Balancing personalization and privacy: A Canadian perspective

Image generated by OpenAI’s DALL-E via ChatGPT

Eighty per cent of consumers expect personalization online, but two-thirds report having such poor experiences that they’ve disengaged from brands altogether.

The motivation to get it right is abundantly clear, but the disconnect highlights a growing challenge for businesses: how do you deliver the tailored experiences customers crave without crossing the line into invasive or unethical data practices?

Finding this balance has never been more urgent for organizations all over the world, including Canada. The tightening of privacy laws, coupled with rising consumer expectations, means that companies must approach personalization with care and transparency. The stakes are high — getting it wrong risks not only alienating customers, but also triggering costly compliance penalties — but so are the rewards for those who can get it right.

Privacy regulations reshaping the Canadian landscape

Canada’s approach to privacy is evolving in response to growing concerns over how personal data is collected and used. 

An Interac survey from January 2024 found that:

• 77% of Canadians said their personal data is more exposed than ever.
• 72% are concerned companies are able to see too much of their data.

The Consumer Privacy Protection Act (CPPA) was initially introduced as a much-needed and more stringent replacement for the Personal Information Protection and Electronic Documents Act (PIPEDA), which was signed into law way back in 2000. 

Bill C-27, the Digital Charter Implementation Act (introduced in 2022) would’ve enacted the switch, and brought in two other acts as part of the bill: the Personal Information and Data Protection Tribunal Act, and the Artificial Intelligence and Data Act. These changes were intended to align Canada’s privacy standards with those of jurisdictions like the European Union, which has set the benchmark with its General Data Protection Regulation (GDPR).

Prime Minister Justin Trudeau’s resignation and subsequent prorogation of parliament on Jan. 6 effectively killed Bill C-27, in addition to all bills that had not yet received Royal Assent, making the future of any updates or changes to Canadian data privacy up in the air.

Globally, regulations like the proposed EU AI Act and the California Privacy Rights Act (CPRA) add further compliance layers for businesses that operate internationally. 

Why personalization still matters

Consumers expect personalization, but their trust hinges on how businesses handle their data. 

According to the Canadian Marketing Association, companies that excel at personalization can generate up to 40% more revenue than those that do not. At the same time, three-quarters of Canadians feel more comfortable sharing personal data when businesses are transparent about how it’s used.

Missteps such as irrelevant recommendations or intrusive ads can quickly erode trust. Conversely, brands that prioritize transparency and give customers control over their data — for example, through clear privacy settings or opt-in mechanisms — can foster deeper loyalty and engagement.

Personalization, when done ethically, offers a win-win scenario. Not only does it enhance the customer experience, but it also drives tangible business outcomes.

Why ethical AI is crucial for personalization

AI has become a cornerstone of modern personalization strategies, allowing businesses to deliver tailored experiences at scale. However, its use comes with significant risks, including bias, overreach, and potential misuse of consumer data. Ethical AI practices are essential for addressing these concerns and ensuring that AI is deployed responsibly.

The AI Act, proposed by the European Union, emphasizes the need for transparency, accountability, and fairness in AI systems. These principles are critical for ensuring that AI-driven personalization respects consumer rights. Canadian businesses can look to frameworks like Microsoft’s Responsible AI principles for guidance on implementing ethical AI, but the focus must remain on how these tools align with consumer expectations.

Ultimately, businesses must treat ethical AI as a non-negotiable element of their personalization strategies. This includes regular audits, clear disclosure of how AI systems function, and safeguards to prevent misuse.

Striking the right balance

With stricter regulations on the horizon and growing consumer awareness, organizations must adopt strategies that prioritize trust, transparency, and ethical innovation.

The path forward requires more than compliance with laws, though. Businesses must actively engage with consumers, address their concerns, and make privacy a core part of their value proposition.

In an era where trust is a key differentiator, those who succeed in balancing these priorities will not only comply with regulations, but also build lasting loyalty and competitive advantage.