Ontario Appeals Court Strikes Down Surveillance By-law

On July 4, 2007, the Ontario Court of Appeal struck down a municipal by-law passed by the City of Oshawa requiring pawnbrokers to collect, and share with police, detailed identifying information about persons selling second-hand goods. The by-law required that pawnbrokers collect a photograph of the individual and details of three pieces of identification, as well as the time of their visit to the store and the nature of the goods offered for sale. Under section 14 of the Ontario Municipal Act, 2001, a by-law is of no force or effect to the extent it conflicts with a provincial or federal Act. Further, section 28(2) of the Ontario Municipal Freedom of Information and Protection of Privacy Act (MFIPPA) provides that:

"no person shall collect personal information on behalf of a [municipality] unless the collection is expressly authorized by statute, used for the purpose of law enforcement or necessary to the proper administration of a lawfully authorized activity."

Justice Feldman, writing for a unanimous Court of Appeal, addressed each of the three criteria in turn. First, the Court found that it was not the intention of the legislature to allow municipalities, simply by virtue of their power to enact by-laws, to determine the type of personal information that can be collected. Adopting the interpretation of the intervener, the Ontario Privacy Commissioner, the court found that the specific types of personal information collected must be described in a statute or in a regulation that has been authorized by a general reference to the activity in a statute. Second, the Court expressed concern that the "wholesale transmission to the police of a significant amount of personal information about individuals… before there is any basis to suspect that the goods that were sold to the second-hand dealer were stolen… [was] made with no limit as to its use by the police or by those to whom the police may share the information." Consequently, the Court found that although some of the information collected under the by-law may ultimately be used for law enforcement, the primary purpose was consumer protection and was therefore in conflict with the provision of MFIPPA noted above. On the third criterion, the City contended that the by-law did not conflict with MFIPPA because the collection is "necessary to the proper administration of a lawfully-authorized activity", namely the administration of the licensing of second-hand dealers. The Court disagreed and found that where the collection was merely helpful, it is not "necessary" within the meaning of the statute. Last year, the BC Privacy Commissioner expressed concern that municipalities in that province had become prone to overbroad collections of residents' personal information for licensing purposes. This decision represents a persuasive limitation, from one of the country's highest courts, on the ability of municipalities to engage in such surveillance. For the full reasons for judgment in Cash Converters Canada Inc v City of Oshawa and Interveners, 2007 ONCA 502, visit: http://www.ontariocourts.on.ca/decisions/2007/july/2007ONCA0502.pdf Summary by: Jason Young