Some Good News for Registered Charities as Canada’s Anti-Spam Law is finalized
By C. Yvonne Chenier, Q.C
The Minister of Industry has recently announced (http://news.gc.ca/web/article-en.do?mthd=tp&crtr.page=2&nid=798829&crtr.tp1D=1) that most parts of Canada’s anti-spam law will come into force on July 1, 2014. This legislation intends to stop unsolicited commercial electronic messages and unwanted spyware and malware from being transmitted and installed on our computers. We have written about this before as it will impact commercial activity in the charity and not-for-profit sector. Commercial activity as defined in this legislation could occur “whether or not the person who carries it out does so in the expectation of profit”.
Lucky for some of our readers, in the final regulations it has been made clear that there will be an exception for a commercial electronic message “that is sent by or on behalf of a registered charity as defined in subsection 248(1) of the Income Tax Act and the message has as its primary purpose raising funds for the charity”. Charities should review their practices to be sure that their messages are primarily for fundraising purposes. Any other kind of electronic message that a charity sends out should still be reviewed for compliance with this anti-spam law if there is any hint of commercial activity in its content.
Unfortunately, not-for-profit organizations that are not registered charities should still seek expert advice to understand their obligations to comply with the nuances in these rules. For those organizations that are selling or promoting using electronic communication, there are basically two important things to know.
What is prohibited?
Firstly it is “prohibited to send or cause or permit to be sent to an electronic address a commercial electronic message unless the person to whom the message is sent has consented to receiving it, whether the consent is express or implied”. For the not-for-profit sector, it is helpful to note the Act defines an “existing non-business relationship” as one arising (in the last 2 years before the message was sent) from a donation or gift to or volunteer work for a registered charity, or membership in a club, association or voluntary organization (as defined by the regulations). Regardless of how an organization defines “membership” or any commonly used definition of a club, association or voluntary organization, the regulations under this Act prescribe that “membership” is the status of having been accepted as a member of a club, association or voluntary organization in accordance with its membership requirements. Furthermore the prescribed definition under this Act of a club, association or voluntary organization is one that “is organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any purpose other than personal profit, if no part of its income is payable to, or otherwise available for the personal benefit of, any proprietor, member or shareholder of that organization unless the proprietor, member or shareholder is an organization whose primary purpose is the promotion of amateur athletics in Canada.” (emphasis added).
Note that this is a slightly different definition than the one used in the Income Tax Act where a not-for-profit is defined in section 149(1)(l) as ” a club, society or association that, in the opinion of the Minister, was not a charity within the meaning assigned by subsection 149.1(1) and that was organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose except profit, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder was a club, society or association the primary purpose and function of which was the promotion of amateur athletics in Canada.” (emphasis added).
Seeing the words “personal profit” instead of just “profit”, clarifies that consent could still be implied for those organization that otherwise meet the definition, but who still intend to “profit” from their activities in a way that will not benefit a person individually. This is a very interesting clarification and one that will be welcomed by those organizations that are indeed profitable but where every cent of the fruits of their labour goes back to their cause but need to maintain communication with their supporters.
What are the conditions for use of consent?
Secondly, one should treat consent with respect. A commercial electronic message must be in a form that has very specific requirements including identification of the person who obtained the consent, the sender’s identity and contact information (must be valid for a minimum of 60 days), a withdrawal of consent mechanism and a prescribed unsubscribe mechanism. It may not be unusual to see the legally required part of the message be much longer than the message itself. We may be reading a lot of fine print in our emails from now on. How small can a font be?
As with most legislation there are exceptions. The prohibition will not apply to a commercial electronic message that is an interactive two-way voice communication between individuals or sent by facsimile or voice recording to a telephone account. That is what the National Do Not Call List registration procedure deals with. The Act does not apply to broadcasting a message in the old fashioned way (as defined subsection 2(1) of the Broadcasting Act). Perhaps personal one to one communication will come back into vogue or we will start getting spammed on our personal TV sets.
It is now time to start to train all staff and volunteers who deal with electronic communication about these new requirements and get ready for July 1, 2014. The Government will have a Spam Reporting Centre on the (www.fightspam.gc.ca) website where anyone will be able to report commercial electronic messages sent without consent; and/or commercial electronic messages with false or misleading content. No organization wants to find themselves the subject of a complaint on the spam reporting centre.