As previously reported, the Alberta Court of Kings Bench just released an important decision in Clearview AI Inc v Alberta (Information and Privacy Commissioner), 2025 ABKB 287. My prior blog post focused on the court’s decision holding that portions of Alberta’s privacy law, PIPA, violated the Charter’s freedom of expression protections. In this post I focus on the part of the decision in which the court found that Clearview AI was subject to PIPA. In particular, I discuss the statement by the court that PIPA applies even to the collection, use and disclosure of personal information about an Alberta resident that takes place wholly outside of Canada. This statement raises important questions about the prescriptive jurisdictional reach of a provincial law to matters unconnected to the province and the correctness of that finding by the court.
Summary of the Clearview court’s decision on jurisdiction
One of the central questions in this case was whether PIPA applied to Clearview. Clearview argued that that there was no evidence that the websites scraped by Clearview were in Alberta or that any of Clearview’s servers were in Alberta. A difficulty in the case was that the evidential record concerning the location of servers where Clearview scraped the information from was thin. Clearview described its activities as collecting “images and URLs from the open web and public portions of major social media platforms”. As there was no evidence of the location of Cleaview’s servers, the court inferred “that Clearview collected and continues to collect images of Albertans from servers located in Alberta and elsewhere in Canada”.
The court, referring to the report of the privacy commissioners that had investigated Clearview (the “Joint Report”), also found as a fact that Clearview marketed its services to Canadian organizations and provided its services to Canadian organizations on a trial basis.
After referring to these connecting factors between the conduct of Clearview and Alberta, the court concluded that Clearview carried on business in Alberta and thus Clearview was subject to Alberta’s privacy regime. According to the court:
…conducting business in a province by offering a product or service to its residents constitutes a “sufficient connection” to justify regulation of the person or entity offering the product or service. The evidence cited in the Joint Report shows that Clearview marketed its services to Alberta organizations and Alberta organizations used its services on a trial basis. This, in my view, constitutes carrying on business in the Province which, in turn, means that there is a sufficient relationship between Alberta and Clearview to justify Clearview being subject to Alberta’s privacy regulatory regime.
The court went further, however, and suggested that because PIPA applied to Clearivew, its scope extended even to actions of Clearview that took place entirely outside of Alberta. Specifically, because Clearview chose to do business in Alberta, PIPA could be applied even to acts of collection, use, and disclosure of personal information of Albertans that had no connection to Alberta. According to the court:
Clearview’s focus on where personal information is collected from is misplaced. PIPA regulates organizations and the salient question is whether the organization is subject to the jurisdiction of Alberta. The Commissioner has jurisdiction over Clearview because Clearview chose to do business in Alberta and collects, uses, and discloses personal information of Albertans, some of which is hosted on websites with servers in Alberta. Where the Commissioner has jurisdiction over an organization under PIPA, she may make orders with respect to how that organization deals with personal information even if the organization is also collecting, using, and disclosing personal information of Albertans outside Alberta. I take Clearview’s point that there may be a jurisdictional issue if the Commissioner purported to regulate how Clearview handles the personal information of individuals from another jurisdiction, but that question is not before me as the Order only pertains to the personal information of individuals in Alberta. (emphasis added).
The court referred to various authorities in its analysis of the territoriality issue. However, none of them support the courts’ view about the global reach of PIPA. These authorities are canvassed below.
Commentary on the Clearview court decision
The court referred to the findings of the Joint Report which addressed the jurisdiction of the Commissioners over Clearview. The Joint Report did not go as far as the court concluding that PIPA applied to Clearview when it collected personal information of individuals located in Alberta.
Clearview is a commercial enterprise that collected, used, and disclosed personal information of individuals within Quebec, Alberta and British Columbia with the intention of selling a product to law enforcement agencies within the provinces. The fact that a company is located outside of Quebec, Alberta and British Columbia, does not mean it can evade obligations under Quebec’s Private Sector Act, PIPA AB and PIPA BC. Indeed, whenever a company collects the personal information of individuals located within a province, regardless of where the company is located, the Provincial Acts apply. [emphasis added by the court]
Further, the Joint Report recommendations also reflected that the Canadian privacy laws in issue in the case did not extend to the collection of personal information of Canadians outside of Canada:
For all the reasons above, and despite Clearview’s position to the contrary, we find the matter to be well-founded and we recommend that Clearview:
- cease offering the facial recognition services that have been the subject of this investigation to clients in Canada;
- cease the collection, use and disclosure of images and biometric facial arrays collected from individuals in Canada; and
- delete images and biometric facial arrays collected from individuals in Canada in its possession.
The court also referred to six authorities, Clearview AI Inc. v Information and Privacy Commissioner for British Columbia, 2024 BCSC 2311 [Clearview BC]; Unifund Assurance Co v Insurance Corp of British Columbia, 2003 SCC 40 at para 55 [“Unifund”]; Sharp v. Autorité des marchés financiers, 2023 SCC 29 [“Sharp”] at para 3; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45 at para 60 [“SOCAN”]; Esquustek Solutions Inc v Google Inc, 2015 BCCA 265 [“Equustek”] at paras 54-55; and A.T. v Globe24h.com, 2017 FC 114 [“Globe24th”]
The Cleraview BC case found that PIPA applied to Clearview but limited the jurisdictional reach to personal information of persons in British Columbia, by affirming the decision in the Joint Report.
[107] I find also that there is nothing unfair about having PIPA apply to Clearview. Clearview chose to enter British Columbia and market its product to local law enforcement agencies. It also chooses to scrape data from the Internet which involves personal information of people in British Columbia. [108] In my view, there is a significant public interest in addressing the transnational privacy issues raised by the facial recognition software services provided by Clearview. Those services rely in part on personal information collected from people in British Columbia. [109] In summary, the Commissioner was correct in finding that PIPA applies to Clearview and that he has the jurisdiction to pronounce orders to regulate Clearview’s conduct as it relates to personal information of persons in British Columbia.
Unifund and Sharpe both examined the constitutional jurisdiction of a province to regulate activities taking place in other provinces. But nothing in these cases support the court’s reasons for concluding that PIPA applied to Clearview’s wholly extra-territorial activities.
In Unifund, the court was asked to apply the “real and substantial connection test” in the context of the applicability of a provincial regulatory scheme to an out-of-province defendant. The principal issue was the constitutional applicability of the Ontario Insurance Act to activities that took place in British Columbia. The court held that the Ontario law did not apply and “was constitutionally inapplicable to the appellant because its application in the circumstances of this case would not respect territorial limits on provincial jurisdiction”.
In Unifund, the Supreme Court started its analysis by observing that, unless a law expressly states the contrary, it is presumed that the law does not extend to activities taking place wholly within another state.
59 In Tolofson, La Forest J. observed: “It seems to me self evident, for example, that State A has no business in defining the legal rights and liabilities of citizens of State B in respect of acts in their own country . . . it would lead to unfair and unjust results if it did. The same considerations apply as between the Canadian provinces” (p. 1052).
60 Territorial limits is an ancient doctrine developed in the context not of provinces but of sovereign states, as discussed by Lord Russell of Killowen C.J. in R. v. Jameson, [1896] 2 Q.B. 425, at p. 430:
One other general canon of construction is this __ that if any construction otherwise be possible, an Act will not be construed as applying to foreigners in respect to acts done by them outside the dominions of the sovereign power enacting. That is a rule based on international law by which one sovereign power is bound to respect the subjects and the rights of all other sovereign powers outside its own territory.
61 A similar concern for state comity, or reciprocal respect, was internalized within the federal structure of the United States as early as Pennoyer v. Neff, 95 U.S. 714 (1877), at p. 722:
. . . no State can exercise direct jurisdiction and authority over persons or property without its territory. . . . The several States are of equal dignity and authority, and the independence of one implies the exclusion of power from all others
The Supreme Court summarized its conclusions in Unifund affirming that even under the application of the real and substantial connection test within our federal system, a provincial law is assumed not to apply to actions wholly outside the province:
This territorial restriction is fundamental to our system of federalism in which each province is obliged to respect the sovereignty of the other provinces within their respective legislative spheres, and expects the same respect in return. Under ordinary constitutional principles the Ontario Insurance Act is inapplicable to the out‑of‑province appellant in this case. Not only is the appellant not authorized to sell insurance in Ontario, it does not in fact do so. Its insured vehicles in this case did not venture into Ontario. The accident did not take place in Ontario, and the appellant did not benefit from the deduction of the SABs by virtue of Ontario law but by the law of British Columbia. If the respondent were correct, Ontario could attach whatever benefits it liked to an out-of-province accident and require the appellant to come to Ontario to reimburse the Ontario insurer irrespective of whether or not British Columbia law permitted any deduction in that respect from the judgment award.
The Supreme Court in Unifund also noted that even if a court has adjudicative jurisdiction over a dispute, that “may nevertheless not be sufficient for the law of that province to regulate the outcome”.
In Sharpe, the Supreme Court found that Quebec’s securities legislation applied to out-of-province defendants based on allegations that the appellants used Quebec as the “face” of their securities manipulation and injured Quebec investors. The appellants had engaged “in a transnational “pump-and-dump” securities manipulation scheme with links to Quebec. The court did acknowledge that such regulation could be applied to activities of the business that indirectly support the activities that are sufficiently connected to a province but did not suggest that operations outside the province that are unconnected to the province fall within provincial prescriptive reach.
The appellant Sharp argues that the FMAT and courts below failed to analyze the AMF’s specific allegations against him, which relate only to the purchase and sale of securities outside of Quebec. We do not accept this submission. The AMF alleges that he participated in one or more stages of the appellants’ securities manipulation scheme, that he was closely implicated by buying or selling securities, and that the scheme had important links to Quebec. Under Unifund, that connection suffices to apply Quebec’s securities regulatory scheme to him.
In SOCAN the Supreme court canvassed the framework to be applied to determine the scope of Canada’s laws to foreign defendants. It did so by examining when the communication to the public right set out in the Copyright Act could apply to out of country defendants in the Internet context.
The Court, started its analysis by emphasizing, as did the court in Unifund, that Parliament is presumed not to intend that its laws will apply extra-territorially.
54 While the Parliament of Canada, unlike the legislatures of the Provinces, has the legislative competence to enact laws having extraterritorial effect, it is presumed not to intend to do so, in the absence of clear words or necessary implication to the contrary. This is because “[i]n our modern world of easy travel and with the emergence of a global economic order, chaotic situations would often result if the principle of territorial jurisdiction were not, at least generally, respected”; see Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, at p. 1051, per La Forest J.
55 While the notion of comity among independent nation States lacks the constitutional status it enjoys among the provinces of the Canadian federation (Morguard Investments Ltd. v. De Savoye, 1990 CanLII 29 (SCC), [1990] 3 S.C.R. 1077, at p. 1098), and does not operate as a limitation on Parliament’s legislative competence, the courts nevertheless presume, in the absence of clear words to the contrary, that Parliament did not intend its legislation to receive extraterritorial application.
The Supreme Court in SOCAN premised its decision, in part, on the then leading Libman case which established that the Criminal Code could apply to activities that occur partly in Canada and partly outside of Canada where there is a “real and substantial link” between an offence and this country
58 Helpful guidance on the jurisdictional point is offered by La Forest J. in Libman v. The Queen, 1985 CanLII 51 (SCC), [1985] 2 S.C.R. 178. That case involved a fraudulent stock scheme. U.S. purchasers were solicited by telephone from Toronto, and their investment monies (which the Toronto accused caused to be routed through Central America) wound up in Canada. The accused contended that the crime, if any, had occurred in the United States, but La Forest J. took the view that “[t]his kind of thinking has, perhaps not altogether fairly, given rise to the reproach that a lawyer is a person who can look at a thing connected with another as not being so connected. For everyone knows that the transaction in the present case is both here and there” (p. 208 (emphasis added)). Speaking for the Court, he stated the relevant territorial principle as follows (at pp. 212-13):
I might summarize my approach to the limits of territoriality in this way. As I see it, all that is necessary to make an offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. As it is put by modern academics, it is sufficient that there be a “real and substantial link” between an offence and this country . . . .(emphasis added)
Applying the real and substantial connection test, the Supreme concluded “In terms of the Internet, relevant connecting factors would include the situs of the content provider, the host server, the intermediaries and the end user. The weight to be given to any particular factor will vary with the circumstances and the nature of the dispute.”
In Equustek, the B.C. Court of Appeal found it had adjudicative jurisdiction over Google including based on “the gathering of information through web crawler software (“Googlebot”) had taken place in British Columbia. However, as noted in the Clearview BC case (at para 87), the Equustek case was concerned with adjudicative and not prescriptive jurisdiction and the real and substantial connection test is applied differently in these contexts. Nevertheless, the factor that the BCCA found to be relevant was Google’s activity in B.C. not its activities that took place entirely outside of BC.
The Globe24th case involved whether the federal privacy law PIPEDA applied to a Romanian company that scraped source material from Canadian websites and targeted its website to Canadians. As summarized by the Clearview court, PIPEDA applied because of the strong connections to activities that took place in Canada.
[58] The Commissioner relies on A.T. v Globe24h.com, 2017 FC 114 where the federal privacy commissioner sought to enforce the Personal Information Protection and Electronic Documents Act, SC 2000, c 5 (“PIPEDA”) against a company based in Romania. The Romanian company bulk downloaded administrative and judicial decisions from Canadian websites for the purpose of republishing the decisions. The Court in AT at para 53, following SOCAN at para 61, set out “connecting factors” to consider when assessing if a website has a sufficient connection to a Canadian jurisdiction: (1) the location of the target audience of the website; (2) the source of the content on the website; (3) the location of the website operator; and (4) the location of the host server. The key facts that caused the Court to conclude that Canada had jurisdiction in Globe24h.com were that the source material was taken from Canadian websites and the target market was Canadians. These facts outweighed the facts that the website was hosted in Romania and the entity operating the website was Romanian.
Conclusion
The territorial scope of Canadian provincial and federal laws is a matter of both domestic and foreign concern. The Supreme Court applies the real and substantial connection test to balance the legitimate interests that Canadians have in being able to regulate actions taken abroad that also have significant connections to Canada with the international norms recognized by comity. Arguably the Clearview court took too much of an expanded view of PIPA’s prescriptive jurisdiction by pronouncing that
Where the Commissioner has jurisdiction over an organization under PIPA, she may make orders with respect to how that organization deals with personal information even if the organization is also collecting, using, and disclosing personal information of Albertans outside Alberta.
