Evidence of meeting #36 for Industry, Science and Technology in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spam.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Janet DiFrancesco  Director General, Electronic Commerce Branch, Department of Industry
André Leduc  Policy Analyst, E-Commerce Policy, Department of Industry
Philip Palmer  Senior General Counsel, Legal Services, Department of Industry

4:25 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Thank you.

Mr. Chong was in the IT business before I got here.

First of all, I want to thank you for the work you've done on this. I'll be frank with you: I've been here only three and a half years, but often we have witnesses, and sometimes I'm not sure how effective it is, but I would say that you, as staff from the department, certainly listened and made some major changes here to try to accommodate that. I'm really, really appreciative of the work you've done in providing it to us.

So I have just a couple of really quick questions.

One, there was a question about enforcement. Do you have any issues about the three-agency enforcement? There were a few in front of us before saying that it's ineffective or could be ineffective. Do you want to comment on that now that you have a chance?

4:25 p.m.

Policy Analyst, E-Commerce Policy, Department of Industry

André Leduc

Ultimately we're just expanding the mandate of these three enforcement agencies. The Privacy Commissioner is responsible for PIPEDA and the Privacy Act and protecting the personal information of Canadians. So she is responsible for protecting electronic addresses and personal information that is accessed through unauthorized access to a computer system.

The same rules apply for the Competition Bureau. We're just extending their mandate to focus on the online environment. It's a bit of a newer mandate, but I would again argue that it might be kind of an extension of their expertise under do-not-call and telecommunications for the CRTC.

In almost every case of legitimate enforcement around the world, it is the communications authority that is enforcing the regulatory regime. So they're definitely the right pick, because they're going to be cooperating with their counterparts internationally.

4:25 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

One other comment we heard at the last set of meetings was from the legal profession. I believe it was that organization that represents lawyers across the country that was talking about a couple of small wording changes to the Competition Act. I didn't see it in here, so I'm assuming you didn't agree or didn't think it was needed. Would you like to comment on that?

4:25 p.m.

Senior General Counsel, Legal Services, Department of Industry

Philip Palmer

Yes. In my view, the issue is a very small one. It relates to the headers and address information contained in e-mails. Their suggestion relates to the materiality test, which applies to other kinds and classes of representation. So when you're looking, for instance, at the body of a message, you look at all of it and you say the representation made is material and it is false, therefore it is offside.

To our view, the information that's contained in a subject line or return address information in particular is, by virtue of how it's positioned, material. It's material if you think you're getting an e-mail from the Royal Bank instead of from We-are-robbers.com. It is material if it says, “Special program for the first 100 persons who sign up”, if that is false. It isn't that we've dropped materiality; it's just that we don't see how what is in the subject line and what is in the addresses is anything other than material.

4:30 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Okay, I appreciate that.

Another comment we heard often from witnesses, which surprised me a bit, was that this is a great act, except for them—you know, “Do unto others but not unto me”. Anyway, we have in here the private right to sue or to further action. I actually agree with that.

To those who didn't agree, would you like to comment on what those witnesses had to say about the private right to action?

4:30 p.m.

Senior General Counsel, Legal Services, Department of Industry

Philip Palmer

Yes. Businesses have a legitimate concern. I don't pretend that any time a new source of legal worry and fret is created that it is without its costs and concerns for the business community in particular. The question is on balance, I guess, whether the evils that might arise from it are outweighed by the benefits.

The evils that are largely talked about are the evils of frivolous suits, people bringing unfounded class actions, or competitors using strategic litigation to cow or force behaviours on their competitors. These are possible, but Canadian law is such that class actions are difficult to mount, difficult to get certified, and if you lose or recover only a very slight amount, then you're likely to be paying the costs of the person you sued. So most people don't do this unless they have a really good reason to grieve.

The benefit of the private right of action is that it in fact allows people to act in accordance with the harm that's been done to them. The CRTC, the Competition Bureau, and the Privacy Commissioner have limited resources. They're not going to be able to investigate every instance of a complaint. In order that people who are not within the little set of priorities of those organizations but have, for their purposes, suffered a real loss, it gives them the opportunity to take a remedy against the person who has harmed them. I think that's a great benefit.

4:30 p.m.

Conservative

The Chair Conservative Michael Chong

Thank you very much, Mr. Wallace and Mr. Palmer.

Monsieur Bouchard.

4:30 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Let's talk about the issue of networking among business people. If a real estate agent meets a lawyer at a reception, speaks with him and gives him his business card, could he subsequently communicate with him?

From what I've been able to see, there would be restrictions on any exchange of e-mail and any continuation of the communication established at a social reception.

Could you tell me whether you have some opening, and whether that opening could be even bigger?

4:35 p.m.

Senior General Counsel, Legal Services, Department of Industry

Philip Palmer

Yes, the opening is there. If you look at clause 10(3)(c), it reads as follows:

(c) the person to whom the message is sent has disclosed, to the person who sends the message, the person who causes it to be sent or the person who permits it to be sent, the electronic address to which the message is sent indicating a wish not to receive unsolicited commercial electronic messages at the electronic address [...]

So we have made amendments to take those exact circumstances into account. A lawyer goes to a reception and gives his card to a real estate agent. That's allowed. It's clear now that that way of communicating is legitimate.

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

That means that the lawyer or real estate agent wouldn't need prior consent—

4:35 p.m.

Senior General Counsel, Legal Services, Department of Industry

Philip Palmer

—expressly given—

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

—to communicate with him, to offer his services, and vice versa. Is that in fact how you interpret it?

4:35 p.m.

Senior General Counsel, Legal Services, Department of Industry

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

I have another question on implied consent. A number of submissions were made concerning the 18-month time frame for business-to-consumer communications. If I understand correctly, that 18-month period has remained unchanged. You haven't increased it. A number of submissions were made on that point. Let's take the example of a real estate agent, since I just talked about that. A real estate agent sells houses. He wants to sell a house today, and in five or six years, his client may want to resell the house. So I find the 18-month time period restrictive. I would like to know the justification or motivation for that time period, which is still 18 months.

4:35 p.m.

Policy Analyst, E-Commerce Policy, Department of Industry

André Leduc

I'm going to clarify that situation by citing an example. I give my e-mail address to a person and tell him to contact me in future. That may be in three, five or six years; there's no time limit on express consent. If the person to whom I give my e-mail address forgets to ask for my express consent, he has 18 months to do so by following up by e-mail.

We took the 18 months from the other bill—the Do not call list. I consider a period of a year and a half quite enough time to follow up with a client. A legitimate business should do so within four, five or six weeks. If express consent is obtained, it is valid for an indefinite period of time, but you have to set a date for implied consent.

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

I'm going to cite an example. I buy a car from a dealer and I trade it in at the end of four years. At the time of purchase, I tell the vendor that he can call me in four years. In that case, would the act enable him to send me an e-mail in four years?

4:35 p.m.

Policy Analyst, E-Commerce Policy, Department of Industry

André Leduc

If you've given him your e-mail address and you've asked him to send you an e-mail in four years, if the vendor has kept a file on that relationship or a card authorizing him to—

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

The proof is my business card.

4:35 p.m.

Policy Analyst, E-Commerce Policy, Department of Industry

André Leduc

He has to keep proof of that relationship.

4:35 p.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

All right.

I read that regulations have to be made, which supposes that this is under the minister's authority: it's he who decides when the act will be implemented.

Could you give me some clarification on that point? I haven't seen an effective date. Will the legislation be enacted after being passed in the House and going through all the stages, including reading by the Senate and publication? Is it applicable at that time, or are regulations required to make it applicable? Is it the minister who chooses the effective date?

4:40 p.m.

Senior General Counsel, Legal Services, Department of Industry

Philip Palmer

The legislation is not enacted until all the regulations are ready. Royal assent is the final step in Parliament. However, between royal assent by Parliament and enactment by Cabinet, at least six months will probably elapse, perhaps more, first to allow the regulations to be put in place and, second, so that the industry can be adequately consulted and given the necessary time to react to the new regulatory framework.

4:40 p.m.

Conservative

The Chair Conservative Michael Chong

Thank you, Mr. Palmer.

Thank you, Mr. Bouchard.

Mr. Van Kesteren.

October 7th, 2009 / 4:40 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Thank you, Mr. Chair.

Thank you for this excellent presentation. Thank you for your hard work as well.

In your opening remarks, you answered my question about the installation of software. That was a concern. I'm glad to see that you've addressed it.

I have one other thing. I don't want you to have to talk about it for too long, but one of the concerns of one of our delegations here was that the penalties were too high. Are we going overboard?

4:40 p.m.

Policy Analyst, E-Commerce Policy, Department of Industry

André Leduc

Again—and Mike said this last time—it's to a maximum of $1 million, or to a maximum of $10 million, and I've gone through the whole process of the factors that they have to take into consideration before making a final assessment of what the monetary penalty in fact should be. But we can tell you about international cases, such as a case going on in Australia, for example, where two brothers had one very small shop and a few computers. They had this spam outfit going where they were changing the labels on herbal remedies to call them penis enlargers and sending them out all over the world. In a matter of three and a half months, these guys raked in over $3.5 million of net profit.

So the reason we need penalties in this amount is to address the business model. These guys are making a ton of money, and if we throw a $15,000 fine at them, they'll pay it and go merrily about their business and just keeping doing it and doing it. We have to go after their finances.

4:40 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

When we had the Canadian Bar Association here, there was a suggestion that this may not be able to sustain a charter challenge. What is your opinion? We had another group here that disagreed. Have we looked at this?