2022 proved to be an interesting year in the advertising, marketing and product compliance space in Canada. From changes to labelling requirements for foods and natural health products, amendments to Canada’s Competition Act to address drip pricing, an increased focus on environmental and sustainability claims, to changes to privacy legislation and French language requirements, Canada has seen a number of developments. This article is not an exhaustive list of changes in Canada but highlights certain key matters.
Product Labelling
Front of package nutrition labelling for food products
On July 20, 2022 amendments to the Food and Drug Regulations came into force relating to a new mandatory front-of-package nutrition symbol on all prepackaged foods high in sodium, sugars or saturated fat. Health Canada has released online technical guidance and a backgrounder on the use of the nutrition symbol, which are incorporated into the legislation by reference and which manufacturers will be required to follow.
The nutrition symbol is black and white, depicts a magnifying glass, and identifies if the food is high in sodium, sugars or saturated fat or a combination of these.
Notably, certain foods are not required to display the symbol, if they can rely on the nutrient-specific, technical or practical exemptions identified in the Regulations. Manufacturers will not be required to demonstrate compliance with these changes until January 1, 2026, but may choose to update their packaging sooner. For more information, please see our prior article on this topic.
Changes to natural health products labelling requirements
Following an increase in the use of natural health products (“NHPs”) among Canadians, Health Canada released the Regulations Amending the Natural Health Products Regulations (the “Amending Regulations”), which came into force on June 21, 2022. The Amending Regulations introduce enhanced obligations regarding both content and format of NHP labels. New content requirements include labelling of allergens, gluten, added sulphites and aspartame and identifying modernized contact information. New format requirements include the introduction of a standardized format product facts table and requirements regarding clear and prominent display of label text (e.g. font, colour, style).
The Amending Regulations allow for some flexibilities regarding the formatting specifications, particularly when it comes to size of the immediate container of the product. Additionally, exemptions may apply if a product has very small packaging, if its entire contents can be used in one day, if it contains no more than three recommended dosage units, or if it is deemed to be a low risk product. NHPs that had not yet received a product licence from Health Canada as of June 21, 2022 will need to comply with the Amending Regulations by June 21, 2025. NHPs that received a product license prior to June 21, 2022 will not be required to comply with the labelling requirements until June 21, 2028. For more information, please see our prior article on this topic.
Changes to the Competition Act
On June 23, 2022, amendments to the Competition Act (Canada) created new prohibitions against drip pricing under the civil deceptive marketing practices and criminal false or misleading representations provisions. Drip pricing refers to the practice of offering a product or service at a price that is unattainable due to fixed charges or fees that were not properly disclosed. For example, these fees may have been hidden in fine print or added later on during the purchasing process. Section 36 of the Competition Act provides a statutory right of action for damages to any person who has suffered loss or damages as a result of conduct contrary to Part VI of the Act, including the new criminal drip pricing provision. Violations of the drip pricing provisions may also result in fines and penalties for individuals and corporations (for example, a first time violation of the civil drip pricing provision by a corporation carries a maximum administrative monetary penalty of CAD $10 million or three times the value of the benefit obtained from the drip pricing, whichever is greater). For more information on the changes to the Competition Act related to drip pricing, see our prior article.
Focus on environmental and sustainability claims
In 2022, we were reminded that environmental marketing claims continue to be a priority and area of interest for the Competition Bureau (the “Bureau”).
The Bureau started off the year by completing its investigation into false or misleading recyclability claims made by a coffee pod company and entering into a consent agreement on January 6, 2022. As a result of the consent agreement, the company was subject to a monetary penalty of $3 million in addition to other compliance measures, including publishing corrective notices and amending certain recyclability claims.
Following the issuance of the consent agreement, the Bureau archived its Environmental Claims: A Guide for Industry and Advertisers (the “Guide”) on January 20, 2022. The Bureau indicated that the Guide did not reflect the Bureau’s current policies or practices and did not reflect latest standards and evolving environmental concerns. The Bureau has posted a condensed version of key considerations that should be taken into account when making environmental marketing claims on its website.
Further, the Bureau opened two inquiries in 2022 in connection with environmental marketing claims regarding climate change, reduced emissions, and sustainable energy, and it closed its 2019 inquiry into flushable wipes. Unlike the recyclability claim matter which was settled early on in the year, these new inquiries, along with any ongoing or future enforcement of deceptive marketing practices under the civil provisions of the Competition Act, will be subject to higher administrative monetary penalties.
As a result of amendments to the Competition Act in June, the new maximum penalty for contravening the civil deceptive marketing practices provisions of the Competition Act are as follows:
- For corporations, it is the greater of: (i) $10 million ($15 million for each subsequent violation); or (ii) three times the value of the benefit obtained from the deceptive conduct. If that amount cannot be reasonably determined, the maximum penalty will be 3% of annual worldwide gross revenues. Previously, penalties for corporations were capped at $10 million ($15 million for each subsequent violation).
- For individuals, the new maximum penalty is the greater of: (i) $750,000 ($1 million for each subsequent violation); or (ii) three times the value of the benefit derived from the deceptive conduct, if that amount can be reasonably determined. Previously, penalties for individuals were capped at $750,000 ($1 million for each subsequent violation).
In conjunction with the Bureau’s ongoing enforcement activities, the Bureau hosted the Competition and Green Growth Summit in September to explore the interplay between sustainability and competition law and policy in an effort to inform its enforcement and advocacy practices going forward.
Major overhaul of Québec’s French language law
Québec’s Bill 96, An Act respecting French, the official and common language of Québec, which amends the Charter of the French Language (the “Charter”), received assent on June 1, 2022. The Charter was adopted in 1977. Its stringent rules regarding use of the French language in Québec existed long before Bill 96 was passed. Bill 96 introduces many amendments, including regarding language at the workplace, francization of businesses, language of contracts between private parties, language of business and commerce, as well as increased penalties. Some changes came into force on June 1, 2022, but other provisions will come into effect on a staggered basis.
Two important new provisions will come into force on June 1, 2025. As of now, a non-registered trademark (i.e. common law mark) can benefit from an exemption allowing it to be displayed in a language other than French on goods and/or on public signs and in commercial advertising. Under the new provisions in Bill 96, only registered trademarks that do not have a French registered version will benefit from this exemption. In addition, regarding goods and their packaging, generic terms and a description of the product included in the trademark will also need to appear in French. Regarding public signs and posters visible from outside premises, French will need to be “markedly predominant” (i.e. French must be at least twice as large as the other languages) where such a trademark appears in a language other than French (as of now, in such cases, there is only a need to have a “sufficient presence of French”). These new rules might be disruptive to brands and trademark owners as it could mean changes to packaging and signage, among other things. For additional information on the impact of Bill 96, see our prior article.
Privacy
Bill 64 amends Quebec’s privacy legislation
Québec’s Bill 64, An Act to modernize legislative provisions as regards the protection of personal information, received assent in 2021. A majority of the changes made by Bill 64 will come into force on September 22, 2023, but certain provisions came into effect on September 22, 2022. Two of these changes are of particular interest. First, organizations need to appoint in writing a privacy officer (referred to in Québec as the “person in charge of the protection of personal information”), failing which the person exercising the highest authority in the organization (e.g. the CEO) will be deemed to have this responsibility. Second, in the case of privacy breaches (referred to in Québec as “confidentiality incidents”), there is a need to notify the regulator and any person whose personal information is concerned by the incident. This is similar to requirements under Canada’s federal private sector legislation but subject to some differences. Québec’s privacy legislation does not only apply to organizations based in Québec, it also applies to any collection of personal information that takes place in Québec, whether or not the organization is established in the province. Accordingly, any businesses with dealings in Québec should be mindful of these new obligations.
The new provisions that will come into force in September 2023 will constitute a major reform of Québec’s privacy legislation. These changes essentially revolve around requirements for the collection, use, and disclosure of personal information as well as governance requirements surrounding privacy oversight, and enforcement mechanisms. In addition, before communicating personal information outside Québec (which includes entrusting a third party outside Québec with the task of collecting, using, communicating or keeping such information), an organization will need to conduct an assessment of privacy-related risk factors. Starting on September 22, 2023, breaches of Québec’s privacy legislation may result in increased penalties for organizations, namely: fines up to CAD $25 million, or, if greater, the amount corresponding to 4% of worldwide turnover for the preceding fiscal year; and/or monetary administrative penalties up to $10 million or, if greater, the amount corresponding to 2% of worldwide turnover for the preceding fiscal year.
Proposed changes to Federal privacy legislation
On June 16, 2022, the Canadian government introduced Bill C-27, An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act and to make consequential and related amendments to other Acts, also known as the Digital Charter Implementation Act, 2022.
Bill C-27 aims to introduce three new pieces of legislation: (1) the Consumer Privacy Protection Act (“CPPA”), (2) the Personal Information and Data Protection Tribunal Act, and (3) the Artificial Intelligence and Data Act (“AIDA”).
The CPPA would repeal the privacy provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA) and replace them with a new legislative regime governing the collection, use, and disclosure of personal information for commercial activity in Canada. Among other rules, the CPPA would introduce more severe penalties for non-compliance, enhance the Privacy Commissioner’s authority to oversee compliance, and create a right to request deletion of personal information. Monetary penalties under the CPPA would include fines of up to $10 million or 3% of global gross revenues for private organizations that are non-compliant with the CPPA regulations and fines of up to $25 million or 5% of global gross revenues for private organizations facing criminal penalties. The Personal Information and Data Protection Tribunal Act would create a new administrative tribunal to enforce the CPPA and review the orders of the Privacy Commissioner. AIDA would create a framework for regulating the design, development, and use of certain artificial intelligence systems.
Bill C-27 follows the previous attempt to reform privacy law, Bill C-11, which died on August 15, 2021 after failing to pass both the House of Commons and the Senate before the Parliamentary session ended. The first reading of Bill C-27 in the House of Commons was completed on June 16, 2022. As of November 28, 2022, Bill C-27 is going through second reading in the House of Commons. It creates specific obligations for service providers that did not exist previously. There has been significant debate and opposing viewpoints on whether Bill C-27 has struck the right balance between industry and privacy protection.
iGaming in Ontario
On April 4, 2022, the Government of Ontario launched Canada’s first licensed and regulated online gaming market through iGaming Ontario (“iGO”), a subsidiary of the Alcohol and Gaming Commission of Ontario (“AGCO”). Operators of online sport and event betting channels must be registered with the AGCO and be conducted and managed by iGO. Along with the launch of Ontario’s igaming market, the Registrar’s Standards for Internet Gaming (the “Standards”) came into force and set out the regulatory framework for sport and event betting. The Standards minimize the potential of compromising betting markets by establishing safeguards such as requiring operators to monitor betting markets for suspicious betting activity, prohibiting insiders from betting on certain events, ensuring that sport and event offerings meet certain betting criteria, and requiring operators to engage in independent integrity monitors. The Standards also include strict rules regarding advertising on online sport and event betting channels.
Ad Standards procedure
Ad Standards Canada is the country’s self-regulatory body that aims to ensure advertising in Canada is truthful, fair and accurate. Its Consumer Complaint and Advertising Dispute Procedures, provide mechanisms for accepting and responding to consumer and advertiser concerns about Canadian advertising.
On January 4, 2022, Ad Standards created a new resource page where it will publish interpretive guidance related to its Advertising Dispute Procedure for advisers, a mechanism that aims to resolve disputes between advertisers confidentially. Ad Standards’ first Procedural Note provides suggestions for how to create an acceptable submission that meets the required criteria in order for a complaint to be accepted by Ad Standards such that an advertiser’s dispute can be launched.
On April 1, 2022, changes to the Consumer Complaint Procedure were made to further Ad Standards’ mandate of building public trust in advertising as well as ensuring better accuracy in reporting concerns raised by the public. In the past, only the first ten complaints regarding the same ad were processed by Ad Standards’ staff, thus lowering the recorded total number of complaints received by the public. The April 2022 procedural update removed the limitation of accepting only ten complaints per ad and now requires Ad Standards staff to consider and respond to all written consumer complaints received by them about advertising that allegedly does not comply with the Canadian Code of Advertising Standards. This will not change the way that the Consumer Complaint Procedure is applied.
Should you have any questions regarding these developments in Canada, please reach out to any member of Miller Thomson’s Marketing , Advertising and Product Compliance team.
