Overview of Canadian Anti-Spam Legislation For Not-For-Profit Organizations
Sep 23, 2014
QuickCounsel
By Jillian Schwartz (Partner) and Pei Li (Associate), Blake, Cassels & Graydon LLP
This resource is sponsored by:
Overview
Most of Canada's Anti-Spam Legislation (CASL), including the provisions relating to commercial electronic messages
(CEMs), came into force on July 1, 2014. Intended to be one of the most stringent anti-spam regimes in the world, CASL will have a
significant impact on the electronic communication practices of charitable organizations and not-for-profit entities (NFP). Members of
the NFP sector had hoped that, after making submissions to the government about the significant burden that CASL would impose
on the sector, the government would expand CASL's exemptions to cover the sector as a whole. While CASL does include some
helpful exemptions, including some that are specifically directed at the NFP sector, there is no blanket exemption for NFPs.
Back to the top
THE BAN ON SPAM
A CEM is an electronic message, including an email, text message, instant message and a message sent through
social-networking sites, which is intended to encourage participation in a commercial activity. A commercial activity
includes any transaction, act or conduct that is of a commercial character, whether or not the person who carries it out
does so in the expectation of profit. CASL catches a wide range of electronic communications, including electronic
messages that offer, advertise or promote any good or service. Generally speaking, CASL prohibits sending a CEM to an
electronic address unless the recipient has consented to receiving it and the CEM complies with certain form and content
requirements. It should be noted that an electronic message that is sent to request express consent to send CEMs in the
future is itself a CEM. As a result, subject to certain exemptions and situations in which consent can be implied,
organizations are no longer permitted to send electronic messages that are intended to obtain express consent.
In June 2014, the CRTC published numerous infographics to help clarify the requirements of CASL. In particular, NFPs
may want to consider the infographics entitled What Constitutes a Commercial Electronic Message (CEM)? and Express
Consent Versus Implied Consent.
Back to the top
CASL COMPLIANCE IS NOT REQUIRED IN CERTAIN CIRCUMSTANCES
Since CASL only catches electronic communications that are intended to encourage participation in a transaction, act or
conduct or course of conduct that is of a commercial character, the legislation does not apply to all electronic
communications. For example, many NFPs send out newsletters that are purely educational in nature. Where the NFP
does not sell any good or service, generally speaking, it is unlikely that such newsletters are captured by the definition of
a CEM, so CASL may not apply. In these cases, the relevant organization will be able to continue to send these types of
newsletters without consent. On the other hand, if a newsletter that is educational in nature also includes content that
encourages a commercial activity, such as advertising from a sponsor or a donor, CASL may apply.
Certain CEMs are entirely exempt from CASL, which means that an NFP may send such CEMs without obtaining
consent and without complying with CASL's form and content requirements. While it is outside the scope of this
Quickcounsel to review all of the available exemptions, this Quickcounsel will outline some that are particularly relevant
to NFPs. For a comprehensive list of exemptions, see our general Anti-Spam Quickcounsel or the Blakes Bulletin
published on December 10, 2013. One of the most helpful exemptions for the charitable sector provides that registered
charities (as defined in the Income Tax Act), and those acting on their behalf, are permitted to send a CEM where the
message is primarily intended to raise funds for the charity. However, electronic messages that promote other
revenue-generating purposes are not exempt, so it is uncertain whether electronic messages promoting the purchase of,
for example, lottery tickets, event tickets and other similar activities will be interpreted by the regulators and the courts as
being caught by CASL.
Further, CASL exempts CEMs that are sent by an employee or representative of an organization to an employee or
representative of another organization, as long as the organizations have a relationship and the message concerns the
activities of the organization to which the message is sent. CASL does not provide further guidance on what constitutes a
"relationship" in this context. While it will be the obligation of the sender to prove that the recipient of the CEM and its
organization have a pre-existing relationship, this exemption will allow many business-to-business communications to
continue without the need to comply with CASL. Not surprisingly, a CEM that is sent in response to an individual's
request, inquiry or complaint and a CEM that was solicited by the person to whom the CEM is sent are both exempt from
the legislation.
Back to the top
IMPLIED CONSENT IS SUFFICIENT IN CERTAIN CIRCUMSTANCES
NFP Sector May Continue to Send Electronic Messages to Members, Donors and Volunteers
In some cases, an organization is not required to obtain express consent to send a CEM. Consent will be implied in a
number of situations that are relevant to the NFP sector. First, implied consent exists where the recipient and the sender
have – or in the previous two years have had – an existing business or non-business relationship. In particular, there is
implied consent with respect to sending an electronic message to an individual that has made a donation to or volunteered
at a registered charity within the previous two years. Similarly, consent is implied if the CEM arises from a person's
membership in a club, association or voluntary organization during the previous two years. CASL defines a club,
association or voluntary organization as an NFP that is organized and operated exclusively for social welfare, civic
improvement, pleasure or recreation or for any purpose other than personal profit, if no part of its income is payable to or
otherwise available for the personal benefit of any proprietor, member or shareholder of that organization, unless the
organization's primary purpose is the promotion of amateur athletics in Canada.
In order to rely on this category of implied consent, NFPs will need to maintain a contact database to keep track of the
date on which each donation is made, each membership expires and any volunteer work is performed to ensure that the
two-year time-frame is respected. Due to the time and expense related to maintaining this type of database, some NFPs
may choose to obtain express consent from their donors, members, past members and volunteers to ensure compliance
with CASL. It should be noted that even where an organization is relying on implied consent, the CEM must still comply
with the prescribed form and content requirements that are discussed below.
Note that CASL's transitional period may also extend the length of time during which an NFP may rely on certain types
of implied consent. NFPs can rely on implied consent for a period of three years between July 1, 2014 and July 1, 2017
where an existing business or non-business relationship was created prior to July 1, 2014, the communication between the
parties has included electronic messages, and the recipient has not provided notification that they no longer consent to
receiving CEMs. As a result, NFPs that can prove an existing relationship and satisfy the above requirements will have
some additional time to scrub their contact databases and obtain express consent where necessary.
Back to the top
EXPRESS CONSENT IS REQUIRED IN MANY CASES
If an exemption is not available and an organization is not able to rely on implied consent, consent must be express. In
order to comply with the requirement for express consent, the person granting the consent must make a positive or
explicit indication of consent. Therefore, organizations will not be able to rely on a consent that is obtained using an
opt-out or negative option method. Instead, in order to have valid express consent, an individual must take an active step
to "opt in," such as by checking a previously unchecked box. In addition, in order to comply with CASL, express consent
cannot be subsumed in or bundled with requests for consents for other purposes, such as a consent to general terms and
conditions of use or sale. For example, the ability to purchase a good or service must not be conditional on providing
express consent to receive CEMs. Finally, the request for consent must contain certain prescribed information, including
the name of the organization seeking consent and certain contact information, as well as state that the person whose
consent is being sought may withdraw their consent at any time.
Back to the top
FORM AND CONTENT REQUIREMENTS
Each CEM that is not exempt from CASL must identify the sender, set out prescribed contact information for the sender,
and provide an "unsubscribe" mechanism. The prescribed contact information includes the name of the person sending
the message; the name of the person on whose behalf the message is being sent if the message is being sent on behalf of
another person; if the message is sent on behalf of another person, a statement indicating which person is sending the
message and which person on whose behalf the message is being sent; and the mailing address and one of a telephone
number providing access to an agent or voice message system, an email address, or a web address of the person sending
the message or, if different, the person on whose behalf the message is sent. The unsubscribe mechanism must enable the
recipient to indicate, at no cost to them, that he or she no longer wishes to receive CEMs from the sender. The unsubscribe
mechanism must be available for use for at least 60 days after the CEM is sent and an organization must give effect to the
unsubscribe mechanism without delay, and in any event, within 10 business days after the recipient has indicated that they
wish to unsubscribe.
Back to the top
CONCLUSION
As the main provisions of CASL came into force on July 1, 2014, NFPs should ensure that they understand the
exemptions that may be available to them and build, implement and maintain compliance programs that meet the strict
standards of CASL. The CRTC also published Frequently Asked Questions (FAQs) regarding the scope and applicability
of the registered charities exemption. These FAQs are summarized in the Blakes Bulletin published on July 7, 2014. In
order to get onside with the law, NFPs should also consider the compliance strategies identified in the Blakes Bulletin
published on June 30, 2014.
Back to the top
ADDITIONAL RESOURCES
Industry Canada, Regulatory Impact Analysis Statement
Memorandum of Understanding for Cooperation, Coordination and Information Sharing Between
the Commissioner of Competition, the CRTC and the Privacy Commissioner of Canada regarding
the Implementation of their Mandates under CASL
Industry Canada, Fight Spam Quiz
Industry Canada, FAQs
CRTC, FAQs
http://www.acc.com/legalresources/quickcounsel/overview-of-canadian-anti-spam.cfm