Ontario Seeks Input on Proposed Changes to Consumer Protection Laws

On December 1, 2020, the Ontario Ministry of Government and Consumer Services issued a consultation paper entitled Improving Ontario’s Consumer Protection Act: Strengthening Consumer Protection in Ontario (Consultation Paper). In an effort to modernize and strengthen consumer protection rules, the Consultation Paper proposes several changes to Ontario’s Consumer Protection Act, 2002 (CPA) that will likely form the basis of a future legislative overhaul where the existing CPA would be repealed and a new statute would come into force. The Consultation Paper invites the public and industry stakeholders to provide their commentary on the proposed reforms, in addition to sharing any further suggested amendments to the CPA.

The Consultation Paper launches the second phase of Ontario’s comprehensive review of the CPA. On March 12, 2020, the Ministry of Consumer and Government Services began its review of the CPA with an online survey. This announcement marked an important step towards modernizing the CPA as the review aims to address consumer awareness of existing consumer rights, consumer experiences, technological advancements, and marketplace innovations. As a preliminary step, Ontarians were asked to participate in an online survey that focused on consumer perceptions and experiences. Recognizing the impact of the COVID-19 pandemic on consumers and businesses, the online survey was updated with pandemic-related questions. This initial phase of the CPA review concluded on July 17, 2020.
 
The CPA has not undergone a review since it came into force in 2005. This exercise is meaningful to businesses and consumers alike given the wide reach of the CPA, which extends to a number of consumer-related transactions and contracts, including internet agreements, direct agreements (i.e., door-to-door sales), remote agreements (i.e., goods and services offered over the phone or by mail) and future performance agreements, to name a few. The proposed reforms in the Consultation Paper seek to modernize and align the CPA with current marketplace realities while simultaneously presenting a framework that will provide consumers with greater protection from hidden costs and scams.
The Consultation Paper suggests changes to the following topics under the CPA, with a view to bringing about clearer, stronger, and more consistent laws:

• Consumer Contracts
• Unilateral Contract Changes
• Unfair Practices
• Price Changes in Contracts
• Contract Breaking Offers
• Purchase Cost Plus Leases
• Registration of Notices of Security Interests
• Timeshare Disclosure and Exit Rights
• Basic Consumer Rights
• Remedy Rights
• Ministry Enforcement Powers

It is noteworthy that the Consultation Paper proposes consolidating the existing written contract disclosure requirements for multiple contract types into one set of rules, and adding more examples of expressly forbidden misleading practices, such as false claims of government oversight or other licensing and false prize claims, as unfair practices. Moreover, the Consultation Paper acknowledges the impact of online media on business and consumer interactions. In particular, online business reviews published by consumers have been subject to an increasing use of anti-disparagement clauses in contracts, meaning that consumers may be billed if a business deems a consumer’s online review to be disparaging. Currently, the CPA does not address unfair contract terms in connection with this reality. Consequently, the Consultation Paper proposes whether a new CPA should protect consumers against contract terms that limit consumers’ rights to make fair comments.

NEXT STEPS

Businesses that provide goods and services to consumers should review the Consultation Paper and the proposed reforms in depth, in addition to considering other consumer protection topics under the CPA that no longer reflect business realities and would benefit from a legislative review. Any comments must be provided no later than February 1, 2021 and can be sent by email to [email protected] or by regular mail to:

Consumer Protection Act Review
Manager, Consumer Policy Unit
Ministry of Government and Consumer Services
56 Wellesley Street West – 16th Floor
Toronto, ON, M7A 1C1
 
For further information, please contact:

Jacqueline Shinfield                  416-863-3290
Bonny Murray                           416-863-5272
Maria Nasr                                416-863-2297
 
or any other member of our Consumer Protection or Financial Services Regulatory groups.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.