Thanks, Dan.
Committee, Dan was very kind before this and said he'd pinch his fingers when I'm coming up to eight minutes, so I appreciate that, Dan.
My name is Andrew Schiestel. Thank you for having me.
By way of background, I'm the current president and chair of the London Chamber of Commerce, and president of tbk Creative, which is a web design and digital marketing agency based in London, Ontario with 20 staff members. I'm the founder of Lighten CASL, which is a not-for-profit organization committed to seeing CASL improved to be easier for companies to comply with while still protecting consumers. In 2015, through the London Chamber of Commerce, I was one of the authors of the Canadian Chamber of Commerce policy paper on CASL reform, which was delegate approved at the 2015 Canadian Chamber AGM. I currently serve on the Canadian Chamber of Commerce policy task force on CASL reform, and articles I've written on CASL have appeared in the Financial Post, The Globe and Mail, and The London Free Press.
I don't think anybody is denying that CASL had good intentions in its creation. We need anti-spam legislation that thwarts harassing CEMs, people who ignore unsubscribe requests, malicious spam, and cybersecurity threats. We need strong legislation to stop those malicious actions, but CASL overextended its aim, and it has left our Canadian companies in a situation where it's anti-competitive to comply with when they're competing against foreign companies. It's excessively expensive to comply with as well, and I'll give examples of both.
It's anti-competitive to comply with, so let's take a Canadian retailer for instance. They are going to run a sweepstake, which they will oftentimes do as part of thriving as a business. When they're setting up that page, they need to do a lot of things financially. They need to pay money to set up the page with web design costs. They have to spend money on a prize. They could be giving away a vehicle to a consumer. They spend money on legals. If they're in a certain province, like Quebec, they might register the contest with the proper regulator. There are human resource costs, advertising costs, and the list goes on.
What they'll then do is have an opt-in mechanism, a check box that's unchecked, and in my experience in the digital marketing profession, I find that, give or take, 50% of consumers, when they're entering these types of sweepstakes, will check that box. So then what the business is left with is a situation where they have expressed consent under CASL for the 50%, but then, for the other 50% who don't check the box, they don't have expressed consent, but they also don't have implied consent because the provisions of applied consent under CASL are too narrow. But that would be kind of a practical situation where consent may be implied, since the consumer gave the business their contact information in the first place.
All that might sound fine if Canada were in a vacuum, but we're not. We compete against companies around the world. In the same situation in the U.S., a retailer, a competitor to our Canadian company, is running a sweepstake. Under the CAN-SPAM Act, 100% of the leads that they get in they can send to them what CAN-SPAM calls commercial electronic mail messages, which are essentially the same thing as a CEM. When you break that down, a Canadian company in that situation can send CEMs to 50% of the leads they get in, and the U.S. company can send to 100% of the leads they get. The consumer is always protected because they can unsubscribe at any time. That's one of the instances that puts our companies at a competitive disadvantage.
Number two is that the act is excessively expensive for companies to comply with. I'm going to bring up—and this was brought up by Wally, with the CMA—the two-year and six-month rules. I think Stephanie also brought this up earlier. I'll give a real, pragmatic example of how a company can go about implementing this, because I've worked with companies who are grappling with this situation.
If you're a company, and you have a lead coming into your website—say it's a home renovation company—under CASL, you have two years from the date of last purchase and six months from the date of inquiry if the consumer doesn't provide express consent. Here's where it gets tricky. You need to spend money on a software solution that will know to purge that user after six months from the date of that inquiry. If the consumer purchases a product, you have to reset the timeline to purge them in your system two years from the date of that purchase. If they purchase again, your software solution has to reset it again. If they provide express consent during that two-year period, then you change the label, and now it's express consent. If they buy another product, it has to have the intelligence not to reset as two years, though, because they provided express consent. Is anybody confused yet?
That's one of the fundamental issues with CASL. The real cost of that is minimum five figures, and definitely six figures in a lot of instances, to build and maintain software to do that. You have to integrate it into your CRM or ERP, communicate through a bridge with your email marketing software, and vice versa. It has to go back and update accordingly. It's a big software project.
Take that one instance and scale it out now to the approximately 1.17 million companies in Canada, and you're looking at a very problematic situation for our economy and our Canadian businesses.
On September 26 the INDU committee had CRTC in and the conversation kept coming up about more education. Businesses don't need more education on spam. CRTC has probably done a very good job on the balance of things with education. I think businesses, on the balance of things, are very capable people. What we need is legislation that's improved to be easier for businesses to comply with while still protecting consumers. I think fundamentally it's an issue with the act itself. That's why we're still doing all this training after three years.
Also, what I've just said above isn't theoretical. It's actually happening every day in our businesses. I'm going to give two examples.
Earlier this year I spoke with a financial services company with 600 employees based in southwestern Ontario. They sell RRSPs, mortgages, bank account services, etc. I chatted with a vice-president and a marketing manager there. They told me that when somebody inquires on their website, they do not send out any group CEMs to that person even though that consumer provided them their email. They said that they do not want to take the risk of violating CASL with the six-month rule so they would rather not send out group CEMs at all in that instance. But this is a situation where the consumer has actually provided this company their information in the context of receiving services down the road. Again, if Canada were in a vacuum, that would be fine, but they compete against fintech companies all over the world that are emailing Canadians all the time ignoring CASL, or not even aware of CASL.
As a second example, earlier this year I spoke with a software company. They have 100 employees, and they sell globally. I spoke with the director of marketing. She told me they went through a recent web design project where they had to build a form for users to contact them from around the world and they had a decision to make. With option A they needed to have a form that would be dynamic, so if a Canadian put in their information, it would switch the information so that it complied with more stringent consent requirements under CASL. With option B the form would be static so it's universal, but they won't send CEMs to Canadians to fill out the form. They'll only use the phone. Guess what option they chose? Option B. They chose to have it static and they won't send CEMs to Canadians for filling out that form. They'll only use the phone in that case. It's not worth the risk to them.
What can be done? Number one, I would recommend expanding the circumstances in which implied consent is present. Here are some examples. If one party gives their information to another party, call it consent. Two people mutually connected on a social networking or instant networking website call that consent as well. As other witnesses said, remove the two-year and six-month rules. A consumer might not be ready to buy another house from the realtor within two years, but there still might be an affinity there and they can unsubscribe at any time. Remove those rules. Google and Shopper Sciences did a study and some purchases take over one year to actually complete, especially when it comes to tech and appliances.
In the coming weeks, look for the Canadian Chamber to provide some additional recommendations on some of the nuances of CASL reform and some of the software recommendations.
Thank you to the INDU committee for the important work that you're doing. CASL can be improved to be easier for companies to comply with while still protecting consumers. By finding the right balance with this policy, we can set Canada up to thrive in the digital economy.
Thank you, and thank you, Dan, for the extra 30 seconds.