What are the factors to determine if a person is carrying on an enterprise?
What are some examples?
In this article, we will break down the notion of enterprise as defined under the Quebec Privacy Act.
Are you ready?
Let’s get started!
Application of the Quebec privacy law to a person carrying an “enterprise”
The Quebec data privacy law applies to persons and companies operating in Quebec collecting personal information in the private sector.
Article 1 of the Quebec Privacy Act provides for its application:
“The object of this Act is to establish, for the exercise of the rights conferred by articles 35 to 40 of the Civil Code concerning the protection of personal information, particular rules with respect to personal information relating to other persons which a person collects, holds, uses or communicates to third persons in the course of carrying on an enterprise within the meaning of article 1525 of the Civil Code.”
The Quebec privacy act applies when a person collects, holds, uses or communicates to third persons in the course of “carrying an enterprise” within the meaning of Article 1525 of the Civil Code.
What does it mean to carry on an “enterprise” within the meaning of Quebec’s Civil Code.
Definition of “enterprise” under the Civil Code
The Quebec privacy act specifically refers to the notion of an enterprise under the Civil Code of Quebec as it is defined in Article 1525.
Article 1525 Civil Code on “enterprise”
Article 1525 CCQ states:
“The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise.”
The notion of enterprise appears to be broad and has been subject to interpretation over the years.
However, the Quebec courts have interpreted the notion of an enterprise under Article 1525 by introducing five cumulative factors allowing the identification of an enterprise:
“a) A plan specifying the enterprise’s economic objectives, according to which the activity is organized. It need not be complex or in writing.
b) Assets related to the pursuit of the objectives, which can vary from a large company’s machinery or buildings to a single craftsman’s modest toolbox.
c) A series of habitual juridical acts involving the entrepreneur, carried out in pursuit of the objectives.
d) Other economic players or stakeholders receptive to the goods and services offered by the enterprise, generally defined as customers, goodwill, or the market.
e) Economic value or profit directly attributable to the efforts of the entrepreneur.”
The Quebec Privacy Commissioner (Commission d’accès à l’information or CAI) has used these five factors to define the notion of “enterprise” as it applies to the Quebec privacy act in the private sector.
In essence, we can summarize these factors as follows:
- A person must operate an economic activity in a repetitive way
- A person coordinates human and material resources to achieve an objective
- The object is to satisfy a need of some kind
- The success of the operation will depend on market forces and the effort exerted by the person
Other articles of the Civil Code
Although the concept of enterprise appears in other articles in the Civil Code of Quebec, the Quebec courts have ruled that the only definition of the notion of an enterprise for the purposes of the Quebec privacy act must be that of Article 1525.
All other possible interpretations of the notion of an enterprise possible using other articles of the Civil Code are specifically excluded.
Main economic activity
To determine whether or not a person is carrying on an enterprise, the Quebec courts have determined that the organization’s main activity should be considered.
Ancillary activities supporting the main objective should not lead to the qualification of a person as an enterprise or not.
An organization can have a main objective or purpose and to achieve that purpose it must act in a variety of ways.
If the main purpose is not that of an enterprise, then the ancillary efforts, although they may appear to qualify an activity performed by an enterprise should not result in the qualification of the main economic activity.
For example, in the case Bonneville vs. Congrégation des Témoins de Jéhovah Valleyfield-Bellerive and Procureur général du Québec,  CAI 280, the Quebec privacy commissioner determined that a religious organization is not considered an enterprise.
The main objective of a religious organization is the pursuit and not an economic one.
As such, it cannot qualify as an enterprise under the Quebec privacy act and should not be subject to the private sector privacy act.
As a result, even though a religious organization may perform ancillary organized economic activities, those activities should not lead to the qualification of the religious organization as an enterprise.
Examples of what is an enterprise
Here is a few examples of what constitutes an enterprise according to the Quebec privacy commissioner:
- A private clinic such as a psychiatrist
- Any professional, subject to the Profesional Code, engaging in an organized economic activity
- Labour unions
- A single person with a toolbox
Examples of what is not an enterprise
Here is a few examples of what does not constitute an enterprise according to the Quebec courts:
- Jehovah Witnesses as they pursue a spiritual objective and not an economic one
- Religions, like Roman Catholicism, are not subject to the Quebec privacy act
- Information obtained in the context of litigation is not obtained in carrying on an enterprise
- An activity purely personal in nature