Sending Email to Canada? Think First. Canada’s Anti-Spam Law Requires Prior Consent in Many Cases

Canada’s Anti-Spam Legislation (“CASL”), which became effective on July 1, 2014, requires nonprofit organizations (and others) to obtain consent from recipients in Canada before sending them certain electronic marketing and fundraising messages, and it imposes strict requirements for the content of such messages.

CASL applies only to a Commercial Electronic Message (“CEM”).  A CEM is broadly defined in the law as an electronic message (including email, text, or voice messages) that encourages the recipient to participate in a commercial activity, regardless of whether there is an expectation of profit.  A message is a CEM if one of its purposes is to promote or otherwise offer a product, good, service, business or gaming opportunity.   Therefore, even if one purpose is to seek a donation, the message is still a CEM if it includes any of these commercial elements.

Therefore, if your organization is sending email that only asks for a donation and does not include any other promotions, then consent is not required and CASL does not apply at all.  However, if the request for a donation also includes other commercial promotions (ie. “Please visit our Christmas gifts catalogue by following the link below”), then consent is required.

CASL prohibits anyone from sending a CEM without express or implied consent.  Implied consent is assumed if there is an “existing business relationship.”  Generally, there is an existing business relationship if in the last two years the recipient purchased goods or services from the sender.  Implicit consent from a non-business relationship may be inferred from a prior donation to, or volunteer work performed for, a registered Canadian charity, or membership in a club, association or voluntary organization. Even if you have implied consent, you will eventually have to obtain express consent.  For contacts made before July 1, 2014 implied consent expires on July 1, 2017.  For contacts made after July 1, 2014, implied consent expires two years after initial contact.

The truly burdensome aspect of the new law is that consent may not be requested by email.  Instead, requests for express consent should be made by paper or orally, or by checking a box on webpage visited by the party giving consent.  The burden is on the sender of CEMs to demonstrate consent, and records should be kept accordingly.  To obtain express consent under CASL the recipient must actively opt-in (no pre-checked boxes).  The request for express consent must contain information on the purpose for consent, identify the sender (name, address/phone number or email) and notify the recipient that consent can be withdrawn.

CASL also regulates the content of CEMs.  Each CEM sent to recipients must contain the following information: the identity of the sender; contact information of the sender (mailing address and telephone number, email address,

or web address); and an unsubscribe mechanism that is valid for a minimum of 60 days after the message is sent.  If an organization receives an unsubscribe request, it must act on the request within 10 business days.

Organizations are also responsible for ensuring that any third party sending electronic messages on the organization’s behalf are complying with CASL. Contracts between the organization and the third party should include the requirement that the third party be compliant with CASL.

American charities are at a distinct disadvantage in complying with the law because a major exception that is carved out for Canadian charities does not apply to American charities.  Specifically, the regulations do not apply to CEMs that are sent by or on behalf of a Canadian Registered Charity and whose primary purpose is to raise funds for that charity.  However, in order to be a Registered Charity, the charity must actually reside in Canada.  No equivalent exception has yet been granted to charities in the United States which are officially recognized by the IRS or the states.

CASL contains other exceptions, including those relating to family and personal relationships, intra-organization messages, and referrals.  However, confusion and controversy around whether an exception applies can be avoided by obtaining and documenting express consent.

CASL includes significant penalties for non-compliance (up to $10 million per violation for an organization and up to $1 million for an individual). Directors and officers of a corporation can be liable, if they directed, authorized, assented to, acquiesced in, or participated in the commission of the violation.

For more information on CASL, its application and its requirements, please refer to the Government of Canada’s website regarding Canada’s Anti-Spam Legislation at http://fightspam.gc.ca.

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