[ESTABLISHING A BUSINESS ENTITY IN CANADA] 85
framework which could allow organizations to collect and use citizens' data for commercial purposes without their knowledge, lack of protections for children and youth, and digital rights protections which "did not go far enough" in protecting individuals from new risks, such as surveillance. However, there have been no recent attempts to pass legislation to update the Ontario laws to improve such protections. Anti-spam Canada’s anti-spam legislation (CASL) requires the sender of a commercial electronic message (“CEM”) sent from or to a computer system in Canada: 1. to have the consent of the CEM recipient; 2. to identify the CEM sender; and 3. to provide an “unsubscribe” mechanism. CASL defines a CEM as any electronic message (including an email, short message service (SMS) text or social media message) that, reasonably construed, has as one of its purposes encouraging participation in a commercial activity. A CEM includes any electronic message used to promote a business or a business opportunity. Unless a CASL exemption applies, a CEM may be sent to a person only with their prior express consent or implied consent. Even a single, first contravention of CASL could result in a penalty of up to $10 million for a corporation and a penalty of up to $1 million for the individual involved (which includes not only the individual CEM sender but anyone who aids, induces or procures a contravention). In addition, the CASL regulators may publicly identify the sender as having contravened CASL, which would embarrass the sender and harm its reputation. If the proposed private right of action (“PRA”) under CASL comes into force, CEM senders who
contravene CASL may also be subject to possible class actions and significant damages awards (based on damages for actual loss and on statutory damages of $200 per contravention up to a maximum of $1 million per day). That said, by Order in Council published June 7, 2017, the federal government indefinitely suspended the coming into force of the PRA (which had been scheduled to come into force on July 1, 2017). Consumer Protection Legislation Each province and territory has its own consumer protection legislation, which must be carefully examined if a foreign business which deals with the consumer market wishes to establish a Canadian presence. Depending on the nature of the business, certain permits may be required, and certain types of contracts must be made in writing and, in some cases, in a prescribed form. Consumers have certain statutory rights of rescission (cancellation) of many types of contracts within prescribed delays, which compel the business to accept the cancellation of the contract and refund any amounts already paid. The types of transactions governed by the consumer protection legislation and regulations of various provinces and territories include contracts of sequential performance (such as education services and fitness studios), contracts for the provision of credit, long-term leases of goods, contracts for the sale or repair of automobiles and motorcycles, and sales by itinerant vendors. Under the Competition Act , which applies across Canada, a person who promotes the supply/use of a product or any business interest, or who conducts any contest, lottery, game of chance or skill, or mixed chance and skill, will be considered to have engaged in reviewable conduct where: (i) adequate and fair disclosure
ILN Corporate Group – Establishing a Business Entity Series
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