Rather than holding onto everything, develop guidelines that clearly define how long data is stored and destroy it once it’s no longer needed.

3. Data security measures

• Connected cars face cyber threats just like computers and smartphones. Strong safeguards (encryption, firewalls, regular audits) help prevent breaches.
• Be prepared to show regulators you have solid security strategies in place, such as incident response plans and routine vulnerability checks.

4. Rights to erasure and portability

• When a driver requests that you remove their personal data, it shouldn’t be a struggle. Have a clear process for swift and permanent deletion.
• Whether it’s transferring service history to another dealership or updating digital profiles, make sure customers can take their data elsewhere with minimal friction.

5. Enforcement and fines

• The CPPA ties potential fines to a company’s global revenue, which means large automotive players could face steep financial hits if they fall short.
• Privacy regulators will have more power to investigate, so expect them to keep a closer eye on your data practices.

6 practical steps to keep automotive data privacy on track

The future of vehicle information exchange

The Consumer Privacy Protection Act already affects modern vehicles, which capture everything from location data to driver habits and phone contacts.

However, because the CPPA is designed for all businesses, many people anticipate future rules specifically tailored to connected cars. Such regulations would go beyond the CPPA’s general standards, addressing the unique ways automotive data flows through telematics, in-car apps, and onboard sensors.

On the international front, the EU Data Act sets out rules for cross-border data handling, which matters if your cars or data move beyond Canada’s borders. The US Right to Repair Act also gives drivers and independent repair shops greater access to diagnostic information, raising new questions about how personal data is managed.

With these overlapping developments, it’s wise for automotive companies to adopt a comprehensive approach to privacy and data sharing. One that covers both home-grown regulations and global shifts.

Need help adapting to new rules?

As an OEM, you need to balance international obligations, regional privacy laws, and the technical demands of connected vehicles.

We’re here to assist. Our team not only provides IT consulting but also develops custom software solutions to help you meet complex regulatory requirements.

Get in touch today to find out how we can support your transition to a more secure and compliant future.