On December 13, 2017, the House of Commons Standing Committee on Industry, Science and Technology presented its report on Canada's anti-spam legislation (commonly referred to as "CASL") entitled Canada's Anti-Spam Legislation: Clarifications are in Order.  The report was prepared as part of the three-year statutory review of CASL.

Prior to issuing the report, the Committee heard from 41 witnesses and received 29 briefs from a variety of stakeholders, including the Canadian Radio-television and Telecommunications Commission (CRTC), businesses, and non-profit organizations. There was substantial disagreement between witnesses regarding both the effectiveness of the legislation and the best path forward, including divergent views on the private right of action (for which the coming into force has been suspended). The Committee ultimately issued a series of recommendations calling for more clarity in the legislation, more guidance on its interpretation, and greater transparency in the enforcement process.

A significant theme of the report and its recommendations is concern for the "unintended cost of compliance": lack of clarity in the legislation and associated regulations adds to the cost of compliance, estimated by some witnesses as reaching into the millions of dollars for large organizations. The lack of clarity was also noted in some cases to have an overly chilling effect on electronic messaging.

Recommendations

Unsurprisingly, given the title of the report, the Committee added its voice to the chorus of those requesting clarification on certain key provisions of CASL. The report makes 13 recommendations to the Government of Canada – including the following notable ones:

• the types of messages that are "commercial electronic messages" should be clarified, including how administrative, transactional and business-to-business messages are to be treated;
• the provisions pertaining to "express consent" and "implied consent" should be clarified;
• how CASL applies to charities and non-profit organizations should be clarified; and
• the Government of Canada and the CRTC should investigate how they can be more transparent in their methods, investigations, and determinations of penalties, as well as on the collection and dissemination of data on consumer complaints and spamming trends.

In addition, the Committee has recommended that:

• these clarifications be a precondition to the coming into force of the private right of action; and
• the coming into force of the private right of action should remain suspended until the impact of implementing the private right of action can be fully investigated and the government can consider whether any award of damages should be based on proof of tangible harm.

With respect to the issue of enforcement in particular, it is noted that the CRTC has wide discretion over which organizations it investigates and how it enforces CASL. The Committee heard much about how these organizations are selected. However, the Committee noted that the exercise of this "discretionary power does not prevent [CRTC] staff from exercising it with transparency," suggesting that CRTC decisions ought to be more instructive, with one witness suggesting reasons be provided for the amount of any proposed penalty. Since the coming into force, the CRTC has conducted over 30 investigations, delivered 22 warning letters, and collected $468,000 in penalties. The CRTC has also issued three notices of violations, which led to as many decisions from the Commission. In two of these decisions, the CRTC significantly reduced the original administrative monetary penalty from $640,000 to $50,000 and from $1.1 million to $200,000.

Conclusion

The Committee's recommendations are unequivocal: the current CASL regime needs clarification, particularly to avoid the unintended cost of compliance for organizations.  The Committee has requested the government table a comprehensive response to the report. We will be monitoring further developments and potential amendments to CASL as they unfold.

For further reading regarding CASL compliance considerations, see the Fasken CASL Survey Report "Bridging the Gaps in Understanding and Compliance".