As reported in our previous consumer protection bulletin, the Government of Ontario introduced the Consumer Protection Act, 2023 (the “New CPA”) in 2023 following a prolonged period of consultation with the public and other stakeholders . The New CPA was designed to replace the existing Consumer Protection Act, 2002 (the “Current CPA”).
The New CPA was passed into law and then received Royal Assent on December 6, 2023, but the New CPA still has not come into force as of early 2025. As we noted in our previous bulletin, many of the most interesting details of the New CPA would only emerge once regulations to the New CPA were developed. This regulatory development process now appears to be underway, suggesting the possibility that the New CPA will soon come into force. This bulletin therefore provides an overview of the current development process for regulations to the New CPA and what changes new regulations may introduce to consumer protection law in Ontario.
Such regulatory development process was publicly announced in December 2024, when the Ontario Ministry of Public and Business Service Delivery and Procurement (the “Ministry”) issued a consultation paper titled “Consultation on Phase 1 Regulatory Proposals” (the “Consultation Paper”) and launched a public consultation to solicit feedback from stakeholders on the first phase of regulatory proposals to the New CPA. Learn more about the details of this consultation, as well as the Consultation Paper itself.
The Consultation Paper addresses a range of different topics relevant to consumer protection concerns. These topics including the following items, which stakeholders now have an opportunity to comment on and which suggests the approach favoured by the Ontario government in implementing its new consumer protection regime:
- General Contract Rules: The Ministry is considering combining key contract types into a single set of core requirements that would apply to most written consumer agreements (other than certain prescribed agreements, such as proposed new purchase-cost-plus leases). The intent of these changes is to produce uniform core disclosure rules that are easier to apply when a consumer agreement might be characterized as more than one type of service subject to the regulations, such as internet agreements and remote agreements (which occurs frequently). In practice, this may prove to be more of a change in form rather than substance given the overlap between the separately-regulated agreement types under the Current CPA.
- Price Escalation Clauses and Appropriate Disclosures to Consumers: In order to provide transparency with respect to price escalation clauses, the Ministry is considering enhanced rules that may, among other things, ensure price increases can only occur if the contractual language is sufficiently clear and on sufficient advance notice to consumers. Given the popularity of subscriptions and other types of ongoing service agreements in the current marketplace, whatever rules emerge around price escalation clauses could be of particular interest.
- Contract Amendments and Continuations: The Ministry proposes to require businesses to obtain express consumer consent before making an amendment to fixed-term contracts. However, they also propose certain exemptions. For instance, the Ministry acknowledges that advance notice to changes is acceptable for indeterminate-term contracts. This will be an interesting development to follow given the model under the Current CPA that broadly requires consent for any changes to consumer agreements.
- Purchase-Cost-Plus Lease Rules: The New CPA establishes a new class of regulated contracts where the total amount payable exceeds 90% of the estimated retail value of the leased goods. The Ministry is considering applying a series of requirements that currently apply to other types of contracts, such as a 10-day cooling off period.
- Monetary Thresholds: The Ministry proposes maintaining the current monetary threshold of $50 for application of certain contract rules, with the intent of this threshold being to eliminate regulatory burden caused by low-value transactions. Moreover, the Ministry proposes to clarify that the monetary threshold is met if recurring payments could exceed $50 over the life of the contract. Whether this topic invites comment from stakeholders given inflationary pressures will be interesting to follow.
- Transition Rules: Significantly, and as detailed in our prior bulletin on the New CPA, the Ministry is seeking feedback on the impact of applying New CPA rules to existing contracts and potential risks. The Ministry acknowledges, in the Consultation Paper, that “[i]f such regulations were made, they may have the effect of modifying or eliminating any right, obligation or interest acquired under the consumer contracts or related agreements entered into before the [New CPA] comes into force.” This could have the profound effect of requiring businesses to revise existing terms and conditions for regulated consumer arrangements.
- Barriers to Contract Cancellation: The Consultation Paper notes that certain jurisdictions are acting to address barriers to contract cancellation for consumers, including the US Federal Trade Commission’s new “click-to-cancel” rules that require sellers to make it as easy for consumers to cancel their contract as it was to sign up. The Ministry is seeking feedback on various barriers to contract cancellation and the questions extend beyond “click-to-cancel” policies, including specific questions related to issues with subscription-style contracts and online account management. Notably, feedback to these questions will inform the development of potential future regulations at a later stage of regulation-making.
The list above is only a handful of the significant issues raised in the Consultation Paper. Businesses and stakeholders that provide goods or services in Ontario are encouraged to review the document and identify opportunities to influence this critical regulatory framework.
The deadline to submit consultation feedback is February 10, 2025. As the New CPA moves closer to entering into force, we will continue to follow and comment on developments as they occur.
