Non-Canadian business also impacted by new Canadian anti-spam rules in effect July 2014

June 6, 2014

As of July 1, 2014, businesses that engage in the sending of business messages to recipients in Canada will be subject to Canada’s Anti-Spam Law (CASL) which will generally prohibit the sending of a commercial electronic message without the prior explicit consent of the message recipient. CASL is expected to have a significant impact on the marketing practices of businesses operating in Canada and will apply equally to non-Canadian businesses, including dealers, advisers and fund managers that send commercial electronic messages into Canada. Penalties for non-compliance with CASL include fines of up to $1 million for individuals and up to $10 million for corporations and other business entities. A private civil right of action for damages is also available, although this right of action will not come into force until July 1, 2017.

CASL applies to a wide range of both electronic messages sent for a commercial purpose, including not only email messages, but also text messages, instant messaging and even some social media messages. More specifically, CASL applies to the sending of “commercial electronic messages” (CEMs) which are messages where it would be reasonable to conclude that one of the purposes of the message would be to encourage participation in a commercial activity, whether or not the activity is carried out in the expectation of profit. As a result, the law governs not only direct solicitations, but also a broad range of advertising, marketing and general promotional activity.

As a general rule, the sending of CEMs to both new prospects and existing contacts without prior consent is prohibited by CASL. In addition, specific form requirements will apply to CEMs, including disclosing prescribed information about the sender and providing an easy-to-use unsubscribe mechanism. Notwithstanding the general prohibition, several important exceptions are available, although the scope of these exceptions varies. For example, some exempt the sender from the requirement to obtain prior consent while others exempt the sender from both the consent and form requirements.

Notable exceptions for business-to-business communications include:

  • a broad exemption for businesses-to-business CEMs where the sender has a prior relationship with the recipient;
  • a one-time exception for a CEM sent based on a referral made by an individual with a prescribed relationship with the recipient;
  • a partial exemption for CEMs sent to addresses that have been conspicuously published; and
  • a partial exemption for CEMs sent to addresses that have been directly disclosed by the recipient to the sender (such as through a business card).

There is also a partial exemption for both business-to-business and business-to-consumer CEMs for CEMs sent to a recipient with whom the sender has an existing business relationship, such as where the recipient has purchased goods or services from the sender in the previous 2 years; however, for businesses, this “existing business relationship” exemption seems to have been rendered largely obsolete, due to the availability of the more favourable “business-to-business” exemption, which applies in a wider variety of circumstances, is not time-limited and provides for an exemption from both consent and message form requirements.

In the event that none of the exceptions apply, CASL requires that a sender of a CEM must have the explicit prior consent of the recipient to receiving the CEM. Requests for consent must be in a prescribed form, and electronic messages requesting such consent are themselves considered to be CEMs, such that they cannot be sent without prior consent, unless one of the exceptions applies. Accordingly, electronic messages requesting consent should be sent prior to July 1, 2014 (after which they will need to be sent in compliance with CASL).

Businesses that send CEMs in or into Canada should review their databases of Canadian business contacts to verify that they have a prior relationship (or that they have a business relationship in respect of individual, non-business contacts). This includes categorizing electronic messages that have previously been sent and determining the sources of the electronic addresses and whether express or implied consent currently exists from such contacts. Where such confirmation is not available, the consent of the recipient will have to be obtained; and after July 1, 2014, in accordance with CASL.

For further information about CASL, please see Canada’s Anti-Spam Legislation.

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