How to Establish an Effective Document Retention Policy in Canada

Establishing an effective document retention policy is pretty important for most Canadian businesses because this ensures that it complies with legal and regulatory requirements. It also plays a role in managing the storage and retrieval of data efficiently.

Not only is this vital to your business in legal aspects, but an effective document retention policy also means you have a secure, accessible, and structured record of confidential information of your employees and clients.

Failure to follow the records retention policy often means you’ll face a lot of technical challenges in running your business, as well as the costly price tag of fixing these issues.

But what does document retention mean exactly? What are the record-keeping requirements businesses should know about? We’ll cover these questions below, so keep reading!

What Is Record Retention?

This is the practice of storing, maintaining, and archiving vital and confidential information of your employees or clients over a required time period. This includes administrative paperwork, finances, performance reports, client agreement forms, or even onboarding documentation of new hires. It’s important to ensure that these files are stored in an accessible yet secure location.

These documents are evidence of your transactions or decisions that take place within your company. However, you can only keep these in your storage units for so long or as long as it’s required. Typically, organizations may decide on their own document retention policies. But when it comes to financial services and other highly regulated industries, legal and regulatory requirements for document retention need to be followed.

Regardless of the set or required time period, it’s still important to have an effective document management system in place while they’re in storage.

Canada’s data retention policies apply whether you have digital processes or you’re still heavily reliant on physical copies of your files. You still need to keep track of how long you store these documents and be aware of where confidential information is kept safe and secure.

 A person holding a stack of documents

Why Is It Important to Establish Document Retention Policies?

Organized Document Management

Establishing a document retention framework ensures that the same efficient guidelines are implemented across the board in your entire organization. It also makes it easier to compile or segregate important files, especially if you’re archiving some of them or removing outdated information.

Regulatory Compliance

The Canadian Government also states the need for the disposal of personal information under data retention policies. This is in line with the authorities’ requirements for financial record keeping under anti-money laundering and terrorist-financing regulations.

As an organization operating under Canadian law, you have a responsibility to work with the government to prevent these crimes from happening, and this usually means being able to present any file should the authorities need them.

Better Document Security

Lastly, document retention policies lessen the risk of huge volumes of data being compromised if there’s ever a breach. Since you won’t keep your files for longer periods, there’s less data at risk. This also provides transparency to your clients, as they become fully aware of how long their information stays with your company.

Establishing a Document Retention Policy

Here are some steps to follow when creating a document retention policy for your business:

    1. Identify Legal and Regulatory Requirements

Research and identify the laws and regulations that apply to your organization. This helps you determine which records you need to keep. However, this can be a tedious job since it includes reading up on different provincial privacy laws.

    2. Determine Retention Periods

Once you know which documents you need to keep, determine how long you need to keep them based on legal and regulatory requirements, as well as business needs. This can vary depending on the type of document and the jurisdiction.

Most of the time, these documents’ retention period will be dictated by a provision of provincial or territory law. Some document types with a set retention time include:

  • Tax;
  • Healthcare; and
  • Human Resources.

     3. Address the Life Cycle of Your Documents

An effective document retention policy should address the creation, distribution, storage, and retrieval of files within your business. Having set guidelines and processes for these policies will make it easier for you to procure data immediately once requested. This is especially important if the government investigates a lawsuit or a regulatory agency conducts a surprise check on your company.

Preparation is key; knowing where everything is will save you a lot of time and trouble in the future.

    4. Define Document Destruction Procedures

While “retention” is in the name of the policy, it is acceptable to destroy or remove a document once its purpose has served you and you have no legal obligation to retain it. These obligations may include (but are not limited to):

  • Statutory or regulatory retention period;
  • Active litigation;
  • Ongoing government investigation or audit; and
  • Threatened or imminent lawsuit.

However, premature destruction of your document while you still have a legal obligation to keep it may lead to a claim of “spoliation of evidence.” This opens up a slew of sanctions and penalties if you’re not careful, so be sure to do a routine check of your files every so often.

    5. Regularly Review and Update the Policy

As laws and regulations change, so will your business’s document retention policy. It’s important to regularly review and update your record-keeping regulations to ensure it remains effective and compliant with Canadian laws and regulations.

A Cloud-based file storage app on a tablet

Manage and Protect Your Files With INTEGR8

Document retention policies are a serious matter—you wouldn’t want to expose your company to penalties or complications in the future because of a misplaced file.

INTEGR8 offers reliable digital document management to help you establish an effective document retention policy for your business. Coming up with solutions that cater to your company’s specific needs is now easier than ever with our free consultations on products and services.

Contact us today to learn more about our digital document management services!

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