Industry Committee on Oct. 19th, 2017

[Majid Jowhari, Liberal, Richmond Hill, ON]

I understand that piece. I think by now we've got that piece. The key thing is what specifically do we have to do to laser-focus on those malicious communications? Are you saying that by amending and by excluding, then by default we are lasering in on or focusing on the malicious, and therefore the act is kind of complete—i.e., just exclude it, amend it, and by default it will focus it?

[Andrew Schiestel]

I think so in general, because the act really broadly catches almost every electronic message under its purview. I think you're already catching a lot of the stuff where consent is not present. If you can do a better job in the act of defining when it's practical to send a commercial electronic message, that's probably fine.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Great.

Jason.

[Jason McLinton]

The answer to your question, Mr. Jowhari, is a resounding “yes”. If the committee were to make the five recommendations that the RCC has put forward, by default the enforcement, energies, and resources would target those areas where they should be targeting. In addition to that, as I mentioned before, you have the secondary benefit of actually promoting the type of e-commerce we want to see in Canada.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

Wally.

[Wally Hill]

I'm going to let David respond.

[David Elder]

I think you might have to do a little more there. Part of the problem is what the act targets and another part is what the enforcer targets and where they put their resources. One of the possible mechanisms we have seen in other statutes is the authority of the department. In this case you could have a direction to the CRTC that says that it should be prioritizing certain types of cases. Michael Geist says there are still two out of the top 100 ROKSO-rated things here. If you look at the CRTC decisions and activities, they're looking at reputable, well-known Canadian brands.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Let me come back to that. Let's say we amend and now we have laser focus. Do you still suggest then that we should repeal the PRA? Now that we are getting to malicious communication and those responsible, should we repeal the PRA or should we keep it and perhaps adjust the penalty?

[David Elder]

If there is a way to laser target only malicious types of spam, which would be a huge change to the act, then I don't think we would have that concern with the PRA.

[Majid Jowhari, Liberal, Richmond Hill, ON]

How much time do I have?

[The Chair, Liberal, Dan Ruimy]

None.

Sorry. There may be another round.

Mr. Bernier, you have five minutes.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you for being with us. The work we are doing is very important, and we know we need to change that legislation. I want to ask you about the private right of action. As you know, it is not enforced. We had people in committee who told us that we must not have this in the new legislation.

What do you think about that private right of action? Do we still change it? Must we have a way to use it more precisely? Do you have any ideas about that from the legal side? I don't know if Ms. Provato has any ideas about the private right of action.

[Stephanie Provato]

We should approach the private right of action the way Mr. Elder was saying in answer to the previous question. If we are able to target the most malicious forms of spam, which is what CASL was intended to do, then the private right of action can come in the way it is. I don't think we'll be running into the issues we're having with the private right of action as it stands right now.

[Maxime Bernier, Conservative, Beauce, QC]

Yes.

[Wally Hill]

As long as CASL applies broadly to the issue of regular messaging to consumers, and it does that to provide a backstop that enforces good marketing practices, the danger is that unless the private right of action is either removed or narrowed, it is a perfect vehicle for class action lawyers to go after some company that made a small error and sent out 100,000 messages to people they shouldn't have. It's not damaging to those people, but there are statutory damages in the law that could result in enormous fines. This is the kind of chilling effect.

I don't think we're going to see CASL change to the point where it's only focused on malicious activity. It would be nice to get it set up so that it's largely focusing on malicious and negative activity, but it's still needed to enforce good marketing practices. The private right of action must be dealt with, either narrowed substantially or removed from the law. When I say “narrowed”, I am saying to either take out the statutory damages and force plaintiffs to demonstrate they've been damaged and incurred costs, or narrow it so only ISPs—as has been done in other jurisdictions—would be able to use that part of the law to go after players who are abusing their customers, their whole network. It's important to deal with the private right of action no matter what.

[Maxime Bernier, Conservative, Beauce, QC]

You had a discussion about this being anti-competitive to Canadian business. I think it was you, Andrew, who had a discussion about that. What can we do to make the legislation less anti-competitive?

[Andrew Schiestel]

When a business is collecting information from a consumer who provided that information, you could call that “implied consent”. That's not spam in most people's definition. Spam, in most people's definition, is when you don't know the sender and it's kind of a bulk email. If an accountant is providing an e-report on a website and a user has to put in their information, whether they check a box or not, just call that “implied consent”, because the user can always unsubscribe and still be protected. That's the first thing.

A second recommendation would be to call it “implied consent” in the case of any two people mutually connected on a social networking website or an instant messaging system. Bring all practical situations that make sense under “implied consent”.

[Maxime Bernier, Conservative, Beauce, QC]

Okay, great.

I have a last question, maybe for Mr. McLinton.

Do you have any idea of the compliance cost for small businesses under that legislation?

[Jason McLinton]

I don't have figures in terms of the compliance costs. It obviously depends on the size of the business and what they're involved in, and every business is different. What I am hearing from the independent members is that it is very onerous. A lot of these are family-owned, family-run businesses. Retail is a very competitive environment. Rather than taking that time to be dealing with buyers or doing additional marketing, they're using their valuable time to fill out forms, or using what scant resources they have to pay people to help them with databases and stuff.

I don't have a figure, but what I'm hearing universally is that the cost is high in dollars and in effort and time.

[Maxime Bernier, Conservative, Beauce, QC]

Wally, did you want to add something?

[Wally Hill]

Yes. We are a small business with approximately 20 or 22 employees. It cost us $20,000 to amend our database system, and over and above that, I had a project team working on this quite a few hours to create policies and procedures for our organization. I've said to people that it has cost maybe $40,000 for our little organization, but millions for big organizations.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Mr. Chair. I have what I wanted.

[The Chair, Liberal, Dan Ruimy]

Just for you, Mr. Bernier.

We're going to move to Ms. Ng for five minutes.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

It's great to be in the last round, because a lot of ground has already been covered. It is such a challenge for the work that we need to do, because on the one hand, we totally want to make sure that we have an environment and a climate where businesses are able to do business and to do it with ease and be competitive, and to be competitive internationally. At the same time, we need to make sure that this piece of legislation that was created in the first instance is actually intended to do what it needs to do: to get rid of the bad players and protect people. We haven't heard a whole lot from groups or individuals.

I'll give you an example. My riding is perfect. I have a proliferation of amazing businesses ranging in scale from small and medium-sized, or SMEs, to multinationals, and I have a whole range of people who are seniors, who are regular people. They cover the gamut of diversity, so you're not necessarily looking at people whose first language is English. I'm looking for practical solutions that don't throw the baby out with the bathwater but can help achieve that balance, as almost every single one of you said. I'm just going to go to a couple of them.

Mr. McLinton, on the point, if simplified, could there be technological tools that will then help people comply with greater ease? You said it costs $40,000 for your little organization. Have your clients or your members told you that this is what we could do to comply?

[Jason McLinton]

Thank you for the question. Yes, there are many tools out there, and by its very nature, technology is constantly changing. With anything we put into legislation now, within a year or two there will be other tools there to assist.

Our members are easy to find. They have stores in your riding. Whatever brand the consumer has subscribed to, you know where to find them. They're not difficult to find. If I can allude to a point I made earlier, it is not in their business interest to be providing marketing materials to consumers who don't want them. In terms of the level of oversight and the amount of compliance and enforcement required for these bricks and mortar brands that we all shop at every day to get our necessities and some luxuries that might not be a necessity, it's not in their business interest. Therefore, in terms of actually putting in tools and legislation and that sort of thing, they're policing themselves because it's just good business.