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Three Important Changes Affecting Charities This July

three important changes affecting charities this july

Authored by Philip A.S. Milley, Associate Director Legal Affairs

July 1, 2017: CASL Private Right of Action Available  and Stricter Implied Consent Provisions In-Force

Changes to Implied Consent
  • Three Important Changes Affecting Charities This July

Canada’s Anti-Spam Law (“CASL”) will celebrate its third anniversary since coming into effect on July 1, 2014. As we previously reported here and here, the legislation takes a tough stance on spam, imposing significant administrative monetary penalties for single violations. This third anniversary brings with it two major changes to the CASL regime.

As many are aware, CASL regulates the sending of commercial electronic messages (“CEMs”) and, in essence, requires senders of CEMs to obtain consent, expressly or impliedly, from the recipient.  CASL also establishes a requirement to include certain information that enables the recipient to withdraw their consent (i.e., an “unsubscribe” mechanism). Contrary to what many believe, CASL does apply to registered charities, although some exceptions apply (Electronic Commerce Protection Regulations, 81000-2-175, s. 3(g)).

When CASL came into force on July 1, 2014, it established a three-year transition period (s. 66), which will expire on July 1, 2017. The three-year transition period permitted organizations to imply consent for all CEMs where the sender and the recipient enjoyed a pre‐existing relationship (business or non-business as defined by the legislation) and that relationship previously included the exchange of CEMs.

As of July 1, 2017, the regular consent provisions (s. 10(9)-(14)) come into effect, which limits the time period within which consent may be implied. In some cases, the sender may only be able to rely on a six-month (s. 10(10)(e)) to a maximum of a two-year period upon which to establish implied consent for the sending of CEMs. As of July 1, 2017, implied consent will depend on an existing relationship during the six-month to two-year period before the CEM is sent.

In addition to Monetary Penalties Private Rights of Action now Available
[TAKE NOTICE THAT THE PRIVATE RIGHT OF ACTION HAS BEEN SUSPENDED AND WILL NO LONGER BE COMING INTO EFFECT ON JULY 1, 2017. FOR MORE INFORMATION SEE OUR POST HERE]

The Canadian Radio-television and Telecommunications Commission (the “CRTC”) is responsible for investigating complaints and administering monetary penalties. Fines are substantial. Organizations can face a maximum penalty of $10,000,000 per day of violation, and individuals can face a maximum penalty of $1,000,000 (s. 20(4)). Penalties can be imposed even if CEMS have been sent to invalid electronic addresses or if the messages did not reach their intended destinations. and there is no requirement that commercial electronic messages include any element of fraud, deceit, or an intention to mislead. Corporate directors and officers may be held both directly and vicariously liable. Directors or officers may be found liable if they directed, authorized, assented to, acquiesced in, or participated in the commission of a violation.

As of July 1, 2017 individual complainants will be permitted a private right of action (s. 47 and 48), which allows individuals to initiate court proceedings to seek redress for violations of CASL. Section 47(2) establishes a three-year limitation period for complaints, meaning that an individual may not bring an action later than three years after the day on which the subject matter of the proceeding became known to the individual.

Examples of violations include:

  1. sending of unsolicited commercial  electronic messages, the alteration of transmission data, or the installation of a computer program (s. 6 to 9);
  2. sending false or misleading electronic messages that is reviewable under section 74.011 of the Competition Act; or
  3. a violation that relates to the email harvesting and use provisions in the Personal Information Protection and Electronic Documents Act (sections 7.1(2) and (3).

This means is that an organization can face a civil law suit (i.e., be sued) by an individual for a violation of the legislation in addition to facing administrative fines from the CRTC for the same violation.  While the legislation preserves a due diligence defence (s. 54(1)) for organizations that exercise due diligence to prevent the offending contravention or conduct, what level of due diligence is necessary to establish a valid defence is as yet unknown.

CCA Corporations Must Transition to CNCA by July 31, 2017

On Febuary 13, 2017 Corporations Canada published a notice notifying Canada Corporations Act, Part II corporations – including registered charities – must complete their transition to the Canada Not-for-profit Corporations Act by July 31, 2017

If the transition is not complete and corporations have not received their certificate of continuance by that date, the corporation will be dissolved or have their charitable registration revoked. See Operating a registered charity for more information.

To be considered transitioned, a corporation must receive a Certificate of Continuance from Corporations Canada. For more information about making the transition, refer to Corporations Canada’s Transition Guide or contact Corporations Canada for further information.

 

 

The content provided in this blog is for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.

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