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Advertising in Canada is primarily regulated at the federal and provincial levels. This includes laws of “general application” that can apply to any claim that is false or misleading (e.g., the general misleading advertising, provisions of the federal Competition Act and provincial and territorial consumer protection legislation) and legislation governing particular types of advertising, such as anti-spam law (CASL), promotional contests, testimonials/endorsements (i.e., influencer marketing), “ordinary selling price” (OSP) claims and sales, consumer packaging and labelling and performance claims, among others.

In addition to federal and provincial legislation, many sector-specific and profession-specific codes of conduct can apply to advertising and marketing (e.g., in the context of regulated professions, such as real estate services, dentistry, chiropractic, etc.), as well as social media platforms’ terms of use, depending on the type of marketing and medium. Specific types of products are also subject to advertising/marketing rules (e.g., alcohol, cannabis, cosmetics, drugs, food and medical devices).

As such, a significant part of advertising law is determining whether a particular type of advertising, such as a performance claim, contest, endorsement/testimonial or marketing in a specific industry (e.g., food, drugs, cosmetics or alcohol), is subject to regulatory rules. Some of the key areas of Canadian advertising law are summarized below and in the pages on this site.

Given the potential penalties and negative impact on a brand, it is important for advertisers and their agencies and counsel to ensure that marketing campaigns comply with Canadian laws before the launch of an advertising campaign.

COMPETITION ACT

Federally, the Competition Act is the primary legislation governing advertising and marketing in Canada. The Competition Act is enforced by the federal Competition Bureau, which is a federal enforcement agency based in Ottawa and headed by the Commissioner of Competition. The Competition Act contains both general criminal and civil misleading advertising provisions, which prohibit false or misleading representations made to the public to promote a product or any business interest.

In addition to the “general” misleading advertising provisions, the Competition Act also contains a number of other criminal and civil provisions that either prohibit (i.e., make criminal offences) or civilly regulate specific types of marketing practices.

These include: bait and switch selling (section 74.02(2)), deceptive prize notices (section 53), deceptive telemarketing (section 52.1), double ticketing (section 54), drip pricing (sections 52(1.3) and 74.01(1.1)), specific types of electronic advertising (section 74.011), multi-level marketing and pyramid selling schemes (sections 55 and 55.1), ordinary selling price (OSP) claims and sale claims (sections 74.01(2)-(3)), performance claims (section 74.01(1)(b)), promotional contests/sweepstakes (section 74.06), selling products above advertised prices (section 74.05) and testimonials and endorsements (influencer marketing) (sections 52, 74.01 and 74.02).

Some of the Competition Bureau’s key advertising and marketing related enforcement priorities include false and misleading price claims, drip-pricing, misleading influencer marketing, performance claims and ordinary selling price (OSP) claims.

In general, it is important before conducting a particular type of marketing to review whether any provisions of the Competition Act may apply – for example, to ensure that endorsements/testimonials are not false or misleading and that adequate disclosures are made, that performance claims meet the statutory test of adequate and proper testing, that OSP claims meet the legislative test or that the statutory information required to be disclosed for contests or telemarketing is included in marketing materials.

The potential penalties for violating the civil misleading advertising provisions of the Competition Act include Competition Tribunal or court orders to cease the conduct, publish a corrective notice, pay restitution and administrative monetary penalties.

Further to amendments to the Competition Act that came into force on June 23, 2022, the maximum administrative monetary penalties (AMPs) for deceptive marketing under section 74.01 increased: (i) for individuals up to the greater of $750,000 ($1 million for each subsequent order) and three times the value of the benefit derived from the deceptive conduct if that amount can be reasonably determined; and (ii) for corporations up to the greater of $10 million ($15 million for each subsequent order), three times the value of the benefit derived from the deceptive conduct or, if the latter amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenues. Before these amendments, the AMPs for deceptive marketing were capped at $750,000 ($1 million for each subsequent violation) for individuals and $10 million ($15 million for each subsequent violation) for corporations.

The potential penalties for contravening the criminal misleading advertising sections of the Competition Act include imprisonment, criminal fines and prohibition orders to stop the conduct.

CONSUMER PROTECTION LEGISLATION

In addition to the federal Competition Act, provincial consumer protection legislation exists across Canada in the provinces and territories.

Canadian provincial consumer protection rules differ depending on the particular province, but generally include both general misleading advertising rules (i.e., that prohibit false, misleading or deceptive representations about products or services) and rules governing specific industry sectors, such as direct selling, gift cards, auto repairs, fitness clubs and payday loans.

ANTI-SPAM LAW (CASL)

On July 1, 2014, Canada’s federal anti-spam law (CASL) came into force. In general, CASL requires express or implied consent to send Canadians “commercial electronic messages” (CEMs) and imposes sender identification and opt-out (i.e., unsubscribe) requirements for CEMs.

CASL impacts individuals, companies and other organizations that engage in electronic marketing, such as e-mail, text messaging, instant messaging and some types of social media marketing (e.g., where messages are sent to electronic addresses, such as via some social media platforms’ messaging services).

CASL is often relevant when running contests or other promotions in Canada, including if electronic distribution lists will be used to market the contest/promotion, the contest/promotion will include the collection of e-mails for marketing unrelated to administration of the promotion, if participants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or participants are encouraged or required to “share” information about the promotion with friends or family.

The potential penalties for violating CASL include administrative montetary penalties of up to $1 million (for individuals) and $10 million (for corporations).

For more information about CASL, see: CASL, CASL Compliance , CASL Compliance Tips, CASL FAQs, CASL Compliance Errors and Contests and CASL.

Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?

We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists.  We also offer a CASL corporate compliance program.  For more information or to order, see: Anti-Spam (CASL) Precedents/Forms.  If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.

CONTESTS

Promotional contests in Canada are largely governed by the federal Competition Act (mandatory disclosures for advertising), Criminal Code (avoiding the illegal lottery offences under section 206) and contract law (the terms and conditions between the contest sponsor and entrants).

Other laws that frequently also apply to the operation of contests in Canada include CASL (Canadian anti-spam law) (if entrant information will be used for electronic marketing), intellectual property law (e.g., if entrants will submit original material as part of participating or a sponsor uses third party IP) and privacy law (relating to the collection and use of entrants’ personal information).

On October 27, 2023, the province of Quebec made significant changes to its rules relating to publicity contests open to Quebec residents. In this regard, it repealed the provisions of the Act respecting lotteries, publicity contests, and amusement machines relating to publicity contests and repealed its former rules regarding publicity contests. As such, sponsors of contests open to Quebec residents no longer must formally file their contests with the Régie des alcools, des courses et des jeux (Régie) or pay duty (essentially a fee) to the Régie based on the value of contest prizes, file a winners report at the end of a contest or post security in Quebec, where which was formerly required in some cases. Other requirements applying to publicity contests run in Quebec were also eliminated, including the necessity to include specific Quebec-related disclosure language in contest rules and seek permission for contest modifications after launch.

Given that running a promotional contest without following Canadian laws can result in civil or criminal liability or what is often worse for brands – adverse publicity or negative goodwill – it is important to review proposed contest rules and marketing materials for Canadian legal compliance prior to the launch of a contest.

In this regard, the main components of a Canadian contest are generally to include both short and long contest rules setting out the rules for the contest, a winner release form (which is particularly important in higher risk promotions, such as trip contests), review of draft creative materials before the contest is launched to ensure that they are not false or misleading and, if the sponsor wants to use entrant information for e-mail or other electronic marketing, complying with the consent and other requirements of CASL (Canadian anti-spam law).

In some cases, sponsors also enter into co-sponsor agreements (e.g., where there are multiple sponsors or prize sponsors) or indemnification agreements with third parties involved in the contest (e.g., where a sponsor only contributes prizes and/or its branding assets and another party, such an in influencer or contest administrator, is largely responsible for the marketing and operation of the contest).

Such agreements can be useful to shift risk where a sponsor wants to limit potential liability, particularly with unsophisticated co-sponsors or marketing partners.

For more information, see: ContestsContests & CASLContest FAQsContest FormsContest Tips and Contests and Social Media.

Do you need contest rules/precedents
for a Canadian contest?

We offer many types of Canadian contest/sweepstakes law precedents and forms to run common types of contests in Canada.  For more information, see: Canadian Contest Precedents/Forms.

INDUSTRY CODES OF CONDUCT

In addition to federal and provincial advertising laws, some sectors, particularly regulated professions such as real estate, law, dentistry and chiropractors, have industry codes of conduct that include advertising and marketing rules.

While such rules are generally not legislation (unless a regulator has regulatory powers relating to advertising), it can be very important to review industry rules before launching an advertising campaign – especially where there may be professional discipline for violating and industry code or other rules.

Canada also has a national not-for-profit advertising self-regulatory body, Advertising Standards Canada, which has published the Canadian Code of Advertising Standards (the Code).  The Code includes rules relating to many types of advertising and marketing practices, including price claims, bait and switch advertising, comparative advertising and testimonials.  While the Code is only binding on Ad Standards’ members, it can be helpful in providing guidance for specific types of advertising and marketing practices.

SOCIAL MEDIA PLATFORM RULES

Most advertising and marketing campaigns now include some (and commonly many) social media sites, which may include Facebook, Twitter, Instagram, Pinterest, TikTok or other social sites.  Social media platforms, however, commonly include detailed terms of use, including rules governing their use for advertising and marketing and some specific types of promotions (e.g., contests).

As such, it is prudent for advertisers to review the terms of use for the social platforms to be used for a promotion before launch.

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SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

To contact us about a potential legal matter, see: contact

For more information about our firm, visit our website: Competitionlawyer.ca

    buy-contest-form Templates/precedents and checklists to run promotional contests in Canada

    buy-contest-form Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)

    WELCOME TO CANADIAN COMPETITION LAW! - OUR COMPETITION BLOG

    We are a Toronto based competition, advertising and regulatory law firm.

    We offer business, association, government and other clients in Toronto, Canada and internationally efficient and strategic advice in relation to Canadian competition, advertising, regulatory and new media laws. We also offer compliance, education and policy services.

    Our experience includes more than 20 years advising companies, trade and professional associations, governments and other clients in relation to competition, advertising and marketing, promotional contest, cartel, abuse of dominance, competition compliance, refusal to deal and pricing and distribution law matters.

    Our representative work includes filing and defending against Competition Bureau complaints, legal opinions and advice, competition, CASL and advertising compliance programs and strategy in competition and regulatory law matters.

    We have also written and helped develop many competition and advertising law related industry resources including compliance programs, acting as subject matter experts for online and in-person industry compliance courses and Steve Szentesi as Lawyer Editor for Practical Law Canada Competition.

    For more about us, visit our website: here.