Canada’s parliament approved a wide ranging anti-spam law on December 15, 2010, which is expected to come into force later in 2013 or early 2014. Once it is implemented, this legislation will give Canada one of the toughest anti-spam regimes in the world, which will impact every business that operates in Canada or sends commercial electronic messages to Canadians. As a result, businesses located in Canada or businesses engaging with Canadians will need to make significant changes to the way they communicate electronically with customers, potential customers and businesses.

The legislation is intended to cause a significant reduction in the bandwidth used to transmit electronic messages. The reduction is achieved by restricting the sending of unsolicited electronic commercial messages (“spam”). The new legislation covers all forms of telecommunication (texts, emails and blackberry messages) but not two way voice calls, faxes or voice recordings, which are already dealt with under different legislation.

For an electronic commercial message to avoid the prohibition it must not contain any content that could potentially encourage participants in a commercial activity, such as selling or promoting a product or service. This exclusion is useful for email solicitation by charities as well as electronic messages sent for the purposes of surveys, as long as they do not encourage commercial activity.

In order for a commercial electronic message to avoid the prohibition, in general there must be either an express consent received from a recipient prior of the sending of the message or an implied consent because of an existing business relationship or existing non-business relationship. The existing business relationship requires some business activity within two years (if the activity involves inquiry about a purchase or lease opportunity, contract negotiation or an inquiry or application from a potential customer, the two year period is reduced six months). An existing non-business relationship, such as through volunteering at an association or being in the same club or association is not subject to the two year limitation.

For express consent, the request for such consent must be in writing, although the consent itself does not need to be in writing and the request must include the following information:

1. The purpose for which the consent is being sought;
2. The name of the person seeking the consent;
3. The business name of the person, if different from the actual name;
4. The physical and mailing address as well as telephone number and internet information;
5. A statement regarding the ability of the recipient to withdraw its consent at any time;
6. At least two mechanisms allowing the recipient to unsubscribe.

The information required for obtaining consent raises at least two separate challenges:

1. Consent is only sufficient for the named person/business. Therefore, affiliates of the sender would need to obtain their own separate consent or have all of the information applicable to them also listed in the consent request;
2. If the consent is being requested by an agent (for instance by a third party provider) the information set out above must be provided by both the third party provider and by the principal that has engaged the third party provider.

In addition, you cannot send an electronic message requesting a consent – as this in itself is an unsolicited electronic commercial message.

All businesses should note that there are a number of exclusions from the requirement to have consent for an electronic commercial message. No consent is necessary if the electronic commercial message:

1. is a response to the recipient’s request for a quote or estimate;
2. is a confirmation of a commercial transaction;
3. is the provision of warranty information;
4. provides factual information about ongoing use of a products;
5. provides information directly related to an employment relationship or benefit plan;
6. delivers a good or service, including updates or upgrades to a good or service; or
7. is a single message to a recipient who is a referral, subject to compliance with a number of strict
conditions.

However, all electronic commercial messages (including those for which an exclusion exists or where consent has been obtained) must include the following basic information:

1. The name of the sender and the principal if the sender is an agent;
2. The name of the business;
3. Physical and mailing address;
4. Telephone number;
5. Email address;
6. Web address;
7. Copy of the electronic address;
8. At least two unsubscribe mechanisms, one of which must include the ability to simply respond and the other of which may be web based.

The requirement for consent is expected to drastically reduce spam initiated in Canada as well as spam received in Canada and to have a significant impact on Canadian business use of contact lists. Each business will need to monitor their contact list and track the number of express consents (since express consents do not expire) as well as track the number of implied consents and the expiry dates relating to those consents. In the event of a name on a contact list for which the implied consent is expired, the business has only ten business days to remove that name from the list. As a result of this legislation, businesses are going to need to work hard to obtain express consent for future electronic commercial solicitation.

Businesses will need to be very diligent in complying, as Canada’s anti-spam legislation contains significant penalties. It allows for the imposition of administrative and monetary penalties that are not tied to the damage caused by the infraction. These penalties can range from $0 to $1,000,000.00 for an individual and $0 to $10,000,000.00 for a business. The legislation also provides a private right of action where the victim can claim actual costs of $200.00 per occurrence to a maximum of $1,000,000.00 per day. Finally, the Act places personal liability on officers, directors and agents of the non-compliant corporation, unless they can show a due diligence defense, involving their efforts to ensure compliance with the Act.

The Act itself does provide for a transition period whereby implied consent is given for three years from the date the Act comes into force if there is an existing business or non-business relationship with the recipient, which relationship has included communication by electronic messages in the past.

Canada’s new anti-spam legislation will significantly reshape the landscape within which businesses communicate with customers, potential customers and other businesses. The legislation will require changes to contact data bases and very specific tracking mechanisms. The content of electronic messages will need to be expanded to comply with the law and businesses will need to keep careful track of what email messages fit into general exclusions under the Act and which must be comply with the various consent requirements. While the legislation may reduce the amount of spam that clogs internet bandwidth as well as the amount of unsolicited messages that jam up our inboxes, it will also result in added headaches for business owners.