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Home > Our Insights > Complying With Canada’s Anti-Spam Law (CASL) – Foreign Organizations Doing Business in Canada Need to Pay Attention
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Complying With Canada’s Anti-Spam Law (CASL) – Foreign Organizations Doing Business in Canada Need to Pay Attention

Published:

August 1, 2014

Author(s):

  • David Fraser

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Most Canadians have heard about Canada’s Anti-Spam Legislation (CASL): we’ve been bombarded with “CASL Compliant” emails asking us to “consent” to the sender continuing to send us electronic communications. But what about organizations and people outside of Canada? They may have deleted them assuming they don’t apply to them – in which case, they could very well be wrong.

WHAT IS “CASL”?

 “CASL” is Canada’s Anti-Spam Legislation – arguably the toughest anti-spam legislation in the world. CASL moved Canada to an “opt-in” regime for all electronic-based commercial communications: with few exceptions, if a person or organization wants to send a CEM within or into Canada, the sender needs the recipient’s prior “consent”.

CEM. There are some inclusions and exclusions, but essentially a CEM is any electronic message that it’s reasonable to conclude has the encouragement of participation in a “commercial activity” as one of its purposes, considering the:

  • message content;
  • hyperlinks in the message to content on a website or other database; or
  • contact information in the message.

Unique. CASL shares some similarities with anti-spam laws in other countries – but has some significant differences. For example:

  • the US CAN-SPAM is opt-out legislation; CASL is opt-in.
  • the US CAN-SPAM allows an initial email seeking consent (with some requirements); under CASL, an email seeking consent is itself a CEM – so must comply with CASL.
  • unlike any other anti-spam legislation, CASL doesn’t only prohibit “harmful” electronic messages – it applies to all electronic messages relating to “commercial activity”.

Teeth. CASL is complicated, requires that most CEMs include mandatory content, imposes a tricky consent management process on organizations – and has teeth. Individuals and organizations that don’t comply with CASL risk significant penalties, ranging from monetary fines up to $10M, personal liability of corporate directors and officers for a corporation’s violation, criminal charges and  – as of July 1, 2017, a private right of action by a person or corporation affected by a CASL contravention.

Due Diligence Defence. CASL does provide a “due diligence” defence to an organization for a CASL violation if it:

  • took reasonable steps to prevent the CASL violation; and
  • can prove that it took those reasonable steps with tangible evidence that clearly demonstrate the steps it took to avoid violating CASL.

“Reasonable Belief”. Foreign organizations might also be able to rely on section 3(f) of Canada’s Electronic Commerce Protection Regulations, which says that the consent and content requirements of CASL don’t apply to a CEM if:

  • the sender “reasonably believes” it “will be accessed” in a foreign country listed in the schedule; and
  • the CEM complies with the  law of that foreign country that addresses conduct substantially similar to that prohibited under section 6 of CASL.

For example, if a US-based organization sends a CEM to a customer which it reasonably believes is in the US – but happens to incidentally be in Canada – and complies with CAN-SPAM, the organization may be in a position to rely on both its due diligence defence (and this is key) and section 3(f) in its defence.

WHERE DOES CASL APPLY?

CASL purports to apply to any CEM that is:

  • “accessed using a computer in Canada”, or
  • “sent using a computer in Canada”.

If a person or organization is sending a CEM from outside of Canada to someone in Canada, CASL says it applies.

Foreign Effect. This approach is tenable under Canadian law. Canadian laws can apply to non-Canadians operating outside of the country where there is a “real and substantial connection to Canada”. The Canadian Radio and Television Commission (CRTC) – the main agency charged with administering and enforcing most of CASL – can investigate a Canadian resident’s complaint of a breach by a non-Canadian resident, even though the effectiveness of the investigation could be limited by the ability to access information (like documents and witnesses) residing outside of Canada. For example, the Federal Court of Canada has decided that Canada’s Personal Information Protection and Electronic Documents Act can apply and the Privacy Commissioner of Canada still has jurisdiction to investigate complaints from Canadian residents against non-Canadian residents. Read the Court’s decision in Lawson v. Accusearch Inc., 2007 FC 125.

Foreign Enforcement. The tougher question is how Canada will enforce CASL outside of Canada. The CRTC says it will work closely with its international counterparts to enforce CASL and specifically named:

  • the US Federal Trade Commission.
  • OFCOM in the UK.
  • the Authority for Consumers and Markets in the Netherlands.
  • and the Australian Communications and Media Authority.

Naming and Shaming. It’s an open question whether an administrative monetary penalty for breaching CASL that is imposed in Canada would be enforced outside of Canada – particularly in the US, given concerns that CASL impinges on freedom of expression. The question will likely remain open until the first enforcement attempt. But where the foreign company has a significant reputation or goodwill in Canada, the “naming and shaming” may be an equal – or greater – deterrent.

WHO DOES CASL APPLY TO?

CASL applies to just about every type of organization – from sole proprietors and independent contractors, to multinational corporations and not-for-profits and registered charities – and every person who sends a CEM to, from or within Canada.

WHEN DID CASL TAKE EFFECT?

CASL takes effect in two parts:

  • July 1, 2014. The CASL sections dealing with anti-spam took effect on July 1, 2014.
  • January 15, 2015. The CASL sections dealing with the unsolicited installation of computer programs or software take effect on January 15, 2015.

HOW CAN A PERSON OR ORGANIZATION OUTSIDE OF CANADA FIGURE OUT WHETHER CASL APPLIES?

Start by identifying any electronic communications sent to someone in Canada. These five steps are a good start for  “foreign” people and organizations (those sending electronic communications into Canada from a country other than Canada) to understand whether they are in a risk zone – and if they are, the next step is a full risk analysis and/or compliance program:

  1. SMS Messages. Scrub your databases and flag as “Canadian” any records with a Canadian area code.
  2. Email Messages. Scrub your databases and flag as “Canadian” e-mail addresses having the top level domain name “.ca” (these are relevant for e-mail messages).
  3. Email Messages. Use a tool (similar to those used to geolocate or geofence visitors to websites) to determine if the domain name is located in Canada and flag all appropriate records as “Canadian”.
  4. All Message Types. Where you have a physical address for the recipient, scrub the database to flag as “Canadian” all with Canadian addresses.
  5. Registered Users. If you can geolocate registered users visiting your online properties, flag as “Canadian “those who are determined to be located in Canada”.

Visit our CASL Knowledge Page at mcinneslegacy.sbox-1.vsrv.io/services/privacy/casl/ and take a look at the Related Content to learn more about CASL.


Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper CASL Team to discuss this topic or any other legal issue.


McInnes Cooper has prepared this document for information only; it is not intended to be legal advice.  You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2014.  All rights reserved.  McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it.  You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.

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  • SCC Protects Internet Users’ Expectation of Privacy In Online Activities in R. v. Spencer

    Jun 16, 2014

    On June 13, 2014 the Supreme Court of Canada decided that Canadians have a reasonable expectation of privacy in their online activities, and…

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  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – The Last Minute Guide to Preparing For CASL

    Jun 12, 2014

    The countdown to CASL is almost over: there are only 13 business days until the anti-spam provisions of CASL – and most of the penalties for…

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  • Joining the Crowd – NS & NB Consider Crowdfunding

    Jun 11, 2014

    Note: For an update on Crowdfunding, read: New Kid on the Block – Crowdfunding Joins Traditional Equity-Based Funding Options for Start-ups…

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  • Counting Down to Canada’s Anti-Spam Legislation (CASL) –10 Steps to Prepare for CASL

    May 8, 2014

    On July 1, 2014 – less than two months from now - the anti-spam sections of Canada’s Anti-Spam Legislation (CASL) take effect. Individuals…

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  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – Does CASL Make You A “Spammer”?

    Apr 15, 2014

    The countdown to CASL is on: on July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (“CASL”) take effect. Individuals…

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  • Cloud Computing: A Privacy FAQ

    Mar 19, 2014

    As organizations turn to cloud computing services, ensuring compliance with legislation and reducing privacy risks is key. In Canada, there is…

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  • Counting Down to Canada’s Anti-Spam Legislation (CASL): 10 Reasons Why You Should Care About The Upcoming CASL Right Now

    Feb 28, 2014

    On July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (aka “CASL”) will take effect. CASL is: Broad. It applies…

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  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – What You Need to Know Now

    Feb 28, 2014

    On July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (aka “CASL”) take effect. CASL will apply to just about every…

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  • Privacy in Computer Contents: Supreme Court of Canada Picks Up Where It Left Off in R. v. Vu

    Nov 8, 2013

    On November 7, 2013, the SCC decided police require specific authorization in a search warrant to search the data in a computer because of the…

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  • Supreme Court of Canada Confirms Employees May Have a Limited Reasonable Expectation of Privacy In Work Computer in R. v. Cole

    Nov 28, 2012

    On October 19, 2012 the Supreme Court of Canada (SCC) decided that a teacher criminally charged with possession of child pornography and…

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  • Legal Alert: SCC Finds Limited Reasonable Expectation of Privacy In Work Computer But Evidence Still Admissible

    Oct 22, 2012

    Mr. Cole was a high school teacher with an employer owned and issued laptop computer.  He also used it for incidental personal purposes, which…

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  • Ontario Court of Appeal Finds Reasonable Expectation of Privacy in Work Computer

    May 6, 2011

    In March 2011, the Ontario Court of Appeal found that an employee had a limited expectation of privacy in the contents of a work computer. The…

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  • Legal Update: Cloud Computing and Privacy FAQ

    Apr 7, 2011

    Note: Click here to read an updated version of this Legal Update in Cloud Computing: A Privacy FAQ as seen in as seen in CCCA Magazine, Spring…

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