A Canadian Non-Disclosure Agreement (NDA) is a legally binding contract that protects confidential business information from unauthorized disclosure. In a standard (one-way) NDA, one party — the disclosing party — shares sensitive information with another party — the receiving party — who agrees to keep that information confidential and use it only for the specified purpose.

Canada does not have a standalone federal trade secret statute comparable to the US Defend Trade Secrets Act (DTSA). Protection of confidential information in Canada relies primarily on the common law tort of breach of confidence and contractual obligations established through NDAs. The Supreme Court of Canada in Lac Minerals Ltd. v. International Corona Resources Ltd. (1989) established the three-part test: the information must have the quality of confidence, it must have been communicated in circumstances importing an obligation of confidence, and there must be unauthorized use to the detriment of the party communicating it.

A key distinction in Canadian NDAs is the interaction with PIPEDA (Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5), which governs how private-sector organizations collect, use, and disclose personal information in the course of commercial activities. If confidential information includes personal data — customer records, employee files, health information — the NDA must incorporate PIPEDA's fair information principles, including purpose limitation, consent, and data security requirements. Provinces with substantially similar legislation (Alberta's PIPA, BC's PIPA, Quebec's private sector privacy law) impose comparable obligations.

Canadian NDAs reference provincial governing law rather than state law, use Canadian entity types (corporation, partnership, sole proprietorship — there are no LLCs in Canada), and accommodate the civil law system in Quebec, where confidentiality obligations may be governed by the Code civil du Quebec rather than common law.

When sharing proprietary business information — trade secrets, formulas, algorithms, customer lists, or strategic plans — with a potential business partner, investor, or vendor during preliminary discussions or due diligence.

When engaging a consultant, freelancer, or contractor who will have access to confidential business operations, financial data, or unreleased products as part of their engagement.

When presenting a business idea, invention, or creative concept to potential investors, licensees, or development partners, and the disclosing party needs protection against the recipient independently pursuing or disclosing the concept.

When a company is being evaluated for acquisition and the seller must share detailed financial records, contracts, liabilities, and employee information with the prospective buyer during due diligence.

When providing access to proprietary software, source code, technical documentation, or research data to a third party for evaluation, integration testing, or compatibility assessment.

Operating without an NDA means relying solely on the common law duty of confidence, which requires proving all three elements of the Lac Minerals test — a significantly higher burden than enforcing a clear contractual prohibition against disclosure.

Definition of Confidential Information — A specific, comprehensive definition that identifies the categories of protected information: trade secrets, financial data, business plans, customer and supplier lists, pricing strategies, technical specifications, source code, and unpublished intellectual property. The definition must be broad enough to capture sensitive data but specific enough to be enforceable.

Exclusions — Carve-outs for information that is already publicly available, independently developed without reference to confidential information, lawfully obtained from a third party, or required to be disclosed by law, regulation, or court order. These standard exclusions are expected by Canadian courts and their absence may raise enforceability concerns.

Purpose Limitation — A clear statement of the purpose for which the confidential information may be used (e.g., evaluating a potential business transaction, performing contracted services). Use outside this purpose constitutes a breach regardless of whether disclosure occurs.

PIPEDA Compliance — When confidential information includes personal data, the NDA should require the receiving party to handle it in accordance with PIPEDA's ten fair information principles, including appropriate consent, purpose limitation, safeguards, and breach notification.

Term and Confidentiality Period — The period during which information may be disclosed (the term) and the duration of confidentiality obligations after the term ends. Trade secrets should be protected for as long as they remain secret; other information typically for two to five years.

Return or Destruction of Information — An obligation to return all confidential materials or securely destroy them upon termination of the agreement or at the disclosing party's request, with written certification of destruction.

Remedies and Injunctive Relief — A clause acknowledging that breach of the NDA may cause irreparable harm and that the disclosing party is entitled to seek injunctive relief from a court of competent jurisdiction without proving actual damages. Canadian courts regularly grant interim injunctions for NDA breaches.

Governing Law and Jurisdiction — The province whose laws govern the agreement. For Quebec-based parties, the NDA should reference the Code civil du Quebec. For all other provinces, common law principles apply.