One month into Canada’s Anti-Business Law

On July 1, Canada introduced new legislation known as CASL, or “Canadian Anti-Spam Legislation.” Though intended to stop spam, after the first month it appears to have no impact other than stopping business opportunities for Canadians.

This overbearing, cumbersome legislation puts so much bureaucratic overhead onto management of online communication that only the largest companies can put sufficient staff and resources into play to remain competitive.

Not just mailing lists

Most people think the law only affects Email lists. Not so. All messages, whether sent from a single computer or mobile device, whether related to business or personal matters (except between family or close friends) are affected. The law applies to every electronic message that might be deemed to have some kind of commercial aspect, even if there’s no expectation of profit. A school teacher sending an Email to parents about an upcoming laser tag field trip could be deemed to have “commercial” value to the laser tag vendor and therefore falls under the law. It would not be permitted.

Likewise, sending an Email to your neighbors about an upcoming neighborhood garage sale is considered to have “commercial” value and is therefore illegal. Recommending someone else is also considered a commercial message, so without special permission you can’t send an Email recommending a contractor for the kitchen renovation you heard about. People are still doing these activities, but only because there is so much ignorance about the law. Every one of these people is at risk of financial penalties that can be severe.

Though intended to stop spam, the law appears to have no impact other than stopping business opportunities for Canadians.

Way beyond Email

The law doesn’t stop with Email. It applies equally to text messages, direct LinkedIn messages (known as “InMail”), and Twitter messages if sent directly to another user. Sending a Facebook message asking someone to like your page is also prohibited. In fact, under the law, asking someone if they want to consent to receive Emails is itself considered a commercial electronic message! Penalties are extreme, with fines of up to $1 million for individuals and up to $10 million for companies. That’s for each violation!

As Vancouver lawyer Steve Szentesi put it in an interview published in Canadian Lawyer, this is more severe than penalties for racketeering. He pointed out that “When you compare price-fixing of auto parts versus spam — what, you can’t just delete the message?”

“Seriously, how hard is it to just delete an Email?”

Surprisingly, nowhere in the legislation does it even define spam.

It might not be so bad if violations could be dealt with through a standard legal process such as going before a judge. This would limit them significantly and reduce the risk of malicious complaints. Instead, violations will be dealt with through low-level staff bureaucrats who determine on a case-by-case basis how bad the violation was and decide an appropriate fine, which will be collected through the CRA, Canada’s tax collection agency.

Anyone can file a complaint, and a great many of these will be malicious, filed by competitors, ex-employees who have a grudge, or opponents of your cause such as environmentalists filing complaints against oil companies or atheists complaining about a church. Consider that there are tens of thousands of false Yelp and Google Places listings expressly created to discredit the businesses they pretend to represent and you can see the very real world into which this law now opens a new door. The legislation provides no mechanism for defending oneself against such malicious complaints.

National law firm Osler reports, “The new rules will be enforced by three regulators with active enforcement offices and by the courts. Anyone who believes they have been affected by your non-compliance will have standing to commence a private action. Class actions are widely expected.”

Although fines will not begin until 2017, thousands of complaints are already being received and tracked. Who knows how many innocent people and companies are already being lined up in the government cross hairs?

Consider the following challenges created by this legislation:

CASL ends networking

The law ends traditional networking

Under CASL, nobody can talk to anyone electronically (except family and friends) unless they receive direct permission. This may sound good at first glance, especially to someone who doesn’t engage in marketing or networking. But for small business, this is devastating!

Sending a “nice to have met you” Email after a networking event can be, technically, a violation of the law. Even the most innocent message, if the signature in the bottom includes your marketing slogan, becomes a “commercial electronic message” under CASL.

The legislation defines two kinds of permission. One is Implied permission, in which case someone is deemed to have given a kind of permission by making their Email address available to you. The other is Express permission, which happens when you subscribe to an Email list.

Implied permission expires after two years. This means every Email address in your contact list must be tied to a date. Networkers must now track the permission date for every message sent. Imagine the administrative headaches this represents for a typical sales professional with the thousands of prospects they regularly network with. How can a home-based business or one-person consultancy even begin to meet this administrative burden?

Good networkers make notes of important details such as interests or goals. They might then send follow-up messages that relate. For example, if a prospect said they are looking forward to someday traveling to Australia, a good networker will occasionally send information that could be useful for someone planning such a trip. This builds the relationship and creates goodwill. Under CASL, such Emails will be deemed commercial in nature if they link to a commercial website, even if that site has nothing to do with you or your business. Thus, after two years you won’t be able to send those messages anymore without risking a violation fine.

Referrals equally limited
The law has specific wording to deal with referrals of others. If you refer someone, that party can only make a single contact. Only one message. They can’t even send a follow-up Email asking if the person received their first message! For example, let’s say you referred a business coach to a networking contact who needs help with sales training. The coach can only send one message to your contact. They only way the coach can message them again is if they specifically opt in to an Email subscription.

If you refer someone, that party can only make a single contact. Only one message. They can’t even send a follow-up Email asking if the person received their first message.

CASL makes Canada uncompetitive

The law makes Canada uncompetitive

Only 1.3% of spam in Canada is actually generated within Canada, according to research by Kaspersky Labs. So the law was intended to have global reach, allowing the Canadian government to fine individuals and businesses outside the country for spam sent into Canada. The result of this is that businesses in the USA and elsewhere are deciding that complying with this onerous law for a single country is more hassle than it’s worth. They are stripping all Canadian Email addresses out of their systems at the server level. Software such as CASL Mail Rinser automatically determines if the recipient is Canadian and keeps that message from being sent so that the company can’t be held liable for inadvertent violations.

We’re in the shadow of a business giant, already struggling to compete. This law is a serious blow to Canada’s competitiveness.

American businesses are already starting to strip Canadian Email addresses from their systems at the server level.

Hundreds of thousands of Canadian small businesses do business in the USA, and even more depend on US and international resources for information, such as reports and updates. Under CASL, these businesses are put at a distinct disadvantage as mail rinsing systems come into play.

It can be reasonably assumed that once a few international fines are levied, worldwide business will scramble to remove Canada from their communications chain.

What’s interesting is that there was already a well established law in place, known as CAN-SPAM, which involved a joint treaty between Canada and the USA. It was a business-friendly law and was quite effective. There appears to have been no logical reason to bring in a unique law just for Canada.

CASL kills social media

CASL kills social media

Across the country, millions of Canadians engage in friendly social media interaction. They like Facebook pages, follow people on Twitter, and connect on LinkedIn, Instagram and other communities. Under CASL, wall posts are unaffected, but all direct messages fall under the legislation if they have any commercial content, whether intentional or not. No more private messages with links to a product you think is cool. No more recommendations for a person, company or service. No more referral messages. All of these common interactions are banned under CASL. Yes, people will violate this law, but that doesn’t make the law acceptable! Do you want to be the first person singled out because you happened to send the wrong message at the wrong time?

No more private messages with links to a product you think is cool. No more recommendations for a person, company or service.

CASL stops emerging product development

The law stops emerging product development

Under CASL, when a company receives an Email inquiry, it can only communicate with the interested party for six months. Thereafter it may only communicate by phone, postal mail or if the interested party expressly subscribed to an Email broadcast list. How is this even remotely practical?

All follow-up messages must cease exactly six months after the initial inquiry or expression of interest.

This is not how real business is conducted. Manufacturing processes take years. Even business relationships, especially for some products and industries, can take years to develop.

I have expressed interest in many products based on a pre-production announcement. It could be a year or two before those products are actually available! Under CASL, all follow-up messages must cease exactly six months after the initial inquiry or expression of interest. How can any Canadian manufacturer hope to be competitive in this situation?

Meanwhile, American companies can deal with American inquiries for years while their products are being completed, while Canadian firms are at a disadvantage because their marketing efforts are significantly curtailed through this ridiculous legislation.

CASL burdens messaging

The law places undue burdens on messaging

Under this new anti-spam legislation, any message deemed to have any kind of commercial purpose, such as linking to a product or recommending a business, product or person, must include a full name, physical mailing address and one other form of contact info, as well as the reason why you are sending the message and a link to an unsubscribe page. This applies even in cases where the message is limited in length, like Twitter messages with their 140-character limit.

Defending this absurd requirement, the government tells businesses they simply need to include a link where this information is available. Most Twitter messages already include a link. Now you need to include a second one just to deal with the requirement for a name, address, relationship and unsubscribe option. Who on earth ever thought this was a good idea?

Most Twitter messages already include a link. Now you need to include a second one referencing your name, address, relationship and unsubscribe option.

With requirements and limitations like this, it’s no wonder millions of business people across the nation are afraid of communicating at all. But only 1.3% of spam was generated in Canada. This means that most Canadians are not seeing a drop in spam despite the law. Some claim that because of the drop in legitimate messages they are seeing even more spam since the law came into effect. Even if the law were to stop 100% of Canadian spam, someone receiving 100 spam messages per day would still see 99 of these in their inbox. Meanwhile, small businesses have their ability to do business severely curtailed and live in fear that anything they communicate could lead to debilitating fines.

Speak up and help put a stop to this insanity

A number of business groups have already issued official letters of concern addressed to Canada’s Minister of Industry. The Adwiz, together with business lawyer Dana Gordon of Benchmark Law Corporation, has drafted a similar expression of concern and is inviting small business people across the country to join in sharing their concern about this legislation. The letter includes a number of recommendations. We are just getting started with this campaign and already there has been exceptional response. If you’d like to add your voice to this effort, please get in touch today.

View the letter to Canada’s Minister of Industry

What do you think of CASL? Chime in using the comment box below. Oh, and don’t forget to subscribe to eNews broadcasts so that I can keep you updated. To subscribe, click the button below.

More information on CASL
Government of Canada CASL website
CRTC CASL information site
How the law applies to registered charities
Bennett Jones CASL information

George Pytlik

George Pytlik has been involved in the advertising industry for over 30 years and designed his first website when the Internet was one year old. He was an internationally recognized speaker on advertising and branding and served on a number of communication committees at various times throughout his career, as well as writing a regular column for Marketing magazine.

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