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Budget Bill Proposes Significant Changes to the Competition Act
By Meredith Ashton Dominic Mochrie
Bill C-10, An Act to implement certain provisions of the budget tabled in Parliament on January 27, 2009 and related fiscal measures, proposes significant amendments to the criminal and civil provisions of the Competition Act (Act) that would create a more robust regime dealing with misleading advertising matters. In particular, the Bill significantly increases both the maximum prison terms and the administrative monetary penalties for reviewable matters and proposes changes in respect of both criminal and civil provisions to capture deceptive marketing practices which target persons outside of Canada. Additionally, the Bill makes possible interim injunctions against persons who make materially false or misleading representations to the public, and creates a framework for restitution-type monetary orders for those who purchased products based on a misrepresentation. Outlined below is a more detailed analysis of the proposed changes.
Offences in Relation to Competition
Under the current criminal regime, in determining whether a person has knowingly or recklessly made a representation to the public that is false or misleading in a material respect, it is not necessary to prove that any person was actually deceived or misled by the representation. Bill C-10 further stipulates that it will not be necessary to establish that the representation was made to persons in Canada or that the representation was made in a place accessible to the public. Accordingly, organizations in Canada targeting individuals outside of the country could be liable under the Act, as could companies which have made materially false or misleading representations in publicly inaccessible places (such as on products that are boxed or only available via catalogue or other remote sales method). By eliminating the requirement to prove such facts, the Bill clearly demonstrates the legislature’s intent that such activity be captured by the Act.
Bill C-10 also increases the maximum terms of imprisonment. Any person found guilty of: (1) knowingly or recklessly making false or misleading representations; (2) sending deceptive notices of prize winnings; (3) deceptive telemarketing; or (4) telemarketing without prescribed disclosures, faces imprisonment for up to 14 years and a fine at the discretion of the court. This is a significant increase from the current maximum of five years and, interestingly, mirrors the maximum imprisonment terms set out in the Canada Criminal Code for fraud over $5,000 and for fraudulently affecting the public market price of stocks, shares, merchandise or anything that is offered for sale to the public. It would seem that the government is of the view that persons who commit any of the above marketing-related offences are akin to those who defraud the public and should face the same penalties.
Deceptive Marketing Practices - Reviewable Matters and Administrative Remedies
Bill C-10 makes significant amendments to the Act concerning reviewable (civil) matters in respect of deceptive marketing practices. The Bill expands the application of the “general impression” test – which currently only applies to false or misleading representations – to representations regarding product testing or testimonials that do not meet the requirements set out in the Act. This test requires that both the general impression and literal meaning conveyed by the impugned representation must be taken into account in considering whether a person has engaged in reviewable conduct. Additionally, the Bill proposes changes to the reviewable matters that echo the proposed changes to the criminal offences for misleading advertising (as discussed above); specifically, the Bill proposes providing that it is not necessary to establish that any person was actually deceived or misled, that any member of the public to whom the representation was made was within Canada or that the representation was made in a public place accessible to the public.
The Bill also increases the maximum amount of administrative monetary penalties (AMP) that may be ordered for deceptive marketing practices, sending a clear signal that even though these practices are not criminal offences, they are considered to be very serious violations of the Act. AMPs are currently capped at $50,000 for individuals for the first offence (and $100,000 for each subsequent violation), and $100,000 for corporations for the first offence (and $200,000 for each subsequent violation). Under Bill C-10, the AMP for an individual is increased to up to $750,000 for the first incident and $1,000,000 for each subsequent order. Corporations will face an AMP of up to $10,000,000 for the first incident and $15,000,000 for each subsequent order. In determining the amount of an AMP, the Bill sets out additional considerations to those currently in the Act as follows: (1) how the reviewable conduct affected gross revenue from sales; (2) the financial position of the person who has engaged in the reviewable conduct; (3) whether the court ordered the person to pay money to persons who purchased the misrepresented products; and (4) whether the person must pay any other amounts as restitution, compensation or as a refund.
The Bill introduces new provisions permitting a court to order that refunds be paid to persons injured by misrepresentations. Specifically, if a court determines that a person has made a materially false or misleading representation to the public under section 74.01(1)(a) of the Act, the court may order that person to distribute money to those persons who purchased the misrepresented products (excluding wholesalers, retailers or other distributors to the extent that they have resold or distributed the products). The court would have wide latitude in specifying terms and conditions to help ensure the successful implementation of the order. The restitution order cannot, however, result in a payment in an amount in excess of the total amount of money received from the sale of such products. In determining the exact amount of payment, the Bill stipulates that the court must take into account whether the person has paid (or has been ordered to pay) any other amounts of money as restitution, compensation or a refund.
The Bill also creates a framework for injunction orders. If, on application by the Commissioner of Competition, the court makes out a strong prima facie case that a person is making materially false or misleading representations to the public and believes the person is disposing (or is likely to dispose) of assets on which the enforceability of an order is substantially dependant, the Bill empowers the court to make an interim injunction order to freeze those assets. The Commissioner must provide the person with at least 48 hours notice of an application for an interim injunction, unless this cannot reasonably be accomplished, the notice would defeat the purpose of an urgent injunction or it would not be in the public interest. Where notice is not given, the Bill only allows an injunction to be issued for seven days, after which time a further application must be made with notice. Where an injunction is made against a person without notice, the person may apply to the court to have the injunction varied or set aside.
Certain changes – most notably the provisions dealing with misrepresentations made outside of Canada and increased fines and penalties – may be in response to reports from authorities in the United States of some Canadian-based companies targeting U.S. residents with marketing scams (telemarketing scams in particular). These changes, with the new injunction provisions, may help facilitate increased monitoring and prosecutions of deceptive marketing practices in Canada.
For more information on Bill C-10, click here.
By Nicole J. Kutlesa
In the May 2008 Osler Advertising and Marketing Review, we reported on new consumer product safety legislation which had been introduced last year as part of the federal government’s Food and Consumer Safety Action Plan: Bills C-51 and C-52. When Parliament was dissolved on September 7, 2008 to issue writs of election, both Bills died on the order table. Recently, the Conservative government re-introduced an adapted version of Bill C-52, which proposed to replace Part I (Prohibited and Restricted Products) of the Canada Hazardous Products Act (HPA) and introduce a new safety regime for consumer products. The new Bill C-6, the Canada Consumer Products Safety Act (CCPSA), is substantively similar to the former Bill C-52, although the government has attempted to address some of the concerns expressed by industry stakeholders under Bill C-52. This article summarizes some of the substantive changes incorporated into the revised version of the proposed CCPSA.
Changes to the Definition of “Danger to Human Health or Safety”
To address concerns that the former definition of “danger to human health or safety” was too broad, in that it could capture dangers that cannot reasonably be eliminated by manufacturers (e.g., sharp knives or cooktops that may provide dangerous hot surfaces), the definition was amended to apply to any existing or potential unreasonable hazard.
Prohibition Against Advertising and Selling Unsafe Consumer Products
Formerly, the prohibition against advertising and selling unsafe consumer products applied to persons who know or ought to know that such products are a danger to human health or safety. Under the new Bill C-6, the standard has been lowered from an objective to a subjective standard: the prohibition applies only to those persons who know that such products are a danger to human health or safety. The prohibition has also been broadened to apply to manufacturers and importers.
Disclosure of Personal Information Without Consent
Under Bill C-6, the Minister of Health would have an unfettered right to disclose personal information without the consent of the individual if the disclosure is necessary to identify or address a serious danger to human health or safety. Formerly, this ability was subject to the making of regulations about the disclosure of personal information.
Review of Inspectors’ Orders
Several amendments were made to the provisions dealing with the right of review of an Inspector’s order. The right has been broadened such that an individual may now request a review of an order based on a question of either fact alone or mixed law and fact. Further, the new Bill introduces a series of standards for responses. Specifically, if a request for review of an order has been refused, the individual must be notified of the decision “without delay.” Moreover, a review must be completed within “a reasonable time” and an individual must be notified of the results of such review “without delay.”
Certain offences carried a fine of up to $5,000,000 and a two-year prison term upon conviction on indictment under the former Bill. Such offences included: offences relating to the prohibition on selling and advertising of unsafe consumer products; misleading claims in advertising and in sales; and the provision of false or misleading information to the Minister or to (or obstructing the conduct of) an inspector. These offences have been included in the second category of wilful and reckless offences under the new Bill. Contravention of these provisions or of any other provisions of the Act done knowingly or recklessly is subject to a fine in the court’s discretion, or a term of imprisonment up to five years upon conviction on indictment.
Bill C-6 provides that the Minster may review a penalty order. It introduces two separate review procedures – one to deal with the acts or omissions that constitute the alleged violation and one to deal with the amount of the penalty. The review by the Minster may only consider written evidence and submissions.
Additional categories of products are excluded from the application of the Act, including feeds, fertilizers and animals.
Private Member Bill Would Prohibit Sexually Suggestive Advertising to Children
By Meredith Ashton
Bill 130, which received First Reading on November 20, 2008, proposes to amend the Consumer Protection Act, 2002 (CPA) by adding Section 13.2, “Advertising: children.” The new section will prohibit advertising that:
- (1) contains images of a sexual nature of a person who is or appears to be 16 years of age or under; and
- (2) is directed at persons 16 years of age or under and that contains clothing, images or other material that encourages sexual activity or creates sexual awareness.
The Bill stipulates that the context of an advertisement’s presentation – in particular, the nature and intended purpose of the good advertised, and the manner in which the advertisement is presented – must be considered in determining whether an advertisement is directed at persons 16 years of age or under.
If Bill 130 is passed, companies which currently engage in provocative, sexually suggestive, clothing-optional advertising in the manner outlined above will be forced to develop less controversial advertising tactics.
New Organic Products Regulations in Canada
By Nicole J. Kutlesa
As we reported in the November 2007 Osler Advertising and Marketing Review, the Organic Products Regulations (2006 Regulations) were enacted on December 14, 2006 under the Canada Agricultural Products Act. A new set of proposed regulations, the Organic Products Regulations, 2009 (2009 Regulations) were introduced on February 14, 2009. The 2009 Regulations would replace the 2006 Regulations (which would be repealed). The 2009 Regulations were drafted after extensive consultation with several different stakeholders. They attempt to clarify several provisions of the 2006 Regulations and provide additional requirements for the certification and marketing of organic products.
Notably, the 2009 Regulations clarify that the scope of application of Canada’s organic product certification regime is limited to food and drink intended for human consumption, as well as food intended to feed livestock (including agricultural crops used for those purposes) and the cultivation of plants. This limits the meaning of “agricultural products” as defined under the Agricultural Products Act such that the 2009 Regulations will not apply to cosmetics, pet foods or other consumer products.
Incorporation of Standards
Further, the 2009 Regulations incorporate (by reference) several organic product standards of the International Organization for Standardization Standards (ISO) and the Canadian General Standards Board (CGSB), in particular standards concerning:
- requirements for “conformity verification bodies” (which replaces “accreditation bodies” under the 2006 Regulations – the bodies charged with the assessment, recommendation for accreditation and subsequent monitoring of certification bodies);
- the requirements for a certification body itself (certification bodies certify organic products under the regime);
- the application and certification processes (as well as the suspension and cancellation processes) for organic product, packaging and labelling certification, including the determination of the percentage of organic products contained in a multi-ingredient product; and
- the requirements for record-keeping.
The incorporation of these standards aims to add an element of consistency to the accreditation process undertaken by the conformity verification bodies and the certification processes undertaken by the certification bodies. Applicants who are refused accreditation as certification bodies now have a statutory right of review by the Canadian Food Inspection Agency (CFIA).
Organic Product Certification
A person who wishes to obtain organic certification for an agricultural product must apply to an approved certification body in the prescribed manner. A certification body is required to certify an agricultural product as organic if the product meets a series of requirements contained in the applicable CGSB standard. That body must now also issue documents to the applicant confirming the organic certification of the product. In addition, an onus now exists on any person that holds a certification for an organic product to inform the certification body of any change that may affect certification.
Packaging and Labelling Certification
Also new to the 2009 Regulations is the introduction of separate requirements for organic product packaging and labelling. Once a person has obtained organic certification of a product, to package and label the product he or she must apply to a certification body in the prescribed manner for a certificate confirming that the packaging and labelling are done in accordance with certain CGSB standards. Such certification remains in effect for a period of twelve months. Note that, whereas the 2006 Regulations stipulated that organic certification of a product remained in effect for only one year, there is no such limitation period in the 2009 Regulations for organic product certification. The 2009 Regulations only provide a limitation period for the certification of such product’s packaging and labelling.
Labelling and Advertising Requirements
The “agricultural product legend” which, under the 2006 Regulations, was a logo with the words, “Canada Organic / Biologique Canada,” has been slightly modified in the 2009 Regulations to read, “Canada Organic Regime / Régime Bio-Canada.” The logo may appear on any organic product except for a multi-ingredient product (i.e., an agricultural product composed of two or more agricultural products) that contains less than 95% organic products. Certain descriptors such as “organic,” “organically grown,” “organically produced” and related symbols may also be used on labels or in advertisements for organic products. The only exceptions are labels and advertisements for multi-ingredient products which are required to include a statement indicating the percentage of organic ingredients contained in the product in the manner prescribed.
A multi-ingredient product that is not an organic product is permitted only to identify any organic products it contains in its list of ingredients. The 2009 Regulations maintain the additional labelling requirements set out in the 2006 Regulations, but add that the claims permitted to be included on labels of organic products under the 2009 Regulations must appear in both English and French, unless only one language is required under the Food and Drug Regulations.
Importing Organic Products
The 2009 Regulations are drafted to facilitate international trade. A product may be imported and marketed in Canada as an organic product if it originates from a country with which the CFIA has entered into an agreement about the importation and exportation of organic products, and the product is certified as organic in accordance with the agreement by a certification body recognized by that country. A product originating from a country that has not entered into an agreement about the importation and exportation of organic products may nevertheless be imported and marketed in Canada as an organic product if it is certified as organic by a certification body recognized by a country with which the CFIA has entered into an agreement regarding the importation and exportation of organic products. There are no specific requirements under the 2009 Regulations that exported products meet Canadian regulatory requirements.
Implementation of the 2009 Regulations
The 2009 Regulations come into force on June 30, 2009. Certifications that were issued before the coming into force of the 2009 Regulations will remain valid provided they were issued by certification bodies with a recognized accreditation pursuant to the 2009 Regulations. The CFIA has indicated that it plans to implement temporary compliance and enforcement measures for 24 months, based on educational activities and minimum enforcement guidelines, with the intent of implementing more stringent enforcement activities thereafter.
Canada Proposes to Curb Spamming, Phishing and Address Harvesting Activities
By Meredith Ashton
When the first spam email was sent on May 1, 1978 no one could have predicted that, thirty years later, approximately 70% of all email sent globally was spam. That percentage equates to about 53.8 trillion spam messages (Source: Pingdom). These messages are not only a nuisance, but also pose a serious threat to the safety and productivity of Canadians, and to the viability of the Internet as an efficient, effective means of communication and commerce. Recently, spam activity has evolved with the economic downturn and is drawing unwitting recipients into money laundering schemes disguised as “work-at-home” emails which offer “quick and easy money.”
The explosion in unsolicited commercial electronic messages prompted the creation of anti-spam software and legislation around the world. In Canada, the federal government established the Task Force on Spam in 2004. The Task Force issued a final report on May 17, 2005 recommending (among other things) the development of anti-spam legislation. After nearly four years of inaction, on February 3, 2009 the government proposed Bill S-220, the Anti-Spam Act. If passed, the Act will bring Canada in line with the other G8 countries which have implemented this type of legislation. The Bill was first introduced on May 7, 2008 as Bill S-235 and later re-introduced as Bill S-202 on November 20, 2008.
Commercial Electronic Message
The Bill concerns all unsolicited commercial electronic messages and not just spam which, technically, only refers to unsolicited commercial email messages. A “commercial electronic message” is defined broadly but does not include an electronic message sent by a government department or agency, court or tribunal. The government has chosen to address commercial electronic messages because this type of message is not protected by freedom of speech and accounts for most spamming.
General Prohibition and Exemptions
The Bill adopts an “opting-in” approach as opposed to the failed “opting-out” approach used in the United States. The latter approach requires a recipient to send an “opting out” message to the spammer (thereby confirming that the electronic address is valid, active and ripe to receive more spam). The “opting-in” method generally prohibits the sending of unsolicited commercial electronic messages without recipient consent, except when the message is sent by a political party or member thereof, a registered charity or other not-for-profit organization, an educational institution in which the recipient is or has been enrolled, a person who has an existing business relationship with the receipent, a public surveyor, or any other person prescribed by regulation.
A recipient’s consent can be inferred from the fact that his or her electronic address is generally available to the public and certain other criteria are met. Consent can be withdrawn at any time and by any means. After a recipient recieves a message from a person exempted under the Bill, he or she may withdraw consent from receiving any further communications from that person. Withrawn consent is deemed to take effect seven days after the day on which the unsubscribe request was sent by the receipient to the sender of the commercial electronic message.
Telecommunications service providers (i.e., ISPs) which provide access services that handle, transmit or relay prohibited messages are protected from liability under the proposed legislation. In fact, the Bill hopes to enlist ISPs to help fight unsolicited commercial electronic messages. ISPs can refuse or cancel service or access to anyone convicted under the Bill or to anyone who sends messages that the ISP believes are in contravention of the Bill. An ISP can also block or filter messages it believes to be in contravention of the Bill and which originate through another ISP.
Form and Content Requirements
Bill S-220 sets out form and content requirements for commercial electronic messages. The message must:
- (1) clearly and accurately idenfity the sender or the person who authorized the sending;
- (2) contain readily-accessible and accurate header and routing information, and information on how to easily contact the sender or person who authorized the sending of the message;
- (3) include a subject line that is not intended or likely to mislead the receipient about a material fact regarding the contents or subject matter of the message; and
- (4) include a clear and conspicuous, functional unsubscribe facility (i.e., an electronic address) and a clear statement to the effect that the recipient may use the unsubscribe facility, at no cost, to send an unsubscribe request to the person who sent or authorized the sending of the message.
Information contained in the message and the unsubscribe facility must be valid for at least 30 days after the message is sent.
Messages Sent from Outside Canada
Many unsolicited commercial electronic messages are sent from outside of Canada. To overcome extraterritorial jurisdiction issues, the Bill presumes that, in the absence of evidence to the contrary, the person who receives an economic benefit from the sending of a message authorized such sending. This commercial beneficiary is usually a Canadian resident to which Canadian laws apply. Additionally, if a message is received by a person in Canada, the act of sending is deemed to have taken place in Canada.
Bill S-220 prohibits the supply, offering, acquisition or use of address-harvesting software or harvested-address lists. Address-harvesting software searches the Internet to collect or “harvest” electronic addresses. While the Personal Information Protection and Electronic Documents Act can regulate this conduct for invasions of personal privacy, Bill S-220 is required to adequately respond to address harvesting generally. Commerical electronic messages may not be sent to an electronic address that the sender or person who authorizes the sending knows or ought to know was acquired using address-harvesting software, a harvested address list or an automated means that generates possible electronic addresses by combining letters, numbers or symbols or a combination thereof (i.e., dictionary attacks).
The Bill also addresses “phishing,” an activity whereby emails, websites or instant messagse are used to induce people to reveal personal information, which the “phisher” uses to commit fraudulent activities. The proposed legislation prohibits persons from:
- (1) impersonating trusted websites or domain names without authorization;
- (2) sending misleading commercial electronic messages which falsely represent that the messages are being sent by or on behalf of someone else;
- (3) directing or linking the recipient to impersonating websites; and
- (4) requesting or attempting to induce any person to provide personal information or any other means of idenfication using commercial electronic messages or impersonating websites or domain names.
Offences and Penalties
Every person who knows, or ought to know, that their trade, business, property, goods or services are being or will be advertised or promoted in a commercial electronic message sent without recipient consent or in contravention of the prescribed form and content requirements has a duty to take reasonable measures to prevent the sending of the message and to report any contravention to a law enforcement agency.
Failure to prevent the sending of a message in contravention of the Bill will result in stiff penalties, which the government hopes will serve as a deterrent to other spammers and phishers. Sending a message without receipient consent is an indictable offence. Corporations will be liable for a fine up to $500,000 for the first offence and $1,500,000 for a subsequent offence. Individuals may be fined up to $500,000 and/or two years in prison for the first offence, and up to $1,500,000 and/or five years in prison for a subsequent offence. A corporation or individual will be guilty of either an indictable offence or an offence punishable on summary conviction if a message is sent in contravention of the form and content requirements set out in the Bill or if any provision relating to address-harvesting, impersonation sites, misleading messages or the duty to prevent and report contraventions is violated.
Any person who knowingly aids or abets (or attempts to aid or abet) a person to commit any of the foregoing offences will be liable for the same penalty as that person. Furthermore, if a corporation commits an offence under the Bill, any officer, director, agent or mandatary who directed, authorized, assented to, acquiesced or participated in the commission of the offence is guilty of the offence and will be subject to a penalty on conviction, whether or not the corporation is prosecuted or convicted.
A person will not be convicted of an offence under the Bill if that person proves that the contravention was due to inadvertence or an honest mistake of fact.
The Bill also provides a right of civil action for any person who has been (or is about to be) adversely affected by prohibited conduct. A court may grant any or all of the following remedies: an injunction, order, compensatory and/or punitive damages or any other appropriate relief, including costs of the action.
New Brunswick Gift Card Regulations In Force
By Meredith Ashton
On December 18, 2008 New Brunswick’s General Regulation, made under the Gift Cards Act, came into effect. The Regulation permits expiry dates and fees for gift cards issued or sold for charitable, marketing, advertising or promotional purposes. It also allows expiry dates on cards for specific goods or services, card replacement fees and a maximum monthly dormancy fee for multiple-store cards. For more information on gift card regulation in Canada see the October 2008 Osler Advertising and Marketing Review.
Several Developments in Manitoba Payday Loans Legislation
By Meredith Ashton
Section 3 of the Consumer Protection Amendment Act (Payday Loans), as it enacts sections 148-151, 155, 157-161 of the Manitoba Consumer Protection Act (CPA), will come into force on March 9, 2009. These sections impose requirements and restrictions on payday lenders and allow inspections of lender records. Under the new provisions, a borrower must be given a prescribed document when an initial advance is made (or a cash card is given which enables access to the initial advance). This document must (among other things) set out that the borrower may cancel the loan within 48 hours of receiving the initial advance. If the lender fails to include this information in the document, or fails to provide the document at all, the borrower may cancel the loan at anytime.
Should the borrower choose to cancel the loan, he or she must provide written notice to the lender and repay the outstanding balance of the initial advance, less any cost of credit that was paid by the borrower. The new sections of the CPA also set out a payday lender’s record-keeping requirements and grant inspectors significant inspection powers, including the ability to enter a lender’s premises without a warrant to inspect or audit records for accuracy and compliance with the CPA.
Sections 4, 5, and 8 of Manitoba Regulation 3/2009 (Regulation) came into effect on January 12, 2009. The Regulation amends the Payday Loans Regulation by requiring lenders to provide information about their privacy policies in the document required to be provided to borrowers (as discussed above) under s. 148 of the CPA. A lender must also provide a borrower with a copy of the completed and signed payday loan agreement. The Regulation further stipulates that sections 14, 15, 17–19 of the Payday Loans Regulation come into force on March 9, 2009. These sections set out (among other things) information that is required to be included in a payday loan agreement, when a notice of administrative penalty may issued, and form and content requirements for a lender’s records.
We will continue to monitor payday loans regulation and will report on any developments in future issues of the Osler Advertising and Marketing Review.
New Motor Vehicle Advertising Requirements in 2010
By Meredith Ashton
On January 1, 2010 the Ontario Motor Vehicle Dealers Act, 2002 (Act) and its two regulations, the General regulation and the Code of Ethics and Operation of Committees regulation, will come into force. The Act and its regulations will (among other things) impose new obligations on registered motor vehicle dealers and salespersons (registrants) for motor vehicle advertising.
Under the Act, registrants will be prohibited from making false, misleading or deceptive statements regarding the purchase, sale, lease or exchange of motor vehicles in any published material. If the registrar reasonably believes that a registrant is engaging in false advertising, the registrar may order the registrant to cease using the material, retract the impugned statement, and/or publish a correction.
The General regulation, O. Reg. 333/08, sets out specific advertising requirements with which registered motor vehicle dealers must comply unless they are registered in a prescribed class that is exempt. Subject to a few exceptions, motor vehicle advertisements must state, in a clear, comprehensible and prominent manner, the dealer’s registered name and business telephone number, and the total price of the vehicle, including any and all charges related to the vehicle (i.e., fees, levies, taxes, freight charges and inspection before delivery charges). Should two or more registered dealers jointly advertise a motor vehicle for a particular price with certain charges that vary between dealers, the advertisement must stipulate that the actual purchase price for the vehicle may be lower than indicated in the publication and that the buyer of the vehicle may be subject to additional charges, which must be described.
The regulation also requires that a registered dealer be able to provide vehicles at the advertised price. If the dealer has a limited number of vehicles available at the advertised price, the advertisement must disclose the number of available vehicles. Additionally, the regulation provides that if an advertisement states that an extended warranty is included with the purchase of a vehicle, the warranty term and the maximum individual claim limits (if any) for the warranty must be clearly, comprehensibly and prominently described in the advertisement.
The Code of Ethics and Operation of Committees regulation, O. Reg. 332/08, establishes a code of ethics (Code) which all registrants must follow and which cannot be contracted out of or waived. The Code requires that, for disclosure and marketing purposes, registrants be clear and truthful in describing aspects of the motor vehicle and any associated products, services, programs and prices. Furthermore, all advertisements must be legal, decent, ethical and truthful.
Offences and Penalties
Engaging in false advertising, violating an order of the registrar or contravening any of the advertising-related requirements set out in the General regulation constitutes an offence under the Act. Individuals will be liable on conviction to a fine of up to $50,000 and/or to a maximum prison term of two years less a day; corporations will be liable to a maximum fine of $250,000. Officers and directors of a corporation will be guilty of an offence if they failed to exercise reasonable care to avoid contravention of the Act. Should a registrant fail to adhere to the Code, a discipline committee established by the Minister of Consumer and Business Services may make a prescribed order, such as the imposition of a maximum fine of $25,000. An order of the discipline committee can be appealed to the appeals committee.