---

INTRODUCTION

In the past decades, all Canadians have experienced significant changes in their everyday lives. The unprecedented pace of technological change has had an inescapable impact on communication, business and commerce, education, science, travel and entertainment. Responding to these changes presents great challenges for Canadians, for their elected representatives and for their governments; we are all constantly required to rethink accepted ways of "doing business." As commerce and data management, in both the public and private sectors, moves from paper to cyberspace, Canadians need to feel secure about their personal information and they need reassurance that their privacy is not being sacrificed to efficiency. In many ways, the Social Insurance Number system is a prime example of a government operation that must meet the needs of the 21st century.

Most residents of Canada - even an increasing number of children - carry a small white card in their wallets that bears a nine digit number and no picture. The card - a Social Insurance Number (SIN) card - was issued to them when they first began to work or applied for a government program.

Since then - in some cases over three decades ago - most people have not had occasion to think about their SIN number very often. They enter it on applications, write it in the appropriate space on their income tax forms, and give it to financial institutions when they apply for an account, a loan or a credit card. Perhaps they have been asked for it - and used it - as personal identification when they want to pay by cheque, for example, at their local grocery store or as a guarantee when they rent a movie. The number and the card are both seemingly innocuous; they cannot be used to purchase anything; nor to guarantee admission into any attraction; nor to retrieve money from the bank; nor to qualify for a government program.

Recently, it has become clear that the use of the Social Insurance Number and card, which has not been modernized since its inception in 1964, is causing unintended negative consequences that are felt by thousands - and potentially millions - of residents of Canada. In the past few months, several reports have identified serious problems and sounded the alarm about the evolution and use of the Social Insurance Number and card system. The scope and nature of many of these problems surfaced with the release, in September 1998, of Chapter 16 of the Report of the Auditor General of Canada - Management of the Social Insurance Number.1 Given the wide-ranging implications of his findings, the Auditor General called for parliamentary action to review the administration and broader policy-issues associated with the Social Insurance Card and Number.

In addition to administrative problems with the SIN system, experts have unanimously pointed to the threat posed by the expanded use of the SIN card in the private sector and the extent to which the number has strayed beyond its intended purpose as a file number for government programs. This, coupled with rapid technological developments, has raised alarm about the possibility of unauthorized and intrusive data-matching across government departments, within the private sector and possibly even between the public and private sectors. Many of these data matches take place without the card holders' knowledge or informed consent. In combination, these circumstances underscore the importance of placing privacy and the protection of personal information at the centre of all debates about the current operation of the SIN system and its future.

---

1 Hereafter referred to as the Auditor General's Report or Chapter 16.