Under Canada's new Anti-Spam Law (CASL), as of July 1, 2014, for-profit companies and nonprofit organizations engaged in marketing and fundraising campaigns from within Canada or to recipients in Canada must acquire prior "express consent" from recipients before sending commercial electronic messages (CEM). Nonprofits that send CEM to Canadian recipients must ensure that all CEM conform to the new legal requirements.
The new law covers a range of CEM sent to an "electronic address" (i.e., an address used in connection with the transmission of an electronic message to an email account, an instant messaging account, a telephone account, or any similar account) that encourage participation in a commercial activity – without regard to whether profit is expected – from within Canada or to recipients in Canada. The new law states that CEM include, among other things, messages that include offers to purchase, sell, barter, or lease a product, goods, a service, land, or an interest or right in land; or offers to provide a business, investment, or gaming opportunity.
Under the new law, the term CEM includes emails, text messages, and pre-recorded voice messages, such as marketing emails regarding publications or events.
How the CASL Uniquely Affects Nonprofits
Nonprofits should keep in mind that there are very limited exemptions provided under CASL. For instance, (Canadian) "registered charities" as defined in subsection 248(1) of the Canadian Income Tax Act (note that there are Canadian residency requirements to qualify as a "registered charity") that send CEM with the purpose of raising funds for the charity are specifically exempt from CASL's provisions. Therefore, charities that are not Canadian "registered" should not send CEM from within Canada or to Canadian recipients without acquiring prior consent unless the message falls under another exemption, such as sending an email to someone who has paid membership dues to the sender. Nonprofits sending CEM are otherwise subject to CASL. For example, a nonprofit that sends CEM (not subject to the exemptions described below) for a purpose involving commercial activity – such as new member recruitment, soliciting sponsors, advertisers or exhibitors for conventions and trade shows, promoting certification and accreditation programs, or presumably even soliciting contributions – would be subject to the requirements in CASL. Nonprofits also should be careful to ensure that even newsletters and updates sent from Canada or to Canadian recipients do not contain language promoting commercial activity.
Subject to limited exemptions, the new Canadian law requires consumers' express consent to send CEM. According to guidance provided by the Canadian government, express consent under the new law can be either written or oral, but the onus is on the person sending the CEM to prove that consent has been provided by the recipient.
The law will require the person seeking express consent to:
According to government guidance, if consent is obtained orally, there are two permissible forms of oral consent:
According to the guidance provided by the Canadian government, consent obtained in writing may be in paper or electronic form. Further, the guidance states that consent may be demonstrated by checking a box on a webpage to indicate consent where there is a record of the date, time, and purpose of consent. In addition, the manner of the consent should be stored in a database. Another example of a consent mechanism provided by the Canadian government is filling out a consent form at a point of purchase.
Under the new law, emails seeking consent to send CEM are deemed CEM. Unless the sender has acquired a recipient's prior consent or can avail itself of an exemption, a sender should not seek consent via a CEM. The guidance states that the law also prohibits certain "opt-out" or negative option approaches, such as pre-checked boxes, for securing consent.
Requirements for CEM
CEM sent from within Canada and to Canadian recipients must:
The CEM must have a means for the recipient to unsubscribe from receiving CEM from the sender, at no cost to the recipient. Further, the unsubscribe mechanism should:
Implied Consent and Exemptions
There are several circumstances under which the law allows CEM to be sent without the prior express consent of the recipient:
Notably, the regulations also provide that if an entity reasonably believes that it is sending a CEM that will be accessed in a foreign state listed in the schedule, and that the CEM is in compliance with that foreign state's laws for regulating CEM, that entity will not be held liable for violating CASL.
The law authorizes the Canadian Radio-Television and Telecommunications Commission to designate a person to carry out enforcement of the new law. The law imposes penalties for violations. The maximum, per violation penalty is $1 million Canadian dollars for individuals and $10 million Canadian dollars for any other person (e.g., partnership, corporation, organization, association, trustee, administrator, executor, liquidator of a succession, receiver or legal representative). CASL also provides a private right of action, beginning July 1, 2017, that will allow individual plaintiffs to sue a person that they allege have been non-compliant with the law for actual losses up to $200 Canadian dollars per violation (not to exceed $1 million Canadian dollars for each day on which there was a violation), and other damages.
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Given the complexities involved in making sure that your nonprofit is in compliance with CASL, as well as the penalties associated with non-compliance, it is strongly recommended that your organization evaluate and ensure compliance with the new law prior to July 1, 2014.
"Existing business relationship" means a relationship arising from the purchase or lease of a product, good, or service; a business investment or gaming opportunity; a written contract in effect or having expired within 2 years of the date the CEM is sent; or an inquiry or application within a six-month period before the CEM is sent.
"Non-business relationship" means a relationship arising from a donation or gift made by the recipient within a two-year period before the CEM is sent; volunteer work performed by the recipient within 2 years of the date the CEM is sent; or membership by the recipient in the sender's organization within 2 years of the date the CEM is sent.