July 1, 2017 marks the implementation of the final elements of the Canada’s Anti-Spam Legislation (“CASL”). CASL was enacted in July 1, 2014 in response to the growing problem of unwanted commercial electronic messages inundating the inboxes and devices of Canadians. Given its relative severity, enforcement of CASL’s provisions was to be phased in over a three year period to give those affected time to implement compliance procedures. This transitional provision is set to expire on July 1, 2017.
End of Transitional Implied Consent
CASL prohibits Canadian businesses from sending Commercial Electronic Messages (“CEMs”) unless the recipient has consented to receive such messages either expressly or implicitly. Express consent is given when a recipient is informed of the transmitting entity’s purpose(s) for sending the CEM and expressly agrees to receive such CEM by taking a positive action (e.g. clicking “I agree”). Implied consent, on the other hand, exists in particular statutorily defined circumstances, including where there is an existing business or non-business relationship with the person to whom a message is sent.
CASL defines existing business or non-business relationships as occurring where the recipient of the CEM has engaged in a number of prescribed commercial or non-commercial transactions within the two-year period immediately before the day on which the CEM is sent. An existing business relationship also occurs where the recipient of the CEM had sent an inquiry or application to the sender within the six-month period immediately preceding the sending of the CEM.
The transitional provisions of CASL applied to allow senders of CEM’s to rely on implied consent, without reference to the two-year or six-month periods identified above, where the circumstances giving rise to the implied consent existed prior to July 1, 2014. Thus, during the transitional period, implied consent existed where the sender of a CEM had a pre-existing business or non-business relationship with the recipient prior to July 1, 2014 even if the parties had not engaged in any of the prescribed activities in the two-year period immediately preceding the day on which the CEM was sent.
These transitional provisions expire on July 1, 2017. After this date, businesses seeking to rely on implied consent must be able demonstrate that the circumstances giving rise to the implied consent occurred within either the two-year or six-month time periods, as applicable. It is important to note that a business that sends a CEM has the onus of proving that it has the necessary consent from such CEM recipient. As a result, CASL requires that businesses maintain evidence of the consents they receive (express or implied). Failing to do so may expose the business to penalties and liabilities under CASL, including civil liability under CASL’s private right of action provisions which will also come into force on July 1, 2017.
Delay in Implementation of the Private Right of Action
To date, CASL compliance has been enforced primarily by the Canadian Radio-television and Telecommunications Commission (“CRTC”). However, CASL also created a private right of action allowing complainants to directly claim against directors, officers, agents and mandatories of a business that contravene CASL.
CASL’s private right of action was set to come into force on July 1, 2017. This is no longer the case. The Government of Canada has recently issued an Order in Council removing the July 1, 2017 implementation date. It remains to be seen whether the Government of Canada intends to proceed with the private right of action and, if so, when the applicable provisions will come into force. We will continue to monitor the Government of Canada’s communications with respect to the private right of action and provide updates when they become available.
Preparing for July 1, 2017
Businesses should use what little time is left before July 1, 2017 to ensure their CEM systems are compliant and to implement risk management policies to avert potential contraventions. It is expected that the end of the transition period will be met with more rigorous and stringent enforcement mechanisms by CRTC. Consequently, businesses should develop and adopt a comprehensive strategy on how to manage CASL.
For more information on CASL, the changes taking place on July 1, 2017, and the steps needed to implement effective compliance provisions, feel free to contact Matthew Thurlow, Michael Otto or Joseph Cohen-Lyons.