Overview of Canadian Anti-Spam Legislation For Not-For-Profit Organizations
Sep 23, 2014 QuickCounsel Download PDF
By Jillian Schwartz (Partner) and Pei Li (Associate), Blake, Cassels & Graydon LLP
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.
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.
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.
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.
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.
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.
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.
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
Additional ACC Resources
ACC Resource Library - Article
ACC Resource Library - Article
ACC Resource Library - ACC Docket
Crafting a Global Anti-Corruption Program: Leading Practices for Ensuring FCPA, U.K. Bribery Act, and Related Corruption Compliance
ACC Resource Library - Leading Practices Profiles
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