Thank you, Mr. Chair and committee, for the opportunity to be here today. My name is Kim Arsenault. I'm senior director of client services at Inbox Marketer.
We are a data-driven email marketing services and technology solutions company, and we've been leaders in the email marketing space for over 15 years, servicing clients across North America and into Europe. We've been at the forefront of CASL for over eight years, working closely with the Canadian Marketing Association as part of the 2005 federal task force on spam as well as with Industry Canada to help educate companies on what it means to be CASL compliant.
The good news is that three years post-CASL, the clickstream data that we have reviewed from a cross-section of our clients compared to one year pre-CASL indicate that email metrics have improved overall in terms of engagement rates, bounce rates, unsubscribe rates, and deliverability into the inbox. This is largely due to senders adopting better list hygiene practices that have resulted in better-quality email lists and less sending to unsolicited or invalid email addresses.
In our opinion, since the implementation of CASL in 2014, Canadian email marketers have become more disciplined in their email operations, and legitimate marketers in Canada have taken CASL very seriously. Responsible marketers have adapted by being more diligent. We have seen them create task forces and appoint individuals to actively manage CASL compliance through regular spot checks, technology integrations, and organizational training.
With that said, we do have a few concerns we want to bring forth to the committee today.
The first is the economic burden that CASL compliance is placing on many Canadian businesses. It is costing them anywhere from tens of thousands of dollars to millions of dollars, depending on the size of the organization, to properly be able to update their processes and technologies to be CASL-compliant. These are just process and technology costs. You also have to factor in the resource costs of continually training and educating staff on corporate compliance.
A related concern is that even when businesses have implemented corporate compliance programs and updated their processes and technology, it's still very unclear what exactly is required in terms of record-keeping, which is very problematic for organizations that are attempting to comply with the law. The CRTC has issued general guidance with respect to compliance, but has also repeatedly stated that companies are free to interpret how to apply effective record-keeping to their situation.
The fact is that companies are having to invest a lot of money and resources into setting up their systems and processes based on their interpretation and educated assumptions, only to risk finding out that these may not be acceptable in the event of a CASL challenge. It would be very helpful if the government could provide clear guidance and specific examples on exactly what type of record-keeping practices would be acceptable in order to provide assurance to organizations that the time and resources they are expending are bringing them into full compliance with the law.
Second, we are still seeing that many organizations do not view CASL as a straightforward or intuitive piece of legislation. It's confusing for many companies, and for those who are not deeply familiar with it, it becomes a nebulous beast to try not only to understand it but also to consistently train their employees on what they think is correct.
Three years later, we are still consulting companies that are seeking clarification on what the difference is between implied and express consent. Due to the ambiguity and lack of clarity and guidance that has come from the government, we have seen some organizations eliminating the email channel as of way of communicating with their customers and prospects. We've heard from various financial and insurance companies, for example, that before CASL, they had sales teams and advisor teams that were using the email channel as a way of communicating offers and valuable content to their existing customers. With CASL fully in force, the fear and anxiety experienced by some organizations because of the lack of clarity and inaccurate information out there has inevitably caused them to eliminate email as a communications channel.
The email channel, for many years, has proven to give a 40:1 return on investment. Numerous studies continue to show that consumers prefer the email channel as a way for brands to communicate with them, so when a large organization eliminates the email channel for fear of not being compliant, it can have a very large impact on an organization.
Our third concern is that the regulators took years to write the CASL legislation. It started in 2004, and as we all know, it came into force in 2014. Technology moves at a very different pace. Marketing, for example, has changed more in the past five years than it has in the past 50 years, and the next five years are unpredictable in terms of how fast technology and digital media are going to evolve. We cannot have Canadian businesses in today's day and age relying more on vehicles like the phone, which are more expensive and less efficient than email and social media, because they're too afraid of what might happen when they use email. That's exactly the scenario that some Canadian businesses are in today.
CASL's objective is to promote the efficiency and adaptability of the Canadian economy. Having organizations eliminate the email channel or deciding not to market into Canada is not supporting this objective.
Many ask what the regulators are doing to keep up with the pace of technology and social media. The guidelines around how CASL applies to social media are extremely vague, yet social media are evolving rapidly. For example, more than half of the world's population is now online, which includes 2.7 billion active social media users. The fact is that digital and social marketing are a central part of a brand's tool kit today.
I have some further recommendations to be considered. The regulators need to allocate time and resources to keep their website updated and provide a lot more clarity on the issues that follow.
First, what constitutes a CEM, a commercial electronic message? This is not clear for many. This could be a newsletter, for example, where the content is focused around the credibility and knowledge of the organization. If the logo in the top left-hand corner links to their website, which then promotes commercial activity, does that make the newsletter commercial? It's unclear. Additionally, the fact that purely transactional-type emails are being considered a CEM under subsection 6(6) is extremely confusing, difficult to implement, and unnecessary. The recommendation is to remove subsection 6(6) entirely from the act.
Second, the regulators should provide more clarity on what is and is not allowed on social media so businesses can properly leverage those channels as part of their tool kit.
Third, the regulators should provide full transparency on what is required for proper record-keeping. Organizations should have comfort in knowing if their $4-million solution is going to be one that the CRTC will accept.
Last, the regulators should remove the confusion and requirement around six-month versus two-year implied consent. They should clearly define what express versus implied is and remove the time frame of six months and two years. It's a big challenge for many companies, both small and large, to properly maintain this level of detail that can be constantly changing and updating. Not all technology solutions out there are equipped to properly document this.
If you think of a large enterprise company that has multiple lines of business—multiple customer relationship management systems, multiple CRM systems—and they all have a business need to communicate with their customers, many of these customers are going to cross over the various lines of business. To expect that all messages are going to be managed and controlled in one central spot is not realistic for many organizations today.
It is also very confusing for many organizations regarding what scenarios allow for six-month versus two years implied, so what we've seen is that some organizations only allow express consent to communicate. The impact of this is that organizations are losing out on opportunities to grow their business because they don't fully understand how to rely on implied consent. There's too much fear, risk, and uncertainty for them.
Thank you again, Mr. Chairman and the committee, to have the opportunity today to share with you some of the impacts CASL legislation has had on Canadians and Canadian businesses.