Update on Canadian Anti-Spam Legislation – Important Changes Effective July 1, 2017 (PDAD&C #105)

The Canadian Anti-Spam Legislation (CASL) came into effect on July 1, 2014. It was the subject of a memo issued on June 26, 2014 (PDAD&C #77, 2013-14). Some important changes are coming into effect on its third year anniversary, July 1, 2017, and we want to alert you to them.

CASL deals with several areas, including the regulation of the sending of “commercial electronic messages”. Such messages are defined as any electronic message that has “as its purpose or one of its purposes, to encourage participation in a commercial activity.” “Commercial activity” is defined as “any particular transaction, act, or regular course of conduct that is of a commercial character, whether or not the person who carries out the activity does so in the expectation of profit.”

The University of Toronto, along with other universities across Canada, has taken the position that electronic communications relating to its core activities, broadly defined, are not commercial in character and are not regulated by the Act. The University’s core activities relate to education in all its many-faceted aspects, and to the maintenance of an educational community. Thus, communications between the University and existing or prospective students, or with alumni in relation to educational activities and the fostering of an educational community relationship, were and are not viewed by the University as being covered. Communications that the University sends with the primary purpose of fundraising are exempt. Communications between employees, between the University and external businesses and their employees in a business capacity, as well as communications between friends and family, are all exempt.

In the PDAD&C memo referred to above the University assisted divisions in scrutinizing whether any of their electronic communications might be viewed not as part of the core educational activity, and not otherwise exempt, but instead possibly commercial in nature (e.g. communications about the sale of merchandise to the general public, or communications soliciting members of the public to join University gyms). If they are viewed as commercial, specific rules apply, especially with respect to consent to receive such messages.

What changes on July 1, 2017?

1. In the relatively rare situations at the University where a communication was commercial, it has been permissible under CASL to rely on an “implied consent” based on a prior existing business or non-business relationship that includes electronic communications. As of July 1, 2017, if the electronic message is commercial in nature, the University will no longer be able to rely on this kind of implied consent, and express consent will be required before sending electronic commercial messages. If your division is sending such messages, and express consent has not been obtained prior to July 1, 2017, you should not send the commercial electronic message and should alert your division head, who can seek further guidance, including legal advice if necessary.
2. A second change is something that raises the stakes if violations of CASL occur. As of July 1, 2017 there will be a “private right of action” for individuals and businesses who are directly affected by a breach of certain provisions of CASL. The remedies for breaches are significant and can include (among other things) a $200 penalty for each message up to a maximum of $1,000,000 per day. There is a due diligence defense available in certain circumstances. Thus, there are very good reasons to take the issue of CASL compliance very seriously.

In summary, although the vast majority of electronic messages being sent by the University pertain to its core educational activities, and should not be viewed as commercial, the July 1, 2017 changes mean that special care needs to be taken if your division is considering sending messages that do not fall in this category, and might reasonably instead be viewed as commercial. In that case, which should be rare, division heads should gather all relevant information and, if necessary, seek advice before proceeding.